"Every large company is just another color of a spore in a petri dish." In the latest ‘Decoding the New Economy’ video, internet pioneer Doc Searls discusses The Respect Network, online privacy and the future of business on the web. Doc Searls is one of the internet's pioneers who helped write The Cluetrain Manifesto, which laid out many of the ideas that underpinned the philosophies driving the early days of the internet. Searls' visit to Sydney was part of the rolling worldwide launch of the Respect Network, a system designed to improve internet users' privacy through 'personal clouds' of information where people can choose to share data with companies and others. A big reset button for business In many ways The Respect Network shows how the internet has evolved since the days of the Cluetrain Manifesto, something that Searls puts in context. "We wrote the Cluetrain Manifesto in 1995," says Searls. "At that time Microsoft ruled the world, Apple was considered a failure – Steve Jobs had come along and they had the iMac but it was all yet to be proven – Google barely existed and Facebook didn't exist at all." "On the one hand we saw the internet, we being the four authors of the Cluetrain Manifesto, and this whole new thing in the world that basically hit a big reset button on 'business as usual'." "It did that. I think we're vindicated on that." New giants, new data "What we have now are new industrial giants; Apple became an industrial giant, Microsoft are fading away, Nokia was the number one smartphone company and they're all but gone." One of the key things with today's markets in Searls' view is the amount of information that businesses can collect on their customers; something that ties into the original Cluetrain idea of all markets being conversations. With the evolution of Big Data and the internet of things, Searls sees challenges for companies using old marketing methods which rely upon online tracking. Something that's a challenge for social media services and many of the existing internet giants. "The interesting thing is there's a lot more intelligence that a company can get directly from their customers from things they already own than following us around on the internet." Breaking the silos Searls also sees the current trend towards the internet being divided into little empires as a passing phase, "every company wants a unique offering but we need standards." For Searls, the key thing about the current era of the internet is we're only at the beginning of a time that empowers the individual, "the older I get, the earlier it seems." "Anyone of us can do anything," Searls says. "That's the power – I'm optimistic about everything." This article first appeared on SmartCompany.
On Tuesday night John Collison, who co-founded online payments startup Stripe with his brother Patrick Collison, spoke with SEEK co-founder Paul Bassat on all things Stripe, startup and internet related, to help celebrate Stripe’s Australian launch. Here are our top seven pieces of advice Collison offered startups on a range of topics. 1. On co-founders: “You want to have a very high level of trust and the ability to work together because there’s so much for you to do, there isn’t time to sort out other stuff. Every day there’s this big lump of work and you both attack it and it works great, but as the company grows in size you really have to start splitting the responsibility.” 2. On co-CEOs: Collison recalled a chat he had with an investor while searching for funding for Stripe during which the investor highlighted appointing co-CEOs doesn’t work. “He tells this to people anytime they come in and say they are co-CEOs,” Collison says. “He says ‘ok just to clarify here, you’re trying to be co-CEOs? So you’re making everything confusing for all your employees today and all the employees you’ll ever hire. Who will get decisions from the both of you and they’ll never quite understand where they stand, just so you guys don’t have an awkward conversation right now?” 3. On hiring: “We hired fairly slowly throughout Stripe. “We’ve always been willing to simply not hire for a role and leave it unfilled rather than settle and be willing to compromise. And I think it’s been really important if you’re looking at it from a really long term perspective. “When you’re hiring a person you’re not just hiring them, you’re hiring the next ten people after them. I remember when we were hiring a graphic designer, it took a year to find the right person and so for that intervening year Stripe was just really ugly. “But again we preferred to be ugly for that year and have the right designer over the next many years, than settle immediately. They’re going to affect the quality or the calibre of people you recruit after that. You’re not hiring on a role by role basis, you’re gradually corralling people into this nebulous sphere. “Your ability to directly influence hires actually decreases as the group grows in size so you better hope you’re doing a good job with those early hires. 4. The future of e-commerce? “The way we think about it is, if we’re just getting people to move over from a competitor to Stripe, stirring up the existing pot but not actually changing things, that’s not actually that interesting. “The global e-commerce market, coming up with these figures always involves a heavy dose of making up numbers, but people generally put it at around a trillion dollars, and it sounds like a big figure, but is it actually that big? “Around two per cent of consumer spending globally happens online right now. You can kind of argue where that’s going to end up, and if you base it on the time you all spend online on our phones, we’re going to end up with a very significant spend of our portion online.” 5. How to build a successful global business? “If you think of any global business that has been very successful, you quickly find they have a pretty clear idea about their core competency. “I use this app if I need to travel, and I’m not using Airbnb, I’ll open Hotel Tonight and book the first thing available, they’re heavily discounted, but I realised my loyalty has shifted, it’s not with any particular hotel chain, it’s now with the app itself and staying in Hotel Tonight. “They decided that the really valuable brand, the really valuable piece to own is the app and the booking experience and who runs the hotel and who employs all the people that’s not that important. “If you’re a hotel that’s terrible. You’ve spend decades building up this brand. A lot of these companies have backed themselves into these corners.” 6. Do you need to go to Silicon Valley to start a startup? “In general I think people see Silicon Valley as this place that has a monopoly on tech innovation and I think there’s actually some pretty good reason to believe it’s becoming increasingly spread out. “You’re getting to a point where a team of 50 or a team 100 talented people can completely disrupt a market. “I think the jury is still out a bit on how much the availability of capital affects things, because certainly there are plenty of problems where you do need outside capital for the tech to grow quickly, otherwise it can be very slow.” 7. Is Silicon Valley encouraging the best and brightest of our generation to only solve problems felt by the middle class? “I think it’s actually a very good thing to be worried about. We solve problems for people like us, and so we come from a very privileged background so we’re going to solve problems of people from our background and there’s a large spate of the population that you ignore. “People talk about WhatsApp being acquired by Facebook for $19 billion dollars, but I think there’s kind a bit of an availability bias here. You only hear about the most egregious examples right. You hear about Yo! getting funding, but you don’t hear about Theranos in Silicon Valley which does blood diagnostics on your iPhone and they’ve raised $400 million. No one talks about it because it’s more fun to talk about Yo! “You look at where WhatsApp was most popular, it was in reasonably poorer countries like India where the cell phone providers who previously were charging these extortionist rates. [WhatsApp] came along and used the fact that people had smartphones to completely eliminate $100 million of carrier revenue from SMS.”
Anonymous messaging app Secret has raised $25 million from a group of investors led by Index Ventures. Sources tell the Wall Street Journal investors now value the company at $100 million. It follows a valuation of $40 million just four months ago. Secret was founded just nine months ago in San Francisco and it is likely among the fastest of any startup to reach a nine-figure valuation. LinkedIn acquires Newsle LinkedIn has announced it has acquired Newsle, a service that lets users important their contacts from Facebook or LinkedIn and scans the web to alert them whether anyone in their network has been mentioned on the web. In a post on LinkedIn’s blog, the company says LinkedIn and Newsle share a common goal. “We both want to provide professional insights that make you better at what you do,” it says. “For example, knowing more about the people in your network – like when they’re mentioned in the news – can surface relevant insights that help you hit your next meeting with them out of the park.” Google X director joins Amazon Babak Parviz, Google X director and founder of the Google Glass and contact lens projects at the tech giant has left the company to join Amazon.
An Australian startup is pushing back against businesses using people’s data without their consent by allowing its users to manage and understand their online identity. Founder and chief executive of Meeco, Katryna Dow, told StartupSmart she hopes her platform will make it easier for people to organise their digital life and put themselves in control of their own data. “It’s a way for people to own, aggregate and analyse their personal data for them to be able to draw insight from that and to decide who or how they want that information to be shared,” she says. The idea for Meeco came to Dow while watching the film Minority Report just over a decade ago. In the film, there is a scene where the protagonist is being bombarded by targeted advertising. “I remember walking out of the cinema thinking I’m not sure that’s a world I would like to be living in,” says Dow. “I then pushed it out of my mind for a number of years but kept returning to it.” Three years ago, Dow decided to forge ahead with the idea – bootstrapping the project until January when she found an angel investor. There is an increasing awareness around online security and the fact people’s online data is valuable. According to Dow, more than 80% of online activity is tracked and sold by third parties – often without users’ direct consent or knowledge. “What most people don’t realise is that it is a multi-trillion dollar industry,” she says. “Most people don’t realise that their data or information is actually monetised every single day.” Recently, social media giant Facebook came under fire for attempting to manipulate people’s emotions. The issue made headlines around the world and raised serious questions about the ethical conduct of technology companies. Dow says she would like to see more people discuss issues around how people’s data is used. “Your data is the most valuable when it’s accurate, in context, up to date and if it’s matched to your intention,” she says. “Right now we give a lot of that intention away and it is monetised. We want brands and businesses to respectively connect with people, use the data with transparency and incentivise people for sharing their data.” When asked what her advice would be to entrepreneurs just starting out, Dow says it is important to recognise it isn’t easy for startups to get off the ground. “As a woman who is not an engineer who is doing a tech startup, if I was to say it was simple and I was welcomed with open arms that would be a lie,” she says. However, Dow points out the tough startup environment in Australia has helped her grow not just as an entrepreneur but as a person. “You have to be really good at rejection, at hearing feedback,” she says. “Feedback helped me refine the idea.”
Business blogging is now firmly wedged in the consciousness of Australia. Organisations of all sizes are increasingly heading online to share their thoughts about everything from product development to industry commentary and expert advice. While this enthusiasm is admirable, simply writing content and hoping people will come to your site isn’t enough anymore, especially if you’re starting from scratch. To really get the most out of your brand's blog, it’s essential to have a degree of technical know-how, or you’ll end up wasting a huge amount of time, effort and money. This is an issue we’re going to be discussing a lot at Social Media Week Sydney in September, and here’s our guide to maximising the potential of your brand blog. 1. Think carefully about how you build your blog There’s a multitude of platforms available to build a blog in, and each web developer will have their preference. Getting this right is important. From a search engine optimisation (SEO) perspective WordPress is the best option. It’s extremely cost-effective, and having run blogs across many platforms, WordPress just seems to perform better and is extremely easy to use. 2. Think about Plug-ins One of WordPress’ great advantages is that its software is open source. That means there’s huge amount of free plug-ins available that can enhance the performance of your blog and tailor it to your requirements. All these can be searched for and uploaded via the WordPress ‘plugins’ tab on the left of the back-end dashboard. Essentials include Yoast, a simple-to-use SEO tool to maximise the visibility of your posts, and Google XML Sitemaps, a tool that generates a special XML sitemap which will help search engines better index your blog. Both these tools result in a more visible blog, which can only be a good thing. 3. Properly research your content As dumb as it sounds, planning and researching what content you write about is an essential part of running a successful blog. Q&A app, Quora is a good starting point, allowing you to track the most popular questions around a particular topic. Once you know what people are asking, then you can answer it in your blog post. And if you’re one of the lucky people to be on Facebook Graph Search, you can see what your brand community is into. Just go to Graph Search and type: Pages liked by people who like ________ (inserting your page name). This will give you a list of pages your fans like and follow, which you can then use as a basis to keep on top of the topics and issues your fans care about – and craft your content around this. 4. Properly optimise your content for search Once you’ve decided what you’re going to write about, then make sure your blog post is properly optimised. We’ve already mentioned Yoast, but you also need to tag each post with the relevant key words, and come up with a killer headline. This should both draw people in (think BuzzFeed), but also be optimised for search. A quick and easy way to do this is through Soovle – simply start typing your proposed headline and see what people are searching for around this. Also get your head around Google’s keyword planner, which allows you to identify the most popular key words used around a particular topic. Once you’ve found them, make sure you include them in your headline and first paragraph. 5. Embrace ‘hub and spoke’ One of the key ways to create an audience for your blog is by channelling readers from your existing social media channels. This approach is known as ‘hub and spoke’ where each time you make a blog post, you also post about it on your social media channels. If you’ve not got any social media channels, then get some, quick! Start with Twitter, Facebook and Google+, and you’ve got the lion’s share of audience. 6. Get your head around metrics Whatever blog platform you use, you should have Google Analytics set up for it, as well as on your company website. Your in-house tech expert will know how to do this. Key metrics in analytics include bounce rate – this is the percentage of people visiting your blog then ‘bouncing’ straight off it. A lower bounce rate indicates a more engaged readership. Analytics also gives you an idea of what blog content is most appealing, allowing you to refine it accordingly. The emphasis should always be on using the data to constantly refine your creative approach when it comes to blogging. 7. Think about what success looks like Finally, think honestly about what success looks like. Forget about your blog driving sales (for now). That’s a long way off. Is it about building an engaged, loyal readership? Is it about driving traffic to your website? Or is it about establishing a thought-leadership position for your company? Whatever it is, stay focused on achieving it, and set challenging but not impossible metrics. This post was written by Will Ockenden, a UK and Sydney-based social media consultant, and executive member of Social Media Week Sydney.
In the pervasively connected world of the 21st century, creating and sharing knowledge has never been easier. But the fact remains that many people still lack the skills required to access this information and an inequity gap is growing. Consider this quote: You know you’re from the ‘90s if you remember being disappointed when the CD’s leaflet didn’t have the lyrics to the songs. How else were you going to learn that damn line on track three? For those of us with smartphones in our pockets, we simply Google the lyrics and voilà! The answer materialises in less than a second. Yet this is a privilege available only to those who have access to the internet and the means to use it. Inequality of access Two-thirds of the world’s population do not have access to the internet, many of whom are women. These 4.6 billion people rely on the lyrics in the CD case to learn that song, assuming they have a CD player at all. This is a representative issue on the far side of the great digital divide between the technically literate and illiterate. The benefits of digital technology can only be realised if people are empowered with the knowledge and skills to access and use them. In developing countries, women are 25% less likely than men to be online. This gap soars to 45% in regions such as sub-Saharan Africa. By way of comparison, in both France and the US, women’s internet use exceeds that of men. Illiteracy is a barrier to online access that affects women more than men. Averaged across all developing countries, 75% of women are literate compared to 86% of men. In India, as few as 51% of women are literate compared to 75% of men. Internet-based economic activity in India accounts for more than 5% of GDP growth. Without access to the internet, and the fundamental skills required to use it, women cannot benefit from the tools, resources and opportunities that the internet affords. Bringing women into the mainstream of the digital revolution can empower them with access, information, choices and opportunities that they have never had before. Not just for themselves, but for their families, communities and nation. But what might this look like? Being digitally literate means more than simply knowing how to operate a computer. Digital literacy means having the ability to find resources, critically evaluate and create information, and to do this by using digital technology. UNESCO considers it a necessary life skill. Technology is knowledge and power Digital literacy promotes democracy by giving access to a vast repository of knowledge. It also provides a platform from which to speak out and make your views heard. An Iranian woman, for example, who posted a scarf-less photo of herself on Facebook, now has over 230,000 followers who are supporting her crusade of bareheaded subversion. These women want to voice their opposition to the compulsory hijab. Facebook gives them the means. Social networking sites greatly increase women’s understanding of what is possible, giving them a powerful tool that can be used to change their situation. For women in developing countries, the internet is an open doorway to tangible benefits; education and employment opportunities. According to Plan UK, an extra year of education increases a woman’s income by 10-20%. It is a necessary step on the road to breaking the cycle of poverty. A number of worthy initiatives are underway to develop women’s digital literacy skills. The Women’s Annex Foundation was established to train women in digital literacy so they can create a viable economic model for themselves and their families. The She Will Connect project, an initiative by Intel, is similarly committed to improving the digital literacy skills of women in developing countries. Intel recognises the role that technology plays in improving the quality of and access to education. Closing the gender gap There is a recognised link between a woman’s level of education and the size of families. The more educated she becomes, the fewer children she is likely to have. With over-population being one of the principle difficulties faced by developing countries, digital literacy has the potential to give women access to education and the means to begin reversing the trend towards ever-expanding populations in the developing world. The inequality of internet access around the world is compounded by where you live and your gender. If you are a woman in a developing part of the world, you are likely to be coming up very short on access to the kinds of digital resources that are readily available elsewhere. This can make a big difference to the quality of life for your whole family. The authors do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations. This article was originally published on The Conversation. Read the original article.
YouTube has followed in the footsteps of Netflix and is now publicly shaming internet providers who provide slow video. When videos have trouble buffering, blur or won’t play at all, YouTube offers a new service which allows them to find out why. It takes you to a new Google website which displays video playback quality for internet service providers in your area. Information gathered by NSA on ordinary internet users far outweighs specific targets Nine out of 10 account holders found in a large cache of conversations intercepted by the NSA were not the intended surveillance targets, according to the results of a four month-investigation by the Washington Post. The investigation reviewed roughly 160,000 intercepted email and instant message conversations and included medical records sent from one family member to another, resumes from job hunters and academic transcripts of schoolchildren. Facebook experiments had little oversight Until recently, Facebook’s Data Science group operated with few boundaries, a former member of the team has told the Wall Street Journal. At a university, researchers normally have to rely on consent from participants to conduct studies. Facebook relied on its Terms of Service, which now say that user data may be used for research. Former Facebook data scientist Andrew Ledvina recalled a minor experiment in which he and a product manager ran a test without telling anyone else at the company. Overnight The Dow Jones Industrial Average is up 92.02 to 17,068.26. The Australian dollar is currently trading at US94 cents.
Events e-commerce platform Eventbrite, which officially launched in Australia in March, has released data to quantify the return on investment (ROI) social media is having on those who use it to promote and market their events. By analysing all sales across its marketplace in 2013, Eventbrite found that a single share on social media generates nine visits to an event page and $4.80 in additional revenue back to Australian organizers. This compares with a return of $3.70 (AUD) globally. Twitter shares are the most effective generating two to four times more revenue and pageviews than other social channels. The findings from Eventbrite’s data analysis, which have not included Australia before, offer a great insight into the monetary and promotional value of a customer sharing through social channels – namely Facebook, Twitter and LinkedIn. Eventbrite’s International Expansion Manager, Elsita Meyer-Brandt told StartupSmart that the findings could be extrapolated to other marketing activities though for their purposes they were purely focussed on events. “The bottom line is that social media is an effective way for people to promote and generate revenue for those in the event space,” Meyer-Brandt says. “This is especially important for startups trying to build a community around their brand.” The value of customers sharing on social media Eventbrite’s data reveals that a share on Facebook, Twitter or LinkedIn drives an average of $4.80 in additional revenue back to the organizer. Twitter drives the most value at $10.90 per share, followed by Facebook at $4.10 and then LinkedIn at $3.20. “If you think about it, every share is essentially ‘free revenue’,” Meyer-Brandt says. Social media is also proven to drive traffic, with a single share resulting in nine additional visits, on average. Again, Twitter leads this trend with one share generating 38 additional visits, while LinkedIn drives 11 visits per share and Facebook drives seven visits per share. For additional sales, on average it takes four shares, with Twitter again being the most effective channel, with only two shares resulting in an additional sale, followed by Facebook and LinkedIn both at five. Twitter is the most valuable social channel Compared to Facebook and LinkedIn, Twitter is by far the most effective driver of revenue and traffic in Australia. Over the last two years, Eventbrite has seen Twitter’s influence increase while Facebook’s has decreased. Meyer-Brandt believes this is because Facebook feeds have become cluttered and news feeds are potentially becoming less relevant. On the other hand, she says Twitter is less saturated, meaning less distraction for users. “The 140 character limit means users often need to click on links to see more information,” Meyer-Brandt says. Events that have the most social shares The types of events that see the most value from social media sharing are food events and performances, followed by seminars and music events. In comparison, conventions and participatory sports events slightly lower value. In terms of traffic, social and food events see the highest number of visits from social media posts, followed by seminars, conferences and then entertainment events. Eventbrite has processed nearly $3 billion in ticket sales in 187 countries worldwide. Since launching in Australia in 2012, it has hosted over 75,000 local events and recently opened an APAC office in Melbourne.
Facebook chief operating officer Sheryl Sandberg says the company never meant to upset its users after an experiment on nearly 700,000 of them was reported recently. “This was part of ongoing research companies do to test different products, and that was what it was, it was poorly communicated,” she told The Wall Street Journal. “And for that communication we apologise. We never meant to upset you.” Facebook acquires LiveRail The social media giant has just bought video advertising technology startup LiveRail. LiveRail connects marketers to publishers on the web and mobile to target 7 billion video ads to visitors per month. According to TechCrunch sources Facebook paid between $400 and $500 million for the company. Facebook and LiveRail will share data in order to improve their respective ad targeting. Tim Draper lone winner of Silk Road bitcoin auction Investor Tim Draper has bought 29,655 bitcoins from the US government’s Silk Road bitcoin auction. The government seized the bitcoins following the closure of the Silk Road online marketplace. Overnight The Dow Jones Industrial Average is up 20.17 to 16,976.24. The Australian dollar is currently trading at US94 cents.
In a move that has as many people puzzled as outraged, Facebook has published research that involved a deliberate attempt to manipulate the emotional state of 689,000 of its users. Experimenters from Facebook, Cornell University and the University of California, San Francisco conducted experiments over a week period in January 2012 in which they manipulated the contents of users' News Feeds, screening out posts that had emotional content. The results of the study have recently been published in the Proceedings of the National Academy of Sciences of the USA. In the experiment, users were split into three groups and posts which contained either positive or negative words were screened from the users' news feed. One of the groups acted as a control and had random posts screened from their feeds. They then counted the percentage of emotion words that the test subjects used in their own posts. The results showed that there was a very small, but statistically significant result. People who had fewer positive posts shown to them reduced their own use of positive words by 0.1% and increased their use of negative words by 0.04%. Conversely, people who had fewer negative posts shown to them increased their use of positive words by 0.06% and decreased their use of negative words by 0.07%. The emotional responses shown by the unwitting participants in the study are nothing compared to the sense that Facebook, as a private company, has taken another step too far in the use of its network and created mistrust and resentment in its user community. Although the experiment may not have breached any of Facebook’s user agreements, it is clear that informed consent was not obtained from the participants of the research. The study itself allegedly received approval by the Institutional Review Boards at the researchers' universities. According to the article’s editor Susan Fiske, this was given on the basis that “Facebook apparently manipulates people’s News Feeds all of the time”. Professor Fiske, a psychologist at Princeton University who reviewed the paper said that she was “creeped out” by the nature of the research. Despite this, she believed that the regulations had been followed and there wasn’t any reason the paper should not be published. The ethics of good research We don’t know the full nature of the ethical clearance that was given to the researchers from their respective universities and so it is hard to comment fully on the nature of the approval they were given for the research to go ahead. If this was indeed on the basis of Facebook’s agreement with its users, then it would be fair to say that this was a very liberal interpretation of informed consent. Facebook’s Data Use Policy only says that it has the right to use information it receives for research. It does not make explicit that this involves actually carrying out experiments designed to manipulate emotions in their customers, especially not negative ones. Federal US guidelines on human research provided within the “Common Rule” are quite clear about what is and isn’t acceptable in this type of research. It includes details of how informed consent must be obtained and the information, including the risks and benefits, of them being involved. They must also be allowed to opt out of the research. Although Institutional Review Boards are required for organisations conducting research funded by or on behalf the Government, private companies are also signatories to the regulations. The fact that the researchers and Facebook did not ask for consent suggests that they knew that there would be a backlash when it became public and that it would be easier to deal with this after the fact. Right now, the researchers involved are not allowed to answer questions on the research and this is being handled by Facebook itself. What did the research itself prove? It is not at all clear that the research actually did say very much concerning the transfer of emotional states via emotional contagion as it stated. The measurement of the frequency of emotion words in very short status updates is clearly not a measure of the overall emotional state of the writer. Even if it were, the results of the experiment found differences of 1 word in a 1,000 in the number of emotional words used between the experimental and control groups. Remember that this is the number of positive or negative words used not the total number of words written. At the level of the individual, these differences are meaningless and hardly a demonstration of “emotional contagion”. Big Data brings with it the naive assumption that more data is better when it comes to statistical analysis. The problem is, however, that it actually introduces all sorts of anomalies especially when dealing with extremeley small differences that appear in one single measure at scale. There may yet be another twist to this story. Given that it would be particularly strange that a prestigious journal would publish what seems to be quite weak research, perhaps this is all part of a bigger experiment to see how society reacts, especially on Facebook, to the idea that Facebook believes that its customers are actually just test subjects to be examined at will. David Glance does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article.
Facebook data scientist Adam Kramer (aka Danger Muffin) – the man who wrote and designed the controversial Facebook mood study – has put up a public post on Facebook explaining why it experimented on the emotional impact of Facebook on its users. Defending the work of Jamie Guillory, post doctoral fellow at UCSF, and Jeff Hancock from Cornell University, Kramer writes they did the research "because we care about the emotional impact of Facebook and the people that use our product", but admits the motivations for the study are not clearly stated in the paper. He apologised for the anxiety the study has caused. “We felt that it was important to investigate the common worry that seeing friends post positive content leads to people feeling negative or left out,” he writes. “At the same time, we were concerned that exposure to friends' negativity might lead people to avoid visiting Facebook.” Kramer also outlines the methodology for the research “by very minimally deprioritizing a small percentage of content in News Feed (based on whether there was an emotional word in the post) for a group of people (about 0.04% of users, or 1 in 2500) for a short period (one week, in early 2012).” The study was published on June 2 in PNAS (Proceedings of the National Academy of Science) Social Science. Here is the full text of Kramer's post: “Okay, so a lot of people have asked me about my and Jamie and Jeff's recent study published in PNAS, and I wanted to give a brief public explanation. The reason we did this research is because we care about the emotional impact of Facebook and the people that use our product. We felt that it was important to investigate the common worry that seeing friends post positive content leads to people feeling negative or left out. At the same time, we were concerned that exposure to friends' negativity might lead people to avoid visiting Facebook. We didn't clearly state our motivations in the paper. Regarding methodology, our research sought to investigate the above claim by very minimally deprioritizing a small percentage of content in News Feed (based on whether there was an emotional word in the post) for a group of people (about 0.04% of users, or 1 in 2500) for a short period (one week, in early 2012). Nobody's posts were "hidden," they just didn't show up on some loads of Feed. Those posts were always visible on friends' timelines, and could have shown up on subsequent News Feed loads. And we found the exact opposite to what was then the conventional wisdom: Seeing a certain kind of emotion (positive) encourages it rather than suppresses is. And at the end of the day, the actual impact on people in the experiment was the minimal amount to statistically detect it -- the result was that people produced an average of one fewer emotional word, per thousand words, over the following week. The goal of all of our research at Facebook is to learn how to provide a better service. Having written and designed this experiment myself, I can tell you that our goal was never to upset anyone. I can understand why some people have concerns about it, and my co-authors and I are very sorry for the way the paper described the research and any anxiety it caused. In hindsight, the research benefits of the paper may not have justified all of this anxiety. While we’ve always considered what research we do carefully, we (not just me, several other researchers at Facebook) have been working on improving our internal review practices. The experiment in question was run in early 2012, and we have come a long way since then. Those review practices will also incorporate what we’ve learned from the reaction to this paper.” It's not the first time Facebook has experimented on users with a study in 2012 looking at social influence and political mobilisation, which also cites Kramer as an author.
A Facebook data scientist, along with two university researchers, turned 689,003 users’ News Feeds positive or negative to see if it would elate or depress them. The purpose of the study was to find out if emotions were contagious on social networks, which they are. Facebook is able to conduct such a study because of a line in the site’s Data Use Policy which says users’ information could be used for research. Facebook data scientist Adam Kramer helped run the study and says the company wanted to use the results to make Facebook better. “We felt that it was important to investigate the common worry that seeing friends post positive content leads to people feeling negative or left out,” he says. “At the same time, we were concerned that exposure to friends’ negativity might lead people to avoid visiting Facebook… In hindsight, the research benefits of the paper may not have justified all of this anxiety.” Silk Road bitcoins auctioned off When the FBI shutdown Silk Road, it seized a large amount of bitcoins, about 175,000 of which still remain in US government hands. In an effort to cash in on these assets, the US government auctioned off nearly 30,000 of them, valued at around $US17.4 million. The bitcoins were only available for bid in nine blocks, each containing around 3000 bitcoins. The winning bidders will be notified early this week. Google delays multi-language support in Google Now The tech giant had previously announced multi-language support in Google Now would be arriving in the coming days, but a spokesperson has told CNET the company is holding back the feature because of software problems discovered in the final testing phase. Overnight The Dow Jones Industrial Average is up 5.71 to 16,851.84. The Australian dollar is currently trading at US94 cents.
How would you react if Google announced it wants to compete in your sector? That’s the situation confronting virtual reality startup Phenomec, after Google unveiled its Cardboard virtual reality headset during its I/O developer conference. The announcement of Google’s low-cost headset, which involves mounting a smartphone to a users’ head using a cardboard case, comes as the Australian startup develops its own VR headset, known as VRSmartview. Watson says told StartupSmart having large companies, such as Google, Facebook or Samsung, getting involved in mobile VR is overall a good thing, as it gets more people interested in the technology. However, there are some significant limitations to Google’s design. “I call it Occulus Thrift. I like that it’s cheap, made from recycled materials and it’s a smart design… But I’m not seeing much innovation, and it lacks an adjustable mechanism into pupil area distance, which is really important,” Watson says. Using adjustable lenses so they sit in front of your eyes is essential, Watson explains, because it prevents users getting tunnel vision, which is disorientating. It’s a key consideration in the design of VRSmartview, which is a head-mounted display case for a smartphone that allows people to use virtual reality in a manner similar to Occulus Rift. “We’ve been doing a lot of research and development, and one of the most important considerations is creating a lense that can adjust to the individual so we’re developing a lot of innovations to our lense design,” Watson says. The technology used in VRSmartview recently helped the startup take out the top prize at the recent Start Up Weekend on the Sunshine Coast, coming on top of the 17 teams competing and winning over $15,000 in prizes in the process. “I’m a student here at USC, and we had an opportunity to pitch at the Startup Weekend on the Sunshine Coast… over the course of a weekend we went from underdogs to winning,” Watson says. Before recently coming to prominence as a result of Facebook’s $US2 billion purchase of Occulus Rift, virtual reality technology had mostly been used for research and military purposes, aside from a brief period in the early 1990s. According to Watson, innovations in smartphones mean the technology is now affordable for everyday users, without earlier problems such as pixelations. “The main research we’ve had is smartphone innovation, in terms of screen display or processing power. Smartphone screens now have ridiculous pixel density so we can use these displays – that are light and portable – without pixilation,” he says. While the startup is currently focusing on developing optimised head mounted displays, along with applications for their use. Watson believes the technology is set to emerge as a “very interesting format” for delivering films, with nature film maker David Attenborough currently filming a documentary in Borneo in complete virtual reality. “I also believe VR news reports would have a powerful impact in imparting a deeper message of the issue being communicated. It’s much more powerful when you can be positioned in the middle of the event,” he says. “We’re the only guys in Australia working on these VR headsets and apps, so far as we’re aware, and getting others in Australia involved is part of our aim.”
Over 90% of tech startups fail, but I never thought my baby, 99dresses, would be one of them. If there is one thing that doing a startup has taught me, its that I am much more resilient than I could have ever imagined. Looking back, when I started 99dresses fresh out of high school I was very naive and had zero idea what I was doing. In fact, I didn’t even know what a startup was! I just knew I wanted to solve a problem I personally experienced: Having a closet full of clothes but still nothing to wear. Since then I’ve survived being stabbed in the back by cofounders, investment rounds falling through, massive technology fuckups that brought sales to a halt, visa problems, lack of money, lack of traction, lack of a team, hiring the wrong people, firing people I didn’t want to fire, lack of product-market fit, and everything else in between. I learned so much, and yet I failed. I won many battles but I lost the war. I take complete responsibility for this failure. Were other people involved in 99dresses? Of course. Was any of this their fault? Absolutely not. The startup press glorifies hardship. They glorify the Airbnbs who sold breakfast cereal to survive, and then turned their idea into a multi-billion dollar business. You rarely hear the raw stories of startups that persevered but ultimately failed — the emotional roller coaster of the founders, and why their startups didn’t work out. As things were looking bleak at 99dresses I started seeking out these stories, desperately hoping for someone — anyone — to relate to. Failing is lonely and isolating. Every time I’d scroll through my Facebook feed all my startup friends were launching new products on Techcrunch, announcing their new fundraising rounds or acquisition, and posting photos of their happy teams. Ask any founder how they’re doing, and you’ll hear something positive. Whether that’s the truth or not, that’s what we’re trained to say. I found postmortems of startups outlining what didn’t work and why the company went under, but I was hard pressed to find anything that talked about the emotional side of failure — how it actually feels to invest many years of your life and your blood, sweat and tears, only for your startup to fall head first off a cliff. Maybe its because most founders are men, and men generally don’t like talking about their feelings. Maybe its because failure is embarrassing. I don’t know why this is the case, but here is my contribution to the cause: my story. This is what failure feels like. I hope it helps. Where it all began… Many startup folk say that failure should be celebrated. “Fail fast, fail early, fail often!” they all chant, trying to put a positive spin on the most excruciating pain any founder could experience. Let me tell you — failure fucking sucks. If I would have failed fast, early and often then I would have given up 99dresses years ago when, in 2011, I travelled to my parent’s place in the countryside of Australia, locked myself away in my room and cried for what seemed like an entire week. I had launched 99dresses in Australia 9 months earlier and received some great traction, but I was losing momentum due to technology problems that I didn’t understand and battling a whole host of other issues. I felt like I was drowning in a black ocean, and I couldn’t see any light at the surface. I didn’t know which way to swim. At the same time the Australian press would continue to approach me for interviews. The fact that I was a teenage girl working on a startup in a male dominated industry seemed to garner a lot of attention, and I’d take the interviews that came my way because that was my job. It was my job to be positive and paint a happy picture for the media, who seemed to talk about me as if I was some kind of entrepreneurial wunderkind because of my age and the fact that I had breasts. This didn’t help my impostor syndrome — the constant feeling that everybody was always giving me way too much credit. I remember one reporter saying “you must be so proud of what you have achieved” and I was completely stumped by that statement because I’d never actually thought about it. Was I proud? What had I actually achieved? We had some traction, sure, but we also had many problems that needed solving. I was just waiting for the day when everyone would figure out that I’m not that extraordinary. “But you’re taking a massive risk! That’s so brave!” they’d say. I never thought so. The biggest risk in my eyes was going to university, getting a stable job, and sliding into a comfortable life. There’s nothing wrong with that, but I knew it wasn’t me. Plus, the worst that could happen if I failed was that I’d end up living with my parents. I think the really brave founders are the ones who will be out on the street if they fuck it up, and still do it anyway. Its easy to take risks if you have nothing to lose. My mother said “Nikki, are you sure that you really want to do this? It is so much pressure for a 19 year old to take on. No one will think less of you if you decide this isn’t what you want”. My parents are my number one supporters but my mum hated seeing me in so much pain, even if it was character building. But despite the horrible sinking feeling in my stomach, and the fact that I had no money left, and the fact that I had no stable team, and massive product problems, and was feeling burnt out, and had no idea how to overcome any of the aforementioned obstacles, and felt completely alone in it all, I persevered. I didn’t fail then. I couldn’t fail. This was my baby, and if it was going to fail it would be over my dead body. I became numb to the pain, and despite waking up for weeks on end with no glimmer of hope and no desire to get out of bed, I still made myself sit at my desk and work. Eventually, things took a turn for the better. When you’re at your lowest, the only way forward is up I applied for a university team business planning competition with a $10k prize, paid a friend $500 of the prize money to be on my ‘team’ so I could qualify to enter, wrote a winning business plan and took out first place. That was enough money to buy me a plane ticket and some accommodation to the US. I met my friend and advisor, Matt, who took me under his wing and helped me more than I could ever have hoped. My developer was admitted to hospital with a very serious illness and dropped out of the company, but I replaced him with 2 co-founders. I got into Y Combinator and headed to Silicon Valley — startup Mecca for a starry eyed young founder like I was — for 5 months. We rebuilt the 99dresses product and launched it in the US. We were getting traction. I signed a $1.2 million seed round with a group of investors on a valuation cap that I honestly thought was ridiculously high. 99dresses was back, baby! And then, all of a sudden, we weren’t. Another trip down the emotional rollercoaster I had to fly back to Australia to get a working visa as soon as the funding paperwork was signed, and the next day my two “co-founders” decided to tell me they were leaving the company without even a hint of warning. The $1.2 million hadn’t hit our account yet, but even if it had I would have felt uncomfortable accepting it with no team in place to execute my vision. I would have looked like a fraud and an idiot anyway — what kind of founder announces to her investors that she suddenly has no team the day after she takes their money? And furthermore, how could I not have seen this coming? I was completely blindsided. I went over to Matt’s office, and he proceeded to pour vodka down my throat whilst telling me I was much better off without them. Like most of Matt’s lessons it was hard to see that then, but he was right. The next day I rang up our lead investor who decided to pull out of the round. Then another investor fell off. Everything I worked so hard for was crumbling to pieces. If only I’d closed everyone individually, instead of agreeing to round up at least $1mil to get the lead on board. But then I realized that these “co-founders” would have left anyway, leaving me in this same position. I was stuck back in Australia still with a big vision, but as a single, non-tech founder with no team, no product (I needed these co-founders to keep the product running), no US visa and just some money that I’d gotten from being a YC company. I remember my sister taking me for a walk after it all happened. She sat me down in a park overlooking Sydney harbor at night time and made me listen to ‘Shake it out’ by Florence and the Machine. She told me I’d bounce back, that I’d overcome this like I always did. I wasn’t sure I believed her, but I knew I’d survived worse. This ended up becoming my motivational song that I would listen to when times were tough, because it reminded me that I could surmount huge obstacles if I wanted to. I didn’t fail then. I just started again. Starting over There were 5 investors who invested in me, despite all of this. They believed in me when I was having trouble believing in myself, but I couldn’t show them that — that’s the cardinal sin of any entrepreneur. Always be confident. Always be smiling. Always stay positive. Sell, sell, sell! I remember one investor sending me an email saying “Shit happens. Take the money and go sort it out.” Another told me to go make him some crack for women. My cap got sliced in half, but at least I wasn’t broke again. So I closed $595k and started looking for a new co-founder. Problem was, I didn’t trust anyone. Not after what my previous co-founders had just put me through. But then I met Marcin, who quit his corporate IT job and joined me in an office we referred to as ‘The Cave’ because it was cheap and nasty and had no natural light. I remember he came in on his first day, and midway through a conversation my chair completely collapsed. The next day he bought in his own chair. I was very jealous. We rebuilt 99dresses again and launched it in the US which was proving to be ridiculously hard when we weren’t physically in the US and having to handle some stock and seed a community from another continent. We were having trouble getting traction. The market had moved on, competitors had flooded the space and the product we had built just didn’t provide enough value in comparison. Add to that the fact that we were building a 2 sided marketplace, and you might get a sense for how tough things were. The US market is huge, hyper-competitive and way harder to crack than the Australian one. We were frustrated by our lack of progress, and the product I’d promised our investors just wasn’t working. I didn’t fail then. We pivoted. Our big pivot I caught a plane to the US and talked to as many women in our target market as I could. We interviewed more customers. We discovered a very clear set of problems that explained why our product just wasn’t working in the US market. I rang up the team in Australia, and told them, quite bluntly, that we needed to chuck everything out and approach the problem from a different perspective. I presented a new idea for a product that seemed to resonate with the girls I was talking to. The team did not take it well, and I definitely communicated the change very poorly. I almost got on an early flight home because I felt a mutiny brewing — we were throwing out many months of hard work. This wasn’t my finest moment as a leader. Despite this, the team rallied together. We threw out our website and concentrated entirely on mobile. We had a mobile website prototype in front of users within a week and iterated based on that before building out the native version. We hustled to get anyone we could to try out our beta app. We must have emailed thousands of bloggers, and some ended up giving it a go. Items were being traded, and girls were paying us money. This new thing was working! We couldn’t wait to launch it in the US, but we needed to physically move there first in order to do things properly. Visa issues Problem was, we didn’t have any visas. You see, its very easy to get into the US as an Australian if you have a degree in a specialized field, which I did not. Marcin had to wait it out to first become an Australian citizen with his wife, then get his E3 visa. However, right before joining 99dresses his wife had fallen pregnant with their first child, which they needed to give birth to in Australia. Marcin was then tasked with moving his wife and baby halfway across the world to chase our startup dreams. Needless to say, he’s a very brave man. I, on the other hand, was faced with my next big challenge: proving that I was ‘an alien of extraordinary ability’ that was worthy of living and working in the US without a degree (after all, I gave up my scholarship and dropped out of university when I got into Y Combinator). After about 7 months of working on my petition, I was ecstatic and incredibly grateful when I got approved for an O1 visa. I practically skipped over to the US consulate in Sydney for my appointment, where I was to pick up the visa. Instead, I was interviewed by a lady who took an obvious immediate disliking to me. She told me she was putting me through extra processing, so I wouldn’t be getting my visa that day. She told me it was random. She told me it would take 2 weeks. I later found out this processing was not random — it was reserved for potential terrorists, and could take up to several years. As an entrepreneur I HATE feeling helpless. I’m used to taking action on something and producing some kind of result. I like being in control. In this instance I felt completely helpless, and my startup was at the mercy of a government worker on a power trip. We were already running behind on launching this app in the US, and the consulate had my passport. I couldn’t get out of Australia. The consulate made me jump through hoop after hoop, and a few months later I still didn’t have my visa. It got to the point where I had to call the consulate hotline every single day and split test different types of crying (machine-gun bursts of sobs vs. long sad silences vs. loud ugly cries) on the operators (males were much more receptive to helping out), and occasionally I’d get lucky and have one of them put in a report for me. I hated doing it, but it was the only way to push things forward. I finally got my visa, and took the next flight I could get out of Australia with four suitcases — 2 full of clothes, 1 full of shoes and another with all my electronics and miscellaneous items. The contents of these suitcases just about summed up my life. I’d achieved my dream of moving to NYC, and I was living in a shoebox. It was all I could afford on my startup salary. Soon after, my 25 year old sister and 19 year old brother both bought gorgeous apartments in Sydney. Whilst I was absolutely thrilled for them, I also couldn’t help feeling a little jealous as I sat in my tiny convertible bedroom with no windows. If this all didn’t work out I’d be financially left with nothing, whilst my siblings were off investing in their financial future. That didn’t really scare me — I’ve realized that money isn’t a huge motivator for me — but it did flare my competitive side. We probably all compare ourselves to others way more than we should… Re-launch time! After hiring a few people and finding an office in NYC we were ready to launch. We solved the chicken-and-egg problem using techniques that we promised never to speak of again because they squarely sat on the grey/black spectrum of naughtiness. If there was a line, we definitely crossed it. We had to. These hacks were harmless to others, so I figured it was only a problem if we got caught. Our plan worked better and faster than I’d budgeted. Within three months we were doing over 1000 trades a week, and bringing in revenue on every trade. We continued to grow. Our app store reviews were overwhelmingly positive. Obsession did not begin to describe how some girls treated 99dresses. Within a few short months several power users had spent over $1000 each and traded hundreds of individual items. We steadily grew our stock turnover rate from 17% to 50% — that was 2-3x better than our competitors. Everyday I’d be wearing a new outfit that I’d received off the app. Our retention rates were really exciting. If my investors had wanted crack for women, then that is what we had created. Based on the way we were growing, we thought we could get cash-flow positive before our funding ran out. I had 99 problems and our runway was one… But then growth started to slow down. The average value of items listed steadily declined and our fees were based on this value, so although we were growing transaction volume our revenue wasn’t budging. We started to see some holes in the business model. Whilst our retention was great, we worried about our activation rate. In an attempt to save ourselves we made one more pivot; this would turn out to be our last one. The pivot made complete logical sense based on all of our research, but introducing it to our community was a nightmare. There was mutiny within the app. While our top line metrics shot up in a massive way, our one metric that mattered — transactions — plummeted. Meanwhile, I had approached our existing investors about getting a bridge. I knew we had something really special with amazing potential, if we just had enough runway to give it an extra push. I also knew we weren’t perfectly poised to raise a bridge round, unless our existing investors were going to pony up the cash. We’d been in the market a while, and although we had to overcome a number of setbacks to get out here, that didn’t seem to matter too much to external investors. Bridge rounds just aren’t that sexy. We only had one institutional investor in our previous funding round, and I was so relieved when they told me they wanted to lead this bridge. Boom! It looked like we were going to live to see another day. I sent through the due diligence documents and worked with them to answer all their questions. They were taking longer than anticipated to get back to me so we could get the deal done and move on. Then one Wednesday I got a call from them, and the line was kind of crackly. However, it sounded like they not only wanted to lead, but they actually wanted to fill up the entire round! Relief flooded through my body. I was so nervous. Then I heard a ‘but…’ And the rest of the conversation explained why they would not be doing that. My stomach dropped. I knew they were our best shot of getting the money, and some of the angels who had previously invested were interested in coming in but only if I could get a VC to lead it, probably for some oversight. We now had very little cash left, and very little time to find someone else. Turns out, under closer scrutiny some of the other partners in the firm didn’t like how competitive the market was. 99dresses was squarely focused on trading cheaper fast fashion (fast fashion is really hard to re-sell for cash), but all the competition were mainly focussed on buying & selling designer fashion. Despite our differentiation, the space is crowded and the competitors are well funded to the tune of tens of millions of dollars each. I felt my voice crack whilst I was talking back on the phone. I was trying so hard to hold it together and be professional, but I could barely speak without it being obvious I was crying. Damn emotions! I was embarrassed. Our last attempt It was night time and I walked over to Marcin’s home in tears, fully expecting him to take the safe and responsible route of deciding to get another job. He had a family to support, and I felt an extraordinary amount of guilt for putting him in that position. Instead, Marcin surprised me. He wasn’t willing to give up that easily. None of the team were. I was taking on this massive burden and internalizing everything, when in actual fact my team was prepared to fight to the end alongside me. We made a plan for cutting our costs to extend our runway whilst we tried to get some more cash in the door. The next day I gave notice on our office, and let someone go. We were already a very lean operation, but now the work of 2 was being done by 1 person on operations, and we shifted our focus to only the most essential tasks to buy us more time. I didn’t tell many people about what was happening. You’re not supposed to talk about this shit. If someone asks how your startup is doing, you fire off some kind of positive phrase like a reflex. My friend gave me a hug and told me to go read ‘The Hard Thing About Hard Things’ by Ben Horowitz. I bought the book and sat in a coffee shop that Saturday afternoon reading it through. I identified so much with the struggle — I’d been through it many times before whilst aboard this emotional rollercoaster. I realized something: I was fucking tired — physically and emotionally. I wasn’t sleeping properly. I hadn’t been on a proper holiday since our ‘schoolies’ beach celebration straight after I finished high school in 2009. The holidays I had tried to go on just ended up being long strategy sessions in my head to figure out my next move whilst lying beside a pool. All I could think about was this damn startup and it was completely consuming me. I had no bandwidth for anything else. When someone asked what hobbies I had outside of work, I’d laugh. I’d recently started having mini panic attacks whilst I was doing ordinary things, like taking a shower or doing my hair. I felt like a shitty friend. I couldn’t even contemplate having a relationship (I tried that before, but yet again this startup won out over him). I wasn’t sure how much longer I could do this. My mother told me to trust my gut. If my gut told me that I didn’t have faith in the business, then there is no shame in winding down the company and moving onto something more productive instead of raising more money. I’d learned an awful lot in the past few years. I told my mum I didn’t trust my gut when it came to this. My gut was telling me to quit. Problem was, my gut had told me that before in my darkest hours and I still pulled through. If I had trusted my gut then I would have quit years ago. I knew the only way this was going to die was if we were killed. I am not a quitter. I owed it to myself, my team, my investors and the 99dresses community to see this through. I continued approaching investors without luck. I’d be invited to cocktail parties full of VCs where I’d don my painful sky-high heels because I’d split tested heels vs. flats, and for some reason a 5'11 woman in 7 inch heels commands more talking time and attention from investors than one in the comfy flat booties I wear to work. Apparently height gives you presence. Once or twice I’d have an investor asking if I knew what an angel was, or if I also modelled because of my height, or some other unintentionally patronizing comment that I doubt any guy would be subjected to. I learned to take it all in my high-heeled stride. I kept hearing the same thing from these investors. “That’s a very interesting business, but we’ll either put in the first money or a series A. We don’t do in between. I’d love to keep in touch though, and see you progress to a series A where we might be able to help. Oh, and why aren’t you getting this bridge from your current investors?” I remember one day Marcin joked that I was a control freak, and I was really surprised. I’d never perceived myself that way — I just liked things done a certain way and to a certain standard that matched the vision in my head. When it came to non-99dresses related stuff, I thought I was pretty chill. Over the past few weeks leading up to this event I did start to get a sense for what he was talking about, though. I wasn’t a control freak in that I was obsessed with controlling outcomes — I was a control freak who just needed to be in control of the inputs. This became more obvious as everything started looking more and more hopeless at work. I started eating much healthier, strictly cutting out wheat, sugar and anything processed. To take a mental break I would read about bio-hacking, which is incidentally all about understanding and controlling how inputs effect your body. I told myself this would give me more energy to hustle, but really I think I just had to feel like I had control over something — anything — when my startup’s fate felt so out of my control. Closing down With a few weeks of cash left, Marcin and I agreed to use our remaining time to shut down the app gracefully for the sake of ourselves and the community. I came into the office that day prepared to have a hard conversation with him, but we both looked at each other and knew it was over. There were some tears, and I was grateful to have a curtain of long dark hair to hide my bloodshot eyes behind as I walked through our co-working space. I felt physically sick all day, and my stomach wouldn’t let me keep any food down. I lost my appetite for the rest of the week. My first instinct was to apologize — to Marcin, to my team, to my investors, to the loyal community we’d built. I felt shame, guilt, embarrassment — like a shepherd who’d led her sheep off a cliff when it was my responsibility to keep them safe. I logically knew that I shouldn’t feel these things, but emotions aren’t always logical. In fact, I didn’t really know what I should be feeling. I’d been working on this company ever since I finished high school, so 99dresses was all I’d ever known. It was a huge part of my identity — I was “that 99dresses girl”. Who was I without this startup? I had no idea. Just an ordinary girl, I guess. My friends invited me out to drink away my sorrows and get my mind off things, but I just didn’t feel like it. I was scared I’d meet someone new and they’d ask me what I do, and I wouldn’t know how to answer. I was also embarrassed because I couldn’t afford to pay for anything superfluous anymore — I still don’t know how I’m going to pay rent at the end of the month. As a woman going out in NYC my nights were normally cheap because cute guys would buy me drinks, but I am not the kind of woman who expects that. I’m independent. If I couldn’t pay for myself then I wasn’t going out at all. I wasn’t depressed so much as disappointed. I tried so fucking hard, and I still couldn’t make it work. There are many things I would have done differently were I to do this all again, but Marcin and I agreed not to get sucked into the ‘shoulda woulda coulda’ trap. “No regrets”, he said. We both learned some hard lessons from our mistakes, but it also made me realize how much luck and timing are often huge factors in success and failure. The next day a report came out by a startup with a very similar model to us, but in a different vertical. We’d traded 3x more items than them in our first 8 months of the US app being live, had 2.5x more members and had a business model in place — all with a team half their size. They’d gone on to raise a sizable series A; we’d failed. Our investors said we did a lot with the money we had. It’s easier to accept defeat if you try and try and try but don’t get anywhere. You call it a failed experiment. The failure is easy to justify. It’s incredibly frustrating to try and try and try, and when you finally start to get some good traction you fall off a cliff. Our business still had problems, sure, but so does every other startup. Moving on So this is where the story comes to a close. My friends all ask me if I’m fine, and I honestly think that I am. It’s been a wild ride, but its time to move on. A cruel consequence of my failure is losing the US visa I worked so hard to obtain. Once I stop being the CEO of 99dresses I technically have 10 days to sell all my possessions, pack my bags, say goodbye to my amazing team, my friends and the life I’ve been building here, and leave. That being said, I’m excited to start a new chapter. As much as I love startups, its somewhat liberating to have no responsibilities to anyone but myself — no team, no investors, no customers to look after. Maybe now I can be a normal 22 year old for a while: indulge my wanderlust, make some bad decisions, try something new. I’ll be taking some time out to recharge whilst living with my parents in a country town of 2,000 people where the internet is slow and there is no Seamless. I hope I survive. Honestly, I’ll probably get bored within a week and start working on a new idea. I already have a few. When I started 99dresses I was going to go big or go home. It’s been a great adventure, but now I’m going home. The end So that’s it. That’s my story of what failure feels like. I hope reading it was as helpful to you as writing it was cathartic to me. Most startups fail, and yet this industry doesn’t talk about failure nearly enough. I’d encourage anyone who has failed to write about how it felt, as I can’t tell you how much that would have helped me in those final months & weeks. I just wanted someone to relate to. Instead, I was left feeling isolated and ashamed. In fact, I thought it might be therapeutic to curate a collection of stories from founders who have failed and put them together in a book. It might be a little project for me whilst I take some time off, and I’m sure it would be helpful to someone in my current position. If you want to get involved or contribute your story then shoot me an email. My email address is nikki @ 99dresses dot com (yep, I’m going to need a new email too — still haven’t sorted that out yet). Thank You I thought I’d end this post by publicly thanking everyone who has been a part of the 99dresses journey. To my co-founder, Marcin — there is no one I would have rather had by my side through this experience. The sacrifices you made to make this all happen are nothing short of inspiring. If Zoe was old enough to say anything other than “this!”, I’m sure she’d tell you how proud she is of her dad. I’m going to miss your terrible jokes. To the team, past and present — thank you so much for all of your hard work, perseverance and loyalty. Chandra and Oguz, you guys are amazing. I loved coming in to work every day because you always made it fun. I’m going to miss you all immensely. When I do another startup I’ll be coming after you guys again :p To the wives, Natalie & Semiha — I’m sure its not easy having your husband involved in a startup. You were both so supportive of the long hours, sacrifices and emotional ups and downs, so thank you. To my family — you guys have always been my #1 supporters. A special thanks to my mum for putting up with me, even when I was a stressed out and horrible daughter. You’re the strongest woman I know, and I hope one day to be as bad-ass as you. To my friends — I couldn’t have done this without your support. You celebrated my highs and comforted me in my lows, and for that I’ll always be grateful. To Matt — You’re the reason I got this far in the first place. If it weren’t for you I probably would have failed in 2011. To my investors — thank you for believing in my vision and trusting me to fulfill it, even through the rough patches. I really do appreciate it. To our community — without you, we’d be nothing. Thank you for loving 99dresses, and spreading the word. Many of you I now consider friends, and I’m so grateful for your support and loyalty. Ok, that’s it. It’s over. Now its time for a nice long sleep. Nikki Durkin is the Founder & CEO of 99dresses. This post originally appeared on Medium.
Revuudle wants to turn often mundane social media updates into meaningful reviews. Founder of the Adelaide-based startup Luke Larsen says Revuudle’s core premise centres around turning people’s opinions expressed on social media, into quantifiable data by letting them share reviews with a five-star rating system. “What would normally be meaningless sharing of experience becomes a data topic for review,” Larsen says. “Using the power of social networks you can scale that to people in your area, people with similar tastes to you. “It will allow you to review things that have never been possible before. You could review not just the movie, but the cinema, the restaurant you went to before the movie, literally the specific dish you ate at the restaurant.” Last week the startup won the Gold eNVIe at the Flinders University New Venture Institute’s Venture Dorm awards and Innovation Showcase. Larsen is developing an application programming interface (API) and apps for Revuudle across all platforms. “I call it the social reviewing network,” he says. “In the current ecosystem of user reviews there are many, many places for people to leave their reviews, but there’s not much incentive to do so.” Larsen says there’s the potential to integrate the review platform with commercial websites, and it will be linked with the Facebook and Twitter accounts of users. The silver eNVIe went to Kick it, an app to help smokers track their habit and quit smoking when they’re ready, while Floragram a service which delivers the best flowers from local markets, was the people’s choice winner. The judging panel included Vinomofo co-founder and chief executive officer Andre Eikmeier, Adelaide Football Club general manager commercial and community projects Darrin Johnson and Commonwealth Bank private banker Sarah Sullivan. “I was actually impressed with the quality of the pitches, given how early stage this program is,” Eikmeier says. “Four or five real standouts for me, and I shall be following their progress keenly. “The pitches themselves were polished, and most punched through even for the people or ideas I wasn’t as keen on. “They have honed in on the problem/solution succinctly, which sets a business off on the right path. “I’m also very impressed with Matt Salier, who is taking a very inclusive feeder approach with NVI, and I’ve got some confidence it will be a valuable contributor to this growing Adelaide startup ecosystem.”
Location-based social B2B platform Local Measure, spun-off from now defunct consumer-focused Roamz, today announced the opening of an office in Singapore to support the company’s growth in the Asia-Pacific region. According to a statement on the announcement, the Asian market has a big appetite for social media where social content is shared at a higher rate than any other market. “There are many opportunities for Local Measure in Asia to help businesses in the region extract valuable insights from various social media platforms including Facebook, Twitter, Instagram and Foursquare,” says Jonathan Barouch, founder and CEO of Local Measure. “Expanding into APAC is an exciting next step in our growth plan. “Businesses nowadays appreciate the value of real-time local insight and Local Measure provides the tools to capture what customers are saying publicly about their brand on social media, while they’re on the business’ premises. We’ve developed a location-based customer intelligence tool that works for businesses of all sizes and across different languages.” With existing clients who use Local Measure in Singapore like Spizza, SingTel, Gelatissimo and Qantas, the business has already established a presence in Singapore, long before the opening of the Singaporean office, but the move acknowledges the importance of having feet on the ground to service the specific requirements of the local market. The Singapore office will be headed up by Gary Spero, vice president Asia at Local Measure. Spero has been with the company for the past three years. His responsibilities will include growing Local Measure’s market share in Singapore and driving the Singaporean team to service the specific needs of the local market.
Yo. It’s an app that could highlight the genius of simplicity or the stupidity of a generation. Yo is a smartphone app that allows you to contact friends with one word – yo. The app launched on April 1 (no yoke) but has become something of an (we’re going to say it) internet sensation, even featuring in the Financial Times. It gets worse/better with news that Yo has received some $1 million in funding from high profile investors. Of course it’s run by a CEYO who has described it as “Twitter without tweets, Poke without the Facebook, Snapchat without the sexting risk.” just setting up my Yo— Or Arbel (@orarbel) June 13, 2014 But, what does it all mean? About psychology… Success of the #yo #app confirms Scott Adam's hypothesis that entrepreneurship is often about behavioural psychology— Rushabh Mehta (@rushabh_mehta) June 19, 2014 About life… Yelling into a noisy, crowded abyss—grasping for meaning. Yearning for a feeling, anything. #Yo— Aaron Edwards (@aaronmedwards) June 18, 2014 About love… I used to have trouble talking to girls, but with #Yo app, that's not a problem. I know how to say all the right things.— Bohnna Chhim (@Bohnna) June 19, 2014
Amazon, the e-commerce internet giant, is launching its first smartphone. Media attention is focusing on whether the phone’s features, such as its rumoured 3D interface, are really as cool as portrayed in its trailer video which aims to wow early users. But by entering into the fray of an already hyper-competitive mobile phone industry, Amazon is doing a lot more than adding another gee-whizz feature to a smartphone. This launch tells us a great deal about CEO Jeff Bezos' strategy for his company – and what it might mean for the future of competition and innovation in our increasingly digital world. First, let’s ask the obvious questions. Why is Amazon, known for internet retailing and related software development, entering a hardware market where leading incumbents like Nokia have already failed? After all, what does Amazon know about the telecoms business? Can it succeed where Google has failed? We have seen Google, which has virtually limitless financial resources, enter the mobile phone handset industry by purchasing Motorola Mobile in 2012, only to take a heavy loss after selling it on less than two years later. Even incumbent firms who had a very strong set of phone-making capabilities have taken tough hits in this turbulent market – witness Nokia’s dramatic plunge, which led to a sale of its mobile phone business to Microsoft. Platform Number 1 You cannot understand Amazon’s move without situating it in the broader context of platform competition. Platforms, these fundamental technologies such as Google search, Facebook and the Apple iPhone, are the building blocks of our digital economy. They act as a foundation on top of which thousands of innovators worldwide develop complementary products and services and facilitate transactions between increasingly larger networks of users, buyers and sellers. Platform competition is the name of the game in hi-tech industries today. The top-valued digital companies in the world (Amazon, Apple, Google, Facebook) are all aggressively pursuing platform strategies. App developers and other producers of complementary services or products provide the armies that sustain the vibrancy and competitiveness of these platforms by adding their products to them. The more users a platform has, the more these innovators will be attracted to developing for them. The more complements available, the more valuable the platform becomes to users. It is these virtuous cycles – positive feedback loops, or “network effects” – that fuel the growth of platforms and transform them into formidable engines of growth for the companies and developers associated with them. The smartphone is a crucial digital platform. Achieving platform leader status in this space is a competitive position all the hi-tech giants are fighting for. Google has its ubiquitous Android operating system, Apple has shaped the whole market with the iPhone, Microsoft has purchased Nokia’s phone business, and Facebook has invested $19 billion in WhatsApp among other acquisitions for its growing platform. In fact, I suppose I should have rephrased my question a little earlier – why hasn’t Amazon already staked its claim to lead this digital space after having launched its Kindle Fire tablet and Fire TV set-top box? Opening the door Simply put, the smartphone is the main gateway to the internet today, and, in the hand of billions of users throughout the world, is the physical embodiment of a conduit that links those users to each other and to the whole content of the internet. There are almost 7 billion mobile phones in the world (and only 1 billion bank accounts). And the trend is staggering. Mobile payment transaction value surpassed $235 billion worldwide in 2013, and is growing at 40% a year, with the share of mobile transactions already reaching 20% of all worldwide transactions. So, while risky, Amazon’s entry into the smartphone business is a classic play: a platform leader entering an adjacent platform market that is also complementary to its primary business. All platform leaders aim to stimulate complementary innovation (think how video game console makers aim to stimulate the provision of videogames), and they often attempt not to compete too much with their complementors in order to preserve innovation incentives. But at some point all platform leaders start to enter these complementary markets themselves. Google has done it through Android, Apple has done it with iTunes, Facebook has done it with Facebook Home. It happens when platform leaders feel threatened by competition in their core market, or when they want to steer demand, competition and innovation in a particular direction. The idea is to use their own user base as well as their own content and technologies to create an unassailable bundle, one that is difficult for external competitors to break into. Think of it as creating barriers to entry, while expanding the core market. The reasoning behind entering a complementary market is well known, and related to the benefits of bundling. In the case of hi-tech platforms, the benefits are even stronger. By optimising and controlling the interface between a platform and complements, a company can have a structuring impact on the evolution of the platform ecosystem – and that means on all the innovators around the world that invest and make efforts to develop complementary products and services. In your hands So, these are the reasons why Amazon is entering the mobile phone market, despite the difficulties inherent in taking on an über-competitive market. This strategic choice makes a lot of sense. As to whether Amazon has a fighting chance of succeeding, there are reasons to be optimistic. Beyond its deep financial resources, Amazon has learned something of what it takes in the development and successful commercialisation of various versions of the Kindle. That has given it expertise in hardware, on top of its software background, and should prove a useful training ground to allow it to launch other consumer products such as the smartphone. But the ultimate judge will be you, gentle readers. Will you be willing to swap your favourite mobile phone for a yet another new kid on the block, even if it does let you browse Amazon’s ever-growing catalogue in splendid 3D? Annabelle Gawer is Associate Professor in Strategy and Innovation at Imperial College Business School. This story was originally published at The Conversation. Read the
According to SEEK co-founder and Square Peg chief executive Paul Bassat, payments are the “holy grail of innovation”. He made the comment at The Australian Financial Review and Macquarie Future Forum on Tuesday, where some of Australia’s leading entrepreneurs declared the industry ripe for disruption. Despite banks in Australia being protected by complicated regulations, entrepreneurs are placing the industry under increasing pressure. Adding to banking woes are the likes of Google, Amazon, Apple and Facebook eyeing entry to the payments market. Here are the top four Australian disruptive financial services startups to watch: 1. Society One Society One is Australia's leading peer-to-peer lending platform, with a $5 million investment from Westpac’s Reinventure Group, a $50 million fund set up to back early stage startups. It’s rumored to be on the investment radar of both James Packer and Lachlan Murdoch. Borrowers list loan requirements and investors decide which loans they choose, how much to invest in each loan, and the rate at which you want to earn their interest. Its personal loan rate for a prime borrower is 9.80% pa, 5% lower than the average rate from the major banks. 2. Tyro Payments Tyro provides credit, debit and EFTPOS card acquiring services and does not take money on deposit. It was founded in 2003 by ex-Cisco employees Peter Haig, Andrew Rothwell and Paul Wood as MoneySwitch Ltd. Eleven-year-old Tyro is in its second year of profitable business operations. Disrupting the Australian banking industry was never going to be easy, and it took the team over $30 million in capital and a founder break-up to get there. At launch it was the first new entrant into the eftpos space in 15 years. 3. Pin Payments Pin Payments is an Australian-based startup operating from Melbourne and Perth that offers onsite payments and a developer API without the need for a merchant account. It received a grant from Commercialisation Australia and partnered with some of the Australian banks to make its offering possible. Both overseas-based Braintree and Stripe operate in the same space, but Pin has a solid local focus. Getting access to a payment system has previously been a juggle for companies, especially early stage ones. Pin Payments is aimed at developers who can easily integrate its service through their API. 4. CoinJar CoinJar, a Melbourne-based bitcoin exchange and payment system, which has raised $500,000 in seed funding from a range of individual investors and the Blackbird Ventures seed fund. Launched in February by Asher Tan and Ryan Zhou, CoinJar has over 10,000 active users in Australia. The company charges a low single-digit percentage fee for each transaction. CoinJar was the first company to get its Bitcoin app re-listed in the iPhone App Store, after Apple revised its app guidelines to include virtual currency apps that it previously excluded.
News that Google representatives are in talks with Richard Branson’s Virgin Galactic are seen as further evidence the web company is looking to set up a series of low-orbit satellites to help connect more people to the internet. Reports earlier this month said Google was planning to spend more than US$1 billion on a network of 180 satellites to provide internet access from space. Then Google revealed last week that it paid US$500 million for the satellite imaging company Skybox. It says the deal will give it access to better imaging technology for Google Maps, but it could also see it launch a new satellite network for delivering internet access. Google is already experimenting with new ways to provide internet access in remote locations through its Project Loon, which began in New Zealand last year and uses antenna held aloft in balloons. Access to digital networks and information are playing an increasingly important role as we move towards a more networked society. The global population today is approximately 7.1 billion, yet only 2.4 billion people are connected to the internet. Over the next six years this is expected to double, reaching 5 billion in 2020. It’s not just about the web Significantly, internet users will not be the key source of growth. There is increasing demand coming from a range of devices, systems and infrastructure being connected to the internet – home security systems, personal health monitors, cars, trams, trains, smart meters for power, gas and water, traffic lights and offices, as well as public spaces and buildings. As the internet is further industrialised the big technology companies are tapping into the growth in networked devices – usually referred to as the Internet of Things. Currently, 16 billion devices such as smart phones, tablets, security systems and smart meters have a network connection. This will grow exponentially towards 50 billion in 2020. There is a change in the focus of connectivity too - from individual people to houses, towns and cities. Large information and communication technology (ICT) companies such as Google are driving this increase in global connectivity, as their biggest market growth opportunity lies in the areas of population that do not have internet access. The World Economic Forum – which monitors the digital divide through its annual Networked Readiness Index – also sees the urgency in making the internet accessible to remote communities from the developing world. They are the people likely to benefit from substantial improvements in the quality of life through access to ICT. Other players trying to connect the world Google is not alone in this race. Facebook’s founder Mark Zuckerberg has also announced similar satellite plans to connect the unconnected, through the internet.org project. There have been past attempts to increase internet connectivity via satellites, such as the Iridium Project by Motorolla, now Iridium Communications. Iridium provides satellite phone connectivity across the globe via a constellation of 66 satellites. The service is limited by very low data rates - approximately 10kpbs - with costs of around A$1 to A$2 per minute of access. Well ahead of its time, the Iridium project faced significant challenges with a range of technological issues as well as failing to effectively monetise the idea. There were serious issues with the inter-satellite links needed to maintain the network, its handsets were bulky and its internet access plans were expensive. It remains largely an emergency communication tool and for infrequent access such as asset tracking in maritime/defence applications. Iridium plans to launch a new satellite service, Iridium NEXT, delivering peak download rates of 1.5Mbs by 2017. We will have to wait to see if the second incarnation of Iridium can increase its subscriber base. There have also been several other commercially yet-to-be-proven proposals that looked at high altitude long operation platforms making use of aircrafts and balloons to deliver similar broadband services. These platforms use the millimetre-wave (30-300 gigahertz range) frequency bands (currently targeting around 28-33 gigahertz range) to deliver broadband wireless services to locations theoretically wherever access is required. But none have yet to offer a product to market. Current satellite constellations are small (such as the 66 in Iridium) with each satellite often covering an area in excess of 1000km2. With limited bandwidth (often less than 100 megahertz available) to share between thousands of subscribers, individual subscribers get very low internet speeds. Looking for growth Yet new services are emerging. The Federal Communications Commission in the United States has approved Globalstar’s request to use a frequency band adjacent to the WiFi frequency window to offer satellite based WiFi coverage. Additionally, operators such as Intelsat and Inmarsat provide satellite internet connectivity across the globe. The growth in connected people and things presents an expanding market opportunity. Google’s business relies on its users delivering information upon which it can target advertising. It appears to be pre-emptively meeting the projected demand in order to increase its services. Satellite technology has matured and is now able to provide increased access and throughput to users and devices. Google’s approach is similar to that deployed by mobile phone operators. By increasing the number of satellites, individual beams can cover smaller areas, approximately 100-200km2 thus sharing scarce frequency spectrum with fewer customers, increasing internet access rates. Competition for Australia’s NBN In Australia, NBN Co offers broadband plans using existing satellites to about 3% of Australian population scattered around the massive landmass in areas with lower population density. The company has been designing its own satellites, which will be launched soon to increase access to broadband in remote Australia. But the project is facing major obstacles in terms of securing the highly regulated satellite launch rights. It is reported that NBN is in negotiation to secure a launch orbit spot. Google is not confining its vision to satellites or balloons. Google Fiber also plans to offer fibre connections with greatly improved speeds (compared to that offered by NBN) in selected USA cities directly competing with traditional telcos such as AT&T. This is driving innovation in the sector, with these new technologies providing possible options for the NBN to deliver broadband to cheaper and faster to remote Australian regions where wireline access to broadband may be difficult. Google’s satellite play highlights its serious intention to move into the new converging world of computing and communications, driving further competition and changes in the communications sector in the near future. Thas Ampalavanapillai Nirmalathas is currently the Director of Melbourne Accelerator Programs (MAP) which supports entrepreneurial activities of the University Community through business acceleration models. He is also an Associate Director for the Institute for the Broadband-Enabled Society. This story was originally published at The Conversation. Read the original article.