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02.02.17 | 5:51 pm

The failure that led Snap to sponsored lenses and geofilters

There's a fun little section in the Snap Inc. IPO filing titled "Why We Sell Ads." It's odd, in a way, that Snap should have to explain this in the first place—advertising is the company's primary source of revenue, after all. Yet it starts with a candid admission that "When we first started building Snapchat, we didn't know how it would make money." 

Like so many other tech companies, Snap focused on creating fun ways for people to share pictures on smartphones. The product was new, and it wasn't clear how to build a business around it, the statement continues. But soon the startup realized that "we needed to start monetizing—and fast. Our server bills were getting expensive."

At first the company figured people would buy creative tools so that they could have more ways to, for instance, draw captions on their pictures. So it opened a Lens Store at the end of 2015, with each lens costing just 99 cents. But the results were disappointing. Snap closed the store after just two months, in January 2016, and made all the Lenses free.

That's the moment when the Snapchat community began creating a lot more Snaps:

"We learned that asking users to pay for Creative Tools was a bad idea. It meant introducing more friction into the process of self-expression, which was the opposite of what we wanted on Snapchat. We also learned something exciting about building new products: if we built more Creative Tools and made them available to everyone for free, our users would create more Snaps and spend more time on Snapchat."

And that's how Snap came up with advertiser-backed creative tools—sponsored Lenses and Geofilters. Today's IPO filing also revealed that Snap's 2016 revenue was $404.5 million, and its global average revenue per user, or ARPU, was $1.05. 

03.23.17 | 6:12 pm

Here’s your first look at Netflix’s “thumbs up” ratings system. (Buh-bye, stars.)

When a star burns out, it becomes a white dwarf. And as Fast Company reported last week, Netflix is about to have many white dwarves on its hands when the streaming service replaces its current star-based rating system with a thumbs-up option. At the time, the company had not provided any preview of what its icon would look like, so here's your first chance to gaze upon Netflix's new symbol of approval.

Photos Courtesy Of Netflix

03.23.17 | 6:00 pm

The Silicon Valley startup that wants to help build Trump’s wall is backed by Beijing

A new Department of Defense white paper has some in Washington concerned that the U.S. government isn't doing enough to back tech startups, and that China is rushing in to cover the deficit, according to the New York Times. That means the Chinese military, conceivably, could gain access to advanced U.S. technologies. 

One company that has taken investment from a state-backed investor is Quanergy, which last summer raised funds from the partly state-backed Chinese venture fund GP Capital. It's also said to be the only Silicon Valley startup that has expressed interest in President Trump's border wall, Dan Primack noted in his newsletter recently. Along with the spinning-laser sensors it makes for military driverless vehicles, Quanergy touts a security system billed as "the most complete and intelligent 3-D perimeter fencing and intrusion-detection system." 

While the technology may be compelling, the relationship to Chy-na is likely to rumple Trump's oversized suit. The Defense Dept. has sought to invest more money in startups, through entities like the Defense Innovation Unit Experimental. But if the government declines to partner with smaller innovative tech companies like Quanergy, China very well could. 

Image: Quanergy on YouTube

03.23.17 | 4:51 pm

eBay’s diversity report shows its staff is still mostly dudes

The most recent report since eBay spun off Paypal shows the staff is predominately men. Of the 12,600 employees globally, men comprise 62% of the workforce, while women make up the remaining 38%. Men dominate leadership roles (68%) and make up 78% of technical staff. 

The company's U.S. workforce has better race and ethnicity numbers with 52% white employees. The majority (65%) of U.S. tech staff is Asian. Damien Hooper-Campbell, eBay's chief diversity officer who came on board last June, acknowledges there is work to do to improve the numbers. But the company should get an A for continuing to be transparent, especially as a new survey found that employees believe their companies are more diverse than they actually are.

Image: eBay

03.23.17 | 4:05 pm

Want to make your job listings more appealing? Advertise work-life balance

If you're trying to attract lots of talented job applicants, you might worry that touting a job's totally livable workload could dent its perceived prestige. After all, top-paying jobs notoriously have insane hours to match the pay, right?

But the behavioral-science research organization ideas42 says that's an unfounded fear. In a recent experiment, the group measured people's reactions to job listings and found that while "people definitely expect to be paid more for a decline in work-life balance," the reverse isn't true: "Advertising work-life balance has no effect on perceived prestige of a job, but it does make a job more attractive. In addition, improvement in work-life balance doesn't lead people to think that it pays less."

Photo: Unsplash user Calum MacAulay

03.23.17 | 3:49 pm

SoundCloud has raised $70 million to stay afloat

The cloud of uncertainty hanging over SoundCloud this year has been lifted, at least temporarily. The streaming music platform just raised a $70 million debt round, enabling it to keep chugging along as it coaxes subscribers and, eventually, a buyer. Last fall, rumors swirled that Spotify may be interested in snatching up SoundCloud, but those talks reportedly fizzled out. Since last March, SoundCloud has been struggling to turn its free, user-uploaded audio service into a subscription business with its SoundCloud Go tier

03.23.17 | 3:41 pm

What Silicon Valley can do to bring jobs to Appalachia

The new congressman representing the northern California district where tech giants like Google and Facebook and Apple are based recently visited Eastern Kentucky to meet former coal miners training to be mobile app developers. Rep. Ro Khanna talked to Fast Company about his experience and the lessons he learned about how Silicon Valley can build bridges with "Silicon Holler," as that part of Appalachia is called. 

"We can do a better job—to bring them into the 21st-century economy. And how are we going to provide a middle-class life for them? For me, that means investing in the apprenticeship and training programs. Creating partnerships that rewire labor markets so that people are getting the right skills and employers are taking a chance on those skills."

Read the full interview here.

03.23.17 | 3:00 pm

Eberjey’s secret to thriving brick-and-mortar stores

Fashion brand Bebe just announced it is shutting down its retail presence and focusing entirely on e-commerce after losing $200 million over the last four years. It is following in the footsteps of brands like American Apparel, Wet Seal, and the Limited. 

In the midst of this harsh retail environment, I'm always surprised to hear about brands whose brick and mortar stores are driving the business forward. One such brand is Eberjey, which launched in 1996, but only opened its first retail store five years ago. That store did so well, it will have a total of five by the end of this year (including it's first New York store).

Mariela Rovito, cofounder and president, attributes this success to an obsessive attention to customer experience. This means tailoring the clientele in each and lighting candles, like you would in your home. But mostly, it means training store representatives. "We ask our staff to treat each customer as a guest in their house, and we mean this literally," she says. "Would you give your guest a glass of water when they come through the door? Would you talk their ear off if all they wanted was to come and hang out?" 

Employees are also encouraged to always try to accommodate customer requests as much as humanly possible. Last week, one customer came to the with an elaborate plan to surprise his significant other with a scavenger-hunt-like experience that required the help of the staff. They immediately agreed. Rovito believes that each customer that has a superlative experience will advocate for the brand and, so far, that's proven true. 

03.23.17 | 2:54 pm

Even in 1883, tech journalists were the worst

I recently came across this passage from Doug Most's book The Race Underground, which recounts the story of how the subways got built in New York and Boston. In the passage, Most tells of how a trade magazine called Electrical World took a few cheap shots at Thomas Edison in 1883 because they were already bored with the electric light and were wondering what inventors were going to do next. Keep in mind, this was less than five years after Edison first demonstrated the miracle of light in 1879—an invention that transformed the world. Wrote the magazine: "The electric light has long ceased to be a curiosity or even a novelty." Guys, really?    

03.23.17 | 2:01 pm

I’m super ambivalent about Thinx

I've been reporting about Thinx for a year. I've been impressed with the company's product, and its commitment to eradicating the social taboo around menstruation. But I'm also horrified to hear former staff members talk about the terrible working conditions they faced at the company. 

In today's issue of my weekly fashion newsletter, "Moving the Needle," I write about how I'm wrestling with these two images of Thinx. You can read the letter here. And if you're interested in signing up, you can do so using this link. (Just click the option for "Fashion Weekly.")

When a business leader comes under fire, it's easy to dismiss the entire company and mission. But I've found that things are rarely black and white, and I'm left with mixed feelings. Do you feel the same way? Tell me more at esegran@fastcompany.com or @LizSegran

03.23.17 | 1:56 pm

A new Microsoft partnership signals a mellower approach to smart cars

In a new deal with Toyota, Microsoft will license out its patented technology to help power smarter vehicles. This is a far more laid-back partnership than the company has made in the past—and a more casual strategy than its competitors are taking to make cars intelligent.   

Microsoft maintains that it doesn't make cars, but that doesn't mean it's not interested in the future of car software. After all, its Azure platform is used by plenty of automakers, the company says. And carmakers like Nissan and BMW have already singed deals to embed its personal assistant, Cortana. So while other companies build their own autonomous cars, Microsoft may be content to cash in on less sexy endeavors. (h/t: the Verge)

Photo: Smith Collection/Gado/Getty Images

03.23.17 | 1:10 pm

Bob Iger agrees to stick around. Disney magic ensues.

Shares of the Walt Disney Company jumped today on the news that CEO Bob Iger has extended his contract to July 2019. Iger had planned to step down a year earlier. His imminent departure and the lack of an apparent successor are worrying investors at a time when Disney-owned ESPN and the rest of the legacy cable business are facing challenges from the rise of streaming.

03.23.17 | 12:40 pm

Zuri makes it easier for Americans to wear fabulous African prints

Zuri is a startup based in Nairobi, Kenya, founded by two American expats. The company works with East African craftsmen who create fabrics using a wax-printing technique called kitenge–similar to batik–to create clothing. Or rather, a single piece of clothing. 

Zuri's founders, Sandra Zhao and Ashleigh Miller, created a pattern for an outfit that can be worn as a dress, a skirt, a tunic, and a coat. Their idea was to have one versatile garment that would be easy to pack on a trip and would reduce your need for so many clothes. The design has been popular in Kenya, where it is different from traditional clothing silhouettes there, and also in the U.S., where women are drawn to the colorful patterns. Each garment retails for $145. 

The brand, which launched last year, has been growing fast in both continents, selling several hundred products a month. They've recently had to move into a larger factory to keep up with the demand.