Startup Stash - The Rate Trap and The Rich Save 🚪

Apparently there’s a story behind high property prices, according to the DOJ, and it doesn’t have much to do with inflation or demand. The Department of Justice (DOJ) made headlines last week by filing a lawsuit against RealPage, a software startup for landlords and property managers. They allege that RealPage has been using an algorithm and a “landlord club” of sorts to suggest higher prices to corporate landlords, thus raising property prices. 

What’s the RealPage Software: The software collects private data from landlords, such as rent prices, lease expiration dates, and information on potential tenants. According to the DOJ, the software then recommends rent prices to landlords, influencing the rates they charge tenants. This lawsuit follows a 2022 ProPublica investigation that raised similar concerns, claiming that RealPage contributed to the inflationary rent hikes across the country.

Why It Matters: Over the past few years, rent prices have soared, with many cities seeing double-digit annual increases. And people are clearly distraught. 74% of Americans are worried about housing affordability, per a recent survey from the National Housing Conference and other organizations.

RealPage’s Defense: RealPage disputes the claims, pointing to external factors like inflation, high interest rates, and a housing supply shortage as the real drivers of rising rent prices. They argue that their software isn’t responsible for the current rental market surge.

Some Stats:  After a merger in 2017, RealPage now controls 80% of the market for rent-setting software. However, the company argues that only 7% of U.S. rentals use its products, and most of its pricing data comes from public sources.

The lawsuit alleges...

• Thousands of monthly phone calls by workers at RealPage to collect rental data;
• Company "pricing advisors" that encouraged landlords to follow the algorithm's recommendations;
• Sponsored cocktail hours, in which landlords met with each other;
• And even shared Google Drive documents for competitors to use to collect information.
• RealPage encourages landlords to hold rents steady, even when a market is softening and demand is falling.

The outcome of this lawsuit could significantly impact how rent prices are set in the future.

Safe Superintelligence (SSI), a startup co-founded by OpenAI's former chief scientist Ilya Sutskever, has raised $1 billion in a round of investment that values the company at $5 billion, according to a report from Reuters. The company has 10 employees.

That valuation is more than what iconic department store Macy’s ($4.2 billion) is worth. It’s more than triple what pizza giant Papa John’s International is worth.

Investors included top venture capital firms Andreessen Horowitz, Sequoia Capital, DST Global and SV Angel. NFDG, an investment partnership run by Nat Friedman and SSI's Chief Executive Daniel Gross, also participated.

The Backstory: Headed by Sutskever and Jan Leike, OpenAI’s Superallignment team was set up to solve a crucial problem: how to ensure superintelligent AI systems are aligned with human interests. In the ChatGPT era, Sutskever and Leike championed a safety-first approach that at times put them at odds with CEO Sam Altman.

Sutskever was among the OpenAI board members who attempted to force Altman out in 2023. When he announced his departure in May it seemed to confirm rumors of an internal rift, as did Leike’s resignation just 2 days later.

A month after Sutskever left OpenAI, SSI was founded on the premise that “building safe superintelligence is the most important technical problem of our time”.

Tuesday's presidential debate is a pivotal moment with less than two months to Election Day. In the lead-up to the debate, here’s what companies, especially small businesses, want to hear from Trump and Harris. 

Business Growth: Small business owners want concrete policies that will drive growth and encourage entrepreneurship. Harris has hinted at a new $50,000 tax credit to support startups—a move many entrepreneurs are eagerly awaiting.

Access to Capital: A major concern is affordable access to capital. Entrepreneurs are keen to know how both candidates will address easier access to loans and credit lines, crucial for business expansion.

Inflation: Business owners want to hear how the candidates plan to ease the burden of operating in a high-cost environment.

Labor Shortages: Workforce challenges persist. Entrepreneurs need insights into how Trump and Harris will address labor shortages through workforce development and upskilling.

➖Subminimum Wages - Some disabled workers make less than $1 an hour. A program that was meant to be a stepping stone to regular-wage work became a dead-end instead.

🍲 Eating Alone - Solo dining reservations in the US have risen by 29% over the last two years. 

🇱🇰 Lankan Votes - Sri Lanka will hold its first presidential vote this month since the economic collapse in 2022. 38 candidates are running for the position. Here's what's at stake. 

😰 That's a lot! - Open AI is considering a $2000 monthly subscription price for its new LLMs. 

🥷 The Internet is Tedious - “Malvertising,” or Malicious advertising, on search engines increased 42% month-over-month last fall, per CNBC.