Brexit one month on: currency lows and talent fear

Brexit one month on: currency lows and talent fear

In late June a referendum vote in the UK delivered the shock verdict that a small majority of the British public wanted the country to leave the European Union.

Next came the resignation of the Prime Minister and a precipitous drop in the value of the pound, which remains languishing far below its former heights. Various economic indicators now suggest the country is heading back towards recession.

So how are UK startups coping with the unraveling of the old world order? In the immediate aftermath of the Brexit vote, TechCrunch spoke to several founders who expressed shock, disappointment and concern for the future. A month on, what — if anything — has changed for them and their businesses?

Business as usual-ish

It’s clear that Brexit remains a massive question mark over the future direction of the UK and its digital economy, with no plan for leaving the European Union yet set out, nor firm timetable for the government to trigger Article 50 — which would start the up to two-year process of disentanglement from the European project. So the current ‘post-referendum, pre-actual-Brexit’ period might well turn out to be “the quiet before the storm”, as one founder puts it.

In the meantime, business in the UK isn’t grinding to a halt. And, generally speaking, things have returned to normal-ish for the startups we spoke to a month+ after the referendum vote — with some even reporting record summers. Although others have seen a small drop in demand. One, a currency exchange startup, attributed its dip to Brexit-based uncertainty, given the wild swings of pound sterling.

For others there are also some potentially more disquieting signs, with evidence of a slowdown in decision-making with overseas partners and investors, as entities outside the UK grapple with what Brexit means for them, and assess possible risks — figuring out whether they need to rethink their own UK-market strategy. The strength and depth of any impact there — if hesitation turns into out-and-out rejection — is clearly going to take more time to shake out.

Currency swings and roundabouts

The post-Brexit value of sterling has caused some of the most immediate knocks on the UK startups we spoke to, with founders generally having to be more “currency aware”, as one put it. Another founder notes having to absorb a rising salary bill on account of paying some of their staff in Euros. Another recounts having to help one of their suppliers, who they pay in GBP, by covering 75 per cent of sterling’s value drop after their supplier’s margin was all but wiped out overnight.

The same business also tells us it lost out on a potential hire, after being outbid by a starup in another European country — which was able to offer a higher salary level because of the pound being so low.

On the flip side of a fallen pound, UK startups are now cheaper to foreign investors, as we’ve seen with the Softbank ARM acquisition. And, if the UK economy heads for recession — with the accompanying knock-on effect on rents and house prices — the cost of living in London might become more affordable, in theory boosting its attractiveness to lower waged startup workers. But the same founder who suggested this went on to emphasize that the huge negatives of recession will obviously weigh very heavily in that scenario too.

Another longer term concern on the money and currency front is what will happen to early stage investment in the UK, given how large a chunk comes from European VC funds. While, in the short term, funds have closed and still have that money to invest, and investments have continued to be made in UK startups since the referendum result, the question is what will happen when the time comes to close the next fund? Where will that money be ending up? In the UK, or elsewhere in Europe?

The human cost

The biggest and most pressing concern for UK startups in the wake of the Brexit referendum result remains what will happen with free movement, with many worried about the impact on existing non-UK EU staff and whether they will have easy access to a Europe-wide talent pool in future or not.

There’s also anecdotal evidence from UK startups that some EU workers are questioning whether they should now accept a job in London or the UK, given the uncertainty over their future status in the country.

One founder also recounted several instances of non-British EU workers being made to feel unwelcome in the UK after the referendum vote, and expressed concern about the UK’s social cohesiveness and the future trajectory of ‘Britishness’ — suggesting the UK could see a brain-drain if entrepreneurs feel compelled to look elsewhere for a social structure that matches their expectations for tolerance and liberal values.

A swift political reboot

Perhaps the brightest point as UK startups perceive it in the gloomy summer after the Brexit vote, is that the country already has a new government in place, under Prime Minister Theresa May — who triumphed earlier than expected in the Tory leadership race after her last rival voluntarily stepped aside. One founder pointed out that if this coronation had not happened the government would still be leaderless even now — thankful of one small mercy in a time of vast uncertainty.

Another founder expressed awe at the speed with which the Tory factions had regrouped around a new leader. While, on the flip side, several bemoaned the lack of a unified official opposition at such a crucial juncture for UK Plc. The official opposition Labour party remains riven with splits and embroiled in a self-induced leadership contest.

Clearly not all the founders that TechCrunch spoke to are politically affiliated with the Conservative party but many expressed relief at a new Prime Minister who is perceived to be experienced and detail-oriented — a sense of partial relief doubtless encouraged by the fact she was a Remainer (if only a weak one).

Technocratic, stable political leadership might not be able to save the UK from the fast-accelerating economic ravages of Brexit but for UK entrepreneurs — who overwhelmingly voted to Remain — it beats the alternative: the party’s hardline Brexiteer wing. Aka the “headbangers” as one founder dubbed them — noting that his biggest fear at this point is that “the full, totally cut-the-cord, independent UK [politicians] start getting listened to”.

May’s reputation for political caution is therefore being (mostly) welcomed as a salve for self-inflicted Brexit harm at this early point on the post-referendum timeline. Not rushing blindly ahead is generally seen as prudent. Although some founders were eager for a little more business certainty, especially on key points like freedom of movement.

The (relative) blessing of an experience Remainer as the least worse Tory leader for horribly uncertain times definitely only goes so far — and may prove to be a short lived honeymoon for May in time, as Brexit’s complexities pile up.

Plentiful political concerns persist for startups about the sustained uncertainty of the UK’s future — from fears about looming recession, to the lack of a concrete Brexit plan, to worries about immigration and borders, and concerns about losing beneficial EU regulatory frameworks, like financial passporting. All topped off by founders’ underlying ideological objections to the UK divorcing itself from the EU.

Make more connections is the sentiment you’d expect from the startup scene. So for many UK entrepreneurs, the Brexit vote clearly feels very personal indeed.

NB: The below interviews have been lightly edited for clarity

Read the prior article in the sequence: What UK startups make of the shocking Brexit vote

Brexit — one month on…

Azimo
Michael Kent, founder and CEO

On a micro level my firm, I guess my sector, the immediate economic impact — I’m more bullish. Customers keep coming. We had our strongest ever month last month. But as we should do — we’re growing fast. But at a macro level if you look at a lot of the leading economic indicators I’m a little bit worried because I think it’s probably going to be slack growth next year. In the UK. That’s not great for anyone… Recessions suck.

We haven’t seen any fundamental weakness in customer demand. We’ve seen people continuing to transact, pretty much at normal rates. I think it’s more of a reflection of the kind of people that we serve — they tend to be people who are sending a good chunk of their monthly salary home and they’ve got to do that regardless of what the pound’s doing or whether Brexit’s happening or what the politicians are saying. So I’m not surprised. I think [business has] probably been a little bit weaker — we’ve seen a bit of a dip in large transactions. Because we handle anything from £10 to £1 million, in terms of the transaction size, so there is a big range. And I think we’ve seen less of the larger transactions, a little bit. But that’s kind of what you’d expect. The pound’s in the toilet, the Euro’s not doing much better…

Wait and see doesn’t really work for fast growing businesses. So we have to have a plan.

[On the political front] everything points to it being quite positive and having a pragmatic Prime Minister and Chancellor. And various hands in the government. But that could change…  I’ve been broadly pretty impressed by how fast the new government has pulled itself together and seemed to be getting on with stuff. I don’t comment on political affiliations but I think having a full strength government that’s in place and is getting on with stuff is a major thing that you want — it limits the uncertainty. I would like to see them come out in support of tech, and I think there’s a new industrial policy that looks like it’s being formulated at the moment, and I think it’s important that technology and early stage businesses in the tech sector are fully supported as part of that.

I haven’t changed my view. I think Brexit is a bad thing for the UK. And a bad thing for Europe. It’s fundamentally completely against the philosophy that underlies our business — which is bringing people together, and people moving around and sharing ideas is very powerful. And Brexit’s a reaction against that. So I think anything that says well actually we’re going to temper what we’re doing here and we’re going to take a conservative approach is great. I’d like to see the Prime Minister go farther and really consider whether it’s still the right thing to do for the country. I don’t think it is, and the closer we get to a ‘Brexit lite’ or no Brexit at all much better it will be for both the UK startup scene and our economic prospects in general.

Geographic expansion was always on our roadmap but I think there’s a renewed urgency to where we need to locate ourselves. Like most tech companies we’re not just in one place. We’re in a whole bunch of places to make sure that we’re fully protecting our customers’ interests in what might be a situation where [financial] passporting isn’t universally accepted by the EU. At its essence, if the UK’s part of the EU you can get a license in the UK and you can service the 500 million or 600 million consumers who are all over the EU with your particular financial service, that you’re regulated to offer. If the UK is not part of the EU and there’s nothing that’s been put in place to keep that passporting process in force whilst the UK is outside of the EU then you have get a license somewhere else in Europe in order to service all those customers. That’s just fact.

There’s not many facts in this debate but that’s one of them. Because we don’t know how that’s going to play out right now it would be remiss of us to just wait and see… Wait and see doesn’t really work for fast growing businesses. So we have to have a plan.


EatFirst
Rahul Parekh, CEO and founder

There’s still no clarity on [free movement] and it’s still my number one concern. There’s been plenty of headlines out about this kind of thing… but it still seems very much up in the air so it’s still our biggest concern.

Certainly from a business perspective we haven’t seen any impact — since the Brexit vote we’ve grown the most we’ve ever grown… and usually we see a bit of a drop off in summer, so we’re seeing the contrary to any drop off in impact… But as we’re growing and expanding we’re also hiring a lot and all across the board from developers to operations staff, which are engineering background to kitchen staff with the chefs, our entire team is full of European, non-British nationals, especially in the kitchen. Most of the top chefs in the UK come from Italian, French background. So this is definitely our biggest concern still and it’s a bit frustrating that there’s been no progress, or no information about how free movement would be affected even a month later.

I haven’t seen a drop off in applications [from EU job seekers] but I’ve definitely had, anecdotally, a lot of questions and concerns from Europeans about the future — Europeans that we’ve interviewed for positions obviously concerned about the future. If they move to London now are they going to be able to stay for many years to come? They don’t know. There seems to be no clear cut-off point, because there was definitely a call for a cut-off point, some sort of date beyond which [their leave to remain status] was not guaranteed. And that hasn’t been cleared up at all. We’ve not seen a drop off in applications but I think there is a lot of concern about it.

My main concern is staffing as we grow the business. Making sure we can still attract top talent.

We’re going through a lot of expansion as the business grows, and as a result of that — and the uncertainty about the future — it’s very difficult for us to plan entering new markets. Because we don’t know what the impact will be even about Brits being able to go and work abroad. So people from our team here being able to go and lead new businesses abroad… Free movement obviously works both ways and for us there’s a big benefit from being able to send our key business leaders from here over into new markets. And it’s hard for us to plan that before we know what’s going to happen. But we haven’t made any changes in business strategy [since the Brexit vote]. We’re still focused on growing the business in London and the UK. And so far the business has been growing really well. The main concern I have is from a hiring perspective as we grow.

We’ve not seen really any major new policies from the new Prime Minister or chancellor yet. Obviously we’ve had a lot of speeches about what’s potentially coming, and we’ve got a new cabinet, but we’ve not seen anything really in terms of concrete policies that affect our business so it’s not clear exactly yet. The only concern I have is that there’s been some talk about how the new Prime Minister sees corporate governance and wants to have much more influence on corporate governance.

In our market there has been a lot of positive impact from EU regulation in the food market so for example the EU legislation on allergen labeling was actually a very positive thing for the food business because it was much less clear for consumers before what allergens were going into their food. And I think that that directive, which came from Europe, was actually a very positive thing. So you potentially lose a lot of that — so the UK will have to do it on its own. But my main concern is staffing as we grow the business. Making sure we can still attract top talent into the roles that we have, especially the chef roles, engineering roles, development roles. Because traditionally, up until now, we’re hired actively — in the UK as well — but very actively in Europe.

I think the biggest impact will potentially be fintech. At this stage it’s far too early to tell — and no one has been specifically affected because there’s been no change… But there is some risk for fintech businesses depending on the rules around passporting of financial securities from the UK to Europe. The risk is much bigger for banks that are based here in the UK. That’s probably going to be the biggest impact but we’ll see. I’d hope that we’re able to negotiate keeping that.


GoCardless
Hiroki Takeuchi, CEO and founder

One thing that startups are pretty good at is dealing with uncertainty. We’re always operating in an environment of uncertainty by the very nature of what we’re doing — so increased uncertainty doesn’t phase us too much. I think where it is painful is where other businesses, potential customers, where it makes it harder for them to make decisions that makes it more challenging for us. But we haven’t seen too big an impact on that yet.

Not much has changed in many ways. In many ways business carries on as usual. The biggest thing I’m worried about is that whole issue of open access to employees across Europe. That’s the one area where we have seen people questioning whether they should move to London, seeing a drop in the kind of activity around applicants from other European countries. There’s definitely a bit more hesitancy and obviously from our perspective we’re saying please come and join us, we will support you no matter what happens, we really believe this will be okay. But that’s probably the biggest impact that we’re seeing. And the one I’m most worried about.

We have seen people questioning whether they should move to London.

[Brexit’s impact on the economy] doesn’t make me worry about the prospects for our business too much. Our business isn’t hugely tied to the economy in many ways anyway — it’s not like we’re really feeling the heat of that. We definitely have seen a bit of a slowdown in terms of people making decisions and there’s a lot more umming and ahhing but it’s not something I’m worried about the long term effects of.

For me, [Brexit] underlines the need for businesses like us even more. A lot of what we’re doing is building bridges between the different banking systems around the world. That’s the vision that we want to pursue and one of the ways I think about it is the more borders there are, the more bridges there are to build. And that’s a challenge but also an opportunity. And whilst on a personal level I feel the fewer borders the better, the reality is somewhat different and so we are trying to embrace that.

Given that we’ve committed as a country to going down this path I think definitely the right approach is to say let’s not rush it, let’s get it right. The big question for me in my mind goes back to the labour point… this question of open access to labour is hugely important. The bit I still feel a little unsure on is it’s unclear to me how wedded Theresa May and her party are to the idea of closing off our borders. If that happens then I worry a lot. That will have a huge, long term negative impact on our country. It’s also one of the most contentious issues of the whole vote — one of the biggest reasons why Brexit happened was precisely because of this issue. So obviously it’s a very, very complicated issues with a lot of arguments on both sides. So who knows what’s going to happen there.


Hubbub
Jonathan May, founder and CEO

We have been forced to be more currency movement aware. Almost our entire cost base is in GBP but increasingly our revenues are in USD or EUR, so we have needed to spend a bit more time making sure we’re not wasting money invoicing in the wrong currencies, and given the long sales cycles in our space, we’ve been careful to make sure quotes or price estimates are in the right currencies and have expiry dates on them.

That’s the kind of stuff larger companies worry about all the time; I just hadn’t expected it to demand so much attention for us yet.

I remain mostly concerned about the impact on growth and staffing — it’s the impact on people that is the hardest to do anything about. With the uncertainty around what will now happen and when — and the likelihood that this uncertainty isn’t going anyway any time soon — it’s really hard to assess the long term impact on the business.

[Brexit] has influenced our short term strategy and — if it goes ahead — it will likely impact whether we grow our London team or focus hiring overseas to match our new business focus.

Hard — and unpopular — decisions now need to be taken, in either direction, to resolve the uncertainty.

Until there’s more clarity on exactly what is going to happen when we won’t be moving, but we are currently looking at taking advantage of the Estonian e-residency programme to ensure we’ll have no problems subsequently incorporating within the EU if the UK does leave.

Until there is any degree of certainty on whether Brexit will definitely happen, and on what timescale, it’s not worth making other plans.

It has put a spanner in the works of several EU projects we were thinking of partnering on.

Our new business focus has shifted to the US… We think it was the right call. The market in the UK is a lot more uncertain and uncertainty leads to tightening budgets.

I’ll be honest — I have no idea what Theresa May’s policy on Brexit actually is. It seems that the political expediency of saying “Brexit means Brexit” so as not to alienate a voter pool is almost all we have been given so far. Hard — and unpopular — decisions now need to be taken, in either direction, to resolve the uncertainty. That is all that matters from a business point of view. From a personal point of view, I would like the UK to find a way to stay in the EU and stay together as a union.

I am concerned that stories travel faster than facts, and populism seems to be taking over as a result — whilst many of the socially liberal/left are interested only in facts. As Martin Luther King Jr said: “Those who love peace must learn to organize as effectively as those who love war” — and I think those words resonate really strongly with the Brexit vote, and the current political malestrom in the US surrounding Trump’s repeated and appalling soundbites.


Juro
Richard Mabey, founder and CEO

For us Brexit was particularly hard felt.  75 per cent of my team are from EU countries outside of the UK, we are backed by Seedcamp (whose biggest limited partner is the European Investment Fund) and 30 per cent of our customers are in continental Europe.

In the short term, we have seen a small impact.  Fortunately we drew down a large convertible note in Euros just before Brexit, but our salary bill has increased, as we pay some of our developer salaries in Euros.  We have also had to issue emergency guidance to our customers on how Brexit may impact their legal contracts (we are a contracts platform).

In terms of the future, we are feeling a bit more positive than we were.  Anecdotally, we have not seen our ability to hire impacted, nor have we seen lower investment appetite from funders or a decrease in our customer acquisition rate.

If we can’t hire who we want to, we head for Berlin.

We are broadly adherent to the Saul Klein philosophy of ‘when Brexit gives you lemons, it’s time to make lemonade’. The fundamentals in London are good and we are bullish on its potential in the future.   Where we still have concerns however is around certainty, and the government is not giving us the confidence we need to commit to stay in London.

We have two main concerns.

The first is that in the short term EU nationals currently residing in the UK may not be able to stay without applying for a visa. We are not so much bothered by the outcome of that decision – we can move very easily to Berlin if we have to — but it is the government’s sluggish decision-making that is most frustrating.  What the UK tech industry needs is certainty and we are not getting it quickly enough.

The second is that in the medium term there may not be sufficient appetite among the best developers, designers and marketers in the EU to come to live and work in London. London’s reputation as a leader in tech has to date been sufficient to draw talent to our business in spite of high rents and cost of living.  Without that reputation, we may see our ability to hire the best people impacted.  This is the line in the sand for us — if we can’t hire who we want to, we head for Berlin.


Kontainers
Graham Parker, founder and CEO

A month on the main thing is uncertainty.

You hear stories from people all the time because right now anything is possible post Brexit, e.g borders and free movement.

We sit at the intersection between tech and shipping, two areas that are seen as being potential big losers in Brexit.

They have put it on hold for six months in order to survey the fallout from Brexit.

We are very worried about the fallout and have already seen foreign companies ask us about duty rates for British goods post-Brexit to see if they will increase, meaning they could potentially source elsewhere and hurt exports.

Also speaking to US VC we can see a serious slowdown in the speed of talks with them, as well as a large global ecommerce group we were talking about a partnership. They have put it on hold for six months in order to survey the fallout from Brexit.

Finally as a company we are live in the US as well as UK and are considering putting greater resource into the US market at the expense of UK development.


Metail
Tom Adeyoola, founder and CEO

A month has gone by since Brexit but in just the two weeks that followed we saw more resignations and sackings than the history of the whole Upscale group put together and more political instability than a banana republic.

Startups are made to handle uncertainty and map a course through it, but I still feel intensely angry at having to deal with completely unnecessary obstacles: a nation knowingly inflicting self-harm.

After all the parlour game manoeuvrings we at least have a technocrat now in charge who will stay on top of the job in hand, regain stability and be sensible. In impact terms for us that means at least no formal Brexit for two years. No real actual change and recession won’t be felt for another quarter yet.

Government has a huge amount to do to rebuild and create a new tangible inclusive and attractive vision for this country.

However, the mindset is forever changed and businesses have already reacted to the expectations: e.g. our trademark lawyers have already opened and beefed up their offices abroad in Germany and France.

We ourselves have explicitly doubled down on international business development. We’ve also had to support one of our key suppliers who we pay in GBP by covering 75 per cent of the currency drop since Brexit which wiped out their margin overnight. The flip side of course is that we have become cheaper and more attractive to external investors. You’ve already seen a huge example of this impact with the two week deal by SoftBank to buy ARM post Brexit.

But the biggest impact so far has been felt by our staff and potential talent. Significant destabilisation for our international contingent who feel that this country no longer wants them here. One employee’s French wife was told to pack up and go home on the tube, another’s Spanish boyfriend was left in the office of his architecture firm with another international colleague as his firm went out to celebrate Brexit on the 24th, with his bosses later boasting about how he was good value for money and couldn’t possible ask for a pay rise now. Another was shouted at and abused as he cycled home in Cambridge. A potential hire has failed to commit, seeking more time to evaluate whether Berlin should now be her focus instead. And finally a non-EU but international colleague has felt destabilised enough to seek out a particular academic opportunity and leave now because they feel the door might be closing because of what is coming in terms of immigration policy and academic research funding.

For me and most of my friends be they Brits, EU or international citizens the vote on 23rd has had a fundamental impact on what we had taken for granted in British values meaning that we no longer see ourselves living here forever. That certain bond has been broken. Talent emigration is now more likely and more certain and government has a huge amount to do to rebuild and create a new tangible inclusive and attractive vision for this country.

My most immediate front and centre issues are talent, talent, talent. Stuff related to laws, tariffs, trade — will take much longer to come to life and are outside of my immediate time horizon. Because I am focusing outside of UK in the main for business and investment, despite me not liking it, all the negative domestic economy issues will probably be monetarily beneficial apart from rising prices, i.e. we become cheaper through GBP collapse abroad; economic recession will depress office rents, house price fall or stagnation will mean more of my staff will be able to get onto ladder. But don’t get me wrong recession is BAD, BAD, BAD, full stop.  I don’t want it.

On a different note — journalists might now actually care about businesses like mine growing outside the UK for a change!  We launched in Vietnam last week.

Featured Image: Stròlic Furlàn – Davide Gabino/Flickr UNDER A CC BY-ND 2.0 LICENSE

Are coding bootcamps only for the rich?

Are coding bootcamps only for the rich?

Paul Fain, in Inside Higher Ed, says one of the biggest criticisms levelled against bootcamps is they “don’t attract many low-income students.” The evidence certainly seems to support this.

According to bootcamp industry-watcher Course Report, 79 percent of bootcamp students have a Bachelor’s Degree or higher before enrolling. Additionally, Course Report found the average pre-bootcamp salary to be $46,600, putting bootcamp students squarely in the middle class.

Furthermore, the true cost of a coding bootcamp is actually much higher than the tuition itself if you factor in the months spent unemployed during and directly after the bootcamp. This bootcamp tuition calculator estimates someone making $46,000 annually would need nearly $34,000 in savings to attend the average coding bootcamp. Unfortunately, 62 percent of Americans have less than $1,000 in savings.

So instead of modern coding bootcamps, low-income students are far more likely to attend for-profit universities. The types of institutions known for predatory marketing tactics, alarming dropout rates (the University of Phoenix’s six-year completion rate is just 4 percent) and dubious outcomes.

President Obama has praised coding bootcamps as a “ticket into the middle class.” If we want to make coding bootcamps more accessible to the people who need them most, we need to make two big changes. First, we need to offer financial aid options that allow students to make ends meet. Second, we need to consider part-time programs that allow students to work simultaneously.

Expanding financial aid will help low-income students gain access

Many believe bootcamps aren’t able to help low-income students because the same type of federal financial aid isn’t available for coding bootcamps. To address this, last year the Department of Education launched the EQUIP initiative, a pilot to extend the federal student loan umbrella over a handful of coding bootcamps via partnerships with accredited institutions.

The true cost of a coding bootcamp is actually much higher than the tuition itself.

Ted Mitchell, Under Secretary of Education at the U.S. Department of Education, believes the EQUIP program “represents a critical first step in broadening access to high-quality programs.” Provided that credible oversight is present, financial aid for coding bootcamp students can avail students of any income level to the technical skills for which there is high demand in today’s economy.

Part-time is the new normal

Even with financial aid, low-income students are likely excluded from most coding bootcamps because they do not offer part-time options. We can see the importance that part-time options play in higher education by looking at the modern university student. Gone is the prototypical four-year, on-campus, full-time student experience.

Instead, as tuition costs have gone up, non-traditional college students who work full- or part-time have become the new normal. According to the nonprofit Complete College America, “75% of today’s students are juggling some combination of families, jobs, and school while commuting to class; according to the U.S. Department of Education, only 25% go full-time, attend residential colleges, and have most of their bills paid by their parents.”

Universities have adapted, and many community colleges and online universities offer part-time options today. The same cannot be said of coding bootcamps, where only a handful are offering the same types of career programs in an evening/weekend format. Unsurprisingly, this lack of part-time options disproportionately impacts low-income students and students from underrepresented groups. For example, data from the National Center for Education Statistics shows that African-American students are 10 percent more likely to attend part-time (see page 9).

If bootcamps really are going to be a path toward 21st-century jobs, as President Obama and the EQUIP initiative hope, we must expand financial aid and create schedule formats that enable lower-income individuals and adult learners with varied family and financial responsibilities to have the same path to modern technical skills.

Featured Image: Turnbull/Getty Images
Source: TechCrunch

Skully officially admits it’s over

Skully officially admits it’s over

It took more than a week for remaining Skully execs to admit to themselves it was time to shut down. But late last night the company finally sent customers an email, which was obtained by TechCrunch, telling them it has officially closed its doors.

The startup’s troubles have been brewing for several months but came to a head two weeks ago when Skully’s board forced founders Marcus and Mitch Weller out of their own company. Days later most of the employees, including the engineering team, were let go and websites sales for Skully’s much-anticipated augmented reality helmet were shut off.

The site is still up right now due to what we’ve been told is a website vendor payment dispute. But the company is no more.

Multiple sources inside Skully confirmed to TechCrunch the startup had run out of money and was trying to sell itself off to a subsidiary of Chinese conglomerate LeTV called LeSport. However, a number of disputes, including the possibility of an acquisition, how the founders were spending money and several manufacturing issues, caused a rift to form between the founders and investors.

What was left of the executive team were left scrambling to save the company, even telling TechCrunch it was close to raising $6 million in bridge funding to get it through this mess. But it seems it was too little, too late to salvage anything.

“Over the past several weeks our management team has worked feverishly to raise additional capital but unforeseen challenges and circumstances, beyond our control, made this effort impossible,” the letter to customers read.

Skully says it is now filing for Chapter 7 bankruptcy, which also means customers likely won’t be getting a refund on pre-orders for the $1500 AR helmet Skully was working on.

All of Skully’s assets are now subject to liens held by a secured creditor, according to the letter, which ends with an apology to those affected.

However, there is somewhat of a silver lining for Skully’s customers. Smart bike helmet maker Fusar has offered a credit equivalent for the whole amount any Skully customer paid for their AR-1 helmet under what it is calling the Skully Owners Stimulus (SOS) program.

Skully customers won’t be able to redeem the full amount at one time, but, says Fusar in an open letter on its website redeem the full cost at one time, but will have an opportunity to recoup the entire value of the original order” and the company will only charge customers when their order actually ships.

Featured Image: Skully UNDER A CC BY 2.0 LICENSE
Source: TechCrunch

Mindshow turns you into a VR actor in your own production

Mindshow turns you into a VR actor in your own production

For all of the talk there is about content being the one thing that’s really missing in VR, it’s pretty difficult for consumers to dive into VR and really make anything.

Visionary VR is aiming to change that with their new product called Mindshow, which gives run-of-the-mill VR users the ability to dive into the medium and create a narrative from the perspective of the characters themselves.

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Mindshow is an exercise in bringing content creation in VR to its most established extreme yet. Visionary VR has produced a tool that lets you define your environment, your interactive surroundings and the skin you inhabit. From there, it’s all about finding your childlike creativity and crafting something fun and memorable.

“It’s about getting the recognition of life in something inanimate—something you created—that’s the feeling we had when we were kids,” Visionary VR co-founder and CCO Jonnie Ross tells me.

I had the chance to get walked through a demo of Mindshow at VRLA by Visionary VR’s CEO Gil Baron. Of the dozens of demos I tried out at VRLA this weekend, Mindshow was the only one that left me both technically impressed and a little giddy.

There’s something inherently powerful about seeing a character with your voice and movements play out a scene in an environment that you can control. Add in the social element of being able to take scenes from your friends and alter them and your left with a goofy, light-hearted creative medium that’s a blast to play around with and only made possible by virtual reality tech.

In addition to the HTC Vive which I demoed it on, Ross and Baron tell me that Mindshow will be rolling out on the other major VR platforms later this year, including both the PSVR and Oculus Rift. Mindshow is still in its early stages of rollout and has just opened sign-ups for early access to the platform.

Source: TechCrunch

Demystifying the booming mobile advertising market

Demystifying the booming mobile advertising market

We’re on the verge of another digital revolution. I’ve seen it before, when I was at DoubleClick in 1997, and I’m seeing it now as mobile begins to take over the hearts and minds of marketers, advertisers and corporations.

At DoubleClick, I helped start our international operations and targeted large brands to convince them of the benefits of internet advertising — “the most targetable media ever.” It was a tough job: The idea was novel and a little ahead of the market at that time. (To put it into context, the first banner ad was only sold on October 27, 1994.) I still remember the CMO of a Fortune 500 tech company didn’t even have email on her desktop in 1998.

But the attention of consumers was quickly shifting to the internet, and the media spend had to follow. We used to tell ourselves that when the Top 10 online advertisers mirrored the list of the Top 10 advertisers in any given country, we would have arrived.

Enter the dot-com boom. Many of these new companies had huge budgets, asked very few questions and were just throwing marketing dollars at user acquisition in whichever channel they thought might make sense — with web ads being the most popular. Driven by the spending frenzy from those companies, revenues from internet advertising soared to an astounding $4.62 billion by the end of 1999.

However, the fundamentals underpinning the ROI of this spend were not really there (yet). The required level of customer acquisition was not attained; not enough customers were retained to sustain the level of expenditure. And the sole reliance on one single channel for user acquisition was never sustainable. Remember Kozmo.com? There were many more.

Screen Shot 2016-07-08 at 2.37.28 PM.png

*The first five years of internet advertising growth (1995-99) charted against broadcast (1949-53) and cable television (1980-84), presented in current dollars (adjusted for inflation). Source: IAB/PwC Revenue Report; McCann-Erickson

By the summer of 2001, the dot-com bubble had burst and DoubleClick was no longer in the media business (and a lot worse would happen in September). From its peak in 2000, online advertising would not recover until 2004.

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Of course, those who secretly desired for this new media to disappear would be sorely disappointed. The internet “scaled,” penetration and bandwidth increased, download speeds and the cost of technology plummeted and the internet morphed into what we have today. Consumer attention continued to shift to digital formats and the internet media in its entirety has taken the largest market share (33 percent) in advertising.

Screen Shot 2016-07-08 at 3.02.41 PM.png

The second wave of ads market growth — mobile

Advertising market growth picked up again in 2009, and this time mobile is fueling the new wave of ad-dollar spend. Apple launched the App Store in June 2008, and mobile as we know it today started to take off. Consumers spend an increasing percentage of their time on mobile devices, and mobile device users have surpassed desktop users for media and website consumption.

Mobile-stats-vs-desktop-users-global.png

Similarly, mobile advertising spending now represents the largest share of total ad revenues.Ad Formats 2015.pngScreen Shot 2016-07-08 at 3.52.44 PM.png

Furthermore, the discrepancy between mobile consumption and mobile ad dollars, a metric Mary Meeker has tracked since the early days of internet advertising, has positioned the market for further and faster growth in the coming years.

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To paraphrase Mark Twain, could the history of early internet advertising be rhyming in 2016?

Companies that focused on mobile early have built huge businesses serving these advertisers. Take Facebook for example. Mobile ad revenues represented approximately 82 percent of all advertising revenue for Facebook in Q1 2016, up 73 percent YoY. And app install ads already were accounting for more than half of its mobile revenue in 2015 — and the percentage can only go up.

That number, as you can tell, represents a much higher proportion than the overall industry. Google claims that its app install ads product, Universal App Campaigns, has driven 2 billion app installs. With an estimated $1.5 per install, that’s about $3 billion in total revenue. Both companies have very good reasons to stay quiet about just who makes up that spend. Even a passing guess would not lead you to any of the Top 10 overall advertisers in the country. (This idea was recently echoed by Snapchat founder Evan Spiegel, who stated that VC money was driving up the app install market.)

And again, the business fundamentals for traditional marketing are not there. What do I mean by fundamentals? It’s a mix of customer acquisition, retention and engagement. Marketers are paying anywhere from $2-$4 for every app install and, yet, only 10 percent of those new users are using the app a week after downloading it. That means brands will need to make $30 per acquired user in 7 days. There are not many businesses that can sustain customer acquisition costs of that nature.

Fundamentals of mobile advertising

At the same time, the growth of mobile and evidence that the app is a much preferred user experience is leading to increased focus on the part of traditional marketers who realize that they need to use this channel to fully engage today’s consumer.

Consumers engage at higher rates — at every step of the funnel — in a mobile app than they do on the mobile web (and even better than desktop), and convert at anywhere from 100 percent to 300 percent better than mobile web. Furthermore, according to a comScore study, app users spend more than three hours per month on the top 1,000 apps, which is 18x greater than what mobile web visitors spend on the top 1,000 web properties.

The early money in mobile app advertising was spent by companies that had few other options when it comes to app marketing. When you are an app-only or app-heavy company, app install ads are the only quick and easy way to acquire new users. In fact, those are the types of companies that make up most of the highest spenders on these types of ads.

Here are the Top 10 fastest growing apps within the 50-100 million range (as a proxy for mobile app ads spend):

  1. Opera Mini web browser

  2. Uber

  3. File Commander – File Manager

  4. Sing! Karaoke by Smule

  5. SimSimi by simsimi inc.

  6. Kika Keyboard – Emoji, GIFs

  7. Slither.io

  8. Clash Royale

  9. SuperB Cleaner (Boost & Clean)

  10. Microsoft Word

Source: IronSource, which specializes in mobile app advertising and analytics

In fact, Chris Cunningham, global head of mobile and brand partnerships at IronSource, said that “what’s driving mobile budgets is not brands like Coca-Cola but gaming companies and lifestyle apps.”

As more traditional marketers recognize the opportunity in engaging their consumers through apps, they won’t be as single-channel dependent. They will start to diversify their strategy and continue to acquire new customers in various channels and focus on converting their existing customers into new app users (and more engaged customers) through those traditional channels. Looking for ways to seamlessly integrate their apps into their other marketing channels will be increasingly important, and they’ll be able to grow their mobile business without spending the exorbitant prices that many of the early adopters have needed to.

Don’t look for me to be shorting Facebook or Google (I own both); they have too strong a business and amazing growth opportunities in new initiatives. But I do think their reliance on app install ads is disproportionate, and it will recalibrate as the market moves toward the Top 10 mobile advertisers matching the Top 10 advertisers overall. Just like what happened with internet advertising in the early aughts.

Featured Image: Lee Woodgate/Getty Images
Source: TechCrunch

Neon Fever Dream is a gripping thriller set at Burning Man

Neon Fever Dream is a gripping thriller set at Burning Man

Below is an excerpt from
Neon Fever Dream by Eliot Peper. Neon Fever Dream is about a dark secret hidden in the swirling dust and exultant revelry of Burning Man. It’s a fast-paced thriller with a diverse cast that weaves together everything from the ripple effects of the Sri Lankan civil war to the impacts of new technology on international organized crime.

I chose this excerpt because it weaves together the most important elements of the story: international intrigue based on real-world issues, psychological thrills with lots of personal twists/turns/lessons-learned, and unique Burning Man setting.


Bass reverberated through Asha’s body, and she let the rhythm guide her movements. DJ Xenn stood on a three-story platform, head tilted to press the headphone against his shoulder as he nodded ever so slightly along with the beat. Smaller stages stood to either side, the backlit shadows of naked dancers spinning and entwining on massive canvas screens. The crowd surged with the electronic crescendo, hundreds of wildly costumed people moving as one.

Lynn grabbed Asha’s hand and spun her. Asha leaned backward as she came around and slid an arm behind Lynn’s back. Derek, Marlon, and the Vikings cheered the move, and one passed a plastic bottle filled with more champagne. Asha took a swig—the dust had parched her throat, and she welcomed the sparkling relief. Handing the bottle off to Lynn, she let the trumpets carry her into a series of whirling dance moves.

Grids of multicolored lasers skewered the floating particles of dust and blasted into the night sky, perfectly synchronized with the music. A Mayan warrior emerged from the throng in front of her, gold and copper bangles scattering light in all directions. His movements were as graceful as a professional dancer and oversize pink sunglasses softened his angular face. Melodic undertones began to build on top of the synth beat. A beautiful girl with a short Afro in an olive jumpsuit unzipped to the navel swung a combat-booted leg over his thigh, and their movements became one with each other and the music. The crowd parted, and the couple’s movements mesmerized and inflamed Asha.

DJ Xenn held a hand in the air, and the song reached for a climax along with him. The track crested like a tsunami, and the massive flamethrowers surrounding the circular dance floor belched seven-meter pillars of fire straight up at the stars. Heat rippled out over the dancers, and the couple’s lips met in a long, extended kiss that broke only when the girl pushed off the Mayan’s chest and spun away to disappear into the crowd.

Asha turned to find Lynn biting her lip and staring back. Those gold and emerald eyes were hypnotizing. Supreme confidence and desperate loneliness wrestled in their depths. Cinnamon and smoke.

“Come on,” said Asha. “Let’s get out of here.”

The set was over. DJ Xenn spun a chill-out track and descended from the throne. The crowd milled and migrated toward the exit. They lost Marlon and the Vikings in the hubbub but didn’t bother finding them. Once Lynn and Asha had made their way out of Green Ocean and located their bikes, they started pedaling back to Camp Wino.

The chilly night air whisked away Asha’s sweat and raised goose bumps on her arms. The glittering intoxication of the champagne waxed philosophical. Asha remembered cool evenings on the plantation, crickets chirping, tea leaves rustling, secrets exchanged. This was the thrill. This was the adventure she had been aching for. This was the pearl hidden in the oyster of life that her parents had never found.

“On the drive in,” said Asha as they rode side by side across the dark desert, “you mentioned that you did some reporting on the Tamil Tigers.”

“Yes,” said Lynn. The wind and dust had subsided, and they were able to ride barefaced. “Beijing was quietly sending financial and military aid to the government as they prepared for the final offensive campaign.”

“Have you heard of the Karuna Faction?” Something cracked in Asha’s tone, like the first fault line to give way in an impending earthquake.

Lynn shook her head.

The leader of the Tigers had a falling out with his top commander and bodyguard, Colonel Karuna,” said Asha. “Karuna split off and formed an independent militia and then allied himself with the government. The government used them as a black ops unit, giving politicians deniability for messy wetwork. They disappeared political opponents and Tamils from all over the country, often demanding ransoms from expatriate family members as a fundraising mechanism. But I didn’t find out any of this stuff until after.”

“After what?”

Asha sucked in a breath. Her pulse was racing. She hadn’t ever told anyone about this besides Dov. She kept it locked away deep inside, but for some strange reason, she wanted to tell Lynn. It felt right to have it come out under a dome of brilliant stars in a place that felt apart from the world.

“My parents are Sinhalese, not Tamil,” said Asha. “And despite the fact that their tea plantation makes them leaders in the local community, they’ve always avoided politics. They focus on the people they can talk to, see, and touch, not on ideological abstraction. So when the government started disappearing people in Colombo and Tamils started fleeing for the countryside, my parents quietly offered food, water, and sanctuary to the most desperate.”

The night took on a silvery sheen, and Asha felt light as a feather. “Once, they even fostered a young boy, Rakash, whose parents had been killed. I was five years old, and he lived with us for about a year. I was delighted to have someone my own age to play with on the estate. He was like a brother to me, and we were masters of hide-and-go-seek. But my parents didn’t go to great lengths to hide their charity, and eventually word got out. Some elements in the Colombo power structure felt they were sympathizing with the enemy and undermining the government’s terror campaign against the Tigers, who were, if anything, even worse.”

“The memories were buttoned up so tight that releasing them felt at once sacrosanct and sacrilegious. Asha glanced over and saw that Lynn’s face was tight, tiny lines forming at the corners of her eyes. “One night, after I had just turned six, five Karuna men showed up at the house. My dad hid me when he saw their truck coming up the drive. They beat him and my mom.” Dizziness rendered Burning Man’s neon midnight horizon dazzling. “Then they executed Rakash.” Something halfway between a gasp and a sigh escaped from Asha. “They were laughing as they drove away. It was all a big joke to them. Just another day’s work.”

The words hung in the air between them as if branded in fiery script. They smoldered and morphed in the ensuing silence, taking on texture and weight. Asha was surprised to find that the admission made her feel more free than vulnerable. Secrets lost their power when shared.

“Asha, I’m sorry,” said Lynn. “I’m so sorry.” There was a foundation of gravitas under the words that made their stark simplicity more impactful. They came from the heart, a heart that knew pain.

“I’ll meet you back at camp,” said Asha. “I need a bathroom break.”

“I’ll go with you,” said Lynn, concern written all over her face.

“No really, I’ll be okay.” She wanted a moment alone to pull herself together.

Asha parked her bike and found a vacant unit in the long line of porta-potties abutting the street. She had expected them to be disgusting, but they were serviced multiple times per day and by porta-potty standards, things could be a lot worse. Regardless, she was glad she had a respirator.

She closed the latch and peed. The EL wire stitched into her jumpsuit emitted psychedelic patterns of light that made the graffiti inscribed on every available surface roil and swirl. The hard walls of reality softened, revealing themselves to be nothing but permeable membranes. Her jaw opened and closed reflexively, and her tongue explored every corner of her mouth. Her heart rate accelerated, and her breath was hot, wet, and stale inside the respirator.

It wasn’t a porta-potty. It was a closet. Light bled through the keyhole. Asha knew she shouldn’t look. No good could come from it. But dark curiosity metastasized into inexorable compulsion. It would not be denied. She didn’t stand much higher than the doorknob, so she barely had to bend over to glue her eye to the keyhole, vipers tangling in her gut.

Her mother screamed before one of the men backhanded her across the face, knocking her unconscious when she hit the floor. Her father argued, then begged, then pleaded. But the men hadn’t come for words. They were not the kind of people who afforded words much weight. They tore off his shirt and beat him to within an inch of his life.

Once they were finished with him, they abandoned him on the floor and hustled out through the back door, smashing things as they went. She heard them on the veranda. Laughing. Talking. Taunting. The gunshot snapped her body to attention. She bit her tongue and tasted blood as it echoed out over the tea fields. More laughing. Then an engine rumbling off into the night.

She didn’t know how long she stayed in that closet. Finally, her father managed to pull himself over to her mother, checking her heartbeat and breathing with his broken hands. Ever so gently, he lifted her to the couch and then stumbled over to the closet, blood and mucus turning his face into a nightmare mask. Fear and confusion hummed at a high voltage inside Asha. This wasn’t how the world worked. Her father ran the estate. He was a gentle and well-liked leader within Haputale. People looked up to him. People respected him. The closet door opened, and he hugged her close, sobs wracking his body. His pants were warm and damp against her cheek. Eww. He had peed himself. Adults weren’t supposed to wet their pants. She pulled away, trying to escape. Gross, Thaaththi, you peed your pants. Although he reacted with a sad smile, she would never forgive herself for uttering those words.”

You cannot control the world, but only you control how you react to it. Asha squeezed her eyes shut and shot out a hand. The plastic was smooth and cool beneath her palm. The reek of urine was coming from the porta-potty, not childhood ghosts. She was at Burning Man, taking a pit stop on the way home from a dance party. Haputale was a world away. Pushing her goggles up on her forehead, she swiped away the tears and stood.

She walked her bike the rest of the way back to Camp Wino, letting her breathing and thoughts settle back into some semblance of normal. Locking it on the rack, she ducked under the canvas sheeting and stepped up into the van.”

Lynn was lying on top of her sleeping bag, still fully clothed, reading a tattered paperback with a flashlight. Need welled up within Asha like lava bubbling to the brim of a volcano. Enough games. She knelt onto the mattress, gently pushed the book away, and slid a hand into one of the slits in Lynn’s leather costume to explore the flesh beneath. Lynn sucked in a breath, and her pupils dilated. Desire transformed from alluring to imperative. Asha leaned forward, and their lips met for the second time.

What I want is to live my own life. The rest of the world could go fuck themselves.

The sex was furious, tender, and heart-wrenching.

Source: TechCrunch

Reminder: We’re meeting in Columbus on Wednesday

Reminder: We’re meeting in Columbus on Wednesday

I’ll be in Columbus, Ohio, on Wednesday, August 10, to hold a night of pitches and open mic shenanigans so bring your guitar and pitch deck. The event will be at O’Toole’s 4796 W Broad St, right off I-270.

We’ll start at 7 p.m. sharp with pitches, so get there after work. And at 8 p.m. we’ll have an open stage with live music – I’m going to play with my friend Rick so bring your phones – and networking.

Want to pitch? Fill out this form and I’ll pick 8 companies to pitch on stage. First prize is a table at Disrupt in SF, and two other teams will receive tickets to the event.

We could also use a few sponsors for beer and what not. Get in touch if you’re interested. Also if you can think of any cool people who’d like to be judges, please let me know at john@techcrunch.com.

Special thanks to the folks at Kinsta for grabbing the first round of beers!

I’ll see you all next week!

Featured Image: Larry Knupp/Shutterstock
Source: TechCrunch

Gillmor Gang: Foot Traffic

Gillmor Gang: Foot Traffic

The Gillmor Gang — Keith Teare, Frank Radice, Kevin Marks, and Steve Gillmor. Recorded live Friday, August 5, 2016. The Gang is polled on Google’s AMP attack on the Web, the percentage of time on desktop vs mobile, and whether deep linking on Apple TV represents the new binge in media. Oh, and Trump meets FourSquare walk-in data on the latest G3 (below) with Mary Hodder, Halley Suitt Tucker, Francine Hardaway, and Tina Chase Gillmor.

@stevegillmor, @kteare, @kevinmarks, @fradice

Produced and directed by Tina Chase Gillmor @tinagillmor

Liner Notes

Live chat stream

The Gillmor Gang on Facebook

G3: Gone Swimming

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G3 chat stream

G3 on Facebook

Source: TechCrunch

Tesla’s best-laid plans will have a challenge in convergence

Tesla’s best-laid plans will have a challenge in convergence

Driverless cars and ridesharing are poised to bring about the next big tectonic movement that technology provides for the human experience. In much the same way that the mobile phone has transformed the way we live, autonomous vehicles and transportation sharing promise to change the way we move.

Tesla’s recent announcement of its Master Plan, Part Deux exemplifies the convergence of these technology trends. For Tesla, this is a natural evolution for the business that makes complete sense.

There are many hurdles to overcome, but as these technologies develop, local and federal regulations may be the largest. Tesla’s plan believes that proper testing will require approximately 6 billion miles (10 billion kilometers) in testing before worldwide regulatory approval will be achieved.

There is little doubt that cars will reach a level of self-driving competence at some point. However, what driverless, shared vehicles mean and how they become adapted into today’s infrastructure could create problems as governments wrestle with existing infrastructure and deeply entrenched financial interests.

Today’s trend

The PC evolution, the internet, the switch from cell phone to smartphone, tablets and laptops — these are a few of the examples of profound introductions of new technology to our society that have managed to cause evolutionary changes in our lives.

Now both driverless vehicles and ridesharing can be added to the list. Auto manufacturers are already experimenting with and making investments into these capabilities: GM recently invested $500 million in Lyft, with Toyota following suit in Uber and VW investing $300 million in Gett, a Tel Aviv-based ridehailing startup that operates in dozens of cities across Europe. The race is on.

Mary Meeker, in her recent state of the technology industry presentation, devoted a few slides to the intersection of ridesharing and autonomy.

The benefits of rideshare and driverless cars working together seem to far outweigh excuses to stay with the status quo.

“Google wants to leapfrog straight to fully self-driving cars, which could take a while, Tesla wants to iterate its way there despite the risks of semi-autonomy and traditional car makers are combining the approaches while making strategic investments in ride-sharing startups… UberPool has succeeded in de-stigmatizing car sharing, and could achieve mass adoption as the time saved offsets the slightly higher cost compared to public transportation… Fascinating questions to debate about how transportation will change as autonomy makes cars into mobile living rooms.”

The writing is on the wall

The benefits of rideshare and driverless cars working together seem to far outweigh excuses to stay with the status quo. With the high costs of owning a vehicle, reduced interest in driving and potential revenue opportunities by sending your car out to earn income via rideshare, the new model feels overwhelmingly compelling. As outlined by Meeker’s slide:

Car ownership will wane as its high costs and inefficiency give way to ride sharing.” As vehicles get into the market of being driverless-ready, rideshare companies provide an interesting option for owners of these vehicles.

Although we are not quite there yet, solving the technology challenges that will enable this new phase will eventually happen. The revenue opportunity is too great and will drive the innovation to commercialize as quickly as possible.

Right now, most of the talk and focus has been on gaining acceptance by government regulators, mostly to do with security and safety concerns. “U.S. regulators are embracing self-driving cars faster than tech in the past, poising the nation for gains from the auto industry shift.”

Knee-jerk reactions now could create large pileups down the road.

Still… there have been significant, and tragic, accidents that may slow the adoption of autonomous technologies. With the death of a Tesla driver using autopilot in Florida on May 7, 2016, government regulators may be forced to be more circumspect in their attitudes on how this technology progresses. To further add concern, another recently crashed Tesla on autopilot certainly won’t help government speed regulation.

Technology always evolves far faster than governments can keep up with. And as autonomous vehicles merge into the fast lane, understanding how they influence economies will be critical. Knee-jerk reactions now could create large pileups down the road.

The local government conundrum

Real-life examples of governments wrestling with ridesharing services are evident already. Take a look at Austin, where recent intervention by the city’s government prompted Lyft and Uber to pull out of what had been a successful area for them.

Some local governments have banded together to come up with solutions on how to best handle how rideshare companies integrate with their cities. From New York and Toronto to Athens and Barcelona, mayors are forging alliances to deal with the changing situation.

By combining ridesharing and driverless cars, companies are creating the potential for even more pressing issues for local governments on the horizon.

The driverless car and rideshare mashup won’t be easy

With increasing populations and aging infrastructure, the cost of road maintenance and public transportation infrastructure seems to increase every year. The typical strategy has been to offload those additional costs through taxes on things such as gas, parking, insurance payments, tolls or even pay-per-mileage recently introduced in Oregon.

Driverless cars and rideshare have the potential to significantly reduce cars on the road and negatively impact revenues needed to support local transportation infrastructure.

As owners of cars look to contract out their vehicles for usage in rideshare services to help support the cost of ownership, you’ll see fewer vehicles on the road. With EVs, hybrids and more fuel-efficient vehicles, fuel taxes are also at risk for decline.

The government is in total control of when and how these new technologies get introduced.

Increased carpooling will also impact a reduction in the use of public transportation. Reduced parking and toll revenue will combine with the aspects noted above, and will jeopardize the amount of money that’s collected and needed to support local infrastructure.

If driverless cars and ridesharing are going to be the next big thing, local governments need to look for ways to secure, grow and sustain revenue for the future. This dilemma potentially creates a barrier to the widespread adoption that would change the way we live.

On one hand, you’ve got a technological and cultural shift about to happen, but from a tax point of view, governments will create a problem for themselves by supporting this change.

Despite doing what’s right for people and the environment, we don’t always see that playing out in economics. Uber isn’t accepted everywhere because it threatens local regulated, revenue-generating taxi services, even though it’s a great service for consumers. Meanwhile, people in communities where rideshare is restricted continue to pay higher prices to own vehicles. Until this problem is solved, you’ve got some local governments unwilling to move.

Weave into that driverless cars, and you have government’s seemingly working against themselves — if they aren’t careful, they’ll legislate themselves into a deficit.

The government is in total control of when and how these new technologies get introduced.

Maybe they’ll decide to de-couple the rideshare from the driverless car, where people could still own driverless cars, but not use them to subcontract for rideshare services. Then you’ve got to restrict rideshare companies from owning their own vehicles now or face the same problem. Big decisions fraught with peril become evident from many angles.

The overwhelming benefits will ultimately see driverless cars adopted everywhere. And those cities that restrict rideshare will be faced with even more questions by local residents critical of the decision that blocks communities from the inherent benefits.

Governments will have to come up with different ways to pay for the system they’ve built, but their revenue requirements won’t go away. Perhaps driverless busses will reduce the costs of transportation. Parking fees could be recovered by mileage tax, or charging drop-off and pick-up fees for rideshare trips. Maybe you’ll see chargeable driverless car “waiting areas” pop up. Or insurance cost-savings created by a decline in accidents could be offset by higher taxes underneath the noses of the consumers.

One thing is for sure, these revenues will have to be made up somewhere. The question is where? With these questions still open, and a whole bunch of change coming, governments will soon be in No Man’s Land.

Featured Image: chombosan/Shutterstock
Source: TechCrunch

Stand up against the stand-up

Stand up against the stand-up

It’s custom; it’s tradition; it’s dogma; it’s a cargo cult. It is well-intentioned, but all too often, ill-advised. It’s done because it is the thing one does. It wastes your time, shackles your mind, kills your productivity. It is the ritual that so many software developers suffer silently through, every day It is the daily stand-up. I say to you: no more!

Before I lay waste to my target, let me first say: it’s not always awful. If your team is all in one physical location; if they all start their work at exactly the same time; and if the stand-up takes fewer than ten minutes, with any issues raised immediately assigned to be dealt with later by ad-hoc groups for whom they are relevant — in that case a daily stand-up is, indeed, an excellent way to maintain momentum, identify problems as soon as possible, and foster team communication.

Which is why the daily stand-up became A Thing, back in the days of yesteryore when nobody on your team worked remotely, much less in entirely different time zones; when nobody arrived an hour earlier or an hour later than anybody else; when “agile development” was still about actually being agile. Those were the years. But this is today. To quote myself:

In many places, ‘agile development’ has become codified into a fixed, carefully specified process of “standups” and “scrums” and “sprints,” which is darkly ironic given that the key principles of the Agile Manifesto include “value individuals and interactions over processes and tools” and “value responding to change over following a plan.” So what did companies create and fervently follow? Agile processes, tools, and plans. Sigh. If you are a Certified Scrum Master, you are doing it wrong.

Similarly, if you have a daily stand-up, it should not be because you take it as received faith that this is a good idea; it should be because you have carefully interrogated its actual purpose and outcome, and concluded that it is worthwhile despite its significant costs.

I’ll get back to those costs. First let’s talk about a stand-ups intended purpose: to maintain momentum, identify problems, and foster team communication. Back in the bad old days the only alternative for voice communication was email. Today, though, we have tools like Slack, or the like. If your team is in constant asynchronous communication via Slack and its ilk, why do you need a synchronous stand-up? Conversely, if your team isn’t in constant asynchronous communication, do you really think your problems are so small that a mere daily synchronous stand-up will help?

Now let’s talk about the costs. Yes, there are costs. There are very significant costs, ones which are often essentially invisible to managers. For further explication let me refer you to Paul Graham’s excellent essay “Maker’s Schedule, Manager’s Schedule“:

there’s another way of using time that’s common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can’t write or program well in units of an hour. That’s barely enough time to get started. When you’re operating on the maker’s schedule, meetings are a disaster. A single meeting can blow a whole afternoon…

Worse yet: for a lot of people, their sharpest, most productive time is first thing in the morning. So standups face a catch-22: they either occupy the very best and most productive time of many developers’ days, or else they detonate in the middle of the day, generally requiring at least twenty minutes of context switching before and after.

Figure your stand-up lasts twenty minutes. Then the develsoper time it occupies, including context switching, is one hour per developer. Suppose your team has eight developers: then a single twenty-minute daily standup occupies eight hours a day of developer-time … in other words, is equivalent to an entire person sitting around doing nothing, ever.

Now, granted, some people may find greater cohesion, greater sense of purpose, a greater sense of belonging, from a twenty-minute meeting once a day. Sometimes you may have a specific need for the whole team to sync up (before meetings imposed by clients or executive, for instance.) Sometimes, again, you actually do have everyone in the same physical location starting at the same time every day, the circumstances for which the stand-up was originally proposed.

But for certain projects, and certain teams — I would suggest most of them — the stand-up can and should be replaced with the check-in: as soon as every team member comes online in their morning (or evening, if they’re like some night owls or faraway contractors with whom I’ve worked…) they contribute to a dedicated “check-in” Slack channel or equivalent, reporting what they did yesterday, what they’re doing today, what problems and unknowns they face.

As others come online, they communicate to solve these issues, via text or voice or shared screen, coordinated of course by your friendly neighborhood project manager. But not all at the same time. In this glory era of asynchronous communication, synchronicity is highly overrated.

Source: TechCrunch