Tech Leaders Warn of the Dangers of AI

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In one of Elon Musk’s ever-quotable interviews, he mentioned something that has spurred quite a bit of debate online. Should we be afraid of the development of artificial intelligence, also known as AI?

Speaking at the MIT Aeronautics and Astronautics department’s Centennial Symposium, Musk warned that we should tread carefully when it comes to AI.

“Increasingly scientists think there should be some regulatory oversight maybe at the national and international level, just to make sure that we don’t do something very foolish,” Musk stated. “With artificial intelligence we are summoning the demon.”

Yes, Elon Musk compared working in AI to summoning a demon.

But it’s not just Musk. Stephen Hawking and Bill Gates have also issued dire warnings on the topic. But the thing that is interesting about all of these tech leaders is that none of them are actually doing work in AI themselves; they’re merely reacting to the theoretical danger of AI without doing any of the practical work.

While there is a tendency to associate AI with sci-fi movies, in the real world AI is nothing close to the sentient computers shown in blockbuster movies. And while there’s a possibility that we might eventually reach that stage, it’s still quite a long ways off.

Some are so spooked by the idea that they propose federal regulation on this type of technology. But we have to remember that such regulation can often have a chilling effect. Look at the effect that making marijuana a Schedule I drug had on testing its medical capabilities, for example. For a fledgling technology that isn’t anywhere close to being a real danger yet, putting undue restrictions on it could cause the entire industry to be stillborn.

Should we worry? Maybe. But let’s not panic about our space elevators until they’re funded, okay?

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The Smart Money is Investing in Tech

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Where is the smart money going when it comes to tech companies? Some leading experts will be exploring that subject at Fortune’s upcoming Brainstorm TECH conference.

Anton Levy of General Atlantic, Kirsten Green of Forerunner Ventures, and David Trujillo of TPG will share the stage in a panel discussion on what industries, ideas, or trends they’re betting on; what they’re seeing in the tech space; and the changes they’re watching for.

It’s no surprise that technology is on people’s minds, with the June ransomware attacks and Microsoft’s announcement of its new SMB-oriented software-as-a-service bundle. A recent article in Institutional Investor says that tech deals are booming in the PE sector.

Not only that, but 2017 has been a boom year for tech IPOs, with Snap going public in March, and Carvana, Cloudera, Elevate Credit, Mulesoft, Netshoes, Okta, and Yext also making their public trading debut. The aggregate value of these IPOs is a whopping $37.5 billion, with Snap making up the lion’s share at a valuation of approximately $20 billion.

Today’s tech IPOs are already light years ahead of those in 2016. By May of 2016, only two companies had gone public. Between January and May of 2017, more than four times that number went public, and more public offerings may be on the horizon. (Tech companies that have been floated as possible IPOs, despite rigorous denial from some of them, include Airbnb, Dropbox, Pinterest, Spotify, and Uber.)

Because of the growing success and valuation of tech companies, private equity money is now flowing into the sector, accounting for almost 40.1 percent of U.S. buyouts last year. This is the highest proportion on record. Firms with a broad range of investment interest, such as General Atlantic, KKR, and Carlyle, are jumping into the game and are being joined by tech-focused PE firms like Golden Gate Capital and Siris Capital.

“An increasing number of tech-related companies have moved beyond the traditional territory of venture capital funds, and the sector as a whole has increasingly become a target for the wider private equity industry,” Christopher Elvin, Head of Private Equity at Prequin, told Institutional Investor.

China has also become a PE magnet. However, concerns about the possible imposition of U.S. trade tariffs, plus concerns about its credit, real estate, and technology sectors seem to be cooling interest in the nation. However, when risk and potential are calmly weighed, China may be the most promising private equity market in the world.

This echoes sentiments that General Atlantic CEO Bill Ford shared in a recent interview with Bloomberg. “We’ve been bullish on China despite lots of mixed sentiment—the country is succeeding in pivoting its economy from export and manufacturing to services and consumption,” he said. “We’re seeing companies there generating 15 to 20 percent-plus nominal GDP growth.”

With so many potential IPOs on the horizon, and some really promising companies to be found in emerging markets, it’s no wonder that the smart money is betting on tech to be the next private equity profit-maker.

I will be curious to see what Levy, Green, and Trujillo share at Brainstorm TECH about their vision for private equity in the tech sector and if it matches up with what other observers have been saying.

Disney to Cease Self-Publishing Video Games

video games

 

Walt Disney is getting out of the video game industry. At least, they will no longer be self-publishing titles, although they’re going to continue licensing their properties to other developers. The announcement, which came on April 10th, came as a surprise to a lot of people, especially after they were talking about how strong that unit of the company was only four months ago. When you consider that Disney Infinity had quickly risen to the top spot in the “toys-to-life” model of video games. That model involves selling players a game, and then small figures that, when connected through a peripheral, allow them to use the characters represented in the game itself. Activision started the ball rolling with Skylanders back in 2011, and LEGO recently joined in with LEGO Dimensions.

But that business model is slowing down, and it has a lot of cost wrapped up in it. It seems like Disney is backing out just as the format is losing its steam, out of a fear that the initial hurdles will end up being too much after all. It’s certainly the safer path than waiting for the title to start failing and losing money.

It’s not the first time Disney has proclaimed their strength and then backed out of self-publishing video games. In 2011 they stopped making console games to focus on mobile games, despite their very successful release of Epic Mickey. But console gaming is a tough business, and big publishers like Activision or Electronic Arts have been at this for years, figuring out how to do things in many cases over multiple generations of consoles. It’s probably a safer bet for Disney to just let other publishers handle their properties while they focus on continuing to develop (or purchase) desirable properties in the first place.

New Battery is Cheaper, More Powerful

battery

Rechargeable batteries play an important role in supporting the existing power grids of much of the United States, and they have numerous other roles as well, from powering iPhones to cars. Normally, they come in two forms: lithium-ion batteries like you find in smart phones, and lead-acid batteries in cars.

Pretty much since the development of lithium-ion batteries, scientists have been looking for ways to make them cheaper, and they’ve been trying to make zinc-manganese batteries but keep finding that those batteries lose their potency after only a few cycles of use. According to new research by the Pacific Northwest National Laboratory (PNNL) though, there’s a way around that.

PNNL researchers figured out why zinc-manganese batteries lose their potency, and then figured out how to stop that. The result is a powerful battery that is as cheap to produce as a lead-acid car battery, but far more powerful. Why is this a big deal?

We use lead-acid batteries because they’re cheaper to produce than lithium-ion batteries, but not quite as potent. That’s why these batteries have to be so much larger than the one in your laptop. The expense of lithium-ion batteries is part of why devices like iPhones are so expensive (but only part).

Successfully putting zinc-manganese batteries to use could be huge. The materials used are really common, which cuts costs right there, but they’re also more efficient than lead-acid batteries, which means longer lasting car batteries and power grid backups.

The team is still working on their new batteries, but they’re pretty excited and very confident about the usability of this new technology. These batteries should have a broad appeal, to companies looking to save money on production, to consumers looking to get more power for their money, and to municipalities looking to upgrade their power systems.

Verizon Faces Huge Strike

Verizon, which is the nation’s leading wireless provider, is facing a massive strike, one of the largest in recent years. 40,000 workers walked off on April 13th, although none of those workers are part of the company’s wireless operation, and while the East Coast will see some disruption of service to Verizon’s Fios TV, Internet, and landline operations, the rest of the country should be fine.

The workers are members of the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers, which primarily represent customer service and network technicians at Verizon. The strike follows a standstill in contract negotiations, following the end of the previous contract back in August of 2015. Previously, contract negotiations in 2011 had led to a strike, which ended in two weeks.

Verizon has claimed that they have 10,000 trained, non-union workers who should be able to keep service outages to a minimum, but the CWA claims that those workers can’t possibly take up the slack, which will likely push Verizon towards a speedy resolution. The negotiations are bogged down in a number of issues, namely demands for workers to temporarily relocate, and cuts to healthcare and pensions, and outsourcing call-enter jobs.

The company has been accused of shipping jobs overseas and of instituting lay-offs by presidential candidate Bernie Sanders, though Verizon holds that these aren’t even on the table. They do face some pretty solid criticism from their workers though, such as Anita Long, who has worked at Verizon for 37 years and claims that the company makes around a billion dollars a month, which makes their “inability” to pay decent wages or preserve healthcare seem absurd.

The Federal Mediation and Conciliation Service (FMCS), which helped mediate in the 2011 negotiations, has offered to help, but the CWA denies having contacted them. They don’t want to go to Washington and involve the federal government, they simply want Verizon to address their concerns.

The iPhone SE is about Affordability, not Flash

 

Apple Inc. announced a new iPhone model on March 21st, called the iPhone SE. It cots $399 without a contract, and is much cheaper than the top of the line iPhone 6s Plus, which comes in at $649. It is also smaller, with a 4 inch screen, where the next smallest iPhone has a 6.7 inch screen.

The SE has a tall order before it. Apple has seen phone sales slipping for the first time in 9 years, through which they have more or less run the smartphone market. They made their phones larger starting with the iPhone 5, in response to the size of the Samsung Galaxy phones, but that also made them more expensive. The SE is intended to appeal to people who want a smaller phone, and those who want a smaller price point at which to get into Apple products.

That smaller price point is the other half of the SE’s purpose, which is to compete with cheaper phones running Android. The SE is expected to work in the “middle” of the smartphone market, where people want quality phones that they can actually afford. The iPhone 6 is priced outside that in the “top” of the market, and it’s a safe bet that the iPhone 7, due out later this year, will be as well.

The SE didn’t rally impress anyone though. Apple is a company known for innovation, although their products actually tend to be more of a slight improvement on their previous model. And that’s fine, when you’re actually using those products, but it’s not very exciting to announce. The SE announcement was actually pretty low key as well, held on-campus instead of a larger venue in San Francisco like they normally do.

All of that belies a sort of sheepish release, like this phone is something they need to do, not something they want to do.

New Battery Tech Could Prevent Electronics Fires

battery technology

You may have heard about so-called “hoverboards” catching fire in recent months. They aren’t the only items prone to this problem, but they are the most newsworthy of late. Like many computers, phones, and other rechargeable technology, they rely on lithium-ion batteries. Lithium-ion batteries have been great for technology, making everyday items like iPhones rechargeable and therefore much more efficient. Unfortunately, in some rare cases, those batteries can overheat, the electrolyte within them can catch fire and sometimes trigger an explosion.

There have been a few attempts to make lithium-ion batteries safer, and by and large they don’t overheat and explode, but a team at Stanford University has developed a new system to keep those batteries from catching fire. They can’t keep them from overheating, that’s largely a matter of using them properly, but they can make them safe and keep them functional and efficient.

A quick science lesson: lithium-ion batteries work by sticking two electrodes in a electrolyte gel and sending charged particles between them. Over about 150 C (300 F), that gel can catch fire. This new system prevents that by shutting the battery down briefly when it reaches a certain temperature. Once the battery has cooled off enough, it kicks back on.

That’s because the electrodes in this system contain spiky particles of nickel, which conduct electricity if they’re touching. They are subsequently suspended in elastic polyethylene which expands when it gets too warm. Upon expanding, it pulls the spikes apart, and the battery shuts down, when it cools, they comes back together and conduct electricity once more.

The temperature threshold can be set, allowing thee battery to shut down at lower, even safer temperatures. This could prove to be a pretty valuable technology, significantly reducing battery fires and keeping them efficient enough to keep up with consumer demands. Don’t be surprised to hear more about these batteries in thee future.

Are Technology Unicorns More Myth Than Financial Fact?

tech company

Did you know that a cowboy created the first unicorn? Aileen Lee, founder and partner of Cowboy Ventures, coined the term in an article she wrote for TechCrunch called, “Welcome to the Unicorn Club: Learning from Billion Dollar Startups.” In the venture capital industry a unicorn is any technology startup that achieves a $1 billion market value.

Dropbox, a cloud storage services that reached a $10 billion valuation nearly two years ago, is a famous unicorn and also an object lesson in the vicissitudes of valuation. Some analysts are beginning to question the validity of early big estimates. There have been predictions from some in the technology community that Dropbox is destined to disappoint and that their failure will usher in another dotcom bubble burst.

Valuations are built through rounds of private fundraising. Private investors often compete with one another to corner that market on a nascent startup that shows particular promise based on leadership, innovative technology, or a reboot of an essential service such as Uber or Airbnb.

Bill E Ford, Chief Executive Office of General Atlantic, leads a firm that was an early investor in Uber and Facebook. He’s advising a cautious response to the expectations for profit promised by unicorns.

In a recent interview in Bloomberg Business Ford had some thoughts to share based on the poor performance of Jack Dorsey’s second child, the mobile payment company Square. It was valued at $4.2 billion in its IPO—it had been suggested before the IPO that it had a value of $6 billion. Ford was critical of inflated expectations:

“There was so much enthusiasm pushing up private market values that I believe most of these growth companies will not live up to the promise of those high valuations,” Ford said of the industry in general. “But a number of them will.”

In a story from Silicon Valley Business Journal Ford expanded on his thoughts regarding overblown estimations while clarifying that some unicorns were actually quite stable:

“There is no question in my mind that the valuation environment has shifted,” Ford told Bloomberg. “A lot of the investors that were pushing up valuations were the folks that were really trying to just get ahead of the public markets. With the change in attitude towards valuations, they have really withdrawn from that.”

Despite the perception of risk suggested by overvaluation, technology startup companies will continue to receive investor funding. They represent the promise once posed by Apple, Google, Facebook, and Amazon. For many investors it’s too risky not to invest.

Tech Business Advice from Proven Experts

tech company

The tech industry at present looks suspiciously similar to the dot-com bubble, but this time around we’re calling those companies unicorns! The fact that these types of companies, named unicorns because of their rarity, are springing up so quickly is causing a lot of the worry. But that doesn’t mean that you should avoid starting your own tech start-up!

At Morgan Stanley’s recent NextGen conference, three tech business leaders with a great deal of experience—Keith Krach (previously of Ariba, DocuSign), Jyoti Bansal (AppDynamics), and Stewart Butterfield (Slack)—shared some of their insights and advice for new tech startup owners. They had some interesting things to say!

  • Butterfield noted that employees need to know that your start-up won’t last forever. While many of us either lived through the dot-com bubble or experienced its aftermath first-hand, there are also many who expect that unicorn companies will continuously expand. This is a dangerous mindset for your employees. According to Butterfield, young engineers at hot tech companies today expect 20% to 30% annual pay increases, something that simply isn’t sustainable. Therefore, it is important that you share with your team that the good times won’t last forever.
  • Krach advises against outsourcing executive hires, even as your company grows. Recovering from a bad hire can take a lot of time to recover from, and the consequences are exacerbated when the bad hire is someone at the executive level. To make such an important decision, Krach says that he makes between 15 and 20 reference checks each time he is making a management team hire!
  • Bansal made it clear, and everyone else agreed, that you shouldn’t expect work-life balance in times of hyper-growth. “In a high-growth situation, there’s no way you can do it,” says Bansal. However, he’s not constantly working, either. Instead of lengthy vacations, Bansal said that he tends to take more 3-day breaks. In this way, he gets to step away for a little while, but not long enough that things can get out of control.

Are you hungry for more tech start-up advice? Read this article from Forbes for some further reading!

Why Are Real Estate Companies Flocking to DocuSign?

 

If you’re a mover and a shaker in the real estate world, you’re likely aware of DocuSign, the world’s leader in Digital Transaction Management and “unicorn” company. It is certainly true that real estate agencies and firms have begun flocking to DocuSign for their document handling needs, but why is this the case?

DocuSign, led by CEO Keith Krach, has found such high levels of success in part because of their strong leadership, but also because of the extreme convenience, ingenuity, and usefulness of their product—eSignature technology.

The marriage of their line of work and the functionality of DocuSign’s eSignature technology is a match made in heaven. So what’s the relationship between the eSignature technology and real estate agents? First, think about what a real estate agent’s needs might be: the ability to keep track of several documents at a time, to keep to documents very secure, and to be able to have a confidential document be signed and notarized. DocuSign’s eSignature technology provides all of these benefits and more, making it the perfect type of technology for a real estate agent.

So just how successful has DocuSign been? They continue to sign more and more deals with different organizations every day, most recently partnering with SpringCM. Additionally, DocuSign was recently named one of the top 5 hottest late-stage startups from 2014 by Tech.Co.

Riding on a wave of increased growth, DocuSign has also recently announced changes to their Digital Transaction Management and eSignature software, designed to accelerate agent performance. The latest release of Real Estate Plus will include revisions and additional:

  • Tasks lists and templates
  • Tasks overview
  • Dynamic due dates and reminders
  • Dynamic assignment of responsibilities
  • Workflow flexibility
  • Task notification

With these helpful additions to an already popular piece of software for real estate agents, it appears that DocuSign will be proudly serving the real estate industry for many years to come.

Are you a real estate agent who is unfamiliar with DocuSign? Check out this video to learn how your peers are using it!

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