Friday, March 8, 2019

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Tesla made a drastic change to its bonus structure before deciding to cut costs by closing stores, salespeople say - INSIDER

Posted: 07 Mar 2019 03:32 PM PST

  • Tesla dramatically altered its bonus structure for retail employees last year, advisers told Business Insider.
  • At the same time, the company merged all sales roles to encompass both car and energy products.
  • The changes came as Tesla raced to deliver vehicles ahead of a quarterly deadline.
  • Last week, CEO Elon Musk announced the company is shuttering most of its retail stores and shifting all sales to the internet.

Ahead of Elon Musk's surprise announcement that Tesla will close most of its 378 retail stores, the company shifted the roles of its salespeople and changed bonus structures in a way that employees say was a bid to cut costs.

In the third quarter of 2018 — the first of two consecutive quarterly profits reported by the company — energy advisers that formerly worked in the field were moved to in-store positions, alongside owner advisers who focused on selling vehicles, a Tesla energy adviser told Business Insider.

Shortly after, Tesla erased any distinction between the two sales roles. All advisers were instructed to sell the whole ecosystem, both vehicles and energy systems, to customers in stores.

"We had to adjust to not being fed all of our home-appointment leads, but how to drive leads at the store level," the employee said. "That was very difficult for the company to do. It didn't seem like they had very much direction or a cohesive strategy on how to do that."

Around the same time, Tesla also changed its bonus structure so that individual bonuses were tied to team performance in a store. Previously, bonuses and commissions were on an individual-sales basis only.

"If the store didn't hit its minimal goal, let's say 70% of goal, you would get nothing," the adviser said. Another source with knowledge of the bonus-structure changes also confirmed this to Business Insider.

A Tesla spokesperson declined to comment.

CNBC reported on Thursday that the company was sending hourly employees home early and asking workers to take time off in a similar bid to cut costs.

News of the bonus changes comes as Tesla introduces a $35,000 version of its Model 3 and moves all sales to online. This month, the company plans to unveil a new car, the Model Y.

Mark Zuckerberg is rumored to have a secret escape passageway beneath his conference room for emergencies - Business Insider

Posted: 07 Mar 2019 12:41 PM PST

When Facebook CEO Mark Zuckerberg first got 24/7 executive protection, there was a problem: He kept wandering off.

Sources said that in the early 2010s, the world-famous tech cofounder didn't always keep his security team — initially just one person — in the loop on his plans. He might decide on a whim to leave the office, go for a jog, or to a bar, leaving his staff scrambling to keep up.

"He [was] in his mid-twenties ... he was developing a platform he truly believed was good ... at the time he didn't grasp the concept that there were haters out there," one source said.

Since then, however, the billionaire exec has grown more accepting of the constant presence of executive protection, according to insiders. His closely monitored patterns of life now far more closely resemble a head of state than a typical 34-year-old engineer, with the stricter security practices mirroring the increasing fortification of Facebook over the years.

Business Insider spoke with current and former workers at Facebook's Global Security organization and others familiar with the matter, obtained internal company documents, reviewed court documents, and surveyed publicly available information in a 5,000-word investigation into how Facebook handles its corporate security, which you can read in full here.

These sources described sophisticated logistical challenges in protecting tens of thousands of employees and contract workers every day, and an underlying struggle that the techie ideals of openness and engineer freedom have with the realities of protecting a high-profile and increasingly controversial multinational firm — as well as the challenges that come with protecting one of the world's richest men.

They also shared stories of stolen prototpes, gang violence, state-sponsored espionage fears, stalkers, car bomb concerns, secret armed guards — and more.

The rumored 'panic chute'

Armed executive protection officers stand on constant guard outside Zuckerberg's gated homes in the Bay Area, at least one of which also features a panic room. If he goes to a bar, his team will sweep through ahead of time to make sure it's safe. They will vet new any new doctors, and they will assess his instructors if he wants to take up a new hobby. He is driven everywhere, with the security team monitoring traffic and adjusting his route accordingly. (Back when he still drove, Zuckerberg was, in the words of one source, a "s----- driver.")

During company all-hands meetings, members of Zuckerberg's Praetorian Guard sit at the front of the room and are dotted throughout the crowd, just in case an employee tries to rush him. They wear civilian clothes to blend in with non-security employees.

Zuckerberg doesn't typically work in a cordoned-off office like a traditional corporate executive. Instead, his regular desk is on the floor of Facebook's open-plan office, just like everyone — but executive-protection officers sit near his desk while he works, in case of security threats. Facebook's offices are built above an employee parking lot, but it's impossible to park directly beneath Zuckerberg's desk because of concerns about the risk of car bombs.

He also has access to a large glass-walled conference room in the middle of the space near his desk that features bullet-resistant windows and a panic button. There's also a persistent rumor among Facebook employees that he has a secret "panic chute" his team can evacuate him down to get him out of the office in a hurry. The truth of this matter remains murky: One source said they had been briefed about the existence of a top-secret exit route through the floor of the conference room into the parking garage, but others said they had no knowledge of it. Facebook declined to comment on this.

Zuckerberg toboggans down the Great Wall of China.
Facebook

A $10 million security plan

All told, there are now more than 70 people on the executive-protection team at Facebook, led by former US Secret Service special agent Jill Leavens Jones. In July 2018, Facebook's board approved a $10 million security allowance for Zuckerberg and his family for the year.

And with good reason: The billionaire chief exec lives an extraordinarily public life, with 118 million followers on Facebook alone (making him both an icon of Facebook's ideals and, increasingly, a magnet for public ire after his company's recent scandals), and the threats he faces are severe.

He receives numerous of death threats each week, and the security team actively monitors social media for mentions of him and Sheryl Sandberg, Facebook's chief operating officer, to detect them. The pair also have stalkers, who alternately declare their undying love for the execs and harbor worrying vendettas against them.

Zuckerberg and Sandberg are the only two Facebook execs with 24/7 executive protection, though others may get it for specific occasions, such as during travel. The pair also have amusing security code names, which Business Insider is not publishing for safety reasons.

Such stalkers are classified as "BOLOs," short for "Be On the Look Out," a category of person barred from all Facebook property. If BOLOs use Facebook or the other apps the company owns, the security team may quietly use data drawn from these apps to monitor their location without telling them, CNBC previously reported.

In one surreal episode, someone turned up outside Zuckerberg's house with a love letter scrawled across the side of their truck, a source said. Security officers initially assumed it was directed at the CEO — but it was actually for the benefit of one of the housekeeping staff.

Pranks and political stunts are another concern: High-profile execs make prime targets, as Microsoft cofounder Bill Gates infamously discovered when he had a pie thrown in his face in Brussels in 1998. Anytime Zuckerberg goes out in public, there are concerns he could be mobbed, and his appearances at events are carefully planned and mapped out.

People will also send unsolicited presents to his home — everything from cookies to a gift from a rabbi after the birth of one of his children. (These get sent to the security team for inspection; Zuckerberg doesn't open them himself.)

In Facebook's offices, things are less intense, but employees will still rush to get the seats at meetings closest to Zuckerberg. Executive-protection officers are instructed to be alert for employees and guests at the offices trying to take unauthorized photos of Zuckerberg, which is against the rules. Some employees, too, will try and give him gifts.

"If you've ever been close to his office, you'll see there are big burly people sitting there staring at screens. They pretend to be software engineers, but everyone knows that they are security guards," one Facebook employee wrote in a Quora post. "Once I was there at 7am, and tried to take a picture of his office (he was not inside) to send to my family, but immediately, 3 of the men came seemingly out of nowhere and asked me to delete the picture."


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The future of Facebook looks like China's WeChat - Business Insider

Posted: 07 Mar 2019 01:01 PM PST

Imagine this: you are walking down Fifth Avenue in New York City and you spot a hip coffee shop. It's cold so you decide to pop in for a hot chocolate.

As you wait in line, you notice that no one is pulling out their wallet to pay. Instead they tap their phone and voila, there's their macchiato. You realize the app everyone is using to pay is Facebook.

But you deactivated your Facebook account months ago. They don't accept cash. No hot chocolate for you.

A week later, you're at lunch with a friend and she tells you all of your friends went to a club last weekend. You ask her why she didn't invite you. She says she forgot. You don't use WhatsApp, which Facebook owns, and that's where they made the plans.

The bill comes and you two decide to split it. She pays with Facebook on her phone. When it comes time to give her your share, you fumble. You don't use Facebook anymore and can't use its built-in "Bill Splitter." Now you have to go to the ATM to get cash.

You head to the train station to catch the commuter rail to your parents' house. Everyone is walking directly onto the train, swiping the ticket they bought on Facebook. You get into the long line to buy one from the only agent still working the station and nearly miss the train.

If it sounds far-fetched that an app could be this ubiquitous and essential to daily life, think again. It already exists in China.

WeChat, or Weixin as its known in Chinese, has been described by The New York Times, in a video about Western firms copying Chinese apps, as a "Swiss Army knife."

Over the course of six weeks in China last spring, I saw firsthand how essential WeChat is to modern Chinese life.

Each of those scenarios I just described actually happened to me in China.

China's 'Swiss Army Knife' app is everywhere

A typical QR code to purchase fruit using WeChat.
Harrison Jacobs/Business Insider

As one Chinese person described it to me, everyone uses WeChat. It's more than an app or service, it is modern life. More than 1 billion people use the app, and it has been China's most popular for some time.

While WeChat is first and foremost parent company Tencent's messaging service, the app serves a variety of functions from messaging, social networking, and e-commerce to taxi-hailing, bike-sharing and travel booking.

If you want to talk to someone in China — for work or personal — you don't use e-mail, you don't call their phone, you send them a message on WeChat.

When I first started reporting in China, I found it impossible to find e-mail addresses and, even when I did, I often didn't get responses. Then I downloaded WeChat and suddenly found myself in direct contact with every source I could want.

It was like being able to see after spending a week blind.

Read more:One photo shows that China is already in a cashless future

What's amazing is how many people use WeChat's various services — not just young tech-savvy millennials.

My partner's grandmother, who is Chinese, doesn't know how to use the internet, but she has WeChat on her phone and she's an expert at it. When you meet someone at a business meeting in China, no one asks for your phone number or hands out a business card; you scan each other's QR codes so you can trade WeChat IDs.

When you wander through a city, busking musicians and panhandlers don't ask for coins or cash; they have signs with their WeChat Pay QR code on it.

I remember the first time I saw this phenomenon play out. I was standing in front of the ancient city walls of Xi'an, a city of 13 million in northwestern China, when I happened upon a group of Chinese students gathered to listen to a few musicians sing on a Saturday night.

The musicians had no open guitar case to take tips. But every couple of songs, one of their friends held up two cards printed with QR codes — one for Alipay, WeChat Pay's competitor, and the other for WeChat Pay. Dozens of the attendees lifted up their phones and, in seconds, had scanned the QR code and sent a few yuan to the performers.

Mark Zuckerberg's dream also means getting more user data

Facebook CEO Mark Zuckerberg speaks at Facebook Inc's annual F8 developers conference in San Jose
Reuters

This is the kind of ubiquity Mark Zuckerberg seemed to be alluding to in his most recent blog post on Facebook's future. As BI's Shona Ghosh wrote, Zuckerberg "appears to be envisaging a future where people touch a Facebook-owned service for every aspect of their daily lives, just like WeChat in China."

Make no mistake, despite Zuckerberg's recent overtures to protect user privacy, this kind of business plan is about getting more invasive user data, not less.

The Chinese tech industry's greatest innovation is the mass adoption of ecosystem-based technology platforms, including WeChat and Alibaba.

Most often likened to the Amazon of China, Alibaba began as an e-commerce platform but has expanded into travel booking, movie tickets, social networking, live-streaming, food delivery, and entertainment. Alipay's data and services deeply are integrated into its main app, linking accounts to a money market fund, loan products, and a credit-scoring business.

The consumer data from these services is used to build detailed profiles of each user, which companies can then monetize for marketing purposes directly within their apps in ways that even Facebook and Google would salivate over.

One Chinese tech exec told me how consumer data they'd gathered was so targeted and specific that they were helping brands determine what products they should be building or selling in the future and what consumers to target, not just how to advertise right now.

That kind of data is the long play that it sounds like Facebook has in mind.

In China, many Chinese are okay with the ubiquity of apps like WeChat because it comes down to a trade-off between convenience and privacy. Chinese internet services have developed rapidly through widespread access to the user data generated by mobile payments, food deliveries, ride-hailing, messaging, and other services.

It's made people's lives easier. With little history of privacy in Chinese culture, many Chinese have shrugged at WeChat's ubiquity.

Whether America's tech industry follows the same path will likely come down to whether Americans make the same choice.

Okta will acquire no-code workflow automation startup Azuqua - Business Insider

Posted: 07 Mar 2019 05:26 PM PST

Okta announced Thursday during its earnings call that it will acquire startup Azuqua for $52.5 million — its largest acquisition to date.

Azuqua, which was founded in 2013 and raised some $16 million, helps people automate their work and connect their applications without having to write code or do any repetitive manual tasks. This acquisition is expected to close at the end of Okta's fiscal first quarter.

Its platform will be integrated into Okta's flagship identity management tool, which helps customers log in to many work apps with just their corporate username and password. Okta says that Azuqua's software will make it possible for customers to share data between those apps, too.

"It's a great technology and a great team. It's supercharging a product we have," Frederic Kerrest, COO and co-founder of Okta, told Business Insider. "If you look at how they see the world and how they think about integration platforms, it's a very good alignment with what we do."

In addition, Okta has been working to aggressively grow its product engineering teams, and the company felt Azuqua had the right talent to help it go further, Kerrest says.

"Azuqua is a very good fit from a team and technology perspective," Kerrest said. "Most of the engineering innovation you'll continue to see, that's all organically growing. As we see opportunities we're going to continue to be aggressive."

Going forward, Okta will continue to look into acquisitions in the security infrastructure and identity management space, as well as other companies that support its product, Kerrest says.

"Everyone's going to the cloud," Kerrest said. "Everyone's going through digital transformation. Everyone's prioritizing software nowadays. Security is just the forefront of everyone's minds. We're at the right place and at the right time, and we're really focused on customer success."

Read more:She helped one company define a new market. Now, former MetricStream CEO Shellye Archambeau is joining $7.4 billion Okta to do it again

In 2017, Okta acqui-hired the authentication startup Stormpath, and last year, it acquired security startup ScaleFT.

As for Okta's earnings, it posted a loss of $0.04 per share on about $115 million in revenue — ahead of Wall Street expectations, and about 50% higher than the same period a year ago. However, the company also posted lower-than-expected guidance for the next quarter and its full fiscal year, and the stock is sliding as low as 7% in after-hours trading on Thursday.

Nasdaq tries to lure companies for direct listings - Business Insider

Posted: 07 Mar 2019 08:40 AM PST

Nasdaq quietly tweaked a rule last month that will allow it to compete head-on with rival NYSE for direct listings of splashy tech companies.

While the New York-based exchange group has executed a handful of direct listing since 2014, it sought a rule change with the Securities and Exchange Commission to provide more clarity around the process. The filing also served another purpose, according to Jay Heller, Nasdaq's head of capital markets and IPO execution: To remind the Street Nasdaq is open for business when it comes to direct listings.

The move comes as unicorn startups like AirBnB and Slack are rumored to be considering a direct listing. Streaming music company Spotify went public via a direct listing last year on the New York Stock Exchange.

Nasdaq's filing, which is similar to NYSE's last year, ensures the exchange is ready for the next company that might chose to take the non-traditional listing route, said Jay Ritter, a finance professor at the University of Florida.

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"The exchanges want to clarify the rules so that there is no ambiguity that might deter a company from listing on that exchange," Ritter told Business Insider. "It's unlikely that Spotify is going to be a one-off direct listing. Some other prominent companies are very likely to use the procedure as well."

Heller said the rule change also served as a way to let the Street know that Nasdaq can indeed perform direct listings on its exchange.

"It was all about really making sure that people were thoroughly aware," Heller said.

Under the new rule change, companies looking to do a direct listing are that it lists on Nasdaq's main market, has market valuation of at least $250 million, and has filed a registration statement and has bank acting as a financial advisor. The requirements are similar to that of NYSE, which filed its rule change to offer direct listing in February 2018.

Read more: Slack's anticipated IPO is still expected to be an unusual 'direct listing,' and it could be a Silicon Valley game changer

In a direct listing, the company sells its shares directly to the market instead of having banks underwrite the initial shares. The process is risky, as the stock could be more susceptible to volatile price swings without the backing of the banks, which is why firms typically opt for a traditional IPO.

However, for well-funded companies that already have strong brand recognition, a direct listing allows them to save on commission fees and potentially avoid the lock-up period on selling stocks for current shareholders that typically comes with normal IPOs.

"A direct listing is not for everybody," Heller said. "But there are situations where companies have really exceeded and performed extremely well as being a private company but still need that platform or want a platform out there to provide potential liquidity and allow potential shareholders to come in over time if they choose to."

See also: A long wait, and then wild market swings: What to expect when Spotify goes public

The idea of a large company direct listing first came into vogue last year when Spotify chose to take the non-traditional route.

Spotify's listing succeeded, but bankers insisted the music-streaming platform's listing wouldn't change the overall IPO industry.

The move left some to question whether the industry would see a trend of direct listings among the large unicorns looking to move to the public markets in 2019. Generally, companies looking to do a direct listing need a high level of brand recognition to sell their shares directly into the market without the assistance of a bank.

"With certain companies that were in the limelight, I guess, and had the spotlight on them, that probably created a little bit more of people asking questions around this type of listing," Heller said. "Will we see a whole influx of direct listings? I guess time will tell."

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