Category: StartUps

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. This week, TikTok, currently the world’s hottest social media app, welcomed the new decade by publishing its first transparency report as it encounters rising scrutiny from regulators around the world.

TikTok tries to demystify 

The report, which arrived weeks after it tapped a group of corporate lawyers to review its content moderation policy, is widely seen as the short video app’s effort to placate the U.S. government. The Committee on Foreign Investment in the United States, or CFIUS, is currently probing the app for possible national security risks.

TikTok is owned by Beijing-based tech upstart ByteDance and has been rapidly gaining popularity away from its home turf, especially in the U.S. and India. As of November, it had accumulated a total of 1.5 billion downloads on iOS and Android devices, according to data analytics firm Sensor Tower, although how many materialized into active users is unknown.

The transparency report reveals the number of requests TikTok received from local regulators during the first half of 2019. Such orders include government requests to access user information and remove content from the platform. India topped the list with 107 total requests filed, followed by the U.S. with 79 requests and Japan at 35.

The numbers immediately sparked debates over the noticeable absence of China among the list of countries that had submitted requests. This could be because TikTok operates as a separate app called Douyin in China, where it claimed to have more than 320 million daily active users (in Chinese) as of last July.

TikTok has taken multiple measures to ease suspicions of international markets where it operates, claiming that it stores data of U.S. users in the U.S. and that the app would not remove videos even at the behest of Beijing’s authority.

Whether skeptics are sold on these promises remains to be seen. Meanwhile, one should not overlook the pervasive practice of self-censorship among China’s big tech.

“Chinese internet companies know so well where the government’s red line is that their self-regulation might even be stricter than what the government actually imposes, so it’s not impossible that [the TikTok report] showed zero requests from China,” a person who works at a Chinese video streaming platform suggested to me.

It’s worth revisiting why TikTok has caused a big stir on various fronts. Besides its nationality as a Chinese-owned app and breathtaking rise, the app presents a whole new way of creating and consuming information that better suits smartphone natives. It’s been regarded as a threat to Facebook and compared to Youtube, which is also built upon user-generated content. However, TikTok’s consumers are much more likely to be creators as well, thanks to lower barriers to producing and sharing videos on the platform, venture capitalist David Rosenthal of Wave Capital observed. That’s a big engagement driver for the app.

Another strength of TikTok, seemingly trivial at first sight, is the way it displays content. Videos are shown vertically, doing away the need to flip a phone. In a company blog post (in Chinese) on Douyin’s development, ByteDance recounted that most short-video apps budding in 2016 were built for horizontal videos and required users to pick from a list of clips in the fashion of traditional video streaming sites. Douyin, instead, surfaces only one video at a time, full-screen, auto-played and recommended by its well-trained algorithms. What “baffled” many early employees and interviewees turned out to be a game-changing user experience in the mobile internet age.

Douyin’s ally and enemy 

A recent change in Douyin’s domestic rival Kuaishou has brought attention to the intricate links between China’s tech giants. In late December, video app Kuaishou removed the option for users to link e-commerce listings from Taobao, an Alibaba marketplace. Both Douyin and Kuaishou have been exploring e-commerce as a revenue stream, and each has picked its retail partners. While Kuaishou told media that the suspension is due to a “system upgrade,” its other e-commerce partners curiously remain up and running.

Left: Douyin lets creators add a “shop” button to posts. Right: The clickable button is linked to a Taobao product page.

Some speculate that the Beijing-based company could be distancing itself from Alibaba and moving closer to Tencent, Alibaba’s nemesis and a majority shareholder in Kuaishou. Yunfeng Capital, a venture firm backed by Alibaba founder Jack Ma, has also funded Kuaishou but holds a less significant equity stake. That Douyin has long been working with Alibaba on e-commerce might have also been a source of discordance between Kuaishou and Alibaba.

Source: Tech Crunch

Hey everyone, happy 2020. Welcome back to Week in Review where I dive deep into a bit of news from the week or just share some thoughts and go over some of the more interesting stories of the week.

If you’re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here.

The big story

Dip a toe into the world of influencers and as you click through Instagram stories, and you’ll see that peddling endorsements for bizarre products is an essential part of the new influencer economy. What’s interesting isn’t that these (often) self-made influencers looking to leverage their fame to and monetize themselves with sponsorship deals, it’s how low the expectations are of their followers and fans when it comes to advertising suspect products.

The age of fanbases considering a celebrity a sellout after hocking junk in commercial appearances is far, far gone. Follower exploitation isn’t even questioned, something that grows less funny when you realize how young most of the fans are of some of these figures.

As you click through actual online influencers with 10 million+ followers advertising weight-loss supplements, juice cleanses and knockoff AirPods, you might be wondering where the bar is and whether it can go any lower. Followers don’t really seem to care for a lot of reasons, but one intriguing thought is that as social media platforms have made fame seem more accessible, user empathy for internet stars has increased and people understand that these figures are just looking for their payday.

Ultimately, high art and capitalism have also never been closer and when you look at the relationship between brand endorsements and some of the top visual artists and musicians, it’s not surprising that those that occupy lesser rungs on the fame ladder don’t mind hocking lesser products. This great piece in The Atlantic by Taylor Lorenz from 2018 reported on how teens were acting like they were selling ads as a way to lend themselves credibility. The “coolness” of advertising has only seemed to accelerate.

It’s clear that the influencer economy has shaped popular culture in ways that make a backlash to influencers “selling out” seem nearly impossible at this point in time. After all, if sticking your name on products that literally contain poison doesn’t dampen your charm, what will?

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

• Snap buys up an AI startup
  This week, TechCrunch reported that Snapchat had bought up a Ukrainian AI startup to build its latest Cameo feature. The $166 million acquisition is a significant purchase for the social media company which spent the bulk of 2019 getting back to basics.
• Former HBO boss joins up with Apple
  Former HBO exec Richard Plepler has signed an exclusive deal with Apple for his new production company, a move that’s sure to make waves in the entertainment space but could also shift how Apple spends its behemoth original content budgets.

Extra Crunch

Our premium subscription business had another great week of content. My colleague Josh Constine started a series with advice for getting your startup press coverage.

Finding the right reporter to cover your startup

Pitch the wrong reporter or publication, and your story won’t see the light of day.

Before you start seeking press, you’ll need to look for reporters who have reach, respect and expertise when you choose who to talk to. You’ll also need to be prepared to accept the truth about your business, even if it hurts. It’s critical that you find a writer who’s a good fit for the business you’re building and the audience you’re seeking…”

Sign up for more newsletters, including my colleague Darrell Etherington’s new space-focused newsletter Max Q, here.

Source: Tech Crunch

The Saturday night before CES seems like a less than ideal time to drop some big smartphone news — but it appears Samsung’s hand was forced on this one. Granted, the smartphone giant has never been great about keeping big news under wraps, but this morning’s early release of a promo video through its official Vimeo channel was no doubt all the motivation it needed.

The company has just made the February 11 date officially official for the launch of its upcoming flagship. As for what the flagship will be called, well, that (among other things) leaves some room for speculation. Rumors have pointed to both the more traditional S11, along with the more fascinating jump to the S20.

I’ve collated a bunch of the rumors into an earlier post. The TLDR is even larger screens across the board, coupled with a bunch of camera upgrades and a healthy battery increase. The invite art, which matches the earlier the video, appears to confirm the existence of two separate devices, with different dimensions. That could well point to the reported followup to the Galaxy Fold. In additional to better reinforced folding (a follow up to last year’s issues), the device reportedly adopts a clamshell form factor, more akin to the newly announced Motorola Razr.

More info (and rumors) to come. As ever, we’ll be there (San Francisco) as the news breaks.

Source: Tech Crunch

Sometimes, in venture capital, it pays to specialize. The latest indicator is a Kansas City, Mo.-based venture firm that’s focused on seed-stage startups that are based anywhere from “Park City to Kansas City.” According to an SEC filing, it just closed on $16.4 million in capital commitments. It’s the third fund for the outfit, Royal Street Ventures, which was founded several years ago by two Kansas City natives — Laura Brady and Jeffrey Stowell.

It’s an interesting piece of geography to be so focused on, partly because, well, it leaves out a lot of opportunities elsewhere.

At the same time, the firm is hardly the first to plant a flag in an underserved area, then get to work. It’s hard to remember now, but when Foundry Group opened its doors in 2007 in Boulder, Colorado, it didn’t have many, if any, competitors kicking the tires of local startups — or bidding up valuations. Similarly, former Sequoia Capital investors Mark Kvamme and Chris Olsen hightailed it to Columbus, Ohio, in 2013 based on a hunch that there were plenty of savvy founders in the Midwest who investors on both coasts were missing.

Certainly, Brady and Stowell, who previously worked for a bank and the innovation center out of which Royal Street sprang, respectively, aren’t having trouble putting money to work. They’ve written checks to at least 40 Midwestern and Western U.S. startups since the firm’s launch in 2013, including an organic snack company in Park City called Allgood Provisions; a Kansas City company called BacklotCars that’s building marketplace for the wholesale automotive industry; and a weather data company in Overland Park, Ks., called Main Street Data.

They’re also making the occasional investment in a startup off the beaten path. Blueboard, for example, an employee recognition and incentives program, is based in San Francisco.

Either way, the team is part of a growing tendency on the part of limited partners to make bets on parts of the U.S. that are on the rise, thanks partly to soaring costs in places like the Bay Area and New York, as well as competition for talent in places like San Francisco, which can hobble a startup before it gains meaningful momentum.

Among the highest-profile advocates for the trend, of course, is AOL founder Steve Case, who has been banging the drum about startups in underserved areas all over the U.S. in recent years. Case has also been helping to raise investing capital for them through seed funds dubbed Rise of the Rest, the second of which was announced back in October.

Source: Tech Crunch

It’s no secret that I hate predictions — not least because the security field changes rapidly, making it difficult to know what’s next. But given what we know about the past year, we can make some best-guesses at what’s to come.

Ransomware will get worse, and local governments will feel the heat

File-encrypting malware that demands money for the decryption key, known as ransomware, has plagued local and state governments in the past year. There have been a near-constant stream of attacks in the past year — Pensacola, Florida and Jackson County, Georgia to name a few. Governments and local authorities are particularly vulnerable as they’re often underfunded, unresourced and unable to protect their systems from many major threats. Worse, many are without cybersecurity insurance, which often doesn’t pay out anyway.

Sen. Mark Warner (D-VA), who sits on the Senate Intelligence Committee, said ransomware is designed to “inflict fear and uncertainty, disrupt vital services, and sow distrust in public institutions.”

“While often viewed as basic digital extortion, ransomware has had materially adverse impacts on markets, social services like education, water, and power, and on healthcare delivery, as we have seen in a number of states and municipalities across the United States,” he said earlier this year.

As these kinds of cyberattacks increase and victims feel compelled to pay to get their files back, expect hackers to continue to carry on attacking smaller, less prepared targets.

California’s privacy law will take effect — but its repercussions won’t be immediately known

On January 1, California’s Consumer Privacy Act (CCPA) began protecting the state’s 40 million residents. The law, which has similarities to Europe’s GDPR, aims to put much of a consumer’s data back in their control. The law gives consumers a right to know what information companies have on them, a right to have that information deleted and the right to opt-out of the sale of that information.

But many companies are worried — so much so that they’re lobbying for a weaker but overarching federal law to supersede California’s new privacy law. The CCPA’s enforcement provisions will kick in some six months later, starting in July. Many companies are not prepared and it’s unclear exactly what impact the CCPA will have.

One thing is clear: expect penalties. Under GDPR, companies can be fined up to 4% of their global annual revenue. California’s law works on a sliding scale of fines, but the law also allows class action suits that could range into the high millions against infringing companies.

More data exposures to be expected as human error takes control

If you’ve read any of my stories over the past year, you’ll know that data exposures are as bad, if not worse than data breaches. Exposures, where people or companies inadvertently leave unsecured information online rather than an external breach by a hacker, are often caused by human error.

The problem became so bad that Amazon has tried to stem the flow of leaks by providing tools that detect inadvertently public data. Those tools will only go so far. Education and awareness can go far further. Expect more data exposures over the next year, as companies — and staff — continue to make mistakes with their users’ data.

Voter databases and election websites are the next target

Source: Tech Crunch

Bharatiya Janata Party, the ruling party in India, has been accused of running a highly deceptive Twitter campaign to trick citizens into supporting a controversial law.

First, some background: The Indian government passed the Citizenship Amendment Act (CAA) last month that eases the path of non-Muslim minorities from the neighboring Muslim-majority nations of Afghanistan, Bangladesh and Pakistan to gain Indian citizenship.

But, combined with a proposed national register of citizens, critics have cautioned that it discriminates against minority Muslims in India and chips away at India’s secular traditions.

Over the past few weeks, tens of thousands of people in the country — if not more — have participated in peaceful protests across the nation against the law. The Indian government, which has temporarily cut down internet access and mobile communications in many parts of India to contain the protests, has so far shown no signs of withdrawing the law.

On Saturday, it may have found a new way to gain support for it, however.

India’s Home Minister Amit Shah on Thursday tweeted a phone number, urging citizens to place a call to that number in “support of the CAA law.”

Thousands of people in India today, many affiliated with the BJP party, began circulating that phone number on Twitter with the promise that anyone who places a call would be offered job opportunities, free mobile data, Netflix credentials, and even company with “lonely women.”

Huffington Post India called the move latest “BJP ploy” to win support for its controversial law. BoomLive, a fact checking organization based in India, reported the affiliation of many of these people to the ruling party.

We have reached out to a BJP spokesperson and Twitter spokespeople for comment.

If the allegations are true, this won’t be the first time BJP has used Twitter to aggressively promote its views. In 2017, BuzzFeed News reported that a number of political hashtags that appeared in the top 10 Twitter’s trends column in India were the result of organized campaigns.

Pratik Sinha, co-founder of fact-checking website Alt News, last year demonstrated how easy it was to manipulate many politicians in the country to tweet certain things after he gained accessed to a Google document of prepared statements and tinkered with the content.

Last month, snowfall in Kashmir, a highly sensitive region that hasn’t had internet connection for more than four months, began trending on Twitter in the U.S. It mysteriously disappeared after many journalists questioned how it made it to the list.

When we reached out, a Twitter spokesperson in India pointed TechCrunch to an FAQ article that explained how Trending Topics work. Nothing in the FAQ article addressed the question.

Source: Tech Crunch

After years of speculation and hype, major players in Hollywood and Silicon Valley are getting ready to challenge Netflix .

It’s only been a few months since Apple launched TV+, followed quickly by Disney launching Disney+. And there’s more to come this year, with AT&T-owned WarnerMedia preparing to release HBO Max, while NBCUniversal does the same with Peacock.

Even before they’re available to subscribers, these new offerings are shaking up the status quo: As part of their preparation, Hollywood studios are consolidating, and they’re reclaiming key titles like “Friends” and “The Office” from rival platforms.

Netflix, in turn, has been preparing for a world where its old content partners are either unwilling to license key titles, or charging a much higher price when they do — hence the service’s seemingly endless flood of original content, and its exclusive contracts, worth hundreds of millions of dollars, with big-name creators.

Studios don’t have much of a choice here: with declining box office at U.S. movie theaters and declining ratings for traditional TV, audiences are shifting and Hollywood must move with it, or be left behind.

Source: Tech Crunch