7 Things You Should Know Before Making a Major Career Decision

A friend of mine recently announced that his employer was closing the facility where he currently worked and moving its function to a larger facility about 600 miles away.

They gave him a choice: 1) relocate or 2) work remotely from home without relocating. Last I heard, he’d decided to relocate. His logic was as follows:

  1. As is typical in this sort of announcement, some of the coworkers at his facility were laid of rather than given a choice.
  2. The stated reason behind the relocation was to increase the amount of contact between employees in hopes of creating a more collaborative culture.
  3. Working from home would place him out of the collaborative loop and thus make him more likely to be laid off in the future.

While I understand his logic, I’m not sure he’s made the right decision.

Based upon what I’ve seen and experienced in the corporate world, there are seven essential truths to consider before making any major career decision.

1. There is no such thing as job security.

Millions of people have pursued their careers under the assumption that if they do the job required of them–and do it well–t they’ll remained employed and even get regular, reasonably-sized raises. And millions of people, having made huge sacrifices for their employers, have gotten fired anyway.

2. Always have options in your back pocket.

In my most recent book, Business Without the Bullsh*t, I recommend always having at least three different job opportunities under development, as well as a written plan for what you’d do, and who you’ll call, should you lose your job or decide to leave. If you’ve got options, your employer can’t bully. You make decisions based on opportunity not fear.

3. Know your true value to your company.

All companies, large or small, want to compensate you as little as possible while getting you to create (for them) as much value as possible. By contrast, it’s in your interest to get your compensation as close as possible to the value you’re creating, allowing for a fair profit to your employer. Essential question: how much would it cost to replace you?

4. Bad managers love management fads.

Thirty years ago, it was Total Quality Management; twenty years ago, it was Reengineering; ten years ago, it was Disruptive Innovation; today it’s the Collaborative Office. Popular management panaceas, at best, serve as corporate productivity taxes.  Worst case, they actively drive companies out of business. Be forewarned.

5. Do the numbers before you decide.

Consider the hidden costs before making any career decision. In my friend’s case, working from home eliminates commute time. Adding, say, an hour commute (both ways) to a 50-hour work week is the equivalent to a 20 percent pay cut! Similarly, relocating away from extended family could mean increased child-care costs. Always do the math!

6. Never make a career decision out of fear.

Fear is a useful emotion for making short-term decisions like “Should I try to pet that strange dog?” Fear is worse than useless, how, when making long-term decisions like “Where should I work?” or “What should I do for a living?” Making career decisions out of fear tends to land people in jobs that they hate and miss opportunities for jobs they’d truly enjoy.

7. The true measure of success is happiness.

As I’ve pointed out previously, it’s better to be happy and poor than miserable and rich. Of course, it’s easier to be happy when you don’t need to worry about money but past a certain point, it’s harder to achieve more happiness than more money. With this in mind, most people are happier when they work for home

Tech

IPhone 7 is outselling iPhone 8: analyst

(Reuters) – Apple Inc’s older iPhone 7 models are outselling the recently launched iPhone 8 ahead of the early November debut of the premium iPhone X, broker KeyBanc Capital Markets said, citing carrier store surveys.

Traditionally, new editions of the iPhone have sold quickly as fans queue for the latest upgrade and the surveys would add to signs that the iPhone 8 is not proving as popular as its predecessors.

“Many respondents indicated that a meaningful portion of customers are buying iPhone 7 in lieu of the new iPhone 8, given the lack of significant enhancements in the new phone,” KeyBanc analyst John Vinh wrote in a client note.

Apple last month introduced the iPhone 8 and iPhone 8 Plus, which resemble the iPhone 7 line but have a glass back for wireless charging. [nL2N1LT21G]

While iPhone 8 starts from $ 699 in the United States, iPhone 7 is retailing from $ 549 after a price cut.

“Feedback from stores indicate customers are waiting to purchase the iPhone X or to compare the iPhone X before buying the iPhone 8,” wrote Vinh, who is rated four out of five stars by Thomson Reuters StarMine for his recommendation accuracy on the Apple stock.

Apple’s much-anticipated iPhone X, a glass and stainless steel device with an edge-to-edge display, will start shipping from Nov. 3. The 10th-anniversary iPhone is priced from $ 999 – Apple’s most expensive mobile till date.

Another reason for the slow uptick of the iPhone 8 could be the modest promotion by U.S. carriers, Vinh said.

“While carriers continue to offer promotions for the new iPhone 8, they have been much more modest compared to the iPhone 7 launch last year,” he wrote.

KeyBanc did surveys in the United States and United Kingdom.

Apple was not immediately available for comment.

The company’s shares were up 0.8 percent at $ 158.20 in early trading.

Reporting by Supantha Mukherjee in Bengaluru; Editing by Maju Samuel

Tech

​Windows Subsystem for Linux graduates in Windows 10 Fall Creators Update

More Windows 10

Interested in running Linux on Windows 10 with Windows Subsystem for Linux (WSL), but nervous about it being both a beta and only available in Windows 10 developer mode? Your worries are over. In the Windows 10 Fall Creators Update (WinFCU) WSL has graduated to being a Windows 10 feature that can be run by any user.

Tested for over a year, WSL on WinFCU is bringing many new features to this combination of the Linux Bash shell and Windows.

Besides WSL no longer being a beta or requiring users to be in developer mode, the new features include:

  • Install Linux distros via the Windows Store
  • WSL now runs multiple Linux distros
  • WSL comes to Windows Server & Microsoft Azure VMs
  • WSL now supports USB/serial comms
  • Miscellaneous fixes and improvements

Besides Ubuntu, the new WSL-supported Linux distros are SUSE‘s community openSUSE and its corporate SUSE Linux Enterprise Server (SLES). Fedora and other distros will arrive in the store shortly.

If you’ve previously installed WS, your existing “legacy” Ubuntu instance will continue to work, but it’s deprecated. To continue to receive support you should replace it with a new store-delivered instance. Without this, you won’t receive Canonical or Microsoft support.

To keep your old files, you should tar them and copy them to your Windows file system; for example: `/mnt/c/temp/backups` and then copy them back to your new instance.

In addition, instead of jumping through hoops to install Linux on Windows, you can install one or more — yes, you can have multiple distros on a single Windows 10 system — Linux distros from the Windows Store.

To do this, you must first enable the WSL feature in the “Turn Windows Features on or off” dialog and reboot. No, WSL is not active by default and yes, you must reboot.

After rebooting you simply search for “Linux” in the Windows Store, pick a version to install, hit install, and in a few minutes you’re good to go.

If you already have a Bash instance installed on WSL, you can start afresh with the lxrun /uninstall command. You run this command from the command prompt or PowerShell.

Besides being able to install multiple Linux distributions, you can simultaneously run one or more Linux distros. Each distro runs independently of one another. These are neither virtual machines (VMs) nor containers, and that means they need their usual system resources. I, for example, would only want them on systems with at least an additional 2GBs per instance of running WSL.

WSL itself requires only minimal system resources. Rich Turner, Microsoft’s senior program manager of WSL and Windows Console, wrote: “We don’t list [RAM requirements] because, frankly, we don’t have any of note! If you don’t install WSL, we add no RAM footprint. If you do enable WSL, there’s a tiny 850KB driver loaded briefly, and then it shuts down until you start a Linux instance. At that point, you load /init which launches /bin/bash. This causes the 850KB driver to load, and creates Pico Processes for init and bash. So, basically, WSL’s RAM requirements are pretty much whatever the RAM is that you need to run each Linux binary, plus around 1MB of working set in total.”

The Linux distros can also access Windows’ host filesystem, networking stack, etc. That means you should be cautious about changing files on the Windows filesystem.

windows-store-linux-distros.png

You can now install Linux distros right from the Windows Store.

Why would you run multiple distros at once? Microsoft points out:

“This ability to run different Linux distros allows you to use the same tools, package manager/ecosystem, and environment that your production code will be running in. This results in less time wasted tracking down hard-to-find errors when it comes time to deploy your code. This allows you to, for example, use Edge/Chrome/Firefox on Windows, to view a website hosted on Apache on Ubuntu, that talks to a REST service running on openSUSE … without having to punch holes through the firewall when testing locally, because all these processes run above the firewall, alongside one another!”

Linux developers will be pleased to find that USB serial comms are now supported. This enables your shell scripts and apps to talk to serial ports.

WSL also now supports mounting of USB-attached storage devices and network shares. That’s the good news, The bad news is it only supports the NT filesystem IO infrastructure. In other words it only supports FAT/FAT32/NTFS formatted storage devices. Want *nix file systems? Microsoft encourages you to upvote and/or comment on the associated UserVoice ask.

Digging deeper into the new improvements, under the hood WSL on WinFCU now includes:

  • Improved TCP socket options inc. IP_OPTIONS, IP_ADD_MEMBERSHIP, IP_MULTICAST, etc
  • /etc/hosts will now inherit entries from the Windows hosts file
  • xattr related syscalls support
  • Fixed several filesystem features and capabilities
  • Improved PTRACE support
  • Improved FUTEX support
  • chsh, which enables you to change shells, now works. This enables you to use your favorite shell directly. Shell startup file other than “.bashrc” will now execute.

The following syscalls were added for the first time during the FCU cycle:

  • Prlimit64
  • getxattr, setxattr, listxattr, removexattr

As expected, WSL is also on its way to Windows Server and to Microsoft Azure Windows VM instances. This will make WSL even more useful for sysadmins.

All these improvements have made it even easier for developers and system administrators to run Linux shell commands on Windows. While this isn’t very useful for ordinary desktop users, for serious IT staff it’s a real step forward, making Windows more useful in a server and cloud world that’s increasingly dominated by Linux. Even on Azure, over a third of VMs are Linux.

With WSL, most Linux shell tools are at your command. These include: apt, ssh, find, grep, awk, sed, gpg, wget, tar, vim, emacs, diff, and patch. You can also run popular open-source programming languages such as python, perl, ruby, php, and gcc. In addition, WSL and Bash supports server programs such as the Apache web-server and Oracle’s MySQL database management system. In other words, you get a capable Linux development environment running on Windows.

While you can run Linux graphical interfaces and programs on WSL, it’s more of a stunt than a practical approach at this time. Of course, with a little work…

How does WSL work? Dustin Kirkland, a member of Canonical’s Ubuntu Product and Strategy executive team, explained: “We’re talking about bit-for-bit, checksum-for-checksum Ubuntu ELF binaries running directly in Windows. [WSL] basically perform real-time translation of Linux syscalls into Windows OS syscalls. Linux geeks can think of it sort of the inverse of ‘WINE‘ — Ubuntu binaries running natively in Windows.”

What matters now is that WSL works very, very well. If you want.

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Tech

6 Rules You Must Know for Using SEO and SEM to Grow Your Business

If you’re managing a business, you know how important a web and mobile presence is. Whether you’re selling tacos, tiaras, or terabytes, customers need to be able to find you.

You’ve probably dipped your toe into the complex world of organic or “free” search, also known as Search Engine Optimization (SEO), and paid search, also known as Search Engine Marketing (SEM). But what do you really need to know about SEO and SEM?

I spoke with SEO/SEM expert Andrew Shelton, founder of the digital marketing agency Martec360, who gave me six rules that you need to pay attention to right now if you want to increase your sales through search:

1. Mobile is king

Need evidence of the importance of mobile? Some 96% of smartphone owners use their device to get things done. About 70% of smartphone owners use their phone to research a product before purchasing it in a store. Half of all web traffic comes from smartphones and tablets.

Furthermore, Google has begun to make its search index “mobile-first.” That means that Google will primarily index mobile content and use that to decide how to rank its results.

2. Paid search pays off on mobile

On mobile, paid search (SEM) is increasingly paying off. Shelton says he used to tell his clients to focus on free search (SEO) but with users putting mobile first, the continuum has changed.

“The greatest return on investment is email,” Shelton says, “because you have those customers in house. But paid search is next.” He estimates that paid search spending went up by factors of 25% to 50% in 2016.

3. Have a solid content strategy

The old adage is the new adage: “Content is king.” You need high-quality content for your website if it’s going to compete in the free search business. You can’t go about that blindly.

Consider what customer problem you’re solving. What customer questions can you be answering?

Do you have a mechanism for customers to ask questions? There could be a wealth of ideas for blog posts, FAQs, and buyers’ guides right there.

4. Social media is worth your return on investment

Social media can be vexing for many businesses. You definitely have to perform a cost-benefit analysis on it. Spending six hours a day sending out tweets that don’t lead to conversions is going to be a losing proposition.

Treat social media as “an engagement with an ongoing conversation with your customers,” Shelton recommends. “It’s not just for selling.”

In fact, if your social media channels are too hard-sell, they’ll be counter productive. You have to create value. Tools like Hootsuite, Falcon.IO, and Curalate can help.

5. Manage your online reputation

According to Shopper Approved, an app that helps its clients collect online ratings and reviews, 88% of all consumers read online reviews to determine whether a local business is a good business.

All of those reviews are part of the SEO equation. They can help you, or they can hurt you. But an app like Shopper Approved can help push more positive reviews where you need them.

6. Measure and monitor your progress

The only way you’re going see your business grow exponentially through SEO, SEM, and social media is to measure what you’re doing. You have to know where you’re starting, set some benchmarks, and monitor your progress.

Install Google Analytics. There is a plethora of other e-commerce tools you can use for analysis. Data is your friend. Get used to swimming in it.

And if you need help, find a consulting firm that understands your customer and your goals.

Just remember, effective search is process. You won’t get it right the first time. But you’ll get better at it with everything you learn.

About the author:

Kim Folsom is the Founder of LIFT Development Enterprises–a not-for-profit, community development organization with a mission to help underserved, underrepresented small-business owners – and Co-Founder and CEO of Founders First Capital Partners, LLC, a small business growth accelerator and revenue based venture fund. Learn more about Kim and her company’s mission to help grow and fund 1000 underserved and underrepresented small businesses by 2026 via their Founders Business Growth Bootcamp program at www.foundersfirstcapitalpartners.com.

 

Tech

Tesla Fires Hundreds of Workers After Their Annual Performance Review

They’re not layoffs, the automaker says.

Electric automaker Tesla Motors fired hundreds of employees this week, including workers at its Fremont, Calif. factory and corporate managers, as it tries to solve production problems for its recently released Model 3.

An estimated 400 to 700 people were dismissed this week, according to a San Jose Mercury News report published Friday afternoon. That’s between 1% and 2% of the company’s more than 33,000 employees. Former and current employees told the Mercury News that little or no warning preceded the dismissals.

A Tesla spokesman would not confirm that number but told Fortune that the move follows its annual performance reviews, which typically involve both involuntary and voluntary departures.

“Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period,” a Tesla spokesman said in an emailed statement. “This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases. As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world.”

Tesla insists that the losses are not layoffs and that it plans to backfill the positions. That’s likely accurate, at least for jobs in California. State law requires companies to notify employees of layoffs through its WARN notification system. There are no records of new layoffs from Tesla. About 200 Tesla and SolarCity employees in the company’s Roseville, Calif. offices were notified Aug. 30 that they would be terminated.

The latest cuts come as the automaker tries to fix bottlenecks on the production line for its Model 3, an all-electric model designed to appeal to the masses. Earlier this month, Tesla reported that it produced 260 Model 3 cars in the third quarter, of which it has delivered 220. That figure is far less than CEO Elon Musk’s prediction that Tesla would produce more than 1,600 of the vehicles by September.

In July, Musk tweeted a production update for the Model 3, saying the car had passed all regulatory requirements ahead of schedule. After announcing that the first 30 customers would receive the Model 3s on July 28, Musk wrote, “production grows exponentially, so Aug should be 100 cars and Sept above 1,500.”

Altogether, Musk said that third quarter production numbers for the Model 3 would be around 1,630 vehicles—a prediction off by 84%.

A Wall Street Journal report published earlier this month revealed that Tesla workers were assembling Model 3 vehicles by hand until at least early September. One of the “bottlenecks” Musk alluded to was a process that involved positioning and welding body panels by hand, rather than by precision robots, according to workers interviewed by the Journal.

Musk recently delayed the unveiling of an electric semi-truck until Nov. 16 so the company can focus its attention on production problems with its new mass-market car, the Model 3.

Tech

Amazon steps up UK expansion drive with new distribution center

LONDON (Reuters) – Amazon (AMZN.O) said on Friday it would open a new distribution center in Bolton, northwest England, in 2018, stepping up its expansion drive in its third-largest market outside North America.

Amazon has 16 distribution centers in Britain and the new center will be supported by advanced robotics technology to help lift and move products around the plant. It will also employ 1,200 new, full-time permanent people, the company said.

The new jobs mean the online retailer will have created 3,500 jobs in the region, including Bolton and two other centers, one in Manchester set up in 2016 and another in Warrington, which opened this year.

It said that, including operating costs, it had invested 6.4 billion pounds ($ 8.3 billion) in Britain since 2010 in logistics, order filling, research and development and head office functions.

Following criticism from politicians about weak worker protection, the company has been increasingly employing its warehouse staff directly, rather than indirectly via contract firms which offer little employment security.

On Friday it set out the levels of pay, stock options, pensions and training that would be available for any new employee. Salaries start at 7.65 pounds per hour, but also include a variety of management, engineering and support roles.

Northwest England received a blow on Tuesday when major employer BAE Systems announced the cut of 750 highly skilled jobs at two aircraft manufacturing plants in Lancashire.

The Bolton center will ship easily sortable items to customers that lend themselves to current robotics technology, including books, toys and kitchenware.

The online retailer has expanded rapidly in Britain in recent years, and is looking for the new distribution plants to expand its product selection and enable more small and medium enterprises to sell their own wares through Amazon Marketplace. Half of all units stocked in British centers are from outside firms.

Separately this week, Booths, a high-end supermarket chain located in the north of England, said it would begin offering a range of its products online through AmazonFresh for home delivery to consumers in London and southeastern England.

Reporting by Kate Holton and Eric Auchard; Editing by Paul Sandle and Adrian Croft

Tech

Research Shows That Companies That Do This One Thing Increase Worker Productivity by 25%

When we think productivity, we rarely think of workplace design as a major contributor or detractor, but compelling ongoing research shows that it plays a much larger role than initially thought. According to research published in the Journal of Experimental Psychology, an empowered office environment can increase worker productivity on cognitive tasks by 25%, and possibly more.

Workspace design today is undergoing a major creative shift. We’ve gone from cubicles (people are productive in isolation) to open-plan spaces (collaboration leads to success) to what I believe is the next major step – integrated multi-function design which recognizes that people need multiple spaces based on their ongoing and changing needs within a business day.

Instead of looking out across rows of cubicles, today’s office worker needs a mix of team meeting rooms, open lounge-like areas, and private workspaces.

This is the “empowered office” – an office in which workers can choose their work environment. It’s a design concept that’s gaining traction – and not only because it creates more pleasant workspaces. It also has a powerful influence on worker productivity.

Great office design isn’t just for startups anymore

Major tech companies and Silicon Valley startups were among the first to embrace the concept of the empowered office. The New York Times recently highlighted Microsoft for its forward-thinking office designs, which incorporate everything from “isolation rooms,” or soundproof private spaces, to comfy central lounges with large tables and couches.

What’s really exciting, however, is that this way of thinking about space – specifically, about the ways that spaces influence behavior – is becoming more mainstream.  

“The great thing we are seeing, as far as transformative spaces in the workplace, is that these principles are being adopted across all disciplines – all fields and industries,” says Architectural Designer Jared Skinner, co-founder at MADE Design. “Companies are realizing that these best practices are bolstering not only creative collaboration – often seen as a soft skill, but productivity and results. It’s impacting the bottom line.”

Striking the perfect balance between privacy and collaboration

When it comes to progressive, transformative workspaces. some of the most successful companies have been the ones that aren’t afraid to experiment.

At Microsoft, for example, designers began testing open team workspaces in one specific area in one building. Through experimentation, they learned that the spaces they’d started with were too open – they were built for 16 to 24 software engineers, and those who worked in them found them to be too loud and distracting.

Working with that knowledge, Microsoft then adjusted those team spaces till they held just 8 to 12 engineers, which the company – and more importantly, the employees – believe to be ideal.

To achieve higher productivity, then, companies must embrace the need for creativity and flexibility. They must allow themselves to try out new configurations and change them as needed, adding in more private spaces, perhaps, or bringing in standing desks, or creating smaller collaborative work stations.  

Workspace design must embrace our digital, connected reality

Just as today’s consumers are constantly connected, so are today’s workers. What’s more, they’re mobile – work no longer has to be tied to a desk or an office.

When designing workspaces, it’s crucial to take these realities into account. But it takes more than an espresso machine or a pingpong table to make your workspace truly progressive, and thereby productive. If you’re not baking the principles of empowerment, connectedness, and mobility into your office design at its most basic level, then you can easily end up with a workspace that feels gimmicky and disingenuous.

That’s not to mention that you won’t be reaping the real productivity benefits of empowered office design.

Integrated design is a must for attracting talent – especially among Millennials and Gen Z

Millennials and members of Generation Z take connectivity for granted in their workspaces, so companies that want to truly stay ahead of the pack must go further.

We need to create designs that engage members of these generations. This isn’t the old model of engagement, either – Millennials and Gen Zers have a completely unique approach to engaging with spaces that’s based on more than just technology. To be successful, companies must keep these new sensibilities in mind as they design or renovate their workspaces.

This shift in workplace design is both responding to and influencing the new ways we’re defining work in the digital age. It’s an incredibly exciting time to be working at the intersection of design and branding, as we do at MADE.

To quote my co-founder, Jared Skinner, once more: “We’re living in an evolve-or-die day and age. Smart companies are being proactive and taking initiative to welcome this much-needed change.”

Tech

Deutsche Telekom premiers Europe's first 5G antennas

BERLIN (Reuters) – Deutsche Telekom tested Europe’s first ultra high speed 5G antennas in a real world setting on Thursday, a milestone in the race to provide the fast response times needed for virtual reality and autonomous driving.

Europe’s biggest telecoms provider said showed it was ready for a global launch of the technology by 2020, but it still leaves the continent lagging behind South Korea and Japan.

Telekom said it was the first use of the technology in a real world setting in Europe, with speeds of more than 2 gigabits per second to a customer device, as well as a latency of 3 milliseconds on commercial sites.

5G networks, which are expected to provide speeds some 10 to 100 times faster than today’s 4G networks, should remove one of the main obstacles to virtual and augmented reality, which need fast response times to stop users feeling queasy.

“This is a very decisive developmental step on the way to the global launch of 5G, which is planned for 2020,” Telekom board member Claudia Nemat told an event in Berlin. “5G is so important for digitization and for the economy.”

The worldwide race to provide 5G is currently being led by South Korea and Japan, which plan to deploy it in the next year or so, followed quickly by the United States where Telekom is the majority owner of No. 3 ranked mobile carrier T-Mobile.

Telekom showed off uses for the 5G network including live streaming virtual reality glasses and augmented reality glasses worn by a telecoms engineer, which superimposed instructions about how to fix a network box into his field of vision.

Nemat said 5G would also be needed for autonomous driving and the commercial use of drones for delivery and transport, adding that she expected business to be among the first users.

A Telekom pilot at the port of Hamburg plans to test 5G to control traffic lights and monitor the environment.

Nemat declined to say how much Telekom was spending on 5G but noted it is investing 5 billion euros ($ 5.93 billion) a year in Germany, including in fiber-optic cable and network modernization that is needed to make 5G a reality.

Telekom’s four test antennas are manufactured by China’s Huawei Technologies Co Ltd [HWT.UL].

Shi Mao, chief marketing officer for Huawei in western Europe, said it was important to demonstrate the use of the technology to justify the investment: “Everyone has to be convinced about the business value.”

Reporting by Emma Thomasson; editing by Jon Boyle

Tech

Facebook pushes ad overhaul before 2018 U.S. election: executive

SAN JOSE, Calif. (Reuters) – Facebook Inc has begun overhauling how it handles political ads on its platform and may put some changes in place before U.S. elections next year, Facebook’s chief technology officer said on Wednesday.

U.S. congressional and state elections set for November 2018 present a deadline of sorts for Facebook and other social media companies to get better at halting the kind of election meddling that the United States accuses Russia of.

“We are working on all of this stuff actively now, so there is a big focus in the company to improve all of this on a regular basis,” Facebook CTO Mike Schroepfer said in an interview.

“You’re going to see a regular cadence of updates and changes,” he said, speaking on the sidelines of a conference that Facebook is hosting about virtual reality technology.

Chief Executive Mark Zuckerberg said last month that the company would begin treating political ads differently from other ads, including by making it possible for anyone to see political ads, no matter whom they target. U.S. lawmakers had begun calling for regulations.

Disclosures by Facebook, Twitter Inc and Alphabet Inc’s Google that their products were battlegrounds for Russian election meddling last year have turned into a crisis for Silicon Valley.

Facebook’s chief operating officer, Sheryl Sandberg, is in Washington this week meeting U.S. lawmakers.

Moscow has denied allegations of meddling in last year’s U.S. presidential election.

Implementing changes is tricky, Schroepfer said, because Facebook does not want to stifle legitimate speech and because of the volume of material on Facebook, the world’s largest social network with 2 billion users and 5 million advertisers.

“We’re investing very heavily in technical solutions, because we’re operating at an unprecedented scale,” he said.

Facebook is also using humans. The company said this month it would hire 1,000 more people to review ads and ensure they meet its terms.

Schroepfer, 42, has been Facebook’s CTO since 2013 and previously was director of engineering. He also sits on Facebook’s board of directors.

Facebook has dealt with problematic user-generated content in the past, he said.

“We don’t want misuse of the platform, whether that’s a foreign government trying to intercede in a democracy – that’s obviously not OK – or whether it’s an individual spewing hate or uploading pornography,” he said.

Reporting by David Ingram; Editing by Kim Coghill

Tech

When She Couldn't Find a Hairstylist, This Founder Took Matters Into Her Own Hands

When you’re in a new town, whether it be for travel or work, not only do you have to settle in, you have to find all-vendors to handle your services: from a dry-cleaners to where to grab a pizza to where to get a haircut. Most founders build something because they have personal experience with a pain-point and see an obvious gap in the market. Maude Okrah, Founder and CEO of Bonnti is no different. She recently sat down with Project Entrepreneur and explained.

Project Entrepreneur: What inspired you to start your business?

Okrah: It was entirely personal reasons that inspired me to go on this entrepreneurial journey. I’ve been lucky to travel to a number of different cities and countries for work.

As a black woman, our hairstylists are a big part of our lives and finding a good one helps to adjust to a new city that much easier! However, I really struggled with the process of finding good stylists in each new city I went to. I had so many bad experiences with all the different stylists.

If I can get on my phone and order a Lyft, shop for new clothes, and get my groceries delivered why can’t I find a great hairstylist with the same ease? This frustration and desperate need for a solution led to the founding of Bonnti – a mobile app that allows women of color the opportunity to find stylists, discover styles and build community all within a convenient and fun platform.

What’s been the biggest challenge you’ve faced so far?

The biggest challenge I’ve faced so far is learning and becoming fluent in the language of tech. As a non-technical founder, there have been quite a few hurdles I’ve had to face when it comes to app development. I’ve had a crash course in the world of tech.

What is the biggest thing you’d like to see changed in your industry, and how are you working toward making that change happen?

I’d love to see more women, especially women of color, dive deeper into the tech world and come up with solutions to solve the unique everyday problems we face.

I’ve learned so much throughout this entrepreneurial journey that I’d be remiss not to share it with any other woman who even shows an inkling of interest in this field.

What’s one piece of advice you’d give to another entrepreneur just starting out?

It’s all about the 3Ps: patience, persistence, and passion. While the entrepreneurial world is very fast-paced, you have to learn there are times where you have to exercise patience, as stressful as that may be, follow your intuition.

You have to remain persistent. No matter how many no’s you get in one day, even in the face of rejection you have to keep trying.

You also have to love what you do; be obsessed with it! This space is a roller-coster, there are high levels of ambiguity and if you don’t have passion you may not survive.

This article originally appeared on the Project Entrepreneur website and has been condensed for clarity.

Tech

Qualcomm offers to buy NXP minus some patents to allay EU concerns: sources

BRUSSELS (Reuters) – U.S. smartphone chipmaker Qualcomm (QCOM.O) has offered to buy NXP Semiconductors (NXPI.O) without some of its patents in a bid to win EU antitrust regulatory approval for the $ 38 billion deal, two people familiar with the matter said on Tuesday.

The NXP deal, the biggest-ever in the semiconductor industry, would make Qualcomm the leading supplier to the fast-growing automotive chips market.

Qualcomm, which supplies chips to Android smartphone makers and Apple (AAPL.O), submitted its proposal to the European Commission on Oct. 5, but did not provide details.

The EU competition authority is worried that the merged company may provide incentives to customers to buy bundled products, thereby squeezing out rivals, or change NXP’s intellectual property licensing practices.

Qualcomm has told regulators it will not acquire NXP’s standard essential patents, which the Dutch company can sell to another buyer, the sources said.

The company also agreed not to take legal action against third parties related to NXP’s near field communication (NFC) patents except for defensive purposes. NXP co-invented NFC chips which enable mobile phones to be used to pay for goods and store and exchange data.

Qualcomm also offered an interoperability pledge, allowing rival products to function with NXP’s products.

The Commission has told rivals and customers to provide feedback to the offer by the end of the week. It can demand more if the feedback is negative.

Reporting by Foo Yun Chee, editing by David Evans

Our Standards:The Thomson Reuters Trust Principles.

Tech

Mark Zuckerberg Talks About Hurricanes and Puerto Rico in Virtual Reality

In prelude to the social network’s Oculus virtual reality conference this week.

A cartoon version of Mark Zuckerberg visited Puerto Rico through virtual reality on Monday to talk about Facebook’s hurricane relief efforts.

The Facebook CEO conducted a brief, live 360-video broadcast in which his likeness and that of Facebook’s head of social VR Rachel Franklin promoted the company’s upcoming Oculus Rift developer conference later this week while also talking about the company’s humanitarian efforts.

The two Facebook fb executives appeared as animated avatars superimposed on several real-life locations including Facebook’s headquarters, the moon, and amid the devastation on storm-ravished Puerto Rico. Both of the executives were demonstrating Facebook’s Spaces virtual reality app in which people can chit-chat, play games, and interact with each other in digital worlds.

After mentioning the Oculus event atop Facebook’s office, Zuckerberg and Franklin transported themselves into a recent NPR-produced 360-video that showed widespread damage caused by Hurricane Maria in September.

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Speaking as a cartoonish version of himself, Zuckerberg showed viewers some of the damage caused by the recent powerful storms, mentioning, “One of the things that’s really magical about virtual reality is you can get the feeling that you’re really in a place.”

“We’re looking around, and it feels like we’re really here in Puerto Rico,” Zuckerberg said.

Zuckerberg also discussed Facebook’s $ 1.5 million donation to organizations doing hurricane relief like the World Food Program as well as it sending a “connectivity team” to the island to help restore telecommunication services.

He also said that Facebook used satellite imagery to create so-called “population maps” that the Red Cross can use to see heavily populated areas and more quickly determine who needs help.

Tech

Google uncovered Russia-backed ads on YouTube, Gmail: WashPost

WASHINGTON (Reuters) – Google has discovered that Russian operatives spent tens of thousands of dollars on ads on YouTube, Gmail, Google search and other products, The Washington Post reported on Monday.

The ads do not appear to be from the same Kremlin-affiliated entity that bought ads on Facebook Inc, which may indicate a broader Russian online disinformation effort, the paper reported. Google runs the world’s largest online advertising business and YouTube is the world’s largest online video site.

Google, owned by Alphabet Inc, did not immediately respond to a request for comment on the story.

Google has downplayed the possibility of Russian influence on its platforms, but launched a probe into the matter, according to the Post. Both Twitter Inc and Facebook have said that Russia bought ads and had accounts on their platforms.

A source who was briefed on Google’s review but who did not work for the internet and search group said Google had uncovered less than $ 100,000 in ad spending that had potentially been linked to Russian actors.

Facebook, on the other hand, unearthed $ 100,000 in spending from just one Russia-affiliated entity, the Internet Research Agency, the source said.

Meanwhile, Congress has started multiple investigations into the Russian interference in the 2016 election, with lawmakers on both political sides saying Russia intended to sow discord in the United States, spread propaganda and sway the election to elect President Donald Trump.

Google officials are expected to testify publicly before both the House and Senate intelligence committees on Nov. 1 alongside Facebook and Twitter about Russian attempts to use their platforms to influence the election.

Reporting by Dustin Volz; Additional reporting by Makini Brice; Editing by Doina Chiacu and Jeffrey Benkoe

Our Standards:The Thomson Reuters Trust Principles.

Tech

Famed Architect’s Lawsuit Against Google Just Got Much More Serious

Eli Attia alleges he wasn’t the only one mistreated by the search giant.

A long-running lawsuit filed against Google by a prominent architect has just gotten much broader.

Last week, the Superior Court of California granted a motion adding racketeering charges to the civil case being pursued against Google by Eli Attia, an expert in high-rise construction. Attia claims Google stole his idea for an innovative building design method – and now he wants to prove that it does the same thing frequently.

Attia’s suit was originally filed in 2014, four years after he began discussions with Google (prior to its reorganization as Alphabet) about developing software based on a set of concepts he called Engineered Architecture. Attia has said Engineered Architecture, broadly described as a modular approach to building, would revolutionize the design and construction of large buildings. Attia developed the concepts based on insights gleaned from his high-profile architecture career, and has called them his life’s work.

Google executives including Google X cofounder Astro Teller came to share his enthusiasm, and championed developing software based on Engineered Architecture as one of the company’s “moonshots.” But Attia claims the company later used his ideas without fulfilling an agreement to pay to license them.

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Attia’s suit names not just Google, but individual executives including founders Larry Page and Sergey Brin. It also names Flux Factory, the unit Attia’s suit alleges was spun off specifically to capitalize on his ideas.

Speaking to the San Jose Mercury News, Attia’s lawyer claims Google told Attia his project had been cancelled, “when in fact they were going full blast on it.” Flux Factory is now known as Flux, and touts itself as “the first company launched by Google X.”

Attia’s suit will now also seek to prove that his case is representative of a much broader pattern of behavior by Alphabet. According to court documents, the motion to add racketeering charges hinged on six similar incidents. Those incidents aren’t specified in the latest court proceedings, but Alphabet has faced a similar trade-secrets battle this summer over X’s Project Loon, which has already led to Loon being stripped of some patents.

The idea of racketeering charges entering the picture will surprise many who associate them with violent organized criminals. But under RICO statutes, civil racketeering suits can be brought by private litigants against organizations and individuals alleged to have engaged in ongoing misdeeds. The broader use of racketeering charges has slowly gained ground since the introduction of RICO laws in the 1960s, with some famous instances including suits against Major League Baseball and even the Los Angeles Police Department.

Tech

VC Firm Lays Out Plan for Ceding Freeways to Self-Driving Cars

By now, you’ve seen the renderings and heard the promises. Someday, robocars will dominate American roadways, each racing along just inches from its neighbors, safely under the control of a computer that never makes mistakes. No more congestion, fewer atmosphere-choking emissions, and crucially, a drastic drop in deadly crashes.

Someday. Autonomous vehicles are truly on the way, but until they complete their conquest, they’ll have to share the road with awful human drivers. People are unpredictable. They don’t always follow the rules. They get distracted, brake late and hard, and make aggressive lane changes. They’ve already proved a menace to the robots: A quick check of records from the California DMV shows humans have a nasty habit of rear-ending driverless cars stopped at red lights or stop signs.

The solution? Keep ’em separate. Give each class of car its own lanes, or even entire roads. That’s the thrust of a white paper proposal that imagines an “autonomous vehicle corridor” replacing the I-5 freeway between Seattle and Vancouver. In other words, that entire stretch of critical roadway linking two major cities across an international border would be given over to driverless cars by 2040, with no old-fashioned, human piloted, cars allowed.

VC firm Madrona Venture Group first proposed the idea last year, and has now refined it to explain how such a radical proposal could be phased in over time. The white paper’s authors include Tom Alberg, who serves on the Amazon board, and Craig Mundie, former CTO of Microsoft and a member of the Council on Foreign Relations. The Seattle-based group looked at a stretch of road close to home, where they’d personally experienced frustrating traffic jams, but the idea could work anywhere.

“I do believe that the points we make in the paper can be generalized to a lot of interstates, and metropolitans areas,” says Alberg. In fact, they might prove easier to implement elsewhere, without the whole two-country thing complicating matters.

In the early days of the transition, any autonomous vehicle, no matter its powertrain or number of occupants, would be allowed to use existing HOV lanes on the I-5. These carpool lanes are usually separated from the rest of the traffic, making them easy to handle even for today’s semi-autonomous driving systems. The Madrona team says this should be implemented within a year.

By 2025, that HOV lane would be closed to human drivers, along with the one next to it (the highway is eight lanes wide). The paper’s authors say those two lanes could be used as three, as autonomous vehicles can safely drive more closely together. By 2030, the majority of the highway would be closed to human drivers, with the takeover complete by 2040.

“This final transition will require some tipping point in terms of vehicle availability and public interest,” the authors write. “We believe this will happen in the next ten to twenty years, when usage and data will demonstrate the dramatic benefits of autonomy along the dimensions of safety, efficiency, and productivity.”

The white paper restrains its proposal to the 140-mile stretch of I-5, but it’s easy to imagine someplace like California signing on. The Golden State already allows electric cars access to coveted carpool lanes, to encourage low-emissions driving. The same carrot could encourage the adoption of the safer autonomous vehicles that should reduce overall collisions.

If you think all this sounds grossly unfair to people who can’t afford or don’t want a driverless car, don’t freak. The benefits of improving traffic flow could extend to all road users—at least while the humans are still allowed. A University of Illinois study found that if just five percent of vehicles are autonomous on a regular road, that’s enough to eliminate those stop-and-go pulses of traffic that humans cause by not driving smoothly. The team sent one autonomous vehicle onto a track with 20 regular drivers, and found it completely cut “phantom traffic jams,” by acting as a pace car. British traffic engineers employ a similar concept on “smart motorways” which use variable speed limits to keep everyone moving smoothly, even if it’s at a slower pace. The result is usually a quicker journey overall, with fewer sudden changes in speed and thus fewer crashes.

Of course, a white paper from some VC firm won’t convince any transportation agency to make such a major change. But Alberg says the goal is to convince traffic engineers, transportation commissions, and highway planners to start taking the changing world of AVs into consideration. At first, his group got little traction, but they’re heartened that the Washington State DOT has asked them to testify on the idea at its next public meeting.

If you want to be ready for the carpool lane and you have the cash, you can already buy a car that at least partially drives itself. Tesla, Cadillac, Audi, Mercedes-Benz, Nissan, and others all offer cars that can handle themselves on the highway to varying degrees. That tech will gradually make its way down market, and Alberg and his co-authors want the decision makers to clear the road for it.

Tech

7 Reasons You Don't Need a College Degree to Earn Big

There are few college degrees that pave the way to six figures. It can happen – but you can also earn a six-figure income without ever going to college. I’m a proud college dropout, and was earning over $ 200,000 a year as the head of SEO at Oversee.net while my friends were working on their degrees. I went on to build and run successful companies and help others grow theirs. And I’m certainly not an anomaly in the world of business success.

Bill Gates, Mark Zuckerberg, and Lady Gaga are all wildly successful – all without college degrees. According to reporting from the Washington Examiner, 68% of Americans don’t have a bachelor’s degree. My position here isn’t to say college degrees are worthless or can’t be beneficial – just that they aren’t necessary to achieve success.

Here are 7 reasons you don’t need a college degree to earn big.

1. Online Learning Turns You Into an Expert

There was a time when going to college and securing a master’s was a ticket to big paychecks. But as we’ve learned during the ups and downs of our economy, a degree doesn’t always unlock doors to more opportunities.

You could end up needing an MBA for the work you want to do, but you should also stop to challenge your assumptions before signing up for four years of tuition and student debt. Do you really need a four-year degree to be a coder? Or could you take classes from Codeacademy or Dev Bootcamp to learn web development? Chances are you can find courses online for anything you want to be an expert in. Consume every course and all the content you can find to advance your own career.

2. It’s Possible to Start Consulting Right Now

There is no degree required to become a consultant; and you also don’t need to be a foremost expert to launch your services. Work on identifying areas where you can solve someone else’s problems. Look at B2B services you can offer, from email marketing to on-site optimization.

Just don’t fall into the trap of believing that you don’t know enough to consult. If you know more than your clients and can coach them in useful ways that solve their problems, then you can look to consulting. I have years of experience in content marketing and consult entrepreneurs on how to grow their businesses. Although I’ve had a lot of success, there are plenty of other people out there who are more experienced and earn more than me. There’s room for people with various strengths and niches in any industry.

3. You Can Invest in Real Estate Without a Degree (or a Lot of Money)

There is no degree required to start investing in real estate. And I’m not just talking about flipping homes or buying rental property. You can start investing in commercial real estate without a degree or even much money.

Crowdsourcing has become a popular way to do this. Sites like Realty Mogul offer investment opportunities for a few thousand dollars. Their properties range from hotels to office buildings to storage units. As you build up your portfolio and earn more money, you can look to commercial real estate opportunities in your own community to make a name for yourself.

4. There Are Still Plenty of Jobs That Pay Six Figures Without a 4-Year Degree

It’s really not necessary to go to college to earn six figures in this day and age. A degree isn’t required for air traffic controllers, yet they have the opportunity to earn six figures within a few years. Real estate brokers and technical writers also don’t need degrees to work in their fields, yet they have high earning potential.

You can also lean on your own skills to earn six figures. That’s how I ultimately went from college dropout to high earner. Or you can get inspired by Millennial Lauren Holliday, a college dropout turned waitress turned self-taught full stack marketer who landed a dream job and started earning six figures. She later went out on her own to earn more and help others learn more about marketing.

5. Student Debt Can Crush Your Dreams

You don’t need a degree if it’s going to put you far into debt with no light at the end of the tunnel. Student loan statistics are grim with over 44.2 million Americans saddled with student loan debt. According to research from Student Loan Hero, the delinquency rate is 11.2% and the average monthly student loan payment for borrowers 20 to 30 years old is $ 351.

Think about what would happen if you didn’t have that loan payment. You could invest that $ 351 into your own business or self-learning to create the kind of career and income stream you’re looking for.

6. Your Degree Could Be Useless By the Time You Graduate

I’m not necessarily against college, but it is a risk. You’re putting a lot of time and money into a degree that may or may not be obsolete by the time you’re ready to use it.

However, even if the degree itself is still useful in opening some doors, it doesn’t mean you’re really ready for the job market. Technology and business processes and trends age quickly. It’s hard to keep up with changing trends when you’re stuck behind your textbooks for four years.

7. You Don’t Learn Grit in College

Author and psychologist Dr. Angela Lee Duckworth says grit can determine success. In her popular TED talk, she explained: “Grit is passion and perseverance for very long-term goals.”

Grit isn’t learned from textbooks and taking tests. It’s learned from being out there in the world and struggling through challenges and figuring out how to make things work. Your own grit might be learned through launching a freelance career or startup, securing funding for your business or traveling the world and working remotely.

At the end of the day, you don’t need a degree to give you permission to succeed and earn big. While a degree may be useful to help grow your skills and make new connections, it is not a prerequisite to becoming a leader in your industry. Success is a mindset and the result of hard work – and it can absolutely be achieved without your learning credentials in hand.

Did you skip out on college and achieve big success? Let us know about your experience by leaving a response below:

Tech

Is Sci-Fi a Religious Experience? Adam Savage Thinks So

Adam Savage is known as the long-time co-host of MythBusters, and he currently helps run the science and technology website Tested. His latest project is a science fiction interview show called Syfy25: Origin Stories, which he produced in partnership with Syfy.

“Science fiction has meant so much to me over the years that the minute it got mentioned to me I was like, ‘Yeah! I’m in,’” Savage says in Episode 276 of the Geek’s Guide to the Galaxy podcast.

Guests include showrunners like Ron Moore and David X. Cohen, authors like Neil Gaiman and Nnedi Okorafor, and media personalities like Chris Hardwick and Kevin Smith. The show celebrates the rich history of sci-fi across various media, and also explores the power of science fiction stories to make people think.

“It acts as a Trojan horse,” Savage says. “This was a constant refrain that my guests kept mentioning, that science fiction can bypass people’s normal partisan filters.”

Sci-fi has always faced hostility from people who don’t understand it, and its reputation has sometimes suffered from an association with low-budget films and TV shows. But Savage says the current state of the genre is very strong, and that first-rate productions like Blade Runner 2049 are sure to broaden its appeal even more.

“[This movie] is as lyrically allegorical and metaphorical as any piece of literature I have ever read,” he says. “It’s an amazing script, the performances are phenomenal, and the directing is as good as anything I’ve seen in film.”

He also notes that one of his guests, Kevin Smith, describes pop culture narratives like sci-fi movies and superhero comics as his “religion”—his source for meaning and moral guidance. So could science fiction evolve into something akin to an actual religion?

“I’m not positive that literature could satisfy that deep need for the transcendent, but I hope it can, because for me it really has,” Savage says. “I’ve gotten a tremendous amount from it over the years, not just entertainment, but also thinking about the ways I am a person, a father, a husband, a friend, a citizen.”

Listen to the complete interview with Adam Savage in Episode 276 of the Geek’s Guide to the Galaxy podcast (above). And check out some highlights from the discussion below.

Adam Savage on Blade Runner:

“I think that one of the ladders that human beings have been climbing for their entire existence is a ladder of understanding how precious consciousness really is. When we realize that there’s a full consciousness in front of us, our morality changes. … I think of the original Blade Runner as a terrific meditation on what it means to view the other, and to realize that the other might have a full consciousness, where we didn’t ascribe it. The wonderful [scene of] Harrison Ford saying, ‘She’s a replicant,’ and then immediately shifting to, ‘How can it not know what it is?’ He has to revert back to his innate racism about the replicants. And that allegory is still extant in the new film.”

Adam Savage on The Expanse:

“I will tell you one example of how great a family The Expanse is. I had traveled to Toronto to spend a week on the set of The Expanse, and I forgot—I can’t even remember what it was, it was like a razor or something like that. And I mentioned that I didn’t have it and didn’t have time to get it before I got back to my hotel that night, and one of the writers, Ty Franck, mentioned this to Steven Strait, the star of The Expanse, who turned out to live across the street from my hotel. And so half an hour after I got back to my hotel room, there was a knock on the door, and there was Steven with the thing that I needed. And I was like, ‘That’s a family, right? That’s beautiful.’ And that just made me feel all warm and fuzzy inside.”

Adam Savage on Star Trek:

“I’ve been seeing the response to the new Star Trek: Discovery, and I’m really excited about it. I got to spend some time with a few of the writers when I was at San Diego Comic-Con. But I think I will get to watch the new Star Trek in probably two days, that’s how busy I am right now. But look, the more Star Trek there is in the world, the better the world is. Because I think that Gene Roddenberry’s original vision still holds—a utopic vision of humanity in which our needs are met and we can use the extra mental space given by the fact that we’ve answered hunger and shelter and safety for all the citizens of the Earth to explore other cultures. [That’s] beautiful.”

Adam Savage on politics:

“My goal is to express myself politically in the politest way possible. I want to speak only in the way that I would if the person I am responding to was standing in front of me, and I compare everything that I say to that. I probably send one tweet for every 10 that I compose, because in my anger and my ire, I write lots of things that I don’t tweet, because I can see that I’m being—in my emotional response—divisive or exclusionary, and I don’t want to be. So I work really, really hard to be inclusive. I know that a lot of my fans from MythBusters don’t agree with me politically, I know that a lot of the Tested viewers that watch me online every week don’t necessarily agree with me politically, and that’s OK. I like to imagine though that if we were sitting at dinner we could agree on some basic precepts of how we take care of each other.”

Tech

Google Closer to Using Balloons for Telecom in Puerto Rico

Last Friday, engineers on Google’s internet-by-balloon Project Loon tweeted that they hoped to bring emergency connectivity to Puerto Rico after Hurricanes Irma and Maria left more than 90 percent of the island without cellphone coverage.

Just seven days later, the Federal Communications Commission Friday gave the company a green light to fly 30 balloons over Puerto Rico and the US Virgin Islands for up to six months.

If all goes to plan, Google’s balloons will soon help replace the thousands of cellphone towers knocked down by hurricane-strength winds. The balloons would provide voice and data service through local carriers to users’ phones.

The details of those arrangements aren’t complete. But in its application to the FCC, Google included letters and emails from eight wireless carriers in Puerto Rico, in which they consented for Loon to use their frequencies for disaster relief and to restore limited communications. Two of those agreements were dated Friday.

Google has previously deployed Loon to provide emergency phone service, in Peru following flooding there earlier this year. In Peru, Google had already been working closely with a local wireless network, Telefonica, to coordinate spectrum use and prepare handsets to work with its balloons.

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In Puerto Rico, “things are a little more complicated because we’re starting from scratch,” a Google spokesperson says. “Loon needs be integrated with a telco partner’s network—the balloons can’t do it alone.”

Project Loon was born in Google’s moonshot X division, with the aim of serving the half of the world’s population that is still without internet access. It has launched several successful pilot projects, but has yet to be deployed commercially on a wide scale. It also is embroiled in a lawsuit with Space Data, a small company accusing Google of patent infringement, misappropriation of trade secrets, and breach of contract following a failed acquisition bid.

With the FCC’s special temporary license in Puerto Rico, Google plans to work along the same lines as in Peru. Thirty Loon balloons will float 20 kilometers (12.5 miles) above the earth in the stratosphere, relaying communications between Google’s own ground stations connected to the surviving wireless networks, and users’ handsets.

Each balloon can serve 5,000 square kilometers (1,930 square miles), so the fleet is expected to provide service over all of Puerto Rico and potentially parts of the US Virgin Islands. Google said it would consult with networks in the British Virgin Islands to minimize interference there.

Another issue is that Google’s technology is still set up for Peru, so some handsets in Puerto Rico may need updates to use the balloon-connected service. Google says it is working on temporary over-the-air software fixes for affected devices, which could include handsets from Apple, Samsung, and LG.

With approval in hand, Google will turn to launching the balloons. Google could not say when it will fly or when service would begin, but a spokesperson said, “We’re sorting through a lot of possible options now and are grateful for the support we’re getting on the ground.”

Restoring voice and data communications cannot come quickly for some of the affected. On Tuesday, Mother Jones reported Puerto Rico governor Ricardo Rosselló as saying, “Some people, even though we’ve documented the fact… that we’ve delivered food and water, it hasn’t gotten to some of them. Now, it could be for a whole host of reasons. One of them could be that they couldn’t hear it; the information didn’t get to them.”

Tech

Switch Raises Big Money in Year’s Second Biggest Tech IPO

Data center operator held it’s initial public offering on Thursday.

Switch raised about $ 531.3 million from its initial public offering which was priced at $ 17 per share, making the data-center operator the second-largest U.S. technology listing this year.

The 31.3 million Class A share offering was priced above the proposed $ 14 to $ 16 per share range, giving it a market value of as much as $ 4.2 billion.

Switch, which was incorporated in June for the purpose of issuing the Class A shares in this offering, intends to use the proceeds to buy out investors in Switch Ltd. and take control of it as a holding company.

Las Vegas-based Switch, whose major customers include Amazon.com, eBay and PayPal, helps enterprises manage data by renting out its cloud service infrastructures on a contractual basis.

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The company, which also operates data centers in Michigan and Reno, Nev., posted net income of $ 35.3 million for the six months ended June 30, flat compared with the year-ago period.

Goldman Sachs, J.P.Morgan, BMO Capital Markets, Wells Fargo Securities were among top underwriters to the offering.

Tech

Indonesian e-commerce startup Kioson shares jump 50 percent on debut

JAKARTA (Reuters) – Shares of Indonesian e-commerce startup PT Kioson Komersial Indonesia Tbk surged 50 percent on its trading debut on Thursday.

The company sold 150 million shares at 300 rupiah each in its initial public offering to raise 45 billion rupiah ($ 3.3 million), it said in a statement.

The stock was trading at 450 rupiah as of 0208 GMT on the Jakarta Stock Exchange.

Reporting by Eveline Danubrata; Writing by Fergus Jensen; Editing by Amrutha Gayathri

Our Standards:The Thomson Reuters Trust Principles.

Tech

Yahoo says all three billion accounts hacked in 2013 data theft

(Reuters) – Yahoo on Tuesday said that all 3 billion of its accounts were hacked in a 2013 data theft, tripling its earlier estimate of the size of the largest breach in history, in a disclosure that attorneys said sharply increased the legal exposure of its new owner, Verizon Communications Inc (VZ.N).

The news expands the likely number and claims of class action lawsuits by shareholders and Yahoo account holders, they said. Yahoo, the early face of the internet for many in the world, already faced at least 41 consumer class-action lawsuits in U.S. federal and state courts, according to company securities filing in May.

John Yanchunis, a lawyer representing some of the affected Yahoo users, said a federal judge who allowed the case to go forward still had asked for more information to justify his clients’ claims.

“I think we have those facts now,” he said. “It’s really mind-numbing when you think about it.”

Yahoo said last December that data from more than 1 billion accounts was compromised in 2013, the largest of a series of thefts that forced Yahoo to cut the price of its assets in a sale to Verizon.

Yahoo on Tuesday said “recently obtained new intelligence” showed all user accounts had been affected. The company said the investigation indicated that the stolen information did not include passwords in clear text, payment card data, or bank account information.

But the information was protected with outdated, easy-to-crack encryption, according to academic experts. It also included security questions and backup email addresses, which could make it easier to break into other accounts held by the users.

Many Yahoo users have multiple accounts, so far fewer than 3 billion were affected, but the theft ranks as the largest to date, and a costly one for the internet pioneer.

Verizon in February lowered its original offer by $ 350 million for Yahoo assets in the wake of two massive cyber attacks at the internet company.

Some lawyers asked whether Verizon would look for a new opportunity to address the price.

“This is a bombshell,” said Mark Molumphy, lead counsel in a shareholder derivative lawsuit against Yahoo’s former leaders over disclosures about the hacks.

FILE PHOTO: A photo illustration shows a man in front of a Yahoo logo seen through a magnifying glass in front of a displayed cyber code on December 16, 2016. REUTERS/Dado Ruvic/Illustration/File Photo

Verizon did not respond to a request for comment about any possible lawsuit over the deal.

Verizon, the likely main target of legal actions, also could be challenged as it launches a new brand, Oath, to link its Yahoo, AOL and Huffington Post internet properties.

In August in the separate lawsuit brought by Yahoo’s users, U.S. Judge Lucy Koh in San Jose, California, ruled Yahoo must face nationwide litigation brought on behalf of owners accounts who said their personal information was compromised in the three breaches. Yanchunis, the lawyer for the users, said his team planned to use the new information later this month to expanding its allegations.

Also on Tuesday, Senator John Thune, chairman of the U.S. Senate Commerce Committee, said he plans to hold a hearing later this month over massive data breaches at Equifax Inc (EFX.N) and Yahoo. The U.S. Securities and Exchange Commission already had been probing Yahoo over the hacks.

The closing of the Verizon deal, which was first announced in July, had been delayed as the companies assessed the fallout from two data breaches that Yahoo disclosed last year. The company paid $ 4.48 billion for Yahoo’s core business.

A Yahoo official emphasized Tuesday that the 3 billion figure included many accounts that were opened but that were never, or only briefly, used.

The company said it was sending email notifications to additional affected user accounts.

The new revelation follows months of scrutiny by Yahoo, Verizon, cybersecurity firms and law enforcement that failed to identify the full scope of the 2013 hack.

The investigation underscores how difficult it was for companies to get ahead of hackers, even when they know their networks had been compromised, said David Kennedy, chief executive of cybersecurity firm TrustedSEC LLC.

Companies often do not have systems in place to gather up and store all the network activity that investigators could use to follow the hackers’ tracks.

“This is a real wake up call,” Kennedy said. “In most guesses, it is just guessing what they had access to.”

Reporting by Munsif Vengattil, Jim Finkle, Jim Christie, Jon Stempel, and David Shepardson; writing by Stephen Nellis in San Francisco; Editing by Andrew Hay and Lisa Shumaker

Our Standards:The Thomson Reuters Trust Principles.

Tech

Uber board set for contentious meeting over ex-CEO's power

SAN FRANCISCO (Reuters) – The board of Uber Technologies Inc [UBER.UL], including two new appointees of former Chief Executive Travis Kalanick, will meet on Tuesday to consider proposals that diminish the co-founder’s influence, strip early investors of supervoting power and secure a multibillion-dollar investment, sources said.

Proponents of the measures believe they can prevail on each issue, despite the addition to the board of two new directors named by Kalanick and a legal threat from early investors, two people familiar with the matter said.

Kalanick, ousted by investors in June, contends that fellow Uber board members are moving too fast on a dramatic restructuring and wants to delay a decision on governance changes, another source said. It is not clear how many measures will be voted on Tuesday.

The proposals are the latest flashpoint between Kalanick and Uber investors spearheaded by Silicon Valley’s Benchmark, which led the board revolt against Kalanick. Directors are divided about what role Kalanick should play and whether he should retain control over a large part of the board.

The company is seeking to shore up its reputation after a series of scandals. Proponents believe the proposals would improve corporate governance ahead of an expected initial public offering and illustrate the support of major new investors – SoftBank Group Corp and growth-oriented investor Dragoneer Investment Group.

Uber’s new chief executive, Dara Khosrowshahi, last week proposed cutting the number of board seats controlled by Kalanick to one from three, raising the seats effectively controlled by Khosrowshahi to five from one, and eliminating supervoting rights, which give early shareholders multiple votes per share.

A second proposal, which proponents intend to be linked to the first, would allow internet firm SoftBank and Dragoneer to invest around $ 10 billion in Uber, two sources said.

That would include about $ 1 billion in new Uber shares at the current $ 68 billion valuation, with the rest earmarked for buying shares from current investors at a discount, the sources said. It is not clear how many shares current investors would sell at the terms discussed.

Kalanick responded to the proposals on Friday by appointing former Xerox Chief Executive Officer Ursula Burns and former Merrill Lynch Chief Executive Officer John Thain to fill two open director seats. Benchmark and others have legally challenged his ability to name the directors.

Burns and Thain took their seats Monday and will be eligible to vote at Tuesday’s board meeting in San Francisco, three people said.

Still, if the changes in voting control pass, the company could face a legal roadblock. Venture capitalist Shervin Pishevar, investor Stephen Russell and other shareholders threatened Monday to sue directors who voted for the plan, including Kalanick.

Supervoting rights are valuable and important for holding the company accountable, they said. Stripping the rights without consent is unfair, according to a letter seen by Reuters from attorney Mark Geragos to Uber board members Kalanick, Garrett Camp and Ryan Graves.

Each of them stand to lose voting power because they hold shares that carry more than one vote a piece. Though unlikely to make all the concessions sought by fellow board members, Kalanick has shown willingness to cut supervoting rights in the name of strengthening governance, a source said.

“Our clients are confident that, following sober reflection, you will avoid this ill-advised misadventure,” Geragos wrote.

Switching to a one-vote-per-share policy could remove one reason for investors to hold onto Uber shares, creating more demand for SoftBank’s purchase offer. It could also help Uber, if it goes public, avoid being barred from the S&P 500 and other stock indexes that this year instituted rules against unequal voting rights.

Goldman Sachs, acting as a financial adviser to Uber’s board, has been working for weeks since an initial agreement with SoftBank to amass the shareholder proxies and support necessary to move forward with the transaction, according to a source.

Khosrowshahi, who is meeting London’s transportation regulator Tuesday to appeal the non-renewal of Uber’s operating license in the city, is expected to call into the board meeting, a source said.

Reporting By Paresh Dave and Liana Baker in San Francisco and Tom Hals in Wilmington, Delaware; Editing by Peter Henderson and Lisa Shumaker

Our Standards:The Thomson Reuters Trust Principles.

Tech

Equifax reviews its top lawyer's role in executive stock sales: WSJ

(Reuters) – Equifax Inc is reviewing its Chief Legal Officer John Kelly’s involvement in stock sales by company executives made weeks before the credit-reporting service disclosed a massive data breach, the Wall Street Journal reported on Sunday.

Three senior executives including the company’s chief financial officer sold $ 1.8 million in shares within three days of the company learning on July 29 that hackers had breached personal data for up to 143 million Americans.

Kelly had the responsibility for approving the share sales and is also central to broader questions facing the Equifax’s board because he is responsible for security at the company, the WSJ reported, citing people familiar with the matter. on.wsj.com/2fE8fAf

Kelley had broad responsibilities beyond legal services in his position at Equifax that differed from peers at rival credit-reporting companies, WSJ said.

Equifax was not immediately available for comment.

In a letter to the U.S. House of Representatives, made public on Friday, Equifax said its board of directors has formed a special committee to review the stock sales.

The data breach was disclosed publicly on Sept. 7 and has since sparked a public outcry, government investigations, a sharp drop in the company’s share price and a management shake-up.

Reporting by Ismail Shakil in Bengaluru; Editing by Sandra Maler

Our Standards:The Thomson Reuters Trust Principles.

Tech

Every Fast-Growing Company Knows This…. The Customer Must Come First

How many times have you walked into a restaurant with plenty of free tables, only to have wait while a waiter busily cleared the dishes left behind by departed diners from another table? How many times have you gone up to a check-out counter ready to make a purchase and stood unhelped by a salesperson who was engrossed in reshelving inventory that others had not chosen to take home? How many times have you watched someone field a personal phone call instead of reaching out to a customer in her midst? Undoubtedly, the answer is countless. Why? Because many business owners have either never understood or somehow forgotten, the importance of putting the customer first. I have found that keeping this one idea–that of framing everything my company does in terms of the customer’s needs–at the heart of my business strategy has netted growth at every stage of my business. Here are some simple ways I do so.

Ask employees to handle customers before inventory. Regardless of how messy your shelves may look, how many tables are left uncleared, or how many items need to be restocked, all of those issues will be there long after your customer is gone. Help your customer first, and put every other task behind him in line. You don’t want to let your customer walk out the door empty-handed because you’re engaged in something other than seeing to his needs. You have his attention for as long as he is willing to give it to you, and that depends entirely on how important, valuable, and significant you make him feel.

Instruct staff that, when on the clock, their personal lives take a backseat to the customer’s experience. People seem to blur the lines of personal and professional more and more every day, and when they get caught up in their own interests, they forget everything else around them. Ask employees to put away their phones, table intra-staff conflicts, and silence any unnecessary chatter when customers are within eyesight and earshot. A customer should never be made to feel like a burden, an interruption, or downright uncomfortable when he is visiting your company and considering buying something.

Prioritize a customer who is ready to purchase over everything else. Deciding to purchase is a very emotional experience. It’s when a customer feels most vulnerable because he is about to hand over his money and he wants to know he is giving it to a company that deserves it. Take him in hand quickly, so he feels reassured that he is making the right decision. Whether this means accompanying him to the point of purchase, showing you are ready to take his order immediately, or just asking if he needs help, the important thing is to be alert, attentive, and accommodating.

Customers are precious. They walk through our doors fleetingly, unless we are prepared for their arrival, forthcoming with our help, and devoted to their needs. It is only by peaking their interest, earning their support, and winning their business that we can grow.

Tech

Uber's Kalanick reignites power struggle, names two to board

SAN FRANCISCO (Reuters) – Uber Technologies Inc [UBER.UL] co-founder Travis Kalanick on Friday said he had appointed two new directors, a surprise move that publicly reignited a board battle over the role of the ousted former chief executive.

Uber investors are divided over whether Kalanick, who was pressured to step down as CEO earlier this year in the wake of several company scandals, should himself be on the board and whether he can name two other directors.

The company and new Chief Executive Dara Khosrowshahi are scrambling to portray Uber as a reformed company that is responding to concerns including sexual harassment claims and a U.S. bribery probe.

Kalanick, still one of the largest shareholders, said in a statement he had appointed former Xerox Chief Executive Ursula Burns and former Merrill Lynch Chief Executive John Thain as directors.

“I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company’s voting rights. It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John,” he said. He did not specify the proposals he opposed.

The appointments were a ”complete surprise“ to Uber and its board, the company said in a statement. ”That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of,” it added.

An investor who has supported Kalanick, Yucaipa Companies managing partner Ron Burkle, praised the appointments on Friday, calling Burns and Thain “smart, high-quality people.”

Division among Uber investors exploded in public in August, when Benchmark Capital filed a lawsuit to force Kalanick off the board and rescind his ability to fill two other seats on the panel, accusing him of concealing a range of misdeeds. Yucaipa and other Uber investors defended Kalanick and asked Benchmark to divest its own shares and step down from the board.

A Delaware judge later that month stayed the Benchmark lawsuit and sent it to arbitration, pushing the dispute out of public view and delivering Kalanick a victory.

Kalanick’s action on Friday could be subject to a new legal challenge. Benchmark or other Uber investors could attempt to block the appointments by asking the Delaware judge to issue a so-called “status-quo order.” The judge last month did not grant such a request.

Kalanick’s lawyer at the time told the court that Kalanick had not rushed to fill the seats. The New York Times also quoted Kalanick’s lawyer as telling the court Kalanick had the power to fill the seats under the pre-arbitration “status quo.”

Benchmark did not immediately respond to a request for comment.

Reporting by Liana B. Baker and Paresh Dave; Writing by Peter Henderson; Editing by David Gregorio and Lisa Shumaker

Our Standards:The Thomson Reuters Trust Principles.

Tech

The Cobalt Cliff Will Crush Tesla's Business And May Restore Some Sanity To The EV Industry

A brief history of the EV industry

The birth of the EV industry is usually pegged to the summer of 2008 when crude oil prices peaked above $ 140 per barrel. Tesla (TSLA) was a few months from launching its electric Roadster and I started blogging on battery investing for Seeking Alpha.

At the time, the DOE and everybody in the auto industry pegged their EV hopes and dreams on lithium manganese oxide, or LMO, and lithium iron phosphate, or LFP, batteries. The reasons were simple. Both chemistries had great performance profiles for EVs and both chemistries were made using cheap and abundant raw materials – lithium, manganese and iron.

The sole renegade was Tesla, which planned to use consumer grade cells and a nickel-cobalt chemistry instead of more costly automotive grade LMO and LFP cells. Tesla’s theory, which had more than a touch of genius, was that using consumer grade cells would allow it to over-build its battery packs to improve safety and slow cell degradation while pitching a 300-mile range with neck snapping acceleration as major advantages, even though most Tesla owners would crawl through city traffic with the rest of us and average less than 35 miles of daily driving.

While Tesla’s electric muscle cars have always been energy, emissions and economic nightmares, the sales pitch resonated with one percenters who were drawn to Tesla’s richly subsidized eco-bling like moths to a flame.

The consumer response was so strong that most players in the EV industry are moving away from LMO and LFP batteries and embracing high-energy nickel manganese cobalt, or NMC, batteries.

The EV industry’s transition away from cheap and abundant raw materials in favor of costly nickel and cobalt will not end well.

The cobalt cliff

Over the last 18 months I’ve repeatedly cautioned readers that intrinsic and unavoidable constraints on cobalt production would create insurmountable obstacles to the widespread deployment of long-range EVs with high energy nickel-cobalt batteries.

While the problems will be shared by all automakers that have launched or plan to launch EV products with nickel-cobalt batteries, most will be able to roll with the punches and adjust their business models to accommodate the vulgar exigencies of cobalt production dynamics.

Tesla stands alone as an EV manufacturer that cannot implement its business plan, or for that matter continue in business, without easy access to unlimited cobalt supplies. In my view, Tesla’s failure to secure a robust and reliable cobalt supply chain before starting construction for its Nevada Gigafactory is the biggest OOOPs in the history of supply chain management.

Frankly, Tesla’s cobalt predicament reminds me of the cliff sequence in the 1991 movie classic Thelma and Louise:

In March 2016, the first of my five prior articles on the Cobalt Cliff explained:

  • Cobalt is an essential raw material for all high-energy lithium-ion cells and the battery industry accounted for 44% of cobalt consumption in 2015.
  • Cobalt is also an essential raw material for superalloys, machine tools, catalysts, pigments and other high value products that accounted for 56% of cobalt consumption in 2015.
  • Roughly 90% of cobalt supplies come from copper (60%) and nickel mines (30%) that produce cobalt as a minor byproduct.
  • The other 10% comes from primary cobalt mines (2%) and “artisanal” cobalt mines in the DRC (8%) that reportedly rely on slave and child labor.
  • Reliance on a byproduct is incredibly risky because availability always is tied to demand for the primary product; in this case nickel and copper.
  • Without rock solid supply contracts, Gigafactory owners will find themselves between a rock and a hard place as they try to outbid other companies that need cobalt for higher value products.
  • The likely price of supply chain failure will be business failure because you cannot make EVs without batteries and battery Gigafactories cannot operate profitably without robust and reliable raw material supply chains.

In the last 18 months, several events, developments and reports have corroborated, ratified and reinforced my original thesis, including:

Market Price

Cobalt prices have soared from $ 10.50 per pound in March 2016 to a recent high of $ 28.35 per pound.

Major Mine Purchase

In May 2016 China Molybdenum bought a 56% stake in the DRC’s Tenke Fungurume Mine from Freeport McMoRan for $ 2.65 billion and gained control over 10% of global cobalt production in a single transaction.

In July 2017, China Moly facilitated BHR Partners’ purchase of a 24% stake in the Tenke Mine from Lundin Mining for $ 1.14 billion.

China Dominates Cobalt Refining

Between the Tenke purchase and contracts to finance the Eurasian Resource Group’s Roan Tailings Project, Chinese interests will control at least 60% of the world’s refined cobalt production for the foreseeable future.

Updated Chinese Subsidy Regime

In January 2017, China updated its subsidy regime for new energy vehicles to favor higher energy densities and longer travel ranges while permitting the use of nickel-cobalt battery chemistries. As a result, a significant portion of the China market that was previously dominated by cobalt-free batteries is likely to change chemistries.

Bernstein’s 2017 Black Book

In March 2017 Bernstein released the latest version of its EV Black Book which devotes 60 of its 271 pages to cathode powder formulations, raw material requirements and the principal players in those markets.

In their slow adoption scenario, Bernstein expects the battery market for passenger EVs to exceed 360 GWh per year by 2025, which implies an annual cobalt demand of roughly 55,000 tonnes.

Interestingly, Bernstein also forecast a mining industry capital spending requirement of $ 350 to $ 750 billion to support a full transition to EVs and noted “the lead time required for conversion of exploration success into an operating mine has lengthened considerably and now stands at ~30 years.”

Ultimately, Bernstein’s battery materials discussion concludes, “Either the world must do without EVs or it must pay more for the commodities it consumes, the choice really is as simple as that.”

UBS Bolt Teardown

In May 2017, UBS published the results of their teardown analysis of a GM Bolt EV and estimated that global cobalt production would need to increase by 1928% to support an annual EV build of 100 million units. My estimate of a mere 900% global cobalt production growth requirement pales in comparison.

Morgan Stanley Cobalt Report

In June 2017, Morgan Stanley issued a 25-page commodity report on cobalt that surveyed planned capacity additions and forecast primary refined cobalt supply growth from 94.4 tonnes in 2016 to 148,300 tonnes in 2025.

On the demand side, Morgan Stanley forecast that in 2025, 59,600 tonnes of cobalt would be used for non-battery applications, and 47,500 tonnes would be used for consumer products batteries, which would leave 41,200 tonnes for use in EV batteries.

VW’s Glencore contract

In July 2017, we learned that Contemporary Amperex Technology and its customer Volkswagen signed a four year 5,000 TPY cobalt offtake agreement with Glencore last fall.

VW’s Contract Solicitation

In September 2017, we learned that VW is soliciting 10-year requirements-based cobalt offtake commitments for 16,000 to 24,000 TPY and wants contracts in place this year.

Until recently, I wasn’t completely convinced that leading automakers were truly committed to their EV initiatives. While the Chinese are deadly serious about promoting new energy vehicles as a mean of reducing pollution in their mega-cities, Nissan (OTCPK:NSANY), Tesla, GM (NYSE:GM) and BMW were the only western automakers with credible EV programs. That dynamic changed after dieselgate when VW came to the EV party with a vengeance, partly as penance for past sins and partly in response to Germany’s increasing political support for electric drive.

In its “Global EV Outlook 2017” the International Energy Agency summarized the electric car ambitions of the world’s automakers as follows:

BMW

100,000 electric car sales in 2017; and
15-25% of the BMW group’s sales by 2025.

Chevrolet

30,000 annual electric car sales by 2017

Chinese OEMs

4.52 million annual electric car sales by 2020

Daimler

100,000 annual electric car sales by 2020

Ford

13 new EV models by 2020

Honda

Two-thirds of the 2030 sales to be electrified vehicles
(including hybrids, PHEVs, BEVs and FCEVs)

Renault-Nissan

1.5 million cumulative sales of electric cars by 2020

Tesla

500,000 annual electric car sales by 2018; and
1 million annual electric car sales by 2020

Volkswagen

2-3 million annual electric car sales by 2025

Volvo

1 million cumulative electric car sales by 2025

With an average cobalt content of 8 kg per car, the 41,200 tonnes available for EV batteries in 2025 will only support the manufacture of 5.15 million EVs, a little over half of the aspirational totals set forth above.

At this point I have to believe the EV revolution has entered a melee phase where there won’t be enough cobalt to satisfy everybody’s needs and anyone who wants to play the game will have to stand toe-to-toe and compete for cobalt supplies with China Inc. and six of the world’s ten largest automakers.

I don’t think Tesla is up to the business challenge establishing robust and reliable supply chains in the face of relentless competition from the big boys.

I know it lacks the financial strength to stand toe-to-toe with the big boys in a bidding war.

I can almost hear Elon Musk and JB Straubel reprising a Tesla version Thelma’s last conversation with Louise.

Conclusion

Benjamin Graham, the father of value investing, once explained that in the short run, the market acts like a voting machine – tallying up which firms are popular and unpopular. But in the long run, the market acts like a weighing machine – assessing the substance of a company. Tesla is clearly a voting machine stock that will maintain an irrational value until the market starts to act like a weighing machine. Since I expected Tesla’s stock to crumble when it was trading in the $ 30s, I haven’t a clue when that will happen.

This article focuses on a third reason why I think Tesla’s business model is fatally flawed and its inherent investment value is zero. I will discuss others in future articles. The biggest challenge with macro issues like the cobalt supply and dynamics discussed in this article is that it’s almost impossible to predict when an unavoidable outcome will occur. In my experience, being right about an unavoidable outcome too early isn’t much better than being wrong.

Since Elon Musk is the most talented stock promoter I’ve ever seen and I’ve never shorted a stock, I have no advice to offer Tesla bears. That being said, I wouldn’t own an un-hedged long position in Tesla because the downside risk is enormous.

From my perspective the only safe place to watch this circus is the sidelines.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Tech

How To Create The Scar Tissue You Need To Win

In CrossFit they’re called “chippers.” These are unusually long workouts that can feel like they’ll never end. They’re called chippers because, in order to survive the workout, you just need to keep chipping away until you succeed.

It’s in the midst of these workouts where I tend to go to what I call “my dark place.” The corner of my brain where the ugly trolls live.

You have those trolls too, don’t you?

Mine tells me I should stop the workout. “What’s the point?” the troll asks. “Nobody cares if you quit. Who do you think you are, and what do you think you’re proving?”

The troll scratches at my psyche. Making it bleed.

I love these workouts. When they’re over, I find usually find myself lying on my back in a puddle of my own sweat. My panting finally returns to a normal cadence of breathing. The scowl on my face regains its normal state. And then, something magical happens.

I smile. Not a smirk, or a grin. A huge, ear to ear smile. Most times, I laugh. Truly.

Then I get up and go about my day.

The workouts are challenging on my body, for sure. Their real value is when they get into my head.

They help me build my scar tissue.

The workouts unlock the trolls from the dark recesses of my mind and set them loose on me. It’s like summoning all the demons I’ve ever encountered in my adult life. Intentionally.

Maybe it’s a bit sick. But I love doing it.

That’s because before I did workouts like this, I believed the trolls. I’d collapse from their incessant shouting. I’d agree. I’d stop, I’d complain, I’d lay down. I’d stop fighting.

Now, I laugh. Now, when they scratch at my psyche, there’s scar tissue there. They scratch, and scream and bellow, but they can’t cut me.

Now I know their little game. I’ve done it so often. It’s fun for me.

It’s like when I decided that wanted to be a public speaker. I volunteered to speak wherever I could. Terrified, I’d get on stage, and sure enough the trolls would come out of the deep recesses of my mind. “Who do you think you are?” They’d say. “Why would anyone want to listen to you?” I’d keep speaking, and I’d feel rattled to my core.

At first, it hurt, and I’d bleed. Then, after the fortieth time on stage, I would laugh when I’d hear the trolls. Because I’ve pushed myself to the edges, and come back with some great stories to tell.

They can’t penetrate scar tissue like that.

I love pushing my personal boundaries. Because I know that if I summon the trolls on my own terms, I can allow them to scratch and claw. They can help me build scar tissue. So that when real challenges come to me in my life, I have a protective mental shield.

But if I don’t practice summoning them on my own terms, I could get into real trouble. I could believe them. But because I summon them on my own terms, and regularly. I have deep scar tissue.

So when I found myself resting my head on my Father’s chest as he took his last breath, it hurt me, but it didn’t shatter me.

I survived because I have scar tissue.

I’ve built that mental muscle. I’ve pushed my boundaries, and I know what to do when I’m pressed physically, mentally and emotionally.

Create terrifying outlandish scenarios for yourself and build your scar tissue. Don’t let those little trolls loose, unless it’s on your own terms.

Tech

Mattel seeks Pokemon-style boost from new HotWheels game

(Reuters) – Mattel and tech company Osmo will launch an augmented reality version of Hotwheels toy cars on Thursday that seeks to duplicate the worldwide success of smartphone app Pokemon Go.

The Mindracers app gives users a prepackaged set of six of the famous toy cars and an iPad base which launches them on tracks that propels the driver into a virtual world on the tablet’s screen, simulating a car race.

It is among the first results of Mattel’s efforts to invest heavily in augmented and virtual reality features to their products at a time when traditional toymakers are struggling with changing patterns of play and toy store closures.

The world’s biggest toymaker slashed its dividend by nearly 60 percent earlier this year to divert more money into developing innovative tech toys and expanding into emerging markets such as China.

Tech company Osmo, founded by ex-Google employees Pramod Sharma and Jerome Scholler three years ago, has priced the Mindracers kit at $ 59 on Amazon.com and its own website.

Mattel, which holds a stake in Osmo along with fellow toy company Houghton Mifflin Harcourt and venture capital firm Shea Ventures LLC, will share an undisclosed percentage of sales revenues, Sharma said.

”Hot Wheels created an iconic childhood toy by inspiring imaginations with healthy play centered on physical cars,” Osmo chief executive Sharma told Reuters.

“We’re taking that beloved experience and blending it with the power of computer vision and AI to bring these cars to life.”

Reporting by Siddharth Cavale in Bengaluru; editing by Patrick Graham

Our Standards:The Thomson Reuters Trust Principles.

Tech

Uniti Falls On Windstream Bondholder Claims Of Default

Windstream (WIN) recently announced that a bondholder of the 6.375% notes due 2023 has submitted a written claim that WIN has defaulted. This claim was based on allegations that the spinoff of CSAL, now Uniti Group (UNIT), violated the terms of the note which restrict the conditions in which WIN can perform a sale and leaseback transaction.

Shares of both stocks are down materially on the news (intraday 9/26/17).

Our take

First of all, let me confess to being a layman on legal issues. I am a REIT analyst, not a lawyer so there could be subtleties that I am missing which could affect the outcome of this litigation. Throughout our analysis, I will provide links to the referenced documents so perhaps someone with a better legal mind can catch on and share with other readers if I have made any errors.

This article will be from the perspective of someone who is long UNIT, so it will be more focused on the indirect implications for Uniti rather than the direct implications for WIN.

Involved party

While the press release leaves the bondholder anonymous, we are fairly confident it is Aurelius Capital, a hedge fund known for buying distressed debt and trying to extract value through litigation. Our evidence for this identification is based on management’s pre-emptive response upon Aurelius obtaining a position in the note in question.

Allegations and defense

Windstream has responded to the allegations with claims of debt covenant compliance. Specifically, they say

“The transactions did not constitute a Sale and Leaseback Transaction, and the Company asserts no default occurred”

I actually disagree with Windstream here. The language set forth in the document (8-K) which details the terms of the notes is sufficiently vague that I think the spinoff would be considered a sale and leaseback transaction. Here is the language used:

Sale and Leaseback Transaction means, with respect to any Person, any transaction involving any of the assets or properties of such Person whether now owned or hereafter acquired, whereby such Person sells or otherwise transfers such assets or properties and then or thereafter leases such assets or properties or any part thereof or any other assets or properties which such Person intends to use for substantially the same purpose or purposes as the assets or properties sold or transferred.”

Since it was a spin-off, WIN did not technically sell the assets, but I think it would count as assets being ‘otherwise transferred’. Thus, I think WIN is wrong in suggesting it was not a sale and leaseback.

That being said, a sale and leaseback does not automatically constitute a default on the note as the same 8-K details the conditions in which a sale and leaseback is ok. We have pasted the language below.

Section 4.09 stipulates that it cannot cause debt to be greater than 4.5 to 1. This was not violated at the time of the spin-off and in fact, even now that WIN is distressed, debt is still not greater than 4.5 to 1. Since no liens were incurred as a result of the spin-off, I think I-B is passed as well.

Fair market value is sufficiently subjective that WIN should be able to defend this if it goes to court. Finally, WIN passes criteria III as the proceeds of sale from the retained UNIT stock went largely to paying down debt and/or buying replacement assets like Broadview.

While I do think the spinoff would have counted as a sale and leaseback transaction, I think it passed the criteria for the type of sale and leaseback transaction that would be allowed under the stipulated note covenants.

Professional opinion

Some of this legal language has room for interpretation and I am not the sharpest instrument for the job, so although I think WIN is safe from this litigation, please take my opinion with a grain of salt. I am comforted, however, to know that a couple of professional legal teams seem to agree with me. According to Debtwire, WIN’s corporate counsel, Skadden Arps, has reaffirmed that the spin-off was kosher regarding debt covenants. WIN hired a second unnamed legal team to come in and review the situation and this second team had the same conclusion.

Both of these legal reviews took place in the days and weeks before the letter from Aurelius, so I suspect that given the hedge fund’s reputation, WIN saw the letter coming and built their legal defense early as soon as Aurelius was known as an investor in the bond.

What if I’m wrong?

I find it useful to also explore what could happen in the event that I am wrong and Aurelius succeeds in declaring a default. Essentially what would happen is it would accelerate the 2023 maturity to the near term. The bond in question is the 6.38% coupon shown below.

I do not think WIN would struggle to pay the 2023 debt, but with the $ 586mm coming due now instead of in 2023, it would become significantly more difficult for WIN to service its $ 700mm coming due in 2020.

If this happens, I think WIN will be relying on asset sales to pay the debt wall, so its fate would rely on being able to get a good price. Infrastructure assets are in high demand right now so that bodes well for them, but the buyers may sense the urgency in WIN which could hurt its negotiating power.

While unlikely, I think it is plausible that WIN could be sent into chapter 11 bankruptcy at the 2020 maturity if the 2023 has to be paid before then.

What does this mean for UNIT?

UNIT’s lease is senior to the senior debt and as a master lease would be assumed or rejected in its entirety in the bankruptcy court. Thus, the fate of the lease payments rests in the mission-critical nature of the assets. At this point, WIN is highly dependent on the fiber owned by UNIT for its revenues, so we suspect the debtors would choose to honor the lease in order to keep the revenues flowing.

Something to keep an eye on is how much WIN is able to diversify away from the UNIT assets. Perhaps new business segments for the enterprise will be more software or IT service based and less reliant upon the pure connectivity of fiber. Once the service side of WIN hits a critical mass, it could become plausible for them to reject the UNIT lease in a bankruptcy court.

At this point, I do not think WIN is anywhere near that level of diversification, it is merely something on which we should keep an eye.

Conclusion

With UNIT dipping nearly 10% on the news off of an already reduced price, I bought more UNIT. At a nearly 15% dividend yield fully covered by AFFO, a significant amount of negative future events are already priced in. If WIN can successfully fend off Aurelius, UNIT should get a nice pop in its share price.

Disclosure: 2nd Market Capital and its affiliated accounts are long UNIT. I am personally long UNIT. This article is provided for informational purposes only. It is not a recommendation to buy or sell any security and is strictly the opinion of the writer. The information contained in this article is impersonal and not tailored to the investment needs of any particular person. It does not constitute a recommendation that any particular security or strategy is suitable for a specific person. Investing in publicly held securities is speculative and involves risk, including the possible loss of principal. The reader must determine whether any investment is suitable and accepts responsibility for their investment decisions. Dane Bowler is an investment advisor representative of 2MCAC, a Wisconsin registered investment advisor. Commentary may contain forward-looking statements which are by definition uncertain. Actual results may differ materially from our forecasts or estimations, and 2MCAC and its affiliates- cannot be held liable for the use of and reliance upon the opinions, estimates, forecasts and findings in this article.

Disclosure: I am/we are long UNIT.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Tech

Uber defends business model at UK tribunal on worker rights

LONDON (Reuters) – Uber went to a British employment appeal tribunal on Wednesday to argue its drivers are self-employed, not workers entitled to a range of extra benefits, less than a week after the firm was told it would lose its London license.

The U.S. ride-hailing service has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services and concern among some regulators. It has been forced to quit several countries, such as Denmark and Hungary.

Losing its license in London, one of the world’s wealthiest cities, is one of the U.S. technology firm’s biggest setbacks so far. The London regulator cited the firm’s approach to reporting serious criminal offences and background checks on drivers.

It can operate during its appeal, which could last months.

Last year, two drivers successfully argued at a tribunal that Uber exerted significant control over them to provide an on-demand taxi service and had responsibilities in terms of workers’ rights.

At the two-day appeal hearing starting on Wednesday Uber will argue its drivers are self-employed and work the same way as those at long-established local taxi firms, according to a court document seen by Reuters.

The self-employed are entitled to only basic protections such as health and safety, but workers receive benefits such as the minimum wage, paid holidays and rest breaks. This would add to Uber’s costs and bureaucracy across Britain.

“Almost all taxi and private-hire drivers have been self-employed for decades before our app existed,” an Uber spokesman said before Wednesday’s hearing.

“Uber drivers have more control and are totally free to choose if, when and where they drive with no shifts or minimum hours,” he said.

Around 200 trade union-led protesters marched through central London on Wednesday against what they deem “precarious labor” in the “gig economy”, where people work for various employers at the same time without fixed contracts.

Some, however, opposed the decision by London’s regulator to strip Uber of its license, saying the firm should be allowed to operate but must grant workers’ rights.

In a bid to strengthen itself in Britain, Uber said on Wednesday it was seeking to appoint a UK chairman, a newly created non-executive role which it began recruiting for around six weeks ago.

Uber faces a further challenge as law firm Leigh Day said it would represent a female driver who says Uber is putting her and other women at risk as drivers do not know the passenger’s destination until they get in the car, and that could mean traveling to a remote or unsafe area.

An Uber spokesman said drivers could cancel trips without penalty and did not have to go to a particular area if they did not want to. He said many women worked for Uber due to its safety features.

“One of the main reasons why women choose to drive with Uber is because of the safety features in the app. All trips are GPS tracked and a driver is able to share a live map of their trip with a friend or loved one,” he said.

Reporting by Costas Pitas; Editing by William Schomberg and Andrew Roche

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