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Here's how Tesla's cars stack up against the best of the competition from the world's top automakers (TSLA)

Sat, 10/12/2019 - 14:07

  • Over the years, I've driven all of Tesla's vehicles: the original Roadster, the Model S, the Model X, and the Model 3.
  • But I've also driven hundreds of other vehicles, many if which represent the best-of-the-best coming from the world's automakers.
  • I thought it would be interesting to see how Tesla's all-electric vehicles stack up against some of the gas-powered competition.
  • Remember, if you want all-electric, you're currently limited to Tesla and just a few other vehicles, most of which don't have luxury or performance credibility.
  • As it turned out, I preferred a BMW 5-Series and a Porsche Cayenne SUV to Tesla's Model S and Model X, but I favored the original Roadster over an Alfa Romeo 4C and the Model 3 over an Audi A4.
  • Visit Business Insider's homepage for more stories. 

In just over 15 years, Tesla has gone from an ambitious idea about electric cars to selling almost 250,000 vehicles a year and challenging the world's top automakers.

That in and of itself is an impressive achievement, but Tesla's vehicles are actually quite good. I've driven them all, and I can vouch for their quality and performance. Sure, they have some quirks, and Tesla has definitely endured some growing pains. But there's no discounting the fact that Tesla is the first successful new American auto brand to emerge in decades.

Still, the traditional auto industry is no slouch — it's game has probably never been better. Over the years, I've driven hundreds of great cars and trucks. So I thought it would be fun to put the Tesla fleet up against some of my favorites from the petrol-burning world.

Here's how it went:

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The Tesla Original Roadster. This was the first Tesla I ever drove, and at the time I was overjoyed. I revisited the car half a decade later and renewed my love for the peppy all-electric spider.

Read my appreciation of the original Roadster.

The original Roadster wasn't an original Tesla design: it was based on a Lotus platform, with Tesla adding the drivetrain, batteries, and software.

The Roadster was instrumental in changing perceptions about EVs, which up to that point had been thought of as glorified golf carts. With range of over 200 miles and a 0-60m ph time of 3.7 seconds, for the more advanced version.

The Roadster is also the first production car to be launched into orbit. Tesla CEO Elon Musk made his personal Roadster, piloted by "Starman," the payload on the 2018 launch of SpaceX's Falcon Heavy rocket. Production ended in 2012.

The Alfa Romeo 4C. This is the only car that we've driven at Business Insider that really compares with the Tesla Roadster. It's a bonkers little spider, with a snarling mid-mounted engine.

The 4C is practically a race car. In our review, we noted:

The 4C is actually built around a lightweight, high-strength, carbon-fiber cell. In fact, it's the only car with a price tag less than $100,000 to incorporate the pricey technology, which is one of the many attributes of the 4C that make it kind of an oddball. The only other non-supercar to be built around a carbon-fiber tub is the BMW i8 hybrid sports car. The carbon-fiber driver's compartment allowed Alfa Romeo cut off top of the car without compromising its structural rigidity.

According to Alfa, the 2,500-pound 4C is good for a zero-to-60 run in just four seconds and can reach a top speed of 160 mph.

Like the Tesla Roadster, the Alfa 4C has a pretty basic interior. But on balance, our tester was notably more luxurious.

Power for the 4C comes from a 1.7-liter, 237-horsepower, turbocharged inline-four. The tiny motor is incredibly punchy and pairs well with the quick-shifting, six-speed twin-clutch transmission.

The Tesla Model S. The first "clean sheet" design from Fremont was a luxury sedan that captured Motor Trend's Car of the Year award for 2013.

The Model S is now available in Long Range and Performance trims: $80,000 and $100,000, respectively, with 370 or 345 miles of range.

I've driven several different versions of the Model S, ranging from a rear-wheel-drive example to the dual-motor trim, with two types of battery pack: 90 kilowatt hours and 100 kWh.

Read all about one of my Tesla adventures.

The Model S offers well over 200 miles of range, room enough for five passengers, and SUV-like cargo capacity. Of course, being electric, it does require patience when it comes to recharging. But the Performance trim can outrun supercars with a 0-60 mph time that tickles two seconds.

Luckily for Tesla owners, the Model S has access to the electric-car company's extensive Supercharger network. Plug in at one of these stalls and you can be back to a full charge in under an hour.

The BMW 5-Series. The 5-Series dates to the early 1970s; the seventh generation landed in 2017, and I tested the high-performance M5 last year.

"In the grand automotive scheme of things, BMWs aren't supposed to be that cool," I wrote in my review.

"And then you drive something as exquisitely pugnacious and brilliantly assembled as the M5 and you suddenly don't much care about cool anymore."

Like all M cars, the M5 seems glued to the pavement, even when standing still. My tester was $130,000.

Under the hood we find the 4.4-liter, 600-horsepower, twin-turbo V8 making 553 pound-feet of juicy torque. This is a hulking poleaxe of a motor, a masterpiece of menace — a grand mechanism for taking gasoline and transforming it into staggering velocity.

The 0-60 mph dash passes in 2.8 seconds on the way to an electronically limited top speed of 163 mph

The M5's interior combines a hardcore performance vibe with abundant luxury. It's a showcase for getting what you paid for.

The Tesla Model X. We've taken Model Xs on several road trips and have been generally impressed with Tesla's offbeat, feature-packed, road-going sci-fi electric shuttlecraft.

We've tested the highest-spec Model X's available, and we've pegged the price tags at around $150,000. But Tesla is currently selling the vehicle in two trims: Long Range and Performance, for $85,000 and $105,000, respectively.

The Model X offers 325 miles of range in the Long Range trim and 305 miles of range in Performance. For the latter, the 0-60 mph time is a staggering 2.7 seconds.

The Model X was launched in 2015. It's Tesla's most high-tech car. It could be called "Too Tech," as even Musk has admitted they overdid it. The "falcon wing" doors alone threatened to delay the vehicle.

Again, owners of the Model X can use the Supercharger network, but they have to be patient. My kids banned me from anymore Tesla road trips after we took a 700-mile round-trip in the Model X.

Read about my Model X road trip.

The Porsche Cayenne. The Cayenne Turbo I tested a few months ago was all-new and tipped the price scales at $136,000. That's a lot. But can you put a price on perfection?

In my review, I wrote:

The Cayenne is simply good, good, and more good, and the top-level Turbo trim is especially delightful, capable of orchestrating a brutal symphony of horsepower from that magnificent 541-horsepower, twin-turbo V8. But that's just one dimension of performance bliss.

You also have the bracing handling, delivered through an intricate orchestration of mega-tech features, ranging from a rooftop spoiler than can adapt to increased speed to rear-axle steering and electro-hydraulic roll stabilization.

It's my policy to avoid getting too deep in this gearheady stuff (my driving is 90% emotion and 10% engineering). But with the Cayenne Turbo, it definitely adds up to an SUV that drives, as it always has, like a Porsche — but with the vehicle's upgrades, now more like a Porsche than ever.

Porsche has added character lines and a higher overall level of surface flash to the Cayenne, now in its third-generation. The latest Cayenne is about as sleek as it's possible to make the vehicle without sloping the roof so much that the second row becomes uninhabitable.

The 4.0-liter, twin-turbocharged V8 makes 541 horsepower with 568 pound-feet of torque. This Porsche can tow nearly 8,000 pounds, which is staggering. Fuel economy isn't: 15 mpg city/19 highway/17 combined, and that's on premium gas.

The eight-speed automatic pipes the power to the Cayenne Turbo's all-wheel-drive system. There isn't a whiff of turbo lag with this machine, and the transmission can switch to manual if you want to shift gears yourself.

When the gaping maw of the rear liftgate opens, you have about 27 cubic feet of cargo space to work with and roughly double that when the second row of seats is folded down. That's really quite good.

The Tesla Model 3. The Tesla for the people finally arrived in 2017, and I sampled three versions of it through 2018. I eventually spent a week with a Model 3 that was then priced at $57,500.

In my review, I wrote: 

There is no better vehicle of this type at this price that I believe I could currently buy. I literally craved looking at and driving the Model 3. But beyond that, I now count it among the small cadre of vehicles I've driven in my life that I have felt fit me absolutely perfectly and satisfied my every desire.

Basically, I think the Model 3 has more ideas in it than any car on the road. What's impressive is that it's advanced how we think about automobiles.

By the way, Tesla is now selling three versions of the Model 3: the Standard Range Plus single-motor trim at $39,000; the Long Range dual-motor at $48,000; and the Performance dual-motor trim at $56,000.

Range options are 240 or 310 miles, and the shortest 0-60 mph sprint is 3.2 seconds (for the Performance trim).

Arguably, the most striking feature of the Model 3 is its ultra-minimalist interior, with almost all vehicle functions and displays found in the central touchscreen.

Like the Model S, the Model 3 can handle a lot of cargo. The trunk is 15 cubic feet, but there's also a smaller front "frunk."

Yep, Supercharging is available for the Model 3.

The Audi A4. We tested the A4 in 2017 and were blown away. It's Audi's perfect sedan. A brand new A4 sedan starts at a competitive $34,900, while our option-laden test car came with a price tag of $54,275.

Styling-wise, the new A4 is elegantly understated. It's the latest evolution of the modern design language that has come to define the brand in recent years. Audi is now into the fifth generation of the vehicle.

The A4's cabin is a no-holds-barred high-tech masterpiece. The Audi Virtual Cockpit infotainment system is a two-time winner of our Infotainment System of the Year award.

In our review, we also noted the Audi's luxuriousness:

The A4's cabin is as quiet, refined, and plush as one has come to expect from a top-line Audi product. The black leather seats in our test car felt soft to the touch and offered more-than-adequate bolstering for both leisurely jaunts down the highway and dynamic drives on twisty country roads.

Under the hood is a 2.0-liter, 252-horsepower, turbocharged, inline-four-cylinder engine that's shared with the A6, the Q5, and the Porsche Macan. The gutsy motor is truly impressive. It's paired with Audi's 7-speed S-tronic twin-clutch transmission and Audi's legendary Quattro all-wheel-drive system.

According to Audi, the Quattro-equipped A4 is capable of sprinting to 60 mph in 5.7 seconds and can reach an electronically limited top speed of 130 mph.

Now for the verdicts! Tesla Roadster vs. Alfa Romeo 4C: It's the Roadster!

The Alfa 4C might have go-kart handling and the personality of a Jack Russell terrier that's consumed a case of Red Bull, and it might in many ways be a budget Ferrari, but I just love the dang Tesla Roadster. It started a revolution, after all.

Tesla Model S vs. BMW 5-Series: It's the BMW 5-Series!

The Model S is important in that it proved Tesla could go it alone and create a fantastic car. The Model S has also been the platform that's introduced everything from Ludicrous Mode acceleration to Autopilot semi-self-driving. At full song, the Performance S can outrun supercars.

But the M5 is a never-subtle reminder that the Germans know how to build a hell of sport sedan. It continues to command respect.

Tesla Model X vs. Porsche Cayenne: It's the Porsche Cayenne!

Let's keep it simple: the Porsche Cayenne is still the best SUV built by human hands on planet Earth.

Tesla Model 3 vs. Audi A4: It's the Model 3!

The A4 might be the best car Audi has ever built, but as I wrote of the Model 3 after my week-long test:

The Model 3 impresses on all fronts.

It can blast to 60 mph in five seconds, it can drive itself under some conditions, and it has a five-star safety rating from the government. What's more, it's a California-made, all-electric car from the first new American car company in decades.

But the truly astounding thing is that Tesla, in only about five years of seriously manufacturing automobiles, could build a car this good. That's a staggering achievement.

Wait, did I say good? I meant great.

Hold on, did I say great? Sorry, I meant greatest.

Say hello to the best car that money can currently buy.

Categories: English

I tried the new device that lets you print Polaroids directly from your smartphone, and it was a fun but pricey experiment

Sat, 10/12/2019 - 13:58


  • Polaroid released the Polaroid Lab, a way to print photos from your phone.
  • The printer costs $130, and went on sale October 10.
  • Users select a photo in the Polaroid Originals app, and place their phone facedown to print.
  • The Polaroid Lab was fun to test out, but it's an expensive device for one person to use. 
  • Visit Business Insider's homepage for more stories.

For anyone obsessed with the nostalgic look of Polaroids, Polaroid Originals has the perfect new gadget for you. 

Polaroid Originals on Thursday released the Polaroid Lab printer. The white and black printer allows you to turn any digital image into analog Polaroids straight from your smartphone. 

Polaroid was founded in the 1930s, and became popular for its instant photo products. But with the rise of digital photography, Polaroid declared bankruptcy in 2001. In 2017, the Impossible Project bought the brand and launched Polaroid Originals, creating new cameras for "the modern era" called the OneStep 2 and the OneStep Plus, named after Polaroid's original camera from 1977. 

Read more: I don't have a baby, so I tested a smart baby monitor by watching my pet hedgehog all night — here's what I discovered

In the press release accompanying the launch of the Lab, CEO Oskar Smolokowski appealed to a simpler time before everyone had high-quality cameras on them all the time.

"The idea behind the Polaroid Lab is that it turns your most precious smartphone photos into tangible Polaroid photographs — bringing them into the world as something you can hold in your hand and store on the fridge door rather than in the cloud," Smolokowski said. 

He calls cloud storage and digital photos "memories' worst enemy," saying that we take thousands of images that we never end up looking at.

To that end, the new Polaroid Lab is intended to take digital images off of your phone and turn them into tangible photographs. I decided to got one into the office try out for a few days — here's what it's like to use. 

SEE ALSO: I tried dopamine fasting, the latest trend in Silicon Valley, and it was way more difficult than I expected

The printer comes already assembled in a cardboard box. The directions are clear, and there's nothing to put together.

I had both black and white and color film to test.

First, I opened the color film first, and unwrapped the cartridge.

The film goes in an opening in the bottom of the Lab. This was the least intuitive part for me, but it didn't take too long to figure out.

Next, in the Polaroid app, access your camera roll and choose a photo. (The device works with both iPhones and Android phones).

Then, choose your sizing. I used singles so I could try out as many photos as possible.

You'll be prompted to choose what film type you have — I started with color film.

One tip: Before getting started, make sure you have the brightness turned up on your phone, and for iPhones, True Tone turned off.

To get started, place your phone screen down on the scanner — the lights will blink when your phone is lined up. When you press the red button to print, the lights next to it will indicate how much film you have left.

When your photo prints, you'll have to remove it and flip it over for 15 minutes while it develops.

Here's the first photo I printed. It came out looking recognizably like a Polaroid: kind of faded and overexposed. But that's the aesthetic you know you're getting when you use a Polaroid.

I tried another color image, and I liked how it came out.

I also tried a black and white one. I think next time, I would use a darker photo, since this one turned out very overexposed.

My final thoughts? The Polaroid Lab is fun but a bit pricey.

The Polaroid Lab was fun to use — and makes for cute decor — but it's an expensive toy.

I do like the ability to print pictures without going to CVS, and I can see myself decorating my desk or mirror with the images it produces. The photos are recognizable as Polaroids, and I had fun choosing images off my phone. I think the Lab would work best if several people shared it, like a family or group of roommates. Otherwise, I don't think it will get used enough to be worthwhile for one person.

But if you're one of many millennials and Gen Z-ers who like a vintage aesthetic, this might be perfect for you.

Categories: English

Google is getting ready to unleash a bunch of new gadgets including the Pixel 4 on Tuesday — here's everything to expect (GOOG)

Sat, 10/12/2019 - 13:48

  • Google is holding an event on October 15, where it's expected to reveal its new Pixel 4 smartphone, a new Chromebook, and other gadgets.
  • The Pixel 4 will likely be the biggest announcement of the showcase, despite the fact that its design and features have leaked and Google has already shared some details about the device.
  • The event also comes just after rivals like Apple, Amazon, and Google have debuted new products as the holiday season approaches.
  • Visit Business Insider's homepage for more stories. 

Google's annual developer conference may be its biggest event of the year, but the company usually holds its major hardware announcements for the fall.

At this year's event, which takes place on October 15, we're expecting to get a better look at Google's much-leaked Pixel 4 phone as well as other anticipated products, such as a new Pixelbook Chromebook and more Nest devices.

The event comes on the heels of new product launches from Amazon, Microsoft, and Apple — all of which have announced new gadgets ahead of the holiday season that pose a challenge to what we're expecting from Google. 

Here's a look at the biggest announcements the Mountain View, California-based tech giant is expected to make on Tuesday. 

SEE ALSO: 14 incredibly useful Google Maps features everyone should know about

Google's next flagship smartphone, the Pixel 4

The biggest announcement of the day will likely be the formal unveiling of the Pixel 4, which has leaked repeatedly leading up to Google's event. The search giant has also already revealed some tidbits about the Pixel 4, such as what it will look like and some of the features it will include.

Here's a look at some of the details we've learned about the Pixel 4 so far:

  • It will have advanced motion-sensing technology powered by the company's radar technology, Google revealed in July. Such technology would make it possible to skip to the next song or answer phone calls just by waving your hand.
  • The phone will also have a square cutout on its rear for the camera sensors, similar to Apple's new iPhones, but will have a dual-lens camera, as a photo posted by Google revealed.
  • The camera will be able to achieve a zoom of up to 8x, according to a leak that surfaced on the Chinese social media site Weibo spotted by XDA Developers.
  • Its screen will have a 90Hz refresh rate, which should make scrolling and screen animations feel smoother, according to 9to5Google.
  • It won't have a fingerprint sensor on the back like the Pixel 3, as Google's images revealed.

Read more: Forget the iPhone 11: The next iPhone could spark the next big thing for Apple


A lighter new Chromebook called the Pixelbook Go

Google also has a new Pixelbook in the works, which it plans to unveil during Tuesday's event, according to 9to5Google.

The laptop will have a 13.3-inch 4K screen, a lighter body made of magnesium alloy, and a textured ribbed back, as 9to5Google has reported. It will also reportedly come in configurations ranging from Intel's Core m3, i5, and i7 processors, and will have more powerful speakers than the Pixelbook. 

New Pixel Buds wireless earbuds

Google may finally announce a successor to the Pixel Buds it released in 2017, which received largely negative reviews two years ago.

The company is set to announce a new pair of earbuds soon, according to 9to5Google, although the report didn't mention any details.

It wouldn't be surprising to see Google take another stab at wireless headphones, especially now that every major tech firm from Amazon to Samsung and Microsoft has done so.

Google's current Pixel Buds, however, are connected by a cable which means they aren't truly wireless like Apple's AirPods and recent offerings from other tech giants. If Google does launch a new pair of earbuds, there's a good chance they'll be totally wire-free in order to keep up with the competition. 

Read more: Amazon doesn't see Apple's AirPods as a threat to its new Echo Buds, says company executive

More Nest smart home devices

Google debuted the $230 Nest Hub Max earlier this year, but it sounds like there's more Nest-branded devices to come. 

Google is planning to debut a new mesh Wi-Fi router and a refreshed version of its Google Home Mini, according to 9to5Google. Both devices will fall under the Nest umbrella since Google officially rebranded its smart home products as such in May.

The Nest Wi-Fi system will include beacons to be placed throughout the house that also function as Google Assistant speakers, reports 9to5Google. The new miniature speaker will offer improved sound quality, a 3.5mm stereo jack, and a wall mount for hanging the device in the home, as 9to5Google has reported.

The reveal would come after Amazon just unveiled eight Echo products at the end of September, including a new Echo Dot that doubles as a bedside clock, a new Echo Show with a larger 8-inch display, and the Echo Studio — a larger Echo that includes five speakers that can adapt playback to best fit the room it's currently in. 

Categories: English

11 of the biggest innovations shaping the future of spaceflight today

Sat, 10/12/2019 - 13:46

Most who grew up during the days of the space race were promised a future with moon colonies, orbital space stations, and routine travel to the stars. But that future has always been elusive, since it has long depended upon shifting Congressional priorities and timid funding — currently, NASA's budget is about $21 billion, or 0.49% of the federal budget. 

In recent years, however, private industry has started to take the lead in humankind's march into space.

Unfortunately, some innovative companies have recently crashed back to earth. Two different startups hoping to become pioneers in the asteroid mining industry — Planetary Resources and Deep Space Industries — recently pivoted away from their ambitious space mining plans

But for every failure, there are a handful of innovators still moving forward, from SpaceX, which recently unveiled its latest prototype of Starship, a rocket system design to populate Mars, to Axiom and its plans to deploy a commercial space station.

Here are the 11 most exciting innovations shaping the future of spaceflight today.

SEE ALSO: 9 predictions from old sci-fi movies that actually came true

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SpaceX has made reusable rockets not just practical, but routine.

In the 11 years since SpaceX's first successful orbital flight, the rocket company founded by Elon Musk has made its mission to pioneer the creation of rocket boosters that can land vertically, like the cover picture of a 1950s-era sci-fi novel, then be reused for another flight.

SpaceX has successfully landed 44 boosters out of 52 attempts after using them to launch payloads toward space. More than half of the recovered boosters have flown more than once with relatively little refurbishment. The company has made reusability routine, setting the stage for inexpensive spaceflight and routine missions to orbit, the moon, and possibly even Mars.

Virgin Galactic is preparing to fly passengers to space for 20 minutes of weightlessness more than 50 miles high.

In 2004, an air-launched rocket-powered aircraft called SpaceShipOne won the $10 million Ansari X Prize for successfully carrying a three-person crew to space and back again twice in a two week period. 

It was an achievement that may have kicked off the age of space tourism in a reusable spacecraft. Virgin Group founder Richard Branson soon formed Virgin Galactic and started development of SpaceShipTwo, a larger vehicle that could routinely take six passengers and two pilots to the edge of space to experience zero gravity for "several" minutes before landing on a runway.

Though Virgin Galactic hasn't met its original timetable, the company's current prototype spacecraft, VSS Unity, has flown above 50 miles twice, qualifying as a spaceflight by American standards, though the FAA defines the border with space at the Kármán line, which is 62 miles high.

Virgin Galactic has completed its spaceport near Las Cruces, New Mexico, and is proceeding with construction of two more SpaceShipTwos. While routine commercial operations aren't imminent, earlier this year Richard Branson said, "Next year I'll be going up."

Boeing has spent a decade developing the CST-100 Starliner, the next generation crew capsule that may take civilian tourists to the space station.

At first glance, the Boeing CST-100 Starliner looks like a throwback to the days of the Gemini and Apollo missions. It's a crew transport developed for NASA to ferry astronauts to the International Space Station, and it looks like a modernized Apollo capsule.

But the Starliner is much more. Designed to accommodate crews of up to seven people and able to spend nearly seven months in orbit, it's also intended to be reused up to 10 times. NASA commissioned the Starliner as a part of its Commercial Crew Development program in 2009 as a replacement for the now retired space shuttle. It's not the only spacecraft in development for space station taxi duty — SpaceX is developing the Dragon 2 capsule, which is neck and neck with Starliner for a first crewed flight, likely in early 2020.

But that's not the most exciting news for space tourism advocates. Space Adventures has shown interest in flying the Starliner to the ISS, and Boeing is exploring other partnerships for tourism as well.

John Mulholland, the Boeing Starliner program manager, says there's been "a lot of interest from both paying passengers but also other companies and other nations that are either part of the space station community and want additional access or are building their own destinations."

SpaceX is building the most powerful rocket in history.

On September 28, Elon Musk unveiled the latest prototype of Starship. The final vehicle is designed to be two stages: a spaceship of the same name that sits atop a Super Heavy booster. When the full system flies into orbit for the first time — possibly within the next two years — it's expected to be the largest and most powerful rocket ever flown.

The Saturn V, which sent humans to the moon nine times, could put 130 tons in low earth orbit. Starship, in comparison, should be able to hoist 150 tons to orbit — while preserving enough fuel to return both stages to earth to be reused for additional flights.

The Super Heavy will be powered by an array of no fewer than 24 Raptor engines burning liquid methane with liquid oxygen. Critics have compared Super Heavy to the ill-fated Soviet N1 moon rocket, which never got more than 25 miles off the ground because Soviet rocket engineers couldn't tame the ungainly cluster of 30 engines. But SpaceX has demonstrated expertise with reliably firing engine clusters — the Falcon Heavy, which has now flown twice, is comprised of 27 Merlin-1D engines.

Axiom is planning to launch a private space station to replace the ISS.

The fate of the International Space Station may be uncertain. It's scheduled to be decommissioned in just five years, after which it may be handed off to commercial operators or simply deorbited, to crash into the Pacific. But there's already a company ready to step in to fill the void. Axiom Space was founded in 2016 to develop a commercial space station to facilitate both industry and space tourism.

Axiom isn't the first company to propose building its own space station, but it has heavy hitters from NASA on its payroll, including a ISS program manager, and is trying to move fast. Axiom has announced plans to routinely offer 10-day visits to the ISS. The company also said it intends to start launching its own modules to the ISS starting sometime after 2020. 

Eventually, Axiom hopes to launch its own power and propulsion modules and re-link its ISS modules into its own stand-alone space station. The company expects to be able to do all this for about $1.8 billion. In comparison, the ISS cost NASA roughly $150 billion.

Orion Span hopes to let people spend their honeymoon in low earth orbit on a luxury space station.

Unlike Axiom, which has its sights set on a large orbital platform that can pick up where the ISS left off, Orion Span has a much narrower focus. It's planning the Aurora Space Station, a modestly sized station with a complement of six people — two crew and four visitors. Orion hopes to woo wealthy space tourists who can spend about $9.5 million for a 12-day stay.

The station will be about 12 feet wide and 35 feet long, with private sleeping pods, luxury décor, and plenty of viewing areas. The real innovation here is that Aurora thinks it can do this on a veritable shoestring budget. Instead of hundreds of millions of dollars, Orion Span CEO Frank Bunger told the Berkley Haas School of Business that the initial single-module station could be built for a tiny fraction of that: $65 million.

Unfortunately, the future of Aurora is uncertain. The company was looking to raise $2 million through a crowdfunding campaign, but appears to have raised just 10% of that goal.

Bigelow is planning to build an inflatable space station — and it's already deployed an inflatable modules on the ISS.

Bigelow Aerospace is planning to orbit its own space station, which is remarkable enough. But it's how the company plans to build this station that makes it revolutionary. 

Founded in 1999, Bigelow is one of the more established aerospace companies working in low earth orbit. The company has long evangelized inflatable modules. Built of a soft, expandable material, they're lightweight and pack into a relatively small space for launch, but can be pressurized and expanded once in orbit. Designed with a Kevlar-like material, they're as strong and robust as traditional space station technologies. In fact, Bigelow acquired the technology for expandable modules from NASA, which had originally considered using it for sections of the ISS.

Bigelow has been flying an inflatable module onto the ISS for more than two years, and is now developing a private space station for industrial applications and space tourism. Currently, the company is promoting its inflatable B330, which it says is an autonomous station that can be orbited in a single launch, rather than assembled in orbit after multiple launches. It can accommodate four people with two galleys, two toilets, large cargo space and two propulsion systems.

The Gateway Foundation wants to build an enormous rotating space station like the one in '2001: A Space Odyssey.'

There's a lot of interest in private space stations, but none more ambitious than the Von Braun Station. An enormous Ferris wheel in space, Von Braun would measure 1,600 feet (about a third of a mile) in diameter, have almost 12 million cubic meters of pressurized volume, and spin in order to provide simulated gravity for the occupants. As a point of comparison, the ISS has 32,333 cubic feet of pressurized volume — hundreds of times less, and about the same as a Boeing 747.

The station is the goal of the Gateway Foundation. Like the now-defunct Mars One organization that wanted to put colonists on Mars through some sort of reality TV programming, it seems like the Gateway Foundation might have impractical expectations. 

But the Foundation has engineering drawings and plans to build the station using two dozen Bigelow B330 inflatable modules, along with a membership program that includes space advocacy and a pathway to working in orbit on the space station.

The Aerospace Corporation has proposed the equivalent of shipping containers for launching small satellites.

When the now-ubiquitous shipping container was introduced in the 1960s, it radically transformed the workflow of loading and unloading cargo ships and consequently revolutionized the global economy. Similarly, the Aerospace Corporation has proposed a standard "launch unit" for small satellites that could remake the launch industry.

It's hard to overstate the complexity of a space launch manifest today. Payload owners need to work closely with launch providers to find room aboard a scheduled launch and "rideshare" on the rocket. If something goes wrong — for example, the primary payload gets scrubbed or the ridesharing smallsat suffers its own delay that forces it to move to another launch date — the complex process has to start all over again.

In a statement, Aerospace Corporation said, "Developing a standard Launch Unit, or Launch-U, for mid-sized smallsats — approximately the size between a toaster and a small refrigerator — will enable rideshares to be configured more quickly and efficiently, resulting in more launch opportunities at a lower cost."

Moon Express is on target to send a lunar lander to the moon in 2020.

From 2007 to 2018, Google sponsored an X Prize that would have awarded $30 million to the first team that could land a robotic spacecraft on the moon, travel 500 meters, and send high definition video of the excursion back to Earth. At the time, a number of teams completed for the prize, but none were able to launch before the competition was terminated. 

But a few teams soldiered on, even without the potential of winning a prize. Moon Express is one of the few remaining competitors still in the race, and plans to launch in July 2020. The company is building a lander, dubbed the MX-1E, which will land on the moon's south polar region to look for the presence of water in support of future manned missions and lunar settlements. 

With any luck, it won't suffer a similar fate as the private Israeli moon lander, Beresheet, which crashed into the lunar surface because of a software glitch

SpaceX may use Starship to rocket passengers anywhere on Earth in about a half hour.

This may be SpaceX's third appearance in this list, but it's well deserved. In addition to flying resupply missions to ISS, planning a private Apollo 8-style mission around the moon, and moving full speed ahead on a plan to populate Mars, the company has announced plans to use its massive Starship system to fly suborbital missions to routinely ferry passengers around the world in about half an hour. 

Both rocket scientists and sci-fi novelists have talked about the potential for getting between any two points on earth in less than an hour. After all, that's the idea behind nuclear-tipped ICBMs. But in 2017, Elon Musk unveiled a plan to actually do it. Sometime in the 2020s, you might be able to board in New York and disembark in Paris 30 minutes later, or go from London to Hong Kong in 34 minutes.

The best part is that you'd get to see the curvature of Earth from space and experience a ride like Disney's Space Mountain in the process, says Musk.

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VMware's COO says that its $2.1 billion acquisition of Carbon Black is all about fixing cybersecurity, an industry 'going through turmoil' (VMW)

Sat, 10/12/2019 - 13:45

  • On Tuesday, VMware closed its $2.1 billion acquisition of cybersecurity company Carbon Black.
  • VMware plans to make use of Carbon Black's cloud security product line to help propel it to success in cybersecurity, a new focus for the company. 
  • VMware COO Sanjay Poonen says there's too much "fragmentation" in the security industry, so he hopes its customers will turn to VMware for their cybersecurity needs rather than having to buy too many applications from different companies.
  • Click here for more BI Prime stories.

VMware COO Sanjay Poonen says that the cybersecurity industry is "going through turmoil," making it the right time for the virtualization giant to enter the industry.

The issue, Poonen says, is that there's too much fragmentation in the cybersecurity industry, because each individual company is trying to solve a single, niche problem — even as larger companies are "not innovating anymore," he says, meaning that many customer needs are going unmet. 

"The problem is many CIO's believe they're more fortified if they spend on more tools and there's more layers to the moat to protect you from your enemy," Poonen said. "This creates complexity for organizations."

VMware, for its part, already offers the software that provides the IT infrastructure for many of the largest companies in the world. The opportunity, Poonen says, is to become something of a one-stop shop to help its existing customers lock down their networks from hackers and other bad actors.

VMware is staking its bets on cloud security company Carbon Black, the company it purchased for $2.1 billion in a deal that closed on Tuesday. Together with its new acquisition, Poonen says he believes VMware will become a "strong force in security."

"We're very excited," Poonen told Business Insider. "We will become as a result of this one of the strongest players in security. From our perspective, the vision of this intrinsic security story is unique."

The deal comes at a time when companies are more aware than ever of the risks of a cyberattack, with the Equifax or Capital One hacks both matters of recent memory.

"I think in summary, security is challenged right now because it's a very important topic for technology leaders inside of companies, for boards, for executive teams," Carbon Black CEO Patrick Morley told Business Insider. "It can change the brand or the finances of a company overnight if they get breached."

A 'very natural next step'

VMware and Carbon Black first began a partnership two years ago, as part of a push into cybersecurity. It wasn't VMware's first foray into cybersecurity, but Poonen says the company liked that Carbon Black's security products worked especially well to lock down software running in the cloud, and how it used massive amounts of data to detect threats.

Essentially, Carbon Black provides security services for applications that run on the cloud or on private data centers. It also analyzes network data to spot threats and alert the IT department. Under the partnership, VMware made it easy to use Carbon Black to secure the software running on its virtualization platforms. 

Carbon Black especially appealed to VMware because it combined several crucial security services into one product, vastly simplifying life for its customers. Poonen says that it worked out, too, because customers told VMware that they were already using Carbon Black themselves, so the integration helped them out.  That paved the way for the acquisition, he says. 

Read more: Experts say VMware is trying to get closer to developers with the $4.8 billion it's spending to acquire Pivotal and Carbon Black

"When it came time to say 'we want to play in that space,' it was a very natural next step," Poonen said. "I would say this felt like a natural marriage we put together, and it's because of the work the Carbon Black team had been investing in VMware."

'Obviously cybersecurity is an unavoidable topic'

Poonen says that while companies like Cisco and Palo Alto Networks focus more on network security, while companies like Splunk focus on monitoring, VMware's acquisition of Carbon Black gives it the opportunity to round out its cybersecurity capabilities and build them into its products.

"Obviously cybersecurity is an unavoidable topic," Poonen said. "The only thing that's going faster than the spend on security vendors is the number of breaches and the bad guys."

Poonen and Morley say that together, they can make a difference in the cybersecurtity industry by helping VMware's existing customers do more to protect themselves.

"The opportunity to do that in conjunction with VMware who has hundreds of thousands of customers globally – it's an awesome opportunity for us to bring a platform that can really help companies better secure themselves and bring it out across the globe," Morley said. "Being able to do that on top of VMware was super compelling."

SEE ALSO: A top VMware exec says it's becoming the 'largest force' in the Google-made Kubernetes, as it places a 'huge bet' on a tech that many thought would kill it

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Silicon Valley's founder-led startups have lost their shine with IPO investors. But the obsession with direct listings won't fix the bigger problem.

Sat, 10/12/2019 - 13:00

With his long hair, proclivity for walking around barefoot and reputation for partying, WeWork founder Adam Neumann could have been straight out of central casting for a fictional "tech CEO" in a movie. 

That over-the-top persona is also what made Neumann a liability for WeWork in the eyes of straight-laced, conservative IPO investors. Neumann never had the chance to meet, or spook, investors in a pre-IPO roadshow for WeWork— he was ousted from the CEO job the week the roadshow was supposed to kick off, and the IPO was subsequently shelved.

WeWork's cancelled IPO is now at the center of a broader Silicon Valley reckoning, as venture capital investors and others obsess over an IPO alternative called a "direct listing." The direct listing has been framed as a way for tech startups to list their shares without being beholden to an outdated process created by Wall Street bankers and designed to benefit their clients. 

But direct listings are still a new, relatively untested concept that may not provide the all-around salvation some expect. And while venture capital investors bash an IPO system they say is broken, their sudden zeal for direct listings is, in at least one major sense, the result of a problem they created themselves.

The "founder friendly" movement in which VC investors deferred to startup founders, no matter how quirky or extravagant, has produced a crop of richly-valued companies with unconventional executives in the top job. And as many of these companies now look to go public, they're finding that an offbeat founder CEO is not always a selling point during a roadshow.

A direct listing provides a convenient way to skip that conversation.

"When you do a direct listing, you don't have to put them up there," said one VC firm founder about inexperienced or unpolished management teams. "There's a negative side that the VCs see, but they can hide it behind the direct listings," he said.

In a direct listing, a company simply lists its shares on a public exchange and the stock begins trading. There's no banks underwriting the offering, setting a price and selling it to institutional shareholders, as happens in an IPO. And while insiders, like VC investors and early employees, can sell shares right away in a direct listing, the company itself does not raise any capital.

Lise Buyer, the founder of IPO advisory firm Class V Group, describes direct listings as an interesting alternative to IPOs that will work for certain companies but that's currently wrapped in a lot of hype: "It's the new shiny object that is aggressively and brilliantly marketed."

"Ride the positive narrative" and avoid the hedge fund questions

For now, direct listings exist more in the realm of theoretical and wishful thinking than reality. To date, only two companies — Spotify and Slack — have opted to go public this way. 

But according to a recent Bloomberg report, Airbnb, the home-sharing service valued at $31 billion, is leaning towards a direct listing instead of an IPO when it goes public in 2020.

That could help the company avoid uncomfortable questions about its management team's qualifications. Brian Chesky, the cofounder of Airbnb who serves as CEO, has a background in industrial design and has never held a high-level role at any other company. Although Chesky has grown Airbnb into a juggernaut, his public company experience, and lack of the traditional engineering or business background, would likely get a hard look during an IPO roadshow, the founder of the investing firm speculated. 

"You could make a case for companies to just ride the positive narrative and just go out there with a direct listing because you don't want to answer all these extremely scrutinizing questions from some hedge fund guys," said Synovus Trust Company portfolio manager Dan Morgan about startups with novice or quirky CEOs.

In years past, a seasoned executive might have been brought on to take the reins as the startup neared its IPO. But with founders now revered, and in some cases calling the shots thank to special supervoting shares, many of the most valuable startups are helmed by founders who may or may not have the chops to run a public company.

"A CEO/Founder with a quirky personality would be fine to do a direct listing and avoid all the scrutiny of a road show," Morgan said.

Still, he stressed, everything changes after company's first earnings call as a publicly traded organization. And in the case of WeWork, he believes that even a direct listing wouldn't have saved it from a brutal reception in the public markets: "The model was not sound as there appeared to be no roadmap to profitability."

The times have changed and IPO "needs innovation"

Of course, plenty of unorthodox founders have made it through the roadshow process and gone on to lead successful publicly-traded companies. Facebook CEO Mark Zuckerberg famously caused a stir by wearing a hoodie to the pre-IPO investor roadshow. Seven years later, the stock is up 374% and Facebook is worth $514 billion.

And the two companies that have recently gone public through direct listings were not trying to hide unpolished or inexperienced CEOs from criticism. Slack founder and CEO Stewart Butterfield is one of the tech industry's most respected, serial entrepreneurs, with a track record that includes creating photo sharing site Flickr and selling it to Yahoo for $20 million in 2005.

Slack had an optimal business model and enough brand recognition to pull off a direct listing in June, said Jyoti Bansal, a startup founder and tech investor who is a big believer in the potential of direct listings.

Bansal attended a special, invite-only summit earlier this month devoted to the merits of direct listings. The event took place in San Francisco and was organized by several VC firms in the wake of the disappointing Uber and Peloton IPOs, and the WeWork implosion.

"The way the IPO is done today is almost like a 25-year-old concept. It just needs innovation" said Bansal, who is the cofounder and CEO of enterprise startup Harness and cofounder of venture firm Unusual Ventures.

"Twenty-five years ago the primary purpose of IPO was that people didn't have access to growth capital, so you had to go to public markets to get growth capital. Now, everyone has it," he said.

Class V's Buyer says the notion that direct listings are a cheaper and more democratic process than traditional IPOs is partially true. Since the company isn't raising funds, it doesn't need to work with a traditional underwriter and thus does not need to pay the associated fees. Still, she noted that a company must pay some banker fees, register with regulatory bodies like the SEC, and participate in an audit, all of which are costly undertakings.

Spotify paid $32 million in fees for its 2018 direct listing, according to Inc, compared to the $102 million that Uber paid in its traditional IPO.

No lock-up is a big benefit — for some

Clearing the path to a liquidity event is critical for VCs who have sunk tens or even hundreds of millions of dollars into startups.

Buyer also noted that direct listings — which allow employees to sell all their vested shares right away, without the traditional several month "lock up" period of an IPO — could incentivize valuable employees to cash out and jump ship.

"I don't think it helps with [employee] retention. It actually is perhaps the opposite," Buyer said of direct listings.

And for recently-hired employees with unvested stock, a direct listing can leave them at a disadvantage if the stock sinks.

In the case of both Slack and Spotify, the companies achieved peak share prices in the first weeks or months of trading, and have only lost value since. That means early investors were able to cash out at near-peak pricing while employees with unvested stock and retail investors were left holding shares that were only becoming less valuable.

"Those who sold on Day One at Slack got a better price than those that sell today," said Buyer.

SEE ALSO: This is going to be a record year for $100 million-plus startup investment deals — and it has the unexpected side effect of forcing startups to grow up way faster

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NOW WATCH: I cleaned my entire apartment with 4 of Amazon's highest-rated cleaning robots, but I could've done a much better job myself

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How Jim Heckman — the slick businessman behind the mass layoffs at Sports Illustrated — became the most hated man in sports media

Sat, 10/12/2019 - 12:30

  • A little over a year ago, Jim Heckman was sermonizing about his plan to save the publishing industry from Facebook.
  • Now, after overseeing deep cuts at Sports Illustrated, he just might be one of the most-despised men in sports media.
  • Heckman isn't done, though. He wants to add a news site to his portfolio.
  • But he's funded his latest startup Maven with massive amounts of debt financing, a type of funding that typically comes at a high cost, and raising money for media generally is getting harder.
  • Click here for more BI Prime stories.

A little over a year ago, Jim Heckman was sermonizing from a mountaintop in Canada about his plan to save the publishing industry from Facebook.

Now, he just might be one of the most-despised men in sports media.

Heckman is a serial entrepreneur who's started and sold various digital ad and media companies over the years. His latest is two-year-old Maven, a tech and ad platform he pitches as a way to help niche publishers claw back some of the digital ad revenue from Facebook. 

Read more: 'All three companies do the same thing:' Digital publishing mashup Maven cut $5 million and laid off 17 Say Media staffers to reach profitability

The platform flew under the radar when it was just a coalition of mostly obscure publishers like Mom Trends and But then Maven took over Sports Illustrated's media operation last week and laid off 40 of the 150-person staff and announced plans to use contractors to supplement the permanent staff.

Employees of the publication took the dramatic step of putting out a statement begging SI's former and new owner, Meredith and Authentic Brands Group (ABG), to save them, saying they questioned Maven's ability to manage the iconic magazine. 

The next day, the reliably scathing Deadspin dropped a 4,000-plus word takedown calling Heckman a "notorious scumbag" who's "gutting and reinventing a revered publication." The New York Post called the layoffs "brutal."

On Twitter, the insults flew. 

"In sports media, I find it impossible to believe there is a more despicable awful person than Jim Heckman," tweeted Brian Snow, an analyst for 247Sports, a network of sports sites owned by CBSInteractive.

Heckman chafed at the article and lamented that his 80-year-old father had to see it.

"We spent a year on this, we made the move, we were literally sitting around [waiting] for the nasty stories," he told Business Insider. "'Okay, well, who's going to hit first?' And, you know, we thought tomatoes would be thrown at us."

Media is in a panicky time

These are jittery times for the media business. Venture capitalists poured money into new media companies, only for many of those companies to collapse, resulting in thousands of job losses this year alone and leaving others worried for their future. Companies are dumping magazines with rich legacies and digital startups are being sold for a fraction of their onetime value. 

Sports Illustrated's situation was especially bizarre. Meredith inherited it as part of its purchase of Time Inc., but SI, along with Time and Fortune, didn't fit with Meredith's portfolio of women's magazines. 

Moguls swooped in to rescue journalistic treasures like Time and Fortune. But there would be no such billionaire to step forward to buy Sports Illustrated, which, despite its proud history in sports journalism, doesn't have quite the same image-burnishing cache. Long story short, Meredith sold it to ABG, a branding, marketing and entertainment company. ABG doesn't have experience running media, so it licensed the operation to Maven. 

Now SI is in the hands of Heckman and his longtime pal and business collaborator Ross Levinsohn, whose pasts are littered with controversies including accusations of financial mismanagement in Heckman's case and inappropriate workplace behavior in Levinsohn's case that have been chronicled by NPR and others.

Shiny suits, Russian connections

Many in the media establishment turn up their noses at Heckman, with his shiny suits, Russian financial connections, and party life documented in photos online.

"I think people were expecting some kind of white knight to save SI," said Ben Koo, who runs Awful Announcing, a sports blog, and who has followed Heckman's media career from the sidelines. "They've gone through a lot of bad things. So it's a double shot of bad news."

Heckman has a history of starting and selling companies — often with help from Levinsohn — and leaving a trail of failed companies and accusations of malfeasance.

He raised $70 million in venture capital to found, an online sports network, in 1998, but it collapsed in the dot-com bubble.

In 2001, Heckman went on to start Scout Media, raising $6 million. In 2005, Levinsohn, then heading Fox Interactive, led the purchase of Scout Media for a reported $60 million. Heckman bought back Scout in 2013 and it went bankrupt three years later.

In 2009, he helped start 5to1, an online ad sales platform, raising $19.3 million from Fuse Capital and Prism Venture Management, among others. In another Levinsohn-encouraged deal, Yahoo bought it in 2011 for $28 million.

Heckman has a plan

To hear Heckman tell it, his experience has been one success after another, and that now he's going to apply that digital media know-how to fix Sports Illustrated.

The case he's been making while doing the rounds with media reporters this past two weeks is that SI is in terrible financial shape after years of being neglected by its past corporate parents and leapfrogged by nimbler digital rivals. Scribbling his plan on a piece of paper, he said he sees a "big opportunity to correct the deficiencies." 

His goal is to double revenue to $40 million and traffic to 30 million unique users by the end of 2020.

"Their strategy for content has not worked," he said. "Their journalists are good, but nobody's reading their stuff. The company was nose-diving into oblivion. Their users have collapsed to 17 million, their print distribution is below 2 million. So, when people are saying, 'Save it,' can you imagine, 'Hey, here's our plan, we're going to keep doing the same thing?' I mean, it's comical.

"We're on a hiring frenzy right now. You're going to see press releases. We're going to try to bring SI back to its glory. We put a big, six-figure offer out to one of the top journalists of America yesterday. I think he's going to take it."

Heckman has a point that SI has seen better days. Like the rest of print publishing, it's fought for relevance in the digital era.

It also doesn't help that Sports Illustrated has to fight comparisons with The Athletic, a heavily funded and fast-growing string of subscription sports sites. But there's no guarantee that company will hit its lofty goals, either.

Everything about this is so infuriating. "The Maven" is destroying Sports Illustrated to institute a clickbait, quantity-over-quality model that has repeatedly failed spectacularly. (See: SEC Country).

— Stewart Mandel (@slmandel) October 4, 2019

But the contributor model he's proposing -- which echoes one Levinsohn planned to try at The Los Angeles Times — is the product of a bygone era that publishers and advertisers have moved on from.

And Maven, precariously, relies on online advertising for the vast majority of its revenue and has yet to become sustainable, according to a recent SEC filing.

Will a news site be next?

With TheStreet and Sports Illustrated under his belt, Heckman isn't done. He's now on the hunt for a news site to round out the offering.

"You know, if you're an ad agency or consumer, I think those are national pillars of journalism. And so, we want to make sure that we control the quality and get behind some brands. So we're looking for a news brand," he said.

But Heckman's more recent sources of money have been unconventional. He's funded Maven's acquisitions — which included Say Media, TheStreet for $16 million, and a $45 million payment to ABG — with massive amounts of debt financing, a type of funding that typically comes at a high cost, by a subsidiary of a firm that's little-known in media circles, B Riley Financial.

Before Scout went bankrupt, Heckman's board forced him out in 2016, accusing him of using company money for his personal use, and Heckman talked of "Russian investors" that brought down the company.

According to Heckman, Scout itself was actually doing just fine; it was Bob Pittman's North American Membership Group which joined with Scout to buy it back from Fox that was failing, leading to money and a messy situation with the Russians. 

"Now with Trump, people know better," Heckman said of the decision to take that money. "This was when Russians were buying things like crazy. It was easy money. It came in fast. It was a terrible thing. It was the worst thing that happened to me."

With doors closing rapidly for media deals in general, the question is: will backers keep buying Heckman's vision?

SEE ALSO: 'We're an anomaly': Complex Networks ignored the digital-media playbook, and now it's set to have another profitable year, with at least $200 million in revenue

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NOW WATCH: This Facebook exec cofounded and then got fired from Here's why she is no longer hiding from this failure.

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Esports, Comic-Con, and momfluencers: How the US Army is revamping its multi-billion-dollar marketing plan

Sat, 10/12/2019 - 12:00

  • The US Army has struggled to recruit new soldiers and prove the value of its $400 million annual advertising budget in recent years.
  • Its new marketing leaders told Business Insider they would shift toward digital, data-driven marketing and away from linear TV to target the elusive Gen Z. 
  • The pitch deck that ad holding company giant Omnicom used to win the Army account includes Facebook ads targeting high-schoolers, soldiers' moms as influencers, and campaigns highlighting potential jobs for Army vets at tech companies like Google, Facebook, and LinkedIn.
  • Future recruiting efforts will also focus on events like Comic-Con and Pax, because officials said gamers "make good soldiers."
  • Visit Business Insider's homepage for more stories.

The US Army isn't just any advertiser.

While membership in the military has dropped significantly since the 1970s, the largest wing of the American armed forces spends around $400 million dollars annually on marketing to recruit and retain soldiers, according to Department of Defense estimates.

The Army failed to meet its recruitment target in 2018 for the first time in more than a decade and hit more modest goals for 2019 by focusing on student loan debt.

Through interviews with top Army officials and a pitch deck that reveals how holding company giant Omnicom won the Army's ad business, Business Insider offers an exclusive look inside the military's plan to reverse those trends by shaking up its marketing strategy.

Most young Americans don't think the Army is relevant to their lives: The military can't get Gen Z to enlist. Here's how top Army marketers plan to fix the problem.

The Army's new heads of marketing said they planned to move away from big-budget, broad-reach TV ads focused on defending the US in combat and focus on episodic content on platforms like Instagram and Snapchat that courts people by highlighting potential jobs in high-tech fields like drones and cybersecurity.

The Army slashed and restructured its marketing division in an attempt to spend money more effectively: An audit found the US Army wasted $36 million on marketing in one year. Here's how its new leaders plan to ensure a return on taxpayers' money.

After Congress withheld half of its ad budget due to an audit that revealed millions in spending that didn't deliver results, the Army dissolved its marketing division, relocated to Chicago, and revamped its approaches to data and events. Officials told Business Insider they planned to emphasize conferences like Comic-Con and esports festival Pax, saying gamers and programmers "make good soldiers."

The winning pitch promised to move millions in spending to the places where young people live: This pitch deck reveals how ad giant Omnicom won the US Army's $4 billion marketing business. Its first ads are about to hit digital and social media.

An extensive deck that the world's second-largest ad holding company used to win the Army account provided more evidence of the military's plans to reach young people by targeting Facebook ads to high-schoolers, running sponsored content on platforms like Reddit, BuzzFeed, and Twitch, and casting soldiers' moms as influencers.

It also listed buzzy brands like Tesla and Amazon as partners and suggested that soldiers could get jobs at companies like Google, Facebook, and LinkedIn after they leave the military.

Join the conversation about this story »

NOW WATCH: This Facebook exec cofounded and then got fired from Here's why she is no longer hiding from this failure.

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The WeWork fiasco is making employees wonder if their shares have been set on fire. We talked to experts who said most tech startup workers are in the dark about how much their equity is worth.

Sat, 10/12/2019 - 12:00

  • WeWork has indefinitely postponed its IPO, and according to media reports may run out of cash by next month.
  • If the company still eventually goes public, but at a lower valuation than previously expected, it will pay back its preferred shareholders first, leaving close to nothing for employees.
  • In the event of a bankruptcy and liquidation, employees also get paid last.
  • Employees at other tech startups may be starting to question their decisions.
  • Click here for more BI Prime stories.

"It's great to be part of a high-flying company. Until it's not."

That's according to venture capitalist Greg Robinson. As managing director at 4490 Ventures in Wisconsin, Robinson has seen too many ambitious professionals join fledgling tech startups, dazzled by the prospect of making it big when the company eventually goes public or gets acquired at a billion-dollar-plus valuation.

Many startup employees, especially early hires, are given equity grants to compensate for relatively low salaries. In a liquidation event (like an IPO or an acquisition), those employees have the chance to exercise their options, snagging a piece of that billion-dollar price.

Read more: The first-time founder's ultimate guide to understanding stock options

Unfortunately, it doesn't always work out that way.

Even startups that promise — and seem well-positioned — to become the next Google or Amazon may find their potential was overhyped, after all. And rank-and-file employees, who may have spent years building the business from scratch when they could have been raking it in at a more established organization, can be left in the dust.

WeWork is a prime example of this scenario.

To give a brief rundown of the company's financial situation: In August 2019, WeWork publicly filed paperwork detailing its intent to go public. The company had raised $12.8 billion and was valued at $47 billion by Softbank, its largest shareholder.

But in September, Softbank pushed the company to table the IPO, and WeWork was considering going public at a mere $10 billion valuation, according to media reports. By mid-September, media reports said it had delayed its IPO until at least October.

Meanwhile, cofounder and CEO Adam Neumann was ousted, replaced by two co-CEOs, who began selling off some of WeWork's assets and shelved the IPO indefinitely. By October, Bloomberg reported that WeWork was discussing a $5 billion credit line with lenders led by JPMorgan. Otherwise, the company could run out of cash by November.

For WeWork employees who hold equity in the company, the situation is looking increasingly dire. Business Insider reached out to We for comment and did not hear back by Friday evening.

Preferred shareholders get their money out first — and there may not be anything left for employees

Say WeWork does eventually IPO at a valuation of $10 billion. That's less than the amount of capital that the company has raised, and the first thing WeWork would have to do is pay back its preferred shareholders.

"Preferred shares" is a broad term that simply means shareholders have a different set of rights than common shareholders, which typically include founders and other employees. The vast majority of venture deals involve preferred shares.

Read more: The first-time founder's ultimate guide to navigating a term sheet and avoiding common pitfalls — with a sample from a major VC

Late-stage investors (like investors in a Series D or E round) often request preferred shares as a form of protection in a downside scenario. For example, if the company goes public at a lower valuation than expected, preferred investors will get their money out first.

One common way investors protect themselves in a downside scenario is by using a ratchet mechanism. If the company goes public at a valuation lower than the agreed-upon valuation, the company must issue their preferred shareholders additional shares so those investors don't lose money.

Ratchet mechanisms have become increasingly common in venture deals. According to the law firm Fenwick and West LLP, the rate of technology IPOs that triggered ratchet mechanisms increased from 4% in 2014 to 50% in 2015. (The sample size was 14 companies in 2015 and 27 companies in 2014.)

This increase is likely a result of companies waiting longer to go public, and raising huge amounts of capital in the meantime, Robinson said. It's a way for those companies to "sweeten the deal" for investors, he added. In order to hit a unicorn (or billion-dollar) valuation, which is often viewed as a proxy for a company's success, the company agrees to let investors get their money out first.

Ratcheting is especially common among companies with an unproven business model that are burning through cash quickly, said Steve Sutter, chief financial officer at the software company Egnyte.

According to WeWork's S-1 filing, WeWork's parent company, We, posted a loss of $690 million on $1.5 billion in revenue in the first six months of 2019.

WeWork had a partial ratchet mechanism in its deal with Softbank, its S-1 shows (on page F-115). In fact, in a blog post, the IPO research firm Renaissance Capital projected that if WeWork went public at a market cap of less than $14.5 billion after an IPO, that could result in the world's largest IPO ratchet. Softbank shareholders would be issued more than $400 million worth of additional shares.

In the event of a bankruptcy and liquidation, employees with equity would get paid last

In the event of bankruptcy and liquidation (meaning the business cannot be reorganized and must sell its assets to pay back creditors), employee equity gets paid last.

According to Adam Augusiak-Boro, a senior research associate at secondary-market platform EquityZen, bankruptcy professionals like lawyers, bankers, and consultants typically get paid first. Creditors get paid next, followed by preferred equity holders, and then common.

"In a true liquidation," Augusiak-Boro wrote in an email to Business Insider, "I would imagine the equity gets $0, as all of the creditors will likely eat up all the value of the business." That said, he added, there are many ways to restructure a business that don't involve bankruptcy or liquidation.

Read more: Founders and investors whose startups died reveal the traps that killed their companies — and what you can do to avoid them

For example, Augusiak-Boro said, "WeWork can sell off assets that are non-performing or may not make sense for WeWork's business, and then use those proceeds to pay down debt or fund growth." The result might be a glimmer of hope for employees.

Augusiak-Boro added, "If the asset sales are successful — meaning unproductive assets are converted into cash for either delivering the balance sheet or funding growth of WeWork — the equity value may increase."

Even savvy employees might not know what to ask about their equity grants

The real problem with preferred shares, according to Robinson, is that "these deals are not always communicated perfectly" to everyone in the company — namely, employees.

Generally speaking, Sutter said, investors have more access to financial information about the company than its employees do. And while most employees at tech startups aren't naive, Sutter said, "people get caught up in the emotion of an exciting new technology or business and don't necessarily ask the right questions."

Read more: The first-time founder's ultimate guide to hiring top talent, from a Greylock partner, a former Googler, and a consultant to Spotify and JPMorgan

Robinson agreed. Private money can be hard for rank-and-file employees — even savvy employees — to understand, he said. Specifically, they might not know the order in which money is paid in a downside scenario.

When employees hear that the business is now worth half of its previous valuation, for example, they might be "distraught," Robinson said, because they assume that the value of their equity is cut in half, too. What employees might not know is that all of the money the company raised goes back to preferred investors — potentially leaving employees with nothing. "That fuels a notion of, 'I got screwed,'" Robinson said.

Still, employees at WeWork — or at any other high-profile tech startup — may get some money if the company goes public at a relatively low valuation.

According to Augusiak-Boro, the earliest hires have the lowest strike price (the price at which they can exercise their options), so their shares may still be worth something. And after the company goes public, employees may choose to hold onto their shares, in the event that the stock price increases.

Founders should be able to prove to job candidates that their business model is sustainable

In the wake of WeWork's downward spiral (plus other recent tech IPO disappointments including Peloton, Uber, Lyft, and Slack), Robinson anticipates that current employees at tech startups are going to think more carefully about where they're working.

These people are going to start wondering, Robinson said: What's similar between my company and WeWork? What does it mean to raise a lot of money and have a high valuation? Does it reflect the company's potential?

For aspiring tech startup employees, the takeaway is simple.

"Buyer beware," Sutter said. Too often, Sutter added, employees think the company founders and management are smarter than they are.

But if they can't prove to you that their business model is sustainable — specifically, that this company is going to make money — it could be a red flag. "If they can't break the business model into some pretty simple axioms," Sutter said, "you potentially have a problem. It shouldn't be that complicated."

SEE ALSO: Investors and founders reveal how to know if venture capital is the best way to fund your startup, and what paths to take if it clearly isn't

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Categories: English

IoT 101: Your Essential Guide to the Internet of Things

Sat, 10/12/2019 - 11:05

You’ve likely heard the phrase Internet of Things, or IoT, at some point if you have been following any tech news in the last several years.

But at the same time, you might be scratching your head figuring out what it is or what it means past a flashy buzzword.

Simply put, the IoT refers to the connection of devices (other than typical fare such as computers and smartphones) to the Internet. Cars, refrigerators, juicers, wine racks, heart monitors, ovens, watches, and more are all candidates for connection.

A new report from Business Insider Intelligence, Business Insider's premium research service, called IoT 101: The Essential Guide to the Internet of Things, outlines the basics of the IoT and what this next wave of technology means to the everyday individual.

The report dives into key IoT terms, predictions and trends for the IoT in the next five years, the industries that the IoT will affect the most, and the biggest challenges facing the IoT.

To get your copy of this exclusive report absolutely FREE, simply click here.


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Categories: English

Elizabeth Warren expressed her ire over Facebook running fake ads for Trump — by running a fake ad

Sat, 10/12/2019 - 05:26

  • 2020 presidential candidate Elizabeth Warren ran a fake advertisement on Facebook claiming that CEO Mark Zuckerberg endorsed Trump's re-election, taking a jab at the social media platform for allowing the same for President Donald Trump.
  • Networks like CNN and NBCUniversal have refused to run ads for Trump with "demonstrably false" claims about former Vice President Joe Biden, but Facebook did.
  • The ads began circulating starting Thursday, CNN reported, and it has already been displayed on tens of thousands of newsfeeds nationwide.
  • Facebook spokesman Andy Stone issued a statement Friday in response to Warren's ad, saying that the social media platform seeks to protect free speech.
  • Visit Business Insider's homepage for more stories.

2020 candidate Elizabeth Warren has expressed her ire for big tech companies in the past, most recently amid reports that Facebook allows President Donald Trump to lie in ads. So how does she fight them?

By telling a lie, of course.

Her campaign posted a fake advertisement on the social media platform claiming that Facebook CEO Mark Zuckerberg endorsed Trump's re-election. But she didn't run the ad without a disclaimer.

"You're probably shocked," the ad read. "And you might be thinking, 'how could this possibly be true?'"

"Well, it's not. (Sorry.)"

Warren's advertisement goes on to chastise Facebook for running false advertisements for Trump, while most television networks have denied to run the same advertisements. Networks like CNN and NBCUniversal have refused to run ads for Donald Trump with "demonstrably false" claims about former Vice President Joe Biden. 

Why did Facebook let the Trump campaign run an ad with an obvious lie about Biden, one that's been debunked by independent fact-checkers?

Not only is Facebook allowing propaganda and dangerous misinformation, it's actually profiting from it.

— Ryan McCarthy (@mccarthyryanj) October 3, 2019


Read more: Facebook confirms Donald Trump can lie in ads, but he can't curse

"If Trump tries to lie in a TV ad, most networks will refuse to air it," the ad stated. "But Facebook just cashes Trump's checks."

The ads began circulating starting Thursday, CNN reported, and it has already been displayed on tens of thousands of newsfeeds nationwide. Facebook spokesman Andy Stone issued a statement Friday in response to Warren's ad, saying that the social media platform seeks to protect free speech.

"If Senator Warren wants to say things she knows to be untrue, we believe Facebook should not be in the position of censoring that speech," Stone said.

Elizabeth Warren is now running FB ads with a false statement about Mark Zuckerberg and FB endorsing Trump for president, to draw attention to FB's controversial policy allowing politicians to make false statements in ads.

— Julia Carrie Wong (@juliacarriew) October 11, 2019


SEE ALSO: Trump confirmed he met with Facebook CEO Mark Zuckerberg in a weirdly lukewarm tweet

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NOW WATCH: 7 secrets about Washington, DC landmarks you probably didn't know

Categories: English

The Trade Desk wants the ad-tech industry to back its plan to save targeted ads, but its growing clout and competitors could stop it in its tracks

Sat, 10/12/2019 - 05:00

  • Ad-tech giant The Trade Desk has been pitching a free product that helps marketers store consumers' privacy and targeting preferences across devices.
  • The company said it has more than 20 demand-side platforms, 30 supply-side platforms and 30 data-management platforms using or testing the product.
  • But competitors including LiveRamp, Digitrust and Advertising ID Consortium are developing similar products, and some agencies say that it's unclear if The Trade Desk will play fair with the other companies.
  • Click here for more BI Prime stories.

As privacy laws like the California Consumer Privacy Act get close to rolling out next year, advertisers are getting increasingly worried that it'll get harder for them to keep using cookies to target ads to people.

Laws like Europe's GDPR and the upcoming CCPA put more pressure on advertisers to explicitly show how they're using people's data to target them with ads. In response, Internet giants like Apple, Google, and Mozilla are making changes to their browsers, causing ad-tech firms to rework how they target ads.

At the same time, ad-tech companies are looking to cut the huge costs of syncing billions of audience profiles in real-time each time an ad is loaded on a website. Problems with cookie syncing causes ads to load slowly on websites and affects the accuracy of targeting.

In theory, a standard ID can solve for these problems. An ID is a set of numbers used for ad targeting that is anonymously tied to a person's online behavior.

A handful of firms including The Trade Desk, LiveRamp, Digitrust and the Advertising ID Consortium are racing to create their own ID products and sign on ad-tech companies, publishers and advertisers.

Read more: How The Trade Desk's Jeff Green became ad-tech's most loved CEO and one of Google's biggest critics, and how he plans to save targeted advertising

One of the biggest ad-tech firms, The Trade Desk, has spent the past year pitching advertisers, publishers and ad-tech companies on a free product called Unified ID that stores consumers' targeting and privacy preferences across devices.

Jeff Green, CEO and chairman of The Trade Desk, said the ID can address privacy concerns while cutting down on the problem of people seeing the same ad over and over.

The company says that more than 20 demand-side platforms, 30 supply-side platforms and 30 data-management platforms are using or testing the product.

"Our ID footprint is bigger than anybody else who is willing to give it away," Green said.

Is The Trade Desk becoming too powerful?

The Trade Desk's size has given it the ability to push marketers to use its own platform. Agencies and ad-tech companies wonder if any one ID can cover enough consumers to pull off big targeting tactics that advertisers need, though.

One agency exec said that it's hard to pull out data from IDs that's used in ad targeting, like anonymized phone numbers, email addresses, and device information. The person also said that it's unclear how much all the companies offering IDs will share data with each other.

There's also concern that The Trade Desk will eventually charge for its ID or refuse to do business with companies that don't use it.

"If the open internet is the North Star, then there can't be any threat of cutting off other companies," said Jay Friedman, the president of the programmatic ad agency Goodway Group. "It probably can't be a profit center."

A second agency source said that The Trade Desk's ID product would be dependent on data that The Trade Desk doesn't have access to, like information from supply-side platforms (or SSPs) and rival firms. 

The source added that The Trade Desk would struggle to compete with walled gardens like Google and Amazon that already have loads of first-party data on how ads are bought, sold and measured. 

"You're always going to need to play ball with Google to some degree," the source said.

Join the conversation about this story »

NOW WATCH: Burger King's CMO explains why the biggest risk in marketing is not taking one

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Blizzard says its ‘relationships in China had no influence on our decision’ to punish an esports athlete who voiced his support for Hong Kong protestors

Sat, 10/12/2019 - 02:05

  • Blizzard CEO J. Allen Brack has issued the company's first public statement since its decision to ban an esports competitor and withhold his prize money for making statements supporting the protests in Hong Kong at a Blizzard-sponsored event.
  • The company has been accused of prioritizing its relationships with China rather than protecting the right to free speech, which Brack denied: "I want to be clear: our relationships in China had no influence on our decision."
  • Brack said the company's relationships in China were not a factor in the decision to punish Blitzchung, but the initial punishment may have been too harsh.
  • Brack shortened Blitzchung's one-year suspension down to six months, and said it would be giving a suspension of the same length for the two commentators who conducted the interview. Brack also said Blitzchung "should receive his prizing" from the tournament, which would be several thousand dollars.
  • However, it said Blitzchung and the two broadcasters should have kept the focus of the interview on the event, and that it stood by the decision to take action.
  • Visit Business Insider's homepage for more stories.

Blizzard Entertainment President J.Allen Brack has issued the company's first public statement since making the decision to punish Chung Ng Wai, better known as Blitzchung — a "Hearthstone" esports competitor who spoke out in favor of the protests in Hong Kong.

Brack's statement pushed back against the accusation that Blizzard made the decision to punish Blitzchung in order to protect its business interests in China.

"The specific views expressed by blitzchung were NOT a factor in the decision we made. I want to be clear: our relationships in China had no influence on our decision," the statement reads.

Blitzchung wore a gas mask and called for the liberation of Hong Kong during a post-match interview on October 5. Blizzard responded by banning him from competition for one year, and saying that it would no longer work with the two commentators who conducted the interview. It also said at the time it would withhold several thousand dollars in prize money from Blitzchung.

Now, Brack said that Blitzchung and the two commentators conducting the interview had indeed broken the rules of the competition by not keeping the focus on the game. Ultimately, Brack wrote, Blitzchung had been punished not for his specific views, but rather for distracting away from the tournament by raising a political issue.

However, Brack said, the intial punishment may have been too harsh, and cut the one-year suspension to a six-month span. It also said that the two commentators would be given the same-length suspension, apparently rather than cutting ties entirely. 

"There is a consequence for taking the conversation away from the purpose of the event and disrupting or derailing the broadcast," Brack's statement reads. "With regard to the casters, remember their purpose is to keep the event focused on the tournament. That didn't happen here, and we are setting their suspension to six months as well."

Brack also said blitzchung "should receive his prizing" but did not specify how much or when it would be paid out.

Critics, including Democratic Sen. Ron Wyden of Oregon and Republican Sen. Marco Rubio, claimed earlier this week that Blizzard's punishment was an act of censorship designed to protect the company's interests in China. 

Over the course of the four days after the original event, a group of about 30 Blizzard employees staged a walkout at the company's California studio, a pair of "Heartstone" commentators resigned from participating in the finals broadcast, and dozens of players took to social media to share pictures of themselves deleting their Blizzard accounts and canceling their World of Warcraft subscriptions under the hashtag "#BoycottBlizzard."

It remains to be seen whether Brack's new statement will quell the fires, or just stoke further protest. 

You can read Blizzard CEO J. Allen Brack's full statement below:

Hello Blizzard Community . . .

I want to take a few minutes to talk to all of you about the Hearthstone Grandmasters tournament this past weekend. On Monday, we made the decision to take action against a player named blitzchung and two shoutcasters after the player shared his views on what's happening in Hong Kong on our official broadcast channel.

At Blizzard, our vision is "to bring the world together through epic entertainment." And we have core values that apply here: Think Globally; Lead Responsibly; and importantly, Every Voice Matters, encouraging everybody to share their point of view. The actions that we took over the weekend are causing people to question if we are still committed to these values. We absolutely are and I will explain.

Our esports programs are an expression of our vision and our values. Esports exist to create opportunities for players from around the world, from different cultures, and from different backgrounds, to come together to compete and share their passion for gaming. It is extremely important to us to protect these channels and the purpose they serve: to bring the world together through epic entertainment, celebrate our players, and build diverse and inclusive communities.

As to how those values apply in this case:

First, our official esports tournament broadcast was used as a platform for a winner of this event to share his views with the world.

We interview competitors who are at the top of their craft to share how they feel. We want to experience that moment with them. Hearing their excitement is a powerful way to bring us together.

Over the weekend, blitzchung used his segment to make a statement about the situation in Hong Kong—in violation of rules he acknowledged and understood, and this is why we took action.

Every Voice Matters, and we strongly encourage everyone in our community to share their viewpoints in the many places available to express themselves. However, the official broadcast needs to be about the tournament and to be a place where all are welcome. In support of that, we want to keep the official channels focused on the game.

Second, what is the role of shoutcasters for these broadcasts?

We hire shoutcasters to amplify the excitement of the game. They elevate the watchability and help the esports viewing experience stay focused on the tournament and our amazing players.

Third, were our actions based on the content of the message?

Part of Thinking Globally, Leading Responsibly, and Every Voice Matters is recognizing that we have players and fans in almost every country in the world. Our goal is to help players connect in areas of commonality, like their passion for our games, and create a sense of shared community.

The specific views expressed by blitzchung were NOT a factor in the decision we made. I want to be clear: our relationships in China had no influence on our decision.

We have these rules to keep the focus on the game and on the tournament to the benefit of a global audience, and that was the only consideration in the actions we took.

If this had been the opposing viewpoint delivered in the same divisive and deliberate way, we would have felt and acted the same.

OK, what could Blizzard have done better, and where do we go from here?

Over the past few days, many players, casters, esports fans, and employees have expressed concerns about how we determined the penalties. We've had a chance to pause, to listen to our community, and to reflect on what we could have done better. In hindsight, our process wasn't adequate, and we reacted too quickly.

We want to ensure that we maintain a safe and inclusive environment for all our players, and that our rules and processes are clear. All of this is in service of another important Blizzard value—Play Nice; Play Fair.

In the tournament itself blitzchung *played* fair. We now believe he should receive his prizing. We understand that for some this is not about the prize, and perhaps for others it is disrespectful to even discuss it. That is not our intention.

But playing fair also includes appropriate pre-and post-match conduct, especially when a player accepts recognition for winning in a broadcast. When we think about the suspension, six months for blitzchung is more appropriate, after which time he can compete in the Hearthstone pro circuit again if he so chooses. There is a consequence for taking the conversation away from the purpose of the event and disrupting or derailing the broadcast.

With regard to the casters, remember their purpose is to keep the event focused on the tournament. That didn't happen here, and we are setting their suspension to six months as well.

Moving forward, we will continue to apply tournament rules to ensure our official broadcasts remain focused on the game and are not a platform for divisive social or political views.

One of our goals at Blizzard is to make sure that every player, everywhere in the world, regardless of political views, religious beliefs, race, gender, or any other consideration always feels safe and welcome both competing in and playing our games.

At Blizzard, we are always listening and finding ways to improve—it is part of our culture. Thank you for your patience with us as we continue to learn.


J. Allen Brack
President of Blizzard Entertainment

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NOW WATCH: How Area 51 became the center of alien conspiracy theories

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T-Mobile is outpacing the rest of the Big Four US carriers on value, loyalty, and satisfaction — here's what consumers say is most important when selecting a mobile provider (TMUS, S, VZ, T)

Sat, 10/12/2019 - 02:01

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. This report is exclusively available to enterprise subscribers. To learn more about getting access to this report, email Senior Account Executive Jeff Jordan at, or check to see if your company already has access.

Although competition in the US wireless carrier market remains fierce, the price war among the Big Four US carriers — Verizon, AT&T, T-Mobile, and Sprint — began to cool over the past year.

In an attempt to avoid further competition on price, carriers began shifting their focus to adding value to their mobile plans with new offerings to differentiate from the competition. This helped average revenue per user (ARPU) start to stabilize across all carriers in Q1 2018, after declining over the last two years.

The Big Four have now begun reshuffling their unlimited plans to lure subscribers by providing more options. This strategy has been unrolling in two flavors: introducing new, expensive unlimited plan tiers loaded with an array of features and choices, while also catering to price-sensitive customers with more affordable plans that strip away extra perks like free digital content and international coverage. As a result, a new battleground is emerging, with differentiation now coming down to the value loaded in their mobile plans.

Looking forward, the US carrier market will see competitive pressure pick up due to a number of trends: 

  • The US smartphone market is creeping toward saturation. Penetration in the US hit 85% in 2018, up from 82% in 2017 and 77% in 2016.
  • eSIM technology is making it easier for consumers to switch carriers. eSIM technology is a nonphysical SIM card slot that pairs with the physical SIM card to enable dual-SIM functionality — allowing customers to switch carriers without changing to a different SIM card or device.
  • And cable mobile virtual network operators (MVNOs) are edging in on US carriers' share of wireless adds. Cable MVNOs, such as Comcast's Xfinity Mobile and Charter's Spectrum Mobile, are expected to snag roughly 50% of total wireless customer net adds, or about 2.2 million subscribers, by 2020.

All of this means fostering loyalty and winning over new subscribers is more important than ever for the Big Four, making it crucial for these mobile carriers to understand consumer sentiment around their services.

In this report, Business Insider Intelligence uses consumer survey data from our proprietary panel, collected during 2017 and 2018, to evaluate which features are most important to consumers when selecting a mobile provider, as well as to determine which features would convince them to switch to the competition. It contains insights that can help telecoms guide strategic investment and marketing decisions to win and retain customers in this increasingly competitive space.

The companies mentioned in the report are: AT&T, Amazon, Apple, Charter, Comcast, Hulu, Netflix, Pandora, Sprint, T-Mobile, Tidal, and Verizon.

Here are some key takeaways from the report:

  • T-Mobile came out on top again, outpacing the rest of the Big Four US carriers on value, loyalty, and satisfaction. T-Mobile customers want to see coverage improvements, though. 
  • Verizon customers don't see much more value in its offerings than a year ago.
  • AT&T was the only carrier to show declines in all capacities. 
  • Sprint is still a good deal, but it doesn't offer much else.
  • When it comes to features, subscribers still value the basics most. However, demand for international coverage is growing.
  • 5G is the next major battleground for the Big Four, and the winner of the 5G race has the potential to leap ahead in customer volumes. 

 In full, the report:

  • Determines the features that are most important to consumers when selecting a mobile provider.  
  • Identifies which features are nice to have or essential in consumers' willingness to switch carriers. 
  • Examines consumers' feelings on emerging technologies and trends in the mobile industry, such as 5G, new network-connected devices, and the T-Mobile-Sprint merger.
Online Form - Telecom Edge Report Info Request Powered by Formstack


SEE ALSO: 5G in the IoT: How the next generation of wireless technology will transform the IoT

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Categories: English

AI IN TELECOMMUNICATIONS: Why carriers could lose out if they don't adopt AI fast — and where they can make the biggest gains

Sat, 10/12/2019 - 01:02

In the face of rising demand for data, increasingly saturated mobile markets, and stiff opposition from legacy players, tech entrants, and startups, global telecoms are locked in a battle for market share. These market pressures have led to vicious price wars for mobile services and, as a result, declining average revenue per user (ARPU).

Making matters worse, improvements in infrastructure and technology have made telecoms largely comparable in terms of coverage, connection speeds, and service pricing, meaning companies must transform their businesses if they hope to compete.

For many global telecoms, shoring up market share under today's pressures while also future-proofing operations means having to invest in AI. The telecom industry is expected to invest $36.7 billion annually in AI software, hardware, and services by 2025, according to Tractica.

Through its ability to parse large data sets in a contextual manner, provide requested information or analysis, and trigger actions, AI can help telecoms cut costs and streamline by digitizing their operations. In practice, this means leveraging the increasingly vast gold mine of data generated by customers that passes through wireless networks — the amount of data that moves through AT&T's wireless network has increased 470,000% since 2007, for example. 

In the AI in Telecommunications report, Business Insider Intelligence will focus on the use of AI to enhance the customer experience, which can directly impact revenue. Each year, an estimated $62 billion is lost by US businesses after inferior customer experiences, according to NewVoiceMedia. We will discuss the forces driving firms to AI, pinpoint some of the top use cases of AI along the customer journey, and identify some of the leading companies in the space

The companies mentioned in this report are: AT&T, CenturyLink, China Mobile, IBM, Spectrum, Sprint, Swisscom, Telia, T-Mobile, and Vodafone.

Here are some of the key takeaways from the report:

  • Telecoms have long struggled with their customer experience image: In 2018, telecommunications had the lowest average Net Promoter Score (NPS), a measure of how favorably a company is viewed by customers, of any industry.
  • Companies that use advanced analytics, which can be accessed via AI, to improve this image and the overall customer experience are seeing revenue gains and cost reductions within a few years of adoption. 
  • Most (57%) executives believe that AI will transform their companies within three years, per Deloitte's State of AI in Enterprise. 
  • Overall, telecoms should focus on a hybrid organizational model to move beyond pilots to launch full-scale AI solutions that can have the biggest impact on their companies.

In full, the report:

  • Outlines what factors are leading telecoms to turn to AI technology. 
  • Describes the benefits of using AI in telecommunications. 
  • Highlights players that have successfully implemented AI solutions.
  • Discusses how telecoms should move forward with AI projects. 

Interested in getting the full report? Here are three ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
  3. Current subscribers can read the report here.

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Lambda School is Silicon Valley's big bet on reinventing education and making student debt obsolete. But students say it's a 'cult' and they would have been better off learning on their own.

Sat, 10/12/2019 - 00:32

  • Some of Silicon Valley's best and brightest believe that Lambda School is a new model for vocational education that could make student debt obsolete. 
  • The big innovation: Rather than paying up-front for tuition to its 9-month coding bootcamp program, Lambda School asks most students to sign income sharing agreements — where they pay a portion of their salary for the first two years after getting a job that pays $50,000 or more.
  • However, we spoke to former and current Lambda School student, who say that it falls short of that promise, with under-qualified instructors and an incomplete curriculum that requires them to rely on self-teaching and outside resources to complete the program. 
  • Those students say that the program is like a "cult," where they worry about criticizing Lambda School for fear of getting kicked out, and where they're encouraged by staff — including CEO Austen Allred — to respond to critical social media posts with positive testimonials. 
  • The Lambda School students say that when they voice concerns about the program or complain of harassment from fellow students, they get brushed off, ignored, or made to feel they were the problem.
  • Lambda School is a graduate of the famed Y Combinator startup accelerator program, and has attracted $48 million in venture capital from investors including GV (formerly Google Ventures), Stripe, and even Ashton Kutcher.
  • "While we can't respond to specific inquiries out of respect for privacy, we appreciate the concerns of any and all of our students. We are continuously aiming to be transparent on where we need improvement and the steps we are taking to address them," CEO Austen Allred said in a statement.
  • Click here for more BI Prime stories.

Erica Thompson has always had an interest in technology. Her father, a municipal transit operator, taught her the basics of programming, which she practiced while he built computers in his free time.  

She initially studied music education, but after her father had a heart attack, she decided that it might be time to pursue a career in programming. She had just wrapped up a software development course at a local college in Los Angeles when she saw a Facebook ad for Lambda School — an online coding bootcamp that requires no upfront tuition.

She decided to take a chance to hone her skills and make herself more competitive in the job market, without paying out of pocket. 

It's that very sales pitch that's driven Lambda School, based in San Francisco, to a position of prominence in Silicon Valley. A graduate of the famed Y Combinator startup incubator program (previous graduates include Airbnb and Dropbox), it's gone on to raise over $48 million from investors like GV (formerly Google Ventures), Stripe, and even Ashton Kutcher. The school boasts that there are nearly 3,000 students currently enrolled. 

What makes it unique from other coding schools is its income sharing agreement (ISA) model. Students sign a contract, agreeing to pay 17% of their income for two years when they get a job paying at least $50,000 a year, with a maximum payout of $30,000. It also offers a less-popular choice to pay a flat $20,000 in tuition, instead. 

To many, Lambda School represents a better way of thinking about higher education and vocational training, as Wired put it in an August headline: "Lambda School's For-Profit Plan to Solve Student Debt." And because students attend Lambda School remotely for eight hours a day, it's theoretically open to anybody, anywhere. The model has proven so appealing, other startups are following suit with their own ISA-based business models

Lambda School boasts of its successes, saying that graduates of the 9-month program go on to work for companies like Amazon, Google, or Microsoft. According to the Council on Integrity in Results Reporting, 60.9% of Lambda School students were employed 90 days after graduation, going up to 85.9% within 180 days. Graduates earn a median annual base salary of $60,000, according to that same study — although a Lambda School spokesperson puts that figure at $70,000, and notes that many graduates are in rural areas where average pay is lower.

What Thompson found, however, was that Lambda School was very different than what she hoped it would be. She says that she was brushed off by staff when she reported racist harassment from two of her classmates.

Not long after, Thompson says she was told that she was in danger of being removed from the program if she didn't hit certain goals. She says that she ultimately was kicked out of Lambda School, towards the end of the program, just days after raising her concerns directly with CEO and cofounder Austen Allred. 

"It seems that if anyone speaks up and is too critical of the program in any of the channels, they react as if the student is the problem, though they mandate feedback daily," Thompson told Business Insider. 

This is indicative of the general atmosphere at Lambda School, according to 5 former and current students, most of whom asked for anonymity for the sake of their careers. We also spoke to applicants and other people familiar with the Lambda School program.  

They say that while Lambda School pitches itself as a first step towards better job opportunities, the reality can be more underwhelming: The curriculum is lacking, the instructors are often under-qualified, and students are afraid to speak out in a culture described as being akin to a "cult," they say. 

"Lambda School is not worth the life it takes from you, and it's not worth the dollar amount you agree to pay them back," a former student said.

Lambda School did not make Allred available for an interview. In a statement, Allred said:

"While we can't respond to specific inquiries out of respect for privacy, we appreciate the concerns of any and all of our students. We are continuously aiming to be transparent on where we need improvement and the steps we are taking to address them."

"We adopted the ISA model to open up access to students from all walks of life and are constantly iterating on our curriculum and processes based on their unique experiences and feedback. At the same time, we're working to streamline those same feedback loops to make them as effective as possible. There's always room to improve, and we welcome any additional feedback on how we can continue to raise the bar."

'Trust the process'

Allred is known to many in Silicon Valley as a charismatic leader with a compelling personal background. He moved to San Francisco from Utah to break into the tech industry, and says he first lived in a car while his career got off the ground.

He's said that he decided to start Lambda School under the ISA model after being "taken aback" when speaking with someone who couldn't afford the $10,000 to attend a coding bootcamp. The goal, Allred has said, is to increase the economic opportunity for anybody, anywhere, who wants to build their own lucrative career in tech.

However, Lambda School students say that in reality, the program feels like a "cult" that attracts people down on their luck or otherwise in tough financial situations, and then locks them into an intensive program that ultimately leaves them on the hook to pay back thousands of dollars in their future wages.

"Lambda School is literally a cult," a former student said. "Cults are hard to leave. Cults play on your emotional vulnerability. Cults keep you mentally and physically exhausted so you can be more compliant…They're specifically targeting people who are vulnerable in hard-life situations."

To that point, 5 current and former Lambda School students tell Business Insider that they feel that they can't criticize or critique the program. 

A recent blog post from Allred highlights Lambda School's process for gathering feedback, where students are given constant opportunity to submit their thoughts, both directly to instructors and anonymously. 

However, the students say they don't feel comfortable airing any grievances: They're not only concerned about getting kicked out of the program, but also that they may end up blacklisted by companies like Nexient that are known to hire Lambda School graduates. 

Often, when students do bring up concerns about the school, they're just told to "trust the process," two sources say.

"It almost feels like gaslighting," a student said. "A lot of students have brought up similar concerns, and they're continually disregarded. There's a mantra they keep repeating: 'Trust the process of Lambda.'"

Troll defense

Allred, for his part, is known for personally responding to critics of Lambda School on social media. "People want to think that Lambda is a scam, because they want to believe the results we're producing are impossible," Allred recently told Wired.

It's common for students to spring to the school's defense, too. 

For example, when somebody posted to Twitter saying "Lambda School is trash," or when a Reddit user last year wrote a post saying "Is Lambda School really terrible?" users claiming to be Lambda School students chimed in with their thoughts. While those posts can sometimes contain critiques of the program, they're usually positive on Lambda School overall. 

"Your experience will vary based on who is your instructor and your PM, as with everything, some are better than others, but honestly, overall, I have had a really good experience, and I'm very happy with it," one commenter said.

However, these posts are at least sometimes made because Lambda School encourages students to defending the company's reputation in public, students say – with management, staff, and even classmates all known to encourage students to respond to any haters. 

A screenshot of Lambda School's main chatroom on Slack, shared with Business Insider, shows Allred himself thanking students for responding to a critical Twitter post. "Thanks guys for tweeting there, appreciate that," Allred wrote, as he shared a link to yet another Twitter post. 

'The curriculum is garbage'

The Lambda School students that Business Insider spoke with said that the actual curriculum has its problems, too. Expectations are unclear, they say, with constantly-shifting deadlines and classwork assignments that are themselves packed with software bugs. 

Some students say that to actually master the programming topics at hand, they had to use outside resources like Treehouse, Khan Academy or YouTube, because the Lambda School program itself wasn't sufficient. One former student goes so far as to say that it doesn't do enough to teach the fundamentals of computer science.

"Everyone knows the curriculum is garbage," another former student said. "They know it's not working. If you're keeping up, you either already had a foundation or you're self-teaching. The actual school is not effective at teaching. People are going outside to get what they need."

In general, many graduates who found jobs feel they would have been successful without Lambda School, though the school gets the credit for their success, two former students say.

Ultimately, some students say, they feel like they would have gotten the same or better education in coding with self-guided learning programs from places like Udemy or Khan Academy. 

"Lambda can do exactly the same as $10 course from Udemy," a former student said. "If you are able to get any resource on the Internet and spend the next few weeks actually reading through it and coding small projects, you're going to get a better experience than Lambda."

Students also give poor marks to the quality of teaching staff at Lambda School. Three current and former students complain that instructors are often themselves graduates of other coding bootcamps, with little real-world experience. One former student describes the instructors as "highly incompetent." 

Among the teaching staff is Ryan Allred, brother to CEO Austen Allred, who works at Lambda School as a data science instructor. However, his LinkedIn profile indicates that his experience in the tech industry consists of graduating from a web development bootcamp and working as an intern in the AI-related field of deep learning.

A Lambda School spokesperson defends his experience, and says he's "one of our higher rated instructors at the school." When Business Insider checked his LinkedIn profile after reaching out to Lambda School for comment, Ryan Allred's previous experience had changed from "Deep Learning Intern" to "Deep Learning Engineer."

Current and former students also say that Lambda School wouldn't be able to run without the labor of its team leads: students who are employed by the school to lead team meetings, fill out forms rating student performance, and conduct one-on-one meetings to review code. 


Former and current Lambda School students describe the program as "disorganized," with topics, projects, and even the length of the program itself seemingly changing at random. 

Starting in May, Lambda School extended the length of the program from 30 weeks to 9 months. A spokesperson says that existing students were given the option to either finish the program as scheduled, switch to the 9-month timeline, or else leave the program without triggering their ISA. No students stayed on the 30-week plan, the spokesperson said. 

However, three sources say that students weren't warned of the change at all and suddenly had their expected date of graduation extended by about a month with no warning. That presented a potential financial risk, the sources say, given that many simply don't have the time to work paying jobs while enrolled in the intensive program. 

This kind of disorganization appears to have led to at least one costly mistake for Lambda School: In August, Business Insider reported that Lambda School was facing a $75,000 fine for failing to obtain a key registration with educational authorities in the state of California, where it's headquartered.

At the time, Allred blamed Lambda School's former legal counsel for the decision not to apply for the registration in the first place. Failing to obtain that registration could endanger its ability to continue to operate, regulators told Business Insider. Currently, Lambda School's registration application is under review, authorities say. 

Read more: The hot Silicon Valley coding bootcamp Lambda School is paying a $75,000 fine for not registering properly with the state of California

Two people also say that the application process for Lambda School is confusing and inconsistent. Susan Money, from Michigan, said that she was unimpressed with the quality of a prerequisite screening class required to enter the program, and she never heard back from Lambda School after she completed it.

Another, Jacqueline Homan of Pennsylvania, who applied for the program hoping it would lift her out of poverty, said that she withdrew from that same class for medical reasons, and was told that she could re-enter at any time — but was bumped from Lambda School's Slack without notice in the interim period and couldn't raise Lambda School for help, even though she contacted the school to add her back.

Later, when Homan posted about her Lambda School experience on Quora, Allred responded, saying Homan's statements were false and that she was not accepted. Homan says she never received any rejection email.

"I basically got blown off," Homan told Business Insider. "If a program like that, that practically guaranteed job placement, if something like that isn't for someone like me, who the hell is it for?"

Diversity matters

Lambda School prides itself on a diverse student body. Because classes are held remotely, and because there's no upfront cost, it can accommodate students who might otherwise not have access to an education in programming.  However, current and former students say that they've been disappointed that Lambda School's teaching staff isn't diverse, in turn: most of the school's instructors are male or are not from underrepresented groups.

"Diversity is an important area of focus for the team," a Lambda School spokesperson said. "There's been little turnover on the instruction team, and the initial team was hired primarily on referrals from the founders' home state of Utah, not a very diverse state. As we've grown we've adopted a rigorous hiring process that has resulted in 5 of the last 7 instructor hires coming from underrepresented groups."

Still, students say, Lambda School can sometimes make for a learning environment that's uncomfortable for students from underrepresented groups, with staff doing little to intervene. Students recall instances of racist memes spreading through the Slack chatrooms, or when a white male student wore a Mexican sombrero to a presentation in front of the class.

On one occasion, a former student says, instructors started referring to each other as "Nazis." Lambda School says it was unaware of this incident and could not find a record of it on its internal Slack. 

"We take all forms of racism, sexism, and other discrimination very seriously," the spokesperson said. "Many students have been removed for violating our student code of conduct, which is primarily focused on ensuring a positive, safe learning environment for all students. We actively respond to inappropriate, unprofessional, and discriminatory content."

When students do report harassment, however, they're brushed off, ignored, or made to feel that they were the problem, students say. That was the case with Thompson, the student who says she was dismissed from the program after complaining of racist harassment. 

"They advertise the school as being for non-traditional students who may not be able to afford other routes into the industry, but those same students are also less likely to be able to get justice if something goes wrong," Thompson said. 

'You have to buy into it'

So, ultimately, is Lambda School worth it? That appears to be a matter of perspective. 

The $60,000 median base salary of Lambda School graduates, as reported by the Council on Integrity in Results Reporting, is slightly below the $65,000 median across all coding bootcamps according to Course Report, which studied programs such as Hackbright Academy, Hack Reactor, and Fullstack Academy. However, going with Lambda School's own figures of $70,000 makes for a more favorable comparison.

A Lambda School blog post says that it plans to share more data on graduate salaries and employment each quarter, starting early next year.

Furthermore, the income sharing agreement model doesn't necessarily mean that Lambda School is cheaper than its competitors in absolute terms. Both the $20,000 flat-rate tuition plan and the $30,000 cap on ISA repayments over the two-year period are well over the average bootcamp tuition of $13,584, also according to Course Report

To be sure, not all Lambda School students pay as much as $30,000. According to Lambda School's own math, if a student makes the minimum $50,000 annual salary that triggers the ISA, that student would be on the hook to pay $708.33 a month, totaling to nearly $17,000 at the end of the two-year repayment period.

A spokesperson points out that Lambda School's program is significantly longer than other programs of its like, and says that it includes more resources to help students get a job after graduation. The spokesperson said that the various coding education programs are very different, and it can "be like comparing apples and oranges." The spokesperson said that "we have always been open and upfront about the cost of our program but believe it is important to also be transparent about other school factors."

There still remains the question of cost, however, given that Lambda School's ISA means that students will be giving up a portion of their earnings after graduation for the two-year repayment period. 

"That is an affordability concern for students who are getting a job and will still have to make ends meet, pay for shelter, pay for food, and take care of medication and other life expenses," Joanna Darcus, staff attorney at the National Consumer Law Center, told Business Insider.

Still, despite these concerns, a former student says it's no surprise why so many of their fellow students and graduates jump to Lambda School's defense on social media and elsewhere. For them, Lambda School is a big, bold bet on their future success. That means that when things do go wrong, they may not want to admit it — even to themselves, the former student said. 

"If you're in Lambda School as a student, you have to buy into it," a former student said. "You told your friends and family and girlfriend and kids that you're going to become a software engineer. You don't want to look like a loser if you didn't make it. I think people put all their accountability on themselves for making it work when the school is failing them."

Got a tip? Contact this reporter via email at, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Deutsche Bank analysts say the arrival of Google Cloud CEO Thomas Kurian 'changed everything' in the fight with Amazon Web Services

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Categories: English

Read the pitch deck that Uber founder Garrett Camp created for the ride-hailing giant back in 2008 – before the company became the $120 billion giant it is today (UBER)

Sat, 10/12/2019 - 00:01

It's a big year for Uber.

The first name in ride-hailing had a ton of hype around it for the first half of 2019 thanks to its IPO. And though the $8 billion valuation fell well short of speculations of $100 billion, Uber is still one of the biggest names on the market today.

With such eye-popping numbers, it's difficult to remember a time when the 10-year-old company wasn't the juggernaut it is today. Uber currently has more than 2 million drivers ferrying passengers in more than 63 countries.

But back in August 2008, founder Garrett Camp was laying out his dream of a "next-generation car service" in a slideshow on his computer. Little did he know that dream would grow exponentially into a company that now handles grocery delivery, that has a rapidly growing on-demand food delivery segment in Uber Eats, and is developing a fleet of self-driving taxis.

As part of our coverage of the genesis of today's successful companies, BI Prime took a look at how Camp envisioned Uber (then UberCab) 10 years ago in his original pitch deck:

  • The core concept was largely the same: a fast and efficient on-demand car service that he described as the "NetJets of car services"
  • Uber originally wanted to screen its customers by only picking up members and banning hailing from the street
  • All of Uber's projected use cases, from airport pickup/dropoff to travel to and from restaurants, still hold up today

Some of what Camp laid out in the pitch deck no longer holds up, such as a few of Uber's projected eco-friendly benefits and the makeup of Uber's fleet of cars.

The rest of the deck outlines some key points such as:

  • Plans for surge pricing
  • The company's project valuation
  • Potential outcomes for the company, including a best-case scenario
  • Future optimizations
  • Marketing ideas
  • And more

BI Prime is publishing dozens of stories like this each and every day, chock full of exclusive content and industry analysis. Want to get started by reading the full pitch deck?

>> Download it now FREE

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Categories: English

The WNBA's inclusion in the world's most popular basketball video game will dramatically change the perception of women in sports

Fri, 10/11/2019 - 23:12

  • "NBA 2K20" added the WNBA to the franchise for the very first time.
  • In an interview with Business Insider, "NBA 2K" gameplay director Mike Wang said the creative team had been planning to add the WNBA to the game for several years, but needed time to complete the process.
  • The WNBA players have been scanned and motion-captured just like the men, and the game has been tweaked to meet the skill, style, and finesse of the women's game.
  • Increased representation for the WNBA and other female athletes in video games will only help to increase the popularity of women's sports in the long-term.
  • Visit Business Insider's homepage for more stories.

Last night, Elena Delle Donne and the Washington Mystics beat the Connecticut Mystics in the fifth and deciding game of the WNBA Finals, closing out the season in impressive fashion. After the game was done, I turned on my Xbox to play "NBA 2K20" so I could replay the same matchup in the WNBA Finals myself.

As simple as it sounds, this wasn't possible two months ago. This is the very first year that the WNBA has been included in "NBA 2K," and it has already done a great job helping me and countless others become more familiar with the league's players.

Playing games like "Madden" and "MVP Baseball" as a kid helped make me into a sports fan, and I know I'm not alone. The presence of the WNBA and other women's sports teams will help open these games up to new audiences and help bring new fans to professional women's sports.

SEE ALSO: Elena Delle Donne powered through a broken nose and 3 herniated discs to bring the Washington Mystics their first championship

"It's about time," two-time WNBA MVP Candace Parker said.

"It's about time," Los Angeles Sparks star Candace Parker told Jemele Hill during an interview on Hill's podcast "Unbothered." Parker was the WNBA's Rookie of the Year and Most Valuable Player when she joined the league in 2008, and she told Hill that growing up she had always hoped to have her own sneaker, and to be in a video game.

"A lot of people are asking 'are you so happy?' No, this should've happened a while ago, but I'm happy it's happening now, and I'm excited for the future of it, because now young boys and young girls are going to grow up seeing that. And that's what you have to do — you have to be able to see it to accept it and believe in it."

Sexist trolls demonstrate why it's important to have the WNBA in "NBA 2K20."

When "NBA 2K" announced that WNBA players would be joining the game, it sparked a wave of misogyny from men who felt that 2K was wasting their time including the women's league. Many of them mocked the WNBA for being less popular than the men, asked why the WNBA didn't have its own game, and made demands for "realism" if men and women take the court together in the game (they don't).

In reality, those misogynists hammered home why its important for women to be visible within professional sports and gaming, so that a new generation of basketball fans can be exposed to the WNBA and see them as professionals and stars in the same light as the NBA's top players.

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Categories: English

Benchmark was the poster boy for 'founder-friendly' VCs, but after WeWork and Uber its reputation is looking tarnished

Fri, 10/11/2019 - 22:44

Martin Roscheisen has been fired twice by the boards of startups he led.

Even so, Roscheisen says he would gladly work again with the venture capital firm that pushed him aside in one of the two episodes. 

Roscheisen, who is now chief executive of venture-backed diamond-maker Diamond Foundry, described that incident as a mutual decision he reached with a venture capital firm partner on the board who asked him to resign when it became clear that the startup was struggling to grow users.

But to take money again from the "the backstabber of all founders"?

Unthinkable, Roscheisen said.

The "backstabber" he's talking about is Benchmark Capital, a renown Silicon Valley venture capital firm which was in the news in September for its role helping to remove WeWork's charismatic and controversial cofounder Adam Neumann from the helm.

Benchmark is one of the most respected investment firms in the tech world, with a history of backing big hits like Twitter and Snap and a carefully crafted reputation of supporting, and understanding, entrepreneurs. This reputation is now under scrutiny as the events at WeWork and other startup interventions by Benchmark raise questions about the firm's true character.

The spotlight comes as the notion of the "founder-friendly" venture firm — a trend that Benchmark is largely responsible for creating — is being reconsidered across Silicon Valley and the broader investment community. The idea that startup founders are infallible looks more tenuous amid tales of excess and bad judgement at some high-profile firms. 

"There's just so much competition for the best deals and the best founders, that venture capitalists were tripping over themselves to say who could be the most founder friendly," said Mark Suster, a two-time entrepreneur and general partner at Upfront Ventures in Los Angeles.

"Then there are people who are old enough and wise enough, to have a long enough lens, to say, 'You know what, governance matters.' ... It's not the popular thing to say right now," Suster said, in defense of Benchmark's behavior.

A spokesperson for Benchmark declined to comment.

A pattern or a co-incidence?

For critics of Benchmark, the last few years provide plenty of ammunition.

In 2017, the San Francisco firm along with other investors pressured Uber's cofounder and chief executive Travis Kalanick to quit. It also sued Kalanick, alleging that he misled them in order to add board seats under his control. Benchmark was expected to see its stake hit approximately $8.25 billion in value after Uber went public.

Benchmark partner Bill Gurley also helped the board at Nextdoor relieve founder Nirav Tolia of his duties as chief executive last year, sources familiar with the talks told The Wall Street Journal. Tolia did not respond to a request for comment.

"I don't know how you explain to founders, 'Hey, the way I do early-stage investing is — I bet on founders,' and then you have this track record of explicitly not betting on founders," said Delian Asparouhov, a principal at Peter Thiel's venture capital firm Founders Fund.

"That to me is what feels morally corrupt (about firing founders). You have this dichotomy between what you're pitching to the next founder and what your actions actually reflect," Asparouhov said.

Benchmark, based in San Francisco, attracts founders with its impressive track record. The firm has modest fund sizes and still managed to take 25 companies public in the last decade, including Uber, Dropbox, GrubHub, and Yelp, PitchBook said. It now has 33 startups in its portfolio, compared to Kleiner Perkin's 90 and Sequoia Capital's 74.

Read more: How WeWork spiraled from a $47 billion valuation to talk of bankruptcy in just 6 weeks

Some investors say the chief executive ousters at WeWork and Uber, which was also backed by Benchmark, are more coincidence than correlation. The firings happened in the span of two years and took place at consumer-facing companies, which gave them more prominence in the media, said Semil Shah, a seed-stage investor at Haystack and a venture partner at Lightspeed in Menlo Park.

"There is a risk that if the collective board does not feel like the CEO is the best steward of the enterprise, that option is on the table," he said, referring to the option of ousting a CEO. "It's not a Benchmark thing. This happens at other funds."

Benchmark owes part of its success to the way it actively manages its portfolio. But as the firm tries to woo founders, its reputation among them and its response to the unfolding founder-friendly debate could determine its future ability to land the hottest deals.

Founder Fund's Asparouhov said any venture capital firm that has a history of firing founders could lose out on the most sought-after deals. A small number of founders who have prior experience working at a white-hot startup are more likely to create "extraordinary returns," he said, and are also more likely to know about the firm's track record.

Though these insider-founders are in the minority, "when it does come up, it tends to be painful for the investment firm," he said.

'Bill wants to win'

Heather Fernandez's account of working with Benchmark shows the firm's appeal. Her company Solv, which is working to bring convenience and transparent pricing to healthcare, raised money from the firm in 2017 and had partner Bill Gurley join the board.

Fernandez described the Benchmark partner as a "thought partner." Before the startup raised a cent of capital, they met and spoke on the phone often to fine-tune the idea and plan for challenges ahead.

"The role of an early-stage investor is to dig in with you," she said.

Others say Benchmark can turn on a dime if it feels its payday is at risk.

An entrepreneur who spoke on the condition of anonymity said the firm helped unseat him at his own startup when it was underperforming so the firm could replace him with a chief executive "in their network who they already know and trust."

Roscheisen, the entrepreneur who was ousted twice, felt scorned.

His firm Nanosolar, founded in 2001, had raised half a billion dollars to develop a cheaper and highly efficient solar cell. The problem was getting the technology to market. It was still untested at scale by the time Nansolar signed more than $4 billion in orders in 2009.

As a board member, Gurley had a latent presence, Roscheisen said.

"Gurley was stunningly clueless about the industry that Nanosolar was operating in even after eight years on the board," he said, adding that the investor was "weak in the knees at the first blow of a bit of wind."

After years of delays and unsolved product issues, Roscheisen said the board forced him to resign. Geoff Tate, a former chipmaker executive who replaced Roscheisen as chief executive, confirmed.

"Bill wants to win," Tate said. "Bill has a smart mind, and he's going to question things if he thinks it's going the wrong direction."

Gurley did not return repeated requests for comment.

Fernandez, the healthcare founder, said she expects her investors to have her back. But she knows being founder friendly has limits.

"If a board is hearing from the executive team, from employees, from customers, that there is a problem with the CEO, or if you see a destruction of value happening, I have a hard time believing that they'd say 'We're going to stand by this person no matter what,'" she said. 

In defense of Benchmark

The setup at WeWork meant that removing the CEO was not simple, and utlimately required founder Adam Neumann to agree to step down.

Neumann had locked up control of parent corporation The We Company ahead of the planned initial public offering. Its filings to go public, called an S-1, revealed that Neumann had 20 votes per share with his superpowered stock, about double the industry standard. He also owned an interest in four buildings that WeWork leased, received personal loans from the company, and bought the trademark to the "We" name so he could license it at cost.

Read moreWeWork details CEO Adam Neumann's web of loans, real-estate deals, and family involvement with the company

Outside observers have criticized investors, including SoftBank, for giving the founder so much power.

"People will say why would the VCs ever do that? How could they be that stupid? Sometimes, it is what it is," Mike Maples, Jr., a partner at venture firm Floodgate, said. "Your job is to make money for your investors."

Maples said if he passed on an investment opportunity because the founder had more voting shares than other directors, and the company went on to give massive returns, his firm lost. So did the university endowment or hospital that's invested in the firm as a limited partner and could have built another building on campus.

There are other stakeholders to consider, said Shah, an investor.

"I think when any top firm — it doesn't matter if it's Benchmark or your next top firm — I think they're making a decision on behalf of a number of key constituents," he said, "which include everyone from employees to the key executives at the company who may mutiny to their limited partners and protecting their principle investment."

Being founder-friendly is overrated

Venky Ganesan, managing director of Menlo Ventures, said being seen as founder unfriendly can hurt a venture firm's reputation.

The problem is, he said, what it means to support entrepreneurs has changed since he joined the venture business almost 20 years ago. Ganesan related founders to teenagers and investors to parents.

"These are people who have great potential, but we need to make sure they turn into responsible adults," he said. "You set boundaries, curfews, and consequences. ... Now the role has changed. They have become friends. We want to go and have a beer with them."

The events of the last few months could shift expectations again.

"People think founder friendly is you saying yes to everything," Ganesan said. "It's about helping you make the best decisions you can. Sometimes, it might mean saying no. We help you by saying no."

For Benchmark, which needs to win favor with a new generation of startups, the ability of founders to take such a nuanced perspective could make all the difference. 

SEE ALSO: The Takedown of Travis Kalanick — the untold story of Uber's infighting, backstabbing, and multimillion-dollar exit packages

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NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.

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Phil Libin is refocusing his startup incubator from AI to health tech because there's no need to 'shove' artificial intelligence into everything

Fri, 10/11/2019 - 22:40

  • All Turtles, an incubator launched and run by Evernote cofounder Phil Libin, has shifted its focus.
  • Libin launched it with the idea that it would foster applications and products based on artificial intelligence.
  • Now, All Turtles' focus is on developing products that help improve the health of individuals or workplaces.
  • Libin still thinks AI will be important for most of the products the company develops — just not all of them.
  • Click here for more BI Prime stories.

It's well known that startups quite often have to make a pivot — tweaking their business models or even completely revamping their whole market theses.

It turns out that startup incubators sometimes have to shift their focus also.

In the case of All Turtles, its pivot has been somewhat subtle, but still significant. Phil Libin, the company's CEO and founder, has shifted the focus of the incubator from fostering artificial intelligence applications and products to developing apps that improve people's health.

"We were always focused on solving what we thought were worthwhile problems, and the more we started looking at things, the more we realized that there's this common thread running through a lot of the problems in the world," he said. "The way that we live is maladapted," he continued. "It's not how we evolved to live."

All Turtles isn't abandoning artificial intelligence, by any means. One of the first applications to come out of its studio — Spot — is an AI-based chatbot that designed to make it easier for those who have experienced workplace harassment or discrimination to report what happened to them.

Read this: How an academic specialist in human memory created a chat app that's helping companies fight harassment and discrimination

Similarly, it's backed and is working with a startup called Tellus that's developing a device that's designed to monitor the vital signs and activities of elderly people using precision radar. Tellus' service relies on AI to make sense of the data coming from its radar-based sensor and to highlight notable changes.

All Turtles ditched a planned AI editor for its Sift app

But Libin is also open to having All Turtles work on projects that don't include any kind of AI at all. Last fall, for example, the company launched Sift, an app designed to provide users a deeper understanding of issues in the news without making them feel stressed or overwhelmed. The app covers topics including immigration, gun rights, and healthcare and offers a nonpartisan perspective with historical background and data to help explain the policy debate over such issues.

Originally, All Turtle planned to use AI to serve as a kind of editor for Sift. It would determine which topics were the most contentious, do some initial research on them, and even assign reporters to follow up and put together modules about them. But Libin and his team quickly realized that the AI was unnecessary.

"Humans are perfectly capable of knowing what people are yelling at each other about," he said. "It just felt better as a hand-crafted thing."

Libin insists the thesis he had when he launched All Turtles hasn't really changed. That assumption was that there are real problems in the world that haven't been solvable in the past that can now be solved because something is fundamentally different. Previously, his assumption was that the thing that was fundamentally different was going to be artificial intelligence or technology more broadly.

He still thinks that's going to be true most of the time. But he's open to the idea that some problems may now be solvable for reasons other than technology.

"Our goal is not to shove AI into things. Our goal is to make make products that make people healthier," he said. "I think a lot of them will benefit significantly from AI, but if they don't, they don't."

Changes other than just technological ones offer opportunities

Sift, for instance, is trying to address the problem of people feeling anxious and outraged and stressed out by the news. What's changed — what's created an opportunity for Sift —is the concern being raised by people such as former Google engineer Tristan Harris about how Internet services are stoking that outrage and how harmful that constant agitation can be to a democratic society that depends on informed citizens who can engage in reasoned, rational discussion, Libin said.

Similarly, while Spot depends on AI, it's also benefitted from the spotlight that's been placed on sexual harassment in the workplace by the MeToo movement and the massive employee walkout at Google last year.

"If you were doing something to combat workplace harassment and discrimination a few years ago, I think most companies would have said, 'We don't have that problem.' Now no one says that," Libin said.

"So, it's a combination of the technology getting better, but also the problem becoming much more obvious and acknowledged."

Even if All Turtles focus has shifted a bit, it's strategy hasn't. Libin is building out a global incubator; the company already has offices in Paris and Tokyo. It plans to open an office in Mexico City and other places around the world, although it's pushed back further expansion from this year until next.

Libin still believes in All Turtles' model

Libin also still believes in and is building All Turtles around another part of his thesis — that the way that technology and innovation is being fostered is fundamentally broken. Instead of focusing exclusively on using startups as the sole vehicles to develop technologies, All Turtles has taken a more eclectic approach.

In some cases it does back startups or develops technologies that will be spun off as separate companies. In other cases, it partners with existing companies to work on new products together. In still other cases, it develops technologies in-house that it plans to keep and offer as its own products.

"This idea that you can only innovate in startups is just a dumb idea," Libin said.

His only frustration with that thesis and All Turtles' model is that he keeps having to explain them to potential funders.

"Anytime you're explaining the model, you're not talking about the right thing," Libin said. "I am anxious to be at the point," he continued, "where no one cares about that anymore."

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SEE ALSO: This tech VC is based in Singapore, not Silicon Valley. And the startups she's seeing are solving problems Silicon Valley isn't even aware of.

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