Boston’s best CMO fired from HubSpot: allegedly tried to obtain Dan Lyons’ tell-all book



Two months ago we surveyed over 2,000 Boston marketers for our CMO-only conference in Boston, looking for the best local chief marketing officer. HubSpot’s Mike Volpe won hands down.

Mike Volpe

Above: Mike Volpe

Image Credit: LinkedIn

This week, however, he was fired for allegedly having tried to obtain a copy of former employee Dan Lyons’ upcoming tell-all book about his two years with the Boston tech company. Dan Lyons, of course, is a journalist and editor, a writer for HBO’s wickedly funny “Silicon Valley” show, and might be best known for his Fake Steve Jobs blog.

It’s a book that Lyons has described as “scathing,” and that the publisher’s pre-launch website says includes all kinds of juvenile brogrammer-style improprieties which would be embarrassing for HubSpot:

“The office vibe was frat house meets cult compound: Shower pods became hook-up dens; Nerf gun fights broke out at lunch; and absent bosses specialized in cryptic, jargon-filled emails.”

Perhaps even worse, the book accuses HubSpot — a top-ranked marketing automation player and one of the biggest promoter of content marketing — of making “the world a better place … by selling email spam.”


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You can see why HubSpot might be worried.

Dan Lyons, on the other hand, must be thrilled.

He isn’t saying much — a man who usually posts to his Facebook page and tweets multiple times daily hasn’t published anything on social media for days. But who could ask for better publicity for his upcoming novel? You can imagine the publisher playing with marketing taglines: “The book so explosive HubSpot tried to steal it.”

Dan Lyons

Above: Dan Lyons

Image Credit: LinkedIn

The reality is, however, with neither Lyons, nor Mike Volpe, nor Joe Chernov, HubSpot’s head of content who resigned at almost the same time, supposedly to avoid a similar firing fate, talking, it’s hard to know exactly what did happen. Volpe’s not tweeting, and personal attempts to contact him failed. Chernov hasn’t tweeted since 2013 — interesting for a content marketer — so he’s silent as well.

This is a big deal.

HubSpot is not just a pillar of the Boston tech community, but also a very significant player in the marketing automation space. In our recent marketing clouds report, the company has stepped up and begun playing not just the with marketing departments of small companies, but also some serious, large enterprises. It received one of the top scores, surprising us, and likely a number of competitors.

And the company recently held a very successful initial public offering, raising $125 million dollars and leaving it with a market value of almost $900 million. The stock has done well, and the company currently has a valuation of about $1.7 billion.

The company’s CEO has been dragged in as well, with the board saying he knew what was happening and did not intervene quickly enough, in a HubSpot press release:

… Brian Halligan, HubSpot’s Chairman and Chief Executive Officer, was recently made aware of Mr. Volpe’s and Mr. Chernov’s actions and did not report their actions in a timely manner. The Board determined that Mr. Halligan was not involved in the underlying conduct and that his lack of timely reporting did not impede the review. Mr. Halligan fully cooperated with the Company’s review and has been appropriately sanctioned by the Board.

Halligan may have been “appropriate sanctioned,” but HubSpot founder and current CTO Dharmesh Shah still appears to support Mike Volpe, tweeting yesterday that he has “great love and respect” for him.

Hubspot tweet

We’ve had Volpe at VB events before, and I’ve met him personally. I have to say that Shah’s assessment rings true. Of course, we do not yet know all the details — and never may.

The deeper question here, given that the company says the matter has been referred to “the appropriate legal authorities,” is whether any criminal proceedings will emerge. And, given that the current CEO and founder/CTO clearly have made some effort to support their former CMO in ways that the board, perhaps, would not appreciate, whether this will have deeper implications for HubSpot’s brand and its ability to execute in the fast-paced martech ecosystem.

Or, of course, if when the book is published it will reveal things that will damage the company — and perhaps careers.

Ironically, a Dan Lyons Facebook post from last year refers jokingly to “serious allegations” made against him, Chernov (who briefly managed Lyons) and HubSpot, and references a now-private YouTube video:

Screen Shot 2015-07-31 at 3.28.33 PM

Today, of course, few people are joking.

Particularly not HubSpot, which gave me the standard “no comment” in response to a request for more information.

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It’s time for marketers to adapt to vertical videos

ObviouslyBenHughes derides vertical video on YouTube


Vertical videos. Chances are that you’ve missed out on this ongoing debate over whether or not to incorporate vertical videos into marketing efforts, but with Snapchat ramping up its promotion of the format, it seems the haters are on the way out. Numerous publications have speculated that other big-name platforms will soon implement vertical video in an effort to better appeal to their mobile users, creating a major impact on the industry at large. With these changes on the way, it’s clear that brands and marketers need to prepare for the new opportunities and challenges this medium offers.

Vertical videos have been maligned for years, even being subjected to satirical PSA’s decrying the practice — our eyes are aligned horizontally, and therefore the most logical way to watch videos is horizontally. But no matter how often the practice of shooting vertical videos is brought up as being simply wrong, it seems smartphone users are going to continue filming (and consuming) both photos and videos in this style.

After all, smartphones are designed to be used vertically, rather than horizontally. How often do you see an individual scrolling through their Facebook feed or favorite website while holding their phone horizontally? While many mobile apps currently allow for both horizontal and vertical viewing, others (most notably video apps Periscope and Meerkat) only allow for vertical use. And regardless of what an application may allow, the overwhelming majority of mobile users prefer to hold their phone vertically.

Indeed, vertical video is quickly becoming the desired format for advertising on many mobile apps. Snapchat (which introduced its advertising platform fairly recently) actively encourages marketers to create vertical rather than standard videos, an argument that is especially compelling considering Digiday’s report that “vertical video ads have up to nine times more completed views than horizontal video ads” on mobile devices.

As silly as it may sound, creating a horizontal video for mobile advertising could prove to be every bit as annoying for viewers as trying to watch a vertical clip (black sidebars and all) on your desktop.

Snapchat’s increasing influence in the mobile marketing world — especially among millennials — has led other platforms to give vertical video more serious consideration. The Los Angeles Times reports that Facebook will likely begin selling vertical video advertisements to marketers, while YouTube is also investigating the possibility of integrating vertical video into its popular platform. Meanwhile, others have already jumped full-steam into vertical video — like Vervid, which advertises itself as “The YouTube of Vertical Videos.”

While vertical video is clearly becoming more important for reaching mobile users, many are slow to adapt when it comes to using this alternative media method. As AdAge recently noted, while some brands (such as Taco Bell) have fully embraced vertical video as part of their marketing strategy, others are more cautious, waiting for vertical video to become more fully integrated by other apps before taking the plunge.

This hesitation is somewhat understandable, as Snapchat does not have nearly as large a user base as Facebook or YouTube, and filming vertical videos would require additional spending on something that would have little appeal for non-mobile users. However, Snapchat’s 100 million users should not be taken lightly — especially since the audience skews heavily to millennials and teens (two highly coveted, yet hard-to-reach groups for many brands and advertisers). And some companies have found additional uses for their vertical videos, repurposing the content to appear as vertical display advertising on desktop websites.

While it’s unlikely that the next “Avengers” movie will be filmed vertically, the implications for marketers trying to reach a mobile audience are quite clear. Mobile users prefer vertical. It likely won’t be long before Facebook, YouTube, and other popular mobile platforms introduce means of incorporating vertical video into their offerings, and no doubt other methods will be developed to ensure that such content can be easily integrated into other marketing efforts. The shift may not be the most aesthetically pleasing, but advertisers need to adapt now so as not to be left behind.

Kevin Johnson is digital PR and social media manager at digital advertising agency Fusion360.


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Y Combinator-backed ShotPut helps fulfill product orders at a price that works for startups

Cat in box


Did you know that there are nearly 90,000 successfully funded projects on Kickstarter? Each of these projects has reached out to the public, raised the capital they needed, and achieved their dreams — well almost. The next thing that each of these companies will have to do is make sure the promised product gets shipped out on time. But that can get pretty expensive, especially with the current choices companies face.

ShotPut thinks it has a better solution, and not for the crowdfunding market either. This Y Combinator-backed company wants to help small- to medium-sized businesses with their logistics challenges, based on what works for the companies. ShotPut cofounder James Steinberg describes it as “Amazon Web Services for fulfillment” in that his service can scale to meet the needs of any company’s products.

Homepage

Companies that need fulfillment assistance can go to ShotPut’s website, enter in their product information–including the weight, size, and amount–and the service will tell you the cost. It’s pay as you go, so there’s no long-term contract. Steinberg claims that his service is better than a typical warehouse as the latter may give you a quote, but once your product arrives, that rate could change and end up costing you more.

ShotPut will handle freight to and from the fulfillment center and shipping. Once an order has been placed, the company will pick up your product from the manufacturer and deliver it to one of its partner warehouses in the U.S. The average time for shipping from manufacturer to warehouse and then to customer is approximately 10 days — Steinberg says that the warehouses aren’t for long-term storage, just short-term distribution to customers.

Step 1

Costs for shipping will obviously vary based on your needs, but ShotPut charges a flat margin for every transaction (Steinberg declined to provide specifics).

What makes this service interesting is that it could provide first-time product creators an affordable way to distribute their goods and services without having to pay commercial rates with UPS, FedEx, DHS, or any similar offering that is more suitably priced for larger companies.

Step 2

ShotPut has raised some funding from Y Combinator and Idea Ventures. It has a staff of three people, including Steinberg and his cofounder Aaron Gerry. The service operates within the U.S., but is hoping to grow to Canada and Europe within the year. If you happen to be manufacturing your product overseas, Steinberg says that ShotPut will pick up your product from a port and provide service from there.

The company integrates with Shopify and has an API, which should help companies quickly pass along their shipping orders to ShotPut for fulfillment.

If you’re interested in testing out ShotPut, the company is offering VentureBeat readers a deal on shipping. Go to this website, snap a photo of your product, and ShotPut will cover all the costs to deliver your product to five customers.

Why the Ashley Madison hack could pose a national security risk

power plant


We all know cyber security is a hot issue these days. A new hack or cyber security threat seems to make headlines each week. The most recent news on this front, of course, is that hackers have accessed 50 million user accounts of Avid Life Media, the owner of cheating service Ashley Madison and dating sites Established Men and Cougar Life. These hacks are of course costly, and having your Ashley Madison account exposed could upend your personal life, but they’re not just about economics and embarrassing people, they are, without exaggeration, about terrorism, 21st century warfare and the safety of you and your family.

If we assume that half of the 50 million compromised Avid Life records are U.S. records, which seems a conservative assumption, and that the people who used the sites are representative of the general population, then the numbers below represent roughly the number of Americans in each of those categories.

  • 1,250 Federal and State elected officials
  • 2,500 FBI employees
  • 2,500 NSA employees
  • 2,175 full time nuclear power plant workers
  • 3,500 TSA employees
  • 25,000 DHS employees
  • 35,000 local elected officials
  • 60,000 people with top secret security clearance

These are people whose marital indiscretions, nude pictures, and sexual proclivities are now in the hands of anonymous hackers calling themselves the Impact Group. If that doesn’t scare the hell out of you, then you have clearly never seen a good spy movie.

[Note: I haven’t taken into account here the percentage of accounts that might be duplicates (one person might have accounts on more than one of Avid’s services). The numbers are intended simply to illustrate how big the potential problem is, not to be taken as concrete.]


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Cyber security has two fronts, the first is the technological front where we need to respond directly to hackers, the second is the human front where hackers use social engineering to convince others to hand over access to their systems. The Ashley Madison data is like a WMD on the social engineering front. Why bother trying a brute force hack of a nuclear power plant’s control systems when you can threaten to destroy the plant’s IT director’s family, reputation, and career. I suspect there is a rather large team at the NSA working to identify everyone with security clearance placed at risk by the Ashley Madison breach. At least I hope there is. The problem is, what do you do when the list is so large? I don’t know if there is a solution other than leaking the entire list of names to the public, effectively firing the hacker’s bullets before they have a chance to do harm.

The venture and startup community has certainly recognized part of the danger here and has responded accordingly. Funding for security in 2010 was just over one billion dollars but has been growing steadily and is on pace to exceed three billion in 2015.

Here is a chart from Mattermark showing growth in security funding over the last five years.

security funding

Above: Security tech funding over the last five years (Source: Mattermark)

As the funding data demonstrates, the current answer to cyber security is accelerating investment in technological solutions. This increased investment in cyber security is absolutely the right thing to be doing, but it can’t be the entire strategy for dealing with cyber crime for a couple of reasons. First, reactive technology development is too slow to stop a potentially devastating attack, and second, cyber security investment largely deals with only the first front in cyber security, leaving the human weakness exposed.

Defensive measures always lag offense and are never perfect. Swords entered use around 3,300BC, and mail armor rendering those swords less effective appeared in 400BC. The gun was introduced to Europeans in the 16th century, but a commercially available bullet-proof vest didn’t exist until the 19th century. The Nazis introduced modern missile technology in the early 1940s, but it wasn’t until the 2000s that a credible (barely) missile defense system existed. Defensive technology is by definition a response to an offensive technology of some sort and often only comes along as a direct response to an attack.

The pace of technology development has increased, and the lag time between offensive weaponry and defensive innovation is shrinking, but at the same time the damage a potential zero day attack can cause has been increasing at an even greater rate. No matter how much money is poured into cyber security, there will always be a gap between new attacks and our ability to respond to them. As cyber attacks become more sophisticated and our world becomes more connected, we are approaching a point where we can’t afford the damage a single attack can cause before we mount a defense.

The bigger issue, though, is that people ultimately control our systems, and people are weak. As long as any porn site, search history, social network, or job seeking site is vulnerable to being hacked, the people who use those sites and every system they have access to are vulnerable. The human weakness basically means that we are only as secure as the least secure site.

Recently, in response to the online privacy discussion, there has been a small but growing minority calling for openness and a post-embarrassment world. This burgeoning movement towards radical transparency is largely motivated by progressive sex-positive attitudes and a pragmatic understanding of how the Internet works. While I think both are reasonable bases for pushing for a more transparent world with less shame, the more compelling reason to “let it all hang out” is national security. If everyone’s porn preferences were known today, would anyone care six months from now? We have a cultural weakness exposed by modern technology and only a cultural solution can fix it. Is embracing a blasé attitude towards the personal lives of others something we can do overnight? Of course not, but plenty of other western nations, particularly France, have a much more open mind about the sorts of things that here in the U.S. are fodder for blackmail.

If we want to craft a credible defense against cyber terrorism, we need to attack it from all fronts. We need to continue investing in counter measures, but we also need to recognize that 20th century concepts of personal privacy place us all at risk in a 21st century world. Shame might be the strongest weapon our nation’s enemies can wield against us.

Jake Chapman is a partner at Sazze Partners, where he invests in founders making the impossible possible through sheer force of will. You can reach Jake at https://twitter.com/runvc.

Yahoo will acquire the social shopping site Polyvore

polyvore


Yahoo announced today that it has agreed to buy the social shopping site Polyvore.

The sale price was not announced. The deal is the most recent in a spree of more than 50 acquisitions by Yahoo since Melissa Mayer took the helm three years ago.

Polyvore will continue to offer its core service on a stand-alone basis. Much of the Polyvore staff will move over to Yahoo, including the CEO, Jess Lee.

Yahoo expects the acquisition to enhance its own consumer and advertiser offerings, namely its digital magazines. Some of the Polyvore social and e-commerce tools could be integrated with the Yahoo Style and Yahoo Beauty sites.

“When it comes to advertising, Polyvore’s technology will bring a proven native ad model, new compelling native ad formats, and strong advertising relationships with more than 350 retailers to Yahoo’s fast-growing native advertising platform, Yahoo Gemini,” Yahoo said in a statement announcing the deal.

At Polyvore, community members can arrange and display collages of clothing, or arrange coordinated pieces of home decor.

Polyvore’s investors include Goldman Sachs, DAG Ventures, Benchmark Capital, and Matrix Partners.

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Facebook tweaks its News Feed for the ‘small group of people’ who actively hide posts

facebook mobile app ads


If you’re a fan of the “hide” feature on Facebook, then you’ll want to pay attention — it’s getting a small tweak today that could affect the stories you see on the social network.

For the “small group of people” on Facebook that hide a large number of stories in their News Feed for whatever reason, the social network’s algorithm will no longer consider hiding to be a strong negative signal. What this means is that if you fall into this category, you’re going to see more stories from the Pages and friends you’re connected to than in the past. Ideally this should showcase more content that you’re interested in.

When Facebook rolled out “hide” to its users, it was a way for people to let the social network know what types of posts and stories they’re not interested in. But now, for those that opt to click “hide” on every post, Facebook will no longer view that action as strongly as it did before. So if you’re a “super hider” and hide a VentureBeat post (please don’t), then Facebook could show you more stories from VentureBeat.

Of course any change that relates to News Feed automatically includes a discussion about Pages. If anything, Page admins could probably see an increase in the number of their stories hidden within their Page insights. However, Facebook says it doesn’t expect Pages to see “significant changes in distribution as a result of this update.”

 

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Funding Daily: Today’s tech funding news, in one place

Money



[Get all the tech funding news of the day delivered straight to your mailbox! Sign up for Funding Daily and never miss a deal.]


Here’s a list of today’s tech funding stories, updated as the day unfolds. Tip us here if you have a deal to share.

Uber reportedly raises $1B at a $51B valuation from investors including Microsoft

Uber has raised a new $1 billion funding round, which pushes the company’s valuation to $51 billion.

The new investment money comes from Microsoft and Indian media conglomerate Bennett Coleman & Co., according to a new report from the Wall Street Journal, citing unnamed sources familiar with the matter.

Uber will reportedly use the money to expand its ride-hailing service into more foreign cities.


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The report points out that Uber had briefed investors on a plan to raise between $1.5 billion and $2 billion in May. Uber confirms that it filed regulatory papers to do so.

Read more

Integral Ad Science takes in $67M

Data advertising company Integral Ad Science announced today that it raised a $27 million round. The investment was led by Sapphire Ventures and Cross Creek Advisors. The Startup also announced it took in $40 million in debt financing from Silicon Valley Bank.

Integral said the funds will help its “ongoing mission of providing the digital advertising industry with innovative technology that delivers actionable intelligence for media buying and selling.”

More: Integral Ad Science

Mobile telematic startup Driveway puts $10M in its glove compartment

Startup Driveway Software closed a $10 million series A round to grow its mobile telematics technology, which apparently gives users “objective ratings” on their driving styles, the San Francisco-based company announced today.

The round was led by Ervington Investments, an investing arm for Russian businessman and Chelsea Football Club owner Roman Abramovich. Driveway has raised $11.3 million so far, and it plans to double its 20-person team within the next three months. It is also said to be working with insurance companies and other prospective partners.

Read more

 

This list will be updated with breaking funding news all day. Check back for more.

Attention, shoppers: Shopping with a store app means you’ll visit more and stay longer

Instore shopping


A shopper with a Target app visits that chain about once more a month than an app-less shopper.

So says new field data released today by mobile data analytics firm Wefi. It’s based on device-transmitted info from shoppers at 49 stores in the Los Angeles area run by seven major retailers: Costco, Kohl’s, Macy’s, Nordstrom, Sears, Target, and Walmart.

The Herndon, Virginia-based Wefi noted that all previous research about the effect of in-store apps has utilized surveys with small samples. By contrast, Wefi used data transmitted from about 40,000 cooperating users’ devices.

Wefi found that shoppers with apps are more engaged with the store:

  • On average, a shopper with a retailer’s app on his smartphone will visit that brand’s store one extra time each month, compared to shoppers who are bereft of that app. Of course, that dozen more annual visits represents a significant amount of additional foot traffic.

    Kohl’s showed the most increase, with 86 percent more visits (just under three monthly) than users without the app (about 1.5 visits on average). Nordstrom was the only one of the seven to show fewer visits (1.2) for app-holders than non-appsters (1.6).

Wefi - number visits

  • A shopper with a retailer’s app will spend an average of seven more minutes during each store visit than someone without the app. Macy’s was tops here, with app users staying 29 percent longer than non-app users — nearly 50 minutes, versus just over 38 minutes.

Wefi- duration

  • The retailer with the most-opened app was Target, where 72.34 percent of those with the app opened it while in the store. The next two most-opened apps were, in order, Kohl’s (53.29 percent) and Sears (37.14 percent).
  • The percentage of users with the app installed, however, is still tiny. Walmart’s was the highest: For shoppers at Walmart, 6.92 percent had that retailer’s app installed.

    Nordstrom’s was the lowest, with .07 percent of its visitors bearing its app. At Target, which showed the greatest user engagement in terms of opening the app, 2.64 percent of shoppers were apped.

The data, Wefi VP of product management Alexander Zaidelson told me, not only shows “a correlation between app usage in a specific location and user behavior [such as in-store loyalty and visit frequency], but, for the first time, allows a retailer to benchmark app usage” against competitors.

Because there was no data collected on how the apps were used or even what functions they contained, this field study could not account for why one store had a more effective app than another.


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But, Zaidelson told me, it’s likely that some retailers’ “overall mobile strategy, including feature sets, relevance, promotion, and quality of the apps, were executed better.”

There was also no data on whether beacons were present in the store. Zaidelson said Wefi intends to add beacon data at some point. The users’ apps communicated via in-store Wi-Fi or 3G/4G.

The data was collected over a five-month period beginning in January via Wefi’s free app or from partner apps on about 40,000 users’ phones. Wefi’s app is designed to help users find the best free Wi-Fi hotspot, and Zaidelson said it comes with an agreement that allows it to send anonymous, aggregated data to the company.

Wefi’s app and the partner apps can see which apps are active on the device, although they do not register device ID. The study’s conclusions were extrapolated from the large sample, since not every shopper with a retailer app had the Wefi or partner app installed — although some users did. The stores’ native apps were not created by Wefi.

Zaidelson declined to identify the names of the partner apps so as not to compromise future data collection, but said their data transmission is also permission-based. User location was determined from GPS if it had been enabled in the Wefi app or the partner apps, and/or from positioning determined via 3G/4G or WiFi receiving/transmitting locations.


VB’s research team is studying mobile user acquisition… Chime in here, and we’ll share the results.

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