Category: Tech news

The White House has officially threatened to veto the controversial Cyber Intelligence Sharing and Protection Act (CISPA) [PDF]. CISPA is designed to facilitate information sharing between technology companies and intelligence agencies, but civil liberties groups worry it creates overly broad powers to spy on Americans.

A White House Memo makes it clear why they are opposing the legislation in its current form:

“The Administration believes that carefully updating laws to facilitate cybersecurity information sharing is one of several legislative changes essential to protect individuals’ privacy and improve the Nation’s cybersecurity. While there is bipartisan consensus on the need for such legislation, it should adhere to the following priorities: (1) carefully safeguard privacy and civil liberties; (2) preserve the long-standing, respective roles and missions of civilian and intelligence agencies; and (3) provide for appropriate sharing with targeted liability protections.”

Noting, importantly, that “However, the Administration still seeks
additional improvements and if the bill, as currently crafted, were presented to the President, his
senior advisors would recommend that he veto the bill.” (White House’s emphasis)

Congressional staffers tell TechCrunch that CISPA is expected to come to a vote this Thursday, after debate tomorrow. There has been noticeable tension between civil liberties groups and the big Internet companies, such as Facebook and Google, who have not actively opposed the bill (Facebook, at one point, supported it).

This veto threat is definitely a win for civil liberties groups.

-[Hat tip: Brandan Sasso]

WebRTC allows developers to add real-time voice calls, video chats and file sharing to their web apps without the need for plug-ins. Chrome and Firefox now support this proposed standard, and there is a good chance others will follow suit at some point. Given the experimental nature of WebRTC and some of its implementations, though, most Internet users haven’t actually seen it in action, and getting it to run on your own site still takes quite a bit of work despite projects like Conversat.io and others.

If you would like to give WebRTC a try and embed a WebRTC-based video chat widget on your own site, the developers over at the Boston-based UI and UX design firm Fresh Tilled Soil just launched an embeddable WebRTC-based video chat widget that you can use.

Our WordPress setup sadly doesn’t want to embed the widget correctly, but head over here and give it a try.

Just like most similar projects, all you have to do is decide on a channel name, share it with a friend and you should be up and running a few seconds later.

That is, of course, if you are using a compatible browser. For now, you need to use the latest stable version of Chrome on the desktop or Chrome Beta on Android – support for Firefox is coming very soon. Because WebRTC sets up a peer-to-peer connection, the host only handles the initial handshake, so the server load is very low.

This WebRTC experiment is the latest in a series of tests Fresh Tilled Soil has recently launched, by the way, including some that make use of the new WebAudioAPI for audio processing and Media Capture and Streams for audio input. Fresh Tilled Soil also produces this cool little experiment that uses your webcam to adjust the font size based on your distance to your screen.

Yahoo just released its earnings report for the first quarter of 2013, with better-than-expected (non-GAAP) earnings of $420 million, or 38 cents per share. Revenue (excluding traffic acquisition costs) was flat compared to last year, at $1.07 billion.

Analysts has predicted that the company would report revenue of $1.1 billion and 24 cents EPS. Wall Street normally evaluates Yahoo on an ex-TAC basis — including traffic acquisition costs, revenue was $1.14 billion, down 7 percent from last year.

Ex-TAC, search revenue has actually overtaken display ad revenue. Display revenue was $402 million (down 11 percent from last year), while search revenue was $409 million (up 6 percent).

This is Marissa Mayer’s third quarter as CEO of the company — her leadership is seen as crucial for turning the company around. During the last earnings call, Mayer said her big goals for Yahoo included a better user interface, improved international reach, and broader demographics.

“I’m pleased with Yahoo!’s performance in the first quarter,” Mayer said in the earnings release. “We saw continued stability in our business, strengthened our team, and started the year with fast execution against our products and partnerships. We are moving quickly to roll out beautifully designed, more intuitive experiences for our users. I’m confident that the improvements we’re making to our products will set up the Company for long-term growth.”

Yahoo had a pretty active quarter. It unveiled a more personal, interactive version of its homepage in February. On the advertising front, it announced a non-exclusive display partnership with Google. And it acquired Snip.it, Alike, Jybe, and made its biggest splash by announcing the acquisition of mobile news startup Summly for a reported $30 million.

Intel’s fiscal Q1 earnings are out today, and the company reported profit and earnings at expectations on revenue with $12.6 billion for the quarter, and below on earnings per share at $0.40, according to Bloomberg’s analyst consensus. Revenue was down from Q1 2012, as were earnings per share, as the chip-making giant continues to weather the storm of a declining PC market.

PC sales for the beginning of the year were reportedly steep, according to research firm IDC, with Windows 8 taking blame for the decline. IDC found that overall, sales were down 13.9 percent for PCs, a category which excludes tablets and notebooks with removable keyboards. Even if you count those in, the news still wouldn’t be great for Intel, which continues to struggle with making any real headway in the mobile processor market. The PC group’s revenue alone totaled only $8 billion, down nearly 6 percent year over year. Intel said in a statement from the CFO’s office that the sequential decline in overall revenue of 7 percent was in line with what they’d expect to see coming out of a holiday season.

Intel CEO Paul Otellini is leaving the company after eight years leading the company in May. Otellini announced that he’d be leaving Intel late last year, giving the company ample time to plan for and put in place succession arrangements. Otellini has been vocal about Intel’s work on “reinventing the PC” as it continues to face challenging market conditions and try to overcome them.

This definitely wasn’t a great quarter for Intel, and that means the incoming CEO will have a lot of expectations to live up, in a very challenging market environment. Intel’s roadmap includes big plans for mobile, like the Bay Trail 22nm design with native quad core processing built in, slated to arrive by the end of this year. It’s going to power budget, convertible PC designs, Intel says, which might inject some fresh life in the sluggish PC market, though we’ve yet to see any real promising indication that Microsoft’s efforts along those lines with the Surface RT are paying any big dividends – in fact, quite the opposite.

Intel spent over $10 billion on research and development in 2012, up $2 billion from the previous year, as Intel said it was investing heavily in mobile, tablets, ultrabooks and server technologies. The company is clearly spending big to try to make sure it can shore up divisions that are stronger than those serving the PC industry. The company’s shares are down slightly, but nearly flat in aftermarket trading.

We’ll be listening in on the conference call and will update here if the company reveals anything interesting about its plans for turning things around, or about a potential replacement for Otellini, but the official release says the board is still working to choose a successor.

The TechCrunch SF staff normally goes to your parties, but tonight you can come to ours. And this one has a mission beyond drinking and tech talk — we’ll be donating the proceeds to a nonprofit, like we’ve done in the past. This time to Teach for America.

Teach For America trains and places recent college grads and professionals in low-income schools. Programs like this can give students the exposure and mentorship they need to develop the skills required for rigorous work in the tech industry, like coding for example.

The venue is at the Temple night club on Howard Street. So come hang out with us tonight — and support teachers — by purchasing tickets for $15.

The party is not open bar, but if you have a problem with that, ask Alexia or Eldon to buy you a drink. Because, charity. All the proceeds will go to Team TechCrunch’s fund on Causes and help us continue to kick Path’s ass.

TechCrunch, fuck yeah.

[Facebook Event page]

Editor’s note: Tadhg Kelly is a veteran game designer, creator of leading game design blog What Games Are and creative director of Jawfish Games. You can follow him on Twitter here.

There’s a reason why games and organized crime have often gone hand in hand. The thrill of the win, of achieving – often with money attached – has long proved a lure that society felt the need to control, like a drug. Games of chance, Poker, horse racing, sports betting and many others brought quixotic pleasures to many and bankruptcy (or worse) to some. There was always money to be made in the shadows for those happy to work in them.

That shady aspect still exists in the games industry today. While there are some highly ethical game makers out there who conduct their business in a manner befitting their ideals, there are also plenty who dupe and deceive to profit from an audience. Some are merely morally gray, maintaining that since games are a tough market and the cost of user acquisition is high, they have to be scrappy. Even if they don’t personally like it, it’s just how life is.

But beyond that typical red-ocean thinking, you can always rely on some developer or publisher to eventually take things too far. Like water flowing into every nook and cranny of a given platform, some will use their powers for good while others will figure out how to use a game as a form of arbitrage to extract as much value as possible. And you may say “well that’s business”, which it sometimes is. Yet shady actions can have far wider impact across the industry than is generally realized.

Take, for example, the practice of selling virtual goods in children’s games. Free-to-play games are very popular across all segments of the market, but the ability to sell items from within a game has the potential to deceive. While the notion of permitting players to financially participate as much as they want to is neat, many don’t fully realize what that means. Parents in particular are often unaware that their children know their iTunes passwords until big bills caused by their little angels buying $1000 worth of virtual game goods surface. And good luck getting a refund.

Because of course there are shady game makers out there who think it’s okay to put a $99 item in a game aimed at nine year olds. Of course they have an entirely self-reinforcing rationale for why this is permissible. Of course they use words like “choice” and “parental responsibility” to justify their actions. And yet they come across as weasels. In fact they ARE weasels. When this sort of nonsense goes on long enough, outsiders start to step in.

Government agencies like the UK’s Office of Fair Trading are starting to take a strong interest in free-to-play games. The OFT is an official consumer advocate group whose judgements can be far-reaching, and their recommendations often form the basis of legislation designed to clean up particularly egregious industries. This may serve as a wake-up call for the industry to self-regulate before regulation comes a-calling, or it may just be the tip of the iceberg. If, for example, the United States’ Department of Justice decides to do likewise, who knows how far that could go.

The problem for most of us who make games is that shady tactics tend to poison the well. The difference between the ideal of Facebook games (play together) and the practice (notify and spam repeatedly) is why social games stalled, for example. What could have been the most amazing platform change in gaming in a generation instead became a haven for sleazy lowball tactics designed to make a quick buck or an exit sale. Facebook’s early (and continuing) mistake lay in not taking an active-enough hand in managing their platform, preferring to let evolution sort it out.

The sale of crappy gamification “solutions” is another example. Through the work of writers like Sebastian Deterding, gamification has developed into a very interesting idea (with a variety of caveats, which I have written about before). Yet, regardless of where you stand on it, gamification has started to invert in large part because of the revelation that it mostly doesn’t work. There are many shady companies out there offering solutions that are little more than packs of GIFs and experience point tables, and of course that sours companies on trying gamification more than once.

It’s for reasons like these that I tend to strongly support Apple’s firm stance in governing the App Store. To some writers (like my Twitter buddy Keith Andrew at Pocketgamer), Apple’s control is only about maintaining profits and an iron-like grip on its customers, but I think there’s more to it than that. Apple takes an active hand in surfacing interesting apps because that’s important for the life of its platform, for the perception among users that iOS is where you go to find all the good stuff. The good stuff often needs a helping hand in the face of legions of developers hawking identical software with large advertising budgets.

Apple also bans or forbids certain apps on the basis of not wanting to dilute that conversation. Apps are not permitted to look like app stores, for example, or to use push notifications to advertise. Apps are not permitted to use incentivized installs. Apps are not permitted to deceive, in other words, or at the very least this is strong discouraged. And Apple seems as though it’s about to crack down on a number of apps that have been treading softly in these areas without directly violating them.

Apple seemed to realize early that shadiness would be problem that had to be curtailed or else the platform itself would be under threat. The risk to iOS of allowing it to be gamed or balkanized – as Facebook had – may not have been plainly apparent at the time, but in retrospect very much so. This is why the AppGratis-es of this world are heavily monitored. AppGratis appears to be just a typical example of needing to reign in wayward practices that would otherwise lead to bad places. Strong rules and enforcement is why iOS remains a vital development platform, and the one that users trust most. But of course, there are side effects.

Chief among them is censorship. As a medium, gaming is trying to come out of its teenage years and stop being regarded as mere entertainment. Some game makers want to feel that they stand shoulder to shoulder with writers, moviemakers and musicians in being regarded as artists, but regulation gets in the way.

In the old days it used to much worse. If you wanted to make games on a non-PC platform, such as a console, you had to factor in the risk that the platform might say no. The platform’s owners might not have even allowed you to have a dev kit to try unless your proposed game fit with their content strategy and guidelines.

These days platforms rarely exercise that kind of power and game making has become much more democratic, but there’s still a ways to go. Games like Sweatshop are banned according to content guidelines that would be considered unthinkable in book or music markets. The burgeoning zinester movement (artists who create games and related interactive art to explore a variety of issues) feels unwelcome and unlikely to become an Editor’s Choice because their work is not exactly PG13.

Unfortunately, like the Mob, shady game makers always be with us. There will always be someone who regards platforms like iOS as an opportunity to scavenge. There will always be someone who looks for the breaks, the wedges and the opportunity to behave like sharks. And they will always have a mealy mouthed rationale to justify their actions. None of us wants more censorship, or for games to be regulated to death. Most of us want the medium to thrive and grow and become as fully expressive. So as an industry it behoves us to establish codes of practice and police ourselves. Otherwise someone else will eventually do it for us.

The weekend is finally here, and so is another episode of CrunchWeek, the TechCrunch TV show where a few of us writers sit down for some real talk about the stories that dominated the tech world over the past seven days.

This time, Leena Rao, Anthony Ha and I talked about the relentless (and tumultuous) rise of the Bitcoin, Foursquare finally closing on the funding round we’d been hearing about with its $41 million convertible debt raise, and three superpower VCs teaming up to launch the Glass Collective (and that amazing photo that came along with it.)

Hip online eyewear startup Warby Parker has, over the last two years, been partnering with boutiques to open “stores-within-stores,” or small Warby Parker showrooms, where customers could try on their eyeglasses in 3-D. These showrooms popped up in L.A., Nashville, San Francisco and many others. Today Warby Parker officially announced its first, flagship retail store in SoHo in New York City.

As e-commerce has matured, some of its younger companies have begun to turn to more traditional forms of advertising. One Kings Lane, Gilt Groupe, Beachmint, Fab and Wayfair are just a few of the boutique online brands to launch ad campaigns on TV in the last six months in an effort to drive viewers to mobile apps and sites.

Now, if Warby Parker is any indication, e-commerce companies may continue to expand their businesses by moving offline and building their own brick-and-mortar retail outlets. Amazon CEO Jeff Bezos has expressed interest before, while 9to5Google reports that Google is looking to open retail stores in time for the holidays. Warby Parker doesn’t quite have that kind of market cap, but clearly it wants to go head-to-head with the biggest offline retailers.

Interestingly, Warby Parker was founded in part because (at the time) less than 1 percent of eyewear was sold online, so the startup hoped to take on the bigs like Luxottica — which owns the seemingly ubiquitous LensCrafters, Ray-Ban, Sunglass Hut and Oakley, among others — by creating a strong, fashion-conscious brand and selling online at a lower price and better margins. It worked, and the startup made a name for itself, and started to catch the attention of consumers and investors.

Warby closed a $41.5 million investment at the end of February, led in part by J. Crew CEO Millard S. Drexler (who was formerly CEO of Gap and currently has an awesome name) and American Express, along with a host of VCs. With heavy backing from the retail world, and a growing number of showrooms, the company is now experimenting more aggressively with its offline push. But it’s trying to transfer the same academic aesthetic/brand offline while keeping a little bit of the tech.

Its new flagship store in NYC is designed to look like a classic, old library — the New York Public Library, really — with brass library lamps, rolling ladders and musty books. The whole deal. In a way, it feels a little pretentious, but it’s also awesome and makes sense given the product; you use your glasses to read, nerd — sometimes even things besides the Internet.

And in fact, it’s almost the opposite. Rather than keep its eyewear behind glass, the startup’s new store leaves its glasses out in the open to be taken for a test drive. The store also includes an in-house optometrist for on-hand, $50 eye exams offered seven days a week. Non-prescription glasses will be sold for take-away, and customers can choose to receive products by mail or to pick them up at the store.

That might seem like superfluous information for those not living in the five boroughs, but it appears that the startup is already taking its brick-and-mortar retail strategy beyond NYC. As Boston Business Journal recently reported, Warby has listed a job posting for a “store leader” in Beantown, seeking someone with “sales management experience with a customer-focused, operationally excellent retailer … to build a team of exceptional team members.” And they’re also hiring an in-store optician. You don’t have to live at 221B Baker Street to put those pieces together, amirite?

But the other key to Warby Parker’s new offline strategy, as Om describes in his coverage today, is that the company wants to bring more tech into the offline world by wiring its stores to collect data. Using Wi-Fi, sensors, etc., it wants to get a better understanding of how people shop, what the trends are both in terms of in-store flow and customer design and product preferences, for example. The more they can bring smart data collection methods offline, the more business intelligence they can glean — especially when, as Om points out, it’s combined with insight from online shopping data.

It may be too early to say that the eyewear startup is at the tip of an online-to-offline retail wave about to sweep through e-commerce — not really sure I see that happening yet — but it is also far from being counterintuitive. Create a strong, hip brand online, generate brand recognition and revenue, get a foothold on the market, and then move offline. It seems like a familiar playbook, even if it isn’t.

[Photo credits: Collin Hughes]

The Gillmor Gang — Kevin Marks, John Taschek, Keith Teare, and Steve Gillmor — spared no expense to bring you the finest in up-to-date tech commentary. In other words, we tore into Twitter Music, ignored Facebook Home, dissected the internals of AirPlay, and cashed our Bitcoin checks.

Our attention is a zero sum game, and whether it’s West Wing or Twitter pointers into the musicsphere, how we make our streaming choices will determine who the big winners are. What we’re really waiting for is the tipping point when the streamer artists crossover and recapture the idea that the creators are the real coin of the realm.

@stevegillmor, @kteare, @kevinmarks, @jtaschek

Produced and directed by Tina Chase Gillmor @tinagillmor

Do you suffer from “sore elbows, wrists and hands from having to hold small and awkward shapes?” Have you found that “products are confusing to impossible to control?” Do you know what a phthalates is and are you embarrassed by the packaging of your favorite personal massager products? Has Revel Body got a product for you.

This crowdfunded project aims to make your alone time (or time spent with friends) more rewarding. The product, essentially a sonic vibrator, is designed for ladies and, presumably, men. The team, led by Robin Elenga, has created a high-frequency system for offering a better “buzz” during those moments when you’re visiting the Palms Hotel.

The product offers “50 percent more power” and “400 percent vibration range” and reduces the vibrations felt in the hand and focuses those vibrations on sore muscles and/or your vagina.

The product uses a resonating motor to offer a larger range of vibration speeds and sensations and it’s shaped like a tennis ball to reduce the strain on wrists and other body parts. It’s run on a rechargeable battery that connects to any USB port and offers nearly silent operation, unlike similar linear-motor-powered vibrators. Because it doesn’t exactly look like a traditional vibrator you could even put it in a place of honor on your bedside table or office desk.

The vibrator comes (to your house) for a pledge of $140. You can get two for $220. They are hoping to raise $50,000 and are nearly there so they just need that extra push to get them over the edge. I suppose, given the circumstances, we should probably help them out.

Editor’s note: Ben Horowitz is co-founder and partner of Andreessen Horowitz. He was co-founder and CEO of Opsware (formerly Loudcloud), which was acquired by HP, and ran several product divisions at Netscape. He serves on the board of companies such as Capriza, Foursquare, Jawbone, Lytro, Magnet, NationBuilder, Okta, Rap Genius, SnapLogic and Tidemark. Follow him on his blog and on Twitter @bhorowitz.

“He’s a big bad wolf in your neighborhood
Not bad meaning bad, but bad meaning good”
—Run DMC, Peter Piper

Perhaps the most common mistake that I see a technical founder make when building her sales organization is that she applies strategies to the sales-hiring process that work when building the engineering team. This may sound shocking, but sales people are different from engineers, and treating them like engineers does not work well at all.

It starts with the hiring process. If you attempt to hire sales people using the same assumptions that worked with engineering, then here are some of the things that will go wrong.

The Interview

A good engineering interview will include some set of difficult problems to solve. It might even require that the candidate write a short program. In addition, it will test the candidate’s knowledge of the tools she uses in great depth. A small portion of the interview may address personality traits, but smart managers will tolerate a very wide variety of personalities to find the best engineers.

A good sales interview is the opposite. You can quiz them on hard sales problems all day long, but only a horrible sales rep won’t be able to bluff her way through the most intricate quiz on how to sell a complex account. On the other hand, great sales people tend to have very specific personality traits. Specifically, they must be courageous, competitive and hungry. They also need enough intelligence to get the job done. That’s the magic formula. Hire engineers with that profile and you’ll fail. Hire sales people who are really smart problem solvers, but lack courage, hunger and competitiveness, and your company will go out of business.

Dick Harrison, CEO of Parametric Technologies, home of perhaps the greatest enterprise sales force ever built, interviewed Mark Cranney, the greatest sales manager I have ever met, as follows:

Dick: I’ll bet you got into a lot of fights when you were a youth didn’t you?

Mark: Well yes, Dick, I did get into a few.

Dick: Well, how’d you do?

Mark: Well, I was about 35-1.

Dick: Tell me about the 1.

Mark tells him the story, which Dick enjoys immensely.

Dick: Do you think you could kick my ass?

Mark pauses and asks himself: “Is Dick questioning my courage or my intelligence?” Then replies: “Could or would?”

Dick hires Mark on the spot.

Ask an engineer that same set of questions and at best she’d be confused, and at worst she’d be horrified. By asking Mark those questions, Dick quickly found out:

• Whether Mark had the courage to stay in the box and not get flustered;
• That Mark came from a rough environment and was plenty hungry;
• That Mark was super competitive, but smart enough to calculate his answer.

Hiring sales people is different.

The Background

When screening engineers from other companies, its smart to value engineers from great companies more than those from mediocre companies. All things being equal, always interview the Google engineer over the Quest Software engineer. Why? Because, as an engineer, you have to be way better to get a job at Google than at Quest. In addition, Google’s engineering environment and techniques are state-of-the-art, so engineers who come from there will be well trained in an environment with high standards.

anybody with a pulse can sell a massively winning product

In contrast, anybody with a pulse can sell a massively winning product like Google Ads or VMware hypervisors, but people who consistently sold Lanier copiers against Xerox were elite. In fact, it might be a good sign that a sales rep was successful at a bad company. To succeed at selling a losing product, you must develop seriously superior sales techniques. In addition, you have to be massively competitive and incredibly hungry to survive in that environment.

The Cost of Making a Mistake

Great engineering organizations strive never to make hiring mistakes, because hiring mistakes can be very costly. Not only do you lose the productivity that you might have gained from the hire, but you might well incur severe technical debt. To make matters worse, even when an engineering manager recognizes she’s made a mistake, she’s often slow to correct it, leading to more debt and delay. In addition, building an engineering organization too quickly will cause all kinds of communication issues, which makes slow hiring in engineering a really smart thing to do.

On the other hand, you often can’t afford to build out your sales force too slowly, especially if you have significant competition. Sales people, when compared to engineers, work in relative isolation, so there’s productivity loss, but relatively little long-term debt or fast growth issues. Sales managers generally don’t have issues with firing poor performers, so sales people go fast. I have a friend who was fond of saying, “We have two kinds of sales people: rich and new.”

The Conclusion

Applying engineer-oriented hiring techniques to fill out a sales organization is like eating poison ivy to get more green vegetables. You will get the opposite of what you want.

In the coming weeks, the New York Taxi and Limousine Commission is expected to enter into its first trial of taxi e-hail apps. That’ll allow startups like Hailo that help users find nearby cabs through their mobile phones, without having to hail them from the street. At the same time, competition is coming from services like SideCar, which enables passengers to find rides from community drivers.

All these changes will have a significant impact not just on consumers — who will soon have more choices than ever — but on the entire urban transportation industry. There’s the question of how regulators view the safety of mobile, on-demand transportation services, particularly those which provide rides from drivers without commercial licenses. There’s also the difficult balance between regulation and innovation, particularly as the taxi industry seeks to compete with the convenience provided by technology startups like Uber?

At Disrupt NY 2013, I’ll be talking about some of the companies involved in this transition, as well as the local regulatory agency which oversees them, to discuss how these apps will reshape the way we think about getting around cities like New York.

I’ll be joined by NY TLC Deputy Commissioner Ashwini Chhabra, who will present the side of the regulators in this debate. Over the last year, he’s been working with local taxi companies, tech startups, and technology providers, to make supporting e-hail applications a reality in the city.

We’ll also have Jay Bregman, CEO of taxi e-hail startup Hailo. Already operating a wildly popular service in the U.K., Hailo will be one of the first apps to take advantage of the TLC’s new e-hail rules. Prior to founding Hailo, Bregman was the founder and CTO of eCourier.co.uk, a company which used GPS for an intelligent dispatch system.

And rounding out our panel will be Sunil Paul, CEO of ride-sharing startup SideCar. After a successful run in San Francisco, SideCar is aggressively expanding into other markets, including Brooklyn, N.Y. Prior to founding SideCar, this tech veteran had co-founded companies like FreeLoader and anti-spam leader Brightmail, and has also been an investor in a number of cleanweb technologies and startups.

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Jay Bregman
Founder & CEO, Hailo

Jay Bregman is the Founder / CEO of Hailo – a network that matches passengers and licensed taxi drivers using a tool which helps to make cabbies’ days more sociable – and profitable. Hailo has raised $50M in investment from an all-star cast of investors including Union Square Ventures, Accel Partners, Wellington Partners, Atomico Ventures, Richard Branson and KDDI. Together they’ve funded Facebook, Foursquare, Twitter and Tumblr, founded Skype, and brought loads of other fanatistic companies to life all over the world.

Previously Jay founded eCourier.co.uk which was voted London’s most inspirational business by the Evening Standard in 2007. He holds a B.A. from Dartmouth College and an MSc from the London School of Economics. Jay was named on the Times’ 100 People to Watch in 2012.

He now lives in New York City managing Hailo’s North American expansion.

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Sunil Paul
CEO, Side.Cr

Sunil Paul is co-founder and CEO of rideshare community SideCar. SideCar has operations in San Francisco, Seattle, Philadelphia, Austin, Los Angeles, Boston, Chicago and Brooklyn, NY. Sunil coined the term “cleanweb” to describe the aggressive application of social, mobile, and Internet media to accelerate cleantech deployment and restructure sectors as diverse as hotels, automobiles, agriculture and food, clothing, buildings, lighting and renewable finance. SideCar is a realization of Sunil’s cleanweb vision.

A few months ago, while visiting a hacker friend’s magnificent new San Francisco loft, he gestured to a little alcove stuffed with server racks and said: “And over there are the Bitcoin mines.” I smiled and nodded, thinking, Oh, right, Bitcoin. Is that still a thing?

Andy, if you’re reading this, I apologize. Is it ever, and how. Over the last few weeks the hype around everyone’s favorite distributed cryptographic currency has gone insane. It’s a Ponzi scheme; no, it’s the first instance of the third era of currency; no, it will spiral up and down forever; no, it’s the new venture-capital frontier; no, it’s an existential threat to the modern state.

No, possibly, conceivably, maybe, and no. But: I realized this week that Bitcoin actually is a really big deal — in a way that’s been almost entirely obscured by all the hype.

A rare voice of reason this month came from Felix Salmon, who wrote (in a post marred by some remarkable ignorance; for instance, Facebook Credits ceased to be a $1 billion market when Facebook discontinued them almost a year ago):

A peer-to-peer payments system, allowing anybody on the internet to pay anybody else on the internet without having to sign up with some financial-services behemoth first, could revolutionize global commerce … Bitcoin isn’t the future. But it has helped to light the way ahead.

I mostly concur. Of course, I would, since I concluded exactly the same thing two years ago, when Bitcoin was at its previous hype peak. I went on then to speculate that its real future might be as a national currency in a nation like Zimbabwe previously scarred by hyperinflation.

…And I don’t know what I was thinking. Bitcoin’s true long-term value was staring me in the face, and I missed it. It wasn’t until I read this superb Nyaruka post on the subject that it hit me.

Almost everyone else writing about Bitcoin is doing so from the perspective of a First World citizen living in a nation with thriving electronic payment networks and a strong, easily traded currency. But that’s not the context where it really matters. Where Bitcoin matters, where it’s important, is the developing world.

Ever tried to exchange Colombian pesos in Guatemala, or Tanzanian shillings in Zambia? I have, and believe me, it’s a Kafkaesque nightmare. Now imagine living in the developing world and trying to sell goods or services internationally. Talk about a pain point. Until Bitcoin. To quote that Nyaruka post:

Someone in Rwanda that builds a compelling service can instantly start taking payments from the rest of the world, without asking for permission, without filling out any paperwork and with the same fee structure as the biggest retailers … So Bitcoin is exciting to me not so much because it is a new currency, but because it has the potential to be a globally recognized, yet completely decentralized, form of digital payment.

Of course unofficial distributed international payment networks are as old as the hills. Our own John Biggs points out that Bitcoin is in essence much like a modern day hawala network; but it is to hawala as PayPal is to money orders sent by Pony Express. No ID required, no setup costs, no nothing: just send and receive. Bitcoin is no threat to the modern nation-state…but it is conceivably an existential threat to PayPal.

However, it’s not without its flaws. For one thing, Bitcoin’s “block chain” — the record that verifies all transactions — could conceivably be forked, as happened due to a versioning bug back in March. That wasn’t a significant problem, but now that Bitcoin’s collective value has briefly hit 10 figures (although it might be back down to eight figures by tomorrow…) you have to wonder if someone might try a brute-force attack on it. “If a user controls the majority of computational power in the mining network, they can manipulate this to their advantage by creating two diverging chains,” to quote a Cornell writeup.

In other words, if a true computing megapower (say, Amazon, Apple, Google, or one of a handful of national governments) really wanted to break Bitcoin, they could. In fact I’ve seen speculation that anyone willing to splash out a few million dollars on custom hardware would probably be able to hijack the block chain.

Furthermore, it’s not really all that anonymous, which is a highly desirable feature in a digital currency; and worst of all, if the last few weeks have proved anything at all about Bitcoin, it’s that it’s ridiculously volatile… which is exactly what you don’t want in a payments mechanism.

So I believe it’s Bitcoin’s successors — whether that be Ripple/OpenCoin, or the anonymous Bitcoin bolt-on ZeroCoin, or something else still being dreamed up — that will truly change the world. But not the First World. We don’t much need Bitcoin and its descendants, at least not yet. In the developing world, though, crippled by weak currencies and byzantine payment infrastructures, a simple, seamless, frictionless, reliable international peer-to-peer payments system could be a huge deal. But not until the volatility diminishes…which is to say, not until the hype here fades away. Here’s hoping that’s soon.

Image credit: Len Radin, Flickr.

During the Facebook Home launch event, Zuck premiered the company’s first commercial for the product.

Complete with half-naked dudes stuffed into luggage compartments, surprise drag queens, and an unintentionally spooky child, it was… pretty bad. One guy in the audience behind me whispered “Is this real life?“, faces were palmed, and the room was pretty quiet as the lights came back up. They aimed for weird-funny, but ended up with mostly just weird.

Fortunately, their second attempt is about a thousand times better, if only because it has a goat that screams in Zuck’s face. Plus, unlike the first commercial, this one actually mentions Facebook Home before the last half second of the 60 second spot.

The new TV spot:

(For the curious, that’s totally Facebook’s real Menlo Park HQ)

And for those who missed it, the original, super weird commercial:

If only a funny commercial could save them from a mountain of scathing user reviews.

T-Mobile finally began selling the iPhone 5 earlier today, and it seems as though all that pent-up consumer tension has resulted in some promising sales for the carrier.

“Today has been gangbusters for T-Mobile,” CMO Mike Sievert noted to AllThingsD earlier today. Naturally, Sievert wouldn’t discuss just how many iPhones were moved during the course of the day, but he did point out that customers had lined up at “nearly all” of the carrier’s retail outlets.

By now the iPhone 5 is a known quantity so most stores didn’t see the sort of crazy volume that usually goes with an iPhone going on sale — for what it’s worth, our intern Michael only noticed a handful of people waiting in line at a T-Mobile store near our office in New York’s Lower East Side — but it’s heartening to see those customers finally getting a chance to pick up an iPhone without having to switch providers.

This moment has been a long time coming for T-Mobile. For months upon months the carrier bore the ignominious distinction of being the only major wireless provider in the U.S. without access to Apple’s tiny mobile juggernaut. The fact that even prepaid providers like Cricket and Virgin Mobile got to offer the iPhone ahead of T-Mobile was surely cause for some consternation, but the ability to stock iPhones and a dramatic shift in how it handles its rate plans could mean big things for T-Mobile in the months to come.

At least that’s what the company is surely hoping, especially since it posted some disappointing figures in its most recent earnings release — total revenue dipped 5.2 percent year-over-year, while operating income sunk some 25 percent over the same amount of time. Those figures were just released in late February, so it’ll be a while yet before we see what sort of impact the iPhone actually has on T-Mobile’s fortunes.

In the meantime, T-Mobile’s brass has no shortage of other things to concern themselves with. Take the possibility of not one, but two mergers for instance — T-Mo parent company Deutsche Telekom just recently sweetened its offer to MetroPCS shareholders in a bid to make the notion of T-Mobile/MetroPCS tie-up more palatable, and Bloomberg revealed earlier today that Dish Network chairman casually brought up the idea of a potential T-Mobile/Dish merger with Deutsche Telekom.