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Sony blamed Disney for the Spider-Man deal falling apart and said it hoped 'this might change in the future'

Businessinsider - Wed, 08/21/2019 - 14:50

  • Sony released a statement late Tuesday saying that it was Disney's decision not to have Marvel Studios president Kevin Feige involved with future Spider-Man movies.
  • "We hope this might change in the future, but understand that the many new responsibilities that Disney has given him – including all their newly added Marvel properties – do not allow time for him to work on IP they do not own," Sony said.
  • Sony owns the film rights to Spider-Man and 900 related characters and struck a deal with Marvel Studios in 2015 for the character to appear in the MCU.
  • Visit Business Insider's homepage for more stories.

Spider-Man's time in the Marvel Cinematic Universe — at least as we know it — seems be over.

Sony Pictures released a statement late Tuesday night, blaming Disney for the two companies' inability to not reach a deal over the superhero web-slinger's movie appearances.

The full statement, provided to Business Insider, is below:

"Much of today's news about Spider-Man has mischaracterized recent discussions about Kevin Feige's involvement in the franchise. We are disappointed, but respect Disney's decision not to have him continue as a lead producer of our next live action Spider-Man film. We hope this might change in the future, but understand that the many new responsibilities that Disney has given him – including all their newly added Marvel properties – do not allow time for him to work on IP they do not own. Kevin is terrific and we are grateful for his help and guidance and appreciate the path he has helped put us on, which we will continue."

Sony left open the possibility of a deal being reached in the future in its statement, but alluded to Disney's recent acquisition of Fox — and all of its Marvel characters, including the X-Men — as a reason for the deal's implosion. 

Disney did not immediately respond to a request for comment from Business Insider.

Deadline reported on Tuesday that Sony and Disney had failed to come to an agreement over Spider-Man's future in the MCU. Disney wanted an even 50/50 cofinancing stake in future "Spider-Man" movies, according to Deadline, while Sony wanted to keep the deal as is, where Marvel receives up to 5% of first-dollar gross and any merchandising revenue.

Sony hopes that star Tom Holland and director Jon Watts will return for two more Spider-Man movies, according to Deadline. Marvel Studios and Kevin Feige would not be involved unless something changes between now and then, meaning those movies would not include appearances from other MCU characters.

Sony has owned the film rights to Spider-Man and 900 related characters since 1998, and can keep them as long as it releases a Spider-Man movie every five years. It struck a deal with Marvel Studios in 2015 where Spider-Man would appear in the MCU, but Sony would retain distribution rights.

SEE ALSO: The acclaimed writer of X-Men story 'The Dark Phoenix Saga' opens up about Hollywood's 2 attempts at bringing it to life — and what he wants to see next

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NOW WATCH: Tobey Maguire's 'Spider-Man' is a classic, even though it's one of the more under-appreciated superhero films

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You might not want to dismiss Spotify's hardware plans just yet, even though Spotify says you should (SPOT)

Businessinsider - Wed, 08/21/2019 - 14:50

  • Spotify said in May that its voice-activated streaming music gadget, the Car Thing, is just a prototype.
  • Spotify said it was testing the device with a limited number of users to learn about "how people listen to music and podcasts."
  • But Spotify's language in its FCC filings paints a different picture, and suggests a product intended to be purchased by consumers.
  • Here are some new, intriguing clues about Spotify's hardware plans.
  • Click here for more BI Prime stories.

Remember the Spotify "Car Thing"? 

Reports of the streaming music service's first-ever foray into hardware — in the form of a voice-controlled smart assistant — provoked a lot of excited speculation earlier this year. But then Spotify threw cold water on the party. Yes, Spotify was testing a hardware prototype, it acknowledged in a blog post. But no, you won't be able to buy it.

The Car Thing, it said, is a prototype device that Spotify is testing with a limited number of people to help the company better understand how consumers use its streaming service. In this case, specifically in automobiles.

"We don't have any current plans to make this specific device available to consumers," Spotify said in the blog post published in May. 

"Car Thing was developed to help us learn more about how people listen to music and podcasts. Our focus remains on becoming the world's number one audio platform—not on creating hardware."

No hardware. Let's move on. Case closed.

Or is it?

Two weeks after that blog post, Spotify submitted filings to the FCC for a hardware device. The filings went largely unnoticed, probably because Spotify had already publicly acknowledged it had a gadget prototype in the works and said it had no real future.

But a close look at the filings suggests that Spotify's hardware ambitions may be more serious than the company's blog post makes it sound.

The filing is for a "music streaming device," that operates in a variety of radio frequencies, including the 2.4Ghz range typically used for WiFi.

Although heavily redacted, some of the language in the filings suggests a product that will be sold to consumers. 

Instructions for the required FCC labeling information "will be provided with the product at the time of purchase, in the user manual, operating instructions, packaging material, quick guide pamphlet," the filing reads (words bolded for emphasis by Business Insider).

"End user can access to product-related website, a reference (URL) to obtain the website information is provided at the time of purchase in the user manual, operating instructions, packaging material, quick guide pamphlet, etc." the filing continues. 

That doesn't exactly sound like a limited testing prototype. 

User manuals, quick guide pamphlets, special websites and informative packaging material sound like what you would expect from something on the shelf at a Best Buy store. 

The filing is signed by Spotify's Daniel Bromand. On LinkedIn, Bromand lists his title as "Engineering Lead Manager," though on the FCC filing he is identified as "Head of Technology, Hardware Products."

Check the manual

The user manual for the streaming device is also in Spotify's FCC filings, but it's not available for the public to view yet. That's a standard move for consumer electronics companies, which generally request that the FCC withhold any photos, user manuals, and other product details until after it becomes available. 

According to the FCC filings, the user manual for Spotify's music streaming device will become publicly viewable on November 27, 2019. That's on a Wednesday, two days before Black Friday, the biggest shopping day of the year. 

This doesn't prove that Spotify will launch a hardware product this holiday season. The timing of the redacted user manual could be a coincidence.

A Spotify spokesperson sent Business Insider the following statement, reiterating that it does not plan to sell the "specific" device mentioned in the May blog post — that is, the Car Thing — to consumers:

"Spotify is always looking to create exciting ways to enhance the audio experience for our users, including testing new products, offerings and ideas. We don't have any current plans to make this specific device available to consumers, but the learnings from our test will dictate how we develop experiences everywhere you listen."

We don't know what these "experiences" will be. And Spotify has said its focus is "not hardware."

But if a company were planning to launch a consumer hardware device, its FCC filings would look a lot like Spotify's. 

SEE ALSO: The trade war's ripples are stirring up rough seas throughout tech

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NOW WATCH: Jeff Bezos is worth over $160 billion — here's how the world's richest man makes and spends his money

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NYU professor calls WeWork 'WeWTF,' says any Wall Street analyst who believes it's worth over $10 billion is 'lying, stupid, or both'

Businessinsider - Wed, 08/21/2019 - 14:48

  • Scott Galloway, the best-selling author and well-known tech-industry pundit, is a professor of marketing at New York University's Stern School of Business.
  • He analyzed WeWork's S-1 filing as the company prepares for an initial public offering under its new name, The We Company.
  • He summarized most of the major criticisms that have been lobbed at the company: its losses, culture, corporate structure, and disclosures about its business dealings with its founder-CEO, Adam Neumann.
  • But Galloway, in his customary shoot-from-the-hip style, takes it further: He also criticized the bankers involved in this deal, writing they "stand to register $122 million in fees flinging feces at retail investors."
  • The following is his blog post in full, republished by permission. It originally ran on his own blog, "No Mercy / No Malice."
  • Read all of BI's WeWork coverage here.

Really? Really?

I've started nine firms and I'm, generously, 3-4-2 (win-lose-tie). In retrospect, and I think about this a lot, the only reliable forward-looking indicator of our firm's success or failure was … timing. Specifically, the part of the economic cycle at founding.

The firms we started in recessions had an easier time finding talent, controlling costs, and getting immediate feedback about if this thing worked as clients/consumers held their purse strings closed. Then, armed with a battle-tested value proposition, as the recession ended, we enjoyed the afterburner of confidence to spend more and try new things. #disco.

In frothy markets, it's easy to enter into a consensual hallucination, with investors and markets, that you're creating value. And it's easy to wallpaper over the shortcomings of the business with a bull market's halcyon: cheap capital. WeWork has brought new meaning to the word wallpaper.

Read more: How WeWork paid Adam Neumann $5.9 million to use the name 'We'

This is more reminiscent of the cheap marbled paneling you'd find in Mike Brady's home office — paneling whose mucilaginous coating will dissipate at the first whiff of a recession, revealing a family of raccoons or the mummified corpses of drug mules.

The features of seventies sitcom paneling:


WeWork's prospectus has a dedication (no joke): "We dedicate this to the power of We — greater than any one of us, but inside each of us." Pretty sure Jim Jones had t-shirts printed up with this inspiring missive.

Speaking of idolatry, "Adam" (as in Neumann) is mentioned 169 times, vs. an average of 25 mentions for founder/CEOs in other unicorn prospectuses.

Uber's CEO, Dara Khosrowshahi, is mentioned 29 times in their prospectus. Granted, "Adam" is super dreamy, in sort of an Argentinian polo player way (he's Israeli). But he's not 6x dreamier than Dara, who has a whole "Omar Sharif, if he went to Brown" thing going on. But I digress. We's mission is "to elevate the world's consciousness." Maybe, but it's clear the mission of the prospectus is to dampen our consciousness ahead of the sh*tshow that is "The Story of Us: We."


Find the hottest sector, and if you don't have the insight, IP, genius, capital, code, skills, human capital, or a clue, then just borrow the words. SaaS firms trade at a multiple of revenues (yay), vs. real estate firms, which trade at a multiple of EBITDA (boo). So, We isn't a real estate firm renting desks, it's a Space as a Service (SAAS) firm. I know, use the word "technology" over and over, despite having little R&D and computers and stuff, and voilà … we're Salesforce.

Today I froze water and used this technology to reconfigure the environment encapsulating my Zacapa and Coke. So, I'm Bill Gates. Better yet, today I began calling my wife Gisele, which I'm pretty sure means I'm the starting QB for the Pats.

At WeWTF, you're not a guest, but a member. Member has a more "recurring revenue" sound to it. So, I plan to be a member tomorrow night at the Marriott in Boston, where I will then get membership to the TD Center so I can watch a 21-year-old Canadian (Shawn Mendes) with my 8-year-old son — also a member of the Marriott and TD Center, for tomorrow at least.

Invented Metrics

GAAP accounting standards got you down? No problema at WeWTF. We has begun reporting "Community-based EBITDA," profitability before the BITDA, but is also taking out expenses, including real-estate, that comprise the bulk of cost required to deliver the service. A more honest description of the metric would be "EBEE, Earnings Before Everything Else."

As someone who follows stocks and goes on TV to pretend I have any idea which direction a given stock is going, I'd like to suggest a few metrics to provide insight into We:

EBG, Earnings Before Gluten
EBBG, Earnings Before the Big Dawg (tennis balls, pig's ears, etc.)
EBEPW, Earnings Before Equal Pay for Women

Red Flags

My goddaughter informed me she's dating a club promoter, a red flag. Occasionally, red flags marry each other, the Biebs and Hailey Baldwin — what could go wrong? So now, imagine red flags the dimensions of Kansas. Buckle up:

— Adam Neumann has sold $700 million in stock. As a founder, I've sold shares into a secondary offering to get some liquidity and diversify holdings. Ok, I get it. But 3/4 of a billion dollars? This is 700 million red flags that spell words on the field of a football field at halftime: "Get me the hell out of this stock, but YOU should buy some."

— Gross margins are a pretty decent proxy for how good or bad a business is. And this is a sh**ty business:

— Adam has several family members working in the business who make "less than $200,000."

— The ownership structure chart is similar to a hieroglyphic on a cave wall about the survival of the species: Harvest the crops when the sun is high in the horizon, do not venture over the hills, hostile tribes live there, and … don't buy this stock. The corporate governance structure of WeWTF makes Chinese firms look American, pre–big tech.


— The related party section of this prospectus reads like the Trump administration. Adam owns 10 buildings, several that he leased to WeWTF at a handsome profit. Adam also owned the rights to the "We" trademark, which the firm decided they must own and paid the founder/CEO $5.9 million for the rights. The rights to a name nearly identical to the name of the firm where he's the founder/CEO and largest shareholder.


— Mismatched durations. The founder of Kohlberg Capital, Jim Kohlberg (total gangster), taught me investment firms go out of business because of "mismatched durations." It's about raising money short (customers who can stop buying your product service soon/tomorrow) and investing money long (10-year leases). WeWTF is an especially risky business going into a recession, when the ability to variabilize costs is limited, but revenue decline is unlimited.

WeWTF has $47 billion in long-term obligations (leases) and will do $3 billion in revenue this year. What could go wrong?

There are other businesses like this (real estate, Hertz), and they are good businesses. Businesses that trade at, I don't know, 0.5 to 2x revenues. However, WeWTF is claiming it's not in this neighborhood, or even the same planet. So, let's talk valuation.

Insane. Seriously loco. Ok, let's assume WeWTF is onto something, better than peer IWG or Hertz. But is this firm, trading at 26x revenues, superior to Amazon, which trades at 4x revenues?

There appears to be no scale effects, as losses have kept pace with revenue growth. There is little pricing power, as they are still a mole on the elephant of commercial real estate. There is no defensible IP, no technology, no regulatory moats, no network effects, and no flywheel effect (the ancillary businesses are stupid, just stupid).

The last round $47 billion "valuation" is an illusion. SoftBank invested at this valuation with a "pref," meaning their money is the first money out, limiting the downside. The suckers, idiots, CNBC viewers, great Americans, and people trying to feel young again who buy on the first trade — or after — don't have this downside protection. Similar to the DJIA, last-round private valuations are harmful metrics that create the illusion of prosperity.

The bankers (JPM and Goldman) stand to register $122 million in fees flinging feces at retail investors visiting the unicorn zoo. Any equity analyst who endorses this stock above a $10 billion valuation is lying, stupid, or both.

Adam's wife is Gwyneth Paltrow's cousin, meaning Adam is two degrees removed from Goop, an assault on humanity.

Ms. Neumann created controversy when she went on CNBC and said: "A big part of being a woman is to help men [like Adam] manifest their calling in life."

Ok, fine … whatever works for you and Adam. But it's not retail investors' role to help Adam realize his calling — he should feel pretty manifested with $700 million. The paneling is compelling and cool, but it's beginning to curl and the substance behind the wood veneer stinks. I mean, stinks.

Scott Galloway is a professor of marketing at NYU's Stern School of Business and best-selling author of "The Four" and "The Algebra of Happiness." He is a frequent commenter on the tech industry and founder of nine firms including L2, Red Envelope, and Prophet. This article originally appeared on Scott Galloway's blog No Mercy/No Malice. Follow Galloway on Twitter at @profgalloway. Republished by permission.

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NOW WATCH: I cleaned my entire apartment with 4 of Amazon's highest-rated cleaning robots, but I could've done a much better job myself

Categories: English

Aside from the Trump campaign itself, the biggest spender on pro-Trump Facebook ads is reportedly a secretive New York-based newspaper (FB)

Businessinsider - Wed, 08/21/2019 - 14:45

  • President Donald Trump's re-election campaign seems to be getting unlikely help from The Epoch Times, a publication tied to Falun Gong, a Chinese religious group. 
  • The Epoch Times is the second highest-spender on pro-Trump Facebook ads, just after the Trump campaign itself.
  • According to publicly-available Facebook ad data discovered by NBC News, The Epoch Times has spent over $1.5 million across the last six months on pro-Trump Facebook ads.
  • Epoch Times editor-in-chief Jasper Fakkert denied the report in an email exchange Tuesday afternoon. "NBC News' statement is incorrect," Fakkert told Business Insider. 
  • Visit Business Insider's homepage for more stories.

The second-largest source of pro-Donald Trump Facebook ads is The Epoch Times, a non-profit publication that's tied to a Chinese religious sect named Falun Gong, NBC News reported on Tuesday. NBC News spoke with former employees of the Epoch Times, who say that Falun Gong "heavily informs" the publication's coverage.

The publication has reportedly spent over $1.5 million on pro-Trump Facebook advertising across the last six months. Those ads are described by NBC as featuring "unidentified spokespeople" who "thumb through a newspaper to praise Trump, peddle conspiracy theories about the 'Deep State,' and criticize 'fake news' media."

The ads are part of an Epoch Times Facebook page called "Coverage of the Trump presidency by The Epoch Times."

In the ads, a man thumbs through copies of The Epoch Times and highlights stories that readers might be interested in — a piece discussing former President Bill Clinton's connections to Jeffrey Epstein, and a piece condemning former special counsel Robert Mueller's investigation of the Trump campaign, among others. 

Facebook categorizes the ads as "about social issues, elections or politics" — a categorization that the social media company says it makes public "to increase ad transparency and as part of our election integrity on Facebook and Instagram."

For its part, The Epoch Times denies that these ads are indended to be political.

"NBC News' statement is incorrect," Epoch Times Editor-in-Chief Jasper Fakker said in an email exchange with Business Insider. "The Epoch Times advertisements are subscription advertisements for the print version of The Epoch Times. In the advertisements we discuss The Epoch Times editorial and feature content and encourage people to subscribe to us. Facebook has specific rules for advertising that require anyone — including a publisher like ourselves — to label content if it touches on social issues or politics, something some news content naturally does. The Epoch Times is a nonpartisan media that is dedicated to truthful and accurate reporting."

You can read Facebook's policies on labeling political and social content here.

But the NBC News report tells another story of the publication's origins, and its business ties to a Chinese religious group named Falun Gong. 

According to the report, The Epoch Times has turned toward pro-Trump advertising and favorable news coverage due to its ties to Falun Gong — the religious group seeks to undermine the Chinese government, and it reportedly sees President Trump as a force for that goal.

Fakkert did not respond to a request for comment on the connection between Falun Gong and The Epoch Times. However, later in the day, the Epoch Times published a rebuttal to the NBC News story, entitled "NBC News Repeats Chinese Communist Party Propaganda in Hit Piece on The Epoch Times," saying that it's always been open about the fact that its founders were Falun Gong practioners. 

SEE ALSO: Facebook ads for Trump's 2020 campaign used models to depict supporters and a Japanese storefront to show a US business

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NOW WATCH: 5 things wrong with Apple's lightning cable

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The 4 biggest US wireless carriers are reportedly throttling mobile video content — even when networks aren't congested (VZ, T, TMUS, S)

Businessinsider - Wed, 08/21/2019 - 14:29

The Big Four US wireless carriers are reportedly throttling mobile video content regardless of whether their networks are being overloaded, according to a study conducted by researchers from Northeastern University and the University of Massachusetts Amherst.

Throttling is when telecoms lower video quality and speeds for mobile subscribers to stem bandwidth demands placed on their networks. The study, which collected data from 650,000 tests in the US between January 2018 and January 2019, observed throttling rates around the clock and not just during peak times of use. 

US carriers were also found to throttle certain video streaming apps more often than others: AT&T for instance, throttled YouTube 74% of the time and Netflix 70% of the time, but wasn't found to slow down speeds for Amazon Prime Video. 

The practice of throttling has become more prevalent and necessary for carriers since the revival of unlimited plans in the past few years. These plans eliminated the overage fees that subscribers were once charged for exceeding their data limits, meaning US consumers have less reason to curb their mobile video consumption habits. 

Throttling has likely also become more prevalent following the repealof net neutrality rules, since carriers are allowed to block, throttle, and prioritize content, as long as they publicly state they're going to do so. But as US carriers are reportedly throttling during periods even when they claim they aren't, the trend could provide further evidence for net neutrality advocates that the absence of such rules is resulting in unfair business practices. 

Here's why this matters: US consumers' mobile video experiences are likely suffering because of wireless carriers' throttling practices. 

US consumers are faced with poor mobile video experiences when compared with dozens of other international countries. A study from OpenSignal provided video experience scores for 69 countries and scored the US with a 47, ranking it as "Fair" (40-55) — which places it in the 59th spot. The subpar showing is likely due to the rise of throttling, which results in delayed load times, buffering, and degrading quality when streaming video content. 

What's next: 5G mobile networking technology could minimize the deployment of throttling in the near future.

5G networks will reduce the need for mobile operators to throttle the speed of a data connection since the standard offers more capacity than 4G. The ability of 5G networks to provide higher data bandwidth will empower telecoms to handle larger amounts of data consumption without needing to free up network congestion by slowing down consumers' connection speeds.

This will enable carriers to better maintain network quality while meeting the growing demands of their unlimited-data subscribers, while also benefiting consumers by improving US mobile video experiences. US consumers could start seeing the effects of 5G soon, as carriers' mobile 5G networks expand to more US cities. So far, AT&T has launched 5G in parts of 21 cities, Verizon in nine, T-Mobile in parts of six, and Sprint in five.

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A team of designers wants to build an iceberg-making submarine to pop out 'ice babies' and combat sea-level rise

Businessinsider - Wed, 08/21/2019 - 14:18

Running out of ice? Make some more.

That's the idea behind a new  proposal for a submarine that could freeze seawater to create new icebergs. The concept, created by a team of designers from Indonesia, won second place in an international design competition through the Association of Siamese Architects. 

The goal of the submarine is to replace sea ice as it melts, inspired by efforts to tackle rainforest loss by planting trees. 

"If we could cover more polar surfaces again with ice, it would certainly prevent the absorption of heat by the oceans, which would also affect global temperatures," team leader and architect Faris Rajak Kotahatuhaha told Business Insider in an email. "The ultimate goal is to respond [to] sea level rise with the different way of thinking."

Melting ice is certainly a problem in need of a solution: Greenland saw record ice melt last month, and Antarctica is losing ice faster than ever in recorded history. Both Greenland's ice sheet and one of Antarctica's biggest glaciers are approaching a threshold of irreversible melting.

If they were to collapse, rising seas would swallow coastal cities.

A submarine that births 'ice babies'

According to the team's design, the ice-making submarine would dip below the ocean surface to fill with seawater, then rise back to the surface and close the hatch to its hexagon-shaped well. A process of reverse osmosis would then filter salt out of the water so that it could freeze faster.

Then the submarine would dump the concentrated salt back into the sea, while the remaining fresh water would get frozen inside a hexagon-shaped cast surrounded by turbines to insulate it with cold air.

After a month, the submarine would reopen its top hatch, sink back below the water, and pop out an 82-foot-wide, 16-foot-thick hexagonal ice chunk. The ship could then push that "ice baby," as the team calls it in the below video, next to other hexagonal icebergs to build an ice sheet.

They call the process "re-iceberg-ization." An animated video illustrates the process:



But Mark Serreze, director of the University of Colorado's National Snow and Ice Data Center, told NBC News that he sees the submarine idea as little more than a "Band-Aid."

"What are you going to do, put out a flotilla of 10,000 submarines?" Serreze said, alluding to the fact that such submarines would have to be deployed on an enormous scale to have any impact on the rate of sea-level rise.

Michael Mann, a professor of atmospheric sciences at Penn State, told NBC that the concept is "like trying to save the sand castle you built at the beach using a dixie cup as the tide comes in." 

More sea ice could help indirectly, if done right 

To really lower sea levels, the icebergs this proposed submarine could make would have to end up on land, Serreze said. That's because melting sea ice does not directly contribute to sea-level rise, since the ice is already in the ocean regardless of whether it's in liquid or solid form. Melting land ice, however — like glaciers and ice sheets — is the real threat.

Sea ice does play a crucial role, however, since it reflects more sunlight (and its warmth) away. 

In their video, the Indonesian design team says new sea ice could also help restore polar ecosystems suffering from the loss of ice habitats.

"If the ice formed is large and broad enough to reflect more sun, and if global temperatures have become cooler, 'the ice babies' can again be produced as permanent ice on the Arctic," Kotahatuhaha said.

The submarines could also serve as research centers, living spaces, and hubs of eco-tourism, the team said.

Lingering questions about an ice-making submarine

Some details about how an ice-making submarine could come to fruition are still unclear.

"Who's going to build them and how much energy does it take, and how are the submarines powered?" Serreze said.

Kotahatuhaha said his team still needs to conduct more research and get outside expertise to iron out those details, but he'd want the submarine to be a "zero-emission vehicle" that harnesses power from the sun or tides. If the vessel were powered by fossil fuels, it would contribute to sea-level rise by releasing greenhouse gases into the atmosphere. (The heat those gases trap leads ice to melt and ocean water to expand in volume.)

Right now, Kotahatuhaha said, he's hoping to build collaborations and study the project's feasibility. 

"The biggest challenge is not about the research itself but investment to support the research project," he said.

Geoengineering as a last resort

The ice-making submarine is far from the only proposed geoengineering solution to the climate crisis. Scientists and startups have also suggested cannons that would shoot fake snow across Antarctica and a balloon that could pump aerosols into the atmosphere to deflect sunlight.

The most common critique of all of these ideas, however, is that they don't address the root problem: greenhouse-gas emissions that cause climate change.

"There has been a lot of work on geoengineering, and it should continue," Serreze said. "We never want to go in that direction. But if it's a last gasp, then you try it."

SEE ALSO: Our food system accounts for a whopping 37% of greenhouse-gas emissions, a UN report found. But it could also offer a solution to the climate crisis.

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NOW WATCH: This startling animation shows how much Arctic sea ice has thinned in just 26 years

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12 AI startups that will boom in 2019, according to VCs

Businessinsider - Wed, 08/21/2019 - 14:01

Venture capitalists are the startup experts, the ones who have their finger on the pulse of which fledgling companies will boom and which will bust.

As part of Business Insider Prime's comprehensive coverage of the startups that will strike gold in 2019, we asked VCs to name the startups they think are going to be hot this year. They told us about companies they currently have in their portfolios, as well as ones they haven't put any money into yet but are at the center of positive news.

And from those discussions, one particular group of startups came up repeatedly: those that specialize in artificial intelligence tech.

From AI robots to software that uses machine learning to automate tasks, Silicon Valley is chock full of AI-focused startups.

Take, for example, Transfix, a freight marketplace that companies use to hire trucks from carriers. The startup is trying to transform the $800 billion trucking industry by using AI to match loads with carriers. It's raised $131 million so far.

There are hundreds of noteworthy startups focusing on AI today, so BI Prime has gone to the expert venture capitalists to select the cream of the crop and create a full list of 12 AI Startups to Watch that include:

  • A company that automatically audits expense reports
  • A startup that builds self-driving, robot tractors
  • A software bot that helps create other software bots
  • And other startups looking to transform industries through AI

BI Prime is publishing dozens of stories like this each and every day. Want to get started by reading the full list?

>> Download it here FREE

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Categories: English

Poop from pets and infants created flaws in key science at uBiome, and now the buzzy startup is conducting an internal review of its foundational research

Businessinsider - Wed, 08/21/2019 - 14:01

  • The science behind uBiome's products is flawed, according to insiders and outside experts. They say that raises new questions about the company's future.
  • Founded in 2012, buzzy startup uBiome raised $105 million from investors to explore the microbiome, a "forgotten organ."
  • The FBI raided uBiome's headquarters in April, reportedly related to the company's billing practices. Then, the company's top executives departed.
  • uBiome built a big set of data based on the human microbiome, but the data was flawed in ways that risk making uBiome's tests unreliable.
  • After Business Insider contacted uBiome with these concerns, uBiome confirmed problems with the data and said it's conducting an internal review.
  • The scientific journal that published the data is now investigating, too.
  • Click here for more BI Prime stories.

When Elisabeth Bik, then the science editor at microbiome startup uBiome, told the company's CEOs that its primary dataset — an analysis of poop samples — was soiled with data that didn't belong, she was waved away, she said.

The dismissal irked Bik.

Leaving in the irrelevant data could undermine work that was then underway to create uBiome's first clinical test, Bik said. That test, called SmartGut, would become uBiome's biggest money-maker, according to 11 former employees. It was designed to tell people about the health of their guts and their risk of diseases like irritable bowel syndrome.

The value of uBiome, a buzzy Silicon Valley startup that raised $105 million from high-profile investors including OS Fund and 8VC, lies in its accumulated knowledge of the microbiome, the trillions of bacteria living in and on our bodies and believed to powerfully influence our health.

If that knowledge is misinformed, as Bik and six others told Business Insider, it raises another question about the company's prospects, after an FBI raid and the departures of top executives.

After Business Insider contacted uBiome with these concerns, uBiome confirmed on Tuesday that the dataset Bik described included data from 45 minors and at least one non-human. The company said it's continuing to review the data.

"Our goal going forward is full disclosure and transparency," Karthik Bhavaraju, uBiome's acting chief operating officer and a senior director at consulting firm Goldin Associates, said.

Mapping the human microbiome

Scientists have yet to paint a definitive picture of a healthy human gut microbiome. Doing so would be lucrative: research suggests these vast stores of internal bacteria can influence everything from our weight to our mental health.

At the start, uBiome's goal was to create such a picture — to illustrate what a healthy or normal gut microbiome might look like. So to do it, the company started an online fundraiser that enabled it to collect poop samples from thousands of volunteers.

At one point, people were allowed to send in samples of poop that belonged to pets and children as well as adults, but three ex-employees said that uBiome decided ultimately against using that data. Then, uBiome analyzed the samples in a lab, and used the analysis to pinpoint which bugs (and how many of each) could be reliably found in the human gut.

Initially, uBiome used this analysis — which it published later in a prominent science journal — to sell a casual, $89 test called the Explorer, according to 21 former uBiome employees.

Someone who took uBiome's Explorer test sampled their poop at home, sent it to uBiome, and got back an online report comparing the bacteria in their guts to that of the other uBiome volunteers in the company's database.

Read more: I tried a test from troubled poop-testing startup uBiome that let me peek inside a 'forgotten organ.' Here's what I learned.

If a customer's levels were on par with the results in the database, the report told them so, and gave them a "wellness score" out of 100. If their levels diverged from the database, the report noted it, and suggested a possible link to illness.

In fine print at the bottom of each report, it read, "These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease."

Scientists and clinicians have questioned the utility of such a test.

Rusha Modi, a gastroenterologist at the University of Southern California, previously told Business Insider that uBiome's approach has some important limitations. For example, he said it simply compares one person's results against those of other uBiome volunteers, not against the wider population.

Also, the results only provide a one-time glimpse at the microbiome. The bacteria in our guts can change dramatically, sometimes in as few as 24 hours — meaning a problem that shows up in one test might disappear on another test taken days later.

"Given the rapid variability in the microbiome, single samples are simply not that informative," Kevin Honaker, the cofounder and CEO of a microbiome research startup called BiomeSense, told Business Insider.

'It's like going to a really expensive homeopathic doctor'

Around 2016, uBiome started making plans to sell a clinical test called SmartGut. The new test was designed for adults, according to uBiome's website, but relied on the same volunteer database that powered the Explorer test, according to 21 former employees.

Only now, if the data in the analysis was off, it could have clinical repercussions: healthy people might be told they were sick, while sick people might be told they were healthy. Adult patients who took the SmartGut test on a doctor's recommendation might now use it to make medical decisions.

"With SmartGut, you and your healthcare provider can gain valuable insights to better understand what's going on inside your gut, then take steps for you to feel better," uBiome's website read.

The site continued, "SmartGut is the world's first sequencing-based clinical microbiome screening test based on our patented technology and extensive peer-reviewed research."

"The test detects beneficial and pathogenic microorganisms associated with gut conditions like irritable bowel syndrome (IBS), and inflammatory bowel disease (IBD), including ulcerative colitis and Crohn's Disease," the website said.

Seven people involved in the research, including Bik, told Business Insider that there were several problems with the research uBiome used to build its microbiome database.

Consider one issue, they said: poop samples from infants and pets had likely been included in the data, which was then used to create the adults-only test. That likely occurred because people sent in specimens from their kids and their pets, rather than their own stool. uBiome could have removed the misfitting data, according to three ex-employees, but leadership at the company chose not to do so, they said.

Bik added that while the inclusion of babies and pets shouldn't have a huge impact on what the reports tell people about their disease risk, they would nonetheless skew someone's results. Three former employees said that in January 2018, the company made an attempt to clean up the data by removing the misfitting data.

The data was vulnerable to other human errors too, such as customers being sick or having taken drugs that would skew the makeup of their microbiome.

Two former uBiome employees who handled the data said that while removing the infant data would have been easy, they had a hard time filtering out data from people who'd taken antibiotics, for example. People who'd taken the drugs would often fail to disclose they'd done so, they said, because they believed enough time had passed for their effects to disappear. But antibiotics are thought to impact the microbiome for up to a year.

One ex-employee who worked on the science likened taking a uBiome test to pseudoscience.

"It's like going to a really expensive homeopathic doctor," the person said.

The questions that insiders are now raising about uBiome's scientific work add a new problem to the list of obstacles confronting the company as it works to rebound from a troubled stretch.

Read more: uBiome convinced Silicon Valley that testing poop was worth $600 million. Then the FBI came knocking. Here's the inside story.

An FBI raid, executive departures, and layoffs

In April 2019, the FBI raided uBiome's San Francisco headquarters as part of an investigation into its billing practices, according to the Wall Street Journal.

On the heels of the raid, uBiome stopped selling its two clinical products, leaving only one test — the Explorer — for sale. Then the company's cofounders and co-CEOs resigned, along with John Rakow, the company's chief legal counsel and interim leader.

In June, consulting firm Goldin Associates, brought on by uBiome's board to steer the ship in their stead, put three new leaders in charge. The following month, uBiome laid off half its staff.

"Though the developments of the past few months have been unexpected and disappointing, we continue to believe in the underlying value of uBiome's technology at a time of growing demand in the market," uBiome's board said in a statement when the Goldin executives took over.

But the new revelations raise questions about the value of uBiome's technology and the Explorer test.

Jack Gilbert, a professor of pediatrics at the University of California, San Diego and a group leader in microbiology at Argonne National Laboratory, told Business Insider that he believes uBiome's approach is fundamentally flawed.

The data uBiome compiled is highly subject to human error because it was gathered from people's homes, as opposed to as part of a clinical study, he said. Also, the test simply tells people their comparative bacteria levels, he added, and as such should not be used to influence medical decisions.

"It's complete crap," Gilbert said. "It's ridiculous."

Goldin's Karthik Bhavaraju and Eduardo Morales, uBiome's vice president of research and development, told Business Insider that they stand behind the Explorer product. They added that Explorer would be the company's focus going forward.

Business Insider provided a summary of the reporting in this article to a spokesman for uBiome cofounders Jessica Richman and Zachary Apte.

The spokesman said in part: "Business Insider's unsubstantiated allegations appear to come from disgruntled former employees."

The spokesman added: "Because Business Insider has not provided Dr. Apte or Dr. Richman with any data analysis, statements by other authors on the peer-reviewed scientific paper, or specific concerns from other experts in the field there is no way to know whether their assertions are based on real data or simply idle gossip and guesswork."

After Business Insider provided the statements from Bhavaraju and Morales, the company's head of research and development, the spokesman for Apte and Richman declined to comment further.

uBiome's 'gold standard' includes data that belongs to babies and pets

Bik's complaints came too late, she was told. By the time she was brought onto the company full-time in October of 2016 after freelancing for the company, uBiome had already submitted the paper to the science journal PLOS One.

In May 2017, the journal published the paper. It was authored by nine uBiome employees including Bik and co-CEOs Richman and Apte, and identified 28 common types of gut bacteria, along with their relative amounts. The analysis, based on samples from 897 people, supported a medical test that would help "assist in the clinical diagnosis of certain health conditions," the authors wrote in the paper.

The test was SmartGut. Shortly after the paper was published, Richman began talking about it at conferences and in interviews.

In a 2017 keynote at a Harvard conference, Richman said uBiome's scientific approach to creating SmartGut was ground-breaking and relied on top-notch research methods.

"There just aren't gold standards, so we had to set them," she said, adding, "we pulled out people that were healthy by a set of very rigorous criteria."

uBiome's data collection relied on the honor system, however:

"Fecal samples were self-collected by participants at home using commercially available uBiome microbiome sampling kits," the researchers wrote.

In other words, people sampled their poop at home, in private, and then answered a series of key questions that included asking whether they were healthy or sick.

If the answers were wrong or incomplete, it could provide a distorted sketch of the microbiome, insiders and outside experts have said. Volunteers could have been sick at the time they submitted their samples. They could also have taken antibiotics, which can distort the microbiome. And they could have sent in poop samples that didn't belong to them.

To be sure, plenty of research relies on self-reported data, and scientists acknowledge its potential limitations.

In this case, as many as 20 of the samples in the dataset likely belonged to infants, Bik and two other former employees who spoke to Business Insider anonymously out of fear of retribution said. The three ex-employees said the babies were easily identifiable based on the high presence in their samples of Bifidobacteria, a strain of microbe that's specially suited to breaking down the ingredients in breast milk.

Another handful of the samples likely belong to people's pets, said Bik and two of the other ex-employees, pointing to data in the paper which shows strains of bacteria at levels not found in humans.

The insiders were hesitant to speak publicly, they said, because of the ongoing investigation and out of fear that they might be reprimanded by uBiome and not receive their severance pay.

On Tuesday, Morales and Bhavaraju told Business Insider that they'd re-run the analysis and found data belonging to 45 minors and at least one non-human.

In an emailed response to Business Insider, a spokesperson for the journal PLOS One said that it was not aware of the concerns with the paper and would look into them.

"We are deeply committed to the integrity of the published record, and follow up on all concerns raised to us per the guidelines set forth by the Committee on Publication Ethics, of which PLOS One is a member," they said. The journal later said it couldn't comment further until its investigation is complete.

Efforts to clean up the data

Bik resigned from uBiome in December 2018 when she felt like its values no longer squared with hers. A molecular biologist and former Stanford researcher, Bik also grew tired of having her questions dismissed by uBiome's leadership, she said.

Two former uBiome employees told Business Insider that in January 2018, there were efforts to fix some of the problems in the data, including removing the babies and pets. Currently, uBiome's website says SmartGut is based on 865 samples, rather than the 897 described in the published paper. But the new data hasn't been published.

On Tuesday, Morales said that efforts to clean up the data did take place in January 2018, but he said the number of samples had been changed to 867, not 865. He declined to explain the discrepancy.

Despite the objections from Bik and at least two others, uBiome leadership held up the published 2017 paper to tout the company's SmartGut product. In talks, conference appearances, and on social media, Richman and Apte frequently referred to the science behind the kit.

"We now have this clinical test, which is truly a medical product," Richman added. "Without the data, this test just doesn't exist."

SEE ALSO: uBiome convinced Silicon Valley that testing poop was worth $600 million. Then the FBI came knocking. Here's the inside story.

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There's a new type of traveler dishing out thousands of dollars for high-end safaris. The business director of a Botswana-based company says it’s all because of the millennial tech boom.

Businessinsider - Wed, 08/21/2019 - 13:55

  • A managing director of a luxury safari company says he's seen their clientele become younger and more diverse in the past 14 years thanks to the "millennial tech boom."
  • It's no longer only 60-year-old CEOs who can afford to go on a luxury safari, says Chris Roche, the managing director for business development at Wilderness Holdings, which owns luxury safari company Wilderness Safaris.
  • "I think the millennial tech boom story has allowed younger people to make the required money faster or younger in their lives," Roche told Business Insider.
  • There's also been an increase in solo female travelers embarking on safaris, he said.
  • An average safari at Wilderness Safaris costs about $8,000 per person for five nights, but prices can vary by country and type of lodging.
  • Visit Business Insider's homepage for more stories.

High-end safaris can cost thousands of dollars per night. Now, the millennial tech boom is making this kind of travel accessible to a whole new type of traveler.

In the 14 years he's been at Wilderness Safaris, which operates in seven African countries including Botswana, Kenya, and Rwanda, business development managing director Chris Roche says he's seen an evolution in the company's clientele.

While access to money and time has always been essential for safaris that cost an average of $8,000 for five nights, luxury safari-goers are becoming younger and more diverse.

Millennial millionaires minted by the Silicon Valley tech boom can afford luxury travel

The trend of safari-goers skewing younger can be partially explained by the influx of Silicon Valley wealth in recent years, according to Roche, who said he's seeing more and more California tech workers coming to Africa.

"I think the millennial tech boom story has allowed younger people to make the required money faster or younger in their lives," Roche said. "So it's not the case now that you've got to be the CEO of General Motors, age 60, before you can [go on a luxury safari]."

Read more: San Francisco could be home to thousands of new millionaires by the end of 2019, and it's sparking a 'housing madness' in the already wildly expensive city

At Wilderness Safaris, a typical safari costs $8,000 per person for a five-night stay. But costs vary by country and type of lodging, Roche says. For example, the highest-priced lodge in Botswana costs about $3,500 per person per night, while in Namibia, prices are as low as $400 per person per night.

The travel industry is becoming 'less structured' and more diverse

Roche said the changing profile of the typical luxury safari traveler mirrors what's been happening in the travel industry in general.

"Everything's become less structured and more heterogeneous rather than homogeneous," he said. 

Roche says he's also seen an increase in solo female travelers coming on their safaris, which wasn't common 20 years ago.

"I think many more people are prepared to travel to Africa," he said. "Many more people have heard of safari and think of it as a viable option, whether it's honeymoon, anniversary, or whether it's, 'I've got to escape the developed world.'"

Wilderness Safaris, which was founded in 1983 and offers customizable safaris in addition to set itineraries, fulfills one of the major desires of affluent travelers in 2019: Wealthy travelers are increasingly interested unique, tailored experiences over material goods, as Business Insider's Lina Batarags previously reported.

As Roche put it, "You're not going for the caviar and Champagne, you're paying for the ability to have an exceptional, natural experience in a vast intact ecosystem that doesn't have anyone else in it. You're paying for the luxury of space ... [and] you're paying for the luxury of pristine nature."

SEE ALSO: I went on safari in the Serengeti and the most unforgettable sight of the whole trip had nothing to do with lions, cheetahs, or leopards

DON'T MISS: Airbnb's new luxury service lets you book private islands and villas with boxing rings and butlers. Here's a look inside 8 of the most over-the-top vacation properties.

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Walmart slams Tesla with a lawsuit claiming its solar panels caught fire at 7 stores (TSLA, WMT)

Businessinsider - Wed, 08/21/2019 - 13:47

Walmart on Tuesday filed a lawsuit against Tesla, accusing the company's solar-energy subsidiary of gross negligence after multiple stores experienced fires they say stemmed from solar panels on their roofs.

"As of November 2018, no fewer than seven Walmart stores had experienced fires due to Tesla's solar system," the company said in its lawsuit, filed in New York state court.

Walmart alleges the incidents were linked and that they were all a result of "widespread negligence" on behalf of Tesla and its employees, who installed the systems on more than 200 stories, which are now all laying idle. 

"Tesla has also demonstrated an inability or unwillingness to remediate the dangerous conditions documented in its inspection reports," the complaint says.

Tesla did not respond to a request for comment from Business Insider.

Shares of Tesla fell more than 2% overnight ahead of Wednesday's opening bell after the lawsuit was filed.

Walmart said in the complaint filing that it has leased or licensed roof space at more than 240 stores for Tesla-supplied solar-energy systems.

"Walmart's consultants accompanied Tesla personnel on inspections of various solar system sites, including both those that had experienced fires and those that had not," the complaint reads. "These visits revealed that Tesla had engaged in widespread, systemic negligence and had failed to abide by prudent industry practices in installing, operating, and maintaining its solar systems---conduct that greatly increased the risk of fire at Walmart sites."

Before it was acquired by Tesla in 2016, SolarCity inked deals with Walmart as early as 2010 for solar projects. According to company press releases, the company had already completed more than 200 solar projects at stores by 2014.

The lawsuit filed on Tuesday is far from the first that Tesla has faced regarding SolarCity since the acquisition. In 2018, three former employees alleged various types of misconduct at the company, including accusations that SolarCity employees falsified sales accounts in order to inflate their bonuses, along with the value of the company as a whole.

The suit also alleged discrimination, harassment, and inadequate pay. A Tesla representative told Business Insider when the suit was filed that Tesla had investigated the allegations and found them to be untrue. The suit has since moved to private arbitration.

In recent months, Tesla has begun to ramp up its solar-energy unit after reporting the lowest number of quarterly installations to date in the second quarter. The company said on Monday it would offer solar-panel rentals for as low as $50 per month in some US states, with plans to offer a similar product in Europe soon. 

Read more: Some Tesla customers who ordered the Solar Roof have no idea when they'll get it

Read the full complaint: 

654765 2019 Walmart Inc v Tesla Energy Operations Inc Summons Complaint 1 by Graham on Scribd

SEE ALSO: Some Tesla customers who ordered the Solar Roof have no idea when they'll get it

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The best pizzeria in NYC just got closed for not paying $167,506 in back taxes — here's what it's like to eat at Di Fara Pizza

Businessinsider - Wed, 08/21/2019 - 13:35

  • Di Fara Pizza in Brooklyn, New York, is considered by many to be the best pizza in New York City.
  • The famous pizzeria was seized this week by New York State tax collectors, which effectively closed the 54-year-old restaurant. A Department of Taxation and Finance rep said Di Fara's owes $167,506 in back taxes.
  • We visited Di Fara Pizza in 2017 to taste NYC's best pizza, to take lots of photos, and to offer a glimpse into the hallowed Midwood institution.
  • Visit Business Insider's homepage for more stories.

Over 50 years ago, in 1965, Italian immigrant Domenico DeMarco opened Di Fara Pizza in the Midwood section of Brooklyn.

There's a lot of pizza in New York City. It's a cliché maybe, but Di Fara Pizza is considered by many to be New York City's best pizza. It's considered by critics and locals alike to be "the best of the best," as the late, great Anthony Bourdain put it back in 2007.

Di Fara's is notoriously expensive ($30 for a regular cheese pizza), and has a notoriously long wait (over an hour, easy), but it's also notoriously delicious.

But there's bad news: Di Fara's was just seized by New York State, which claims the pizzeria owes over $167,506 in back taxes.

Di Fara, the iconic Midwood pizzeria that has been around for more than 50 years, has been seized by the state after not paying taxes. pic.twitter.com/AN2UtvL4rC

— Morena Basteiro (@morenabasteiro) August 20, 2019

For now, it's shuttered. But I ventured deep into Brooklyn to try Di Fara's legendary pizza for myself back in 2017. This is what it's like!

SEE ALSO: I ate a 17-course tasting menu at one of the world's best restaurants — here's what it was like

The first thing you need to do is get to a part of Brooklyn that isn't well-serviced by New York's world famous subway system. My wife and I took the B68 bus.

One of the best parts of going to the original Di Fara's is visiting the Midwood section of Brooklyn.

Midwood is a predominantly Orthodox Jewish neighborhood, Eastern European in origin, though plenty of other religious groups and ethnicities live in the area. Famous names, from Adam "MCA" Yauch (of the Beastie Boys) to Supreme Court Justice Ruth Bader Ginsburg hail from the Midwood section of Brooklyn. The neighborhood has largely resisted the forces of gentrification sweeping Brooklyn's western coast (the side facing Manhattan).

But you're here for the pizza. I get it. The original Di Fara Pizza is located at the corner of Avenue J and East 15th Street. I went at night, but this is what it looks like during the day from the outside:

Once you get inside, the first thing you'll want to do is to give the menu a look. Gird yourself for those prices — they're crazy high!

Maybe you don't see it, but yes, the price of a regular cheese pizza is a whopping $30:

Before you get too exasperated about that price, there's good reason for it: First and foremost, there's only one (elderly) gentleman, Domenico DeMarco, making the pizza.

Second, the ingredients used in Di Fara's pizzas are high quality, direct from Italy.

As DeMarco explained in a New York Times article from 2004:

"My pizza is good because I use fresh tomatoes. They come from Italy, from Salerno. Then I started to get mozzarella from Italy, from my hometown in the province of Caserta. It's $8 a pound, and this parmesan, it's $12. It comes twice a week. This might have been made two days ago, or three days ago.

I do this as an art. I don't look to make big money. If somebody comes over here and offers me a price for the store, there's no price. There's no money in the world they could pay me for it. I'm very proud of what I do. I don't have any employees; I use my kids."

But enough about money and ingredients — here's the pizza:

Wondering how the pizza was? It was really good.

I've lived in New York City for over six years, and eaten at some of New York's best (from well-known spots like John's of Bleecker Street to lesser known gems like Luigi's in Green-wood). Before that, I grew up with amazing pizza from first- and second-generation Italian families that moved to the suburbs in the 1960s and '70s to open restaurants. I lived in the Mediterranean region for a year in college. I really like pizza, y'all

All that said, Di Fara's was easily one of the best pizzas I've ever tasted. Every bite is a punch in the face of flavor, accented by sharp parmesan and herbaceous fresh basil. It easily stands among the titans of New York pizza.

I mean, come on — look at this delicious piece of art:

There's clearly a lot of thought put into even the simplest cheese pie. The sauce is tangy and sweet, contrasting beautifully with the sharp, salty parmesan and gooey, creamy mozzarella. The crust is, in many places, burned black and soaked with savory, pungent olive oil. At first it looks overdone, but it's another intentional move from DeMarco — the man does have over 50 years experience making pizza, so I'm gonna defer to his judgment.

Don't take my word for it — here's DeMarco himself explaining it:

"I come from Italy, and I go back there every once in a while to see how they do it [the dough] over there. They don't throw it in the icebox. It's not supposed to be cold dough. The fresh dough bubbles when you put it in the oven, and the bubbles get a little burnt. You see the pizza, and it's got a lot of black spots, it's Italian pizza. If you see pizza that's straight brown, it's not Italian pizza."

There are some downsides to eating at Di Fara's, built into the experience:

Di Fara Pizza has a legendarily long line. We arrived on a Sunday night at around 6:45 p.m. We got our pizza at around 8 p.m. Really.

 The crowd is a mix of locals who've been eating at Di Fara's for years, and tourists/people from other parts of NYC seeking out the legendary pizza. 

The eat-in options are sparse, but people aren't really hanging out after eating so the turnover is quick on getting a table.

Di Fara Pizza is cash only, and has limited seating. You'd better be ready for a long wait, likely on your feet, and you better have a good chunk of cash on you (remember: a single, standard eight-slice cheese pie costs thirty dollars). 

That said, it's a worthwhile trek for any pizza lover. It's also a great way for tourists to see a part of New York City that's actually lived in by New Yorkers.

And, clearly, we had no problem finishing the pizza — this slice didn't last long after the photo was taken.

Categories: English

Lime is the latest micromobility startup to be plagued by fires

Businessinsider - Wed, 08/21/2019 - 13:33

  • A Lime bike caught on fire in Seattle last week, as did the company's warehouse. 
  • Fires have plagued the quickly growing micromobility industry, which relies on small electric vehicles to power its fleets of bikes, scooters, and more. 
  • Lime did not respond to a request for comment from Business Insider. 
  • Visit Business Insider's homepage for more stories.

Micromobility startup Lime is the latest victim of bike and scooter fires that have plagued many startups in the quickly growing industry.

Two overnight fires broke out at the Uber-backed company's warehouse in the Ballard neighborhood of Seattle last week, the local news website MyBallard reports. The fire department responded twice in the same night after the fires reignited, a common pattern with fires involving lithium-ion batteries.

A video of a Lime bike on fire near the University of Washington campus also surfaced last week on Reddit. A fire department official told Crosscut that it's likely the first time a crew has responded to a bike fire.

Exploding Lime Bike battery on UW campus ... yikes! from r/Seattle

Lime did not respond to a request for comment from Business Insider, but told Crosscut that the situation appeared to be vandalism.

To be sure, three fires is a small number compared to the 287,000 trips taken in July 2019 throughout Seattle, according to the city's department of transportation. Uber's Jump bike service, which uses bikes very similar to those of Lime, also operates bike rentals in the city.

There have been no Jump fires to Business Insider's knowledge, but the company recently unveiled a new bike design which will utilize replaceable batteries very similar to those employed by Lime.

Lyft, which received a permit from Seattle for electric bikes in 2018 but has not launched them in the city, pulled its electric bike fleet from San Francisco in July, less than a month after launch, because of two mysterious fires.

"Out of an abundance of caution, we are temporarily making the ebike fleet unavailable to riders while we investigate and update our battery technology," a Lyft spokesperson told Business Insider at the time.

As electric vehicles — including bikes, scooters and cars — continue to grow in popularity, so too have fires. Fires involving Tesla vehicles, some of which have occurred seemingly spontaneously, can take hours and hundreds of gallons of water to extinguish.

"There are really only a few reasons why a lithium-ion battery catches on fire," Brock Archer, an auto-extrication and fire-rescue expert told Business Insider's Linette Lopez in March. "Liquid, dead short," or, for every one battery cell in a billion, "spontaneous combustion."

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The northernmost reaches of the Earth are on fire. Here's what this record-breaking hot summer looks like from space.

Businessinsider - Wed, 08/21/2019 - 13:24

The Arctic is known for its icy expanses, frozen tundra, and massive floating glaciers. Not blazing wildfires.

But in the midst of a record-breaking summer, the Arctic is burning.

Last month, megafires razed the northernmost parts of Russia and Greenland. 

In Alaska, meanwhile, 2.4 million acres of forest have burned this year. In June and July, plumes from the Swan Lake fire (seen in the satellite image below) engulfed Anchorage. Amid the smoke on July 4, the city experienced its hottest day in recorded history: 90 degrees Fahrenheit (32 degrees Celsius).

These blazes were big enough to be seen from space: On July 24, colossal pillars of smoke were visible above Russia, Alaska, and Greenland simultaneously.

As of today, parts of British Columbia, Canada and Alaska are still burning, while more than 13.5 million acres of Siberia are ablaze.

The link between fires and climate change

Individual wildfires and heat waves can't be directly linked to climate change, but accelerated warming increases their likelihood, size, and frequency.

July was the hottest month ever recorded, period. The month prior, meanwhile, was the hottest June ever in Earth's history, with temperatures nearly 20 degrees Fahrenheit above average. Two heat waves hit Europe, killing dozens.

Read More: At least 20 people have died from Europe's extreme heat. The Arctic caught on fire. This is what climate change looks like.

Overall, this year is on pace to be the third hottest on record globally, according to Climate Central. Last year was the fourth warmest, behind 2016 (the warmest), 2015, and 2017. Last year was also the hottest year on record for the world's oceans.

This warming can be linked to greenhouse-gas emissions. When heat-trapping gases like carbon and methane enter the atmosphere (they get emitted when we burn fossil fuels, among other human activities), they trap more of the sun's heat on the planet, causing Earth's overall surface temperatures to rise.

This graphic from NASA depicts the trend.

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Hot and dry conditions in the Northern Hemisphere are a consequence of this unprecedented warming. That's because warming leads winter snow cover to melt earlier, and hotter air sucks away the moisture from trees and soil, leading to dryer land. Decreased rainfall also makes for parched forests that are prone to burning.

Combined, that has created ideal conditions for wildfires in the Arctic. 

The European Union's Copernicus Atmosphere Monitoring Service said its team has observed more than 100 intense and long-lasting fires in the Arctic Circle since the start of June.

"Climate change, with rising temperatures and shifts in precipitation patterns, is amplifying the risk of wildfires and prolonging the season," the World Meteorological Organization wrote.

Wildfires are more likely now — and also bigger

In the western US, the average wildfire season is 78 days longer than it was 50 years ago, likely due to climate change, the Center for Climate and Energy Solutions reported.

Fires are getting bigger, too. A recent study found that the portion of California that burns from wildfires every year has increased more than five-fold since 1972.

Twelve of the 15 biggest fires in the state's history have occurred since the year 2000.

Nationwide, large wildfires in the US now burn more than twice the area they did in 1970.

"No matter how hard we try, the fires are going to keep getting bigger, and the reason is really clear," climatologist Park Williams told Columbia University's Center for Climate and Life. "Climate is really running the show in terms of what burns."

What happens in the Arctic doesn't stay in the Arctic

Arctic wildfires wreak less havoc on infrastructure and homes than, say, fires in California, but they release incredible amounts of carbon dioxide back into the atmosphere.

That's because fires in the forests and tundra of the Arctic are typically left to burn unless they threaten cities or settlements. So they can wind up consuming hundreds of thousands of acres of vegetation. When the ground burns, carbon dioxide that was previously trapped in the Earth gets released into the air.

Data collected by the Copernicus program shows that fires in the Arctic in June released as much carbon dioxide in one month as the entire country of Sweden does in a year.

That influx of carbon dioxide into the atmosphere leads the planet to warm even more, which in turn increases the likelihood of similar Arctic fires in the future.

It's a perilous feedback loop.

"I sometimes hear 'there aren't that many people up there in the Arctic, so why can't we just let it burn, why does it matter?'" NASA researcher Liz Hoy said in a report. "But what happens in the Arctic doesn't stay in the Arctic – there are global connections to the changes taking place there."

SEE ALSO: Satellite photos show massive swaths of the Arctic engulfed in flames by 'unprecedented' wildfires

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‘Unconscionable’: Why an online directory of rehab facilities doubled as a recipe book for drugs like GHB, crack, and meth

Businessinsider - Wed, 08/21/2019 - 13:02

    • Online rehab directory and information center Addiction Resource published several web pages containing step-by-step guides on how to make drugs, including GHB, crack, and meth.
    • Four experts in addiction treatment and digital marketing said these pages were likely created to increase traffic to the website, which prominently features the number of an addiction hotline.
    • The hotline routes callers to at least two rehab clinics in the US, which the experts said are likely paying Addiction Resource to generate leads.
    • After Business Insider reached out to Addiction Resource for comment, web pages containing information on how to make or buy drugs were taken down.
    • Visit Business Insider's homepage for more stories.

The first clue revealed itself in a cursory Google search. While poking around for another story, I typed in "How to make GHB." 

GHB, or Gamma Hydroxybutyrate, is a highly addictive substance and listed as a schedule one drug in the US. It's also a common date-rape drug

The first result was a page titled "How is GHB Made: Ingridients, Recipe for Production." That didn't surprise me. 

Then I clicked in. The link led me to a website called Addiction Resource that's targeted toward helping people seek treatment for substance addiction. It includes a directory of rehab facilities and the number for an addiction hotline is pasted prominently on every page, which routes calls to at least two rehab facilities in the US. 

That's why I was stunned to find, in front of me, a detailed ingredient list and step-by-step guide for how to make GHB. But it wasn't just GHB. With a few more Google searches, I discovered several other pages on Addiction Resource with instructions for how to make or acquire addictive and dangerous substances, including crack, meth, and heroin. 

"It's unconscionable to me," said Pat Aussem, director of clinical content and development at Center on Addiction, who visited the website before we spoke. "It's antithetical that an organization like Addiction Resources with a stated mission — which is right out of their website, of providing resources to help patients and their loved ones successfully overcome addiction — would publish recipes for making substances. It makes no sense to me." 

It didn't make sense to me either, until I showed the website to four industry experts, who said they have seen similar web behavior before. They helped me understand the extraordinary tactics that some rehab centers use to draw in people struggling with addiction — and the insurance dollars they bring with them.  

Some treatment clinics go to extreme lengths to compete for patients, who can bring in $40,000 or more in a matter of months

The US is in a drug overdose epidemic, making addiction recovery one of the most important health care industries in the country. It's also a highly profitable one. A single patient might bring in $40,000 or so for treatment at a residential clinic, contributing to annual rehab industry profits estimated at around $35 billion, according to the New York Times. 

Across the US, more than 13,000 treatment facilities are jockeying for a share of that sum — that is, they're competing for patients. 

Some rehab facility operators have been accused of an illegal activity called patient brokering — paying individuals or companies to refer patients with insurance. Others have constructed websites that appear as independent referral services, which then funnel patients to clinics they own. 

The competition for patients also plays out in internet searches, where 61% of them find treatment, according to a study cited by The Verge. Until recently, a common way for clinics to find patients online was through ads on Google. Any facility could bid on search terms like "rehab near me," regardless of the quality of treatment it provided to patients. If they won, their ads would appear on top.

For the most part, this problem began to fade in September 2017. Following in-depth reporting on how clinics were "gaming Google" by The Verge, Google began pulling ads with rehab-related search terms. In the following months, it partnered with a company called LegitScript to develop a third-party certification process for rehab clinics. If you search rehab-related terms today, only clinics with a LegitScript certification appear in ads. 

But while that helped curb one problem, it may have worsened another. With no way to pay to appear on top of Google search results, some rehab companies appear to have turned to other marketing methods. One tactic is to form a partnership with an online directory or information center — often called lead generators — that have high web traffic from people searching for information about drugs or rehab, according to David Curtis, an expert in addiction treatment marketing and founder of Blue Pig Media. 

For a price, those lead generators will advertise a telephone number connected to a rehab clinic and, in return, that clinic will get more patients. 

This is where publishing recipes for drugs likely comes in, said Curtis and Greg Williams, cofounder of Facing Addiction with NCADD and managing director of Third Horizon Strategies. 

Theoretically, the more web traffic lead generators get, the more money they stand to make through partnerships with clinics; more clicks means more calls which means more patients.

One way to get more traffic is to create a unique web page for every one of the most popular strings of search terms related to addiction — such as "where to find rehab," and "how to make GHB." If you then load those pages with relevant information and keywords it sends a signal to Google that your website is an authority on the topic. As a result, it will be more likely to appear on top of search when someone punches in related terms.

"Companies like this create very large, very sophisticated sites to index for search," Curtis said. "This is not done as an advocacy project by a parent who lost a child. This is a very sophisticated digital-marketing platform. Don't be mistaken about that."

Experts believe Addiction Resource is attracting potential patients with drug recipes and then hoping they or their loved ones eventually call the hotline

As I researched this story, Addiction Resource appeared as a top search result (using the incognito mode in Google Chrome) when I entered each of the following strings of search terms in Google: How to make GHB, How to make crack, How to make meth, How to make shake-and-bake meth, How to get ecstasy, How to make ecstasy, How to get heroin, Where to buy adderall, How to get valium prescription, and How to pass a drug test.

Some of the content on these web pages is startling. The GHB page, for example, had a bulleted ingredient list titled "What you need" with 12 items and a step-by-step guide, including instructions like "Slowly add water to it. Half a cup of warm distilled water is optimal." 

Other pages include:  "Shake And Bake Meth: Making One Pot Methamphetamine" and "How To Make Adderall at Home? Structures and Ingredients." 

After reaching out to Addiction Resource for comment, the website removed pages with recipes for making drugs. 

But the question remains: Why did these pages exist in the first place? 

According to a disclaimer that appeared on at least one of the recipe pages, the content was "not an invitation" to create the drug at home. Instead, it was to make friends or family members "fully aware how to recognize if someone produces it and notice potential warning signs."

But Aussem calls that idea "far-fetched." 

"Families don't typically do that," she said. "They're looking for treatment programs."

Another explanation is that people who are searching for drug recipes themselves will, in fact, become leads for treatment facilities, according to Jeffrey Lynne, a lawyer in Boca Raton, who advises rehab clinics.

Just below these recipes was a block of text that said "Hope without commitment" and "Find the best treatment options" next to the number of an addiction hotline. Lynne says it's possible that people who use drugs arrive on this page and then eventually end up calling the hotline, which is the moneymaker for a lead generator.

"I don't think they're trying to help people make drugs," Lynne said. (We spoke before the pages were removed). Whoever is behind the website is likely thinking "maybe we'll catch 1 in 1000 people," he said. "And what does it cost? It costs them nothing." 

But more likely, Curtis said, is that these pages were doorways that drove traffic to Addiction Resource — whether or not from people seeking treatment — and boosted the website's online visibility as a result. The more visible Addiction Resource is in search, the more likely people will be to find and call that addiction hotline. 

I called the hotline several times during the course of my reporting. 

Each time, the number routed me to the admission line for two different clinics that were listed on Addiction Resource as "treatment partners:" Legacy Healing Center and Delphi Behavioral Health Group. According to Lynne, Curtis, and others, these two clinics may be paying for placement on the Addiction Resource website. Neither company responded to a request for comment.

"It is my belief that this is a third-party marketer," Lynne said of Addiction Resource. "Marketing remains the Rubik's Cube of the industry. It's all about getting bodies that have insurance."

During my reporting, three other clinics were listed as "treatment partners" on the homepage of Addiction Resource — Maui Recovery, Shoreline Recovery Center, and Medical Concierge Recovery — but they disappeared from the site after I reached out to each of them and Addiction Resource for comment. 

Robert Wilson, the CEO of Shoreline Recovery Center, said that Shoreline does not have "any type of relationship with Addiction Resource." The co-CEO and chief clinical officer of Maui Recovery, Dr. Nicholas Kardaras, said he wasn't aware of Addiction Resource. 

"If this website that you mention is indeed providing information about how to make or purchase GHB, ecstasy, or meth, that's really disgusting and beyond the pale," Kardaras said. "I certainly would never want any program that I'm affiliated with to have anything to do with such a website."

I also tried to contact Medical Concierge for comment. The phone number listed on its website routed me to Invictus Health Group, which is the new name for the treatment provider Sovereign Health, according to The Orange County Register. The founder and CEO of Sovereign Health, Tonmoy Sharma, did not return my request for comment. 

Who is behind Addiction Resource? 

According to public records, the director of Addiction Resource, LLC is a 28-year-old man named Kentaro Roy. Roy isn't mentioned anywhere on the Addiction Resource website, but there are some clues suggesting that Addiction Resource, LLC operates addictionresource.com. 

According to the website's terms and conditions, for example, addictionresource.com is operated by "Addiction Resource LLC." I also came across an agenda on Facebook for a 2017 business club meeting in Krakow, which included someone named Kentaro Roy. According to the agenda, Roy founded Quit Media and Skyline Health Group, a marketing company that says it provides "high-quality digital content to inform, support, and encourage those affected by addiction." 

One of the mailing addresses listed on the website for Skyline Health Group matches another address associated with Roy through public records. The logo for Skyline Health Group also resembles that of Addiction Resource. (As far as I can tell, Skyline Health Group is not listed anywhere on Addiction Resource and vice versa.)

At the business club meeting, he was scheduled to give a presentation about "How To Steal The Marketing Equity From Your Competitors," according to the page. 

I tried contacting Roy using a handful of telephone numbers listed online. The first didn't connect. On the second, a female bot trying to sell medical devices to the elderly picked up. When I called the third number, a man who identified himself as Kentaro answered the phone. He said he couldn't talk because he was in Moscow and running into a meeting. Despite subsequent attempts to reach him, Roy never responded to a request for comment.

However, after reaching out, I noticed other changes on the website. The homepage was redesigned and a disclaimer appeared near the bottom, which says that Addiction Resource "may be paid a fee for marketing or advertising by organizations that can assist with treating addictions." 

"It appears to be just a very suspect marketing ploy," Aussem said.

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LIVE WEBINAR: Cy Scott, CEO of the buzzy cannabis tech company Headset, on his VC fundraising tips

Businessinsider - Wed, 08/21/2019 - 13:00

Headset, an analytics startup for the nascent marijuana industry, raised a $12 million Series A round backed by prominent investors earlier this year and has inked deals with market research firm Nielsen and accounting firm Deloitte.

On September 5th at 2 PM EST, Headset CEO Cy Scott will walk BI Prime readers through his pitch deck and share how he convinced VCs, including early Juul investor Poseidon Asset Management, to buy in.

Poseidon partner Emily Paxhia, who led the investment, will also explain how she picks winners in a crowded market, such as cannabis. Business Insider reporter Jeremy Berke will moderate the chat.

It'll be a must-see for new company founders and aspiring entrepreneurs.

You can sign up here.

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NOW WATCH: Nxivm leader Keith Raniere has been convicted. Here's what happened inside his sex-slave ring that recruited actresses and two billionaire heiresses.

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A 24-year-old student in London was left baffled after being caught up in Twitter's purge of Chinese propaganda accounts

Businessinsider - Wed, 08/21/2019 - 12:31

  • Twitter on Monday released a list of 936 accounts which it had identified as being part of a China-backed propaganda effort targeting protesters in Hong Kong.
  • An account belonging to Luka Ivezic, a 24-year-old student in London, was also on the list — much to his surprise.
  • After the BBC reported this, Twitter took his name off the list to protect his privacy, but maintained that the account had been "compromised" and connected to the propagandist disinformation network.
  • Visit Business Insider's homepage for more stories.

Luka Ivezic, a Croatia-born student studying misinformation at King's College London, was surprised to learn Twitter had designated his Twitter account as being part of a Chinese propaganda campaign.

Twitter and Facebook announced on Monday that they had detected a coordinated social media propaganda campaign from China targeting protesters in Hong Kong. Twitter said that the evidence pointed towards a "state-backed operation," consisting of 936 accounts, which it suspended.

One of the suspended accounts listed was 24-year-old Ivezic's, with the handle @TechPoliticist. "It is a bit ironic that something like this would happen to me," Ivezic told the BBC in a nod to his studies at King's College. Ivezic said he has never been to China.

Ivezic's father Marin, a cybersecurity consultant, expressed equal bafflement, telling the BBC that the account was suspended in May, before the protests kicked off in earnest.

Read more: Twitter ran paid ads from China's state news media criticizing the Hong Kong protests

Twitter told the BBC that it would remove Ivezic's account from its disclosure to protect his privacy, but affirmed that it had correctly identified his account as part of the propaganda push.

"After further investigation with our team, we've confirmed [the account was] compromised and tied to the disinformation network noted in yesterday's disclosure," said a spokesperson.

A possible explanation is that Marin Ivezic paid a "social media freelancer" to buy up followers for his and his son's Twitter accounts to boost their presence. Father and son run a blog together called the Future of Leadership, the Twitter account for which was also suspended — although not listed as part of the propaganda campaign.

Twitter bans users from buying up followers, not only because it artificially inflates their reach but also because the purchased accounts are often bots or spam accounts, which the platform actively tries to expunge.

Elise Thomas, an expert at Australia's International Cyber Policy Centre, told the BBC that Twitter may have been overzealous in reacting to the propaganda campaign.

Ivezic and Twitter did not immediately reply to Business Insider's request for comment. 

SEE ALSO: Alibaba reportedly postpones its rumored $20 billion listing amid Hong Kong unrest

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A startup called Mavely has raised $1 million to help DTC brands get new customers at half the price of Facebook and Instagram — and Allbirds, Brooklinen and M.Gemi are already on board

Businessinsider - Wed, 08/21/2019 - 12:00

  • A startup called Mavely thinks it can help DTC brands address rising customer acquisition costs (CAC) on channels like Facebook while helping them grow by word-of-mouth.
  • Mavely's pitch is that people can shop and earn commissions by sharing products with their communities on its app, while DTC brands can reach new customers.
  • Mavely also claims it's improving on the multilevel marketing company model, which has come under criticism.
  • But its community is tiny compared to Facebook, and has to compete for DTC brands' attention with established platforms like Snapchat, Pinterest, TV, and others like Wildlink and Verishop.
  • Click here for more BI Prime stories.

As the direct-to-consumer economy matures, the very social channels that DTC brands used to grow are getting saturated and expensive.

One startup thinks it can help DTC brands address rising customer acquisition costs (CAC) while helping them expand their communities through word-of-mouth. Mavely is a shopping app where DTC brands can sell their products and people can shop and earn commissions by sharing products they like with their friends and families.

"There's only a couple of channels to acquire customers right now, and the competition on those channels is accelerating, which is a big problem for DTC brands because the costs keep rising while the lifetime value of user stays the same," said Evan Wray, cofounder of Mavely.

Mavely says it helps DTC brands recruit new customers in a community-focused environment 

The startup, which launches today, has raised $1 million in funding from Tim Connors' VC firm PivotNorth Capital, and has more than 100 DTC brands including Allbirds, BarkBox, Brooklinen and M.Gemi on board. Wray and his cofounder Sean O'Brien previously built and sold emoji platform Swyft Media, and Wray is also a venture partner at VC firm Trail Mix Ventures.

The idea is to give DTC brands a way to target new audiences, specifically suburban women aged 35-50. Users earn 5% back when they shop for themselves and up to 10% on friends and families' purchases, Wray said. 

Mavely is trying to put a new spin on the multilevel marketing model, where companies recruit people to sell for them but which has gotten a bad rap for leading a lot of people to actually lose money. Wray said Mavely has no cost to join, no inventory requirements that consumers must maintain, and no minimum follower count that users need to recommend products.

The app is already profitable on a per-user basis, said Wray. He said Mavely gets an undisclosed commission through an affiliate fee from brands whenever a purchase is initiated on its platform, a portion of which goes to the users. In this way, the cost of getting customers is a fraction of what it costs through Instagram or Facebook, claimed Wray, and brands control the checkout experience.

"It costs about half or a third of the cost of a Facebook or Instagram ad," said Wray. "We are already seeing up to a 12% buy conversion rate on products, which obliterates the industry average. The mobile average is less than 2%."

DTC brands are seeking new channels — but Mavely has plenty of competition 

Ad prices on YouTube and Instagram have steadily increased, according to a recent UBS survey of 40 advertising executives who spend more than $90 billion on advertising. But as DTC brands look for alternatives, Mavely is hardly the only option available to them.

They are exploring everything from Snapchat, Pinterest, and TV to physical retail, hoping to get better bang for their buck. They also have platforms like Wildlink, a platform that rewards consumers for referrals across social and digital channels; and Verishop, a DTC shopping platform that's trying to take on Amazon.

Read More: Direct-to-consumer brands that built their businesses without traditional advertising are now embracing it in key ways to fuel growth

Still, Mavely is a draw for some DTC brands. Brooklinen began beta-testing the platform in March as Instagram and Facebook got more expensive, said Katherine O'Keefe, the brand's director of partnerships, PR and social. Its customer acquisition cost on Mavely has been less than half that of other channels, she said.

"Mavely isn't prone to the constant price fluctuations the way other digital marketing channels are, and also allows our consumers to connect more directly with each other," she said. "Having consumers who advocate for your brand is one of the most valuable things you can ask for as a marketer."

M.Gemi has been using the app to encourage users to expand its community by hosting in-person meet-ups. 

"It's the localization of social if you will," said Heather Kaminetsky, chief brand officer at M.Gemi. "It creates more of a flywheel effect. It's like social on steroids."

A question is how quickly Mavely will be able to scale, said Brooklinen's O'Keefe. The app counts about 10,000 users and aims to reach 30,000 by the end of the year, said Wray, but that's still a drop compared to Facebook and YouTube's billions of users each.

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This CEO didn't want to go with traditional venture capital, so he challenged his employees to use this pitch deck to find individual investors. They raised $13 million from 70 people.

Businessinsider - Wed, 08/21/2019 - 12:00

  • Capacity, a workplace automation tool formerly known as Jane.ai, announced it raised $13.2 million in Series B funding on Wednesday.
  • Instead of the traditional fundraising pitch, Capacity founder and CEO David Karandish encouraged his employees to compete to see who was able to bring in the most investors to the round.
  • Karandish sold Answers.com for more than $900 million before founding Capacity in January 2017. The company has raised $23.2 million to date, according to company documents.
  • He told Business Insider that venture capital wasn't the right fit for his business because of the pressure it puts on his time to generate returns, but he would consider going the traditional route in later funding rounds.
  • See the pitch deck that brought in 70 individual investors for Capacity's Series B.
  • Click here for more BI Prime stories.

A little competition goes a long way. At least, that was David Karandish's theory when he started to think about fundraising for his new company.

Karandish didn't feel venture capital was the right fit for his new business, a workplace automation tool called Capacity, formerly known as Jane.ai. So instead, he encouraged Capacity's employees to bring in anyone and everyone they thought might be interested in backing the company's Series B with a competition to see who could bring in the most.

It worked. On Wednesday, Capacity announced it raised $13.2 million in its Series B from a total of 70 individual investors. 

"We liked the idea of casting the net pretty wide," Karandish told Business Insider. "We wanted investors that would be with us in the long haul, but a lot of the early-stage investors want a quick flip. In the enterprise space it might take 10 plus years to build the business."

Read More: This 22-year-old dropped out of MIT to launch an AI startup that just got backed by the Twitch and Instagram founders, and Peter Thiel's VC firm

Karandish told Business Insider that his team had requests from almost 100 venture capital firms, but went with a broader range of angels, CEOs, and other individual investors for the round. The company, which uses artificial intelligence to share workplace knowledge across teams, has now raised a total of $23.2 million since Karandish founded the Missouri-based company in January 2017.

"We looked at what we are building and realized we aren't building something like accounting software. Not to hate on accounting software, but there just isn't a big market change happening there," Karandish said. "When the market is growing this quickly we want folks who are going to be in it for the long haul because of the outside value creation that ends up happening in the later years at scale."

According to Karandish, employees outside senior leadership brought in almost 40% of the round's total funding. Many had negative experience at previous startups when outside investors came into the company, so he said he was encouraged by the the interest around his unusual initiative.

"Fundraising was my top priority and same with my CFO," Karandish said. "That gave the team an opportunity to step up in new roles and responsibilities. I think of a startup as an idea trying to find a product market fit, and once you find that, you are trying to create the systems to replicate and scale along the way."

Karandish, who previously founded and sold Answers.com for more than $900 million, said he would consider traditional venture capital for later funding rounds, but would go through this process with a similar stage company "in a heartbeat."

Here's the pitch deck that employees used to pitch those individual investors.

SEE ALSO: Startup founders need to distance themselves from big tech, according to the CEO of famed startup accelerator Y Combinator

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US investors have plowed a record $5.3 billion into European startups this year, and it's a sign they're getting priced out of Silicon Valley

Businessinsider - Wed, 08/21/2019 - 11:57

  • US investors plowed $5.3 billion into European tech firms in the first seven months of 2019, according to TechNation research — up 40% on the same period last year.
  • Major deals have included Amazon's investment in the UK food-delivery service Deliveroo and Sequoia's investment in Europe's most valuable private fintech, Klarna.
  • Mark Tluszcz, the CEO and managing partner of Mangrove Capital Partners, said it could be a sign American investors were getting priced out of Silicon Valley.
  • "Valuations are lower in Europe because the market is not as mature as the US," Tluszcz told Business Insider.
  • Click here for more BI Prime stories.

US venture capitalists are on course to plow a record amount of funding into European tech startups this year.

American VCs have invested $5.3 billion in Europeans startups including Deliveroo, Checkout.com, and Klarna in 2019 through July, according to figures from Dealroom in conjunction with TechNation.

That was a 40% increase on the $3.8 billion invested over the same period last year. It means investments this year are likely to eclipse the $6.1 billion raised from US firms during the whole of 2018.

US investors are coming into later-stage funding rounds to help get a stake in some of Europe's most exciting tech companies, the research said, and it could also be a sign Silicon Valley is too expensive.

"Valuations are lower in Europe because the market is not as mature as the US," Mark Tluszcz, the CEO and managing partner of Mangrove Capital Partners, told Business Insider in an interview.

"Silicon Valley is expensive because you have massive levels of competition driving up the price with many funds involved, whereas in Europe you only have a few players on big deals."

Figures from GP Bullhound in 2016 indicated that companies valued at more than $1 billion, known as unicorns, were valued at a staggering 46 times their revenue in the US, whereas in Europe the figure was a more modest 18 times revenue.

"It's excellent news for European tech because now companies have significant access to capital," Tluszcz added. "On a global playing field capital is a key element for success, and in the past as good as companies might have been they were always underfunded — this is no longer the case."

One of the largest US-European deals this year has been Amazon's investment in the UK food-delivery service Deliveroo, as part of a $575 million raise. Other notable deals have included Sequoia's investments in Europe's most valuable private fintech, Klarna, and a deal with Tessian.

Read more: A venture capitalist who worked on Microsoft's $8.5 billion acquisition of Skype says it provided a valuable lesson about why the best startups are 'bought not sold'

Similarly, Insight Partners signed deals with the fintech N26 and the London startup Checkout.com, while Index Ventures took on major deals with the German deposit marketplace Raisin in a $26 million round and the British company WhiteHat in a $20 million deal.

The opportunity to enter buzzy European companies and develop their growth into the US market is a key factor in the recent spate of funding, according to investors.

The fact that US funds are increasingly taking part in later-stage rounds is testament to the growing size of the European market. Access to capital has been key in the growth of tech firms on the continent, but now "there is plenty of juice to extract," according to Eric Martineau-Fortin, a cofounder and managing partner at White Star Capital.

"The inflow of US funds into the European market is a function of the size of available funds in Europe, but this will change in time," he told Business Insider.

SEE ALSO: This VC says 'San Francisco is over.' Here's why she's tipping Europe for the next big hit.

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Typisk Jonatan Spang

Arrangementer på Vesterbro - Wed, 08/21/2019 - 11:33
Show/stand up d. 24/8 kl. 19 & 21.30:
Dørene åbner 1 time før showstart
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