• Luma, a Sleek WiFi Router, Raises $12.5 Million from Accel and Amazon

    Screen Shot 2016-04-08 at 9.37.35 PMFinally, companies have begun to recognize a long overlooked opportunity to develop a next-generation router that looks sleek and is far more user-friendly than the networking hardware of yesteryear.

    Some contenders are the established companies themselves, including Asus, D-Link and Netgear, all of which have now have bells and whistles like parental controls, the ability to prioritize traffic based on network and device, and apps that help users repair their home network via smartphone or tablet.

    Newer entrants, including Google’s new OnHub router and two-year-old Eero, feature both more elegant designs and far greater ease of use, though OnHub gets mixed performance reviews. Meanwhile, Eero strongly suggests that users buy more than one, which can quickly become expensive. (The company says that each router covers roughly 1,000 square feet. A three-pack of Eero units costs $499.)

    Luma, a two-year-old, Atlanta-based entrant, may give them all a run for their money.

    For one thing, like the Eero, Luma’s glossy WiFi routers look like something Apple might have come up with. Luma, which like Eero, works best when sprinkled around the home, also offers more coverage and is more affordable by design. Each unit covers roughly 1,500 square feet, and a three-pack costs $299, compared with an individual unit, which costs $149. (Originally, Luma planned to feature pricing similar to Eero: $199 per unit and $499 for a three-pack.)

    Perhaps most important, especially to parents: Luma features the kind of network controls you might find at a large company.

    More here.

  • Crisis Experts on Amazon’s Latest Lob (and What Could Be Next)

    img-thingWhen a New York Times piece came out in August that described Amazon’s workplace culture as “bruising,” Amazon cofounder and CEO Jeff Bezos acted quickly to dampen the story’s blow. He wrote a memo to employees saying the account “doesn’t describe the Amazon I know” and pointed out a separate piece by an Amazon engineer who described the Times article as “utter reader bait.”

    It was a smart approach, suggests Marina Ein, whose Washington, D.C.-based crisis communications firm has represented Michael Milken and Dominique Strauss-Kahn, among others. “I thought the company was acting on very good advice,” she says.

    More confounding to Ein is a new post authored by former journalist and current Amazon spokesman Jay Carney, in which Carney not only systematically attacks the now two-month-old Times piece for being imbalanced but works to undermine several former employees quoted in the story.

    One is former site merchandiser Bo Olson, who spent roughly 20 months at Amazon and had told the Times for its story, “You walk out of a conference room and you’ll see a grown man covering his face . . . Nearly every person I worked with, I saw cry at their desk.”

    Wrote Carney of Olson today: “His brief tenure at Amazon ended after an investigation revealed he had attempted to defraud vendors and conceal it by falsifying business records. When confronted with the evidence, he admitted it and resigned immediately.”

    “I think it’s crazy,” says Ein of Carney’s unexpected missive.

    More here.

  • Amazon Softens Blow of Times Piece, But Attorneys Warn Against Celebrating Too Soon

    dnews-files-2013-05-drinking-champagne-improves-memory-660-jpgIn recent days, Amazon has worked to soften the blow of a blistering piece about its culture in Sunday’s New York Times. In the article’s immediate aftermath, Jeff Bezos wrote a memo to employees, saying the account “doesn’t describe the Amazon I know or the caring Amazonians I work with every day.” He further pointed employees to a newer piece by current Amazon engineer Nick Ciubotariu that praises the company’s workplace environment.

    The moves helped push the story in a positive direction for the company, as did the Times’s own public editor’s assessment of the story, which, she wrote Tuesday, should have provided more balance and context. (The Times’s executive editor, Dean Banquet, later let her know that he disagreed entirely with her assessment.)

    Still, employment attorneys suggest it may be a little soon for Amazon to break out the bubbly. They think there could well be a class-action lawsuit in the many anecdotes cited by the Times of employees who were treated poorly — particularly those who appear to have they lost their jobs owing to health issues and other demands outside of Amazon.

    Says Wilma Liebman, a visiting scholar at Rutgers University School of Management and Labor Relations, who spent three terms as a member of the National Labor Relations Board (including, most recently, as its chair): “Being a very tough boss, not being nice, not being sympathetic – that isn’t illegal in itself.” Violating overtime law and discriminating against women because they are pregnant is, however.

    More here.

  • Same-Day Delivery Takes One On the Chin

    oofOver the weekend, eBay took down a standalone app for its $5 same-day delivery service “eBay Now.” The company, which continues to make the service available online, is “rethinking how it wants to handle the high costs associated with running same-day delivery services,” reported TechCrunch.

    It would be a mistake to declare same-day delivery economically unfeasible because of eBay’s sudden ambivalence about it. It’s tempting, though.

    Despite the glut of same-day delivery services to materialize in recent years – from Google and Amazon to Deliv and PostMates – same day delivery services continue to face major challenges.

    The biggest hitch appears to be the limited base of customers who are willing to pay more for faster service. Bargain hunters on eBay may be especially averse to additional fees. (Only a fraction of a small retailer’s sales come from customers who also opt for same-day delivery, as Reuters noted last week.) The same seems true of Walmart, which launched its same-day delivery pilot program in 2011 and is still testing it in just three markets.

    But they’re hardly alone. According to a recent business intelligence report by Business Insider, only 2 percent of all shoppers living in cities where same-day delivery is offered have availed themselves of the services. Meanwhile, 92 percent say they’re willing to wait four days or longer for their e-commerce packages to arrive.

    Very possibly, not all of these consumers have been educated about the new offerings they could be using — dazzling applications through which workforces are now mobilized with a few taps of a smart phone. And same-day delivery margins are surely better than during the dot.com era, when companies like Webvan invested heavily in infrastructure.

    Whether they’re good enough appears to be an open question. For example, even with an extremely efficient fulfillment system, the same-day delivery company Instacart marks up its goods meaningfully over standard grocery store prices.

    Someone seems likely to figure out how to bring the various pieces together at scale. Uber, whose logistics system grows more sophisticated by the day, may be the strongest candidate for the job.

    EBay has piles of data at its fingertips, too, though. That it’s cooling to same-day delivery after two years of experimentation — and planning to focus more on helping shoppers buy items online that can be picked up in stores — is worth slowing down to consider.

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  • What Is Amazon Thinking?

    amzn-amazon-stock-logoBack in October, when the bestselling book about Amazon, “The Everything Store,” was first published, I talked about Jeff Bezos with Michael Maccoby, a psychoanalyst who writes about business executives and teaches leadership at Oxford’s Saïd Business School. His impression of Bezos, he told me, was that Bezos needed a strong right-hand man, something that Bezos – unlike Bill Gates, Steve Jobs and others – hasn’t seemingly had or wanted. Maccoby then veered into what sounded slightly absurd to me at the time, even if it made for provocative copy; he compared Bezos to Napoleon.

    In recent weeks, the analogy has begun to seem a little less outlandish.

    As I noted in my interview with Maccoby, both Bezos and Napoleon enjoyed success at a young age, both rejected the established wisdom, and both took on seemingly invincible enemies and defeated them.

    Napoleon also pushed his luck eventually, ignoring repeated advice not to invade Russia. And however stretched, it’s hard not to see some comparisons to Amazon’s recent assault on suppliers that have fallen out of the company’s favor. Yesterday, it was Warner Home Video, whose popular movies Amazon is refusing to pre-sell or market, much to the chagrin of its customers.

    Two weeks ago, it was the German publishing company Bonnier Media Group, the delivery of whose books Amazon has slowed dramatically because Bonnier seemingly refuses to give Amazon a bigger cut of the earnings of its electronic books.

    Meanwhile, the publishing house Hachette and Amazon have been at odds for months, reportedly over deep discounts on Hachette’s electronic books that Amazon wants to impose. While publishers are rooting for Hachette’s CEO, no one is expecting a quick fix, and Hachette, its authors, and consumers are being made to suffer in the meantime. Said one author to CNN Money this week, “I feel like I’ve been stabbed in the back by a company I supported.”

    Are its tactics going to stir up a tsunami of congressional subcommittees and political investigations and give ammunition to Walmart and Target, which sorely want to take back the ground that Amazon has stolen from them? Will they embolden Alibaba, which just opened its first online storefront for U.S. customers? We don’t know yet, but what’s worse, it doesn’t seem like anyone at Amazon is asking these questions.

    Back in October, Maccoby noted that “Napoleon was very successful as long as he had Talleyrand as his foreign minister.” When he lost Talleyrand, he spun out of control. “The danger with someone like Bezos is the same danger that Napoleon had,” Maccoby had added. Without enough pushback, “you can go too far.”

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  • In Talk of Amazon and UPS Delivery Drones, a VC Sees Dollar Signs

    cyphy_works_uavAmazon and UPS made big news this week, disclosing that they are experimenting with flying parcel carriers, respectively.

    But the companies’ eventual use of drones isn’t what’s interesting to VCs like Bilal Zuberi, an investor with Lux Capital who has been studying the drone space for several years. The real story, as far as he’s concerned, is that two major commercial deployment opportunities have come into view, validating the market for unmanned aerial vehicles (UAVs) — and creating exit opportunities for them.

    The development is of particular interest to Zuberi, whose firm owns a piece of CyPhy Works. CyPhy builds UAV hardware and software and could ultimately be involved in delivering your Amazon loot.

    Jeff Bezos hasn’t invested in the company, but CyPhy was founded by iRobot cofounder Helen Greiner, and Zuberi tells me that Bezos is “close to the iRobot family.” (Bezos has invested in Rethink Robotics, a manufacturing robot company started by iRobots cofounder Rodney Brooks.)

    Even if Amazon — which acquired the robotics company Kiva System last year, paying $775 million for the company and putting its robotics warehouse workers to use — doesn’t buy CyPhy, Zuberi suggests that Amazon’s embrace of delivery robots could encourage other potential acquirers from Walmart to FedEx to enter the market.

    “People always ask me, ‘If you’re successful, who would buy you guys?’ Well, Amazon [has bought a robotics company]. Why would UPS or FedEx not buy one of these [UAV] companies?”

    Of course, that’s all years down the road. UAVs, currently used in military applications, can’t access U.S. national airspace until the beginning of 2015. And initially, only limited drone activity will be permitted so that the Federal Aviation Administration can adjust its policies if need be.

    Even then, observes Zuberi, companies like Amazon and UPS will likely stick to demo deployments for a while, as they figure out a raft of likely issues that extend well beyond picking up and delivering boxes to the right location. Among numerous other considerations, the companies will need to determine how to tightly integrate the technology into their supply chains and ensure the drones’ sensors can operate safely in crowded neighborhoods.

    Zuberi thinks that by the time drones are flying paper towels to consumers, the technology will work as it should.

    “I love where you have military and government use cases involved,” he says, “because they test and they test for resiliency and redundancy. These guys can’t have failures. Everything has to be perfect.”

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  • Does Jeff Bezos Need a Wingman?

    jeff_bezos_headshot1Yesterday, Bloomberg published an excerpt from a new book on Jeff Bezos that portrays the billionaire CEO of Amazon as a brilliant but ruthless dictator, one who treats workers “like expendable resources.”

    Michael Maccoby, a psychoanalyst who writes about business executives and teaches leadership at Oxford’s Saïd Business School, doesn’t view Bezos’s tendencies to mistreat employees as his biggest liability, though. Rather, it’s his lack of a strong number two.

    Amazon’s success has certainly been stunning. As the book points out, 20-year-old Amazon now has roughly $75 billion in annual revenue, a $140 billion market cap, and nearly 100,000 full-time and part-time employees, up 40 percent from last year. In late summer, Bezos personally acquired the Washington Post newspaper and some related properties for $250 million.

    Maccoby, who has worked closely with 40 CEOs over the years but has studied many more, thinks Bezos resembles “narcissistic visionaries” like Steve Jobs, Larry Ellison, and Bill Gates — with one major exception. All had a right-hand man; Bezos seemingly does not. And “that kind of personality needs to have strong partners who balance them and who complement their skills,” insists Maccoby.

    Maccoby points to Microsoft co-founder Bill Gates, who, in the company’s earlier days, could dream about the future while sidekick Steve Ballmer obsessed about Microsoft’s day-to-day operations. Maccoby also cites Steve Jobs’ relationships, first with his Apple cofounder Steve Wozniak and much later with Apple executives Tim Cook and Jony Ive. And there is Oracle’s Larry Ellison, who has brought in a string of executives over the years, only to chew them up and spit them out. (Ellison’s current number two is co-president Mark Hurd.)

    Asked whether Bezos might be an exception to the rule, Maccoby says, “So far, so good.” Still, he thinks Amazon’s decision to forego profits in favor of reinvestment are reminiscent of numerous endeavors throughout history, including those of, gulp, Napoleon.

    It’s not necessarily an unfavorable comparison. Both enjoyed success at a young age, both rejected the established wisdom, and both took on seemingly invincible enemies and defeated them. If historians are to be believed, Napoleon – like Bezos – also had unrivaled intellectual powers and an astonishing capacity to integrate information from different disciplines.

    Of course, as brilliant as Napoleon was, he eventually pushed his luck, ignoring repeated advice not to invade Russia. Says Maccoby: “Napoleon was very successful as long as he had Talleyrand as his foreign minister.” When he lost Talleyrand, he spun out of control.

    “The danger with someone like Bezos is the same danger that Napoleon had,” Maccoby adds. Without enough pushback, “you can go too far.”

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