Trump promotes Michael Kratsios to US Chief Technology Officer

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More than two years into the Trump administration, the long vacant post of U.S. Chief Technology Officer will be filled. Bloomberg first reported that today Trump is elevating Michael Kratsios, current deputy U.S. CTO, to the nation’s top tech position. Prior to his experience within the Trump administration, Kratsios served as chief of staff at Peter Thiel’s investment firm Thiel Capital and as chief financial officer at another Thiel project, the hedge fund Clarium Capital.

The U.S. CTO role was created during the Obama years and three CTOs have served to date, the last of which was former Googler Megan Smith, known for leading early acquisitions at Google before her move to Google.org.

The CTO position advises the president on tech issues, works to shape tech policy and importantly serves as a link to the private sector. In contrast with his predecessors, Kratsios brings a distinct venture capital-colored perspective to the role, which sits within the White House Office of Science and Technology Policy.

Scientists use drone to map Icelandic cave in preparation for Mars exploration

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Researchers from the SETI Institute and Astrobotic Technology have demonstrated a way that astronauts may be able to map Martian caves using a Lidar-equipped drone that can travel autonomously without GPS.

The post Scientists use drone to map Icelandic cave in preparation for Mars exploration appeared first on Digital Trends.

Tech regulation in Europe will only get tougher

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European governments have been bringing the hammer down on tech in recent months, slapping record fines and stiff regulations on the largest imports out of Silicon Valley. Despite pleas from the world’s leading companies and Europe’s eroding trust in government, European citizens’ staunch support for regulation of new technologies points to an operating environment that is only getting tougher.

According to a roughly 25-page report recently published by a research arm out of Spain’s IE University, European citizens remain skeptical of tech disruption and want to handle their operators with kid gloves, even at a cost to the economy.

The survey was led by the IE’s Center for the Governance of Change — an IE-hosted research institution focused on studying “the political, economic, and societal implications of the current technological revolution and advances solutions to overcome its unwanted effects.” The “European Tech Insights 2019” report surveyed roughly 2,600 adults from various demographics across seven countries (France, Germany, Ireland, Italy, Spain, The Netherlands, and the UK) to gauge ground-level opinions on ongoing tech disruption and how government should deal with it.

The report does its fair share of fear-mongering and some of its major conclusions come across as a bit more “clickbaity” than insightful. However, the survey’s more nuanced data and line of questioning around specific forms of regulation offer detailed insight into how the regulatory backdrop and operating environment for European tech may ultimately evolve.

 

Distractions

To fund Y Combinator’s top startups, VCs scoop them before Demo Day

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Hundreds gathered this week at San Francisco’s Pier 48 to see the more than 200 companies in Y Combinator’s Winter 2019 cohort present their two-minute pitches. The audience of venture capitalists, who collectively manage hundreds of billions of dollars, noted their favorites. The very best investors, however, had already had their pick of the litter.

What many don’t realize about the Demo Day tradition is that pitching isn’t a requirement; in fact, some YC graduates skip out on their stage opportunity altogether. Why? Because they’ve already raised capital or are in the final stages of closing a deal.

ZeroDown, Overview.AI and Catch are among the startups in YC’s W19 batch that forwent Demo Day this week, having already pocketed venture capital. ZeroDown, a financing solution for real estate purchases in the Bay Area, raised a round upwards of $10 million at a $75 million valuation, sources tell TechCrunch. ZeroDown hasn’t responded to requests for comment, nor has its rumored lead investor: Goodwater Capital.

Without requiring a down payment, ZeroDown purchases homes outright for customers and helps them work toward ownership with monthly payments determined by their income. The business was founded by Zenefits co-founder and former chief technology officer Laks Srini, former Zenefits chief operating officer Abhijeet Dwivedi and Hari Viswanathan, a former Zenefits staff engineer.

The founders’ experience building Zenefits, despite its shortcomings, helped ZeroDown garner significant buzz ahead of Demo Day. Sources tell TechCrunch the startup had actually raised a small seed round ahead of YC from former YC president Sam Altman, who recently stepped down from the role to focus on OpenAI, an AI research organization. Altman is said to have encouraged ZeroDown to complete the respected Silicon Valley accelerator program, which, if nothing else, grants its companies a priceless network with which no other incubator or accelerator can compete.

Overview .AI’s founders’ resumes are impressive, too. Russell Nibbelink and Christopher Van Dyke were previously engineers at Salesforce and Tesla, respectively. An industrial automation startup, Overview is developing a smart camera capable of learning a machine’s routine to detect deviations, crashes or anomalies. TechCrunch hasn’t been able to get in touch with Overview’s team or pinpoint the size of its seed round, though sources confirm it skipped Demo Day because of a deal.

Catch, for its part, closed a $5.1 million seed round co-led by Khosla Ventures, NYCA Partners and Steve Jang prior to Demo Day. Instead of pitching their health insurance platform at the big event, Catch published a blog post announcing its first feature, The Catch Health Explorer.

“This is only the first glimpse of what we’re building this year,” Catch wrote in the blog post. “In a few months, we’ll be bringing end-to-end health insurance enrollment for individual plans into Catch to provide the best health insurance enrollment experience in the country.”

TechCrunch has more details on the healthtech startup’s funding, which included participation from Kleiner Perkins, the Urban Innovation Fund and the Graduate Fund.

Four more startups, Truora, Middesk, Glide and FlockJay had deals in the final stages when they walked onto the Demo Day stage, deciding to make their pitches rather than skip the big finale. Sources tell TechCrunch that renowned venture capital firm Accel invested in both Truora and Middesk, among other YC W19 graduates. Truora offers fast, reliable and affordable background checks for the Latin America market, while Middesk does due diligence for businesses to help them conduct risk and compliance assessments on customers.

Finally, Glide, which allows users to quickly and easily create well-designed mobile apps from Google Sheets pages, landed support from First Round Capital, and FlockJay, the operator an online sales academy that teaches job seekers from underrepresented backgrounds the skills and training they need to pursue a career in tech sales, secured investment from Lightspeed Venture Partners, according to sources familiar with the deal.

Pre-Demo Day M&A

Raising ahead of Demo Day isn’t a new phenomenon. Companies, thanks to the invaluable YC network, increase their chances at raising, as well as their valuation, the moment they enroll in the accelerator. They can begin chatting with VCs when they see fit, and they’re encouraged to mingle with YC alumni, a process that can result in pre-Demo Day acquisitions.

This year, Elph, a blockchain infrastructure startup, was bought by Brex, a buzzworthy fintech unicorn that itself graduated from YC only two years ago. The deal closed just one week before Demo Day. Brex’s head of engineering, Cosmin Nicolaescu, tells TechCrunch the Elph five-person team — including co-founders Ritik Malhotra and Tanooj Luthra, who previously founded the Box-acquired startup Steem — were being eyed by several larger companies as Brex negotiated the deal.

“For me, it was important to get them before batch day because that opens the floodgates,” Nicolaescu told TechCrunch. “The reason why I really liked them is they are very entrepreneurial, which aligns with what we want to do. Each of our products is really like its own business.”

Of course, Brex offers a credit card for startups and has no plans to dabble with blockchain or cryptocurrency. The Elph team, rather, will bring their infrastructure security know-how to Brex, helping the $1.1 billion company build its next product, a credit card for large enterprises. Brex declined to disclose the terms of its acquisition.

Hunting for the best deals

Y Combinator partners Michael Seibel and Dalton Caldwell, and moderator Josh Constine, speak onstage during TechCrunch Disrupt SF 2018. (Photo by Kimberly White/Getty Images)

Ultimately, it’s up to startups to determine the cost at which they’ll give up equity. YC companies raise capital under the SAFE model, or a simple agreement for future equity, a form of fundraising invented by YC. Basically, an investor makes a cash investment in a YC startup, then receives company stock at a later date, typically upon a Series A or post-seed deal. YC made the switch from investing in startups on a pre-money safe basis to a post-money safe in 2018 to make cap table math easier for founders.

Michael Seibel, the chief executive officer of YC, says the accelerator works with each startup to develop a personalized fundraising plan. The businesses that raise at valuations north of $10 million, he explained, do so because of high demand.

“Each company decides on the amount of money they want to raise, the valuation they want to raise at, and when they want to start fundraising,” Seibel told TechCrunch via email. “YC is only an advisor and does not dictate how our companies operate. The vast majority of companies complete fundraising in the 1 to 2 months after Demo Day. According to our data, there is little correlation between the companies who are most in demand on Demo Day and ones who go on to become extremely successful. Our advice to founders is not to over optimize the fundraising process.”

Though Seibel says the majority raise in the months following Demo Day, it seems the very best investors know to be proactive about reviewing and investing in the batch before the big event.

Khosla Ventures, like other top VC firms, meets with YC companies as early as possible, partner Kristina Simmons tells TechCrunch, even scheduling interviews with companies in the period between when a startup is accepted to YC to before they actually begin the program. Another Khosla partner, Evan Moore, echoed Seibel’s statement, claiming there isn’t a correlation between the future unicorns and those that raise capital ahead of Demo Day. Moore is a co-founder of DoorDash, a YC graduate now worth $7.1 billion. DoorDash closed its first round of capital in the weeks following Demo Day.

“I think a lot of the activity before demo day is driven by investor FOMO,” Moore wrote in an email to TechCrunch. “I’ve had investors ask me how to get into a company without even knowing what the company does! I mostly see this as a side effect of a good thing: YC has helped tip the scale toward founders by creating an environment where investors compete. This dynamic isn’t what many investors are used to, so every batch some complain about valuations and how easy the founders have it, but making it easier for ambitious entrepreneurs to get funding and pursue their vision is a good thing for the economy.”

This year, given the number of recent changes at YC — namely the size of its latest batch — there was added pressure on the accelerator to showcase its best group yet. And while some did tell TechCrunch they were especially impressed with the lineup, others indeed expressed frustration with valuations.

Many YC startups are fundraising at valuations at or higher than $10 million. For context, that’s actually perfectly in line with the median seed-stage valuation in 2018. According to PitchBook, U.S. startups raised seed rounds at a median post-valuation of $10 million last year; so far this year, companies are raising seed rounds at a slightly higher post-valuation of $11 million. With that said, many of the startups in YC’s cohorts are not as mature as the average seed-stage company. Per PitchBook, a company can be several years of age before it secures its seed round.

Nonetheless, pricey deals can come as a disappointment to the seed investors who find themselves at YC every year but because their reputations aren’t as lofty as say, Accel, aren’t able to book pre-Demo Day meetings with YC’s top of class.

The question is who is Y Combinator serving? And the answer is founders, not investors. YC is under no obligation to serve up deals of a certain valuation nor is it responsible for which investors gain access to its best companies at what time. After all, startups are raking in larger and larger rounds, earlier in their lifespans; shouldn’t YC, a microcosm for the Silicon Valley startup ecosystem, advise their startups to charge the best investors the going rate?

Colorado in the hunt for a different kind of HQ2 from Bay Area company offering more than 1,400 jobs

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Amazon passed by the Front Range in its hunt for a second headquarters, but a San Francisco company with technology that speeds up background checks is giving Denver serious consideration for its HQ2.

The Colorado Economic Development Commission on Thursday morning approved $27.8 million in job growth incentive tax credits for an unnamed company, called Project Validate by the commission, in return for it hiring up to 1,472 people in the state over the next eight years.

“We are seriously considering Denver,” a company executive who didn’t provide her name told the commission. “We took advantage of this trip to look at headquarter sites.”

The company, founded in 2014, can’t easily grow anymore in the Bay Area, she said, adding that whatever city landed its HQ2 would see the bulk of its future hiring. Texas and Georgia are also in the running.

EDC board member Chris Franz asked how difficult it would be for the company to hire its quota of technology workers, given the shortages that already exist. That was an issue raised when Amazon was considering Denver for its HQ2 and 50,000 potential hires.

RELATED: Amazon’s gamble on finding 1,500 workers for robotic warehouse in Thornton may not have been a gamble after all

The jobs the company brings will pay an average wage of $138,050, which is more than double the median wage in Denver County. It will also be more than enough to support the typical rents found in the metro area, which was a consideration the company weighed.

If Project Validate picks Denver, it will be the latest in a series of northern California firms seeking relief from the area’s crowded real estate and constrained labor markets, said Michelle Hadwiger, deputy director of the Colorado Office of Economic Development and International Trade.

The Project Validate executive said her team was impressed by the talent pool, the available office space, the relative affordability of housing, and the transportation options.

The commission also approved three other incentive requests Thursday. Project Guard, a provider of home service plans, was granted $3.1 million in job growth incentives if it brings 100 information tech and software engineering workers to Denver or Broomfield. Those jobs would pay an average annual wage of $132,000.

Project Neve, an outdoor recreation and real estate development company already based in Colorado, received $1.7 million in incentives to create a marketing and technical support center employing 132 people at an average annual wage of $138,883.

The most novel request came from Project Capture, a Singapore company that is designing a satellite that can track and capture space debris and then fling it down toward earth to incinerate in the atmosphere.

The company wants to establish a U.S. base to improve its chances of winning U.S. contracts. Project Capture received approval for $1 million in incentives, contingent on it employing 54 workers paying an average wage of $108,833 in Colorado.

Facebook’s AI couldn’t spot mass murder

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Facebook has given another update on measures it took and what more it’s doing in the wake of the livestreamed video of a gun massacre by a far right terrorist who killed 50 people in two mosques in Christchurch, New Zealand.

Earlier this week the company said the video of the slayings had been viewed less than 200 times during the livestream broadcast itself, and about about 4,000 times before it was removed from Facebook — with the stream not reported to Facebook until 12 minutes after it had ended.

None of the users who watched the killings unfold on the company’s platform in real-time apparently reported the stream to the company, according to the company.

It also previously said it removed 1.5 million versions of the video from its site in the first 24 hours after the livestream, with 1.2M of those caught at the point of upload — meaning it failed to stop 300,000 uploads at that point. Though as we pointed out in our earlier report those stats are cherrypicked — and only represent the videos Facebook identified. We found other versions of the video still circulating on its platform 12 hours later.

In the wake of the livestreamed terror attack, Facebook has continued to face calls from world leaders to do more to make sure such content cannot be distributed by its platform.

The prime minister of New Zealand, Jacinda Ardern told media yesterday that the video “should not be distributed, available, able to be viewed”, dubbing it: “Horrendous.”

She confirmed Facebook had been in contact with her government but emphasized that in her view the company has not done enough.

She also later told the New Zealand parliament: “We cannot simply sit back and accept that these platforms just exist and that what is said on them is not the responsibility of the place where they are published. They are the publisher. Not just the postman.”

We asked Facebook for a response to Ardern’s call for online content platforms to accept publisher-level responsibility for the content they distribute. Its spokesman avoided the question — pointing instead to its latest piece of crisis PR which it titles: “A Further Update on New Zealand Terrorist Attack”.

Here it writes that “people are looking to understand how online platforms such as Facebook were used to circulate horrific videos of the terrorist attack”, saying it therefore “wanted to provide additional information from our review into how our products were used and how we can improve going forward”, before going on to reiterate many of the details it has previously put out.

Including that the massacre video was quickly shared to the 8chan message board by a user posting a link to a copy of the video on a file-sharing site. This was prior to Facebook itself being alerted to the video being broadcast on its platform.

It goes on to imply 8chan was a hub for broader sharing of the video — claiming that: “Forensic identifiers on many of the videos later circulated, such as a bookmarks toolbar visible in a screen recording, match the content posted to 8chan.”

So it’s clearly trying to make sure it’s not singled out by political leaders seek policy responses to the challenge posed by online hate and terrorist content.

Further details it chooses to dwell on in the update is how the AIs it uses to aid the human content review process of flagged Facebook Live streams are in fact tuned to “detect and prioritize videos that are likely to contain suicidal or harmful acts” — with the AI pushing such videos to the top of human moderators’ content heaps, above all the other stuff they also need to look at.

Clearly “harmful acts” were involved in the New Zealand terrorist attack. Yet Facebook’s AI was unable to detected a massacre unfolding in real time. A mass killing involving an automatic weapon slipped right under the robot’s radar.

Facebook explains this by saying it’s because it does not have the training data to create an algorithm that understands it’s looking at mass murder unfolding in real time.

It also implies the task of training an AI to catch such a horrific scenario is exacerbated by the proliferation of videos of first person shooter videogames on online content platforms.

It writes: “[T]his particular video did not trigger our automatic detection systems. To achieve that we will need to provide our systems with large volumes of data of this specific kind of content, something which is difficult as these events are thankfully rare. Another challenge is to automatically discern this content from visually similar, innocuous content – for example if thousands of videos from live-streamed video games are flagged by our systems, our reviewers could miss the important real-world videos where we could alert first responders to get help on the ground.”

The videogame element is a chilling detail to consider.

It suggests that a harmful real-life act that mimics a violent video game might just blend into the background, as far as AI moderation systems are concerned; invisible in a sea of innocuous, virtually violent content churned out by gamers. (Which in turn makes you wonder whether the Internet-steeped killer in Christchurch knew — or suspected — that filming the attack from a videogame-esque first person shooter perspective might offer a workaround to dupe Facebook’s imperfect AI watchdogs.)

Facebook post is doubly emphatic that AI is “not perfect” and is “never going to be perfect”.

“People will continue to be part of the equation, whether it’s the people on our team who review content, or people who use our services and report content to us,” it writes, reiterating yet again that it has ~30,000 people working in “safety and security”, about half of whom are doing the sweating hideous toil of content review.

This is, as we’ve said many times before, a fantastically tiny number of human moderators given the vast scale of content continually uploaded to Facebook’s 2.2BN+ user platform.

Moderating Facebook remains a hopeless task because so few humans are doing it.

Moreover AI can’t really help. (Later in the blog post Facebook also writes vaguely that there are “millions” of livestreams broadcast on its platform every day, saying that’s why adding a short broadcast delay — such as TV stations do — wouldn’t at all help catch inappropriate real-time content.)

At the same time Facebook’s update makes it clear how much its ‘safety and security’ systems rely on unpaid humans too: Aka Facebook users taking the time and mind to report harmful content.

Some might say that’s an excellent argument for a social media tax.

The fact Facebook did not get a single report of the Christchurch massacre livestream while the terrorist attack unfolded meant the content was not prioritized for “accelerated review” by its systems, which it explains prioritize reports attached to videos that are still being streamed — because “if there is real-world harm we have a better chance to alert first responders and try to get help on the ground”.

Though it also says it expanded its acceleration logic last year to “also cover videos that were very recently live, in the past few hours”.

But again it did so with a focus on suicide prevention — meaning the Christchurch video would only have been flagged for acceleration review in the hours after the stream ended if it had been reported as suicide content.

So the ‘problem’ is that Facebook’s systems don’t prioritize mass murder.

“In [the first] report, and a number of subsequent reports, the video was reported for reasons other than suicide and as such it was handled according to different procedures,” it writes, adding it’s “learning from this” and “re-examining our reporting logic and experiences for both live and recently live videos in order to expand the categories that would get to accelerated review”.

No shit.

Facebook also discusses its failure to stop versions of the massacre video from resurfacing on its platform, having been — as it tells it — “so effective” at preventing the spread of propaganda from terrorist organizations like ISIS with the use of image and video matching tech.

It claims  its tech was outfoxed in this case by “bad actors” creating many different edited versions of the video to try to thwart filters, as well as by the various ways “a broader set of people distributed the video and unintentionally made it harder to match copies”.

So, essentially, the ‘virality’ of the awful event created too many versions of the video for Facebook’s matching tech to cope.

“Some people may have seen the video on a computer or TV, filmed that with a phone and sent it to a friend. Still others may have watched the video on their computer, recorded their screen and passed that on. Websites and pages, eager to get attention from people seeking out the video, re-cut and re-recorded the video into various formats,” it writes, in what reads like another attempt to spread blame for the amplification role that its 2.2BN+ user platform plays.

In all Facebook says it found and blocked more than 800 visually-distinct variants of the video that were circulating on its platform.

It reveals it resorted to using audio matching technology to try to detect videos that had been visually altered but had the same soundtrack. And again claims it’s trying to learn and come up with better techniques for blocking content that’s being re-shared widely by individuals as well as being rebroadcast by mainstream media. So any kind of major news event, basically.

In a section on next steps Facebook says improving its matching technology to prevent the spread of inappropriate viral videos being spread is its priority.

But audio matching clearly won’t help if malicious re-sharers just both re-edit the visuals and switch the soundtrack too in future.

It also concedes it needs to be able to react faster “to this kind of content on a live streamed video” — though it has no firm fixes to offer there either, saying only that it will explore “whether and how AI can be used for these cases, and how to get to user reports faster”.

Another priority it claims among its “next steps” is fighting “hate speech of all kinds on our platform”, saying this includes more than 200 white supremacist organizations globally “whose content we are removing through proactive detection technology”.

It’s glossing over plenty of criticism on that front too though — including research that suggests banned far right hate preachers are easily able to evade detection on its platform. Plus its own foot-dragging on shutting down far right extremists. (Facebook only finally banned one infamous UK far right activist last month, for example.)

In its last PR sop, Facebook says it’s committed to expanding its industry collaboration to tackle hate speech via the Global Internet Forum to Counter Terrorism (GIFCT), which formed in 2017 as platforms were being squeezed by politicians to scrub ISIS content — in a collective attempt to stave off tighter regulation.

“We are experimenting with sharing URLs systematically rather than just content hashes, are working to address the range of terrorists and violent extremists operating online, and intend to refine and improve our ability to collaborate in a crisis,” Facebook writes now, offering more vague experiments as politicians call for content responsibility.

DIA is mum on details after placing chief information officer on investigatory leave

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DENVER, CO. - Feb. 20, 2015: ...
Joe Amon, The Denver Post

Denver International Airport.

A senior-level official at Denver International Airport has been placed on investigatory leave, but DIA isn’t revealing why — and the official also says he hasn’t been told the reason.

Chief Information Officer Robert Kastelitz was placed on paid leave starting on Feb. 27, according to a notification letter obtained by The Denver Post. Kastelitz oversees information technology services and several related contracts at the airport,

DIA provided Kastelitz’s notification letter under an open-records request. In response to The Post’s questions and further requests for public records, Stacey Stegman, DIA’s senior vice president of communications, declined to provide any details about the investigation.

That includes what it concerns, who is conducting it, and whether it is an internal or external probe.

“In order to protect the integrity of the pending investigation, we are unable to provide any comment or details at this time,” DIA responded to several questions.

Reached by phone Thursday afternoon, Kastelitz said he has been given no detail about the investigation.

“They never gave me a reason for this,” he said, and he did not know who was conducting the probe.

Kastelitz said he could not discuss the matter further because DIA’s notification letter included a “gag order.” That provision explicitly applies to communication with anyone in city government or with employees of city contractors.

The Feb. 27 letter officially informed Kastelitz that he was being placed on investigatory leave and noted requirements he must follow. But it did not specify the reason he was placed on leave. The letter was signed by Gisela Shanahan, DIA’s chief financial officer.

DIA has declined further comment on Kastelitz’s job status.

Kastelitz’s main title is senior vice president for technologies. He returned to DIA in 2009 after a prior stint working at the airport earlier that decade; in between, he worked for the Nevada Supreme Court in an information technology-related position, according to his LinkedIn profile. DIA says Kastelitz received his current job title in 2013.

While he’s on leave, Kastelitz will continue to receive his $204,163 annual salary, Stegman said.

If you know more about this story, email the reporter at jmurray@denverpost.com or call 303-954-1405.

How to save the third wave of technology from itself

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As The New York Times recently profiled, new startups are arising to solve the housing crisis. These startups disrupt what ex-AOL CEO Steve Case calls the “Third Wave,” industries with large social impact. Think: housing, healthcare and finance.

To survive, these companies need to ensure compliance with regulations early on, because mistakes here can have large social consequences. To help new entrants survive in these industries, two closely related technologies — legal technology (“legaltech”) and regulation technology (“regtech”) — help companies navigate rules embedded in text, such as contracts or regulations. Without them, incumbents, who have the most resources to hire lawyers to navigate these rules, are set up to dominate in the Third Wave.

Third Wave startups must tread carefully. Unaudited prefabricated housing designs might mean the use of subpar safety measures and tenant deaths during an earthquake. Oversights in financial transactions, for instance, may unintentionally facilitate money laundering. Privacy violations in healthcare data could lead to an unfair increase in insurance premiums for affected individuals.

To mitigate these social harms, regulations can be complex. In finance, for instance, the new Markets in Financial Instruments Directive has 30,000 pages. To comply, banks can spend $1 billion a year (often 20 percent of their operational budget). Citigroup reportedly hired 30,000 lawyers, auditors and compliance officers in 2014.

For startups, ignorance is no longer a viable strategy. In just the past three years, fintech startups have suffered more than $200 million (almost 5 percent of the total venture dollars invested over that same period) in regulatory fines: 50 percent involving consumer mistreatment and 25 percent involving privacy violations. Zenefits fired 17 percent of its staff, including its CEO, after violating insurance brokerage laws. LendingClub paused operations and cut 10 percent of its workforce after violating state usury and unfair dealing laws.

Companies cannot — and should not — avoid their regulatory and social responsibilities.

Uber — once infamous for its “do first, ask for forgiveness later” strategies — now engages with regulators directly, by building partnerships and applying for permits. VCs, such as Evan Burfield in Regulatory Hacking, argue that these strategies are critical for the next wave of startups.

This work requires not only perseverance but also tremendous resources. Large companies, such as J.P. Morgan or even Uber, have the most money and staff to navigate an increasingly complex regulatory landscape. Because of this, they are in the best position to shape the future and the Third Wave.

Legaltech and regtech can change this trend. These technologies use anything from data analytics to decision trees to help companies navigate rules embedded in text, such as regulations and contracts. Since technology is scalable in ways that hiring 30,000 lawyers is not, small innovators can better compete in a big company’s game.

In one example, Fenergo transformed a highly manual document review for Know Your Customer (KYC) regulations using text analysis and rule logic, speeding up the process by 37 percent.

Other related startups are reducing the costs associated with complying with corporate contracts (such as Ironclad), bankruptcy (such as UpSolve), zoning requirements generally (such as Envelope and Symbium) and for accessory dwelling units (such as Cover), permitting processes (such as Camino.ai) and energy standards (such as Cove Tool).

Because of this environment, analysts are bullish about these technologies. In 2018, nearly $1 billion has been invested in legaltech. Spend on regtech in finance alone is estimated to rise from $10 billion in 2017 to $76 billion in 2022 (a 700 percent increase in five years). For comparison, spend on the sharing economy is estimated to rise from $18 billion in 2017 to $40 billion in 2022.

In the Third Wave, companies cannot — and should not — avoid their regulatory and social responsibilities. If the scandals of Uber and Facebook are any indication, when a company violates laws or loses its integrity, the public and the stock market respond in kind. Journalistic coverage of breaches and unethical data practices has captured public attention. Waves of data regulation have passed across major jurisdictions, such as China, California and Brazil.

Embracing legaltech and regtech can plant long-term competitive advantages. Adopting technology that automates data protection, for instance, can create better customer experiences. By safely analyzing more data, even smaller companies can quickly generate insights and build programs that provide value to their customers.

Technology can empower companies both large and small to embrace the mitigation of social harms and the promotion of positive impact.

Startup executives should take notice.

Cocktail chattables: Real estate is being fueled by strength in employment, and mortgage rates have dropped 0.6 percent since November, sitting lower than a year ago at just over 4 percent

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While attention-grabbing headlines do the trick, these can sometimes be deceiving to the overall story’s message. It’s important to look beyond the headline and read the entire story, as this will likely reveal more than the snippet that caught your attention. For example, currently real estate in Denver and most of the country continues to benefit from a nice, healthy housing market — despite what some headlines may say.

Steve Blank, LIV Sotheby's International Realty
Provided by LIV Sotheby’s International Realty

Steve Blank, LIV Sotheby’s International Realty

Real estate is currently being fueled by strength in employment and mortgage rates dropping 0.6 percent since November, sitting lower than it was a year ago, at just over 4 percent.

In Q4 of 2018, our real estate market slowed down from its strength that was building since 2012. Last year, Denver enjoyed 8.3% value appreciation with projections at 6-7% for 2019 — still pretty great.

Reports suggesting property values are going down should be understood as relative in context. Values are not rising at the same annual rate of +/- 10%. However, they are eclipsing inflation by a multiple of three. So, annual home appreciation has gone from “super strong” to “pretty darn good.”

Values are not decreasing but are just not increasing to levels that many sellers desire. Houses that are priced correctly and present well still sell quickly (sometimes with multiple offers). Typically, the higher the price range, the longer a home will take to sell.

On average, luxury homes are taking 85-100 days to sell. Any price range can take two to four weeks longer to sell in 2019. Nationally, prices increased 4.5-5% and took 45 to 65 days to sell. Core Logic recently predicted national home values to rise 4.4% in 2019.

LIV Sotheby’s International Realty published its February 2019 year-to-date Denver numbers comparing the market to February 2018. The amount of properties sold was up 1% (all price ranges), the average days on the market was 40 vs. 32 days last year, and there were 12% more listings, which is encouraging. The average sold price is nearly 7% higher over the prior 12 months.

Luxury homes (over $1 million) have experienced a healthy market, but in a different fashion. In the last 12 months, (year-over-year) reports show the number of properties sold rose 46%, average days on the market was 105 days, and prices rose slightly to 1% higher.

I am always surprised at the amount of deals that fail to come together or fall apart after being under contract. According to MLS statistics, approximately 30% of all homes that go under contract will ultimately terminate for a variety of reasons: 1) low appraisals, 2) buyer didn’t qualify, 3) inspection items that could not be successfully negotiated.

Many of these issues are definitely avoidable. Buyers and sellers make plans based on contract dates, so it is disappointing and adds time-consuming stress when the process must start over.

Which brings us to No. 4: your choice of broker. A good, quality and well-experienced real estate broker helps you avoid costly mistakes, favorably negotiates inspections, and helps you navigate the complicated process. As a seller, interview two or three brokers, focusing on how well they will present your home to the market, how well they communicate and represent you, and who will achieve the best possible price in a reasonable time frame.

Do not choose the broker who tells you the highest price hoping to get the listing, as this leads to more time on the market and less net money. Be willing to pay for quality and value, as it will make and save you the most money.

Tell your broker how you prefer to be communicated with during any transaction. Texting and emails are excellent to relay updates and convey certain information.

However, using technology to navigate through the negotiation process of buying or selling a home will be the least effective communication form, leading to misinterpretations. Face-to-face communication, (when you can hear tone of voice or see body language) can only help any relationship, let alone important transactions.

So, today’s words of wisdom: Choose a great broker who understands how to use tools of technology to complement their real estate expertise. Because technology without ability and competence … is not much.

LIV SIR has 23 office locations in metro Denver and surrounding areas, including Boulder, Castle Rock, Castle Pines, Cherry Creek, Clayton Street, Denver Tech Center, downtown Denver, Evergreen and the resort communities of Breckenridge, Crested Butte, Telluride and the Vail Valley. For more information, call 303-893-3200 or visit LIVSothebysRealty.com.

The news and editorial staffs of The Denver Post had no role in this post’s preparation.

MoviePass co-founder goes full Black Mirror with the movie app PreShow

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Would you watch ads for 20 minutes to earn a free movie ticket? MoviePass co-founder Stacy Spikes bets you will, and he’s launching PreShow, a new app with some pretty advanced technology, to prove it.

The post MoviePass co-founder goes full Black Mirror with the movie app PreShow appeared first on Digital Trends.