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How To Build A Crowdsourced Company, From the Ground Up

By Mike Montgomery

We have all heard the traditional story. You have an idea and take it to an angel investor early on — or a venture capital firm after developing a prototype — to get funding. But this model has its drawbacks. Investors can make demands that a founder might not agree with. Many VCs are only interested in an exit, not building a sustainable company, and VC-backed companies often fall just as quickly as they rise.

What if there were a better way? Dirk Ahlborn, the CEO and co-founder of Hyperloop Transportation Technologies, thinks there is.

Back in 2012, Ahlborn was part of an online business incubator called JumpStartFund that harnessed the power of online communities. “If you think about it, you do everything online: your dry cleaning, your groceries, even finding love — but building businesses still very much happens offline,” he says. Ahlborn recognized the power of online crowdsourcing platforms like Kickstarter to bring people together, and he wanted to find the best way to harness the wisdom of passionate communities.

The opportunity arrived in the summer of 2013 when Elon Musk published a famous white paper proposing the hyperloop concept: massive magnetized tubes that could carry passengers at 700 mph from Los Angeles to San Francisco.

Ahlborn thought the project would be a perfect fit to show how a crowdsourcing business model would work and asked Musk for permission to put it on the JumpStartFund platform. Ahlborn invited anyone to participate as long as they were willing to work in exchange for stock options. After sifting through hundreds of applications, he enlisted the help of 100 engineers. Many of them had day jobs at places like Boeing, NASA, Google and Airbus.

Read the full article here.

Staying In A D.C. Hotel For Inauguration Weekend? Prepare To Be Gouged

By Mike Montgomery

This weekend will be a historically busy one for Washington D.C. Today, Donald Trump was sworn in as the 45th president of the United States in front of the U.S. Capitol, where his fans were out en masse to watch. Saturday, hundreds of thousands will flood the streets of the city to protest his presidency.

No matter which side of the fence they’re on, every D.C. visitor staying in a hotel had one thing in common: They all paid an insane amount for lodging.

We did some research into rooms this coming weekend and found that hotels are jacking up their prices by more than 800%. Book a room at the Fairmont in Georgetown earlier in January and you would have paid $190 per night for a room with a king bed. The weekend of the inauguration? That same room will cost you $1,600 per night (and you’ll have to book for at least three nights.)

Prices won’t be any better in Dupont Circle. A room at the Kimpton Carlyle Hotel, which would typically go for $99 per night, will cost you $899 per night the weekend of the inauguration.

It is a shame that these absurd rates put hotel rooms out of reach for most Americans who might want to either see democracy in action or protest the people who are soon to be running the country.

Read the full article here.

Hemant Taneja Asks: How Will We Balance A Future With Fewer Jobs And Longer Lifespans?

Venture capitalist Hemant Taneja sees a huge problem looming for America. Technology is increasingly taking over jobs that were once done by people. As this trend accelerates, there will be fewer and fewer people who need to work.

But at the same time, we are living a lot longer. And while ideas like a universal basic stipend might take care of paying all of those people who no longer have to work — what will they do with their days? Work gives our lives meaning as much as it fills our wallets. Are we destined to be sloths who simply consumer entertainment like the dystopian vision laid out in the movie Wall-E or the book Ready Player One?

Taneja thinks we can do better.

“Are we creating a world of technology that replaces human potential or are we unleashing human potential?” asked Taneja. “What do we want to be as a society?”

Taneja, a managing director at General Catalyst Partners, discussed these issue with CALinnovates Chief Evangelist Kish Rajan during an interview for the A Step Ahead podcast. Taneja believes that technology needs to work harder to include humans in the equation or risk cutting them out altogether. That means thinking about solutions to the unintended consequences of technology before we are faced with them as a society. Social platforms, he argued, should have seen the risk of something like fake news coming and gotten out in front of the problem in a responsible way.

“The right thing would be for the innovation sector to think about responsible innovation and for large tech platforms to handle their power with care and algorithmic accountability,” said Taneja.

If not, the government will eventually come in and impose regulations on the industry that could stifle innovation. Taneja believe that now is the time for Silicon Valley to take a hard look inward and decide how it can innovate more responsibly going forward.

Listen to the rest of the interview here:

Like what you hear? Subscribe to A Step Ahead on iTunes.

CALinnovates Welcomes Call For Fresh Look at Online Consumer Privacy Rules

By Tim Sparapani

Innovators and startups welcome the news that policymakers are taking a fresh look at how to protect consumers’ privacy online.  While the headlines may try to spin this as just another partisan food fight, in truth it’s an incredibly important opportunity to restore balance and clarity to consumer privacy rules in the online ecosystem.

As we’ve said from the start, the privacy rules adopted late last year by the Wheeler FCC were clearly flawed and the ongoing jurisdictional tussle over privacy needs to be resolved for the benefit of consumers and companies alike. The Wheeler rules created an inconsistent, confusing patchwork, in which consumers’ private information on the internet would be protected differently depending on which servers and routers their data happened to be crossing. Yes, the exact same data would arbitrarily enjoy different levels of protection. 94% of consumers believe that all companies collecting their information online should face the same set of rules – and they’re right. The Wheeler rules break from the bipartisan FTC privacy framework that has seen the internet thrive and grow in other ways, introducing new friction and erecting confusing and unjustified new obstacles to even the most mundane uses of data any consumer would see as non-sensitive.  This kind of regulation is bad for consumers, bad for entrepreneurs, and bad for innovation.

In addition, a little known consequence of the Wheeler rules was that they jeopardized the United States’ privacy agreement with the European Union. The Privacy Shield is predicated in part on the United States having a single, lead consumer privacy agency, and the dilution of the FTC’s authority puts this agreement at risk.

We’re glad that policymakers at the FCC and in Congress will have an opportunity to review the rules again and, hopefully, correct these flaws.  A return to the FTC’s role as the lead privacy enforcer would allow innovators to do what they do best: innovate. In addition, a consistent set of rules would do well to assuage consumer advocates’ concern that gaps in enforcement would delay critical privacy actions when companies are ignoring or outright abusing their data responsibilities to their customers.

CALinnovates Lauds President Trump’s Appointment of Ajit Pai as New FCC Chairman

SAN FRANCISCO, January 23, 2017

“In our hyper-partisan country, we still need to be able to get things done. Ajit Pai understands this. He called it like he saw it during his previous term, and I look forward to him continuing to push the envelope as Chairman. To sum it up: Ajit is a hardworking ass kicker who understands the economic and policy concerns of the broad tech sector with an opportunity to unite the FCC in a bipartisan fashion after four years of sharply partisan rulemakings.” – Mike Montgomery, Executive Director

“Chairman Pai’s creativity and business expertise promise to help find a third way to solving our most pressing communication issues. CALinnovates congratulates Chairman Pai and looks forward to working with he and his team.” – Tim Sparapani, Senior Policy Fellow

Staying In A D.C. Hotel For Inauguration Weekend? Prepare To Be Gouged

By Mike Montgomery

This weekend will be a historically busy one for Washington D.C. Today, Donald Trump was sworn in as the 45th president of the United States in front of the U.S. Capitol, where his fans were out en masse to watch. Saturday, hundreds of thousands will flood the streets of the city to protest his presidency.

No matter which side of the fence they’re on, every D.C. visitor staying in a hotel had one thing in common: They all paid an insane amount for lodging.

We did some research into rooms this coming weekend and found that hotels are jacking up their prices by more than 800%. Book a room at the Fairmont in Georgetown earlier in January and you would have paid $190 per night for a room with a king bed. The weekend of the inauguration? That same room will cost you $1,600 per night (and you’ll have to book for at least three nights.)

Prices won’t be any better in Dupont Circle. A room at the Kimpton Carlyle Hotel, which would typically go for $99 per night, will cost you $899 per night the weekend of the inauguration.

It is a shame that these absurd rates put hotel rooms out of reach for most Americans who might want to either see democracy in action or protest the people who are soon to be running the country.

But it’s not a huge surprise. Hotels make a practice of price gouging whenever they can, only they call it “compression” pricing, a made-up term hotel owners use to gloss over the nasty but time-honored practice of fleecing consumers during high-traffic events. Hotels rely on the old supply versus demand argument to justify their behavior of charging unreasonable rates in the name of big corporations lining their coffers.

And while supply and demand is the guiding force of our economic system, it’s worth taking a deeper look at what the hotels are doing and question whether their extreme prices really make economic sense for the workers and the communities where those hotels operate. The people who work in those hotels (most of whom don’t even earn a living wage because the hotels and their lobbyists fight against even modest minimum wage increases) don’t bring in extra money when the hotel is booked to capacity with people paying $1,000 per night or more for a room. The surrounding community doesn’t get an economic boost outside of transit and occupancy taxes that don’t directly benefit local residents. Our research has found that 60 cents out of every dollar spent by people staying at hotels goes back to the corporate owners no matter how much the rooms cost.

While hotel owners might prefer their customers not think about those high prices in terms of price gouging, they’re happy to talk to their investors about the benefits of jacking up prices whenever possible. According to an article in The Wall Street Journal, Pebblebrook Hotel Trust CEO Jon Bortz was quoted as complaining to investors that home sharing platforms, like Home Away and VRBO, are making things hard for hotels.

The company’s ability to “price at maybe what the customer would describe as sort of gouging rates,” has diminished with the growth of home sharing, he told investors. “We’ve lost a lot of that ability at this point within the major markets where these events take place.”

There’s a lesson in that, though inauguration hotel rates show that the rise of home sharing hasn’t fully removed price gouging from the hotels owners’ quivers quite yet.

But the more home sharing there is in a city, the harder it is for hotels to justify price gouging. According to UBS leisure and lodging analyst Robin Farley, more home share listings has a direct effect on limiting the frequency of compression pricing at area hotels.

A bill in front of the D.C. City Council last year would have imposed new regulations on home sharing in the district but the bill died in committee. Hopefully this year the City Council will take a more informed view on home sharing and consider how, especially during large events like the ones coming at the end of this week, it would make sense for the nation’s capital to allow more visitors in instead of keeping them out due to price gouging.

While we may not know exactly what is in store over the next four years, it’s safe to assume that Washington, D.C. will remain a tourist magnet. The city should open its doors as wide as possible.

Erin Schrode Isn’t Afraid Of Rubber Bullets When She’s Fighting For The Environment

Erin Schrode refers to herself as a young “Eco-Renaissance” woman, and when you look at her list of accomplishments, it’s not hard to see why. When she was still in high school, Schrode co-founded Turning Green, an organization dedicated to helping teenagers advocate for a cleaner environment. She has appeared on ABC and been quoted in The New York Times and was honored by the White House for her dedication to political action.

And late last year, she was shot with a rubber bullet.

Image credit: Erin Schrode via www.erinschrode.com

Schrode was interviewing pipeline protesters at Standing Rock Indian Reservation in North Dakota when she felt a piercing pain in her back. She turned to see an officer who had fired the bullet out of a grenade launcher. The experience only doubled her resolve to continue telling stories of the protesters.

“Any rhetoric of violence from the water protectors was a lie,” Schrode told CALinnovates Chief Evangelist Kish Rajan during an interview for the A Step Ahead podcast. “I saw the power of nonviolent direct action play out again and again there.”

Schrode is someone political watchers should keep an eye on. Last year, at just 25, she ran for Congress in California’s 2nd District. Although she lost to incumbent Jared Huffman, Schrode used her campaign to call attention to important issues involving the environment and education.

Over the next four years, she hopes to fire up her fellow millennials to fight back against the Trump administration through technology and by showing up in person.

“This is the time to organize and advocate and mobilize in a way we never have before,” said Schrode. “Our future depends on it.”

Listen to the rest of the interview here:

Like what you hear? Subscribe to A Step Ahead on iTunes.

In Cancer Fight, Artificial Intelligence Is A Smart Move For Everyone

By Mike Montgomery

Cancer, unfortunately, touches almost everyone. Like far too many, I’ve lost friends to this horrific disease. Luckily, there are a number of exciting technologies on the horizon that might help save lives.

For instance, right now, women depend on monthly home exams and annual mammograms to detect breast cancer. Soon, though, they may have another option. Cyrcadia Health, a cancer therapy startup, has developed a sensor-filled patch that can be inserted comfortably under a bra for daily wear. Connecting through the woman’s smartphone or PC, the patch uses machine-learning algorithms to track the woman’s breast tissue temperatures and analyze this data at the Cyrcadia lab. If it detects a change in pattern, the technology will quickly alert the woman — and her health-care provider — to schedule a follow-up with her doctor.

“This technology is fully automated in the cloud,” says Rob Royea, CEO of Cyrcadia. The patch, whose predicate is FDA cleared, is expected to hit the market next year and had a greater than 80% historical trial success rate in detecting tumors, even in dense breasts (which are typically tough to read in a mammogram).

Cancer therapy startups that use artificial intelligence (AI) algorithms are proliferating. While some parts of the tech industry are coming under fire for creating products and services that only help the wealthy (most people don’t really need things like on-demand liquor delivery), this is one area where technology is being used to help everyone.

Read the full article here.

After The Election, A Reckoning For Silicon Valley

By Kish Rajan

As the dust settles after the recent presidential election, many are asking themselves some hard questions. Will Donald Trump follow through on even his most terrifying campaign promises? What can we do to help the most vulnerable over the next four years? And why were voters so angry that they were willing to take a risk on a tweet-happy businessman with no record of helping anyone but himself?

The tech industry needs to add a question to this list: What role, if any, did we play and what can we do about it now?

Like it or not, technology played a big role in the election. Social media created two competing echo chambers that got louder and louder as we got closer to election day. Fake news stories spread faster than the real thing and both sides told themselves that they were about to win. Only one side was right and that side didn’t include the vast majority of people in tech.

The day after the election was full of online hang wringing and self-flagellation among the technorati. Venture capitalist Dave McClure got a standing ovation at the Web Summit conference when he angrily compared social media to talk radio calling it a “propaganda medium” and demanding tech entrepreneurs take action to make sure this does not happen again.

There’s no question that the people who created and run the biggest social media networks in the world have to do better. If fake news has the same appearance as real news that’s no longer giving people unfettered access to information — it’s making them susceptible to propaganda. When trolls are allowed to attack and harass people on Twitter, that’s no longer facilitating the free flow of opinions — it’s sitting by while vulnerable people are made to feel unsafe.

But the soul searching has to go even deeper than that. Technology has ushered in an era of incredible efficiency but there’s no value in pretending that efficiency doesn’t cost people their jobs.

While many on the coasts are finding their lives greatly improved through smartphones, apps and the platform economy, people at the lower end of the economic scale are seeing the wonders of technology pass them by, just out of their reach.

But here’s the thing — if there are any people in this country who can help make things better, it’s the people who call the tech industry home. I have no doubt that we can innovate our way out of a lot of problems we are now facing.

We need the next wave of technologists to start working on algorithmic accountability. On Facebook, for example, it shouldn’t be enough that a story is popular to get it more widely distributed. There has to be something in the algorithm that evaluates the source of that story.

On Twitter, algorithms should be able to quiet bullies before they become harassers.

Entrepreneurs need to think about how many jobs their company will create instead of simply about market cap or a founder’s net worth. As new companies grow they can open offices in places like Michigan and Iowa and spread job growth beyond hubs like San Francisco, New York and Austin.

Tech leaders need to find their way to the table to work with the new government. Donald Trump has said he will spend $1.5 trillion on infrastructure. That’s great. How can tech help and make that new infrastructure as modern as possible to provide highly-skilled jobs across this whole country? How do we train more people to be able to do these jobs? How can we make sure that the country’s digital infrastructure is being upgraded as well?

Finally, tech can work to promote and protect vulnerable populations by making better hiring decisions. The industry needs to look beyond white male Stanford grads and hire people who better reflect the diversity of America. Such a commitment will show that this community values and celebrates diversity and openness.

Companies can also continue to push for policies and priorities that the next administration might not share. Just because Trump may pull out of the Paris Accords doesn’t mean corporations should reduce their commitment to ending climate change. If Trump does end Obamacare companies should do everything they can to ensure that all of their employees (even contractors) are getting medical coverage. Actions like these can speak louder than words.

This is a difficult time but also an opportunity. As tech takes a hard look at where it’s been, I know we have the opportunity to do everything we can to make sure there’s a brighter future for everyone.

Welcome To The Resistance: Assemblywoman Lorena Gonzalez Prepares To Fight Back Against Trump

Assemblywoman Lorena Gonzalez is not going to take Donald Trump’s presidential victory sitting down. The California state representative has spent her career protecting the rights of the many immigrants who live in her district (the 80th) south of San Diego. She’s not about to let an anti-immigration administration trample on those rights.

“California is a laboratory of the left, and we’ve shown you can move forward with a progressive agenda and it will work,” she told CALinnovates Chief Evangelist Kish Rajan during an interview on the podcast “A Step Ahead.”

Although she views Trump’s plan to build a wall as mostly symbolic, she’s still worried about what his actions will mean for people such as the Dream Act kids, who willingly handed over their parents’ addresses (even though they are here illegally) to secure their own visas. Now the government has that information and may use it to deport people.

“They’re scared the government is going to break up their families,” she said.

Gonzalez also plans to fight for people in the service industry. While she acknowledges that the technical marvels that employ so many people in Silicon Valley are costing jobs in other parts of the state and country, she believes there’s still hope. Automation doesn’t mean an end to human workers — it means people will still need to operate and service machines and provide some human contact in settings such as stores and salons.

“You could have a robot cut your hair, but there is a social aspect to the service economy,” said Gonzalez. “We don’t talk about that a lot.”

To prepare the workforce of the future, Gonzalez believes we also need to rethink education. The idea of everyone going to a four-year college is a lofty one but may not be realistic or necessary, she says. She would like to see more apprentice programs, not just in tech but in industries like child care and health care.

“Going to college and studying sociology might not be the best path for everyone.”

Listen to the full interview below:

Like what you hear? Subscribe to A Step Ahead on iTunes.

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