Adam Lashinsky is on assignment. Verne Kopytoff is a senior editor at Fortune.
Silicon Valley has a leak. A steady drip of layoffs and failed startups over the past year is a sort of mini reckoning for the technology industry after years of flush times.
Or maybe, like a leaky faucet, it’s nothing to be alarmed about. After all, it’s merely a drip.
The latest Silicon Valley company to circle the drain is Shuddle, a typically oddly named startup that ferried children to school, play dates, and soccer practice. Some referred to the two-year-old company, which raised $12.2 million from investors, as an Uber for kids.
Shuddle, which announced its closing on Thursday, was part of a once-hot niche of so-called on-demand startups that cater to customers who don’t want to bother with fetching their own meals, taking buses, or parking their own cars. Such labor-intensive businesses have turned out to be particularly leaky, or rather, prone to failure.
Last year, fellow on-demand company Homejoy, a home cleaning service, shuttered, as did Zirtual, which provided personal online assistants. This year also has seen the demise of food delivery service SpoonRocket and valet parking startups Vatler and Carbon.
But the on-demand economy, for all its shortcomings and wishful thinking by the investors who funded it, was also the spawning ground for some of the tech industry’s biggest successes of the past decade. Uber, the taxi alternative, has gained so much traction that it was most recently valued at $62 billion, while home rental company Airbnb achieved a valuation of $25.5 billion. Both dwarf the losses of all the on-demand economy small fries that have gone out of business or laid off staff.
Are there failures in Silicon Valley? Sure. There always have been and always will be. Startups are a risky business. And a return to normalcy, i.e., actually trying to make money, is probably for the best considering the past few years of me-too companies and free employee massages.
But amid the return to normalcy, and therefore the occasional messy flameouts, there are signs of promise. When I read about yet more tech industry layoffs, as I did Thursday about two Seattle startups, Qumulo and Chef, I remind myself of the companies like Google, Facebook, and Snapchat that are hiring like crazy and try to put the job losses in perspective.
Leaky faucets are annoying. On the other hand, leaks are far preferable to having no water at all.
BITS AND BYTES
Microsoft sues federal government over data requests. The software giant served the Justice Department with a lawsuit filed in Seattle, challenging gag orders that prevent it from telling customers when the government requests access to emails or other digital information. Microsoft believes that policy violates constitutional rights surrounding free speech and unreasonable search and seizure. (New York Times, Wall Street Journal)
Apple considers App Store changes. There are more than 1.5 million titles “featured” in Apple’s mobile app marketplace, which means it’s tough for any one of them to stand out. As a result, the tech giant is considering changes to the site’s search engine, reports Bloomberg. Among other things, Apple may let developers pay to have their apps displayed more prominently. (Bloomberg)
Oracle dedicates $200 million to teaching kids to code. The software giant is donating the money to the federal government’s Computer Science for All program over the next 18 months. The $4 billion initiative announced in January seeks to broaden the range of courses available to children in public schools. (Fortune)
Things don’t look good for that rumored Toshiba-Fujitsu-Vaio venture. Negotiations surrounding a venture that would combine the personal computing divisions of the three Japanese tech companies have broken down, reports The Wall Street Journal. There’s still a chance Toshiba and Fujitsu may come to terms. All three companies are struggling amid a global decline in PC sales, one that is coupled with brutally low margins. (Wall Street Journal)
Yahoo amends employee severance policy. The change should ensure that CEO Marissa Mayer and other top executives receive packages if the Internet company sells all or part of its assets. Yahoo is soliciting buyout offers for all or part of its operations. The deadline for first-round bids is Monday. (Fortune, Bloomberg, New York Times)
Verizon strike hits new customer installations. The now 2-day-old strike of more than 40,000 workers is forcing the telecommunications company to prioritize repairs over activations for Internet and television service. It normally handles 30,000 to 35,000 per week. Meanwhile, Verizon CEO Lowell McAdam is visiting the picket lines to listen to workers’ concerns. (Reuters, Fortune)
Canadian company Mitel buys videoconferencing pioneer Polycom. The deal, worth almost $2 billion, is meant to appease activist investor Elliott Management. It will create a powerhouse in Internet telephone and video collaboration services. (Reuters)
Intel moves too slowly for new president. The chipmaker hired Venkata “Murthy” Renduchintala away from Qualcomm last fall to shake up its lagging efforts in several key businesses. That shake-up appears to be in full swing.
Two weeks after two of his top reports held over from the prior regime left the company, Renduchintala is reorganizing the leadership structure overseeing six of the Intel’s most important projects, according to a memo obtained by The Oregonian newspaper. His plan: establish new, three-person leadership teams drawn from across the company to oversee each of the projects. (Fortune)
IN CASE YOU MISSED IT
Seagate sales miss expectations as PC downturn hits suppliers
by Aaron Pressman
Alleged co-founder fights back in dispute over self-driving car startup by Kia Kokalitcheva
Get Apple’s QuickTime off your PC now by David Meyer
Eyes on the road with Apple CarPlay by Jason Cipriani
What the Facebook analysts are saying, F8 edition by Aaron Pressman
Apple will donate app sales to the environment by Don Reisinger
This software company wants a chance to break your call center
by Heather Clancy
ONE MORE THING
Would you buy a smartphone with legs and arms? Sharp is testing out the idea in Japan with its new RoBoHoN, which it is pitching as a sort of mobile companion. Frivolity comes at a price, though, in this case almost $1,800. (Fortune)
MARK YOUR CALENDAR
Adaptive Live: Journey to insight for financial executives. (April 25-28; San Jose, Calif.)
Modern Marketing Experience: The Oracle Marketing Cloud ecosystem. (April 26-28; Las Vegas)
Infosys Confluence: Zero distance to customers. (April 27-29; San Francisco)
Qlik Qonnections: Business intelligence trends. (May 1-4; Orlando)
EMC World: What’s next for digital business. (May 2-5; Las Vegas)
The Marketing Nation Summit: Marketo’s annual conference. (May 9-12; Las Vegas)
Digital Transformation: Forrester’s new forum for digital business leaders. (May 10-11; Orlando, Fla.)
Salesforce Connections: Cloud marketing trends. (May 10-12; Atlanta)
Coupa Inspire: Rethink the possible. (May 10-12; San Francisco)
Hub16: Smarter planning apps for numbers-driven companies. (May 10-12; San Francisco)
Relate Live by Zendesk: Customer engagement strategies. (May 11-12; San Francisco)
Knowledge16: ServiceNow’s service management conference. (May 15-20; Las Vegas)
SuiteWorld: NetSuite annual customer gathering. (May 16-20; San Jose, Calif.)
Fortune Brainstorm E: The intersection of technology, energy, and sustainable business. (May 16-17; Carlsbad, Calif.)
SAPPHIRE Now: SAP’s annual conference. (May 17-19; Orlando)
Gartner Digital Marketing: How to move from vision to execution. (May 17-19; San Diego)
Gartner Supply Chain Executive: Creating a value chain. (May 17-19; Phoenix)
Google I/O: For creative software coders. (May 18-20; Mountain View, Calif.)
MuleSoft Connect: Enable your digital transformation. (May 21-25; San Francisco)
Twilio Signal: The developer conference for communications. (May 24-25; San Francisco)
MongoDB World: For giant ideas. (June 28-29; New York)
Inforum: Infor’s annual user conference. (July 10-13; New York)
Fortune Brainstorm Tech: The world’s top tech and media thinkers, operators, entrepreneurs, innovators, and influencers. (July 11-13; Aspen, Colo.)
Sage Summit: For fast-growth businesses. (July 25-28; Chicago)
Workday Rising: Talent management in the cloud. (Sept. 26-29; Chicago)
Microsoft Ignite: Product roadmaps and innovation. (Sept. 26-30; Atlanta)
Oracle OpenWorld: The future of the cloud is now. (Sept. 18-22; San Francisco)
Dreamforce: The Salesforce ecosystem gathers. (Oct. 4-7; San Francisco)
Grace Hopper Celebration of Women in Computing: The world’s largest gathering of women technologists. (Oct. 19-21; Houston)
Drone World Expo: Commercial apps for unmanned aircraft. (Nov. 15-16; San Jose, Calif.)
|This edition of Data Sheet was curated by Heather Clancy.|