Monthly Archives: July 2013

The Pinterest Roadmap Revealed



The rise of Pinterst wasn’t all cocktails and cupcakes. It conquered huge scaling challenges to become the world’s keepsake box. Now as the world ditches the desktop for mobile, how will Pinterest evolve to connect us with the things we love? Today Pinterest’s head of engineering Jon Jenkins gave a surprisingly candid look at the past and future of Pinterest journey to build the interest graph.

Now Pinterest is a team of 140, with 70 engineers, $338 million in funding, and a massive headquarters in San Francisco. But at the start, it was just the three co-founders Ben Silbermann, Evan Sharp, Paul Sciarra, and a single engineer.

2010: “The Year Of The Creation Of The Business”

Pinterest began as a few guys with a mission “To help people discover the things they love and then do those things in real life. With only one engineer, it was almost lucky that Pinterest didn’t become popular yet or the whole thing could have come crashing down.

2011: “The Year Of Scaling Challenges”

Jenkins says that “traffic was doubling every month and half” and provided this traffic graph, though with no X axis about exactly how many page views the site receives. He explained that the site wasn’t exactly built to last at first. “It was originally written in Python, but when you build a website [for a small user base] you don’t think about modularity very much. And when a million people show up on your door step you’re just trying to keep the thing from falling down.”

2012: “The Big Year Of Mobile”

In August it released new versions of its iOS and Android apps that would serve as the modernized foundation of the future of its business on the small screen. Pinterest began learning how people used the service differently depending on their device. For example, in the daytime it sees a lot of phone use as people try to discover new things. They might walk around the grocery store with a recipe pin open on their phone to help them find ingredients. “Then in the evening we see tablet usage increase significantly as they’re trying to make that recipe” Jenkins says.

2013: “The Year Of Adding A Lot More Value To Pins”

Pinterest this year began showing related pins when you pinned something, and providing pin recommendations via email. It also launched expanded pins so recipes would show ingredients, movies would show reviews, and products would show prices. Most recently, it began using the feed editor to recommend more content to you. With big plans afoot, Pinterest also rewrote its entire site — not to handle traffic, but to let multiple engineers enhance it simultaneously without tripping over each other and causing non-stop bugs. “How can we create modules that let engineers go in and work without screwing over the other developers?” He’s convinced that the new modular Python architecture “will allow the organization to scale.”

The Future

Looking forward, Pinterest has five big projects its working on:

Building The Interest Graph:  Unlike other social networks, Jenkins says that “Pinterest isn’t fundamentally about connecting people to other people. It’s about connecting people to interests.”

For years you had little but your own brain and the boards you browsed to find pinspiration. But now Pinterest is lending a helping hand thanks to a ton of data analysis. “Pins can’t exist unless they’re assigned to a board. Out of those boards, we try to identity interests through collaborative filtering, associative rule mining, natural language processing to provide discovery. I can pin five shirts I like and Pinterest derives my interest in fashion.” Recommendations could make Pinterest even more addictive for hardcore users, and help it retain newbies until they’re hooked.

Scaling Big Data: “Figuring out how we’re going to scale the data repositories for pins will only become more complicated as we grow internationally” Jenkins said. That why he says “we’re hiring pretty aggressively” in areas including machine learning, data mining, operations, and infrastructure.

Making Pins More Useful: Expect more pin types to gain expanded information like recipes did. “Useful” could also end up as a euphemism for “buyable”. Pinterest is renowned for driving traffic to ecommerce sites. If it could bring more of the shopping experience inside its site and apps, it could provide value to users while also arguing that it deserves a revenue share or commission from merchants.

Bringing The Grid Onto Mobile: Pinterest’s best known and most frequently copied element is its masonry grid design which allows for rapid intake of visual information. Now it’s trying to get the infinite scroll part of the grid to work on small screens with limited storage. “It’s easy to load things but your phone gets very angry with you if you don’t unload things”, Jenkins says. There’s also be a bit of bringing the mobile onto the grid, as Pinterest tries to take what it’s learning on mobile back to its website. That could include touch capabilities for touch-enabled laptops like the Chromebook Pixel.

Creating A Platform Foundation: “People keep asking ‘When are you going to release an API?’” Jenkins wouldn’t give a firm answer but did reveal a bunch of details. “We are working very closely with a very select set of partners to figure out what the API is that we should release. We are going to work with content providers to offer extended functionality so they can understand how the content they produce is being used in the Pinterest system. Content providers want distribution. If we can help them understand what resonates they’ll be happier, and Pinners will be happier as well.”

Don’t expect it to be rushed out “I might be overly rigorous in how I think about APIs. I want them to be extremely high quality” Jenkins says. Taking a dig at Facebook and Twitter, and following a similar thought pattern as Google+’s Vic Gundotra, he says ”I don’t want to make mistakes other companies have made where they release APIs and then have to pull them back. I wouldn’t be proud of that.”

Today, Jenkins says that depending on what external traffic monitoring site you look at “we’re a top 15 site in the US and higher than that in terms of apps.” comScore currently pegs it at 48.7 million global monthly users. And while you might think Pinterest is a big popularity contest, Jenkins says that if you talk to long-time users, “many of them pin for themselves. They’re not using Pinterest to put on a show or posture externally. People view it as an act of self-expression.”

Just because our world is being digitized doesn’t mean we’ve lost our desire to collect. If Pinterest executes on this roadmap, it could build tree big enough for us all to nest in.

NSA Responds To New Reports On Top-Secret Spying Program, XKeyscore



The National Security Agency thinks we have been misled by The Guardian‘s report of a new tool, XKeyscore, that allows agents to read the content of email and private social media chatter.

“Allegations of widespread, unchecked analyst access to NSA collection data are simply not true,” reads a press release issued by the agency today. “Access to XKEYSCORE, as well as all of NSA’s analytic tools, is limited to only those personnel who require access for their assigned tasks.”

Earlier today, The Guardian released details about the previously top-secret surveillance tool, which reportedly allows authorized analysts to search the name, date, and content of internet communications (picture above). The Guardian argues that this power requires no warrant and was given to scores of analysts, such as their informant, Edward Snowden.

“Our tools have stringent oversight and compliance mechanisms built in at several levels,” continues the report. “Not every analyst can perform every function, and no analyst can operate freely. Every search by an NSA analyst is fully auditable, to ensure that they are proper and within the law.”

However, outspoken critic and Senate Intelligence Committee member Ron Wyden implied that the executive branch has been dishonest in its reporting. After the White House declassified the order requiring Verizon to hand over telephone meta-data, Wyden issued this statement:

“The newly declassified briefing documents released today show that the executive branch repeatedly made inaccurate statements to Congress about the value and effectiveness of the bulk email records collection program that was carried out under the USA PATRIOT Act until 2011. These statements had the effect of misleading members of Congress about the usefulness of this program.”

So, should we believe the NSA? If you trust them.

Zynga's Threatened At Least One “… With Friends” Startup Before, And It Went Nowhere (So Far)



The news broke this morning that Zynga is suing the makers of the Bang With Friends app for allegedly infringing its With Friends trademark.

There’s been plenty of media discussion about the case (I was particularly amused by Will Oremus’ suggestion that Zynga has become “the Lindsay Lohan of Silicon Valley startups“), but one thing that I haven’t seen mentioned is the fact that Zynga has tried to stop other companies from using “With Friends” names in the past. Specifically, its lawyers sent a letter earlier this year to a startup called Apartment 7 saying that it had to change the name of its CupidWithFriends dating website, and that it had until May 24 to comply.

Well, May 24 has come and gone, and today’s news reminded me to check in with Apartment 7 co-founder Jared Tame. CupidWithFriends is still up and running, and Tame told me:

We didn’t hear back from Zynga. We told them no and it’s been a little over 2 months now. We mentioned in our response that their non-response would signal a mutual agreement that we would not enter the gaming space and they would not further pursue legal action against us.

Back in May, I reached out to Zynga and Bang With Friends, because it seemed like any complaints that Zynga had with CupidWithFriends would apply to Bang With Friends too, but neither company commented.

Now it seems that they were already discussing the issue. Zynga’s lawsuit, which I’ve embedded below, doesn’t offer a specific timeline about communication between the two companies, but it does say that after “significant” efforts by Zynga to get in touch with the Bang With Friends’ then-anonymous founders, “Defendant engaged in discussions with Zynga about changing the name from ‘Bang With Friends’.” However, it says those discussions were either “a ploy” or that Bang With Friends has reconsidered.

The lawsuit also acknowledges that Bang With Friends isn’t the only company that Zynga has taken legal action against:

Zynga has diligently policed its rights in the WITH FRIENDS Family of Marks against such would-be infringers, including through the use of cease-and-desist letters, by instituting opposition proceedings with the United States Patent and Trademark Office’s (“USPTO”) Trademark Trial and Appeal Board, by direct outreach to infringers, and through other means.

So why is Zynga suing one company but not the other? Well, a Zynga spokesperson declined to comment on Cupid With Friends, and Bang With Friends hasn’t responded to my request for comment either. One obvious difference is that Bang With Friends is much better-known — in fact, the lawsuit cites several examples where the press compared Bang With Friends to Zynga’s With Friends family of games. Plus, in contrast to Tame’s statement that he has no intention to go into gaming, Zynga’s suit suggests that Bang With Friends has more competitive plans:

In the weeks since [May], Defendant’s plan to expand its infringing activities aggressively was revealed by a person identified as a “Bang With Friends” investor. To Zynga’s great surprise, this investor stated that Defendant intends “to go from ‘Bang’ to ‘Hang’ to ‘Tennis’ to ‘Games’ to other activities.”

Business Insider noted that Zynga was granted the “With Friends” trademark in relation to “computer game software” and “entertainment services” in June of this year (it already had the trademark on specific titles like Words With Friends), so I suppose there could be more legal action in the works.

Zynga v Bang With Friends by TechCrunch

Fullscreen Gives Video Creators The Tools To Collaborate And Make More Money On YouTube



Fullscreen is one of the newer multichannel networks to appear on YouTube, and unlike some others, it’s focused on providing technology tools for its creators to understand their audience and better monetize their videos. As part of our TechCrunch TV tour of new media companies in Los Angeles, we stopped by Fullscreen to get a demo of its platform and learn more about how it’s helping creators.

Fullscreen CEO George Strompolos, who previously had been part of the partner development team at YouTube, told us that he founded the startup with the vision of creating a global media company in partnership with thousands of creators all around the world. But in order to build the video network of the future, the company would have to build technology tools to help creators achieve their goals.

The most recent incarnation of that is the Fullscreen Creator Platform, which it launched earlier this month to give creators a better way to understand their audience, while also providing better monetization tools. The goal is to help increase the chances of success for those creators on its network.

That’s worked for some of the creators we spoke with, including Andre Meadows, founder of the channel “Black Nerd Comedy.” Meadows says he’s a “one-man band,” doing filming and editing all by himself. But Fullscreen has helped him move beyond hobby status to actually make a business out of his videos.

Check out the video above for a demo of the Fullscreen platform and my talk with Strompolos, to learn more about what Fullscreen has to offer. And keep coming back every Monday and Wednesday over the next several weeks to learn more about other new video companies that have emerged. Or check out the other videos we’ve shot around this new YouTube economy:

Evan Spiegel And Bobby Murphy Say Alleged Snapchat Co-Founder Never Had Equity



Snapchat co-founders Evan Spiegel and Bobby Murphy have said in new court documents that alleged co-founder Reggie Brown never had equity in the company.

In February, Brown filed a suit against Snapchat claiming that he has been robbed of his stake of the company. Since then, we’ve heard from sources and court documents that Brown was heavily involved in the early stages of the company. Spiegel has even admitted that Brown came up with the idea for a disappearing messages app.

Now, we’ve learned that despite his significant involvement, Brown may not have had equity in Snapchat.

In the summer of 2010, Evan Spiegel and Bobby Murphy had just completed their sophomore and senior years at Stanford, respectively. They were working on a startup called Future Freshman that would help high school kids get advice and help with applying to colleges.

Spiegel and Murphy split equity in the startup, but it failed to gain traction and the two eventually gave up on it in March of 2011. 

In April, Brown, self-described as close friends with Spiegel at the time, came up with the idea for a disappearing messages app. Brown went to Spiegel with the idea and they recruited Murphy to join them and program the app, initially named Picaboo.

In the summer of 2011, the three were living at Spiegel’s fathers house, on Toyopa Drive in Los Angeles, and decided to rename Future Freshman LLC as Toyopa Group LLC.

“We discussed that change together,” Brown said about renaming Future Freshman LLC Toyopa Group LLC, but he notes, “I didn’t understand it as the same company.”

In a July 13, 2011 email, Brown sent Spiegel a draft of a press release for Picaboo, in which he wrote, “Picaboo is a licensed product of the Toyopa Group, LLC.”

Despite understanding that Future Freshman was renamed to be the Toyopa Group, which owned Picaboo, Brown seems to have thought he had equity in the Toyopa Group, as Picaboo was his idea and he was working alongside Spiegel and Murphy on the project.

Spiegel and Murphy seemed to think that they had all of the equity of the Toyopa Group, as it came from their joint venture, Future Freshman.

When asked in his deposition if he thought that Brown knew he had no equity in Future Freshman, Murphy said, “I don’t know what he believed. All I know is that, again, he was invited to join us that summer, do some work.”

One night that summer, the three had a drunken argument over Brown’s role in the app; the next morning, they talked more level-headedly about Brown’s contributions.

“Essentially, they were talking about switching me out for a different marketing person,” he said in his deposition. “So, you know, I had to protect myself. Who is not going to protect themselves in that situation?”

A source told me in February that Brown would go out constantly, partying at all hours and not working on the app, while Murphy coded and Spiegel worked on design. The source says Brown added virtually nothing to the team beyond the initial concept.

On August 11, 2011, Brown filed a patent entitled, “Timed, Non Permanent Picture Messages for Smart Phone Devices,” that listed his home address and contact information as the sole contact information, and listed Murphy, Brown, and Spiegel as the co-inventors, in order.

On August 16, Brown, Murphy, and Spiegel had an argument on the phone during which Spiegel was offended that his name was listed last. Spiegel hung up and allegedly changed the passwords and forced Brown out of the company. After the call, Spiegel texted Brown, writing, “I want to make sure you feel like you are given credit for the idea of disappearing messages.”

“In the last phone call before account passwords were changed, the point of that was, again, Evan and I had a prior conversation in which we expressed concern that [Brown] would ask for equity,” Murphy said in his deposition. “And we knew that he had the original patent applications in his control. So in that phone call we wanted to hear what he thought he was entitled to given the work–given the work he had done. He, I would say, exaggerated that. And Evan [Spiegel] hung up and I think he–I don’t remember specifically what he was asking for, but it was a lot more than we would be willing to give him.”

“He claimed that he had created the original idea and that he had designed the ghost,” Murphy continued. “And there was some disagreements between Evan [Spiegel] and Reggie [Brown] about what that meant.”

After Spiegel hung up, Murphy says he stayed on the phone and listened to Brown, who Murphy says asked for equity “somewhere in the range of maybe 30 percent.”

On May 6, 2012, The New York Times’ Nick Bilton wrote about Snapchat and its prowess as a sexting app in the first major media coverage of the app.

On May 8, Brown emailed Spiegel to settle the matter. “I understood both then and currently that my role in the process was of a different nature, and was thus willing to accept a significantly less portion of equity than either of you,” Brown wrote.

He said he spoke to patent lawyers, who told him “due to the provisional patent application…I still currently own a third of SnapChat’s IP.”

The patent Brown filed has not been approved by the U.S. Patent Office, and could have been removed by Brown, Spiegel, or Murphy at any time.

“In the summer, we had discussed a 40-40-20 equity breakdown; I am, however, willing to negotiate on this,” Brown continued in his email. “If we can come to an appropriate agreement, I am willing to forego the process of litigation.”

Brown is now suing for a full, undiluted third of the company—which would currently be valued at around $267 million. His claim is mainly based on the patent application, which has not been approved, his initial idea for the disappearing photos app, and his early role at Picaboo and the Toyopa Group.

So far, we haven’t seen any evidence of a written agreement stipulating how the equity of the Toyopa Group was to be divided. We may get a bit closer to the truth at tomorrow’s hearing, during which a judge will rule on Brown’s Motion to Disqualify Quinn Emanuel from representing Snapchat.

Brown’s representatives, Lee Tran & Liang, filed the motion because Brown spoke with and sent documents to a Quinn Emanuel lawyer, Anthony Alden; Alden later said Quinn Emanuel would not be representing Brown, and a few months later, Snapchat hired Quinn Emanuel. The firm has erected an ethical wall, shielding Quinn Emanuel employees from discussing anything related to the case with Alden, but Lee Tran & Liang argue that this is insufficient and that Quinn Emanuel should be disqualified based on precedent.

The legal documents, which are at times dry but do feature a naked man gesturing to Brown during a deposition and a brief mention of my female colleague Jordan Crook and myself, are below.

  

The six documents filed by Snapchat, totaling 185 pages, on July 19 are below in what I think is descending order of interest to readers:

Snapchat Lawsuit July 19 Docs by TechCrunch

The five documents filed by Brown’s representatives, Lee Tran & Liang, totaling 120 pages, on July 25 are below in what I think is descending order of interest to readers:

Brown July 25 Docs by TechCrunch

Disclosure: I am currently a rising senior at Stanford and the president of the Stanford chapter of Kappa Sigma. Brown, Spiegel, and Murphy were all members of Kappa Sigma at some point during their time  at Stanford. By the time I joined the fraternity, in the spring of 2011 (my freshman year), Murphy had graduated from Stanford, and Spiegel and Brown had left the fraternity.

I have never met Brown. I’ve met Murphy once. I have gotten to know Spiegel since the spring of 2012, mostly through interviews for TechCrunch. This in no way affects my objectivity or ability to report on this lawsuit or the company.

Adobe Buys Satellite For Tag Management Technology, Makes Deeper Move Into Marketing And Ad Tech



Following on from its $600 million purchase of marketing platform Neolane, which closed earlier this month, Adobe today made its fourth acquisition of 2013. To further strengthen its marketing and analytics business, Adobe has bought Satellite, a tag management technology that helps marketers with analytics and media tracking across web sites. Satellite is part of a larger interactive marketing agency called Search Discovery.

The news was passed along to us via an email from Atlanta-based Satellite, which it sent out to customers and partners. We’re trying to find out the financial terms of the deal and whether Search Discovery is spinning off just the Satellite business, or if the whole company is joining Adobe as well.

Satellite says in its customer letter that it will continue to operate a business-as-usual service “for the time being.”

It looks like the main significance of this for Adobe is two-fold. First, it is bringing one more piece of functionality to its Marketing Cloud. That portfolio already offers services such as Analytics, Target, Social, Experience Manager, Media Optimizer, as well as the new services from Neolane.

The main idea of tag managing services is to consolidate code for different analytics, marketing and advertising services, implemented by websites to monitor how their content is used. Each piece of analytics/marketing/ad code means speaking with different third-party services, and that can slow a site down. Satellite claims to speed up loading times for sites by consolidating that code and taking it out of the markup language behind the site. It’s aimed at both small and large enterprises, who can use the platform to handle multiple sites. (That could mean that Adobe may use it itself as an SME-targeted, cloud based offering.)

And this also points to the other important part of this acquisition: it appears to put Adobe closer into the domain of marketing services where Google also is playing. Google in October 2012 launched its own tag management service, appropriately called Tag Manager.

Like Satellite, Tag Manager attempts to take some of the pain out of managing all of the different bits of analytics and tracking code that comes across a web site to make it more usable by marketers.

Satellite today notes that the Adobe acquisition doesn’t mean that Satellite will become an exclusively Marketing Cloud-shop: “Adobe will allow the use of Satellite for the deployment of services within and outside the Adobe Marketing Cloud,” it notes. But it also notes that while Adobe will continue to support existing integration between Satellite and Google Analytics, it will “no longer provide professional services to implement Google Analytics.”

Satellite notes that there is some overlap already between what it offers and what Adobe already does, which should help Adobe drive more business to its platform.

“Both Adobe and Satellite have robust partner networks that help facilitate the delivery of our market-leading technology and services to marketers worldwide,” it notes. “Due to our common focus on providing the best solutions available to marketers, we expectedly share some of the same partners. The addition of Satellite to the Adobe Marketing Cloud will enable the combined partner network to deliver the world’s leading set of marketing solutions to an even broader base of customers.”

We’ll update this post as we learn more.

Stipple Partners With Getty Images For Smarter In-Image Advertising



Stipple is announcing a partnership with Getty Images that integrates Stipple’s technology for in-image advertising with Getty’s library of photos.

Technically, there was nothing stopping someone who published Getty’s photos from including Stipple ads inside those photos. However, the new integration should make those campaigns more effective, particularly by tapping into the Getty metadata. Stipple co-founder and CEO Rey Flemings said that one of the things that has “hindered” the use of photos online is the fact that most publishing systems strip the relevant metadata from those images.

Thanks to the new partnership, Getty’s tags will be applied to its photos throughout the Stipple network, and those tags can then be used to place ads. For example, if a Hollywood studio wanted to advertise its new film, it could run a campaign across Stipple’s network that targeted all Getty photos that feature cast members from the film. The companies say this should improve the reach of brand campaigns and increase monetization for publishers.

You can view a sample image with Stipple links here.

Craig Peters, Getty’s senior vice president of business development, said the company is always looking to help its publishers monetize (after all, they’re probably going to be happier about paying for Getty’s content if they’re actually making money from those photos), and that Getty is working with Stipple specifically because the company “can basically align the interest of advertisers and publishers,” delivering ads that are effective and don’t annoy users because they’re actually relevant to the image.

“It really does unlock a lot of the value that sits in that visual asset online that has been under-monetized and under-appreciated up until this point,” Peters said.

In order to take advantage of the new integration, publishers have to be working with both companies, but that’s a group that includes People.com, Condé Nast, and Gannett.

Google Testing Local News In Google Now, As Well As The Limits Of Feature Bloat On The Android Assistant



Google is testing out local news cards for Google Now according to a new report from Quartz, which cites Google’s VP of Search and Assist as the source of the info. The local news card is in the experimental A/B testing phase, with the aim of gathering feedback from users about whether it should go live to the broad Android user base.

The news would tell you things like nearby crimes, as well as restaurant openings and more, but tailored to your specific interests and bound to geolocation coordinates. It’d be kind of like having your town’s daily newspaper delivered directly to your phone, but perhaps more hyperlocal and having that change depending on where you are at any given moment.

It sounds like a good idea, despite the general failure of local news initiatives like Patch, since it works by collecting news from other sources and is probably a better and more sustainable approach to digital local news than new reporting bodies. But in the larger picture of Now, it begins to beg the question of what Google wants its Android assistant to really be.

Google Now is a service that provides quick access to the information that’s most immediately pertinent to you at any given time. Right now that means popping up flight schedules, transit stops and travel ETAs to key locations like home and work, as well as weather and more. It’s the “more” that becomes potentially troubling; Now is currently pretty easy to pick up and understand, but Google has to think carefully about what new features it brings on, lest it become feature-burdened and unwieldy.

The good news is that Google is doing A/B testing with this and other new features it’s contemplating bringing to Google Now. And it’s also true that not all of the cards need to be activated, or turned on by default. But even just making them available risks overcomplicating the service and making it less intuitive and natural for users, which is a big part of its appeal. Also, local news, while a neat trick, doesn’t seem all that useful in an instantly digestible context like this one.

I have one request for Google around Now: keep it clean. There’s a lot the personal assistant ‘could’ do, but that doesn’t mean there’s a lot it should.

Grockit Sells Social Learning Platform To Kaplan, Goes All-In On Learnist, Its “Pinterest For Education”



If you haven’t heard, some of the former giants of the education world haven’t been doing too well, particularly academic publishers, as evidenced by McGraw-Hill’s recent sale and Cengage’s filing for bankruptcy earlier this month. The bigs are faced with a slow death, or slow rehabilitation (with death still a possibility) by digitizing their content and services — and digitizing fast.

Kaplan is one of those familiar names, as the 70-year-old test prep company recently launched its own TechStars-bankrolled “EdTech” accelerator in NYC, while its venture capital arm moves to invest in more digital education startups, like Treehouse. Today, it’s taking another smart step toward a digital future by snapping up the test prep assets and social learning platform of veteran EdTech startup, Grockit, the San Francisco-based maker of social learning apps and technologies.

Why is this a smart mutual decision? Well, for starters, as Kaplan CEO Andy Rosen recently said: “Continuing to cultivate new innovations in education technology is critical to the future of the company and the industry at large.” Yup. For many of these old hands of education, developing digital tools internally will be equivalent to starting from scratch. There has been a new wave of education startups that are innovating and building mobile apps and software across the educational spectrum.

There’s a ton of early-stage capital moving into education, but not so much in the series A and B range. Education startups are starting to feel the crunch and will continue to for the foreseeable future, which presents a great opportunity for what corporate acquirers there are in the education space.

As a matter of fact, CB Insights laid this out for us in May, and as you can see, Kaplan ranked fourth on the list in the number of acquisitions it made over the last three years. With its acquisition of Grockit, the company is just one purchase behind Blackboard and Macmillan, and it really wouldn’t be surprising to see Kaplan continue playing the role of EdTech buyer. As long as it has the cash, there’s no reason not to continue.

It’s also a smart move, because Grockit went through a significant shift of focus over the last 18 months or so. The startup first came on the scene in 2006 as a video test prep course for standardized tests, before re-launching at TC50 in 2008 as a social learning service, combining game-ification with personalized, adaptive learning-based test prep programs. The idea was to become a more effective way for students to study for tests — either by themselves or in groups.

While Grockit has survived, it never quite exploded, and in May of last year, it launched Learnist, which was dubbed its “Pinterest for education.” The team had developed Learnist internally, sort of on a whim as an experiment to potentially use as a feature add-on within their existing solution. They launched it and it took off over the last six months, so eager to ride the wave, they shifted their focus completely to Learnist. Last December, the team raised $20 million from Discovery, Summit, Atlas, Benchmark and others and that cemented it.

While the raise was behind the Grockit name, really it was for the market opportunity the founders and investors saw in Learnist. As a result, no surprise, but we’ve heard from sources that, as a result of this shift, the founders have been looking for a buyer for Grockit since. With Kaplan having one of the most recognizable names in the test prep market, the deal makes a lot of makes sense. And, from what we’ve been hearing, although the two companies did not disclose the terms of the deal, it works out well for Kaplan, because it doesn’t exactly break the bank, while allowing it to acquire digital test prep solutions it can presumably put to use fairly quickly.

In terms of what exactly Kaplan did acquire, Grockit founder Farbood Nivi clarifies, telling us that “Kaplan acquired the Grockit name, the Grockit Test Prep business, and the Grockit technology and platform.” However, Kaplan is not hiring any of its employees, who are all staying on to help build the new platform, which has been spun out of Grockit as its own company under the Learnist name, he explains.

The funds from the round the company raised in December are staying with Learnist and everything remains largely unchanged in day-to-day operations, just as it’s been for the last year, Nivi added. As to the sale, “it will considerably increase our runway and give us options without dilution, so it’s huge for us.”

At the time of the acquisition, the founder says that “over a million people” were using Grockit and, collectively, people had spent “decades studying together” on the platform over its five-odd-year history.

“As we seek to better understand the role of social learning and gamification in test prep effectiveness, the acquisition of Grockit branded assets accelerates our own efforts,” Kaplan EVP Rochelle Rothstein said in the company’s statement today. “We’re looking forward to exploring platform synergies to improve our student experience.”

More on the announcement here and Learnist here.

NSA Director: Don't Worry, Trust Us



General Keith Alexander, head of the NSA, gave the keynote speech at the Black Hat security conference in Las Vegas today. It was more interesting than I expected.

Not for the speech itself, which contained zero bombshells–a transcript and video should be up on the Black Hat site fairly soon, for those interested–or for the questions. There was exactly one non-pre-filtered question from the audience, the short version of which was, “Why do foreigners attack America?” (Was it planted? Your guess is as good as mine.)

That said, the audience seemed to largely be on his side, which surprised me. I had expected the tech-security crowd to be heavily anti-NSA, but occasional heckling was met with only scattered applause, whereas when Alexander retorted to “Read the Constitution!” with “I have. You should too,” the resulting ovation was loud and broad.

He did reveal some numbers. Only 22 people at the NSA, he reported, can approve numbers on the US metadata/business-records list for querying; 35 analysts are authorized to run those queries; and in 2012, fewer than 300 phone numbers were approved for queries, which led to all of 12 reports to the FBI. As for what’s captured and what isn’t:

What interested me most was the attitude. The NSA seems to believe that what Americans are most concerned about is the prospect of some cowboy analyst coloring outside the lines. General Alexander reinforced again and again that the US metadata-collection program has “100% auditability” (though I don’t recall him saying the same about the Section 702 foreign-intercept program) and “Our people have to take courses and pass exams.”

From my notes, which I believe are close to a word-for-word transcription here:

Many of you are saying: ‘I hear what you’re saying but I don’t trust that.’ The Senate Intelligence Committee found no wilful or knowledgeable violations of the law in this program. More specifically, they found no one at NSA had ever gone outside the boundaries of what we’ve been given. What people are saying is, ‘Well, they could.’ The fact is, they don’t. And if they did, our auditing tools would detect them, and they would be held accountable, and they know that from the courses that they take and the pledge that they’ve made … Their intent is to find the terrorist that walks among us.

The notion that people would object to the mere existence of massive classified surveillance programs overseen by a one-sided star-chamber court, even if its analysts faithfully follow all the rules that they have been given, almost seems to have passed him by entirely.

Oh, there was some lip service given: “How do we start this discussion on defending our nation and protecting our civil liberties and privacy?” Metadata analysis was described as “the least intrusive measure that we could figure out. And that’s something we should discuss.” He ended with “Help us defend the country and come up with a better solution. The whole reason I came here is to ask you to help us to make it better.”

But of course this is all completely disingenuous; if the NSA actually wanted to have a conversation about civil liberties and the limits of its remit, it wouldn’t have waited until the discussion was forced on it by Edward Snowden. What General Alexander truly believes is all too clear: “If we tell everybody what we’re doing, then our adversaries will know how to get through our defenses … that’s why I believe the damage to our country is significant and irreversible.” The notion that there might be some optimal middle ground between “don’t let the public know about even the existence of vast surveillance programs that may affect them” and “tell everybody everything” appears to have passed him by. The NSA would clearly prefer that the public’s eyes remain closed and our trust remains blind.

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