Sramana Mitra: As I’m listening to you, I’m trying to answer the same question in this context. As we go along, the notion of composite search becomes critical. Grant Ingersoll: Could you define that...
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We have done several spotlight posts on entrepreneurship in different parts of the world: Colorado, Utah, Czech Republic, Florida, Illinois, Arizona. Today, we will look at the entrepreneurship...
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In September this year, OYO Rooms checked into the Billion Dollar Unicorn club with a massive funding of $1 billion from Softbank and other investors. It is now the second most valuable startup after...
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Queen was one of my favorite bands as an adolescent. The movie Bohemian Rhapsody was delightful. And this is even better.
Also published on Medium.
By Guest Author Marylene Delbourg-Delphis In her new book, Everybody Wants to Love Their Job: Rebuilding Trust and Culture, Marylene Delbourg-Delphis reflects on the demise and death of once-giants....
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This feature from TechCrunch covers the highlights of the Startup Battlefield contest in Disrupt Berlin 2018 held last week. For this week’s posts, click on the paragraph links. Tech Posts...
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Floom, the online marketplace and SaaS for independent florists, has raised $2.5 million in a seed funding. The round was round led by Firstminute Capital, and will be used by the London headquartered startup to continue to expand to the U.S., where it already operates in New York and L.A., and to further develop its software offering.
Additional investors include Tom Singh (founder of New Look), Pembroke VCT, Wing Chan (CTO digital experiences of The Hut Group), and Carlos Morgado (former CTO of Just Eat). Morgado has also joined Floom’s board.
Founded by 31-year-old Lana Elie in 2016, Floom bills itself as a curated marketplace for independent florists. Alongside this, the company’s technology platform gives florists the software and tools they need to create and deliver “beautifully crafted bouquets” to customers. It’s this SaaS play that Elie says sets Floom apart from competitors.
“We rely on a network [of florists], like many of the bigger competitors, so that we can offer same-day delivery without the risk of holding stock ourselves,,” she tells me. “But instead of telling the florists what to create and what to hold in stock, we built them an Etsy-like UI to design and deliver beautifully crafted bouquets to our online communities themselves”.
This sees florists provided with a “backend management dashboard” to create, allocate and manage inventory, and to co-ordinate with Floom’s marketplace. The software manages and tracks delivery, too.
“Customers receive more bouquet options, in more areas, by vetted florists, with the ultimate convenience of a seamless check-out and what everyone really wants: confirmation of safe receipt in their loved one’s hand,” explains Elie. “If the final product doesn’t match the picture, they get their money back, something that most competitors can’t offer, but we solved this by relying on the florists to generate the bouquet catalogue themselves”.
On the flower delivery front, Floom’s main competitors are Interflora in the U.K. (owned by 100-year-old conglomerate FTD in the U.S.), as well as 1-800-flowers and Teleflora. “There have been some new players in the flower space, but none solve the problem by creating better technologies,” argues the Floom founder.
“Floom’s not just a flower delivery service but a tech company. I wanted to solve a problem: showing customers all the amazing artisanal florists in their home cities, and making the experience of sending flowers enjoyable and hassle-free. On top of that, we wanted to create a fresh brand that appealed to an audience of my generation… and different from how you might typically think of the flower industry”.
With that said, Elie concedes that there is other florist software in existence, but says it doesn’t really consider the florists as a customer in the same way that Floom does. This is especially true in how the startup understands that the “brand and UI is just as important as functionality”.
“Florists are creative, skilled in a way that I’m definitely not, but when it comes to something like a website build, they’re paying the wrong people much more than they need to build badly UX’d sites,” she adds. “Florists are given no chance to really compete in a world where everything is digital. Building a management tool that speaks to all florists’ consumer facing channels (phone, email, chat, webshop, POS etc) will ultimately mean cost and time savings for the florist, less unnecessary waste for environmental purposes, and better products and delivery experiences for the customer”.
Scooter startup Lime has sought to back peddle on an explanation given by its VP of global expansion late last week when asked why it had hired the controversial PR firm, Definers Public Affairs.
The opposition research firm, which has ties to the Republican Party, has been at the center of a reputation storm for Facebook, after a New York Times report last month suggested the controversial PR firm sought to leverage anti-semitic smear tactics — by sending journalists a document linking anti-Facebook groups to billionaire George Soros (after he had been critical of Facebook).
Last month it also emerged that other tech firms had engaged Definers — Lime being one of them. And speaking during an on stage interview at TechCrunch Disrupt Berlin last Thursday, Lime’s Caen Contee claimed it had not known Definers would use smear tactics.
Yet, as we reported previously, a Definers employee sent us an email pitch in October in which it wrote suggestively that “Bird’s numbers seem off”.
This pitch did not disclose the PR firm was being paid by Lime.
Asked about this last week Contee claimed not to know anything about Definers’ use of smear tactics, saying Lime had engaged the firm to work on its green and carbon free programs — and to try to understand “what were the levers of opportunity for us to really create the messaging and also to do our own research; understanding the life-cycle; all the pieces that are in a very complex business”.
“As soon as we understood they were doing some of these things we parted ways and finished our program with them,” he also said.
However, following the publication of our article reporting on his comments, a Lime spokesperson emailed with what the subject line billed as a “statement for your latest story”, tee-ing this up by writing: “Hoping you can update the piece”.
The statement went on to claim that Contee “misspoke” and “was inaccurate in his description of [Definers] work”.
However it did not specify exactly what Contee had said that was incorrect.
A short while later the same Lime spokesperson sent us another version of the statement with updated wording, now entirely removing the reference to Contee.
You can read both statements below.
As you read them, note how the second version of the statement seeks to obfuscate the exact source of the claimed inaccuracy, using wording that seeks to shift blame in way that a casual reader might interpret as external and outside the company’s control…
Statement 1:
Our VP of Global Expansion misspoke at TechCrunch Disrupt regarding our relationship with Definers and was inaccurate in his description of their work. As previously reported, we engaged them for a three month contract to assist with compiling media coverage reports, limited public relations and fact checking, and we are no longer working with Definers.
What was presented at Disrupt regarding our relationship with Definers and the description of their work was inaccurate. As previously reported, we engaged them for a three month contract to assist with compiling media coverage reports, limited public relations and fact checking, and we are no longer working with Definers.
Despite the Lime spokesperson’s hope for a swift update to our report, they did not respond when we asked for clarification on what exactly Contee had said that was “inaccurate”.
A claim of inaccuracy that does not provide any detail of the substance upon which the claim rests smells a lot like spin to us.
Three days later we’re still waiting to hear the substance of Lime’s claim because it has still not provided us with an explanation of exactly what Contee said that was ‘wrong’.
Perhaps Lime was hoping for a silent edit to the original report to provide some camouflaging fuzz atop a controversy of the company’s own making. i.e. that a PR firm it hired tried to smear a rival.
If so, oopsy.
Of course we’ll update this report if Lime does get in touch to provide an explanation of what it was that Contee “misspoke”. Frankly we’re all ears at this point.
Sramana Mitra: Are they coming to you with just the concept? Are they coming to you with some idea about what customers are looking for? What tells you that you want to give $250,000 to these two...
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Sramana Mitra: I’d like you to do some use cases for us. We understand how this plays out. Pick a customer or customer category and walk us through how this works. Flavio Gomes: In the industrial...
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Sramana Mitra: What kind of infrastructure are your clients running these days? I imagine you’re going after the larger e-commerce sites because the smaller ones don’t have the infrastructure to run...
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Police in the Northern California town of Redwood City arrested a man who was traveling on Highway 101 early Friday morning while sleeping behind the wheel of his Tesla Model S.
Officers first spotted the electric luxury sedan driving south at about 70 mph around 3:40 a.m., California Highway Patrol Officer Art Montiel told Business Insider on Friday night.
Montiel said the officers took action when it became clear that the driver, 45-year-old Alexander Samek, was sleeping.
"The driver wasn't responding to lights and sirens," Montiel said.
The officers believed the Tesla may have been operating on Autopilot, a semi-autonomous-driving feature that allows Teslas to drive and change lanes in traffic with minimal human input.
In order to get the sleeping driver's Tesla to stop, Montiel said officers blocked traffic behind the vehicle while another officer traveling in front of the car gradually slowed down, forcing the Tesla, which can respond to varying traffic speeds and accelerate or slow down accordingly, to a complete stop.
"Once the vehicle came to a stop, the officers got out of their patrol cars, approached the Tesla, and knocked on the windows to wake up the driver," Montiel said.
Officers placed Samek in a patrol car, while another one drove the intoxicated man's Tesla off the freeway and parked it at a nearby gas station.
Samek was arrested on suspicion of driving under the influence. Montiel applauded the CHP's "quick thinking" to get the Tesla and its driver out of harm's way.
Several Teslas have crashed while operating on Autopilot in recent months. A man was killed when his Model X SUV slammed into a highway barrier in Mountain View, California, in March.
Teslas equipped with Autopilot cannot drive themselves. The system deploys an escalating series of warnings if it detects that the driver does not have their hands on the steering wheel. If the driver does not respond, the system deactivates itself.
Tesla declined to comment on the incident.
It's finally here.
On Tuesday, preorders opened for a Big Mouth Billy Bass that connects to Amazon's voice assistant, Alexa.
Once the plastic fish is hooked up to an Amazon Echo, it can respond to Alexa voice commands, dance to the beat of songs from Amazon Music, and it even syncs its fishy lips with Alexa's words.
Because it supports Alexa commands, you can ask the fish about the weather, news, or random facts. It's officially an "Alexa gadget," an Amazon certification.
It costs $40 on â where else â Amazon.com.
"This is not your father's Big Mouth Billy Bass," said Steven Harris, vice president of product development at Gemmy Industries, which is the Big Mouth Billy Bass parent company, in a statement.
The original Big Mouth Billy Bass was first sold in 1999 and plays short songs like "Don't Worry, Be Happy." It's been a kitschy favorite in dens and recreation rooms ever since. This version has the original "Fishin' Time" song built in, too.
Amazon announced the Alexa-compatible Big Mouth Billy Bass last year.
If you've ever taken a probiotic, eaten yogurt, or added pickles to your sandwich, you've taken a step toward nourishing the vital community of life in your gut collectively known as your microbiome.
In recent years, scientists have described the microbiome as the "forgotten organ," thanks to its emerging role in affecting everything from your mood to your risk of disease.
The communities of bacteria living in our guts and elsewhere are thought to influence everything from our mental health to our ability to process fat and gluten.
So when I recently got the chance to try a microbiome testing kit at home for free, I took it. Called the "Explorer," my kit was made by uBiome, a Silicon Valley startup. Since its founding in 2012, uBiome has raised nearly $110 million in funding and transformed from a citizen science project to a key player on the life science venture scene.
Investors call uBiome a game-changer. Before the company, we had virtually no central repository for data on the microbiome â data that could ultimately lead to new treatments for deadly diseases.
"We will look back and say, 'I can't believe we lived our lives without this knowledge,'" Bryan Johnson, the cofounder of a venture firm called OS Fund that led uBiome's latest funding round, told Business Insider.
My uBiome test results came with a significant surprise. Here's what the experience was like.
The biggest game in the world â "Fortnite" â is showing no signs of slowing down.
That's clear from the latest statistic to come out of "Fortnite" creator Epic Games: More than 200 million players have registered accounts, Epic Games confirmed on Tuesday.
Between June 2018 and November 2018, 75 million new players registered, putting the total at more than 200 million.
That's a pretty remarkable number. It puts "Fortnite" registered player numbers in the same realm as the most popular games of all time â games like "Tetris" and "Minecraft" and "Grand Theft Auto 5."
"Fortnite:Battle Royale"/Epic Games
That said, there's a big difference between "Fortnite" and those games: "Fortnite" is free, and available on pretty much anything that will play video games. It also doesn't hurt that the focus of "Fortnite" is an online-only multiplayer mode named "Battle Royale" that's endlessly re-playable.
It's that mix of attributes that's helped "Fortnite" become the most popular game in the world since the Battle Royale mode launched in September 2017.
It's been barely a year since "Fortnite" began its climb to the top, and already its victory dances have bled into professional sports.
It feels like months since Drake joined up with Tyler "Ninja" Blevins to stream the game on Twitch, thus boosting its visibility even more â but that's because it was months ago, way back in March. March!
Ninja and Drake played "Fortnite: Battle Royale" together on PlayStation 4, over the internet, and streamed it on Twitch. It broke Twitch streaming records by hundreds of thousands of viewers. Youtube / Ninja
And now, just one year after Battle Royale hit "Fortnite," more people are playing it monthly than there are people living in Drake's home country â by a factor of two! Way to make Canada look underpopulated, "Fortnite."
And if we're talking about registered players? At over 200 million, "Fortnite" has a player base that's nearly two-thirds of the entire US population.
Ketamine, a drug once associated with raucous parties, bright lights, and loud music, is increasingly being embraced as an alternative depression treatment for the millions of patients who don't get better after trying traditional medications.
The latest provider of the treatment is Columbia University, one of the nation's largest academic medical centers.
Starting this month, Columbia joined a growing list of major medical centers offering ketamine infusions to patients with severe depression, for whom traditional antidepressants like Prozac or Celexa have failed.
Elsewhere in the US, patients can get ketamine at a smattering of private clinics, but not all of them are subject to the strict medical oversight that's generally required of academic medical centers. In some cases, patients can also get the treatment by participating in research studies, but Columbia's move helps make the treatment more broadly available.
Ketamine is not cheap, and it isn't quick to administer. Because it's given by way of an IV drip, the process can take between 45 minutes and two hours. Each session costs $500 to $750 (Columbia is charging $650) and is not covered by insurance, because ketamine is only approved in the US for use as an anesthetic.
Patients given ketamine for depression are typically advised to get 8 to 12 sessions, bringing the total cost to as much as $9,000.
Despite its hefty price, ketamine has been called "the most important discovery in half a century" for mental illness. The drug appears to engage a different part of the brain from traditional antidepressants, and its apparent rapid-fire effects may be especially useful for staunching suicidal thinking in people who are considering taking their own lives, experts say. Ketamine also has a long history of being used to prevent pain, which suggests to clinicians that it's relatively safe.
"Ketamine is the real deal in that it's a genuine pharmacologic agent that's been used for a long time for anesthesia," Jeffrey Lieberman, the chair of the psychiatry department at Columbia University's Irving Medical Center, told Business Insider.
And while ketamine's applications for mental illness are relatively recent, Lieberman is hopeful that the drug will eventually be more widely available to patients in need.
Cozine/Shutterstock Most antidepressants, from Abilify to Zoloft, work by plugging up the places where our brain takes up serotonin, a chemical messenger that plays a key role in mood. The result is more free-floating serotonin and, in some people, relief from a dark curtain of depressive symptoms. But as many as one in three patients fail to respond to the medications, and no new type of depression drug has been invented since then.
Those are the patients who experts say ketamine might help.
In those patients, it can be helpful to think of depression as akin to severe pain, Cristina Cusin, a psychiatrist at Massachusetts General Hospital and an assistant professor at Harvard University, told Business Insider this spring. When the pain gets so intense that it gets in the way of everyday activities â even something as simple as writing an email â patients can feel desperate enough to do anything to alleviate the suffering. But antidepressants take 4-6 weeks to work.
That's not good enough for patients who need help now, said Cusin.
The ketamine clinic at Columbia University Medical Center Columbia Doctors Large institutions are starting to embrace ketamine therapy.
On the West Coast, the University of California in San Diego began offering the infusions to select patients with severe depression in 2010. Kaiser Permanente started administering ketamine as part of a pilot program in Northern California for people who didn't respond to other medications in 2015.
On the opposite side of the country, a handful of specialty centers recently began offering the treatments. They include Emory University, Yale University, and Massachusetts General Hospital, which began offering the treatments this fall.
Several other medical centers, including the Cleveland Clinic, the Mayo Clinic, and the Icahn School of Medicine at Mount Sinai, are administering the drug as part of ongoing research on ketamine and depression.
"The rapid antidepressant effects of ketamine in patients with severe, chronic, and treatment-resistant forms of this illness may represent a true medical breakthrough," James Murrough, the director of the mood and anxiety disorders program and an associate professor of psychiatry and neuroscience at the Icahn School of Medicine, wrote in an October story for Scientific American.
Columbia University's program is one of the first to not require patients to show a specific number of failed treatments for depression in the past. (At Kaiser, patients must show that they've tried at least three different antidepressants and failed to respond to each one.)
Still, Lieberman stressed to Business Insider that experts carefully weigh the benefits and risks before recommending the treatment to a patient, and they always advise people to try traditional medications first.
"We have to do a very careful history and if [someone has] a mood disorder, what's their treatment been? Is the person genuinely unresponsive to standard treatments?" Lieberman said.
Ketamine is believed to engage a different brain system from the one targeted by traditional antidepressants. It appears to act on key switches in the brain called NMDA receptors, which influence mood and help keep our brain's synapses â the delicate branches that serve as the ecosystem for our thoughts â flexible and resilient.
Depression damages these brain switches. And while traditional drugs may help to rescue them over time using serotonin, ketamine appears to deliver its aid directly to the source, plugging up NMDA receptors like a cork in a bottle and nipping depressive symptoms quickly.
A spate of recent research supports this idea of how ketamine provides relief.
Last December, researchers working with depressed and suicidal patients concluded in a study that ketamine was better at curbing suicidal thoughts than a commonly used sedative. Most participants in the study, published in the American Journal of Psychiatry, said their moods began to lift within 24 hours of receiving the drug. In some people, those effects lasted more than a month.
Similarly, the authors of a 2012 review of four preliminary studies on ketamine in patients with severe depression expressed surprise at how rapidly the drug appeared to produce positive and precise results.
But ketamine also has several drawbacks, aside from its steep price tag.
Ketamine induces what many people refer to as a high. This includes feelings of being dissociated from one's body and floating, as well as seeing bright colors and shapes. Some experts have suggested this could lead to issues with addiction.
In addition, ketamine's side effects can include blurred vision, headaches, and increased heart rate. And clinicians aren't yet sure how long ketamine's anti-depressive effects last. While some patients appear to experience a complete alleviation of their symptoms after several weeks of treatment, others either fail to respond or only see improvement for several days or weeks.
Nevertheless, several clinics outside of established medical centers are also offering the treatments, and while some are legitimate, others are what Lieberman described as "scary" and "aggressive" in their marketing tactics.
"It's not that ketamine shouldn't be available â it absolutely should â it just has to be available in a legitimate and medically controlled and rigorous setting," Lieberman said.
Ketamine is also inspiring research into other new depression drugs that work on the brain in a similar way. Homing in on this channel appears to provide depression relief that is better, arrives faster, and works in more people than existing drugs.
Allergan, the multinational pharmaceutical giant known for Botox and birth control, recently dove deep into research on an injectable depression drug called Rapastinel, which works on the same brain pathway as ketamine. San Francisco-based drug company VistaGen is working on a similar drug known only as AV-101.
Similarly, Johnson & Johnson submitted a nasal spray formulation of ketamine called esketamine to the FDA in September for its review. New York-based biotech company Seelos Therapeutics also has a nasal form of ketamine in its pipeline called SLS-002.
But research is still early, experts say.
"We are just scratching the surface of the mechanisms of action with ketamine," Cusin said this spring.
I turned 53 today. Each year on my birthday I write a letter to myself reflecting on the previous year and pondering the coming year. I also go for a run â this year for 53 minutes. The past few years, Iâve started publishing them on this blog â if you are interested in what Iâve written in the past, take a look at @bfeld v52.0 and @bfeld v51.0.
When I review my goals for v52.0, they are all statements of what I want to do. Vegetarian, Introvert, Runner, Writer and Coach / Mentor. The phrase Discriminating Wisdom was tossed in as a bonus. When I reflect on v52, I wasnât that successful at some of these. I started eating fish again in the spring. I didnât run a marathon, was injured or sick for big parts of the year, and weigh in near my normal high of 220 today. I didnât finish writing any of the books Iâm working on.
On the other hand, I did get more time by myself last year and I feel that more of my work is in coach or mentor mode. I was very selective about adding new things to the mix. I traveled selectively rather than continuously. Overall, other than having some real struggles with physical health, v52 worked out well. I felt mentally healthy all year, feel surrounded and loved by good friends, and got to spend another year with Amy-my-soulmate.
Iâm going to try a different approach for v53. Instead of statements about what I want to do, Iâm going to focus on what I want to be. My long-time friend Dov Seidman wrote a book in 2011 titled How: Why How We Do Anything Means Everything that I think is even more important today than it was eight years ago. When I chew on it, I feel like all of the statements of what I want to be can be subsumed by how I want to be, which are Curious, Healthy, Calm, Present, Supportive, and Boundless.
Curious: The essence of my existence has been an endless curiosity. When I was young, it was far-ranging. In the last 20 years, my curiosity has been more constrained by the work I do, where Iâve gone extremely deep in several areas, mostly bounded by entrepreneurship and technology. While I feel like one of my strengths (and a joy of mine) is the ability to synthesize things across multiple domains, Iâve recently felt the constraints of my exploration tighten. Some of this is based on age (e.g. I donât feel like investing the energy in getting up to speed on something new) and some are based on responsibility (e.g. Iâm too busy to invest the time needed.) While Iâll still be selective about what I go deep in, Iâm going to let myself range more broadly again in v53.
Healthy: v52 was a bust on this front. I ended the year 16 pounds heavier than I started the year. In August, I got a serious bacterial infection (E. coli) and was borderline sepsis. I fell down the stairs and am â five months later â still healing from a bone bruise. My back hurts. And no, I didnât run a marathon. I am running again, have seen my resting heart rate get back down into the high 50s, and hired a nutritionist so Iâm eating smarter. Rather than endlessly measure and track my weight and food intake, Iâm just going to focus on the behavior and habits that I know result in me being healthy. Weâll see where that leads me.
Calm: I donât have much of a temper. I do carry around and absorb a huge amount of stress and anxiety, especially that of other people. Iâm come up with a metaphor in therapy that I refer to as âmetabolizing stress and anxiety.â As long as my metabolizer is working, I can handle an immense amount. When itâs not, I tip into depression. The notion of being calm incorporates a lot of activity for me (meditation, sleep, running, single-tasking, time alone, and time with Amy) that keeps my metabolizer working well.
Present: In v52 I deleted my Facebook account. I stopped consuming daily news, Twitter, and the endless random noise in our society. While I still get sucked into it occasionally, I am aware when I do, and itâs usually because my metabolizer isnât working well enough. Going forward, when Iâm on a video conference (which is multiple times a day between Monday and Friday), Iâm 100% focused on the video conference. When Iâm doing email, Iâm doing email. When Iâm writing, Iâm writing. When Iâm reading, Iâm reading. When Iâm with someone, Iâll be with them. My professional world prides itself on its ability to multitask. While I can do this with the best of them, v53 will be about being present.
Supportive: While an element of my work life is to be a leader, I have enjoyed moving into a coach and mentor role. When I think of the leadership I provide, itâs thought leadership, not functional leadership. Around v35, I decided not to be a CEO (or chairman) anymore. Today, I have no desire to be the boss of anything or anyone, but instead, want to have a supportive posture in the majority of my work activity. Every year I appreciate my friendships more, both old and new, and Iâm going to continue to put supportive energy into those relationships.
Boundless: I finished Stephen Hawkingâs book Brief Answers to the Big Questions last night. Heâs one of my heroic figures and Iâm sad that heâs no longer instantiated in human form. Even with his immense physical constraints, his mind â and where it went â was as unconstrained as any. Itâs a beautiful thing to reflect on, and something to aspire to.
v53.0 booting up now.
Also published on Medium.
In order to have innovative smart city applications, cities first need to build out the connected infrastructure, which can be a costly, lengthy, and politicized process. Third-parties are helping build infrastructure at no cost to cities by paying for projects entirely through advertising placements on the new equipment. I try to dig into the economics of ad-funded smart city projects to better understand what types of infrastructure can be built under an ad-funded model, the benefits the strategy provides to cities, and the non-obvious costs cities have to consider.
Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on. I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @
When we talk about “Smart Cities”, we tend to focus on these long-term utopian visions of perfectly clean, efficient, IoT-connected cities that adjust to our environment, our movements, and our every desire. Anyone who spent hours waiting for transit the last time the weather turned south can tell you that we’ve got a long way to go.
But before cities can have the snazzy applications that do things like adjust infrastructure based on real-time conditions, cities first need to build out the platform and technology-base that applications can be built on, as McKinsey’s Global Institute explained in an in-depth report released earlier this summer. This means building out the network of sensors, connected devices and infrastructure needed to track city data.
However, reaching the technological base needed for data gathering and smart communication means building out hard physical infrastructure, which can cost cities a ton and can take forever when dealing with politics and government processes.
Many cities are also dealing with well-documented infrastructure crises. And with limited budgets, local governments need to spend public funds on important things like roads, schools, healthcare and nonsensical sports stadiums which are pretty much never profitable for cities (I’m a huge fan of baseball but I’m not a fan of how we fund stadiums here in the states).
As city infrastructure has become increasingly tech-enabled and digitized, an interesting financing solution has opened up in which smart city infrastructure projects are built by third-parties at no cost to the city and are instead paid for entirely through digital advertising placed on the new infrastructure.
I know – the idea of a city built on ad-revenue brings back soul-sucking Orwellian images of corporate overlords and logo-paved streets straight out of Blade Runner or Wall-E. Luckily for us, based on our discussions with developers of ad-funded smart city projects, it seems clear that the economics of an ad-funded model only really work for certain types of hard infrastructure with specific attributes – meaning we may be spared from fire hydrants brought to us by Mountain Dew.
While many factors influence the viability of a project, smart infrastructure projects seem to need two attributes in particular for an ad-funded model to make sense. First, the infrastructure has to be something that citizens will engage – and engage a lot – with. You can’t throw a screen onto any object and expect that people will interact with it for more than 3 seconds or that brands will be willing to pay to throw their taglines on it. The infrastructure has to support effective advertising.
Second, the investment has to be cost-effective, meaning the infrastructure can only cost so much. A third-party that’s willing to build the infrastructure has to believe they have a realistic chance of generating enough ad-revenue to cover the costs of the projects, and likely an amount above that which could lead to a reasonable return. For example, it seems unlikely you’d find someone willing to build a new bridge, front all the costs, and try to fund it through ad-revenue.
A LinkNYC kiosk enabling access to the internet in New York on Saturday, February 20, 2016. Over 7500 kiosks are to be installed replacing stand alone pay phone kiosks providing free wi-fi, internet access via a touch screen, phone charging and free phone calls. The system is to be supported by advertising running on the sides of the kiosks. ( Richard B. Levine) (Photo by Richard Levine/Corbis via Getty Images)
To get a better understanding of the types of smart city hardware that might actually make sense for an ad-funded model, we can look at the engagement levels and cost structures of smart kiosks, and in particular, the LinkNYC project. Smart kiosks – which provide free WiFi, connectivity and real-time services to citizens – have been leading examples of ad-funded smart city projects. Innovative companies like Intersection (developers of the LinkNYC project), SmartLink, IKE, Soofa, and others have been helping cities build out kiosk networks at little-to-no cost to local governments.
LinkNYC provides public access to much of its data on the New York City Open-Data website. Using some back-of-the-envelope math and a hefty number of assumptions, we can try to get to a very rough range of where cost and engagement metrics generally have to fall for an ad-funded model to make sense.
To try and retrace considerations for the developers’ investment decision, let’s first look at the terms of the deal signed with New York back in 2014. The agreement called for a 12-year franchise period, during which at least 7,500 Link kiosks would be deployed across the city in the first eight years at an expected project cost of more than $200 million. As part of its solicitation, the city also required the developers to pay the greater of either a minimum annual payment of at least $17.5 million or 50 percent of gross revenues.
Let’s start with the cost side – based on an estimated project cost of around $200 million for at least 7,500 Links, we can get to an estimated cost per unit of $25,000 – $30,000. It’s important to note that this only accounts for the install costs, as we don’t have data around the other cost buckets that the developers would also be on the hook for, such as maintenance, utility and financing costs.
Source: LinkNYC, NYC.gov, NYCOpenData
Turning to engagement and ad-revenue – let’s assume that the developers signed the deal with the expectations that they could at least breakeven – covering the install costs of the project and minimum payments to the city. And for simplicity, let’s assume that the 7,500 links were going to be deployed at a steady pace of 937-938 units per year (though in actuality the install cadence has been different). In order for the project to breakeven over the 12-year deal period, developers would have to believe each kiosk could generate around $6,400 in annual ad-revenue (undiscounted).
Source: LinkNYC, NYC.gov, NYCOpenData
The reason the kiosks can generate this revenue (and in reality a lot more) is because they have significant engagement from users. There are currently around 1,750 Links currently deployed across New York. As of November 18th, LinkNYC had over 720,000 weekly subscribers or around 410 weekly subscribers per Link. The kiosks also saw an average of 18 million sessions per week, or 20-25 weekly sessions per subscriber, or around 10,200 weekly sessions per kiosk (seasonality might even make this estimate too low).
And when citizens do use the kiosks, they use it for a long time! The average session for each Link unit was four minutes and six seconds. The level of engagement makes sense since city-dwellers use these kiosks in time or attention-intensive ways, such making phone calls, getting directions, finding information about the city, or charging their phones.
The analysis here isn’t perfect, but now we at least have a (very) rough idea of how much smart kiosks cost, how much engagement they see, and the amount of ad-revenue developers would have to believe they could realize at each unit in order to ultimately move forward with deployment. We can use these metrics to help identify what types of infrastructure have similar profiles and where an ad-funded project may make sense.
Bus stations, for example, may cost about $10,000 – $15,000, which is in a similar cost range as smart kiosks. According to the MTA, the NYC bus system sees over 11.2 million riders per week or nearly 700 riders per station per week. Rider wait times can often be five-to-ten minutes in length if not longer. Not to mention bus stations already have experience utilizing advertising to a certain degree. Projects like bike-share docking stations and EV charging stations also seem to fit similar cost profiles while having high engagement.
And interactions with these types of infrastructure are ones where users may be more receptive to ads, such as an EV charging station where someone is both physically engaging with the equipment and idly looking to kill up sometimes up to 30 minutes of time as they charge up. As a result, more companies are using advertising models to fund projects that fit this mold, like Volta, who uses advertising to offer charging stations free to citizens.
When it makes sense for cities and third-party developers, advertising-funded smart city infrastructure projects can unlock a tremendous amount of value for a city. The benefits are clear – cities pay nothing, citizens are offered free connectivity and real-time information on local conditions, and smart infrastructure is built and can possibly be used for other smart city applications down the road, such as using locational data tracking to improve city zoning and congestion.
Yes, ads are usually annoying – but maybe understanding that advertising models only work for specific types of smart city projects may help quell fears that future cities will be covered inch-to-inch in mascots. And ads on projects like LinkNYC promote local businesses and can tap into idiosyncratic conditions and preferences of regional communities – LinkNYC previously used real-time local transit data to display beer ads to subway riders that were facing heavy delays and were probably in need of a drink.
Like everyone’s family photos from Thanksgiving, the picture here is not all roses, however, and there are a lot of deep-rooted issues that exist under the surface. Third-party developed, advertising-funded infrastructure comes with externalities and less obvious costs that have been fairly criticized and debated at length.
When infrastructure funding is derived from advertising, concerns arise over whether services will be provided equitably across communities. Many fear that low-income or less-trafficked communities that generate less advertising demand could end up having poor infrastructure and maintenance.
Even bigger points of contention as of late have been issues around data consent and treatment. I won’t go into much detail on the issue since it’s incredibly complex and warrants its own lengthy dissertation (and many have already been written).
But some of the major uncertainties and questions cities are trying to answer include: If third-parties pay for, manage and operate smart city projects, who should own data on citizens’ living behavior? How will citizens give consent to provide data when tracking systems are built into the environment around them? How can the data be used? How granular can the data get? How can we assure citizens’ information is secure, especially given the spotty track records some of the major backers of smart city projects have when it comes to keeping our data safe?
The issue of data treatment is one that no one has really figured out yet and many developers are doing their best to work with cities and users to find a reasonable solution. For example, LinkNYC is currently limited by the city in the types of data they can collect. Outside of email addresses, LinkNYC doesn’t ask for or collect personal information and doesn’t sell or share personal data without a court order. The project owners also make much of its collected data publicly accessible online and through annually published transparency reports. As Intersection has deployed similar smart kiosks across new cities, the company has been willing to work through slower launches and pilot programs to create more comfortable policies for local governments.
But consequential decisions related to third-party owned smart infrastructure are only going to become more frequent as cities become increasingly digitized and connected. By having third-parties pay for projects through advertising revenue or otherwise, city budgets can be focused on other vital public services while still building the efficient, adaptive and innovative infrastructure that can help solve some of the largest problems facing civil society. But if that means giving up full control of city infrastructure and information, cities and citizens have to consider whether the benefits are worth the tradeoffs that could come with them. There is a clear price to pay here, even when someone else is footing the bill.
Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Shuly Galili was recorded in October 2018. Shuly...
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