Initial Coin Offerings (ICOs) are a fascinating new beast within the startup world. These novel fundraising vehicles are part tech, part finance, and while offering huge profits, also invite a great deal of potential fraud. In their nascent stage, some quick-fire fortunes will likely lead to significant legal problems when it comes to marketing, PR and promotion.
Investor Relations (IR) professionals have been watching the landscape activity with bemusement as they have seen this all before. Anyone who worked in small or microcap investment marketing during the early days of the digital boom remembers the arrests of naive advertisers entering the space. They also know a worldwide criminal element is endemic to the capital markets. “Pump and Dumps” were not just conducted by some sketchy Florida-based brokerages. Instead, they were often orchestrated by organized criminal groups ranging from gun runners to drug cartels as an easy method to obtain quick cash and launder money. Unfortunately, those same folks are already involved in the ICO atmosphere. These are just some of the challenges that face those entering the brave new world of cryptocurrency.
1. Prepare for Red Tape and Regulations
The days of marketers easily entering and operating within the ICO space are over. Recent SEC statements about initial coin offerings signify there will be greater regulatory and legal issues for those looking to promote this sector. Of these, the biggest concern may be that marketers have little idea whether any given ICO can or will be considered a securities offering.
Precedent indicates ICO advertising will be subject to a set of rules similar to those which govern stock promotion. While this article in no way intends to offer legal advice, the suggestion can be made that marketers across the board should familiarize themselves with the legalities of securities marketing worldwide. Laws of this nature can be intense, ruling over everything from the language of marketing to the techniques utilized as well as the general setup of companies and their third-party help.
At the very least, ICO marketers should study the information that exists on IR legislation with specific attention paid to blue sky laws, securities promotion laws (SEC rule 17b) and broker/dealer laws. Because the reality is that an initial coin offering may be subject to them all. If you’re marketing it incorrectly, this can result in both civil and criminal charges…and no campaign is worth that.
2. ICO’s Can Attract Illicit Activities
Financial marketers are accustomed to completing an incredible amount of homework on their clientele as nefarious operators are prone to be roaming around the marketplace – from those looking to make a quick buck without the expertise to do so, to those engaging in massive Ponzi schemes.
Marketers, writers, and technologists are now being approached by parties looking to apply their services to initial coin offerings, without having the luxury of this research experience. Moving forward, to guarantee the safety of their businesses and reputations, these providers will need to conduct an incredible amount of due diligence regarding who they decide to represent, partner, and work with.
As many in the space can tell you, if you are approached by two lone guys with a white paper looking for ICO work, it is time to think critically as criminal organizations love securities manipulation. And they are already in the market for ICOs operating abroad. That is why you must extensively study the value, team, and plans of any potential clientele or employer. Marketing a scam can ruin a reputation. Marketing for a criminal organization can ruin a lifetime.
3. Startup Marketing Problems are ICO Marketing Problems
It is important to remember that ICOs are meant to be more than a quick cash grab. They are a disruption to the market with genuine staying power and failure to consider their long-term implications can have negative effects on every aspect of the business model, including its marketing.
When a new sector garners interest, it doesn’t take much to turn that intrigue into profit. But this window is short as novelty and hype can only last for so long. Right now, ICOs are doing little more than utilizing social media marketing and writing up white papers to leverage buzz for their offering. But investors, participants, and backers are bound to want more. When they do, these quick and easy promotional tactics must evolve into truly powerful marketing that leverages expertise, thought leadership and differentiation through multi-channel finesse. In other words, a lot of folks that quickly entered the space will find themselves just as quickly kicked out of it.
If you’re interested in blockchain, ICOs, and Ethereum in particular, check out our TNW Answers session with Ethereum’s creator Vitalik Buterin today: Post your questions here!
Amazon’s original Echo gets a much-needed upgrade
With a good software-driven product, the hardware is almost inconsequential. After the unboxing and the setup, it just sort of fades into the scenery. That was always the case with Amazon’s original Echo, but even as Alexa continues to do all of the hard work, the grandaddy of smart speakers was in dire need of an update.
It’s been nearly two full years since the first Echo was made available to Amazon Prime subscribers. In that time, the company added six new members to the Echo family (seven if you count the Tap, which Amazon kind of, sort of does) — and in the case of the Echo Dot, did one full product refresh. Google entered the space in a big way with Home, and both Apple and Microsoft have their own takes arriving by year’s end.
While it’s true that Amazon’s products have rarely been about the hardware itself, the original Echo was long overdue for a rethink, as devices like the Dot started blowing past it on the company’s Top Seller charts. Announced at an event at Amazon’s Seattle headquarters last month, the all-new Echo finds Amazon looking to remain competitive in the field it pioneered.
The new Echo is more compact than the original. It’s also better looking, with five swappable shells designed to help it better blend in with its surroundings. The sound has been improved this time out, finally embracing the “speaker” part of the smart speaker category. Perhaps most importantly, however, it’s cheap. At $100, the new Echo is a full $80 cheaper than its predecessor — and $30 less than its closest competitor, Google Home.
It’s Amazon doing what Amazon does best: undercutting the competition.
Rumors started circulating about a new Echo a few months back. The line was long overdue for an update, the competition was intensifying and Amazon appeared to be working its way through the last of its Echo back stock. At the time, leaks positioned the product as a HomePod competitor, a high-end device with a new design and premium audio positioned to compete against Apple’s $349 Siri speaker.
Of course, ultra-premium has never really been Amazon’s speed. The Echo’s populist approach has always been a big part of its appeal — a fact the Dot’s $50 price tag really drove home. Alexa users are primarily interested in finding an affordable way to make the smart assistant a part of their home, so the new Echo splits the difference on pricing, while delivering some additional hardware perks that help it stand apart from the best-selling Dot.
It also splits the difference on sizing. The company has shaved about four inches off the original Echo, bringing it down to just a hair under six inches, with a footprint roughly the size of a pint glass (albeit without the tapered sides). It’s not nearly as compact as the Dot, but you’ve got to have a little height to thing if you want to get anything out of those on-board speakers.
The top of the Echo has the same button layout as the second-gen Dot, including volume up and down and Action, which does a variety of different things, including waking the Echo, turning off times and enabling WiFi setup mode. And, perhaps, most importantly, there’s the Microphone Off button, which allows a little extra privacy. Tapping that will turn the LED ring around the perimeter a bright, unmistakable red.
When listening for a command, the ring lights up blue, as always — though, the Echo is always listening, of course, lying in wait for its wake word. Conversations are sent to Amazon’s servers in encrypted form, “including a fraction of a second of audio before the wake word,” according to a statement the company offered up to us earlier this year. But a safe rule of thumb is, if you don’t want what you’re saying sent to the cloud, turn the microphone off.
On the bottom is a small hole you push a finger through to remove the case, of which there are a half-dozen available at the moment, including three fabric colors (black, gray and off-white), two faux wood colors and a shiny silver cover. The swappable cases were a smart move for Amazon — the novelty of owning an Echo-style device has worn off slightly in recent years and many users likely want a product that mostly blends into the background.
The unit Amazon sent along came with the heather gray fabric case, which, as one coworker quickly pointed out, looks as though it’s drawn some pretty direct inspiration from Google’s Home/Pixel design language. Whatever the case, the options here are definitely better for most homes than the RadioShack-style black plastic design of the original Echo.
In the past year, sound quality has become a much bigger priority for smart speakers. There’s the HomePod, of course, and the Google Home Max — both of which are being positioned as speakers first, with a smart assistant built in. There’s also been a recent deluge of third-party manufacturers like Sonos, Sony and Harman building their own premium systems, featuring Alexa and Google Assistant.
The new Echo is not that. The sound is definitely improved over the earlier model, but for the time being, the company seems to content to let those third parties do heavy lifting when it comes to building audio-first systems. That, after all, would mean a marked increase in sticker price, making the standard Echo prohibitively expensive for many users.
The addition of the 2.5-inch woofer and 0.6-inch tweeter (same as on the new Echo Plus) means the Echo’s not bad for a $99 speaker. It gets reasonably loud — I had it on a max volume for a bit in the office, and it was distracting but not deafening (sorry coworkers). It’s about the quality you’d expect from a cheap, portable Bluetooth speaker.
It’s good for listening to music or podcasts while washing the dishes or cleaning the apartment, but I wouldn’t want it to be my main home speaker. I’d take something like the similarly priced JBL Charge 3 for that purpose, any day of the week. The good news on that front is that, in addition to multi-room audio through other Echos, the device can be paired to another Bluetooth speaker during setup and features an auxiliary out jack on the back.
Amazon’s standard seven microphone array is back, as, of course, is its far-field tech, which allows different Echos to work in tandem, defaulting to the unit closest to the person speaking. Amazon’s got the microphone down. It was able to recognize my hushed tones from around 20 feet away. Though playing music loudly does impact its ability to hear well, cutting that range by about half in my testing.
Amazon has had a steady march of new skills since releasing the first Echo back in 2014. Earlier this year, the company announced that it had topped the 25,000 mark. Of course, it’s a pretty broad spectrum, as far as usefulness is concerned. Some are pretty game changing for the line. Calling is a big one, letting the device ring other Echos or smartphones. Ditto for voice recognition — Amazon was a bit late to the game on that, but the ability to distinguish speaking voices is a big deal for Echo homes with multiple residents.
Alexa is about to get a big connected home overhaul, as well, bringing new controls to the app and the addition of Routines, which lets users customize multiple features into scenes like “morning” and “evening.” Neither were actually available at the time of testing, but both will be rolling out soon, as the company looks to become an increasingly important presence in the smart home category. In fact, that’s essentially the Echo Plus’ raison d’etre, which is basically the new Echo, only with easier smart home on-boarded (and an additional $50 price tag).
Increased competition from Google, et al. has been a great driver for the line. The new Echo is pretty much exactly what it should be: it’s smaller, better looking and has improved audio, all while staying under $100. The space is only going to continue to heat up over the next several years, and Google is certainly giving Amazon a run for its money with an extremely capable system and far better mobile distribution.
But the line is still synonymous with smart speakers, and Alexa gets more and more capable with each day. It’s not as affordable as the Echo Dot/Home Mini or as flashy as the HomePod/Home Max, but the new $99 Echo is going to sell like hotcakes this holiday season.
Nintendo nabs two-thirds of monthly game hardware sales thanks to Switch
Nintendo has managed to lead the industry in video game hardware sales – by a wide margin – for September, which is a very promising sign going into the holiday shopping season. The Nintendo Switch helped this immensely, leading the industry as the top-selling console for the third straight month, and the fifth month overall since its introduction seven months ago.
Switch’s U.S. sales have now topped 2 million units, which is great considering that the Wii U sold all of 6.23 million units across North America during its entire time on the market. Nintendo Switch’s success was also bolstered by continuing 3DS device family sales, as well as Super NES Classic Edition sales, both of which helped it not only lead, but essentially dominate the video game hardware market.
Nintendo Switch is moving into some high-profile software releases for Switch that should help it gain even more consumer traction, including Super Mario Odyssey, which lands on October 27 and which has been widely praised by early players and critics, and The Elder Scrolls V: Skyrim, which, despite being a port of a game that’s now nearly six years old, will still no doubt be a popular download.
Nintendo also just released a software update for the Nintendo Switch that allows data transfer between consoles, including saves, and I can confirm that this works as advertised from personal experience. It’s also added the ability to save and share video clips from certain games, which could help raise the hype factor around high-profile releases. Also, and again from personal experience, this console has basically had just a ton of great releases thus far, which makes me very excited about its future.
Uber asks drivers to pay $115 for a shot at extra Halloween earnings
A promotion from Uber offering drivers the chance to earn a 33 percent earnings boost in exchange for an upfront payment of $115 is causing controversy, and has lead some to accuse the controversial ridesharing company of charging drivers to work.
One damning critique, from NYC-based technology ethnographer Alex Rosenblat, argues that the format of the offer is deceptive, as the headline (“Celebrate Halloween early by earning 33% more”) is larger and bolder than the rest of the copy, which clarifies that this is at the expense of $115 from the previous week’s earnings. She also mentions that the format of the promotion is similar to other Uber driver promotions, where drivers don’t have to pay in order to take part.
Uber states that if drivers earn more than $349 in a week, they’ll ultimately come out on top and make a profit. Given that Halloween is party season, and people are more likely to leave their cars at home in order to go drink, this doesn’t seem like a particularly insurmountable number. Indeed, an Uber representative I spoke to described it as “one of the busiest nights of the year.”
But obviously, there’s an element of risk involved. There’s no iron-clad guarantee that they’ll make that money back. What if their car breaks down at the start of the week, or business is unpredictably slow, either due to some inclement weather, or a saturation of available drivers, all chasing the extra bonus?
Before we get hyped up, it’s worth clarifying a few points about the promotion.
- It’s only taking place in a handful of markets.
- It’s not permanent.
- The experiment is an undertaking between Uber and two researchers at MIT. According to an Uber representative, the study looks at “the value of flexibility, specifically the flexibility that the Uber app offers by comparing it to taxi-like lease models where you pay an upfront ‘fee’ rather than as a function of the work you do”
- It’s opt-in. There’s no obligation to take part, at all.
- Drivers are informed that they’re taking part in an experiment, via the terms and conditions.
- Uber has been pretty transparent. You can actually read the research paper associated with this experiment here. It costs $5, and I just got a copy for free, as the National Bureau of Economic Research offers free access to the press. That said, it’s a pretty dense piece of academic writing, and I haven’t been able to fully digest it yet. If there’s anything particularly interesting in it, I’ll update this post.
I’m not sure I agree with Rosenblat’s argument that the promotion is deceptive. The only way you could be deceived is if you merely read the headline, and then pressed “okay.” The copy is plainly written, straightforward, and is explicit about the nature of the agreement. The very first sentence reads “Buy a week of accelerated earnings for $115.” The only thing that isn’t immediately clear is that drivers are taking part in an experiment.
As a regular reader of the /r/uberdrivers subreddit, I agree that the format of the promotion matches closely the design previous Uber promos. Is that because Uber is deliberately attempting to muddy the waters, or because Uber has a distinct branding and design language that it uses across the entirety of its digital real estate? Personally speaking, I’m inclined to think the latter.
Rosenblat, quite reasonably, makes the case that there’s something very troubling about the idea of an company experimenting with someone’s income. In his post, she argues:
“When Uber leverages its ongoing employment relationship with its drivers to experiment with their livelihoods for academic research purposes, it also raises a few questions and concerns regarding Uber’s power over these research subjects.”
I spoke to him over Twitter, where she clarified further what she meant by this:
“There’s a vast information and power asymmetry between Uber and its drivers, and promoting certain pay schema where Uber controls dispatch for the rides you will receive, comparative promotions, and your eligibility to work makes this less of a straight forward employment auction, and more of a gamble.”
This element of a gamble doesn’t sit easy with Rosenblat, who correctly pointed out that circumstances can emerge that rob people of not only the chance to make the bonus, but also the $115 upfront fee. “If you’re ill that week, or something renders you unavailable, you lose the down payment to afford flexibility. It strikes me as an odd exercise to induce drivers to sign up for shifts that contract the rhetorical terms of the job.”
Rosenblat acknowledges that Uber is no stranger to experimenting (or indeed, adjusting) the terms and price of its service. This is just a continuation of that trend, and may prove beneficial for certain drivers. “Uber and others, including its competitors, experiment with pay incentives all the time,” she said. “And it may well be that having a variety of options for work contract configurations benefits the diverse motivations drivers have to do this job.”
That, I think, is the most salient point of all. Uber’s workforce of drivers is as diverse as it is massive, and judging by the significant attrition rates, the current one-size-fits-all model isn’t working. Perhaps this academic research is a necessary evil in order to ensure that the company is able to serve not only seasoned full-time veterans, but also casual drivers, who take to the streets as part of their side-hustle, in order to earn a bit extra money.
I reached out to Uber for comment on this story. A spokesperson said: “Drivers tell us that they value the ability to choose when, where and how long to work. This academic study is part of broader efforts to better understand the extent to which drivers benefit from Uber’s flexible work model in quantitative terms.”
It’s worth reminding ourselves that this is just a small experiment, taking place over a short period of time in just a couple of the markets that Uber serves. But I do worry about the implications about what happens if this experiment is successful, because it could see Uber pursue a more aggressive gambling element to its business model. That’s not always going to work out for the driver.
The problem with gambling is that the house always wins. Always. And in this instance, Uber is the house.
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