<p class="source"><span>Business Insider</span></p><p class="caption">Google Assistant with Google Lens</p><p>Google I/O is, far and away, Google's most important single event of the year, where CEO Sundar Pichai presents his grand vision for the company in the year to come. </p><p>So it was a little baffling, at first blush, that Google - a search company, which makes its money from search advertising - would spend so much time talking about <a href="http://www.businessinsider.com/google-photos-walkthrough-2017-4">Google Photos</a>, its photo-sharing service, and camera-related apps in general. </p><p>At the same time, it makes perfect sense, in its own way. It's the same old Google, adapted for a world where cameras rule over keyboards.</p><p>Way back in 2009, it launched an <a href="http://www.businessinsider.com/introducing-google-goggles-2009-12">app called Google Goggles</a> that let you snap a picture of, say, a book, and search for it online. On Wednesday the company brought the idea back with <a href="http://www.businessinsider.com/googles-lens-feature-can-connect-your-phone-to-wifi-using-your-camera-2017-5">Google Lens</a>, an evolved version of the concept. Google Lens will make its debut as a feature in Google Photos within the next few months, and come to the Google Assistant digital assistant by the end of the year. </p><p>And while Google Lens might just seem like a bunch of clever, questionably useful new tricks for your camera, it hints at so much more.</p><p>Because while Android is the most popular operating system in the world right now, new technologies like voice assistants, virtual reality, and even smart appliances <a href="http://www.businessinsider.com/facebook-f8-mark-zuckerberg-on-augmented-reality-2017-4">threaten the dominance of the smartphone</a>. What we're seeing with Google Lens is the search giant grooming Assistant to be its failsafe in the event that the world moves on from the handheld computer. </p><h2>Computer vision</h2><p>Lens is debuting as we consumers are increasinlgy using cameras and our voices to interact with our devices. Where you used to type things out on a keyboard, you might now just snap a photo.</p><p>If you've ever taken a picture of a product label at the grocery store to help you remember it later, or sent a significant other a picture of a dropped mug so you didn't have to explain it in writing, you're already on the journey to this next big phase of computing. </p><p>With Google Lens system, you'll be able to get more information on a band that's playing a particular concert venue or watch their music videos by just taking a picture of the band's name on the venue's marquee. You'll also be able to automatically connect your phone to a WiFi network by simply snapping a picture of the password.</p><p>Lens - and its underlying technology - could turn your photos into an incredibly valuable source of data for Google. Every photo you've taken, or will take, becomes something that Google can use to figure out where you were, who you were with, what brands you were wearing, what restaurant you were at, and so on. </p><h2>Beyond text</h2><p>It's tempting to think of services like Google Assistant, Amazon Alexa, Apple's Siri, and Microsoft Cortana as just voice assistants that reside on particular devices like smartphones or smart speakers. But they're really just the most obvious parts of the huge, nebulous artificially intelligent systems that underly them, as <a href="https://www.theverge.com/2017/5/17/15651246/google-assistant-iphone-ai-future-interface-io-2017">the Verge</a> points out. And we're only just starting to figure out where and how those systems will fit into our lives and how we'll interact with them.</p><p>You can interact with Google Assistant by typing commands on your smartphone keyboard, by talking to your Google Home smart speaker or by snapping a picture on your phone. You can choose the way you interact with the data in Google Assistant, the same way that every faucet in your home connects to the same water main. </p><p class="source"><span>Google</span></p><p class="caption">Google Lens</p><p>When Google rolls Assistant out to cars, as is expected, it will be the same thing as what's on your phone. When Assistant gets integrated  - as it will - into fridges and lamps and thermostats and toasters, it will be the same Assistant. It's will be available on all of them, delivering the data you need to the closest device available.</p><p>So if the smartphone dies, as <a href="http://www.businessinsider.com/microsoft-ceo-satya-nadella-and-alex-kipman-on-windows-phones-2017-5">Microsoft</a> and <a href="http://www.businessinsider.com/facebook-f8-mark-zuckerberg-on-augmented-reality-2017-4">Facebook</a> expect it will, Google Assistant stands to actually outlive Android. It's a system for processing your data and delivering useful results that doesn't actually rely on any device. Whatever comes next, Google can have Assistant send answers through it, whether it has speakers, overlays images on the real world, or still uses an old-fashioned screen. </p><p>Google still has some things to work on when it comes to its intelligent assistant. Most notably, the vast majority of its revenue still comes from search advertising, but right now, there are no ads in Assistant. So Google has to figure out the business model if and as consumers move from its traditional text-based search page to searching with Assistant. </p><p>But if Google's mission is to keep users loyal through these turbulent technological times, Assistant is right on target. </p><p class="tagline">Get the latest Google stock price<a href="http://markets.businessinsider.com/stock/GOOG-Quote"> here.</a></p>            <h3>NOW WATCH: <a href="http://www.businessinsider.com/elon-musk-reveals-details-tunneling-project-boring-company-new-video-2017-4">Here's a visualization of Elon Musk's tunneling project that could change transportation forever</a></h3>                                    Please enable Javascript to watch this video

Google is reinventing search itself as it moves past Android and into our crazy future

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Justin Sullivan</span></p></div><p></p></div></div>Google revealed <a href="http://www.businessinsider.com/everything-google-announced-at-io-keynote">a handful of slick new products this week</a> that showed off its impressive artificial intelligence and machine learning tech chops. </p><p>Its <a href="http://www.businessinsider.com/google-assistant-2016-5">new conversational assistant</a>, for example, will take its traditional search product to the next level, letting users ask it questions, find suggestions, or book services through text chat in its <a href="http://www.businessinsider.com/google-launches-allo-2016-5">new messaging app Allo</a> or voice, <a href="http://www.businessinsider.com/google-home-voice-assistant-2016-5">in its new smart speaker, Home. </a></p><p>Google's building on many years of research, development, and data collecting here and it shows. </p><p>Although Home is essentially a follow-up to Amazon's Echo speaker, Google has much more experience with voice search and natural language processing. Ask Home a question, like "How tall is Steph Curry?" and you can follow-up with "What's his jersey number?" and Home will know who you're still talking about, where Alexa can only handle single queries. </p><p>"Our ability to do conversational understanding is far ahead of what other assistants can do," Google CEO Sundar Pichai boasted of Google's technology. "We're an order of magnitude ahead of everyone else."</p><p>But despite Google's behind-the-scenes smarts, the company will have some serious challenges ahead to get people actually using its new products. </p><h2>Playing catch up </h2><p>For one, <a href="http://www.businessinsider.com/google-io-announcements-didnt-break-new-ground-2016-5">they're already late to the game</a> and not actually available yet.</p><p>Jan Dawson, chief analyst at Jackdaw Research, sums it up <a href="http://www.wsj.com/articles/googles-new-products-reflect-push-into-machine-learning-1463598395?mod=e2twd">for The Wall Street Journal:</a></p><p><span>"The technology looks good in principle, but there's a significant risk that Google is coming into some of these markets too late to make a difference."</span></p><p>Assistant, Home, and Allo all nebulously launch "later this year." When they do finally hit the real world, Allo in particular will have to stand out in an already very crowded messaging space. </p><p>One developer I talked to at IO highlighted the challenge perfectly when he sheepishly told me how he'd been peer-pressured into buying an iPhone because his loved ones used iMessage. It was easier for him to switch phones than to convert them to an operating system-agnostic chat app like WhatsApp.</p><p>That's an extreme example but the point stands: messaging apps aren't useful if your friends haven't downloaded them. </p><h2>Making the benefits worth the creep factor</h2><p>To overcome that hurdle and convince people to convert from Facebook Messenger, WhatsApp, Snapchat, <a href="http://www.businessinsider.com/google-wont-kill-hangouts-app-2016-5">Hangouts</a>, or whatever else, as their main means of messaging, Google will need to convince people that having AI manage your life is <a href="https://twitter.com/search?f=tweets&amp;vertical=default&amp;q=allo%20creepy&amp;src=typd">more convenient than it is creepy. </a></p><p>At the ire of some privacy advocates, you'll have to <a href="http://arstechnica.com/security/2016/05/incensing-critics-google-engineer-ends-push-for-crypto-only-setting-in-allo/">sacrifice the end-to-end encryption</a> that's a staple in iMessage or WhatsApp to get the full benefits of Assistant (though Allo does have a fully encrypted incognito mode). </p><p>The allure of Assistant is that it can make <a href="http://www.businessinsider.com/google-launches-allo-2016-5">messaging more productive</a> by auto-suggesting replies based on your speech patterns and through image recognition and "remembering" things about you to tailor recommendations (for example, it could know you're vegan and suggest restaurants accordingly).</p><p>But do you want Google <a href="http://www.theverge.com/2016/5/19/11713786/google-allo-every-keystroke-a-google-search">becoming your voice</a>? What's the <a href="http://time.com/4341201/google-io-home-allo/">cost of convenience</a>?</p><p>As <a href="http://archive.is/H8LpW#selection-197.0-197.288">Apple blogger Marco Arment points out</a>, Google's vision of the future has missed the mark before:</p><p>As we hurtle towards a future potentially powered by artificial-intelligence and we grapple with what that means for our daily interactions, Google needs to prove that the benefits it can bring us from dancing so close to <a href="https://www.buzzfeed.com/charliewarzel/how-google-leapfrogged-the-creepy-line?utm_term=.qdW0AEBx8a#.jizJO7roLy">that "creepy line"</a> are worth it. That's the only way it can make up ground after launching too late. </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/elon-musk-spacex-falcon-9-rocket-cargo-launch-landing-video-2016-5">SpaceX made history again - watch its rocket deploy a satellite and land safely back on Earth</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="RvZzFjMzE6mlSBqKY6CFLTt-oCLoE8Fo" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Google's new products prove it has still the best tech chops - but it might not matter

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Calvin Klein</span></p><p class="caption">People were outraged at this 2014 Calvin Klein campaign.</p></div><p></p></div></div>There's a category of women that often fly under the radar in the modeling and clothing industries.</p><p>In a recent story, <a href="http://www.racked.com/2016/7/14/12060482/in-between-plus-sample-size-8-10-12-14" target="_blank">Racked </a>points out that these women are not truly plus size, but they're not thin (or a sample size), either. Oddly, Racked notes, there's plenty of women who actually look like middle-sized women - they're not curvy supermodels and they're not waifs.</p><p>They're often told they have to pick a side, or lose weight to have a career.</p><p><a href="http://www.businessinsider.com/jennie-runk-on-plus-size-industry-2016-6" target="_blank">Model Jennie Runk </a>was told if she wanted to be a model she'd have to lose weight - though she ultimately decided to accept her body type and be a plus size model.</p><p><a href="http://www.businessinsider.com/meet-iskra-lawrence-aerie-role-model-2015-8" target="_blank">Aerie's spokes model Iskra Lawrence</a> told Business Insider how she was dropped from an agency for being "too big" - but since embracing her curves, she's become a poster woman for body positivity.</p><p>For whatever reason, though, the media doesn't seem to want to see depictions of reality.  They only want to see what they believe are the two types of female bodies that exist - when, obviously, there are many.</p><p>To illustrate this, Racked points to a humorous anecdote from Mindy Kaling's book, "Is Everybody Hanging out With Me:"</p><p style="padding-left: 30px;"><span>"Since I am not model-skinny, but also not super-fat and fabulously owning my hugeness, I fall into that nebulous, 'Normal American Woman Size' that legions of fashion stylists detest. For the record, I'm a size 8 (this week, anyway). Many stylists hate that size because, I think, to them, I lack the self-discipline to be an aesthetic, or the sassy confidence to be a total fatty hedonist. They're like, 'Pick a lane.'"</span></p><p>And when a curvy model who's on the smaller side of the spectrum is touted as a "plus" size model, there's often lots of backlash - in part, because it's not an accurate representation of what "plus size" really is, and also, because it suggests that there's a need to lump women into a category, that simply having a body isn't enough.</p><p>Racked, for instance, points to how when Robyn Lawley appeared in Sports Illustrated, consumers were <a href="http://www.businessinsider.com/robyn-lawley-plus-size-model-in-sports-illustrated-2015-2" target="_blank">outraged that she was called 'plus size.'</a></p><p>And when Calvin Klein featured model Maya Dalbesio in a campaign in 2014, <a href="http://www.businessinsider.com/outrage-over-calvin-kleins-plus-size-model-2014-11" target="_blank">people were furious</a>. Though the company said she was a size 10, <a href="http://nymag.com/thecut/2014/11/calvin-kleins-plus-size-model-is-a-size-10.html" target="_blank">New York Magazine </a>noted she was a closer to an 8. Either way, people weren't happy to see that she was being grouped in the "plus" category. If the <a href="http://www.cnbc.com/2015/04/08/retails-plus-size-problem-designing-for-larger-sizes.html" target="_blank">average American woman is a size 14</a>, then that would make her below average.</p><p>Popular Gen Z model (and Kylie Jenner's best friend) Jordyn Woods has said that people above size eight can get lumped into the plus size category, simply because there's a need to justify why someone who <em>isn't </em>waif-like.</p><p>"<span>Well, I believe that once you're past a size 8, you're considered plus-size. Everyone has different body shapes, heights," she recently said to <a href="http://nymag.com/thecut/2016/07/jordyn-woods-plus-size-model-interview.html" target="_blank">The Cut</a>. "It's unfortunate because sometimes a curvy girl will say, "I'm a model," and people will look at her sideways. Then she'll have to say, "I'm a plus-size model." That's just society, you know? </span><span>Hopefully, if we stop using the term plus-size we can just create a broader definition for what a model is," she said.</span></p><p><span><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.facebook.com/ModCloth/photos/pb.9481787170.-2207520000.1446500715./10153712002437171/?type=3&amp;theater">Modcloth Facebook</a></span></p><p class="caption">Modcloth eliminated the term 'plus size.'</p></div><p></p></div></div></span></p><p>All of this translates to the industry: there's a clear segmentation between 'plus' and 'straight size,' It creates a mentality that there are two camps of women, rather than a seamless blur between how human bodies can differentiate from one another.</p><p>In turn, this can turn off plus size, women too - a foolish thing to do, considering that according to industry research firm NPD Group (via <a href="http://www.bloomberg.com/gadfly/articles/2016-05-10/plus-size-could-save-retailers" target="_blank">Bloomberg</a>), it's a $20.4 billion category.</p><p>Some retailers are trying to fight this by either remove. In October, online retailer ModCloth tried to ameliorate that problem by <a href="http://www.businessinsider.com/why-modcloth-stopped-carrying-plus-size-clothing-2015-10" target="_blank">ditching its "plus size" section on its website</a>. </p><p>And experts believe that it would behoove retailers to include more sizes - including plus sizes - in their imagery, too, because it could pay off...literally (which should be particularly enticing considering how many people <a href="http://www.businessinsider.com/where-consumers-are-spending-money-2016-5" target="_blank">aren't spending money on apparel nowadays</a>). </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/amazon-prime-day-best-deals-shop-online-free-shipping-2016-7">It's Amazon Prime Day - here are 5 great deals</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="JvMXZvNDE6Nf-kl5aQlyQsJ_mb9f88EW" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

There's a group of women that the clothing industry is ignoring - and it's costing them tons of money

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Yudhi Mahatma/Antara Foto/Reuters</span></p><p class="caption">Google cofounder Sergey Brin with a Project Loon internet-beaming balloon.</p></div><p></p></div></div></p><ul><li><strong>Google announced Wednesday that it would reabsorb Nest, the smart appliance company that was running independently under Google's parent Alphabet.</strong></li><li><strong>The move calls into question what a successful exit looks like for one of Alphabet's so-called Other Bets companies.</strong></li><li><strong>Alphabet insiders have expressed confusion over the mission for Other Bets as key executives headed for the door.</strong></li></ul><p><br />Two-and-a-half years ago, Google made a radical move that shocked the entire industry.</p><p>It split itself up.</p><p>The hodge-podge of side projects and skunkworks that didn't fit neatly into Google search and <keyword id="35666" type="COMPANY" weightage="60" keywordseo="advertising">advertising</keyword> business were spun out into their <a href="http://www.businessinsider.com/google-officially-becomes-alphabet-today-2015-10">own separate companies, called "Other Bets."</a></p><p>Those projects, which included everything from self-driving cars to delivery drones, were reborn as independent entities with clever new names and big dreams: Verily (life sciences), <a href="http://www.businessinsider.com/google-waymo-driverless-car-strategy-2017-1">Waymo (self-driving cars)</a> and GV (a venture capital firm that invests in early-stage startups), to name a few. </p><p>The hope was that one of these Other Bets would become the next multibillion-dollar tech company and help diversify parent company Alphabet's revenue sources beyond Google's digital ads business.</p><p>But this grand vision was always laden with some unanswered and uncomfortable questions: What does a successful Other Bet look like? When will one of those companies graduate from a mere "bet" to a winner that can stand on its own? Are they supposed to reach a point where they're big enough to spin out into a separate company outside Alphabet with a separate board of directors?</p><p>In short, when does an "Other Bet" stop being an Other Bet?</p><p>I've spoken to numerous people across various Alphabet companies over the last year, and none of them had a unified answer for what an Other Bet success story should look like.</p><p>On Wednesday, the question was thrust into the spotlight when Nest, a company that makes smart home appliances, was stripped of its Other Bet status and <a href="http://www.businessinsider.com/nest-to-be-folded-into-google-hardware-division-2018-2">reabsorbed into Google</a>. Instead of going it alone, Nest (which Google originally acquired in 2014 for $3.2 billion) was going into the mothership. </p><p>I decided to loop back with some of those Alphabet insiders in light of the Nest news and get their thoughts. Nearly three years after the big Alphabet reorg, confusion remains. There's little consensus about whether the Nest move represents the first sign of a reversal of the Alphabet strategy. But it's clear that many insiders view Nest as the most overt example of significant shortcomings in the Other Bets blueprint which have until now played out more subtly. </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="http://googleblog.blogspot.com/2014/01/introducing-our-smart-contact-lens.html">Google</a></span></p><p class="caption">Verily, Alphabet's Other Bet that works on life sciences, makes a smart contact lens that measures blood sugar.</p></div><p></p></div></div></p><p>Some current and former Alphabet employees have told me the structure has been good for Google. Google, under CEO Sundar Pichai, no longer has to worry about spending time and effort managing far-out projects like <a href="http://www.businessinsider.com/googles-parent-company-quietly-made-project-loon-a-corporation-2017-10">internet balloons</a> and self-driving cars. It can concentrate on improving core products like search, Gmail, and Google Maps while investing in growth areas like YouTube, AI, and hardware. Google has had an incredible run since Alphabet formed under this new structure.</p><p>And the structure seems to have allayed pressure from antsy shareholders, worried that Google was spending too much money on fanciful projects.</p><p>But the benefits to the new structure stop there, according to many insiders.</p><h2>An exodus of executives that speaks volumes</h2><p>In 2016, about a year after Alphabet's formation, <a href="http://www.businessinsider.com/alphabet-executive-departures-2016-10">a string of key executives left the company</a>. Tony Fadell, the Nest CEO, stepped down in June 2016. Bill Maris, the CEO of GV, left in August 2016. Chris Urmson, the former tech lead of Google's self-driving car division also left in August of 2016. Craig Barratt, the CEO of Access (Google Fiber) left in October 2016. And Dave Vos, the head of X's drone delivery division called Project Wing, also left in October 2016. </p><p>The friction seemed to be that the heads of some of Alphabet's Other Bets, or of divisions that were on track to become Other Bets, were frustrated by the Alphabet structure, according to some close to the company. They signed up with the promise of being CEOs running their own startups, but were instead constrained from the top by Alphabet's CFO Ruth Porat, who controlled funding, as well as by the whims of Google cofounders Larry Page and Sergey Brin.</p><p>It's no coincidence that many of these departing executives went on to start their own companies. Urmson now has his own self-driving car startup called Aurora, and Tony Fadell is running a new VC firm called <a href="https://www.futureshapellc.com/">Future Shape</a> that plans to back early-stage tech startups. </p><p>The vision of Alphabet was to create nimble startups, but many of the entrepreneurs tasked with leading these startups concluded that they had better prospects of accomplishing their goals outside Alphabet than within. </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Medium / Chris Urmson</span></p><p class="caption">Chris Urmson, the former tech lead for Google's self-driving cars, left Alphabet in 2016. He now runs Aurora, a rival self-driving car startup.</p></div><p></p></div></div></p><h2>Make money or make an impact?</h2><p>Complicating matters is the fact that the medley of Other Bets have different definitions of success, some of which have little to do with business fundamentals.</p><p>Take Jigsaw, an "incubator" within Alphabet that develops products to solve real-world problems like attacks on free speech by foreign governments. Laudable though they may be, the goals are broad and nebulous, based around achievements like having "impact" as opposed to creating products that make money. That alone is at odds with the notion that Other Bets are supposed to find a way to turn themselves into real businesses.</p><p>Then there's X, the so-called "Moonshot Factory" that works on ambitious projects like wind energy and drone delivery. X's mission is to "graduate" its ideas into real companies that benefit Alphabet. But even the projects that have already graduated from X are all over the map. Some graduates like Waymo, Verily, and Chronicle (a cybersecurity company) became new Other Bets under Alphabet. But other graduates, the geothermal energy company Dandelion and construction company Flux became a independent companies outside the Alphabet.</p><h2>The big new revenue pool didn't even come from an Other Bet</h2><p><a href="http://www.businessinsider.com/alphabet-q4-2017-earnings-revenue-eps-analysis-2018-2">In the fourth quarter, Alphabet announced a major milestone</a> in its quest to expand beyond advertising revenue -one of the main motives for creating the Other Bet companies. But the new source of non-advertising revenue, pegged at $1 billion a quarter, was not from an Other Bet.<a href="http://www.businessinsider.com/google-cloud-q4-2017-revenue-2018-2"> It came from Google Cloud</a>, a business within Google itself. </p><p>Apparently the Other Bet strategy is not the most efficient way to create a new multi-billion dollar business.</p><p>As for Nest, Alphabet's decision to bring the smart appliance company back to Google has been well received. One Nest employee told me this week that the move will help Nest better compete with the likes of Amazon and Ring in the connected home space. Plus, there weren't any layoffs. All Nest employees will continue to work on the same stuff. (However, Nest's cofounder <a href="http://www.businessinsider.com/matt-rogers-nest-cofounder-steps-down-2018-2">Matt Rogers is stepping down soon</a>, a sign he may have wanted to see Nest succeed on its own like all those other top Alphabet executives who left in 2016.)</p><p>For Nest employees, it's a happy ending, even if it's one that doesn't answer the question of whether their project's life as an Other Bet was a success or a failure. For the other Other Bets, and for Alphabet's overall vision, the lesson of Nest is less reassuring: There is no cohesive strategy. Many of you will fail. And the definition of success is constantly shifting.</p><p class="tagline">Get the latest Google stock price<a href="http://markets.businessinsider.com/stock/GOOG-Quote"> here.</a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/shoe-attachments-inline-skates-skis-snowfeet-snowboarding-2018-2">These clip-on attachments for shoes combine inline skates with skis</a></h3>        <div>                    </div>    </div>

It's time to start asking if Alphabet's big gamble on 'Other Bets' is about to go bust

<p></p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>LONDON - In October, Mikko Hypponen - the chief research officer at security firm F-Secure - gave me a stark warning: "The [internet of things] revolution is gonna happen whether you're part of it or not."<p>In the coming years, chips and digital components are going to creep into everyday objects and appliances. It promises to transform how we interact with our possessions - but also poses huge security risks, could drastically undermine privacy, and even poses a threat to the very concept of ownership.</p><p>And now it's happening.</p><h2>Manufacturers are going to put chips in absolutely everything</h2><p>At the CES technology conference in Las Vegas on Wednesday, LG announced that from now on, all its premium appliances will come with Wi-Fi&#xa0;built into them, letting them communicate with each other and your smartphone, all "connected to the cloud."</p><p>People have been promising that <a href="http://uk.businessinsider.com/the-complete-history-of-internet-fridges-and-connected-refrigerators-2016-1">internet-connected fridges are right around the corner</a> for years. But as virtual assistants come baked into ever-more objects, from TVs to cars, it sounds like the internet of things (IoT) is starting to arrive.</p><p>This is, Mikko Hypponen told me, inevitable. And unavoidable.</p><p></p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>"In five years time you go and buy a toaster, it - regardless of the toaster you buy, even if there's no IoT features - it's still gonna be an IoT toaster. It's still gonna call home to the manufacturer. And the reason this is gonna happen is it's gonna be so goddamn cheap to put in one chip to have it call home, that they're all going to do it, even if the benefits are very small.<br><br>"And the benefits will be analytics like 'ok, how many toasters do we have in use, how quickly do people take them into use when they buy them, how much do they toast, what kind of bread do they toast, how often do our toasters catch fire, where in London do we have our customers, do we have more on the East or West or South side? We have less customers on the South side, lets advertise more on the South side.' Things like that."<p>In other words, you won't even know that you're buying internet-connected products - so you won't be able to avoid it.</p><p>If you're being optimistic, there is plenty to be excited about. A fridge that texts you when you're out of milk! A thermostat that turns on when you're nearly home! Updates that speed up cycles pushed straight to your washing machine!</p><p>But there's also an awful lot of downsides.</p><h2>The IoT invites marketers into the most private aspects of your life</h2><p>Lets start with Hypponen's example, because it illustrates one likely casualty of the IoT revolution: Privacy.</p><p>As chips are quietly added to your possessions, more and more of your private life (<a href="http://motherboard.vice.com/read/dildo-data-hacking">even your intimate life!</a>) will be quantified and scrutinised by marketers and algorithms. You'll be inviting them right into your home to scrutinise every aspect of how you live so as to better sell you products.</p><p>We saw another side to this in December 2016, in a court case <a href="http://uk.businessinsider.com/amazon-refuses-to-give-police-echo-voice-data-in-murder-case-2016-12">where Amazon was asked by the police to hand over records from its voice-controlled Alexa virtual assistant</a> to aid a murder investigation. (It declined.)</p><p>If you bring the internet of things into your home, it can be made to testify against you.</p><h2>The web is under attack from internet-connected toasters</h2><p></p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>More serious is the question of security. Right now, the internet of things is a security nightmare. Many manufacturers are paying little heed to security concerns, meaning that their devices can easily be broken into and weaponised by hackers - transforming them into gigantic botnets to attack companies, websites, and services.<p>In October 2016, someone used an IoT botnet built out of security cameras, smart TVs, and similar, to launch a massive attack on an internet service provider, Dyn - <a href="http://uk.businessinsider.com/dyn-hack-calls-grow-regulation-internet-of-things-security-mikko-hypponen-f-secure-interview-2016-10">knocking sites including PayPal, Twitter, and Spotify offline for many Americans</a>.</p><p>As the IoT continues to grow, the problem may only get worse.</p><p>"The core of the problem is that when you go and buy an appliance, security isn't a selling point," Mikko Hypponen told me. "You go and buy a toaster or washing machine ... clearly price is number one. Number two: colour. Security doesn't even enter the discussion, which means the vendor making these things will invest the minimum amount of money possible into security."</p><h2>You own your appliances? That's so passé</h2><p>The internet of things also raises more nebulous questions about the very concept of ownership. Restrictive user agreements may try and stop you from tinkering with appliances you've already bought and paid for. And if your dishwasher is reliant on cloud support from the manufacturer to even turn on, do you really "own" it?</p><p></p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Back in early 2016, Nest, a smart-home brand owned by Google's parent company Alphabet, announced it was discontinuing support for Revolv - a smart-home hub built by a company it had acquired in October 2014. This didn't just mean that the devices would no longer receive software updates - <a href="http://uk.businessinsider.com/googles-nest-closing-smart-home-company-revolv-bricking-devices-2016-4">it meant they would stop working completely</a>. They were being bricked.<p>The move provoked fury, and concern, from customers and observers.</p><p>"When software and hardware are intertwined, does a warranty mean you stop supporting the hardware or does it mean that the manufacturer can intentionally disable it without consequence?" <a href="https://arlogilbert.com/the-time-that-tony-fadell-sold-me-a-container-of-hummus-cb0941c762c1#.bu5dpjpxi">Revolv customer Arlo Gilbert wrote</a>. "[then-Nest CEO] Tony Fadell seems to believe the latter. Tony believes he has the right to reach into your home and pull the plug on your Nest products."</p><p>He added: "Which hardware will Google choose to intentionally brick next? If they stop supporting Android will they decide that the day after warranty expires that your phone will go dark? Is your Nexus device safe? What about your Nest fire alarm? What about your Dropcam? What about your Chromecast device?"</p><p>There's a famous phrase in the tech industry: "There is no cloud, just other people's computers." So when your appliances rely on the cloud to run, you're reliant on other companies' continued goodwill. And do you really want your washing machine to seize up after two years because the manufacturer stops supporting it?</p><h2>Buckle up kiddos, this could get ugly</h2><p>"The benefits don't have to be very big for this to happen," Mikko Hypponen said. "So the IoT revolution is gonna happen whether you're part of it or not."</p><p>None of this is intended to criticise&#xa0;one specific company - Nest, LG, or anyone else. But before you invite the internet of things into your home, think long and hard about whether you're happy with the potential consequences. And even then, realise that in the years ahead, you might not have a choice.</p><p class="tagline"></p><div id="categorypromo"><p></p><h2><span>Read more:</span></h2><ul><li><a href="http://www.businessinsider.com/top-internet-of-things-companies-to-watch-invest-2016-8">Top IoT Companies to Watch &amp; Invest In</a></li><li><a href="http://www.businessinsider.com/internet-of-things-conferences-2016-8">Best IoT Conferences &amp; Expos</a></li><li><a href="http://www.businessinsider.com/wearable-technology-iot-devices-2016-8">IoT Wearable Devices &amp; Technology</a></li><li><a href="http://www.businessinsider.com/internet-of-things-security-privacy-2016-8">How the IoT Will Affect Security &amp; Privacy</a></li><li><a href="http://read.bi/iotultimate">Ultimate IoT Research Bundle</a></li></ul></div><div></div><div></div>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/laundry-folding-robot-foldimate-video-2016-12">This machine solves the most time-consuming things about doing laundry</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="J1eXMwNDE6xEXrR7AqHv3GmDTNcBqpqx" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div></br></br>

The 'internet of things' is going to invade your home, whether you want it to or not

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<p><span style="color: #000000; text-decoration: none; font-size: 16px; font-family: Georgia, Times New Roman, serif;"><em>This post is part of the "<a href="http://www.businessinsider.com/category/big-ideas" target="_blank">Small Business, Big Ideas</a>" series, in which business leaders, entrepreneurs, and innovators share their stories of overcoming obstacles and achieving success. "<keyword id="1739122" type="UNKNOWN" weightage="60" keywordseo="Small-Business-Big-Ideas">Small Business, Big Ideas</keyword>" is sponsored by Chase. </em></span><strong style="line-height: 1.5em;"><span style="color: #000000; text-decoration: none; font-size: 16px; font-family: Georgia, Times New Roman, serif;"><em><a href="http://www.businessinsider.com/category/big-ideas">See more posts in the series »</a></em></span></strong></p>
</div><p><div class="image-container float_right" style="width:480px"><div class="image"><p class="source">Justin Massa</p></div></div>As the business world increasingly relies on big data to influence everything from major strategic moves to <a href="http://www.businessinsider.com/big-data-in-the-workplace-2013-5">revamping hiring practices</a>, the food industry, one of the country's <a href="http://www.nielsen.com/us/en/newswire/2013/what_s-cooking-in-the-u-s--restaurant-industry--competition.html">biggest and most vital employers</a>, is way behind the curve. </p>
<p><span style="line-height: 1.5em;">Cue one enterprising duo that saw an opportunity in that gap. With massive amounts of menu data becoming available online, Justin Massa and his co-founder Eric Cooper started Chicago-based software service </span><a href="http://getfoodgenius.com/">FoodGenius</a><span style="line-height: 1.5em;"> three years ago to bring big data to the food industry.</span></p>
<p>Massa, 34, isn't a serial entrepreneur. This company is actually his first experience in the startup universe.</p>
<p>"I came from the non-profit world," Massa says. "My co-founder was laying carpet <span>before we started full time."</span></p>
<p>FoodGenius sells a <span style="background-color: #ffffff;">dashboard that r</span>uns analytics on a massive set of data, mostly from newly merged online food-ordering giant GrubHub Seamless and menu aggregator Allmenus, on what 330,000 restaurants around the U.S. are serving. The service allows customers to see data on nationwide trends and details as narrow as a particular protein served in mid-priced Italian restaurants by state.</p>
<p>In a few short years, it's secured big customers such as mac-and-cheese seller Kraft Foods and supermarket chain Safeway. The company was a <a href="http://exceleratelabs.com/portfolio/food-genius/">graduate of Excelerate Labs</a> (now TechStars Chicago) and design consultancy <a href="http://www.inc.com/maeghan-ouimet/ideo-launches-start-up-in-residence-program.html">IDEO's first "startup in residence"</a> before securing its own offices last year, when it raised $1.2 million from investors including Hyde Park Ventures and Hyde Park Angels.</p>
<p><span style="line-height: 1.5em;">We talked to Massa about his experience going from a non-profit to the startup world, whether accelerators are a good idea, and why he loves building a company in Chicago.</span></p>
<p>Our conversation has been condensed and edited for clarity.</p>
<p><strong>Business Insider: Where did the idea for the company come from?</strong></p>
<p><strong>Justin Massa:</strong> It started in a somewhat different place than what we do today. The original idea was for a consumer-facing application, something you'd put on your phone that would help you find dishes at different restaurants. We first came up with this idea in summer of 2010, and we looked at services like Amazon, Netflix, and iTunes. All of them suggested the most granular thing. You went to something like Yelp, and it recommended a place, not an item; same for OpenTable or Metromix or Urbanspoon.</p>
<p>For me, it was like Amazon recommending an author but not a book, or iTunes an artist but not a song. It just totally didn't make sense to me.</p>
<p>I started working on that problem fairly quickly, but realized that there wasn't much of a business solving that problem. Delivering insight to a consumer about what they should eat in the next 20 minutes — there's not a lot of ways to monetize that. The data we were going to process in order to make that suggestion was really interesting for the food industry. Talking to people in the food industry and realizing they were fascinated by data was what led us to what we do today.</p>
<p><strong>BI: You don't come from a startup background, so what led you to start your own business?</strong></p>
<p><strong>JM:</strong> At first I started my own non-profit, then I worked at a place called the Metro Chicago Information Center. A theme of my work from about 2006 onwards was taking really messy, unstructured public data and deriving value. I didn't call it this at the time, but I was really 'productizing' unstructured data.</p>
<p>Right before I started FoodGenius, when I was at the MCIC, we would work with people like the MacArthur Foundation, the United Way, Chicago Community Trust, to take really messy government, public, and social data and help them understand what was happening in a neighborhood when they funded interventions. With MacArthur we delivered this crazy data product that tracked 99 block-by-block indicators of community change — everything from how many potholes were reported to how many arts activities there were to how many times they closed the block for a block party.</p>
<p><strong>BI: FoodGenius went through a startup accelerator. Would you recommend that path to others?</strong></p>
<p><strong>JM:</strong> I would make a qualified ringing endorsement of accelerators. The one that we went through, which was then called Excelerate, is now called TechStars. It was a really great experience. Without the money and the support it gave us, we never would have been able to start the business.</p>
<p>That said, my qualification of going into an accelerator program is that you really have to vet it. Y Combinator is awesome; 500 Startups is awesome; TechStars is awesome. <span>There's this glut of accelerators out there. Some are great and hopefully will help your business. Some are really great ways to waste three months of your time. </span></p>
<p><strong>BI: What are some warning signs you should stay away?</strong></p>
<p><span>If it's brand new, I would be cautious. </span>If the companies that have come out of it aren't still in business, I would be really scared. If the network of mentors and advisors the accelerator puts together aren't the kind of people you need, I wouldn't apply at all.</p>
<p><strong>BI: Why doesn't the food industry have good data and analytics already?</strong></p>
<p><strong>JM:</strong> The food world has really been split down the middle. You've got grocery [on the one side], and restaurants or food service on the other. On the grocery side of the world, they've had data for a long time. Companies like Nielsen and IRI, although they don't describe themselves this way, were some of the first 'big data' companies. They were taking large sets of data that were really messy across lots of different areas and stores, normalizing them, and providing insights about the industry.</p>
<p>On the restaurant side of the world, I think there's never been a robust data industry largely because the data just didn't exist. The fact is, there are still large chunks of restaurants that don't have electronic points of sale, loyalty cards, or bar codes. There's no uniformity of product.</p>
<p>The raw materials which with you could build a data industry were just not there. If we tried to do this 10 years ago, the tech costs would have made it unfeasible. If we tried to do this five years ago, the tech costs would have come down, but the actual data wasn't there at a reasonable scale. Ours is a business that only really makes sense in the last three years. It's largely because Amazon Web Services has just depressed the amount of cash you need to have the technology to start a business like this. </p>
<p><span style="font-size: 15px; line-height: 1.5em;">Now you have things like GrubHub Seamless and Allmenus — tons of menu data on the web that's accessible. You don't have to spend a ton of money or time having to get the restaurant to send you a fax and then typing it in.</span></p>
<p><strong>BI: How do you convince giant chains to trust a tiny company?</strong></p>
<p><strong>JM:</strong> That's a constant concern. There's one thing we learned at Accelerate that I really took to heart, we really apply it to everything. When you're starting your company, especially when you're venture-backed — I think it was Brad Feld who started Techstars who first said this — people invest in lines not points.</p>
<p>What he's saying is you can't come in once and expect someone to write you a check. You need to meet a series of times, tell them what you're going to do, and go out and do it. Then you come back and say, 'Hey, everything I told you I was going to do, I did it. And here's what I'm about to do next.' </p>
<p>The product we're selling is really new. And much in the same way that we raised investment capital, we take that approach of lines not points with prospective customers.</p>
<p>With the large customers, we meet them four to five times over a series of months. We update them on the specifics of the product and more broadly about the trajectory of the business. Eventually they hit that threshold where they say, "I've encountered these people three or four times. I'm starting to see them in magazines. The product gets more exciting every time I see it, so this is something I want to buy."</p>
<p><strong>BI: How is it running a company in Chicago? Is finding talent a problem?<br /></strong></p>
<p><strong>JM: </strong>I love Chicago, and I love running a business here. It's a very livable city; it's easy to get around, and the cost of living is nothing compared to San Francisco or New York. The startup community is growing, but it's not so large that you can't really meet lots of people quickly. Once you're in, it's kind of two steps to almost anyone. There are a lot of Fortune 500 companies in the area who are potential large customers, and they've been very active in the startup world.</p>
<p><strong></strong><span style="line-height: 1.5em;">You highlighted the downside, which is talent; there's less of it. But when I talk to friends in the Valley, there are a lot more people, but there's a lot more competition to get those people's attention. And you're going to pay a 20% premium over what we pay in Chicago. Same thing in New York, though at a 15% premium instead. Yes the talent's a little harder to find, but it's hard everywhere.</span></p>
<p><strong style="line-height: 1.5em;">BI: What's different about Chicago startups? </strong><span style="background-color: #ffff00;"></span></p>
<p><strong>JM:</strong> There's a shared identity of startups in Chicago. There are jokes about it, but Chicago has a very practical approach to building a business, and venture investors are very practical when investing here.</p>
<p>I really like the fact, and this is our own personalities too, that Chicago's idea isn't just to build this giant monster of a thing and then commercialize it, but to build and commercialize as you go. That seems like the way you should build a business. Not everybody likes that, but it's part of Chicago's identity.</p>
<p><strong style="line-height: 1.5em;">BI: What's been your biggest challenge so far?</strong></p>
<p><strong>JM:</strong> <span style="line-height: 1.5em;">One of our big challenges is that the food industry is very insular. It's not uncommon for us to go out and meet with a potential investor or partner, and things that are obvious dynamics of the food industry to us are complete unknowns to them.</span></p>
<p>I distinctly remember in the early days of the business we were meeting with an investor; the meeting ended and they were smiling, excited and engaged. They said, "We think this is a really exciting business, but to be perfectly honest, I don't know what to do because I don't know anything about the food industry."</p>
<p>Especially on the restaurant side of the world, there are very few B2B enterprise software companies that just focus on serving the food industry, and as a result you have a lot more education to do.</p>
<p><strong>BI: What's your long-term goal for the company?</strong></p>
<p><strong>JM:</strong> There are a lot of services that look at the grocery world, a lot that look at the restaurant world. There's nothing that looks holistically at how America eats. We hear from our customers that the channels are blurry. Who competes with whom is increasingly nebulous. You now have grocery products and restaurant products that are directly competing against one another. We think that the industry should not look at its vertical, its corner of the world, but at how people really eat.</p>
<p>Some of it we can do today, some of it we have to figure out. But I think when I look to the future, the biggest idea I see is to be able to really understand what Americans are eating. And on top of that, being able to be predictive about what kinds of flavors, products, tastes, proteins and ingredients are going to be popular in the future.</p>

One Chicago Startup Is Finally Bringing Big Data To The $400 Billion Restaurant Business

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>REUTERS/Adrees Latif</span></p><p class="caption">U.S. Democratic presidential candidate Hillary Clinton (R) kisses her daughter Chelsea Clinton (L) as former U.S. President Bill Clinton is seen in the background during a campaign rally at Washington High School in Cedar Rapids, Iowa January 30, 2016.</p></div><p></p></div></div>January was a tough start to the year for the markets, but in some ways Monday marks the true start to 2016's main event: the US presidential election.</p><p>On Monday the Iowa caucuses will take place and the <a href="http://www.businessinsider.com/ann-selzer-des-moines-register-iowa-poll-trump-cruz-2016-1">final polls from of the Des Moines Register</a> show Donald Trump with a lead over Ted Cruz on the Republican side while Hillary Clinton holds a slim lead over Bernie Sanders on the Democratic side. </p><p>Friday will also see the release of the jobs report from the first month of 2016, which was certainly a forgettable one for the markets. </p><p>The S&amp;P 500 fell about 5%, the Dow Jones Industrial Average lost about 5.5%, and the Nasdaq lost nearly 7% to start the year. </p><p>And while rally in the final week of the year salvaged what was a historically bad first three weeks of the year, the market really remains all about one thing: <strong>oil.</strong> </p><p>As Bespoke Investment Group wrote on Friday, "Whether it's a cause or coincident, the trend has been as goes oil, so goes the market ... Up until the last couple of days, crude oil and equities have been moving in lock step with each other on an almost tick for tick basis."</p><p>This is the trend to watch. </p><h3>Top Stories</h3><ul><li><strong>We just finished the busiest week of earnings season.</strong> Last week, reports from <a href="http://www.businessinsider.com/apple-q1-earnings-2016-1">Apple</a>, <a href="http://www.businessinsider.com/amazon-earnings-q4-2015-2016-1">Amazon</a>, <a href="http://www.businessinsider.com/microsoft-earnings-q2-fy-2016-1">Microsoft</a>, and <a href="http://www.businessinsider.com/facebook-2015-q4-earnings-2016-1">Facebook</a> all crossed the tape, with disappointing results and bearish commentary on the global economy from Apple taking center stage. "We're seeing extreme conditions<span><span> unlike anything we have ever experienced before," Apple <a href="http://www.businessinsider.com/tim-cook-global-economic-commentary-2016-1">CEO Tim Cook said</a> on the company's earnings conference call following the results. Cook added: "Major markets, including Brazil, Russia, Japan, Canada, Southeast Asia, Australia, Turkey and the eurozone, have been impacted by slowing economic growth, falling commodity prices and weakening currencies ... Notwithstanding these record results, we began to see some signs of economic softness in Greater China earlier this month, most notably in Hong Kong. </span></span></li><li><span><span><strong>Companies are beating expectations.</strong> "With 40% of the companies in the S&amp;P 500 reporting actual results for Q4 to date, more companies are reporting actual EPS above estimates (72%) compared to the 5-year average, while fewer companies are reporting sales above estimates (50%) relative to the 5-year average," FactSet's John Butters wrote in a note to clients. "In aggregate, companies are reporting earnings that are 1.7% above the estimates. This percentage is below the 5-year average (+4.7%). The blended (combines actual results for companies that have reported and estimated results for companies yet to report) earnings decline for Q4 2015 is now -5.8%. At the sector level, the Energy and Materials sectors are reporting the largest year over-year decreases in earnings, while the Telecom Services sector is reporting the largest year-over-year increase in earnings."</span></span></li><li><strong>Negative rates have gone mainstream.</strong> On Friday, the Bank of Japan shocked markets by taking interest rates into negative territory. The BoJ announced that some reserves held at the bank by commercial institutions will be subject to a 0.1% charge, though the amount of cash actually subject to this charge is likely to be negligible for the near future. But as <a href="http://www.businessinsider.com/detusche-bank-on-boj-rate-cut-2016-1">Deutsche Bank's George Saravelos wrote</a> in a note to clients following the announcement: "The BoJ has not only demonstrated that there is no lower bound, but also signaled that negative rates are now mainstream policy [...] In sum, the BoJ provides the strongest signal to date that the previously assumed zero lower bound on rates is no longer valid. Markets should now be pricing that global rates across global fixed income can sustainably and substantially trade below zero in the current (and future) easing cycles."</li></ul><h3>Economic Calendar</h3><ul><li><span style="text-decoration: underline;">Personal Income and Outlays (Mon.):</span> Economists expect personal income rose 0.2% in December while spending increased 0.1%, both declines from November's 0.3% increase. "Core" PCE - the inflation reading preferred by the Federal Reserve which strips out the more volatile cost of food and gas - is expected to show a 1.4% increase over the prior year in December, below the Fed's 2% target. "Even as the core CPI and some alternative inflation measures from the Fed's regional banks have shown signs of accelerating in recent months, the core PCE deflator has risen 1.3 percent on a year-over-year basis in each of the first 11 months in 2015," notes Wells Fargo.</li><li><span style="text-decoration: underline;">Markit US manufacturing PMI (Mon.):</span> This measure of manufacturing activity in January is expected to come in at a reading of 52.7, indicating expansion in the sector which has been the focus of fears about the US economy entering recession.</li><li><span style="text-decoration: underline;">ISM manufacturing (Mon.):</span> Economists expect this measure of manufacturing activity to come in at 48.5, indicating continued contraction in the manufacturing sector. Typically, <a href="http://www.businessinsider.com/2-different-signals-from-ism-manufacturing-2016-1">ISM readings below 45</a> have been associated with a recession. "The early January survey measures all point to a modest improvement in the ISM," according to Capital Economics. "In particular, the regional survey evidence suggests a slight rebound in the ISM index to 49, from 48.2. The modest increase in the ISM new orders index in December is encouraging, and further supports our view that activity in the factory sector improved slightly in December."</li><li><span style="text-decoration: underline;">Construction spending (Mon.):</span> Construction spending is expected to rebound 0.6% in December after falling 0.4% the previous month.</li><li><span style="text-decoration: underline;">Auto sales (Tues.):</span> The pace of auto sales is expected to increase in January to an annualized rate of 17.34 million. Auto sales, which hit a post-recession high in 2015, are expected to continue to be a major bright spot in the economy in 2016. January, however, will likely be a little disappointing. "Blame it on the weather," writes Bank of America Merrill Lynch. "Vehicle sales likely dipped to a rate of 17.1 million in January, driven in part by the Northeast/Mid-Atlantic storm. An entire weekend of auto sales was lost in affected regions, suggesting a decline on the month. Looking ahead, consumers continue to benefit from low gasoline prices and robust hiring, suggesting we should see a pick-up in coming months."</li><li><span style="text-decoration: underline;">ADP private payrolls (Weds.):</span> The latest private payrolls data from research institute ADP is expected to show payrolls rose 190,000 in January, down from December's 257,000 job adds, which was the most of the year. </li><li><span style="text-decoration: underline;">Markit services PMI (Weds.):</span> The final reading on activity in the services sector - which accounts for the vast majority of GDP in the US - is expected to come in at 53.7, indicating expansion the sector. This would match the <a href="http://www.businessinsider.com/markit-services-pmi-january-26-2016-1">preliminary reading from January 26</a>, which was the lowest reading since December 2014.</li><li><span style="text-decoration: underline;">ISM non-manufacturing (Weds.):</span> The Institute for Supply Management's latest reading on activity in the services sector, like that from Markit Economics, is also expected to show continued expansion in the sector. January's reading is expected to come in at 55.2, slightly below December's 55.8 number. "While we expect to learn that the ISM non-manufacturing index declined modestly in January, fears that weakness in the factory sector will eventually lead to a collapse in the broader economy are misplaced," writes Capital Economics. </li><li><span style="text-decoration: underline;">Initial jobless claims (Thurs.):</span> The latest weekly report on initial jobless claims will likely show claims totaled 280,000 last year, still below the crucial 300,000 level and further indicating that the last few weeks' trend towards a higher claims number is not the sign of a turning point in the labor market. "The trend for claims has picked up marginally over the last two months, but we are not alarmed by this development," writes Bank of America Merrill Lynch. </li><li><span style="text-decoration: underline;">Factory orders (Thurs.):</span> Factory orders in December are expected to show a 2.8% decline from the prior month.</li><li><span style="text-decoration: underline;">Trade balance (Fri.):</span> The US trade balance for the month of December is expected to come in at a deficit of $43.2 billion, slightly wider than the $42.4 billion seen in November. </li><li><span style="text-decoration: underline;">January jobs report (Fri.):</span> Expectations are that nonfarm payrolls grew by 190,000 in January, about 100,000 less than the <a href="http://www.businessinsider.com/jobs-report-december-2015-2016-1">blockbuster report seen in December</a> but still indicating solid expansion in the US labor market. Credit Suisse, which expects nonfarm payroll gains to total 190,000 in January, wrote in a note to clients: "Given the weakness seen in other US data around year-end, financial markets will be particularly sensitive to any hint of a crack in the country's heretofore robust jobs market. While a January payrolls print below, say, +150,000, certainly would spook the markets, we would caution in that scenario against jumping to dire conclusions. We estimate that monthly job gains over roughly 100K are sufficient to keep eating into any residual slack in the labor market. <strong>At some point this year, as we edge closer to that nebulous state of 'full employment,' we'd expect these monthly payroll gains to start moderating toward +150,000 anyway."</strong> <br /><br />The unemployment rate is expected to remain steady at 5% and average weekly hours worked is also anticipated to remain at 34.5 hours. Average hourly earnings growth is expected to pick up over last month, rising 0.3%. Over the prior year, however, average hourly earnings are expected to rise 2.2%, down from December's 2.5% year-on-year increase, which was owed in part to a calendar quirk from 2014.</li><li><span style="text-decoration: underline;">Consumer credit (Fri.):</span> Consumer credit balances are expected to show an increase of $16 billion December, more than the $13.4 billion expansion seen the prior month. </li></ul><h3>Market Commentary</h3><p> There's no way around it: the next two weeks are huge for the economy. </p><p>Based on market pricing, the chances the Federal Reserve raises rates in March are looking remote. Currently the market thinks there's about a 35% chance the Fed raises its benchmark rate in six weeks, about half of what was priced in ahead of December's move. </p><p>Tom Porcelli and the team at RBC Capital Markets note that in addition to Friday's jobs report, Fed Chair Janet Yellen's testimony on February 10-11 on Capitol Hill is huge. </p><p><strong>"The first two weeks of February will either leave the possibility of a March hike firmly on the table, or fully extinguish the notion,"</strong> Procelli writes. "The latter is probably easily achieved if we get a dismal employment report in the week ahead, but barring that, we will likely have to wait until Yellen's semi-annual testimony on Feb 10-11 before we get some real clarity.<strong> There are some important points to consider when thinking about the likelihood that March is still in play: the worst could be over for manufacturing, economic fundamentals remain solid, and the Fed did not 'blink' in their Jan statement despite the recent turmoil in the markets." </strong></p><p>But in thinking about the Fed does next, it's worth really consider what this business cycle has been about: modest growth. "The Fed is not hiking to slow down the economy or fight high inflation," writes Bank of America Merrill Lynch's Michael Hanson.</p><p>"Rather, Fed officials plan to normalize policy as the economy normalizes. The labor market is already close to, if not at, full employment. This is the crux of the FOMC's rationale for beginning to remove accommodation: not only does it mean that the employment side of the Fed's dual mandate is largely satisfied, but tighter labor markets should eventually lead to inflation returning to target - if history and theory are any guide. <strong>Thus, any sign that the labor market was starting to cool significantly would almost certainly shift the Fed onto an extended hold."</strong></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/reasons-men-cheat-research-adultery-gary-neuman-2016-1">Research reveals why men cheat - and it's not what you think</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="9vdnlycjo8Di2vj5XaYNQCb3Cc2NYbee" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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