TIME passes. Jane Jacobs, the great lover of cities who stared down Robert Moses' bulldozers and saved many of New York's most precious neighborhoods, died last week at 89. It is a loss for those who value urban life. But her death may also give us permission to move on, to let go of the obsessive belief that Ms. Jacobs held the answer to every evil that faces the contemporary city.

Don Hogan Charles/The New York Times

BIG BUT NOT BAD The plaza at Lincoln Center, silence amid chaos.

For New Yorkers, Ms. Jacobs's life remains suspended between two seismic events: The publication, in 1961, of "The Death and Life of Great American Cities" and her showdown in the late 60's with Mr. Moses over a proposed Lower Manhattan Expressway that would have reduced much of SoHo's handsome cast-iron district to rubble. The expressway was killed by Mayor John V. Lindsay in 1969.

By then, Ms. Jacobs had fled for Toronto, and Mr. Moses, who died in 1981, had lost much of his power and prestige. But in the popular imagination, the two are forever at odds: the imperious city planning czar versus the tireless public advocate. Today, the pendulum of opinion has swung so far in favor of Ms. Jacobs that it has distorted the public's understanding of urban planning. As we mourn her death, we may want to mourn a bit for Mr. Moses as well.

Her argument was simple enough, radically so. Horrified at the tabula rasa urban renewal strategies of the 1950's, she argued for a return to the small-scale city she found in Greenwich Village and the North End of Boston  the lively street life of front stoops, corner shops and casual personal interaction.

Mr. Moses, tellingly, once dismissed her and her ilk as "nobody but a bunch of mothers." He was partly right. By standing up for the intricate, individual relationships that define the inner life of cities, she allowed a generation to challenge the authority of patronizing  and uniformly male  city planners in gray suits.

An urban flâneur of the first order, she reminded us that cities could only be fully understood with our eyes, feet and ears  not from the distant abstraction of architectural drawings.

But the problems of the 20th-century city were vast and complicated. Ms. Jacobs had few answers for suburban sprawl or the nation's dependence on cars, which remains critical to the development of American cities. She could not see that the same freeway that isolated her beloved, working-class North End from downtown Boston also protected it from gentrification. And she never understood cities like Los Angeles, whose beauty stems from the heroic scale of its freeways and its strange interweaving of man-made and natural environments.

The threats facing the contemporary city are not what they were when she first formed her ideas, now nearly 50 years ago. The activists of Ms. Jacobs's generation may have saved SoHo from Mr. Moses' bulldozers, but they could not stop it from becoming an open-air mall.

The old buildings are still there, the streets are once again paved in cobblestone, but the rich mix of manufacturers, artists and gallery owners has been replaced by homogenous crowds of lemming-like shoppers. Nothing is produced there any more. It is a corner of the city that is nearly as soulless, in its way, as the superblocks that Ms. Jacobs so reviled.

Nor did Ms. Jacobs really offer an adequate long-term solution for the boom in urban population, which cannot be solved simply through incremental growth in existing neighborhoods.

Just as cities change, so do our perceptions of them. Architects now in their mid-40's  Ms. Jacobs's age when she published "Death and Life"  do not share their parents' unqualified hatred of Modernist developments.

They understand that an endless grid of brick towers and barren plazas is dehumanizing. But on an urban island packed with visual noise, the plaza at Lincoln Center  or even at the old World Trade Center  can be a welcome contrast in scale, a moment of haunting silence amid the chaos. Similarly, the shimmering glass towers that frame lower Park Avenue are awe-inspiring precisely because they offer a sharp contrast to the quiet tree-lined streets of the Upper East Side.

Perhaps her legacy has been most damaged by those who continue to treat "Death and Life" as sacred text rather than as what it was: a heroic cri de coeur. Of those, the New Urbanists are the most guilty; in many cases, they reduced her vision of corner shops and busy streets to a superficial town formula that creates the illusion of urban diversity, but masks a stifling uniformity at its core.

This is true in large-scale projects as diverse as Battery Park City or Celebration, Fla., where narrow streets and parks were supposed to create an immediate sense of community. As it turns out, what the New Urbanists could not reproduce was the most critical aspect of Ms. Jacobs's vision, the intimate neighborhood that is built  brick by brick, family by family  over a century.

For those who could not see it, the hollowness of this urban planning strategy was finally exposed in New Orleans, where planners were tarting up historic districts for tourists, even as deeper social problems were being ignored and its infrastructure was crumbling.

The answer to such superficiality is not to resurrect the spirit of Robert Moses. But in retrospect his vision, however flawed, represented an America that still believed a healthy government would provide the infrastructure  roads, parks, bridges  that binds us into a nation. Ms. Jacobs, at her best, was fighting to preserve the more delicate bonds that tie us to a community. A city, to survive and flourish, needs both perspectives.

The lesson we should take from Ms. Jacobs was her ability to look at the city with her eyes wide open, without rigid prejudices. Maybe we should see where that lesson leads next.

Summary: It's time to let go of the obsessive belief that Jane Jacobs held the answer to every evil that faces the contemporary city.


You've finally bought a little patch of Mother Earth that you can call your own. Then you discover your neighbor is encroaching. Perhaps his fence is two feet over the property line, or the dying limb of his sugar maple is overhanging your garage, or his barking dog is keeping you up all night. How can you deal with such encroachments?

First, let's clarify a couple of terms. An easement is a right of access that has been agreed-upon by the property owner, in writing, or mandated by a government decision. Perhaps the first owner of your house granted your neighbor access to a dock on your property in perpetuity, or the city has retained an easement to access power lines that run across the back border of your property. If the easement is recorded, you don't have much recourse.

An encroachment is tresspass without permission, and you can do something about it. If your neighbor has taken a few feet of your land when building his fence, you can take steps to take back your land. A caveat, however; make sure you know where your true property boundaries are. For example: the back edge of my property is fenced, and the fence has a four-foot jog where two abutting properties meet. When I moved in, my neighbor told me that one of those landowners had moved his fence to take four feet of my land before I moved in, and I intended to require him to move it back. To my chagrin, when the property was surveyed, I found that the previous owner of my house had, in fact, taken four feet of my neighbor's property.

If you are confident about the borders of your property, you could approach your neighbor and politely request that he honor these lines. Property owners often become unreasonably confident that the customary boundaries reflect their title, though, so sharing the survey information could help greatly in this discussion. Also, modern surveying techniques are much more accurate than older methods, so in comparing property titles there may be some overlap. These inaccuracies are usually settled by dividing the land in question.

You should also be aware of the laws of adverse possession. If a person has used a portion of your land for a period of time, as identified by state law, he could claim title to it when the statute of limitations for ejection has passed. This often protects fences built off the property boundaries.

At this point, consulting an attorney is money well spent.

According to Consumer Reports, should a neighbor's tree limb falls on your house, obtaining a satisfactory settlement often depends on your ability to prove that your neighbor knew and ignored the hazard.

If you see the potential for such a problem, take an escalating approach to head it off, documenting each step. Politely express your concern to your neighbor. If he disagrees, offer to share the cost of bringing in a tree surgeon or other professional for an opinion.

If your neighbor doesn't respond, follow up with a politely written letter reiterating your concern. Document both. Take photos of the subject of your concern. Consult your insurer to determine coverage should the limb fall on your house.

If the worst does come to pass, you still might have to go to small claims court to get satisfaction. There, your documentation should serve you well.

Noise encroachment is perhaps the most common inspiration for a neighborhood war. To combat it, first familiarize yourself with the local regulations. Make sure you aren't also violating code with your leaf-blower or lawnmower.

Then talk to other neighbors. If they are similarly put out, one of you should approach the transgressor as a representative of the group. This might convince them to address the problem.

Keep in mind that they may not even be aware that the dog is yapping or their child's 50 Cent tunes can be heard two states away. Here, a recording might come in handy, and most of us have the capability, with our cell phones, to record the sounds.

If your neighbor is unresponsive, begin a journal of sounds and times. You may discover that the occasions are infrequent, and your best route to neighborhood peace is to live and let live.

If calling the cops seems like your only remaining option, make sure that you have recordings, your log, names of like-minded neighbors and details of the transgressions ready for the officer, to prove that you aren't a grouch with unreasonable expectations. Don't stand on your stoop and watch the cop call the neighbor to task; this will only cause more resentment.

And for God's sake, don't take your frustrations out on the dog. It is barking for a reason, and that reason is that your neighbor is not treating it properly.

All of these problems are more easily dealt with when neighbors are familiar with one another, so a block party or similar ice-breaker can pay enormously in avoiding a street war. So think about meeting your neighbors there, rather than waiting until you're mad enough to spit.


Illustration by Goran Factory for Fortune

Of all the Silicon Valley IPOs in the past couple of years, Lending Club’s might have been the surest bet of all.

The San Francisco peer-to-peer lender is a star in the world of “fintech,” a growing sector made up of financial technology companies bent on disrupting the traditional banking sector. Its backers include venture capital royalty such as Kleiner Perkins and Union Square Ventures, not to mention Google GOOG and Alibaba BABA . The startup’s gold-plated board of directors includes luminaries such as John Mack, the former CEO of Morgan Stanley MS ; former Treasury Secretary Larry Summers; and Mary Meeker, the one-time doyenne of Internet IPOs who is now a Kleiner partner. In other words, Lending Club LC had assembled a very smart-money crowd. Its much-buzzed-about offering was viewed, understandably, as a slam dunk.

In December 2014, led by underwriters at Morgan Stanley and Goldman Sachs GS , Lending Club priced its shares at $15, above the high end of the proposed range of $12 to $14. The IPO was 20 times oversubscribed and instantly gave the company a market value of nearly $6 billion. On the first day of trading, Lending Club’s stock jumped almost 70% before pulling back to close at $23.42 a share, a one-day pop of 56%. For shareholders who got out quickly, it went in the books as another very successful offering.

Then reality set in. Lending Club’s stock peaked about a week after its IPO, at nearly $26 a share, and has been retreating ever since. Never mind that the startup delivered extraordinary financial results in its first year as a public company: Lending Club’s operating revenue was up more than 100% in the first nine months of 2015 compared with the same period in 2014, and its Ebitda, a measure of earnings before subtracting expenses such as interest and taxes, was up more than 200%. The stock recently traded around $8 a share, nearly 50% below its $15 IPO price.

Lending Club CEO Renaud Laplanche on the floor of the New York Stock Exchange on the day of his company’s IPO in December 2014. The stock got a first-day pop of more than 50%. It now trades well below the IPO price.Photo: Richard Drew—AP

Naturally, Lending Club CEO and co-founder Renaud Laplanche wishes the stock price were higher. But he’s trying to look past short-term vicissitudes. “Part of the main reason for going public was to continue to establish Lending Club’s brand and credibility,” he says. “We’re building a big company. It’s going to take a very long time, but we want to do it in the public eye with full transparency. I think from that standpoint, we got rewarded. I think the Lending Club brand is a lot more established now than it was a year ago.”

That may be true with customers and bankers, but ask any retail investor who made a bet on Lending Club at around $20 a share about the company’s brand today, and the response is likely to be a grimace followed by a torrent of vitriol.

Unfortunately the Lending Club story is not an isolated case. Time and time again during the current IPO cycle, Wall Street underwriters—egged on by ambitious CEOs, hungry venture capitalists, and favored institutional investors—have hyped one technology IPO after another. The bankers price the offerings for perfection, watch them soar on the first day of trading to deliver the coveted first-day spike, and don’t stick around to offer an explanation after the shares plunge below the first-day price. (Morgan Stanley and Goldman Sachs declined to comment for this story.)

Welcome to the world of zombie tech stocks—once-highflying IPOs wandering aimlessly in the wasteland of the public equity markets and understandably unloved by investors. Many have familiar names, such as Zynga (down about 75% from its IPO price) znga , Twitter (down 30%) twtr , and Groupon (down 85%) grpn . Online craft marketplace Etsy etsy recently traded 56% below last year’s price at IPO and 77% under its first-day close. Others that are less well-known—like Nimble Storage (67% below IPO price) nmbl —have been just as disappointing.

To be fair, some major tech IPOs have soared in recent years, among them LinkedIn lnkd , Tesla Motors tsla , and, after a rocky and controversial start, Facebook fb . But these are the exceptions. The detritus far outnumber the success stories, raising the question, Is the method by which companies go public as broken and inequitable as it ever was? That would certainly seem to be the case. And the problem is especially acute when it comes to tech companies for which relentless forward momentum is key not only to pleasing investors but also to attracting talent and keeping their competitive edge.

This set of facts doesn’t bode well for the current wave of talked-up technology companies in the IPO pipeline—the so-called unicorns, or private startups valued at $1 billion or more by their investors. This once-rare species of startup has proliferated lately in Silicon Valley and beyond—from headliners such as Uber and Airbnb to lower-profile newcomers like Apttus and HelloFresh. Last year Fortune identified more than 80 unicorns for a cover story on the phenomenon; by our most recent count, that number has grown to 173. (Click here to see the new Unicorn List.) According to CB Insights, a research firm that tracks venture capital investments, private investors have plowed some $362 billion into startups in just the past five years.

That means that a tremendous backlog of potential technology IPOs is building up just as the stock market is beginning to look very wobbly after its nearly seven-year bull run. Indeed, U.S. stock indexes began 2016 with their worst first-two-week period in history. The S&P 500 fell 8% in the first 10 trading days, and the S&P tech sector underperformed the broader market by a full percentage point.

For an already weakening tech IPO market, the turbulence in stocks is a punch to the stomach. In mid-January, IPO research specialists Renaissance Capital put out a special report called “Exploring the Disappearing Technology IPO.” The trends it identified were not encouraging. From 2012 through 2014, according to Renaissance, there were an average of 36 venture-backed tech IPOs per year. But in 2015 that number dropped to 23, and only seven of those offerings happened in the second half of the year, partly because of a stock market correction in August. Though the average time from founding to IPO reached a high for tech deals in 2015, the profitability of the typical technology company going public has plunged into negative territory over the past couple of years. The median Ebitda for tech companies going public in 2015 was –$9 million.

All signs point to a continued slowdown in tech IPO activity in 2016, says Kathleen Smith, a principal at Renaissance and the company’s manager of IPO-focused ETFs. She says it won’t take long for the unicorns to feel the chill as well. “What’s happening now is just going to take the bottom out of these private valuations, many of which are imaginary,” says Smith. “And this valuation reset is going to have a very negative effect on new funding.”

It appears that a reckoning is coming in the tech world. The combined value ascribed to the 173 unicorns by their investors is a stunning $585 billion—an especially astonishing figure given that so many of them aren’t even close to profitable. Sky-high valuations—driven in part by unicorn mania and an influx of money from nontraditional (and less disciplined) venture investors—have limited the number of potential acquirers for a lot of the buzziest companies. (For more, read “Three Unicorns to Bet On.”)

A number of startups may have hoarded enough capital to ride out the rough patch, but even those that survive could experience mass defections and morale-killing “down rounds.” In mid-January, for example, check-in app company Foursquare raised $45 million in new venture funding but was forced to accept a valuation of less than half the $650 million value it was given by its investors a few years ago. “I imagine there’s going to be some pivots in some business models,” says John Gabbert, founder and CEO of VC data provider PitchBook.

There is also certain to be increased pressure from the VC community for any tech company on the verge of readiness to seek the “exit” of the IPO process even as it is shrinking. But every IPO currently trading below its IPO price creates a negative feedback loop, making the odds of the average unicorn getting out a little longer every day. And it doesn’t help that the process is fundamentally rigged against them.

To appreciate the extent of the tech IPO problem, it helps to understand a bit about the IPO process itself. The system has long been designed to benefit the Wall Street underwriters and their favored clients—venture capital and buyout firms, as well as the big institutional buyers of IPOs—at the expense of individual and retail investors, who have been brainwashed into thinking they are getting their hands on the Next Big Thing.

The venture capitalists or private equity investors—who finance the company while it is private—also have a big say in the IPO process. They want to make money on their investment, of course, and generally the most they possibly can. They push the underwriters relentlessly to get the highest price possible for the IPO, securing for them the biggest profit. But near the end of the process they begin to remember that they’re not selling all their shares in the IPO. At that point they actually prefer a dynamic in which the stock is actively hyped—to generate enthusiastic demand for it—but the “float,” or the percentage of the company’s shares sold in the IPO, is kept small (say, around 15%) to curtail supply.

High demand for something in short supply leads to one outcome: a higher and higher price for the stock when it finally hits the market. That way the VCs can double dip: They can crow a bit and notch a big gain on their initial investment (perhaps even selling some shares in the offering), but can also know that they were clever in hanging on to most of their stock, especially when the stock moves up smartly on the first day of trading.

The big Wall Street underwriters set the rules of the game. “Morgan Stanley and Goldman Sachs will tell you it’s not a successful IPO unless there’s a 20% to 30% pop,” says John Buttrick, a partner at Union Square Ventures. “That’s the way they get graded with their clients: Did the stock trade up after pricing? Much of the IPO machine is focused on generating a sugar-rush spike in the trading price during the two to four weeks after IPO. After that, the market takes over: ‘Sorry, not my problem.’ They profess to take a long-term view, but the data shows post-IPO stocks are very volatile in the case of tech IPOs, and that is not a problem the underwriters try to address.”

Another important constituency for IPOs is the big institutional buyers of them—mutual fund firms such as Fidelity, T. Rowe Price, and the Capital Group. They like the first-day pop too, because that means they make money instantly. Twenty-five years ago Peter Lynch, when he was running Fidelity’s Magellan Fund, used to refer to IPOs as “sunset stocks”—as in, “the sun never sets on an IPO in my portfolio.”

Interestingly, it’s a system that has also defied innovation. In the past decade or so, some clever new ways have been created for companies to raise the equity capital they need without going the IPO route. There are now a number of secondary markets where equity capital can be raised privately and where insiders can sell their stock to new investors in order to get some liquidity in ways that were never before available. The JOBS Act, which took effect in 2013, allowed smaller companies to file prospectuses privately and raise capital much more discreetly than in the past, as a way to get some of the benefits of a public offering without the many negatives of excessive scrutiny and regulation. These changes have in fact helped enable the rise of the unicorns. And yet Wall Street hardly appears to have lost its leverage in the IPO process. If anything, the opposite is true.

The aftermath of the financial crisis—a world in which there are fewer and fewer underwriters, and many of the European banks have all but disappeared from the underwriting market—has reinforced the power of the established IPO underwriters to keep the status quo working for them and their best customers.

That means that despite the hype that still surrounds them, the growing universe of unicorns out there has little choice but to submit to the IPO cartel if it wants to raise a significant amount of equity capital. For every Uber, which seemingly attracts as much capital as it wants in the private market at increasingly stratospheric valuations, there are a hundred companies that must submit to the powers that be when it comes to raising new money.

As an example of how regular investors get the short end of this process, consider the cautionary tale of GoPro gpro , the company behind every adventure athlete’s favorite digital camera—perfect for attaching to your head so that you can record your wild-ass snowboarding and base-jumping exploits.

Remember how cool Nick Woodman, GoPro’s founder and CEO, seemed in all those interviews that cropped up before and after his company’s IPO? When GoPro went public, in June 2014, at $24 a share, the company raised $491 million, and the lead underwriters at J.P. Morgan Chase, Citigroup, and Barclays pocketed more than $28 million in fees. Right on cue, GoPro’s stock sprinted up nearly 50%, delivering that all-important pop. Within three months, on Sept. 30, 2014, it was near $95 a share, giving the company a market value of more than $13 billion.

These days Woodman isn’t talking so much. (He declined a request to be interviewed for this story.) For months GoPro’s share price has been plummeting faster than a mountain biker on a headlong descent. In mid-January, trading in GoPro’s stock had to be temporarily halted after the company warned of disappointing fourth-quarter results and said it planned to lay off 7% of its workforce. Lawyers representing shareholders quickly slapped the company with class-action lawsuits. GoPro’s shares recently traded for less than $12, more than 50% below its IPO price.

It’s been a painful reversal. But many of GoPro’s institutional investors from the IPO probably still have fond memories of the stock. That’s because they got to buy it at $24 and watch it soar to $36—then unload it for a quick 50% gain. What’s not to like?

And if both the venture capitalists and the institutional investors are happy with the first-day pop, then the underwriters are happy too, because their biggest repeat customers are both the private investors and the big institutional investors. To be sure, their high fees—the underwriting charge in the GoPro IPO was 6%—are nice too. But the real goal is making sure that their customers are happy and do business with them again and again. At Goldman Sachs, one of the firm’s mantras is to be “long-term greedy,” and the IPO underwriting process is a perfect example of how it puts that philosophy into practice. It’s one of the few businesses in the world today that has remained virtually impervious to disruption by Silicon Valley.

William Hambrecht has been talking about changing the way IPOs are underwritten and priced for close to 20 years, since he left his firm Hambrecht & Quist (which was then sold to what is now J.P. Morgan Chase) and started W.R. Hambrecht & Co. in 1998 with the hope of upending the way the Wall Street cartel manages and markets IPOs. One of the firm’s high-water marks came early in its existence when it was one of the underwriters of the Google IPO, in August 2004. (There were 31 underwriters in all, led by Morgan Stanley and Credit Suisse First Boston.)

Eleven years on, people may no longer remember how controversial it was at the time for Google to have adopted Hambrecht & Co.’s auction strategy for what became the most important company in a generation. After conducting an online Dutch auction for the Google shares, in which investors named the price they would pay and orders were filled in the order of those who bid the highest price, the underwriters priced the Google IPO at $85 a share, below expectations. The stock closed on the first day at about $100 a share, up 17%. (In the end the lead underwriters didn’t strictly adhere to the auction strategy in its purest form.)

Experimenting with a different IPO pricing model certainly didn’t hurt Google. The tech giant’s stock is up some 1,500% from its IPO, and the company (renamed Alphabet last year) has a market value approaching $500 billion, second only to Apple’s AAPL . Its stock chart looks like one side of the Matterhorn. But very few other companies have been willing to go public the way Google did, through an auction process. (Some have, including Morningstar morn , up more than 400% from its IPO, and Interactive Broker Group ibkr , up about 50%.) Rather than a turning point, the Google IPO is remembered more as a historical footnote.

Hambrecht thinks the way IPOs are manufactured and sold remains a problem. “It really is a system that is broken,” he says. He thinks the “traditional approach” needs to change but knows that the big underwriters won’t do it, despite their understanding, intellectually, that the auction approach is a fairer system. They just make too much money as things currently stand. “The underwriters stick to the traditional approach because, first of all, it allows them to discount the pricing,” he continues. “It gives them selective allocation to their best customers. And they’ve tried to keep a knowledge advantage, so it’s really a proprietary product through the first six months or a year of the trading. All of those things enhance the profitability to the underwriter.”

He says that when, say, Alibaba pops from $68 a share to $115 a share, as it did in the first few months after its IPO, the underwriters cash in because their institutional clients have made a lot of money and pay them back in kind over time. “The people who buy it in the aftermarket are the shareholders who end up, in effect, holding the bag,” he says. Hambrecht doubts that the system will ever change unless a reform is forced on the banks legislatively (as was briefly considered after the Facebook IPO) or their vicelike grip on the large IPO business is disrupted. “It’s deeply entrenched,” he says.

In fact, Hambrecht is so resigned to the inevitable power of the name-brand underwriters that he’s decided he won’t try to fight them anymore. Instead, he’s returned to what he did once upon a time at Hambrecht & Quist: Taking smaller startups public. His latest eponymous firm, Hambrecht & Co., specializes in underwriting for companies that have valuations below the unicorn threshold and garner less interest from the big banks.

Despite the deck being stacked against them during the underwriting process, some executives at newly public companies say they wouldn’t change a thing. In this camp are James Park, the co-founder and CEO of Fitbit fit , and William Zerella, its chief financial officer.

Last June, Fitbit, a maker of fitness tracking devices, priced its IPO at $20 a share, above its indicated range. Morgan Stanley was the lead underwriter. The stock opened up 52% right away and ended up about that much, giving the company a market value of $6.5 billion and making Park nearly a demi-billionaire. In November the company completed a secondary offering, at $29 a share—below the $31.68 a share where it had closed the day before—in which 14 million of the 17 million shares sold came from its VC financiers. It was, in part, a move to reduce the downward pressure on the stock as the expiration of the six-month lockup period loomed. These days, after a poorly received new-product offering, Fitbit trades below its IPO price.

Fitbit CEO James Park outside the NYSE on the day of his company’s IPO in June 2015. “The pop on the first day really gave the company a lot of great momentum in the press and with employees.”Photo: Richard Drew—AP

But despite the stock’s roller-coaster ride, Park and Zerella say they couldn’t be happier with how the IPO was handled. Zerella credits his bankers for the way they ran the process. “They understood our story and were very helpful in articulating it to the Street,” he says, although it also helped that Fitbit is a leader in its space and very profitable.

Park says that he and his management team were excited by the IPO and by being on the floor of the New York Stock Exchange when the stock first traded. He has no regrets about not pricing the IPO higher to get more of the offering proceeds for the company. Park says he understands the players at the table have to get their cut. “I think the worst outcome would have been for it to trade below the offering price [in the days after the IPO],” he says. “It was a delicate dance, and I feel that we struck the right balance in the price of the deal. And the pop on the first day really gave the company a lot of great momentum in the press and with employees.”

Other perks: Park says the Fitbit IPO let the world know just how profitable his company is—with Ebitda margins of around 23%—and how, despite some formidable competition from Apple and others, Fitbit remains the industry leader. He points out that Fitbit now has a currency to use for potential acquisitions and says that going public has given the company’s employees something to root for together—its stock price. “It’s been a great event,” he says. “It really cements us as a world-class company.”

Laplanche of Lending Club, for his part, tries to put his company’s IPO experience in the most charitable light. But he can’t help scratching his head about how the stock has traded since those hype-filled early weeks after the IPO. He says that if the stock hadn’t jumped past $25 a share and had just traded at around $15, there would have been less disappointment, especially for the retail investors. “That being said, if they made a long-term investment, then I’m very confident that we’re going to continue to deliver great results,” he says.

No thanks to the standard IPO process. One of the reasons behind the volatility of Lending Club’s share price is the simple matter of supply and demand. The underwriters at Goldman and Morgan Stanley argued for a float of between 10% and 15% of the shares outstanding, and in the end it was around 15%. That created scarcity value initially, leading to the coveted opening-day pop. That’s the good news. The bad news came at the end of the six-month lockup period, when the Lending Club’s VC investors started selling their shares into the market.

Whether it’s a coincidence or not, Lending Club’s share price moved from about $19 in early June 2015 to a low of around $11 three months later—in effect tracking the increase in supply of stock during the year as the venture capitalists started unloading their stakes in the company.

Laplanche, of course, understands these supply-demand dynamics. But he’s not sure less sophisticated investors appreciate the subtleties of lockup periods and floats. “It can be a bit frustrating, particularly for people who wonder, Okay, what’s wrong with the company? Is there something there that drives the stock price?” he says. “I think we’re a good case study for it because we continue to report good news after good news, so there’s really no fundamental you can point to to explain the stock performance. Really, all that’s left is supply and demand of shares.”

All indicators point to Lending Club being more than strong enough financially to soar past its post-IPO doldrums. In an increasingly tough environment for tech companies, some of its peers may not be.

A version of this article appears in the February 1, 2016 issue of Fortune with the headline “Good Luck Getting Out!”

Summary: VCs have pumped up the value of the “unicorn” startups. Now tech IPOs are in trouble. Good luck getting out.


We told the story about one man’s extreme experience of time warping; when he entered the shower, water droplets seemed to freeze in the air – an experience that he compared to bullet time in the The Matrix films.

Since some researchers suspect the strange feeling of a time warp may be surprisingly common, we asked our readers to send us their own experiences of time slowing down. We were amazed by the response.

Phill Healey, for instance, described a terrifying car crash:

"I turned a corner to see a tow truck stopped suddenly in front of me. I put on the brakes just in time, only for my passengers to tell me we were about to be hit by a bus from behind. I recall looking at them listening to their explanation and then looking behind me to see the bus hit the car and knock us into the tow truck. The event seemed to happen very slowly yet our actions occurred at normal speed. How I was able to talk to my passengers and see the bus hit us and then turn around and see the tow truck in front of us come closer, I do not know. I've always described it as time appearing to go slowly."

Ijuaigi Emmanuel, felt something similar while sitting with some friends under a live electric cable. Hearing a spark above them, he looked up, to see it falling in slow motion, before they ran to safety.

Some researchers suggest that when we are confronted with danger, the rush of stress hormones could accelerate our thought processing, which makes the outside world seem to move slowly in comparison. The idea would certainly tally with Andrew Arthur Prescott’s lightning-quick reactions that saved his son. As he put it:

"I do not have good reactions and am somewhat uncoordinated, poor at sports. When my son was small we put him on a high playground slide, when he was still too top heavy. He seemed to fall to one side and over the edge, and I seemed to have all the time in the world to move to catch him."

Occasionally, the feeling of super-human power can end in bathos, as Wendy Crossley describes:

"My foot gave way, which it is apt to do from time to time. I felt I was flying like superman, arm out stretched. It seemed like a lifetime that I was floating in air slow motion. I eventually collapsed in an unladylike manner onto the pavement in a heap with a twisted ankle and hurt pride."

For most people, a time warp is a one-off experience, but David Bull says he has seen the world in slow motion on numerous occasions. Like Healey, he saw a car crash in excruciating detail, and saw everyone on the stairs in the London Underground moving abnormally slowly. He also describes a more prolonged experience, after surfing, where he found it strangely difficult to judge the speed of his car. “I would drive at 100 kph which for the first 30 minutes of driving felt like about maybe 5-10 kph.”

If you have never seen the world stand still, Olumide Olaoye points out an illusion that is a little more mundane, but that everyone can do:

"Sometimes it seems to my eyes that the 'second hand' of the clock stops for a second or less. Or at other times it seems to move backwards before it picks up again."

This is known as the “stopped-clock illusion” and is thought to be caused by tiny eye movements, known as saccades, that temporarily slow our perception, leading it to look like the hand of the clock is jammed before it picks up again.

As the patient in our original article pointed out, it doesn’t take much for us all to get the feeling that we are living in an altered reality.

Have you ever experienced time slowing down or speeding up? Let us know on our Facebook or Google+ page, or message us on Twitter.

Summary: Our article about one man’s extraordinary experience of seeing the world stand still prompted readers to share some of their amazing tales.


Retirement planners like to relay best practices to clients via simple, easy-to-understand rules. Whether it’s sticking to a 4% yearly withdrawal rate or having your bond exposure match your age, these rules-of-thumb have translated into investing strategies for years now.

Of course, these tips come with plenty of research to back them up – a 4% withdrawal rate has a strong chance of lasting a lifetime, for example. But sometimes these rules get turned upside down.

One rule undergoing such an evolution has to do with stock exposure during retirement. For a long time, conventional wisdom has held that your stock exposure should steadily decline as you age. But a growing number of experts think that today’s retirees need to keep much more of their portfolio in the stock market than they might expect.

In the past, when the typical retirement lasted 10 to 15 years, there wasn’t a huge need for stocks in the portfolio. But, the “retirement time horizon has gone up,” says Stuart Ritter, vice president at T. Rowe Price Investment Services and a financial planner at the firm.

With people living longer, the need to take on the risk of stocks (in return for the potentially greater reward) has increased. Though inflation has been low lately, its threat to the value of your retirement savings grows with greater longevity: While a dollar’s value may not decrease much in a decade, it will decrease a lot over 35 years.

These trends have led a growing number of financial planners to advocate a rising equity “glide path.” While this idea isn’t as easy as others to sum up with a platitude, the basic idea is that your exposure to stocks should increase, rather than decrease, as you age in retirement.

Working with the American Institute for Economic Research, Luke Delorme conducted a study to determine the ideal asset-allocation strategy for retirees, assuming a 4% withdrawal rate. The best strategy, he found, was to begin with a 20% allocation of stocks as you enter retirement at age 65, and then increase that allocation gradually every year, over 30 years, until you have a 70% equity exposure at age 95.

“The time that people need to be most conservative is not in retirement,” says Delorme. “but at the beginning of retirement.”

Here’s why: Your portfolio is most vulnerable to risk right after you retire. If the market takes a tumble during the first few years of your extended vacation, then it’s difficult to rebuild your portfolio without going back to work. So keeping stock exposure low at that point protects you from the potential of losing out in the beginning of retirement. But since stocks have historically risen an average of 7% a year over the long-term, gradually increasing your exposure over time increases your odds that your portfolio will last into your later years.

If you have a pension, you can take a bit more risk, says Delorme, who now works as director of financial planning at American Investment Services. You can have a higher allocation of stocks when you leave the workforce, and you can increase stock exposure to 80% within retirement.

T. Rowe Price’s Ritter explains the glide path concept differently. He places client assets into two buckets – one for the first 15 years of retirement, the other for the second 15. In the “first 15” bucket, assets be concentrated in on safe, short-term investment vehicles like bonds and fixed income. The second 15 years’ worth of savings goes into stocks. Placing clients’ money in the two buckets, Ritter says, “helps put the short term volatility” of the market into the context of a broader strategy; investors who know their short-term needs are taken care of are less likely to get scared and pull money out of the market.

While they may not use the term “rising equity glide path,” more financial planners are latching on to the idea of increasing stock exposure in retirement. You often hear of a 50-50 stock to bond ratio for retirees these days. And if you have a higher withdrawal rate, chances are you will also need to take on more risk (unless your nest egg is truly massive). “The biggest driver is less around the allocation of risk,” says JPMorgan Private Bank’s David Lyon. Instead, it’s based on “how much you’re spending on your balance sheet.”

In other words, if you have expensive tastes, then you may want to get used to living with more risk. That’s not a cliché; it’s life.

Summary: Unless you're already unspeakably rich.


Hedge funder Christopher Hansen’s Valiant Capital Management has gotten a big boost from its lineage. Hansen is an alumnus of a hedge fund of someone who once worked for Tiger Fund Management’s Julian Robertson—earning Valiant the nickname inside the industry, like a number of other firms, of Tiger Cub, though Valiant is technically a grandcub. But it’s another animal, itself legendary, that could be his undoing—the unicorn.

About one-quarter of the fund is invested in private companies, including seven so-called tech unicorns—companies valued at over $1 billion. The unicorns had helped propel the San Francisco-based Valiant’s returns in recent years, but this year have landed the fund in the red, as a number of blow-ups have caused investors to grow more cautious about the richly valued start-ups. Valiant told investors last month that its main fund is down slightly under 10% through April, according to an individual familiar with the performance. Write-downs on its big portfolio of private investments appear to be a major factor, according to investor documents Fortune has obtained.

But a thorough analysts of Valiant’s documents seems to show that Hansen’s fund may actually be down more than he is letting on. According to the documents, Valiant appears to have failed to fully write down the value of a number of his unicorn holdings. As a result, the fund is valuing those holdings at inflated prices, at least compared with where other similar fund say those investments are now worth. That likely means Valiant performance, even its poor performance, is inflated this year as well.

The Securities and Exchange Commission is concerned with how funds are marking their holdings of the highly valued tech start-ups and whether they may be deceiving their investors. Last last year, the SEC began investigating mutual funds to audit their procedures for valuing the private holdings. In a March speech at Stanford Law School, SEC Chairwoman Mary Jo White said that the SEC was committed to protecting investors in the so-called unicorns no matter how sophisticated or high net worth they are. Hedge funds typically cater to high net worth individuals.

“Nearly all venture valuations are highly subjective,” White said during the March speech. “The concern is whether the prestige associated with reaching a sky high valuation fast drives companies to try to appear more valuable than they actually are.”

Hansen, 47, launched Valiant in 2008 after leaving $5 billion Blue Ridge Capital, one of the storied Tiger cub hedge funds run by the notoriously reclusive John Griffin. The Blue Ridge scion began investing in venture capital in 2009 and scored some big hits with Facebook and Alibaba, which he quickly sold out of with 31% gains in each.

Valiant ramped up its venture investing and now has 23 investments, including big names like Dropbox, Evernote, Pinterest, and Uber, according to its investor documents. The investments are held in a separate side pocket, and investor capital is locked in until Valiant exits the privates, via IPOs or other sales. Valiant doesn’t take performance fees on the privates until that time either.

A big drop in the value of the private tech companies would hurt Valiant more than other hedge funds as it is believed to have more in privates than most of its peers. At leading tech-oriented Tiger Global, for example, privates account for less than 8% of the firm’s $8 billion hedge fund, as it invests in startups in separate private equity funds. Tiger Global was down 21% through March, but only about 10% of the losses are attributable to write downs of its private investments, according to an individual familiar with the fund’s results.

Even by its own numbers, Valiant is having a bad year. The stock market is basically flat for the year. But if Valiant was marking it holdings where other funds are, its performance would be even worse.

Take Dropbox one of the most troubled of Valiant’s big VC holdings. Last year, mutual funds Fidelity and T. Rowe Price began writing down their holdings of Dropbox, which has been struggling to justify its $10 billion valuation. As of the end of 2015, Valiant said it valued its Dropbox stake at $50.4 million, or $18 per share, according to calculations from investor documents.

Others weren’t so charitable. By end of last year, Fidelity had written down Dropbox to $13.50 per share and T. Rowe Price had slashed it to $9.40, nearly down to where Valiant’s purchased the shares at $9.05. If Valiant had valued its Dropbox stake where T. Rowe Price did, the fund would have had an additional $24 million in losses on that stock alone.

“Dropbox has greatly exceeded all of Valiant’s expectations and guidance to date,” Hansen wrote in an investor presentation at the time, though he added that the company has “slightly underperformed on the enterprise side.”

Evernote, a cloud-based note taking and storage app that Valiant said was worth $1.4 billion at year-end, is in even worse shape than Dropbox. Last year, Business Insider wrote a story about the company’s “deep troubles.” Valiant invested in several financing rounds of Evernote, and at the end of December it valued Evernote at $12.56 per share, which was a little above break-even for the hedge fund, documents show. Even so, it may have been too optimistic: T.Rowe Price marked Evernote down to $7.66 at year-end.

While others in the industry are questioning Evernote’s future, Valiant claims that “the company is cementing its leadership position in the space” with 1 million new users each month.

Valiant declined to comment for this article.

It could very well be that the fund has adjusted the value of those holdings and others this year. But according to a source, Valiant had only cut the value of its overall private portfolio by 10%. But you would have expected that group on investments to have tumbled more. T. Rowe, for instance, further cut its price of Dropbox to $7.91 at the end of March, according to the Wall Street Journal. By that measure, Valiant’s investment in the storage company has plunged 56% from where it marked it at the end of last year.

Its Evernote stake, appears to have tumbled as well. T. Rowe now values that company at $6.04, a 52% below where Valiant had valued the stake at the end of 2015.

Valiant uses third-party valuation agent Duff & Phelps to help determine the marks, which it makes quarterly.

Since Valiant is not collecting performance fees on the private states until the companies are sold or go public, Valiant may argue that it doesn’t matter where it values the stakes now as long as it gets them right at the IPO or sale. But that’s not correct. Since the value works into the overall performance of the funds, inflated values can cause the fund to look like it is doing better than it is, giving Hansen the ability to raise more funds, which it has recently started doing. The hedge fund, which told investors it wants to keep assets near $2.5 billion, opened the door this year to new money, hoping to offset redemptions, according to a February Reuters report.

On top of that, while Valiant isn’t collecting performance fee on the private investments, it is collecting its 2% management fee on the value of all the assets in his fund. Inflated valuations of those unicorns will boost what Valiant collects from its management fee.

Valiant still has big gains in Uber and Pinterest, valued at $64 billion and $11 billion respectively. Although Pinterest has been mentioned as a 2016 IPO candidate, Valiant seems to have slightly cooled on the social media company, writing it down 3% during the fourth quarter to $6.97 per share. Funds run by two investment companies Hartford and The Principal have dropped the value of their Pintrest stakes to $6.43 per share.

Overall, Valiant had an annualized gain of 9% since inception through 2015. But if the unicorns keep spearing this tiger, that number is going to get smaller.

Summary: Tiger Cub fund may be inflating the value of its holding by 56%.


Overcoming years of poor health and crisis, the euro zone economy grew at its fastest pace in five years in the first quarter, driven by unlikely stars such as France and Spain.

It now stands larger than it did at its peak before the financial crisis, albeit having taken eight years to recover. The bloc also slipped back into deflation in April.

Blowing past both the U.S. and British economies, the latter weighed down by uncertainty over possibly leaving the Europe Union, euro zone growth doubled from the previous quarter, beating even the most optimistic expectations on healthy household consumption and a rebound in investments.

But the surge, a welcome relief less than a year after Greece was nearly ejected from the bloc, may be just a blip; Europe is still weighed down by high debt, weak bank profits, high unemployment and vast excess capacity in the economy.

Nonetheless, growth among the 19 countries sharing the euro jumped 0.6 percent on the quarter, well past expectations for 0.4 percent and ahead of Britain’s 0.4 percent.

The U.S. economy grew 0.5 percent on an annualized basis in the first quarter, implying only slightly more than 0.12 percent for the three months.

Annual euro zone growth held steady at 1.6 percent, more than three times the U.S. rate in the same period.

The numbers defied expectations for a slowdown and were as improved sentiment, plunging energy costs and a slow but steady fall in unemployment and buoyed spending.

“The first months of the year were tumultuous with large stock market declines, growth concerns in the US, China and many emerging markets and plummeting confidence among businesses and consumers,” ING economist Bert Colijn said in a note.

“Clearly, businesses and consumers have not acted on their gut feelings,” Colijn said. “Domestic strength in the Eurozone economy is key to current economic growth. This is mostly because of improvements in the job market.”

Indeed, unemployment in the euro zone, though still high, fell to 10.2 percent in March from 10.4 percent a month earlier, its lowest in over four years, with Spain among the most improved.

The news was not all positive, however, as fresh inflation data showed the bloc was back in deflation in April, giving the European Central Bank its single biggest headache as it struggles to boost prices.

Consumer prices fell by 0.2 percent compared to a year earlier, moving down from an unchanged reading March, even after the ECB unveiled fresh stimulus in December and March in hopes of boosting inflation, which has undershot its 2 percent target for more than three years already.

In a perhaps more worrying sign for policymakers, core inflation, which excludes volatile energy and food prices, also slowed, raising fears that low energy prices are feeding into the price of other goods and services.

The ECB is especially worried about this so-called second round effect of low crude prices because once they feed into wages, breaking the cycle of low inflation becomes especially difficult.

Still, ECB chief economist Peter Praet defended the bank’s measures on Friday, arguing that only a significant worsening of the inflation outlook would warrant more stimulus.

“Deploying negative rates again in the future would require a distinct worsening of the inflation outlook,” Praet told Spanish newspaper Expansión. “I don’t think we’re going to see these conditions materializing in the near future.”

“We shouldn’t be talking of new instruments,” Praet added.

Heading into the second quarter, the euro zone appears to remain on solid footing.

Indeed, sentiment improved more than expected in April, driven by across the board optimism among industry, services, construction sector and households.

Preliminary purchasing managers’ data and Germany’s Ifo business climate index also pointed to continued expansion as did fresh lending data showing the most robust expansion since 2011.

Growth could also get a fresh boost from the ECB’s corporate bond buys and new round of ultra cheap loans.

Still, the first quarter could ultimately turn out to be a peak for growth, with most projections indicating flatlining growth over the next several years as Europe remains weighed down by the legacy of its crisis.

Summary: But there's still cause for concern.


Last year I had the pleasure of paying AT&T’s global network operations center a visit. You can read about the trip here.

For a tech nerd like myself, this is Disney World. (No lines either!) Within the facility, AT&T’s technicians oversee all of the data about all the data that people are sending one another over the company’s vast network. The many, many displays in this building depict where calls are coming from, how info-packets are flowing from wire to wire, who may be experiencing issues, and what might need fixing. If the network is a nervous system, then this is its brain.

On any given day, AT&T handles 100 petabytes of data traffic. This isn’t just big data—it’s ginormous data. As of April 2011, the United States Library of Congress had stored an estimated 235 terabytes of data, as Computer Weekly relates, citing McKinsey statistics—multiply that by 400 and you’ll get an idea of the amount of information coursing through the company’s infrastructure on a single day. Yep, it’s a lot.

All of this insight helps AT&T’s network engineers tune its systems to keep people’s wireless devices plugged in, up and running. Cybersecurity is a top concern, of course. If the systems detect a swelling of traffic—a data surge—that might indicate that a distributed denial of service attack is underway. A hacker could be summoning a botnet strike. Cue automated mitigation maneuvers.

AT&T is a behemoth, ranking at number 12 on the most recent Fortune 500 list. It’s the largest telecom carrier by Fortune’s ranking, followed by Verizon at number 15. (We’ve begun work on the new list, by the way, due out this summer.) And the company’s central command does not disappoint.

Hope you enjoy the tour.

Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. Fortune reporter Robert Hackett here. You may reach me via Twitter, Cryptocat, Jabber, PGP encrypted email, Wickr, Signal, or however you (securely) prefer. Feedback welcome.

Summary: Inside AT&T's global brain


Editor’s note: Every Sunday we publish a favorite story from our magazine archives.This week, we turn to a topic on many of our minds this summer: beer. Big beer companies are currently losing ground to smaller, craft brewers. But this is not the first time those companies have had to re-think their strategies, as you can see in this story from the 90s about the beer industry’s marketing woes.

Satisfaction Nineties-style: Bud sponsors the tour — and these Stones fans drink the product.

To get a taste for the crazy ways marketers must compete for today’s finicky consumer, stroll through the beer section of your local retailer. You’ll see Icehouse, a successful new upscale beer from Plank Road Brewery –a fake parentage concocted by Miller Brewing to give a microbrewed image to suds produced in megabreweries. (Call it phantom branding.) You’ll also find Killian’s Irish Red, a pseudo-import made by Coors Brewing in Golden, Colorado, and Zima, a weird, colorless malt beverage that Coors positions as “something different.” You can buy any of these oddball drinks for about $5 per six-pack. On the other hand, if you’re in California this Labor Day weekend, you can use a mail-in coupon to binge on 12-packs of Budweiser, the so-called King of Beers, plus Coors and Miller, its broad-shouldered rivals, | for just $1.99. That’s right, less than 17 cents a can.

Are these trends in any way related? Yes. Heavy discounting of famous-name beers and the proliferation of peculiar, high-priced new ones both flow from the same source: Big brands are losing their fizz. Original Coors’s volume is less than one-third the level of the mid-1980s. Budweiser, which accounts for more than half Anheuser-Busch’s $8.7-billion-a-year in beer sales, saw its volume sink 9% from 1990 through last year, while Miller’s heavyweight brand, Lite, was off 16%. With big-brand images in trouble (see box), beer bosses are cutting prices to lure consumers even as they scramble desperately to develop or buy the types of beer that American drinkers will pay more for — imports, whose sales rose 11% last year, and microbrews, whose tiny 1% market share is nonetheless expanding at an eye-popping 50% annual clip.

The result of all this ferment, says Michael Bellas, president of Beverage Marketing in New York City, is that “the U.S. beer industry is going through a sea change I haven’t seen in 20 years.” And when change of that magnitude roils a market, heads usually roll as well. At No. 2 Miller, owned by Philip Morris, and at Coors, at least 70% of the top 15 or so management positions have changed occupants in the past year alone. More than half the newcomers are from outside the beer business.

For new and old alike, the central question posed by beer’s new brand game is this: How does a multibillion-dollar company create products to compete against little guys — and simultaneously protect its big established brands? The answers are relevant to marketers in any industry.

Obvious Step One: Innovate. True, no one sees anything revolutionary on the horizon. Says Anheuser-Busch CEO August Busch III, 57: “I don’t think there’s going to be a completely new way to make beer or a breakthrough as there was in the Seventies with light beer.” But this year the industry has introduced about 40 — count ’em — new “ice” beers. Pure gimmickry? You bet. Ice beers, first developed in Canada, are beers produced at temperatures just a few degrees colder than ordinary brew, which gives them a slightly above-average alcohol content. Still, “ice” has turned out to be one cool marketing ploy. The products have captured almost 6% of industry sales — more than all imports combined.

Among the major players, the most dynamic — and desperate — transformation is taking place in the malt-scented valley of Golden, Colorado. Here Coors last year imported the first nonfamily member in its 121-year history to run its beer business. As head of a vulnerable No. 3 in a flat market where more than 700 companies have gone out of business in the past 50 years, CEO Peter Coors, 47, admits that he’s pursuing a survival strategy. Of his decision to seek outside help, he explains simply, “I wasn’t smart enough to know what to do. I needed professional management.”

Miller CEO Jack MacDonough holds a hot product, his new Icehouse beer.

YOU’D SURE never mistake new president W. Leo Kiely III for a Coors family member. Unlike that skinny, conservative, low-key crowd, Kiely, 47, is a rambunctious independent with a beer-barrel body. Despite appearances, though, he’s no lifetime brew man. Kiely spent the previous 11 years at PepsiCo’s Frito-Lay unit, where he rose to president of the central U.S. division and was a candidate to head the entire Frito-Lay company. Hired with a mandate to shake Coors up, Kiely has replaced seven of the top nine managers (one position, chief financial officer, is yet to be filled). His goal: to pump up Coors’s unpredictable but consistently lousy return on investment (4% last year) to at least 10% in three years.

To do that, says Kiely, “we need to be innovative in everything we do.” Coors, already an impressive technical innovator (it introduced the first aluminum can and the first cold-filtered beer, both in 1959), especially needs to become a more creative marketer. Kiely has scored a minor hit by launching the Colorado Silver Bullets, the first all-female professional baseball team since the 1950s, to promote Coors Light. The team’s record is terrible (5-37 against all-male, minor-league, and semipro opponents). But unexpectedly large crowds are turning out to root for the underdogs.

Hitting a home run looks much less likely. A possible model: George Killian’s Irish Red, a thoroughly American beer that gets no TV advertising but by dint of its clever name (Coors licensed it from a long-defunct brewer in Enniscorthy, Ireland, in the early 1980s) is stocked in retailers’ import cases and commands a high price. Killian’s is now neck and neck with Samuel Adams as the largest specialty beer in the U.S. Coors’s bigger bet is Zima, a clear drink whose zigzag performance shows just how risky product development can be. “Zima is a sexy new product,” insists Kiely, who accelerated its rollout this year. Cleverly advertised as a mystery drink with “zecret ingredienz,” fizzy, foam-free Zima is tremendously successful in new markets, where 70% of alcoholic-beverage consumers — including women who don’t drink beer — typically try it. But sales quickly sink because, sigh, people don’t like the stuff very much. Some choice samples from an informal FORTUNE survey conducted over the Internet: “Zima zucks,” and it tastes like “tonic water, antifreeze, and crushed SweetTart candies mixed with skunked (translation: spoiled) Molson.”

Zima may give Coors a brief but pleasurable buzz. Wall Street is projecting a 50% rise in profits this year, thanks mainly to its national debut and the 50%-plus growth of Killian’s. But even Pete Coors holds little hope that Zima is anything more than a fad. “Anheuser-Busch and Miller have sophisticated market research, and if they thought that (clear malt drinks) were going to be a major category, they’d be in it today,” he says. They’re not. And they don’t plan to be.

When it comes to finding new ways to grow by developing, testing, and delivering new products more quickly and efficiently, the people at Miller have the smartest ideas these days. Says CEO Jack MacDonough: “I have two rallying cries: fast cycle time and very local marketing attention.”

Miller certainly needed a kick when MacDonough, 50, a former top marketer at Anheuser-Busch, came aboard two years ago. The company’s market share has been stuck in the low 20s since 1980. MacDonough swiftly broadened Miller’s portfolio of brands by buying Molson Breweries U.S.A. (the import arm of the Canadian brewer) and raised its output of new brews from an average of two per year toseven this year.

Jack is nimble. Jack is quick. By getting Miller’s new Icehouse and Lite Ice widely distributed before Anheuser-Busch launched comparable brands, MacDonough has captured over 50% of ice beer sales in supermarkets. Anheuser’s share is 29%. Coors, late to the market with its Arctic Ice, is available in only 30% of the U.S.

That quickness reflects fundamental changes MacDonough made in the way Miller markets. Case in point: a shift to momentum marketing, so-called because the process gets new beers flowing to consumers quickly. This enabled Miller to test its Icehouse beer inexpensively — $500,000 vs. $12 million for a comparable new product tryout last year.

WITH MOMENTUM marketing, instead of mounting one or two full-scale product trials each year — which require costly TV commercials and retail displays — you conduct half a dozen simple tests. Through its wholesalers, Miller ships prototype brew and promotional materials to 15 or so bars and restaurants in a few select cities. Miller marketers unobtrusively hang out at the test sites, observe, interview bartenders, and then do phone surveys of customers who fill out cards at the bar. Most products fail initially. In July, Citro, a lime-flavored beer, flunked its first eight-week momentum marketing tests in San Diego and Gainesville, Florida. So Citro has gone back to Miller’s laboratories to get revamped. MacDonough’s second change was to decentralize his sales organization. Says Richard Strup, 41, Miller’s marketing chief: “Practically every decision used to be approved by the senior vice president of marketing in Milwaukee. I knew when I got a request to okay 15 neon signs in El Paso that this was no way to run a business.” That feeling was reinforced when Miller last year benchmarked companies that sell through distributors — Coca-Cola, Pepsi, Gallo, the automakers — and found that the most successful allow local managers to run their own shows.

In January, Miller divvied up the U.S. into 19 regions and will give this shift added oomph by linking each general manager’s pay to his region’s performance. Says President John Bowlin, 43: “In the spirit of empowerment, when we launched Icehouse, we didn’t set a price. We asked each market, ‘How much can you get for this product? You price it.’ ” The sales teams in the southeastern U.S. opted for an atypically high, almost import-level price, and the Southeast is now Icehouse’s hottest market.

Coors’s new all-female baseball team, the Silver Bullets, is one way it hopes to propel its marketing into a league of its own.

The third big change at Miller is moving to a more flexible manufacturing system. “For years we had essentially two brews, Miller High Life and Miller Lite, and production was nice and straightforward,” says Bowlin, who was president of Philip Morris’s Oscar Mayer company until last year. “Now we have to think, ‘How can we produce to order?’ ” To get ideas, Bowlin and some operations managers traveled to the small town of Capehill, England, on the outskirts of Birmingham. There they studied how Bass Brewers, Britain’s leading beermaker, had refashioned its brewery to handle multiple, low-volume products. They concluded that Miller didn’t need a new brewery with small kettles and flexible production lines. Instead, the company is spending more than $500 million through 1998 to retool the six big plants it’s got (a seventh, in Fulton, New York, is shutting down on September 30). One early sign of progress: Shifting production from one beer to another, which used to take four hours, now takes one.

Left unanswered by this frenzy of innovation and proliferation, however, is the critical question of how you expand a venerable but tired brand. Miller’s 21-year-old Lite (38% of company volume) has lately been losing drinkers to 12-year-old Bud Light, which has better advertising and is winning new light- beer drinkers. For now Miller is propping up the franchise with Lite Ice and shifting national marketing money to the local level to compete more nimbly against regional brands. That means, for instance, that Lite now gets plenty of television ad support in Houston, where it is the market leader. But in Portland, Oregon, where regional and European-style microbeers are the craze, local bosses have chosen to spend zero on TV ads touting their company’s mainstay.

One thing is certain: While throwing money at a market may not capture much extra share for older brands, in a business that’s built on froth, cutting your marketing investment sharply is a sure-fire formula for disaster. Just ask Coors, which until recently had been supporting Coors Light, its best seller, and Zima at the expense of Original Coors. Indeed, last year’s $4 million in ad support was a mere one-tenth of what it spent on its flagging flagship brand in 1985. Drawing the obvious conclusion, senior vice president of marketing William Weintraub, 51, a newcomer from Tropicana, is tripling Original Coors’s ad budget this year. Says he: “This industry seems consumed by the vortex of doom phenomenon — the belief that every old brand is going to die. But I genuinely think ours can be turned around.”

That vortex of doom is Worry No. 1 at Anheuser-Busch, which has the most big, aging brands to protect. Behaving typically market leaderlike, Anheuser, with a commanding 44% of U.S. beer sales, has laid relatively low in the new- products game. Says August Busch IV, 30, vice president of brand management, son of August III, and heir apparent (the family still controls 8% of the stock): “The breweries that we have are designed to produce big brands. Our system is set up to sell big brands. Our competition can’t compete with big brands. That’s why they’ve had to introduce lots of little brands.”

Tough talk for an unproven marketer whose ascension happened sooner than planned last March, after his predecessor unexpectedly departed. And even Busch admits that the kind of ferocious price war now under way in California, while it may intimidate smaller rivals, is hardly the message he’d like to send consumers about his company’s franchise Budweiser brand. Says he: “It’s the worst thing in the world for brand image.”

Critics contend that young August, though eager and reasonably smart, isn’t up to the job of turning Budweiser around. But August III, whom his son calls “Chief,” is confident his boy can help Bud develop a much needed younger image. So far, though, he hasn’t done much to draw twentysomethings to the brand. What he is doing is spending $2 million to sponsor the current U.S. concert tour of the wizened but durable Rolling Stones — “the kings of rock & roll with the king of beers,” he says — and scrapping a disappointing 18- month-old TV campaign with the theme “Proud to be your Bud.”

Of the new one, due out in October, August IV spills few details. “It’ll focus more on quality,” he says. “It’s a variation of ‘this Bud’s for you’ for the Nineties. It’s awesome. A really cool idea.” As Busch strives to meet his goal of arresting Bud’s market share slide by next year, his company has hedged its bets by buying a minority stake in Redhook Ale Brewery, a Seattle microbrewery that sold 76,000 barrels of beer last year, vs. Anheuser’s 90 million. Still, the deal has drawn cheers from Anheuser’s distributors, who are desperate to push higher-margin, prestige brands.

FOR REDHOOK, the largest microbrewer without national distribution, Anheuser’s investment is a ticket to coast-to-coast selling. CEO Paul Shipman, 41, says that during negotiations early this year, August Busch III “grabbed a pad of paper, and with one quick sweep he drew a map of the U.S. Then he said to me, ‘Put X’s where you want to build breweries.’ ” Shipman, intoxicated by opportunity, drew five.

Since Anheuser disclosed its Redhook deal, other giants — among them Miller and Seagram, which is not even in the beer business — have reportedly been sniffing out investments in microbrewers. That prospect troubles specialty beermaker Jim Koch, 45, whose Boston Beer Co. makes Samuel Adams and who has no interest in hawking his brew with Fortune 500 help. “I’m afraid of the big guys,” he says. “They have the power to dominate any segment they want. Still, my faith is that better beer will win out.”

Relax, Jim. The good news is that’s exactly what seems to be happening as consumers migrate away from the bland megabrands to tastier prestige labels. So if the beer barons really do draw the right lesson — and either ape your – success or buy out guys like you — well, shouldn’t beer lovers all raise a glass to that?

Summary: Marketers everywhere have lots to learn from the tumult in an industry where major old brands are striking out with consumers.


TMZ has obtained photos of the devastation allegedly caused when

participated in a TANK-smashing, chicken massacre-ing, police raid on a house in Arizona back in March.

, the owner of the home has taken legal action against Seagal and the Maricopa County Sheriff's Dept -- claiming cops had no right to smash their way into his house because he was NOT hiding a cockfighting farm.

In his legal letter to Seagal and the sheriff,

claims his 11-month old puppy was shot and killed in the raid ... which was reportedly captured on tape for Seagal's reality show.

But a member of the Maricopa County Sheriff's Dept. is adamant -- NO ONE ever shot a puppy.

Still, Jesus is demanding $100,000 and an apology.

Summary: TMZ has obtained photos of the devastation allegedly caused when Steven Seagal participated in a TANK-smashing, chicken massacre-ing, police raid on a…


06/09/2016 AT 05:50 PM EDT

Thirty years ago this year,

made a mark on Hollywood forever with his child star-making turn in the classic, coming-of-age film

(premiering June 11 at 8 p.m. ET on ABC), who played happy-go-lucky Vern Tessio, recently reminisced about filming the fan-loved film, costarring River Phoenix, Will Wheaton and Corey Feldman.

"What is fun about that child star thing, I have to say it's just being on a set and making a show," O'Connell tells PEOPLE. "It's so fun – I have such fond memories of doing

as a kid and just being around those three guys, Rob Reiner directing us and Keifer Sutherland scaring the crap out of us. We shot it over a summer and I have such fond memories of that summer, I have a movie that I can show my kids [twin 7-year-old

] and go, 'Hey can I show you what I did in the summer of '85 and how much fun it was? Here's this movie and I'll tell you funny stories about it.' It's almost like having a photo album of a really fun memory."

Muhammad Ali on the cover of PEOPLE

O'Connell says that he's run into his costars Wheaton and Feldman occasionally, but mainly keeps in touch with director Reiner (

"I stay in touch with him a lot. Not only Rob, there was another boss Andrew Scheinman who was one of his producing partners from Castle Rock, I call them up for advice if ever I'm going to make a decision about doing something," O'Connell says. "I call them up and ask what they think. Before Rob Reiner was a big and famous director he was an actor, he was a writer, he's really done it all and I should be so lucky to have half the career he has."

Summary: Jerry O'Connell reminisces about making Stand By Me: "I have such fond memories of Rob Reiner directing us and Keifer Sutherland scaring the crap out of us"


The Trump campaign just opened an office in Burlingame, Calif., south of San Francisco and on the northern fringes of Silicon Valley. One recent afternoon, two volunteers were running a phone bank. Trump lawn signs were piled up, as were T-shirts. Mr. Trump has no meaningful opposition in the California primary on June 7.

“I have great respect for Silicon Valley and all of the people in Silicon Valley,” the candidate said in an email message through an aide.

Silicon Valley technophiles cannot necessarily claim the same. In April, as Mr. Trump was wrapping up his quest for the nomination and beginning to look ahead to the general election, a handful of people who work in tech around the country gave a grand total of $5,395 to his campaign, according to figures that will be released Thursday by Crowdpac, a start-up that tracks donations.

Add that paltry sum to the $16,420 that Mr. Trump raised since last summer from people who work in tech and it is still nowhere near enough to cover the cost of a year at Stanford. Hillary Clinton has raised $2.7 million from tech donors since beginning her campaign, while Bernie Sanders has raised $6 million, according to new Crowdpac research.

Mr. Trump was largely self-funding his campaign. Now, however, he requires cash — and lots of it.

“Out of the millions of people who work in technology, from engineers to Uber drivers, just 52 have given to Trump. He’ll need many more if he truly intends to build a world-class finance organization,” said Mason Harrison, a Crowdpac spokesman. “Mitt Romney raised over $8 million from the technology sector in 2012. That’s a lot of money to leave on the table.”

Whether those tech backers are out there, however, is an unsettled question.

Scott Slinker, a 55-year-old entrepreneur in San Jose, Calif., gave the candidate $250 last summer. “I know Trump’s supporters are here,” he said. “They’re just not vocal. They don’t want to be stereotyped and pigeonholed and labeled.”

In at least some cases, this is correct. One employee at a software firm declined to speak on the record, saying it would be a bad career move for a Google search of his name to turn up any Republican connection, let alone one with Mr. Trump.

Mr. Slinker, whose latest start-up, Paradata, uses big data to help brands find suppliers, said Mr. Trump was a candidate very much in the spirit of Silicon Valley: “He’s a start-up kind of guy. He has a lot of ideas and pivots away from them if they don’t work, just like the Valley does. He’s more viral than Facebook ever was.”

Still, even Mr. Slinker says there is good reason for the lack of enthusiasm. “Silicon Valley is an extremely disruptive place, but the one thing it doesn’t want disrupted is Silicon Valley,” he said. “And so it’s pushing back on Trump.”

The venture capitalist Marc Andreessen, who backed Mr. Romney in 2012, said on Twitter that he was supporting Mrs. Clinton. Meg Whitman, a former candidate for governor in California who now runs Hewlett Packard Enterprise, labeled Mr. Trump “unfit to be president.” When Mr. Thiel was revealed as a Trump delegate, a columnist for the tech news site Pando said he was “utterly ashamed” that Mr. Thiel was a Pando investor. Mr. Thiel declined to comment.

Another Trump supporter in Silicon Valley, Tyrone Pike, had some business dealings with the candidate many years ago in Atlantic City, N.J., and was favorably impressed. As for Mr. Trump’s more extreme pronouncements, “I kind of write them off,” said Mr. Pike, who sold a software start-up to Citrix and is building another company. “He’s more of a moderate than any of his words.”

Earlier in the primaries, Mr. Trump suggested boycotting Apple if the company did not help the government crack the iPhone used by one of the attackers in the mass shooting last year in San Bernardino, Calif.; clashed with Mr. Zuckerberg over immigration; and posted on Twitter that if Amazon “ever had to pay fair taxes, its stock would crash.”

Bobby Franklin, the president of the National Venture Capital Association, thinks Mr. Trump will pick up support among tech people as he moderates his views.

“The Trump we have all witnessed for the past several months is probably not the Trump we will all be thinking about as we go into the voting booth,” said Mr. Franklin, whose organization does not endorse presidential candidates. “A general election candidate has always been different than a primary candidate.”

Yet a few weeks ago, after Mr. Trump’s primary opponents all dropped out and he might have been expected to make conciliatory noises, he unloaded again on Amazon and Mr. Bezos. Mr. Trump said, among other things, that Mr. Bezos has “got a huge antitrust problem because he’s controlling so much.”

Mr. Bezos owns The Washington Post, which has covered Mr. Trump intensively and critically. The internet tycoon said at a Post-sponsored tech conference that he was “very, very comfortable with all of Amazon’s approaches and behaviors,” The Post reported.

Mr. Trump’s comments signal a turnabout from Amazon’s experience under President Obama. The retailer helped instigate and was the major beneficiary of an antitrust case the Justice Department brought against Apple and the major book publishers. Jay Carney, a former press secretary for Mr. Obama, is now senior vice president for corporate affairs at Amazon. He declined to comment.

The Obama administration was even closer to Google, drawing several staff members from the search giant, including Megan Smith, the chief technology officer of the United States.

Mrs. Clinton is a closer fit with Silicon Valley than Mr. Trump, both ideologically and culturally, but she is not campaigning as tech’s champion. Whoever wins in November, the tech community is likely to look back longingly at the last eight years.

“That tech is now a flash point in campaign debates is a reflection of the industry’s power and ubiquity in American life,” said Patrick Ruffini, a Republican strategist who has worked with the tech industry. “Silicon Valley will need to learn to expect that it won’t be seen as a benevolent actor in every quarter, and prepare accordingly.”

In other words, he said, “the era of Silicon Valley exceptionalism is over.”

A version of this article appears in print on June 2, 2016, on page B1 of the New York edition with the headline: Few Likes for Trump From Silicon Valley. Order Reprints| Today's Paper|Subscribe

Summary: There may be no love lost between Donald Trump and the tech world, but he is likely to need tech backers as his campaign turns to the general election.


SAN FRANCISCO — Indus International, a computer software maker, moved to Atlanta from the frenzy of Northern California's high- technology scene earlier this year, after it paid $4.3 million to settle a passel of investor lawsuits accusing it of fraudulently overstating revenue.

Executives of the once-profitable company, which sells software and services to help large corporations manage their assets, say they are confident that its revenue growth is back on track and that its bookkeeping problems are history.

But Indus International ( news/quote ) is not out of the woods. Not yet.

Back in San Francisco, officials of the Securities and Exchange Commission and the Justice Department are completing parallel investigations of the accounting methods used by the company in late 1999 that led to the investor lawsuits. They are expected to announce their findings late this month. People close to the investigation said that both civil and criminal charges against the company and former employees were under consideration in the case.

Indus, in a document filed last week with the S.E.C., disclosed that it had been cooperating with the S.E.C.'s formal investigation and had offered to settle the matter without admitting or denying wrongdoing. J. Michael Highland, chief financial officer of Indus, said the company otherwise had no comment on the S.E.C. and Justice Department investigations.

As if things were not difficult enough for Indus and other technology start-ups that managed to survive the Internet collapse through brutal restructuring and job cuts, many are now under investigation by law enforcement authorities for the way they recorded the ringing of their cash registers during the feverish competition of Nasdaq's bubble years.

Responding to widespread concerns that investors were not always given reliable financial information in that time of frantic revenue growth, regional offices of the S.E.C., the Federal Bureau of Investigation and the United States attorney's office here are cooperating in a legal crackdown on accounting violations.

A tough law-enforcement response to accounting irregularities, of course, is not new. In the past year, federal investigators have pursued cases of irregularities at companies like Waste Management ( news/quote ), Cendant ( news/quote ) and Sunbeam. But now the government is turning up the heat in Silicon Valley, home to a preponderance of questionable accounting, particularly among software companies, during the Internet boom.

Over the last four years, nearly one in five accounting restatements — red flags for potential misconduct — have been by companies in California, according to a study by Arthur Andersen, the accounting firm. (Arthur Andersen was itself the recent subject of an S.E.C. civil sanction for the way it audited the books of Waste Management, the trash-disposal company, and agreed to a settlement without admitting or denying civil fraud allegations.) In the same four- year period, the total number of restatements for all industries has nearly doubled, Arthur Andersen's report said.

So far in the technology sector, federal investigators and prosecutors here have set their sights on relatively small companies, where a high proportion of problems center on what accountants call improper "revenue recognition" — the recording of revenue that does not exist. It could be, for example, from a pending sale that is misclassified as completed, or a service contract in which money has not yet changed hands.

The Arthur Andersen study of accounting restatements from 1997 to 2000 showed that 27 percent of the restatements nationwide had been filed in the software and computer industries. About 62 percent of the software companies involved had annual gross revenue of less than $100 million.

The rise of accounting fraud investigations, specifically related to overstatement of revenue, reflects a serious white-collar crime trend in the high-technology sector in recent years, said Leslie B. Caldwell, chief of the securities fraud section for the United States attorney's office here.

"The pressure to do this in the technology industry was intense because the expectation for growth was so high, and it wasn't sustainable," she said, without commenting on specific cases.

The inquiry at Indus International focused on revenue for the third quarter of 1999. According to the shareholder lawsuits against the company and former executives, the revenue total included sales derived from "irregular contracts," money that was not received during the quarter in question. Last October, Indus International agreed to settle the suits for $4.3 million without admitting or denying wrongdoing.

Previously, Ms. Caldwell said, her office waited for the S.E.C. to refer cases for criminal investigation. But now, "we're taking the bull in our own hands," she said.

"There are a number of matters under investigation of corporations that cooked their books to meet Wall Street's expectations — expectations that the companies themselves created," she added.

Summary: As if things were not difficult enough for technology start-ups, many are now under investigation for the way they handled their finances


The coastal fog along the Californian coast has declined by a third over the past 100 years – the equivalent of three hours cover a day, new research shows.

And it is not just bad for scenery, the reduction in the cooling effect of the fog could damage the health of the huge Redwood Forests nearby.

"Since 1901, the average number of hours of fog along the coast in summer has dropped from 56 per cent to 42 per cent, which is a loss of about three hours per day," said the study leader Dr James Johnstone at the University of California.

He said that it was unclear whether this is part of a natural cycle of the result of human activity, but the fog is receding because of a reduction in the difference between the temperature of the sea and the land.

"A cool coast and warm interior is one of the defining characteristics of California's coastal climate, but the temperature difference between the coast and interior has declined substantially in the last century, in step with the decline in summer fog," he added.

His findings, published in the journal Proceedings of the National Academy of Sciences, came from weather records kept at airports along the coast.

Professor Todd Dawson, co-author, said the decline could be disastrous for the nearby ecosystems.

"Fog prevents water loss from Redwoods in summer, and is really important for both the tree and the forest," he said. "If the fog is gone, we might not have the Redwood forests we do now."

Summary: The sight of Golden Gate Bridge towering above the fog will become increasing   rare as climate change warms San Francisco bay, scientists have found.


Catherine Zeta-Jones and Michael Douglas

04/16/2014 AT 02:20 PM EDT

The couple, who decided to step back and

last June, hit a red carpet event together for the first time together since their break on Tuesday for opening night of

at The Public Theater in New York City.

The off-Broadway play, starring 17-year-old Chloë Moretz, concerns the aftermath of a school shooting and is directed by Steven Soderbergh, who directed both Douglas, 69, and Zeta-Jones, 44, in 2000's

The couple looked relaxed and happily posed for photos, with Zeta-Jones in a plunging black dress and sporting blunt bangs.

The outing marks the latest sign of togetherness for the pair, who are parents to son Dylan, 13, and daughter Carys, 11, on Sunday, as they have been steadily

"It is so easy to just give up," a longtime family friend tells PEOPLE. "But they wanted to put in the work. I'm really happy for them."

Summary: The couple attended opening night of The Library in N.Y.C.


Sorry, Gwyneth Paltrow, it takes more than a spot on "Glee" to melt your ice-princess image.

Abbe Diaz, who spent several years as a maitre d' at some of Manhattan's poshest restaurants, has the dish on stars' bad behavior - and the regal "Country Strong" star is among those she roasts on her PXThis blog and the books it has spawned.

So while Paltrow tries to recast herself as a relatable mom (see the new Good Housekeeping cover), Diaz maintains she's got some work to do.

After serving Paltrow about a half dozen times in her years as a maitre d' (from 2000 to 2004), Diaz says the actress has a "passive-aggressive comportment … meant to unnerve the plebeians."

"If you're not worthy, it's like you're not there," the author tells us, although she adds, Paltrow "likes boys" - servers, that is - "as long as they're cute and sweet."

Diaz first made a splash with insider restaurant gossip on her blog, PXThis. "PX" stands for "personne extraordinaire" - French for "VIP" and restaurant code for celebrity bookings. She turned her experiences into the diary-style book "PX This." A second, "PX Me: How I Became a Published Author, Got Micro-Famous, and Married a Millionaire," arrives in June. It will describe Diaz's brushes with Internet infamy, including feuds with Gawker and former employer Jean-Georges Vongerichten.

Her celeb stories aren't all bile, however. She says Will Smith is a "huge, huge" tipper - "like 100%." Stars like that seem to "remember what it's like to struggle a little bit for your cash," she concludes.

But not all do: Ex-restaurateur (and a former Diaz boss) Brian McNally once expressed surprise that Ellen Barkin wasn't nicer to the staff - because he'd dated the actress back when she was waiting tables. Diaz dealt with Barkin several times when she dined with Julianne Moore, who was polite to the point of being apologetic. "Overcompensating," Diaz speculates.

Some stars aren't even nice to each other. Diaz recalls seeing designers Marc Jacobs and the late Alexander McQueen, each with an entourage, at adjacent lunch tables — and each table acting like the other "wasn't even there."

The toughest customers, she says, are niche VIPs, like magazine editors, who go unnoticed by most NYers but are used to royal treatment within their worlds. Real A-listers hesitate to wield clout.

Once, for example, a colleague of Diaz's failed to recognize Hilary Swank and turned her away. "She was a little surprised," Diaz says, but clearly didn't want to say anything.

Fortunately, the misunderstanding was sorted out. Celebrities can count on happy endings - or at least a table.

Contact Gatecrasher:Frank DiGiacomo: fdgiacomo@nydailynews.comCarson Griffith: cgriffith@nydailynews.comMolly Fischer: mfischer@nydailynews.com

Summary: Abbe Diaz, who spent several years as a maitre d' at some of Manhattan's poshest restaurants, has the dish on stars' bad behavior - and Gwyneth Paltrow is among those she roasts on her PXThis blog and the books it has spawned.


From Zola Budd to Greg Rusedksi, Mike Catt to Kevin Pietersen, and Owen Hargreaves to Tiffany Porter, Britain has benefitted hugely from men and women opting to represent Britain rather than the country of their birth for all manner of different reasons.

Some of those have certainly been more legitimate than others and Porter, the American-born hurdler with a British mother, will need little reminding of being challenged to sing ‘God Save the Queen’ at one of the most memorable and awkward press conferences in recent years.

The difference with the way Turkey (along with Qatar, Bahrain and others) has gone about things is the scale of its effort to abuse the system and the shameless nature of it.

The majority of the athletes who were born and raised elsewhere but will represent Turkey at the European Championships this week have barely even set foot in the country. Prior to their transfer they could probably not pick it out on a map.

Yet a handful of them are likely to stand on the podium in Amsterdam this week with medals round their neck as the Turkish flag is raised – just as Can did on Wednesday evening.

It is a sad day when gold medals can be acquired in such a brazen manner.

Summary: Growing up and taking her first strides in the world of junior athletics, Yasemin Can could never have envisaged standing on top of the European Championships podium with a 10,000m gold medal round her neck.


The salvos are flying in the art media world as several former staffers of Blouin Media get ready to launch a rival to its ArtInfo.com.

Ben Genocchio, former editor-in-chief of the website artInfo.com, said he has led a small house rebellion and hired seven former staffers for the new rival website, Artnet News, set to launch Feb. 24.

Louise Blouin, who owns Gallery Guide, Blouin Art+Auction, Modern Painters, Blouin Lifestyle and other art-connected sites in addition to ArtInfo.com plus show dailies, says talk of staff rebellions are greatly exaggerated.

“It was two junior-level people,” she claimed.

“I got fed up with Louise’s nonsense,” said Genocchio, who claims he resigned in late December and started his new job Jan. 2.

Blouin, at first, was diplomatic regarding Genocchio’s upstart operation, passing along a, “All I can say to him is the best of luck.”

But in the next breath she added, “Benjamin was fired. You want it. You got it.”

There appears to be no love lost, here.

“With any luck we will drive Louise out of business,” Genocchio said. When told that Blouin had said he was fired, he insisted that was wrong and produced a copy of his Dec. 12 resignation letter that circulated to staff.

The former publisher of Art+Auction, Kate Shanley, and the magazine’s associate publisher, Wendy Buckley, also landed at Artnet News as did Victoria Fuller, the senior vice president of business development at artinfo.com.

“They came over as our bread winners,” said Genocchio.

Blouin, however, insisted Shanley and Buckley were merely “consultants” whose contracts was not renewed. Shanley and Buckley could not be reached for comment.

“We are hiring,” she insisted. Art + Auction hired a new publisher, David Gersky, who had left the publisher’s job two years ago. “He loved it so much he came back,” she said.

“We are making money,” Blouin said. “We’ve been making money for three years now. We are no longer a startup.”

Blouin said the company is trying to negotiate an end to its lease at the Starrett-Lehigh Building on the West Side, which expires this year, and is moving to new offices in TriBeCa.

She said it was not true that the company was moving because it is being evicted.

“We are not being evicted,” she said. “We are moving out. We are moving to a new place with a lease to buy.”

Summary: The salvos are flying in the art media world as several former staffers of Blouin Media get ready to launch a rival to its ArtInfo.com. Ben Genocchio, former editor-in-chief of the website artInfo.…