Benner on Tech: Living in the Future and Billion-Dollar Startups

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People Are Talking About …

Yesterday’s PostSeed conference featured a one-on-one interview with Naval Ravikant, the CEO and co-founder of AngelList.

Amid his observations about Uber (India will be the company’s second-largest market), venture firm brands (Google Ventures and Y Combinator are on the rise) and seed round valuations (they’re high, meh), Ravikant also said this of living in Silicon Valley: “We have such an unfair advantage living here. … You can see in the future and how the world will work. … We’re living in the future.”

Being able to first experience the true impact that technology will have on the way we live gives investors and entrepreneurs a huge advantage; he argued that we might even be underestimating the impact that startups will have on the world that we’ll all soon inhabit.

I see his point, but I'd also argue that “living in the future” doesn’t always serve tech well. History has shown that the ideas that got wiped out after the last big boom and bust -- delivery and other services on demand, a need to wrap the whole world in fiber-optic cable -- weren’t necessarily wrong. They were just way too early to work anywhere but a place like Silicon Valley, where people, arguably, adapt to and build on top of new tech innovations must faster than people in other parts of the world.

Best cocktail conversation observation made by a strategy and corporate development executive at PostSeed ...

“When I see companies hire an investment bank to make introductions or do anything other than an IPO, I wonder what they’re trying accomplish. Do they want the whole world to think they’re for sale? That they’re in trouble? This is tech. We don’t need bankers to get our deals done.”


The government doesn't get it ...

Zenefits gives away a free version of its human-resources software, which helps companies manage things such as benefits and payroll; it makes money when it manages insurance needs for those companies and acts as an insurance broker. TechCrunch reports that the Utah Insurance Department thinks the model is “unfair to traditional insurance brokers” and has asked Zenefits to essentially charge more money for its services. Cue Marc Andreessen’s tweetstorm.

Uber security weaknesses ...

The Washington Post wonders whether stealing Uber rider data might be “a hacking opportunity of remarkable awesomeness.” It doesn’t seem like such a tough job given that Uber seems pretty lax about who has access to what. The newspaper points out much later in the story (burying the lead):

A person who had a job interview in Uber’s Washington office in 2013 said he got the kind of access enjoyed by actual employees for an entire day, even for several hours after the job interview ended. He happily crawled through the database looking up the records of people he knew -- including a family member of a prominent politician -- before the seemingly magical power disappeared.

In other Uber chatter, I looked at how high-profile problems at Facebook and Uber -- along with Goldman Sachs money and huge valuations -- showed the world just how powerful those startups got in their march toward an initial public offering.

And my colleague Matt Levine examines Goldman’s plan to “help Uber raise money from rich people." It’s the only story about private placements that will make you laugh.

Don't forget about Lyft ...

Senator Al Franken finally noticed that Lyft exists, and he asked the company for information about how it handles sensitive user data.

More money ...

Misfit has raised $40 million and gained a strategic partner, Chinese mobile-device maker Xiaomi. The deal should help the fitness-device maker expand in China.

Payments company Stripe climbs the ranks of the billion-dollar startup club with a new round of fundraising that gives it a $3.5 billion valuation.

People and Personnel Moves

Zillow fired sales manager Gabe Schmidt, who is the defendant in a sexual harassment lawsuit brought by a former employee who alleges that the company’s culture was like an “adult frat house” that fostered sexual harassment. Schmidt is also accused of being an unsolicited sexter. Geek Wire has all the details.

BuzzFeed Chief Revenue Officer Andy Wiedlin, who helped build the company’s $100 million revenue stream, is leaving at the end of the year. Re/code has the company memo announcing the move.


Apple …

The iPhone maker is preparing to appeal the e-books price-fixing case that it lost in July 2013; Fortune magazine’s Roger Parloff talked to Eddy Cue (who acted as Apple's point man in many of the negotiations with publishers) and wrote up a great analysis of the case.

Back in June 2013, Los Angeles school district officials approved a contract to supply iPads, with a curriculum created by Pearson, to every student and teacher in the district. Now the FBI is investigating that program, and a federal grand jury has subpoenaed requested documents related to the bidding process, as well as papers related to other projects. Former L.A. schools Superintendent John Deasy reportedly had close ties with Apple and he resigned this fall.

Apple bears hit the jackpot.

Amazon …

Jeff Bezos was the highlight of yesterday’s Business Insider Ignition Conference. In a wide-ranging interview, he discussed why he bought the Washington Post and defended his company’s Fire phone, which is widely considered a failure. On his role at the company, he said: "I am the counterbalance to the institutional no that can say yes."

Twitter …

The company beefed up its harassment reporting tools.

Google …

The search company wants more high-end brand advertisers.

Cybercrime Never Sleeps 

Buzzfeed’s Tom Gara and Charlie Warzel give us the most complete account yet of the Sony hack:

The roughly 40 gigabytes of company information now available online sat on company servers without encryption, with a vast majority of the sensitive personal and financial files containing no password protection. Currently, the stolen data trove is available to download, potentially placing the information in the hands of any hacker, scammer, criminal, media organization, or curious citizen who knows their way around a torrent file.

Sony Pictures employees now face the grim prospect of extremely personal information bouncing around the internet forever. The documents lifted from company servers include email exchanges with employees regarding specific medical treatments they are undergoing, while one disciplinary letter details a manager’s romantic relationship and business travel history with a subordinate. None of the names on any of the files is redacted.

The New York Times’ Nicole Perlroth lays out the current state of play for companies doing battle with cybercriminals. 

News and Notes

Read this great Ashlee Vance story in Bloomberg Businessweek about how Facebook has changed the data center.

Firefox could be coming to iOS.

Cyber Monday sales hit a record $2.04 billion.

The PlayStation is 20 years old.

A scientific conference you might want to attend.

Noe Iniguez was convicted under California’s fairly new revenge porn law that makes it illegal to post sexual images of another person with the intent to cause emotional harm. 

Today’s Thing You Should Read

Reddit’s AMA with the director of the Ferguson, Missouri, public library.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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Brooke Sample at