Author: scott-rosenberg

Why the Trump Bump Hasn’t Become a Slump

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The NewCo Daily: Today’s Top Stories

Ken Lund | Flickr

U.S. stock markets have boomed since Donald Trump’s unexpected victory last November. The conventional explanation is that investors got excited by the twin prospect of business tax cuts, which seemed inevitable given Republican domination of the federal government, and of huge infrastructure spending programs that Trump promised. (If you’re doing the math, you can see that investors did not worry about the government taxing less while spending more. Deficits? What deficits?)

By now, however, it should be clear to everyone that virtually none of the GOP program is going to get enacted any time soon, if ever, given the dysfunction in Washington and the Trump administration’s limp grasp on the levers of power. Yet the markets remain ebullient. What’s up with that?

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In Startup World, Fat Is the New Lean

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Tripp | Flickr

For a decade, the concept of the “lean startup” ruled in tech. Under the gospel according to Eric Ries, you would spend modest sums to bring customers a “minimum viable product” — typically, one made out of software — as fast as possible, exposing your idea to market forces and feedback to avoid costly early-cycle mistakes.

Lean startups taught us plenty of lessons, but the times are changing, writes Farhad Manjoo in The New York Times, and now we’re entering the era of the “fat startup.” A fat startup is one that’s tackling a real-world challenge that demands major resources from the very beginning. Manjoo’s model example is a firm called Opendoor that makes offers to buy homes sight unseen, makes purchases with fast deal closings and then resells the homes itself. Opendoor aims to add liquidity to the real estate market and certainty and convenience for homeowners who need to sell.

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Uber’s Credibility Drought Leaves It Vulnerable In a Crisis

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Modern Event | Flickr

Reputation and track record really matter in a crisis. Say you have a ton of credibility and good will with your partners and contractors, and one day it turns out that an “accounting error” had led you to underpay them. You can probably just apologize, pay everyone what you owe, and move on.

Uber faced just this kind of problem this week — but unfortunately for the company, its reserves of good will are exhausted. For years it seems that Uber has been taking its 25 percent cut not only from the base fare but also from the taxes on each ride, which in New York are considerable (The Wall Street Journal) — and as a result it has shortchanged its drivers. Now the company says it’s going to make its drivers whole, and the amounts can add up. Recode posted a receipt for one driver’s $7000 refund, and the Journal says the total cost to Uber is likely to be in the tens of millions of dollars.

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Facebook Can Target Ads at Bummed-out Kids

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Emilio Kuffer | Flickr

If technology makes a particular kind of data collection possible, sooner or later some business will try to use that info to target ads. But sometimes the creepiness factor can get so intense that alarms go off. That’s what happened earlier this month with an alarming report from Australia, which suggested that Facebook was studying how to target young people in distress.

The company had conducted research intended to gauge the effectiveness of ads aimed at young users during “moments of psychological vulnerability,” and delivered the results to advertisers in a 23-page report (Nitasha Tiku in Wired). Facebook’s response implied that the project was a rogue operation that hadn’t followed stricter research guidelines put in place after Facebook’s last controversial study of psychological manipulation. But the details are disturbing enough on their own, and they have watchdog groups and privacy advocates mobilizing.

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For Tech’s Leaders, Big Keeps Getting Bigger

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AJ Mexico | Flickr

Tech is dominated by a handful of enormous companies — but which, exactly, and what do we call them? The New York Times’ Farhad Manjoo has dubbed them “the Frightful Five” and asked readers to ponder what it would mean to their lives to lose any of their services. In Recode, Rani Molla counts six of them — adding Netflix to Apple, Amazon, Alphabet/Google, Microsoft, and Facebook — and christens them “FAMANA.”

This group of companies encompasses ’80s survivors (Apple and Microsoft), ’90s children (Amazon, Google), and one 2000s-born upstart (Facebook). Once upon a time we measured the cycle of the tech industry as a passing of the baton from one giant to another — as in Microsoft succeeding IBM. But today, it’s clear that the dynamic is more complex and accretive, like layers of geological formations accumulating in place.

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Etsy: Can Ideals Survive an IPO?

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Santiago Zavala | Flickr

Etsy was the poster-child for proving that “a socially minded company can thrive in the public markets” — until it wasn’t (Bloomberg). The platform marketplace for sellers of handcrafted goods tried hard to square ethics and sustainability with hypergrowth and an IPO. For a while, it even seemed to be working.

Etsy was certified as a B Corporation, which meant that it passed a series of tests designed to insure that it balanced profit-seeking with protecting the environment and other public goods. The company was also moving toward reincorporation as a public benefit corporation, which would add legal teeth to the voluntary affirmations of the B-Corp process.

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How Much Government Is Enough For Business?

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Julie | Flickr

Economists divide the world they study into “private sector” and “public sector” for a reason: The government is huge, and the government works differently from business. You could argue that the economic history of the modern world is one long series of pendulum swings between government and business.

In fact, that’s exactly what Dutch economist Paul De Grauwe argues in a new book, The Limits of the Market (Quartz). De Grauwe says the most recent era of business domination failed to handle market failures in two important realms — climate change and inequality — and that failure has pushed the pendulum back in government’s direction.

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Is Apple Park’s Ring the Last Folly of Steve Jobs?

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Before you know it, Apple will be all moved in to its new $5 billion headquarters. Steven Levy got a sneak-peek tour of the company’s massive, solar-powered, perfectionist “Ring,” and shares it in Wired.

The spaceship has its own “breathing” system to circulate outside air for its 12,000 workers. White glass canopy fins rim its sides (they make the whole thing look like a giant vent for the planet to release fumes). Four-story, 440,000-lb. glass doors powered by underground engines open onto the enormous lunchroom. Open work-pods designed to foster collaboration fill the interior. Outside, open space planted with 9000 trees aims to facilitate long, idea-generating ambles. Gigantic steel “base isolators” should keep the whole place working through a quake.

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Lock Up Your Data, Before Someone Else Does

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Andy Wright | Flickr

On Friday the world was engulfed by the malware attack known as the WannaCry virus, which encrypts Windows users’ data and demands $300 in Bitcoin to free the hostage info (The New York Times). By Monday, the blame-throwing fingers were pointing in every direction.

Security experts reminded all of us to keep our systems up to date, back up our data, and avoid clicking suspicious links. Thanks, guys! But surely it’s clear by now that earnest reminders are not going to save us. Anyway, the organizations most heavily hit by WannaCry, like Britain’s National Health Service, Germany’s rail system, and Federal Express in the U.S., are institutions whose systems are managed by pros.

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Uber Faces a Growing Legal Storm

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Steve Jurvetson | Flickr

Uber’s troubles deepened yesterday when a judge ruled that the lawsuit brought against the company by Google-owned Waymo should go to trial. Uber wanted to handle the dispute in arbitration instead, which is quicker and quieter. In a separate and more ominous move, the judge asked a federal prosecutor to review the case for possible criminal charges (Business Insider).

Waymo says Uber stole its autonomous-vehicle technology. Normally, disputes over intellectual property and trade secrets are arcane and dull matters, but this one is drawing a spotlight. That’s not only because of the dramatic nature of the charges — that Anthony Levandowski smuggled Google-owned blueprints to Otto, his own self-driving truck startup, which Uber then acquired. It’s also because Uber has built such a powerful reputation for fighting mean that the charges sound pretty plausible.

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