All posts in “Entrepreneurship”

Why Is Wireless Caller ID So Often Wrong?

I have a gripe with the way Caller ID works — or in fact, increasingly doesn’t work — on wireless phones. I’ve noticed that most very stinking time I get a call on my wireless phone, the Caller ID information is wrong. Sometimes the number is correct, but the city is wrong. I say if this problem can be fixed, fix it. If not, get rid of it! What do you think?

When Caller ID was introduced a few decades ago, it was great. It started on the landline phone, either providing a name or number to give you a heads up as to who was calling. Fast-forward to the present. Today, when a call comes into our wireless phone, the information that appears on the screen is accurate only some of the time.

More often than not, what displays is a phone number, sometimes right and sometimes wrong, and a wrong city. New technologies — mainly wireless and Voice over Internet Protocol — have created chaos in this sector. In many cases, owners can gain control over what is displayed. When they can’t, the information typically is wrong.

Place vs. Device

These days, we don’t call a place — we call a phone, no matter where it is.

As we use more wireless phones to make calls, or VoIP services, which route calls using the Internet, there is no physical address associated with our calls. Instead of calling a place, we are calling a phone, no matter where that phone is located.

The move from landlines to wireless is one contributing factor. Another is the control others have over what is shown on Caller ID. This problem started years ago and has steadily gotten worse.

This functionality is helpful to companies that are located in one area but want to give the impression they have local staff in areas around the country. I suppose we can live with that level of deception, although I’m not in favor of it. The problem is when this capability is used by bad guys to steal from us or worse.

This is a case of new technologies, like wireless and VoIP, screwing around with older technologies, like landlines and Caller ID. There needs to be a solution to this relatively simple problem, don’t you think?

Wireless is growing and continuing to take us to new and grander places year after year. Wireless will continue to grow mixed with artificial intelligence and the cloud. Wireless and mobile and smartphones and tablets and all the other industries that use wireless to wow us with their advancements truly are amazing.

The wireless future is bright. However, with every step forward problems pop up that need to be fixed. This Caller ID problem is one of them.

Should Fixing Caller ID Be a High Priority?

Like you, I love wireless. I love the wireless industry. I follow wireless networks, mobile virtual network operators, smartphone and tablet makers, app makers, and many other companies that are coming up with advancements using wireless.

The wireless space is an incredible place to be. It’s growing rapidly and expanding into other industries. Wireless is one of the hottest and most interesting technologies around for both the consumer and business user, and it will get hotter and more important going forward.

Yes, I know there are more important things to worry about than seeing the wrong Caller ID. However, this is 2018, and we are surrounded by a growing number of new technologies. Why can’t we maintain control over wireless as we move forward?

Should consumers have to suffer the consequences when a new development screws up something old? We shouldn’t have to take a darn step backward every time we take a step forward. So, let me ask you: Do you agree, or am I getting upset over nothing?

Jeff Kagan has been an ECT News Network columnist since 2010. His focus is on the wireless and telecom industries. He is an independent
analyst, consultant and speaker.
Email Jeff.

Oracle’s Earnings Angst

OK, this is looking somewhat predictable.

Oracle has beat earnings estimates in seven of the past eight quarters, according to Forbes, with Q1 fiscal 2018 being its only miss. The company either met or slightly beat top-line expectations in six of the last eight quarters.

Oracle earlier this week reported US$9.20 billion in revenue, or $0.03 per share, against consensus estimates in the $9.24 to $9.29 range. In other words, it missed its number.

How concerning is this? Excuse me while I yawn. It’s important all right, but no reason to get crazy.

Still, some representatives of the widows and orphans who own the stock went into a tizzy, and some might have needed smelling salts or a stiff drink. By the way, if you’re wondering where the finance community ever got the widows and orphans meme, I’ve traced it back to Moby Dick. Seems whaling expeditions were once joint stock enterprises too.

At any rate, what does this miss mean? Many people are concerned that Oracle isn’t moving its customers to the cloud fast enough. The fact that the company made the results on that part of the business hard to get has gotten some people worried. I get that, but I don’t think anything awful is going on.

Q4 Hustle

First, this is Q1. As I recall from my sales days, in Q4 we wring the pipeline dry, selling anything that isn’t nailed down so that we can report fabulous results, make bonus money, and go to someplace warm on the company’s dime.

This strategy occasionally comes back to put teeth marks in our anatomy in the next quarter. That’s why in the software companies I’ve worked for, Q2 and Q4 were more important. The drain-the-pipeline fever has important side effects.

So it was Q1, and the company missed slightly. The stock should reflect this — but come back in from the ledge already. A more serious issue might be lurking in the shadows that better explains things or at least makes them understandable: Thomas Kurian recently went into hibernation.

Different Paths

Kurian has been at the company for more than 20 years, rising to the level of president of product development. Importantly, he was responsible for moving the company’s software to the cloud.

The rumor is that Kurian and Larry Ellison disagreed over the exact cloud approach. Kurian had wanted Oracle’s software to run in rival public clouds, such as Amazon Web Services (AWS) and Microsoft Azure, according to a Bloomberg report.

Ellison, on the other hand, doesn’t play nice in that sandbox. He wanted to take some of Amazon’s and Microsoft’s market share.

In Ellison’s defense, the Oracle database runs best on Oracle gear and so do its apps, so engaging with other platforms would be a performance issue. It also would be a marketing headache. How do you trash the other guys for being slow on the database side and still let your apps run there?

Still, there are lots of examples of customers and apps that might not need all of Oracle’s wonderfulness that could do just fine, thank you very much, running on someone else’s cloud. Other clouds also have the advantage of already being deployed, while Oracle is still building out its infrastructure, which I think is the core issue. However, running on the competition’s infrastructure means bringing them into your account and that’s not a good thing.

He’ll Be Back

So the tug of war seems to be about short-term vs. long-term gain, and Kurian could push only so hard against a founder. The company is careful to say that this is a time out and that Kurian will be back.

As CEO Mark Hurd said in response to an investor question, “Thomas is a good guy, works awful hard. He’s taking a break, and we expect him back.” There was no statement about Kurian’s eventual return date, though.

Let’s net this out. Oracle is a very big corporation serving the information needs of more than 420,000 similarly large (and small) companies around the world. Investors understandably are skittish about the transformation the company is in, and will remain in for about 10 years.

The directions attributed to Ellison and Kurian are less important to investors than the realization that in every company, in every transition, there are ups and downs. Look at any stock chart and you see a sawtooth pattern, not a straight line.

Oracle continues to execute on its plan, and the numbers have been good in the past and are likely to be so again. Stock prices fluctuate on the basis of earnings potential except when they fluctuate due to panic or overconfidence, and you can’t tell the difference, like right now.

In the recent past, customers have launched lawsuits over earnings numbers, and this easily could happen again. That has to lurk as a concern in Oracle’s executive suite. Regardless, the company needs to get its house in order and execute on a plan — any plan. One plan.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can’t Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there.
Email Denis.

VCs say Silicon Valley isn’t the gold mine it used to be

In the days leading up to TechCrunch Disrupt SF 2018, The Economist published the cover story, ‘Why Startups Are Leaving Silicon Valley.’

The author outlined reasons why the Valley has “peaked.” Venture capital investors are deploying capital outside the Bay Area more than ever before. High-profile entrepreneurs and investors, Peter Thiel, for example, have left. Rising rents are making it impossible for new blood to make a living, let alone build businesses. And according to a recent survey, 46 percent of Bay Area residents want to get the hell out, an increase from 34 percent two years ago.

Needless to say, the future of Silicon Valley was top of mind on stage at Disrupt.

“It’s hard to make a difference in San Francisco as a single entrepreneur,” said J.D. Vance, the author of ‘Hillbilly Elegy’ and a managing partner at Revolution’s Rise of the Rest Fund, which backs seed-stage companies based outside Silicon Valley. “It’s not as a hard to make a difference as a successful entrepreneur in Columbus, Ohio.”

In conversation with Vance, Revolution CEO Steve Case said he’s noticed a “mega-trend” emerging. Founders from cities like Pittsburgh, Detroit or Portland are opting to stay in their hometowns instead of moving to U.S. innovation hubs like San Francisco.

“The sense that you have to be here or you can’t play is going to start diminishing.”

“We are seeing the beginnings of a slowing of what has been a brain drain the last 20 years,” Case said. “It’s not just watching where the capital flows, it’s watching where the talent flows. And the sense that you have to be here or you can’t play is going to start diminishing.”

Farewell, San Francisco

“It’s too expensive to live here,” said Aileen Lee, the founder of seed-stage VC firm Cowboy Ventures, amid a conversation with leading venture capitalists Spark Capital general partner Megan Quinn and Benchmark general partner Sarah Tavel .

“I know that there are a lot of people in the Bay Area that are trying to work on that problem and I hope that they are successful,” Lee added. “It’s an amazing place to live and we’ve made it really challenging for people to live here and not worry about making ends meet.”

One of Cowboy’s portfolio companies opted to relocate from Silicon Valley to Colorado when it came time to scale their business. That kind of move would’ve historically been seen as a failure. Today, it may be a sign of strong business acumen.

Quinn said that of all 28 of Spark’s growth-stage portfolio companies, Raleigh, North Carolina-based Pendo has the easiest time recruiting folks locally and from the Bay Area.

She advises her Bay Area-based late-stage companies to open a second office outside of the Valley where lower-cost talent is available.

“We often say go to [], draw a three-hour circle around San Francisco where they have direct flights, find a city that has a university and open up a second office as quickly as possible,” Quinn said.

Still, all three firms invest in a lot of companies based in San Francisco. Of Benchmark’s 10 most recent investments, for example, eight were based in SF, according to Crunchbase.

“I used to believe really strongly if you wanted to build a multi-billion dollar company you had to be based here,” Tavel said. “I’ve stopped giving that soap speech.”

Underestimated talent

A lot of Bay Area VCs have been blind to the droves of tech talent located outside the region. Believe it or not, there are great engineers in America’s small- and medium-sized markets too.

At Disrupt, Backstage Capital founder Arlan Hamilton announced the firm would launch an accelerator to further amplify companies led by underestimated founders. The program will have cohorts based in four cities; San Francisco was noticeably absent from that list.

Instead, the firm, which invests in underrepresented founders and recently raised a $36 million fund, will work with companies in Philadelphia, Los Angeles, London and one more city, which will be determined by a public vote. Aniyia Williams, the founder of Tinsel and Black & Brown Founders, will spearhead the Philadelphia effort.

“For us, it’s about closing that wealth gap to address inequity in tech,” Williams said. “There needs to be more active participation from everyone.”

Hamilton added that for her, the tech talent in LA and London is undeniable.

“There is a lot of money and a lot of investors … it reminds me of three years ago in Silicon Valley,” Hamilton said.

Silicon Valley vs. China

Silicon Valley’s demise may not be just as a result of increased costs of living or investors overlooking talent in other geographies. It may be because of heightened competition abroad.

Doug Leone, an early- and growth-stage investor at Sequoia Capital, said at Disrupt that he’s noticed a very different work ethic in China.

Chinese entrepreneurs, he explained, are more ruthless than their American counterparts and they’re putting in a whole lot more hours.

“I’ve had dinner in China until after 10 p.m. and people go to work after 10 p.m.,” Leone recalled.

“We don’t see that in the U.S. I’m not saying the U.S. founders oughta do that but those are the differences. They are similar in character. They are similar in dreams. They are similar in how they want to change the world. They are ultra-driven … The Chinese founders have a half other gear because I think they are a little more desperate.”

Much of this, however, has been said before and still, somehow, Silicon Valley remained the place to be for investors and startup entrepreneurs.

The reality is, those engaged in tech culture are always anxiously awaiting for the bubble to pop, the market to crash and for “peak Valley” to finally arrive.

Maybe, just maybe, Silicon Valley is forever.

Here’s more of our coverage of Disrupt 2018.

Poor Website Designs Could Trigger Legal Actions

By John K. Higgins
Sep 21, 2018 5:00 AM PT

Internet marketing has become so popular that e-commerce retail sales in the United States are on pace to double between 2009 and 2018, with sales amounting to US$127.3 billion in just the second quarter of 2018, according to an August 2018 update from the U.S. Census Bureau.

The transaction value of e-commerce service industry contracts reached $600 billion in 2016. Despite the rush to digital commerce, the rules for business transactions are still the same, whether they are concluded on paper or electronically.

Essentially, that means legally valid sales agreements need to demonstrate clearly that both vendors and consumers are aware of — and consent to — the terms of the agreements. It is especially important for vendors to ward off expensive class action suits by including contract terms that prohibit such suits and instead rely on arbitration to resolve any issues with consumers.

Yet recent federal court cases indicate that poorly presented Internet contracts can result in the nullification of arbitration provisions and class action prohibitions — thus giving consumers greater leverage in legal disputes with vendors. Usually the breakdown occurs when vendors mismanage either the display or the content of their websites — and sometimes both.

Website Messages Must be Conspicuous

The most recent example is a June case in which the U.S. Court of Appeals for the First Circuit issued a decision. The case stemmed from complaints that Uber Technologies wrongly added the cost of local tolls in and around Boston to customers’ bills. In Cullinane v. Uber, a federal district court initially ruled in favor of Uber and dismissed the complaint.

However, such is the state of differing perspectives on applicable laws, that the appellate court overturned the district court and ruled against the company.

Uber failed to convince the appeals court that the website sales agreement properly displayed both an arbitration clause and a prohibition against litigation, because the notice was not “conspicuous” enough to be legally valid. Absent adequate notice to the customer, there could be no agreement between the parties over terms and conditions, the court said in denying Uber’s motion to compel arbitration.

The case provided insight into the importance to vendors of arbitration clauses as a way to fend off class action suits.

Compared to litigation, arbitration is a “speedy, fair, inexpensive, and less adversarial” process, the U.S. Chamber of Commerce said in an amicus brief in the Uber case. Members of the organization “have structured millions of contractual relationships — including enormous numbers of on-line contracts — around arbitration agreements.”

Similar suits dealing with the issue include a second case against Uber with a different plaintiff and over a different issue, as well as separate cases involving Amazon and Barnes & Noble.

In each case, courts have gotten into the weeds of website design, finding flaws in styles, the choice of colors, the size of printing fonts, and the use of hyperlinks.

For example, in Cullinane v. Uber, the appellate court noted that the website connection to the contract terms “did not have the common appearance of a hyperlink” because it was framed in a gray box in white bold text, rather than the normal blue underline style. Other screens on the site utilized similar highlight features causing the court to conclude that if “everything on the screen is written with conspicuous features, then nothing is conspicuous.”

Uber’s petition for a rehearing of the case was denied by the appeals court in a July 23, 2018, ruling. The company had no comment on the litigation, Uber spokesperson Alix Anfang told the E-Commerce Times.

Pulling the Trigger on Consent

Of equal importance with presentation is the vendor’s choice of using active or passive mechanisms to obtain customer consent to the terms and conditions of agreements.

In Nicosia v. Amazon, the U.S. Court of Appeals for the Second Circuit overturned a district court decision favoring the company, and instead ruled in favor of the consumer plaintiffs.

The Second Circuit described two major types of customer consent mechanisms. The first, called a “clickwrap” procedure, involves the use of an “I accept” button, which forces customers to “expressly and unambiguously manifest assent,” according to the court.

A more passive alternative is a “browserwrap,” which “involves terms and conditions posted via a hyperlink” and does not request an express showing of consent. “In a seeming effort to streamline customer purchases, Amazon chose not to employ a clickwrap mechanism,” the court noted in the August 2016 ruling.

Ultimately, the court based its decision not on the consent mechanism per se, but on Amazon’s failure to display its terms adequately. The result was that “reasonable minds could disagree” on the adequacy of the company’s notice to consumers.

Amazon declined to comment for this story, spokesperson Cecilia Fan told the E-Commerce Times.

The significant variance among federal courts on the validity of Internet contracts may be caused more by different judicial perceptions than by differing laws covering “conspicuous” or “reasonably communicated and accepted” terms.

While these cases have been brought in federal courts, there is no federal standard for what constitutes adequate notice. Thus, for procedural reasons associated with the Federal Arbitration Act, federal judges have relied on applicable contracting law in different states, including California, Massachusetts, Washington and New York.

“I do not yet see a majority of courts moving toward a single legal standard, especially not one that is adapted to today’s technology,” said Liz Kramer, a partner at Stinson, Leonard, Street.

The U.S. Appeals Court for the Second Circuit reached opposite results in recent cases “despite pretty similar circumstances,” she told the E-Commerce Times. One problem “is that state law applies, and the states are not consistent on what makes terms conspicuous enough to form part of the contract.”

“Different courts define the standard in different ways, but they all boil down to the principle that the arbitration clause — and the links to the clause — must be clearly presented to the consumer in order for there to be a meeting of the minds — in other words, an acceptance — of the arbitration clause,” said Mark Levin, a partner at Ballard Spahr.

“It is not so much the standard that is unsettled, but the application of the standard to the facts, since each website is unique and there are a multitude of factors, both in content and visual display, to consider in determining whether the consumer accepted the clause,” he told the E-Commerce Times.

“Even if there was a U. S. Supreme Court decision, or legislation that defined a single standard, there would still be a need to apply that standard to unique facts in virtually every case,” Levin said.

Web Designers Should Seek Legal Help

While vendors strive to create ever more attractive and compelling websites, designers and marketing staffs need to address the basic nuts and bolts of contract communications, said Levin.

For electronic documents, vendors should “refer to the arbitration clause near the beginning of the terms and conditions, make sure the link to the clause is obvious and clear, minimize the number of mouse clicks it takes for the reader to get to the clause, and refer to the arbitration clause again at the end, close to an electronic signature or ‘I agree’ button,” he advised.

The easiest way for e-commerce vendors to avoid trouble is to skip any indirect notification procedure, suggested Stinson’s Kramer. Deliberate downplaying of key contract terms is an invitation to legal challenge.

“The best way to ensure that an arbitration agreement is enforceable with customers who agree online, or through an app, is to have them actually click ‘I agree’ after reviewing the terms and conditions,” she said.

“Great care should be taken in designing and structuring a website arbitration clause, since courts scrutinize every detail, cautioned Levin.

“This is definitely an area where businesses should enlist legal counsel to help with the design, substance and placement of the clause to help ensure that a court will enforce it,” he said. “If adequate attention is not paid to these issues at the outset, the business could end up in a debilitating class action lawsuit.”

John K. Higgins has been an ECT News Network reporter since 2009. His main areas of focus are U.S. government technology issues such as IT contracting, cybersecurity, privacy, cloud technology, big data and e-commerce regulation. As a freelance journalist and career business writer, he has written for numerous publications, including
The Corps Report and Business Week.
Email John.

Eventbrite’s IPO should encourage tech companies to get out while they still can

Eventbrite is having one hell of a debut on the New York Stock Exchange this morning.

Shares of the ticketing startup, founded back in 2006, have shot up over 50 percent in trading on the NYSE. After pricing its shares at $23 in its initial offering, investors have bid up the stock to a whopping $37, putting the company’s valuation at nearly $3 billion.

That’s well above where the ticketing company had hoped to be when it initially set terms for the public offering earlier this month.

The company started trading priced above its share price and nearly doubled its valuation. And if Eventbrite can do it, really almost any later-stage startup should be thinking about the public markets right now.

Performance for the San Francisco ticketing company has been… somewhat lackluster. As we noted when wrote about the company’s offering:

Eventbrite is not profitable and has been losing money since 2016. According to the documents, it posted losses of $40.4 million in 2016 and $38.5 million in 2017. In the first six months of 2018, the company has posted a net loss of $15.6 million. The company is making changes to make up for some of those losses — at the end of August, it announced a new pricing scheme for its customers using the “Essentials” package.

Its revenue is rising though, increasing from $133 million in 2016 to $201 million last year.

Since the beginning of the year tech public offerings have been on a tear. As The Wall Street Journal noted in July, 120 companies had raised $35.2 billion on U.S. exchanges at that point — the best showing for public markets since 2014 and the fourth busiest year since 1995, according to the financial data and analysis service Dealogic.

We’ve noted before that it’s a bit mind-boggling that investors and their portfolio companies wouldn’t be taking more advantage of these heady times. Nothing lasts forever (not even cold November rain) and certainly not markets that have been this bullish for this long.

Some of the reasoning is likely thanks to a market that’s still awash in private equity, sovereign wealth and late-stage dollars. SoftBank has hundreds of billions to invest; private equity firms are beginning to look at growth-stage companies the way that I look at banana cream pies from Cassell’s; and venture firms are beefing up big time to keep up with the Joneses (or in this case, the Blackstoneses).

However, the fun is certainly going to come to an end, and likely sooner rather than later. Early-stage investors are beginning to dole out their advice on lowering cash burn (something that happens every time they see the beginning of the end of the beginning of the end).

With that in mind, later-stage companies should be looking for the exit signs wherever they can find them. Right now, that’s an IPO window that seems to be wide open.