Takeaways From a Startup’s Flameout


Ming-yen Hsu | Flickr

What we can learn from WrkRiot. Late paychecks, forged payment receipts, unverifiable claims on a founder’s resume — the complaints that emerged around a job-search startup called WrkRiot, after a former employee posted an anguished account, sounded like a company implosion in the making. And indeed WrkRiot has gone dark since Penny Kim’s story went viral and the New York Times wrote about the saga. What happened at WrkRiot will be a matter for its stakeholders to untangle now. For the rest of us, it’s a reminder that ideals alone don’t insulate the world of NewCos from deception and possible fraud. For greener employees who haven’t lived through a down cycle yet, here’s a chance to learn a lesson that veterans already know: Look around when the easy money begins to dry up, because that’s when rot gets exposed.

Jeff Bezos’s airplanes are coming. First, Amazon’s growth pushed Fedex and UPS to grow, too. Someone had to make all those deliveries! But now Amazon is building up its own fleet of planes (dubbed Prime Air), trucks, and an Uber-like on-demand delivery network called Amazon Flex (Bloomberg). Does the Seattle giant want to put the other guys out of business? Jeff Bezos says no — Amazon just needs more delivery capacity than the existing networks can supply. The 2013 holiday-season mess, when UPS faltered under the peak load of Amazon deliveries, taught the company it needed to bulk up its own delivery muscles. But its scale and logistical prowess will be hard for competitors to match. Smaller upstarts will end up looking for ways to complement Amazon — to do special things for customers that a monster-size retailer simply can’t.

The coming fight over “transportation as a service.” Ben Thompson (Stratechery) foresees a war between Google and Uber in the new “transportation as a service” market, which arises when you combine the rise of ride-hailing companies with the emergence of autonomous vehicles. According to Thompson, Uber might have the upper hand, despite Google’s size advantage and software prowess: Uber’s got the experience with routing vast numbers of trips in real time, and Uber’s core business is on the line in a way that Google’s isn’t. The handicapping game is fun, but read this one more for its sharp analytical breakdown of this vast new market.

There are two Apples doing business in Ireland. One is a real-world operation, building iMacs and employing marketing and tech-support people. The other is a shell company called Apple Operations International — “a quantum corporation whose very nature depends on who is observing it” (The New Yorker). It’s not operating in the U.S. so it pays no U.S. taxes; but it has no real operations in Ireland, so Ireland doesn’t tax it, either. Effectively, it’s nowhere! Here’s the clearest explanation yet of how Apple gets away with sheltering a huge chunk of its profits from taxes — and why the European Union is demanding back payments. “Exploiting accidental quirks in European and global markets” is no way to build a future, for either Apple or Ireland. Apple has created thousands of high-paying jobs in Ireland; that’s where both the company and the country should put their energy.

Well and not good? Workplace wellness programs, with their biometric screenings and health-risk assessments, are supposed to help employees get healthier and employers cut their healthcare costs. But it turns out that checking workers’ cholesterol levels, blood pressure, and body-mass index at the office doesn’t accomplish much of that, according to a Slate critique. Under rules first passed by the Bush administration in 2006 and then expanded by the Affordable Care Act, businesses can give discounts on healthcare premiums to employees who pass wellness tests — which also means that they are penalizing the unwell. If wellness programs are just “a legal way to shift a significant portion of the cost of premiums onto employees deemed unhealthy,” they need a more honest name.

Featured in NewCo Shift: What’s the secret weapon the U.S. Digital Service is deploying to revamp the government’s technology? It’s empathy, writes John Battelle in his latest column. USDS engineers are taking off their headphones, leaving their keyboards, and tuning in to what users and peers working in the federal bureaucracy actually need. It’s a model we could all learn from.

Note to readers: Like many of you, we’re celebrating the Labor Day weekend by taking an extra day off tomorrow. We’ll be back with a fresh NewCo Daily on Tuesday, Sept. 6.

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