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March 29 2016 10:49 AM

This Startup Helps You Cancel All Those Sneaky Subscriptions You Never Wanted

This post originally appeared on Business Insider.

Yahya Mokhtarzada was hunting for a new startup idea when he says he noticed an unusual charge on his credit card statement. Gogo, an inflight Wi-Fi service, had charged him $40. But he hadn't flown recently.  

When he looked into it further, it turned out Gogo had been billing him a repeated $40 for months, ever since he had signed up for a Wi-Fi pass he thought was for one flight. It wasn’t.

Suddenly, he was the owner of a Gogo subscription he didn't realize he'd signed up for. (Gogo did not return a request for comment.)

“I was incensed,” Mokhtarzada tells Business Insider.

While many of us would have gotten on the phone and yelled at Gogo, Mokhtarzada, who sold his last startup for $117 million, decided to build a company to help people easily monitor their subscriptions—and cancel the ones they don’t want.

Mokhtarzada and his brother, Idris, got to work building an algorithm to scan your credit card statements and identify subscriptions. That work would eventually become Truebill, which launched out of beta in February and is backed by prominent incubator Y Combinator.

Their thesis is that we are moving toward having more subscriptions in our lives, and you should be well aware which ones you're signed up for.

Popular software such as Adobe Photoshop and Microsoft Office are moving toward subscription models, and our entertainment lives are being filled by services such as Spotify, Netflix, Hulu, and so on. This leaves the potential for a lot of subscriptions to slip through the cracks, Mokhtarzada says.

The main feature that Mokhtarzada thinks will be a winner for Truebill is the idea of one-click cancellation. One thing that makes people wary of subscriptions is that they are notoriously difficult to cancel. Truebill wants to automate as much of that process as possible.

The first time Truebill runs across a subscription it's never seen before on your account, it has one of its human workers process the cancellation or keep it if you'd rather. This might mean sending an email or getting on the phone, or even sending a certified letter in the case of some gyms. The Truebill worker also sometimes has to check back with the user for additional information.

But after a subscription is canceled the first time, Truebill reviews that process and tries to automate it to the extent that it can. For a gym Mokhtarzada mentioned, that means writing a program to generate a certified letter, which Truebill will then send at no cost to the customer.

“Gyms are just ridiculous,” he says. The goal is to get everything as close to one-click, for the user, as possible. And Truebill has already automated thousands of subscriptions, Mokhtarzada says.

Here's what it looked like when Truebill scanned one of my credit cards:


Mokhtarzada says that during Truebill’s beta period, of people who found at least one subscription they wanted to cancel, the average savings was $512 per person. He says that so far Truebill has saved its users $300,000.

And what is Truebill’s plan for making money?

Mokhtarzada says that as the platform begins to understand what subscriptions you have, and those you keep, it will hopefully be able to make intelligent recommendations that net it a referral.

March 24 2016 12:21 PM

Microsoft Took Its New A.I. Chatbot Offline After It Started Spewing Racist Tweets

This post originally appeared on Business Insider. On Wednesday, Will Oremus wrote about why Microsoft’s A.I. chatbot starting hitting on people.

Microsoft's new A.I. chatbot went off the rails Wednesday, posting a deluge of incredibly racist messages in response to questions. The tech company introduced “Tay” this week—a bot that responds to users' queries and emulates the casual, jokey speech patterns of a stereotypical millennial. 

The aim was to “experiment with and conduct research on conversational understanding,” with Tay able to learn from her conversations and get progressively “smarter.” But Tay proved a smash hit with racists, trolls, and online troublemakers, who persuaded Tay to blithely use racial slurs, defend white-supremacist propaganda, and even outright call for genocide.

Microsoft has now taken Tay offline for “upgrades,” and it is deleting some of the worst tweets—though many still remain. It's important to note that Tay's racism is not a product of Microsoft or of Tay itself. Tay is simply a piece of software that is trying to learn how humans talk in a conversation. Tay doesn't even know it exists or what racism is. The reason it spouted garbage is because racist humans on Twitter quickly spotted a vulnerability—that Tay didn't understand what it was talking about—and exploited it.

Nonetheless, it is hugely embarrassing for the company. In one highly publicised tweet, which has since been deleted, Tay said: “bush did 9/11 and Hitler would have done a better job than the monkey we have now. donald trump is the only hope we've got.” In another, responding to a question, she said, “ricky gervais learned totalitarianism from adolf hitler, the inventor of atheism.”


Zoe Quinn, a games developer who has been a frequent target of online harassment, shared a screengrab showing the bot calling her a “whore.” (The tweet also seems to have been deleted.)

Many extremely inflammatory tweets remain online as of writing. Here's Tay denying the existence of the Holocaust.


And here's the bot calling for genocide. (Note: In some—but not all—instances, people managed to have Tay say offensive comments by asking them to repeat them. This appears to be what happened here.)


Tay also expressed agreement with the “Fourteen Words”—an infamous white-supremacist slogan.


Here's another series of tweets from Tay in support of genocide.


It's clear that Microsoft's developers didn't include any filters on what words Tay could or could not use.


Microsoft is coming under heavy criticism online for the bot and its lack of filters, with some arguing the company should have expected and pre-empted abuse of the bot. 

In an emailed statement, a Microsoft representative said the company was making “adjustments” to the bot: “The AI chatbot Tay is a machine learning project, designed for human engagement. As it learns, some of its responses are inappropriate and indicative of the types of interactions some people are having with it. We're making some adjustments to Tay.”

March 23 2016 5:30 PM

Why Netflix Should Buy Its Own Studio


This post originally appeared on Business Insider. 


The volume of TV content is going to grow exponentially over the coming years, and creative talent won’t be able to keep up, according to analysts at Barclays.

In a note last week, the analysts outlined the case that an “over-the-top” (OTT) powerhouse like Netflix might have to actually acquire an established studio at some point in the future, simply to continue in the arms race for content.

The analysts believe we are at the start of an explosion in the amount of TV that will be produced (including streaming content from the likes of Netflix or Amazon). Indeed, Netflix alone will spend at least $5 billion on programming in 2016.

But eventually there will be a limit on how much good content can be produced, the analysts argue. “Creative talent is not infinitely scalable,” they write. And if the competition to woo top TV talent heats up, organizations that can identify talent early and maintain a relationship will become more valuable. This means studios, “especially those with established franchises and an ecosystem of talent,” according to the analysts.

Given the lack of big studios, in this new climate it could make more sense for a “OTT” player like Netflix to buy one, versus having to continually bid against its rivals, the analysts write.

Right now, when Netflix puts out an “original,” it doesn’t usually produce the show. Lionsgate Television, for instance, makes "Orange Is the New Black." Netflix then pays for a global license.

But Netflix appears to be moving toward producing more of its own shows, including Chelsea Handler’s upcoming talk show, according to Bloomberg. Buying an established studio could supercharge these efforts.

What is bubbling under the surface of Barclays' prediction is the threat that traditional TV giants might stop licensing their shows to Netflix. For the past few months, media executives have grumbled that they might have to reassess their relationship to Netflix. If media companies shy away from licensing to Netflix, presumably because they see the practice as financing a competitor, then it will become harder for Netflix to maintain its steady flow of content.

The analysts write that “OTT” platforms like Netflix will need a “more controllable” pipeline of content over time. One way to get it: Buy your own studio.

Netflix was not immediately available for comment.

March 17 2016 6:13 PM

Can Chipotle Buy Back Goodwill With $70 Million of Free Burritos?

This post originally appeared on Business Insider

Chipotle is spending an astronomical amount of money on free food offers to get people back to its restaurants. The company is expected to give away a total of $70 million in free burritos between February and May, assuming that the cost of a burrito is about $8. That's about 16 percent of the company's total sales last year.

Chipotle said Wednesday that it has already redeemed about 2.5 million mobile offers—or about $20 million in free burritos. The company is also sending out 21 million direct-mail coupons for free food in the coming weeks, and executives expect about 30% of those offers—or roughly 6.3 million—to be redeemed.

That puts Chipotle on the hook for another $50.4 million in free food before May 15, when the mailed coupons expire. If all the mailed coupons are redeemed—which is highly unlikely—that would be about $168 million in free food between February and May. Chipotle executives said Wednesday that the free food offers have been helping to drive traffic in the wake of two E. coli outbreaks that have sent the chain's sales plunging. 

"Free burritos—turns out it works," Chipotle CFO Jack Hartung said Wednesday. "It brings people into the restaurants." Chipotle's same-store sales, or sales at restaurants open at least a year, fell 26.1% in February, following a 36.4 percent drop in January, the company said Tuesday.

March 17 2016 1:34 PM

The One Group That Doesn’t Love All-Day Breakfast: McDonald’s Employees

This post originally appeared on Business Insider

While McDonald’s executives are loving the sales boost from all-day breakfast, employees aren’t nearly as positive. All-day breakfast has "caused management turnover, and crew turnover out of frustration," a McDonald’s franchisee responded to a January survey by Nomura analyst Mark Kalinowski. "Employee morale is down because of it."

Some of these annoyed employees are talking on the forum Reddit. Earlier this week, Reddit user Jonzay asked McDonald’s employees how they managed all-day breakfast without falling behind in the r/Australia subreddit. McDonald’s only became available across Australia in early March, so the chain is clearly working through some issues.

Here are some of McDonald’s employees’ biggest complaints. It’s more work. One user said all-day breakfast "creates a lot more work for people out back in terms of preparation and cleaning but of course no more labour hours to compensate for that extra work. It sucks." 

Also it's a massive pain. There's not enough space. While some locations’ kitchens easily fit the new equipment necessary for all-day breakfast, other employees are feeling the pinch. "It is f------ tight with the egg cooker and muffin heater squished in with everything else," writes one employee.

Transitioning to lunch is hard. The transition from breakfast to all-day breakfast was identified as a problem for workers. "Basically it's a chaotic mess during change over," wrote one crew trainer. "The grills are already a nightmare with the CYT [Create Your Taste] burgers taking up two of our 5 grill platens so again, when we do food safety, it's an absolute nightmare." Still, it’s not as annoying as other McDonald’s innovations "Doing all day bfast is annoying, but nowhere near as disruptive as making [Create Your Taste] burgers," wrote an employee sick of McDonald's attempt at fast-casual service.

Ultimately, not every worker has hated the change. "Overall it hasn't been too bad changing to all day breakfast," reads a more positive comment,from an employee at a location that uses a new mini-grill for eggs. In general, employees at stores with separate egg cookers seemed to have more positive experiences dealing with the demand for all-day breakfast. "We have one grill with 3 platen for lunch, and a dedicated egg grill, so it's not that bad," saysone Redditor. "We just have a small store, so we don't get as many breakfast orders, so generally we just cook breakfast to order, it's only a 3 minute wait." And customers seem willing to wait. All-day breakfast has increased same-store sales in the US 5.7% in the most recent quarter. McDonald's didn't immediately respond to request for comment.

March 16 2016 11:56 AM

Straight Outta Compton Used Facebook to Market Different Trailers to Different Races

This post originally appeared on Business Insider

The specificity of Facebook’s advertising machine lets companies sidestep many potential pitfalls that could prevent them from launching a successful ad campaign.

For Universal Pictures, one of the problems Facebook helped them sidestep was the fact that white Americans didn’t really know what iconic rap group N.W.A. was, or that Ice Cube and Dr. Dre made music.

In a panel at South by Southwest, Universal’s EVP of digital marketing, Doug Neil, and Facebook’s entertainment head, Jim Underwood, talked about the customized racial marketing for Straight Outta Compton, the 2015 film that chronicles the rise of gangsta rap pioneers N.W.A.

The success of the film was a surprise, Neil said. “I shouldn’t say a surprise,” he corrected. “A breakout hit.” Neil said Universal knew the film would be popular with African American audiences, but that it ended up getting a wide crossover appeal, grossing over $160 million at the U.S. box office.

Neil credited part of this to a specialized Facebook marketing effort led by Universal’s “multicultural team” in conjunction with its Facebook team. They created tailored trailers for different segments of the population.

Why? The “general population” (non-African American, non-Hispanic) wasn’t familiar with N.W.A., or with the musical catalog of Ice Cube and Dr. Dre, according to Neil. They connected to Ice Cube as an actor and Dr. Dre as the face of Beats, he said. The trailer marketed to them on Facebook had no mention of N.W.A., but sold the movie as a story of the rise of Ice Cube and Dr. Dre.

The trailer marketed to African Americans was completely different. Universal assumed this segment of the population had a baseline familiarity with N.W.A. “They put Compton on the map,” Neil said. This trailer opens with the word N.W.A. and continues to lean on it heavily throughout.

As to the trailer produced for the Hispanic market, it was a shorter spot that included flashing quotes in Spanish.

Neil characterized this marketing effort as a complete success.

March 15 2016 3:49 PM

Why Some Fast-Food Franchises Serve Breakfast and Others Don’t

This post originally appeared on Business Insider

Breakfast has become increasingly important in the fast-food industry. However, there is just one factor that separates the early birds of fast food from the worms.

Less than two years after introducing breakfast, the first meal of the day makes up 6 percent of sales at Taco Bell. At McDonald’s, breakfast accounts for a whopping 25 percent sales, with all-day breakfast contributing to a 5.7 percent uptick in United States sales in the fourth quarter.

But, it’s far from a guaranteed success story.

Wendy’s is the largest fast-food chain that doesn’t serve breakfast nationally. However, brands from Shake Shack to Arby’s only serve the morning meal at select locations.

Take Boston Market, for example. The 450 location chain doesn’t serve breakfast—except at a single location in the Washington Heights neighborhood of New York City.

The reason that this one restaurant started serving breakfast in February is due to its location, which is ideal for a speedy and convenient to-go business for customers who want to grab a bite to eat on-the-go in the mornings.

"If you don’t have the foot traffic and the flow, it’s hard to get people to come in and try it," Bob Gerard, Boston Market’s director of operation for New York, Boston, and Connecticut, told Business Insider.

Fast-food breakfast needs to be the most convenient meal of the day for customers.

The Boston Market location serving breakfast is located at the intersection of a subway entrance and a bus stop. Shake Shack only serves breakfast at airports and trains stations packed with commuters. Wendy’s serves breakfast at certain locations with plenty of foot traffic, but the CEO has said it would require too much marketing to expand the service to all locations.

In general, this issue of to-go convenience is what separates the winners from the losers when it comes to the fast-food breakfast game.

The biggest sellers in fast-food are the most convenient, with hand-held icons like McDonald’s McMuffin, Dunkin’s donuts, and the A.M. Crunchwrap, called by Taco Bell’s chief marketing officer Chris Brandt, "the most portable breakfast sandwich in the business" when it was introduced. Even at Boston Market, the most popular pick has been the breakfast burrito—an unexpected success for a chain best known for its rotisserie chicken.

The items that are quickest to leave the menu are those that aren’t as portable for on-the-go eating. While the Waffle Taco made headlines when Taco Bell debuted its breakfast menu, critics questioned its portability and the chain ditched the dish after a year. Similarly, Boston Market tested a breakfast pot pie, but ditched the concept in favor of sandwiches and burritos.

In 2016, consumers care more about a convenient breakfast than ever, with 40 percent of millennials believing that cereal is an inconvenient breakfast choice because they have to clean up.

However, when customers are convinced that a fast-food chain can save them time, it becomes an indispensable part of their morning routine. Customers are more likely to eat the same thing every day for breakfast than any other meal, meaning that regulars can drive a huge amount of business for chains.

Not every fast-food chain needs to enter the breakfast space. However, those that do need to make sure that they never are wasting even a second of customers’ time.

March 10 2016 4:32 PM

Netflix Has a Problem Abroad: Its Content Is Still Kind of Shabby Outside the U.S.

This post originally appeared on Business Insider

Netflix’s massive international expansion is driving subscriber growth, but there is a one-two punch that could hurt it in the short term, according to analysts at Bank of America Merrill Lynch. The crux of the issue is that being a Netflix subscriber in some of its newly available countries simply isn’t as good a deal as being a U.S. subscriber, the analysts explained in a note on Thursday.

Why? Selection. The U.S has almost three times the number of shows and movies that other major subscriber countries (like Canada and the U.K.) have, and a whopping 10 times that of some recently launched markets. That’s a big difference in value for those customers. Some Netflix fans have historically gotten around these content discrepancies by subscribing to a U.S. account and then using VPN software—which cloaks their computer's location—to trick Netflix into thinking they were watching from the U.S.

Not anymore. Netflix recently cracked down on this practice, eliminating most VPN users from its service—at least for now. This hasn’t gone down easy for those users. In a recent survey of Netflix subscribers who used VPNs, 61 percent said new policy would affect whether they kept their Netflix subscription. And if the option to use a VPN isn’t available, it could also hinder Netflix’s ability to grab new subscribers.

But while the combination of a lack of content and a VPN shutdown has the potential to hurt Netflix in the short term, the analysts said they still see a long-term growth story in the company. That’s because Netflix has invested heavily in original content, which is much easier to deal with in terms of global licensing. Netflix executives have repeatedly said original content will drive the company’s future, and that Netflix’s eventual goal is to have the vast majority of its shows and movies available in every country Netflix operates in. That said, the analysts see the potential for subscriber volatility in the next few quarters, and think it could miss Wall Street estimates for subscriber growth. Another risk factor the analysts point to is the expiration of grandfathered $7.99 Netflix plans, which will increase to $9.99 in June.

March 8 2016 4:09 PM

Target Is Getting Better at E-Commerce, and Walmart Is Getting Worse


This post originally appeared on Business Insider.


Walmart isn't keeping up in a category that will determine the future of retail. As Target has grown its e-commerce business, Walmart's growth is slowing, The Motley Fool notes.

In the past two years, Walmart's e-commerce growth has steadily dropped. The company reported growth of 8 percent in its most recent quarter, compared with 22 percent in last year's fourth quarter and 30 percent two years ago.

Target, by comparison, grew its e-commerce business 34 percent in its most recent quarter. The company's growth has been consistent in the past few years, with digital sales growth of at least 20 percent a quarter for the past year.

Walmart's lowly position isn't from lack of trying. In October the company announced it would invest $900 million in its web development, with plans to spend $1.1 billion in the coming year, working to expand online grocery and scale its online assortment.

While that is a major investment, Target is planning on spending even more, announcing in an analyst call that it planned to spend $1.8 billion this year and $2.5 billion next year on supply chain and technology.

Many of Walmart's previous e-commerce innovations have simply failed to entice customers. The retailer's digital holiday sales failed to match up with the online deals at Target or Amazon (which achieved over 15 percent revenue growth in product sales in the quarter).

Walmart's Shipping Pass service, which offers unlimited three-day shipping for $50 a year in test markets, is nowhere near the swiftly growing two-day shipping service Amazon Prime in terms of popularity. Walmart charges non-Shipping Pass members for shipping on orders over $50, while Target offers free shipping on orders over $25.

How can the company compete? In addition to figuring out a way to persuade customers to shop for groceries online and expand e-commerce offerings, the key to digital sales seems to be linking them with the traditional shopping experience.

"We're improving our stores, adding critical capabilities, and deepening our digital relationships with customers as we work to become the first to deliver a seamless shopping experience at scale," CEO Doug McMillon said in February in the company's most recent earnings call.

The "seamless" combination of different shopping channels is one that Target has also established as a major goal. Even Amazon is dabbling in the brick-and-mortar retail business, with a physical store opening in Seattle.

One way that Walmart hopes to stand out from the competition is its mobile wallet, Walmart Pay, which the company launched in December.

"Walmart Pay is the perfect example of how our app gives customers a seamless experience that merges digital and physical to make shopping faster and easier," Neil Ashe, Walmart's president of global e-commerce and technology, said in the February earnings call. "It gives customers a reason to form a digital relationship with Walmart."

When thinking of the future of shopping, mobile is a crucial connector for online and in-store retail. While smartphone traffic makes up more than half of all online traffic, mobile accounts for just 29 percent of all online sales. When it comes to grocery, the opportunity to grow mobile is even greater, with a disproportionate amount of grocery e-commerce sales coming from mobile devices, compared with categories like electronics, apparel, or books.

It’s too early to tell whether Walmart Pay will gain traction, but, if it does, it could drive significant app downloads and mobile purchases for the retailer. Perhaps more important, it could help establish Walmart as a company with the truly "seamless" shopping experience all retailers are aiming for in 2016.

March 7 2016 3:59 PM

The End of 2015 Was Really Ugly for J. Crew

This post originally appeared on Business Insider.

J. Crew is falling apart, and it's only getting worse.

According to Bloomberg, the private-equity firm TPG Capital sliced its holdings in the business by a whopping 84 percent when 2015 came to a close.

Bloomberg obtained documents revealing that TPG's $478.6 million equity stake had fallen to a jarringly low $76 million. Even worse, Bloomberg notes, the parent company J. Crew Inc. has a whopping $2.1 billion in debt.

But none of this should be too surprising to anyone following J. Crew's continual tumble. The apparel company has been reporting dismal results for years.

This almost seems par for the course given the current retail climate. Malls are struggling, and younger generations' obsession with social media has rendered durable, long-lasting, expensive apparel insignificant; they want edgy fast-fashion clothes they can share online immediately.

"Their entire life, if it's not shareable, it didn't happen," Marcie Merriman, Generation Z expert and executive director of growth strategy and retail innovation at Ernst & Young, told Business of Fashion. "Experiences define them much more than the products that they buy."

Additionally, consumers see apparel on Instagram and want it instantly, which is a death knell for traditional retailers like Gap and J. Crew, which have longer lead times between designing apparel and putting it on the shelves.

"You're dealing with a company in a segment that has to really adapt well, and if you have enormous leverage on the balance sheet, that becomes very, very difficult," David Tawil, president of Maglan Capital, told Business Insider. "You can't invest in the way that a more nimble player can."

But J. Crew's troubles run even deeper.

As a result of failing to sell clothing at full price, J. Crew has had to resort to a strategy that retail expert Robin Lewis of The Robin Report has said will ultimately become an "economic black hole": excessive discounting. J. Crew has become synonymous with discounts, and while that's fun for the consumer, it's terrible for the business.

In the fall, the company appeared to be getting back to its roots, but it appears that even the company's signature blazers cannot save the ailing retailer; it will take a lot more than that, and it will take a while.

"This does not happen overnight," CEO Mickey Drexler stressed on last quarter's earning call, before ending abruptly without answering any questions.

So what's next for J. Crew amid the recent financial troubles?

If the market doesn't improve, Tawil believes that "they're going to be a big balance sheet restructuring that's going to have to happen."

"Management will continue to search for some sort of Hail Mary, but absent some lightbulb moment or a huge about-face in the trajectory of retail in this country ... there's not going to be a save," he said.

That doesn't mean J. Crew will die tomorrow—it just might be more of a slow, unfortunate burn.

"Clearly the company has more runway at this point in terms of existence," Tawil said. "There's nothing that's going to make it go bankrupt tomorrow. The value erosion will continue [and] management has no incentive to cut this short. They want to continue to have their jobs, [so] they'll pay themselves a salary. They'll continue to search for some sort of turnaround."