TIME Silicon Valley

How Google Perfected the Silicon Valley Acquisition

Signage outside the Google Inc. headquarters in Mountain View, California on Oct. 13, 2010.
Tony Avelar—Bloomberg/Getty Images Signage outside the Google Inc. headquarters in Mountain View, California on Oct. 13, 2010.

As tech's largest firms grow in scope and age, acquisitions have become an increasingly important maneuver

Correction appended, April 21

In late October John Hanke and several of his co-workers met for a reunion of sorts at Fiesta Del Mar, a Mexican restaurant near Google’s Mountain View headquarters. Hanke, a 10-year Google employee who led initial development of Maps, was once the founder of a small geodata startup called Keyhole that Google acquired in 2004. The fact that the one-time entrepreneur has stayed with the search giant for more than a decade makes him and his colleagues oddities in Silicon Valley. “There are quite a large number of [us] who are still at Google, and I have to say I don’t think anyone expected that when we first came in,” he says.

Google has used acquisitions to expand its workforce and launch new products since before it was a household name. Recently that strategy has become the modus operandi for technology firms in Silicon Valley. Facebook is using its fast-growing cash hoard to take control over sectors both adjacent to its core product (WhatsApp for $22 billion) and far-flung from social networking (Oculus VR for $2 billion). Microsoft, Yahoo and Amazon are doing the same, making big-ticket bets by buying Minecraft developer Mojang ($2.5 billion), Tumblr ($1.1 billion) and video game streaming site Twitch ($970 million), respectively. Even Apple, which long eschewed splashy acquisitions in favor of much smaller, less public buys, says it bought at least 30 companies during the last fiscal year, including the $3 billion purchase of Beats.

Overall spending on tech acquisitions topped $170 billion in 2014, up 54% from the previous year and more than double the amount spent in 2010, according to PrivCo, a research firm that tracks investments in private businesses. As the core of dominant technology companies get larger, they have come to depend on acquisitions not only to broaden their businesses but also to sustain the pace of innovation. “Companies are buying innovation,” explains Peter Levine, a general partner at venture capital firm Andreessen Horowitz. “As large companies need to be competitive and want to increase their footprints in a variety of different areas, one of the best ways to do that is through acquisition.”

The deals are a boon for startups as well. Venture capital is abundant, and companies can rely on investment rather than revenue to keep growing. If it’s not clear how a startup will eventually convert users into revenue, a buyout from a large firm can render that problem irrelevant—or at least less urgent. While investors and founders insist that launching a thriving self-supporting company is still the end-goal in Silicon Valley, “exiting” via a sale rather than an initial public offering can still net a lucrative payout. “It’s almost a goal for some of these companies as they start, to have that exit event,” says George Geis, a business professor at UCLA whose upcoming book, Semi-Organic Growth, analyzes Google’s acquisition strategy over the years.

But while snapping up a startup is now easy, holding onto its key employees is more difficult. Startup founders, who often think of themselves as entrepreneurs before engineers, are notoriously difficult to keep at large firms long. Partly, this is cultural: striking out on one’s own, idea in hand, is a fundamental part of the Silicon Valley ethos. The widespread availability of funding doesn’t hurt, either. That has left firms struggling to keep the expertise they may have spent millions acquiring. “When a firm is making a tech acquisition, they’re buying the talent as much as they’re buying the technology,” says Brian JM Quinn, a law professor specializing in mergers and acquisitions at Boston College.

A TIME analysis of startup founders’ LinkedIn profiles found that about two-thirds of the startup founders that accepted jobs at Google between 2006 and 2014 are still with the company. Amazon has retained about 55% of its founders over that time period, while Microsoft’s rate is below 45%. Facebook, with a 75% retention rate for founders, is beating its older competitors, but the company only began acquiring companies in significant numbers around 2010 or so. Yahoo and Apple, which have both gone on acquisition sprees under new CEOs Marissa Mayer and Tim Cook in the last two years, now have a similar retention rate to Google.

Google stands out among this cohort in large part because of the massive number of acquisitions it’s conducted. Overall at least 221 startup founders joined Google’s ranks between 2006 and 2014. Yahoo, the next closest competitor, added at least 110 founders to its employee roster in that time. Google’s internal calculation of its overall retention rate for startup founders through its history is similar to TIME’s, according to data provided by the company. Apple, Facebook, Yahoo and Microsoft declined to share any information on the retention of founders; Amazon did not respond to a request for data.

An examination of the ways Google tries to retain employees provides a window into the increasingly ferocious battle among the tech sector’s giants to expand through conquest. “Google,” says Geis, “has done a pretty good job—among the best in Silicon Valley.”

‘The toothbrush test’

Even when Google was small, it wasn’t shy about spending. The company’s first startup acquisition, the 2003 purchase of Pyra Labs, forms the backbone of what is today Blogger, an online publishing platform. Since then, many of Google’s most well-known products, including Android, YouTube, Maps, Docs and Analytics, have originated from acquisitions. “M&A has obviously been a huge part of Google—and, I think, Google’s success—for a long time,” says Don Harrison, Google’s vice president for corporate development, who oversees the company’s acquisitions.

Before any deal is finalized, it has to pass what CEO Larry Page calls “the toothbrush test”: is the product something you use daily and would make your life better? “If anything matches the toothbrush test and relates to technology, then Larry has an interest in it,” explains Harrison.

Typically, Google buys occur in sectors where the company has already been experimenting itself. Harrison points to YouTube as a prime example. Google already had a video sharing service called Google Video in the mid-2000’s, but YouTube’s fast-growing user base convinced the firm to offer a then-eye-popping $1.65 billion for the startup, even though it was barely a year old and earned no revenue. Today, YouTube brings in billions of dollars of revenue per year and is the third most-visited website in the world, according to Web analytics firm Alexa.

But the return on investment on an acquisition isn’t only measured monetarily. It’s important to Google and other tech giants that the founders behind ideas worth paying for stick around as well. Harrison says founder retention is one of the significant factors Google measures as part of the “scorecarding” it does to evaluate its purchases. “We hold ourselves accountable to make sure that the founders are able to be successful within Google,” Harrison says. “It’s something that we’re not only working on at the time we buy the company but we work on for years after as well.”

Cash alone can’t convince the top startup founders to join Google. 2014 was the most active year for IPOs in the U.S. since the year 2000, according to IPO tracker Renaissance Capital, and Chinese online retailer Alibaba had the biggest public debut in world history, raising $25 billion in September. “As aggressive as we’re willing to be, we probably can’t match public company premiums right now,” Harrison admits.

So Google tries to find other ways to lure key talent.

‘A True CEO’

For Tony Fadell, the CEO of smart home company Nest, the decision of whether or not be acquired by Google was really a question of how he wanted to spend his time.

Google had begun courting Nest almost from the company’s inception, ever since Fadell showed Google founder Sergey Brin a prototype of the Nest Thermostat at a TED conference in 2011. At the time, Fadell wasn’t interested in a buyout. “I wanted to keep it as a startup as long as possible,” he says.

But as Nest grew, so did Fadell’s logistical headaches. By 2013, he says he was spending 90% of his time on what he calls “back-of-house stuff”: managing finances, talking to investors, wrestling with taxes and fending off patent lawsuits. “There was a lot of selling to multiple entities that we were doing the right thing,” he says.

When Google came knocking again, offering a big payday and the chance to keep Nest’s name brand intact—a key requirement for Fadell—an acquisition seemed more appealing. Now Fadell says he spends 95% of his time focused on product development and key relationships. Nest, meanwhile, has gotten access to resources that would have taken much longer to accrue independently. The company launched in five new countries in 2014, but Fadell thinks they would have only reached two without Google’s help.

In many ways, the Nest acquisition is the ideal scenario startup founders envision when they agree to be swallowed by a larger company. Harrison, Google’s M&A head, calls Fadell a “true CEO” and says Google execs serve more as a board of directors for Nest instead of supervisors. Fadell says he hasn’t had to get formal approval for anything from Google, though he reports directly to Larry Page and meets with the Google CEO a few times per month. “He’s like, ‘Call me when you need me, but this is for you to run,’” Fadell says of his relationship with Page. “He gives us the freedom, so I run with that. Only when it’s really major decisions do I really touch base with him.”

Some founders who don’t quite have Fadell’s free rein are still granted a certain level of autonomy. Skybox Imaging, a satellite manufacturer that Google acquired for $500 million last summer, reports to the company’s vice president of engineering for geo products but maintains separate offices from Google in Mountain View. “We kind of get a little bit of the best of both worlds,” says Ching-Yu Hu, one of the four Skybox founders that now works at Google. “We’re all Googlers now so we have access to all the infrastructure there, but at the same time we’re semi-autonomous.”

The company has experimented with more direct incentives to maintain an entrepreneurial spirit. For a few years in the mid-2000’s Google handed out Founders Awards valued at as much as $12 million in stock to teams that developed successful new products like Gmail and Google Maps. Today awards are a little less explicit, in the form of more traditional of raises or promotions. Google works closely with founders in their first 90 days on the job to insure they’re getting acclimated well, but check-ins on founders’ progress can continue for years, depending on the acquisition.

At the core of Google’s pitch to founders is the opportunity for bountiful resources. Sure, those can be scratched and clawed for independently, but going it alone requires a lot more time, money and luck than hitching your wagon to one of the richest companies on Earth. “It was a pretty compelling pitch,” Hanke recalls of his own deliberations about whether to sell Keyhole to Google. “We could achieve a lot more standing on the shoulders of all that was going on at Google versus trying to do it on our own as startup.”

When Founders Leave

Still, even Harrison admits that not every acquisition goes smoothly. Because California is an at-will employment state, workers can generally be fired or choose to leave at any time. Tech companies try to ensure founders stick around for a while by offering a stay bonus or using “golden handcuffs,” which often meter out the payday for a big acquisition in company shares that vest over several years. Facebook’s acquisition of WhatsApp, for instance, includes $3 billion in restricted stock for WhatsApp employees, but they can’t fully tap into those funds unless they stay at the company for four years.

In some cases, golden handcuffs aren’t enough to keep founders on board. Kosta Eleftheriou joined Google in October 2010 through the acquisition of his keyboard app BlindType, but life at the massive company wasn’t what he envisioned. Eleftheriou says he was relegated to maintaining Google’s stock Android keyboard rather than envisioning ways to improve the product. He left after one month, leaving half of his compensation package for the acquisition on the table (he says the total acquisition price was in the seven figures). Now he’s a founder again, with a new keyboard app called Fleksy that has been downloaded 4 million times.

“It was a mismatch between what I was expecting and what happened,” Eleftheriou says. “I think that was partly due to maybe some unrealistic expectations on my side on how much creative freedom I would have. I was hoping to be part of a bigger picture than just some engineer working on something by themselves.”

As the founder of a small company that didn’t make huge headlines when it was acquired, Eleftheriou’s experience isn’t uncommon in the Valley. “Unless they’re sufficiently large, very few acquisitions continue to run independently,” says Justin Kan, a partner at the venture capital firm Y Combinator and cofounder of Twitch. “Oftentimes founders are rolled up inside another group inside of the company. They can’t make decisions as freely as when they were entrepreneurs. That affects people’s willingness to stick around.”

Sometimes founders simply crave the excitement of starting something new. Uri Levine was the only one of Waze’s three founders who chose not to join Google when the traffic app was acquired for $1 billion in June 2013. Instead he launched a new startup—his sixth—called FeeX, which aims to help people reduce investment fees in their retirement accounts. “Entrepreneurs, they are driven by a passion for change,” Levine says. “As soon as you become part of a large organization, you cannot change anymore.”

Google’s also had some more high-profile misfires. When it made its largest acquisition ever, the $12.5 billion purchase of handset maker Motorola Mobility, Page hailed it as an opportunity to “supercharge the Android ecosystem.” But Motorola’s phones failed to gain traction, the subsidiary racked up $1.4 billion in losses for Google, and the company offloaded the handset division to Lenovo for $2.9 billion in 2014. Harrison defends the deal as a smart acquisition because of the patent portfolio that Google acquired, helping the company defend itself from lawsuits by Apple and Microsoft (Geis, who has studied the transaction closely, called it “a wash” for Google).

The Spree Continues

At Google, at least, there are opportunities for change for some founders who join the company. Hanke, the former Keyhole CEO, spent several years heading up Google’s geo services, but now he’s in charge of Niantic Labs, a separately branded unit that Google bills as an “internal startup.” Hanke’s team develops apps that increase the opportunity for digital interaction in real-world environments, like InGress, a mobile game that requires players to visit physical locations to gain power ups. Android founder Andy Rubin also took on a role far removed from smartphones when he became the head of Google’s robotics division in 2013. (Rubin eventually left Google in October after nine years at the company).

Google is constantly making these kinds of bets on the future, and it needs new blood with fresh ideas to sustain them. The company is currently wrestling with multiple threats to its core business, search, including a declining share of desktop searches and a mobile market where Amazon is stealing product search queries and Facebook is taking ad dollars. If Google is to maintain its steady growth, it will eventually have to tap into a new revenue source somewhere, and that may well stem from an acquisition. The company may view Nest as the key purchase that ensures its future dominance, given Fadell’s perch. “Founders and everyone else at these startups, they want to be businesspeople,” he explains.

And the big businesses themselves? They want to ensure they don’t miss out on the next big thing. “The ability to move quickly in rapidly changing markets is one of the major drivers,” says Geis of the acquisition spree. “If you want to effectively compete and innovate continually, it can’t all be from within.”

Correction: The original version of this story incorrectly described George Geis. He is a business professor at UCLA.

MONEY wage gap

How to Close the Gender Gap in Tech

Ellen Pao leaves the San Francisco Superior Court Civic Center Courthouse with her legal team
Justin Sullivan—Getty Images Ellen Pao leaves the San Francisco Superior Court Civic Center Courthouse with her legal team.

How we define merit could explain women's issues in the tech industry -- and elsewhere in the working world.

From Patricia Arquette’s passionate Oscars battle cry about gender pay disparity to the recent ruling against Ellen Pao in her gender discrimination lawsuit lobbed at Kleiner Perkins, how women fare in the workplace has been a big and often controversial topic recently.

Many people who believe women are treated fairly in the workplace throw out the word “meritocracy” to explain discrepancies in pay and presence in leadership areas. However, that’s becoming a flimsy, throwaway excuse aimed at a complicated issue. In many pockets of American business culture, the very definition of merit may be biased and flawed.

Going negative

The current situation in the tech industry has taken the issues of women in the workplace to new levels of controversy recently. For starters, the number of women in Silicon Valley has been falling precipitously over decades’ time.

For an industry that greases the wheels of human progress, it seems counterintuitive to see such social regression. More and more women have entered the workforce in recent decades, but they’re falling out of techie jobs or appear to be disinterested in entering the area to begin with. There are likely a variety of reasons, some benign, but the brogrammer culture certainly has to be part of the problem.

Regardless of Ellen Pao’s loss in her discrimination lawsuit against Kleiner Perkins — which really aimed smack dab in the middle of Silicon Valley mentality — the trial highlighted how females are often treated differently in workplaces with boys’ club attitudes, sometimes on a constant, grinding basis. Because, hey, having women around might “kill the buzz” (an actual buzz phrase revealed in the trial).

The trial also pointed out common problems that women face, such as the dichotomy between being blocked for being too aggressive versus knocked for not being aggressive enough. Plenty of women feel they have to walk a constant tightrope in monitoring and adjusting their professional behavior so that they can succeed or even be taken seriously, in ways that most men probably couldn’t even dream of.

Women naturally approach things with different temperaments, perspectives, and skills — and as it turns out, their contributions to cognitive diversity tend to be a good thing that shouldn’t be tamped down or altered. Research has shown that diverse groups make better decisions than homogeneous ones, including studies showing higher smarts in teams with more women.

Merit and how you define it

We all know smart females and studies even back that up, so it’s strange that so many women continue to struggle, getting us back to that “meritocracy” argument. In many cases, maybe it’s that we’re dealing with a cookie cutter merit “ideal” in our general business culture — one that has some major flaws.

Take the collective obsession with short-term gains and risk taking (sometimes ridiculously excessive risk taking) in our marketplace. Some business strategies and outcomes look great as big numbers splashed on quarter-to-quarter paper — until they fail, sometimes catastrophically.

Take the period that led up to the financial crisis and the Great Recession. The financial industry (like tech, male-dominated) absolutely incentivized excessive risk taking. In other words, in the near term, dangerous business behaviors that ended up hurting our entire economy had looked like merit at the time.

Some people have theorized that if more women had influence or were able to exert it on Wall Street, the financial crisis may not have happened, or at the very least, its ill effects may have been reduced. That’s because women are known for their more patient approach to business and investing — and their tendency to avoid excessive risk taking. (My colleague LouAnn Lofton covered this topic extensively in her book Warren Buffett Invests Like a Girl.)

I suspect that in many industries and companies, some people who take different and sometimes more prudent approaches could be relegated to the dump of “mediocre underperformers” instead of appreciated for their abilities — which could even include offering checks and balances.

The difference in perspective may also be part of the reason why so many women’s talents go unappreciated — and they end up frustrated with their compensation not to mention their future opportunities.

Minding the gaps

The issues aren’t going away, and the biggest tech companies are dealing with them as we speak.

The first-ever shareholder proposal regarding gender pay equity has been filed at a tech company, for example. Arjuna Capital recently filed a proposal at eBay EBAY INC. EBAY 0.53% , requesting that the tech giant publicly disclose the pay differential between male and female employees and set goals to close such a gap.

Shareholders will be able to vote on the proposal prior to the annual meeting on May 1. While Arjuna Capital’s announcement was quick to point out that the tech giant’s board of directors recommends shareholders vote against the proposal, the truth is, the chance a board would recommend voting for just about any shareholder proposal is about the chance of getting hit by lightning.

That said, the proposal is timely and does speak to a legitimate issue in the workplace. Speaking of gender and compensation, Ellen Pao’s posttrial news headline is her decision to eradicate salary negotiation at Reddit, where she is now CEO. The difference in how men and women negotiate for salary explains some of the pay discrepancy in the marketplace.

EBay got to be the lightning rod for the controversial shareholder proposal, but it actually has one of the highest numbers of female employees when compared to several large tech peers, at 42%. However, they only make up 28% of its leadership and fill only 24% of its actual tech positions. The Atlantic covered breakdowns for a slew of tech giants that — to their credit — have voluntarily made these disclosures on gender and minorities, such as Google GOOGLE INC. GOOG 3.3% , Facebook FACEBOOK INC. FB -1.18% , Twitter TWITTER INC. TWTR -1.19% , and LinkedIn LINKEDIN CORP. LNKD 1.84% .

The figures certainly tell the tale. Many of the companies’ managements are aware of the problems in the area and are looking at ways to try to tackle it, but there’s a way yet to go and an overall mentality to shift.

The win-win mentality

It feels more polite to talk about things like how we define merit and unconscious bias, but there is still a woolly mammoth in the room. That is that there are pockets of real misogyny out there. Recent coverage of situations like last fall’s Gamergate and other troll campaigns targeting females on the Internet show that the worst kind of sexism still exists, and it threatens technology’s greatest gift: giving voice and opportunity to increasing numbers of people of all kinds.

It may be a real sign that women are making so much progress that some men do feel very threatened, and people who feel threatened and afraid can get ugly and hateful. But now is not the time for women to lose hope; it may signal that it is indeed a brighter time than ever for women making headway and smashing glass ceilings.

The truth is, if women start gaining more ground in the workforce, it doesn’t mean men have to lose out. The zero sum game mentality, implying someone always has to lose — which has also permeated our marketplace, in more areas than this — has got to go. If we tackle issues like diversity, innovation, businesses with strong, robust strategies, and overall value creation should skyrocket.

As Warren Buffett said in May 2013, “Fellow males, get on board. The closer that America comes to employing the talents of all its citizens, the greater its output of goods and services will be.”

In other words, that’s a win-win for everyone — and for true meritocracy.

Related Links

 

TIME Television

HBO Renews Veep and Silicon Valley

For a fifth and third season, respectively

Julia Louis-Dreyfus’ term as Veep isn’t over yet. The biting political comedy returned for a fourth season last night, but HBO has already decided to bring the series and Silicon Valley back for a fifth and third season, respectively.

Veep and Silicon Valley are terrific series, and I’m immensely proud that they will return to HBO next year,” HBO Programming President Michael Lombardo said in a statement. “Along with Game of Thrones and Last Week Tonight With John Oliver, both of which have already been renewed for 2016, they give HBO a stellar Sunday night like no other.”

Veep‘s fifth season in 2016 will be its first without creator Armando Iannucci, who announced last week that he was stepping down as showrunner—something he had hinted at in the past. Curb Your Enthusiasm Executive Producer David Mandel will take over.

TIME Television

Silicon Valley Needs to Address the Industry’s ‘Woman Problem’ in Season 2

Frank Masi—HBO Suzanne Cryer in Silicon Valley

After being accused of sexism, the show has an opportunity to skewer the tech world's misogyny

In its first season on HBO, the Mike Judge comedy Silicon Valley successfully lampooned a myriad of real problems in the tech world, from naval-gazing executives to coders competing to create the next app that solves an incredibly trivial first-world problem. But the show failed to address the biggest issue that currently confronts the real Silicon Valley — the one that has made headlines this year from the SnapChat CEO’s misogynist emails to Ellen Pao’s gender-discrimination lawsuit against Kleiner Perkins — institutionalized sexism. It’s a missed opportunity on an otherwise funny and astute show.

Silicon Valley focuses on a group of male coders working on a start-up called Pied Piper. The absence of female characters in the show could be, as those involved with the show have argued, its own commentary on the real Silicon Valley, where only 26% of the computing workforce is female. But since the comedy is so eager to take on so many other problems in the industry, mockery of the “woman problem” seems glaringly absent.

The closest the show gets is in its final episode, when a character jokes that the tech market is usually just 2% women, but at TechCrunch Disrupt, it’s 15% women — a veritable meat market. Unfortunately, this one-liner falls flat later when the only women we meet for any extended period of time at TechCrunch Disrupt are a girl who flirts to get men to code for her and an ex who spreads rumors about the main character.

As a woman watching the show, it’s hard not to notice those missed chances for a joke. In one scene, the executive of tech company Hooli (a sort of Google-Facebook-Apple hybrid) talks about how his employees always travel in groups of five: a tall, skinny white guy; a short, skinny Asian guy; a fat guy with a ponytail; a guy with crazy facial hair; and an East Indian guy. But there aren’t any women in this “pack.” Indeed, in the shot of the Hooli courtyard, it doesn’t actually look like there are any women working at the company at all. While that might be realistic—even at progressive companies like Google only about 30% of the employees are female — it seems like a great setup for a joke that never actually gets made.

What’s worse: at times the show trades in some of the laziest stereotypes about women. The female characters who make brief forays into the main coders’ world include models paid to talk to nerds at parties, a lawyer’s hot assistant used by her boss to impress clients, a visiting girlfriend who becomes the object of lust, an ex who spreads rumors about the main character and a stripper named Mochachino. Mochachino — the only woman of color on the show — rightly points out in an early episode that an app called NipAlert (which does exactly what you would think) was sexist. “She shows her tits for a living, and even she was uncomfortable using it,” the creator of the app says, sighing. The joke is less about this hapless coder being sexist than it is about him being bad at concocting app ideas.

The only female series regular was Monica, investor Peter Gregory’s assistant, who acts as an organizer and (in the final episode) a potential love interest. Monica is good at logistics (checking other people into hotels, offering words of encouragement, apologizing to her boss when his employees fail), but she has few creative ideas or motivations of her own.

In this way, Silicon Valley doesn’t just reflect the world the characters live in — it actually reinforces stereotypes. “HBO has an entire show dedicated to Silicon Valley, and there aren’t any positive images of women on that,” Reshma Saujani, the founder of the Girls Who Code program, told TIME last year. She added it to a list that included The Social Network and Jobs of entertainment about the start-up world devoid of female coders. “What it shows is the stereotypical image of what it looks like to be an entrepreneur. Young women who watch these things hear: ‘You don’t look like the kind of person who succeeds. This isn’t for you. You’re not good enough.’ And it’s causing them to opt out of these fields.”

Just 7.7% of characters who work in computer science in TV and film are women, according to research conducted by the Geena Davis Institute on Gender in the Media. Advocates for gender equality in tech argue that you can’t be what you can’t see: if pop culture versions of the tech world show that these job opportunities are only available to men, that’s what young people who watch these shows and movies will think.

It’s not the responsibility of a show to defy stereotypes, nor does Silicon Valley have an obligation to inspire young girls to become coders. But people actually defended Kleiner Perkins during the Ellen Pao trial by saying, yes, it’s sexist but not as sexist as other venture-capital firms. That already sounds like a punch line.

The show’s writers are aware of the problem. That’s probably why actress Suzanne Cryer will replace the late Christopher Evan Welch (who played investor Peter Gregory) as the main characters’ boss this season. Cryer assured Variety that her character “doesn’t operate the way women normally operate on television” and will defy convention. “She operates completely cerebrally,” she said. “She has no social skills. I mean, literally the opposite of what women are supposed to do … she’s a math wonk, really. So more than like a geek, she’s a nerd I’d say. She’s a hard-core math nerd and she doesn’t get distracted by emotions.”

That character already sounds way more nuanced than Monica or Mochachino. But what will be more important is what they do with the character. Will she face sexism? Did she have a hard time getting to where she is? Will she have any backstory at all? Will she invest in start-ups that employ female coders? In the show, Pied Piper is presented as revolutionary — accomplishing technological feats that no other company has before. Silicon Valley has an opportunity to be revolutionary in its own way too, effecting real-world change through its representations of women. If only it would take the opportunity to do so.

MORE: Cracking the Girl Code: How to End the Tech Gender Gap

TIME Innovation

Five Best Ideas of the Day: March 30

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Blue-collar jobs are coming back, and pay well. But women are missing out.

By Mitchell Hartman in Marketplace

2. Ikea is known for affordable, flat-pack furniture. Now they’re selling the U.N. flat-pack refugee housing.

By Amar Toor in the Verge

3. With an eye on the White House, politicians won’t admit it, but the ethanol mandate is terrible policy.

By Josiah Neeley in the American Conservative

4. With billions in profits, tech giants must lead the charge against inequality in Silicon Valley.

By John D. Sutter in CNN

5. Can better customer service make primary medical care affordable and sustainable?

By Margot Sanger-Katz in the Upshot

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Television

The Winklevoss Twins Will Have a Cameo in the New Season of Silicon Valley

Winklevoss Twins Facebook Settlement Appeal Begins
Noah Berger—Bloomberg/Getty Images Cameron Winklevoss, right, and his twin brother Tyler leave a federal appeals court in San Francisco, California, U.S., on Tuesday, Jan. 11, 2011.

The Bitcoin investors who once accused Mark Zuckerberg of stealing their idea for Facebook will play themselves

Cameron and Tyler Winklevoss have already been portrayed onscreen once, but this time around they will be playing themselves.

The twin brothers, famous for suing Facebook CEO Mark Zuckerberg over claims that the social network was their idea, will have a cameo in the second season of HBO comedy Silicon Valley, according to the Hollywood Reporter.

The Winklevoss twins, now big investors in Internet crypto-currency Bitcoin, and were portrayed as characters in 2010 film The Social Network, in which they were both played by Armie Hammer.

In Silicon Valley, however, they will be appearing as themselves, although it is unclear how they will intersect with the show’s fictional tech start-up Pied Piper and its five founders, who are the central characters.

The show has incorporated several celebrities from the technology sphere, with TechCrunch founder Michael Arrington, Re/code editor in chief Kara Swisher and even Google chairman Eric Schmidt making appearances in its inaugural season.

HBO recently said Evan Spiegel, creator of the photo-sharing app Snapchat, will also have a cameo in the second season.

[THR]

TIME Autos

How Silicon Valley Suddenly Fell in Love With Cars

Tesla Model S.
Tesla Tesla's battery makes it cleaner than gas-guzzling alternatives—but think about what else it's made of.

The last great remaining American preoccupation tech hasn't yet tackled is the automobile. That's about to change

“The American really loves nothing but his automobile,” Gavin Stevens says in Faulkner’s Intruder in the Dust. “Because the automobile has become our national sex symbol.” Given that longtime infatuation, you’d think Silicon Valley’s tech companies would have been eager to get into the auto industry before now. Instead, many are surprised that it’s happening at all.

Ever since the personal computer became mainstream, Silicon Valley has been inventing or reinventing new gadgets: the music player, the phone, the computer itself, first as a portable, now as a tablet. Amazon remade the shopping mall and put it on a screen. Netflix and YouTube subverted the TV set, and now Google’s Nest is going after other household appliances. This year, Apple is reworking the wristwatch, casting tech as jewelry.

The last great remaining American preoccupation that tech hasn’t yet tackled is the automobile. Much of this has to do with logistics–selling phones or music players is child’s play next to the expensive, highly regulated business of manufacturing cars–but there’s also a historical mindset at work. Detroit, with its combustion engines and metallic gears, was the epitome of an analog era that Silicon Valley displaced. The car was an anachronism, however beloved.

No longer. Google has been working on self-driving cars for a number of years. Uber has started looking into them as well. Now, according to the ever-churning Apple rumor mill, the Cupertino giant is working on a stealth car project. For tech companies, the automobile has gone from a super-sized docket to park a smartphone while you drive to a gadget that can be reimagined from the ground up with digital technology.

The sudden shift is happening for a few reasons. First, with PCs, tablets and smartphone markets close to saturation, tech giants are looking for new markets to invade with their innovations. Second, the car market seems ripe for a makeover. American automakers like GM may be reviving post-financial crisis, but the U.S. looks to have reached “peak driving:” Annual miles driven per person is down 9% from 1995, and even more among young drivers.

But the biggest single reason tech suddenly loves the car is Tesla. The company founded by Elon Musk in 2003 to make electric cars has become much more: It has fused the automaker with the tech company, and not only built a cultural bridge between Detroit and Silicon Valley but showed that both were converging toward each other.

Tesla was a wake-up call to automakers that had grown complacent about innovation. It showed that technology was a powerful way to differentiate a particular model from the herd, and that if automakers wanted to reach out to younger consumers, they should embrace the kinds of technology they enjoy. Soon, you began to hear auto executives talk about “smarter cars” and roadways as “connected networks” structured like the Internet (15 years ago, that simile ran mostly in the opposite direction).

Read more: How Apple Is Invading Our Bodies

Google CEO Larry Page has said his interest in driverless cars stems from the inefficiency of roadways, which not only cost lives but waste worker time in traffic jams. (It doesn’t hurt, either, that driverless cars could offer commuters more opportunity to look at Google ads.) Uber is also researching self-driving cars to lower costs for its passenger service as well as a planned delivery service.

The loudest buzz surrounds Project Titan, a rumored Apple car that in reality could be pretty much anything: an electric vehicle, a leased minivan, a driverless car, a ploy to acquire Tesla, a bluff to pressure automakers into putting its CarPlay software in their vehicles, or a clever Apple hoax trolling Apple rumor-mongers. Wall Street analysts, though, think an Apple car is the likely bet, and if so the marriage of Detroit and Silicon Valley is a matter of time.

If nothing else, Apple’s rumored entry into automobiles seems to have turned up the heat. Last week, Musk said Tesla would start offering “autopilot” technology in its cars this summer. Google said its more ambitious driverless-car system would be ready for broad consumption in five years.

But the dark-horse in this new race may be Samsung, which according to Thomson Reuters has “has the largest and broadest collection of patents in the automotive field including a very large interest in batteries and fuel cells for next generation vehicles.” If automobile technology boils down to a patent race, Samsung may end up having an edge. Samsung even has some history in car manufacturing.

The end goal of these tech aspirations in the automotive industry may well be partnerships with established manufacturers. After all, what company is dying to break into a low-margin heavy industry? Many auto executives scoff at the idea that jumping from smartphones to cars is good idea. They may be surprised. Cars are just another form of technology, albeit one in need of an upgrade. And who is better positioned to upgrade them Apple or Google?

TIME Companies

Steve Jobs Turned Down a Partial Liver Donation From Apple CEO Tim Cook

Revelation is contained in a new Jobs biography

During the final years of Steve Jobs’ life the former Apple CEO was in desperate need of a liver transplant but refused his successor Tim Cook when he suggested a partial one, reveals a new biography set for release on March 24.

In the upcoming book Becoming Steve Jobs, written by Brent Schlender and Fast Company executive editor Rick Tetzeli, Cook reportedly went through a series of tests and discovered that a partial liver transplant was feasible, but said Jobs heatedly turned him away.

“Steve only yelled at me four or five times during the 13 years I knew him, and this was one of them,” Cook says in the book.

Read the full excerpt here and check out the April edition of Fast Company for more.

[Fast Company]

TIME Smartphones

Why Xiaomi Terrifies the Rest of the Tech World

Xiaomi Mi Note
ChinaFotoPress via Getty Images Lei Jun, chairman and CEO of China's Xiaomi Inc. presents the company's new product, the Mi Note on Jan. 15, 2015 in Beijing, China.

China's top smartphone maker has set its sights on tech's biggest companies

You can tell a lot about the state of the tech industry by looking at the company that’s currently scaring the crap out of everybody. A decade ago, it was Google. More recently, Facebook became the 800-pound gorilla in social media and photo sharing. This year, the heavy is one that was unknown in the US until a year or so ago: Xiaomi.

Out of countless smartphone makers that have emerged to build on the Android mobile operating system, Xiaomi has not only broken apart from the herd, it’s quickly given other smartphone manufacturers a run for their money. Xiaomi’s share of the global smartphone market rose to 5.3% in late 2014 from 2.1% a year earlier, according to Statista.

A big reason for Xiaomi’s sudden success is that it designs its own hardware as well as the firmware that rides on top of Android’s open-source software. Xiaomi’s MIUI interface evokes the speed and sleekness of an iPhone or a high-end Samsung phone, but often retails for half the price. Most Android phone sellers, by contrast, rely on similar design templates offered by third-party manufacturers like Foxconn.

Xiaomi’s simple strategy of high-quality gadgets at lower prices is threatening the business models of some of the biggest names in technology, including:

Samsung. In China, where the bulk of Xiaomi’s phones have been sold to date, the company’s market share has risen to 15% from 5% a year earlier. Samsung’s, meanwhile, has fallen to 12% from 19%. According to IDC, Samsung’s smartphone shipments in China declined by 22% in 2014, while Xiaomi’s surged 187%.

Samsung has been a big presence in other emerging economies, but Xiaomi announced in January that it would be pushing aggressively into Brazil, Russia and other emerging markets. After launching in India in July, Xiaomi already has a 4% market share. And the company raised $1.1 billion in December, proceeds that could go to building manufacturing and marketing presences in new countries.

Apple has emerged as the predominant smartphone company at the high end of the market. So with Xiaomi offering stylish phones at lower prices, Samsung may find itself pinched between iPhones and low-cost commodity Android phones. Now Xiaomi is gunning for another core Samsung market: TV sets. In November, Xiaomi paid$200 million for Midea Group, a maker of consumer electronics, and said it would spend $1 billion to build out its TV ecosystem.

GoPro. Xiaomi is also planning on launching a site to sell its goods in the US. But for various reasons like the complex subsidies US carriers pay to offset sticker prices, Xiaomi won’t sell smartphones here but instead will sell its fitness tracker, headphones and other accessories.

Earlier this month, Xiaomi said it would also start selling the Yi Camera, a 1080p high-definition action camera that sounds a lot like the best-selling Hero sold by GoPro. Only the Yi will sell for $64, or about half the price of the Hero. The Yi even improves on the Hero with a 16-megapixel camera shooting 60 frames a second. So again, high-end quality at half the price.

GoPro’s brand is much stronger in the US than Xiaomi’s. If that changes, GoPro faces a tough choice between slashing the Hero’s price or watching its market share erode. GoPro’s stock has already lost 39% this year amid concerns about whether it can maintain its torrid growth pace. The bigger the splash that Xiaomi’s camera makes in the US, the more those concerns will grow.

Google. As a thriving smartphone company built on Android, you’d think Xiaomi’s success would be a positive for Google, which still makes the vast bulk of its revenue from online ads. But Google’s services and mobile apps are either blocked or hamstrung in China, so local companies like Alibaba and Baidu have long since learned to work on Android phones without Google’s API.

Google has never had a strong footprint in China. What isn’t clear is what role Google apps will play on Xiaomi’s phones sold outside of China. On the one hand, Google takes a hard line on companies that use Android without its services. On the other, Xiaomi VP (and former Googler) Hugo Barra indicated last week that Xiaomi may not export to new markets the app store it uses for its Chinese customers.

Apple. Given the popularity of the iPhone 6 in China and across the globe, Apple seems to be immune for now to any threat posed by Xiaomi. But glance a few years down the road and it’s not hard to imagine the Chinese manufacturer competing with the best products offered by the reigning king of Silicon Valley.

Xiaomi’s MIUI is several years younger than Apple’s iOS. But despite Apple’s early lead, Xiaomi has quickly created an interface that is not only drawing more comparisons with the look and feel of iOS, it’s designed to be used on a wide array of devices from phones to tablets to wearables.

Xiaomi’s expansion trajectory also looks a lot like Apples: a smart TV console that streams digital content, a fitness tracker that could easily mature into a smartwatch, headphones that offer stylish looks and gold-colored metal. There were even reports this week of a Xiaomi electric car–spurious, to be sure, but it fits the idea that the most innovative companies are interested in the car market.

Apple’s earlier iPhones suffered phases when their features weren’t terribly distinctive from other top phones on the market. If that happens again, and Mi’s user experience comes closer to that of the iPhone, Xiaomi could steal some of Appple’s market share. In the meantime, the two emerging rivals have already taken tothrowing shade on each other.

Xiaomi is sure to face speed bumps as it races forward, like the patent suits it’s already facing in India. Competitors may use patent litigation to slow Xiaomi’s global expansion, but then again, a company worth $45 billion and planning an IPO can easily raise enough cash to buy a substantial patent portfolio of its own. Beyond that, it’s hard to see what will slow Xiaomi’s steady march ahead.

Read next: The Biggest Misconception About Apple

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TIME Silicon Valley

Woman at Center of Silicon Valley Sex Discrimination Trial Takes the Stand

Ellen Pao
Eric Risberg—AP Ellen Pao leaves the Civic Center Courthouse on Feb. 24, 2015, in San Francisco, Calif.

Ellen Pao says she was passed over for senior positions because of her gender

A woman behind a closely watched trial over gender bias at a well-known venture capital firm in Silicon Valley took the stand on Monday to share her side of the story.

Ellen Pao, who will testify again on Tuesday, said Monday that a male colleague at the venture capital firm Kleiner Perkins with whom she had an affair became hostile toward her when she broke things off.

Pao is seeking $16 million in damages in her suit and says she was passed over for jobs and retaliated against because of her gender. Kleiner lawyers say the company is simply a meritocracy, and employees are judged purely on the strength of their work.

Previous witnesses have tried to paint Pao as quiet and inarticulate, USA Today reports, but on the stand Monday she came across as calm and a good presenter.

Pao said when she was first offered a job at Kleiner Perkins, one of Silicon Valley’s largest firms, she turned it down because it didn’t meet her qualifications. She was later offered another position, but says she was given the boot from the firm in 2012 after complaining about gender bias.

The suit has highlighted the lack of gender diversity in Silicon Valley, and the “bro-grammer” culture that exists there as a result.

[USA Today]

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