Business Insider
Analyzing the top news stories across the web

May 27 2016 5:25 PM

The CEO of McDonald’s Says He Won’t Replace Workers With Robots

This post originally appeared on Business Insider

McDonald's isn't ready to swap workers for robots just yet. According to McDonald's CEO Steve Easterbrook, the fast-food chain won't replace workers with machines—even if restaurant operators have to pay the $15 hourly wage that protesters are demanding. "I don't see it being a risk to job elimination," Easterbrook said on Thursday at McDonald's annual meeting when asked if rising labor costs would force the chain to cut jobs, replacing workers with kiosks and "automatic pancake machines."

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Instead, Easterbrook said, the company would look to automating food preparation, allowing more employees to work directly with guests and boosting customer service. "Ultimately we're in the service business, and we're competing with other opportunities for people to eat and drink out," says Easterbrook. "Frankly, we will always have an important human element."

The CEO's remarks come in response to many people—including a former McDonald's CEO—arguing that increasing minimum wage means the end of entry-level jobs at fast-food chains. "It's cheaper to buy a $35,000 robotic arm than it is to hire an employee who's inefficient making $15 an hour bagging french fries," former McDonald's USA CEO Ed Rensi said in an interview on Tuesday on the Fox Business Network's Mornings with Maria. "It's nonsense and it's very destructive and it's inflationary and it's going to cause a job loss across this country like you're not going to believe." Rensi served as McDonald's USA's president and chief executive from 1991 to 1997, and has spoken out extensively against increasing the minimum wage.

"I can assure you that a $15 minimum wage won't spell the end of the brand," Rensi wrote of McDonald's in Forbes in April. "However it will mean wiping out thousands of entry-level opportunities for people without many other options." Rensi isn't alone in this belief. "With government driving up the cost of labor, it's driving down the number of jobs," Andy Puzder, CEO of Carl's Jr. and Hardee's, told Business Insider. "You're going to see automation not just in airports and grocery stores, but in restaurants."

However, Easterbrook insists that, even as McDonald's explores automation, workers do not need to be concerned about losing their jobs if minimum wages increase. So far, his track record at McDonald's backs his argument. In the past year, McDonald's increased investment in employee wages and benefits has already had a significant impact on customer service—one of the most problematic parts of McDonald's business. According to Easterbrook, customer satisfaction scores were up 6 percent in the first quarter, compared to the same period last year.

Automation is an increasingly important aspect of the restaurant industry. However, if Easterbrook is correct, the rise of robots doesn't mean the end of fast-food jobs. It simply means business can become more efficient, as employees are more fully dedicated to improving customers' experiences—not just flipping burgers.

May 26 2016 1:34 PM

How This Beauty Startup Sells Products With 10,000-Person Wait Lists

This post originally appeared on Business Insider

Emily Weiss didn't set out to start a beauty company when she launched her career in editorial years ago. Today, though, Weiss is the CEO and founder of Glossier, a cult-status beauty brand that has had 10,000-person waiting lists for two of its products.  

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The former art student and Vogue staffer was always interested, first and foremost, in storytelling and content. But she was bothered by her experience with beauty brands, which she felt were talking "at" her. Beauty shopping, she felt, lacked the context of real women and real experiences.

"There's this yearning to connect with other women," she said to Business Insider. So she started a blog in 2010, called Into the Gloss, where she candidly interviewed women—from celebrities like Kim Kardashian to makeup moguls like Bobbi Brown and models like Karlie Kloss—and highlighted their bathroom "top shelves" and daily routines.

The blog quickly became a popular site for beauty mavens. Even major women's magazines, Weiss noted, did not have the same level of commenting, which would reach well into the hundreds as women shared their experience of different skincare and makeup products, and swapped suggestions and support.

Today, the site has 1.5 million unique views each month. From there, it only made sense to pivot into the product world—to use the collected knowledge of her community to craft the products women were actually seeking.

Glossier (pronounced gloss-ee-ay) was born in 2014, with initial backing from Forerunner Capital, a women-led venture capital firm. Thrive Capital, previous investors in Warby Parker and Instagram, led the company's $8.4 million Series A funding round in November 2014. With only four products in the initial launch, it was a small-scale step into a big game. The global beauty market, after all, is worth upward of $250 billion.

Two main things set Glossier apart. The first is the brand identity. From the get-go, Weiss has been meticulous about maintaining a unified look and feel for all products, messaging, and marketing. "Brand is really, really important. It's kind of everything," Weiss said. As a creative—not a technical—founder, it's her zone. There's a signature shade of Glossier pink; there's a focus on images of diverse women with dewy skin and minimal makeup; there's a cheeky, millennial-facing voice. Packages come with playful Glossier stickers. 

The second thing is the preeminence of the digital community and the customer feedback loop. "There are a handful of beauty conglomerates, and it's difficult for them to innovate," Weiss said, given their size and their distance from consumers.

On the other hand, Glossier is a "two-way conversation," with the product team depending on the user community. In fact, Glossier invited about 100 of its top customers to be part of a group Slack channel. They exchange over 1,100 messages every week, Weiss said. Glossier's marketing, meanwhile, has been motivated by user-generated content, which Weiss said does "more than we ever could," as users post Instagrams and hashtag their beauty habits.

"Beauty has really gone online, because that's where the customer is," Weiss said. She's on her smartphone and on social media all day long; she's not spending time browsing through stores, but instead checking out YouTube beauty tutorials and Instagram snaps.

Diversity is a big part of their marketing campaigns, too. The result has been favorable reviews and beauty awards for products ranging from concealer to lip balm and moisturizer. Weiss referenced a minimal 1 percent return rate on products (they do not sell through any third parties currently, and do not plan on doing so any time soon).

Her biggest frustration? Not being able to keep up with demand. From those 10,000-person waitlists to the huge international demand that the company is not yet able to satisfy, delivering at scale has been the primary stumbling block. Financially, Weiss said, Glossier is doing just fine; they reforecasted their revenue goals twice already this year, based on month-over-month growth.

Weiss said they are trying to help women feel more comfortable in their own skins, instead of using makeup as a "mask." It's all about celebrating difference and individuality, not celebrating, well, celebrity. If that idea can take root, Weiss said, then Glossier is positioned to be as big a beauty brand as any of the major global players. "I hope that takes off, because that will mean something bigger than Glossier," she said. 

May 25 2016 7:48 PM

Google’s Plans for Self-Driving Cars Are Serious Enough That It’s Setting Up Shop Near Detroit

This post originally appeared on Business Insider

Google is building a new self-driving car research and development center near Detroit to be closer to current and future partners. The Novi, Michigan, space will help Google "collaborate more easily and access Michigan's top talent in vehicle development and engineering," according to a Google+ post.

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The news comes not long after Google announced that it's working directly with an automaker for the first time through a partnership with Fiat Chrysler to make a fleet of self-driving minivans. Execs have said that Google doesn't intend on manufacturing its own self-driving car models, so planting a flag near the auto-industry capital of America makes a lot of sense as it pushes to get its technology out of testing and into the real world. The center will open later this year. 

Here's the full post:

May 24 2016 3:21 PM

Ads in Google Maps Are About to Get Pushier

This post originally appeared on Business Insider

Road trip time! You plug your destination into Google Maps and start cruising down your route when a purple pin appears, showing you the location of the nearest McDonald's and offering a few dollars off on a combo meal if you stop. "Add to your route," it prompts. Well, you were getting hungry... 

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This is the new ad experience that Google is testing out in its Maps app to help businesses entice you into visiting their coffee shop, gas station, pharmacy, whatever. "A Promoted Pin for McDonalds might convince someone to stop to eat," Google ads VP Jerry Dischler explains. The company has had some form of advertising in Maps since 2010 but it's now building out its Promoted Pins to be much more prominent, and adding new features for advertisers, like letting them list special offers or a local product inventory search bar (so you can check if the Walgreens down the street has the right kind of contact solution before you actually go there).  

You'll also see more Promoted Pins when you make a search like "coffee shops near me." Although Google says that its biggest priority is making sure the ads are useful and unobtrusive, they'll be a good little reminder for users about why Google offers nearly all of its services for free: It's selling your eyeballs. Dischler says that, for now, Promoted Pins won't be personalized (meaning Google won't use your location history to suggest certain businesses) and if you're listening to navigational directions from your phone, the advertisements won't come on the audio.

Google is due to announce this next generation Maps ad at its annual Performance Summit on Tuesday. Google's big pitch to advertisers is that it's the best partner for the "mobile-first" world because its combination of search and maps data can show when its ads actually drive people into stores. 

That's actually been Google's pitch for a while, but now it's showing off proof of success: Since it introduced its "store visits" metric two years ago, advertisers have measured over 1 billion visits. (Google knows when people who've interacted with an ad actually followed up with a store visit provided they have their location history turned on—learn how to turn it on or off here).

"Mobile has been something that was going to happen or was happening, and this is the year that mobile has firmly happened," Sridhar Ramaswamy, SVP of ads and commerce, says. "There are are trillions of searches on Google every year and over half of those searches happen on mobile." You can read about the other ad updates Google is making here. 

May 18 2016 12:40 PM

iTunes Deleted Songs From This Man’s Music Collection—so Apple Engineers Paid Him a Home Visit

This post originally appeared on Business Insider.

Apple sent two engineers to a customer's house to troubleshoot after he wrote about how iTunes deleted swathes of his music collection, and his story subsequently went viral.

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The Cupertino, California-based company is now rolling out an update to iTunes in an attempt to solve the issue.

James Pinkstone had detailed his frustrating experiences with Apple's music software in a blog post earlier this month titled "Apple Stole My Music. No, Seriously."

In it, he laid out how 122 gigabytes of music vanished from his library after he signed up for the subscription service Apple Music.

"iTunes evaluated my massive collection of Mp3s and WAV files, scanned Apple's database for what it considered matches, then removed the original files from my internal hard drive," he wrote. "REMOVED them. Deleted. If Apple Music saw a file it didn’t recognize—which came up often, since I'm a freelance composer and have many music files that I created myself—it would then download it to Apple's database, delete it from my hard drive, and serve it back to me when I wanted to listen, just like it would with my other music files it had deleted."

Pinkstone's story was subsequently picked up by the tech press, with opinion divided as to whether this was a flaw, or if he had—inadvertently—opted into this service and Apple Music was working as intended.

Apple has since said it was a bug, and it rolled out an update to iTunes that should address the issue. "In an extremely small number of cases users have reported that music files saved on their computer were removed without their permission," the company said in a statement provided to TechCrunch. "We're taking these reports seriously as we know how important music is to our customers and our teams are focused on identifying the cause. We have not been able to reproduce this issue, however, we're releasing an update to iTunes early next week which includes additional safeguards. If a user experiences this issue they should contact AppleCare."

To get to the bottom of exactly what went wrong, Apple sent two of its engineers to visit Pinkstone. He was given a special version of iTunes, he wrote in a blog post, "in the hopes that the deletion would again occur ... If something did go wrong ... this version of iTunes would document what happened in more detail than the consumer version could."

Ultimately, Apple didn't manage to reproduce the issue—as it says in its statement. As Pinkstone wrote:

After lunch, we spent hours troubleshooting, but the problem eluded us. This time, the files remained, which was just one of many confounding elements of my whole saga. The problem wasn't cut-and-dry, therefore has proven difficult to replicate. For example, one of the many confusing things about the initial file loss was that only most of my music files had disappeared. Most, but not all. To further muddle the issue, the missing—and remaining—files had little in common; some were WAV, others Mp3, others protected AAC files that I'd purchased when iTunes went through its 2003 through 2009 "controlling boyfriend" phase. Genre, size, and artist name varied greatly among the missing files, as did date added. There was no discernible pattern.

iTunes and Apple Music have been accused of accidentally deleting customers' music before—notably shortly after launch, when Apple blogger Jim Dalrymple had nearly 5,000 songs deleted. He got face time with Apple employees, too, in an attempt to fix it. Let's hope the most recent update from Apple fixes the issue for good.

May 17 2016 4:17 PM

Why Apple Is Suddenly Opening Its Wallet for China

This post originally appeared on Business Insider.

Apple is in the midst of a charm offensive in China. Facing unexpected scrutiny from the Chinese government, the American technology giant is redoubling its efforts to win the hearts of the Chinese authorities and consumers.

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China has never mattered more to Apple—and it's willing to spend big bucks to prove it.

With the largest population in the world, it holds huge potential for Apple. After years of growth, the smartphone market is starting to slow amid an economic downturn—but it is still a vast market.

However, all is not well. Last quarter, amid Apple's first ever iPhone sales decline, its smartphone sales in the Greater China area dropped a nasty 26 percent.

Meanwhile the Chinese government, which has historically tolerated Apple's rise, is starting to take a dimmer view of the Cupertino company. In April, China forced the shutdown of Apple's iBooks and iTunes Movie stores in the country six months after their launch there.

A new report from The New York Times on Monday now asserts the Chinese government is increasing the number of security reviews that Apple—and other foreign tech companies—must undergo.

Some accuse the Chinese government of being motivated by protectionism. "In this particular case, the digital books and movies offered by Apple are considered a potential threat to the Chinese government’s ongoing campaign of keeping out Western liberal ideas,"Minxin Pei wrote for Forbes last month. "In addition, the notion that Apple could dominate China’s digital content market must also have offended Beijing’s protectionist instincts."

Whether the Chinese government's actions are motivated by protectionism or genuine security concerns, Apple can't afford to have its products restricted in one of its largest markets—especially at a time when broader questions are being raised about the company's future growth prospects.

So Apple is throwing money at the problem.

Dipping into its vast, vast reserves of cash, last week Apple made a rare $1 billion investment into the Chinese ride-hailing service Didi Chuxing—a bitter rival of Uber in China. Many took the funding as a peace offering on Apple's part. 

Sina Tech news agency reporter Jia Jinghua told the Financial Times that Apple CEO Tim Cook “is clearly keen to curry favor with Chinese authorities and with Chinese markets. He will take advantage of the latest investments into Didi to pay visits to key ministries."

Cook has also taken the opportunity to visit China in a publicized tour, posing for photos with Didi Chuxing president Jean Liu, and visiting app developers in the country.

The latest move from Apple: An update for music-making app GarageBand targeting the country that "celebrates Chinese music," including traditional instruments, Chinese musical loops, and language localization.

If its cash injections don't win over the Chinese authorities, then the sweet synthesized sounds of Chinese musical instruments might.

May 16 2016 12:13 PM

Now That It’s Basically Taken Everything Else Over, Amazon Is Making Its Own Food Products

This post originally appeared on Business Insider.

It looks as if Amazon is getting into the food business. A new report from The Wall Street Journal says the online retail giant is gearing up to launch its first brand of foodstuffs by "as soon as the end of the month."

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These "private-label brands" will reportedly include Happy Belly (including nuts, tea, and oil), Wickedly Prime (snacks and treats), and Mama Bear (baby products). But they are designed and created by Amazon, with all the profits going straight to the company.

Amazon has sold private-label products before, including toilet paper and batteries, but this is its first foray into food. And it makes total sense.

For a start, the market is huge. The global food retail market last year was $2.14 trillion, according to data compiled by Statista. When we narrow this down to just private-label foodstuffs sold in the U.S., it is still a whopping $80-billion-a-year opportunity (via data from the Private Label Manufacturers Association).

In Europe, one in every three dollars spent in the consumer-packaged-goods market is on private-label content, Nielsen says.

And Amazon's playbook when it comes to online retail is increasingly to see what works, then mimic it—but cheaper. Back in April, Bloomberg published a report on Amazon's practice of monitoring best-selling products on its platform—citing a laptop stand as an example—and then creating its own version of them at considerably lower price points, drawing customers away from the originals.

The tech giant has been selling foodstuffs from other brands for a decade. That's a vast wealth of data to draw upon to figure out exactly what works and how the company can execute in a way that undercuts everyone else, leveraging the company's well-known indifference to profits.

It's a risky business, however, with higher stakes than Amazon normally deals with. If your brand of USB cable doesn't work, customers get annoyed and buy a different one. If your brand of food gives someone salmonella, you risk long-term reputational damage. But the potential rewards have also never been higher.

As shoppers increasingly turn to the web to do their weekly shopping, major supermarkets are beefing up their online grocery-ordering services. Loyalties are up for grabs as consumers make the transition—and Amazon, aiming to be a key beneficiary of this trend, reckons it's worth the gamble.

May 9 2016 1:45 PM

How a Hyperloop Company Plans to Make Its Super-Fast Trains Levitate

This post originally appeared on Business Insider

The company developing Elon Musk's 760mph maglev train has announced new details about the levitation system it plans to use.

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Hyperloop Transportation Technologies said on Monday that it will use a passive magnetic levitation system developed by Lawrence Livermore National Labs. HTT has exclusively licensed the technology for its Hyperloop project.

The Los Angeles-headquartered transportation company wants to build a system that involves firing a pod full of people through a low-pressure tube at speeds of up to 760 mph. It has been described by inventor Musk as a mix between Concorde, a rail gun, and an air hockey table that could take you from Los Angeles to San Francisco in under 30 minutes.

Hyperloop Technologies said that magnetic fields in the tunnel will lift the pod before a "thrust force" is applied by an electric motor, accelerating the pod to speeds just shy of the speed of sound (767 mph).

Maglev technology is already used on trains in Shanghai, China, but it's relatively expensive as it requires copper coils along the track and a large power supply. HTT's "Hyperloop Levitation System"—made out of aluminum rather than copper—has been designed so that it is cheaper than previous iterations of the technology. Much of the energy used to power the electric motor is created and harnessed when the pod decelerates.

"Utilizing a passive levitation system will eliminate the need for power stations along the Hyperloop track, which makes this system the most suitable for the application and will keep construction costs low," said Bibop Gresta, COO of Hyperloop Transportation Technologies, in a statement. "From a safety aspect, the system has huge advantages, levitation occurs purely through movement, therefore if any type of power failure occurs, Hyperloop pods would continue to levitate and only after reaching minimal speeds touch the ground."

HTT is planning to build a five-mile prototype of Hyperloop in California's Quay Valley within the next three years. If successful, larger versions of Hyperloop could be built across the world. Indonesia, Saudi Arabia, Botswana, and India are all in contention. "We think the first Hyperloop will be built in a country where there’s a lack of infrastructure and less regulation," said Gresta.

Critics have questioned whether Hyperloop will ever come to fruition, targeting cost and safety as potential major setbacks.

Several other companies are building their own versions of Hyperloop. Rival Hyperloop Tech is currently trialing its own version of the transportation system.

May 5 2016 5:00 PM

The Mayor of Cupertino, California, Feels “Abused” by Apple

This post originally appeared on Business Insider

Apple is building a new $5 billion campus in Cupertino, California, and is the largest employer in the city. So you'd expect Cupertino's mayor, Barry Chang, to have a close relationship with the company. But the two are barely on speaking terms, according to a report by Nellie Bowles in The Guardian.

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In fact, when Chang last decided to pay an impromptu visit to Apple's campus, while he was a city-council member, before he was mayor, security escorted him off campus. "They said, 'You cannot come in — you're not invited,'" Chang told The Guardian. The city council these days usually votes with Apple, because, as Chang said, "Apple talks to them, and they won't vote against Apple." Chang links Apple's reluctance to work with him to taxes: He wants Apple to pay more, supporting a bill to levy $100 million from Apple to improve infrastructure that was voted down.

According to the most recent statistics cited by Bowles, Apple paid $9.2 million in taxes to Cupertino from 2012 to 2013. In the 2012 fiscal year, Apple made $156.5 billion in sales. Cupertino gives Apple an annual tax break on business-to-business sales that started in 1997, when Apple was on the verge of collapse. “In the meantime Apple is not willing to pay a dime. They’re making profit, and they should share the responsibility for our city, but they won’t. They abuse us,” Chang told The Guardian. 

But Chang's decision to speak out is the latest sign that residents in Silicon Valley, where Apple is rapidly expanding — its parking lots are overflowing, according to The New York Times — may want the tech giant to be a better neighbor. Apple has not commented on Mayor Chang's comments.

There's no doubt that Apple's considerable employee footprint puts stresses on Santa Clara County infrastructure. Traffic around Apple's giant "spaceship" construction project can get hairy at times, and Cupertino has a continually updated webpage with details about road closings and traffic for that project, specifically.

Apple's burgeoning and secretive car project has neighbors complaining about loud noises in neighboring Sunnyvale. Apple's penchant for secrecy can also be at odds with government policies that emphasize transparency. California assemblyman Evan Low, who represents Cupertino and surrounding cities, organized a technology caucus trip to Apple last month to discuss "key issues." A Low representative told me that Apple PR had told her that she could not name the Apple employees whom elected officials met with.

Apple's $5 billion campus is expected to be completed later this year, with Apple employees moving in next year. When Steve Jobs, then Apple's CEO, revealed the project in 2011, a city-council member pressed Jobs on what benefits Apple's construction project could provide the community, like the free public Wi-Fi network Google has implemented near some of its campuses.

Jobs threatened to move the project to neighboring Mountain View. "I'm a simpleton. I've always had this view that we pay taxes, and the city should do those things," Jobs said. "I think we bring a lot more [to Cupertino] than free Wi-Fi.

May 4 2016 11:13 AM

10-Year-Old Hacks Instagram Despite Being Too Young to Sign Up for Instagram, Collects Huge Reward

This post originally appeared on Business Insider.

A 10-year-old boy named Jani successfully hacked Instagram and was paid $10,000 by Facebook for his discovery.

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Jani, who lives in Helsinki, Finland, found a bug that allowed him to edit any caption or comment on Instagram. He is too young to register an account on Instagram or Facebook, but that didn't matter because he was able to demonstrate the hack without logging into an account.

"I could've deleted anyone's, like Justin Bieber's comments from there," he told Iltalehti.

Jani received the $10,000 reward after he submitted the vulnerability to Facebook's bug bounty program. He told Iltalehti that he was initially interested in coding video games but then "started to get interested on information security and started watching Youtube videos on it." 

Jani plans to buy a new bike and a football with the money.

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