Technology
BUSINESS Technology

This week in L.A. tech: Three Day Rule lands funding, Snapchat snags encryption expert and Surf Air flies north

Three Day Rule, a matchmaking service with headquarters in Santa Monica, has raised $650,000 from the DAN Fund investment group and $550,000 from several wealthy individuals. The company’s 20 matchmakers -- spread across seven cities -- use software and intuition to find potential partners for customers, who pay about $4,000 for three months of assistance.

Three Day Rule identifies matches from its own database, which includes people who have signed up free of charge at networking events, industry conferences and on the firm’s website. But the pool goes beyond that. Agreements with Match.com, JDate, Christian Mingle and OkCupid allow Three Day Rule to choose from people listed on those dating websites too. (Match.com users must opt in to be accessible.)

Match.com led a $1.25-million investment in Three Day Rule in 2014.

Three Day Rule winnows selections with software that can analyze photos of former significant others’ to spot people with similar facial structures. Algorithms also run through survey responses to place people into proprietary categories such as “humble executive.” The extensive questionnaires cover dating history, family background and life goals.

Customers see bios and photos of matches. Recommendations are refined based on post-date feedback.

The goal is to automate most of the matching process, so that the matchmakers, who are employees, can spend more time signing up customers and vetting people for inclusion in the database. About 70% of the job today is analyzing matches, a figure the company hopes to bring down to as low as 40%.

“There’s about 2,000 mom-and-pop matchmakers in the U.S., but they don’t have the technology or strategic partnerships to help them scale,” said Talia Goldstein, a former TV show producer who founded Three Day Rule in 2010.

The start-up plans to use the new cash to boost marketing and produce an annual profit this year.

Goldstein said there’s a high possibility Three Day Rule sells to a major dating app someday, but the short-term goal is to be profitable and re-assess.

“It’s important for the business in general,” Goldstein said of generating cash. “You never know what can happen in start-up life. And I want to be in it for the long haul.”

New member on Snapchat's cybersecurity team

Snapchat Inc. recently hired encryption expert Moti Yung from Google Inc., highlighting its deepening interest in locking down conversations on the app.

People who’ve worked with Yung said he has a track record of finding new ways of applying the mathematical foundations of cryptography, the study of constructing secret codes, to business issues.

He “is recognized worldwide as a thought leader in cryptography,” said Adam Young, who co-authored a book on the subject with Moti Yung.

Tal Malkin, an associate professor of computer science at Columbia University, where Moti Yung also works, said her colleague “has pioneered and transformed important areas” such as producing digital signatures, thwarting cyberattacks on encryption and computing data securely.

“I have no doubt that he will make significant contributions to Snapchat,” Malkin said.

The Venice start-up at one time faced criticism from cybersecurity experts for ineffectively using encryption to scramble conversations as they traversed the Internet. And online privacy advocates have called out Snapchat for not encrypting messages stored on the company’s servers in a way that would prevent it from reading conversations. In other words, Snapchat, like many of its rivals, has the potential to be more secure, and the chatter around the FBI’s fight with Apple over the risks of strong encryption suggests people wouldn’t mind tougher locks protecting their personal information.

Snapchat generally deletes messages after they’re opened by intended recipients. That feature, which helps make Snapchat special, has forced the company to be careful with security. But Snapchat’s handling of user data has become an increasingly sensitive topic.

With a huge number of users, Snapchat is facing growing demands to leverage data to help advertisers on the app target subsets of users.

Another reason: It’s collecting more and more data. Snapchat says users now spend an average of 25 to 30 minutes a day on the app. Variety recently commissioned a survey of 13-to-24-year-olds in the United States that showed  63% of respondents use Snapchat as their primary means to chat with friends.

It doesn’t end there. Last week, Snapchat reached an agreement to spend a reported $100 million on a company that lets people personalize emojis with a cartoonish avatar of themselves. That start-up, Bitstrips Inc., has a popular smartphone keyboard widget called Bitmoji. Keyboard apps raise concerns among security specialists because they can, if desired, record every keystroke on a smartphone.

Bitstrips’ website states “at no time are we reading, transmitting or storing anything you type.”

But “at the end of the day, the adage that if you aren't paying for a product, you are the product tends to hold true,” said Mark Nunnikhoven, a security expert who continues to monitor keyboard apps.

How Snapchat deals with data collection as it integrates Bitstrips will be telling about the company’s security stance. Also worth watching will be whether Bitstrips, if it continues to exist on its own, re-writes its privacy policy. Companies such as Facebook and Snapchat have tried to ditch the legalese of traditional privacy policies in favor of detailed breakdowns in colloquial English. But Facebook hasn’t overhauled the privacy policy of WhatsApp, the chat app it bought for about $22 billion in 2014.

Surf Air to begin flying into San Jose

Members-only airline Surf Air is adding three daily flights to San Jose International Airport from Hawthorne Municipal Airport.

Surf Air's new service, which begins April 4, brings to 17 its total number of daily flights on peak weekdays between three Southern California airports and three in the Bay Area. Surf Air subscribers pay about $2,000 a month to fly as often as they want, limited to the West Coast, on small propeller planes. The Santa Monica start-up’s offering has appealed to the tech elite, and potential subscribers can try out the new route for $500 next month.

A lawsuit filed last year by a Surf Air co-founder who says executives and investors diluted his stake in the company remains unresolved, with attorneys agreeing earlier this month to a May 2017 trial date.

AT&T makes super-fast Internet service available to more of Southland

AT&T announced Tuesday that its gigabit-per-second Internet service option now is available across more of Los Angeles. Tens of thousands of houses, apartments and small businesses in Eastvale, Irvine and Los Angeles have access to AT&T GigaPower, which under best conditions can download a DVD’s worth of information in about 30 seconds, or more than 10 times faster than standard Internet service.

Eric Boyer, AT&T’s senior vice president of wireless and wired product marketing, said the company has been installing new equipment and fiber optic cables in neighborhoods where the company expects strong demand for GigaPower. But it has been prioritizing cities that make AT&T go through the least red tape permitting-wise. AT&T said it planned to triple Gigapower availability across the region this year, including to Arcadia and Glendale. Boyer claimed that sales of the service -- which starts at $110 per month -- have exceeded expectations since launching in December.

Why tech employees in San Jose are more likely to have 'tech jobs'

An analysis of federal data by the Computing Technology Industry Assn. shows that 56% of people working in the technology industry in the San Jose region -- a.k.a. Silicon Valley -- are in tech-centric occupations. The figure is just 43% in the Los Angeles area.

Why is there such a big difference?

Analysts for the trade organization told the Los Angeles Times that Los Angeles has a sizable telecommunications sector, which, because of a big sales and customer service apparatus, has one of the lowest proportions of tech workers.

But that might not be the only reason. Start-ups tend to have more tech workers, and of course, Silicon Valley has a lot more of those.  

Overall, California’s tech industry added nearly 60,000 jobs last year, putting the total workforce at 1.15 million. The average wage? $149,300, or about 151% more than the average private sector worker in California, according to CompTIA. Software developers are the most employed position in the Bay Area and in L.A.

Software company with unreleased VR program gets funding

Visionary VR, which is developing software to edit films destined for screens in virtual reality gadgets, announced the receipt of $6 million in funding. DFJ Ventures led the financing of the Los Angeles start-up, with other investors including the Venture Reality Fund, BDMI, GC VR Gaming Tracker Fund (Greycroft Partners), Vayner/RSE and End Cue.

Visionary hasn’t released its program yet. But Bubba Murarka, partner at DFJ and former Facebook product development leader, said “Visionary VR’s product left our team slack-jawed,” he said. Visionary VR marked the fund’s first VR investment.

Elsewhere on the Web...

Los Angeles-based Styku has developed software to analyze how overweight people are using measurements from Microsoft Kinect sensors, according to the Orlando Sentinel.

Thrive Market, a Culver City start-up that sells organic snacks and beauty products to subscribers, estimates it will generate $10 million in sales this month -- or 500% more than last March, according to Re/code.

Hyperloop Technologies estimates that it will invest more than $121 million into its test site in North Las Vegas, according to Vegas Inc. The company has raised about $100 million from investors, the report said.

In dueling interviews on CNBC, both Hyperloop Technologies and rival Hyperloop Transportation Technologies claimed to be the leader in developing the high-speed transportation system.

In case you missed it...

Netflix's choice of the former Warner Bros. studio in Hollywood as the home of its Los Angeles headquarters may be the biggest symbol of digital media muscling into the entertainment capital — but it also highlights how the region's smaller, independently owned studio lots are bending to a burgeoning segment of the industry that includes Amazon, Hulu, Buzzfeed and others looking to do things on the cheap.

Want to get from Los Angeles to Coachella in less than an hour? Uber will take you — for $4,170 one way. (Helicopter…)

Redbox, the operator of DVD rental kiosks found in supermarkets and convenience stores, is reportedly attempting to launch a video streaming service again.

For all the lip service the technology industry pays about valuing diversity and equality, it has struggled to close the gender pay gap, with men making on average 28.3% more than their female counterparts, according to the latest Glassdoor report.

Coming up...

Japanese video game developer Square Enix is hosting an event Wednesday at the Shrine Auditorium in Los Angeles to announce details, including the release date, for “Final Fantasy XV,” the 15th installment in the sci-fi video game.

paresh.dave@latimes.com

Twitter: @peard33

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