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Tesla continues to deal with former employees and potential IP theft

(BUSINESS NEWS) Tesla has found itself at the center of numerous lawsuits against former employees and the theft of intellectual property, potentially jeopardizing their industry leadership position.

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Tesla logo on a piece of machinery.

Elon Musk has had a lot on his mind in the last few days. He couldn’t resist getting in on the incredibly volatile Gamestop stock saga, announced a $100 million prize in the pursuit of carbon capture technology, thinks you should be using Signal instead of other messaging apps, and has sent other stocks into bullish states with his Twitter account. He’s always at the center of something, and his impact resonates throughout a ton of markets, industries, and the minds of the tech world.

He’s building a new factory in Austin, is about to roll out new trucks, and was even crowned the world’s richest man at the beginning of January. I mean, that’s a lot. A whole lot. That’s a lot squared.

It should come as no surprise, then, that Tesla – the company he is most widely known for – is an intensely scrutinized hotbed of activity, and is working relentlessly to remain at the forefront of automotive technology. This takes a lot of smart people all working on a lot of problems that have never been encountered before, and must be negotiated as quickly as possible to bring automated driving to the masses as a reliable, available technology.

Unfortunately, Tesla’s market leader position is under fire from a lot of competitors – Apple wants in and could bring new cars by 2024, there’s always Waymo, and LIDAR is a new challenger. All of that would be enough to deal with for any CEO, but Musk is also weathering an entirely different set of storms – theft of intellectual property by former employees.

Right now, Tesla is suing Alex Khatilov, alleging that he stole files related to their Warp Drive software and moved them to his personal Dropbox. According to CNBC, these files concern the “back-end software system that Tesla developed to automate a range of business processes involved in manufacturing and selling its cars.” Khatilov purports that he forgot about moving these files, as shown in the official lawsuit, and that he only found out about such legal proceedings when he was contacted by the New York Post.

This is not the first time Tesla has found itself having to sue employees for potential breaches of its proprietary data.

Martin Tripp was recently ordered to pay a sum of $400,000 to Tesla due to confidential information he leaked to a reporter, while another suit involved Zoox, a startup that was given classified data from when it hired former Tesla employees. And yet, there’s still more cases – Guangzhi Cao uploaded sensitive materials into his iCloud account, and is alleged to have passed it onto a chief competitor (Xiaopeng Motors).

There’s even another case where Tesla sued its own former Autopilot program director Sterling Anderson, believing that he took restricted knowledge to form his own startup. While this case was dropped later on, it still plays into the overall pattern that Tesla repeatedly engages those who may or may not be lifting their knowledge, projects, and code and delivering them to competitors.

In the world of software engineering, employee theft is a common issue that can potentially ruin a company or crush a startup. This isn’t even taking into account the ever-present threat of cybercrime, with hackers and other groups working to steal data and technology for any number of reasons (just for fun, as digital mercenaries, or to gain an edge in competitive industries). IP theft between nations has become a topic of great concern, with the recent United States administration going to great lengths to combat the problem.

It remains to be seen what will happen with regard to Tesla’s most recent lawsuit, but it is sure to be a volatile and significant event. Corporate espionage continues to become a bigger and costlier problem by the day, and with the rise of new industries at potentially trillions at stake, it’s likely we’ll hear about more cases in the future.

Robert Snodgrass has an English degree from Texas A&M University, and wants you to know that yes, that is actually a thing. And now he's doing something with it! Let us all join in on the experiment together. When he's not web developing at Docusign, he runs distances that routinely harm people and is the kind of giant nerd that says "you know, there's a King of the Hill episode that addresses this exact topic".

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Business News

What small business owners can learn from Starbucks’ new D&I strategy

(BUSINESS) Diversity and inclusion have been at the forefront of Starbucks’ mission, but now they’re shifting strategy. What can we learn from it?

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Hands of all different skin colors on green background representing Starbucks' D&I.

Starbucks was one of many companies that promised to focus on diversity and inclusion efforts after the death of George Floyd by Minneapolis police in 2020. What sets Starbucks apart from other companies were its specific goals.

How It Started

They began with hiring targets and have now added goals in corporate and manufacturing roles. Starbucks’ plans and goals revolve around transparency for accountability. They released the annual numbers for 2021 as a way to help hold themselves accountable. The data they’ve released so far show that they’ve met nearly a third of their 2025 goals according to Retail Brew. Because of this information, we can see why they are choosing to move in the direction of manufacturing and corporate jobs. In 2021, POC’s fell to 12.5% of director-level employees from 14.3% in 2020 in manufacturing.

How It’s Going

Per Starbucks’ website stories and news, “[I]t will increase its annual spend with diverse suppliers to $1.5 billion by 2030.  As part of this commitment, Starbucks will partner with other organizations to develop and grow supplier diversity excellence globally.” To put that into perspective, they spent nearly $800 million with diverse suppliers in 2021. With these moves, by 2030, it will increase by almost double.

As part of their accountability and progress, they plan to partner up with Arizona State University to give out free toolkits to entrepreneurs on fundamentals for running successful diverse-owned businesses. Another goal they’ve listed is to boost paid media representation by allocating 15 percent of the advertising budget to minority-owned and targeted media companies to reach diverse audiences.

At the heart of all this information on their goals and future plans, data transparency and accountability are what’s forcing them to look at the numbers to make specific goals. They are doing more than just throwing money at the problem, they are analyzing how they can do better and where the money will make a difference. Something that, as entrepreneurs, we should all do.

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Peloton is back-pedaling: Reports of price increases, layoffs, and cost cuts

(BUSINESS) After a recording of layoffs leaks, ‘supply chain’ issues cause shipping increases, and they consult for cost-cutting, Peloton is doomed.

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Man riding Peloton bike with instructor pointing encouragingly during workout.

Is Peloton in Trouble?

According to many reports, Peloton had success early in the pandemic when gyms shut down. Offering consumers a way to connect with a community for fitness along with varying financing options allowed the company to see growth when many other industries were being shuttered.

After two years, CNBC reports that the company is “being impacted by …supply chain challenges” and rising inflation costs. According to the report, customers will be paying an additional $250 for its bike and $350 for its tread for delivery and setup.

As demand has decreased, Peloton is also considering layoffs in their sales and marketing departments, overheard in a leaked audio call. The recording details executives discussing “Project Fuel” where they plan to cut 41% of the sales and marketing teams, as well as letting go of eCommerce employees and frontline workers at 15 retail stores.

Nasdaq reported that the stock fell 75% last year, after a year where it soared over 400%.

Peloton reviewing its overall structure

According to another report from CNBC, Peloton is working with McKinsey & Company, a management consulting firm, to lower costs as revenue has dropped and the growth of new subscriptions has slowed since the pandemic. Last November, according to NPR, Peloton had “its worst day as a publicly-traded company.” It also anticipates greater losses in 2022 than originally predicted. It makes sense that the company would reexamine their strategy as the economy changes. They aren’t the only one that is raising prices amid supply chain issues.

It will be interesting to watch how Peloton fares

Peloton has a large community that pays a monthly fee for connected fitness. While growth has slowed, the company still has a strong share of consumers. Although it is facing more competition in the home fitness market and more gyms are reopening, as Peloton adjusts to the new normal, it should remain a viable company.

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Business News

CEO is offering folks thousands to *quit* their jobs, with one catch

(BUSINESS) A CEO out of Arizona is challenging employment norms by offering a sort of “sign-off” bonus upfront, but this method has one fatal flaw.

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Man counting cash in his hand representing the CEO offering money to employees who quit.

Chris Ronzio, the CEO of Trainual, a software company in Arizona that aims to systemize and scale your small business, is offering cold hard cash to quit your job in an unconventional ploy to bypass the effects of the Great Resignation.

Before you rush to turn in your notice and make some extra cash, you should know that this offer is dependent on being selected as a hirable candidate and making it through the hiring process for Trainual. This option is also offered to new hires after 2 weeks of employment.

This model of employment gives the employee the ability to fire the company and walk away with a little sum of money. The thought process of the CEO was outlined in an article by the Insider, saying it is a strategic move to retain top talent and maintain a strong company culture. While this is a unique approach…it has a glaring flaw. The offer is only good for the initial two-week period. However, it can take some time to recognize the shortcomings of any company when you begin employment. We can all recognize the long-term financial potential of reoccurring income and while $5,000 is not anything to shake your finger at, it will eventually be gone. I think we can all agree that constructive criticism can be difficult to swallow at times, however, if Trainual was truly invested in this model they would extend the offer at other key times during employment. What if this offer was again available at the 1-year mark? If the offer reappeared at a one-year review, the turnover may increase.

Per the Insider article, Ronzio was quoted as saying, “With today’s market, hiring teams have to move quickly to assess candidates and get them through the process to a competitive offer, so it’s impossible to be right 100% of the time,” Ronzio said. The CEO added, “The offer to quit allows the dust to settle from a speedy process and let the new team member throw a red flag if they’re feeling anything but excited.”

These statements detail another dimension to consider which is the employment hiring process and timeline. If top candidates are in such high demand that the process has to be sped up to secure a workforce, this monetary compensation can help to ensure the hiring decision. Although, when the offer was implemented in May of 2020, the offer was $2500, half of what it is now. Ronzio reasoned that they could stay while they looked for another job so they increased the amount to compensate for those with a higher salary range.

Let me preface this by saying that yes, accountability should exist, but I would be interested to know the turnover rate for the hiring team. The cost to the company from this unique approach adds extra weight for those making the decisions on who to hire. The stress the hiring team faces has to be factored into the candidate decisions. How many times can the hiring team get it wrong before they’re let go? While the pressure to hire the right candidate should always factor in, one has to wonder about the effects of this model.

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