Ideaforge

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I noted Peloton’s secret weapons. Before that, I wrote about a new e-commerce startup, Pietra.

The big story

In one fell swoop, Stripe may disrupt the entire financial services ecosystem.

The $22 billion payments behemoth announced Stripe Capital this week, a provider of quick and easy to obtain loans for internet businesses. The company is expected to launch a card as well, according to TechCrunch’s Ingrid Lunden. What does that mean for recent upstarts like Clearbanc, a business that provides revenue-share agreements to help startups forgo selling equity to VCs, or Brex, which has created a credit card tailored for startups? Stiff competition ahead.

Led by brothers Patrick and John Collison, Stripe is known for developing payment processing software to facilitate online purchases. Doubling down on financial services, the company seeks to become the go-to capital provider to its millions of customers. In a vacuum, it’s no threat to Brex, which has quickly become a fintech darling (with a multibillion-dollar valuation to prove it) — but coupled with Stripe’s massive network, resources and the soon-to-be-announced card, it’s worth concern.

I reached out to both Brex and Clearbanc. Here’s what they had to say.

Clearbanc: “Stripe is one of our close partners because we’re both deeply committed to empowering founders. There’s a huge demand amongst founders for flexible funding that allow them to grow while retaining equity in their company, so it’s encouraging to see the growth of alternative funding options. We’re seeing this first hand — we’re investing an average of $100,000 of growth capital per brand, with other companies taking up to $10 million. New funding alternatives not only open more doors for more businesses, but data-driven platforms can also help to reduce bias and promote entrepreneurship outside of VC capitals like Silicon Valley and New York.”

Brex CEO Henrique Dubugras: “We have created a new financial stack for tech companies, and this has resulted in a very innovative product experience with lots of adoption, so it makes sense that Stripe would also pursue this fast-growing opportunity.”

We’ll share more details on the card as soon as possible.

WeWork slashes expectations

The Wall Street Journal reported this week that the company formerly known as WeWork is considering slashing its valuation as it looks to woo public market investors. The co-working biz may hit the public markets at a valuation of somewhere in the $20 billion range for its initial public offering, a figure that’s far less than the $47 billion valuation it received when it raised its last round of private funding. Yikes…

TechCrunch Disrupt

We are just weeks away from our flagship conference, TechCrunch Disrupt San Francisco. We have dozens of amazing speakers lined up. In addition to taking in the great line-up of speakers, ticket holders can roam around Startup Alley to catch the more than 1,000 companies showcasing their products and technologies. And, of course, you’ll get the opportunity to watch the Startup Battlefield competition live. Past competitors include Dropbox, Cloudflare and Mint… You never know which future unicorn will compete next.

You can take a look at the full agenda here. Here’s a look at the panels I personally will be onstage moderating.

• Brex CEO Henrique Dubugras and Clearbanc president Michele Romanow will discuss the evolving fintech ecosystem and both startups’ ultra-fast growth.
• Slack co-founder Cal Henderson and Slack investor, Spark Capital’s Megan Quinn, will discuss the past, present and future of the now ubiquitous workplace messaging tool.
• Postmates CEO Bastian Lehmann will sit down for a one-on-one conversation on what’s next for the food delivery business.

Deals, deals, deals

• Car-sharing business Getaround is raising $200M at a unicorn valuation
• BigID announces $50M Series C
• India’s Milkbasket in talks to raise $50M
• Bellwether coffee nabs $40M in new funding
• Cooks Venture picks up $12M to rethink agriculture from the ground up
• Spirable refuels with $7.4M to serve more personalized video ads in the US
• Newly renamed Superside raises $3.5M for its outsourced design platform
• Upflow grabs $2.7M to streamline payment processes 

Listen

This week, we recorded Equity on location at TechCrunch Sessions: Enterprise in San Francisco. Our special guest was Emergence Capital founder Jason Green, who joined us to talk about the firm’s specialty: enterprise investments! Danny Crichton, the esteemed leader of TechCrunch’s Extra Crunch, was on hand to co-lead the episode with me. Listen here. And remember, Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify, Pocket Casts, Downcast and all the casts.

Source: Tech Crunch

Streaming music subscriptions continue to drive the U.S. music industry’s growth and revenues, according to a new report from the Recording Industry Association of America (RIAA) released this week. The organization said total music revenue grew 18% to $5.4 billion in the first half of 2019, with streaming music accounting for 80% of industry revenues. The report also noted the number of paid subscriptions topped 60 million in the U.S. for the first time.

Streaming revenues grew 26% to $4.3 billion in the first half of the year.

This broad figure includes paid versions of Spotify, Apple Music, Amazon Music, and others, as well as digital radio service revenues like those from Pandora, Sirius XM, and other internet radio, plus ad-supported streaming like YouTube, Vevo, and the ad-supported version of Spotify.

Meanwhile, paid subscription streaming is continuing to grow, too, said the RIAA. Year-over-year, paid subscriptions grew 31% to reach $3.3 billion and remain the biggest growth driver for industry revenues.

In the first half of 2019, paid subscriptions made up 62% of all U.S. industry revenues and 77% of U.S. streaming music revenues.

The number of paid subscriptions to full on-demand streaming services grew 30% to 61.1 million in the first half of the year, at an average pace of over 1 million new subscriptions per month.

This doesn’t include the “Limited Tier” subscriptions like Pandora Plus or that Echo-only subscription to Amazon Music, for example, where various factors limit access to a full catalog across devices or restrict some on-demand features. This category saw $482 million in revenues, up 39% from the year prior.

“Thanks to that breakneck growth, plus continued modest drops in digital downloads and new physical sales, streaming now generates 80% of music business revenues and has fundamentally reshaped how fans find, share, and listen to the songs and artists they love,” wrote RIAA Chairman & CEO Mitch Glazier, about the new figures.

Ad-supported on-demand services grew 25% year-over-year to $427 million, while digital radio service grew 5% to $552 million in the first half of 2019.

However, the gains made by streaming were somewhat offset by declines in digital downloads, as Glazier noted.

Revenues in this category fell 18% to $462 million in the first half of the year, with digital track sales down 16% year-over-year and digital album revenues down 23%. Overall, digital download only accounted for 8.6% of total industry revenues.

Physical product revenues grew 5% to $485 million in the first half of 2019, but the RIAA attributed this to a reduction in returns.

Source: Tech Crunch

It’s a big day for India’s highly audacious Chandrayaan-2 mission. The nation will attempt to land its lunar orbit on the moon’s surface shortly as it inches closer to become the fourth in the world to complete a successful lunar landing. ISRO, India’s equivalent of NASA, is live streaming the landing on its website, and YouTube channel (embedded below).

Additionally, if you are tuning in from India, dozens of channels including Doordarshan (DD1), Disney India, Colors Infinity, National Geographic, Star Plus, Star Bharat, and DD News are live telecasting the India’s mission to the moon. The landing is scheduled for between 1pm and 2pm Pacific Time (4pm to 5pm Eastern Time; 8pm to 9pm GMT).

ISRO launched its 142 feet tall spacecraft from the the Satish Dhawan Space Centre, Sriharikota in Andhra Pradesh on July 15. The spacecraft consists of an orbiter, a lander named Vikram (named after Vikram Sarabhai, the father of India’s space program), and a six-wheeled rover named Pragyaan (Sanskrit for “wisdom”). Earlier this week, the lander that carried the rover detached from the orbiter.

The mission’s budget is just $141 million, significantly lower than those of the U.S., Russia, and China, and less than half of the recently released blockbuster “Avengers: Endgame.”

Commenting on the landing, India’s Prime Minister Narendra Modi, who will be watching the nation’s attempt at the moon landing from ISRO’s office, said earlier today that, “India, and the rest of the world will yet again see the exemplary prowess of our space scientists.”

Chandrayaan-2 aims to land on a plain surface that covers the ground between two of the moon’s craters, Simpelius N and Manzinus C — that is about 375 miles from the South Pole. It’s an understudied region that no one has seen closely yet.

NASA astronaut Jerry Linenger, said in a televised program today, “I just want everyone to know that the whole world is following this and it is not just Indians. This is the first time any country is going to the South Pole of the moon! India is leading this and as a representative of the US, we are nervous and we are hoping for success. This increases the knowledge base of the moon.”

Source: Tech Crunch

Porsche AG is increasing its stake in Croatian electric vehicle components and hypercar company Rimac Automobili. The increased stake is the latest effort by Porsche to invest more into electric mobility, particularly in battery technology.

It was just 14 months ago that Porsche took a 10% stake in Rimac. Now, the German automaker is pushing that to 15.5%, according to an announcement Friday.

Porsche intends to intensify its collaboration in the field of battery technology, Lutz Meschke, deputy chairman of Porsche’s executive board. Porsche, which just introduced its all-electric Taycan sports car, has said it will invest more than $6 billion into electric mobility through 2025. The automaker spent more than $1 billion developing the Taycan, a cost that included expanding its factory.

For the unfamiliar, Rimac was founded by Mate Rimac in 2009 and is perhaps best known for its electric hypercars such as the two-seater C Two that it debuted in 2018 at the Geneva International Motor Show.

The vehicle produces an extraordinary 1,914 horsepower, has a top speed of 256 miles per hour and can accelerate from 0 to 60 mph in 1.85 seconds. That’s faster than Tesla’s next-generation Roadster prototype that CEO Elon Musk unveiled in November 2017. The Rimac’s battery is no slouch either and gets 404 miles to a single charge under the more generous NEDC estimates. Still, that blows away other EVs on the market. 

But Rimac, which is based in Zagreb and employs around 550 people, does more than produce hypercars. The company focuses on battery technology within the high-voltage segment, engineers and manufactures electric powertrains and develops digital interfaces between humans and machines. The company also develops and produces electric bikes. This strand of the business was established in 2013 in the form of the sister company Greyp Bikes.

“Gaining Porsche as a stakeholder was one of the most important milestones in our history. The fact that Porsche is now increasing its stake is the best form of confirmation for our collaboration and represents the foundation for an even closer relationship,” Mate Rimac, the company’s founder said in a statement. “We are only at the start of our partnership – yet we have already met our high expectations. We have many collaborative ideas that we aim to bring to life in the future. The fundamental focus is creating a win-win situation for both partners and offering our end customers added value by developing exciting, electrified models.”

Porsche isn’t the only automaker interested in Rimac. The company has already worked with Renault, Jaguar, and Aston Martin. And in May 2019, Hyundai Motor Company and Kia Motors jointly invested €80 million, or around $90 million, into Rimac. Under that deal, the three parties agreed  to collaborate on the development of high-performance electric vehicles.

Source: Tech Crunch

Pagerduty‘s CEO Jennifer Tejada and Box co-founder and CEO Aaron Levie both guided their companies to successful IPOs, with Box going public in 2015 and Pagerduty listing its stocks only a few months ago. Both of them will join us on the first day of TechCrunch Disrupt SF (October 2) to talk about their experiences in getting their companies to this point and managing the changes that come with being a public company.

It took both companies about 10 years to get to their IPOs. Levie co-founded the content management and file sharing service Box in 2005 and Pagerduty first launched as a basic notification tool for on-call developers in 2009, with Tejada joining as CEO in 2016. Box has already experienced its share of ups and downs in the stock market and Pagerduty’s IPO in April launched its stock right into one of the more volatile markets in recent years.

At Disrupt, though, we’ll focus on what these two CEOs did to get their companies ready to go public and the process of listing a company — and what, in hindsight, they would’ve done differently.

Box’s road, especially, was rather long and winding. It took the company nine months from filing its S-1 to actually IPOing — in part because the reaction to the numbers it disclosed in its S-1 was pretty negative at the time.

Pagerduty, on the other hand, had a more straightforward path, in part thanks to its strong financial position before it filed.

Disrupt SF runs October 2 to October 4 at the Moscone Center in the heart of San Francisco. Tickets are available here.

( function() {
var func = function() {
var iframe = document.getElementById(‘wpcom-iframe-661cf9b1b8f85f5aae09b8946cafadba’)
if ( iframe ) {
iframe.onload = function() {
iframe.contentWindow.postMessage( {
‘msg_type’: ‘poll_size’,
‘frame_id’: ‘wpcom-iframe-661cf9b1b8f85f5aae09b8946cafadba’
}, “https://tcprotectedembed.com” );
}
}

// Autosize iframe
var funcSizeResponse = function( e ) {

var origin = document.createElement( ‘a’ );
origin.href = e.origin;

// Verify message origin
if ( ‘tcprotectedembed.com’ !== origin.host )
return;

// Verify message is in a format we expect
if ( ‘object’ !== typeof e.data || undefined === e.data.msg_type )
return;

switch ( e.data.msg_type ) {
case ‘poll_size:response’:
var iframe = document.getElementById( e.data._request.frame_id );

if ( iframe && ” === iframe.width )
iframe.width = ‘100%’;
if ( iframe && ” === iframe.height )
iframe.height = parseInt( e.data.height );

return;
default:
return;
}
}

if ( ‘function’ === typeof window.addEventListener ) {
window.addEventListener( ‘message’, funcSizeResponse, false );
} else if ( ‘function’ === typeof window.attachEvent ) {
window.attachEvent( ‘onmessage’, funcSizeResponse );
}
}
if (document.readyState === ‘complete’) { func.apply(); /* compat for infinite scroll */ }
else if ( document.addEventListener ) { document.addEventListener( ‘DOMContentLoaded’, func, false ); }
else if ( document.attachEvent ) { document.attachEvent( ‘onreadystatechange’, func ); }
} )();

Source: Tech Crunch

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Apple Music launches a public beta on the web

While this is the first time Apple has made its music service available on the web, the recent popularity of an unofficial website suggested that there’s some pent-up demand here.

The beta website includes most of Apple Music’s core features, but if you’re a new user looking to sign up, you’ll have to do that elsewhere, through the mobile or desktop app, for now.

2. NY attorney general will lead antitrust investigation into Facebook

In a statement, New York Attorney General Letitia James said her team “will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”

3. Alibaba acquires NetEase Kaola in deal worth $2 billion

Alibaba-owned Tmall Global and Kaola are China’s largest and second-largest cross-border e-commerce platforms, respectively, and as a result of the deal, Kaola will be integrated into Tmall.

4. Xiaomi has shipped 100 million smartphones in India

The Chinese giant, which has held the top smartphone vendor position in India for eight straight quarters, said budget smartphone series Redmi and Redmi Note have been its top selling lineups in the nation.

5. Facebook is making its own deepfakes and offering prizes for detecting them

Facebook, Microsoft and many others are banding together to help make machine learning capable of detecting deepfakes — and they want you to help.

6. YouTube launches a dedicated Fashion vertical

The new vertical, YouTube.com/Fashion, will attempt to better organize some of the video platform’s fashion content, including style videos from top creators, industry collaborations, live streams from the runway, inside looks into the fashion industry, behind-the-scenes video and vlogs from fashion icons.

7. How early-stage startups can use data effectively

Koen Bok outlines what he’s learned from his experience using data to take design software company Framer from seed round to Series B. (Extra Crunch membership required.)

Source: Tech Crunch

It is a commonly held belief that startups can measure their way to success. And while there are always exceptions, early-stage companies often can’t leverage data easily, at least not in the way that later stage companies can. It’s imperative that startups recognize this early on — it makes all the difference.

In this piece, I draw on my experiences using data to take Framer from seed round to Series B. More concretely, I’ll describe what to (not) focus on, and then, how to get real results.

There are good and bad ways for startups to use data. In my opinion, the bad way unfortunately is often preached on saas blogs, a/b test tool marketing pages, and especially growth hacker conferences: that by simply measuring and looking at data you’ll find simple things to do that will drive explosive growth. Silver bullets, if you will.

The good way is comparable to first principles thinking. Below the surface of your day to day results, your startup can be described by a set of numbers. It takes some work to discover these numbers, but once you have them you can use them to make predictions and spot underlying trends. If everyone in your company knows these numbers by heart, they will inevitably make better decisions.

But most importantly, using data the right way will help answer the single most important – but complex – question at any moment for a startup: how are we really doing?

Let’s start with looking at what not to do as a startup.

Table of Contents

• Common pitfalls
  • Don’t measure too much
  • A/B tests are anti-startup
  • Understand your calculations
  • Don’t just use quantitative data
  • Use the real numbers
• Make a plan
  • Define a high-level product funnel
  • Define a metrics plan per stage and implement it
  • Get your whole team on board
• Perfect setup
  • Decide on infrastructure
  • What to build, ideally
• Typical problems
  • Non-measurable data
  • Defining what results are “good”
  • Turning data observations into actionable learnings
• Discovering data
  • Visualization
  • What to look for
  • Analyzing your splashes
  • Look for trends that are growing structurally
  • Look for trends that are growing exponentially
  • Look for trends that are dropping of cliffs
  • Look for predictors: correlations
  • Deciding what to work on

Common pitfalls

Don’t measure too much

Technically, it’s easy to measure everything, so most startups start out that way. But when you measure everything, you learn nothing. Just the sheer noise makes it hard to discover anything useful and it can be demotivating to look at piles of numbers in general.

My advice is to carefully plan what you want to measure upfront, then implement and conclude. You should only expand your set of measurements once you’ve made the most important ones actionable. Later in this article, I provide a clear set of ways to plan what you measure.

A/B tests are anti-startup

To make decisions based on data you need volume. Without volume, the data itself is not statistically significant and is basically just noise. To detect a 3% difference with 95% confidence you would need a sample size of 12,000 visitors, signups, or sales. That sample size is generally too high for most early-stage startups and forces your product development into long cycles.

While on the subject of shipping fast and iterating later, let’s talk about A/B testing. To get reliable measurements, you should only be changing one variable at a time. During the early stages of Framer, we changed our homepage in the middle of a checkout A/B test, which skewed our results. But as a startup, it was the right decision to adjust the way we marketed our product. What you’ll find is that those two factors are often incompatible. In general, constant improvements should trump tests that block quick reactionary changes.

Understand your calculations

Source: Tech Crunch

Apple Music is coming to the web. Apple today is launching a public beta of its popular music streaming service on the web, which will be available to all Apple Music subscribers worldwide. This the first time that Apple Music has been officially offered on the web, though an unofficial app over the past few months has gained attention after attracting hundreds of thousands of users.

Clearly, there was some pent-up demand for a web version of the service.

To use the new Apple Music web version, subscribers can visit the link: beta.music.apple.com and sign in with their Apple ID.

At launch, the service includes many core features, like searching and playing songs from the Apple Music catalog, searching and playing songs from your library (if Sync Library is enabled), accessing your playlists, and more.

All the main sections from the Apple Music app will also be available, including Library, Search, For You, Browse and Radio. Other features will roll out over time as the service is further developed.

During the beta testing period, Apple will be soliciting feedback from customers as it works on the product to help it streamline features and squash any bugs.

At a later date, new users will be able to sign up for Apple Music through the website. But for the time being, you’ll need to be an existing subscriber who signed up elsewhere.

The web version is now one of several ways Apple is making its music service more accessible across platforms.

The service is already available as an app for iPhone, iPad, Apple TV, Apple Watch, and Mac. And at this year’s WWDC 2019 event, Apple announced its plans to dismantle iTunes on the Mac, making Music a standalone app with access to both downloads, library content, and Apple Music’s streaming service.

Apple Music is also offered on non-Apple platforms, like Android, Windows, Sonos and Amazon Echo.

Cross-platform availability is essential in today’s streaming market, as Apple Music faces competition from Spotify, Pandora/SiriusXM, Amazon Music, YouTube Music, and other local players.

At last count, Spotify had 108 paying subscribers in the quarter ending in June and Apple Music topped 60 million subscribers in late June.

Source: Tech Crunch

Last year at this time, Forethought won the TechCrunch Disrupt Battlefield competition. A  $9 million Series A investment followed last December. Today at TechCrunch Sessions: Enterprise in San Francisco, the company introduced the latest addition to its platform called Agatha Predictions.

Forethought CEO and co-founder, Deon Nicholas, said that after launching its original product, Agatha Answers to provide suggested answers to customer queries, customers were asking for help with the routing part of the process, as well. “We learned that there’s a there’s a whole front end of that problem before the ticket even gets to the agent,” he said. Forethought developed Agatha Predictions to help sort the tickets and get them to the most qualified agent to solve the problem.

“It’s effectively an entire tool that helps triage and route tickets. So when a ticket is coming in, it can predict whether it’s a high priority or low priority ticket and which agent is best qualified to handle this question. And this all happens before the agent even touches the ticket. This really helps drive efficiencies across the organization by helping to reduce triage time,” Nicholas explained.

The original product Agatha Answers is designed to help agents get answers more quickly and reduce the amount of time it takes to resolve an issue. “It’s a tool that integrates into your Help Desk software, indexes your past support tickets, knowledge base articles and other [related content]. Then we give agents suggested answers to help them close questions with reduced handle time,” Nicholas said.

He says that Agatha Predictions is based on the same underlying AI engine as Agatha Answers. Both use Natural Language Understanding (NLU) developed by the company. “We’ve been building out our product, and the Natural Language Understanding engine, the engine behind the system, works in a very similar manner [across our products]. So as a ticket comes in the AI reads it, understands what the customer is asking about, and understands the semantics, the words being used,” he explained. This enables them to automate the routing and supply a likely answer for the issue involved.

Nicholas maintains that winning Battlefield gave his company a jump start and a certain legitimacy it lacked as an early-stage startup. Lots of customers came knocking after the event, as did investors. The company has grown from 5 employees when it launched last year at TechCrunch Disrupt to 20 today.

Source: Tech Crunch

Google Search can now help you find your next binge. The company this morning announced a new feature that will make personalized recommendations of what to watch, including both TV shows and movies, and point you to services where the content is available.

The feature is an expansion of Google’s existing efforts in pointing web searchers to informative content about TV shows and films.

Already, a Google search for a TV show or movie title will include a “Knowledge Panel” box at the the top of the search results where you can read the overview, see the ratings and reviews, check out the cast and, as of spring 2017, find services where the show or movie can be streamed or purchased.

The new recommendations feature will instead appear to searchers who don’t have a particular title in mind, but are rather typing in queries like “what to watch” or “good shows to watch,” for example. From here, you can tap a Start button in the “Top picks for you” carousel to rate your favorite TV shows and movies in order to help Google better understand your tastes.

You also can select which subscriptions you have access to, in order to customize your recommendations further. This includes subscription services like Netflix, Hulu, HBO GO and HBO NOW, Prime Video, Showtime, Showtime Anytime, CBS All Access and Starz.

You also can indicate if you have a cable TV or satellite subscription. And it will list shows and movies available for rent, purchase or free streaming from online marketplaces like iTunes, Prime Video, Google Play Movies & TV and Vudu, plus network apps like ABC, Freeform, Lifetime, CBS, Comedy Central, A&E and History.

To get started, you’ll use a Tinder-like swiping mechanism to rate titles. Right swipes indicate a “like” and left swipes indicate a “dislike.” You can “skip” titles you don’t know or have an opinion on.

After giving Google some starter data about your interests, future searches for things to watch will offer recommendations tailored to you.

The company notes that you can even get specific with your requests, by asking for things like “horror movies from the 80s” or “adventure documentaries about climbing.” (This will help, too, when you can’t remember a movie’s title but do know what it’s about.)

Google’s search results will return a list of suggestions, and when you pick one you want to watch, the service will — as before — let you know where it’s available.

The company already has a good understanding of consumer interest in movies and TV thanks to its data on popular searches. Now it aims to have a good understanding of what individual users may want to watch, as well.

The new recommendations feature is live today on mobile for users in the U.S.

Source: Tech Crunch