Facebook’s AI couldn’t spot mass murder

Facebook has given another update on measures it took and what more it’s doing in the wake of the livestreamed video of a gun massacre by a far right terrorist who killed 50 people in two mosques in Christchurch, New Zealand.

Earlier this week the company said the video of the slayings had been viewed less than 200 times during the livestream broadcast itself, and about about 4,000 times before it was removed from Facebook — with the stream not reported to Facebook until 12 minutes after it had ended.

None of the users who watched the killings unfold on the company’s platform in real-time apparently reported the stream to the company, according to the company.

It also previously said it removed 1.5 million versions of the video from its site in the first 24 hours after the livestream, with 1.2M of those caught at the point of upload — meaning it failed to stop 300,000 uploads at that point. Though as we pointed out in our earlier report those stats are cherrypicked — and only represent the videos Facebook identified. We found other versions of the video still circulating on its platform 12 hours later.

In the wake of the livestreamed terror attack, Facebook has continued to face calls from world leaders to do more to make sure such content cannot be distributed by its platform.

The prime minister of New Zealand, Jacinda Ardern told media yesterday that the video “should not be distributed, available, able to be viewed”, dubbing it: “Horrendous.”

She confirmed Facebook had been in contact with her government but emphasized that in her view the company has not done enough.

She also later told the New Zealand parliament: “We cannot simply sit back and accept that these platforms just exist and that what is said on them is not the responsibility of the place where they are published. They are the publisher. Not just the postman.”

We asked Facebook for a response to Ardern’s call for online content platforms to accept publisher-level responsibility for the content they distribute. Its spokesman avoided the question — pointing instead to its latest piece of crisis PR which it titles: “A Further Update on New Zealand Terrorist Attack”.

Here it writes that “people are looking to understand how online platforms such as Facebook were used to circulate horrific videos of the terrorist attack”, saying it therefore “wanted to provide additional information from our review into how our products were used and how we can improve going forward”, before going on to reiterate many of the details it has previously put out.

Including that the massacre video was quickly shared to the 8chan message board by a user posting a link to a copy of the video on a file-sharing site. This was prior to Facebook itself being alerted to the video being broadcast on its platform.

It goes on to imply 8chan was a hub for broader sharing of the video — claiming that: “Forensic identifiers on many of the videos later circulated, such as a bookmarks toolbar visible in a screen recording, match the content posted to 8chan.”

So it’s clearly trying to make sure it’s not singled out by political leaders seek policy responses to the challenge posed by online hate and terrorist content.

Further details it chooses to dwell on in the update is how the AIs it uses to aid the human content review process of flagged Facebook Live streams are in fact tuned to “detect and prioritize videos that are likely to contain suicidal or harmful acts” — with the AI pushing such videos to the top of human moderators’ content heaps, above all the other stuff they also need to look at.

Clearly “harmful acts” were involved in the New Zealand terrorist attack. Yet Facebook’s AI was unable to detected a massacre unfolding in real time. A mass killing involving an automatic weapon slipped right under the robot’s radar.

Facebook explains this by saying it’s because it does not have the training data to create an algorithm that understands it’s looking at mass murder unfolding in real time.

It also implies the task of training an AI to catch such a horrific scenario is exacerbated by the proliferation of videos of first person shooter videogames on online content platforms.

It writes: “[T]his particular video did not trigger our automatic detection systems. To achieve that we will need to provide our systems with large volumes of data of this specific kind of content, something which is difficult as these events are thankfully rare. Another challenge is to automatically discern this content from visually similar, innocuous content – for example if thousands of videos from live-streamed video games are flagged by our systems, our reviewers could miss the important real-world videos where we could alert first responders to get help on the ground.”

The videogame element is a chilling detail to consider.

It suggests that a harmful real-life act that mimics a violent video game might just blend into the background, as far as AI moderation systems are concerned; invisible in a sea of innocuous, virtually violent content churned out by gamers. (Which in turn makes you wonder whether the Internet-steeped killer in Christchurch knew — or suspected — that filming the attack from a videogame-esque first person shooter perspective might offer a workaround to dupe Facebook’s imperfect AI watchdogs.)

Facebook post is doubly emphatic that AI is “not perfect” and is “never going to be perfect”.

“People will continue to be part of the equation, whether it’s the people on our team who review content, or people who use our services and report content to us,” it writes, reiterating yet again that it has ~30,000 people working in “safety and security”, about half of whom are doing the sweating hideous toil of content review.

This is, as we’ve said many times before, a fantastically tiny number of human moderators given the vast scale of content continually uploaded to Facebook’s 2.2BN+ user platform.

Moderating Facebook remains a hopeless task because so few humans are doing it.

Moreover AI can’t really help. (Later in the blog post Facebook also writes vaguely that there are “millions” of livestreams broadcast on its platform every day, saying that’s why adding a short broadcast delay — such as TV stations do — wouldn’t at all help catch inappropriate real-time content.)

At the same time Facebook’s update makes it clear how much its ‘safety and security’ systems rely on unpaid humans too: Aka Facebook users taking the time and mind to report harmful content.

Some might say that’s an excellent argument for a social media tax.

The fact Facebook did not get a single report of the Christchurch massacre livestream while the terrorist attack unfolded meant the content was not prioritized for “accelerated review” by its systems, which it explains prioritize reports attached to videos that are still being streamed — because “if there is real-world harm we have a better chance to alert first responders and try to get help on the ground”.

Though it also says it expanded its acceleration logic last year to “also cover videos that were very recently live, in the past few hours”.

But again it did so with a focus on suicide prevention — meaning the Christchurch video would only have been flagged for acceleration review in the hours after the stream ended if it had been reported as suicide content.

So the ‘problem’ is that Facebook’s systems don’t prioritize mass murder.

“In [the first] report, and a number of subsequent reports, the video was reported for reasons other than suicide and as such it was handled according to different procedures,” it writes, adding it’s “learning from this” and “re-examining our reporting logic and experiences for both live and recently live videos in order to expand the categories that would get to accelerated review”.

No shit.

Facebook also discusses its failure to stop versions of the massacre video from resurfacing on its platform, having been — as it tells it — “so effective” at preventing the spread of propaganda from terrorist organizations like ISIS with the use of image and video matching tech.

It claims  its tech was outfoxed in this case by “bad actors” creating many different edited versions of the video to try to thwart filters, as well as by the various ways “a broader set of people distributed the video and unintentionally made it harder to match copies”.

So, essentially, the ‘virality’ of the awful event created too many versions of the video for Facebook’s matching tech to cope.

“Some people may have seen the video on a computer or TV, filmed that with a phone and sent it to a friend. Still others may have watched the video on their computer, recorded their screen and passed that on. Websites and pages, eager to get attention from people seeking out the video, re-cut and re-recorded the video into various formats,” it writes, in what reads like another attempt to spread blame for the amplification role that its 2.2BN+ user platform plays.

In all Facebook says it found and blocked more than 800 visually-distinct variants of the video that were circulating on its platform.

It reveals it resorted to using audio matching technology to try to detect videos that had been visually altered but had the same soundtrack. And again claims it’s trying to learn and come up with better techniques for blocking content that’s being re-shared widely by individuals as well as being rebroadcast by mainstream media. So any kind of major news event, basically.

In a section on next steps Facebook says improving its matching technology to prevent the spread of inappropriate viral videos being spread is its priority.

But audio matching clearly won’t help if malicious re-sharers just both re-edit the visuals and switch the soundtrack too in future.

It also concedes it needs to be able to react faster “to this kind of content on a live streamed video” — though it has no firm fixes to offer there either, saying only that it will explore “whether and how AI can be used for these cases, and how to get to user reports faster”.

Another priority it claims among its “next steps” is fighting “hate speech of all kinds on our platform”, saying this includes more than 200 white supremacist organizations globally “whose content we are removing through proactive detection technology”.

It’s glossing over plenty of criticism on that front too though — including research that suggests banned far right hate preachers are easily able to evade detection on its platform. Plus its own foot-dragging on shutting down far right extremists. (Facebook only finally banned one infamous UK far right activist last month, for example.)

In its last PR sop, Facebook says it’s committed to expanding its industry collaboration to tackle hate speech via the Global Internet Forum to Counter Terrorism (GIFCT), which formed in 2017 as platforms were being squeezed by politicians to scrub ISIS content — in a collective attempt to stave off tighter regulation.

“We are experimenting with sharing URLs systematically rather than just content hashes, are working to address the range of terrorists and violent extremists operating online, and intend to refine and improve our ability to collaborate in a crisis,” Facebook writes now, offering more vague experiments as politicians call for content responsibility.

Slowdown or not, China’s luxury goods still seeing high-end growth

Despite well-documented concerns over an economic slowdown in China, the country’s luxury goods market is still seeing opulent growth according to a new study. Behind secular and demographic tailwinds, the luxury sector is set to continue its torrid expansion in the face of volatility as it’s quickly becoming a defensive economic crown jewel.

Using proprietary analysis, company data, primary source interviews, and third-party research, Bain & Company dug into the ongoing expansion of China’s high-end market in a report titled “What’s Powering China’s Market for Luxury Goods?

In recent years, China has become one of the largest markets for luxury good companies globally. And while many have raised concern around a drop-off in luxury demand, findings in the report point to the contrary, with Bain forecasting material growth throughout 2019 and beyond. The analysis provides a compelling breakdown of how the sector has seen and will see continued development, as well as a fascinating examination of what strategies separate winners and losers in the space.

The report is worth a quick read, as it manages to provide several insightful and differentiated data points with relative brevity, but here are the most interesting highlights in our view:

PicsArt hits 130 million MAUs as Chinese flock to its photo editing app

If you’re like me, who isn’t big on social media, you’d think that the image filters that come inside most apps will do the job. But for many others, especially the younger crowd, making their photos stand out is a huge deal.

The demand is big enough that PicsArt, a rival to filtering companies VSCO and Snapseed, recently hit 130 million monthly active users worldwide, roughly a year after it amassed 100 million MAUs. Like VSCO, PicsArt now offers video overlays though images are still its focus.

Nearly 80 percent of PicsArt’s users are under the age of 35 and those under 18 are driving most of its growth. The “Gen Z” (the generation after millennials) users aren’t obsessed with the next big, big thing. Rather, they pride themselves on having niche interests, be it K-pop, celebrities, anime, sci-fi or space science, topics that come in the form of filters, effects, stickers and GIFs in PicsArt’s content library.

“PicsArt is helping to drive a trend I call visual storytelling. There’s a generation of young people who communicate through memes, short-form videos, images and stickers, and they rarely use words,” Tammy Nam, who joined PicsArt as its chief operating officer in July, told TechCrunch in an interview.

PicsArt has so far raised $45 million, according to data collected by Crunchbase. It picked up $20 million from a Series B round in 2016 to grow its Asia focus and told TechCrunch that it’s “actively considering fundraising to fuel [its] rapid growth even more.”

picsart

PicsArt wants to help users stand out on social media, for instance, by virtually applying this rainbow makeup look on them. / Image: PicsArt via Weibo

The app doubles as a social platform, although the use case is much smaller compared to the size of Instagram, Facebook and other mainstream social media products. About 40 percent of PicsArt’s users post on the app, putting it in a unique position where it competes with the social media juggernauts on one hand, and serving as a platform-agnostic app to facilitate content creation for its rivals on the other.

What separates PicsArt from the giants, according to Nam, is that people who do share there tend to be content creators rather than passive consumers.

“On TikTok and Instagram, the majority of the people there are consumers. Almost 100 percent of the people on PicsArt are creating or editing something. For many users, coming on PicsArt is a built-in habit. They come in every week, and find the editing process Zen-like and peaceful.”

Trending in China

Most of PicsArt’s users live in the United States, but the app owes much of its recent success to China, its fastest growing market with more than 15 million users. The regional growth, which has been 10-30 percent month-over-month recently, appears more remarkable when factoring in PicsArt’s zero user acquisition expense in a crowded market where pay-to-play is a norm for emerging startups.

“Many larger companies [in China] are spending a lot of money on advertising to gain market share. PicsArt has done zero paid marketing in China,” noted Nam.

Screenshot: TikTok-related stickers from PicsArt’s library

When people catch sight of an impressive image filtering effect online, many will inquire about the toolset behind it. Chinese users find out about the Armenian startup from photos and videos hashtagged #PicsArt, not different from how VSCO gets discovered from #vscocam on Instagram. It’s through such word of mouth that PicsArt broke into China, where users flocked to its Avengers-inspired disappearing superhero effect last May when the film was screening. China is now the company’s second largest market by revenue after the U.S.

Screenshot: PicsArts lets users easily apply the Avengers dispersion effect to their own photos

A hurdle that all media apps see in China is the country’s opaque guidelines on digital content. Companies in the business of disseminating information, from WeChat to TikTok, hire armies of content moderators to root out what the government deems inappropriate or illegal. PicsArt says it uses artificial intelligence to sterilize content and keeps a global moderator team that also keeps an eye on its China content.

Despite being headquartered in Silicon Valley, PicsArt has placed its research and development center in Armenia, home to founder Hovhannes Avoyan. This gives the startup access to much cheaper engineering talents in the country and neighboring Russia compared to what it can hire in the U.S. To date, 70 percent of the company’s 360 employees are working in engineering and product development (50 percent of whom are female), an investment it believes helps keep its creative tools up to date.

Most of PicsArt’s features are free to use, but the firm has also looked into getting paid. It rolled out a premium program last March that gives users more sophisticated functions and exclusive content. This segment has already leapfrogged advertising to be PicsArt’s largest revenue source, although in China, its budding market, paid subscriptions have been slow to come.

picsart 1

PicsArt lets users do all sorts of creative work, including virtually posing with their idol. / Image: PicsArt via Weibo

“In China, people don’t want to pay because they don’t believe in the products. But if they understand your value, they are willing to pay, for example, they pay a lot for mobile games,” said Jennifer Liu, PicsArt China’s country manager.

And Nam is positive that Chinese users will come to appreciate the app’s value. “In order for this new generation to create really differentiated content, become influencers, or be more relevant on social media, they have to do edit their content. It’s just a natural way for them to do that.”

Morphin instantly Deepfakes your face into GIFs

Want to star in your favorite memes and movie scenes? Upload a selfie to Morphin, choose your favorite GIF, and your face is grafted in to create a personalized copy you can share anywhere. Become Tony Stark as he suits up like Iron Man. Drop the mic like Obama, dance like Drake, or slap your mug on Fortnite characters.

Now after three years in a stealth developing image mapping technology, Morphin is ready to launch its put-you-in-a-GIF maker. While it might look like just a toy, investors see real business potential. Morphin raised $1 million last summer from Betaworks, the incubator that spawned Giphy, plus Founders Fund, Precursor, Shrug Capital, and Boost.vc’s accelerator.

Elon Musk as Iron Man

“We believe in the future you’ll be able to be the main character in your own film. Imagine a super hero movie where you’re a the main protagonist?” co-founder Loic Ledoux asks. “That sounded like science fiction a few years ago and now with AI and computer vision we definitely see our tech going there.”

Ledoux also wants to reclaim faceswaps as something fun rather than a weapon for misinformation. “Deepfakes brought something pretty negative to computer vision. But it’s not all bad. It’s about how you use the tech to give people a new tool for self expressions and storytelling.” And since Morphin re-generates the whole clip from scratch with CGI animation, they look right at a glance but clearly aren’t manipulated copies of the original video designed to fool anyone.

Kanye performs magic

Morphin started three years ago with the intention to build personalized avatars for games and VR so you could be a FIFA soccer player or Skyrim knight. Ledoux had started a 3D printing company to explore opportunities in scanning and modeling when he saw a chance to connect your real and virtual faces. He teamed up with his co-founder Nicholas Heriveaux who’d spent 13 years working on 3D tech while modding games like Grand Theft Auto to insert his avatar and assets.

What they quickly recognized was that “People were just reacting to themselves on the screen”, ignoring the gameplay, Ledoux recalls. “Being able to see yourself as a hero was the underlying sentiment, so we focused on video completely.” Recognizable GIFs became its preferred medium, as they combine familiarity and the ability to convey complex emotions with a template that’s easy to personalize so they stand out.

Morphin’s tech no longer requires 3D scanning hardware and it works with just a regular selfie. You just snap a headshot, select a GIF from its iOS or Android app’s library, and a few seconds later you have a CGI version of yourself in the scene with no watermark that you can export and post. “We wanted it to be super straight forward because we wanted people to relate to the content” Ledoux notes. Over 1 million scenes have been created by 50,000 beta users, and each time a celebrity shares one of the GIFs Morphin has been sending them for marketing, scores of their followers demand to know what app they were using.

Morphin’s 9-person French team will have to keep innovating to stay ahead of avatar-making competitors like the ubiquitous Snapchat Bitmoji, Genies, Moji Edit, and Mirror AI. Facebook, Microsoft, and Google all have launched or are building their own avatar creators. But these typically live as 2D stickers or 3D AR animations you overlay on the real world. By using GIFs as a canvas, Morphin takes the pressure off your visage looking perfect and instead emphasizes the message you’re trying to get across.

The challenge will be for Morphin to become a consistent part of people’s communication stack. It’s easy to imagine playing with it and posting a few GIFs. But iconic new GIFs don’t emerge each day and without a social network to stay for, Morphin is at risk of becoming a merely a forgotten tool. The app might need TikTok-style challenges like submitting the best personalized GIF to match a prompt or a GIF browsing feed to keep people coming back.

Turning Donald Glover into Jay Gatsby

Morphin isn’t racing to monetize yet, but sees a chance to sell longer premium video scenes a la carte or as an unlimited subscription. Ledoux eventually hopes to unlock new forms of storytelling beyond existing GIFs. There’s also a chance for Morphin to highlight sponsored clips from upcoming movies or TV shows. “In the long-term we’re more interested in the analogy of Lil Miquela and how people are interacting with digital characters” Ledoux explains, citing a virtual pop star who’s developer Brud recently raised at a $125 million valuation.

One of the most exciting things about Morphin is that it will allow people to take the spotlight no matter how they look. Often times certain races, genders, and looks are unfairly excluded from starring in today’s most popular media. But Morphin could let the underrepresented take their rightful place as stars of the screen.

Your faithful author Josh Constine dropping the mic like Obama

Snap is under NDA with UK Home Office discussing how to centralize age checks online

Snap is under NDA with the UK’s Home Office as part of a working group tasked with coming up with more robust age verification technology that’s able to robustly identify children online.

The detail emerged during a parliamentary committee hearing as MPs in the Department for Digital, Culture, Media and Sport (DCMS) questioned Stephen Collins, Snap’s senior director for public policy international, and Will Scougal, director of creative strategy EMEA.

A spokesman in the Home Office press office hadn’t immediately heard of any discussions with the messaging company on the topic of age verification. But we’ll update this story with any additional context on the department’s plans if more info is forthcoming.

Under questioning by the committee Snap conceded its current age verification systems are not able to prevent under 13 year olds from signing up to use its messaging platform.

The DCMS committee’s interest here is it’s running an enquiry into immersive and addictive technologies.

Snap admitted that the most popular means of signing up to its app (i.e. on mobile) is where its age verification system is weakest, with Collins saying it had no ability to drop a cookie to keep track of mobile users to try to prevent repeat attempts to get around its age gate.

But he emphasized Snap does not want underage users on its platform.

“That brings us no advantage, that brings us no commercial benefit at all,” he said. “We want to make it an enjoyable place for everybody using the platform.”

He also said Snap analyzes patterns of user behavior to try to identify underage users — investigating accounts and banning those which are “clearly” determined not to be old enough to use the service.

But he conceded there’s currently “no foolproof way” to prevent under 13s from signing up.

Discussing alternative approaches to verifying kids’ age online the Snap policy staffer agreed parental consent approaches are trivially easy for children to circumvent — such as by setting up spoof email accounts or taking a photo of a parent’s passport or credit card to use for verification.

Social media company Facebook is one such company that relies a ‘parental consent’ system to ‘verify’ the age of teen users — though, as we’ve previously reported, it’s trivially easy for kids to workaround.

“I think the most sustainable solution will be some kind of central verification system,” Collins suggested, adding that such a system is “already being discussed” by government ministers.

“The home secretary has tasked the Home Office and related agencies to look into this — we’re part of that working group,” he continued.

“We actually met just yesterday. I can’t give you the details here because I’m under an NDA,” Collins added, suggesting Snap could send the committee details in writing.

“I think it’s a serious attempt to really come to a proper conclusion — a fitting conclusion to this kind of conundrum that’s been there, actually, for a long time.”

“There needs to be a robust age verification system that we can all get behind,” he added.

The UK government is expected to publish a White Paper setting out its policy ideas for regulating social media and safety before the end of the winter.

The detail of its policy plans remain under wraps so it’s unclear whether the Home Office intends to include setting up a centralized system of online age verification for robustly identifying kids on social media platforms as part of its safety-focused regulation. But much of the debate driving the planned legislation has fixed on content risks for kids online.

Such a step would also not be the first time UK ministers have pushed the envelop around online age verification.

A controversial system of age checks for viewing adult content is due to come into force shortly in the UK under the Digital Economy Act — albeit, after a lengthy delay. (And ignoring all the hand-wringing about privacy and security risks; not to mention the fact age checks will likely be trivially easy to dodge by those who know how to use a VPN etc, or via accessing adult content on social media.)

But a centralized database of children for age verification purposes — if that is indeed the lines along which the Home Office is thinking — sounds rather closer to Chinese government Internet controls.

Given that, in recent years, the Chinese state has been pushing games companies to age verify users to enforce limits on play time for kids (also apparently in response to health concerns around video gaming addiction).

The UK has also pushed to create centralized databases of web browsers’ activity for law enforcement purposes, under the 2016 Investigatory Powers Act. (Parts of which it’s had to rethink following legal challenges, with other legal challenges ongoing.)

In recent years it has also emerged that UK spy agencies maintain bulk databases of citizens — known as ‘bulk personal datasets‘ — regardless of whether a particular individual is suspected of a crime.

So building yet another database to contain children’s ages isn’t perhaps as off piste as you might imagine for the country.

Returning to the DCMS committee’s enquiry, other questions for Snap from MPs included several critical ones related to its ‘streaks’ feature — whereby users who have been messaging each other regularly are encouraged not to stop the back and forth.

The parliamentarians raised constituent and industry concerns about the risk of peer pressure being piled on kids to keep the virtual streaks going.

Snap’s reps told the committee the feature is intended to be a “celebration” of close friendship, rather than being intentionally designed to make the platform sticky and so encourage stress.

Though they conceded users have no way to opt out of streak emoji appearing.

They also noted they have previously reduced the size of the streak emoji to make it less prominent.

But they added they would take concerns back to product teams and re-examine the feature in light of the criticism.

You can watch the full committee hearing with Snap here.

Patreon ups its revenue cut, but grandfathers in old creators

Patreon couldn’t survive charging all creators just a 5 percent rake on the monthly subscriptions they earn from fans while building commerce tools like CRMs and merchandise to try to stay ahead of Twitch, YouTube and Google. But it also didn’t want to screw all its loyal early creators.

So today, Patreon is overhauling its pricing. Any creator can still get a 5 percent rate, but just for a Lite version without bonus tools or different fan tiers. All of Patreon’s extra features will now be in the Pro plan, with an 8 percent rate, but with existing creators grandfathered in at 5 percent. And the new Premium enterprise plan for 12 percent (9 percent for existing creators) will offer full-service merchandise sales, multi-user team accounts and dedicated customer support.

If you want the lower grandfathered rates, you’ll need to join Patreon in the next few weeks before the new rates go into effect in early May.

“With this change, Patreon is a long-term independent company that doesn’t need anyone else. That’s the move we’re making here,” says Patreon’s SVP of Product, Wyatt Jenkins. More sustainable pricing means creators won’t have to fear Patreon selling out in desperation to someone like Facebook that might neglect or exploit them.

Instead, Patreon CEO Jack Conte tells me he wants to balance powerful features with right-sized pricing for different creator types to become the platform-agnostic home for subscription patronage when tech giants are each trying to build their own. “To have a different membership for each distribution platform, that’s not going to work. You need a single place for the bottom of your distribution funnel,” Conte explains.

Balancing rates and resources

Patreon now has 3 million fans paying 100,000 creators more than half a billion dollars per year, and it will cross $1 billion in payouts in 2019 after six years in business. But Patreon was starving on its 5 percent rate, which some venture capitalists tell me is why they passed on its funding rounds totaling $105 million led by Thrive Capital and Index. Now it might make enough to keep the lights on, retain ownership and maybe even earn a profit one day.

Jenkins tells me Patreon spent a year talking to more than 1,000 creators to figure out how to re-price its offering. “People don’t like change. But I think in terms of change, we’re going to be able to invest in the different products in different ways. We can put a lot of horsepower into membership,” he explains. The company didn’t want to screw up like when it changed its payment processing rates a year ago, leading to creator backlash and some exodus. “We unilaterally did something that impacted creators’ patrons. That was the real landmine we stepped on.”

Patreon’s new rates

What Patreon discovered was some creators, especially individuals and hobbyists, didn’t care for bells and whistles. They wanted cheap and easy recurring payments so they can focus on their art, so Patreon made the 5 percent Lite plan that strips out the extra features but keeps the old rate

More serious videographers, illustrators, comedians, and pundits wanted to offer different price tiers for different levels of exclusive content. They need analytics, special offers, integrations with other productivity and commerce apps, and priority customer support when things break. That’s what creators will get for 8 percent, unless they they’re grandfathered in at 5 percent.

But Patreon also found there were whole media organizations with 50 employees built atop its patronage platform. They needed to be able to share accounts and get immediate support when necessary. Meanwhile, tons of creators see merchandise as a powerful way to lure in fans who want signed photos, stickers, and other swag each month. “85 percent of our creators tell us we need merchandise. ‘We spend our days in the post office licking stamps. You can get great negotiation leverage since you have scale, so why aren’t you helping us with this?’ We can’t build that on 5 percent” Jenkins tells me. They’ll all pay the 12 percent Premium plan price unless grandfathered in at 9 percent. Patreon will in return process, pack, and ship all their merchandise.

Read a deep dive of Patreon on Extra Crunch

Patreon is also changing its payment processing fees to make sure it doesn’t overpenalize smaller contributions like creators’ popular $1 per month tiers. Now all transactions over $5 incur a 2.9 percent and $0.30 fee similar to Stripe’s industry standard, while microtransactions under $5 cost 5 percent plus $0.10. Existing creators get the old rates, and people paying via PayPal from outside the US get hit with an extra 1 percent fee.

The battle for fan subscriptions

Surprisingly, one of Patreon’s most popular creators told me they actually felt bad about being grandfathered in at a lower price, because why should they get special treatment compared to other artists who just might not be as tech savvy. That said, they weren’t going to voluntarily pay a higher rate. “I guess I’m not surprised” Conte responds. “I’ve found that creators are really humble and selfless, always thinking about other people. I can imagine them sayingwhat about these people? Why am I paying less than them?”

If Patreon can power through the rate change without breaking momentum, it could have a bright future. It’s started a patronage trend, but leaked documents show Facebook plans to charge creators up to 30 percent like YouTube already does, and Twitch charges an astronomical 50 percent. But with far more restrictions on content and far more distrust accrued after years of forsaking creators and tense negotiations, Patreon’s neutral platform with the cheapest rate could remain the fan subscription leader at a time when ad revenue shares are proving an inadequate to support turning ones passion into their profession.

Patreon co-founder and CEO Jack Conte

When TechCrunch broke the news that Facebook planned to charge up to 30 percent, Conte says “Honestly, it was relieving but really disappointing in some way. I think competition is good. I hope there are many membership products. I hope they’re successful and [give creators a choice]. Right now, it’s not a choice. Facebook’s product is not usable. The folks that have used Facebook’s product have turned it off. From a competitor standpoint, it confirmed my thought that Facebook doesn’t understand creators.”

That’s also why he hopes that one day, the tech giants might just integrate Patreon rather than compete, and they could each get a cut of subscription revenue.

Looking forward, he says the toughest challenge for Patreon will be building three different products for three distinct types of creators without the infinite wallets of its rivals. “I think Patreon will be raising for a long time” Conte says. That will fund Patreon’s plans for eventual international operations where 40 percent of patrons and 75 percent of creators live. Right now Patreon is only in English and US dollars. But if it can spin up local languages, currencies, and payment processors, Patreon could be where creators around the world go to share with their biggest fans.

misterb&b hits the equity crowdfunding trail to expand into hotels

Homosexuality is illegal in a third of the planet, and in eight countries, it is punishable by death. In the febrile atmosphere of today’s politics, hate crime incidents in the US increased by 17% between 2016 to 2017, according to the FBI.

Over 20 of those incidents were crimes against an individual’s sexual-orientation — the largest increase since 9/11. Similar hate crime statistics have increased in the UK and several other western countries.

It’s strange and saddening to think that men, women, and gender non-conforming people who “travel while gay” are now in a more dangerous – and potentially life-threatening – situation around the world, despite us being well into the 21st Century.

The key to the situation is knowing whether the place you’re staying at will be welcoming or not. There are many incidents where, at hotels, gay travelers have been rejected or forced to book separate rooms, and had to fall back on third-party, unverified, user-generated reviews.

Now, misterb&b, the short-term rental marketplace aimed at the Gay community, has a simple solution. Customers can book an entire home or rent a private room at the home of a gay or gay-friendly host, and with many located in gay-friendly neighborhoods. The startup competes with more home-spun sites like “Gay Home Stays“, however, misterb&b has already raised substantial amounts in VC.

The startup graduated from the 500 Startups accelerator and has raised US$13.5M from institutional investors like Project A and Ventech, and from angels like Joel Simkhai (founder of Grindr, which sold for $300M USD). The marketplace now has 310,000 hosts in over 135 countries, and claims to have 30% revenue growth YoY; with 60% of the business done organically by repeat customers.

misterb&b has now raised over half a million dollars inside a week via Wefunder to fund its expansion. This will allow guests, hosts, and the public to invest in the company’s push to launch its services into the hotel sector.

Investors are buying into a lucrative market. The niche of global gay tourism is estimated to be a $100Bn market, while gay people travel twice as much as other travelers. Its fund-raising may also benefit from the influx of new tech millionaires being created by the upcoming IPOs of Uber, Lyft, Postmates, and Airbnb.

CEO and founder Matthieu Jost says he wants to “build equality into the sharing economy and give back to a community that’s been historically economically marginalized,” providing its community “with the power of part ownership of the company”.

The idea for starting misterb&b was first conceived in 2013 after he had a negative experience while traveling with his partner and didn’t feel welcome by his host. “Six years ago, my partner and I traveled to and booked a room in Barcelona through a third party rental website,” he told me via email.

“Unfortunately, when we arrived there, we were faced with a host who was very much homophobic and asked me if we were seriously going to share a bedroom. This was a very sad thing to have to face. Straight, hetero folks never have to worry about something so humiliating as this while on a lovely vacation; they will never have to think about it or prepare for it.”

“When I returned home I felt dejected, but I felt I had do something to solve this horrific problem – yet common fear – that our community faces. I don’t want my community to be afraid of traveling anymore,” he said.

“We are reaching out to the most passionate people in the community: our hosts and our guests, as well as LGBTQ allies,” said Jost. “We want to provide the opportunity to financially benefit from our successes,” he added.

The crowdfunding is for a new selection of gay-friendly and gay-welcoming hotels that have been selected by the company’s editorial team for their quality, exclusive, and verified reviews from LGBTQ travelers. The idea is that travelers will also be able to connect with each other to explore the city together – especially because there’s safety in numbers.

YC-backed Basement is a social network for close friends only

The past few years have been a bit of a dark age for budding social media startups. Facebook, Instagram, Twitter, Snap and messenger apps took up all the time of their users, leaving little room for yet another social media platform.

But the tide is shifting. Privacy scandals have shaken some users’ faith giants like Facebook, Instagram and Twitter, and users have grown fatigued by the constant onslaught of #content.

Basement, a YC-backed startup, is looking to give users a new, simpler social network.

Basement allows users to only add up to 20 friends on the network. Cofounders Fernando Rojo and Jeremy Berman said they waited around for someone to build something like Basement after seeing their own friend groups migrate most of their communication to messenger apps from Facebook and other social networks.

On Basement, there are no filters or influencers. The hope is that users share with the people they actually want to share with.

It uses a feed-based system for sharing, letting users share content to their 20 friends. Users can also share to a smaller group of friends by tagging them, which limits the viewership to only mutual friends of those tagged.

Users who are friends can see one another’s comments on a mutual friend’s post. However, comments left by non-friends will always appear anonymous.

Alongside the main feed, Basement also has a meme feed, letting users choose from the internet’s top trending memes to share to their friend group.

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Of course, Basement isn’t the first startup to try out the idea of a close-friends social network. Path was founded by Shawn Fanning and Dave Morin in 2010, giving users a photo-sharing and messaging platform that maxed out at 50 friends.

The network grew in the face of competition from Facebook, and at peak had around 50 million users. In fact, Path was raising money at a valuation of $500 million and turned down a $100 million offer from Google in its early months.

But it failed to retain talent, users and momentum. (A controversial privacy scandal in 2012 didn’t help.) In 2015, Path sold to Kakao for an undisclosed amount and was shut down for good just last year.

Rojo and Berman believe timing is more in their favor than it was with Path, but are also targeting a different audience. Whereas Path was aimed both at close friends and family, Basement wants to position itself squarely with young people who are already spending their time in meme-laden group chats.

“One of the challenges is that growth isn’t necessarily as inherently explosive in a micro-network as it would be with a broader social network,” said Rojo. “What’s exciting to us is that if anyone tries to spark up something similar to this, they’ll be one or two years behind. It’s harder to grow a micronetwork, but once it’s bigger it’s much more robust because it’s the place where people turn when they want to connect with their close friends.”

What’s more: Basement promises to never run ads on the platform.

The company plans to mimic the WhatsApp business model, giving users their first year free and then charging an inexpensive subscription after that.