Minds, the blockchain-based social network, grabs a $6M Series A

Minds, a decentralized social network, has raised $6 million in Series A funding from Medici Ventures, Overstock.com’s venture arm. Overstock CEO Patrick Byrne will join the Minds Board of Directors. What is a decentralized social network? The creators, who originally crowdfunded their product, see it as an anti-surveillance, anti-censorship, and anti-“big tech” platform that ensures […]

Minds, a decentralized social network, has raised $6 million in Series A funding from Medici Ventures, Overstock.com’s venture arm. Overstock CEO Patrick Byrne will join the Minds Board of Directors.

What is a decentralized social network? The creators, who originally crowdfunded their product, see it as an anti-surveillance, anti-censorship, and anti-“big tech” platform that ensures that no one party controls your online presence. And Minds is already seeing solid movement.

“In June 2018, Minds saw an enormous uptick in new Vietnamese of hundreds of thousands users as a direct response to new laws in the country implementing an invasive ‘cybersecurity’ law which included uninhibited access to user data on social networks like Facebook and Google (who are complying so far) and the ability to censor user content,” said Minds founder Bill Ottman.

“There has been increasing excitement in recent years over the power of blockchain technology to liberate individuals and organizations,” said Byrne. “Minds’ work employing blockchain technology as a social media application is the next great innovation toward the mainstream use of this world-changing technology.”

Interestingly, Minds is a model for the future of hybrid investing, a process of raising some cash via token and raising further cash via VC. This model ensures a level of independence from investors but also allows expertise and experience to presumably flow into the company.

Ottman, for his part, just wants to build something revolutionary.

“The rise of an open source, encrypted and decentralized social network is crucial to combat the big-tech monopolies that have abused and ignored users for years. With systemic data breaches, shadow-banning and censorship, people over the world are demanding a digital revolution. User-safety, fair economies, and global freedom of expression depend on it – we are all in this battle together,” said Ottman.

Sam’s Club to offer same-day grocery delivery via Instacart at over half its stores by month end

Fresh off its $600 million round of new funding, grocery delivery service Instacart is expanding its relationship with Walmart, the companies announced this morning. The two first joined up in February to offer same-day grocery delivery at select Sam’s Clubs locations in the U.S. Today, Walmart says it plans to offer Instacart-powered grocery delivery in over half […]

Fresh off its $600 million round of new funding, grocery delivery service Instacart is expanding its relationship with Walmart, the companies announced this morning. The two first joined up in February to offer same-day grocery delivery at select Sam’s Clubs locations in the U.S. Today, Walmart says it plans to offer Instacart-powered grocery delivery in over half of Sam’s Clubs stores by the end of this month.

That expansion will make Sam’s Club grocery delivery via Instacart available to nearly 1,000 new ZIP codes and more than 100 new stores, including those in markets like New Jersey, Indianapolis, Houston and others, the company says.

In total, customers will be able to order from nearly 350 clubs by the end of October.

The partnership was first piloted in Dallas-Fort Worth, Austin and St. Louis, then reached San Diego and L.A. in more recent weeks.

The deal also allows consumers to shop Sam’s Clubs stores without a membership, including shopping its sales. However, Sam’s Club members will receive lower, membership-only pricing, Walmart says.

Deliveries are offered in as little as an hour, and may include non-grocery items, the retailer also notes.

“To help the holidays run smooth, we’re offering a wide product assortment available on Instacart so shoppers can now get household goods delivered,” said Sachin Padwal, Sam’s Club’s Vice President of Product Management, in a statement. “We’re excited that last-minute gifts, small appliances, extra pillows and towels – just to name a few things – are just a few clicks and minutes away,” he added.

The partnership between Sam’s Club and Instacart is significant in terms of Walmart’s larger battle with Amazon, which offers grocery pickup and delivery through its Whole Foods division, as well as grocery delivery through AmazonFresh and Prime Now.

Sam’s Club parent Walmart also offers an affordable curbside pickup program for groceries – which, unlike with third-party services, sells items at the same price as they are in stores. In select markets, Walmart offers grocery delivery, too.

In Walmart’s recent fiscal year 2020 guidance, it said that it expects to offer grocery pickup at 3,100 Walmart stores by 2020, and delivery at 1,600 locations. Currently, Walmart’s grocery delivery is on track to reach 100 U.S. metros by year-end.

Same-day delivery for Sam’s Club isn’t the only change Walmart’s warehouse membership club has made in recent months. Also in February, the club began to offer free shipping on orders, with no minimum purchase, and simplified memberships to two tiers, Savings ($45/year) and Plus ($100/year). Both of those options are cheaper than Amazon Prime, now $119/year.

Sam’s Club shoppers can visit samsclub.com/Instacart to see if their local store is supported.

Amazon puts $10M in Closed Loop Fund to make recycling easier in more American cities

Amazon announced today that it has invested $10 million in Closed Loop Fund, which finances the creation of recycling infrastructure and services in U.S. cities. In a statement, the e-commerce behemoth claimed that its investment will keep one million tons of recyclable material out of landfills and “eliminate the equivalent of two million metric tons of […]

Amazon announced today that it has invested $10 million in Closed Loop Fund, which finances the creation of recycling infrastructure and services in U.S. cities. In a statement, the e-commerce behemoth claimed that its investment will keep one million tons of recyclable material out of landfills and “eliminate the equivalent of two million metric tons of CO2 by 2028, equivalent to shutting down a coal-fired power plant for six months.”

Founded in 2014, Closed Loop Fund invests in companies and organizations working on services, infrastructure, or technology that will make recycling accessible to more communities in the U.S. Only a few cities have made recycling mandatory and in many municipalities, trucking trash to the landfill is still much cheaper than offering curbside recycling. According to Amazon’s announcement, about half of Americans “lack access to convenient, sufficient curbside recycling at their homes.” Over the next 10 years, Closed Loop Fund wants to save more than 8 million tons of waste from landfills by making recycling easier for 18 million households.

In a statement, Closed Loop Fund CEO Ron Gonen said “Amazon’s investment in Closed Loop Fund is another example of how recycling is good business in America. Companies are seeing that they can meet consumer demand and reduce costs while supporting a more sustainable future and growing good jobs across the country. We applaud Amazon’s commitment to cut waste, and we hope their leadership drives other brands and retailers to follow suit.”

As the largest online retailer in the U.S. by far, Amazon packages produce a massive amount of cardboard and packaging waste every year. More than 5 billion items were shipped through Amazon Prime last year, while the company’s fulfillment and shipping network increased by more than 30% in square footage.

The burden placed on overwhelmed municipalities and waste collection services that need to dispose of packaging from Amazon and other e-commerce stores has been dubbed the “Amazon Effect” and blamed for contributing to the decline in the cardboard recycling rate. According to the American Forestry and Packaging Association, the recycling rate for cardboard fell to 88.8% in 2017 from 92.9% in 1999.

Amazon claims its Frustration-Free Packaging program, which offers brands incentives to use less wasteful packaging, has eliminated more than 244,000 tons of packaging materials and made it possible to avoid more than 500 million shipping boxes since launching 10 years ago. But with its rapid pace of growth—Amazon is expected to reach $258.22 billion in U.S. retail sales this year, accounting for 49.1 percent of all online retail spending in the country and 5 percent of all retail sales—there is still a lot of work to do if it really wants to stop contributing to packaging waste.

Amazon debuts a retail site for ‘Shark Tank’ products

Inventor Jamie Siminoff was rejected by the sharks on ABC’s “Shark Tank” in 2013 when trying to make a deal for his video doorbell startup. This year, Amazon bought his company, Ring, for a billion dollars. Now, Amazon is looking for another way to tap into breakout products from the popular TV show – by becoming […]

Inventor Jamie Siminoff was rejected by the sharks on ABC’s “Shark Tank” in 2013 when trying to make a deal for his video doorbell startup. This year, Amazon bought his company, Ring, for a billion dollars. Now, Amazon is looking for another way to tap into breakout products from the popular TV show – by becoming an official retailer partner for “Shark Tank.” The newly announced deal allows Amazon to showcase past and future “Shark Tank” products on its website, and come with a $15,000 Amazon Web Services (AWS) credit for each eligible “Shark Tank” entrepreneur.

The products will be available in a new Shark Tank Collection on Amazon Launchpad, its platform for hardware and physical goods startups, which first arrived in 2015. The idea is to offer a dedicated place on Amazon where consumers can shop products from up-and-coming companies, like Bluesmart’s luggage, eero’s Home Wi-Fi system, Casper mattresses, and hundreds more.

This new collection is not the first time Amazon has featured “Shark Tank” products on its site, however.

Also in 2015, Amazon launched a new online store called Amazon Exclusives, which featured a variety of new brands, including products from “Shark Tank,” like Tower Paddle Boards, for example.

At the time, the “Shark Tank” merchandise selection was limited, though.

With today’s launch, that’s changing.

Amazon says the new collection features over 70 products that successfully received funding from “Shark Tank” seasons 1 through 9, and new products from season 10 and beyond will be featured here in the future.

The products available today include things like smart changing pad and scale Hatch Baby, coffee enhancer Third Wave Water, and storage bags from Stasher, among others. You can even sort and filter products by those that were funded by two or more sharks, or those with over $250,000 in funding.

“For the first time ever, ‘Shark Tank’ has a store on Amazon.com dedicated to helping our entrepreneurs scale their businesses and highlight top products from the show,” said “Shark Tank” investor, Barbara Corcoran, in a statement. “We are excited for the Amazon Launchpad Shark Tank Collection to bring products from our entrepreneurs to retail for customers and fans of the series.”

For Amazon, the deal isn’t just a way to redirect “Shark Tank”-related shopping searches to its site, following an airing of the TV show. It also gives Amazon a first-hand way of seeing which products are becoming viable consumer hits – something that could open the door for an acquisition or further deal-making at some later point, perhaps.

Of course, that would require the TV sharks to not be quite so short-sighted – after all, they thought Ring was overvalued, and passed. (They’re not interested in companies that require too much capital, apparently.) In hindsight, it still seems like a miss on their parts. And with the start of Season 10, the sharks again passed on a product Amazon could like – Boxlock, a smart lock for securing packages left at your doorstep. After all, not everyone will want to let delivery drivers into their home.

“The Amazon Launchpad program is all about empowering creators and inventors, enabling them to reach hundreds of millions of customers,” said Jim Adkins, Vice President, Amazon. “By teaming up with ‘Shark Tank,’ we are making it fun and easy for fans of the show to discover a wide variety of unique innovations and cutting-edge products,” he said.

Shopify opens its first brick-and-mortar space in Los Angeles

Shopify, the provider of payment and logistics management software and services for retailers, has opened its first physical storefront in Los Angeles. The first brick and mortar location for the Toronto-based company, is nestled in a warren of downtown Los Angeles boutique shops in a complex known as the Row DTLA. For Shopify, Los Angeles […]

Shopify, the provider of payment and logistics management software and services for retailers, has opened its first physical storefront in Los Angeles.

The first brick and mortar location for the Toronto-based company, is nestled in a warren of downtown Los Angeles boutique shops in a complex known as the Row DTLA.

For Shopify, Los Angeles is the ideal place to debut a physical storefront showing off the company’s new line of hardware products and the array of services it provides to businesses ranging from newly opened startups to $900 million juggernauts like the Kylie Cosmetics brand.

The city is one of the most dense conglomerations of Shopify customers with over 10,000 merchants using the company’s technologies in the greater Los Angeles area. 400 of those retailers have each earned over $1 million in gross merchandise volume.

In the Los Angeles space, which looks similar to an Apple store, patrons can expect to see demonstrations and tutorials of how Shopify’s tools and features work. Showrooms displaying the work that Shopify does with some of its close partners will also show how business owners can turn their product visions into actual businesses.

Like Apple, Shopify is staffing its store with experts on the platform who can walk new customers or would-be customers through whatever troubleshooting they may need. While also serving as a space to promote large and small vendors using its payment and supply management solution.

“Our new space in downtown LA is a physical manifestation of our dedication and commitment to making commerce better for everyone. We’re thrilled to be able to take our proven educational, support, and community initiatives and put them to work in an always-on capacity,” said Satish Kanwar, VP of Product at Shopify, in a statement. “We know that making more resources available to entrepreneurs, especially early on, makes them far more likely to succeed, and we’re happy to now be offering that through a brick-and-mortar experience in LA.”

Kanwar and Shopify chief operating officer, Harley Finkelstein, envision the new Los Angeles space as another way to support new and emerging retailers looking for tips on how to build their business in the best possible way.

“The path to being your own boss doesn’t need to be lonely or isolating,” said Finkelstein, in a statement. “With Shopify LA we wanted to create a hub where business owners can find support, inspiration, and community. Most importantly, entrepreneurs at all stages and of all sizes can learn together, have first access to our newest products, and propel their entrepreneurial dreams.”

After its acquisition, Magento starts integrating Adobe’s personalization and analytics tools

It’s been less than six months since Adobe acquired commerce platform Magento for $1.68 billion and today, at Magento’s annual conference, the company announced the first set of integrations that bring the analytics and personalization features of Adobe’s Experience Cloud to Magento’s Commerce Cloud. In many ways, the acquisition of Magento helps Adobe close the […]

It’s been less than six months since Adobe acquired commerce platform Magento for $1.68 billion and today, at Magento’s annual conference, the company announced the first set of integrations that bring the analytics and personalization features of Adobe’s Experience Cloud to Magento’s Commerce Cloud.

In many ways, the acquisition of Magento helps Adobe close the loop in its marketing story by giving its customers a full spectrum of services that go from analytics, marketing and customer acquisition all the way to closing the transaction. It’s no surprise then that the Experience Cloud and Commerce Cloud are growing closer to, in Adobe’s words, “make every experience shoppable.”

“From the time that this company started to today, our focus has been pretty much exactly the same,” Adobe’s SVP of Strategic Marketing Aseem Chandra told me. “This is, how do we deliver better experiences across any channel in which our customers are interacting with a brand? If you think about the way that customers interact today, every experience is valuable and important. […] It’s no longer just about the product, it’s more about the experience that we deliver around that product that really counts.”

So with these new integrations, Magento Commerce Cloud users will get access to an integration with Adobe Target, for example, the company’s machine learning-based tool for personalizing shopping experiences. Similarly, they’ll get easy access to predictive analytics from Adobe Analytics to analyze their customers’ data and predict future churn and purchasing behavior, among other things.

These kinds of AI/ML capabilities were something Magento had long been thinking about, Magento’s former CEO and new Adobe SVP fo Commerce Mark Lavelle told me, but it took the acquisition by Adobe to really be able to push ahead with this. “Where the world’s going for Magento clients — and really for all of Adobe’s clients — is you can’t do this yourself,” he said. “you need to be associated with a platform that has not just technology and feature functionality, but actually has this living and breathing data environment that that learns and delivers intelligence back into the product so that your job is easier. That’s what Amazon and Google and all of the big companies that we’re all increasingly competing against or cooperating with have. They have that type of scale.” He also noted that at least part of this match-up of Adobe and Magento is to give their clients that kind of scale, even if they are small- or medium-sized merchants.

The other new Adobe-powered feature that’s now available is an integration with the Adobe Experience Manager. That’s Adobe’s content management tool that itself integrates many of these AI technologies for building personalized mobile and web content and shopping experiences.

“The goal here is really in unifying that profile, where we have a lot of behavioral information about our consumers,” said Aseem. “And what Magento allows us to do is bring in the transactional information and put those together so we get a much richer view of who the consumers are and how we personalize that experience with the next interaction that they have with a Magento-based commerce site.”

It’s worth noting that Magento is also launching a number of other new features to its Commerce Cloud that include a new drag-and-drop editing tool for site content, support for building Progressive Web Applications, a streamlined payment tool with improved risk management capabilities, as well as a new integration with the Amazon Sales Channel so Magento stores can sync their inventory with Amazon’s platform. Magneto is also announcing integrations with Google’s Merchant Center and Advertising Channels for Google Smart Shopping Campaigns.

Shopify rolls out fraud protection to U.S. merchants

Large e-commerce businesses have systems in place to fight online fraud, but smaller sellers with their own storefronts don’t always have the same advantages. Today, e-commerce platform Shopify is aiming to change that with its rollout of Fraud Protect for Shopify Payments. The service is initially available in the U.S. The company had announced its plans […]

Large e-commerce businesses have systems in place to fight online fraud, but smaller sellers with their own storefronts don’t always have the same advantages. Today, e-commerce platform Shopify is aiming to change that with its rollout of Fraud Protect for Shopify Payments. The service is initially available in the U.S.

The company had announced its plans to introduce fraud protection earlier this year at its Unite conference in Toronto, where it also debuted marketing app Shopify Ping and support for sellers managing inventory across multiple stores, among other things.

The company’s goal with anti-fraud systems is to protect online sellers against fraudulent chargebacks.

Shopify says its experience in processing millions of orders across its platform has allowed it to develop fraud detection technology that has the ability to accurately determine which orders are considered fraudulent. Its algorithms will now analyze incoming orders and decide if an order should be set as “protected.” If a fraudulent chargeback on a protected order then occurs, Shopify says it will automatically reimburse the merchant.

Before, merchants would have to manually review orders for fraud, which could be difficult – especially for smaller sellers who don’t know what to look for.

However, Shopify says the system isn’t just for the mom-and-pop merchants – it can aid bigger businesses, too, as it means lower operating costs.

Often, if merchants can’t handle fraud detection in-house, they’ll work with a partner who specializes in this technology. For example, Shopify competitor Bigcommerce integrates with Signifyd, an automated fraud detection service which merchants can opt to use.

In Shopify’s case, it’s offering the technology directly to its merchant partners – meaning it’s managing the risk itself, and eating the loss involved with fraudulent transactions, as needed. That could be a big selling point in its favor when merchants are looking for a home to set up their online storefront.

“We talk to merchants every day and one of the recurring themes we often encounter is the amount of time and effort they put into preventing fraud, and the anxiety and turmoil they put up with when dealing with a chargeback on an order they’ve already shipped,” said Andre Lyver, Head of Financial Solutions at Shopify, in  a statement. “With Fraud Protect, merchants will never have to think about fraud and chargebacks. They can fulfill all of their orders with peace of mind, knowing that Shopify has them covered if the order is fraudulent,” Lyver added.

The pricing for the service will vary, Shopify tells us, but will be a small percentage of the order amount that’s protected.

The company says it’s rolling out Fraud Protect to a select group of U.S. merchants to start, who will be notified via email as well as with a notification within Shopify. It plans to expand the service to more merchants in the near future.

ePrivacy: An overview of Europe’s other big privacy rule change

Gather round. The EU has a plan for a big update to privacy laws that could have a major impact on current Internet business models. Um, I thought Europe just got some new privacy rules? They did. You’re thinking of the General Data Protection Regulation (GDPR), which updated the European Union’s 1995 Data Protection Directive […]

Gather round. The EU has a plan for a big update to privacy laws that could have a major impact on current Internet business models.

Um, I thought Europe just got some new privacy rules?

They did. You’re thinking of the General Data Protection Regulation (GDPR), which updated the European Union’s 1995 Data Protection Directive — most notably by making the penalties for compliance violations much larger.

But there’s another piece of the puzzle — intended to ‘complete’ GDPR but which is still in train.

Or, well, sitting in the sidings being mobbed by lobbyists, as seems to currently be the case.

It’s called the ePrivacy Regulation.

ePrivacy Regulation, eh? So I guess that means there’s already an ePrivacy Directive then…

Indeed. Clever cookie. That’s the 2002 ePrivacy Directive to be precise, which was amended in 2009 (but is still just a directive).

Remind me what’s the difference between an EU Directive and a Regulation again… 

A regulation is a more powerful legislative instrument for EU lawmakers as it’s binding across all Member States and immediately comes into legal force on a set date, without needing to be transposed into national laws. In a word it’s self-executing.

Whereas, with a directive, Member States get a bit more flexibility because it’s up to them how they implement the substance of the thing. They could adapt an existing law or create a new one, for example.

With a regulation the deliberation happens among EU institutions and, once that discussion and negotiation process has concluded, the agreed text becomes law across the bloc — at the set time, and without necessarily requiring further steps from Member States.

So regulations are powerful.

So there’s more legal consistency with a regulation? 

In theory. Greater harmonization of data protection rules is certainly an impetus for updating the EU’s legal framework around privacy.

Although, in the case of GDPR, Member States did in fact need to update their national data protections laws to make certain choices allowed for in the framework, and identify competent national data enforcement agencies. So there’s still some variation.

Strengthening the rules around privacy and making enforcement more effective are other general aims for the ePrivacy Regulation.

Europe has had robust privacy rules for many years but enforcement has been lacking.

Another point of note: Where data protection law is concerned, national agencies need to be properly resourced to be able to enforce rules, or that could undermine the impact of regulation.

It’s up to Member States to do this, though GDPR essentially requires it (and the Commission is watching).

Europe’s data protection supervisor, Giovanni Buttarelli, sums up the current resourcing situation for national data protection agencies, as: “Not bad, not enough. But much better than before.”

But why does Europe need another digital privacy law. Why isn’t GDPR enough? 

There is some debate about that, and not everyone agrees with the current approach. But the general idea is that GDPR deals with general (personal) data.

Whereas the proposed update to ePrivacy rules is intended to supplement GDPR — addressing in detail the confidentiality of electronic communications, and the tracking of Internet users more broadly.

So the (draft) ePrivacy Regulation covers marketing, and a whole raft of tracking technologies (including but not just cookies); and is intended to combat problems like spam, as well as respond to rampant profiling and behavioral advertising by requiring transparency and affirmative consent.

One major impulse behind the reform of the rules is to expand the scope to not just cover telcos but reflect how many communications now travel ‘over the top’ of cellular networks, via Internet services.

This means ePrivacy could apply to all sorts of tech firms in future, be it Skype, Facebook, Google, and quite possibly plenty more — given how many apps and services include some ability for users to communicate with each other.

But scope remains one of the contested areas, with critics arguing the regulation could have a disproportionate impact, if — for example — every app with a chat function is going to be ruled.

On the communications front, the updated rules would not just cover message content but metadata too (to respond to how that gets tracked). Aka pieces of data that might not be personal data per se yet certainly pertain to privacy once they are wrapped up in and/or associated with people’s communications.

Although metadata tracking is also used for analytics, for wider business purposes than just profiling users, so you can see the challenge of trying to fashion rules to fit around all this granular background activity.

Simplifying problematic existing EU cookie consent rules — which have also been widely mocked for generating pretty pointless web page clutter — has also been a core part of the Commission’s intention for the update.

EU lawmakers also want the regulation to cover machine to machine comms — to regulate privacy around the still emergent IoT (Internet of Things), to keep pace with the rise of smart home technologies.

Those are some of the high level aims but there have been multiple proposed texts and revisions at this point so goalposts have been shifting around.

So whereabouts in the process are we?

The Commission’s original reform proposal came out in January 2017. More than a year and a half later EU institutions are still stuck trying to reach a consensus. It’s not even 100% certain whether ePrivacy will pass or founder in the attempt at this point.

The underlying problem is really the scope of exploitation of consumers’ online activity going on in the areas ePrivacy seeks to regulate — which is now firmly baked into dominant digital business models — so trying to rule over all that after the fact of mainstream operational execution is a recipe for co-ordinated industry objection and frenzied lobbying. Of which there has been an awful lot.

At the same time, consumer protection groups in Europe are more clear than ever that ePrivacy should be a vehicle for further strengthening the data protection framework put in place by GDPR — pointing out, for example, that data misuse scandals like the Facebook-Cambridge Analytica debacle show that data-driven business models need closer checks to protect consumers and ensure people’s rights are respected.

Safe to say, the two sides couldn’t be further apart.

Like GDPR, the proposed ePrivacy Regulation would also apply to companies offering services in Europe not only those based in Europe. And it also includes major penalties for violations (of up to 2% or 4% of a company’s global annual turnover) — similarly intended to bolster enforcement and support more consistently applied EU privacy rules.

But given the complexity of the proposals, and disagreements over scope and approach, having big fines baked in further complicates the negotiations — because lobbyists can argue that substantial financial penalties should not be attached to ‘ambiguous’ laws and disputed regulatory mechanisms.

The high cost of getting the update wrong is not so much concentrating minds as causing alarms to be yanked and brakes applied. With the risk of no progress at all looking like an increasing possibility.

One thing is clear: The existing ePrivacy rules are outdated and it’s not helpful to have old rules undermining a state-of-the-art data protection framework.

Telcos have also rightly complained it’s not fair for tech giants to be able to operate messaging empires without the same compliance burdens they have.

Just don’t assume telcos love the proposed update either. It’s complicated.

Sounds very messy. 

Indeed.

EU lawmakers could probably have dealt with updating both privacy-related directives together, or even in one ‘super regulation’, but they decided to separate the work to try to simplify the process. In retrospect that looks like a mistake.

On the plus side, it means GDPR is now locked in place — with Buttarelli saying the new framework is intended to stand for as long as its predecessor.

Less good: One shiny worldclass data protection framework is having to work alongside a set of rules long past their sell-by-date.

So, so much for consistency.

Buttarelli tells us he thinks it was a mistake not to do both updates together, describing the blocks being thrown up to try to derail ePrivacy reform as “unacceptable”.

“I would like to say very clearly that the EU made a mistake in not updating earlier the rules for confidentiality for electronic communications at the same time as general data protection,” he told us during an interview this week, about GDPR enforcement, datas ethics and the future of EU privacy regulation.

He argues the patchwork of new and old rules “doesn’t work for data controllers” either, as they’re the ones saddled with dealing with the legal inconsistency.

As Europe’s data protection supervisor, Buttarelli is of course trying to apply pressure on key parties — to “get to the table and start immediately trilogue negotiations to identify a sustainable outcome”.

But the nature of lawmaking across a bloc of 28 Member States is often slow and painful. Certainly no one entity can force progress; it must be achieved via negotiated consensus and compromise across the various institutions and entities.

And when interest groups are so far apart, well, it’s sweating toil to put it mildly.

Entities that don’t want to play ball with a particular legal reform issue can sometimes also throw a delaying spanner in the works by impeding negotiations. Which is what looks to be going on with ePrivacy right now.

The EU parliament confirmed its negotiating mandate on the reform almost a year ago now. But MEPs were then stuck waiting for Member States to take a position and get around the discussion table.

Except Member States seemingly weren’t so keen. Some were probably a bit preoccupied with Brexit.

Currently implicated as an ePrivacy blocker: Austria, which holds the six-month rotating presidency of the EU Council — meaning it gets to set priorities, and can thus kick issues into the long grass (as its right-wing government appears to be doing with ePrivacy). And so the wait goes on.

It now looks like a bit of a divide and conquer situation for anti-privacy lobbyists, who — having failed to derail GDPR — are throwing all their energies at blocking and even derailing/diluting the ePrivacy reform.

Some Member States appear to be trying to attack ePrivacy to weaken the overarching framework of GDPR too. So yes, it’s got very messy indeed.

There’s an added complication around timing because the EU parliament is up for re-election next Spring, and a few months after that the executive Commission will itself turn over, as the current president does not intend to seek reappointment. So it will be all change for the EU, politically speaking, in 2019.

A reconfigured political landscape could then change the entire conversation around ePrivacy. So the current delay could prove fatal unless agreement can be reached in early 2019.

Some EU lawmakers had hoped the reform could be done and dusted in in time to come into force at the same time as GDPR, this May.

That was certainly a major miscalculation.

But what’s all the disagreement about?

That depends on who you ask. There are many contested issues, depending on the interests of the group you’re talking to.

Media and publishing industry associations are terrified about what they say ePrivacy could do to their ad-supported business models, given their reliance on cookies and tracking technologies to try to monetize free content via targeted ads — and so claim it could destroy journalism as we know it if consumers need to opt-in to being tracked.

The ad industry is also of course screaming about ePrivacy as if its hair’s on fire. Big tech included, though it has generally preferred to lobby via proxies on this issue.

Anything that could impede adtech’s ability to track and thus behaviourally target ads at web users is clearly enemy number one, given the current modus operandi. So ePrivacy is a major lobbying target for the likes of the IAB who don’t want it to upend their existing business models.

Even telcos aren’t happy, despite the potential of the regulation to even the playing field somewhat with tech giants — suggesting they will end up with double the regulatory burden, as well as moaning it will make it harder for them to make the necessary investments to roll out 5G networks.

Plus, as I say, there also seems to be some efforts to try to use ePrivacy as a vector to attack and weaken GDPR itself.

Buttarelli had comments to make on this front too, describing some data controllers as being in post-GDPR “revenge mode”.

“They want to move in sort of a vendetta, vendetta — and get back what they lose with the GDPR. But while I respect honest lobbying about which pieces of ePrivacy are not necessary I think ePrivacy will help first small businesses, and not necessarily the big tech startups. And where done properly ePrivacy may give more power to individuals. It may make harder for big tech to snoop on private conversations without meaningful consent,” he told us, appealing to Europe’s publishing industry to get behind the reform process, rather than applying pressure at the Member State level to try to derail it — given the media hardly feels well done by by big tech.

He even makes this appeal to local adtech players — which aren’t exactly enamoured with the dominance of big tech either.

“I see space for market incentives,” he added. “For advertisers and publishers to, let’s say, re-establish direct relations with their readers and customers. And not have to accept the terms dictated by the major platform intermediaries. So I don’t see any other argument to discourage that we have a deal before the elections in May next year of the European legislators.”

There’s no doubt this is a challenging sell though, given how embedded all these players are with the big platforms. So it remains to be seen whether ePrivacy can be talked back on track.

Major progress is certainly very unlikely before 2019.

I’m still not sure why it’s so important though.  

The privacy of personal communications is a fundamental right in Europe. So there’s a need for the legal framework to defend against technological erosion of citizens’ rights.

Add to that, a big part of the problem with the modern adtech industry — aside from the core lack of genuine consent — is its opacity. Who’s doing what; for what specific purposes; and with what exact outcomes.

Existing European privacy rules like GDPR mean there’s more transparency than there’s ever been about what’s going on — if you know and/or can be bothered to dig down into privacy policies and purposes.

If you do, you might, for example, discover a very long list of companies that your data is being shared with (and even be able to switch off that sharing) — entities with weird sounding names like Outbrain and OpenX.

A privacy policy might even state a per company purpose like ‘Advertising exchange’ and ‘Advertising’. Or ‘Customer interaction’, whatever that means.

Thing is, it’s often still very difficult for a consumer to understand what a lot of these companies are really doing with their data.

Thanks to current EU laws, we now have the greatest level of transparency there has ever been about the mechanisms underpinning Internet business models. But yet so much remains murky.

The average Internet user is very likely none the wiser. Can profiling them without proper consent really be fair?

GDPR sets out an expectation of privacy by design and default. So, following that principle, you could argue that cookie consent, for example, should be default opt-out — and that any website must be required to gain affirmative opt in from a visitor for any tracking cookies. The adtech industry would certainly disagree though.

The original ePrivacy proposal even had a bit of a mixed approach to consent which was accused of being too overbearing for some technologies and not strong enough for others.

It’s not just creepy tech giants implicated here either. Publishers and the media (TechCrunch included) are very much caught up in the unpleasant tracking mess, complicit in darting users with cookies and trackers to try to increase what remain fantastically low conversation rates for digital ads.

Most of the time, most Internet users ignore most ads. So — with horribly wonky logic — the behavioral advertising industry, which has been able to grow like a weed because EU privacy rights have not previously been actively enforced, has made it its mission to suck up (and indeed buy up) more and more user data to try to move the ad conversion needle a fraction.

The media is especially desperate because the web has also decimated traditional business models. And European lawmakers can be very sensitive to publishing industry concerns (for e.g., see their backing of controversial copyright reforms which publishers have been pushing for).

Meanwhile Google and Facebook are gobbling up the majority of online ad spending, leaving publishers fighting for crumbs and stuck having to do businesses with the platforms that have so sorely disrupted them.

Platforms they can’t at all control but which are now so popular and powerful they can (and do) algorithmically control the visibility of publishers’ content.

It’s not a happy combination. Well, unless you’re Facebook or Google.

Meanwhile, for web users just wanting to go about their business and do all the stuff people can (and sometimes need to do) online, things have got very bad indeed.

Unless you ignore the fact you’re being creeped on almost all the time, by snoopy entities that double as intelligence traders, selling info on what you like or don’t, so that an unseen adtech collective can create highly detailed profiles of you to try and manipulate your online transactions and purchasing decisions. With what can sometimes be discriminatory impacts.

The rise in popularity of ad blockers illustrates quite how little consumers enjoy being ad-stalked around the Internet.

More recently tracker blockers have been springing up to try to beat back the adtech vampire octopus which also lards the average webpage with myriad data-sucking tentacles, impeding page load times and gobbling bandwidth in the process, in addition to abusing people’s privacy.

There’s also out-and-out malicious stuff to be found already here too as the increasing complexity, opacity and sprawl of the adtech industry’s surveillance apparatus (combined with its general lack of interest in and/or focus on security) offers rich and varied vectors of cyber attack.

And so ads and gnarly page elements sometimes come bundled or injected with actual malware as hackers exploit all this stuff for their own ends and launch man in the middle attacks to grab user data as it’s being routinely siphoned off for tracking purposes.

It’s truly a layer cake of suck.

Ouch. 

The ePrivacy Regulation could, in theory, help to change this, by helping to support alternative business models that don’t use people-tracking as their fuel by putting the emphasis back where it should be: Respect for privacy.

The (seemingly) radical idea underlying all these updates to European privacy legislation is that if you increase consumers’ trust in online services by respecting people’s privacy you can actually grease the wheel of ecommerce and innovation because web users will be more comfortable doing stuff online because they won’t feel like they’re under creepy surveillance.

More than that — you can lay down a solid foundation of trust for the next generation of disruptive technologies to build on.

Technologies like IoT and driverless cars.

Because, well, if consumers hate to feel like websites are spying on them, imagine how disgusted they’ll be to realize their fridge, toaster, kettle and TV are all complicit in snitching. Ditto their connected car.

‘I see you’re driving past McDonald’s. Great news! They have a special on those chocolate donuts you scoffed a whole box of last week…’

Ugh. 

Yeah…

So what are ePrivacy’s chances at this point? 

It’s hard to say but things aren’t looking great right now.

Buttarelli describes himself as “relatively optimistic” about getting an agreement by May, i.e. before the EU parliament elections, but that may well be wishful thinking.

Even if he’s right there would likely still need to be an implementation period before it comes into force — so new rules aren’t likely up and running before 2020.

Yet he also describes the ePrivacy Regulation as “an essential missing piece of the jigsaw”.

Getting that piece in place is not going to be easy though.

The next big restaurant chain may not own any kitchens

If investors at some of the biggest technology companies are right, the next big restaurant chain could have no kitchens of its own. These venture capitalists think the same forces that have transformed transportation, media, retail and logistics will also work their way through prepared food businesses. The Battle Is For The Customer Interface Investors […]

If investors at some of the biggest technology companies are right, the next big restaurant chain could have no kitchens of its own.

These venture capitalists think the same forces that have transformed transportation, media, retail and logistics will also work their way through prepared food businesses.

Investors are pouring millions into the creation of a network of shared kitchens, storage facilities, and pickup counters that established chains and new food entrepreneurs can access to cut down on overhead and quickly spin up new concepts in fast food and casual dining.

Powering all of this is a food delivery market that could grow from $35 billion to a $365 billion industry by 2030, according to a report from UBS’s research group, the “Evidence Lab”.

“We’ve had conversations with the biggest and fastest growing restaurant brands in the country and even some of the casual brands,” said Jim Collins, a serial entrepreneur, restauranteur, and the chief executive of the food-service startup, Kitchen United. “In every board room for every major restaurant brand in the country… the number one conversation surrounds the topic of how are we going to address [off-premise diners].”

Collins’ company just raised $10 million in a funding round led by GV, the investment arm of Google parent company, Alphabet. But Alphabet’s investment team is far from the only group investing in the restaurant infrastructure as a service business.

Perhaps the best capitalized company focusing on distributed kitchens is CloudKitchens, one of two subsidiaries owned by the holding company City Storage Solutions.

Cloud Kitchens and its sister company Cloud Retail are the two arms of the new venture from Uber co-founder and former chief executive, Travis Kalanick, which was formed with a $150 million investment.

As we reported at the time, Travis announced that he would be starting a new fund with the riches he made from Uber shares sold in its most recent major secondary round. Kalanick said his 10100, or “ten one hundred”, fund would be geared toward “large-scale job creation,” with investments in real estate, e-commerce, and “emerging innovation in India and China.”

If anyone is aware of the massive market potential for leveraging on-demand services, it’s Kalanick. Especially since he was one of the architects of the infrastructure that has made it possible.

Other deep pocketed companies have also stepped into the fray. Late last year Acre Venture Partners, the investment arm formed by The Campbell Soup Co., participated in a $13 million investment for Pilotworks, another distributed kitchen operator based in Brooklyn.

Meanwhile, Kitchen United has been busy putting together a deep bench of executive talent culled from some of the largest and most successful American fast food restaurant chains.

Former Taco Bell Chief Development Officer, Meredith Sandland, joined the company earlier this year as its chief operating officer, while former McDonald’s executive Atul Sood, who oversaw the burger giant’s relationship with online delivery services, has come aboard as Kitchen United’s Chief Business Officer.

The millions of dollars spicing up this new business model investors are serving up could be considered the second iteration of a food startup wave.

An earlier generation of prepared food startups crashed and burned while trying to spin up just this type of vision with investments in their own infrastructure. New York celebrity chef David Chang, the owner and creator of the city’s famous Momofuku restaurants (and Milk Bar, and Ma Peche), was an investor in Maple, a new delivery-only food startup that raised $25 million before it was shut down and its technology was absorbed into the European, delivery service, Deliveroo.

Ando, which Chang founded, was another attempt at creating a business with a single storefront for takeout and a massive reliance on delivery services to do the heavy lifting of entering new neighborhoods and markets. That company wound up getting acquired by UberEats after raising $7 million in venture funding.

Those losses are slight compared to the woes of investors in companies like Munchery, ($125.4 million) Sprig, ($56.7 million) and SpoonRocket ($13 million). Sprig and Spoonrocket are now defunct, and Munchery had to pull back from markets in Los Angeles, New York, and Seattle as it fights for survival. The company also reportedly was looking at recapitalizing earlier in the year at a greatly reduced valuation.

What gives companies like Kitchen United, Pilotworks and Cloud Kitchens hope is that they’re not required to actually create the next big successful concept in fast food or casual dining. They just have to enable it.

Kitchen United just opened a 12,000 square foot facility in Pasadena for just that purpose — and has plans to open more locations in West Los Angeles; Jersey City, N.J.; Atlanta; Columbus, Ohio; Phoenix; Seattle and Denver. Its competitor, Pilotworks, already has operations in Brooklyn, Chicago, Dallas, and Providence, R.I.

While the two companies have similar visions, they’re currently pursuing different initial customers. Pilotworks has pitched itself as a recipe for success for new food entrepreneurs. Kitchen United, by comparison is giving successful local, regional, and national brands a way to expand their footprint without investing in real estate.

“One of the directions that the company was thinking of going was toward the restaurant industry and the second was in the food service entrepreneurial sector,” said Collins. “Would it be a company that served restaurants with their expansions? Now, we’re in deep discussions with all kinds of restaurants.”

Smaller national fast food chains like Chick-Fil-A or Shake Shack, or fast casual chains like Dennys and Shoney’s could be customers, said Collins. So could local companies that are trying to expand their regional footprint. Los Angeles’ famous Canter’s Deli is a Kitchen United customer (and an early adopter of a number of new restaurant innovations) and so is The Lost Cuban Kitchen, an Iowa-based Cuban restaurant that’s expanding to Los Angeles.

Kitchen United is looking to create kitchen centers that can house between 10-20 restaurants in converted warehouses, big box retail and light industrial locations.

Using demographic data and “demand mapping” for specific cuisines, Kitchen United said that it can provide optimal locations and site the right restaurant to meet consumer demand. The company is also pitching labor management, menu management and delivery tools to help streamline the process of getting a new location up and running.

“In all of the facilities, all of the restaurants have their own four-walled space,” says Collins. “There’s shared infrastructure outside of that.”

Some of that infrastructure is taking food deliveries and an ability to serve as a central hub for local supplier, according to Collins. “One of the things that we’re going to be launching relatively soon here in Pasadena, is actually in-service days where local supplier and purveyors can come in and meet with seven restaurants at once.”

It’s also possible that restaurants in the Kitchen United spaces could take advantage of restaurant technologies being developed by one of the startup’s sister companies through Cali Group, a holding company for a number of different e-sports, retail, and food technology startups.

The Pasadena-based kitchen company was founded by Harry Tsao, an investor in food technology (and a part owner of the Golden State Warriors and the Los Angeles Football Club) through his fund Avista Investments; and John Miller, a serial entrepreneur who founded the Cali Group.

In fact, Kitchen United operates as a Cali Group portfolio company alongside Miso Robotics, the developer of the burger flipping robot, Flippy; Caliburger, an In-n-Out clone first developed by Miller in Shanghai and brought back to the U.S.; and FunWall, a display technology for online gaming in retail settings.

“Kitchen United’s data-driven approach to flexible kitchen spaces unlocks critical value for national, regional, and local restaurant chains looking to expand into new markets,” said Adam Ghobarah, general partner at GV, and a new director on the Kitchen United board. “The founding team’s experience in scaling — in addition to diverse exposure to national chains, regional brands, regional franchises, and small upstart eateries — puts Kitchen United in a strong position to accelerate food innovation.”

GV’s Ghobarah actually sees the investment of a piece with other bets that Alphabet’s venture capital arm has made around the food industry.

The firm is a backer of the fully automated hamburger preparation company, Creator, which has raised roughly $28 million to develop its hamburger making robot (if Securities and Exchange Commission filings can be believed). And it has backed the containerized farming startup, Bowery Farming, with a $20 million investment.

Ghobarah sees an entirely new food distribution ecosystem built up around facilities where Bowery’s farms are colocated with Kitchen United’s restaurants to reduce logistical hurdles and create new hubs.

“As urban farming like Bowery scales up… that becomes more and more realistic,” Ghobarah said. “The other thing that really stands out when you have flexible locations … all of the thousands of people who want to own a restaurant now have access. It’s not really all regional chains and national chains… With a satellite location like this… [a restaurant]… can break even at one third of the order volume.”

 

Deliverr raises $7M to help e-commerce businesses compete with Amazon Prime

Deliverr, a startup that helps retailers offer a Prime-like delivery experience has raised a $7.1 million Series A led by Joe Londsdale’s 8VC, with participation from Zola founder Shan Lyn Ma, Flexport chief executive officer Ryan Peterson and others.

When Amazon rolled out its membership-based two-day shipping service in 2005, e-commerce and customer expectations around fulfillment speed changed forever.

Today, more than 100 million people use Amazon Prime. That means, 100 million people are fully accustomed to two-day shipping and if they can’t have it, they shop elsewhere. As The Wall Street Journal’s Christopher Mims recently put it: “Alongside life, liberty and the pursuit of happiness, you can now add another inalienable right: two-day shipping on practically everything.”

Only recently have Amazon’s competitors begun to offer similar fast delivery options. About two years ago, Walmart launched its own free two-day delivery service for its owned-inventory; eBay followed suit, establishing a three-day or less delivery guaranteed option for shoppers in March 2017.

To power these Prime-like delivery options, Walmart, eBay and the Canadian e-commerce business Shopify are relying on a little upstart.

One-year-old Deliverr helps businesses offer rapid delivery experiences to their customers. Today, the company is announcing a $7.1 million Series A led by Joe Lonsdale’s 8VC, with participation from Zola founder Shan-Lyn Ma, Flexport chief executive officer Ryan Peterson and others.

The San Francisco-based startup uses machine learning and predictive intelligence to determine which of its warehouses to store its client’s goods.

Currently, Deliverr operates out of more than 10 warehouses in Texas, Missouri, Pennsylvania, Ohio and New Jersey, among other states, though co-founder Michael Krakaris says that number is growing every week. Its customers typically store inventory in three to five different locations based on Deliverr’s predictive algorithms.

Unlike Amazon, which owns more than 75 fulfillment centers, Deliverr doesn’t own its warehouses. Krakaris describes the company’s strategy as a sort of Uber for fulfillment.

“Uber didn’t change the physical infrastructure of cars. They didn’t build their own taxis. What they did was create software that could connect excess capacity drivers,” Krakaris told TechCrunch. “Most warehouses aren’t going to be full. We are going in and filling that extra space they wouldn’t otherwise fill.”

One of the startup’s tricks is to use brand-neutral packaging so any and all marketplaces could theoretically power fulfillment through Deliverr. Amazon, of course, sticks a Prime sticker on all its outgoing packages. And because Amazon’s fulfillment service is used by some eBay sellers, eBay items are known to show up at customers’ homes in Amazon-branded packaging. Not a great look for eBay.

You need an independent fulfillment service that can handle all these different fulfillment channels and be neutral,” Krakaris said.

Deliverr plans to use the investment to scale its team and ink partnerships with additional online retailers.