Existential education error: Failing to train students on software

Although many of the milestones of the digital revolution have sprung directly from the research output of America’s colleges and universities, like Athena from Zeus’s forehead, on the instructional side, American higher education has taken a laid-back approach. Sure, there are more courses in computer science, millions of students taking courses online and MIT just committed $1 billion to build a new college for AI. But a campus-visiting time-traveler from 25 or 50 years ago would find a very familiar setting — with the possible exception of students more comfortable staring at their devices than maintaining eye contact.

This college stasis may be even more surprising to visitors from the transformed workplace. Jobs that made no or marginal use of digital devices 10 years ago now tether workers to their machines as closely as today’s students are glued to their smartphones. Processes that involved paper are now entirely digital. And experience with relevant function- and industry-specific business software is required in job descriptions for many entry-level jobs.

This hit home a few weeks ago when speaking to an audience of 250 college and university officials. I asked which of their schools provide any meaningful coursework in Salesforce, the No. 1 SaaS platform in American business.

Not one hand went up.

There are many reasons for this. Few if any faculty have dedicated their careers to (or even get marginally excited about) equipping students with the skills they need to secure and succeed in their first jobs. No one’s losing their job (yet) over failure to help students get jobs. Another is the cost of teaching; with strong employer demand for these skills, finding and hiring capable faculty costs more than teaching non-technical subjects. Finally, there’s the rapid pace of change in technology, and the sense that any educational effort will be obsolete in a few years. (Of course, the reality of business software is quite different; foundational platforms like Salesforce have a long shelf life — 10-plus years and counting — and some platforms are expected to last for a generation.)

But the primary reason colleges aren’t educating students on the software they need to launch their careers is the notion that it’s unnecessary because millennials (and now Gen Zers) are “digital natives.”

The idea of digital natives isn’t new. It’s been around for decades: Kids have grown up with digital technologies and so are adept at all things digital. It’s certainly true that today’s college students are proficient with Netflix and Spotify and smartphones. But it’s equally true that the smartphones they’ve grown up with haven’t remotely prepared them to use office phones, let alone career-critical business software.

Business software is really hard, even for digital natives.

Eleanor Cooper, co-founder of Pathstream, a startup partnering with higher education institutions to provide business software training, notes that millennials and Gen Zers are “accustomed to Instagram-like platforms which are both intuitive and instantly gratifying. But without exception, we find the user experience of learning business software to be exactly the opposite: instant friction and delayed gratification. Students first face an often multi-hour series of technical steps just to get the software set up before they begin working through tedious button-clicking instructions, which are at best mind-numbing and at worst outdated and inaccurate for the current version of the software.”

In an article in The New Yorker last month, “Why Doctors Hate Their Computers,” Dr. Atul Gawande describes the challenge of implementing Epic, a SaaS platform for managing patient care: “recording and communicating our medical observations, sending prescriptions to a patient’s pharmacy, ordering tests and scans, viewing results, scheduling surgery, sending insurance bills.”

First, there’s 16 hours of mandatory training. Gawande “did fine with the initial exercises, like looking up patients’ names and emergency contacts. When it came to viewing test results, though, things got complicated. There was a column of thirteen tabs on the left side of my screen, crowded with nearly identical terms: ‘chart review,’ ‘results review,’ ‘review flowsheet.’ We hadn’t even started learning how to enter information, and the fields revealed by each tab came with their own tools and nuances.”

Business software is really hard, even for digital natives. Today’s students are accustomed to simple interfaces. But simple interfaces are possible only when the function is simple, like messaging or selecting video entertainment. Today’s leading business software platforms don’t just manage a single function. They manage hundreds, if not thousands.

Gawande references a book by IBM engineer Frederick Brooks, The Mythical Man-Month, which sets forth a Darwinian theory of software evolution from a cool, easy-to-use program (“built by a few nerds for a few of their nerd friends” to perform a limited function), to a bigger program “product” that delivers more functionality to more people, to a “very uncool program system.” Gawande points to the example of Fluidity, a program written by a grad student to run simulations of small-scale fluid dynamics. Researchers loved it, and soon added code to perform new features. The software became more complex, harder to use and more restrictive.

And so beyond cumbersome interfaces, the second reason why business software is really hard is that it has become inextricably and tightly wound up with business processes. Salesforce consultants will tell you it’s easier to conform your business practices to Salesforce than to try to customize (or even configure) Salesforce to support the way you do business today. And that’s true for almost all business software. As Gawande notes, “as a program adapts and serves more people and more functions, it naturally requires tighter regulation. Software systems govern how we interact as groups, and that makes them unavoidably bureaucratic in nature.”

The myth of the digital native is convenient for colleges and universities, because it allows them to stay focused on what faculty want to teach rather than what students actually need to learn.

Software-defined business practices are increasingly standardized across functions and industries, and highly knowable. And because they’re knowable, hiring managers want to see candidates who know them. So it’s not just about educating students on software; inherent in preparing students on business software is equipping them with industry and/or job-function expertise. And that requires much more than 16 hours of training.

“Why can’t our work systems be like our smartphones — flexible, easy, customizable? The answer is that the two systems have different purposes,” Gawande explained. “Consumer technology is all about letting me be me. Technology for complex enterprises is about helping groups do what the members cannot easily do by themselves — work in coordination.”

The myth of the digital native is convenient for colleges and universities, because it allows them to stay focused on what faculty want to teach rather than what students actually need to learn. But it’s self-centered, superficial and silly. Rather than thinking about technology in terms of Netflix and smartphones, walk down the street and take a look at the software being utilized to manage your college’s admissions, financial aid and human resources functions. Indeed, 95 percent of your graduates will begin their careers working in places that look a lot more like this than like the faculty lounge. And that’s if they’re lucky. Otherwise they’ll begin their careers working in places that look a lot more like Starbucks.

In his article, Gawande notes that despite the many challenges of adapting to working (and living) on a business software platform, software is eating the world for a good reason: to improve outcomes for consumers. The Epic implementation should allow hospitals to scan records to identify patients who’ve been on opioids for more than three months in order to provide outreach and reduce risk of overdose, or to improve care for homeless patients by seeing that they’ve already had three negative TB tests and therefore don’t need to be isolated. “We think of this as a system for us and it’s not,” said the hospital system’s chief clinical officer. “It is for the patients.

These improved outcomes are synonymous with the data analytics revolution — a revolution that has colleges and universities excited about new programs and increased enrollment. But all the additional data to improve these outcomes needs to be captured first. And that’s done with complex business software. So it’s unfair, or at least hypocritical, of colleges and universities to attempt to pick the fruit of big data without first sowing the seeds. And sowing the seeds entails a serious investment in preparing students with the technical and business process knowledge they’ll need to use the software that makes big data possible.

via Click on the link for the full article

Existential education error: Failing to train students on software

Although many of the milestones of the digital revolution have sprung directly from the research output of America’s colleges and universities, like Athena from Zeus’s forehead, on the instructional side, American higher education has taken a laid-back approach. Sure, there are more courses in computer science, millions of students taking courses online and MIT just committed $1 billion to build a new college for AI. But a campus-visiting time-traveler from 25 or 50 years ago would find a very familiar setting — with the possible exception of students more comfortable staring at their devices than maintaining eye contact.

This college stasis may be even more surprising to visitors from the transformed workplace. Jobs that made no or marginal use of digital devices 10 years ago now tether workers to their machines as closely as today’s students are glued to their smartphones. Processes that involved paper are now entirely digital. And experience with relevant function- and industry-specific business software is required in job descriptions for many entry-level jobs.

This hit home a few weeks ago when speaking to an audience of 250 college and university officials. I asked which of their schools provide any meaningful coursework in Salesforce, the No. 1 SaaS platform in American business.

Not one hand went up.

There are many reasons for this. Few if any faculty have dedicated their careers to (or even get marginally excited about) equipping students with the skills they need to secure and succeed in their first jobs. No one’s losing their job (yet) over failure to help students get jobs. Another is the cost of teaching; with strong employer demand for these skills, finding and hiring capable faculty costs more than teaching non-technical subjects. Finally, there’s the rapid pace of change in technology, and the sense that any educational effort will be obsolete in a few years. (Of course, the reality of business software is quite different; foundational platforms like Salesforce have a long shelf life — 10-plus years and counting — and some platforms are expected to last for a generation.)

But the primary reason colleges aren’t educating students on the software they need to launch their careers is the notion that it’s unnecessary because millennials (and now Gen Zers) are “digital natives.”

The idea of digital natives isn’t new. It’s been around for decades: Kids have grown up with digital technologies and so are adept at all things digital. It’s certainly true that today’s college students are proficient with Netflix and Spotify and smartphones. But it’s equally true that the smartphones they’ve grown up with haven’t remotely prepared them to use office phones, let alone career-critical business software.

Business software is really hard, even for digital natives.

Eleanor Cooper, co-founder of Pathstream, a startup partnering with higher education institutions to provide business software training, notes that millennials and Gen Zers are “accustomed to Instagram-like platforms which are both intuitive and instantly gratifying. But without exception, we find the user experience of learning business software to be exactly the opposite: instant friction and delayed gratification. Students first face an often multi-hour series of technical steps just to get the software set up before they begin working through tedious button-clicking instructions, which are at best mind-numbing and at worst outdated and inaccurate for the current version of the software.”

In an article in The New Yorker last month, “Why Doctors Hate Their Computers,” Dr. Atul Gawande describes the challenge of implementing Epic, a SaaS platform for managing patient care: “recording and communicating our medical observations, sending prescriptions to a patient’s pharmacy, ordering tests and scans, viewing results, scheduling surgery, sending insurance bills.”

First, there’s 16 hours of mandatory training. Gawande “did fine with the initial exercises, like looking up patients’ names and emergency contacts. When it came to viewing test results, though, things got complicated. There was a column of thirteen tabs on the left side of my screen, crowded with nearly identical terms: ‘chart review,’ ‘results review,’ ‘review flowsheet.’ We hadn’t even started learning how to enter information, and the fields revealed by each tab came with their own tools and nuances.”

Business software is really hard, even for digital natives. Today’s students are accustomed to simple interfaces. But simple interfaces are possible only when the function is simple, like messaging or selecting video entertainment. Today’s leading business software platforms don’t just manage a single function. They manage hundreds, if not thousands.

Gawande references a book by IBM engineer Frederick Brooks, The Mythical Man-Month, which sets forth a Darwinian theory of software evolution from a cool, easy-to-use program (“built by a few nerds for a few of their nerd friends” to perform a limited function), to a bigger program “product” that delivers more functionality to more people, to a “very uncool program system.” Gawande points to the example of Fluidity, a program written by a grad student to run simulations of small-scale fluid dynamics. Researchers loved it, and soon added code to perform new features. The software became more complex, harder to use and more restrictive.

And so beyond cumbersome interfaces, the second reason why business software is really hard is that it has become inextricably and tightly wound up with business processes. Salesforce consultants will tell you it’s easier to conform your business practices to Salesforce than to try to customize (or even configure) Salesforce to support the way you do business today. And that’s true for almost all business software. As Gawande notes, “as a program adapts and serves more people and more functions, it naturally requires tighter regulation. Software systems govern how we interact as groups, and that makes them unavoidably bureaucratic in nature.”

The myth of the digital native is convenient for colleges and universities, because it allows them to stay focused on what faculty want to teach rather than what students actually need to learn.

Software-defined business practices are increasingly standardized across functions and industries, and highly knowable. And because they’re knowable, hiring managers want to see candidates who know them. So it’s not just about educating students on software; inherent in preparing students on business software is equipping them with industry and/or job-function expertise. And that requires much more than 16 hours of training.

“Why can’t our work systems be like our smartphones — flexible, easy, customizable? The answer is that the two systems have different purposes,” Gawande explained. “Consumer technology is all about letting me be me. Technology for complex enterprises is about helping groups do what the members cannot easily do by themselves — work in coordination.”

The myth of the digital native is convenient for colleges and universities, because it allows them to stay focused on what faculty want to teach rather than what students actually need to learn. But it’s self-centered, superficial and silly. Rather than thinking about technology in terms of Netflix and smartphones, walk down the street and take a look at the software being utilized to manage your college’s admissions, financial aid and human resources functions. Indeed, 95 percent of your graduates will begin their careers working in places that look a lot more like this than like the faculty lounge. And that’s if they’re lucky. Otherwise they’ll begin their careers working in places that look a lot more like Starbucks.

In his article, Gawande notes that despite the many challenges of adapting to working (and living) on a business software platform, software is eating the world for a good reason: to improve outcomes for consumers. The Epic implementation should allow hospitals to scan records to identify patients who’ve been on opioids for more than three months in order to provide outreach and reduce risk of overdose, or to improve care for homeless patients by seeing that they’ve already had three negative TB tests and therefore don’t need to be isolated. “We think of this as a system for us and it’s not,” said the hospital system’s chief clinical officer. “It is for the patients.

These improved outcomes are synonymous with the data analytics revolution — a revolution that has colleges and universities excited about new programs and increased enrollment. But all the additional data to improve these outcomes needs to be captured first. And that’s done with complex business software. So it’s unfair, or at least hypocritical, of colleges and universities to attempt to pick the fruit of big data without first sowing the seeds. And sowing the seeds entails a serious investment in preparing students with the technical and business process knowledge they’ll need to use the software that makes big data possible.

via Click on the link for the full article

Pimcore closes $3.5M for its open-source data platform to expand in the US

Pimcore, an open-source platform for data and customer experience management which has emerged out of Austria, has closed $3.5 million in a Series A funding led by German Auctus Capital Partners AG. The funding will be used for its US expansion.

Pimcore is aimed at any channel, device, or industry that wants to manage its digital data and customer experience. While there are several such companies on the market today, Pimcore claims to be an ‘out-of-the-box’ solution and the only open-source platform out there, thus competing with more proprietary products from SAP or Informatica which typically run on licensing business models.

CEO of Pimcore, Dietmar Rietsch says: “Our primary goal is to disrupt traditional licensing business models as open-source adoption skyrockets in enterprises. This funding round gives us the resources and tools to be able to stand up to legacy players like SAP and Oracle, and to really transform the customer experience and data management spaces, especially in the US.”

Pimcore recently acquired the US-based Pimcore Global Services and its whole outsourcing infrastructure in Delhi.

After being founded in 2013, it now has over 82,000 companies across 56 countries, including global enterprises such as Audi, Burger King, Continental and Intersport.

via Click on the link for the full article

Goldex raises $1M for its marketplace app for ‘ethical’ physical gold trading

Goldex, a trading app that claims to power so-called ‘ethical pricing’ for retail gold investments, says it has now raised over £1M ($1.25M) in a pre-series A round led by a group of angels and institutional investors.

Amongst those participating in the round are Prepaid Financial Services (a European payment card issuer); Gaël de Boissard, former Executive Board Member of Credit Suisse; Richard Balarkas, former President and CEO of Instinets; Nachi Muthu, former global head of IT trading technology at Credit Suisse; Craig James, founder and CEO of Neopay.

Goldex was launched in late July this year. The company was founded by former City electronic trading pioneers from Credit Suisse and UBS, Sylvia Carrasco and Fernando Ripolles wanted to remove barriers to retail gold trading and address some of the questionable practices in the gold investment markets.

The UK app claims to discover the best price amongst all the gold dealers offering bids and offers within the Goldex platform. Sylvia Carrasco, CEO of Goldex, says the funding “has taken us a step closer to becoming the leading gold trading platform that is both ethical and fully transparent to consumers.”

Golden is not alone in the space. Glint is a competitor, but it does not hold any physical gold – whereas Glint does – and Glint sets the price for buying and selling it.

Instead, Goldex routes all clients’ orders to the largest global peer-to-peer gold exchange in five international vaults (London, Zurich, New York, Toronto and Singapore). The company claims this ensures an average savings of 8-12% on the trades and attempts therefore to avoid price manipulation as well as improving transparency over charges.

via Click on the link for the full article

Nvidia’s limited China connections

Another round of followups on Nvidia, and then some short news analysis.

TechCrunch is experimenting with new content forms. This is a rough draft of something new – provide your feedback directly to the author (Danny at danny@techcrunch.com) if you like or hate something here.

Nvidia / TSMC questions

Following up on my analyses this week on Nvidia (Part 1, Part 2) , a reader asked in regards to Nvidia’s risk with China tariffs:

but the TSMC impact w.r.t. tariffs doesn’t make sense to me. TSMC is largely not impacted by tariffs and so the supply chain with NVIDIA is also not impacted w.r.t. to TSMC as a supplier. There are many alternate wafer suppliers in Taiwan.

This is a challenging question to definitively answer, since obviously Nvidia doesn’t publicly disclose its supply chain, or more granularly, which factories those supply chain partners utilize for its production. It does, however, list a number of companies in its 10-K form as manufacturing, testing, and packaging partners, including:

To understand how this all fits together, there are essentially three phases for bringing a semiconductor to market:

  1. Design – this is Nvidia’s core specialty
  2. Manufacturing – actually making the chip from silicon and other materials at the precision required for it to be reliable
  3. Testing, packaging and distribution – once chips are made, they need to be tested to prove that manufacturing worked, then packaged properly to protect them and shipped worldwide to wherever they are going to be assembled/integrated

For the highest precision manufacturing required for chips like Nvidia’s, Taiwan, South Korea and the U.S. are the world leaders, with China trying to catch up through programs like Made in China 2025 (which, after caustic pushback from countries around the world, it looks like Beijing is potentially scrapping this week). China is still considered to be one-to-two generations behind in chip manufacturing, though it increasingly owns the low-end of the market.

Where the semiconductor supply chain traditionally gets more entwined with China is around testing and packaging, which are generally considered lower value (albeit critical) tasks that have been increasingly outsourced to the mainland over the years. Taiwan remains the dominant player here as well, with roughly 50% of the global market, but China has been rapidly expanding.

U.S. tariffs on Chinese goods do not apply to Taiwan, and so for the most part, Nvidia’s supply chain should be adept at avoiding most of the brunt of the trade conflict. And while assembly is heavily based in China, electronics assemblers are rapidly adapting their supply chains to mitigate the damage of tariffs by moving factories to Vietnam, India, and elsewhere.

Where it gets tricky is the Chinese market itself, which imports a huge number of semiconductor chips, and represents roughly 20% of Nvidia’s revenues. Even here, many analysts believe that the Chinese will have no choice but to buy Nvidia’s chips, since they are market-leading and substitutes are not easily available.

So the conclusion is that Nvidia likely has maneuvering room in the short-term to weather exogenous trade tariff shocks and mitigate their damage. Medium to long-term though, the company will have to strategically position itself very carefully, since China is quickly becoming a dominant player in exactly the verticals it wants to own (automotive, ML workflows, etc.). In other words, Nvidia needs the Chinese market for growth at the exact moment that door is slamming shut. How it navigates this challenge in the years ahead will determine much of its growth profile in the years ahead.

Rapid fire analysis

Short summaries and analysis of important news stories

Saudi Arabia’s Crown Prince Mohammed bin Salman. FETHI BELAID/AFP/Getty Images

US intelligence community says quantum computing and AI pose an ’emerging threat’ to national security – Our very own Zack Whittaker talks about future challenges to U.S. national security. These technologies are “dual-use,” which means that they can be used for good purposes (autonomous driving, faster processing) and also for nefarious purposes (breaking encryption, autonomous warfare). Expect huge debates and challenges in the next decade about how to keep these technologies on the safe side.

Saudi Arabia Pumps Up Stock Market After Bad News, Including Khashoggi Murder – A WSJ trio of reporters investigates the Saudi government’s aggressive attempts to shore up the value of its stock exchange. Exchange manipulation is hardly novel, either in traditional markets or in blockchain markets. China has been aggressively doing this in its stock exchanges for years. But it is a reminder that in emerging and new exchanges, much of the price signaling is artificial.

A law firm in the trenches against media unions – Andrew McCormick writes in the Columbia Journalism Review how law firm Jones Day has taken a leading role in fighting against the unionization of newsrooms. The challenge of course is that the media business remains mired in cutbacks and weak earnings, and so trying to better divide a rapidly shrinking pie doesn’t make a lot of sense to me. The future — in my view — is entrepreneurial journalists backed up by platforms like Substack where they set their own voice, tone, publishing calendar, and benefits. Having a close relationship with readers is the only way forward for job security.

At least 15 central banks are serious about getting into digital currency – Mike Orcutt at MIT Technology Review notes that there are a bunch of central banks, including China and Canada. What’s interesting is that the trends backing this up including financial inclusion and “diminishing cash usage.” Even though blockchain is in a nuclear winter following the collapse of crypto prices this year, it is exactly these sorts of projects that could be the way forward for the industry.

What’s next

More semiconductors probably. And Arman and I are side glancing at Yelp these days. Any thoughts? Email me at danny@techcrunch.com.

This newsletter is written with the assistance of Arman Tabatabai from New York

via Click on the link for the full article

Robinhood said to not be properly insured to offer checking & savings

Robinhood’s new high-interest, zero-fee checking and savings feature seems to be too good to be true. Users’ money may not be fully protected. The CEO of the Securities Investor Protection Corporation, a non-profit membership corporation that insures stock brokerages, tells TechCrunch its insurance would not apply to checking and savings accounts the way Robinhood claims. “Robinhood would be buying securities for its account and sharing a portion of the proceeds with their customers, and that’s not what we cover” says SIPC CEO Stephen Harbeck. “I’ve never seen a single document on this. I haven’t been consulted on this.”

That info directly conflicts with comments from Robinhood’s comms team, which told me yesterday users would be protected because the SIPC insures brokerages and the checking/savings feature is offered via Robinhood’s brokerage that is a member of the SIPC.

If Robinhood checking and savings is indeed ineligible for insurance coverage from the SIPC, and since it doesn’t qualify for FDIC protection like a standard bank, users’ funds could be at risk. Robinhood co-CEO Baiju Bhatt told me that “Robinhood invests users’ checking and savings money into government-grade assets like US treasuries and we collect yield from those assets and pay that back to customers in the form of 3 percent interest.” But Harbeck tells me that means users would effectively be loaning Robinhood their money, and the SIPC doesn’t cover loans. If a market downturn caused the values of those securities to decline and Robinhood couldn’t cover the losses, the SIPC wouldn’t necessarily help users get their money back. 

Robinhood’s team insisted yesterday that customers would not lose their money in the event that the treasuries it invests in decline, and that only what users gamble on the stock market would be unprotected as is standard. But now it appears that because Robinhood is misusing its brokerage classification to operate checking and savings accounts where it says users don’t have to invest in stocks and other securities, SIPC insurance wouldn’t apply. “I have an issue with some of the things on their website about whether these checking and savings accounts would be protected. I refered the issue to the SEC” Harbeck tells me. TechCrunch has reached out to the SEC and will update if we hear back about its perspective on the issue.

Robinhood planned to start shipping its Mastercard debit cards to customers on December 18th with users being added off the waitlist in January. That might need to be delayed due to the insurance problem. We’ve repeatedly asked Bhatt and Robinhood’s team for a formal statement and clarification this morning, but have not heard back.

Robinhood touted how its checking and savings features have no minimum account balance, overdraft fees, foreign transaction fees, or card replacement fees. It also has 75,000 free-to-use ATMs in its network, which Bhatt claims is more than the top five US banks combined. And its 3 percent interest rate users earn is much higher than the 0.09% average interest rate for traditional savings, and beats  most name brand banks outside of some credit unions.

But for those perks, users must sacrifice brick-and-mortar bank branches that can help them with troubles, and instead rely on a 24/7 live chat customer support feature from Robinhood. The debit card has Mastercard’s zero-liability protection against fraud, and Robinhood partners with Sutton Bank to issue the card. But it’s unclear how the checking and savings accounts would be protected against other types of attacks or scams.

Robinhood was likely hoping to build a larger user base on top of its existing 6 million accounts by leveraging software scalability to provide such competitive rates. It planned to be profitable from its margin on the interest from investing users’ money and a revenue sharing agreement with Mastercard on interchange fee charged to merchants when you swipe your card. But long-term, Robinhood may use checking and savings as a wedge into the larger financial services market from which it can launch more lucrative products like loans.

But that could fall apart if users are scared to move their checking and savings money to Robinhood. Startups can suddenly fold or make too risky of decisions while chasing growth. Robinhood’s valuation went from $1.3 billion last year to $5.6 billion when it raised $363 million this year. That puts intense pressure on the company to grow to justify that massive valuation. In its rush to break into banking, it may have cut corners on becoming properly insured.

[DIsclosure: The author of this article knows Robinhood co-founders Baiju Bhatt and Vlad Tenev from college 10 years ago]

via Click on the link for the full article

Robinhood’s 3% interest checking & savings may not be properly insured

Robinhood’s new high-interest, zero-fee checking and savings feature seems to be too good to be true. Users’ money may not be fully protected. The CEO of the Securities Investor Protection Corporation, a non-profit membership corporation that insures stock brokerages, tells TechCrunch its insurance would not apply to checking and savings accounts the way Robinhood claims. “Robinhood would be buying securities for its account and sharing a portion of the proceeds with their customers, and that’s not what we cover” says SIPC CEO Stephen Harbeck. “I’ve never seen a single document on this. I haven’t been consulted on this.”

That info directly conflicts with comments from Robinhood’s comms team, which told me yesterday users would be protected because the SIPC insures brokerages and the checking/savings feature is offered via Robinhood’s brokerage that is a member of the SIPC.

If Robinhood checking and savings is indeed ineligible for insurance coverage from the SIPC, and since it doesn’t qualify for FDIC protection like a standard bank, users’ funds could be at risk. Robinhood co-CEO Baiju Bhatt told me that “Robinhood invests users’ checking and savings money into government-grade assets like US treasuries and we collect yield from those assets and pay that back to customers in the form of 3 percent interest.” But Harbeck tells me that means users would effectively be loaning Robinhood their money, and the SIPC doesn’t cover loans. If a market downturn caused the values of those securities to decline and Robinhood couldn’t cover the losses, the SIPC wouldn’t necessarily help users get their money back. 

Robinhood’s team insisted yesterday that customers would not lose their money in the event that the treasuries it invests in decline, and that only what users gamble on the stock market would be unprotected as is standard. But now it appears that because Robinhood is misusing its brokerage classification to operate checking and savings accounts where it says users don’t have to invest in stocks and other securities, SIPC insurance wouldn’t apply. “I have an issue with some of the things on their website about whether these checking and savings accounts would be protected. I refered the issue to the SEC” Harbeck tells me. TechCrunch has reached out to the SEC and will update if we hear back about its perspective on the issue.

Robinhood planned to start shipping its Mastercard debit cards to customers on December 18th with users being added off the waitlist in January. That might need to be delayed due to the insurance problem. We’ve repeatedly asked Bhatt and Robinhood’s team for a formal statement and clarification this morning, but have not heard back.

Robinhood touted how its checking and savings features have no minimum account balance, overdraft fees, foreign transaction fees, or card replacement fees. It also has 75,000 free-to-use ATMs in its network, which Bhatt claims is more than the top five US banks combined. And its 3 percent interest rate users earn is much higher than the 0.09% average interest rate for traditional savings, and beats  most name brand banks outside of some credit unions.

But for those perks, users must sacrifice brick-and-mortar bank branches that can help them with troubles, and instead rely on a 24/7 live chat customer support feature from Robinhood. The debit card has Mastercard’s zero-liability protection against fraud, and Robinhood partners with Sutton Bank to issue the card. But it’s unclear how the checking and savings accounts would be protected against other types of attacks or scams.

Robinhood was likely hoping to build a larger user base on top of its existing 6 million accounts by leveraging software scalability to provide such competitive rates. It planned to be profitable from its margin on the interest from investing users’ money and a revenue sharing agreement with Mastercard on interchange fee charged to merchants when you swipe your card. But long-term, Robinhood may use checking and savings as a wedge into the larger financial services market from which it can launch more lucrative products like loans.

But that could fall apart if users are scared to move their checking and savings money to Robinhood. Startups can suddenly fold or make too risky of decisions while chasing growth. Robinhood’s valuation went from $1.3 billion last year to $5.6 billion when it raised $363 million this year. That puts intense pressure on the company to grow to justify that massive valuation. In its rush to break into banking, it may have cut corners on becoming properly insured.

[DIsclosure: The author of this article knows Robinhood co-founders Baiju Bhatt and Vlad Tenev from college 10 years ago]

via Click on the link for the full article

The new Palm is almost the MP3 player I want

The iPod Classic still looms larger as my favorite gadget of all time. Sure, plenty have lapped the device in terms of technology, while any lingering concerns about not owning the music I listen to have faded for the ubiquity of Spotify, but the iPod lives on in the perfect sweet spot for my own musical obsessions.

Of course, that device finally gave up the ghost, as all gadget eventually do. After about three or so, I eventually threw in the towel. Apple had long since discontinued the line, and buying them second hand was just getting too pricy. So I moved on to streaming, my MP3s collecting dust inside some external hard drive.

We recently wrote up the latest version of the Mighty, a device I spent a bit of time with on a recent trip to Asia, before handing it off to a colleague who was a much bigger fan of the whole iPod shuffle for Spotify model.

Before jetting off to Africa this past week, however, it occurred to me that it might be time to give the Palm another shot. We weren’t particularly kind to the device, and the rest of the tech community mostly agreed with that assessment. But it would be a shame to write the product off entirely. Sure, it’s got a lot of issues, and is targeted a sliver of the overall smartphone market, but maybe there’s some redemption to be found in the product.

The hardware construction is certainly solid for what largely amounts to shrunk down version of the iPhone. Perhaps there’s something to this whole secondary device thing, after all. Back in the waining days of my iPod dependence, I’d rarely leave home without the Classic in one pocket and a smartphone in another. I might have killed for a touch interface MP3 player with as slim a form factor as the Palm.

It’s an ideal size for the task, really. Small enough to slip into a change pocket, with a large screen to navigate through a music library. Staring down a pair of 10+ hour flights and a couple of days of questionable internet connectivity, I dusted off the Palm and loaded it up with songs downloaded from Spotify.

That was the first issue. This one’s wholly unrelated to Palm, but man, the way Spotify serves up offline songs is a real pain in the ass. Rather than simply displaying them when the app is offline, you have to jump through hoops to get them to show up. The easiest way to scrolling through to playlists, swiping down to bring up the search bar, then clicking “Filter” to only display offline songs.

One has to employ a similar method to get around one of the Palm’s biggest shortcomings as a music player: the lack of volume buttons. Here you have to wait until a song is playing, then swipe down to bring up the volume slider. If music isn’t playing, on the other hand, you’ve got got to navigate through the settings. Even Apple, with all of its animosity toward all thing button, has kept the volume buttons on-board.

Battery is another major concern. Of course, sticking the device in airplane mode helps a bit — though even then, it likely won’t getting you through a full international flight. It is, however, enough to get your through a trip to the gym, certainly, and the form factor is small enough to stuff into a pocket when going for a run.

At the end of the day, the experiment was ultimately more trouble than it was worth. The fact of the matter is that most of the tech world has moved on from the notion of a devoted music player. Still, I can’t shake the feeling that, with a few hardware (too late to add a headphone jack?) and software tweaks (and a lower, off-contract price point), Palm could help reignite that fire for some.

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Facebook open sources PyText NLP framework

Facebook AI Research is open sourcing some of the conversational AI tech it is using to power its Portal video chat display and M suggestions on Facebook Messenger.

The company announced today that its PyTorch-based PyText NLP framework is now available to developers.

Natural language processing deals with how systems parse human language and are able to make decisions and derive insights. The PyText framework, which the company sees as a conduit for AI researchers to move more quickly between experimentation and deployment will be particularly useful for tasks like document classification, sequence tagging, semantic parsing and multitask modeling, among others, Facebook says.

The company has built the framework to fit pretty seamlessly into research and production workflows with an emphasis on robustness and low-latency to meet the company’s real-time NLP needs. The product is responsible for models powering more than a billion daily predictions at Facebook.

Another big highlight is the framework’s modularity, allowing it to not only to create new pipelines from scratch but to modify existing workflows. PyText connects to the ONNX and Caffe2 frameworks. It also supports training multiple models at once in addition to distributed training to train models over several runs.

The company obviously isn’t done with making improvements to its NLP frameworks. Facebook says that going forward they’re paying particular attention to working to build an end-to-end workflow for models running on mobile devices.

PyText is available on GitHub.

via Click on the link for the full article

Facebook open sources PyText NLP framework

Facebook AI Research is open sourcing some of the conversational AI tech it is using to power its Portal video chat display and M suggestions on Facebook Messenger.

The company announced today that its PyTorch-based PyText NLP framework is now available to developers.

Natural language processing deals with how systems parse human language and are able to make decisions and derive insights. The PyText framework, which the company sees as a conduit for AI researchers to move more quickly between experimentation and deployment will be particularly useful for tasks like document classification, sequence tagging, semantic parsing and multitask modeling, among others, Facebook says.

The company has built the framework to fit pretty seamlessly into research and production workflows with an emphasis on robustness and low-latency to meet the company’s real-time NLP needs. The product is responsible for models powering more than a billion daily predictions at Facebook.

Another big highlight is the framework’s modularity, allowing it to not only to create new pipelines from scratch but to modify existing workflows. PyText connects to the ONNX and Caffe2 frameworks. It also supports training multiple models at once in addition to distributed training to train models over several runs.

The company obviously isn’t done with making improvements to its NLP frameworks. Facebook says that going forward they’re paying particular attention to working to build an end-to-end workflow for models running on mobile devices.

PyText is available on GitHub.

via Click on the link for the full article