Author Archives: Michael Arrington

The Venture Capitalists Behind Superfish

Lots of people are talking about the Superfish malware debacle. People are starting to understand just how bad this situation is.

What I haven’t seen so far why venture capitalists would have backed such a startup.

Superfish investors, board members and advisors include Andrea Stavopouslos (Draper Fisher Jurvestson), Abe Finkelstein (Vintage Investment Partners), Anat Segal (Xenia Venture Capital), Shai Saul (DFJ again) and others.

The company has raised a total of nearly $20 million in venture capital, from people I interact with all the time.

Superfish tells the world they’re a simple visual search startup.

Did these VCs and other individuals, who are on the board of directors and board of advisors, know the truth about Superfish?

If they did, it’s bad. If they didn’t, it’s also bad.

Other startups that use the same SSL intercept module from Komodia include Lavasoft (a free antivirus provider) (now you know why the antivirus is free).

I’d like to see the tech press dig into this. And the venture capitalists involved, particularly the board members, should talk about what they knew and didn’t know.

We Deserve A Better Bitcoin Experience Than Circle

I finally got around to trying out Circle today. Boy it’s bad. Particularly for a company that has raised $26 million.

This is a space we’re interested in at CrunchFund, and are looking for who might be the breakout winners.

Circle is supposed to be a dead simple Bitcoin wallet and money transfer service. But here’s my experience:

1. I created an account and tried to add my bank account and credit card to deposit money into the system (as Bitcoin). I had to give a lot of personal information. And I had to take a photo of my drivers license. And then I had to take a selfie.

2. I don’t have a huge problem with that since these kinds of services are a huge fraud magnet. But Circle said they needed time to review the information. and here’s the problem, they basically (kind of) shut down my account while they were doing that.

3. This is a bad idea. Why? Because they didn’t actually tell me they were suspending my account. A helpful feature showed me how to receive Bitcoin and so I copied the wallet address and sent myself a Bitcoin from another wallet. I thought, hey, I can still use the service while they figure out my banking situation.

4. The Bitcoin transfer went through and was confirmed in the blockchain. But over at Circle I showed no pending transactions and no confirmed transactions…for hours. No messages that my account was suspended, or why fraud prevention would require them to accept a bitcoin transfer to the address they supplied me but not to tell me about it, even as pending.

5. Then things got weird. When I logged into the mobile app (remember, after I had a confirmed Bitcoin transaction) I saw this:

IMG_5168

No sign of the Bitcoin received, either pending or confirmed. But also no suggestion that the account is suspended.

So I logged in from my laptop. And I see this:

Screen_Shot_2015-02-17_at_7.10.04_PM-2

Circle actually kicked me out completely with the message “Additional Review Needed”.

But what about that Bitcoin I transferred to the account? It’s clear from the message above that something is very wrong with my account, but that Bitcoin is gone? Where is that Bitcoin? Maybe they shouldn’t have supplied me with a wallet address before they knew if they wanted me as a customer?

6. Meanwhile my friend Nik Cubrilovic tried to send me Bitcoin through Circle and had his own terrible experience, which you can see here. Here’s the tl;dr of that experience:

6srpn7m

On the upside Circle wouldn’t let him transfer money into the black hole that is my account. But it was certainly an awful user experience, and an unnecessary one. Just because my selfie wasn’t well lighted enough isn’t a good reason to stop a bitcoin-bitcoin transaction. The account verification stuff is to stop me from moving $ into their network fraudulently, which isn’t happening here.

7. So I go to dinner. Two hours and a bit of Twitter bitching later my account has been un-suspended and I can add my credit card to purchase my weekly limit of $100 worth of Bitcoin. So I do that, and make the purchase. And then I get this:

Screen Shot 2015-02-17 at 10.25.29 PM

Overall, I rate Circle zero stars.

Update: Visa has now shut down the credit card I used with Circle. So mare hassle.

I’d like a combined ebook/audio book product

Just finished reading about a fairly stupid new book scanning product from Amazon and it reminded me of a product I’d actually really like to have – books that comes in both ebook (text) and audio formats, with tracking and the ability to switch back and forth at will.

I read most of my books on my iPhone 6 plus now. Before that was an iPad. I also listen to audio books in the car and on walks. But sometimes it takes me months to finish a book in the car @ 13-20 hours of audio, and whatever book I’m listening to there in the car is of course a different book than the one I’m reading on my iPhone.

I’d pay a big premium for a combined book format that had both text and audio and allowed me to switch back and forth while reading/listening. Seems like a no-brainer to me.

MTailor Launches on Android. Get Yourself A Perfect Shirt.

mtailorUp until now only iPad/iPhone people could use MTailor, the app that uses your mobile device to scan you more perfectly than any tailor ever could, and have shirts made to your exact measurements.

I last wrote about them in December when CrunchFund invested. Since then they’ve sold a LOT of shirts.

They haven’t started offering pants or suits yet, but once they do they’ll already have your measurements.

People on Android devices were frustrated that they couldn’t use MTailor. Now they won’t be frustrated any more. Get the Android MTailor app here. It launches today.

The Conference In Detroit

rebootdetroit

Detroit. It was once the factory of America.

No more. For most of us, Detroit has been a city in decline for much or all of our lives. The population has declined rapidly, and everyone has seen the images of abandoned buildings, drug violence and abject poverty.

In other words, Detroit is the perfect place to begin anew. There is an energy there as people begin to rebuild. A willingness to experiment. A stubbornness to succeed.

Tech startups can play a pivotal role in rebuilding, but infrastructure is needed. We are seeing a dramatic increase in the number of Detroit based startups looking for venture capital, and there are more venture funds looking to invest there (as well as a few Detroit-based funds looking to make most of their investments in the area).

But there’s more to do. People (like me) who don’t live there need to spend more time there getting to know the community. People in Detroit need to have more places to exchange ideas, and meet outsiders.

That is why I am so happy to be a part of the new reBOOT Detroit tech conference later this year (May 16-19). Other early speakers who have committed to attend include Robert Scoble, Catherine Bracy and Dave McClure. Many more will be added.

This will be a grande conference, complete with hackathon, modeled after TechCrunch Disrupt.

I hope to see you there. Buy tickets here. And I’ll be giving out a handful of free tickets soon as well.

The Ethics Of Publishing Hacked Information

Like many people I’ve been fascinated by the Sony hacks. So much interesting information (and gossip) about the inner workings of a major movie studio.

I was also waiting for Sony to start balking at the re-publication of a lot of that information by the news sites. And sure enough, they’re now calling it stolen information, and threatening publications that are sharing it with the public.

It reminds me distinctly of the situation we found ourselves in in 2009 when a hacker delivered a truckload of internal Twitter information. See In Our Inbox: Hundreds Of Confidential Twitter Documents. See the updates to that post for how it all played out.

Twitter also halfheartedly threatened to sue us over the publication of that information, although we felt that we were on pretty firm legal ground in moving forward. People were both fascinated with the information, and enraged that we would publish it. Some comments we received:

I think it is unbelievable that we are able to read this documents. This could very well be one of the most powerful internet companies since Google and Facebook and here we are reading their private company notes.

Posting any of the information is unethical. The information is stolen property of a legal company, and releasing that information to the public without the consent of said company is quite unethical. Releasing business strategies and funding information could also be the basis for unknown lawsuits due to damage caused to the company by early release of this confidential information. Its so nice to see that ethics are no longer ethical.

You are receiving stolen property, pure and simple. Now, I have a different perspective on this many others – I was an investigative reporter for many years. Many times, I had people offer me documents. However, a private company’s document are different matter. There is no “public right to know” what a private company’s plans are. The hacker stole them, pure and simple.

What you have done by posting this information is no different than “fencing” stolen merchandise of any kind. Using anything illegally obtained for personal gain is not right! Furthermore, it encourages more criminal activity (theft) and makes it “OK”.

etc.

We actually held back the personal and/or embarrassing information we had, because we thought it was the right thing to do.

In this case, the press is actually focusing on the really embarrassing stuff, the private emails that show drama between actors, directors, studio execs, etc.

Still, I don’t think there’s much of an ethical or legal question here (other than the distribution of the movies, which is a clear copyright issue). The data is out there and it’s going to be talked about. No matter how many threatening letters Sony sends.

And I see little or no public outrage over any of it.

The upside from situations like this is that companies might take security more seriously than before, and that’s a good thing.

MTailor: The Perfectly Tailored Man’s Shirt

mtailorMTailor, one of our recent investments at CrunchFund, is a really amazing company.

They make tailored shirts for men, except your mobile device is the tailor. You go through a quick scanning process that involves leaning your phone or tablet against a wall and then spinning slowly in front of it. Once that’s done MTailor has your measurements, which they say are 20% better than actual tailors they used for a study.

I’ve never owned tailored shirts but I should have. I have a longer body than average and generally buy tall shirts when I can find them. That’s been harder with dress shirts over the years, and I generally just make do with what I can find. With MTailor though, it’s not an issue.

Once you have your measurements you can choose the type of shirt you want (collar, cuff, cut) and the fabric. I’ve now bought five of them (I couldn’t resist the recently added “Blue and Bronze Paisley”), and will order more soon. The great thing is that you only have to measure the first time, after that you just order the shirts you want.

The return policy is awesome. If you don’t like something about the shirt they’ll redo it for you for free. And if you’re still not happy they’ll refund your money (and you can keep the shirt). Based on my experience, though, you’ll be very happy the first time.

Get $20 off by using the code sdjoydlq. It also makes a great holiday gift.

“Time Collapse” And My Broken Brain

I was perusing the news headlines this evening and I noticed this article about Glenn Beck’s health troubles.

A few sentences early on in the article floored me, because it describes how I feel exactly:

“Doctors tell me that up until recently, I hadn’t had a real REM sleep in maybe as long as a decade,” Beck said. “I didn’t have a dream that I remember, except one in a decade. And quite honestly, this isn’t a symptom you look to fix if you have a ton to do. But the first sign of trouble I noticed was what I call a ‘time collapse.’ If we had met before, I couldn’t tell you if it was a month ago, a year ago or when we were in high school. I then began to lose names to faces and over time, entire conversations would go away.”

Beck said doctors told him it was normal for someone processing as much information as he was, and the phenomenon has been discussed by figures like Winston Churchill.

“While essential facts remained, life became fuzzy,” Beck continued.

I also had sleep issues and in 2010, six years into TechCrunch, I began having these vertigo attacks that would knock me out for up to 48 hours. I went to a sleep center and my sleep improved dramatically; the vertigo attacks stopped by mid 2012.

I also looked back at an article about my life in 2010 in Inc. Magazine tonight. By then I had had a big weight gain while overseeing TechCrunch, and I’m sure that it was all related – a cycle of stress/weight gain/sleeping disorders that fed on itself until I left TechCrunch. My body fell apart shortly after that interview for Inc.

None of that is particularly interesting, though. Stress and all the negative health issues that come with it are a common topic on Hacker News and other tech water coolers.

Time Collapse

But I keep going back to that part about Beck where he talks about memory issues, possibly caused by or related to the amount of information he was processing.

After years running TechCrunch I began to notice significant short term memory loss.

I mentioned it in the Inc. article – “But then at some point in the past year, I suddenly lost my short-term memory,”

But over time it’s become much worse. I have significant trouble putting faces with names, and my memory loss is becoming so obvious to family and coworkers that it’s become sort of a joke.

I can remember conversations, or doing things, but I often can’t recall if they happened today, or last week, or even sometimes last year. It’s near universal, and unless I make a significant effort to really put an experience into “long term memory” as it happens, it just sort of fades away.

These things tend to creep up on you and it isn’t something I’ve thought about much until tonight when I read that Beck article, but it really does seem to be getting worse. Or perhaps just not getting better.

There are lots of ways I compensate. Like taking copious notes when I never used to write any. A lot of times I just accept it for what it is.

Beck calls it a “time collapse” and that really is a good way to describe what I feel. He links the issues to “processing as much information as he was” and that feels right, too.

“While essential facts remained, life became fuzzy,” he says. This, again, describes much of the last several years of my life perfectly.

While running TechCrunch I was processing a lot of information. Like nothing I’ve ever experienced before or after. I don’t think I could exaggerate this – “a lot” as in all-caps “A LOT.” Thousands of startups, many thousands of entrepreneurs and sources, and keeping all the details and interconnections straight. There’s a reason I started CrunchBase, to keep all that information organized.

Beck says that it took five years for his mind to recover. I’m about three years post-TechCrunch now. I hope that things will be getting better. Family and friends will certainly appreciate it.

PS – Beck says that Winston Churchill and others have discussed this, but a few minutes searching has turned up nothing. If anyone is familiar with “time collapse” or whatever it’s properly called, I’d love to read more.

Abacus, The Expense Software Employees Love, Raises $3.5 Million

abacus

I hate expense reports. I do them once a year and I still hate it. Back when I had to do them monthly or have the finance department all over me I hated them twelve times as much.

Abacus fixes all that. The company was founded by Omar Qari, Ted Power and Josh Halickman (Foursquare, Google, Etsy Venmo and other experience) and they launched earlier this year at Winter Y Combinator. You can read their launch post here.

How does Abacus fix expense reports? When a company starts using Abacus, they link their bank account. Employees set themselves up in the app and also link their bank account. Employees then submit expenses via taking pictures of the receipts, uploading PDFs or forwarding emails. Managers approve, right away if they want, and the money is reimbursed to the employee the next day. Once the money clears, Abacus automatically syncs transaction information with the company’s accounting software.

No more filling out reports. Abacus does that for the company automatically. That’s most of the pain gone right there. And you get reimbursed immediately – meaning you don’t float the company for 30-60 days while your create your report and it goes through the system.

That’s the way expenses are supposed to be. And that’s why more than 150 companies are already using Abacus, including Pinterest, Foursquare, Coinbase and Betterment. Other very large companies are using Abacus but haven’t yet agreed to be announced publicly.

Companies love Abacus because employees love Abacus. And investors therefore love Abacus, too. The company has raised a $3.5 million seed round led by Bessemer Venture Partners and General Catalyst, with participation from Bloodstone, CrunchFund, FundersClub, Google Ventures, Homebrew, Sherpalo, Patrick and John Collison of Stripe, Josh Reeves of ZenPayroll, Jeff Epstein, former CFO of Oracle and DoubleClick, Naval Ravikant of AngelList, Andrew Kortina and Iqram MagdonIsmail of Venmo, Adam Erlebacher of Simple, Nas and Paul Buchheit of Y Combinator.

Oh, and if you’re wondering why I’m writing this here on Uncrunched when you don’t see this news anywhere else, here’s why. The company had a bunch of press lined up to write about this yesterday but someone (who only publishes a private subscription service) accidentally broke the embargo and then absolutely no one wrote after that. So I am. This company is amazing, we’re proud investors and more people need to hear about it.

And I’ll be sending Omar a copy of Jason Kincaid’s new PR book. I’m not sure he could have foreseen this disaster, but reading Jason’s book will at least give him the comfort of knowing lots of other people have gotten screwed from tech blog politics, too.

Update: Abacus blog post on the new financing is here.

Who’s Lying About Whisper?

Separately, Whisper has been following a user claiming to be a sex-obsessed lobbyist in Washington DC. The company’s tracking tools allow staff to monitor which areas of the capital the lobbyist visits. “He’s a guy that we’ll track for the rest of his life and he’ll have no idea we’ll be watching him,” the same Whisper executive said. – The Guardian

As far as I can tell from what The Guardian has alleged, and from Whisper’s denials, what happened is this:

1. When talking to potential partners, Whisper hypes its ability to track users so that those partners will know who the anonymous sources are and then write stories based on the data. The screenshot of the Whispers being written from (or near) the White House supports this (below), as does the quote above.

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2. But when Whisper talks to the public, they say different things and deny that they track users (although I haven’t seen any comment denying the quote above, and only obfuscating comments about the screenshot).

The denials are strong, but 1 & 2 above can’t both be true. That means someone is lying, and based on what I’ve seen so far, and looking at who has what incentives, that someone is Whisper.

The additional information about Whisper working with the Department of Defense, and likely the Chinese government, are also huge stories on their own.

As an aside, I interviewed Whisper CEO Michael Heyward earlier this year at TechCrunch Disrupt in New York.

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