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Canonical’s Mark Shuttleworth on dueling open-source foundations
At the Open Infrastructure Summit, which was previously known as the OpenStack Summit, Canonical founder Mark Shuttleworth used his keynote to talk about the state of open-source foundations — and what often feels like the increasing competition between them. “I know for a fact that nobody asked to replace dueling vendors with dueling foundations,” he said. “Nobody asked for that.”
He then put a point on this, saying, “what’s the difference between a vendor that only promotes the ideas that are in its own interest and a foundation that does the same thing. Or worse, a foundation that will only represent projects that it’s paid to represent.”
Somewhat uncharacteristically, Shuttleworth didn’t say which foundations he was talking about, but since there are really only two foundations that fit the bill here, it’s pretty clear that he was talking about the OpenStack Foundation and the Linux Foundation — and maybe more precisely the Cloud Native Computing Foundation, the home of the incredibly popular Kubernetes project.
It turns out, that’s only part of his misgivings about the current state of open-source foundations, though. I sat down with Shuttleworth after his keynote to discuss his comments, as well as Canonical’s announcements around open infrastructure.
One thing that’s worth noting at the outset is that the OpenStack Foundation is using this event to highlight that fact that it has now brought in more new open infrastructure projects outside of the core OpenStack software, with two of them graduating from their pilot phase. Shuttleworth, who has made big bets on OpenStack in the past and is seeing a lot of interest from customers, is not a fan. Canonical, it’s worth noting, is also a major sponsor of the OpenStack Foundation. He, however, believes, the foundation should focus on the core OpenStack project.
“We’re busy deploying 27 OpenStack clouds — that’s more than double the run rate last year,” he said. “OpenStack is important. It’s very complicated and hard. And a lot of our focus has been on making it simpler and cleaner, despite the efforts of those around us in this community. But I believe in it. I think that if you need large-scale, multi-tenant virtualization infrastructure, it’s the best game in town. But it has problems. It needs focus. I’m super committed to that. And I worry about people losing their focus because something newer and shinier has shown up.”
To clarify that, I asked him if he essentially believes that the OpenStack Foundation is making a mistake by trying to be all things infrastructure. “Yes, absolutely,” he said. “At the end of the day, I think there are some projects that this community is famous for. They need focus, they need attention, right? It’s very hard to argue that they will get focus and attention when you’re launching a ton of other things that nobody’s ever heard of, right? Why are you launching those things? Who is behind those decisions? Is it a money question as well? Those are all fair questions to ask.”
He doesn’t believe all of the blame should fall on the Foundation leadership, though. “I think these guys are trying really hard. I think the common characterization that it was hapless isn’t helpful and isn’t accurate. We’re trying to figure stuff out.” Shuttleworth indeed doesn’t believe the leadership is hapless, something he stressed, but he clearly isn’t all that happy with the current path the OpenStack Foundation is on either.
The Foundation, of course, doesn’t agree. As OpenStack Foundation COO Mark Collier told me, the organization remains as committed to OpenStack as ever. “The Foundation, the board, the community, the staff — we’ve never been more committed to OpenStack,” he said. “If you look at the state of OpenStack, it’s one of the top-three most active open-source projects in the world right now […] There’s no wavering in our commitment to OpenStack.” He also noted that the other projects that are now part of the foundation are the kind of software that is helpful to OpenStack users. “These are efforts which are good for OpenStack,” he said. In addition, he stressed that the process of opening up the Foundation has been going on for more than two years, with the vast majority of the community (roughly 97 percent) voting in favor.
OpenStack board member Allison Randal echoed this. “Over the past few years, and a long series of strategic conversations, we realized that OpenStack doesn’t exist in a vacuum. OpenStack’s success depends on the success of a whole network of other open-source projects, including Linux distributions and dependencies like Python and hypervisors, but also on the success of other open infrastructure projects which our users are deploying together. The OpenStack community has learned a few things about successful open collaboration over the years, and we hope that sharing those lessons and offering a little support can help other open infrastructure projects succeed too. The rising tide of open source lifts all boats.”
As far as open-source foundations in general, he surely also doesn’t believe that it’s a good thing to have numerous foundations compete over projects. He argues that we’re still trying to figure out the role of open-source foundations and that we’re currently in a slightly awkward position because we’re still trying to determine how to best organize these foundations. “Open source in society is really interesting. And how we organize that in society is really interesting,” he said. “How we lead that, how we organize that is really interesting and there will be steps forward and steps backward. Foundations tweeting angrily at each other is not very presidential.”
He also challenged the notion that if you just put a project into a foundation, “everything gets better.” That’s too simplistic, he argues, because so much depends on the leadership of the foundation and how they define being open. “When you see foundations as nonprofit entities effectively arguing over who controls the more important toys, I don’t think that’s serving users.”
When I asked him whether he thinks some foundations are doing a better job than others, he essentially declined to comment. But he did say that he thinks the Linux Foundation is doing a good job with Linux, in large parts because it employs Linus Torvalds . “I think the technical leadership of a complex project that serves the needs of many organizations is best served that way and something that the OpenStack Foundation could learn from the Linux Foundation. I’d be much happier with my membership fees actually paying for thoughtful, independent leadership of the complexity of OpenStack rather than the sort of bizarre bun fights and stuffed ballots that we see today. For all the kumbaya, it flatly doesn’t work.” He believes that projects should have independent leaders who can make long-term plans. “Linus’ finger is a damn useful tool and it’s hard when everybody tries to get reelected. It’s easy to get outraged at Linus, but he’s doing a fucking good job, right?”
OpenStack, he believes, often lacks that kind of decisiveness because it tries to please everybody and attract more sponsors. “That’s perhaps the root cause,” he said, and it leads to too much “behind-the-scenes puppet mastering.”
In addition to our talk about foundations, Shuttleworth also noted that he believes the company is still on the path to an IPO. He’s obviously not committing to a time frame, but after a year of resetting in 2018, he argues that Canonical’s business is looking up. “We want to be north of $200 million in revenue and a decent growth rate and the right set of stories around the data center, around public cloud and IoT.” First, though, Canonical will do a growth equity round.
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Index Ventures, Stripe back bookkeeping service Pilot with $40M
Five years after Dropbox acquired their startup Zulip, Waseem Daher, Jeff Arnold and Jessica McKellar have gained traction for their third business together: Pilot.
Pilot helps startups and small businesses manage their back office. Chief executive officer Daher admits it may seem a little boring, but the market opportunity is undeniably huge. To tackle the market, Pilot is today announcing a $40 million Series B led by Index Ventures with participation from Stripe, the online payment processing system.
The round values Pilot, which has raised about $60 million to date, at $355 million.
“It’s a massive industry that has sucked in the past,” Daher told TechCrunch. “People want a really high-quality solution to the bookkeeping problem. The market really wants this to exist and we’ve assembled a world-class team that’s capable of knocking this out of the park.”
San Francisco-based Pilot launched in 2017, more than a decade after the three founders met in MIT’s student computing group. It’s not surprising they’ve garnered attention from venture capitalists, given that their first two companies resulted in notable acquisitions.
Pilot has taken on a massively overlooked but strategic segment — bookkeeping,” Index’s Mark Goldberg told TechCrunch via email. “While dry on the surface, the opportunity is enormous given that an estimated $60 billion is spent on bookkeeping and accounting in the U.S. alone. It’s a service industry that can finally be automated with technology and this is the perfect team to take this on — third-time founders with a perfect combo of financial acumen and engineering.”
The trio of founders’ first project, Linux upgrade software called Ksplice, sold to Oracle in 2011. Their next business, Zulip, exited to Dropbox before it even had the chance to publicly launch.
It was actually upon building Ksplice that Daher and team realized their dire need for tech-enabled bookkeeping solutions.
“We built something internally like this as a byproduct of just running [Ksplice],” Daher explained. “When Oracle was acquiring our company, we met with their finance people and we described this system to them and they were blown away.”
It took a few years for the team to refocus their efforts on streamlining back-office processes for startups, opting to build business chat software in Zulip first.
Pilot’s software integrates with other financial services products to bring the bookkeeping process into the 21st century. Its platform, for example, works seamlessly on top of QuickBooks so customers aren’t wasting precious time updating and managing the accounting application.
“It’s better than the slow, painful process of doing it yourself and it’s better than hiring a third-party bookkeeper,” Daher said. “If you care at all about having the work be high-quality, you have to have software do it. People aren’t good at these mechanical, repetitive, formula-driven tasks.”
Currently, Pilot handles bookkeeping for more than $100 million per month in financial transactions but hopes to use the infusion of venture funding to accelerate customer adoption. The company also plans to launch a tax prep offering that they say will make the tax prep experience “easy and seamless.”
“It’s our first foray into Pilot’s larger mission, which is taking care of running your companies entire back office so you can focus on your business,” Daher said.
As for whether the team will sell to another big acquirer, it’s unlikely.
“The opportunity for Pilot is so large and so substantive, I think it would be a mistake for this to be anything other than a large and enduring public company,” Daher said. “This is the company that we’re going to do this with.”
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OpenStack Stein launches with improved Kubernetes support
The OpenStack project, which powers more than 75 public and thousands of private clouds, launched the 19th version of its software this week. You’d think that after 19 updates to the open-source infrastructure platform, there really isn’t all that much new the various project teams could add, given that we’re talking about a rather stable code base here. There are actually a few new features in this release, though, as well as all the usual tweaks and feature improvements you’d expect.
While the hype around OpenStack has died down, we’re still talking about a very active open-source project. On average, there were 155 commits per day during the Stein development cycle. As far as development activity goes, that keeps OpenStack on the same level as the Linux kernel and Chromium.
Unsurprisingly, a lot of that development activity focused on Kubernetes and the tools to manage these container clusters. With this release, the team behind the OpenStack Kubernetes installer brought the launch time for a cluster down from about 10 minutes to five, regardless of the number of nodes. To further enhance Kubernetes support, OpenStack Stein also includes updates to Neutron, the project’s networking service, which now makes it easier to create virtual networking ports in bulk as containers are spun up, and Ironic, the bare-metal provisioning service.
All of that is no surprise, given that according to the project’s latest survey, 61 percent of OpenStack deployments now use both Kubernetes and OpenStack in tandem.
The update also includes a number of new networking features that are mostly targeted at the many telecom users. Indeed, over the course of the last few years, telcos have emerged as some of the most active OpenStack users as these companies are looking to modernize their infrastructure as part of their 5G rollouts.
Besides the expected updates, though, there are also a few new and improved projects here that are worth noting.
“The trend from the last couple of releases has been on scale and stability, which is really focused on operations,” OpenStack Foundation executive director Jonathan Bryce told me. “The new projects — and really most of the new projects from the last year — have all been pretty oriented around real-world use cases.”
The first of these is Placement. “As people build a cloud and start to grow it and it becomes more broadly adopted within the organization, a lot of times, there are other requirements that come into play,” Bryce explained. “One of these things that was pretty simplistic at the beginning was how a request for a resource was actually placed on the underlying infrastructure in the data center.” But as users get more sophisticated, they often want to run specific workloads on machines with certain hardware requirements. These days, that’s often a specific GPU for a machine learning workload, for example. With Placement, that’s a bit easier now.
It’s worth noting that OpenStack had some of this functionality before. The team, however, decided to uncouple it from the existing compute service and turn it into a more generic service that could then also be used more easily beyond the compute stack, turning it more into a kind of resource inventory and tracking tool.
Then, there is also Blazer, a reservation service that offers OpenStack users something akin to AWS Reserved Instances. In a private cloud, the use case for a feature is a bit different, though. But as some of the private clouds got bigger, some users found that they needed to be able to guarantee resources to run some of their regular, overnight batch jobs or data analytics workloads, for example.
As far as resource management goes, it’s also worth highlighting Sahara, which now makes it easier to provision Hadoop clusters on OpenStack.
In previous releases, one of the focus areas for the project was to improve the update experience. OpenStack is obviously a very complex system, so bringing it up to the latest version is also a bit of a complex undertaking. These improvements are now paying off. “Nobody even knows we are running Stein right now,” Vexxhost CEO Mohammed Nasar, who made an early bet on OpenStack for his service, told me. “And I think that’s a good thing. You want to be least impactful, especially when you’re in such a core infrastructure level. […] That’s something the projects are starting to become more and more aware of but it’s also part of the OpenStack software in general becoming much more stable.”
As usual, this release launched only a few weeks before the OpenStack Foundation hosts its bi-annual Summit in Denver. Since the OpenStack Foundation has expanded its scope beyond the OpenStack project, though, this event also focuses on a broader range of topics around open-source infrastructure. It’ll be interesting to see how this will change the dynamics at the event.
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Suse is once again an independent company
Open-source infrastructure and application delivery vendor Suse — the company behind one of the oldest Linux distributions — today announced that it is once again an independent company. The company today finalized its $2.5 billion acquisition by growth investor EQT from Micro Focus, which itself had acquired it back in 2014.
Few companies have changed hands as often as Suse and yet remained strong players in their business. Suse was first acquired by Novell in 2004. Novell was then acquired by Attachmate in 2010, which Micro Focus acquired in 2014. The company then turned Suse into an independent division, only to then announce its sale to EQT in the middle of 2018.
It took a while for Micro Focus and EQT to finalize the acquisition, though, but now, for the first time since 2004, Suse stands on its own.
Micro Focus says that when it acquired Attachmate Group for $2.35 billion, Suse generated just 20 percent of the group’s total revenues. Since then, Suse has generated quite a bit more business as it expanded its product portfolio well beyond its core Linux offerings and into the more lucrative open-source infrastructure and application delivery business by, among other things, offering products and support around massive open-source projects like Cloud Foundry, OpenStack and Kubernetes.
Suse CEO Nils Brauckmann will remain at the helm of the company, but the company is shaking up its executive ranks a bit. Enrica Angelone, for example, has been named to the new post of CFO at Suse, and Sander Huyts is now the company’s COO. Former Suse CTO Thomas Di Giacomo is now president of Engineering, Product and Innovation. All three report directly to Brauckmann.
“Our genuinely open, open source solutions, flexible business practices, lack of enforced vendor lock-in and exceptional service are more critical to customer and partner organizations, and our independence coincides with our single-minded focus on delivering what is best for them,” said Brauckmann in today’s announcement. “Our ability to consistently meet these market demands creates a cycle of success, momentum and growth that allows SUSE to continue to deliver the innovation customers need to achieve their digital transformation goals and realize the hybrid and multi-cloud workload management they require to power their own continuous innovation, competitiveness and growth.”
Since IBM recently bought Red Hat for $34 billion, though, it remains to be seen how long Suse’s independent future will last. The market for open source is only heating up, after all.
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Canonical plans to raise its first outside funding as it looks to a future IPO
It’s been 14 years since Mark Shuttleworth first founded and funded Canonical and the Ubuntu project. At the time, it was mostly a Linux distribution. Today, it’s a major enterprise player that offers a variety of products and services. Throughout the years, Shuttleworth self-funded the project and never showed much interest in taking outside money. Now, however, that’s changing.
As Shuttleworth told me, he’s now looking for investors as he looks to get the company on track to an IPO. It’s no secret that the company’s recent re-focusing on the enterprise — and shutting down projects like the Ubuntu phone and the Unity desktop environment — was all about that, after all. Shuttleworth sees raising money as a step in this direction — and as a way of getting the company in shape for going public.
“The first step would be private equity,” he told me. “And really, that’s because having outside investors with outside members of the board essentially starts to get you to have to report and be part of that program. I’ve got a set of things that I think we need to get right. That’s what we’re working towards now. Then there’s a set of things that private investors are looking for and the next set of things is when you’re doing a public offering, there’s a different level of discipline required.”
It’s no secret that Shuttleworth, who sports an impressive beard these days, was previously resistant to this, and he acknowledged as much. “I think that’s a fair characterization,” he said. “I enjoy my independence and I enjoy being able to make long-term calls. I still feel like I’ll have the ability to do that, but I do appreciate keenly the responsibility of taking other people’s money. When it’s your money, it’s slightly different.”
Refocusing Canonical on the enterprise business seems to be paying off already. “The numbers are looking good. The business is looking healthy. It’s not a charity. It’s not philanthropy,” he said. “There are some key metrics that I’m watching, which are the gate for me to take the next step, which would be growth equity.” Those metrics, he told me, are the size of the business and how diversified it is.
Shuttleworth likens this program of getting the company ready to IPO to getting fit. “There’s no point in saying: I haven’t done any exercise in the last 10 years but I’m going to sign up for tomorrow’s marathon,” he said.
The move from being a private company to taking outside investment and going public — especially after all these years of being self-funded — is treacherous, though, and Shuttleworth admitted as much, especially in terms of being forced to setting short-term goals to satisfy investors that aren’t necessarily in the best interest of the company in the long term. Shuttleworth thinks he can negotiate those issues, though.
Interestingly, he thinks the real danger is quite a different one. “I think the most dangerous thing in making that shift is the kind of shallowness of the unreasonably big impact that stock price has on people’s mood,” he said. “Today, at Canonical, it’s 600 people. You might have some that are having a really great day and some that are having a shitty day. And they have to figure out what’s real about both of those scenarios. But they can kind of support each other. […] But when you have a stock ticker, everybody thinks they’re having a great day, or everybody thinks they’re having a shitty day in a way that may be completely uncorrelated to how well they’re actually doing.”
Shuttleworth does not believe that IBM’s acquisition of its competitor Red Hat will have any immediate effect on its business, though. What he does think, however, is that this move is making a lot of people rethink for the first time in years the investment they’ve been making in Red Hat and its enterprise Linux distribution. Canonical’s promise is that Ubuntu, as well as its OpenStack tools and services, are not just competitive but also more cost-effective in the long run, and offer enterprises an added degree of agility. And if more businesses start looking at Canonical and Ubuntu, that can only speed up Shuttleworth’s (and his bankers’) schedule for hitting Canonical’s metrics for raising money and going public.
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Forget Watson, the Red Hat acquisition may be the thing that saves IBM
With its latest $34 billion acquisition of Red Hat, IBM may have found something more elementary than “Watson” to save its flagging business.
Though the acquisition of Red Hat is by no means a guaranteed victory for the Armonk, N.Y.-based computing company that has had more downs than ups over the five years, it seems to be a better bet for “Big Blue” than an artificial intelligence program that was always more hype than reality.
Indeed, commentators are already noting that this may be a case where IBM finally hangs up the Watson hat and returns to the enterprise software and services business that has always been its core competency (albeit one that has been weighted far more heavily on consulting services — to the detriment of the company’s business).
Also read as IBM taps out on Watson as its growth engine and returns to basics ie financial engineering and distribution https://t.co/nD7gHyYhQf
— Sunil Rawat (@_sunilrawat) October 28, 2018
Watson, the business division focused on artificial intelligence whose public claims were always more marketing than actually market-driven, has not performed as well as IBM had hoped and investors were losing their patience.
Critics — including analysts at the investment bank Jefferies (as early as one year ago) — were skeptical of Watson’s ability to deliver IBM from its business woes.
As we wrote at the time:
Jefferies pulls from an audit of a partnership between IBM Watson and MD Anderson as a case study for IBM’s broader problems scaling Watson. MD Anderson cut its ties with IBM after wasting $60 million on a Watson project that was ultimately deemed, “not ready for human investigational or clinical use.”
The MD Anderson nightmare doesn’t stand on its own. I regularly hear from startup founders in the AI space that their own financial services and biotech clients have had similar experiences working with IBM.
The narrative isn’t the product of any single malfunction, but rather the result of overhyped marketing, deficiencies in operating with deep learning and GPUs and intensive data preparation demands.
That’s not the only trouble IBM has had with Watson’s healthcare results. Earlier this year, the online medical journal Stat reported that Watson was giving clinicians recommendations for cancer treatments that were “unsafe and incorrect” — based on the training data it had received from the company’s own engineers and doctors at Sloan-Kettering who were working with the technology.
All of these woes were reflected in the company’s latest earnings call where it reported falling revenues primarily from the Cognitive Solutions business, which includes Watson’s artificial intelligence and supercomputing services. Though IBM chief financial officer pointed to “mid-to-high” single digit growth from Watson’s health business in the quarter, transaction processing software business fell by 8% and the company’s suite of hosted software services is basically an afterthought for business gravitating to Microsoft, Alphabet, and Amazon for cloud services.
To be sure, Watson is only one of the segments that IBM had been hoping to tap for its future growth; and while it was a huge investment area for the company, the company always had its eyes partly fixed on the cloud computing environment as it looked for areas of growth.
It’s this area of cloud computing where IBM hopes that Red Hat can help it gain ground.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer, in a statement announcing the acquisition. “IBM will become the world’s number-one hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”
The acquisition also puts an incredible amount of marketing power behind Red Hat’s various open source services business — giving all of those IBM project managers and consultants new projects to pitch and maybe juicing open source software adoption a bit more aggressively in the enterprise.
As Red Hat chief executive Jim Whitehurst told TheStreet in September, “The big secular driver of Linux is that big data workloads run on Linux. AI workloads run on Linux. DevOps and those platforms, almost exclusively Linux,” he said. “So much of the net new workloads that are being built have an affinity for Linux.”
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It’s the end of crypto as we know it and I feel fine
Watching the current price madness is scary. Bitcoin is falling and rising in $500 increments with regularity and Ethereum and its attendant ICOs are in a seeming freefall with a few “dead cat bounces” to keep things lively. What this signals is not that crypto is dead, however. It signals that the early, elated period of trading whose milestones including the launch of Coinbase and the growth of a vibrant (if often shady) professional ecosystem is over.
Crypto still runs on hype. Gemini announcing a stablecoin, the World Economic Forum saying something hopeful, someone else saying something less hopeful – all of these things and more are helping define the current market. However, something else is happening behind the scenes that is far more important.
As I’ve written before, the socialization and general acceptance of entrepreneurs and entrepreneurial pursuits is a very recent thing. In the old days – circa 2000 – building your own business was considered somehow sordid. Chancers who gave it a go were considered get-rich-quick schemers and worth of little more than derision.
As the dot-com market exploded, however, building your own business wasn’t so wacky. But to do it required the imprimaturs and resources of major corporations – Microsoft, Sun, HP, Sybase, etc. – or a connection to academia – Google, Netscape, Yahoo, etc. You didn’t just quit school, buy a laptop, and start Snapchat.
It took a full decade of steady change to make the revolutionary thought that school wasn’t so great and that money was available for all good ideas to take hold. And take hold it did. We owe the success of TechCrunch and Disrupt to that idea and I’ve always said that TC was career pornography for the cubicle dweller, a guilty pleasure for folks who knew there was something better out there and, with the right prodding, they knew they could achieve it.
So in looking at the crypto markets currently we must look at the dot-com markets circa 1999. Massive infrastructure changes, some brought about by Y2K, had computerized nearly every industry. GenXers born in the late 70s and early 80s were in the marketplace of ideas with an understanding of the Internet the oldsters at the helm of media, research, and banking didn’t have. It was a massive wealth transfer from the middle managers who pushed paper since 1950 to the dot-com CEOs who pushed bits with native ease.
Fast forward to today and we see much of the same thing. Blockchain natives boast about having been interest in bitcoin since 2014. Oldsters at banks realize they should get in on things sooner than later and price manipulation is rampant simply because it is easy. The projects we see now are the Kozmo.com of the blockchain era, pie-in-the-sky dream projects that are sucking up millions in funding and will produce little in real terms. But for every hundred Kozmos there is one Amazon .
And that’s what you have to look for.
Will nearly every ICO launched in the last few years fail? Yes. Does it matter?
Not much.
The market is currently eating its young. Early investors made (and probably lost) millions on early ICOs but the resulting noise has created an environment where the best and brightest technical minds are faced with not only creating a technical product but also maintaining a monetary system. There is no need for a smart founder to have to worry about token price but here we are. Most technical CEOs step aside or call for outside help after their IPO, a fact that points to the complexity of managing shareholder expectations. But what happens when your shareholders are 16-year-olds with a lot of Ethereum in a Discord channel? What happens when little Malta becomes the de facto launching spot for token sales and you’re based in Nebraska? What happens when the SEC, FINRA, and Attorneys General from here to Beijing start investigating your hobby?
Basically your hobby stops becoming a hobby. Crypto and blockchain has weaponized nerds in an unprecedented way. In the past if you were a Linux developer or knew a few things about hardware you could build a business and make a little money. Now you can build an empire and make a lot of money.
Crypto is falling because the people in it for the short term are leaving. Long term players – the Amazons of the space – have yet to be identified. Ultimately we are going to face a compression in the ICO and, for a while, it’s going to be a lot harder to build an ICO. But give it a few years – once the various financial authorities get around to reading the Satoshi white paper – and you’ll see a sea change. Coverage will change. Services will change. And the way you raise money will change.
VC used to be about a team and a dream. Now it’s about a team, $1 million in monthly revenue, and a dream. The risk takers are gone. The dentists from Omaha who once visited accelerator demo days and wrote $25,000 checks for new apps are too shy to leave their offices. The flashy VCs from Sand Hill have to keep Uber and Airbnb’s plates spinning until they can cash out. VC is dead for the small entrepreneur.
Which is why the ICO is so important and this is why the ICO is such a mess right now. Because everybody sees the value but nobody – not the SEC, not the investors, not the founders – can understand how to do it right. There is no SAFE note for crypto. There are no serious accelerators. And all of the big names in crypto are either goldbugs, weirdos, or Redditors. No one has tamed the Wild West.
They will.
And when they do expect a whole new crop of Amazons, Ubers, and Oracles. Because the technology changes quickly when there’s money, talent, and a way to marry the two in which everyone wins.
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Peep the future of distributed ledgers with the leaders of Hyperledger, Parity Technologies and Tradeshift
As cryptocurrencies emerge from the speculative bloodletting of the past months, believers in the promise of distributed ledger technologies for business and consumer applications are casting about for what comes next.
On our stage at Disrupt San Francisco we’ll be welcoming some of the leading thinkers in how distributed ledgers can create an entirely new architecture for computing and new processes for almost every conceivable transaction framework.
For Brian Behlendorf, the executive director of Hyperledger, distributed ledger technologies represent a powerful path for the future of networked computing — no matter the underlying technology. That’s why Behlendorf –through the Linux Foundation — is investing resources in ensuring that viable open source distributed ledger projects are supported and coming to market for any number of applications for businesses and consumers.
One of the leading lights of the internet revolution, Behlendorf’s career shaping the future of the networked world began in 1993 when he co-founded Organic Inc. — the first business dedicated to building commercial websites. Going on to become one of the foundational architects of the Apache http protocol, Behlendorf has served as the chief technology officer of the World Economic Forum and as an executive director for the technology investment fund, Mithril Capital.
Meanwhile, Parity Technologies is attempting to ensure that businesses don’t need to worry about the underlying technologies at all. Selling a suite of services that are all enabled by distributed ledger technologies and cryptographic computing, Jutta Steiner is giving businesses a way through the maze of competing protocols with a service that can enable the creation and adoption of distributed apps for businesses.
“We see it as a way for people to build blockchains that fulfill their particular needs,” Steiner told our own Samantha Stein at our Blockchain event earlier this year in Zug. “One of the challenges we’re addressing in this is to come up with a scalable framework.”
Before Parity, Steiner was responsible for security and partner integration within the Ethereum Foundation when the public blockchain first launched in 2015. Steiner also co-founded Project Provenance — a London based start-up that employs blockchain technology to make supply chains more transparent.
Supply chains are at the heart of Tradeshift’s offerings — and the company is hoping that distributed ledgers will be too. That’s why the company created Tradeshift Frontiers, an innovation lab and incubator that will focus on transforming supply chains through emerging technologies, such as distributed ledgers, artificial intelligence and the Internet of Things.
“The use cases we’re working through Frontiers cover a very wide variety of themes, including supply chain financing, asset liquidity, and supply chain transparency,” said Gert Sylvest, co-founder and GM of Tradeshift Frontiers, at the time. “There is so much more potential than just cryptocurrencies.”
That potential will be one of the things that Sylvest, Steiner, and Behlendorf discuss. We’ll hope you’ll be in the audience to listen.
Disrupt SF will take place in San Francisco’s Moscone Center West from September 5 to 7. The full agenda is here, and you can still buy tickets right here.
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Tall Poppy aims to make online harassment protection an employee benefit
For the nearly 20 percent of Americans who experience severe online harassment, there’s a new company launching in the latest batch of Y Combinator called Tall Poppy that’s giving them the tools to fight back.
Co-founded by Leigh Honeywell and Logan Dean, Tall Poppy grew out of the work that Honeywell, a security specialist, had been doing to hunt down trolls in online communities since at least 2008.
That was the year that Honeywell first went after a particularly noxious specimen who spent his time sending death threats to women in various Linux communities. Honeywell cooperated with law enforcement to try and track down the troll and eventually pushed the commenter into hiding after he was visited by investigators.
That early success led Honeywell to assume a not-so-secret identity as a security expert by day for companies like Microsoft, Salesforce, and Slack, and a defender against online harassment when she wasn’t at work.
“It was an accidental thing that I got into this work,” says Honeywell. “It’s sort of an occupational hazard of being an internet feminist.”
Honeywell started working one-on-one with victims of online harassment that would be referred to her directly.
“As people were coming forward with #metoo… I was working with a number of high profile folks to essentially batten down the hatches,” says Honeywell. “It’s been satisfying work helping people get back a sense of safety when they feel like they have lost it.”
As those referrals began to climb (eventually numbering in the low hundreds of cases), Honeywell began to think about ways to systematize her approach so it could reach the widest number of people possible.
“The reason we’re doing it that way is to help scale up,” says Honeywell. “As with everything in computer security it’s an arms race… As you learn to combat abuse the abusive people adopt technologies and learn new tactics and ways to get around it.”
Primarily, Tall Poppy will provide an educational toolkit to help people lock down their own presence and do incident response properly, says Honeywell. The company will work with customers to gain an understanding of how to protect themselves, but also to be aware of the laws in each state that they can use to protect themselves and punish their attackers.
The scope of the problem
Based on research conducted by the Pew Foundation, there are millions of people in the U.S. alone, who could benefit from the type of service that Tall Poppy aims to provide.
According to a 2017 study, “nearly one-in-five Americans (18%) have been subjected to particularly severe forms of harassment online, such as physical threats, harassment over a sustained period, sexual harassment or stalking.”
The women and minorities that bear the brunt of these assaults (and, let’s be clear, it is primarily women and minorities who bear the brunt of these assaults), face very real consequences from these virtual assaults.
Take the case of the New York principal who lost her job when an ex-boyfriend sent stolen photographs of her to the New York Post and her boss. In a powerful piece for Jezebel she wrote about the consequences of her harassment.
As a result, city investigators escorted me out of my school pending an investigation. The subsequent investigation quickly showed that I was set up by my abuser. Still, Mayor Bill de Blasio’s administration demoted me from principal to teacher, slashed my pay in half, and sent me to a rubber room, the DOE’s notorious reassignment centers where hundreds of unwanted employees languish until they are fired or forgotten.
In 2016, I took a yearlong medical leave from the DOE to treat extreme post-traumatic stress and anxiety. Since the leave was almost entirely unpaid, I took loans against my pension to get by. I ran out of money in early 2017 and reported back to the department, where I was quickly sent to an administrative trial. There the city tried to terminate me. I was charged with eight counts of misconduct despite the conclusion by all parties that my ex-partner uploaded the photos to the computer and that there was no evidence to back up his salacious story. I was accused of bringing “widespread negative publicity, ridicule and notoriety” to the school system, as well as “failing to safeguard a Department of Education computer” from my abusive ex.
Her story isn’t unique. Victims of online harassment regularly face serious consequences from online harassment.
According to a 2013 Science Daily study, cyber stalking victims routinely need to take time off from work, or change or quit their job or school. And the stalking costs the victims $1200 on average to even attempt to address the harassment, the study said.
“It’s this widespread problem and the platforms have in many ways have dropped the ball on this,” Honeywell says.
Tall Poppy’s co-founders
Creating Tall Poppy
As Honeywell heard more and more stories of online intimidation and assault, she started laying the groundwork for the service that would eventually become Tall Poppy. Through a mutual friend she reached out to Dean, a talented coder who had been working at Ticketfly before its Eventbrite acquisition and was looking for a new opportunity.
That was in early 2015. But, afraid that striking out on her own would affect her citizenship status (Honeywell is Canadian), she and Dean waited before making the move to finally start the company.
What ultimately convinced them was the election of Donald Trump.
“After the election I had a heart-to-heart with myself… And I decided that I could move back to Canada, but I wanted to stay and fight,” Honeywell says.
Initially, Honeywell took on a year-long fellowship with the American Civil Liberties Union to pick up on work around privacy and security that had been handled by Chris Soghoian who had left to take a position with Senator Ron Wyden’s office.
But the idea for Tall Poppy remained, and once Honeywell received her green card, she was “chomping at the bit to start this company.”
A few months in the company already has businesses that have signed up for the services and tools it provides to help companies protect their employees.
Some platforms have taken small steps against online harassment. Facebook, for instance, launched an initiative to get people to upload their nude pictures so that the social network can monitor when similar images are distributed online and contact a user to see if the distribution is consensual.
Meanwhile, Twitter has made a series of changes to its algorithm to combat online abuse.
“People were shocked and horrified that people were trying this,” Honeywell says. “[But] what is the way [harassers] can do the most damage? Sharing them to Facebook is one of the ways where they can do the most damage. It was a worthwhile experiment.”
To underscore how pervasive a problem online harassment is, out of the four companies where the company is doing business or could do business in the first month and a half there is already an issue that the company is addressing.
“It is an important problem to work on,” says Honeywell. “My recurring realization is that the cavalry is not coming.”
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