Advertising: Advertisers Sip Rosé and Ponder Ethics in South of France

The annual Cannes Lions advertising festival was an occasion for revelry, but marketers were also grappling with what kind of content they may be financing with their online ad dollars.

from iFeeltech IT News Mix4 https://www.nytimes.com/2018/06/24/business/media/cannes-lion-advertisers.html?partner=rss&emc=rss

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/25/advertising-advertisers-sip-rose-and-ponder-ethics-in-south-of-france/

Uber Claims to Have Changed. A London Judge Will Decide.

The ride-hailing company is appealing a ban in its largest European market. The case is a major test of changes made by its new chief executive, Dara Khosrowshahi.

from iFeeltech IT News Mix4 https://www.nytimes.com/2018/06/24/technology/uber-london-appeal.html?partner=rss&emc=rss

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/25/uber-claims-to-have-changed-a-london-judge-will-decide/

Meituan, the Tencent-backed “one-stop super app,” files for IPO in Hong Kong

After months of speculation, Meituan, the largest service booking app in China, confirmed that it has filed for a public offering. The company’s IPO application was submitted to the Hong Kong stock exchange earlier today and is being sponsored by Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch. A spokesperson for Meituan said the company is currently not disclosing information about fundraising amount or valuation. Reuters reports that Meituan wants to raise more than $4 billion.

Meituan was created after Meituan and Dianping, two competitors in the group deals space, merged in 2015 (it is still formally known was Meituan Dianping). Since then, the company has added more services to become China’s leader in O2O (online-to-offline), a catchphrase for goods and services that are purchased online, but bring people into brick and mortar businesses, like movie ticket bookings.

One interesting aspect of the merger is that it brought together two archrivals, Alibaba and Tencent. Alibaba was one of Meituan’s investors, while Tencent backed Dianping. Since then, Alibaba has sold off most of its Meituan Dianping stake to focus on Koubei, its own O2O app, while Tencent has maintained an investment relationship with the company. For example, it led Meituan’s $4 billion Series C last October.

Meituan initially focused on restaurant reservations and food delivery, before expanding into more local services to create what it describes as a “one-stop super app” that allows users to buy movie tickets, make spa and salon appointments, book transportation and hotel rooms, and even pay for bike-sharing program MoBike, which Meituan acquired for $2.7 billion in April. The company says one advantage of its business model is customer conversion between verticals. For example, it claims over 80% of its new hotel booking consumers first began using the app for food delivery or restaurant reservations.

In its announcement today, Meituan said it currently has 310 million transacting users and 4.4 million active merchants. Over the past three years, its revenue grew from 4 billion RMB in 2015, to 13 billion RMB in 2016, before hitting 33.9 billion RMB (about $5.2 billion) in 2017. Meanwhile, its gross transaction value went from 161 billion RMB in 2015 to 237 billion RMB in 2016, then 357 billion RMB (about $54.8 billion) in 2017. Meituan also said that it’s adjusted net loss dropped from 5.9 billion RMB in 2015 to 2.9 billion RMB (about $430 million) in 2017.

from iFeeltech IT News Mix4 https://techcrunch.com/2018/06/24/meituan-the-tencent-backed-one-stop-super-app-files-for-ipo-in-hong-kong/

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/25/meituan-the-tencent-backed-one-stop-super-app-files-for-ipo-in-hong-kong/

Fintech friends: Monzo partners with TransferWise for international payments

“So what’s going on here then?” I ask. “Two good friends just got even better [friends],” replies TransferWise co-founder Kristo Käärmann laughing, while Monzo co-founder Tom Blomfield, who is also on the video call, smiles approvingly. “Sorry for spoiling your news,” I tell the pair, who I’m interviewing ahead of an announcement today that the two companies are working together.

The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank’s 750,000 customers. It is the second new bank partnership that the fintech unicorn has unveiled this month, after announcing that it has begun working with France’s second largest bank BPCE Groupe.

TransferWise also powers international money transfer for Germany’s N26, and Estonia’s LHV. However, a previously announced partnership with the U.K.’s Starling Bank never materialised and has since been disbanded.

Asked why Monzo has chosen to work with TransferWise, Blomfield reiterates the challenger bank’s goal of becoming a “hub or control centre” for your money. This won’t necessarily all be done by Monzo, he says, “but with partner organisations who plug into this hub”. TransferWise is the first of these.

International payments has also been one of the most requested features by Monzo users since the challenger bank posted a roadmap of things it intends to “fix” over the next three months now that the switch from a pre-paid card to a full current account has been completed.

“I’ve personally been a TransferWise customer for five or six years and the service is amazing,” says Blomfield. “Compared to my old bank, it’s really, really transparent, the fees are really fair, and they’re continually working on bringing fees down and to make transfers more instantaneous. So I can’t think of a better a partner to do foreign transfers with than TransferWise”.

I ask Käärmann how different the conversation is with a challenger bank like Monzo — which arguably has nothing to lose by partnering with TransferWise and will generate affiliate revenue on each transfer — compared with larger incumbent banks who have historically generated fat margins on foreign exchange fees. He says it is similar, and usually centres on the fact that customers are already using TransferWise and that if a bank wants to put those customers first it makes sense to offer TransferWise functionality within its own app.

“When we announced the large French bank, which is clearly an incumbent — a massive incumbent — they were thinking about their customer,” he says. “That maybe does feel a little bit rare for banks to think this way, but they figured that ‘if we are going to do this, then why don’t we do it properly’. They were actually fully driven by their users and thinking about how to get the best user experience”.

The TransferWise functionality will start rolling out to Monzo users as of today and will let them send money from their current accounts to 18 of the most popular currencies, with “more being added in the near future”. The user experience will be near-identical to TransferWise’s own app, and will see transfers happen at claimed ‘mid-market’ rates in addition to TransferWise’s low and transparent fee. This means you’re told upfront exactly how much you’ll pay in fees and the amount you’ll receive in the exchanged currency.

The integration is pretty deep, too. Monzo customers who don’t have an existing TransferWise account will have an account automatically created for them when they first initiate an international money transfer. If they already have a TransferWise account, they can use their existing details to authenticate with and link their account to Monzo. This means that any international money transfers made from within Monzo will also show up in your TransferWise account and the TransferWise app.

“One of the coolest things for us, other than just working with cool people, is there’s another bank in the U.K. who is transparent with their international fees,” says Käärmann. “We’re kind of getting to the place where once there is enough banks who are as transparent in their foreign fees as Monzo is then it becomes quite untenable for everyone else to keep hiding their fees and that’s very interesting. Not just for us as companies, but more generally in terms of how banking works”.

One notable dynamic to TransferWise adding another bank partner is that the fintech giant recently launched a banking product of its own. Positioned as a companion to your existing bank account, the TransferWise “Borderless” account and debit card lets you deposit, send and spend money in multiple currencies. Acting like a local country bank account, it is primarily designed to solve the specific problem of earning, receiving and spending money abroad and TransferWise says it is not intended to be a fully fledged bank replacement — at least not yet.

“We’re pretty chilled about it,” says Blomfield when I ask him if TransferWise’s tentative entry into the bank account space was in any way a concern. “Honestly, we are not competing with TransferWise. Both of us are looking at the big high street banks, as either partners or competitors. Our customers come from Barclays, Lloyds, HSBC and RBS. I think anything that increases both of our brand awareness is a really positive thing. We have 750,000 customers, which is something like 2 percent of the adult population, we’re targeting the other 98 percent who are still using the big banks. I just think there is so much headroom in this space that it would be crazy to think that we are competing with each other”.

“If we take a step back, what is the problem we are solving?” says Käärmann rhetorically. “The problem we are solving is that moving money across borders is expensive”. He then reiterates a point that TransferWise co-founder and Chairman Taavet Hinrikus has made often, which is that the company is entirely agnostic on how customers access the service. The more money moving via its infrastructure, the better, with economies of scale also meaning it has been able to lower fees on an increasing number of routes.

“For us, it doesn’t really matter if the money is in a bank account that is connected directly to TransferWise or if it is in the Borderless account,” he says. “There’s really no difference, and I know the user experience is better today if you’re banking in the U.K. with Monzo, so that’s what users should do”.

At this point I can’t resist mentioning Revolut, the digital bank startup and newly crowned unicorn that, on paper at least, competes with both TransferWise and Monzo. Revolut’s original “attack vector” (to borrow Blomfield’s phrase) was cheap foreign currency exchange coupled with a debit card for traveling. And although not yet a licensed bank, it has rolled out bank account features at a shockingly fast pace, putting it on feature parity with Monzo in a number of instances.

Rightly or wrongly, I put it to Käärmann that there is a market perception that Revolut is often the cheapest option when spending or sending money abroad, even if questions remain about how it determines prices, especially at weekends, or if the startup actually makes money on foreign exchange at all.

“When you talk about other people getting into that space, we should be happy if someone figures out how to do parts of it, some routes, better than us or faster than us or cheaper than us,” he says, somewhat diplomatically.

“I wish these things were sustainable as well. We’re super anti-subsidising, just because we think that over the long-term it doesn’t make sense to get some users paying for other users’ transfers or for some routes to pay for other routes. Progress is going to be faster if it’s clean. But, at the end of the day, if there’s a better solution, we actually endeavour to recommend that better solution. It would be nice if that better solution was also transparent and we can confidently say that they’re not just better in the next 5 minutes but that they are going to be better for the next 5 hours when you can put in your transfer. It’s only fair to the consumers — they’re not stupid — that they should go wherever is cheapest, if they need that, or somewhere that is more convenient”.

Cue Monzo’s Blomfield to caution me not to get too caught up in the London fintech echo chamber. “Most people in the U.K. have never heard of Monzo or Revolut or TransferWise,” he says, “and so our mission over the next five years is to take market share off all of the big banks, who I think are gouging their customers on things like foreign exchange. There’s so much open space in front of us because big banks just aren’t able to keep up”.

from iFeeltech IT News Mix4 https://techcrunch.com/2018/06/24/monzowise/

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/24/fintech-friends-monzo-partners-with-transferwise-for-international-payments/

Zcash: life on the crypto roller coaster

Suppressed in Japan. Championed in New York. Accused of betraying the billion-dollar community he created with an arcane and byzantine ritual, while accidentally solving — maybe — a transnational clandestine mining mystery. All this while leading the rollout of some of the world’s most cutting-edge cryptographic technology into production.

It’s been an interesting six months for Zooko Wilcox, cryptographer, engineer, and CEO / driving force behind Zcash, one of the world’s most valuable, technically interesting, and politically fraught cryptocurrencies. Thoughtful, soft-spoken, quick to laugh, and eager to see all sides of every issue, he doesn’t seem like a man to inspire bans and rancor. But that’s the crypto world for you, these days.

When it comes to Zcash, “crypto” means both “cryptocurrency” and “cryptography,” for once. It is essentially a fork of Bitcoin which uses a mindbending branch of mathematics known as “zero-knowledge proofs” (which I’ve been writing about for years…) implemented in a form known as “zk-SNARKs,” to allow users to preserve their privacy by concealing both the participants and the amount of any given transaction, even though it is recorded on and guaranteed by Zcash’s public blockchain.

This privacy makes it a knee-jerk target of thoughtless governments and regulators, in the same way that cryptographic protection of your phone’s messages and data has become a knee-jerk target of law enforcement agencies who protest that they are “going dark.” Recently, in the wake of a $500 million hack of Japanese exchange Coincheck, which has been linked with North Korea, Japan’s financial regulator cracked down on privacy-preserving cryptocurrencies … even though they were not what had been stolen.

Zcash is not the only privacy-preserving cryptocurrency, of course; others include Monero and Dash. But it is the most cutting-edge. To an extent this has hampered it, as the first version of its zk-SNARK transactions were quite costly to process. Zcash has recently rolled out a new alpha version with remarkable improvements, though — you don’t often see a 98% improvement in anything in engineering — and we can expect a steady rise in zk-SNARK transactions once this hits its mainnet.

This vanguard position has not gone unnoticed. Ethereum made zk-SNARK primitives available to developers as part of its Byzantium release last year, though they have not yet been widely used. JPMorgan Chase has partnered with Zcash to implement privacy technology in its own corporate blockchain research. Perhaps as a result of this, and/or a deeper understanding that privacy is in fact important to the financial industry, New York State’s Department of Financial Services recently named Zcash as one of the six approved cryptocurrencies on the heavily regulated Gemini exchange. Yes, even as it was being suppressed in Japan. We live in interesting times.

Meanwhile, Zooko is being accused by his own community of turning turncoat. The reason? ASICs.

To oversimpify: (Almost) every cryptocurrency is secured by “miners” who prove they have solved computationally intensive problems, in order to show it would be impossible for anyone to have overwritten the consensus record of transactions unless they control more than half of the network’s computing power. In exchange for this service they get shiny new cryptocoins.

Bitcoin mining has long been taken over by mining companies / consortiums who use custom-built “application-specific integrated circuit,” chips to mine with hardware specifically dedicated to solving these problems, known as “hash functions,” with speed and energy efficiency that general-purpose processors cannot match.

In an attempt to democratize mining, many third-wave cryptocurrencies chose hash functions which were thought to be ASIC-resistant. Zcash was among them. However, ASIC designers are smart people too, and have announced ASICs for essentially all cryptocurrencies. Interestingly, when an ASIC was announced for Monero, its developers promptly changed their hash function to foil the would-be miners … and their “hash rate” dropped by nearly 50%, indicating that someone had likely secretly been mining Monero with ASICs for some time.

This is big business. Across all cryptocurrencies tens of millions of dollars a day are at stake, not even counting the costs of a so-called “51% attack” which have victimized a few smaller currencies of late. So when ASICs for Zcash were announced, and Zooko did not immediately move to change the hash algorithm as Monero did, he was accused of betrayal, and of being in the pocket of Jihan Wu, CEO of the miner manufacturer Bitmain and, if you believe the frothier corners of some cryptocurrency subreddits, all-around evil crypto boogeyman.

Every tradeoff in a billion-dollar market is going to hurt someone. In this case, on the one hand, you’d want the stereotypical “Venezuelan with a GPU miner,” who’s providing for their family with Zcash, the opportunity to keep doing so; on the other, ASIC mining means more dedicated hardware keeping the entire Zcash network more secure. Onn the gripping hand, drastic changes in mining capacity raise the spectre of a 51% attack. Zooko’s current notion is to try to support both GPU and ASIC miners, by dividing the mining rewards between them.

In passing he may have accidentally solved the secret Monero mining mystery. A fascinating thing about the cryptocurrency world, a way in which it’s increasingly a synecdoche for global geopolitics, is that it’s divided between a Chinese sphere and a Western sphere, and the two seem to be mostly tethered by bonds of mistrust, miscommunication, and misinterpretation.

Zooko was less inclined to believe that Jihan Wu was a Bond villain, because, as he puts it, “I’ve met him, at a conference in Buenos Aires, and he just seemed like a nerd like the rest of us. And I like nerds!” So he decided to communicate; he called up Wu and asked him if he was responsible for the stealth mining, and found Wu’s denials convincing. Then he called up Innosilicon, the other main mining company, asked if they had a Monero mining farm going back to last year, and received the hilariously casual answer “Yeah, I think so?” None of this is at all dispositive, of course — but it speaks to how the crypto world often seems to run on rumor and rancor more than open communication.

While we’re on the subject of conspiracy theories: perhaps the single most colorful thing about Zcash is that in order for its zk-SNARKs to work, they have to be initiated by a group of participants who must construct and then discard secret information. If they don’t, and if they subsequently collaborated, they’d then have the ability to create free Zcash out of thin air. Zcash was initiated with a complex six-person ritual, and if any one of those people was honest then the Zcash network is free of this so-called “toxic waste” taint … but obviously this still isn’t optimal, and is a breeding ground for beliefs of betrayal.

However, this underpinning can be replaced. Zooko is looking into new cryptographic developments such as “STARKs” and “bulletproofs” which provide even stronger guarantees. He envisions a world of “non-custodial exchanges,” where people can trade cryptocurrencies without ever giving up control of them. He’s plotting to implement Ittay Eyal and Emin Gun Sirer’s “Bitcoin-NG” protocol to scale Zcash up by an order or two of magnitude.

Meanwhile, the Secret Service has called for action on privacy-preserving cryptocurrencies like Monero and Zcash — after citing numerous cryptocurrency thefts which, er, were not of those currencies — and they’ve felt compelled to respond. All this a week before the Zcon0 developer conference he’s organized this week in Montreal … which will doubtless be attended by some people who consider him a sellout in the pocket of the evil Jihan Wu. I’ll say this for the cryptocurrency world: it’s rarely boring, and for better or worse, Zcash may well be its least boring front.

 

 

from iFeeltech IT News Mix4 https://techcrunch.com/2018/06/24/zcash-and-life-on-the-crypto-roller-coaster/

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/24/zcash-life-on-the-crypto-roller-coaster/

Snag your super early-bird passes for Disrupt Berlin 2018

Der frühe vogel fängt den wurm! Yikes, if we’re trotting out our tortured German to say “the early bird catches the worm,” it can mean only one thing, folks. It’s time for all you European startup fans to go catch super early-bird tickets to TechCrunch Disrupt Berlin 2018 on November 29-30.

Our pricing tiers start at €595 + VAT. The value is real, and your time is limited, so go buy your conference passes today.

Berlin’s the perfect city for a Disrupt event. It’s both affordable and an international hub — factors that have contributed to a vibrant and growing tech startup scene. Our Berlin Disrupt events have drawn participants from more than 50 countries across Europe, Asia and beyond. There’s no better place to introduce your pre-Series A startup to the international startup community.

But not everyone who goes to Disrupt events goes to launch a business. Whether you’re a marketer, job seeker, founder or investor, you’ll find opportunity waiting for you in these two program-packed days.

Take in Startup Battlefield, our premier startup pitch competition, to see which early-stage startup will reign supreme and take home the $50,000 grand prize.

Spend time exploring and networking your way through Startup Alley. You’ll find hundreds of early-stage startups showcasing their best tech, products and platforms. It’s prime hunting ground for potential connections, clients and customers.

If you’re a founder or an investor, be sure to take advantage of CrunchMatch. That’s our free, business match-making service that simplifies networking. It efficiently connects founders and investors with similar business interests and profiles. At Disrupt Berlin 2017, CrunchMatch generated a total of 888 meetings — and 97 percent of participants said they’d use the service again.

That’s just a small sampling of what you can expect at Disrupt Berlin, and this is your opportunity to experience it at a great price. Disrupt Berlin 2018 takes place on November 29-30, 2018 at the Arena Berlin. Check out our super early-bird pricing tiers, and buy your passes today. We can’t wait to see you in Berlin, ja voll!

from iFeeltech IT News Mix4 https://techcrunch.com/2018/06/24/snag-your-super-early-bird-passes-for-disrupt-berlin-2018/

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/24/snag-your-super-early-bird-passes-for-disrupt-berlin-2018/

In Army of None, a field guide to the coming world of autonomous warfare

The Silicon Valley-military industrial complex is increasingly in the crosshairs of artificial intelligence engineers. A few weeks ago, Google was reported to be backing out of a Pentagon contract around Project Maven, which would use image recognition to automatically evaluate photos. Earlier this year, AI researchers around the world joined petitions calling for a boycott of any research that could be used in autonomous warfare.

For Paul Scharre, though, such petitions barely touch the deep complexity, nuance, and ambiguity that will make evaluating autonomous weapons a major concern for defense planners this century. In Army of None, Scharre argues that the challenges around just the definitions of these machines will take enormous effort to work out between nations, let alone handling their effects. It’s a sobering, thoughtful, if at times protracted look at this critical topic.

Scharre should know. A former Army Ranger, he joined the Pentagon working in the Office of Secretary of Defense, where he developed some of the Defense Department’s first policies around autonomy. Leaving in 2013, he joined the DC-based think tank Center for a New American Security, where he directs a center on technology and national security. In short, he has spent about a decade on this emerging tech, and his expertise clearly shows throughout the book.

The first challenge that belies these petitions on autonomous weapons is that these systems already exist, and are already deployed in the field. Technologies like the Aegis Combat System, High-speed Anti-Radiation Missile (HARM), and the Harpy already include sophisticated autonomous features. As Scharre writes, “The human launching the Harpy decides to destroy any enemy radars within a general area in space and time, but the Harpy itself chooses the specific radar it destroys.” The weapon can loiter for 2.5 hours while it determines a target with its sensors — is it autonomous?

Scharre repeatedly uses the military’s OODA loop (for observe, orient, decide, and act) as a framework to determine the level of autonomy for a given machine. Humans can be “in the loop,” where they determine the actions of the machine, “on the loop” where they have control but the machine is mostly working independently, and “out of the loop” when machines are entirely independent of human decision-making.

The framework helps clear some of the confusion between different systems, but it is not sufficient. When machines fight machines, for instance, the speed of the battle can become so great that humans may well do more harm then good intervening. Millions of cycles of the OODA loop could be processed by a drone before a human even registers what is happening on the battlefield. A human out of the loop, therefore, could well lead to safer outcomes. It’s exactly these kinds of paradoxes that make the subject so difficult to analyze.

In addition to paradoxes, constraints are a huge theme in the book as well. Speed is one — and the price of military equipment is another. Dumb missiles are cheap, and adding automation has consistently added to the price of hardware. As Scharre notes, “Modern missiles can cost upwards of a million dollars apiece. As a practical matter, militaries will want to know that there is, in fact, a valid enemy target in the area before using an expensive weapon.”

Another constraint is simply culture. The author writes, “There is intense cultural resistance within the U.S. military to handing over jobs to uninhabited systems.” Not unlike automation in the civilian workforce, people in power want to place flesh-and-blood humans in the most complex assignments. These constraints matter, because Scharre foresees a classic arms race around these weapons as dozens of countries pursue these machines.

Humans “in the loop” may be the default today, but for how long?

At a higher level, about a third of the book is devoted to the history of automation, (generalized) AI, and the potential for autonomy, topics which should be familiar to any regular reader of TechCrunch. Another third of the book or so is a meditation on the challenges of the technology from a dual use and strategic perspective, as well as the dubious path toward an international ban.

Yet, what I found most valuable in the book was the chapter on ethics, lodged fairly late in the book’s narrative. Scharre does a superb job covering the ground of the various schools of thought around the ethics of autonomous warfare, and how they intersect and compete. He extensively analyzes and quotes Ron Arkin, a roboticist who has spent significant time thinking about autonomy in warfare. Arkin tells Scharre that “We put way too much faith in human warfighters,” and argues that autonomous weapons could theoretically be programmed never to commit a war crime unlike humans. Other activists, like Jody Williams, believe that only a comprehensive ban can ensure that such weapons are never developed in the first place.

Scharre regrets that more of these conversations don’t take into account the strategic positions of the military. He notes that international discussions on bans are led by NGOs and not by nation states, whereas all examples of successful bans have been the other way around.

Another challenge is simply that antiwar activism and anti-autonomous weapons activism are increasingly being conflated. Scharre writes, “One of the challenges in weighing the ethics of autonomous weapons is untangling which criticisms are about autonomous weapons and which are really about war.” Citing Sherman, who marched through the U.S. South in the Civil War in an aggressive pillage, the author reminds the reader that “war is hell,” and that militaries don’t choose weapons in a vacuum, but relatively against other tools in their and their competitors’ arsenals.

The book is a compendium of the various issues around autonomous weapons, although it suffers a bit from the classic problem of being too lengthy on some subjects (drone swarms) while offering limited information on others (arms control negotiations). The book also is marred at times by errors, such as “news rules of engagement” that otherwise detract from a direct and active text. Tighter editing would have helped in both cases. Given the inchoate nature of the subject, the book works as an overview, although it fails to present an opinionated narrative on where autonomy and the military should go in the future, an unsatisfying gap given the author’s extensive and unique background on the subject.

All that said, Army of None is a one-stop guide book to the debates, the challenges, and yes, the opportunities that can come from autonomous warfare. Scharre ends on exactly the right note, reminding us that ultimately, all of these machines are owned by us, and what we choose to build is within our control. “The world we are creating is one that will have intelligent machines in it, but it is not for them. It is a world for us.” We should continue to engage, and petition, and debate, but always with a vision for the future we want to realize.

from iFeeltech IT News Mix4 https://techcrunch.com/2018/06/23/in-army-of-none-a-field-guide-to-the-coming-world-of-autonomous-warfare/

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/24/in-army-of-none-a-field-guide-to-the-coming-world-of-autonomous-warfare/

Open source sustainability

Open source sustainability has been nothing short of an oxymoron. Engineers around the world pour their sweat and frankly, their hearts into these passion projects that undergird all software in the modern internet economy. In exchange, they ask for nothing in return except for recognition and help in keeping their projects alive and improving them. It’s an incredible movement of decentralized voluntarism and represents humanity at its best.

The internet and computing giants — the heaviest users of open source in the world — are collectively worth trillions of dollars, but you would be remiss in thinking that their wealth has somehow trickled down to the maintainers of the open source projects that power them. Working day jobs, maintainers today can struggle to find the time to fix critical bugs, all the while facing incessant demands from users requesting free support on GitHub. Maintainer burnout is a monstrous challenge.

That distressing situation was chronicled almost exactly two years ago by Nadia Eghbal, in a landmark report on the state of open source published by the Ford Foundation. Comparing open source infrastructure to “roads and bridges,” Eghbal provided not just a comprehensive overview of the challenges facing open source, but also a call-to-arms for more users of open source to care about its economics, and ultimately, how these critical projects can sustain themselves indefinitely.

Two years later, a new crop of entrepreneurs, open source maintainers, and organizations have taken Eghbal up on that challenge, developing solutions that maintain the volunteer spirit at the heart of open source while inventing new economic models to make the work sustainable. All are early, and their long-term effects on the output and quality of open source are unknown. But each solution offers an avenue that could radically change the way we think of a career in open source in the future.

No one sees that the Roads and Bridges are falling down

Eghbal’s report two years ago summarized the vast issues facing open source maintainers, challenges that have remained essentially unchanged in the interim. It’s a quintessential example of the “tragedy of the commons.” As Edghbal wrote at the time, “Fundamentally, digital infrastructure has a free rider problem. Resources are offered for free, and everybody (whether individual developer or large software company) uses them, so nobody is incentivized to contribute back, figuring that somebody else will step in.” That has led to a brittle ecosystem, just as open source software reached the zenith of its influence.

The challenges, though, go deeper. It’s not just that people are free riding, it’s often that they don’t even realize it. Software engineers can easily forget just how much craftsmanship has gone into the open source code that powers the most basic of applications. NPM, the company that powers the module repository for the Node ecosystem, has nearly 700,000 projects listed on its registry. Starting a new React app recently, NPM installed 1105 libraries with my initial project in just a handful of seconds. What are all of these projects?

And more importantly, who are all the people behind them? That dependency tree of libraries abstracts all the people whose work has made those libraries available and functional in the first place. That black box can make it difficult to see that there are far fewer maintainers working behind the scenes at each of these open source projects than what one might expect, and that those maintainers may be struggling to work on those libraries due to lack of funding.

Eghbal pointed to OpenSSL as an example, a library that powers a majority of encrypted communications on the web. Following the release of the Heartbleed security bug, people were surprised to learn that the OpenSSL project was the work of a very small team of individuals, with only one of them working on it full-time (and at a very limited salary compared to industry norms).

Such a situation isn’t unusual. Open source projects often have many contributors, but only a handful of individuals are truly driving a particular project forward. Lose that singular force either to burnout or distraction, and a project can be adrift quickly.

When free isn’t free

No one wants open source to disappear, or for maintainers to burnout. Yet, there is a strong cultural force against commercial interests in the community. Money is corrupting, and dampens the voluntary spirit of open source efforts. More pragmatically, there are vast logistical challenges with managing money on globally distributed volunteer teams that can make paying for work logistically challenging.

Unsurprisingly, the vanguard of open source sustainability sees things very differently. Kyle Mitchell, a lawyer by trade and founder of License Zero, says that there is an assumption that “Open source will continue to fall from the sky like manna from heaven and that the people behind it can be abstracted away.” He concludes: “It is just really wrong.”

That view was echoed by Henry Zhu, who is the maintainer of the popular JavaScript compiler Babel. “We trust startups with millions of VC money and encourage a culture of ‘failing fast,’ yet somehow the idea of giving to volunteers who may have showed years of dedication is undesirable?” he said.

Xavier Damman, the founder and CEO of Open Collective, says that “In every community, there are always going to be extremists. I hear them and understand them, and in an ideal world, we all have universal basic income, and I would agree with them.” Yet, the world hasn’t moved to such an income model, and so supporting the work of open source has to be an option. “Not everyone has to raise money for the open source community, but the people who want to, should be able to and we want to work with them,” he said.

Mitchell believes that one of the most important challenges is just getting comfortable talking about money. “Money feels dirty until it doesn’t,” he said. “I would like to see more money responsibility in the community.” One challenge he notes is that “learning to be a great maintainer doesn’t teach you how to be a great open source contractor or consultant.” GitHub works great as a code repository service, but ultimately doesn’t teach maintainers the economics of their work.

Supporting the individual contributor: Patreon and License Zero

Perhaps the greatest debate in sustaining open source is deciding who or what to target: the individual contributors — who often move between multiple projects — or a particular library itself.

Take Feross Aboukhadijeh for example. Aboukhadijeh (who, full disclosure, was once my college roommate at Stanford almost a decade ago) has become a major force in the open source world, particularly in the Node ecosystem. He served an elected term on the board of directors of the Node.js Foundation, and has published 125 repositories on GitHub, including popular projects like WebTorrent (with 17,000 stars) and Standard (18,300 stars).

Aboukhadijeh was looking for a way to spend more time on open source, but didn’t want to be beholden to working on a single project or writing code at a private company that would never see the light of day. So he turned to Patreon as a means of support.

(Disclosure: CRV, my most immediate former employer, is the series A investor in Patreon. I have no active or passive financial interest in this specific company. As per my ethics statement, I do not write about CRV’s portfolio companies, but given that this essay focuses on open source, I made an exception).

Patreon is a crowdsourced subscription platform, perhaps best known for the creatives it hosts. These days though, it is also increasingly being used by notable open source contributors as a way to connect with fans and sustain their work. Aboukhadijeh launched his page after seeing others doing it. “A bunch of people were starting up Patreons, which was kind of a meme in my JavaScript circles,” he said. His Patreon page today has 72 contributors providing him with $2,874 in funding per month ($34,488 annually).

That may seem a bit paltry, but he explained to me that he also supplements his Patreon with funding from organizations as diverse as Brave (an adblocking browser with a utility token model) to PopChest (a decentralized video sharing platform). That nets him a couple of more thousands of dollars per month.

Aboukhadijeh said that Twitter played an outsized role in building out his revenue stream. “Twitter is the most important on where the developers talk about stuff and where conversations happen…,” he said. “The people who have been successful on Patreon in the same cohort [as me] who tweet a lot did really well.”

For those who hit it big, the revenues can be outsized. Evan You, who created the popular JavaScript frontend library Vue.js, has reached $15,206 in monthly earnings ($182,472 a year) from 231 patrons. The number of patrons has grown consistently since starting his Patreon in March 2016 according to Graphtreon, although earnings have gone up and down over time.

Aboukhadijeh noted that one major benefit was that he had ownership over his own funds. “I am glad I did a Patreon because the money is mine,” he said.

While Patreon is one direct approach for generating revenues from users, another one is to offer dual licenses, one free and one commercial. That’s the model of License Zero, which Kyle Mitchell propsosed last year. He explained to me that “License Zero is the answer to a really simple question with no simple answers: how do we make open source business models open to individuals?”

Mitchell is a rare breed: a lifelong coder who decided to go to law school. Growing up, he wanted to use software he found on the web, but “if it wasn’t free, I couldn’t download it as a kid,” he said. “That led me into some of the intellectual property issues that paved a dark road to the law.”

License Zero is a permissive license based on the two-clause BSD license, but adds terms requiring commercial users to pay for a commercial license after 90 days, allowing companies to try a project before purchasing it. If other licenses aren’t available for purchase (say, because a maintainer is no longer involved), then the language is no longer enforceable and the software is offered as fully open source. The idea is that other open source users can always use the software for free, but for-profit uses would require a payment.

Mitchell believes that this is the right approach for individuals looking to sustain their efforts in open source. “The most important thing is the time budget – a lot of open source companies or people who have an open source project get their money from services,” he said. The problem is that services are exclusive to a company, and takes time away from making a project as good as it can be. “When moneymaking time is not time spent on open source, then it competes with open source,” he said.

License Zero is certainly a cultural leap away from the notion that open source should be free in cost to all users. Mitchell notes though that “companies pay for software all the time, and they sometimes pay even when they could get it for free.” Companies care about proper licensing, and that becomes the leverage to gain revenue while still maintaining the openness and spirit of open source software. It also doesn’t force open source maintainers to take away critical functionality — say a management dashboard or scaling features — to force a sale.

Changing the license of existing projects can be challenging, so the model would probably best be used by new projects. Nonetheless, it offers a potential complement or substitute to Patreon and other subscription platforms for individual open source contributors to find sustainable ways to engage in the community full-time while still putting a roof over their heads.

Supporting the organization: Tidelift and Open Collective

Supporting individuals makes a lot of sense, but often companies want to support the specific projects and ecosystems that underpin their software. Doing so can be next to impossible. There are complicated logistics required in order for companies to fund open source, such as actually having an organization to send money to (and for many, to convince the IRS that the organization is actually a non-profit). Tidelift and Open Collective are two different ways to open up those channels.

Tidelift is the brainchild of four open-source fanatics led by Donald Fischer. Fischer, who is CEO, is a former venture investor at General Catalyst and Greylock as well as a long-time executive at Red Hat. In his most recent work, Fischer invested in companies at the heart of open source ecosystems, such as Anaconda (which focuses on scientific and statistical computing within Python), Julia Computing (focused on the Julia programming language), Ionic (a cross-platform mobile development framework), and TypeSafe now Lightbend (which is behind the Scala programming language).

Fischer and his team wanted to create a platform that would allow open source ecosystems to sustain themselves. “We felt frustrated at some level that while open source has taken over a huge portion of software, a lot of the creators of open source have not been able to capture a lot of the value they are creating,” he explained.

Tidelift is designed to offer assurances “around areas like security, licensing, and maintenance of software,” Fischer explained. The idea has its genesis in Red Hat, which commercialized Linux. The idea is that companies are willing to pay for open source when they can receive guarantees around issues like critical vulnerabilities and long-term support. In addition, Tidelift handles the mundane tasks of setting up open source for commercialization such as handling licensing issues.

Fischer sees a mutualism between companies buying Tidelift and the projects the startup works with. “We are trying to make open source better for everyone involved, and that includes both the creators and users of open source,” he said. “What we focus on is getting these issues resolved in the upstream open source project.” Companies are buying assurances, but not exclusivity, so if a vulnerability is detected for instance, it will be fixed for everyone.

Tidelift initially launched in the JavaScript ecosystem around React, Angular, and Vue.js, but will expand to more communities over time. The company has raised $15 million in venture capital from General Catalyst and Foundry Group, plus former Red Hat chairman and CEO Matthew Szulik.

Fischer hopes that the company can change the economics for open source contributors. He wants the community to move from a model of “get by and survive” with a “subsistence level of earnings” and instead, help maintainers of great software “win big and be financially rewarded for that in a significant way.”

Where Tidelift is focused on commercialization and software guarantees, Open Collective wants to open source the monetization of open source itself.

Open Collective is a non-profit platform that provides tools to “collectives” to receive money while also offering mechanisms to allow the members of those collectives to spend their money in a democratic and transparent way.

Take, for instance, the open collective sponsoring Babel. Babel today receives an annual budget of $113,061 from contributors. Even more interesting though is that anyone can view how the collective spends its money. Babel currently has $28,976.82 in its account, and every expense is listed. For instance, core maintainer Henry Zhu, who we met earlier in this essay, expensed $427.18 on June 2nd for two weeks worth of Lyft rides in SF and Seattle.

Xavier Damman, CEO and founder of Open Collective, believes that this radical transparency could reshape how the economics of open source are considered by its participants. Damman likens Open Collective to the “View Source” feature of a web browser that allows users to read a website’s code. “Our goal as a platform is to be as transparent as possible,” he said.

Damman was formerly the founder of Storify. Back then, he built an open source project designed to help journalists accept anonymous tips, which received a grant. The problem was that “I got a grant, and I didn’t know what to do with the money.” He thought of giving it to some other open source projects, but “technically, it was just impossible.” Without legal entities or paperwork, the money just wasn’t fungible.

Open Collective is designed to solve those problems. Open Collective itself is a 501(c)6 non-profit, and it technically receives all money destined for any of the collectives hosted on its platform as their fiscal sponsor. That allows the organization to send out invoices to companies, providing them with the documentation they need in order to write a check. “As long as they have an invoice, they are covered,” Damman explained.

Once a project has money, it is up to the maintainers of that community to decide how to spend it. “It is up to each community to define their own rules,” Damman said. He notes that open source contributors can often spend the money on the kind of uninteresting work that doesn’t normally get done, which Damman analogized as “pay people to keep the place clean.” No one wants to clean a public park, but if no one does it, then no one will ever use the park. He also noted that in-person meetings are a popular usage of revenues.

Open Collective was launched in late 2015, and since then has become home to 647 open source projects. So far, Webpack, the popular JavaScript build tool, has generated the most revenue, currently sitting at $317,188 a year. One major objective of the non-profit is to encourage more for-profit companies to commit dollars to open source. Open Collective places the logos of major donors on each collective page, giving them visible credit for their commitment to open source.

Damman’s ultimate dream is to change the notion of ownership itself. We can move from “Competition to collaboration, but also ownership to commons,” he envisioned.

Sustaining sustainability

It’s unfortunately very early days for open source sustainability. While Patreon, License Zero, Tidelift, and Open Collective are different approaches to providing the infrastructure for sustainability, ultimately someone has to pay to make all that infrastructure useful. There are only a handful of Patreons that could substitute for an engineer’s day job, and only two collectives by my count on Open Collective that could support even a single maintainer full time. License Zero and Tidelift are too new to know how they will perform yet.

Ultimately though, we need to change the culture toward sustainability. Henry Zhu of Babel commented, “The culture of our community should be one that gives back and supports community projects with all that they can: whether with employee time or funding. Instead of just embracing the consumption of open source and ignoring the cost, we should take responsibility for it’s sustainability.”

In some ways, we are merely back to the original free rider problem in the tragedy of the commons — someone, somewhere has to pay, but all get to share in the benefits.

The change though can happen through all of us who work on code — every software engineer and product manager. If you work at a for-profit company, take the lead in finding a way to support the code that allows you to do your job so efficiently. The decentralization and volunteer spirit of the open source community needs exactly the same kind of decentralized spirit in every financial contributor. Sustainability is each of our jo

from iFeeltech IT News Mix4 https://techcrunch.com/2018/06/23/open-source-sustainability/

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/23/open-source-sustainability/

Thermostats, Locks and Lights: Digital Tools of Domestic Abuse

Internet-connected home devices that are marketed as the newest conveniences are also being used to harass, monitor and control.

from iFeeltech IT News Mix4 https://www.nytimes.com/2018/06/23/technology/smart-home-devices-domestic-abuse.html?partner=rss&emc=rss

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/23/thermostats-locks-and-lights-digital-tools-of-domestic-abuse/

Are scooter startups really worth billions?

It’s been hard to miss the scooter startup wars opening fresh, techno-fueled rifts in Valley society in recent months. Another flavor of ride-sharing steed which sprouted seemingly overnight to clutter up sidewalks — drawing rapid-fire ire from city regulators apparently far more forgiving of traffic congestion if it’s delivered in the traditional, car-shaped capsule.

Even in their best, most-groomed PR shots, the dockless carelessness of these slimline electrified scooters hums with an air of insouciance and privilege. As if to say: Why yes, we turned a kids’ toy into a battery-powered kidult transporter — what u gonna do about it?

An earlier batch of electric scooter sharing startups — offering full-fat, on-road mopeds that most definitely do need a license to ride (and, unless you’re crazy, a helmet for your head) — just can’t compete with that. Last mile does not haul.

But a short-walk replacement tool that’s so seamlessly manhandled is also of course easily vandalized. Or misappropriated. Or both. And there have been a plethora of scooter dismemberment/kidnap horror stories coming out of California, judging by reports from the scooter wars front line. Hanging scooters in trees is presumably a protest thing.

Scooter brand Lime struck an especially tone-deaf tech note trying to fix this problem after an update added a security alarm  that bellowed robotic threats to call the cops on anyone who fumbled to unlock them. Safe to say, littering abusive scooters in public spaces isn’t a way to win friends and influence people.

Even when functioning ‘correctly’, i.e. as intended, scooter rides can ooze a kind of brash entitlement. The sweatless convenience looks like it might be mostly enabling another advance in tech-fueled douche behavior as a t-shirt wearing alpha nerd zips past barking into AirPods and inhaling a takeaway latte while cutting up the patience of pedestrians.

None of this fast-seeded societal friction has put the brakes on e-scooter startup momentum, though. Au contraire. They’ve been raising massive amounts of investment on rapidly inflating valuations ($2BN is the latest valuation for Bird).

But buying lots of e-scooters and leaving them at the mercy of human whim is an expensive business to try scaling. Hence big funding rounds are necessary if you’re going to replace all the canal-dunked duds and keep scooting fast enough for the competition.

At the same time, there isn’t a great deal to differentiate one e-scooter experience over another — beyond price and proximity. Branding might do it but then you have to scramble even harder and faster to create a slick experience and inflate a brand that sticks. (And it goes without saying that a scooter sticky with fecal-matter is absolutely not that.)

The still fledgling startups are certainly scrambling to scale, with some also already pushing into international markets. Lime just scattered ~200 e-scooters in Paris, for example. It’s also been testing the waters more quietly in Zurich. While Bird has its beady eye on European territory too.

The idea underpinning some very obese valuations for these fledgling startups is that scooters will be a key piece of a reworked, multi-modal transport mix for urban mobility, fueled by app-based convenience and city buy-in to greener transport options with emissions-free benefits. (Albeit scooters’ greenness depends on what they’re displacing; Great if it’s gas-guzzling cars, less compelling if it’s people walking or peddling.)

And while investors are buying in to the vision that lots of city dwellers are going to be scooting the last mile in future, and betting big on sizable value being captured by a few plucky scooter startups — more than half a billion dollars has been funneled into just two of these slimline scooter brands, Bird and Lime, since February — there are skeptical notes being sounded too.

Asking whether the scooter model really justifies such huge raises and heady valuations. Wondering if it isn’t a bit crazy for a fledgling Bird to be 2x a unicorn already.

Shared bike and scooter fleets are paving the way to a revolution in urban mobility but will only capture little value in the long term. Investors are highly overestimating the virtue of these businesses.

— Thibaud Elziere (@tiboel) June 18, 2018

https://platform.twitter.com/widgets.js

The bear case for these slimline e-scooters says they’re really only fixing a pretty limited urban mobility problem. Too spindly and unsafe to go the distance, too sedate of pace (and challenged for sidewalk space) to feel worthwhile if you don’t have far to go anyway. And of course you’re not going to be able to cart your kids and/or much baggage on a stand-up two wheeler. So they’re useless for families.

Meanwhile scooter invasions are illegal in some places and, where they are possible, are fast inviting public and regulatory frisson and friction — by contributing to congestion and peril on already crowded pavements.

After taking one of Lime’s just-landed e-scooters for a spin in Paris this week, Willy Braun, VC at early stage European fund Daphni, came away unimpressed. “I didn’t feel I was really saving time in a short distance, since there is always many people in our narrow sidewalks,” he tells us. “And it isn’t comfortable enough for me to imagine a longer distance. Also it’s quite expensive ($1 per use and $.15/min).

“Lastly: Before renting it I read two news media that told me I had to use it only on the sidewalks and they tell us that we should only use it on the road during the onboarding — and that wearing an helmet is mandatory without providing it). As a comparison, I’d rather use e-bikes (or emoto-bikes) for longer journey without hesitation.”

“Give us Jump instead of Lime!” he adds, namechecking the electric bike startup that’s been lodged under Uber’s umbrella since April, adding a greener string to its urban mobility bow — and which is also heading over to Europe as part of the ride-hailing giant’s ongoing efforts to revitalize its regionally battered brand.

“Uber stands ready to help address some of the biggest challenges facing German cities: tackling air pollution, reducing congestion and increasing access to cleaner transportation solutions,” said CEO Dara Khosrowshahi wheeling a bright red Jump bike on stage at the Noah conference in Berlin earlier this month. Uber’s Jump e-bikes will launch in Germany this summer.

E-bikes do seem to offer more urban mobility versatility than e-scooters. Though a scooter is arguably a more accessible type of wheeled steed vs a bike, given you can just stand on it and be moved.

But in Europe’s dense and dynamic urban environments — which, unlike the US, tend to be replete with public transit options (typically at a spectrum of price-points) — individual transport choices tend to be based firstly on economics. After which it’s essentially a matter of personal taste and/or the weather.

Urban transport horses for courses — depending on your risk, convenience and comfort thresholds, thanks to a publicly funded luxury of choice. So scooters have loads of already embedded competition.

TechCrunch’s resident Parisienne, Romain Dillet — a regular user of on-demand bike services in the city (of which there are many), and prior to that the city’s own dock-based bike rental scheme — also went for a test spin on a Lime scooter this week. And also came away feeling underwhelmed.

“This is bad,” he said after his ride. “It’s slow and you need to brake constantly. BUT the worst part is that it feels waaaaaay more dangerous than a bike. Basically you can’t brake abruptly because you’re just standing there.”

Index Venture’s Martin Mignot was also in Paris this week and he took the chance to take a Lime scooter for a spin too — checking out the competition in his case, given the European VC firm is a Bird backer. So what did he think?

“The experience is pretty cool. It’s slightly faster than a bike, there’s no sweating. The weather was just amazing and very hot in Paris so it was pretty amazing in terms of speed and lack of effort,” he says, rolling out the positively spun, vested view on scooter sharing. “Especially going up hill to go to Gare du Nord.

“And the lack of friction — just to get on board and get started. So in general I think it’s a great experience and I think it feels a really interesting niche between walking and on-demand bikes… In Paris you’ve also got the mopeds. So that kind of ‘in between offering’. I think there’s a big market there. I think it’s going to work pretty well in Paris.”

Mignot is a tad disparaging about the quality of Lime’s scooters vs the model being deployed by Bird — a scooter model he also personally owns. But again, as you’d expect given his vested interests.

“Obviously I’m biased but I would say that the Xiaomi scooter/Ninebot scooter is higher quality than the one that Lime are using,” he tells us. “I thought that the Lime one, the handlebar is a little bit too high. The braking is a little bit too soft. Maybe it was the one I used, I don’t know.”

Talking generally about scooter startups, he says investors’ excitement boils down to trip frequency — thanks exactly to journeys being these itty-bitty last mile links.

But it’s also then about the potential for all that last mile hopping to be a shortcut for winning a prized slot on smartphone users’ homescreens — and thus the underlying game being played looks like a jockeying for prime position in the urban mobility race.

Lime, for example, started out with bike rentals before jumping into scooters and going multi-modal. So scooter sharing starts to look like a strategy for mobility startups to scoot to the top of the attention foodchain — where they’re then positioned to offer a full mix and capture more value.

So really scooters might mostly be a tool for catching people’s app attention. Think of that next time you see one lying on a sidewalk.

“What’s very interesting if you look at the trip distribution, most of the trips are short. So the vast majority of trips if you’re walking, obviously, are less than three miles. So that’s actually where the bulk of the mobility happens. And scooters play really well in that field. So in terms of sheer number of trips I think it’s going to dwarf any other type of transportation. And especially ride-hailing,” says Mignot.

“If you look at how often do people use Uber or Lyft or Taxify… it’s going to be much less frequent than the scooter users. And I think that’s what makes it such an interesting asset… The frequency will be much higher — and so the apps that power the scooters will tend to be on the homescreen. And kind of on top of the foodchain, so to speak. So I think that’s what makes it super interesting.”

Scooters also get a big investor tick on merit of the lack of friction standing in the way of riding vs other available urban options such as bikes (or, well, non-electric scooters, skateboards, roller blades, public transport, and so on and on) — in both onboarding (getting going) and propulsion (i.e. the lack of sweat required to ride) terms.

“That’s what’s so brilliant with these devices, you just snap the QR code and off you go,” he says. “The difference with bikes is that you don’t have to produce any effort. I think there are cases where obviously bikes are better. But I think there are a lot of cases where people will want something where you don’t sweat.

“Where you don’t wrinkle your clothes. Which goes a little bit faster. Without going all the way to the moped experience where you need to put the helmet, which is a bit more dangerous, which a lot of people, especially women, are not super familiar with. So I think what’s exciting with scooters as a form factor is it’s actually very mainstream.

“Anyone can ride them. It’s very simple to manoeuvre. It’s not super fast, it’s not too dangerous. It doesn’t require any muscular effort — so for older people or for people who just don’t want to sweat because they’re going to a meeting or something. It’s just a fantastic option.”

Index has also invested in an e-bike startup (Cowboy) and the firm is fully signed up to the notion that urban mobility will be multimodal. So if e-scooters valuations are a bit overcooked Index is not going to be too concerned. People in cities are clearly going to be riding something. And backing a mix is a smart way to hedge the risk of any one option ending up more passing fad than staple urban steed.

Mostly Index is betting that people will keep on riding robotic horses for urban courses. And whatever they ride it’s a fairly safe bet that an app is going to be involved in the process of finding (docklessness is therefore another attention play) or unlocking (scan that QR code!) the mobility device — opening up the possibility that a single app could house multiple mobility options and thus capture more overall value.

“It’s not a one-size fits all. They’re all complementing each other,” says Mignot of the urban mobility options in play. “I would say e-bikes are probably a little bit more great for little bit longer trips because you’re sitting down. But again it takes a little bit longer, because you have to adjust the saddle, you need to start peddling. There’s a bit more friction both on the onboading and on the riding. But they’re a bit better for slightly longer distances. I would say for shorter distances there’s nothing better than the scooter.”

He also points out that scooters are both cheaper and less bulky than e-bikes. And because they take up less street space they can — at least in theory — be more densely stacked, thereby generating the claimed convenience by having them sitting near enough to convince someone not to bother walking 10 minutes to the café or gym — and just scoot instead. So scooters’ slimline physique is also especially exciting to investors. (Even if, ironically, it’s being deployed to urge people to walk less.)

“I think we will end up with more density of scooters. Which is super important,” he continues. “People will, in the end, tend to take the vehicle that they can find where they are. And I think it’s more likely, eventually, that they will get a scooter than an e-bike. Just simply because they take less space and they are less expensive.”

But why wouldn’t people who do get won over to the sweatless perks of last mile scooting just buy and own their own ride — rather than shelling out on an ongoing basis to share?

Unlike bikes, scooters are mobile enough to be picked up and moved around fairly easily. Which means they can go with you into your home, office, even a restaurant — disruptively reducing theft risk. Whereas talk to any bike owner and they’ll almost invariably have at least one tale of theft woe, which is a key part of what makes bike sharing so attractive: It erases theft worry.

Add to that, you can find e-scooters on sale in European electronics shops for as little as €140. So if you’re going to be a regular scooterer, the purely economic argument to just own your own looks pretty compelling.

And people zipping around on e-scooters is a pretty common sight in another dense European city, Barcelona, which has very scooter-friendly weather but no scooter startups (yet). But unless it’s a tourist weaving along the seafront most of these riders are not shared: People just popped into their local electronics shop and walked out with a scooter in a box.

So the rides aren’t generating repeat revenue for anyone except the electricity companies.

 

Asked why people who do want to scoot won’t just buy, rather than rent Mignot talks up the hassle of ownership — undermined slightly by the fact he is also a scooter owner (despite the claimed faff from problems such as frequent flat tires and the chore of the nightly charge).

“The thing you notice very rapidly: There are two things, one is the maintenance,” he says. “The models that exist today are not super robust. Maybe in a very flat, very smooth roads, maybe Santa Monica, maybe it’s a little bit less true but I would say in Europe the maintenance that is required is fairly high… I have to do something on mine every week.

“The other thing is it takes a little bit of space. If you have to bring it to a restaurant or whatever type of crowded place, a movie theatre or wherever you’re going, to an office, to a meeting room, it’s a little bit on the heavy side, and it’s a little bit inconvenient. So certainly some people will buy them… But I also think that there are a lot of cases where you’d rather have it just on-demand.”

Unlike Mignot and Index, Tom Bradley, of UK focused VC firm Oxford Capital, is not so convinced by the on-demand scooter craze.

The firm has not made any e-scooter investments itself, though mobility is a “core theme”, with the portfolio including an on-demand coach travel startup (Sn-ap), and technology plays such as Morpheus Labs (machine learning for driverless cars) and UltraSoc (complex circuits for automotive parts, which sells to the likes of Tesla).

But it’s just not been sold on scooter startups. Bradley describes it as an “open question” whether scooters end up being “an important part of how people move

from iFeeltech IT News Mix4 https://techcrunch.com/2018/06/23/are-scooter-startups-really-worth-billions/

from iFeeltech, INC https://ifeeltechinc.wordpress.com/2018/06/23/are-scooter-startups-really-worth-billions/