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Silicon Tally: The World Cup

Fri, 2014-07-11 02:00
It's time for Silicon Tally. How well have you kept up with the week in tech news? This week we're joined by Nando Vila, VP of programming for Fusion and host of Soccer Gods, for a World Cup-themed Silicon Tally. var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "silicon-tally-world-cup", placeholder: "pd_1405075905" } ); (function(d,c,j){if(!document.getElementById(j)){var pd=d.createElement(c),s;pd.id=j;pd.src=('https:'==document.location.protocol)?'https://polldaddy.com/survey.js':'http://i0.poll.fm/survey.js';s=document.getElementsByTagName(c)[0];s.parentNode.insertBefore(pd,s);}}(document,'script','pd-embed'));

Social media's new matchmakers pair users with brands

Fri, 2014-07-11 01:00

Increasingly, big brands are adding social media to their ad budgets, often placing ads directly with users who’ve built large online followings on sites like Instagram, YouTube, and Vine. But how do companies and these influencers hook up? There’s a new crop of matchmakers eager to help pair companies with people who will post ads to their feeds.

For Jessica Shyba, companies' interest in her blog and social media networks took off back in November, after she posted photos of her son napping with the family’s new puppy coiled around him.

The photos went viral, and suddenly, she was everywhere.

“At that point, I hired an agent,” said Shyba, turning to Cara Braude, though she’s not sure the word “agent” is the best fit. “You know, when I introduce her to brands or to PR representatives, I introduce her as being in charge of my sponsorships and partnerships.”

Whatever the right title, it was clear Shyba needed help. On Instagram alone, she has nearly half a million followers, which draws lots of attention from brands. On the other side of the table, companies need help finding the Shybas of the internet.

These matchmakers can range from independents like Shyba’s rep or fancy tech start-ups. But the questions they help answer are similar.

“So if you have a have a budget that you want to allocate to Instagram but you’re like, ‘Well how do I go about finding the 30 people who are the perfect brand ambassadors for me?’” says Rob Fishman, co-founder of Niche, which helps companies place packages of ads across a handful of social networks. “Once I find them, how do I reach out, how much should I be paying them and how do know what the return on my investment is?’”

Another company, Reelio, currently focuses exclusively on YouTube ads.

“YouTube’s the big dog,” say Ben Williams, one of Reelio’s founders as well as its CTO and CIO.

Eventually, the company plans to add other sites, but Williams says YouTube is a good starting point for brands.

“The top hundred channels on are really easy to find,” say Williams. As a result, placing ads with them can be competitive, with rates hitting as much as $30,000 or $50,000 per sponsored video.  

Finding YouTube  "influencers" with more modest, but still significant subscriber bases can be more time consuming, which is where Reelio and its matching algorithm comes in. They typically broker deals where compensation is based on the viewership of a sponsored video.

For example, Reelio matched a YouTube creator with a few hundred thousand followers with Squarespace, a company that helps people make websites.

 The video’s producer staged a race between two smartphones to test their processing speed, even though Squarespace doesn’t sell the phones.

“It’s more for brand recognition, like traditional advertising,” says Williams.

The video had about 330,000 views. People had chosen to watch the video because they were interested in the content -- which is the real match companies are seeking.

One and done: First-year students who bail on college

Thu, 2014-07-10 13:56

Are they leaving to take jobs, disillusioned with college life, or being crushed by sky-high tuition?

The report from the National Student Clearinghouse Research Center doesn’t offer an answer. But whatever the reason, the percentage of first-year students, who started in the fall of 2012 and returned to any U.S. institution the following year, has dropped 1.2 percentage points since 2009.

That may seem like a small increase in what’s known as the “persistence rate,” but it looks a lot bigger when you consider there are millions of college students.

The slide was biggest among students under age 20.

Since the study does not examine the causes for the change, several experts agreed it is difficult to know what’s behind the drop-out rate. It could be better job opportunities, or rising tuitions and loan burdens or new alternatives to traditional learning.

The difficulty of transferring from one institution to another could also be keeping the rate down, said William Tierney, a professor of higher education at the University of Southern California.

Whatever the cause, it’s a study people should pay attention to, said Dewayne Matthews of the Lumina Foundation, which helped fund the study.

“Anytime you see those numbers going down that way it’s a cause of concern,” said Matthews.

Beth Akers, from the Brookings Institution, says maybe the numbers aren’t as bad as they appear. She said one-third of students don’t complete their degrees and it’s unclear whether there is any economic benefit to having more years of schooling, if you don’t finish.

“In that case, it’s probably better to opt out sooner rather than later,” Akers said.

How a 19-year-old started the Rollerblade revolution

Thu, 2014-07-10 12:45

There’s a large plot of land tucked in the woods of Waconia, Minnesota that has been home to some very interesting inventions.

It’s the birthplace of a giant, outdoor version of ping pong called Kong Pong; a bike that can be rowed instead of peddled (dubbed, fittingly, Rowbike); a globe-enclosed bed made for sleeping under the stars named LunarBed, plastic penguin lawn ornaments that waddle in the wind, and hundreds of feet of suspended track that can send you peddling or rowing through the air in a device called Skyride.

The brain behind all of these products is Scott Olson. He lives in a barn on this playground property that he converted into a house, with no air conditioning and one small heater. It’s a quiet lifestyle for a man who has been forging inventions for 30 years. His first? One that would make him wealthy and go down in history as one of the top 100 products of the 21st century according to Time Magazine: Rollerblades.

But Olson is quick to point out that he didn’t invent inline skates, or even the concept.

“The inline skate started back before roller skates were even invented, back in the early 1800s,” Olson says.

Olson was just 19 when he stumbled across a pair of inline skates in a catalog while playing junior hockey in Canada. He dreamed of being an NHL goalie, and thought they would be a great way to train in the summer. When he got home to his Minneapolis suburb, his brother had picked up a pair and was skating all over the driveway.

Olson tried them on and knew right away they would be a huge hit. But they hadn’t been so far - SSS had been producing the skates for years, and the guy who ran the local sporting goods shop said the few pairs he had in stock had been collecting dust for years. No one was buying them.

So Olson began tinkering. He made the wheels softer and faster, and put them on a track that could be attached to hockey skates. When he got nowhere peddling his new product at local sporting goods stores, he started approaching hockey players and coaches directly. He offered them a money back guarantee, and soon players all over the Minneapolis suburbs were zipping around on Olson’s creation.

Olson bought a patent off of a Chicago company and eventually crafted a more comfortable and sturdy boot. In 1981, he formed a company and named it Rollerblade, an obvious nod to the hybrid between roller and hockey skates.

“A lot of people thought Rollerblades must’ve started in Southern California,” Olson says. “But in reality, it started in Minneapolis, Minnesota, hockey capital of the world.”

Olson wore his creation everywhere, and when people saw how fast and effortless the skates were, Rollerblades sold themselves, first in the hockey community and then rippling outward.

Olson hired his friends to work for him, and one of them ended up embezzling from him. He was on the brink of losing the company altogether when two investors made him a deal. They would keep the brand alive and give him a tiny percent. Olson says he made enough money to live comfortably for the rest of his life.   

He now spends his time dreaming up new inventions like the ones that are strewn about his Waconia farm.

Rollerblade sales shot up to $10 million in 1988 and the industry peaked at nearly half a billion dollars in the 1990s. But by the early 2000s, popularity slumped, and sales have waned steadily since.

Olson says even though he doesn’t have a stake in the company anymore, he’s still frustrated that you don’t see as many of them as you used to.

“I haven’t figured it out, but I think like a lot of product,s they kind of go in cycles,” Olson says. “Skateboards and roller skates in their day would climb and drop off and climb again. What we need right now is a hit in one a movie out in (Hollywood). We need somebody taking those blades out and using them like they’re meant to be used.”

Olson may be waiting for the American Rollerblade resurgence, but the skates are still popular in some places. In fact the people of France have been described as “obsessed.”

Gini: the measure of inequality

Thu, 2014-07-10 11:26

Not everyone has the same amount of money. Some are richer. Some are poorer. That's pretty obvious. But just how much more money do the rich have? How much poorer are the poor?

Those are questions that not that long ago, people didn't really know how to answer.

The going theory in the early 1900s was that in any country, at any point in history, wealth distribution was constant.  That “everywhere, at all time, the top 20 percent have 80 percent of the wealth, and the bottom 80 percent split the 20 percent remaining,” says Professor Jean-Guy Prevost, who studies the history of statistics at the University of Quebec in Montreal. 

A century ago, Prevost says, before there were many wealth or income statistics available, influential economists like Vilfredo Pareto argued there was a natural order to the ratio between the haves and the have-nots.  One that could not be changed.

Then a handsome and stubborn Italian statistician named Corrado Gini came along. Gini found the idea of wealth distribution being always the same absurd. Being a statistician, he expressed this in a 35-page paper called “On the Measurement of Concentration and Variability of Characters,” published in 1914. 

(Courtesy:International Journal of Statistics, 2005)

 In the paper, Gini analyzed as much economic data as he could find from different parts of the world— records on income distribution in Denmark versus Norway, on the varying size of inheritance to residents of Swiss cities, on the distribution of property holdings in Tasmania compared to South Australia.

In the process, Gini created what we now call the Gini Index. Basically it’s a scale from zero to 100 that allows you to measure just how concentrated income or wealth is in a given country at a given time.

A perfectly unequal country, where one person has all the wealth, would rank 100 on the Gini Index. On the other end of the spectrum, a country where everyone has exactly the same amount of money would rank as a zero. 

Of course, in the real world countries fall somewhere in the middle. On the relatively equal end, Sweden comes in at about a 23 on the Gini Index*.  The U.S. has gone from the low 40s to the high 40s in the last few decades. South Africa, one of the most unequal countries, is about a 62.

When Gini invented the index at the beginning of the 20th century, many countries, including the U.S., were headed into an era of rising equality and a growing middle class. Today many of those same countries seem headed in reverse, which has made the Gini Index a central measurement for everyone from the Wall Street Occupiers to President Obama.

But in case you're thinking the guy behind this inequality measurement was some kind of liberal softy? Guess again. Corrado Gini was a card-carrying fascist.

Yes, that Fascist Party. The one known for embracing racial supremacy, totalitarianism, and jack boots. Gini wasn't just a member. He built and defended the ideology in his book “The Scientific Basis of Fascism.”

“He was even more fascist than the Fascist Party at the moment,” says Giovanni Favero, an economic historian at Ca'Foscari University in Venice.

For Gini and the Fascist Party he belonged to, measuring inequality wasn't important because they cared so much about the poor, explains Favero. Instead, they cared about maintaining the proper balance between rich and poor. If a country got “too equal,” Gini worried you’d “lose social differences, you have people who are not used to have wealth using their wealth in bad ways and things like that,” says Favero.

But a society that was “too unequal” could also be bad in Gini’s eyes. If kids from wealthy families started inheriting too much money, “they would kind of make a retreat from the productive sector, and became people who lived on their interest only,” explains Prevost. In other words, lazy. “And so lose their function as a ruling class.”

Even though Corrado Gini was a fascist, once he let his Gini Index out of the bottle, so to speak, it became a tool that transcended fascist ideology. Or any ideology at all.

“Just having that measure changes the conversation,” says Andrew Berg, an economist at the International Monetary Fund. What made Gini's work important-- and still relevant 100 years later--is that by having a way to measure inequality you could start asking new questions, from all different points of view, about the way a society's wealth is distributed.

“There's a set of political, ethical or moral questions you might ask whether we care about the ratio between the rich and poor for example, about how inequality matters for things like well being. Or you might ask, is the crime rate higher in unequal countries? Do unequal countries grow faster?”

These are questions that have since been asked by people across the ideological spectrum. From Marxists (some of whom were Gini’s students) to World Bank economists, to market strategists at multi-national corporations.

And if you want to find the most comprehensive list of Gini numbers for countries around the world?  It's on the CIA's website. 

 

*Measured after taxes and government safety net programs. Gini coefficients for countries can vary depending on  survey data used, and whether incomes are measured pre or post-tax.  For example, two of the most comprehensive lists of Gini measurements, from the CIA World Factbook and the World Bank have slightly different rankings for countries.

Boeing projects global air travel will double

Thu, 2014-07-10 11:00

Boeing has raised its projection for aircraft sales. The company expects the number of airline passengers to double in the next 20 years, creating demand for nearly 37,000 new planes and a $5.2 trillion market.

Many of those new planes will go to developing countries, especially in Asia, where air travel is taking off as incomes rise. The boom also means a lot more jet fuel will be burned, with an increase in CO2 emissions.

Much of the increased air travel over the next few years will be domestic flights within Asia on smaller, single-aisle planes like Boeing’s 737.

“When you have a smaller aircraft like that and shorter flights, you see an increase in emissions per head,” says Worldwatch Institute project manager Mark Konold.

Emissions from the airline industry could double by 2020 and quadruple by 2050, according to the Intergovernmental Panel on Climate Change.

It’s difficult to predict the exact amount of fuel that a 737 burns on each trip. There are nine variants in the equation, says aerospace engineer Magdy Attia. “A good estimate for the fuel burn is between 1,000 and 2,000 gallons of fuel per hour at cruise."

Attia says new advances in engine technology could increase fuel efficiency by 12 to 15 percent. That would mean substantial savings for airlines. Fuel makes up about half their expenses. But the reduction in emissions would likely be offset by increased air traffic. Air travel currently produces between two and three percent of global CO2 emissions.

Randy Tinseth is vice president of marketing for Boeing Commercial Airplanes. He says Boeing has made gains in fuel efficiency with recent  models. “We are building 737 next-generation airplanes which we call the 737 MAX.”

The 737 MAX is 14 percent more fuel efficient than the previous generation of 737’s. But it’s unclear how many of the new planes Boeing sells will be the more efficient model.

Graphic by Shea Huffman/Marketplace

How contagious is Europe's troubled economy?

Thu, 2014-07-10 11:00

Worries over one Portuguese bank Thursday very quickly became worries over Europe’s broader financial health. Trading was suspended in one of Portugal’s’ largest banks, Banco Espirito Santo, after its stock price dropped 17 percent on news of missed debt payments and preexisting concerns about its parent company.

But why the jump from this one bank to concerns over Europe as a whole?

All it takes is one teetering financial institution to remind investors that Europe’s troubled past is still very much a part of its present, says Kent Hughes with the Woodrow Wilson International Center for Scholars.

“Clearly, memories are still fresh about a very difficult situation in Europe,” he explains. “All you have to do is get a couple people moving and you don’t want to get left behind.”

Fears about Banco Espirito Santo cast doubt over other banks as the  European Central Bank (ECB) reviews the assets of its major financial institutions,  says Robert Kahn, a senior fellow for international economics with the Council on Foreign Relations.“Because there’s so much uncertainty about the bank review, any single event, in a sense, is extrapolated by markets.” 

And more generally, it reminds investors that European growth remains too slow, says Kahn. “Their process of cleaning up their banks has a long way to go and the policies the Europeans are doing are far from ideal from a U.S. perspective.”

However, while Europe is America’s largest trading partner, it’s unlikely that today’s market anxiety will translate into tangible impacts in the U.S, says Clay Lowery with Rock Creek Global Advisors, unless this trend continues or worsens in coming weeks and months.

“If the European economy is not growing as well as one would hope, then that could harm [U.S.] exports,” say Lowery. “People don’t have as much money to buy things. Companies don’t have enough money to buy things, etc.”

Companies heavily invested in Europe might also suffer. But for the most part, the interdependency of American and European economies is a good thing, says Lowery.

Don't call it a Crumback

Thu, 2014-07-10 11:00

In which we learn once again that stock markets are stupid: 

Ticker symbol CRMB today? Up more than 1,000 percent. You read that right.

That's interesting since we learned Wednesday cupcake chain Crumbs Bake Shop has shut everything down and will likely go out of business. Apparently some guy on CNBC said he'd save it – that is, throw some money at it – hence the spike. 

 

What Cleveland's winter did to a local toy store

Thu, 2014-07-10 11:00

The Northeast's rough winter storm a few months back hit big business, federal workers, and Wall Street traders. But small business owners felt the cold impact as well.

Steve Presser, who owns of Big Fun Toy Store in Cleveland, Ohio, says sales were lower than expected.

“Mother nature was not nice to us over the winter," he says. "You know, when you have zero degree temperature and you have a foot of snow, the person who’s looking to buy a collectable toy just doesn’t venture down the street. “

Cleveland also saw record-breaking rainfall in June, which prolonged Big Fun Toy Store’s dry spell . But Presser says he’s an optimist and tries to avoid layoffs.

“In fact I don’t think... in the 23 years I’ve been in business [I've] laid off anybody," Presser says. "I’ve gone with the approach of spot hiring, obviously during seasonal… you know, holiday season and summer. So, I’ve added a couple part-time positions and I’m looking to develop more of a web presence. So I’m able to pick up more hirees that way.”

Regardless of the weather, Presser says Cleveland is making a comeback.

“We’ve always had a strong medical environment. We’re getting stronger in the technology industry. And Cleveland – they use the word ‘comeback’ – but we really are getting stronger.”

Cleveland’s strengthening industries and business has also made it a more appealing place to live, Presser says, and he's been able to expand to a new location in Columbus.

Presser is getting older, and he says he knows there’s an option to sell Big Fun. But for the meantime, he plans to stick around and watch his store flourish. 

Good news for security firms: our data's not safe

Thu, 2014-07-10 11:00

Another day, another data breach. This time, the federal government was the target. It came out today that Chinese hackers broke into the database containing information on federal workers back in March. The hackers seemed to be looking for people who had applied for high-level security clearance. It’s unclear how much data they got.

But this and other high-profile data thefts — like the breaches at Target and Chase bank — illustrate how much hackers have evolved. They used to be bored teenagers or shut-in conspiracy theorist types. That's definitely not the case anymore.

"These are people that sometimes have two Ph.Ds in things like quantam mechanics and physics," says Larry Ponemon, Founder Chairman of the Ponemon Institute, a reseach think tank that specializes in data security. "They can pretty much get anywhere they want to if they put their minds to it."

Ponemon says cybercriminals could be bankrolled by companies, drug cartels or even governments, and they often work in teams.

"The bad guys... will find talent and there’s an underground market for it that’s global," says Ted Julian of CO3 Systems, which helps companies respond to data breaches. He says companies and government organizations need to assemble teams of their own to secure everything from financial transactions to email and mobile apps. And they’ll have to keep investing.

"The problem is whatever solutions we create today, within a matter of months, they figure out an end run around that technology," says Ponemon. Even with organizations spending around $44 billion a year on cyber security, cyber crime costs consumers an estimated $110 billion annually.

 

What happens when you try to become an NYC Lyft driver

Thu, 2014-07-10 09:28

Among the more befuddling facial hair choices to show up in Brooklyn lately (and, believe me, there are quite a few out there) is a new one -- the pink mustache. But these peculiarities won't be worn by tattooed graphic designers riding their fixed gear bicycles to the artisanal mayonnaise store. Starting Friday, they'll start adorning the fronts of cars throughout the borough and neighboring Queens as Lyft begins offering limited service in New York.

Lyft is one of a number of startups disrupting -- and upsetting -- the taxi industry. 

This week in New York, that disruption was on full display as the city’s Taxi and License Commission declared the ride-sharing service “unauthorized” and Lyft reportedly said it would start up in Brooklyn and Queens anyway.

Unlike Uber, which mostly focuses on connecting you with a professional driver, Lyft bills itself as more of a peer-to-peer ride-sharing program that connects regular people who are just trying to make some extra money. Lyft is often compared to Airbnb, the peer-to-peer home rental service. But there's one crucial difference. Unlike Airbnb, Lyft vets its drivers by running extensive background checks to avoid, say, scenarios where Lyft passengers get driven to all-night orgies.

So what’s it take to sign up? It’s remarkably easy. So easy, in fact, it seemed like just the sort of stunt that could turn into a Marketplace web story. And why shouldn’t I sign up? As a 28-year-old freelance public radio producer living in Brooklyn, I should fit right in with Lyft’s Just Folks Looking For Extra Cash fleet of drivers.

After entering my name, email address, and telephone number, Lyft texted me a confirmation code that brought me to the next step online. Here, I was asked for information about my car. Right, about my car… 

Like most people my age in Brooklyn who have never made enough money in a year to owe taxes, I don’t own a car and never have. But why should that stop me? This is the internet, the place for lies and misrepresentation. I entered in that I was the owner of a 2010 4-door Honda Accord. (Lyft vehicles must be fours doors and model year 2000 or newer.) That seemed to me to be a “realistic” choice for someone like me. I could really see it, too. The side mirror would be held on with duct tape, and the inside would be strewn with garbage. It would probably be navy blue, not because I like that color, but because that seems to be the color of most 2010 Accords. Why not choose a less modest option, like say a new Audi? Don’t ask me, but I’m sure my therapist would have a lot to say about it.

Unfortunately, this is where my ride share fantasy crashed into the concrete wall of reality, resulting in fatality. Lyft drivers are are required to at least 21 years old, have a valid license, personal insurance that meets or exceeds state minimums, and a clean driving record. As someone who doesn’t own a car, only three of those four things are true of me. So I called up Lyft to get some more information.

It can take anywhere from a few days to two weeks for Lyft drivers to get that pink mustache. During that time, their cars are put through a 19-point inspection test while Lyft runs a background check. Prior convictions for things like felonies, theft, violent crimes, sexual offenses, drug-related offenses, DUIs, or extreme driving infractions get you automatically taken out of consideration. (For the record, I totally would have passed this background check. I swear.)

Beyond that, Lyft has other ways of ensuring that its drivers aren't crazy.

"Any passenger should feel very safe getting into a Lyft knowing that not only has Lyft conducted extensive background and safety checks on the driver and his or her vehicle, but that the driver has maintained high ratings from other passenger community members after every ride," says Katie Dally from Lyft's communications department. "Because all rides are matched through the app -- street hails are not allowed on the Lyft platform -- trips are GPS-tracked."

Drivers are paid "donations" in some markets. Lyft says drivers keep 80 percent of those donations, plus 100 percent of any tips on top of that. Making the service donation-based also conveniently helps Lyft avoid local taxes, laws, and regulations in some instances.

Ranking the drivers helps Lyft root out any issues with drivers or their cars. Dally told me that the company always contacts drivers in instances of low ratings or donations. I suppose it's good to know the company is willing to hear your side of the story, especially when you're a driver who is encouraged to greet passengers with a fist bump and invite them to sit in the front seat to have a conversation. (What possibly could go wrong in that situation?)

But back to that pink mustache, officially known as the "Carstache" at Lyft. I couldn't help but wonder, whose responsibility is it to keep it groomed? Leave it to a tech company to have a high-tech solution to something that looks like a skinned Muppet strapped to the grill of your car. Dally said the current iteration of the Carstache, the Carstache 2.0, is made of something Lyft has dubbed "superfur" that is "resistant to sun fading, snow, rain, and other materials that might cross its path." Including, if the below video is to be believed, ranch dressing.

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