UN’s IPCC report on climate change sounds “code red” for planet

A major UN scientific report has concluded that human activity is changing the climate at an unprecedented rate. The report has been describe as a “code red for humanity” by its authors.

The UN’s Intergovernmental Panel on Climate Change (IPCC) is stern and blunt in its conclusions: “It is unequivocal that human influence has warmed the atmosphere, oceans, and land,” it says.

The IPCC — a grouping of scientists whose findings are endorsed by the world’s governments — warns of increasingly extreme heatwaves, droughts, and flooding and a key temperature limit being broken inside the next decade.

This “means that the world will hit one-and-a-half degrees warming much earlier than expected, possibly the middle of 2034” says the report.

The IPCC says going past 1.5 C will create more intense and more frequent heat waves.

Prof. Ed Hawkins, from the University of Reading, U.K., one of the report’s authors said: “It is a statement of fact, we cannot be any more certain; it is unequivocal and indisputable that humans are warming the planet.”

However, the scientists say a catastrophe can be avoided if the world acts fast, and, with deep cuts to the emissions of greenhouse gases, could stabilize rising temperatures.

And scientists are hopeful that global emissions can be cut by 2030 and reach net zero by the middle of this century.

The report is the first major review by the IPCC since 2013 and comes less than three months before the COP26 climate summit in Glasgow.

Read more of TechCrunch’s most recent climate and sustainability coverage:

IPCC report key points

  • 1.5 C will be reached by 2040 in all scenarios unless emissions aren’t slashed in the next few years.
  • Keeping to 1.5 C will require “immediate, rapid and large-scale reductions” in emissions and slower action leads to 2 C and more suffering for all life on Earth.
  • Human influence is “very likely” (90%) the main driver of the global retreat of glaciers since the 1990s and the decrease in Arctic sea ice.
  • Heat waves have become more frequent and more intense since the 1950s, while cold events have become less frequent and less severe.
  • There will be likely increases in “fire weather” in many countries.
  • Drought is increasing in more than 90% of regions.
  • Global surface temperature was 1.09 C higher in the decade between 2011-2020 than between 1850-1900.
  • The past five years have been the hottest on record since 1850.
  • The recent rate of sea-level rise has nearly tripled compared with 1901-1971.
  • A rise of around 2 meters in sea levels by 2100 cannot be ruled out — and neither can a 5-meter rise by 2150, threatening millions of people in coastal areas.
  • Extreme sea-level events that occurred once a century are projected to occur at least annually.

Under all the emissions scenarios considered in the report, all targets for reductions targets will be broken this century unless huge cuts in carbon emissions take place.

Solutions proposed by the scientists include using clean technology, carbon capture and storage, or planting trees.

Another co-author, Prof. Piers Forster from the University of Leeds, U.K., was quoted as saying: “If we are able to achieve net-zero, we hopefully won’t get any further temperature increase; and if we are able to achieve net-zero greenhouse gases, we should eventually be able to reverse some of that temperature increase and get some cooling.”

The IPCC report found that 2,400 billion tonnes of CO2 have been emitted by humanity since 1850, and that we can only leak another 400 billion tonnes to have a 66% chance of keeping to 1.5 C.

This means the planet has spent 86% of its carbon “budget” already.

Furthermore, no one is safe from the effects of climate change.

“We can no longer assume that citizens of more affluent and secure countries like Canada, Germany, Japan, and the U.S. will be able to ride out the worst excesses of a rapidly destabilizing climate,” says Prof. Katharine Hayhoe, chief scientist at The Nature Conservancy. “It’s clear we’re all in the same boat — facing a challenge that will affect every one of us within our lifetimes.”


Source: Tech Crunch

How Twilio is moving beyond a diversity numbers game toward becoming an anti-racist company

When George Floyd was murdered in May 2020, it set off a firestorm of protests and shed a bright hot spotlight on the issues of racism in America and elsewhere. As a response, many companies gave messages of support to people of color, yet have failed to make substantive change since that time. One company that is attempting to move beyond lip service and diversity quotas is Twilio, whose CEO Jeff Lawson has made a commitment to work toward being an anti-racist company.

As part of that commitment, he hired Lybra Clemons, who has years of experience in corporate diversity jobs, as chief diversity officer and the two of them have worked together with the rest of the executive team to try and execute the company’s anti-racist vision.

It’s a complex and challenging task to parse personal bias and institutional and societal racism and try to build a company that actively works to combat all of this, but Lawson and Clemons seem determined to be an example to all tech companies.

As part of this effort, the company published a diversity report recently, partially to document its progress and partly to share some of the lessons it has learned as it goes on this journey to build a better and more inclusive company.

I spoke to both executives to learn about their efforts and how they think about anti-racism, deal with it on multiple levels from personal to business to societal — and how the work is never really done.

Making the effort

Clemons said that when she came on board in September 2020, it was part of an overall effort on the part of Lawson and the executive team to commit to being anti-racist, and part of her job was to help define what that meant. In part, it was an effort to move beyond some of “the perfunctory responses” from other companies, but also an honest attempt at trying to do something different to improve how they hired people, and the systems they put in place to make people feel welcome and succeed, regardless of who they were, what they looked like or where they came from.

“I’m not saying that all companies are like that, but there were a lot of perfunctory responses [after George Floyd was murdered],” Clemons told me. “I do believe that there was a full-on commitment [at Twilio] to figure out what it means to become an anti-racist company, [figuring out what] anti-racism means — which we are grappling with right now — and, if we use that lens, how we’ll be able to approach diversity, equity and inclusion in a different way.”

Lawson says that this isn’t something he just picked up on in the wake of George Floyd’s murder. He has been thinking about this for a long time. One of Twilio’s early backers was Kapor Capital. The firm’s principals, Mitch Kapor and Freada Kapor Klein, who have been preaching about diversity and inclusion for decades, encouraged Lawson to come to meetings with other founders to discuss diversity in the early days of the company, which was founded in 2008.

In an interview in 2017, Kapor Klein told TechCrunch about the importance of establishing a positive culture as early as possible in a startup’s evolution because it becomes much harder, the larger you get as a company.

“It’s almost impossible to overemphasize the importance of intentionally building a positive culture from the start. Finding time to articulate values, principles and how you want to be known is critical. There’s always too much to do, but retrofitting culture or diversity and inclusion in a big company is much harder,” she said at the time.

Lawson says these early meetings with the Kapors and other startup founders helped plant the seeds about the kind of company he wanted to build. He realized at the time that as focused as he was on building the successful business his startup would become, there was no perfect time to start thinking about DEIB (diversity, equity, inclusion, belonging), and it was his responsibility as the leader of his startup to begin thinking about it right then and there, before, as he said, “the company was a thousand white men.”

That thinking evolved over the last year on how to build an anti-racist company, a concept he picked up by reading the book ‘How To Be An Antiracist’ by Ibram X. Kendi, and he is committed to that approach.

“Anti-racism just speaks to the fact that there are systems, institutionalized systems in any society … that biases certain people over others, and that can be done intentionally or unintentionally, and the work of anti-racism is to say, let’s try to do the work and to identify what those systems are, and then ask how we can combat that,” Lawson said.

Using data to move, not prove

Clemons says that throughout the mid-2000s, the standard way of looking at diversity was simply to look at the data and pat yourself on the back if you reached your diversity goals, but she said that she wanted to help Twilio use the data to move beyond that approach to use data to drive substantive change at the company.

“The data is helping us understand that either we increased or we didn’t increase in this particular demographic or population. So how do we use the data to actually move and make some changes or shifts to our policies or practices and so forth,” she said.

“This is a full journey of really understanding the history of the U.S., the history of the world as it relates to racism, colonialism, all of the -isms, colorism and homophobia, and addressing that. Figuring out what our choices are, our individual stakes in them and then using that as a way to build out anti-racist policies and practices to actually start to make some shifts in our diversity, equity and inclusion strategy.”

In a story earlier this year about Valence, a startup with the goal of advancing Black professionals in the workplace, company CEO Guy Primus said he wants to help companies move beyond the numbers game that Clemons referenced.

“People want the numbers to go up, and there’s [this notion of] recruit, retain and promote. The problem is that everyone is focused on the recruiting pipeline, but they’re not focused on retention and promotion, which ultimately affects recruiting. So it’s an ecosystem problem, not a pipeline issue,” Primus told TechCrunch at the time.

That’s an area where Twilio is moving into actionable programs to help move beyond simply recruiting, although that’s clearly part of it, and helping build a company where every employee feels appreciated, that they can succeed based on their skills, and that they truly belong.

The Twilio report cites a number of specific programs to help make this happen.

One is called Hatch, which launched in 2017. Hatch looks for folks from non-traditional backgrounds who have been through a coding boot camp and puts them in a six-month apprenticeship program. The program is designed to teach them more advanced coding skills and learn what it takes to be a successful coder with coaching and mentorship.

Lawson says that as of last year, 93% of the folks who came through this program are still with the company. That’s a track record that suggests people are coming into the company, which is putting systems in place to help ensure their success.

Other programs include Rise Up, which helps Black and Latinx employees move into management positions via a leadership development program, and Twilio Unplugged, which teaches candidates from historically excluded backgrounds how to succeed in a tech company interview process to get through that initial step to get hired.

These and so many more programs are designed to help achieve the company’s anti-racism goals. Lawson is the first to admit that it is not a perfect system, and that with the help of Clemons and others, he and the rest of the executive team are still working and learning and trying to build a company where everyone can succeed and everyone feels a part of the team.

Twilio is still 60% male and just over 38% female, a number that was up 6% in 2020. The overall racial and ethnic makeup of the company is around 51% white, 26% Asian, 6.5% Latinx and 5.5% Black. While the ratio of whites to nonwhites is quite favorable, with a large percentage of Asians, it still has work to do when it comes to other historically excluded groups.

Twilio work demographics chart.

Image Credits: Twilio

The company certainly understands that. Lawson says that by working on an individual, company and societal level, Twilio hopes to do its part to improve its own record and continue to get better at this. Part of that is sharing what they’ve learned in the report, not to pat themselves on the back, but to bring the conversation outside the company.

As Clemons said in the video that accompanied the company’s diversity report: “Everyone has their experience. Everyone comes in with all types of experiences, whether good or bad, and we cannot change that, but what Twilio can do is provide a space for those to feel like they are part of something, and it goes back to this anti-racist framework of ensuring that there’s equity for all people to feel like they can have a great career and a great career journey at Twilio.”


Source: Tech Crunch

Car-sharing startup Turo has filed confidentially for an IPO

Turo, the peer-to-peer car-sharing startup, has initiated the confidential process of filing for an initial public offering with the U.S. Securities Exchange Commission.

The number of shares to be offered in the IPO and the price range have not yet been determined, the company said in a statement. Turo declined to provide additional information to TechCrunch.

The eleven-year-old Turo’s marketplace is analogous to Airbnb, letting car owners post an ad to rent out their vehicle on its app and website. Cars are available to rent in more than 5,500 cities across three countries. Turo was in Germany after taking over Daimler AG’s car-sharing subsidiary Croove alongside an investment deal. The company is no longer in Germany.

The company had a $250 million Series E in July 2019, which pushed the company into unicorn status and “past the billion-dollar valuation mark,” CEO Andre Haddad said in a blog post. Turo followed that up with a $30 million extension round the following February, bringing its total funding to date to over $500 million.

Turo did not have a completely smooth ride during the pandemic; like other transportation startups Bird and Getaround, Turo laid off 30% of its workforce, or 108 employees, in March 2020 according to data tracker Layoffs.fyi.


Source: Tech Crunch

Pixels, Palm readers and Pokémon problems

Hello friends! That’s what Lucas always starts off with, right?

Lucas is out for a few weeks, so I’ll be handling Week In Review until he’s back. TL;DR on me: I’m Greg, and I’ve been with TechCrunch for a long, long time. I joined around the time Twitter found the vowels in its name and people thought Facebook’s valuation was laughably high at $15 billion. (For reference, Facebook’s market cap broke $1 trillion last month.)

Enough about me! Want this in your inbox every week? Sign up here. Oh and by the way, Sarah Perez’s popular This Week In Apps column is now a weekly newsletter. Sarah rules and does a damned good job of wrapping up everything you need to know about the world of apps, so be sure to sign up, so you can get it in your inbox every Saturday morning.

And now, here’s a quick overview of what you might’ve missed this week.

The Big Thing

Image Credits: Bryce Durbin / TechCrunch

While Zoom has been around since 2011, its growth in 2020 was just on a whole different level. The pandemic blasted Zoom into the product-name-as-a-verb hall of fame pretty much overnight, with “let’s Zoom next week” joining the ranks of “Xerox this for me?” or “Photoshop it” or “Google it.”

With rapid growth, of course, comes growing pains.

Among these pains was a significant uptick in trolling. The idea of “Zoombombing” was born, wherein unapproved attendees crash a Zoom call and flood it with nasty images, hate speech, and whatever else they can blast out before the moderator (often unfamiliar with Zoom’s interface) figures out how to lock it down.

By April of 2020, Zoom had tweaked its settings to make meetings a bit less zoombomb-able by default — but by that point, a lawsuit had already been filed. Fourteen lawsuits were filed, in fact, and later condensed into one. The suits argued that the company hadn’t done enough to prevent Zoombombing, as well as shared user data with third parties without the user’s permission.

This week Zoom agreed to an $85 million settlement, along with a promise to add even more safeguards against would-be crashers. It’s an interesting example of how massive/sudden popularity can cause all new problems … but, well, considering that Zoom’s market cap went from $34 billion in March 2020 to $118 billion as of this week, I doubt anyone there is too crushed about it.

Other Things

Google previews the Pixel 6

Google’s next flagship Android phone is coming! When? TBD. How much? Good question! The company held back an unusual number of details in its first official acknowledgement of the Pixel 6’s existence, presumably to keep the focus on the custom AI-centric system on a chip they’re building for it. We know it’s got a big ol’ camera bump (or “camera bar,” as they’re calling it) and there will be two models (Pixel 6 and Pixel 6 Pro). But beyond that, we’re stuck relying on leaked specs for now. Fortunately, said leaks have been pretty spot on thus far.

Robinhood’s wild ride

Robinhood went public this week — and, perhaps fittingly for the app that played no small role in the GameStop/AMC/etc. meme stock bonanza earlier this year, its first few days of trading have been something of a rollercoaster. It opened at $38, slipped on day one, only to rocket up to the $70s on day two. As I write this, it’s slowly heading back down to earth with a current price of around $53. As for the root cause of the volatility… as Alex Wilhelm put it: “This happens in 2021; we just have to get used to it.”

Pokémon Go players are mad

Because the fundamental concepts of Pokémon Go (Talk to strangers! Hang out in huge groups!) don’t work as well in a pandemic, Niantic tweaked a bunch of stuff last year to make the game more playable from home. Among other things, they bumped up the real-world radius in which players could interact with in-game landmarks, allowing you to do more while moving less. This week they started rolling those changes back as a “test”… and, well, people are mad. The company presumably has some data-driven reasons to revert… but from the outside, with the pandemic still ongoing, it just looks like a bad decision. Niantic has responded to the community uproar by forming an internal team to examine the options, promising updates by September 1st.

WhatsApp gets self-destructing, single-view photos

This week, WhatsApp embraced its inner-Snapchat with the introduction of “view once” mode, which allows users to send photos and videos that can be viewed once before they self-destruct. Be aware, though, that you probably don’t want to go and use it to send those top-secret documents (and/or butt pics); unlike Snapchat, WhatsApp won’t even give you a heads-up if the viewer takes a screenshot.

Amazon wants to pay you $10 to scan your palm

Last year Amazon started letting customers at its checkout-free grocery stores pay for goods by waving their palm print over a biometric scanner. Now they’re paying new customers $10 to scan their print and get onboard. This story was super popular on the site this week, and I’m left wondering if it’s because people are mad about Amazon gobbling up all this biometric data or because they want the $10. Probably a bit of both.

Twitter kills Fleets

RIP Fleets. Less than a year after Twitter decided it too needed to clone Snapchat Stories, the company has ditched the concept. Why? It says it hoped it would entice new users; instead, the only people using it were those who were already pretty hardcore.

Square buys Afterpay

The buy-now, pay-later space got real big real fast, and Square wants in. This week the company announced its intent to acquire Afterpay, a company that lets you split big purchases across 6 weeks without credit checks or interest, for an earth-shattering $29 billion.

Google’s new Nest cams

Google’s got some new Nest camera gear coming later this month, including a few things that you might be surprised they didn’t make already — like a battery-powered outdoor camera and a motion-activated floodlight camera for your porch.

Elon’s Big Ship

The fun news: This week SpaceX put together the tallest rocket ship in history, with its fully stacked Starship rocket coming together at an absurd 390 feet tall (or 475 feet if you count the launch pad). The less fun news: It’s not going anywhere for now, as this assembly was just a fit test — put it together, take it apart, make sure nothing broke. An actual launch of this mammoth configuration isn’t expected until later this year, but it should be quite the spectacle.

Extra Things

Five factors founders must consider before choosing their VC

We’ve heard it on repeat lately: With so much capital flooding the market, now is the time for founders to be picky about who they let invest. But what things should you consider? Agya Ventures’ co-founder Kunal Lunawat has a few notes, from how well a VC understands your vision, to their background, to good ol’ gut instinct.

Avoid these common financial mistakes so your startup doesn’t die on the vine

Startups are hard enough without trying to deal with screwed up finances. In this article, Zeni founder Swapnil Shinde outlines three different financial pitfalls that are easy to fall into, but avoidable: fragmented finances, old data, and founders that don’t know when/what to delegate.

Directly above view of some rotten cherry tomatoes on Yellow background

Image Credits: Javier Zayas Photography (opens in a new window) / Getty Images


Source: Tech Crunch

Digital transformation depends on diversity

Across industries, businesses are now tech and data companies. The sooner they grasp and live that, the quicker they will meet their customer needs and expectations, create more business value and grow. It is increasingly important to reimagine business and use digital technologies to create new business processes, cultures, customer experiences and opportunities.

One of the myths about digital transformation is that it’s all about harnessing technology. It’s not. To succeed, digital transformation inherently requires and relies on diversity. Artificial intelligence (AI) is the result of human intelligence, enabled by its vast talents and also susceptible to its limitations.

Therefore, it is imperative for organizations and teams to make diversity a priority and think about it beyond the traditional sense. For me, diversity centers around three key pillars.

People

People are the most important part of artificial intelligence; the fact is that humans create artificial intelligence. The diversity of people — the team of decision-makers in the creation of AI algorithms — must reflect the diversity of the general population.

This goes beyond ensuring opportunities for women in AI and technology roles. In addition, it includes the full dimensions of gender, race, ethnicity, skill set, experience, geography, education, perspectives, interests and more. Why? When you have diverse teams reviewing and analyzing data to make decisions, you mitigate the chances of their own individual and uniquely human experiences, privileges and limitations blinding them to the experiences of others.

One of the myths about digital transformation is that it’s all about harnessing technology. It’s not.

Collectively, we have an opportunity to apply AI and machine learning to propel the future and do good. That begins with diverse teams of people who reflect the full diversity and rich perspectives of our world.

Diversity of skills, perspectives, experiences and geographies has played a key role in our digital transformation. At Levi Strauss & Co., our growing strategy and AI team doesn’t include solely data and machine learning scientists and engineers. We recently tapped employees from across the organization around the world and deliberately set out to train people with no previous experience in coding or statistics. We took people in retail operations, distribution centers and warehouses, and design and planning and put them through our first-ever machine learning bootcamp, building on their expert retail skills and supercharging them with coding and statistics.

We did not limit the required backgrounds; we simply looked for people who were curious problem solvers, analytical by nature and persistent to look for various ways of approaching business issues. The combination of existing expert retail skills and added machine learning knowledge meant employees who graduated from the program now have meaningful new perspectives on top of their business value. This first-of-its-kind initiative in the retail industry helped us develop a talented and diverse bench of team members.

Data

AI and machine learning capabilities are only as good as the data put into the system. We often limit ourselves to thinking of data in terms of structured tables — numbers and figures — but data is anything that can be digitized.

The digital images of the jeans and jackets our company has been producing for the past 168 years are data. The customer service conversations (recorded only with permissions) are data. The heatmaps from how people move in our stores are data. The reviews from our consumers are data. Today, everything that can be digitized becomes data. We need to broaden how we think of data and ensure we constantly feed all data into AI work.

Most predictive models use data from the past to predict the future. But because the apparel industry is still in the nascent stages of digital, data and AI adoption, having past data to reference is often a common problem. In fashion, we’re looking ahead to predict trends and demand for completely new products, which have no sales history. How do we do that?

We use more data than ever before, for example, both images of the new products and a database of our products from past seasons. We then apply computer vision algorithms to detect similarity between past and new fashion products, which helps us predict demand for those new products. These applications provide much more accurate estimates than experience or intuition do, supplementing previous practices with data- and AI-powered predictions.

At Levi Strauss & Co., we also use digital images and 3D assets to simulate how clothes feel and even create new fashion. For example, we train neural networks to understand the nuances around various jean styles like tapered legs, whisker patterns and distressed looks, and detect the physical properties of the components that affect the drapes, folds and creases. We’re then able to combine this with market data, where we can tailor our product collections to meet changing consumer needs and desires and focus on the inclusiveness of our brand across demographics. Furthermore, we use AI to create new styles of apparel while always retaining the creativity and innovation of our world-class designers.

Tools and techniques

In addition to people and data, we need to ensure diversity in the tools and techniques we use in the creation and production of algorithms. Some AI systems and products use classification techniques, which can perpetuate gender or racial bias.

For example, classification techniques assume gender is binary and commonly assign people as “male” or “female” based on physical appearance and stereotypical assumptions, meaning all other forms of gender identity are erased. That’s a problem, and it’s upon all of us working in this space, in any company or industry, to prevent bias and advance techniques in order to capture all the nuances and ranges in people’s lives. For example, we can take race out of the data to try and render an algorithm race-blind while continuously safeguarding against bias.

We are committed to diversity in our AI products and systems and, in striving for that, we use open-source tools. Open-source tools and libraries by their nature are more diverse because they are available to everyone around the world and people from all backgrounds and fields work to enhance and advance them, enriching with their experiences and thus limiting bias.

An example of how we do this at Levi Strauss & Company is with our U.S. Red Tab loyalty program. As fans set up their profiles, we don’t ask them to pick a gender or allow the AI system to make assumptions. Instead, we ask them to pick their style preferences (Women, Men, Both or Don’t Know) in order to help our AI system build tailored shopping experiences and more personalized product recommendations.

Diversity of people, data, and techniques and tools is helping Levi Strauss & Co. revolutionize its business and our entire industry, transforming manual to automated, analog to digital, and intuitive to predictive. We are also building on the legacy of our company’s social values, which has stood for equality, democracy and inclusiveness for 168 years. Diversity in AI is one of the latest opportunities to continue this legacy and shape the future of fashion.


Source: Tech Crunch

Building vulnerability into your workflow

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I spoke to my editor this week about the usual: upcoming stories, the future of the podcast and the existential dread of imposter syndrome amid a year-and-a-half of extreme change. The last bit took up the majority of the conversation. Go figure!

Our conversation was helpful because it put words to stresses that often sit in between the lines and gave weight to small things that get hidden during a pandemic-sized year. Don’t worry, I won’t bore you with my thought loops, but I will extract a few lessons that I think are broadly applicable to Startups Weekly readers, because based on your clicks, I know you’re into tips (and earnest ones, at that):

  1. Give yourself grace. The pandemic has been confusing, imbalanced and brought a lot of loss to a lot of people. If you feel like you’re operating at anything less than 100% right now, remember that you are operating during a time when the world feels like it’s depending on a frayed lightbulb for guidance. Before you are hard on yourself for not being productive, think about where your productivity standards are coming from, and if they are even fair in the first place.
  2. Your problems are not unique. While we all are diverse, nuanced individuals, we aren’t alone in a lot of what makes us human. Everyone overthinks, everyone soul searches, everyone has personal and professional insecurities that bubble up in non-obvious ways. By believing that your problems are not entirely unique, I think you’ll find yourself feeling more in control of turbulence. Which brings me to my next point …
  3. Vulnerability is everything. Vulnerability was front and center in the first inning of the pandemic, where we were all brought into each other’s living rooms and home offices and backyards through Zoom. That vibe has somewhat faded as we’ve adapted more and more to distributed work, but it doesn’t mean we can’t try to find ways to be more vulnerable with each other. Let yourself have a voice, even in moments where it’s easier to stay quiet, because you will feel closer at the end of it.

Take what you will from the above advice (or see these tips from a fellow entrepreneur), but I think it all boils down to a belief that we should be humans first, and insert job role here second. It’s truly (still) an unprecedented time in this world, and ending mental health stigma in general is a worthwhile goal.

The rest of this newsletter is about a cyberattack on a VC firm, AfterSquare, and an EC-1 about 911. Before we get on with it, we’re excited to announce that TechCrunch is launching another newsletter! This Week in Apps by the inimitable Sarah Perez launches this Saturday morning, August 7. Sign up here to be in the know about all the apps. As always, you can find me on Twitter @nmasc_. 

Cybercriminals target VC firm

Image Credits: Getty Images

Advanced Technology Ventures, a Silicon Valley venture capital firm with $1.8 billion in assets, was hit by a ransomware attack. Cybercriminals stole personal information on some 300 of ATV’s limited partners, also known as the people who have put millions of millions into its fund, according to a scoop by Zack Whittaker. 

Here’s what to know: This particular attack stole key information on a hush-hush part of how venture money works. VC firms often do not disclose all of their LPs due to competitive advantage and secrecy. The firm may not want competitors to know who is backing them, while a limited partner may not want others to know where their money is going. As ransomware groups “continue to go big-game hunting,” per Whittaker, LP lists are a part of that — and other VC firms should take note.

The money behind the money:

After Square pays

Image: Bryce Durbin/TechCrunch

Fintech lit up this week after Square bought ‘buy now, pay later’ giant Afterpay for $29 billion. The deal, which is expected to go through next year, will see Afterpay integrate its services into Square’s Seller and Cash Pay ecosystems. Mary Ann Azevedo reported the news amid the sector’s heat up, and Alex Wilhelm shared why he thinks Square landed on that magic number. 

Here’s what to know: Everyone is building their own in-house BNPL service, from Shopify (!), to PayPal to, reportedly, Apple. So, while the “Shopify should buy Affirm” theories were aplenty, reporter Ryan Lawler gave more context on what this deal means for startups.

Matthew Harris of Bain Capital Ventures told TechCrunch that, as the BNPL space fills up, he doesn’t see “a lot of headroom/new angles in the consumer BNPL space … scale matters and it will be hard for new entrants to achieve escape velocity.”

Instead, he thinks there is opportunity for BNPL models to break into the B2B space, where companies can “replace/enhance traditional invoice financing and trade credit.”

Friends of fintech:

The 411 on 911

Image Credits: Nigel Sussman

TechCrunch Managing Editor Danny Crichton dove into the heart of 911 and emergency response in our latest EC-1 on RapidSOS. The company, which has raised more than $190 million, has built an emergency response data platform that helps first responders access a firehose of data in high-intensity situations. It processes more than 150 million emergencies every year, and per Crichton, it’s almost certainly integrated into your smartphone right now.

Here’s what to know: From the smoking-pizza-oven early years to its pivot without product design, RapidSOS’ story shows how much you can get done in a decade of stagnation from Capitol Hill.

The four-part series:

Around TC

  • Ryan Lawler has returned to TechCrunch! He’s working with the ExtraCrunch team to bring you some deeper analysis of what’s happening in the fintech world. He’s particularly interested in the B2B side of fintech, including everything from startups building infrastructure and developer tools for companies deploying their own financial services to corporate cards, startup banking and spend management services TechCrunch readers are likely to use. If you work at a relevant company in the space, have invested in one of those companies, or are a customer or partner of one of those companies, he’d love to get your perspective on what’s interesting and what’s happening. You can email him at ryanlawler.techcrunch@gmail.com.
  • I haven’t given you a discount code in a while, so use code EQUITY for a good deal on your Extra Crunch subscription.
  • The Disrupt Agenda is alive and breathing, so check out who is joining our virtual stage in September and buy your tickets. 

Across the week

Seen on TechCrunch

Seen on Extra Crunch

Talk soon,

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Source: Tech Crunch

What’s after low-code? And, why should you go public?

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by what the weekday Exchange column digs into, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here

The Q2 earnings cycle is powering along, which means that your humble Exchange crew have been on the phone with a number of public-company CEOs working to bring you the trends and notes that matter. To that end, today we’re going to check in on Appian, Paycom and BigCommerce.

After that we’ll peek at fresh material that will bolster our recent dives into the BNPL world and startup competition. So, a grab bag today, and hopefully one full of goodies!

Let’s start with Appian. I got to know the company midpandemic when a host of companies were hammering away, building apps using its low-code tech. At the time Appian was worth about half of what it is today. (You can read the company’s Q2 report here.)

Since then the company has continued its cloud push, slowing shedding services revenues in favor of high-margin SaaS incomes. It’s not the only company executing a related transformation. But for our purposes today I want to talk about what comes after the basic low-code work that we spent much of 2020 digging into.

Appian announced that it is buying process mining firm Lana Labs in conjunction with its second-quarter earnings. What’s process mining? Thanks for asking. Process mining is a software technique for finding processes inside of companies that can be automated. It’s all well and good to buy an RPA service for your company, but if you don’t know what you can automate, you might not wind up getting full value.

All this matters in the case of Appian as the company now has process mining, RPA and low-code tooling to help companies create applications under a single roof. In practice the parts work together with process mining identifying things to automate, a workflow that is then taken up by RPA and other forms of automation — AI, human — to allow companies to better get their operations in efficient order.

I asked Appian CEO Matt Calkins about the difference between workflows and apps. He said that they are pretty much the same thing. This makes the low-code world a bit more grokable. How many apps could corporations really need, I’ve always wondered. The same question regarding how many workflows that companies may need to automate feels different. It feels like there’s many, many more possibilities. So, a bigger TAM.

Updating my thinking about low-code, this dynamic makes me more bullish on the software method if it’s more in service of helping companies digitize their operations and automate rote tasks than simply building more apps.

Turning the page to BigCommerce, the open-SaaS e-commerce platform has had a good few quarters, posting generally accelerating revenue growth despite Shopify’s rising global profile. It also just marked its first anniversary since going public, so I spent a few minutes with CEO Brent Bellm to chat about what he’s learned in that year, and if going public was worth it. (You can read the company’s Q2 report here.)

It was, he said. He made two cases for taking companies public that I wanted to share. They add up to faster growth at BigCommerce, though Bellm cautioned that it was impossible to disaggregate growth stemming from the following factors from other elements that contributed to his company’s recent performance.

Regardless, a few reasons to go public:

  • Credibility: Being a public company with open finances can breed in-market confidence. Startups have an awkward habit of dying somewhat often. Public companies far less so. This means that customers are more likely to trust a company, perhaps boosting its chances of securing deals. Even more, partners are more confident in BigCommerce now that it is public, per Bellm, helping drive more partnerships and growth.
  • Increased attention: I thought that I understood this element of going public, but Bellm expanded my perspective. Of course going public is a branding event. But that’s where I thought this particular edge wrapped up. Instead, the CEO explained that now when his company does a thing the analyst community has to pay attention, for example. So it’s easier for BigCommerce to stay in the public eye as a public company than when it was a startup. Call it boosted ambient market noise, in a good sense.

Bellm told The Exchange that going public was “overwhelmingly positive” for his company. Unicorns, take note.

Then there was Paycom. This chat was mostly about talent in two ways. First, Paycom is dealing with the same competitive tech talent market as every other company. But notably it’s seeing a tight supply of the talent it needs despite being far from traditional technology hubs. Paycom is based in Oklahoma, notably. (You can read the company’s Q2 report here.)

But the talent market and its general tightness today is impacting Paycom in another way: The HR-tech company sells software that helps companies secure and retain talent. Those businesses, per the company’s CEO Chad Richison, are benefiting from companies’ putting more focus on not letting talent go after they went through all the work of getting them aboard.

Also the labor market has become very similar to the venture capital market, it turns out. Richison said that today you have to make a choice on whether to hire someone after you interview them within a few days. Before you had more time. Just like VCs today are forced to cut checks in days instead of weeks and months.

Hot economy summer, or something.

The startup BNPL market

Hope remains for the startup BNPL market, per Brad Paterson, the CEO of Splitit. Splitit allows customers to use their current credit cards to make installment payments. So it’s a mix of traditional credit and BNPL. (SplitIt’s Crunchbase page is here.)

Paterson volunteered to provide comment on the current market for BNPL startups, and after chatting much about the Square-Afterpay deal, I wanted to get his take on why smaller companies are going to be able to survive behemoths charging into their market.

In an email, Paterson argued that a wealth of factors, what he described as “average purchase price, length of installment plan, industry vertical serviced, etc.” will protect margins in the space. And that as BNPL solutions can “extend beyond smaller purchases,” there will be room for startups in the space.

Perhaps the better question is how much more work there is to do with consumer credit and checkout. That sounds much more like an infinite problem space than just BNPL tooling itself.

Startup competition

Returning to our earlier work regarding startup competition, Elizabeth Yin of Hustle Fund sent in a list of notes that I want to share. When we were discussing the importance of being a leading player in markets for startups, we were mostly discussing the marketplace space, areas where young companies are trying to connect different parties.

In ride-hailing, that’s drivers and riders. Food delivery is even more complex, with delivery drivers, consumers and food-generative business establishments. You get the idea. Per Yin, being content with lower-tier market share is “generally really tough.” She continued:

The value of a marketplace usually increases as both the supply and demand sides increase. E.g., more listings + customers on Airbnb. More drivers and riders on Uber. Etc. In fact, in many cases, that is the sole value.

So, if you’re No. 3 or No. 4 in the market, retention is a big potential concern, because you have to ask yourself what will enable you to keep your supply and demand sides from defecting to the No. 1 or No. 2 player that has a larger network? This is why you tend to see consolidation of marketplaces.

For early backers, they may still end up doing fine via an acquisition to No. 1 or No. 2, but it may end up being a magnitude or two off from the outcome of backing the No. 1 or No. 2 marketplace. For this reason, if there are already a couple of marketplaces that have a strong head start, early-stage investors tend to shy away from backing a new player.

Yin also answered our question ​​startup marketplace competition generally yielding markets with a small number of leading players, and a dearth of other competitors as smaller entrants are chased out due to low market share. She added an interesting perspective regarding the impact of capital:

In general, yes, but investors also play a role in this phenomenon. Once a couple of companies get going, investors tend to pour more into those initial leaders AND others tend to shy away from backing competitors. And once money floods a space, it’s really customer acquisition costs that become an issue — CAC gets driven up by the top companies. (We saw this with the rise in food delivery companies). This is why you can’t really bootstrap a marketplace company very easily — you can’t afford to acquire customers.

This is, in a sense, an answer to the question about kingmaking in the startup world. VCs are not deciding who wins in many cases, but the impact of capital really can skew results in the marketplace world. Now, let’s stop before we start endorsing how the first Vision Fund disbursed capital! 😂

Hugs, and get vaccinated.

Your friend,

Alex


Source: Tech Crunch

China roundup: Games are opium, algorithms need scrutiny

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

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

Education curbs hit tech giants

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

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

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

Games are opium

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

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

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

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

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

Fix the algorithms

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

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

End of “two-choose-one”

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

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


Source: Tech Crunch

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

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

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

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

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

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

Urban flight today

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

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

Instead of looking to airports as the model for advanced air mobility, we should look to metro hubs that are accessible to everyone, with multiple departures and arrivals per day.

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

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

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

Consider the ground, not just the skyline

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

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

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

Big vision, small footprint

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

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

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

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

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


Source: Tech Crunch

Gillmor Gang: Time Delay

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

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

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

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

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

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

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

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

from the Gillmor Gang Newsletter

__________________

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

Produced and directed by Tina Chase Gillmor @tinagillmor

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

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

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


Source: Tech Crunch