Thu, 3/22

Boats n’ woes: Cyberpirates are targeting the world’s biggest shipping boats

The concept of shipping — i.e., setting a massive container afloat on the open ocean for months at a time to reach a faraway land — seems archaic.

But these days, the megaships transporting 18k 20’x8’ shipping containers apiece aren’t sailing on a hope and a prayer, they’ve got advanced nav systems to make sure they get where they’re going — and a new brand of pirate gunning for their booty.

Hacks ahoy!

Now, on top of stormy seas, piracy, isolation, and political tension, crews have hackers to deal with.

Remember the massive malware outbreak “NotPetya” that held computers for ransom across the world last summer? Well, that little bug cost Danish shipping giant Maersk as much as $300m as they reinstalled software of “tens of thousands of PCs and servers” on their ships.

Companies focused on maritime cybersecurity have already started popping up to help companies protect the 10B tons of cargo shipped annually.

What’s the worst that could happen?

Aside from costing a $500B industry a few million doubloons, cyberpirates could also pull a Captain Phillips and commandeer the vessel, then ram it into another ship. 

They could also target luxury “superyachts,” which are especially vulnerable to navigation hacking via Wi-Fi, and extort their wealthy passengers.

And, if being stuck on a cruise ship with thousands of tourists doesn’t already sound like a nightmare, getting stuck on one that’s been hijacked definitely would be.

Thu, 3/22

NASA gives a 3D rocket-printing startup a test facility… for free

Relativity Space, a 17-person startup that makes rockets with 3D printers, will take over NASA’s 20-year lease of the Stennis Space Center in Mississippi… at no cost. 

According to a Bank of America Merrill Lynch forecast published last year, the space industry could hit $2.7T in the next three decades — and Relativity hopes to fill a growing demand for rockets that can be quickly produced at a lower price point.

Private space partnerships have taken off

Since the end of the space race, NASA — which receives only 0.5% of the federal budgetary pie today compared to 4.5% in 1966 — has had to knock on the private sector’s door to borrow some rocket fuel.

At first, only mega-contractors like Boeing or SpaceX had pockets deep enough to perform the expensive testing required to win big NASA contracts.

But as NASA continued to dole out multibillion-dollar contracts to private companies after dismantling their space shuttle program in 2011, investors began to smell an opportunity. 

Shoot for the moon, land among the VCs

When the White House recently announced a plan to send astronauts back to the moon with no expansion of NASA’s budget for R&D, private investors were more than happy to fill the void: They pumped $3.9B into private space companies last year alone.

Although they know the skies will be crowded with competitors, the founders of Relativity, who defected from SpaceX and Blue Origin, are confident that their rocket — which is built in 60 days for $10m and carries more than a ton of cargo — won’t fail to launch.

Thu, 3/22

Cloud wars are getting real: Salesforce buys  MuleSoft at a $6.5B valuation

On Tuesday, Salesforce agreed to buy publicly traded cloud software company MuleSoft at $44.89 per share — a whopping $6.5B valuation in total.

That’s 16 times MuleSoft’s expected revenue in 2018, a price tag analysts are calling “lofty“ (‘Software as a service’ companies are typically valued at 10x their annual recurring revenue).

What the frig is MuleSoft?

MuleSoft sells software that helps companies share data across different systems, including those existing in “on-premises” data centers.

The company is a great pairing for Salesforce, which will need access to data across the company to build out their AI and machine learning layer Einstein.

The acquisition (expected to close by the end of July) also gives Salesforce access to big MuleSoft customers like Coca-Cola, VMware, GE, AT&T, and Cisco. 

Things just got a lot more complicated

This is the most expensive cloud software deal in history, and it could set the precedent for cloud software acquisitions moving forward.

Some analysts speculate the exorbitant price is the result of a bidding war among Salesforce, Google, Microsoft, Oracle, and SAP — and if that’s the case, the competition’s only gonna get fiercer from here.

Expensive for the cloud giants looking to gobble up complementary software, and great for the cloud companies on the menu.

Thu, 3/22

Kalanick is back in biz: Ex-Uber CEO finds a new gig in City Storage Systems

Well, that was quick… Not long after getting ousted from his post as CEO of Uber, polarizing corporate bad boy Travis Kalanick has a new job as the CEO of real estate flipping startup City Storage Systems.

Kalanick announced he has invested $150m in City Storage through his brand new personal investment fund — an amount that will allow him to buy out most other outside investors as he takes the throne as CEO.

Digital boy in a digital world

City Storage buys floundering real estate assets (like parking lots and strip malls) and turns them into spaces for business of the “digital era,” (like ecommerce companies).

It’s the first big investment through Kalanick’s personal investment fund 10100 (pronounced ten-one-hundred, FYI), which he announced just a few weeks ago.

According to the T-Man, the firm will focus on his “passions, investments, ideas, and big bets,” with the theme of the fund centered around “large-scale job creation.”

Staying close to the family

Another large area of focus for City Storage will be food delivery (an industry near and dear to Kalanick’s heart).

One of the company’s pre-existing assets is CloudKitchens — a company that provides infrastructure to food-delivery startups, and that just so happens to be a partner of UberEats; using its vehicle fleet to deliver meals from restaurants. It aaall comes full circle…

Since T-Bone stepped down from Uber last year, he’s maintained a large amount of influence in the ride-hailing giant’s day-to-day. Even as the company continues to weather the onslaught of controversies he created.

And with this new investment, he appears to be keeping his friends close, and his frenemies closer.

Wed, 3/21

UPDATE: Bumble tells Match “no means no”

Bumble sent an email to their users this morning that makes it pretty clear where they stand on Match’s acquisition-by-lawsuit strategy:

“We’ll never be yours. No matter the price tag, we’ll never compromise our values… We swipe left on your assumption that a baseless lawsuit would intimidate us.”

*Pause for fist-pumping and “whoop whoop-ing”*

There was speculation that Bumble rejected Match’s previous acquisition attempt due to their rocky history with the company, and this is definitive proof that Bumble hasn’t forgiven or forgotten — and they’re not rolling over anytime soon.

(Full letter below)

Wed, 3/21

The Sims’ creator is making a game “of self-discovery” based on your real memories

Game designer Will Wright, creator of The Sims, has come out of years of hibernation to announce his latest project: an ambitious game called Proxi, in which players can “build games based on their memories.”

The idea is for your experiences, called “mems,” to be displayed in playable scenes, and clumped in themed areas for things like “childhood,” “holidays,” and other real world tie-ins.

What’s this all gonna look like? 

Nobody knows — not even Wright. Instead, he’s kicking off a contest to develop the art for the game, with the promise of hiring the winner full time as Proxi’s 3D artist.

You know what they say, if you can’t do, crowdsource.

But, we’ve been burned before… 

Some of us remember Wright’s last ambitious game from ’08, Spore, which he touted as the “ultimate game,” in which players could evolve their character from a single-cell organism into an intelligent species capable of space travel.

Some of us may have even pre-ordered it, and waited patiently for it to change their lives forever.

And some of us were highly disappointed when the actual game turned out to be nothing more than a few glorified minigames cobbled together in an overhyped shell of what the demo promised.

Some of us may (or may not) work at The Hustle…

Wed, 3/21

Google launches a $300m initiative to help news publishers get it right

Hot off the digital presses: Google announced they are launching the Google News Initiative (GNI) in an effort to assist journalism in the age of fake news.

Over the next three years, the tech giant will put more than $300m toward building products that help create sustainable business models for news outlets while hoping to elevate quality journalism.

The truth: a hot market trend

As of late, Google, Facebook, and Twitter have endured intense (and just) scrutiny by allowing the spread of false and sometimes malevolent information that may have even influenced political elections.

Last week, Facebook was caught in a furious kerfuffle following a whistleblower’s account of the social media giant allegedly selling 50m+ users’ data to an analytics firm working for the Trump campaign at the time of the election; on Monday, the scandal caused shares of the entire tech sector to plummet on Wall Street.

In other words, Google’s timing on this announcement couldn’t have been better.  

Wed, 3/21

Claire’s gets pierced by private equity — files for Chapter 11

After more than 10 years of struggling to stay in business, Claire’s, the finest purveyor of 50-stud earring packs, filed for Chapter 11 bankruptcy. 

But don’t go rushing to stock up on mood rings just yet — they’re not planning on going out of business. 

Instead, they hope to use the bankruptcy filing to rebound and reduce their $2.1B debt 90% by pivoting to online retail and using their brick and mortar locations solely as ear piercing parlors, which they believe will bring customers in-store.

Claire’s rode the private equity train to the brink of bankruptcy

Back in 2007, the private equity firm Apollo Management took the piercing palace private via a $3.1B leveraged buyout (a deal in which the acquirer finances a buyout with borrowed money and uses the purchased company’s assets as collateral). 

Because of high interest rates and the chain’s lukewarm cash flows, Claire’s hasn’t been able to take off the gaudy debt choker that was fastened around their neck over 10 years ago.

They’re not the first company to fall prey to this tactic

Toys R Us suffered the same fate after a leveraged buyout in 2005 that cost them $183M in advisory fees to its private owners. 

Last year, over 50 US retailers filed for bankruptcy after rolling over their debt from their leveraged buyouts. And the retail merchant of death shows no signs of slowing: Analysts predict another $6B in retail debt will mature this year alone.

Wed, 3/21

The taxman is coming for crypto investors,  and coiners are freaking out

To say the crypto market is volatile would be an understatement — Bitcoin’s price went from $997 at the beginning of 2017 to over $19k in December, only to plummet to around $8k on Monday.

Some were smart to cash out at its peak, but, as it turns out, the taxman doesn’t reward people for their ability to get out while the gettin’s good, and now investors have been hit with a big ol’ tax bill their depreciated coins can’t cash. 

Tears of a Redditor

Under the heading, “I just discovered that I owe the IRS $50k that I don’t have, because I traded in cryptos. Am I f*cked?” Reddit-user Thoway explained they were blindsided with a $50k tax hit after selling $120k worth of bitcoin at its peak to buy different coins.

It’s as if reality and pretend have collided for Thoway, who reportedly makes $47k a year as an office assistant in real life and can’t afford to pay his crypto-dominated tax bill now that the value of his “coins” have dropped to $30k.

Taxes and crypto: 2 things nobody knows anything about

In 2014, the IRS announced they started viewing cryptocurrency as a property — not a currency — meaning anything purchased or sold using a digital asset is susceptible to be taxed as a capital gain.

You could be taxed less depending on if your gains were long-term or short-term: Short-term transactions (holding onto digital assets less than one year) can be taxed as high as 39.6%, though holding out longer than a year and a day could mean a lower rate.

“But I never got a 1099??” — Right, turns out crypto brokers don’t have to issue 1099s; unfortunately that doesn’t mean the investor isn’t responsible for reporting their gains.

“Mercy me, Mr. Taxman, I know not what I #gained”

Still not sure? Put simply (by ripping off the Michael Jordan of comedy himself, Jeff Foxworthy): you might owe taxes on crypto if…

  • You sold crypto for cash
  • You bought anything using crypto
  • You traded crypto for other crypto
  • You were compensated in crypto

Sorry coiners, demz da rules. Godspeed come April. 

Tue, 3/20

How much cash are these March Madness upsets worth?

The first weekend of March Madness has lived up to its name: An unprecedented number of Davids dominated Goliaths, making history — and a whole lotta cash for their conferences.

Most notably, UMBC (the Golden Retrievers babayy!) became the first No. 16 seed to beat a No. 1 (Virginia) in the history of the NCAA Tournament — that’s a big payday, to the fight tune of $1.7m.

So how do these payouts work?

All about those units

According to CNBC, units are what the NCAA doles out in revenue rewards for tournament performance.

Teams earn units for every game they play in. This year’s units are valued at around $273k — and when all’s said and done, they add up to way more.

Units are dispersed annually over the next 6 years, increasing in value each year 2-3%, meaning Loyola-Chicago’s dramatic win to move into the Sweet 16, while only one game, will end up being worth close to $3.4m. But it doesn’t all go to Loyola-Chicago…

It goes to their conference

The units earned (and the money made) are distributed evenly among each team in their conference, whether they played in March or not.

In other words, the big schools who were upset will most likely make the most money because their conferences are more competitive.

The Atlantic Coast Conference (Virginia’s conference), for example, has 9 teams in the tournament this year, accrued a total 64 units between 2015 and 2017, and reported $373.4m in 2016 revenue.

Tue, 3/20

That’s one way to get a date: Tinder parent co. sues Bumble for copyright infringement

Tinder’s parent company, Match Group (which also owns dating sites and OkCupid), is suing rival dating app Bumble

Match claims that Bumble ripped off their “swipe-to-connect” feature and alleges that some Tinder-turned-Bumble execs stole ideas for some of the app’s features, like the one that lets you “recall” someone you accidentally passed on.

“If I can’t have you, nobody can”

Recode speculates that Match’s lawsuit is not a takedown attempt, but rather a strategic move to strong-arm the company into accepting an acquisition deal.

Last summer, Bumble rejected a $450m buyout offer from Match Group. The company is apparently still interested — they’re just done playing nice.

Agreeing to a deal would be an easy way for Bumble and their parent company, Badoo, to put the whole thing to bed, provided they’re willing to put the past behind them.

Bumble and Match have some history

Bumble founder Whitney Wolfe Herd was also a co-founder of Tinder. Back in 2014, she filed her own lawsuit against the company for sexual harassment, and settled for close to $1m.

That said, with a 79% stake in the company, it’s Badoo who’ll have final say in Bumble’s fate at the end of the day, whether Wolfe is happy about it or not.

Tue, 3/20

Uber halts self-driving vehicle tests in all cities after the death of an Arizona woman 

A woman who was struck by a self-driving Uber car in Tempe, Arizona, on Sunday has succumbed to her injuries.

Reportedly, the Uber vehicle was in autonomous mode with a human safety driver at the helm and struck the woman around 10pm as she was walking on the street.

The incident marks the first pedestrian death attributed to an autonomous vehicle ever recorded — and it has caused Uber to temporarily suspend the testing of its self-driving cars in Tempe, Pittsburgh, San Francisco, and Toronto.

The Wild West

Since Arizona legalized ride sharing in 2015, the state has become a popular testing ground for companies in the autonomous driving race, thanks largely to the state’s “anything goes” attitude toward regulation.

But Arizona’s liberal policies on this tech have drawn criticism: Last year, Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said of the odd no-holds-barred philosophy: “It’s open season on other Arizona drivers and pedestrians.”

Yeah, maybe we pump the breaks, gang

While Tempe’s mayor defended the city’s support of autonomous vehicles on Twitter yesterday, many believe it’s important to acknowledge that the tech just isn’t quite there yet.

Researchers working on autonomous driving technology have understandably struggled with how to teach autonomous systems to correct for unpredictable human behavior.

Whether this incident was “unpredictable” remains unclear at the moment — but it’s likely to raise regulatory flags either way.

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