It feels like there’s a WeWork on every street nowadays. Take a walk through midtown Manhattan (please don’t actually) and it might even seem like there are more WeWorks than office buildings.

Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on. I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @Arman.Tabatabai@techcrunch.com.

Co-working has permeated cities around the world at an astronomical rate. The rise has been so remarkable that even the headline-dominating SoftBank seems willing to bet the success of its colossal Vision Fund on the shift continuing, having poured billions into WeWork – including a recent $4.4 billion top-up that saw the co-working king’s valuation spike to $45 billion.

And there are no signs of the trend slowing down. With growing frequency, new startups are popping up across cities looking to turn under-utilized brick-and-mortar or commercial space into low-cost co-working options.

It’s a strategy spreading through every type of business from retail – where companies like Workbar have helped retailers offer up portions of their stores – to more niche verticals like parking lots – where companies like Campsyte are transforming empty lots into spaces for outdoor co-working and corporate off-sites. Restaurants and bars might even prove most popular for co-working, with startups like Spacious and KettleSpace turning restaurants that are closed during the day into private co-working space during their off-hours.

Before you know it, a startup will be strapping an Aeron chair to the top of a telephone pole and calling it “WirelessWorking”.

But is there a limit to how far co-working can go? Are all of the storefronts, restaurants and open spaces that line city streets going to be filled with MacBooks, cappuccinos and Moleskine notebooks? That might be too tall a task, even for the movement taking over skyscrapers.

The co-working of everything…

Photo: Vasyl Dolmatov / iStock via Getty Images

So why is everyone trying to turn your favorite neighborhood dinner spot into a part-time WeWork in the first place? Co-working offers a particularly compelling use case for under-utilized space.

First, co-working falls under the same general commercial zoning categories as most independent businesses and very little additional infrastructure – outside of a few extra power outlets and some decent WiFi – is required to turn a space into an effective replacement for the often crowded and distracting coffee shops used by price-sensitive, lean, remote, or nomadic workers that make up a growing portion of the workforce.

Thus, businesses can list their space at little-to-no cost, without having to deal with structural layout changes that are more likely to arise when dealing with pop-up solutions or event rentals.

On the supply side, these co-working networks don’t have to purchase leases or make capital improvements to convert each space, and so they’re able to offer more square footage per member at a much lower rate than traditional co-working spaces. Spacious, for example, charges a monthly membership fee of $99-$129 dollars for access to its network of vetted restaurants, which is cheap compared to a WeWork desk, which can cost anywhere from $300-$800 per month in New York City.

Customers realize more affordable co-working alternatives, while tight-margin businesses facing increasing rents for under-utilized property are able to pool resources into a network and access a completely new revenue stream at very little cost. The value proposition is proving to be seriously convincing in initial cities – Spacious told the New York Times, that so many restaurants were applying to join the network on their own volition that only five percent of total applicants were ultimately getting accepted.

Basically, the business model here checks a lot of the boxes for successful marketplaces: Acquisition and transaction friction is low for both customers and suppliers, with both seeing real value that didn’t exist previously. Unit economics seem strong, and vetting on both sides of the market creates trust and community. Finally, there’s an observable network effect whereby suppliers benefit from higher occupancy as more customers join the network, while customers benefit from added flexibility as more locations join the network.

… Or just the co-working of some things…

Photo: Caiaimage / Robert Daly via Getty Images

So is this the way of the future? The strategy is really compelling, with a creative solution that offers tremendous value to businesses and workers in major cities. But concerns around the scalability of demand make it difficult to picture this phenomenon becoming ubiquitous across cities or something that reaches the scale of a WeWork or large conventional co-working player.

All these companies seem to be competing for a similar demographic, not only with one another, but also with coffee shops, free workspaces, and other flexible co-working options like Croissant, which provides members with access to unused desks and offices in traditional co-working spaces. Like Spacious and KettleSpace, the spaces on Croissant own the property leases and are already built for co-working, so Croissant can still offer comparatively attractive rates.

The offer seems most compelling for someone that is able to work without a stable location and without the amenities offered in traditional co-working or office spaces, and is also price sensitive enough where they would trade those benefits for a lower price. Yet at the same time, they can’t be too price sensitive, where they would prefer working out of free – or close to free – coffee shops instead of paying a monthly membership fee to avoid the frictions that can come with them.

And it seems unclear whether the problem or solution is as poignant outside of high-density cities – let alone outside of high-density areas of high-density cities.

Without density, is the competition for space or traffic in coffee shops and free workspaces still high enough where it’s worth paying a membership fee for? Would the desire for a private working environment, or for a working community, be enough to incentivize membership alone? And in less-dense and more-sprawl oriented cities, members could also face the risk of having to travel significant distances if space isn’t available in nearby locations.

While the emerging workforce is trending towards more remote, agile and nomadic workers that can do more with less, it’s less certain how many will actually fit the profile that opts out of both more costly but stable traditional workspaces, as well as potentially frustrating but free alternatives. And if the lack of density does prove to be an issue, how many of those workers will live in hyper-dense areas, especially if they are price-sensitive and can work and live anywhere?

To be clear, I’m not saying the companies won’t see significant growth – in fact, I think they will. But will the trend of monetizing unused space through co-working come to permeate cities everywhere and do so with meaningful occupancy? Maybe not. That said, there is still a sizable and growing demographic that need these solutions and the value proposition is significant in many major urban areas.

The companies are creating real value, creating more efficient use of wasted space, and fixing a supply-demand issue. And the cultural value of even modestly helping independent businesses keep the lights on seems to outweigh the cultural “damage” some may fear in turning them into part-time co-working spaces.

And lastly, some reading while in transit:

• The Grim Future of Urban Warfare – The Atlantic, Darran Anderson
• New York’s New Wage Law for Uber Drivers is a Lesson for Cities Around the World – MIT Technology Review, Erin Winick
• Can New Home Building Tech Help Solve the Affordability Crisis? – FastCompany, Adele Peters
• Homelessness Rises More Quickly Where Rent Exceeds a Third of Income – Zillow Research, Chris Glynn & Alexander Casey
• Vote on Temescal to Test Core Values – StreetsblogSF, Roger Rudick
• L.A. Approves New Rules for Airbnb-Type Rentals After Years of Debate – Los Angeles Times, Emily Alpert Reyes
• Can France Revive its Industrial Heartland? – FT, Harriet Agnew
• Why Communities Across America Are Pushing to Close Waste Incinerators – CityLab, Rebecca Stoner

Source: Tech Crunch

On the heels of a dire government report published last month about climate change and its devastating impacts, many cities and states are scrambling to find ways to curb the greenhouse gas emissions that threaten their air quality, not to mention their economies.

As is often the case, California is leading the charge, yesterday becoming the first state to mandate that mass transit agencies purchase fully electric buses only beginning in 2029, and that public transit routes be populated by electric buses alone by 2040.

The new rule is expected to require the production and purchase of more than 14,000 new zero-emission buses.

Mary Nichols, chair of the California Air and Resource Board (CARB) that voted unanimously to make California the first state with such a commitment, told the outlet Trucks.com earlier this month that California has “to push standards that are more progressive” than the federal government because of the state’s chronic air pollution, which is linked to asthma and heart disease, among other things.

The move is reportedly the result of several years of CARB’s work with industry and public-health groups, and it flies in the face of moves by the Trump administration to push for lower fuel efficiency standards and to instead promote the use of fossil fuels.

Indeed, the Trump administration has questioned from the outset how much the U.S. is responsible for cutting back emissions, and the newest government report seemingly didn’t alter anything for the President. Asked last month about the government’s findings that, unchecked, global warming will have catastrophic implications for the U.S. economy, he said, “I don’t believe it.” He added: “People like myself, we have very high levels of intelligence but we’re not necessarily such believers.”

Instead of wait on the administration to change its mind, California’s new Innovative Clean Transit rule will force California’s public bus lines — many of which currently run on natural gas or diesel fuel — to shift to either electric power or hydrogen fuel cells.

The move could be a boon for electric bus companies like Proterra, a 14-year-old, Burlingame, Ca., company that has raised roughly half a billion dollars from investors to build its zero-emission, battery-electric buses. It could also potentially help the publicly traded Chinese automaker giant BYD, which, as TC has reported, has been on a partnership spree with cities across China to electrify their public transportation systems and is now extending its footprint across the globe.

The new ruling is not the only line of attack that California is adopting. As The Hill notes, earlier this year, California also voted to become the first state to mandate new homes be retrofitted with solar panels. In September, Governor Jerry Brown signed a bill that will require the state to transition to a 100 percent renewable energy electric grid by 2045.

CARB has also worked to advise the U.S. Environmental Protection Agency, which last month announced what it called its Cleaner Trucks Initiative. EPA officials say that via the initiative, the agency plans to revise truck pollution standards in a way that lowers their nitrogen oxide emissions while also doing away with requirements that the industry has complained are financially onerous.

As reported by the L.A. Times, despite the announcement, no one yet knows if the EPA is planning more stringent emissions limits or anything as strict as the 90 percent reduction in nitrogen oxide pollution that CARB has said is needed to clean smog to health standards.

Source: Tech Crunch

Yesterday afternoon, Somali-American workers marched outside of Amazon’s Shakopee, Minnesota fulfillment center, chanting “hear our voice.” Estimates of the exact number of marches vary from source to source, but The Minneapolis Star Tribune puts it at around 100.

It’s a fairly familiar refrain for the company, after years of reports about questionable working conditions. Some of that came to a head earlier this year when pressure from Vermont Senator Bernie Sanders led the company to adopt a $15 minimum wage for warehouse workers.

The protesters cited unfair working conditions and the insensitive treatment of a local workforce that’s approximately 40 percent East African. “We needed secured jobs, we are not robots,” one employee told a local Fox affiliate.

The protest comes the same week employees at a New York City warehouse announced plans to unionize. It is, of course, an inopportune time for the online retail giant, with the Christmas holiday a mere 10 days away.

In a statement, a spokesperson for the company expressed “disappointment,” telling Gizmodo,  “The majority of the people participating in today’s events are not Amazon associates because most Amazon associates are at work today sending out thousands of holiday packages for customers. We are disappointed in today’s efforts to undermine the dedicated and hard-working people who are the life and soul of our business. For them, it was business as usual.”

The spokesperson goes on to defend the company’s work and safety record and inclusion of paid prayer breaks, writing, “Prayer breaks less than 20 minutes are paid, and productivity expectations are not adjusted for such breaks. Associates are welcome to request an unpaid prayer break for over 20 minutes for which productivity expectations would be adjusted.”

Source: Tech Crunch

After gaming chat app startup Discord announced in August that they were building out a games store, today, they’ve detailed that they’ll be pursuing a very competitive 90/10 revenue split for self-published titles in 2019. In addition, the company revealed that they now have 200 million active users on their chat app, up from 130 million users in May.

The announcement follows a storefront launch from Epic Games last week with an 88/12 revenue split. Valve’s Steam store had typically offered a constant 70/30 revenue split for all developers regardless of the revenues they were pulling in. The company recently announced that Steam would give a more favorable split to devs pulling in more revenue.

Discord called up some of their thinking in a company blog post:

Why does it cost 30% to distribute games? Is this the only reason developers are building their own stores and launchers to distribute games? Turns out, it does not cost 30% to distribute games in 2018.

Steam’s efforts are largely focused on holding onto big developers, but indie devs now have to balance what advantages they’re earning by establishing their central home on a platform filled with tons of titles that’s also taking a more substantial cut.

This leaves some room for Discord to attract the self-publishing indies, though it’s still an uphill battle for the company that’s up against some big competitors.

Source: Tech Crunch

When Kahoot, the startup that operates a popular platform for user-generated educational gaming, raised $15 million in October of this year, we mentioned that Disney might take a larger stake in the company, beyond the small investment it took after Kahoot passed through the Disney Accelerator.

Now with some 60 million games on its platform, today Kahoot announced that this has come to pass: Disney has backed Kahoot to the tune of $15 million — working out to a four percent stake in the startup at a $360 million valuation, based on the current share price of 28 Norwegian kroner (shares of Kahoot are traded on the Norway OTC as an unlisted stock).

Kahoot declined to comment for this story beyond the investment announcement posted on the exchange, but for some context, this is a nice bump up in Kahoot’s valuation from October, when it was at $300 million. Other sizeable and notable investors in the company include Microsoft and Nordic investor Northzone (which has backed Spotify and other significant startups out of the region).

On the part of Disney, it’s not clear yet whether its Kahoot stake will lead to more Disney content on the platform, or if this is more of an arm’s length financial backing. The entertainment giant has made nearly 50 investments by way of its accelerator program. In some cases it increases those to more significant holdinga, as it has in the case of HQ Trivia, Sphero, Epic Games, the company behind Fortnite (a very different take on gaming compared to Kahoot), Samba TV and more.

Disney has been dabbling in both gaming and education as vehicles to market its many brands, and also as salient businesses of their own — no surprise, given that one primary focus for it has been on younger consumers and their needs and interests.

In some cases, it seems it may use strategic investments to do this, for example with Disney-themed nights on HQ Trivia. Interestingly, although it doesn’t appear that Disney invests in Byju’s — which itself just raised $300 million — the educational app, which has been described as “Disneyesque”, teamed up with Disney in October to develop co-branded educational content, another sign of Disney’s interest in the field.

Kahoot has been around since 2006 but has seen a sharp rise in users in the last few years on the back of strong growth in the US — benefitting from a wider trend of educators creating content on mediums and platforms that they know students already use and love.

Kahoot’s last reported user numbers come from January, when it said it had 70 million registrations, but its CEO and co-founder Åsmund Furuseth told TechCrunch in October that it was on track to pass 100 million by this month. Kahoot didn’t release updated figures today, but my guess is that Kahoot has hit its target (maybe even passed it), and that is one reason why Disney decided to exercise its investment option.

Kahoot is not your average gaming company: some games are created in-house, but the majority of them are user-generated — “Kahoots” in the company’s parlance — created by the people setting the learning tasks or those trying to create a more entertaining way of remembering or learning something. These, in turn, become games that potentially anyone can use to learn something (hence the name).

There have been about 60 million of these games created to date, a pretty massive amount considering this is educational content at the end of the day.

Kahoot has developed its business along two avenues, with games for K-12 students and games for business users, building training and other professional development in a wrapper of gamification to engage workers more in the content. 

In practice, about half the games in Kahoot’s catalogue are available to the public and half are private, with the split roughly following the company’s business model: games made for corporate purposes tend to be kept private, while the educational ones tend to  be made publicly available. The business model also follows that split, with Kahoot’s business users accounting for the majority of its revenue, too.

We have contacted Disney for comment too and will update this post as we learn more.

Source: Tech Crunch

Pokémon Go creator Niantic is raising a $200 million Series C at a valuation of $3.9 billion according to a report from Katie Roof at the WSJ. The round is expected to be led by IVP with participation from Samsung and aXiomatic Gaming.

The upcoming raise would bring the company’s total funding to $425 million according to Crunchbase. Niantic’s last round was raised at a $3 billion valuation.

TechCrunch has reached out to Niantic for comment.

The gaming startup which has invested significantly in augmented reality technologies is also behind titles such as its recently updated Ingress title and an upcoming Harry Potter mobile game. The company was founded as a startup within Google in 2010 and was spun out as its own entity in 2015, releasing its hit title Pokémon Go the next year.

The company is currently working on its next big augmented reality mobile title Harry Potter: Wizards Unite, aiming to create a proper follow-up hit that can capture the excitement of its Pokémon title. The app’s success will likely be crucial to perceptions that Pokémon Go was more than a fluke breakout success. A release date has not yet been set for the title.

Source: Tech Crunch

Although many of the milestones of the digital revolution have sprung directly from the research output of America’s colleges and universities, like Athena from Zeus’s forehead, on the instructional side, American higher education has taken a laid-back approach. Sure, there are more courses in computer science, millions of students taking courses online and MIT just committed $1 billion to build a new college for AI. But a campus-visiting time-traveler from 25 or 50 years ago would find a very familiar setting — with the possible exception of students more comfortable staring at their devices than maintaining eye contact.

This college stasis may be even more surprising to visitors from the transformed workplace. Jobs that made no or marginal use of digital devices 10 years ago now tether workers to their machines as closely as today’s students are glued to their smartphones. Processes that involved paper are now entirely digital. And experience with relevant function- and industry-specific business software is required in job descriptions for many entry-level jobs.

This hit home a few weeks ago when speaking to an audience of 250 college and university officials. I asked which of their schools provide any meaningful coursework in Salesforce, the No. 1 SaaS platform in American business.

Not one hand went up.

There are many reasons for this. Few if any faculty have dedicated their careers to (or even get marginally excited about) equipping students with the skills they need to secure and succeed in their first jobs. No one’s losing their job (yet) over failure to help students get jobs. Another is the cost of teaching; with strong employer demand for these skills, finding and hiring capable faculty costs more than teaching non-technical subjects. Finally, there’s the rapid pace of change in technology, and the sense that any educational effort will be obsolete in a few years. (Of course, the reality of business software is quite different; foundational platforms like Salesforce have a long shelf life — 10-plus years and counting — and some platforms are expected to last for a generation.)

But the primary reason colleges aren’t educating students on the software they need to launch their careers is the notion that it’s unnecessary because millennials (and now Gen Zers) are “digital natives.”

The idea of digital natives isn’t new. It’s been around for decades: Kids have grown up with digital technologies and so are adept at all things digital. It’s certainly true that today’s college students are proficient with Netflix and Spotify and smartphones. But it’s equally true that the smartphones they’ve grown up with haven’t remotely prepared them to use office phones, let alone career-critical business software.

Eleanor Cooper, co-founder of Pathstream, a startup partnering with higher education institutions to provide business software training, notes that millennials and Gen Zers are “accustomed to Instagram-like platforms which are both intuitive and instantly gratifying. But without exception, we find the user experience of learning business software to be exactly the opposite: instant friction and delayed gratification. Students first face an often multi-hour series of technical steps just to get the software set up before they begin working through tedious button-clicking instructions, which are at best mind-numbing and at worst outdated and inaccurate for the current version of the software.”

In an article in The New Yorker last month, “Why Doctors Hate Their Computers,” Dr. Atul Gawande describes the challenge of implementing Epic, a SaaS platform for managing patient care: “recording and communicating our medical observations, sending prescriptions to a patient’s pharmacy, ordering tests and scans, viewing results, scheduling surgery, sending insurance bills.”

First, there’s 16 hours of mandatory training. Gawande “did fine with the initial exercises, like looking up patients’ names and emergency contacts. When it came to viewing test results, though, things got complicated. There was a column of thirteen tabs on the left side of my screen, crowded with nearly identical terms: ‘chart review,’ ‘results review,’ ‘review flowsheet.’ We hadn’t even started learning how to enter information, and the fields revealed by each tab came with their own tools and nuances.”

Business software is really hard, even for digital natives. Today’s students are accustomed to simple interfaces. But simple interfaces are possible only when the function is simple, like messaging or selecting video entertainment. Today’s leading business software platforms don’t just manage a single function. They manage hundreds, if not thousands.

Gawande references a book by IBM engineer Frederick Brooks, The Mythical Man-Month, which sets forth a Darwinian theory of software evolution from a cool, easy-to-use program (“built by a few nerds for a few of their nerd friends” to perform a limited function), to a bigger program “product” that delivers more functionality to more people, to a “very uncool program system.” Gawande points to the example of Fluidity, a program written by a grad student to run simulations of small-scale fluid dynamics. Researchers loved it, and soon added code to perform new features. The software became more complex, harder to use and more restrictive.

And so beyond cumbersome interfaces, the second reason why business software is really hard is that it has become inextricably and tightly wound up with business processes. Salesforce consultants will tell you it’s easier to conform your business practices to Salesforce than to try to customize (or even configure) Salesforce to support the way you do business today. And that’s true for almost all business software. As Gawande notes, “as a program adapts and serves more people and more functions, it naturally requires tighter regulation. Software systems govern how we interact as groups, and that makes them unavoidably bureaucratic in nature.”

Software-defined business practices are increasingly standardized across functions and industries, and highly knowable. And because they’re knowable, hiring managers want to see candidates who know them. So it’s not just about educating students on software; inherent in preparing students on business software is equipping them with industry and/or job-function expertise. And that requires much more than 16 hours of training.

“Why can’t our work systems be like our smartphones — flexible, easy, customizable? The answer is that the two systems have different purposes,” Gawande explained. “Consumer technology is all about letting me be me. Technology for complex enterprises is about helping groups do what the members cannot easily do by themselves — work in coordination.”

The myth of the digital native is convenient for colleges and universities, because it allows them to stay focused on what faculty want to teach rather than what students actually need to learn. But it’s self-centered, superficial and silly. Rather than thinking about technology in terms of Netflix and smartphones, walk down the street and take a look at the software being utilized to manage your college’s admissions, financial aid and human resources functions. Indeed, 95 percent of your graduates will begin their careers working in places that look a lot more like this than like the faculty lounge. And that’s if they’re lucky. Otherwise they’ll begin their careers working in places that look a lot more like Starbucks.

In his article, Gawande notes that despite the many challenges of adapting to working (and living) on a business software platform, software is eating the world for a good reason: to improve outcomes for consumers. The Epic implementation should allow hospitals to scan records to identify patients who’ve been on opioids for more than three months in order to provide outreach and reduce risk of overdose, or to improve care for homeless patients by seeing that they’ve already had three negative TB tests and therefore don’t need to be isolated. “We think of this as a system for us and it’s not,” said the hospital system’s chief clinical officer. “It is for the patients.”

These improved outcomes are synonymous with the data analytics revolution — a revolution that has colleges and universities excited about new programs and increased enrollment. But all the additional data to improve these outcomes needs to be captured first. And that’s done with complex business software. So it’s unfair, or at least hypocritical, of colleges and universities to attempt to pick the fruit of big data without first sowing the seeds. And sowing the seeds entails a serious investment in preparing students with the technical and business process knowledge they’ll need to use the software that makes big data possible.

Source: Tech Crunch

Pimcore, an open-source platform for data and customer experience management which has emerged out of Austria, has closed $3.5 million in a Series A funding led by German Auctus Capital Partners AG. The funding will be used for its US expansion.

Pimcore is aimed at any channel, device, or industry that wants to manage its digital data and customer experience. While there are several such companies on the market today, Pimcore claims to be an ‘out-of-the-box’ solution and the only open-source platform out there, thus competing with more proprietary products from SAP or Informatica which typically run on licensing business models.

CEO of Pimcore, Dietmar Rietsch says: “Our primary goal is to disrupt traditional licensing business models as open-source adoption skyrockets in enterprises. This funding round gives us the resources and tools to be able to stand up to legacy players like SAP and Oracle, and to really transform the customer experience and data management spaces, especially in the US.”

Pimcore recently acquired the US-based Pimcore Global Services and its whole outsourcing infrastructure in Delhi.

After being founded in 2013, it now has over 82,000 companies across 56 countries, including global enterprises such as Audi, Burger King, Continental and Intersport.

Source: Tech Crunch

Goldex, a trading app that claims to power so-called ‘ethical pricing’ for retail gold investments, says it has now raised over £1M ($1.25M) in a pre-series A round led by a group of angels and institutional investors.

Amongst those participating in the round are Prepaid Financial Services (a European payment card issuer); Gaël de Boissard, former Executive Board Member of Credit Suisse; Richard Balarkas, former President and CEO of Instinets; Nachi Muthu, former global head of IT trading technology at Credit Suisse; Craig James, founder and CEO of Neopay.

Goldex was launched in late July this year. The company was founded by former City electronic trading pioneers from Credit Suisse and UBS, Sylvia Carrasco and Fernando Ripolles wanted to remove barriers to retail gold trading and address some of the questionable practices in the gold investment markets.

The UK app claims to discover the best price amongst all the gold dealers offering bids and offers within the Goldex platform. Sylvia Carrasco, CEO of Goldex, says the funding “has taken us a step closer to becoming the leading gold trading platform that is both ethical and fully transparent to consumers.”

Golden is not alone in the space. Glint is a competitor, but it does not hold any physical gold – whereas Glint does – and Glint sets the price for buying and selling it.

Instead, Goldex routes all clients’ orders to the largest global peer-to-peer gold exchange in five international vaults (London, Zurich, New York, Toronto and Singapore). The company claims this ensures an average savings of 8-12% on the trades and attempts therefore to avoid price manipulation as well as improving transparency over charges.

Source: Tech Crunch