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Or, in this case, are objects further than they appear? Not sure how to make the metaphor work best.
The Hustle Mon, Dec 5

Private tech deals can be misleading

Back in August, Uber paid $680m to acquire Otto, a self-driving truck startup. Pretty insane payday for a company that had launched just 3 months prior to the sale. 3 months, man!

But, thanks to some nice detective work from The Information, we’ve learned that the $680m price tag isn’t quite as it appears (paywall, sorry).

So they lied about the acquisition price?

No, nobody lied. It’s just that, unlike most tech M&A deals, Uber acquired Otto shares without paying any money upfront.

Instead, they struck an incentive-based agreement that looks something like this:

Otto’s shareholders (they had no VCs, so just co-founders and employees) get up to 1% of Uber’s equity over time, depending on milestones like how many self-driving Ubers hit the road.

In other words, the more (or less) Otto’s team accomplishes under Uber’s umbrella, the more (or less) Uber has to pay them.

Why would Otto agree to this?

For one, its founders, Anthony Levandowski (launched Google’s self-driving car project) and Lior Ron (led the Google Maps team), self-funded Otto, so there were no VCs to feed.

Second, Otto was always more interested in commercializing self-driving technology at a big company like Uber, rather than trying to do it all on their own, so this was arguably the best case scenario.

And third, if Levandowski is confident that his team’s contributions will make Uber a more valuable company down the line, then an equity-based deal is a big bet worth making.

A couple takeaways

Takeway #1: As this story proves, acquisition prices in the private tech world can be misleading.

The $680m number reported? That’s just fifth-grade math based on Uber’s $68B valuation at the time of the merger.

Takeaway #2: Uber isn’t stupid. They know that self-driving car tech is moving fast and constantly improving.

So, like so many deals nowadays, this was much more about acquiring talent (Levandowski, the savvy vet who used to work for a competitor) than the actual technology.

After all, what he and his team develop tomorrow is worth far more than Otto’s technology today. And if the dude delivers… well then everybody wins.


Need a new feature? Just copy Snapchat

Facebook is working on a new feature called Collections that will showcase content from publishers directly into your News Feed.

It’s essentially the same thing as Snapchat’s Discover section, which gives exposure to handpicked media partners who are more than willing to pay for your eyeballs.

Is this Facebook’s response to its “fake news” problem?

Though Zuckerberg has yet to admit it, the spread of bogus news on Facebook is very real.

Heck, a recent Buzzfeed report shows that the top 20 fake news stories outperformed the top 20 real ones during the last few months of the 2016 presidential campaign. That’s absurd.

Collections would help Facebook counter this issue by highlighting quality news, as opposed to trusting humans with curating the world wide web, themselves.

It’d also be yet another media company-esque move by a company whose CEO continually denies that they are one. Yeah, okay.

Gotta chill with the copying, guys

Between this and Instagram Stories, Facebook has now taken 2 of Snapchat’s most well-known features and straight up replicated them.

What’s next, Facebook-ectacles? Jeez guys, come up with an original idea one time. Please.

Then again, what do we expect? 13 years after its official launch, Facebook is no longer a risk-taking tech company, it’s a reliable platform. They don’t really innovate, they just buy the companies that do.

And so, when Zuck and friends see something that’s working elsewhere, they can copy it, put their own spin on it, and — thanks to our tendency to be like, “Wow, they copied Snapchat! So lame!” and then not care at all a month later — typically win out in the end.


Venezuela’s arch nemesis…

Works at a Home Depot in rural Alabama. Wait what?

When he isn’t restocking drill bits, Gustavo Diaz is scheming on one thing: sabotage. Because if there’s anything the 60-year-old ex-army officer knows better than how to drywall a basement, it’s how to dismantle a totalitarian regime.

More saving. More doing. That’s the power of Gustavo Diaz.

Once part of a coup to overthrow Hugo Chavez, Gus now leads the resistance from his website, DolarToday, which helps people get the most bang for their bolivar (Venezuela’s currency).

How? By calculating rates based on real street prices that Venezuelan consumers are paying for food, cars, etc.

In other words…

People trust him more than the government’s “official” exchange rate, which is often inflated compared to what Venezuelans are actually getting from unofficial exchange posts (aka. the black market).

This, in turn, has a measurable impact on global exchange rates for the bolivar — and not in a good way.

Shocker: President Nicolas Maduro is none too pleased

The Venezuelan government, which has controlled the bolivar’s official value since 2003, recently declared Diaz’s actions “economic warfare.”

Maduro has also accused him of working with “The Empire” (aka. The US) to decrease the value of his home country’s currency.

But, according to Diaz, DolarToday’s mission is less about the bolivar and more about government censorship, which is why he also shares news headlines that state-controlled sites won’t.

His mission, in his own words, is “to provide information to the people… to keep fighting for the liberties and democracy and freedom of speech.”

Gustavo, if you’re reading this, keep doin’ you. Also we’re in the market for a new buzzsaw…


Sweet, sweet science

Nestle just announced a new scientific breakthrough that will allow them to cut sugar in their chocolate by 40% starting in 2018. We know what you’re thinking: Is nothing sacred???

But, before you start hoarding your Crunch bars… Nestle promises that their new chocolate formula will have the same great taste as the original.

So you’re saying I can eat twice as much chocolate…

That’s what Nestle’s hoping. Their Kit-Kat think tank claims it can now change the structure of sugar so it dissolves twice as quickly, tricking your tongue into tasting extra sweetness.

That’s all well and good, but we can’t imagine Nestle has much of a vested interest in making us healthier, so…

What’s in it for Nestle?

Aside from the potential for people to consume twice as much slightly-better-for-you chocolate, increasing pressure from the government is forcing junk food companies like Nestle to step up their game.

As more U.S. cities begin to pass sugar taxes and other health incentive programs, there’s a clear monetary advantage for companies to “slim down” their candy offerings.

Plus, Nestle’s looking to patent their super sugar, which would give them a significant edge over competitors.

monday morning review

Introducing the comment section

Last week, we made a minor change to the email template that you may or may not have noticed.

Remember the share buttons at the bottom of each post that let you share to Twitter, LinkedIn (at one point), and Facebook? They’re gone.

And in their place…

Is a single link that takes you to the web version of each post, where we will be holding a discussion in the comments section all day long.

Please join us! We want to hear your opinions, your criticisms, and every “hot take” you can muster. Remember: The worst conversations are the ones where everyone agrees.

So wait, what about sharing?

You can still do that from the web page! Whether you’re on desktop or mobile, all the sharing options you need will be on the bottom of each page.

If you have any questions and/or suggestions, as always, feel free to reply to this email. We’re here for ya.

Okay, time for one piece of reader feedback:

“Not sure if this is the right channel to provide feedback but I LOVE the new “things you should” section. Simple, easy, informative. Love it.” – Scott

Definitely the right channel! And thank you! Glad to hear, Scotty.

As for the rest of you, any feedback on our newest section? Or any of our daily sections, for that matter? Always looking to improve.

– Kendall, Sr. Director of Comments

This edition of The Hustle was brought to you by
Kendall "Look good, feel good" Baker
Lindsey Quinn
John Havel
Euripedes Upmann
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