The Transport Guy: Silicon Valley heavyweights are trying to fix the lack of diversity in tech – here's how (DBX)

Kara Chin and Steve Kovach March 28, 2018 at 02:22PM

Following is a transcript of the video.

Steve Kovach: Shifting gears a little bit I want to talk about diversity and gender issues in the Valley. I don't know if you've read it but I was really into this book by Emily Chang from Bloomberg, "Brotopia." One of the things they talked about in there was, it's kind of a slow moving thing you guys have released diversity numbers before, pretty much in line with a lot of your peers in the Valley. One of the solutions presented in that book, I'm curious for your take on this, is the gender pay gap issue. How it's one of those things sure, recruiting might take time, years even, and I know you're involved in efforts to help out with that and we can talk about that. But when it comes to gender pay isn't that something that can be fixed now? You can literally just flip a switch?

Drew Houston: Oh absolutely.

Kovach: Talk a little bit about how you're thinking about that.

Houston: I would say more broadly, we've always, Arash and I, have always wanted--

Kovach: Arash your co-founder?

Houston: My co-founder and I have always wanted Dropbox to be a great place to work for everyone. And we certainly believe that two people doing the same work should be compensated the same way. So I agree. There are certain, while as an industry we have a long way to go there are certainly things that are directly within companies' control and so by all means, within our company we take a close look at equity between, or gender pay equity, and I think every company should.

Kovach: And on the diversity end this week it came out that you're part of this new initiative that I think is pretty interesting. This idea that if you're a start-up seeking funding you won't accept the money unless there's good representation from the VC firm. Talk about what that's called and how you got involved in that.

Houston: Yeah, it's called Founders for Change and I think, along the same lines, we want so much of America, so much of Silicon Valley is based on this idea of equal opportunity and I think all of us want the Valley and tech to be a place where that is true. We want it within our companies and we want that same equal opportunity when it comes to our investors. It's a large group of founders. We got introduced to it through Sequoia who is our first venture capital backer. I think it's a really, I think it's great that the founders and the community can come together and try to move things forward.

Kovach: And is the idea here to start it with maybe smaller startups who are building themselves from the ground up? Is that why you're doing it through VC firms?

Houston: I think if all the founders can come together as a community and agree this is the world we want to live in and this is what we want our funding landscape to be. That's something that we hope the investment community would pay attention to.

SEE ALSO: The full interview with Drew Houston

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Silicon Valley heavyweights are trying to fix the lack of diversity in tech – here's how (DBX) from Business Insider: Steve Kovach

The Transport Guy: How one CEO went from rejecting an offer from Steve Jobs to an $11 billion IPO

Kara Chin and Steve Kovach March 27, 2018 at 09:52AM

Dropbox CEO Drew Houston famously turned down Steve Jobs when Jobs offered to acquire the company. After the rejection, Jobs not-so-subtly implied that he'd have to put Dropbox out of business instead. The following is a transcript of the video.

Steve Kovach: You have this interesting legend of the time you were summoned to Apple by Steve Jobs. You know what I'm going to ask you. What happened? And then how does that relate to where you're at today?

Drew Houston: Well I, we had — Steve had heard about Dropbox and we arrived at 1 Infinite Loop, and he started by telling us that we —  we started the meeting and he's like, "You've built a great product." And so you can imagine, kind of bucket list, okay, check that off.

Kovach: Steve Jobs said, "I love it."

Houston: And then it was actually, we were interested in building the company and we weren't looking to sell, so the formal part of the conversation was pretty quick. It's been a wild ride, for sure.

Kovach: Right, so the legend goes he said, not so subtly, well we're just gonna have to crush you guys and put you out of business. And 10 or so years later you're here. How does that feel to you? Do you feel vindicated by that at all?

Houston: It feels great. I mean we're really proud of the business that we've built and I'm just really proud of the team. It's sort of the culmination of a lot of hard work by many people. Just feeling really excited and really grateful.

Kovach: You're here now. Speaking of Apple, though, and these other giants, this industry is dominated by four or five big players and it seems like everyone else is kind of fighting over whatever is left. How do you compete in that environment where there's so much power influence in just a handful of players? How do you stay afloat?

Houston: Well we stay close to our customers and when I sit in round tables with customers they show me their phones. And they've got products from everyone, right? They have Dropbox, they've got all the Google products, they've got all the Microsoft products. And they turn to us and they're like, "Hey, can someone build a cloud to sync my clouds?" And so we provide a real, that's our strength, that we help tie everything together and we've found that while there's overlap with the larger companies, folks like Microsoft and Google have become partners over the years.

Kovach: What does that partnership look like when you partner with an Apple or you partner with a Google, what does that look like to me, as a user?

Houston: Well when you open an Office document in Dropbox you can then open it in the native apps on the phone and vice versa, and then Dropbox is a place where you can put all of your information. We certainly want — we share a lot of users between Dropbox and any major product and so those integrations are really valuable and we want to make sure that our shared experience is good.

Kovach: Going into today, your IPO day, there was a little bit of worry about your valuation, how it seemed like you might be IPOing at a price under the valuation you were at a few years ago which is reportedly $10 billion. Today how do you feel now that, I think it was up, the stock was up some 40 odd percent, approximately up to $12 billion valuation. How does that feel?

Houston: Again we're really proud of the business we've built and one thing I tell the team is get used to the stock going up and down. This will be a normal, everyday occurrence and so whatever the price is today it'll be something different tomorrow. That's outside of our control so what I really make sure that the team stays focused on is that our customers don't really care if we're public or private. They just want a great experience and they're the ones at the foundation of the business we're building so we need to stay focused on keeping our customers happy and building the best products.

SEE ALSO: The full interview with Drew Houston

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How one CEO went from rejecting an offer from Steve Jobs to an $11 billion IPO from Business Insider: Steve Kovach

The Transport Guy: Dropbox CEO talks about how he went from rejecting Steve Jobs to an $11 billion IPO (DBX)

Steve Kovach March 23, 2018 at 03:49PM

 

Dropbox CEO Drew Houston famously turned down Steve Jobs when Jobs offered to acquire the company. After the rejection, Jobs not-so-subtly implied that he'd have to put Dropbox out of business instead.

On Friday, Dropbox went public, with its stock popping 35% by the end of the first day of trading, defying the rest of the bleak market.

Houston is probably feeling pretty good about rejecting the tech legend. He's now a billionaire a few times over.

Going into Dropbox's IPO Friday, there were worries that the company's valuation would be well below the $10 billion that private investors pegged it at a few years ago. But those concerns were quickly squashed. It now has a market cap of $11.03 billion.

In an interview with Business Insider on Friday, CEO Houston said he wasn't concerned about near-term stock price of his newly public company. He told his employees not to focus on what could have been, and could still be, a fluctuating stock price.

"One thing I tell the team is get used to the stock going up and down," Houston said. "This will be a normal, everyday occurrence... that's outside of our control. So what I make sure the team stays focused on is that our customers don't care if we're public or private. They just want a great experience."

Dropbox is the first of the so-called tech unicorns — companies valued over $1 billion — to go public this year. Music streaming service Spotify will have its IPO in the coming weeks, and Lyft, Uber, and Airbnb, are all seen as the next major tech companies likely to go public either this year or next year.

"I think we're all excited about this cohort of companies," Houston said. "And I'm looking forward to see Daniel [Ek] take Spotify public. A lot of these founders are my friends. It's certainly a lot of fun to watch them scale their businesses." 

Houston's take on Silicon Valley's troubles

Dropbox may not be mired by accusations of spreading fake news or mishandling personal user data, but it is growing in an environment tainted by a lack of employee diversity. Dropbox released its latest employee diversity stats in February, and they don't look much better than other Silicon Valley tech companies. Women make up 39% of Dropbox's workforce, and the company is 55% white and 32% Asian.

Houston recently joined a group called Founders for Change, a coalition of tech companies and startups that have pledged not to take venture capital funding from groups that didn't have a woman or person of color who could write the check.

It's one of many efforts to fix the diversity problem in Silicon Valley, but it's not going to happen overnight.

But one quick fix that can be made is the gender pay gap, when female employees are paid less for the same work. It's simply a matter of analyzing salary data and making sure all employees are getting equal pay for the same work. Houston said that's an issue Dropbox is looking at too.

"While as an industry we have a long way to go, there are things that are directly within companies' control, and so by all means within our company we take a close look at gender pay equity, and I think everybody should," Houston said. 

And then there's the other black eye on Silicon Valley's reputation. Facebook's failure to protect user data that was given to third-party developers sent the company headfirst into one of its biggest crises since its founding. In a series of interviews this week, Facebook CEO Mark Zuckerberg said he's be open to some form of government regulation.

Even though Dropbox isn't a major social network, Houston did say it's responsible for keeping user data stored on its servers secure.

"We shouldn't wait for [regulation]," Houston said. "I think we all realize that it's critical that we trust all the services we use, and that's certainly top of mind for us, as you can imagine."

"I think what the government does from a regulation standpoint, from a policy standpoint, can go in a lot of different directions," Houston later added. "But we want to make sure that we — whether as a public company or whether as a private company — are doing everything we can to keep our user's information safe."

You can watch Business Insider's full interview with Houston in the video above.

SEE ALSO: What Dropbox's COO says about the company's post-IPO future

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Dropbox CEO talks about how he went from rejecting Steve Jobs to an $11 billion IPO (DBX) from Business Insider: Steve Kovach

The Transport Guy: YouTube and Facebook have a serious problem with 'promoted' conspiracies about the Parkland shooting

Lamar Salter and Steve Kovach March 05, 2018 at 12:45PM

YouTube promoted a video claiming to show evidence that one of the survivors of last week's school shooting in Parkland, Florida, is a paid actor. Similar videos and articles are showing up on YouTube and other social media sites like Facebook. The issue is an example of a potentially troubling problem for social media sites and how news is delivered to the world. Following is a transcript of the video.

The fake news problem on social media is not going away. We learned that firsthand in the wake of the Florida shooting that took 17 lives. After the shooting, a lot of student activists from the school, started speaking out for more gun control. One of those students was David Hogg. Hogg has appeared on many news outlets, and eventually conservatives started to take notice. And some conservatives started to promote a new conspiracy theory that Hogg was a paid actor to promote liberal agendas, like gun control. At first those conspiracy theories kind of bubbled under the surface, until it broke through on YouTube. YouTube promoted a video saying Hogg was a paid actor, as the top video on its trending section.

Within hours, YouTube caught the mistake and said it was their fault. YouTube said its algorithm detected that the video was an authoritative news source, and therefore was able to make it through to the top of the trending section. But that's not where the problem ended. If you searched for David Hogg's name on YouTube, dozens of videos came up propagating the same conspiracy theory. It happened on Facebook too.

In the trending section on Facebook, if you clicked on David Hogg's name, you saw some legitimate news articles about him, but you also saw a lot more of the same conspiracy theories we were seeing on YouTube and a lot of fringe conservative websites. Facebook called that content abhorrent and a product manager told me they were taking it down. But this gets to a larger issue. Every time a major news event happens, especially tragedies like mass shootings, the social networks are perverted and abused to promote conspiracy theories like the one we saw about David Hogg. And it goes to an even deeper problem.

Big tech companies like to say that their platforms can't be, quote, arbiters of the truth. And that really means, they view the truth as subjective instead of objective. And if they're starting from a point where the truth is subjective, there's no way the fake news problem can actually be fixed. Facebook is trying to play the role where users decide what are trusted and authoritative news sources. For example, Facebook is issuing surveys to users, asking if they believe certain outlets are trusted and authoritative sources. However, they haven't said how they're going to prevent these surveys from being gamed. It could easily lead to more fake news in your newsfeed. One of the best ways to combat this problem, will take an entire rethinking of the ways these tech platforms operate.

They need to realize they have the same responsibility that traditional news organizations have. That means editors, that means fact checkers, that means people monitoring the content to make sure what gets out there is as close to the truth as possible. And when they mess up, there need to be consequences, just like there are consequences for normal media organizations. When a journalist screws up, he has to issue a correction. He gets fired. We don't see those kind of repercussions with social media. Both Facebook and YouTube have said they're going to hire thousands of human content monitors to address this issue. But so far, we haven't seen any indication that that is working. We don't know who these content monitors are, what rules they're operating under, and even if they're full time employees of these companies.

Facebook, Google, Twitter, they're all operating from a standpoint that the truth is subjective. And until they change that mindset, the fake news problem can't be fixed.

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YouTube and Facebook have a serious problem with 'promoted' conspiracies about the Parkland shooting from Business Insider: Steve Kovach

The Transport Guy: Amazon will stop selling Nest smart home devices, escalating its war with Google (GOOG, AMZN)

Steve Kovach March 02, 2018 at 04:20PM

• Amazon decided not to sell any of the newer products from Google's smart home division Nest.
• Amazon currently sells a limited number of Nest products, but those will disappear from the site after it sells the inventory it has left. Nest decided to no longer work with Amazon selling the limited number of products it was selling on the site.
• Amazon's move heats up its war with Google over the future of the smart home. The two are also battling over video devices and services.

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It was an awkward phone call, but one the Nest team had been expecting.

After weeks of silence, Amazon's retail team informed Nest employees on a conference call late last year that it would not list any of the newer Nest products recently announced by the company, according to a person familiar with the call. The products in question include the latest Nest thermostat and the Nest Secure home security system, among others.

On that call, says the person, Amazon told Nest that the decision came from the top — and that it had nothing to do with the quality of Nest products, which had great reviews on Amazon. Nest employees who were on the call ended the discussion under the impression that the decision had come from Amazon CEO Jeff Bezos, although Amazon's retail team didn't explicitly say that at any point, according to a person familiar with the call.

As a result of Amazon's decision, Nest decided to stop selling any of its products through Amazon, meaning the limited number of Nest devices listed on Amazon today are expected to disappear from the site once current inventory is sold out, according to a person familiar with the matter.

Amazon's decision not to sell Nest products has huge implications as it strives to carve out a new computing platform — and as it continues to clash with Google over the future of computing. 

After missing out on smartphones and finding limited success with its line of Fire tablets, Amazon is betting big on Alexa as a new computing platform. Alexa is both Amazon's AI assistant and its platform for smart home gadgets, including connected lights, door locks, and music speakers. The company has gotten more aggressive with competitors recently — especially Google, the owner of Nest, which is Amazon's biggest competitor in the smart home with its own Google Assistant platform. Amazon also announced in February that it would buy Ring, the maker of camera-equipped doorbells and other connected home security devices, in a deal said to be worth about $1 billion.

Nest was warned of Amazon's decision, even before that fateful call. Representatives from Google, its sister company at the time under their Alphabet parent company, told Nest that they had heard from Amazon that the ecommerce giant had decided not to sell newer Nest devices. Google reabsorbed Nest last month.

A person familiar with Nest's thinking said the company decided to remove its current set of older products from Amazon because it wanted to be able to offer its full portfolio of devices, or nothing at all.

It's possible you may be able to find Nest products on Amazon in the future through Amazon's Marketplace program, which lets third-party retailers sell items through Amazon. But it's unclear if Amazon plans to restrict Nest sales from its Marketplace partners too.

A Nest spokesperson declined to comment. An Amazon spokesperson also declined to comment.

Amazon doesn't appear to be blocking sales of smart home products from companies other than Nest. For example, Lighthouse, an AI-powered connected camera made by a startup of the same name, is available on Amazon. Products from August, a connected home company best known for its smart door locks, are also available to buy on Amazon, along with products from several other smart home device manufacturers. 

Amazon's war with Google

Amazon's move against Nest comes as it works to beef up its smart home ambitions after a successful holiday season for the Alexa assistant and its Echo hardware. Last month's Ring acquisition puts Amazon in a much better position to integrate its products with Alexa, accelerating its ability to compete with Google's own smart home ambitions.

Nest is Google's smart home products division. It makes devices like connected cameras, thermostats, smoke detectors, and security systems. Google bought Nest in 2014 in a $3.2 billion deal. Nest later became its own company after Google reorganized into the Alphabet conglomerate, only to be reabsorbed back into Google in February. 

Nest is now under the same hardware division as the rest of Google's hardware products, which will create a streamlined organization from which Google can better compete against Amazon.

Amazon built up an early lead in voice-controlled computing thanks to Alexa and its line of Echo devices. But Google is rapidly catching up. Google Assistant, a rival to Amazon Alexa and the Google Home speakers, which compete with the Amazon Echo, are rapidly gaining market traction.

Amazon had about two-thirds of the smart speaker market towards end of 2017, but that figure doesn't reflect the full holiday shopping season, when Google likely gained more market share.

The stakes are huge. Both Amazon and Google are building out a new voice-powered operating system that can control everything in your life — from your lights to your garage door to the music and video you stream. Amazon's acquisition of Ring will give it a nice boost on the hardware side as it continues to build out Alexa's AI. Ring was already one of Nest's biggest competitors. Now it has the nearly-limitless funding needed from Amazon to go after its Google-backed rival.

The rivalry between Amazon and Google extends beyond the smart home, though.

In addition to ending sales of Nest products, Amazon does not sell other Google hardware like the Google Home Speaker or Pixel smartphone. In a seemingly retaliatory move, Google has blocked its YouTube native app from running on Amazon's Fire TV and Echo Show. (Google, for its part, has said the block is because Amazon products violate YouTube's terms of service.) Amazon will start selling Google's Chromecast streaming devices soon, which may help ease tensions between the companies and convince YouTube to bring its service back to the Fire TV and Echo Show.

Beyond hardware and apps, Amazon is also beefing up its digital ads business, a direct threat to Google's core business, as CNBC reported last year. Amazon and Google also compete in providing cloud computing services to companies, through its respective Amazon Web Services and Google Cloud divisions. 

Amazon's beef with Google isn't unique in an industry dominated by a small handful of giants. Amazon also had a rocky relationship with Apple. It took about two years for whatever was going on between the two companies to get resolved after Apple opened up the Apple TV to all third-party developers. Amazon started selling the Apple TV again last year, and it later added its video-streaming app to the Apple TV App Store.

While Amazon's decision to keep Nest products of its site may seem nefarious to some, it likely isn't illegal under US antitrust law, as Chris Sagers, a professor of law at Cleveland State University told Business Insider in an interview. Because Amazon doesn't have a monopoly in the connected home, the move isn't anticompetitive.

"It's probably not illegal," Sagers said. "It's ugly... but American law says even monopolists have broad freedom to choose with whom they deal."

SEE ALSO: Sorry, Siri, Alexa's got you beat — Here's why Apple's going to lose the voice computing war to Amazon

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Amazon will stop selling Nest smart home devices, escalating its war with Google (GOOG, AMZN) from Business Insider: Steve Kovach