A must-see conversation on the state of VC, this year at Disrupt

On a surface level, the world of venture capital doesn’t look to change much year to year. But in truth, the industry is very much in flux, with many firms grappling with a lack of diversity, dealing with succession questions, and confronting a growing pipeline of aging portfolio companies — to name just a few of the issues of the day.

In fact, one of the biggest shifts in the industry — one that’s years in the making but with no end in sight — is its atomization. Once a clubby industry, the landscape today sees new players, backed up by real dollars, every day, all over the world.

Indeed, at this year’s Disrupt, we’re very excited to be sitting down with three venture investors who spent much of their careers with powerful outfits before more recently — and boldly — striking out on their own to build their own brands.

It’s with their help that we’re going to take stock of many of the trends roiling the industry right now.

Lo Toney was a VP at Cake Financial, a general manager with Zynga, and the CEO of an online coding startup before jumping into the world of venture capital, first at Comcast Ventures and later at GV where he spent several years as a partner.

If he was tempted to stay with Alphabet’s influential venture arm, he didn’t, instead turning his work at GV — which centered increasingly on finding and funding promising and diverse fund managers and startups — into the opportunity to create his own shop. Now, Plexo Capital not only counts Alphabet among its biggest financial backers, but it has amassed stakes in roughly two dozen funds and many more startups. With most of them run exclusively or in part by people of color, Toney has also become a leading light for others who recognize diversity as a competitive advantage.

Then there’s Renata Quintini, who has spent the last year quietly building a new outfit, Renegade Partners, with cofounder Roseanne Wincek. Wincek previously worked at the venture giant IVP. Quintini, similarly, has held a number of investing roles at esteemed institutions. Among them is the Stanford Management Company, where she was an investment manager focused on VC and private equity investments, and Felicis Ventures, where as a general partner she worked with a wide number of rising stars, including the satellite company Planet, the self-driving startup Cruise Automation (now owned by GM), Dollar Shave Club (which sold to Unilever), and Bonobos (snapped up by Walmart).

It wasn’t a surprise when Lux Capital poached Quintini, in fact. But even Lux, which prides itself on the kind of deep science expertise that Quintini shares, couldn’t keep her from leaving to create something all her own.

The story isn’t so dissimilar for Dayna Grayson, who studied systems engineering and worked in product design before jumping into the world of venture capital, first as a principal with the Boston-based firm Northbridge Venture Partners and afterward, as a partner with the venture giant NEA.

There, based in Washington, D.C., Grayson led a wide number of deals for the firm, including in the metal 3D printing company Desktop Metal —  a five-year-old company that, absent an unforeseen development, is soon to be publicly traded and valued in the multiple billions of dollars.

Undoubtedly Grayson could have stayed longer. Instead, nearly eight years into her career with NEA, she left late last year to cofound the early-stage venture firm Construct Capital with Rachel Holt, one of Uber’s first employees.

There is so much to talk about with these entrepreneurial investors, from how they compete against the heavyweights, to how they think about startups in a post COVID world, to whether or not VCs have begun to over-index on business-facing investments to their own detriment — or if, conversely that opportunity remains limitless right now. That’s saying nothing about SPACs, rolling funds, and the latest twist in direct listings.

You definitely won’t want to miss this very timely conversation about the state of VC.

Disrupt 2020 runs from September 14 through September 18 and will be 100% virtual this year. Get your front row seat to see Grayson, Quintini and Toney live with a Disrupt Digital Pro Pass or a Digital Startup Alley Exhibitor Package. We’re excited to see you there.

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Source: Tech Crunch

India’s Reliance Retail to acquire Future Group’s units for $3.4 billion

Reliance Retail, India’s largest retail chain, has found a much simpler way to expand its dominant position in the country: Acquire most of the second largest chain’s units.

On Saturday evening (local Indian time), Reliance Retail said it has reached an agreement with Future Group to acquire the latter’s retail and wholesaler business, and its logistics and warehousing business for $3.4 billion.

The announcement today further complicates the future of Amazon and Walmart’s Flipkart in India, the largest open market globally by users, where e-commerce still accounts for just 3% of all retail sales. India’s retail market is estimated to balloon to $1.3 trillion by 2025, up from $700 billion last year, according to consultancy firm BCG and local trade group Retailers’ Association India.

Amazon has showed interest in Future Retail, too. The company, which last year bought a tiny portion of Future Group’s business, was in talks to increase its stakes in the firm, according to earlier local media reports. The American e-commerce firm, which has invested over $6.5 billion in its India business, said in January that it had also inked a deal with Future Group to help the Indian firm sell online.

Future Group, which kickstarted its journey as a stonewashed-fabric seller in the 1980s, serves millions of customers through more than 1,500 stores in more than 400 cities. Today’s deal will help Future Retail reduce its debt.

Mukesh Ambani, who controls Reliance Industries (of which Reliance Retail is a subsidiary), has secured about $20 billion from Facebook, Google, and 11 other high-profile investors for his telecom venture Jio Platforms this year.

Ambani addressing the Bengal Global Business Summit on January 16,2018 in Kolkata, India. (Photo by Debajyoti Chakraborty/NurPhoto via Getty Images)

Now Ambani, who is India’s richest man, has set his eyes on e-commerce. Jio Platforms and Reliance Retail last year announced JioMart. The e-commerce venture, which began test trials in select suburbs of Mumbai late last year, has expanded to more than 200 cities and towns across India.

Facebook, which has invested $5.7 billion in Jio Platforms, said the company will explore ways to work with Reliance to digitize the nation’s 60 million mom and pop stores as well as other small and medium-sized businesses.

“With this transaction, we are pleased to provide a home to the renowned formats and brands of Future Group as well as preserve its business ecosystem, which have played an important role in the evolution of modern retail in India. We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands. We are committed to continue providing value to our consumers across the country,” said Isha Ambani, Director at Reliance Retail, in a statement.

Source: Tech Crunch

This Week in Apps: Unreal Engine saved, Fortnite banned and TikTok talks to everyone

Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, two big stories dominated the news: Apple’s fight with Fortnite maker Epic Games and TikTok’s negotiations with top U.S. tech firms over a sale. The former story saw Microsoft coming to Epic Games’ aid in court, in a surprise move.

Meanwhile, TikTok deal talks are happening quickly as both Oracle and Microsoft’s names have emerged as top suitors. But this week, we saw Walmart joining in the talks, too. Yes, Walmart!

One has to wonder if the TikTok that emerges from an acquisition like this will even be the TikTok that people today love to use, what with all these new corporate synergies that come into play.

Top Stories

Apple gets petty in fight with Epic Games

Image credit: Kyle Grillot/Bloomberg via Getty Images

Sorry, Apple, but this is not a good look.

On Friday, the $2 trillion company took its battle with Fortnite maker Epic Games to a whole new level of petty. Just as Fortnite for iOS and Mac was officially blocked from being able to issue updates for its apps, Apple featured Fortnite top competitor PUBG Mobile in the App Store in an editorial story on the Today tab. Apple’s App Store Twitter account also posted about PUBG Mobile’s New Era.

This isn’t coincidental, but a conscious decision on Apple’s part to demonstrate its market power. That is: if you don’t want to play by our rules, fine — we’ll just give business to your competitor instead. Being featured on the App Store drives downloads for an app, which helps an app find new users and reconnect with existing ones.

Apple made its point, but it sure was an ugly way to do it.

In a surprise move, Microsoft came out in support of Epic Games this week. Microsoft GM of gaming developer experiences Kevin Gammill submitted a letter to the court that said Apple’s move to cut ties with Epic would harm game developers. Microsoft uses Epic’s Unreal Engine for its own title, “Forza Street,” but the company understands the damage Apple can do to the gaming industry if it stopped Epic from being able to work on Unreal Engine by disabling its Apple developer account.

Plus, if there’s a battle between the gaming industry and Apple, Microsoft will probably take game developers’ sides these days. After all, Microsoft is in the gaming business and its own cloud gaming service xCloud is banned from the App Store, too, as is Google’s Stadia. Apple’s decision to disallow cloud gaming is anti-consumer and fairly unpopular.

The judge in the Apple v. Epic case this week gave Epic Games a temporary restraining order against Apple, but only to stop Apple from retaliating against Epic Games by blocking the company’s Unreal Engine. Judge Yvonne Gonzalez Rogers also chastised Apple for the move, saying that Epic and Apple were free to litigate against each other, but “their dispute should not create havoc to bystanders.”

It’s becoming pretty clear that Apple’s way of running the App Store is not just a set of rules, it’s become a way for Apple to control other businesses, and even limit their growth. Apple’s ban on cloud gaming looks a lot like a way for Apple to protect its own gaming business at the expense of rivals. In the meantime, a patent reveals Apple is working on its own cloud gaming system. Yikes.

Unfortunately, in battles of this size we’re not exactly left with a hero to root for. Epic Games is no indie underdog being crushed by the big guy. It is the big guy. Microsoft is doing okay too. And when Facebook complains that Apple wouldn’t allow its gaming app into the store, or when it rejected Facebook’s app for informing users of Apple’s 30% cut, it’s easy enough to shrug and move on. Oh poor Facebook is not a sentiment people are capable of feeling these days.

But it’s important to remember that what Apple is doing to these big guys, it’s also doing to the smaller ones. We already saw that with the Basecamp Hey debacle. More recently, Apple rejected the free, open-source WordPress app from the App Store for failing to add Apple’s in-app purchase system and because some of the app’s web views could lead to information about WordPress’s pricing plans.

The issue was resolved and Apple even apologized, but it’s clear that something is very, very broken at the App Store. And the ultimate loser is the consumer. 

In Steve Jobs’ day, GV General Partner M.G. Siegler pointed out in a recent blog post, Apple believed in its App Store and payment systems would win on their own merits, not because they were forced. In Jobs’ own words: “Our philosophy is simple — when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.”

How times have changed.

TikTok nears U.S. deal and loses CEO 

TikTok office building

(Photo by CHRIS DELMAS/AFP via Getty Images)

TikTok is busy. On Monday, the world’s biggest app sued the U.S. government over Trump’s executive order, claiming it had been enacted without evidence and without any due process. Meanwhile, Vietnamese technology firm VNG also sued TikTok over music licensing issues and the U.K. began readying governmental restrictions on TikTok’s activities. TikTok is also still trying to come up with a deal that will allow its app to return to India.

On Thursday, things went from bad to worse as TikTok CEO Kevin Mayer resigned. The former Disney executive had joined the social network just over 100 days ago, but said this was not the job he signed up for. His hiring now increasingly looks like a way what many had suspected all along — a way for TikTok’s Chinese parent company, ByteDance, to point to Americans in exec roles at TikTok as a way to reassure U.S. regulators about its business.

According to reports, Mayer was left out of the negotiations to sell TikTok, which were instead headed by ByteDance founder and CEO Zhang Yiming. Mayer was also said to be scheduled to leave TikTok as part of a planned sale, as his role would no longer exist. But the exec’s sudden departure is bad for morale at a time when TikTok’s existence in the U.S. market remains in question.

Meanwhile, the question of who is talking to TikTok would be easier to answer by who is not. Only Apple went on record to say it’s not interested. Microsoft and Oracle have emerged as top suitors in the days since Trump’s E.O. Oracle is reportedly nearing a $20 billion deal. But this week, Walmart also expressed interest in TikTok, teaming up with Microsoft, before trying to first team up with Alphabet and SoftBank. Walmart…yes really. It imagines it could sell to customers on the platform and expand its ad business.

Other News

  • Apple releases new betas. Apple’s 6th developer betas for iOS 14, iPadOS 14, watchOS 7 and tvOS 14 rolled out this week, as did the latest public betas for iOS an iPadOS. The company typically releases its software updates in September, so these are getting close to the final versions.
  • Facebook and Instagram expand Shopping features. Facebook this week introduced a new “Shop” section in its app, which aims to redirect Facebook users to sellers’ storefronts without leaving Facebook, similar to Instagram’s existing shopping experience. Instagram also began testing live shopping, where businesses can show off content in live videos. Dozens of live video shopping startups will be impacted by the new competition.
  • YouTube is testing Picture-in-Picture mode on iOS. But will supporting the feature impact YouTube’s ability to upsell subscriptions to those who want access to background play?
  • Ever shuts down app after building facial recognition tech using customer data. Cloud photo storage app Ever is shutting down. The company last year was the subject of an NBC News report which found Ever had been using its customers’ photos to develop facial recognition technology that it turned around and offered for sale by way of the Ever API to business clients, including law enforcement and the military. Unfortunately, that ill-gotten business lives on, rebranded as Paravision.
  • Amazon launches a fitness band and app called Halo. The service will sell for $64.99 for a six-month membership at launch. Oh, do we trust Amazon with our health data now?
  • Facebook warns Apple’s upcoming ad tracking restrictions will significantly impact app developers’ ability to target ads. The company says that without targeting and personalization, mobile app install campaigns brought in 50% less revenue for publishers and it expects the impact to Audience Network on iOS 14 will be even greater. Consumers, sick of being tracked everywhere on the web, are going to be fine with this. Facebook will also be OK. Small startups that used highly targeted ads to save themselves from having to pay for tons more impressions to reach their desired audience, however…
  • Android security bug let malicious apps siphon user data. Google confirmed the bug was patched in March after a security researcher reported it.

Funding and M&A

  • LaunchNotes raised a $1.8 million seed round to help companies better communicate their software updates. No more “bug fixes and performance improvements.”
  • Berlin-based Delivery Hero acquired InstaShop for $360 million. The latter is based in Dubai and has half a million users in five markets.
  • Unity files to go public. A rival to Epic Games’ Unreal Engine with its own Unity Game Engine, Unity claims its engine powers over half the top games on mobile, PC and consoles, and 53% of the top 1,000 games on iOS and Android. Not surprisingly, its numbers look strong.


Bingie helps you find new things to watch.


Image Credits: Bingie

Bingie aims to turn getting Netflix recommendations from friends into a more structured experience. The app for streamers let them get together with friends to discuss, discover and share recommendations across services. The app looks well-built, but overlooks the fact that not all friend groups share common interests. It would be interesting to see it expand to include fellow fans, like TV Time offers, in a later update. Bingie is free on iOS. Read the full review on TechCrunch.

Firefox Daylight for Android 

Mozilla this week launched Firefox 79 for Android, aka Firefox Daylight, after more than a year of development. The new browser is faster and entirely overhauled, offering a new user interface, Mozilla’s browser engine GeckoView, enhanced tracking protection, a private mode (based on the privacy browser Firefox Focus), a new bookmarking tools, support for add-ons and more.

Flipboard gets into video

Image Credits: Flipboard

News magazine app Flipboard has been around for years, but its latest update introduces a big change. The app now allows users to follow video content from hundreds of publishers, including national/global news outlets, local news and (carefully vetted) indie producers. Users can even build out their own video-only collections to stay on top of the latest news in the form of video, or they can add video-only feeds into existing magazines. Publishers can also add video to their static round-ups known as Storyboards. Flipboard TV, as the new feature is called, was previously a Samsung exclusive. Now the ad-supported version is available to all.

Source: Tech Crunch

Human Capital: ‘People were afraid of being critical with me’

Welcome back to Human Capital, where we break down the latest in labor, and diversity and inclusion in tech. This week, we’re looking at the launch of the Diversity Riders initiative in venture capital and how it can go further, Instacart’s labor practices and some alternative, more inclusive approaches to running a startup. Also, Y Combinator CEO Michael Seibel recently shared a compelling anecdote about his experience as a Black founder raising money back in 2016.

Justice for Jacob Blake and Breonna Taylor.


Stay Woke

Diversity Riders commitment needs to go further

Earlier this week, Act One Ventures launched a new diversity and inclusion initiative called The Diversity Term Sheet Rider for Representation at the Cap Table. The purpose of the Diversity Rider is to increase the number of Black and other underrepresented investors in deals by making them co-investors. 

Already, firms like Greycroft Partners, First Round Capital, Maveron, Fifth Wall, Plexo Capital and Precursor Ventures have committed to it. What that means is firms will include boilerplate language in their standard term sheets:

In order to advance diversity efforts in the venture capital industry, the Company and the lead investor, [Fund Name], will make commercial best efforts to offer and make every attempt to include as a co-investor in the financing at least one Black [or other underrepresented group including, but not limited to LatinX, women, LGBTQ+] check writer (DCWs), and to allocate a minimum of [X]% or [X] $’s of the total round for such co-investor.

This is certainly a good step on the road to creating additional wealth opportunities for Black, Latinx and Indigenous people, as well folks from other underrepresented groups in tech. However, a stronger step would be to remove the parts about “best efforts” and “make every attempt” because, as it’s currently written, the commitment hedges on rather subjective conditions. Instead, the following would be better:

In order to advance diversity efforts in the venture capital industry, the Company and the lead investor, [Fund Name], will make commercial best efforts to offer and make every attempt to include as a co-investor in the financing at least one Black [or other underrepresented group including, but not limited to LatinX, women, LGBTQ+] check writer (DCWs), and to allocate a minimum of [X]% or [X] $’s of the total round for such co-investor.

Y Combinator CEO Michael Seibel on raising funding as a Black founder

At All Raise’s second annual event for Black female founders, When Founder Met Funder, Planet FWD CEO Julia Collins interviewed YC CEO Michael Seibel about his experience in tech and tips for founders. 

“When I started doing startups, it was 2006 and there weren’t many people who looked like any of us that were doing startups,” he told the audience. “I think what you would’ve expected was overt discrimination but actually I got something else, which was no feedback.”

He went on to say that people were afraid to be critical of him, for fear of being perceived a certain way. 

“People were afraid of being critical with me,” he said. 

That’s partly why Seibel says he’s become the type of person who will tell founders what everyone is thinking. 

“Agree with it or disagree with it, I want you to have a good mental model of what people are thinking and not saying,” Seibel said. 

Gig Work

Instacart is under fire again 

Instacart shoppers, via Gig Workers Collective, made their voices heard again this week. In light of the wildfires and other anticipated climate change-related disasters, Instacart workers want the company to provide disaster pay at a daily rate equal to the average rate of daily pay, including tips, over the previous 30 days for each day Instacart’s operations are shutdown. Additionally, GWC wants Instacart to shut down its operations in markets where a city has declared a state of emergency or issued evacuations.

The demands came shortly after Instacart agreed to distribute $727,985 among some San Francisco-based Instacart workers as part of a settlement pertaining to health care and paid sick leave benefits.

Meanwhile, Instacart is also facing a new lawsuit from DC’s attorney general over its “deceptive” service fees. The suit seeks restitution for consumers who paid those service fees, as well as back taxes and interest on taxes owed to D.C.

Alt VC

Tech cooperatives have the potential to upset wealth inequality 

We began exploring earlier in the year the case for cooperative startups, where workers and users have the opportunity to gain true ownership and control in a company, and where any profits that are generated are returned to the members or reinvested in the company.

The way many tech companies are built today don’t need to be that way. Start.coop, a tech accelerator for cooperatives, is trying to help build this new future. This week, Start.coop, received a $150,000 commitment to help fund two new classes of startups per year. Start.coop invests $15,000 in each startup and all graduates become shareholders in Start.coop, which is a cooperative itself that distributes ownership among workers, investors, advisors and startups that go through the accelerator.

Start.coop founder Greg Brodsky previously told me:

Technology has disrupted almost every part of the economy. It’s disrupted the gig economy, gaming, shopping and how to book hotels. But the one thing that the technology sector has not been willing to touch is ownership itself. That is, who gets rich and who benefits from the growth of these companies. That really hasn’t changed. In some ways, the tech sector is just recreating the wealth inequality in every other part of the economy.

There’s more to an exit than IPOs and acquisitions 

Meanwhile, the folks behind the Exit to Community movement are gearing up to release a zine outlining startup paths to outcomes other than IPOs and acquisitions. E2C is a working project that explores ways to help startups transition investor-owned to community ownership, which could include users, customers, workers or some combination of all stakeholders. 

“The purpose of the zine is to provide an initial roadmap to all of the aspects of the conversation that need to happen so we can save founders pain in recognizing and validating they’re in the wrong fit and we need to co-create what does fit,” Zebras Unite co-founder and zine co-author Mara Zepeda told TechCrunch. “It’s not a silver bullet. It’s not like there’s this other perfect thing that everyone needs to do. I describe it as running a Cambrian explosion of experiments in order to figure out what this future is. It’s not just one thing. That’s how what we’re doing is really different. Sometimes there are these niche products or movements that pop up and say, “this is the answer. There isn’t one answer for this moment.” 

Be on the lookout for a deeper-dive into this next week. For now, here’s some additional reading on the topic.

Don’t miss

Source: Tech Crunch

Watch Elon Musk’s Neuralink brain computer interface progress update live

Elon Musk is set to deliver a progress update for Neuralink, the company and technology he founded that aims to create a direct, ultra-low latency connection between our brains and our computers. The update will kick off at 3 PM PT (6 PM ET), and will be streamed live above.

Based on Musk’s tweets, what we should see is an actual product demo of a Neuralink device in action. The multi-CEO has said that it will be a version 2 of the robot that Neuralink revealed last year during a similar update. That robot is a surgical automated platform that’s designed to perform the highly precise brain surgery that implants the internal part of Neuralink’s tech, which will ultimately communicate wireless with a receiver on the outside of the skull that can then transmit thought-based input to computers – if development reaches its lofty goals.

Musk has tempered expectations somewhat – what we’ll see is still very much an “experimental medical device for use only in patients with extreme medical problems,” and not the ultimate vision of an interface designed for general consumer user that he hopes to someday achieve. But expectations are still high, given that last year, the company had embarked on animal testing, and was talking about potentially entering human testing within the next 12 months.

Source: Tech Crunch

Banks aren’t as stupid as enterprise AI and fintech entrepreneurs think

Announcements like Selina Finance’s $53 million raise and another $64.7 million raise the next day for a different banking startup spark enterprise artificial intelligence and fintech evangelists to rejoin the debate over how banks are stupid and need help or competition.

The complaint is banks are seemingly too slow to adopt fintech’s bright ideas. They don’t seem to grasp where the industry is headed. Some technologists, tired of marketing their wares to banks, have instead decided to go ahead and launch their own challenger banks.

But old-school financiers aren’t dumb. Most know the “buy versus build” choice in fintech is a false choice. The right question is almost never whether to buy software or build it internally. Instead, banks have often worked to walk the difficult but smarter path right down the middle — and that’s accelerating.

Two reasons why banks are smarter

That’s not to say banks haven’t made horrendous mistakes. Critics complain about banks spending billions trying to be software companies, creating huge IT businesses with huge redundancies in cost and longevity challenges, and investing into ineffectual innovation and “intrapreneurial” endeavors. But overall, banks know their business way better than the entrepreneurial markets that seek to influence them.

First, banks have something most technologists don’t have enough of: Banks have domain expertise. Technologists tend to discount the exchange value of domain knowledge. And that’s a mistake. So much abstract technology, without critical discussion, deep product management alignment and crisp, clear and business-usefulness, makes too much technology abstract from the material value it seeks to create.

Second, banks are not reluctant to buy because they don’t value enterprise artificial intelligence and other fintech. They’re reluctant because they value it too much. They know enterprise AI gives a competitive edge, so why should they get it from the same platform everyone else is attached to, drawing from the same data lake?

Competitiveness, differentiation, alpha, risk transparency and operational productivity will be defined by how highly productive, high-performance cognitive tools are deployed at scale in the incredibly near future. The combination of NLP, ML, AI and cloud will accelerate competitive ideation in order of magnitude. The question is, how do you own the key elements of competitiveness? It’s a tough question for many enterprises to answer.

If they get it right, banks can obtain the true value of their domain expertise and develop a differentiated edge where they don’t just float along with every other bank on someone’s platform. They can define the future of their industry and keep the value. AI is a force multiplier for business knowledge and creativity. If you don’t know your business well, you’re wasting your money. Same goes for the entrepreneur. If you can’t make your portfolio absolutely business relevant, you end up being a consulting business pretending to be a product innovator.

Who’s afraid of who?

So are banks at best cautious, and at worst afraid? They don’t want to invest in the next big thing only to have it flop. They can’t distinguish what’s real from hype in the fintech space. And that’s understandable. After all, they have spent a fortune on AI. Or have they?

It seems they have spent a fortune on stuff called AI — internal projects with not a snowball’s chance in hell to scale to the volume and concurrency demands of the firm. Or they have become enmeshed in huge consulting projects staggering toward some lofty objective that everyone knows deep down is not possible.

This perceived trepidation may or may not be good for banking, but it certainly has helped foster the new industry of the challenger bank.

Challenger banks are widely accepted to have come around because traditional banks are too stuck in the past to adopt their new ideas. Investors too easily agree. In recent weeks, American challenger banks Chime unveiled a credit card, U.S.-based Point launched and German challenger bank Vivid launched with the help of Solarisbank, a fintech company.

What’s going on behind the curtain

Traditional banks are spending resources on hiring data scientists too — sometimes in numbers that dwarf the challenger bankers. Legacy bankers want to listen to their data scientists on questions and challenges rather than pay more for an external fintech vendor to answer or solve them.

This arguably is the smart play. Traditional bankers are asking themselves why should they pay for fintech services that they can’t 100% own, or how can they buy the right bits, and retain the parts that amount to a competitive edge? They don’t want that competitive edge floating around in a data lake somewhere.

From banks’ perspective, it’s better to “fintech” internally or else there’s no competitive advantage; the business case is always compelling. The problem is a bank is not designed to stimulate creativity in design. JPMC’s COIN project is a rare and fantastically successful project. Though, this is an example of a super alignment between creative fintech and the bank being able to articulate a clear, crisp business problem — a Product Requirements Document for want of a better term. Most internal development is playing games with open source, with the shine of the alchemy wearing off as budgets are looked at hard in respect to return on investment.

A lot of people are going to talk about setting new standards in the coming years as banks onboard these services and buy new companies. Ultimately, fintech firms and banks are going to join together and make the new standard as new options in banking proliferate.

Don’t incur too much technical debt

So, there’s a danger to spending too much time learning how to do it yourself and missing the boat as everyone else moves ahead.

Engineers will tell you that untutored management can fail to steer a consistent course. The result is an accumulation of technical debt as development-level requirements keep zigzagging. Laying too much pressure on your data scientists and engineers can also lead to technical debt piling up faster. A bug or an inefficiency is left in place. New features are built as workarounds.

This is one reason why in-house-built software has a reputation for not scaling. The same problem shows up in consultant-developed software. Old problems in the system hide underneath new ones and the cracks begin to show in the new applications built on top of low-quality code.

So how to fix this? What’s the right model?

It’s a bit of a dull answer, but success comes from humility. It needs an understanding that big problems are solved with creative teams, each understanding what they bring, each being respected as equals and managed in a completely clear articulation on what needs to be solved and what success looks like.

Throw in some Stalinist project management and your probability of success goes up an order of magnitude. So, the successes of the future will see banks having fewer but way more trusted fintech partners that jointly value the intellectual property they are creating. They’ll have to respect that neither can succeed without the other. It’s a tough code to crack. But without it, banks are in trouble, and so are the entrepreneurs that seek to work with them.

Source: Tech Crunch

Boeing and NASA target December for second try at uncrewed orbital demonstration flight

NASA and Boeing have provided some updates around their Commercial Crew plans, which aim to get Boeing’s CST-100 spacecraft certified for regular human flight. The CST-100 and Boeing’s Commercial Crew aspirations hit a snag last year with a first attempt of an uncrewed orbital flight test, which did not go to plan thanks to a couple of software errors that led to an early mission ending, and a failure to reach the International Space Station as intended.

In a blog post on Friday, NASA said that it and partner Boeing were aiming to fly the re-do of that uncrewed test no earlier than December 2020. This will involve flying the fully reusable Starliner CST-100 without anyone on board, in a live, fully automated simulation of how a launch with crew would go, including a rendezvous and docking with the ISS on orbit, and a return trip and controlled landing and capsule recovery.

During the original OFT last December, the spacecraft took off from Cape Canaveral in Florida atop a United Launch Alliance (ULA) Atlas V as planned, but encountered an issue with its onboard mission timer shortly after disengaging from the launch vehicle. That caused it to misfire its thrusters and expend fuel, and a communication error meant that NASA was not able to correct the issue until it had used too much fuel to allow it to continue to the Space Station as planned. The capsule did safely return to Earth, however, and provided valuable test data on the way.

NASA and Boeing subsequently undertook a comprehensive review of Boeing’s software development program, as well as the agency’s own practices surrounding the public-private partnership, and determined a number of corrective actions. That review ended in July, and the partners have now been working to get back to a second demonstration flight.

Boeing has a lot riding on this re-do, since NASA’s other partner in the Commercial Crew program, SpaceX, is now at least a year ahead in terms of its qualification program. SpaceX recently successfully completed its first crewed demonstration mission of its Dragon spacecraft, and could launch its first operational astronaut mission to the International Space Station as early as October.

Provided OFT-2 goes as intended for Boeing, Starliner could be ferrying its first passengers for a crewed demonstration launch as early as June 2021, with plans for a first operational mission now set for December 2021. All these dates are subject to change, of course.

Source: Tech Crunch

GM shifts Corvette engineering team to its electric and autonomous vehicle programs

GM is moving the engineering team responsible for the mid-engine Chevrolet Corvette to the company’s electric and autonomous vehicle programs to “push the boundaries” on what its future EV battery systems and components can deliver, according to an internal memo.

The memo, sent by Doug Parks, GM’s executive vice president of global product development, purchasing and supply chain, announced that the Corvette team would move from the automaker’s global product team to the autonomous and electric vehicles program that is led by Ken Morris. The shift will go into effect September 1, according to the memo. The change was first reported by InsideEVs.

“General Motors is committed to an all-electric future. I’m excited to be putting the team that redefined supercar performance, design and attainability in key roles to help us integrate and execute our EVs to those same high standards,” Morris said in an emailed statement.

In the memo, Parks said the move will “help this already dynamic team further push the boundaries on what our future EV battery systems and components can deliver when it comes to excitement and thrilling performance for our customers. The Corvette team is familiar with delighting customers and critics alike, having launched the mid-engine Corvette to world acclaim and becoming one of the most awarded cars in automotive history.”

The change won’t disrupt the entire Corvette team. Tadge Juechter will remain executive chief engineer for Global Corvette and will continue to lead the team as new variants hit the market. Corvette’s chief engineer Ed Piatek will now be chief engineer of “future product” and will continue to report to Tadge. Under this new role, Piatek will work across the organization on future EV programs, according to the memo. Josh Holder, who has been Corvette’s program engineering manager, will be promoted to chief engineer for Global Corvette, replacing Piatek.

The organizational change follows a series of announcements and investments from GM into electric vehicles and automated vehicle technology. In January, the automaker said it would invest $2.2 billion into its Detroit-Hamtramck assembly plant to produce all-electric trucks and SUVs, as well as a self-driving vehicle unveiled by its subsidiary Cruise. GM will invest an additional $800 million in supplier tooling and other projects related to the launch of the new electric trucks.

GM will kick off this new program with an all-electric pickup truck that will go into production in late 2021. The Cruise Origin, the electric self-driving shuttle designed for ridesharing, will be the second vehicle to go into production at the Detroit area plant. Last month, GM said it was on track to deliver 20 electric vehicles by 2023, most of which will use the company’s new modular EV architecture, called Ultium. 

GM is already building a nearly 3-million-square-foot factory that will mass produce Ultium battery cells and packs, the cornerstone of the company’s strategy to bring those electric vehicles to market in the next three years. The Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio is part of a joint venture between GM and LG Chem that was announced in December.

Source: Tech Crunch

Facebook isn’t happy about Apple’s upcoming ad tracking restrictions

Apple’s upcoming operating system iOS 14 (currently in public beta) could have a big impact on publishers who work with Facebook’s — at least, according to Facebook.

The company published a couple of blog posts yesterday outlining the potential impact of a major privacy change that Apple announced at WWDC — namely, the fact that Apple will explicitly ask users whether they want to opt-in before sharing the IDFA identifier with app developers, who can then use it to target ads.

In response, Facebook said it will not be collecting this data on its own apps, but it suggested that the bigger impact will be on the Facebook Audience Network, which uses Facebook data to target ads on other publishers’ websites and apps.

“Like all ad networks on iOS 14, advertiser ability to accurately target and measure their campaigns on Audience Network will be impacted, and as a result publishers should expect their ability to effectively monetize on Audience Network to decrease,” the company said. “Ultimately, despite our best efforts, Apple’s updates may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14.”

In fact, the company said that in testing, it found that without targeting and personalization, mobile app install campaigns brought in 50% less revenue for publishers, and it warned, “The impact to Audience Network on iOS 14 may be much more.”

To get a sense of how serious this might be, I reached out to a number of companies and investors in the adtech world. Ron Thomas, general manager for analytics at App Annie (which is moving into ad analytics), described this as “an acknowledgement from a top publisher that IDFA is truly gone and attribution in this post IDFA world is changing.”

And Brian Quinn, U.S. president and general manager at mobile ad attribution company AppsFlyer, said Facebook’s announcement is “a clear message to the market.”

“The possibility of losing Facebook Audience Network as a major source of revenue can potentially devastate the smaller publisher and developer communities on a global scale, which in turn would impact users worldwide that value and utilize apps as they navigate through their daily lives,” Quinn told me via email. “The ability to deliver relevant ads to users  – and prove their effectiveness through attribution – is integral for publishers and developers to build sustainable businesses around their apps and deliver quality content that users love.”

He went on to suggest that “it’s possible to give users control over their data and still provide developers transparency through privacy-centric attribution solutions.”

Others have been more skeptical about the way Facebook is framing the news. For example, famed gadget reviewer Walt Mossberg suggested that we’ll be seeing more “griping about this from Facebook and other leaders of the toxic ad tech privacy theft industry,” but he argued that rather than hurting publishers, all the change in iOS does is “give consumers clear choices.”

Similarly, Jason Kint of Digital Content Next (a trade body representing publishers like The New York Times and Condé Nast) scoffed that Facebook is “pretending to be the messenger of what’s good for publishers,” and he suggested that the company is using Audience Network publishers to deflect from its broader data collection practices.

“A majority of Facebook’s data collection happens across other company’s services and feeds the mothership,” Kint tweeted. (At the same time, Kint and his organization have other concerns about Apple’s control over the ecosystem.)

This isn’t the first time in recent weeks that Facebook has criticized Apple. Earlier this month, the company announced support for paid online events but complained that Apple wasn’t waiving its customary 30% fee. In both cases, Facebook’s language has been mild — but in the platitude-filled world of corporate PR, it still feels remarkable for the company to be challenging Apple so openly.

In a statement emailed to reporters, James Currier of venture capital firm NFX suggested that this conflict is a sign that history is repeating itself:

In 2009 at the beginning of the Facebook platform, you could build an app on Facebook, go viral and gain millions of followers. But Facebook slowly shut down all the viral channels and put an ad server in the way, meaning app creators had to pay to get traffic. Facebook extracted what money they could from the app developers. Similarly, at the beginning of the iOS platform, Facebook could be an app on iOS and get millions of users. Now Apple is going to slowly shut off the oxygen in order to take the value for themselves. This is the law of the jungle and the network effect makes it pretty clear who has the power: iOS.

Beyond Facebook, Apple and the publishers in the Audience Network, Eric Franchi of marketing- and media-focused VC MathCapital suggested that the changing landscape around privacy and ad-tracking is creating new opportunities for startups (including his own portfolio companies zeotap and ID5).

“Facebook’s commentary underscores a) how dependent the marketing ecosystem is on a couple of operating systems and platforms and b) the importance of user identification in making digital marketing work,” Franchi wrote. “We think there is opportunity here for new forms of consent-driven identity solutions to step up.”

Source: Tech Crunch

The reMarkable 2 improves on the original in every way, but remains firmly in its niche

I’d been asking for something like the reMarkable for a long time before it showed up out of the blue a few years ago. The device was a real treat, but had a few problems and an eye-popping price tag. The reMarkable 2 builds on the first with a more beautiful, streamlined device and several key new features, but keeps many of the limitations — some deliberate, some not so much — that make it a refreshingly specialty device. Costs a lot less this time around, too.

The reMarkable is intended to be a tablet for consuming and creating black and white (and grey) content: PDFs, sketches, jotted notes, that sort of thing — without all the distractions and complications of a full-on tablet or laptop. I certainly found that when I had a lot of content to get through and annotate, the device helped me focus, and it was useful for light note-taking and and other purposes ,like DMing a D&D game or sketching out a woodworking project.

The rM2, as I’ll call it, really is an improvement in pretty much every possible way. I’m honestly a bit baffled as to how they could make it thinner, faster, more battery efficient, better at pretty much everything, and yet drop the price from $600 to $400. Usually there’s some kind of trade-off. Not this time!

Specifically, the rM2 has the following major improvements:

  • Thinner (an already svelte 6.7mm reduced to 4.7mm; for comparison, an iPad is about 6mm)
  • Faster, dual-core ARM CPU (mainly for power savings)
  • Double the RAM (a gig, up from 512 MB)
  • Display response time halved to 21ms (comparable to LCDs)
  • Battery life more than tripled (a couple weeks, or months on standby, instead of a couple days)
  • Eraser on other end of stylus. Thank you!

What hasn’t been changed is the screen itself (that is, the resolution and contrast), the OS, and the general purpose of the thing.

The old and new remarkable e-paper tablets.

The new device, left, and old one. Image Credits: reMarkable

Let’s start with the new design. To be perfectly honest, I wasn’t taken with it at first. The original’s softer white plastic case felt more organic, while the new one’s asymmetric chrome is more gadgety.

But it’s grown on me as also being more purposeful and focused, though of course it also now is rather more suitable for a right-handed person than a left. The original’s three enormous buttons always seemed far too prominent for the amount of utility they offered. I did sometimes wish for a home button on the rM2, but a new gesture (swipe from the top) takes care of that.

Side view of The reMarkable e-paper tablet, the earlier version, and an iPad

Image Credits: Devin Coldewey / TechCrunch

The power button at the top of the chrome strip is tiny, perhaps too tiny, but at least you won’t hit it by accident. The USB-C charge port is opposite the power button, on the bottom, and well out of the way of anywhere you’ll hold it, making charging while using easy (though you probably won’t need to).

Powerful magnets on the right side hold the stylus with a tight grip but no visible markings. Said stylus, I should add, is a very nice one indeed, with a weighty feel and rubberized finish. The new eraser function works great — definitely spring for it if you’re thinking about getting one of these.

The reMarkable e-paper tablet, with stylus erasing a scribble

Image Credits: Devin Coldewey / TechCrunch

On the back are four tiny rubberized feet that serve to prevent it scooting across the table while naked, and which help align the tablet perfectly in its folio case. Projections like these on such a thin, smooth device bother me on some level — I tried to peel them off first thing — but I understand they’re practical.

Overall the rM2 is extremely streamlined, and while it’s significantly heavier than the first (about 400 grams, or .89 lb, versus 350g, both lighter than the lightest iPad) it isn’t heavy by any stretch of the imagination. The bezel is big enough you can grip or reposition the device easily but not so large it takes over. I could have done with maybe a little less but I’m picky that way.

Don’t get me wrong — I’m just a real stickler for industrial design. The flaws I’ve mentioned here are nothing compared with, say, the straight-up-ugly iPhone 11. The rM2 is a striking device, more so than the first, and it does a great job of both disappearing and showing strong design choices.

Image Credits: Devin Coldewey / TechCrunch

The display is the same as the first, and as such is not quite at today’s e-reader levels when it comes to pixel density and contrast. E-readers from Kobo and Amazon hit 300 pixels per inch, and reMarkable’s is down at 226. Sometimes this matters, and sometimes it doesn’t. I’ve found that certain fonts and pen marks show lots of aliasing, but mostly it isn’t noticeable because as a larger device one tends to hold it farther from their face.

There’s no frontlight, which I understand is a deliberate choice — you’re supposed to work with this thing under the same lighting you’d use for a paper document. Still, I felt its absence occasionally when reading.

I can vouch for the new battery lasting much, much longer. I’ve only had the device for a week or so, meaning I can’t speak to the months of standby, but I was always disappointed by the original’s need for frequent charging and this one has been far better.

It is also much faster to turn on and off. The original went to sleep and shut down after rather too short a delay and took a while to start up. The rM2 turns on instantly from sleep and takes about 20 seconds to boot from a full off state. Fortunately it doesn’t need to be turned off, or turn itself off, anywhere near as often as its predecessor. Removing these on/off and battery worries really goes a long way towards making this a practical device for a lot of people.

An excellent endless legal pad and PDF tool

An annotated PDF on the remarkable tablet.

You can write neatly, I just don’t. Image Credits: Devin Coldewey / TechCrunch

Where the rM2 succeeds best is as a reader for full-page documents like scientific papers, legal documents, and reports, and as a rough sketchpad and notebook with the chief benefit of having effectively unlimited pages.

For reading, the experience is not very different from the original device. It works with fairly few formats, and PDF the best. You can skim through pages, annotate with the pen, and highlight text — though annoyingly you’re still just painting the text with a translucent layer, not digitally selecting/highlighting the text itself.

You can search for text easily and navigation is straightforward, though I’d like the option to tap and go to the next page rather than swipe. Changes are synced to the document in the reMarkable app, where you can easily export a modified version, though again you can’t directly select text.

Writing and drawing on the screen feels great — better than before, and it was already the best among e-paper devices. The iPad Pro beats it for full-color illustration, naturally, but the idea isn’t to meet the capabilities of other tablets, it’s to provide the intended features well.

Image Credits: Devin Coldewey / TechCrunch

The feel of the screen is smoother than the first reMarkable, but the texture change isn’t necessarily bad — one thing I could never quite get away from on the first was, due to its texture, the feeling that I was scratching the screen when I wrote. Nothing like that here, though the tactility is slightly less. As for the lower latency, it’s noticeable and unnoticeable at the same time: Certainly it’s better than all the other e-paper devices I’ve tested, including the first reMarkable. But even 21ms is noticeable and affects the way you write or draw. It isn’t “just like paper,” but it is pretty awesome.

I would never try to replace the small pocket notepad I use during interviews, but at a meeting or brainstorm I would much rather use this. The space you have for making little groups of names, flowcharts, random things to look up later, doodles of your boss, and so on is so vast and so easily accessible that it almost makes me wish I went to more meetings. Almost!

I realize showing this on video would be helpful to some, but the truth is even on video it’s hard to get a sense of how it looks and feels when you’re actually doing it. It feels more responsive than it looks.

A clutch new feature for writing and drawing is the integration of an eraser tip on the other side of the stylus. It works automatically, feels rubbery like a real eraser, and saves you a trip to the pen menu. Unfortunately you still have to open that menu to get to “undo,” which is sometimes preferable to erasing. Given the whole screen is multi-touch capacitive, I don’t see any reason why something like a two-finger leftward swipe can’t be mapped to undo, or double-tapping the eraser in an empty space.

Side view of the remarkable with stylus attached

Image Credits: Devin Coldewey / TechCrunch

Handwriting recognition is helpful, not that I have taken a whole lot of notes with the rM2, but it’s easy to see how it saves time when transferring mixed-media pages to your computer. It’s not like it would take you that much time to spell out the email address or name someone mentioned, it’s just nicer to be able to hit a button and it’s ready to copy and paste.

I definitely experienced transcription errors, but honestly, even I can’t tell my “u” and “n” or “r” and “v” apart all the time. I have a draggy style of longhand so I needed to focus a bit on picking up the pen from the surface rather than letting it trail at the lowest level of pressure.

A so-so e-reader

Text options on the remarkable tablet

Image Credits: Devin Coldewey / TechCrunch

One aspect of the original reMarkable that didn’t thrill me was the handling and display of e-books and other pure text content. The rM2 improves on this and adds a very useful new time-shifting feature, but it still falls behind the competition.

The fact is that the reMarkable isn’t really intended for reading books. It’s formatted for content that’s already meant to be displayed as a full page, and it does that well. When it has to do its own text formatting the options are a little thinner.

With six fonts and six sizes per font, and three options each for margins and spacing, room for customization is low. The two most book-like text sizes seem to be “slightly too large” and “slightly too small,” while the others are comically huge, appearing larger than even a large-print book would have them.

Image Credits: Devin Coldewey / TechCrunch

Several epub books I loaded onto the tablet failed in various ways. Initial tabs on paragraphs didn’t render; in-text links didn’t work; line spacing is uneven; large white spaces appeared rather than partial paragraphs. The team needs to take a serious look at their e-book renderer and text options, and I’m told that they are in fact doing so, but that writing, drawing, and of course the new hardware have taken up their resources.

It’s less of an issue with articles gleaned from the web with the new Chrome extension. These are more consistently formatted and make articles read more like magazine pages, which is perfectly fine. I do wish there were options for a two-column view or other ways to customize how the pages are transcoded. I give reMarkable a pass on this because it’s a new feature they’re still building out and it works pretty well.

No chance, unfortunately, for integration with Pocket, Simplenote, Evernote, or any of the other common services along these lines. For better or worse reMarkable has chosen to go it alone. reMarkable as a company is wary of making the device too complex and too integrated with other things, since the entire philosophy is one of removing distractions. That makes for a unified experience, but it hurts when a feature is simply not as good as the competition with which the company has voluntarily entered competition.

Image Credits: Devin Coldewey / TechCrunch

One serious gripe I have, and one which will surely bother reMarkable’s existing customers, is that you can only have one device active at a time per account. Yes: If you bought the first, you essentially have to disable it in order to set up the second.

This is a huge problem and a missed opportunity as well. For one thing, it’s a bit cruel to essentially throw their oldest customers under the bus. You could probably figure out a workaround but the simple fact that the old device has to be kicked off the account is bad. Because it could so easily have been very useful to have two of these things. Imagine keeping one at work and one at home, and they stay in sync, or sharing an account with a partner and sending documents or handwriting back and forth.

I asked the company about this and it seems that it is a technical limitation at this time, and that multiple devices are on the roadmap to support. But for anyone planning on buying an rM2 now, it’s a material consideration that your original device will no longer be usable by you, or at least not in the same way — it isn’t bricked or anything, it just won’t sync with your account.

Hope and dreams (and hacks)

As before, what is exciting about the reMarkable 2 is not just what it does, but what it could do. The company has significantly expanded what the ecosystem supports over the last couple years, improved performance, and responded to user requests. Most of my complaints are things the team is already aware of, since they have an engaged and outspoken community, and are somewhere on the roadmap to be fixed or added.

There is also a healthy hacking community putting together new ways to take advantage of such promising hardware — though of course with the usual caveat that you could brick it if you’re not careful. If reMarkable doesn’t want to build an RSS reader into the device because of their fundamental philosophy against such a thing, someone will probably make one anyway. I look forward to experimenting with the device not as a carefully tuned platform but as an all-purpose greyscale computer.

The previous reMarkable was a very interesting device but one that was rather difficult to recommend widely at launch. But the company has proven itself over the last couple years and the device has grown and solidified. This upgraded version, better in nearly every way yet a third cheaper, is much, much easier to recommend. If you are interested in exploring a more paperless world, or want to force yourself to focus better, or just think this thing sounds cool, the reMarkable 2 is a great device to do it with.

Source: Tech Crunch