How to read fiction to build a startup

“The book itself is a curious artefact, not showy in its technology but complex and extremely efficient: a really neat little device, compact, often very pleasant to look at and handle, that can last decades, even centuries. It doesn’t have to be plugged in, activated, or performed by a machine; all it needs is light, a human eye, and a human mind. It is not one of a kind, and it is not ephemeral. It lasts. It is reliable. If a book told you something when you were 15, it will tell it to you again when you’re 50, though you may understand it so differently that it seems you’re reading a whole new book.”—Ursula K. Le Guin

Every year, Bill Gates goes off-grid, leaves friends and family behind, and spends two weeks holed up in a cabin reading books. His annual reading list rivals Oprah’s Book Club as a publishing kingmaker. Not to be outdone, Mark Zuckerberg shared a reading recommendation every two weeks for a year, dubbing 2015 his “Year of Books.” Susan Wojcicki, CEO of YouTube, joined the board of Room to Read when she realized how books like The Evolution of Calpurnia Tate were inspiring girls to pursue careers in science and technology. Many a biotech entrepreneur treasures a dog-eared copy of Daniel Suarez’s Change Agent, which extrapolates the future of CRISPR. Noah Yuval Harari’s sweeping account of world history, Sapiens, is de rigueur for Silicon Valley nightstands.

This obsession with literature isn’t limited to founders. Investors are just as avid bookworms. “Reading was my first love,” says AngelList’s Naval Ravikant. “There is always a book to capture the imagination.” Ravikant reads dozens of books at a time, dipping in and out of each one nonlinearly. When asked about his preternatural instincts, Lux Capital’s Josh Wolfe advised investors to “read voraciously and connect dots.” Foundry Group’s Brad Feld has reviewed 1,197 books on Goodreads and especially loves science fiction novels that “make the step function leaps in imagination that represent the coming dislocation from our current reality.”

This begs a fascinating question: Why do the people building the future spend so much of their scarcest resource — time — reading books?

Image by NiseriN via Getty Images. Reading time approximately 14 minutes.

Don’t Predict, Reframe

Do innovators read in order to mine literature for ideas? The Kindle was built to the specs of a science fictional children’s storybook featured in Neal Stephenson’s novel The Diamond Age, in fact, the Kindle project team was originally codenamed “Fiona” after the novel’s protagonist. Jeff Bezos later hired Stephenson as the first employee at his space startup Blue Origin. But this literary prototyping is the exception that proves the rule. To understand the extent of the feedback loop between books and technology, it’s necessary to attack the subject from a less direct angle.

David Mitchell’s Cloud Atlas is full of indirect angles that all manage to reveal deeper truths. It’s a mind-bending novel that follows six different characters through an intricate web of interconnected stories spanning three centuries. The book is a feat of pure M.C. Escher-esque imagination, featuring a structure as creative and compelling as its content. Mitchell takes the reader on a journey ranging from the 19th century South Pacific to a far-future Korean corpocracy and challenges the reader to rethink the very idea of civilization along the way. “Power, time, gravity, love,” writes Mitchell. “The forces that really kick ass are all invisible.”

The technological incarnations of these invisible forces are precisely what Kevin Kelly seeks to catalog in The Inevitable. Kelly is an enthusiastic observer of the impact of technology on the human condition. He was a co-founder of Wired, and the insights explored in his book are deep, provocative, and wide-ranging. In his own words, “When answers become cheap, good questions become more difficult and therefore more valuable.” The Inevitable raises many important questions that will shape the next few decades, not least of which concern the impacts of AI:

“Over the past 60 years, as mechanical processes have replicated behaviors and talents we thought were unique to humans, we’ve had to change our minds about what sets us apart. As we invent more species of AI, we will be forced to surrender more of what is supposedly unique about humans. Each step of surrender—we are not the only mind that can play chess, fly a plane, make music, or invent a mathematical law—will be painful and sad. We’ll spend the next three decades—indeed, perhaps the next century—in a permanent identity crisis, continually asking ourselves what humans are good for. If we aren’t unique toolmakers, or artists, or moral ethicists, then what, if anything, makes us special? In the grandest irony of all, the greatest benefit of an everyday, utilitarian AI will not be increased productivity or an economics of abundance or a new way of doing science—although all those will happen. The greatest benefit of the arrival of artificial intelligence is that AIs will help define humanity. We need AIs to tell us who we are.”

It is precisely this kind of an AI-influenced world that Richard Powers describes so powerfully in his extraordinary novel The Overstory:

“Signals swarm through Mimi’s phone. Suppressed updates and smart alerts chime at her. Notifications to flick away. Viral memes and clickable comment wars, millions of unread posts demanding to be ranked. Everyone around her in the park is likewise busy, tapping and swiping, each with a universe in his palm. A massive, crowd-sourced urgency unfolds in Like-Land, and the learners, watching over these humans’ shoulders, noting each time a person clicks, begin to see what it might be: people, vanishing en masse into a replicated paradise.”

Taking this a step further, Virginia Heffernan points out in Magic and Loss that living in a digitally mediated reality impacts our inner lives at least as much as the world we inhabit:

“The Internet suggests immortality—comes just shy of promising it—with its magic. With its readability and persistence of data. With its suggestion of universal connectedness. With its disembodied imagines and sounds. And then, just as suddenly, it stirs grief: the deep feeling that digitization has cost us something very profound. That connectedness is illusory; that we’re all more alone than ever.”

And it is the questionable assumptions underlying such a future that Nick Harkaway enumerates in his existential speculative thriller Gnomon:

“Imagine how safe it would feel to know that no one could ever commit a crime of violence and go unnoticed, ever again. Imagine what it would mean to us to know—know for certain—that the plane or the bus we’re travelling on is properly maintained, that the teacher who looks after our children doesn’t have ugly secrets. All it would cost is our privacy, and to be honest who really cares about that? What secrets would you need to keep from a mathematical construct without a heart? From a card index? Why would it matter? And there couldn’t be any abuse of the system, because the system would be built not to allow it. It’s the pathway we’re taking now, that we’ve been on for a while.” 

Machine learning pioneer, former President of Google China, and leading Chinese venture capitalist Kai-Fu Lee loves reading science fiction in this vein — books that extrapolate AI futures — like Hao Jingfang’s Hugo Award-winning Folding Beijing. Lee’s own book, AI Superpowers, provides a thought-provoking overview of the burgeoning feedback loop between machine learning and geopolitics. As AI becomes more and more powerful, it becomes an instrument of power, and this book outlines what that means for the 21st century world stage:

“Many techno-optimists and historians would argue that productivity gains from new technology almost always produce benefits throughout the economy, creating more jobs and prosperity than before. But not all inventions are created equal. Some changes replace one kind of labor (the calculator), and some disrupt a whole industry (the cotton gin). Then there are technological changes on a grander scale. These don’t merely affect one task or one industry but drive changes across hundreds of them. In the past three centuries, we’ve only really seen three such inventions: the steam engine, electrification, and information technology.”

So what’s different this time? Lee points out that “AI is inherently monopolistic: A company with more data and better algorithms will gain ever more users and data. This self-reinforcing cycle will lead to winner-take-all markets, with one company making massive profits while its rivals languish.” This tendency toward centralization has profound implications for the restructuring of world order:

“The AI revolution will be of the magnitude of the Industrial Revolution—but probably larger and definitely faster. Where the steam engine only took over physical labor, AI can perform both intellectual and physical labor. And where the Industrial Revolution took centuries to spread beyond Europe and the U.S., AI applications are already being adopted simultaneously all across the world.”

Cloud Atlas, The Inevitable, The Overstory, Gnomon, Folding Beijing, and AI Superpowers might appear to predict the future, but in fact they do something far more interesting and useful: reframe the present. They invite us to look at the world from new angles and through fresh eyes. And cultivating “beginner’s mind” is the problem for anyone hoping to build or bet on the future.


Source: Tech Crunch

Investor momentum builds for construction tech

Although it’s not the sexiest of industries, the hefty construction sector in 2018 attracted not only the attention but, more importantly, the dollars of investors.

Historically, the multi-trillion-dollar sector has been slow to adopt new technologies, as builders rely on a variety of disparate systems to manage projects, traditional building methods to construct homes and non-smart materials.

But a wave of startups is looking to capitalize on opportunities within the sector. Companies that have developed software solutions aimed at streamlining processes and increasing efficiencies are increasingly common. Prefab construction has evolved thanks to innovation in that space, and 3D printing technology can create homes in a matter of days.

Investors are taking notice. Funding in U.S.-based construction technology startups surged by 324 percent, to nearly $3.1 billion in 2018 compared with $731 million in 2017, according to Crunchbase data. While the 2018 numbers are impressive, it’s important to note that a few large rounds did take place last year and thus skewed the results. One startup alone, Menlo Park-based Katerra, brought in $865 million from SoftBank Vision FundRiverPark Ventures and Four Score Capital in a Series D round last January. And, smart glass company View closed a $1.1 billion Series H in November. Also, Procore, a (unicorn) provider of cloud-based construction management applications, in December raised a $75 million Series H round from Tiger Global Management.

Without those two rounds, the construction tech sector saw just $1.135 billion in funding in 2018, up a more modest 55 percent over 2017’s totals.

The industry continues to see M&A activity. Larger software companies are recognizing that it makes more sense to acquire companies in this space rather than try to reinvent the wheel from within. For example, in the fourth quarter of last year, 3D design software provider Autodesk announced plans to acquire two cloud-based software startups in the space: PlanGrid for $875 million and BuildingConnected for $275 million. Publicly traded software developer Trimble in July acquired construction management software startup Viewpoint for $1.2 billion.

Jerry Chen, partner at Greylock Partners, is bullish on the sector and expects 2019 will only see more funding and acquisitions. His firm invested in San Francisco-based Rhumbix, which has raised $28.6 million to grow its mobile platform designed for the construction craft workforce. That company, he says, had a “record year” in terms of customers and users.

“2018 was an inflection point for the construction tech industry,” Chen told Crunchbase News. “Major venture investing and strategic M&A by incumbent players continued… and I think you will see other major enterprise software companies begin to invest more in construction in 2019.”

One construction tech startup founder, Nick Carter of Chicago-based IngeniousIO, believes that despite the big numbers, the industry has a ways to go in terms of true startup growth. Part of that is simply due to one thing: tech founders and some investors are intimidated by the space.

“A lot of people don’t understand it,” he said. “There’s a massive learning curve. Companies have been building buildings the same way for hundreds of years and not everyone understand its complexities.”

The fact that construction is a largely unregulated industry is also a factor, Carter believes.

“Eventually money will flow into the sector because of the pure size of the market,” he told Crunchbase News. “The money is there. There are VCs at every angle wanting to get into this space, but they’re looking for the right opportunities. There just aren’t a ton of startups in the space.”

Construction is also a very cyclical business, and one has to wonder if a potential economic downturn would give investors pause. But to Carter, a downturn would only create more need for products like the one his company is working to build. IngeniousIO’s platform uses artificial intelligence to redefine the process of construction projects by creating what Carter describes as “a unifying, data-driven approach.”

“Tighter budgets are where a company like ours can do very well,” he said. “Companies wouldn’t have the overhead of outdated apps that take a significant amount of support to manage, scale and implement.”

The construction sector may not have the cache of other more Twitter-friendly markets, but it does have the sheer size and potential to provide ripe soil for investors willing to break ground on new opportunities.


Source: Tech Crunch

Visa and Mastercard could raise interchange fees

According to a report from the WSJ, Visa and Mastercard are considering raising interchange fees on card transactions in the U.S. Visa and Mastercard generate most of their revenue from these small processing fees, and it could have implications for merchants and fintech startups.

When you pay with a credit or debit card, merchants pay a small fee to the bank that issued this card. Your bank then pays an even smaller fee to the company that operates the card network.

In most cases, card issuers and card networks are separate companies. For instance, Chase issues a Visa card, Chase gets an interchange fee on every card transaction, and Chase pays a tiny fee to Visa. Some companies also operate a network and issue cards themselves, such as American Express.

The WSJ says that Mastercard and Visa will raise their fees in April — Visa confirmed the change. While fees on each transaction are nearly unnoticeable, they add up quite rapidly. They generate a ton of revenue for Visa and Mastercard, and they represent significant costs for large merchants.

It could become a consumer protection issue as customers often end up paying higher prices because of those fees. While Visa and Mastercard mostly negotiate with financial institutions, those financial institutions still want a cut on interchange fees. That’s why those fees are passed on to the merchants.

Merchants take into account the fact that a large portion of their customers are going to pay with a card. They end up raising prices for everyone, even if you pay using cash, a debit card or a credit card.

Fees on credit cards are generally higher and are the reason why points and rewards exist. Banks attract customers with advantageous reward systems because they want to get your interchange fees. Interchange fees are also much higher in the U.S. than in Europe because there has been more fraudulent activity — the U.S. has switched to chip-and-pin cards years after Europe.

An increase in interchange fees could also affect consumer fintech startups. Many challenger banks have been relying on interchange fees as one of their revenue streams. That’s part of the reason why European fintech startups, such as N26, Monzo and Revolut, have been looking at the U.S. as a potential market. There’s an entire industry built on top of those interchange fees.


Source: Tech Crunch

Uber sues NYC to contest cap on drivers

Uber filed a lawsuit against New York City, The Verge reported. The company wants to overturn New York City’s rule that caps the number of new ride-hailing drivers. Last summer, the city approved legislation that halts the issuing of new licenses to drivers for 12 months.

It has been a multi-year fight between Uber and New York City. NYC mayor Bill de Blasio has been in favor of new legislation to regulate ride-hailing companies for years. And the NYC Council finally voted in favor of such a new rule back in August 2018.

Uber has had a strong stance against the new regulatory framework. Before the vote, the company even called loyal customers to ask them to call local council members and support Uber.

There are a few reasons why policymakers have been in favor of the halt. First, taxi medallion holders have been suffering from the sudden market changes caused by Uber, Lyft and other ride-hailing companies. The value of their licenses have dropped significanyly, which created some financial issues for drivers who got a credit to acquire those licenses.

Second, ride-hailing services have fostered congestion across the city. It seems a bit counterintuitive as some Uber users have given up on their personal cars to switch to Uber. But Uber also replaces a lot of other transportation methods, such as subways, buses, bikes, etc.

In addition to that usage pattern switch, many drivers are still driving around New York City, waiting for the next ride. Those idle cars clog the streets.

Third, there are also economical reasons for this change. Uber is a marketplace that matches drivers with riders. The company is leveraging the fact that rules aren’t as strict for ride-hailing drivers as for taxi drivers. This way, Uber can accept a ton of drivers even though demand doesn’t necessarily match. Uber can then leverage this market imbalance to drive down wages.

As part of the vote, New York City has also agreed on a minimum wage for ride-hailing drivers. Eventually, it could lead to an increase in price for customers. But so many customers have turned their back on public transportation that it is now generating too many issues when it comes to infrastructure investments and traffic congesting.

It’s a chicken-and-egg situation. You can’t expect a better subway system if nobody is interested in taking the subway anymore. And you can’t expect customers to rely on the subway if there hasn’t been enough investment to make it reliable.


Source: Tech Crunch

Transportation Weekly: Didi woes, how Nuro met Softbank, Amazon’s appetite

Welcome back to Transportation Weekly; I’m your host Kirsten Korosec, senior transportation reporter at TechCrunch. This is the second edition and seriously people, what happened this week? Too much. Too much!

Never heard of TechCrunch’s Transportation Weekly? Catch up here. As I’ve written before, consider this a soft launch. Follow me on Twitter @kirstenkorosec to ensure you see it each week. (An email subscription is coming).

Off we go … vroom.


ONM …

There are OEMs in the automotive world. And here, (wait for it) there are ONMs — original news manufacturers. (Cymbal clash!) This is where investigative reporting, enterprise pieces and analysis on transportation lives.

This week, we’ve got some insider info on Didi, China’s largest ride-hailing firm. China-based TechCrunch reporter Rita Liao learned from sources that Didi plans to lay off 15 percent of its employees, or about 2,000 people this year. CEO Cheng Wei made the announcement during an internal meeting Friday morning.

Read about it here.

Didi’s troubles with regulators and its backlash from two high-profile passenger murders last year don’t exist in a vacuum. Their struggles are in line with what is happening in the ride-hailing industry, particularly in more mature markets where the novelty has worn off and cities have woken up.

For companies like Didi, Uber, Lyft and other emerging players, this means more resources (capital and people) spent working with cities as well as looking for ways to diversify their businesses. All the while, they must still plug away at the nagging problems of reducing costs and keeping drivers and riders.

Just look at Uber. As Megan Rose Dickey reports, Uber’s stiff losses continued in the fourth quarter. The upshot: Its losses can be attributed to increased competition and significant investment in bigger bets like micro mobility and Elevate. And apparently legal fees. Uber, The Verge reports, sued NYC on Friday to overturn a law that caps drivers.


Dig In

This week, TechCrunch editor Devin Coldewey digs into the development of a system that can estimate not just where a pedestrian is headed, but their pose and gait too.

The University of Michigan, well known for its efforts in self-driving car tech, has been working on an improved algorithm for predicting the movements of pedestrians.

These algorithms can be as simple as identifying a human and seeing how many pixels move over a few frames, then extrapolating from there. But naturally, human movement is a bit more complex than that. Few companies advertise the exact level of detail with which they resolve human shapes and movement. This level of granularity seems beyond what we’ve seen.

UM’s new system uses LiDar and stereo camera systems to estimate not just the trajectory of a person, but their pose and gait. Pose can indicate whether a person is looking towards or away from the car, or using a cane, or stooped over a phone; gait indicates speed and intention.

Is someone glancing over their shoulder? Maybe they’re going to turn around, or walk into traffic. This additional data helps a system predict motion and makes for a more complete set of navigation plans and contingencies.

Importantly, it performs well with only a handful of frames to work with — perhaps comprising a single step and swing of the arm. That’s enough to make a prediction that beats simpler models handily, a critical measure of performance as one cannot assume that a pedestrian will be visible for any more than a few frames between obstructions.

Not too much can be done with this noisy, little-studied data right now, but perceiving and cataloguing it is the first step to making it an integral part of an AV’s vision system.

— Devin Coldewey


A little bird …

We hear a lot. But we’re not selfish. Let’s share.

blinky-cat-bird

Every big funding round has an origin story — that magic moment when planets align and a capitally-flush investor gazes across a room at just the right time and spots the perfect company in need of funds and guidance.

One of this week’s biggest deals — see below — was the $940 million that Softbank Vision Fund invested in autonomous delivery robot Nuro. How (and when) Nuro met Softbank is almost as big a story as the funding round itself. OK, well maybe not AS BIG. But interesting, nonetheless.

It turns out that Cruise, the self-driving unit of GM, was in early talks with Nuro, but the parties couldn’t quite meet in the middle, people familiar with the deal told me. Sources wouldn’t elaborate whether Cruise was seeking to acquire Nuro or take a minority stake in the company.

It all worked out in the end, though. The folks at Cruise introduced Nuro to Softbank. That means Cruise and Nuro now share the same investor. Softbank agreed in May 2018 to invest $2.25 billion in GM Cruise Holdings LLC.

Got a tip or overheard something in the world of transportation? Email me or send a direct message to @kirstenkorosec.


Deal(s) of the week

We have a tie this week, which began with news that Softbank’s Vision Fund invested in autonomous delivery robot Nuro. The week closed with electric automaker Rivian announcing a $700 million funding round led by Amazon.

First Nuro. Michael Ronen, managing partner at SoftBank Investment Advisers, and the same person who was a big part of its investment in Cruise, told TechCrunch that the winners in this market will need to address a diverse mix of technological questions. In his view, that’s Nuro.

“Nuro has built a team of brilliant problem solvers whose combined backgrounds in robotics, machine learning, autonomous driving and consumer electronics give them a compelling advantage,” Ronen said.

Amazon’s investment in Rivian is important, particularly when you step back and take a more holistic and historic view. Consider this: The logistics giant stealthily acquired an urban delivery robot startup called Dispatch in 2017 (a discovery Mark Harris made and reported for us last week). Amazon showed off the fruit of that acquisition — its own delivery robot Scout — in January 2018.

Last week, self-driving vehicle startup Aurora raised more than $530 million in a Series B funding round led by Sequoia and with “significant” investments from Amazon and T. Rowe Price. Now, Amazon is backing Rivian.

Based on the deals that we know about, Amazon’s hands are now deep into autonomous delivery, self-driving vehicle software and electric vehicles. Let that sink in.

Other deals that got our attention this week:


Snapshot

Auto loans data

Sure, TechCrunch focuses on startups. Why auto loans? Because auto loan data can be one of the canaries in the coal mine that is the automotive industry and on a larger scale, the economy.  And, delinquency rates ripple through the rest of the transportation world, affecting public transit and ride-hailing too.

The New York Federal Reserve this week released a collection of economic data, including auto loans, which have been climbing since 2011. Auto loans increased by $9 billion this year, a figure boosted by historically strong levels of newly originated loans that will put 2018 in the record books. There were $584 billion in new auto loans and leases appearing on credit reports in 2018, the highest level in the 19-year history of the loan origination data.

Why I’m watching this? Because according to the Quarterly Report on Household Debt and Credit:

  • The flow into 90+ day delinquency for auto loan balances has been slowly trending upward since 2012
  • Serious delinquency of auto loans held by borrowers under 30 years old between 2014 and 2016 rose (see chart)
  • Rising overall delinquency rates remain below 2010 peak levels. However, there were more than 7 million Americans with auto loans that were 90 or more days delinquent at the end of 2018

Tiny but mighty micro mobility

It was a bit quiet on the micro-mobility front this week, but here’s what jumped out. Unsurprisingly, San Francisco denied Lime’s appeal to operate electric scooters in the city. This is the same decision the city landed on pertaining to both Uber’s Jump and Ford’s Spin appeals. On the bright side for these companies, there may be hope for them to deploy scooters during phase two of the city’s pilot program, which starts in April.

Also in the SF Bay Area, Lyft donated $700,000 to TransForm, an organization focused on improving access to transportation in underserved areas throughout California. In partnership with Oakland Mayor Libby Schaaf, Lyft and TransForm will invest in a free bike library and community “parklets” in Oakland, Calif.

Meanwhile, over in Tel Aviv, Lime deployed its electric scooters, joining electric scooter startup Bird. Lime also reportedly plans to deploy its scooters throughout the country of Israel. Next up will be cities in the Gush Dan region.

Also in micro mobility …

We read corporate updates to terms of service in our spare time. And this week, Skip sent out an update that included an interesting nugget. It reads:

We’ve updated specific provisions on camera footage. We’ve updated and made more clear that our scooters may be equipped with video camera equipment which we may use to help ensure that our scooters are used properly and in accordance with laws, rules, regulations and policies, to protect against crimes such as theft and vandalism, to help us determine if scooters are being used properly at speeds, locations and on surfaces that are proper and allowed as well as to improve our Services.

In December, Skip unveiled two new scooters — one with a rear-facing camera. The company tested 200 of these scooter in Washington, D.C. (and later rolled out to San Francisco) to monitor whether people were riding on the sidewalk and generally riding safely. At the time, Skip said it wasn’t sure what it would do with the data collected from the cameras.

In other words, Skip’s cameras are on. How they intend to use that data — whether via a warning to the rider, a message after the ride is complete, or remotely slowing the scooter down, isn’t clear.

One startup that is poised to capture this new market of scooter accountability is Fantasmo. The augmented reality mapping startup has a new scooter positioning camera that captures video and then matches that against a map to reliably identify how the scooter is being used. Fantasmo’s camera system is not being used by Skip.


Notable reads

If you’re waiting for the big autonomous vehicle disengagement hot take story from me, you’ll be waiting for awhile. Let me explain.

This week, the California Department of Motor Vehicles released the “disengagement reports” of autonomous vehicle companies with permits to test on public roads in the state. These reports are meant to track each time a self-driving vehicle disengages out of autonomous mode. There are 48 companies that issued reports, which when you combine all the data, drove more than 2 million miles on public roads in autonomous mode between December 2017 and November 2018. That’s a four-fold increase from the year before.

Companies that receive AV testing permits in California, which are issued by the DMV, are required to submit these annually. It’s not that these reports are worthless. They are useful to determine if a company is ramping up its testing on public roads, adding more AVs to its fleet, helpful for spotting trends like ‘why did disengagements suddenly end?’ or to determine if a company is even testing anymore.

And I’ve discovered some interesting information that will become bigger stories or end up as footnotes in the world of AVs. (For instance, Faraday Future says it will begin testing on public roads late this year).

But disengagement reports are not a meaningful way to make comparisons on how companies stack up against each other. Why? Because it’s not an “apples-to-apples” comparison for one, companies report the data in different ways and there is no transparency into the specifics of when and where each disengagement occurred.

Another problem is the miles-per-disengagement figure that we (the media) typically focus on. This data isn’t super useful on its own. This shouldn’t be treated like a report card. As one engineer told me once, you learn only from occasions in which the system does, or wants to do, something different from a good human. The smart AV companies will take the disengagement data and combine it with other information taken from simulation and other forms of offline testing.

The “miles per disengagement” data point doesn’t start to mean anything on its own until a company reaches the validation phase, which is when miles driven are the truest representation of naturalistic driving in the domain and application of interest. How many are at this point? I’m hearing one or two.


Testing and deployments

Much of the talk and marketing materials around flying cars, or eVTOLs, focuses on well-dressed business folks standing on top of skyscrapers, preparing to be whisked away — up and over the terrible traffic below. Other startups have focused on last-mile delivery. But what about long-distance cargo delivery to remote and urban areas?

Elroy Air is one company that is working on this problem. The San Francisco-based startup has been developing an autonomous vertical takeoff and landing cargo transport system that can operate outside of airport infrastructure and carry up to 500 pounds of cargo over 300 miles. Elroy Air just closed a $9.2 million round that included investors Catapult Ventures, Levitate Capital, Lemnos, Precursor Ventures, Haystack, Shasta Ventures, Homebrew, 122West, Amplify Partners, Hemisphere Ventures, the E14 Fund and DiamondStream Partners.

The company said this week it will begin testing its unmanned vertical-takeoff-and-landing drone for commercial deliveries — called the Chaparral — this year and launch a commercial shipping service  in 2020.

These vehicles will be monitored by trained operators at all times during the testing phase, the company said.


On our radar

Let’s not forget that people are using buses and trains everyday. Not in a year. Not in 10. Right now. These transit systems, many of which need expensive upgrades, carry millions of people every day. One of the more interesting examples of the challenges with transit is the L train shutdown in New York.

The Metropolitan Transportation Authority needs to repair a subway tunnel under the East River and initially had planned to shut down the entire tunnel for 15 months, starting in late April. The L train carries 275,000 people between Bedford Avenue in Brooklyn and Eighth Avenue in Manhattan, the effected section, every day.

New York Gov. Andrew Cuomo intervened and now there’s a new plan, which involves running trains through one tunnel tube while repairs are carried out in the other tube. The NYT has the back story.

There’s an upcoming “L Train Shutdown” event this month in Brooklyn that we’re keeping an eye on. URBAN-X, the startup accelerator backed by automotive brand MINI, is hosting a discussion on the future of the L-train and alternative modes of transport. Some interesting folks will be participating, including Lime’s chief program officer Scott Kubly. The event will be held 6:30 pm to 8:30 pm, Feb. 19 at A/D/O, 29 Norman Ave, Brooklyn, NY.

Thanks for reading. There might be content you like or something you hate. Feel free to reach out to me at kirsten.korosec@techcrunch.com to share those thoughts, opinions or tips. 

Nos vemos la próxima vez.


Source: Tech Crunch

Even years later, Twitter doesn’t delete your direct messages

When does “delete” really mean delete? Not always, or even at all, if you’re Twitter .

Twitter retains direct messages for years, including messages you and others have deleted, but also data sent to and from accounts that have been deactivated and suspended, according to security researcher Karan Saini.

Saini found years-old messages in a file from an archive of his data obtained through the website from accounts that were no longer on Twitter. He also reported a similar bug, found a year earlier but not disclosed until now, that allowed him to use a since-deprecated API to retrieve direct messages even after a message was deleted from both the sender and the recipient — though, the bug wasn’t able to retrieve messages from suspended accounts.

Saini told TechCrunch that he had “concerns” that the data was retained by Twitter for so long.

Direct messages once let users “unsend” messages from someone else’s inbox, simply by deleting it from their own. Twitter changed this years ago, and now only allows a user to delete messages from their account. “Others in the conversation will still be able to see direct messages or conversations that you have deleted,” Twitter says in a help page. Twitter also says in its privacy policy that anyone wanting to leave the service can have their account “deactivated and then deleted.” After a 30-day grace period, the account disappears, along with its data.

But, in our tests, we could recover direct messages from years ago — including old messages that had since been lost to suspended or deleted accounts. By downloading your account’s data, it’s possible to download all of the data Twitter stores on you.

A conversation, dated March 2016, with a suspended Twitter account was still retrievable today (Image: TechCrunch)

Saini says this is a “functional bug” rather than a security flaw, but argued that the bug allows anyone a “clear bypass” of Twitter mechanisms to prevent accessed to suspended or deactivated accounts.

But it’s also a privacy matter, and a reminder that “delete” doesn’t mean delete — especially with your direct messages. That can open up users, particularly high-risk accounts like journalist and activists, to government data demands that call for data from years earlier.

That’s despite Twitter’s claim that once an account has been deactivated, there is “a very brief period in which we may be able to access account information, including tweets,” to law enforcement.

A Twitter spokesperson said the company was “looking into this further to ensure we have considered the entire scope of the issue.”

Retaining direct messages for years may put the company in a legal grey area ground amid Europe’s new data protection laws, which allows users to demand that a company deletes their data.

Neil Brown, a telecoms, tech and internet lawyer at U.K. law firm Decoded Legal, said there’s “no formality at all” to how a user can ask for their data to be deleted. Any request from a user to delete their data that’s directly communicated to the company “is a valid exercise” of a user’s rights, he said.

Companies can be fined up to four percent of their annual turnover for violating GDPR rules.

“A delete button is perhaps a different matter, as it is not obvious that ‘delete’ means the same as ‘exercise my right of erasure’,” said Brown. Given that there’s no case law yet under the new General Data Protection Regulation regime, it will be up to the courts to decide, he said.

When asked if Twitter thinks that consent to retain direct messages is withdrawn when a message or account is deleted, Twitter’s spokesperson had “nothing further” to add.


Source: Tech Crunch

Opendoor files to raise another $200M at a $3.7B valuation, documents show

The housing market is predicted to cool this year, but the market for startups selling houses? It seems to be heating up. Opendoor, the company that aims to bypass real estate agents and brokers by providing an online platform — by way of a mobile app — for people to buy and sell properties direct, has filed papers in Delaware indicating that it would like to raise around $200 million more, at a valuation of about $3.7 billion.

The raise comes just one month after Knock, an Opendoor competitor, raised $400 million.

Eric Wu, Opendoor’s CEO and co-founder, did not respond to a request for comment, and a spokesperson for Opendoor declined to comment.

The Delaware documents (embedded below) do not make it clear if this would come in the form of an outside round, or a secondary sale, or a combination of the two; nor is it clear if the funding has closed already. The documents are dated February 8th of this year.

The shares are described as a “Series E-2”, which likely means this is an extension on Opendoor’s last round, from September 2018, of $400 million. That itself was an expansion of a previous E round, which Opendoor had raised in June 2018, of $325 million. Opendoor had been valued at around $2.47 billion post-money in September, according to PitchBook, and the shares in the document are around 37 percent higher — hence the $3.7 billion estimation here.

Backers of the company include SoftBank, along with some 36 others that include some of the biggest names in VC, such as Andreessen Horowitz, Coatue, General Atlantic, GV, Initialized, Khosla, NEA, Norwest and many more.

The premise of Opendoor — co-founded by Wu, Ian Wong, Justin Ross and Keith Rabois on the back of an idea that Rabois had many years before — is to cut out some of the steps, and subsequent money and time spent, that come with buying or selling a property. (For those who have been through it, you know that the extra fees and rigmarole can be a killer and sometimes feels like it could be done better; that’s what Opendoor is addressing, in part with a very transparent pricing structure.)

Opendoor does this by becoming the virtual middle man. As Opendoor describes it, “If you’re selling, sell your home to us to eliminate the hassles of showings and months of uncertainty. If you’re buying, we make it incredibly easy to tour hundreds of Opendoor homes so you can find the perfect one.” It also has created a streamlined process to cut down the paperwork and work that agents do around transactions.

As of September last year, Opendoor had raised $2 billion in debt to finance these purchases — although the company today said that it is now “buying homes at a run rate of almost $4 billion a year” and that its transaction rate is currently at over 2,000 customers per month, including both buyers and sellers, and it has served some 30,000 customers to date across 19 metro regions covering more than 20 cities:

It’s proving to be a popular proposition. In 2018, more than 800,000 people toured Opendoor homes.

While housing prices had largely recovered in a lot of U.S. cities hurt by the previous crash, experts have said that a rise in inventory, coupled with rising mortgage rates and tax uncertainly, are set to cool the overall market in 2019.

But with the housing industry regularly rebounding and growing over the longer term — the saying “safe as houses” doesn’t come from thin air — it may be that investors are still prepared to make further-reaching bets on platforms that could prove to be strong players when the market is on a high.

Interestingly, Wu has hinted that the company will be making some moves in the area of mortgages and home improvement loans, which could free up and encourage more transactions at a time when traditional mortgage rates are rising.

“We’re doing some things around mortgages that will be integrated into the shopping experience,” Wu said in September, adding that the company “also wants to enable home buyers to personalize their experience.”

We’ll update this post as we learn more.


Source: Tech Crunch

Daily Crunch: Amazon scraps HQ2 plans in NYC

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 9am Pacific, you can subscribe here.

1. Did New York lose anything with Amazon’s rejection? It’s complicated.

Amazon announced yesterday that it’s taking its ball and going home, rather than dealing with mean, pushy New Yorkers (warning: not an exact quote). As a result, some outside observers are painting a picture of a city and its politicians losing out for their recalcitrance.

Jon Shieber acknowledges that there’s plenty to criticize on both sides. But for those who think New Yorkers are idiots for not giving Amazon billions in tax incentives, he has a simple message: You’re wrong.

2. Netflix office goes on lockdown over report of a potential shooter, suspect now in custody

According to the LAPD, there were no shots fired, no reports of injuries and the suspect in question has been taken into custody.

3. Samsung is preparing to launch a sports smartwatch and AirPods-like earbuds

Samsung’s newest product launch happens next week, but the Korean tech giant has already revealed the lineup of wearable devices that will be unveiled alongside the Galaxy S10.

NEW YORK, NY – MAY 08: Gimlet Media President Matt Lieber, Gimlet Media CEO Alex Blumberg (Photo by Jamie McCarthy/Getty Images for Spotify)

4. Spotify says it paid $340M to buy Gimlet and Anchor

Spotify doubled down on podcasts last week with a deal to buy podcast companies Gimlet and Anchor. The acquisition price was initially undisclosed, but Spotify has quietly confirmed that it spent €300 million — just shy of $340 million — to capture the companies.

5. Everything you need to know about GM’s new electric bikes

General Motors announced last year it was getting into the electric bike business. Now, GM has given this new brand a name — ARĪV — and revealed some of the details about its go-to-market plan.

6. China’s Didi is laying off 15 percent of its staff

The cut comes as China’s largest ride-hailing company copes with a stricter regulatory environment that puts a squeeze on driver supply, as well as backlash from two high-profile passenger murders last year.

7. Dubai airport briefly halts flights after drone spotted

It’s the latest in a recent string of scares involving personal drones flying too close to a commercial airport. At the height of the holiday season, London’s Gatwick airport was closed for a day and a half over similar concerns.


Source: Tech Crunch

As GE and Amazon move on, Google expands presence in Boston and NYC

NYC and Boston were handed huge setbacks this week when Amazon and GE decided to bail on their commitments to build headquarters in the respective cities on the same day. But it’s worth pointing out that while these large tech organizations were pulling out, Google was expanding in both locations.

Yesterday, upon hearing about Amazon’s decision to scrap its HQ2 plans in Long Island City, New York City Mayor de Blasio had this to say: “Instead of working with the community, Amazon threw away that opportunity. We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.” One of them already has. Google had already announced a billion-dollar expansion in Hudson Square at the end of last year.

In fact, the company is pouring billions into NYC real estate, with plans to double its 7,000-person workforce over the next 10 years. As TechCrunch’s Jon Russell reported, “Our investment in New York is a huge part of our commitment to grow and invest in U.S. facilities, offices and jobs. In fact, we’re growing faster outside the Bay Area than within it, and this year opened new offices and data centers in locations like Detroit, Boulder, Los Angeles, Tennessee and Alabama, wrote Google CFO Ruth Porat.”

Just this week, as GE was making its announcement, Google was announcing a major expansion in Cambridge, the city across the river from Boston that is home to Harvard and MIT. Kendall Square is also home to offices from Facebook, Microsoft, IBM, Akamai, Digital Ocean and a plethora of startups.

Google will be moving into a brand new building that currently is home to the MIT Coop bookstore. It plans to grab 365,000 square feet of the new building when it’s completed, and, as in NYC, will be adding hundreds of new jobs to the 1,500 already in place. Brian Cusack, Google Cambridge Site lead points out the company began operations in Cambridge back in 2003 and has been working on Search, Android, Cloud, YouTube, Google Play, Research, Ads and more.

“This new space will provide room for future growth and further cements our commitment to the Cambridge community. We’re proud to call this city home and will continue to support its vibrant nonprofit and growing business community,” he said in a statement.

As we learned this week, big company commitments can vanish just as quickly as they are announced, but for now at least, it appears that Google is serious about its commitment to New York and Boston and will be expanding office space and employment to the tune of thousands of jobs over the next decade.


Source: Tech Crunch

Uber reports $3B in Q4 revenue, rising operating losses

Ahead of its anticipated initial public offering this year, Uber reported a net loss of $865 million in the fourth quarter. That figure, however, was aided by a tax benefit that saved the company from reporting a $1.2 billion net loss in the period. On an adjusted, pro-forma basis, Uber’s net loss in the final quarter of 2018 was a slimmer $768 million.

The figures are an improvement of sorts. The firm reported a pro-forma net loss of $939 million in the preceding, third quarter of 2018, but also reported a smaller pre-tax net loss of $971 million. Regardless, Uber’s stiff losses continued in the quarter.

Meanwhile, Uber’s adjusted EBIDTA losses came in at $842 million, an increase of 88 percent year over year, and an increase of 60 percent from the third quarter. In that preceding quarter, Uber’s adjusted EBIDTA losses came in at $527 million. These increased losses can be attributed to increased competition and significant investment in bigger bets like micromobility and Elevate, for example.

In Q4 2018, Gross bookings (the amount collected before it pays drivers) went up 11 percent quarter over quarter, to $14.2 billion, while revenue increased 2 percent quarter over quarter to $3 billion.

Year over year, Uber’s gross bookings increased 37 percent and revenue increased 24 percent. But as a percentage of gross bookings, revenue declined to 21.3 percent. These numbers exclude the impact of SEA and Russia.

  • GAAP Revenue: $3.0 billion
  • Up 24 percent YOY
  • Up 2 percent QOQ
  • Revenue as a percentage of gross bookings declined 190 basis points to 21.3 percent

Compared to the entire fiscal year of 2017, Uber’s gross bookings increased 45 percent, to $50 billion in 2018. That resulted in a GAAP revenue increase of 43 percent, from 2017 to $11.3 billion. Losses also improved (decreased) from $2.2 billion in adjusted EBITDA losses in 2017 to $1.8 billion in 2018. That’s still a lot of money, but it does show overall positive signs that Uber is moving in the right direction.

“Last year was our strongest yet, and Q4 set another record for engagement on our platform,” Uber CFO Nelson Chai said in a statement. “In 2018, our ridesharing business maintained category leadership in all regions we serve, Uber Freight gained exciting traction in the US, JUMP e-bikes and e-scooters are on the road in over a dozen cities, and we believe Uber Eats became the largest online food delivery business outside of China, based on gross bookings.”

Other key stats for Uber’s Q4 2018:

  • Gross cash: $6.4 billion in unrestricted cash($4.8 billion at end of Q3 2018, $4.4 billon in Q4 2017)
  • Adjusted EBITDA margin: -5.9 percent of gross bookings (Q3 2018 was -4.1 percent)


Source: Tech Crunch