Monday, July 1, 2019

FORTUNE Data Sheet: An education start up wasted almost $200 million

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July 1, 2019

The exceedingly well-funded San Francisco education startup AltSchool announced a seemingly inevitable "pivot" last week. It is turning over its few remaining schools to an organization with experience educating children. At the same time it will rename itself Altitude Learning and become the thing it avoided from the git-go, a technology company. That company also will be run by career educators, which AltSchool's founders are not. (Fast Company has a good overview of the changes.)


I wrote more than three years ago that I was intrigued by AltSchool because of its innovative approach to educating kids. At the same time, I noted the arrogance of the ex-Google employees who started AltSchool for thinking they could experiment on children. Then-CEO Max Ventilla compared AltSchool to "flying the plane while we're building it." My observation at the time: "No one in their right mind would tinker with an airborne plane. Yet AltSchool asks parents to pay for the privilege of supplying their children as guinea pigs."


The experiment didn't work. There's no shame in that in Silicon Valley, whose well-documented ethos celebrates failure. Then again, the era seems to be passing when reasonable people will believe that just because someone made a bunch of money helping commercialize a revolutionary information-searching algorithm that they have a chance in hell of reforming education—or some other unrelated field.


I also can't help but wonder what might have happened if the founders of AltSchool had figured out a way to spend the nearly $200 million in venture capital they raised to improve education in the public schools in the cities where their company operated rather than trying to change the world with technology.


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The Wall Street Journal reported late last week that China's Bytedance, owner of the popular app TikTok, "considered" buying Snap (worth $19 billion) and Twitter ($27 billion). Fortune's Eamon Barrett wondered recently if TikTok can make money, let alone buy massive rivals.


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Please excuse any glitches you may notice today on our web site. As part of Fortune standing up as an independent company, we’ve switched over to our own hosting platform. The end result should be a speedier and (finally) more secure site, but there could be a few gremlins in the attic today.


Adam Lashinsky @adamlashinsky adam_lashinsky@fortune.com

NEWSWORTHY


Waiting to exhale. The tech sector can breath a sigh of relief, one which will likely inflate its stock prices, as President Trump and Chinese President Xi put off imposing any additional tariffs on trade between the two countries. That's fortuitous for Apple, which not only avoids higher prices on the iPhone but also just moved production of its high-end PC, the Mac Pro, from the United States to China.


It's OK if you're clueless. That hot Wall Street Journal story we linked to on Friday accusing Advanced Micro Devices of transferring key supercomputer technology to China may have been a little too hot. AMD says the story had "several factual errors and omissions and does not portray an accurate picture of the joint ventures." Monday's new, hot Journal story says departing Apple design chief Jony Ive has missed a lot of meetings and flopped a bit over the past few years.


Getting to happy. Online retailer the RealReal went public on Friday and its shares jumped 45% from the initial offering price of $20. The site's gross sales of "pre-owned" and post-authenticated Gucci bags and Cartier necklaces exceeded $224 million in the first quarter, up 42% from last year, though generating a net loss of about $23 million.


Disappearing acts. The government of Iran was not kidding around when it banned bitcoin mining in the country last year. The government closed down two mining operations in Yazd province which allegedly caused a 7% jump in Iranian power consumption in June.


How Stella got her groove back. They apparently need to de-ice a lot of things in Scandanavia. So Norwegian startup UBIQ Aerospace is building drones to break up the frozen stuff. The company said on Friday it raised seed funding from James Murdoch's Lupa Systems and a local accelerator fund.


(A Monday morning headline reference explainer plus beach reading list.)


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FOOD FOR THOUGHT


Last week's Data Sheet essay about Microsoft's ban on employees using rival messaging software from Slack brought some pushback from readers.


Several of you wrote in to defend the practice of developers relying solely on their own apps. "Companies should use their own products to show they use what they sell, to test and improve their own products, and for the obvious financial reasons of using your own products versus buying (or giving your data for the free ones) someone else's product," one reader noted. Another put it more succinctly: "If you don't eat your own dog food, it will never be competitive."


There was also some disagreement with my assessment of Yahoo email after Marissa Mayer required all employees to use it. "Beg to disagree, Yahoo Mail was *much* better for it–night and day according to our users and many long-time Yahoos," wrote a reader who might know something about the subject, Marissa Mayer.


IN CASE YOU MISSED IT


What Jony Ive's Departure Means for Apple's Stock By Anne Sraders


Spotify's Pre-Save Feature Gives Record Labels User Data, Account Access By Xavier Harding


Queer Eye's Antoni Porowski on Netflix, Social Media, and Opening a Restaurant By Rachel King


Chef Marcus Samuelsson Wants to Redefine Cookbooks Through Audiobooks By Rachel King


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BEFORE YOU GO


There are many crazy days in sports, but I'm not sure many could rival Sunday night's start of free agency in the National Basketball Association. Some of the best players in the NBA were on the move and it's gotten quite difficult to figure out the favorites for the upcoming season. USA Today's Charles Curtis took a stab at picking the initial winners and losers. Read it and weep–or cheer–depending on the verdict for your favorite team.


This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.


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