wants to help Finland’s “pre-founders” make the switch to startup life

Icebreaker, a new €14 million VC fund based in Helsinki, is de-cloaking today with a remit to back early-stage startups and what it calls “pre-founders”. The latter are described as people with successful five-plus year careers who are working on an idea for a startup but, due to a lack of financial support or a suitable co-founder, have yet to quit their day job and make the switch to startup life.

“We noticed that there are a lot of people who are on successful career paths but are looking to start or join startups – these are the people we call ‘pre-founders’,” explains Icebreaker co-founder and Partner Riku Seppälä. “There is no support for them here [in Finland], they don’t know… investors and have trouble connecting with co-founders”.

The solution, reckons Seppälä, is a new fund in Finland that not only plans to invest at the angel and seed stage — writing cheques of between €40,000 and €350,000 — but also one that acts as a catalyst for the country’s early-stage startup scene as a whole. This includes running various community building activities designed to help “pre-founders” find one another and ensure different skill-sets and experiences collide.

“The majority of our community’s pre-founders are working long hours at their current jobs,” says Aleksi Partanen, also a co-founder and Partner at Icebreaker. “Once they have the idea and at least part of the team in place our investment enables them to start developing their startup full-time while they are able to pay their bills as well. The support does not end after the investment but the teams can accelerate their development through our community”.

The Icebreaker community, which exists online and offline via multiple kinds of events being run and supported by the newly-outed VC, is designed not only to help co-founders find each other — in a vein not entirely dissimilar to some of the work being carried out by the U.K.’s Entrepreneur First — but also new recruits, advisors, contacts, customers, and wider feedback.

“One of the biggest challenges with pre-founders is that they usually don’t have a network of complementary co-founders,” says Icebreaker’s third co-founder and Partner Lasse Lehtinen. “We tackle this issue by facilitating pre-founders connecting with complementary co-founders. We also provide them with advice and mentoring from experienced founders, advisors and investors that they would have difficulty getting in contact with otherwise”.

The next Icebreaker event, dubbed “Pre-Founder Project,” will see the Finnish VC firm invite 50 “qualified pre-founders” for afterwork events and workshops with different themes.

“The goal is they find co-founders, get access to mentoring, hear about how different startups got started and challenge and support each other to move forward with their own ideas,” says Lehtinen.

“We also put our experience and contacts in play to get them on a solid path towards their Series A. The support together with our investment increases their chances of success and in turn we get great results,” adds Partanen.

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Why was the winter for venture capital funding so short?

It was only a year ago that many in the Venture Capital industry were predicting that “winter was coming” and to be fair the author of this post was chief amongst them. Yet as we enter February 2017 the VC funding markets are booming, Snap, Inc has filed for its IPO, AppDynamics was just purchased for $3.7 billion by Cisco and the only winter that can be found is at the ski resorts following California’s epic snowy and rainy January.

Ok, Suster. So WTF happened? Why no winter?

Actually, winter did come and I have the data that shows it. But the reality is that “global warming” massively blunted the effects of winter and my prognosis for VC fundings of entrepreneurs in 2017–2018 is now very sunny indeed. Unless of course something Trump’s our good weather.


For starters when we conducted our annual VC & LP survey in December of 2016 to prepare our annual Upfront State of the VC Industry report we found that twice as many VCs cut their investments in 2016 relative to 2015 with > 30% of VCs having cut investments.


And it’s not just that VCs cut their investment pace but they also indicated overwhelmingly that valuations of investments had dropped with 76% of all VCs surveyed suggesting 2016 had lower valuations than 2015.


So VCs made fewer investments at lower prices and generally on terms that were more favorable to investors relative to 2015. This past year was also the year that startup boards also got more disciplined about containing burn rates and pushing for companies to be run more pragmatically. With nearly 2/3rd of all VCs citing cost-cutting in 2016 as the norm — this is a clear indication that winter made an appearance.


So if funding from VCs slowed, valuations dropped and burn rates were slashed, WTF happened to winter again?

“GLOBAL” Warming

The first thing that’s clear is that global investors from China, Singapore, UAE, Saudi Arabia, Japan and elsewhere stepped in to fill the gap that was initially created by the VC pull back.

On stark graph should give you a sense of the picture. Chinese Foreign Direct Investment (FDI, excluding real estate) skyrocketed in 2016 as Chinese investors seek diversification out of their domestic markets. While this it total FDI as opposed to just venture, it should give you an indication of the international trend.


And while the US had FANG (Facebook, Amazon/Apple, Netflix and Google) China has BAT (Baidu, Alibaba and Tencent). Baidu alone raised $3.2 billion in venture capital funds with one A-round fund and one late-stage fund. In case you’re keeping score at home — that’s approximately the size of 65 US seed-stage funds managed by one company.

Alibaba invested $800 million in just one deal — Magic Leap and Temasik (Singapore sovereign wealth fund) invested $800 million in Verily. Those two investments represent the equivalent of another 32 US seed-stage funds just in two deals.

WeWork raised $690 million from Chinese investors, NextVR $80 million and Meta AR $50 million. In fact there are now so many Chinese VC funds chasing returns and also with the mandate the bring US innovation back to China that it would require an entire presentation just to talk about them all.


But it’s not just China and Singapore. Saudi’s PIF + UAE’s Mubadala teamed up with Japan’s SoftBank to launch a new $100 billion fund. With oil prices dropping it’s clear that the region also had to diversity assets and also bring innovation back to their doorsteps. Perhaps this is why the Kuwait Investment Authority put $165 million into Jawbone and Saudi’s PIF put $3.5 billion into Uber.

GLOBAL seems here to stay unless something stupid Trump’s it.

Global “WARMING”

But “global” isn’t the only story, warning is at least half of the equation.

One big factor that is helping to push the VC markets is that frankly many other asset classes don’t have the return profiles asset managers desire given the perpetually low interest rates and 77% of LPs & VCs we surveyed felt this was a significant contributor to the booming VC markets.


And while VCs had pulled back in 2016 it wasn’t only foreign investors who filled in the gap. One major group that has ramped up its venture investments have been corporates. Of course there’s the usual suspects like Google, Intel, and Qualcomm but the total number of corporate VCs has more than doubled in the past 4 years from 61 major programs to 131.

So you have GM investing $500 million in Lyft, BMW starting a $530 million venture fund, Comcast/NBCU investing $200 million into BuzzFeed and even Sesame Street now has a venture capital fund!

And while twice as many VCs dialed back investments in 2016 over 2015 it was the exact opposite for Corporate VCs (CVCs) who filled in the gap for the market. And more than 50% of CVCs said they plan to invest even more in 2017.


Corporations in the past 18 months have not only ramped up venture capital investments but they’ve also picked up the pace of mega-deals to buy startup companies and often from companies not always associated with big tech purchases like Unilever buying DollarShaveClub for $1 billion (go LA!) or Walmart buying Jet for $3 billion. We all know that M&A begets more venture investing.


While the M&A story has been widely reported perhaps far fewer people know that Limited Partners (LPs), the people who fund VC firms, have finally been able to restock their coffers in the past 4 years with significantly more money coming to them in distributions than capital calls to fund VC firm investments. This chart surprised me the most.


When LPs get distributions back they reinvest it into new asset programs in a diversified manner but when VC investments are yielding higher returns than other asset classes even this percentage is getting bigger so VCs are not only able to more easily raise funds but they’re also getting a large slice of the pie. Therefore it should come as no surprise that the number of funds and the amount of dollars raised have both doubled.


And while this author would find it hard to ever say anything positive about the current president of the United States there is perhaps one decision that he seems likely to take that would likely benefit the US technology sector — a tax holiday on the repatriation of foreign capital. Many tech companies have earned huge profits overseas and since there is a tax on bringing it back into the US they leave it abroad. We estimate that the top 5 US tech firms have more than $500 billion in cash sitting abroad and if this is brought back to the US it is likely to increase: R&D expenditure, M&A deals and Venture Capital financings.


So if I had to sum up for you what I see coming in the next two year’s of VC financings and why it will likely be a great time to be an entrepreneur in the US in 2017–2018 it’s this:


But while funding for VCs and funding for tech startups should remain robust, funding is not the same thing as returns. And if the industry becomes over-funded I suspect it will lead to bad behavior at startups, bad behavior at VCs and thus overall depressed returns relative to smaller funding cycles. But this is normal business known as an “economic cycle.”


If you want to read the full report it is here on SlideShare. We will also be publishing the full VC Survey and LP Survey over the course of the next couple of weeks.

Upfront State of the VC & Tech Industry 2017 from Mark Suster

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Mobile carrier Three buys UK Broadband for up to $373M in spectrum grab

After getting its proposed merger with O2 blocked by regulators last year, today Three UK announced another strategy to increase its presence in the market, specifically by growing spectrum capacity. The carrier is acquiring UK Broadband in a transaction valued at £300 million ($373 million) — £250 million up front with “a deferred £50 million “made available as a credit toward an MVNO agreement on Three’s network.”

The transaction is expected to close mid-year, Three said.

Adding more spectrum is a priority for Three especially in the wake of its O2 merger attempt getting scuppered. Three UK — owned by CK Hutchison Holdings, which also has stakes in mobile operations in Australia, Austria, Denmark, Hong Kong, Indonesia, Ireland, Italy, Macau, Sri Lanka, Sweden and Vietnam — is the youngest of the UK’s major mobile carriers: it came to life only with the UK turning on 3G, and it then picked up users with cheap unlimited or high-cap data plans.

As a result it’s also the most data-forward: today its network carries 35% of the UK’s mobile data traffic. But it’s also the smallest, with around 9.2 million subscribers, compared to others like Vodafone (around 18 million) and O2 (around 25 million) and EE (which says around 31 million across mobile, fixed and wholesale).

UK Broadband — which was owned by another Hong Kong telco, PCCW — claims to be “the largest commercial holder of national radio spectrum suitable for 4G mobile services and fixed wireless solutions in the UK.” It also owns a fiber network for backhaul.

UK Broadband currently has around 15,000 business customers across London, Reading, Swindon and Scunthorpe under the Relish brand for retail services. UK Broadband sells wireless data capacity, equipment, and services on its network. Customers include service providers, channel partners and the public sector.

It’s not clear whether that business will continue after the transaction is closed — which is expected in the middle of year. Three, for now, says the deal was made to increase its own capacity in the UK and offer next-generation services to its customers, including broadband access and IoT along with other 5G services.

“UK Broadband gives us an opportunity to expand our ambition to provide high quality and great value internet connectivity for UK consumers,” said Dave Dyson, CEO of Three UK, in a statement.

Featured Image: Three UK

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Super Bowl posts on social media are up from last year, but didn’t top 2015’s record numbers

Super Bowl LI may have made history as the first Big Game to go into overtime, but that may not have translated into record ratings, or, as it turns out, record social media engagement, either. According to Facebook, 64 million people posted 240 million interactions its social network last night, an increase over last year’s 60 million users and 200 million posts during what was, then, an arguably less intense game. But that’s still down from 2015’s record-breaking 65 million people and 265 million engagements.

Twitter, meanwhile, is showing a slight jump from its 2016 numbers but also wasn’t able to break 2015’s record numbers.

This year, Twitter says that more than 27.6 million tweets were posted about #SB51 during the live telecast, including pre- and post-game conversations. Last year, that figure was 27 million. But Twitter also wasn’t able to surpass 2015’s record of 28.4 million tweets posts before, during and after the game.


What is notable this year is the role mobile and video played. Over 90 percent of Facebook interactions took place on mobile, the company says. And there were 262 million views of Super Bowl-related videos on the platform. This was helped by NFL’s posting of official content, including Live video and other behind-the-scenes action.

In 2016, there was some speculation that the downturn in social media engagement had to do with the fact that the game itself was not that interesting. But the same could not necessarily be said of last night’s matchup between the Atlanta Falcons and the New England Patriots. While the Falcons took an early lead of 21-0, the Pats came back in the fourth quarter, tying the game and sending it into overtime. If anything could have flamed a surge of social media postings, this sort of turnaround should have fit the bill.


But Twitter and Facebook only showed smallish increases over last year’s numbers, and are still down from the record-breaking game in 2015.

What gives? It comes down to who’s watching. According early reports, the viewership numbers for this year’s Super Bowl are either below or roughly on par with last year’s game, but are down from the record audience seen in 2015. Combine this with the fact that the NFL has been struggling with lower ratings in recent months – with even NFL commissioner Roger Goodell saying he didn’t know why.

Goodell hinted that the way people consume media is changing, which is why the NFL has increased its efforts online, through properties like Snapchat and YouTube. Or, in other words, cord-cutting is impacting NFL viewership numbers, and the NFL is now trying to reach out to the younger generation of fans in new ways.

Of course, because of their sheer size, Facebook and Twitter will always see large numbers in terms of user engagement. But today’s social media landscape includes other networks that could be eating into their numbers a bit.

For example, on Facebook-owned Instagram, 44 million people had 150 million interactions on Instagram related to the Super Bowl. Snapchat hasn’t revealed its numbers, but it certainly had a piece of the action, as well. This year, the teen-friendly network had four official Super Bowl sponsors, including Amazon, Budweiser, Marriott, and Pepsi. Other brands operating during the pre-game included GrubHub, GE, and Taco Bell.


The top social moments for Super Bowl LI were fairly consistent between platforms, with key gameplays and Lady Gaga’s halftime performance ranking high among the most tweeted or posted-about events.

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Google & H&M’s Ivyrevel will make you a dress customized using your personal data

At last year’s Google I/O developer conference, Google introduced a new Awareness API that would allow for smarter applications that could understand where you were, what you were doing, what’s nearby, and even the weather, in order to more intelligently react to your current situation. Today, Google introduced a new application that’s taking advantage of this sort of data in order to…design you a dress.

Yes, a dress.


Google says it teamed up with H&M’s digital fashion house Ivyrevel on a project dubbed “Coded Couture.

Through a forthcoming Android application, users can consent to have their activity and lifestyle data monitored – by way of the Awareness API –  to create a their own, personalized, custom-made dress that’s ordered through the app. Excuse me, it’s officially called the “Data Dress,” says Google.


Specifically, the Android app being developed now will use the Snapshot API to monitor the person’s daily activity and lifestyle, including things like where they traveled, where they eat dinner or hang out with friends, the typical weather in the area, and more. This information is collected over a week’s time, then used to create a digitally tailored dress that can be bought within the app.

The idea is that you can translate your life and your lifestyle into a unique, wearable look. But in reality, the resulting creation mainly displays your routes and routines as lines on map, sans street labels and points of interest. Users can also choose which style of dress they want, whether a look for work, parties, or formal events.

Google says that the choice of material, color, embellishment used, and added details like belt and cuffs are data-driven, as well. For example, the material will be selected based on weather data like the temperature and the fit will be based on the wearer’s activity level.

This doesn’t seem like the best use case for the Awareness API’s capabilities, but there you have it.

Currently, the app is in a closed beta and being tested by a handful of style “influencers,” including  Ivyrevel’s co-founder Kenza Zouiten. Interested testers can also sign up to join a later trial ahead of the public release.


Previously, Google had shown off better examples of how the Awareness API could be used in apps, including real estate app Trulia’s smarter push notifications that alert you to open houses only if you’re nearby, walking and it’s nice outside. Another, Runkeeper, lets you tag your posts with the current weather, while a music streaming app Superplayer Music took advantage of the new tool to suggest music based on your activity and location – like workout music for the gym.

The custom dresses will start at $99, and the app will release later this year.

(1/6/17, 12:40 PM ET: updated with pricing information, additional details)

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Keys to ascending the consumer-internet throne

“Category kings,” defined as market-share leaders in particular business sectors, often wind up creating the majority of the market value relative to their competition. This advantage is particularly pronounced in technology: According to some research, more than 70 percent of the value created in technology markets is generated by the category’s king (think Amazon in retail, Facebook in social media, etc.).

In fact, research we recently conducted around this topic showed that five-sixths of the market value generated by these leading tech players comes from businesses driven by “network effects,” the phenomenon of a product or service becoming more valuable as more people use it. (This insight is based on an analysis of companies first compiled by consultants Play Bigger Advisors, with valuations updated as of December 31, 2016.)

Our recent, more-detailed analysis around network effects found that they are, in many ways, more potent than many of us have thought: They lead to more efficient sales and marketing activity; create strong barriers to competition; and can lead to explosive growth as a category king’s base of users grows at a fast rate.

Today there is a new class of prominent network-effect companies — such as Airbnb, Uber and Snapchat, all potential IPOs in the next 12 to 18 months (Snapchat’s parent has filed for its offering) — that have created and dominated enormous winner-take-most markets, including lodging and transportation.

These companies’ success and increasing visibility prompted us to try to quantify the specific value of network effects in consumer-technology markets, particularly among category kings. One of our outputs is the new Battery Ventures Network-Effect Index (available on our website). We believe the index and its related data hold insights to better understand the network-effect economy.

What worked to create a network effect yesterday isn’t guaranteed to “kill it” tomorrow.

The index is a market-cap weighted group of 36 current or previously publicly traded consumer-internet companies, each valued at $1 billion or more (as of December 31, 2016), whose business models can — in whole or in part — be attributed to network effects. As you can see from the chart below, the stocks of companies in the BNI have together risen by 161 percent and outperformed the S&P by 84 percent over the last five years, and outperformed the tech-heavy NASDAQ by 60 percent. This means that if you invested $1,000 in this basket of companies in 2011, you would have about $2,606 today.

The combined value of all the companies in our index is $1.08 trillion, and the average time from founding to IPO was 8.0 years, compared to a broader average of 11 years for venture-backed companies.


Using publicly available data from research firm CapitalIQ, we assembled the index to update dynamically each month. The numbers on the Y axis represent aggregate increase in market cap.

Here is a list of all 36 current or previously public companies that comprise the index:


Asterisked are past or present BV investments. Values denoted are public company market capitalizations as of December 31, 2016. HomeAway, OpenTable, Kayak and Trulia were previously public companies before being acquired, and values shown are acquisition values.

Our index includes three discrete categories of companies:

  • Transactional Marketplaces: Destinations where sellers and consumers meet to buy products or services. Examples here are travel site Priceline, food-delivery service GrubHub and Chinese e-commerce site Alibaba.
  • Ad-Driven Marketplaces: These companies — like Zillow, Yelp and TripAdvisor — let consumers use the service for free, but try to get sellers (real estate agents, dry cleaners, hotels) to buy ads to fund the content.
  • Social Networks: Prominent companies in this category include Facebook, Snapchat and WhatsApp.

Below is a look at how the stocks of these three different types of network-effect companies have performed over the last five years.


Using publicly available data from research firm CapitalIQ, we assembled the index to update dynamically each month. The numbers on the Y axis represent aggregate increase in market cap.

As expected, the social networks in the index performed exceedingly well, driven by the growth of companies like Facebook, Tencent, LinkedIn and others, increasing 254 percent over the five-year period. Interestingly, ad-driven marketplaces also performed well against the indices, and even relative to their transactional-marketplace counterparts. Ad-driven marketplaces beat the S&P 500 by 57 percent and even the tech-heavy NASDAQ by 32 percent, suggesting that their network effects enabled them to grow even in the public markets.

There were several other, high-level takeaways from our research:

Market size matters. According to our research, consumer transactional marketplaces generally can’t hit warp speed unless the total market they’re going after is worth $50 billion (yes, billion) or more. So while a $1 billion target market may sound great in a startup pitch deck, a much larger, $50 billion addressable market is what most companies in our index needed to create a consumer marketplace valued at $1 billion or more.

That isn’t to say they didn’t start smaller in a niche market — HomeAway with vacation homes, OpenTable with restaurant reservations, Uber with black cars. However, as they grew, they moved into adjacent but related markets that could grow their TAM (total addressable market) to more than $50 billion.

It’s important to note that the TAM rule is different for the three types of network-effect businesses. The social networks we studied generally operate in enormous markets in which demand for the service is almost limitless (as in all people). The ad-driven marketplace companies in our index, on the other hand, are going after relatively smaller advertising markets, which are often subsets of a broader transactional market.

One way to unlock a huge market is to find a hidden “shadow market” existing in a corner of the economy.

For example, online-review site Yelp operates in the market for restaurants, but can only command a small part of the revenue it drives, as it makes money by accepting advertising from local businesses and is not directly involved in actual transactions. Restaurant-meal delivery service GrubHub, on the other hand, takes a cut of all deliveries, which we believe is a better business model, as it’s sitting directly in the flow of a critical transaction.

Thus, even though GrubHub is facing severe competition from many players while Yelp has a quasi-monopoly, the companies have similar market caps. High-performing and valuable businesses can still be built via an ad model — look at Zillow (real estate) and TripAdvisor (travel) — but these have to nail the consumer value proposition for massive categories.

  • Tip: Find a “shadow market.” One way to unlock a huge market is to find a hidden “shadow market” existing in a corner of the economy. Both Airbnb and Uber are great examples of this. Who knew anyone with a spare bedroom could become a hotel, and anyone with a car could function as a taxi service? Essentially, these marketplaces unlocked new supply and demand and enabled almost-magical new behavior from consumers. Obviously, the companies in these sectors are now reaping the rewards. Though not included in our index, up-and-comers exemplifying this include Rover, which has unlocked a new supply of pet boarding, and Catalant, which is tapping a new supply of consultants.

Companies serving smaller markets can still succeed — they may just need a winner-take-all monopoly to create multi-billion-dollar value. Just Eat, the GrubHub of the U.K. and Europe, and REA Group, the Zillow of Australia, are great examples of companies that have taken smaller markets and owned them to reach the throne.

When figuring out a business model, carefully analyze supply and demand. To build a billion-dollar business, we think one key decision for executives of consumer marketplaces is deciding which side to charge for their service. In general, our research suggests that companies should levy a fee on the side of the transaction that is less constrained (either there are more of them in the marketplace, or the side that wants access to the service more).

For example: Airbnb, valued at $30 billion, from the onset elected to charge consumers, not homeowners, because the consumers were the ones who desperately needed places to stay in busy cities with packed (and expensive) hotels. On the other hand, early market entrant HomeAway, which was valued at about $4 billion as of its acquisition by Expedia, charged homeowners to list their properties online. This could be one reason HomeAway didn’t capture more of the market, despite having first-mover advantage. Airbnb, meanwhile, captured much more housing inventory, and this allowed the company to offer a more compelling service.

Sales and marketing spending is key. Finally, we believe there can be a relationship between sales-and-marketing spend and network effects among the companies in our index. Alibaba, a shining example of strong network effects, is worth $220 billion (as of December 31, 2016) and spends less than 15 percent of its revenues on sales and marketing. But childcare and elder-care marketplace, valued at $247 million as of December 31, 2016, spends more than 48 percent of its revenues on sales and marketing. Finding babysitters or elder-care is, after all, a relatively episodic need, and there is a high risk of disintermediation, yielding a marketplace with weaker network effects. As a result, needs to spend more on sales and marketing to maintain growth.

Overall, we believe the network effect is more relevant than ever to future startup success. But the playbook is changing rapidly. What worked to create a network effect yesterday isn’t guaranteed to “kill it” tomorrow — and savvy entrepreneurs will have to work hard to keep up.

Featured Image: CSA Images/Archive/Getty Images

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Intel powered the drones during Lady Gaga’s Super Bowl halftime show

There were 300 drones dancing behind Lady Gaga during the Super Bowl halftime show. They’re called Shooting Stars and were previously used in a holiday show at Disney World. These hundreds of Shooting Star drones flash, fall and flock in unison and are all controlled by one person — or rather one computer.

This is the latest project in Intel’s quest to take drones from individuals to fleets. This is Ender’s Game brought to life. Just as in Orson Scott Card’s book, one person commands the group, sending instructions and monitoring the drones’ health. And Intel says its limitless in its scale, able to control more than 10,000 drones at a time.

One of the secret to Intel’s Shooting Star program is a desktop software suite of programs. The drones’ routes are pre-programmed and each drone does its own thing. The drones do not talk to each other and they lack the hardware to detect collisions. The software determines routes that eliminates collisions.

The drones are simple. They’re about the weight of a volleyball. The housing is Styrofoam and there are simple metal cages around the four props. They are designed to be assembled in less than 15 minutes and Intel builds the drones in a facility in Germany. There are no screws and everything snaps together. And then on the bottom of the drone is the large, multicolored LED light that paints the sky.

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  2. intel-shooting-star-5-of-4

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Intel turned to Disney to first showcase the technology and in December I got a behind the scenes look at the program prior to its first show. The show itself is neat, as everyone who watched the Super Bowl saw, but the most impressive part wasn’t broadcasted on TV. The drones take off from launchpads like fireflies.

Several drones sit an inch apart on each launchpad. The Shooting Star drones rest in divots designed to cup the round LED housing, which also features the charging contacts for the drones. And they take off, en masse. One after another, seemingly randomly throughout the cluster of launchpads. A quick moment separates each launch as the drones take their position in the air prior to the show.

At the Disney show, Intel had twice the amount of drones on site and ready to fly resulting in 600 drones sitting on these launchpads. The software determines which drones are best charged and ready for flight.

Intel has been working on this program for the past two years. In late 2015 Intel partnered with small group of artists and technology researchers at Ars Electronica Futurelab in Linz, Austria, and sent 100 drones into the air. Four pilots controlled the 100 drones, that launched from four different airfields. Then in late 2016, prior to the first show at Disney World, Intel demonstrated a new generation of the platform, launching 500 drones at once.

Intel envisions a future where drones fly in fleets to accomplish tasks. The same software that Intel and Disney are using to put on a colorful aerial show could be used in search and rescue operations or inspecting equipment and goods. Imagine a squadron of several drones using scanning software — like Intel’s RealSense platform — to inspect an airplane or water tower. Or a force of these drones creating a floating LED screen. But right now the drones are simply flying backup dancers.

Intel and Disney Paint The Sky

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97 companies file opposition to Trump’s immigration order

Apple, Facebook, Microsoft, Twitter and other tech companies filed an amicus brief tonight voicing opposition to President Trump’s executive order on immigration on the grounds that it is discriminatory and has a negative impact on business.

The companies filed their brief in a case brought by Minnesota and Washington state, which challenges Trump’s executive order. The Trump administration appealed the case to the 9th Circuit after a federal judge in Seattle halted the immigration ban. Trump attacked U.S. District Judge James Robart in a series of tweets over the weekend. “The opinion of this so-called judge, which essentially takes law-enforcement away from our country, is ridiculous and will be overturned!” Trump wrote. “Just cannot believe a judge would put our country in such peril. If something happens blame him and court system.”

The filing, first reported by Bloomberg, follows a week of outspoken comments from tech industry leaders against the immigration order which barred refugees from entering the United States indefinitely and temporarily restricted travel to the U.S. for citizens of Syria, Iraq, Iran, Yemen, Libya, Somalia and Sudan. A challenge to the president’s order has reached the 9th Circuit Court of Appeals in San Francisco, and the companies intend to file their brief in this case.

Prior to the official filing of the brief, Twitter and AppNexus confirmed their participation in the amicus brief to TechCrunch. Sources with knowledge of the filing confirmed the participation of Uber, Airbnb, Yelp, Square, Reddit, Kickstarter, Github, Mozilla, Dropbox, Twilio, Netflix, Zynga, Salesforce, Lithium, General Assembly, Pinterest, and Medium.

The full list of companies is as follows: 

  • AdRoll
  • Aeris Communications
  • Airbnb
  • AltSchool
  • Appboy
  • Apple
  • AppNexus
  • Asana
  • Atlassian
  • Autodesk
  • Automattic
  • Box
  • Brightcove
  • Brit + Co
  • CareZone
  • Castlight Health
  • Checkr
  • Chobani
  • Citrix Systems
  • Cloudera
  • Cloudflare
  • Copia Institute
  • DocuSign
  • DoorDash
  • Dropbox
  • Dynatrace
  • eBay
  • Engine Advocacy
  • Etsy
  • Facebook
  • Fastly
  • Flipboard
  • Foursquare
  • Fuze
  • General Assembly
  • GitHub
  • Glassdoor
  • Google
  • GoPro
  • Harmonic
  • Hipmunk
  • Indigogo
  • Intel
  • JAND d/b/a Warby Parker
  • Kargo
  • Kickstarter
  • KIND
  • Knotel
  • Levi Strauss & Co.
  • LinkedIn
  • Lithium Technologies
  • Lyft
  • Mapbox
  • Maplebear d/b/a Instacart
  • Marin Software
  • Medallia
  • Medium
  • Meetup
  • Microsoft
  • Motivate International
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Executives from many of the companies involved have spoken out against the immigration ban, with Airbnb launching a Super Bowl ad campaign emphasizing inclusiveness with the hashtag #weaccept.

Several of the companies have said their employees are directly impacted by the ban, and Uber has created a $3 million legal defense fund for drivers affected by the ban. Uber’s CEO Travis Kalanick was set to attend a meeting of Trump’s business advisory council on Friday, but stepped down from his post on the council Thursday evening after blowback from users and employees about his participation. 

The amicus brief, which argues that Trump’s immigration order is illegal, highlights the contributions of immigrants to the tech economy while stressing the immigration controls already in place. The companies argue that Trump’s order is discriminatory and will have a negative impact on American businesses. The brief states that Trump’s immigration policies will make it more difficult and expensive for companies to hire new employees from around the world, and will make it more difficult for companies to conduct business because of travel restrictions on their employees. The companies also argue that the discrimination enshrined in the order will trickle down to the companies themselves — if job applicants can’t travel to the United States, companies might be forced to discriminate against them, the brief claims.

The brief describes previous immigration laws that were later overturned, such as the Literacy Act and the Johnson-Reed Act. “The march of time has discredited these laws and policies,” the brief states.

The filing criticizes Trump’s administration for rolling out the ban haphazardly, with little notice to the Department of Homeland Security and other enforcement agencies. It argues that the order is confusing by design and that the confusion caused by it will only grow. The ultimate result, according to the companies, is that skilled workers will no longer seek employment in the United States.

“Skilled individuals will not wish to immigrate to the country if they may be cut off without warning from their spouses, grandparents, relatives, and friends — they will not pull up roots, incur significant economic risk, and subject their family to considerable uncertainty to immigrate to the United States in the face of this instability,” the brief says.

A draft of the amicus filing obtained by TechCrunch stressed the importance of open borders. “The experience and energy of people who come to our country to seek a better life for themselves and their children — to pursue the ‘American Dream’ — are woven throughout the social, political, and economic fabric of the Nation,” the draft stated.

Notably absent from the list of 97 companies are several who met with Trump prior to his inauguration: Amazon, Oracle, IBM, SpaceX and Tesla. Although Amazon CEO Jeff Bezos was highly critical of Trump prior to his election, he has not spoken out against the immigration policy. Oracle CEO Safra Catz is serving as an advisor to the Trump transition team, while SpaceX and Tesla CEO Elon Musk has defended his decision to remain on an advisory council for Trump.

If the 9th Circuit finds Trump’s ban illegal, it’s likely his administration will continue to appeal and the case could reach the Supreme Court.

Featured Image: Chip Somodevilla/Getty Images

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WTF is fake news? | TechCrunch

Everyone, even our new president, seems to be talking about “fake news” — just look at how Google searches have spiked over the past few months. But what does fake news actually mean?

On one level, the term seems pretty self-explanatory. Fake news is a story that’s completely false, usually invented for traffic and ad revenue, or to advance a political agenda — or both.

News hoaxes aren’t new, but there’s a growing sense that social media, particularly Facebook, has made it easier for these stories to spread, and for fake news to become a viable business model. (Who’s actually publishing these stories? Well, their exact identity is still a bit mysterious.)

For example, a study by BuzzSumo found that the biggest fake news story of 2016, about then-President Barack Obama supposedly banning the Pledge of Allegiance in schools, received more than 2 million Facebook shares, comments and reactions. Other popular stories  — including one suggesting that Pope Francis had endorsed Donald Trump and another that Trump was offering free one-way tickets to Africa and Mexico — also got hundreds of thousands of shares, comments and reactions.

The impact of fake news

We’ve even seen arguments that Facebook contributed to the Electoral College victory of Donald Trump by facilitating the spread of fake news. In response, the social network has rolled out new features aimed at making it easier for users to flag and remove fake stories.

To be clear, economists Matthew Grentzkow of Stanford University and Hunt Allcott of New York University have done research showing that social media had a smaller influence on the election than you might think, with TV still playing a much larger role.

Still, fake news can have real consequences: As a result of the “Pizzagate” rumor supposedly tying Hillary Clinton to a child sex ring at the Washington, D.C. restaurant Comet Ping Pong, a man actually showed up at Comet Ping Pong with an assault rifle.

Can fake news be stopped? Or will it just keep spreading, until no one can tell the difference between the real stuff and the lies? One reason for optimism: As the issue has become more prominent, the big players — not just Facebook — have been talking about solutions.

Randall Rothenberg, president and CEO of the Interactive Advertising Bureau (a trade organization for online publishers and advertisers), has called for tech and media companies to “actively banish fakery, fraudulence, criminality, and hatred.” Some companies are already taking steps in this direction: Google said that it banned 200 publishers in the last quarter of of 2016 as part of an effort to crack down on fake news sites.

Enter President Trump

At the same time, the term itself has mutated — or, to put it more bluntly, co-opted, a trend that reached its peak with President Donald Trump describing both The New York Times and CNN as “fake news.”

To be clear, no one — not The Times, not CNN, not any publication — is above criticism, but that’s not exactly what Trump is doing. He’s taking the “fake news” label, originally used to describe fly-by-night websites that intentionally deceive readers, and slapping it on organizations with long histories of real journalism.

With his cries of “fake news” (and, conversely, Kellyanne Conway’s defense of “alternative facts”), Trump and his subordinates are giving Americans a simple message, one that he’s repeated plenty of times: “Believe me” — not the media.

In this environment, “fake news” is becoming the equivalent of “clickbait” — just another way of saying “news that I don’t like.” In fact, The Washington Post’s Margaret Sullivan has suggested that the term has become so “tainted” by misuse that it should be retired altogether: “Instead, call a lie a lie. Call a hoax a hoax. Call a conspiracy theory by its rightful name.”

The Times (where Sullivan used to serve as public editor) seems to be taking that advice, and perhaps others will follow suit. Will this help?Maybe it will just lead to more fragmentation, more reading of the news through an exclusively partisan lens. But even if that happens, it won’t make a lie anything other than a lie.

Everyone’s a fact checker

And for readers of the news, left wondering what to believe, this whole discussion has hopefully illustrated a simple, evergreen truth: That the news is created by people. Some of those people are honest and trustworthy, some of them are not and all of us are fallible (as TechCrunch readers surely know by now). And yes, liberals are susceptible, too.

So the news should always be read with some degree of skepticism — not a knee-jerk rejection of all media, but with a critical mind that’s aware of possible mistakes, biases and lies that also remains open to facts and theories that might make us uncomfortable.

Featured Image: Bryce Durbin/TechCrunch

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Technofascism and the three percent

Everywhere I look, I see the magic number: 3%. On the right, a whole quasi-militia movement is named that. On the left, activists report “it takes 3.5% of a population engaged in sustained nonviolent resistance to topple brutal dictatorships.” Nassim Taleb argues that once an intransigent minority reaches “3 or 4%” of the total population, the latter will “have to submit to their preferences.”

But it seems like everyone is intransigent now — and I believe technology has a lot to do with that.

The causality is pretty straightforward. Social media acts as a massive collective Sorting Hat, silently assigning most of us to filter bubbles wherein our beliefs and biases are rarely challenged. News (or “news”) sources rise up to cater to those filter bubbles, powered by tech’s ability to provide cheap global distribution to many millions to anyone with a blog and a knack for clickbait headlines.

Then, slowly, these isolated groups do what isolated groups do: bit by bit, degree by degree, they — and, especially, their attitudes towards other groups — become more extreme. Increasing extremity in one group provokes a backlash of counter-extremity in other groups, and the vicious downward spiral continues. Thanks, social media!

Obviously this doesn’t happen to everyone. But remember those links above: you only need 3% of a population to be intransigent activists to have a massive effect on society, on the scale of overthrowing entire governments. But the assumption there is that there’s only one hard-core 3% movement, versus a bland majority and a small oppressive cabal. What happens when we have two hardcore intransigent 3% movements? Or three? Or more?

What happens if and when one of them is fascist?

This seems like a good time to point out that both the right and the left claim they’re fighting fascism. Right-wingers in America and Europe claim the West is at war with fascist radical Islam in the form of ISIS/Daesh and other extremists — “Salafascists” to use Taleb’s term. (I am not suggesting that Taleb, who I consider one of our era’s great minds, can be categorized as either “left” or “right.”)

In their defense, Daesh does exist, and is unspeakably horrible, and does want to bury Western civilization. On the other hand, radical Islam is a laughably tiny minority of the world’s 1.6 billion Muslims, and is arguably fuelled mostly by oppressive Middle Eastern governments, many of which have, awkwardly, historically been supported by the West; Daesh is a weak faraway quasi-state on the verge of collapse; and despite a few awful successes, extremist Islamic terrorists have shown no ability to mount any kind of actual sustained assault on the values and institutions of the enormously wealthier and more powerful West, unless you count triggering massive overreactions.

But in a right-wing filter bubble, it’s apparently easy to be convinced that there are “no-go” Muslim-controlled regions throughout Europe, that a creeping takeover of Western institutions by Sharia law is already underway, that your local shopping mall may very well be under surveillance right now by planners of the next catastrophic terror attack, etc., even though none of these statements bears even the slightest tangential connection to reality. Thanks, social media!

That’s why the American left wing says they’re fighting fascists; they believe that this ridiculous, irrational fear is being deliberately stoked and used as a stalking horse for actual, outright, white-supremacy fascism of the National Socialist variety. And, I mean, it’s hard to look at Steve Bannon’s history of on-the-record statements and not find that a whole lot more convincing than the batshit “We must defend ourselves against Muslim refugees because many are ISIS agents planning to impose Sharia law on the West!” mindset.

(For context, my homeland Canada gladly took in 39,000 Syrian refugees last year, which is the rough equivalent of the USA bringing in 400,000. You may be surprised to learn that our Parliament has not yet been overthrown in favor of a caliphate.)

Regardless, both wings of the body politic are approaching their self-proclaimed battles against fascism in the same way: by trying to “no-platform” the enemy, i.e. prevent their views from being promulgated. That’s why west-coast left-wingers are shutting down the talks of professional troll Milo Yiannopoulos. That’s why Twitter is being sued by ISIS victims. The idea, in both cases, is that if fascism is given a platform, it will — or at least can — grow, and so, uniquely among ideologies, it must be shut down rather than outcompeted.

Taleb again:

people are disputing whether the freedom of the enlightened West can be undermined by the intrusive policies that would be needed to fight Salafi fundamentalists … can democracy –by definition the majority — tolerate enemies? The question is as follows: “Would you agree to deny the freedom of speech to every political party that has in its charter the banning the freedom of speech?” Let’s go one step further, “Should a society that has elected to be tolerant be intolerant about intolerance?”

We can answer these points using the minority rule. Yes, an intolerant minority can control and destroy democracy. Actually, as we saw, it will eventually destroy our world. So, we need to be more than intolerant with some intolerant minorities. It is not permissible to use “American values” or “Western principles” in treating intolerant Salafism (which denies other peoples’ right to have their own religion).

But no-platforming is a very twentieth-century strategy that simply doesn’t work any more. It was effective when platforms were hard to come by, before anyone with a compelling voice could turn a personal blog into a publication with tens of millions of readers (as Michael Arrington did with this very site, not long ago.) But you can’t no-platform your foes in a world where platform construction kits are given out free with every computer.

Breitbart is vastly more important to Yiannopoulos than a talk at Berkeley; indeed, the latter is just fodder for the former, courtesy of the Streisand Effect. ISIS/Daesh aren’t canny enough to give a guided tour of their state to Vice; they’re hyperactive on social media and have their very own glossy, artfully designed propaganda magazines.

So what is to be done, in this brave new political world of multiple intransigent subgroups, multiple staunchly believed claims of fascism, and the ignoble failure of the anti-fascist tactics of the past? …I don’t pretend to know, but I suspect that, as is so often the case, technology can provide the solution to the problem it provoked. Regardless, it’s important to recognize that such is the world in which we now live.

Featured Image: Ningyou/Wikimedia Commons UNDER A CC BY-SA 3.0 LICENSE

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