3 Reasons Why Subscription Businesses Like Blue Apron and Trendy Butler Will Beat out Retail

The earliest subscription services such as newspapers and milk cartons have existed for decades without much attention. However, In the past five years, we have seen an explosion of innovative startups using the subscription business model to dominate their niche, beating out incumbents in the traditional retail sector.

This disruption is happening across a wide variety of industries, with over 2,000 business entities that operate under the subscription model in the United States alone. Meal kit subscription service Blue Apron went public earlier this year at a company valuation of nearly $2 billion. Birchbox, the New York-based startup that sells monthly boxes of beauty samples, is now valued at over $500 million. And Dollar Shave Club, the eccentric shaving brand, was acquired for over $1 billion, just to name a few success storiees.

Success achieved by early players in the industry has inspired a fresh wave of entrepreneurs to apply the subscription box model to new areas. Many of these hot startups are proving you can leverage big data and machine learning models to create extremely lucrative steady sources of recurring revenue.

One example of this is Trendy Butler, which offers a $65/month subscription box that comes with a combination of designer clothing (t-shirts, jackets, pants, etc.). The company, like many of today’s subscription services, uses an algorithm that collects your personal tastes and preferences (like sizes, styles, colors, etc.) to craft the perfect mix of outfits. It’s like Spotify, but for your clothing.

In analyzing the success of startups like Trendy Butler, I dug into why the subscription service model is likely to beat out conventional brick and mortar retail long term. Here are 3 reasons why:

1. Personalization at scale.

The assumption that entrepreneurs must operate under is that their customers are inherently trying to maximize their personal value while doing as little work as possible. In the case of shopping for clothing, we all want to look good, but many of us do not want, have the time, or frankly the talent to pick out the best outfits.

That’s what fueled Trendy Butler’s founders into realizing that we can use technology to completely rethink the way a shopping “experience” is delivered. Rather than randomly recommend products, predictive machine learning algorithms are used that take in a large data set (100+ points) of personalized information. As you expand the scope of the inputs to the algorithm, it gets smarter.

As recommendations are able to improve and become more personalized, the traditional brick and mortar way of doing business will simply not be able to keep up.

2. Predictable revenue sources.

Subscription business models also bring a sense of predictability that the retail industry has been lacking for decades. Since many stores cannot accurately forecast demand, there is often lots of waste, saturated product and overhead costs. These inefficiencies can often mean the difference between success and failure for many retailers.

Subscription companies circumvent these costs by doing much of the work behind the scenes. Additionally, most of if not all of their customers are paying monthly in exchange for a routine service/product. This is an extremely secure source of revenue that companies can develop over time

3. Establishing relationships with customers.

There is something special about opening your door to a new package even just once or twice a month. I personally love it when I receive a shipment from BarkBox and get to see my puppy light up with joy. The surprise in every subscription box is a unique opportunity for a company to delight their customers and provide a unique and memorable experience.

These touch points, which are rare in most other industries, develop customer loyalty. Over time, subscription box businesses tend to develop relationships with their customers because of the recurring nature of the interactions.

Retail is far more transactional as most of the instances are one time exchanges. With subscriptions, there is a constant need to interface with customers and continue the relationship.

As more and more companies infiltrate different industries, the only true competitive advantage startups will have will be in their ability to establish a strong and loyal community of backers. Building defensible relationships with customers is a great method of doing just that.

Time Warner CEO says AT&T merger needed to compete with internet titans

WASHINGTON (Reuters) – Time Warner (TWX.N) Chief Executive Jeff Bewkes on Wednesday defended his company’s planned merger with telecoms firm AT&T (T.N) as necessary to compete effectively for advertising with internet giants like Google and Facebook.

FILE PHOTO: Time Warner CEO Jeff Bewkes arrives ahead of arguments in the trial to determine if AT&T’s merger with Time Warner is legal under antitrust law at U.S. District Court in Washington, U.S., March 22, 2018. REUTERS/Aaron P. Bernstein

Bewkes told Judge Richard Leon, who will decide if the $84.5 billion deal may go forward, that the U.S. Justice Department was wrong to say that AT&T would be reluctant to license Time Warner’s TV and movie content to rivals, causing blackouts, in order to win over new customers to AT&T subsidiary DirecTV.

“I think it’s ridiculous,” said Bewkes, who has been CEO for more than 10 years. “If our channels are not in distribution we lose lots of money (from lost subscriptions and advertising).”

He said that “one percent, less than one percent, maybe two percent” of subscribers would drop their pay TV subscription because of a blackout, far below the 12 percent estimated by an economist for the government who testified earlier in the trial.

Bewkes argued it was in Time Warner’s best interest financially to license its television channels, which range from movies to CNN to sports, broadly online.

He said Time Warner had been hampered in innovating and advertising because it does not have the granular information about viewers held by pay TV and internet companies.

With digital advertising, Chevrolet, for example, can target car ads at people looking to actually buy a car, he said.

AT&T has said a key benefit of owning Time Warner is that it can take data about its 141 million U.S. wireless subscribers and 25 million video subscribers and marry it with Time Warner’s programming to enable advertisers to target TV ads.

Targeted TV ads, also known as addressable TV, have yet to go mainstream because they involve renegotiating carriage deals with programmers and distributors, said Brian Wieser, an analyst at Pivotal Research.

Targeted TV could represent more than $100 billion in revenue by 2030 for companies that offer it, according to an April Credit Suisse report, which called it “a largely overlooked benefit of the AT&T/Time Warner transaction.” The ads can be sold at triple the price of regular ads.

“The Google/Facebook duopoly has such a strong hold on the market, I think it’s important that there is healthy competition and that we aren’t just forced to invest in two places,” said Tim Villanueva, head of media strategy for Fetch, an ad agency focused on mobile, whose clients include eBay and Lululemon. He said he was interested in using the new platform.

Advertisers’ spending on TV ads in 2018 is expected to be around $70 billion, a 1.45 percent increase from three years ago, according to research firm eMarketer.

ALREADY INNOVATING?

In cross examination, Justice Department lawyer Claude Scott pointed to efforts that Time Warner was already making to move into targeted advertising and online distribution, including contracting with tech companies, an apparent attempt to call into question the need for the megamerger.

Scott referred to Bewkes’ compensation package, noting that he would be leaving the company when the deal closed and that he owned more than 2 million Time Warner shares. AT&T’s deal for Time Warner is about a 35 percent premium over the market price.

The trial has seen a parade of witnesses testifying about how the merger would affect them. Executives from smaller pay TV companies talked about how important it was to have access to Time Warner’s movies and television shows.

The trial, which began in mid-March in U.S. District Court in Washington, is expected to wrap up this month.

Reporting by Diane Bartz; Additional reporting by Jessica Toonkel; Editing by Bernadette Baum and Rosalba O’Brien

Electric Scooter Startups in Battle with San Francisco 

This is a guest post by Applico CTO and Principal Tri Tran. Prior to joining Applico, Tri was the co-founder and CEO of Munchery. 

After years of public battles with Uber, San Francisco has learned some valuable lessons. 

This time around, three electric scooter rental companies – Bird, Lime and Spin – are trying to roll out their service in downtown San Francisco. But the city is fighting back. As I happen to live in San Francisco and work in downtown, I’ve been able to witness this battle first hand.

Fast Rollout

As a startup entrepreneur, I quickly recognized the strategies that these three companies have taken to maximize business traction in as short a time as possible:

  • Flood a certain limited geography (such as downtown San Francisco) with a lot of scooters.
  • Get as many people as possible using them, very quickly. Once certain critical mass is reached, perhaps leverage them and their loyalty to fight off any regulations.
  • The default is seeking forgiveness afterward instead of seeking permission prior to operating. Let the city take any actions it needs to, assuming it’s historically very slow to react anyway.

I would not be surprised if these three companies also employ “fake” users and have them ride the scooters around town to create buzz, and thus word of mouth referral.

The City Fights Back

To my surprise, the city worked quickly and City Attorney Dennis Herrera issued cease-and-desist orders to all three companies.

The city wants the scooter companies to take actions to:

  1. Keep users from riding scooters on sidewalks
  2. Keep scooters from blocking sidewalks when parked
  3. Ensure that riders use helmets

It’s all in the name of public safety. Until then, the city will impound these scooters and may issues fines of a minimum of $125 for each violation. That is unless the companies can abate the problem within 30 days or prevail in an appeal hearing.

What Will Happen Next

It is not clear what these companies would do next, but here’s my take:

  • These three companies don’t have the operations to meet the city’s demand for the above described points
  • Limiting riders from sidewalks and ensuring unused scooters not block sidewalks is too tall of an order

Technically, it’s entirely possible to track riders on where they ride and whether they had left the scooters on sidewalks. They can even issue fines to riders who disobey such rules. But these rules would be a direct conflict to the convenience of ride-wherever and park-wherever, and thus would greatly reduce the attractiveness of using their scooters in the first place.

So what should they do? San Francisco has clearly established that it can move fast to regulate AND has created a repeatable process to impound these scooters.

Not complying will simply be too costly. More importantly, San Francisco also provides a model for all other cities to copy if/whenever the service rolls out to their cities. That’s bad news for Bird, Lime and Spin.

Ultimately, the service that these scooter companies provide is convenient, but not nearly as convenient as Uber was when it first arrived and replaced the painful taxi experience.

Additionally, the immediate public disruption of a horde of unfamiliar vehicles taking over sidewalks is much more apparent. Scootering on the streets has its own dangers as well when mixed with automobile traffic. The bike accident rate in San Francisco hasn’t changed much in the past few years. Relatively few people will brave their lives for that convenience.

Thus, these scooter companies will not have similar leverage nor political power from their small user bases to what Uber had when it fought against regulation attempts.

Based on the above, my prediction is that this service will go down into history as a fail, at least in major U.S. cities. It’s not necessarily a bad thing as these entrepreneurs will have learned a lot from the experience. They may find better, more sustainable businesses as a result. Cities are still grappling with what the future of transportation looks like, as are entrepreneurs. Scooters may not be it.

Majority of divisive Facebook ads bought by "suspicious groups" – study

(Reuters) – Most of the political ads about divisive issues that ran on Facebook Inc before the 2016 U.S. presidential election were sponsored by “suspicious groups” with no publicly available information about them, according to a study released on Monday and based on a database of five million ads on Facebook.

FILE PHOTO: Silhouettes of mobile users are seen next to a screen projection of Facebook logo in this picture illustration taken March 28, 2018. REUTERS/Dado Ruvic/Illustration/File photo

One in six of those groups was linked to Russia, according to a University of Wisconsin-Madison study here, and the identities of the rest of the 122 groups that are labeled “suspicious” are still unknown, an indication of the influence of “astroturf” or shell companies in U.S. politics.

Over a quarter of the suspicious ads mentioned Donald Trump or Hillary Clinton, two of the presidential candidates in the election, and 9 percent expressly advocated for or against individual candidates.

Most other ads deliberately avoided mentioning candidate names while still getting the message out by doing things like supporting policies pushed by candidates, Young Mie Kim, the lead researcher said. 

The researchers labeled suspicious ad-buyers as groups with pages that have been inactive, inaccessible, removed or banned by Facebook since the election and there was no information available publicly about them.

Project DATA, the research team, also found that voters were also disproportionately targeted in swing states like Wisconsin and Pennsylvania with ads that focused on issues like guns, immigration and race relations.

Facebook Chief Executive Officer Mark Zuckerberg has announced a crackdown on who buys ads about divisive issues, saying this month that the company would require every such advertiser to confirm their identity and location.

Reporting by Shariq Khan in Bengaluru; Editing by Bernard Orr

Renowned Gay Rights Lawyer Self-Immolates in Protest of Climate Policy

David Buckel, a lawyer who spent much of his life campaigning for gay rights, died after setting himself on fire in Brooklyn’s Prospect Park early Saturday. A pair of suicide notes from Buckel described the act as a “protest suicide” intended to “bring some attention to the need for expanded actions” on climate change policy and the use of fossil fuels.

According to eyewitnesses interviewed by the New York Daily News, Buckel’s burning body was near a main entrance to the park, highly visible to Saturday-morning joggers and cyclists. Witnesses described mistaking the burning body for a mannequin before emergency services arrived.

Buckel left two notes — one describing his suicide as a protest, and a second expanding on his motivations. In the second, a copy of which was sent to the Daily News, Buckel wrote that “my early death by fossil fuel reflects what we are doing to ourselves,” suggesting he had used gasoline or a similar fuel in his suicide.

“Polution ravages our planet, oozing inhabitability via air, soil, water and weather,” he wrote. “Our present grows more desperate, our future needs more than what we’ve been doing.”

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Recent years, and even recent days, have seen alarming signs that climate change is progressing even faster than scientists had previously projected. Climate scientists this week announced findings that an Atlantic Ocean current that helps equalize global temperatures has slowed drastically, in part because of human-caused climate change, potentially leading to disastrous climate shifts in Europe.

Meanwhile, U.S. political leadership has rolled back efforts to limit the carbon emissions that cause climate change. The Trump administration announced in June of last year that the U.S. would withdraw from the Paris climate accords. Earlier this month, Trump’s Environmental Protection Agency — led by the embattled, free-spending Scott Pruitt — announced that it would roll back fuel economy standards set under President Barack Obama.

Buckel, 60, had played a prominent role in the fight for gay rights in America for decades. He was the lead attorney in a lawsuit involving Brandon Teena, a transgender murder victim who was portrayed by Hilary Swank the film Boys Don’t Cry, as the Daily News reported.

He had led the push for gay marriage rights at Lambda Legal, a national organization devoted to LGBT issues. In a statement Saturday, Lambda executive Camilla Taylor described Buckel as a “brilliant legal visionary,” particularly praising his work on the cases Nabozny v. Podlesny, which in 1996 established that schools had a responsibility to protect gay students from harassment; and Lewis v. Harris, which helped expand gay marriage rights in the U.S.

In his suicide notes, Buckel compared his death to that of Tibetan monks who have committed suicide in a similar manner to protest Chinese rule over the region.

Apple Warns Employees to Stop Leaking Information to Media

Apple Inc. warned employees to stop leaking internal information on future plans and raised the specter of potential legal action and criminal charges, one of the most-aggressive moves by the world’s largest technology company to control information about its activities.

The Cupertino, California-based company said in a lengthy memo posted to its internal blog that it “caught 29 leakers,” last year and noted that 12 of those were arrested. “These people not only lose their jobs, they can face extreme difficulty finding employment elsewhere,” Apple added. The company declined to comment on Friday.

Apple outlined situations in which information was leaked to the media, including a meeting earlier this year where Apple’s software engineering head Craig Federighi told employees that some planned iPhone software features would be delayed. Apple also cited a yet-to-be-released software package that revealed details about the unreleased iPhone X and new Apple Watch.

Leaked information about a new product can negatively impact sales of current models, give rivals more time to begin on a competitive response, and lead to fewer sales when the new product launches, according to the memo. “We want the chance to tell our customers why the product is great, and not have that done poorly by someone else,” Greg Joswiak, an Apple product marketing executive, said in the memo.

The crackdown is part of broader and long-running attempts by Silicon Valley technology companies to track and limit what information their employees share publicly. Firms like Google and Facebook Inc. are pretty open with staff about their plans, but keep close tabs on their outside communications and sometime fire people when they find leaks.

Facebook executive Sheryl Sandberg last week talked about her disappointment with leakers. In 2016, Google fired an employee after the person shared internal posts criticizing an executive. The employee filed a lawsuit claiming their speech was protected under California law.

In messages to staff, tech companies sometimes conflate conversations employees are allowed to have, such as complaining about working conditions, with sharing trade secrets, said Chris Baker, an attorney with Baker Curtis and Schwartz, PC, who represents the fired Googler. “The overall broad definition of confidential information makes it so employees don’t say anything, even about issues they’re allowed to talk about,” he said. “That’s problematic.”

Apple is notoriously secretive about its product development. In 2012, Chief Executive Officer Tim Cook pledged to double down on keeping the company’s work under wraps. Despite that, the media has continued to report news on the firm to satisfy demand for information on a company that’s become a crucial part of investment portfolios, many of which support public retirement funds for teachers and other essential workers.

In 2017, Apple held a confidential meeting with employees in another bid to stop leaks. Since then, publications, including Bloomberg News, published details about the iPhone X, a new Apple TV video-streaming box, a new Apple Watch with LTE, the company’s upcoming augmented-reality headset, new iPad models, software enhancements, and details about the upcoming iPhones and AirPods headphones.

Here’s the memo:

Last month, Apple caught and fired the employee responsible for leaking details from an internal, confidential meeting about Apple’s software roadmap. Hundreds of software engineers were in attendance, and thousands more within the organization received details of its proceedings. One person betrayed their trust.

The employee who leaked the meeting to a reporter later told Apple investigators that he did it because he thought he wouldn’t be discovered. But people who leak — whether they’re Apple employees, contractors or suppliers — do get caught and they’re getting caught faster than ever.

In many cases, leakers don’t set out to leak. Instead, people who work for Apple are often targeted by press, analysts and bloggers who befriend them on professional and social networks like LinkedIn, Twitter and Facebook and begin to pry for information. While it may seem flattering to be approached, it’s important to remember that you’re getting played. The success of these outsiders is measured by obtaining Apple’s secrets from you and making them public. A scoop about an unreleased Apple product can generate massive traffic for a publication and financially benefit the blogger or reporter who broke it. But the Apple employee who leaks has everything to lose.

The impact of a leak goes far beyond the people who work on a project.

Leaking Apple’s work undermines everyone at Apple and the years they’ve invested in creating Apple products. “Thousands of people work tirelessly for months to deliver each major software release,” says UIKit lead Josh Shaffer, whose team’s work was part of the iOS 11 leak last fall. “Seeing it leak is devastating for all of us.”

The impact of a leak goes beyond the people who work on a particular project — it’s felt throughout the company. Leaked information about a new product can negatively impact sales of the current model; give rival companies more time to begin on a competitive response; and lead to fewer sales of that new product when it arrives. “We want the chance to tell our customers why the product is great, and not have that done poorly by someone else,” says Greg Joswiak of Product Marketing.

Investments by Apple have had an enormous impact on the company’s ability to identify and catch leakers. Just before last September’s special event, an employee leaked a link to the gold master of iOS 11 to the press, again believing he wouldn’t be caught. The unreleased OS detailed soon-to-be-announced software and hardware including iPhone X. Within days, the leaker was identified through an internal investigation and fired. Global Security’s digital forensics also helped catch several employees who were feeding confidential details about new products including iPhone X, iPad Pro and AirPods to a blogger at 9to5Mac.

Leakers in the supply chain are getting caught, too. Global Security has worked hand-in-hand with suppliers to prevent theft of Apple’s intellectual property as well as to identify individuals who try to exceed their access. They’ve also partnered with suppliers to identify vulnerabilities — both physical and technological — and ensure their security levels meet or exceed Apple’s expectations. These programs have nearly eliminated the theft of prototypes and products from factories, caught leakers and prevented many others from leaking in the first place.

Leakers do not simply lose their jobs at Apple. In some cases, they face jail time and massive fines for network intrusion and theft of trade secrets both classified as federal crimes. In 2017, Apple caught 29 leakers. 12 of those were arrested. Among those were Apple employees, contractors and some partners in Apple’s supply chain. These people not only lose their jobs, they can face extreme difficulty finding employment elsewhere. “The potential criminal consequences of leaking are real,” says Tom Moyer of Global Security, “and that can become part of your personal and professional identity forever.”

While they carry serious consequences, leaks are completely avoidable. They are the result of a decision by someone who may not have considered the impact of their actions. “Everyone comes to Apple to do the best work of their lives — work that matters and contributes to what all 135,000 people in this company are doing together,” says Joswiak. “The best way to honor those contributions is by not leaking.”

A Russian Court Just Ordered the Immediate Blocking of the Telegram Encrypted Messaging App

The encrypted messaging app Telegram must immediately be blocked in Russia, a Moscow court ruled Friday due to Telegram’s refusal to hand over the keys to its users’ conversations.

The Russian communications regulator, Roskomnadzor, told Telegram in mid-2017 that it had to hand over the keys to users’ encrypted conversations. Telegram, which was founded by Russian tech luminary Pavel Durov but operates from outside the country, refused to do so.

As with other modern encryption apps such as WhatsApp, the keys to Telegram users’ private conversations are held on their own devices, so the company running the service does not hold anything it can turn over.

The matter came to a head on Friday morning when, according to Russian news agency TASS, Telegram asked Moscow’s Tagansky court to delay hearings. Durov reportedly told his lawyers not to show up, so as “not to legitimize an outspoken farce by their presence.”

The court turned down the request, and swiftly ordered Telegram’s blocking. “The court ruled to satisfy the demand of Rosomnadzor,” judge Yulia Smolina said.

According to Vedomosti, Telegram now has a month to appeal the block. Telegram’s lawyer told the newspaper that the messaging service plans to do so.

Fortune has asked Telegram for comment, but had received none at the time of writing.

The case has echoes of WhatsApp’s repeated blockage in Brazil, where prosecutors were frustrated by their inability to access the private messages of a suspect in a major drug case.

Telegram has also frequently hit the headlines over its use by terrorists, although that is more to do with its unencrypted “channels” feature, through which people can broadcast their opinions to followers.

Luminar's New Lidar Could Dominate the Self-Driving Car Market

Self-driving cars are nearly ready for primetime, and so are the laser sensors that help them see the world. Lidar, which builds a 3-D map of a car’s surroundings by firing millions of laser points a second and measuring how long they take to bounce back, has been in development since 2005, when a guy named Dave Hall made one for the Darpa Grand Challenge, an autonomous vehicle contest. In the decade-plus since then, if you wanted a lidar for your self-driving car, Velodyne was your only choice.

Yet Velodyne’s one-time monopoly has eroded in recent years, as dozens of lidar startups came to life, and robocar makers found their own way. Google’s sister company Waymo put years and millions of dollars into developing a proprietary system. General Motors bought a lidar startup called Strobe. Argo AI, which is making a robo-driving system for Ford, acquired one called Princeton Lightwave.

The latest challenger is Luminar, the Silicon Valley-based startup that already has a deal with Toyota, plus three more manufacturers it declines to name. Today, Luminar is announcing the introduction of its newest lidar unit, with a 120-degree field of view (that’s enough to see what’s ahead of the car, but you’d need a couple to get a 360-degree view). And after a first production run of just 100 units, it’s ready to start cranking them out by the thousand—more than enough to meet today’s demand. And maybe, enough to make self-driving cars cheaper for everybody.

“By the end of this year, we’ll have enough capacity to equip pretty much every autonomous test and development vehicle on the road, globally,” says CEO Austin Russell, who dropped out of Stanford in 2012 when he was 17 years old to make Luminar his full-time gig. “This is no longer being built by optics PhDs in a handcrafted process. This is a proper automotive serial product.”

In its 136,000 square foot facility in Orlando (an optics industry hub), the company has dropped the build time for a single unit from about a day, to eight minutes. In the past year, it has doubled its staff, to about 350. It hired Motorola product guru Jason Wojack to head its hardware team. Alejandro Garcia came over from major auto industry supplier Harman to run manufacturing.

Luminar is playing catch up here. Last year, Velodyne opened a “megafactory” to ramp up production and built 10,000 laser sensors. President Marta Hall says it could build a million a year if it wanted to. But the ability to build lots of lidars isn’t enough to win here.

Lidar is a fantastic sensor—it’s more precise than radar and works in more conditions than cameras do—but it’s way too expensive. Velodyne’s top shelf unit, which sees in 360 degrees with a 300-meter range, costs about $75,000 a piece. Buying in bulk will drop that cost, but that’s still a hard price tag to bear, even on a fleet vehicle that can amortize costs over years of service.

At its Orlando production facility, Luminar can now make a lidar unit in about eight minutes—it used to take a day.

Luminar

Luminar made the cost question harder by making its lidar’s receiver (the that acts like your eye’s retina) out of indium gallium arsenide (InGaAs) instead of silicon. Why is this important? Well, to make your lidar “see” farther, you have to fire more powerful pulses of light. They have to be powerful so they have the strength to hit faraway objects and make it all the way back. Most lidars use lasers at the 905 nanometer wavelength. That’s invisible to humans. But if it hits an actual eyeball, like yours, with enough power, it can damage the retina. If you want to fire more powerful pulses (and have your lidar “see” farther) without blinding actual people, you can use the 1550 nanometer wavelength, which is further into the infrared part of the spectrum, and thus can’t penetrate a human eyeball.

Which brings us back to silicon. Receivers made of silicon, which is cheap, can’t detect light at the 1550 wavelength. InGaAs can, but it’s far more expensive. So the industry standard is to use silicon, run at 905 nanometers, and accept you just can’t send your lasers all that far.

But Russell insisted on the extra power, which meant 1550 nanometers, which meant using a receiver made of InGaAs. As a result, he can fire pulses 40 times more powerful than what his competitors shoot, so his lidar can see objects extremely dark objects—like, the kind that can absorb 95 percent of light—even from 250 meters away. He says no one’s lidar can see so well at such distance.

But seriously, InGaAs, as the French say, coute la peus des fesses*. A receiver array about the size of a big potato chip can cost tens of thousands of dollars, Russell says. So Luminar built its own. The result, now in its seventh iteration, is about the size of a strawberry seed. (The entire unit, including the laser and accompanying electronics, is about half a foot square and three inches deep.) That includes the chip that calculates, down to the second, how long the photon has been out in the world. It costs a piddling $3, obliterating Luminar’s cost concerns while allowing for that extra range and resolution. Russell wouldn’t reveal an exact price for the lidar as a whole, but says his customers are quite pleased. And when they’re finally ready to start offering you rides in their robo-taxis, maybe they won’t have to charge you as much for that trip home from the bar.

Luminar’s R&D team also managed to increase the “dynamic range” of the receiver. Just like how your pupils dilate based on light conditions, lidar receivers are tuned to pick up pulses of a certain strength (the farther a photon goes before bouncing back, the weaker it becomes). If you set it to look for faint signals and it gets hit by a much stronger pulse, you can fry the receiver. “We have countless blown-up detectors,” Russell says. The current unit can handle a much greater range of pulse strengths, without even a wisp of smoke.

Meanwhile, Luminar’s already working on the next generation sensor. That one, Russell says, will be affordable enough to put in consumer cars—making the gift of sight little more than a commodity.


Rolling Toward Ready

Mexico data protection body to investigate possible links to Cambridge Analytica

MEXICO CITY (Reuters) – Mexico’s data protection body said on Monday it had opened an investigation into whether companies possibly linked to political consultancy Cambridge Analytica broke the country’s data protection laws.

The nameplate of political consultancy, Cambridge Analytica, is seen in central London, Britain March 21, 2018. REUTERS/Henry Nicholls

INAI, the transparency and data protection regulator, said it was looking at Mexican companies that worked with cellphone app Pig.gi, which gives users free top-ups in exchange for receiving ads and completing surveys.

The app cut ties with Cambridge Analytica in Mexico after the British company was accused by a whistleblower of improperly accessing data to target U.S. and British voters in recent elections.

Pig.gi, which has 1 million downloads in Mexico and Colombia combined, said it had shared results of two election polls of Mexican users with the consultancy and other partners.

Cambridge Analytica has denied Facebook data was used to help to build profiles on American voters and build support for Donald Trump in the 2016 U.S. presidential election.

Reporting by Christine Murray and Lizbeth Diaz; Editing by Michael Perry

Groups Allege YouTube Is Violating Law That Protects Kids

A coalition of more than 20 child-health, privacy, and consumer groups is asking the Federal Trade Commission to investigate whether YouTube is violating a federal law designed to protect children on the internet.

The groups are expected to file a complaint with the FTC on Monday. The relevant federal law, the Children’s Online Privacy Protection Act, or COPPA, requires website operators to obtain parents’ permission when collecting personal data about children younger than 13.

The complaint claims that a significant portion of popular content on YouTube is designed for kids, whose personal information—including IP address, geolocation, and persistent identifiers used to track users across sites—is unlawfully collected by Google and then used to target ads.

The complaint follows reports that some YouTube creators are targeting kids with disturbing videos, including some of kids in abusive situations. On Friday, BuzzFeed reported that the company will offer a safer, human-curated option for YouTube Kids, a version of the site for users under 13.

But the complaint to the FTC argues that most children aren’t watching YouTube Kids, which launched in 2015. They’re watching the same YouTube as the rest of us — and the company is aware of that, says Josh Golin, executive director of the Center of a Commercial Free Childhood, a nonprofit behind the complaint. The company could have moved popular children’s content like Peppa Pig or Sesame Street to YouTube Kids, says Golin, rather than leave videos where “kids are going to be exposed to data collection practices and be one click away from really disturbing content for children.” Human curation may be a good first step, “but changes to the YouTube Kids app do not absolve Google of its responsibilities to the millions of children that use the main YouTube site,” Golin says.

An ad for Barbie appearing on a child-directed video on YouTube’s mobile app from October 2017.

YouTube

A 2017 survey conducted by a market research firm specializing in children and families called YouTube “the most powerful brand in kids’ lives,” with 80 percent of American kids ages 6 to 12 using YouTube daily. A survey from October by Common Sense, another nonprofit group that signed the complaint, found that 71 percent of parents said their children watched YouTube’s website or app, whereas only 24 percent used the YouTube Kids app.

In a statement, a spokesperson for YouTube said, “While we haven’t received the complaint, protecting kids and families has always been a top priority for us. We will read the complaint thoroughly and evaluate if there are things we can do to improve. Because YouTube is not for children, we’ve invested significantly in the creation of the YouTube Kids app to offer an alternative specifically designed for children.”

YouTube’s terms tell kids under 13 years old not to use the service, so Google could argue that kids are watching with their parents and permission is implied. However anyone can watch videos on YouTube without an account. The complaint points out that kids often watch on a mobile device, likely by themselves. In 2015, the company said it launched YouTube Kids as a mobile app “because of this reality – that we’re all familiar with – 75 percent of kids between birth and the age of 8 have access to a mobile device and more than half of kids prefer to watch content videos on a mobile device or a tablet.” COPPA applies to websites that have “actual knowledge” that they are collecting or maintaining kids’ personal information, even if the collection is unintentional.

The complaint claims that YouTube’s advertising practices suggest that executives know children are watching. For example, Google Preferred, a premium service that helps advertisers place their ads in top videos on YouTube’s main site, includes the category “Parenting & Family,” which features channels like ChuChuTV Nursery Rhymes & Kids Song, which has more than 15 million subscribers.

Targeting kids can be lucrative. The complaint points to a popular YouTube channel called Ryan ToysReview, in which a 6 year old reviews toys. The site, which has more than 20 billion views, generated $11 million in revenue last year, according to Forbes.

Targeting Kids

  • After criticism about advertising to kids, YouTube Kids launched an ad-free version, available to parents, for a monthly subscription.
  • Facebook followed YouTube’s lead, launching an ad-free messaging app for kids as young as 6 years old.
  • Most of the experts who vetted Messenger Kids were paid by Facebook