Daily Crunch: Saudis probably hacked Bezos’ phone

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1. UN calls for investigation after Saudis linked to Bezos phone hack

United Nations experts are calling for an investigation after a forensic report said Saudi officials “most likely” used a mobile hacking tool built by the NSO Group to hack into the phone of Amazon founder Jeff Bezos .

The report, carried out by FTI Consulting, said it was “highly probable” that the phone hack was triggered by a malicious video sent over WhatsApp to Bezos’ phone. Within hours, large amounts of data on Bezos’ phone had been exfiltrated.

2. Netflix adds 8.8M subscribers despite growing competition

Netflix addressed the competitive landscape in its Q4 earnings report, arguing that there’s “ample room for many services to grow as linear TV wanes,” noting that during the quarter, “our viewing per membership grew both globally and in the U.S. on a year over year basis, consistent with recent quarters.”

3. Tencent to grow gaming empire with $148M acquisition of Conan publisher Funcom in Norway

Tencent is cementing its position as one of the world’s biggest video and online gaming companies by revenue. Funcom, meanwhile, is traded publicly on the Oslo Stock Exchange, and the board has already recommended accepting the offer — which is being made at around 27% higher than Tuesday’s closing share price.

4. Google’s new experimental apps focus on reducing screen time — including one that uses a paper envelope

The new apps include a Screen Stopwatch for tracking screen time, another that lets you visualize your phone usage as bubbles and a third that lets you put your phone in an envelope. And no, that last one’s not a joke — the envelope would still allow you to make and receive calls, and to use the camera to take photos.

5. Your Sonos system will stop receiving updates if you have an old device

If you own a Zone Player, Connect, first-generation Play:5, CR200, Bridge or pre-2015 Connect:Amp, FYI: Sonos is going to stop shipping updates to those devices. And if Spotify and Apple Music update their application programming interface in the future, your devices could stop working with those services altogether.

6. Cruise doubles down on hardware

GM subsidiary Cruise now employs more than 1,700 people, a considerable chunk of whom are software engineers. Less well-known is the company’s strategy of building out a hardware team, which will eventually take over Cruise’s 140,000-square-foot building on San Francisco’s Bryant Street.

7. Adblock Plus’s Till Faida on the shifting shape of ad blocking

Faida tells us that the company is trying to thread a fine line between conflicting interests and string together a critical mass of internet users who want to get rid of unwelcome distractions; along with digital publishers and ad purveyors who want to maximize eyeballs on their stuff — and are likely especially keen to reach a tech-savvy, ad-blocking demographic. (Extra Crunch membership required.)

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The $100M ARR club welcomes four new members

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re adding a few names to the $100 million annual recurring revenue (ARR) club. The new entrants come after we kicked off 2020 with a previous four new members. So far in January, we’ve also highlighted SiteMinder’s $70 million ARR and expected ramp to $100 million, Cloudinary’s $60 million ARR sans venture capital and Seattle’s ExtraHop, which expects to reach $100 million ARR this year.

The $100 million ARR club, in case you’re just joining us today, is a list of yet-private companies that have either reached the $100 million ARR mark, or are close to reaching it and have plans to crest the threshold in short order. The goal of writing and publishing the list is to provide a non-valuation lens through which we can view the private market’s leading constituents. Revenue milestones matter more than valuation bumps.

This morning we’re digging into MetroMile, Tricentis, Kaltura and Diligent (with a caveat). Let’s begin!


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Can a time machine offer us the meaning of life?

We are continuing our discussion of Ted Chiang’s Exhalations. Today (and one day late thanks to the MLK holiday), I give some thoughts on the first short story of the collection, “The Merchant and the Alchemist’s Gate” and kick off the discussion for the second short story of the collection, the eponymous “Exhalation.”

Previous editions of this “book club”:

Some quick notes:

  • Want to join the conversation? Feel free to email me your thoughts at danny+bookclub@techcrunch.com or join some of the discussions on Reddit or Twitter.
  • Follow these informal book club articles here. That page also has a built-in RSS feed for posts exclusively in the Book Review category, which is very low volume.
  • Feel free to add your comments in our TechCrunch comments section below this post.

Reading The Merchant and the Alchemist’s Gate

I was electrified reading this short story. It’s one of the most obvious examples I can give on the power of re-reading the same work multiple times: what begins as a fairly open-ended and fractal plot finally comes all together in its final lines, beautifully inviting the reader to come back around a second time to understand how the various puzzle pieces fit together even better.

Structurally, Chiang has done something marvelous in such a short number of pages. He has taken the familiar trope of the time machine and has managed to create a multi-layered and non-linear narrative about fate and destiny, while also maintaining a sense of progressive plotting. There is the overarching story of the main character talking to His Majesty, but then this story is also a retrospective of multiple tales, all of which interrelate with each other directly and through their messages. Like the Gate itself, this structure is truly a masterwork of craftsmanship.

A bit aggressively, Chiang has laid on his primary theme quite thickly, with the main message of the story bottled up and exhorted in its closing pages. As Eliot Peper pulled out in the reading guide for this story, the primary passage is this:

Past and future are the same, and we cannot change either, only know them more fully. My journey to the past had changed nothing, but what I had learned had changed everything, and I understood that it could not have been otherwise. If our lives are tales that Allah tells, then we are the audience as well as the players, and it is by living these tales that we receive their lessons.

What Chiang is exploring is the definition of a “lived” existence. It’s one thing to go through the motions and do our work every day, connecting with friends along the way. It is quite something else to understand how our actions affect the world around us, and to viscerally begin to comprehend exactly what our actions mean to us and to others.

In this way, the theme reminds me a bit of the arch-plot of David Mitchell’s Cloud Atlas, in which the actions of a character in one era have reverberations down through the years. Notes taken by an explorer get read by someone decades later and changes their life, and so we have these chaos/butterfly effect moments where even slight intentions can have long-term historical ramifications.

Chiang is saying something more taut: we aren’t just performing for a future audience — we are actually performing for ourselves, and sometimes for ourselves in the past. We are in fact sending a message back in time. I thought that the Gate, and the fact that it allows people to both travel to the future and to the past, creates this interesting connection. While it is a linear time impossibility that our future destinies are performing for us today, the message behind the theme I think has deep resonance.

At multiple times throughout the story, characters withhold crucial details from themselves in order to heighten the experience of living. Chiang writes, “In pursuing the boy, with no hint of whether he’d succeed or fail, he had felt his blood surge in a way it had not in many weeks.” Knowing the actual surprises of daily life comes with it its own reward, even as further rewards are acquired as we understand the meaning and lessons of how we react in such moments.

Within the TechCrunch world, we talk about startups and the future all the time. There is incredible ambiguity in the work that founders and venture capitalists do every day. Will this decision lead to the right outcome? Am I investing in the right company in the space? Why won’t someone just give me the right answer?

But Chiang is getting to something insightful, which is that the ambiguity in many ways is the definition of living. If we already knew the answer, then what is the point? It’s the satisfaction of acting a certain way at a certain time — even if it may well be fixed in advance — that ultimately provides meaning to our lives. Half the “fun” (and it isn’t fun, is it?) of being an entrepreneur is simply not knowing the answers in the first place.

Finally, I want to point out something that Chiang does better than almost any startup founder, and that is his introduction of the Gate itself. Chiang brilliantly enthralls the reader with this new technology, without ever having to explain in minute detail how the thing works or its patterns.

By having Bashaarat wave his hands through the gate, he visually demonstrates the technology for both the narrator and for us as readers, even while the complexity of the device becomes more apparent over the coming pages. The device (both plot and technology) is explained so naturally and progressively that we never have to stop to think — it’s purpose just comes organically. If only more startup pitches were like this!

All together then, the short story manages to weave a discussion of fate, destiny, truth, ambiguity, and the meaning of existence into a handful of pages based around a small tech device that really is just a backdrop to a deeper human tale. If this isn’t science fiction at its finest, I don’t know what is.

Thank you to Gio, Eliot, Joanna, Justin, Veronica, Bruce, Damion, and Scott who sent me emails related to this short story. Will try to include more reader comments in future editions.

Reading guide to Exhalations

We will read the next short story in the collection, Exhalations, for next week (targeting Tuesday January 28th). Here are some questions to think about as you read and enjoy the story:

  • How does Chiang think about connections, both between individuals, and also between civilizations?
  • What do the various metaphors in the story (air, copper, gold, etc.) mean? Why did he choose these specific metaphors?
  • Chiang chooses this extensive metaphor of the body as machine. Why? What purpose does considering our bodies this way have for the story?
  • The story dwells on memory and death. What message is the author sending about what it means to experience something?
  • This story would seemingly connect with several major global issues today. What are those connections, and how does Chiang try to navigate the controversies of them in this short story?
  • Is the story ultimately hopeful or sad? What emotions resonate for you in this story?

If you have feedback or thoughts you would like me to include, please feel free to email me at danny+bookclub@techcrunch.com.

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Bear Robotics, a company making robot waiters, just raised a $32 million round led by SoftBank

Back in August, we flagged a filing for you that we’d found interesting, one for a now 2.5-year-old, 40-person Redwood City, Calif.,-based startup called Bear Robotics that’s been developing robots that deliver food to restaurant customers. The filing listed a $35.8 million target; Bear Robotics founder and CEO John Ha now tells us the final close, being announced today, was $32 million in Series A funding.

The round was led by SoftBank Group, whose other recent robotics bets include the currently beleaguered food truck company Zume and, as we reported yesterday, Berkshire Grey, a seven-year-old, Lexington, Ma.-based company that makes pick, pack and sorting robots for fulfillment centers and that just raised a whopping $263 million in Series B funding led by SoftBank.

But of course, we know you’re interested in much more than Bear Robotics’ funding picture, so we asked Ha — a former Intel research scientist turned technical lead at Google who in recent years opened and closed his own restaurant — to share more about the company and its robot servers.

TC: You were an engineer at Google. Why then start your own restaurant?

JH: It’s not like I had a dream of having a restaurant; it was more of an investment. It sounded fun, but it didn’t turn out to be fun. What I was really shocked by was how much hard work is involved and how low [employees’] income is. I felt [as I was forced to close it] that this was going to be my life’s work — to transform the restaurant industry with the skills I have. I wanted to remove the hard work and the repetitive tasks so that humans can focus on the truly human side, the hospitality. At restaurants, you’re selling food and service, but most of your time is spent dealing with hiring people and people not showing up, and I suspect our product will change [the equation] so restaurants can focus more on food and service.

TC: How did you come up with the first idea or iteration of the robot you’ve created, that you’re calling Penny?

JH: First, me and my restaurant staff constantly discussed, ‘If we have this robot, what would it look like and what capacity and features would it need?’ I knew it couldn’t be too big; robots have to be able to move well in narrow spaces. We also focused on the right capacity. And we didn’t want to make a robotic restaurant. I wanted to build a robot that no one really cares about; it’s just in the background, sort of like R2D2 to Luke Skywalker. It’s a sidekick — a bland robot with a weak personality to get things done for your master.

TC Let’s talk parts. How are these things built?

JH: It’s self-driving tech that’s been adopted for indoor space, so it can safely navigate from Point A to Point B. A server puts the food on Penny, and it finds a way to get to the table. It has a two wheel differential drive, plus casters. It’s pretty safe. A lot of similar-looking robots have blind spots but ours doesn’t. It can detect baby hands on the floor — even something as thing as a wallet that’s fallen from someone’s table.

We’re not using robot arms because it’s very difficult to make it 100% safe when you have arms in a crowded space. The material — it’s going to be plastic —  is safe and easy to clean and able to work with the sanitizers and detergents used in restaurants. We’ve also had to made sure the wheels won’t accumulate food waste, because that would cause issues with the health department.

TC: So this isn’t out in the world yet.

JH: We haven’t entered the mass manufacturing phase yet.

TC: Where will these be built, and how will you charge for them?

JH: They’ll be made somewhere in Asia — maybe China or some other country. And we haven’t figured out pricing yet but restaurants will be leasing these, not buying them, and there will be a monthly subscription fee that they are paying for a white-glove service, so they don’t have to worry about maintenance or support.

TC: How customizable are these Penny robots going to be? Are there different tiers of service?

JH:  Penny can be configured into several modes. The default is [for it to hold] three trays, so it can carry food to a table or a server can use it for bussing help.

TC: Will it address the customers?

JH: Penny can speak and play sound, but it’s not conversational yet. It can say, ‘Please take your food,’ or play music while it’s moving. That’s where customers may want to personalize the robot for their own purposes.

TC: Ultimately, the idea is for this to be sold where — just restaurants?

JH: Wherever food is served, so it’s being tested right now in some restaurants, casinos, some homes. [I’m sure we’ll add] nursing homes.

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Should tech giants slam the encryption door on the government?

Reuters reported yesterday, citing six sources familiar with the matter, that the FBI pressured Apple into dropping a feature that would allow users to encrypt iPhone backups stored in Apple’s cloud.

The decision to abandon plans to end-to-end encrypt iCloud-stored backups was reportedly made about two years ago. The feature, if rolled out, would have locked out anyone other than the device owner — including Apple — from accessing a user’s data. In doing so, it would have made it more difficult for law enforcement and federal investigators, warrant in hand, to access a user’s device data stored on Apple’s servers.

Reuters said it “could not determine exactly” why the decision to drop the feature was made, but one source said “legal killed it,” referring to the company’s lawyers. One of the reasons that Apple’s lawyers gave, per the report, was a fear that the government would use the move as “an excuse for new legislation against encryption.”

It’s the latest in a back and forth between Apple and the FBI since a high-profile legal battle four years ago, which saw the FBI use a little-known 200-year-old law to demand the company create a backdoor to access the iPhone belonging to the San Bernardino shooter. The FBI’s case against Apple never made it to court, after the bureau found hackers who were able to break into the device, leaving the question of whether the government can compel a company to backdoor their own products in legal limbo.

The case has prompted debate — again — whether or not companies should build technologies that lock out law enforcement from data, even when they have a warrant.

TechCrunch managing editor Danny Crichton says companies shouldn’t make it impossible for law enforcement to access their customers’ data with a warrant. Security editor Zack Whittaker disagrees, and says it’s entirely within their right to protect customer data.

Zack: Tech companies are within their rights — both legally and morally — to protect their customers’ data from any and all adversaries, using any legal methods at their disposal.

Apple is a great example of a company that doesn’t just sell products or services, but one that tries to sell you trust — trust in a device’s ability to keep your data private. Without that trust, companies cannot profit. Companies have found end-to-end encryption is one of the best, most efficient, and most practical ways of ensuring that their customers’ data is secured from anyone, including the tech companies themselves, so that nobody other than the owner can access it. That means even if hackers break into Apple’s servers and steal a user’s data, all they have is an indecipherable cache of data that cannot be read.

But the leaks from last decade which revealed the government’s vast surveillance access to their customers data prompted the tech companies to start seeing the government as an adversary — one that will use any and all means to acquire the data it wants. Companies are taking the utilitarian approach of giving their customers as much security as they can. That is how you build trust — by putting that trust directly in the hands of the customer.

Danny: Zack is right that trust is critical between technology companies and users — certainly the plight of Facebook the past few years bears that out. But there also has to be two-way trust between people and their government, a goal thwarted by end-to-end encryption.

No one wants the government poking their heads into our private data willy-nilly, scanning our interior lives seeking out future crimes à la Minority Report. But as citizens, we also want to empower our government with certain tools to make us safer — including mechanisms such as the use of search warrants to legally violate a citizen’s privacy with the authorization of the judiciary to investigate and prosecute suspected crimes.

In the past, the physical nature of most data made such checks-and-balances easy to enforce. You could store your private written notebooks in a physical safe, and if a warrant was issued by an appropriate judge, the police could track down that safe, and drill it open if necessary to access the contents inside. Police had no way to scan all the private safes in the country, and so users had privacy with their data, while the police had reasonable access to seize that data when certain circumstances authorized them to do so.

Today, end-to-end encryption completely undermines this necessary judicial process. A warrant may be issued for data stored on let’s say iCloud, but without a suspect’s cooperation, the police and authorities may have no recourse to seize data they legally are allowed to acquire as part of their investigation. And it’s not just law enforcement — the evidential discovery process at the start of any trial could similarly be undermined. A judiciary without access to evidence will be neither fair nor just.

I don’t like the sound or idea of a backdoor anymore than Zack does, not least because the technical mechanisms of a backdoor seem apt for hacking and other nefarious activities. However, completely closing off legitimate access to law enforcement could make entire forms of crime almost impossible to prosecute. We have to find a way to get the best of both worlds.

Zack: Yes, I want the government to be able to find, investigate and prosecute criminals. But not at the expense of our privacy or by violating our rights.

The burden to prosecute an individual is on the government, and the Fourth Amendment is clear. Police need a warrant, based on probable cause, to search and seize your property. But a warrant is only an authority to access and obtain information pursuant to a crime. It’s not a golden key that says the data has to be in a readable format.

If it’s really as difficult for the feds to gain access to encrypted phones as they say it is, it needs to show us evidence that stands up to scrutiny. So far the government has shown it can’t act in good faith on this issue, nor can it be trusted. The government has for years vastly artificially inflated the number of encrypted devices it said it can’t access. It’s also claimed it needs the device makers, like Apple, to help unlock devices when the government has long already had the means and the technologies capable of breaking into encrypted devices. And the government has refused to say how many investigations are actively harmed by encrypted devices that can’t be unlocked, effectively giving watchdogs no tangible way to adequately measure how big of a problem the feds claim it is.

But above all else, the government has repeatedly failed to rebut a core criticism from security engineers and cryptography experts that a “backdoor” designed only for law enforcement to access would not inadvertently get misused, lost, or stolen and exploited by nefarious actors, like hackers.

Encryption is already out there, there’s no way the encryption genie will ever float its way back into bottle. If the government doesn’t like the law, it has to come up with a convincing argument to change the law.

Danny: I go back to both of our comments around trust — ultimately, we want to design systems built on that foundation. That means knowing that our data is not being used for ulterior, pecuniary interests by tech companies, that our data isn’t being ingested into a massive government tracking database for broad-based population surveillance, and that we ultimately have reasonable control over our own privacy.

I agree with you that a warrant simply says that the authorities have access to what’s “there.” In my physical safe example, if a suspect has written their notes in a coded language and stored them in the safe and the police drill it open and extract the papers, they are no more likely to read those notes than they are the encrypted binary files coming out of an end-to-end encrypted iCloud.

That said, technology does allow scaling up that “coded language” to everyone, all the time. Few people consistently encoded their notes thirty years ago, but now your phone could potentially do that on your behalf, every single time. Every single investigation — again, with a reasonable search warrant — could potentially be a multi-step process just to get basic information that we otherwise would want law enforcement to know in the normal and expected course of their duties.

What I’m calling for then is a deeper and more pragmatic conversation about how to protect the core of our system of justice. How do we ensure privacy from unlawful search and seizure, while also allowing police access to data (and the meaning of that data, i.e. unencrypted data) stored on servers with a legal warrant? Without a literal encoded backdoor prone to malicious hacking, are there technological solutions that might be possible to balance these two competing interests? In my mind, we can’t have and ultimately don’t want a system where fair justice is impossible to acquire.

Now as an aside on the comments about data: the reality is that all justice-related data is complicated. I agree these data points would be nice to have and would help make the argument, but at the same time, the U.S. has a decentralized justice system with thousands of overlapping jurisdictions. This is a country that can barely count the number of murders, let alone other crimes, let alone the evidentiary standards related to smartphones related to crimes. We are just never going to have this data, and so in my view, an opinion of waiting until we have it is unfair.

Zack: The view from the security side is that there’s no flexibility. These technological solutions you think of have been considered for decades — even longer. The idea that the government can dip into your data when it wants to is no different from a backdoor. Even key escrow, where a third-party holds onto the encryption keys for safe keeping, is also no different from a backdoor. There is no such thing as a secure backdoor. Something has to give. Either the government stands down, or ordinary privacy-minded folk give up their rights.

The government says it needs to catch pedophiles and serious criminals, like terrorists and murderers. But there’s no evidence to show that pedophiles, criminals, and terrorists use encryption any more than the average person.

We have as much right to be safe in our own homes, towns and cities as we do to privacy. But it’s not a trade-off. Everyone shouldn’t have to give up privacy because of a few bad people.

Encryption is vital to our individual security, or collective national security. Encryption can’t be banned or outlawed. Like the many who have debated these same points before us, we may just have to agree to disagree.

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