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Financial institutions can support COVID-19 crowdfunding campaigns

By Walter Thompson
Scott Purcell Contributor
Scott Purcell is the CEO and chief trust officer of Prime Trust, an innovative API-enabled B2B open-banking financial solutions provider.

The economic impact of the COVID-19 pandemic adversely affected the financial outlook for millions of people, and continues to cause significant fiscal distress to millions more, but such challenging times have also wrought a more resilient and resourceful financial system.

With the ingenuity of crowdfunding, considered to be one of the last decade’s greatest “success stories,” and such desperate times calling for bold new ways to finance a wide variety of COVID-19 relief efforts, we are now seeing an excellent opportunity for banks and other financial institutions to partner with crowdfunding platforms and campaigns, bolstering their efforts and impact.

COVID-19 crowdfunding: A world of possibilities to help others

Before considering how financial institutions can assist with crowdfunding campaigns, we must first look at the diverse array of impressive results from this financing option during the pandemic. As people choose between paying the rent or buying groceries, and countless other despairing circumstances, we must look to some of the more inventive ways businesses, entrepreneurs and people in general are using crowdfunding to provide the COVID-19 relief that cash-strapped consumers with maxed-out or poor credit do not have access to or the government has not provided.

Some great examples of COVID-19 crowdfunding at its best include the following:

The possibilities presented by crowdfunding in this age of the coronavirus are endless, and financial institutions can certainly lend their assistance. Here is how.

1. Acknowledge that crowdfunding is not a trend

Crowdfunding is a substantial and ever-so relevant means of financing all sorts of businesses, people and products. Denying its substantive contribution to the economy, especially in digital finance during this pandemic, is akin to wearing a monocle when you actually need glasses for both of your eyes. Do not be shortsighted on this. Crowdfunding is here to stay. In fact, countless crowdfunding businesses and platforms continue to make major moves within the markets globally. For example, Parpera from Australia, in coordination with the equity-crowdfunding platforms, hopes to rival the likes of GoFundMe, Kickstarter and Indiegogo.

2. Be willing to invest in crowdfunded campaigns

This might seem contrary to the original purpose of these campaigns, but the right amount of seed-cash infusions to campaigns that are aligned with your goals as a company is a win-win for both you and the entrepreneurs or causes, especially now in such desperate times of need.

3. Get involved in the community and its crowdfunding efforts

This means that small businesses and medium-sized businesses within your institution’s community could use your help. Consider investing in crowdfunding campaigns similar to the ones mentioned earlier. Better yet, bridge the gaps between financial institutions and crowdfunding platforms and campaigns so that smaller businesses get the opportunities they need to survive through these difficult times.

4. Enable sustainable development goals (SDG)

Last month, the United Nations Development Program released a report proclaiming that digital finance is now allowing people from all over the world to customize and personalize their money-management experiences such that their financial needs have the potential to be more readily and sufficiently met. Financial institutions willing to work as a partner with crowdfunding platforms and campaigns will further these goals and set society up for a more robust rebound from any possible detrimental effects of the COVID-19 recession.

5. Lend your regulatory expertise to this relatively new industry

Other countries are already beginning to figure out better ways to regulate the crowdfunding financing industry, such as the recent updates to the European Union’s handling of crowdfunding regulations, set to take effect this fall. Well-established financial institutions can lend their support in defining the policies and standard operating procedures for crowdfunding even during such a chaotic time as the COVID-19 pandemic. Doing so will ensure fair and equitable financing for all, at least, in theory.

While originally born out of either philanthropy or early-adopting innovation, depending on the situation, person or product, crowdfunding has become an increasingly reliable means of providing COVID-19 economic relief when other organizations, including the government and some banks, cannot provide sufficient assistance. Financial institutions must lend their vast expertise, knowledge and resources to these worthy causes; after all, we are all in this together.

3 reforms social media platforms should make in light of ‘The Social Dilemma’

By Walter Thompson
Jason Morgese Contributor
Jason Morgese is the founder and CEO of Leavemark, the first ad-free, data storage and social media hybrid.

“The Social Dilemma” is opening eyes and changing digital lives for Netflix bingers across the globe. The filmmakers explore social media and its effects on society, raising some crucial points about impacts on mental health, politics and the myriad ways firms leverage user data. It interweaves interviews from industry executives and developers who discuss how social sites can manipulate human psychology to drive deeper engagement and time spent within the platforms.

Despite the glaring issues present with social media platforms, people still crave digital attention, especially during a pandemic, where in-person connections are strained if not impossible.

So, how can the industry change for the better? Here are three ways social media should adapt to create happier and healthier interpersonal connections and news consumption.

Stop censoring

On most platforms, like Facebook and Instagram, the company determines some of the information presented to users. This opens the platform to manipulation by bad actors and raises questions about who exactly is dictating what information is seen and what is not. What are the motivations behind those decisions? And some of the platforms dispute their role in this process, with Mark Zuckerberg saying in 2019, “I just believe strongly that Facebook shouldn’t be the arbiter of truth of everything that people say online.”

Censorship can be absolved with a restructured type of social platform. For example, consider a platform that does not rely on advertiser dollars. If a social platform is free for basic users but monetized by a subscription model, there is no need to use an information-gathering algorithm to determine which news and content are served to users.

This type of platform is not a ripe target for manipulation because users only see information from people they know and trust, not advertisers or random third parties. Manipulation on major social channels happens frequently when people create zombie accounts to flood content with fake “likes” and “views” to affect the viewed content. It’s commonly exposed as a tactic for election meddling, where agents use social media to promote false statements. This type of action is a fundamental flaw of social algorithms that use AI to make decisions about when and what to censor as well as what it should promote.

Don’t treat users like products

The issues raised by “The Social Dilemma” should reinforce the need for social platforms to self-regulate their content and user dynamics and operate ethically. They should review their most manipulative technologies that cause isolation, depression and other issues and instead find ways to promote community, progressive action and other positive attributes.

A major change required to bring this about is to eliminate or reduce in-platform advertising. An ad-free model means the platform does not need to aggressively push unsolicited content from unsolicited sources. When ads are the main driver for a platform, then the social company has a vested interest in using every psychological and algorithm-based trick to keep the user on the platform. It’s a numbers game that puts profit over users.

More people multiplied by more time on the site equals ad exposure and ad engagement and that means revenue. An ad-free model frees a platform from trying to elicit emotional responses based on a user’s past actions, all to keep them trapped on the site, perhaps to an addictive degree.

Encourage connections without clickbait

A common form of clickbait is found on the typical social search page. A user clicks on an image or preview video that suggests a certain type of content, but upon clicking they are brought to unrelated content. It’s a technique that can be used to spread misinformation, which is especially dangerous for viewers who rely on social platforms for their news consumption, instead of traditional outlets. According to the Pew Research Center, 55% of adults get their news from social media “often” or “sometimes.” This causes a significant problem when clickbait articles make it easier to offer distorted “fake news” stories.

Unfortunately, when users engage with clickbait content, they are effectively “voting” for that information. That seemingly innocuous action creates a financial reason for others to create and disseminate further clickbait. Social media platforms should aggressively ban or limit clickbait. Management at Facebook and other firms often counter with a “free speech” argument when it comes to stopping clickbait. However, they should consider the intent is not to act as censors that are stopping controversial topics but protecting users from false content. It’s about cultivating trust and information sharing, which is much easier to accomplish when post content is backed by facts.

“The Social Dilemma” is rightfully an important film that encourages a vital dialogue about the role social media and social platforms play in everyday life. The industry needs to change to create more engaged and genuine spaces for people to connect without preying on human psychology.

A tall order, but one that should benefit both users and platforms in the long term. Social media still creates important digital connections and functions as a catalyst for positive change and discussion. It’s time for platforms to take note and take responsibility for these needed changes, and opportunities will arise for smaller, emerging platforms taking a different, less-manipulative approach.

Leverage public data to improve content marketing outcomes

By Walter Thompson
Kristin Tynski Contributor
Kristin Tynski is co-founder and SVP creative at Fractl, a growth marketing agency that’s helped Fortune 500 companies and boutique businesses earn quality media coverage, backlinks, awareness and authority.

Recently I’ve seen people mention the difficulty of generating content that can garner massive attention and links. They suggest that maybe it’s better to focus on content without such potential that can earn just a few links but do it more consistently and at higher volumes.

In some cases, this can be good advice. But I’d like to argue that it is very possible to create content that can consistently generate high volumes of high-authority links. I’ve found in practice there is one truly scalable way to build high-authority links, and it’s predicated on two tactics coming together:

  1. Creating newsworthy content that’s of interest to major online publishers (newspapers, major blogs or large niche publishers).
  2. Pitching publishers in a way that breaks through the noise of their inbox so that they see your content.

How can you use new techniques to generate consistent and predictable content marketing wins?

The key is data.

Techniques for generating press with data-focused stories

It’s my strong opinion that there’s no shortcut to earning press mentions and that only truly new, newsworthy and interesting content can be successful. Hands down, the simplest way to predictably achieve this is through a data journalism approach.

One of the best ways you can create press-earning, data-focused content is by using existing data sets to tell a story.

There are tens of thousands — perhaps hundreds of thousands — of existing public datasets that anyone can leverage for telling new and impactful data-focused stories that can easily garner massive press and high levels of authoritative links.

The last five years or so have seen huge transparency initiatives from the government, NGOs and public companies making their data more available and accessible.

Additionally, FOIA requests are very commonplace, freeing even more data and making it publicly available for journalistic investigation and storytelling.

Because this data usually comes from the government or another authoritative source, pitching these stories to publishers is often easier because you don’t face the same hurdles regarding proving accuracy and authoritativeness.

Potential roadblocks

The accessibility of data provided by the government especially can vary. There are little to no data standards in place, and each federal and local government office has varying amounts of resources in making the data they do have easy to consume for outside parties.

The result is that each dataset often has its own issues and complexities. Some are very straightforward and available in clean and well-documented CSVs or other standard formats.

Unfortunately, others are often difficult to decode, clean, validate or even download, sometimes being trapped inside of difficult to parse PDFs, fragmented reports or within antiquated querying search tools that spit out awkward tables.

Deeper knowledge of web scraping and programmatic data cleaning and reformatting are often required to be able to accurately acquire and utilize many datasets.

Tools to use

Dear Sophie: What visa options exist for a grad co-founding a startup?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie:

What are the visa prospects for a graduate completing an advanced degree at a university in the United States who wants to co-found a startup after graduation? Can the new startup or my co-founders sponsor me for a visa?

—Brilliant in Berkeley

Dear Brilliant,

Thank you for your questions and for your contributions. The U.S. economy greatly benefits from entrepreneurial individuals like you who create companies — and jobs — in the U.S.

Let me take your second question first: Yes, it is theoretically possible for your startup to sponsor you for a visa, and for one of your co-founders to be your supervisor. Many visas and employment green cards require a company to sponsor you and for you to demonstrate that a valid employer-employee relationship exists.

Given your situation, timing will be key, particularly since one of your best visa options is the H-1B Visa for Specialty Occupations. The number of H-1B visas issued each year is typically capped at 85,000-60,000 for individuals with a bachelor’s degree and 25,000 for individuals with a master’s or higher degree. Because of the cap on H-1B visas and because the demand for them far outstrips the supply, U.S. Citizenship and Immigration Services (USCIS) holds a lottery once a year in the spring to determine who can apply for this visa.

Now may be the best time to become a full-stack developer

By Walter Thompson
Sergio Granada Contributor
Sergio Granada is the CTO of Talos Digital, a global team of professional software developers that partners with agencies and businesses in multiple industries providing software development and consulting services for their tech needs.

In the world of software development, one term you’re sure to hear a lot of is full-stack development. Job recruiters are constantly posting open positions for full-stack developers and the industry is abuzz with this in-demand title.

But what does full-stack actually mean?

Simply put, it’s the development on the client-side (front end) and the server-side (back end) of software. Full-stack developers are jacks of all trades as they work with the design aspect of software the client interacts with as well as the coding and structuring of the server end.

In a time when technological requirements are rapidly evolving and companies may not be able to afford a full team of developers, software developers that know both the front end and back end are essential.

In response to the coronavirus pandemic, the ability to do full-stack development can make engineers extremely marketable as companies across all industries migrate their businesses to a virtual world. Those who can quickly develop and deliver software projects thanks to full-stack methods have the best shot to be at the top of a company’s or client’s wish list.

Becoming a full-stack developer

So how can you become a full-stack engineer and what are the expectations? In most working environments, you won’t be expected to have absolute expertise on every single platform or language. However, it will be presumed that you know enough to understand and can solve problems on both ends of software development.

Most commonly, full-stack developers are familiar with HTML, CSS, JavaScript, and back-end languages like Ruby, PHP, or Python. This matches up with the expectations of new hires as well, as you’ll notice a lot of openings for full-stack developer jobs require specialization in more than one back-end program.

Full-stack is becoming the default way to develop, so much so that some in the software engineering community argue whether or not the term is redundant. As the lines between the front end and back end blur with evolving tech, developers are now being expected to work more frequently on all aspects of the software. However, developers will likely have one specialty where they excel while being good in other areas and a novice at some things….and that’s OK.

Getting into full-stack though means you should concentrate on finding your niche within the particular front-end and back-end programs you want to work with. One practical and common approach is to learn JavaScript since it covers both front and back end capabilities. You’ll also want to get comfortable with databases, version control, and security. In addition, it’s smart to prioritize design since you’ll be working on the client-facing side of things.

Since full-stack developers can communicate with each side of a development team, they’re invaluable to saving time and avoiding confusion on a project.

One common argument against full stack is that, in theory, developers who can do everything may not do one thing at an expert level. But there’s no hard or fast rule saying you can’t be a master at coding and also learn front-end techniques or vice versa.

Choosing between full-stack and DevOps

One hold up you may have before diving into full-stack is you’re also mulling over the option to become a DevOps engineer. There are certainly similarities among both professions, including good salaries and the ultimate goal of producing software as quickly as possible without errors.  As with full-stack developers, DevOps engineers are also becoming more in demand because of the flexibility they offer a company.

We need universal digital ad transparency now

By Walter Thompson
Laura Edelson Contributor
Laura Edelson is a PhD Candidate in Computer Science at NYU’s Tandon School of Engineering and is a team member on The Online Political Transparency Project.
Erika Franklin Fowler Contributor
Erika Franklin Fowler is Professor of Government at Wesleyan University where she directs the Wesleyan Media Project (WMP), which tracks and analyzes political advertising in real-time during elections.
Jason Chuang Contributor
Jason Chuang is a researcher at Mozilla.

Dear Mr. Zuckerberg, Mr. Dorsey, Mr. Pichai and Mr. Spiegel: We need universal digital ad transparency now!

The negative social impacts of discriminatory ad targeting and delivery are well-known, as are the social costs of disinformation and exploitative ad content. The prevalence of these harms has been demonstrated repeatedly by our research. At the same time, the vast majority of digital advertisers are responsible actors who are only seeking to connect with their customers and grow their businesses.

Many advertising platforms acknowledge the seriousness of the problems with digital ads, but they have taken different approaches to confronting those problems. While we believe that platforms need to continue to strengthen their vetting procedures for advertisers and ads, it is clear that this is not a problem advertising platforms can solve by themselves, as they themselves acknowledge. The vetting being done by the platforms alone is not working; public transparency of all ads, including ad spend and targeting information, is needed so that advertisers can be held accountable when they mislead or manipulate users.

Our research has shown:

  • Advertising platform system design allows advertisers to discriminate against users based on their gender, race and other sensitive attributes.
  • Platform ad delivery optimization can be discriminatory, regardless of whether advertisers attempt to set inclusive ad audience preferences.
  • Ad delivery algorithms may be causing polarization and make it difficult for political campaigns to reach voters with diverse political views.
  • Sponsors spent more than $1.3 billion dollars on digital political ads, yet disclosure is vastly inadequate. Current voluntary archives do not prevent intentional or accidental deception of users.

While it doesn’t take the place of strong policies and rigorous enforcement, we believe transparency of ad content, targeting and delivery can effectively mitigate many of the potential harms of digital ads. Many of the largest advertising platforms agree; Facebook, Google, Twitter and Snapchat all have some form of an ad archive. The problem is that many of these archives are incomplete, poorly implemented, hard to access by researchers and have very different formats and modes of access. We propose a new standard for universal ad disclosure that should be met by every platform that publishes digital ads. If all platforms commit to the universal ad transparency standard we propose, it will mean a level playing field for platforms and advertisers, data for researchers and a safer internet for everyone.

The public deserves full transparency of all digital advertising. We want to acknowledge that what we propose will be a major undertaking for platforms and advertisers. However, we believe that the social harms currently being borne by users everywhere vastly outweigh the burden universal ad transparency would place on ad platforms and advertisers. Users deserve real transparency about all ads they are bombarded with every day. We have created a detailed description of what data should be made transparent that you can find here.

We researchers stand ready to do our part. The time for universal ad transparency is now.

Signed by:

Jason Chuang, Mozilla
Kate Dommett, University of Sheffield
Laura Edelson, New York University
Erika Franklin Fowler, Wesleyan University
Michael Franz, Bowdoin College
Archon Fung, Harvard University
Sheila Krumholz, Center for Responsive Politics
Ben Lyons, University of Utah
Gregory Martin, Stanford University
Brendan Nyhan, Dartmouth College
Nate Persily, Stanford University
Travis Ridout, Washington State University
Kathleen Searles, Louisiana State University
Rebekah Tromble, George Washington University
Abby Wood, University of Southern California

Elon Musk’s Las Vegas Loop might only carry a fraction of the passengers it promised

By David Riggs

In pandemic-free years, America’s biggest trade show, CES, attracts more than 170,000 attendees, bringing traffic that jams surrounding roads day and night. To help absorb at least some of the congestion, the Las Vegas Convention Center (LVCC) last year planned a people-mover to serve an expanded campus. The LVCC wanted transit that could move up to 4,400 attendees every hour between exhibition halls and parking lots.

It considered traditional light rail that could shuttle hundreds of attendees per train, but settled on an underground system from Elon Musk’s The Boring Company (TBC) instead — largely because Musk’s bid was tens of millions of dollars cheaper. The LVCC Loop would transport attendees through two 0.8-mile underground tunnels in Tesla vehicles, four or five at a time.

But planning files reviewed by TechCrunch seem to show that the Loop system will not be able to move anywhere near the number of people LVCC wants, and that TBC agreed to.

Fire regulations peg the occupant capacity in the load and unload zones of one of the Loop’s three stations at just 800 passengers an hour. If the other stations have similar limitations, the system might only be able to transport 1,200 people an hour — around a quarter of its promised capacity.

If TBC misses its performance target by such a margin, Musk’s company will not receive more than $13 million of its construction budget — and will face millions more in penalty charges once the system becomes operational.

Neither TBC nor LVCVA responded to multiple requests for comment.

Fire regulations limit the load/unload zone near the cars to 800 people per hour. Credit: TBC/Clark County

The LVCC always realized that it was taking a gamble on the Loop. Although Musk built a short demonstration tunnel near Los Angeles, this would be the first public system with real customers and service requirements. An analysis by Las Vegas Mayor Carolyn Goodman in May 2019 concluded that TBC’s unproven system presented a high risk for the LVCC’s parent body, the Las Vegas Convention and Visitor’s Authority (LVCVA).

So when the LCVCA wrote its contract with The Boring Company, it did its best to incentivize Musk to deliver on his promises. The contract would be for a fixed price, and TBC would have to hit specific milestones to receive all of its payments. When the bare tunnels are completed, which could happen any day now, TBC will have earned just over 30% of the total. The next big milestone is the completion of the entire working system, which would result in a pay-out of over $10 million.

That was scheduled to have happened by October 1, so that the system would be ready for the next CES show in January. Although CES 2021 has now gone virtual and there is less time pressure on Musk to deliver, he presumably still wants to get paid.

In a tweet this week, Elon Musk wrote that the system would be open in “maybe a month or so. Some finishing touches need to be done on the stations.”

After another milestone for the completion of a test period and safety report, the system’s final three milestones relate to how many passengers it can carry. If the Loop can demonstrate moving 2,200 passengers an hour, TBC will get $4.4 million, then the same payment again for hitting 3,300, and the same again for 4,400 passengers an hour. Together, these capacity payments represent 30% of the fixed price contract.

Even if TBC achieved those numbers during testing, the LVCVA was worried that it might not be able to maintain them once the system was operational, so it inserted yet another requirement: “[TBC] acknowledges liquidated damages are applicable for [TBC’s] failure to provide System Capacity for Full Facility Trade Show Events.”

For each large trade show that TBC fails to transport an average capacity of 3,960 passengers per hour for 13 hours, it will have to pay LVCVA $300,000 in damages. If TBC keeps falling short, it keeps paying, up to a maximum of $4.5 million.

So what is stopping TBC from transporting as many people as both it and the LVCC wants? There are national fire safety rules for underground transit systems that specify alarms, sprinklers, emergency exits and a maximum occupant load, to avoid overcrowding in the event of a fire.

Building plans submitted by The Boring Company include a fire code analysis for one of the Loop’s above-ground stations:

Image source: The Boring Company/Clark County NV

The above screenshot from the plans notes that the area where passengers get into and out of the Tesla cars has a peak occupancy load of 100 people every 7.5 minutes, equivalent to 800 passengers an hour. Even if the other stations had higher limits, this would limit the system’s hourly capacity to about 1,200 people.

“That sounds correct,” says Glenn Corbett, a professor of security, fire and emergency management at the John Jay College of Criminal Justice in New York. “But if that’s the bottleneck, the question from a safety standpoint is, what controls that [800 per hour]? Is it just pure honesty and people following the rules, or is there a mechanical thing that keeps them out?”

The plans do not show any turnstiles or barriers to limit entry.

Even without the safety restrictions, the Loop may struggle to hit its capacity goals. Each of the 10 bays at the Loop’s stations must handle hundreds of passengers an hour, corresponding to perhaps 100 or more arrivals and departures, depending on how many people each car is carrying. That leaves little time to load and unload people and luggage, let alone make the 0.8-mile journey and occasionally recharge. 

[gallery ids="2061530,2061529,2061685,2061528"]

Although TBC’s Loop website says that the system will use autonomous vehicles, a TBC executive told a planning committee last year that the cars would have human drivers “for additional safety.” TBC had proposed developing a larger capacity autonomous shuttle for the Loop, capable of carrying up to 16 people. The latest plans all show traditional sedans, however, and another Musk tweet this week admitted: “We simplified this a lot. It’s basically just Teslas in tunnels at this point.”

The most recent documents filed by TBC also show changes to the Loop’s original design.

Gone are striking curved roofs, with both aboveground stations now having flat photovoltaic canopies to help charge the Tesla vehicles. These terminal stations each have a single Supercharger station, and a “showpiece sculpture” consisting of a concrete segment similar to those used in the tunnels below.

The central, subterranean station has a large, open platform, and also houses the electrical, fire safety and IT equipment. Each station will have bays for 10 Tesla vehicles to load and unload passengers. 

Even before the first Loop is operating, TBC is planning two more Loop tunnels nearby, connecting the LVCC to the Wynn Encore and Resorts World casinos.

The tunnel to the Encore is long enough that safety regulations require an emergency exit about halfway along. Plans indicate an emergency egress shaft and a small hatch, but it is unclear whether passengers escaping a fire or breakdown would be expected to climb stairs or even a ladder.

Loop extension egress. Image source: The Boring Company/Clark County NV

TBC last year suggested an emergency ladder for its proposed Loop between Baltimore and Washington, D.C., a system that Corbett called “the definition of insanity,” as it did not account for passengers with limited mobility. That project is now on pause

TBC’s stated aim is to expand the LVCC Loop from a local people mover to a Vegas-wide transit system serving the Strip, the airport and eventually extending all the way to Los Angeles. If the company struggles to deliver capacity — and revenue — from its small-scale Convention Center system, the future of those ambitions could be in doubt. 

The need for true equity in equity compensation

By Walter Thompson
Carine Schneider Contributor
Carine Schneider is the president of AST Private Company Solutions, Inc., a division of AST Financial.

I began my career at Oracle in the mid-1980s and have since been around the proverbial block, particularly in Silicon Valley working for and with companies ranging from the Fortune 50 to global consulting companies to leading a number of startups, including the SaaS company I presently lead. Throughout my career, I’ve carved out a niche not only working with technology companies, but focused on designing and implementing global compensation programs.

In short, if there’s two things I know like the back of my hand, it’s tech and how people are paid.

The compensation evolution I’ve witnessed over these past 35+ years has been dramatic. Among other things, there has been a fundamentally seismic shift in how women are perceived and paid, principally for the better. Some of it, in truth, has been window dressing. It’s good PR to say you’re a company with a strong culture focused on diversity, as it helps attract top talent. But the rubber meets the road once hires get past the recruiter. When companies don’t do what they say, we see mass exoduses and even lawsuits, as has recently been the case at Pinterest and Carta.

So with the likes of Intel, Salesforce and Apple publicly committed to gender pay equity, there’s nothing left to see here, right? Actually, we’re not even close. Yes, the glass ceiling is cracking. But significant, largely unaddressed gaps remain relative to the broader scope of long-tail compensation for women, especially at startups, where essential measures of economic reward such as stock options in companies are often not even part of the conversation around pay parity.

As a baseline, while progress is evident, gender pay is an unfinished product to say the least. Recently the U.S. Bureau of Labor Statistics found white women earn 83.3% as much as their white male counterparts, while African-American women earn 93.7% compared to men of their same race. Asian women made 77.1% and Hispanic women earned 85.1% as much respectively.

According to Payscale, the ratio of the median earnings of women to men has decreased by just $0.07 since 2015, and in 2020, women make $0.81 for every dollar a man makes. Long term, in calculating presumptive raises given over a 40-year career, women could lose as much as $900,000 over the duration of a career.

But that’s just the tip of the iceberg. Even if we solely left the gender pay gap to just a cash salary disparity, there is something further to see here. However, to quote a famous pitchman, “But wait, there’s more!” And the more — at least in my mind — is far more troubling.

As innovative startups from Silicon Valley to New York’s Silicon Alley and beyond continue to reshape the business landscape, guess how most of them are able to lure bright, entrepreneurial minds? It’s certainly not salary, as when a company has nothing beyond a great idea and maybe a lead to a VC on Sand Hill Road, there’s no fat paycheck or benefits package to offer. Instead, they dangle the proverbial carrot of stock/equity compensation.

“Look, we know you can get $180,000 a year from Apple but we’ll give you $48,000 a year plus 1,000 shares presently valuated at $62 per share. Our board — which is packed with studs from the Bay Area — is expecting that to soar within two years! Wait ‘til we go public!”

This is the pitch, at least if you’re a promising male. But women, historically, have tended to get left out of this lucrative reward package for varying reasons.

How has this happened? Beyond just a furtherance of business culture, while there have been legislative steps taken to address inequities in public company compensation and stock dispersal, there are no regulations as to how private companies distribute or manage the appreciation of stock. And, as we all know, the appreciation can be potentially massive.

It makes sense. Many companies and even naïve job-seekers consider equity as the “third pillar” of compensation beyond titles/compensation (which come hand-in-hand) and benefits. Shares of startups are just not top-of-mind — often ignored or misunderstood — by many who look at gender pay inequities, although that could not be more misguided.

A recent study published in the “Journal of Applied Psychology” found a gender gap for equity-based awards ranging from 15%-30% — even beyond accounting for typical reasons women historically earn less than men, including differences in occupation and length of service at a company. Keep in mind many of these companies will go on to massive valuations, and for some, lucrative IPOs or acquisitions.

It’s a problem I recognized long ago, and it is largely why I agreed to lead our Bay Area startup on behalf of our New York-based parent company AST. I found a commitment to a genuinely equitable culture instilled by a shared moral compass, a belief that companies who care about gender equity perform better and provide better returns, and a conviction that diversity brings unique perspectives, drives talent retention, builds a stronger culture and aids client satisfaction.

In speaking with industry colleagues, I know it’s something CEOs, both men and women, are dedicated to addressing. I believe creating a broader picture of compensation is essential for startups, global conglomerates and every company in between. If you are in a position of leadership and recognize this is a challenge in need of addressing at your company, here are some steps I recommend you implement:

  1. Look at the data: Do the analysis. See if this is truly an issue at your company, and if it is, commit to creating a level playing field. There are plenty of experienced consultants who can help you work through remediation strategies.
  2. Remove subjectivity: Hire an independent arbiter to analyze your data, as it removes the politics and emotion, as well as bias from the work product.
  3. Create compensation bands: Much like the government’s GS system, create a salary grade system that contains bands of compensation for specific roles. Prior to hiring a person, decide which band the job responsibilities should be assigned.
  4. Empower a champion: Identify and empower an internal champion to truly own parity — someone whose performance is judged based upon creating equity company-wide. Instead of assigning it to your human resources chief, create a chief diversity officer role to own it. After all, this is bigger than just pay or medical benefits. This is the culture and thus foundation of your company.
  5. Get your board on board: Educate your board as to why this matters. If your board doesn’t value this, it ultimately won’t matter. Companies have audit committee chairs or nominations chairs. Identify a “culture chair.”

One of the first reports we created is a Pay Comparison Report so there are tools anyone in management can easily use to review stock grants made to all employees and ensure equity between people of different ethnicities or gender. It’s not that hard if you care to look.

When I was graduating from college and Ronald Reagan was in office, we were talking about the potential for women to break the glass ceiling. Now, many years later, somehow we’ve managed to develop lights you can turn on and off by clapping and most of us are walking around with the power of a supercomputer in our hands. Is it really asking too much that we require gender pay equity, including all three compensation pillars (cash, benefits and stock), to be a priority?

 

Tesla’s decision to scrap its PR department could create a PR nightmare

By Walter Thompson
Ayelet Noff Contributor
Ayelet Noff is the founder and CEO of SlicedBrand, a top global PR agency headquartered in Berlin.

A solid public relations team solves many issues within a company.

It helps spread important news announcements and topics integral to a company’s success. It communicates with the media in a timely manner to ensure accurate coverage and control the conversation. It builds a state of trust and engagement that propels a company’s vision and goals forward. Unless of course that company is Tesla, in which case it wants none of that.

According to numerous internal sources confirmed by automotive blog Electrik, Tesla has been slowly dissolving its internal PR department over the course of this year, leaving the sole voice of the company its founder, Elon Musk.

If true, this is a confounding decision by Musk and the decision-makers at Tesla.

What this creates for Tesla is a black hole of information coming from the company. Facts will be obfuscated if there is no official position on whatever happens in the news. For instance, consider the recent cases of self-driving collisions or a roof flying off a new car.

Or last month, when there was a major outage in Tesla vehicles, the press was left to speculate. There is no longer a PR department to reply to these incidents. It seems that Tesla has adopted a crisis management strategy that appears to think that the best course of action is to ignore future crises and they will just go away on their own. Unfortunately for Tesla, real life doesn’t work like that.

Emerging companies thrive on data. Shouldn’t they use it to improve hiring decisions?

By Walter Thompson
Zoe Jervier Hewitt Contributor
Zoe Jervier Hewitt is a leadership coach and talent partner at multi-stage VC fund EQT Ventures, where she helps portfolio companies structure and accelerate their search for talent by facilitating connections to the right technology and people required to source candidates at each stage of company growth.

While emerging companies are often started by technically minded founders and funded by VCs for their data-driven approaches to product and growth, the irony is that these companies are often using less data and rigor when it comes to hiring talent than more traditional, less data-focused companies. The truth is, the way in which tech companies hire has been relatively untouched by disruption, with most still relying on resumes and conversational interviews for its highest-stake decisions.

The consequences of this is not only detrimental to building teams, but to the overall diversity of the startup space.

Data-driven hiring isn’t just about having the right funnel metrics in place to determine efficiency of process, it extends to the information we choose to collect (or not collect) and measure to determine if someone is a fit for a role. There’s a science to building teams, and therefore selecting talent to join teams. So, why is hiring in early-stage companies still not regarded as a data-driven activity?

Some argue that by nature, talent selection involves people and so can’t truly be scientific. People are unique, complex, emotional and unpredictable. Additionally, few people think they’re a bad judge of character and talent, most overconfidently hold the belief that they’ve got a superior instinct and “nose” for talent. Hiring talent is one of the few operational activities in business where formal training or decades of experience isn’t expected in order to be better than average.

Move away from gut-based evaluations

The impact of this outdated way of thinking is felt across the board — first and foremost when it comes to team dynamics. To first know if someone is qualified, you need to know what you’re assessing for. Companies that operate with a shallow understanding of what drives success in a role lack the vital information needed to build a strong system of selection. The output is a weak hiring process that is heavy on unstructured interviewing, light on predictive signals and relies on gut-based evaluations.

Chemistry, confidence and charisma are more likely to determine whether a candidate lands a role versus competence to do the job. As a result, almost half of new hires are estimated to fail and be ineffective, and weak teams are built. The lack of reliable data also means most companies suffer from a broken feedback loop between hiring and team performance, which stunts learning and improvement. How do you know if your selection process is efficiently assessing for the skills, traits and behaviors that drive top performance if you’re not connecting the dots?

The dangers of subjective approaches

More dangerously, a hiring process that’s not designed to collect and evaluate based on evidence almost always results in a lack of team diversity, which as we know stunts innovation and therefore limits company success.

Subjective approaches to talent selection and development create a revolving door of unconscious biases and exclusion, with a resounding impact on what now makes up the homogenous tech ecosystem. This is not helped by natural overreliance on networks as means to fill hiring pipelines in early-stage company building.

Lastly, for talent operators and people practitioners, it does no favors for the credibility of their profession. Recruiting and selecting talent will continue to be branded an unsophisticated, lesser back-office function, or as a “dark art” that is about as data-informed as looking into a crystal ball.

Taking an evidence-based approach

In bringing more objectivity to the hiring process, founders and their teams are served best when starting with a clear, evidence-based definition of what success markers look like in a role, and then putting structure around each stage of selection to assess for a specific skill or behavioral trait: What and when will you assess? What criteria will you evaluate the data based on? In other words, the objective is to get as close as possible to unearthing signals that are reliable enough to accurately predict that someone will perform in a role.

Up until recently, science-based talent assessment tools, which help hiring managers make more objective evaluations, have been largely used by bigger, more established firms that suffer from high-volumes of job applications — the luxury “Google” problem. However, three recent shifts suggest we’re about to see a trend in their adoption by earlier-stage startups as they scale their teams:

  1. Pressure to build diverse and inclusive teams. 2020 has pushed diversity and inclusion to the top of the agenda for most companies. Assessment tools used as part of team-building can help groups better identify where specific cognitive, personality and skill gaps exist, and therefore focus hiring for those missing ingredients. Candidate assessment also helps reduce unconscious bias that might creep into interviews by showing more objective information about someone’s strengths and weaknesses.

  2. The sharp rise in job applicants. The COVID-19 pandemic has had two significant effects on recruiting. First, companies have been forced to embrace hiring talent in remote roles, which has increased the size of the global talent pool for most jobs inside a tech firm. Second, the increase in available talent has meant that the average number of job applications has risen dramatically. This shift from a candidate-driven market to an employer-driven one means that selecting signal from noise is increasingly becoming a challenge even for early companies with a less-established talent brand.

  3. Better designed, more affordable products on the market. For a long time, talent assessment software has been largely inaccessible to noncorporate clients. Academic user interfaces and off-putting candidate experiences has meant that many scientifically robust tools simply haven’t been able to capture the attention of tech and product-obsessed buyers. Additionally, many tools that require add-on consultancy or specialist training to administer and interpret are simply out of range of early-stage budgets. With new entrants to the assessment market that have automation, product design and compliance at their core, scale-ups will be able to justify spending in this area and perceptions will change as they become essential SaaS products in their team’s operating toolkits.

As these outside factors continue to push hiring toward a more evidence-based approach, businesses must prioritize making these changes to their hiring practices. While unstructured interviews might feel most natural, they’re perilous for accurate talent selection and while the conversation might be nice, they create noise that does nothing for making smart, accurate decisions based on what really matters.

Instinctive feelings and “going with your gut” in hiring should be treated with caution and decisions should always be based on role-relevant evidence you pinpoint. Emerging companies looking to set a strong team foundation shouldn’t risk the redundancies and biases created by subjective hiring decisions.

Brazil’s Black Silicon Valley could be an epicenter of innovation in Latin America

By Walter Thompson
Paulo Rogério Nunes Contributor
Paulo is the co-founder of Vale do Dendê (Dende Valley) and AFAR Ventures, a global diversity and inclusion creative and consulting agency that identifies opportunities for multinational brands, corporations and investors in emerging markets.
Tara Sabre Collier Contributor
Tara Sabre Collier is an early-stage impact investor with more than 15 years of experience at the intersection of economic development, social entrepreneurship and impact investment. She is a Visiting Fellow of Oxford University where she teaches and writes about impact investing, diversity and equity.

Over the last five years, Brazil has witnessed a startup boom.

The main startups hubs in the country have traditionally been São Paulo and Belo Horizonte, but now a new wave of cities are building their own thriving local startup ecosystems, including Recife with Porto Digital hub and Florianópolis with Acate. More recently, a “Black Silicon Valley” is beginning to take shape in Salvador da Bahia.

While finance and media are typically concentrated in São Paulo and Rio de Janeiro, Salvador, a city of three million in the state of Bahia, is considered one of Brazil’s cultural capitals.

With an 84% Afro-Brazilian population, there are deep, rich and visible roots of Africa in the city’s history, music, cuisine and culture. The state of Bahia is almost the size of France and has 15 million people. Bahia’s creative legacy is quite clear, given that almost all the big Brazilian cultural patrimonies have their roots here, from samba and capoeira to various regional delicacies.

Many people are unaware that Brazil has the largest Black population in any country outside of Africa. Like counterparts in the U.S. and across the Americas, Afro-Brazilians have long struggled for socio-economic equity. As with counterparts in the United States, Brazil’s Black founders have less access to capital.

According to research by professor Marcelo Paixão for the Inter-American Development Bank, Afro-Brazilians are three times more likely to have their credit denied than their white counterparts. Afro-Brazilians also have over twice the poverty rates of white Brazilians and only a handful of Afro-Brazilians have held legislative positions, despite comprising more than 50% of the population. Not to mention, they make up less than 5% of the top level of the top 500 companies. Compared with countries like the United States or the United Kingdom, the racial funding gap is even more stark as more than 50% of  Brazil’s population is classified as Afro-Brazilian.

Bahia could be an epicenter of innovation in Latin America

Salvador (Bahia’s capital) is the natural birthplace of Brazil’s Black Silicon Valley, which largely centers around a local ecosystem hub, Vale do Dendê.

Vale do Dendê coordinates with local startups, investors and government agencies to support entrepreneurship and innovation and runs startup acceleration programs specifically focusing on supporting Afro-Brazilian founders. The Vale do Dendê Accelerator organization has already been in the spotlight at international and national publications because of its innovative work in bringing startup and tech education from mainstream to traditionally underserved communities.

In almost three years, the accelerator has supported 90 companies directly that cut across various industries, with high representation from the creative and social impact sectors. Almost all of the companies have achieved double-digit growth and various companies have gone on to raise further funding or corporate backing. One of the first portfolio companies, TrazFavela, a delivery app that focuses on linking customers and goods from traditionally marginalized communities, was supported by the accelerator in 2019. Despite the lockdown, the business grew 230% between the period of March and May after incubation and recently signed an agreement for further support and investment from Google Brasil.

There is a clear recognition of the business case for Afro-Brazilian businesses. Another company supported in the beginning with mentoring by Vale do Dendê is Diaspora Black (which focuses on Black culture in the tourism sectors). It attracted backing from Facebook Brasil and grew 770% in 2020.

The same is true for AfroSaúde, a health tech company focused on low-income communities with a new service to prevent COVID-19 in favelas (urban slums, which incidentally have high Black representation). The app now has more than 1,000 Black health professionals on its platform, creating jobs while addressing a health crisis that had been tremendously racialized.

We’re at the brink of a renaissance here in Bahia

Despite Brazil’s challenging economic situation, large national and global companies and investors are taking notice of this startup boom. Major IT company Qintess has come on board as a major sponsor to help Salvador become the leading Black tech hub in Latin America.

The company announced an investment of around 10 million reais (nearly $2 million USD) over the next five years in Black startups, including a collaboration with Vale do Dendê to train around 2,000 people in tech and accelerate more than 500 startups led by Black founders. Also, in September, Google launched a 5 million reais (around $1 million USD) Black Founders Fund with the support of Vale do Dendê to boost the Afro-Brazilian startup ecosystem.

There is no doubt that the new wave of innovation will come from the emerging markets, and the African Diaspora can play an important role. With the world’s largest African diaspora population in the hemisphere, Brazil can be a major leader on this. Vale do Dendê is keen to build partnerships to make Brazil and Latin America a more representative startup and creative economy ecosystem.

Trump’s latest immigration restrictions are bad news for American workers

By Walter Thompson
Jay Srinivasan Contributor
Jay Srinivasan is co-founder and CEO of atSpoke.

I’m an immigrant, and since arriving from India two decades ago I’ve earned a Ph.D., launched two companies, created almost 100 jobs, sold a business to Google and generated a 10x-plus return for my investors.

I’m grateful to have had the chance to live the American dream, becoming a proud American citizen and creating prosperity for others along the way. But here’s the rub: I’m exactly the kind of person that President Trump’s added immigration restrictions that require U.S. companies to offer jobs to U.S. citizens first and narrowing the list of qualifications to make one eligible for the H-1B visa, is designed to keep out of the country.

In tightening the qualifications for H-1B admittances, along with the L visas used by multinationals and the J visas used by some students, the Trump administration is closing the door to economic growth. Study after study shows that the H-1B skilled-worker program creates jobs and drives up earnings for American college grads. In fact, economists say that if we increased H-1B admittances, instead of suspending them, we’d create 1.3 million new jobs and boost GDP by $158 billion by 2045.

Barring people like me will create short-term chaos for tech companies already struggling to hire the people they need. That will slow growth, stifle innovation and reduce job creation. But the lasting impact could be even worse. By making America less welcoming, President Trump’s order will take a toll on American businesses’ ability to attract and retain the world’s brightest young people.

Consider my story. I came to the United States after earning a degree in electrical engineering from the Indian Institute of Technology (IIT), a technical university known as the MIT of India. The year I entered, several hundred thousand people applied for just 10,000 spots, making IIT significantly more selective than the real MIT. Four years later, I graduated and, along with many of the other top performers in my cohort, decided to continue my studies in America.

Back then, it was simply a given that bright young Indians would travel to America to continue their education and seek their fortune. Many of us saw the United States as the pinnacle of technological innovation, and also as a true meritocracy — somewhere that gave immigrants a fair shake, rewarded hard work and let talented young people build a future for themselves.

I was accepted by 10 different colleges, and chose to do a Ph.D. at the University of Illinois because of its top-ranked computer science program. As a grad student, I developed new ways of keeping computer chips from overheating that are now used in server farms all over the world. Later, I put in a stint at McKinsey before launching my own tech startup, an app-testing platform called Appurify, which Google bought and integrated into their Cloud offerings.

I spent a couple of years at Google, but missed building things from scratch, so in 2016 I launched atSpoke, an AI-powered ticketing platform that streamlines IT and HR support. We’ve raised $28 million, hired 60 employees and helped companies including Cloudera, DraftKings and Mapbox create more efficient workplaces and manage the transition to remote working.

Stories like mine aren’t unusual. Moving to a new country takes optimism, ambition and tolerance for risk — all factors that drive many immigrants to start businesses of their own. Immigrants found businesses at twice the rate of the native born, starting about 30% of all new businesses in 2016 and more than half of the country’s billion-dollar unicorn startups. Many now-iconic American brands, including Procter & Gamble, AT&T, Google, Apple, and even Bank of America, were founded by immigrants or their children.

We take it for granted that America is the destination of choice for talented young people, especially those with vital technical skills. But nothing lasts forever. Since I arrived two decades ago, India’s tech scene has blossomed, making it far easier for kids to find opportunities without leaving the country. China, Canada, Australia and Europe are also competing for global talent by making it easier for young immigrants to bring their talent and skills, often including an American education, to join their workforces or start new businesses.

To shutter employment-based visa programs, even temporarily, is to shut out the innovation and entrepreneurialism our economy desperately needs. Worse still, though, doing so makes it harder for the world’s best and brightest young people to believe in the American dream and drives many to seek opportunities elsewhere. The true legacy of Trump’s executive order is that it will be far harder for American businesses to compete for global talent in years to come — and that will ultimately hamper job creation, slow our economy and hurt American workers.

Dear Sophie: I came on a B-1 visa, then COVID-19 happened. How can I stay?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.


Dear Sophie:

I’m currently in the U.S. on a business visitor visa. I arrived here in early March just before the COVID-19 pandemic began here to scope out the U.S. market for expanding the startup I co-founded in Bolivia a few years ago.

I had only planned to stay a couple months, but got stuck. Now my company has some real opportunities to expand. How can I stay and start working?

— Satisfied in San Jose

Hey, Satisfied!

Appreciative for the jobs you’ll be creating in the U.S. since you desire to remain in the U.S. and expand your startup. The U.S. economy greatly benefits from entrepreneurs like you who come here to innovate. Since you’re already in the U.S., you may have options to change your status without departing.

If you were granted a stay of six months when you were admitted most recently with your B-1 visitor visa, you can seek an extension of status for another six months. There are additional alternatives we can explore that would allow you work authorization. For more details on some of the options I’ll discuss here and for additional visa and green card options for startup founders, check out my podcast on “What is U.S. Startup Founder Immigration? A Step-By-Step Guide for Beginners.”

Because most green cards (immigrant visas) take longer than nonimmigrant (temporary) visas, a conservative strategy to pursue would be to find another temporary nonimmigrant status (what is often nicknamed a “visa”) — rather than a green card, which takes longer — that will allow you to create and grow your startup in the U.S. without having to return to Bolivia.

Should you replace your developer portal with a hybrid integration platform?

By Walter Thompson
Peter Kreslins Contributor
Peter Kreslins is co-founder and CTO of Digibee, a leader in holistic and agile approaches to systems integration.

The concept of a developer portal is to provide the necessary technical information to configure and manage the communication between an API and both internal and external systems. Originally, it was not thought of as a business-generating tool for companies that adopt them. Rather, it was an interface between APIs, SDKs and other digital tools and their administrators.

However, over time, many developer portal elements have caused friction for partners and resulted in higher costs for the company providing the data through APIs.

An alternative option to replace a developer portal is a Hybrid Integration Platform (HIP), a simple system connection solution that has the potential to generate more business through pairing ecosystems directly, efficiently and at a lower cost.

Fixing potential developer portal problems

The leading cause of friction within a developer portal is the amount of time it takes to create and support it. Quite often, an integration is delayed because the company providing the API is stuck waiting for support from the people they are working with.

To fulfill the demand for consumers in different stages of maturity, companies providing APIs later realized they needed to provide more data, new business cases and different mappings and transformations.

Once the portal and APIs adapt to the system, three key factors are necessary to provide a good user experience in the developer portal:

  1. Complete and easy-to-use documentation.
  2. Actionable and effective solution options.
  3. Quick response time.

Frequently, isolated and disconnected business challenges complicate developer portal implementations. To avoid such challenges, you should address these questions before the implementation process takes place:

  1. How can you ensure the business will benefit from the connection with partners, suppliers and customers?
  2. Is it possible to become more efficient, have lower integration costs and improve implementation and adoption times for technological solutions?
  3. How is innovation unlocked when previously unavailable data and services are made internally available?

When approaching a systems integration, it’s essential to develop a solution that considers business results first, before simplifying or removing any technical issues. Fixing predicted issues before they become problems only wastes time and takes the focus off the goal of making your business more efficient and profitable. Yet, many times we see the opposite happen — businesses tend to spend too much time fixing problems before they even occur.

If the ad industry is serious about transparency, let’s open-source our SDKs

By Walter Thompson
Erick Fang Contributor
Erick Fang is the chief executive officer of Mintegral, where he oversees management, customer relationships and product development for this global mobile advertising platform.

Year after year, a lack of transparency in how ad traffic is sourced, sold and measured is cited by advertisers as a source of frustration and a barrier to entry in working with various providers. But despite progress on the protection and privacy of data through laws like GDPR and COPPA, the overall picture regarding ad-marketing transparency has changed very little.

In part, this is due to the staggering complexity of how programmatic and other advertising technologies work. With automated processes managing billions of impressions every day, there is no universal solution to making things more simple and clear. So the struggle for the industry is not necessarily a lack of intent around transparency, but rather how to deliver it.

Frustratingly, evidence shows that the way data is collected and used by some industry players has played a large part in reducing people’s trust in online advertising. This is not a problem that was created overnight. There is a long history and growing sense of consumer frustration with the way their data is being used, analyzed and monetized and a similar frustration by advertisers with the transparency and legitimacy of ad clicks for which they are asked to pay.

There are continuing efforts by organizations like the IAB and TAG to create policies for better transparency such as ads.txt. But without hard and fast laws, the responsibility lies with individual companies.

One relatively simple yet largely spurned practice that would engender transparency and trust for the benefit of all parties (brands, consumers and ad/marketing providers) would be for the industry to come together and have all parties open their SDKs.

Why open-sourcing benefits advertisers, publishers and the ad industry

Open-source software is code that anyone is free to use, analyze, alter and improve.

Auditing the code and adjusting the SDKs functionality based on individual needs is a common practice — and so too are audits by security companies or interested parties who are rightly on the lookout for app fraud. By showing exactly how the code within the SDK has been written, it is the best way to reassure developers and partners that there are no hidden functions or unwanted features.

Everyone using open-source SDKs can learn exactly how it works, and because it is under an open-source license, anyone can suggest modifications and improvements in the code.

Open source brings some risks, but much bigger rewards

The main risk from opening up an SDK code is that third parties will look for ways to exploit it and insert their own malicious code, or else look at potential vulnerabilities to access back-end services and data. However, providers should be on the lookout and be able to fix the potential vulnerabilities as they arise.

As for the rewards, open-sourcing engenders trust and transparency, which should certainly translate into customer loyalty and consumer confidence. After all, we are all operating in a market where advertisers and developers can choose who they want to work with — and on what terms.

Selfishly but practically speaking, opening SDKs can also help companies in our industry protect themselves from others’ baseless claims that are simply intended to promote their products. With open standards, there are no unsubstantiated, false accusations intended for publicity. The proof is out there for everyone to see.

How ad tech is embracing open source

In the ad tech space, companies such as MoPub, Appodeal and AppsFlyer are just a few that have already made some or all of their SDKs available through an open-source license.

All of these companies have decided to use an open-source approach because they recognize the importance of transparency and trust, especially when you are placing the safety and reputation of your brand in the hands of an algorithm. However, the majority of SDKs remain closed.

Relying on forward-thinking companies to set their own transparency levels will only take our industry so far. It’s time for stronger action around trust and data transparency. In the same way that GDPR and COPPA have required companies to address privacy and, ultimately, to have forced a change that was needed, open-sourcing our SDKs will take the ad-marketing space to new heights and drive new levels of trust and deployment with our clients, competitors, legislators and consumers.

The industry-wide challenge of transparency won’t be solved any time soon, but the positive news is that there is movement in the right direction, with steps that some companies are already taking and others can easily take. By implementing measures to ensure brand-safe placements and helping limit ad fraud; improving relationships between brands, agencies, and programmatic partners; and bringing clarity to consumer data use; confidence in the advertising industry will improve and opportunities will subsequently grow.

That’s why we are calling on all ad/marketing companies to take this step forward with us — for the benefit of our consumers, brands, providers and industry at large — to embrace open-source SDKs as the way to engender trust, transparency and industry transformation. In doing so, we will all be rewarded with consumers who are more trusting of brands and brand advertising, and subsequently, brands who trust us and seek opportunities to implement more sophisticated solutions and grow their business.

How startups should budget in uncertain times 

By Walter Thompson
Isaac Roth Contributor
Issac Roth is a seasoned entrepreneur who advises founders on open source technology and keeping communities engaged. Over this career, he’s created and sold multiple enterprise software companies and stays active as an advisor and investor.
More posts by this contributor

I was the archetypal startup CEO: I paused my degree at Stanford to start a company, and after it failed I found myself needing to preserve cash to make student loan payments.

With an old Nissan Sentra and roommates in Menlo Park, my biggest variable cost was food. So it was ramen every night. On a good week, I might have had some sushi on Friday night and if I’d managed to come in under budget somehow (someone’s parents bought dinner) I could maybe splurge again on Saturday with friends.

My guiding principle at this time is surely familiar: Control burn until income streams are more predictable. Many startups find themselves in a similar position these days: ramen or sushi?

Some businesses are thriving during COVID-19 times, but will it last? Take online learning tools: Everybody needs online learning at the moment. When in-person reopens, probably some amount of learning will stay online since we all learned how to do it, but likely not 100%. Worse than not knowing what the percentage will be is the constant variation across geography, segment and vertical. It’s not that different from the current situation for me in San Francisco: If I want to find somewhere to buy ramen or sushi, I first have to check which spots are even open before navigating their constantly changing hours and menus.

Startup budgeting looks a bit like that now. Key assumptions we used for planning — already prone to some variation in a startup — are more volatile. Conversion rate from MQL to SQL, how many decision-makers need to approve a contract, leads generated per event (and what is an event these days), net renewal rates — these factors are all changing and they’re changing differently by customer segment, by geography and by product category. The new normal is highly dynamic.

Navigate through the uncertainty (and reevaluate quarterly)

How can we budget through this? Everyone replanned in April. Plan for a similar cycle every quarter. “Are we at a new normal? How do we know? Do we feel confident about that?”

In addition to the usual factors companies use to make predictions on metrics — things like growth rate and conversion rate — now we also have to consider a variety of outside factors: How the current cycle has impacted customers and prospects, how they’re readjusting budgets and their approach to unpredictability over the coming months. It might look like a new normal is establishing, but COVID flare-ups could happen again causing lockdowns, the U.S. is in an election cycle and there are prospects of further government intervention.

Here’s a recipe for deciding what to cook or whether you can go out:

Set assumptions and analyze, then reset on a regular and irregular cadence

Visit your budget each quarter. AND any month that burn falls outside of expectations, make adjustments.

We recommend quarterly because sales cycles tend to be longer than a few weeks so it’s hard to get data back and make adjustments after only two to three weeks. Here are the key inputs you should monitor:

If data is labor, can collective bargaining limit big tech?

By Walter Thompson
Erik Rind Contributor
Erik Rind is the CEO of ImagineBC and an expert in understanding the largely untapped potential that blockchain and AI technologies bring forward in order to help secure user’s data.
Matt Prewitt Contributor
Matt Prewitt is president of RadicalxChange Foundation. He is also an attorney and a blockchain industry advisor.

There are plenty of reasons to doubt that the House Judiciary Committee’s antitrust report will mark a turning point in the digital economy. In the end, it lacked true bipartisan support. Yet we can still marvel at the extent of left-right agreement over its central finding: The big tech companies wield troublingly great power over American society.

The bigger worry is whether the solutions on the table cut to the heart of the problem. One wonders whether empowered antitrust agencies can solve the problem before them — and whether they can keep the public behind them. For the proposition that many Facebooks would be better than one simply doesn’t resonate.

There are good reasons why not. Despite all their harms, we know that whatever benefits these platforms provide are largely a result of their titanic scale. We are as uneasy with the platforms’ exercises of their vast power over suppliers and users, as we are with their forbearance; yet it is precisely because of their enormous scale that we use their services. So if regulators broke up the networks, consumers would simply flock toward whatever platforms had the most scale, pushing the industry toward reconsolidation.

Does this mean that the platforms do not have too much power, that they are not harming society? No. It simply means they are infrastructure. In other words, we don’t need these technology platforms to be more fragmented, we need them to belong to us. We need democratic, rather than strictly market processes, to determine how they wield their power.

When you notice that an institution is infrastructure, the usual reaction is to suggest nationalization or regulation. But today, we have good reasons to suspect our political system is not up to this task. Even if an ideal government could competently tackle a problem as complex as managing the 21st century’s digital infrastructure, ours probably cannot.

This appears to leave us in a lose-lose situation and explains the current mood of resignation. But there is another option that we seem to have forgotten about. Labor organization has long afforded control to a broad array of otherwise-powerless stakeholders over the operation of powerful business enterprises. Why is this not on the table?

A growing army of academics, technologists, and commentators are warming to the proposition that “data is labor.” In short, this is the idea that the vast data streams we all produce through our contact with the digital world are a legitimate sort of work-product — over which we ought to have much more meaningful rights than the laws now afford. Collective bargaining plays a central role in this picture. Because the reason that the markets are now failing (to the benefit of the Silicon Valley giants) is that we are all trying to negotiate only for ourselves, when in fact the very nature of data is that it always touches and implicates the interests of many people.

This may seem like a complicated or intractable problem, but leading thinkers are already working on legal and technical solutions.

So in some sense, the scale of the tech giants may indeed not be such a bad thing — the problem, instead, is the power that scale gives them. But what if Facebook had to do business with large coalitions representing ordinary peoples’ data interests — presumably paying large sums, or admitting these representatives into its governance — in order to get the right to exploit its users’ data? That would put power back where it belongs, without undermining the inherent benefits of large platforms. It just might be a future we can believe in.

So what is the way forward? The answer to this question is enabling collective bargaining through data unions. Data unions would become the necessary counterpart to big tech’s information acquiring transitions. By requiring the big tech companies to deal with data unions authorized to negotiate on behalf of their memberships, both of the problems that have allowed these giant tech companies to amass the power to corrupt society are solved.

Labor unions did not gain true traction until the passage of the National Labor Relations Act of 1935. Perhaps, rather than burning our political capital on breaking up the tech giants through a slow and potentially Sisyphean process, we should focus on creating a 21st century version of this groundbreaking legislation — legislation to protect the data rights of all citizens and provide a responsible legal framework for data unions to represent public interests from the bottom up.

4-year founder vesting is dead

By Walter Thompson
Jake Jolis Contributor
Jake Jolis is a partner at Matrix Partners and invests in seed and Series A technology companies including marketplaces and software.

We recently invested in a team of co-founders who had voluntarily made their own vesting longer than four years. Four-year vesting is the industry standard. Why would someone voluntarily make it longer for themselves?

Their answer: “These days, with companies taking seven to 10 years to reach exit, it would make sense for founders to be on a similar schedule.”

This matters because the four-year co-founder vesting schedule frequently harms startup founders’ interests. Sometimes it damages their startup irreparably.

A growing number of founders are starting to realize this. I talked to quite a few about this over the last two years. Mostly, the “longer-than-four-years-vesting” founders share a similar story as well as logic. Almost always they are repeat, experienced founders. Often scarred by a co-founder separation in their prior startup, they are determined to set things up smarter in their next company.

Importantly, this group of founders assumes they are going to be the ones actually building the company. They created the company. They are the company. Nobody is forcing them out. I suspect founders who already believe this about their own startup will find this post most helpful.

Given the massive implications of co-founder vesting schedules, all startup founders should consider co-founder vesting lengths more carefully and then choose what makes sense for them. You make this decision around the time of incorporation but feel the effects over the lifetime of your company.

4-year vesting schedules are anachronistic

As far back as the 1980s, the standard startup vesting schedule was four or five years, with five being more prevalent on the East Coast. Nobody seems to remember a time it was anything different. The closest I’ve gotten to a logical answer on why it’s four years today stretches back to a pre-401(k) era, from before Reagan’s tax reforms in the ’80s. Prior to then, tax rules incentivized big company pension plans to have vesting periods of at least five years.

Startups didn’t offer traditional pension plans. Instead, startups offered employees stock, vesting over four years instead of five as a competitive move. That is all moot today. It has no relevance for startup founders in 2020.

More relevantly, time from founding to exit has gone from four years in 1999 to eight years in 2020. Yet founder vesting remains stuck at four. This is dangerous.

median time to exit

Exit data from U.S. startups with minimum $1 million in venture funding. Image Credits: PitchBook

Hedging against the crash of ineptitude

Dear Sophie: How can employers hire & comply with all this new H-1B craziness?

By Walter Thompson
Sophie Alcorn Contributor
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one or two-year subscription for 50% off.


Dear Sophie:

I’ve been reading about the new H-1B rules for wage levels and defining what types of jobs qualify that came out this week. What do we as employers need to do to comply? Are any other visa types affected?

— Racking my brain in Richmond! 🤯

Dear Racking:

As you mentioned, the Department of Labor (DOL) and the Department of Homeland Security (DHS) each issued a new interim rule this week that affects the H-1B program. However, the DOL rule impacts other visas and green cards as well. These interim rules, one of which took effect immediately after being published, are an abuse of power.

The president continues to fear-monger in an attempt to generate votes through racism, protectionism and xenophobia. The fatal irony here is that companies were in fact already making “real offers” to “real employees” for jobs in the innovation economy, which are not fungible and are actually the source of new job creation for Americans. A 2019 report by the Economic Policy Institute found that for every 100 professional, scientific and technical services jobs created in the private sector in the U.S., 418 additional, indirect jobs are created as a result. Nearly 575 additional jobs are created for every 100 information jobs, and 206 additional jobs are created for every 100 healthcare and social assistance jobs.

The DOL rule, which went into effect on October 8, 2020, significantly raises the wages employers must pay to the employees they sponsor for H-1B, H-1B1 and E-3 specialty occupation visas, H-2B visas for temporary non-agricultural workers, EB-2 advanced degree green cards, EB-2 exceptional ability green cards and EB-3 skilled worker green cards.

The new DHS rule, which further restricts H-1B visas, will go into effect on December 7, 2020. DHS will not apply the new rule to any pending or previously approved petitions. That means your company should renew your employees’ H-1B visas — if eligible — before that date.

The American Immigration Lawyers Association (AILA) has formed a task force to review the rules and help with litigation. Although both the DOL and DHS rules will likely be challenged, they will likely remain in effect for some time before any litigation has an impact. They are actively seeking plaintiffs, including employees, employers and representatives of membership organizations who will be hurt by the new rules.

These 3 factors are holding back podcast monetization

By Walter Thompson
Krystina Rubino Contributor
Krystina Rubino is a marketing executive who leads the offline growth marketing practice at Right Side Up.
Grant Durando Contributor
Grant Durando is a growth marketing leader, currently consulting on podcast and offline advertising at Right Side Up.

Podcast advertising growth is inhibited by three major factors:

  • Lack of macro distribution, consumption and audience data.
  • Current methods of conversion tracking.
  • Idea of a “playbook” for podcast performance marketing.

Because of these limiting factors, it’s currently more of an art than a science to piece disparate data from multiple sources, firms, agencies and advertisers, into a somewhat conclusive argument to brands as to why they should invest in podcast advertising.

1. Lack of macro distribution, consumption and audience data

There were several resources that released updates based on what they saw in terms of consumption when COVID-19 hit. Hosting platforms, publishers and third-party tracking platforms all put out their best guesses as to what was happening. Advertisers’ own podcast listening habits had been upended due to lockdowns; they wanted to know how broader changes in listening habits were affecting their campaigns. Were downloads going up, down or staying the same? What was happening with sports podcasts, without sports?


Read part 1 of this article, Podcast advertising has a business intelligence gap, on TechCrunch.


At Right Side Up, we receive and analyze all of the available research from major publishers (Stitcher, aCast), to major platforms (Megaphone) and third-party research firms (Podtrac, IAB, Edison Research). However, no single entity encompasses the entire space or provides the kind of interactive, off-the-shelf customizable SaaS product we’d prefer, and that digitally native marketers expect. Plus, there isn’t anything published in real-time; most sources publish once or twice annually.

So what did we do? We reached out to trusted publishers and partners to gather data around shifting consumption due to COVID-19 ourselves, and determined that, though there was a drop in downloads in the short term, it was neither as precipitous nor as enduring as some had feared. This was confirmed by some early reports available, but how were we to evidence our own piecewise sample with another? Moreover, how could you invest 6-7 figures of marketing dollars if you didn’t have the firsthand intelligence we gathered and our subject matter experts on deck to make constant adjustments to your approach?

We were able to piece together trends we’re seeing that point to increased download activity in recent months that surpass February/March heights. We’ve determined that the industry is back on track for growth with a less steep, but still growing, listenership trajectory. But even though more recent reports have been published, a longitudinal, objective resource has not yet emerged to show a majority of the industry’s journey through one of the most disruptive media environments in recent history.

There is a need for a new or existing entity to create cohesive data points; a third party that collects and reports listening across all major hosts and distribution points, or “podcatchers,” as they’re colloquially called. As a small example: Wouldn’t it be nice to objectively track seasonal listening of news/talk programming and schedule media planning and flighting around that? Or to know what the demographics of that audience look like compared to other verticals?

What percentage increase in efficiency and/or volume would you gain from your marketing efforts in the channel? Would that delta be profitable against paying a nominal or ongoing licensing or research fee for most brands?

These challenges aren’t just affecting advertisers. David Cohn, VP of Sales at Megaphone, agrees that “full transparency from the listening platforms would make our jobs easier, along with everyone else’s in the industry. We’d love to know how much of an episode is listened to, whether an ad is skipped, etc. Along the same lines, having a central source for [audience] measurement would be ideal — similar to what Nielsen has been for TV.” This would also enable us to understand cross-show ad frequency, another black box for advertisers and the industry at large.

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