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WhatsApp is adding opt-in biometrics to its web and desktop versions

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WhatsApp, the popular messaging app with more than 2 billion users, has been getting a lot of heat and losing users in recent weeks after announcing (and then delaying) changes to how it shares data with its owner Facebook. And it’s not done with how it’s tweaking privacy and security. Now, it’s adding a new biometric feature to the service to bring in a new authentication layer for those using its web and desktop versions.

The company said that from today, it will let people add in a fingerprint, face, or iris scan when to use WhatsApp on desktop or web.

The feature is coming as part of a new look for the desktop versions, ahead of what the company hints will be more updates coming soon.

With the new feature, you will now have the option (not requirement) to add in a biometric login, which uses either a fingerprint, face ID, or iris ID — depending on the device — on Android or iPhone handsets, to add in a second layer of authentication.

When implemented, it will appear for users before a desktop or web version can be linked up with a mobile app account, which today relies just on using a QR code: the QR code doesn’t go away; this is a second step users will need to take, similar to how you can choose to implement two steps of authentication on a handset to use the WhatsApp mobile app today.

WhatsApp says that on iPhone, it will work with all devices operating iOS 14 and above with Touch ID or Face ID, while on Android, it will work on any device compatible with Biometric Authentication (Face Unlock, Fingerprint Unlock or Iris Unlock).

The service is another step forward in WhatsApp creating more feature parity between its flagship mobile apps, and how you interact with the service when you use it elsewhere.

While WhatsApp started as a mobile messaging app, it has over the years been building out other ways of using it, for example adding desktop support in 2015 to the iOS version.

Mobile still accounts for the majority of WhatsApp’s users, but events like global health pandemics, which are keeping more of us inside, are likely leading to a surge of users of its Web and native desktop apps, and so it makes sense for it to be adding more features there.

WhatsApp told TechCrunch that it is going to be adding in more features this year to bring the functionality of the two closer together. There are still big gaps: for example, you can’t make calls on the WhatsApp web version. (That feature may be one coming soon: as of last month, it started to get spotted in beta tests.)

To be extra clear, the biometric service, which is being turned on globally, will be opt-in. Users will need to go to their settings to turn on the feature, in the same way that today they need to go into their settings to turn on biometric authentication for their mobile apps.

What comes next for biometrics?

WhatsApp’s recent announcements about data-sharing changes between it and Facebook have put a lot of people on edge about the company’s intentions. And that’s no surprise. It’s a particularly sensitive issue since messaging has been thought of a very personal and sometimes private space, seen as separate from what people do on more open social networking platforms.

Over the years, however, that view has been eroded through data leaks, group messaging abuse, and (yes) changes in privacy terms.

That means there will likely be a lot of people who will doubt what Facebook’s intentions are here, too.

WhatsApp is pretty clear in outlining that it’s not able to access the biometric information that you will be storing in your device, and that it is using the same standard biometric authentication APIs that other secure apps, like banking apps, use.

But the banking app parallel is notable here, and maybe one worth thinking about more. Consider how the company has been adding a lot more features and functionality into WhatsApp, including the ability to pay for goods and services, and in markets like India, tests to offer insurance and pension products.

Yes, this new biometric feature is being rolled out today to create a more secure way for people to link up apps across devices. But in the interest of that feature parity, in future, it will be interesting to see how and if biometrics might appear as those other features get rolled out beyond mobile, too.

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Yelp puts trust and safety in the spotlight

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Yelp released its very first trust and safety report this week, with the goal of explaining the work that it does to crack down on fraudulent and otherwise inaccurate or unhelpful content.

With focus on local business reviews and information, you might think Yelp would be relatively free of the types of misinformation that other social media platforms struggle with. But of course, Yelp reviews are high stakes in their own way, since they can have a big impact on a business’ bottom line.

Like other online platforms, Yelp relies on a mix of software and human curation. On the software side, one of the main tasks is sorting reviews into recommended and not recommended. Group Product Manager for Trust and Safety Sudheer Someshwara told me that a review might not be recommended because it appears to be written by someone with a conflict of interest, or it might be solicited by the business, or it might come from a user who hasn’t posted many reviews before and “we just don’t know enough information about the user to recommend those reviews to our community.”

“We take fairness and integrity very seriously,” Someshwara said. “No employee at Yelp has the ability to override decisions the software has made. That even includes the engineers.”

He added, “We treat every business the same, whether they’re advertising with us or not.”

Yelp trust and safety report

Image Credits: Yelp

So the company says that last year, users posted more than 18.1 million reviews, of which 4.6 million (about 25%) were not recommended by the software. Someshwara noted that even when a review is not recommended, it’s not removed entirely — users just have to seek it out in a separate section.

Removals do happen, but that’s one of the places where the user operations team comes in. As Vice President of Legal, Trust & Safety Aaron Schur explained, “We do make it easy for businesses as well as consumers to flag reviews. Every piece of content that’s flagged in that way does get reviewed by a live human to decide whether it should should be removed violating our guidelines.”

Yelp says that last year, about 710,000 reviews (4%) were removed entirely for violating the company’s policies. Of those, more than 5,200 were removed for violating the platform’s COVID-19 guidelines (among other things, they prohibit reviewers from claiming they contracted COVID from a business, or from complaining about mask requirements or that a business had to close due to safety regulations). Another 13,300 were removed between May 25 and the end of the year for threats, lewdness, hate speech or other harmful content.

“Any current event that takes place will find its way onto Yelp,” acknowledged Vice President of User Operations Noorie Malik. “People turn to Yelp and other social media platforms to have a voice.”

But expressing political beliefs can conflict with what Malik said is Yelp’s “guiding principle,” namely “genuine, first-hand experience.” So Yelp has built software to detect unusual activity on a page and will also add a Consumer Alert when it believes there are “egregious attempts to manipulate ratings and reviews.” For example, it says there was a 206% increase in media-fueled incidents year-over-year.

It’s not that you can’t express political opinions in your reviews, but the review has to come from first-hand experience, rather than being prompted by reading a negative article or an angry tweet about the business. Sometimes, she added, that means the team is “removing content with a point of view that we agree with.”

One example that illustrates this distinction: Yelp will take down reviews that seem driven by media coverage suggesting that a business owner or employee behaved in a racist manner, but at the same time, it also labeled two businesses in December 2020 with a “Business Accused of Racism” alert reflecting “resounding evidence of egregious, racist actions from a business owner or employee.”

Beyond looking at individual reviews and spikes in activity, Someshwara said Yelp will also perform “sting operations” to find groups that are posting fraudulent reviews.

In fact, his team apparently shut down 1,200 user accounts associated with review rings and reported nearly 200 groups to other platforms. And it just rolled out an updated algorithm designed to better detect and un-recommend reviews coming from those groups.

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Broaden your view of ‘best’ to make smarter, more inclusive investments

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What can we learn from the best 40 venture capital investments of all time? Well, we learn to invest exclusively in men, preferably white or Asian.

We reviewed CB Insights’ global list of “40 of the Best VC Bets of all Time.” All of the 40 companies’ 92 founders were male.

  • Of the 43 U.S.-based founders, 35 were white American; four were white immigrant/first generation, from France, Ukraine, Russia and Iran; and four were Indian immigrant/first generation.
  • Of the 19 Western Europe/Israel-based founders, all were white.
  • Of the 30 Asia-based founders, all were natives of the country in which they built their businesses: 23 Chinese, three Japanese, two Korean and two Indian.

Of course, this dataset is incomplete. There are numerous examples of founders from underrepresented backgrounds who have generated extremely impressive returns. For example, Amazon’s Jeff Bezos is Cuban American; Calendly’s Tope Awotona is Nigerian American; Sendgrid’s Isaac Saldana is Latinx; and Bumble’s Whitney Wolfe Herd is the second-youngest woman to take a company public.

That said, the pattern in the dataset is striking. So, why invest in anyone who’s not a white or Asian male? 

The conventional answer is that diversity pays. Research from BCG, Harvard Business Review, First Round Capital, the Kauffman Foundation and Illuminate Ventures shows that investors in diverse teams get better returns:

  • Paul Graham, cofounder of Y Combinator (2015): “Many suspect that venture capital firms are biased against female founders. This would be easy to detect: among their portfolio companies, do startups with female founders outperform those without? A couple months ago, one VC firm (almost certainly unintentionally) published a study showing bias of this type. First Round Capital found that among its portfolio companies, startups with female founders outperformed those without by 63%.”
  • Kauffman Fellows Report (2020): “Diverse Founding Teams generate higher median realized multiples (RMs) on Acquisitions and IPOs. Diverse Founding Teams returned 3.3x, while White Founding Teams returned 2.5x. The results are even more pronounced when looking at the perceived ethnicity of the executive team. Diverse Executive Teams returned 3.3x, while White Executive Teams only returned 2.0x. As mentioned above, we report realized multiples (RMs) only for successful startups that were acquired or went through the IPO process.”
  • BCG (June 2018): “Startups founded and cofounded by women actually performed better over time, generating 10% more in cumulative revenue over a five-year period: $730,000 compared with $662,000.”
  • BCG (January 2018): “Companies that reported above-average diversity on their management teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity — 45% of total revenue versus just 26%.”
  • Peterson Institute for International Economics (2016): “The correlation between women at the C-suite level and firm profitability is demonstrated repeatedly, and the magnitude of the estimated effects is not small. For example, a profitable firm at which 30 percent of leaders are women could expect to add more than 1 percentage point to its net margin compared with an otherwise similar firm with no female leaders. By way of comparison, the typical profitable firm in our sample had a net profit margin of 6.4 percent, so a 1 percentage point increase represents a 15 percent boost to profitability.”

How do we reconcile these two sets of data? Research going back a decade shows that diverse teams, companies and founders pay, so why are all of the VC home runs from white men, or Asian men in Asia, plus a few Asian men in the U.S.?

First Round did not include their investment in Uber in their analysis we reference above on the grounds that it was an outlier. Of course, one could rebut that by saying traditional VC is all about investing in outliers.

  • Seth Levine analyzed data from Correlation Ventures (21,000 financings from 2004-2013) and writes that “a full 65% of financings fail to return 1x capital. And perhaps more interestingly, only 4% produce a return of 10x or more, and only 10% produce a return of 5x or more.” In Levine’s extrapolated model, he found that in a “hypothetical $100M fund with 20 investments, the total number of financings producing a return above 5x was 0.8 – producing almost $100M of proceeds. My theoretical fund actually didn’t find their purple unicorn, they found 4/5ths of that company. If they had missed it, they would have failed to return capital after fees.”
  • Benedict Evans observes that the best investors don’t seem to be better at avoiding startups that fail. “For funds with an overall return of 3-5x, which is what VC funds aim for, the overall return was 4.6x but the return of the deals that did better than 10x was actually 26.7x. For >5x funds, it was 64.3x. The best VC funds don’t just have more failures and more big wins —  they have bigger big wins.”

The first problem with the outlier model of investing in VC is that it results in, on average, poor returns and is a risker proposition compared to alternative models. The Kauffman Foundation analyzed their own investments in venture capital (100 funds) over a 20-year period and found “only 20 of the hundred venture funds generated returns that beat a public-market equivalent by more than 3% annually,” while 62 “failed to exceed returns available from the public markets, after fees and carry were paid.”

The outlier model of investing in VC also typically results in a bias toward investing in homogeneous teams. We suggest that the extremely homogeneous profiles of the big wealth creators above reflect the fact that these are people who took the biggest risks: financial, reputational and career risk. The people who can afford to take the biggest risks are also the people with the most privilege; they’re not as concerned about providing for food, shelter and healthcare as economically stressed people are. According to the Kauffman Foundation, a study of “549 company founders of successful businesses in high-growth industries, including aerospace, defense, computing, electronics and healthcare” showed that “more than 90 percent of the entrepreneurs came from middle-class or upper-lower-class backgrounds and were well-educated: 95.1 percent of those surveyed had earned bachelor’s degrees, and 47 percent had more advanced degrees.” But when you analyze the next tier down of VC success, the companies that don’t make Top 40 lists but land on Top 500 lists, you see a lot more diversity.

In VC, 100x investment opportunities only come along once every few years. If you bet your VC fund on opportunities like that, you’re relying on luck. Hope is not a strategy. There are many 3x-20x return opportunities, and if you’re incredibly lucky (or Chris Sacca), you might get one 100x in your career.

We prefer to invest based on statistics, not luck. That’s why Versatile VC provides companies with the option of an “alternative-VC” model, using a non-traditional term sheet designed to better align incentives between investors and founders. We also proactively seek to invest in diverse teams. Given the choice of running a fund with one 100x investment, or a fund with two 10x investments, we’ll take the latter. The former implies that we came perilously close to missing our one home run, and therefore we’re not doing such a great job investing.

“While we all want to have invested in those exciting home-runs/unicorns, most investors are seeking the data points to construct reliable portfolios,” Shelly Porges, co-founder and managing partner of Beyond the Billion, observed. “That’s not about aiming for the bleachers but leveraging experience to reliably deliver on the singles and doubles it takes to get to home base. A number of the institutional investors we’ve spoken to have gone so far as to say that they can no longer meet their targets without alternatives, including venture investments. “

Lastly, the data above reflects companies that typically took a decade to build. As the culture changes, we anticipate that the 2030 “Top 40” wealth creators list will include many more people with diverse backgrounds. Just in 2018, 15 unicorns were born with at least one woman founder; in 2019, 21 startups founded or co-founded by a woman became unicorns. Why?

  • “All else being equal, a larger pool of female-founded companies to select from for VC investing should increase the odds of a higher number of female-founded VC home runs,” said Michael Chow, research director for the National Venture Capital Association and Venture Forward. According to PitchBook, investments in women-led companies grew approximately 54 percent from 2015 to 2019, from 459 to 709. In the first three quarters of 2020, there have been 468 fundings of women-led companies; this figure beats 2015, 2016 and nearly 2017 total annual fundings. ProjectDiane highlights that from 2018 to 2020, the number of Black women who have raised $1 million in venture funding nearly tripled, and the number of Latinx women doubled. Their average two-year fail rate is also 13 percentage points lower than the overall average.
  • “Millennials value a diverse workforce,” Chow added, according to Gallup and Deloitte Millennial surveys. “In the battle for talent, diverse founders may have the edge in attracting the best and brightest, and talent is what is required for going from zero to one.”
  • The rise in popularity of alternative VC models, which are disproportionately attractive to women and underrepresented founders. We are in the very early days of this wave; according to research by Bootstrapp, 32 U.S. firms have launched an inaugural Revenue-Based Finance fund. Clearbanc notes on their site they have “invested in thousands of companies using data science to identify high-growth funding opportunities. This data-driven approach takes the bias out of decision making. Clearbanc has funded 8x more female founders than traditional VCs and has invested in 43 states in the U.S. in 2019.”
  • More VCs are working proactively to market to underrepresented founders. Implicit biases are robust and pervasive; it takes a proactive and intentional approach to shift the current status quo of funding,” Dreamers & Doers Founder Gesche Haas said. Holly Jacobus, an investment partner at Joyance Partners and Social Starts, noted that “we’re proud to boast a portfolio featuring ~30% female founders in core roles —  well above the industry average —  without specific targeting of any sort. However, there is still work to be done. That’s why we lean heavily on our software and CEOs to find the best tech and teams in the best segments, and we are always actively working on improving the process with new systems that remove bias from the dealflow and diligence process.”

Thanks to Janet Bannister, managing partner, Real Ventures, and Erika Cramer, co-managing member, How Women Invest, for thoughtful comments. David Teten is a past Advisor to Real Ventures.

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Facebook launches BARS, a TikTok-like app for creating and sharing raps

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Facebook’s internal R&D group, NPE Team, is today launching its next experimental app, called BARS. The app makes it possible for rappers to create and share their raps using professionally created beats, and is the NPE Team’s second launch in the music space following its recent public debut of music video app Collab.

While Collab focuses on making music with others online, BARS is instead aimed at would-be rappers looking to create and share their own videos. In the app, users will select from any of the hundreds of professionally created beats, then write their own lyrics and record a video. BARS can also automatically suggest rhymes as you’re writing out lyrics, and offers different audio and visual filters to accompany videos as well as an autotune feature.

There’s also a “Challenge mode” available, where you can freestyle with auto-suggested word cues, which has more of a game-like element to it. The experience is designed to be accommodating to people who just want to have fun with rap, similar to something like Smule’s AutoRap, perhaps, which also offers beats for users’ own recordings.

Image Credits: Facebook

The videos themselves can be up to 60 seconds in length and can then be saved to your Camera Roll or shared out on other social media platforms.

Like NPE’s Collab, the pandemic played a role in BARS’ creation. The pandemic shut down access to live music and places where rappers could experiment, explains NPE Team member DJ Iyler, who also ghostwrites hip-hop songs under the alias “D-Lucks.”

“I know access to high-priced recording studios and production equipment can be limited for aspiring rappers. On top of that, the global pandemic shut down live performances where we often create and share our work,” he says.

BARS was built with a team of aspiring rappers, and today launched into a closed beta.

Image Credits: Facebook

Despite the focus on music, and rap in particular, the new app in a way can be seen as yet another attempt by Facebook to develop a TikTok competitor — at least in this content category.

TikTok has already become a launchpad for up-and-coming musicians, including rappers; it has helped rappers test their verses, is favored by many beatmakers and is even influencing what sort of music is being made. Diss tracks have also become a hugely popular format on TikTok, mainly as a way for influencers to stir up drama and chase views. In other words, there’s already a large social community around rap on TikTok, and Facebook wants to shift some of that attention back its way.

The app also resembles TikTok in terms of its user interface. It’s a two-tabbed vertical video interface — in its case, it has  “Featured” and “New” feeds instead of TikTok’s “Following” and “For You.” And BARS places the engagement buttons on the lower-right corner of the screen with the creator name on the lower-left, just like TikTok.

However, in place of hearts for favoriting videos, your taps on a video give it “Fire” — a fire emoji keeps track. You can tap “Fire” as many times as you want, too. But because there’s (annoyingly) no tap-to-pause feature, you may accidentally “fire” a video when you were looking for a way to stop its playback. To advance in BARS, you swipe vertically, but the interface is lacking an obvious “Follow” button to track your favorite creators. It’s hidden under the top-right three-dot menu.

The app is seeded with content from NPE Team members, which includes other aspiring rappers, former music producers and publishers.

Currently, the BARS beta is live on the iOS App Store in the U.S., and is opening its waitlist. Facebook says it will open access to BARS invites in batches, starting in the U.S. Updates and news about invites, meanwhile, will be announced on Instagram.

Facebook’s recent launches from its experimental apps division include Collab and collage maker E.gg, among others. Not all apps stick around. If they fail to gain traction, Facebook shuts them down — as it did last year with the Pinterest-like video app Hobbi.

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