Posted by Michael Arrington

Feb 08 2012
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Data Status: Nuked

Good for Path – In response to the address book issue from yesterday that sent the tech press into a romper room hissy fit (no offense, hissy fits are fun sometimes), they’ve decided to take the very simple and most effective remedy: nuking all the data.

Path’s blog post on the decision is here.

This is exactly what I recommended yesterday, although Path had come to the same conclusion independently. I had reached out to CEO Dave Morin before I posted last night but didn’t reach him. But we spoke very early this morning and he told me that they had already begun deleting all the data, well before I wrote my post, and would announce it later today.

As my partner MG Siegler says, there was absolutely nothing nefarious about this, but it shouldn’t have happened regardless.

I’m extremely proud of the way the company handled itself yesterday and today, and I’m more proud than ever to be an investor. Companies (people) screw up all the time. It’s how they handle themselves in a crisis that shows what they’re really made of.

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  • Feb 08 2012
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    Hey Path, Just Nuke All The Data

    spacer The story of the day is definitely about Path (a CrunchFund portfolio company). The company has been copying address book information to their servers without user knowledge.

    The company was apparently already aware of the issue and was taking steps to address it prior to this post coming out. The Android app has an opt-in, and a version of the app with an opt-in is awaiting approval at Apple, says CEO Dave Morin in the comments to the original post. Morin has also flat out apologized.

    This is a common problem with apps, due in large part to the fact that Apple doesn’t consider the data as sensitive as, say, location information. To get location info the app must alert the user and get their permission on screen. There’s no such requirement for address book data.

    There’s an app coming that allows users on jailbroken phones to monitor and intercept when address book information is being exported, at least when it’s being done in the most common way.

    But What About Path

    A lot of users just don’t care about their address book integrity, they know that it’s been exploited, repurposed, shared and siloed for a long, long time. The argument that Facebook has always made is that it isn’t really your data since it includes personal information of others. So it isn’t really yours to control. The only way that mess ever gets sorted out is the courts, after a lot of guided lobbying-fueled meddling (or lack of meddling) in the legislative branch.

    But back to Path. Their apps should soon be opt-in only for address book data, and a lot of users will want to send it to help Path find your friends and invite them to the service. Users can also ask Path to remove the data immediately – “In the meantime, if you would like your data deleted from our servers please contact our service team at service@path.com.”

    Which is nice, but I’m wondering if there’s a better solution to this. Path should just state that they’re nuking all collected address book data for all users right now. Remove it from their servers entirely.

    It definitely sends the right message to users – you can trust this company with your data. They’ve apologized and they were already in the process of fixing the issue. It seems like the perfect last piece is to remove all that data from their servers. And I doubt it’ll take them all that much time to collect the data all over again, this time with user permission.

    And in the meantime, perhaps Apple will begin to protect address book data as closely as they do location data, which would eliminate this problem for users on all apps in the future.

    Update: Data nuked.

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  • Feb 02 2012
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    Apple Tells Developers To Stop Using White iPhone Images

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    Recently a startup I know was heavily pressured by Apple to change their iOS app marketing material. The problem? The app was shown with a white iPhone image on their website.

    That’s the first I’ve ever heard of Apple freaking out over the color of the iPhone skin in third party marketing materials. I asked a bunch of app developers if they’d ever heard about this, and none of these other developers had. And some prominent apps, like Flipboard and Path, use the white iPhone on their sites.

    Apple has clear guidelines on the use of ios device images. There’s no specific rule about using only black device images, but there is a requirement that only approved images can be used. All of those approved images are black.

    The private written communications I’ve seen from Apple, though, are quite clear on the restriction. In verbal communications they’ve said that they’re reserving use of the white iPhone for their own marketing materials.

    Any other app developers out there that have been pressured by Apple to only use black device images? Dalton Caldwell, the CEO of App.net, works with thousands of developers to help them market their apps. He says he hasn’t heard a word about this. They may, soon.

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  • Jan 31 2012
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    Inspirato Sure Is Making CrunchFund Look Good

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    Luxury vacation home startup Inspirato (affiliate link, see below) has closed another round of financing – $20 million from Institutional Venture Partners, at a rumored valuation that’s significantly higher than the last round of funding closed last October.

    This is a significant up round for one of our portfolio companies, and we’re proud to be part of the team.

    Our investment last year wasn’t typical for CrunchFund. Most of our investments are in very early stage, often pre-launch, startups. But we’ve earmarked 20% or so of our fund for later stage investments that we see as extremely opportunistic. Inspirato, a company I’ve been tracking since it launched in February 2011, is exactly the kind of company we like to back. We appreciate Kleiner Perkins’ willingness to allow our relatively small investment in the round that they led.

    It’s amazing to think of Inspirato as “later stage” when it’s less than a year old, but the company has been absolutely killing it. They take out long term leases on luxury vacation properties and then rent those properties to users at prices that are significantly lower than they can get elsewhere. You can often get a 4-5 bedroom house for about the same price as you pay for a normal room at a Four Seasons. If you’re traveling with a family or friends, it is far less expensive to use Inspirato than even more moderately priced hotels.

    This model – “luxury for less” – clearly resonates with customers.

    There is a membership fee for Inspirato, and a yearly fee. The company looks to those fees to provide the bulk of operating margins, which allows them to continue to offer rentals at a significantly discounted rate. Cofounder Brad Handler has referred to this as the “Costco model,” where Costco makes money off membership fees while keeping margins on retail goods extremely low.

    Now about that affiliate link. As I explained in my blog post when CrunchFund first invested, Inspirato offers its members a $1,000 credit for convincing new users to join. If you sign up with my affiliate link I’ll simply transfer that credit to you. A lot of my friends have already signed up, and I’m happy to give away the credit. We’ll make it up, after all, as investors.

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  • Jan 20 2012
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    Big Government Sucks Tech Industry Into Their Reality

    SOPA/PIPA is on the ropes. Senator Reid postponed a vote on the Senate’s version of the bill next Tuesday, and MPAA CEO Chris Dodd is backtracking and humbled.

    Yay. We did it, or nearly have.

    But Hollywood still has dozens of laws on the books criminalizing file sharing (read this post by attorney Andrew Bridges pointing out how ridiculous the laws are compared to things like jumping the turnstile on the subway.

    Congress is the real winner here. They showed that they can and will pass bills that will cause irreparable harm to the tech industry just because Hollywood is willing to pay them off with huge lobbying dollars. And while SOPA/PIPA may be stalled for now, a big part of the reason is that tech companies got into the lobbying game, too.

    From that NY Times article:

    Data shows that copyright holders and supporters of the bills outspent opponents substantially in the early stages of the debate. But by many accounts the tech industry has stepped up its lobbying efforts in recent weeks. New spending reports expected shortly indicate whether the balance has shifted.

    That’s right, slowly but surely, Congress is sucking the tech industry into their world, making us play by their rules. We have to pay them off, literally with cash, or we get slaughtered.

    I wrote about how slippery a slope this is, and hoped that we could put it off for as long as possible – see If We Play By Big Government Rules, We’ve Lost.

    Well, we’re now playing by big government rules. Congress can set up a fight pit with Hollywood in one corner and Silicon Valley in the other. Who cares what happens. The money will just roll right in.

    This is how criminal organizations run protection rackets. Congress is doing just that, only it’s completely legal.

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  • Jan 16 2012
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    Sarah Lacy Launches Pando Daily, Your New Favorite News Site

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    Sarah Lacy’s new tech news site Pando Daily launches today. Right now, actually.

    I remember the first time I met Sarah Lacy in 2006. She was writing cover stories for Business Week at the time, hitting sources hard in the lobby of a San Francisco hotel after a conference (Web 2.0 Summit, I think) had ended for the day and people were streaming out looking for a drink. My first impression of her was, “now that’s a reporter.”

    Those were the early days of TechCrunch, when I wrote whatever I felt like writing with absolutely no idea of the “rules.” Guys like Jeff Jarvis, Robert Scoble and Dave Winer were rooting me on, so I was doing something right. And a lot of old school journalists were screaming murder, so that made me doubly sure.

    And Lacy certainly oozed old school. Like a black and white movie and she had a press card stuck in her fedora. That crowd usually thought of TechCrunch as the antichrist. But she was also one of the new gang, one of the journalists who really understood what makes Silicon Valley tick, and was always willing to give new entrepreneurs and startups a break. As I began to follow her writing I saw that she had deep access to sources and a sound, logical mind to put together compelling stories. Most importantly, she loved to teach the new writers on the way to get results and write compelling content.

    I knew almost immediately that I’d be spending a lot of time trying to hire Ms. Lacy.

    Some years later, I did. She was finishing up work on her second book and was looking for a full time writing gig that could accomodate her book travel schedule. We found a way to make it work, and Lacy joined TechCrunch.

    She was immediately integrated into the TechCrunch DNA. She was a solid editorial leader, broke huge stories, and had a commanding stage and camera presence. And best of all, she disagreed with just about everything I had to say. We fought like cats and dogs. And she is literally a cat person, while I can stand the evil little predators. Dogs and unconditional slobbery love all the way for me.

    When TechCrunch imploded last year and I walked away from the company that I founded, Lacy was in a prime position to take over. She had my and Heather Harde’s support to become editor in chief of the site. The only problem was she was on maternity leave and wouldn’t be returning for a couple of months. So the decision was put on hold as she cared for her son Eli.

    Internal strife and power struggles at AOLCrunch meant Lacy would not be accepting that job, although she did return briefly during maternity leave to host the highly successful TechCrunch China event last Fall.

    Pando Daily

    Now, Sarah’s where she’s supposed to be. The star of her own show, Pando Daily. Which launches today. The name is from some tree ecosystem in Utah that has a root system that makes it one big organism. The point is that the trees and the roots are like Silicon Valley. Whatever.

    Sarah could call her new site anything she likes and it would still be something amazing and special. She talks about taking the best parts of TechCrunch – the relentless quest for the story that matters most that day, the loyalty to readers and the community, and something else – a competitive hunger that made her want to throw computers through windows when something slipped by her. That was rare, and I never saw her throw a computer, but I know she wanted to.

    Much more often, though, Sarah was one (or ten) steps ahead of her competition and not only broke the story but worked it over and over until she’d bled every last drop of blood out of it. I hope to never be on the other end of a Sarah Lacy story, because I get the feeling she’d do anything to get the facts she wants.

    Pando Daily has a single overriding goal – to be the paper of record for Silicon Valley. That means every story of importance will be covered with an unbiased look at the facts. Along with a healthy dose of the analysis that you’ve already come to expect from her and the people she works with.

    There’s a big void in Silicon Valley right now, and I believe readers are aching for something to fill that void. Pando Daily is going to do that.

    She’s raised an amazing round of funding from Marc Andreessen, Peter Thiel, Tony Hseih, Zach Nelson, Andrew Anker, Chris Dixon, Saul Klein, Josh Kopelman and Matt Cohler, all investing as individuals. Also investing are a handful of seed funds including CrunchFund, Greylock Discovery Fund, Accel’s Seed Fund, Menlo Ventures Talent Fund, Lerer Ventures, SV Angels and Ooga Labs.

    We’re proud to be investing in Pando Daily. CrunchFund will be very active in this investment, taking a board seat and contributing regularly to the site.

    Good luck, Sarah. And Happy Launch Day.

    More from MG Siegler, TechMeme, AllThingsD, GigaOm, BusinessInsider and AdAge.

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  • Jan 15 2012
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    Delta Flight 1642 SEA To JFK Did Not Suck Nearly As Much As I Thought It Would

    spacer Delta Airlines. DELTA. Just that word raises my blood pressure. After a decade of below average flying experiences on that airline, the fan really hit the poop in 2010 on flight 1843 from JFK to Hell.

    A joyless staff told me I couldn’t bring a very reasonably sized carry on to the plane, citing FAA regulations (that they made up on the spot) (it fit very nicely in the overhead). When I said I was in first class they relented, which is when I understood how bad the service was. What class you’re in has no official bearing on the size of your carry on. That’s all FAA rules, supposedly.

    Anyhow, on that flight back they just lost my checked bag (lost everyone in first’s checked bags) and refused to deliver the bags to my home once they figured out where they were. I had to pay them a (large) fee to fedex it a few days later.

    All of that, combined with a really low budget, cramped and dirty internal layout that had seen its best days in the late 80s. And the cherry on top – the absolute glee I observed from attendantes and gate crew in making what should have been a pleasant experience a hellish one instead.

    I vowed never to fly Delta again, no matter what.

    I flew Delta again today.

    They were the only carrier with a direct flight to New York out of Seattle that left mid day. It was take that, or fly Virgin with a stop in San Francisco, or wait until the next morning for one of the other airlines. I nearly went with Virgin, but didn’t. I bought a ticket on Delta.

    On arrival at the ticket counter I had one employee giving me the “why are you so stupid” routine because I was in the wrong line, but after that things were nice. Easy through security. An efficient boarding procedure and there was my seat, 1B, right at the front of a very nice 767. Unbeknownst to me Delta has ripped the guts out of some of their 767′s and turned them into really nice layouts.

    If you’re flying Delta, get on one of these planes. Huge bathrooms I can stand my 6’4 frame up in, and I swear they’re piping perfume or something into them to keep them smelling reasonable. The sitting pod is extremely comfortable and I made good use of the massage feature. Watched two goodish movies. And best of all…gasp…my flight attendant smiled at me and asked if he could get me anything.

    I have never seen a Delta employee smile before today. It was a very nice feeling. I bet he would have given me champagne, had I asked, without diverting the airplane to Tampa for an emergency landing.

    We were stuck on the tarmac for ages – hitting the three hour limit and then three people asked to deplane, causing a further delay. But we still landed in JFK within about 30 minutes of our original schedule, and everyone seemed to be making their connecting flights. I was all ready to sit down and write a glowing report on my flight since I went so hard on them last time.

    Then….baggage claim.

    The flight landed at 11:18 pm. The first bags came out 40 minutes later. Mine came out just after midnight, so about 48 minutes after landing. People were pissed off, wondering (correctly) if anyone at all was dealing with the baggage. At one point a small purple bag came out and drifted around unclaimed and disappeared. Nothing else came for at least ten minutes after that.

    “They’re totally just fucking with us,” the guy next to me said to my face. “They don’t care at all.”

    “Well, it’s Delta,” I said. I mean, my grandpa always told me not to go asking for a beating and then act surprised when it’s promptly delivered.

    And that’s how the trip ended. A very nice flight, delayed but not because of Delta, and lovely service in the sky. Then they just crapped on us by making us wait an hour for our bags.

    Flight from Hell? Hardly. They were a solid C+ today. And it would have been an A, reserved only for Virgin America flights these days, but for the who gives a heck they’ll get their bags when we’re good and ready at the end.

    Thankfully I had Twitter to read while I was waiting for that bag. And Michael Hill sort of said it best. “Delta airlines: “We’re not happy until you’re not happy”"

    Me and the red faced guy next to me got quite a kick out of that tweet.

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  • Jan 12 2012
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    I Guess That Zynga Acupuncture Ain’t So Bad After All

    spacer In November I wrote about a New York Times article trashing Zynga that appeared to have been spoon fed to them by rival Electronic Arts.

    I particularly remember the quotes by EA’s head of human resources Gabrielle Toledano, including this one: “I expect a lot of game and tech companies will begin recruiting Zynga’s talent after their equity becomes liquid.” And that ridiculous quote by venture capitalist Roger McNamee saying that Zynga would end up a cautionary tale, without any mention that McNamee is friends and a former business partner with the EA CEO.

    Well, Zynga’s public now, and their equity is pretty liquid. But so far I haven’t seen too many departures. Or any. But I did notice Zynga picked up yet another EA executive today. Barry Cottle, formerly EVP of EA Interactive and now EVP Business and Corporate Development at Zynga.

    Perusing the Zynga executive team page, the company now appears to have six former EA execs on board. In addition to Cottle, there’s Colleen McCreary, Jeff Karp, John Schappert, Mike Verdu and Steve Chiang. Counting Cottle, six of the eleven members of the Zynga executive team were former EA execs.

    This isn’t to pile on EA – they’re still a strong company and a little competition is always good for the soul. But the New York Times shouldn’t be so quick, next time, to believe everything that’s thrown at them. Particularly when it’s a competitor doing the throwing.

    Has anyone on the EA executive team not sent their resume to Zynga at this point? That’s a question I’d love to know the answer to.

    Image Credit: NY Times artist rendering of Mark Pincus in what sources from EA tell them is his true form. It definitely wasn’t something I just drew.

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  • Jan 12 2012
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    Survival v. Antitrust (AKA, Remember The Browser)

    spacer My CrunchFund partner and long time colleague MG Siegler is having what appears to be a multi-day seizure over Google’s unsurprising move to integrate Google+ social results into Google search. Says Siegler: “Google is almost asking for an inquiry into potentially anti-competitive practices (and it’s coming). Which is insane.”

    No, not insane.

    Anyone with a passing interest in U.S. antitrust law knows that the government is theoretically good at punishing companies that engage in anti-competitive behavior, such as leveraging market control in one product to help another product compete. But the government is terrible at preventing these actions from happening, unless you think the threat of eventual punishment is enough to deter it. It isn’t.

    In the 90′s Microsoft went from dismissing the Internet entirely to putting Netscape out of business. By the time settlements were reached in 2001 and later, Netscape was just a nice memory for most of us. Everyone, and that means everyone, was using Internet Explorer. See my long video interview with the antitrust attorney, Gary Reback, the man who spearheaded the push to break up Microsoft in the nineties, here.

    Microsoft survived. Netscape didn’t. And the government couldn’t do anything at all to stop that.

    Today, Google search is Microsoft Windows and Office. And Facebook is as much of a threat to Google as Netscape was to Microsoft.

    Of course Google is going to do anything it can to survive. Facebook data is already integrated into Bing, and Twitter’s using the “don’t give the milk for free when you can make them buy the cow” strategy by withholding its own data from Google (look for my upcoming post on why Google will eventually realize that they must acquire Twitter at any cost). That’s a dark place for Google to be.

    On a much smaller scale Google has been up to this for ages (see my April Fools post last year about Google Places). Now they’re trying to put off the Age of Facebook. The only chance they have is to use their commanding lead in search to do that.

    Will the government come a

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