Monthly Archives: January 2021

News: Why Twitter says it banned President Trump

• January 9, 2021
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Twitter permanently banned the U.S. president Friday, taking a dramatic step to limit Trump’s ability to communicate with his followers. That decision, made in light of his encouragement for Wednesday’s violent invasion of the U.S. Capitol, might seem sudden for anyone not particularly familiar with his Twitter presence. In reality, Twitter gave Trump many, many

Twitter permanently banned the U.S. president Friday, taking a dramatic step to limit Trump’s ability to communicate with his followers. That decision, made in light of his encouragement for Wednesday’s violent invasion of the U.S. Capitol, might seem sudden for anyone not particularly familiar with his Twitter presence.

In reality, Twitter gave Trump many, many second chances over his four years as president, keeping him on the platform due to the company’s belief that speech by world leaders is in the public interest, even if it breaks the rules.

Now that Trump’s gone for good, we have a pretty interesting glimpse into the policy decision making that led Twitter to bring the hammer down on Friday. The company first announced Trump’s ban in a series of tweets from its @TwitterSafety account but also linked to a blog post detailing its thinking.

In that deep dive, the company explains that it gave Trump one last chance after suspending and then reinstating his account for violations made on Wednesday. But the following day, a pair of tweets the president made pushed him over the line. Twitter said those tweets, pictured below, were not examined on a standalone basis, but rather in the context of his recent behavior and this week’s events.

“… We have determined that these Tweets are in violation of the Glorification of Violence Policy and the user @realDonaldTrump should be immediately permanently suspended from the service,” Twitter wrote.

This is how the company explained its reasoning, point by point:

• “President Trump’s statement that he will not be attending the Inauguration is being received by a number of his supporters as further confirmation that the election was not legitimate and is seen as him disavowing his previous claim made via two Tweets (1, 2) by his Deputy Chief of Staff, Dan Scavino, that there would be an ‘orderly transition’ on January 20th.
• “The second Tweet may also serve as encouragement to those potentially considering violent acts that the Inauguration would be a ‘safe’ target, as he will not be attending.
• “The use of the words ‘American Patriots’ to describe some of his supporters is also being interpreted as support for those committing violent acts at the US Capitol.
• “The mention of his supporters having a ‘GIANT VOICE long into the future’ and that ‘They will not be disrespected or treated unfairly in any way, shape or form!!!’ is being interpreted as further indication that President Trump does not plan to facilitate an ‘orderly transition’ and instead that he plans to continue to support, empower, and shield those who believe he won the election.
• “Plans for future armed protests have already begun proliferating on and off-Twitter, including a proposed secondary attack on the US Capitol and state capitol buildings on January 17, 2021.”

All of that is pretty intuitive, though his most fervent supporters aren’t likely to agree. Ultimately these decisions, as much as they do come down to stated policies, involve a lot of subjective analysis and interpretation. Try as social media companies might to let algorithms make the hard calls for them, the buck stops with a group of humans trying to figure out the best course of action.

Twitter’s explanation here offers a a rare totally transparent glimpse into how social networks decide what stays and what goes. It’s a big move for Twitter — one that many people reasonably believe should have been made months if not years ago — and it’s useful to have what is so often an inscrutable high-level decision making process laid out plainly and publicly for all to see.

News: President Trump responds to Twitter account ban in tweet storm from @POTUS account

• January 9, 2021
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After Twitter took the major step Friday of permanently banning President Trump’s @realdonaldtrump Twitter account, the President aimed to get the last word in through his government account @POTUS which has a fraction of the Twitter followers but still offered the President a megaphone on the service to send out a few last tweets. The

After Twitter took the major step Friday of permanently banning President Trump’s @realdonaldtrump Twitter account, the President aimed to get the last word in through his government account @POTUS which has a fraction of the Twitter followers but still offered the President a megaphone on the service to send out a few last tweets.

The tweets were deleted within minutes by Twitter which does not allow banned individuals to circumvent a full ban by tweeting under alternate accounts.

In screenshots captured by TechCrunch, Trump responds to the account ban by accusing Twitter employees of conspiring with his political opponents. “As I have been saying for a long time, Twitter has gone further and further in banning free speech, and tonight, Twitter employees have coordinated with the Democrats and Radical Left in removing my account from their platform, to silence me — and YOU, the 75,000,000 great patriots who voted for me.”

The President’s rant further contends that he will soon be joining a new platform or starting his own. Many contended Trump would join right wing social media site Parler following the ban, though Friday afternoon the site was removed from the Google Play Store with the company saying Apple had threatened to suspend them as well.

“We have been negotiating with various other sites, and will have a big announcement soon, while we also look at the possibilities of building out our own platform in the near future,” other tweets from the @POTUS account read in part.

News: Parler removed from Google Play store as Apple App Store suspension reportedly looms

• January 9, 2021
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Shortly after Twitter announced Friday afternoon that they were permanently suspending the account of President Trump, Google shared that they were removing Parler, a conservative social media app, from their Play Store immediately, saying in a statement that they were suspending the app until the developers committed to a moderation and enforcement policy that could

Shortly after Twitter announced Friday afternoon that they were permanently suspending the account of President Trump, Google shared that they were removing Parler, a conservative social media app, from their Play Store immediately, saying in a statement that they were suspending the app until the developers committed to a moderation and enforcement policy that could handle objectionable content on the platform.

In a statement to TechCrunch, a Google spokesperson said:

“In order to protect user safety on Google Play, our longstanding policies require that apps displaying user-generated content have moderation policies and enforcement that removes egregious content like posts that incite violence. All developers agree to these terms and we have reminded Parler of this clear policy in recent months. We’re aware of continued posting in the Parler app that seeks to incite ongoing violence in the US. We recognize that there can be reasonable debate about content policies and that it can be difficult for apps to immediately remove all violative content, but for us to distribute an app through Google Play, we do require that apps implement robust moderation for egregious content. In light of this ongoing and urgent public safety threat, we are suspending the app’s listings from the Play Store until it addresses these issues.“

Parler’s Play Store page is currently down.

The conservative platform garnered attention this week after posts surfaced detailing threats of violence and planning around Tuesday’s chaotic Capitol building riots which led to the deaths of 5 people including a Capitol police officer. While more mainstream social media sites raced to take down violent content related to the riots, death threats and violence were easy to find across the Parler platform.

The app hosts accounts from a variety of conservative figures including many in the President’s family, though not the President himself.

On Friday, Buzzfeed News reported that Parler had received a letter from Apple informing them that the app would be removed from the App Store within 24 hours unless the company submitted an update with a moderation improvement plan. Parler CEO John Matze confirmed the action from Apple in a post on his Parler account where he posted a screenshot of the notification from Apple.

“We want to be clear that Parler is in fact responsible for all the user generated content present on your service and for ensuring that this content meets App Store requirements for the safety and protection of our users,” text from the screenshot reads. “We won’t distribute apps that present dangerous and harmful content.

The app remains available in the App Store, though users are currently complaining of technical issues.

We have reached out to Apple for additional comment.

News: Twitter permanently bans President Trump

• January 8, 2021
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President Trump was permanently suspended from Twitter Friday. In the announcement, the company cited “the risk of further incitement of violence” and the president’s past transgressions on the platform. “In the context of horrific events this week, we made it clear on Wednesday that additional violations of the Twitter Rules would potentially result in this

President Trump was permanently suspended from Twitter Friday. In the announcement, the company cited “the risk of further incitement of violence” and the president’s past transgressions on the platform.

“In the context of horrific events this week, we made it clear on Wednesday that additional violations of the Twitter Rules would potentially result in this very course of action,” Twitter wrote. “… We made it clear going back years that these accounts are not above our rules and cannot use Twitter to incite violence.”

On Wednesday Twitter suspended President Trump’s account until he deleted three tweets that the platform flagged as violating its rules. Trump’s account was set to reactivate 12 hours after those deletions, and he returned to the platform on Thursday night with a video in which he appeared to concede his election loss for the first time.

Trump crossed a line with Twitter when he failed to condemn a group of his supporters who staged a violent riot at the Capitol building while Congress met to certify the election results. In one tweet, Trump shared a video in which he gently encouraged the group to return home, while reassuring his agitated followers that he loved them and that they were “special.”

At that time, Twitter said that Trump’s tweets contained “repeated and severe violations” of its policy on civic integrity and threatened that any future violations would result in “permanent suspension” of the president’s account.

While Facebook took more drastic action against Trump’s account in the aftermath of Wednesday’s chaotic siege on Capitol Hill, Twitter has a longer history of friction with the outgoing president. In early 2020, Twitter’s decision to add a contextual label to a Trump tweet calling mail-in voting “fraudulent” prompted the president to craft a retaliatory though largely toothless executive order targeting social media companies.

Trump held the same grudge through the end of the year, trying to push a doomed repeal of Section 230 of the Communications Decency Act — the law that protects online companies from liability for user-generated content — through Congress in increasingly unusual ways.

Twitter’s move Friday to suspend the sitting U.S. president from its platform is a historic and huge decision the company avoided making for the four years of his presidency. In the wake of Wednesday’s violence, which Trump incited by sending a group of his supporters to march to the Capitol, tech’s biggest platforms appear to have at last had enough. But as with QAnon and the militia movements that attacked Capitol building this week, it’s too late to undo the chaos that four years of real-time Trump unleashed on the platform.

News: Holographic startup Envisics partners with Panasonic to fast-track in-car AR tech

• January 8, 2021
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Envisics founder and CEO Dr. Jamieson Christmas launched the startup three years ago to “revolutionize” the in-car experience with its holographic technology. Now, it has a partner that could help it achieve that mission. The U.K.-based holographic technology startup said Friday it reached an agreement with Panasonic Automotive Systems to jointly develop and commercialize a

Envisics founder and CEO Dr. Jamieson Christmas launched the startup three years ago to “revolutionize” the in-car experience with its holographic technology. Now, it has a partner that could help it achieve that mission.

The U.K.-based holographic technology startup said Friday it reached an agreement with Panasonic Automotive Systems to jointly develop and commercialize a new generation of head-up displays for cars, trucks and SUVs. Panasonic Automotive Systems is a Tier 1 automotive supplier and a division of Panasonic Corporation of North America. The head-up displays are units integrated in the dash of a vehicle that project images onto the windshield to aid drivers with navigation and provide other alerts. The Panasonic HUDs, as they’re often called, will use Envisics holographic technology.

The deal, announced ahead of the virtual 2021 CES tech trade show, follows Envisics’ $50 million Series B funding round and news that its tech will be integrated in the upcoming Cadillac Lyriq electric vehicle. The funding round, which brought Envisics a valuation of more than $250 million, included investments from Hyundai Mobis, GM Ventures, SAIC Ventures and Van Tuyl Companies.

Envisics’ technology, the foundation of which came out of Christmas’ PhD studies at Cambridge University more than 15 years ago, electronically manipulates the speed of light. This process enables images to appear three-dimensional, Christmas explained in a recent interview. The company has secured more than 250 patents and has another 160 pending certification.

The company is solely focused upon the automotive application of holography, Christmas said, adding that its first generation is already integrated in more than 150,000 Jaguar Land Rover vehicles.

Christmas said this new agreement aims to combine Panasonic’s expertise in optical design and its global reach as a Tier 1 supplier with Envisics’ technology to bring holography into the mainstream. Mass production of vehicles using its technology is slated for 2023, according to the companies.

“This is very much about part of our business plan, you know the Series B funding round we undertook was about scaling the business and enabling us to move forward as we enter the market,” Christmas said. “Part of that was a commitment to engage in partnerships with Tier ones that we can then work with to deliver these products to market.

“This is the first of those agreements,” he added, suggesting that Envisics has a much larger aim.

What that means, Christmas said, will be head-up displays with high resolution, wide color gamut and large images that can be overlaid upon reality. The technology can also project information at multiple distances simultaneously.

“That really unlocks very interesting applications,” he said. “In the short term, it will be kind of relatively simple augmented reality applications like navigation, highlighting the lane you’re supposed to be in and some safety applications. But as you look forward into things like autonomous driving it unlocks a whole realm of other opportunities like entertainment and video conferencing.”

He added that it could even be used for night vision applications such as overlaying enhanced information upon a dark road to make it clear where the road is going and what obstacles might be out there.

News: Daily Crunch: Roku buys Quibi’s content library

• January 8, 2021
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Quibi’s content will live on, Hyundai may partner with Apple and Donald Trump returns to Twitter. This is your Daily Crunch for January 8, 2021. The big story: Roku buys Quibi’s content library If you’re wondering what will happen to Quibi shows like “Most Dangerous Game” and “Chrissy Court,” wonder no longer: They’re going to

Quibi’s content will live on, Hyundai may partner with Apple and Donald Trump returns to Twitter. This is your Daily Crunch for January 8, 2021.

The big story: Roku buys Quibi’s content library

If you’re wondering what will happen to Quibi shows like “Most Dangerous Game” and “Chrissy Court,” wonder no longer: They’re going to Roku.

The streaming TV platform announced today that it has acquired the global rights to Quibi’s content library, which it plans to bring to The Roku Channel, free and ad-supported, some this year. This includes “more than a dozen” shows that never got a chance to stream on Quibi before the app shut down.

“The most creative and imaginative minds in Hollywood created groundbreaking content for Quibi that exceeded our expectations,” said Quibi founder Jeffrey Katzenberg in a statement. “We are thrilled that these stories, from the surreal to the sublime, have found a new home on The Roku Channel.”

The tech giants

Shares of Hyundai Motor Co. climb more than 20% on potential EV deal with Apple — Hyundai said discussions are still in the “early stage.”

Google’s plan to replace tracking cookies goes under UK antitrust probe — U.K.’s Competition and Markets Authority said it’s investigating “suspected breaches of competition law by Google.”

Trump returns to Twitter with what sounds like a concession speech — President Trump only had to wait 12 hours before returning to his social network of choice.

Startups, funding and venture capital

Jobandtalent tops up with $108M for its ‘workforce as a service’ platform — The startup operates a dual-sided platform that connects temp workers with employers.

Detroit’s Ludlow Ventures goes for fund four — The Detroit-based seed-stage firm is in the process of closing its fourth fund of $65 million.

Jumbotail raises $14.2M for its wholesale marketplace in India — Jumbotail said it serves more than 30,000 neighborhood stores, popularly known in India as kiranas.

Advice and analysis from Extra Crunch

VCs discuss gaming’s biggest infrastructure investment opportunities in 2021 — Investors highlighted numerous areas for new opportunity, including specialized engines, next-gen content creation platforms and tools to port desktop experiences to mobile.

What is up with Tesla’s value? — And a bunch of other stocks, for that matter.

The Roblox Gambit — So it turns out that Roblox is worth $29.5 billion.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Stolen computers are the least of the government’s security worries — The SolarWinds breach is likely to be a bigger cybersecurity threat than any computers stolen during the pro-Trump riot on Wednesday.

Five reforms necessary to create a truly cashless society — Convenience shouldn’t come at the cost of other aspects of commerce.

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.

News: You’ll never believe what this email thread says about the ad-funded ‘open’ web

• January 8, 2021
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Among a number of claims on U.K. adtech lobby group MOW’s website is the canonical biggie that “Advertising funds the open web.” This coalition of “marketers,” whose members are not being made public despite its sweeping claims to love web openness — lest, MOW says, Google rain down punishment upon its ranks of “top companies

Among a number of claims on U.K. adtech lobby group MOW’s website is the canonical biggie that “Advertising funds the open web.”

This coalition of “marketers,” whose members are not being made public despite its sweeping claims to love web openness — lest, MOW says, Google rain down punishment upon its ranks of “top companies from across the globe” — recently complained to the U.K.’s competition regulator about the tech giant’s plan to end support for tracking cookies.

If you didn’t already guess it the “OW” in MOW’s acronym stands for “Open Web.” Aka (unknown) Marketers for an Open Web.

And today the CMA duly announced it is investigating Mountain View’s “Privacy Sandbox.” Though, as yet, no conclusions have been reached on whether Google’s plan threatens competition.

In truth, a variety of business models support open access to information on the internet.

Wikipedia, for example — surely the canonical example of the open web — relies upon reader donations to keep the lights on as a not-for-profit.

While — on the “exclusive access” side — crowdfunding sites like Patreon and the subscription platform Substack offer tools for creators to solicit regular monetary subscriptions from fans and backers to unlock gated content.

But it’s instructive to note how many online publishers have shifted, year over year, from free (ad-supported) access to content to selling subscriptions for (paywalled) content, often in addition to running ads.

Whether it’s the Financial Times, the New York Times, the Telegraph or Business Insider, the list of pay-to-access news sites keeps getting longer. Much like the consent flows that (also) pop up asking to process visitors’ information in order to target them with ads.

TechCrunch joined the ranks of subscription publications almost two years ago when we launched Extra Crunch. The main TC site continues to be free to access supported by ads and our events business. (NB: In 2021 our events are going fully virtual — which means, as a brief, bonus aside, they’ve never been so open and accessible!)

So how come all these paywalls are being thrown up if advertising funds the open web, as MOW claims?

The concise answer is that digital advertising pays publishers so poorly it can’t support producing quality content at the required scale on its own — thanks to myriad adtech intermediaries, click fraud and the big two: Google and Facebook; aka, the adtech duopoly, who take the lion’s share of revenue generated by digital advertising. 

“We have found that intermediaries (the largest of which is Google) capture at least 35% of the value of advertising bought from newspapers and other content providers in the U.K.,” the CMA reported last summer, in a major market study.

Consumers turning to ad blockers to escape creepy ads and prevent privacy-hostile trackers from keeping real-time tabs on their digital activity and systematically passing this intel to scores of unknowns in an ad auction process that the U.K.’s own data protection regulator has said isn’t very lawful, is another relevant factor here.

Online advertising certainly funds something. But is that something the open web? That looks rather debatable at this point.

I bring all this up merely to provide context for a chance detail in the MOW story that I want to share — as it illustrates some of the issues in this high stakes tug-of-war between publishers, digital marketing and adtech players and a handful of big (ad)tech versus the poor, frustrated eyeballs of the average internet user.

It’s an important power struggle.

One which threatens to keep steamrollering internet users’ right to protect their personal information from exploitation (and wider security-related risks) by, in the latest twist, co-opting competition regulators to erect barriers to pro-privacy reform. Assuming, that is, the CMA ends up naively swallowing dubious claims about what advertising does for the “open” internet — when evidence of what it actually does is but a click and a paywall/tortuously long consent to “share” your private data with hundreds of unknown firms away.

The regulator’s announcement today suggests it’s alive to the dysfunction surrounding internet users’ privacy and will take more than a superficial look at that issue — though if the ICO is the main rep in the room batting for users’ interests here that’s suboptimal, to say the least, given the latter’s storied reluctance to enforce the actual law against adtech.

But here’s the tidbit — which comes by way of a PR agency working for MOW. Earlier today it CC’d me into an email thread in which several staffers had been discussing monitoring the CMA news on behalf of its client.

I’m not naming the agency or any of the individuals involved to spare their blushes but in the thread — which begins with “FYI — The CMA are just about to announce a formal investigation into Google. We’ve drafted a comment which we will be circulating shortly” — staff can be seen asking to share logins to a number of newspaper websites and/or start a free trial in order to access newspaper copy for free, i.e., without having to pay for new subscriptions. 

“Do we have an FT login? If so, could you get hte [sic] story they’ve just written on MOW off for me?” asks one staffer.

Shortly afterward there’s a discussion about starting a free trial on the Telegraph’s website as they talk about collating relevant coverage into a single document to be able to monitor developments for MOW.

One staffer chips in to warn “you need to put credit card details in to start a trial” — before suggesting the other has a go “to see if you find a way around it.”

This person follows up by saying they’ll “let you know if I manage to find a way around it.”

So, mmm, irony much?

In light of MOW’s advocacy for a “vibrant” ad-supported open web — which its website implies is aligned with the interests of publishers, marketers and adtech providers alike, i.e., not just with opaque adtech interests — it seems pretty relevant that an agency working for the industry group is uninterested, to put it politely, in paying for relevant newspaper content while being paid to lobby on adtech’s behalf.

On its website MOW argues that letting Google switch off third-party tracking cookies will be bad news for publishers because it says it will cut off marketers’ ability to measure ad campaign performance across different sites — claiming that will result in less effective ads that yield a lower return and thus less cash remitted by marketers to publishers.

However the CMA’s recent deep dive study of the digital marketing sector found an industry so opaque and riddled with black box algorithms that the regulator listed “lack of transparency” itself as a competition concern.

“Platforms with market power have the incentive and ability to increase prices, for example, or to overstate the quality and effectiveness of their advertising inventory,” it warned in the report. “They can take steps to reduce the degree of transparency in digital advertising markets, reducing other publishers’ ability to demonstrate the effectiveness of their advertising and forcing advertisers to rely on information and metrics provided by those platforms. And the lack of transparency undermines the ability of market participants to make the informed decisions necessary to drive competition. The upshot of all of these issues is that competition is weakened and trust in the market is eroded.”

Given that overarching assessment, who would take an opaque coalition of marketers’ word for it that current-gen cookie tracking of the entire internet yields irreplaceably valuable performance metrics?

Or that such privacy-hostile tracking is the only viable way to support a “vibrant open web”?

“The lack of transparency is particularly severe in the open display market where publishers and advertisers rely on intermediaries to manage the process of real-time bidding and ad serving but cannot observe directly what the intermediaries are doing or, in some cases, how much they are being charged,” the CMA goes on, sharpening its concerns about the extent of the obfuscation that cloaks the practices of adtech middlemen. “Market participants such as newspapers and advertisers typically do not have visibility of the fees charged along the entire supply chain and this limits their ability to make optimal choices on how to buy or to sell inventory, reducing competition among intermediaries.”

One thing is clear: The adtech industry needs a whole lot of disinfecting sunlight to be shone in. And that clarification process will surely demand substantial reform.

Refusing to change how things are done by claiming there’s simply no other way to preserve the web “as we know it” is as ridiculous an idea as it is anti-innovation in sentiment.

Returning to the misfired email thread, we contacted MOW’s PR agency to ask whether or not the account includes expenses for relevant newspaper subscriptions. It told us these would come out of a central agency fund. Additionally — having checked back on it — the agency said it did in fact have subscriptions to the newspaper sites in question.

The spokesperson explained that the staffers involved just hadn’t realized at the time — in the heat of the “day-to-day PR” moment (and whilst wrangling remote-working-impacted comms). And, presumably, as all those subscription login screens threw up barriers to accessing the content they needed in the heat of the moment.

This (senior) spokesperson blamed themselves for what they described as a “cock up” — including the soliciting of a “paywall workaround” — going on to take full mea culpa responsibility and emphasizing it had nothing to do with MOW or with the MOW account.

But, well, if an agency working for an adtech lobby group whose key claim is that “ads support the open internet” is unable to access the online content they need to do their job without a subscription, what does that tell us about how much of an open internet the advertising industry is actually funding right now?

News: Extra Crunch roundup: 2 VC surveys, Tesla’s melt up, The Roblox Gambit, more

• January 8, 2021
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Thanks very much for reading Extra Crunch this week. I hope we can all look forward to a nice, boring weekend with no breaking news alerts.

This has been quite a week.

Instead of walking backward through the last few days of chaos and uncertainty, here are three good things that happened:

• Google employee Sara Robinson combined her interest in machine learning and baking to create AI-generated hybrid treats.
• A breakthrough could make water desalination 30%-40% more effective.
• Bianca Smith will become the first Black woman to coach a professional baseball team.

Despite many distractions in our first full week of the new year, we published a full slate of stories exploring different aspects of entrepreneurship, fundraising and investing.

We’ve already gotten feedback on this overview of subscription pricing models, and a look back at 2020 funding rounds and exits among Israel’s security startups was aimed at our new members who live and work there, along with international investors who are seeking new opportunities.

Plus, don’t miss our first investor surveys of 2021: one by Lucas Matney on social gaming, and another by Mike Butcher that gathered responses from Portugal-based investors on a wide variety of topics.

Thanks very much for reading Extra Crunch this week. I hope we can all look forward to a nice, boring weekend with no breaking news alerts.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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The Roblox Gambit

In February 2020, gaming platform Roblox was valued at $4 billion, but after announcing a $520 million Series H this week, it’s now worth $29.5 billion.

“Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19,” writes Alex Wilhelm this morning. “That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion.”

Alex suggests that Roblox’s decision to delay its IPO and raise an enormous Series H was a grandmaster move that could influence how other unicorns will take themselves to market. “A big thanks to the gaming company for running this experiment for us.”

I asked him what inspired the headline; like most good ideas, it came to him while he was trying to get to sleep.

“I think that I had ‘The Queen’s Gambit’ somewhere in my head, so that formed the root of a little joke with myself. Roblox is making a strategic wager on method of going public. So, ‘gambit’ seems to fit!”

8 investors discuss social gaming’s biggest opportunities

For our first investor survey of the year, Lucas Matney interviewed eight VCs who invest in massively multiplayer online games to discuss 2021 trends and opportunities:

• Hope Cochran, Madrona Venture Group
• Daniel Li, Madrona Venture Group
• Niko Bonatsos, General Catalyst
• Ethan Kurzweil, Bessemer Venture Partners
• Sakib Dadi, Bessemer Venture Partners
• Jacob Mullins, Shasta Ventures
• Alice Lloyd George, Rogue
• Gigi Levy-Weiss, NFX

Having moved far beyond shooters and sims, platforms like Twitch, Discord and Fortnite are “where culture is created,” said Daniel Li of Madrona.

Rep. Alexandria Ocasio-Cortez uses Twitch to explain policy positions, major musicians regularly perform in-game concerts on Fortnite and in-game purchases generated tens of billions last year.

“Gaming is a unique combination of science and art, left and right brain,” said Gigi Levy-Weiss of NFX. “It’s never just science (i.e., software and data), which is why many investors find it hard.”

How to convert customers with subscription pricing

Startups that lack insight into their sales funnel have high churn, low conversion rates and an inability to adapt or leverage changes in customer behavior.

If you’re hoping to convert and retain customers, “reinforcing your value proposition should play a big part in every level of your customer funnel,” says Joe Procopio, founder of Teaching Startup.

What is up with Tesla’s value?

Alex Wilhelm followed up his regular Friday column with another story that tries to find a well-grounded rationale for Tesla’s sky-high valuation of approximately $822 billion.

Meanwhile, GM just unveiled a new logo and tagline.

As ever, I learned something new while editing: A “melt up” occurs when investors start clamoring for a particular company because of acute FOMO (the fear of missing out).

Delivering 500,000 cars in 2020 was “impressive,” says Alex, who also acknowledged the company’s ability to turn GAAP profits, but “pride cometh before the fall, as does a melt up, I think.”

Note: This story has Alex’s original headline, but I told him I would replace the featured image with a photo of someone who had very “richest man in the world” face.

How Segment redesigned its core systems to solve an existential scaling crisis

On Tuesday, enterprise reporter Ron Miller covered a major engineering project at customer data platform Segment called “Centrifuge.”

“Its purpose was to move data through Segment’s data pipes to wherever customers needed it quickly and efficiently at the lowest operating cost,” but as Ron reports, it was also meant to solve “an existential crisis for the young business,” which needed a more resilient platform.

Dear Sophie: Banging my head against the wall understanding the US immigration system

Dear Sophie:

Now that the U.S. has a new president coming in whose policies are more welcoming to immigrants, I am considering coming to the U.S. to expand my company after COVID-19. However, I’m struggling with the morass of information online that has bits and pieces of visa types and processes.

Can you please share an overview of the U.S. immigration system and how it works so I can get the big picture and understand what I’m navigating?

— Resilient in Romania

The first “Dear Sophie” column of each month is available on TechCrunch without a paywall.

Revenue-based financing: The next step for private equity and early-stage investment

For founders who aren’t interested in angel investment or seeking validation from a VC, revenue-based investing is growing in popularity.

To gain a deeper understanding of the U.S. RBI landscape, we published an industry report on Wednesday that studied data from 134 companies, 57 funds and 32 investment firms before breaking out “specific verticals and business models … and the typical profile of companies that access this form of capital.”

Lisbon’s startup scene rises as Portugal gears up to be a European tech tiger

Mike Butcher continues his series of European investor surveys with his latest dispatch from Lisbon, where a nascent startup ecosystem may get a Brexit boost.

Here are the Portugal-based VCs he interviewed:

• Cristina Fonseca, partner, Indico Capital Partners
• Pedro Ribeiro Santos, partner, Armilar Venture Partners
• Tocha, partner, Olisipo Way
• Adão Oliveira, investment manager, Portugal Ventures
• Alexandre Barbosa, partner, Faber
• António Miguel, partner, Mustard Seed MAZE
• Jaime Parodi Bardón, partner, impACT NOW Capital
• Stephan Morais, partner, Indico Capital Partners
• Gavin Goldblatt, managing partner, Portugal Gateway

How late-stage edtech companies are thinking about tutoring marketplaces

How do you scale online tutoring, particularly when demand exceeds the supply of human instructors?

This month, Chegg is replacing its seven-year-old marketplace that paired students with tutors with a live chatbot.

A spokesperson said the move will “dramatically differentiate our offerings from our competitors and better service students,” but Natasha Mascarenhas identified two challenges to edtech automation.

“A chatbot won’t work for a student with special needs or someone who needs to be handheld a bit more,” she says. “Second, speed tutoring can only work for a specific set of subjects.”

Decrypted: How bad was the US Capitol breach for cybersecurity?

While I watched insurrectionists invade and vandalize the U.S. Capitol on live TV, I noticed that staffers evacuated so quickly, some hadn’t had time to shut down their computers.

Looters even made off with a laptop from Senator Jeff Merkley’s office, but according to security reporter Zack Whittaker, the damages to infosec wasn’t as bad as it looked.

Even so, “the breach will likely present a major task for Congress’ IT departments, which will have to figure out what’s been stolen and what security risks could still pose a threat to the Capitol’s network.”

Extra Crunch’s top 10 stories of 2020

On New Year’s Eve, I made a list of the 10 “best” Extra Crunch stories from the previous 12 months.

My methodology was personal: From hundreds of posts, these were the 10 I found most useful, which is my key metric for business journalism.

Some readers are skeptical about paywalls, but without being boastful, Extra Crunch is a premium product, just like Netflix or Disney+. I know, we’re not as entertaining as a historical drama about the reign of Queen Elizabeth II or a space western about a bounty hunter. But, speaking as someone who’s worked at several startups, Extra Crunch stories contain actionable information you can use to build a company and/or look smart in meetings — and that’s worth something.

News: Twitter bans QAnon figures Michael Flynn, Sidney Powell and Ron Watkins

• January 8, 2021
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Twitter took action against a pair of President Trump’s close associates, banning them from the platform Friday. Trump ally Michael Flynn and former Trump campaign lawyer Sidney Powell were both suspended under Twitter’s “Coordinated Harmful Activity” policy. Ron Watkins, who previously ran 8kun (formerly 8chan) also saw his account removed. “We’ve been clear that we

Twitter took action against a pair of President Trump’s close associates, banning them from the platform Friday.

Trump ally Michael Flynn and former Trump campaign lawyer Sidney Powell were both suspended under Twitter’s “Coordinated Harmful Activity” policy. Ron Watkins, who previously ran 8kun (formerly 8chan) also saw his account removed.

“We’ve been clear that we will take strong enforcement action on behavior that has the potential to lead to offline harm, and given the renewed potential for violence surrounding this type of behavior in the coming days, we will permanently suspend accounts that are solely dedicated to sharing QAnon content,” a Twitter spokesperson told TechCrunch.

Each figure has promoted the QAnon conspiracy in recent months. Flynn and Powell were both also actively involved in Trump’s quest to overturn the results of the November election. As the administrator of QAnon’s central online hub, Watkins played a key role QAnon’s explosion into the mainstream over the last few years.

Developing…

News: Venrock’s Bryan Roberts on the firm’s new $450 million fund, and where it’s shopping in 2021

• January 8, 2021
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Venrock, the 51-year-old venture firm that started as the venture arm of the Rockefeller family, has closed its ninth fund with $450 million in capital commitments, the same amount the firm raised for its last two funds, closed in 2017 and 2014, respectively. The outfit, with offices in Palo Alto, New York, and Cambridge, clearly

Venrock, the 51-year-old venture firm that started as the venture arm of the Rockefeller family, has closed its ninth fund with $450 million in capital commitments, the same amount the firm raised for its last two funds, closed in 2017 and 2014, respectively. The outfit, with offices in Palo Alto, New York, and Cambridge, clearly feels comfortable with the fund size, but it says change is otherwise a constant, given that trends and tech shift so quickly that so-called pattern recognition can actually prove a liability if an investment team isn’t careful.

To learn more about the changes the team is tracking at Venrock — whose newest exits include last year’s IPOs of Cloudflare and 10x Genomics IPO, and the recent sales of Corvidia and Personal Capital — we were in touch earlier today with longtime partner Bryan Roberts, who has spent his 24-year career in venture with the firm.
Our exchange has been edited lightly for length and clarity.

TC: I talked with your colleague Camille Samuels earlier this year about aging biology. How big an area of focus is that for Venrock and why?

BR: It is one of many interesting areas of biology on a go-forward basis, along with immunology, CNS (central nervous system) and other areas [where they has been] little progress and great unmet need.

TC: Speaking of unmet needs, Camille also talked about why infectious disease isn’t good business for new companies, as are cancers and orphan diseases. As she explained it, with something like the coronavirus, it’s hard to get funding before it’s an actual problem; once a treatment is developed, it has to be sold at low cost, and then you hope you won’t have repeat customers. Do you agree, and do you think this needs to change?

BR: Yes, I think things need to change, but there are several issues. In the case of one company on which I lost a bunch of money — Achaogen, which made a successful drug for a big unmet need [but faced] screwy commercialization dynamics in the infectious disease space —  and for many historical [infectious disease] companies, the cost of a drug is borne by the hospital, not billed separately.

It has also been hard historically to get anyone to pay attention to much of anything from a preventive perspective – even more so in communicable diseases. Covid was, on the one hand, not a particularly hard biological problem to solve, but from an investing perspective, the issue was it was a problem tailor-made for an existent or large company to tackle, not a startup. Startups take 12 or more months to find their way out the front door, and the problem is largely solved by then by one of the very large competitors.

You saw this with Moderna. Its tech turned out to be specifically suited to vaccines — and then a pandemic hit.

TC: Venrock recently helped incubate a new microbiome startup called Federation Bio, which is the firm’s first bet on space. Why not move faster into this area, and how would you describe the size of the opportunity now? Is this something you want to delve into more aggressively?

BR: We did spend 12 months or so helping get Federation started, including my partner Racquel Bracken acting as the initial CEO. We weren’t compelled by the prior approaches and teams, and it is really the intersection of those two dynamics that get us involved in new projects.

In this case, a terrific academic, Michael Fischbach, had generated great data so we ran with it. We recently spent more than 12 months incubating a new gene therapy startup in the same manner – in the latter case, a couple of great academics generated exquisite cell type specificity — so we went out and found some leadership and just seeded the business.

TC: It’s one way to avoid crazy valuations. Where have valuations gone up the most?

BR: Everywhere, but especially for companies that appear — or actually have — reduced binary risk and become growth stage businesses [and that’s] across sectors.

TC: You focus on so much: biotechnology, diagnostics, genomics, healthcare IT, medical devices. What are some of biggest trends you’re watching in some of these areas, and where do you think you might be spending a little more of your time in 2021?

BR: Personally, I am compelled these days by first, value-based care in healthcare delivery — meaning it’s more efficient, there are better outcomes, there’s better customer experience — and mostly from full stack platforms versus point solutions. I’m also focused on biological insights and applications that new genomics tools — single cell; gene editing — can bring. Last, [I’m tracking what] novel therapeutic modalities can bring to really bad diseases. It feels like we’re in the first inning of cell and gene therapy.

TC: How do you think the new administration in Washington could impact your work?

BR: I think there will be lots of talk about material changes to healthcare and other stuff, but I think it will mostly be talk given the slim margin in the Senate, as well as the decreased and small margin [that Democrats have] in the House. I think it will be a positive in that a bunch of the silly stuff around the [Affordable Care Act] will fade to nothing and people can get on with trying to improve implementation and go build.

TC: What do you make of the recent collapse of Haven, the joint venture of Amazon, JPMorgan Chase and Berkshire Hathaway to reduce the healthcare costs of their own employees? Would you like to see Amazon focused more — or less — on healthcare?

BR: We’ve long been bears [about its odds] for a bunch of the reasons folks cited over the last few weeks [including lack of transparency into healthcare costs].

I would love to see Amazon use its brand, delivery logistics excellence, and ability to compete at super-tight margins in healthcare. I don’t think it extends to real regulatory, privacy or risk appetite, but the company could be an awesome pharmacy/pharmacy benefit manager – and I hope they do it.

TC: Regarding Venrock’s new fund, have there been personnel changes? Will check sizes change? 

BR: We made Racquel Bracken and Ethan Batraski partners; it’s always fun when you can promote terrific young talent from within.

As for our high-level strategy, check sizes, and stages all remain the same. We’ve raised $450 million for each of the last several funds because we like that size and our culture and personality is way more focused on performance than on asset accumulation. It also feels really hard to raise increasing amounts of capital without affecting performance excellence.

TC: Healthcare has never been hotter. How much of Venrock’s capital is focused on healthcare, and will that change with this newest fund?

BR: We’re pretty bottoms-up allocation driven; we invest based on the projects we find and fall in love with. Life sciences usually ends up being around 30% to 40% [of capital invested]. Healthcare IT, which depending who you talk to in the universe gets lumped into healthcare or tech —  I confess those software-enabled services businesses feel much more tech like than biotech — usually ends up being about a quarter of the fund and there are no anticipated changes. The balance will go into tech — primarily tech and data-enabled software and services businesses.

TC: Has Venrock considered forming a blank-check company to take a company public, as more VCs are doing?

BR: We have not. I feel like most investors that have formed SPACs have done so more because of the compelling sponsor economics than a compelling, durable mechanism to get awesome companies public in a much more efficient manner than they otherwise might. It’ll be interesting to see how the economics change as the supply and demand of SPACs versus “great targets” changes and the SPACs get closer to the end of their hunting license period.