The Daily Memphian, a nonprofit news site in Memphis, is also part of the wave, with readers contributing the bulk of its revenue. It started in 2018 in response to the shrinking of the local newspaper, The Commercial Appeal. Nearly 17,000 subscribers pay $99 per year (or $12.99 per month) for The Memphian, and they have renewed their subscriptions at a rate of 90 percent, said Eric Barnes, the publication’s chief executive. Ad sales, sponsorships and donations cover the rest of a $5 million annual budget that supports a newsroom of 38.

“People paid for news for decades,” Mr. Barnes said. “Why can’t they pay for it now?”

The imperative to hold on to subscribers has influenced The Memphian’s journalism, he added, bringing an emphasis on straightforward articles on local issues. The publication connected with readers, for instance, through its coverage of the replacement of East Memphis’s elegant Century Building with a Woodie’s Wash Shack convenience store and carwash.

Mr. Barnes added that he was against offering discounts to subscribers, a strategy that is backed by Matt Lindsay, the president of the subscription consultant Mather Economics, who said the price of a subscription was not the main factor for readers who declined to renew.

“Usually, it’s some other reason,” said Mr. Lindsay, whose clients include The New York Times. “They lose the habit of reading every day, there’s other competition for their entertainment, someone else has attracted their attention.”

The business news site Quartz started in the days of giveaway journalism and made the shift to asking readers to pay in 2018. In addition to 1.3 million regular readers of its newsletters, which are still offered free of charge, it has 27,000 subscribers who pay $99.99 a year (or $14.99 a month), a Quartz spokeswoman said, and the renewal rate is 97 percent.

“Listening and responding to readers is what’s necessary for retention,” said Katherine Bell, the editor in chief.

Article source: https://www.nytimes.com/2021/10/04/business/media/digital-media-defector-deadspin-dispatch.html

I don’t know this company in particular, but this happens very often. I can imagine a business plan that said, “In the short term, we will pay people to do this task in order to build up a training data set so that we can train our machine learning algorithms.”

I actually just saw a company a couple of days ago where it was that exact same structure. Only they did it the way I think is right. In their venture pitch, they were very honest, they said, “Here is the current number of tasks that are completed every day on our platform, and here is the fraction of tasks that are completed by the A.I. versus the humans.” And you could see that the fraction is growing. So there is a level of disclosure that can make that plan ethical.

In start-ups you’ve invested in, or in your own companies, are there examples where testing something that doesn’t exist or painting a vision that you haven’t achieved was an OK and necessary thing to do?

It’s hard to pick a specific example because in every start-up, that’s intrinsic to the job. Again, it’s not about deception. It’s about the fact that you’re talking about the future and the future is always uncertain.

I’ll give you an example. I was once raising money for a start-up, and we had a hockey stick-shaped graph in our pitch that showed the number of customers we had and the revenue we had. And I remember showing it to an investor who said, “This is amazing. Congratulations. What are the units on this graph, is this of thousands or tens of thousands?” And I’m like, “Oh, sorry, sir, my mistake. This is the actuals, this is in ones.”

And that investor laughed us out of the room and never talked to us again. But another investor looked at the exact same data, the exact same chart, with the exact same disclaimers and disclosures and said,” I believe there’s something going on here.”

You’re always asking people to extrapolate from a very limited data set into the future. And I would say that the fact that you’re doing that requires you to be very rigorous and honest with people at that stage, because it’s very easy to give them the wrong impression. It’s very easy for them to feel deceived. And once you go down that path, the lies and the deceptions compound.

Article source: https://www.nytimes.com/2021/10/02/business/dealbook/ozy-eric-ries.html

But if you want a small-business loan? There, the government’s definition is far more expansive. The Small Business Administration, which orchestrated the popular Paycheck Protection Program, generally considers any company with fewer than 500 employees a “small” one. Unless you’re in one of dozens of industries with exceptions, which are detailed in a 49-page document that can seem almost whimsical in its divisions. A company that mines gold ore counts as small if it has up to 1,500 employees, but the limit falls to 750 for iron miners and just 250 for those that extract silver.

One thing about tiny companies is clear: They vastly outnumber their bigger brethren. The government estimates that there are nearly 32 million small businesses in America. Most have no employees beyond the owner. Their ranks include practitioners of nearly every profession — solo lawyers and accountants, Uber drivers, tutors, gig-working delivery cyclists, artists and writers and musicians and millions of salaried workers with side hustles.

Weed out those businesses and you’re left with six million employer firms, each with a payroll ranging from a handful of people to a few hundred. Only 20,000 companies in the country, according to data from the Census Bureau, are truly large businesses, with 500 or more employees.

To entrepreneurs in that squishy middle, the line between being a little business and a big one can feel pretty fuzzy. Twenty years ago, Franz Spielvogel joined Laughing Planet, which was at the time a single-location fast-casual cafe in Portland, Ore. It was a hit, so he and his business partner opened another Laughing Planet. Then another. Today, Mr. Spielvogel runs 15 locations in three states, with 224 workers.

Mr. Spielvogel said his mini-chain feels like a collection of neighborhood spots, which he likes. “We’re not Sweetgreen,” he said. “We’re not saying, ‘Let’s do 100 stores in the next six months.’ That’s not our mission.”

Being a midsize company can have some pain points, like having a limited legal and human resources infrastructure to handle the thicket of regulations that come with employing hundreds of people. But Mr. Spielvogel enjoys running a company small enough that it is able to preserve that first shop’s ethos and corporate culture. He’s unfazed — and honestly somewhat relieved, he said — by the new vaccination-or-testing mandate. He has been trying to coax his staff to get vaccinated by offering paid time off for each shot, and he hopes a mandate will convince his last few holdouts.

Even some teeny companies are eager to embrace it. Aaron Seyedian, the founder of Well-Paid Maids in Washington, said he wished the mandate extended to companies like his, which has 17 people.

Article source: https://www.nytimes.com/2021/09/18/business/smallbusiness/small-business-vaccine-mandate-threshold.html

Questionable, unethical, even dangerous behavior has run rampant in the male-dominated world of tech start-ups. Though never charged with crimes, WeWork’s Adam Neumann and Uber’s Travis Kalanick hyped their way into raising over $10 billion for their companies, claiming they would disrupt their stagnant, tired industries.

Remember the accusations of harassment, privacy violations, price gouging, misleading advertising and any of the other dozens of scandals at Uber? How about the genocide incited on Facebook in Myanmar, or its engagement-centric approach that led to the proliferation of anti-vaccination propaganda on the platform? Neither Mr. Kalanick nor Mark Zuckerberg has faced any significant legal consequences.

Meanwhile, a Tesla employee reportedly described part of a Tesla manufacturing plant as a predator zone for women. News reports recount allegations of racist threats, effigies, and humiliation against Black workers. (Tesla has told the Times there is no evidence of “a pattern of discrimination and harassment.”) Elon Musk, Tesla’s chief executive, did get his hand slapped for fraud — only it was by the Securities and Exchange Commission, which banned him from posting on Twitter without supervision from Tesla’s lawyers.

Leading this race to the bottom, Juul brought vaping mainstream, raising billions of dollars along the way. Kevin Burns, the chief executive who helped raise $12.8 billion for Juul from Altria, a tobacco giant, claimed his product was designed to help people stop smoking cigarettes. Nevertheless, in June 2019, Congress began an investigation into Juul’s part in the youth nicotine epidemic, including efforts to market its products as safe for children. By mid-February 2020, a report from the Centers for Disease Control and Prevention showed that 68 people in the U.S. had died from lung injury associated with the use of vaping products.

Male chief executives and founders just aren’t held accountable in ways that would lead to reform across the tech industry. And even when they are made to answer for their actions, they find their ways back into the fold very quickly.

Article source: https://www.nytimes.com/2021/09/15/opinion/elizabeth-holmes-trial-sexism.html

Questionable, unethical, even dangerous behavior has run rampant in the male-dominated world of tech start-ups. Though never charged with crimes, WeWork’s Adam Neumann and Uber’s Travis Kalanick hyped their way into raising over $10 billion for their companies, claiming they would disrupt their stagnant, tired industries.

Remember the accusations of harassment, privacy violations, price gouging, misleading advertising and any of the other dozens of scandals at Uber? How about the genocide incited on Facebook in Myanmar, or its engagement-centric approach that led to the proliferation of anti-vaccination propaganda on the platform? Neither Mr. Kalanick nor Mark Zuckerberg has faced any significant legal consequences.

Meanwhile, a Tesla employee reportedly described part of a Tesla manufacturing plant as a predator zone for women. News reports recount allegations of racist threats, effigies, and humiliation against Black workers. (Tesla has told the Times there is no evidence of “a pattern of discrimination and harassment.”) Elon Musk, Tesla’s chief executive, did get his hand slapped for fraud — only it was by the Securities and Exchange Commission, which banned him from posting on Twitter without supervision from Tesla’s lawyers.

Leading this race to the bottom, Juul brought vaping mainstream, raising billions of dollars along the way. Kevin Burns, the chief executive who helped raise $12.8 billion for Juul from Altria, a tobacco giant, claimed his product was designed to help people stop smoking cigarettes. Nevertheless, in June 2019, Congress launched an investigation into Juul’s part in the youth nicotine epidemic, including efforts to market its products as safe to children. By mid February 2020, a report from the Centers for Disease Control and Prevention showed that 68 people in the U.S. had died from lung injury associated with the use of vaping products.

Male chief executives and founders just aren’t held accountable in ways that would lead to reform across the tech industry. And even when they are made to answer for their actions, they find their ways back into the fold very quickly.

Article source: https://www.nytimes.com/2021/09/15/opinion/sexism-theranos-elizabeth-holmes.html

“Silicon Valley is a lot cleaner today than when I started, during the 1990s dot-com bubble,” said Reed Kathrein, a San Francisco lawyer who successfully sued Ms. Holmes and Theranos in 2016 on behalf of investors. “Everyone is throwing money at these start-ups. Everyone thinks they’re going to win the lottery. It’s easier to be honest.”

Reforms prompted by the collapse of WorldCom, a long-distance telephone company, and Enron, an energy company, in the early 2000s have also had an impact.

“Some of the changes in laws, like the Sarbanes-Oxley Act, put the screws on the accountants,” Mr. Kathrein said. “They have to do their jobs now.”

Thirty years ago, the tech industry was known as much for physical products as for software. Indeed, software used to be a physical product. If sales were not going well, that offered possibilities for subterfuge.

MiniScribe, a Colorado disk storage company that had fallen on hard times, was taken over in 1984 by Hambrecht Quist, prominent Silicon Valley financiers. The investment firm pumped in money and installed its own management. In 1988, to keep its numbers up, MiniScribe managers packed 26,000 bricks into MiniScribe boxes and shipped them to Singapore. When the scheme was revealed, the company went bankrupt and the chief executive went to jail.

In this sense, Mr. Kathrein noted, Ms. Holmes’s case was a throwback. She was charged with making false and misleading statements to investors that Theranos’s proprietary analyzer, named Edison, was a medical marvel that could perform a full range of clinical tests. It could not.

“She was shipping bricks,” he said. A lawyer for Ms. Holmes declined to comment.

Mr. Kathrein’s conclusions are not widely accepted. Asked if tech people had become more honest over the decades, Margaret O’Mara, a historian of Silicon Valley, burst into laughter.

Article source: https://www.nytimes.com/2021/09/07/technology/silicon-valley-prosecutions.html

Her high profile presents a challenge in finding jurors who have not formed opinions about her or the case. Jury members filled out a 28-page questionnaire outlining their media consumption, medical experiences and whether they have heard of Ms. Holmes or seen her TED Talk. About half of the more than 200 potential jurors had consumed media related to the case, according to a court filing last week.

It is unclear whether Ms. Holmes will take the stand to defend herself. As Theranos’s chief executive and chairwoman, she was persuasive and inspiring. She fiercely defended Theranos and dismissed any criticism as a sign that the company was changing the world.

But if Ms. Holmes takes the stand, prosecutors could use past statements to hurt her credibility. In a Securities and Exchange Commission deposition in 2017, she responded to questions by saying “I don’t know” at least 600 times.

“It will be hard for her to say, ‘I remember it this way,’ when she said ‘I don’t know’ so many times,” said John C. Coffee Jr., a professor at Columbia Law School who is not involved in the case. “That is the most damaging evidence against her.”

By the time the United States indicted Ms. Holmes in 2018, the once high-flying Theranos was all but dead.

Ms. Holmes founded the start-up at age 19 in 2003 and dropped out of Stanford soon after. She hired Mr. Balwani in 2009 and raised more than $700 million from investors, valuing Theranos at $9 billion. The Palo Alto, Calif., company struck deals with Walgreens and Safeway to offer its blood testing in their stores. It also attracted dignitaries, senators and generals — including George Shultz, Henry Kissinger, William Frist and James Mattis — to its board of directors.

“We’ve reinvented the traditional laboratory infrastructure,” Ms. Holmes said at a 2014 conference. “It eliminates the need for people to have needles stuck in their arm.”

Article source: https://www.nytimes.com/2021/08/30/technology/trial-elizabeth-holmes-theranos.html

Beth Esponnette, fundadora de Unspun, empresa de pantalones jeans hechos a la medida, comentó que los inversionistas muchas veces la han alentado a ser más agresiva, a optar por acciones que bien podrían rayar en la deshonestidad. En una ocasión, un inversionista le recomendó inflar sus perspectivas de beneficios por un múltiplo de 10, un nivel de lo más irreal.

El mes pasado, Esponnette publicó un ensayo titulado “I Get It, Elizabeth Holmes”, en el que describe este tira y afloja. Muchas de las acciones de Holmes fueron inexcusables, escribió Esponnette, de 33 años de edad. “Pero de cualquier forma pienso que estaba convencida de que hacía lo correcto y solo seguía la recomendación universal de Silicon Valley: ‘Finge hasta conseguir el éxito’”.

Varias mujeres que trabajan en empresas emergentes del sector tecnológico le escribieron para agradecerle por escribir sobre los sentimientos que comparten muchas de ellas, afirmó Esponnette.

Lola Priego, de 30 años, fundadora de Base, una empresa que ofrece análisis de sangre y saliva en el hogar que luego son procesados en laboratorios tradicionales, dice que escucha una comparación con Theranos al menos una vez a la semana. Las referencias provienen directa o indirectamente de socios potenciales, asesores, inversionistas, clientes y reporteros, dijo.

Priego afirma que entiende la necesidad del escepticismo porque las nuevas empresas de atención médica deben ser analizadas de manera crítica para prevenir la negligencia. A menudo, las comparaciones se detienen después de que la gente se entera de que Base trabaja con Quest Diagnostics, una empresa multinacional, para realizar el análisis de sus pruebas.

“Pero el sesgo y el escepticismo adicionales son difíciles de superar”, dijo Priego.

El mayor golpe vino de un asesor científico a quien Priego intentó contratar en 2019. El asesor asistió a la reunión para decirle que llevar la tecnología al cuidado de la salud estaba perjudicando a la industria, al igual que sucedió con Theranos. Eso hizo que Priego se cuestionara si podía contratar el tipo de asesores que necesitaba.

“Fue bastante desmoralizante”, dijo. Desde entonces, ha contratado a seis asesores.

En julio, Verge Genomics concretó una alianza con la gigante farmacéutica Eli Lilly que le permitirá trabajar durante tres años en fármacos para el tratamiento de la esclerosis lateral amiotrófica, o ELA, dijo Zhang. Además, la empresa publicó el año pasado en una revista científica un artículo sobre sus métodos y este año contrató a un director para el área de Ciencias.

Fue todo un alivio poder mostrarles algo a quienes dudaban, afirmó Zhang.

“La época más frágil de cualquier compañía es la etapa inicial, cuando tienes que ganarte a las personas, convencerlas de tu visión y de los méritos de la idea”, explicó. Acerca de Holmes y Theranos, añadió: “En esa etapa, este tipo de asociaciones pueden ser de lo más dañinas y mermar tu potencial”.

Erin Griffith escribe sobre nuevas empresas tecnológicas y capital de riesgo desde la oficina de San Francisco. Antes de unirse al Times, fue redactora sénior en Wired y Fortune. @eringriffith

Article source: https://www.nytimes.com/es/2021/08/27/espanol/theranos-elizabeth-holmes.html

Julia Cheek, founder of Everly Health, which provides at-home health tests through its subsidiary, Everlywell, said at a conference in 2019 that comparisons to Ms. Holmes were so frequent that colleagues and advisers even suggested she dye her hair so that the connections would stop. Both women have blond hair. Ms. Cheek did not change her hair color.

Ms. Cheek, 37, attributed the constant analogies to the fact that few female-founded companies get to a certain size and profile, which magnifies the actions of those that do. “Women founders have to navigate these types of questions that their male counterparts simply don’t have to answer,” she said.

The frequent comparisons are pernicious, many entrepreneurs said. In conversations with investors, female founders often field what researchers call “prevention” questions, which are framed negatively and designed to prevent losses. But male founders are more often asked “promotion” questions about a start-up’s possibilities, which allow them to focus on their hopes and ideals, according to researchers at London Business School and Harvard.

“If you’re offered a promotion question, you can answer in a promotional way,” said Andy Coravos, founder of HumanFirst, an at-home health care start-up. “The core issue you have with Elizabeth Holmes is it’s a prevention question.”

Some women said they also felt caught in a start-up ecosystem that venerates bold, disruptive businesses, with investors often forgiving those who bend the rules or who take shortcuts in pursuit of growth.

Beth Esponnette, founder of Unspun, a custom jeans company, said investors had frequently encouraged her to be more aggressive, sometimes to the point of dishonesty. One once advised her to increase her revenue projections by 10 times, a wildly unrealistic level.

Last month, Ms. Esponnette published an essay describing this struggle titled “I Get It, Elizabeth Holmes.” Many of Ms. Holmes’s actions were inexcusable, Ms. Esponnette, 33, wrote. “But I still believe that she thought she was doing the right thing taking the universal advice of Silicon Valley: ‘Fake it till you make it.’”

Article source: https://www.nytimes.com/2021/08/24/technology/theranos-elizabeth-holmes.html

And so, too, do the Abushis, though with one difference. They are wealthy themselves. Though raised in a tightknit first-generation clan by parents whose lives were often defined by displacement and financial reversal, they became rich in their own right following the sale, in 2014, to a venture capital group of a chain of 100 Verizon franchises built across the western United States in barely 10 years. Though declining to disclose the precise amount of the deal, they ballparked it at $50 million.

With little debt and their own substantial grubstake, the four Abushi brothers — Abed, Yas, Rosco and Fadi — set about looking for a business that would keep them united as a unit, combine a shared passion for cars (their own collection numbers over 100) and feature their name on the door. In 2017, they relocated from Northern California, where the retail custom market was predictably saturated, settling on Queens as a hub because — surprisingly and despite the dense pack of wealth in the country’s financial capital — nothing quite like it existed.

“Before them, you’d have to take your chances and go from shop to shop,” Mr. Jean-Raymond said. “And you were always getting ripped off.”

Sitting in the Abushi showroom last week, Abed Abushi, 41, explained how across the decades their peripatetic father had built and lost a number of businesses, among them a wholesale fruit concern in Texas, a string of bodegas and supermarkets around Oakland, Calif., and a confectionery distributorship in New Jersey. Occasionally collateral damage from tragic international events played a role in his family’s fate, Abed said: “After 9/11, no one would do business with my dad and so he went bankrupt.”

“But his view was always that money comes and goes but family is the only real wealth,” Rosco Abushi, 35, said then. “Because of that, we’re never afraid to go back to nothing because we had nothing.”

Article source: https://www.nytimes.com/2021/08/19/style/hypebeasts-hit-the-road.html