Today’s Top Stories
OMG My Parents Are Here: Old people invade Snapchat.
Zenefits Is Now Half Off: The scandal-plagued unicorn reprices to compensate investors.
One Word: Batteries. That’s one theory why Tesla and Solar City want to hook up.
Rethinking Shareholder Value: Maybe it’s not so bad after all — if it’s handled right.
At Least One Politician Is Throwing Rocks at the Google Bus: A San Francisco lawmaker wants tech companies to “pay their fair share.”
OMG My Parents Are Here. Remember how uncool it was when parents joined Facebook en masse? It’s happening again with Snapchat (Wall Street Journal), the social network until recently famous for being incomprehensible to the olds. But one out of seven smartphone users over 35 now uses the service, for reasons ranging from tire kicking to spying on the kids. Many social networks start young and skew older; if that doesn’t happen, they can’t scale. Ask Mark Zuckerberg.
Zenefits Is Now Half Off. The Zenefits apology tour continues, this time stopping to compensate investors over past misconduct (New York Times). Those entities that invested in the company’s Series C round will see their share of the company increase from 11 percent to 25 percent, with the value of the company cut in half to about $2 billion. This move follows a scandal that led to a CEO dismissal, layoffs, and a Zappos-like severance offer to employees who didn’t want to stay. The more transparent management style and the more rational valuation are essential if Zenefits is to persevere.
One Word: Batteries. Quartz has a theory why Elon Musk is bringing Tesla and Solar City together. In a nutshell, Tim Fernholz theorizes, Tesla can use the excess power generated by Solar City installations to fill the batteries to be manufactured at the company’s under-construction gigafactory. This might be what the company has in mind–Musk teased out the idea during a recent earnings call–but the companies still have other big issues to confront, such as Tesla missing delivery targets for the second consecutive quarter (Fortune).
Rethinking Shareholder Value. One of the credos NewCos live by is that companies exist to do more than maximize shareholder value. So, in the spirit of questioning ourselves, we pay attention when respected sources seek to challenge our beliefs. In Reclaiming the Idea of Shareholder Value (Harvard Business Review), Michael Mouboussin of Columbia and Alfred Rappaport of Northwestern aim to rescue the concept from the Jack Welches of the world, who act as if “the goal is to maximize short-term earnings to boost today’s stock price.” Rather, the authors argue, “maximizing shareholder value means allocating resources so as to maximize long-term cash flow.” It’s a fine reframing, but it’s telling that the authors were unable to come up with an example other than the widely-cited Amazon of a company doing this successfully.
At Least One Politician Is Throwing Rocks at the Google Bus. This one got lost in the holiday rush in the U.S. Last week San Francisco lawmaker Eric Mar proposed a new tax (Time), to be levied only on tech firms, that would “require big technology companies to pay their fair share.” The proposal has been criticized by all sides for grandstanding or being unrealistic, but having a San Francisco Supervisor speak this way suggests that the problems of inequality are top of mind in the tech industry’s epicenter.
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