Month: August 2020

Bletchley Park is an English country house that became the principal centre of Allied code-breaking during the Second World War. It built the world’s first programmable digital electronic computer, cracking the Enigma Machine and thus helping turn the tide of the war against Nazi Germany. But now the institution that preserves that history is in trouble.

The Bletchley Park Trust which runs the site today, which also houses the UK’s National Museum of Computing, has been hit by the financial impact of the coronavirus crisis. It’s now lost over 95% of its income leaving a large gap in its annual budget.

Without any action or external aid, the organization will lose £2m this year as a result of the pandemic and be forced to make a possible 35 redundancies (approximately a third of its workforce) in order to survive.

In a statement Bletchley Park CEO Iain Standen said: “It is with deep regret that I am informing you today that the Trust needs to cut jobs. We have built a very successful heritage attraction and museum at Bletchley Park and its principal strength is its people. However, the economic impact of the current crisis is having a profound effect on the Trust’s ability to survive. We have exhausted all other avenues, and we need to act now to ensure that the Trust survives and is sustainable in the future.”

Bletchley Park closed to the public on 19 March 2020, but reopened 4 July 2020 but with vastly fewer paying visitors.

Source: Tech Crunch

Edtech’s reputation has been revitalized due to the coronavirus pandemic, which forced millions of students to adopt remote education overnight. But behind the scramble is a crop of investors who have long invested in the space — before it became cool.

To better understand what’s ahead, what’s hot, and what’s not, I’m talking to a trio of top investors in edtech at TechCrunch Disrupt: Ian Chiu of Owl Ventures, Mercedes Bent from Lightspeed, and Jennifer Carolan from Reach Capital. Between the three of them, they have stakes in category-defining upstarts like Byju, Masterclass, Quizlet, Newsela, Labster, Winnie, and Outschool.

While we’ll most definitely get into the billions at stake between the three, I’m most excited about how these three individuals have welcome and contrasting synergies at play. As we all play catch up, their intentional focus on the sector before it was hot will bring a fantastic level of depth that’s impossible to manufacture.

Mercedes Bent, for example, has worked in almost every startup role that exits out here: operations, customer service, talent and recruiting, product management, design, sales, marketing, strategy, and general management, according to Lightspeed. She spent the last eight years working in or around the career mobility space, including nearly five years at General Assembly. Bent tells me her love for education is the personal role it played in her life, from her grandparents to parents teaching the importance of invention and learning starting at an early age.

“Given the coronavirus’ effect on education, I’m spending more time here than normal. Prior to March, I spent about a third of my time in edtech, and now I am spending almost all my time here,” she tells TechCrunch.

Ian Chiu is the child of immigrant parents who came to the United States and pursued education degrees, a move he says has made the sector a focus early on for him.

His record shows the early commitment. Chiu was the lead author on a book about scholarships and rising college costs, published nearly two decades ago. Before joining Owl, Chiu worked at Bain & Company, Silver Lake Partners, and Warburg and Pincus.

“We find ourselves in a watershed moment for the $6 trillion education market as the rising digital penetration in the sector that had already been taking place has surged in these unprecedented times,” he said.

Finally, Jennifer Carolan will bring an on the ground perspective to the Extra Crunch stage. Carolan worked in Chicago’s public school for 7 years before going to Stanford and eventually breaking into venture.

“There is no doubt that schools will look different post-virus. This pandemic has made parents/guardians acutely aware of just how challenging and technical the role of the teacher is. It has also highlighted the custodial function of our schools — 92% of our nation’s 50 million school children attend our public schools,” she said.

Carolan’s notes shed light on a common balance within edtech: how to get venture-scale returns with companies that are creating solutions for all families, not just rich and privileged ones.

For the first time, TechCrunch’s big yearly event, Disrupt, is going fully virtual in 2020, allowing more people to attend and interact with speakers, investors and founders. And Disrupt will stretch over five days — September 14-18 — in order to make it easier for everyone to take in all the amazing programming. Prices increase soon, so get your pass now and then submit your pitch deck for invaluable feedback from our panel of VCs.

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Source: Tech Crunch

Rocket Lab has made a remarkable recovery after losing a payload during a mission failure on July 4 – just eight weeks later, the company has set a launch window for its next dedicated commercial mission that spans 12 days beginning August 27 at 3:05 PM local New Zealand time.

At the end of July, Rocket Lab revealed that it had received crucial FAA clearance to resume its launch activities, following an internal investigation that lasted a month and identified the root cause – a component that had performed fine previously, but that somehow hadn’t undergone rigorous and thorough testing. Rocket Lab founder and CEO Peter Beck noted that they’d be able to mitigate the problem with a relatively simple change to their production process, and even remedy the component on existing, already-produced Electron launch vehicles.

Rocket Lab’s quick turnaround on this resolution and return to active launch status also has to do with the nature of the problem – the error actually resulted in an early, but safe shutdown of the Electron’s engines, which meant that it didn’t reach its target orbit. The rocket didn’t explode, however, or cause any kind of safety risk. That also meant Rocket Lab was able to easily pull data about the issue that caused the failure after the engines cut off.

Other companies have endured much longer shutdown times following launch vehicle failures: SpaceX took four months to return to active flights after its 2016 pre-flight loss of a Falcon 9 with a Facebook internet satellite on board. That was a very different kind of failure, however, for all the reasons mentioned above.

Still, it’s a sign of the resilience and flexibility of Rocket Lab’s model that it’s already set to begin serving paying customers again the month following its own ordeal. This launch won’t further its efforts to develop a partly reusable launch system with a booster recovery process, however.

Source: Tech Crunch

Apple has filed legal documents opposing Epic’s attempt to have itself reinstated in the iOS App Store, after having been kicked out last week for flouting its rules. Apple characterizes the entire thing as a “carefully orchestrated, multi-faceted campaign” aimed at circumventing — perhaps permanently — the 30 percent cut it demands for the privilege of doing business on iOS.

Epic last week slyly introduced a way to make in-app purchases in its popular game Fortnite without going through Apple. This is plainly against the rules, and Apple soon kicked the game, and the company’s other accounts, off the App Store. Obviously having anticipated this, Epic then published a parody of Apple’s famous 1984 ad, filed a lawsuit, and began executing what Apple describes quite accurately as “a carefully orchestrated, multi-faceted campaign.”

In fact, as Apple notes in its challenge, Epic CEO Tim Sweeney emailed ahead of time to let Apple know what his company had planned. From Apple’s filing:

Around 2am on August 13, Mr. Sweeney of Epic wrote to Apple stating its intent to breach Epic’s agreements:
“Epic will no longer adhere to Apple’s payment processing restrictions.”

This was after months of attempts at negotiations in which, according to declarations from Apple’s Phil Schiller, Epic attempted to coax a “side letter” from Apple granting Epic special dispensation. This contradicts claims by Sweeney that Epic never asked for a special deal. From Schiller’s declaration:

Specifically, on June 30, 2020, Epic’s CEO Tim Sweeney wrote my colleagues and me an email asking for a “side letter” from Apple that would create a special deal for only Epic that would fundamentally change the way in which Epic offers apps on Apple’s iOS platform.

In this email, Mr. Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified.

One prong of Epic’s assault was a request for courts to grant a “temporary restraining order,” or TRO, a legal procedure for use in emergencies where a party’s actions are unlawful, a suit to show their illegality is pending and likely to succeed, and those actions should be proactively reversed because they will cause “irreparable harm.”

If Epic’s request were to be successful, Apple would be forced to reinstate Fortnite and allow its in-game store to operate outside of the App Store’s rules. As you might imagine, this would be disastrous for Apple — not only would its rules have been deliberately ignored, but a court would have placed its imprimatur on the idea that those rules may even be illegal. So it is essential that Apple slap down this particular legal challenge quickly and comprehensively.

Apple’s filing challenges the TRO request on several grounds. First, it contends that there is no real “emergency” or “irreparable harm” because the entire situation was concocted and voluntarily initiated by Epic:

Having decided that it would rather enjoy the benefits of the App Store without paying for them, Epic has breached its contracts with Apple, using its own customers and Apple’s users as leverage.

But the “emergency” is entirely of Epic’s own making…it knew full well what would happen and, in so doing, has knowingly and purposefully created the harm to game players and developers it now asks the Court to step in and remedy.

Epic’s complaint that Apple banned its Unreal Engine accounts as well as Fortnite related ones, Apple notes, is not unusual considering the accounts share tax IDs, emails, and so on. It’s the same “user,” for their purposes. Apple also says it gave Epic ample warning and opportunity to correct its actions before a ban took place. (Apple, after all, makes a great deal of money from the app as well.)

Apple also questions the likelihood of Epic’s main lawsuit (independent of the TRO request) succeeding on its merits — namely that Apple is exercising monopoly power in its rent-collecting on the App Store.

[Epic’s] logic would make monopolies of Microsoft, Sony and Nintendo, just to name a few.

Epic’s antitrust theories, like its orchestrated campaign, are a transparent veneer for its effort to co-opt for itself the benefits of the App Store without paying or complying with important requirements that are critical to protect user safety, security,
and privacy.

Lastly Apple notes that there is no benefit to the public interest to providing the TRO — unlike if, for example, Apple’s actions had prevented emergency calls from working or the like, and there was a serious safety concern:

All of that alleged injury for which Epic improperly seeks emergency relief could disappear tomorrow if Epic cured its breach…All of this can happen without any intervention of the Court or expenditure of judicial resources. And Epic would be free to pursue its primary lawsuit.

Although Apple eschews speculating further in its filings, one source close to the matter suggested that it is of paramount importance to that company to avoid the possibility of Epic or anyone else establishing their own independent app stores on iOS. A legal precedent would go a long way towards clearing the way for such a thing, so this is potentially an existential threat for Apple’s long-toothed but extremely profitable business model.

The conflict with Epic is only the latest in a series going back years in which companies challenged Apple’s right to control and profit from what amounts to a totally separate marketplace.

Most recently Microsoft’s xCloud app was denied entry to the App Store because it amounted to a marketplace for games that Apple could not feasibly vet individually. Given this kind of functionality is very much the type of things consumers want these days, the decision was not popular. Other developers, industries, and platforms have challenged Apple on various fronts as well, to the point where the company has promised to create a formal process for challenging its rules.

But of course, even the rule-challenging process is bound by Apple’s rules.

You can read the full Apple filing below:

Epic v. Apple 4:20-cv-05640… by TechCrunch on Scribd

Source: Tech Crunch

As a founding member of TI Platform Management, I have quarterbacked more than $200 million in investments into first-time fund managers around the world. That portfolio includes being one of the first institutional checks into Atomic Labs ($170+ million, SaaStr ($160+ million) and Entrepreneur First ($140+ million), among many others.

Having seen successful returns as a fund manager and an early-stage VC (as well as recently raising my own angel fund), I’ve formulated several best practices and strategies for investing in fund managers. If you want to raise your first fund, here’s how.

Understand the mentality of an LP

Just as VCs bucket startup founders into categories, limited partners (the investors in your venture fund, also known as “LPs”) have an unwritten way of categorizing venture managers. The vast majority fit one of three archetypes:

• Former founder/operator turned VC
• Spin-off manager from a mega fund
• Angel investor with a strong track record

Here’s how each is perceived by institutional LPs and the unique blockers they have to overcome:

Former founder/operator turned VC

Having been through the journey of starting a company, former founders/operators often have strong intuition in identifying founders and an empathy/rapport that raises their win-rate on deals. Additionally, having built an innovative company, they can bring special insights in where the market is headed. Building a company, however, requires different skills from founding a fund.

If you’re a former founder/operator turned VC, expect LPs to ask questions that suss out:

Source: Tech Crunch

So you’re looking for a storage unit to put some stuff in for a few months. Maybe you’re moving and your new place isn’t ready yet — or maybe you’re just looking to declutter and want to tuck some stuff away for a while and see if you’re really ready to part with it.

As you may find, the process of finding a storage unit can be… not great. While there are a few big storage chains in the market, a huge chunk of the self-storage industry is made up of independent/mom-and-pop shops that don’t necessarily have the time/budget to keep up as tech has evolved. It can involve a lot of poking around out-of-date websites, a lot of phone calls and a lot of paperwork.

OpenUnit, a startup out of Toronto, wants to fix that. They’re aiming to be Shopify for the self-storage industry, with an all-in-one solution that provides a modern interface to help customers make reservations on the front end, and gives facility managers everything they need to keep things running on the back end.

Their management tool provides things like:

• A white-labeled site for making reservations
• Unit inventory management
• Expense tracking
• Group chats/DMs to give employees and managers a place to keep in touch
• Pricing/revenue analytics
• Digital lease signing
• A CRM for managing leads and existing relationships

The company isn’t charging facility managers a monthly fee; instead, they’re handling credit card payment processing and taking a cut of 2.9% (+ 30 cents) per transaction.

Co-founders Taylor Cooney and Lucas Playford found their way into self-storage when Taylor’s landlords came to him with an offer: they wanted to sell the place he was renting, and they’d give him a stack of cash if he could be out within just a few days. Pulling that off meant finding a place to keep all of his stuff while he looked for a new home, which is when he realized how antiquated the self-storage process could be.

The two initially set their sites on something a bit different: a Hotwire-style search system that would find deals on local storage units, negotiating the monthly cost on a customer’s behalf for a small one-time fee. The more they worked with facility managers, the more gaps they found in the tools and systems on the market, so they shifted focus to this facility management suite.

OpenUnit was part of the Winter 2020 Y Combinator class which ended back in March, but the team opted to defer their demo day debut until YC’s Summer 2020 event next week. As March came to an end and the severity of the pandemic was becoming more clear, Canadian Prime Minister Justin Trudeau called upon any citizens abroad to return home sooner than later. Launching a company while rushing to get back home is hardly ideal, so the two chose to hold off their launch until now.

After a few weeks of private testing, OpenUnit is now starting to bring more storage facilities on board. Run a storage company and want to give it a look? They’ve got a waiting list here.

Source: Tech Crunch

It has been nearly a decade since Anu Duggal, founding partner of Female Founders Fund, started raising money to invest in women-led startups. In 2020, the investor says her thesis — that there will be a generation of successful venture-backed businesses built by women — is one you can’t avoid.

“You can’t argue with that anymore,” she said. “There are going to be some people who take a little longer to kind of accept that this is a long-term development, and there’s some that have recognized this is the future.”

We brought Duggal on to Extra Crunch Live on Thursday to discuss how her work is changing amid unprecedented times.

She, like many investors, says she has taken on the “new normal as the new normal” and is invested in startups without ever meeting founders in-person. But how does the breakdown of traditional networks impact female founders?

“I wouldn’t say we’re seeing new tailwinds yet,” she said, on the focus to invest in female founders. “I think we’re still kind of in the early innings of corona. I will say, though, that there’s reason to be optimistic.”

Duggal talks about bright spots in this dumpster fire of a year, scout programs and the “lipstick effect” in the full session, which is available below. You can sign up for Extra Crunch here if you still need access.

Should investors publicly share portfolio diversity data?

We felt strongly about disclosing diversity data because, you know, we invest 100% in companies started by women and so we’re already at somewhat of an advantage compared to most of the industry. I think the reason we did it was to show that we’re not patting ourselves on the back. We still have more work to do. And here’s what we’re going to do, here are the action steps we’re taking.

Source: Tech Crunch