Ant was said to have offered Chinese staff at Equifax lucrative raises — reportedly tripling their salaries — with a focus on those who “provided instructions on specific Equifax information… if they jumped ship.” Apparently, however, only Zou did.
Zou, for this part, denies the claims. He said he looked up Equifax team members to help with work on his project in Canada, and forward information to his email account in order to continue his work when he went home.
Ant Financial did not use Equifax intellectual property or trade secrets, including code, algorithms or methodology in the development of our credit rating product. Ant Financial has found absolutely no evidence of Equifax software, data or code having been transferred to our systems.
We did not directly or indirectly encourage potential job applicants to obtain Equifax intellectual property or trade secrets. This would be a violation of Ant Financial’s Code of Business Conduct and we would take immediate action against any employee found engaging in this behavior. Further, we have specific agreements with our third-party recruiters that prohibit them from violating intellectual property rights of any parties. If any recruiter is found to have conducted such activities, we will stop accepting candidate referrals from them and may take legal action against them.
Ant said the Journal’s report is “full of innuendo based on disjointed facts and coincidence in timing.”
Beyond Ant, the report claims Equifax firm was also concerned when an unnamed Chinese firm swapped members of its delegation in the run-up to a meeting, a tactic that is apparently common among potential cases of espionage.
The company had been in contact with the FBI, but ultimately Equifax decided against pushing the matter. The Journal’s report also suggested that federal investigators backed down because they sensed that Equifax didn’t believe it had information that Chinese spies would be keen to get hold of. In addition, it hadn’t lost consumer information. Ultimately, of course, that leaked out when the firm was hacked last year.
“The story not only promotes hostility against a specific company, but also paints an overall narrative that maligns Chinese companies as a whole, and further promotes culturally divisive perceptions of ethnic Chinese people in America,” Ant said in its statement, which is attributed to the company’s general counsel, Leiming Chen.
People don’t eat enough fruit and vegetables, that’s despite an embarrassment of options today that include fast grocery delivery and takeout services with a focus on health.
A study from the U.S-based Center for Disease Control and Prevention (CDC) released last November found that just one in ten adults in America “meet the federal fruit or vegetable recommendations” each day. The bar isn’t that high. The recommendation is just 1.5-2 cups of fruit and two to three cups of vegetables per day, but failing to meet it can put people at risk of chronic diseases, the CDC said.
The problem is universal the world over, but perhaps most acute in the U.S, where finding healthy food is easier than ever. Amazon’s same-day grocery deliveries, make-it-at-home services like Blue Apron and various healthy takeout services have helped some people, but no doubt there’s much more to be done for standards to be raised across the nation and beyond.
That’s where one early-stage startup, Kencko, is aiming to make a difference by making fruit and vegetable more accessible. Its thesis is that wholly organic diets are daunting to most, but packaging the good parts in new ways can make it easier for anyone to be more healthy.
The company’s first offering is a fruit drink that can be made in minutes using just a sachet, water and its mixer bottle.
Kencko currently offers five different organic fruit and vegetable mixes
Just add water
Unlike other ‘instant’ mixer options, Kencko uses freeze-drying to turn fruit and vegetable mixes into powder without compromising on health. That process — which is similar to how NASA develops food for astronauts — retains minerals, protein, vitamins and all the other good stuff typically lost in healthy drinks, the startup said. The fruit and vegetables used are organic and sourced from across the world — that’s broken down into more details on the Kencko website — while the mixes don’t contain sugar or other additives.
Kencko customers make their drink by mixing the sachet with water and shaking for one minute. Each sachet is 20g and, when combined with water, that gets you a 160g serving. That’s around two daily portions, and it has a 180-day shelf live so it can keep. There are six different combinations, each one is a mixture of six fruit and vegetables.
Unlike others that pair with water, Kencko actually includes fruit pieces and seeds — I tested a batch. That’s pretty unique, although it is worth noting that some of the more berry fruit heavy combinations mix less efficiently than the plant-based ones, at least from my experience. As someone who lives in a city where fresh fruit and vegetables are easily found — thank you, Bangkok — I’m not the target customer. But I can readily recall living the busy 9-6 office life in London a decade ago, and back then I’d have been curious enough to at least take Kencko for a spin in my quest to be a little healthier.
Kencko is also affordable when compared to most health food options, which tend to be positioned as premium.
Packs are priced at $29.90 for ten sachets, $74.50 for 30 and $123.50 for 60. The startup offers a ‘Lifetime Founding Member’ package that gives 30 percent off those prices for an initial charge. That’s $32 for those wanting 10 servinggs, $79.90 for 30 and $129 for 60.
Two of my Kencko mixes
More than pressed juice
Kencko — which means health in Japanese — is the brainchild of Tomás Froes, a former tech worker who got into veganism after being diagnosed with acute gastritis.
Froes, who is from Portugal and once ran an artisanal hot dog brand in China, was told that his ailment was treatable but that it would require a cocktail of pills for the rest of his life. Seeking an alternative, he threw himself into the world of alternative health and, after settling on a 90 percent fruit and vegetable diet, found that his condition had cleared without medicine.
Keen to help others enjoy the benefits of his journey, he began talking to nutritionists and experts whilst trying to figure out possible business options. In an interview with TechCrunch, Froes said he settled on a new take on the existing ‘health drink’ space that he maintains is inadequate in a number of ways.
“The end goal is to help consumers reach the recommendation of five servings/portions of fruit a day,” he explained. “That would be impossible to do if we excluded the seeds and bits of fruits like cold-pressed juice companies do. They press the juice out of the fruits, leaving the most nutritional part from pulp and the seeds out.”
“We blast freeze fruit and vegetables at -40 degrees which allows us to maintain the same nutritional properties as fresh fruit for longer periods. We then use a slow heat process of 60 degrees to evaporate only take the water-based parts without damaging nutrition,” Froes added.
Added that, Froes said, Kencko helps cut down on the use of plastic by using the same mixer, return customers only require new sachets.
As proof of Kencko’s versatility, he brought his mixer and sachets along to the vegan cafe we met at earlier this year when I visited London, putting me to shame for buying the cold pressed option — which was no doubt more expensive, to boot.
Kencko is based in New York but with a processing facility in Lisbon, Portugal. It is heavily focused on the U.S. market where it offers delivery in 24-48 hours, but it also covers the UK and Canada. There are plans to increase support, particularly in Asia.
Kencko’s Apple Watch app is in beta with selected users
Building a health food brand
Kencko was formed in 2017 and, after landing undisclosed seed funding, it launched its product in March of this year. Already it has seen progress; the startup recently entered the TechStars accelerator program in London as one of a batch of ten companies.
“I’m excited to work with Tomas and the Kencko team,” Eamonn Carey, who leads TechStars in London, told TechCrunch. “I first read about them on ProductHunt and bought into their mission straight away. Once I tasted the product for the first time, I was sold — both as a subscriber and an investor.”
Froes told TechCrunch that drinks are just the first phase of what Kencko hopes to offer consumers. He explained that he wants to move into other types of food and consumables in the future to help give people more options to get their daily portion of fruit and vegetables.
Up next could be Apple-based snacks. Foes shared — quite literally — a new batch of snack that’s currently in development and is made from the fruit. He believes it could be marketed a healthier option than crisps and other nibbles people turn to between meals. Further down the pipeline, he said, will be other kinds of food that maintain the 100 percent organic approach.
Beyond food, Kencko wants to build a close bond with its customers. It is developing iOS and Apple Watch apps that help its users to track their fruit and vegetable consumption, and more generally make their diet and routine healthier.
With the membership package and apps, it becomes clear that Kencko aspires to build a brand and not just sell a product online. That’s double the challenge (at least), and that makes the company one to watch.
Already it has found some success within tech circles such as TechStar’s Carey — people who aspire to eat and drink better but are pushed for time — but if Froes is to even begin to deliver on his mission then Kencko will need to go beyond the tech industry niche and attract mainstream consumers. For now though, the product is worth close inspection if you think your lifestyle is in need of a fruit boost.
For 11 year-old Emmett from Austin, hacking the website for the Florida Secretary of State was as easy as a simple SQL injection.
While it took Emmett only 10 minutes to break into the election reporting section of the Florida Secretary of State web page, it’s important to note that these pages were set up as replicas.
The idea, according to event organizers from Wickr (a secure communications platform), “was mainly focused on breaking into the portions of the websites that are critical to the election process, [so] the kids worked against the replicas of the webpages where election results are reported by secretaries of state.”
The replicas were built by the team at Wall of Sheep Village and they issued the following statement: “The main issues with the live sites we are creating the replicas of are related to poor coding practices. They have popped up across the industry and are not vendor specific.”
And while the National Association for the Secretaries of State had some choice words for the Voting Machine Hacking Village, they didn’t address the hacks the kids made on their actual web sites.
Well this is interesting. National Association of Secretaries of State issues statement against the Def Con Voting Village. Says its attempt to recreate (and likely hack the shit out of) a connected mockup of the election process isn't realistic. pic.twitter.com/c1uy694UPA
In all, some 47 kids participated in the election hacking contest and 89% of them managed to get in to the virtual web sites set up by Wickr and Wall of Sheep Village.
Emmett, whose dad works in cybersecurity and who has been attending Def Con now for four years, has some thoughts on how easy it was for him to get into the system and change the vote tallies for election results.
“It’s actually kind of scary,” the 11 year-old said. “People can easily hack in to websites like these and they can probably do way more harmful things to these types of websites.”
The point, according to Wickr’s (badass) founder Nico Sell, is to bring attention to just how flawed security operations remain at the state level in areas that are vital to the nation’s democracy.
“The really important reason why we’re doing this is because we’re not taking the problem serious enough how significantly someone can mess with our elections,” said Sell. “And by showing this with eight year old kids we can call attention to the problem in such a way that we can fix the system so our democracy isn’t ruined.”
Some executives at big corporations share the same concerns. For Hugh Thompson, the chief technology officer at Symantec, the risks are real — even if the problems won’t manifest in the most important elections.
As Thompson (who worked on election security in the early 2000s) told The Financial Times, “The risk that I think most of us worried about at that time is still the biggest one: someone goes into a state or a county that doesn’t really matter in the grand scheme of the election, is not going to change the balance on x, y or z, but then publishes details of the attack,” he said. “Undermining confidence in the vote is scary.”
Stakes are incredibly high, according to experts familiar with election security. Despite the indictments that Robert Mueller, the special counsel investigating Russian interference, issued against 12 Russian nationals for targeting the 2016 US election, Russian hacking remains a threat in the current election cycle.
Microsoft has already said that it has detected evidence of attempted Russian interference into three campaigns already in the 2018 election cycle.
As Fortune reported in July, Microsoft’s vice president for customer security, said that researchers at the company had discovered phishing campaigns that were linked to the GRU, the Russian military intelligence unit tied to the DNC election hacks from 2016.
For security officers working on the websites for the secretaries of state in the battleground states that the tween and teen hackers targeted during Def Con, young Emmett has some advice.
“Use more protection. Upgrade your security and obviously test your own websites against some of the common vulnerabilities,” the 11 year-old advised.
Tencent Music Entertainment (TME) has nothing like the global profile of Spotify, but China’s top streaming service is heading for the U.S. public markets according to a filing made this weekend by parent company Tencent, the $500 billion Chinese internet giant which plans to spin the music business out.
But there’s precedent here since Tencent made a similar move last year when it broke off China Literature, its digital books business unit, and listed it in Hong Kong with some success. Hong Kong had also been mooted as a destination for TME, but the Tencent filing stated the firm’s intention to “spin-off by way of a separate listing… on a recognized stock exchange in the United States.”
While it seems unlikely that Tencent will follow Spotify and adopt a direct listing — which ditches with the conventional process of an IPO price and engaging banks — it may well call on its rival for pointers since they are both mutual investors.
America’s mayors have spent the past nine months tripping over each other to curry favor with Amazon.com in its high-profile search for a second headquarters.
More quietly, however, a similar story has been playing out in startup-land. Many of the most valuable venture-backed companies are venturing outside their high-cost headquarters and setting up secondary hubs in smaller cities.
Where are they going? Nashville is pretty popular. So is Phoenix. Portland and Raleigh also are seeing some jobs. A number of companies also have a high number of remote offerings, seeking candidates with coveted skills who don’t want to relocate.
Those are some of the findings from a Crunchbase News analysis of the geographic hiring practices of U.S. unicorns. Since most of these companies are based in high-cost locations, like the San Francisco Bay Area, Boston and New York, we were looking to see if there is a pattern of setting up offices in smaller, cheaper cities. (For more on survey technique, see Methodology section below.)
Here is a look at some of the hotspots.
One surprise finding was the prominence of Nashville among secondary locations for startup offices.
We found at least four unicorns scaling up Nashville offices, plus another three with growing operations in or around other Tennessee cities. Here are some of the Tennessee-loving startups:
When we referred to Nashville’s popularity with unicorns as surprising, that was largely because the city isn’t known as a major hub for tech startups or venture funding. That said, it has a lot of attributes that make for a practical and desirable location for a secondary office.
Nashville’s attractions include high quality of life ratings, a growing population and economy, mild climate and lots of live music. Home prices and overall cost of living are also still far below Silicon Valley and New York, even though the Nashville real estate market has been on a tear for the past several years. An added perk for workers: Tennessee has no income tax on wages.
Phoenix is another popular pick for startup offices, particularly West Coast companies seeking a lower-cost hub for customer service and other operations that require a large staff.
In the chart below, we look at five unicorns with significant staffing in the desert city:
Affordability, ease of expansion and a large employable population look like big factors in Phoenix’s appeal. Homes and overall cost of living are a lot cheaper than the big coastal cities. And there’s plenty of room to sprawl.
One article about a new office opening also cited low job turnover rates as an attractive Phoenix-area attribute, which is an interesting notion. Startup hubs like San Francisco and New York see a lot of job-hopping, particularly for people with in-demand skill sets. Scaling companies may be looking for people who measure their job tenure in years rather than months.
Those aren’t the only places
Nashville and Phoenix aren’t the only hotspots for unicorns setting up secondary offices. Many other cities are also seeing some scaling startup activity.
Let’s start with North Carolina. The Research Triangle region is known for having a lot of STEM grads, so it makes sense that deep tech companies headquartered elsewhere might still want a local base. One such company is cybersecurity unicorn Tanium, which has a lot of technical job openings in the area. Another is Docker, developer of software containerization technology, which has open positions in Raleigh.
The Orlando metro area stood out mostly due to Robinhood, the zero-fee stock and crypto trading platform that recently hit the $5 billion valuation mark. The Silicon Valley-based company has a significant number of open positions in Lake Mary, an Orlando suburb, including HR and compliance jobs.
Portland, meanwhile, just drew another crypto-loving unicorn, digital currency transaction platform Coinbase. The San Francisco-based company recently opened an office in the Oregon city and is currently in hiring mode.
Anywhere with a screen
But you don’t have to be anywhere in particular to score jobs at many fast-growing startups. A lot of unicorns have a high number of remote positions, including specialized technical roles that may be hard to fill locally.
GitHub, which makes tools developers can use to collaborate remotely on projects, does a particularly good job of practicing what it codes. A notable number of engineering jobs open at the San Francisco-based company are available to remote workers, and other departments also have some openings for telecommuters.
Others with a smattering of remote openings include Silicon Valley-based cybersecurity provider CrowdStrike, enterprise software developer Apttus and also Docker.
Not everyone is doing it
Of course, not every unicorn is opening large secondary offices. Many prefer to keep staff closer to home base, seeking to lure employees with chic workplaces and lavish perks. Other companies find that when they do expand, it makes strategic sense to go to another high-cost location.
Still, the secondary hub phenomenon may offer a partial antidote to complaints that a few regions are hogging too much of the venture capital pie. While unicorns still overwhelmingly headquarter in a handful of cities, at least they’re spreading their wings and providing more jobs in other places, too.
For this analysis, we were looking at U.S. unicorns with secondary offices in other North American cities. We began with a list of 125 U.S.-based companies and looked at open positions advertised on their websites, focusing on job location.
We excluded job offerings related to representing a local market. For instance, a San Francisco company seeking a sales rep in Chicago to sell to Chicago customers doesn’t count. Instead, we looked for openings for team members handling core operations, including engineering, finances and company-wide customer support. We also excluded secondary offices outside of North America.
Additionally, we were looking principally for companies expanding into lower-cost areas. In many cases, we did see companies strategically adding staff in other high-cost locations, such as New York and Silicon Valley.
A final note pertains to Austin, Texas. We did see several unicorns based elsewhere with job openings in Austin. However, we did not include the city in the sections above because Austin, although a lower-cost location than Silicon Valley, may also be characterized as a large, mature technology and startup hub in its own right.
The UK and the USA have always had an enduring bond, with diplomatic, cultural and economic ties that have remained firm for centuries.
We live in an era of profound change, and are living with technologies set to change things ever faster. If Britain and America work together to develop these technologies for the good of mankind, in a way that is open and free, yet also safe and good for our citizens, we can maintain the global lead our nations have enjoyed in the fields of innovation.
Over past months we have seen some very significant strides forward in this business relationship. All of the biggest US companies have made decisions to invest in the UK. Apple is developing a new HQ in the iconic Battersea Power Station, close to the new US embassy, while Google is building a billion dollar new HQ in the increasingly fashionable King’s Cross. Facebook, Amazon, IBM and Microsoft are all extending their operations, and a multitude of smaller US firms are basing their international headquarters in London.
They are all coming here because as we prepare to leave the EU we are building a forward looking Britain that is open to the wider world, and tech is at the heart of this.
Similarly, there have been major expansions or new investment from British firms into the US. Jaguar Land Rover, the UK’s largest automotive manufacturer, supports more than 9,000 jobs in the USA and have recently opened their new multimillion-dollar corporate North America HQ in New Jersey. iProov, a leading British provider of biometric facial verification technology, became the first international company to be awarded a contract from the US Department of Homeland Security Science & Technology Directorate’s Silicon Valley Innovation Program last month.
We want to work with our global partners – to share expertise, and encourage investment – as we harness technology for the wider good. And that of course includes our old friend and closest ally, the USA.
We have a great deal to offer.
The UK was recently ranked the most AI ready nation among all the OECD countries. In the past three years, new AI start-ups have been created in the UK on an almost weekly basis.
Recently, UK government and industry together committed over $1 billion to support our AI sector, much of which will go towards entrepreneurs. Funding has been set aside to create a nationwide network of tech incubators, that we’re calling “Tech Nation”, which will support new AI businesses as they get off the ground.
We are also excited by — and I am a firm advocate for — the development of blockchain and similar technologies. The UK is leading the way in many areas where blockchain has the potential to be used, such as Fintech. There are now more people working in UK Fintech than in New York or in Singapore, Hong Kong and Australia combined.
And we are eminent in the development of immersive technologies, like Augmented and Virtual Reality, which look set to radically improve many areas of life in coming years, with applications as varied as flight simulation and surgical training techniques.
There is so much to be gained from close collaboration between our two countries on these new technologies and from sharing our expertise.
Together, we can reap the economic benefits of stealing an early lead in their development. We estimate that AI, for example, if widely adopted, could add $33 billion to the UK economy. But, perhaps most importantly, we can also work together to build a strong regulatory and ethical frameworks for their wider application.
It is the role of governments across the world, the UK and US included, to set frameworks for these decentralised, cross border systems so we can manage their use in a safe and effective way.
Our aim should be to harness the power and capability of technology but always for the benefit of, and in service to the populace.
We in the UK are avowedly pro-tech, always seeking to put its power in the hands of our citizens.
We have all learned valuable lessons from the recent scandals regarding data use, most recently around Facebook’s use of data.
We want to build a system that protects and cherishes the freedom of the Internet while protecting the rights of individuals, and their property, including intellectual property.
We want to see freedom in a framework; where our tech entrepreneurs have the space to innovate, knowing they do so with full public trust. Trust underpins a strong economy, and trust in data underpins a strong digital economy.
So in the UK we are developing a Digital Charter, to agree norms and rules for the online world and put them into practice. Our starting point is that what is unacceptable offline should not be tolerated in the online world. That includes how tech companies treat private citizens and use their data, as well as how people treat each other online.
Important changes like these cannot be agreed by one country alone. It is more important than ever that we work together and find common ground so we can make sure that tech continues to change the world for the better. Based on our mutual love of freedom and individual rights Britain and America have through history risen to challenges together. I firmly believe working together we can build that brighter future.
Avi Reichental is founder and CEO of XponentialWorks. He is a leading authority on 3D printing and exponential tech convergence.
If you build it, they will come. And if you 3D-print it, they will come faster, cheaper and more sustainably.
We live in an era of overpopulation and mass housing shortages. Yet we also live in a time of phenomenal digital innovation. On the one hand we have major crises affecting the health, liberty and happiness of billions of people. But look at the other hand, where we have potential for life-changing technological breakthroughs at a rate never before seen on this planet.
Our challenges are vast, but our capabilities to produce solutions are even greater. In the future, we will remember this moment in time as a pivotal one. It is now — not tomorrow, and certainly not five years from now — when technology and innovation are disrupting multiple major industries, including those of housing and construction, at breathless and breakneck speed.
Innovators around the world are hard at work to change the way we design, build and produce our homes, and all of this will result in massive change to the housing status quo. Harnessing the revolutionary power of 3D printing, companies from Russia to China, the U.S. and the Netherlands have already proven that not only can a home be 3D-printed, it can be done cheaply, efficiently and easily.
Here are just a few ways 3D printing is already transforming the way we live.
In March 2017, Apis Cor, 3D-printing specialists with offices in Russia and San Francisco, announced they had produced a 3D-printed home in just 24 hours. That means that from the time you drank your coffee yesterday to the time you sat down for cereal this morning, they produced the self-bearing walls, partitions and building envelopes of an entire home, installed it on site and added the roof and interior finishings. It happened in the dead of winter in a tiny Russian town named Stupino, and it was done using Apis Cor’s on-site printer, which means that the massive cost and logistical hurdle of transporting parts and building materials from factories to a home site was almost entirely eliminated.
Think about the possibilities: You select the site where you want to build your home, Apis Cor brings in their 4.5-meter-long printer, the raw materials are set up and within one single day, your home is printed and ready for you. Compare that to the traditional six- or seven-month construction time the industry is used to, and you’ll begin to understand the scope of potential disruption.
The speed of technological innovation here is also exponential and mind-blowing; just one year before Apis Cor’s breakthrough, we in the 3D-printing industry were marveling over Chinese construction company HuaShang Tengda, who set their own record by 3D-printing a two-story home in a month and a half. Consider that, for a moment: This industry is moving so quickly that construction time has been slashed from 45 days to 24 mere hours in the span of a single year.
Housing prices in America have skyrocketed over the past 50 years, with the average price for a home now surpassing $200,000. And remember, that’s just the average — if you live on the East or West Coast, chances are you’re going to be shelling out something closer to the half-million dollar mark (or more!).
According to a report from the McKinsey Global Institute, a full one-third of people who live in cities will find decent housing out of their reach due to cost by the year 2025. And construction costs are the primary barrier — the report also states that it will take between $9 trillion and $11 trillion just to build the necessary houses to flip that supply-demand ratio and make housing affordable in that time.
New Story, a Silicon Valley-based nonprofit that builds housing in the developing world, just unveiled a new 3D printer at SXSW that can print a house in less than a day for $4,000. DUS Architects — a Dutch architecture studio that has been 3D-printing houses since 2012 — has unveiled the KamerMaker, a huge 3D printer that can build using local recycled materials. This slashes transport, material and manufacturing costs, all driving down costs.
The bottom line
What’s so revolutionary about 3D printing is that its potential is limited only by our imaginations. If the past few years have taught us anything about this industry, it’s that barriers of size, scope and material do not apply to the potential that 3D printing brings to the manufacturing market. From cars to food,to the houses we live in, the industry isn’t just gearing up for a shakeup. It’s in the throes of it already, because change is happening now.
Earlier today, the services marketplace Thumbtack held a small conference for 300 of its best gig economy workers at an event space in San Francisco.
For the nearly ten-year-old company the event was designed to introduce some new features and a redesign of its brand that had softly launched earlier in the week. On hand, in addition to the services professionals who’d paid their way from locations across the U.S. were the company’s top executives.
It’s the latest step in the long journey that Thumbtack took to become one of the last companies standing with a consumer facing marketplace for services.
Back in 2008, as the global financial crisis was only just beginning to tear at the fabric of the U.S. economy, entrepreneurs at companies like Thumbtack andTaskRabbit were already hard at work on potential patches.
This was the beginning of what’s now known as the gig economy. In addition to Thumbtack and TaskRabbit, young companies like Handy, Zaarly, and several others — all began by trying to build better marketplaces for buyers and sellers of services. Their timing, it turns out, was prescient.
In snowy Boston during the winter of 2008, Kevin Busque and his wife Leah were building RunMyErrand, the marketplace service that would become TaskRabbit, as a way to avoid schlepping through snow to pick up dog food .
Meanwhile, in San Francisco, Marco Zappacosta, a young entrepreneur whose parents were the founders of Logitech, and a crew of co-founders including were building Thumbtack, a professional services marketplace from a home office they shared.
As these entrepreneurs built their businesses in northern California (amid the early years of a technology renaissance fostered by patrons made rich from returns on investments in companies like Google and Salesforce.com), the rest of America was stumbling.
In the two years between 2008 and 2010 the unemployment rate in America doubled, rising from 5% to 10%. Professional services workers were hit especially hard as banks, insurance companies, realtors, contractors, developers and retailers all retrenched — laying off staff as the economy collapsed under the weight of terrible loans and a speculative real estate market.
Things weren’t easy for Thumbtack’s founders at the outset in the days before its $1.3 billion valuation and last hundred plus million dollar round of funding. “One of the things that really struck us about the team, was just how lean they were. At the time they were operating out of a house, they were still cooking meals together,” said Cyan Banister, one of the company’s earliest investors and a partner at the multi-billion dollar venture firm, Founders Fund.
“The only thing they really ever spent money on, was food… It was one of these things where they weren’t extravagant, they were extremely purposeful about every dollar that they spent,” Banister said. “They basically slept at work, and were your typical startup story of being under the couch. Every time I met with them, the story was, in the very early stages was about the same for the first couple years, which was, we’re scraping Craigslist, we’re starting to get some traction.”
The idea of powering a Craigslist replacement with more of a marketplace model was something that appealed to Thumbtack’s earliest investor and champion, the serial entrepreneur and angel investor Jason Calcanis.
Thumbtack chief executive Marco Zappacosta
“I remember like it was yesterday when Marco showed me Thumbtack and I looked at this and I said, ‘So, why are you building this?’ And he said, ‘Well, if you go on Craigslist, you know, it’s like a crap shoot. You post, you don’t know. You read a post… you know… you don’t know how good the person is. There’re no reviews.’” Calcanis said. “He had made a directory. It wasn’t the current workflow you see in the app — that came in year three I think. But for the first three years, he built a directory. And he showed me the directory pages where he had a photo of the person, the services provided, the bio.”
The first three years were spent developing a list of vendors that the company had verified with a mailing address, a license, and a certificate of insurance for people who needed some kind of service. Those three features were all Calcanis needed to validate the deal and pull the trigger on an initial investment.
“That’s when I figured out my personal thesis of angel investing,” Calcanis said.
“Some people are market based; some people want to invest in certain demographics or psychographics; immigrant kids or Stanford kids, whatever. Mine is just, ‘Can you make a really interesting product and are your decisions about that product considered?’ And when we discuss those decisions, do I feel like you’re the person who should build this product for the world And it’s just like there’s a big sign above Marco’s head that just says ‘Winner! Winner! Winner!’”
Indeed, it looks like Zappacosta and his company are now running what may be their victory lap in their tenth year as a private company. Thumbtack will be profitable by 2019 and has rolled out a host of new products in the last six months.
Their thesis, which flew in the face of the conventional wisdom of the day, was to build a product which offered listings of any service a potential customer could want in any geography across the U.S. Other companies like Handy and TaskRabbit focused on the home, but on Thumbtack (like any good community message board) users could see postings for anything from repairman to reiki lessons and magicians to musicians alongside the home repair services that now make up the bulk of its listings.
“It’s funny, we had business plans and documents that we wrote and if you look back, the vision that we outlined then, is very similar to the vision we have today. We honestly looked around and we said, ‘We want to solve a problem that impacts a huge number of people. The local services base is super inefficient. It’s really difficult for customers to find trustworthy, reliable people who are available for the right price,’” said Sander Daniels, a co-founder at the company.
“For pros, their number one concern is, ‘Where do I put money in my pocket next? How do I put food on the table for my family next?’ We said, ‘There is a real human problem here. If we can connect these people to technology and then, look around, there are these global marketplace for products: Amazon, Ebay, Alibaba, why can’t there be a global marketplace for services?’ It sounded crazy to say it at the time and it still sounds crazy to say, but that is what the dream was.”
Daniels acknowledges that the company changed the direction of its product, the ways it makes money, and pivoted to address issues as they arose, but the vision remained constant.
Meanwhile, other startups in the market have shifted their focus. Indeed as Handy has shifted to more of a professional services model rather than working directly with consumers and TaskRabbit has been acquired by Ikea, Thumbtack has doubled down on its independence and upgrading its marketplace with automation tools to make matching service providers with customers that much easier.
Thumbtack processes about $1 billion a year in business for its service providers in roughly 1,000 professional categories.
Now, the matching feature is getting an upgrade on the consumer side. Earlier this month the company unveiled Instant Results — a new look for its website and mobile app — that uses all of the data from its 200,000 services professionals to match with the 30 professionals that best correspond to a request for services. It’s among the highest number of professionals listed on any site, according to Zappacosta. The next largest competitor, Yelp, has around 115,000 listings a year. Thumbtack’s professionals are active in a 90 day period.
Filtering by price, location, tools and schedule, anyone in the U.S. can find a service professional for their needs. It’s the culmination of work processing nine years and 25 million requests for services from all of its different categories of jobs.
It’s a long way from the first version of Thumbtack, which had a “buy” tab and a “sell” tab; with the “buy” side to hire local services and the “sell” to offer them.
“From the very early days… the design was to iterate beyond the traditional model of business listing directors. In that, for the consumer to tell us what they were looking for and we would, then, find the right people to connect them to,” said Daniels. “That functionality, the request for quote functionality, was built in from v.1 of the product. If you tried to use it then, it wouldn’t work. There were no businesses on the platform to connect you with. I’m sure there were a million bugs, the UI and UX were a disaster, of course. That was the original version, what I remember of it at least.”
It may have been a disaster, but it was compelling enough to get the company its $1.2 million angel round — enough to barely develop the product. That million dollar investment had to last the company through the nuclear winter of America’s recession years, when venture capital — along with every other investment class — pulled back.
“We were pounding the pavement trying to find somebody to give us money for a Series A round,” Daniels said. “That was a very hard period of the company’s life when we almost went out of business, because nobody would give us money.”
That was a pre-revenue period for the company, which experimented with four revenue streams before settling on the one that worked the best. In the beginning the service was free, and it slowly transitioned to a commission model. Then, eventually, the company moved to a subscription model where service providers would pay the company a certain amount for leads generated off of Thumbtack.
“We weren’t able to close the loop,” Daniels said. “To make commissions work, you have to know who does the job, when, for how much. There are a few possible ways to collect all that information, but the best one, I think, is probably by hosting payments through your platform. We actually built payments into the platform in 2011 or 2012. We had significant transaction volume going through it, but we then decided to rip it out 18 months later, 24 months later, because, I think we had kind of abandoned the hope of making commissions work at that time.”
While Thumbtack was struggling to make its bones, Twitter, Facebook, and Pinterest were raking in cash. The founders thought that they could also access markets in the same way, but investors weren’t interested in a consumer facing business that required transactions — not advertising — to work. User generated content and social media were the rage, but aside from Uber and Lyft the jury was still out on the marketplace model.
“For our company that was not a Facebook or a Twitter or Pinterest, at that time, at least, that we needed revenue to show that we’re going to be able to monetize this,” Daniels said. “We had figured out a way to sign up pros at enormous scale and consumers were coming online, too. That was showing real promise. We said, ‘Man, we’re a hot ticket, we’re going to be able to raise real money.’ Then, for many reasons, our inexperience, our lack of revenue model, probably a bunch of stuff, people were reluctant to give us money.”
The company didn’t focus on revenue models until the fall of 2011, according to Daniels. Then after receiving rejection after rejection the company’s founders began to worry. “We’re like, ‘Oh, shit.’ November of 2009 we start running these tests, to start making money, because we might not be able to raise money here. We need to figure out how to raise cash to pay the bills, soon,” Daniels recalled.
The experience of almost running into the wall put the fear of god into the company. They managed to scrape out an investment from Javelin, but the founders were convinced that they needed to find the right revenue number to make the business work with or without a capital infusion. After a bunch of deliberations, they finally settled on $350,000 as the magic number to remain a going concern.
“That was the metric that we were shooting towards,” said Daniels. “It was during that period that we iterated aggressively through these revenue models, and, ultimately, landed on a paper quote. At the end of that period then Sequoia invested, and suddenly, pros supply and consumer demand and revenue model all came together and like, ‘Oh shit.’”
Finding the right business model was one thing that saved the company from withering on the vine, but another choice was the one that seemed the least logical — the idea that the company should focus on more than just home repairs and services.
The company’s home category had lots of competition with companies who had mastered the art of listing for services on Google and getting results. According to Daniels, the company couldn’t compete at all in the home categories initially.
“It turned out, randomly … we had no idea about this … there was not a similarly well developed or mature events industry,” Daniels said. “We outperformed in events. It was this strategic decision, too, that, on all these 1,000 categories, but it was random, that over the last five years we are the, if not the, certainly one of the leading events service providers in the country. It just happened to be that we … I don’t want to say stumbled into it … but we found these pockets that were less competitive and we could compete in and build a business on.”
The focus on geographical and services breadth — rather than looking at building a business in a single category or in a single geography meant that Zappacosta and company took longer to get their legs under them, but that they had a much wider stance and a much bigger base to tap as they began to grow.
“Because of naivete and this dreamy ambition that we’re going to do it all. It was really nothing more strategic or complicated than that,” said Daniels. “When we chose to go broad, we were wandering the wilderness. We had never done anything like this before.”
From the company’s perspective, there were two things that the outside world (and potential investors) didn’t grasp about its approach. The first was that a perfect product may have been more competitive in a single category, but a good enough product was better than the terrible user experiences that were then on the market. “You can build a big company on this good enough product, which you can then refine over the course of time to be greater and greater,” said Daniels.
The second misunderstanding is that the breadth of the company let it scale the product that being in one category would have never allowed Thumbtack to do. Cross selling and upselling from carpet cleaners to moving services to house cleaners to bounce house rentals for parties — allowed for more repeat use.
More repeat use meant more jobs for services employees at a time when unemployment was still running historically high. Even in 2011, unemployment remained stubbornly high. It wasn’t until 2013 that the jobless numbers began their steady decline.
There’s a question about whether these gig economy jobs can keep up with the changing times. Now, as unemployment has returned to its pre-recession levels, will people want to continue working in roles that don’t offer health insurance or retirement benefits? The answer seems to be “yes” as the Thumbtack platform continues to grow and Uber and Lyft show no signs of slowing down.
“At the time, and it still remains one of my biggest passions, I was interested in how software could create new meaningful ways of working,” said Banister of the Thumbtack deal. “That’s the criteria I was looking for, which is, does this shift how people find work? Because I do believe that we can create jobs and we can create new types of jobs that never existed before with the platforms that we have today.”