Posts Tagged ‘business’

Oscar Insurance Founders Bring a Techie Take to Obamacare (Interview)

October 7, 2013  |  All Things Digital  |  No Comments

Image copyright Michael Seto/Business Insider Oscar co-founders Josh Kushner and Mario Schlosser The technology industry likes to think of itself as working on legitimately hard problems with the potential for massive positive impact on the world. Sometimes that’s true, other times… it’s hard to make the case. But in cases where startups bring tech smarts and design into large, hidebound industries, the good fight may actually be getting fought. The latest such effort is Oscar , a new healthcare startup. It offers its own health insurance. Oscar is the only new commercial health insurance provider in New York State in the last 15 years. The Oscar service includes three free physician visits, unlimited calls to a doctor at any time of day or night, and unlimited generic drugs. It is priced near the bottom of the market — currently the third cheapest of 17 options on the new Obamacare health insurance exchange in New York. To be clear, Oscar has not even begun to offer its service yet (January 1 is the kickoff). It’s getting a steady stream of press due in part to a famous co-founder, but that means little for its long-term prospects. Add the uncharted territory of health insurance to the gazillions of reasons that technology startups could fail. And the Affordable Care Act is not exact a beacon of stability. But here’s the Oscar pitch, honed over the last two years, which has raised $40 million from investors including General Catalyst, Khosla Ventures and Founders Fund, and is exceedingly well-timed to the launch of Obamacare, straight from the mouths of co-founders Josh Kushner and Mario Schlosser via a recent phone interview. Health insurance in the United States is traditionally sold to employers. That misaligns incentives around care for actual people, and creates data gaps between something happening, the availability of a provider, and the billing process. By bridging the healthcare process together, Oscar thinks it can be more effective and cheaper. And, not a pain in the ass for all involved. “We actually can make an impact because we control the relationship,” said Kushner, a real estate scion who invested in Instagram via his VC firm Thrive Capital and already has his own Wikipedia page .

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Column: Web Video is Way Too Confusing for Brands

October 7, 2013  |  Media Week  |  No Comments

"Please don't suck" is my mantra as I wheel my hand luggage into a town essentially owned by the large TV advertiser I am set to meet. I am here to discuss their strategy for the transition of TV advertising into Internet connected devices. As I wipe the red arc of Bloody Mary away from my top lip, I know for sure that this particular large TV advertiser, once their defenses are eased, will admit to being completely and utterly confused about to how to buy and track online video in a manner that makes sense for their business needs. Damn, and you were thinking the transition to online video is already underway and most advertisers just need a gentle nudge to fulfill the media prophecy.

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Nathan Myhrvold’s Intellectual Ventures Said to Be Hunting for New Capital

October 5, 2013  |  All Things Digital  |  No Comments

Intellectual Ventures founder Nathan Myhrvold It appears that Intellectual Ventures, the controversial company founded on the idea that it could create a capital marketplace in patents, is having trouble raising money for a new fund. According to a Reuters report Thursday which cites sources familiar with the matter, I.V. has slowed down its purchasing of patents and is on the hunt for new sources of funding. Having raised about $6 billion since its founding in 2000, it has gathered up a portfolio of some 70,000 patents. The story said the firm is on the hunt for another $3 billion. One problem: Early investors, including Microsoft and Google, are taking a pass. Google in particular has been on the business end of I.V.-spawned lawsuits against its Motorola Mobility unit. Most of those cases began before Google owned Motorola, but I.V. sued again in June. As it happens, I.V. had a busy summer. It raised its profile in Washington, D.C., boosting its spending on lobbyists against the backdrop of an increase in White House interest in crafting policies meant to regulate patent-trading firms. And last month it struck a licensing deal with Nest , the smart thermostat company. Founder Nathan Myhrvold, a former Microsoft CTO, likes to describe his business model as “invention capital.” Others, namely Google, have labeled I.V. a “patent troll.” And as Myhrvold readily acknowledged in an unapologetic interview with Walt Mossberg at the tenth D: All Things Digital conference in 2012, he’s never going to be the popular kid in the class. Here’s the video of that interview, which in light of I.V.’s reported troubles, bears watching again. [ See post to watch video ]

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Despite Hedging, LivingSocial Is in Discussions to Sell Korean Deals Site Ticket Monster

October 4, 2013  |  All Things Digital  |  No Comments

LivingSocial is engaged in serious talks to sell its Korean deals business Ticket Monster, which it bought in 2011 , according to sources familiar with the discussions. At this point, sources said, it appears more that it’s a matter of when the deal gets done, not if. Sources noted that the troubled daily deals site has been engaged in discussions with a number of possible buyers over the past months, but declined to name them. In a carefully worded statement, LivingSocial CFO John Bax said this week that a deal had not been reached, but little else. Bax said that “there is no transaction pending or anything like that. A lot of people are interested in it, because it’s a great business,” in an interview with the Washington Business Journal . Added Bax: “There has been no transaction.” Clever! Briefed on the details of this post, a LivingSocial spokeswoman said in an email, “the information in the WBJ story is correct and we have no further comment.” ( PandoDaily also reported recently that a deal was in the works, citing a report in a Korean newspaper.) Ticket Monster, or TMon as it is better known in Korea, is perhaps LivingSocial’s easiest and most obvious asset to unload. It sells services and products at a discount, much like LivingSocial and Groupon — the two businesses it looked to for inspiration when it launched in 2010. But unlike its two American counterparts, its ratio of products to services skews much more toward products. When LivingSocial acquired Ticket Monster in 2011 for what was likely at least $100 million in cash and stock, the deal seemed to make some sense; LivingSocial was expanding internationally at a furious pace, and Ticket Monster was expected to be the crown jewel of LivingSocial’s international strategy and the beachhead into the rest of Asia. But as the daily-deal fad started to lose momentum, LivingSocial began abandoning its international expansion in favor of trying to steady its core U.S. business, and the acquisition began to make a lot less sense. This year, Ticket Monster is on track to generate $1 billion in gross billings, Bax told AllThingsD in a recent interview. But TMon’s cut of that is in the low teens percent, at best, according to a person familiar with the business, meaning revenue this year will be at best slightly more than $100 million. TMon did record positive EBITDA in the first half of this year, Bax also said in the previous interview. But neither LivingSocial nor Ticket Monster are throwing off the profits necessary to help each other, and since the companies are run as separate entities, there’s probably no longer any strategic reason for the marriage. In addition, LivingSocial could certainly use the money from a sale as it looks to stabilize its business and carve out a new identity and differentiated path for itself. The company’s revenue grew just six percent in the first half of this year to $264 million, while it recorded a net loss of $81 million. Along the way, it got hit with a hack of customer information and later shut down its local-events business ( in quite the sloppy manner ).

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One Thing Twitter Won’t Have When It Goes Public: Two Classes of Shares

October 3, 2013  |  All Things Digital  |  No Comments

Stock image copyright Norman Chan It’s standard practice for many media companies, and many tech companies, to issue two kinds of shares: The kind that people like you and I can buy, and the kind that the people who run the company control. That dual class structure effectively means that a small number of people can control a public company, even if they don’t own a majority of the company’s shares. You can argue the pros and cons of that structure , but it’s quite common. And it’s why people ranging from the Sulzberger family (New York Times) to Mark Zuckerberg (Facebook) to Sergey Brin and Larry Page (Google) get to run what are in many ways private companies, even though their shares trade publicly: There’s almost no chance an outsider can buy up shares and push them around. But Twitter, which is both a media and a tech company, isn’t following in their footsteps. The company’s S-1 notes that it has only one class of shares. So Dick Costolo and Evan Williams aren’t given any special powers — their shares entitle them to the same voting power that your shares give you. The messaging here is clear: “At Twitter,” the company’s filing would like to say but can’t because it can’t actually speak, “we are way more responsive to shareholder interests than many of our peers.” There’s a caveat, of course: Twitter’s board retains the right to issue preferred stock, which could indeed come with special voting rights and other powers. It’s the kind of thing you might see employed if a corporate raider like Carl Icahn ever showed up at the door with big ideas. But those shares don’t exist yet, and Twitter said it doesn’t have any plans to issue them. So for now, the company is an interesting anomaly. RELATED POSTS: File Under #Finally: Twitter Unveils IPO, Showing Growing Revenue But No Profits At 215 Million Monthly Active Users, Twitter Has a Growth Problem How Twitter’s Ad Business Went Zero to $500 Million In Less Than Four Years Dick Costolo Makes $14,000 a Year in Take-Home Pay One Thing Twitter Won’t Have When It Goes Public: Two Classes of Shares

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How $10 Million Can Lose You $250 Million

October 3, 2013  |  All Things Digital  |  No Comments

Image copyright Ilin Sergey Every company is seeing a rise in mobile traffic, but often can’t figure out why direct revenue from mobile isn’t increasing at a rate proportional to traffic. While mobile still represents a seemingly small percentage of overall revenue — generally between two percent and 10 percent depending on the business — the growth rate is impossible to deny. A recent study by IBM found that mobile commerce grew by 31 percent in Q1 of 2013, outpacing all e-commerce at 20 percent and in-store at 3.7 percent. Any statistician will tell you that percentages are only as good as their perspective size, coercing many marketing strategies to focus on other “channels.” However — to be blunt — mobile is not a channel. It begins, reinforces and sometimes completes all channels. By not understanding the influence that mobile devices exert in all revenue centers, any company is susceptible to losing revenue at 25 times that of direct mobile revenue. Applying research from a March 2013 Deloitte study , mobile can influence traditional in-store purchases by an astounding 17x. In addition, BloomReach’s internal data anonymously connecting mobile and Web usage on the same merchant shows that mobile can influence a desktop e-commerce channel by up to 7x. So, hypothetically, a company that loses $10 million in yearly mobile revenue that provides poor mobile experiences stands to lose $70 million from desktop revenue and an additional $170 million from in-store purchases — totaling a whopping $250 million. Think it’s not possible

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The Value of a Board at the Seed Stage

September 27, 2013  |  All Things Digital  |  No Comments

Image copyright For most startup founders, the idea of creating a board of directors early in the company’s life is as welcome as spending a week at Burning Man without water or sunscreen. Thinking about boards makes entrepreneurs imagine instituting process-laden corporate governance, spending hours drafting lengthy board presentations and potentially losing control of their startups — how un-Zuck! In reality, every startup is legally required to have a board (assuming it’s a C-Corp or S-Corp). But there is ongoing debate about whether that board should include anyone other than the founder(s). An outside Director, specifically one representing investors, is tremendously valuable for seed stage companies. Here’s why: Establishing a Cadence Much like sprints in agile software development , setting up a regularly occurring board meeting at the seed stage establishes a cadence for the work of building the company. A scheduled board meeting can also help address another common problem experienced by startups — figuring out how and when to properly leverage your investors and advisers. Board meetings become checkpoints for founders to ask for assistance from an investor and to seek feedback on developments at the company. It doesn’t matter whether the board meetings happen monthly, every six weeks or quarterly. What’s important is that a cadence gets set and that the meetings are used in ways that are productive for the team. Stepping Back and Getting Perspective When your hair’s on fire each and every day as an entrepreneur, it’s easy to spend all of your time firefighting

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Why Larry Ellison and Michael Dell Are Now the Best of Friends

September 25, 2013  |  All Things Digital  |  No Comments

Keep a close eye on the brewing relationship between the software giant Oracle and computing concern Dell. While today the companies announced a series of seemingly innocuous plans to more tightly integrate their enterprise management capabilities, what’s really going on is a deepening of an important strategic partnership between them. That’s the conclusion drawn in a research paper from Moor Insights and Strategy, a research firm headed up by Patrick Moorhead, a former executive with chipmaker Advanced Micro Devices. Four years after Oracle closed on its acquisition of Sun Microsystems, the company has sought to compete in the business of specialized hardware based on the old SPARC chip architecture that goes up against IBM Power-based systems. But Sun also had a fledging commodity server business using Intel’s x86 chips. CEO Larry Ellison has said numerous times he wasn’t interested in boosting Oracle’s share of the x86 service business, in part because he doesn’t see it as terribly profitable. In a world where x86 servers are the basis for most of the world’s data centers, Oracle’s SPARC-based hardware gets all the attention, while its x86 business has languished. “First, since their Sun acquisition they have focused their hardware sales resources on promoting their SPARC-based systems and, as is becoming apparent, they have also focused their hardware R&D resources on SPARC technology and system development,” writes Paul Teich, a Moor Insights analyst and the paper’s primary author. Without a credible x86 business, Dell is quickly becoming the conduit through which Oracle reaches that market. Dell has already been named Oracle’s “preferred x86 vendor,” while Dell has been reselling Oracle’s Linux and other software and services to its hardware client base. Dell and Oracle each have access to customers and technology that the other needs. “We believe that Dell needs a better software and services play to increase their enterprise IT share of wallet and credibly challenge Hewlett-Packard at classic enterprise IT accounts,” Teich argues.

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Ahead of July Filing, Twitter IPO Designed as "Less Anti-Facebook Than Anti-Old-Twitter"

September 24, 2013  |  All Things Digital  |  No Comments

Did you know Twitter actually filed its IPO documents in mid-July? Or that an investment firm run by Suhail Rizvi will be one of the bigger shareholders listed when its regulatory documents go public? Or that the float for the IPO will be much smaller than Wall Street expects, because few current investors are selling into it? No, you don’t, which was the goal of the once out-of-control company so well known for its myriad of foibles that one major rival had described as a “clownmobile that crashed into a goldmine.” No longer, it seems — except, it is hoped by Twitter, for the goldmine part. To get there, in interviews with more than two dozen sources familiar with the Twitter IPO process, the famous online communications company has opted for one what person dubbed a “containment strategy.” That meant a filing in mid-July with the Securities and Exchange Commission using the Jumpstart Our Business Startups, or JOBS, Act, that allowed Twitter to keep it under wraps. There was no public announcement until this month, an effort to file in such a way as to minimize disruption to the company and maximize control by its managers and board. The ultimate goal, said those with knowledge of the situation, was to finally banish the image of the loosey-goosey Twitter of old, with its leaky board, its constant service crashes and its dramatic proclivity to show off all its growing pains in public. “Like the service, the aim was to make the Twitter IPO as simple as possible,” said one person familiar with the situation. “While everyone wants to compare it to trying to avoid the circus around the Facebook IPO, it’s really less anti-Facebook than anti-old Twitter.” Said another person close to the company: “We had been everyone’s doormat for far too long, but a transformation did happen and this IPO process reflects that perfectly.” Among the many ways that was done include the severe limiting of information around the process to the board and several others, in an effort orchestrated by key managers. This tight circle includes: CEO Dick Costolo, COO Ali Rowghani and CFO Mike Gupta, with some critical help from Twitter’s most IPO-experienced director, Peter Currie. Along with the rest of the board, which meets every other month for two days, the group plotted the IPO over a much longer time period, a process that included taking the pressure of possible selling by early investors and employees.

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Seven Questions About Security for Kleiner Perkins’ Ted Schlein

September 22, 2013  |  All Things Digital  |  No Comments

It doesn’t take much more than a casual glance at the headlines to get the idea that there’s a lot going on in the area of Internet security these days. Between hacking attacks by the Chinese Army , revelations of overly aggressive snooping by the National Security Agency, or questions about how to make cloud computing secure enough that big companies can trust it, security is top of mind for CIOs and other decision makers more than ever before. It’s against that backdrop that venture capitalists like Ted Schlein see opportunity. As a general partner at Kleiner Perkins Caufield & Byers. He has led several of the firm’s investments in security companies, and was the founding CEO of Fortify Software, the company that’s now part of Hewlett-Packard. I caught up with him while he was in New York for a meeting of the board of Chegg, the digital hub for students that recently filed for an IPO . My first question was the one I always tend to ask at the outset of conversations about security. AllThingsD: Ted, there’s a lot of interest in security companies lately, but I’m always a little skeptical because over the years, there have been so many companies focused on security that make such broad promises about being the last, best solution. As an investor, how do you see that? Schlein: Threat vectors change. The natures of threats change, and the bad guys themselves change. And when those things change, the protection mechanisms have to change along with them. What we’ve seen in a rise in the sophistication of the bad guys. What is at stake has gone up tremendously. When we started 30 years ago, we were dealing with amateur hackers who wanted to mess around with you

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