McSweeney's Looks To Raise $150,000 Through Kickstarter

Literary publications are going directly to their readers for funds — and the Eggers empire is looking to raise the most.

Crossett Library / Via flic.kr

The San Francisco publishing house/literary magazine/quarterly/humor website/podcast empire McSweeney's is looking to its large community of readers for money. It launched a Kickstarter campaign today looking to raise $150,000.

"It's a big one for publishing projects on Kickstarter, it's intending to support the next slate of publications and provide ongoing support for our website," Shannon David, the development director of McSweeney's, told BuzzFeed News. The money, if they raise it, will fund a summer issue of the literary magazine The Believer and an issue of its quarterly Timothy McSweeney's Quarterly Concern, as well as support its popular humor website Internet Tendency, along with its podcast The Organist. The funds will also support its book publishing efforts.

McSweeney's, founded by Dave Eggers in 1998, announced last year that it was transitioning into a nonprofit. And that's when Kickstarter's Maris Kreizman, who works on publishing projects, got interested in hosting their effort to raise money from fans.

The rewards McSweeney's backers can receive are a perfect reflection of the quirky, positive sensibility instilled by its founder Eggers and his small army of readers, interns, and fellow authors. Backers, depending on how much money they pony up, can get the classic literary tote bag ($35), a week of email correspondence with Nick Hornby ($750), a short story by Rebecca Curtis written on homemade paper ($1,000), a short story about you by Sheila Heti ($1,000), a choose-your-own animal painting by Eggers himself ($2,500), and a letter written to the recipient of your choice by Spike Jonze on the cover page of the script of his science fiction love story Her ($9,000).

The move to getting money directly from its fans comes after McSweeney's became a sponsored project of the nonprofit arts orgnaization SOMArts, making it eligible for tax deductible donations (the Kickstarter money, however, is not deductible). "Ultimately the transition is really about a long-term vision for making this sustainable and making this place really really stick to its ambitions and keep pursuing the big projects that we've made our name on," Jordan Bass, editor-in-chief of McSweeney's, told BuzzFeed News.

McSweeney's founder Dave Eggers

Kirk Kittell / Via flic.kr

"We've already been really happy to see some support from our readership, it's cool to see people really rally around us," David said. "If enough people pitch in, a relatively small contribution from a big group, we're giving people a chance to participate in what we do in a way we haven't done before."

There's never been more writing about books or a more precarious time for the people doing it. Readers can feast on free content, while publishers and writers make due with cheap web ads and donations.

"We've always been pretty open about that over the years, the viability of an independent press," Bass said. "Trying to publish an experimental literary magazine is never going to be a blue chip enterprise."

Other literary projects have successfully raised money on Kickstarter, but none with the cache of McSweeney's and for much smaller amounts. Emily Gould and Ruth Curry's feminist publishing and book selling project Emily Books or indie publisher Coffee House Press' book about cat videos were able to raise $42,000 and $31,000, respectively. The all-volunteer literary magazine Guernica was able to raise $27,000 to help pay writers, and publish e-books and special issues.

"This isn't a tip jar," Kreizman said. "It's a place where you can go and get something from the organizations you love while still benefiting them."

The campaign runs for a month, ending June 5. "We'll be biting our nails then for sure," Bass said.

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Corinthian Colleges Files For Chapter 11 Bankruptcy

Students wait outside Everest College, Tuesday, April, 28, 2015 in Industry, Calif., hoping to get their transcriptions and information on loan forgiveness and transferring credits to other schools. (AP Photo/Christine Armario)

Christine Armario / AP

Corinthian Colleges filed for Chapter 11 bankruptcy this morning, capping the nearly year-long saga of the largest for-profit college shutdown in history.

Corinthian is facing a $30 million fine from the Education Department for deceptive practices, as well as three ongoing lawsuits from state attorneys general that allege the company lied to its students about their chances of getting jobs and transferring credits.

Though the suits seek restitution for former students, Corinthian's bankruptcy filing make clear that recovering any financial penalties is likely an impossibility: the company said it had $19 million in assets and $143 million in debt.

Over the past 10 years, Corinthian had raked in some $10 billion in revenue, with the vast majority — well over 80% — coming from taxpayers in the form of federal financial aid. Before its enrollments slumped and legal allegations of wrongdoing piled up, Corinthian reached a height of 113,000 students in 2010 and a 2009 valuation of $1.4 billion.

Corinthian shuttered its 28 remaining campuses last week, leaving some 16,000 students without a school to attend. The company had previously sold off 50 of its campuses in the wake of a move by the Education Department last June to cut off the company's access to federal financial aid.

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McDonald's Has A Turnaround Plan, But The Details Are Vague

The company’s sales have been falling for more than a year, and its CEO has announced its plan to get things back on track. The plan, however, is short on specifics.

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McDonald's new chief executive Steve Easterbrook this morning announced his plans to turn around the lagging performance of the world's largest fast food chain. The CEO will restructure the business, but appears to be largely sticking with ideas that had been laid out by his predecessor Don Thompson, who stepped down on March 1.

Those in the restaurant business had hoped for greater details on new initiatives such as custom burgers or all-day breakfast. "There is no more clarity on new products or changes in operations," says Richard Adams, owner of Franchise Equity Group, a consulting firm focused on McDonald's franchisees.

This is McDonald's first major turnaround initiative in over a decade. In 2003, the company appointed Jim Cantalupo as CEO to revive growth under what was then called the "Plan to Win" that resulted in sales gains.

Easterbrook did not veer dramatically from McDonald's previously announced plans. Restaurants will continue to pursue what has been called the McDonald's Experience of the Future. It focuses on improving the chain's food quality, faster and more accurate service, new ordering technology such as apps and kiosks, and restoring trust in the brand, which has been damaged by deteriorating views on fast food and competition from other chains touting better ingredients.

The company set to announce more details on the turnaround plan in a call with investors on Monday morning.

Easterbrook announced a number of organizational changes, including a reorganization of McDonald's market segments, which are currently divided into geographic regions. That is set to change; as of July, the business will be divided into four segments: the U.S., International Lead Markets (Australia, Canada, France, Germany, and the U.K.), High Growth Markets (China, Italy, Poland, Russia, South Korea, Spain, Switzerland, and the Netherlands). All the rest will be grouped together as "Foundational Markets."

McDonald's will also refranchise about 3,500 company owned stores by the end of 2018, increasing the share of franchised restaurants to 90% from 81%. This initiative is part of efforts to turn over more control of restaurant operations to franchisees, who have a better understanding of what works in local markets. The company last year announced a restructuring of its U.S. business to give franchisees greater decision-making power. The company expects the reorganization and refranchising will result in about $300 million in annual cost savings.

This doesn't, however, translate directly into more winning back young consumers who are eating elsewhere. "You can't cost cut to the hearts of millennials," said Aaron Allen, a restaurant industry consultant.

Easterbrook has been charged with turning around the company's performance. McDonald's domestic same store sales have fallen for six consecutive quarters, and global comparable sales have fallen for four straight quarters.

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Silicon Valley Reimagines School

AltSchool

In Christie Seyfert’s classroom at AltSchool in San Francisco, 15 students in fifth through eighth grades spend their days in a “shared communal workspace” that they themselves helped design. They build go-karts and interactive art museums, write and discuss poetry, and take weekly community field trips.

Their work is guided and documented by AltSchool’s house-made technology: a “playlist” of curriculum, student work and personalized tasks accessed on iPads and Chromebooks in every classroom.

This is school as Silicon Valley envisions it, and it’s growing rapidly. AltSchool announced today that it raised $100 million in Series B funding, including $25 million in debt, with an eye towards creating a national network of “micro-schools” that combine AltSchool’s education philosophy with its tech platform. The money was raised at an undisclosed valuation.

“Our aim is to create the new model for education in the 21st century,” said Max Ventilla, AltSchool’s founder and CEO and a former executive at Google. He calls it “Montessori 2.0”: a high-tech spin on the 100-plus-year-old Montessori curriculum, which focuses on independent, self-directed learning.

The technology is at the core of the AltSchool model. It functions as a “central operating system,” a platform not just for students’ “playlists” but for larger management and organizational tasks like admissions, attendance, testing and tracking student progress, communicating with parents and ordering classroom supplies.

AltSchool

From a tiny group of 20 students in a “true one-room” San Francisco schoolhouse in 2o11, AltSchool has grown to four locations in the Bay Area, and plans to open four more this year, expanding to Brooklyn and Palo Alto.

For now, AltSchools are private schools with hefty tuition: the Brooklyn location will set parents back $27,500 a year.

But part of the funding will go towards expanding the AltSchool model beyond tony private schools, Ventilla said, by allowing charter and public schools to become part of the AltSchool network.

For those non-private schools, AltSchool — a for-profit company — would function essentially as a charter management organization, licensing the company’s technology and handling day-to-day operations, as well as providing guidance, such as an AltSchool-developed “heatmap” to identify neighborhoods for future schools.

Schools could also buy and use pieces of AltSchool technology in their existing models, Ventilla said.

“We’re working to have a maximal surface area for learning — a school system that’s not only scalable, but doesn’t have the traditional supply constraints, like local administrators,” Ventilla said.

AltSchool students spend part of the day moving freely among tasks, using their devices to follow high-tech “playlists” that are personalized to their learning needs; teachers assemble the daily queues for each child based on a cache of lessons and projects shared among the AltSchool network. Though work is often done off-screen, on paper or in “design studios,” students document their projects on the devices — using an iPad, for example, to photograph an art project, then put it onto their playlist for a teacher to view.

The company employs 50 people, including 25 coders, to engineer the AltSchool platform; with the funding, Ventilla said, it plans to hire more.

AltSchool's "playlist" as seen by teachers and students.

AltSchool

Other Silicon Valley schools have rejected technology altogether, but AltSchool works to integrate it into the classroom in a reasonable way, teachers said. Seyfert’s students, on average, spend about 30 percent of their day on their devices, she said.

“We’ve been prototyping wearables out of open components,” Ventilla said. “Initally it’s about making sure that sudents are in a radius of proximity, but ultimately, it could provide some interesting signals around the engagement of students.”

Mara Pauker is leading the opening of a new AltSchool location in the Brooklyn Heights neighborhood, one of the city's most affluent areas, which was scouted by AltSchool's real estate team. "I think of the technology as a shared repository," Pauker said. "Teachers are doing incredible work for their students, and that's all captured and then shared via the playlist. And you have engineers that are constantly in communication with teachers about the schools they've created."

Pauker came to AltSchool from the Blue School in lower Manhattan, which was originally established by the Blue Man Group.

In the smaller world of ed-tech, the $100 million funding round is especially significant: AltSchool is just the fourth ed-tech company this year to raise a six-figure sum, and in 2014, only three funding rounds topped that number.

The funding round, which includes $25 million in debt to build new schools, combines $50 million in traditional venture capital money from Andreessen Horowitz and Founders Fund with $50 million from nonprofits like Mark Zuckerberg and Priscilla Chan’s fund at the Silicon Valley Community Foundation. It raised $33 million last year in a Series A round.

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There's One Word Hotel Execs Never Say When Discussing NYC Struggles: Airbnb

Only one of America’s four largest hotel operators has ever mentioned the word “Airbnb” on an earnings call. And none of them have listed it as a competitor in New York, where all are struggling.

Stan Honda / Getty Images

Something is biting into the hotel industry's profits in New York City, one of its most important markets. It's bad enough that America's biggest hotel operators have all discussed it on earnings calls with analysts: Revenue from NYC hotel rooms is falling even as a record number of tourists flood the city.

But nobody can quite put their finger on what it might be. Executives at Marriott, Starwood, Hyatt, and Hilton appear to be scratching their heads as to why they're losing so much revenue in New York, the city that also happens to be Airbnb's largest market.

"As everybody knows, New York has the weakest revenue per available room [RevPAR] market in the United States today," Marriott CEO Arne Sorenson said Thursday on the company's first quarter earnings call.

The story was the same at Starwood. "We did not see a material decrease in the number of international travelers inbound to either the U.S. overall, or New York specifically in the first quarter," CFO Thomas Mangas said on an earnings call the day before. "We have, however, seen a decrease in the average daily rate in New York from those international guests."

Indeed, the number of international visitors—the heaviest users of Airbnb—has continued to climb over the last 10 years, reaching a record high of 11.4 million in 2013. Still, hospitality giants like Marriott, Starwood, Hilton, and Hyatt have found themselves struggling to grow revenue in the city.

When asked what the problem is, they cite issues like "supply growth" and a "strong dollar" as reasons they've failed to thrive in the New York City market. But there's one word they've never said when discussing their New York challenges, and it's becoming an elephant in the room for all four companies.

Neither Hilton nor Hyatt have never said the word "Airbnb" on an earnings call, in any context, according to a review of call transcripts. At Starwood, the apartment rentals site has only come up once, in April 2014, when an analyst asked then-Starwood CEO Frits van Paasschen to address the impact it has had on Starwood's business.

"Yeah, look, I think that the growth in Airbnb is a real phenomenon," van Paasschen said. "And I think the perspective that anything that reflects on a more healthy demand for travel and encouraging people to get out, just like discount airlines as well, is generally a good thing for travel, not the other way around."

Marriott, whose CEO this week described New York as the weakest market in the country for squeezing dollars from hotel rooms, has also never mentioned Airbnb on an earnings call, although it did come up at an analysts day last September.

"I think at this moment in time, while there may be some minor overlap with us for the most, the customer that they're going after is different than ours," said Stephanie Coleman Linnartz, Marriott's chief marketing and commercial officer, in response to a question.

"Our customers are very focused on having a certain quality of product, on reliability, certain promises around safety and security," she said, "and I think Airbnb still has a lot of stuff to work out, in a variety of different areas."

While none of the industry's biggest players have mentioned Airbnb as a revenue killer in New York City, some hint at a flood of new rooms suddenly available, attributing some of their challenges to "supply growth."

"RevPAR growth at our comparable owned hotels in NewYork City was slightly negative in the fourth quarter due primarily to the impact from new supply in the market. Supply growth in New York City continues to trend above the U.S. average," said Hyatt CEO Mark Hoplamazian on the company's fourth quarter 2014 earnings call.

"New York is the notable exception" to the strong fundamentals of the U.S. hotel industry, Hilton CEO Christopher Nassetta said on a call this week. "Strong demand is being tempered by supply growth many times greater than the U.S. average."

Where is that growth coming from? It's all a bit of a mystery, according to the call transcripts. Airbnb, meanwhile, has about 16,000 New York listings, and is expected to cross the $500 million revenue mark by the end of this year.

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Uber's Biggest Competitor In China Is Launching A Designated Driver Service

With 30,000 drivers at launch, the homegrown transportation service looks to back Uber into an unfamiliar corner.

Kuaidi Dache app

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Starting next week in Beijing, riders of the most popular transportation app in China won't have to worry about driving home after a night out. The recently merged companies Kuaidi Dache and Didi Dache (there is no plan to bring the two companies' names under one service) are banding together to roll out a designated driver service that lets riders request a driver to pick up their car and drive them home.

Riders won't have to wait long to be picked up — the company's designated driver service has already signed up 30,000 drivers.

In theory, the service is similar to any standard ride-hail: pull up the app, hit a button, the app will find the nearest driver, connect the two, and then the driver will meet the rider at their car. For the service each driver is equipped with an electric scooter — provided by the company — that he or she will use to scoot over to and from the customer's car.

The company is using a tiered-pricing feature that mimics that of its existing services. Before 10:00 p.m. there is a lower base fare, and then after midnight the price to request a designated driver will increase — but not by much, according to Lee. "For example, after 12:00 a.m. if you are going within 10 km it will cost 99 RMB, which is around $15."

Currently, the company is only offering the service at night and only in Beijing. But Kuaidi co-founder and chief strategy officer Joe Lee told BuzzFeed News that over time Kuaidi and Didi plan to scale it into different parts of the day and many new cities.

"We're looking at covering at least 60 top-tier and second-tier cities by the end of the year," Lee said. "Just like the limo service that we offer, we spent six months expanding it into 60 cities. [Also] in the first phase of our limo business we focused on clubs and bars and then found that there were people who needed it during the day and then made it available. We'll do the same with this service."

When Kuaidi Dache and Didi Dache merged in February to become the largest transportation company in the country, Lee told BuzzFeed News that he wanted the app to become an all-around transportation platform and move beyond taxis and limos. The designated driver service is the first of many planned initiatives, which include carpooling and shuttle services.

Beyond the technical challenges of developing an efficient carpooling service, Lee said simply gaining the trust of its Chinese citizens can be difficult. In an earlier interview Lee said: "In China people are lacking of trust of each other. But we already broke that lack of trust issue with the [feedback system] for riders and drivers. I think that we can use this [newly established trust] to introduce carpooling."

While the newly merged Kuaidi and Didi Dache to snatch up ride-hail market share in China, Uber has struggled against regulatory challenges in the region. Yesterday evening, local authorities raided and then shut down an Uber office in the city of Guangzhou for "unlicensed operations."

An Uber spokesperson told BuzzFeed News the company is working closely with the authorities "to continue to offer our service to the residents of Guangzhou."

According to Lee, the issues stem from Uber's failure to cultivate a strong relationship with local authorities. "From the government officials that I personally or my team has been in touch with, Uber doesn't have a very strong relationship with them and they don't know the policies," Lee said. "As you can imagine, the most important part is you have to spend a lot of time talking to the government."

Currently, the Chinese market represents an unfamiliar position for Uber. Though the ride-hailing giant recently received funding from Chinese web services market Baidu, the company is still struggling to compete with the homegrown transportation alliance. After the merger, Didi-Kuaidi are in 350 cities, while Uber maintains a foothold in only in nine mainland cities. And while Uber has had only limited success with its core ride-hailing services in the country, Didi-Kuaidi is beginning to expand its reach into nontraditional transportation options.

Meanwhile, according to Didi-Kuaidi spokesperson Rebecca Dubow, the China-native transportation company is operating without issue throughout China.

"After the merger we thought we would double our team so we can take some time off," Lee said. "But it seems we're gong to launch a lot more services so we could not rest. I think 2015 is going to be a very exciting year."

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"Uptown Funk" Gets Five New Songwriters After Copyright Claim

The hit funk revival anthem was accused of sounding too similar to The Gap Band’s ’70s classic “Oops Upside Your Head.”

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When it was released last November, "Uptown Funk," the Mark Ronson hit featuring Bruno Mars, had six songwriters. But earlier this week, the song's writing credits grew by five, according to report in Billboard, with members and producers of The Gap Band joining Ronson's merry funk brigade.

The additional writing credits, which will give The Gap Band a reported 17% share of the song's publishing royalties and reduce the shares held by the original six songwriters (including Ronson, Mars, Jeff Bhasker, Christopher Gallaspy, Phillip Lawrence, and Trinidad James), were added as the result of a copyright claim filed by The Gap Band's U.K. publisher Minder Music, according to Billboard. The publisher argued that "Uptown Funk" contains similarities to "Oops Upside Your Head," a 1979 hit by the pioneering funk band fronted by brothers Charlie, Ronnie, and Robert Wilson.

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Since its release, many critics have noted the potpourri of '70s funk allusions in "Uptown Funk," which tied the record for second-longest running No. 1 last month after 14 weeks atop the Billboard Hot 100. After the high-profile "Blurred Lines" copyright case in March, in which Robin Thicke and Pharrell Williams' were ordered to pay $7.3 million to the family of Marvin Gaye for infringement, some openly wondered whether "Uptown Funk" could suffer a similar fate.

The retroactive addition of songwriters isn't that uncommon in the music industry. In January, Sam Smith added Tom Petty and his songwriting partner Jeff Lynne to the credits of his 2014 hit "Stay With Me" after allegations that the song borrowed from Petty's 1989 song "I Won't Back Down."

Representatives for Mark Ronson and and Charlie Wilson of The Gap Band hadn't responded to a request for comment at publication time.

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