free html hit counter April 2015 - John Battelle's Search Blog

Uber, The Rashomon.

By - April 26, 2015

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Our industry loves a rashomon, and in the past year or two, our collective subject of debate has been Uber. Perhaps the fastest growing company in history (its numbers aren’t public, but we’ll get to some estimates shortly), Uber has become a vector for some of the most wide-ranging arguments I’ve ever had regarding the tech industry’s impact on society at large.

It’s not that Google, Facebook, Apple, or Microsoft didn’t evoke great debate, but all those companies came of age in an era where tech was still relegated to a sideshow in the broader cultural conversation. Microsoft was taking over the computer industry in the 1990s, Google the Internet in the early 2000s, Facebook and Apple the mobile and social world in the late 2000s. But Uber? Uber is about a very real and entirely new approach to our economy, a stand in for the wealth divide festering in the US and beyond, an existential rorschach testing your values around the role of government, the social contract, and the kind of society we want to become.

When an Uber glides to its appointed pickup point, what do we see? Do we see an innovator hastening the inexorable shift to a new information-based economy? Or an arrogant bully using cheap capital, greed, and a dangerous, misogynist culture of convenience to consolidate a trillion dollar market?

Or do we see both?

Yes — that’s a cop out, but it’s also an honest answer. I know people who work at Uber, and I know some of Uber’s investors as well. They are in general a well intentioned group — and many of them have reservations about Uber’s unbridled success and its mixed reputation.

Uber’s success is breathtaking. Consider: Uber’s most recent round valued the company at over $41 billion — $15 billion more than Google’s initial public market cap of $26.4 billion. At a conference I attended last month, an Uber executive mentioned the company was clocking more than one million rides each and every day. If you (conservatively) estimate each ride at $10, that’d be gross revenue of $10mm a day, or $3.65 billion a year. Uber takes roughly a quarter of that revenue (20% is the widely reported number, but when I ask drivers, they tell me it’s 25–28%), or just under a billion dollars. And their costs are….well, assume about 2,000 employees (I’ve heard estimates of 1200 to 2500), for $250mm or so in labor costs. I’m pretty sure they’re not spending another $750mm on marketing and platform costs. So the company is most likely quite profitable already.

And my figures are conservative. Business Insider claims the company is on track to do $10 billion in gross revenue this year, and CEO Travis Kalanick last year claimed revenue is doubling every six months. In five years, Uber has expanded to 57 countries. So, yes, this company is astonishingly successful.

And yet…I’ve not met a single person in this industry who doesn’t express reservations about Uber. Certainly the company stepped in it terribly with the whole Lacy debacle, but the ambivalence goes deeper still. I’m sure pure Uber defenders exist, but the truth is, most of us are worried about the sheer expression of capitalistic force that the company represents. Privately, many are heartened by the regulatory counterforces that are stemming the company’s march through worldwide markets — Germany, Holland, India, Korea, Canada, Spain, France, New Zealand, and many other countries have banned Uber’s services either nationally, or through local city regulations.

Uber is the poster child for our global conversation about the role of work in our society, and about the kind of company we want to create, work at, and celebrate. And that conversation is deeply political and cultural in nature. On the one hand, the “1099 Economy” is providing hundreds of thousands of flexible, living wage jobs for those who might otherwise be marginalized or underpaid. On the other, it represents the systemic dismantling of our labor laws by rapacious, profit seeking monopolists.

If you want to hear an unalloyed economic takedown of Uber, head over to Robert Reich’s blog. And if you want to hear a reasoned defense of the company as an innovator, read what Suster has to say. But anyone who read Sarah Lacy’s passionate story has to wonder — if we didn’t have Uber now, wouldn’t the Valley just end up creating it? Certainly that’s Lacy’s conclusion — Uber is the collective creation of the Valley’s deep arrogance, its heartless celebration of high valuations and killer exits, and its male-dominated, aggressive philosophy of “breaking things fast” and “asking for forgiveness rather than permission.”

Put another way, Uber feels inevitable — a uniquely of-the-moment company, a mirror held up to the Valley’s aggregate psyche. And as we all look into that mirror, we are both fascinated and appalled.

All of this was at front of mind a month ago when an email from a site called FounderDating popped into my inbox. FounderDating is a LinkedIn-like service that connects entrepreneurs, and it sports a lively Quora-like Q&A forum. When interesting new threads emerge, the service notifies you. “Is Uber A Social Impact company?” was the question of the day, and it immediately sparked a strong debate, as you might expect. Lydia Eager, the thread’s originator, opened with this:

A lot of people love to hate uber because of their aggressive tactics, but the fact of the matter is that they are creating 20K new driver jobs/month and the median uberX driver income in NYC is $90K/year. Feels to me like they do way more good than harm and I’d consider them a social impact company. They are having a much bigger impact than say a non-profit trying to create jobs.

Do you have to have set out to have a major social mission to be considered a social impact company?

From there a diverse group of folks, myself included, chimed in with 50 or so thoughtful replies, touching on the importance of purpose- and mission-driven business, the role Uber plays in destroying living-wage jobs in the taxi and livery businesses, the actual economics of driving for Uber and similar businesses, the positive impact Uber has on carbon emissions, congestion, and drunk driving, the inevitable future where driverless cars and automation make workers irrelevant, the positive competitive response Uber has created in the taxi business (better customer service, competing apps, etc), stories of questionable competitive business practices, stories of rape and kidnapping (on both sides — taxies and Uber), debate over the meaning of “social impact” at its core, debate over the role of local and national regulation, debate over consolidation of power and money in markets and society, debate over libertarian political philosophy, and much, much more.

I hear these questions debated every time Uber comes up at a party, an industry event, or just between friends shooting the breeze. Back in 2013, when we were starting NewCo, we had the same debate when we were considering which companies to invite to our first full-fledged NewCo festival in San Francisco. We asked ourselves whether Uber was really a NewCo — an engine of positive change in our society. We couldn’t make up our mind and ended up kicking the can down the road. This year, we have to once again tackle the question. And I’m still not sure where we’ll land.

Like it or not, Uber is now our rashomon for understanding the impact technology is having on our culture. The company is showing signs of “growing up” — as all fast-growing tech companies do over time (you have to love Facebook shifting its motto from “Move fast and break things” to “Move fast …with stable infrastructure”). Uber’s stance to local regulators has shifted from a siege mentality to one of engagement (necessarily, I’m sure). Its CEO (and the offending exec) apologized, sort of, to Lacy, and has shifted its public voice to highlight its positive impact on the world — the first image on its site today is of a woman, with the headline “Her Turn to Earn — Creating 1,000,000 jobs for women by 2020.”

Is this all just calculated PR spin, or might it represent a real shift in the company’s culture? I think I know where Lacy stands on this one — she was personally targeted by a senior Uber executive, and she’s in no mood to give the company a second chance. But for most of the rest of us, the ambivalence — and the broader debate — continues. I personally believe that companies can change over time — Walmart, Unilever, and many others are now champions of sustainability — yet one could reasonably argue they played huge roles in creating the unsustainable world in which we currently live. But does that mean we shouldn’t celebrate and encourage their corporate change of heart?

If we dismiss these glimmerings of change as mere greenwashing, we are handing corporations an excuse to continue past practices. Instead, we should hold them accountable. For Uber — and all of us — that journey has just begun.

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My Schedule For NewCo New York 2015

By - April 09, 2015

NYCNewCoGrabHave you ever been to a music festival, and found yourself overwhelmed by too many great choices? Look at Coachella, for example. There are six stages to chose from. On Friday, how are you supposed to pick between Alabama Shakes and Lykke Li? I love ’em both. There’s Alt-J playing at the same time as Glass Animals, and Fitz & the Tantrums going up against Florence & The Machine.

Not fair.

That’s exactly how I feel about picking my schedule for next month’s NewCo New York. The lineup is 125 companies strong, and I can only see a total of ten (five each day). Yet picking your schedule is part of the magic of NewCo – it’s a supremely individual set of choices, but once you commit, you know you’re going to get to hang with hundreds of like-minded souls who made the same choices you did.

So here are my picks for NewCo NYC 2015:

Day 1: Tuesday, May 12, 2015

5:30 pm: VIP Kickoff

This is the official NewCo kickoff party, featuring founders and CEOs hand-picked to present their unique New York stories. The venue is The New School’s awesome new building in the Flatiron/Union Square district. Speakers include the Founders and/or CEOs of Betaworks, Mic, Roadify, BioLite, BarkBox and Gimlet. You need a Platinum Pass to get into the kickoff, but it’s a steal at $150 and includes unlimited access to all the other festival sessions, including the killer party at the end.

Day 2: Wednesday, May 13, 2015

10:00 am: CartoDB – CartoDB is an intriguing mapping company located in Brooklyn, where we’re focusing the first full morning of NewCo New York. Location is the king of signals in the mobile economy, and I’m looking forward to learning what makes CartoDB unique compared to Apple, Google, and others. I know one thing for sure: CartoDB’s crowd-driven approach to the world is inspiring and very NewCo. CEO and founder Javier de la Torre is presenting, and given the intimate nature of NewCo sessions, I know I’ll get a chance to say hello.

Wish I could go but ya gotta pick one: Atavist, Atlas Obscura (I’m an investor in both), and VaynerMedia (Gary is a NewCo advisor). 

11:30 am Bark & Co. I don’t have a dog, but I’ll be very disappointed if I don’t see a few at Bark’s HQ. Subscription commerce is hot, and these folks are leaders in the field. I’m psyched to meet co-founders Henrik Werdelin and Melanie Travis as well.

Wish I could go but ya gotta pick one: Bloomberg, BioLite, and Roadify. 

1:00 pm General Assembly General Assembly is redefining education, and with a full month to go till the event, the session is full. You can only get in if you buy a Diamond Pass, which lets you “jump the line” and get in despite the session’s sold out status. Co-founder Brad Hargreaves is leading the session, which will focus on the 21st century job market, something near and dear to the NewCo narrative.

Wish I could go but ya gotta pick one: The New School, Evol8tion, Percolate, Keep. 

2:30 pm Refinery 29 – Another session that’s already at Diamond status – which tells you that Refinery 29 is a hot company in a very hot market. Design Director Michael Ciancio is going to share his secrets of visual storytelling, which as a text dude I can’t wait to learn.

Wish I could go but ya gotta pick one: Luma (Terry’s an advisor), The New York Times, Dstillery. 

4:00 pm Hinge – Yikes, a third Diamond! I guess I chose some popular companies. Hinge is a dating service, and sure, there are plenty of those. But they seem to have a unique approach, and I chose this session because I’m super interested in how best to connect people using technology platforms (yes, it relates to NewCo!). Hinge’s VP of Product, Sam Levy, is set to present.

Wish I could go but ya gotta pick one: RebelMouse (investor), Mozilla, SeatGeek. 

5:30 pm Animoto – Co-Founder Tom Clifton will present on its breakout video platform. Video is a major initiative at NewCo going forward, and who better to help me understand the possibilities then the guy who built a platform used by 12 million folks and counting?

Wish I could go but ya gotta pick one: (RED), Kiip, StumbleUpon.

Day 2: Thursday, May 14th, 2015

10:00 am Mic – Mic has figured out how to gain and engage the finicky millennial market, which, it turns out, is the same group that makes up the bulk of NewCo’s attendees. The entire management team is presenting – the CEO and Co-Founder, VP Communications and Strategy, Chief of Staff and Dir Ops, and the VP Product. Where else can you meet all those folks in one room?!

Wish I could go but ya gotta pick one: Casper, MetaMarkets (investor), Mashable. 

11:30 am Salesforce – Michael Lazerow is presenting. That’s all I needed to know. Just one of the best dudes in the business, bar none. The title of his presentation: “Everything you ever wanted to know about a startup but were afraid to ask.” Michael sold his startup Buddy Media to Salesforce for $745 million. I’ll be taking notes.

Wish I could go but ya gotta pick one: Canary, BuzzFeed, The Verge. 

1:00 pm littleBits – What’s the deal with the Internet of Things, anyway? LittleBits is like Lego mashed up with the Mac – I want to understand this MIT-inspired startup, and get to know its people as well. I can’t wait to see the Chelsea-based offices, which I can only imagine boast a Wonka-like sense of wonder.

Wish I could go but ya gotta pick one: VinePair, Lerer Hippeau, TED. 

2:30 pm Tapad – Readers of this site know I’m deep into advertising technology, and Tapad promises to address one of the bugaboos of our industry: cross-device advertising. This session promises to go deep – and that’s why I love NewCo. I know the folks in the room will all bring their A-game questions and insights.

Wish I could go but ya gotta pick one: Superfly, Codeacademy, Handy. 

4:00 pm BetaWorks – Betaworks is the company behind success stories like bitly, chartbeat, and tweetdeck. I have never visited, even though founder John Borthwick is a NewCo advisor. I’m excited to learn about the BetaWorks’ approach to company formation and success. The speaker is Head of Creative James Cooper, who will delve into BetaWorks’ philosophy and ongoing practice.

Wish I could go but ya gotta pick one: Behance, Simulmedia, Grey. 

5:30 pm NewCo Meetup at relentless Generator A great way to end the festival is with an open bar, great tunes, and a massive meetup with attendees, host company leaders, and NewCo staff. Sure to be a killer party. We’ll be announcing a special musical act who will play as well, so stay tuned! You have to have a Gold Pass to get in, but it’s just $25, and includes free booze and tunes. What a deal!

If you’ve read this far, you must want to attend, no?! Yes! So sign up here, as sessions are filling up fast! See you there….

Integrations (and Metaservices) For The Win

By - April 04, 2015
GBoard

A GeckoBoard sample dashboard, integrating half a dozen separate data services.

What makes for a truly NewCo business? I’ve been giving this question a lot of thought the past six or so months, leading to posts like Maybe The Best Way To Change the World Is To Start a CompanyLiving Systems and The Information First Company, What Makes a NewCo, and posts on NewCos like MetroMile and Jack.

But lately I’ve noticed a strong theme running through a number of interesting and successful businesses: Integrations. From Acxiom and sovrn (where I am a board member) to Slack, Gecko and Zapier (where I am a happy customer), these companies are thriving because they have built a platform based on the integration of many different products and services. At NewCo, we call this “being platform’d” – an inelegant but apt descriptor.

Four years ago I wrote  File Under: Metaservices, The Rise Of, in which I posed a problem:

…heavy users of the web depend on scores – sometimes hundreds – of services, all of which work wonderfully for their particular purpose (eBay for auctions, Google for search, OpenTable for restaurant reservations, etc). But these services simply don’t communicate with each other, nor collaborate in a fashion that creates a robust or evolving ecosystem.

The rise of the app economy exacerbates the problem – most apps live in their own closed world, sharing data sparingly, if at all.

In 2015, the problem is coming to a head, and there are huge, proven opportunities for companies willing to do the hard work of managing complex data and services integrations. In fact, I’d go so far as to claim that in the NewCo economy, an unfair advantage will accrue to those businesses that excel at delivering seamless, effective integrations of complex services.

It’s already starting to happen. Why, for example, has Slack taken off so quickly, when there were already a raft of seemingly successful collaboration tools (Yammer, Basecamp, HipChat, etc)? As a user of Slack, my answer is simple: Slack has a super elegant approach to integrations. It “just works” with Google Docs, YouTube, Trello, MailChimp,  and about 100 other services. It creates an intelligent “metaservice” for effective group collaboration outside of its core use case. It’s not easy to make these integrations seem effortless to the consumer, but Slack got it right.

Another example can be found in what’s known as the programmatic or adtech industry. For the past four years I’ve been very close to this industry, steering FM into the purchase of an at scale programmatic advertising business (Lijit, now called sovrn), and serving on the board of Acxiom, a public data and marketing services company. With sovrn, we’ve noticed that the hardest, but most rewarding work comes in integrating new partners onto our platform. We’ve got nearly 100 integrations now, with several more coming online each quarter. These are not easy to pull off, each takes from three to six months to get done. It’s messy and hand-crafted, and it involves human to human negotiations all along the way. But once done, adtech integrations open a flood of data back and forth between partners, and when that happens, money gets made.

Adtech and data businesses that have acquired a lot of integrations, like Acxiom, AppNexus, OpenX, and sovrn, are valuable precisely because those integrations take a lot of time. If a large, well heeled tech business wanted to enter the adtech industry, they’d have to buy their way in. Doing 40-50 integrations from scratch would take years. It’s one of the reasons Facebook bought LiveRail, Twitter bought MoPub, and Apple bought Quattro.

Another class of integrators can be found in companies like Zapier, which is playing directly in the mobile app data market (and as such, is a direct response to the problem I posited back in 2011). Zapier gives developers the ability to tie together all their siloed apps, and to manipulate that data on one creative canvas. Another example is GeckoBoard, which at present is mainly a dashboard for disparate and discrete information sources, but even that limited functionality delivers a “holy shit!” set of insights.

Once I started noticing these integration-driven businesses, I saw them everywhere. Sure, Facebook and Google (and all the platforms) have been integrators forever, but they fail to solve more specific and/or bespoke problems inherent to individual use cases. Across online marketing, for example, tools like AppBoy, ZenDesk, and MailChimp lead with their metaservice-based integrative approach.  So do hundreds more, in dozens of categories, far too many to mention here.

But I’d like to call the ball right now: Metaservices is here to stay, and the best and fastest integrators will win.

If you want to get inside great companies around the globe, come to a NewCo festival. Next up is New York, then Austin and Silicon Valley.