Convene uses landlord partnership model to outclass WeWork

Recent reports that Softbank may take a majority stake in WeWork has added fuel to the already hot market for start-ups in the workspace and property tech sectors. One of the more compelling companies that stands to benefit from this trend is New York-based Convene. Started by co-founders Ryan Simonetti (CEO) and Chris Kelly (President), 500-person strong Convene has distinguished itself as a top-tier provider of meeting, event and flexible workspace offerings in its 21 locations. But unlike freelance-heavy WeWork and other co-working companies who cater to 1-10 person companies, Convene puts owners of Class A office buildings at the center of its business model. The goal is to help these landlords provide tenants with the high-end of amenities of, say a unicorn tech startup.

On the back of the company’s recent $152 million Series D, Simonetti and Kelly were eager to discuss new initiatives including a co-branded turnkey workplace and amenity solution and their plans to launch additional Convene locations, including London. They also elaborate on how they plan to benefit during the next recession and open up on their differences with category giant WeWork. Finally, they explain why paintings by renowned artists including Picasso and Calder are tucked into corners of the company’s first, soon-to-be-opened members club at Rockefeller Center.

Gregg Schoenberg: Ryan and Chris. It’s great to see you both. To kick things off, I want to establish that Convene is not a typical startup in that you’ve been around for about nine years.

Ryan Simonetti: Yes, is that called being washed-up in the start-up world?

GS: Not necessarily. Tell me about where the idea for Convene came from?

RS: Chris and I met during our freshman year orientation at Villanova University, ended-up pledging the same fraternity and spent a lot of time getting to know each other. From the beginning, we were probably two of the more entrepreneurial guys at Villanova. We sold used textbooks, spring break trips, parties into Philadelphia. If there was a way to monetize something in college, we were the two guys that were trying do it.

GS: Two scrappy guys from Villanova.

RS: Yes, we’ve always joked that we were probably the only kids at Villanova who didn’t have our parents’ credit cards.

GS: So years later, what was that catalyzing moment where you said, “Okay, here’s the idea for Convene”?

Chris Kelly: I remember two phone calls from Ryan that represent the earliest seeds of Convene. The first phone call was in the middle of the financial collapse, and in that phone call, Ryan said, “We’re about to witness the largest shift of wealth that the world has ever seen and we have to figure out how to be on the winning end of that.” Then a few weeks later, Ryan called me up and introduced the crazy idea for Convene.

GS: And what was that specific pitch?

CS: He walked me through the Grand Hyatt in Midtown Manhattan and said, “Look at the way these guys are doing business. This is a $60 million a year catering and meetings operation that was in essence being outsourced to hotels.”

“Just like Airbnb would tell you that their primary stakeholder is the homeowner, or OpenTable would tell you the primary stakeholder is a restaurateur, we view the building owner as our primary stakeholder.”

GS: And you’re saying hotels weren’t doing a great job?

CS: Hotels simply didn’t have the sensibility about what people really need in a business environment. They treated a shareholder meeting like a wedding with a projector. And we saw a huge opportunity to create spaces that met enterprise workplace requirements.

GS: So fast forward to today and tell me exactly what Convene is, because I think sometimes people struggle and just say, “Well you’re a WeWork competitor on the premium end.”

RS: We partner with Class A building owners to design places where people can meet, work and be inspired. It’s not any more complicated than that.

CS: To build on that, you could say that we’re essentially allowing landlords to offer Googleplex-style workplace experiences.

RS: That’s a big challenge for even large organizations. Look at Google, Facebook or JP Morgan. These companies can deliver an amazing experience at their corporate headquarters location. But in their smaller offices, it’s really tough to deliver a corporate HQ experience if you only have five, ten, or 15,000 square feet. You can’t build the kitchen infrastructure, or the gym, or all of those other things. So to Chris’s point, we’re democratizing access to that experience, and doing it with the landlord as the key partner.

GS: So the landlords are the core client?

RS: Just like Airbnb would tell you that their primary stakeholder is the homeowner, or OpenTable would tell you the primary stakeholder is a restaurateur, we view the building owner as our primary stakeholder. And what we’re helping them do is respond to the changing demands of today’s tenant, who want increased flexibility and better agility to adapt to change.

GS: I take it marrying technology infrastructure to the physical spaces is key to that, which is why you recently bought Beco. What exactly do they do?

RS: Beco is a workplace analytics platform that’s using sensor-based technology to help us, our landlord partners and our corporate clients better understand the way that people are actually interacting with space and services.

“But what really differentiates us strategically is that we’re not trying to build our own supply chain or our own inventories.”

GS: As you contemplated that acquisition, were you worried that it might be perceived to some of your traditional clients as Big Brothery?

RS: Look, everyone today is concerned about data privacy, and rightfully so. The way that the technology actually operates is that the actual users are anonymous to us.

GS: So is that data anonymous, or anonymous anonymous?

RS: Anonymous anonymous, meaning all we’re capturing is a random ID assigned to a phone, and that ties back to the sensor and data analytics platform.

GS: Do you have to opt in?

RS: It’s all opt in.

GS: Okay, I want to turn to the big gorilla in the broader flexible workspace category, because right or wrong, everyone, including Convene, gets compared to WeWork.

RS:Look, if we think about the macro trends that are shaping and changing not just the way that we work, but also the way that we live and travel, I would argue that WeWork and us have a similar view of the world and the future. But from a business model perspective, the quality of the product that we’ve built, the level of service that we deliver, the strategic nature of our partnerships with building owners, I don’t view us as directly competitive.

GS: I appreciate that WeWork ultimately caters to smaller sized end-users than Convene, so in that way you’re different. But it’s also true that even though Red Bull and Coca Cola are different drinks, you’re not going to drink a Coke and a Red Bull at the same time.

RS: From an analogy perspective, there’s a difference between Planet Fitness and Equinox, right? Would you argue that they’re competitive? Maybe. But the way I think about office real estate is Class C, Class B, Class A. Convene is a Class A partner to landlords.

GS: Right, but WeWork, with all that current and possibly future cash from Softbank, is moving upmarket.

RS: Sure, as they move more into enterprise and upmarket, of course, they’ll be competitive. But what really differentiates us strategically is that we’re not trying to build our own supply chain or our own inventories. We’re partnering with the existing supply chain to create a new category of supply that speaks to the collective demand from our customer demographic.

GS: As a service provider, I get that. But what happens when the next recession comes —

RS: — Yes, by the way, we’re excited for the next one.

GS: Because the knock on WeWork and other companies in the broader sector is that when the recession hits, the blood will hit the fan because of those short-term tenant leases.

RS: Well, right now, you see a lot of capital flowing into the sector and you have platforms that probably shouldn’t be here as well.

GS: Let’s take Brookfield. WeWork has a relationship with Brookfield. You guys have a relationship with Brookfield. But I think the difference is this: if bad things happen in the economy, they have to hope that WeWork is going to effectively manage those short-term lease obligations. From my outsider’s perspective, that looks to me like a counterparty relationship. But in Convene’s case, it looks more like an aligned partnership. After all, Brookfield, as well as Durst and RXR, are on your cap table.

RS: Every deal structure is aligned and even the leases we have are aligned. And when the recession hits, we will use it as an opportunity to deepen our landlord partnerships and take market share.

GS: With whose balance sheet?

RS: We’re using the landlord’s balance sheet to grow our business.

CS: And WeWork is using the Softbank balance sheet to grow their business.

GS: Could you elaborate?

RS: WeWork did us the greatest favor in the world, because our strategy since day one has been to make the landlord a key partner and stakeholder. Do you want to know who has the cheapest cost of capital? Cheaper than Softbank’s? It’s the landlord’s balance sheet. Their cost of equity capital is like six to eight percent.

GS: Really?

RS: Yes. If you think about the investor-anticipated yield in asset classes, real estate sits between a fixed income expectation and an equity capital markets expectation.

GS: Okay, but how does using the landlord’s balance sheet enhance your approach strategically?

CS: Because there are elements of the way we structure our deals that allow our performance to be variable. And by using the landlord’s balance sheet to grow our business, it aligns us and the landlord to be able to ride through a recession together.

“Do you want to know who has the cheapest cost of capital? Cheaper than Softbank’s? It’s the landlord’s balance sheet.”

GS: Have many of the nation’s Class A landlords have bought into your model?

RS: If you look at our current partners that we’re actively working with, I think they globally control over 250 million square feet of Class A office space. So if 10% of that moves to flexible consumption, that means Convene could have an addressable market of 25 million square feet of inventory.

GS: So given the way you’re talking, would it be fair to say that your landlord partners have recognized that the flexible workspace trend is here for the long-term?

CS: How we consume real estate is undergoing a fundamental shift. This is the same conversation that was happening in the transportation industry 15 years ago. It’s the same thing that was happening in the travel industry when Airbnb was starting. That same conversation is happening today within the existing supply chain. So, yes, It’s a buy, build, partner decision that is being made in every landlord’s office around the country today.

GS: It still sounds odd to hear the phrase, “consume real estate.” Maybe I’m old-school, but you guys are down to earth. Do you find that language odd?

CS: Actually, what we’re seeing is the consumerization of real estate. Real estate was historically very B2B, very financially driven. Today, it’s being driven by human experience, So yes, brands matter, the customer experience matters. And that consumerization of real estate actually is happening.

GS: I take it that’s why you launched this new managed workplace solution that features the services you bring, but enables a client to use its own name?

CS: What makes that platform unique is that it’s co-branded. It’s an endorsed brand model by Convene, which means that the Convene brand standards, the Convene operating model, the Convene staffing model and the Convene university training program comes with it.

GS: So Intel inside?

CK: Yes, which gives clients the best of both worlds. It gives them the brand and reach and expertise of Convene. At the same time, they can now have something that feels more authentic and unique to them as a landlord.

GS: I want to shift to the future of work, which is something you both have spoken about in pretty bold terms. We’re at this amazing Convene members club, which sort of feels like a SoHo House except we’re in midtown. And you’ve talked about how an experiential personal life will be closer to a work life. Where is all this going?

RS: From a trend perspective, we believe fundamentally in what we call work/life integration. It used to be that you go to work and at the end of the day that stops and then you move to the rest of your life. That’s not really the way it works anymore. And when we think about some of the services that we’ve launched over the last couple years, it’s been with that idea in mind.

GS: Are you creating future offerings in-house or partnering?

RS: Actually, we’re about to announce a partnership on the wellness side, where we’re taking some of the wellness elements and starting to incorporate them into the broader Convene ecosystem.

GS: Do either of you guys have children?

RS: Yes, we both do.

GS: Because if you want to talk about quality of life and the war for talent, it seems like a natural extension to see if your plan to help the workforce addresses the challenges of working while raising young kids. Are such extensions on your whiteboard?

RS: Yes, they’re definitely on the whiteboard and some of those things are already in process. The difference is partnership. When I think about the way that we’re building our platform and the way that WeWork is building theirs, I think about us as being an open-source platform, Do you think you need to do everything yourself because you’re the best in the world at everything, or do you want to work with best-in-class partners?

GS: So for something like childcare, you’d bring in a partner?

RS: If we decide, which I’m not saying we are, to get into childcare, we’re going to do that with a proven partner that has a track record of delivering that experience and doing it really well.

GS: How does Convene fare in a world where remote work becomes an even bigger trend?

CS: Actually, there’s a difference between remote work and mobility. Remote work is the traditional concept of working from home, and we’re actually seeing some backlash now of companies who are really trying to drive culture, and want more face-to-face interaction.

GS: Does that show up in the design of your spaces?

CK: Yes, the built environments of our offices are changing from looking like cubicle farms where everybody reports to their desk and their computer to operating a lot more like a digitally-enabled campus. And the decoupling of people and their work from their desk is opening up an opportunity to build what’s called an activity-based workplace, where there are different types of spaces that are specialized and built for specific uses.

GS: You guys don’t even have offices, right?

CK: Right. None of us have offices.

RS: Also, people used to talk about remote work in magical terms. They’d say, I’m not going to need an office. We don’t believe that this is the case. We think that there a few things that will continue to matter to organizations. One is brand, two is culture, three is collaboration. And until technology can somehow magically replicate that experience, we think that the best ideas will come from face-to-face interaction.

GS: I have two important last topics to cover. First-off, why on earth, nestled into a semi-remote corner of this club, do you have a Picasso painting hanging on the wall? Because in my experience, usually people like to show off the Picasso if they have one.

RS: Ha, well, the Picasso, as well as all of the other amazing art that you’ve seen at Club 75, is part of the partnership here with the landlord.

GS: Well, it speaks to the confidence they have in you.

RS: Yes, but it also speaks to the experience we’re creating. We think about space as the body language of an organization. Space has the ability to move people and we think that art is a big part of that.

CK: It also demonstrates the extent to which landlords are committed to delivering a great experience.

RS: Right. Having a coffee next to a Calder or a Picasso can put you in a totally different headspace.

“There’s no amount of money in the world that can buy you a partnership with Brookfield or a half a dozen landlords that we’ll be powering next year.”

GS: Well, I’m glad you didn’t use shareholder money to buy these works, which brings me to my last topic. At this point, are you concerned about profitability?

CS: Yes, we are and that’s another one of the differences between us and others. In fact, we’ve been cashflow positive since Day one. And as an organization, profitability has always been something that we think is very important.

GS: It’s because you don’t have enough VCs on your cap table. Speaking of which, you’re obviously aware of the fact that Softbank and other megafunds may helicopter drop a lot more money into this space, which could change the competitive dynamics.

RS: First of all, the last time I checked, we were the second most capitalized platform in the category, by dollars raised. And if you look at our partnership-driven approach, where the landlord’s balance sheet is funding a lot of our growth, the actual capital that’s being invested in the platform is multiples of the $260 million we’ve raised.

But to your point, our concern isn’t so much about the capital that’s flooding in, There’s no amount of money in the world that can buy you a partnership with Brookfield or a half a dozen landlords that we’ll be powering next year. And money, whether its from Softbank or anyone else, can’t give an organization its corporate culture. And I think one of the reasons we’ve been selected as the partner to some of the most discerning customers in the world is because of the fact that everyday, we deliver consistently against a premium experience.

GS: Well, on that note, Chris and Ryan, I’d like to thank you for your kind hospitality.

RS: It’s been our pleasure and thank you.

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Convene uses landlord partnership model to outclass WeWork

Recent reports that Softbank may take a majority stake in WeWork has added fuel to the already hot market for start-ups in the workspace and property tech sectors. One of the more compelling companies that stands to benefit from this trend is New York-based Convene. Started by co-founders Ryan Simonetti (CEO) and Chris Kelly (President), 500-person strong Convene has distinguished itself as a top-tier provider of meeting, event and flexible workspace offerings in its 21 locations. But unlike freelance-heavy WeWork and other co-working companies who cater to 1-10 person companies, Convene puts owners of Class A office buildings at the center of its business model. The goal is to help these landlords provide tenants with the high-end of amenities of, say a unicorn tech startup.

On the back of the company’s recent $152 million Series D, Simonetti and Kelly were eager to discuss new initiatives including a co-branded turnkey workplace and amenity solution and their plans to launch additional Convene locations, including London. They also elaborate on how they plan to benefit during the next recession and open up on their differences with category giant WeWork. Finally, they explain why paintings by renowned artists including Picasso and Calder are tucked into corners of the company’s first, soon-to-be-opened members club at Rockefeller Center.

Gregg Schoenberg: Ryan and Chris. It’s great to see you both. To kick things off, I want to establish that Convene is not a typical startup in that you’ve been around for about nine years.

Ryan Simonetti: Yes, is that called being washed-up in the start-up world?

GS: Not necessarily. Tell me about where the idea for Convene came from?

RS: Chris and I met during our freshman year orientation at Villanova University, ended-up pledging the same fraternity and spent a lot of time getting to know each other. From the beginning, we were probably two of the more entrepreneurial guys at Villanova. We sold used textbooks, spring break trips, parties into Philadelphia. If there was a way to monetize something in college, we were the two guys that were trying do it.

GS: Two scrappy guys from Villanova.

RS: Yes, we’ve always joked that we were probably the only kids at Villanova who didn’t have our parents’ credit cards.

GS: So years later, what was that catalyzing moment where you said, “Okay, here’s the idea for Convene”?

Chris Kelly: I remember two phone calls from Ryan that represent the earliest seeds of Convene. The first phone call was in the middle of the financial collapse, and in that phone call, Ryan said, “We’re about to witness the largest shift of wealth that the world has ever seen and we have to figure out how to be on the winning end of that.” Then a few weeks later, Ryan called me up and introduced the crazy idea for Convene.

GS: And what was that specific pitch?

CS: He walked me through the Grand Hyatt in Midtown Manhattan and said, “Look at the way these guys are doing business. This is a $60 million a year catering and meetings operation that was in essence being outsourced to hotels.”

“Just like Airbnb would tell you that their primary stakeholder is the homeowner, or OpenTable would tell you the primary stakeholder is a restaurateur, we view the building owner as our primary stakeholder.”

GS: And you’re saying hotels weren’t doing a great job?

CS: Hotels simply didn’t have the sensibility about what people really need in a business environment. They treated a shareholder meeting like a wedding with a projector. And we saw a huge opportunity to create spaces that met enterprise workplace requirements.

GS: So fast forward to today and tell me exactly what Convene is, because I think sometimes people struggle and just say, “Well you’re a WeWork competitor on the premium end.”

RS: We partner with Class A building owners to design places where people can meet, work and be inspired. It’s not any more complicated than that.

CS: To build on that, you could say that we’re essentially allowing landlords to offer Googleplex-style workplace experiences.

RS: That’s a big challenge for even large organizations. Look at Google, Facebook or JP Morgan. These companies can deliver an amazing experience at their corporate headquarters location. But in their smaller offices, it’s really tough to deliver a corporate HQ experience if you only have five, ten, or 15,000 square feet. You can’t build the kitchen infrastructure, or the gym, or all of those other things. So to Chris’s point, we’re democratizing access to that experience, and doing it with the landlord as the key partner.

GS: So the landlords are the core client?

RS: Just like Airbnb would tell you that their primary stakeholder is the homeowner, or OpenTable would tell you the primary stakeholder is a restaurateur, we view the building owner as our primary stakeholder. And what we’re helping them do is respond to the changing demands of today’s tenant, who want increased flexibility and better agility to adapt to change.

GS: I take it marrying technology infrastructure to the physical spaces is key to that, which is why you recently bought Beco. What exactly do they do?

RS: Beco is a workplace analytics platform that’s using sensor-based technology to help us, our landlord partners and our corporate clients better understand the way that people are actually interacting with space and services.

“But what really differentiates us strategically is that we’re not trying to build our own supply chain or our own inventories.”

GS: As you contemplated that acquisition, were you worried that it might be perceived to some of your traditional clients as Big Brothery?

RS: Look, everyone today is concerned about data privacy, and rightfully so. The way that the technology actually operates is that the actual users are anonymous to us.

GS: So is that data anonymous, or anonymous anonymous?

RS: Anonymous anonymous, meaning all we’re capturing is a random ID assigned to a phone, and that ties back to the sensor and data analytics platform.

GS: Do you have to opt in?

RS: It’s all opt in.

GS: Okay, I want to turn to the big gorilla in the broader flexible workspace category, because right or wrong, everyone, including Convene, gets compared to WeWork.

RS:Look, if we think about the macro trends that are shaping and changing not just the way that we work, but also the way that we live and travel, I would argue that WeWork and us have a similar view of the world and the future. But from a business model perspective, the quality of the product that we’ve built, the level of service that we deliver, the strategic nature of our partnerships with building owners, I don’t view us as directly competitive.

GS: I appreciate that WeWork ultimately caters to smaller sized end-users than Convene, so in that way you’re different. But it’s also true that even though Red Bull and Coca Cola are different drinks, you’re not going to drink a Coke and a Red Bull at the same time.

RS: From an analogy perspective, there’s a difference between Planet Fitness and Equinox, right? Would you argue that they’re competitive? Maybe. But the way I think about office real estate is Class C, Class B, Class A. Convene is a Class A partner to landlords.

GS: Right, but WeWork, with all that current and possibly future cash from Softbank, is moving upmarket.

RS: Sure, as they move more into enterprise and upmarket, of course, they’ll be competitive. But what really differentiates us strategically is that we’re not trying to build our own supply chain or our own inventories. We’re partnering with the existing supply chain to create a new category of supply that speaks to the collective demand from our customer demographic.

GS: As a service provider, I get that. But what happens when the next recession comes —

RS: — Yes, by the way, we’re excited for the next one.

GS: Because the knock on WeWork and other companies in the broader sector is that when the recession hits, the blood will hit the fan because of those short-term tenant leases.

RS: Well, right now, you see a lot of capital flowing into the sector and you have platforms that probably shouldn’t be here as well.

GS: Let’s take Brookfield. WeWork has a relationship with Brookfield. You guys have a relationship with Brookfield. But I think the difference is this: if bad things happen in the economy, they have to hope that WeWork is going to effectively manage those short-term lease obligations. From my outsider’s perspective, that looks to me like a counterparty relationship. But in Convene’s case, it looks more like an aligned partnership. After all, Brookfield, as well as Durst and RXR, are on your cap table.

RS: Every deal structure is aligned and even the leases we have are aligned. And when the recession hits, we will use it as an opportunity to deepen our landlord partnerships and take market share.

GS: With whose balance sheet?

RS: We’re using the landlord’s balance sheet to grow our business.

CS: And WeWork is using the Softbank balance sheet to grow their business.

GS: Could you elaborate?

RS: WeWork did us the greatest favor in the world, because our strategy since day one has been to make the landlord a key partner and stakeholder. Do you want to know who has the cheapest cost of capital? Cheaper than Softbank’s? It’s the landlord’s balance sheet. Their cost of equity capital is like six to eight percent.

GS: Really?

RS: Yes. If you think about the investor-anticipated yield in asset classes, real estate sits between a fixed income expectation and an equity capital markets expectation.

GS: Okay, but how does using the landlord’s balance sheet enhance your approach strategically?

CS: Because there are elements of the way we structure our deals that allow our performance to be variable. And by using the landlord’s balance sheet to grow our business, it aligns us and the landlord to be able to ride through a recession together.

“Do you want to know who has the cheapest cost of capital? Cheaper than Softbank’s? It’s the landlord’s balance sheet.”

GS: Have many of the nation’s Class A landlords have bought into your model?

RS: If you look at our current partners that we’re actively working with, I think they globally control over 250 million square feet of Class A office space. So if 10% of that moves to flexible consumption, that means Convene could have an addressable market of 25 million square feet of inventory.

GS: So given the way you’re talking, would it be fair to say that your landlord partners have recognized that the flexible workspace trend is here for the long-term?

CS: How we consume real estate is undergoing a fundamental shift. This is the same conversation that was happening in the transportation industry 15 years ago. It’s the same thing that was happening in the travel industry when Airbnb was starting. That same conversation is happening today within the existing supply chain. So, yes, It’s a buy, build, partner decision that is being made in every landlord’s office around the country today.

GS: It still sounds odd to hear the phrase, “consume real estate.” Maybe I’m old-school, but you guys are down to earth. Do you find that language odd?

CS: Actually, what we’re seeing is the consumerization of real estate. Real estate was historically very B2B, very financially driven. Today, it’s being driven by human experience, So yes, brands matter, the customer experience matters. And that consumerization of real estate actually is happening.

GS: I take it that’s why you launched this new managed workplace solution that features the services you bring, but enables a client to use its own name?

CS: What makes that platform unique is that it’s co-branded. It’s an endorsed brand model by Convene, which means that the Convene brand standards, the Convene operating model, the Convene staffing model and the Convene university training program comes with it.

GS: So Intel inside?

CK: Yes, which gives clients the best of both worlds. It gives them the brand and reach and expertise of Convene. At the same time, they can now have something that feels more authentic and unique to them as a landlord.

GS: I want to shift to the future of work, which is something you both have spoken about in pretty bold terms. We’re at this amazing Convene members club, which sort of feels like a SoHo House except we’re in midtown. And you’ve talked about how an experiential personal life will be closer to a work life. Where is all this going?

RS: From a trend perspective, we believe fundamentally in what we call work/life integration. It used to be that you go to work and at the end of the day that stops and then you move to the rest of your life. That’s not really the way it works anymore. And when we think about some of the services that we’ve launched over the last couple years, it’s been with that idea in mind.

GS: Are you creating future offerings in-house or partnering?

RS: Actually, we’re about to announce a partnership on the wellness side, where we’re taking some of the wellness elements and starting to incorporate them into the broader Convene ecosystem.

GS: Do either of you guys have children?

RS: Yes, we both do.

GS: Because if you want to talk about quality of life and the war for talent, it seems like a natural extension to see if your plan to help the workforce addresses the challenges of working while raising young kids. Are such extensions on your whiteboard?

RS: Yes, they’re definitely on the whiteboard and some of those things are already in process. The difference is partnership. When I think about the way that we’re building our platform and the way that WeWork is building theirs, I think about us as being an open-source platform, Do you think you need to do everything yourself because you’re the best in the world at everything, or do you want to work with best-in-class partners?

GS: So for something like childcare, you’d bring in a partner?

RS: If we decide, which I’m not saying we are, to get into childcare, we’re going to do that with a proven partner that has a track record of delivering that experience and doing it really well.

GS: How does Convene fare in a world where remote work becomes an even bigger trend?

CS: Actually, there’s a difference between remote work and mobility. Remote work is the traditional concept of working from home, and we’re actually seeing some backlash now of companies who are really trying to drive culture, and want more face-to-face interaction.

GS: Does that show up in the design of your spaces?

CK: Yes, the built environments of our offices are changing from looking like cubicle farms where everybody reports to their desk and their computer to operating a lot more like a digitally-enabled campus. And the decoupling of people and their work from their desk is opening up an opportunity to build what’s called an activity-based workplace, where there are different types of spaces that are specialized and built for specific uses.

GS: You guys don’t even have offices, right?

CK: Right. None of us have offices.

RS: Also, people used to talk about remote work in magical terms. They’d say, I’m not going to need an office. We don’t believe that this is the case. We think that there a few things that will continue to matter to organizations. One is brand, two is culture, three is collaboration. And until technology can somehow magically replicate that experience, we think that the best ideas will come from face-to-face interaction.

GS: I have two important last topics to cover. First-off, why on earth, nestled into a semi-remote corner of this club, do you have a Picasso painting hanging on the wall? Because in my experience, usually people like to show off the Picasso if they have one.

RS: Ha, well, the Picasso, as well as all of the other amazing art that you’ve seen at Club 75, is part of the partnership here with the landlord.

GS: Well, it speaks to the confidence they have in you.

RS: Yes, but it also speaks to the experience we’re creating. We think about space as the body language of an organization. Space has the ability to move people and we think that art is a big part of that.

CK: It also demonstrates the extent to which landlords are committed to delivering a great experience.

RS: Right. Having a coffee next to a Calder or a Picasso can put you in a totally different headspace.

“There’s no amount of money in the world that can buy you a partnership with Brookfield or a half a dozen landlords that we’ll be powering next year.”

GS: Well, I’m glad you didn’t use shareholder money to buy these works, which brings me to my last topic. At this point, are you concerned about profitability?

CS: Yes, we are and that’s another one of the differences between us and others. In fact, we’ve been cashflow positive since Day one. And as an organization, profitability has always been something that we think is very important.

GS: It’s because you don’t have enough VCs on your cap table. Speaking of which, you’re obviously aware of the fact that Softbank and other megafunds may helicopter drop a lot more money into this space, which could change the competitive dynamics.

RS: First of all, the last time I checked, we were the second most capitalized platform in the category, by dollars raised. And if you look at our partnership-driven approach, where the landlord’s balance sheet is funding a lot of our growth, the actual capital that’s being invested in the platform is multiples of the $260 million we’ve raised.

But to your point, our concern isn’t so much about the capital that’s flooding in, There’s no amount of money in the world that can buy you a partnership with Brookfield or a half a dozen landlords that we’ll be powering next year. And money, whether its from Softbank or anyone else, can’t give an organization its corporate culture. And I think one of the reasons we’ve been selected as the partner to some of the most discerning customers in the world is because of the fact that everyday, we deliver consistently against a premium experience.

GS: Well, on that note, Chris and Ryan, I’d like to thank you for your kind hospitality.

RS: It’s been our pleasure and thank you.

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Domio just raised $12 million in Series A funding to build “apart hotels” across the U.S.

Hotels can be pricey, and and travelers are often forced to leave their rooms for basic things, like food that doesn’t come from the minibar. Yet Airbnb accommodations, which have become the go-to alternative for travelers, can be highly inconsistent.

Domio, a two-year-old, New York-based outfit, thinks there’s a third way: apartment hotels, or “apart hotels,” as the company is calling them.

The idea is to build a brand that travelers recognize as upscale yet affordable, more tech friendly than boutique hotels, and features plenty of square footage, which it expects will appeal to both families as well as companies that send teams of employees to cities and want to do it more economically.

Domio has a host of competitors, if you’ll forgive the pun. Marriott International earlier this year introduced a branded home-sharing business called Tribute Portfolio Homes wherein it says it vets, outfits and maintains homes of its choosing to hotel standards. And it is among a growing number of hotels to recognize that customers who stay in a hotel for a business trip or a family vacation might prefer a multi-bedroom apartment with hotel-like amenities.

Property management companies have been raising funding left and right for the same reason. Among them: Sonder, a four-year-old, San Francisco-based startup offering “spaces built for travel and life” that, according to Crunchbase, has raised $135 million from investors, much of it this year; TurnKey, a six-year-old, Austin, Tex.-based home rental management company that has raised $72 million from investors, including via a Series D round that closed back in March; and Vacasa, a nine-year-old, Portland, Ore.-based vacation rental management company that manages more than 10,000 properties and which just this week closed on $64 million in fresh financing that brings its total funding to $207.5 million.

That’s saying nothing of Airbnb itself, which has begun opening hotel-like branded apartment complexes that lease units to both long-term renters and short-term visitors in partnership with development partner Niido.

Whether Domio can stand out from competitors remains to be seen, but investors are happy to provide give it the financing to try. The company is today announcing that it has raised $12 million in Series A equity funding led by Tribeca Venture Partners, with participation from SoftBank Capital NY and Loric Ventures. The round comes on the heels of Domio announcing a $50 million joint venture last month with the private equity firm Upper 90 to exclusively fund the leasing and operations of as many as  25 apartment-style hotels for group travelers.

Indeed, Domio thinks one advantage it may have over other home-share companies is that rather than manage the far-flung properties fo different owners, it can shave costs and improve the quality of its offerings by entering five- to 10-year leases with developers and then branding, furnishing and operating entire “apart hotel” properties.

As CEO (and former real estate banker) Jay Roberts told us earlier this week, the plan is to open up 25 of these buildings across the U.S. over the next couple of years. The units will average 1,5000 square feet and feature three bedrooms and if all goes as planned, they’ll cost 10 to 25 percent below hotel prices, too.

Domio had earlier raised $5 million in equity and convertible debt from angel investors in the real estate industry; altogether it has now amassed funding of $67 million.

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Lessons from building Brex into a billion-dollar startup

When I think about my experience as an immigrant and entrepreneur in Silicon Valley, I remember growing up in Brazil and how we saw tech founders and CEOs as kings. We imagined what it would be like to assume the throne.

But these weren’t just any kings. Silicon Valley was the kingdom of nerds and underdogs. We identified with these guys, they were just like us. We were fed the myth of a Silicon Valley meritocracy, and the illusion that all you needed was ambition, determination, and a good idea to meet the right person and get funded.

What we didn’t understand was that this myth was not completely rooted in reality. Not everyone has access to the American Dream, and those who do have a track record of success before they’re given their moment to prove, or in our case, pitch ourselves.

Part of this disconnect was cultural. In Brazil, when I began my first startup, Pagar.me, a payment processing company, my co-founder Pedro Franceschi and I were two 16 year-old kids who learned how to code before we were ten. While it was hard for people to take us seriously initially—I mean, would you quit your job to work for two 16 year- olds? Being so young also worked to our advantage; it revealed that we were passionate, driven, and invested in tech at an age that we didn’t need to be.

Once we got our start-up off the ground, our employees were as invested in us as we were invested in them and the company. That’s because in Brazil, most of us grew up with parents that stayed their whole lives at the same company. You grew with the company, and that’s the approach we took when it came to hiring for our first company: who did we see sharing our same vision and growing with us?

Coming to the United States was almost a completely opposite experience. The barrier of entry was much higher. You have to go to the right college, graduate from right incubator programs, develop relationships with the right VCs, and have at least one successful startup under your belt before anyone would even consider booking a meeting with you.

Pedro and I had to carefully position ourselves before we even got to the Valley. When we finally did get to the U.S., we had already launched a successful startup and we were accepted to Stanford. Soon after, we were accepted by Y-Combinator, and that’s where we built relationships with the key players that would open up the doors for future meetings.

With our current startup, Brex,  we found that there weren’t just cultural differences at play, but different approaches we needed to take in order for our business to be successful. For example, in Brazil, we bootstrapped our first startup, and as a result, we had to find our product-market fit immediately. When you are so cash-constrained, it also limits how much you can build your company, and you think in terms of short-term wins instead of sustained growth. Your growth strategy is confined and you’re constantly reacting to your immediate client demands.

In the U.S., VCs and angel-investors aren’t interested in the short-term. They’re interested in long-term growth and how you are going to deliver 10x profits over a ten year period. Our strategy could no longer be: plan as we go and grow with our customer. Instead, we needed to deliver a roadmap, and when that roadmap changed or evolved, communicate those changes and adopt a culture of transparency.   

Additionally, we learned how difficult it is to find and retain  talent in the U.S.; it can feel like a Sisyphean task. Millennials for example, spend less than two years on average at a job, and if you spend six years or more at the same company, recruiters will actually ask you: “why?” So how can you build a company for the long-term in an environment where employees are not personally invested in the growth of your company?

We also learned that many successful tech startups offer stock options to their early employees, but as the company evolves and changes over time, those same stock options are not offered to future employees. This creates the exact opposite of a meritocracy. Why would a new employee work harder, longer, and bring more to the table if you are not going to be compensated for it?

Instead of using this broken model, we have invested in paying our team higher wages upfront, and based on performance, we award our team members with stock options. We want to be a company that people are proud of working at longterm, and we want to create a culture that is merit-based.

While some of the myths that we first believed in about Silicon Valley are now laughable looking back, they were also really instructional as to how we wanted to build our company and what pitfalls we wanted to avoid.

Even though nearly half of tech startups are founded by immigrant entrepreneurs, we have a cultural learning curve in order to have the opportunity to be “the next unicorn.” And maybe that’s the point, we’re experiencing a moment in time during which myths and unicorns no longer serve us, and what we need instead is the background, experience, and vision to create a company that is worth the hype.

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Alumni Ventures Group is the most active venture fund you’ve never heard of

Alumni Ventures Group’s (AVG) limited partners aren’t endowment or pension funds. Its typical LP is a heart surgeon in Des Moines, Iowa.

The firm has both an unorthodox model of fundraising and dealmaking. Across 25 micro funds, AVG is raising and investing upwards of $200 million per year for and in tech startups.

Tucked away in Boston, far from the limelight of Silicon Valley, few seem to be paying attention to AVG. There are a few reasons why, and those seem to be working in the firm’s advantage.

Today, AVG is announcing a close of roughly $30 million for three additional funds: Green D Ventures, Chestnut Street Ventures and Purple Arch Ventures, which represent capital committed by Dartmouth, the University of Pennsylvania and Northwestern alums, respectively.

“People don’t really know what to make of us”

AVG walks and talks like a venture fund, but a peek under the hood reveals its unconventional fundraising mechanisms.

Rather than collecting $5 million minimum investments from institutional LPs, AVG takes $50,000 directly from individual alums of prestigious universities. The firm pools the capital and creates university-specific venture funds for graduates of Duke, Stanford, Harvard, MIT and several other colleges. 

“People don’t really know what to make of us because we’re so different,” said Michael Collins, AVG’s founder and chief executive officer.

Collins started AVG to make venture capital more accessible to individual people. He’s been a VC since 1986, formerly of TA Associates, and had grown tired of the hubris that runs rampant in the industry. In 2014, he started a $1.5 million fund for alums of his alma mater, Dartmouth. Since then, AVG has grown into 25 funds each of which fundraise annually and are seeing substantial growth over their previous raises.

“What we observed is VC is a really good asset class but it’s really designed for institutional investors,” Collins (pictured below) said. “It’s really hard for individual people to put together a smart, simple portfolio unless they do it themselves. That’s why we created AVG.”

AVG and its team of 40 investment professionals make 150 to 200 investments per year of roughly $1 million each in U.S. startups across industries. In the second quarter of 2018, PitchBook listed the firm as the second most active global investor, ranked below only Plug and Play Tech Center and above the likes of Kleiner Perkins, NEA and Accel. 

Unlike the Kleiners, NEAs and Accels of the world, AVG never leads investments. Collins says they just “tuck themselves into” a deal with a great lead investor. They don’t take board seats; Collins says he doesn’t see any value in more than one VC on a company board. And they don’t try to negotiate deal terms.

Though unusual, all of this works to their advantage. Founders appreciate the easy capital and access to AVG’s network, and other VC firms don’t view AVG as a threat, making it easier for the firm to get in on great deals.

“We are low friction, we are small and we have a hell of a Rolodex,” Collins said.

VC doesn’t have to be a star business

Despite a deal flow that’s unmatched by many VC firms, AVG manages to fly under the radar and the firm is totally ok with that.

“A lot of VC is a bit of a star business where people try to build their own individual brand,” Collins said. “They get out there; they like publicity; they blog; they speak at conferences; they want to be known as the person to bring great deals to. We don’t lead. We work in the background. We just don’t feel the need to put the energy into PR.”

“Most VC returns are really achieved through investing in great companies as opposed to changing the trajectory of a company because you’re on the board,” he added. “If you’re a seed investor in Airbnb or Google, you were really great to be an early investor in that company, not because you sat on the board and you’re brilliance created Google’s success.”

AVG has completed 115 investments in the last 12 months. It’s investing out of 10-year funds, so at just four years in, it has some more waiting to do before it’ll see the full outcomes of its investments. Still, Collins says 65 of their portfolio companies have had liquidity events so far, including Jump, which sold to Uber in April, and Whistle, acquired by Mars Petcare a few years back.

“I hope that we can be a catalyst to bring more people into this asset class,” he concluded.

“I am a big believer that it’s really important that America continues to lead in entrepreneurship and I think the more people that own this asset class the better.”

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Smart home makers hoard your data, but won’t say if the police come for it

A decade ago, it was almost inconceivable that nearly every household item could be hooked up to the internet. These days, it’s near impossible to avoid a non-smart home gadget, and they’re vacuuming up a ton of new data that we’d never normally think about.

Thermostats know the temperature of your house, and smart cameras and sensors know when someone’s walking around your home. Smart assistants know what you’re asking for, and smart doorbells know who’s coming and going. And thanks to the cloud, that data is available to you from anywhere – you can check in on your pets from your phone or make sure your robot vacuum cleaned the house.

Because the data is stored or accessible by the smart home tech makers, law enforcement and government agencies have increasingly sought out data from the companies to solve crimes.

And device makers won’t say if your smart home gadgets have been used to spy on you.

For years, tech companies have published transparency reports — a semi-regular disclosure of the number of demands or requests a company gets from the government for user data. Google was first in 2010. Other tech companies followed in the wake of Edward Snowden’s revelations that the government had enlisted tech companies’ aid in spying on their users. Even telcos, implicated in wiretapping and turning over Americans’ phone records, began to publish their figures to try to rebuild their reputations.

As the smart home revolution began to thrive, police saw new opportunities to obtain data where they hadn’t before. Police sought Echo data from Amazon to help solve a murder. Fitbit data was used to charge a 90-year old man with the murder of his stepdaughter. And recently, Nest was compelled to turn over surveillance footage that led to gang members pleading guilty to identity theft.

Yet, Nest — a division of Google — is the only major smart home device maker that has published how many data demands they receive.

As first noted by Forbes last week, Nest’s little-known transparency report doesn’t reveal much — only that it’s turned over user data about 300 times since mid-2015 on over 500 Nest users. Nest also said it hasn’t to date received a secret order for user data on national security grounds, such as in cases of investigating terrorism or espionage. Nest’s transparency report is woefully vague compared to some of the more detailed reports by Apple, Google and Microsoft, which break out their data requests by lawful request, by region, and often by the kind of data that the government demands.

As Forbes said, “a smart home is a surveilled home.” But at what scale?

We asked some of the most well known smart home makers on the market if they plan on releasing a transparency report, or disclose the number of demands they receive for their smart home tech.

For the most part, we received fairly dismal responses.

What the big four tech giants said:

Amazon did not respond to requests for comment when asked if it will break out the number of demands it receives for Echo data, but a spokesperson told me last year that while its reports include Echo data, it would not break out those figures.

Facebook said that its transparency report section will include “any requests related to Portal,” its new hardware screen with a camera and a microphone. Although the device is new, a spokesperson did not comment on if the company will break out the hardware figures separately.

Google pointed us to Nest’s transparency report but did not comment on its own efforts in the hardware space — notably its Google Home products.

And Apple said that there’s no need to break out its smart home figures — such as its HomePod — because there would be nothing to report. The company said user requests made to HomePod are given a random identifier that cannot be tied to a person.

What the smaller but notable smart home players said:

August, a smart lock maker, said it “does not currently have a transparency report and we have never received any National Security Letters or orders for user content or non-content information under the Foreign Intelligence Surveillance Act (FISA),” but did not comment on the number of subpoenas, warrants and court orders it receives. “August does comply with all laws and when faced with a court order or warrant, we always analyze the request before responding,” a spokesperson said.

Roomba maker iRobot said it “has not received any demands from governments for customer data,” but wouldn’t say if it planned to issue a transparency report in the future.

Both Arlo, the former Netgear smart home division, and Signify, formerly Philips Lighting, said that they do not have transparency reports. Arlo didn’t comment on its future plans, and Signify said it has no plans to publish one. 

Ring, a smart doorbell and security device maker, did not answer our questions on why it doesn’t have a transparency report, but said it “will not release user information without a valid and binding legal demand properly served on us” and that Ring “objects to overbroad or otherwise inappropriate demands as a matter of course.” When pressed, a spokesperson said it plans to release a transparency report in the future, but did not say when.

Neither spokespeople for Honeywell or Canary — both of which have smart home security products — did not comment by our deadline.

And, Samsung, a maker of smart sensors, trackers and internet-connected televisions and other appliances, did not respond to a request for comment.

Only Ecobee, a maker of smart switches and sensors, said it plans to publish its first transparency report “at the end of 2018.” A spokesperson confirmed that, “prior to 2018, Ecobee had not been requested nor required to disclose any data to government entities.”

All in all, that paints a fairly dire picture for anyone thinking that when the gadgets in your home aren’t working for you, they could be helping the government.

As helpful and useful smart home gadgets can be, few fully understand the breadth of data that the devices collect — even when we’re not using them. Your smart TV may not have a camera to spy on you, but it knows what you’ve watched and when — which police used to secure a conviction of a sex offender. Even data from when a murder suspect pushed the button on his home alarm key fob can be enough to help convict someone of murder.

Two years ago, former U.S. director of national intelligence James Clapper said that the government was looking at smart home devices as a new foothold for intelligence agencies to conduct surveillance. And it’s only going to become more common as the number of internet-connected devices spread. Gartner said more than 20 billion devices will be connected to the internet by 2020.

As much as the chances are that the government is spying on you through your internet-connected camera in your living room or your thermostat are slim — it’s naive to think that it can’t.

But the smart home makers wouldn’t want you to know that. At least, most of them.

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PlayStation Vue is first U.S. pay TV provider to integrate with Apple’s TV app

Sony’s live TV streaming service, PlayStation Vue, announced this week it has become the first U.S. pay TV provider to integrate with Apple’s TV app. Until now, Apple’s TV app has featured content from both free and paid on-demand streaming apps like Hulu, Prime Video, HBO NOW, PBS Kids, The CW, and others, along with those that require you log in with your pay TV credentials, like ABC, AMC, USA, SYFY, Showtime Anytime, and many more.

With the new PlayStation Vue integration, subscribers to Sony’s pay TV service will be able to access all of Vue’s on-demand content across its nationally available channels in the Apple TV app. Live sports, including both national and regional sports networks, will be supported, too, the company says.

Explains Sony, users will be able to search and browse the PS Vue catalog in the TV app, while also taking advantage of TV app features like “Watch Now” and “Up Next” to organize their shows, movies and sports. When you find content you want to watch, it will open up the stream right in the PS Vue app.

This integration will matter more to those who already subscribe to at least a couple of other streaming services in addition to PS Vue, as the TV app is designed to aggregate content and recommendations from across services in a single place. It works on iOS devices, including iPhone and iPad, and on Apple TV.

PS Vue is one of now several pay TV streaming services, and a rival to YouTube TV, Hulu with Live TV, Sling TV, AT&T’s DirecTV Now and WatchTV. But it’s been lagging behind on subscribers.

Dish’s Sling TV and DirecTV Now lead the space, thanks to Sling’s early mover advantage and DirecTV Now’s distribution through AT&T’s wireless business. The former had 2.3 million subscribers as of June, while AT&T said DirecTV Now had 1.8 million, as of its earnings report in July. Hulu with Live TV cracked a million subscribers in September, ahead of YouTube TV.

Sony’s PlayStation Vue, meanwhile is just somewhere over half a million. It may have struggled to grow due to its branding, which seems to imply its only for PlayStation owners. (It’s not).

Perhaps the company is hoping the closer ties with Apple’s TV app will give its service more visibility.

The integration also arrives just ahead the launch of Apple’s own original content, which could bring more people back to the Apple TV app, further boosting PS Vue’s visibility.

While PS Vue is the first U.S.-based pay TV provider to offer this sort of integration with the TV app, it’s not the first worldwide. In France, for example, Canal+ “myCanal” and Molotov have offered this same sort of integration for some time.

 

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Visual Studio lays out roadmap for early 2019 releases

Microsoft is planning for the future of Visual Studio. In a newly released roadmap, the company detailed some of the things that will be coming to the IDE in Q1 of 2019.

As requested by the community, Visual Studio will be multi-monitor dots per inch (DPI) aware, which will lead to improved clarity on monitors with different DPIs. Some services will also be moved to the background to improve load times.

Xamarin developers will get features such as Xamarin.Forms 4.0 templates and tooling support, Xamarin.Android Designer improvements and support for constraint layouts, Xamarin.Forms Previewer improvements, Enhanced Fast Deployment for Xamarin.Android, and Android API 29 support.

Microsoft will update tooling for WinForms and WPF development with .NET Core 3, in addition to updating Test Explorer to provide better performance for large numbers of tests.

Python developers will get full featured debugging, an interactive window, and IntelliSense experience in Open Folder. They will also be able to take advantage of auto-reload when debugging Python Flask and Django apps.

Other features include the ability to add SQL Azure databases, Storage Accounts, Application Insights, and Key Vault to Azure App Service instances; support for running .NET Unit Tests on projects that target more than one .NET framework; extensibility support for third party test frameworks to integrate with Real Time Test Discovery; and x:bind support for XAML edit and continue.

The roadmap is available here.

The post Visual Studio lays out roadmap for early 2019 releases appeared first on SD Times.

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Tesla is rolling out a cheaper, mid-range Model 3

Tesla is now offering a new, cheaper mid-range battery version of the Model 3 that starts at $45,000 before federal tax incentives.

CEO Elon Musk announced the new variant, which has an estimated battery range of 260 miles, via Twitter. The company’s website has already been updated. Customers in the U.S. can order the mid-range version as of today and it will soon be offered in Canada as well.

Tesla model 3 mid-range

 

Musk tweeted that the mid-range Tesla Model 3 costs $35,000 after federal and state tax rebates in California.

However, for customers to realize the full $7,500 federal tax incentive, they have to take delivery of the electric vehicle by Dec., 31, 2018. The delivery estimate for the mid-range version is 6 to 10 weeks, which means customers who order the vehicle by late October or early November should still be able to get the full tax credit.

Earlier this year, Tesla delivered its 200,000th electric vehicle. The achievement activated a countdown for the $7,500 federal tax credit offered to consumers who buy new electric vehicles. The tax credit begins to phase out once a manufacturer has sold 200,000 qualifying vehicles in the U.S. Under these rules, Tesla customers have to take delivery of their new Model S, Model X or Model 3 by December 31.

Musk explained in a subsequent tweet that the mid-range vehicle is outfitted with a long-range battery that has fewer cells. “Non-cell portion of the pack is disproportionately high, but we can get it done now instead of February,” he wrote.

It should be noted that while this mid-range battery model is cheaper than the long-range dual motor Model 3 and the performance versions, it’s still not the $35,000 base-spec Model 3 (before incentives) that was originally promised. That low-cost model, which will feature a standard battery with a different architecture, won’t be available for 4 to 6 months.

“As Model 3 production and sales continue to grow rapidly, we’ve achieved a steady volume in manufacturing capacity, allowing us to diversify our product offering to even more customers,” a Tesla spokesperson said in an emailed statement. “Our new Mid-Range Battery is being introduced this week in the U.S. and Canada to better meet the varying range needs of the many customers eager to own Model 3, and our delivery estimate for customers who have ordered the Standard Battery is 4-6 months.”

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Facebook launches “Hunt For False News” debunk blog as fakery drops 50%

Facebook hopes detailing concrete examples of fake news it’s caught — or missed — could improve news literacy or at least prove it’s attacking the misinformation problem. Today Facebook launched “The Hunt For False News”, in which it examines viral B.S., relays the decisions of its third-party fact checkers, and explains how the story was tracked down. The first edition reveals cases where false captions were put on old videos, people were wrongfully identified as perpetrators of crimes, or real facts were massively exaggerated.

The blog’s launch comes after three recent studies showed the volume of misinformation on Facebook has dropped by half since the 2016 election, while Twitter’s volume hasn’t declined as drastically. Unfortunately, the remaining 50 percent still threatens elections, civil discourse, dissident safety, and political unity across the globe.

In one of The Hunt’s first examples, it debunks that a man who posed for a photo with one of Brazil’s senators had stabbed the presidential candidate. Facebook explains that its machine learning models identified the photo, it was proven false by Brazilian fact-checker Aos Fatos, and Facebook now automatically detects and demotes uploads of the image. In a case where it missed the mark, a false story touting NASA would pay you $100,000 to study you staying in bed for 60 days “racked up millions of views on Facebook” before fact checkers found NASA had paid out $10,000 to $17,000 in limited instances for studies in the past.

While the educational “Hunt” series is useful, it merely cherry picks random false news stories from over a wide time period. What’s more urgent, and would be more useful, would be for Facebook to apply this method to currently circulating misinformation about the most important news stories. The New York Times’ Kevin Roose recently began using Facebook’s CrowdTangle tool to highlight the top 10 recent stories by engagement about topics like the Brett Kavanaugh hearings.

If Facebook wanted to be more transparent about its successes and failures around fake news, it’s publish lists of the false stories with the highest circulation each month and then apply the Hunt’s format more explaining how they were debunked. This could help to dispel myths in societies understanding that may be propagated by the mere abundance of fake news headlines, even if users don’t click through the read them.

The red line represents the decline of Facebook engagement with “unreliable or dubious” sites

But at least all of Facebook’s efforts around information security including doubling its security staff from 10,000 to 20,000 workers, fact checks, and using News Feed algorithm changes to demote suspicious content are paying off.

  • A Stanford and NYU study found that Facebook likes, comments, shares, and reactions to links to 570 fake news sites dropped by over half since the 2016 election while engagements through Twitter continued to rise, “with the ratio of Facebook engagements to Twitter shares falling by approximately 60 percent.”
  • A University Of Michigan study coined the metric “Iffy Quotient” to assess the how much content from certain fake news sites was distributed on Facebook and Twitter. When engagement was factored in, it found Facebook’s levels had dropped to early 2016 volume that’s now 50 percent les than Twitter.
  • French newspaper Le Monde looked at engagement with 630 French websites across Facebook, Twitter, Pinterest and Reddit. Facebook engagement with sites dubbed “unreliable or dubious” has dropped by half since 2015.

Of course, given Twitter’s seeming paralysis on addressing misinformation and trolling, they’re not a great benchmark for Facebook to judge by. While it’s useful that Facebook is outlining ways to spot fake news, the public will have to internalize these strategies for society to make progress. That may be difficult when the truth has become incompatible with many peoples’ and politicians’ staunchly-held beliefs.

In the past, Facebook has surfaced fake news spotting tips atop the News Feed and bought full-page newspaper ads trying to disseminate them. The Hunt For Fake News would surely benefit from being embedded where the social network’s users look everyday instead of buried in its corporate blog.

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