Verizon Communications, Inc. reported a strong Q3 2019 driven by solid gains in wireless customers.
The telecommunications provider reported the “most third-quarter phone gross additions in five years.” In particular, Verizon saw significant growth in postpaid phone subscribers, the most lucrative and sought-after type of customers that wireless companies work to attract.
Verizon also saw an increase of 2.1 percent in customer wireless revenue thanks to customers upgrading to higher-tier plans. This was no doubt encouraged by the company announcing new unlimited data plans in August, with each tier being $5 cheaper than on the previous plans.
“Verizon continued its momentum in the third quarter by driving strong wireless volumes in both our Consumer and Business segments, while delivering solid financial results, highlighted by continued wireless service revenue growth, increased cash flow, and EPS growth,” said Chairman and CEO Hans Vestberg. “We are focused on our 5G rollout strategy, looking to deploy next-generation networks while enhancing our industry-leading 4G LTE network. Going into the fourth quarter, we are energized by the strong performance of the business and we are confident in our strategy to drive value for our customers and growth for our shareholders.”
According to the report, “for third-quarter 2019, Verizon reported EPS of $1.25, compared with $1.19 in third-quarter 2018. The company’s reported earnings include a minimal net impact from special items: a net pre-tax gain of $261 million from dispositions of assets and businesses that was offset by a pension re-measurement pre-tax charge of $291 million. On an adjusted basis (non-GAAP), third-quarter 2019 EPS, excluding special items, was $1.25, compared with adjusted EPS of $1.22 in third-quarter 2018.
“In third-quarter 2019, Verizon’s results included the effects of a reduction in benefits from the adoption of a revenue recognition standard, primarily due to the deferral of commission expense, and the adoption of a lease accounting standard. The combined net impact was a 4 cent headwind in third-quarter 2019, and 13 cents year-to-date, which is included in the year-over-year increase in adjusted EPS.”
“The carriers today are building the consumer 5G networks, and they don’t require a massive backbone upgrade when you just increase bandwidth to lots of mobile phones.”
Cisco CEO Chuck Robbins stopped by Fox Business’ Mornings with Maria to discuss 5G, intellectual property and reports of China bullying companies.
“When they begin to build out enterprise 5G services, then that will require them to build a dedicated, next generation, high-performance backbone because of all the traffic that will be generated and…that will be over the next two to three years. So right now, they are focused on the radios needed for the consumer side.
“If you think about the speeds that are going to be supported at the edge, and the number of those connections, it’s only logical that you’re going to have to update…your infrastructure to accommodate all the bandwidth that’s going to be…given out around the world. So we would expect to ultimately be a beneficiary of that when it happens.”
Mr. Robbins goes on to discuss the challenges the world is facing economically, emphasizing his belief that the economic slowdown is a global one, not isolated to the U.S.
While highlighting that intellectual property theft is by no means unique to the Chinese market, Mr. Robbins was adamant that respect for intellectual property needs to be a fundamental aspect of doing business.
“The lack of theft should be a core principle in every country around the world….I think that’s a broad issue that should just be a basic premise of doing business around the world, is that your intellectual property should be respected.”
He also discussed recent reports of companies being bullied by the Chinese government. While he said Cisco has never been able to reach the level of business they would like to within the country, they had never felt bullied by China.
Germany has completed its ‘security catalog,’ a set of rules telecommunications companies must comply with as they deploy 5G networks. Reuters is reporting that, despite pressure from the U.S., German officials have not excluded Huawei from participation.
The U.S. and Huawei have been at odds over allegations the equipment vendor has backdoors in its 5G equipment—backdoors that enable China to spy on other countries. Huawei has vehemently denied the allegations, but that hasn’t stopped the U.S. from taking action to implement bans, export controls and tech sharing restrictions. This has impacted all aspects of the company’s business, even resulting in it losing full access to Google’s Android. The U.S. has also put pressure on European allies to limit Huawei’s ability to do business in the EU.
In what some are seeing as a snub of U.S. interests, Germany declined to single out any vendor, including Huawei. This is likely due to warnings from German operators who have said banning Huawei could cost billions and add years to a successful 5G rollout.
“We are not taking a pre-emptive decision to ban any actor, or any company,” German government spokesman Steffen Seibert told a news conference in Berlin on Monday.
According to Fast Company, Apple may have its own 5G modems ready for production as early as 2022, ending its reliance on Qualcomm.
Apple has been trying to end its dependence on Qualcomm for some time now. Initially, the company switched to using Intel, while at the same time fighting a legal battle with Qualcomm over what it perceived to be unfair pricing. Ultimately, the two companies settled in April, followed by Apple promptly buying Intel’s 5G modem business.
Apple is likely looking to leverage its purchase to create its own modems where it would have full control. As Fast Company reports, Apple initially worked with Intel in the hopes of producing a “system on a chip,” where a modem would be integrated into a single chip along with the other processors Apple uses in iPhones and iPads. Doing so would provide significant power and energy benefits. Ultimately, that partnership ended because of Intel’s inability to deliver.
Now that Apple owns Intel’s modem business, the company will be free to continue its aspirations, without relying on other partners. Traditionally, Apple has always preferred developing its own chips. Prior to the switch to Intel, Apple partnered with IBM and Motorola to develop the PowerPC line of chips. More recently, the company has licensed ARM processors to create its A-series chips used in iPhones and iPads.
Despite Apple’s expertise in chip design, sources told Fast Company that 2022 is an optimistic launch window. Once the chips are fabricated, they must still be rigorously tested to ensure they work with carriers’ networks. One factor in Apple’s favor is the individual likely leading their modem efforts. According to FactCompany’s source, Esin Terzioglu, Qualcomm’s former VP of Engineering, is probably in charge of the 5G team.
Whether Mr. Terzioglu’s experience is enough to help Apple meet its goal remains to be seen.
Health IT Security is reporting on two separate security reports, one from Kaspersky and the other the Ponemon Institute-Keeper report, showing 66 percent of small to medium-sized businesses suffered cyberattacks last year.
The reports also showed that the cost of cyberattacks is on the rise, with a malware incident costing some $2.7 million on average. In spite of that, just 12 percent of organizations were concerned with a malware attack.
Similarly, SMBs bear the brunt of phishing and web-based cyberattacks. Some 72 percent of those polled had experienced at least one cyberattack, with 53 percent reporting a phishing or social engineering attack, 50 percent a web-based attack and 39 percent reporting a general malware attack. To make matters worse, 60 percent said the attacks they experienced were sophisticated in nature, indicating that SMBs are increasingly being targeted.
Despite the sobering picture, the Keeper report showed that response times have not improved. Just 26 percent of SMBs have decreased their response time, while 39 percent reported response times had increased.
“SMBs are also at risk because most of them (70 percent of respondents) do not have a comprehensive inventory of all third parties with whom they share sensitive and confidential information,” researchers wrote. “Without this information, they are unable to conduct assessments to ensure their third parties are taking steps to safeguard their sensitive and confidential information.”
Those who have been around tech for more than a decade remember the “good old days” when Microsoft was ruthlessly protective of its intellectual property, its platforms, its ecosystem. In fact, it was so protective that it was eventually sued by the U.S. Government for monopolistic behavior.
Fast-forward to 2019 and how things have changed. At the Microsoft Surface event in New York City, the company announced the Surface Duo, a dual-screen phone with Android and the Google Play Store installed—that’s right, Android, not Windows.
Surface Duo
The device’s two screens are joined by a 360-degree hinge, allowing it to be closed with the screens protected, closed with a screen on the front and back, laid flat on a table, held like a book and virtually every other angle in-between. Apps can be run on the two screens simultaneously, with data shared between the two via drag-and-drop.
In the demo video, the phone is remarkably thin, especially compared to other folding phones, although some might be put off by the amount of space used by the bevels. The width of the phone is larger than many popular phones on the market, and puts the device squarely in “phablet” territory. This could be a positive or a negative, depending on if a person prioritizes screen real estate or easy, pants-pocket portability.
The announced release date is “Holiday 2020,” a long wait for customers excited to take it for a spin. Nonetheless, the phone could prove to be a hit, marrying the benefits of Microsoft and Google like no device yet has.
Earlier this week, studios and video shops in Hollywood and around the country went into collective panic mode when their Mac Pro workstations refused to reboot.
News started hitting Twitter September 24 as Mac Pros started slowly crashing and refusing to boot up again. Almost immediately, keen-eyed users started noticing that affected systems were running older versions of macOS, as well as Avid’s Media Composer. In addition to a statement by the company, Avid’s CEO Jeff Rosica and its CTO Tim Claman released a video promising their engineers were working “around the clock” to address the problem.
Despite fears the issues might be caused by a virus, by Wednesday, September 25 Google Chrome had been identified as the culprit. On Google’s Chrome Help site, a support manager made the statement:
“We recently discovered that a Chrome update may have shipped with a bug that damages the file system on macOS machines with System Integrity Protection (SIP) disabled, including machines that do not support SIP. We’ve paused the release while we finalize a new update that addresses the problem.”
This comes on the heels of a recent, high-profile article in the Washington Post labeling Chrome as spyware and encouraging individuals to switch to Firefox. Meanwhile, both Firefox and Apple have increased their privacy efforts in a clear shot across Google’s bow.
While users may be willing to trade privacy for convenience, Google may have a harder time getting people to stay with Chrome if it gets a reputation for corrupting expensive workstations.
Microsoft has released an emergency fix for Windows 10, following the discovery of a serious flaw in Internet Explorer. The flaw is a remote code vulnerability—one of the most dangerous types of security flaws, as it opens the way for a hacker to remotely take control of an affected system.
At the root of the flaw is how Internet Explorer’s scripting engine handles objects in memory, leading to memory corruption that could allow a hacker to run arbitrary code in place of the user. This would allow the attacker to gain the same rights and authority as the current user, effectively letting them take control of the system.
The vulnerability is serious enough that even the Cybersecurity and Infrastructure Security Agency issued their own advisory, with the agency and Microsoft both urging users to update immediately.
Windows users should be able to update via Windows Update. Microsoft also released a security advisory that includes links to a manual update.
“To determine rankings on their platform, YouTube uses a metric called the View Velocity,” says HubSpot SEO expert Braden Becker. “The View Velocity metric measures the number of subscribers who watch your video right after it’s been published. The higher your videos view velocity the higher your videos will rank. YouTube also accounts for the number of active subscribers you have when they rank your videos.”
Braden Becker, Senior SEO Strategist at HubSpot, reveals the secrets of YouTube’s Ranking Algorithm in his latest video:
The Secrets of YouTube’s Ranking Algorithm
Since marketers are at the mercy of algorithms on nearly every publishing channel, knowing how each of these unique algorithms work is crucial to attracting and maintaining an audience. Luckily, while some channels are rather reserved about the secrets of their algorithms, YouTube has been remarkably transparent. To figure out which videos and channels that users are most likely to enjoy watching, YouTube follows their audience. This means they pay attention to which videos each user watches, what they don’t watch, how much time they spend watching each video, their likes, their dislikes, and “they’re not interested in” feedback.
What YouTube Pays The Most Attention To
Ranking High In YouTube Search Results
YouTube’s algorithm also uses different signals and metrics to rank and recommend videos on each section of their platform. With this in mind, let’s go over how the algorithm decides to serve content to its users on their search results, homepage, suggested videos, trending, and subscription sections. First, are the search results. The two biggest factors that affect your video search rankings are its keywords and relevance. When ranking videos in search, YouTube will consider how well your titles, descriptions, and content, match each user’s queries. They’ll also consider how many videos users have watched from your channel and the last time they watched other videos surrounding the same topic as your video.
Positive Engagement With Your Videos Is Key
Next is the home page and suggested videos. No two users will have the same experience on YouTube. They want to serve the most relevant personalized recommendations to each of their viewers. To do this they first analyze user’s activity history and find hundreds of videos that could be relevant to them. Then they rank these videos by how well each video has engaged and satisfied similar users, how often each viewer watches videos from a particular channel or topic, and how many times YouTube has already shown each video to its users.
Ranking On The Trending Page
Next is trending. The trending page is a feast of new and popular videos in a user’s specific country. YouTube wants to balance popularity with novelty when they rank videos in this section, so they heavily consider view count and rate of view growth for each video they rank.
High “View Velocity” = High Ranking
Last is subscriptions. YouTube has a subscriptions page where users can view all the recently uploaded videos from the channels they subscribe to. But this page isn’t the only benefit that channels get when they acquire a ton of subscribers. To determine rankings on their platform, YouTube uses a metric called the View Velocity, which measures the number of subscribers who watch your video right after it’s been published. The higher your videos view velocity the higher your videos will rank. YouTube also accounts for the number of active subscribers you have when they rank your videos.
The Secrets of YouTube’s Ranking Algorithm with HubSpot SEO expert Braden Becker
“We allow small sellers to be able to compete head-to-head with the big guys,” says Etsy CEO Josh Silverman. “We do that by giving them a super simple and easy way to build a business online and market themselves while we do all the business work for them. They can just focus on making great products and serving their customers. We really are (trying to equalize and level the playing field for small sellers). Most importantly, we bring them customers and we bring them buyers. We’re not just a way to put a shop on the web. We’re a way to actually have people come and buy. That’s really powerful.”
Josh Silverman, CEO of Etsy, discusses how they are focused on driving customers and buyers to their base of 2.3 million sellers on the Etsy platform, in an interview with Jim Cramer of CNBC:
We Enable Small Sellers To Compete With the Big Guys
Free shipping is now an expectation in the market. Too often buyers on Etsy have said that they think shipping prices are too high. What we announced in the second quarter is that we’re going to make free shipping the standard that people expect when they come to Etsy. So we announced a number of initiatives to make that easy for sellers to adopt. Obviously, to help sellers, the most important thing is that we can do is drive traffic to Etsy. But our sellers are hungry to invest in their own success. So we also announced just the other day the launch of Etsy Ads, which is a new platform that allows our sellers to invest to grow and buy traffic off of Etsy and bring it on to their Etsy shop.
We allow small sellers to be able to compete head-to-head with the big guys. We do that by giving them a super simple and easy way to build a business online and market themselves while we do all the business work for them. They can just focus on making great products and serving their customers. We really are (trying to equalize and level the playing field for small sellers). We give them that kind of data. We also make it really easy for them to understand by giving them tools that make it super easy for them to understand. Most importantly, we bring them customers and we bring them buyers. We’re not just a way to put a shop on the web. We’re a way to actually have people come and buy. That’s really powerful.
To get a two-sided marketplace where you’ve got 43 million buyers and 2.3 million sellers at scale, that’s incredibly hard to do and incredibly hard to replicate. Once you’ve got it it’s durable. Just look at our growth rate. We’re incredibly excited about our opportunity here.
We Enable Small Sellers To Compete With the Big Guys, Says Etsy CEO Josh Silverman
“Alibaba.com is the largest B2B marketplace on the planet,” says John Caplan, the North America B2B President at Alibaba Group. “Today is a great day for US small businesses. Manufacturers and wholesalers can join Alibaba.com today to sell to the world. The platform is now open to enable those businesses to reach the 190 countries at four corners of the globe where we have ten million business buyers on the platform. That business is $23.9 trillion and in fact, it’s six times larger than the B2C market.”
Today is a great day for US small businesses. Manufacturers and wholesalers can join Alibaba.com today to sell to the world. The platform is now open to enable those businesses to reach the 190 countries at four corners of the globe where we have ten million business buyers on the platform. That business is $23.9 trillion and in fact, it’s six times larger than the B2C market. Alibaba.com is the largest B2B marketplace on the planet. What we built are simple to use tools for small businesses to have a global storefront, to market to customers, and then to reach deep into the globe so that they can sell their goods.
Today’s the big announcement. But in fact, one-third of the demand, the buyers on Alibaba.com, are here in the United States. So those folks we’ve been doing business with for 20 years since Jack founded the company. Now what we’re saying to them is you’ve been sourcing on the platform and now you can, in fact, sell to the world on the platform. We are entirely focused on the B2B market. It is $23.9 trillion. Alibaba.com is purpose-built to help small businesses sell to the world. We’re very focused on helping digitize small businesses around the globe.
70 Percent of US Small Businesses Do Not Sell Online
One interesting statistic, 70 percent of US small businesses do not sell online today. This market is not yet digitized. What we’ve created are simple to use tools to help small businesses get online. It’s an interesting space because. In fact, the value chain for small businesses, the value chain for B2B is so complex that no one has digitized it end-to-end other than Alibaba.com.
We’ve actually created a platform that enables a small business to message, talk to, negotiate with, pay, and handle the logistics for orders end-to-end. I think we’re in a class by ourselves. Our business has seen a triple-digit growth and this plan has been in the works for many years. I joined Alibaba.com in 2017. The transformation of our business from a yellow page business to an end-to-end procurement platform is now adding the globalized supply to the platform.
Alibaba.com Opens World’s Largest B2B Marketplace To US Businesses – John Caplan
“I wasn’t temperamentally suited to be CEO or really any kind of manager,” says Craiglist founder Craig Newmark. “So I was thinking maybe it is time to step down. I had also read about something called founder syndrome where somebody who’s good at starting something is really terrible at keeping it going. The biggest lesson is that founders syndrome is a real thing. The faster you think about that and then step down the better off you are.”
Craig Newmark, founder of Craigslist, discusses the reality of founders syndrome where an entrepreneur might be really good at starting something but horrible at managing the business going forward in an Inc. featured video:
As a Manager I Suck
I can applaud myself thinking that it only took me a few months to overcome founder syndrome as opposed to running the company into the ground. The history of the first five years of Craigslist was just me running the thing, one year running it with volunteers, then after making it a company, one year with me as CEO. But towards the end of that year, people were kind enough to help me understand that as a manager I suck. I needed to find people who might be much better at it than I was. They were suggesting that maybe I didn’t have the right skill mix to be CEO. These are people who really cared about the site who believed and they were right.
Founders Syndrome Is a Real Thing
I wasn’t temperamentally suited to be CEO or really any kind of manager. So I was thinking maybe it is time to step down. I had also read about something called founder syndrome where somebody who’s good at starting something is really terrible at keeping it going. My decision to step down, well I winced a little bit because it was my creation and I didn’t want to feel stupid if I had made a big mistake. But it’s worked out and I don’t have regrets about stepping down. The biggest lesson is that founders syndrome is a real thing. The faster you think about that and then step down the better off you are. That worked out.
Founders Syndrome Is a Real Thing, Says Craigslist Founder Craig Newmark
“The most important thing that we look at is the underlying health of the marketplace,” says eBay CEO Devin Wenig. “For me, that really comes down to three things. It’s how many people are shopping with us? How many people are selling with us? And how much inventory is in the marketplace? What’s on the shelves if you will. All three of those have never been higher. We’ve seen active buyers consistently grow, we added two million last quarter.”
Devin Wenig, CEO of eBay, discusses their strong Q2 earnings announcement and growth going forward. Wenig also took the opportunity to slam the internet sales tax movement, saying the “internet sales tax is a regressive tax on small business,” in an interview on CNBC:
We’ve Seen Active Buyers Consistently Grow
The most important thing that we look at is the underlying health of the marketplace. For me, that really comes down to three things. It’s how many people are shopping with us? How many people are selling with us? And how much inventory is in the marketplace? What’s on the shelves if you will. All three of those have never been higher. We’ve seen active buyers consistently grow, we added two million last quarter. We continue to see growth in business sellers and inventory. If you look in our history every time those numbers grow GMV (gross merchandise value) grows.
What we’re facing right now is a couple of things and GMV can move up or down in the 90 day period. We are in the middle of a rollout of internet sales tax, which we know is making an impact, particularly on our US business. We’re also seeing the withdrawal of some of the marketing spend that we did last year, which was part of the plan. We said we would do that this year and we have a line of sight to it, and it’s explainable. So we’re not that concerned about GMV being soft in the short run. What we see is a healthy marketplace and we know when those metrics grow GMV follows, as it has in every year in our past 24 years.
We’ve raised guidance now twice in the last two quarters. We don’t give GMV guidance. We give revenue guidance and earnings guidance. We started the year saying this year was about growing the underlying marketplace metrics and let’s get the two real growth priorities, advertising, and payments, going. And half of the way in I’d say I’m pleased but not satisfied. I’d say we’ve made a lot of progress against those priorities, although we still have a long way to go. But it’s given us the confidence to raise our forecast in Q1 and we raised it again yesterday. So that’s a good start, a good first half.
Internet Sales Tax Is a Regressive Tax On Small Business
At the beginning of the year, there were no states that had enacted a marketplace collection of sales tax. Now we have nine and there are 30 that have declared and 30 will be in place by the end of this year. Obviously, when a state declares an internet sales tax we must collect on behalf of the sellers. So we have a forward view as to how many states will enact that tax and where it will be in place by the end of the year. It will be 30 and it will cover the majority of our sales in the US and the fourth quarter of this year will be the peak.
The impact of internet sales tax will make a bigger impact before it wanes. It’ll wane as we lap out of it next year. I’ll just take the opportunity to say I think it’s a bad policy. We’ve been advocating on behalf of small businesses for years that an internet sales tax is a regressive tax on small business and that is exactly what we’re seeing.
We’ve Seen Active Buyers Consistently Grow, Says eBay CEO Devin Wenig
“Virtual restaurants is a very interesting initiative,” says Uber Eats EMEA head Rodrigo Arevalo. “Basically by leveraging the data on our platform, we can partner with other restaurants in order to cuisine types that only exist on food delivery platforms. If there is not a restaurant in a certain neighborhood we will partner with restaurants to make that happen. In the UK we are already doing 200 virtual restaurants and we are expanding throughout Europe, the Middle East, and Africa.”
Rodrigo Arevalo, head of EMEA at Uber Eats, discusses how virtual restaurants are helping power Uber Eats Growth in an interview on Bloomberg:
Virtual Restaurants Helping Power Uber Eats Growth
Virtual restaurants is a very interesting initiative. Basically, by leveraging the data on our platform we can partner with other restaurants in order to cuisine types that only exist on food delivery platforms. That has two benefits. The first one is that it helps restaurants utilize their kitchens a lot more. The second one is that it increases their revenue on their top line. It’s a very interesting initiative to provide more choice and to increase business for restaurants.
If there is not a restaurant in a certain neighborhood we will partner with restaurants to make that happen. In the UK we are already doing 200 virtual restaurants and we are expanding throughout Europe, the Middle East, and Africa. It’s a type of local exercise that we are trying to tack on. It’s going really well and we’re excited about that.
Uber East Demonstrates the Potential of Uber’s Logistics Platform
Uber Eats fits into Uber’s overall strategy and portfolio in the way that it demonstrates the potential of Uber’s logistics platform. Just in three and a half years, we’ve been able to build a multi-billion dollar business and today we are already the biggest food delivery app outside of China. It’s all about the logistics network that we have built and how we can leverage the potential of that platform.
It’s about focus for us. We want to make sure that we deliver on the plan, deliver on the vision that (Uber CEO) Dara Khosrowshahi has set for the company. Focus is basically three pillars for Uber Eats. The first one is restaurant selection, providing consumers choice. The second one is customer experience for eaters, for restaurants, and for delivery partners. The third one is underpinning that with great technology and a great product that people would love to use every single day.
Uber Eats Partners With 220,000 Restaurants Globally
We partner today with 220,000 restaurants globally and there is a vast variety of selection from every kind of meal that you would like; comfort food to the healthiest options such as vegan, salads, etc. We believe selection. We believe in consumer choice. We want to make sure that we provide all of those options to them. We very much focus on providing that information, providing those options, and making sure that consumers make an informed choice.
When it comes to packaging we already partner with several companies that provide sustainable packaging. Given our platform, particularly in the UK, we already look for ways to facilitate sustainable packaging for restaurant partners, making sure we do our part in that sense.
Virtual Restaurants Helping Power Uber Eats Growth – Uber Eats EMEA head Rodrigo Arevalo
“Fiverr is the everything store for digital services,” says Fiverr CEO Micha Kaufman. “The way people usually find freelancers is they post on Facebook asking if someone knows a good graphics designer. What we’re doing is we’re making it a one-click experience. There’s no bidding, betting, negotiating. There’s browse, search, buy. It’s an Amazon experience to buy a digital service.”
Micha Kaufman, CEO of Fiverr, discusses today’s IPO and how Fiverr has become the Amazon for digital services in an interview on CNBC:
Fiverr Is The Everything Store For Digital Services
Fiverr connects freelancers with businesses of all sizes. Really, the uniqueness of the platform is that the experience of buying a digital service on Fiverr is very similar to shopping on Amazon. You browse, you search, you find something, you click order, and it’s done. Graphic design is one of our most popular services on the platform. Also popular are content marketing, videography, animation, music services, and marketing and advertising. Anything you can imagine.
It’s the everything store for digital services. The system helps you productize your offering. You can define what you’re offering, how much time it’s going to take you to deliver, and the asking price. All the buyers have to do is screen through the offerings, find something they like, click order and pay, and they are done.
It’s An Amazon Experience To Buy a Digital Product
In the categories in which we operate there is a volume of activity of $100 billion in the US alone. It’s still only a single digit percentage online. It’s a very old-school business. The way people usually find freelancers is they post on Facebook asking if someone knows a good graphics designer. What we’re doing is we’re making it a one-click experience. There’s no bidding, betting, negotiating. There’s browse, search, buy. It’s an Amazon experience to buy a digital service. Nobody has done it before. The average time to make an order on Fiverr is 15 minutes. this is unbeatable. It’s unmatched.
We take a take out of every transaction. It’s one of the industry-leading take rates of over 26 percent. If you look at the EBITDA margins, you see that they’re shrinking. The way we actually structured the business is that we continue to grow aggressively while shrinking our negative EBITDA. There is a clear path to profitability. We are operating in over 160 countries. Our growth is coming globally from the adoption of freelancing online.
Our Primary Competitor is Definitely the Offline Market
Our primary competitor is definitely the offline market. I don’t know if it’s 96 or 97 percent of the activity offline, but we don’t need to eat anyone’s lunch to grow. We just need to move offline activity to the online. The offline freelancing market is massive. we’ve estimated that market to be a hundred billion dollars in the US alone. Europe is 1.5 times bigger than the US. There are over 162 million freelancers between the EU and the US. The opportunity is massive and it’s just starting to come online. This is like 1995 for ecommerce. This is so exciting.
Fiverr doesn’t hire its freelancers. It’s just the market that connects freelancers with businesses that have their digital needs. The way the marketplace is structured is such where we don’t have any employee-employer relationships. We are not relying on freelancers. We’re just connecting that supply with a demand that comes forward. We’re the platform on top of which they actually conduct their transaction. We just provide the platform to make that happen. It is very different than Uber and Lyft.
Fiverr Is The Everything Store For Digital Services, Says Fiverr CEO Micha Kaufman
“This is real meat directly from animal cells,” says Memphis Meats CEO Uma Valeti. “People who love meat for thousands of years immediately recognize this as meat. In fact, cell-based meat is called the holy grail of the food industry. This is meat and when people taste it that’s when the magic happens. If someone is a vegetarian for environmental or ethical reasons well here is meat where you can produce it by detaching meat production from slaughter for the first time ever.”
Uma Valeti, Co-Founder and CEO of Memphis Meats, discusses how the company is going to revolutionize meat production with lab-grown cell-based meats that could eliminate the raising and slaughtering of billions of animals globally. Valeti was interviewed on Bloomberg:
Lab Grown: “In Just Three Weeks We Get Delicious Meat”
Memphis Meats is a food company that is growing meat, poultry, seafood directly from animal cells. We take high-quality animal cells from the animals that are typically on the table as meat or poultry and we identify the cells that can renew themselves. They are there in the meat because cells continue to renew and double naturally. What we do is identify the high-quality cells that will make the cut into producing delicious meat. We isolate the cells, whether it’s cows, chickens, pigs, or ducks, and then we put them in a clean controlled environment where we feed them essential nutrients.
These are very familiar with what a baby calf would eat like vitamins, amino acids, fatty acids, minerals, oxygen, and sugars. In a matter of three to six weeks, we get delicious meat that is harvested and cooked just like you would handle meat. The entire process, the efficiency of it, getting from the first cell to meat being harvested is just amazing. We’ve done a lot of products. We’ve done beef, chicken, duck, and a number of other species.
How To Make Cell-Based Meat Grown In The Lab
Meat Production Without Slaughtering Animals
This is real meat directly from animal cells. People who love meat for thousands of years immediately recognize this as meat. In fact, cell-based meat is called the holy grail of the food industry. It’s something that is part of our culture whether you grow up in India, China, the US, or anywhere in the world. We celebrate the tradition of growing and eating meat at almost every gathering that we have.
When we think of our potential customers we see very high interest from people who are 55 and under, Millenials and Gen Z’s. That interest is about 60-70 percent anytime someone asks them if they are ready to eat cell-based meat. But it’s very interesting that even in those that are over 55 the interest is 50 plus percent. That’s something that we were really surprised to see. It actually makes sense. This is meat and when people taste it that’s when the magic happens.
It’s also blurring the definition of who’s a vegetarian or vegan. If someone is a vegetarian for environmental or ethical reasons well here is meat where you can produce it by detaching meat production from slaughter for the first time ever.
Real Cell-Based Meat From Memphis Meats
We Introduced the (Cell-Based) Beef Meatball in 2016
We started the company about three years ago. If you think about it, in 2015 or 2016 this was still thought of as science fiction. One of the things we thought of as a startup is not to be in stealth mode. Almost every startup would love to start in stealth mode and introduce their product when ready. We recognize that this is new and for some people, it can be weird. That’s why we started talking about it really early.
In order for us to demystify this for anyone who thinks about cell-based meat or clean meats, they have to experience this. They have to come and see it be cooked, smell it in front of them, and then taste it. Our goal as a company is to really get out there and educate consumers as quickly as possible. Why we are doing this? How we can do this? What we are doing? So far, the reception we have received has been tremendous.
This started when we introduced the beef meatball (in 2016). We can also do it with multiple species. We picked two of the most popular species in the world. For example, chicken is the most popular in the US. We did southern fried chicken and we started showing the fibers when someone cuts into it. Then we picked duck because we wanted to show that this is actually very relevant globally. More duck is eaten in China than the rest of the world combined. We started showing duck breasts and how it could grill and you could get the experience of that.
Example of What Memphis Meats is Producing
Focused On Showing What We Can Do With Very Desirable Species
This is not for everyone right away because they have to get comfortable with this. They have to see their friends and family eat it. Our goal is to get it into the market as quickly as possible. In the last three years, our entire focus was to start showing that we can do it with very desirable species. We are in the process now of building a pilot plant and starting to scale production. We plan to be to market in the near future.
The consumer really cares where the food comes from. That’s something that is a very clear trend in the last few years. It’s pretty clear that consumers want to feel excited about the process of how food gets there and not merely tolerate the system in place. I’d say that with the current system of raising 70 billion animals we are merely tolerating it. If given the option of producing meat directly without raising and slaughtering animals and someone can experience that, that’s amazing.
Cell-Based Meat: Real Meat Without Slaughtering Animals – Uma Valeti, CEO of Memphis Meats
“At Amazon, we still take risks all the time,” says Amazon CEO Jeff Bezos. “We encourage it. We talk about failure. We should be failing. Our failures have to grow with the company. We need big failures if we are going to be moving the needle. We need to have billion dollar scale failures. If we are not, we are not swinging hard enough.”
Jeff Bezos, CEO of Amazon, discusses how to be a successful entrepreneur by being customer obsessed in a conversation at the Amazon re:MARS conference in Las Vegas:
The Most Important Thing Is To Be Customer Obsessed
If you want to be an entrepreneur, the most important thing is to be customer obsessed. Don’t satisfy your customers, figure out how to absolutely delight them. That is the number one thing whoever your customers are. Passion. You have got to have some passion for the arena that you are going to develop and work in. Otherwise, you are going to be competing against people who do have compassion for that. They are going to build better products and services.
You can’t be a mercenary. You have to be a missionary. Missionaries build better products and services. They always win. The mercenaries are just trying to make money. Paradoxically, the missionaries always end up making more money.
We Need To Have Billion Dollar Scale Failures
You have to pick something that you actually have a genuine passion for. You have to take risks. You have to be willing to take risks. If you aren’t going to take risks, if you come up with a business idea where there are no risks there, those ideas are probably already being done. There being done well by many many people. So have to have something that might not work. You have to accept that your business is going to be in many ways an experiment. It might fail. That’s okay. That’s what risk is.
At Amazon, we still take risks all the time. We encourage it. We talk about failure. We should be failing. Our failures have to grow with the company. We need big failures if we are going to be moving the needle. We need to have billion dollar scale failures. If we are not, we are not swinging hard enough.
Disagree and Commit
If I have a new idea and I want to see it pursued I do have to build support for it. You need very smart people to embrace the idea and move it forward. We have a framework at Amazon, it’s one of our leadership principals, it’s called disagree and commit. That is extremely useful. After you discussed an idea, you do need to make a decision and move forward. The whole team needs to really commit to that. When I really feel strongly about something and the team disagrees with me I have a helpful phrase that I look to use which is, “I want you to gamble with me on this.”
The truth is when you are in a position like that nobody knows what the right answer is. You’re not saying I’m right on this. Go do this. You’re saying I want you to gamble with me on this because I don’t know if it is right either. I disagree and commit all the time. I promise the people when I do it, I’m very clear in saying, “I don’t agree with this. I think it is probably not going to work. But I will never say I told you so and I’m going to be on your team. I will do everything I can to make it work.”
Broadband Access Is Going To Be a Fundamental Human Need
A recent big bet (we’ve taken at Amazon) would be Project Kuiper. This is our LEO satellite constellation. The goal here is broadband everywhere. One of the things this does, it’s just the way the systems work, you have equal broadband all over the surfaces of the earth. Not exactly equal, it tends to be a little bit more concentrated toward the poles, unfortunately. You end up servicing the whole world.
It’s really good because by definition you end up accessing people who are under bandwidth including rural and remote areas. I think you can see going forward that access to broadband is going to be very close to being a fundamental human need as we move forward.
Amazon’s Jeff Bezos: We Need To Have Billion Dollar Scale Failures
“If you haven’t been on Trailhead.com this is an amazing place to go,” says Salesforce CEO Marc Benioff. “You can learn all the technical skills to be successful in this Salesforce ecosystem. Our customers are just on there at an incredibly high rate. We have more than 1.4 million users on Trailhead now and 25 percent said that they changed jobs in the last year because of the skills that they got on Trailhead.com.”
Marc Benioff, CEO of Salesforce, discusses the signing of the White House Job Training Pledge and announced that they now have over a million users on Trailhead.com in an interview with Jim Cramer on CNBC:
More Than a Million Users On Trailhead.com
That (White House Job Training Pledge) is probably the most exciting thing that I have seen happening in the Salesforce ecosystem. We have this broad ecosystem that surrounds our company. While we’re talking about these incredible (quarterly) results here today, the one thing that makes me even more excited is the work we’re doing with people retraining them. Reskilling them is kind of the technical word.
We’re able to get people onto this service. We call it Trailhead. If you haven’t been on Trailhead.com this is an amazing place to go. You can learn all the technical skills to be successful in this Salesforce ecosystem. Our customers are just on there at an incredibly high rate. We have more than 1.4 million users on Trailhead now and 25 percent said that they changed jobs in the last year because of the skills that they got on Trailhead.com.
White House Job Training Pleadge – Ivanka Trump at Toyota Plant in Georgetown, KY.
We Signed the White House Pledge For Jobs To Reskill America
We even had an amazing event in Indianapolis just a couple weeks ago with Ivanka Trump. We signed that White House pledge for jobs because we’re reskilling America. That’s our job. We want to make sure everybody can participate in the Fourth Industrial Revolution. That’s really exciting to me. To see the success on the faces of the broad range of people who’ve had this capability that is just setting us up for a tremendous future.
Anybody who participated in jobs that don’t exist anymore, they can get onto Trailhead.com and they can reskill. This is proven, it’s easy, and it’s free. That’s why we’ve had such great support, not just from the White House but from thousands of our customers who are also now deploying this inside their own companies. We have a product called myTrailhead.com so you as a Salesforce customer can set up your own internal reskilling system with your products. That’s a build your own ecosystem. We want everyone to be as successful as we are.
Mark Benioff added these comments during the recent earnings call:
Learners Changing Their Careers and Lives on Trailhead
Our ecosystem just developed in a huge economy around Salesforce, one that is going to create more than 3 million jobs and more than $850 billion in GDP by 2022, and that is why we’re so excited about Trailhead, which is our online learning platform and our online reskilling platform that empowers everyone.
Now we have more than 1.4 million learners changing their careers and their lives on Trailhead, and I’m sure so many of you have met these inspiring people and their incredible stories of how they transformed themselves using Trailhead. And in the quarter, our new myTrailhead product became generally available and now any of our customers can actually create their own branded service just like what we have done and reskill all their employees, customers and partners too.
myTrailhead Is a Force Multiplier
So it will be a huge driver of workforce development, which is why we are so excited that two weeks ago, we were with Ivanka Trump at our First-Over Trailblazer Day in Indianapolis, in our headquarters in Indiana, where we signed the White House Pledge to America’s Workers and we plan to give more than 1 million Americans the skills they need and earning Salesforce credentials and badges and do everything necessary to make them successful and to get top jobs in our ecosystem over the next 5 years.
myTrailhead is an excellent example and an excellent solution, not just how they can scale their people up on this modern technology, but also to prepare them for this modern world. And we see this again everywhere in the world. And we have special programs with companies all over the world to talk about how they reskill the workforce. I mentioned the meeting I had with the CEO of Telstra and his executive team and how concerned they were about the modern reports and what they wanted to do with our reskilling their workforce.
We have the same conversations with CEOs all over the world. So myTrailhead is a force multiplier. It is so important on so many levels when you think about modern skills and we’re very, very excited about that. Bret, do you want to comment more from a product perspective?
Salesforce Now Has 1.4 Million Learners On Trailhead.com says Salesforce CEO Marc Benioff
“You know you need more traffic to your blog posts but you don’t have the money to spend to get those eyeballs,” says online marketing strategist Neil Patel. “What should you do? Today I’m going to teach you five ways to promote your content when you don’t have any money. Have you tried all the basic stuff that most of these marketers, including me, are talking about, and find that you’re not getting any results?”
Neil Patel, online marketing strategist and founder of Neil Patel Digital, discusses how to promote your content when you don’t have money in his latest YouTube video:
If you go on Quora, and you start answering all these questions, and you even link out to your blog whenever it’s relevant, you’ll find that you’re going to start getting more and more traffic. Why is this? Well, these Quora posts rank for everything in Google. It’s one of the simplest and easiest ways to get more traffic to your site.
Quora posts rank for everything in Google, Says Neil Patel
Tip 2 – Go Live On Social Media
The second tip I have for you is to go live on social media. Even if you don’t have the biggest social following, live videos are super engaging and all these socialites show it to almost all of your subscribers because they want to compete with all the television networks. If you look at people like Tai Lopez, some people may hate on him, but he’s a really smart marketer. When he goes live, he can generate hundreds and hundreds and thousands of dollars in sales, just from his live videos. It’s a smart tactic. Not only is he getting people to go wherever he wants but he’s also generating real revenue from it because a live audience is very captive.
Tip 3 – Do Video Teasers
The third tip I have for you is video teasers. If you just bust out your phone and you do a video teaser, talking about what you’re going to release, or this content, or what is new, and why they should check it out, or why they should be patient and wait for the next week, they’re more likely to come the next week and actually read that blog post. You know, Apple, whenever they launch new products, they do this whole event. They create all this mystery. They’re doing videos and conferences, breaking down what they’re going to release in the future. These teasers are a great way to build up the pent up demand for the product right when they launch it, and you can do the same with your content. You just have to create videos that tease people to let them know what’s coming out in the future.
Tip 4 – Answer Questions On Social Media
The fourth tip I have for you is to answer questions on social media. Whether it’s Facebook, whether it’s Twitter, people are tweeting, asking questions. Whether it’s groups, it doesn’t matter where it is. If you go there and you respond and help people out, they’re more likely to follow you. Not just on the social web, but they’re also going to follow you on your website. And the beautiful part about this, especially when you do it on sites that are your competitors, you’re going to get more link clicks because when you leave a comment, you can typically link back to your site. When you do this on the social web, you’ll find that you’re getting more followers and that way when you release more content, you’ll get more views. But it’s a very effective strategy, especially when you do it to competitors because they have your ideal audience.
Tip 5 – Do Direct Outreach
And last but not least, direct outreach. When you link out to people, let them know that you linked out to them. Just email asking to share your content. You know how many emails I get of people saying, hey Neil, I linked out to you. I love your content. If you like the post, feel free and share it. I don’t share all the time but I do it some of the time. It works, it even works with me. That’s just showing you that outreach, if you take the time, you can get extra shares. Sure, not 100% of the people are going to share your content or link back out to you, but if you do it in quantity, you will get extra traffic from it.
How To Promote Your Content When You Don’t Have Money – Neil Patel
“Once your company is no longer small it tends to accumulate bureaucracy and you begin to lose the founder’s mentality,” says Chris Zook, author of “The Founders Mentality.” “That is the paradox of growth. Growth creates complexity and complexity is the silent killer of profitable growth. Complexity is also the silent killer of our lives in some ways. The solution is that every business should go through a sort of housecleaning to get to the core of the core of the core.”
Massive Change Coming As We Shift to a Digital Economy
What are the most predictable barriers to sustaining profitable growth for organizations today? Why is it that some companies age prematurely? Why do others continue to grow? As the global economy has shifted from an industrial economy to a digital economy people see massive change coming. Nearly two out of three people believe their main competition in five years will be a different company and have a different business model than it does today.
Right now will be the slowest pace of change that you will experience going forward. Interestingly, it is also the fastest pace of change that you have ever experienced. The major barriers to growth are internal. Your company’s fate is in your hands.
Starbucks Refocused On the Customer Experience
Anybody could open a coffee shop. So how did Starbucks rise above all the rest to create a massively successful business in the coffee shop industry? For years the company’s trajectory looked like a high tech business. Then the founder Howard Schultz left and he turned the running of the business over to a management team. Then to the surprise of many loyalty scores from customers started going down. Same-store sales went down and this, in turn, caused their stock price to go down.
Starbucks founder Howard Schultz needed to come back as CEO to figure out what went wrong and right the ship. Were people simply sick of Starbucks? Actually, Schultz found that the company was inflicting self-inflicted wounds. It wasn’t any single big decision, it was many decisions made inch by inch that were creating the issue. The stores became cookie cutter and cluttered with big aluminum machines that ruined the experience. Customers didn’t love Starbucks anymore. That changed when Schultz focused the company on the customer experience again.
Maintaining the Founder’s Mentality
This is an example of how even successful companies can lose the founders mentality. The founder’s mentality dies when everyone aspires to be in the front office. Strategic problems outside often reveal deeper challenges and root courses of a breakdown inside companies. Businesses should look at the indicators of internal health. The first of those factors is Insurgency. What are we really about? Are we building something for the long term and not quarterly earnings? What is our core? For example, what is the core of Nike? It’s not the sole of the shoe. It’s Nike’s bold mission of uniqueness.
The second element of the founder’s mentality is what we call Frontline Obsession. When leaders move far from the frontline you lose the innovation engine and you lose talent. You also lose experimentation, frontline empowerment, and customers advocacy. Engagement levels are often lowest for those not interacting with customers. Generally, functions further down in the organization have lower engagement. Many companies erode from the frontline up.
The third element of the founder’s mentality is the Owner Mindset. The founder is the owner. They feel that their company is their baby. But as the years go people move to the main office, away from operations and the customer. Sometimes, as with Michael Dell, this prompts the founder to come back to the company.
Michael Dell Restored the Owner’s Mindset
When Michael Dell of Dell Computers noticed that PCs and company owned and managed servers started to not be as powerful as they once were. At one time they ubiquitous with business. Then AWS and the cloud started replacing servers and this impacted Dell’s business model. By this time Michael had left day to day management of Dell. But just like Starbuck’s founder, Dell brought Michael back to restore the owner’s mindset.
Michael Dell made a lot of bold changes including acquiring EMC, which at the time (2015) was the largest deal in tech history. Many people were openly skeptical. However, Michael Dell had a plan to simplify the company. He was actually going through the founder’s mentality playbook.
He really rebuilt the insurgency from scratch. At one point, he notably said that he wanted to make Dell the largest startup in the history of business. Dell is now wildly successful again, having significantly changed its business model while empowering an entrepreneurial spirit once again.
When I came to Lexington, Kentucky to speak today I asked about the early years of Alltech. Alltech’s founder, Dr. Pearse Lyons story is incredible. It is as incredible as Michale Dell’s. Dr. Pierce Lyons was way ahead of his time. He is is the quintessential expeller of these elements of the founder’s mentality.
Every Business Should Get to the Core of the Core of the Core
It is a fact that founder-led companies consistently outperform. A study by Bain showed that founder-run companies performed over 3.1 times more than others in the S&P 500. But organizations are just like humans in their life cycle. Initially, all founders of successful companies went up against established big companies. These companies often don’t immediately notice or care about your small startup. However, they eventually fight back. This forces you to raise capital and grow and become large yourself.
Once your company is no longer small it tends to accumulate bureaucracy and you begin to lose the founder’s mentality. That is the paradox of growth. Growth creates complexity and complexity is the silent killer of profitable growth. Complexity is also the silent killer of our lives in some ways. The solution is that every business should go through a sort of housecleaning to get to the core of the core of the core.
Renewing the Founder’s Mentality
An example of this is LEGO. Over time, LEGO moved away from being a toy company and created other things like theme parks, watches, retail stores, and much more. At one point this diversification almost caused the company to go bankrupt. All of these ventures sucked out their ability to execute the core. Now realize that there are 71 lego bricks for every person on the planet. LEGO as a brand and a toy product is engrained in people. But LEGO had a serious problem to solve.
They decided to go back to their core. They decided to simplify and they turned the company around. It’s a great example of how companies can over complicate things when they go after bright shiny objects.
A question I’m often asked is can you renew the founder’s mentality? One company that did renew it is Domino’s. The company eventually stalled out when they didn’t invest in the next wave of differentiation. An investment company bought Domino’s and they started to make each franchisee like a mini founder. Their stated goal was to create a company of many founders. They also doubled down on technology and delivery. This strategy worked big time. Their trajectory of growth is like a high tech firm now.
FCC Chairman Ajit Pai blasted robocallers today in an interview on Fox Business. He said that the FCC has taken aggressive regulatory action and has told the Justice Department that robocalling in one of the FCC’s top consumer protection priorities: “We need you to make this an issue to send a signal to all of the robocallers out there, even the ones who are beyond our shores, that this is not going to stand for America consumers.”
Ajit Pai, Chairman of the Federal Communications Commission, discusses how the FCC is aggressively fighting the annoying and time wasting robocall industry in an interview on Fox Business:
FCC To Robocallers: This is Not Going To Stand
There are two different parts of our plan (to combat robocalls). First, is taking aggressive regulatory action. We have told the industry that we expect them to adopt what is called call authentication. That is essentially a digital fingerprint for every phone call this year. If they don’t, the FCC will take action to make sure that they do.
Secondly, in terms of enforcement, we have imposed fines (totalling $205 million since 2015) and we have referred those cases to the Department of Justice which is in charge of collecting those fines. We have emphasized to the Department of Justice that this is one of our top consumer protection priorities. We need you to make this an issue to send a signal to all of the robocallers out there, even the ones who are beyond our shores, that this is not going to stand for America consumers.
FCC Chairman to Robocallers: This Is Not Going To Stand!
