Mar 14, 2019

Axios AM

By Mike Allen
Mike Allen

🏀 Good Thursday morning.

Smart Brevity for Selection Sunday: CBS will kick off March Madness at 6 p.m. Sunday by revealing the bracket right away, rather than dragging it out region by region, per AP.

  • "We're going back to basics," said Sean McManus, chairman of CBS Sports. "We're going to release the brackets as fast as we can."

Breaking: Beto O'Rourke is officially running for president.

  • "The challenges that we face right now ... They will either consume us, or they will afford us the greatest opportunity to unleash the genius of the United States of America," he announced this morning.
1 big thing: Too much computer

Illustration: Rebecca Zisser/Axios

We can't assume that adding more technology to our lives will make us completely safe, Axios' Felix Salmon and Joann Muller write:

  • We saw this when a driverless car killed a pedestrian in Tempe, Ariz. And now it's a central question about the crashes of two Boeing jets.
  • Just wait until drones, robots and flying cars go mainstream.
  • But technology has made everything unambiguously safer to date.

Why it matters: The way that Boeing and the FAA resolve the latest crisis should provide a blueprint not only for the aviation industry, but also for autonomous vehicles and many other technologies taking over human decision-making — even the algorithm determining what you watch next on YouTube.

  • Our thought bubble, from Axios editor-in-chief Nicholas Johnston: Too much computer can be anodyne, like Waze directing me off a highway when it erroneously thinks there's a jam up ahead. But it can also be a Boeing flying into the ground because it's confused about a stall.

Be smart: The proof of the pudding — the reason we know that technology has made air travel safer — is right there in the statistics.

  • You don't need to know anything about ground proximity warning systems or wind shear alerts to know that planes have been getting safer.

This is bigger than just aviation. Technology has made cars much safer over time. But it's dangerous to mindlessly extrapolate that tendency into the future.

  • Like aircraft manufacturers, carmakers design redundant sensors and fail-safe technology into their vehicles to maximize safety.
  • Automated vehicles need human monitoring, just as planes do. But without proper training and education, drivers — or pilots— are unprepared to deal with situations where something goes wrong.
2. One parent's account of the college scandal
Rick Singer leaves federal court in Boston on Tuesday (Steven Senne/AP)

Axios' Dan Primack interviewed a well-known Silicon Valley investor who says he was offered a "side door" into USC by Rick Singer, who told a federal court that he helped 761 families cheat the college admissions process.

  • The investor agreed to tell his story as long as his name wasn't used. He says he did nothing wrong, and that law enforcement hasn't contacted him.

Here's his story:

When you have kids in their junior year of high school, all the parents start talking about college counselors and who they're using. ... Someone had mentioned Singer to me and given me his cell phone number, so I called him up. He came to our house four, maybe five times. ... Test prep. Getting all the applications in order. Things like that. ...
But then it got weird. He sort of said: "I think I can get your kid into USC, but he's going to be a football player." Now my kid only played freshman football and wasn't sure he wanted to go to USC ...
Singer tells me there would be a spot and he doesn't actually have to play football. He makes it all sound so reasonable, except that he also says he'll need a picture and asks if I have one from freshman football. ...
He uses the word "side-door." Something like, "Your kid can't really get in here, but I've got a way to get him in the side-door." ... I finally just said to give some other child the opportunity. No money was ever discussed with me, outside of the regular monthly fee to do the standard stuff. But the idea of doctoring up an application was not my sort of thing.
3. Startups spread beyond Bay Area

Illustration: Sarah Grillo/Axios

More startup founders are forgoing Bay Area and its sky-high rents and intense competition for engineering talent. Instead, they're setting up shop in places like Austin, Seattle and even New Mexico, Axios' Ina Fried writes from S.F.

  • Why it matters: As tech becomes a growing part of the economy, Silicon Valley doesn't have to be home to most new startups.

Where to go: As for which cities will benefit, Bloomberg Beta partner Roy Bahat said to look at where Google, Apple and others are setting up shop.

  • "If you want to see where founders of the future will go, look at where today's successful companies are opening new offices," he said. "Every hire in one of those offices could be tomorrow's extraordinary founder."
  • That means cities like Seattle, Portland and Austin that already have their share of tech growth — but also emerging tech hubs like Atlanta, Northern Virginia and Indianapolis.

Be smart: Silicon Valley isn't going anywhere, and for every startup or founder who leaves the Bay Area, someone else graduates from Stanford or wants to move there. This is about tech becoming a bigger part of the overall economy.

4. Exclusive ... Brad Stone sequel: "Amazon Unbound"

Brad Stone's 2013 bestseller, "The Everything Store," told the story of Amazon's rise. Now, he's writing a sequel, Axios' David McCabe scoops.

  • Simon & Schuster expects to publish "Amazon Unbound" in fall 2021.
  • "Stone will explore the company’s ongoing successes and failures and deconstruct its strategies for growth," the publisher says in a release, "and in doing so pose the ultimate question: Is Amazon good for us?"

Stone, who leads Bloomberg's tech coverage, said in a statement:

  • "I’ve come to realize that my first book explored only the first few chapters of this historic story. "Now I want to chronicle how the everything store became the everything company."

Be smart: Tech has transformed from a nerdy niche to one of the world's most prosperous and ubiquitous industries, and publishers and Hollywood can't get enough.

  • There are books in the works about Uber, Facebook, Instagram and Tesla.
  • Screenplays about Facebook's Cambridge Analytica scandal and Snapchat founder Evan Spiegel have been picking up buzz.
5. Facebook data deals under criminal investigation
Bloomberg Businessweek writes about how Facebook polices content, one year after Cambridge Analytica scandal broke.

"Federal prosecutors are conducting a criminal investigation into data deals Facebook struck with some of the world’s largest technology companies," the N.Y. Times scoops.

  • "A grand jury in New York has subpoenaed records from at least two prominent makers of smartphones and other devices."

Facebook statement: "We are cooperating with investigators and take those probes seriously."

6. Running with Beto
John Edwards in 2007 ... Beto O'Rourke today (hat tip: Freddie Campion)

Sure, there are morning shows and late-night comedians. Beto O'Rourke announced his candidacy with an Annie Leibovitz cover of Vanity Fair.

  • The 17-page spread in the April issue hits newsstands March 28, giving Editor Radhika Jones a massive news driver.

Joe Hagan, who wrote the cover story, tweets that he spent two months reporting this story before ever meeting Beto, starting last December:

  • "I convinced Beto O'Rourke to do this cover story after walking up to his house and introducing myself one Sunday afternoon. He was lounging on the front veranda, barefoot in blue jeans and T-shirt, talking on his cell phone."

Hagan captures O'Rourke's "radical openness":

Beto O’Rourke seems like a cliff diver trying to psych himself into the jump. And after playing coy all afternoon about whether he’ll run, he finally can’t deny the pull of his own gifts. "You can probably tell that I want to run," he finally confides, smiling. "I do. I think I’d be good at it." ...
The more he talks, the more he likes the sound of what he’s saying. "I want to be in it," he says, now leaning forward. "Man, I’m just born to be in it, and want to do everything I humanly can for this country at this moment."

Worthy of your time.


Beto first confirmed he's running last night in a text message to his local NBC station, KTSM:

  • "I'm really proud of what El Paso did and what El Paso represents. It's a big part of why I'm running. This city is the best example of this country at its best."
7. Quote du jour
Courtesy TIME

What's new: "Paul J. Manafort ... has been charged in New York with mortgage fraud and more than a dozen other state felonies, the Manhattan district attorney, Cyrus R. Vance, Jr. said," per the N.Y. Times.

  • Why it matters: "The president ... has no [pardon] authority in state cases."

🎤 Drop the mic: "Doesn’t matter if it’s Cy Vance or Cy Young," said Kevin Madden, a Republican consultant who has worked on several presidential campaigns, told The Times.

  • "Any and every action even perceived to be a threat against him or his presidency will be framed as political retribution and an effort to undermine his 2016 victory."
8. 🐸 Swamp secrets

The Washingtonian's Luke Mullins reveals lobbying hacks in Trump's Washington — including paying shills who go on Fox News, and super-targeting Twitter ads to IP addresses covering the White House and Trump hotel:

One consultant told me he has geofenced the Kalorama home of Jared Kushner and Ivanka Trump with digital ads in an effort to shape their views on an issue.
9. First look: Canary in the coal mine?

In first-quarter results of the USG Corp. + U.S. Chamber of Commerce Commercial Construction Index, all three of the index's leading indicators —confidence in new business, revenue, and backlog — dropped for the first time.

  • Why it matters, per the forthcoming report: "Commercial construction is one of the best barometers of an economy, and when it starts to falter, it's a sign that there's cooling ahead."
  • The report "pins the slowdown on a combination of trade disputes, government shutdown, and immigration stalemate."
10. 🎧 1 pod thing

There's a corporate podcast craze, with some of the biggest U.S. companies "trying to make podcasting the new corporate memo," The Wall Street Journal writes in an A-hed (subscription):

  • "The problem is getting their employees to pay attention."
  • But some hosts claim a fan base: One recent guest called host Rusty Dunn "the Ryan Seacrest of Caterpillar."
Mike Allen