|To: Elroy Jetson who wrote (10247)||1/26/2023 6:01:22 AM|
|Why tech companies fire overnight by email and block access? Microsoft says services have recovered after widespread outage|
To avoid outages in their services. This outage came less than a week after Microsoft announced 10,000 job cuts.
|RecommendKeepReplyMark as Last Read|
|From: elmatador||1/27/2023 11:31:34 AM|
|Charlie Javice has been fooling the world for years, long before founding Frank or allegedly defrauding JP Morgan. Here's why they bought it.|
A deeper dive into Javice's early claims would have revealed a history of questionable statements.
In a 2018 interview with Insider, Javice claimed Frank secured an average of $28,000 for its users, and was helping students get "thousands off their tuition."
That figure is more than twice the average aid disbursed to college students in the 2015-2016 school year, the most recent year for which data is available.
KATHERINE LONG JACK NEWSHAM
January 22, 2023 8:32 PM
Investors and media billed Charlie Javice as a groundbreaking young entrepreneur, until JPMorgan Chase sued her for millions of dollars of fraud.
Charlie Javice; Arif Qazi/Insider
The ambitious entrepreneur Charlie Javice had been the subject of glowing profiles in Forbes, Fast Company, Inc. Magazine, and Insider since she was barely out of high school. (ELMAT: Looks like a Greta Thumberg of the financial world)
Her financial aid startup, Frank, was featured in the New York Times, CNBC and Wall Street Journal. She'd been featured on Forbes's 30 Under 30 list and hailed by Wharton Business School as "the voice of a microfinance generation."
In the past week, all that came crashing down. Barely a year after selling Frank to JPMorgan Chase & Co. for $175 million, the bank accused the 30-year-old of fabricating almost four million client names and emails — the overwhelming majority of her company's users.
Javice's lawyer called her a "whistleblower" and said JP Morgan's decision to fire and sue her was a pretext to avoid paying her. But an Insider investigation, based on a review of company documents, media appearances and interviews with 10 former mentors, employees, and others who knew Javice, suggests that she had a history of exaggerating her accomplishments.
Although she positioned herself as an innovator with groundbreaking solutions to student loans and solving global poverty, Javice's greatest talent may have been in leveraging elite institutions and national news outlets to gain an ever-growing platform.
As Javice accumulated accolades and media appearances, no one — including Insider — seemed to question the fundamental claims of her businesses until the day JPMorgan alleged the numbers simply didn't add up.
Over and over, Javice earned plaudits in the media for projects whose impact she overstated. Glowing profiles missed inaccuracies that could have been caught with a basic fact-check, focusing instead on her youth and status as one of a small number of women startup founders. One journalist even introduced Javice, then 19, to a key Frank investor.
Despite a public record that raised questions about Javice and Frank — including warnings from the Department of Education and Federal Trade Commission, and a wage theft lawsuit from Frank's cofounder — news outlets and investors kept buying into the narrative that Javice spun. In one case, Javice pivoted her entire business model without realizing her new concept was part of a heavily regulated industry that required various approvals, but framed this as a learning moment.
Now JPMorgan is alleging that Javice was involved in what would be the largest exaggeration of all. By the start of 2021, Frank was claiming to have 4.25 million users, according to JPMorgan's suit. In reality, it never had more than around 250,000, the bank claims.
After leaving the University of Pennsylvania's Wharton business school, Javice traded on her reputation, bolstered by glowing profiles, as a successful entrepreneur.bii
If Javice's career before the suit had positioned her to be one of the future titans of her industry, JPMorgan's allegations may have put her on the trajectory to be the next Elizabeth Holmes or Sam Bankman-Fried.
Javice and two attorneys representing her did not respond to a request for comment.
Javice has lodged her own lawsuit against JPMorgan, alleging that the company tanked Frank's value by treating the startup's customer base as a marketing opportunity and fired her in order to avoid having to pay a $20 million retention bonus.
A deeper dive into Javice's early claims would have revealed a history of questionable statements. In a 2018 interview with Insider, Javice claimed Frank secured an average of $28,000 for its users, and was helping students get "thousands off their tuition." That figure is more than twice the average aid disbursed to college students in the 2015-2016 school year, the most recent year for which data is available.
But Frank didn't have any kind of magic formula to double the amount of aid students were receiving, student-aid expert Mark Kantrowitz told Insider. All Frank was doing was making it simpler to fill out standard federal financial aid paperwork, a form called the FAFSA.
"Frank did nothing that would have affected the amount of aid the students would have received had they filed the FAFSA on their own," Kantrowitz said. "That would not have led to a doubling of the amount of financial aid."
When Frank was describing how much aid its users received, "it appeared that they made up figures at random," Kantrowitz said.
Lofty goals and big talk
Javice gained a degree of finance-world fame while still in high school as a founder of PoverUp, a small microfinance organization with huge ambitions. Her brother and co-founder Elie posted on Facebook in 2011 that its goal was to reach 100 million high school, college and graduate students worldwide.
PoverUp was styled as a nonprofit that would harness small student contributions to make loans to entrepreneurs in poor countries in order to lift them out of poverty. It came with a compelling origin story, where Javice had volunteered at a refugee camp on the Thai border with Myanmar and been inspired to create the startup. (Javice was there as part of a student travel and learning experience that now costs around $6,000 per trip.)
Javice's goal for PoverUp was to "save the world. Nothing less," (ELMAT: Itold you Greta clone!) said Howard Finkelstein, a lawyer who helped her set the company up and served on its advisory board.
The startup gave Javice the first taste of a symbiotic relationship with media outlets that would carry on for more than a decade. After graduating from a private Westchester high school to attend Wharton Business School, her involvement in PoverUp garnered her a spot on Fast Company's 2011 list of 100 Most Creative People and a complimentary writeup in Forbes. PoverUp was ranked as one of the 11 coolest college startups by Inc. Magazine, while Wharton called Javice the voice of a microfinance generation in a video it has since removed from YouTube.
There was this air about her where she wanted everyone to know that she was an up and coming leader in the field, that she had been anointed.
Soon after landing a spot on Fast Company's list, Javice appeared on a CNBC reality television special featuring anti-democratic billionaire Peter Thiel where entrepreneurs under the age of 20 vied against each other for a $100,000 Thiel Fellowship. Javice has said she was offered that grant but turned it down, but a rejection email obtained by The Daily Beast shows the then-president of the Thiel Foundation informing her that she was not selected.
Javice traded on her reputation as a could-have-been Thiel Fellow and Fast Company designee throughout her time at Wharton, according to PoverUp's Tumblr and a person who knew her at Wharton.
"There was this air about her where she wanted everyone to know that she was an up and coming leader in the field, that she had been anointed," that person said.
But there were fissures emerging between how Javice was heralded in writeups and the reality behind her businesses. Insider found no evidence that PoverUp registered as a nonprofit, and two of the three microlenders that Inc. reported were in talks to partner with PoverUp said that nothing came of the meetings. Despite Javice telling Wharton Magazine in 2013 that PoverUp raised $300,000 from friends and family, a former board member told Insider that it never disbursed a single loan.
"She really didn't get much traction," said Finkelstein, the lawyer. "When she finished school, she basically gave that up."
Pivoting and spinning
After Javice graduated from Wharton in 2013, she immediately turned toward her next startup. The venture would end with a lawsuit in an Israeli court and, by Javice's own telling, her firing all her employees after losing hundreds of thousands of dollars.
Javice, along with Israeli entrepreneur Adi Omesy, had initially set out to build Tapd — a company that connected young workers with job opportunities via text message, according to an archived version of Tapd's website. That idea seems to have fizzled.
Tapd next pivoted to building an alternative credit score for college students. That concept attracted investors, but it also failed after she said the company learned it would need to secure regulatory approvals to operate as a credit bureau. Javice had apparently sold investors on a business before she was sure how to operate it legally – a strategy almost par for the course in the startup world, where entrepreneurs often pitch themselves as "disrupting" the existing modes of doing business.
"Little did I know that there was this whole body of regulation," she said on a 2021 Planet Economics podcast, complying with which would cost "millions of dollars a year."
"That was a no-go." On another podcast Javice recalled that by 2016 she was "$500,000 in the red" and in an interview described needing to fire "all my employees."
"It was the worst thing I've ever had to do," she said in the interview with Authority Magazine, which has since deleted the article. "A lot of my employees were close friends, and still won't talk with me to this day. They didn't understand that it wasn't a personal decision."
Javice's Tapd co-founder Omesy, who on LinkedIn also calls himself a co-founder of Frank, sued Javice in Israel in 2017 for unpaid wages and failing to award him 10% equity in the company. Omesy additionally claimed that his salary for one month was drawn from Javice's personal bank account.
Tapd faced a judgment for about $35,000 in 2021. Omesy didn't respond to Insider's requests for an interview.
While the story of Tapd seemed to be one of failure and contentious mismanagement, Javice would spin that turmoil into a story of triumph. The young founder made the crisis part of her personal success story, omitting the lawsuit and framing the layoffs as a teaching moment. Tapd would be rebranded as Frank, a new startup with a new mission and a new pitch.
In a 2020 email to an online magazine about a possible feature on Javice, obtained by Insider, Frank's public relations representative described it as "miraculous" that Frank had gotten so far. "Charlie's first company fizzled after 18 months, so after losing all her investors' money, she convinced every one of them to fund her next company, Frank."
A media feedback loop
When Javice launched Frank in 2017, she came prepared with a story readymade for the ways that entrepreneurs and the outlets that cover them talk about success. Building a startup is hard, failure is almost inevitable, and real leaders learn from that adversity to find their true calling.
Journalists bit, and she soon tapped into a media feedback loop. Javice was important because she appeared in major news outlets, and major news outlets covered her because she was important. Javice made the podcast circuit, speaking about " the merits of being an entrepreneur," why " rejection is a numbers game," and " Frank's journey to reach almost 10 million households." She was heralded as a "female disruptor." Insider featured her twice, in 2018 and 2021.
The complications of her past leadership at PoverUp and Tapd, especially the lawsuit, never appeared. In 2019, she landed a spot on Crain's New York Business 40 Under 40 list and Forbes's 30 Under 30 — even as she continued to make inaccurate statements about the field she was supposed to be an expert in, student aid.
Javice's 2018 op-ed in the New York Times had a lengthy correction appended, for instance. So did a piece in the Wall Street Journal that was built around an interview with her. In a 2019 appearance on New York's ABC news station, she claimed that college students left $40 billion in financial aid on the table every year — a number that student aid expert Kantrowitz called "bogus."
In an earnings call this month, JPMorgan Chase & Co. CEO Jamie Dimon said the bank's acquisition of Frank was "a huge mistake."Jim Watson/Getty Images
Meanwhile, a journalism connection would help her land a key investor. Dominic Chu, a reporter for CNBC, had given a teenage Javice a tour of Bloomberg's headquarters, as the PoverUp team chronicled on a Tumblr post from around 2011. Chu later introduced her to Michael Eisenberg, the founder of Israeli firm Aleph Venture Capital.
Aleph, an early backer of WeWork, convinced other investors to hop on board, including Silicon Valley firm Slow Ventures, which invested $100,000 in Frank's 2017 seed round, Slow partner Sam Lessin said.
Aleph "is a firm we really like and collaborate with a lot," Lessin wrote in an email. The "check was a quick angel one for us," he added, "to be supportive."
Ten years later, after Frank had been acquired by JP Morgan, Eisenberg tweeted his thanks at Chu for the introduction. Charlie Javice is one of those folks who, at the age of 20, made me think 'what have I done with my life?' Chu responded. Congrats to Charlie on a great entrepreneurship story...and to your team on a successful startup investment story!
Chu declined to comment on the record. Eisenberg did not respond to repeated requests for comment.
In interviews, Javice continued to cast herself as a mold-breaking entrepreneur.
"I built a business and raised funds out of college, turning down a finance job, even though I was told I would fail because I didn't have business experience," she told Insider in 2021, in an article titled "3 leadership tactics a 28-year-old founder who's raised $20 million for her startup lives by." "My impatience to achieve my goals helped me see past that 'conventional wisdom' to take a risk that landed me where I am today."
But even the account circulated by Javice's press team, that she had convinced every one of her old investors to buy in to Frank, had holes in it.
At least one big-name investor described in several news accounts as a Frank backer told Insider his actual involvement was minimal. Despite being included in a list of investors that included Aleph and Marc Rowan, the chairman of Apollo Global Management, Tusk Ventures didn't actually cut a check to Frank, according to its founder Bradley Tusk.
"My consulting firm did a little work for Frank and got paid in equity, which is why you see us on the cap table," he said. "I only met Charlie once."
"I painted a rosier picture than things truly were."
At Frank, Javice admitted she sometimes painted a more positive picture of the company's health than was supported by the facts.
"Being a founder, I'm obviously skewed towards being overly optimistic – and sometimes that works to your advantage, sometimes it doesn't," she said on a 2021 podcast. "And there were definitely times where I painted a rosier picture than things truly were."
Frank's public statements about its user base were all over the map. In April 2017, Frank's website said "thousands" of families using its service had received "$75 million in free aid." (That same website had stock images of people, including of " smiling mature woman and good looking cheerful manager, labeled as actual users.) In November 2018, Frank's website said it had helped 300,000 families unlock over $7 billion in aid.
Frank stuck with the "over 300,000" figure for more than two years. But suddenly, in January 2021, the company began claiming that it served "over 4.25 million students," according to archived versions of its website and tweets from Frank's account referenced in JP Morgan's lawsuit.
In reality, Frank only ever had about 250,000 users, according to JPMorgan's legal complaint.
I cried at work a lot.
Javice maintained a public persona of a savvy entrepreneur, doling out advice to would-be founders about the keys to success. Internally, she was pressuring employees to grow Frank's user base, two former employees told Insider.
One recalled that Frank struggled to build name recognition through multiple rebrandings. "Figuring out how to grow was not very strong," this employee said. "There wasn't a clear direction all the time."
"It was all about growth," another employee said, describing weekly meetings with Javice and then-chief growth officer Olivier Amar. The two leaders emphasized repeatedly in those meetings that "we need to follow through for the people who are investing in this." Amar told this employee that if Frank didn't meet specific user metrics, "then you're gonna lose your job." Amar did not respond to requests for comment.
Both former employees said working at Frank cratered their mental health.
"I cried at work a lot," one said.
Meanwhile, Frank was facing scrutiny from government agencies, including the Department of Education and the FTC, over allegations that it was misrepresenting its products and relationship to the federal government, Insider has previously reported. Both agencies threatened Frank with legal action unless it changed its practices, and Frank settled with the DOE.
An early Frank investor, though, later touted the company's influence with the Department of Education.
Javice "made waves with the US Department of Education that resulted in key policy changes for American families," Aleph Venture Capital founder Eisenberg wrote in a blog post in 2021 celebrating Frank's acquisition.
Eisenberg's Aleph Venture Capital also backed WeWork, whose founder, Adam Neumann, shown here, was ousted from the company in 2019 after revelations of mismanagement botched WeWork's IPO.Jackal Pan/Visual China Group via Getty Images
After JPMorgan acquired Frank, the bank set out to turn what it thought were the startup's more than 4 million users into JPMorgan customers. Last January, JPMorgan sent a marketing email to a batch of about 400,000 Frank users.
"The marketing campaign was a disaster," the bank alleged in its lawsuit. About 70% of the emails bounced back, and only 103 of the email's 400,000 recipients clicked through to Frank's website. JPMorgan launched an internal investigation.
The bank alleges its investigation found that Javice and Amar had hired a New York data science professor to create more than 4 million fake profiles on Frank. Javice and Amar supplemented those fake Frank profiles with email addresses purchased from data brokers, according to the bank's lawsuit.
The marketing campaign was a disaster.
The lawsuit is now prompting many of the same institutions that propelled Javice's rise to begin interrogating her exaggerations. Forbes published a lengthy takedown of Javice this week, initially without mention that the magazine had previously included her on its 30 Under 30 list. (Forbes updated the story after publication to add the disclosure, which had been included in its earlier coverage of the JPMorgan lawsuit). Investors have distanced themselves or gone quiet. JPMorgan has gone from embracing Javice as a financial wunderkind to accusing her of being a serial fabulist – though the brazen nature of Javice's alleged fraud has prompted questions about why JPMorgan didn't catch on sooner.
"In every aspect of her interactions with JPMC, Javice had a choice," the bank, which once touted its acquisition of the "fastest growing college financial planning platform," alleged in its lawsuit: Reveal the truth about her startup and accept that Frank was not as valuable as she claimed, or lie to inflate Frank's value.
"Javice chose each time to lie," it concluded.
Clarification: This story has been updated to reflect the fact that Forbes added disclosure of Javice's placement on its 2019 "30 Under 30" list to a story containing critical reporting on her.
|RecommendKeepReplyMark as Last Read|
|To: Broken_Clock who wrote (10268)||1/28/2023 1:58:00 AM|
|The European Central Bank (ECB) on Friday rejected calls from Europe's banks to ease capital rules to boost lending and put them on an equal footing with U.S. rivals.|
The ECB was responding to a report from the European Banking Federation and consultants Oliver Wyman which said that while banking regulation is internationally coordinated by regulators, differences remain in how the rules work in practice, and how they are implemented.
|RecommendKeepReplyMark as Last Read|
|To: Elroy Jetson who wrote (10265)||1/28/2023 6:12:14 AM|
4,000 Google cafeteria workers quietly unionized during the pandemic
The tech giant is known for its free lunches for employees.
The people who make those lunches have joined unions en masse.
Other groups also have worked on that goal. The Alphabet Workers Union, a group of full-time Google employees and TVCs, officially formed in 2021 to try to make wages and benefits more equal between the two groups.
The AWU is not an official union that has gone through the government certification process.
ELMAT: Once they did that, the die was cast. How those simpletons unionized right at a time when the reveue was plumetting?
4,000 Google cafeteria workers quietly unionized during the pandemic
By Gerrit De Vynck and Lauren Kaori Gurley
September 5, 2022 at 6:00 a.m. EDT
Google is famous for its cafeterias, which serve its legions of programmers and product managers everything from vegan poke to gourmet tacos — free.
But the cooks and servers behind those meals are generally contractors who work for other companies, and do not get the generous perks and benefits reserved for Google employees. So over the past few years, thousands of them have unionized, securing higher wages, retirement benefits and free platinum health care coverage.
Unite Here, a 300,000-member union of hotel and food service workers, has been steadily working to unionize Silicon Valley cafeteria workers since 2018, experiencing the most success at Google. Employed by the contract companies Compass and Guckenheimer, those unionized now make up about 90 percent of total food services workers at Google, according to the union. Workers have unionized at 23 Google offices nationwide, including in Seattle and San Jose.
Now, the union is tackling new territory: the South. On Wednesday, Google workers in Atlanta employed by a different cafeteria company — Sodexo — presented their manager with a list of demands and said they plan to unionize.
Unionizing workers outside of major coastal cities and in the South may be a tougher sell, where union membership is the lowest in the United States and labor laws are generally weaker. Around 6 percent of workers in Georgia are unionized, compared with 18 percent in California and 24 percent in New York, according to the Bureau of Labor Statistics. Although inflation and housing prices have pushed up the cost of living nationwide, prices are still generally lower in the South than in large coastal cities.
On Friday, Sodexo and the union reached an agreement: Should a majority of workers choose to unionize, Sodexo would not try to block it.
“We are hopeful that we can quickly reach an agreement on a union contract that will bring these workers up to the same good standard enjoyed by union food workers at other Google cafeterias nationwide,” said D. Taylor, the president of Unite Here.
Sodexo has many unionized workplaces across the country, said Jane Dollinger, a spokeswoman for the company. “We believe there is a path forward through negotiations to address the differences in wages and benefits.”
“We have many contracts with both unionized and nonunion suppliers, and respect their employees’ right to choose whether or not to join a union. The decision of these contractors to join Unite Here is a matter between the workers and their employers,” Google spokeswoman Courtenay Mencini said.
“Our company has a heritage of fairness, equality, and inclusion. We recognize protected labor rights and maintain a neutral position with respect to union participation,” said Guckenheimer spokesman Peter Mikol. “We honor and respect the decision that many employees made to be represented by the union, and look forward to continuing to work productively together,” said Lisa Claybon, a spokeswoman for Compass.
The average unionized worker at a Google cafeteria makes $24 an hour, pays little to nothing for health insurance and has access to a pension plan. At Sodexo-run Google cafeterias, workers make $15 an hour and pay premiums in the hundreds of dollars, Taylor said.
“It’s a cool place to work at. The downside of that is the wages we’re getting, the amount of work they are requesting,” said Aaron Henderson, a 40-year-old cafeteria worker at Google’s Atlanta office who performs a variety of tasks including cleaning the kitchen, making fresh pizza dough and prepping the salad bar. He supports a family of three, including a daughter who is about to head to college.
“I love the job,” he said. “We all get along. It’s too bad that we’re just underpaid and overworked.”
Housing prices in Atlanta have risen around 18 percent in the past year, according to the real estate platform Zillow, although prices in the city remain lower than in New York or the San Francisco Bay area.
Tens of thousands of the workers who make their living at Google are employed by contract companies. They’re known internally as “TVCs” — temporary, vendor or contractors, and their ranks encompass all sorts of jobs, including cafeteria workers, content moderators, designers, programmers and security guards. Similar dynamics play out at other tech companies, including Facebook and Twitter.
Tech companies have brought enormous wealth to the cities in which they’re based, especially the San Francisco Bay area. Housing prices have shot up over the past decade, pushing many people out and causing security guards, cafeteria workers and shuttle bus drivers to make long commutes to work in jobs that serve tech workers.
“We wanted to focus in on the tech companies because they clearly have been very beneficial to certain workers,” Taylor said. “We didn’t think that should be confined to white collar workers.”
Other groups also have worked on that goal. The Alphabet Workers Union, a group of full-time Google employees and TVCs, officially formed in 2021 to try to make wages and benefits more equal between the two groups. The AWU is not an official union that has gone through the government certification process.
Silicon Valley Rising, a group of union and worker advocacy organizations, also campaigns for better wages and cheaper housing in the San Francisco Bay area.
A tight labor market combined with soaring inflation and pandemic-related safety concerns among front line workers triggered a surge in filings this year to hold workplace union elections. Tens of thousands more workers voted to join unions in the first half of this year than in the first six months of 2021, according to an analysis by Bloomberg Law. Workers also have voted to unionize for the first time at Chipotle, Trader Joe’s and the recreation equipment maker REI — citing concerns related to safety and low wages.
More than 230 Starbucks locations have voted to unionize since last year, triggering tough opposition from the company, which recently was accused by the National Labor Relations Board of illegally withholding raises and benefits from union workers. And this year, the first Amazon warehouse and Apple Store voted to unionize.
Richard Ramirez, 33, who works at a Google office in Seattle receiving food shipments and making sure they’re stored safely, says he was skeptical when union representatives began approaching his colleagues.
“We had it relatively good,” Ramirez said. The $20 he made at Google was better than the $11 he made in a previous job that left him without enough money even to afford rent. Still, he was commuting over three hours a day because of the high cost of living in Seattle. He decided to support the union.
Now, he is paid $27 an hour, and the free health-care plan means he doesn’t think twice about getting the best care for his family, Ramirez said. The money has made a real difference for him.
“Since we unionized, I have bought a home and that was basically only possible because we unionized,” he said.
Subscribe to comment and get the full experience. Choose your plan ?
|RecommendKeepReplyMark as Last Read|
|From: elmatador||1/30/2023 7:42:37 AM|
|What if you wake up one morning and you discover you have to pay for Big Tech apps: |
Gmail, Whatsapp, Google Earth, etc.?
OTT enabled Big Tech to use apps to deliver content free of charge to users to delivery of media content and services via the internet, bypassing traditional cable, broadcast, and satellite television platforms. This enabled Facebook and Google to amass a huge users base that they used for sell ads.
THE LAW OF THE BIG NUMBERS
Offering apps for free requires significant financial investment to support the infrastructure, development, and maintenance costs.
The apps can only remain free if the revenue from advertising grows alongside the growth in users.
Cut for today: Big Tech is saddled with billions of users but ad revenue went down. There are around 4 billion email accounts in the world, and around 1.8 billion of those are Gmail. When you run a service for that many users, they run you.
|RecommendKeepReplyMark as Last Read|
|From: elmatador||1/30/2023 8:07:32 AM|
|Google attacked the heart of Micrososft's business when it launched its G Suite. Microsoft can now strike back at the heart of Google's business. |
Microsoft could decide to integrate chat-based AI technologies like ChatGPT into Bing to differentiate their product and go after market share from Google and Meta.
|RecommendKeepReplyMark as Last Read|