Don’t bite the hand News Feeds you


October 28, 2019

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Hey y’all, happy Monday. We hope you had a better weekend than Mark Zuckerberg. Today, we’re thinking about the market for fake reviews and old-school technologies that people still use (would you believe the government still uses floppy disks?).

And did you read our piece about pizza innovation yesterday? Tell us how you would make over the traditional pie — we’ll highlight the best ideas later this week.

The Hustle Daily Email

Facebook and other tech giants bet big on the business of news

Last week, Facebook unveiled “Facebook News,” a new section of its site dedicated to “deeply-reported and well-sourced” journalism. 

[Not to be confused with the original FB news feed, which remains dedicated to pictures of old high school classmates and their new cats].

Facebook’s past news efforts have gone over poorly — especially after the company took heat for its role in spreading misinformation during the 2016 election — but now Zuckerberg is following other tech giants and investing in news.

So, what’s Facebook up to this time?

Facebook News, which rolled out for select users last week, is a new FB tab that features journalism from publishers like The New York Times, The Washington Post, BuzzFeed, and — controversially — Breitbart.

But Facebook News differs from previous efforts in a key respect: It will pay publishers for their content, striking big (sometimes multimillion-dollar) licensing deals. (Unlike the others, Breitbart will not be paid.)

Reactions across the news-osphere were mixed: 

  • BuzzFeed CEO Jonah Peretti called it “a good day for the internet.”
  • Recode (Vox) described it as “a big deal for newspapers.”
  • The New York Times called it “an uneasy truce.” 
  • TechCrunch said “it shouldn’t be trusted.”

After all, Facebook ain’t doing this for free

In an op-ed in The New York Times, Z-Berg argues Facebook News is a good deal for publishers because it “establishes a long-term financial partnership between publishers and Facebook for the first time.” 

Of course, it’s also a great deal for Facebook, because it gives news consumers another reason to spend more time in the sticky ’Book.

But while not everyone agrees on Facebook News’ ultimate impact on publishers, its very existence suggests Zuckerberg has decided that original journalism could benefit the bottom line.

And Facebook isn’t the only tech that thinks news could pay…

  • Apple launched its news aggregation service News+, which includes subscriptions to magazines like National Geographic and newspapers like The Wall Street Journal, in March.
  • Amazon rolled out a news aggregation app, which curates news from publishers like CBS News, Reuters, HuffPost, and Bloomberg for Amazon Fire TV users, just last week.
  • Google changed its algorithm to prioritize breaking and original news — a move that execs hope will encourage users to spend more time on the Big G — last month.
  • And media giants like CNN are also building news aggregators to combine their content with competitors’ to appeal to consumers.
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Details for Day 1 keynotes and Day 2 breakout session titles are finally here. Hit the link below to see details. And with titles like, “How I Raised $120M Building a Business With a Product No One Cares About,” you really don’t want to miss this.

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Beauty brand trades night serums for truth serums in FTC settlement

Last week, the skincare company Sunday Riley agreed to settle a Federal Trade Commission complaint saying it deceived the public by faking online reviews. Some say this settlement could open the 5-star fraud floodgates. 

So, Sunday Riley’s CEO is an actual person named Sunday Riley

In a July 2016 email, Sunday Riley the person sent an email encouraging employees to post positive reviews of Sunday Riley the brand on Sephora.com.

Riley went all-out in her orders. She listed step-by-step instructions for setting up and using a VPN, creating at least 3 separate Sephora accounts, leaving 5-star reviews for Sunday Riley products, and “disliking” negative reviews.

Riley had her reasons for racking up the fake reviews — phony ratings is a growing problem The Hustle has investigated. A Harvard study shows brands that see a Yelp ratings increase of 1 star also see a 5-9% revenue increase.

Girlfran had a plan for everything… except a whistleblower posting screenshots to Reddit

The FTC investigated and decided this wasn’t a good look. Sunday Riley settled the FTC complaints by pinky swearing to never post fake reviews again. However, the company did not have to admit to wrongdoing, and it will pay no fines or refunds.

Two FTC commissioners expressed misgivings about the deal, saying that letting Sunday Riley go with just a slap on the wrist might encourage other companies to inflate their online reviews. After all, a little puffery costs considerably less than a traditional advertising campaign. 

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The US Nuclear Arsenal No Longer Requires… Floppy Disks?

Remember floppy disks? Those thin black squares you used to feed computers to run programs like Microsoft Office and “The Oregon Trail”? The US relied on this old-school tech to coordinate its nuclear arsenal up until this past June.

The nuclear command and control system still runs on an enormous computer from the ‘70s, but the content has been transferred to solid state digital storage, C4ISRNET reported.

Hold up — why was the US using ancient tech to coordinate its nuclear weapons?

It’s not super clear why it took the US so long to modernize its system. Apparently our nuclear info was more secure that way: Storing it on 8” floppy disks on systems unconnected to the internet made it less vulnerable to hackers. 

There also seemed to be an “if it ain’t broke, don’t fix it” attitude at play, even though training people to use and maintain the system has been a huge challenge.

Turns out lots of federal agencies use antiquated tech

A 2016 report from the US Government Accountability Office brought attention to the Defense Department’s use of floppy disks for nuclear coordination and highlighted a number of federal agencies that use aging tech, including the Social Security Administration, the Department of the Treasury, and the Department of Commerce.

The GAO report warned that using outdated software and hardware poses security risks — especially when the tech’s no longer supported by the original vendor and requires maintenance by technicians with highly specialized skill sets.

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Small business of the week: Australian skincare company eliminates the bull semen, invests in vegan products

Want your story featured? Fill out our Small Business survey. See anonymized financials of 600+ companies by subscribing to Trends.

Angelique Ahearn battled sensitive skin for decades and had to carefully check the ingredients in her cosmetics. She was often shocked, finding crushed beetles, bull semen, and sheep grease in popular products.

After consulting for a skincare brand, she recognized a gap waiting to be filled: natural skincare that wasn’t lumpy and brown and tested on animals. She quit her job and launched NEEK Skin Organics in 2014 (motto: “testing on sisters, not animals”). 

The brand featured one of the first vegan lipsticks on the market. NEEK has invested in other cruelty-free, vegan products, including face cleansers, moisturizers, and eco barrettes. 

The business, based in Australia, now does ~$200k per year.

Stats at a glance:

  • Founders: Angelique Ahearn
  • Employees: 2
  • Years in business: 4
  • Cost to launch: $100k
  • Funding methods: Personal savings, loans
  • 1st-year revenue: $50k
  • Current annual revenue: $150k
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