Daily Crunch: Zoom and Pinterest go public

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1. Zoom pops 81 percent in Nasdaq debut

Thursday was a big day for tech IPOs, with Zoom opening trading at $65 a share. The company’s initial public offering gave it a fully diluted market cap of roughly $16 billion.

Meanwhile, Pinterest debuted on the New York Stock Exchange at $23.75 per share.

2. Facebook now says its password leak affected ‘millions’ of Instagram users

“We discovered additional logs of Instagram passwords being stored in a readable format,” the company said. “We now estimate that this issue impacted millions of Instagram users. We will be notifying these users as we did the others.”

3. Mueller report sheds new light on how the Russians hacked the DNC and the Clinton campaign

At one point, the Russians used servers located in the U.S. to carry out the massive data exfiltration effort, the report says.

The Instagram app is seen on an iPhone on 16 March, 2017. (Photo by Jaap Arriens/NurPhoto via Getty Images)

4. Instagram hides Like counts in leaked design prototype

Hiding Like counts could reduce the herd mentality, where people just Like what’s already got tons of Likes. It could also reduce the sense of competition.

5. The consumer version of BBM is shutting down on May 31

While the consumer version of BlackBerry Messenger is shutting down, the service will still exist. In fact, BlackBerry announced a plan to open its enterprise version to general consumers.

6. Amazon launches ad-supported music service to Echo owners

Until this week, Echo owners who wanted to stream music from Amazon could either pay for an annual Prime membership in order to access Prime Music, or they could pay $3.99 per month to stream from Amazon Music Unlimited.

7. The different playbooks of D2C brands

Venture capital firms have invested over $4 billion in D2C brands since 2012, with 2018 alone accounting for over $1 billion. How are these D2C brands going to evolve and how could they sustain as businesses? (Extra Crunch membership required.)

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Google’s Ivan Poupyrev shows off Jacquard, which connects his Levi’s jacket to the cloud

Ivan Poupyrev, the technical projects lead at Google’s Advanced Technology and Projects division, just gave a TED talk that was simultaneously a presentation and a demo of new technology.

Poupyrev was showing off Jacquard, a device that allowed him to use the sleeve of his jacket as a controller for his presentation slides. Google has talked about this work before, and there’s even a $350 Levi’s jacket available for purchase.

But today, Poupyrev actually used Jacquard to control his presentation, and laid out the vision behind the project. Although it didn’t quite work at first, once Poupyrev fixed things backstage and restarted his presentation, he could swipe forward on his sleeve to advance the presentation, or swipe back and revisit the previous slide.

Poupyrev didn’t offer many details about the Jacquard device itself, but he said it can be connected to clothing and other objects with just “a few electrodes,” and that it can recognize the object and then “reconfigure itself” to offer the right kinds of interaction.

The device he held up onstage was small and grey — I could have mistaken it for the key fob that I used to swipe into my old apartment. According to Poupyrev’s website, Jacquard also involves a conductive thread that can be woven on a standard loom.

Ivan Poupyrev

Ivan Poupyrev speaks at TED2019: Bigger Than Us. April 15 – 19, 2019, Vancouver, BC, Canada. Photo: Bret Hartman / TED

Why would you want to control a presentation from your jacket sleeve? Poupyrev (who’s also worked as a researcher for Walt Disney Imagineering and Sony) described our current options for computer interaction as “disappointing,” so he’s been looking to “hack into the things you use every day and make them interactive.”

“We need to make technology that changes makers of things into makers of smart things,” he said.

As these everyday objects become more interactive and connected, Poupyrev said it’s important to avoid fragmentation: “We have to create a single computing platform, which powers all those things.” In his view, the cloud is that platform, with Jacquard serving as the connection between everyday objects and the cloud.

Poupyrev suggested that Google could give Jacquard tags to manufacturers to incorporate into their products. It’s rolling out first through the aforementioned partnership with Levi’s, and Poupyrev was wearing a Jacquard-powered Levi’s jean jacket onstage.

“This jacket I’m wearing can control my mobile phone and presentation, but it remains a jacket,” he said. In other words, you can add new interactivity to clothing or furniture without interfering with their core function — just as a smartphone can now browse the internet, take photos, install apps and more, while still allowing you to make phone calls.

Ivan Poupyrev

Ivan Poupyrev speaks at TED2019: Bigger Than Us. April 15 – 19, 2019, Vancouver, BC, Canada. Photo: Ryan Lash / TED

“We would like to let people who make those things — artists and engineers, brands and craftsmen — to imagine and create this new world where things are connected, where you don’t need keyboards and screens and mouses to interact with a computer,” he said.

After the presentation, TED’s Chris Anderson joined Poupyrev onstage. Anderson sounded impressed by the demo, but he also pointed out that it could “terrify some people,” since it potentially creates “the biggest ever surveillance network” for Google or another company.

When asked why Google would bring such a device to market, Poupyrev said, “I’m not a businessman, I’m a researcher.” Anderson pressed him on whether there needs to be “some kind of contract” ensuring that this data isn’t abused, to which Poupyrev replied, “I completely agree.” He said that in Google’s initial partnerships, “the data is completely locked in.”

“We’re trying to figure out what exactly are we going to do with this data,” he said. “We’re sensitive to this particular concern.”

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Netflix to open a production hub in New York and invest up to $100 million in the city

Start spreading the news. Netflix is coming to New York City in a big way.

The streaming media service has committed to invest up to $100 million to build a production hub and hire hundreds of new staffers in the Big Apple, according to a statement from Governor Andrew M. Cuomo.

Netflix’s new production hub will include an expanded Manhattan office and six sound stages in Brooklyn that could bring hundreds of executive positions and thousands of production crew jobs to New York within the next five years, according to a statement from the Empire State Development Corp. 

“New York has created a film-friendly environment that’s home to some of the best creative and executive talent in the world, and we’re excited to provide a place for them at Netflix with our production hub,” said Jason Hariton, director of Worldwide Studio Operations & Real Estate at Netflix, in a statement.

The new corporate offices Netflix has planned will occupy 100,000 square feet in Manhattan at 888 Broadway, housing 127 new executive content acquisition, development, production, legal, publicity and marketing positions. They’ll join the 32 employees Netflix currently has in New York.

Netflix already produces Orange Is the New Black, Unbreakable Kimmy Schmidt, She’s Gotta Have It, The Irishman, Someone Great, Private Life and Russian Doll in New York and has leased 161,000 square feet to build sound stages and support spaces in Brooklyn’s East Williamsburg neighborhood.

To sweeten the pot for Netflix, the Empire State Development Corp. has offered $4 million in performance-based Excelsior Tax Credits over 10 years, which the corporation says are tied to real job creation. To receive the incentive, Netflix must create 127 jobs by 2024 at its executive production office and retain those jobs for another five years.

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‘Child’s Play’ trailer gets a smart home makeover, giving a Chucky control over connected devices

Oh golly does the new trailer for “Child’s Play” look good.

Not only does it have appearances by Aubrey Plaza, Mark Hamill (as the voice of Chucky) and Bryan Tyree Henry (who’s awesome in Atlanta), but it’s giving Chucky a smart home makeover.

The demonically possessed doll now has the power to control networked devices like thermostats, drones, doors and pretty much any gadget in a connected home (from the looks of the trailer).

However horrifying the thought may be of a demon-possessed doll — imagine the damage it could do by taking over your trusty Alexa. Now that’s truly terrifying.

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Amazon’s one-two punch: How traditional retailers can fight back

If you think physical retail is dead, you couldn’t be more wrong. Despite the explosion in e-commerce, we’re still buying plenty of stuff in offline stores. In 2017, U.S. retail sales totaled $3.49 trillion, of which only 13 percent (about $435 billion) were e-commerce sales. True, e-commerce is growing at a much faster annual pace. But we’re still very far from the tipping point.

Amazon, the e-commerce giant, is playing an even longer game than everyone thinks. The company already dominates online retail — Amazon accounted for almost 50 percent of all U.S. e-commerce dollars spent in 2018. But now Amazon is eyeing the much bigger prize: modernizing and dominating retail sales in physical locations, mainly through the use of sophisticated data analysis. The recent reports of Amazon launching its own chain of grocery stores in several U.S. cities — separate from its recent Whole Foods acquisition — is just one example of how this could play out.

You can think of this as the Amazon one-two punch: The company’s vast power in e-commerce is only the initial, quick jab to an opponent’s face. Data-focused innovations in offline retail will be Amazon’s second, much heavier cross. Traditional retailers too focused on the jab aren’t seeing the cross coming. But we think canny retailers can fight back — and avoid getting KO’d. Here’s how.

The e-commerce jab starts with warehousing

Physical storage of goods has long been crucial to advances in commerce. Innovations here range from Henry Ford’s conveyor belt assembly line in 1910, to IBM’s universal product code (the “barcode”) in the early 1970s, to J.C. Penney’s implementation of the first warehouse management system in 1975. Intelligrated (Honeywell), Dematic (KION), Unitronics, Siemens and others further optimized and modernized the traditional warehouse. But then came Amazon.

After expanding from books to a multi-product offering, Amazon Prime launched in 2005. Then, the company’s operational focus turned to enabling scalable two-day shipping. With hundreds of millions of product SKUs, the challenge was how to get your pocket 3-layer suture pad (to cite a super-specific product Amazon now sells) from the back of the warehouse and into the shippers’ hands as quickly as possible.

Make no mistake: Amazon’s one-two retail punch will be formidable.

Amazon met this challenge at a time when automated warehouses still had massive physical footprints and capital-intensive costs. Amazon bought Kiva Systems in 2012, which ushered in the era of Autonomous Guided Vehicles (AGVs), or robots that quickly ferried products from the warehouse’s depths to static human packers.

Since the Kiva acquisition, retailers have scrambled to adopt technology to match Amazon’s warehouse efficiencies.  These technologies range from warehouse management software (made by LogFire, acquired by Oracle; other companies here include Fishbowl and Temando) to warehouse robotics (Locus Robotics, 6 River Systems, Magazino). Some of these companies’ technologies even incorporate wearables (e.g. ProGlove, GetVu) for warehouse workers. We’ve also seen more general-purpose projects in this area, such as Google Robotics. The main adopters of these new technologies are those companies that feel Amazon’s burn most harshly, namely operators of fulfillment centers serving e-commerce.

The schematic below gives a broad picture of their operations and a partial list of warehouse/inventory management technologies they can adopt:

It’s impossible to say what optimizations Amazon will bring to warehousing beyond these, but that may be less important to predict than retailers realize.

The cross: Modernizing the physical retail environment

Amazon has made several recent forays into offline shopping. These range from Amazon Books (physical book stores), Amazon Go (fast retail where consumers skip the cashier entirely) and Amazon 4-Star (stores featuring only products ranked four-stars or higher). Amazon Live is even bringing brick-and-mortar-style shopping streaming to your phone with a home-shopping concept à la QVC. Perhaps most prominently, Amazon’s 2017 purchase of Whole Foods gave the company an entrée into grocery shopping and a nationwide chain of physical stores.

Most retail-watchers have dismissed these projects as dabbling, or — in the case of Whole Foods — focused too narrowly on a particular vertical. But we think they’re missing Bezos’ longer-term strategic aim. Watch that cross: Amazon is mastering how physical retail works today, so it can do offline what it already does incredibly well online, which is harness data to help retailers sell much more intelligently. Amazon recognizes certain products lend themselves better to offline shopping — groceries and children’s clothing are just a few examples.

How can traditional retailers fight back? Get more proactive.

Those shopping experiences are unlikely to disappear. But traditional retailers (and Amazon offline) can understand much, much more about the data points between shopping and purchase. Which path did shoppers take through the store? Which products did they touch and which did they put into a cart? Which items did they try on, and which products did they abandon? Did they ask for different sizes? How does product location within the store influence consumers’ willingness to buy? What product correlations can inform timely marketing offers — for instance, if women often buy hats and sunglasses together in springtime, can a well-timed coupon prompt an additional purchase? Amazon already knows answers to most of these questions online. They want to bring that same intelligence to offline retail.

Obviously, customer privacy will be a crucial concern in this brave new future. But customers have come to expect online data-tracking and now often welcome the more informed recommendations and the convenience this data can bring. Why couldn’t a similar mindset-shift happen in offline retail?

How can retailers fight back?

Make no mistake: Amazon’s one-two retail punch will be formidable. But remember how important the element of surprise is. Too many venture capitalists underestimate physical retail’s importance and pooh-pooh startups focused on this sector. That’s extremely short-sighted.

Does the fact that Amazon is developing computer vision for Amazon Go mean that alternative self-checkout companies (e.g. Trigo, AiFi) are at a disadvantage? I’d argue that this validation is actually an accelerant as traditional retail struggles to keep up.

How can traditional retailers fight back? Get more proactive. Don’t wait for Amazon to show you what the next best-practice in retail should be. There’s plenty of exciting technology you can adopt today to beat Jeff Bezos to the punch. Take Relex, a Finnish startup using AI and machine learning to help brick-and-mortar and e-commerce companies make better forecasts of how products will sell. Or companies like Memomi or Mirow that are creating solutions for a more immersive and interactive offline shopping experience.

Amazon’s one-two punch strategy seems to be working. Traditional retailers are largely blinded by the behemoth’s warehousing innovations, just as they are about to be hit with an in-store innovation blow. New technologies are emerging to help traditional retail rally. The only question is whether they’ll implement the solutions fast enough to stay relevant.

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