Gaming hardware maker Razer, which went public in a big IPO in Hong Kong last year, is doubling down on payments after it announced a deal to acquire MOL, a company that offers online and offline payments in Southeast Asia.
Razer made an initial $20 million investment in MOL last June to supercharge its zGold virtual credit program for gamers by allowing them to buy using MOL’s online service or its offline, over-the-counter network of retailers that include 7-Eleven. Now Razer aims to gobble up MOL in full by acquiring the remaining 65 percent, which will allow it to grow its alternative revenue streams by pushing fully into payment services by merging MOL’s virtual payment platform with zGold.
It’s worth noting that the deal is an intention to buy MOL. It’ll be subject to review from shareholders, but Razer said it has already secured support from major shareholders. The transaction gives MOL, which delisted from the Nasdaq in 2016 following a bumpy two-year spell, the same $100 million valuation it held for the initial Razer investment.
The acquisition will boost Razer’s recently announced online games store which rivals services like Steam, but first and foremost it is focused on growing the firm’s share of online sales in Southeast Asia’s growing e-commerce and payment space. To that end, Razer recently launched a store on Lazada, the Alibaba-owned e-commerce service in Southeast Asia, something that Apple did earlier this year.
“We are already the number one gaming brand in the U.S., Europe and China, but Southeast Asia is still nascent and a very small part of our business,”Razer CEO and co-founder Min-Liang Tan told TechCrunch in an interview “We see this [deal with MOL] as stuff we can do immediately.”
Tan said that, in particular, he said working with MOL saw revenue grow “dramatically” while MOL itself surpassed $1.1 billion in GMV across its payment network last year.
“This is the perfect opportunity for us to not just be a minority shareholder, but to combine the business and continue scaling from here,” he added, reiterating that he believes the deal gives Razer the world’s largest virtual credit system for gamers based on user registrations. “That’s a huge opportunity for us.”
Away from its core business, the push will also help Razer in Singapore where it has applied to develop a unified e-payment system that would be used across the country, which is the Razer CEO home nation.
Tan said he has kept an ongoing dialogue with regulators, adding that he believes this deal “makes it clear that we don’t just have the scale, we also have the right technology.”
Beyond the Singapore opportunity, where Razer is a new entrant and thus considered an outsider for the license, Tan said the focus is on enabling cash-less payments right across Southeast Asia.
The blockchain has been widely touted as a building block that can help develop financial inclusion platforms in emerging markets, but for now Razer isn’t talking about whether it will hop on that wagon.
“We are excited about blockchain and the technology it brings, but we don’t have anything to comment on at this juncture,” Tan said.
The Razer chief was more vocal on the company’s wider goal, which he said is to develop “an entire ecosystem for our games partners.” The goal is to offset Razer’s impressive hardware sales business by constructed services that span game payments, game distribution and analytics on gamers and their behavior.
That optimism isn’t shared right now by investors in Hong Kong, however, which lured Razer as part of a push to attract more tech listings. Despite a surge when it when public in November, the stock traded at an all-time low of HK$2.44 today, down from its initial list price of HK$3.88.
Tan said he is focused on growing the business and its services regardless, but he did admit that there’s a need for “the Hong Kong investment public to be more educated on tech companies.”
In an interesting twist, Facebook is being sued in the UK for defamation by consumer advice personality, Martin Lewis, who says his face and name have been repeatedly used on fake adverts distributed on the social media giant’s platform.
Lewis, who founded the popular MoneySavingExpert.com tips website, says Facebook has failed to stop the fake ads despite repeat complaints and action on his part, thereby — he contends — tarnishing his reputation and causing victims to be lured into costly scams.
“It is consistent, it is repeated. Other companies such as Outbrain who have run these adverts have taken them down. What is particularly pernicious about Facebook is that it says the onus is on me, so I have spent time and effort and stress repeatedly to have them taken down,” Lewis told The Guardian.
“It is facilitating scams on a constant basis in a morally repugnant way. If Mark Zuckerburg wants to be the champion of moral causes, then he needs to stop its company doing this.”
In a blog post Lewis also argues it should not be difficult for Facebook — “a leader in face and text recognition” — to prevent scammers from misappropriating his image.
“I don’t do adverts. I’ve told Facebook that. Any ad with my picture or name in is without my permission. I’ve asked it not to publish them, or at least to check their legitimacy with me before publishing. This shouldn’t be difficult,” he writes. “Yet it simply continues to repeatedly publish these adverts and then relies on me to report them, once the damage has been done.”
“Enough is enough. I’ve been fighting for over a year to stop Facebook letting scammers use my name and face to rip off vulnerable people – yet it continues. I feel sick each time I hear of another victim being conned because of trust they wrongly thought they were placing in me. One lady had over £100,000 taken from her,” he adds.
Some of the fake ads appear to be related to cryptocurrency scams — linking through to fake news articles promising “revolutionary Bitcoin home-based opportunity”.
So the scammers look to be using the same playbook as the Macedonian teens who, in 2016, concocted fake news stories about US politics to generate a mint in ad clicks — also relying on Facebook’s platform to distribute their fakes and scale the scam.
In January Facebook revised its ads policy to specifically ban cryptocurrency, binary options and initial coin offerings. But as Lewis’ samples show, the scammers are circumventing this prohibition with ease — using Lewis’ image to drive unwitting clicks to a secondary offsite layer of fake news articles that directly push people towards crypto scams.
It would appear that Facebook does nothing to verify the sites to which ads on its platform are directing its users, just as it does not appear to proactive police whether ad creative is legal — at least unless nudity is involved.
Here’s one sample fake ad that Lewis highlights:
And here’s the fake news article it links to — touting a “revolutionary” Bitcoin opportunity, in a news article style mocked up to look like the Daily Mirror newspaper…
The lawsuit is a personal action by Lewis who is seeking exemplary damages in the high court. He says he’s not looking to profit himself — saying he would donate any winnings to charities that aim to combat fraud. Rather he says he’s taking the action in the hopes the publicity will spotlight the problem and force Facebook to stamp out fake ads.
In a statement, Mark Lewis of the law firm Seddons, which Lewis has engaged for the action, said: “Facebook is not above the law – it cannot hide outside the UK and think that it is untouchable. Exemplary damages are being sought. This means we will ask the court to ensure they are substantial enough that Facebook can’t simply see paying out damages as just the ‘cost of business’ and carry on regardless. It needs to be shown that the price of causing misery is very high.”
In a response statement to the suit, a Facebook spokesperson told us: “We do not allow adverts which are misleading or false on Facebook and have explained to Martin Lewis that he should report any adverts that infringe his rights and they will be removed. We are in direct contact with his team, offering to help and promptly investigating their requests, and only last week confirmed that several adverts and accounts that violated our Advertising Policies had been taken down.”
Facebook’s ad guidelines do indeed prohibit ads that contain “deceptive, false, or misleading content, including deceptive claims, offers, or business practices” — and, as noted above, they also specifically prohibit cryptocurrency-related ads.
But, as is increasingly evident where big tech platforms are concerned, meaningful enforcement of existing policies is what’s sorely lacking.
The social behemoth claims to have invested significant resources in its ad review program — which includes both automated and manual review of ads. Though it also relies on users reporting problem content, thereby shifting the burden of actively policing content its systems are algorithmically distributing and monetizing (at massive scale) onto individual users (who are, by the by, not being paid for all this content review labor… hmmm… ).
In Lewis’ case the burden is clearly also highly personal, given the fake ads are not just dodgy content but are directly misappropriating his image and name in an attempt to sell a scam.
“On a personal note, as well as the huge amount of time, stress and effort it takes to continually combat these scams, this whole episode has been extremely depressing – to see my reputation besmirched by such a big company, out of an unending greed to keep raking in its ad cash,” he also writes.
The sheer scale of Facebook’s platform — which now has more than 2BN active users globally — contrasts awkwardly with the far smaller number of people the company employs for content moderation tasks.
And unsurprisingly, given that huge discrepancy, Facebook has been facing increasing pressure over various types of problem content in recent years — from Kremlin propaganda to hate speech in Myanmar.
Last year it told US lawmakers it would be increasing the number of staff working on safety and security issues from 10,000 to 20,000 by the end of this year. Which is still a tiny drop in the ocean of content distributed daily on its platform. We’ve asked how many people work in Facebook’s ad review team specifically and will update this post with any response.
Given the sheer scale of content continuously generated by a 2BN+ user-base, combined with a platform structure that typically allows for instant uploads, a truly robust enforcement of Facebook’s own policies is going to require legislative intervention.
And, in the meanwhile, Facebook operating a policy that’s essentially unenforceable risks looking intentional — given how much profit the company continues to generate by being able to claim it’s just a platform, rather than be ruled like a publisher.
India’s technology industry is bracing itself for the next era of e-commerce warfare, which looks set to be waged and bankrolled by two gigantic corporations located halfway across the world: Amazon and Walmart.
Amazon is already deeply committed to the country, where it has pledged to deploy over $5 billion to grow its business, and now U.S. rival Walmart is said to be inching closer to a deal to buy Flipkart .
Bloomberg reports that Walmart is poised to acquire 60-80 percent of the company for $12 billion. The deal could potentially value Flipkart as high a $20 billion, which would be a major jump on the $12 billion valuation it secured last year when it landed a $1.4 billion investment from Microsoft, Tencent and eBay.
Amazon was said to have made a last-minute move to conduct talks with Flipkart, but it seems now that there is intent for Walmart to take the deal, with Flipkart’s founders said to be in favor. Bloomberg cautioned, however, that there are still unresolved issues — including which shareholders will sell, how much they will sell, and whether the Flipkart leadership remains — while there’s also no guarantee that the talks don’t break down.
That said, it is reported that Tiger Global plans to sell nearly all of its 20 percent share and SoftBank will offload “a substantial part” of its 20-percent-plus holding.
At stake is a growing online sales market as more of India’s 1.4 billion population comes online for the first time.
India is tipped to reach 500 million internet users by June 2018, according to a report from the Internet and Mobile Association of India (IAMAI) and Kantar IMRB. That’s up from 481 million six months prior, but internet penetration in rural areas is at just 20 percent compared with 65 percent in urban India. That rush online has led some analysts to predict big gains for online retail, with Morgan Stanley forecasting that 30 percent annual growth in GMV will take India’s e-commerce market to $200 billion by 2026.
Walmart’s increased focus on India comes after the retailer exited the Chinese market in 2016, selling its Yihaodian service — which it first backed in 2011 — to Alibaba rival JD.com. That deal also saw Walmart work closely with JD.com, essentially using the company as a storefront to reaching Chinese consumers.
China exit complete, it was then linked with an investment in Flipkart last year. Fast forward to today and it is poised to take a very major role in India via Flipkart, which most reports indicate remains India’s top e-commerce firm despite Amazon pushing it hard.
Amazon itself is keen to diversify. The company recently announced it has more than 100 million Prime members worldwide, having added “more members in India in its first year than any previous geography in Amazon’s history” thanks to an array of promotional offers run with local companies, including telecom operators.
Now the firm is aiming outside of its core e-commerce focus, with Amit Agarwal — the head of Amazon India — telling Reuters that he expects groceries and household products to account for half of its revenue in the country within the next five years.
Outside of Flipkart and Amazon, Alibaba has invested considerably in Paytm, which specializes in mobile payments but also includes e-commerce, digital banking and has plans for gaming. Long-time Alibaba ally SoftBank is also backing the company’s Paytm Mall effort — having led a recent $450 million investment — but the main battle looks like being Amazon and Walmart-Flipkart if things go as they are reported to be headed.
Walmart declined to comment. Flipkart did not respond to a request for comment for this story.
Slack exposed the demand for a dead-simple internal communications tool, which has inspired a wave of startups trying to pick apart the rest of a company’s daily activities — including Slite, which hopes to take on internal notes with a fresh round of new capital.
Slite is more or less an attempt at a replacement for a Google Doc or something in Dropbox Paper that is sprawling and getting a little out of control. An employee might create a Slite note like an onboarding manual or an internal contact list, and the hope is to replace the outdated internal wiki and offer employees a hub where they can either go and start stringing together important information, or find it right away. The company today said it has raised $4.4 million in a new seed funding round led by Index Ventures after coming out of Y Combinator’s 2018 winter class. Ari Helgason is joining Slite’s board of directors as part of the deal.
“We now have to develop this product enough to show we can actually replace large amounts of things,” co-founder Christophe Pasquier said. “Today we have more than 300 active teams, and we have to show that we can make it scale. In the short term is just we’re replacing Google Docs because these tools ahven’t evolved and we’re bringing something super fresh. The longer-term vision of really bringing all the information that has value from a team and becoming this single source of truth for teams.”
Slite tracks permissions and changes to the notes in order to allow companies to do a better job of maintaining them, rather than sharing around links and having different people jump in and make changes. The part about sharing links is one in particular that stung for Pasquier, as even larger companies can have issues with employees asking in Slack what policies are — or even for links to parts of the internal wiki where that important information is buried.
Getting there certainly won’t be easy. Companies like Dropbox continuing to invest in these kinds of collaborative note-taking tools — that could easily evolve into internal hubs of information. And as Pasquier tries to liken the development arc to Slack, which showed employees wanted some more seamless tool for communication, that company is also working on making its search tools smarter, like helping employees find the right person to ask a question. It doesn’t look like an asynchronous notes tool just yet, but if all the information is somewhere in Slack already, a smart search tool may be the only thing necessary to find all that information.
We’re delighted to announce that Vitalik Buterin, the creator of Ethereum and a true blockchain visionary, is confirmed to speak at our upcoming TC Sessions: Blockchain event.
Blockchain is the most disruptive new technology in technology today, and we’re excited to bring one of its most influential voices to our first show dedicated entirely to the technology and its future. The event takes place in the Swiss city of Zug — which is widely known as “Crypto Valley” — on July 6 and it will bring together top figures from the blockchain space, developer community and business and startup worlds.
You can get your hands on tickets now — they’re priced at 495 Swiss Francs, or around $510 — from the event website here.
Vitalik Buterin needs little introduction.
The 24-year-old whizzkid created Ethereum, which has taken the tech world by storm to become the second most valuable cryptocurrency (behind Bitcoin). More than a maker of crypto wealth, Buterin envisaged his creation as a platform that developers and companies use to develop decentralized systems and applications that take us into a new era of the internet. Proposed benefits include resistance to censorship, new types of monetization/sustainability, more secure management of data and more.
Speaking at TechCrunch Disrupt in San Francisco last September, Buterin explained how he sees Ethereum’s future with a prediction that it could reach the kind of scale that Visa enjoys today in “a couple of years.”
Topics up for discussion with Buterin at TC Sessions: Blockchain include how he and others are working to scale Ethereum, the growth of the Ethereum community, its potential for the wider business world and much, much more.
.@VitalikButerin explains Ethereum in his own words #TCDisrupt pic.twitter.com/oFOuYfTNWg
— TechCrunch (@TechCrunch) September 18, 2017
Other prominent speakers already confirmed for the event include:
Roham Gharegozlou, the founder of smash-hit blockchain game CryptoKitties
Brian Behlendorf, executive director of the Hyperledger Project
Leanne Kemp, founder and CEO of Everledger
Jun Hasegawa, CEO and founder of Omise and OmiseGo
Mona El Isa, CEO and co-founder of Melonport
Colin Hanna, associate at Balderton Capital
Galia Benartzi, co-founder and head of Business Development at Bancor
Gert Sylvest, co-founder of Tradeshift and GM of Tradeshift Frontiers,
The city is known as “Crypto Valley” because of the numerous blockchain companies that have moved there to capitalize on Zug’s openness to blockchain experiments and its forward-thinking approach to regulation. Put simply: There’s no better place to host TechCrunch’s first dedicated blockchain event.
We’ll be announcing even more speakers soon, so head over to the event website to get your hands on a ticket for TC Sessions: Blockchain.
If you’re interested in sponsoring the event, please contact us via this link.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.
Amazon Web Services announced Blockchain Templates late last week, a “blockchain -as-a-service” offering that competes with similar products from Oracle and IBM. The launch shows how eager the biggest enterprise players are to get ahead in the blockchain game even if their customers are still trying to pinpoint exactly what blockchain can do for them (and some investors are starting to temper their initial excitement).
In a blog post about how to use Blockchain Templates, AWS vice president and chief evangelist Jeff Barr acknowledged the lack of clarity by referencing a 1970s “Saturday Night Live” sketch about Shimmer Floor Wax, a floor polish that is also a non-dairy dessert topping.
“Some of the people that I talk to see blockchains as the foundation of a new monetary system and a way to faciliate international payments. Others see blockchains as a distributed ledger and immutable data source that can be applied to logistics, supply chain, land registration, crowdfunding and other use cases,” he wrote. “Either way, it’s clear that there are a lot of intriguing possibilities and we are working to help our customers use this technology more effectively.
AWS Blockchain Templates give AWS users working on blockchain apps a faster way to set up Ethereum or Hyperledger Fabric networks. Its launch comes six months after Oracle unveiled its cloud service built on the open-source Hyperledger Fabric project during Oracle OpenWorld and about a year after IBM announced its own Hyperledger-based blockchain-as-a-service offering.
Another new competitor in the BaaS market is Huawei, which announced its Blockchain Service, also built on Hyperledger, last week during its analyst conference in Shenzhen. It joins other Chinese tech companies, including Baidu and Tencent, that already had blockchain platforms.
Responding to the talent shortage and increasing demand facing the cybersecurity industry, Udacity said that it is now developing a new nanodegree focused on security.
Launched at the security industry’s RSA Conference, details about the new program (including potential partners) are still sketchy (there’s little available on the information page on the Udacity’s website about the program).
The announcement at RSA actually included an active call for partners for the security program.
To the leaders in this field, we are extending the opportunity to join us. Your organization, together with Udacity, can help shape the future of Cybersecurity training, and nurture the world’s most advanced pipeline of highly-qualified Cybersecurity talent.
Through our partnership, your organization will have early access to this incredible talent pipeline, and the opportunity to hire those experts who have trained on the curriculum you helped to build.
As we consider the technological landscape of the future, we continually seek opportunities to apply the world’s most transformative technologies to the world’s most pressing challenges, and to educate, develop, and nurture the talent that will solve these challenges. We see this kind of opportunity in the field of Cybersecurity, and we look forward to building this program in partnership with the world’s leading Cybersecurity experts.
Your expertise and experience will inform the development of our curriculum. Your subject matter experts will provide vital leadership and deliver valuable knowledge to our students. Through the establishment of scholarships, you will help ensure maximum opportunity for the most deserving and qualified students across the globe.
Announcing the new program on the company’s blog, Udacity cited reports from the Department of Labor indicating that job opportunities for “information security analysts is projected to grow 28 percent from 2016 to 2026.”
Udacity’s security sales pitch is that it has already trained 10,000 artificial intelligence engineers (no word on how many the company has successfully placed in companies), and has thousands of students actively enrolled in its artificial intelligence and data analysis classes.
Through its paid and free classes Udacity claims some 8 million students and 30,000 graduates of the company’s nanodegree programs.
Udacity has made its reputation by offering classes in some of technology’s most sought after fields including autonomous vehicle systems, artificial intelligence and big data.
Founded by Sebastian Thrun, the godfather of the autonomous vehicle industry and the current chief executive of the flying vehicle startup Kittyhawk Corp., Udacity initially launched into the world of massive open online courses. Now the company’s market is more focused on credentialed skill development in conjunction with industry partners like Google, Amazon, IBM, NVIDIA, Mercedez-Benz, and others.
A shower of paper airplanes darted through the skies of Moscow and other towns in Russia today, as users answered the call of entrepreneur Pavel Durov to send the blank missives out of their windows at a pre-appointed time in support of Telegram, a messaging app he founded that was blocked last week by Russian regulator Roskomnadzor (RKN) that uses a paper airplane icon. RKN believes the service is violating national laws by failing to provide it with encryption keys to access messages on the service (Telegram has refused to comply).
The paper plane send-off was a small, flashmob turn in a “Digital Resistance” — Durov’s preferred term — that has otherwise largely been played out online: currently, nearly 18 million IP addresses are knocked out from being accessed in Russia, all in the name of blocking Telegram.
And in the latest development, Google has now confirmed to us that its own services are now also being impacted. From what we understand, Google Search, Gmail and push notifications for Android apps are among the products being affected.
“We are aware of reports that some users in Russia are unable to access some Google products, and are investigating those reports,” said a Google spokesperson in an emailed response. We’d been trying to contact Google all week about the Telegram blockade, and this is the first time that the company has both replied and acknowledged something related to it.
(Amazon has acknowledged our messages but has yet to reply to them.)
Google’s comments come on the heels of RKN itself also announcing today that it had expanded its IP blocks to Google’s services. At its peak, RKN had blocked nearly 19 million IP addresses, with dozens of third-party services that also use Google Cloud and Amazon’s AWS, such as Twitch and Spotify, also getting caught in the crossfire.
Russia is among the countries in the world that has enforced a kind of digital firewall, blocking periodically or permanently certain online content. Some turn to VPNs to access that content anyway, but it turns out that Telegram hasn’t needed to rely on that workaround to get used.
“RKN is embarrassingly bad at blocking Telegram, so most people keep using it without any intermediaries,” said Ilya Andreev, COO and co-founder of Vee Security, which has been providing a proxy service to bypass the ban. Currently, it is supporting up to 2 million users simultaneously, although this is a relatively small proportion considering Telegram has around 14 million users in the country (and, likely, more considering all the free publicity it’s been getting).
As we described earlier this week, the reason so many IP addresses are getting blocked is because Telegram has been using a technique that allows it to “hop” to a new IP address when the one that it’s using is blocked from getting accessed by RKN. It’s a technique that a much smaller app, Zello, had also resorted to using for nearly a year when the RKN announced its own ban.
Zello ceased its activities earlier this year when RKN got wise to Zello’s ways and chose to start blocking entire subnetworks of IP addresses to avoid so many hops, and Amazon’s AWS and Google Cloud kindly asked Zello to stop as other services also started to get blocked. So, when Telegram started the same kind of hopping, RKN, in effect, knew just what to do to turn the screws. (And it also took the heat off Zello, which miraculously got restored.)
So far, Telegram’s cloud partners have held strong and have not taken the same route, although getting its own services blocked could see Google’s resolve tested at a new level.
Some believe that one outcome could be the regulator playing out an elaborate game of chicken with Telegram and the rest of the internet companies that are in some way aiding and abetting it, spurred in part by Russia’s larger profile and how such blocks would appear to international audiences.
“Russia can’t keep blocking random things on the Internet,” Andreev said. “Russia is working hard to make its image more alluring to foreigners in preparation for the World Cup,” which is taking place this June and July. “They can’t have tourists coming and realising Google doesn’t work in Russia.”
We’ll update this post and continue to write on further developments as we learn more.
Can blockchain technology fix the soul sucking tedium and cost of back-and-forth bureaucracy? The Swiss team behind a blockchain-based platform, called Proxeus, believes it can — and that that will be just the tip of what decentralization brings down the pipe, once components such as crypto identities become an accepted (and legal) standard.
Blockchain’s big picture vision is embedded crypto identities opening up all sorts of additional opportunities — from a new wave of share trading and lending, to frictionless identity verification.
But right now the technology remains nascent, with some fundamental challenges — such as energy efficiency and scalability — yet to be overcome and thus standing in the way of blockchain’s much touted transformative potential.
That’s why the team behind Proxeus has taken what co-founder Antoine Verdon dubs a “very pragmatic, very Swiss” approach to blockchain — aiming to bridge the gap between the old (but real) world of linear workflow processes and the brave but still alternative reality where everything that can be decentralized has been.
So they’re focused on enabling blockchain to be used to optimize single processes and workflows — as a first step towards greater transformations.
“Blockchain is going to change the whole way we organize ourselves, the whole way we build software, the whole way that even democracy works — and the whole way societies are organized,” says Verdon, laying out his blockchain faith before tempering it with a little local pragmatism. “The impact will be quite deep and eventually really powerful but in the first step it’s just another digital technology bringing efficiency to businesses.”
The team’s aim for their platform is to become ‘the WordPress of blockchain’. The technology is open source, and the platform will be made freely available for anyone to use (people building Proxeus apps can monetize them via charging fees based on usage).
Back in February Proxeus raised $25M, via an ICO for their XES token, to community fund this vision.
“At its core Proxeus is a workflow builder and document generator,” says Verdon. “We have a framework which allows anyone to come and use building blocks to create workflows and at the end blockchain apps. But — just like WordPress is a website creation tool — we don’t intend to go down one level in terms of offering products ourselves and going directly into the market.
“We see ourselves and the Proxeus model as a toolbox and a tool provider.”
“We’re working on APIs on both sides,” he adds. “Both connecting Proxeus to different blockchains — we’re now connecting to Ethereum and Hyperledger — and on the input side, connecting Proxeus with a series of ERPs.”
He says another of of the goals is a connection for SAP systems.
The team has been developing the platform for 2.5 years, at this stage. They’re now beta-testing and running their first trials. And Verdon is hopeful the first live applications will be running on the platform by the end of the year, once they come out with a public product.
One interesting use-case for their blockchain technology — which they just last week publicly demoed in a prototype form under test conditions, as an entry in the digitalswitzerland challenge — is a company registration system using a digitized blockchain process to radically shrink how long the necessary administration takes.
The traditional route for registering a company in Switzerland takes an average of 10 days, according to Verdon. He says the process can take as long as six weeks. But the team’s proof-of-concept demo delivered a company registration in less than two hours — though it should be noted they had been working up to that for a year, and collaborating with IBM and Swisscom on the project.
What reducing the time it takes to register a company meant in practice was Proxeus creating a digitized workflow for the entire multi-step process — using blockchain to decentralize the steps (and thus help break down linear bottlenecks), combined with smart contracts to enclose and enforce rules around how to create a company (such as the need for a certain number of shareholders and shares), thereby enabling all involved parties to be on the same page.
“We started with a very traditional digitization project — we digitize the way documents are created and the user can create them, give his input in a much more efficient way,” explains Verdon. “But we add the blockchain piece on top of that to make the digitization process even more efficient than it otherwise would be. The main problem slowing down the registration process is there is a complex sequence of partners… The problem is before one party has finished their work the next one cannot start — that’s the thing that we solved with blockchain.”
Proxeus built a web interface for the prototype so that all the parties involved in making company registrations happen could log in; contribute their pieces of work; and “give their okay to the process” — all without needing to know how blockchain works.
“The entrepreneur registers their own company [but] the company registration is pending until the other parties come and say yes the money has been paid, yes the conditions are fulfilled… Seeing things like this as a a list of check boxes that need to be checked, instead of a sequence, it’s a much more efficient way to work.”
Another bit of Swiss pragmatism: Proxeus’ system enables even blockchain refuseniks to participate because it still allows for paper documents to be sent. (In that case other parties in the chain can digitize the document and check the necessary confirmation box to keep things moving along.) Though too many blockchain refuseniks/paper-pushers would clearly reintroduce some friction to the process.
For the proof-of-concept Proxeus also pared back the workflow to a most basic case. But it’s an interesting example, nonetheless. And one that Verdon believes illustrates the potential of what can be achieved once lots of organizations start to experiment with — and see potential in — decentralizing their processes.
“We have a quite pragmatic way for any company to start connecting the business workflows — maybe in the legal space but we also working with a large Swiss university to digitize their master degrees and use blockchain to verify them,” he tells TechCrunch.
“We are in discussion with a car manufacturer, with a commodity trader. We receive almost every day requests from many large companies interested to use Proxeus as a sort of sand box that will allow them to test how blockchain could transform their business value and the way they work.”
What is being replaced here? Some purely administrative job roles. “All those job roles that mainly consist of receiving information in one form — for example paper — and inputting it into another format, for example, digitally, they will gradually disappear,” predicts Verdon. Though that’s clearly not going to happen overnight. (But once blockchain infrastructure gets widely adopted change could happen suddenly.)
“We know there are really crazy blockchain ideas out there… but it will take several steps before we go into those new business models and ideas. I think what’s lacking — and I hope we’ll be bringing — is this bridge between the traditional world and the workflows up to this blockchain,” he adds.
While Proxeus has worked with partners on the company register example, to showcase how this bridging strategy can work — taking one process and digitizing it in a way that “doesn’t change anything”, and thereby allowing all players to jump into using blockchain — its hope is that it can develop this into an ecosystem of users who pick up the baton and start figuring out how blockchain can work for them.
“We see ourselves as enablers of businesses who want to use Proxeus technology,” says Verdon. “If everything goes well at some point there will be people and for-profit businesses coming and taking the Proxeus technology and charging clients for implementing that in a way that is compatible with company needs. Just like Accenture, for example, is implementing SAP solutions with other companies. We think that our role will be also developing a network of partners that understand Proxeus and can take it and apply it with industry clients.
“We keep the door open for doing part of this ourselves — but we see ourselves more as an enabler than as the ones that will be actually doing the business at the end.”
“It’s a decentralized model where we have our own cryptocurrency now with the ICO with the excess and the excess will be used to co-ordinate the different parts provided by the parties of the decentralized ecosystem, so that one party will be able to download Proxeus as a DApp [decentralized app] and make it run on their own server. If they want to create a workflow then they can do it. If they want to — for example, if another country now wants to create a company register and sees our system as a good model then you could buy the workflow created by the other company or country, in that case,” he continues.
“Then if you want to store your documents created on a server which is not yours then other production could be taken by the party in the ecosystem and all those relationships between the IP creators, the storage partners, the DApp holders, using services of others, will be connected through Proxeus in a visible way… and there are ways to allow them also to pay with Euros or Swiss franks, or whatever they want. But the underlying mechanisms will be reviewed by access and there it’s going to be up to the parties to decide whether they want to provide their services for a fee, and if for a fee then they will have to pay it with excess.”
In the case of the Swiss company registry project, Verdon says the hope now is it will be taken forward into an actual deployment. The team is in discussions with the Swiss state which he describes as the “natural” lead partner for that particular use-case.
A first productive version could come as early as this year, he adds. Though he also notes it would be just a beginning — whoever gets involved would need to build on the MVP, adding “more and more complex cases”.
Because of course “there are many exceptions” involved in company registrations. And that’s where the soul-suckiness of bureaucracy starts to creep back in.
But Proxeus’ wider blockchain faith is that by decentralizing business processes it can at very least allow information to flow more freely — unlocking efficiency gains.
“Using blockchain is a very efficient way to make people collaborate better,” argues Verdon. “I think through [the platform] we have a quite pragmatic way for any company to start connecting the business workflows.”
Proxeus’ platform also enables users to get their hands dirty playing around with decentralized app building too — which he touts as “much cheaper and faster” than traditional app development, as well.
“If we had built the company register application with a traditional process it would have been a very complex IT project,” he continues. “There are several parties… you would need to create one platform where they all come, and they all receive different permissions — it would be super complex.
“In our case everyone has their own small workflow, their own small decentralized app that we can build individually — and that are connected through a blockchain layer bringing all of them together, so I think it’s a much more efficient way to program applications.”
Beyond those near-term, and fairly tangible benefits, Verdon says businesses taking the blockchain leap of faith now — and playing around with what the tech can do for them, via the building blocks Proxeus is offering — are also positioning themselves to be ready for the more transformative “crazy” models coming down the pipe — i.e. as a consequence of mass adoption of blockchain-based decentralization (if/when it comes).
“Just like you have a verified account at Facebook or Twitter for personalities I think at some point you will have, on LinkedIn, the possibility to connect your crypto identities so you can have this small check next to your degrees — that you have verified degrees publicly,” he suggests, giving an example of how blockchain could create a major trust-based shift within existing digital ecosystems.
He won’t be drawn into making any specific predictions for how long it will take for blockchain to scale up to be able to deliver major scale process change. But he is convinced the core tech has the potential to drive some truly seismic shifts — including at a societal level.
“It’s still extremely new,” he argues, pointing to the blockchain ecosystem generally. “I think it’s going to take a few years still until, on the one hand, the protocols develop to a level where they can use less energy, be more efficient, and on the other hand where simply businesses have understood what blockchain will bring, how a decentralized business can be run, how blockchain can allow them to develop new services, new business on top of what they have.
“Just like with the Internet revolution… it took quite some time for businesses to really grasp the impact of that. And for clear models to develop how the different industries could use those technologies — so I think it’s going to be the same here. I expect you’re going to see first movers publishing some small-scale live applications this year but for really large services provided using blockchain we probably need to wait another couple of years.
“The longer term vision, the longer term impact may or may not happen at that scale — it has the potential to transform the whole way society works — but it still has to be proven.”
Verdon’s bio on Proxeus’ team page says he’s been involved in the crypto/blockchain space since 2012, including as an investor. He tells us he was an early investor in the YC- and Google Ventures-backed Buttercoin exchange, for instance — too early as it turned out, as the startup went bankrupt three years ago. So even though the core idea was solid — as the subsequent success of other Bitcoin exchanges, such as Coinbase, underlines — timing is key to any investment.
He claims better success investing in crypto currencies. So is he hodling his Bitcoins — despite recent downturns? “Yes, you must,” he replies, though he also cautions he “tries to diversify everything in crypto”.
“If you work in crypto you also have to believe that it’s going further,” he continues. “And sometimes you have a small heart attack but at the end the trend is very positive — if you compare the prices between January 2016, January 2017, January 2018 there is a very clear and a very high upward trend.”
It’s that same unshakeable conviction that Proxeus’ platform is founded on — and the faith that many more believers will come.
Jennifer Carolan is a general partner and co-founder of Reach Capital.
More posts by this contributor
Why VR matters, especially in rural schools
In The Better Angels of Our Nature, Harvard psychologist Steven Pinker makes the case for reading as a “technology for perspective-taking” that has the capacity to not only evoke people’s empathy but also expand it. “The power of literacy,” as he argues “get[s] people in the habit of straying from their parochial vantage points” while “creating a hothouse for new ideas about moral values and the social order.”
The first major empathy technology was Guttenberg’s printing press, invented in 1440. With the mass production of books came widespread literacy and the ability to inhabit the minds of others. While this may sound trite, it was actually a seismic innovation for people in the pre-industrial age who didn’t see, hear or interact with those outside of their village. More recently, other technologies like television and virtual reality made further advances, engaging more of the senses to deepen the simulated human experience.
We are now on the cusp of another breakthrough in empathy technologies that have their roots in education. Empathy technologies expand our access to diverse literature, allow us to more deeply understand each other and create opportunities for meaningful collaboration across racial, cultural, geographic and class backgrounds. The new empathy technologies don’t leave diversity of thought to chance rather they intentionally build for it.
Demand for these tools originates from educators both in schools and corporate environments who have a mandate around successful collaboration. Teachers who are on the front lines of this growing diversity consider it their job to help students and employees become better perspective-takers.
Our need to expand our circles of empathy has never been more urgent. We as a nation are becoming more diverse, segregated and isolated by the day.
The high school graduating class of 2020 will be majority minority and growing income inequality has created a vast income and opportunity gap. Our neighborhoods have regressed back to higher levels of socio-economic segregation; families from different sides of the track are living in increasing isolation from one another.
Photo courtesy of Flickr/Dean Hochman
These new empathy technologies are very different than social media platforms which once held so much promise to connect us all in an online utopia. The reality is that social media has moved us in the opposite direction. Instead, our platforms have us caught in an echo chamber of our own social filters, rarely exposed to new perspectives.
And it’s not just social media, clickbait tabloid journalism has encouraged mocking and judgment rather than the empathy-building journey of a great piece of writing like Toni Morrison or Donna Tartt. In the rich depth of literature, we empathize with the protagonist, and when their flaws are inevitably revealed, we are humbled and see ourselves in their complex, imperfect lives. Research has since proven that those who read more literary fiction are better at detecting and understanding others’ emotions.
What follows are several examples of empathy technologies in bricks and mortar schools, and online and corporate learning.
Empathy technologies enhance human connection rather than replacing it. Outschool is a marketplace for live online classes which connects K-12 students and teachers in small-groups over video-chat to explore shared interests. Historically online learning has offered great choice and access but at the cost of student engagement and human connection.
Outschool’s use of live video-chat and the small-group format removes the need for that trade-off. Kids and teachers see and hear each other, interacting in real-time like in a school classroom, but with participants from all over the world and from different backgrounds.
Live video chat on Outschool
The intentionally of curating a diverse library of content is a key difference between the new empathy technologies and social media. Newsela is a news platform delivering a bonanza of curated, leveled content to the classroom every day. It’s the antidote to the stale, single source textbook, refreshed once a decade. In the screenshot below, children are exposed to stories about Mexico, gun rights and Black women. Teachers often use Newsela articles as a jumping off point for a rich classroom discussion where respectful discourse skills are taught and practiced.
Business leaders are increasingly touting empathy as a critical leadership trait and using these technologies in their own corporate education programs for leadership and everyday employees. Google’s Sundar Pichai describes his management style as “the ability to trancend the work and work well with others.” Microsoft’s Satya Nadella believes that empathy is a key source of business innovation and is a prerequisite for one’s ability to “grasp customers’ un-met, unarticulated needs.” Uber’s new CEO Dara Khosrowshahi and Apple’s Tim Cook round out a cohort of leaders who are listeners first and contrast sharply to the stereotypical brash Silicon Valley CEO.
To deepen employees empathy, cutting edge corporations like Amazon are using virtual environments like Mursion to practice challenging interpersonal interactions. Mursion’s virtual simulations are powered by trained human actors who engage in real-time conversations with employees. I tried it out by role-playing a manager discussing mandatory overtime with a line worker who was struggling to keep two part-time jobs. The line worker described to me how last-minute overtime requests threw his schedule into chaos, put his second job at risk and impacted his childcare situation.
For Mursion and Newsela, empathy-building is an intentional outcome of the product. They are deployed in learning environments where trained educators can use them as scaffolding tools. With Mursion, employees can practice hard conversations and receive feedback from their facilitators and peers. With Newsela, teachers can use the gun rights article as a jumping off point for a richly facilitated group discussion.
What the broader tech industry can take away from educators’ adoption of empathy technologies is that storytelling, elevating common elements of the human condition and taking a humanist approach to building products will help us break out of our tiny echo chambers and by doing so, enrich our own lives.
Sunny Dhillon is a partner at Signia Venture Partners.
More posts by this contributor
The rise of experiential commerce
Approaching e-commerce investments in the age of Amazon
Late last year, after Amazon announced it had acquired the rights to J.R.R. Tolkien’s epic “Lord of the Rings” saga for $250 million, I wrote how the move underscored Amazon’s relentless pursuit to build one platform to “rule them all.” Now that Amazon is investing half a billion dollars into developing a Middle Earth show – making it the most expensive TV series ever made – it won’t be a surprise to see Jeff Bezos front and center at the Emmys soon.
But Hollywood isn’t the only industry Amazon wants to upend. Based on the company’s great ambitions in apparel, it may not be long before we also see Bezos at New York Fashion Week next to Anna Wintour.
The 800-Pound Gorilla in the Fashion World
As traditional retail continues to recede, direct to commerce fashion brands continue to emerge. I’ve previously shared how Stitch Fix, Warby Parker, Everlane and Allbirds are just a few innovative companies proving the success of this model. As the master of D2C commerce, Amazon has been fine-tuning its fashion operation for over 15 years.
Amazon originally got into apparel all the way back in 2002 and acquired online shoe retailer Zappos for $1.2 billion in 2009, marking the largest purchase in its history at the time. But the company’s quest to dominate fashion has faced several historical obstacles, chief among them that people have not trusted buying apparel online out of a desire to try on the items first and that Amazon was not perceived as a “cool” brand.
Headwinds are now tailwinds. Online shopping for apparel took off and is now the highest online-penetration CPG sector; the majority of women have shopped for clothing online. E-commerce accounts for nearly twice as big a proportion of total clothing sales as it does for retail more broadly (17 percent vs. 10 percent). Amazon, meanwhile, has honed its apparel strategy, providing free returns, better photography and greater selection. Today, the company is the largest apparel retailer by gross merchandise volume. Mission accomplished? Not quite.
Building A Private-Label ‘Fashion House’
An actual Amazon fashion shoot
Bonobos CEO Andy Dunn once said, “Selling a bunch of other people’s stuff is a low margin game that requires a lot of capital and, ultimately, it’s hard to beat Jeff Bezos at that.” This is true, but when it comes to apparel, Bezos has greater ambitions than selling other people’s stuff. Currently, though, that’s mostly what Amazon does.
According to analysis from Coresight Research, nearly 14 percent of listings on the U.S. Amazon Fashion site are from Amazon itself, while third-party sellers account for the remaining 86 percent. Amazon is highly incentivized to increase its share of that pie. Apparel is a highly profitable category for the company, with 40 percent peak gross margins in the last 10 years. Additionally, Prime members heavily overindex for buying apparel on Amazon – nearly two-thirds have done so in the past year.
As it ramps up its private-label offerings, Amazon is clearly keen to move beyond selling the apparel equivalent of batteries and diapers through its Amazon Essentials brand. It started selling thigh-high velvet boots in September, and Coresight’s analysis indicates that the company is focusing on higher-value categories.
If its recent Lord of the Rings rights acquisition was an attempt to further capture young affluent consumers’ eyeballs, and Whole Foods an attempt to lock down their stomachs, it follows that Amazon would want to ensnare their wardrobes as well. Acquiring a hot digitally native vertical brand – or brands – would be a speedy way to accomplish that. Walmart has already pursued this strategy by buying Bonobos, Modcloth and others; Amazon could take a similar path and seek to bring buzzy brands like Everlane into the everything store. This could also go a long way in helping Amazon shed its “uncool” label.
Becoming A Fashion (Power)House
The Echo Look is just one sign Amazon is serious about dominating fashion
Last year, Amazon introduced a number of innovations designed to turbocharge its apparel business and make the online shopping experience as frictionless as possible. It launched Prime Wardrobe, a Stitch Fix-style service that allows you to try three or more items on at home before sending back the items you don’t want for free in a resealable box with a prepaid label.
It also debuted Echo Look, a new Alexa-powered device that the company dubs a “hands-free camera and style assistant.” The addition of a camera enables the device to record and comment on its owner’s clothing choices, using a combination of machine learning and human stylist feedback. This advice also takes the form of recommendations, which can drive revenue to Amazon Fashion, and specifically its private-label brands.
Amazon is iterating on and rolling out more features for the Echo Look, including curated content and even crowdsourced (human!) style feedback. It also created an AI algorithm for designing clothes and patented an AR mirror that lets you virtually try on clothes. The value of such a mirror was validated recently by L’Oreal’s acquisition of ModiFace, a company that produces technology that powers similar applications in beauty AR.
Analyzing all these moves together, Amazon’s apparel strategy begins to crystallize. First it sells tons of clothes to learn how clothes are sold. Then it starts selling its own clothes to generate higher gross margin. And now has it has Prime Wardrobe to increase lock-in and reduce points at which customers can choose not to buy Amazon’s own clothing (all while gathering more data about individual preferences); and Echo Look to be its data collection and voice-commerce portal (and as an added bonus, it can route ambiguous purchase requests to its growing inventory of private-label items). If this strategy is successful, it will give Amazon an enormous data moat to drive high-margin sales – a competitive advantage that will be extremely difficult for fashion retailers and brands to replicate.
Bezos doesn’t need to even ask.
Amazon has become increasingly dominant in several increasingly important arenas: cloud services, voice assistants, self-serving brick-and-mortar stores with Amazon Go, and of course its now-traditional role as the online everything store. The company is poised to add apparel to this growing list as it changes the way people shop for clothing (again) and entices more of its customers to buy Amazon’s own threads. And it bears mentioning that Amazon Fashion will get a helpful hand from Amazon Studios as well. Bezos once shared that, “When we win a Golden Globe, it helps us sell more shoes.” If he has his way, Amazon will be doing a lot more of both in the coming years.
San Francisco’s housing crisis is painfully obvious with a homeless population of 7,499 people, according to a 2017 homeless census and survey. People lose their homes for a variety of reasons — job losses, wrongful evictions, excessive rent hikes and so forth. What sometimes prevents people from finding a new home is a lack of available resources, pricey rent costs and lost connections with friends, family and loved ones.
The latter part is where Miracle Messages, founded by Kevin Adler, aims to come in. Miracle Messages, a non-profit organization, enables homeless people to deliver short messages to their loved ones.
There are number of factors that play into people losing touch with their loved ones, Adler told me on the latest episode of CTRL+T.
For one, there are bureaucratic barriers, he said. For example, shelters can’t confirm or deny whether someone is or is not at a facility, due to the Health Insurance Portability and Accountability Act. Another part of it, Adler says, is digital literacy.
“A lot of people lose their phones, they lose numbers and they don’t know how to reach out,” Adler said. “But the biggest one,” Adler said, is “shame, embarrassment, fear, feeling worthless.”
Since its inception, Miracle Messages has delivered 220 messages and reunited 118 loved ones. Of those reconnections, 80 percent of them have resulted in a positive outcome and 25 percent have led to stable housing.
Through Miracle Messages, Adler hopes housed people will start to see those without homes as more than just homeless people, but as someone’s son, daughter, sister or brother.
In some cases, unfortunately, some people have lost touch with their families — and that’s partly why they landed on the streets in the first place, Adler said. That’s where the organization’s monthly neighborhood dinners can come in.
It’s about “creating avenues where we can engage our neighbors experiencing homelessness on those fronts,” Adler said.
“It’s not ignoring the pressing issue at hand,” he said. “It’s actually reemphasizing the humanity that we all have to offer and that we need as people.”