Mark Zuckerberg
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Rebuilding employee philanthropy from the bottom up
In tech circles, it would be easy to assume that the world of high-impact charitable giving is a rich man’s game where deals are inked at exclusive black tie galas over fancy hors d’oeuvre. Both Mark Zuckerberg and Marc Benioff have donated to SF hospitals that now bear their names. Gordon Moore has given away $5B – including $600M to Caltech – which was the largest donation to a university at the time. And of course, Bill Gates has already donated $27B to every cause imaginable (and co-founded The Giving Pledge, a consortium of billionaires pledging to donate most of their net worth to charity by the end of their lifetime.)
For Bill, that means he has about $90B left to give.
For the average working American, this world of concierge giving is out of reach, both in check size, and the army of consultants, lawyers and PR strategists that come with it. It seems that in order to do good, you must first do well. Very well.
Bright Funds is looking to change that. Founded in 2012, this SF-based startup is looking to democratize concierge giving to every individual so they “can give with the same effectiveness as Bill and Melinda Gates.” They are doing to philanthropy what Vanguard and Wealthfront have done for asset management for retail investors.
In particular, they are looking to unlock dollars from the underutilized corporate benefit of matching funds for donations, which according to Bright Funds is offered by over 60% of medium to large enterprises, but only used by 13% of employees at these companies. The need for such a service is clear — these programs are cumbersome, transactional, and often offline. Make a donation, submit a receipt, and wait for it to churn through the bureaucratic machine of accounting and finance before matching funds show up weeks later.
Bright Funds is looking to make your company’s matching funds benefit as accessible and important to you as your free lunches or massages. Plus, Bright Funds charges companies per seat, along with a transaction fee to cover the cost of payment processing, sparing employees any expense.
It’s a model that is working. According to Bright Fund’s CEO Ty Walrod, Bright Funds customers see on average a 40% year-over-year increase in funds donated through the platform. More importantly, Bright Funds not only transforms an employee’s relationship to personal philanthropy, but also to the company they work for.
Grassroots Giving
This model of bottoms-up giving is a welcome change from the big foundation model which has recently been rocked by scandal. The Silicon Valley Community Foundation was the go-to foundation for The Who’s Who of Silicon Valley elite. It rode the latest tech boom to become the largest community foundation in eleven short years with generous stock donations from donors like Mark Zuckerberg ($1.8 billion), GoPro’s Nicholas Woodman ($500 million), and WhatsApp co-founder Jan Koum ($566 million). Today, at $13.5 billion, it surpasses the 80+ year old Ford Foundation in endowment size.
However, earlier this year, their star fundraiser Mari Ellen Loijens (credited with raising $8.3B of the $13.5B) was accused of repeatedly bullying and sexually harassing coworkers, allegations that the Foundation had “known about for years” but failed to act upon. In 2017, a similar case occurred when USC’s star fundraiser David Carrera stepped down on charges of sexual harassment after leading the university’s historic $6 billion fundraising campaign.
While large foundations and endowments do important work, their structure relies too much on whale hunting for big checks, giving an inordinate amount of power to the hands of a small group of talented fund raisers.
This stands in contrast to Bright Funds’ ethos — to lead a grassroots movement in empowering individual employees to make their dollar of giving count.
Rebuilding charitable giving for the platform age
Bright Funds is the latest iteration of a lineup of workplace giving platforms. MicroEdge and Cybergrants paved the way in the 80s and 90s by digitizing the giving experience, but was mainly on-premise, and lacked a focus on user experience. Benevity and YourCause arrived in 2007 to bring workplace giving to the cloud, but they were still not turnkey solutions that could be easily implemented.
Bright Funds started as a consumer platform, and has retained that heritage in its approach to product design, aiming to reduce friction for both employee and company adoption. This is why many of their first customers were midsized tech startups with limited resources and looking for a turnkey solution, including Eventbrite, Box, Github, and Contently . They are now finding their way upmarket into larger, more established enterprises like Cisco, VMWare, Campbell’s Soup Company, and Sunpower.
Bright Funds approach to product has brought a number of innovations to this space.
The first is the concept of a cause-focused “fund.” Similar to a mutual fund or ETF, these funds are portfolios of nonprofits curated by subject-matter experts tailored to a specific cause area (e.g. conservation, education, poverty, etc.). This solves one of the chief concerns of any donor — is my dollar being put to good use towards the causes I care about? Passionate about conservation? Invest with Jim Leape from the Stanford Woods Institute for the Environment, who brings over three decades of conservation experience in choosing the six nonprofits in Bright Fund’s conservation portfolio. This same expertise is available across a number of cause areas.
Additionally, funds can also be created by companies or employees. This has proven to be an important rallying point for emergency relief during natural disasters, where employees at companies can collectively assemble a list of nonprofits to donate to. In 2017, Cisco employees donated $1.8 million (including company matching) through Bright Funds to Hurricanes Harvey, Maria, and Irma as well as the central Mexico earthquakes, the current flooding in India and many more.
The second key feature of their product is the impact timeline, a central news feed to understand where your dollars are going across all your cause areas. This transforms giving from a black box transaction to an ongoing dialogue between you and your charities.
Lastly, Bright Funds wants to take away all the administrative burden that might come with giving and volunteering — everything from tracking your volunteer opportunities and hours, to one-click tax reporting across all your charitable donations. In short, no more shoeboxes of receipts to process through in April.
Doing good & doing well
Although Bright Funds is focused on transforming the individual giving experience, it’s paying customer at the end of the day is the enterprise.
And although it is philanthropic in nature, Bright Funds is not exempt from the procurement gauntlet that every enterprise software startup faces — what’s in it for the customer? What impact does workplace giving and volunteering have on culture and the bottom line?
To this end, there is evidence to show that corporate social responsibility has a an impact on recruiting the next generation of workers. A study by Horizon Media found that 81% of millennials expect their companies to be good corporate citizens. A separate 2015 study found that 62% of millennials said they’d take a pay cut to work for a company that’s socially responsible.
Box, one of Bright Fund’s early customers, has seen this impact on recruiting firsthand (disclosure: Box is one of my former employers). Like most tech companies competing for talent in the Valley, Box used to give out lucrative bonuses for candidate referrals. They recently switched to giving out $500 in Bright Funds gift credit. Instead of seeing employee referrals dip, Box saw referrals “skyrocket,” according to Box.org Executive Director Bryan Breckenridge. This program has now become “one of the most cherished cultural traditions at Box,” he said.
Additionally, like any corporate benefit, there should be metrics tied to employee retention. Benevity released a study of 2 million employees across 118 companies on their platform that showed a 57% reduction in turnover for employees engaged in corporate giving or volunteering efforts. VMware, one of Bright Fund’s customers, has seen an astonishing 82% of their 22,000 employees participate in their Citizen Philanthropy program of giving and volunteering, according to VMware Foundation Director Jessa Chin. Their full-time voluntary turnover rate (8%) is well below the software industry average of 13.2%.
Towards a Brighter Future
Bright Funds still has a lot of work to do. CEO Walrod says that one of his top priorities is to expand the platform beyond US charities, finding ways to evaluate and incorporate international nonprofits.
They have also not given up their dream of becoming a truly consumer platform, perhaps one day competing in the world of donor-advised funds, which today is largely dominated by big names like Fidelity and Schwab who house over $85B of assets. In the short term, Walrod wants to make every Bright Funds account similar to a 401K account. It goes wherever you work, and is a lasting record of the causes you care about, and the time and resources you’ve invested in them.
Whether the impetus is altruism around giving or something more utilitarian like retention, companies are increasingly realizing that their employees represent a charitable force that can be harnessed for the greater good. Bright Funds has more work to do like any startup, but it is empowering the next set of donors who can give with the same effectiveness as Gates, and one day, at the same scale as him as well.
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Here is where CEOs of heavily funded startups went to school
CEOs of funded startups tend to be a well-educated bunch, at least when it comes to university degrees.
Yes, it’s true college dropouts like Mark Zuckerberg and Bill Gates can still do well. But Crunchbase data shows that most startup chief executives have an advanced degree, commonly from a well-known and prestigious university.
Earlier this month, Crunchbase News looked at U.S. universities with strong track records for graduating future CEOs of funded companies. This unearthed some findings that, while interesting, were not especially surprising. Stanford and Harvard topped the list, and graduates of top-ranked business schools were particularly well-represented.
In this next installment of our CEO series, we narrowed the data set. Specifically, we looked at CEOs of U.S. companies funded in the past three years that have raised at least $100 million in total venture financing. Our intent was to see whether educational backgrounds of unicorn and near-unicorn leaders differ markedly from the broad startup CEO population.
Sort of, but not really
Here’s the broad takeaway of our analysis: Most CEOs of well-funded startups do have degrees from prestigious universities, and there are a lot of Harvard and Stanford grads. However, chief executives of the companies in our current data set are, educationally speaking, a pretty diverse bunch with degrees from multiple continents and all regions of the U.S.
In total, our data set includes 193 private U.S. companies that raised $100 million or more and closed a VC round in the past three years. In the chart below, we look at the universities most commonly attended by their CEOs:1
The rankings aren’t hugely different from the broader population of funded U.S. startups. In that data set, we also found Harvard and Stanford vying for the top slots, followed mostly by Ivy League schools and major research universities.
For heavily funded startups, we also found a high proportion of business school degrees. All of the University of Pennsylvania alum on the list attended its Wharton School of Business. More than half of Harvard-affiliated grads attended its business school. MBAs were a popular credential among other schools on the list that offer the degree.
Where the most heavily funded startup CEOs studied
When it comes to the most heavily funded startups, the degree mix gets quirkier. That makes sense, given that we looked at just 20 companies.
In the chart below, we look at alumni affiliations for CEOs of these companies, all of which have raised hundreds of millions or billions in venture and growth financing:
One surprise finding from the U.S. startup data set was the prevalence of Canadian university grads. Three CEOs on the list are alums of the University of Waterloo . Others attended multiple well-known universities. The list also offers fresh proof that it’s not necessary to graduate from college to raise billions. WeWork CEO Adam Neumann just finished his degree last year, 15 years after he started. That didn’t stop the co-working giant from securing more than $7 billion in venture and growth financing.
- Several CEOs attended more than one university on the list.
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Instagram says ‘you’re all caught up’ in first time-well-spent feature
Without a chronological feed, it can be tough to tell if you’ve seen all the posts Instagram will show you. That can lead to more of the compulsive, passive, zombie browsing that research suggests is unhealthy as users endlessly scroll through stale content hoping for a hit of dopamine-inducing novelty.
But with Instagram’s newest feature, at least users know when they’ve seen everything and can stop scrolling without FOMO. Instagram is showing some users a mid-feed alert after a bunch of browsing that says “You’re All Caught Up – You’ve seen all new post from the past 48 hours.” When asked about it, Instagram confirmed to TechCrunch that it’s testing this feature. It declined to give details about how it works, including whether the announcement means you’ve seen literally every post from people you follow from the last two days, or just the best ones that the algorithm has decided are worth showing you.
The feature could help out Instagram completists who want to be sure they never miss a selfie, sunset or supper pic. Before Instagram rolled out its algorithm in the summer of 2016, they could just scroll to the last post they’d seen or when they knew they’d last visited. Warning them they’ve seen everything could quiet some of the backlash to the algorithm, which has centered around people missing content they wanted to see because the algorithm mixed up the chronology.
But perhaps more importantly, it’s one of the app’s first publicly tested features that’s clearly designed with the “time well spent” movement in mind. Facebook CEO Mark Zuckerberg has been vocal about prioritizing well-being over profits, to the point that the network reduced the prevalence of viral videos in the feed so much that that app lost 1 million users in the U.S. and Canada in Q4 2017. “I expect the time people spend on Facebook and some measures of engagement will go down . . . If we do the right thing, I believe that will be good for our community and our business over the long term too,” he wrote.
But Instagram’s leadership had been quiet on the issue until last week, when TechCrunch broke news that buried inside Instagram was an unlaunched “Usage Insights” feature that would show users their “time spent.” That prompted Instagram CEO Kevin Systrom to tweet our article, noting “It’s true . . . We’re building tools that will help the IG community know more about the time they spend on Instagram – any time should be positive and intentional . . . Understanding how time online impacts people is important, and it’s the responsibility of all companies to be honest about this. We want to be part of the solution. I take that responsibility seriously.”
Instagram is preparing a “Usage Insights” feature that will show how long you spend in the app. Image via Jane Manchun Wong
It’s reassuring to hear that one of the world’s most popular, but also overused, social media apps is going to put user health over engagement and revenue. Usage Insights has yet to launch. But the “You’re All Caught Up” alerts show Instagram is being earnest about its commitment. Those warnings almost surely prompt people to close the app and therefore see fewer ads, hurting Instagram’s bottom line.
Perhaps it’s a product of Facebook and Instagram’s dominance that they can afford to trade short-term engagement for long-term sustainability of the product. Some companies like Twitter have been criticized for not doing more to kick abusers off their platforms because it could hurt their user count.
But with Android now offering time management tools and many urging Apple to do the same, the time-well-spent reckoning may be dawning upon the mobile app ecosystem. Apps that continue to exploit users by doing whatever it takes to maximize total time spent may find themselves labeled the enemy, plus may actually be burning out their most loyal users. Urging them to scroll responsibly could not only win their favor, but keep them browsing in shorter, healthier sessions for years to come.
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Facebook has a new job posting calling for chip designers
Facebook has posted a job opening looking for an expert in ASIC and FPGA, two custom silicon designs that companies can gear toward specific use cases — particularly in machine learning and artificial intelligence.
There’s been a lot of speculation in the valley as to what Facebook’s interpretation of custom silicon might be, especially as it looks to optimize its machine learning tools — something that CEO Mark Zuckerberg referred to as a potential solution for identifying misinformation on Facebook using AI. The whispers of Facebook’s customized hardware range depending on who you talk to, but generally center around operating on the massive graph Facebook possesses around personal data. While a camera might have a set of data points as a series of pixels, Facebook’s knowledge of you goes well beyond your list of friends and down to minute preferences you have — a set of data so large that it demands a new approach to speed up the process.
Most in the industry speculate that it’s being optimized for Caffe2, an AI infrastructure deployed at Facebook, that would help it tackle those kinds of complex problems. Customized silicon generally tends to be around optimizing inference (the “is that a cat” part of machine learning) or machine training (“this is what a cat is”). On either end, it’s based on speeding up relatively simple math operations based in a field called linear algebra. But we’ve been hearing about this for a bit now, and it seems like Facebook is about to be much more overt about the process.
FPGA is designed to be a more flexible and modular design, which is being championed by Intel as a way to offer the ability to adapt to a changing machine learning-driven landscape. The downside that’s commonly cited when referring to FPGA is that it is a niche piece of hardware that is complex to calibrate and modify, as well as expensive, making it less of a cover-all solution for machine learning projects. ASIC is similarly a customized piece of silicon that a company can gear toward something specific, like mining cryptocurrency.
Facebook’s director of AI research tweeted about the job posting this morning, noting that he previously worked in chip design:
Interested in designing ASIC & FPGA for AI?
Design engineer positions are available at Facebook in Menlo Park.I used to be a chip designer many moons ago: my engineering diploma was in Electrical… https://t.co/D4l9kLpIlV
— Yann LeCun (@ylecun) April 18, 2018
While the whispers grow louder and louder about Facebook’s potential hardware efforts, this does seem to serve as at least another partial data point that the company is looking to dive deep into custom hardware to deal with its AI problems. That would mostly exist on the server side, though Facebook is looking into other devices like a smart speaker. Given the immense amount of data Facebook has, it would make sense that the company would look into customized hardware rather than use off-the-shelf components like those from Nvidia.
Most of the other large players have found themselves looking into their own customized hardware. Google has its TPU for its own operations, while Amazon is also reportedly working on chips for both training and inference. Apple, too, is reportedly working on its own silicon, which could potentially rip Intel out of its line of computers. Microsoft is also diving into FPGA as a potential approach for machine learning problems.
Still, that it’s looking into ASIC and FPGA does seem to be just that — dipping toes into the water for FPGA and ASIC. Nvidia has a lot of control over the AI space with its GPU technology, which it can optimize for popular AI frameworks like TensorFlow. And there are also a large number of very well-funded startups exploring customized AI hardware, including Cerebras Systems, SambaNova Systems, Mythic, and Graphcore (and that isn’t even getting into the large amount of activity coming out of China). So there are, to be sure, a lot of different interpretations as to what this looks like.
One significant problem Facebook may face is that this job opening may just sit up in perpetuity. Another common criticism of FPGA as a solution is that it is hard to find developers that specialize in FPGA. While these kinds of problems are becoming much more interesting, it’s not clear if this is more of an experiment than Facebook’s full all-in on custom hardware for its operations.
But nonetheless, this seems like more confirmation of Facebook’s custom hardware ambitions, and another piece of validation that Facebook’s data set is becoming so increasingly large that if it hopes to tackle complex AI problems like misinformation, it’s going to have to figure out how to create some kind of specialized hardware to actually deal with it.
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The psychological impact of an $11 Facebook subscription
Would being asked to pay Facebook to remove ads make you appreciate their value or resent them even more? As Facebook considers offering an ad-free subscription option, there are deeper questions than how much money it could earn. Facebook has the opportunity to let us decide how we compensate it for social networking. But choice doesn’t always make people happy.
In February I explored the idea of how Facebook could disarm data privacy backlash and boost well-being by letting us pay a monthly subscription fee instead of selling our attention to advertisers. The big takeaways were:
- Mark Zuckerberg insists that Facebook will remain free to everyone, including those who can’t afford a monthly fee, so subscriptions would be an opt-in alternative to ads rather than a replacement that forces everyone to pay
- Partially decoupling the business model from maximizing your total time spent on Facebook could let it actually prioritize time well spent because it wouldn’t have to sacrifice ad revenue
- The monthly subscription price would need to offset Facebook’s ad earnings. In the US & Canada Facebook earned $19.9 billion in 2017 from 239 million users. That means the average user there would have to pay $7 per month
However, my analysis neglected some of the psychological fallout of telling people they only get to ditch ads if they can afford it, the loss of ubiquitous reach for advertisers, and the reality of which users would cough up the cash. Though on the other hand, I also neglected the epiphany a price tag could produce for users angry about targeted advertising.
What’s Best For Everyone
This conversation is relevant because Zuckerberg was asked twice by congress about Facebook potentially offering subscriptions. Zuckerberg endorsed the merits of ad-supported apps, but never ruled out letting users buy a premium version. “We don’t offer an option today for people to pay to not show ads” Zuckerberg said, later elaborating that “Overall, I think that the ads experience is going to be the best one. I think in general, people like not having to pay for a service. A lot of people can’t afford to pay for a service around the world, and this aligns with our mission the best.”
But that word ‘today’ gave a glimmer of hope that we might be able to pay in the future.
Facebook CEO and founder Mark Zuckerberg testifies during a US House Committee on Energy and Commerce hearing about Facebook on Capitol Hill in Washington, DC, April 11, 2018. (Photo: SAUL LOEB/AFP/Getty Images)
What would we be paying for beyond removing ads, though?. Facebook already lets users concerned about their privacy opt out of some ad targeting, just not seeing ads as a whole. Zuckerberg’s stumping for free Internet services make it seem unlikely that Facebook would build valuable features and reserve them for subscribers
Spotify only lets paid users play any song they want on-demand, while ad-supported users are stuck on shuffle. LinkedIn only lets paid users message anyone they want and appear as a ‘featured applicant’ to hirers, while ad-supported users can only message their connections. Netflix only lets paid users…use it at all.
But Facebook views social networking as a human right, and would likely want to give all users any extra features it developed like News Feed filters to weed out politics or baby pics. Facebook also probably wouldn’t sell features that break privacy like how LinkedIn subscribers can see who visited their profiles. In fact, I wouldn’t bet on Facebook offering any significant premium-only features beyond removing ads. That could make it a tough sell.
Meanwhile, advertisers trying to reach every member of a demographic might not want a way for people to pay to opt-out of ads. If they’re trying to promote a new movie, a restaurant chain, or an election campaign, they’d want as strong of penetration amongst their target audience as they can get. A subscription model punches holes in the ubiquity of Facebook ads that drive businesses to the app.
Resentment Vs Appreciation
But the biggest issue is that Facebook is just really good at monetizing with ads. For never charging users, it earns a ton of money. $40 billion in 2017. Convincing people to pay more with their wallets than their eyeballs may be difficult. And the ones who want to pay are probably worth much more than the average.
Let’s look at the US & Canada market where Facebook earns the most per user because they’re wealthier and have more disposable income than people in other parts of the world, and therefore command higher ad rates. On average US and Canada users earn Facebook $7 per month from ads. But those willing and able to pay are probably richer than the average user, so luxury businesses pay more to advertise to them, and probably spend more time browsing Facebook than the average user, so they see more of those ads.
Brace for sticker shock, because for Facebook to offset the ad revenue of these rich hardcore users, it might have to charge more like $11 to $14 per month.
With no bonus features, that price for something they can get for free could seem way too high. Many who could afford it still wouldn’t justify it, regardless of how much time they spend on Facebook compared to other media subscriptions they shell out for. Those who truly can’t afford it might suddenly feel more resentment towards the Facebook ads they’ve been scrolling past unperturbed for years. Each one would be a reminder that they don’t have the cash to escape Facebook’s data mines.
But perhaps it’s just as likely that people would feel the exact opposite — that having to see those ads really isn’t so bad when faced with the alternative of a steep subscription price.
People often don’t see worth in what they get for free. Being confronted with a price tag could make them more cognizant of the value exchange they’re voluntarily entering. Social networking costs money to operate, and they have to pay somehow. Seeing ads keeps Facebook’s lights on, its labs full of future products, and its investors happy.
That’s why it might not matter if Facebook can only get 4 percent, or 1 percent, or 0.1 percent of users to pay. It could be worth it for Facebook to build out a subscription option to empower users with a sense of choice and provide perspective on the value they already receive for free.
For more big news about Facebook, check out our recent coverage:
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ServiceTitan is LA’s least likely contender to be the next billion-dollar startup
The city of Glendale, Calif. seems like an unlikely place to grow one of the next billion-dollar startups in the booming Los Angeles tech ecosystem.
Located at the southeastern tip of the San Fernando Valley, the Los Angeles suburb counts its biggest employers as the adhesive manufacturer Avery Dennison; the Los Angeles industrial team for the real estate developer CBRE; the International House of Pancakes; Disney Consumer Products; DreamWorks Studios; Walt Disney Animation and Univision. “Silicon Beach” this ain’t.
But it’s here in the (other) Valley’s southernmost edge that investors have found a startup they consider to be the next potential billion-dollar “unicorn” that will come out of Los Angeles. The company is ServiceTitan, and its market… is air conditioners.
More specifically, it’s the contractors that service equipment like the heating, ventilation and cooling systems at commercial and residential properties across the U.S.
Founded by Ara Mahdessian and Vahe Kuzoyan in 2012, ServiceTitan is very much an up-and-coming billion-dollar business that’s a family (minded) affair.
Mahdessian and Kuzoyan met on a ski trip organized by the Armenian student associations at Stanford and the University of Southern California back when both men were in college.
Both programmers, the two reconnected after doing stints as custom developers during and after college, and then when they were developing tools for their families’ businesses as residential contractors in the Los Angeles suburb of Glendale.
The two men built a suite of services to help contractors like their fathers manage their businesses. Now following a $62 million round of funding led by Battery Ventures last month, the company is worth roughly $800 million, according to people with knowledge of the investment, and is on its way to becoming Los Angeles’ next billion-dollar business.
Battery isn’t the only marquee investor to find value in ServiceTitan’s business developing software managing day labor.
Iconiq Capital, the investment firm managing the wealth of some of Silicon Valley’s most successful executives (the firm counts Facebook chief executive Mark Zuckerberg, and senior staff like Dustin Moskovitz and Sheryl Sandberg; Twitter chief Jack Dorsey; and LinkedIn founder and chief executive Reid Hoffman among its clients, according to a 2014 Forbes article), has also taken a shine to the now-gargantuan startup from Glendale.
It was Iconiq that put a whopping $80 million into ServiceTitan just last year — and while the 2017 cash infusion may have been larger, the company’s valuation has continued to rise.
That’s likely due to a continually expanding toolkit that now boasts a customer relationship management system, efficient dispatching and routing, invoice management, mobile applications for field professionals and marketing analytics and reporting tools.
“ServiceTitan’s incredibly fast growth is a testament to the brisk demand for new mobile and cloud-based technology that is purpose-built for the tradesmen and women in our workforce,” said Battery Ventures general partner Michael Brown — who’s taking a seat on the ServiceTitan board.
What distinguishes the ServiceTitan business from other point solutions is that they’ve taken to targeting not mom-and-pop small businesses but franchises like Mr. Rooter and George Brazil. Gold Medal Service, John Moore Services, Hiller Plumbing, Casteel Air, Baker Brothers Plumbing and Air Conditioning and Bonney may not be household names, but they’re large providers of contractors who work under those brands.
The company counts 400 employees on staff, and will look to use the money to continue to grow out its suite of products and services, according to a March statement announcing the funding.
And as Battery Ventures investor Sanjiv Kalevar noted in a blog post last year, the opportunity for software companies serving blue-collar workers is huge.
For people sitting at our desks and working behind laptops on programs like Microsoft Office, it can be easy to overlook the large, sometimes forgotten, workforce out there in construction, manufacturing, transportation, hospitality, retail and many other multi-billion dollar industries. Indeed, more than 60% of U.S. workers and even more globally fall into these “blue collar” industries.
By and large, these workers have not benefitted much from recent technology improvements available to office-based workers—think new email and workplace-collaboration technologies, or advanced sales and HR systems. Never mind the long-term opportunities for companies in these sectors from technologies like artificial intelligence, drones, and virtual or augmented reality; hourly and field workers are dealing with much more basic on-the-job challenges, like finding work, getting their jobs done on time and getting paid. These more basic needs can be solved with seemingly simple technologies—software for billing, scheduling, navigation and many other business workflows. These kinds of technologies, unlike AI, don’t automate away workers. Instead, they empower them to be more efficient and productive.
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Zuckerberg owns or clones most of the “8 social apps” he cites as competition
Mark Zuckerberg’s flimsy defense when congress asked about a lack of competition to Facebook has been to cite that the average American uses eight social apps. But that conveniently glosses over the fact that Facebook owns three of the top 10 U.S. iOS apps: #4 Instagram, #6 Messenger, and #8 Facebook according to App Annie. The top 3 apps are games. Facebook is building its Watch video hub to challenge #5 YouTube, and has relentlessly cloned Stories to beat #7 Snapchat. And Facebook also owns #19 WhatsApp. Zoom in to just “social networking apps”, and Facebook owns the entire top 3.
“The average American I think uses eight different communication and social apps. So there’s a lot of different choice and a lot of innovation and activity going on in this space” Zuckerberg said when asked about whether Facebook is a monopoly by Senator Graham during yesterday’s Senate hearing, and he’s trotted out that same talking point that was on his note sheet during today’s House testimony.
But Facebook has relentlessly sought to acquire or co-opt the features of its competitors. That’s why any valuable regulation will require congress to prioritize competition. That means either breaking up Facebook, Instagram, and WhatsApp; avoiding rules that are easy for Facebook to comply with but prohibitively expensive for potential rivals to manage; or ensuring data portability that allows users to choose where to take their content and personal information.
Breaking up Facebook, or at least preventing it from acquiring established social networks in the future, would be the most powerful way to promote competition in the space. Facebook’s multi-app structure creates economies of scale in data that allow it to share ad targeting and sales teams, backend engineering, and relevancy-sorting algorithms. That makes it tough for smaller competitors without as much money or data to provide the public with more choice.
Regulation done wrong could create a moat for Facebook, locking in its lead. Complex transparency laws might be just a paperwork speed bump for Facebook and its army of lawyers, but could be too onerous for upstart companies to follow. Meanwhile, data collection regulation could prevent competitors from ever building as large of a data war chest as Facebook has already generated.
Data portability gives users the option to choose the best social network for them, rather than being stuck where they already are. Facebook provides a Download Your Information tool for exporting your content. But photos come back compressed, and you don’t get the contact info of friends unless they opt in. The list of friends’ names you receive doesn’t allow you to find them on other apps the way contact info would. Facebook should at least offer a method for your exporting hashed version of that contact info that other apps could use to help you find your friends there without violating the privacy of those friends. Meanwhile, Instagram entirely lacks a Download Your Information tool.
Congress should push Zuckerberg to explain what apps compete with Facebook as a core identity provider, an omni-purpose social graph, or cross-platform messaging app. Without choice, users are at the mercy of Facebook’s policy and product examples. All of the congressional questions about data privacy and security don’t mean much to the public if they have no viable alternative to Facebook. The fact that Facebook owns or clones the majority of the 8 social apps used by the average American is nothing for Zuckerberg to boast about.
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Zuckerberg’s boring testimony is a big win for Facebook
Mark Zuckerberg ran his apology scripts, trotted out his lists of policy fixes and generally dulled the Senate into submission. And that constitutes success for Facebook.
Zuckerberg testified before the joint Senate judiciary and commerce committee today, capitalizing on the lack of knowledge of the politicians and their surface-level questions. Half the time, Zuckerberg got to simply paraphrase blog posts and statements he’d already released. Much of the other half, he merely explained how basic Facebook functionality works.
The senators hadn’t done their homework, but he had. All that training with D.C. image consultants paid off.
Facebook CEO Mark Zuckerberg arrives to testify before a joint hearing of the US Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee on Capitol Hill, April 10, 2018 in Washington, DC. (Photo: JIM WATSON/AFP/Getty Images)
Sidestepping any gotcha questions or meme-worthy sound bites, Zuckerberg’s repetitive answers gave the impression that there’s little left to uncover, whether or not that’s true. He made a convincing argument that Facebook is atoning for its sins, is cognizant of its responsibility and has a concrete plan in place to improve data privacy.
With just five minutes per senator, and them each with a queue of questions to get through, few focused on the tougher queries, and even fewer had time for follow-ups to dig for real answers.
Did Facebook cover up the Cambridge Analytica scandal or decide against adding privacy protections earlier to protect its developer platform? Is it a breach of trust for Zuckerberg and other executives to have deleted their Facebook messages out of recipients’ inboxes? How has Facebook used a lack of data portability to inhibit the rise of competitors? Why doesn’t Instagram let users export their data the way they can from Facebook?
The public didn’t get answers to any of those questions today. Just Mark’s steady voice regurgitating Facebook’s talking points. Investors rewarded Facebook for its monotony with a 4.5 percent share price boost.
That’s not to say today’s hearing wasn’t effective. It’s just that the impact was felt before Zuckerberg waded through a hundred photographers to take his seat in the Senate office.
Facebook knew this day was coming, and worked to build Zuckerberg a fortress of facts he could point to no matter what he got asked:
- Was Facebook asleep at the wheel during the 2016 election? Yesterday it revealed it had deleted the accounts of Russian GRU intelligence operatives in June 2016.
- How will Facebook prevent this from happening again? Last week it announced plans to require identity and location verification for any political advertiser or popular Facebook Page, and significantly restricted its developer platform.
- Is Facebook taking this seriously? Zuckerberg wrote in his prepared testimony for today that Facebook is doubling its security and content moderation team from 10,000 to 20,000, and that “protecting our community is more important than maximizing our profits.”
- Is Facebook sorry? “We didn’t take a broad enough view of what our responsibility is and that was a huge mistake. That was my mistake,” Zuckerberg has said, over and over.
Facebook may never have made such sweeping changes and apologies had it not had today and tomorrow’s testimony on the horizon. But this defensive strategy also led to few meaningful disclosures, to the detriment of the understanding of the public and the Senate — and to the benefit of Facebook.
WASHINGTON, DC – APRIL 10: Facebook co-founder, Chairman and CEO Mark Zuckerberg testifies before a combined Senate Judiciary and Commerce committee hearing in the Hart Senate Office Building on Capitol Hill April 10, 2018 in Washington, DC. Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. (Photo by Chip Somodevilla/Getty Images)
We did learn that Facebook is working with Special Counsel Robert Mueller on his investigation into election interference. We learned that Zuckerberg thinks it was a mistake not to suspend the advertising account of Cambridge Analytica when Facebook learned it had bought user data from Dr. Aleksandr Kogan. And we learned that the senate will “haul in” Cambridge Analytica for a future hearing about data privacy.
None of those are earth-shaking.
Perhaps the only fireworks during the testimony came when Senator Ted Cruz laid into Zuckerberg over the Gizmodo report citing that Facebook’s trending topics curators suppressed conservative news trends. Cruz badgered Zuckerberg about whether he believes Facebook is politically neutral, whether Facebook has ever taken down Pages from liberal groups like Planned Parenthood or MoveOn.org, if he knows the political leanings of Facebook’s content moderators and whether Facebook fired Oculus co-founder Palmer Luckey over his [radical conservative] political views.
Zuckerberg maintained that he and Facebook are neutral, but that last question was the only one of the day that seemed to visibly perturb him. “That is a specific personnel matter than seems like it would be inappropriate…” Zuckerberg said before Cruz interrupted, pushing the CEO to exasperatedly respond, “Well then I can confirm that it was not because of a political view.” It should be noted that Cruz has received numerous campaign donations from Luckey.
Full exchange between Senator @tedcruz and Mark Zuckerberg where Senator Ted Cruz questions the Facebook CEO about the censorship of Conservatives on his platform. pic.twitter.com/c6d7jwDbnJ
— The Columbia Bugle
(@ColumbiaBugle) April 10, 2018
This was the only time Zuckerberg seemed flapped, because he knows the stakes of the public perception of Facebook’s political leanings. Zuckerberg, many Facebook employees and Facebook’s home state of California are all known to lean left. But if the company itself is seen that way, conservative users could flee, shattering Facebook’s network effect. Yet again, Zuckerberg nimbly avoided getting cornered here, and was aided by the bell signaling the end of Cruz’s time. He never noticeably raised his voice, lashed back at the senators or got off message.
By the conclusion of the five hours of questioning, the senators themselves were admitting they hadn’t watched the day’s full testimony. Viewers at home had likely returned to their lives. Even the press corps’ eyes were glazing over. But Zuckerberg was prepared for the marathon. He maintained pace through the finish line. And he made it clear why marathons aren’t TV spectator sports.
The question is no longer what revelations would come from Mr. Zuckerberg going to Washington. Tomorrow’s testimony is likely to go similarly. It’s whether Facebook can coherently execute on the data privacy promises it made leading up to today. This will be a “never-ending battle” as Zuckerberg said, dragging out over many years. And again, that’s in Facebook’s interest. Because in the meantime, everyone’s going back to scrolling their feeds.
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Zuckerberg tells Congress Facebook is not listening to you through your phone
Facebook CEO Mark Zuckerberg officially shot down the conspiracy theory that the social network has some way of keeping tabs on its users by tapping into the mics on people’s smartphones. During Zuckerberg’s testimony before the Senate this afternoon, Senator Gary Peters had asked the CEO if the social network is mining audio from mobile devices — something his constituents have been asking him about, he said.
Zuckerberg denied this sort of audio data collection was taking place.
The fact that so many people believe that Facebook is “listening” to their private conversations is representative of how mistrustful users have grown of the company and its data privacy practices, the Senator noted.
“I think it’s safe to say very simply that Facebook is losing the trust of an awful lot of Americans as a result of this incident,” said Peters, tying his constituents’ questions about mobile data mining to their outrage over the Cambridge Analytica scandal.
Questions about Facebook’s mobile data collection practices aren’t anything new, however.
In fact, Facebook went on record back in 2016 to state — full stop — that it does not use your phone’s microphone to inform ads or News Feed stories.
Despite this, it’s something that keeps coming up, time and again. The Wall Street Journal even ran an explainer video about the conspiracy last month. And yet none of the reporting seems to quash the rumor.
People simply refuse to believe it’s not happening. They’ll tell you of very specific times when something they swear they only uttered aloud quickly appeared in their Facebook News Feed.
Perhaps their inability to believe Facebook on the matter is more of an indication of how precise — and downright creepy — Facebook’s ad targeting capabilities have become over the years.
Peters took the opportunity today to ask Zuckerberg this question straight on today, during Zuckerberg’s testimony.
“Something that I’ve been hearing a lot from folks who have been coming up to me and talking about a kind of experience they’ve had where they’re having a conversation with friends — not on the phone, just talking. And then they see ads popping up fairly quickly on their Facebook,” Peters explained. “So I’ve heard constituents fear that Facebook is mining audio from their mobile devices for the purposes of ad targeting — which I think speaks to the lack of trust that we’re seeing here.”
He then asked Zuckerberg to state if this is something Facebook did.
“Yes or no: Does Facebook use audio obtained from mobile devices to enrich personal information about its users?,” Peters asked.
Zuckerberg responded simply: “No.”
The CEO then added that his answer meant “no” in terms of the conspiracy theory that keeps getting passed around, but noted that the social network does allow users to record videos, which have an audio component. That was a bit of an unnecessary clarification, though, given that the question was about surreptitious recording, not something users were explicitly recording media to share.
“Hopefully that will dispel a lot of what I’ve been hearing,” Peters said, after hearing Zuckerberg’s response.
We wouldn’t be too sure.
There have been a number of lengthy explanations of the technical limitations regarding a project of this scale, which have also pointed out how easy it would be to detect this practice, if it were true. But there are still those people out there who believe things to be true because they feel true.
And at the end of the day, the fact that this conspiracy refuses to die says something about how Facebook users view the company: as a stalker that creeps on their privacy, and then can’t be believed when it tells you, “no, trust me, we don’t do that.”
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Mark Zuckerberg: “We do not sell data to advertisers”
While many of us in the tech world are familiar with Facebook’s business model, there is a common misconception among people that Facebook collects information about you and then sells that information to advertisers.
Zuckerberg wants everyone (especially the U.S. Senate) to know that’s not the case, and has laid forth the most simple example to explain it.
During his testimony, the Facebook CEO clarified to Senator John Cornyn that Facebook does not sell data.
There is a very common misconception that we sell data to advertisers, and we do not sell data to advertisers. What we allow is for advertisers to tell us who they want to reach and then we do the placement. So, if an advertiser comes to us and says, ‘Alright, I’m a ski shop and I want to sell skis to women,’ then we might have some sense because people shared skiing related content or said they were interested in that. They shared whether they’re a woman. And then we can show the ads to the right people without that data ever changing hands and going to the advertiser. That’s a very fundamental part of how our model works and something that is often misunderstood.
While, again, this may seem straightforward to many of us, Zuckerberg found himself having to explain more than once that Facebook does not sell data during his Senate testimony.
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