Category: StartUps

When Quibi announced it was shutting its doors recently after raising $1.75 billion, it begged an obvious question: If the original idea didn’t work, why not adjust its model or do something completely different while it still had capital? It wouldn’t have been the first company to decide to shift gears. Perhaps because of the unusually large amount of money it burned through in just six months of public operation, pivoting wasn’t an option for Quibi, but it has been for countless other successful companies over the years. Sometimes an original idea simply doesn’t pan out, a market gets too crowded or a company’s founders stumble onto something they have built that is actually a better business than the original idea.

There are many such examples:

• Perhaps the most famous is Slack, which originally was a multiplayer online game before pivoting to be a communications company.
• Box launched in 2005 as a consumer storage product before deciding to take on content management in the enterprise in 2008.
• YouTube started life as a video dating service and when they didn’t get much traction they began letting people upload whatever videos they liked. Google saw enough potential to buy the company for $1.6 billion just a year after launching.

These examples — and many more — show that when your first approach doesn’t work, pivoting may be the the only logical course, but it takes courage from founders and patience from investors.

We spoke to several founders and VCs who have been through this to find out how pivots happen, and how all the parties involved adjust to shifting priorities.

Sometimes it’s a long and twisting road

A big part of founding a company is having vision. You need to believe in your idea of course, but that doesn’t mean it’s the right way to go. Sometimes it pays to move on. The king of pivots might be the aptly named Pivotal, which changed direction several times and even swapped owners before it went public and got acquired, all in the span of about 20 years. Ed Sim, co-founder at boldstart ventures was part of Dawntreader Ventures in the late 90s when his firm invested in an early version of the company called Metapa. Sim had a front row seat to every twist and turn in the company’s long and intricate history.

“Greenplum, which was sold to EMC and eventually became Pivotal Software, was initially called Metapa. Metapa was in the Akamai space and as the markets cratered in 2001 for funding infrastructure projects, Scott Yara (the company’s founder) and team bought a small company called Didera and turned it into Greenplum, the first petabyte scale data warehouse built on top of open-source technology,” Sim told TechCrunch. It didn’t end there though as Sim continued, “Once again, years later, Scott recruited his replacement CEO, Bill Cook, and they paired together to sell Greenplum to EMC and eventually spin back out and take the company public as Pivotal Software.”

It’s worth noting that Pivotal eventually ran into financial problems when its stock tanked last year, but fellow Dell/EMC family member VMware saved the day by acquiring it for $2.7 billion.

Sometimes you stumble onto an idea

Segment, the customer-data platform company that was recently sold to Twilio for $3.2 billion was originally a college lecture sentiment platform, according to CEO and co-founder Peter Reinhardt. “Our first idea was a classroom lecture tool, ClassMetric, which gave students a button they could press in class to let professors know, in real-time, that they were confused. I like to think of it like a pulse monitor for class confusion,” Reinhardt told TechCrunch

That idea quickly failed when professors testing it found that inviting students to open their laptops to test their sentiment just led them to start playing Solitaire or checking Facebook. Professors weren’t thrilled and they moved on. The founders, who were MIT students at the time, decided they wanted to build an analytics tool instead, but it turned out that competition from Google Analytics and Mixpanel at the time proved too steep.

“We spent a year on development, but it was a crowded market and we struggled to carve out our own niche. We were rapidly running out of capital and the pressure was on to find something new,” he said. They were actually considering simply packing it in, but they had developed a tiny open-source tool called analytics.js, which they used to get data into their failed analytics product. At that point, desperate for an idea, one of the founders suggested posting the open-source tool on Hacker News.

Source: Tech Crunch

NBC News has updated its iOS app with a new feature that brings election news, data and results directly to your iPhone or iPad home screen. With the app’s new “Decision 2020” iOS 14 widget, you can customize a series of widgets with information related to early voting stats, polls, as well as the current election results, among other things.

Before today, the NBC News app had offered a variety of widgets including small-, medium- and large-sized widgets bringing the latest headlines, a set of widgets showing COVID-19 trends, and even a photo journalism gallery, with its “Week in Pictures” widget set.

But the Decision 2020 widget itself was just made available today.

The added widget is only available as a medium-sized banner, but arrives with a range of customization options. That means you could place several versions of the widget on your home screen, each showing a different set of results.

By default, the widget will auto-rotate through its various modules. But you can also opt to show only one module per widget if you choose by long-pressing on the widget then choosing “Edit Widget” from the menu that appears.

At launch, the available options include Plan Your Vote, National Polling Average, Latest Polls, Early Voting, Election News and Election Results. The latter, of course, is the option most people will be interested in today.

Image Credits: NBC News

You can also add your location to the widget by selecting your state from a list from the widget configuration screen. This will allow you to keep an eye on your local results, if you choose. Otherwise, you can leave it defaulted to national results.

To access the new widget, install the NBC News app then long-press on your home screen, choose “Edit Home Screen,” and tap the plus (+) button at the top-left and scroll to NBC News in the list.

The NBC News app can also send out push notifications, including geo-targeted alerts for state races for users on any mobile phone or device.

Source: Tech Crunch

French cloud hosting company Scaleway originally started with very cheap cloud instances. Over the years, the company has expanded its offering and added more premium services, such as managed Kubernetes, object storage, block storage, managed databases, load balancers and GPU instances. But Scaleway is now launching another cheap cloud instance that costs €0.0025 per hour — around $0.0039 per hour.

Obviously, you’re not getting incredible performance for that price. But it’s a good way to try out new things and build an application just for you. If you’re the only user, those specifications might be enough.

Called Stardust, the virtual compute instance comes with 1 vCPU, 1GB of RAM, an IP address (IPv4), 10GB of local storage and up to 100Mbps of bandwidth. There’s no restriction on bandwidth usage.

Billed by the hour, you end up paying €1.80 per month ($2.10). The company isn’t going to generate a ton of revenue from such a cheap product. That’s why supply is limited. Scaleway will release a limited batch of cloud instances every month — first come, first served.

There are also some limits as you can’t spin up a ton of Stardust and build your own infrastructure. Each account can have up to one Stardust instance in Paris and another one in Amsterdam.

Scaleway lists some potential use cases for its new product, such as an internal wiki, a code repository backup, an always-on instance to set up daemons, triggers and workers, a VPN server, etc. The instance supports Ubuntu, Debian, CentOS and Fedora.

Source: Tech Crunch

I know it will come as a shock to you as a reader of the news, but there is an election this week. Well, tomorrow actually.

It’s the rare election where the logistics of the election itself seem to be increasingly dominating the discussion. Not since the Florida recount of 2000 have pollsters, analysts and party lawyers been so fixated on the mechanics of ballots. What ballots will be counted? Will the Post Office deliver mail in time? How many drop-off boxes are authorized by county? Will the voting machines leave an auditable paper trail?

Voting in America is a complex affair — while presidential elections are national in scope, the actual logistics of ballots and votes are decided locally: not just state by state, but often also county by county. That can create huge variation in the systems at play — but it also means that a small county in rural Mississippi can be a test case for the rest of the nation in how to get voting done right.

That’s at least what VotingWorks is banking on.

VotingWorks is a non-partisan, nonprofit startup that graduated from YC in its winter batch last year with the twin goals of improving the technology that underpins elections through more affordable and secure voting systems as well as using modern statistical science to improve the quality and efficiency of voter audits. The nonprofit scoured the country looking for a testbed, and eventually found Choctaw County in Mississippi, a rural jurisdiction just shy of 10,000 residents who were willing to try VotingWorks’ system out in their election.

Matt Pasternack, who along with Ben Adida co-founded the organization, said that the existing voting machines there were “ancient” and didn’t have a paper audit trail. “We found one county that was so eager to get rid of these ancient machines that they said, ‘Yes, we want to, we want to use this new thing you guys are building,’” Pasternack said.

What VotingWorks built is quite competitive. First, the company used existing hardware like iPads rather than designing custom-built hardware that can be extraordinarily costly given that the machines are rarely used in the U.S., which has quadrennial elections for many offices. Second, the organization’s software is posted as open source on GitHub. That made the machines more open and verifiable than competitors, and also available at a lower price point.

Pasternack and Adida first met while working together at Clever, the API middleware platform that today could be dubbed the “Plaid of education,” designed to help app developers connect to the data stored in hundreds of student information systems. Pasternack noted that he was employee number one, and the two talked about politics and elections over the years and eventually saw an opportunity to enter the market with the 2018 midterms.

The team went through YC in early 2019. With Choctaw County’s push to replace their machines, VotingWorks managed to get its machines in their hands by August for the upcoming November 2019 election, when statewide offices including the governor and attorney general were up for election. The machines were used in 13 precincts.

Adida said that the company moved very fast, but the in-field experience was crucial for improving their machines. He noted that one thing the crew learned is that on election day, poll workers have to setup each machine in the morning before the first rush of voters. The speed of setup is crucial for getting poll places ready, and so VotingWorks optimized how many steps were involved in setting up each ballot machine. “With our machines, you put it on a table, you pop open the case, and you run the checklist. It takes about two-to-three minutes, compared to 30 [minutes] … and so the poll workers were raving about it,” he said.

Pasternack also added that in a rural county like Choctaw, power constraints added their own complexity. Precincts could be remarkably underpowered, and too many voting machines on one electrical circuit could blow out the entire precinct — preventing anyone from voting.

Since then, the organization’s technology has expanded to about 10% of Mississippi counties, partly driven by the need this year for color printing technology. The state is voting on changing its state flag to remove the imprint of the Confederate Flag, and voters have to see the new flags in color on the ballot. Pasternack said that their on-demand printing technology is both efficient and much more affordable per ballot.

Mississippi’s Existing Flag and proposed new flag that will be on the state’s ballot tomorrow. Images via Wikipedia. New flag credited on Wikipedia to Rocky Vaughn, Sue Anna Joe, and Kara Giles.

Outside of the machines itself, the organization is building up its audit software to make audits more statistically accurate and cheaper to conduct, and also developing systems for processing absentee ballots better. Each of these technologies work independently of one another — Adida stressed that “An important trait of a modern voting system is that it’s modular. You can use our auditing system with any standard tabulator. You absolutely don’t need to be using VotingWorks.” Its tech is now used in several additional states in addition to Mississippi, including crucial swing states Michigan and Pennsylvania.

The non-profit has a critical day tomorrow, but then the future beckons. With so much focus on election logistics this year, the hope is that more counties and states will begin to think through better, more robust systems to operate their elections. “We want a world where the foundation of democracy is publicly owned, so having open source software shepherded by a nonprofit organization — it feels like a better democracy to me,” Adida said.

Source: Tech Crunch

As the COVID-19 pandemic continues to force teachers, students and parents to adopt new technologies, edtech’s total addressable market has massively grown in the last several months. The shift has urged venture capitalists to pour money into the sector accordingly, ushering a number of startups into the unicorn club.

But maturation doesn’t just mean bigger checks and high-flying unicorns — it also brings exits.

Edtech M&A activity is buzzier than usual: In the last week, Course Hero, a startup that sells Netflix-like subscriptions to students looking for learning and teaching content, bought Symbolab, an artificial intelligence-powered calculator. Saga Education, a tutoring nonprofit backed by Comcast, the Bill & Melinda Gates Foundation and others, acquired math software platform Woot Math. We also saw PowerSchool, which sells a suite of software services to manage schools, scoop up Hoonuit, a data management and analytics tool for educators. Finally, K-12 curriculum company Discovery Education bought K-5 science and stem curriculum upstart Mystery Science.

It’s a lot of news in a short period of time. Luckily, these consolidations offer some directional guidance regarding where some edtech businesses think the future of their industry is headed.

Smart content as a competitive advantage

Content, to an extent, is commoditized. If you can find a free tutorial on Youtube or Khan Academy, buy a subscription to an edtech platform that offers the same solution? The commodification of education is good for end-users and is often why startups have a freemium model as a customer acquisition strategy. To convert free users into paying subscribers, edtech startups need to offer differentiated and targeted content.

The Course Hero and Mystery Science deals show us that edtech businesses are hungry for personalized, targeted content. Course Hero’s acquisition of Symbolab was essentially a deal for more than a decade’s worth of data that captured which math questions students found hardest.

Symbolab is a math calculator that is set to answer over 1 billion questions this year. With each answer, Symbolab adds information to its algorithm regarding students’ most common pain points and confusion. Course Hero, in contrast, is a broader service that focuses on Q&A from a variety of subjects. CEO Andrew Grauer says Symbolab’s algorithm isn’t something that Course Hero, which has been operating since 2006, can drum up overnight. That’s precisely why he “decided to buy, instead of build.”

“It made a lot of sense to move fast enough so it wouldn’t take up multiple years to get this technology,” Grauer said. The deal was made as big companies get in the Q&A game too, he noted. Google acquired homework helper app Socratic in 2019 and Microsoft built Microsoft Solver in the same year.

Discovery Education, a curriculum provider for K-12 classrooms, acquired San Francisco-based K-5 STEM curriculum provider, Mystery Science. Discovery Education has launched a series of other products focused on science education, including Discovery Education Experience, the Science Techbook series and STEM Connect.  However, Mystery Science is largely focused on offering a creative digital solution to science education. The programming, a mix of videos, prompts and projects, cover a range of questions such as, “Where do rivers flow?” and “Could a volcano pop up where you live?” for young students.

Mystery Science CEO and founder Keith Schact explained how his product focuses on kids and educators, while Discovery Education focuses on educators and districts, making the deal feel like a “natural marriage.” Even as edtech goes directly to consumers, Schact remains bullish on the role that institutions play in true adoption of technology.

“You can go straight to teachers and get a certain market share,” he said. “But the institutions still do have a big role.” The founder likened the dynamic to the state of media: With the rise of blogs, you can publish directly and reach an engaged audience, but writers who want a bigger positioning tend to join larger platforms to grow their overall reach. Edtech is the same, in that some startups need an official sign-off from schools before they can reach venture-scale returns.

According to a source familiar with the transaction, Mystery Science was sold for $175 million after only raising $4 million in venture financing.

Using data management and analytics to improve student outcomes

Source: Tech Crunch

A shared user account used by WeWork employees to access printer settings and print jobs had an incredibly simple password — so simple that a customer guessed it.

Jake Elsley, who works at a WeWork in London, said he found the user account after a WeWork employee at his location mistakenly left the account logged in.

WeWork customers like Elsley normally have an assigned seven-digit username and a four-digit passcode used for printing documents at WeWork locations. But the username for the account used by WeWork employees was just four-digits: “9999”. Elsley told TechCrunch that he guessed the password because it was the same as the username. (“9999” is ranked as one of the most common passwords in use today, making it highly insecure.)

The “9999” account is used by and shared among WeWork community managers, who oversee day-to-day operations at each location, to print documents for visitors who don’t have accounts to print on their own. The account cannot be used to access print jobs sent to other customer accounts.

Elsley said that the “9999” account could not see the contents of documents beyond file names, but that logging in to the WeWork printing web portal could allow him to release other people’s pending print jobs sent to the “9999” account to any other WeWork printer on the network.

The printing web portal can only be accessed on WeWork’s Wi-Fi networks, said Elsley, but that includes the free guest Wi-Fi network which doesn’t have a password, and WeWork’s main Wi-Fi network, which still uses a password that has been widely circulated on the internet.

Elsley reached out to TechCrunch to ask us to alert the company to the insecure password.

“WeWork is committed to protecting the privacy and security of our members and employees,” said WeWork spokesperson Colin Hart. “We immediately initiated an investigation into this potential issue and took steps to address any concerns. We are also nearing the end of a multi-month process of upgrading all of our printing capabilities to a best in class security and experience solution. We expect this process to be completed in the coming weeks.”

WeWork confirmed that it had since changed the password on the “9999” user account.

Source: Tech Crunch