Tag: social media

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Tech giants’ slowing progress on hate speech removals underscores need for law, says EC

Tech giants have got worse at removing illegal hate speech from their platforms under a voluntary arrangement in the European Union, according to the Commission’s latest assessment.

The sixth evaluation report of the EU’s Code of Conduct on removing illegal hate speech found what the bloc’s executive calls a “mixed picture” with platforms reviewing 81% of the notifications within 24 hours and removing an average of 62.5% of flagged content.

These results are lower than the average recorded in both 2019 and 2020, the Commission notes.

The self-regulatory initiative kicked off back in 2016, when Facebook, Microsoft, Twitter and YouTube agreed to remove hate speech that falls foul of their community guidelines in less than 24 hours.

Since then Instagram, Google+, Snapchat, Dailymotion, Jeuxvideo.com, TikTok and LinkedIn have also signed up to the code.

While the headline promises were bold the reality of how platforms have performed has often fallen short of what was pledged. And while there had been a trend of improving performance, that’s now stopped or stalled per the Commission — with Facebook and YouTube among the platforms performing worse than in earlier monitoring rounds.

Screengrab of a chart showing varying rates of removals per company, from a European Commission fact-sheet on the hate speech removals code (Image credit: European Commission)

A key driver for the EU to establish the code five years ago was concern about the spread of terrorist content online, as lawmakers sought ways to quickly apply pressure to platforms to speed up the removal of hate-preaching content.

But the bloc now has a regulation for that: In April the EU adopted a law on terrorist content takedowns that set one-hour as the default time for removals to be carried out.

EU adopts rules on one-hour takedowns for terrorist content

EU lawmakers have also proposed a wide-ranging update to digital regulations that will expand requirements on platforms and digital services in a range of areas around their handling of illegal content and/or goods.

This Digital Services Act (DSA) has not yet been passed, so the self-regulatory code is still operational — for now.

The Commission said today that it wants to discuss the code’s evolution with signatories, including in light of the “upcoming obligations and the collaborative framework in the proposal for a Digital Services Act“. So whether the code gets retired entirely — or beefed up as a supplement to the incoming legal framework remains to be seen.

On disinformation, where the EU also operates a voluntary code to squeeze the tech industry to combat the spread of harmful non-truthful content, the Commission has said it intends to keep obligations voluntary while simultaneously strengthening measures and linking compliance with it — at least for the largest platforms — to the legally binding DSA.

The stalled improvement in platforms’ hate speech removals under the voluntary code suggests the approach may have run its course. Or that platforms are taking their foot off the gas while they wait to see what specific legal requirements they will have.

The Commission notes that while some companies’ results “clearly worsened”, others “improved” over the monitored period. But such patchy results are perhaps a core limitation of a non-binding code.

EU lawmakers also flagged that “insufficient feedback” to users (via notifications) remains a “main weakness” of the code, as in previous monitoring rounds. So, again, legal force seems necessary — and the DSA proposes standardized rules for elements like reporting procedures.

Commenting on the latest report on the hate speech code in a statement, Věra Jourová, the Commission’s VP for values and transparency, looked ahead to the incoming regulation, saying: “Our unique Code has brought good results but the platforms cannot let the guard down and need to address the gaps. And gentlemen agreement alone will not suffice here. The Digital Services Act  will provide strong regulatory tools to fight against illegal hate speech online.”

“The results show that IT companies cannot be complacent: just because the results were very good in the last years, they cannot take their task less seriously,” added Didier Reynders, commissioner for Justice, in another supporting statement. “They have to address any downward trend without delay. It is matter of protecting a democratic space and fundamental rights of all users. I trust that a swift adoption of the Digital Services Act will also help solving some of the persisting gaps, such as the insufficient transparency and feedback to users.”

Other findings from the illegal hate speech takedowns monitoring exercise include that:

  • Removal rates varied depending on the severity of hateful content. 69% of content calling for murder or violence against specific groups was removed, while 55% of the content using defamatory words or pictures aiming at certain groups was removed. Conversely, in 2020, the respective results were 83,5% and 57.8%.
  • IT companies gave feedback to 60,3% of the notifications received, which is lower than during the previous monitoring exercise (67.1%).
  • In this monitoring exercise, sexual orientation is the most commonly reported ground of hate speech (18,2%) followed by xenophobia (18%) and anti-gypsyism (12.5%).

The Commission also said that for the first time signatories reported “detailed information” about measures taken to counter hate speech outside the monitoring exercise, including actions to automatically detect and remove content.

Europe lays out its plan to reboot digital rules and tame tech giants

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The Main Tab revamps luxury goods marketplace after picking up $1M in pre-seed funding

Luxury wholesale marketplace The Main Tab is redesigning its platform following a $1 million pre-seed raise earlier this year from serial entrepreneur Jason Bright, who is now the company’s CTO.

The New York-based company is poised to launch the new website and app this fall with about 200 retailers, but has a waiting list of approximately 1,000 retailers, Liseda Shelegu, The Main Tab’s founder, told TechCrunch.

“We have deployed a significant amount of the funding to the technology side to completely replatform our website from scratch,” she said. “We are the only marketplace that is sales rep-friendly. Sales reps write all of the orders and were initially one of our biggest roadblocks because of contracts, so we brought them on board and made them part of the company.”

The Main Tab

The Main Tab landing page. Image Credits: The Main Tab

Additional funding will go toward adding to its team of three, and sales and marketing, something Shelegu, who has a background in sales, was cautious about — not wanting to throw a bunch of money into advertising, so she connected with retailers, brands and sales reps the “old-school way” by reaching out directly.

One of the challenges the company is anticipating is inventory, she added. Inventory shortages and supply chain slowdowns that are plaguing e-commerce right now are affecting her retailers. For example, one owner said inventory of candles would be about 20% of the normal units due to not being able to source glass.

“When you are running a business, this will hugely impact us if we normally do $20,000 a month in October, but may do $5,000 because they don’t have the stock,” Shelegu said.

Shelegu jokes that much of The Main Tab’s product sourcing comes from her being a “shopaholic” and her background in brands. She also gets many targeted ads on social media and will connect with the owners, but she looks for retail price point, packaging and owner story.

Though there are 1,000 retailers vying to get on The Main Tab, the company approves about 30% of them, saving retail buyers time from sifting through thousands of SKUs. Brands are charged a commission when they receive orders from retailers and pay zero commission on any retailers they refer and currently work with. Retailers can also buy now and pay later and take advantage of other rewards based on their business status, Shelegu said.

The website features curated luxury brands, like Agraria and Bodewell Living, and enables them, independent sales reps and retailers to connect and conduct business from one website, Bright said via email.

“The way retail stores discover their products has changed in response to the global health crisis,” he added. “I am always looking to invest in companies that solve issues and was thrilled to invest and join the team as CTO.”

Livestream e-commerce: Why companies and brands need to tune in

 

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Entity Academy, an edtech startup that trains, mentors and places women in tech roles, secures $100M

Women have made great inroads into the tech world in recent years, but there remains a long way to go before we reach a truly equitable state of affairs in workforce numbers, remuneration and product development. An edtech startup called Entity Academy — which provides women with training, in areas like data science and software development; mentoring; and ultimately job coaching — has raised $100 million on the heels of strong growth of its business, and an ambition to improve that ratio.

The financing will be used to help students finance their Entity Academy tuition, which typically costs $15,000. It’s coming from Leif, itself a startup that provides financing services to edtech platforms so that they can offer their students income share agreements (otherwise known as ISAs, arrangements where students are not required to pay back tuition loans until they find jobs).

Jennifer Schwab, the founder and CEO of Entity, has built the business since 2016 on virtually no outside funding, but said that this latest financing is a precursor to the company working on its first, more traditional VC-led equity round.

Entity does not build e-learning content itself but aggregates online courses in data science, software development, fintech engineering and technology sales in “bootcamp” style courses that range from 24 to 33 weeks in length, from providers that range from Springboard and Lambda School through to Columbia University (courses from the universities tend to be presented as created by the institutions, while the others are tailored by Entity itself to its students).

Its technology play is not just related to Entity’s curriculum being focused on tech; as you might expect in an edtech startup, Entity also leans heavily on the data that it has amassed to build its strategy and its business.

That data is based not just on feedback from past and current students and student outcomes, but also other channels. Its “content arm” Entity Mag has quite interestingly gone viral on social media and has more than 1.1 million followers across Instagram and Facebook, which becomes another major channel for engagement (not to mention future students).

Entity uses all this to curate not just what courses it provides and what goes into the curriculum, but also how best to supplement that learning. Today, Entity courses also include targeted mentoring from people working in the tech industry, as well as career coaching en route to finding a job.

Entity’s sweet spot is a bifurcated one, Schwab said in an interview.

It’s women who are either new (typically aged 19-23); or those newly-returning or rethinking their careers (typically aged 30-39, Schwab said). Women in both categories are coming to Entity because they would like to consider tech jobs or more technical promotions, but have found their expertise lacking to do so. Mostly likely, they studied humanities or other non-technical subjects in college, and typically they don’t have the support in their work environments to simply retrain to open the door to those more technical roles.

Added to this is the diversity mix among those women, which also poses a different kind of challenge for that cohort, but also a great boost for Entity for helping them address that. Some 55% of the 19-23 group are women of color; as are 62% of the 30-39 group. Entity aims to provide its tools to address all of these women with all of their different challenges around breaking into tech jobs, in what it describes as a “wraparound” strategy.

“A number of our students would not have pursued STEM programs in the past,” said Schwab, “so we are building skillsets from the ground up.”

With some 80% of students on the courses taking some financing to pay for them, you can see why Entity is now ramping up the means to help them do that.

Since 2016, some 400 students, almost all women, have completed the course. But originally it started as a much shorter (six-week) program, was all in-person and cost $5,000. Now with a number of the courses lasting eight months and all virtual, that spells more costs and more people. Schwab said there are another 300 students going through the course, and it’s on track to have 1,500 next year.

Entity’s growth has dovetailed with bigger edtech and “future of work” trends. Covid-19 foisted a hefty set of expectations on the e-learning industry, with companies building tools to help teach people remotely suddenly finding themselves in unprecedented demand. That was not only because traditional learning environments needed to go virtual, but also because the pandemic led so many — willingly or by force — to rethink what they were doing with their lives, and online education was one key route for doing something about it, at a time when little else could be done.

Entity’s own story fits into both of those story lines.

The company was started originally in Los Angeles by Schwab on the back of her own experiences when she was an advisor at Ernst & Young early in her own career.

“My original goal was to change how women approach careers globally. How to mentor women better was the impetus because I did not have female mentors when I started at Ernst & Young,” she recalled. Feeling “like you are on an island” is bad in itself, she said, but it was a quick evolution into education and job placement alongside that mentoring because “we identified these [as other reasons] why women don’t pursue tech careers.”

The first incarnation of the company in 2016 was as a brick-and-mortar learning center housed in a 1920s building in LA — appropriately enough, formerly a men’s club. That was a compelling sell, with a shorter learning period and being in-person, it saw completion rates of 96% with jobs for more than 90% of the cohorts by the end. “There is a lot more accountability in person,” Schwab said.

The pandemic, of course, forced Entity out of that model, but also became the lever for how it would scale. When it relaunched as a virtual program in 2020, from a new company HQ in Las Vegas, the numbers grew, the company extended the length of the courses, and it increased the tuition to reflect the longer engagements.

And yet that has had a downside, too, with completion rates dipping, something that Schwab said is a priority for the company to work on improving.

The mentors on the program are another aspect of the business that has scaled with the move to virtual. Originally, all mentors were unpaid volunteers who either just wanted to help more women get a leg up in the industry, or more opportunistically use their exposure to the students as a hiring funnel. That, too, is evolving with online engagement.

“Now we pay mentors, and we bring in professional moderators to keep mentor-led discussions at a decent pace,” Schwab said. Often speakers will donate their fees to scholarship and childcare funds, she added. There are some 250 mentors in the Entity network now, with some focused on lectures to groups of students while others work individually with them, usually in connection to the technical subjects they are studying. That number is expected to double to 500 next year, Schwab said.

The job-finding aspect of the role is perhaps the least developed up to now — you can find, in small print, that “job placement is not guaranteed” at the bottom of Entity’s website, alongside the admonition that Entity Academy is a complement to, not a replacement for, traditional education.

But that also speaks to potential opportunities. In that vein, there are others, such as The Mom Project, that are eyeing up the opportunity of specifically targeting the female demographic, speaking not just to the huge female gap in the job market, but also the fact that there just hasn’t been much built to address that. Thankfully, now that appears to be changing.

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Facebook should cancel Instagram Kids, not put it on ‘pause’

Sean Herman Contributor
Sean Herman is the CEO of Kinzoo, a kid tech company based in Vancouver, BC, and is the author of "Screen Captured: Helping Families Explore the Digital World in the Age of Manipulation."

In a blog post announcing plans to temporarily stop developing a new app targeted at children, Instagram head Adam Mosseri wrote, “the reality is that kids are already online, and we believe that developing age-appropriate experiences designed specifically for them is far better for parents than where we are today.”

It’s rare that I find common ground with the head of Instagram, but he is right about this point. Kids and tweens need access to technology that meets their unique needs.

He’s just dead wrong about the solution.

Instagram Kids is a terrible idea, and, thankfully, plans for the pint-size version of the app have been put on hold. This development comes on the heels of yet another controversy — this one about the effects Instagram has on young people’s mental health. Instagram’s internal research suggests that the platform can be a toxic place for teens.

It’s possible for companies to build platforms that better support parents, kids and tweens — but it can’t be done by moving fast and breaking things.

As a father and the founder of a tech company for kids, I always felt that platforms built on social validation, comparison and FOMO weren’t appropriate for younger users. And even though Facebook claimed in public that their research suggested a net-positive effect on mental health, behind closed doors, they had evidence that might not be the case.

Despite all this, I know that healthy technology for kids does exist. It’s possible for companies to build platforms that better support parents, kids and tweens — but it can’t be done by moving fast and breaking things.

Kids are growing up connected

Technology is an ever-present part of our lives and the lives of our children. According to Common Sense Media’s 2020 census on media use, kids from birth to age 8 have almost two and a half hours of screen time daily.

And that was before COVID-19 shuttered schools and made playdates impossible. Kids have turned to screens for remote learning, entertainment, and socializing with friends and family, and many parents will tell you that this increased screen time is a serious source of anxiety.

I believe that lots of parents inherently see the value in technology, especially when it’s been a lifeline keeping us connected during a pandemic. But there’s ambivalence baked in here since there’s a serious dearth of high-quality, safe environments for kids online. As a result, families turn to platforms that were never designed to meet the needs of children, often at the cost of their peace of mind.

Retrofitting adult platforms isn’t the answer

When you think of popular kids’ apps, what comes to mind? Facebook Messenger Kids? YouTube Kids? These platforms all have something in common: They’re repackaged versions of adult apps, and they’ve had safety- and privacy-related scandals. That’s because adult apps simply don’t retrofit well for children. There are a few different reasons for this.

First, a lot of adult platforms are designed to be sticky. This is reflected in features like endless feeds, auto-playing content and arbitrary “streaks.”

These apps also have a way of using our own psychology against us to keep us scrolling. They exploit our need to belong by quantifying social validation. Because of follower counts, like buttons, comments and shares, we can see exactly how popular we are — and we can compare our metrics to others. Many adults can find these features anxiety inducing, and I don’t believe they belong in platforms designed for young users with brains that are still developing. They show up again and again in retrofitted apps for children because they’re at the core of these products.

Second, many tech platforms are wide-open networks. This is not the one-way media that we grew up with. Lots of social and gaming platforms encourage users to amass friends and followers and exchange messages and comments, which can pose serious safety risks for young, inexperienced internet users.

A recent report from Thorn found that scores of children are using adult platforms before they turn 13, and a startling majority of them encounter “abuse, harassment or sexual solicitation from adults.”

When companies try to retrofit platforms for kids that eliminate the stranger danger, they’ve had varied success. Facebook Messenger Kids infamously included a design flaw that allowed children to connect and chat with strangers. That’s because it’s really difficult to take an open network and work backward to lock it up. When it comes to safety, you really need to start from the ground up.

Finally, retrofitted platforms rarely appeal to kids the same way that their adult counterparts do. Ask any parent: Kids love YouTube. Not so much with YouTube Kids. Children are always in a hurry to grow up. They want to feel empowered, and mini versions of adult apps do the opposite. It’s the technical version of the kids’ table, so getting buy-in from young users can be a struggle.

Parental controls can only take you so far

With all the dangers that exist out there for children online, you might think that parental controls are the obvious answer. That’s clearly what Facebook is thinking with their plans for Instagram Kids. But if you ask me, no parental control in the world will stop kids from comparing themselves to others. Again, it’s inherent to the platform.

Parental controls also won’t stop kids from finding creative workarounds. Children are resourceful when they want to circumvent screen time limits. They’re often just tiny, motivated hackers. With all that in mind, the best thing parents can do is get involved — like, really involved — with their kids’ digital lives.

Build a foundation with parental involvement and co-play

If you’ve ever googled “screen time recommendations,” you already know that experts in digital parenting rarely agree on anything. But one thing we hear consistently is that parents need to be involved in their kids’ digital lives.

We need to explore and play together. This gives us the chance to model appropriate behaviors for children and educate them about the big, bad online world. It’s also a lovely way to spend quality time with your kids. Ask them about the games they like. Get them to teach you how they work. Dedicate one night a week to enjoy screen time together.

When tech companies sell parental controls as the ultimate answer for kids’ apps, they’re doing us a disservice. Rules and restrictions are obviously important, but what we truly need are opportunities to use technology together with our kids. We need apps that the whole family can enjoy together — not just where parents can toggle a switch, set a limit and leave.

We need to think beyond parental controls if we want to help children develop healthy relationships with technology. We need to talk to them about social validation. We need to make sure they understand their digital footprints. And we need to help them understand what motivates Big Tech companies.

A junior version of Instagram won’t make the internet a better place for kids or parents. It’ll just hook ’em young — which is something Facebook is clearly motivated to do.

Thankfully, plans for the new platform have been paused, but I sincerely hope they abandon it altogether. Facebook has a questionable track record, and it’s probably not the right company to develop products for children. And Instagram is definitely the wrong template.

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Marc Lore-backed ‘conversational commerce’ startup Wizard raises $50M Series A from NEA

Marc Lore, who earlier this year stepped down from his role as Walmart’s head of U.S. e-commerce, is now backing a new startup in the e-commerce space called Wizard. Lore has taken on the roles of co-founder, chairman of the board and investor in Wizard, a B2B startup in the “conversational commerce” space which believes the future of mobile commerce will take place over text. Ahead of its official launch, Wizard today is announcing its $50 million Series A, led by NEA’s Tony Florence.

Both Lore and Accel also participated in the round. Florence, Lore and Accel’s Sameer Gandhi have board seats alongside Wizard’s co-founder and CEO Melissa Bridgeford.

The startup has an interesting founding story, as it’s not quite as new as it would have you believe.

Bridgeford, who once left a finance career in New York, founded and ran Austin-based Stylelust, a text-based shopping platform that aimed to offer a shopping assistant for consumers. Its users could text screenshots and photos and be served recommendations of products they could then buy over text, without visiting a website. Stylelust took advantage of AI and image recognition capabilities to help provide consumers with options of what to buy. There was also a B2B component to Stylelust, which promised brands a “one-text checkout” experience. According to a cached version of its website, the company touted a 35% conversion rate — or 10x higher performance than web-based commerce.

Wizard says it “acquired” Stylelust, but the entire team (minus a few new C-Suite hires in September), are all prior Stylelust employees. Wizard did not have a product in the market at the time of the acquisition.

Technically speaking, it’s a brand-new company — and one that now has the ability to lean on Lore’s experience in e-commerce as well as that of top-tier investors.

Bridgeford described Wizard as an opportunity “to build our vision on a much larger scale and to partner with Marc, who’s really a tremendous visionary in retail tech and really a proven founder and a proven operator.”

“We really share the vision that conversational commerce is the future of retail,” Bridgeford adds.

The company isn’t yet willing to talk in detail about its product, however. Instead, it describes the B2B service as one that will enable brands and retailers to transact with consumers over text. The service is positioned as “an end-to-end shopping experience” on mobile from opt-in to search to payments and shipping and even reorders.

These text-based chats won’t feel like the annoying interactions you may have had with messaging app chatbots in the past, Bridgeford claims.

“What we’ve found is a combination of automation and human touch really provides the optimal experience for users, while also building a powerful technology on the backend that’s built to scale. That’s really where the Holy Grail is,” she explains. “And that’s really what we see for the future of conversational commerce…we’re incorporating chat abilities, natural language processing — all of those technologies are moving very quickly.”

In other words, the frustrating experience you may have had with a chatbot a year or two ago, may not be the experience you would have today.

“The goal of the technology is to make it seem like you are speaking with a human, when it’s really technology-enabled,” Bridgeford adds.

Stylelust also brought its brand relationships to Wizard as part of the deal.

An earlier version of the Stylelust website listed clients including Laughing Glass Cocktails, Desolas Mezcal, Pinhook Bourbon, Marsh House Rum and Neft Vodkas. A focus on wine and sports retail was also mentioned in an Austin Biz Journal feature. However, a write-up about Florida Funders’ backing of Stylust in 2020 noted relationships with top-tier retailers like Neiman Marcus, Walmart, Sephora and Allbirds.

It’s unclear which relationships will continue with Wizard or whether it will continue to focus on the alcohol brands or other retailers, as the company declined to discuss any details related to its business beyond the funding.

The startup plans to use the funds to hire in areas like AI, machine learning and natural language processing, as well as in non-tech roles, like sales, finance and operations. One of the key hires it’s still looking to make is a chief people officer. Though the current team is working in offices based in both New York and Austin, Wizard is hiring nationwide to fill roles on its remote tech team, it says.

Wizard already has some competitors whose services address certain aspects of its business, particularly in the text marketing space. But more broadly, there are other ways that consumers interact with brands over messaging which could evolve into more fully formed products over time, too. Today, consumers often discover products on social media, like Facebook and Instagram, then turn to Messenger or DMs for product questions. WhatsApp is building out a product catalog for businesses that enables consumers to discover products and services directly in the app. Even Apple entered the market with Business Chat, which already allows for purchases made through iMessage chats.

Wizard’s focus on SMS instead of requiring a dedicated messaging app or, say, an iPhone with iMessage, for instance, could help it to differentiate from competitors. Still, betting on SMS — increasingly a home to text-based spam and scams — is a riskier bet. But it’s one Lore is willing to make.

“Having spent most of my career so far in e-commerce, it’s been clear that conversational commerce is the future of retail,” said Lore. “With deep learning becoming more pervasive, the ability to create a hyper-personalized, conversational shopping experience is going to transform how people shop — and I’m confident that what Melissa and the team at Wizard are building will lead that transformation.”

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TechCrunch+ roundup: Palihapitiya on SPACs, inside Rivian’s IPO, BaaS pros talk shop

I have worked in startups for more than half of my life, and for most of that time, I was the only Black person in the room. As a result, the lack of representation in tech isn’t abstract to me.

Besides my experience, I read and talk about diversity in tech every day, so when I was offered a chance to speak to three founders from underrepresented groups at TechCrunch Disrupt, I was eager for the opportunity.

I was joined by Hana Mohan, a transgender woman who is the CEO and co-founder of MagicBell; Leslie Feinzaig, a Latina entrepreneur who started the Female Founders Alliance; and Stephen Bailey, a Black man who is the founder and CEO of ExecOnline, an online leadership development platform.

Full TechCrunch+ articles are only available to members.
Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription.

Every entrepreneur swims against a current, but these founders face challenges that their white, male counterparts do not.

Each of them has cracked the code that grants access to capital and influential social networks, but I also wanted to learn about how they approached leadership and management, hear some of their strategies for building confidence and find out whether generic best practices for startup success applied to their lived experiences.

Thanks again to the panelists who joined me. We went slightly over our allotted time, but it was a candid discussion that uncovered some unique perspectives. I picked out some of the highlights for the recap, but there’s a video that captures the entire chat.

Have a great week, and thanks for reading TechCrunch+!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

3 founders share strategies for navigating bias and building confidence

Where and when to spend your recently raised dollars

Image Credits: PM Images / Getty Images

Startups have lots of options when it comes to fundraising, with “ample capital, a focus on distributed investing [and] more first-check investors than ever before,” Natasha Mascarenhas writes.

At TechCrunch Disrupt, Harlem Capital’s Henri Pierre-Jacques and BBG Ventures’ Nisha Dua explained how founders should allocate recently raised dollars in today’s environment.

“It’s easier to raise and harder to spend these days, because there’s such a high demand for talent,” Dua said. “The answer for where to spend is going to be different for every company across many different industries.”

Where and when to spend your recently raised dollars

Battery chemistry company Sila’s founder Gene Berdichevsky on the science of scaling up

Image Credits: Bryce Durbin

As part of an ongoing series of interviews with founders of transportation companies, Rebecca Bellan spoke to Sila Nano founder Gene Berdichevsky about his company’s efforts to build and scale the next generation of EV batteries.

“We want to be a world leader and do for the energy storage industry what Intel did for the personal computing industry,” he said.

“Intel didn’t make every single chip or the motherboards or the PCs. They made the most important components whose performance drove the adoption of the devices people actually wanted, and the better the microprocessor got, the better computers got, the more people used them and the more the world changed.”

Battery chemistry company Sila’s founder Gene Berdichevsky on the science of scaling up

What you should know about working with corporate venture investment committees

Image Credits: syolacan (opens in a new window) / Getty Images

Most founders are exclusively focused on getting a check from a private VC firm, but in the first half of this year, corporate venture capital funding totaled $79 billion across 2,099 deals globally.

In a guest post for TechCrunch+, WIND Ventures’ Brian Walsh explains key differences between CVC and VC and shares his basic best practices for getting a “yes” out of a corporate investment committee.

It’s a different environment, but there are “great opportunities with this growing investor set,” he writes.

“By understanding the roles, processes and how to help get their deal through a CVC IC, all parties stand to benefit.”

What you should know about working with corporate venture investment committees

Evil Geniuses CEO on the path toward esports ubiquity

Call of Duty World League Championship 2019

Image Credits: John McCoy / Getty Images

The esports league Evil Geniuses (EG) was founded in 1999, but at TechCrunch Disrupt, CEO Nicole LaPointe Jameson told Lucas Matney that the industry is still in its infancy.

“Today, it’s a bit of a dance to bridge the understanding for some of the older generations that have negative perceptions of what gaming is, which often aren’t factually correct,” she said.

“I am a complete optimist around the younger generations — I don’t believe esports will be perceived as a niche sport for younger audiences.”

Evil Geniuses CEO on the path toward esports ubiquity

Investors share how infrastructure as code is taking over DevOps

Data center equipment: server racks and jumbles of ethernet cables

Image Credits: Erik Isakson (opens in a new window) / Getty Images

“Infrastructure as code (IaC) has been gaining wider adoption among DevOps teams in recent years, but the complexities of data center configuration and management continue to create problems — and opportunities,” Karan Bhasin writes.

He surveyed top investors in IaC startups to find out more:

  • Sheila Gulati, managing director, Tola Capital
  • S. Somasegar, managing director, Madrona Venture Group
  • Aaron Jacobson, partner, New Enterprise Associates
  • Sri Pangulur, partner, Tribe Capital
  • Teddie Wardi, managing director, Insight Partners
  • Tim Tully, partner, Menlo Ventures

Investors share how infrastructure as code is taking over DevOps

Informatica’s IPO will test public markets’ appetite for slower-growing tech offerings

A close-up on a data set of random binary numbers

Image Credits: matejmo / Getty Images

Six years after a PE firm took it private, Informatica filed to go public last week at a valuation reportedly as high as $10 billion.

“A number that big demands exploration,” declared Alex Wilhelm, who pored over the S-1 with great interest yesterday afternoon.

“If investors can get to a point where they consider that the company’s subscription revenues are set for long-term growth, a 7x multiple doesn’t seem too wild,” he writes.

Informatica’s IPO will test public markets’ appetite for slower-growing tech offerings

Index, Sequoia and Canvas investors weigh in on how to raise your first dollars

a paper boat with a dollar bill for a sail

Image Credits: RapidEye (opens in a new window) / Getty Images

“Founders seeking to raise their first round of capital may feel overwhelmed by the prospect,” Mary Ann Azevedo writes. “There is definitely plenty of capital out there, but there are also a lot of startups clamoring for it.”

At TechCrunch Disrupt, three investors unpacked this dilemma, sharing insider tips that will help entrepreneurs clarify their thinking, forge closer partnerships with investors and reset their expectations.

  • Nina Achadijan, partner, Index Ventures
  • Rebecca Lynn, co-founder and general partner, Canvas Ventures
  • Luciana Lixandru, partner, Sequoia Capital

Index, Sequoia and Canvas investors weigh in on how to raise your first dollars

As Apple messes with attribution, what does growth marketing look like in 2021?

Apple logo is seen displayed on a phone screen in this illustration photo taken in Krakow, Poland on September 21, 2021. (Photo Illustration by Jakub Porzycki/NurPhoto via Getty Images)

Image Credits: NurPhoto (opens in a new window) / Getty Images

Apple rolled out app tracking transparency in April, giving users the ability to stop their phones from sharing data about their behavior.

More recently, changes in iOS 15 permitted consumers to opt into mail privacy protection and exert additional control over app permissions.

This is all great news for privacy-minded consumers, but for startups that live and die by their ability to measure growth and engagement, there’s confusion and uncertainty.

To learn more about how growth marketers are recalibrating data collection, Managing Editor Danny Crichton interviewed three experts at TechCrunch Disrupt:

  • Jenifer Ho, VP marketing, Elation Health
  • Shoji Ueki, head of marketing and analytics, Point
  • Nik Sharma, owner, Sharma Brands

As Apple messes with attribution, what does growth marketing look like in 2021?

Why and when startups should look to diverse sources of capital

Man using metal detector at beach

Image Credits: Hill Street Studios (opens in a new window) / Getty Images

Is chasing venture capital the right choice for your startup, or are you doing it because it’s what’s expected?

“Venture capital is a popular source of capital for early-stage startups, but it’s definitely not the only one,” Mary Ann Azevedo writes. “Debt is an increasingly popular alternative, as is non-dilutive, revenue-based financing.”

She spoke with three experts at TechCrunch Disrupt to discuss the various ways companies can raise capital and which might be the best avenue for startups:

  • Arun Mathew, partner, Accel
  • Michele Romanow, co-founder and president, Clearco
  • Harry Hurst, co-founder and co-CEO, Pipe

“We’re very bullish about some of the categories that haven’t traditionally got as much funding,” said Romanow. “We just think that you should think about what you’re spending the money for, and maybe use cheaper capital for those repeatable expenses.”

Why and when startups should look to diverse sources of capital

Chamath Palihapitiya speaks to SPAC concerns, from fees to disclosures to quality

Image Credits: Michael Kovac / Getty Images

Investor Chamath Palihapitiya has formed at least 10 special purpose acquisition companies so far: The New Yorker dubbed him the “Pied Piper of SPACs,” while Bloomberg crowned him “King of SPACs.”

Connie Loizos spoke to him at TechCrunch Disrupt about some of the downsides of SPAC financing that have given concern to many, such as corporate disclosures. “I think the big concern with SPACs is there’s a lot of pixie dust,” she said.

Palihapitiya’s response:

If you look at social media, there was Facebook, and then there [were] a bunch of other crappy social networks that went out of business. I think SPAC sponsorship will look the same way. I think there will be a handful of groups that prove consistently through their actions that they are doing a great job for investors, for disclosure, for regulators [and] for these companies…

Chamath Palihapitiya speaks to SPAC concerns, from fees to disclosures to quality

7 takeaways from Rivian’s IPO filing

Rivian R1T electric trucks IPO

Image Credits: Kirsten Korosec

Transportation Editor Kirsten Korosec and Alex Wilhelm reviewed the IPO for electric vehicle company Rivian and shared seven takeaways.

Building an EV company is costly; so far the company has raised nearly $11 billion and employs around 8,000 people. And it’s just getting started.

Kirsten and Alex reviewed Rivian’s operating results going back to 2019 and found much to discuss — everything except revenue, that is.

It doesn’t exist because Rivian has essentially zero historical revenues to report; that of course makes sense because Rivian is just starting to deliver the first R1T trucks (revenue yay!) to customers. You can spy a dribble of income in the interest section, but that’s effectively it; Rivian has only made money thus far from simply having lots of cash, some of which generated a paltry return.

7 takeaways from Rivian’s IPO filing

The first win: Getting early customers to take a chance with you

Man walks towards a big number one symbol that lights up. He is surrounded by darkness, but walks on a path of sunshine reaching first place. Note: Digitally generated image.

Image Credits: mikkelwilliam (opens in a new window) / Getty Images

There’s a reason why business owners frame the first dollar they earn: It recognizes their own effort, but it also pays tribute to the customer who decided to give them a chance.

“You may be looking ahead to raising some funds and trying to juggle the administrative aspects of running a business, but before all that, the purpose of your company is to sell your solution and generate revenue,” writes Ron Miller.

“But to do that requires customers, so how do you get someone to take a chance with you?”

To answer that question, he interviewed three industry veterans at TechCrunch Disrupt:

  • Kate Taylor, head of customer experience, Notion
  • Pablo Viguera, co-CEO and co-founder, Belvo
  • Vineet Jain, CEO and co-founder, Egnyte

The first win: Getting early customers to take a chance with you

Reid Hoffman on the evolution of ‘blitzscaling’ amid the pandemic

Reid Hoffman

Image Credits: Kelly Sullivan/Getty Images for LinkedIn

Like many buzzwords in tech circles, “blitzscaling” has taken on a life of its own since it was coined by Greylock partner and LinkedIn co-founder Reid Hoffman.

“Blitzscaling itself isn’t the goal,” he clarified during TechCrunch Disrupt.

“Blitzscaling is being inefficient; it’s spending capital inefficiently and hiring inefficiently; it’s being uncertain about your business model; and those are not good things.”

Reid Hoffman on the evolution of ‘blitzscaling’ amid the pandemic

​​What a community means in the modern world of startups

Many different colored rubber ducks sit in wooden pigeon hole compartments. Concept image regarding different ethnicity/gender people living together in harmony together in the same social environment, getting along together, living side by side.

Image Credits: enviromantic (opens in a new window) / Getty Images

When I worked as a community manager, it quickly became apparent that each company I worked at had different ideas about what “community” meant.

Is it a function of customer service? Marketing? Should product teams work to promote it? What’s the best way to measure it?

“What, precisely, do we mean when we use the word ‘community’ in the world of startups?” Brian Heater asked the members of his TechCrunch Disrupt panel:

  • Alex Angel, chief community officer, Commsor
  • Lolita Taub, corporate Development VP at Catalyte, co-founder and general partner, The Community Fund
  • Katelin Holloway, 776 founding partner

What a community means in the modern world of startups

Who needs a BaaS partner, anyway?

Young woman hanging from large green currency symbol balloons against white background

Image Credits: Klaus Vedfelt (opens in a new window) / Getty Images

Banking-as-a-service (BaaS) startups tap into banking infrastructure, which makes it easier for developers to create tools that facilitate payments and transfers. As Ryan Lawler noted recently, it’s never been easier to offer your own credit card.

To get a better understanding of the problem BaaS providers are trying to solve, Ryan spoke with several founders in this space, including:

  • Unit CEO Itai Damti
  • Bond CEO Roy Ng
  • Synctera CEO Peter Hazlehurst

“Unless you’re super deep in financial services already, the time and effort required to figure it out yourself is not worth it and you will never get a great deal,” Hazlehurst said.

Who needs a BaaS partner, anyway?

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Facebook whistleblower Frances Haugen testifies before the Senate

After revealing her identity on Sunday night, Frances Haugen — the whistleblower who leaked controversial Facebook documents to The Wall Street Journal — testified before the Senate Committee on Commerce, Science, & Transportation on Tuesday.

Haugen’s testimony came after a hearing last week, when Facebook Global Head of Safety Antigone Davis was questioned about the company’s negative impact on children and teens. Davis stuck to Facebook’s script, frustrating senators as she failed to answer questions directly. But Haugen, a former project manager on civic misinformation at Facebook, was predictably more forthcoming with information.

Haugen is an algorithm specialist, having served as a project manager at companies like Google, Pinterest and Yelp. While she was at Facebook, she addressed issues related to democracy, misinformation, and counter-espionage.

“Having worked on four different types of social networks, I understand how complex and nuanced these problems are,” Haugen said in her opening statement. “However, the choices being made inside Facebook are disastrous — for our children, for our public safety, for our privacy and for our democracy — and that is why we must demand Facebook make changes.”

The algorithm

Throughout the hearing, Haugen made clear that she thinks that Facebook’s current algorithm, which rewards posts that generate meaningful social interactions (MSIs), is dangerous. Rolled out in 2018, this news feed algorithm prioritizes interactions (such as comments and likes) from the people who Facebook thinks you’re closest to, like friends and family.

But as the documents leaked by Haugen show, data scientists raised concerns that this system yielded “unhealthy side effects on important slices of public content, such as politics and news.”

Facebook also uses engagement-based ranking, in which an AI displays the content that it thinks will be most interesting to individual users. This means content that elicits stronger reactions from users will be prioritized, boosting misinformation, toxicity, and violent content. Haugen said she thinks that chronological ranking would help mitigate these negative impacts.

“I’ve spent most of my career working on systems like engagement-based ranking. When I come to you and say these things, I’m basically damning 10 years of my own work,” Haugen said in the hearing.

Committee Senators listen as former Facebook employee and whistleblower Frances Haugen (C) testifies before a Senate Committee on Commerce, Science, and Transportation hearing on Capitol Hill, October 5, 2021, in Washington, DC.

Committee Senators listen as former Facebook employee and whistleblower Frances Haugen (C) testifies before a Senate Committee on Commerce, Science, and Transportation hearing on Capitol Hill, October 5, 2021, in Washington, DC. (Photo by DREW ANGERER/POOL/AFP via Getty Images)

As Haugen told “60 Minutes” on Sunday night, she was part of a civic integrity committee that Facebook dissolved after the 2020 election. Facebook implemented safeguards to reduce misinformation ahead of the 2020 U.S. presidential election. After the election, it turned off those safeguards. But after the attacks on the U.S. Capitol on January 6, Facebook switched them back on again.

“Facebook changed those safety defaults in the run up to the election because they knew they were dangerous. Because they wanted that growth back after the election, they returned to their original defaults,” Haugen said. “I think that’s deeply problematic.”

Haugen said that Facebook is emphasizing a false choice — that they can either use their volatile algorithms and continue their rapid growth, or they can prioritize user safety and decline. But she thinks that adopting more safety measures, like oversight from academics, researchers and government agencies, could actually help Facebook’s bottom line.

“The thing I’m asking for is a move [away] from short-term-ism, which is what Facebook is run under today. It’s being led by metrics and not people,” Haugen said. “With appropriate oversight and some of these constraints, it’s possible that Facebook could actually be a much more profitable company five or ten years down the road, because it wasn’t as toxic, and not as many people quit it.”

Establishing government oversight

When asked as a “thought experiment” what she would do if she were in CEO Mark Zuckerberg’s shoes, Haugen said she would establish policies about sharing information with oversight bodies including Congress; she would work with academics to make sure they have the information they need to conduct research about the platform; and that she would immediately implement the “soft interventions” that were identified to protect the integrity of the 2020 election. She suggested requiring users to click on a link before they share it, since other companies like Twitter have found these interventions to reduce misinformation.

Haugen also added that she thinks Facebook as it’s currently structured can’t prevent the spread of vaccine misinformation, since the company is overly reliant on AI systems that Facebook itself says will likely never catch more than 10% to 20% of content.

Later on, Haugen told the committee that she “strongly encourages” reforming Section 230, a part of the United States Communications Decency Act that absolves social media platforms from being held liable for what their users post. Haugen thinks Section 230 should exempt decisions about algorithms, making it possible for companies to face legal consequences if their algorithms are found to cause harm.

“User generated content is something companies have less control over. But they have 100% control over their algorithms,” Haugen said. “Facebook should not get a free pass on choices it makes to prioritize growth, virality and reactiveness over public safety.”

Sen. John Hickenlooper (D-CO) asked how Facebook’s bottom line would be impacted if the algorithm promoted safety. Haugen said that it would have an impact, because when users see more engaging content (even if it’s more enraging than engaging), they spend more time on the platform, yielding more ad dollars for Facebook. But she thinks the platform would still be profitable if it followed the steps she outlined for improving user safety.

Facebook grilled in Senate hearing over teen mental health

International security

As reported in one of The Wall Street Journal’s Facebook Files stories, Facebook employees flagged instances of the platform being used for violent crime overseas, but the company’s response was inadequate, according to the documents Haugen leaked.

Employees raised concerns, for example, about armed groups in Ethiopia using the platform to coordinate violent attacks against ethnic minorities. Since Facebook’s moderation practices are so dependent on artificial intelligence, that means that its AI needs to be able to function in every language and dialect that its 2.9 billion monthly active users speak. According to the WSJ, Facebook’s AI systems don’t cover the majority of the languages spoken on the site. Haugen said that though only 9% of Facebook users speak English, 87% of the platform’s misinformation spending is devoted to English speakers.

“It seems that Facebook invests more in users who make the most money, even though the danger may not be evenly distributed based on profitability,” Haugen said. She added that she thinks Facebook’s consistent understaffing of the counter-espionage, information operations, and counterterrorism teams is a national security threat, which she’s communicating with other parts of Congress about.

The future of Facebook

The members of the Senate committee indicated that they’re motivated to take action against Facebook, which is also in the midst of an antitrust lawsuit.

“I’m actually against the breaking up of Facebook,” Haugen said. “If you split Facebook and Instagram apart, it’s likely that most advertising dollars will go to Instagram, and Facebook will continue to be this Frankenstein that is endangering lives around the world, only now there won’t be money to fund it.”

Read more on TechCrunch

But critics argue that yesterday’s six-hour Facebook outage — unrelated to today’s hearing — showed the downside of one company having so much control, especially when platforms like WhatsApp are so integral to communication abroad.

In the meantime, lawmakers are drawing up legislation to promote safety on social media platforms for minors. Last week, Sen. Ed Markey (D-MA) announced that he would reintroduce legislation with Sen. Richard Blumenthal (D-CT) called the KIDS (Kids Internet Design and Safety) Act, which seeks to create new protections for online users under 16. Today, Sen. John Thune (R-SD) brought up a bipartisan bill he introduced with three other committee members in 2019 called the Filter Bubble Transparency Act. This legislation would increase transparency by giving users the option to view content that’s not curated by a secret algorithm.

Sen. Blumenthal even suggested that Haugen come back for another hearing about her concerns that Facebook is a threat to national security. Though Facebook higher-ups spoke against Haugen during the trial, policymakers seemed moved by her testimony.

Facebook grilled in Senate hearing over teen mental health

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Blue Fever, an anonymous social network, acquires Gen Z-founded Trill

With Senate hearings and leaked documents galore, teen mental health on social media is a hot topic right now. But Gen Z founders Georgia Messinger and Ari Sokolov have been trying to create healthier online spaces since they were in high school, when they started the anonymous virtual support app Trill.

“People ask us sometimes, ‘How did you guys decide you wanted to be entrepreneurs while being students?'” Messinger, now a Harvard undergraduate, told TechCrunch. “It was never that we set out to start a business, per se, it’s just that when we were seniors in high school, we set out to just solve a problem for our friend. One of our friends was bisexual and was really struggling with coming out, and we wanted to create an antidote to traditional social networks, which later has been coined ’emotional media,’ and it was just a passion project that grew bigger than we ever imagined.”

Trill has amassed over 100,000 downloads through organic marketing alone, facilitating anonymous support groups around identity, mental health and relationships. With about $100,000 in seed funding from sources like the Founders Bootcamp and Target Incubator programs, the app grew a team of thirty part-time staff (mostly high school and college students), as well as over 100 volunteer moderators. But the college student founders started to look into opportunities to be acquired during the summer of 2019.

“We wanted to be able to keep ourselves open to explore other interests, enjoy our time at school and take care of our own mental health — not doing this full-time job while juggling all of life’s other priorities,” Messinger explained. “But as you can see, it’s now October 2021, so we weren’t rushing into anything.”

Since a large community of young people use their app as a reprieve, Messinger and Sokolov wanted to make sure that if they were acquired, it would be by a company that shared their fundamental mission to develop supportive communities for young people online. Meanwhile, Greta McAnany was looking for opportunities to reach more Gen Z users on Blue Fever, an anonymous social network encouraging authenticity and community support. With McAnany as CEO and co-founder, Blue Fever has secured $4.2 million in venture backing from investors like Amazon Alexa Fund, Bumble Fund, and Serena Williams.

McAnany wasn’t necessarily looking for an acquisition, but she told TechCrunch that when she met the founders of Trill, she was so impressed with them that she wanted to find a way to collaborate.

Image Credits: Blue Fever

“I’ll never forget when I met Georgia in person, and she was like, ‘Here’s how I see the future of emotional media,’ which is what we call ourselves instead of social media,” McAnany said. “I was floored. I was like, ‘Okay, we need to bring you on the team as part of leadership,’ and also, bring in the incredible community and user base that they built.'”

Blue Fever isn’t disclosing the terms of the acquisition, but with today’s announcement, Trill will begin incentivizing its users to move over to Blue Fever. By the end of October, Trill will no longer be functional. In the transition, Messinger and Sokolov will join Blue Fever as advisors on product development and audience strategy. They will also lead a Junior Advisory Board in collaboration with hundreds of beta testers who will provide input on the app’s features.

“I’ve worked closely with Blue Fever’s head of product, and I think we’re very aligned on the future of the product in creating the same experience with slightly different features,” said Ari Sokolov, now a student in the University of Southern California’s Arts, Technology and the Business of Innovation program.

“Even if it’s not the same core user experience, it’s the same core essence behind it,” Messinger added. Blue Fever and Trill are both anonymous apps, but Blue Fever works by inviting users to post pages, which are essentially iPhone notes where users can share their insecurities, victories, worries and thoughts. Pages are posted to journals, which are themed collections of pages about topics like college, relationships, gender identity, magic moments and loneliness. To discourage negative commenting or the disclosure of personal information, Blue Fever currently only allows users to respond with a “hug” or a gif. But McAnany says the app will test commenting. The app also uses an AI called Blue, which McAnany says is like a “big sibling,” helping users find content on the platform that might help them — and if someone posts content indicating that they might be in danger, the AI provides resources for them to seek help.

Blue Fever also has human moderators who help keep the platform safe. Still, as more Gen Z-ers flock to Blue Fever from Trill, it will become even more important that Blue Fever’s combination of human and AI moderation can scale.

Image Credits: Messinger, McAnany, and Sokolov. Photo via Blue Fever.

Mental health-focused apps like Blue Fever and Trill aren’t intended to be a substitute for seeking professional help, and they’re not trying to compete with giants like TikTok, Snapchat, or Instagram. While these platforms aim to comfort Gen Z users who are disillusioned with traditional social apps, anonymous platforms have a troubling track record online.

“Ari and I have been very open since day one that our solution might not be perfect, and there could be better solutions or iterations on the ideas we have,” said Messinger. “We’re not attached to our solution per se — we love Trill and we obviously think it’s a great solution — but we’re more attached to the problem we’re solving than to the solution.”

Anonymous social apps like Snapchat’s Yolo and LMK and Ask.fm have been linked to teen suicides, while Whisper accidentally exposed anonymous posters’ data. Blue Fever and Trill are different from these platforms, since they’re built with mental health considerations at their core, but as Blue Fever considers rolling out commenting and absorbs the Trill userbase, the platform’s ability to keep users safe will be tested. McAnany said that Blue Fever doesn’t store personal identifiable information (PII) alongside user-generated content, and that the app doesn’t maintain a publicly-accessible API, which was how data from apps like Whisper was leaked.

“We love technology. We’re coders, we’re computer scientists, and we don’t dislike our phones. I love social media. I like to make TikToks,” Messinger said. “It’s just about setting healthy boundaries and continuing to ask the question of how our new spaces are going to intervene to help Gen Z and especially marginalized communities within that.”

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Facebook, WhatsApp and Instagram are slowly returning. Why did they disappear to begin with?

Facebook’s day-long outage is by far its longest and most extreme in years. At around 9 a.m. PDT on the U.S. West Coast — where the social giant is headquartered — Facebook, WhatsApp, Instagram and Facebook Messenger seemed to vanish from the internet.

The outage continued through market close, with the company’s stock dropping around 5% below its opening price on Monday. By midafternoon, services were beginning to resume after Facebook reportedly dispatched a team to its Santa Clara data center to “manually reset” the company’s servers.

But what makes the outage unique is just how extremely offline Facebook was.

In the morning, Facebook sent a brief tweet to apologize that “some people are having trouble accessing our apps and products.” Then, reports emerged that the outage was affecting not just its users, but the company itself. Employees were reportedly unable to enter their office buildings, and staff called it a “snow day” — they couldn’t get any work done because the outage also affected internal collaboration apps.

Facebook hasn’t commented on the cause of the outage, though security experts said evidence pointed to a problem with the company’s network that cut off Facebook from the wider internet and also itself.

The first signs of trouble were around 8:50 a.m. PDT in California, according to John Graham-Cumming, CTO at networking giant Cloudflare, who said Facebook “disappeared from the internet in a flurry of BGP updates” over a two-minute window, referring to BGP, or Border Gateway Protocol, the system that networks use to figure out the fastest way to send data over the internet to another network.

The updates were specifically BGP route withdrawals. Essentially, Facebook had sent a message to the internet that it was closed for business, like closing the drawbridge of its castle. Without any routes into the network, Facebook was basically isolated from the rest of the internet, and because of the way Facebook’s network is structured, the route withdrawals also took out WhatsApp, Instagram, Facebook Messenger and everything inside its digital walls.

A few minutes after the BGP routes were withdrawn, users began to notice issues. Internet traffic that should have gone to Facebook essentially got lost on the internet and went nowhere, Rob Graham, founder of Errata Security, said in a tweet thread.

Users began to notice that their Facebook apps had stopped working and the websites weren’t loading and reported experiencing issues with DNS, or the domain name system, which is another critical part of how the internet works. DNS converts human-readable web addresses into machine-readable IP addresses to find where a web page is located on the internet. Without a way into Facebook’s servers, apps and browsers would keep kicking back what looked like DNS errors.

It’s not known exactly why the BGP routes were withdrawn. BGP, which has been around since the advent of the internet, can be manipulated and maliciously exploited in ways that can lead to massive outages.

What’s more likely is that a Facebook configuration update went terribly wrong and its failure cascaded throughout the internet. A now-deleted Reddit thread from a Facebook engineer described a BGP configuration error long before it was widely known.

But while the fix might be simple, the recovery may stretch from the next few hours into the following days because of how the internet works. Internet providers usually update their DNS records every few hours, but they can take several days to fully propagate.

“To the huge community of people and businesses around the world who depend on us: we’re sorry,” Facebook tweeted around 3:30 p.m. local time. “We’ve been working hard to restore access to our apps and services and are happy to report they are coming back online now. Thank you for bearing with us.”

Facebook, Messenger, Instagram and WhatsApp are all down

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Leak shows Facebook’s business model needs regulating, says MEP

The European Parliament’s lead and shadow rapporteur for a major reboot of the bloc’s digital rulebook have called for an investigation following the Facebook whistleblower leaks.

One of the MEPs has also called for incoming EU rules to directly tackle business models that favor “disinformation and violence over factual content”.

In a joint statement, the lead rapporteur for the EU’s Digital Services Act (DSA), Christel Schaldemose (S&D), and Alexandra Geese (shadow rapporteur for the Greens/EFA), said they are in touch with the former Facebook employee turned whistleblower, Frances Haugen.

In an interview with 60 Minutes today, Haugen revealed herself as the source of a raft of recent leaks to the Wall Street Journal which has reported on the internal documents for a number of stories — including that Facebook’s internal research suggested Instagram made teenage girls’ anxiety and body image issues worse and that the tech giant operated policy carve outs for whitelisting celebritie.

The two MEPs said the leaks make it clear that Big Tech must not be allowed to continue to regulate itself.

The EU’s executive moved forward in December last year with a major reboot to the digital rule book — introducing the DSA and another piece of regulation that’s specifically targeted at tech giants’ market power (aka the Digital Markets Act), kicking off a process of (ongoing) negotiations between EU institutions to amend and adopt legislation to extend platforms’ accountability.

The support of the European Parliament is required to pass the digital policy packages. And Geese is unlikely to be alone in calling for stronger measures than were contained in the Commission’s original DSA proposal in light of the latest ugly Facebook revelations.

Facebook whistleblower reveals identity, says company ‘chooses profits over safety’

In the joint statement, Schaldemose said that large tech companies have shown they are “simply not capable” of responsible self regulation.

“The governing of our shared spaces on social media must be done through democratically controlled institutions just as we have done in the parts of our society that do not lie in the digital realm. We must demand transparency from the tech companies and we must allow civil society, law makers and scholarly experts to have insight into the building blocks of the algorithms. This is the only way that we can have a public debate about the effects of these algorithms,” she also said. 

“Today, we know this from the files, there are arbitrary protections of celebrities and a huge focus on negative, wrong and conflict-ridden content that threaten to undermine the very democratic conversation that we once hoped, the social media platforms could strengthen. To keep that hope alive and to allow all voices the ability to join in on the conversation, we must put firm demands to the companies governing these spaces.”

Geese went further — calling for the DSA to be strengthened in light of Haugen’s whistleblowing — arguing that the exposures are game-changing and make the case for regulating whole business models when they benefit from the amplification of disinformation at the expense of truthful content.

“I am extremely grateful for the courage of the whistleblower that finally gives us insights we need to effectively legislate. The revelations couldn’t be more timely for the work on the DSA,” said Geese. “The huge volume of documents and the person’s deep expertise are impressive. Until now, neither the public nor legislators have been able to gain such a deep insight into the mechanisms that have become far too powerful. The documents finally put all the facts on the table to allow us to adopt a stronger Digital Services Act.

“The conversation confirms my view that we need strong rules for content moderation and far-reaching transparency obligations in Europe. In a democracy we cannot tolerate an internet where some people have the right to promote violence and hatred in spite of the rules and others see perfectly legal content taken down by automated filters.

“We need to regulate the whole system and the business model that favours disinformation and violence over factual content – and enables its rapid dissemination. We also need consistent enforcement in Europe. It is naïve to appeal to corporate self-regulation and responsibility. We as elected politicians have the responsibility for democratic discourse and must exercise it in the legislative process.”

In her interview with 60 Minutes, Haugen was quizzed about a complaint made to Facebook in 2019 by major political parties across Europe — which were said to have raised concerns with the tech giant that its algorithmic preferences was forcing them to “skew negative” in their communications on its platforms and that was leading them to adopt more extreme policy positions.

“You are forcing us to take positions that we don’t like, that we know are bad for society, we know if we don’t take those positions we won’t win in the marketplace of social media,” said Haugen, summarizing the parties’ concern in the interview.

Facebook was contacted for a response to the MEPs’ joint statement.

In a statement to Reuters, the tech giant reiterated its customary claim that it has “been advocating for updated regulations where democratic governments set industry standards to which we can all adhere”.

Haugen has said that she made the decision to turn whistleblower after becoming frustrated that Facebook was not responding to such concerns and that executives at the company were instead prioritizing its financial performance over making changes to its content-sorting algorithms that could reduce the platform’s negatively polarizing effects on society.

“Facebook has thousands of [content] options it could show you. And one of the consequences of how Facebook is picking out that content today is it optimizing for content that gets engagement or reaction. But its own research is showing that content that is hateful, that is divisive, that is polarizing — it’s easier to inspire people to anger than it is to other emotions,” Haugen also told 60 Minutes.

A year ago the European Parliament voted to back a call for tighter regulations on behavioral ads — such as those which power Facebook’s content-sorting social media business — advocating for less intrusive, contextual forms of advertising and urging EU lawmakers to consider further regulatory options, including asking the Commission to look at a phase-out leading to a full ban.

With ever more ugly revelations coming out of Facebook — seemingly on a weekly basis — momentum could well build in the European Parliament for taking a far tougher line on engagement-based business models.

Facebook founder Mark Zuckerberg got a frosty reception from MEPs back in 2018 — the last time he took an in-person, publicly streamed meeting with a part of the institution, in that case in the wake of the Cambridge Analytica data misuse scandal.

Asked about the MEPs’ statement today, a Commission spokesperson told the Reuters news agency that its position in favor of regulation is “clear”, adding: “The power of major platforms over public debate and social life must be subject to democratically validated rules, in particular on transparency and accountability.”

Zuckerberg didn’t make any friends in Europe today