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Tony Hsieh’s Fatal Night: An Argument, Drugs, a Locked Door and Sudden Fire

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Tony Hsieh, who developed Zappos into a billion-dollar internet shoe store and formulated an influential theory about corporate happiness, deliberately locked himself in a shed moments before it was consumed by the fire that would kill him.

Last November, Mr. Hsieh was visiting his girlfriend, Rachael Brown, in her new $1.3 million riverfront house in New London, Conn. After the couple had an argument about the messiness of the house, Mr. Hsieh set up camp in the attached pool storage shed, which was full of foam pool noodles and beach chairs.

Those details appeared in reports released Tuesday by New London fire and police investigators, the first law enforcement accounts of the incident. They said Mr. Hsieh could be seen on a security video from Nov. 18 looking out the shed door about 3 a.m., even though no one was about. Light smoke rose behind him.

When Mr. Hsieh closed the door, there was the sound of the door lock latching and a deadbolt being drawn.

The entrepreneur, 46, was traveling with a nurse. He planned to leave before dawn for Hawaii with Ms. Brown, his brother Andrew, and several friends and employees, according to the police report. While in the shed, he asked to be checked on every 10 minutes. His nurse, who was staying in a hotel, said this was standard procedure with Mr. Hsieh.

Investigators said they didn’t know exactly what had started the fire, partly because there were too many possibilities. Mr. Hsieh had partly disassembled a portable propane heater. Discarded cigarettes were found. Or maybe the blaze erupted from candles. Investigators said his friends had told them that Mr. Hsieh liked candles because they “reminded him of a simpler time” in his life.

A fourth possibility is that Mr. Hsieh did it on purpose.

“It is possible that carelessness or even an intentional act by Hsieh could have started this fire,” the fire report said. The report added that Mr. Hsieh may also have been intoxicated, noting the presence of several Whip-It brand nitrous oxide chargers, a marijuana pipe and Fernet-Branca liqueur bottles.

The exact role of drugs or alcohol that night is likely to remain unclear. Dr. James Gill, Connecticut’s chief medical examiner, said in an email that “autopsy toxicology testing is not useful” if the victim survives for an extended period. A final report is pending.

Firefighters who broke down the door found Mr. Hsieh lying on a blanket. He was taken to a nearby hospital and then airlifted to the Connecticut Burn Center, where he died on Nov. 27 of complications from smoke inhalation.

Mr. Hsieh’s death shocked the tech and entrepreneurial worlds because of his relative youth and his writing on corporate happiness. Zappos was a star of the early consumer internet, helping convince the cautious that buying online held few perils. Mr. Hsieh became chief executive in 2001, promoting to all who would listen the notion that companies should try to make their customers as well as their employees happy. He relocated Zappos from the Bay Area to Las Vegas.

Amazon bought Zappos for $1.2 billion in 2009. The next year, Mr. Hsieh published “Delivering Happiness,” a best seller. “Our goal at Zappos is for our employees to think of their work not as a job or career, but as a calling,” he wrote.

Mr. Hsieh remained at Zappos but turned his attention to a civic project to revitalize downtown Las Vegas. Many investments and many years later, the project was at best an incomplete success. In the last year or so, Mr. Hsieh concentrated on Park City, Utah, where he spent tens of millions of dollars buying properties and became so manic that friends said they had discussed an intervention. Few outsiders knew that he had quietly left Zappos.

On the night of the fire, according to police interviews, Mr. Hsieh was despondent over the death of his dog the previous week during a trip to Puerto Rico. He and Ms. Brown had a disagreement that escalated, at which point Mr. Hsieh retired to the shed. An assistant checked with him frequently, logging the visits with Post-it notes on the door. Mr. Hsieh would generally signal that he was OK.

As the group prepared to depart in the middle of the night for the airport, Mr. Hsieh asked for the check-ins to be every five minutes. But four minutes were all it took for the fire to become deadly. Attempts by those in the house to break down the locked door were unsuccessful. Three Mercedes-Benz passenger vans arrived to take the party to the airport about the same time that firefighters arrived.

Ms. Brown, an early Zappos employee, did not return calls for comment. A family spokesman also did not respond to a message for comment.

Firefighters were regular visitors to the house in mid-November. On Nov. 16, they were summoned at 1 a.m. by a smoke detector that was wired into a security company. A man who answered the door said the alarm had been set off by cooking, according to department records.

The firefighters left but returned minutes later, prompted by another smoke detector. “On arrival found nothing showing and a male stating again that there was no problem,” Lt. Timothy O’Reilly wrote in a summary of the call. Firefighters said they had entered to take a look around.

Lieutenant O’Reilly and his colleagues found smoke in the finished basement, along with “melted plastic items on the stovetop along with cardboard that was hot to the touch,” which were apparently plastic utensils and plates. They also found a candle burning in “an unsafe location” and extinguished it. While the smoke in the basement dissipated, the firefighters offered fire safety tips.

The investigators’ report also recounted an episode early in the evening of Nov. 18. Mr. Hsieh’s assistant checked on him in the shed and noticed a candle had fallen over and was burning a blanket. The assistant asked Mr. Hsieh to put out the flame, and the entrepreneur did.

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Covid-19: How would an NHS vaccine passport app work?

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There is growing speculation that a certificate scheme could be built into the main NHS app.

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Facebook launches rap app

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Facebook unveils another experimental app, Atlassian acquires a data visualization startup and Newsela becomes a unicorn. This is your Daily Crunch for February 26, 2021.

The big story: Facebook launches rap app

The new BARS app was created by NPE Team (Facebook’s internal R&D group), allowing rappers to select from professionally created beats, and then create and share their own raps and videos. It includes autotune and will even suggest rhymes as you’re writing the lyrics.

This marks NPE Team’s second musical effort — the first was the music video app Collab. (It could also be seen as another attempt by Facebook to launch a TikTok competitor.) BARS is available in the iOS App Store in the U.S., with Facebook gradually admitting users off a waitlist.

The tech giants

Atlassian is acquiring Chartio to bring data visualization to the platform — Atlassian sees Chartio as a way to really take advantage of the data locked inside its products.

Yelp puts trust and safety in the spotlight — Yelp released its very first trust and safety report this week, with the goal of explaining the work that it does to crack down on fraudulent and otherwise inaccurate or unhelpful content.

Startups, funding and venture capital

Newsela, the replacement for textbooks, raises $100M and becomes a unicorn —  If Newsela is doing its job right, its third-party content can replace textbooks within a classroom altogether, while helping teachers provide fresh, personalized material.

Tim Hortons marks two years in China with Tencent investment — The Canadian coffee and doughnut giant has raised a new round of funding for its Chinese venture.

Sources: Lightspeed is close to hiring a new London-based partner to put down further roots in Europe — According to multiple sources, Paul Murphy is being hired away from Northzone.

Advice and analysis from Extra Crunch

In freemium marketing, product analytics are the difference between conversion and confusion — Considering that most freemium providers see fewer than 5% of free users move to paid plans, even a slight improvement in conversion can translate to significant revenue gains.

As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings — With buy-now-pay-later options, consumers turn a one-time purchase into a limited string of regular payments.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Jamaica’s JamCOVID pulled offline after third security lapse exposed travelers’ data — JamCOVID was set up last year to help the government process travelers arriving on the island.

AT&T is turning DirecTV into a standalone company — AT&T says it will own 70% of the new company, while private equity firm TPG will own 30%.

How to ace the 1-hour, and ever-elusive, pitch presentation at TC Early Stage — Norwest’s Lisa Wu has a message for founders: Think like a VC during your pitch presentation.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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FCC authorizes $50 subsidies for Internet service for low-income families

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The FCC under its acting Democratic chairwoman, Jessica Rosenworcel, raced to stand up the program after Congress authorized it as part of a sweeping $2 trillion coronavirus aid package lawmakers approved in December. It may take up to two months before Americans can take advantage of it; the government must still fine-tune its systems so that families can apply for, and providers can receive, the emergency benefits. That task is likely to be a tall one for Washington, which historically has struggled to deploy complicated technology under tight time constraints.

Once it is up and running, though, federal policymakers, Internet service providers, educators and consumer advocates anticipate it will provide an immense financial boost to Americans who need the help at a time of high unemployment and economic dislocation. The broad support for the measure has generated political momentum for crafting a more permanent replacement that would help Americans obtain and pay for broadband services once the $3.2 billion fund runs dry.

“This is a program that will help those at risk of digital disconnection,” Rosenworcel said in a statement, citing the fact some students have had to sit in parking lots just to obtain wireless Internet to do their homework. “In short, this program can make a meaningful difference in the lives of people across the country.”

The new broadband program highlights Washington’s new, urgent campaign to close the country’s gap between those who can access the Internet and those who cannot, laid bare by the coronavirus pandemic that forced families to work, learn and communicate primarily online. At least 18 million Americans still lack speedy, reliable Web connections, the FCC found in a report released last June. Government officials said the number probably is much higher.

The U.S. government spends about $9 billion annually to help fund the buildout of broadband infrastructure nationwide, subsidize low-income Americans’ phone bills and help schools equip their classrooms with speedy access to the Web. But the aid at times has been riddled by mismanagement and neglect, undermining Washington’s efforts to address long-standing digital inequalities that disproportionately affect low-income families, people of color and students.

The FCC’s new emergency broadband benefit is intended to provide at least a short-term boost for these Americans while expanding the number of families who are eligible for some federal support. More than 33 million may be able to obtain the monthly aid, according to Free Press, a public-interest advocacy group, which said the number probably will be higher. Those eligible include families whose income is no greater than 135 percent of the federal poverty guidelines and others who participate in programs such as reduced school lunches.

The discounts are limited to one per household. Some families also may be eligible for a one-time credit of $100 to help them purchase a device to access broadband service. They will have to apply to receive the aid, which will be paid directly to Internet providers that register with the U.S. government and obtain permission to participate. Companies are not required to accept the benefits under the program.

AT&T said Friday morning it intends to participate. CenturyLink, Charter, Comcast, Frontier, T-Mobile and Verizon did not immediately commit to accepting the emergency benefits, although many companies and their trade groups have said in recent days they support the FCC’s work and intend to review its new implementing rules. The FCC voted unanimously late Thursday to start the program.

“Closing the affordability gap is vital to ensuring everyone has a chance to get ahead and participate in society,” said Ron Wyden (D-Ore.), the Senate architect of the program. He said he hopes to either extend the benefit or revise other government programs to provide families with a more lasting digital safety net.

“Nearly every aspect of education, health care, work and communication require reliable broadband,” Wyden continued, “so it’s high time to stop treating it like a luxury.”

The entire benefit system may take weeks to set up, meaning families aren’t yet able to apply and may not start to see any aid until April, experts predict. But some public-interest groups — mindful of the federal government’s past missteps — have expressed fears in recent weeks that early hiccups could delay the emergency credits even further. They have aired particular concern with the technology the FCC plans to use to accept most applications and verify that Americans are eligible to receive the aid.

The technology in question is called the National Verifier, an online application tool that the government has used in the past to enroll people in another low-income subsidy program. The verification system is supposed to draw on state and federal data sources to help Americans determine easily whether they qualify to participate in Lifeline, which subsidizes millions of Americans’ monthly phone bills. But fewer than half of states as of last summer had actually integrated their data properly with the National Verifier, a government watchdog found in January. The digital deficiencies meant that people in these states are more likely to be declared ineligible for federal help even when they qualify for it, the report said.

The troubles with the National Verifier first surfaced during the Trump administration, when the Republican-led FCC under then-Chairman Ajit Pai sought to implement a series of massive cuts to the Lifeline program, a Washington Post investigation found. The shortcomings threaten to create fresh technological headaches in delivering new emergency broadband benefits, warned the New America Foundation’s Open Technology Institute, which asked the commission this month to double down on technical upgrades before payments begin.

“The emergency nature of this program will likely demand less-than-perfect procedures in the interest of getting relief to people as quickly as possible,” the OTI said, “but the Commission must adopt sound verification procedures.”

The new broadband benefits are expected to be available for only a few months, until the total $3.2 billion authorized by Congress runs out. But the unprecedented size of the fund — and the expected early demand for the dollars — has left Democratic policymakers and telecom giants in rare accord over the need for a more permanent expansion of the government’s digital safety net.

Without congressional action, millions of Americans in a matter of months may see increases in their bills — or find themselves owing monthly sums they cannot pay. The sudden drop-off could send some families right back into the digital darkness.

“There’s no sense in wasting a crisis,” John Stankey, the chief executive of AT&T, said at a company event Wednesday.

Stankey praised Congress for committing to the subsidy, which will benefit telecom giants’ efforts to retain customers behind on their bills or attract new ones. But he also acknowledged the program’s limitations: “It was more of a Band-Aid,” he said. “As a result of that, by definition, it will probably be inadequate because it is not intended to be an appropriation in perpetuity.”

Speaking at a news conference last week, Rosenworcel similarly stressed the government needed to seize the “opportunity for helping those people stay in that service, even after the program might end.”

“When the funds run out,” she said, “we’ll have to turn to Congress again.”

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