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A look inside the insanely successful life of billionaire Uber CEO Travis Kalanick

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travis kalanick, ceo uber

Five years ago, Travis Kalanick launched a startup called UberCab in San Francisco.

Fast-forward a few years and Kalanick's company, now just called Uber, is one of the most lucrative in Silicon Valley.

Uber operates in more than 300 cities in 58 countries, and it could be worth as much as $60 billion.

Thanks to that sky-high valuation, Kalanick made Forbes' list of the world's billionaires this year, where the 39-year-old serial entrepreneur is said to have a net worth of about $6 billion.

SEE ALSO: Uber drivers reveal 10 rules to live by if you want a perfect 5-star passenger rating

Uber CEO Travis Kalanick grew up in Northridge, California, a suburb outside Los Angeles. When he was a kid, he wanted to be a spy.

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But Kalanick would eventually follow in the entrepreneurial footsteps of his mom, a retail advertiser. He went door-to-door, selling knives for Cutco as a youngster. He started his first business at 18, an SAT-prep course called New Way Academy.

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Kalanick's parents, Don and Bonnie, would be "rider zero" when Uber launched in Los Angeles.

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A government minister wants the public to email him suggestions on how to turn the UK into a digital leader

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Ed_Vaizey_Official

A UK government minister today called on the public to help him cement the UK's position as a global digital leader and "show the rest of the world how its done".

Digital Economy Minister Ed Vaizey said he will reveal a new "UK Digital Strategy" early next year that will serve the nation up until 2020. But prior to releasing the strategy, he wants individuals and companies to email him with what they believe the UK needs to do if it is to compete with everywhere from Silicon Valley to Shanghai.

"We’re not complacent," wrote Vaizey. "We’ve built a great base — but we need to work hard to make sure we continue to take advantage of the benefits digital transformation has to offer, as an economy and as a society. Other countries are hot on our heels but we want the UK to be synonymous with digital – a place where digital technologies transform day-to-day life, the economy and government."

The government wants to hear from people on variety of technological areas including driverless cars and drones, and the NHS.

"Every part of the UK economy and our lives has been digitised – from how we shop and entertain ourselves to the way we travel to work and manage our health," Vaizey continued. "This digital fever exploded from the cluster in east London, and has spread to every part of the country, making the UK truly a 'Tech Nation' with more than 70% of digital businesses now based outside of the capital. We’re home to thriving digital companies like SwiftKey, TransferWise and onefinestay.

"Come 2020, undoubtedly the UK landscape will have changed to be firmly in the digital age. But how do you want to shape that? Government has ideas and ambitions but as Tech City UK back in 2010 shows, the ideas are out there. So challenge us — push us to do more. Let’s show the rest of the world how it’s done." 

Those wanting to email their suggestions to Vaizey should write to digitalstrategy@culture.gov.uk by 19 January 2016.

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Venture capitalist Brent Hoberman is leaving the fund he set up

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Brent HobermanBrent Hoberman, the British tech entrepreneur and financier (Lastminute.com, MyDeco.com, Made.com, Founders Forum etc.) has recently made a number of decisions that we couldn’t help but highlight on Tech.eu as the new year is almost upon us.

Perhaps most importantly, Hoberman will be leaving PROfounders Capital, the London-based investment firm he set up in 2009 together with Michael Birch, Peter Dubens, Jonnie Goodwin, Rogan Angelini-Hurll and Sean Seton-Rogers.

Hoberman has decided not to stay with the firm as it raises its second fund to invest in European startups; existing portfolio companies include OneFineStay, Busuu and GetYourGuide.

Instead, Hoberman is raising a separate fund to invest smaller amounts in more startups. In a note on his LinkedIn profile, the entrepreneur and angel investor says he aims to inject £500,000 to £1.5 million into promising early-stage tech companies.

In a conversation with Tech.eu, Hoberman declined to say who else is involved, who the backers are, and what the target size of the fund is, but he did say he’s been ramping up angel investments in startups (i.e. Maven, Onfido, etc.) – and seemingly wants to do a lot more of that.

Aside from the new seed fund, Hoberman is also going to focus on Founders Factory– not to be confused with US-based investment firm Founders Factory– which is described on its website as "part accelerator, part labs, part venture fund".

From the Founders Factory website, we learn at least some of the people who are also in the mix: Henry Lane Fox, Jim Meyerle, David Hickson, Paul Egan and George Northcott.

All were previously associated with Hoberman in one way or another.

Aside from Founders Factory and the new seed fund, Hoberman will also remain involved in a number of other ventures, as chairman of Made.com, Founders Forum and startups such as SmartUp andIntros.at, and spend time evangelising Founders Forum For Good and the Founders Pledge.

Worth noting: After nine years on the Guardian Media Group’s board, Hoberman recently left to join the board of The Economist (from 1 January onwards) instead. Hoberman has also stepped down from the board of Shazam, though he will remain on the board of TalkTalk, and an advisory board member toLetterOne Technology (and the UK government).

And so it goes: even this close to the end of the year, we learn that there will be another professional investment firm making seed investments in European startups out of London. In the next few weeks, we’ll provide you with a full overview of the ever-changing European VC landscape, which has been one of the most interesting topics in 2015.

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How trying to make it as an actor helped prepare Jessica Alba to build a $1.7 billion startup

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jessica albaIn a few short years, Jessica Alba has turned The Honest Co., her startup that sells eco-friendly household products like premium diapers and toothpaste, into a $1.7 billion company.

And while Alba’s celebrity status has been a pillar of the brand, she says her career as an actor has helped her in another crucial way: dealing with rejection from investors.

In a new interview, Alba told Vanity Fair about trying to get Brian Lee, a cofounder of LegalZoom.com, to invest early on in Honest Co.

Lee, who was a friend of Alba's husband, agreed to a meeting, but passed on investing. He wasn’t convinced by the idea behind the company. After Lee passed, Alba says two other investment deals fell through. Things were not looking good.

But, though Alba’s celebrity afforded her with many other financial opportunities, she didn’t give up on Honest Co.

“Actresses are used to rejection,” she explained to Vanity Fair. This is certainly true. An up-and-coming actor can face rejection dozens of times for every gig he or she books. Going out on auditions is a brutal process, and in some ways it provides a fertile training ground to develop the thick skin any startup founder trying to raise capital needs.

18 months after Lee rejected Alba’s pitch, he had a baby of his own. And when Lee's wife started “manically” researching household cleaners, he finally got it. “In the time between the first and second meeting, my wife had changed our whole life. Jessica’s goal to make safer products for the family resonated with me,” he told Vanity Fair.

Lee wasn’t the only one, based on the company’s growth so far. Though it wasn't always certain, Alba’s success in business should not, perhaps, be completely surprising if you look at the way she approached her acting career.

Vanity Fair writes that Alba sought out “tentpole franchises” like "Sin City,""Fantastic Four," and the "Meet the Parents" series. She wasn’t just an artist looking to express herself, but an businesswoman trying to put herself into successful franchises.

In Alba's acting career, this didn’t always pan out. She was in plenty of flops. But it seems that Alba’s attitude in approaching business has finally led her to an even bigger blockbuster hit than she could have hoped for in Hollywood.

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NOW WATCH: Jennifer Lawrence turned Hollywood upside down in 2015

Nextdoor, the $1.1 billion social network for neighbors, is finally expanding overseas

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nirav tolia, nextdoor, sv100 2015

After promising international expansion for the last couple of years, Nextdoor, the social network for neighbors, is laying the groundwork for its move abroad.

The company has been testing the social network in the Netherlands, Business Insider has learned. A job listing for a UK country manager says that the site plans to bring the service to that country in early 2016.

On Wednesday, Nextdoor emailed its users with a new privacy policy going into effect on January 7, 2016. Part of that policy is the creation of a new company, Nextdoor EMEA, and specific sections for its non-US users.

The company confirmed that it's "actively exploring expansion," but declined to comment further.

"Nextdoor has now been adopted by more than 50% of all U.S. neighborhoods. The company has always had ambitions of bringing its service to neighborhoods around the world," a Nextdoor representative said in an email. "We are actively exploring several countries for expansion, and will make official announcements in this regard in 2016."

The social network has been promising an overseas expansion for years. In 2012, it hired LinkedIn veteran Minna King to be its VP of international, and its CEO Nirav Tolia told Wired that it was in its early stages of planning for international growth. Wired crowned the local site "the future of global disaster response."

A year later, Tolia told All Things D that the site would head to Canada, South Africa, and the UK in early 2014 followed by Brazil and Japan. That international expansion didn't materialize over the next two years, but that hasn't seemed to slow down the attraction from investors.

The company raised $110 million in March 2015, bringing the valuation of the hyperlocal social network to more than $1.1 billion, and claims to be in more than 50% of all US neighborhoods.

SEE ALSO: Nextdoor cofounder explains how to build a billion-dollar company

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If London’s tech lobbyists get their way, coding and robotics will be compulsory in all schools

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Gerard Grech, Tech City UK CEO

Digital economy minister Ed Vaizey announced earlier this week that he plans to release a new strategy document early next year that is designed to help the UK develop one of the world's most reputable tech sectors. At the time, he invited members of the public to email him ideas for what the document should contain. 

Now, less than two days later, former Blackberry executive Gerard Grech has responded with a blog post outlining what he and his team at Tech City UK, the government-funded organisation he is now CEO of, believe Vaizey needs to focus on in order to help the UK compete with other tech hubs around the world.

Grech, who took the Tech City UK helm from internet safety and security minister Joanna Shields, a former exec at Google and Facebook, highlights four key areas where the UK can do better. 

They include:

1) Skills

"Britain needs a hotbed of home-grown digital talent. Introducing coding to the national curriculum will help tomorrow’s workforce.  Many in the tech world also feel that robotic classes would enhance this, given the increasing importance of hardware in the digital industries. In the meantime, we need government to drive greater collaboration between colleges and business, so that students can graduate as quickly as possible into digital businesses.

"As the world goes increasingly digital, it’s also crucial to encourage people of all ages to learn the latest tech skills and even switch career paths where appropriate. Soon, almost everyone in the UK’s workforce will need to be digitally trained to a certain level just to do their job.

"Finally, to maintain our world-class tech sector, the UK needs access to top-class global digital talent. The new Tech Nation Visa Scheme shows this government recognises how important this is. We would welcome a further demonstration of that ambition, through supporting existing targeted visa routes to attract digital talent."

2) Funding

"Digital businesses still tell us they struggle to access the funds they need to grow. Schemes like SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) at the early stage are helpful. But helping small companies navigate the range of funding routes available, and educating investors about the growth potential of digital investments across the UK would balance overall UK tech investment. The need for more growth capital for later stage businesses was also raised."

3) Government procurement

"Small companies say access to government contracts has improved, but we know that businesses (and government) are not yet reaping the full benefits of procurement reform. government officials must be bolder in how contracts are formulated, recognising the balance that small companies need to strike between risk and reward. We encourage government to involve small businesses in educating and supporting civil servants to translate good intentions into procurement practice."

4) More deep technology companies

"As data becomes the fuel of the digital economy, the UK should do all it can to foster the growth of more ‘deep technology’ companies, specialising in data science, artificial intelligence and machine learning. Companies such as UK-based DeepMind and Improbable have pioneered our way here. More ideas on how this could be done would be welcomed." 

Anyone else that wants to help inform the UK Digital Strategy document can do so by emailing digitalstrategy@culture.gov.uk by January 19.

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This mysterious startup brought me a delicious, free pizza in 20 minutes

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easy as pi pizza

Last night, in search of a quick and easy dinner, I opened up Easy As Pi, an app that's been sitting on my phone for some time. I pushed a button — and twenty minutes later, I was eating a hot, fresh, fancy-pants pizza.

Better yet, it was free: Easy As Pi is so new, they're willing to give all of its users a free pizza just to try it out. 

On its website, Easy as Pi, also called Pi Pizza, calls itself a "hyper-fast artisan pizza delivery service," which seems about right.

The interface is a lot like calling an Uber: Set your location, choose your pie, and they make it really quick and bring it out to you. I ordered my pizza a little after 6:00pm; I was eating at 6:20. 

It's not a new concept — there's a one-button pizza delivery app that's literally called "Push for Pizza"— and startups like Spoonrocket, Sprig, and Munchery have been doing superquick meals-on-demand for a while in San Francisco. Uber recently got into the market too.

More limiting, Easy as Pi is only open on weekdays from 6pm to 10pm. And it has a super-limited delivery range, too, only currently delivering to San Francisco's Mission District and the surrounding area.

But, come on, y'all. Hot, fresh pizza in 20 minutes. This could be big. 

The tale of the pie

Every day, Pi Pizza rotates a menu of three different pizzas, usually some variation on a vegetarian-friendly cheese option, a pepperoni option, and a sausage-based combo pie. When you're not using the free first pizza voucher, each pie is $20, which includes tax, tip, and delivery fee.

Also because it's based in San Francisco's hip Mission District, my pizza came with a postcard-sized art print of a girl in silhouette sitting in front of a car with the headlights on. On the back is the title of the photo — "Veronica Mars Fanfiction #4"— and contact info for Easy As Pi.

easy as pi art print

Pi's pizza is a little fancier than your average corner pizzeria. When I ordered, it was a totally delicious mozzarella and goat cheese pizza topped with shallots, onions, and roasted butternut squash.  

The pies are on the small side, and of the thin-crust, Neapolitan-style pizza variety. In other words, you might feed two or three people with a pie, but this isn't really fit for a Super Bowl blowout. 

I kind of wish it had more traditional cheese and pepperoni varietals, to be honest. Part of why it took me so long to open the app is the seemingly eternal wait for a pie that fit my extremely picky palate.

Mystery pizza

Pi Pizza is a little bit mysterious, as you may have gathered.

To be totally honest, I don't remember where I first heard about Pi Pizza, but I'm pretty sure it was from the Twitter feed of someone in the Silicon Valley investor community.

From its Angelbase profile, Pi was founded by Evan Kuo, a serial entrepreneur whose previous startup, DonorsPlay, helped app developers find audiences on college campuses. It also indicates that Zynga co-founder Justin Waldron is an Easy As Pi investor, as is long-time Google Gmail product manager Keith Coleman.  

The website doesn't offer many details, either, on who's actually making the pizza, or the kitchen it's being made in. A colleague pointed out that we don't even know if this pizza is coming from a kitchen that's up to code. (My answer to that one: Doesn't matter; had pizza.)

There is, however, an official video introducing the concept:

The only way I know it's based in the Mission is because that's their main delivery area. Which is good, because otherwise, pizza delivery options at my house are pretty much limited to Domino's.

It's tasty, it's quick, and $20 for a pie delivered that quickly ain't bad at all. If and when Pi Pizza is ready to scale out to the rest of San Francisco and beyond, it could be a huge hit. 

Of course, one potential roadblock is that San Francisco already has an established pizza joint called Pi Bar. Could get thorny.

 

SEE ALSO: Authorities tracked the Texas 'affluenza' teen to Mexico from a phone call to Domino's Pizza

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Why Los Angeles is an ideal place to build your startup, according to one founder

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leura fine

Two years ago, Leura Fine founded Laurel & Wolf, a startup that matches up interior designers with people who want their homes beautified.

Laurel & Wolf has software that connects designers and clients virtually, letting designers work for customers anywhere across the country.

When you're in need of an interior designer, you go to the website, take a style quiz, answer questions about the space you want designed, and upload pictures and information about the dimensions of your space.

A typical customer gets designs from three to five designers, who have been matched based on your style, your profile, and the type of room you're doing. You pick your favorite designer, and you go through an iterative process with that designer to figure out how best to style your space.

Laurel & Wolf is based in West Hollywood, in Los Angeles. The city may not be as widely known for startups as San Francisco and New York, but it's home to some buzzy startups including Snapchat, Soylent, The Black Tux, and Who What Wear.

So what makes Los Angeles an appealing place to start a tech company?

"We're an incredibly diverse city," Fine told Business Insider. "You have pockets of people from literally all over the world."

In addition, she says it's a great city for creative types, which is pretty on-brand for her company.

"Because the entertainment industry is based in LA, it attracts a lot of creatives," she said. "And I think when you're thinking about building consumer brands, whether it's on your marketing team or your sales team, and the fact that Los Angeles is a huge interior-design hub — we have been able to attract incredible talent, people who already live in Los Angeles, but also people who are interested in relocating to Los Angeles from the Valley and from NYC because it's a great place to live, a great quality of life, and it's great for creatives."

Laurel & Wolf has raised $25.5 million in venture-capital funding from big names including Benchmark Capital. Venture capitalist Tim Draper contributed to the startup's seed round of funding. Right now, the almost two-year-old startup has 52 employees working out of its West Hollywood offices.

SEE ALSO: A startup that's raised $25 million is helping celebrities like Christina Applegate design their homes

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Investors are grumbling that a bunch of billion-dollar startups missed big on 2015 revenue

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unicorn horse dead

It’s not always easy for startups to generate revenue, even when they’re well-funded and supposedly worth billions of dollars to venture capitalists. But some investors seem to be running out of patience with founders who are still trying to figure out their business models.

Fortune’s Erin Griffith recently wrote about Wall Street falling out of love with billion-dollar “unicorn” startups, in part because the revenue they generated in 2015 didn’t live up to the hype. Griffith says investors have told her that most of the 131 unicorn startups missed their 2015 revenue projections. One also told her the startup CEOs weren’t apologetic to investors whatsoever.

"They're not even humble about it," the investor told Griffith.

The truth is, a lot of companies struggle to generate much money during early revenue attempts. Sometimes they figure out it. And sometimes they run out of cash and die.

Pinterest, which seems like a really promising platform for advertisers, may be slower to monetize than investors previously expected; its head of partnerships, Joanne Bradford, left in 2015.

Snapchat, another prized unicorn startup, generated just $3.1 million in 2014 according to a leaked revenue snapshot obtained by Gawker, and it experienced a lot of turnover on its business side in 2015.

Snapchat was supposedly on track to generate $100 million in 2015, but it's not clear if the company hit that mark or not; some advertisers publicly took issue with the fact that Snapchat doesn't yet offer good reporting tools and engagement metrics. 

It's not just social media startups that struggle to generate revenue either. In 2014, Zenefits received unicorn status with just $20 million in annual projected revenue

And many wonder how startups in the on-demand space, like Instacart or and Shyp, will reach enough scale to turn their low-margin services — like shipments and food deliveres — into significant revenue generators.

So what will happen to these unicorn companies in 2016, especially if investors stop giving them cash?

Fab, Evernote, Sidecar, and LivingSocial are good cautionary tales of well-funded startups gone bad. Others like Wish and Uber are already generating billions of dollars and are likely out of the woods. Others will be just fine even if their revenue is shy today. Remember Facebook generated $0 from mobile when it went public. Now its mobile revenue is the majority of its business.

Many startup founders are smart and know what's at stake. In the case of Snapchat, Spiegel has been thoughtfully constructing the perfect business model for years.  "This business needs to make money," Spiegel told one of his investors, who was encouraging Snapchat to raise money instead of monetize. "I'd rather not burn another $100mm before we figure out whether or not we have a business."

SEE ALSO: A founder taking on Amazon explains why it makes total sense for his 6-month-old startup to spend $20 million a month on advertising

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6 things that great startup founders know that other people don't

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jack dorseyI've had the opportunity to be mentored by and invested in by great startup founders from Jason Lemkin to Dave McClure.

Here's what many of the greats know — and practice — that seems to elude many founders:

1. It's all about the people.

Great startup founders don't always have the greatest ideas. But they know how to surround themselves with people will fill the gaps in their thinking, allowing new ideas and implementations to drive their businesses forward.

2. Egos aren't as important as progress.

Oftentimes, great startup founders have big egos. But they know how to put their egos aside so the people who they have so carefully brought into their fold can take action that continues progress towards their visions!

3. Vision must be a rock: unmovable, unbreakable.

While great startup founders may vary their tactics almost daily, and strategies may change drastically from quarter to quarter, their visions of making people's lives better in some way don't vary. Vision stays firm and focused.

4. Competition is irrelevant.

Sure, great startup founders know that competitors exist — they may even track their competitors (although oftentimes they don't). But they know that greatness is about paving your own road; it has nothing to do with the competition.

5. The potholes in the road are ... just potholes.

Great startup founders know what it means to lose a couple battles — to even have investors, friends, or others turn their backs when the going gets hard. But they don't mind. They know where they are headed. They keep trudging forward.

6. The moments of glory aren't really glorious.

In the moments others celebrate the successes of great startup founders, they tend not to notice the party in their honor. They know where their business could be and where it is right now. There's always a gap. So they focus on moving forward!

SEE ALSO: 24 people who became highly successful after age 40

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Renting bunk beds to a millennial workforce may be taking the 'sharing' economy too far

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wework Soho West

I’ve never been a fan of the “sharing economy”. Not that there’s anything intrinsically wrong with Uber, Airbnb and their peers, it’s just that there doesn’t really seem to be much “sharing” going on. It’s more like adding a technological middleman to a rental market.

Now having shaken up the taxi and hotel market, the sharing economy has its eyes on a new market: housing for the digital workforce. This time it may have gone too far.

Leading the charge is WeWork, a company that has turned the yawn-inducing business of leasing office space into a $10bn valuation by trendifying the office experience and attracting like-minded businesses to “share” its spaces. Sounds so much better than a lease, right? (Full disclosure: the Guardian’s New York office is in a WeWork building).

The strategy has paid off for the startup real estate company. It is now bigger than all but the three largest publicly traded office management firms, if only in terms of the value its investors place on it: it manages only a fraction of the number of square feet of office space.

Now WeWork is betting that its new business model, WeLive, will generate some 21% of its total revenue, or $609.8m a year, by 2018. There are a couple of giant assumptions underpinning that forecast, beyond the obvious one that the world of venture capital and the startups it has funded, including the giant “unicorns” (private companies worth more than $1bn), may not remain in robust health.

Even if the startup universe enjoys a blockbuster year in 2016, though, there are a few other considerations. First, the residential real estate scene in cities like San Francisco and New York is notoriously difficult to navigate economically, even if that’s the very reason fueling some of the potential demand for WeLive and other co-living/co-housing solutions. More seriously is the question: to what extent will workers be content, long term, to be presented with these worker dormitories as alternatives to affordable independent accommodation?

Within the technology universe there clearly will always be a subset of geeks for whom the line between work and life doesn’t just blur, but never really existed in the first place. For them, being able to bunk in a micro-apartment conveniently located perhaps only a block or two away from their office, in a space where everything from cleaning to bill paying is handled on your behalf, is the answer to a prayer.

wework

At the other end of the spectrum are wannabes, those drawn to fast-growing cities and who hope to network their way to better jobs. Realistically, the amenities on offer in Brooklyn in the first shared living space to be opened by Common, another co-living company (backed by blue-chip venture capital companies like Maveron) are a lot better than those you’d find in a typical college dorm. The rental rates, at $1,800 to $1,950 a month, are affordable relative to the cost of a Brooklyn apartment when you consider that utilities, basic furniture, and basic supplies (salt and pepper, cleaning stuff) are thrown in.

But if you move into Common, you’re not getting an apartment – just a single bedroom, which is only 100 to 150 square feet. The mattress may be a Casper, but that’s still tiny. For comparative purposes, the median size of a studio apartment in Manhattan is a whopping 550 square feet, and to rent that, you’d pay on average about $200 a month more, although you’d have to hunt around. (Of course, you’d be paying for your own paper towels, and have to bring your own furniture.)

From hacker hostels to luxury accommodation, however, co-living offerings are thriving – as, it seems, are the number of millennials willing to pay a premium price for the ability to connect with one another in what can feel like frenetic, large and overwhelming cities where everyone is focused on work.

Companies like Krash and Pure House are profiting from this wave. Some offer meditation classes, others potluck dinners and networking opportunities. Wi-Fi is a given, as are granite countertops in the kitchen spaces. It’s as if the boarding houses of the early industrial era and legendary residences like Manhattan’s Barbizon Hotel for Women got a 21st-century high-tech, high-gloss makeover.

common bedroom

What they all have in common, however, is the cost. Each of these companies lives in hope of becoming the next high-growth success story; to do so, it must reap a big profit from those millennials renting rooms.

Previous generations of young hopefuls moving to the big city and sharing accommodations (throwing up temporary walls to divide a studio into a one-bedroom apartment or creating an extra bedroom out of part of a living room) did so in order to save money, whether to put toward a down payment, pay off student loans or simply to spend on vacations. It’s hard to see how they can accomplish that these days, if they opt for these co-living units. The cost is carefully calibrated: certainly cheaper than rental units (and more available, especially in some markets, like San Francisco, where there is a dramatic shortage of affordable rental housing) but still far from inexpensive, especially for someone in their 20s just starting out.

Then, too, the profit motive has driven some to cut corners. Consider one San Francisco co-living arrangement offered by Vinyasa Homes Project: $1,800 for a bunk bed in a small shared room. It’s not as bad as it could have been; the tenant who went undercover on behalf of a Bay Area television station to check out the shared house (with 30 housemates) found that some rooms had four roomies in two bunkbeds. At least the kitchens were well-stocked, she reported.

At their best, co-living and co-housing arrangements can be wonderful options. I’m not sure that when tenants are desperate to find some kind of place to live and turn to hacker dorms or other sharing options as alternatives, as they increasingly do in cities like New York and San Francisco where cost and availability of rental housing are big issues, this is going to be the best case scenario for many. Even if it’s cheaper and more accessible, that doesn’t necessarily mean it’s optimal, and certainly city governments can’t assume that this is a model that will come close to solving an affordable housing crisis for millennials.

Then, too, I can’t help my mind flitting back to the old Dickensian image of the workhouse. You lived and worked in the same place, and you worked in order to earn your keep. With the gap between work and life narrowing to a mere sliver – one advocate of co-working and co-living studied a Chicago design, involving a glass wall in the bedroom that could be used as a whiteboard for work during the day and a screen on which you could screen the latest Netflix drama at night – are we heading toward a deluxe, 21st-century version of a workhouse where technology employers can call on our services night and day?

There are plenty of human arguments in favor of sharing our living arrangements, but it should be those, rather than the need to network, to save $150 a month, the inability to find an affordable alternative, that dictate the decision to share a house or an apartment in our 20s, 30s, or – for that matter – in our middle years or as seniors. It should be a voluntary association – as should the selection of our housemates – rather than driven by the economic interests of our employers and the financial incentives of the companies trying to justify a 100% jump in the value of their company in less than a year by commanding big rental fees.

The sharing economy may just have its limits. The extremes of co-housing, such as sharing a single small bedroom and two bunk beds with three other people, may turn out to be one of them.

This article originally appeared on guardian.co.uk and was legally licensed through the NewsCred publisher network.

 

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Paul Graham: 'Ending economic inequality means ending startups'

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paul graham

As the pendulum of wealth swings heavily toward Silicon Valley, Y Combinator founder Paul Graham is happy to push it even higher. Rather, the talk of ending economic inequality — or the growing separation between the rich and poor, but mostly the rich getting richer — makes Graham scared, for society and startups.

In a new essay, Graham defends startups because they generate new wealth rather than take from the existing pie. Instead, people should be focused on ending poverty, not ending income inequality.

Graham obviously has a vested financial interest to think this way. As he says in the opening, he is a "manufacturer of economic inequality." He cofounded Y Combinator, an elite startup school that has churned out some of the most valuable companies in tech, like Airbnb, Dropbox, and Stripe.

Each successful company continues to breed more wealth, whether it's VCs who made big bucks, founders who cashed out, or early employees who made the right bet and worked hard to build a billion-dollar company.

"So when I hear people saying that economic inequality is bad and should be eliminated, I feel rather like a wild animal overhearing a conversation between hunters,"Graham writes. "But the thing that strikes me most about the conversations I overhear is how confused they are. They don't even seem clear whether they want to kill me or not."

So what are people getting so wrong that to address economic inequality would be to kill startups?

To Graham, it's that the rich get rich by taking money from the poor. Calling it the most naive fallacy, Graham argues that most people think about economic inequality as a pie. Rather, his view is that the rich are getting richer in multiple ways and the poor are getting poorer in multiple ways, too.

Startups, and therefore Graham himself, have added a new way to get rich that isn't through crooked businesses or bribing government officials. It's now easier than ever to start a company and, should it be successful, become rich faster.

"I'm all for shutting down the crooked ways to get rich. But that won't eliminate economic inequality, because as long as you leave open the option of getting rich by creating wealth, people who want to get rich will do that instead,"Graham writes.

If you buy his argument that this is not taking money away from the poor, but rather growing how large of a pie wealth can be, then it would be hard to end income inequality without killing the innovation that is creating more of this wealth in the first place.

"You can't end economic inequality without preventing people from getting rich, and you can't do that without preventing them from starting startups," Graham said.

If we're not preventing people from getting rich, Graham says we need to focus on ending poverty, rather than focusing on ending economic inequality, regardless of if it damages wealth in the process. The real problem, he says, is when you conflate the two.

"Poverty and economic inequality are not identical. When the city is turning off your water because you can't pay the bill, it doesn't make any difference what Larry Page's net worth is compared to yours. He might only be a few times richer than you, and it would still be just as much of a problem that your water was getting turned off,"Graham writes.

SEE ALSO: Why I don't celebrate income inequality

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Why Edinburgh is well-placed to create more tech unicorns beyond Skyscanner and FanDuel

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Fighting Unicorns

London dominates the UK technology industry but the Scottish capital of Edinburgh is well positioned to capitalise on a global tech market, The Times reports, possibly creating more unicorns in the process.

The number of startups in Scotland has increased 43% over the last five years to approximately 3,000, with Edinburgh reportedly having a growth rate beyond the rest of the UK.

John Peebles, an American CEO of Edinburgh-based training management software provider Administrate, told The Times that Edinburgh is in a "sweet spot" to capitalise on the global technology market.

One of the main reasons for this is because Scottish students get their university fees paid for, meaning they graduate without any debt and are therefore more willing to take a leap of faith and join a startup when they graduate.

"These people can afford to take a risk and are highly trained," Peebles said. "It’s important that Edinburgh is a relatively cheap place to live and people can enjoy a good quality of life."

Students in the US and England on the other hand are graduating with tens of thousands of pounds in debt and in need of a steady job.

It's all very well getting a free education but the calibre of that education is what really counts. Fortunately, Edinburgh has several strong universities within its boundaries or on its doorstep, including Edinburgh University, Glasgow University, and St. Andrews University.

The increasing amount of interest from overseas investors in Edinburgh-based companies could also help the city's startups grow into technology giants.

Edinburgh's fast-growing digital companies like flight comparison website Skyscanner and fantasy sports website FanDuel have been backed by well known investors including Sequoia and Google Capital.

As a result, Edinburgh is one of the few UK cities outside London that has created technology companies with valuations in excess of $1 billion (£677 million), or "unicorns" as they are otherwise known.

The UK government is aiming to diversify the technology sector so that more large firms are created outside London. To date, however, there are only a handful of UK cities that boast companies with unicorn status, including the likes of Cambridge, Bristol and Edinburgh.

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An online removals startup in Germany has raised $25 million from Index Ventures and other investors

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mover moving truck home

Movinga, an online removals startup in Germany, has raised $25 million (£16.9 million) from Index Ventures and a number of other investors in a Series B funding round.

The Berlin-based company, still less than a year old, is aiming to shake up the traditional relocation industry with its technology platform and a network of local logistics partners.

Movinga claims it can relocate people for up to 70% less than the average moving company. It does this by employing a strategy of harnessing excess capacities from professional partners, in addition to allocating its own fleet of moving vans, to keep prices low.

People moving house can get a quick off-the-cuff quote from Movinga by putting a limited amount of data into its website, including things like how many rooms a house has, how many people live at the property and where the person is moving to and from. Movinga does not require a full itinerary or to send somebody to visit a person’s home before hand.

The latest round, which brings funding in the company up to $31.82 million (£21.5 million), comes just four months after Movinga announced two other large funding rounds, suggesting the company could be on to something big.

Since launching in Germany last year, the company has expanded its service to Austria, Germany, France, Italy, Switzerland, and the UK.

Bastian Knutzen, Movinga’s founder and managing director, said: "We are delighted to be closing our Series B investment after launching only eleven months ago. We are particularly proud to welcome such a renowned investor as Index Ventures. Movinga is the first global moving company that is truly reinventing the industry.

"We will now be investing strongly in talent, technology and customer care."

Timm Schipporeit, an investor at Index Ventures, which has also backed said: "We are hugely impressed by Movinga’s flawless execution and rapid internationalisation.

"We firmly believe in their vision to build Europe’s leading marketplace for removals, a huge category which had yet to be addressed. Bastian and the team offer customers a vastly enhanced and seamless experience when it comes to requesting a price, booking and conducting a move. Similarly, Movinga provides leading removal companies with a comprehensive end-to-end marketing, booking and planning platform, creating extraordinary efficiencies for all parties."

Other Movinga investors include Earlybird Venture Capital, Heilemann Ventures, and Rocket Internet SE (the investment vehicle of the German company building firm Rocket Internet).

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Billion-dollar startup Automattic hires employees without ever meeting them or talking to them on the phone

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Matt Mullenweg WordPress Automattic

When it comes to getting a job at a hot tech startup, most applicants expect to be put through the ringer. But they also expect at some point during the process to speak with their would-be boss before they're given an offer.

But at Automattic, a startup valued at $1.16 billion that's responsible for popular blogging platform WordPress, that's not always the case.

Automattic has one of the most unusual employee cultures of any startup we've ever heard of.

It currently employs about 315 people, scattered across the globe, almost all of them working from home, it says. This, even though it has a cool and dog-friendly office in San Francisco (complete with a nightly dinner).

Remote workers get a $2,500 budget to "trick out" their home offices, plus a new Mac or other technology they may need. The company doesn't hold meetings or use email. Teams interact via chat rooms, Skype or Google Hangouts, or the company's own blogging tools. This keeps remote workers (which is just about everybody) from being treated like second-class citizens, CEO Matt Mullenweg once told Business Insider.

What it saves on office space, it spends on travel, allowing teams to meet up in fabulous, exotic locations anywhere in the world.

Given all that, naturally "Our hiring process is a bit different than most companies," writes Dave Martin on his blog. Martin heads the design team, the growth team and the "Help Scout" product. 

"We don’t schedule chats, we don’t fly people out, and we rarely even have a single voice call before people are hired," he explains.

Automattic MapThe unusual process starts from the get-go: the CEO does the grunt work. Mullenweg screens all applicants, spending one-quarter to one-third of his time on hiring. That way, when a hiring manager gets a resume, it comes from Mullenweg, and the person is already pre-approved by the CEO.

Then the hiring manager invites the person into a Skype chat, telling them to respond when they can. No matter where the people live, no one is doing a middle-of-the-night interview.

The manager asks "strategic" questions, like how comfortable the person is with various programming languages, to share a link/screen shot of their work, their thoughts on things, Martin describes.

If that goes well the person is invited to do a trial project. Coding assignments are pretty common these days. But Automattic pays the person $25/hour and issues no deadline, although most people get it done in about a month, Martin says. People can work on it as they have time and do it while retaining their current jobs.

During the trial, the manager communicates with the person via a private blog, not phone calls.

If the trial goes well, prospects are referred back to Mullenweg for a final chat, where the offer will be made. Basically, they can end up joining the team without ever having had a single voice call with their new direct manager.

How well does it work? 

Martin says that during the year and a half he's been hiring people for Automattic, he's looked at 251 resumes and replied to all of them, sending a "try again" note to the no-thank you's. (Some of them have actually been hired later.). He's chat-interviewed 63 people, given 41 of them a trial projects and hired 14.

The trial project "auditions" has even been written about in Harvard Business Review.

SEE ALSO: The 20 best unicorn startups to work for, according to their employees

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A UK wine startup worth £70 million explains how it nearly ran out of wine — and what it did next

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Naked Wines CEO Luke Jens

Naked Wines — a UK wine retailer that launched in Norwich in 2011 and was acquired by Majestic Wine for £70 million last April— told Business Insider that it grew so fast that it almost ran out of wine.

Naked Wines operates a crowdfunded business involving around 300,000 subscribers who provide funding for more than 100 independent winemakers in over 14 countries. In return, subscribers get access to exclusive wines at reduced prices.

Naked Wines CEO, Luke Jecks, claims the company's wines were "too popular" and the rate at which the business was growing forced him and his management team to make some difficult decisions.

"We had to pause and consider the best path for our customers and our winemakers," Jecks told Business Insider via email. "While it's tempting to turn growth up to the max and let our shareholders know that we're growing exponentially, that would hurt us in the long term when loyal customers came back to the site and found a limited or non-existent wine selection.

"The simple solution of 'just get some wine and sell it' was commercially attractive, but ultimately not authentic and in conflict with the values and model that made the wines so popular in the first place."

Instead, Naked Wines took an approach that startups are often reluctant to follow: It slowed down new business.

  • According to Jecks, Naked Wines:
  • Admitted its mistake to loyal customers
  • Implemented a waiting list to become an Angel (which currently has over 10,000 people on it)
  • Removed a lot of discounts and deals designed to entice new customers
  • Made most of its wines Angel-exclusive
  • Looked for opportunities to fund more winemakers in the new year.

Since nearly running out of wine, the company said it has reviewed its production forecasts.

"We realised that — with a bit of faith, the loyal support of our Angels, and some newly recruited data scientists — there is actually no reason we can’t grow while remaining focused on service, quality, and authenticity," said Jecks.

"We basically needed to be more organised. It’s amazing what a difference a couple of data geeks can make."

He added: "In the end, I think we are all proud of the fact that we stayed true to our commitment to 'quality and authenticity' [and] took some short term pain for a longer term good."

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Publicis CEO explains why startups in the US and Israel crush Europe

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Maurice Levy IGNITION 2015Maurice Lévy will retire in 2017 from Publicis Groupe, one of the largest advertising and communications organizations in the world, after being with the company for 46 years. And for the past 30 years he served as chairman and CEO of the company. At IGNITION 2015 last month, Lévy sat down with long-time friend and Gilt Groupe founder Kevin Ryan to talk about the advertising landscape in the digital world and how France plans to jump start its technology startup scene. 

(Edited for length and clarity.)

Ryan: Let's start off by talking about the overall environment for a second. So I think if I took a poll of everyone in this room, they would say that they think that mobile's going to grow very quickly, online's going to grow quite quickly, print's going to do badly, TV not so great. There's a conventional wisdom that people largely agree with. Is there anything in there that you think is going to be stronger than people think or weaker than people think?

Lévy:It's a $1 billion question because there is a lot of money behind this. I think the conventional wisdom is vastly true. There will be a huge growth in mobile, and this is something we are witnessing every day. So that is something which will remain quite stable. For the internet, digital will take over television within two or three years. And what is also interesting is when you look at data we believe that the value of data is not what will make the value. Take the example of oil. We all say data is the next white oil. [Owning the oil field is not as important as owning the refinery because what will make the big money is in refining the oil. Same goes with data, and making sure you extract the real value out of the data.] These are the two things which I believe will happen in the future.

Maurice Levy sidebarRyan: You have such a global company. Do you see things differently region by region? Are there things dramatically different in South America? On a different note do you see different trends from the conventional wisdom of what's going to happen in all of these regions?

Lévy: Clearly we see that China is now very often ahead of the US. And there are new trend spots clearly between social networks and commerce. And the combination of social and commerce is something which is quite mundane and working extremely well. The other thing is the development of the mobile wallet with the mobile phone. And this is something that we see in India. And we see in Africa it is quite common to see the people with their mobile phones going to buy bread, to pay taxes, to have petty cash, which is on their mobile wallet. So these are trends which are very strong. And they are using their mobile wallet much better that we are doing it in European markets. These are the key trends. We know that Latin America is far behind in terms of penetration. India is very much behind except for some specific areas in some towns. China is clearly moving very fast. And every single day there is something new coming from this Israel.

Ryan: I was at a conference and there was a speaker from Africa, and he said, “I have to remind myself when I come to your conference,” which was in London, “I have to remind myself to bring cash because you're still in a society where people actually use cash and are lower tech than we are.

'I have to remind myself to bring cash because you're still in a society where people actually use cash and are lower tech than we are.'

And the WiFi doesn't work very well.” And all of sudden we thought, ‘wait a second, how did Africa come up and have a higher tech situation?’

Lévy: Yes they are leap frogging us, which is generally what's happened. The reason why Nokia has been built in Finland is simply because Finland was very far behind in terms of infrastructure, so it was relatively easy to implement new technology. And this is the reason why they have been so far ahead during a long period of time. And in Africa we see exactly the same. It's difficult to carry the money, it's difficult to have a banking system with tellers, with distribution of cash. So they are using their mobile phones.

Ryan: When you think of southern Europe, so France, Italy, Spain, combined they are roughly half the size of the United States from a population point of view. And yet Israel, which we're very close to as well, probably has more successful technology startups with their 8 million people, in technology, than those three countries. How worried are you?

Lévy: Definitely, yes.

Ryan: And France does better than Italy and Spain, but are those countries going to pay an enormous price in the next 20 years for that?

Lévy: First, [this happened because some people] invited the few investors and venture capitalists who said 'ok we'll back you so we'll invest and if you lose money in 10 years time we will make up the difference.’ The reality is, is that [the investors] have so much money that [the company] didn't have to pay one single penny. In France the issue is very different. We have very careful mathematicians. And we have three or four things that are missing. The first thing which is lacking is the nucleus, some place where you have all the people together, like Silicon Valley, or what we see in Herzliya. Between Tel Aviv and Herzliya you have all these startups. In France they are all spread out and there is nothing to stop the spread.

VCs are lacking because we have resistance to taking risks. And the connection with the universities is very difficult. It's starting to improve but university is sheltered from the business world and they think they should not have any connection with the businesses because maybe the business is dirty or not very good. We are in a socialist country with a socialist history, and the business people are not smelling very good.

We are in a socialist country with a socialist history, and the business people are not smelling very good.

Now things are changing. In the past 10 years there have been a lot of efforts and a lot of progress has been made. But it's very hard to get the labs of the universities to work with companies and startups. It's very complicated to get this to happen. This is still an area where we have to make progress. But we have a lot of progress in VCs. It's complicated, but we are making progress, and we are optimistic because there are a lot of new ideas. And the young generation, the newcomers are not quick to sell and are ready to take some risks. So there are some positive areas.

Ryan: I'm surely less optimistic than you are in France, or Italy, or Spain. I think over the last 10 years..

Lévy: You are like Donald Trump

Ryan: I'm definitely not like Donald Trump, but I'm less...

Lévy: But he said we are scared to death, I heard him saying this.

Ryan: So I'm not here to defend Donald Trump at all. But I am concerned that in France the cost of hiring people is still so high. So people like me and the hundreds of French entrepreneurs who are in New York City came here because they don't want to start companies in France because the costs of hiring is just too high.

Lévy: Yes you're right. But it’s not only this; this is something you can navigate through. It's very hard to hire and to fire people. When you are a startup you need to hire very fast, and sometimes you have to restructure very fast. And the French laws haven’t adapted. So it's a bit complicated but there is some progress. We have a young Minister of Economy, Emmanuel Macron who is making a lot of reforms and efforts in order to ease the creation of new corporations. And French tech is starting to take off. By the way, as you give me the floor for that, we have decided in order to help to create this fusion and also kind of ignition of startups, we have decided that we would organize, at the end of June, a big event around startups, VCs, professionals, and platforms, in Paris. It will be an event, which I hope will be successful, the kind of event that we already organized in the past, I hope so. So clearly we know that we are not fast enough. We know that we don't have the right organization and the right laws. But we are addressing this issue. And I hope that we will be successful in addressing these issues.

Ryan: Let's talk about Publicis a little bit. It's always been an extraordinary success over the years. You've got a $13 billion market cap, $7 billion in revenue, not growing as much as it used to, in the whole industry. Are you so big now that it's just hard to grow bigger than the market? And do you see five years from now Publicis being as it is right now, but bigger? Do you see things being split up among the holding companies? Is it going to go bigger or smaller?

Lévy: We unfortunately faced what we could call ‘a perfect storm’ in the last 18 months. We had a few issues which came all together, and we have been hugely impacted by those issues. We've remained one of the most profitable companies in the field and I believe that pretty soon we will be able to outperform the market again. We have been historically the best performer of the industry. And they believe, probably second quarter or third quarter next year, that we will surprise the market with the kind of growth we will be able to generate. We have been hit big time. We were pitching for the media account that we've been handling since 1997 for P&G and P&G has chosen another agency. So that’s one of the difficulties we've had to face.

Ryan: But do you think overall that five years from now the large holding companies will still be in the same rough structure? Because GE 10 years ago was GE and now they've decided to get rid of a lot of different things to be a little bit more focused.

Lévy: Yes. But if you look at Publicis we are already a different kind of animal from the other players. And when you look at the top four, WPP, Omnicom, Publicis, IPG, we are all different. Not only in the way we are operating but also what we represent. WPP has a big chunk of its business which is market research. We have no market research. Omnicom has a big chunk of its business which is field marketing. We have no field marketing. We have a big chunk of our business which is about technology and transformation. [We are different in our investing strategies too] we think that instead of investing in areas which we believe will be hugely impacted by digital we should invest in things that will matter most in the future.

I believe that most of our clients, if not all of our clients will be impacted by digital and they will have to transform themselves. I'm using the word Uberization because I think that there will be a disruptor that will come and may change the business for any of our clients, and they will be surprised. So we have to have the capabilities in order to help transform them. Today they want to transform yesterday. Before we bought Sapient, they had to transform themselves and they would have had to work with a consulting firm, a technology firm, and an advertising firm. With our acquisition of Sapient they can have a continuum in the service. We can do the consulting. We have Sapient consulting. We can do the job. We can implement the new platform and help them to change their marketing and organization, and then we can deal with the brand and the sales through all their operations. [We are the only one capable of providing the continuous service.] I believe that we will have more of the same tomorrow. And we will probably continue to invest in digital, in technology, and in consulting. [These are services] which our clients desperately need.

Ryan: Could you see yourselves doing more acquisitions in that area? Or mostly internal growth.

Lévy: The first thing that we have to do before going [acquiring a company] is to prove that our system is working and that we see decent growth and [eventually] outperforming growth. Once we have done this we can think again about acquisition. But for the time being we focus on resuming growth and on outperforming the market. And this is something that we have to do because our credibility has been impacted by the fact that 2014 was a good year. The end of 2013 was not great. And 2015 is definitely not at the level of what people should expect from us, and what we can deliver. We have not delivered, and we have to deliver. That is my task, making sure we are delivering on this.

Ryan: So in roughly a year and a half you'll be stepping down as CEO.

Lévy: May 2017.

Ryan: Is there anything specific you want to accomplish by that point? This will be an incredible change after 30 years at the helm of the company.

Lévy: Yes. What I would like is to celebrate the 30th anniversary of my tenure as CEO.

Ryan: That is quite extraordinary. There are not many people who have done that.

Lévy: I have never thought of legacy or what I want to achieve. I have always been obsessed by the company and making sure that the company is the most contemporary, the most modern of all the players, and delivering the most accurate service for our client. And this requires us to stay on our toes permanently to try to invent and reinvent, to create and recreate a lot of things, before thinking about legacy. Legacy doesn’t mean a lot because once you have left, even if you are one of the biggest individual shareholders it only means [a small amount of influence]. But it's something I'm very pleased about. And you have to accept that the new team that will take over with it's own view and can demolish what you have built. It has to. That is something which I believe is extremely important. And I hate the idea of watching over their shoulders. I don't like that. They have to be free. We should not inhibit the team. What I will be doing is to make sure that they can run the show the way they feel it, how they feel it, and build a better company than what I have been building.

Ryan: One comment, in the beginning of doubleclick, which was 1996 so I was 32 and you and Martin [Sorrell] at that point were very old, 20 years older, which is exactly how old I am now, and you both were leaders in the industry and everyone else is gone of that generation and the two of you are still going into things I would say if a client emails you or Martin, you guys are on it. I don't know how you both do it with 50,000 employees. But there's a reason these guys are running things because they are totally focused and totally committed 20 years later, and it’s impressive to see for the rest of us.

Lévy: Martin is better than me.

Ryan: I see it, you both are very good at that it's very impressive. Let's talk about some of the trends underneath that. One that you deal with, and we at Business Insider deal with, is ad blocking. Give us a quick answer on what's going to happen there and how big of a problem it is and does that go away, and what the solution is. I call it content stealing but that's just me.

Lévy: Ok I have an example because, you know, ad blocking started in Germany. And there has been an answer made by Axel Springer, which is ‘ok if you don't want to receive my ads you have to pay a subscription.’ You always have had people in our industry who don't like advertising. If you look at the population of the world you have roughly 15% that will always be resisting advertising. Fifteen percent of something which has not yet been reached. And the other aspect we have is we have as advertisers and advertising agencies and all the small companies which have been doing programmatic have a huge responsibility in the development of ad blocking, particularly the newcomers because they were in such a hurry to show that the system was working and to grow and they were pouring a lot of ads to the point that people feel that it was an intrusion in their private lives. There was so many. You open GMail, boom an ad. You want to go to another one boom an ad. I understand that people can start to say stop it, let me have a break and look at my emails without having an ad pop up. And the same goes for when they are looking for something on their mobile phone. So we have to be more reasonable in the way we are communicating with the people. We should not submerge them with too many ads. And many of them are not working. So to be more accurate, more precise, to give the information people need at the right time when they need it is something which is important. It's something which they will be grateful for. And when you are distributing tons of ads they say ‘ok come and stop it I can't have it anymore.’ So we need to be reasonable. So that is my point of view. I don't believe that ad blocking will be a huge huge problem.

Ryan: I agree, I think it's solvable. I was in Cuba last week they have no outdoor advertising. It's not so bad actually. Programmatic is another big one of probably big fundamental trends. Do you think it keeps growing and taking market share? And does it have a negative impact on your business? Does it take away some of the things you used to do for clients in terms of media buying?

Lévy: We created the first platform programmatic with Google in 2008. And we were transparent with our clients. They know how much we charge, the cost of each, and our commission. So all of this is fully transparent. There have been a few other platforms which we have been developing either with competitors or independently. And the issue with the development of these platforms is what I was talking about.

Firstly, you have a thirst to develop fast and you are pouring too many ads, and this is something which is working against the interest of the client. The second is that there are now a lot of robots who can open clicks. And they can click instead of human beings and this is damaging the confidence and the trust that the client has on programmatic. And the third aspect is that all the algorithms are not of the same quality. And sometimes you believe that you are targeting a 25-35-year-old young woman and you see that there is a crowd of 78-year-old people who are coming to buy some underwear, so it's not exactly the same kind of underwear that you have to sell. So we have to be extremely cautious with some developments which are made in a way which is not in the interest of the advertiser. And also something which is extremely important is that we have to be extremely cautious. Either we are in charge of buying for the advertiser, in which case we have role, or we are selling, we are a supplier. But when you are doing both, you are the supplier while selling to yourself with a margin and then selling to the client, the debts start to become real and the client is starting to be suspicious about the way you are treating them and what's happening. So we have to be extremely cautious with this. Programmatic is a great thing. Let's be clear there's a zillion websites. It's extremely difficult to address messages. Having cookies is good provided you are very cautious with the users of cookies. But at the same time we have to work within some ethical boundaries. We have to accept the few rules which are extremely important.

Ryan: You mentioned violation of trust. There's the potential investigation right now in the US by the ANA of perceived kickbacks to ad agencies for ad buying. And not everyone knows that France went through this years ago.

Lévy: It was 1992.

Ryan: And laws were passed and companies had to change their behavior it was quite a big deal and a restructuring of the entire industry in France based on that. What do you think is going to happen here? And is there any risk of that happening here?

Lévy: First of all, in France what was happening in those days is exactly what I'm criticizing, which is there were some players, it was not the whole market; we were not doing it. Some players were buying media in bulk and like a wholesaler. It's like OK, give me a ton of pages. A ton is maybe too much; maybe we'll buy only 500 kilos of pages. I pay in advance but pay only 20% of the price, and then they are selling on retail exactly as a wholesaler to two clients. And they say OK, you want it for 50% of the price, so they were making 30%. So it's a different kind of job.

This is banned by law because we have to buy for each client at a price that has to be transparent for the client. This rule already exists in the US. What has been a little bit embarrassing is that there is this programmatic where some players are on both sides. They buy it at price and they sell it at price and there is a difference. There is nothing wrong with this. It is not dishonest, provided that it is transparent. But it's not how clients like us to work. So we have preferred from day one to not do that. There is another aspect that we are not involved in, which is called bartering. And bartering is, for example, when the media needs to buy office space and they pay in advertising space. They give that advertising space to a barter firm which then provides the media with this and then they will sell the space in exchange for product from clients that they will sell to other countries. This kind of business is generating a lot of opacity and people don't understand exactly how this is working. And that is also one of the reasons why there is this suspicion around the business. But the vast majority of the dealings are extremely clear. And in the US the boundaries have been always extremely strict. There are no kickbacks.

Ryan: So you don't expect a big change.

Lévy: I don't expect any change. And I don't expect any law to be passed.

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Google is investing more money in this Berlin startup space that's home to Uber and Twitter (GOOG)

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Factory Berlin Mitte

Google announced today that it is extending its partnership with Factory in Berlin — a startup space home to some of the city's hottest new tech companies and the European outposts of Silicon Valley heavyweights like Uber and Twitter.

Factory, founded in 2011 by CEO Udo Schloemer, received €1 million (£730,000) from Google in 2012, which was to be invested over a three year period. Now the three years is up, and the money presumably spent, Google is renewing its partnership with Factory and investing additional funds.

The Mountain View internet giant did not disclose how much it is investing in Factory but Business Insider understands that the amount is similar to that invested in 2012. The funding comes less than two months after Factory received €1 million (£730,000) from Facebook investor Klaus Hommels, who now sits on the board.

The Google funding will be used to host a number of community events and provide certain Factory members with access to selected product credits for Google services, including the Google Cloud Platform.

In a statement, Jens Redmer, principal of new products at Google, described Factory as "a community of exciting innovators from the new and old economy," adding that 2016 should be an "exciting year."

Redmer added: "We’ll start a mentorship programme from Google, similar to what we are running at [Google] Campus London. We are happy to prolong our commitment and look forward to supporting the Berlin startup ecosystem in the coming year."

Factory is now home to 800 residents including music streaming service SoundCloud, customer service provider ZenDesk, as well as several larger international firms that want to tap into Berlin's tech scene, which is home to a mix of hackers, privacy experts, scientists, and video companies.

The innovation space is an official "Google for Entrepreneurs Tech Hub Partner" and therefore a base for the outreach of Google to the Berlin startup scene. The Google for Entrepreneurs network includes 25 innovation spaces worldwide.

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The UK tech sector raised £2.5 billion from venture capitalists in 2015

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Will Shu Deliveroo resized

UK technology companies raised a record $3.6 billion (£2.5 billion) from venture capitalists in 2015, according to data from research firm CB Insights and London & Partners, which promotes the London Mayor’s office.

Startups in Britain raised 70% more from venture capitalists last year than they did in 2014, when $2.1 billion (£1.4 billion) was raised, suggesting appetite from investors for UK tech companies has grown significantly.

Since 2010, UK technology companies have collectively raised $9.7 billion (£6.6 billion) with London-based firms accounting for more than half of the total, securing $5.2 billion (£3.5 billion).

While the numbers sound impressive, it's worth noting that rival tech companies in Silicon Valley are raising significantly more money. Data from CB Insights shows North American tech companies raised $59.0 billion (£40 billion) in the first nine months of 2015. 

The data shows that half of all venture capital investments into London’s tech sector were made by UK investment funds, with the US (29%), Israel (4%) and Germany (2%) also contributing. The most active investor was Index Ventures, followed by Accel Partners, Balderton Capital, 83North, and Hoxton Ventures.

Fintech startups raise the most

Companies operating in London's booming fintech sector raised more money than those in other sectors as investors saw potential in a number of platforms that stand to disrupt the world's biggest banks.

Peer-to-peer lending service Funding Circle had the largest single deal of the year with a $150 million (£103 million) investment round led by Moscow-headquartered DST Global. Elsewhere, Funding Circle rival Zopa raised $106 million (£72.4 million) and money transfer services TransferWise and WorldRemit raised $58 million (£40 million) and $100 million (£68.4 million) respectively. 

Another huge funding round was secured by restaurant food delivery company Deliveroo, which raised $100 million (£68.4 million) in November, bringing total funding in the company up to $195 million (£133 million).

Many of the UK's fastest-growing tech firms now have valuations over $1 billion (£680 million), making them "unicorn" businesses. However, the UK is yet to create a technology company on anywhere near the same scale as Google, Amazon, Facebook, Apple, and so on, which are all valued at over $100 billion (£68 billion).

Eileen Burbidge, partner at Passion Capital and a government technology advisor, said the figures show that the UK's tech sector is continuing to mature.

"Investors are increasingly attracted by the diversity of London’s tech ecosystem but also our strengths in certain sectors such as fintech. With more investment coming in from overseas and greater access to London-based growth funds, there has arguably never been a greater time to start and grow a digital business in London."

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The cofounders of a London cleaning startup have left 6 months after being bought by a German rival for £24 million

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Hassle founding team

The cofounders of London cleaning startup hassle.com have left the company half a year after it was acquired by German rival Helpling for £24 million.

Writing on Medium today, cofounder Alex Depledge revealed the news in a blog post titled "Moving On...".

Depledge came up with the idea for Hassle, which connects customers with cleaners, five years ago along with cofounders Tom Nimmo and and Jules Coleman.

"From January 1, we (Alex and Jules) will be transitioning into advisory roles and stepping back from the day to day running of the company," wrote Depledge. "The company is in safe hands and 2016 will see it continue on to bigger and better things with us cheering it on from the sidelines.

"We have well and truly caught the entrepreneurship bug and know our hearts lie in the creation and chaos of seeing something emerge from nothing. We don’t know what the next five years will bring but we can only we are fortunate enough that will come anywhere close to the rollercoaster ride of the past five."

According to Tech.EU, Hassle has appointed former Groupon employee Sam James as its new managing director for the UK and Ireland.

Benedikt Franke, cofounder of Helpling, said: "We want to thank both Alex and Jules for their hard work over the last five years. It is because of their dedication, Hassle.com is the strong and growing company it is today. They built a fantastic product and brand that is known across the UK and Ireland and should be very proud of all they have achieved. We wish them the best of luck for their future endeavours."

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