TC Cribs: ModCloth, Where Playing Dress-Up Is All In A Day's Work

TechCrunch

TC Cribs: ModCloth, Where Playing Dress-Up Is All In A Day's Work

Welcome back to a new episode of TechCrunch Cribs, the video series that steps inside the gates of the hottest technology companies around to get a good look at the places, people, and oftentimes pets behind the web’s most popular products.

It’s not often that visiting a tech startup inspires you to amp up your wardrobe. But that’s exactly the feeling you get when you step inside the headquarters of ModCloth, the San Francisco-based company that sells vintage inspired womenswear.

At ModCloth HQ, the number of cute dresses per employee is much higher than at the average startup — and with photoshoots for the heavily trafficked ModCloth site going on daily, everyone has some real incentive to look their best.

Check out the video embedded above to meet ModCloth’s adorable canine mascot Winston, scope out the staff’s 24/7 clothing swap rack, watch me kick CEO Eric Koger’s butt at Connect 4 (hey, no one said winning had to be fair and square), and more.

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Tesla Takes A Breather Passing $184/Share Due To Outstanding Convertible Debt, Warrants

Tesla has been on a tear in 2013, showing its first quarterly profit, raising $1 billion in cash, paying off its government loan, and enjoying a more than 400% gain in its share price year to date.

Today, however, Tesla slipped 6%, settling around the $180 per share mark. After having risen to a 52 week high of $191.83, Tesla has eased. A good portion of the slip can likely be attributed to some early terms that got outdated quickly due to Tesla’s meteoric rise.

There actually appear to be a few factors, including declining institutional investment and its stock price reaching levels that impact the convertible notes and warrants that Tesla sold in May. At that point in time, Tesla traded for under $100 per share.

In its August 7th investor letter, Tesla spelled out its fundraising activity during the quarter, including the sale of 4.5 million shares and the raising of $660 million in convertible debt. About 45% of those funds were used to repay a Federal loan, and a fee for repaying the debt ahead of schedule.

The convertible debt carries a 1.5% coupon rate, which is quite low, and on the lower end of expectations set at the time of sale. As the Wall Street Journal notes, the size of the convertible note offering was increased twice to $600 million, a figure that could rise to $660 million if “underwriters purchase additional shares.”

They did. So, the full tally of new cash for Tesla tipped past the $1 billion mark.

Then its stock continue to rise. Here’s Tesla on how it raised the set up the convertible debt to avoid potential dilution. Recall that Tesla traded for under $100 per share at the time of its issuance:

To mitigate the potential dilution impact from the issuance of convertible debt to our common shareholders, we also entered into a call spread to increase the effective conversion price from $125 to $184 per share. The call spread allows us to avoid incremental dilution from the convertible debt until our common share price climbs past $184.

Tesla recently went past the $184 per share mark, and then saw its stock fall. The company also issued warrants this May – the time of the share sale and debt issuance – that had a strike price of, you guessed it, $184.84. Those warrants are for 5.3 million shares, or around $1 billion at current valuation.

So, it seems that Telsa didn’t anticipate its stock to perform as it has, and therefore the financial controls – likely set up for the long-term, given that the convertible debt were not due until 2018 – became somewhat moot. Crossing the $184 mark, Tesla’s stock unlocked investor agency, pushing its share price down.

Add to that the fact that Tesla has had an incredible run over the summer that some are citing as perhaps too optimistic and we could be seeing more pullback over the next few weeks.

For more on the potentially dilutive effects of the convertible debt, which have been hedged, this chart is for you.

Image Credit: Wendell Oskay / Flickr CC

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Facebook And Cisco Let Brick-&-Mortars Demand Customers Check-In To Get Wi-Fi

Restaurants, hotels, and other businesses are spending a lot to provide customers with free Wi-Fi. Today Facebook and Cisco roll out a way to help any brick-and-mortar recoup its costs by asking users to check-in to get Internet access. Those who oblige get dropped on the business’ Facebook Page, and their anonymous, aggregate demographic info is passed to the merchant.

The Cisco and Facebook partnership extends a pilot of “Facebook Wi-Fi” than began running with 25 businesses in the San Francisco Bay Area last year. The test showed that businesses tripled their daily check-in count by using the system. Now it’s rolling out so any business in the US can use it.

Here’s how it works. Merchants use the existing router and broadband subscription they pay for. They integrate the “Cisco CMX for Facebook Wi-Fi” software which creates a special landing page for anyone trying to access the business’ Wi-Fi.

Instead of having to wait in line to get a password they might type in wrong, customers simply connect to the business’ Wi-Fi network through their laptop or mobile device. They’re strongly encouraged to “Check in for free Internet”. That check-in generates a News Feed story shown to their friends, bringing extra business to the merchant. Once connected without having to type in a password, users are dumped on the business’ Facebook Page where they can Like it or see recent marketing messages. Facebook also provides the merchant with the aggregate ages, genders, and other demographic info of those who check in, but in an anonymized format without names attached.

Say a user doesn’t want to share their location. The head of Facebook’s Wi-Fi initiative Eric Tseng tells me they can make the checkin private “if they don’t want to spam friends”. And if customers don’t have a Facebook account at all or are a little paranoid…and have good eyesight, they’ll find a small link at the bottom the landing page to connect without Facebook.

Tseng sees the program as a win for everyone involved. Customers get easy Wi-Fi access without fumbling with a password. Businesses get word of mouth marketing, Facebook engagement, and analytics that justify the cost of providing Wi-Fi, and Cisco gets its name out there.

Facebook gets a ton out of the program too, including:

• Check-ins to show in its News Feed beside ads


• Information about the locations and businesses its users visit


• A foothold with merchants it wants to turn into advertisers


• Recommendations of businesses to enrich Graph Search and its Nearby local discovery feature

If the Facebook Wi-Fi program gains steam, it could be easier to find an Internet connection around town since offering it won’t be such a costly burden to businesses. Unfortunately, less savvy users might not realize they don’t have to broadcast their current coordinates to get hooked up. Some people might actually enjoy helping friends discover cool cafes by checking in. But for everyone else, just read the grey print and the web is yours, no strings attached.

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Gay Gets Better (And More Targeted): Say Hello To The Next Generation Of Grindr

Boys who prefer kissing other boys will be glad to know that Grindr, the location-based hookup app focused on gay men, has today released a huge update with a handful of new features and a brand new look and feel, including an all-new logo.

To date, Grindr has over 7 million downloads worldwide, with over one billion chat messages sent each month and 1 billion photos sent every two months.

This is up from 4 million downloads in June of 2012, with 1 million daily uniques, though founder Joel Simkhai clarifies that between 2.5 and 3 million of those downloads are monthly active users. In terms of conversion rates, Simkhai merely states that “a good percentage” of users upgrade to the Grindr Xtra subscription model, and reminds that Grindr has made its way into the top 15 highest grossing apps in the past five years, number one in social.

“When I look at most of the top 20 highest grossing apps they don’t seem sustainable,” said Simkhai. “They’re mostly games. The fact that we’re there is a testament to what we’ve become to gay men, a basic utility.”

In terms of revenue, 75 percent of Grindr’s income comes from Grindr Xtra, and the other 25 percent comes from Grindr’s advertising business, which is split evenly between ad network-powered ads and in-house ads sold by the sales team.

As a long-time and regular user, Simkhai felt that a huge revamp was in order for the five-year old app, which has remained mostly unchanged over the course of its life.

The update brings with it a number of changes, most notably the introduction of Tribes (a way to categorize yourself beyond just gay). These let users self-identify with various tribes (which include Bear, Clean-cut, Daddy, Discreet, Geek, Jock, Leather, Otter, Poz, Rugged, Trans and Twink).

Grindr is using this form of identity expression to make money. Free Grindr users can only identify with one tribe, whereas Grindr Xtra members can choose up to three.

After years of being able to get away with just giving the user access to gay guys nearby, Simkhai has expressed that users are looking for something more specific than just gay. “Now there are so many guys, people would rather spend their time finding what they’re really looking for,” said Simkhai.

According to the founder, Tribes are more about increasing speed and optimization of the app as a tool rather than facing competition from niche-based apps like Scruff and Recon.

Another notable change is the addition of filters, letting users view a feed based on their own specific interests. These filters include age, height, weight, ethnicity, etc., but regular unpaid Grindr users only have access to three filters at a time. Paid users, on Grindr Xtra, have access to as many filters as they want.

Before this revamp, users were employing the block button (originally conceived as a safety feature) as a filtering tool. Simkhai explains that users have been asking for a filtering tool explicitly and through behavior.

Beyond that, users can include more information in their Profile, like body type, tribe, their “looking for” profile, and links to Facebook, Twitter and Instagram.

The feed itself, past having far more customization thanks to filters, has also been revamped to show larger thumbnails for each potential hookup, and an auto-scroll system. The update also introduces a brand new chat inbox, letting users see all their past messages, delete individual lines of chat, and view chats from favorites.

“Our biggest focus with Grindr is now on speed,” said Simkhai. “There are lot of guys on it now, and they all want it to be faster. So that’s what we’ve done with the next-gen version.”

To check out the new version of Grindr, head on over to the App Store. For Android users, the update should be available soon.

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