Hackey could make controlling your smart home as simple as turning a key

Cerevo hackey

(By Masaru Ikeda, The Bridge) – Tokyo-based Cerevo, the Japanese startup behind a variety of smart consumer electronics devices, unveiled a smart key switch called Hackey on Wednesday. The product is available for 9,980 yen (about $82) on their website. In conjunction with the announcement, the company just started a crowdfunding campaign on Indiegogowhere backers can pre-order it for $59 plus shipping charge.

Hackey is a Wi-Fi-connected, palm-sized “key” switch. It is compatible with IFTTT and allows users to control various internet services via API by turning the key. Some examples of possible use cases include:

  • Allowing children to tell their parents working at office via Twitter message when these children return home by letting them turn the key
  • Controlling home security system by turning the key
  • Allowing users to hail a cab by turning the key
  • Allowing office employees to record the time on their company’s time clock card system when they start work or leave the office

In addition to allowing trigger signal transmissions to IFTTT Maker Channel, Hackey can also receive requests from other web services so Hackey’s side LED indicators will flash in accordance with a user’s settings. The product will be also compatible with myThings, Yahoo Japan’s mobile app enabling users to integrate various web services with IoT (Internet of Things) products.

The Path To Expertise

expert There’s a popular meme that it takes ten years of effortful study to become an expert at something. Studies show that in reality, the number of years varies a bit from subject to subject and from one individual to the next, but one thing is clear – expertise takes time. Therein lies the problem. Read More

Furnageddon: Why furniture is on the cusp of big disruption


As digital commerce has evolved over the past decade to penetrate nearly every element of our lives, one category has largely been left in the dust: furniture. But in the past 12 months disruption has accelerated exponentially – with the industry suddenly under a broad-based assault from all key angles: manufacturing, delivery, assembly, and discovery.

A few months back, I noted that furniture was one of the remaining massive categories still struggling with finding a mass-market consumer fit online. In it, I cited a conversation I’d had with a well known venture capitalist:

Similarly, [the investor] noted at the time, furniture – sofas, mattresses, tables, etc – were one of those categories that hadn’t been cracked by e-commerce. The unit economics made delivery expensive. And, like shoes, consumers wanted to try them on. Is it comfortable? Do the colors match up with your room palette? What if, he proposed at the time, a furniture company offered the following value proposition: We’ll show up at your home, for free, with 10 different sofas of varying feels and colors, let you try them all out for free, and then you just keep the one you want and send all the rest back for free?

Under the legacy model, e-commerce furniture sales were simply a digital extension of traditional product purchasing and sampling. Further, the thinking continued, the legacy retailers were actually capable of avoiding disruption because of the complexity in the supply chain and delivery logistics that made it expensive, if not impossible, for startups to compete.

But this is all changing.

Furniture in a Millenial World

To be fair, it’s still exceedingly early in the disruption cycle – two of the emerging brands, Campaign and Greycork, for example, haven’t even begun shipping their product yet – but taking into account the strength of their pre-sales and the growing traction among other disrupters, its hard to dispute that there is a fundamental shift underway:

Displaying Slide1.png

At Chicago Ventures, we’ve categorized the disruption from these new, vertically integrated brands into four categories: Delivery, Assembly, Price, and Design.

  • Delivery: Arguably the most important angle, as evidenced by Casper’s runaway traction, millennial consumers are looking for experiences that provide for both immediate delivery and frictionless ease of return. Traditional retailers have long lead times on larger pieces (8-12 weeks), and they arrive via a third-party trucking provider (who disappears shortly thereafter), making it extremely inconvenient to return a product. The new disrupters are getting product to a customer’s door in under a week from time of purchase — and sometimes in as little as 24 hours. They are also using novel shipping/packaging methods to enable accessible and low-cost (or free) returns.
  • Price: Typically the most important variable for consumers, price is also one of the hardest areas to clearly differentiate in furniture, as every retailer offers differences in quality, style, etc. One thing’s for sure: IKEA is the low-cost provider in the space, and despite the arguably miserable experience it offers, it still moves a lot of product. The new disrupters, by building a direct business-to-consumer brand, are able to discount heavily on price while maintaining similar margins by removing some of the supply chain layers.
  • Assembly: The current status quo is either long lead times where items come fully assembled OR shorter windows/in-store pickup (think IKEA) where consumers are responsible for arduous assembly and installation (my wife loves doing IKEA assembly, but she’s gotta be in the 1%). The new disrupters, focused on building an anxiety-free product, offer large items that can be assembled in minutes without tools. A further benefit to the simplicity is that they can also be disassembled in minutes for moving or for easy packaging to return items.
  • Design: If you’ve been to the big box retailers – from Pottery Barn to Arhaus to Restoration – you know each has its own unique personality. But the new designers believe those pieces aren’t being imagined with a millennial purchaser in mind. The new disrupters are attacking home, apartment, and workplace furnishings and trying to reimagine product that stays sensitive to personal devices, new work habits, etc.

We view Delivery and Assembly as the two most intriguing and sustainable angles being attacked. Although our internal consumer surveying has shown that price is ultimately the #1 most important variable for buyers, we fear that — given the healthy gross margins in the category (42.9% at Ikea, ~38.3% at Pottery Barn*) and de minimus return rates — incumbent retailers will quickly be able to adapt on price undercutting or free shipping/returns offers.

What appears hardest for legacy retailers to respond to are fundamental reimaginations of the production line, product design, and supply chain.


Outside of the millenial manufacturers, there’s an equal amount of momentum in the next generation of retail models. Right now, the process for actually purchasing a piece of furniture online is cluttered, as most product exists in an environment of millions of SKUs with minimal effective filters. And while the companies listed in the Pottery Barn graphic above are trying to reimagine the next generation of vertically integrated brands, that doesn’t solve the wider discovery problem for consumers.

The problem for consumers is that the increase in SKUs across all furniture categories has made shopping on the aggregators an utter nightmare. Comparing from vendor to vendor is also a time-consuming, high-friction experience. These are the reasons that, according to Upfront Ventures’ Greg Bettenlli, the only growth driver at Wayfair is Joss & Main, their ultra-curated flash sales site.

Thus, the furniture category appears to be mirroring the quintessential e-commerce curve that I detailed earlier this year:

Th[e] same catalog of infinite SKUs caused real pain for all but the most specific of product searches. This pain led to the birth of discovery- and push-curation focused platforms. On a macro level, the [present] move towards connection makes a lot of sense. Consumers are overwhelmed by email, social, and retargeted marketing, while at the same time flocking to platforms such as Uber and HotelTonight, whose focus is on constraining choice and cognitive noise.

Displaying infographic.jpg

For example, we’ve witnesses this process play out in the fashion industry – first with discovery-focused platforms (Gilt, Fab, Wish, RueLaLa) and now with personalization experiences (TrunkClub, Stitchfix, Wantable). The following chart illustrates how the same dynamic is now emerging in the furniture world:

Displaying Slide1.jpg
​And yet in spite of the increasing focus on the sector, only about $20 billion of the $160 billion U.S. market for furniture and home accessories is being transacted online:

​Put together, the category represents a tremendous opportunity for venture investors: demonstrable consumer pain points, broken processes and experience, and a market size well over a hundred billion dollars. Few of the companies noted have material traction or brand equity – but it’s the early innings; it’s one of the most exciting categories to watch in consumer Internet and is poised for outsized growth.

At Chicago Ventures, we’re definitely looking for entrepreneurs focused on reimagining the furniture space. If you’re one of them, please reach out!

* This is blended and includes results from Williams-Sonoma and a number of other properties. As PB sales have increased, GM has contracted, implying their GM on their PB business is probably closer to 35% than 40%.

Ezra Galston is a venture capitalist with Chicago Ventures and the former Director of Marketing for CardRunners Gaming. Follow him on Twitter @EzraMoGee and his blog BreakingVC.

Vodafone says hackers broke into nearly 2,000 customer accounts this week

Pigeons fly past Vodafone branding outside a retail store in London November 12, 2013.

(Reuters) – Vodafone U.K. said on Saturday hackers had accessed the accounts of 1,827 of its customers this week, the second cyber attack on a British telecoms company this month.

The attackers had potentially gained access to the victims’ bank sort codes and the last four numbers of their bank accounts, along with their names and mobile telephone numbers, a Vodafone spokesman said.

“This incident was driven by criminals using email addresses and passwords acquired from an unknown source external to Vodafone,” he added in a statement.

Only a handful of those affected in the Thursday morning attack had seen any attempts to use their data for fraudulent activity on their Vodafone accounts.

“No credit or debit card numbers or details were obtained. However, this information does leave these 1,827 customers open to fraud and might also leave them open to phishing attempts,” the spokesman said.

The company was contacting all those involved and that other customers need not be concerned, he said.

Last week broadband, TV, mobile and fixed-line service provider TalkTalk said it had been hacked, potentially putting the private details of its 4 million customers into the hands of criminals.

Less than 21,000 unique bank account numbers and sort codes had been accessed. Two teenagers have been arrested in connection with that attack.

(Reporting by Stephen Addison; Editing by Raissa Kasolowsky)

Smart ways brands can newsjack the election season

A still from Boston Market's chicken vs. turkey "Bowl Poll Campaign" video ad, run during the 2012 election season.

Earlier this week in Boulder, Colo., 11 Republican presidential hopefuls took their third shot on CNBC’s national stage of 13 million viewers to expand their support base with new campaign messages and tactics.

As we head deeper into election season, brand advertisers also have a high-stakes, high-reward opportunity to set themselves apart from their competitors by delivering relevant, timely messages to a captivated political audience. As we saw from the last presidential election season, brands such as JetBlue, Pizza Hut and PBS jumped in with clever and entertaining campaigns that leveraged current events and effectively connected with consumers … but not without risk.

JetBlue's 2012 "Election Protection" campaign.

Above: JetBlue’s 2012 “Election Protection” campaign offered customers the chance to leave the country if their candidate lost the election.

With political ad spend projected to reach $11.4 billion this season, brands will have to work hard to rise above the noise. Here are some ways to stay focused and build a story that will further expand your base of brand enthusiasts and loyalists.

Pay Attention to Major Election Season ‘Mile Markers’ and Proactively Plan

For this season’s remaining 19 candidates, the presidential campaign represents a grueling, intricate labyrinth of paid and unpaid channels to engage various constituencies across 50 states. The venues range from local town halls in Fort Dodge, Iowa, and rallies in Mobile, Alabama, to national broadcast appearances on The Late Show or Meet the Press. And at any given moment, a candidate’s statement — a triumphant cry on income equality or a hiccup on religious beliefs — can go viral through social media and quickly gain national attention.

To identify the best opportunities for weighing in, brands must be equally adept at navigating the political arena and savvy about the nuanced dynamics and merits of various paid and unpaid media channels. For example, Fox News’ telecast of the first Republican debate in August drew 23.9 million viewers (16% of homes with TV sets), making it the highest-rated presidential primary debate ever and among the most-viewed events in cable TV history. In contrast, digital media represents a powerful channel to reach millennials, an increasingly powerful constituency for candidates. As a result, each candidate has turned to social media channels (including relative political newcomers Instagram and Snaphat) to engage millennials on very specific issues such as student loans and healthcare.

Instead of taking a reactive approach (i.e., scrambling to come up with a clever idea once a milestone moment has gone viral), brands should take a proactive approach and organize ahead of time. To start, you should understand which candidates your brand is better positioned to play off of (positively or negatively). Next, you should game out topical responses and be ready for a candidate to use a trigger phrase or question at the next debate. Once you have established a clear approval chain, be ready to go when an opportune moment hits. If you can’t be timely, don’t bother.

Get Creative and Don’t Be Afraid to Poke Fun

7-Eleven's election cups from 2012.

Above: 7-Eleven’s election cups from 2012.

Image Credit: 7-Eleven

What does 7-Eleven have to do with the presidential election season? Normally, nothing. But in 2012, the company held its third ‘7-Election’ campaign, where customers could show support for either Barack Obama or Mitt Romney by choosing a red or blue cup. By keeping tally and posting state-by-state results of cup choices on its site, 7-Eleven successfully “polled” 6 million consumers and garnered major media attention.

In another example, when Mitt Romney claimed that, despite his love for Big Bird, he would cut PBS funding if elected, PBS quickly purchased promoted tweets related to “Big Bird” searches on Twitter. As a result, it was able to drive traffic to its site and educate consumers about the value of PBS.

These campaigns illustrate how brands can develop creative campaigns that engage audiences by taking a lighthearted, entertaining approach. Again, if you can plug into a timely moment or trend, consumers will appreciate the context and relevance and respond with engagement.

Don’t Overdo it, and Don’t Be Tone Deaf

While the presidential election season presents significant opportunities to participate in a politically driven conversation, brands need to be strategic and selective about when to chime in. Brand-driven geo-political campaigns don’t always represent a good idea, as clothing retailer Kenneth Cole now knows.

As you evaluate marketing opportunities, be sure to constantly question the potential merits of an investment and allocation of resources. Ask: Does this align with our brand? Does this campaign further our brands’ broader marketing goals and objectives? What KPIs will we track to evaluate effectiveness? Why is this important?

You should also remain acutely aware of the social conventions of the time, and constantly assess the risk versus rewards of pushing the marketing envelope. It’s one thing to make light of the ridiculousness of politics with benign memes; it’s another to poke at hot button issues that remain sensitive in today’s social fabric.

The primaries present a perfect time for brands to test and refine messaging with a smaller set of tuned-in voters. If you take advantage of these opportunities now, you will be able to deliver relevant, on-message campaigns in the general election. By asking these kinds of questions ahead of time and staying focused, you will be able to rise above a crowded advertising landscape and continue blazing trails with engaging brand messages.

Michael Horn is SVP and Chief Analytics Officer at Resonate.

Deep learning startup Ersatz Labs suspends development of its cloud service

The Ersatz Labs cloud service.

Ersatz Labs, a startup specializing in a trendy type of artificial intelligence called deep learning, has suspended development of its cloud service and application programming interface (API).

The startup has dropped its headcount from around 13 to five, with three working part-time, in recent months. Earlier this month it began focusing exclusively on consulting, which is what cofounder and chief executive Dave Sullivan was doing before he started Ersatz Labs in 2013.

Other startups, like Clarifai and Metamind, offer cloud services for deep learning. The CEOs of both of those startups have PhDs and are widely recognized for their work in academic circles; both have succeeded in landing institutional venture capital backing for their startups. Ersatz by contrast, does not have PhDs onboard; Sullivan is effectively self-taught, and he suspects that could be one reason Ersatz wasn’t able to raise funding. Hence the scaling back.

“We just don’t have a big enough team to make a real go of it,” Sullivan said of the cloud service during an interview with VentureBeat. With its smaller workforce and its complete dedication to consulting, the startup is now breaking even, Sullivan said.

One would think venture capitalists would be more interested in giving checks to startups like Ersatz. Apple is on an AI acquisition rampage. Google, Facebook, Microsoft, and Baidu are all building up formidable AI teams. Pinterest, Snapchat, Spotify, and other startups have considering using deep learning for certain purposes.

Deep learning involves training artificial neural networks on pools of data — such as images — and having the networks make inferences about new data. Interest in the field has accelerated in the past three years, especially after researchers discovered that GPUs could potentially perform these computations in a more economical way than standard x86 chips.

Some people think interest in deep learning will eventually die down and lead to another so-called AI winter, with young companies going out of business. “Today the cycle is likely to repeat itself again,” as New York Times reporter John Markoff predicted in his 2015 book Machines of Loving Grace.

Sullivan, of course, is more optimistic than that.

“We’ve got a pretty big pipeline at this point,” he said. “A lot of these companies just don’t have it in their budgets yet. Next year I really think a lot of people have money earmarked for these types of services, much more so than last year.”

Ersatz launched in June 2014 and is based in Pacifica, California, just south of San Francisco.

How To Extract More Than Capital From Your VCs

espresso The relationship between VCs and their portfolio companies has changed significantly over the past five or so years. In many ways it is still the same, in that VCs provide capital, then take a significant equity stake and often a board seat. However, as the funding process has become more transparent and new capital sources have emerged, startups are looking for more value from their… Read More

AppDynamics, A “Unicorn,” Raises Fresh $83.4 Million, And It’s Targeting More

appdynamics Looks like investors approve of former Adobe digital chief David Wadhwani. Just weeks after it was announced that Wadhwani has joined seven-year-old, San Francisco-based AppDynamics as its new CEO, an SEC filing shows the company has raised a fresh $83.4 million in funding as part of a round that’s targeting up to $150 million. AppDynamics makes software to monitor the performance… Read More

Checking In On Windows 10

A Windows 10 sign on Microsoft's campus. Mired as we are in earnings season, I was slightly remiss this week in keeping tabs on Windows 10, Microsoft’s new operating system. A few things happened that are worth our time, and, as it’s the weekend, we have the minutes. First up, Microsoft detailed how it will continue to encourage — force? — users up from Windows 7 and 8 to Windows 10. Here’s the… Read More

Service robots finally start to catch on

Fellows Robots' in-store OSHBot shows a customer where to find the product she's looking for.

This is an exciting time for those of us in robotics. We are finally starting to see sales in the service robot category after years of predictions. Silicon Valley companies such as Fellow Robots, whose OSHBot assists Orchard Supply Hardware shoppers, and Savioke, whose Relay robot makes deliveries to hotel guests, are leading the way into the emerging personal and service robotics industry.

And there are plenty more. Fetch Robotics, for example, builds robots that pack boxes for e-commerce deliveries. Bossa Nova Robotics is building a new service robot. Adept produces an all purpose mobile base that can autonomously navigate around. SRI International, Eksobionics, and Pneubotics are all working on assistive technology suits to make workers stronger, or help people with disability or injury. Catalia Health and RobotsLab are incorporating AI into social robots to help people manage their medication or even act as a personal stylist. And more are on the way.

Fetch's warehouse robot helps workers collect and carry products for packaging

Above: Fetch’s warehouse robot helps workers collect and carry products for packaging

See VentureBeat’s recent webinar on The Future of Robotics

Until now, industrial has been the dominant sector for robots, particularly in the car industry and consumer electronics. In fact, the industrial robotics market is worth more than $32 billion dollars.

Meanwhile, service robotics has, to date, seen a huge gap between research and commercialization. And we’ve seen very few successful personal or service robotics companies, in spite of the pressure of labor shortages and an aging population.

EksoBionics' exoskeleton robot can help in the rehabilitation of injured military personnel.

Above: EksoBionics’ exoskeleton robot can help in the rehabilitation of injured military personnel.

However, the service robotics industry is now growing strongly and encompasses all of the new market areas not defined as industrial robotics. It is hard to accurately predict growth here when there is such potential for rapid growth as costs drop, new systems are introduced, and new suppliers start to proliferate.

The International Federation of Robotics has tracked overall annual growth at around 11.5 percent so far and projects more than 20 percent annual growth to come. But some niche areas have already demonstrated growth of between 150 percent (mobile platforms) and 650 percent (assistive technology) in the last year. The primary market areas for service robots so far have been in defense, field (agriculture and inspection), logistics, and health/medical applications.

One of the new categories to emerge in the last year is the humanoid helper, kiosk robot or retail robot. Hot on the heels of this professional service robot category has come a wave of affordable social personal robots, like Jibo, Pepper, Buddy, and Mabu.

The early 21st century saw the first wave of companionable social robots. They were small cute pets like AIBO, Pleo, and Paro. But the novelty of robot toys and pets wore off and for the last 10 years the consumer robotics market has been dominated by utilitarian drones and vacuum cleaners.

But the second wave of social robots has started, driven by the development and spread of smart phone technology and more sophisticated user interfaces. A key factor in a robot’s ability to be social is its ability to correctly understand and respond to people’s speech and to guess at the underlying context or emotion.

Improvements in cloud robotics, computer vision, and AI speed up the likelihood that we will all soon be in daily interaction or conversation with robots. These robots might be our vehicles, our houses, or more anthropomorphic robot friends.

We are starting to see market pull matching technology push in robotics. New market opportunities are arising, partly due to continual improvements in the safety and compliance of robot systems, alongside their simpler more intuitive user interfaces. And the cost of service robotics systems is dropping significantly, putting service robots in reach of many new market partners.

What we want next from service robots   

We have the opportunity to democratize health care and many other services with robotics, in roles where our access to human experts and service providers is already limited. Imagine if everyone had access to the experts we needed, whenever we needed them? At the end of the day, the value proposition for service robotics is supporting workers to do existing jobs better, faster, safer, and at scale.

The robots we are looking for don’t actually replace people but augment aspects of our lives or jobs that are unpleasant or just not getting done. We don’t want Rosie the robot maid, because most of us don’t have maids anymore. We want extra robot hands in the kitchen or smart moving tables in the house. We want robot vacuum cleaners and laundry folders.

And what is becoming clear, as robotics catches up to computerization, is that we don’t just want faceless AI and automation. We already have robocallers, auto shopping suggestions, personalized advertising, and tailored health programs.

We want to keep a level of sociability in our lives and real people aren’t available then maybe a robot assistant will do. We know that pets improve the quality of our lives significantly. It turns out that robots can too.

Andra Keay is Managing Director of Silicon Valley Robotics, a not-for-profit industry group supporting the innovation and commercialization of robotics technologies.