Quantcast
Channel: BuzzFeed - Nitasha Tiku
Viewing all 113 articles
Browse latest View live

Google's Robot Dog Shows Off Some New Tricks

$
0
0

See Spot jump.

Nitasha Tiku / BuzzFeed

Boston Dynamics builds robots so lifelike that demonstrations tend to send viewers deep into the uncanny valley, sputtering clichés about Skynet and saving the human race. In February, the advanced engineering company introduced a nimble four-legged creation called Spot that rebounds with remarkable dexterity when kicked. The electric dog displayed some new tricks at a barbecue Tuesday night hosted by Google Ventures, the investment arm of Google, which acquired Boston Dynamics back in 2013 as part of its growing stable of robotics startups.

The barbecue took place in a transformed parking lot outside the venture capital firm's Mountain View office. Guests ate lobster rolls and slices of pizza from a food truck while drones flew overhead taking pictures. (Google Ventures has also invested in drone companies.)

See Spot prance, gallop, bounce, crouch, and run.

Nitasha Tiku / Buzzfeed

Nitasha Tiku / Buzzfeed


View Entire List ›


Ellen Pao Must Pay Kleiner Perkins $276,000 In Legal Fees

$
0
0

The venture capital firm had asked for $1 million. Meanwhile, both sides are fighting the battle for public opinion.

Justin Sullivan / Getty Images

Ellen Pao will have to pay her former employer, Kleiner Perkins, $275,966.63 toward legal costs incurred during her gender-discrimination lawsuit against the venture capital firm, according to a ruling issued today in San Francisco Superior Court. Kleiner Perkins, which in March was found not liable for Pao's claims of gender discrimination, was seeking to recover nearly triple that amount.

In late April, Kleiner offered to waive roughly $1 million in legal fees if Pao agreed not to appeal her high-profile case. In post-trial interviews, Pao emphasized that she wanted get back to work as the interim CEO of Reddit. So it came as a surprise to some when Pao announced plans to appeal, flouting the $1 million deal. At the time, Recode reported that Pao's appeal was probably more of "a play for leverage in the ongoing fight over who will pay for millions of dollars in court costs."

The acrimony has only intensified since then. In a court filing earlier this month, Kleiner Perkins revealed that after the trial, Pao asked for $2.7 million in legal fees in order to not appeal. Pao's attorneys immediately countered that Kleiner was widely publicizing "a confidential post-trial discussion" to the press "in a negative light."

At issue in today's hearing — the first time both sides are back in court since the March 27 verdict — was the cost of Kleiner's expert witnesses, a recurring theme during and after the trial. In a May filing, Pao's legal team described Kleiner's nearly $1 million in court costs as "grossly excessive and unreasonable."

Today's court decision is in line with a tentative ruling released yesterday by Judge Harold Kahn. He granted in part and denied in part Pao's motion to strike any unreasonable costs. Judge Kahn said Kleiner's April offer of $1 million was made in "good faith" and had a "reasonable prospect of acceptance."

Kahn said California's Fair Employment and Housing Act, the statue Pao used to bring her claim, called for scaling the expert witness fees depending on the economic resources of competing parties. According to CNET, the judge argued Pao was ordered to pay a similar amount to what she paid for her own expert witnesses. "I think I got the right ballpark," he said in court. "Want to contest jury food?"


View Entire List ›

Stars Of "Million Dollar Listing" Give Us The Dirt On Rich Tech Buyers In San Francisco

$
0
0

The secret status symbols of the sheepish billionaire.

Bravo

If New York City was the fifth character on Sex and the City — shaping storylines as much as location choices — then "tech" is more like the word of the day on Million Dollar Listing San Francisco, the fourth installment of Bravo's popular real estate reality show, which premieres Wednesday night: Buyers "work in tech" or represent "tech clients"; sellers, in turn, want "tech buyers." A ponytailed CEO wears his startup T-shirt on a tour of a $3.5 million home. The money is everywhere.

But that doesn't mean we get to see Mark Zuckerberg shop for his next pied-à-terre or Jack Dorsey unload his $10 million, two-bedroom oceanside abode. The three "hot shot" real estate agents who anchor the show — Justin Fichelson, a San Francisco native, Roh Habibi, who described himself as "future cast member of Million Dollar Listing San Francisco" on all his social media bios well before the show was developed, and Andrew Greenwell, the acerbic foil to his relentlessly optimistic counterparts — may not be top agents in town, but that's how things go in TV land. The matchmakers aren't always fixing up millionaires. The Bachelor stays single.

Instead, the show offers a peek into private off-market deals, the demands of newly minted millionaires, and a real estate market turned absolutely upside down by an influx of new money. Indeed, in the way of all good television, reality or otherwise, Million Dollar Listing is made engrossing by virtue of the same factors that make life excruciating: income inequality, the anxiety of being a perpetual renter, fear of being edged out by a more tech-savvy generation. Jenn Levy, a senior vice president of production at Bravo, told Buzzfeed News that the network was attracted to San Francisco because housing prices rose 34% last year. "That's just a huge number. When something like that is happening, we know it's a place we need to be."

Levy certainly knows how to play to the viewer's id. She's responsible for the Real Housewives of Beverly Hills spin-off Vanderpump Rules, a fun-size box of Sour Straws. ("That was like the easiest development ever, because their names were Jax, Stassi, and Scheana. We're like, yeah, make them a TV show.") Million Dollar Listing San Francisco writes itself, too: Recent reports from Redfin, the online real estate brokerage, shows that one in four Silicon Valley home buyers is looking to purchase property outside of Silicon Valley and that there's a .5% increase in home prices for every 1% increase in technology workers in a city. Join us as we gossip about tech money — and pull out some of the show's lessons — with Bravo's newest brokers.

Million Dollar Listing San Francisco's Andrew Greenwell (left) and Roh Habibi.

Bravo / Kim White

Fichelson, who says his personal social circle includes venture capitalists and billionaires, is supposed to be the show's tech-money touchstone, but agents who don't have those contacts "are sort of desperate for them," Levy explained. "There's an episode where Andrew [Greenwell] is hoping that Justin will deliver some of these young tech buyers to his open house." That tension is "a big part of their dynamic, because [Greenwell] wants to also gets his hands on that pool of people who are so important to the market right now."


View Entire List ›

I Got High With San Francisco's Most Sincere Weed Delivery Startup

$
0
0

“Whatever we can do sober or with a beer, we should be able to do with cannabis.”

Nitasha Tiku / Buzzfeed

The cannabis-infused hazelnut spread started to kick in a few minutes before the movie started.

It was Wednesday night and I was at a movie screening hosted by a medical marijuana delivery startup named Flow Kana. Forty or so guests paid $45 to sample some weed and then watch a movie high. The screening room was located on the first floor of the Hobart Building, an office tower in San Francisco's Financial District, and the sweet, fruity smell of sativa wafted almost all the way out to the lobby.

CEO Michael Steinmetz told Buzzfeed News this was the first in a series of "culture shifting cannabis events" to help foster the idea that Flow Kana is about transforming society, not just getting baked.

Inside the reception area, guests were greeted with a banquet of options, artfully arranged on a burlap cloth. Flow Kana works directly with farmers in Northern California and likes to call their concept farm-to-table. For this event, the table was covered with containers of Kanatella (house-made chocolate-hazelnut spread infused with 10 mg of medical marijuana) and Kanabees (same deal, but with honey) that could be sampled with tiny wooden spoons. There were also bowls of different strains of weed that could be sampled using an assortment of vaporizers, including a handful of Pax 2s and one Volcano vaporizer (the kind with the plastic bag that inflates like balloon people outside a car dealership).

Nitasha Tiku / Buzzfeed

Nitasha Tiku/Buzzfeed


View Entire List ›

Ellen Pao Resigns As Reddit CEO

$
0
0

Justin Sullivan / Getty Images

Ellen Pao, the embattled interim CEO of Reddit, resigned on Friday after a week of intense and sometimes vicious criticism over the dismissal of a popular employee.

"We are thankful for Ellen’s many contributions to Reddit and the technology industry generally," Sam Altman, a member of Reddit's board, wrote on the site Friday. Pao will remain on Reddit's board as an adviser until the end of the year, Altman announced.

“I am very pleased with the work that she had done with the company. I’m happy she’s a shareholder, she’s going to make a lot of money as a shareholder,” Altman told BuzzFeed News.

Steve Huffman, one of the site's founders, will replace Pao.

In a post on Reddit announcing the resignation, Pao wrote, "In my eight months as Reddit’s CEO, I’ve seen the good, the bad and the ugly on reddit. The good has been off-the-wall inspiring, and the ugly made me doubt humanity ... Why am I leaving? Ultimately, the board asked me to demonstrate higher user growth in the next six months than I believe I can deliver while maintaining Reddit’s core principles."

Pao came under fire after the company dismissed Victoria Taylor, one of the site's most popular employees. Users and moderators shut down large sections of the site in protest, and a petition calling for Pao's removal garnered more than 200,000 signatures.

Before Taylor's firing, some of the site's 160 million users had expressed their discontent at the company's decision to ban a number of communities dedicated to racist, sexist, and fat-shaming topics.

But Altman told BuzzFeed News that growth for Reddit means focusing on mobile over monetization. "The world has gone mobile and Reddit has not yet."

“People can be good at some part of their jobs and bad at others,” he said. The way Pao handled the community aspect of the role was “not optimal,” but Altman said it “does not negate” the strides she made, particularly entering into a tumultuous situation.

Reddit has had a rocky road since raising $50 million in venture capital from famed Silicon Valley investors like Andreessen Horowitz and Peter Thiel and a handful of angel investors like Altman and Ron Conway last September. In fact, Pao’s resignation is the second abrupt “resignation” from Reddit in recent months, in both cases following intense blowback from Reddit users.

Pao was asked to come on as interim CEO in November 2014 after Yishan Wong stepped down following his reaction to leaked celebrity nudes distributed on a subreddit called The Fappening. Pao made it only eight months into what was supposed to be a yearlong appointment as interim CEO.

When Wong resigned as Reddit CEO, Altman admitted that the company was “caught off-guard,” but both and he and Reddit co-founder Alexis Ohanian told the Wall Street Journal that they expected Pao would become the permanent CEO. “This is technically Ellen’s job to lose,” Ohanian told the paper.

At the time of Wong’s resignation, Altman said there had been a dispute because Wong wanted to move Reddit’s office to Daly City and spend more money than the board wanted. However, the New York Times pointed to Reddit’s failure to “attract the type of revenue it would like." Pao was tasked with “finding other revenue streams, like acquiring and releasing a mobile application, and debuting a crowdfunding site,” said the Times.

In the midst of her eight-month tenure in the top spot at Reddit, Pao was also at the center of the most high-profile trial in Silicon Valley: her $16 million gender discrimination lawsuit against her former employer, the venture capital firm Kleiner Perkins, for not promoting her to senior partner. Pao initially filed the suit in 2012 and was present in San Francisco Superior Court for every day of the monthlong trial, which became a rallying cry about sexism in the industry. Kleiner was found not liable for all four of the claims in Pao’s lawsuit.

LINK: Reddit CEO: “We Screwed Up”

LINK: Reddit Users Revolt After Site Bans “Fat People Hate” And Other Communities

LINK: Reddit Moderators Are Fed Up: “I Thought It Couldn’t Get Worse”

Living In The Disneyland Version Of Startup Life

$
0
0

Conceptual rendering of an upscale building transformed for co-living.

BuzzFeed News

Before WeWork came knocking, the 12-story building at the corner of South Clark and 23rd streets in a grayscale office park in Crystal City was outdated and vacant. But by the time the $10 billion co-working company is done, it will be a brightly painted beacon of innovation where residents of the Washington, D.C., suburb — once a bedroom community for defense and military workers that Bloomberg Businessweek described as “a brutalist enclave of office blocs and subterranean shopping centers” — can both co-work and “co-live.” The interior will feature 360-square-foot “micro-apartments” nestled atop two floors of shared working space in a futurist vision of the ultimate in home/office efficiency. After the conversion was approved by Arlington County, one board member told a local news site that transforming “an aging, vacant office building into an innovative live–work space is an example of how we continue to reinvent Crystal City as a more attractive, vibrant place that will attract more entrepreneurs and tech workers.”

Over the past seven months or so, several sleek new real estate developments have been announced, a couple of them even venture-backed, that want to offer residents a customized version of this brand of co-living. They share some basic similarities with their Bay Area predecessors, from experimental Northern California communes to hacker hostels crammed with young software engineers who headed West because it looked exciting on HBO. All ask residents to trade personal space for the perks of group living, but the newer entrants have a different attitude toward the “communal” part of the proposition — here, the “co-” prefix is more a signifier of close quarters and plug-and-play co-habitation, rather than co-op–style shared duties, chore wheels, and elbow grease. Month-to-month rental agreements require little more than a signature and a credit card. Your chores are done for you, seamlessly, in the background. Rooms are cleaned weekly. Coordinated events make even the socializing aspect easier.

It’s a simple and intoxicating proposition — one born of the same Silicon Valley belief system that has plowed billions of dollars into on-demand apps that do your laundry, cook your meals, chauffeur you around, and clean your house, and that has so thoroughly shifted personal fulfillment to work that it's all but indistinguishable from life. The do-it-for-me rental agreement reflects an unwavering faith in better living through entrepreneurship that constantly coos: When acting in service of a Big Idea, your time is too valuable to waste.

And for those in the business of selling short-term diced-and-quartered residential space in cute city neighborhoods with an entrepreneurial gloss, there’s no moment like the present. Co-living may have been invented in the Bay Area, but now it’s being exported to places like Crystal City and Crown Heights, Brooklyn. Opportunism, after all, lives on both coasts.

WeWork Navy Yard.

S9 Architects/Perkins Eastman / Via newyorkyimby.com

The spaces in question are superficially different, but politically aligned: better designed, better funded, and way sexier versions of the group housing that came before them.

WeWork was set to launch its communal living concept (branded as WeLive) in Crystal City last month but the latest internal estimates are late fall or the end of the year. The next WeLive property is a 27-story office building in lower Manhattan. That's just the beginning. One commercial real estate insider told BuzzFeed News that in the past couple months, WeWork has also leased a “five-story plus penthouse” office building at 1161 Mission Street in San Francisco’s Mid-Market, a hub of tech company headquarters, for launching another WeLive. The 69,000-square-foot space is roughly three blocks from Twitter, four blocks from Uber, six blocks from Pinterest, and a quick hop from the luxury high-rises and controversy that followed.

WeWork may be based in New York, but signing three long-term leases before launching is pure Silicon Valley chutzpah. (Another Silicon Valley quirk? WeWork never buys, only leases, and calls it being “asset-light.”) The Crystal City project will include 252 of these micro-apartments plus amenities like an arcade, an herb garden, a library, common areas done up in fashionable neutrals, and, of course, plenty of bike parking. The Manhattan property is located at 110 Wall St., a 27-story “dark, shiny modernist tower” that was badly damaged by Hurricane Sandy. WeWork has not confirmed the San Francisco deal, but the other two buildings will include its trademark shared offices, so members presumably can toggle between co-work and co-life at will.

Meanwhile, a startup called Common has already raised $7.35 million at a $20 million valuation for a co-living network in Brooklyn neighborhoods like Crown Heights and Bedford Stuyvesant and initially planned to charge $1,750 per month. Common’s first property, a brownstone redesigned to fit 19 rooms, launches in October. Rooms will be least 80 square feet and feature at least one window. Common’s founder, Brad Hargreaves — also the co-founder of General Assembly, the startup that kicked off the “learn to code” craze — told BuzzFeed News that he will offer weekly cleaning, a set of shared supplies including coffee, paper towels, and fresh fruit. The garden floor will become a shared area that functions as a co-working space during the day and a dining room at night. That’s what users want, Hargreaves said. Many “work from their homes and co-working spaces” and end up confined to one room. “Their bed is often three feet from their desk, so it's hard to separate work and life.” Hargreaves thinks of Common as a product, and says user feedback requested “some modicum of separation.” Common’s value proposition to them is, then: “Hey, rather than working three feet from your bed, why not work a little further away?”

And The Caravanserai, which bills itself as a “global co-living subscription,” is charging $1,600 per month for access to houses in Ubud, Mexico City, and Lisbon. CEO Bruno Haid describes himself as a “founding tenant” of three co-living spaces, including 20Mission, an infamous spot in San Francisco that lets tenants pay in bitcoin.

Other startups are slowly exploring co-living concepts that look a little less like high-end hacker hostels and a little more like luxury short-term rentals, albeit ones with a faintly cooperative glow. This month, the deluxe co-working space Neuehouse — which sells itself toward “ambitious innovators” — raised $25 million. A tech investor, who reviewed the company’s pitch deck last year and passed, told Buzzfeed News that Neuehouse has looked into doing “a hotel and extended stay.” (The source requested anonymity because the investor has a working relationship with the New York–based company.) WeWork CEO Adam Neumann has been coy about WeLive and declined to speak for this article, but he has dangled the possibility of Webnb as well. “The hotel experience is an ‘I’ experience, not a ‘We’ experience,” he recently told Businessweek.

The trend risks veering into self-parody. Twitter users had trouble figuring out whether a widely shared recent piece in the New York Times real estate section was for real.

20Mission / Via 20mission.com

Co-living is still too nascent and disjointed to be described in certain terms. But a good place to look for clues might be WeWork, which leases short-term shared office space in 47 locations across 16 cities, and which helped pioneer the contemporary trend toward clean-lined and well-stocked communal productivity sanctuaries. Investors valued the five-year-old company at $5 billion in December, then cranked that up to jaw-dropping $10 billion last month.

It’s no coincidence that two of the main figures packaging and selling the idea of co-living to millennials outside the Bay Area — Hargreaves and Neumann — are the same people that helped make the lifestyle of a startup founder aspirational in the first place. Because WeWork is not, as its name might suggest, for workers. It’s a quasi-incubator for die-hard entrepreneurs, a “community of creators” complete with an online magazine called Creator and the yogic tagline “Do What You Love” — earnest enough to empower, vague enough not to threaten — scrawled on nearly every surface. Some WeWork co-working locations have arcades; others have bocce ball courts. The floor plans are open, the coffee is micro-roasted, the beer is craft, the music is up-tempo and anodyne. Quilted leather couches offer a change of scenery for your MacBook. Common areas facilitate collaboration. Networking is as easy as swiveling your Humanscale chair toward your nearest fellow creator. It’s not until a few weeks have passed that you start to notice that the reclaimed wood is fake, the free beer is almost always flat, and there are grown men day-sleeping on that quilted leather couch. Still, $400 a month per desk is a small price to pay for the opportunity to play Zuck.

vimeo.com

WeWork didn’t invent co-working, but it did capitalize on prevailing macro trends, many of which originated in Silicon Valley. Freelancers, contractors, and the self-employed are now almost a third of the labor force, meaning independent office space is in higher demand than ever. In the era of always-on smartphones and the age of the “personal brand,” what we do is increasingly synonymous with who we are — as John Battelle, a tech industry veteran and author, wrote on his blog in June, “[WeWork is] attempting to scale a new kind of culture … that promises a quality workstyle, to be certain, but one that also celebrates who we are as people: we seek to find meaning in work.” And at the same time, the so-called sharing economy has imbued instant gratification with a sense of righteousness. It’s a small leap for the same Silicon Valley that convinced every Uber customer they were sharing to then sell us on spending hundreds of dollars a month for a desk and a bottomless keg because it elevates office work to the higher plane of collaboration.

But perhaps most important of all, WeWork has managed to align itself with the new American dream, updated by Silicon Valley: Get rich quick, by building a startup that changes the world. World change seems doable — every app promises that. But the actual building part can be daunting. So WeWork is part of a constellation of venture-backed services that help with the hard stuff, like learning to code or finding an inspiring office space.

Co-living offers up the same short-term leases and the same promises as co-working, except community members (it is always a “community”) get a bed instead of a desk. In both cases, practitioners sacrifice space for proximity to like-minded people and access to perks. WeLive and Common and The Caravanserai and their ilk purport, essentially, to do for the home what WeWork has already done for the office: Sweat the small stuff. Make you feel like a boss. Feed your body and your intellect. “WE TAKE CARE OF ALL THE 'STUFF', SO YOU DON'T HAVE TO ANYMORE,” The Caravanserai’s Haid promises on his website; the impossible-to-spell startup says it’s geared toward “professionals who seek a great work life balance and don't want to waste time piecing it together themselves.”

As Miguel McKelvey, WeWork’s co-founder along with Neumann, said of WeLive at a March event, “When you’re in that startup phase, where everything is hard, it would be great if that initial experience [of leasing an apartment] was a little bit easier.” And as a startup founder wrote in a post on Product Hunt, a sort of cool-hunting message board, The Caravanserai offers “peace of mind as a service.” The same people sporting “Do What You Love” T-shirts don’t need to stop when the clock strikes 5 (or 6, or 10, as the case may be). They don’t need to deal with the onerous apartment search process or cumbersome leases or landlords who are bad at email or housemates who don't grok their ambition. They don’t need to merely live — they can co-live.

BuzzFeed News

Neither co-working nor co-living are exclusive to Silicon Valley, but they do reflect a boom-time belief system first seeded here in the land of startups. Innovation is infectious, and the spirit of disruption can be transferred by proximity or osmosis. With each newly minted billionaire who built a product you use, the message gets more convincing. Work can be a form of self-expression. You can retain your values and still rake it in. Just find a problem and fix it.

Bootstrapping is out of vogue. A smart person’s time is too valuable to waste — if you’re well-fed and free of distractions, there’s more time to fix the world. It’s telling that that same rhapsodic Product Hunt post about Caravanserai made reference to “how a search for a good co-working space or coffee shop” while traveling “can take up days,” or that Benjamin Dyett, who co-founded the co-working space Grind, made the place sound like an all-inclusive office resort. “If you need to send a fax, all you need to do is email to the front desk, we’ll take care of it for you,” he told BuzzFeed News. The goal is to help Grind members “get through the workday and take care of the little problems they might have. Our members don’t have to stop and think about little annoyances that happen.”

And indeed, co-living’s true believers speak of an environment in which they are all but forced to be their best selves. Ben Greenberg joined 20Mission, the co-living space in San Francisco, after dropping out of Indiana University a few years ago. The startup he was working on at the time didn’t pan out and his time as a software engineer at Lyft only lasted 10 months, but Greenberg is grateful. “Even if people fail at the startup game, it’s kind of a success, because you can meet up with all these people, start working on it, and get better at it,” he told BuzzFeed News. He credits 20Mission’s sister space in Colombia with helping him stoke his true passion: the website Glowyshit.com, where he sells “basically anything that’s awesome and glows.”

vimeo.com

Here’s the Tool Big Brands Use to Spy on Their Twitter Followers

$
0
0

SocialRank is publicly launching a way for brands to peek at their competitors.

Venture capitalist Marc Andreessen.

Michael Kovac / Getty Images

When SocialRank — a New York City–based startup that lets users analyze their Twitter and Instagram followers and is rolling out a new tool today — looked at which Twitter accounts early adopters wanted to spy on, the most popular choice (after major brands) was venture capitalist Marc Andreessen.

"His account is crazy. It's everyone from Glenn Beck and Tyra Banks to Justin Bieber's mom and what's-his-name from the New York Times, Paul Krugman," SocialRank CEO Alex Taub told BuzzFeed News. There are also notable exceptions, like the founder of Y Combinator. "Paul Graham doesn't follow Marc Andreessen. I think [Andreessen is] probably clogging his feeds?"

SocialRank's first product was a dashboard to help people track their Twitter followers, sorting them by location, interests, algorithmically determined "value," engagement, employer, influence, and even keywords in their Twitter bio. If you follow a sizable number of people, SocialRank offers an easy way to track down that woman who works at Pinterest when you can't remember anything besides the color of her avatar, or find all your followers in Mexico City if you're going on a trip. It's the kind of simple data that Twitter still makes impossible to search. SocialRank's revenue model, however, is focused on customers like Nike, Sony Music, Paramount Pictures, Red Cross, and Harvard University, who get even more exasperated by how hard it is to study a huge group of followers.

Today SocialRank is publicly launching a tool called Market Intelligence — in beta until now — that will let customers do the same kind of analysis, except with the ability to compare it to other Twitter accounts. "If you're Nike, you can run Puma. If you're Airbnb, you can run Hilton and Marriott," Taub explained. "It feels a little like you have access that you shouldn't have." (Market Intel for Instagram is on its way and already being beta-tested by social media celebs like Fuck Jerry and Crazy Jewish Mom.) In order to test-drive Market Intel for Twitter, SocialRank is offering users the chance to test their own account for free — and compare it to Andreessen's.

Taub checked with Andreessen before including the investor as a freebie, assuring him that SocialRank is merely repackaging publicly available data. "I also didn't want the most powerful man in Silicon Valley to be upset about it," he said.


View Entire List ›

One Upside to the Tech Industry's Endemic Groupthink

$
0
0

The perks arms race now includes parental leave along with on-site dry-cleaning and private chefs. But what about child care?

Yahoo CEO Marissa Mayer by Ruben Sprich / Reuters

For a part of the world so obsessed with iconoclasts, Silicon Valley is awfully susceptible to the herd mentality. The same venture firms funnel billions into the same app ideas, the same plutocrats defend the status quo on the same social network (hello again, Twitter), and all the startups figure out which snacks to stock up on by cribbing off each other's micro-kitchens.

Earlier this month, Netflix triggered a slightly different kind of groupthink by offering unlimited paid maternity and paternity leave for the first year after a child is born or adopted (for salaried employees in its streaming division, at least). Microsoft was a fast follow (that's industry jargon for copying a proven concept), increasing paid leave for birth mothers in the U.S. to 20 weeks and paid parental leave to 12 weeks just one day after Netflix's announcement. (A Microsoft spokesperson told BuzzFeed News that the timing was unrelated to Netflix, adding, "I know, hard to believe.") A few days after that, Adobe went the same route, offering new mothers up to 26 weeks paid time off and enhancing paid parental leave to 16 weeks. Then last Thursday, BuzzFeed announced internally that primary caregivers will get 12 weeks of paid time off (up from six weeks) and secondary caregivers will get four weeks of paid time off (up from one week).

Staffers learned about the policy change just before a company meeting, where in an answer to another question, founder Jonah Peretti said he wanted BuzzFeed to function more like like Google and Facebook than a traditional media company. "We need to provide amazing benefits," he said. "We need to provide as much incentive for people to pick BuzzFeed over any other company." The updated parental policy also promised "a special gift containing BuzzFeed baby swag" as well as free lunch for new parents on the company's Seamless account twice a week "to make sure you're still getting BuzzFeed office perks."

Taken together, these new policies were enough to constitute a human resources trend — which naturally elicited both immediate applause and quick scrutiny. In an article about the tech industry's "selfish" reasons for announcing these changes, Wired pointed out that announcing these changes was good publicity, a self-serving recruiting tactic, and that without a supportive company culture, policy changes won't make a significant impact. New parents will still fear being held back professionally if they take advantage of this benefit being bandied about in the press.

All those critiques are accurate. For-profit companies gonna profit, or try to at least. And when it comes to time off, the word "unlimited" seems to benefit management more than employees, who end up tethered to their desk while they try to decipher how much leeway the policy actually permits. If Marissa Mayer famously only took two weeks off for maternity leave, how would it look if you took 20, much less an entire year?

But in the context of tech's glaring gender gap, improving benefits for parents (both mothers and fathers) is more progressive than it may appear. For one, the perk wars don't usually play out in this arena. Offering benefits like these sends a different signal about work-life balance than free food, fancy ice sculptures, or $2,000 standing desks.

And it's an especially political move for an industry that still frames the gender gap as a pipeline problem — as though it just occurred to them (even though some of these companies are a generation old) and is beyond their control (even though these are some of the most persuasive corporations on the planet). Blaming the lack of women in tech on the "pipeline" is just as misleading and just as illogical as pedigreed white men claiming that they succeeded on merit alone.

Extending maternity leave is important because it's designed to help retain women who are already in the workforce. Moreover, it's a tacit acknowledgment that holding on to this demographic is in a company's financial interest.

Google realized this years ago, after Susan Wojcicki (now the CEO of YouTube) was the first employee to go on maternity leave. Based on child development research, the company increased its maternity leave policy from 12 weeks to 18 weeks in 2007. The company later found that "returning moms left at half the rate they were leaving at previously," spokesperson Roya Soleimani told The Atlantic earlier this year.

Choosing to go back to work may sound like a Sheryl Sandberg–type problem — nice dilemma if you can get it. But Silicon Valley has an outsize influence on employment standards. In the same Wired article that critiqued Microsoft and Netflix's policies, Bruce Elliott from the Society for Human Resource Management said that the industry has always been "an incubator as it relates to these kind of perks. The overall market may not follow, but we certainly see segments learn from the initiatives."

Even so — and as important as parental leave is — Silicon Valley has still failed to prioritize helping employees with the most costly and logistically difficult part of raising young children: child care. Though Google — along with companies such as Cisco and Genentech — has long offered day care, the issue is so fraught that back in 2008, parents "wept openly" during focus groups about Google raising the cost of day care above market rate. (Google told BuzzFeed News that it currently has four child care centers around its Mountain View headquarters and also offers discounts for nanny placement agencies, five free days of backup child care, and priority access to Bright Horizons child care centers, among other benefits.)

But in its child care offerings, Google is an outlier. Netflix told BuzzFeed News that it does not currently offer day care. BuzzFeed doesn't subsidize day care either. According to a spokesperson at Apple — which offers up to 18 weeks' paid maternity leave — the company offers 10 subsidized backup child and/or adult care days per year. Microsoft gives employees a 20% reduction on tuition rates for children of all ages "at select National Child Care providers," and a 5% to 15% discount on child care providers that aren't in the subsidy program (employees can combine the two offerings). Facebook, which gives new moms and dads four months of paid parental and claims taking leave is culturally reinforced, also subsidizes day care costs for parents.

All told, the boomtime benefits arms race seems to target young people more than mothers. Tech companies may feed and coddle workers like they're children, but they don't cater to new parents quite so generously.

For example, companies trick out their tech campus headquarters so workers don't have any reason to leave, but when Facebook teamed up with the real estate developer St. Anton Partners for a $120 million, 394-unit housing compound in Menlo Park, the social network planned for doggy day care but no child care facilities. State regulations and liabilities are often invoked as a hindrance to on-site day care. Startups aren't shy about building a mixed martial arts fighting ring to cater to employees, but the ROI for on-site care is still "nebulous."


View Entire List ›


Women's Group Slams Netflix For Denying Poor Workers Benefits

$
0
0

Workers in Netflix’s DVD division are not eligible for its new unlimited parental leave policy.

Marine LAOUCHEZ/AFP / Getty Images

Netflix sought publicity for its generosity toward workers earlier this month when the company announced "unlimited" maternity and paternity leave for employees in the first year after a child's birth or adoption. The announcement failed to mention that the offer only applied to full-time salaried employees in its streaming division. Workers for its DVD division, who are often paid hourly, would not be covered. Now UltraViolet, the women's advocacy group behind high-profile campaigns targeting Reebok and the NFL, is pressuring Netflix to stop "leaving poor women out of parental leave."

According to its 2014 annual report, Netflix has roughly 2,189 full-time employees and 261 part-time and temporary workers. The Huffington Post, which reported on the benefit split, spoke with an employee in the DVD division who said, "We just get the raw end of things now since streaming is bigger."

Across Netflix, we compare salary and benefits to those of employees at businesses performing similar work. Those comparisons show we provide all of our employees with comparable or better pay and benefits than at other companies. For example, medical and life insurance for DVD workers exceeds market standards. All DVD employees including hourly also are eligible for a minimum of 12 weeks off for maternity or paternity leave. We are regularly reviewing policies across our business to ensure they are competitive and help us attract and keep the best employees.

Separately, our new parental leave policy applies to all salaried streaming employees regardless of title or compensation.

"Netflix is leaving workers who could benefit the most from a generous paid leave policy behind and that is offensive, said Nita Chaudhary, co-founder of UltraViolet. "With childcare costs skyrocketing nationwide, hourly workers at Netflix need parental leave more urgently than ever. Two thirds of minimum wage earners are women. For that reason, women are watching Netflix right now to see if they do the right thing. We urge them to support all of the many working moms and dads who contribute to their success."

Via act.weareultraviolet.org


View Entire List ›

Apple Watch Can Tell A Baby's Heart Rate From Its Mom's

$
0
0

All on your wrist.

BuzzFeed

Mothers can now hear their baby's heart rate in real-time on their wrist using the Apple Watch. At today's big event Apple announced that physicians can monitor fetal heart rate, as well as contractions and the mother's heart rate remotely. The audience responded with applause to a demo of the fetal heart rate played at the event. Already, 3.5 million women have been monitoring their pregnancies using Airstrip, a HIPPA-compliant application that works on mobile devices from Android, Microsoft, Apple, and now on the Apple Watch.

The pregnancy care capabilities are possible through AirStrip's sub-app called Sense4Baby, which pairs with sensors that pregnant women place on their bellies. It can distinguish between a mother's heart rate from her baby's, which has been "a problem for many years with home monitoring," according to AirStrip co-founder Dr. Cameron Powell. Physicians had been using AirStrip to monitor pregnant women at the hospital and can now use it to monitor women from their homes. Doctors send a request for the mother to perform a Non Stress Test (NST). When the test is complete, the data can be sent to the physician using the Apple Watch.

Powell, who demonstrated the heart rate on stage, called the Apple Watch a "game-changer for healthcare." The Watch app also allows doctors to look forward at their schedules for the day ahead by rotating the digital crown on the watch face.

Here's an Apple exec demonstrating how it works:

Here's an Apple exec demonstrating how it works:

This post has been updated to clarify that the 3.5 million women who used Airstrip to monitor their pregnancy were across all mobile devices, not the Apple Watch version.


View Entire List ›

Silicon Valley's Biggest Discrimination Trial Ends With A Whimper

$
0
0

The Silicon Valley trial that captivated the world finally ends with a whimper.

Justin Sullivan / Getty Images

Ellen Pao announced today that she will be dropping her appeal against the venture capital firm Kleiner Perkins and paying her former employer's legal costs for her highly-publicized gender discrimination lawsuit. "I am now moving on," Pao wrote in a lengthy personal statement on Recode.

Court documents show that Pao's legal team was still filing requests related to the appeal since at least late August. Her lawsuit was initially filed in 2012. Pao sought $16 million in damages for failing to promote her to senior partner, as well as retaliation when she complained about discrimination and earlier incidents of sexual harassment from a senior partner at the firm. The statute of limitations for filing discrimination and harassment claims in California is a year. "My experience shows how difficult it is to address discrimination through the court system," she wrote.

In her discursive statement, Pao takes aim at a legal system stacked against defendants as well as her difficulty getting a fair trial in such a obsessively-covered case. The bulk of Pao's statement focuses on the tremendous resources Kleiner spent on influencing perception of her claims both inside and outside the courtroom. The powerful venture capital firm has invested in companies like Twitter, Uber, and Google. The spectacle of the trial became a symbol for entrenched gender inequality issues in Silicon Valley.

I have a request for all companies: Please don't try to silence employees who raise discrimination and harassment concerns. Instead allow balanced and complete perspectives to come out publicly so we can all learn and improve. I and many others are eager to hear more stories being shared by women and minorities. I turned down offers to settle so I can keep telling mine. We need to keep telling our stories and educating people on how it can be that women and minorities form such a small fraction of our investor base, our tech workforce and our leadership.

Via recode.net

Startup Says It's Not Responsible For Pointing NYPD To James Blake

$
0
0

GoButler just raised $8 million in financing from Ashton Kutcher and other tech investors.

Maddie Meyer / Getty Images

Last week, retired tennis star James Blake was tackled by a plainclothes New York City police officer who mistook Blake for a suspect in a three-man credit card fraud ring. The NYPD said the individual who identified Blake as the suspect — pointing to him from eight feet away — was a courier for GoButler, an on-demand app that recently raised $8 million from Ashton Kutcher and other tech investors. A sting was set up after the virtual-assistant startup complained to the NYPD about suspicious behavior and agreed to help identify the fraudsters, who were observed during previous deliveries where the suspects used allegedly fraudulent credit cards.

The NYPD asked to "supervise a delivery" if the trio made another purchase. When the suspects ordered designer shoes via GoButler delivered to the concierge desk at the Grand Hyatt Hotel in Manhattan, a team of undercover officers accompanied the courier. Blake was staying at the hotel and standing outside waiting for a car to take him to the U.S. Open when he was body-slammed by Officer James Frascatore. The NYPD claims that Blake was mistaken for one of the suspects during the sting based on a photo provided by GoButler and the courier's incorrect identification.

The NYPD released a video of the arrest, in which you can see Officer Frascatore run at Blake from off-camera. Robert Boyce, the NYPD's chief detective, told the New York Times that one of the suspects met the courier and was arrested immediately. Then the courier "pointed to Mr. Blake from eight feet away" as another member of the fraud ring, said Boyce. The second suspect was later arrested inside the hotel.

In a news conference on Thursday, Police Commissioner William Bratton apologized to Blake "on behalf of the city of New York." At the same conference, Boyce said GoButler gave the NYPD an Instagram photo from a social media account of someone who was thought to be one of the suspects. But the man in the photo, who was later revealed to be Australian designer Sean Satha, also had nothing to do with the alleged fraud. Bratton said that based on that Instagram photo, the suspect and Blake "look like twins," prompting further uproar about racial profiling.

Officer Frascatore, who was put on modified duty and is currently under investigation, is ultimately responsible for the use of force that set off the latest tide of public outrage over police brutality. However, despite comments from the NYPD that its team of officers was "relying on" the courier, GoButler released an official statement disavowing all responsibility for misidentifying Blake, along with a quasi plug for its stress-free services.

The police identified Blake as an individual who looked similar to one of the social media profiles used to purchase items via GoButler. ... While GoButler did not contribute to misidentifying James Blake, we are working to contact him to offer our network of services across the country to eliminate any stress during his future travels.

In response to questions from BuzzFeed News, spokeswoman Bianca McLaren said: "I want to reiterate that GoButler had no role in misidentifying James Blake. This was an isolated incident and the NYPD arrested two people in connection to the alleged fraud."

The suspects, Jarmaine Grey and James Short, were arraigned in criminal court on Thursday. According to the criminal complaint (below) from the Manhattan District Attorney's office, the defendants allegedly used American Express cards to fraudulently purchase Cristal champagne, an iPhone 6, three iPhones worth $2,446.42, and a Louis Vuitton bag, as well as clothing purchases from TaskRabbit and a food order to Five Guys burgers, among other items through GoButler.

Customers use the 24-hour service to text their requests to an operator (the company calls them "heroes") who then finds the outside service providers, like other delivery services, to do the job at no additional charge. The complaint says that the informant who reported the fraud was "an employee" of GoButler. The company would not say whether the courier was an employee or a contractor.


View Entire List ›

Mark Zuckerberg Almost Makes Prime Minister Of India Cry

$
0
0

When Zuckerberg was lost, Steve Jobs told him to go to India. Now he’s going back.

Via Facebook: zuck

Forget hoverboards or heartbeats on your wrist. The biggest tech shift of 2015 is Silicon Valley's landgrab in the developing world — it's the year when Uber raised additional billions just to compete in the Chinese domestic market and Facebook built a Boeing-sized drone to try to beam connectivity down to the 43.4% of the world who are not yet online.

In that context, the sound of Bollywood hits blaring across the social network's Menlo Park headquarters yesterday morning carried a note of portent. The sentimental playlist, including throwbacks from the '90s and late aughts, was background music for the thousand or so guests — mostly Indian or of Indian descent — gathered for a town hall–style Q&A with Facebook CEO Mark Zuckerberg and Indian Prime Minister Narendra Modi.

Nitasha Tiku / BuzzFeed News

Early Sunday, Hacker Square, an outdoor stretch of the social giant's campus with the word "hack" spelled out in concrete, was abuzz with tech workers in Facebook swag and sneakers who mingled with women in chic salwar kameez, men in Nehru vests over their button-down shirts, and a handful of kids who came with their parents for the historic occasion and couldn't help pointing to the helicopter circling overhead or the translators in their soundproof booths. As the row of TV correspondents in the back told their respective cameras, it's been 33 years since an Indian head of state visited California.

During his two-day tour of tech country, Modi has received the kind of "rock star" reception normally reserved for billionaire CEOs like Elon Musk — who himself gave Modi a personal tour of Tesla. Modi also met with the CEOs of Apple, Google, and Microsoft. On Sunday night, Modi sold out the "Shark Tank," a massive indoor arena in San Jose, where the crowd chanted "Modi" for hours.


View Entire List ›

WeWork Used These Documents To Convince Investors It's Worth Billions

$
0
0

Tim Lahan for BuzzFeed News

Startups don’t turn into unicorns — the buzzword for companies valued at a billion dollars or more — without a good story attached. For WeWork — which leases office space, divvies it up into desk-sized chunks, and rents it out month to month, largely in fashionable cities like San Francisco and New York — the narrative revolves around catering to a new generation of young workers who want to be creators and collaborators, not office drones. It’s that promise of personal fulfillment that allows CEO Adam Neumann to claim that his company’s short-term subleases are "changing the way people work.” Business is going so well that soon, the five-year-old company expects to change the way people live, too, by offering shared residential micro-apartments under the brand name WeLive.

Investors are bullish on the tale. The company has raised $1 billion in less than half a decade, and its valuation has grown commensurately. In February 2014, WeWork’s financiers said it was worth $1.5 billion. In December 2014, a new set of financiers pumped that number up to $5 billion. Half a year later, most of those same investors injected another round of funding that doubled WeWork's valuation to $10 billion. At that price, WeWork is one of the most valuable startups to emerge from the tech boom, more valuable on paper than Slack, Draft Kings, Lyft, 23andMe, and Warby Parker combined.

Even in a technology cycle whose “defining characteristic” is mega-financing rounds — where investors pour hundreds of millions in funding into a company on the chance that it will be worth billions — WeWork's rapidly multiplying valuation (an appraisal of a company's worth by its investors) has perplexed and alarmed observers. The New York Times, the Wall Street Journal, and even random bystanders on Medium have scratched their heads wondering how free beer and flexibility could add up to a $10 billion business model. “Believe It” read Wired’s dubious headline about the company’s $5 billion valuation last year. Writing in the Commercial Observer last month, Charles Clinton, CEO of the real estate financing company EquityMultiple, called it “perhaps the most polarizing recent valuation … many [real estate] industry insiders find the gaudy valuation to be completely insane.” CompStak, the commercial real estate database, said it felt compelled to investigate WeWork’s margins, because “[l]ike many in the CRE industry, we were curious to understand the math behind WeWork’s fast growth.”

Neumann likes to present WeWork as a star of the sharing economy, a technology platform that connects consumers to office space, just like Uber and Airbnb connect them to cars and homes, respectively. But how can an infrastructure-dependent real estate venture scale like a low-overhead software startup? How can a company that signs 15-year leases — but sells monthly memberships — expect to survive a downturn? How can an entity that doesn’t own its own real estate be “worth” more than three times as much as the New York Yankees? Why does WeWork’s future look so bright when it sits smack in the middle of two bubbling markets (that is, tech and commercial real estate)? Why would a business model that drove one high-profile dot-com darling promising “the office of the future” into bankruptcy succeed this time around?

October 2014 fundraising documents obtained by BuzzFeed News reveal how Neumann answers those questions behind closed doors. The material was shared with BuzzFeed by someone familiar with the company, on the condition of anonymity, and independently verified. WeWork would only comment on a couple of aspects of its fundraising pitch. It includes a five-year financial forecast and a slide presentation (also known as a pitch deck), both embedded below, as well as a company overview. After reading these documents, investors such as Goldman Sachs, Harvard University, and JPMorgan handed WeWork $355 million in funding, along with the $5 billion valuation, as part of its Series D funding round in December 2014.

Based on data from WeWork's five-year forecast (page 1).

WeWork expected operating profit of $4.2 million from revenue of $74.6 million by the end of 2014. By 2018, the company predicted operating profit of $941.6 million on revenue of $2.86 billion. The number of co-working members were to set to explode from 16,279 to 260,000 in the same time period. WeWork forecast 376 shared office location in 2018, up from 24 in 2014.

This material was prepared a year ago. Since sharing this data with investors, WeWork has raised yet another $433 million (mostly from the same firms). In the interim, its predictions have changed significantly, as have some of its business practices. So these documents are less useful as a peek into WeWork’s current financial state than they are as a snapshot of a high-profile company on its way up (and up, and up) in a moment when investors are flush with cash and open to any company with the faintest veneer of technology, if it sounds like the upside is Uber-sized. Indeed, if these documents tell us anything, it’s that WeWork has mastered the kind of storytelling that locks down massive rounds and can earn what is essentially a real estate company the privilege of being discussed as — and valued like — a nimble Silicon Valley software startup.

The story is a good one. All told, the fundraising documents portray a company on a phenomenal trajectory. Profits, membership, and locations grow at an enviable rate, while occupancy hovers just below 100%. But the material also reveals that WeWork relied on enormous demand projections and certain accounting tricks — both of which are popular tactics among private companies — to keep its profit margins looking as high as its aspirations.

None of this is unique to WeWork — that’s precisely the point. Its business model is atypical for tech, but the economic and cultural practices that made it a $10 billion company pervade Silicon Valley. To its detractors, at least, WeWork is the poster startup of a funding climate fueled by FOMO and driven to extremes, where valuations can double in a matter of months and where investors who are so “desperately afraid” of missing out on the next unicorn will slap a horn on a horse.

But like most private companies, WeWork publicizes only metrics that paint the company in a better light, so skeptics have relied on back-of-the-envelope math and gut-level instinct. WeWork’s presentation (published for the first time below) is perhaps our best clue to understanding how startup valuations get made. It offers a glimpse into the deal-making behind a “decacorn” — the latest Silicon Valley jargon for a $10 billion company, and another term that gets tossed around with little irony about the kind of magical accounting it may take to conjure up so many mythical beasts.

Michelle Rial/BuzzFeed

The Information first reported some of the financial data in these documents in late August, highlighting WeWork’s use of accounting practices that make rent look lower in the near-term and shove off expenses further down the line. Ultimately, The Information concluded that these practices could make its forecast "tough to meet.”

Based on data from WeWork's five-year forecast (page 1). Background photo courtesy of WeWork

“They have extraordinary, hockey stick–like projections,” Eric Sussman, senior lecturer of accounting at UCLA’s business school and chair of the investment management firm Causeway Capital, told BuzzFeed News after being shown the documents. “Which in and of itself is not uncommon. But they seem very, very aggressive.”

Fundraising documents are designed to dazzle. Investors spend only three minutes and 44 seconds on average flipping through a pitch deck, so companies have to make the future look big and bright. In fact, a WeWork spokesperson told BuzzFeed News that when it's time to actually cut the check, "our large institutional investors have access" to "audited financial statements." In other words, investors are shown two presentations: one that uses standardized accounting practices and one that doesn't.

From WeWork's pitch deck (page 33).

But the initial presentation gets them into the funding groove. "It's the best deck I've ever seen!" one tech executive told BuzzFeed News, jokingly referring to the optimistic projections in slide after slide of WeWork’s pitch.

Here’s how WeWork works, according to the documents: The company doesn’t own real estate, but instead takes long-term leases in centrally located neighborhoods in gateway cities. So in order to make a profit, it has to charge members more than it pays landlords. WeWork is relying on additional revenue from raising office rents, selling services like health care, collecting commissions off its real estate deals, and signing people up for its co-living product.

WeWork started leasing office space in 2010, when the commercial real estate market had yet to rebound after the 2008 financial crisis. Now that the market is hitting record highs, WeWork is pursuing a different strategy: negotiating with landlords for considerable concessions. These concessions, detailed in the 2014 documents, include reduced rent, periods of free rent, and infusions of up-front capital to build out and refurbish locations. In exchange, the documents state that WeWork would share 25 to 50% of its profits with landlords, and take longer leases than is normal. WeWork refers to these profit-sharing deals as “asset light,” in both the fundraising materials and in the press, but their weightlessness is debatable. CompStak analyzed 21 of WeWork’s leases in New York City and found that 17 lasted more than 15 years, including six leases signed in 2015.

From WeWork's pitch deck (page 16).

(WeWork has since pivoted away from the profit-sharing aspect or below market rents. "Asset light" now means the company get about 75% of the cost of build-out covered by the landlord, but WeWork keeps the upside. Landlords have been willing. That’s the nice thing about a billion-dollar price tag — it opens a lot of doors.)

Table uses data from WeWork's pitch deck (page 16).

In WeWork’s financial forecast, concessions like free rent are not stated using standard accounting practices (GAAP), which call for the discounts to be divided up over the length of the lease. WeWork instead accounts for it all at the beginning. And when the free rent ends, expenses go up. WeWork’s extra-long leases and number of new leases mean that even a five-year forecast won't show potentially significant jumps in cost. This accounting strategy gives WeWork “higher income projections in the early years” of a location, as David A. Kessler, national director of commercial real estate for the accounting and advisory firm CohnReznick, told BuzzFeed News. The same principle follows for other concessions: Landlords fronting the cost of building out a location make WeWork’s initial costs appear artificially low.

Relying on optimistic numbers is de rigueur for startups. For example, WeWork’s documents also make frequent reference to EBITDA — a financial initialism meaning Earnings Before Interest, Taxes, Depreciation, and Amortization — which, according to Sussman, is commonly “used in banking and valuation, but you won’t see that term or figure in audited financial statement.” Private companies are not obligated to use GAAP, and the vast majority of startups avoid those rigorous standards until an initial public offering exposes them to SEC oversight. Moreover, while investors are still unicorn-hunting, companies like Uber can keep raising massive funds from the private market, saving themselves from the scrutiny of Wall Street, which tends to obsess over numbers.

WeWork's unique financing deals are great for cash flow, Kessler explained: WeWork is simply using landlords to help while it builds up a revenue stream. Yet despite increasing costs, WeWork forecasts that its margins will rise, relying on a massive growth in members and a bump in the amount that those members will pay. Kessler pointed to rising revenue per square foot — an increase he called “unusual.” The company further boosts its margins by predicting that its marketing and payroll costs will dwindle as a percentage of revenue — despite its ambitious expansion and a growing number of smaller competitors. Sussman pointed out that even a popular company like Netflix will have to spend more to get "that 50 millionth American."

Essentially, Kessler said, “[WeWork] must believe that demand will continue to increase in order to drive the rates.”

But WeWork can't predict demand. Valuations are a story about the future — and no one knows what the future holds. Even the most iconoclastic Silicon Valley companies are still lined up against their competitors in order to estimate future potential. In WeWork’s case, that’s Regus, a publicly traded corporation that lets tenants make temporary offices look like traditional ones; WeWork claims its unit margins are 44%, compared with 16% for Regus. But the two companies are peers only in the broadest sense of shared office space. Regus, which went bankrupt in the year 2000, is not a name brand. Regus isn't 'roided out with a $1 billion investment, and no one’s wearing Regus-branded T-shirts or going to Regus summer camp — which is partly why all of the experts BuzzFeed News consulted had a hard time assessing whether WeWork’s margins were sustainable.

Screenshot from WeWork's company overview.

Meet The Nebraska Woman Who Allegedly Defrauded Square Out Of Millions

$
0
0

Mystery solved.

Square CEO Jack Dorsey

Kimberly White / Getty Images

Earlier this month, the mobile payments company Square registered to go public with the Securities and Exchange Commission (SEC). As observers clawed through the long-awaited 198-page document, one unexpected detail stood out: In the risk section of the filing, Square acknowledged a $5.7 million loss "related to fraud by a single seller." That solitary seller represented nearly 23% of Square's transaction and advance losses for the first half of 2015. The Wall Street Journal said it "raised questions" about Square's ability to prevent fraud.

But the mystery seller who cost the company millions wasn't a cunning criminal mastermind or a black hat hacker. BuzzFeed News has learned that the seller was an Omaha events planning company called Creative Creations, owned by a 30-year-old woman named Patricia Urbanovsky.

According to felony charges filed against Urbanovsky in Douglas County District Court, Urbanovsky allegedly sold bogus discounted travel vouchers based on a fake connection to Southwest Airlines. Customers began asking for refunds — refunds Creative Creations would not pay back, leaving Square on the hook for millions of dollars.

"I don't know with 100% certainty, ma'am, but I would guess that [Urbanovsky and the single seller] probably are [the same person]," her lawyer Steven Lefler told BuzzFeed News.

"Yes, ma'am," Lefler said when asked whether the time period mentioned in Square's filing (the three months ending in March 2015) matched the allegations against Urbanovsky. Square is in the "quiet period" that precedes an initial public offering and declined to comment. However, in June, the Omaha World-Herald reported that Square filed a criminal report with the Omaha Police Department. According to the paper, Square told the police that it accepted more than $7 million in credit card and debit card payments from Creative Creations customers between October 2014 and March 2015 and that it was out $2.8 million in chargebacks, payments that are disputed and returned to customers. It's likely that the amount reported in the SEC filing is higher because it reflects the largest potential loss to Square. The company said it would "take the loss" if Urbanovsky did not have the money to cover the chargebacks.

It's worth noting that Square's loss rate for transactions is better than those of some of its competitors. According to an SEC filing from July, PayPal's transaction and loan loss rate was 0.27% of its total payment volume for the three months that ended in June 2015, up from 0.25% year-over-year. Square, on the other hand, reported transaction and advance losses of 0.1% of gross payment volume for 2014 in its S-1 filing.

Local papers have been keeping tabs on the increasingly knotty case, which now involves the FBI and the IRS. (Urbanovsky's home was recently raided.) A Facebook group for complaints against her and the company also closely track developments. "I just got a phone call from Carrie with the FBI!!! I'm at work, but can't wait to call her back," one group member posted in September, closing out with a smiley emoticon.

In its S-1 filing, Square explained that it works directly with payment card networks and banks, so that sellers who sign up to use Square can avoid the hassle. But the ease that affords customers comes with some risk. "We act as the merchant of record for our sellers, which puts us in their shoes with respect to card networks and puts the risk for refunds and chargebacks on us," the company said.

The loss to Square occurred not because of the chargebacks themselves, but because Creative Creations does not have the money to pay for them. Urbanovsky is currently facing three counts of theft-deception in Douglas County District Court. Lefler told BuzzFeed News that Creative Creations had not yet filed for bankruptcy, but acknowledged it was possible in the future. "We've been able to put it off for the last few months."

"I don't want to be rude or disrespectful," Lefler replied when asked whether that meant his client would be able to pay back customers. "I have been asked that from creditors, attorney generals, to better business bureaus. If there's money, we'll pay everybody back, but I don't think there will be any money."

Lefler is also peddling a different version of events. In August, Urbanovsky filed lawsuits against four former Creative Creations employees alleging they were to blame for the voucher debacle.

"This is a case that I didn't charge enough money for," Lefler told BuzzFeed News.

Square's failure to notice that something was amiss is embarrassing regardless of who's at fault or whether there was intent to defraud customers. That said, the fact that Creative Creations appeared to be running a legitimate wedding business before the travel voucher fiasco may have obscured some red flags that would have tipped Square off. The Better Business Bureau of Omaha reported more than 1,500 complaints against Creative Creations related to sales of bogus travel vouchers from October 2014 to March 2015. According to WOWT News in Omaha, those complaints totaled "more than $1.3 million." Lefler told BuzzFeed News that number was now closer to $1.7 million.

In response to questions from BuzzFeed News, Douglas County Attorney Donald "Don" Kleine said that the only reason it elevated the case to the federal level was because Square is a California corporation, so there were a number of interstate transactions. The felony charges filed by Kleine's office are unrelated to Square and "the rest of the investigation is being done by the Department of Justice," he said. "We're working with them and we're waiting to see what they're going to do."

Lefler said that he doesn't have any more details about Square's claims because the federal authorities have not filed criminal charges. "Hopefully I never find out because that means the federal government would not have brought charges against my client," he said.

In the security section of its website, Square says its anti-fraud algorithms are designed to get smarter as it processes more transactions:


View Entire List ›


Silicon Valley Is Selling A Basket Full Of Unicorns

$
0
0

What’s in your basket?

Justin Sullivan / Getty Images

If there's anything Silicon Valley is good at, it's staying on message. We've seen it with recent attempts to reframe a Wall Street Journal investigation into the biotech company Theranos as an attack on innovation, and now, a similar strategy appears to be afoot to defend tech companies against fears of a bubble.

Earlier today at the Fortune Global Summit, venture capitalist Marc Andreessen was asked whether unicorns (the pet name for companies deemed to be worth a billion dollars or more by their investors) are over-valued.

"Oh, I don't think we're in a bubble, I think we're in a bust," Andreessen shot back. That response is exactly what Y Combinator president Sam Altman wrote in a blog post yesterday entitled The Tech Bust of 2015. "Maybe instead of a tech bubble, we're in a tech bust," Altman argued.

"Bust" is a catchier framing for a point investors have been trying to emphasize: That the upside of technological disruption is so enormous that even if the next few years leaves a unicorn graveyard in its wake, tech companies are still undervalued by the public market.

youtube.com

I think technology has been under-valued ever since 2000 and it's still under-valued. So the nature of venture capital and the nature of venture investments is that some companies are going to work and some companies aren't ...The entire basket of unicorns is worth like half of Microsoft — like the entire basket of all the unicorns. Microsoft is a fine company, but you need a couple to really take off and it becomes very clear that retrospectively they're under-valued.


View Entire List ›

Airbnb CEO: "I'm Totally Sympathetic" To Unaffordable Rent

$
0
0

Brian Chesky took the stage the day after an electoral victory in San Francisco.

Brian Chesky, co-founder and CEO of Airbnb

Stephen Lam / Reuters

This morning, while Airbnb was announcing its plan to build a grassroots voting bloc that rivaled the NRA, Brian Chesky, the home-rental company's CEO, took the stage at the Fortune Global Summit in San Francisco. Chesky did not answer audience questions from the audience, but he did discuss Airbnb's victory over regulation in San Francisco last night. "When people are protesting they are thinking about me — and maybe they understand me or don't understand me," he told the crowd assembled at the Fairmont Hotel in Nob Hill.

Chesky seemed to be referencing the demonstration that happened Monday when protestors stormed Airbnb's headquarters with megaphones and balloons. The protest was an effort to rally support for Proposition F, a ballot measure that would have restricted Airbnb's ability to run short-term rentals in San Francisco. The ballot was defeated last night with 55 percent of the vote, despite the fact that Airbnb spent a reported $8 million campaigning against it.

I think that we ultimately realized that we wanted to move towards a more campaign style of mobilization. What was happening [in] a lot of cities is we would find out in the last minute there were hearings and hosts weren't really being represented. I mean the true thing is this: Airbnb was not on the ballot yesterday. The hosts in San Francisco who wanted to share their homes were on the ballot. We're in 34,000 cities, the people have everything at stake for the most part were the hosts of San Francisco. The precedent to think about in SF, by now most cities and countries around the world have decided they're gonna deal with it how they want to deal with it.

And there's been, frankly, dozens of precedents already set, so really the big battle yesterday was really around the people of San Francisco and I think what we really wanted to do—and we needed Chris to help us with—was not make me and the company the face of every one of these fights. because it's really not about us. Ninety percent of the stakes, by definition [of Airbnb's] business model, is about these hosts. When people are protesting they are thinking about me—and maybe they understand me or don't understand me, but I'm not even the point of it. The biggest point of this are the hosts.

I'm from Albany. I remember thinking to myself, I'm not sure if France will love this idea, I'm not sure Korea will or China will, but I can guarantee you that my hometown of New York will. The irony is that San Francisco and New York are by far our most challenged markets.


View Entire List ›

The Mona Lisa of Unicorn Art Will Be On Display In San Francisco

$
0
0

A High Renaissance coincidence

Via giphy.com

Raphael's 16th century painting Portrait of a Lady with a Unicorn is considered a masterpiece of the High Renaissance. For the first time ever, the work of art will be on display in San Francisco as a one-painting show at the Legion of Honor starting in January. Elsewhere in the Bay Area, adults have become enchanted with the word unicorn — the jargon du jour for tech companies valued at one billion dollars or more. But the painting's arrival and the region's newfound belief in magical beasts is merely a coincidence, Dr. Esther Bell, the exhibit's organizing curator, told BuzzFeed News.

Via giphy.com

"It's really interesting timing for certain, so maybe the painting will resonate with some of our local businesses for that reason," said Bell, who only recently learned of the word's contemporary usage in Silicon Valley. Bell is also the curator in charge of European paintings at the Fine Arts Museums of San Francisco (FAMSF), which encompasses the Legion of Honor. The museums' board of trustees includes investor Zachary Bogue (Marissa Mayer's husband), as well as Juliet de Baubigny, a partner at the venture capital firm Kleiner Perkins, so there is a connection to the tech sector. However, the exhibit has been in the works for two years. (The term was coined almost exactly two years ago, but has really only come into widespread usage this year.)


View Entire List ›

Tinder Forced To Include CEO’s “Sodomy” Interview In IPO Filing

$
0
0

Steve Jennings / Getty Images

Tinder co-founder Sean Rad is causing trouble for his parent company. Again. Rad, who only recently regained his title as CEO after previously being demoted to president in November 2014, gave a disastrous interview published Wednesday morning in the Evening Standard. Questionable comments included Rad misusing the word “sodomy” and claiming a supermodel “begged” to sleep with him. As a result, Tinder’s parent, Match Group, which had announced plans to go public on Thursday, was just forced to update its S-1 filing to disavow itself from Rad and claims made in the article.

Late Wednesday, Match Group priced its IPO at $12 a share, and it is scheduled to go public on Thursday.

Match Group also had to include the full text of the interview, including the sodomy quote, in its updated filing with the Securities and Exchange Commission. In the amended document, Match Group says: “Mr. Rad is not a director or executive officer of the Company and was not authorized to make statements on behalf of the Company for purposes of the article.”

The amended filing also downgraded inflated metrics about Tinder’s popularity published by the Evening Standard.

Here is Rad’s quote about “sodomy” in the Standard:

He’s desperate to impress on me how gallant he is, citing the fact that a “supermodel, someone really, really famous” has been “begging” him for sex “and I’ve been like, no”. She’s “taunted” him, he says, and “called me a prude”.

“She’s one of the most beautiful women I’ve ever seen but it doesn’t mean that I want to rip her clothes off and have sex with her. Attraction is nuanced. I’ve been attracted to women who are …” he pauses “… well, who my friends might think are ugly. I don’t care if someone is a model. Really. It sounds clichéd and almost totally unbelievable for a guy to say this, but it’s true. I need an intellectual challenge.”

He continues: “Apparently there’s a term for someone who gets turned on by intellectual stuff. You know, just talking. What’s the word?” His face creases the effort of trying to remember. “I want to say ‘sodomy’?”

Rosette shrieks: “That’s it! We’re going to be fired” and Rad looks confused. “What? Why?”

I tell him it means something else and he thumbs his phone for a definition. “What? No, not that. That’s definitely not me. Oh, my God.”

Rad has previously inflated his role at Tinder, preferring to characterize it as an independent app and casting himself as your classic disruptive CEO. In truth, Tinder was formed in an incubator at IAC, the conglomerate where Barry Diller serves as chairman. IAC was the parent company of Match Group, which is being spun out as as its own public company.

This is not the first time a tech company has been forced to acknowledge an embarrassing interview just before a scheduled debut in the public markets.

In 2004, Google had to amend its S-1 filing because of an interview executives Larry Page and Sergey Brin gave Playboy. However, at the time, the Google co-founders spoke for the entire business, whereas Tinder is merely one dating app in Match Group’s stable of companies, which includes OkCupid and Match.com.

Rad’s demotion came two months after IAC settled a harassment lawsuit filed by Tinder co-founder Whitney Wolfe. When he was demoted in 2014, Rad told Forbes that the reason was because Tinder was “looking for an Eric Schmidt-like person.”

Here’s the full text of Match Group’s update to its SEC filing:

On November 18, 2015, the Evening Standard (the “Standard”), an online and print news service, published an article based on an interview with Sean Rad, the Chief Executive Officer of Tinder, a subsidiary of the Company. The article is described in relevant part in the following paragraph and the full article is attached hereto.

The article was not approved or condoned by, and the content of the article was not reviewed by, the Company or any of its affiliates. Mr. Rad is not a director or executive officer of the Company and was not authorized to make statements on behalf of the Company for purposes of the article. The article noted that “Analysts believe the [Tinder] app, which launched in 2012, has around 80 million users worldwide and records 1.8 billion “swipes” a day.” While these statements were not made by Mr. Rad, the Company notes that they are inaccurate and directs readers to the Preliminary Prospectus, which states that for the month of September 2015, Tinder had approximately 9.6 million daily active users, with Tinder users “swiping” through an average of more than 1.4 billion user profiles each day.

Evening Standard routinely publishes articles and is unaffiliated with the Company and all other offering participants, and, as of the date of this free writing prospectus, none of the Company, any other offering participant and any of their respective affiliates have made any payment or given any consideration to Evening Standard in connection with the article described in this free writing prospectus.

The statements by Mr. Rad were not intended to qualify any of the information, including the risk factors, set forth in the Registration Statement or the Preliminary Prospectus and are not endorsed or adopted by the Company. You should consider statements contained in this free writing prospectus, including those in the attached transcription, only after carefully evaluating all of the information in the Registration Statement and any final preliminary prospectus relating to the offering filed pursuant to SEC Rule 424(b) (the “Final Preliminary Prospectus”), including the risk factors described therein.


This Is What Tech Companies Do With Leftover Free Food

$
0
0

Silicon Valley companies offer their employees an enormous amount of free catered meals. This is what they do to prevent food waste.

Google

Google

Google's offices in Mountain View and Sunnyvale work with a program called Chefs to End Hunger. In Mountain View alone, Google has more than 39 cafes. The food goes to an East Bay nonprofit called Hope for the Heart, which distributes food to soup kitchens and the like. "Most of our food goes to a transitional homeless housing center in Oakland where residents do the finish food prep and participate in meals," a Google spokesperson told BuzzFeed News. In the next month, a "large number" of Google's chefs will work at shelters "to further help them understand the importance of what they are doing." In order to minimize potential waste, Google kitchens around the globe use a tool called LeanPath.

Via linkedin.com

Twitter

Twitter

Twitter donates both catered and boxed food to Food Runners San Francisco, a non-profit that relays more than 5,000 meals a day in the city through a network of volunteers. The program was initiated by Bon Appetit Management Company, an established corporate caterer that manages on-site restaurants for other Bay Area tech offices as well, including PayPal, Oracle, Adobe. Twitter told BuzzFeed News that the program to donated started at its old office on Folsom Street and that it donates from all of its cafes at its Mid-Market headquarters.

Twitter: @birdfeeder

Dropbox

Dropbox

At its San Francisco headquarters, Dropbox's in house food programs serves more than 1,000 people everyday. The company does not participate in a regular food-recovery program but a spokesperson said leftovers were "repurposed into other food items" and put into "pizza toppings or soup ingredients." The spokesperson said Dropbox makes a lot of its food to-order and "definitely very organized of minimizing waste and making sure we find ways of incorporating leftovers." As for Dropbox's popular sushi offerings, the spokesperson pointed out that the kitchen uses salmon bellies from fish for other dishes for its sashimi rolls. During the holidays, Dropbox works with San Francisco City Impact, which collects perishables from the company's Soma headquarters.

Via instagram.com

Uber

Uber

Uber uses catering company in the Bay Area that partners with Food Runners.

Nitasha Tiku / BuzzFeed News


View Entire List ›

Viewing all 113 articles
Browse latest View live


<script src="https://jsc.adskeeper.com/r/s/rssing.com.1596347.js" async> </script>