Tag Archives: Blog

News: China roundup: Games are opium, algorithms need scrutiny

• August 7, 2021
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Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. The question for the tech news cycle in China these days has become: Who is Beijing’s next target? Regulatory clampdowns are common in China’s tech industry

Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.

The question for the tech news cycle in China these days has become: Who is Beijing’s next target? Regulatory clampdowns are common in China’s tech industry but the breadth of the recent moves has been unprecedented. No major tech giant is exempted and everyone is being attacked from a slightly different angle, but Beijing’s message is clear: Tech businesses are to align themselves with the interests and objectives of Beijing.

Education curbs hit tech giants

The government’s motivation isn’t always ideological. It could lead to policies that rein in the unruly private tutoring sector in the hope of easing pressure on students and parents. Recent orders from Beijing have strictly limited after-school tutoring, though they also sparked a wave of sympathy for public school teachers who work at lucrative tutoring centers to compensate for their meager salaries.

The effects of the education crackdown are also trickling down to internet companies. For the past few years, ByteDance had been aggressively building an online education business through a hiring and acquisition spree in part to diversify an ad-based video business. Its plan seems to be in shambles as it reportedly plans to lay off staff in its education department following recent the clampdown.

The restraints are also hitting American companies. Duolingo, the language learning app, was removed from several app stores in China. While it’s not immediately clear whether the action was the result of any policy change, the government recently, along with its restraints on extra-curriculum, barred foreign curricula in schools from K-9.

Games are opium

It could be tricky to read the top leaders’ minds because their messages could come through various government departments or state-affiliated media outlets, carrying different weights.

This week, Tencent is in the authorities’ crosshairs. About $60 billion of its market cap was wiped after the Economic Information Daily, an economic paper supervised by China’s major state news agency Xinhua, published an article (which was taken down shortly) describing video games as “spiritual opium” and cited the major role Tencent plays in the industry. Shares of Tencent’s smaller rival NetEase were also battered.

This certainly isn’t the first time Tencent and the gaming industry overall were slammed by the government for their impact on underage players. Tencent has been working to appease the authorities by introducing protections for young players, for instance, by tightening age checks several times.

Tencent, which has a sprawling online empire of social networks, payments and music on top of games, has also promised to “do [more social] good” through its products. And following the recent op-ed from the state paper, Tencent further restricted the amount of time and money children can spend inside games. But after all, the company still depends largely on addictive game mechanics that lure players to open loot boxes.

Tencent share prices over the past six months. Image Credits: Google Finance

Fix the algorithms

The other camp of tech companies feeling the heat is those dependent on machine learning algorithms to distribute content. The Propaganda Department of the Chinese Communist Party, the country’s watchdog of public expressions, along with several other government organs, issued an advisory to “strengthen the study and guidance of online algorithms and carry out oversight over algorithmic recommendations.”

The government’s goal is to assert more control over how algorithmic black boxes affect what information people receive. Shares of Kuaishou, TikTok’s archrival in China, tanked on the news. Since its blockbuster initial public offering in February, Kuaishou’s stock price has tumbled as much as 70%. Meanwhile, the Beijing-based short video firm is shuttering one of its overseas apps called Zynn, which has caused controversy over plagiarism. But its overseas user base is also rapidly growing, crystalizing in one billion monthly users worldwide recently.

End of “two-choose-one”

The week hasn’t ended. On Friday morning, The Wall Street Journal reported that the country’s antitrust regulator is preparing to fine Meituan, China’s major food delivery platform, $1 billion for allegedly abusing its market dominance. In 2020, Meituan earned 114.8 billion yuan or $17.7 billion in revenue.

Until recently, forcing suppliers to pick sides had been a common practice in China’s e-commerce world. Alibaba did so by forbidding sellers to list on rivaling platforms, a practice that resulted in a $2.75 billion antitrust penalty in April. We will see where the government will act next as it continues to curb the power of its tech darlings.

News: Cities can have flying cars if they start working on infrastructure today

• August 7, 2021
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The truth is, flying cars are a reality. The aviation technology exists and early-stage regulatory review is underway in both the U.S. House and the Senate to bring eVTOLs to market.

Nearly everyone knows the pain of sitting in traffic watching valuable minutes tick by. Just as bad is the maddening search for a parking spot, or even just a safe place to hop out of the backseat of an Uber on a dense, buzzing city street.

For emergency medical providers, these headaches can literally mean life or death. Who among us hasn’t stared up at the sky behind a sea of red taillights, wishing we could rise above the gridlock and get to whatever corner of the city in a fraction of the time?

The truth is, flying cars are a reality. The aviation technology exists and early-stage regulatory review is underway in both the U.S. House and the Senate to bring eVTOLs — electric vertical takeoff and landing vehicles — to market.

What doesn’t exist is a place to land them. The promise of urban air mobility is the promise of superlative convenience — a trip to the airport that would regularly take 90 minutes door-to-door whittled down to 10. For this promise to be realized, eVTOL landing points must be as accessible as taxi lines — think a five-minute walk (or one-minute elevator ride) from your office.

And sure, we’ve seen office buildings and hospitals on the outer edges of cities build heliports on their roofs. But the truth is, helicopters’ external rotors make them too noisy and too dangerous to land in tight spaces. Heliports have to be on the outer borders of cities — they need the extra space for safety (and noise) concerns.

Urban flight today

I have over 25 years of experience as a helicopter pilot. I know that urban air travel is nothing new. However, noise ordinances, space constraints and safety measures needed to make commercial helicopter flights viable have largely limited their use.

Existing VTOLs are much better designed for repeated commercial use, but they still don’t solve for noise. Most importantly, they do not eliminate the risks associated with external moving mechanical components and large wingspans.

These VTOLs also require far more space for takeoff and landing — which means intracity travel won’t be feasible without massive infrastructure investments, a fact pointed out by countless urban air mobility analysts and even folks at NASA. For it to work, cities would have to turn a huge percentage of their rooftops into miniairports, which would require years of disruption.

That isn’t the only option, though. Engineers are developing compact VTOLs with the agility of a helicopter and the size and relative safety (and interior machinery) of a car. These vehicles have the best chance to prove the viability of VTOLs. Imagine an ambulance arriving at the scene of an accident via air — landing in a parking-spot-sized space directly next to the accident — and swiftly moving the injured to a hospital in another part of the city.

Instead of looking to airports as the model for advanced air mobility, we should look to metro hubs that are accessible to everyone, with multiple departures and arrivals per day. However, this kind of passenger turnover only works at scale if there are numerous eVTOLs coming and going — just like a train station. This just isn’t feasible unless most of those eVTOLS are smaller than a passenger van.

Consider the ground, not just the skyline

Decades from now, city infrastructure will look very different. Vertiports within the city that can accommodate VTOLs of all sizes and distance capabilities will be commonplace in the modern metropolis. But these train stations for the sky require enormous vision and forward thinking on the part of city planners, civil engineers, policymakers and politicians, as well as citizens demanding alternative forms of transportation.

Current prototypes require dramatic resurfacing of the city’s skyline for safe takeoff and landing at scale, but it does not have to be this way. The street infrastructure required to bring VTOLs to city dwellers is too often overlooked.

Cities need to consider the spaces and cases for VTOLs. We need to think about the city as we know it now — how can we design a vehicle that fits naturally within the environment that already exists? Is there space to create a vehicle that coexists with the city’s people as well as its birds? One quiet enough that anyone would welcome on their apartment rooftop?

Big vision, small footprint

A smaller eVTOL isn’t just more agile and safer in dense spaces, it also allows for more vehicles per square foot, more flights per hour, and more people moved across town per day in a more affordable way.

Before we can build the vertiport of the future, we must first use what already exists today to prove the case for urban air mobility. We need to be deliberate in matching the technology to the infrastructure that city dwellers know and expect, not vice versa. This means an eco-friendly VTOL that can land not just on helipads, piers and parking lots, but literally anywhere an SUV might fit.

Size alone is not enough. We must think about alternative fuel sources. Batteries are one, but they’re also inefficient, and the ecological impact of battery production, storage and disposal make them far from perfect. Some VTOL developers have proposed hydrogen as a fuel source; I welcome this and encourage more investment toward innovation in hydrogen-powered aviation. The larger commercial aviation market is already taking big steps toward hydrogen-fueled airliners, and VTOL developers have no excuse not to do the same.

Finally, we have to start with a truly efficient VTOL that can have the biggest impact in the shortest time frame, and where time is of the essence: Emergency services. The promise of flying cars to improve people’s lives must be made apparent and available in the most essential of use cases first.

This will not only make an immediate, positive impact, it will also help pave the way for acceptance, infrastructure and large-scale commercialization for VTOLs of every size and use case. Indeed, it will realize the dream of the flying car.

News: Gillmor Gang: Time Delay

• August 6, 2021
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Writing our way out of the place we’re in is tricky. The words come easily enough, each measured for its emotional weight in the stream of issues we face. It’s possible this paragraph will disappear as I find my ground. Mandates, Cuomo, Olympic mental gymnastics, where we were two weeks ago and how it relates

Writing our way out of the place we’re in is tricky. The words come easily enough, each measured for its emotional weight in the stream of issues we face. It’s possible this paragraph will disappear as I find my ground. Mandates, Cuomo, Olympic mental gymnastics, where we were two weeks ago and how it relates to right now. Let’s triangulate: forget Trump. Forget the Republicans and progressive Democrats who together slow down passage of the bipartisan infrastructure bill. Forget the evasions and half truths, the talking points to fill up the airtime until the actual rubber meets the road.

Don’t forget the brave athletes who dare to fail for the greater safety of their colleagues. Celebrate the public servants and the difficult personal choices that lead us to honesty, empathy, resolute choices that will draw distinctions between malignant fraud and real outcomes at the ballot box. If politicians refuse to answer questions, draft laws to weed them out of the process itself. Hold the media to the fire they pretend to examine in their choices of coverage, debate, and commercial breaks.

We’ve been having an argument about the time delay between recording a show and releasing it here on Techcrunch in a post-produced fashion with music added, Sneak Peeks produced to promote the show, and a post somehow related to the context of the show two or so weeks ago. In generating the text, I’ve noticed the time delay serves a useful purpose of diluting the realtime urgency of the conversation with what ends up being a healthy dose of context derived from what actually happened. The news is always rendered as the first draft of history, but the constant need for ratings creates this underlying pressure to convert stories from insight to controversial clickbait.

Marshalled through this take-the-foot-off-the-gas filter, the black and white becomes more shades of gray, less subject to the attitudes of the individual Gang members and more attuned to the sense of the group as a whole. Take the perennial struggle between social media giants and antitrust pressure to regulate the worst aspects of the social storm. One side decries attempts to rein in the success of these companies in building audiences and unparalleled power in the marketplace — a version of “If it’s not broke, don’t fix it.” The other side says it is indeed broke, and needs to be fixed by breaking up these new monopolies born of user satisfaction with the stream of commentary, sarcasm, and family news. Or perhaps the battle lines are drawn around individual rights versus the collective good, as with the struggle to get COVID under control via vaccination mandates. In the middle between these hard-coded partisan stances is potentially something gentler than being right and more powerful in its sense of compromise.

In the case of mandates, the subject comes up every show. The immediate news may be New York City’s new rules governing vaccinated access to indoor restaurants, gyms, and entertainment events, but the larger abstraction is the divide between the federal government’s lack of power to effect a countrywide mandate and the politics of governors in the Red states pushing back on any mandates, most egregiously outlawing local governments from protecting their citizens from the impact of the unvaccinated. Two weeks ago, nothing seemed possible to alleviate any aspect of the crisis. Today, the New York move may encourage more people to act now to protect themselves; the data shows a doubling of new vaccinations in the most impacted states. In turn, the media includes this promising data in their stories, pushing the more partisan memes to the edges of the coverage. The net result is a more flexible narrative that speaks to the old fashioned idea that government can actually get some things done, which in turn helps promote less of the distrust that fuels many of the vaccine hesitant.

Getting back to the new normal drives most of the mandate discussion. The pandemic’s acceleration of digital transformation seems to reflect a growing understanding that we’re not going back to post pandemic anytime soon. Instead, there’s the realization that what we’re thinking of as survival is a foreshadowing of how we’ll live both at work and at home. We talk about our creative heroes on the show, many of whom became household names streaming through the stages of public performance and media networks. Streaming has roiled both Hollywood and the news networks, whose business models and value propositions are under attack from the tech social networks. Facebook talks of video now consuming more than 50 percent of time on its network. Amazon’s advertising revenue is growing rapidly as a counter to Google and Facebook’s control of the advertising markets. Digital advertising is consuming the linear broadcast Upfronts marketplace.

We talk often about the creator economy, a self-important waving of the media red flag in the face of the mainstream media’s bull. The Information, a subscription-fueled tech journal, looks like what the newsletter startups Substack and Twitter Revue will look like when or if they grow up. The social audio Clubhouse clones offer a similar promise of escaping the long tail into viable competition for the Fox, CNN, and MSNBCs of the realigning media companies. On each end of the spectrum, the promise of success runs into the overblown reality of too many hours in search of useful differentiation or unrealistic odds of escaping the noisy underbelly of unprofessional media.

If the numbers don’t seem to add up for the creators, neither do they for the social networks. Once the feature wars settle down, you’ll see a fragmented array of star writers on Substack and Facebook and very little outlet for influencers and talent to bubble up. Corporate adoption of these tools might prove a growth opportunity for enterprise versions. Is that enough to keep tech in the game? Maybe two weeks from now we’ll know.

from the Gillmor Gang Newsletter

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, July 23, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.

News: Daily Crunch: SpaceX’s stacked Starship and Super Heavy booster taller than Great Pyramid of Giza

• August 6, 2021
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Hello friends and welcome to Daily Crunch, bringing you the most important startup, tech and venture capital news in a single package.

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for August 6, 2021. We made it to Friday. High-fives all around. If you own stocks or cryptos, you are wrapping up the week on a high. Crypto prices are rising while some indices are hitting records.

Before we get into the news, don’t forget that TechCrunch is launching another newsletter! The first edition of This Week in Apps by our own Sarah Perez launches Saturday morning and is the place to go for all of your app news goodness. Be sure to sign up here.

Now, the news. — Alex

The TechCrunch Top 3

• SpaceX builds 400-foot rocket: If you were concerned that childish jokes regarding billionaire rocketry were about to die down, fear not: SpaceX has stacked its Starship vehicle on top of a Super Heavy booster. That means a very tall rocket with much oomph. This is the first time that Starship and Super Heavy have come together.
• The changing value of insurtech startups: A few weeks back, TechCrunch asked if the market should be concerned about insurtech valuations. Then they took another hit. We tackled the topic in the wake of Hippo’s public listing, deciding that most public insurtech companies are wealthy enough in cash terms to not sweat the declines. Too much.
• What to expect from Samsung’s next hardware event: Samsung’s impending Unpacked event may be, well, packed. We could see a new Galaxy Fold phone, new watches, wearables from a Google partnership and more. TechCrunch will be covering the event this August 11, so stick close to the site for more.

Startups/VC

• DesignOps is the new DevOps: That’s our take on zeroheight and its new $10 million Series A round. The startup “does for UX what DevOps platforms like GitHub do for building and shipping code, providing a central place to document and manage UX components,” CEO Jerome de Lafargue told TechCrunch.
• 500 Startups backs the Carta for Africa: Carta is an important part of the U.S. startup technology stack, helping keep cap tables and shares in proper order. As Africa’s startup scene expands, it will need something similar. And Raise is building it. Per the startup, most startup equity on the continent is still tracked with paper. It’s time for that to change.
• Healthcare provider API raises $17M: APIs to help companies manage their providers are not new. AgentSync is building something in the space for insurance brokers. Verifiable is pursuing a similar model, but focused on healthcare workers. As with Rapid, what is being replaced are manual processes. Software is good at many things, but alleviating humans from certain types of bullshit work is one of them.
• Card-issuing APIs are coming to Africa: Thanks to the first Zambian company to get into Y Combinator, I hasten to add. The startup in question, Union54, was first launched in 2015 as Zazu, a neobank. But it found the card-issuing space so punitive to work with that it took on that problem, rebranding along the way. Card issuing is a big market in the U.S. and Latin America. Let’s see how it performs in the startup space on a new continent.
• To close out our startup coverage today, TechCrunch has a good and long look at the burgeoning startup hub of Utrecht, that bit of the Netherlands that always looks super gorgeous when you see a photo of it. Enjoy!

Craft your pitch deck around ‘that one thing that can really hook an investor’

We frequently run articles with advice for founders who are working on pitch decks. It’s a fundamental step in every startup’s journey, and there are myriad ways to approach the task.

Michelle Davey of telehealth staffing and services company Wheel and Jordan Nof of Tusk Venture Partners appeared on Extra Crunch Live recently to analyze Wheel’s Series A pitch.

Nof said entrepreneurs should candidly explain to potential investors what they’ll need to believe to back their startup.

” … It takes a lot of guesswork out of the equation for the investor and it reorients them to focus on the right problem set that you’re solving,” he said.

“You get this one shot to kind of influence what they think they need to believe to get an investment here … if you don’t do that … we could get pretty off base.”

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

Big Tech Inc.

• Amazon gets win in Indian Supreme Court: Not happy with a planned sale of Indian retail and warehouse chain Future Group to Reliance Retail, the leader in its category, Amazon won a legal reprieve this week when India’s Supreme Court said that a ruling in Singapore to halt the transaction was valid in the country. Seeing a U.S. tech giant argue against consolidation of players in a market may sound ironic, or even hypocritical, but in business it’s better to simply remember that corporations are amoral by nature at best.
• Drama costs at Velodyne rise: Lidar shop Velodyne, a company that went public via a SPAC, is still paying out to cover the price of internal drama and some executive departures. TechCrunch dug into the company’s latest earnings here.

TechCrunch Experts: Growth Marketing

Image Credits: SEAN GLADWELL (opens in a new window) / Getty Images

We’re reaching out to startup founders to tell us who they turn to when they want the most up-to-date growth marketing practices. Fill out the survey here.

Read one of the testimonials we’ve received below!

Marketer: Tate Lowry, Ranq

Recommended by: Anonymous

Testimonial: “They have been on my radar since their co-owner sold the e-comm website Here Pup. Tate and Perrin knew exactly what my site needed to ensure a realistic growth. They didn’t blow up any promises; they didn’t nickel and dime me along the way. Honest and genuine agencies that actually map out how they can and will help you are far and few between.”

News: Growth roundup: Recruiting a team, writing successful newsletters, 14 questions for paid search ads

• August 6, 2021
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“The growth industry is definitely maturing. Less hacks, more teams, more focus on velocity,” Ward van Gasteren, founder of Grow with Ward told us in an interview this week. “Everybody within the field is getting to know the best practices very quickly and implementing them even quicker. So then what?” Working with a growth professional

“The growth industry is definitely maturing. Less hacks, more teams, more focus on velocity,” Ward van Gasteren, founder of Grow with Ward told us in an interview this week. “Everybody within the field is getting to know the best practices very quickly and implementing them even quicker. So then what?”

Working with a growth professional can alleviate some of the pressure on founders who are finding their way. In our discussion, van Gasteren spoke about the importance of knowledge — qualitative feedback, systemic approaches and when/how to experiment.

This week in TechCrunch’s growth marketing roundup, you’ll also find two guest columns from Stewart Hillhouse and Sam Richard’s take on how to hire a growth team. Below you’ll find recommendations of growth marketers from the community. If there’s a growth marketer that you’ve enjoyed working with, please fill out our survey.

Marketer: Maksym Podsolonko, Fractional CMO
Recommended by: Anonymous
Testimonial: “They provide hands-on marketing support and take full ownership of the marketing function. Ideal for companies that don’t need a full-time CMO.”

Marketer: Tate Lowry, Ranq
Recommended by: Anonymous
Testimonial: “They have been on my radar since their co-owner sold the e-comm website Here Pup. Tate and Perrin knew exactly what my site needed to ensure a realistic growth. They didn’t blow up any promises, they didn’t nickel and dime me along the way. Honest and genuine agencies that actually map out how they can and will help you are far and few between.”

 

Help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.

 

Demand Curve: Tested tactics for growing newsletters: Stewart Hillhouse, senior content lead at Demand Curve, talks through tactics for email newsletters. Hillhouse tells us that newsletters have nearly 40x ROI, but you have to work in order to achieve that. This article discusses the 60% rule for pop-ups, the strategy behind email timing and the importance of quality over quantity. Hillhouse mentions, “We’ve seen very little correlation between volume of emails and the resulting conversion rate.”

(Extra Crunch) Demand Curve: Questions you need to answer in your paid search ads: Hillhouse also wrote an Extra Crunch article this week about the 14 questions you should be answering with your paid search ads. One question he mentions revolves around acceptance and how “Going shopping in real life is a social activity. Shoppers will peer into the carts of others, compare their tastes and ask those with them for input.” Let’s be honest — we’ve all done it. Hillhouse answers how this behavior can be replicated for online shopping.

(Extra Crunch) How to hire and structure a growth team: Sam Richard, senior director of growth at OpenView, provides insights on what questions you should be asking when you’re hiring a growth leader. Richard says, “A strong growth-minded hire will already have a feel for benchmarks and should be able to identify which growth lever in your customer journey needs the most help.”

How Ward van Gasteren thinks about growth hacking today: In this interview, Ward van Gasteren spoke about common misconceptions regarding growth hacking, like how it’s assumed to be a perfect approach. But, we were told, “The hard data that you see in your analytics tools can only tell you what is slowing down your growth … not why your growth slows down there.”

Is there a startup growth marketing expert that you want us to know about? Let us know by filling out our survey.

News: Extra Crunch roundup: build a founding team, choose a VC and recruit your board

• August 6, 2021
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Starting with the assumption that 90% of startups will fail and the most successful ones take an average of six years to IPO, founders must make careful decisions about whom they invite to join the core team.

Assembling a startup team is harder than assembling 10 IKEA dressers, and the stakes are much, much higher.

Starting with the assumption that 90% of startups will fail and the most successful ones take an average of six years to IPO, founders must make careful decisions about whom they invite to join the core team.

Will that stellar engineer become a great CTO? Should your product person be opinionated, or a team player? Are you even the best choice for CEO?

ThoughtSpot CEO Sudheesh Nair shared some of his thoughts about building a sturdy leadership team and drafted a thorough checklist for entrepreneurs who are putting a crew together. His initial advice?

“Investors love founder-CEOs, and founders are often fantastic candidates for this role. But not everyone can do it well, and more importantly, not everyone wants to.”

In a related article, Gregg Adkin, VP and managing director at Dell Technologies Capital, shared the framework he’s developed for helping founders set up their board.

Choosing the right mix of people can impact everything from fundraising to hiring: “Investors often ask founders about their board [because] it says a lot about their character, their judgment and their willingness to be challenged,” he writes.

Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription

Miranda Halpern spoke to Amsterdam-based coach Ward van Gasteren for our latest growth marketing interview, which is free to read.

In their discussion, van Gasteren addressed misconceptions about growth hacking, the mistakes most startups are likely to make, and the distinctions he draws between growth hacking and growth marketing:

“Growth hacking is great to kickstart growth, test new opportunities and see what tactics work,” he tells us.

“Marketers should be there to continue where the growth hackers left off: Build out those strategies, maintain customer engagement, and keep tactics fresh and relevant.”

Thanks very much for reading Extra Crunch this week; I hope you have a great weekend.

Walter Thompson
Senior Editor, TechCrunch

@yourprotagonist

What Square’s acquisition of Afterpay means for startups

Image Credits: sureeporn / Getty Images

In his first column since returning to TechCrunch, reporter Ryan Lawler considered the potential ripples Square’s purchase of Afterpay may send across the pond of buy now, pay later startups.

For commentary and perspective, he interviewed:

• Dan Rosen, founder and general partner, Commerce Ventures
• Jake Gibson, founding partner, Better Tomorrow Ventures
• TX Zhuo, partner, Fika Ventures
• Matthew Harris, partner, Bain Capital Ventures

The investors he spoke to agreed that deferring payments helps drive e-commerce, “but scale matters and long-term margins look slim for BNPL startups,” reports Ryan.

Enterprise AI 2.0: The acceleration of B2B AI innovation has begun

Image Credits: Ivan Bajic (opens in a new window) / Getty Images

Businesses have been deploying AI solutions for 20 years, but few have achieved the outstanding gains in efficiency and profitability promised when the technology first appeared.

But there’s a burgeoning new generation of enterprise AI, Eshwar Belani, an operating partner at Symphony AI, writes in a guest column.

“Companies on the leading edge of AI innovation have advanced to the next generation, which will define the coming decade of big data, analytics and automation — Enterprise AI 2.0.”

Embodied AI, superintelligence and the master algorithm

Image Credits: Joan Cros Garcia-Corbis (opens in a new window) / Getty Images

Over the next 18 months, one technologist says the increased adoption of embodied artificial intelligence will open a path to superintelligence — incredibly powerful software that dwarfs anything the human mind could produce.

“All the crazy Boston Dynamics videos of robots jumping, dancing, balancing and running are examples of embodied AI,” says Chris Nicholson, founder and CEO of Pathmind, which uses deep reinforcement learning to optimize industrial operations and supply chains.

“The field is moving fast and, in this revolution, you can dance.”

A lot of cash and little love: An insurtech story

Image Credits: Nigel Sussman (opens in a new window)

The Exchange looks at the valuations of public insurtech companies and considers what that means for startups — but from a slightly different perspective.

“We’d typically riff on the new values of public neoinsurance companies and use that data to work our way into a guess concerning what the price declines might mean for related startups,” Alex Wilhelm writes. “Taking public-market data and using it to better understand private markets is pretty much the national pastime of this column.

“Not today.”

5 factors founders must consider before choosing their VC

Image Credits: Anastassiia (opens in a new window) / Getty Images

The fact that the globe is awash in venture capital should not be news to readers of this newsletter.

For founders, it means more than just fat checks, Kunal Lunawat, the co-founder and managing partner of Agya Ventures, writes in a guest column.

“Founders would be well served to go back to the basics and focus on the principles of fundraising when determining who sits on their cap table.”

Neobanks’ moves toward profitability could be the path to public markets

Image Credits: Nigel Sussman (opens in a new window)

Alex Wilhelm checks in on results from Starling Bank and Monzo to see what the neobanks’ most recent financial figures say about the state of neobanks overall.

“Although some neobanks are managing to clean up their ledgers and work toward profits — or reach profitability — not all are in the black,” he notes.

But among those that are?

“At least a portion of the neobanking world is financially stable enough to consider public offerings.”

Founders must learn how to build and maintain circles of trust with investors

Image Credits: MicroStockHub (opens in a new window)/ Getty Images

The red-hot venture capital market may give founders lots of investors to choose from, but the most important thing (if you can be choosy) is being able to trust and rely on your investors, Ripple Ventures’ Matt Cohen and True’s Tony Conrad write in a guest column.

“This … new dynamic is forcing founders to be extremely selective about exactly who is sitting around their mentorship table,” they write.

“It’s simply not possible to have numerous deep and meaningful relationships to extract maximum value at the early stage from seasoned investors.”

What’s the board’s role in an early-stage startup?

Image Credits: A-Digit (opens in a new window) / Getty Images

Assembling a board of directors is not merely about finding individuals who can aid your early-stage journey, Gregg Adkin, the vice president and managing director at Dell Technologies Capital, writes in a guest column.

The composition of the board can also impact your fundraising.

“Investors often ask founders about their board [because] it says a lot about their character, their judgment and their willingness to be challenged,” he writes.

Adkins offers a framework he calls “SPIFS” — for strategy, people, image, finance and systems for compliance — to aid founders in setting up a board.

Do bronze medals ever make sense for unicorns?

Image Credits: Nigel Sussman (opens in a new window)

In the wake of Deliveroo’s plans to abandon the Spanish market after the country passed legislation requiring companies dependent on gig workers to hire employees, Alex Wilhelm wondered about the battle for smaller markets and whether third place is sufficient.

“One company exiting a market is not a big deal, but we were curious about Deliveroo’s comments regarding the need for market leadership — or something close to it — to warrant continued investment,” he writes for The Exchange.

“Is this the common reality for startups battling for market position, no matter if those markets are cities or countries?”

News: Crypto community slams ‘disastrous’ new amendment to Biden’s big infrastructure bill

• August 6, 2021
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Biden’s major bipartisan infrastructure plan struck a rare chord of cooperation between Republicans and Democrats, but changes it proposes to cryptocurrency regulation are tripping up the bill. The administration intends to pay for $28 billion of its planned infrastructure spending by tightening tax compliance within the historically under-regulated arena of digital currency. That’s why cryptocurrency

Biden’s major bipartisan infrastructure plan struck a rare chord of cooperation between Republicans and Democrats, but changes it proposes to cryptocurrency regulation are tripping up the bill.

The administration intends to pay for $28 billion of its planned infrastructure spending by tightening tax compliance within the historically under-regulated arena of digital currency. That’s why cryptocurrency is popping up in a bill that’s mostly about rebuilding bridges and roads.

The legislation’s vocal critics argue that the bill’s effort to do so is slapdash, particularly a bit that would declare anyone “responsible for and regularly providing any service effectuating transfers of digital assets” to be a broker, subject to tax reporting requirements.

While that definition might be more straightforward in a traditional corner of finance, it could force cryptocurrency developers, companies and even anyone mining digital currencies to somehow collect and report information on users, something that by design isn’t even possible in a decentralized financial system.

Now, a new amendment to the critical spending package is threatening to make matters even worse.

Unintended consequences

In a joint letter about the bill’s text, Square, Coinbase, Ribbit Capital and other stakeholders warned of “financial surveillance” and unintended impacts for cryptocurrency miners and developers. The Electronic Frontier Foundation and Fight for the Future, two privacy-minded digital rights organizations, also slammed the bill.

Following the outcry from the cryptocurrency community, a pair of influential senators proposed an amendment to clarify the new reporting rules. Finance Committee Chairman Ron Wyden (D-OR) pushed back against the bill, proposing an amendment with fellow finance committee member Pat Toomey (R-PA) that would modify the bill’s language.

The amendment would establish that the new reporting “does not apply to individuals developing block chain technology and wallets,” removing some of the bill’s ambiguity on the issue.

“By clarifying the definition of broker, our amendment will ensure non-financial intermediaries like miners, network validators, and other service providers—many of whom don’t even have the personal-identifying information needed to file a 1099 with the IRS—are not subject to the reporting requirements specified in the bipartisan infrastructure package,” Toomey said.

Wyoming Senator Cynthia Lummis also threw her support behind the Toomey and Wyden amendment, as did Colorado Governor Jared Polis.

“Picking winners and losers”

The drama doesn’t stop there. With negotiations around the bill ongoing — the text could be finalized over the weekend — a pair of senators proposed a competing amendment that isn’t winning any fans in the crypto community.

That amendment, from Sen. Rob Portman (R-OH) and Mark Warner (D-VA), would exempt traditional cryptocurrency miners who participate in energy-intensive “proof of work” systems from new financial reporting requirements, while keeping those rules in place for those using a “proof of stake” system. Portman worked with the Treasury Department to author the cryptocurrency portion of the original infrastructure bill.

Rather than requiring an investment in computing hardware (and energy bills) capable of solving increasingly complex math problems, proof of stake systems rely on participants taking a financial stake in a given project, locking away some of the cryptocurrency to generate new coins.

Proof of stake is emerging as an attractive, climate-friendlier alternative that could reduce the need for heavy computing and huge amounts of energy required for proof of work mining. That makes it all the more puzzling that the latest amendment would specifically let proof of work mining off the hook.

Some popular digital currencies like Cardano are already built on proof of stake. Ethereum, the second biggest cryptocurrency, is in the process of migrating from a proof of work system to proof of stake to help scale its system and reduce fees. Bitcoin is the most notable digital currency that relies on proof of work.

The Warner-Portman amendment is being touted as a “compromise” but it’s not really halfway between the Wyden-Toomey amendment and the existing bill — it just introduces new problems that many crypto advocates view as a fresh existential threat to their work.

Prominent members of the crypto community including Square founder and Bitcoin booster Jack Dorsey have thrown their support behind the Wyden-Lummis-Toomey amendment while slamming the second proposal as misguided and damaging.

The executive director of Coincenter, a crypto think tank, called the Warner-Portman amendment “disastrous.” Coinbase CEO Brian Armstrong echoed that language. “At the 11th hour @MarkWarner has proposed an amendment that would decide which foundational technologies are OK and which are not in crypto,” he tweeted. “… We could find ourselves with the Senate deciding which types of crypto will survive government regulation.”

Unfortunately for the crypto community — and the promise of the proof of stake model — the White House is apparently throwing its weight behind the Warner-Portman amendment, though that could change as eleventh hour negotiations continue.

News: Indiegogo’s CEO on how crowdfunding navigated the pandemic

• August 6, 2021
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‘If you take the leap that the pandemic happened because there’s just a lot of things happening in the environment, it means we have to build the future that we want.’

Andy Yang joined Indiegogo at a turbulent time. As the crowdfunding platform’s then-CEO stepped aside for personal reasons, the service also reportedly grappled with layoffs. Coming on board after a stretch with Reddit, the new CEO would have less than a year at the helm before COVID-19 turned the globe upside down.

Now 13 years old, the San Francisco-based site matured alongside the world of online crowdfunding. And, certainly, Indiegogo had a front-row seat for all of the ups and downs. Indiegogo introduced several million-dollar campaigns, but the platform has often suffered from comparisons to Kickstarter, a service that has become synonymous with the category for many.

Yang sat down to discuss how Indiegogo has changed under his tenure, how crowdfunding has evolved and what both will look like in a post-pandemic world.

(This interview has been edited for length and clarity.)

What was your primary objective coming on as CEO?

I was at Reddit doing core product, and when Indiegogo’s board and founders reached out, it was really around, “Hey, we would love somebody with product experience, a background in community.” What was going on in Indiegogo was really an evaluation of, “What’s our core values?” When I took the saddle and the reigns, it was really focusing on that core of who we are, what segments do we want to go after, and where do we want to focus. Where do we want to focus our product?

From that perspective, we’ve been really heads-down for the last two years, just working on ourselves, internally, and focusing on the core — what we’re terming “bringing the crowd back in crowdfunding.” I think a lot of the platforms have been very transactional in nature, and so I think backers and consumers and users have been trained by Amazon to click a button and get things two hours later. The premise of crowdfunding is very different.

You may or may not get this perk delivered in the time frame that you’re expecting, and to help educate backers and the community around that is really core to who we are. We’ve been through the last two years with COVID, but we’ve been profitable since I’ve joined, which is huge. We can control our own destiny and really take the time to do things right and invest in areas like trust and safety, like community, that we really wanted to.

The company wasn’t profitable when you joined?

We weren’t profitable. I enjoyed and then we cut to profitability, or at least kind of a neutral state, and with any kind of change in leadership, some tenured folks opted out, and we basically became a new team overnight to kind of re-found the company, and we’ve been slowly adding people over the last couple years, but always with that eye on profitability and controlling our own destiny.

Beyond people changing roles, what had to happen in order for the company to become profitable?

Really doubling down on making sure that we understood our sales pipeline and making sure that, from a supply perspective, that we had a number of campaigns from across a number of categories. Obviously, our bread and butter is what we call tech and innovation, consumer electronics hardware, but also seeing what other categories that we can lean into. We’re definitely strong in comics, travel, outdoors, and what can we do from expanding our wedge and our categories in different areas that we’re seeing growth. I think a trend that we’re currently seeing is a lot of green tech. Just trying to understand what categories are growing, where our brand resonates with entrepreneurs and backers.

That’s what needed to happen — just making sure that we had adequate supply on the platform, and also just from the backer side, we had not traditionally focused on the backer side. We had heavily focused on the supply side, but really starting to, again, return back to the crowd in crowdfunding, leaning on my Reddit experience, just making sure that we can engage the community in new and interesting ways.

News: Kickstarter’s CEO on the future of crowdfunding

• August 6, 2021
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‘What we find is the backers have a deep desire and an interest to be a part of what’s happening on the journey. To feel deeply connected is part of what you get as a backer of a creative project.’

Kickstarter announced on Wednesday that backers have pledged $6 billion to more than 200,000 projects over the course of the crowdfunding site’s history. The milestone comes a little over a year after the platform hit the $5 billion mark.

A matter of weeks before the company hit that last massive round number, however, it revealed starker news. Kickstarter reduced its staff by 39%, through a combination of layoffs and buyouts, as newly minted CEO Aziz Hasan noted a 35% drop in new projects. The company wasn’t alone, certainly, in suffering major setbacks in the face of a pandemic, but that likely didn’t cushion the blow of a downturn with “no clear sign of rebound,” according to the executive.

With another $1 billion pledge in the intervening 15 months, however, it’s probably safe to say that predictions of crowdfunding’s demise were somewhat premature. Like most of the rest of us, the pandemic has spurred a reprioritization and recentering, and the service that has long been synonymous with the category looked to new methods of engagement.

After a dozen years of being the face of crowdfunding, plenty of question marks still remain. The past decade has seen something of a hype bubble for the process, and for some, the shine has worn off a bit, courtesy of undelivered gifts and unfinished campaigns. What will the next decade hold for crowdfunding’s biggest name? And will the pandemic fundamentally transform how people back projects on the internet?

We sat down with Hasan to discuss the past year, the company’s big milestone and the future of crowdfunding.

(This interview has been edited for length and clarity.)

When you took the role of CEO in 2019, what changes did you feel like you needed to implement?

I’d really like to touch on the connection that I’ve always felt with Kickstarter. It, for me personally, is a place where I feel like both my personal passion and what we do on a day-to-day basis came together really well. At one of the first all-hands when I got hired, I said what’s beautiful about the job that I get to do is that every evening I go home and I illustrate. And so I get to feel the hard pain, a lot of the insecurity and the uncertainty that comes with being a creator.

I come in every morning and I say, “OK, how am I going to fix that? What can I do to make that process better, make that easier?” And so that for me was just this underlying motivation. This is what gets me out of bed in the morning. The thought to me was, “What are the ways in which we have the greatest strength in helping creators find the funding that they need?”

I think one of the greatest opportunities that I really see is that the backers are such an incredible part of this puzzle, and for us, for the longest time we really focused on the creator tools and really making sure that the creators have a way to share their project. What we’ve seen is that backers are such a tremendous part of this process and their ability to discover the joy, the fun, the curiosity that they feel through that process is such an important part of the experience as well. And so here’s a place where we can actually put some focus and some time and attention on what the backer experience looks like. And so that really has been a big mantra for me as we’ve been moving forward.

What does it mean to impact the backer experience? In the past two years, how has the backer experience changed?

One is just making it simpler and easier for backers to find projects that they would care about. And I think us being just a space where this stuff exists, I think just putting it out there as it is on a home page or through the creator that you know isn’t enough. And so there are a lot of channels that we’ve been using, particularly thinking about our emails and newsletters and these points of connection that we have with the backer over the course of their journey and actually introducing projects that they might like through that process. So we have a recommendation engine that we’ve been developing over the last few years that’s meant to help connect, make better connections based on either affinity, which you might like, or the way that you backed in the past or projects that you might’ve watched.

Early last year, Kickstarter went through a fairly large round of layoffs — 40%, according to reports. How did the company navigate the earliest days of the pandemic and what do you feel you’ve done to help right that ship?

What we saw in our platform was that creators just kind of off the bat had the same level of uncertainty everybody else was feeling. We saw a slowdown of projects and what we saw was about 40% of our pledge volume dipping. And as a result, there’s a lot of projects that fell off as a result of that. There were some very, very concerning times. The big thing that we thought about was, we need to make sure that our business is resilient for the future, make sure that we’re actually just set up operationally in a way that we can withstand uncertainty as it comes. Through that really tough time and then, kind of peeking out toward the end of 2020, the backers didn’t change their pattern of behavior. Even though creators were launching fewer projects during that really difficult time, what we saw was that the backers remained extremely eager to keep pushing forward and supporting creative work.

So things like our pledge rates and success rates remained quite high and that’s especially if you think about the games community, comics, publishing a number of these spaces where we’ve always seen strong engagement. That engagement actually continued through. About four or five months after that initial dip, we slowly started to see some of the creators come back online, because I think they also started to recognize that the backers are there. They haven’t changed their backing patterns. And so what that did for us is that started to give us a bit of understanding here that we should start to connect back to the creators and let them know that the backers are here.

News: $100M donation powers decade-long moonshot to create solar satellites that beam power to Earth

• August 6, 2021
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It sounds like a plan concocted by a supervillain, if that villain’s dastardly end was to provide cheap, clean power all over the world: launch a set of three-kilometer-wide solar arrays that beam the sun’s energy to the surface. Even the price tag seems gleaned from pop fiction: one hundred million dollars. But this is

It sounds like a plan concocted by a supervillain, if that villain’s dastardly end was to provide cheap, clean power all over the world: launch a set of three-kilometer-wide solar arrays that beam the sun’s energy to the surface. Even the price tag seems gleaned from pop fiction: one hundred million dollars. But this is a real project at Caltech, funded for a nearly a decade largely by a single donor.

The Space-based Solar Power Project has been underway since at least 2013, when the first donation from Donald and Brigitte Bren came through. Donald Bren is the chairman of Irvine Company and on the Caltech board of trustees, and after hearing about the idea of space-based solar in Popular Science, he proposed to fund a research project at the university — and since then has given over $100M for the purpose. The source of the funds has been kept anonymous until this week, when Caltech made it public.

The idea emerges naturally from the current limitations of renewable energy. Solar power is ubiquitous on the surface, but of course highly dependent on the weather, season, and time of day. No solar panel, even in ideal circumstances, can work at full capacity all the time, and so the problem becomes one of transferring and storing energy in a smart grid. No solar panel on Earth, that is.

A solar panel in orbit, however, may be exposed to the full light of the sun nearly all the time, and with none of the reduction in its power that comes from that light passing through the planet’s protective atmosphere and magnetosphere.

The latest prototype created by the SSPP, which collects sunlight and transmits it over microwave frequency.

“This ambitious project is a transformative approach to large-scale solar energy harvesting for the Earth that overcomes this intermittency and the need for energy storage,” said SSPP researcher Harry Atwater in the Caltech release.

Of course, you would need to collect enough energy that it’s worth doing in the first place, and you need a way to beam that energy down to the surface in a way that doesn’t lose most of it to the aforementioned protective layers but also doesn’t fry anything passing through its path.

These fundamental questions have been looked at systematically for the last decade, and the team is clear that without Bren’s support, this project wouldn’t have been possible. Attempting to do the work while scrounging for grants and rotating through grad students might have prevented its being done at all, but the steady funding meant they could hire long-term researchers and overcome early obstacles that might have stymied them otherwise.

The group has produced dozens of published studies and prototypes (which you can peruse here), including the lightest solar collector-transmitter made by an order of magnitude, and is now on the verge of launching its first space-based test satellite.

“[Launch] is currently expected to be Q1 2023,” co-director of the project Ali Hajimiri told TechCrunch. “It involves several demonstrators for space verification of key technologies involved in the effort, namely, wireless power transfer at distance, lightweight flexible photovoltaics, and flexible deployable space structures.”

Diagram showing how tiles like the one above could be joined together to form strips, then spacecraft, then arrays of spacecraft.

These will be small-scale tests (about 6 feet across), but the vision is for something rather larger. Bigger than anything currently in space, in fact.

“The final system is envisioned to consist of multiple deployable modules in close formation flight and operating in synchronization with one another,” Hajimiri said. “Each module is several tens of meters on the side and the system can be build up by adding more modules over time.”

Image Credits: Caltech

Eventually the concept calls for a structure perhaps as large as 5-6 kilometers across. Don’t worry — it would be far enough out from Earth that you wouldn’t see a giant hexagon blocking out the stars. Power would be sent to receivers on the surface using directed, steerable microwave transmission. A few of these in orbit could beam power to any location on the planet full time.

Of course that is the vision, which is many, many years out if it is to take place at all. But don’t make the mistake of thinking of this as having that single ambitious, one might even say grandiose goal. The pursuit of this idea has produced advances in solar cells, flexible space-based structures, and wireless power transfer, each of which can be applied in other areas. The vision may be the stuff of science fiction, but the science is progressing in a very grounded way.

For his part, Bren seems to be happy just to advance the ball on what he considers an important task that might not otherwise have been attempted at all.

“I have been a student researching the possible applications of space-based solar energy for many years,” he told Caltech. “My interest in supporting the world-class scientists at Caltech is driven by my belief in harnessing the natural power of the sun for the benefit of everyone.”

We’ll check back with the SSPP ahead of launch.