Audit Notes: Re/coding the Valley, Kellogg’s labor fight

A look inside the bubble

Re/code’s Nellie Bowles went to a Startup and Tech Mixer in downtown San Francisco and came away with an instant classic of the Dispatches from Silicon Valley genre.

When the histories of the second great tech bubble are written, this quote should lead the book:

“We don’t use the word ‘party.’ We’re bringing consciously designed spaces and innovative thinkers together to inspire,” said Vecchio, who is 26 and formerly worked at Apple and J.P. Morgan. “This is our fifth mixer. People are like, ‘Andrew, what could be next?’ And it’s like, ‘Oh. Done.’ We have a mechanical bull. Game-changer. Innovate.”

Every word of that paragraph is perfect, but my favorite part is probably “26 and formerly worked at Apple and J.P. Morgan.”

Then again, this quote is great too:

“Most startup mixers are like, “Let’s go to a bar and get f—ed up.” Here, there’s a mechanical bull. There’s an arcade. This is actually how people make deeper connections. After this, they’ll be like, ‘Yeah, man I fell off the mechanical bull before you did,” Saari said. “I invited a lot of my friends who aren’t in tech. Like you, Tony.”

“Actually, I am. I’m in wine tech,” said 33-year-old Tony Nguyen.

— Gawker’s Adam Weinstein makes a great catch on a story Business Insider altered without flagging the changes.

Here’s the original kicker of the story, which posited that Buzzfeed didn’t get hammered by recent Facebook algorithm changes because it buys lots of ads from Facebook:

If that’s the reason, then the message Facebook is sending isn’t so much that it wants “high quality” content for its News Feed. It’s that if you are a media company, and you depend on Facebook for your traffic, you better make sure Facebook is benefiting from your existence.

And here’s the ending now after Buzzfeed’s CEO complained:

More likely, it’s that, unlike all those other sites, Buzzfeed employs several respected journalists who publish hard news and smart analysis. Maybe, in the eyes of Facebook executives, this makes all Buzzfeed content “high quality” and therefore News Feed-worthy. Other sites, including Slate, The Atlantic, and Business Insider, have also invested in journalism and continue to benefit from Facebook traffic.

A strikethrough would have been optimal, but a note telling readers the story had been significantly changed was required.

But it’s good that Nicholas Carson has now updated the piece with an explanation.

— Meanwhile, back in the old economy, The New York Times looks at a labor dispute in Memphis, where Kellogg’s has locked out 225 workers for more than three months, cutting off their health insurance and hiring temporary workers (or scabs, if you like) to keep the factory running.

Steven Greenhouse is excellent in countering misleading information from Kellogg’s management:

In the company’s view, its Memphis employees have it very good. “Our current employees, on average, earn more than $100,000 annually,” Ms. Charles said. Before overtime, workers average about $58,000 annually, but many workers say they are often required to work seven days a week and are often given just two days off a month. Some workers talk of having to work 40 or 50 days in a row. With all that overtime, many top $90,000, even $100,000 a year.
I’m sure it was an oversight that Ms. Charles neglected to mention that those six-figure workers work 60-plus hours a week because Kellogg’s makes them do so.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.