Tesla will end its buyer referral program for ‘adding too much cost’

At the end of the month, Tesla will end a long-running referral program that offered incentives for existing Tesla owners to help drive sales. In its recent iterations, the referral system gifted new buyers who found their way to a Tesla through a friend with six months of free charging at Supercharger stations.

Most recently, the referring friend would become eligible for a set of characteristically outlandish prizes, from launching a chosen photo into deep space orbit to a VIP invite to one of the company’s flashy unveiling events, depending on how many qualifying referrals were made. Tesla’s oft-chatty chief executive characteristically announced the news in a tweet.

The referral program was a clever choice by a company with such intense loyalty, putting many Tesla acolytes to work by turning them into semi-compensated brand ambassadors. Unfortunately for them, it wasn’t sustainable.

In follow-up tweets, Musk added more insight to the decision to end the program, noting that the whole thing was “adding too much cost to the cars, especially Model 3.” He further clarified that the program wasn’t being replaced by something new. Instead, “the whole referral incentive system will end.”

Tesla owners will have until the end of the month to hustle for existing incentives. Tesla orders must be placed before February 1 to be eligible. How hard can it be to talk your acquaintances into impulse-buying a high-end all-electric status symbol within a month’s time?

VC funding of cybersecurity companies hits record $5.3B in 2018

2018 wasn’t all bad. It turned out to be a record year for venture capital firms investing in cybersecurity companies.

According to new data out by Strategic Cyber Ventures, a cybersecurity-focused investment firm with a portfolio of four cybersecurity companies, more than $5.3 billion was funneled into companies focused on protecting networks, systems and data across the world, despite fewer deals done during the year.

That’s up from 20 percent — $4.4 billion — from 2017, and up from close to double on 2016.

Part of the reason was several “mega” funding rounds, according to the company. Last year saw some of the big eight companies getting bigger, amassing a total of $1.3 billion in funding last year. That includes Tanium’s combined $375 million investment, Anchorfree’s $295 million and CrowdStrike’s $200 million.

According to the report, North America leads the rest of the world with $4 billion in VC funding, with Europe and Asia neck-and-neck at around $550 million each, but growing year-over-year.

In fact, according to the data, California — where many of the big companies have their headquarters — accounts for nearly half of all VC funding in cybersecurity in 2018. By comparison, only about $300 million went to the “government” region — including Maryland, Virginia and Washington, DC, where many government-backed or focused companies are located.

“As DC residents, we have to think there is more the city could do to entice cybersecurity companies to establish their headquarters in the city,” the firm said. Virtru, an email encryption and data privacy firm, drove the only funding of cybersecurity investment in Washington, DC last year, they added.

“We’ve seen this trend in the broader tech ecosystem as well, with many, large international funds and investment outside of the U.S.,” the firm said. “Simply put, amazing and valuable technology companies are being created outside of the U.S.”

Looking ahead, Tanium and CrowdStrike are highly anticipated to IPO this year — so long as the markets hold stable.

“It’s still unclear what the public equity markets have in store in 2019,” the firm said. “A few weeks in and we’re already experiencing a government shutdown, trade wars with China, and expected slow down in global economic growth.”

“However, only time will tell what 2019 has in store,” the firm concluded.

Netflix adds 8.8M paid subscribers globally, says it now accounts for 10 percent of U.S. TV screen time

Netflix just released its fourth quarter earnings report, which looks mixed compared to Wall Street expectations.

The company added 8.8 million subscribers, well above the 7.6 million that it had predicted at the beginning of the quarter. It also beat estimates for earnings per share — analysts had predicted EPS of 24 cents, but actual EPS came in at 30 cents. However, revenue was a bit lower than expected — $4.19 billion, compared to predictions of $4.21 billion.

As of 4:50pm Eastern, Netflix shares were down about 2 percent in after hours trading.

The investor letter also includes viewership numbers for several popular titles, including “Bird Box,” which the company says will be viewed by more than 80 million households in its first four weeks (45 million accounts streamed the movie in its first week, setting a record for Netflix). It also says that “You” and “Sex Education” are on-track to be viewed by more than 40 million households in their first four weeks on the service.

And these aren’t just people accidentally tuning in for a few seconds — Netflix says it only counts someone as a viewer of they watch at least 70 percent of a movie or an episode.

The letter emphasizes the popularity of these original shows and movies as a way of suggesting that Netflix isn’t reliant on outside studios for its content and continued success.

“As a result of our success with original content, we’re becoming less focused on 2nd run programming,” it says, noting that Netflix originals now account for the majority of unscripted viewing on the service. “We are ready to pay top-of-market prices for second run content when the studios, networks and producers are willing to sell, but we are also prepared to keep our members ecstatic with our incredible original content if others choose to retain their content for their own services.”

Later, the letter returns to the theme of growing competition in the streaming world, claiming that Netflix currently accounts for 100 million hours of viewing per day on U.S. TV screens — which it estimates to be 10 percent of the total. It also suggests that it’s going up against a “very broad set of competitors”: “We compete with (and lose to) ‘Fortnite’ more than HBO.”

“Our focus is not on Disney+ or Amazon, but on how we can improve our experience for our members,” the company says.

Walmart adds four grocery delivery partners

Walmart has partnered with Point Pickup, Skipcart, AxleHire and Roadie to expand its grocery delivery program across four states. Walmart’s grocery delivery is currently available in more than 800 stores, and plans to be in 800 more this year.

To use Walmart’s delivery program, customers go online, place an order and then select a delivery window. From there, Walmart’s personal shoppers select your items and then pass it off to a Walmart delivery partner.

Customers likely won’t notice, or care, which delivery partner shows up to the door with their groceries. All that matters, and all that Walmart is trying to do, is get you your food in a timely manner, wherever you are.

“Customers love our Grocery Delivery service,” Walmart SVP of Digital Operations Tom Ward said in a press release. “As they are busy managing jobs, soccer practice, dance lessons and social schedules we are on a mission to do more than keep a little extra money in their pockets. With the help of these new delivery partners, we’re making grocery shopping even easier by bringing the everyday low prices of Walmart right to the front door of customers.”

Other Walmart grocery delivery partners include Postmates, Deliv, DoorDash and others.

Slack’s product chief is out ahead of direct listing

Slack is losing its chief product officer April Underwood ahead of a direct listing expected in 2019.

Underwood joined Slack, the provider of workplace communication tools, in 2015 as its head of platform after a five-year stint as Twitter’s director of product. She was promoted to the chief product role about 10 months ago. Underwood is also a founding partner of #Angels, an investment collective that pushes to get more women on startup cap tables.

In a Medium post announcing her departure from Slack, Underwood said she planned to focus on investing full time.

“One common story you hear when you talk to founders is that their idea ran as a background process for many years until it moved into the foreground and became a calling too loud to ignore,” Underwood wrote. “And now, I can truly empathize with founders — because that’s happened for me. Investing, which started as a side hustle for me and my #Angels partners, has emerged as the pursuit too inspiring and energizing to be relegated to my spare time.”

During her tenure, Underwood had a hand in crafting Slack’s investment fund — a pool of capital supported by Accel, Index Ventures, KPCB, Social Capital, Andreessen Horowitz and Spark Capital that has invested in 49 projects building on top of Slack to date.

Slack, led by founder and chief executive officer Stewart Butterfield, is said to be preparing for a direct listing, meaning it will go public without listing any new shares, with no lockup period and no intermediary bankers. Valued at roughly $7 billion, Slack has raised more than $1 billion to date from GV, IVP, T. Rowe Price, SoftBank, Kleiner Perkins, Accel and others.

Slack did not immediately respond to a request for comment.

CES and its sex tech fail

We’re coming to you with another episode of Mixtape, the TechCrunch podcast that takes a peek behind the headlines that go beyond tech.

This week, Megan Rose Dickey and I get into a discussion about women’s sexuality, because the world’s biggest “consumer electronics show” revoked an innovation award from Lora DiCarlo, a company that created a sex toy for women. In its initial objection, the CTA cited a clause that entries they believed “in their sole discretion to be immoral, obscene, indecent, profane or not in keeping with the CTA’s image will be disqualified.” That’s not great. Of course it walked the comments back, saying that the product, called Osé, didn’t fit into an existing product category. Except that the product falls squarely in the robotics category.

We also discussed robot delivery dogs, because those things don’t seem like they’re ever going to go away. And finally, people continue to do stupid “Bird Box” challenges based on dumb ideas they have after watching Netflix’s hit movie starring Sandra Bullock. Stop it.

Click play above to listen to the full episode. And if you haven’t subscribed yet, get on over to your favorite podcast platform, whether it be Apple Podcasts, Stitcher, OvercastCastBox or whatever else you use.

Prisma’s style transfer tech creeps into kids’ books

The style transfer craze kicked off by an app called Prisma a couple of years ago led to a tsunami of painterly selfies flooding social feeds for several months, as we reported at the time, before the rapacious, face-snapping hoards shifted their attention toward fresh spectacles. But that’s not the end of the story.

The same tech is now creeping into (paper) kids’ books, via a partnership between children’s publisher startup, Kabook, and Prisma Labs: aka the b2b entity that the original app makers pivoted to in late 2017.

So instead of AI sending robots into a human-slaying frenzy, per the usual dystopian sci-fi storyline, we find ourselves confronted with neural nets being used to serve up contextual illustrations of children so parents can gift personalized books that seamlessly insert a child’s likeness into the story, thereby casting them as a character in the tale.

Not the end of the world then. Well, not unless you view this kind of self-centered content manipulation as a threat to children’s imaginations and developing sense of empathy. (The research on any ‘little princes in training’ will, unfortunately, have to wait a few decades to come through though.)

The Kabook integration is the first consumer product partnership that Prisma Labs has scored, according to a press release from the pair.

And while they note there are other publishing services that offer the chance to insert a bit of custom text and photography into a book they claim their collaboration is the only publishing technology that does this “seamlessly”, i.e. thanks to the AI’s style blending fingers.

“We are excited to be able to work directly with the team at Kabook! to create a truly unique user experience; one that has offered young readers a completely personalized way to enjoy reading,” said Andrey Usoltsev, CEO of Prisma Labs, in a statement.

“Part of our mission at Prisma Labs is to develop new ways for people to express their emotions through digital creations, and through this partnership with Kabook! we are able to take that one step further and bring that to life on the pages of an actual book.”

Kabook, which was set up last year — describing itself as “a technology-based” children’s book publisher, with a focus on kids aged 0-7 years — is currently offering four stories that can be personalized with a kid’s AI-generated likeness.

Three of the books incorporate just one custom image into the story. While a fourth, called Hornswoggled!, makes uses of seven photos in a pirate-themed buried treasure adventure. 

The personalized stories start at $24.99 per book, with hard and soft cover versions available. 

Decrypted Telegram bot chatter revealed as new Windows malware

Sometimes it take a small bug in one thing to find something massive elsewhere.

During an investigation recent, security firm Forcepoint Labs said it found a new kind of malware that was found taking instructions from a hacker sending commands over the encrypted messaging app Telegram .

The researchers described their newly discovered malware, dubbed GoodSender, as a “fairly simple” Windows-based malware that’s about a year old, which uses Telegram as the method to listen and wait for commands. Once the malware infects its target, it creates a new administrator account and enables remote desktop — and waits. As soon as the malware infects, it sends back the username and randomly generated password to the hacker through Telgram.

It’s not the first time malware has used a commercial product to communicate with malware. If it’s over the internet, hackers are hiding commands in pictures posted to Twitter or in comments left on celebrity Instagram posts.

But using an encrypted messenger makes it far harder to detect. At least, that’s the theory.

Forcepoint said in its research out Thursday that it only stumbled on the malware after it found a vulnerability in Telegram’s notoriously bad encryption.

End-to-end messages are encrypted using the app’s proprietary MTProto protocol, long slammed by cryptographers for leaking metadata and having flaws, and likened to “being stabbed in the eye with a fork.” Its bots, however, only use traditional TLS — or HTTPS — to communicate. The leaking metadata makes it easy to man-in-the-middle the connection and abuse the bots’ API to read bot sent-and-received messages, but also recover the full messaging history of the target bot, the researchers say.

When the researchers found the hacker using a Telegram bot to communicate with the malware, they dug in to learn more.

Fortunately, they were able to trace back the bot’s entire message history to the malware because each message had a unique message ID that increased incrementally, allowing the researchers to run a simple script to replay and scrape the bot’s conversation history.

The GoodSender malware is active and sends its first victim information. (Image: Forcepoint)

“This meant that we could track [the hacker’s] first steps towards creating and deploying the malware all the way through to current campaigns in the form of communications to and from both victims and test machines,” the researchers said.

Your bot uncovered, your malware discovered — what can make it worse for the hacker? The researchers know who they are.

Because the hacker didn’t have a clear separation between their development and production workspaces, the researchers say they could track the malware author because they used their own computer and didn’t mask their IP address.

The researchers could also see exactly what commands the malware would listen to: take screenshots, remove or download files, get IP address data, copy whatever’s in the clipboard, and even restart the PC.

But the researchers don’t have all the answers. How did the malware get onto victim computers in the first place? They suspect they used the so-called EternalBlue exploit, a hacking tool designed to target Windows computers, developed by and stolen from the National Security Agency, to gain access to unpatched computers. And they don’t know how many victims there are, except that there is likely more than 120 victims in the U.S., followed by Vietnam, India, and Australia.

Forcepoint informed Telegram of the vulnerability. TechCrunch also reached out to Telegram’s founder and chief executive Pavel Durov for comment, but didn’t hear back.

If there’s a lesson to learn? Be careful using bots on Telegram — and certainly don’t use Telegram for your malware.

Innovaccer nabs $11 million from Microsoft’s VC arm to give doctors a better window into patient heatlh

Cracking the silos of digital health records promises to bring better care to patients by better informing doctors, according to Abhinav Shashank, the chief executive officer of San Francisco-based startup Innovaccer .

Shashank’s company is just wrapping up a $35 million round of financing with a new $11 million commitment from Microsoft’s investment arm M12 (formerly known as Microsoft Ventures).

The corporate investor joins Westbridge, and Lightspeed Partners, who previously committed to the Series B round last year.

Founded in 2014, Innovaccer has been working to roll up data from a number of different healthcare providers including Hartford Healthcare, University of California, Mercy ACO Iowa, UniNet Healthcare Network of Nebraska, Inmediata Health Integrated Solutions of Puerto Rico, and StratiFi Health Network.

Innovaccer estimates that it has saved its customers $400 million in expenses and the company said it will use the funds to build out its software services that connect to lab systems, electronic health records, claims management software and health information exchanges.

“Innovaccer’s approach to data aggregation and analytics fundamentally helps healthcare organizations implement value-based care models and improve care delivery,” said Rashmi Gopinath, partner at M12, in a statement. “We look to invest in startups addressing huge markets with best-in-class deep technology. We are excited to support Innovaccer as they continue to scale and grow in the global healthcare market.”

In addition to providing a unified view into all of the different records that a care provider touches, the company is also looking to layer in prompts to encourage treatment options for future care, according to Shashank.

According to the company’s chief executive, care providers are already incorporating suggestions from the company’s algorithmically based predictive tools in their treatment plans to ensure that patients are getting the best possible outcomes.

“It is rare to see this type of growth in the healthcare industry. Normally, this is only seen in the fastest of enterprise SaaS companies. We think there is tremendous potential to bring the speed and innovation normally associated with enterprise software to the world of healthcare IT,” says Sumir Chadha, Managing Director at Westbridge Capital.