London Is Redefining Tech Startups Through Adventurous Capital

London Is Redefining Tech Startups Through Adventurous Capital
London hit an important milestone this month, but you may have missed the news as it emerged with a characteristically British lack of fuss. For the first time, the city’s technology startups attracted in excess of half a billion dollars of VC funding in a single quarter – $646.98 million for the period January to March 2015.
The data, collected by London and Partners (the evangelical wing of the London Mayoralty) puts the city on course for a $2 billion-plus investment year. That feels a lot like progress when you consider that London’s tech firms scraped together a miserly $10 million in Q2 2010. However, on purely numerical terms, our achievements are still modest.
London’s 2014 funding total of $1.35 billion puts it on par with Redwood City, Calif., population 76,000 and home to Evernote, Reputation and Turn. Even more humbling is the fact that San Francisco-based Uber raised $3 billion on its own last year.
But size isn’t everything. London exerted architectural influence long before its sedate skyline was punctured by the monolithic Shard. So it is with our technology companies – modestly proportioned, but globally significant.
Consider fintech and the foundations on which this rapidly growing sector is built; London is the world’s leading foreign exchange hub, handling $2.6 trillion per day, more than double that of New York City. It sits on the prime meridian, literally the centre of the world, at least in terms of time zones.
The U.S. is so large and service-hungry that there’s also money to be had launching the first, second and even third valet parking app.
Yet, Britain is a small island with a population of just 60 million people. The need to seek and service markets beyond our own borders shapes London’s burgeoning technology firms. Many of the companies that have attracted substantial investment – our own included – have internationalized rapidly.
By contrast, some of the best known and most generously funded U.S. startups are focused on American solutions to American problems. And why shouldn’t they be? The U.S. is a huge and lucrative market whose financial system is creakingly antiquated and ripe for disruption. Domestic bank transfers still take several days and the slow adoption of chip and pin technologies and NFC cards primed shoppers for the likes of Square and Apple Pay.
Beyond finance, the U.S. is so large and service-hungry that there’s also money to be had launching the first, second and even third valet parking app.
It is still possible, in 2015, to create a multi-billion-dollar business without venturing beyond the borders of the United States. By contrast, European startups enjoying a level of success are compelled to internationalize almost immediately.
Compare Square, which, six years after launch, is only available in the U.S., Canada and Japan, to its younger Swedish counterpart iZettle, which is already being used in 10 countries.
Early in the growth cycle we are faced with operating in multiple legal jurisdictions, setting up local business entities, language translation, international recruiting, marketing and customer support. That drives very different business models.
International agility is increasingly important in a connected world because common platforms and global distribution means that dominant players in one territory can quickly find themselves under siege from overseas. Facebook’s defensive purchase of WhatsApp showed that entrenchment in one or two large markets is no match for global virality.
Having a different perspective on internationalization also opens up new business opportunities. It is tempting to turn first to big, homogenous markets like the U.S. and China. Everything else is seen as “long tail” because the ratio of set-up effort to financial return is less favorable. However, there is such a thing as a “rest of the world” business.
And the potential rewards are far from long tail. In the case of international remittances, $5.5 billion is sent annually, most of which is currently offline. These growth patterns are not exclusive to London; we see them elsewhere in Europe also.
Having a different perspective on internationalization also opens up new business opportunities.
Adyen is a Netherlands-based online payments service (and fellow-member of the European fintech 50). Fewer than 10 years old, it now handles more than 180 currencies and is used by the likes of Facebook, Spotify and Airbnb. Adyen is favored precisely because it solves the problem of diverse local payment systems. Its rival, the longer established WorldPay, is based in London.
The effect of investors’ increasing engagement with these ‘rest of world’ opportunities is startling. Although the UK’s share of global fintech investment is still relatively small in financial terms, our rate of growth is not. According to Accenture, investments in UK fintech increased by 3x the global average and 5x that of Silicon Valley over a five-year period.
In 1982 Chariots of Fire screenwriter Colin Welland proclaimed to the Oscars crowd “the British are coming.” More than 30 years later, few in Hollywood would dispute that prediction.
There is some way to go before UK startups and London fintechs in particular enjoy Benedict Cumberbatch levels of acclaim stateside, but we are already more than ones to watch. We’re building something here, we’re doing it differently, and it looks like we’re onto something.

A Fundraising Template Every Entrepreneur Can Use

A Fundraising Template Every Entrepreneur Can Use
Raising massive rounds these days is so commonplace that most of us tune out fundraising news altogether. The fundraising environment has changed so dramatically over the past four years, it’s almost incomprehensible to those of us who lived through it.
A lot has been made of how ridiculous late-stage rounds have gotten, as well. Bill Gurley penned one of the best pieces I’ve read on the subject recently; to raise late-stage rounds, startups go through far less diligence and scrutiny than they would if they decide to go public. As a result, a lot of late-stage startups lack the operational discipline necessary to go public. I would argue that trend trickles down all the way to the earliest stages of venture-backed companies and really starts there.
Early-stage CEOs are practically taught to not even put a financial model in any of their fundraising decks until they get to their Series B. It’s all about building product in the early stages right? You don’t need to worry about figuring out a business since it’s all about growth in the early stages, right? Wrong.
Every CEO needs to fully understand the cost of doing business before deciding to raise any outside capital. You don’t want your burn rate to get ridiculous in the early days, so force yourself to put something basic together, even if it’s out of your comfort zone.
For those of you short on time, I decided to put something together very basic for you, which will at least give you a start in understanding how much you need to raise to get to your next milestone. I used Gumroad to share the link – you don’t need to pay anything to download the model – just donate “$0.” A few notes about my template are below.
This is not a one-size-fits-all solution. Think about customizing this in the context of your business. As an example, some companies may want to get a lot more granular about sales expenses to see if it makes sense to build an enterprise sales team. In order to analyze those costs, you will need to, as an addendum to this, add a lot of details on the quotas of individual salespeople, seasonality, ramp time, and numerous other factors. My model, simplistically looks at the fully loaded cost of salespeople if they hit their quota.
Include all of your recurring expenses, however small. The little things add up and you will discover that you are spending way more than you should on services you don’t use. Once you write down all of the little expenses, you’ll realize you’re burning a big hole in your wallet.
Write down everything as small as a domain that you bought from GoDaddy for a $19.95/year; you need to be frugal in the early days in order to be disciplined. Unanticipated, or unaccounted-for expenses will kill your startup faster than a bullet.
You should eventually take the time to build a marketing funnel. As you mature as a company, the marketing tab should be more granular and based on a real-life cost per acquisition number. For example, if you know that it costs you $200 to acquire a customer, and you know what your conversion rate by channel is (Facebook, Google, email, etc.), you should build an addendum to this that gets granular about which channels you intend to spend on.
Really sophisticated companies (generally at the growth stages) can get fancy with this and know exactly how many leads they are going to “buy” with their new funding, how many will convert to sales-qualified leads, and how many will eventually turn into paying customers (and know the LTV). This helps companies understand how quickly they can grow in the context of their funding.
You will spend more on vendors than you think, so cushion that substantially. The one that always gets people is “recruiting expenses.” The market is hyper-competitive right now for talent, and you may think for a while that you can do it yourself. The reality is, you will hire a contingency recruiter at some point in your company’s life cycle, and when you do, you will get a $25,000 surprise bill. I recommend third-party services to hire engineers; it takes the risk out of this type of expense because you only pay if the employee works out for a prolonged period of time.
“Fringe” is much higher than you think. The cost of hiring a salaried, full-time employee in the San Francisco Bay Area is expensive. It’s not limited to salary itself – you have to burden the employee’s cost to account for things like healthcare, 401k (if you’re going to have one), payroll tax and so on. To hire a $100k full-time employee in San Francisco in reality costs substantially more than $100k.
Office space prices are getting ridiculous. I often joke with my other founder friends that the reason companies have to raise so much is to pay their leases. Depending on the neighborhood, you will spend up to $97 per square foot in San Francisco. Not only that, but it’s rare to find a property management company that will take you in these days for lease terms less than three years. Kiss a few hundred k of your new shiny money behind to office space.
The bottom line is the money goes extremely fast depending on where you’re based. Bay Area salaries and office space are out of control (but the talent pool and access to capital are amazing), and if you are building a company here you will need more capital. With that being said, do not raise a dollar more than you need to – otherwise you may end up like Javeed from “Silicon Valley.”
I encourage every early-stage entrepreneur to use this, or something like this when considering how much to raise.

The Obsession With Silicon Everywhere

The Obsession With Silicon Everywhere
There are many commentators who argue that there is a bubble in Silicon Valley today. They may or may not be right, but there is certainly a bubble in places named after the preeminent global tech ecosystem.
Silicon Border. Silicon Hills. Silicon Steppe. Silicon Prairie. Silicon Roundabout. Silicon Gulf. Silicon Avenue. Silicon Canal. Silicon Alley. Silicon Beach. Silicon Forest. Philadelphia has a groaner of a region with Philicon Valley (whoever invented this should be banished from marketing for five years or forced to market Path). That leaves Korea as one of the only places in the world to emphasize geography over metals with its Honghap Valley district.
Silicon may be one of the most abundant materials on the earth, but the absolute obsession with naming any tech office park after Silicon Valley is a trend that needs to stop.
Innovation ecosystems don’t just pop out of the ground once a sign blasting “SILICON!” is staked. Instead, they are inculcated over many years through effective government policy around education and business regulation, plus are usually offshoots from other globally-competitive industries. It is no surprise that some of the most successful new high-tech regions of the past decade are in Los Angeles, New York, and London.
Pursuing disruptive technology companies as a policy is deeply distracting, and governments will find that their time and money would be better spent investing in the quality of life of their residents.

The Silicon Mirage

Every government in the industrialized world is talking about high-tech growth. It’s understandable. High-tech jobs tend to pay well in many parts of the world, and the jobs are “clean” relative to other areas of the economy like manufacturing. Rapidly growing companies make for a great economic revitalization story, and the creation of millionaires can get voters to ignore more fundamental issues with an economy.
Plus, it’s just pure fun. It’s rare in policy where science fiction and reality get to meet, and one of those is innovation ecosystem development. Witness all the politicians who have stopped by Facebook, Google, or Twitter over the past few years. There is a sexy quality to these companies that politicians want to be near.
Of course, never mentioned during those photo ops is the dark underbelly of Silicon Valley. Inequality is growing rapidly in the region, driven by the hollowing out of the middle class. Also growing are the rents, which have surged in all the high-tech areas due to increasing demand from high-income earners and limited housing construction. In addition, politicians seem willfully blind to the millions of jobs displaced by computer automation over the last few decades.
High-tech can have incredible economic performance, but it is not an inclusive industry like manufacturing, where highly-paid executives, designers, and product managers can work alongside middle-income factory workers. It really is an all-or-nothing industry: either you can perform at a peak level and net the full SV compensation package, or you are mostly irrelevant. The bus drivers of tech’s private shuttles and the security guards at Google would probably know a thing or two about that.
It’s certainly not unusual for politicians to pursue these sorts of elite jobs out of status and glamour. Many state governments in the United States offer film tax credits to production companies to shoot movies within their states, a system of corporate welfare that is now starting to be repealed since it doesn’t work.
Unfortunately, tech is a harder beast to analyze, which is why it continues to flourish in policymaking circles. There is all of this supposed “magic” that happens when we add the high-tech powder into the urban economy soup. Industries become more competitive, quality of life should improve, and the city becomes more attractive to potential workers. Like magic!
The reality is harder to discern, but we are probably spending too much. Technology is indeed a “good” industry that adds value to an economy (as do many other industries, of course). The challenge is matching the value created with the policy incentives and programs that suck up government revenues. In many places throughout the world, spending remains grossly unbalanced.

The Silicon Valley Playbook

One of the incredible parts of attending government policymaking conferences on innovation ecosystems (and you thought C-SPAN was boring!) is that few politicians and their policy managers even know what Silicon Valley is, or more specifically, what makes it tick.
The region has many “key” qualities, but two are far more important than the others. The first is risk-seeking behavior, which should be self-evident every time you hear about another crazy entrepreneur with a crazy idea, and especially when you hear about the venture capitalist willing to throw millions behind him or her. Everyone in this industry understands risk, albeit with different tolerances, and is willing to play the game to make huge returns.
The other characteristic is that the region is entirely centered on extremely fast growth. Engineers inexorably move to faster growing companies so talent is concentrated in the most likely future success stories. Lawyers and accountants are willing to push the law around taxes and valuations in ways that firms in other regions are simply not willing to do.
Here is the thing: Silicon Valley is not unique in the United States as a dynamic innovation ecosystem. Both New York in finance and Los Angeles in media are examples of regions that have many of the same qualities of San Francisco. Producers in Hollywood are just as calculating about creativity and returns as their venture capital brethren. That’s why Silicon Beach and Silicon Alley have had disproportionately faster growth than other newer tech regions in the world.
The good news is that most nations already have some sort of industry that fits this pattern. Rather than trying to reinvent the wheel by importing tech companies, governments would do better to invest their time into increasing the competitiveness of these already-existing industries. In other words, accentuate the strengths.

Balancing Silicon And Reality

The tech industry is held in high status by many throughout the world, so it is little surprise that politicians would try to attract this industry to their home districts. Unfortunately, that spending is often wasted on useless initiatives designed to build a startup ecosystem at the expense of the actual strengths of the local economy.
Instead of spending, try listening. Maybe the regulations around venture capital need to be reworked. Maybe hiring and firing for startups is prohibitively expensive. Maybe broadband networks need to be modernized. Every region and city in the world has something it is doing well that could be potentially world-changing. That will always be your best ticket to the high-growth lottery.
Along this line, realize that the most impactful change is going to come from bottoms-up ecosystem development. There is incredible money to be made in innovation ecosystems, and so there is rarely an incentive problem when it comes to the numbers. Often a change in culture is the first step to building these regions, and that will only come when the people decide it themselves.
Finally, and most practically, spend the time you would have spent on startups on the fundamentals of your region instead. Well-diversified economies with great public amenities are always going to be desired by the kinds of workers these types of industries attract. Random startup incentives are almost certainly less useful than, say, a great transportation system.
Part of the Silicon Valley ethos is learning to forge your own path. My advice to politicians is to do the same. A Silicon Path.

Push For Greater State Surveillance Powers Could Have Chilling Effect On U.K. Tech Sector

Push For Greater State Surveillance Powers Could Have Chilling Effect On U.K. Tech Sector
The U.K. government is lining up a new piece of legislation to expand the state’s digital data capture powers. The incoming bill, the Investigatory Powers Bill, was announced in the Queen’s speech this week. It has not yet been published in draft form so specific details of what is being planned remains unclear, but in recent times the Conservative party has been banging the drum to expand the type and volume of captured comms data. The U.K. Prime Minister has even appeared to suggest that strong encryption should be outlawed.
The Telegraph newspaper this week suggested new powers to be outlined in the Bill will require companies like Google and Facebook to give U.K. intelligence agencies access to the encrypted conversations of suspected terrorists and criminals. That scenario presupposes Internet companies have the ability to access their users’ encrypted messages. While that is certainly true for some digital services with a sloppy attitude to security (or with business models that rely on data mining their users), others, such as Apple, claim they intentionally do not hold encryption keys — which presumably sets up a legal clash with security- and privacy-conscious tech companies and the U.K. government. Does the Tory government intend to make iMessage illegal? That really will be a *gets popcorn* moment…
The Tory’s prior attempt to expand the state’s data capture powers, the Communications Data Bill — widely criticized as a ‘Snoopers’ Charter’, on the grounds that it would have required ISPs to retain detailed data on web usage — failed to pass through Parliament owing to the lack of support from the Conservative’s Lib Dem coalition partners. The new Tory majority government has no such limitation. Former Lib Dem MP Julian Huppert, who lost his seat in the election this month but was a prominent critic of the Communications Data Bill, tells TechCrunch he has concerns about the surveillance powers that the government will be pushing for.
The concept of keeping track of every website everybody ever goes to, or of requiring ISPs to keep track of what you do on Facebook all the time are deeply intrusive.
“We’ll have to see how much they’ll try and throw in to it. When they were trying to push the Communications Data Bill, initially, the first version was incredibly broadbrush and afforded powers to do any data collection. They then admitted, during the process of our [parliamentary committee] enquiry, that actually there were only three things they particularly wanted. One of which was IP addressing matching, which there was good evidence for and we agreed to do… One was about requiring ISPs to keep track of web logs, effectively. So a list of every website you go to, and things like that. And the third thing was to have a power to require ISPs to keep track of third party information — so what you do on Facebook, what you do on any other site,” says Huppert.
“Those were the three things they said they wanted. The IP address matching basically was the only thing they had any evidence for. And it doesn’t involve any significant privacy intrusions but has huge advantages. Whereas I think the concept of keeping track of every website everybody ever goes to, or of requiring ISPs to keep track of what you do on Facebook all the time are deeply intrusive. And actually they couldn’t come up with any significant evidence of why it was useful.”
“There should be a clear piece of legislation that sets out what is ok, what is not ok, what the processes are for changing it. And it needs to be written with an acceptance of the need for accountability. And the need to have as much transparency as is consistent with the genuine requirements for operational work. But that’s not the approach that’s been taken before. It’s not the approach that the Home Secretary has previously urged. Maybe she will change her mind this time but I’m sceptical,” he adds.
“I worry that the Home Secretary will largely try to simply procure more powers for the state without justifying it or consider the count of balancing issues that there are. And certainly, like we’ve seen with the Prime Minister’s comments about encryption, those are huge threats to the UK technology sectors. And is definitely not the right way to proceed.”
Beyond the overreach and privacy intrusion of having the state require systematic logging of citizens’ web browsing habits and social media activity, another reason to oppose more expansive state data retention is that it makes the intelligence agencies’ job harder — given it increases the noise to signal ration, as Huppert notes.
“There’s no doubt that if you demand more things you have more data, and if you believe that the problem the intelligence services face at the moment is a shortage of data then it would address the problem. I think the problem is they don’t know what to do with all the data that they have. If you look at the killing of [U.K. soldier] Lee Rigby for example the problem isn’t that they have no idea. The problem is they have so much data they couldn’t prioritize it properly,” he argues.
“So unlike IP address matching where there really was a strong case, there isn’t a clear case here. Beyond ‘we can think of some situations where it might be useful’. And I think one of the things that people should look very very carefully at this is what is the evidence for any of the claims that are made. We certainly found the ones given initially were, I think the word we used was ‘misleading’.”
He also notes that the Joint Committee report on the draft Communications Data bill was hugely critical about the lack of data ministers were able to provide to support assertions that expanding data capture powers for counter-terrorism purposes would save lives. So that’s another thorny problem with legislation in this area — the government can and does shroud its arguments in claims of national security secrecy. Saying, in essence, ‘we need more data — but we can’t tell you why’.
And where the U.K. Parliament’s Intelligence and Security Committee should be playing a robust role in holding the government to account in such a sensitive area, Huppert says there has been further failure. So he’s also not putting much store in claims that the Investigatory Powers Bill will “provide for appropriate oversight and safeguard arrangements”.
“We do need better oversight. The intelligence services play an incredibly important role and we want them to be able to do their jobs in a clear and accountable way. But the ISC has not played that role,” he adds. “The Investigatory Powers Tribunal ruled against the government but the executive response was to do nothing and soon after deny that the ruling had happened. So I don’t have much confidence in that.”
One portion of U.K. legislation he does support overhauling is RIPA. Aka the Regulation of Investigatory Powers Act 2000, which regulates the powers public bodies have to carry out surveillance and communications interception. Briefing notes for the Investigatory Powers Bill state it will aim to “modernise our law in these areas and ensure it is fit for purpose”.
RIPA has been criticized for years for eroding press freedoms and sanctioning disproportionate surveillance — by, for instance, enabling police and local councils to spy on journalists. Or, in another instance, a local authorities to check if a family was living in a school catchment area. So there’s a clear need for ripping up RIPA and starting again.
But again Huppert has concerns about the government’s approach here.
“RIPA does need to be re-written. There’s no doubt about that,” he says. “It is an atrociously written piece of legislation… I think that everybody agrees RIPA is not fit for purpose. And that would include strong critics like myself but also if you look at some of the things that [Commissioner for the Global Commission on Internet Governance] David Omand has said… He’s argued for full public and parliamentary understanding of new powers… So I do think we need to have a re-write of RIPA but the correct way to do that is through the joint committee process, thinking about it slowly and carefully — not something rammed through by a new government eager to get on with it.
“And the intention, which the Tories had agreed to or stated publicly, was that [to get this balance] there would be a joint committee set up between both houses to consider how to re-do RIPA. And it does seem to me that they are jumping the gun somewhat on it.”
Huppert is not alone in his concerns either. This week a UN report dubbed encryption an essential tool for protecting the right of freedom of opinion and expression in the digital age. While Sir Tim Berners-Lee, inventor of the world wide web, called for checks and balances on government surveillance. Speaking at an Internet festival taking place in London this week he asked of politicians: “Can you show us that you can build a system which is accountable to us, where when the security services take the ability to look at private data, they do it in a way where it goes through a court, they do in way so my personal data is not going to be snooped on and when people do have their data snooped on it’s only used in a very serious process of tracking down organised crime and terrorism?”
The Investigatory Powers Bill is one of a series of initial bills announced in the Queen’s speech, which sets out the government legislative agenda for the new Parliament — so shoring up and expanding state surveillance and data capture powers is evidently front of mind and a clear priority for the new U.K. government. How that preoccupation with supporting and enabling greater state powers of intrusion on the one hand vs an apparent desire to modernize problematic older laws pertaining to interception powers plays out remains to be seen. But the government’s anti-encryption rhetoric suggests another serious clash of politics vs technology is incoming — the outcome of which will ripple out to affect both U.K. web users and their online behavior, and global companies doing business in the U.K.
The U.K. is often referred to as the most surveilled country in the world — typically a reference to the pervasive use of CCTV. At the last count there were estimated to be between 4 million and 5.9 million of these surveillance cameras in the U.K. (which has a population of around 64 million), although the vast majority are privately owned and operated — rather than being directly controlled by the state. (The number of publicly operated cameras in England and Wales is around 100,000.)
This month the U.K.’s surveillance camera commissioner warned that budget cuts are forcing councils to switch off CCTV cameras. But the idea that state surveillance capabilities will diminish because of shrinking government resources seems fantastical. Rather the role of providing state surveillance apparatus continues to be outsourced to private operators. So U.K. police and intelligence agencies obtain whatever CCTV footage they’re after from the private operator funding a camera in their shop or carpark or driveway — or, hey, even that in-home Dropcam or the lens on that life-logging wearable that never stops recording what’s going on around you. Imagine the power of state surveillance tapping into an expansive Internet of Things infrastructure that ceaselessly gathers real-time data on every point of human intersection — public and ‘private’.
When it comes to surveillance of digital comms data, this same outsourcing modus operandi used with CCTV is being applied by governments to Internet companies — with the U.K. government now preparing to push one of the most hawkish data retention agendas in the Western world, and that despite the censure that has been directed at systematic digital dragnets in the wake of the Snowden revelations. How hugely powerful commercial digital platforms respond to being co-opted as the coal face of state surveillance, where their user data is then subject to systematic mining by the state as a byproduct of citizens’ digital participation, continues to be one of the most pressing issues of our technology-fueled times.

Millennials Are Destroying Banks, And It’s The Banks’ Fault

Millennials Are Destroying Banks, And It’s The Banks’ Fault
Millennials are rejecting home ownership across the land. Millennials aren’t buying crap anymore, destroying businesses that, well, sell crap. Millennials are changing the workplace to be, I kid you not, more friendly to “millennial values.” Millennials this, millennials that, and those are just some of the stories published this week on this critical, hot-button issue.
Frankly, as a millennial, I’d like to copyright the term and earn a royalty every time it is uttered. Like that Happy Birthday song.
I hate this generational garbage as much as the next person, but there is a kernel of truth that people born in the same years face similar contexts in their lives. My generation witnessed 9/11 and the wars in Afghanistan and Iraq at a very formative age, and we were hit with the global financial crisis right as we were expected to get started in the workforce. That colors your worldview.
Few industries will face a greater struggle targeting these new consumers than banks, who seem wholly unprepared with what to do with us. Indeed, if ever there was a dark evil in the world that millennials as a whole would probably like to see completely destroyed like San Francisco in San Andreas, it is the banking industry.
The banks aren’t ignorant. Jamie Dimon, the head honcho of JPMorgan Chase, told shareholders this year that “Silicon Valley is coming” with “hundreds of startups” providing alternatives to traditional banking services.
Banks are here to stay – for now. It is clear though that startups, often led by millennials and ushering in millennials as early adopters, are coming for the heart of the banking industry. How it responds will determine who owns the capital of the most important capitalist country in the world.

The Changing Financial Desires Of Millennials

Every generation has its financial goals. For much of the past few decades, the goals have been independence through home and car ownership along with a growing retirement account to supplement Social Security and pensions.
Not surprisingly, banks have catered to these desires with a bevy of products, including vastly increased mortgage lending (in fact, increasing to the point of catastrophe as we recently witnessed) along with home-equity loans, investment and retirement advisors, and a customer service relationship centered on local branches.
Millennials have entirely different life goals, and yet, financial institutions have yet to respond with the kinds of products needed to satiate them. Just to start, this generation has the greatest levels of student debt in the country’s history. That means that almost all the products currently offered by banks are mostly irrelevant, since major purchases like homes will be pushed back, perhaps indefinitely.
Amazingly, we have seen almost no innovation in student loan lending from the traditional banks, while there has been tremendous innovation in the market from startups like SoFi, Earnest, CommonBond, among others. What gives? Imagine if the first thing a traditional bank said to a college graduate and potential new customer was “open an account, and we can can help you refinance your student loans with a lower rate and save serious dollars during repayment.”
I’ll talk about customer service in a moment, but it is clear that there is a gaping hole in the market here that the traditional banks seem all but blind to.
That said, big banks have been a bit more engaged around improving investment advising. Many now offer automated investment accounts directly or through contracted brokerages, just like fintech startups Wealthfront or Betterment. These tools have traditionally targeted millennials, who seem more comfortable with computers handling their money and who also desire a well-balanced investment portfolio (we did survive that global financial crisis after all).
There are all kinds of other financial products that traditional banks should be engaging with. Newer models of credit scores, like those from Affirm, could greatly help younger workers find loans. RobinHood and others are trying to show that stock trading fees are obsolete. Banks have so many opportunities to engage with millennials, it is disappointing to see how much they have ignored this demographic.

That Said, Please Don’t Talk With Us

Yes, we want banks to engage with us, but no, please don’t talk with us. I have only once ever walked out of a bank branch as a completely satisfied customer (this trip may also have involved free candy). Automated investment platforms are not just popular due to their lower fees and balanced risks, but also because traditional investment advisors had no fricking idea what they were selling (yet somehow still became rich in the process).
Traditional banks have moved many of their banking functions online or at least to ATMs, since every in-person transaction has a significant cost attached to it. But so far, none of them has developed the user experience and product quality necessary to really take full advantage of mobile and the web for banking.
Simple Bank, the startup acquired last year by BBVA, tried to reach a point where everything could be done through mobile. They missed the mark, but the potential is still there. With Nimbl acting as a “Uber for ATMs” and several other new startup banking services, this dream seems much less far-fetched than it did just a year or two ago.
I want a bank where absolutely everything can happen through my phone, and if I need help, I can ask a banker about something instantly through the click of a button. I want a concentrated set of services designed just for me, and not a menu with more than fifty options for services that aren’t even relevant for me.
I want to transfer money in ten seconds – not ten screens.
Along that simplicity theme, part of shedding all of these human touch points is also reducing the complexity of banking products. Every time I go to a bank, there is a rigamarole involved as we go through the new-account-type-of-the-month, each of course with their complex tiers of fees. I know this is designed to screw me, and I don’t like it. Simplicity is golden.

The Future Bank For Everyone

Yes, millennials are annoying customers, but here is the irony: everyone wants these features. Consumers want to be able to manage their finances from their phones and tablets while limiting their visits to bank branches and bank tellers. Plus, everyone hates bank fees, particularly their lack of transparency and complexity.
The difference today is that millennials are willing to shop elsewhere, because we are simply not going to accept that these are the only products on the market. We are willing to try new startups and their innovations, since they speak our consumer language while the traditional banks do not.
If the big Wall Street banks fail in this new environment, it won’t be because they failed to bring millennials into the fold. It will be because they will have failed to innovate for all of their customers.

Berlin And Tel Aviv Should Work Better Together

Berlin And Tel Aviv Should Work Better Together
“Germany is the fourth-largest GDP in the world and only an hour timezone away from Israel, and yet most Israeli entrepreneurs strive to collaborate with San Francisco, with 10 hours difference, and 20 hours flight. This is silly,” Eden Shochat recently said to me during a coffee in Herzliya, the “Palo Alto of Israeli Silicon Valley.”
Like many successful entrepreneurs, Eden became a business angel and later a VC after he sold Face.com to Facebook. Eden is a superstar, picks his companies wisely, and most of the startups supported by Eden’s Aleph VC get additional funding from various investors. But when I look at the backers of Aleph’s portfolio companies, it becomes clear that, aside from Israeli money, most of the venture capital here comes from the U.S. Take Meerkat whose majority 20-plus investors are American.
Stories like this made me wonder. There are a lot of startups in Israel that have an immense potential, while Berlin is full of venture capital looking for deal-flow. So why are there almost no European investors in success stories like Meerkat? Why do barely any Israeli startups consider European money? And looking at investors actively looking for deal-flow in Israel, where is Berlin’s Early Bird, Point Nine Capital, Atlantic Capital? Where are the London-based VCs that are most active in Berlin like Index Ventures or Accel Partners?
At the same time the Berlin investor community is eagerly looking for deal-flow as far away as Silicon Valley, when amazing companies are built just in front of our European noses. Israel is just three-and-a-half hours away. It’s as close to Berlin as Spain, and certainly much closer than America. From the perspective of a Berlin founder who got to know the Tel Aviv tech community, something here doesn’t make sense.
I ended up in Tel Aviv after the acquisition of our startup Xyo by an American corporate with a large office in Herzliya. Through this I’ve spent most of my time in Israel since October last year. I felt at home in Tel Aviv almost immediately. It looked like Berlin in summer, with the same cosmopolitan vibe, tons of startups and the same rundown streets and mess of a city that grew organically with immigration of young creatives from all over the world.
Also the startup ecosystems and venture capital scene are similar in both cities – both emerged about 15 years ago, and are equally mature in its development, with the first wave of large exits behind them, but still lots of very young founders.
With the majority of money here being American, Tel Aviv seems a little bit underfunded in early stages. No surprises there: Early-stage investors like to keep their companies close to them, and Silicon Valley is simply far away. With such exposure to U.S. venture capital, B and C rounds are common. On the ground, the most active investors are Sequoia, Carmel Ventures and Eric Schmidt’s Innovation Endeavours. Except for Aleph.vc, there seems to be a shortage of A and seed money, and many entrepreneurs complain about valuations in early stages.
Tel Aviv startups are often riding on the bleeding edge of tech and do not shy away from the most complicated problems of the industry. While Berlin’s CEOs come from Europe’s great business schools, however, it is not the university that produces the most amazing engineers in Israel, but the Israeli army.
The Intelligence Unit 8200 is the largest unit in the Israeli Defense Forces. It engages in intelligence activity partly through the use of advanced technology, and it has become a “university” for Israeli CTOs. Participation in Unit 8200 is one of the surest ways to a take-off to hold senior positions in high-tech or founding a successful startup. Several alumni of 8200 have gone on to found leading Israeli IT companies, including Waze, ICQ and Onavo.
Unlike Berlin, there is an overabundance of amazing CTOs, but often the founders I meet roll their eyes when asked about their go-to-market strategy, as if I was touching on some really boring point. There is an advantage and a disadvantage to it. The advantage is engineering talent is something that the whole world is striving for. The disadvantage is companies seem to be sold prematurely, in frequent asset or team-driven exits to large corporates that look to establish an R&D office in Israel.
In Berlin, to the contrary, the CEOs often don’t even have a CTO as co-founder but are able to market a to-do list as if it were the best invention since sliced bread. I wish to see Israeli CTOs join forces with Berlin CEOs to unlock the full potential of all the amazing tech that’s being built in Tel Aviv. I could imagine billion-dollar companies built this way.
Not only do I see the benefits of tightening this cooperation, but with 20,000 Israelis in Berlin, and more and more Berliners visiting Tel Aviv as an oasis of sun nearby, there is something natural about it. On both sides of the Mediterranean Sea, there are founders and investors willing to syndicate, exchange talent, and create another high-tech hub, an “EMEA Valley.”
“Berlin and Tel Aviv are just four hours apart, both are vibrant ecosystems with highly complementary skill sets, it is time to work closer together”, said Christophe Maire, Berlin’s most active super angel and early-stage VC, with companies like SoundCloud and EyeEm in his portfolio. As André Eggert, founding partner at leading Berlin startup law firm Lacore, who met a number of Israeli startups during his frequent holidays in Tel Aviv, said: “Berlin and Tel Aviv are equally vibrant and open to sharing experiences. I am impressed by the high standard TLV companies work on. Their focus on hardcore technology is something Berlin can benefit from.

YC Grad Yhat Scores $1.5M In Second Seed Round

YC Grad Yhat Scores $1.5M In Second Seed Round
When Yhat, the company that has developed solutions to help organize data scientist teams, graduated from the Y Combinator, winter 2015 class, the founders had a goal to raise a million dollars to keep growing the company when they returned to New York.
They may have aimed too low.  The team actually was able to raise $1.5 million in their oversubscribed round, thanks to the interest in their technology.
Being part of Y Combinator enabled the founders to meet people in Silicon Valley — really one of the goals when they applied. The company already had east coast finance connections, but the founders hoped to build a network in Silicon Valley too. Being part of YC opened the door to meeting the right people, Yhat CEO and co-founder Austin Ogilvie explained.
“Y Combinator was an excellent way to build a west coast network of entrepreneurs and experienced software investment operators,” he said.
The Post-YC financing objective was a $1 million raise and was mostly focused on meeting these  strategic west coast angel investors. In particular they hoped to attract enterprise SaaS executives.
And they found some good ones in Tikhon Bernstam, who co-founded Scribd and Parse; Ilya Sukhar, another Parse co-founder; and Justin Kan, who founded Twitch. These are experienced entrepreneurs and that’s precisely what Ogilvie and his co-founder Greg Lamp were hoping for.
In fact, they got a mix of over 20 investors, including several backers from the first seed round. Currently Yhat has 14 customers. Ogilvie joked that his company is “a mighty team of 9″ right now, but there are plans to expand.

Where Do They Grow From Here?

The company doesn’t plan to sit still in the wake of Y Combinator, which he described as a whirlwind of activity.”The whole YC conclusion was overwhelming in a  good way, but I’m glad to be back and focussing all of my attention on my business,” Ogilvie said.
With money in hand, co-founder Lamp flew to New York to get more office space. Over the next six months, they plan to hire at least 4 new employees.
The company has two products at the moment, ScienceOps and ScienceBox. The former, as they explained to TechCrunch last winter, “they developed as a solution designed to help teams of data scientists work and communicate more effectively with one another as they built projects on top of popular data science tools like R and Python.”
“Largely that road map [for ScienceOps] is centered around the idea of helping enterprises, understand the efficacy of the predictive models they are using in day-to-day decision making,” Ogilvie explained.
This will allow customers to measure the quality of the rules and predictive models they are using for their business decisions. He offers these examples: “How good are my product recommendations today vs. last week vs. last year?” or “How is our newly minted credit scoring model performing and are we seeing those lower credit loss rates we expect?”
The next version of ScienceOps is in early beta with wider rollout expected some time in the third quarter this year. Early customers are giving favorable reports, he said.
ScienceBox was the second product and designed to help smaller teams of data scientists
Ogilvie also gave a glimpse of a future product that’s not quite ready for release called ScienceCluster. It will enable data science teams to build clusters made up of multiple servers. This will unleash power that should create entirely new use cases.
It’s a crazy, fast-growing market and it takes a lot of education to explain the products to large organizations, many of which are just beginning to dabble in data science, he says.
Yhat has some funds now to keep it going, but Ogilvie made it clear he’s in it for the long haul. He wants to see his company grow and develop into a much larger organization.

A Look At The Future Of Shopping Inside A Startups Lab In This San Francisco Mall

A Look At The Future Of Shopping Inside A Startups Lab In This San Francisco Mall
Silicon Valley is full of big, disruptive ideas. Now a certain mall in downtown San Francisco would like to capitalize on some of that innovative gold in the hopes that it will bring online shopping into the physical realm. So it built a tech space for startups.
Bespoke is 35,000 square feet of co-working and event space with an open floor plan, comfy couches, startup offices, Rubik’s cubes and a bouldering wall up on the fourth floor of San Francisco’s Westfield Shopping Centre.
The idea is that those hawking e-commerce goods will be able to offer those products for shoppers to see, touch, and test in the real world. Westfield hopes this might help it figure out what the future of shopping could look like at the mall.
Some of the startups coworking, or participating in pop-up shops and other events include the product upvoting platform Product Hunt, crowdfunding site Indiegogo and personal shoe design startup Shoes of Prey. We took a peek inside on Bespoke’s opening day to find out more about this experiment in tech and shopping.
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The Founder And The Inferiority Complex

The Founder And The Inferiority Complex
I’m a serial entrepreneur with an inferiority complex. I was diagnosed by an overly cheerful psychiatrist about a year ago as I was getting help for anxiety and depression, which were a result of this underlying disorder. This is how I’ve overcome it.
To start, there’s a difference between a healthy dose of doubt and an actual inferiority complex. The former is like a wise internal counselor providing you with handy life advice, such as, “That movie star doesn’t know you, and probably doesn’t want you to ask them out while they’re having dinner.” The latter is like having a nervous, yappy dog for an adviser, telling you, “They’re going to hate that report you spent days on, and every comment is actually about your intelligence, or body odor. Or both. Probably both.”
An inferiority complex can rob you of healthy relationships and eat away at your accomplishments. If you don’t deal with an inferiority complex, as with many mental health issues, you can find yourself in a downward spiral of unproductive behavior and self-recrimination.
A couple of years ago, I wrote a post about taking down my startup Altsie. Altsie was based on a new film distribution model that used bars and restaurants to release movies, screening them on HD projectors. People had a good time, and the truth is, Altsie was doing fine, as startups go. There were a few glitches, as you would expect, but audiences were growing in several locations and the quality of my films was increasing.
You don’t fall so hard without doing some serious personal introspection, or at least you shouldn’t.
Mental health issues manifest themselves differently in every person. For me, people’s attention can be incredibly painful, so much so that I feel drawn to destroy things I’ve created just to avoid potential judgment. To say this can set me back at times is an understatement.
I subconsciously sabotaged Altsie, putting obstacles in my own way: an unnecessarily pushed deadline, a phone call not made, money spent when it should have been saved, and saved when it should have been spent. The yappy dog kept barking — it thought I picked horrible films and needed a better website — and all I wanted was for it to shut up. And it did, finally, when I pulled Altsie down.
Afterwards, I spent a lot of time thinking about what went wrong. Was it the business model? No, that could have been optimized, but it was working. The locations I picked? No, I was in some of the most popular locations in town. Was it me?
Yeah …. probably.
You don’t fall so hard without doing some serious personal introspection, or at least you shouldn’t. I went to see a psychologist to get some help. Kicking my feet up on the leather couch, we dug through the mess of my subconscious, and let me tell you, it wasn’t a pretty sight. Mostly, it was embarrassing to find how I had internalized so many excuses for why my life was the way it was—why I felt the way I did.
I didn’t discover some primordial trigger event that explained why I kept stealing defeat from the jaws of victory — there was no abuse in my past, I wasn’t mistreated. Life had presented me with challenges, but everyone has obstacles and challenges. It was the way I reacted to these challenges that tripped me up. I was told that I had anxiety and depression and by not dealing with these problems for years I was making the issues worse. Where had they started? Who knows, but they weren’t going away by themselves.
With a tiny ember of knowledge about my own psyche, I created another startup. I wasn’t aiming for the stars with this product, I just wanted to make something people could use. Part of me knew that I didn’t really have my hands around my own problems yet, but another part of me thought that if I just got the right idea — if I just built the right product — I could skip the part where I actually worked on myself. I knew I had issues with anxiety, which was a big step.
And that should be enough, right? I get it! Let’s move on. We launched our new site, however, and my problems came roaring back. This time I was so bound up I couldn’t even tell people about the service I spent months creating. I froze, berating myself for weeks on end because I couldn’t do the simplest promotions, and things languished. Growth is not always straightforward. I thought that coming to the realization that I was causing my own problems would be enough, but it wasn’t.
Around that time, I went to see a psychiatrist. For the uninitiated: in mental health, going from a psychologist to a psychiatrist is like leveling up. In his thick German accent, my new doctor broke the news. “You have za inferiority complex!” He seemed rather pleased with himself, and who wouldn’t at $200 an hour? But he was right — this is where my anxiety and depression originated.
Does the actual diagnoses matter? Yes and no. It’s helpful because it lets me see patterns in my behavior, but it’s no silver bullet. I still have to work on the root of the problem. Biologically speaking, it turns out my amygdala is that yappy dog, startled into a flight-or-fight response at inappropriate moments, like when people pay attention to my startup. It’s actually a pretty physical process, and can be controlled with the right training.
But without that training, over time it wears me down and causes me to react in unproductive ways. It shapes the way I interact with the world, and the way I interact shapes my environment, creating a recursive loop that sustains the underlying issue.
Before, unhealthy scenarios would play out in my head for hours, if not days. Now, I can step back and watch my brain react, but I don’t feed the fire.
At the advice of the psychiatrist I started taking Escitalopram Oxalate, a serotonin uptake inhibitor. Taking a drug was enlightening because it manually shut down a chorus of negative voices in my head (a thousand yappy dogs). Until I took those pills, I was unaware how loud and constant those voices were. The most important thing the medication did was make me realize I didn’t have to live with that constant criticism, and it opened my eyes to the fact that many people don’t. Unfortunately, the medication also dulled my creativity and intelligence, and since I use these talents to make a living, I regretfully stopped taking them. For the record, I’m not anti-drug. If I could find a perfect concoction, I would take it. Until then.
With medication off the table, I tried other things. I knew that physical exercise tempered some of the symptoms, so I went overboard, training for and competing in a half-Ironman. I lost 30 pounds and I began feeling better (except for the shin splints). I started meditating at both a local meditation center and at home.
These days I rise at 5:30 to sit quietly, listen to my own breathing and gain some control over my thoughts. These exercises have trained me to see my brain react in real-time. Before, unhealthy scenarios would play out in my head for hours, if not days. Now, I can step back and watch my brain react, but I don’t feed the fire. Slowly, the flames are dying. The dog is shutting up.
The last thing I did was dig through the kitchen cabinets, gather the liquor bottles up, and toss them out. I stopped drinking, a decision that was neither straightforward nor easy. I don’t have a drinking problem, but alcohol makes maintaining mental health a little harder, and life is already tricky enough. It was a difficult decision — I like drinking. But I’ve found that my moods are more stable now, and my sleep is better. Good God, though, I miss Scotch.
I’m still trying to get my hands around my problems, but it’s a long, slow process. That’s doesn’t mean I’m going to stop and wait for everything to be perfect. I’ve got more projects brewing, and I’m trying not to repeat my past mistakes.
What I’ve learned, in the end, is that you need to treat your mental health like a startup. You just need a minimal viable product to get out the gate, from there you can spend time optimizing. You may need to bring in some experts to advise you. You will definitely be weaker in some areas than others. But if I hadn’t tried and failed at startups, I wouldn’t have learned what I needed to do right the next time, both in business and in health.

The War On Crypto Terror

The War On Crypto Terror
Governments are scared of software. This month, the UK announced a law which will require “Google, Facebook and other internet giants” to “give British spies access to encrypted conversations”; the Commerce Department proposed to classify “intrusion software” as dual-use civilian/military technology; and the Justice Department claimed APIs should be copyrightable.
Everything old is new again. Remember the original Crypto Wars? Those were the days: when the US government categorized important software as dual-use munitions, and tried to impose government backdoors on all mobile communications.
But that was the nineties! Practically prehistory. (Although we’re still suffering from the hangover.) Whereas, in our bold and beautiful today, the US government is … categorizing important software as dual-use munitions, and trying to impose government backdoors on all mobile communications. See how far we’ve come?
It would be (relatively) nice if we could memorialize Crypto War I, win Crypto War II, and then settle into a nice relaxing Crypto Cold War fought by proxies. Alas, conflicts no longer work in that 20th-century way. Instead, the War On Crypto is like the War On Terror. Its target is a tactic, not an actual antagonist; so the war is endless, the enemy amorphous, and the victory conditions nonexistent. We have always been at war with Crypto.
…Even if our governments are often not entirely clear on what that means, exactly. Take the new “intrusion software” proposal from the Department of Commerce’s Bureau of Industry and Security (BIS). What exactly is “intrusion software”? So glad you asked:
Software “specially designed” or modified to avoid detection by `monitoring tools,’ or to defeat `protective countermeasures,’ of a computer or network-capable device, and performing any of the following:
(a) The extraction of data or information, from a computer or network-capable device, or the modification of system or user data; or
(b) The modification of the standard execution path of a program or process in order to allow the execution of externally provided instructions.
They go on to define “monitoring tools” and “protective countermeasures,” while explicitly excluding hypervisors, debuggers, reverse-engineering tools, DRM software (which is darkly hilarious) and asset trackers — but that’s still an extremely broad specification.
It’s really not uncommon to defeat “protective countermeasures” and “monitoring tools” for benevolent purposes. Jailbreaking your phone leaps to mind. Or SSH tunneling. What’s more, what if/when those monitoring tools and protective countermeasures were installed on your computer by someone else–a manufacturer, a carrier–and you’d like them removed?
And that’s without even considering the legitimate work of benevolent security researchers worldwide, and those who would claim the “bug bounties” that many major tech companies cheerfully offer to those who find security holes, because this improves their security immensely. The original intent may have been noble–to limit the sale of surveillance systems to oppressive states–but, as the EFF’s Nate Cardozo and Eva Galperin put it:
the rules [BIS] proposed this month are a disaster … an unworkably-broad set of controls … On its face, it appears that BIS has just proposed prohibiting the sharing of vulnerability research without a license … This is tremendously worrisome … the UK’s implementation does not attempt to control the export of exploits or “intrusion software” itself, while a plain reading of the BIS proposal seems to do just that. Similarly, the UK implementation doesn’t affect jailbreaking, fuzzing, or vulnerability reporting, while the BIS rules could be interpreted to include them …
An analogy: imagine that, while allegedly trying to crack down on murderous militias, the government also, in passing, outlawed your local Neighborhood Watch.
Meanwhile, as one tentacle of the government (theoretically) seeks to limit state surveillance, others are trying to broaden it enormously. Both the UK and US want Apple, Google, etc., to provide them with some flavor of “secure golden key” back door, so they can read encrypted messages on those platforms. (These are, of course, the same governments that have been quietly dragnetting their own citizens’ metadata for many years, unbeknownst to almost all, until Edward Snowden came along.)
All this in the name of a futile attempt to stuff the djinn of strong cryptography back into its lamp. Open-source strong crypto is has long been widely available for free, from eg Open Whisper Systems (a Snowden favorite.) Anyone who really wants to encrypt their communications, and has even a modicum of technical ability, can do so themselves without the auspices of Apple and Google et al. It’s math. You can’t ban math, and you shouldn’t try.
Compounding the recent technical sins of the US government, the Justice Department has come out swinging at the notion that APIs should be copyrightable. This is less of a dread threat to civil rights, but somehow even more irritating than the War On Crypto, because it’s so obviously wrong. It is flagrantly apparent to anyone who has ever written software–such as the judge who originally ruled on the case–that an API is firmly on the “idea” side of copyright law’s “idea/expression” dichotomy. I’m also an author, and hence a big fan of copyright, but this is absurd.
In the past I would have written this all off as simple bureaucratic fear of a changing world so prone to anti-hacker moral panics that you can be sentenced to three years in jail for incrementing a URL, or life without parole for running an online marketplace. But not any more. Now I think something more interesting is happening.
I suspect these creeping attempts to restrict software are a recognition of its increasingly crucial importance to the world order. It’s illustrative that Canada’s terrifying new anti-terror legislation has expanded the definition of “activity that undermines the security of Canada” to include “interference with the global information infrastructure.”
It seems to me the powers that be are, collectively, increasingly coming to the conclusion that the state monopoly on the use of violence must be extended to the use of certain kinds of software (such as, say, 0-days) while the remit of crony-capitalism intellectual property must be extended as far as software APIs. Are they wrong? Morally, yes. But practically, from a self-preservation standpoint, they could well be quite right.

The Unbundling Of Finance

The Unbundling Of Finance
In a world where everything is being unbundled, allowing consumers to pick and choose from things like television shows and college courses, financial services are becoming à la carte, as well. People, particularly millennials, are moving away from single monolithic banking institutions serving the majority of their financial needs to hand picking the specialized services that work for them.
According to a recent survey of 2,450 American and Canadian millennials, 46 percent say they don’t plan to stay with their current financial services company, and 67 percent indicate they are open to using non-financial services brands.

Breaking Down the Big Bank

In the past, customers had to turn to a big bank like Chase, Wells Fargo or Bank of America to provide top-to-bottom financial services — checking accounts, home loans, insurance and wealth management. However, fintech startups like Simple, Venmo and Robinhood are allowing people to take control of every individualized aspect of their finances.
Beyond giving consumers control and options, many of these services are removing the friction of engaging in financial transactions and lowering the barriers to entry. It’s now as simple as a few taps on a mobile device to pay bills, transfer money and manage investments.

Unbundling Your Personal Finances

A smorgasbord of fintech options means that you don’t have to put the entirety of your personal finances in the hands of one company.
Banking
Services like Simple and Moven aim to eliminate banks altogether by providing banking without any fees. Your account comes complete with a debit card that works at thousands of participating ATMs, budgeting tools and money-transferring capability. More of a draw for millennials who prefer mobile banking, these services still lack more complex banking capabilities, which have made them less popular than standard banks.
Simple had just 100,000 users when it was acquired by BBVA, a big bank based in Madrid, for $117 million. However, newcomers like BankMobile hope to specifically target millennials with their suite of mobile-friendly features.
What’s being disrupted: checking accounts, savings accounts and checks.
Money Transfer
Venmo, PayPal, Google Wallet and Snapcash are just a few of the services that allow consumers to pay for goods and services or transfer money to friends and family. PayPal currently has approximately 165 million active customer accounts while mobile payments, like those provided by PayPal’s subsidiary Venmo, are projected to hit $90 billion by the end of 2017.
What’s being disrupted: ATM cards, cash and checks.
Wealth Management
Take control of diversifying your portfolio rather than putting your cash in the hands of an investor. Acorns, Betterment, Wealthfront and Robinhood allow you to invest your money where you want it with free stock trades, portfolio management tools and automated investing based on your goals.
These so-called “robo-advisors” have become so popular, particularly among millennials, that large banks have been buying in as well. For example, Citi Ventures and Northwestern Mutual both have invested in Betterment.
What’s being disrupted: large investment corporations like Fidelity and Vanguard.

Unbundling Your Business’s Finances

Receiving Payments
Credit card companies sometimes charge astronomical fees in order for businesses to accept them. In 2005, a class-action lawsuit found that big credit card companies like Visa and MasterCard were even working together to set higher swipe fees.
Square and Braintree are some services that allow small businesses to seamlessly accept payments — via credit card, bank transfer and even bitcoin — with significantly lower fees and less red tape.
What’s being disrupted: credit card companies.
Business Loans
Anyone who has tried to get a loan for his or her small business knows what a nightmare it is. Services like CAN Capital and Kabbage provide business loans and merchant cash advances for small businesses while companies like Fundera match you with lenders that offer the most competitive rates for your needs.
What’s being disrupted: big banks with restrictive loan approval policies.
Payroll
Small businesses that can’t afford a dedicated accounting team can still ensure their employees and freelancers are getting paid on time and manage their benefits with affordable services like Zenefits, Wave and ZenPayroll.
What’s being disrupted: accounts payable departments.

Looking to the future

Fintech is finally coming of age, with global venture capital investment in fintech companies reaching over $2.8 billion in 2014, up significantly from $1.8 billion in 2013. This investment reflects a genuine desire for innovation from consumers that help them take control of their finances through technology.
As millennials mature, they will demand personal control and transparency of their financial interactions. From banking to insurance, any organization that doesn’t promote this new paradigm will likely not be around for the generations to follow.

This Week On The TC Gadgets Podcast: Google I/O

This Week On The TC Gadgets Podcast: Google I/O
Google I/O blasted us in the face with news, mostly around the new and improved Android M.
Greg was live at the Moscone Center in San Francisco the whole time and reported back to John and I (stuck in New York) as Matt continued the struggle with his microphone.
Google Now on Tap, which reads the text on the screen and taps Google Now for relevant info, has Greg jazzed, as does Google’s future in VR (exemplified with the revelation of the latest Cardboard VR Viewer).
We also chat about the new Offline Google Maps, Android Pay, Google Photos, and all the wonders of being at Google I/O in real life.
You’ll find all this and more on this week’s episode of the TC Gadgets Podcast featuring Jordan CrookGreg Kumparak and John Biggs.
We invite you to enjoy our weekly podcasts every Friday at 3 p.m. Eastern and noon Pacific. And feel free to check out the TechCrunch Gadgets Flipboard magazine right here.
Click here to download an MP3 of this show.
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Intro Music by Mendhoan.

Should Your Uber Driver Know Exactly Where You Are? They Could Soon

Should Your Uber Driver Know Exactly Where You Are? They Could Soon
“Where are you? I’m outside. Do you see me? Where should I meet you?” These kinds of frustrating calls with your Uber driver could be a thing of the past. Today Uber updated its privacy policy, saying it will now ask to pull people’s exact location while the app is running in the foreground or background.
You’ll have to decide whether that’s helpful or creepy.
Previously, Uber’s drivers could only see where the car was and where you dropped a pickup pin. The rider’s app would send Uber’s databases their location at certain times when they had the app open on their screen. But these intermittent, unpredictable bursts of location data aren’t nearly as fruitful. Now it can pull your current GPS location even after you’ve put away your phone or switched to another app unless you opt out.
Sure, it’s a little weird letting a strange driver know exactly where you are, possibly inside your own home. If they go nuts they could come find you. And Uber has a bit of a shaky reputation, given talk of the company smearing journalists that criticize it, tracking users by name with God View, and its CEO Travis Kalanick’s notoriously ruthless strategy. Drivers knowing when you tell a little white lie that “I’m on my way outside” when you’re actually still stationary inside your building might make things awkward.
But giving Uber your current coordinates could also save you time and money.
Screen Shot 2015-05-29 at 2.47.36 PM
Pulling location data could eliminate this loading screen
Initially, Uber tells me it plans to use precise location data from your GPS to pre-fetch info on where the closest cars are to you, rather than it taking a few seconds to load based on where your pin is set. That could get rid of this loading screen to the right. Not a game-changer, but obviously Uber wants to shave time off whenever it can. Uber confirms to me its app will still be usable if you refuse to share your exact location, similar to how it works now.
But the real opportunity would be if Uber gave your location to your driver when they’re coming to pick you up. They could tell if you’re just down the block from your requested pickup address and they should roll up to you. That could save you from wandering around in traffic trying to find them,having to walk a half-block frantically waving at your driver, or getting cancelled on because you couldn’t find them quickly enough.
shutterstock_70537582There are surely more optimizations Uber could do with precise location data. It could learn where the doors to buildings are by watching the route dots take on their way outside so it knows where drivers should pull up. Even if people haven’t requested rides yet, Uber could know that a bunch of its users are clustered at a location, like a concert, and divert more cars to wait nearby for when everyone floods out. There’s even the potential to use the data to fight fraud.
This is only the latest instance where we have to pick privacy or convenience.
It’s easy to confuse less privacy with less safety, and jump to worst-case scenarios. But we should all think calmly about whether giving Uber our location actually puts us more at risk. Ten years ago, the idea of our phones even having GPS might have sounded scary.
[Image Credit: Memo Angeles – Shutterstock]

Salesforce Acquires Smart Calendar Startup Tempo, App Will Shut Down On June 30

Salesforce Acquires Smart Calendar Startup Tempo, App Will Shut Down On June 30
My favorite calendar app, Tempo, just announced that it has been acquired by Salesforce.com.
The company was incubated by SRI International, the birthplace of the voice-powered (and Apple-acquired) assistant Siri. When Tempo launched two years ago, founder and CEO Raj Singh pitched it as another type of assistant that automatically brings up relevant information for your meetings.
For example, when I look up today’s meetings in the Tempo app, I can view a map of the location (plus look up nearby parking lots or call an Uber), bring up social media posts from everyone invited and read related emails and documents. If it’s a conference call, I can also join the call with one tap (a small touch, but one that makes dialing long conference pass codes much more bearable).
In an announcement on the Tempo website, the startup says:
We started Tempo to build an assistant for the mobile business professional. The calendar was the perfect interface, since it’s the beat of our professional lives. With Tempo, we created a smart calendar, using artificial intelligence to enable the next generation of mobile productivity. We brought context to your events and automated many of your tasks, just like a real-world assistant, saving our users millions of minutes.
Tempo goes on to say that joining Salesforce allows it to “continue our mission at a much larger scale.” Which makes sense — it’s easy to imagine Salesforce customers wanting this kind of smart calendar. In fact, some of the earliest additions to the app seemed tailored for sales and business users.
Whether that means Salesforce will use Tempo’s technology or is basically just hiring the Tempo team isn’t clear. Regardless, it’s bad news for users of the existing Tempo app, which is no longer accepting new users. The company plans to fully discontinue the app on June 30. (Tempo says that if you paid for the app, you can request a refund through Apple’s App Store.)
Tempo has raised $12.5 million in funding from investors, including Relay Ventures, Sierra Ventures, Mayfield Fund, Horizon Ventures, Qualcomm Ventures, SingTel Innov8, Miramar Venture Partner, Golden Venture Partners, Seavest Capital Partners and ENIAC Ventures.
Update: A Salesforce spokesperson confirmed the acquisition but declined to comment further.

The Silk Road’s Ross Ulbricht Sentenced To Life In Prison

The Silk Road’s Ross Ulbricht Sentenced To Life In Prison
The alleged owner of the Silk Road, an online black market, has been sentenced to life in prison by Judge Katherine B. Forrest in a Federal District Court in Manhattan. He was found guilty on seven charges, including engaging in a continuing criminal enterprise, narcotics conspiracy and money laundering.
The evidence found to link Ulbricht to the site was copious. Ulbricht owned the PGP email signature used to sign messages from the “Dread Pirate Roberts,” the Silk Road admin, and witnesses recall him asking for help for his “website where people can buy drugs.”
The minimum sentence in his case is 20 years, although the death penalty has been ruled out.
“He developed a blueprint for a new way to use the Internet to undermine the law and facilitate criminal transactions,” said the office of Preet Bharara, the United States attorney for the Southern District of New York, last week. Ulbricht, who called himself naive in a letter to the judge, plans to appeal the ruling.
Judge Forrest didn’t accept his self-assessment, instead calling Ulbricht’s Silk Road “a carefully planned life’s work.”
“It was your opus,” she said.

This Week On The TechCrunch Bitcoin Podcast: A Conversation With Nathaniel Popper

This Week On The TechCrunch Bitcoin Podcast: A Conversation With Nathaniel Popper
This week on TCBTC, TechCrunch’s bitcoin podcast, our own John Biggs sat down with Nathaniel Popper, author of Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money, a new book focused on the cryptocurrency.
The tome — you can read an excerpt here on TechCrunch — is a damn interesting read, according to Biggs who reviewed it for this publication.
This week’s show has it all: Good audio, analogies, and the Big Spreadsheet In The Sky. Your humble co-host is not on the show today, as I am currently battling the Boston sun to attend a family graduation.
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