TIME Startups

How LearnVest’s CEO Raised Her First $1 Million in 6 Months

"There was no pitching. People just got it."

The day the LearnVest website went live is a day burned into Alexa von Tobel’s memory. It was New Year’s in 2010, and von Tobel was on a ski vacation with her family. She had spent the last few weeks building a website brimming with financial advice. There was just one problem.

“The site crashed because we had just so many people sign up really quickly,” von Tobel says. “I was actually literally at the top of a mountain trying to get down it on skis, and I am lucky I don’t have a concussion because that’s how quickly I was going to try to get down and get a computer to see if I could fix it.”

Von Tobel has only picked up speed since then. As the 31-year-old CEO of LearnVest, she has built one of the fastest growing financial planning companies in the country. The website now includes a suite of tools to visualize a budget — what comes in and what goes out. But those charts are just a conversation starter. Von Tobel’s grander ambition is to pair each of those users with one of nearly 45 certified financial planners she has waiting by the phones. The tools are free. Access to a financial planner, however, comes at a starting price of $19 per month after a $299 setup fee.

While LearnVest keeps the number of paying subscribers a closely guarded trade secret, one thing is publicly known — it has money to burn. Von Tobel raised $75 million for the company in just four years. By her own admission, she had no trouble persuading investors to part with their money. “There was no pitching,” she says. “People just got it.”

At this point any entrepreneur who’s spent years fighting for a financial lifeline might be wondering how LearnVest appeared to spring from von Tobel’s head fully formed. The truth is, she had been wrestling with the subject of financial literacy since adolescence. She credits her success, so far, to this slow-building fixation. “It’s why I get out of bed every single day,” she says, “because this is such an enormous epidemic that we can solve, because it’s math.”

Von Tobel’s first encounter with money matters came as a dramatic shock. Her father died suddenly when she was 14, leaving her mother to manage the family’s finances. Her mother’s scramble to get up to speed left a deep impression on von Tobel, who was even more surprised when she graduated from Harvard with a first-rate education while still feeling incapable of answering the most basic questions about her finances. As she widened the conversation from family to friends and coworkers, she found that most everyone around her, regardless of their education, seemed to be largely clueless when it came to managing their own money.

“It would literally be almost recipe-like the way people were managing their finances, ‘My mom taught me this trick and so this is what I always do,'” she says.

She also was struck by the dearth of financial advisors willing to enlighten her family. Personal advisors have a stubborn tendency to chase after the wealthiest 1%. Merrill Lynch, for instance, raised the minimum account balance for its advisory service from $100,000 to $250,000 in 2012. Smaller fish need not apply. To von Tobel, the market was moving in exactly the wrong direction.

“It would be the equivalent of if doctors overnight said, ‘We’re only going to see healthy people,'” she says.

So she began taking notes, committing to paper everything she could learn about personal finance. “It was in gibberish,” she says. Still, it was passionate gibberish, sprawling across 75 pages by the time she was in Harvard Business School in 2008.

“I thought about answers to all the tough questions,” she says. “What’s the business model going to be? How does it get out there? Who are the competitors? How do you actually make money?” In short, she had asked the very same questions skeptical investors might lob her way.

The more questions she answered for herself, the more eagerly she awaited graduation day. Her studies began to feel like a diversion. So von Tobel made what she calls a “terrifying” decision — she counted up her savings and dropped out of school the same year she began to spend roughly nine months on LearnVest, “in the heart of a recession,” she notes, “with no salary, no income and trying to go build a dream.”

But the gamble paid off. Within six months, von Tobel had secured $1 million in seed money. She had convinced investors that she could not only tap a hugely underserved market, but that she could dispense advice at a cost lower than any existing advisory service.

“You go to a mom and pop certified financial planning firm,” she says, “you’re paying for that overhead, for that parking lot, for that mahogany desk, for that receptionist at the front,” she says. LearnVest, on the other hand, is just a website. It shifts the data entry onto users and the number crunching onto automated software. As a result, her staff can focus on dispensing advice in unprecedented volumes. Von Tobel says LearnVest is aiming to have a single financial advisor serve upwards of 1,000 customers, a ten-fold increase over the typical small firm.

It’s an ambitious play for efficiency, and LearnVest will have to grow rapidly to fulfill its promise to investors. But von Tobel says investors are willing to take a risk on the right person, even a mid-20’s dropout whose only credential is 75 pages of gibberish.

“I always tell other entrepreneurs, don’t worry about, ‘How old am I? Have I done this before?” she says, before shifting to the questions that really matter: “Do you know the most about this space? Have you thought tirelessly?”

TIME Investing

This New App Makes It Way Cheaper to Trade Stocks

Robinhood
Robinhood Robinhood

Robinhood wants to convince Millennials to dip a toe into the stock market

Next up for disruption by the Silicon Valley set: Wall Street.

A new startup is aiming to convince Millennials to dip a toe into the stock market by making it cheaper and easier to buy securities. Robinhood, a new mobile-first brokerage that launched its iOS app today, lets users buy U.S.-listed stocks without paying a commission, a cost that typically runs individual investors $7 to $10 per trade.

The app’s slick interface lets users buy securities, track stock performance and keep tabs on their overall portfolio. Users don’t even have to maintain a minimum account balance, a common requirement of similar stock-swapping services.

“People in our age group were not being exposed to what we consider a pretty useful tool for building your wealth,” says Robinhood co-founder Vlad Tenev. He and co-founder Baiju Bhatt launched Robinhood in beta for a few thousand users earlier this year. Already half a million people have signed up to request the app, indicating a heavy appetite for cheaper trades. These users will begin being on-boarded to the app today, and newcomers can download the app to join the waitlist and view different stocks.

The company, which has netted $16 million in venture funding from backers like Andreessen Horowitz and Google Ventures, plans to make money by letting investors trade on margin (basically issuing loans to let customers buy additional stock).

Whether or not young investors really need a service that lets them buy stocks “as quickly as you can call an Uber,” as Bhatt puts it, is an open question. Most active stock pickers fail to outperform the overall stock market. During the first 9 months of 2014, only 9.3% of actively managed mutual funds outperformed the S&P 500, according to the Wall Street Journal — and those funds are managed by people whose job is to be good at picking stocks.

Tenev argues that stock-picking is a good way for young people to learn about investing. “It makes a lot of sense for a first-time investor who is an early adopter of technology and discovers companies through using their products and services,” he says.

That advice flies in the face of a lot of collective wisdom about investing, including from famed businessman Warren Buffet. But for those that are still confident they can beat the market and would like to attempt it more affordably, Robinhood will also be available on Android and on desktop soon.

TIME Startups

This Startup Wants to Make Your Next Move Less of a Nightmare

Moving
Man moving boxes Alistair Berg—Getty Images

Updater helps you manage all those address changes and utility switches

Moving to a new home can fill homebuyers with excitement—and dread.

The laundry list of companies that a person needs to inform about a move can feel daunting. Forgetting just a couple can mean your magazine subscriptions are lost in the mail, your bank statements wind up in a stranger’s mailbox or your lights won’t turn on the day you arrive in the new house. A new startup is aiming to help avoid these headaches by streamlining the entire process.

Updater, based in New York, allows people to quickly inform magazines, charities, alumni associations and other types of businesses of their change of address all at once from a single Web interface. Users can quickly see what utility companies offer services in their new neighborhood. The website can also help people find moving companies to make the physical move easier. Overall, the company claims it can save users five hours worth of paperwork during the moving process.

Company founder David Greenberg got the idea for Updater, unsurprisingly, when he was moving within Manhattan. “The process was just incredibly inefficient,” says Greenberg, who was a merger-and-acquisition lawyer before becoming a CEO. “I was literally making a list of the 20 businesses I need to reach out to.”

Founded in 2011, the company initially marketed its services to individual movers, but failed to gain much traction. But Greenberg had a breakthrough in 2013 when he instead decided to sell the service to real estate brokerages, which could in turn get their agents to offer it to all of their customers whenever they moved.

Updater partnered with the National Association of Realtors, which placed the startup in its tech incubator and eventually participated in an $8 million funding round as well. Courting realtors has proven to be a winning strategy: Updater is now being used at 150 real estate brokerages across the country by more than 15,000 real estate agents. In total, about 50,000 moves are now being aided with Updater each month, which the company says comprises about 5% of the total moves in the United States.

The company is still unprofitable, but Greenberg says he expects to close another funding round in the first half of 2015 and double the company’s market share by the end of the year.

Updater is one of a growing number of tech startups aimed at bringing more efficiency to the world of real estate, which can seem oddly archaic to young homebuyers used to used to making all kinds of purchases via the Internet.

“The new homebuyers who are young are really expecting a great client experience and they’re expecting great technology to help them through the transaction,” Greenberg says.

For now, the range of businesses that can be used through Updater is limited. You can’t transfer your power bill with Con Edison, for instance, or change the address on your American Express card. The startup also doesn’t handle especially sensitive info, like bank account numbers or social security numbers, which means some updates still have to be made the old-fashioned way. But the company has 10,000 businesses on board so far and expects to lure in more big fish as its user base grows. It’s also beginning to work with property managers so apartment renters can start having more seamless moves as well.

Agents say the tool is useful for keeping homebuyers happy even after signing on the dotted line, which can help boost referrals.

“Buying a home is so exciting, but once the reality sets in that you have to move all your stuff, it completely kills the joy,” says Anne Marie Gianutsos, the digital director for the real estate brokerage Houlihan Lawrence, which uses Updater to help movers in the suburbs north of New York City. “It’s stressful. Anything that’s going to make life easier for our clients, we are thrilled to offer to them.”

TIME Startups

5 Places Where Uber Is Fighting for Its Life Right Now

An illustration picture shows the logo of car-sharing service app Uber on a smartphone next to the picture of an official German taxi sign in Frankfurt, September 15, 2014.
Kai Pfaffenbach—Reuters

New Delhi's ban against Uber is just one fight the ride-sharing service is engaged in

Ride-sharing service Uber is one of the most well-funded startups ever with a value of $41.2 billion. It’s war chest will come in handy as it does battle with local governments around the world.

New Delhi’s Transport Department has banned Uber after one of its drivers was accused of raping a passenger, challenging Uber CEO Travis Kalanick’s ambitions to expand in developing countries. The driver, Shiv Kumar Yadav is suspected of driving a woman in her late 20s from Delhi to a seculed spot Friday night and assaulting her. A subsequent physical examination showed signs of a “fierce sexual assault and rape,” the New York Times reports.

Uber did not carry out background checks on Yadav, register his residential address, nor register his vehicle as a cab or install a GPS in the vehicle, which is required for commercial taxis, New Delhi police said. “We will do everything, I repeat, everything to help bring this perpetrator to justice and support the victim and her family in her recovery,” Kalanick said in a statement.

It’s not the first time that Uber drivers have been accused of sexual assault, and in San Francisco and Los Angeles, district attorneys have accused the ride-sharing service of misleading customers into believing they ban drivers who have ever committed criminal offenses.

And it’s also not the first time government authorities have banned Uber. The ride-sharing service has faced bans at one point or another in cities across the world, and many disputes with authorities remain unsettled. Here are five of the many places where Uber is facing government pushback—right now.

In Portland, Ore. Uber began operating illegally on Friday night and could face penalties, according to the city’s transportation bureau, including $1,500 for being caught the first time, $2,500 for a second offense and $5,000 thereafter. Portland isn’t happy: the city’s transportation commissioner Steve Novick said, “They think they can just come in here and flagrantly violate the law? This is really amazing. Apparently, they believe they’re gods.”

A court challenge against Uber in the Netherlands resulted this week in an injunction against the ride-sharing service, with a court saying the company can’t work with drivers who don’t have a license. Licensed taxi drivers, and drivers who don’t seek payment, can still drive for the service.

Uber has always faced a tough market in Germany, where the standard taxi cab is a Mercedes-Benz luxury sedan and Uber fancy cabs don’t stand out. And in September, courts in Berlin and Hamburg ruled the company did not comply with German laws and officially banned the service from using unlicensed taxi drivers.

Toronto authorities argued last month that Uber is “jeopardizing public safety” and is getting ready to fight the ride-sharing service in court.

Nevada issued a statewide ban against Uber last week, with a court arguing the company operates like a taxi business. Uber halted operations in the state.

Read next: Uber CEO Promises to Make Company ‘More Humble’ As it Raises $1.2B

TIME Companies

Why Yelp’s CEO Turned Down Google

Key Speakers At 2014 The DreamForce Conference
Jeremy Stoppelman, chief executive officer and co-founder of Yelp Inc., smiles during a panel discussion at the DreamForce Conference in San Francisco, California on Oct. 13, 2014. Bloomberg—Bloomberg via Getty Images

Read Yelp CEO Jeremy Stoppelman's advice for upstart entrepreneurs

Jeremy Stoppelman spent his teenage years leafing through business magazines and dreaming of running his own business. Today, he’s at the helm of Yelp, the $4 billion review website that’s quickly become the digital version of the Yellow Pages and now attracts about 139 million unique visitors per month.

Stoppelman sat down with TIME via phone to discuss his less-than-glamorous first job out of college, his job interview with Elon Musk, and why he turned down a buyout offer from Google. Below is an edited version of the conversation:

TIME: Tell me about your first job out of college

Stoppelman: I got recruited off-campus by @Home Networks. That was I believe the first cable Internet provider. I was a software engineer on their network operations team.

TIME: What was that job like?

Stoppelman: No fun. It was a fairly dysfunctional team. We were working on a product that you use to provision new customers as they sign up for cable or Internet. The project had been ongoing for multiple years when I got there. It actually never launched. I actually left there after about four months.

I realized pretty quickly that the team was not super well-managed . . . I just found myself without a whole lot to do after a few weeks. I’d kind of run through all the projects that they had for me, and I didn’t really know how to allocate my time. I figured it was time to start looking for something more exciting.

TIME: So then you went to PayPal, right?

Stoppelman: I started interviewing randomly. It was around late ‘99, early 2000. The dot-com bubble was still very much under way. If you were a software engineer, recruiters were calling constantly, so I just started going out on interviews. I found my way to X.com, which was an online bank started by Elon Musk [that later became PayPal].

I’d never met a 28-year-old successful entrepreneur on his second venture. I’d never met anyone with ambitions like that. He was telling me right then and there that we were going to take down Visa and MasterCard if everything went our way, and he really seemed to believe it. And that was really exciting.

TIME: When you were there at PayPal, there were a lot of people there who went on to be incredibly successful. What were the biggest lessons you learned working with those people?

Stoppelman: It was a group of really smart individuals. One of the things I took away from that experience was how if you give a really talented person a stretch opportunity, how far they could really take that. So few of us had what would be called preexisting experience. We were trying to do things we didn’t necessarily know how to do. Even building a consumer Internet site at that time, that was a completely novel idea.

That team, especially the management team, gave me the opportunity to become the VP of engineering all while I’m in my early-to-mid 20s, which is very unusual I think in corporate America. And I wasn’t the exception. There were a number of people around that organization that were very young but were very high-potential and were given the opportunity to stretch and grow with the company. When I later went on to start Yelp, I tried to make sure that similarly, we gave people opportunities based on the potential they demonstrated rather than just something like, ‘Oh, they’ve done it before.’”

TIME: I know before you founded Yelp, you went to business school for a year then dropped out. What’s your view of school? There are a lot of famous Silicon Valley dropouts.

Stoppelman: There’s no one-size-fits-all. There are certain individuals that are extremely precocious and self-driven, and it doesn’t matter whether they had university or not–they’re going to figure out what they need to be successful. I don’t know that everyone falls into that category, I’d say most people probably don’t. The idea that people don’t need education is obviously preposterous.

I think when Peter Thiel or Max Levchin talk about that school is not necessarily necessary, part of it is to strike a conversation. I think it’s been misinterpreted in the media because it sounds controversial–like ‘Oh, Peter Thiel says you don’t need school.’ He just means there is this belief that a college degree solves all problems. The reality is the data is starting to show all degrees are not created equal. Just going to college and getting by is not necessarily going to guarantee you anything. What really matters is the knowledge and whether you can use that to do something important, useful, worthwhile. That knowledge can be acquired in a variety of ways–it can be acquired in a formal education, it can be acquired on your own. But I think each individual has to decide what make the most sense for themselves.

TIME: Did you always know you wanted to be a startup founder, or did Yelp happen as a surprise or a revelation?

Stoppelman: I guess both. I was always interested from a very early age in computers and software and technology. I was also very early on interested in business and how companies were started. I used to read Fortune and Forbes all the way back in my early teenage years. In Forbes there was a particular section on entrepreneurship and I’d always read the little vignettes about how someone started a small business. I also grew up around the time when all these big names in computing — Bill Gates, Michael Dell, steve Jobs — they were all in the prime of their careers. It was a dream to find my way to starting a company. I always hoped that I would do it, but I also wasn’t sure that it it would all come together. I was kind of plotting my career hoping to be a part of Silicon Valley, but i wasn’t sure if I would be a founder or CEO.

The context for the birth of Yelp was Craigslist was really dramatically impacting the newspaper industry by taking away the classifieds business. As we [at Max Levchin’s startup incubator] looked around for older media businesses, we saw the Yellow Pages as something that really hadn’t yet been transformed by the Internet. The one thing that stuck out was word of mouth was the best way to find local businesses. If we could find a way to capture that and bring it online, that would be a really powerful idea.

Finally, we were having a lunch conversation and I was saying to [Yelp co-founder Russell Simmons], if you ask me a question, I would always be willing to respond with a recommendation. We decided we’d build a question-and-answer type service for recommendations. We built that and launched October 2004, and it really didn’t work as we expected. It was just a little bit too complicated.

But buried in there was a way to write your own review without being asked a question. It turned out that when people would find that feature, which was really added as an afterthought, people would just write five or 10 or 15 reviews in one sitting. That one little clue led us to refocus the site and by February 2005 it was really starting to work and people were having a lot of fun sharing their opinions of local businesses.

TIME: That’s interesting, because I think many people assume a founder has a really great startup idea and it just kicks off from there. Is there more trial and error involved in launching a startup than people might expect?

Stoppelman: Yeah. Most of the time, when you come up with an idea, and you think you’ve got it all figured out, when you launch in the market, you always learn something about what works and what doesn’t. Very often you do have to adapt your idea and be willing and able to adjust accordingly. I remember in business school my professor said most successful startups do change direction in a fundamental way early in their life, and if they don’t, the odds are actually that their startup isn’t going to succeed.

TIME: I know a few years ago you guys were close to being acquired by Google. Now you’re a public company instead. Can you talk about how you shifted gears?

Just about every year starting in 2005, Google would come to us and say they wanted to buy us. They were never actually serious until 2009. We engaged in that conversation because obviously Google is extremely powerful, so when they come calling, you answer their calls. In thinking about Yelp and what it could be, it felt like leveraging the resources of a Google would allow Yelp to expand rapidly worldwide, which is something we were just getting started on.

Of course, once we started that conversation, there were cascading effects. Other people found out that Google was interested in the company and that stirred up other interest. Before long there was another offer at an even higher price. At that point I really felt like the whole conversation was getting away from me. We were getting out of having a conversation about what would be best for the future of the company and more into what would be the best outcome financially. I felt like we built this company over several years, it’s going really well, there’s no fundamental reason for us to sell.

So at that moment, it just felt like really the right the thing to do to maximize the value of the company but also maximize the impact Yelp would have was to shift gears and just commit to going on the independent path and take it public.

TIME: It seems like you guys are always dealing with a tension between your different constituencies–the restaurant owners, the reviewers, the regular users. How do you balance the different needs of these people?

Stoppelman: If we were to lean toward a constituency, it’s towards consumers, because ultimately Yelp is not useful if you can’t rely on its reviews. If it’s not useful to consumers, then no one’s going to use the app, you have no audience, and then you have no audience to business owners.

If you think about it that way, as Yelp you kind of have to lean toward consumers, protect consumers and make sure they’re going to the best local businesses possible. But we also do really care about business owners and Yelp is a huge boon to business owners. Yelp is word-of-mouth amplified, so if they’re doing a great job, that good news is going to travel that much faster thanks to Yelp and its community.

TIME: What do you say to those restaurant owners who say the way Yelp filters the scores is unfair or who claim advertising influences scores?

Stoppelman: There’s never been any amount of money . . . that you could pay to manipulate your rating or change reviews. That’s been validated by third parties–a Harvard Business School professor did a statistical analysis to demonstrate that.

The conspiracy theories still exist, and I think the fundamental reason they exist is because Yelp creates an accountability that didn’t exist before and it’s uncomfortable. Whenever you have a company that changes the rules of the game, you’re going to have people that don’t want to get with the program. They’ll say what they’ll have to say to try to discredit the thing that’s causing them stress.

But fundamentally, I think most business owners, and especially the really good ones, get it. They get that this is an incredible opportunity for them to take useful feedback and improve their businesses. I totally understand that it can be stressful–the fact that you’re always accountable, always on the record, so to speak. But it’s a very powerful tool for expanding and growing your business as well.

TIME: Is there any other advice you might have for would-be entrepreneurs?

Stoppelman: I think I might have originally borrowed this from Elon [Musk]. When I was in business school, I was thinking about doing something entrepreneurial after, and he said something to the effect of, “make sure that it’s something that you are happy doing for a really long time.” Call it 10 years plus–like thinking about it day-in, day-out, in the shower, et cetera. Because fundamentally, building a great company takes time. If it’s not something you’re passionate about and enjoy thinking about all the time, you’re not going to make it down that hard road. So choose wisely.

Read next: 7 Insanely Productive Habits of Successful People

TIME Transportation

Looking for a Ride? Here’s a List of Uber Alternatives

140529_FF_NerdWallet_Lyft_1
A Lyft car operates in San Francisco. courtesy of Lyft

A lot of companies want to be your driver

Uber has lost some users this week following stories about executives proposing opposition research on critical journalists’ personal lives and tracking a journalist’s use of the service without her permission. Some customers publicly ended their relationship with the company via social media, including humorist-actor-author John Hodgman. “I really don’t want to take that crummy car I was so glad to hang up on two years ago,” he wrote in a post about his decision to delete the app. “But I just can’t get into a car with those guys anymore.”

If you live in certain parts of the world, you might not even have Uber available as an option to walk away from. And you may have no intention of quitting Uber at all, continuing to love the service that is leading the revolution of local transportation around the world, providing an on-demand alternative to calling up a old-fashioned taxi cab dispatcher.

But for those out there into trying new things, here are some of the other players on the road offering smartphone-enabled rides from A to B:

Lyft: The San-Francisco based ridesharing company is the friendly neighbor to Uber’s cool chauffeur. Drivers use their personal cars, grilles adorned with signature pink mustaches, and invite users to sit in the front seat, often offering a fist bump as a greeting. The company has rolled out three additional services, Lyft Plus (fancy SUV version), Lyft Line (carpooling version) and Lyft for Work (commuting version). Lyft operates in about 60 U.S. cities, compared to Uber’s 220 worldwide. In some cities, like New York, Lyft functions very similarly to Uber.

Sidecar: This ridesharing company, also based in the Bay Area, promises the “lowest prices on the road.” Available in 10 major U.S. cities, Sidecar aims to match riders with “everyday people” driving their personal cars. But unlike other services that rack up a fare as you go, Sidecar asks riders to enter their destination and offers a selection of pre-set prices, along with ETAs, which the rider can choose from. The company also offers a cheaper “Shared Rides” carpooling option like Lyft Line and Uber Pool.

Flywheel: Taxi companies are using apps like Flywheel to re-disrupt the disruptors. Currently in San Francisco, L.A. and Seattle, Flywheel allows users to order a taxi on-demand and have payments made automatically through the app. The ride likely won’t be as fancy as an Uber black car or as cheap as an UberX, but there’s no surge pricing and the company is brokering deals to allow scheduled rides to airports, places where ridesharing companies are typically non grata.

Curb: In August, Taxi Magic launched as the rebranded Curb, broadening their focus beyond providing licensed taxis on-demand to include fancier cars-for-hire (like Uber black cars) in some of the 60 markets where Taxi Magic was already working with fleets. Unlike most of the other app-based services, customers have the option of paying with cash rather than through the app. The refreshed company is also working on launching pre-scheduled rides, to the airport and beyond.

Hailo: Another e-hail company that works with licensed cabs, Hailo is focused on the European market, having launched in London in 2011. (betrayed by their slogan, “the black cab app.”) In October, the company announced it would be closing operations in U.S. cities like New York, Chicago and Boston, shifting their eye to growth in Asia and, perhaps, re-entering the U.S. market in a few years. In September, the company launched an innovative feature that allows users to pay for the bill in a street-hailed taxi through the app.

Summon: The rebranded and overhauled InstaCab, Summon is an on-demand service that has a hybrid approach, offering both taxi e-hails and cheaper peer-to-peer “personal rides” with a no-surge-price promise. Summon is currently available only in the Bay Area, but the company said earlier this year they plan to expand to L.A., Boston and New York. The startup offers pre-scheduled rides through their Summon Ahead program, including fixed-rate rides to surrounding airports, with a journey to San Francisco’s SFO costing a mere $35.

RubyRide: Based in Phoenix, Ariz., and founded in 2013, RubyRide is a fledgling subscription-based startup that bills itself less as a taxi replacement and more as a replacement for owning a car. A basic plan that allows unlimited pre-scheduled pickups and drop-offs within certain “zones” like Downtown Phoenix costs $299 per month. The company offers limited on-demand service but plans to expand their options—including replacing rides to and from the dry cleaners, say, with delivering members’ dry cleaning—as they grow.

Shuddle: Dubbed “Uber for kids,” this San Francisco startup positions itself as an app for lightening Mom’s load. Parents can pre-book rides to take kids (who aren’t old enough to drive themselves) to sports practice or school. With safety the obvious concern, the company institutes layers of checks beyond thoroughly screening employees: drivers are given passwords they have to use before picking up kids; parents are given photos of the drivers and cars and can monitor the trip through their app. Drivers must have their own kids or have worked with kids. The company’s first 100 drivers, which they call “caregivers,” are all female.

MONEY Workplace

Why Coworking Is Hot

shared workspace
Hero Images—Getty Images

These shared workspaces for freelancers, entrepreneurs, and other independent workers tend to feel hip, fun, and casual -- but their success is about much more than cool design.

Coworking spaces – where freelancers, entrepreneurs, and other independent workers pay a fee to share a workspace and benefit from working in the presence of one another – are hot. More than 160,000 people worldwide are members of over 3,000 coworking spaces, according to a recent report by DeskMag.com and Emergent Research, up from just 20,000 workers in 500 spaces in 2010.

My colleagues Gretchen Spreitzer and Lyndon Garrett and I set out to understand what draws people to coworking and what accounts for its success. We surveyed members from over 40 coworking spaces around the United States, analyzed the websites of over 100 U.S. coworking spaces, visited a handful of spaces in major U.S. cities, and spent several months as participant observers in one local coworking community in Ann Arbor, Michigan.

Given the coolness factor of coworking spaces – especially those that attract members with hip design and high levels of service – we figured that their design had something to do with the success of the phenomenon. But we wondered what other factors drove the success of the coworking model. Several interesting insights emerged.

Coworking fosters personal growth and community building

In his recent book, The Purpose Economy, social entrepreneur Aaron Hurst writes how coworking spaces are a powerful tool for cultivating community among a new class of workers who are driven to organize their professional lives around continuous personal growth, meaningful relationships, and the service of something greater than themselves.

One of the aims of the coworking movement is to provide people with a safe space where they can be themselves at work. But it also encourages members to explore shared interests with one another and collaborative opportunities that go beyond daily work routines. Grind, for example, a New York-based coworking space that participated in our study, offers tips to its members on how to move beyond their natural comfort zone and meet fellow members.

We also found learning to be a necessary component of what makes coworking a successful model. Member education is an explicit part of the mission of many coworking spaces. We saw spaces supporting member education, member support networks, and access to professional development opportunities and mentorship. Many spaces also host social events like happy hours, networking events, and guest lectures in order to reinforce learning and community building.

The most successful build “just right” communities

That is, just right in that they involve newcomers as much or as little as they want, without any pressure.

Unlike a traditional shared rental office where people largely want a quiet professional space to work without being bothered by others, many coworking spaces curate an experience that allows potential members to try the space and meet other members to see if there is a fit.

But unlike a traditional work organization that does this through the hiring process, coworking has low switching costs for members and doesn’t actually commit them to any aspect of the work experience that is meaningless to them. The result is that coworking gives a non-overbearing sense of belonging to those who want to be part of the community.

Coworking isn’t just for start-ups and freelancers

Although the earliest coworking communities were organized to provide an alternative to coffee shops or working at home to freelancers and entrepreneurs, we learned that coworking spaces are reaching diverse segments of the workforce. We found some spaces catering to writers and artists by emphasizing affordability and an atmosphere of creativity, for example. Others, including some of the most welcoming communities in our sample, attract women entrepreneurs.

But coworking also helps people keep good jobs with conventional employers in cases when, for example, they are forced to move for a spouse’s job change. In fact, 21% of U.S. sites explicitly market to remote workers, and one-third of our survey respondents were employed full-time by some other company. On average, these individuals are spending 65% of their time working from a coworking space.

“We have seen individuals who come in to avoid the commute to their traditional office space,” says Michael Kenny, managing partner of San Diego-based Co-Merge, a space that participated in our study. At Co-Merge, users from Accenture, Groupon, and Citrix are using the space on a regular basis. Co-Merge also has members who remotely work full-time for companies in other major cities such as Baltimore, Chicago, and Washington.

It’s the authentic sense of community where intrinsically motivated people who experience a sense of purpose in their work and thrive together that substantiates the coworking movement. Given these qualities, we expect to see a growing number of flexible workers try coworking — and a growing number of employers embracing coworking as a tool to help their increasingly mobile and flexible workforce to do their best work.

Peter A. Bacevice (@Bacevice) is a researcher with the Center for Positive Organizations (@PositiveOrg) at the University of Michigan’s Ross School of Business (@MichiganRoss) and senior design strategist with the New York office of HLW International (@HLWIntl). Gretchen Spreitzer is the Keith E. and Valerie J. Alessi Professor of Business Administration and Professor of Management and Organizations at the University of Michigan’s Ross School of Business. Lyndon Garrett is a doctoral candidate at the University of Michigan Ross School of Business.

 

TIME Companies

7 Dead-Serious Uber Controversies That Somehow Didn’t Sink the Company

Uber Taxi App In Madrid
Pablo Blazquez Dominguez—Getty Images

From high-speed chases to abductions to driver poaching, Uber is well-acquainted with the snafu

Uber is no stranger to confrontation. The ride-sharing firm is known for aggressive tactics that have helped fuel its explosive growth. Its very business model is based on disrupting old-school taxi services in cities across the globe.

Remarks made by Uber’s senior vice president for business, Emil Michael, have put the spotlight on the company once more. A Buzzfeed editor overheard Michael outlining “the notion of spending ‘a million dollars’ to hire four top opposition researchers and four journalists. That team could, he said, help Uber fight back against the press—they’d look into ‘your personal lives, your families,’ and give the media a taste of its own medicine.”

Michael excused himself later, saying that he regretted his idea to investigate and embarrass critical journalists, and that his remarks “do not reflect my actual views.”

Here are seven other controversies that the company has been embroiled in over the years. None of them has seemed to really hurt it permanently. Uber will hit an annual revenue rate of $10 billion by the end of 2015, Business Insider reports.

Sabotaging Lyft by booking rides and then canceling them

Uber employees allegedly posed as customers ordered and then canceled rides from Lyft, decreasing Lyft drivers’ availability, wasting time and gas, and possibly sending real customers to Uber instead. Lyft told CNNMoney in August that 177 Uber employees—contractors armed with a burner phone and a credit card—ordered and canceled more than 5,000 rides.

Uber officially denies that it’s playing dirty, but an Uber contractor told The Verge that the company encourages that kind of maneuver.

Poaching Lyft drivers

Uber employees are known to hail Lyft rides, converse with Lyft drivers, and try to recruit them to Uber before they get to their destination. The system has become complex: there’s an official conversation guide for Uber recruiters, and a messaging app that tells Uber recruiters which Lyft drivers had already been pitched. One source told the Verge that recruiters can earn a $750 commission for successfully recruiting a single new driver to Uber.

(Lyft has also sought to recruit Uber drivers, by offering cash bonuses for joining.)

Disrupting established taxi services

Traditional city taxi services aren’t happy with the competitive challenge Uber poses. Sentimentalists mourn the hardships faced by old-line companies like the classic New York City yellow cabs, and many argue that Uber should be subject to the same regulations as traditional taxi services. Uber has faced a slew of legal challenges, lobbying and public mud throwing in dozens of cities it has moved in to.

One Uber driver allegedly abducted a woman

An Uber driver was arrested in June by Los Angeles police on suspicion of kidnapping a drunk woman and taking her to a hotel, intending to sexual assault her. The LA Times reports that a valet employee at a night club asked an Uber to drive a young woman home, but he instead allegedly drove her to a hotel and slept beside her.

..a second driver apparently abducted another woman

Another LA woman was reportedly abducted by an Uber driver last month who took her almost 20 miles out of the way, ignoring her questions and directions, and drove her into a dark empty parking lot in the middle of the night. The driver locked the doors, trapped her inside and only took her home when she screamed and caused a commotion, Valleywag reports. A quick ride turned into a two-hour plus nightmare.

…a third is said to have abducted a New York-based CEO

The CEO of a New York-based company said he was taken on a wild ride by an Uber driver in July who appeared to be escaping D.C. taxi inspectors.

The Uber driver started down the street, ran a red light and veered away from the D.C. inspector, according to CEO Ryan Simonetti’s story in The Washington Post. Simonetti says he was driven down the highway well above the speed limit as the Uber driver veered, narrowly missing hitting other cars in order to escape the D.C. authorities. “It was insane,” Simonetti said. “I physically tried to force his leg to hit the brake. I ripped off his pant leg…. I said, ‘Here’s two options. You take this exit, or I’m going to knock the side of your head in. If we crash, we crash, but you’re gonna kill us anyway.’” Simonetti managed to escape the car, and the Uber driver screeched away the wrong way up an exit ramp.

…and a fourth was arrested for supposedly hitting a passenger on the head with a hammer.

In September, an Uber passenger in San Francisco questioned a driver on the route he was taking when things turned ugly, NBC reported. Driver Patrick Karajah pulled the vehicle over and took a hammer, beating the passenger over the head and causing facial fracture and trauma to the head. Karajah is being charged with deadly weapon assault and battery with serious bodily injury; the passenger, Roberto Chicas, faces reconstructive surgery and hasn’t been able to work since the assault.

One of the major complaints against the company is that it doesn’t vet its drivers the way that an established taxi company does. (That applies to Lyft, too.) Uber does do a driver background check, but established taxi drivers are often better regulated.

TIME Innovation

Five Best Ideas of the Day: October 24

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

1. Iran’s insidious control of Hezbollah and Russia’s operations inside Ukraine call for a new U.S. strategy to counter unconventional warfare.

By Robert A. Newson in Defense One

2. Criminalizing organ donor compensation endangers lives and fuels an unregulated black market.

By Sigrid Fry-Revere and David Donadio in the New Republic

3. Utility rights-of-way — think power lines and pipelines — can become flourishing wildlife habitats.

By Richard Conniff in Yale Environment 360

4. A unique combination of government support and a strong entrepreneur culture has made D.C. a hub for startups.

By Dena Levitz in 1776 DC

5. For the nations of the South Caucasus, the fate of Ukraine means choosing between Russia and the west comes at a high price.

By Maxim Suchkov in Carnegie Moscow Center Eurasia Outlook

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 Companies

Ad-Free Social Network Ello Gets $5.5 Million in Funding

US-IT-INTERNET-MEDIA-ELLO
The Ello website is seen on the monitor screen September 27, 2014 in Washington D.C. Paul J. Richards—AFP/Getty Images

Company promises it will never sell ads or user data

The burgeoning social network Ello has raised $5.5 million in a new round of venture funding, it was revealed Thursday. The buzzy startup gained widespread attention in September thanks to its manifesto decrying social media companies’ habit of gathering and monetizing user data.

“Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold.” the manifesto reads. “We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce and manipulate — but a place to connect, create and celebrate life.”

Ello is putting some legal muscle behind its lofty rhetoric by reincorporating as a public benefit corporation in Delaware. The company will vow in its new legal charter that it will never sell user data or advertising, according to The New York Times. The company plans to make money by charging users for extra, as-yet-unspecified features.

Though Ello has been around since summer, the site exploded in popularity last month after Facebook began kicking drag queens off its site because they were not using their legal names, leading some of those users to relocate to Ello. The small social network leapt from 90 users in early August to more than 1 million today, according to the Times. Facebook has since apologized for how its real name policy affected the LGBT community and others.

The funding round was led by Foundry Group, based in Boulder, Colo.

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