Data Sheet—Amazon, Google, and Microsoft Have Plenty to Celebrate Right Now

There have been times in years past that Amazon, Alphabet (read: Google), and Microsoft have had rough patches. Amazon has suffered quarters-long profit droughts. Alphabet has given its investors agita over profligate spending on non-core products. Microsoft’s growth—if not its profit engine—stalled for years, causing its stock to idle too.

The middle months of 2017 have not been one of those times for any of these companies.

Each, for their own reasons, reported anywhere from solid to spectacular earnings results Thursday. Amazon didn’t make any more money than it did the year before, but its growth resembles a startup more than the grownup it is. Alphabet’s ad machine is humming. Microsoft, a cloud computing convert, has completed the most impressive tech turnaround since Lou Gerstner taught an elephant to dance.

That these giants are charging simultaneously—throw in Twitter and Intel too—is no coincidence. Their success is the digital transformation explained. Where the action once was in high-trafficked shopping malls, print and TV advertising, and client-server software, businesses that deliver digitally rule the roost today.

This is the point in any account of Big Tech’s success where journalists insert the “to be sure” paragraph, as in, to be sure, this garish performance will draw the attention of regulators, legislators, and other haters that could ruin the fun. The New York Times and The Wall Street Journal both turned in laudable examples of the art form.

Those concerns only matter, of course, when they matter. For now, they don’t. It is party time. And what a party it is.

***

The cinema business is thinking about experimenting with dynamic pricing, as Bloomberg reported this week. Dynamic pricing—charging more when goods and services are in high demand and short supply and less when the opposite is true—isn’t new. Gasoline retailers, hoteliers, and airlines have been deploying the technique for years. Uber did it too—to great success but also with dollops of controversy largely attributed to its own stubbornness and insensitivity.

According to Bloomberg, Regal Cinemas will charge more for hits and less for flops, an intriguing concept given that the real money is in egregiously overpriced popcorn and soda, not movies.

Long live capitalism. And see you at the movies.

NEWSWORTHY

Big capital gains. As Adam noted, it was one of the busiest days ever for people who follow big tech company earnings.

If you want a few more interesting tidbits below the headlines, Microsoft said its annual run rate for its Azure cloud unit exceeded $ 20 billion for the first time. Google said pre-orders for its new Pixel 2 phones were double the number from last year and that YouTube watching on old-fashioned TV sets jumped 70% to 100 million hours a day. CFO Ruth Porat also disclosed massive cuts in spending on Google Fiber. With the Whole Foods chain now in hand, Amazon broke out sales in physical locations for the first time: $ 1.3 billion, or 5% of total sales. Intel surprised everyone with flat revenue in its PC chips unit. Stocks of all four companies rose in premarket trading on Friday. Microsoft was up 6%, Google parent Alphabet 4%, Amazon 8%, and Intel 3%.

Pre-panic mode. Fresh off its attack on the grocery business, Amazon appears closer than ever to shaking up the prescription drug market next. The e-commerce giant has obtained wholesale pharmacy licenses in at least 12 states, including Louisiana, New Jersey, and Michigan, the St Louis Post-Dispatch reported on the basis of public records searches. The fallout is already here, as CVS’s bid for Aetna is said to be motivated in part by the looming specter of Amazon’s entry.

Munch all you want, we’ll make more. With pre-orders for the iPhone X starting at midnight Pacific Time on Friday, Apple quickly ran out of phones for immediate delivery on November 3. Delays were out to six weeks on Friday morning, though according to some reports, wireless carrier Sprint still had units available for next week for Sprint customers.

Horse, meet barn door. After Russia used social networks to meddle in the 2016 election, Twitter said it would ban advertisements from any accounts owned by Russian news outlets Russia Today and Sputnik. The bans are part of Twitter’s “ongoing commitment to help protect the integrity of the user experience,” the company said.

Wrist slap. HR services startup Zenefits and co-founder Parker Conrad will pay almost $ 1 million, but won’t have to make an admission of guilt to settle charges they misled investors. Federal regulators said the company’s failure to disclose it was not in compliance with state insurance laws constituted “false and misleading statements and omissions.”

Momentum play. The tech IPO train is still steaming forward. Cloud security startup Zscaler has made a confidential filing to go public, TechCrunch reported. The leak comes just as cybersecurity firm ForeScout Technologies priced its IPO at $ 22. It starts trading on Friday under the symbol “FSCT.”

Conspiracy theories. The National Archives released almost 3,000 documents connected to the assassination of President Kennedy and put them all online. Spoiler alert: the Russians were just as surprised as everyone else by Lee Harvey Oswald’s shooting of the president.

FOOD FOR THOUGHT

We are, unfortunately, beset by news of the continuing problems of discrimination, bias, and harassment in the workplace. One related problem feeding the culture of abuse is the lack of diversity, particularly in leadership roles, at many companies. Consultants Jack Zenger and Joseph Folkman have studied the problem and put a lot of the blame at the top: leaders who aren’t good self-critics of their own biases.

In fact, their surveys found that leaders who were found to be lowest rated at valuing diversity were more likely to think they were doing a great job at inclusiveness:

The implications of this data are: leaders are not good judges of their own effectiveness on valuing diversity; and those leaders who are poorest fail to see the problem, while those who are the best don’t realize their skill and capability. This phenomenon is not limited to inclusiveness — the Dunning-Kruger effect, for example, explains that unskilled people are particularly prone to thinking they are more skilled than they are. Conversely, our research has found that many of the most skilled leaders are too humble and modest in assessing their strengths. Nonetheless, we find this result particularly disturbing when we see it in the context of inclusivity. While a person’s effectiveness with any skill always needs to be based on the evaluations of others, rather than self-perception, it seems especially true in this case. Inclusivity is particularly in the eye of the beholder. You might intend to be inclusive, and even think you are inclusive, but your impact on others might be very different.

FOR YOUR WEEKEND READING PLEASURE

A few interesting longer reads I came across that are suitable for your weekend reading pleasure.

Love in the Time of Robots
In a secluded room at IRL, a collection of androids is stored and maintained: his hardest workers. Arranged in this space today, with its blackout curtains, thin corporate carpeting, and shelves cluttered with cables and monitors and an array of wigs, is a pair of his replicas of grown women. They are models of the Geminoid F series. The name is a play off geminus (Latin for “twin”), a reminder that their human counterparts exist somewhere in the world.

Three MacBook Mistakes: Will Apple Correct Course?
Apple’s not a company that backtracks easily. It’s got a lot of pride and a reputation for moving forward. And yet every so often the company makes a decision that it thinks is right and is ultimately proven to be completely wrong. In 2008, Apple removed FireWire from the MacBook, only to put it back in 2009. In 2009 the iPod Shuffle went buttonless, only to revert to its previous buttony design in 2010. The third-generation iPod, with its row of touch-sensitive controls, was a similar design cul-de-sac. And the most recent example is the Mac Pro, which Apple introduced to fanfare, but ultimately admitted was a mistake.

The Scientists Persuading Terrorists to Spill Their Secrets
The interviewer wanted him to provide an account of his plan, and to reveal with whom, if anyone, he has been conspiring. But the detainee – we will call him Diola – refused to divulge any information. Instead, he expounded grandiloquently on the evils of the British state for 42 minutes, with little interruption. When the interviewer attempted questions, Diola responded with scornful, finger-jabbing accusations of ignorance, naivety and moral weakness: “You don’t know how corrupt your own government is – and if you don’t care, then a curse upon you.”

When the Revolution Came for Amy Cuddy
Cuddy became famous in her field for a 2010 study about the effects of “power poses.” The study found that subjects who were directed to stand or sit in certain positions — legs astride, or feet up on a desk — reported stronger “feelings of power” after posing than they did before. Even more compelling than that, to many of her peers, was that the research measured actual physiological change as a result of the poses: The subjects’ testosterone levels went up, and their cortisol levels, which are associated with stress, went down.

BEFORE YOU GO

They’re saying it looks like a Pokemon monster, but Sinosauropteryx was a real dinosaur with feathers and the “bandit mask” shading of a raccoon or badger, researchers studying its 120-million-year-old fossils say. Somebody tell Wes Anderson. Maybe the sequel to Fantastic Mr. Fox can feature dinosaurs, too?

Tech

Cloud computing drives massive growth for big U.S. tech firms

SAN FRANCISCO (Reuters) – Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O), Alphabet Corp’s (GOOGL.O) Google and Intel Corp (INTC.O) are all putting their chips on the cloud computing business, and it is booming.

FILE PHOTO – A sign marks the Microsoft office in Cambridge, Massachusetts, U.S. January 25, 2017. REUTERS/Brian Snyder/File Photo

All four companies posted stellar quarterly earnings on Thursday, showing the strength of the shift in corporate computing away from company-owned data centers and to the cloud.

Microsoft’s Azure business nearly doubled, with year-over-year growth of 90 percent. The company does not break out revenue figures for Azure, but research firm Canalys estimates it generated $ 2 billion for Microsoft.

“The move to the cloud was one we felt Microsoft could always benefit from, and they’re showing us that they can,” said Kim Forrest, vice president and senior equity analyst at Fort Pitt Capital Group, a portfolio management firm.

Highlighting the quarter for Microsoft was a deal securing retailer Costco (COST.O) as an Azure customer. That came just two months after the close of Amazon’s acquisition of grocery chain Whole Foods, which has heightened unease among retail and e-commerce companies about working with Amazon, said Ed Anderson, an analyst with Gartner.

Tim Green, analyst with the Motley Fool, said Amazon could find it needs to make changes at some point at Amazon Web services. “Spinning off AWS at some point down the road might become necessary to prevent an exodus of customers,” he said.

Amazon Web Services is still delivering far more revenue than any of its peers. For the quarter, AWS raked in nearly $ 4.6 billion — a year-over-year increase of 42 percent. AWS may have missed out on Costco, but the company secured deals with Hulu, Toyota Racing Development, and most notably, General Electric.

Google Cloud Platform landed deals with the likes of department store retailer Kohl’s and payments processor PayPal. Like Microsoft, Alphabet does not break out revenue for Google Cloud Platform, but Canalys estimates the business generated $ 870 million in the quarter, up 76 percent year-over-year.

FILE PHOTO – The logo of Amazon is seen at the company logistics center in Lauwin-Planque, northern France, February 20, 2017. REUTERS/Pascal Rossignol/File Photo

Google Chief Executive Officer Sundar Pichai said Google Cloud Platform is a top-three priority for the company. He said Google plans to continue expanding its cloud sales force.

Canalys estimates the cloud computing market at $ 14.4 billion for the third quarter of 2017, up 43 percent from a year prior. Amazon holds 31.8 percent of the market, followed by Microsoft at 13.9 percent and Google with 6 percent, according to Canalys’ estimates.

The “cloud market will keep growing faster than most of the traditional information technology segment, as the market is still in the developing stage,” said Daniel Liu, research analyst with Canalys.

FILE PHOTO – The Google logo is pictured atop an office building in Irvine, California, U.S. August 7, 2017. REUTERS/Mike Blake/File Photo

Reflecting the overall growth of the market was the strong performance by Intel, which sells processors and chips to cloud vendors. In July, Intel launched its new Xeon Scalable Processors, which drove 7 percent year-to-year growth for the company’s data center group.

The big three cloud vendors also benefit from the decision by many enterprises to build their applications using more than one cloud vendor. Retailers Home Depot Inc (HD.N) and Target Corp (TGT.N), for example, told Reuters they use a combination of cloud providers.

“Our philosophy here is to be cloud agnostic, as much as we can,” said Stephen Holmes, a spokesman for Home Depot, which uses both Azure and Google Cloud Platform.

Some analysts expect cloud services growth to slow over time as competition increases.

Amazon, for instance, has said that price cuts and new products with lower costs on average are a core part of its cloud business. Additionally, Amazon Web Services saw usage growth outpacing that of revenue growth, said Amazon Chief Financial Officer Brian Olsavsky.

“Going forward, cloud services will become more of a commodity, and the prices will quickly compress,” said Adam Sarhan, CEO of 50 Park Investments, an investment advisory service. “For now though, it’s a great business with plenty of room for all to grow.”

Reporting by Salvador Rodriguez; Additional reporting by Jeffrey Dastin and Paresh Dave; Editing by Leslie Adler; Editing by Jonathan Weber

Our Standards:The Thomson Reuters Trust Principles.

Tech

Social Capital Will Let Data Decide Where It Invests

The firm launched a data-focused investment platform, called “capital-as-a-service.”

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.

On Monday, we talked about how SoftBank’s Masayoshi Son is capitalizing on the “information revolution” with his monster investment fund.“Those who rule data will rule the entire world,” he said. On Tuesday, MasterCard’s CEO Ajay Banga said at a conference in Saudi Arabia that “data is the new oil.” The theme continues nicely for the third day in a row after Social Capital’s launch of its new data-focused investment platform.

On Wednesday, the firm announced an operating system for early-stage investing called “capital-as-a-service.” Put simply, Social Capital will invest in startups without having to go through the process of a traditional pitch. (Which means fewer humans have to listen to pitches that start with: “Imagine a jacket, but for your legs.” Really.)

“No hoops, no $ 7 artisanal coffee chats, no designer pitch decks, no bias, no politics, no bullshit,” Ashley Carroll, the partner in charge of overseeing the project, explains in a Medium post.

Here’s how the self-serve platform works: Entrepreneurs fill out a questionnaire, submit relevant figures such as revenue and raw engagement data, and/or grant the firm access to its cloud services. Social Capital will then evaluate the company and write a check or pass and deliver feedback.

Social Capital evaluated nearly 3,000 companies during its private beta and committed to funding several dozen across 12 countries. An interesting byproduct of the data-oriented approach was that CEO demographics skewed 42% female and majority non-white. (For context, female founders received 2.19% of venture capital funding in 2016.) In an email to Term Sheet, Social Capital CEO Chamath Palihapitiya called the 42% data point “simply fucking awesome.”

It’s no surprise that the firm is taking this route. For years, Palihapitiya’s vision has been pretty clear — operational experience coupled with a focus on data. But as Social Capital begins to expand and veer toward being stage-agnostic, some people aren’t on board with the direction the firm is taking. Social Capital co-founder Mamoon Hamid abruptly departed in August to join Kleiner Perkins Caufield & Byers. The company’s third co-founder Ted Maidenberg won’t be making new investments or participating in any future funds, although he’s currently still supporting the portfolio.

In spite of the high-profile turnover, Palihapitiya seems to be hyper-focused on this data-driven approach, and he reiterated his plan to make Social Capital a full-service capital partner to the businesses it invests in throughout their lifecycles. He added:

“CaaS is designed for entrepreneurs who are either over-served or under-served by today’s venture status quo. In that first bucket: founders who prefer a low-touch, highly efficient funding process, or don’t want to give up a large chunk of ownership in their company. In the latter: founders outside Silicon Valley and the US more generally who often don’t have access to Silicon Valley-based firms, nor the networks necessary to get the right warm intro.”

Tech

GE's CEO sees more partnerships ahead for digital business

SAN FRANCISCO (Reuters) – General Electric Co (GE.N) will use more alliances to build its digital-industrial business in coming years, Chief Executive Officer John Flannery said on Wednesday, suggesting the industrial conglomerate will curb spending in that area.

Microsoft Chief Executive Satya Nadella and General Electric Chief Executive John Flannery speak at General Electric Company’s Minds + Machines conference in San Francisco, California, U.S., October 25, 2017. REUTERS/Alwyn Scott

GE is investing about $ 2.1 billion in GE Digital this year, and executives had said that amount would fall in 2018.

Flannery on Wednesday made his first direct remarks about the digital strategy since he became CEO on Aug. 1. He has begun slashing costs in other areas, including reducing staff, grounding corporate jets and axing the “Maserati benefit” of corporate cars for about 600 senior executives.

Flannery is due to unveil new financial targets on Nov. 13 and is under heavy pressure to turn GE around after the company’s third-quarter earnings and cash flow badly missed targets. GE stock is down 32 percent so far this year, while the S&P 500 index is up 14 percent,

GE’s digital strategy is built around a cloud-based software platform, known as Predix, that connects factories, power plants and other industrial equipment to computers that improve performance and predict outages.

But Predix’s limited capabilities and performance problems have caused GE to lose out to competitors such as Siemens AG (SIEGn.DE) and startups such as Uptake and C3IOT.

Flannery said on Wednesday that GE will focus on selling Predix in its own businesses: energy, oil-and-gas, aviation, healthcare, transportation and mining, as Reuters reported in August.

In other markets, “We’re going to be more selective … and do it largely through partners,” Flannery said at GE’s annual Minds + Machines conference.

FILE PHOTO: The ticker and logo for General Electric Co. is displayed on a screen at the post where it is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. on June 30, 2016. REUTERS/Brendan McDermid/File Photo

Gary Mintchell, chief executive of The Manufacturing Connection, an industrial-internet-focused research and consulting company, said GE’s strategy of using partners reflects the company’s realization that “they can’t build their own ecosystem.”

GE said it was expanding its partnership with Microsoft Corp (MSFT.O), to provide access to Microsoft applications on Predix. The specifics largely duplicated what the companies said when they first announced the deal in July 2016.

GE said Predix will be available on Azure in North America on Nov. 30, months later than the original target of the second quarter. Predix will still be available on Amazon.com Inc’s (AMZN.O) Amazon Web Services cloud platform, GE said.

GE Digital’s chief executive, Bill Ruh, on Wednesday noted a partnership with Hewlett Packard Enterprise Co (HPE.N). GE also is linking Predix with Apple Inc’s (AAPL.O) IOS operating system for iPhones and iPads.

Patrick Franklin, vice president in charge of Predix, said there was still room to improve Predix after the company held a two-month time-out this year to fix bugs, but the platform was showing near-100 percent stability.

“We are paying careful attention to quality,” he said, referring to the delay in deploying Predix on Azure.

GE executives said the company is focusing on developing apps for Predix to boost sales. GE plans to bundle applications for equipment monitoring and service technicians, both of which it bought last year.

GE said orders for Predix were rising sharply. Some customers at the event echoed that view. U.S. utility Exelon Corp (EXC.N), for instance, said it is rolling out Predix to its nuclear, gas, wind and other power plants after a two-year pilot of the system showed it worked as advertised, said Brian Hoff, director of corporate strategy and innovation at Exelon.

“If it didn’t hit its targets, we wouldn’t be moving forward,” Hoff said.

Reporting by Alwyn Scott; Editing by Leslie Adler

Our Standards:The Thomson Reuters Trust Principles.

Tech

Little Simz, "Good For What": The UK Rapper Embraces Me-First Globalization

The anatomy of a Little Simz song doesn’t offer itself up easily. On the recent “Good For What,” a whir of tough North London bristle, the rapper born Simbiatu Ajikawo contemplates early successes. “Look at young Simbi in Vogue/Look at young Simbi in Forbes,” she says in the video, merrily skating through the streets of Los Angeles. “Well someone’s gotta do it right/Someone’s gotta open doors.” As British rap has found more footing in US markets over the last handful of years, taking a bigger share in the international mainstream—partially owed to a greater cross-cultural exchange among artists themselves—Simz has come to represent how music can best travel among divergent cultures in our increasingly globalized world.

One argument, familiar to anyone privy to the nativism of Donald Trump and his ilk, contends that globalization actually dilutes local cultures. In popularizing the customs of a given community, the thinking goes, these things in some way lose their truer essence. We’ve seen that argument play out with Drake, whose ardent obsession with UK culture has granted artists like Jorja Smith, Skepta, and Giggs more mainstream visibility in North America. Simz’s rise is, in part, a rebuke to that thinking, taking the independent route with the creation of her own label: she proves that the best conduit can still be the self, even when it’s away from home.

Metaphor or not, “Good For What” finds the young Brit looking back even as she pilots forward, taking solace in the palm-treed environs of Southern California but still every bit the girl who grew up under the metal skies of Islington. The music, all backbone and unflinching emotional lucidity, may have changed locations, but it’s remained unmistakably Simz, a posture that is no mere performance. “I was made for this shit,” she declares, over Astronote’s murky, atmospheric production. And later attests: “Cause this is bigger than you thought/Thought I was finished, let me give you more.”

“More” has never been a problem for Simz. She is a covetous creator, having collaborated with artists like reggae revivalist Chronixx, Rihanna songwriter Bibi Bourelly, and soul experimentalist Iman Omari; toured with the Gorillaz; and dropped 11 projects since 2010 (a blend of albums, mixtapes, and EPs). There’s been no disconnect in Simz’s presence stateside, either. When she initiated one of the several freestyle cyphers at the BET Hip-Hop Awards in mid October, she did so as the only black woman artist hailing from the UK. With a pinch of English cool, the 23-year-old rapper spoke of her adolescence and the tirelessness it took to overcome the likelihood of turning into just another cultural data point. “Who’d thought this would happen/ teachers would tap me funny when I said I’d make it from rapping,” she offered in the minute-long verse.

Though the cypher included brash ascendants like Detroit’s Tee Grizzley and Atlanta sing-rap polymath 6lack, Simz held court like a seasoned pro: dynamic and levelheaded, if exceedingly expeditious in her layered delivery. Her authority carries little surprise to anyone who has followed the young rapper’s continued climb, gaining traction in the US since issuing her seductively ruminative E.D.G.E. EP on SoundCloud in 2014 (the breakout track “Devour” has since amassed 3.65 million streams).

Still, the most radical element of Simz’s arsenal may be her grandiosity. A song like “Good For What”—with its puffed-up moxie and tales of shrewd diligence—provides another roadway into her appeal by better refining the many avatars she dons so effortlessly, accentuating the social realities of black women. Simz’s sustained output has also allowed her to be even more elastic in her selfhood. There is a vulnerable intensity alive in her work; it satiates but jars the soul, lines so ordinary you forget how much power they hold in one’s own life. “My imperfections make me who I plan to be” she sang on “Doorway + Trust Issues,” from January’s Stillness In Wonderland (the deluxe edition, which features seven new songs including “Good For What,” releases November 4).

The final shot in the video for “Good For What” zeroes in on Little Simz, standing by herself in the middle of a nondescript LA street, the line “Look at me, once again I was made for this shit” looping in the background. The message is unmissable: no matter where she’s at, it’s best we leave the translation up to her.

More From the Author

Tech

Bitcoin Shop Coinbase Boosts Hacker Bounties to $50,000

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The surging value of bitcoin has been a boon for the San Francisco exchange Coinbase, leading to higher revenue from commissions and a flood of new customers. One downside, though, is that the stakes are higher than ever when it comes to hacking.

Now that bitcoin prices are topping $ 6,000, any cyber crook who can break through Coinbase’s digital defenses could make out like a modern day Jesse James by plundering customer accounts. That’s one reason Coinbase has decided to increase the prizes it pays under a bug bounty program–a system that rewards hackers for privately disclosing computer vulnerabilities, which in turn allows companies to patch their systems before bad guys can exploit them.

Bug bounties used to be controversial, largely because companies feared they would invite cyber-attacks. But after tech firms like Google and Facebook proved the efficacy of bug bounties, a growing number of other organizations followed suit, including more traditional firms like GM and, beginning last year, the Department of Defense.

In the case of Coinbase, the digital currency exchange last week boosted its top bounty to $ 50,000 for critical vulnerabilities, and also increased rewards for more minor vulnerabilities.

According to Coinbase’s head of security, Philip Martin, the company’s bug bounty has paid out $ 176,031 in rewards to a total of 223 researchers in the last few years.

Speaking at a San Francisco conference hosted by the bug bounty firm HackerOne, Martin also explained that bounty programs only work if a company has the rest of its security operations in order.

“Bug bounties are only productive if you have a strong internal reporting process to start with. Do it badly, and [vulnerability reports will be ignored] and you’ll make hackers angry,” he said.

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Martin also explained that even a well run bug bounty program generates more noise than signal, saying only about 11% of all reports Coinbase receives amount to an actual security vulnerability.

He added that Coinbase, like other companies, continue to receive emails from suspicious people who claim to have found a vulnerability, and will only reveal it in exchange for a few bitcoin.

“We treat it like the attempted extortion it is–and ignore it,” Martin said.

Martin also disclosed that Coinbase has yet to pay out its top prize under the bug bounty program, in part because, as he said “our security doesn’t suck.”

Securing the code on its website is just one part of the security challenge for sites like Coinbase, however. As my colleague Jen Wieczner has reported, Coinbase faces a staggering amount of fraud that arises from crooks duping customers into revealing their passwords and then robbing their accounts.

Nonetheless, for firms like Coinbase, bug bounty programs appear to be an essential part of locking down the technical part of their security operations.

Tech

How these Founders Pivoted from a Failing Startup at the Last Minute and Created a Million-Dollar Business

“Make better decisions with feedback from real people.”

This mission lies at the core of User Interviews, a startup in Cambridge, Massachusetts that gives consumers a platform to voice their opinions on new and innovative products–while getting paid for their time.

User Interviews isn’t the first company to recruit participants for market research studies, but believe their differentiation is in their technology-based approach and commitment to a world-class user experience. The website makes it easy for consumers to connect with companies running research studies that they’re interested in.

“We started this company because we saw that the most successful products are built by companies that deeply understand their customers,” said Dennis Meng, one of the co-founders of User Interviews. “We wanted to make that easier to do.”

Meng and his co-founders, Basel Fakhoury and Bob Saris, realized the importance of getting feedback from customers from their experiences working on on their first startup together. They were building a mobile app that would give travelers 24/7 access to upscale hotel concierge service. After spending a year developing the app, they launched it and were horrified to realize that nobody cared to use it. In a desperate effort to salvage the app, they started gathering as much user feedback as they could. At one point, the trio even resorted to buying refundable plane tickets just so they could go through airport security to sit and talk to travelers. After talking to hundreds of travelers, the three founders finally came to terms with the fact that their app would never take off. “If we had talked to them earlier, we would have known much sooner that our app wasn’t going to be successful.”  Luckily, based on the difficulties they encountered, the team realized there might be a huge untapped opportunity to help companies connect with consumers to gather feedback.

From the ashes of the mobile app business rose User Interviews, one of the first automated platforms for recruiting and scheduling participants for market research studies and product tests. Though User Interviews initially targeted other startups as potential clients, discussions with product managers and marketers at larger firms helped the team realize that conducting consumer studies was just as much of a struggle for well-established companies.

“I once heard someone describe running a startup as riding a bike while building it,” said Meng. “That description couldn’t have been more accurate for us. Before we even had a website, we had companies trying to pay us for our services. We had dozens of paying clients before the first version of our technology platform was complete.”

Fast forward to today – the company now counts hundreds of companies as clients, including the likes of Pinterest, DirecTV, Colgate, Yahoo, and Pandora. They’ve also paid out over $ 1 million in incentives to the consumers who have participated in their clients’ studies. However, when asked, Meng says that the most surprising thing he’s learned is that people care as much about improving the products they’re reviewing as they do about the money. “People like the money, but even more than that – they like having a voice.”

From this simple concept has grown a burgeoning industry giant, and the last few months have been exciting ones for User Interviews. They recently raised $ 1 million in a seed round led by Accomplice Ventures, which they’ve already used to hire several new employees. Over the next few years, Meng, Fakhoury, and Saris plan to introduce User Interviews to thousands of companies and millions of consumers across the country.

Tech

Facebook Is Testing This Major Change

In a handful of countries.

Facebook said on Monday it was testing the idea of dividing its News Feed in two, separating commercial posts from personal news in a move that could lead some businesses to increase advertising.

The Facebook News Feed, the centerpiece of the world’s largest social network service, is a streaming series of posts such as photos from friends, updates from family members, advertisements and material from celebrities or other pages that a user has liked.

The test, which is occurring in six smaller countries, now offers two user feeds, according to a statement from the company: one feed focused on friends and family and a second dedicated to the pages that the customer has liked.

The change could force those who run pages, everyone from news outlets to musicians to sports teams, to pay to run advertisements if they want to be seen in the feed that is for friends and family.

The test is taking place in Bolivia, Cambodia, Guatemala, Serbia, Slovakia and Sri Lanka, and it will likely go on for months, Adam Mosseri, the Facebook executive in charge of the News Feed, said in a blog post.

Mosseri said the company has no plans for a global test of the two separate feeds for its 2 billion users.

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Facebook also does not currently plan to force commercial pages “to pay for all their distribution,” he said.

Facebook, based in Menlo Park, Calif., frequently tests changes big and small as it tries to maximize the time people spend scrolling and browsing the network. Sometimes it makes changes permanent, and other times not.

Depending on how people respond, two news feeds could mean that they see fewer links to news stories. News has proved to be a tricky area for Facebook, as hoaxes and false news stories have sometimes spread easily on the network.

The test has already affected website traffic for smaller media outlets in recent days, Slovakian journalist Filip Struhárik wrote over the weekend in a post on Medium.

Publishers might need to buy more Facebook ads to be seen, he wrote: “If you want your Facebook page posts to be seen in old newsfeed, you have to pay.”

Tech

How Netflix Made 'Stranger Things' a Global Phenomenon

Not quite two years ago, Netflix launched simultaneously in 130 new countries. It now operates nearly everywhere in the world. With that expansion has come explosive international growth—along with the challenge of how best to introduce its homegrown favorites, like Stranger Things, to an audience that spans all the way to the Upside Down and back.

It’s hard to overstate how important it is to Netflix’s long-term ambitions that shows like Stranger Things “travel.” The streaming service needs to maintain a library that users will pay for year-round, and even with an original content budget pegged at $ 8 billion for 2018 it has to spend wisely to ensure it’s producing content that plays as well in Canada as it does in Cameroon. Or, from another angle: Not even Netflix has the budget to invest heavily in hyperlocal content for Estonia.

Making movies or series that play well overseas depends to a certain extent on quality, of course, and Netflix has long maintained that geography is a poor indicator of what people will actually watch. But for a show like Stranger Things—which is an Emmy-nominated and critically-praised show in the US—to succeed abroad, Netflix has to translate its genius to as many markets as possible. Literally.

Found in Translation

The world contains thousands of languages. Figuring out the proper translation for “Demogorgon” in each of them would be singularly impractical. But for the 20 languages in which Netflix does provide subtitles—and the large number in which it dubs shows—it sweats the small stuff.

That means the creation of a Key Names and Phrases tool, a sprawling spreadsheet in which teams of freelancers and vendors input translations in the name of consistency. Does the show include a fictional location? A catchphrase? A sci-fi item that has no real-world corollary? All those things go in the KNP, allowing Netflix to know how they read in Greek, Spanish, Swedish, Vietnamese, and so on.

Some translations are fairly straightforward; a university becomes a universidad for Spanish-language audiences, for example. Others, though, require substantially more legwork. Especially for a ’80s-reference-heavy series like Stranger Things that is fairly out of step with the present.

“It’s a really deep dive into what are the elements of the story, what are the specifics of the story, that we need to make sure we are translating the same way that things were translated, say, 30 years ago,” says Denny Sheehan, the director of Netflix’s content localization and quality control efforts. “We compile all of that into essentially a show bible, and we give that to all of our translators, all of our dub studios, so they can reference that.”

Take that Demogorgon, the big bad the Stranger Things kids named after a Dungeons & Dragons demon prince. To ensure that connection transcended language barriers, Sheehan’s team dug into old D&D materials to nail down how various cultures translated “Demogorgon” in the mid-1970s. Similar efforts were made to track down decades-old marketing materials for, yes, Eggo waffles, which play an outsized role in Season 1.

That focus on consistency goes beyond the words themselves to the voice actors saying them. Netflix says it looks for people who sound like the original cast but also, as Sheehan puts it, “embody the spirit of the character and tone.” No real surprise there. But the company also aims for voices that can work across titles. The actress who voices Winona Ryder’s Joyce Byers in Stranger Things, for instance, also provides the dubs for Lydia Deetz in Beetlejuice, and Mina Harker in Bram Stoker’s Dracula.

“We think of the subtitles and dubs as enabling access to the story,” Sheehan says. “Our goal is to use creative intent as the North Star, to really create culturally relevant and resonant translations for the continent that have a wide global appeal.”

Netflix

Netflix

A Global Concern

That’s increasingly a business imperative as well.

“Localization is very important internationally,” says Tony Gunnarsson, a streaming analyst with Ovum who follows Netflix closely. “European audiences are very familiar with US television and movies but the expectation is always to have local-language subtitles. This is a must-have everywhere.”

Netflix has already reaped some of those gains, says Todd Yellin, the company’s VP of product innovation.

“Before you localize it, you have the early adopters who speak English well enough that they can use the service in those countries,” Yellin says. “But after you localize you see substantially more growth in those countries.”

Netflix’s global accommodations go beyond subtitles and dubs, of course. The company has advanced efforts in recent years to make its service more usable in emerging markets, countries where bandwidth may be limited or unreliable. That includes the recent introduction of downloadable content, which lets users grab an episode while on Wi-Fi to watch on the go.

“What we’re doing is trying to do things like, when people are watching over a cellular network, how to get better quality for fewer bits of data, how to avoid rebuffering in more challenging internet scenarios, like you often hit in India or Malaysia or the Philippines and so forth,” says Yellin. “Those markets are very important for the expansion of Netflix.”

Of course, those technological and linguistic solutions don’t mean much if it’s a show people don’t want to watch in the first place. It’s no accident that Netflix has a multi-series deal with Marvel, whose stable of comic book characters has built-in international cache. Or that this year it invested heavily in anime, a genre that demonstrably transcends both geography and demographics.

As a Spielbergian genre throwback, Stranger Things seems similarly built for international success. The stars and creators may have been relative unknowns before the series debuted, but its tropes are universal. And it’s not just Spielberg; fans of David Lynch and Stand By Me will find familiar nuggets as well.

“My hunch is that the commercial success results from attracting several different audiences for each of which it is a cult show,” says Nigel Morris, author of The Cinema of Spielberg: Empire of Light and a film studies professor at the University of Lincoln. “All of the allusions make it a kind of interactive game as people ‘spot the references’, feel flattered by their ability to do so but also curious about those they realize they must be missing, and share them through social networking, together with speculation about what is going on and what the various clues might mean.”

The result? A show that went viral first in Canada, and gradually spread to find enthusiasts around the world. In one month, Netflix users in 190 countries watched Stranger Things, and viewers in 70 of those nations became devoted fans. A handful of people tuned in from Bhutan, and from Chad. In a first for the streaming service, someone watched Season 1 in Antarctica.

Stranger Things, too, is just one show. The process repeats itself across thousands of hours of content. Netflix already made shows based on what the world wanted to watch; the hard part, now, is presenting it in a way that people can understand, no matter where they live or what language they speak.

Tech

Cisco nears deal to acquire BroadSoft: source

SAN FRANCISCO (Reuters) – Cisco Systems Inc, the world’s largest networking gear manufacturer, is nearing a deal to buy U.S. telecommunications software firm BroadSoft Inc for close to $ 2 billion, a person familiar with the matter said on Sunday.

A newly installed phone made by Cisco is shown in San Diego, California, U.S., April 17, 2017. REUTERS/Mike Blake

The deal, which comes after Reuters first reported in August that BroadSoft was exploring a sale, would allow Cisco to further diversify away from its stagnating switches and routers business by giving it a stronger foothold in selling unified communications software to big telecommunications firms.

If deal negotiations are completed successfully, Cisco’s agreement to buy BroadSoft could be announced as early as Monday, the source said, asking not to be identified because the deal discussions are confidential.

Cisco declined to comment. BroadSoft did not immediately return a request for comment. Bloomberg News reported earlier on Sunday that Cisco was close to a deal to acquire BroadSoft.

With its traditional business of making switches and routers seeing revenue declines, Cisco, like other legacy technology firms, has been focusing on high-growth areas such as security, the Internet of Things and cloud computing.

The BroadSoft deal would be Cisco’s second major acquisition this year following the $ 3.7 billion acquisition of privately-held AppDynamics Inc in March.

BroadSoft shares had closed at $ 54.90 on Friday, giving the company a market capitalization of $ 1.67 billion.

Based in Gaithersburg, Maryland, BroadSoft provides software and services that enable mobile, fixed-line and cable service providers to offer unified communications over their internet protocol networks.

BroadSoft has historically sold its products to large telecommunications companies such as Verizon Communications Inc and AT&T Inc, which then resell the software to their business customers.

BroadSoft has recently tried to revamp its business model to sell directly to these customers, a move that risks its relationships with its telecommunications partners, according to a Barclays Plc research report.

New York-based hedge fund P2 Capital Partners LLC owned a 4.6 percent stake in BroadSoft as of the end of June, according to Thomson Reuters data. P2 has often behaved as an activist shareholder and has even offered to buy companies in which it has invested.

Another BroadSoft shareholder with a history of acquisitions is buyout firm KKR & Co LP, which is BroadSoft’s 13th-largest shareholder, according to Thomson Reuters data.

Reporting by Liana B. Baker in San Francisco; editing by Diane Craft

Our Standards:The Thomson Reuters Trust Principles.

Tech