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Mark Zuckerberg says Facebook is 'happy to pay more tax in Europe' (FB)

Fri, 02/14/2020 - 14:34

  • Mark Zuckerberg is planning to say Facebook is "happy to pay more tax in Europe," according to excerpts from a speech scheduled for Saturday seen by the Telegraph and BBC.
  • European countries including Britain and France have drawn up bills for taxing the revenue big tech companies like Facebook make inside their countries.
  • The planned tax laws have led to escalating tensions with the US, which says such laws unfairly target American companies.
  • Visit Business Insider's homepage for more stories.

Mark Zuckerberg plans to say in a speech in Munich on Saturday that Facebook is "happy to pay more tax in Europe," the Telegraph and the BBC report.

The BBC reported a further excerpt from Zuckerberg's scheduled speech: "I understand that there's frustration about how tech companies are taxed in Europe. We also want tax reform and I'm glad the OECD [Organisation for Economic Co-operation and Development] is looking at this. We want the OECD process to succeed so that we have a stable and reliable system going forward. And we accept that may mean we have to pay more tax and pay it in different places under a new framework."

European countries including Britain and France have drawn up plans to hit tech giants like Facebook with much higher tax bills on the revenue they generate within those countries.

Historically tech giants including Facebook have been able to minimize the tax they pay in the European Union by routing their taxes through Ireland, which has favorable tax laws.

France and the UK's attempts to impose larger tax burdens on big tech companies has led to some political clashes, with the US saying they discriminate against American companies. President Macron agreed to hold off on implementing France's 3% tax on big tech companies' revenue after threats from Donald Trump that the US would impose tariffs on French goods including wine and cheese.

UK Prime Minister Boris Johnson in December threw his weight behind a tax of 2% on UK sales due to be implemented April 2020, but in January the OECD told Britain to "hold fire" on the tax, saying there needs to be international agreement on how countries proceed with taxing tech.

Last month, Margrethe Vestager, Europe's competition commissioner and head of digital policy, said if individual member states were blocked from introducing their own taxes on big tech the EU could step in.

SEE ALSO: A new bill would force Netflix, Amazon, and other streaming services to put 25% of French revenue into funding French cinema

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Ford's scooter startup was supposed to be in 100 markets by the end of 2019. That didn't happen, and its founder explains why.

Fri, 02/14/2020 - 14:15

  • Spin, the scooter company owned by Ford, wanted to be in 100 markets by the end of 2019. 
  • Currently, the startup is only in 70. 
  • In an interview, founder Euwyn Poon defended the startups growth in the 18 months post-acquisition.
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When something works, double down.

That's the strategy that Spin, the scooter startup bought by Ford for $100 million in 2018, has adopted as it fights for footing in the cutthroat micromobility industry.

But it's a departure from high-flying goals set in 2019, when it hoped to be in 100 markets by the end of the year. Spin currently operates in 70 markets, 30 short of that goal.

"We're dramatically different than we were at the acquisition," Euwyn Poon, the company's president and cofounder, said in an interview, noting that the startup now has 600 employees. 

"We actually made a conscious decision to slow down a little bit of the rollout and to focus on the markets that are doing quite well," Poon said, emphasizing that the company has been instead "figuring out the economics of the business."

That's not to say Spin hasn't seen a few big wins. It beat out competitors including Bird and Lime for the coveted right to operate in San Francisco. And in Washington, DC, it operates next to Uber's Jump, Lyft and Skip.

Thanks to that win D.C. is now Spin's most lucrative market — and by a wide-margin.

"It's a walkability factor and the demographic as well," Poon said. "People are running around to meetings basically all the time, it's flat, and more spread out than somewhere like Manhattan."

College campuses are also a massive focus for Spin, with the University of Central Florida leading that segment.  In 2018, Poon told Business Insider they were a "natural fit" thanks to university demographics and campus layouts." 

Next up to continue growing markets that have worked is a hybrid model, with both docks for scooter parking and charging, as well as free-floating vehicles that can be left wherever.

"It actually works for all three constituents at once," Poon said. "It's a parking spot for riders, it helps draw customers to businesses who have space and want docks. And it's also good for our operations because it drastically reduces the cost of having to move the scooter back and forth to the warehouse everyday."

SEE ALSO: The CEO of a scooter startup owned by Ford explains why it's a good thing that his employees are unionizing — and how it could help Spin get a leg up on Bird and Lime

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An EU judge told Google it's landed on Monopoly's 'Go to Jail' square and reportedly threatened to increase its $2.6 billion antitrust fine

Fri, 02/14/2020 - 14:10

  • An EU judge has just slammed Google, saying that it's landed on "Go to Jail, do not pass go" in Monopoly terms.
  • According to Politico, Judge Colm Mac Eochaidh said: "It is perfectly apparent that [Google] promoted [its] own and demoted others."
  • Google is currently contesting a €2.4 billion ($2.6 billion) fine first imposed by the EU in June 2017, with the EU claiming Google had abused its dominance over other shopping comparison services.
  • A Wall Street Journal reporter also tweeted midday Friday that Eochaidh had raised the possibility of increasing the €2.4 billion fine, with Eochaidh reportedly calling the sum "small cash in [Google's] hands."
  • To be clear, Eochaidh's "Go to Jail" claim Is metaphorical: while the EU can impose fines on antitrust grounds, competition cases do not fall under criminal law.

Google's legal battle with the EU over antitrust fines has just gotten fierce.

An EU judge has just slammed Google, saying that it's landed on "Go to Jail, do not pass go" in Monopoly terms.

The tech giant is currently contesting a €2.4 billion ($2.6 billion) fine first imposed by the EU in June 2017, with the EU claiming Google had abused its dominance over other shopping comparison services.

According to Politico, Judge Colm Mac Eochaidh said: "For me, this case is about visibility. It is perfectly apparent that you have promoted your own and demoted others," also accusing Google's lawyers of "obfuscating" in his address to the EU General Court.

"We're playing a Monopoly game. I think you landed on the 'Go directly to jail' case, do not pass by go," Eochaidh added.

A Wall Street Journal EU politics reporter, Valentina Pop, also tweeted midday Friday that Eochaidh had raised the possibility of increasing the €2.4 billion fine from June 2017. According to Pop, Eochaidh called 2017's €2.4 billion fine "small cash in [Google's] hands" and asked whether this fine has deterred Google from repeating its behavior.

Google's legal forms part of a broader challenge that Google's expected to mount against three large EU fines imposed on it in the past three years.

As well as the June 2017 fine, it was hit with a €4.3 billion ($5 billion) fine in July 2018 for allegedly abusing its dominant position of its Android operating system, while a third €1.49 billion ($1.7 billion) fine came in March 2019 for allegedly blocking its online advertising rivals.

To be clear, Eochaidh's "Go to Jail" claim is metaphorical: while the EU can impose fines on antitrust grounds, antitrust cases do not fall under criminal law.

Nevertheless, it's a clear early indication that Google's legal team – to invoke another metaphor – has a real fight on its hands.

Google wasted no time marshaling its arguments yesterday, with one of its lawyers, Thomas Graf claiming that the EU's antitrust punishments threaten internet innovation.

SEE ALSO: Google says the EU's hardline antitrust punishments threaten internet innovation as it starts the first of three legal battles against $9 billion in EU fines

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Disney is finally finding success in video games after years of failures, and it's largely due to letting go of control (DIS)

Fri, 02/14/2020 - 14:00

  • Disney has a long history of trying, and failing, to succeed in the video game business.
  • But the past few years have produced a few notable exceptions in 2018's "Marvel's Spider-Man" and 2019's "Star Wars Jedi: Fallen Order." Both games were rare smash hits for Disney characters.
  • Those successes were no accident: They're part of a years-long plan at Disney to put the company's most valuable properties into the hands of major game studios it doesn't own.
  • "We want to tap into the power of creatives across the industry," Sean Shoptaw, senior VP of games and interactive experiences at Disney said during a talk this week in Las Vegas.
  • Visit Business Insider's homepage for more stories.

The world's largest entertainment company doesn't make its own video games.

Disney — the folks behind "Star Wars," Mickey Mouse, Disneyland, everything Marvel, ESPN, and hundreds of other iconic characters — instead licenses its incredibly successful properties out to other companies. It still makes mobile games, but Disney's out of the "big" game business; the stuff most people play on stuff like the PlayStation 4 and PC.

Across the past few years, that approach has seen massive success with two games in particular: 2018's "Marvel's Spider-Man" and 2019's "Star Wars Jedi: Fallen Order." 

The former, a PlayStation 4 exclusive game made by Insomniac Games, sold over 13 million copies. The latter, a multiplatform "Star Wars" game with original characters and story, is on track to sell 10 million by March. At approximately $60 apiece, each game is grossing nearly $1 billion in sales thus far.

Notably, neither game was actually made by Disney — a company notorious for keeping a tight rein on creative control.

Instead, the company farmed out work to established game studios: Insomniac for "Spider-Man," and Respawn Entertainment for "Star Wars." 

"We want to tap into the power of creatives across the industry," Sean Shoptaw, senior VP of games and interactive experiences at Disney, said during a talk this week in Las Vegas which The Hollywood Reporter attended. He made the call out during DICE 2020, an annual video game industry event where talks are given and awards are handed out.

"I'm here for one specific reason," Shoptaw said. "To empower you to do really unique things with our [catalog]."

It's a strategy that Disney established when it outright divested from the production side of the video game business back in 2016. "We feel like we're better off managing the risk that the business delivers by licensing instead of publishing," Disney CEO Bob Iger said in the investor call when the news was announced.

He had a good reason for the move: In the span of 10 years, Disney purchased and subsequently closed at least six game studios. Hundreds of employees lost their jobs, and countless games were canceled. It was bad for Disney's business, and bad for employees' livelihoods, and bad for Disney fans who wanted good games.

How did the world's biggest, most successful entertainment company completely fail at gaming? At the time, Business Insider spoke with several former employees who explained what went wrong with Disney's video game initiative; Disney declined to comment.

One common refrain emerged: Disney knows how to make movies, TV shows, and theme parks. The company also knows how to run media businesses, from ESPN to ABC to Pixar. But when it comes to video games, we were repeatedly told that a lack of institutional knowledge kept the company from ever really investing. 

In the years since, Disney has leaned into working with outside studios to produce games based on its properties — the upcoming "Avengers" game, for instance, is being overseen by Square Enix, the maker of "Final Fantasy." Not only has that approach paid off financially, but it's also been huge for quality: Both "Spider-Man" and the latest "Star Wars" are critically lauded titles. 

From Shoptaw's sentiments, it sounds like that approach isn't stopping anytime soon. Better still: It's been Disney's first major success with gaming in years.

SEE ALSO: Disney just shut down a huge project that was supposed to be worth billions — insiders reveal what went wrong

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NOW WATCH: 62 new emoji and emoji variations were just finalized, including a bubble tea emoji and a transgender flag. Here's how everyday people submit their own emoji.

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The former CEO of SAP says that his one regret is that it didn't get to the cloud faster, but that the experience taught him how to not miss the next big trend

Fri, 02/14/2020 - 14:00

  • Bill McDermott, ServiceNow's new CEO, has had a ringside seat to the "digital transformation" trend sweeping enterprise tech.
  • He saw this trend and the rise of the cloud open up new opportunities for new tech giants like the one he just joined. And he witnessed the way it disrupted the business models of traditional tech behemoths, like SAP, which he led for nearly a decade.
  • McDermott shares with Business Insider what he learned from the rise of the cloud, how it has changed the way businesses access technology, and how pouncing on the trend much sooner was the one misstep he wish he could take back.
  • "We should have got there even faster," he told Business Insider. "Having said that, you know, it's better late than never."
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For veteran tech executive Bill McDermott, "digital transformation" isn't just another trendy catchphrase. 

The new CEO of ServiceNow witnessed the trend's rise as it created opportunities for new tech giants like the one he just joined, and disrupted older, traditional tech behemoths — like the one he just left.

McDermott was with SAP for 17 years, including nine years as CEO before stepping down to join ServiceNow just three months ago. He led the 48-year-old German tech giant at a time when it dominated the market for the software corporations used to run their businesses. And he watched that dominance shrink, battered by the rise of the cloud, which set the stage for the digital transformation wave.

McDermott has been widely-praised for leading SAP's growth during a tough transition, but even he admits that he could have done a much better job identifying and quickly adapting to the cloud.

"I guess if you could point to anything that I would say, 'Wow, I wish we could get that one back,' it would probably be getting to the cloud even faster," he told Business Insider. 

McDermott's insights into digital transformation in the cloud era are valuable at a time when businesses, including startups and big corporations, have come to understand technology's importance in today's world, but are navigating what has become a complicated, even confusing, enterprise tech market.

McDermott said he gets the dissatisfaction of many in the corporate world.

"One of the reasons why C-level executives are so frustrated or why digital transformation has become a slog instead of a sprint is because they are having a difficult time working through yesterday's software to solve today's problems," he said. "20th century technology will not solve 21st century problems."

How the cloud changed enterprise tech

The big changes began about 15 years ago with the rise of the cloud, which made it possible for businesses to explore new ways of using technology by letting them set up their networks on web-based platforms run by companies like Amazon, Microsoft and Google. 

This meant companies could scale down or even abandon in-house data centers. The way they paid for software also changed dramatically. Instead of signing multi-year contracts featuring hefty licensing fees, they could pay a subscription fee for access to applications usually based on the number of users or the amount of computing they needed.

The magnitude of the change for traditional enterprise software players was summed up recently by Jennifer Morgan, one of SAP's new co-CEOs who replaced McDermott.

"The cloud world is very different from a world when projects took years to implement and you can count on loyalty for decades," she  told Business Insider in a recent interview. "Now, it's a game of days and weeks and months. And customers choose you every single day."

'Cloud signals'

This trend was already developing in the early 2000s. Two companies that now dominate the cloud software arena were born around this time: Salesforce in 1999 and ServiceNow in 2003. But it took time for traditional business software makers, including SAP, to see what was going on, McDermott said. 

"There were cloud signals that were flying around in the 2005 timeframe that were pretty evident," he said. "And probably we should have got there even faster."

The cloud trend gained momentum after the Great Recession of 2009, he said. With IT budgets getting slashed, companies were exploring options, especially those offered by cloud companies.

"That was the moment in time where the cloud really became the way forward," McDermott said. "Companies did not have the money so there weren't big capital expense budgets available. And they certainly didn't have the time to essentially do quote unquote, the traditional big IT project."

A dramatic market shift

For traditional enterprise tech companies, such as SAP, Oracle and IBM, this led to a dramatic market shift. "All of a sudden, the behavior of the buyer, or the company you were dealing with, became totally different, almost overnight," McDermott said.

"Cloud just took off as the way forward," he said. 

Companies like SAP and Oracle eventually scrambled to catch up, mostly by acquiring existing cloud software players. McDermott quipped: "You know, it's better late than never."

The rise of the cloud formed the core of the digital transformation trend, although it also featured other new technologies, including AI, blockchain and Internet of Things. 

Other trends have emerged, including a widening in the view toward cloud computing itself. One is hybrid cloud where businesses set up networks in cloud platforms, while keeping huge chunks of their data and applications in private data centers. Another way to look at is is multicloud, where companies set up their networks across different platforms.

No one-size fits all solution

Having more options has been positive for many businesses, but it has also made it tougher for others to make decisions on a range of issues: How much of their network should they move to the cloud? Which applications are best? Is it time to embrace AI?

"Digital transformation is different things to different people," McDermott said. "The leading force within digital transformation is this idea of experience."

For ServiceNow, which offers cloud tools to automate a business's workflow and operations, focusing on experience means creating tools based on how employees do their jobs in different companies and industries. There is no one-size fits all solution, McDermott stressed.

He cited the example of businesses that hire millennials who he said "are not going to tolerate working in an office that doesn't work with modern technology."

"When they go to work, getting things done in the office has to be as simple as doing things on the living room couch on a Sunday afternoon," McDermott said. "It just has to be."

Employees in a specific industry may have different needs, he said. For example, most people who work at major airlines are minimum wage workers with a different attitude toward technology.

"Just think of taking minimum wage workers that may not have a systems literacy and the computer skills of a data scientist and you give them a complex 20th century experience," he said. That will not work for employees for whom "the only thing they're comfortable with is working on their mobile, and want a click twice and done experience" to do their job.

"It's got to be simple," he said. "We're just in a different world here. And these are the things that really matter. Digital transformation with real customer value, real examples."

A company born in the cloud

McDermott believes he is in a stronger position now to take on these challenges as CEO of ServiceNow, a company that was "born in the cloud." 

"Not only is it a born in the cloud company, and there's only a few of them that have operated at this level of scale," McDermott said. "None of them have grown faster organically than this company. None of them."

The company's stock tumbled when he was named a few months ago as former CEO John Donahoe's replacement. But the shares rallied in January after the Santa Clara, California company posted a blowout quarter.

McDermott has said he's excited about the road ahead. He recently bought a house in the Bay Area saying, "I closed on the house on Thursday. I moved in on a Friday."

He has also stepped down from the boards of major companies, including Under Armour, Dell and Secureworks, so he can focus on running ServiceNow.

"I want to just devote myself entirely to the mission of ServiceNow and make this company an absolute masterpiece," he said. 

Got a tip about ServiceNow or another tech company? Contact this reporter via email at, message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.

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Flying solo: A new generation of VCs are rewriting the Sand Hill Road playbook and anointing themselves general partners of their own funds

Fri, 02/14/2020 - 14:00

  • A new generation of tech investors are raising their own venture capital funds as solo general partners.
  • The number of micro-funds is actually on the decline, but the solo general partner's ranks are expected to grow as more companies go public and capital becomes more available.
  • The solo general partner participates in the crowded early-stage investing space, but their size and background gives them an advantage over institutional funds.
  • Click here for more BI Prime stories.

Sand Hill Road is paved with venture firms raising bigger and bigger pots of money.

Call it the SoftBank effect: The biggest venture capital fund in history has forced rival firms to take more money from outside investors, which is then pumped into the startups in their portfolios. Investments of $100 million or more, known as mega-rounds, accounted for almost 25% of the capital put into early-stage startups last year, according to PitchBook data.

But there's a flurry of activity taking place at the opposite end of the spectrum too: A new generation of tech investors are raising funds on a more modest scale, and they're doing it outside the confines of the traditional institutional investing firms. 

Say hello to the "super angels," a special breed of investor that has carved out a valuable niche in a tech landscape increasingly dominated by giants. 

These solo general partners invest in mostly early-stage startups and writes checks in the range of $25,000 to $500,000, based on the fund's size. The deals are especially competitive in early-stage investing, but some of these fund managers say they have an edge. Their small size lets them move fast on deals, and their personal operating experience gives them instant credibility with founders.

These one-person funds aren't especially common. In fact, the number of micro-funds that closed on $50 million or less has been halved since 2014, PitchBook found. Still, the ranks of solo general partners are expected to grow, as more companies go public and free up their employees to pursue new opportunities, like raising a fund.

Founders don't want to raise money from institutions as much anymore.

They want to raise money from individuals.

— Erik Torenberg (@eriktorenberg) February 4, 2020

"There's this sort of new class of people who are entering early-stage investing," said Ryan Hoover, the founder of Product Hunt and an investor through his fund, Weekend Fund. He described it as a close group of operators, knitted by the same relationships and even some of the same deals.

"In some ways, it feels like we're all learning together," Hoover said.

The rise of the solo GP

The name "super angel" is a misnomer. An angel investor describes someone writing checks with their own money, as opposed to an institutional investor, who pools money from outside sources to purchase shares of a private company.

The name is more a reflection of the super angel's background. A good number of them start out investing their own savings — money stashed away from years working in tech or from cashing out their company shares after an exit. Of those founders who leave a business after an acquisition or an initial public offering, at least 5.7% go on to become angel investors, according to PitchBook, though its senior analyst Alex Frederick says the percentage could be much higher because many angels are unnamed in regulatory filings.

Some of those angel investors graduate to raising a fund. They can access better opportunities with more money to play with, said Katie Jacobs Stanton, the sole general partner of Moxxie Ventures.

Twitter's former head of media came out of its market debut with enough cash to start angel investing. She continued to work at Twitter while making a side hustle of investing in companies like Carta, Lambda School, Coinbase, and Color, where she took a job as chief marketing officer.

Last year, Stanton turned in her badge to become a full-time investor. She raised $25 million from some of the most recognized figures in the valley, including Marc Andreessen, Chris Sacca, and Susan Wojcicki, for her debut fund.

"What I needed to become an even better investor was more capital," Stanton said.

Some super angels we spoke to also considered joining a traditional VC firm's "scout program," which enlists founders to bring deals to the general partners in exchange for a cut of the profit. It provides a shortcut to institutional investing, though some restrictions may apply. Most scouts have a budget of a few hundred thousand dollars, and they can't close a deal without a partner's approval.

There's never been a better time for investors to strike out on their own

The solo general partner has been buoyed by two forces.

The tools for fund managers are getting better. Companies like AngelList and Carta have put out software that eliminates some of the overhead of starting a firm. AngelList's service can set up the fund's corporate structure, create legal documents, accept money from investors, handle the financial reporting, and wire money to portfolio companies. It can save fund managers tens of thousands of dollars in accounting and legal fees after AngelList's management fee, which is 1% of the capital raised.

The other contributing factor is the flood of capital. Last year saw 49 unicorn startups go public, which puts money back into the pockets of their investors. Some of them will write personal checks to the next generation of fund managers. Marc Andreessen and Chris Dixon's names show up on more than a few blog posts buzzing about a fund's backers.

Others, like the investors who delivered those unicorns to their partnerships years ago, will strike out on their own, said Frederick, the PitchBook analyst. Most recently, Kleiner Perkin's Lynne Chou O'Keefe raised an oversubscribed fund of $87 million to invest in digital health. She led the firm's investment in Livongo, a now publicly traded company that makes tools for managing chronic diseases.

'How can I be helpful?'

The solo general partner is often writing one of the first checks into a company. The potential upside is higher at an early stage, but so is the risk. Most companies fail, and a small portion of investments provide all of the fund's returns.

The situation means these fund managers have to get into the very best deals or earn their right to participate in future financing rounds, which is how they maintain their ownership stake.

The solo general partner gets the golden ticket into these rounds by proving their value. Many of them rely on their experience as operators to demonstrate their usefulness, several investors said.

Linda Xie was an employee at Coinbase at the height of bitcoin's price surge in 2017, also blogging and hosting meetups for cryptocurrency developers, when investors started reaching out to recruit her, she said. She took some meetings and liked the job descriptions but wasn't keen on having less control over investment decisions than the general partners.

"If there is demand for this knowledge, I think I could do something like this on my own," Xie remembers thinking.

Her fund, Scalar Capital, which has a second managing director, Jordan Clifford, also from Coinbase, is structured like a hedge fund that invests in early-stage projects and crypto assets. They participate in the exchanges they fund, which lets them give detailed feedback that crypto-curious investors cannot muster. Xie said she has placed multiple hires into portfolio companies from the community she has helped build.

Niv Dror's marketing skills make him a desirable partner for almost any early-stage startup. The former head of social at Product Hunt started its newsletter and grew its social media following to hundreds of thousands of users before its sale to AngelList, where he ran marketing.

His fund, Shrug Capital, named for the emoticon that's tattooed on Dror's wrist, shows founders that it knows marketing. During the holidays, Dror and his staff designed, printed, and mailed more than a thousand desktop calendars to people in tech. Each day features a memorable tweet from a venture capitalist, founder, or one of the industry's rising stars.

The calendar prompted anyone who was included to tweet a photo of "their day" in the calendar, introducing their followers to Shrug Capital and raising its profile.

Happy January 13!

Yours truly,
Miss January 13

— Sara Mauskopf (@sm) January 13, 2020

I need you all to know that I, too, am in the Shrug Capital calendar.

Please make a note to celebrate me this Friday.

— Ashley Mayer (@ashleymayer) January 7, 2020

Other investors called the calendar a "masterclass" in content marketing.

Teamwork makes the dream work

Another strategy is going after a deal as part of a collective, said Brianne Kimmel, who raised $5 million for her debut fund, Work Life Ventures. She has experience driving new business as a marketing manager working on Zendesk's startups product. Sometimes, that isn't enough to land a spot in a deal that has her competing with much larger funds. Kimmel said she will pool her money with other one-person funds to get an edge.

She referred to this ensemble as the Ocean's Eleven. Her friend, Jeff Morris, Jr., brings expertise from leading revenue products at Tinder, which he helped grow into the world's highest grossing app. Bobby Goodlatte's prowess as a former product designer at Facebook means he can help founders execute on design mockups, prototypes, and product feedback. Both run their own funds. The hope is that the collective's usefulness makes it more attractive than some of the larger funds.

Ryan Hoover said he keeps a log of investors who introduce him to companies, whether his fund invests or not. It's helpful for recording who sends the fund opportunities so that when he comes across a company that fits the investor's focus, he can return the favor.

It seemed inevitable that Hoover, one of tech's most visible benefactors, would jump into investing. His company, Product Hunt, is a website that surfaces cool new tech products, and is known as a hunting grounds for venture capitalists looking for deals.

Hoover raised his debut fund, Weekend Fund, a few months after selling off Product Hunt to AngelList in 2017. Now on his second fund, it backs consumer and enterprise businesses and is particularly excited about voice, apps for remote workers, and low-code tools.

Weekend Fund is still waiting on the first fund's investments to return, Hoover said. A lot of these young funds are in the same vulnerable position, which creates an "even greater desire to come together."

"If I can get the best marketer in the world on the cap table for this company that I invested in, that's good for the company and, hopefully, will help my investment," he said.

SEE ALSO: These 11 milestones in venture capital funding will tell you whether startups hit their peak in 2019 or continue to defy expectations

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NOW WATCH: Legendary venture capitalist Ben Horowitz on culture mistakes most companies make, diversity in leadership, and the outlook for crypto

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The 19 billion-dollar startups to watch that are revolutionizing healthcare in 2020

Fri, 02/14/2020 - 13:59

  • 2019 was a critical year for biotech and healthcare startups, with an unprecedented number of them making the leap from private to public and more considering making the jump in 2020. 
  • There are 19 healthcare startups that have reached unicorn status, or the $1 billion and over valuation mark, according to PitchBook and Business Insider's reporting.
  • One Medical, which started the year on the list, made its public market debut at the end of January, surging to a $2.7 billion valuation on its first day of trading. 
  • Some startups, like Bright Health and Clover Health, added hundreds of millions of dollars to their war chests in 2019, while others didn't take on additional funding.
  • Click here for more BI Prime stories.

2020 is gearing up to be a pivotal year for healthcare and biotech startups.

In 2019, a handful of health startups went public with valuations above $1 billion, placing them in unicorn territory.

The year has already started off with one public offering. One Medical made its stock-market debut at the end of January, surging to a $2.7 billion valuation on its first day of trading.  

While companies like Tempus and Ginkgo Bioworks and health-insurance startups such as Clover Health and Bright Health added to their war chests, others, like 23andMe and Butterfly Network, maintained their unicorn status without taking on additional funding, according to data provided by PitchBook.

Others joined the list in early 2020, including Alto Pharmacy, which just got a fresh $250 million in a round led by SoftBank's second Vision Fund

Never miss out on healthcare news. Subscribe to Dispensed, our weekly newsletter on pharma, biotech, and healthcare.

This article was published on December 31, 2019, and has been updated.

Alto Pharmacy - $1 billion

In 2020, Alto Pharmacy became a newly minted unicorn. 

SoftBank's Vision Fund 2 led a $250 million investment round in Alto Pharmacy, a startup that uses couriers to deliver medications from its brick-and-mortar locations. GreenOaks Capital, Jackson Square Ventures, Olive Tree Capital and Zola Global also joined in on the Series D round. In total, the startup has raised more than $350 million. 

The latest funding round puts Alto's valuation at more than $1 billion, Reuters reported

Alto has plans to use the funds to grow its footprint nationally, after years of focusing on the startup's northern and southern California footprints, CEO Matt Gamache-Asselin told Business Insider. The startup will enter five to 10 markets over the next year, he said.

Read more: SoftBank's Vision Fund 2 just made its first bet on a buzzy US pharmacy startup. The CEO of Alto told us how he plans to use the fresh $250 million.

Rani Therapeutics - $1 billion

The biotech startup Rani Therapeutics is taking on a problem that has eluded companies for decades — finding a way to turn injectable drugs into pills for people living with chronic conditions. The approach has the potential to upend billion-dollar markets for drugs such as insulin and treatments, like Humira, for autoimmune conditions.  

The San Jose, California, company raised $53 million in February from Alphabet's venture-investment arm GV. To date, Rani has raised $142 million.

Clover Health - $1.2 billion

Clover Health sells Medicare Advantage health-insurance plans. When people in the US turn 65, they can choose to be part of traditional Medicare or Medicare Advantage, which is operated through private insurers like Clover and often provides additional healthcare benefits. The hope for San Francisco-based Clover and other technology-based health insurers is to use data to improve patients' health.

Clover lost $26.5 million in the first nine months of 2019, according to state insurance filings reviewed by Business Insider.

The 2019 loss was deeper than the company's net loss of $18.7 million over the same period in 2018. Clover had 42,087 Medicare Advantage members at the end of the third quarter, up from 31,902 at the end of the third quarter in 2018.

It's been a big year for Clover. In March, the company said it was laying off 25% of its workforce, or about 140 employees, as part of a restructuring. That came on the heels of Clover raising $500 million in January, bringing the total funds the company has raised to $925 million.

Its most recent valuation was $1.2 billion, according to PitchBook data from before the $500 million round.

Read more: We just got a look at the latest financials for health startups like Bright and Oscar. They reveal the challenges facing the insurers as they keep growing their footprints.

Rakuten Medical - $1.2 billion

Headquartered in San Diego, Rakuten Medical develops precision-targeted cancer therapies designed to treat solid tumors. 

The biotech is led by the Japanese billionaire Hiroshi Mikitani, who is also founder and CEO of the large Japanese e-commerce firm Rakuten. Mikitani said he was inspired to fund the cancer research after his father was diagnosed with pancreatic cancer in 2012.

Rakuten Medical has raised about $471 million, according to PitchBook. Both Mikitani and Rakuten have invested in Rakuten Medical.

Lyell - $1.2 billion

The San Francisco biotech company is focused on treating cancer with cell therapies. Lyell's goal is to develop cell-based immunotherapies for cancer, with a focus on CAR-Ts and solid tumors.

Earlier this year, the company raised $179 million in Series B venture funding from Foresite Capital Management, Arch Venture Partners, and Altitude Life Science Ventures. The company has raised a total of $358 million, according to PitchBook. 


Butterfly Network - $1.3 billion

Butterfly Network, a company that developed an iPhone-based ultrasound device, wants to make the technology more accessible to doctors and healthcare workers so they can make more precise diagnoses on the move. 

The device, called Butterfly iQ, plugs into the iPhone and isn't much bigger than the phone itself. It's been approved by the Food and Drug Administration for use in imaging the abdomen, bladder, and heart. 

In September 2018, Butterfly raised $250 million from investors such as Fidelity, Fosun Pharma, and the Bill and Melinda Gates Foundation. In total, the company's raised $370 million. 

HeartFlow - $1.6 billion

HeartFlow is trying to make the process of finding blockages in the heart a lot less invasive. Using imaging from a CT scan, HeartFlow builds a 3D model that pinpoints the blockages associated with coronary-artery disease, a heart condition that affects millions of Americans and is the leading cause of death in the US

HeartFlow is based in Redwood City, California, and reached unicorn status in 2018 after raising $240 million. In total, the company has raised $532 million

Zocdoc - $1.8 billion

Zocdoc helps patients book doctors' appointments and check in for them — everything from primary care to dental to optometry appointments.

Users can search based on procedures, conditions, and even a particular doctor they might want to book an appointment with.

In 2019, the company changed the way it pays its doctors in some states, moving from a subscription model to one that charges a per-booking fee. Some doctors haven't been happy about the switch.

Zocdoc, which is based in New York, most recently raised $130 million in a Series D round in August 2015, bringing its total raised to $223 million. The company's last reported valuation is from 2015, according to PitchBook.

Devoted Health - $1.8 billion

Devoted Health wants to reinvent how we care for aging Americans.

The company started selling Medicare Advantage plans in parts of Florida for 2019. In its second year, its enrollment jumped, in line with the company's expectations

The company's plans might look a bit different from traditional insurance in that Devoted plans to do more than pay for visits to doctors and hospitals. It's also hiring nurses and other employees directed at keeping seniors healthier and out of the hospital.

Devoted was founded in 2017 by brothers Ed and Todd Park. Before Devoted, Todd Park cofounded the health IT company Athenahealth and served as the chief technology officer of the US during the Obama administration. Ed Park, who serves as Devoted's CEO, was formerly the chief technology officer and later chief operating officer at Athenahealth.

In October 2018, the Waltham, Massachusetts-based company raised $300 million in a Series B round led by Andreessen Horowitz, bringing its total funding to $369 million.

Read more: We got a look at the slide deck that buzzy startup Devoted Health used to hit a $1.8 billion valuation before it signed up any customers

Bright Health - $2.2 billion

Bright Health provides health plans for people under the Affordable Care Act and to seniors in Medicare Advantage.

It was founded in 2016 and has raised more than $1 billion after closing a $635 million round in December. A representative for the company declined to provide its updated valuation, though according to Pitchbook, the valuation is $2.2 billion.

Minneapolis-based Bright Health posted a net loss of $9.3 million for the first three quarters of 2019, a deeper net loss than the $4.2 million loss the company had over the same period in 2018. The company made $164.3 million in revenue and recorded $127.9 million in medical claims.

The startup covered 60,434 members as of September 30, mostly in ACA health plans for individuals and families.

Bright in January announced plans to acquire Brand New Day, a health plan that gave it a big foothold in the Medicare Advantage market.

The company said in July 2019 that it would operate in parts of 12 states in 2020, roughly double its geographic footprint for 2019. The Brand New Day acquisition brings that count to 13.  

Read more: $2.2 billion Bright Health just struck a deal to buy a health plan and gain a big foothold in the lucrative Medicare Advantage market

23andMe - $2.5 billion

In 2018, 23andMe, a company best known for its genetics tests designed to tell you information as varied as the amount of Neanderthal DNA you have and your health risks, gained a higher valuation after striking a $300 million deal with drugmaker GlaxoSmithKline.

The company, founded in 2006, has millions of customers and a number of partnerships with major pharmaceutical companies. With GSK, 23andMe has a 4-year-long development deal to use the data 23andMe has collected to discover and develop new medications. Using 23andMe's data, GSK is also working on an experimental drug to treat Parkinson's disease in patients with a particular mutation. 

But the consumer genetics market has been facing a big slowdown, leading the company to lay off 100 employees. Its rival, Ancestry, also laid off roughly 100 employees. 

To date, 23andMe has raised $792 million. 

Read more: The DNA testing industry is stuck in a rut. Here's how 23andMe and Ancestry are plotting their next moves.

Tempus — $3.1 billion

Chicago-based Tempus got its start in 2015, and in the past four years, it has rocketed into unicorn territory.

The startup, which was founded by Groupon founder Eric Lefkofsky, hopes to help doctors use data to find better cancer treatments for patients, using both clinical data — information about which medications patients have taken and how they responded to them — and data it sequences in its lab based on the tumors and hereditary genetics of cancer patients.

Tempus raised $200 million in Series F venture funding from Novo Holdings, Revolution Group, and New Enterprise Associates in May. So far, the company has raised a total of $520 million. 

Oscar Health - $3.2 billion

New York-based health-insurance startup Oscar Health sells insurance in the individual exchanges set up by the Affordable Care Act and to small businesses. The company had 235,371 members as of September 30, slightly more than the company had in 2018.

It entered a new market in 2020, offering private Medicare Advantage plans to seniors.

Read more: Buzzy health startup Oscar is making a big bet on a crucial change to how you get your healthcare. The CEO shared how he thinks that will happen.

In August, the company announced plans to sell Obamacare plans in 12 new markets in 2020, including in four new states.

Oscar has raised more than $1 billion from investors enticed by its promise of a new tech-driven approach to health insurance. In August 2018, it raised $375 million from Google's parent company, Alphabet, and said it would use the funds to bring its plans to more people, including in Medicare Advantage.

Read more: We just got a look at the latest financials for health startups like Bright and Oscar. They reveal the challenges facing the insurers as they keep growing their footprints.

Indigo Agriculture — $3.45 billion

Indigo Agriculture is harnessing plant microbiomes to try to make plants more likely to survive. Indigo does this by coating seeds with certain microbes, with hopes that the plants will better withstand poor soil conditions, drought, and insects.

The Boston-based company raised an undisclosed amount of venture funding from G Squared in March. In September 2018, the company raised $250 million from investors including Baillie Gifford, Investment Corporation of Dubai, and the Alaska Permanent Fund.

In total, the company has raised $620 million. It was valued at $3.45 billion as of December 2018, according to PitchBook.


Grail - $3.87 billion

Since it got its start in 2016, Grail has raised more than $1.75 billion from the likes of Jeff Bezos and Bill Gates, along with big names from the pharmaceutical, tech, and healthcare industries, including Johnson & Johnson Innovation, Arch Venture Partners, Amazon, Bristol-Myers Squibb, Celgene, and Merck.

The idea behind its cancer-screening test is to identify the tiny bits of cancer DNA that are hanging out in our blood but are undetectable. If companies like Grail are successful, they would be the first to pull off a cancer-detecting blood test that works proactively.

The concept is similar to liquid biopsy tests, which use blood samples to sequence genetic information in that blood to figure out how tumors are responding to a certain cancer therapy. In 2017, Grail acquired Cirina, a Hong Kong company that is also looking at early cancer detection.

Earlier in December, the company raised an additional $125 million out of a $250 million offering, according to a filing with the Securities and Exchange Commission. The company has started presenting data, including some on early-stage lung-cancer detection, and plans to return results from its early-stage cancer-detection test in 2020

Ginkgo - $4 billion

Ginkgo Bioworks is a startup that designs microbes to produce substances like fragrances and medications. The Boston-based company sends the programmed bugs to partner companies that put them to use.

In September, Ginkgo raised an additional $290 million. In total, the company has raised $719 million and a $350 million fund to invest in spinout companies that use its technology

Intarcia Therapeutics — $4.1 billion

Intarcia Therapeutics, a Gates Foundation-backed biotech, is developing implantable devices intended to treat conditions like Type 2 diabetes and prevent HIV.

In September 2018, the FDA put the Boston-based company's plans for its diabetes implant on hold, citing manufacturing concerns. The company resubmitted the implant for approval in September.

In March, the company raised $73 million of convertible debt funding from undisclosed investors. To date, the company's raised $2 billion. 

Roivant - $7 billion

Roivant Sciences is a company known for developing drugs that other pharmaceutical companies have abandoned.

The company was founded by CEO Vivek Ramaswamy, who's 34. Through its subsidiary companies, it identifies experimental drugs that other companies may have stopped developing for one reason or another that still have potential to get approved and go on the market.

So far, it has launched 17 subsidiary "-vant" companies, including a number that have gone public. Those include the neurodegenerative-disease-drug developer Axovant Sciences, the women's health company Myovant Sciences, and the urology company Urovant Sciences.

In December, the company entered a deal with Sumitomo Dainippon Pharma. Before that, the company had raised $200 million from investors a little more than a year after raising $1.1 billion in a monster round led by SoftBank's Vision Fund. The $200 million round valued the company at $7 billion. 


Samumed - $12.4 billion

Samumed is the highest-valued startup on this list.

The San Diego-based company has attracted a total of $764 million and a heady valuation thanks to a pipeline of what could be revolutionary treatments to regenerate hair, skin, bones, and joints.

The company's science hinges on something called progenitor stem cells. Samumed hopes to manipulate the pathway that makes these progenitor stem cells spring into action so that they don't cause conditions like hair loss or osteoarthritis. 

The company had previously raised funding from backers including high-net worth people and sovereign funds rather than venture capital. Samumed's chief business officer, Erich Horsley, said in May 2018 that the company could go public in the next three to four years.

Read more about Samumed's progress with these treatments.

Categories: English

Boris Johnson has cancelled his planned trip to the White House after Trump slammed the phone down on him in a moment of 'apoplectic' fury

Fri, 02/14/2020 - 13:50

  • UK Prime Minister Boris Johnson has cancelled his planned trip to meet Donald Trump next month after a furious row between the two men.
  • Johnson had been due to visit Washington shortly after his election victory in December.
  • However, the visit has been repeatedly delayed amid a series of disagreements between the two leaders.
  • Trump slammed the phone down on Johnson last month after the prime minister defied him on the issue of Huawei's involvement in the UK.
  • Visit Business Insider's homepage for more stories.

UK Prime Minister Boris Johnson has cancelled his planned trip to the United States next month after a furious phone call from Donald Trump in which the president slammed down the phone on the prime minister.

Johnson had been due to visit Washington last month but repeatedly delayed the trip after a series of rows with the president over Iran, Huawei and a rejected bid by the prime minister to extradite the wife of a US diplomat.

The disagreements culminated in a furious phone call from the president last month after which he hung up on Johnson, according to officials with knowledge of the conversation.

Johnson has now cancelled his trip altogether according to the Sun Newspaper with Johnson now not planning to visit the country until the G7 summit in June.

Downing Street insisted on Thursday that Johnson would concentrate instead on his domestic agenda over the coming months.

"When the Eye of Sauron is off the Whitehall machine, things stop working," one source told the paper.

"That is why he has stripped down all his foreign travel this year to get his agenda done."

'Britain Trump' distances himself from the President

The prime minister had been one of Trump's few close international allies, with the president labelling Johnson "fantastic," a "good man" and "Britain Trump."

However, relations broke down in recent weeks following a series of high-profile threats from Trump and a series of pointed interventions against Trump by Johnson and senior members of his government.

President Donald Trump slammed the phone down on UK Prime Minister Boris Johnson last month after what officials described as an "apoplectic" call.

The call, which one source described to the Financial Times as "very difficult," came after Johnson defied Trump and allowed Chinese telecoms company Huawei the rights to develop the UK's 5G network.

Trump's fury was triggered by Johnson backing Huawei despite multiple threats by Trump and his allies that the United States would withdraw security co-operation with the UK if the deal went ahead.

Trump's threats reportedly "irritated" the UK government, with Johnson frustrated at the president's failure to suggest any alternatives to the deal.

Following the call, US Vice President Mike Pence said that the Trump administration had made its disappointment at the UK "very clear to them".

Join the conversation about this story »

NOW WATCH: Extremists turned a frog meme into a hate symbol, but Hong Kong protesters revived it as an emblem of hope

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Samsung's jailed board chairman has resigned

Fri, 02/14/2020 - 13:19

  • Samsung Electronics' board Chairman Lee Sang-hoon has resigned, the company announced on Friday.
  • Lee Sang-hoon was convicted of violating South Korean union labor laws in December 2019, and sentenced to 18 months in prison.
  • Samsung said it would pick a new chairman in the near future.
  • Visit Business Insider's homepage for more stories.

Samsung Electronics' board Chairman Lee Sang-hoon, who was convicted and jailed for sabotaging union activities, has resigned from the South Korean company, it said on Friday.

The resignation comes less than two years after Lee's appointment split the chairman and chief executive roles for the first time in an effort to enhance transparency and independence of the world's top memory chip manufacturer in the wake of a corruption scandal involving group heir Jay Y. Lee.

Lee Sang-hoon was convicted of violating union labor laws in December 2019, and sentenced to 18 months in jail.

"Samsung suffered a major setback to its bid to strengthen its board ... and it would need a fresh face to turn around," said Park Ju-gun, head of research firm CEO Score, adding that the move was widely expected given that Lee Sang-hoon is in prison.

Samsung said Lee's successor will be appointed in the near future and could be picked from remaining members of its board, which consists of six external directors and three internal executives. Those include the three CEOs of Samsung's components, mobiles and consumer electronics divisions.

The change at the top comes as Jay Y. Lee faces trial on charges that he bribed a friend of former president Park Geun-hye to win government favor over succession planning at the conglomerate, a scandal which led to the impeachment of Park Geun-hye.

Criticized by a judge overseeing Lee's bribery case for its lack of an effective compliance system, Samsung and some of its key affiliates have recently appointed external experts to a new oversight panel to stamp out criminal conduct.

Samsung's board chairman is not involved in day-to-day business operations but chairs a board meeting to review and approve major business decisions including investment plans.

The company is expected to hold a shareholder meeting in March.

SEE ALSO: Samsung's Galaxy S20 launch proves it's taking a wildly different approach to smartphones than Apple

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NOW WATCH: Watch Elon Musk unveil his latest plan for conquering Mars

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A large Swiss chocolatier that works with Hershey and Nestlé says it's rolling out 3D printed chocolate to the masses

Fri, 02/14/2020 - 13:00

  • The Swiss chocolatier Barry Callebaut says it will start rolling out 3D printed chocolate to hotels, coffee chains, and restaurants.
  • In a statement Friday, the company said it could produce 3D printed chocolate at scale through a newly created studio that it says is the world's first.
  • The company says the studio can print thousands of pieces at a time while maintaining a "bespoke, hand-made appearance." It says its service will initially be available in select European countries.
  • 3D printed chocolate has existed for years, but it's not yet become widely available as adequate tech has failed to materialize.
  • Visit Business Insider's homepage for more stories.

The elaborately designed chocolates you see at hotels, coffee chains, and restaurants may soon be coming from a 3D printer.

In a statement Friday, the Swiss chocolatier Barry Callebaut said it could produce 3D printed chocolate at scale through its newly created 3D printed chocolate studio, Mona Lisa, which it says is the world's first.

The company said the studio was capable of printing thousands of pieces at a time with a "bespoke, hand-made appearance." It added that the service would initially be available in select European countries.

The basic idea is that pastry chefs could come up with their own designs that could more easily be produced at scale with a 3D printer for use in hot drinks, pastries, candy, and other desserts.

Barry Callebaut's innovation head, Pablo Perversi, described the studio as a "technological breakthrough innovation that positions the Mona Lisa brand at the forefront of the industry."

Though Barry Callebaut isn't a household name, it exerts a major influence on the global chocolate business, making chocolate for brands like Nestlé, Unilever, and Hershey while its logo takes a back seat on the chocolate-bar wrappers.

It's also the inventor of "Ruby chocolate," a pink-hued alternative to milk, white, and dark chocolate.

3D printed chocolate has been around for years, but it's not yet become widely available as adequate tech for mass production has failed to materialize.

Cocoa itself has become more expensive in recent years, at least in Europe. In global terms, though, the industry's outlook is brighter. The London-based market-research firm Technavio estimates the global chocolate confectionery market size will grow by $19.97 billion from 2019 to 2023, driven by innovative approaches to attracting new customers from the major chocolate manufacturers.

SEE ALSO: These 3D printed homes can be built for less than $4,000 in just 24 hours

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NOW WATCH: Watch Google reveal the new Nest Mini, which is an updated Home Mini

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THE RISE OF CLOUD GAMING: Cloud-based streaming is the next frontier in the video gaming ecosystem — here's why cloud service providers and telecoms are vying to tap the multibillion-dollar opportunity

Fri, 02/14/2020 - 13:00

A disruptive competitive dynamic is poised to shake up the gaming industry, and it's centered on the cloud. Cloud-based streaming has generated significant buzz in the entertainment business throughout the last decade, rocking the media and music industries with the likes of Netflix and Spotify.

Now it's gaming's turn in the spotlight, with a number of cloud service providers and telecommunications companies revealing plans to enter the cloud gaming fray by launching their own services. These companies, each with unique advantages to disrupt the video gaming space, are largely driving the hype in the cloud gaming market.

Cloud gaming, by nature, is also enough to turn heads: It expands the audience for premium games beyond the current console and PC audience by making them accessible anywhere, at any time, and on any device. That huge addressable market is creating a lucrative and growing opportunity for companies gearing up to enter the space, providing a long runway for growth. 

A convergence of technological and consumer behavioral forces is pushing cloud gaming to move the needle in the gaming industry, something it's failed to do in the past decade. Cloud gaming depends heavily on the cloud and connectivity — areas of strength for cloud service providers and telecoms that are launching their own services.

And advancements in connectivity standards and hardware functionality, new benefits to the end user over traditional gaming experiences, and the ability to meet gamers' evolving tastes are playing — and will continue to play — a significant role in helping cloud gaming reach its full potential.

In The Rise of Cloud Gaming, Business Insider Intelligence takes a deep dive into the evolving cloud gaming market. The report sizes the cloud gaming opportunity and examines the various drivers and barriers, identifies the most noteworthy big tech companies and telecoms poised to dominate the space, and discusses the distinct strategies they're undertaking to capture a piece of the multibillion-dollar market. 

The companies mentioned in this report are: Amazon, Google, LG Uplus, Microsoft, Nintendo, Nvidia, Sony, Tencent, and Verizon. 

Here are some of the key takeaways from the report: 

  • Several significant changes in the decade-plus since cloud gaming's emergence have led the gaming format to move from a futuristic what-if to a massive opportunity for companies outside the traditional gaming space.
  • Cloud service providers and telecoms are investing in cloud gaming because their technological strengths are well suited to the new format and can help them corner off the immediately massive addressable market.
  • But nontraditional gaming companies will have to consider several factors — like identifying target audiences and building and maintaining appealing content libraries — before and after launching their cloud gaming offerings.

In full, the report: 

  • Examines how recent technological and consumer behavioral developments are playing — and will continue to play — a significant role in helping cloud gaming reach its potential.
  • Explores the disruptive class of companies whose unique advantages position them to capture a large share of the burgeoning market. 
  • Identifies several factors that may be most inhibitive to consumer adoption of cloud gaming, and how new entrants to the space can work to overcome them. 

Interested in getting the full report? Here's how to get access:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
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  4. Current subscribers can read the report here.

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Categories: English

The PlayStation 5 could cost as much as $470 as Sony reportedly struggles to keep the cost of parts down

Fri, 02/14/2020 - 12:49

  • Sony is struggling to keep the cost of manufacturing for its upcoming PlayStation 5 down, sources within the company told Bloomberg.
  • Specifically PlayStation is contending with a scarcity for parts also in demand from the smartphone industry.
  • PlayStation insiders said exactly where the company prices the PS5 will depend on where rival Microsoft prices its next-generation Xbox, the Xbox Series X.
  • Some PlayStation staff are recommending the company sell the console at a loss if necessary and rely on subscription services to bring in extra revenue.
  • Visit Business Insider's homepage for more stories.

Sony is struggling with growing manufacturing costs driving up the cost of its next-generation console the PlayStation 5, Bloomberg reports.

The PS5 is due to come out in the holiday season of next year, marking the next generation of console gaming alongside Microsoft's next-gen console the Xbox Series X.

Sources with knowledge of the matter told Bloomberg the PS5 currently costs $450 per unit — which would mean a minimum retail price of $470 to ensure a profit similar to that of PlayStation's current consoles. This would represent a significant jump in price for consumers. PlayStation's most expensive current console, the PlayStation Pro, has a retail price of $399.

Bloomberg's sources said the main problem is a scarcity of components for DRAM and NAND flash memory, as competition for supply from smartphone makers has risen as the phone industry gears up for its own next-generation devices. They added that Sony has opted for an unusually expensive cooling system to make sure the console's more powerful chips don't overheat.

A big factor in exactly where Sony puts its price-point for the PS5 will be how much Microsoft decides to sell its Xbox Series X for, sources inside PlayStation's business unit said. Bloomberg reports that some PlayStation staff think the company should sell the PS5 at a loss if necessary to compete with Microsoft, relying on subscription services like PlayStation Now for extra revenue, while others are arguing the machines themselves will have to sell at a profit.

Sony declined to comment when contacted by Bloomberg, and was not immediately available for comment when contacted by Business Insider.

SEE ALSO: The 10 most important details we already know about PlayStation 5, Sony's next-generation video game console arriving this year

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NOW WATCH: 8 weird robots NASA wants to send to space

Categories: English

Facebook quietly released a Pinterest clone and sent its stock sliding down

Fri, 02/14/2020 - 11:58

  • Facebook has quietly launched a Pinterest competitor in a handful of countries, the Information reported Thursday.
  • Pinterest's stock slid 4% after news of the Facebook clone broke.
  • Facebook has been known to copy smaller apps' popular features in the past, most famously Snapchat's "Stories" feature.
  • Visit Business Insider's homepage for more stories.

Pinterest may have to prepare for a turf war with Facebook.

As spotted by the Information on Thursday, Facebook has rolled out a new app called "Hobbi" in just four countries: Colombia, Belgium, Spain, and the Ukraine.

Hobbi bears a striking resemblance to Pinterest, allowing users to catalogue and share photos of projects and interests.

After news of Hobbi broke on Thursday the company's shares slid by 4%, although they partially recovered according to CNBC.

In the past, Facebook famously cloned Snapchat's distinctive "Stories" feature — originally for a standalone product, although Stories later got folded into Facebook's other platforms. Stories on Facebook, Instagram, and WhatsApp became so popular that last year it accrued more than twice the amount of users as Snapchat.

Not all of Facebook's clones have been successes. The social media giant has made two attempts to ape TikTok, the buzzy video-sharing app favored by Generation Z. Facebook launched a TikTok competitor app called Lasso in 2018, and in late 2019 it started testing a feature in Instagram called "Reels." Neither have made a dent in TikTok's popularity.

A Pinterest spokesperson told CNBC the company didn't feel threatened by Hobbi: "Upon first look, Hobbi appears to be a photo saving app that lacks the discoverability, search, and recommendations of Pinterest. As described in the App Store, it's meant to help you document and remember the things you do, which is about the past, while Pinterest is about discovering ideas and inspiring action for the future."

Facebook has rolled out Hobbi just as Pinterest is starting pick up some serious momentum. Founded in 2010, Pinterest went public in April last year with a healthy valuation of $10 billion, and last year surpassed Snapchat to become the third-largest social media network in the US.

SEE ALSO: Some top Pinterest influencers say they still earn more money on Instagram, where they have vastly fewer followers

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Categories: English

'Almost a mass psychosis': Tesla's 250% stock rally makes no sense, Bob Lutz says

Fri, 02/14/2020 - 09:55

  • Bob Lutz can't explain why Tesla stock has rocketed more than 250% in six months.
  • The former GM, Ford, and Chrysler executive said on the BBC Business Daily podcast this week that Goldman Sachs analysts are asking him if he has "any idea what the heck is going on."
  • "Nobody can explain it," Lutz said. "It's driven purely by psychology or almost a mass psychosis."
  • Lutz also downplayed the growth prospects of electric vehicles, arguing they'll only make up 15% of global car sales in 2030.
  • Visit Business Insider's homepage for more stories.

Bob Lutz has no idea why Tesla stock has rocketed more than 250% in six months.

Neither do Wall Street's brightest minds, the auto-industry veteran — who sat on the boards of Ford, Chrysler, and General Motors during his career — said on the BBC Business Daily podcast this week.

"I talked to people at Goldman Sachs, who are usually the world's greatest experts on explaining stock prices, and they're now asking me whether I have any idea what the heck is going on with Tesla stock," he said.

"Nobody can explain it, it's so far beyond any fundamental return that any shareholder could ever expect."

Elon Musk's electric-car startup currently boasts a market capitalization of $145 billion — dwarfing Ford, Chrysler, and GM's combined market cap of $103 billion. Tesla stock is no longer tethered to anything tangible, Lutz argued.

"It's driven purely by psychology or almost a mass psychosis," he said, warning the rally won't last. "Ultimately, the share price responds to financial fundamental reality, and that day will come."

An overstated growth opportunity

Lutz downplayed the market opportunity for electric vehicles in the interview. The shift from conventional to electric cars is "somewhat of a fiction," he said, as global demand for them is largely fueled by government subsidies.

Electric vehicles are expensive and unprofitable to produce, Lutz added, and inconvenient to use due to their long charging times. As a result, he expects them to only account for 15% of the global auto market by 2030.

Despite his bearish view on Tesla's industry, Lutz praised the automaker's products. "There's nothing wrong with the car," he said. "It is one of the best-driving, best-performing, best-looking premium sedans in the world."

Fund managers, short-sellers, and even politicians sounded the alarm on Tesla last week after its shares soared by a third in two days. "Watch out Tesla believers," former presidential candidate Ralph Nader tweeted.

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NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption

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10 things in tech you need to know today

Fri, 02/14/2020 - 08:37

Good morning! This is the tech news you need to know this Friday.

  1. The US government has filed racketeering charges against Huawei and its CFO, accusing the Chinese telecom giant of conspiring to steal trade secrets from 6 tech companies. The latest indictment includes information alleging Huawei tried to steal trade secrets from six different US technology companies.
  2. Alibaba has pledged $140 million to fight the coronavirus outbreak with a platform to coordinate deliveries of crucial medical supplies. China's 70,000 theaters are closed in response to the Wuhan coronavirus, which could have negative implications for "Mulan."
  3. The SEC is looking into Tesla's finances. Tesla did not specify the kinds of data and financial arrangements the SEC has asked for information about.
  4. WhatsApp seized on US allegations against Huawei to defend encryption against the government's demands for backdoors. WhatsApp and its parent company Facebook have been fighting off US demands to build methods for law enforcement to infiltrate encrypted messaging.
  5. A leaked copy of Tesla's employee handbook reveals exactly how it expects workers to push boundaries and help the company succeed. "Your good ideas mean nothing if you keep them to yourself," says Tesla's employee handbook, called "The Anti-Handbook Handbook."
  6. Amazon's annual filing reveals it loaded up on private-company stock while scaling back acquisitions last year — a change that may help as regulators crack down on the tech giant. Amazon has resorted to buying partial stakes of other companies, instead of fully acquiring them, amid growing regulatory pressure, filings show.
  7. Oracle says a Google victory in their Supreme Court battle over Java would hurt small US tech companies. Oracle said Google committed "an egregious act of plagiarism" and warned that a Google victory at the Supreme Court would hurt US tech companies.
  8. A former Waymo driver has been accused of intentionally causing a collision with one of the company's self-driving vans. Waymo called the former driver "disgruntled." Tempe police said he "targeted" two Waymo autonomous vehicles. 
  9. Microsoft saw $17 billion of its market value erased in just 5 minutes after a judge granted Amazon's request to block a key cloud contract. Microsoft won the contract over Amazon last year in a surprise upset, but Jeff Bezos and Co. are making life difficult.
  10. Warren Buffett's right-hand has trashed the metric Uber is using for its ambitious plan to be profitable by the end of 2020. "I don't like when investment bankers talk about EBITDA, which I call bulls--- earnings," Charlie Munger said.

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'How do Amazon pre-orders work?': How to pre-order applicable items on Amazon

Fri, 02/14/2020 - 05:22

  • You can easily pre-order items on Amazon, allowing you to order not-yet-released items in advance.
  • A pre-ordered item will ship either when it's released or just in advance of its release, and your card will typically not be charged until the item has shipped or a few days beforehand.
  • The checkout process looks the same as a regular Amazon order, and you'll receive email updates and can check your order's progress at any time.
  • Visit Business Insider's homepage for more stories.

Whether you're waiting on a new book release or for a popular item to be restocked, Amazon's pre-order process is easy.

The checkout process looks the same as a regular Amazon order, and you'll receive email updates. Additionally, you can check your order's progress at any time.

Here's a bit more about the process, along with how to pre-order.

Check out the products mentioned in this article: MacBook Pro (From $1,299.99 at Best Buy) Lenovo IdeaPad 130 (From $299.99 at Best Buy) iPhone 11 (From $699.99 at Best Buy) Samsung Galaxy S10 (From $899.99 at Best Buy) How Amazon pre-orders work

When you pre-order a not-yet-released item on Amazon, you will not be charged immediately — instead, the card on file will be charged a few days before the item is released, typically when it ships or a few days prior to its shipping, depending on the item. 

Amazon guarantees the lowest price — should prices change between placing your order and the release date — as long as the item has been labeled with "Pre-order Price Guarantee."

The process to pre-order looks extremely similar to placing a regular order. Additionally, you may receive email updates if the release date changes — and if this happens, you'll have the option to manage or cancel your order.

How to pre-order an item on Amazon

1. Open the Amazon website on your Mac or PC, or the mobile app on iPhone or Android.

2. Search for the item you wish to pre-order in the top search bar.

3. If it's a yet-to-be-released item, you'll find it says "Pre-order" in the "Add to Cart" button. You should also see its expected released date written above in green. Click the appropriate button to add the item to your cart. 

4. If you choose to add the item to your cart, you'll be greeted with a message confirming the decision and listing your subtotal. Click on the yellow "Proceed to checkout" button to continue. 

5. Complete the checkout process like you normally would, including selecting the correct address and credit card information. 

6. Click "Place your order" when you're ready.

7. To check your order status, click "Returns & Orders" in the top toolbar. You can also click on your account information and navigate to the page from there.

8. Scroll down until you find your pre-ordered item. Click on the yellow "Track package" button to double-check the release date and track your package once it's shipped.

You may receive email updates if the release date changes. You will have the option to cancel your order if this happens. 

Your card on file will be charged a few days before the item ships. If the item has a price guarantee, you will be charged the lowest price listed on Amazon between your order date and the release date.


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How to follow people on Apple Music and set up your profile for it

Fri, 02/14/2020 - 05:06

  • You can easily follow people on Apple Music by searching for them on your profile page.
  • If you've never set up your public profile before, you can also add or invite friends from your contacts directly from the startup menu.
  • Following a person on Apple Music will allow you to see what they are listening to, along with recent songs and albums they've added.
  • Visit Business Insider's homepage for more stories.

It's easy to find and follow people in the Apple Music app — whether it's friends, family, or coworkers.

While Apple Music used to allow users to follow artists as well, it removed the feature in 2018. However, you can still follow friends to see what others are listening to — similar to Spotify.

To do so, you'll just have to set up an account. If you've already done so, you can easily add people by accessing your account details in the "For You" tab at any time.

Here's how to follow people on Apple Music on your mobile app. 

Check out the products mentioned in this story:  iPhone 11 (From $699.99 at Best Buy) How to follow people on Apple Music if you've never set up your profile

1. Open the Apple Music app on your mobile device.

2. Tap on the "For You" tab underneath the heart icon at the bottom of the screen.

3. Tap on the profile icon in the upper right hand corner of the page. If you haven't set up an account yet, it will appear as a person icon (as opposed to a profile photo or your initials).

4. Tap "See what Friends Are Listening To." to set up your profile.

5. Tap the pink "Get Started" button to begin.

6. Personalize your name, username, and add a profile photo if you'd like by clicking on the appropriate entries.

7. Tap the pink "Continue to Find Contacts" button when you're ready to move on.

8. Tap to follow any of your contacts who are currently sharing music. This will change the pink "Follow" button to a gray "Following" button.

You also have the option to connect to Facebook at the top to view your Facebook friend's profiles. Additionally, if you scroll down, you can invite contacts from your phone who use Apple Music but don't currently have accounts set up. 

9. Tap "Next."

10. Specify your notification settings for friend activity and new shows. Switch toggles from green to gray to turn on or off. 

11. Tap "Done" to complete the process.

How to follow people on Apple Music once you've already set up your account

1. Open the Apple Music app on your device.

2. Tap on the "For You" tab underneath the heart icon at the bottom of the screen. 

3. Tap on the profile icon in the upper right hand corner of the page. If you've already set up your account, your initials or profile picture will appear in a circle.

4. Click "View Profile" at the top.

5. Scroll down to the bottom to see who you are currently following.

6. Tap "Follow More Friends" to reopen the contacts page.

7. Click to follow any of your contacts who are currently sharing music. This will change the pink "Follow" button to a gray "Following" button. You also have the option to connect to Facebook at the top to view your Facebook friend's profiles or invite contacts from your phone who use Apple Music but don't currently have accounts set up.


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T. Rowe Price calls WeWork a 'terrible investment' (TROW)

Fri, 02/14/2020 - 05:00

  • In an unusually frank letter, fund managers at T. Rowe Price derided WeWork as a "terrible investment."
  • T. Rowe Price led WeWork's Series D financing round in 2014, which valued the company at $4.65 billion.
  • The fund managers said they invested with the understanding that WeWork would curb its losses and growth, but that didn't happen.
  • WeWork failed to go public last year and nearly went bankrupt instead, sending its valuation plummeting in the process.
  • Visit Business Insider's homepage for more stories.

When it comes to investing in WeWork, you could say that T. Rowe Price's investment team has some regrets.

In their letter to shareholders in the annual report of the firm's Mid-Cap Growth Portfolio, Brian W.H. Berghuis, chairman of the fund's investment advisory committee, and John F. Wakeman, the portfolio's executive vice president, said that the portfolios' stake in the commercial real-estate startup had brought them "outsized headaches and disappointments." The investment, which the portfolio made in 2014, was done with the understanding that WeWork would moderate its rapid growth and improve its bottom line, they said. Though the company took steps in that direction soon after T. Rowe Price's investment, it soon went back to its big spending ways, they said.

WeWork's profligacy eventually caught up with it. Its attempt at a public offering last summer collapsed in the face of investor concerns about its massive losses. After its IPO failed, its valuation collapsed from $47 billion to less than $8 billion, and it nearly went bankrupt before SoftBank bailed it out. The end result of all that was that T. Rowe's remaining stake in the company is now worth much less than what it once was, Berghuis and Wakeman said in the letter.

"While it's possible that WeWork's new management will improve operations somewhat, we are ready to declare this a terrible investment," they said.

The letter was an unusually frank assessment from a high-profile investor. T. Rowe Price led WeWork's Series D Round, in which the company raised $355 million at a valuation of $4.65 billion, according to PitchBook.

Berghuis, Wakeman, and their team have had misgivings about their WeWork investment for years now, particularly with regards to the company's corporate governance and the trustworthiness of its former CEO, Adam Neumann. Neumann at one point had iron-clad control over the company with 20 votes for each share he held and was the target of criticism for numerous personal transactions he engaged in with the company.

Adam Neumann promised WeWork would be profitable

The T. Rowe team was particularly incensed about the company's ever growing losses.

Neumann "promised profitability was just over the horizon," they said in the letter. "We did not take him at his word, and we communicated to WeWork's management and board our displeasure with its eroding corporate governance."

T. Rowe sold off a total of 16% of its stake in WeWork — recouping about half of its initial investment — in private transactions in 2017 and 2019, they said. They planned to sell off their remaining stake last year, but WeWork's management, which had veto power over the transaction, blocked the deal.

"It is clear that we misread the motivations of WeWork's management and our investment partners," Berghuis and Wakeman said in their letter.

Mutual fund companies have increasingly been investing in private startups, in part because companies are delaying going public until later in their lifespans, if they go public at all. Some policy makers and many in the finance industry have been pushing to make it easier for everyday investors and investment vehicles, such as mutual funds, to buy into startups. But some consumer advocates have raised concerns about that notion, because of the limited amount of financial information that private companies make public and the high risk of failure of such companies.

In their letter, Berghuis and Wakeman defended their portfolio's investment in private companies, arguing that their strategy shouldn't judged based on what happened with WeWork. The combined value of the portfolio's private investments comprised only 0.58% of its total worth, they said. Many of those investments have delivered good returns, and they provide insights into how industries are changing and future competition to the portfolio's public investments, they said.

"In short, we believe the WeWork debacle was an error in judgment, not in process," they said.

Got a tip about WeWork? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Adam Neumann personally invested tens of millions in startups while he ran WeWork. Founders who took his money reveal what it was like.

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'What is Amazon Pantry?': Here's what you need to know about Amazon's delivery service for groceries and household items

Fri, 02/14/2020 - 04:53

  • Amazon Pantry is Amazon's delivery service for groceries and other household items.
  • You can sign up for Amazon Pantry without being an Amazon Prime member.
  • Amazon Pantry, however, is only available to users in select regions.
  • To find out if it is available in your region, first go to your Amazon account.
  • Visit Business Insider's homepage for more stories.

Amazon Pantry is a feature of online shopping behemoth Amazon, where customers can order "everyday package sizes" of their favorite grocery items — like a single box of banana bread mix or two cans of soup, as well as household items like paper towels and trash bags. 

Think of Amazon Pantry as a way to conveniently get all of your dry goods and cleaning supplies. For example, you can't order a gallon of milk, but you can order condensed milk or boxed almond milk. 

You don't have to be an Amazon Prime member to use Amazon Pantry either, but Prime members do get free shipping — Amazon Pantry has a flat $5.99 shipping fee for non-Prime members. 

With Amazon Pantry, the more you order, the better the discount you get. When you order five items using Amazon Pantry, you get 5% off your order. Most orders arrive within four business days. 

Finally, Amazon Pantry is only available in a few select regions, which, however, are not explicitly stated. You may have to wait until checkout to see if Amazon Pantry is available in your city. Pantry items cannot be sent to P.O. Box addresses, Amazon Lockers, or states outside of the "contiguous United States" (Hawaii and Alaska). 

Check out the products mentioned in this article: MacBook Pro (From $1,299.99 at Best Buy) Lenovo IdeaPad 130 (From $299.99 at Best Buy) How to order on Amazon Pantry

1. First go to and log in to your account on your PC or Mac computer. 

2. Once logged in, click the grey box to the left of the search bar at the top of your screen. Scroll down and click "Prime Pantry."

3. Next, type in the item you are looking for and hit the enter key on your keyboard. If you'd like to browse all items available in Prime Pantry instead, navigate to:  

4. Toggle through the list of items, and then click the yellow "Add to Cart" button. To save 5% on your order, make sure to add at least five Pantry items to your cart. 

5. To purchase the Pantry items in your cart, click "Proceed to checkout" in the right hand corner, and follow the steps to checkout.


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How to find your Microsoft Edge browser's version number, or update to the latest version

Fri, 02/14/2020 - 04:24

  • You can find Microsoft Edge's version number by heading to the "About Microsoft Edge" page.
  • Going to the "About Microsoft Edge" page will also tell you if the version you have is the newest, or if there's an update ready.
  • Visit Business Insider's homepage for more.

It's good to know which version of Microsoft Edge you currently have when troubleshooting computer issues, or installing browser extensions.

It's also a good idea to know which Microsoft Edge version is the newest, so you can always stay up-to-date.

Luckily, you can check your browser's version — as well as update it — with just a few clicks. And the way to do this is the same on both a PC and Mac.

Here's how to do it.

Check out the products mentioned in this article: MacBook Pro (From $1,299.99 at Best Buy) Lenovo IdeaPad 130 (From $299.99 at Best Buy) How to find your Microsoft Edge version number

1. Open the Microsoft Edge browser on your Mac or PC and click the three dots at the top-right of the browser window.

2. In the menu that appears, click "Help and Feedback."

3. Click "About Microsoft Edge." 

The browser will begin checking for software updates, and then display the current installed version.

Edge will also tell you if the version you have installed is the latest version. A checkmark icon will appear to the left of the browser version if yours is up-to-date.

If it's outdated, you'll be prompted to update Microsoft Edge.


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