Ideaforge

Subscription has been all the rage in media circles as the industry searches for new, sustainable business models. We’ve seen companies from infrastructure plays like Substack and Pico to brand verticals like Holloway and The Athletic receive venture funding, all with the goal of changing the economics of news, information and entertainment.

Every day, I get the fortune of talking with founders about their startups and writing about them on TechCrunch, but I’ve also been something of an intrapreneur myself, building out product in the form of TechCrunch’s membership service Extra Crunch as EC’s executive editor over the past two years.

This month, I am transitioning to work on new projects at TechCrunch, and my co-editor Eric Eldon is now going to lead the charge on Extra Crunch as executive editor working in tandem with our new EC senior editor Walter Thompson.

So given the changing of the editorial guard, I wanted to write down some thoughts about editorial product strategy as well as some of the hard-won lessons learned about what worked and what didn’t in building a subscription product in today’s media environment.

The art of building an editorial product strategy within constraints

Before we get into some lessons though, I want to talk about product strategy a little bit. Every startup needs a product strategy, and Extra Crunch was no exception. The difference is that we are fundamentally an editorial product, which means that instead of transforming lines of codes into functional software, we take ideas, interviews, research, and analysis and transform them into articles and other media that users (hopefully!) want to pay for.

Product strategy involves devising a plan within constraints, and TechCrunch was no exception.

The first constraint was that we were not starting from scratch. Unlike a startup, TechCrunch has been here for years and has a strong brand name in the startup community, millions of passionate readers, a successful advertising and events business, and an editorial org that knows how to be productive. We couldn’t just throw out the playbook that has worked for years in the pursuit of a new business model that was untested. And so from the beginning, we had to have an attitude of evolution rather than one of revolution.

Second, we had limited resources in terms of capital and talent. TechCrunch is not a venture-backed company with millions of dollars in funding waiting to be burned in our bank account. Instead, we are a successful, sustainable and sometimes ridiculously efficient media business owned by a telecom that rewards proven financial performance. So when we launched, I was the only dedicated editorial position for Extra Crunch, along with a smattering of freelancers. As we have proven our success since launch this past February, we have since expanded to three dedicated editorial positions for EC. Throughout, we’ve had to have a strategy that was careful about spending our resources.

Third, we had to design a strategy that encompassed the talents of our existing staff. TechCrunch has consistently avoided the “hire a bunch of people and then fire a bunch of people” waves that hit New York media companies again and again and again by relying on smart reporters who can adapt with the changing tides of media. Extra Crunch was no exception — we wanted to build a product that every one of our writers could contribute to.

Those were the constraints. On top of that, I had a couple of personal rules for the product.

First, I hate metered paywalls (i.e. any model that charges you after reading a set number of articles) with a fiery passion. It has never made sense to me that articles could be free for some people, paid for others, or that the article that tries to force a conversion could be a news brief and not one of the best articles a site has published. To optimize for conversions, you want to trigger a conversation around moving from free to paid at just the right time, and not because the article clock has ticked down to zero.

Second, I didn’t want any of our writers to be placed entirely behind the paywall. Everything in subscription (media or not) should be focused on guiding users through the conversion funnel. If a writer is entirely behind the paywall, how can anyone sample their work or start to engage with that voice?

Third and finally, we had to charge for the right kinds of content. People don’t pay for news. They don’t, they won’t, and every time we as an industry ask users to do so, we fail (minus maybe the NYT and WSJ). At TechCrunch, our startup news coverage drives a huge loyal following and is a major credibility point of pride for many early-stage founders. It’s not good business to put that core offering behind a paywall.

With all those constraints and rules in mind, what we ended up centering Extra Crunch on was solving the problems facing founders in building their startups. That included how to raise venture capital, recruit talent, grow, pay themselves, work with PR agencies, and much, much more. I was previously a VC, and so I essentially channeled all the questions my founders would ask me into articles that solved those problems. Since launch in February, we’ve published about 600 articles on these topics.

This approach has allowed us to maximize our existing audience, which already encompasses a large number of founders, designers, builders, and product managers, but also has allowed our writers to write to their strengths, building on their relationships to research and answer new questions.

The great news is that one of our core metrics — engaged reading time — has been very strong, averaging upwards of 5 to 10 minutes per piece depending on its length. Subscribers don’t just read, they read closely and deeply that is not typical of a web surfer stopping by the site for a few seconds.

Now, on to some lessons from this whole product launch and early-growth phase.

Mistake: setting the wrong expectations around content length

I really despise the terms “longform” and its diminutive cousin “shortform.” Articles should be exactly the right length — no longer and no shorter than what is necessary to communicate their ideas. Longform articles are not fundamentally better because they are longer, and in fact, can actually be a lot worse if they convey little with many words.

One of the biggest concerns I heard from TechCrunch writers early on was that they would have to leave their beats for weeks at a time in order to produce “in-depth” subscription content — code for really, really longform pieces.

This fear was exacerbated by a mistake I made right at our launch: we published the Patreon EC-1 package as the very first set of articles on Extra Crunch. Eric Peckham, our media columnist, wrote nearly 24,000 words on the company after conducting many interviews with the startup’s leadership and others in the music and maker industries. A lot of folks on our staff looked at the gargantuan work involved in that package and basically thought “I just don’t have the time to do that” on top of all of their other duties.

Over time, we learned through data that article length has almost no correlation with the number of conversions or the readership of an article. People pay for short articles, long articles and everything in between so long as it meets their needs. That’s a major reason why we don’t have word counts or reading times listed on our content.

Frankly, it took months to emphasize that EC was a change in tone and focus in reporting, rather than just a refuge for extremely long pieces of content. A big part of that was trying to make a splash from day one, rather than just diving right into our day-to-day editorial. I would not take that approach a second time through.

Do: be very mindful of the number of premium articles

Beyond just content length, there was a huge debate early on around how many articles we should publish on EC each day. The obvious argument is essentially “the more the merrier,” since more articles get more readership and therefore more chances to convert users. Of course, there are real constraints, and writing more articles for EC meant drawing resources away from our news coverage on TechCrunch.

The approach that we’ve taken is to keep EC frequent but not overpowering. I have always believed that our core users are extremely busy and overwhelmed by the amount of media they feel a need to consume. So I have pushed hard, in line with my thesis around brainjunk, to try to force us to write a very small number of high-quality articles and simply ask that people pay for them. We ended up targeting about 2-3 articles per weekday, or roughly 5% of TechCrunch’s total volume each day.

Do: Completely ignore users who compare you to Netflix

I have talked a lot about subscription hell, or the sheer number of subscriptions that consumers are being asked to sign up for these days (and that was back in 2018 — hello Disney+!). Hundreds of millions of consumers subscribe to Netflix, or Spotify, or Amazon Prime, or Apple Music, and so invariably, you start to see comparisons of different subscription offerings against each other.

Here’s the thing: Extra Crunch (and really any niche media subscription publication) is not Netflix. We aren’t a general video entertainment service. Instead, we are a service that tries to help founders, builders, and other tech leaders do better in their jobs every single day. That’s just a completely different value proposition.

So when users start to do the comparisons with us (“you’re priced the same as Netflix!!!1”), I flat out ignore them (well, I try to educate, but you get my drift). If a user doesn’t find value in the product, then move on and find the users who do.

Mistake: ‘misunderestimating’ the timeline of product launches

Editorial is our product, but of course, we still have software that drives EC.

Unlike a startup that can just build a stack from scratch, we have software — sometimes really legacy software — that powers our platform. The approach we took on product had to take these constraints into account.

Our product team always gives reasonable timelines, but I have been guilty of just assuming that things will work faster than expected (and yes, I have a technical background and should know better). Unfortunately, I massively underestimated engineering timelines, and that has made communicating with our editorial staff and our readers challenging.

I’ll give two choice examples. First, identity is just tough for us. We have multiple internal identity providers thanks to a legacy of mergers and acquisitions, plus on top of that, we have identity in the context of our content management system as well as our paywall provider. It is a sheer programmatic chore to keep identity information synced across all of these databases, not to mention that each of these identity layers incorporates new changes that break the existing flows. If I had a magic wand, I would create the ultimate “one true identity source of truth.” But I don’t have a magic wand, and instead have code that needs to continue to function.

Second, launching internationally is extremely challenging for us as well. Extra Crunch is available in a handful of countries, but launching elsewhere can require dozens of people to work together to handle tax, accounting, legal, policy, and security reviews across multiple corporate entities and regions. We have thousands of users requesting access from dozens of other countries, but it just takes a lot of work to launch any specific country, making promising a timeline very hard.

The lesson for me here is to work with the timelines you are given, and realize that the world around subscription law is getting ever more complicated.

Do: give your writers huge room to experiment

We are blessed at TechCrunch to have a great editorial team, but as with any new editorial product, there is always a healthy fear of change.

One of the biggest challenges of launching a subscription media product within an existing brand is convincing writers to write for you. On a site where a top-trafficked article can get a million reads, it is hard to convince anyone to put their work behind a wall where only a few thousand people might read it (even if those readers are heavily engaged). Plus, some of our writers have been successfully producing content for a decade or more — some of our staff have literally written thousands of articles on TechCrunch. Any change to that formula is going to take time to be accepted.

On top of that, TechCrunch’s newsroom is very decentralized and bottoms-up. The reason we catch the next startup wave in a space is because our writers don’t have to go up and down the editor stack to get permission to chase a story or a trend. Instead, they can keep their ears to the ground and hunt for the best stories.

So we built structures to ensure that EC can be part of every staffer’s work when they are ready to engage with us. Every writer at TC has their own Slack channel that connects them to the EC editorial team and functions as a place to circulate ideas and get rapid feedback. As good ideas have worked, we’ve then circulated them to other writers as possible models for them to consider.

This approach has afforded us much more experimentation in the early phase of the product than if we had simply set out three buckets of content and demanded that everything fit perfectly inside of them.

Do: Integrate paid with the rest of the editorial product

Extra Crunch is a special, members-only place, but we also wanted to make sure that the product was integrated into everything else that we do. We took a couple of approaches here.

First, we integrated our content into other parts of TechCrunch. For example, Kate Clark and Alex Wilhelm host our VC-focused podcast Equity, which discusses the venture rounds of the week and the startups behind them. When we have published our in-depth EC-1 business analyses, we have also tried to do a special episode of Equity called an Equity Dive where we discussed some of the takeaways of the EC-1 piece for the Equity audience (for instance, here is one on Patreon). Those episodes are packed with interesting tidbits, and also act as marketing for EC.

Second, we created a whole “Extra Crunch Stage” at our flagship conference Disrupt, again focused on solving the challenges that founders face every day. Among the panels we hosted were how to build a billion dollar subscription business, how to get into YC, how to build a startup culture, how to iterate a product, and how to exit your startup. What was great was the balance between our news-breaking Main Stage and the more skills-orinted EC stage. Plus, we also had a special members lounge for EC subscribers at the event, which proved even more popular that I would have predicted (yes, members want to feel exclusive!)

Finally, we also offer EC members a discount on our events, which has driven more attention to our Sessions events and to TechCrunch Disrupt Berlin, where we will have another EC stage this coming December. We love it when members show up in person, and so we wanted to incentivize that as much as we could could. It’s a nice way to say thanks to our most enthusiastic customers.

Do: have a free newsletter for your paid content

This is one we accidentally stumbled upon but has worked really, really well. We have a free newsletter called the Extra Crunch Roundup (example issue) that summarizes the pieces we’ve published on EC.

Here is something crazy: we have about a 4:1 ratio of free users to paid users subscribing to the newsletter. In other words, roughly 80% of the users reading the subscription-focused newsletter don’t subscribe to Extra Crunch.

I can’t stress enough how useful this is. In some cases, these users don’t have access to EC because we haven’t launched in their country, or they haven’t made a purchase decision about us yet. By allowing them to stay tapped into our community, we keep them engaged and hopefully in the long run, turn them into customers.

Mistake: failing to fully integrate real-time analytics into editorial decision-making

Extra Crunch faces a typical business intelligence problem: our core user and analytics data is scattered across a number of data silos, and we don’t have a data lake (a term that, if used in an email sent to me, automatically sends the email to spam by the way). Like many smaller media companies, we lack the data science team and data pipeline engineers required to build out a full BI function.

I code, and I have been able to cobble together some Python scripts to pipeline some of our data into an Airtable so that we have at least decent visibility on what our readers like and what they don’t (in some cases involving manually scraping our own sites since some of our tools don’t have API access). But it doesn’t allow us to make real-time decisions about our content, and that acts as friction to delivering the best possible experience.

While analytics is obviously important for our business leaders, it’s really editorial that needs the data the most. As I was building out the editorial strategy, I would have put even more time into thinking through our analytics strategy to ensure we had the right feedback mechanisms in place from day one to do quality data analysis.

Focused, steady progress against the media maelstrom

It’s been exhilarating watching a product start on a whiteboard and now being enjoyed by paying customers.

Media, and particularly New York media, loves the ambitious editor that wants to shake things up and shoot for the stars with massive budgets and a huge vision. But the reality is that the gyrations in the media industry in Manhattan are entirely avoidable by focusing on users, getting the basics right, using feedback properly, and being sure to walk before you run.

TechCrunch has watched as new publications have jumped into covering the tech industry, old publications have withered and faded away, and every format of media has come and gone. What has ultimately worked for us is to stay true to our founding mission: to fairly cover the startup world and all of its facets. That’s why we’ve always been here, and if the data we have is any proof, a heck of a lot of people are willing to pay to ensure that focus continues for us. So to our early Extra Crunch members — thank you. And of course, the best is yet to come.

Source: Tech Crunch

WeWork, the co-working empire once valued at $47BN before reality struck plunging the business and its investors into crisis, has another problem to add to its growing pile — one which doesn’t exactly reflect well on its core business of kitting out and maintaining modern working environments.

The problem is a safety concern affecting users of WeWork co-working spaces in the US and Canada. Today the company emailed members in the regions to warn that around 1,600 phone booths installed at WeWork locations have been found to have elevated levels of formaldehyde — which it warns could cause health issues for people exposed to the gas.

WeWork blames the issue on a manufacturer of the booths.

The booths are provided in its co-working spaces for WeWork members to be able to take calls in private — given other common areas are shared by all users. 

“After a member informed us of odor and eye irritation, WeWork performed an analysis, including having an outside consultant conduct a series of tests on a sampling of phone booths. Upon receiving results late last week, we began to take all potentially impacted phone booths out of service,” it writes in an email to members.

Affected phone booths “are being taken out of service immediately, and will be removed from your location as soon as possible”, it adds. 

In addition to ~1,600 booths it has confirmed are affected, a further 700 booths are being taken out of service in what WeWork describes as “an abundance of caution” — i.e. while it carries out more checks — with the promise of a further update once it’s concluded its tests. 

Members wanting to know which booths are safe to use in the meanwhile are told to contact the community team at their WeWork location.

WeWork also says alternative quiet spaces will be provided, such as in conference rooms and unused offices. 

Discussing the health risks of formaldehyde gas — a chemical which is used in various building materials –WeWork’s email warns: “Short-term exposure to formaldehyde at elevated levels may cause acute temporary irritation of the nose, throat, and respiratory system, including coughing or wheezing. These effects are typically transient and usually subside after removal of the formaldehyde source.

“Long-term exposure to formaldehyde, such as that experienced by workers in jobs who experience high concentrations over many years, has been associated with certain types of cancers. You can find additional information in this FAQ from the Occupational Safety and Health Administration.”

The email encourages any WeWork members with health concerns to contact a doctor.

A tipster who sent us the email reported experiencing a sensation of “burning eyes” after using the booths.

They also said several people in their team had experienced the same issue.

“Some complained that they felt nauseous after spending time inside the booths,” the tipster wrote. “I never felt that, but the burning eyes was 100% there for me several times. Scary stuff.”

Reached for comment, a WeWork spokesperson confirmed the formaldehyde issue, saying it’s taking “a number” of booths out of service at “some” locations in the US and Canada — due to “potentially elevated levels of formaldehyde caused by the manufacturer”.

“The safety and well-being of our members is our top priority, and we are working to remedy this situation as quickly as possible,” it adds in a statement.

It is not clear exactly how many WeWork locations contain affected booths at this point.

Nor has WeWork provided more detailed information about how long members might have been exposed to elevated levels of formaldehyde — with its email merely suggesting some of the booths have been in place for “months”. 

“The potentially impacted phone booths have been installed over the past few months, exact timing varies based on location,” it writes.

Although clearly the level of exposure will vary from person to person depending on their use of the booths.

The company did not respond to a question asking whether any of its international WeWork locations are affected by the issue.

Source: Tech Crunch

Hulu this summer finally brought back 4K content to its service, after abruptly removing it in 2018 while it focused on other priorities. Initially, its 4K content was only available on Apple TV 4K and Chromecast Ultra. Today, Hulu says it’s available on Xbox One devices, with support for Amazon Fire TV and LG WebOS in the works. More devices will also be supported soon, the company notes.

The streaming service had never really prioritized 4K content, having first rolled out support in December 2016 — years after rivals Netflix and Amazon Prime Video had done the same. Its lineup was also fairly minimal at the time, with 20 James Bond films and a handful of Hulu Originals. And then it was pulled.

Today, Hulu’s 4K lineup is again focused largely on its original programming, including shows like The Handmaid’s Tale, The First, Castle Rock, Catch-22, and others. The company’s FAQ says most of its originals are available in 4K Ultra HD, and stream at 16 Mbps.

Netflix, by comparison, has a much larger library, thanks in part to its more sizable investment in original programming, which it has increasingly shot in 4K over the past few years. Amazon Prime Video also includes its own originals in 4K and around 50 other licensed films.

However, access to Netflix’s 4K library requires its more expensive ($15.99/mo) Premium plan. Accessing Hulu’s 4K library does not require an upgrade.

There are plenty of other ways to get to 4K content, including through iTunes and Google Play Movies & TV — the latter which began offering 4K content for purchase back in 2016. Roku also dedicates a section to 4K content within its main navigation. Apple TV+ originals will also be available in 4K HDR and Dolby Atmos, when it launches in November. Disney+ is also promising 4K at no extra cost. And there’s 4K content available on Vudu, YouTube, FandangoNow, fuboTv, and others.

Hulu’s lack of attention to 4K hasn’t stalled its growth, however, as most consumers don’t consider 4K availability as a reason not to subscribe. In fact, Hulu’s subscriber growth in the U.S. has been steadily climbing, reaching 28 million earlier this year, up 12% from the end of 2018. And with a Disney+ bundle deal now in the works, Hulu is set to grow even faster in the near future.

 

Source: Tech Crunch

Jackson Square Ventures (JSV), an eight-year-old, San Francisco-based early-stage venture firm that takes its name from the neighborhood in San Francisco where it’s headquartered, has closed its third fund with $193 million in capital commitments — a sizable step up from its first two funds, which had both rounded up roughly $120 million from the firm’s limited partners.

The firm, whose founding partners originally spun out of Sigma Partners, invests primarily in U.S.-based software-as-a-service and marketplace companies, with occasional outliers if it can find a way to rationalize the investment. Such was the case with Cornershop, a Latin American online grocery delivery service that JSV co-founder Greg Gretsch first came to know when one of the company’s co-founders, Oskar Hjertonsson, moved in across the street from him.

Recalls Gretsch, “This ‘Swede from Chile’ had sold his earlier company, Needish, to Groupon and it later became Groupon Latin America. Afterward, I advised him a bunch and told him, ‘I’d invest in anything you do.’ Then he said he and his team were working on a group photo-sharing application, and I was like, ‘I’d invest in anything but that.’ ” Gretsch laughs now, but Hjertonsson and company soon realized that a much bigger opportunity was to start a kind of Instacart for Latin America.

That particular pitch resonated with Gretsch, who invested as an angel investor. A year later, he brought the team to JSV with one caveat. “I told everyone, ‘I know this is out side the norm for us. It’s outside the U.S. in Latin America. But it is a marketplace.” Soon after Gretsch’s colleagues — including fellow managing directors Pete Solvik and Josh Breinlinger — met the team and JSV co-led Cornershop’s Series A round.  Cornershop went on to raise roughly $32 million altogether before selling a majority stake in its business last week to Uber for undisclosed terms.

Gretsch says that Hjertonsson and his co-founders are exactly the type of founders that JSV seeks out. “They’re humble and not cocky or overly promotional.”

He says that more broadly, JSV avoids companies in hyped-up spaces, sticking instead to what it knows, which includes enterprise software (DocuSign was among its portfolio companies), and network effects businesses, whether they’re business-to-business or business-to-consumer companies (Gretsch counts portfolio companies OfferUp and Strava in the latter category).

As for how much the firm puts to work, Gretsch says that its sweet spot is Series A deals and that JSV tends to write initial checks of between $4 million and $6 million, preferring a more concentrated portfolio to spreading its bets.

When it does pull the trigger, it’s typically to fund a company that’s already seeing a million dollars in annual recurring revenue, though he says marketplaces can be “pre-revenue” as long as they’re able to show traction on both the supply and demand side. For example, JSV led the Series A round last year in LA-based CREXi, a four-year-old commercial real estate marketplace and technology platform for buyers, brokers, agents and tenants. At the time, it had no revenue, but it could apparently show demand on the part of brokers wanting to list properties on its platform.

Generally speaking, says Gretsch, JSV looks to own 15 to 20% of a company — which is down from 20 to 25 percent in years past, owing to companies raising larger and sometimes continuous seed rounds.

Of course, it also means that companies are further along by the time JSV seems them, and they very typically have customers using the product already. In fact, Gretsch notes that these days, JSV spends “most of our time focusing on customer references, because if customers are singing your praises, that says a lot.”

Source: Tech Crunch

Robotics is back! We are excited to announce that on March 3 next year TechCrunch will host its fourth annual TC Sessions: Robotics & AI at UC Berkeley’s Zellerbach Hall.

Last year, 1,500 founders, technologists, engineering students and investors turned up for a day of main stage interviews with the top figures in AI and robotics, as well as workshops, speaker Q&A and intense networking. The show aims to sit at the intersection of straight-up technology and robotics startups, a zone that’s getting richer every year thanks to rapid advances in AI, GPUs, sensors and all the other related fields.

Boston Dynamics founder Marc Raibert, a regular guest at the show, sums up the show this way: “TechCrunch’s AI / Robotics show blends the best of thoughtful, research-focused robotics with a unique business in technology focus. The result is an event that not only shows cutting edge technology but provides perspective of how it will be impacting business soon.”

Last year, we officially added AI to the title of the show, a recognition that AI is perhaps the single biggest driver behind rapid advancement in robotics. As serial medical robotics entrepreneur Dr. Frederic Moll said at TechCrunch Disrupt SF earlier this week, “Everybody focuses on the mechatronic part of robotics, but what’s going to change the world is the intelligence of robotics.”

Get ready for TechCrunch editorial interviews with the world’s top robotics and AI experts, newsmaking demos, super edifying workshops and fantastic networking. Whether you’re looking for technology and product insights, investment, engineering talent, new partners or all of the above, no show delivers more in a single day than TC Sessions: Robotics & AI.

If you want to get a sense of agendas from our past shows, check out past agendas: 2017 @ MIT, 2018 @UC Berkeley, 2019 @ UC Berkeley.

Register your interest today for the event and you’ll save $100 off tickets when sales launch.

Interested in sponsoring the event? Fill out this form and our sales team will get right back to you.

Source: Tech Crunch

Uber has just laid off around 350 employees across a variety of teams within the organization, marking what the company says is its third and final phase of layoffs of the process it began earlier this year, Uber CEO Dara Khosrowshahi said to employees today in an email obtained by TechCrunch (full email below). Those affected include employees from Eats, performance marketing, Advanced Technologies Group and recruiting, as well as various teams within the global rides and platform departments. Some employees have also been asked to relocate.

“Days like today are tough for us all, and the ELT and I will do everything we can to make certain that we won’t need or have another day like this ahead of us,” Khosrowshahi wrote in the email. “We all have to play a part by establishing a new normal in how we work: identifying and eliminating duplicate work, upholding high standards for performance, giving direct feedback and taking action when expectations aren’t being met, and eliminating the bureaucracy that tends to creep as companies grow.”

In total, the layoffs represent about 1% of the company, an Uber spokesperson told TechCrunch. All of this comes about one month after Uber laid off 435 employees across its product and engineering teams and less than three months after Uber laid off about 400 people from its marketing team. At this point, most departments at Uber have been affected by layoffs.

For Uber’s self-driving car unit, this is its first round of layoffs since it spun out into its own unit earlier this year. Uber has previously said the team consists of more than 1,200 people and today still employs more than 1,200, despite the layoffs. according to an Uber spokesperson. Based on the terms of ATG’s $1 billion fundraising round in April, the unit is worth $7.25 billion on a post-money basis.

More than 70% of those affected in this round of layoffs are based in the U.S. and Canada, and the rest are relatively evenly distributed across APAC, Latin America and EMEA. Uber notified those affected this morning.

As TechCrunch previously reported, these layoffs are a result of Khosrowshahi asking every member of his executive leadership team if they were to start from scratch, would their respective organizations look the way they do?

“As you know, over the past few months, our leaders have looked carefully at their teams to ensure our organizations are structured for success for the next few years,” Khosrowshahi wrote to employees. “This has resulted in difficult but necessary changes to ensure we have the right people in the right roles in the right locations, and that we’re always holding ourselves accountable to top performance.”

In Q2 2019, Uber lost more than $5 billion — its biggest quarterly revenue loss to date — though a chunk of its losses were a result of stock-based compensation expenses for employees following the company’s IPO in May.

In other parts of Uber’s business, it’s continuing to invest money in ensuring its drivers remain 1099 independent contractors. Already, Uber, along with Lyft and DoorDash, put $30 million toward a 2020 ballot initiative that would enable them to keep their drivers as independent contractors. In light of gig worker protection bill AB-5 passing in the California State Senate and Assembly, Uber Chief Legal Officer Tony West made it clear the company was willing to invest more money into that campaign initiative. California Governor Gavin Newsom has since signed that bill into law, which goes into effect January 1, 2020.

While West said he believes Uber would pass the test and prove its drivers are properly classified, there would surely be a financial impact if Uber fails the test. West did not comment on what that impact could be, but industry analysts have estimated a change in classification for drivers could result in up to a 30% cost increase.

Uber will report its Q3 earnings on November 4. The company is currently trading at $31.26 per share, which is well below its IPO pricing of $45.

Below is Khosrowshahi’s full email with the subject line, “Stronger moving forward”:

Team Uber,

As you know, over the past few months, our leaders have looked carefully at their teams to ensure our organizations are structured for success for the next few years. This has resulted in difficult but necessary changes to ensure we have the right people in the right roles in the right locations, and that we’re always holding ourselves accountable to top performance.

Today is the last wave of a process we began months ago with our Marketing team, and more recently, with our Product and Engineering teams. This time, ATG, Eats, Global Rides and Platform (Rides Ops, CommOps, Safety & Insurance, U4B, and Product Ops), Performance Marketing, and Recruiting have made changes. As part of this exercise, some of our employees are being asked to relocate, and around 350 will be leaving the company.

Days like today are tough for us all, and the ELT and I will do everything we can to make certain that we won’t need or have another day like this ahead of us. We all have to play a part by establishing a new normal in how we work: identifying and eliminating duplicate work, upholding high standards for performance, giving direct feedback and taking action when expectations aren’t being met, and eliminating the bureaucracy that tends to creep as companies grow.

We have proven ourselves to be not only one of the most ambitious and innovative companies in the world, but also one of the most resilient. We’ve always pushed through tough times and come out the other side a better and stronger company—that will continue to be true tomorrow, and every day after.

As always, we’ll be at the All Hands tomorrow and will dedicate most of the time to answer your questions. Add yours to the slido here.

Eyes forward—back to building.

Dara

Source: Tech Crunch

Fortnite just blew up its entire map and all that’s left is a black hole.

Some are speculating that this is simply a teaser for a new Fortnite map, but it’s unclear when that new map will arrive. On Epic Games’ status page, it says Fortnite is currently experiencing a minor service outage, noting “anomaly detected.”

As Kotaku reports, players this morning were only able to access a team fight mode called “The End.” That led to a massive explosion that resulted in a black hole.

Fortnite’s website is currently just a Twitch stream featuring a black hole.

Source: Tech Crunch