Stealth Startup Fantex Wants To Make It Possible For Celebrities To IPO

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Stealth Startup Fantex Wants To Make It Possible For Celebrities To IPO

If corporations can be people, why can’t people be corporations? A stealth startup called Fantex aims to allow celebrities and professional athletes to file for initial public offerings (IPOs).

The quoted text and screenshots in this article are from the Fantex app the company had launched in the iTunes app store on August 27, in what was an apparent beta test. Fantex removed the app yesterday after the company declined to comment for this story.

Fantex describes itself as “the world’s first marketplace that lets consumers invest real money in stocks linked to the value and performance of the brands of the world’s top athletes.”

And here’s the kicker: Fantex says “all tracking stocks are offered pursuant to a registration statement that has been filed with the Securities Exchange Commission (SEC).” A SEC filing from July shows the company was delivered a notice of effectiveness,  which is typically done when the company has filed to register for sales to the public (as Fantex is doing), but the documents that the SEC deemed effective for sale are not publicly available.

Fantex offers a disclaimer on the app that hints a bit at how the business on their end works:

“Each Fantex Inc. tracking stock is intended to track and reflect the separate economic performance of a specific brand contract that Fantex has signed with an athlete. However, holders of shares of a Fantex Inc. tracking stock will have no direct investment in that brand contract, associated brand or athlete. Rather, an investment in a tracking stock will represent an ownership interest in Fantex, Inc., as a whole. These tracking stocks are offered only through Fantex Brokerage Services (FBS). FBS cannot assure you as to the development or liquidity of any trading market for these stocks.”

This means there are two separate markets within Fantex. Fantex strikes deals with professional athletes who give up a certain percentage of their income (presumably over an allotted period of time, like the length of their active career) in exchange for the proceeds of the IPO.

Some screenshots of the app. Take numbers in these images, and the ones below, with a grain of salt, as some of them appeared to be placeholders (e.g. another player’s gross IPO Proceeds were penciled in for over $18 billion).

People can then buy shares of that player’s brand, like a stock, in the Fantex-consumer market. Presumably, if San Francisco 49ers tight end Vernon Davis has a monster year and looks like he’s going to get a bigger endorsement deal or a larger contract in a few years, his stock would rise and a fan could sell their Davis stock and cash out with a real, monetary profit. People would own tracking or targeted stocks in Fantex that would depend on the specific brand that they choose; these stocks would then rise and fall based on their own performance, not on the overall performance of Fantex.

At the time of publication there were nine athletes, all NFL players, available for Fantex IPOs in the now-removed app, including high profile stars Arian Foster and Vernon Davis.

Dave Butz, the agent for New Orleans Saints wide receiver Lance Moore, said he wasn’t sure if his client was working with Fantex. Representatives for the other eight players did not respond to multiple requests for comment before publication, so we’re not positive if these athletes have signed on with Fantex or if they are merely placeholders in the app. However, they would be incredibly random choices for placeholder players, as some are superstars, some are solid but unnoticeable players, and others are fighting for NFL roster spots (one is a free agent longsnapper). If they were merely placeholders, I’d assume the company would fill the app with more high profile, noticeable players.

While the app only features professional athletes right now,  we’re told the company has aspirations to expand from athletes to celebrities.

Player profiles show the performance of the brand’s stock on Fantex, as well as real world information about the player’s performance on the field, financial details, and news about them.

David Bierne, Buck French, and David Mullin founded the company. Bierne was a general partner at Benchmark Capital. French founded and served as CEO of OnLink, which sold to Siebel systems in 2000 for $609M. Mullin has been the CFO for a number of startups

The rest of the team has similarly impressive resumes, including a former CTO/COO of E*Trade, a former head of product management at Yahoo Finance, and a number of ex-Wall Street guys.

Put simply, this isn’t the pipe dream of a couple of 20-somethings who were watching the VMAs and thought, “man, wouldn’t it be cool if Miley Cyrus was a stock?”

Fantex’s board and advisors includes Hall of Fame quarterback John Elway, former NBA sharpshooter (and Villanova MBA) Kerry Kittles, and Benchmark general partner Bruce Dunlevie, among others.

The startup has raised $13 million in equity funding, according to an SEC filing from February of this year. Unsurprisingly, sources say Benchmark was in on the round.

It looks like the app was put in the iTunes store as part of a semi-public beta the company is (was?) doing. While the company’s main website domain (Fantex.com) still points to a vague site that hints at a big project on the horizon and shows off the Fantex team, links in the app directed to beta.Fantex.com.

Besides being a fun place to short Amanda Bynes’ stock, Fantex will undoubtedly arouse a wide range of reactions to and questions about its implications for society.

For most athletes, joining Fantex probably isn’t a great idea. These are individuals who are already notoriously bad with their money, and they have very unique wealth management situations in which they earn massive sums of money over a very short career. Part of the reason many athletes have money problems is that they become accustomed to a lifestyle while they are earning millions per year that is unsustainable over their lifetimes. Giving up a percentage of their future earnings to get more cash even earlier is the opposite of what they should be doing.

For the buyers and sellers of the market, it may feel uncomfortable directly evaluating other humans as financial stocks. To be fair, this betting on people isn’t particularly new. Everything from the stock market to venture capital investing to sports betting relies heavily on individuals (whether they’re CEOs, founders, or quarterbacks) who have a disproportionate impact on organizations. We’ve even covered a startup, Upstart, that lets people raise capital in exchange for a share of their future income–very similar to Fantex. But the celebrities in Fantex’ app are fairly high profile – they’re stars who we already over-fetishize.

Soon, we won’t just be stalking athletes and celebrities out of our personal interests. We’ll be keeping a close eye on our business investments.

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Because Walking Saves Lives, Mobilizer Inc. Is A Startup That's Aiming To Get Hospital Patients Moving

For sedentary medical patients, one of the easiest ways to reduce the time of hospital stays and decrease the risk of complications like blood clots and pressure ulcers is simply to get up and walk around. But with medical equipment like oxygen tanks or IV drips in tow, it can take nurses up to 20 minutes to prepare a patient for ambulation, adding up to hundreds of hours of wasted time each week. This means that when patients are finally up and moving, some are only walked as far as their door before being sat back down.

Mobilizer Inc., a graduate of the ZeroTo510 medical device startup accelerator, created a six-wheeled holster for all of that medical equipment in order to make medical ambulation easier and faster. The carrier sits next to the patient’s bed so that only one attendant — rather than up to five — is needed to unplug it from the wall, release the brake, and get them moving.

Mobilizer, which launched in May, has raised $300,000 in funding from Innova Memphis and MB Venture Partners and plans to close another $400,000 in the coming year. CEO and co-founder James Bell said that so far Mass General Hospital and the Vanderbilt University Medical Center have purchased units, which cost a little under $5,000 apiece.

According to Bell’s projections, Mobilizer will be net cash flow positive by year’s end. The company has sold almost 100 units to date.

The proliferation of medical startups like Mobilizer offers an invaluable payoff: the possibility of finding ways to reduce the economic and personnel burdens on the hospital system. Medical tricorders like the Scanadu SCOUT and Teddy the Guardian, for instance, show potential to do so by putting diagnostic tools in consumers’ hands and therefore reducing the number of unnecessary visits to the doctor.

In the case of Mobilizer, getting patients’ blood flowing means turning over beds faster by speeding recovery rates, avoiding the cost of complications, and boosting staff efficiency.

Although medical tech companies often struggle to get FDA approval before they go to market, Mobilizer is a class 1 exempt service, meaning the clearance process requires proving a certain level of quality and paying a fee to register with the FDA.

Bell said that the plan is to create platforms for different hospital departments, tailoring the Mobilizers to their varying equipment needs. Outside of the hospital, it will be easy to scale into home care as well. And Mobilizer is looking to form partnerships with other medical tech companies.

“We are establishing relationships with other companies, for example with a portable ventilator company that mounts right on the Mobilizers really easily,” Bell said.

Mobilizer does have some competition in this space, but Bell pointed out that efficient solutions are not widespread in hospitals yet. He said he had heard of some centers using red Radio Flyer wagons to carry equipment, or taping oxygen tanks to walkers, which, yes, is just as risky as you might imagine.

You know what? That alone is a pretty good argument for a better equipment carrier.

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CrunchWeek: iPhone Trade-Ins, The New New Foursquare, And Twitter's Blue Lines Problem

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CrunchWeek: iPhone Trade-Ins, The New New Foursquare, And Twitter's Blue Lines Problem

This weekend, summer is sadly coming to a close (in the Northern Hemisphere, at least.) But all is not lost! At least we still have CrunchWeek, the show that brings a few of us TechCrunch writers together to chat about the most interesting tech news stories from the past seven days.

This time around, Leena Rao, Anthony Ha and I discussed the ins and outs of Apple’s new iPhone trade-in program, the latest big update to the Foursquare app (and the rumors of a possible Microsoft investment), and Twitter’s latest redesign with lots of controversial blue lines.

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India's Visa Maze Ensnares Foreign Entrepreneurs

Carrying all the right documentation for his five-year business visa, Alex (not his real name) embarked on what he thought would be his fourth and final visit to the Indian immigration authority. He believed his wild goose chase was almost at an end. However, his awkwardly smiling assassin, the elusive office supervisor, had other ideas.

“Sorry, you can’t get your visa now, please come back in some time,” the supervisor said, fatally.

Alex’s plight shows the difficulties entrepreneurs face in trying to access the booming market of India today. This is his story.

The economics graduate moved to India about a year ago to co-found a social business with his peers. The government made them wait the best part of a year before approving their application to be incorporated as a local not-for-profit — a vital credential to navigate the country’s Catch-22 regulatory system. With incorporation certificate in hand, Alex was confident the last piece of his visa puzzle, namely attaining a five-year authorisation to work to improve the quality of life for Indians, was about to fall into place.

How wrong he was.

Stepping into the office was like entering Punxsutawney, Pennsylvania, on Groundhog Day, endlessly waiting for a weasley little oracle to emerge from his hovel in order to deliver bad news. Alex was forced to return to the office three times because he “didn’t have the right documentation.”

On the fourth visit, the bureaucrat, ensconced in his glass bubble, again said he didn’t have the right documents and would have to come back again. At the end of his wits, Alex didn’t buy it. After failing to plead his case with the front-line worker, he asked to speak with the manager lurking in the background. The bureaucrat turned meekly, skulked over, and relayed the request to his superior who took one look at the fiery redhead on the wrong side of the counter and scurried away to his glass-walled office, deep in the bubble. The clerk returned and, as if the whole spectacle had not been witnessed, told Alex the manager was unavailable.

“The manager is right there,” he said, pointing to the anonymous office. “I just need to speak with him for two minutes. I’ve already met him before. He knows my case.”

“Sorry sir, he is not available,” the bureaucrat said, reciting a well-used line. “You’ll have to send him an email to organise an appointment.”

Email? Alex was all too familiar with India’s digital black hole, where bits may have even travelled backwards and forwards in time, even to alternate universes, because they never seemed to reach their intended destination.

He whipped out his laptop and emailed the appointment request to the teller who was sitting down before him, but also included a stern warning: “I’m not leaving until I can speak with him.”

The bureaucrat retreated to discuss the latest turn of events.

Alex briefly took a minute to survey his surroundings. The same situation was playing out at three or four adjacent counters.

“This is the fourth time you’ve asked me to come back for a five-year business visa. I have all the right documentation, I have had it all along. Why won’t you accept my application?” railed another aggrieved applicant.

Alex snapped back to attention when the manager emerged from his den. He was face-to-face with his tormentor.

“What’s the problem, sir?” the manager asked.

“You know what my problem is! We’ve already spoken about it, you told me to come back with more information and I did. I’ve come back four times with the correct documentation and you’re still telling me I won’t be approved?!” he said.

“I’m sorry sir but we can’t process this visa application now, please come back in some time,” he said, wearing a weak smile.

“Why not?”

“I’m sorry sir but we can’t do this now, please apply in some time,” he repeated, like a broken record.

No matter how he always received the same answer and result but despite the frustrating experience he plans to come back and try again. He’s chasing that sweet feeling of victory that can only be earned by simultaneously exerting extreme amounts of effort and patience to achieve ordinarily routine tasks.

The Red Tape At The Finish Line

For an entrepreneur, there’s a lot to like about India. The subcontinent’s diversity, population, and economic disparity offers near endless problems to solve, as well as the scale to make a meaningful impact and return. But if you get too far ahead of yourself, the red-tape woven noose dangling around your neck will rein you back in. The rope becomes dangerously short as you enter the government maze, where searching for the right approvals demands long wait times, repeated visits, and constant apprehension as to whether the application will even be received. It’s an exercise in humility.

Saju James, partner at Fragomen Global Immigration Services, said the visa process was straight forward — if you know the procedures. This means that you must give the consulates the right information, right down to using the correct vernacular in the application.

“If you don’t stick to the template, exactly what the consulate is looking for, the chances of getting denials are much higher,” said James, whose firm has processed close to 1,000 work permits, less than two percent of which have been rejected.

This is a legacy of the way that visa offices were run before 2009, James said, when the Indian government didn’t have direct oversight of the approval process. Previously, each visa office and consulate operated as its own fiefdom; and a single supervisor served as judge, jury, and executioner.

“It was very arbitrary and the consulate officers had the power to decide, simply based on the interview,” he said. “They would say, ‘no, I’m not convinced this candidate should go on a work permit, he needs to apply for a business visa,’ and the reverse would happen as well.”

That changed as the government took direct control of the process and released specific guidelines and processes to be followed. Most importantly, it started measuring workers on how many visa applications they actually processed, as opposed to simply documenting the number of hours they worked.

It was a vast improvement.

“The only difference is that they have not published the formats for when you apply for a visa application, so some offices still give a difficult time to applicants.”

James said it was difficult to track the efficiency because the agencies themselves did not record the rejection rates. However, he estimated that the number of unsuccessful applications previously ranged into the double-digit percentages.

This is all little comfort to Alex, who still goes to bed every night in fear of being woken up by that same Sonny and Cher song and seeing his visa application, as complete as it always was, lying unapproved on his cheap desk.

[Image via Flickr]

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How Amazon Is Tackling Personalization And Curation For Sellers On Its Marketplace

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How Amazon Is Tackling Personalization And Curation For Sellers On Its Marketplace

When it comes to personalization, Amazon has been one of the pioneers in mining and using data to create a more curated e-commerce experience for consumers. But by now, nearly all e-commerce companies and marketplaces have caught on and are using more personalized recommendations to enhance the user experience when shopping and browsing.

Amazon has been particularly focused over the past few years on extending its personalization features for its sellers on the marketplace, both on the front-end consumer experience and on the backend.

We sat down with Peter Faricy, vice president and general manager of the Amazon Marketplace, to talk about how he and his team are approaching personalization for the company’s 2 million third-party sellers worldwide across 10 global marketplaces. Read our Q&A, which begins with Faricy providing some background information about Amazon Marketplace.

Peter Faricy: We have over 2 million sellers around the world selling across Amazon Marketplaces in 10 different countries around the world, and serving more than 200 million customers all over the world. So it’s that business that me and my team are responsible for. What we specifically do is we provide all of the technology and the products and services that sellers need around the world to run their business on Amazon.

So we are sort of your e-commerce engine, if you will. And the technology we develop helps them run their business on the Amazon Marketplace and reach customers and grow their business very successfully. So that’s kind of the quick background, if you will.

Leena Rao: So, one of the things that Amazon has been known for is being the pioneer of personalization and data mining to make the consumer shopping experience a much more curated type of shopping experience. So I am curious, sort of your view on this, and then how has that personalization strategy changed over time?

PF: Well, in the case of the Marketplace, we think about customers in two ways; we obviously think about the Amazon-buying customers and what they need and everything kind of starts with those customers in mind. But we also think of sellers on the Amazon Marketplace as our customers.

And sellers years ago began asking us questions around, what are the things that they can do to improve their business? How can they manage inventory better? What products should they be adding? How do they serve customers better?

So what I think you are referring to in this personalization, we developed some super-innovative technology three or four years ago that makes proactive, data-driven recommendations to each and every seller on the platform. And they range from suggestions on inventory quantities to new selections they should consider adding, to products they should consider fulfilling using a different surface than they use today.

We developed some super-innovative technology three or four years ago that makes proactive, data-driven recommendations to each and every seller on the platform.

And we have had great success with our sellers. We get a lot of positive feedback from developing these recommendations. And most of all, the way we kind of judge how helpful these are to sellers is how much they are used, and we know that sellers are actively using these recommendations to run and grow their business.

The part that’s been interesting for me is that it’s all self-service. So there is– when you mention how has it changed over time, we make every single day tens of millions of recommendations across all those different sellers. And on average a typical seller might have 100-plus recommendations in their queue in these different categories we have talked about before.

So we send them emails with recommendations. They can also take a look on our portal called Seller Central. On the Gateway page there is a platform called Selling Coach or Seller Coach and all the recommendations are also stored there.

And then we have many sellers that also plug into our business reports in different ways, and the recommendations are also available on our business reports. So we have got to serve up the recommendations in the manner that’s most effective for each seller, but try to give them the benefit of the data we have, our evaluation of their performance, and try to help make recommendations on what they can do to grow their business.

LR: When did you start doing this?

PF: Yeah, I think we started our first test in 2009, and probably went full-scale in 2010, and now it’s available in every country that we run a Marketplace in across the world, and every one of our sellers can access these recommendations.

LR: So what about the data and the signals you are using to help sellers personalize the Amazon experience for the end user, for me, who is, say, buying diapers on Amazon. How are you helping sellers then kind of draw the customer in through personalization?

PF: Yeah, I will try to give you a couple specific examples. I mean, as a customer one of the things that you rely upon is making sure that every product you are searching for is in stock.

And so sellers really value, they have told us, our guidance on when they are about to run out of stock and how much inventory quantity they should carry. And depending on the season of the year, particularly during the holiday season, it’s difficult to know how much inventory to have in stock, as the sales ramp up closer to the holiday season, in November, December.

So one example is that we give — one of our most popular recommendations is called straightforward enough, almost out of stock. So we take a look at how much you are selling; we take a look at the inventory that you have in stock on Amazon, and we make a recommendation based on what we think the forward-looking demand for your product will be, how much more you should add to inventory.

So that’s a super simple one, but honestly one of the most powerful ones for serving customers better, managing your inventory in e-commerce is very, very challenging, and sellers tell us they really find our recommendations useful.

LR: What are some of the other way’s that you are using data to kind of serve up additional recommendations which then brings traffic to sellers?

PF: When customers go to search for something on Amazon, and either they can’t find the product at all, which we call no search results, or the search results are of low relevancy, we have a way to measure how relevant the results are we return. We take that information and immediately surface it back up to sellers who already sell similar products and recommend that they also begin to carry these products that customers are looking for.

LR: It sounds like Amazon wants to go beyond just providing the kind of access around the stock or in the fulfillment, but also help them on the backend with their sales and business and things like that.

PF: Yeah, exactly, I think that’s a good way to say it. I mean, right now the most popular areas we are helping sellers on are things like inventory, which we talked about; helping them find new selection, new products to add to Amazon. We’ve got a lot of positive feedback on those recommendations.

Also, the fulfillment recommendations are super-critical, because we do offer a service called Fulfillment by Amazon, which is very popular with sellers, and some sellers choose to keep some inventory that they manage the fulfillment on their own. But for some of the more challenging inventory to fulfill for example, they may use Fulfillment by Amazon. And so we make recommendations based on the characteristics of how difficult these products are to fulfill or the seller’s own performance of doing a great job on serving customers and getting the products there fast and easily.

And so for sellers who have a more challenging time doing that we make recommendations in fulfillment. And then you know the area that’s been really growing quite a bit in popularity, is we are beginning to help sellers identify areas where they can improve the sharpness of their pricing.

So, for example, on the pricing world we surface up the sellers of all the different products you carry on Amazon, which of the products that you knot the lowest price on, and that allows them to go back and take a look at those products easily and determine whether or not it makes sense for their case to lower the price for customers.

LR: When it comes to social data, I am curious how sellers are responding to that sort of data when it comes to commerce. And do you feel like additional data from the customer is something that sellers are becoming more excited about?

PF: Yeah, I think, clearly “social” being a kind of a broad term certainly in an area that sellers understand how important that is to customers. And one of the ways that we try to connect customers and sellers on the Amazon detail page, is a new feature we introduced earlier this year called Ask, A-S-K, and you could see now, but if you go down some of our detail pages, we do something really interesting which is that we allow customers to ask a question about a product.

One of the things that our sellers love about selling on Amazon is they are really in complete control of their business.

Let’s say they are buying a camera and they want to know how good this camera is for shooting their children’s sporting events. And it’s kind of one of those questions, it isn’t exactly covered by the data that is provided about the camera, but it’s kind of a more “ask a friend” kind of a question. And we serve those questions up in an anonymous way to both the sellers of the items and also customers who previously purchased that item.

And so far we’ve had a great response rate. We’ve had answers come back very, very quickly and very, very thoughtful for people who already own the product or are selling the product.

So in the case of sellers who participate in this I think they have been pleased that they can, in this case, use kind of a more social angle to help customers find the product that’s best for them.

LR: Do you think that social data is something to allocate from Facebook, and are there different types of social data that work and some that don’t?

PF: Well, we don’t publicly discuss what kind of data we use for the recommendation, but certainly social data that’s publicly available like you are describing is certainly one of the inputs we use.

LR: From the sellers’ standpoint, Peter, how do you balance serendipity versus discovery? I think that a lot of sellers want, I am imagining, their product to be discoverable. How do you balance that need for discovery with also having millions of sellers on the platform?

PF: Well, one of the things that our sellers love about selling on Amazon is they are really in complete control of their business. So when it comes to these data-driven recommendations we allow them to opt in and opt out. We make over 50 different recommendations today and they can choose which recommendations we service up to them based on the ones that are most important to them or most important for their product.

We challenge ourselves and we measure how useful they are. We know the majority of our sellers actually use our recommendation today, because we measure and track that. Then we also track how much improvement to their business did they get from using our recommendation and we hold ourselves accountable.

LR: What would you say the most popular tool that sellers using when it comes to personalizion? using some of these personal additional tools you offer?

PF: The No. 1 is an email called the Almost Out-of-Stock email. So those words “Almost Out-of-Stock” are almost like their own brand in the seller world. So that still remains by far the most popular type of recommendation we make today, because you could imagine for sellers who either sell a lot of products in total or who are trying to manage their inventory through different types of seasonality or who are also trying to manage their inventory across multiple marketplaces. Many of our largest sellers sell on other marketplaces in addition to Amazon.

So they have a really big challenge to keep up with the demands of managing their inventory well. So, the “almost out of stock” set of recommendations, this has been the most popular.

But I will say what’s been increasing dramatically, is the appetite from sellers, and our ability to help them in adding new products to Amazon. And so we have millions of unique products at Amazon today and yet, I can tell you we have an opportunity to add millions more.

Our goal is to make it very easy for them to come join Amazon and very easy for [sellers] to make money, and we know that it’s really a win-win.

And so we surface up recommendation for sellers and we kind of do it in a way that’s smart and effective for them. So, if there is a seller who is selling lacrosse goals, and lacrosse sticks, and we notice there is an opportunity to add lacrosse jerseys and lacrosse balls, I obviously make those recommendations to them and so sellers really find, from the feedback they’ve given us, really find our selection recommendations to be really, really helpful and help them grow their business.

LR: What else is on a seller’s mind and what are you thinking about when it comes to future products?

PF: One of the things that sellers give us very positive feedback on is that we don’t charge sellers extra in order to receive these recommendations, and so you may see other participants in e-commerce taking other strategies here. But, we’ve for as long as the marketplace has existed, we don’t charge sellers listing fees and we don’t charge sellers fees for our recommendation.

So our goal is to make it very easy for them to come join Amazon and very easy for them to make money, and we know that it’s really a win-win. If we could help sellers to serve customers better, our customers will be happy, sellers will get to grow their business and of course that creates a great Amazon Marketplace.

So, the fact that this is a really innovative service free of charge I think is also kind of unique even in today’s world of e-commerce.

On the forward-looking front, I think without question there is a couple of topics that are on sellers’ minds; one is that many of them see the opportunity to grow their business beyond the current geography or country they are in.

So we’re beginning to make more and more recommendations for sellers on products they can sell outside their home country. And I think this is a game-changer, Leena, because if you think about the history of business, the only way you could experience it geographically was to maybe go plant the flag and open up a new office and add lots of capital and lots of overhead trying to figure out how to serve a new country. Being able to reach 10 countries on the Amazon Marketplace alone, plus customers from all over the world who shop those 10 marketplaces, is becoming a bigger and bigger opportunity for sellers. So that’s one.

And then I think the other is back to this topic of selection. I think there are a lot of interesting categories at Amazon that customers are really happy with and want to find more and more selection. And one example would be softlines; so clothing, apparel, accessories, shoes. That’s an area where we’re beginning to have really great customer experience, and we’re able to provide sellers with better and better recommendations of new products and new brands we love to see them add to the marketplace.

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Gillmor Gang: Contextual Adults

The Gillmor Gang — Robert Scoble, John Taschek, Kevin Marks, Keith Teare, and Steve Gillmor — settle in for the Labor Day weekend with a tour of a busy news week. Stops along the way include iBeacon in iOS7, Twitter’s thin blue line, the politics of twerking, and devices, devices, devices.

Short takes on Bill Gates’ unlikely return, Apple’s iTrade-In offer, why Chromecast will change our habits, and Google’s Chromebook move in classrooms round out a lively end to summer. It’s a world where software is free and we spend our time saving up for the next shiny dongle.

@stevegillmor, @scobleizer, @jtaschek, @kevinmarks, @kteare

Produced and directed by Tina Chase Gillmor @tinagillmor

Live chat stream

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Coinchat Is A Chatroom Where Talking Sense Earns You Bitcoin

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Coinchat Is A Chatroom Where Talking Sense Earns You Bitcoin

Coinchat is a Bitcoin-incentivised browser-based chatroom where you can shoot the breeze with strangers online and earn Bitcoin in the process. Where’s the catch? Well, there isn’t really one. The Bitcoin you’re earning through chatting with other users comes from the site’s own revenue generation — funded by ads and also a transfer fee it charges when users send Bitcoin tips.

In addition to earning fractions of Bitcoin for chatting, Coinchat users can tip each other/individual messages, if they like the cut of each other’s chat, and also tip particularly useful bots (which users can create) — so that’s another way to earn a little cryptocurrency on the site.

Coinchat also supports scripted games (mostly betting-type games) where you can spend a little Bitcoin for the chance to earn a little more (or lose it all). Users can also plough their Bitcoin earnings into chatroom furniture like additional font colours, if they so desire.  And if you want to take your earnings/winnings away to spend elsewhere the site lets you withdraw BTCs to Inputs.io: a Bitcoin wallet service run by the same developer behind Coinchat.

Coinchat’s founder, a 28-year-old male freelance web developer based in Australia who (in keeping with Bitcoin’s shadowy origins) wishes to remain anonymous to avoid any Bitcoin associated “drama” or the threat of “doxxing”, tells TechCrunch the service has been up and running for about five months. In that time it has amassed around 8,000 registered users — mostly in Western nations, with a sizeable community of cash-strapped school age/college age folk among its user-base. There’s also an active Spanish community of Coinchat users.

The largest amount of BTC withdrawn in one go is 10BTCs (around $1,288 at current exchange rates), according to the founder. As for the chatting, the site has played host to around 3.5 million messages since April. He says users display a variety of behaviours, including some who’re obviously just there just to earn free Bitcoin, and — at the other end of the spectrum — Coinchat regulars who participate in the community, hanging out and collaborating on their own projects, Reddit-style. “There was a collaborative horror story being worked upon by coinchatters earlier for instance,” he says.

Chat-based earnings on Coinchat accrue as fractions of a BTC (earnings can range from 0.02mBTC to 2mBTC per message). The rewards rates are also varied behind the scenes, presumably to keep pace with Bitcoin’s (sometimes wildly swinging) exchange rates.

“There’s an algorithm that determines how much coins you earn based on a variety of factors,” says the founder, who clearly doesn’t want to go into too much detail to avoid gaming of the system. Obvious stuff like spamming, posting gibberish and cutting and pasting swathes of text to try and ramp up your earnings won’t work, though. “Make sure what you say has some quality to it,” is one basic piece of advice for newbs.

For an idea of how much you can earn, about an hour’s chatting (and one 0.25 mBTC tip) earned me 0.535 mBTC on the site.  ”As long as you don’t waste your money gambling, you will earn btc surprisingly fast,” chips in one Coinchat user when I ask about the rewards system.

As for tips, as well as some pre-set tip rates, tip amounts can be set by individual users — so it’s possible to hit it big if you impress the right Coinchatter. “A few days ago someone gave away 800 mBTC (almost an entire Bitcoin!),” says another user. “I’ve seen a few times over the past month where people have given out around a Bitcoin to random people.”

While Coinchat users rack up their BTC earnings, the site isn’t making its founder filthy rich yet but that’s not a concern for him; the ability to cross promote his other Bitcoin services is clearly worth the minimal running costs. “Coinchat is making a slight amount of money — even if it lost a bit of money, I’m happy to keep it running as a ‘loss leader’,” he says. “My goals are for it to become a popular chat network — everything starts out small.”

Android and iOS apps for Coinchat are currently in the works, but it’s possible to run the chatroom on a smartphone in the browser as an HTML5 web app. The native apps will be faster, and include features like push notifications plus a more streamlined UI, the founder adds.

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