SpaceX’s Falcon 9

Busy week lies behind, new year lies ahead — we have a little bit of both in this piece.

But first of all, congrats to SpaceX and the people who managed to land the Falcon 9 after sending its payload into orbit. It’s a fantastic achievement that deserves praise from anybody, let alone technology aficionados. Let’s hope for many more to come.

Here’s what we’re talking about right now:

  1. Uber is expanding — partnerships with Facebook for its core business as well as testing food delivery services; who’s to say we won’t see more combinations, such as UberEATS combined with Facebook?
  2. Self driving cars are (metaphorically) on fire! Google has partnered with Ford to boost development of self driving cars while iPhone jailbreakers taunt Elon
  3. Yahoo enters a restructuring process, spinning-off its core business from the Alibaba stake
  4. And a few leaked financials and reasons for the bubble talk

Let’s dive in.

The birth of the Uber empire

So far, he seems to be the incoming emperor

At the beginning of December, Uber launched a separate food delivery service called UberEATS. So far, the company released the app only in Toronto, Canada, for an initial testing round. Based on results, expansion will most likely follow.

The UberEATS service delivers food prepared by local restaurants to users via Uber partners — you may recognize them as the drivers you call via your shiny iPhone. So no, there’s no Uber chef uniform.

The thing is they have been offering a type of food delivery service for about 18 months in a handful of US cities as well as some locations outside of the US (Toronto, Paris). The main difference is the unbundling aspect — UberEats is a standalone app. According to Jason Droege, Head of Uber Everything, speaking to Wired, the whole idea is to keep things super simple, hence the separate app.

Sure, it’s one thing to take on person from A to B, and another to take a (perishable) meal from a restaurant, transport it without incident and deliver it in an eatable state to your final customer. So Uber has challenging logistics ahead, which explains using one city as testing ground. The upside is that with such a well funded brand and strong user base (they started planning a new funding round at the beginning of the month — USD 2.1 bln), it won’t have much of a problem gaining traction with pretty much any app it releases.

So if you’re in Toronto these days, order a sandwich through Uber and let us know how it went.

The other thing Uber is doing these days is partnering with Facebook, more specifically with Facebook’s Messenger service enabling you to hail your drive directly from the chat app.

To give you a background on the issue, the two sides have been in talks since the summer last year, according to Re/Code. Since then, there have been negotiations and hints towards how the integration might behave. Finally, it all came true: you can actually request a ride, track your driver and pay for that ride all within Messenger. In other words, you don’t actually need to download the Uber app to get an Uber ride (you do need an Uber account though, which you can create via Messenger).

What’s still unclear is how the partnership operates. According to Emil Michael, Uber Chief Business Officer, both sides benefit from the deal. Surprising, right? The truth is we have no idea whether Facebook is taking any cut of sales in this marriage. But they are surely trying to capitalize on Messenger’s 31% year-on-year monthly average users (MAU) growth (in the US).

Driving services might be a way to go.

What’s for sure is that it’s slowly rolling out in select US cities and that more partners will follow soon (Lyft might be an option), according to Facebook’s blog post.

Self driving cars from Google and Ford

The Consumer Electronics Show in January is poised to be one of the most interesting for the automotive sector yet — sources familiar with the matter, Ford plans to announce a partnership with Google aimed at developing self driving cars. As you may already know, this particular topic is very much in fashion. Elon Musk’s Tesla has been taunted recently by the jailbreaker of the iPhone, George Hotz, who allegedly built a self driving car in his garage.

An Acura turned into Luke Skywalker’s X-Wing

Tesla responded to all the articles that revered the young Hotz arguing that it’s one thing to attain a degree of autonomy that is 99% correct, while obtaining 99.9999% is a whole different matter.

Musk himself declared that Tesla should have self-driving cars in about two years, while complementing the company’s position on what developing such a project really means:

“It’s a much easier problem than people think it is. But it’s not like George Hotz, a one-guy-and-three-months problem. You know, it’s more like, thousands of people for two years.”

Reading the entire article, you will find Musk’s argument, which makes a lot of sense: putting out a demo is one thing, mass production is another. Sure, Hotz’s project is pretty nifty, but releasing it to thousands of cars is something still to be desired.

Coming back to Google and Ford’s deal, it’s clear both companies want in on the race. Google has been developing technology for self driving cars for some time (it has 53 test vehicles on the road in California and Texas, with 1.3 million miles logged in autonomous driving) and now it might actually have the necessary platform to implement at mass scale without being forced to spend billions for automotive manufacturing expertise.

Ford on the other hand gets a massive boost in self-driving software development (the automaker has been experimenting with its own systems for years but it only revealed plans this month to begin testing on public streets in California).

Ford CEO Mark Fields reveals the automaker’s autonomous prototype

It’s probably the best time for both companies to enter the deal. For Ford it’s for the obvious software development capabilities fitting right into their self driving car plans. For Google, who recently announced that the driverless cars unit would become a separate company under Alphabet, the partnership comes right on time since they have been planning for a while to deploy a fleet in the cities they’ve been using as testing ground (San Francisco and Austin, US).

The race in autonomous driving is getting hotter and hotter, with Tesla, Google & Ford, genius freelancers and even Uber stepping in. What does the future hold? Time will tell — but it’s definitely interesting.

The Winds of Change at Yahoo

Yahoo has been a bit of a mess recently. The battle of search engines was clearly lost to Google, the media unit which used to be the company’s juggernauts are not breaking any sort of MAU (monthly active users) records and even after Mayer was brought in as CEO, things haven’t looked amazing.

Yahoo’s bumby stock price evolution, from Yahoo Finance :)

But the stock price in itself is something with a meaning that’s far too varied. The company’s performance, however, says much more.

Source: http://aswathdamodaran.blogspot.com

The general idea is that things are not well at all, which has prompted the company to enter a restructuring process that has two possible outcomes, as the company lets on: either they spinoff the 15% stake in the Chinese Alibaba Group, or they spinoff the core business. Mayer’s reign as CEO will be defined by one of these alternatives.

Doing the Alibaba spinoff means a possible proxy fight with activist shareholder Starboard Value, which actually used to push for the deal but is now supporting a web-unit spinoff through which the company would sell its media and internet businesses. Latest press shows that most likely the company will go toward this direction, but it’s still unclear.

What is clear is that Mayer has a tougher job to do in 2016, which probably will make or break her position in the company as well as Yahoo itself.

A few insights from the world of unicorns

Courtesy of CB Insights, we have peaked into the financials of some unicorns, just to see whether or not it’s worth having all that bubble talk.

There’s more here. Read into them what you want. And consider that all of them have valuations exceeding USD 1 bln. Whether that’s normal or not remains to be seen as time goes by, but the evolution in revenue and profitability is set to be pretty astonishing in order to match these valuations and keep VCs happy.

Also, for those of you who’re currently working on pitch decks, this is a pretty good perspective on how it should be done (pitch decks, not business models — that’s a whole different story).

Back next week with a little more insight into the past year and what to look for in 2016.

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Merry Christmas!