UBS leads blockchain data reporting pilot ahead of new EU rules

ZURICH/NEW YORK (Reuters) – Financial companies led by Swiss bank UBS are testing a blockchain platform to help them comply with new European Union trade data standards due to come into force next year.

FILE PHOTO: Christmas decorations are seen at the building of Swiss bank UBS at the Paradeplatz square in Zurich, Switzerland, November 27, 2017. REUTERS/Arnd Wiegmann

Blockchain, the technology underpinning cryptocurrencies such as bitcoin, is a shared and immutable database maintained by a network of computers on the internet.

The more stringent requirements are part of the Markets in Financial Instruments Directive II, an overhaul of EU rules aimed at improving financial market transparency..

“The project is getting market participants to collaborate using blockchain to improve regulatory reporting,” Peter Stephens, head of blockchain at UBS, told Reuters.

The group, which includes Barclays, Credit Suisse, KBC, Swiss stock exchange SIX and Reuters parent Thomson Reuters, is testing an Ethereum blockchain to help ensure data accuracy and consensus.

Ethereum, a type of blockchain that can be used to develop decentralized applications, was invented by 23-year-old programer Vitalik Buterin. Many large companies and industry consortia have teamed up to develop standards and technology to make it easier for enterprises to use the Ethereum code, hoping it can help them streamline some of their processes.

“The point is to allow us to come to a consensus for this noncompetitive reference data which is essential for trade reporting purposes,” Stephens said.

Rather than replacing existing processes the blockchain, which runs on the Microsoft Azure cloud, will let financial firms perform a “quality check” of their own data against that of others, Stephens said. UBS Head of Data Christophe Tummers added that the pilot may be expanded to not only detect anomalies but resolve them too.

The new EU rules, which are due to take effect on Jan. 3, 2018, require banks to report more data to regulators and will also oblige banks and financial firms to obtain information identifying clients, issuers and counterparties of trades.

One element in this is a Legal Entity Identifier (LEI), a unique 20-digit code that connects key information about a company or legal entity such as its name, location, industry and regulatory data, which financial groups must obtain from clients before making any transactions that require reporting.

Firms can anonymously submit data onto the private blockchain, which will then check for any anomalies against other submissions under the same LEI, allowing the firm to update or standardise its own submissions.

Financial institutions have been investing in blockchain with the aim of developing software that can help them better manage some data-heavy processes. Proponents say it is well suited for when many parties need access to the same data.

“This use of blockchain to solve real-world regulatory requirements in a cost effective way is very appealing,” Credit Suisse’s head of blockchain strategy, Emmanuel Aidoo, said.

The pilot phase, which uses real LEI data, is set to conclude at the end of January.

Reporting by Brenna Hughes Neghaiwi and Anna Irrera; editing by Alexander Smith

Our Standards:The Thomson Reuters Trust Principles.

Patagonia Going After President Trump Tops This Week's Internet News Roundup

Who can even manage to get into the holiday spirit considering the whirlwind week that just passed? Not only was Southern California on fire, but several politicians resigned amidst sexual harassment claims while others continued to run for office despite facing their own sexual abuse allegations. Yes, time continued to speed up last week, but what else happened? Just a few small things. Keep reading.

This Land Is My Land, Apparently

What Happened: The President of the United States wants Americans to own America. As long as it’s only some Americans, and in a manner he’s OK with.

What Really Happened: In the latest phase of The Plan to Make America Great Again, last week President Trump announced moves to shrink two national monuments, claiming that, by doing so, he was freeing the lands from the control of “a small handful of very distant bureaucrats located in Washington.” The changes also open up the possibility of destroying hundreds of thousands of sites of archaeological importance and impacting the environment, but we’re getting ahead of ourselves. Let’s start with how this came about in the first place.

Oh, that makes a grim amount of sense. Unsurprisingly, not everyone was on board this, uh, “historic” decision.

As the Navajo Nation joined with four other American Indian tribes to sue Trump over this decision, another protest sprouted up in a more unexpected quarter.

This protest went beyond a PR stunt, with Patagonia also suing the president, with their lawsuit being no less than the fourth one filed against him over the national monuments decision. Surely, with this kind of opposition, the president and his administration is reconsidering making this kind of move, right?

Guess not.

The Takeaway: B-b-but Trump sounded so convincing when he was explaining it all during his press conference! What happened?

Oh, OK.

The Mueller Investigation, Part 6,448,003

What Happened: You know what it’s like: You tell the special counsel not to do something, and he just can’t resist. It’s like telling someone not to think of pink elephants, except with a massive federal investigation.

What Really Happened: Those paying attention to special counsel Robert Mueller’s investigation into issues surrounding potential collusion between the Trump 2016 campaign and Russian forces might remember that the president had, in July, announced ared linefor the investigation: his finances. “I think that’s a violation,” he explained. “I have no income from Russia. I don’t do business with Russia.” Why do we mention that now?

Yes, last week news broke that Mueller had apparently subpoenaed records relating to Trump’s finances from Deutsche Bank. That certainly seems like a big deal, doesn’t it?

Or, maybe not. After all, the president’s lawyer was quick to pour scorn on the whole thing.

Well, that certainly puts that to rest, right, everyone?

No, wait. We said that everything was put to rest. Stay on topic, everyone.

Money laundering? That’s surely far too far-fetched…

…Oh. That link, for those who didn’t click through, links to a 2015 press release about the Trump Taj Mahal Casino Resort being fined $10 million for “willful and repeated violations of the Bank Secrecy Act, with future periodic external audits to examine its anti-money laundering (AML) BSA compliance program” required as a result. So… yeahhhhh.

The Takeaway: You may be wondering, however, “So, did the president’s lawyer just outright lie about the subpoena? Is that… legal?” There’s an out, for those who are concerned for the moral upstandingness of Jay Sekulow. He might have been telling the truth, and someone else was lying…

…Sometimes the law turns the truth into Schrödinger’s cat, apparently.

Capitol Gains and Losses

What Happened: The president of the United States made good on one of his campaign promises—and in the process unleashed disaster and calamity.

What Really Happened: When the inevitable history of the Trump administration is written, people will look back on last week as one of the more important ones, and all because of something outside US borders.

…which was followed by some more news reports…

…which was followed by a lot of nervousness…

…and then the official announcement:

The statement was a dramatic one, being called a “deadly provocation,” an “act of diplomatic arson,” and a “big risk” by the media. Others tried to make sense of it all, while noting that it put the Middle East “on edge.” Still, at least evangelical Christians were happy. On social media and elsewhere, the reaction was swift.

At time of this writing, things seemed to be escalating.

The Takeaway: Leave it to Stephen Colbert to try to find the silver lining.

Frozen Out

What Happened: Russia got banned from the Winter Olympics. It was an ordeal.

What Really Happened: Perhaps you remember outrage over Russian doping scandals at the 2014 Winter Olympics. The International Olympic Committee certainly does, and announced last week that Russia will be banned entirely from next year’s Winter Olympics, although Russian athletes would be able to compete if they tested clean and agreed to appear under the Olympic flag.

Turns out, the decision was not only well covered by a somewhat surprised media, but also somewhat controversial on social media, prompting some unusual responses.

There were also, of course, the obvious jokes.

But it’s not like the US would skip the games in solidarity or anything, right?

…Right. But this is definitely the year to go! With all those competitors out of the game, the odds for medals are so much better!

The Takeaway: White House Press Secretary Sarah Huckabee Sanders was asked about this during a briefing last Thursday, and she had a couple of answers, as it turned out:

So, the US going or not? Your guess is as good as anyone else’s, it seems…

One For You, Two For Me

What Happened: The delicate balance between patrons and artists was upset last week when an outside party decided to make a somewhat inexplicable change.

What Really Happened: Patreon is a crowdfunding platform that many people rely upon to support their work, with the relationship between creators and funders being an important one that requires care, attention, and upkeep. It’s definitely not one that either side is willing to mess with for no reason. But apparently, that doesn’t mean that the platform shares that kind of concern.

The short version of those changes is that, starting December 18, Patreon will be changing its service fee structure and pushing the majority of processing charges onto the person pledging money, instead of the creator receiving the money. In theory, it means more money for the creator, but it also means that the funder has to pay more upfront—so a $1 pledge suddenly becomes $1.38, for example. (The new service fee is 2.9 percent of the pledge plus 35 cents; creators get 95 percent of the pledge, with everything else going to Patreon.)

Those using Patreon weren’t too happy with the news.

The media narrative quickly became that Patreon’s changes were likely to hurt smaller, independent content creators, and it only took a brief look at social media to see how true that was.

The Takeaway: Well, surely this is all going to settle down and work in Patreon’s favor soon enough. There’s definitely no way this is going to blow up in its face or anything.

First Solar Series 6 – This Is Huge

First Solar (NASDAQ:FSLR) Series 6 – This is big

This is a synopsis of the 3+ hour investor presentation from First Solar on the new series 6 module. I have watch, listened, to hundreds of similar investor presentations thru the years, but this one was outstanding. First Solar presented a detailed, systematic, well-paced argument that the series 6 module will be the cheapest, most reliable, and most bankable solar module/system for years to come for larger scale solar projects around the globe.

CEO Mark Widmar gave the overall layout of strategy, product road-map, market demand, environmental benefits, and the 3 phases of utility scale solar. CTO Raffi Garabedian was compelling in demonstrating the clear advantage of CdTe over Si- based semiconductor material, as well as the many advantages of the design features of the series 6 module. COO Georges Antoun presented First Solar’s impressive capacity road-map, and the enormous cost reductions of series 6 versus the series 4 modules.

A quick important note about the current cost and position of the old series 4 module emerged during this investor presentation. First Solar confirmed that the current series 4 module has the lowest cost per watt verses all other solar manufactures as of today.

In the Q&A with investment firms, Mark Widmar was questioned about this, since some solar firms claim a cost per watt of 27 cents. Mark did state that these firms do not include freight and warranty (1.5 cents per W), so including this 1.5 cents, he reiterated that the series 4 has the lowest cost. So now First Solar has stated that the current series 4 module has a cost per watt of less than 29 cents. This is important since the presentation compares the cost dynamics of the new series 6 with the current series 4.

In this article, I will lay out the module and system cost dynamics, manufacturing scaling, and the comparisons between CdTe verses Si-based solar systems.

The Series 6 Module

As we can see from the above slide, the new series 6 module has a much larger footprint and wattage. The series 6 module will be 483 watts, versus the 125-watt series 4. These wattage figure include the higher kwh yield that CdTe provides.

One key to CdTe cost advantage is in the scaling of the size of the module. Si-based module are comprised of individual cells, the lower wattage modules have 60 cells, were as the larger 330/350 wattage modules have 72 individual cells. So, when Si-based solar increases the size, there is little module cost advantage since the just linearly increase the number of cells.

First Solar vacuum deposition technology coats the glass at 3 microns thick in one process, so by increasing the size, you get less waste and much lower cost per watt advantage verse Si-based modules.

The above picture demonstrates this larger size scaling advantage by looking at the variable cost differences. First Solar has only 30% variable, and the Si-based competitors have a 60% variable cost. So, when you scale production, First Solar’s cost goes down at a much faster rate.

Module costs

The above graphic shows the cost reduction roadmap for series 6 vs. the series 4. As stated earlier, the current cost was stated by First Solar at 29 cents per watt, so the series 6 module cost will be about 17.5 cents per watt. But even more import is the full system cost including the balance of systems costs.

Full system cost

The above graphics show the various BOS components, and the independent test results for the actual installation and wiring of modules to the tracking racks. The video of the time lapse comparison is eye opening. In many regions, especially the USA market, labor is a stubbornly high component of the BOS costs. The series 6 will lower the installation labor cost by 55%!

Almost every design feature of the series 6 module is aimed at reducing BOS costs:

  1. Handles in the frames for easy 2 person carry – lower labor costs.
  2. The frames interconnect so that the pallets do not need support – lower freight and shipping costs.
  3. The smaller daisy chain wiring looks ridiculously easy to connect – low labor costs.
  4. The new size format works with existing tracking and racking systems. First Solar is leveraging the supply chains R&D and innovations.

First Solar is projecting a 40+% decrease in full system cost. My calculation estimates a 45% reduction based on the lower labor costs. Earlier this year utility scale solar dropped below $1 a watt for the first time:

“According to the report, utility-scale solar systems were priced at an average of $.99 to $1.08/watt, a first in the industry.” (Source)

Also, we have seen 2017 bids for PPA’s below 2 cents per kwh: The 1.8 cents bid in Dubai was unsubsidized, so when you back into the project’s cost per watt it is well below $1. First Solar has confirmed they currently have the lowest cost, so the cost road map for First Solar shows a cost per watt of 55 cents per watt on the conservative side.

So large scale ground mounted tracking systems will cost under 1.4 cents per kwh in the sunnier locations of the USA. Areas around Moab, Utah, where I am modeling solar potential would be in this range. This is an unsubsidized number.

With a tax incentive structure like we currently have in the USA, the cost per kwh could drop below 1 penny a kwh. I know this sounds crazy, but this is the stated cost road map. This incredibly low cost is directly linked to fierce free market competition and innovation.

Commodity cost risk of Si-based solar

“A shortage of polysilicon in China has triggered a 35% price spike, as the cost per kilogram rose from $14 to $19 over the past four months, causing difficulties for solar manufacturers who have already reported a marked decline in profit.” (Source)

After reading thru many Si-based solar firms quarterly reports, this topic was clear. Surging poly demand is causing much higher prices. This is yet one more cost dynamic where First Solar has the edge.

The future of CdTe cost dynamics

As a final note on the cost trends for CdTe, the above graphic demonstrates further cost reduction potential not even included in the current cost road map.

The manufacturing capacity road map

The above 2 graphics show the new capacity road map – I was blown away! By extending series 4, and adding in 2 new series 6 factories in Vietnam, the capacity will grow to around 6 gw’s by 2020. From a cost perspective this is a great use for the Vietnam assets that First Solar already owns. One factory has already been built, and they have the land for two more duplicate factories on that property.

Another eye opener was the large reduction in capex required to scale. Less than 50% of the capex required vs. the series 4, which is already the lowest in the industry. This gives First Solar a huge advantage compared to the other Si-based firms when it come to growing production, which of course creates the lowest cost structure in the industry.

This above graphic also points to another big advantage that First Solar has over its competitors when it comes to scaling production. First Solar will scale up above 6 GWs from existing cash flows, and also they have a $2 billion net cash position.

How will Canadian solar and Jinko (NYSE:JKS) solar scale? With more debt, and higher and higher debt service expenses. With interest rates rising around the globe, this will be another advantage for First Solar on the cost side.

First Solar‘s market demand

In this article, we have focused on the cost and technical advantages First Solar has over Si-based solar firms. First Solar has been mainly in the utility scale solar space. Now they have also stated that the commercial and industrial (C&I) space will be another market for them. I will break down these two markets.

During the investor presentation, First Solar did a great job showing the evolution is utility solar:

Solar 1.0

We are currently still in solar 1.0, that is driven by renewable portfolio standards in individual states, and the power purchase agreements that are focused on the kwh’s produced.

Solar 2.0 is coming up fast in California due to the duck curve issue during the spring. As more and more solar is connected to the grid, utilities will have a harder time with balancing.

Solar 2.0

This above study by CAISO is very important. It shows that larger scale solar arrays, with existing inverter technology can also benefit to grid, and help utilizes manage the grid. First is the fact that with solar you can have instantaneous curtailment – you just stop converting the DC to AC. This can be done to entire arrays, or smaller sub-sets as needed to help with load following.

In fact, the study shows solar can ramp and load follow better than the best natural gas peaking plants. Also of note – solar is better at frequency and voltage control. This new dynamic will allow utility scale solar projects to also get paid for this. This will drive utility scale solar into new markets over the next decade.

Solar 3.0

Fully dispatchable utility scale solar – the holy grail! This is not the present, but maybe the near-term future. First Solar CTO did answer questions on the topic of utility scale storage, and he has the same view I have – we are not there yet. Li-Ion storage will work for residential and commercial solar projects, but may not be able to scale to utility scale storage.

The CTO stated he and his R&D team are looking for new technologies beyond Li-ion, and when it makes financial sense, First Solar will invest. I am a bit more optimistic about large scale Li-ion, as we still have not seen the cost reductions from scale yet. If we can get below $25 per kwh, then solar 3.0 may come to fruition.

Commercial and Industrial demand

As a corporate buyer, the above factors are big. These large firms like Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Wal-Mart (NYSE:WMT) need to know these are cost effective, turnkey, warrant-able (backed by a strong balance sheet) projects. But now when I talk with companies looking at solar to help them with their sustainability programs, another factor is your manufacturing pollution footprint.

First Solar has this environmental advantage over the Si-based solar firms. CdTe technology uses far less energy and water to produce than Si-based. This huge energy demand to produce polysilicon, forces these firms to areas in China were power is cheap – mainly coal based electricity.

60 GW’s from just these firms, and we are just staring to develop this largely untapped market.

Global markets

First Solar is a global firm and wants to grow internationally as well as in the USA. I have been impressed that First Solar has not chased international revenue at the cost of profits. That’s why First Solar has a small footprint in China. Here are the markets First Solar gave as a focus during the presentation:

Bookings and gross market trends

Earnings guidance 2018 – 2020

My 2017 – 2020 projected earnings per share

Based on 2017/2018 numbers, and projected capacity and gross margins I have put together some very rough estimates:

2017=$2.45 EPS – First Solar’s number

2018=$1.5 EPS – First Solar’s number

2019=$5.5 EPS – my estimate

2020=$7 EPS – my estimate

Using the capital asset pricing model for valuation in a low interest rate environment, one needs to look at least the next 10 years of earnings and cash flows. Beyond 2020 no one knows, but First Solar has the advantage in every conceivable category for large scale solar IMHO.

Disclosure: I am/we are long FSLR.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Staffordshire University goes all-in on Microsoft Azure for digital transformation

Staffordshire University is in the midst of a major, multi-year digital transformation, geared towards positioning the organisation as a technology leader in UK education.

This process has already seen the higher education provider declare itself the first university in Europe to go “all-in” on the Microsoft Azure public cloud, and move to adopt the software giant’s online productivity suite, Office 365.

The migration was completed over 12 months, from spring 2016, during which time the university decommissioned the two datacentres that were previously used to host all its infrastructure and applications.

Andrew Proctor, the university’s director of digital services, describes the 12-month delivery timeline allocated for the move as “aggressive”, and the project itself was not without its challenges.

“We had to work with a variety of suppliers to move their applications into the cloud environment, which was sometimes a new experience for the supplier as well,” he says.

“Some of the applications were ones you’ll find in any number of organisations, but the trickier ones were those that were a bit more specific to education. And because we were the first university to do this, some of the suppliers had to learn with us.

“They weren’t ready to deploy their solutions in a cloud environment and we had to do a lot of work with them to make that happen.”

The university’s existing datacentres had become unfit for purpose and would have required “significant investment” to bring them back up to standard, says Proctor – but that would have tied up capital that could have been put to better use elsewhere.

“We want to embed digital into everything the university is about”

Andrew Proctor, Staffordshire University

“We’ve got a highly ambitious digital transformation agenda here in Staffordshire and we saw being fully based in the cloud as a key enabler so that we are much more flexible and responsive,” he says.

“Also, one of key visions for the internal IT function here is that I don’t want them spending 80% of their time managing infrastructure. I want to free them up to focus on transformation and add value to the university.”

This is important because the organisation’s digital transformation ambitions go far beyond simply lifting and shifting its IT requirements to the cloud, and extend to ensuring technology plays a central role in every aspect of its students’ lives, says Proctor.

“Digital technologies are so pervasive now in day-to-day life, and we want to embed digital into everything the university is about,” he says.

“We aspire to be the leading digital university across the UK, so this [cloud migration] was a really good way for us to demonstrate how we are going to realise that ambition.”

Putting digital front and centre

In its quest to become the UK’s leading digital university, Staffordshire has worked hard to ensure its technology aims and objectives are woven into every aspect of its overall business strategy and plan.

“We don’t have a separate digital strategy because once you make it something separate, you are kind of missing the point,” says Proctor.

“So digital runs through all our corporate strategies, visions and all the things we do because we want to place digital at our very core, to the extent that when people are graduating from stuff at university, they are equipped for the digital age.”

The university’s workforce is also being encouraged to adopt a more startup-like mindset, with experimentation rewarded and failures treated as learning opportunities, says Proctor.

“One of the key indicators of a digital culture is the ability to experiment quickly to try things out on the understanding that some of these things may fail,” he adds.

“That’s a lot easier to do when you have fully migrated to the cloud because [in order to experiment] we don’t have to go out to procurement to get the hardware we need, which introduces loads of delays.

“If someone comes to us with an idea, we can move very fast and get them set up in hours,” says Proctor.

Reinforcing its reputation

The university is also keen to use its digital transformation to build on its burgeoning reputation as a purveyor of software engineering, games design and e-sports-related courses – and central to that is its commitment to improving the digital learning experiences of its students.

“We see things like games design as specialist, but even if you’re here on a business leadership course, you should leave here with digital skills because they are so important,” says Proctor.

“We do digital specialisms, with games design and software engineering, and more traditional courses, but the difference is we embed digital into those things.”

For example, Proctor says the university is evaluating how Microsoft’s mixed-reality headset technology, HoloLens, could be used to bring aspects of the curriculum for some of its courses to life.

“You don’t suddenly develop digital skills by going on a one-day course or visiting a website – it’s through the confident and pervasive use of digital technology,” he says.

Some of the technologies Staffordshire has already adopted, such as Office 365, are also helping the organisation work towards its goals of embracing the 24-hour university concept, whereby students can access support and education resources out of hours from any location.

However, Proctor says the university’s digital agenda is intended to complement and enhance the work that takes place on the campus, and ensure students make the most of their time there.

“There are things that can happen on campus that you can’t do online, but we want to ensure people are coming to our campus because they want to, not because they feel they have to,” he says.

Data analytics

Looking ahead, the university is investigating the role analytics could play in helping pinpoint students who might be at heightened risk of dropping out, so pre-emptive support and advice can be offered.

“Whether it’s just a conversation or some additional support [they need], just trying to make sure they aren’t dropping out without understanding what their options are and what support could be made available to them, is an immediate use case for analytics,” says Proctor.

There is also scope for using this technology to ensure the course content offered to students remains engaging, but is also tailored to their preferred learning style.

“We want to get to the point where some courses are almost self-optimising,” says Proctor. “They can identify the types of learning and teaching activities that are effective for different types of people and configure courses around people’s personal needs.”

That particular use case is “five to 10 years away” from being realised, he says, but highlights areas of innovation that the university might move into further down the line, now the groundwork for its digital transformation is complete.

And given the benefits both staff and students seem to be reaping from the work Proctor and his 70-strong IT team have done so far, it is hardly surprising that the university is already looking for ways to capitalise on its cloud move.

“The key benefit for staff and students is the significant improvements we have seen around the availability of applications and services,” he says. “We are in a much better position in that respect, and our ability to meet demand has improved as well.”

As an example of this, Proctor cites improvements in the way the university’s infrastructure now deals with surges in application use during peak periods, such as the annual A-level results day in August.

“We know that is a very important time for the university in terms of attracting students, and it is also a peak demand for certain applications that we use,” he says.

“Previously, we have either had to upgrade a server to make sure it has more memory, and kind of hope it will stand up to the demand. Now, a few hours beforehand, we can just dial up the amount of compute resource assigned to those applications very quickly, and are able to meet demand much more effectively and be a lot more agile and flexible.”

Why The World Needs More Bullsh*t Artists

The man with the close-cropped hair and camouflage pants who greeted me at the door of Sarabeth’s in New York City was a far cry from the shaggy-headed mod whose image I knew from countless rock biographies. Yet from the moment he opened his mouth, there was no doubt I was in the presence of Andrew Loog Oldham, the master hype artist who talked his way into handling publicity for the Beatles and then went on to create the bad-boy image of The Rolling Stones.

As a fan and student of both business and rock ‘n’ roll, I was bursting with questions for this legendary promoter and pop culture propagandist. As the owner of my own marketing agency, I am always looking to reverse engineer the secrets of the greats. And Oldham fits firmly into this category.

Like all elite marketers, Oldham naturally fell into storytelling as his main medium of communication. He regaled me throughout the course of our interview with firsthand accounts of Swinging London, including the period he spent as Mick and Keith’s roomie. But as much as I enjoyed these tales, my favorite story was one that had nothing to do with rock music at all.  

That’s because it holds the key to success in every area of entrepreneurship. 

Surfaces Are Everything

Oldham had just finished describing how he got the Stones featured in a major newspaper before anyone knew who they were, when I interrupted him.

“How did you do it?” I asked, “You were only nineteen years old.”

He thought for a moment, as if even he wasn’t sure himself.

And then he began.

“One time Aristotle Onassis (the shipping magnate and husband of Jackie O.) was asked by a reporter what his secret to success was,” Oldham recounted, “Onassis looked at him and said, ‘All you need in life is a suntan, a nice suit, and a good address. And for the last one, it doesn’t matter if it’s in the attic or the basement.'”

It was a model that Oldham followed. For example, when he first got into the publicity business, he barely had enough money for a place to live, let alone an office. However any time he would receive a call, he would pick up the phone and proclaim with utter confidence, “Oldham House.”

From the very beginning, Oldham’s instincts told him to present himself not as he currently was but as the institution he would become.

Become a Bullsh*t Artist

Early in most entrepreneurs’ careers, they don’t really have much of anything. No money. No contacts. Often, no actual products. As such, the best of them create a surface level impression of success and competence and then make the reality fit the projection.

But as entrepreneurs begin to experience real success, they often forget what got them there. That’s when they get themselves into trouble.

The best entrepreneurs, on the other hand, continue to project themselves as being bigger than they are, no matter how big that is. If she owns a million dollar company, she talks about billions. If he already pioneered electric cars, he becomes the guy on the verge of colonizing Mars.

Andrew Loog Oldham said, “I have often been accused of being a bullsh*t artist. However, to my mind, a prophecy of success is always the first step in making it a reality.”

It seems that as entrepreneurs, a little more bullsh*t might not be such a bad thing.

A Navy SEAL's 12 Travel Tips All Parents Needs to Survive This Holiday Season

My wife and I took our three children to Dallas for Thanksgiving this year which inspired this article. As American Airlines Advantage members – I travel every week for speaking engagements – somehow one of our seats ended up being in first class – my wife’s ironically. She was the one who booked the reservations. Hmmm. Nice try!

The rest of the seats were in a row towards the back of the plane with the rest of the families with babies and toddlers. So we took five seats in the back and waited for the lucky sole who would unknowingly be offered the golden ticket to first class.

As fate would have it, he was a young man literally on his way to U.S. Army boot camp! What a killer way to begin your military career! He was so shocked he almost said no, but we insisted.

“It’s either first class or you get to deal with whiny toddlers and screaming babies,” I reminded him.

He quickly gathered his things and raced for the front of the plane.

The remainder of the trip inspired me to share this invaluable tool kit that all parents need to survive and thrive this holiday season.

  1. Prepare Accordingly: In the SEAL Teams, preparation is everything. The best laid plans come into conflict which is why preparedness is more important than planning. As we say during combat dive training, “Plan your dive and dive your plan.” But be ready to adjust when the environment and data mandate it. Don’t leave things to the last minute – which means you should have made your plans months ago
  2. Avoid Traveling on the Worst Days: Why do most families actually choose the busiest days during the holidays or make the three hour drive to Aunt Kathy’s house or fly out of already busy airports?! Leave early to get there and leave even earlier to come back.
  3. Pack the Right Gear: Another one of our mantras in the SEAL Teams is take care of your gear and your gear will take care of you. Especially when it comes to sippy cups, iPads loaded with kid movies, baby wipes, snacks, toys they can (and will) fight over and valium (for Mom and Dad!).
  4. Get the “Lap Child” a Freaking Seat: I don’t know what we were thinking! For the three hour flight from San Diego to Dallas, we opted not to get Ryder (our strong, energetic, bruiser of a 21-month-old son) a seat. For three hours, he raised and lowered the window shade, raised and lowered the tray table, played pica boo with the people behind us and knocked over my cocktail twice (devastating because the flight attendants aren’t waiting on you hand and foot in the back of the plane). Suck it up and get the toddler a seat!
  5. Avoid Family Drama: I’m from Texas so we engage in the passive aggressive avoidance of talking about anything of any real deep meaning – that’s how we roll in the south! Whereas my wife’s family violently executes when it comes to family drama. They put things on the table, involve as many people as possible and then move on. My family prefers to let unresolved issues built over years and years. Whichever you prefer, try to avoid tears, shouting and storming away from the table this year.
  6. Self-Medicate: I know, I know. Some might consider this bad advice. But it is crucial for survival. A moderate amount of wine or alcohol will ease the pain. Just don’t over-do it because others will judge you and you might launch yourself from drama-avoidance into drama-instigation.
  7. Be Present: I don’t remember how many times my wife told me to “be present” while we were touring the 12 Days of Christmas display at the Dallas Arboretum. We are all busy. Make time to be a spouse and more importantly make time to be a parent. Make memories!
  8. Try Not to Break the Kids’ Routines: If you have young kids that still take naps, make them take the naps! Everyone will be miserable if you don’t!
  9. Offer to Take Another Family’s Picture: It’s the right thing to do and of course then you get to ask them to take one of you without feeling like you’re imposing. But don’t do it for every family you walk by or you’ll never get anywhere!
  10. Overestimate Time for Troop Mobilization: In my experience, it always takes twice as long to get the troops mobilized to go somewhere than you plan for. When my three-year-old daughter decides she wants to change her outfit several times or our 21-month-old demands to put his own shoes on (which of course he has no idea how to do), you will be late to wherever you are going!
  11. Leave Extra Room in Your Bags: I always used to carry an extra empty backpack on combat missions so we could take valuable intel off target. During holiday travel, chances are you’re going to be coming home with more than you left with – especially melt-down-avoidance last minute toys at the airport…yes, I give in that easily. Some tough SEAL I am.
  12. Leave Yourself A Day or Two to Decompress: I hate coming home on a Sunday when I have work the next day. Not to mention it’s usually the busiest travel day. Give yourself a day or two to decompress and recalibrate before its “back to reality.”

These are just a few tips to get you started. So go forth onto your holiday battlefield – good luck!

Saudi Prince Plans a 'City of the Future.' Don't Bet on It

From time immemorial, rulers have built new cities to satisfy everything from security to vanity. Some of those cities crumbled into obsolescence; others blossomed into capitals of legend. The recipe for success remains elusive, but that hasn’t stopped successive generations from trying. And if recent moves are any gauge, the 21st century will see a surge of new and often grandiose plans.

The most recent and among the highest profile comes from the deserts of the Middle East, where Saudi Arabia’s crown prince Mohammed bin Salman recently unveiled plans to spend upwards of $500 billion to construct his city of the future, Neom. Like rulers before him, bin Salman’s motives are a mix of vanity and pragmatism. Since the middle of the last century, Saudi Arabia has floated on a sea of oil, and the royal family has accumulated massive wealth. That formula worked for decades, but with a burgeoning population and the price of oil plateauing, the country is facing an uncertain future. Neighboring Dubai and other emirates have surged ahead with their own imagined metropolises, spending hundreds of billions for new towers, museums, reclaimed land, and planned communities. Many of those have drawn people, attention and business, although Masdar, a planned satellite of Abu Dhabi that was supposed to be an exemplar of a carbon-neutral future, has burned through billions with little to show.

The plan for Neom is to be bigger, newer, and more technologically advanced than anything that has come before. Early promises include a pledge to use renewable energy and integrate robotics into the DNA of the city. Promising a “civilizational leap for humanity,” bin Salman has suggested that the final city could have more robots than humans and be a model for how humanity lives in the next century when population begins to decline globally.

Rock outcrops stand in the desert near the bay at Ras Hameed, Saudi Arabia. It is here that Saudi Arabias crown prince plans Neom, a city from scratch that will be bigger than Dubai and have more robots than humans.

Glen Carey/Bloomberg/Getty Images

Given that Neom is now little more than barren acreage and the fertile imagination of the crown price backed by oil billions, it’s hard to say how much of this vision will be realized. New cities are always unveiled with an excess of hyperbole and a dearth of practicality. In that sense, they are much like startups, brimming with hope and an optimism, intent on changing the world and solving problems ranging from overpopulation to transportation to air quality and affordability.

The legacy of planned cities in recent years is mixed at best. Some were built as new capitals for governments that wanted to reduce corruption and improve bureaucratic efficiency or wanted to break the hold of traditional elites by detaching them from carefully cultivated power bases. That is hardly a new concept. Louis XIV moved his court to the palace of Versailles for many of those reasons.

In light of the mixed legacy of planned cities, taking the rhetoric down a notch might be wise; in fact, a dose of humility might make these ventures more realistic and more likely to succeed. But pragmatism and modesty rarely galvanize, excite, or motivate. Invented cities are like urban startups, full of utopian optimism, ego, and often arrogance. That is often what makes it possible to build something grand from nothing, and it is often why these cities are so unrealistic and prone to less-than-optimal results.

Take the moves by the military junta in Myanmar to move the capital from Rangoon (Yangon) 180 miles north to Naypyidaw in 2005. As urban planning, its success is questionable. To avoid public demonstrations that might imperil the regime, the city was designed with no public squares of any size. The new capital is vast—six times the size of New York City. It is in the middle of nowhere, and visitors describe a nearly empty feeling, with few signs of life on its many-laned highways and streets, not to mention its plethora of golf courses. If the goal was to get an easy tee time, the city is a success; if it was to preserve the power of the military regime, that clearly failed. The military retains substantial power, but it was forced to cede some control to the elected government of Nobel laureate Aung San Suu Kyi in 2015

Or take Astana, the invented-out-of-whole-cloth capital of Kazakhstan, which was constructed starting in 1997. Funded entirely by the former Soviet republic’s oil money and the vision—or ego—of its ruler Nursultan Nazarbayev, Astana rises in the middle of the Asian steppe, with massive glass-clad towers, arenas and parks. After a decade of near emptiness, Astana is filling out and now has a population approaching a million. It has been a boon for architectural creativity, but its effects of the Kazakh economy are less clear, aside from the expected boost to GDP from the constant construction.

Brasilia, the capital of Brazil, was constructed in the late 1950s. It was meant to showcase Brazil’s emergence as a modern country, leading the way for the southern hemisphere. Meticulously planned by the architect Oscar Niemeyer, it won accolades from designers and urban planners with its sweeping boulevards and layout designed to accommodate a car culture and the needs of a modern bureaucratic state. Much like Washington, DC (another invented city), Brasilia was a geographic compromise that for many years pleased no one. But the population has grown, perhaps too much, and the city has settled into itself, not loved but no longer loathed. Brazil, however, has struggled with decades of corruption and erratic economic progress. Brasilia was meant to end those struggles; it did not.

Some invented metropolises are more clearly products of vanity and megalomania. The late-not-so-great Felix Houphouet-Boigny may have been the first leader of the newly independent Ivory Coast in 1959, but he clung to power and in his waning years, moved the capital from Abidjan to Yamoussoukro, the village where he was born. He then spent $200 million in the late 1980s to begin construction of a basilica that copied the design of Bernini’s Vatican, only bigger, in a country with a Muslim majority and an annual per-capita income of less than $1,000. Needless to say, Ivory Coast over the past two decades since his death has seen neither grandeur, peace, nor much in the way of prosperity.

Others start with grand dreams and end with more proletarian realities. South Korea’s Songdo, begun in 2000, has cost $35 billion and counting and was conceived as a model for future cities, with wide lanes, a mix of commercial and residential development, and a robust transportation network. Filled with parks, bike lanes, and business hubs, Songdo has been attractive mostly to middle-class Koreans who either can’t afford or dislike Seoul. That isn’t a bad thing, but it is has yet to embody its status of “city of the future,” which was its initial purpose.

More modest in scale but equally grand in vision is the partnership between Alphabet’s Sidewalk Labs and the city of Toronto to redevelop 12 acres as an incubus of a new modernism. If anyone might succeed in reinventing an urban space, it’s Alphabet and the Canadians, who have quietly morphed into the apostles of good government and innovation as the US recedes into its Washington soap opera. It bears watching, but the rocky history of previous ventures bears remembering.

For every St. Petersburg (also an invented city, in the early 18th century when Peter the Great built his own city far removed from Moscow), and Washington, DC (which was underpopulated and widely disliked well into the late 19th century), there is a Yamoussoukro or a Naypyidaw.

Traipsing through these thumbnails of cities past, what can we say about whether the half-a-trillion Neom will fulfill its grandiose promise and dreams? If the past is prologue, probably not. But perhaps that shouldn’t matter so much. It may live up to only a portion of its promise, but if it galvanizes creativity and innovation, if it provides a more hopeful model for the future of the Middle East, away from oil and religious conflict and towards urban solutions infused with the best of technology, then it won’t matter if it fulfills all of its dreams. It will matter if it nudges society in the direction of real progress rather than toward the nihilism of revolution and the sclerosis of a royal family draining resources rather than creating them. Some humbleness is certainly in order, as well as a sober eye to how past projects have gone, but it will be better for all of us if Neom only partly succeeds than if it never happens at all.

High tech, high finance and high times for U.S. pot industry

(Reuters) – Two years ago, Alan Gertner was head of Google’s Asia-Pacific sales team in Singapore, handling more than $100 million in business.

Pipes are displayed for sale in the cannabis themed cafe chain Tokyo Smoke in Toronto, Ontario, Canada November 29, 2017. Picture taken November 29, 2017. REUTERS/Chris Helgren

Now, he begins his day in a small Toronto office, building a cannabis brand that sells fancy smoking accessories such as vaporizers and bongs that cost up to $335 CAD ($261.72 USD).

Gertner is among a growing group of entrepreneurs and investors who are trading in high-paid corporate jobs in the technology and finance sectors to launch start-ups focused on the fast-growing marijuana industry.

Two decades after the first legalization of medical marijuana by a U.S. state, pot-based businesses are professionalizing their operations by luring top talent from other industries and billions of dollars in investments from Wall Street firms. A new commodity index even offers data on the going rates for greenhouse and field-grown weed.

Gertner still gets surprised reactions to his career change, as when his mother asked: “Can’t you just get another job at Google?”

And yet he’s raised $10 million in capital in ten months as the chief executive of Toyko Smoke, despite the continuing taboos and legal risks in the industry.

The legal cannabis market, currently worth about $8 billion, is predicted to triple in size to $22.6 billion in total annual sales by 2021, according to cannabis industry tracker, Arcview Market Research. That could make it bigger than the America’s most profitable sports organization, the National Football League, which saw about $13 billion in revenue last year and aims to reach $25 billion by 2027.

So far in 2017, there have been at least 27 investments by venture capital funds in cannabis companies, compared with just 10 deals in 2016 and 9 deals in 2015, according to venture capital data provider CB Insights.

The influx of capital helps finance the paychecks of 150,000 workers in the legal U.S. pot industry, representing job growth of 20 percent from a year ago, according to an estimate from the cannabis website Leafly, a marketing firm for dispensaries and other cannabis firms.

Eric Eslao, founder of Defonce Chocolatier – which makes artisanal cannabis-infused chocolates costing $20 a bar – was a senior production manager at Apple just over a year ago. He feared the stigma of joining the weed industry, but it didn’t stop him.

“The opportunity was too good not to make the jump,” he said.


Thirty states have legalized marijuana for recreational or medical use, but possession and sale is still banned at the federal level.

(For a map detailing marijuana laws in U.S. states, see:

The administration of President Donald Trump has sent mixed signals on its enforcement policy. Attorney General Jeff Sessions has vowed to crack down on the pot trade in states with legalization laws, but Trump has extended a ban on using federal funds to interfere with the industry through the end of this year.

Americans increasingly support marijuana legalization, according to the Reuters/Ipsos opinion poll. The number of adults who believe it “should be legal” to possess small amounts of marijuana rose to 54 percent in a poll conducted between Oct. 27 and Nov. 10, up from 41 percent in a similar poll in 2012.

Still, the specter of federal enforcement makes it difficult for cannabis-related firms to get banking services. Many continue to deal in cash or pay hefty fees for accounts.

The banks that work with cannabis-related firms are mostly community institutions in states where the industry is legalized, and their service is limited to accepting cash deposits.

A woman holds a clutch used for storing marijuana which is for sale in the cannabis themed cafe chain Tokyo Smoke in Toronto, Ontario, Canada November 29, 2017. Picture taken November 29, 2017. REUTERS/Chris Helgren

Cannabis investment is still dominated by wealthy individuals, but that is changing as the industry grows, attracting venture capitalist and equity investors who until recently were reluctant to finance cannabis firms.

They are drawn by a wide-open landscape of opportunity, said Eric Hippeau, managing partner at Lerer Hippeau Ventures, a New York-based venture capital firm well-known for its investments in high-profile media startups such as Twitter Inc and Buzzfeed.

“It’s an industry that is starting from scratch with no infrastructure,” Hippeau said. “There are many promising cannabis-related software startups that are able to easily raise money.”

Some of these startups provide seed-to-sale cannabis tracking system software and inventory management. Hippeau Ventures earlier this year joined a $3 million funding round for LeafLink, a business-to-business platform that provides a market for dispensary owners to buy inventory.

Other prominent venture firms that have warmed to cannabis include Founders Fund, started by PayPal co-founder Peter Thiel, which has invested in Privateer Holdings, a cannabis private equity firm. Prominent Silicon Valley venture capitalists 500 Startups, DCM Ventures, along with New York-based Great Oaks Venture Capital, have all backed Eaze, a medical marijuana delivery app that allows patients to order cannabis on demand.

“The stigma is slowly going away, and you are seeing some real talent, in terms of technology entrepreneurs and quality engineers,” said Kyle Lui, a principal at DCM Ventures.

Slideshow (7 Images)

Investors who have taken the initial plunge into the quasi-legal marketplace seem eager to take on more exposure, said Jim Patterson, CEO of Eaze, a three-year old company has raised $51.5 million in five rounds from more than a dozen investors.

Such firms believe its “a good time to double down,” Patterson said.


Some investors have steered toward technology and support services, which carry less legal risk than cultivating or selling the weed itself.

These include dating apps for cannabis users such as High There and My420Mate, as well as WeGrow, an educational app that teaches people how to grow cannabis. HelloMD is an online platform connecting doctors and cannabis patients.

Among the signs the market is maturing is the development of information services that collect data on trading of cannabis and publish guideline prices. Similar services are common across commodity markets – from oil and gas to corn and cotton – and are used by industry participants as price benchmarks.

New Leaf Data Services LLC, a Stamford, Connecticut-based start-up, published its first assessment of U.S. cannabis prices about two years ago. Newleaf compiles information gathered from cultivators and dispensaries, transaction data from market participants and data from vendors and associations.

Investors can also follow the value of marijuana firms through stock market indexes such as the Horizons Marijuana Life Sciences Index ETF, which tracks the performance of a selection of publicly listed cannabis companies in North America.

The value of the index is up about 70 percent over the last three months, thanks to star performers such as Canopy Growth Corp, a producer and retailer of medical cannabis products – up 112 percent for the year – and Aphria Inc, a cannabis producer, up 132 percent this year. “The cannabis business is really about risk arbitrage. There are chances of a higher return because the risk is high,” Patterson said. “Investors get that.”

The long-term risk may be lower, however, as a growing number of Americans express support for marijuana legalization and the industry creates jobs and tax revenues.

U.S. residents also seem increasingly aware of the futility in preventing illegal marijuana use, said Ian Laird, a lawyer and co-founder of New Leaf.

“The evolution or rollback of prohibition is inevitable,” he said. “It’s not like it stopped anyone from getting it.”

Additional reporting by Chris Kahn and Saqib Iqbal Ahmed; Editing by Simon Webb and Brian Thevenot

Our Standards:The Thomson Reuters Trust Principles.

How to Keep Your Kids Safe Online

Let’s face it: the internet can be a nasty place. Between predators, malware, explicit content, and other bad actors, parents can find themselves in a never ending cycle of doom and gloom as they try to fend off every threat their kids might face online.

It’s a tricky situation without a perfect solution, and it can be tough to know where to start. There are parental blocks, antivirus software, kid friendly browsers, and the temptation to avoid the stress and ban the internet altogether. But Dave Lewis, a global security advocate at Akamai Technologies, says the most important thing actually has nothing to do with technology: it’s all about having an open conversation with your kids.

The framing of that conversation is key, Lewis says. When you’re talking with your children about the dangers of the internet, you should be engaging and non-confrontational. “Kids really are information sponges, so if you package it in a way that makes them feel like they’re learning something, you’ll get a better return on that investment,” he says.

Instead of throwing down all of the scary things that can happen once they log on, Lewis suggests parents act as positive guardians, putting the right tools in place to keep their kids safe while also teaching them how to do it themselves. That means being aware of where your children should be going at their age, which he says is important as kids become tech savvy earlier. “There’s no reason for a kid around seven to have a Facebook or Twitter account,” he says, “They don’t need that level of exposure to the world, they still need a chance to be kids.” (It’s also against Facebook’s Terms of Service.)

Kids also need to be aware of the dangers of responding to messages from strangers, and Lewis suggests parents ensure kids feel safe coming to their parents with concerns about those things, so they feel comfortable letting an authority navigate that situation in a safer manner. This is going to be even more important as more companies make products specifically for kids, like Facebook’s trying to do with its new Messenger Kids.

Once that part’s covered, there are some specific tools Lewis suggests parents take advantage of before handing the reins to their kiddos. First comes setting up parental controls and filters: You can use software like Net Nanny and Qustodio to block out the web’s nastiest sites, as well as control how much screen time the kiddos get each day. If you’re really concerned about what your kids are doing on the internet, you can even block certain domains at the router level. And if you’re not ready to spend some dough on more heavy software, iOS and Android both offer parental controls to keep kids safe on the go.

Basic security tools are important, too. Lewis suggests installing a firewall and antivirus software on computers, as well as ensuring that you’re up to date on software patches. The safer your computer is, the safer your kids will be. He also says keeping your computer in an open space can help ensure that your kids aren’t heading anywhere they shouldn’t be, and that you’re available for any questions they might have.

You can also turn on some cautionary settings in individual apps. In Snapchat, for example, you can set “Who Can Contact Me” to “My Friends” to block out strangers. In Facebook, lock down their account to control who can see their profile and all of their posts. On Instagram, turn on “Private Account” to keep prying eyes from seeing what your kids are up to.

Can parental controls protect your kids completely? Absolutely not. The nastiness of the internet will always try to find its way onto your kid’s screens. But if you follow Lewis’s advice, hopefully you’ll get a little closer to parental zen.

Facebook for 6-Year-Olds? Welcome to Messenger Kids

Facebook says it built Messenger Kids, a new version of its popular communications app with parental controls, to help safeguard pre-teens who may be using unauthorized and unsupervised social-media accounts. Critics think Facebook is targeting children as young as 6 to hook them on its services.

Facebook’s goal is to “push down the age” of when it’s acceptable for kids to be on social media, says Josh Golin, executive director of Campaign for a Commercial Free Childhood. Golin says 11-to-12-year-olds who already have a Facebook account, probably because they lied about their age, might find the animated emojis and GIFs of Messenger Kids “too babyish,” and are unlikely to convert to the new app.

Facebook launched Messenger Kids for 6-to-12-year olds in the US Monday, saying it took extraordinary care and precautions. The company said its 100-person team building apps for teens and kids consulted with parent groups, advocates, and childhood-development experts during the 18-month development process and the app reflects their concerns. Parents download Messenger Kids on their child’s account, after verifying their identity by logging into Facebook. Since kids cannot be found in search, parents must initiate and respond to friend requests.

Facebook says Messenger Kids will not display ads, nor collect data on kids for advertising purposes. Kids’ accounts will not automatically be rolled into Facebook accounts once they turn 13.

Nonetheless, advocates focused on marketing to children expressed concerns. The company will collect the content of children’s messages, photos they send, what features they use on the app, and information about the device they use. Facebook says it will use this information to improve the app and will share the information “within the family of companies that are part of Facebook,” and outside companies that provide customer support, analysis, and technical infrastructure.

“It’s all that squishy language that we normally see in privacy policies,” says Golin. “It seems to give Facebook a lot of wiggle room to share this information.” He says Facebook should be clearer about the outsiders with which it may share data.

In response to questions from WIRED, a spokesperson for Facebook said: “It’s important to remember that Messenger Kids does not have ads and we don’t use the data for advertising. This provision about sharing information with vendors from the privacy policy is for things like providing infrastructure to deliver messages.”

Kristen Strader, campaign coordinator for the nonprofit group Public Citizen, says Facebook has proven it cannot be trusted with youth data in the past, pointing to a leaked Facebook report from May that promised advertisers the ability to track teen emotions, such as insecurity, in real-time. “Their response was just that they will not do similar experiments in the future,” says Strader. At the time, advocacy groups asked for a copy of the report, but Facebook declined.

Tech companies have made a much more aggressive push into targeting younger users, a strategy that began in earnest in 2015 when Google launched YouTube Kids, which includes advertising. Parents create an account for their child through Google’s Family Link, a product to help parents monitor screentime. FamilyLink is also used for parents who want to start an account for their kid on Google Home, which gets matched to their child’s voice.

“There is no way a company can really close its doors to kids anymore,” says Jeffrey Chester, executive director for the Center of Digital Democracy. “By openly commercializing young children’s digital media use, Google has lowered the bar,” he says, pointing to what toy company Mattel described as “an eight-figure deal” that it signed with YouTube in August.

Chester says services such as YouTube Kids and Messenger Kids are designed to capture the attention, and affinity, of the youngest users. “If they are weaned on Google and Facebook, you have socialized them to use your service when they become an adult,” he says. “On the one hand it’s diabolical and on the other hand it’s how corporations work.”

In past years, tech companies avoided targeting younger users because of the Children’s Online Privacy Protection ACT (COPPA), a law that requires parental permission in order to collect data on children under 13. But, “the weakness of COPPA is that you can do a lot of things if you get parental permission,” says Golin. In the past six months, new apps have launched marketed as parent helpers. “What they’re saying is this is great way for parents to have control, what they are getting is parental permission,” says Golin.

Several children-focused nonprofit groups endorsed Facebook’s approach, including ConnectSafely and Family Online Safety Institute (FOSI). Both groups have received funding from Facebook.

A Facebook spokesperson says, “We have long-standing relationships with some of these groups and we’ve been transparent about those relationships.” The spokesperson says many backers of Facebook’s approach, including Kristelle Lavallee of the Center on Media and Child Health, and Dr. Kevin Clark of George Mason University’s Center for Digital Media Innovation and Diversity, do not receive support from Facebook.