Start Up No.954: the cyborg cockup, Google steps away from robots, quitting Instagram, hacking kids’ smartwatches, and more


Want to expense a visit here? An AI might be checking that. Photo by Joshua Ganderson on Flickr

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A selection of 12 links for you. Use them wisely. I’m @charlesarthur on Twitter. Observations and links welcome.

How I lost and regained control of my microchip implant • Motherboard

Daniel Oberhaus:

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The NFC chip I got injected in my hand was made by Dangerous Things, a biohacking company started by Amal Graafstra that has also pioneered DIY biometric guns. Graafstra has been selling these chips since he raised $30,000 in a crowdfunding campaign in 2014. The chip is encased in a small glass tube that’s a little under a half an inch in length and just two millimeters in diameter. This tube is injected into the soft flesh between your thumb and index finger just above the webbing. When you hold your hand in certain positions, the outline of the chip can just barely be seen pushing against the skin.

The actual process of getting the implant went off without a hitch, but things quickly devolved after that. The thing about NFC chips is that anyone with a reader can also write to the device if it is not protected. While this isn’t exactly a huge security threat, given that someone would have to get the reader within several centimeters of your hand to write to the chip, when you’re at the world’s largest hacker conference it’s better to play it safe.

So, at the urging of everyone at the implant station, the first thing I did with my implant was secure it with a four-digit pin. I hadn’t decided what sort of data I wanted to put on the chip, but I sure as hell didn’t want someone else to write to my chip first and potentially lock me out. I chose the same pin that I used for my phone so I wouldn’t forget it in the morning—or at least, I thought I did.

If I had a single piece of advice for anyone thinking about getting an NFC chip implant it would be to do it sober. For starters, the piercer probably won’t even give you the implant if they suspect you’re intoxicated for reasons involving consent and safety (alcohol thins your blood, which is also why you shouldn’t get a tattoo while drunk.) But more importantly, you won’t wake up the next morning with a splitting headache and absolutely no idea how to unlock your hand.

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It’s basically like getting a hi-tech tattoo, isn’t it? Except you set off airport security systems forever.
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Google parent to pull plug on bipedal robot development • Nikkei Asian Review

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Google entered the robotics business in 2013 by buying Schaft, a tech startup founded by University of Tokyo researchers, and other companies. But the company scaled back the business, due in part to the departure of Andy Rubin in 2014, who has led the robotics business.

SoftBank Group in June 2017 announced that it had agreed with Alphabet to purchase Schaft, but one or more Schaft employees refused to be part of SoftBank, according to people familiar with the matter. SoftBank’s attempt to buy Schaft apparently broke down.

“Following Softbank’s decision not to move forward with the Schaft acquisition,” an Alphabet spokesperson told Nikkei, “we explored many options but ultimately decided to wind down Schaft. We’re working with employees to help them find jobs elsewhere within or outside of Alphabet.”

Yuto Nakanishi, assistant professor of the University of Tokyo, and others established Schaft in 2012. The startup has developed bipedal robots, which can be used to save human lives at disaster sites.

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Does this mean the end of the quadripedal robots too?
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Quitting Instagram: she’s one of the millions disillusioned with social media. But she also helped create it • Washington Post

Elizabeth Dwoskin:

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“In the early days, you felt your post was seen by people who cared about you and that you cared about,” said [early Instagram employee Bailey] Richardson, who left Instagram in 2014 and later founded a start-up. “That feeling is completely gone for me now.”

The catalyst for Richardson’s decision to quit Instagram came when its co-founders, Kevin Systrom and Mike Krieger, unexpectedly announced that they were leaving the company. With their exit, Richardson and other former Instagram employees worried Facebook would squash whatever independent identity the company had managed to retain.

She sent her goodbye to Instagram the next day.

Even in Silicon Valley, where it’s common to hear start-up workers become frustrated with management after an acquisition, the disillusionment of the early Instagram employees is striking: People seldom swear off or criticize the product they built, particularly when it has enjoyed such remarkable success. Instagram reached 1 billion users this year.

The people who worked at social networks long saw the connection and free expression they facilitated as a powerful force for good and evidence of the contribution they were making to society. For them, the public questioning of the role social networks play in democracy and in individual lives, sparked by concerns over privacy and health, is deeply personal.

Three of the early Instagram employees, including Richardson, have deleted it — permanently or periodically, comparing it to a drug that produces a diminishing high. One of the people said he felt a little embarrassed to tell people that he worked there. Two of the other early employees said they used it far less than before.

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The story behind the story that created a political nightmare for Facebook • Huffington Post

John Cook was the editor-in-chief at Gawker and helped write the headline about Facebook ‘interfering’ with right-wing stories in the Newsfeed:

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For that system to work the way it was designed to, Facebook had to maintain a veneer of neutrality — i.e., non-complicity in the uses to which bad actors put Facebook’s engine — which is why you saw Zuckerberg recently trying to thread a needle on Holocaust denial. He wants to profit from its popularity on his platform without feeling bad about it.

The news curation story struck such a nerve both for the company and for its users because it put the lie to that posture of non-intervention. If people realized that Facebook did intervene in what stories it felt were worthy of a spot in the Trending Module, by using editors, then perhaps they might begin to interrogate the quieter interventions, too, the ones happening by way of the News Feed’s algorithm, which was privileging divisive, hateful and propagandistic content. The trending module was public, and as such, it needed to be handcrafted in order to reflect the values that the company wanted to project. The News Feed was a private flow, where Facebook’s actual values could be found in the sewage. Hiring editors to moderate that sewage in the trending module was the closest Facebook came in this whole mess to a noble act.

That’s the irony: This small, self-interested gesture at information hygiene alone rendered Facebook vulnerable to the right-wing outrage cycle. Not because Facebook sought to stifle conservative speech — it is by far the most extensive publisher and amplifier of Trumpist propaganda on the planet — but because the Fox News- and Breitbart-driven grievance brigades have been so successful that the mere imposition of value-based editorial standards is in itself an act of, ahem, suppression. Indeed, so successful that that vulnerability — the way that conservatives would inevitably seize on it, had already seized on it, within the organization — was part of what made the whole thing newsworthy to begin with. And so successful that a left-of-center tech site, in packaging its report, couldn’t resist trying to have it both ways by characterizing it as suppression in the headline and as editing in the story.

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People who live in smart houses shouldn’t throw parties • Terence Eden’s Blog

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I have friends. More than one! I also have a home full of smart-gadgets which are controlled by apps.

The two don’t mix.

This is yet another complaint about solipsistic app design.

Let’s take my Lifx bulbs. I have a friend staying for a few days, and he needs to be able to turn lights on and off. Lifx make this functionally impossible. The available options are…
• Give my full email address & password to him. This feels suboptimal.
• Allow him on to my main WiFi. Again, suboptimal.

This is why my ISP-provided router has a guest mode.

Bleugh. Neither is a good solution. Luckily I have an Amazon Alexa hooked up to the lights. But because Alexa’s “AI” is barely above the level of a speak-n-spell, that’s also unsatisfactory.

My guest tried to turn off the hall lights. Only he used the wrong invocation. “Alexa, turn off the landing light” just doesn’t cut it. Such AI, much recognition, big data mood.

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As he points out, the answer is obvious: guest accounts. “I know it is a cliche – but Silicon Valley geeks who are too anti-social to have friends and family is a right pain in the arse for everyone else.” See also his advice to commenters.
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MiSafes’ child-tracking smartwatches are ‘easy to hack’ • BBC News

Leo Kelion:

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A location-tracking smartwatch worn by thousands of children has proven relatively easy to hack.

A security researcher found the devices neither encrypted the data they used nor secured each child’s account. As a result, he said, he could track children’s movements, surreptitiously listen in to their activities and make spoof calls to the watches that appeared to be from parents.

Experts say the issues are so severe that the product should be discarded.

Both the BBC and the researcher involved tried to contact the makers of the MiSafes Kid’s Watcher Plus to alert them to the problem but received no reply.

Likewise, a China-based company listed as the product’s supplier did not respond to requests…

Pen Test Partner’s Ken Munro and Alan Monie learned of the product’s existence when a friend bought one for his son earlier this year. Out of curiosity, they probed its security measures and found that easy-to-find PC software could be used to mimic the app’s communications. This software could be used to change the assigned ID number, which was all it took to get access to others’ accounts.
This made it possible to see personal information used to register the product, including: a photo of the child;
their name, gender and date of birth; their height and weight; the parents’ phone numbers; and the phone number assigned to the watch’s Sim card.

“It’s probably the simplest hack we have ever seen,” he told the BBC. “I wish it was more complicated. It isn’t.”

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Securing the internet of things is all about business model. Security costs money.
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American executives are becoming China sceptics • Financial Times

Jamil Anderlini:

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Faced with worsening barriers to entry and pressure to hand over their prized technology in exchange for market access, western companies operating in China have become Mr Trump’s biggest cheerleaders in the trade war.

A speech last week in Singapore by former Goldman Sachs chief executive and the US Treasury Secretary Henry Paulson gives a sense of just how few American friends China has left.

“The American business community has turned from advocate to sceptic and even opponent of past US policies toward China,” Mr Paulson said. “How can it be that those who know China best . . . and have advocated for productive relations in the past, are among those now arguing for confrontation?”

Mr Paulson used to be one of the most ardent “old friends of China” — a group that includes people such as Henry Kissinger and Blackstone’s Stephen Schwarzman who see themselves as a bridge between Beijing and Washington. His uncharacteristically harsh words should serve as a wake-up call for Mr Xi.

Some people who know Mr Paulson believe his criticism was actually encouraged by senior members of Mr Xi’s own administration, who feel the Chinese president has over-reached but are too scared to say it to his face.

These remnants of the Communist party’s liberal, reform-minded faction are concerned that China’s teetering economy will not be able to withstand a full-blown trade war.

For all the hype surrounding companies like Alibaba and Tencent, China remains predominantly a low-margin, mass production economy that relies on imports for most high-tech components. Despite decades of effort and billions of dollars invested in developing homegrown semi-conductors, China still imports more than 95% of the high-end chips used in computers and servers. As a result, the world’s biggest energy importer spends more on buying foreign-made microchips than it does on imports of crude oil.

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Mark Zuckerberg reportedly ordered all Facebook executives to use Android phones • The Verge

Shannon Liao, given the task of filleting the NYT’s blockbuster article about Facebook from yesterday:

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Facebook CEO Mark Zuckerberg ordered his management team to only use Android phones, according to The New York Times. The decision reportedly occurred after Apple CEO Tim Cook criticized Facebook in an MSNBC interview for being a service that traffics “in your personal life.”

In those comments made back in March, Cook dismissed a question asking him what he would do if he were in Zuckerberg’s shoes dealing with the fallout from the Cambridge Analytica scandal by saying, “I wouldn’t be in this situation.” Cook’s comments “infuriated” Zuckerberg, according to the NYT. In an interview with Recode, Zuck said he found Cook’s comments to be “extremely glib,” and that “I think it’s important that we don’t all get Stockholm syndrome and let the companies that work hard to charge you more convince you that they actually care more about you. Because that sounds ridiculous to me.”

“We’ve long encouraged our employees and executives to use Android because it is the most popular operating system in the world,” said Facebook in response to the New York Times article.

While it’s not clear from the NYT’s reporting that Cook’s aggressive comments directly provoked Zuckerberg into issuing his Android-only order, it’s still a rational decision to make American executives use Android. Android is the dominant operating system in many regions outside of the US, including South America, Europe, Russia, South Asia, and parts of the Middle East.

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Narrator’s voice: a number of Facebook executives ignored Zuckerberg’s order.
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Tempted to expense that strip club as a business dinner? AI is watching • Bloomberg

Olivia Carville:

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One employee traveling for work checked his dog into a kennel and billed it to his boss as a hotel expense. Another charged yoga classes to the corporate credit card as client entertainment. A third, after racking up a small fortune at a strip club, submitted the expense as a steakhouse business dinner.

These bogus expenses, which occurred recently at major U.S. companies, have one thing in common: All were exposed by artificial intelligence algorithms that can in a matter of seconds sniff out fraudulent claims and forged receipts that are often undetectable to human auditors—certainly not without hours of tedious labor.

AppZen, an 18-month-old AI accounting startup, has already signed up several big companies, including Amazon.com Inc., International Business Machine Corp., Salesforce.com Inc. and Comcast Corp. and claims to have saved its clients $40 million in fraudulent expenses. AppZen and traditional firms like Oversight Systems say their technology isn’t erasing jobs—so far—but rather freeing up auditors to dig deeper into dubious claims and educate employees about travel and expense policies.

“People don’t have time to look at every expense item,” says AppZen Chief Executive Officer Anant Kale. “We wanted to get AI to do it for them and to find things the human eye might miss.”

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Apple outgrew unit sales • Above Avalon

Neil Cybart:

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Apple management’s decision to no longer disclose unit sales makes plenty of sense. In recent years, it was becoming increasingly clear that unit sales weren’t as useful of a metric for analyzing Apple’s business now as it had been in the past. The primary problem found with unit sales was how the data provided a limited look inside the Apple machine.

Consider the following items:

• Despite iPhone unit sales being mostly flat for the past three years, Apple expanded the iPhone installed base by nearly 300m users.

Despite annual iPad unit sales contracting by 40% from the sales peak in 2013, Apple was able to expand the iPad installed base by more than 120m users over the same time period.

Despite Mac unit sales trending flat, Apple has been able to add approximately 10m new people to the Mac installed base each year.

Unit sales became a crutch for financial analysts. The quarterly numbers were telling us less about Apple’s business and were instead providing a false sense of security to outsiders. As it turned out, unit sales were painting a less attractive picture of Apple’s business fundamentals.

The primary reason unit sales data lost much of its value is Apple’s significant growth over the years. With an iPhone installed base of more than 750m people, quarterly iPhone unit sales were providing less information about the iPhone business. Unit sales went from a measure of the market’s reception to iPhone to a financial data point more likely to be misinterpreted than anything else. The same can be said about the iPad and its installed base of 240m people. Years of unit sales declines gave many the impression that iPad was a dead-end. In reality, iPad fundamentals have been improving for years. Unit sales data was masking the improvement.

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Those two links are paywalled; they go to Cybart’s own calculations about the user base. Certainly Apple doesn’t want Wall St to interpret a flat or falling unit sales figure as indicative of a shrinking base. The problem then is that you need some way to persuade people the base is expanding. The best way is to tell them the number. The second best is to point to an expanding Services business, ideally with ARPU (average revenue per user) data.
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The IoT needs a new set of eyes • IEEE Spectrum

Stacey Higginbotham:

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two challenges [are] driving the silicon shift. First, processing power: Many of these [IoT] cameras try to identify specific objects by using machine learning. For example, an oil company might want a drone that can identify leaks as it flies over remote oil pipelines. Typically, training these identification models is done in the cloud because of the enormous computing power required. Some of the more ambitious chip providers believe that in a few years, not only will edge-based chips be able to match images using these models, but they will also be able to train models directly on the device.

That’s not happening yet, due to the second challenge that silicon providers face. Comparing images with models requires not just computing power but actual power. Silicon providers are trying to build chips that sip power while still doing their job. Qualcomm has one such chip, called Glance, in its research labs. The chip combines a lens, an image processor, and a Bluetooth radio on a module smaller than a sugar cube.

Glance can manage only three or four simple models, such as identifying a shape as a person, but it can do it using fewer than 2 milliwatts of power. Qualcomm hasn’t commercialized this technology yet, but some of its latest computer-vision chips combine on-chip image processing with an emphasis on reducing power consumption.

But does a camera even need a lens? Researchers at the University of Utah suggest not, having invented a lensless camera that eliminates some of a traditional camera’s hardware and high data rates. Their camera is a photodetector against a pane of plexiglass that takes basic images and converts them into shapes a computer can be trained to recognize.

This won’t work for jobs where high levels of detail are important, but it could provide a cheaper, more power-efficient view of the world for computers fulfilling basic functions.

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If you know the lens’s distortion, you can adjust for it in software.
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Google Maps will let you chat with businesses • The Verge

Dieter Bohn:

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shall we make the easy joke that Google can’t seem to stop launching new messaging platforms while its primary messaging platform strategy is still a mess? Yes, yes we shall. Hangouts is dead for consumers and Allo is “paused” and RCS Chat still hasn’t launched here in the US across all major carriers. Neither AT&T nor Verizon will commit to a launch date. (I asked them both this week.)

I bring up RCS not just for the cheap shot, but also because it’s a good example of how “business messaging” is quickly becoming big business. It’s part of the plan for RCS Chat, it exists inside Facebook Messenger and iMessage, and it’s a big part of the eventual business plan for WhatsApp. So it makes sense that Google would want to be in this space and, honestly, it makes some sense to put it inside Maps instead of in another messaging app. As Google notes, it keeps your business chat messages separate from your personal messages.

So let’s leave messaging aside and give Google this one. It can’t push harder on business messaging inside Android Messages, because it can’t leverage RCS, because it ceded control of its message platform to the whims of its carrier partners. Putting business messaging inside Google Maps is a good solution in that context. And anyway, this messaging feature already existed and the news here is simply that you can get to it inside Google Maps.

But that leads me to my third feeling: what the heck is going on with Google Maps? It is becoming overburdened with so many features and design changes that it’s becoming harder and harder to just get directions in it. There’s Group Planning, there’s a social-esque “follow” button for local businesses, you can share your ETA, there’s a redesigned “Explore” section, and there’s almost no way to get the damn thing to show you a cross street near your destination without three full minutes of desperate pinching and zooming and re-zooming.

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Product hits maturity; revenue growth slows; team in charge still has old growth targets, plus needs to justify their existence. (To quote Ryan Ford, a product designer.)
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Errata, corrigenda and ai no corrida: none notified.

2 thoughts on “Start Up No.954: the cyborg cockup, Google steps away from robots, quitting Instagram, hacking kids’ smartwatches, and more

  1. I think Apple’s new reporting scheme is PR. Financiers must have been doing the userbase and per-user revenue and margin tallies for a while. If not, they should have been.
    But device unit sales, iPhones especially, are still the key driver of Apple’s revenue. Nobody ever bought an Apple service or “other” doodad who didn’t have an iPhone, or at the very least an iPad or Mac. All other revenue flows from those core unit sales, even if the multiplier does fluctuate.
    And that obfuscation of unit sales happens, by chance I’m sure, at a key moment:
    – the overall market is flat to down
    – ditto Apple unit sales with no big change of upside (that’d be India ?)
    – the hyped supercycle never happened and almost certainly never will
    So basically, Apple is switching metrics ‘coz it don’t like what the old one will be showing.
    Also, I’m on the road and can’t easily look into it, but I’m wondering if the change of metrics isn’t happening close to the most flattering moment for userbase, too. Is a surge of device retirements on the radar ? With unit sales flat for 4 yrs, this seems a distinct possibility.

    As an observer, I’m still interested in device sales, ASP, and in 2 metrics that I no longer see: switchers (the only one I ever really saw was 0.8%/m in and 0.4%/m out, in an old Ericsson report), and individual/family users (ie, are there 250m iUsers w/ an average of 4 devices, and 166m iFamilies with an average of 6 ? How is that evolving, are mixed users/families on the rise oor on that wane… )

  2. Pingback: Apples Welt

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