Thursday, July 20, 2017

Facebook may begin testing a paywall for selected media stories as soon as October

Facebook could begin testing a paywall for subscription news stories as early as October, according to a top company executive.

Campbell Brown, who heads up the social network’s new partnerships business, made the reveal at the Digital Publishing Innovation Summit on Tuesday, The Street reported. We have independently confirmed that, too.

“We are in early talks with several news publishers about how we might better support subscription business models on Facebook. As part of the Facebook Journalism Project, we are taking the time to work closely together with our partners and understand their needs,” Brown told TechCrunch in a statement via a spokesperson.

The project is still in its infancy, and it may be subject to change, but TechCrunch understands that the current plan is to work with a handful of publishers to introduce a system that would limit free viewing to 10 articles per month, as Digiday previously reported. After viewing 10 articles from the media company, a user would be promoted to sign up for a subscription to that publication or log into an active one.

That number is rigid at 10, despite the fact that publishers that operate a paywall allow varying numbers of free articles for visitors per month. A source to Facebook said the number would be the same across all partners to ensure consistency for users.

The source stressed that Facebook would allow participating media partners to maintain full control over which stories are locked behind the paywall and which aren’t, and full control of their subscriber data, too. At this point it is unclear exactly what access to reading data and history, which can help increase engagement, the media partners would get.

Equally, it isn’t clear how payment will be taken for subscribers who sign up via the Facebook paywall. Digiday reports the social network is considering bypassing Google Play and Apple’s App Store to avoid the mandatory 30 percent cut that each operator takes from digital payments. That may require a mobile web payment option, which would add friction to the user experience, potentially impacting the effectiveness of the program.

There’s certainly much to be confirmed. For one thing, which media firms will participate.

Facebook remains in talks with prospective partners, some of which have had one-on-one briefings while others were engaged via roundtables staged in New York and Paris last week. All being well, our source said that Facebook will look to broaden the paywall feature to more users next year, but there’s some way to go before that happens.

Featured Image: Bryce Durbin/TechCrunch

Lions and lambs: can you solve this classic game theory puzzle?

How many lions does it take to kill a lamb? The answer isn’t as straightforward as you might think. Not, at least, according to game theory.

Game theory is a branch of maths that studies and predicts decision-making. It often involves creating hypothetical scenarios, or “games”, whereby a number of individuals called “players” or “agents” can choose from a defined set of actions according to a series of rules. Each action will have a “pay-off” and the aim is usually to find the maximum pay-off for each player in order to work out how they would likely behave.

This method has been used in a wide variety of subjects, including economics, biology, politics and psychology, and to help explain behaviour in auctions, voting and market competition. But game theory, thanks to its nature, has also given rise to some entertaining brain teasers.

One of the less famous of these puzzles involves working out how players will compete over resources, in this case hungry lions and a tasty lamb. A group of lions live on an island covered in grass but with no other animals. The lions are identical, perfectly rational and aware that all the others are rational. They are also aware that all the other lions are aware that all the others are rational, and so on. This mutual awareness is what’s referred to as “common knowledge”. It makes sure that no lion would take a chance or try to outsmart the others.

Naturally, the lions are extremely hungry but they do not attempt to fight each other because they are identical in physical strength and so would inevitably all end up dead. As they are all perfectly rational, each lion prefers a hungry life to a certain death. With no alternative, they can survive by eating an essentially unlimited supply of grass, but they would all prefer to consume something meatier.

One day, a lamb miraculously appears on the island. What an unfortunate creature it seems. Yet it actually has a chance of surviving this hell, depending on the number of lions (represented by the letter N). If any lion consumes the defenceless lamb, it will become too full to defend himself from the other lions.

Assuming that the lions cannot share, the challenge is to work out whether or not the lamb will survive depending on the value of N. Or, to put it another way, what is the best course of action for each lion – to eat the lamb or not eat the lamb – depending on how many others there are in the group.

N=3. Shutterstock

The solution

This type of game theory problem, where you need to find a solution for a general value of N (where N is a positive whole number), is a good way of testing game theorists’ logic and of demonstrating how backward induction works. Logical induction involves using evidence to form a conclusion that is probably true. Backward induction is a way of finding a well-defined answer to a problem by going back, step-by-step, to the very basic case, which can be solved by a simple logical argument.

In the lions game, the basic case would be N=1. If there was only one hungry lion on the island it would not hesitate to eat the lamb, since there are no other lions to compete with it.

Now let’s see what happens in the case of N=2. Both lions conclude that if one of them eats the lamb and becomes too full to defend itself, it would be eaten by the other lion. As a result, neither of the two would attempt to eat the lamb and all three animals would live happily together eating grass on the island (if living a life solely dependent on the rationality of two hungry lions can be called happy).

For N=3, if any one of the lions eats the lamb (effectively becoming a defenceless lamb itself), it would reduce the game to the same scenario as for N=2, in which neither of the remaining lions will attempt to consume the newly defenceless lion. So the lion that is closest to the actual lamb, eats it and three lions remain on the island without attempting to murder each other.

And for N=4, if any of the lions eat the lamb, it would reduce the game to the N=3 scenario, which would mean that the lion that ate the lamb would end up being eaten itself. As none of the lions want that to happen, they leave the lamb alone.

Essentially, the outcome of the game is decided by the action of the lion closest to the lamb. For each integer N, the lion realises that eating the lamb would reduce the game to the case of N-1. If the N-1 case results in the survival of the lamb, the closest lion eats it. Otherwise, all the lions let the lamb live. So, following the logic back to the base case every time, we can conclude that the lamb will always be eaten when N is an odd number and will survive when N is an even number.

CEOs at Major US Firms Earn 271 Times as Much as Employees

A study by the Economic Policy Institute says the chief executive officers of America’s largest firms were paid an average of $15.6 million each in 2016.

In a report published Thursday, authors Lawrence Mischel and Jessica Schieder say that amount is 271 times as much as a “typical” worker’s earnings at those same corporations.

That boss-to-worker pay ratio is slightly lower than it has been in the past few years, but is still “light years” higher than the 20-to-1 gap between workers and bosses in 1965, or the 59-to-1 difference that was measured in 1989.

CEOs’ pay has grown far faster than typical workers’ earnings in recent decades, and it also has increased at a much faster rate than stock-market valuations for those same companies.

Compensation figures include salary, the right to buy stock at certain prices, and bonuses, according to EPI, which is a nonpartisan think tank that focuses on the concerns of low- and middle-income workers.

The website said CEOs are highly paid because their skills and responsibilities are “extreme,” and there is a limited number of people who can perform these functions.

At the other end of the economic spectrum, meanwhile, the lowest paid full-time U.S. workers get a minimum wage of just over $15,000 a year. While most workers earn more, and many states have a higher minimum wage, those on the bottom rung earn around 1/1,000 as much as top-level CEOs.

The U.S. national minimum wage of $7.25 per hour has not been increased in eight years. A group called Business for a Fair Minimum Wage contends inflation during that period has cut the value of those already-low wages by about 15 percent.

While many businesses argue that raising the minimum wage will result in fewer jobs at the lower end of the economic spectrum, Business for a Fair Minimum Wage said higher wages for the lowest-paid workers could stimulate demand and help the economy.

NerdWallet has laid off 9 percent of its workforce this year

NerdWallet, a personal finance company, laid off six people from its marketing team this week, TechCrunch learned and has since confirmed with NerdWallet. This latest round of layoffs means NerdWallet has cut nine percent of its workforce this year.

Back in April, NerdWallet laid off more than 40 people, which represented eight percent of their staff. As part of the changes in April, NerdWallet VP of growth Henry Hsu left the company and NerdWallet COO Dan Yoo moved into an advisory role.

The layoffs this week were part of the reorganization that NerdWallet began in April, CEO Tim Chen told TechCrunch via email.

“This move helps to right-size Marketing to a team of 36 Nerds and it ensures our resources are allocated optimally across the company,” Chen said. “Our strategic resource allocation also includes the addition of 41 new hires since April, with focused recruiting in the areas of product, engineering, and design.”

Despite the layoffs, Chen says NerdWallet is still growing and is “financially strong.” Regarding NerdWallet’s remaining workforce of 444 people, Chen says “there are no more planned layoffs in the foreseeable future.”

NerdWallet has raised $69 million in funding, with its most recent round coming in May 2015 from Institutional Venture Partners.

Facebook ‘Groups for Pages’ unlocks fan clubs

With Facebook’s newest feature, a musician could run an on-site fan club, a brand could organize its ambassadors and a newspaper could discuss articles with just its top readers. Today Facebook globally launched Groups for Pages, allowing the 70 million Pages on Facebook to create their own distinct communities and feeds.

Facebook first quietly tested the feature in March, but today Chief Product Officer Chris Cox announced the feature’s full roll-out. Mentioning how one of The Washington Post’s reporters started a group called PostThis for its journalists and most loyal readers, Cox wrote “This is one of thousands of interesting examples we heard of super-fans who wanted to be a part of the day-to-day discussion of the decisions inside the walls of an organization they care about, and more importantly to connect with everyone else who felt the same way.”

The launch could further Facebook’s new mission statement to “bring the world closer together” and push it toward its goal to grow the membership of “meaningful groups” from 100 million now to 1 billion in the future.

Users can look at a Page’s Groups shortcut for any communities they’ve created. Pages can link an existing Group to their Page in addition to launching new ones.

For years, Facebook pushed people to create lists of specific friends to share different posts with, or to just fully embrace “openness” and share publicly. But it seems to have realized that people’s values and interests don’t always align with their geographic communities, or even their closest friends. Since the News Feed prioritizes showing content that gets lots of clicks and Likes, niche content could often fall flat and reach few people. Plus there’s the issue that Trump’s polarization of the United States has made sharing political content to Facebook a minefield of angry relatives and extremist high school classmates.

By pushing users to join and participate in Groups, Facebook gives them homes for the different sides of their prismatic identities. If you define yourself by the band you listen to every day, the brand you wear or the person you vote for, your enthusiastic posts about them might get a more positive and less contentious reception inside a Facebook Group.

Panels Implicated in London Apartment Fire Also Used in US

In promotional brochures, a U.S. company boasted of the “stunning visual effect” its shimmering aluminum panels created in an NFL stadium, an Alaskan high school and a luxury hotel along Baltimore’s Inner Harbor that “soars 33 stories into the air.”

Those same panels — Reynobond composite material with a polyethylene core — also were used in the Grenfell Tower apartment building in London. British authorities say they’re investigating whether the panels helped spread the blaze that ripped across the building’s outer walls, killing at least 80 people.

The panels, also called cladding, accentuate a building’s appearance and improve energy efficiency. But they are not recommended for use in buildings above 40 feet because they are combustible. In the wake of last month’s fire at the 24-story, 220-foot-high tower in London, Arconic Inc. announced it would no longer make the product available for high-rise buildings.

Which buildings used it?

Determining which buildings might be wrapped in the material in the United States is difficult. City inspectors and building owners might not even know. In some cases, building records have been long discarded and neither the owners, operators, contractors nor architects involved could or would confirm whether the cladding was used.

That makes it virtually impossible to know whether the Baltimore Marriott Waterfront hotel or Cleveland Browns’ football stadium, both identified by Arconic’s brochures as wrapped in Reynobond PE, are actually clad in the same material as Grenfell Tower, which was engulfed in flames in less than five minutes.

“If the materials used on a building appear similar to a known hazard, people need to know that,” said Douglas Evans, a fire protection engineer from Las Vegas, who has been studying fires on the exterior facades of buildings for nearly 25 years. “Anybody who is inside of these buildings has a right to know.”

States, cities can set own building rules

The International Building Code adopted by the U.S. requires more stringent fire testing of materials used on the sides of buildings taller than 40 feet. However, states and cities can set their own rules, said Keith Nelson, senior project architect with Intertek, a worldwide fire testing organization.

The National Fire Protection Association conducts fire resistance tests on building materials to determine whether they comply with the international code. Robert Solomon, an engineer with the association, told the AP that the group’s records show the U.S.-made Arconic panels never underwent the tests. For that reason, he said, the group considered the products unsafe for use in buildings higher than 40 feet.

Tests conducted by the British government after the Grenfell fire found samples of cladding material used on 75 buildings failed combustibility tests.

Solomon said the use of Reynobond PE on the Baltimore Marriott and the city-owned Cleveland Browns stadium in particular should be reviewed because of their height.

Arconic height warning

On buildings that are “higher than the firefighters’ ladders,” incombustible material must be used, Arconic advises in a fire-safety pamphlet. It warns that choosing the right product is crucial “in order to avoid the fire to spread to the whole building” and that fire can spread extremely rapidly “especially when it comes to facades and roofs.”

No one has declared the U.S. buildings unsafe, nor has the U.S. government initiated any of the widespread testing of aluminum paneling that British authorities ordered after the London disaster.

Arconic declined to give further details about the buildings in the brochure, and hasn’t said how many U.S. buildings contain the product.

The company is cooperating with building owners and others involved, such as the Baltimore hotel, spokesman Steven Lipin said. The product is “certified for use in the UK and US” and the company “will continue to be here to answer any questions about its products,” Lipin said in a statement to the AP.

He did not indicate whether Arconic is contacting all the contractors, builders and others that used the material.

One option for building owners who are unsure of the product’s use would be to remove a section of paneling and have it tested at a lab, said Vickie Lovell, president of InterCode Inc., a consulting firm on building codes and standards.

Building records gone

Building records kept by cities can include construction blueprints, inspection logs and fire safety plans. But local agencies don’t require that an applicant seeking a building permit submit a list of materials or specific products. In the case of the Marriott, Baltimore’s housing department holds the building’s original plans, which don’t say what cladding was used.

The architect of record would have known what materials were used during construction. But Peter Fillat, an architect who worked on the 2001 Marriott construction, said he destroyed his records pertaining to the property six years ago because his contract requires him to keep files for only 10 years.

Construction and contracting firms that worked on the Marriott also said they no longer had those records.

For decades, the U.S. has required sprinkler systems to be installed in new high-rise buildings, as well as multiple ways for people to exit in the case of a fire. Grenfell Tower had none of those safeguards.

But fire safety experts caution that indoor sprinklers can’t stop a fire that ignites on a building’s exterior and spreads across the coating that encases it.

The danger is that “the whole outside of your building could be on fire, yet the internal sprinkler heads may never activate!” Oklahoma fire safety consultant John Valiulis wrote in a 2015 research report on the flammability of exterior walls. He pointed to high-rise fires that began on building exteriors where indoor sprinklers were completely ineffective at stopping flames from racing up the outside walls.

Run your startup the Toyota way

Toyota is known for its manufacturing efficiency. We’ve probably all heard that if a worker on the Camry line sees a problem, they have the authority to stop the line and address it. At the end of the day, teams meet to discuss what went wrong and what fixes actually fixed things. It’s called the Toyota Production System, or TPS, and, like any tech cult, it’s got lots of lingo and acronyms. (Try throwing around “Let’s kaizen this” if you want to seem in the know.) But it also can work for a startup as easily as it can work for the massive automotive manufacturer.

Jamie Bonini, the vice president of the Toyota Production System Support Center, preaches the TPS gospel to organizations in North America and, recently, Australia. He’s worked with small manufacturers, hospitals and government agencies to teach them how to use Toyota’s principles in their particular settings. “You start with the customer,” Bonini said during a panel at the Aspen Ideas Festival. “Are they getting what they want? Then you work back from there.”

The point of TPS is to create a culture where problems are not repeated in order to achieve the end goal of improving quality. That’s as applicable to apps as it is to automobiles. In an interview after the panel, Bonini outlined the basics of the system, which has three parts:

  • The philosophy that the customer needs to be served by the process and that the people who create the widget — whether that’s a car or a car-sharing app — are the most valuable resource in the organization.

  • The use of tech tools to establish flow through entire organization — and to halt that flow when necessary. Managers need to develop their teams so that the people closest to the problem can solve that problem.

  • The application of engineering and design to understand that flow, from the overall project plan to the precise sequence of steps required to complete a task. This can be reviewed every day or every week, but it needs to be revisited often.

These pillars, Bonini said, are “timeless.” Advanced technology can make the TPS system work better, but the focus on people — both those in the organization and the customer at the end of the process — remains an important part of the triangle.

“All three pieces of TPS must work,” Bonini said. “A lot of business leaders have never heard of all three pieces; they put all their emphasis on the tech tools.” Whether you’re in a 10-person startup or a 1,000-employee hospital, these three principals should work together to create a culture of trust and innovation.

Oh, and kaizen, for the record, is the process of changing things for the better, or in business terms, continuously improving the system at every step and every level.

Featured Image: Toyota


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