Nomad Homes Announces $4M Seed Round
Nomad Homes, which is building a managed marketplace to allow users to not just search but also finance and complete the paperwork for residential real estate, announced Wednesday it has raised a $4 million seed round led by Comcast Ventures with participation from Abstract Ventures, Partech, Precursor Ventures, WndrCo, and Class 5 Global.
The company was started in Palo Alto by Helen Chen, a former Blackstone private equity investor who dropped out of the Stanford Graduate School of Business to start the company after she discovered how outdated property technology was in the Middle East and Europe. Nomad is now headquartered in Dubai but the engineering team is based in Los Angeles, led by Yury Velikanau, who was formerly the lead engineer at PeerStreet. The seed round will be used to grow Nomad's engineering team as well as grow its marketplace and services.
"L.A. has a deep pool of engineering talent across all verticals, but especially in fintech (e.g., PeerStreet, Open Listings now Opendoor, and Tala)," Chen wrote in an e-mail. "What really stood out to us is that many of the engineers we spoke to also have a passion for real estate, which aligns well with Nomad's mission."
Other co-founders include Chief Product Officer Dan Piehler, previously a senior product manager at Addepar, and Chief Operating Officer Damien Drap, an early employee at Uber who launched and lead Uber Eats across the Middle East.
"Helen and the team bring a unique blend of Silicon Valley DNA, real estate insights and on-the-ground operating experience," said Daniel Gulati, a Managing Director at Comcast Ventures. "We are excited to support Nomad's quest to deliver a superior experience for all market participants with a technology-first approach."
Nomad is focusing on Dubai and eventually other Middle Eastern and European cities because shopping for real estate is much more difficult without the MLS listings that Zillow and Redfin use to create a more user friendly experience in the United States.
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When Meg Whitman spoke to dot.LA in April, the Quibi CEO struck a tone of cool patience. "I'm very focused on 'where are we after a year?'," she said. Ultimately, Whitman never got that perspective. Quibi shut down less than seven months after its launch.
The high-flying, $1.75 billion mobile streaming service attracted investors from Hollywood studios to Goldman Sachs and is now grappling with how to return whatever capital it has left. Meanwhile, investors and those inside the company are asking how it all happened.
<p>"I think they gave up pretty quickly," said Anis Uzzaman, general partner and CEO of Pegasus Tech Ventures, which invested $35 million into Quibi. "And if it was this quick, they should have left more money on the table."</p><p>Analysts began picking apart the Hollywood-based mega startup long before its problems became apparent, as the company's <a href="https://www.theverge.com/2020/1/8/21056315/quibi-ces-2020-launch-meg-whitman-jeffrey-katzenberg-turnstyle-technology-shows-preview" rel="noopener noreferrer" target="_blank">self-assured messaging</a> and <a href="https://www.wsj.com/articles/streamer-quibi-raises-additional-funds-ahead-of-launch-11583267901" rel="noopener noreferrer" target="_blank">enormous fundraising</a> seemed to invite criticism.</p><p>Those criticisms included the company's miscalculation of its target demographic's preferences, its <a href="https://dot.la/ficto-raise-2646273511.html" target="_self">lack of social media functionality</a> and interactivity, and that it misaligned incentives with its A-list content creators, who had <a href="https://techcrunch.com/2020/06/23/what-went-wrong-with-quibi/" rel="noopener noreferrer" target="_blank">little reason</a> to provide the unproven app their best work. Then there was the pandemic, which – <a href="https://www.nytimes.com/2020/05/11/business/media/jeffrey-katzenberg-quibi-coronavirus.html?smid=tw-share" rel="noopener noreferrer" target="_blank">as founder and president Jeffrey Katzenberg emphasized </a>– limited the on-the-go moments in consumers' lives that Quibi was targeting. </p><p>We'll never know what Quibi could have been if not for the coronavirus. Through conversations with a former Quibi employee, a Quibi investor and an entertainment analyst, however, we've picked up some insights on what it could mean for entertainment startups, venture capital and the future of mobile content. </p><h2>Generational Disconnect
</h2><p>An ex-Quibi marketing employee, who spoke to dot.LA on condition of anonymity due to a non-disparagement agreement he signed, shed some light on how Quibi's issues looked from the inside. </p><p>One problem he saw was the disconnect between Quibi's leadership and its target demographic, which the company stated was broadly 18-44 year-olds, and more specifically 25-35 year-old millennials. </p><p>Although Katzenberg had an undeniably strong entertainment background, and Whitman brought leadership experience from atop the tech world, both were generations removed from their targeted audience. </p><p>"Especially from an age perspective, not understanding our target demographic's consumption habits and use of social media was absolutely something that hurt Quibi," the ex-employee said. "If we had leaders that were more in tune with general social media trends, habits, usage, they'd probably have a different perspective to the importance of having a platform that has a social media aspect to it." </p><h2>Lack of Startup Savvy
</h2><p>Pegasus Tech Ventures' Uzzaman told dot.LA that, in retrospect, it would have been helpful if both founders had had startup experience. Katzenberg had some, he noted, but Whitman came from the corporate world. Uzzaman had hoped their experiences would be complementary, but he now thinks Whitman's lack of startup experience harmed the company. </p><p>"When you're a startup founder, you need to be very patient and try different things. I would have expected more of that in this case," Uzzaman told dot.LA, noting that startup problems are different from those faced by a big-company CEO.</p><p>The ex-employee said inexperience among some of Quibi's leaders limited the company's flexibility and productivity.</p><p>"There's only so far being a great business person can take you in an industry where you need expertise in both entertainment and technology and having experience of running a fast-paced startup; it's completely different from running a company like eBay or HP," he said. </p><p>"A lot of times we'd need to reframe ideas and analyses in a way that someone [less experienced] would be able to understand as opposed to someone else well-versed in the concepts, who would have been more productive in working through some of these questions or issues."</p><p>One such issue: Quibi's Super Bowl ad and Oscar's campaign had little impact in raising brand awareness and familiarity with its product. The former marketing employee said the company was slow, even reluctant, to respond to those failures. </p><p>"There was an opportunity to take some of those learnings and change our messaging or strategy and we didn't. There was already a big investment made in putting together these ads and the thinking was, 'we spent all this money on these high-production ads, so we're going to use them'," he said, adding that as Quibi's launch approached, the decision to shift the marketing strategy away from focusing on the brand and toward the content "was made too late." </p><p>"General awareness was our number one metric," he said, noting that although the marketing team didn't reach its goal of 40-60% awareness among its target audience, the number wasn't terribly weak. But, "we had a steep dropoff between awareness and familiarity," he noted. </p><p>"Through the interview process, even I didn't fully understand what Quibi was, so I knew it would be an uphill battle," he said. "Familiarity was very low – below 10%," he added.</p><p>Management's slow response struck him as part of a larger pattern of poor decision-making. </p><p>"Egos were at play, with big, well-known people involved who've been fairly successful – it gets you into thinking that 'everything I'm gonna do or start or work on is gonna be great'," he said. "There's a lot to be learned from what Quibi did well and didn't do well." </p><h2>UGC vs Premium Content
</h2><p>For Laura Martin, a media analyst and managing director of investment banking and asset management firm Needham & Company, one big lesson is about the future of mobile content businesses. </p><p>"I think Snap is basically a successful Quibi," she said. </p><p>That is, companies that develop a user base through low-cost, user-generated content (UGC) give themselves a better and safer pathway to expanding into offering premium, paid content on mobile. Quibi tried to do the reverse, attempting to build a user base on top of its unproven premium content offering. </p><p>"Those (UGC) models are proving to be more resilient," Martin said, pointing to Instagram and TikTok in addition to Snap. "And I'm not sure the lesson is any different if Quibi had launched a year earlier."</p><p>Her takeaway: successful mobile content apps will have UGC as their basis of competition, not premium content. </p><h2>What Happens Now?
</h2><p>Uzzaman said he expects Quibi to refund investors in two installments. The first will be a percentage of the company's remaining cash. If it is $350 million, as has been <a href="https://www.wsj.com/articles/quibi-weighs-shutting-down-as-problems-mount-11603301946" rel="noopener noreferrer" target="_blank">reported</a>, that would suggest to Uzzaman that investors will be refunded 20% of what they invested – the same percentage that remains of the $1.75 billion Quibi raised. </p><p>The second installment should come once Quibi has sold its remaining assets: namely its content library, IP and technology. Uzzaman said the best-case scenario for the sale of content would likely be another $350 million, meaning that at best investors would earn a 60% haircut. </p><p>Looking forward, Uzzaman said Pegasus will be more cautious in evaluating investments. He believes the pandemic kept Quibi from being able to execute its business plan, so he will give greater weight to worst-case scenario analyses in the future. And he will place a higher priority on having founders who have run a startup in the past. </p><p>Uzzaman noted that the way Quibi grew — fundraising nearly two billion dollars before validating its concept in the market — is a relative rarity in the startup world. Its failure, he said, serves as a lesson that venture capital "should go back to the lean startup model, where you start small and grow gradually as you see market traction." </p><p>"It's the safest way to make sure that even if you have a failure" — which, he noted, is part and parcel of startups and VC — "it's not as big as this one." </p><p>---</p><p><em>Sam Blake primarily covers media and entertainment for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA</em><br/></p>
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- L.A.-based Output, a bootstrapped business founded in 2013 to help musicians overcome writer's block, announced its first ever fundraise, of $45 million from Summit Partners.
- The company serves a range of musicians from hobbyists to professionals, providing them a library of loops and samples that they can then manipulate into unique songs of their own.
- Immediate plans are to nearly double its staff and expand its product platform, with future goals of leading the evolution of digital music production.
Gregg Lehrman was no stranger to music composition. He had worked under world-famous composers such as Hans Zimmer writing music for film and TV and had produced big projects with BMG music publishing. But after setting out on his own, he found himself suffering from writer's block.
So, he said, "I made a piece of software for myself, as a music-maker — with no intention of starting a company."
<p>Lehrman's tool, however, ultimately became a music-tech company called <a href="https://output.com" rel="noopener noreferrer" target="_blank">Output</a>. Based in L.A.'s Chinatown district, its mission is to help people start making music. </p><p>Seven years after it was created, Output has agreed to its first ever fundraise: a $45 million minority-stake investment from Summit Partners. </p><p>"I think there will be drastic changes to come in music creation," Lehrman said, "and we want to be at the forefront of it." </p><p>His investors agree. </p><p>"We believe Output has the potential to reinvent the digital music production market," said Andrew Collins, managing partner at Summit and lead investor on the deal. Collins will now join Output's board. </p><p>"The holy grail in digital music-making is to make it super easy for musicians to find content that they like and then make it sound unique to them, and that's exactly what Output does," Collins told dot.LA. </p><p>The list of artists and projects that have used Output is impressive: Kanye West, Coldplay, Justin Bieber and Rihanna among them, as well as the soundtracks to "Game of Thrones," "Stranger Things" and "Black Panther."</p><p>The company broke $1 million in its first year with no advertising, Lehrman said: "just a viral video and a good product." That first product line – which included digital instruments and effects – was software geared toward professional musicians, who purchase it for an upfront fee.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDU2MjYxMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODA2MTk1Nn0.ez695VAfdiWMBPUFHory8cfkG7UKwuP6H6xwxjJh9eI/image.jpg?width=980" id="ca6d9" class="rm-shortcode" data-rm-shortcode-id="40f7ba1d62064604d613adb535781d6a" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Courtesy of Output</small></p><p>In 2018, the company added a software-as-a-service (SaaS) product, called Arcade, which became particularly popular among musical hobbyists and digital-music newcomers. For a $10 monthly subscription, users receive access to thousands of loops and samples created by Output, which they can then manipulate and turn into their own unique tracks.<br></p><p>Most customers today use Arcade in conjunction with a digital audio workspace like Logic, Ableton or ProTools. Songwriters, whether professional or amateur, can set their rhythm and key, pull from Output's library of sonic building blocks and mold them like musical clay. Users can also upload and work with their own digital audio files. </p><p>Over time, Output has seen both its user base and its revenue streams shift away from the pros – which Lehrman said is a customer base with a natural limit – and toward hobbyists and digital-production newcomers.</p><p>Arcade, its SaaS product, has seen a 300% increase in monthly recurring revenue over the past 12 months. In just two years, it's grown to generate about 60% of Output's income. </p><p>"In the world of SaaS, it is incredibly rare to see both exceptional growth and capital efficiency. You often see exceptional growth with a high burn. It's very rare to see over-100% growth rates and also generating cash flow," Collins said. "You don't see SaaS software growing this fast, profitably, fully bootstrapped. There's not a lot of those out there."</p><p class="shortcode-media shortcode-media-youtube">
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="0058d901c4b625d279b384a338e60ce0"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/gSpDqkikaKg?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
<small class="image-media media-caption" placeholder="Add Photo Caption...">ARCADE by Output - Walkthrough</small>
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
<a href="https://www.youtube.com/watch?v=gSpDqkikaKg" target="_blank">www.youtube.com</a>
</small>
</p><p>As the popularity of Arcade has grown, Output's user base has shifted to about one-third professional musicians, one-fourth digital-music newcomers, and the rest hobbyists who are "really into making [digital] music."<br></p><p>Collins also likes the market tailwinds that Output is riding — namely, the democratization of music ideation and distribution. Output enables musicians to create new sounds, while platforms like Spotify and Soundcloud allow anyone to publish their tunes with just a few clicks. </p><p>The company's technology stack is a combination of digital signal processing (DSP) algorithms written in C++ and some machine learning. "We're going to see that continue to expand," Lehrman said. </p><p>Output also has a line of furniture and hardware products designed to help music-makers build out their home studios. It is currently working with <a href="https://barefootsound.com" rel="noopener noreferrer" target="_blank">Barefoot Sound</a> – which Lehrman called "the Rolls Royce of speakers" – to manufacture a new speaker line. </p><p>With its new cash, Output plans to grow its staff, which currently numbers about 60. "We'll grow to north of 100," Lehrman said. </p><p>It will also build out its product offering, adding new tools to Arcade like digital instruments and expanding its mobile capabilities.</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDU2MjYxNS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY2MTE4MTU2M30.YEw7CRFzIHjvdiSpcHkt28nGzaS6n7SmmYL9Pig51lQ/image.jpg?width=1245&coordinates=292%2C724%2C1%2C40&height=700" id="8f293" class="rm-shortcode" data-rm-shortcode-id="2fd561899f2712747047ae0395de0b36" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">Output founder Gregg Lehrman has worked under world-famous composers such as Hans Zimmer writing music for film and TV.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Courtesy of Output</small></p><p>"We feel strongly we can build a unified ecosystem that once you're in, you're familiar with everything," Lehrman said. "You don't have to learn 100 different applications; it can do 100 different things but you won't feel lost."<br></p><p>Collins pointed to several competitors, including <a href="https://splice.com" rel="noopener noreferrer" target="_blank">Splice</a>, <a href="https://www.landr.com" rel="noopener noreferrer" target="_blank">LANDR</a>, <a href="https://www.izotope.com" rel="noopener noreferrer" target="_blank">iZotope</a> and <a href="https://www.native-instruments.com/en/" rel="noopener noreferrer" target="_blank">Native Instruments</a>, but noted that "nobody else has integrated a very robust curated library of content – sounds, loops, well-organized beats – that musicians can pull from and pull into a workflow engine (the software) and manipulate those sounds to create something that is completely unique." </p><p>Lehrman and Collins separately emphasized the Output team's passion for music. 50 of the 60 employees today make music on a daily basis, Lehrman said. </p><p><a href="https://www.summitpartners.com" rel="noopener noreferrer" target="_blank">Summit</a> primarily focuses on founder-led bootstrapped companies, which it provides with on-demand services like marketing and engineering. </p><p>"Management sets the agenda," Collins said. </p><p>For Lehrman, that'll be to further leverage technology: not to create music itself, but to help people create, just like it helped him overcome his own writer's block those years ago.</p><ul class="ee-ul"></ul><p>"From the first product to the last product," he said, "it's been about helping people be creative."</p>
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After $300-million and 11 years, the nation's largest county rolled out the first publicly-owned voting system earlier this year, promising "transparency, accessibility, usability, and security."
Los Angeles County's new voting system — dubbed "Voting Solutions for All People," or VSAP — has raised concerns from election security experts. Dozens of advocacy groups have warned California's top election official that the electronic touchscreen system used for in-person voting relies on QR codes to tabulate votes. QR codes are vulnerable to hackers and system malfunctions and cannot be easily verified by most voters, U.S. government and outside experts have found.
<p>
A coalition of 36 election-security experts and advocacy groups wrote in a letter last month to Secretary of State Alex Padilla that they were "gravely concerned that [L.A. County's recently certified system] uses QR codes for tabulation" and urged him to stop relying on QR codes to tally votes at least by the 2022 primary election.
</p>
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDU1Njc3Ni9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwNjI5OTU2OX0.lXrYPejjWJv81UmP4za07KUu1TalBNgPxlvQvd1bNvs/image.jpg?width=980" id="3e659" class="rm-shortcode" data-rm-shortcode-id="2d92e88081ac4999bbee104c08464b38" data-rm-shortcode-name="rebelmouse-image" />
After voters make their ballot selections on their screens, the machine spits out a printed-out ballot-like receipt to review, along with a QR code.
<p>"Although voters can easily verify the selections that the [voting system] prints on their ballot in their own language, they cannot easily verify the QR codes that [it] will actually use to tally votes," the letter said.</p><p>After voters make their ballot selections on their screens, the machine spits out a printed-out ballot-like receipt to review, along with a QR code. Officials have said this gives voters an easy way to verify their selections. But what a voter sees in plain text on the receipt, is not what the tallying machine counts. The county's new system scans the QR code to unpack and count what a voter has selected. If the system is hacked or wrongly records a voter's selections while electronically encoding it into the QR, there's no quick and easy way to tell.</p>
<p>
Election administrators expect record turnout for the November 3 presidential election, which has already seen high levels of mail-in ballot participation. Intelligence officials <a href="https://www.nytimes.com/2020/02/20/us/politics/russian-interference-trump-democrats.html" target="_blank">warned lawmakers earlier this year</a> that Russia is again trying to meddle in the U.S. election process, as it did in 2016. On Thursday, U.S. officials announced that Russian hackers targeted dozens of state, local and tribal networks, successfully stealing data from at least two unnamed victim servers; as a result, "there may be some risk to elections information housed on" those government networks. But there is no evidence that the integrity of elections data has been compromised, the <a href="https://us-cert.cisa.gov/sites/default/files/Joint_CISA_FBI_CSA-AA20-296A__Russian_State_Sponsored_APT_Actor_Compromise_US_Government_Targets.pdf" target="_blank">government alert said</a>.</p><p>
L.A. County's new voting system, manufactured by Smartmatic Corp., a voting technology company <a href="https://www.smartmatic.com/us/media/article/smartmatic-announces-cease-of-operations-in-venezuela/" target="_blank">that has been scrutinized for ties</a> to the Venezuelan government, was first used for the presidential primary in March. The voting process was mired with technical problems that led to lengthy wait times and multiple after-incident reviews. L.A. County has since said the issues with its roughly 30,000 voting-machine system have been addressed and the new system was officially certified, <a href="https://votingsystems.cdn.sos.ca.gov/vendors/LAC/vsap2-1/vsap21-cert.pdf" target="_blank">as long as county officials abide by certain security conditions</a>, by Secretary of State Alex Padilla <a href="https://votingsystems.cdn.sos.ca.gov/vendors/LAC/vsap2-2/vsap2-2-approval.pdf" target="_blank">earlier this month</a>.
</p><p>
But even for those who understand how to scan a QR code, trying to verify the accuracy of their vote can be confusing and time-consuming.
</p><p>
Here's an example of what shows up when you scan your QR code, according to a document buried on the Los Angeles County Registrar-Recorder/County Clerk's website:
</p><p style="margin-left: 20px;">
VER:A.SEL:4N/4E/H/J/3C/3K/35/4S/45/3Z/4A/X/3Q/3S/3U/3W/3Y/N/Y. BMD:0000046.SIG:4R57D5C44QKEJRS3OBF33PL0Z6U9THBR74NTA1VVH K09E6NFDH4DWXPY8Q9ZF6VD0LAQ1E6IY6AGQC1S4TG095N8NEN3AFOET12."
</p><p>
The first line represents the selections a voter made, with each letter and number combination corresponding to a particular candidate or measure. For example, a vote for the Joe Biden ticket is coded as 3G8 while Donald Trump is 3G9. It is up to voters to decode and match each of alphanumeric values to the actual plain-language choices they made on their ballots.
</p><p>
Michael Sanchez, a spokesman for the registrar's office, said that voters can go online to find a document for decoding their ballot. Sanchez later <a href="https://lavote.net/ballot-marking-device-code-list" rel="noopener noreferrer" target="_blank">supplied the crucial direct link via email</a>, which is otherwise difficult to find online.
</p><p>
For voters who are older, disabled, simply not tech-savvy, or just unwilling to take the time, verifying your ballot selections in L.A. County is an incredibly "burdensome process," said Susan Greenhalgh, senior advisor on election security for <a href="https://freespeechforpeople.org/" rel="noopener noreferrer" target="_blank">Free Speech For People</a>, a nonpartisan public interest group. "The person can't look at it and know what it says, they have to jump through all these hoops."
</p><p>
Kim Alexander, president of the nonprofit, nonpartisan California Voter Foundation noted that the difficulty with verifying the older punch-card ballot system is why post-election audits were done in the first place.
</p><p>
"We were using these ballots where people couldn't verify their choices," Alexander said. "Now we've come full circle. We have these QR codes that some tiny population of L.A. County has the wherewithal and ability and smarts to decode and verify (their) ballot. Even if you're able to do that, you're not done decoding the code. You have to then do another round of decoding."
</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<a href="https://images.unsplash.com/photo-1595079676601-f1adf5be5dee?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=400&fit=max&ixid=eyJhcHBfaWQiOjEzMzIxMn0" target="_blank"><img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDU1Njc5NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwODM2MDA5NH0.g9S4HzUAVR171vfdvJtqaYrUqW9JXIHHmiPgD2CYTCc/image.jpg?width=1245&coordinates=0%2C208%2C0%2C208&height=700" id="e965d" class="rm-shortcode" data-rm-shortcode-id="e600f2a3eb17f61da6195ebcb942fa6d" data-rm-shortcode-name="rebelmouse-image" /></a>
<small class="image-media media-caption" placeholder="Add Photo Caption...">In the world of election security, the use of barcodes and QR codes is generally viewed as problematic by experts</small>
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
Photo by <a href="https://unsplash.com/@markuswinkler?utm_source=RebelMouse&utm_medium=referral">Markus Winkler</a> on <a href="https://unsplash.com/?utm_source=RebelMouse&utm_medium=referral">Unsplash</a>
</small>
</p><h2>QR Codes Stir Debate
</h2><p>
The QR code has made a bit of a comeback to daily life during the pandemic, <a href="https://dot.la/contactless-menu-qr-code-2647429102.html" target="_self">especially in place of restaurant menus</a>.
</p><p>
But in the world of election security, the use of barcodes and QR codes is generally viewed as problematic by experts who say it inserts a machine — and its own code that's indecipherable to humans — between a voter and their vote. Because the QR code on the ballot cannot be easily verified for its accuracy, computer scientists say it makes them an easier target for hackers.
</p><p>
The county's <a href="https://youtu.be/CGLE0fkBc4c" rel="noopener noreferrer" target="_blank">YouTube video</a> illustrating how to use the new voting machines skips over any explanation of how to check the QR code for accuracy. Instead, the county shows a voter quickly scanning their finger over the lines of plain text reflecting their votes. In reality, the QR code, not the text, is what is actually counted.
</p><p>
"It's really ugly, it is not usable at all," said Eddie Perez, an election administration and technology expert with the nonpartisan, nonprofit <a href="https://www.osetfoundation.org/" rel="noopener noreferrer" target="_blank">OSET Institute</a>, about L.A.'s system. "If you're placing a very high value on accessibility and the idea that every single voter, regardless of their condition or disability, should be able to verify their ballot — if you really believe that, and are going to put $282 million behind those goals, then it's fair to ask: 'Is the process you're leaning on to check your QR code accessible?' I literally don't know [what happens] if someone is blind."
</p><p>
Sanchez, the registrar's office spokesman, said the county's ballot-marking device lets voters who are blind listen to a read-back of their on-screen selections. But that doesn't account for the encoded QR.
</p><p>
QR codes, which are a type of barcode, also have the potential to become legally thorny ground.
</p><p>
"There's an inherent problem with the use of barcodes or QR codes in voting systems because the ballot contains two records of voter intent, and one needs to be established as the legal record of voter intent," Greenhalgh said. "If the human-readable text is the legal vote of record, that means that something other than the legal vote of record is counted. If the QR code is the legal voter of record, that dissolves any pretense (that) this is a voter-verifiable ballot."
</p><p class="shortcode-media shortcode-media-youtube">
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="874c1a7637386691f5dcaf4c555afd50"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/CGLE0fkBc4c?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
<small class="image-media media-caption" placeholder="Add Photo Caption...">How to vote on the NEW Ballot Marking Device</small>
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
<a href="https://www.youtube.com/watch?v=CGLE0fkBc4c&feature=youtu.be" target="_blank">www.youtube.com</a>
</small>
</p><h2>National Debate Leads to First Ban
</h2><p>
Such barcode-based devices also "raise security and verifiability concerns," according to <a href="https://www.nap.edu/catalog/25120/securing-the-vote-protecting-american-democracy" rel="noopener noreferrer" target="_blank">an election-security report released by the National Academies of Sciences, Engineering, and Medicine</a> last year. And the <a href="https://collaborate.nist.gov/voting/pub/Voting/CyberSecurity/BarcodesEncodingPaperJune14-2019.pdf" rel="noopener noreferrer" target="_blank">U.S.'s National Institute of Standards and Technology noted</a> that barcodes could result in a voter being presented with different ballot selections than what the machine reads.
</p><p>
"If barcodes are used for tabulation of cast ballots, any modification of a voter's ballot selections may go undetected and impact the election results," NIST wrote.
</p><p>
All of this is especially problematic, experts say, because a <a href="https://news.engin.umich.edu/2020/01/new-study-finds-voters-not-detecting-ballot-errors-potential-hacks/" rel="noopener noreferrer" target="_blank">recent University of Michigan study</a> on voter behavior found that few voters check or detect errors on their ballots.
</p><p>
The debate over barcodes has figured heavily in battleground states like Georgia, South Carolina, North Carolina and Pennsylvania where they are used by some jurisdictions, but it's received much less scrutiny in California. In September 2019, Colorado became the first state to ban the use of barcodes or QR codes on ballots due to security concerns after using a system similar to California's.
</p><p>
Colorado's Secretary of State Jena Griswold said in a <a href="https://www.sos.state.co.us/pubs/newsRoom/pressReleases/2019/PR20190916QRCodes.html" rel="noopener noreferrer" target="_blank">news release at the time</a> that "although voters can see their vote choices, they cannot verify that the QR code is correct" and the QR codes "could be among the next target of an attack and are potentially subject to manipulation."
</p><p>
Griswold said <a href="https://www.sos.state.co.us/pubs/newsRoom/SMART-Act/FY20-21/2020StrategicPlan.pdf" rel="noopener noreferrer" target="_blank">Colorado will stop using machines that use barcodes or QR codes</a> to count votes after 2021. The state has been a national leader in adopting election security best practices, including practices like risk-limiting audits to verify election results.
</p><h2>Auditing to Ensure Voter Confidence
</h2><p>
California's Secretary of State Padilla gave L.A. County's voting system conditional certification earlier this month. Among the additional security requirements is that the county must conduct one of two types of audits to ensure the QR codes match the human-readable section of the ballot.
</p><p>
L.A. County has elected to conduct a traditional manual tally of 1% of its votes, which election security experts say is a less comprehensive method for ensuring ballots have been tabulated correctly.
</p><p>
In recent years, so-called <a href="https://www.ncsl.org/research/elections-and-campaigns/checking-the-election-risk-limiting-audits.aspx" rel="noopener noreferrer" target="_blank">risk-limiting audits</a> have been deemed best practice for providing confidence in an election result. California has an <a href="https://www.sos.ca.gov/elections/risk-limiting-audits" rel="noopener noreferrer" target="_blank">ongoing risk-limiting audit pilot program</a>. Such audits rely on statistically-based techniques such as auditing more ballots if the margin in a race is narrow. Looking at a fixed percentage regardless of the margin of victory, however, can lead to missed problems.
</p><p>
Perez called L.A. County's decision to do a 1% fixed audit "cutting a corner, given the fact that L.A. County has claimed to set such a high bar on the voting experience."
</p><p>
Sanchez, the registrar's office spokesman, said he didn't immediately know the reasoning behind the decision to not conduct a risk-limiting audit on the presidential election. The California Secretary of State's Office did not respond to a request for comment.
</p><p>
In a <a href="https://www.sos.ca.gov/administration/news-releases-and-advisories/2020-news-releases-and-advisories/ap20091-los-angeles-county-vsap-21-voting-system-certified" rel="noopener noreferrer" target="_blank">news release touting the certified system this month</a>, Padilla called the VSAP system a "historic milestone in election administration" and said that for in-person voters it will "provide an accessible, secure voting experience."
</p><p><em>*This story was updated Thursday afternoon to reflect U.S. officials announcement that Russian hackers targeted dozens of state, local and tribal networks, successfully stealing data from at least two unnamed victim servers.</em></p><p>
___
</p><p><em>Hit me up if you have any other election and voting-related questions. My DMs are open on </em><a href="https://twitter.com/latams" rel="noopener noreferrer" target="_blank"><em>Twitter @latams</em></a><em> You can also email me at tami(at)dot.la, or ask for my contact on Signal, for more secure and private communications.</em></p>From Your Site Articles
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