Start Up: tech survivalists, predicting product success, Facebook v China, forecasting Apple, and more

Got a Fitbit for Christmas? You’re one of a smaller number than the company expected. Photo by janitors on Flickr.

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A selection of 9 links for you. Use them wisely. I’m @charlesarthur on Twitter. Observations and links welcome.

The Bad Product Fallacy: Don’t confuse “I don’t like it” with “That’s a bad product and it’ll fail” • andrewchen

The aforementioned Chen:


In the end, we all love to use our own personal judgement to quickly say yes or no to products. But the Bad Product Fallacy says our own opinions are terrible predictors of success, because tech is changing so quickly.

So instead, I leave you with a couple questions to ask when you are looking at a new product:

• If it looks like a toy, what happens if it’s successful with its initial audience and then starts to add a lot more features?
• If it looks like a luxury, what happens if it becomes much cheaper? Or much better, at the same price?
• If it’s a marketplace that doesn’t sell anything you’d buy, what happens when it starts stocking products and services you find valauble?
• If none of your friends use a social product, what happens when they win a niche and ultimately all your friends are using it too?

It’s hard to ask these questions, since they mostly imply nonlinear trajectories in product innovation. However, technology rarely progresses in a straight line – they grow exponentially, whether in utility, price/performance, or in network effect.


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Doomsday prep for the super-rich • The New Yorker

Evan Osnos on the rich techies who are getting ready for the apocalypse, just, y’know, in case:


How did a preoccupation with the apocalypse come to flourish in Silicon Valley, a place known, to the point of cliché, for unstinting confidence in its ability to change the world for the better?

Those impulses are not as contradictory as they seem. Technology rewards the ability to imagine wildly different futures, Roy Bahat, the head of Bloomberg Beta, a San Francisco-based venture-capital firm, told me. “When you do that, it’s pretty common that you take things ad infinitum, and that leads you to utopias and dystopias,” he said. It can inspire radical optimism—such as the cryonics movement, which calls for freezing bodies at death in the hope that science will one day revive them—or bleak scenarios. Tim Chang, the venture capitalist who keeps his bags packed, told me, “My current state of mind is oscillating between optimism and sheer terror.”

In recent years, survivalism has been edging deeper into mainstream culture. In 2012, National Geographic Channel launched “Doomsday Preppers,” a reality show featuring a series of Americans bracing for what they called S.H.T.F. (when the “shit hits the fan”). The première drew more than four million viewers, and, by the end of the first season, it was the most popular show in the channel’s history. A survey commissioned by National Geographic found that forty% of Americans believed that stocking up on supplies or building a bomb shelter was a wiser investment than a 401(k). Online, the prepper discussions run from folksy (“A Mom’s Guide to Preparing for Civil Unrest”) to grim (“How to Eat a Pine Tree to Survive”).


Apparently New Zealand is the place to be.
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Facebook is trying everything to re-enter China—and it’s not working • WSJ

Alyssa Abkowitz, Deepa Seetharaman and Eva Dou:


Facebook’s chances of getting back into China appeared to take a rare turn for the better when an employee noticed an official posting online: Beijing authorities had granted it a license to open a representative office in two office-tower suites in the capital.

Such permits typically give Western firms an initial China beachhead. This one, which Facebook won in late 2015, could have been a sign Beijing was ready to give the company another chance to connect with China’s roughly 700 million internet users, reopening the market as the social-media giant’s U.S.-growth prospects dimmed.

There was a catch. Facebook’s license was for three months, unusually short. Facebook executives found the limitation unexpected and frustrating, people familiar with the episode said.

Facebook never opened the office. The official posting disappeared and now exists as a ghost in cached versions of the government website. “We did, at one point in time, plan to have an office,” said Facebook spokeswoman Charlene Chian, “but we don’t today.”…

…After Google’s departure and declarations about human rights, government officials publicly called Google “unfriendly” and “irresponsible.” Within Facebook, said people familiar with the company, the view is Chinese leaders remain wary that, were they to grant Facebook access, the company might leave after deciding it can’t tolerate censorship after all—that Facebook, said one, might “pull a Google.”

While Facebook can’t be a social network in China just now, its top executives continue to urge Chinese companies to use it as an advertising platform.


Still can’t crack it.

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The data that turned the world upside down • Motherboard

Hannes Grassegger and Mikael Krogerus:


Remarkably reliable deductions could be drawn from simple online actions. For example, men who “liked” the cosmetics brand MAC were slightly more likely to be gay; one of the best indicators for heterosexuality was “liking” Wu-Tang Clan. Followers of Lady Gaga were most probably extroverts, while those who “liked” philosophy tended to be introverts. While each piece of such information is too weak to produce a reliable prediction, when tens, hundreds, or thousands of individual data points are combined, the resulting predictions become really accurate.

Kosinski and his team tirelessly refined their models. In 2012, Kosinski proved that on the basis of an average of 68 Facebook “likes” by a user, it was possible to predict their skin color (with 95% accuracy), their sexual orientation (88% accuracy), and their affiliation to the Democratic or Republican party (85 percent). But it didn’t stop there. Intelligence, religious affiliation, as well as alcohol, cigarette and drug use, could all be determined. From the data it was even possible to deduce whether deduce whether someone’s parents were divorced.


From there, it goes on to a company called Cambridge Analytica which did work for Ted Cruz, and Vote Leave, and Donald Trump. Long; involved; scary, in part because the US is so loose with data that anything can be known about anyone.
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Trump wants to downplay global warming. Louisiana won’t let him • Bloomberg

Christopher Flavelle:


On a recent morning in Baton Rouge, a thousand miles from where Senate Democrats were jousting with Donald Trump’s nominee to run the U.S. Environmental Protection Agency about whether humans are warming the planet, the future of U.S. climate policy was being crafted in a small room in the east wing of the Louisiana Capitol. The state’s 7,700-mile shoreline is disappearing at the fastest rate in the country. Officials had gathered to consider a method of deciding which communities to save—and which to abandon to the Gulf of Mexico.

Bren Haase, chief of planning for the Coastal Protection and Restoration Authority (CPRA), was presenting his team’s updated Coastal Master Plan. Five years in the making and comprising 6,000 pages of text and appendices, the document details $50 billion in investments over five decades in ridges, barrier islands, and marsh creation. Tucked into the plan was a number whose significance surpasses all others: 14 feet, the height beyond which Haase’s agency has concluded homes couldn’t feasibly be elevated.

In areas where a so-called 100-year flood is expected to produce between 3 feet and 14 feet of water, the plan recommends paying for homes to be raised and communities preserved. In places where flood depths are expected to exceed that height, residents would be offered money to leave.


Physics is so relentlessly indifferent to your petty dogma.
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There are too many ways to Google on Android • The Verge

Dieter Bohn:


After agitating to get Google to bring its best apps from iOS to Android, I was gratified to see last month that Gboard, Google’s excellent iPhone keyboard, made the jump. Then I used it on my Pixel and discovered that it’s inferior to the iOS version. Google, on its own phone, built a bad Google experience.

Which got me to thinking and made me realize something: the Google experience on Google’s phone is confusing and often bad. Back when I reviewed the Pixel, I noted that there are four different ways to do a basic Google search on it — all of which have slightly different behaviors. But I undercounted! Now, with Gboard, there are at least seven different ways to do a broad Google search on the Pixel. And that doesn’t count other searches — like Maps or Email or YouTube — that are also technically using Google’s search engine.

So I documented all these different ways of searching Google on Android, to point out their various foibles. The TL;DR is this: there are a lot of ways to search Google on Android but they all give you slightly different results, which means the whole thing can make you feel a little lost.


It’s a neat observation, and possibly indicative of a problem within Google – what Benedict Evans calls “shipping the org chart”, i.e. including stuff because manager in a position to insist their stuff is included say it should be, and nobody ever overrules them.
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Apple 1Q17 Expectations • Above Avalon

Neil Cybart on Apple’s first financial quarter (which runs from October to the end of December):


There will be a few numbers holding extra importance when Apple reports 1Q17 results on Tuesday.

iPhone ASP. There has been a notable amount of evidence from the past three months pointing to the iPhone 7 Plus selling well. This has major implications for Apple’s iPhone strategy going forward as a strong-performing iPhone 7 Plus suggests there is demand for higher-priced iPhones driven by feature differentiation. In addition, Apple’s new iPhone storage configurations likely boosted iPhone ASP. Given that the $399 iPhone SE was not on sale during 1Q16, an iPhone ASP close to or exceeding the $691 reported in 1Q16 would confirm iPhone 7 Plus popularity. 

Other Products revenue. Apple will likely report record Apple Watch sales. Similar to previous quarters, Watch results are expected to be lumped in with “Other Products” revenue. The major difference with 1Q17 results is that AirPods revenue will now be included in “Other Products” given the December 2016 launch. This will make it a bit trickier to back out Apple Watch revenue. Accordingly, one should expect a wider variation in Apple Watch sales estimates. In addition, the “Other Products” line item contains revenue from Beats headphones, a good seller during the holiday quarter. Taking into account AirPods and Beats revenue, “Other Products” revenue exceeding $4.5B will bode extremely well for strong Apple Watch sales (5M+ units). 


There’s more, but those are the top two lines. He also thinks iPads have turned the corner – the worst is over in terms of sales dips, and that revenue could return to growth as pricier models become popular.

Wonder how much bigger it could have been if AirPods had come through in sufficient numbers before Christmas.
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Fitbit to cut jobs after weak Q4 • The Information

Reed Albergotti:


Fitbit is to cut between 5% and 10% of its employees, the company will announce on Monday, while disclosing that its fourth-quarter results were below expectations. The disclosures are the latest sign of a slowdown in the wearables market, according to two people briefed on the news.

About 1,600 people work at Fitbit so the job cuts affect between 80 and 160 people, across multiple departments. Fitbit is also undertaking a reorganization which, along with the job cuts, will reduce costs by about $200m. The company’s board voted on the job cuts on Wednesday, one of these people said.


Fitbit confirmed the numbers after the story was published: expected revenue for Q4 at $572m-$580m, well below its previous forecast of $725m-$750m. (That’s about 25% down.) Cutting 110 staff. Sales particularly poor in Asia – where it probably has more competition from cheap Chinese products. Fitbit shares fell to leave it valued at $1.2bn – below GoPro (which has often looked troubled) at $1.5bn. So people see some future value in it, but how much?

Separately, The Information also reported that Jawbone was a week late paying staff. That’s a sign of a company under severe financial stress. (It couldn’t make a $1m payment last August.) Expect a firesale or closure by the middle of the year.
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Ransomware infects electronic door locking system at Austrian hotel • Bleeping Computer

Catalin Cimpanu:


Fire code regulations all over the globe mandate that electronic key locks to open manually from the inside, which means no guest was locked inside their rooms.

Additionally, electronic key systems are also created to handle power failures, so there was a way to open the doors from the outside, meaning no one was locked out either.

According to Austrian news site ORF, the hotel was fully-booked with 180 guests. According to hospitality news site Allgemeine Hotel- und Gastronomie-Zeitung, at the time the ransomware took root, all the hotel’s guests were on the local ski slopes.

The hotel’s management, opted to pay the ransom, which was 2 Bitcoin, around €1,500 ($1,600) at the time, both sources reported.

Hotel manager plans to replace “smart locks” with “classic locks”

“We were hacked, but nobody was locked in or out,” said the hotel’s Managing Director Christopher Brandstaetter. “For one day we were not able to make new keycards.”

“Since the locking system must work even in the event of power failure, the guests in the hotel almost did not notice the incident,” the manager also added. “We simply could not issue new keycards because the computers were encrypted.”

Brandstaetter said the hotel plans to replace the electronic key system with classic keys in the upcoming future.

According to Brandstaetter, shortly after the ransomware incident, someone tried to infect the hotel once more, but they took their systems offline.


Does this story look familiar? That’s because there was a (slightly wrong) version here yesterday. Key point: rooms weren’t locked. Notable point: attempted reinfection. (Via Graham Cluley, via Steve.)
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Errata, corrigenda and ai no corrida: well, that ransomware-in-hotel link from yesterday, now corrected in that link above.

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