Monday, 31 August 2015

Clever Secures Students' Data Privacy As More Apps Enter Classrooms

Monkeybusinessimages / Getty Images

Education-tech startup Clever announced last week it had spread to one-third of America's public and private schools, some 44,000, in just three years.

The booming San Francisco company owes much of its success to the American school system’s growing demand for technology in the classroom — and the system's inability to figure out what to do with the student data and privacy concerns that come along with it.

For parents and school districts, student data privacy has been an increasing concern. Parents worry about their children's information being leaked, hacked or sold; districts, charged with keeping data safe, worry about their own ability to protect and steward the information.

The concern has been heightened by the fact that teachers are increasingly using tech that requires handing over highly sensitive information to third parties. Beyond simply storing students' names and ages, there are now apps that track and manage behavior, “robot tutors” that build detailed profiles of what kids know, and programs that text parents when their child has missed an assignment.

Clever's system is built to pass information between school districts' databases, which store that sensitive student data, and third-party apps and programs, which need the data to run. District systems have long been difficult to integrate with apps, but by acting as a middleman, Clever allows school districts to monitor what types of student information are handed over to third parties, and to ensure that data is handed over safely.

Districts typically trust Clever to ensure that data is being handled safely. Clever vets the security and privacy policies of the apps it works with — it says it won't allow an app to work with it unless it is compliant with federal privacy laws.

And for teachers and students, Clever solves practical problems. It eliminates the need to create dozens of student accounts by hand. And rather than logging into a dozen apps with a dozen logins, students have one username and password that that they use to sign into Clever, which then logs into the apps.

The need for such a service grew as school districts were using a greater number of digital services, but hadn't figured out how to safely and efficiently store, distribute, or safeguard student data. Many use clunky, outdated student information systems that nonetheless cost tens of millions of dollars to build and maintain, and frequently do an inadequate job of vetting and regulating how companies use their students’ data.

On the other side, less than careful ed-tech companies have sloppy privacy policies, bad or nonexistent encryption, and back-end systems that aren’t built to integrate with school districts or other apps.

“It’s a huge, systemic problem,” said Michael C. Horn, executive director of the innovation think tank the Clayton Christianson Institute. “Increasingly, districts are having more and more software, but there’s no integration in a seamless way.”

Originally, Clever CEO Tyler Bosmeny set out to help teachers who wanted to use a piece of technology in their classrooms, like an app or a piece of curriculum, but found it was a time-consuming headache. Often, it required creating 30 student logins, inputting 30 students’ information, and then using up long periods of class time to get students signed in and using the program. “They were spending more time troubleshooting than teaching,” Bosmeny said.

It was a headache for school districts, too. Every time a teacher signed up her students for a new app, it opened up a potential for misuse of student data — districts struggled to keep track of what programs were being used, and had no way of knowing whether each program was properly transmitting and encrypting students’ information, or whether there was a potential for student data to be bought and sold.

“We heard stories of student information being sent over email, saved in Dropbox, being kept years after students had graduated,” Bosmeny said.

Clever makes its money by charging app developers to integrate with the system. For schools, the service is entirely free — another reason districts have been flocking to use it.

Miami-Dade, the country’s largest school district, first built its own Clever-like system eight years ago, with a single sign-on interface for teachers and a team that vetted and signed contracts with outside developers to ensure proper use of student data.

But it was hugely complex and time-consuming. “Every time we got a new partner, we had to stop and write up legal documents, and our tech people had to develop a new sign-on interface,” said Debbie Karcher, the district’s chief information officer. “It took quite a bit of time and money.”

When Miami-Dade switched to Clever three years ago, in the company’s infancy, the district immediately saw a difference. “On our end, it’s a one-time action, and then Clever does the rest,” said Karcher. “It saves us so much time.”

At first, Karcher said, the switch was about the ease of the single-sign on, saving teachers and the tech department time and money. But their relationship with Clever has become increasingly about privacy. “We started realizing how much student data we were sending out, and how important it was, and we became more reliant” on Clever to monitor and safeguard the data being sent.

That was in part because the nature of the student data being used has begun to change, said Jorge Fernandez, district executive of Miami-Dade County Public Schools. “Apps want more and more detailed information on who students are — making things unique to students instead of just delivering content.”

Miami-Dade now requires new vendors to integrate Clever. If they don’t, Miami-Dade charges them for the time and expense of drawing up contracts and integrating systems. “When we hear that a vendor’s using Clever, our ears perk up,” Karcher said. “That automatically makes it easier on our side.”

Friday, 28 August 2015

Stocks Barely Moved This Week...Really

No, really.

NBC / Via giphy.com

If you only evaluated the stock market by where it was at the end of every week, you might think absolutely nothing happened these last few days, judging by where U.S. indices are now compared to last Friday — stocks closed flat today. But this couldn't be further from the truth.

While stocks barely budged overall in the last five trading days, it was the most volatile week in the markets in recent memory.

While stocks barely budged overall in the last five trading days, it was the most volatile week in the markets in recent memory.

Google Finance / Via google.com

It really started at the end of last week when U.S. markets plunged, driving the S&P 500 down 5.7% for the week, its worst fall since 2011. Just on Friday Aug. 21, the Dow fell 531 points, its worst day since 2011.


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McDonald's Has A New Buttermilk Fried Chicken Sandwich

After changing out its grilled chicken, the Golden Arches makes another move to improve its poultry offerings.

McDonald's / Via mcdonalds.com

Facing falling sales and increased competition, McDonald's has been working to improve its high-end menu items. It introduced "artisan grilled chicken" and summer lobster rolls earlier this year, and made its quarter pound beef burgers meatier. Now, as competitors like Chick-fil-A expand into new markets, the Golden Arches is stepping up its fried chicken game.

Earlier this week, the chain introduced Buttermilk Crispy Chicken, which will replace the crispy chicken it used in its Deluxe Chicken Sandwiches, McWraps, snack wraps and salads. It is a new national menu item, and will be rolled out at all restaurants that choose to offer it. It costs about $4.50.

The new chicken recipe uses 100% white meat chicken breast marinated and battered in buttermilk and spices like black pepper, garlic, and onion powder. The 580-calorie sandwich is topped with lettuce, tomato, and mayo.

It's not a huge change, but it offers "Tender, moist chicken fillet. Great produce and bun," according to a review on Grubgrade.com. So far, reviews on Twitter are mixed.


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Thursday, 27 August 2015

Cigarette Makers Warned On Dubious "Natural" And "Additive-Free" Labels

Because they’re basically meaningless.

Alexlukin / Getty Images

For decades, cigarette makers have been advertising their products as "natural" or "additive-free" — one of the few ways to boost the appeal of an item sold with cancer warnings on the box. The government is now taking action against these claims.

On Thursday, the U.S. Food and Drug Administration sent warning letters to the makers of Winston, Natural American Spirit, and Sherman's cigarettes, saying their marketing suggests that they are less risky than other tobacco products. Companies that want to advertise like that must first submit an application with scientific evidence supporting such claims to the FDA.

The three companies must respond to the FDA's warning letters within 15 working days either explaining how they will remedy the violation or proving that they are not violating the law.

Cigarette sales in the U.S. have been declining for years — nearly 264 billion cigarettes were sold last year, a roughly 3.3% decrease from 2013.

But Natural American Spirit, like many products with the "natural" label, has been growing. One analyst told the Winston-Salem Journal earlier this year that the brand "has long runway for double-digit growth in [the] U.S. and international and remains a very attractive asset."

Nat Sherman


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J.Crew Promises That The Brand Customers Sorely Miss Is Back

More “core heritage,” less “high-end fashion.”

Fernanda Calfat / Getty Images

J.Crew just reported another terrible quarter — but CEO Mickey Drexler promises that the preppy brand that customers have been pining for is back.

"We know what happened to create tough business, and we know what's happening to make it better," Drexler said during an earnings call today, on which he repeatedly referenced the return of J.Crew's "heritage" items.

J.Crew is refocusing on customers' classic favorites and devoting fewer resources to marketing high-ticket items. "Our core heritage businesses are taking up a bigger percent of our investments, and our high-end fashion, a lesser percent of investment, and lesser percent of perception," he said.

In other words: more items like $80 Tippi sweaters, less in the way of $950 palm tree sequin lace dresses.

J.Crew has seen sales tumble this year amid intense criticism from its once-loyal fan base for drifting away from its roots. Women have lamented the chain's steep prices, inconsistent fits and new styles that don't fly in most 9-to-5 office jobs in publications from the Wall Street Journal to The Hairpin to the Washington Post.

"I think you gotta go into the stores and you gotta look at what there is," Drexler said on today's call. "I got an email this morning, I get them every day, and emails cannot be taken to the bank, I understand that, but this woman, who was a regular customer, says 'Hallelujah for the leather, the prints, the cashmere basics and the quality I missed.' We're getting a lot of feedback like that on the Style Guide and online."

The changes came too late to reverse declining sales. The results for the three months ended Aug. 1 were worse than the first quarter. J.Crew also recently eliminated 175 jobs, mostly from its New York headquarters, and replaced the head of women's design for the J.Crew brand.

J.Crew brand sales tumbled 10% in the second quarter and 13% on a comparable basis (which does not include sales from new stores).

The company's newer Madewell brand, on the other hand, is gaining momentum. The brand's sales rose 22% overall and 8% on a comparable basis. While Madewell continues to be a shining star for the company — its sales rose 33% in the first quarter — it only accounted for one-tenth of the company's $2.6 billion in sales last year.

Drexler acknowledged in June that J.Crew overemphasized its high-priced "Collection" business at the expense of its classic, everyday items, and that it made tops too "oversized and boxy." He also pointed to unpredictable shopper traffic and "rampant discounting" within the retail industry as additional challenges for the company.

While it's not exactly discounting, J.Crew has plans to open 9 stores this year under its new J.Crew Mercantile name. That chain will sell J.Crew Factory's cheaper, made-for-outlet goods in traditional malls and shopping centers, hopefully without cannibalizing J.Crew's full-price business, according to an internal memo sent to BuzzFeed News last month.

"We've had lots of demand for J.Crew branded goods at other price points," Drexler said today. "Essentially, it's a way for us to take a business that's value J.Crew and put it in areas where J.Crew retail would not have been successful."

LINK: J.Crew Cuts 175 Jobs As Brand Loses Cool With Women

LINK: J.Crew Internal Memo Outlines Strategy For Outlet Stalls In Regular Malls


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Meet One Opponent Of The Movement To Raise The Minimum Wage

An important new labor ruling makes corporations responsible for their franchisees’ working conditions. BuzzFeed News speaks with an industry group fighting the new standard and pay hikes.

IFA / Via youtube.com

Addressing a long-debated issue, the National Labor Relations Board today made a ruling in a case favoring a broader definition of "joint employer," a decision that will have major implications for franchise owners and their workers in industries such as fast food and temp staffing.

Previously, franchisees were considered independent businesses, even though they belonged to a large chain, and the corporations that owned the brands said they could not control working conditions at individual franchisees. Thursday's decision makes it easier for unions to organize franchised workplaces and to hold employers responsible for labor conditions, including wages. The defendant in the case may still appeal the decision.

"While Congress is away, the NLRB clearly still plays," said Steve Caldeira, president and CEO of the International Franchise Association, the industry's largest trade group, in a statement following the ruling. "Today's NLRB decision is a seismic shift in the Board's employer definition and, without any Congressional or court action could significantly alter the face of American business as we know it."

As it confronts this new standard, the IFA, which represents franchise businesses large and small, including fast food giants like McDonald's, has also been contending with the "trend that can't be stopped," in the words of one professor of industrial relations — the "tidal wave" of minimum wage raises across the country, implemented by cities, states, private companies, and wage boards.

Backed by the Service Employees International Union, the Fight for 15 campaign has turned raising the minimum wage into an energetic national movement, with many of the planned increases reaching a final rate of $15 an hour, often then indexed to inflation. In New York, Governor Andrew Cuomo's Wage Board recently recommended raising the minimum for the state's fast food workers to $15 by 2021 (and by 2018 in New York City).

Prior to the decision, BuzzFeed News spoke with Caldeira about the joint employer definition and the group's opposition to the minimum wage drive. Here's a condensed and edited transcript of the conversation.

Jeff Roberson / AP

What has the IFA's stance been on the definition of joint-employer by the NLRB?

We've been working aggressively to educate members of Congress on both sides of the aisle to pass legislation to keep the definition of joint-employer before the Board. For decades, through both Democratic and Republican administrations, the NLRB had adhered to this definition of what constitutes a joint employer.

What is your opinion of the New York Wage Board's recent recommendation to raise pay for fast food workers to $15 an hour?

I think it's a blatantly discriminatory social experiment conceived by union bosses and implemented by politicians that are beholden to them. Unions have to find their bacon somewhere, and they're coming after the quick-service restaurant industry.

In me, you've got one focused, passionate CEO that is going to go toe-to-toe, punch-counterpunch against organized labor, Mary Kay Henry and the SEIU, against the blatantly discriminatory actions they are taking. We are up to the battle and we will continue to fight with all the energy that we can muster to do what's right and to protect small business franchise owners.

What would you say to supporters of the wage increase, who claim that workers can't live on the current wages in the fast food sector?

The minimum wage was never meant to be a living wage. It was meant for entry-level workers — first jobs on the employment ladder, for lesser-skilled positions. A starting point, an entry point.

Today's workers aren't teens working for gas money. Almost 40% of fast food workers are 25 or older. More than a quarter of them have children.

Why are more people working in quick-service industry? Because they can't get the jobs they want.

If you've got workers who are older working in quick-service restaurants, that tells you there is a fundamental problem with the policies that are emanating from Washington. If they could find the jobs they wanted, they'd be in them. But they can't. So they get the jobs where they can.

It's not the quick-service restaurant industry's fault that the U.S. economy went south. The real culprit is six years of ineffective progressive economic policies that have really impacted the small business community. It's due to a lack of a pro-growth economic agenda. You've got small business owners dealing with the Affordable Care Act, which is anything but affordable. Capital is much tougher to get.

So all of a sudden the quick-service restaurant industry is responsible for providing middle-income jobs. We were supposed to be America's training force. We provide training opportunities for veterans, minorities, and women. Franchisees want to take care of their workers, but to go from $8.75 to $15 is to blatantly discriminate against franchisees. That's why we're suing Seattle.


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Wednesday, 26 August 2015

Chick-Fil-A Just Handed Out 6,500 Free Sandwiches In New York City

There’s no strategy like free food.

Venessa Wong / BuzzFeed News

NEW YORK — Over the last two years, the chicken sandwich chain Chick-fil-A has started expanding beyond its usual suburban environs to urban markets, and on Oct. 3, it will open the doors to its largest restaurant yet in the country's largest city, New York.

It will be Chick-fil-A's first location in Manhattan (outside of the NYU cafeteria), which means that even in this city of roughly 8.5 million people, there are plenty yet who have no clue what Chick-fil-A is, despite the fact that the Atlanta-based chain is arguably one of the most successful companies in fast food at the moment.

Chick-fil-A is betting large on the giant, new restaurant, which will be three stories, have 10 registers, and two kitchens. It will have roughly twice the capacity of a typical Chick-fil-A, according to Ryan Holmes, a Chick-fil-A urban strategy consultant. In other words, it's expecting tons of business. "Our urban strategy is a lot about New York," he said.

Chick-fil-A is already planning a second store in Manhattan, and there's room for 15 to 20 locations in the borough, said Holmes, with additional room in the city's outer boroughs like Brooklyn.

To drum up interest in what remains unchartered territory for the brand, on Tuesday and Wednesday, the company handed out roughly 6,500 free chicken sandwiches outside of Madison Square Garden, which is blocks away from the upcoming store. By 10:45 a.m. on Wednesday, roughly 70 people had lined up ahead of the truck's opening, and they continued to pour in.

Chick-fil-A

Chick-fil-A aggressively promoted the giveaway. It hired eight people to spread the word by bike, and five pedicabs to chauffeur people to the truck, which was blasting dance music for passersby.

Chick-fil-A aggressively promoted the giveaway. It hired eight people to spread the word by bike, and five pedicabs to chauffeur people to the truck, which was blasting dance music for passersby.

Chick-fil-A


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Gap Says It Will End On-Call Scheduling In Stores By September

A turning point in the fight for fair scheduling.

Joe Raedle / Getty Images

Gap just joined Abercrombie & Fitch and Victoria's Secret in promising to stop using on-call scheduling in stores, a third major win this summer for advocates who have been pushing the nation's retailers to provide more stable work for their part-time, low-wage employees.

The company, which is the biggest operator of specialty clothing stores in the U.S., said in a blog post today that store heads have been informing employees about a phase-out of on-call shifts during the past few weeks. The shifts will be completely eliminated by the end of September at all five of Gap's brands — Gap, Old Navy, Banana Republic, Athleta and Intermix.

The post, authored by Banana Republic president Andi Owen, also noted that the brands will provide store employees with schedules at least 10 to 14 days in advance by early 2016. Prior to this, it's been at least three to seven days. Most brands will begin the advance scheduling effort in September, as per the post.

Given Gap's size, it's a major turning point in the fight for fair scheduling.

On-call shifts usually appear alongside regular shifts on workers' schedules but require workers to phone before start-time — sometimes as little as two hours beforehand — to find out if they're needed or not. If not, they go unpaid. Some retail employees have said they're required to be "on call" for as many as 20 hours in a week, making it next to impossible to arrange other paid work, classes, eldercare or child care in that time, and generally wreaking havoc on one's week.

Attention on the issue, and last-minute scheduling more generally, has surged this year after the New York state attorney general's office contacted 13 national retailers in April for information on their use of uncompensated call-in shifts. (Gap was among those contacted.) Many of the nation's biggest chains have ramped up their use of call-ins in recent years to save millions in staffing costs, drawing public outcry.

Victoria's Secret made waves in June when it told employees it would stop using call-ins a few weeks after a BuzzFeed News investigation into the practice. Abercrombie committed to stopping the practice earlier this month, and said it would give workers their schedules a week in advance.

New York Attorney General Eric Schneiderman urged other retailers to follow Abercrombie after the retailer's announcement earlier those month, noting that "unpredictable work schedules take a toll on all employees, especially those in low-wage sectors."

Gap, which had more than 2,500 stores in North America at the end of January, made today's announcement with an eye to Women's Equality Day, noting in its post that women make up 74% of its employee base worldwide.

The retailer started a pilot project with the UC Hastings College of the Law in July of last year to research and design scheduling practices that would improve work-life stability for hourly workers. A report on those findings is not yet available.

"We know we have more to do, but we are committed to addressing these issues," Owen wrote in the post. "The commitment to 'do more' was the path Doris and Don Fisher began when they opened the first Gap store in 1969, and every day we strive to do more and to do better by our employees, and in the communities where we live and work."

Will Varner / Via BuzzFeed News

LINK: Making Victoria’s Secret Pay For Keeping Staff On Call


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McDonald's Rejects Burger King's "McWhopper" Stunt

Sorry not sorry. It’s never going to happen.

Burger King

In an unusually passive-aggressive and short-lived advertising campaign, Burger King proposed a day of "peace" with McDonald's via a Whopper-Big Mac burger mashup called the "McWhopper," which would be available for just one day at just one popup location. McDonald's quickly rejected the idea by Wednesday morning.

The country's second-biggest burger chain suggested "a burger war ceasefire" via full-page ads in the New York Times and the Chicago Tribune on Wednesday, saying proceeds would go to a nonprofit that's drawing awareness to Peace Day on Sept. 21. The company's promotional materials noted: "McDonald's has not yet authorized or accepted this proposal."

"Our invitation might be unexpected, but it's 100% sincere," McWhopper.com, a website created by Burger King for the stunt, states.

McDonald's, however, didn't take kindly to the public offer — and suggested that Burger King should not compare their rivalry to "the unequaled circumstances of the real pain and suffering of war."

So much for joining forces.

Here's a response from McDonald's CEO. "A simple phone call will do next time," he said.

Here's a response from McDonald's CEO. "A simple phone call will do next time," he said.

McDonald's / Via Facebook: McDonaldsUS

We don't really know much about the ill-fated "McWhopper," except that it would have been a hamburger.

We don't really know much about the ill-fated "McWhopper," except that it would have been a hamburger.

Burger King


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Abercrombie Finds Success In Talking To Customers, Turning Volume Down

The company’s comparable sales weren’t as bad as usual this quarter.

Mario Anzuoni / Reuters

Friendly interactions with customers, stores that you can see into, and non-nightclub lighting — these strategies appear to be working for Abercrombie & Fitch.

The company's two main brands Abercrombie and Hollister both saw sales fall in its latest quarter, but not as badly as usual, the company said today. Hollister, the bigger of the two businesses by revenue, posted a comparable sales decline of 1%, compared with 6% in the first quarter, while Abercrombie's comp sales fell 7% versus 9% in the first quarter.

This follows a comparable sales decline of 8% for the company overall last year, and a 11% drop in 2013.

Abercrombie has been revamping its brands under new leadership, announcing in April that it would do away with "sexualized marketing" and shift to a more convenient, friendly "customer-centric store-operating model." It also said that it would "adjust scent, lighting, music and trees" in its famously dark, nightclubby stores to provide "a more pleasurable shopping experience."

Today, executives said Hollister stores that have banished the porch storefront in favor of one you can see into continue to do well, and that Abercrombie is seeing success with "removing various props and fixtures" to improve "sightlines" in its stores.

Both brands, too, are relaxing once-rigid dress code and behavior rules for store associates, and encouraging them to actually interact with customers. (Abercrombie associates have said in the past that that they were instructed not to approach customers and offer help.)

Store employees now "have some latitude around moving fixtures," Jonathan Ramsden, the company's chief operating officer, said today on an earnings call. "We are also supporting them with some additional training in how they interact with customers and directing them to spend more of the hours that are within the store on customer-facing activities rather than back office-type activities."

Hollister noted that it's also successfully run campaigns on Instagram and on Snapchat, where it says it was the first global retailer to develop a customer filter.

Abercrombie's stock soared the most in almost three years today, according to Bloomberg News, after its adjusted profit of $8.6 million for the quarter beat analysts' expectations. The retailer still doesn't have a CEO after modern-day founder Mike Jeffries stepped down in December.

The company made headlines earlier this year when the Supreme Court sided with a Muslim woman who sought to work at Abercrombie & Fitch but was rejected because her headscarf, or hijab – worn because of her religious practices – violated the company's "Look Policy." Abercrombie also said today it paid almost $16 million in legal settlement charges in the quarter.

LINK: Abercrombie Says Farewell To Its Shirtless Men And Sexy Vibes

LINK: Abercrombie Has Change Of Heart: Now You Can Sit With The Cool Kids


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After Opening Strong, U.S. Stocks Decline Again

It was nice while it lasted.

The S&P 500 Tuesday

Google Finance

Punit Paranjpe / AFP / Getty Images


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Knewton, A Hyped Ed-Tech Startup, Moves Into The Mainstream

(AP Photo/Jacquelyn Martin)

Jacquelyn Martin / AP

For years, the ed-tech start up Knewton has been content to stay behind the scenes, lending its adaptive-learning technology to big-name education publishers like Pearson and Houghton Mifflin. But Knewton is stepping out of the shadows with a plan to take its technology to the masses.

Today, the company is launching Knewton.com, a free online tutoring platform that creates personalized lessons for learners out of completely "open" content — videos, readings, and test questions that are uploaded onto the platform by users. Though it is starting with kindergarten through high school, the plan, the company said, is to eventually move into college-level subjects and beyond.

Jose Ferreira, the company's CEO, calls Knewton.com a "robot tutor in the sky."

Knewton, founded in 2008, has made its business out of providing technology to many of the world's largest education companies, allowing them to build curriculum that adapts to individual students. Knewton software collects millions of data points about what students know and how they learn, then translates them into customized lessons, questions and quizzes.

The new platform launching today brings the same technology to teachers, parents and students, formulating custom lessons for students by stitching together the best videos and quizzes from a library of user-created content. Working within a topic like "exponential equations" or "cellular respiration," each student will see a different lesson, with different quiz questions and videos, stitched together based on the student's strengths and weaknesses.

In a classroom, Knewton.com might function as a replacement for a worksheet on a topic like the Pythagorean theorem — rather than giving every student the same questions, teachers can have students working at their ability, with some reviewing the basics of the concept and others solving advanced problems.

For the first time, rather than using a textbook company's curriculum, Knewton has put its software to work on "open educational" resources like Youtube videos and teacher-written lessons. The idea is to use Knewton's technology to pick the best of those resources, then serve them up to thousands of students. Knewton's algorithms test the effectiveness of every piece of content that's uploaded to the platform. Materials that work well will be "floated to the top," with the potential to be shown to thousands of students; if it proves ineffective, it will be sifted out in favor of better curriculum.

"There's so much good stuff out there, and only a small percentage of it is on the web," said David Liu, Knewton's chief operating officer. "So much is trapped on teachers' desktops, so we're really trying to open up great content that would normally only be seen by maybe 30 students."

Knewton said there are no plans to charge users for the platform; its moneymaking business, Liu said, is its back-end work with curriculum companies like Pearson. But the company still has a lot to gain from offering the service.

Knewton's business is built on understanding how students learn. As the platform grows, Knewton will learn more about what makes good content, how students move through subjects, and what teachers want out of tutoring resources. That knowledge will be a boon to Knewton's moneymaking business, too, allowing it to provide better technology to the companies it works with.

Knewton will also amass detailed "learner profiles" of students — profiles that can, ideally, follow students into classrooms and outside of them. These, too, will enhance the quality of the company's technology.

It also won't hurt that the service will give Knewton a foothold in many schools where it doesn't currently have a presence, showing teachers and school districts the value of buying curriculum that uses Knewton technology.

Knewton last raised money in 2013, when it brought in $51 million in Series E round. In 2011, when it raised $33 million, it was reportedly valued at well over $150 million.

For now, the content on Knewton.com is focused around K-12. In this early stage, Knewton is making a big bet on elementary school teachers, relying largely on them to upload the content — and to populate the platform with their students.

There's already a huge demand for content and lesson-sharing among teachers, said Liu, though much of it is decentralized. Knewton hopes to create a place not just to upload that content, but a way to judge whether it works, and for what types of students.

"Every other site is putting out what experts think is best," Liu said. "We're doing something very different. We're finding the content that is shown to be the most effective, at that point in time, for that student."

Many ed-tech companies have had huge success by going directly to teachers to distribute their free products — like Remind, an app that allows teachers to communicate with parents and students that neared the top of the Apple app store last year, or ClassDojo, a behavior-tracking app that has become enormously popular among teachers.

But working directly with teachers to spread its product will be new territory for Knewton, which has so far dealt only with large companies like Pearson. That could prove a challenge for the company. Though it has pre-loaded the site with a stock of educational content, Knewton.com will only thrive if it has users to populate the site and students to learn from.

Education Department Targets Student Debt Scammers With Online Campaign

youtube.com

The Education Department and Secretary of Education Arne Duncan have launched an online campaign to warn students about debt relief scams that use the department's name to charge vulnerable borrowers hundreds and even thousands of dollars to enroll them in federal aid programs that are free to sign up for.

In the department's video, Duncan tells borrowers that ads about federal student loans are likely "too good to be true," calling their fees "exorbitant," and reminding borrowers that the government's aid programs should come at no cost.

The department's efforts are a sign that debt relief scams, which which frequently capitalize on the authority and publicity of the department and its aid programs to lure borrowers, are a growing problem for the government — a problem that, given the nature of the industry, has no easy solution.

Through websites, search engine ads, social media campaigns, and scores of robo-calls, student debt relief firms target federal loan borrowers who are struggling to make their payments. Many misleadingly claim to be connected with, or even employed by, the Education Department, then charge astronomical fees — sometimes even on a monthly basis — to enroll students in income-based repayment programs with the government. That enrollment process is designed by the government to be free and accessible to all borrowers.

Experts agree that student debt relief scams have multiplied rapidly in the past year, and are only likely to pick up steam as the federal government's borrower assistance programs gain more media attention. Income-based repayment and other federal programs are central parts of Hillary Clinton's "New College Compact."

But for the Education Department and regulators, tracking down and going after any of these firms is a daunting, and in some cases impossible, task. For now, at least, debt relief companies are typically fly-by-night operations, frequently changing names, owners, offices, and phone numbers. Madigan, the Illinois Attorney General, has filed a handful of lawsuits going after the companies, and one was shut down by the Consumer Financial Protection Bureau in May. But dozens more have sprung up in their place.

The department has faced criticism in the past that it does not do enough to protect students from such scams. In June, Illinois Attorney General Lisa Madigan called on the department to certify nonprofit counselors to help students enroll in the program. And Rohit Chopra, the former student loan ombudsman at the Consumer Financial Protection Bureau, has placed some blame on the loan servicers employed by the department, saying "sloppy servicing can spawn scams."

Tuesday, 25 August 2015

Startup Able Offers Low Interest Loans, But Only If Your Friends Have Your Back

After failing to disrupt the postal service, two Austin entrepreneurs start over with a new model for small business lending.

Matthew Peoples / Via flic.kr

Evan Baehr and Will Davis got a second chance from their investors.

After the entrepreneur's doomed digital mail app Outbox was shut down in 2014 thanks to spiraling marketing costs and the opposition of the U.S. Postal Service, the two Austin-based, Harvard-Business-School-educated founders went back to their investors and offered to give back the money they still had left over. Their response: "just keep building," Davis told BuzzFeed News.

Baehr's and Davis' new product, called Able, has nothing to do with Outbox (a short-lived service that digitized users' snail mail and emailed it to them), and starting Tuesday it will be available in most of the country.

Able is a collaborative business loan service in which the borrowers' friends, family, and other associates contribute up to 25% of the loan amount, and the remaining 75% is paid by Able, which sells off its portion of the loan to investors. Both the lender and Able collect interest. The loans in total can be as large as $500,000 with terms of up to five years.

Able's portion of the loan gets paid off faster than the other backers', and Able handles servicing the loan for everyone who participates in it.

Starting Tuesday, Able, spurred on a by $6 million funding round led by Blumberg Capital and RPM Ventures, will be lending in 40 states and the District of Columbia. Able has been operating for about a year in Austin only.

There's a fast growing industry of small business lending done by companies that aren't banks, fueled by venture capital investors pouring money into the companies and investors who then buy up the loans. OnDeck, a small business lender that went public late last year, has originated over $2 billion in loans, while Funding Circle, a U.K.-based startup, has raised over $270 million in venture capital and made more than $1 billion in loans.

While there are mechanisms for individuals to buy equity in a company, there are not many tried-and-true ways for them to lend money to a small business. "Think of it as an AngelList for debt," Davis said. "We have built a new structure of a loan that lets us make lower interest loans to fund growing small business," Baerh said.

Unlike lenders that evaluate borrowers largely using algorithms and then make loans with high rates, Able's founders say the formal participation of the business owners' associates can help keep rates down — business owners are more likely to pay back their friends and because they could get assistance with their business from backers. Able also tries to connect borrowers and lenders with each other through what they call the Able Network.

Average annual rates run between 8% and 12%, Davis said. Compared to other startups, loans from Funding Circle can have percent rates in the low 20s, while the annual rate on OnDeck loans can get up to around 50%.

"We're filling a void in the marketplace and the only reason we can do that
is because of the model," Davis siad.

Able loans, however, do not come as fast as some of the faster growing online lenders. While Able's founders say they can underwrite loans in two days, they say the fastest they've gotten a loan out with backer participation is 10 days. Funding Circle, in contrast, says they can get loans to customers in five business days. With some online lenders, Davis said, "you get funding in two days but you pay 50% APR."

One of Able's Austin-area customers is Hops & Grain, a brewery that opened in 2011, selling canned, craft beer. At the end of 2014, founder Josh Hare decided he needed newer equipment — until then, he had been investing in the business with its available cash.

"I had this really romantic vision of just walking into a bank and saying 'hey we need this very expensive stainless steal equipment," Hare said. "All of those dreams were completely crushed when I met with a commercial bank."

Hare learned about Able from one of his initial investors. "It's a neat concept of non-traditional lending," Hare said. "I liked the concept of the borrower bringing a portion of funds through backers, it was a little more real than just going to the bank, there's more responsibility on my end."

Hare approached Able towards the end of 2014 and was able to recruit backers for the loan in a week and got $250,000 with a 10% interest rate on Feb., 1 to fund expanding the brewery's hospitality room, including new furniture and a new bar. "We made that space comfortable so it feels like you're in a brewery but not in the middle of a hot warehouse," Hare said. They also bought new fermentation tanks to increase the brewing capacity by 40% and use less water.

Hare's problem seeking a traditional small business loan was similar to one faced by many other small business owners, especially as banks cut back on riskier activities. "Our revenue is growing still not at a place where we can submit financials to a bank and they say it will look good," Hare said.

American Apparel Workers Beat PiƱata Of New CEO Outside Headquarters

The battle between American Apparel’s new regime and those still loyal to founder Dov Charney has gotten genuinely ugly.

Workers Together Save American Apparel / Via youtube.com

More than a year after founder Dov Charney was ousted from American Apparel, the conflict between workers who remain loyal to him and the company's new management keeps escalating. Last week, workers beat a piƱata of the company's new CEO, Paula Schneider, in front of American Apparel's Los Angeles headquarters in "I Heart Dov" and "Save Our Company" t-shirts, carrying "Dov Wouldn't Let This Happen To Us" signs.

"Many of you have reached out to me to express your dismay over the demonstration held out in front of our corporate HQ yesterday that included violently beating a PiƱata in my likeness," Schneider, who was installed eight months ago, said in an employee-wide memo on Aug. 20 that was obtained by BuzzFeed News. "I'm sorry this happened and I thank you for your support and kindness."

She told employees that the behavior of a small group that supports these "intimidation tactics," such as an "attack" at the company's headquarters the prior week and the piƱata's beating is "truly appalling." The attack refers to a protest over the recent firings of employees seeking to organize, including the termination of Esmeralda Morales, a garment worker who was was a leader in such efforts.

"Let me be clear: I believe in the right to free speech but not violence in any form," she wrote. The full memo is included below.

A spokeswoman for the company declined to comment. Charney also declined to comment.

The piƱata built to look like Schneider, which was made in downtown Los Angeles by local vendors, was an extremely unusual and shocking form of corporate protest in the U.S.

A video of the beating, posted to YouTube by the Workers Together Save American Apparel group, noted at the start: "In Mexico, the piƱata has a long tradition of being used as a prop for political commentary of unpopular public figures." Many of the company's workers are Mexican immigrants. The piƱata, like more uplifting incarnations, was filled with gold chocolate coins and play money. The video said these were meant to illustrate Schneider's "reckless" handling of the company's finances.

Some employees involved in the demonstration with the piƱata were fired, according to two people familiar with the matter, who spoke on the condition of anonymity.

Workers Together Save American Apparel / Via youtube.com

Labor unrest has plagued the company this year while it also grapples with falling sales, a deteriorating balance sheet and a new brand ethos. As part of an attempted turnaround under hedge fund Standard General, the company has announced store closures and additional job cuts after laying off about 180 people earlier this year. Further, Schneider's memo noted that the company, which makes all of its clothing in the U.S., is now battling more than 30 lawsuits from Charney and current and former employees. Charney is also supporting unionization efforts.

"We have had to defend all of these lawsuits and pay very costly attorney's fees, instead of buying yarn and fabric to help the turnaround plan," Schneider wrote. She added later in the memo that the company was able to obtain additional funding last week that will help pay for yarn and fabric.

American Apparel listed the unionization of its workforce as a potential risk in its annual filing in March, and noted that non-union groups were making demands of the company and seeking recognition. The General Brotherhood of Workers of American Apparel has been seeking recognition from the company's management and formally registered with the U.S. Department of Labor last week, according to the Los Angeles Business Journal.

Concern has floated this summer about a potential American Apparel bankruptcy after the company said that it can't guarantee it will have enough financing to "meet funding requirements for the next twelve months" and that shareholders may lose everything.

But if American Apparel were to file for bankruptcy, that probably wouldn't mean the end of the brand — though it would certainly radically change the company that exists today. Standard General, the hedge fund overseeing American Apparel, is also involved with RadioShack, which filed for bankruptcy earlier this year and still exists, though in a smaller state. C. Wonder, Chris Burch's retail venture which also went out of business earlier this year, will relaunch on QVC in 2016. And Delia's, that once-beloved 90s retailer better known as dELiA*s, is back in an online form after going under late last year.

Schneider is hoping that she can build American Apparel to "stability and then to profitability," she wrote in the Aug. 20 memo.

"It is a particularly tough environment for retail in general," she wrote. "Many retailers are having a difficult time, including Gap, Urban outfitters and J Crew. American Apparel is also experiencing a decline in sales. We are taking steps to rebuild our business. Refreshing the store inventories with new products and building up the right wholesale inventories are all part of the turnaround and will require the continued commitment of our skilled sewers and production staff to accomplish our goals."

American Apparel's shares closed at 23 cents each yesterday, a 78% decline for the year.


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China Stocks Continue To Tumble, Central Bank Cuts Interest Rates

Shares in Chinese companies had fallen more than 7% by the close of trading on Tuesday, a day after the country’s stock markets suffered their biggest losses since the global financial crisis.

Mark Schiefelbein / AP

Stocks on China's major indexes had dropped more than 7% by close of trading Tuesday, extending the biggest four-day streak of losses since 1996, Bloomberg reported.

The decline followed even sharper losses on "Black Monday", a rough day of trading which affected markets around the world and saw a loss of 8.5% in China's Shanghai Composite.

After close on Tuesday, China's central bank said it would cut interest rates for the fifth time in nine months in a bid to shore up slowing growth, AP said.

Lower interest rates make it cheaper for people and businesses to borrow money to fund spending and investments, and they also make saving money in deposit accounts less attractive.

China's central bank cut the benchmark rate for a one-year loan to 4.6 percent from 4.85 percent. The interest rate on one-year deposits will fall to 1.75 percent from 2 percent annually.

There will also be more money available for banks to lend to businesses and consumers, thanks to a reduction in the amount that banks are required to set aside as a proportion of their total deposits. China cut this "reserve requirement" to 18% from 18.5%.

Monday's sell-off in China hurt both European markets and U.S. markets. Both the Dow Jones Industrial Average and the S&P 500 closed in negative territory, with the Dow losing nearly 600 points and the S&P some 4% lower.

Mark Schiefelbein / AP

But signs are that despite this latest set of declines in China, the rest of the world won't have such a bad day on Tuesday.

While Tokyo's Nikkei index closed lower after a volatile day, other indexes in Hong Kong, Australia, and South Korea all rose slightly, the BBC reported.

The Chinese interest rate cut will help shore up some of the negative sentiment in global stock markets about the country's rate of economic growth.

There's still lingering uncertainty over whether the U.S. and U.K. will raise benchmark interest rates, and concern among analysts that the Chinese government is abandoning some of the measures it had been taking to support markets in the country.

Wei Wei, an analyst at Huaxi Securities Co. in Shanghai, told Bloomberg: "It's panic selling and an issue of confidence. The government won't step in to rescue the market again as it's a global sell-off and it's spreading everywhere now. It's not going to work this time."


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Monday, 24 August 2015

Government Considering Legal Action Against Former Sallie Mae Loan Servicer

Navient Corp. was once part of Sallie Mae.

Paul Morigi / AP Images for Reading Is Fundamental

The Consumer Financial Protection Bureau is considering taking legal action against Navient Corp., the country's largest student loan servicer and a former division of Sallie Mae, after an investigation into the company's disclosures and late fees. The company disclosed the threat of legal action in a filing today.

Any legal action against Navient could be a significant blow to the company, which was spun off from the student loan giant Sallie Mae partially in an attempt to repair its battered image as a loan servicer. Last year, the two companies were ordered to pay a $60 million settlement over allegations that they had denied benefits to military service members.

The threat of legal action against Navient is part of a broader probe into student loan servicing practices nationwide by the CFPB. Last month, the regulator ordered Discover Bank to pay $18.5 million for illegal student loan practices, saying that the company had overstated minimum amounts due, withheld important information, and harassed borrowers with calls at all hours of the day.

The language in Navient's disclosure is stronger than one earlier this month by Citigroup, which said that it was "subject to a regulatory investigation" into its student loan practices. Citigroup did not specify which regulator was investigating the company.

U.S. Stocks Fall Violently, Recover Slightly, And End Down After Day Of Global Market Upheaval

#BlackMonday.

Yahoo Finance

Spencer Platt / Getty Images


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Here's Why Everyone Is Panicking About The Stock Market Right Now

Short answer: Everything is connected.

Americans woke to news on Monday that the ~stock market~ — that enigma that somehow controls their lives but nobody really understands — was tanking. The initial reaction from pundits and market watchers was understandable.

Americans woke to news on Monday that the ~stock market~ ā€” that enigma that somehow controls their lives but nobody really understands ā€” was tanking. The initial reaction from pundits and market watchers was understandable.

Walt Disney Co.

Now this is all kind of confusing and can be kind of technical, but bear with us here as we attempt to explain business.

Now this is all kind of confusing and can be kind of technical, but bear with us here as we attempt to explain business.

Walt Disney Co.

Monday's action is tied to China, the second-largest economy in the world. China's constant growth has fueled higher prices of things like copper and oil, and its export market's size has directly affected the movement of the global economy.

Monday's action is tied to China, the second-largest economy in the world. China's constant growth has fueled higher prices of things like copper and oil, and its export market's size has directly affected the movement of the global economy.

Str / AFP / Getty Images

But China has been experiencing a very rough summer, filled with the government pumping money into the system, devaluing its currency to make Chinese goods more competitive, and generally trying to stave off an economic slowdown.

But China has been experiencing a very rough summer, filled with the government pumping money into the system, devaluing its currency to make Chinese goods more competitive, and generally trying to stave off an economic slowdown.

Mark Schiefelbein / AP


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Tim Cook Tries To Calm Investors Amid Apple's Volatile Stock Price

Justin Sullivan / Getty Images

As Apple stock dropped by about 6% Monday morning, CEO Tim Cook emailed CNBC’s Jim Cramer in an effort to assure investors that the company has seen strong growth in China in July and August.

"I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August," Cook wrote in his letter.

Apple shares dropped nearly 11% to $94.26 in the first few minutes of trading, helping drag the tech-heavy Nasdaq Composite down 8%. Since then, however Apple shares have recovered to almost just over $106, giving them a slight gain in afternoon trading. Stock markets fell sharply around the world as the Dow Jones Industrial Average plummeted nearly 1,000 points before rebounding later.

"Obviously I can't predict the future, but our performance so far this quarter is reassuring," Cook said.

China is Apple's second biggest source of revenue after the Americas region. In the quarter ending in June, China revenue was up 112% year-on-year. The declining yuan, however, reduces Chinese consumers' purchasing power and may negatively impact Apple sales moving forward.

An Apple spokesperson confirmed to BuzzFeed News that Cook sent the email.

Here is Cook's full note to Cramer:

Jim,

As you know, we don't give mid-quarter updates and we rarely comment on moves in Apple stock. But I know your question is on the minds of many investors.

I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks.

Obviously I can't predict the future, but our performance so far this quarter is reassuring. Additionally, I continue to believe that China represents an unprecedented opportunity over the long term as LTE penetration is very low and most importantly the growth of the middle class over the next several years will be huge.

Tim

LINK: Stock Markets Fall Sharply All Around The World

LINK: China’s Stock Sell-Off Causes Markets To Plunge More Than 8%

People Can't Log Into Their TD Ameritrade Accounts And Are Freaking Out

It’s such a perfect day.

Andrew Burton / Getty Images


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How Rupert Murdoch Suffered A Rare Defeat In American Classrooms

Rupert Murdoch and Joel Klein

Carlo Allegri / Reuters

Amplify, Rupert Murdoch’s attempt to disrupt the American education industry, had a lot going for it: a lot of hype, a lot of media attention, a lot of high-profile names, and a lot of money to spend. Then add to all that the fact that the education industry seemed especially vulnerable — dominated by big, cozy, slow-moving incumbents, just the way Murdoch likes it.

But none of that mattered in the end. As it turns out, Murdoch's News Corp. couldn't even make waves in the education world, much less disrupt it. During its short life, Amplify bled money, losing $193 million in 2014 alone.

On Aug. 12, News Corp. said it was in final talks to sell Amplify, had written down the value of the business by $370 million, and would wind down the education unit's first and most ambitious project, a custom-made tablet computer that was supposed to revolutionize education technology. The venture lasted just three years at News Corp.

Amplify’s high-profile failure, despite the people and money backing it, is a sign of just how strange and difficult to navigate the education industry can be. The company underestimated almost everything about the industry: the deep entrenchment of the biggest players and the complexities of selling to school districts — not to mention the surprising political power of parents and teachers unions, who had a not-insignificant hand in the company's troubles.

Amplify’s pitch, when it launched in July 2012, was simple: It was neither an education publisher like Pearson, bogged down by the legacy of printed textbooks, nor a tech company like Apple, which didn’t understand teaching and curriculum. It made products that straddled that line: a tablet customized solely for classrooms, and, later, an education curriculum made only for digital devices.

And it had money, too, to the tune of hundreds of millions of dollars in investment by News Corp, which had exited the education business a decade prior when its publishing arm, HarperCollins, stopped printing textbooks. Amplify hoped the money would allow it to compete on the same level as the country's dominant textbook companies, Pearson, Houghton Mifflin, and McGraw-Hill, known in the industry as the "Big Three."

Rather than starting at the bottom, selling directly to individual schools and teachers as many startup ed-tech companies were forced to do, Amplify sold its products just like the big textbook companies did, sending fleets of salespeople to peddle Amplify's wares directly to school districts.

“I would like to disrupt the delivery model, too, eventually," Amplify CEO Joel Klein told BuzzFeed News in April 2014. “But these things don’t happen overnight. You have to meet the market where it is, even if you’re a disruptor.”

But from the beginning, Amplify seemed to struggle to meet that market. Big players like Pearson, who have decades of experience in the industry, sell their products largely on the basis of their prior relationships with school districts, who prefer to work with companies they already know. Districts have been known to dole out massive no-bid contracts to the likes of Pearson simply because they had had good experiences in the past.

Getting a district to adopt a new product is a difficult task in and of itself. But getting a school district to switch products, abandoning a company that’s been working for them, is even harder, said Karen Billings, the vice president of the education division at the Software and Industry Information Association.

“Schools tend to stay with companies and products that they’ve been successful with,” Billings said. “They’re not going to switch over unless they have a real reason to change.”

Amplify, with its brand-new device and English Language Arts curriculum, was asking many districts to do exactly that, Billings said, counting on the fact that they would abandon prior relationships with tech companies and textbook providers in favor of a new and untested product.

One of Rupert Murdoch’s biggest competitors in the media industry appears to have managed to make inroads in education in a way that Amplify couldn't. Discovery Education, a subsidiary of Discovery Communications, started making an all-digital curriculum just a few years before Amplify, and, though it is still relatively tiny, has since grown into a full-fledged education company, producing digital math, social studies, and science curricula.

But Discovery had a key advantage that Amplify didn’t. It already had a relationship with many school districts, producing supplemental science videos that are used in half of American classrooms.

Discovery also made its first full curriculum in science, where it had significant name recognition and, said CEO Bill Goodwyn, “a big head start, in that we had access to a lot of incredible content.” By the time Discovery launched its first “core” curriculum, in math — a much higher-stakes area for school districts because of testing — it had a five-year track record making curriculum. Amplify’s first and only curriculum was in English.

A deep understanding of how school districts operate – and the sometimes glacial pace of change in the industry — has been important for Discovery, Goodwyn told BuzzFeed News.

“The big three publishers have been out there for so long, and have just dominated the marketplace. It’s not an easy thing to do to disrupt them,” Goodwyn said. “For us it wasn’t a fast, go-to-market strategy where you build a product and go out and sell it. We spent a lot of time talking to districts, understanding what their goals are and what they need and how to give those to them.”

“Clearly,” Goodwyn said, “the education business is different than the media business. You can’t do these things quarter-to-quarter — you have to have a leadership at the highest level that believes in doing these things, in keeping its promises.”

For one company, however, grabbing market share in the education business has been anything but slow. Google was hardly a blip on the education world radar in 2010, when News Corp. bought the testing company that it would eventually transform into Amplify. But more than half of all devices sold in education are now Google Chromebooks, outstripping even iPads in sales.

“Is the industry still ripe for disruption? Absolutely. The disruptor has been Google,” said Phil Maddocks, an industry analyst with Futuresource Consulting. “They’ve come from nowhere.”

Google Chromebooks had a lot of advantages over Amplify’s tablets. They are cheaper than almost any device on the market. They also come with keyboards — a necessity for many state tests, which are increasingly taken by computer, and a feature that is increasingly in demand for older students.

Chromebooks are also better suited to the “extremely fragmented” education market, Maddocks said, where many districts and teachers prefer to piece together content and apps, rather than turning to one company for curriculum, apps, and devices. While Amplify’s tablet was technically “content-agnostic,” meaning it could run other companies’ software, it was envisioned as a “complete mobile learning system,” in the company’s words. It came designed to be bundled with Amplify curriculum, with hefty discounts for school districts if they bought Amplify’s content alongside it. That subscription cost an additional $99 a year.

“They were really offering only one solution,” Maddocks said. “In the past, when we’ve seen hardware try to link up with content, it hasn’t worked. It all comes back to the fragmentation of the market — every district wants a different solution.”

Like Discovery, Google had also already established a foothold of its own in the education world before it began to sell big-ticket items to districts. Most teachers were already using some of its products, like Gmail and Google Drive, in their classrooms, and the company had made extensive outreach to teachers a part of its business model.

Amplify hit a major bump in the road early in its journey, after one of the company's first trial users, in Guilford County, North Carolina, suspended use of the 15,000 tablets it had bought because of serious technical problems, including shattered screens and melted charging cables.

It was a high-profile misstep: Just a month before, Guilford County and Amplify's now virtually defunct tablet had been the subject of a sprawling and mostly positive 5,000-word New York Times Magazine article, “No Child Left Untableted."

Guilford County, an early and major win in 2012, was by 2015 still "by far the company's largest contract," according to Bloomberg News.

The Guilford incident likely took a large toll on Amplify’s business, said Maddocks. “One reason they struggled comes purely down to the Guilford project,” he said. “That was a very public, very media-led failure. … And districts talk to each other about these things.”

“When you’re really small and just starting out, you can’t afford missteps,” said Goodwyn, Discovery's education chief. “We recognized that compared to the Big Three, we were too small to have any issues. We couldn’t screw up.”

Amplify also quickly became a favorite target of two of the most formidable forces in education: parents groups and teachers unions. In the wake of the British phone hacking scandal, the mere association of Rupert Murdoch's name with education set off parents groups, who took down an Amplify-associated venture, inBloom, in part because they said they feared Murdoch's company having a hand in the storing of their children's sensitive data.

Beyond's Murdoch's reputation, Klein, its CEO, was among the education industry's most polarizing figures and has been one of the unions' greatest foes since his tenure at the helm of New York City Public Schools.

And despite how it had looked when News Corp. headed back into the education market in 2010, companies like Houghton Mifflin and Pearson were not as print-bound and slow to adapt as they had seemed. Houghton Mifflin, the biggest player in the elementary education space, made heavy investments in technology, and its sales are now mostly digital, though by a slim margin.

“I really do think they just came in too late to make any real impact,” said Billings, of the SIIA. “Schools had already started using the tablets they liked from the tech companies they liked. The curriculum publishers they’d already been working with had started transitioning with them to digital, if they wanted it.”

In a long letter to Amplify staff announcing the company's impending sale, Klein offered his own explanation. "Amplify's work has been so innovative and transformative that we've been ahead of the market," he said. "That, in part, helps explain what has happened with our tablet business."

Stock Markets Fall Sharply All Around The World

The Dow Jones Industrial Average plummeted nearly 1,000 points.

The Dow Jones Industrial Average plummeted nearly 1000 points

Today's early fall continued what's been a weak year for U.S. stocks. The S&P 500 dropped over 5% last week and is now down almost 12% from its highs in May.

Philippe Lopez / AFP / Getty Images


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China's Stock Selloff Causes Markets To Plunge More Than 8%

Investors sold Chinese stocks in a panic Monday, driving markets down 8.5% — marking the biggest single day loss since 2007.

Aly Song / Reuters

The Chinese stock sell-off accelerated on Monday, driving markets down more than 8% and marking the biggest single day loss since the financial crisis in 2007, Reuters reported.

Last week the Chinese markets closed with an 11% loss. These declines mean the Shanghai Composite Index is down 37% since its peak in mid-June, the Wall Street Journal reported.

"It's difficult to judge whether investors are overreacting, or whether the market is near its bottom," Alex Kwok, an analyst at China Investment Securities in Hong Kong, told Reuters. "This is already a small-scale stock market disaster. Any rebound, if there is any, could be just technical."

On Aug. 11, China devalued its currency. This move sparked concern among investors who interpreted it as a signal of weakening growth in the world's second-largest economy that could cause a global slowdown. Beijing has responded by flooding the credit markets with extra money, AP reported.

Friday, 21 August 2015

Court Rules Home Care Workers Are Entitled To Minimum Wage & Overtime

A federal appeals court has upheld a rule requiring home care agencies to pay the federal minimum wage. Other classes of workers remain uncovered.

Matthew S. Gunby / AP

Nearly two million U.S. home care workers have won the right to a protection most people take for granted: the federal minimum wage.

On Friday, a federal appeals court upheld a Department of Labor rule requiring employment agencies to pay the federal minimum wage and overtime to workers who care for the elderly and sick in their homes.

The ruling brings new protections to a workforce that is 91% female and 56% non-white, according to an analysis of government data by the Paraprofessional Healthcare Institute.

The Service Employees International Union has been working to expand the Fight for 15 movement, which began with a focus on raising wages to $15 for fast food workers, to all low-wage workers, including those in the home care field.

"The women and men who care for our aging moms, dads and grandparents will now be able to provide for their own families, too," said Sarita Gupta, executive director of Jobs With Justice and the co-director of the Caring Across Generations campaign, in a statement.

The decision centered on a three-judge panel's decision that the Fair Labor Standards Act gives the Labor Department authority to determine which types of care work should be covered by wage protections. The current minimum wage is $7.25 an hour.

Home care workers have long been excluded from the Act's coverage, in part due to a broad 1974 Labor Department regulation that exempted "companionship" service from wage- and hour-protections.

Friday's court ruling ends a "sad chapter of racial discrimination that was ingrained in the Fair Labor Standards Act," said SEIU President Mary Kay Henry in a statement. Henry also called on senior and disability rights advocates to now push for a living wage for home care workers.

The Labor Department's decision to extend minimum wage rules to home care workers was challenged in court by the Home Care Association of America, the International Franchise Association, and a third trade association representing the hiring agencies. The federal appeals court rejected that challenge on Friday, saying "the Department's decision to extend the FLSA's protections to those employees is grounded in a reasonable interpretation of the statute and is neither arbitrary nor capricious."

Several classes of workers remain unprotected by minimum wage and overtime laws, including many types of agricultural workers, some domestic workers (such as cleaners and housekeepers), seasonal workers, and employees of small businesses with annual gross sales less than $500,000.

"The decision confirms this rule is legally sound," the Department of Labor said in a statement. "And just as important, the rule is the right thing to do — both for employees, whose demanding work merits these fundamental wage guarantees, and for recipients of services, who deserve a stable and professional workforce."

The remaining challenge for workers and employers will be implementation of the rule — an obstacle that still exists for classes of workers already covered by minimum wage and overtime protection. Many businesses attempt to skirt those laws, and wage theft complaints remain widespread across industries. While investigations are up, a new Labor Department report put the number of workers affected in New York and California alone at 560,000 each week.

"Now it's up to states to ensure that as they implement this rule, no one is harmed in any way by cuts to home care programs or caps on hours," said Gupta.

The Department of Labor is offering technical assistance as well as a 15-month period before the rule's effective date, to aid compliance. "The DOL has repeatedly encouraged states and other employers to take the necessary steps toward implementation," its statement said.

Did McDonald's Rip Off These Viral Photos For Its New Ad Campaign?

Understandably, getting married to food is proving very popular these days.

In July, these engagement photos that San Francisco writer David Sikorski and photographer Kristina Bakrevski created went mega viral.

In July, these engagement photos that San Francisco writer David Sikorski and photographer Kristina Bakrevski created went mega viral.

Kristina Bakrevski

Sikorski's photos were picked up by multiple media outlets nationwide, including People, USA Today and MSN.

Sikorski's photos were picked up by multiple media outlets nationwide, including People, USA Today and MSN.

Kristina Bakrevski

Kristina Bakrevski

Kristina Bakrevski


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Vape Shops In Jeopardy As E-Cigs Face New FDA Regulations

A new study hints that teens who vape will go on to smoke cigarettes. Concerns about the health risks of e-cigs, plus new federal rules, could uproot the $2.2 billion industry.

Joe Raedle / Getty Images / Via gettyimages.com

Just as e-cigarettes have become more popular than tobacco cigs among U.S. high school students, a new study bolsters long-standing fears of public health officials: Vaping may spur teens to try tobacco later on.

The study is only the latest hit to the $2.2 billion e-cigarette industry, which over the last decade has spawned about 8,000 vape shops across the U.S. These stores, which sell plastic and metal pens that can vaporize thousands of flavors of nicotine-laced liquids, are currently unregulated. But largely because of health concerns, the FDA promises to soon release rules that would regulate the battery-powered smokes as tobacco products, even though they don't contain any tobacco.

While vaping has become more popular, teen cigarette smoking rates have dropped precipitously, from 25% of 12th graders smoking daily in 1997 to just 7% in 2014.

Vaping's rise might sound like great news, as e-cigarettes don't expose the lungs to tobacco carcinogens. But some public health experts worry that kids will become addicted to nicotine via sweet-tasting vaping, and then later turn to smoking tobacco, which kills about 6 million people every year.

Over the last three years, e-cigarettes have faced a growing patchwork of local regulations, with 371 cities and 22 counties banning them in locations that also prohibit tobacco smoking. California's legislature, meanwhile, choked on enacting such a ban statewide earlier this month.

The proposed FDA regulations are expected to have much sharper teeth. They could treat each vaping flavor similar to a new drug, forcing manufacturers to conduct proper clinical trials — at a cost of at least $300,000 — showing they don't impact public health. Industry-funded groups such as the American Vaping Association fear these restrictions will wipe out most shops.

"What's happening is that researchers, and the rest of the world, are trying to catch up to the market," health economist Frank Chaloupka of the University of Illinois at Chicago told BuzzFeed News. "There's the potential for real benefits for current smokers. And then there is the issue of kids taking them up."

In the new study, published on Tuesday in JAMA, researchers tracked 2,530 Los Angeles high school students who didn't smoke tobacco in 9th grade. Among the 222 who had already used e-cigarettes, 25.2% ended up as cigarette, cigar, or hookah smokers by the end of 10th grade, compared to just 9.3% of the ones who hadn't used e-cigarettes first.

The study authors were cautious about the findings, saying they didn't prove that e-cigarettes directly cause later tobacco smoking in teens.

In an editorial accompanying the JAMA study, Harvard Medical School's Nancy Rigotti called the results "the strongest evidence to date that e-cigarettes might pose a health hazard by encouraging adolescents to start smoking conventional tobacco products."

Still, she also noted the study didn't distinguish between kids who puffed on a cigarette once and quit and those who went on to became regular smokers — making the data only suggestive, at best.

Joe Raedle / Getty Images / Via gettyimages.com

"Few topics in public health and medicine are as contentious as electronic cigarettes," Rigotti noted in her editorial.

The debate is largely between critics who think vaping will lead to a revival of smoking, and supporters who see the products as a promising way to help cigarette smokers quit.

E-cigarettes work by heating liquid mixtures of nicotine, flavorings (everything from chewing gum to watermelon), glycerin, and other chemicals to create an inhalable vapor. There are disposable e-cigarettes, rechargeable e-cigarettes, pen-sized and larger sizes with dozens of brand names, from the throwaway OneJoy to the over-sized Lavatube.

Critics say that vaping delivers nicotine, an addictive drug, as well as some toxins, and they point to certain studies showing that vapes don't really help people quit tobacco. With use growing among teens, they see vaping as opening a door to later tobacco use, a concern abetted by recent tobacco industry moves into e-cigarettes.

Given the risks, as one group of scientists wrote last year in the journal Circulation, "e-cigarette use should be prohibited where tobacco cigarette use is prohibited, and the products should be subject to the same marketing restrictions as tobacco cigarettes."

Supporters, on the other hand, say those concerns are overblown, and point to other studies suggesting e-cigs are at least as helpful as nicotine gum or patches in helping smokers quit. E-cigarettes lack the cancer-causing carcinogens of tobacco, they argue, and have many times fewer toxins than regular cigarettes.

A British government expert report released Wednesday adds weight to supporters' views, finding that e-cigs are 95% less harmful than tobacco cigarettes. The report's authors even recommended that doctors suggest e-cigs to smokers who want to quit.

"They are a health product," Michael Siegel of Boston University School of Public Health told BuzzFeed News.

What's more, Siegel noted some e-cigarette opponents have taken funding from pharmaceutical companies that market nicotine patches or gums, a conflict of interest acknowledged in the Circulation report.

There's money at stake on both sides. A 2014 World Health Organization report on e-cigarettes cites 18 studies that mention e-cigarettes in their titles. Of those, five had researchers funded by pharmaceutical firms with competing nicotine replacement products, and three had financial involvement with the vaping industry.

Siegel criticized manufacturers for advertising e-cigarettes as glamorous or exciting, which triggers concerns about similar efforts by tobacco manufacturers to entice young smokers to take up tobacco in past decades.

"It is a real tragedy they they are being marketed as glamorous," he said. In part the marketing strategy is inevitable, he added, because any manufacturer who makes health claims for e-cigs would face FDA censure, leaving glitz as their only sales strategy.


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Thursday, 20 August 2015

Architect Of Minimum Wage Protests Gives Rare Public Testimony Against McDonald's

A top union leader intimately involved in the Fight For 15 campaign testified publicly today as part of a Brazilian senate hearing.

Fight for 15 / Via Twitter: @fightfor15

Scott Courtney has spent the better part of the past three years working, mainly behind closed doors, on what has become one of the highest profile labor campaigns in recent memory.

As a strategist and organizer with the Service Employees International Union, Courtney's work is by nature meant to take place behind the scenes. Organizers aren't the story, they explain time and again — workers are.

But on Thursday, at a senate hearing in Brazil called for by a coalition of trade unions, Courtney testified publicly for the first time against McDonald's, the fast food behemoth he has devoted so much time and energy to battling. As one of the masterminds of the Fight for 15 campaign to raise pay for low wage workers, Courtney may be as authoritative as any non-employee can be about how the company is seen by the people flipping its burgers and running its cash registers.

And today, in the Brazilian senate, he called the brand's business model a version of "cannibal capitalism," a business model "based on eating their own."

Fight for 15 / Via Twitter: @fightfor15

Workers, officials, and labor leaders from more than 20 countries attended the Brazilian Federal Senate hearing Thursday morning, many of them flown there by the Service Employees International Union. The union is moving to internationalize its approach to McDonald's, which is struggling to grow sales in the United States but is performing better in many overseas markets, including Latin America.

At the hearing, Brazilian members of Congress Carlos Zarattini and Mendes Thame called for a Parliamentary Commission of Inquiry – the country's highest-level probe – to investigate financial practices and working conditions at McDonald's. Brazilian Labor Prosecutor Leonardo Mendoca also announced the formation of a task force to investigate allegations of labor law violations.

"I am ecstatic about the outcomes. We more than accomplished everything we hoped for," Courtney told BuzzFeed News. "At the end of the hearing, the Senator who convened the hearing asked if we would be willing to attend a meeting convened with McDonald's to discuss their global issues with the unions. We would happily meet them, wherever, whenever."

In addition to prompting this new level of scrutiny, the event was a spectacle designed to call media attention to McDonald's global practices, as part of the SEIU's ongoing pressure campaign.

Arcos Dorados, the McDonald's franchisee in Brazil and across Latin America, defended the company's treatment of workers. "Every month we offer more than 2,000 young Brazilians a chance to start their first job, with training, medical coverage, and opportunities for teamwork," the company said in a statement, "just as we have for more than 1.5 million Brazilians since we opened our first restaurant."

McDonald's employees in Brazil are unionized, Arcos Dorados said, "and receive pay and benefits in accordance with collective agreements reached by the 80 unions that represent them in the country."


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This San Francisco Home For The Elderly Has Opened Its Doors To Young Techies

Amid an unprecedented real estate boom, one longtime home for San Francisco’s low-income retirees is welcoming fresh-faced tenants paying market rates.

Zane Riley, who moved to San Francisco's Mission neighborhood this spring.

William Alden / Via BuzzFeed News

Some luxury apartment buildings in San Francisco lure young tech workers with perks like housekeeping, dry cleaning, and concierge services. But at one newly renovated building in the city's Mission neighborhood, techie tenants are instead encountering amenities like a free blood pressure screening and an educational workshop on arthritis.

That's because the building, in addition to housing some fresh young faces, is also a government-subsidized senior community, where most of the residents are elderly retirees.

For several years now, with the San Francisco real estate market reaching stomach-turning heights, developers have been finding new ways to cash in on surging demand. Gleaming high-rises in the South of Market and mid-Market areas, featuring pricey apartments within longboarding distance of many tech companies, have helped push the median monthly rent for a studio apartment in the city to $2,722 as of June, according to Pricenomics.

But the transformation taking place at the Mission building, a longtime home for the elderly, highlights how the city's real estate gold rush can occasionally veer into the absurd. The building, known as the Vincentian Villa, had been owned by the St. Vincent de Paul Society charity for 40 years, until it was sold to a Los Angeles–based developer for $13.5 million last year. The purchaser, GHC Housing Partners, agreed to extend a federal contract to keep about 60% of the building's units priced far below market rates. But it is now gradually renting out the rest as they become vacant — apartments so small they are called "micro studios" — to tech workers paying around $2,000 a month for roughly 300 square feet of space.

One new tenant, Zane Riley, a 24-year-old product designer from southern Missouri, came across the Vincentian Villa toward the end of a two-month apartment search this spring, while he and his girlfriend, Megan Keesee, were staying with an Airbnb host in Berkeley. "We didn't know anything about the San Francisco housing market," said Riley, an artsy type with a slight country twang, who grew up fishing and swimming in a quarry near his hometown of Blodgett (population: 211). "We got our apartment in Missouri with a handshake, basically."

The young couple, who shared their first kiss on the banks of the Mississippi River, were surviving only on Keesee's starting salary as a public relations associate. The craft beers and cage-free eggs at the nearby Berkeley Bowl were out of reach; for dinner, they would sometimes split a single appetizer at a local Korean place. "We usually walked to McDonald's," Riley said. "That was about the extent of going out."

The Craigslist ads for studio apartments in the Vincentian Villa didn't mention that the majority of the building's units were covered by the federal government's Section 8 housing assistance program for low-income tenants. At first glance, the building, which was recently renovated at a cost of $3 million to include granite countertops and new plank flooring in the units, and a modern-looking courtyard in back, resembles the countless other habitats marketed to aspiring yuppies. Riley said he didn't remember the building's Section 8 status being mentioned on the tour. Only when he later googled the address on a hunch — after signing the lease and paying the security deposit and first month's rent — did he learn the building's history.

The agent who did the deal, Kent Boeker of J.Wavro Associates, said Riley should have known better. "Everyone was told that this was an assisted living, subsidized housing building, where a small number of units were currently available for market-rate tenants," Boeker told BuzzFeed News. "But it's easy to miss if you're not paying attention. I would only say it once."

Boeker's boss, James Wavro, put it more bluntly.

"Anyone who walks in that building will see a critical mass of old people, rolling around the building, hanging out in the common areas," Wavro said. "The way that we train our agents, I tell them, 'Kill the deal, kill the deal, kill the deal.' What I mean by that is, let people know what they're getting themselves into."

"Our joke was, we're going to have multigenerational bridge games going on in the club lounge, which we thought would be kind of fun," Wavro added. "Because you can learn a lot from old people."

A longtime home for the elderly, known as the Vincentian Villa, was sold to a Los Angeles–based developer for $13.5 million last year.

William Alden / Via BuzzFeed News

The San Francisco real estate boom, accompanying the city's rise as a major new tech hub in recent years, has reshaped neighborhoods and inflamed local tensions. A growing number of new residents — many of them young, highly skilled workers — are competing for a limited number of apartments in a few hot neighborhoods, like Soma and the Mission. Even as new apartment buildings have gone up, competition for living space has intensified.

By the end of this year, the city is projected to have a 3.2% apartment vacancy rate, compared with a projected rate of 4.8% for all major U.S. cities, according to the real estate brokerage firm Marcus & Millichap. In a report this spring, Forbes, using Marcus & Millichap data, declared San Francisco to be the No. 1 worst city in the nation for renters.

While developers have seized the moment by erecting structures like Nema, a luxurious apartment complex where some studio apartments rent for more than $4,000 a month, the situation at the Vincentian Villa is more complicated.

The building's new owner, GHC, is one of the largest owners of affordable housing in the United States, and it took certain steps last year to keep the elderly residents in their homes. Crucially, it extended for 20 years the federal contract that had ensured Section 8 affordability for 72 of the building's 124 apartments. Many of the other apartments, though lacking the federal subsidy, are still being subsidized by an ad hoc fund created by GHC and the St. Vincent de Paul Society. (Companies like GHC that own Section 8 housing receive payments from the government to make up for the lower rent.)

The arrangement hasn't attracted much attention from local housing advocates, who say they are instead concerned about buildings like Frederick Douglas Haynes Gardens, a development in the Fillmore district that is apparently at risk of losing its Section 8 designation altogether. "I wouldn't have done a deal that would have required us to displace people to make a profit, or to make a property financially viable," Gregory Perlman, the chief executive of GHC, told BuzzFeed News.

Indeed, GHC is pursuing a more nuanced strategy, with plans to reap its biggest profits from the 52 apartments that aren't covered by Section 8. When residents in those apartments leave — or die — GHC will rent out their homes to new tenants at market rates.

At least 14 such units have been rented out so far. Riley and Keesee, who pay $1,700 a month for a roughly 285-square-foot studio that they share with Champ, their 65-pound German shepherd–border collie mix, were among the first young people to move in. The other new tenants include "young twentysomethings moving to the city for a new job, or even their first job," according to Boeker, the real estate agent.

To speed this process, and also to ease the challenge of renovating the building with elderly people living in it, GHC offered $25,000 last year to any resident who chose to leave. Five people took the money. Perlman said the offer was not intended to drive people out of the 52 apartments that would go on the market. Three of the tenants who took the money, he said, had been living in the Section 8 apartments, which will stay subsidized for 20 years.

But even in those cases, the landlord can benefit from a tenant taking a buyout. When a Section 8 apartment becomes vacant, elderly residents in the other apartments have first dibs on moving there, according to Perlman — creating vacancies among the apartments that can be rented at market rates.


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