Apple Watch Series 4 is the most accessible watch yet

Every time I ponder the impact Apple Watch has had on my life, my mind always goes to Matthew Panzarino’s piece published prior to the device’s launch in 2015. In it, Panzarino writes about how using Apple Watch saves time; as a “satellite” to your iPhone, the Watch can discreetly deliver messages without you having to disengage from moments to attend to your phone.

In the three years I’ve worn an Apple Watch, I’ve found this to be true. Like anyone nowadays, my iPhone is the foremost computing device in my life, but the addition of the Watch has somewhat deadened the reflex to check my phone so often. What’s more, the advent of Apple Watch turned me into a regular watch-wearer again, period, be it analog or digital. I went without one for several years, instead relying on my cell phone to tell me the time.

To piggyback on Panzarino’s thesis that Apple Watch saves you time, from my perspective as a disabled person, Apple’s smartwatch makes receiving notifications and the like a more accessible experience. As someone with multiple disabilities, Apple Watch not only promotes pro-social behavior, the device’s glanceable nature alleviates the friction of pulling my phone out of my pocket a thousand times an hour. For people with certain physical motor delays, the seemingly unremarkable act of even getting your phone can be quite an adventure. Apple Watch on my wrist eliminates that work, because all my iMessages and VIP emails are right there.

The fourth-generation Apple Watch, “Series 4” in Apple’s parlance, is the best, most accessible Apple Watch to date. The original value proposition for accessibility, to save on physical wear and tear, remains. Yet Series 4’s headlining features — the larger display, haptic-enabled Digital Crown and fall detection — all have enormous ramifications for accessibility. In my testing of a Series 4 model, a review unit provided to me by Apple, I have found it to be delightful to wear and use. This new version has made staying connected more efficient and accessible than ever before.

Big screen, small space

If there were but one banner feature of this year’s Apple Watch, it would indisputably be the bigger screen. I’ve been testing Series 4 for a few weeks and what I tweeted early on holds true: for accessibility, the Series 4’s larger display is today what Retina meant to iPhone 4 eight years ago. Which is to say, it is a highly significant development for the product; a milestone. If you are visually impaired, this should be as exciting as having a 6.5-inch iPhone. Again, the adage that bigger is better is entirely apropos — especially on such a small device as Apple Watch.

What makes Series 4’s larger screen so compelling in practice is just how expansive it is. As with the iPhone XS Max, the watch’s large display makes seeing content easier. As I wrote last month, once I saw the bigger model in the hands-on area following Apple’s presentation, my heart knew it was the size I wanted. The difference between my 42mm Series 3 and my 44mm Series 4 is stark. I’ve never complained about my previous watches being small, screen-wise, but after using the 44mm version for an extended time, the former feels downright minuscule by comparison. It’s funny how quickly and drastically one’s perception can change.

Series 4’s bigger display affects more than just text. Its bigger canvas allows for bigger icons and touch targets for user interface controls. The keypad for entering your passcode and the buttons for replying to iMessages are two standout examples. watchOS 5 has been updated in such a way that buttons have even more definition. They’re more pill-shaped to accommodate the curves of the new display; the Cancel/Pause buttons in the Timer app shows this off well. It aids in tapping, but it also gives them a visual boost that makes it easy to identify them as actionable buttons.

This is one area where watchOS excels over iOS, since Apple Watch’s relatively small display necessitates a more explicit design language. In other words, where iOS leans heavily on buttons that resemble ordinary text, watchOS sits at the polar end of the spectrum. A good rule of thumb for accessible design is that it’s generally better designers aim for concreteness with iconography and the like, rather than be cutesy and abstract because it’s en vogue and “looks cool” (the idea being a visually impaired person can more easily distinguish something that looks like a button as opposed to something that is technically a button but which looks like text).

Apple has course-corrected a lot in the five years since the iOS 7 overhaul; I hope further refinement is something that is addressed with the iOS 13 refresh that Axios’s Ina Fried first reported earlier this year was pushed back until 2019.

Of Series 4’s improvements, the bigger screen is by far my favorite. Apple Watch still isn’t a device you don’t want to interact with more than a minute, but the bigger display allows for another few milliseconds of comfort. As someone with low vision, that little bit of extra time is nice because I can take in more important information; the bigger screen mitigates my concerns over excessive eye strain and fatigue.

The Infograph and Infograph Modular faces

As I wrote in the previous section, the Series 4’s larger display allowed Apple to redesign watchOS such that it would look right given the bigger space. Another way Apple has taken advantage of Series 4’s big screens is the company has created two all-new watch faces that are exclusive to the new hardware: Infograph and Infograph Modular. (There are other cool ones — Breathe, Fire & Water, Liquid Metal and Vapor — that are all available on older Apple Watches that run watchOS 5.)

It’s not hard to understand why Apple chose to showcase Infograph in their marketing images for Series 4; it (and Infograph Modular) look fantastic with all the bright colors and bold San Francisco font. From an accessibility standpoint, however, my experience has been Infograph Modular is far more visually accessible than Infograph. While I appreciate the latter’s beauty (and bevy of complications), the functional downsides boil down to two things: contrast and telling time.

Contrast-wise, it’s disappointing you can’t change the dial to be another color but white and black. White is better here, but it is difficult to read the minute and second markers because they’re in a fainter grayish-black hue. If you choose the black dial, contrast is worse because it blends into the black background of the watch’s OLED display. You can change the color of the minute and second markers, but unless they’re neon yellow or green, readability is compromised.

Which brings us to the major problem with Infograph: it’s really difficult to tell time. This ties into the contrast issue — there are no numerals, and the hands are low contrast, so you have to have memorized the clock in order to see what time it is. Marco Arment articulates the problem well, and I can attest the issue is only made worse if you are visually impaired as I am. It’s a shame because Infograph is pretty and useful overall, but you have to be able to tell time. It makes absolutely no sense to add a digital time complication to what’s effectively an analog watch face. Perhaps Apple will add more customization options for Infograph in the future.

Infograph Modular, which I personally prefer, is not nearly as aesthetically pleasing as Infograph, but it’s far better functionally. Because it’s a digital face, the time is right there for you, and the colorful complications set against the black background is a triumph of high contrast. It is much easier on my eyes, and the face I recommend to anyone interested in trying out Series 4’s new watch faces.

Lastly, a note about the information density of these new faces. Especially on Infograph, it’s plausible that all the complications, in all their color, present an issue for some visually impaired people. This is because there’s a lot of “clutter” on screen and it may be difficult for some to pinpoint, say, the current temperature. Similarly, all the color may look like one washed-out rainbow to some who may have trouble distinguishing colors. It’d be nice if Apple added an option for monochromatic complications with the new faces.

In my usage, neither have been issues for me. I quite like how the colors boost contrast, particularly on Infograph Modular.

Haptics come to the crown

Given Apple’s push in recent years to integrate its so-called Taptic Engine technology — first introduced with the original Watch — across its product lines, it makes perfect sense that the Digital Crown gets it now. Haptics makes it better.

Before Apple Watch launched three years ago, I wrote a story in which I explained why haptic feedback (or “Force Touch,” as Apple coined it then) matters for accessibility. What I wrote then is just as relevant now: the addition of haptic feedback enhances the user experience, particularly for people with disabilities. The key factor is sensory input — as a user, you’re no longer simply watching a list go by. In my usage, the fact that I feel a “tick” as I’m scrolling through a list on the Watch in addition to seeing it move makes it more accessible.

The bi-modal sensory experience is helpful insofar as the secondary cue (the ticks) is another marker that I’m manipulating the device and something is happening. If I only rely on my poor eyesight, there’s a chance I could miss certain movements or animations, so the haptic feedback acts as a “backup,” so to speak. Likewise, I prefer my iPhone to ring and vibrate whenever a call comes in because I suffer from congenital hearing loss (due to my parents being deaf) and could conceivably miss important calls from loved ones or whomever. Thus, that my phone also vibrates while it’s ringing is another signal that someone is trying to reach me and I probably should answer.

Tim Cook made a point during the original Watch’s unveiling to liken the Digital Crown as equally innovative and revolutionary as what the mouse was to the Mac in 1984 and what multi-touch was to the iPhone in 2007. I won’t argue his assertion here, but I will say the Series 4’s crown is the best version of the “dial,” as Cook described it, to date. It’s because of the haptic feedback. It gives the crown even more precision and tactility, making it more of a compelling navigational tool.

Considering fall detection

As I watched from the audience as Apple COO Jeff Williams announced Series 4’s new fall detection feature, I immediately knew it was going to be a big deal. It’s something you hope to never use, as Williams said on stage, but the fact it exists at all is telling for a few reasons — the most important to me being accessibility.

I’ve long maintained accessibility, conceptually, isn’t limited to people with medically recognized disabilities. Accessibility can mean lots of different things, from mundane things like where you put the paper towel dispenser on the kitchen counter to more critical ones like building disabled parking spaces and wheelchair ramps for the general public. Accessibility also is applicable to the elderly who, in the case of fall detection, could benefit immensely from such a feature.

Instead of relying on a dedicated lifeline device, someone who’s even remotely interested in Apple Watch, and who’s also a fall risk, could look at Series 4 and decide the fall detection feature alone is worth the money. That’s exactly what happened to my girlfriend’s mother. She is an epileptic and is a high-risk individual for catastrophic falls. After seeing Ellen DeGeneres talk up the device on a recent episode of her show, she was gung-ho about Series 4 solely for fall detection. She’d considered a lifeline button prior, but after hearing how fall detection works, decided Apple Watch would be the better choice. As of this writing, she’s had her Apple Watch for a week, and can confirm the new software works as advertised.

Personally, my cerebral palsy makes it such that I can be unsteady on my feet at times and could potentially fall. Fortunately, I haven’t needed to test fall detection myself, but I trust the reports from my girlfriend’s mom and The Wall Street Journal’s Joanna Stern, who got a professional stunt woman’s approval.

Problematic packaging

Apple Watch Series 4 is pretty great all around, but there is a problem. One that has nothing to do with the product itself. How Apple has chosen to package Apple Watch Series 4 is bad.

Series 4’s unboxing experience is a regression from all previous models, in my opinion. The issue is Apple’s decision to pack everything “piecemeal” — the Watch case itself comes in an (admittedly cute) pouch that’s reminiscent of iPod Socks, while the band is in its own box. Not to mention the AC adapter and charging puck are located in their own compartment. I understand the operational logistics of changing the packaging this way, but for accessibility, it’s hardly efficient. In many ways, it’s chaotic. There are two reasons for this.

First, the discrete approach adds a lot in terms of cognitive load. While certainly not a dealbreaker for me, unboxing my review unit was jarring at first. Everything felt disjointed until I considered the logic behind doing it this way. But while I can manage to put everything together as if it were a jigsaw puzzle, many people with certain cognitive delays could have real trouble. They would first need to determine where everything is in the box before then determining how to put it all together; this can be frustrating for many. Conversely, the advantage of the “all-in-one” approach of Series past (where the case and band was one entity) meant there was far less mental processing needed to unbox the product. Aside from figuring out how the band works, the old setup was essentially a “grab and go” solution.

Second, the Series 4 packaging is more fiddly than before, quite literally. Instead of the Watch already being put together, now you have to fasten the band to the Watch in order to wear it. I acknowledge the built-in lesson for fastening and removing bands, but it can be inaccessible too. If you have visual and/or fine-motor impairments, you could spend several minutes trying to get your watch together so you can pair it with your iPhone. That time can be taxing, physically and emotionally, which in turn worsens the overall experience. Again, Apple’s previous packaging design alleviated much of this potential stress — whereas Series 4 exacerbates it.

I’ve long admired Apple’s product packaging for its elegance and simplicity, which is why the alarm bells went off as I’ve unboxed a few Series 4 models now. As I said, this year’s design definitely feels regressive, and I hope Apple reconsiders their old ways come Series 5. In fact, they could stand to take notes from Microsoft, which has gone to great lengths to ensure their packaging is as accessible as possible.

The bottom line

Three years in, I can confidently say I could live without my Apple Watch. But I also can confidently say I wouldn’t want to. Apple Watch has made my life better, and that’s not taking into account how it has raised my awareness for my overall health.

My gripes about the packaging and Infograph face aside, Series 4 is an exceptional update. The larger display is worth the price of admission, even from my year-old Series 3. The haptic Digital Crown and fall detection is the proverbial icing on the cake. I believe the arrival of Series 4 is a seminal moment for the product, and it’s the best, most accessible Apple Watch Apple has made yet.


Source: Tech Crunch

Blood money

Some years ago an investor I met at a TechCrunch event invited me out for a coffee. This happens a lot; as a weekly columnist here I am deemed an official Media Influencer, and people in turn want to influence me, until they realize I’m just going to ignore them and write about whatever weird idea comes into my head instead. I accepted this invitation, though, because this guy’s job was unusually interesting, in a bad way — he represented a venture fund affiliated with the Kremlin.

This was before Russia was the democracy-manipulating enemy it is today, but just after Russia passed its “anti-gay law,” so angry anti-Russian sentiment was exceptionally strong. It was fascinating to me watching this man squirm around the topic: I’m a Bay Area guy, he told me, I’m pro gay rights, pro gay marriage, but we have to accept that every country becomes enlightened at its own speed and its own way, and the best way for us to encourage that, to promote our values, is to engage with them, to show them the right way of doing things.

Needless to say this is a column about Saudi Arabia.

It’s kind of amazing that it’s taken the murder of Jamal Khashoggi to wake people up to that nation’s brutality. For three years now Saudi Arabia has been slaughtering thousands of Yemenis in a needless conflict wherein, to quote Bloomberg quoting the UN, “especially a Saudi Arabian-led coalition and the Yemeni government it backs, have shown a disregard for civilian life possibly amounting to war crimes.” It has long been a totalitarian absolute monarchy allied with what was once a radical interpretation of Islam, Wahhabism, which T.E. Lawrence described a hundred years ago as an obscure “fanatical heresy” — and which has since been mainstreamed with disastrous global consequences as a result of this alliance.

And, of course, it has long been an intimate international ally and partner of the United States. America’s financial / military / consulting / industrial / oil complexes have been in bed with the Saudis for a very, very long time, as have its politicians. Let’s not pretend that Saudi money in the tech industry is in any way exceptionally bad or different. Bad, yes, but as bad as, well, the rest of American society. For a long time the US attitude towards Saudi Arabia seems to have been: “sure, they’re an oppressive dictatorship, but they’re our oppressive dictatorship, and their royal family is very nice and very generous and they control so much oil.”

Now, though, at long last, that attitude seems to be changing. Not that the US is going to stop buying oil from them. Not that the US is going to stop selling weapons to them. But, despite occasional hesitant steps into the twentieth (but definitely not the twenty-first) century, nobody is going to pretend Saudi Arabia is anything other than a brutally oppressive state from here on in. (Shout-out to my homeland for being ahead of the curve on this one.) Which is progress, I guess, of a sort?

You can make a realpolitik case for continuing to engage with Saudi Arabia. Just like my coffee companion five years ago did for continuing to engage with Russia. See how well that turned out, how since then Russia has become so much more enlightened, so progressive, such a glorious contributor to the commonwealth of nations? …Oh. Saudi Arabia is different, yes, but in a worse way; it’s so sensitive to criticism, overreacts so wildly and violently, because it is fundamentally a fragile state. Nassim Taleb, who predicted the collapse of Syria and its civil war before it happened, has predicted a similar fate for Saudi Arabia.

I don’t think the Trump administration is going to continue its support for Saudi Arabia’s new and erratic leadership for fear of the human or economic consequences if they do otherwise. “Trump’s razor:” the stupidest reason is most likely to be correct. Here, that means the administration doesn’t want to walk back their Saudi support because they think that will make them look weak. Similarly, who are we kidding, VCs who take money from Saudi LPs aren’t doing so in order to help prop up the Pax Americana; it’s purely because they want the money, and nobody else is prepared to throw around $45 billion in cash.

Right now, though, and for the foreseeable future, sovereign Saudi money is tainted, poisoned, blood money. If you accept it you have to consider the consequences of publicly contravening our new, post-Khashoggi social morality, and the angry criticism which will follow. Will that last? Who can say? Even if it doesn’t, though, you’ll have to consider the consequences of privately contravening your own ethics, if you have any. That was also true last year, and it will still be true next year, no matter how much money we’re talking about.


Source: Tech Crunch

Early-bird pricing to Disrupt Berlin 2018 flies away in four days

Die uhr tickt, menschen — the clock is ticking, people. Early-bird pricing on passes to Disrupt Berlin 2018 migrates to parts unknown in just four days. If you want to join us at the Arena Berlin on 29-30 November — and save up to €500 in the process — you need to buy your pass before the 24 October deadline.

Thousands of people across Europe and beyond — founders, investors, marketers, technologists, coders, hackers — arrive ready to dive deep into the subject they love most: tech startups. Disrupt Berlin is always an exciting adventure, and we’re pumped about this year’s lineup of speakers and events.

Here’s just a quick sample of the speakers who will grace the Main Stage to share their stories and perspectives:

  • Lucas di Grassi, former F1 driver and current CEO of Roborace, will discuss how his company is merging human driving and artificial intelligence to build a better racing series.
  • Pieter van der Does, CEO of payments company Adyen, will share how the startup quietly built its empire and took a profitable company public.
  • Anne Kjaer-Riechert, founder of the ReDI School of Digital Integration, and Aline Sara, founder of NaTakallam, discuss using technology to address the world refugee crisis — specifically ReDI’s hugely successful code school for refugees and NaTakallam’s global platform for refugees to teach languages.

You don’t want to miss out on Startup Battlefield — our premier startup-pitch competition is a perennial favorite at every Disrupt event. Watch as 15 of Europe’s exceptional early-stage startup founders compete for $50,000 in non-equity cash, media and investor love and world-class bragging rights.

Over the years, Startup Battlefield alumni have gone on to become big-name tech companies — like Dropbox, Mint, Yammer and Tripit, to name but a few. Will you witness the birth of the next unicorn in Berlin?

There’s so much more to do and see at Disrupt Berlin: Q&A sessions, hands-on workshops, Startup Alley, world-class networking and the ever-popular (and insane) Disrupt After Party.

TechCrunch Disrupt Berlin 2018 goes down on 29-30 November, and the countdown to serious savings is on. Die uhr tickt — the clock is ticking. Buy your early-bird pass before 24 October and save up to €500.

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Source: Tech Crunch

A Twitter employee groomed by the Saudi government prompted 2015 state-sponsored hacking warning

An explosive report in The New York Times this weekend sheds new light on the apparent targeting of Twitter accounts by “state-sponsored actors” three years ago.

It comes in the wake of the confirmed death of Washington Post journalist Jamal Khashoggi on Friday, two weeks after he disappeared in the Saudi consulate in Istanbul. Khashoggi had long been a target of a Saudi troll army, according to the report, which employed hundreds of people to stifle the speech of government critics, like Khashoggi, who left the kingdom to live and work in the United States.

But the troll farm is said to be one part of a wider scheme by the Saudi leadership to surveil critics and dissidents.

According to the report, Western intelligence officials told Twitter that one of its employees, a Saudi national, was asked by the Saudi government to spy on the accounts of dissidents. The employee — an engineer — had access to account data on Twitter users, including phone numbers and IP addresses. Saudi officials are said to have convinced him to snoop on several accounts. Twitter fired the employee, despite finding no evidence that he handed data over to the Saudi government. The employee later returned to the kingdom and now works for its government.

After the dismissal, the Times reports, Twitter sent out warnings a few dozen users that their accounts “may have been targeted by state-sponsored actors.”

“As a precaution, we are alerting you that your Twitter account is one of a small group of accounts that may have been targeted by state-sponsored actors,” said Twitter in the email to affected users. “We believe that these actors (possibly associated with a government) may have been trying to obtain information such as email addresses, IP addresses, and/or phone numbers.”

Twitter didn’t say at the time what was the cause of the email warning, leading some to question what linked the affected accounts.

Around 20 users were affected, including privacy and security researcher Runa Sandvik, human rights activist Michael Carbone, and Austrian communications expert Marco Schreuder.

Several of the affected users also worked for the Tor Project, a non-profit that allows activists and researchers to browse the web anonymously — often to bypass state-level censorship and surveillance.

Facebook and Google also have similar alerts in place in the event of suspected state-sponsored attacks or hacking, though often the companies send out alerts out of an abundance of caution — rather than a solid indicator that an account has been breached.

When reached, a Twitter spokesperson declined to comment.


Source: Tech Crunch

China is funding the future of American biotech

Silicon Valley is in the midst of a health craze, and it is being driven by “Eastern” medicine.

It’s been a record year for US medical investing, but investors in Beijing and Shanghai are now increasingly leading the largest deals for US life science and biotech companies. In fact, Chinese venture firms have invested more this year into life science and biotech in the US than they have back home, providing financing for over 300 US-based companies, per Pitchbook. That’s the story at Viela Bio, a Maryland-based company exploring treatments for inflammation and autoimmune diseases, which raised a $250 million Series A led by three Chinese firms.

Chinese capital’s newfound appetite also flows into the mainland. Business is booming for Chinese medical startups, who are also seeing the strongest year of venture investment ever, with over one hundred companies receiving $4 billion in investment.

As Chinese investors continue to shift their strategies towards life science and biotech, China is emphatically positioning itself to be a leader in medical investing with a growing influence on the world’s future major health institutions.

Chinese VCs seek healthy returns

We like to talk about things we can interact with or be entertained by. And so as nine-figure checks flow in and out of China with stunning regularity, we fixate on the internet giants, the gaming leaders or the latest media platform backed by Tencent or Alibaba.

However, if we follow the money, it’s clear that the top venture firms in China have actually been turning their focus towards the country’s deficient health system.

A clear leader in China’s strategy shift has been Sequoia Capital China, one of the country’s most heralded venture firms tied to multiple billion-dollar IPOs just this year.

Historically, Sequoia didn’t have much interest in the medical sector.  Health was one of the firm’s smallest investment categories, and it participated in only three health-related deals from 2015-16, making up just 4% of its total investing activity. 

Recently, however, life sciences have piqued Sequoia’s fascination, confirms a spokesperson with the firm.  Sequoia dove into six health-related deals in 2017 and has already participated in 14 in 2018 so far.  The firm now sits among the most active health investors in China and the medical sector has become its second biggest investment area, with life science and biotech companies accounting for nearly 30% of its investing activity in recent years.

Health-related investment data for 2015-18 compiled from Pitchbook, Crunchbase, and SEC Edgar

There’s no shortage of areas in need of transformation within Chinese medical care, and a wide range of strategies are being employed by China’s VCs. While some investors hope to address influenza, others are focused on innovative treatments for hypertension, diabetes and other chronic diseases.

For instance, according to the Chinese Journal of Cancer, in 2015, 36% of world’s lung cancer diagnoses came from China, yet the country’s cancer survival rate was 17% below the global average. Sequoia has set its sights on tackling China’s high rate of cancer and its low survival rate, with roughly 70% of its deals in the past two years focusing on cancer detection and treatment.

That is driven in part by investments like the firm’s $90 million Series A investment into Shanghai-based JW Therapeutics, a company developing innovative immunotherapy cancer treatments. The company is a quintessential example of how Chinese VCs are building the country’s next set of health startups using their international footprints and learnings from across the globe.

Founded as a joint-venture offshoot between US-based Juno Therapeutics and China’s WuXi AppTec, JW benefits from Juno’s experience as a top developer of cancer immunotherapy drugs, as well as WuXi’s expertise as one of the world’s leading contract research organizations, focusing on all aspects of the drug R&D and development cycle.

Specifically, JW is focused on the next-generation of cell-based immunotherapy cancer treatments using chimeric antigen receptor T-cell (CAR-T) technologies. (Yeah…I know…) For the WebMD warriors and the rest of us with a medical background that stopped at tenth-grade chemistry, CAR-T essentially looks to attack cancer cells by utilizing the body’s own immune system.

Past waves of biotech startups often focused on other immunologic treatments that used genetically-modified antibodies created in animals.  The antibodies would effectively act as “police,” identifying and attaching to “bad guy” targets in order to turn off or quiet down malignant cells.  CAR-T looks instead to modify the body’s native immune cells to attack and kill the bad guys directly.

Chinese VCs are investing in a wide range of innovative life science and biotech startups. (Photo by Eugeneonline via Getty Images)

The international and interdisciplinary pedigree of China’s new medical leaders not only applies to the organizations themselves but also to those running the show.

At the helm of JW sits James Li.  In a past life, the co-founder and CEO held stints as an executive heading up operations in China for the world’s biggest biopharmaceutical companies including Amgen and Merck.  Li was also once a partner at the Silicon Valley brand-name investor, Kleiner Perkins.

JW embodies the benefits that can come from importing insights and expertise, a practice that will come to define the companies leading the medical future as the country’s smartest capital increasingly finds its way overseas.

GV and Founders Fund look to keep the Valley competitive

Despite heavy investment by China’s leading VCs, Silicon Valley is doubling down in the US health sector.  (AFP PHOTO / POOL / JASON LEE)

Innovation in medicine transcends borders. Sickness and death are unfortunately universal, and groundbreaking discoveries in one country can save lives in the rest.

The boom in China’s life science industry has left valuations lofty and cross-border investment and import regulations in China have improved.

As such, Chinese venture firms are now increasingly searching for innovation abroad, looking to capitalize on expanding opportunities in the more mature US medical industry that can offer innovative technologies and advanced processes that can be brought back to the East.

In April, Qiming Venture Partners, another Chinese venture titan, closed a $120 million fund focused on early-stage US healthcare. Qiming has been ramping up its participation in the medical space, investing in 24 companies over the 2017-18 period.

New firms diving into the space hasn’t frightened the Bay Area’s notable investors, who have doubled down in the US medical space alongside their Chinese counterparts.

Partner directories for America’s most influential firms are increasingly populated with former doctors and medically-versed VCs who can find the best medical startups and have a growing influence on the flow of venture dollars in the US.

At the top of the list is Krishna Yeshwant, the GV (formerly Google Ventures) general partner leading the firm’s aggressive push into the medical industry.

Krishna Yeshwant (GV) at TechCrunch Disrupt NY 2017

A doctor by trade, Yeshwant’s interest runs the gamut of the medical spectrum, leading investments focusing on anything from real-time patient care insights to antibody and therapeutic technologies for cancer and neurodegenerative disorders.

Per data from Pitchbook and Crunchbase, Krishna has been GV’s most active partner over the past two years, participating in deals that total over a billion dollars in aggregate funding.

Backed by the efforts of Yeshwant and select others, the medical industry has become one of the most prominent investment areas for Google’s venture capital arm, driving roughly 30% of its investments in 2017 compared to just under 15% in 2015.

GV’s affinity for medical-investing has found renewed life, but life science is also part of the firm’s DNA.  Like many brand-name Valley investors, GV founder Bill Maris has long held a passion for the health startups.  After leaving GV in 2016, Maris launched his own fund, Section 32, focused specifically on biotech, healthcare and life sciences. 

In the same vein, life science and health investing has been part of the lifeblood for some major US funds including Founders Fund, which has consistently dedicated over 25% of its deployed capital to the space since at least 2015.

The tides may be changing, however, as the recent expansion of oversight for the Committee on Foreign Investment in the United States (CFIUS) may severely impact the flow of Chinese capital into areas of the US health sector. 

Under its extended purview, CFIUS will review – and possibly block – any investment or transaction involving a foreign entity related to the production, design or testing of technology that falls under a list of 27 critical industries, including biotech research and development.

The true implications of the expanded rules will depend on how aggressively and how often CFIUS exercises its power.  But a lengthy review process and the threat of regulatory blocks may significantly increase the burden on Chinese investors, effectively shutting off the Chinese money spigot.

Regardless of CFIUS, while China’s active presence in the US health markets hasn’t deterred Valley mainstays, with a severely broken health system and an improved investment environment backed by government support, China’s commitment to medical innovation is only getting stronger.

VCs target a disastrous health system

Deficiencies in China’s health sector has historically led to troublesome outcomes.  Now the government is jump-starting investment through supportive policy. (Photo by Alexander Tessmer / EyeEm via Getty Images)

They say successful startups identify real problems that need solving. Marred with inefficiencies, poor results, and compounding consumer frustration, China’s health industry has many

Outside of a wealthy few, citizens are forced to make often lengthy treks to overcrowded and understaffed hospitals in urban centers.  Reception areas exist only in concept, as any open space is quickly filled by hordes of the concerned, sick, and fearful settling in for wait times that can last multiple days. 

If and when patients are finally seen, they are frequently met by overworked or inexperienced medical staff, rushing to get people in and out in hopes of servicing the endless line behind them. 

Historically, when patients were diagnosed, treatment options were limited and ineffective, as import laws and affordability issues made many globally approved drugs unavailable.

As one would assume, poor detection and treatment have led to problematic outcomes. Heart disease, stroke, diabetes and chronic lung disease accounts for 80% of deaths in China, according to a recent report from the World Bank

Recurring issues of misconduct, deception and dishonesty have amplified the population’s mounting frustration.

After past cases of widespread sickness caused by improperly handled vaccinations, China’s vaccine crisis reached a breaking point earlier this year.  It was revealed that 250,000 children had been given defective and fallacious rabies vaccinations, a fact that inspectors had discovered months prior and swept under the rug.

Fracturing public trust around medical treatment has serious, potentially destabilizing effects. And with deficiencies permeating nearly all aspects of China’s health and medical infrastructure, there is a gaping set of opportunities for disruptive change.

In response to these issues, China’s government placed more emphasis on the search for medical innovation by rolling out policies that improve the chances of success for health startups, while reducing costs and risk for investors.

Billions of public investment flooded into the life science sector, and easier approval processes for patents, research grants, and generic drugs, suddenly made the prospect of building a life science or biotech company in China less daunting. 

For Chinese venture capitalists, on top of financial incentives and a higher-growth local medical sector, loosening of drug import laws opened up opportunities to improve China’s medical system through innovation abroad.

Liquidity has also improved due to swelling global interest in healthcare. Plus, the Hong Kong Stock Exchange recently announced changes to allow the listing of pre-revenue biotech companies.

The changes implemented across China’s major institutions have effectively provided Chinese health investors with a much broader opportunity set, faster growth companies, faster liquidity, and increased certainty, all at lower cost.

However, while the structural and regulatory changes in China’s healthcare system has led to more medical startups with more growth, it hasn’t necessarily driven quality.

US and Western investors haven’t taken the same cross-border approach as their peers in Beijing. From talking with those in the industry, the laxity of the Chinese system, and others, have made many US investors weary of investing in life science companies overseas.

And with the Valley similarly stepping up its focus on startups that sprout from the strong American university system, bubbling valuations have started to raise concern.

But with China dedicating more and more billions across the globe, the country is determined to patch the massive holes in its medical system and establish itself as the next leader in international health innovation.


Source: Tech Crunch

Early-stage SaaS VC slip snaps recovery as public software stocks soar

A few months ago, Crunchbase News reported that a longstanding period of SaaS investment stagnation had come to an end.

However, the investment boom times didn’t necessarily carry over to the seed and early-stage end of the subscription software businesses.

The chart below displays deal and dollar volume of seed and early-stage venture investments1 made into companies from around the world in Crunchbase’s SaaS category. Note that it is subject to historically documented reporting delays, which are most pronounced in seed and early-stage deals.

As can be plainly seen that Q3 2018 took quite a turn in terms of investment into SaaS. And it’s a bit bewildering as to why.

Overall, the venture market in Q3 hit record heights, and nearly every stage of investment saw more dollars and more rounds. Yet, as shown above, SaaS startups don’t appear to be beneficiaries of this influx of cash.

The public comparison

The picture becomes even more distorted when we account for public market SaaS comps, which set the benchmark for private companies. And that benchmark hasn’t been suffering. Public cloud companies have enjoyed a steep run up in asset value over the past several years.

The newly revamped BVP Nasdaq Emerging Cloud Index (formerly known as the Bessemer Cloud Index) tracks a basket of publicly traded SaaS stocks, including the likes of SalesforceAdobe and more recent debuts like DropboxDocuSign and Okta, among others.

Public cloud stocks soar

Public companies in the Bessemer Cloud Index grew their public valuations much faster than more broad-based indices like the Dow Jones Industrial Average and the S&P 500. Carried by the high and still-growing value of recurring revenuewarm reception of SaaS companies new to public markets and (with the exception of the past couple of weeks) generally stable markets overall, public SaaS companies have done well. Despite a pretty absurd rate of growth on the public side, no such consistent growth could be found on the early-stage, private end of the market.

However, rather than viewing Q3 2018 as a disappointment for the early-stage SaaS investment market, it’s more like a reversion to the mean. It’s the first half of the year that’s the outlier, not Q3.

Big deals, slowing pace

The first half of 2018 had some truly huge early-stage deals cross the wires. In March, Robotic process automation software company UiPath raised $153 million in its Series B. (UiPath just raised another $225 million in a Series C round in September.) Collaborative email inbox Front App raised $66 million in its January Series B. Rival Chicago logistics software companies FourKites and project44 each raised $35 million Series B rounds earlier in the year. On a one-off basis, these are big rounds, but collectively they add up to a huge pile of money.

The conclusion we’re drawn to here is that we were perhaps premature in declaring the long-time downtrend snapped to the upside.

  1. On the seed-stage side, that includes pre-seed, seed and angel rounds, as well as smaller convertible notes and proceeds from small equity crowdfunding campaigns. Early-stage deals include Series A and Series B rounds, as well as larger convertible notes and equity crowdfunding campaigns.


Source: Tech Crunch

Khashoggi’s fate shows the flip side of the surveillance state

It’s been over five years since NSA whistleblower Edward Snowden lifted the lid on government mass surveillance programs, revealing, in unprecedented detail, quite how deep the rabbit hole goes thanks to the spread of commercial software and connectivity enabling a bottomless intelligence-gathering philosophy of ‘bag it all’.

Yet technology’s onward march has hardly broken its stride.

Government spying practices are perhaps more scrutinized, as a result of awkward questions about out-of-date legal oversight regimes. Though whether the resulting legislative updates, putting an official stamp of approval on bulk and/or warrantless collection as a state spying tool, have put Snowden’s ethical concerns to bed seems doubtful — albeit, it depends on who you ask.

The UK’s post-Snowden Investigatory Powers Act continues to face legal challenges. And the government has been forced by the courts to unpick some of the powers it helped itself to vis-à-vis people’s data. But bulk collection, as an official modus operandi, has been both avowed and embraced by the state.

In the US, too, lawmakers elected to push aside controversy over a legal loophole that provides intelligence agencies with a means for the warrantless surveillance of American citizens — re-stamping Section 702 of FISA for another six years. So of course they haven’t cared a fig for non-US citizens’ privacy either.

Increasingly powerful state surveillance is seemingly here to stay, with or without adequately robust oversight. And commercial use of strong encryption remains under attack from governments.

But there’s another end to the surveillance telescope. As I wrote five years ago, those who watch us can expect to be — and indeed are being — increasingly closely watched themselves as the lens gets turned on them:

“Just as our digital interactions and online behaviour can be tracked, parsed and analysed for problematic patterns, pertinent keywords and suspicious connections, so too can the behaviour of governments. Technology is a double-edged sword – which means it’s also capable of lifting the lid on the machinery of power-holding institutions like never before.”

We’re now seeing some of the impacts of this surveillance technology cutting both ways.

With attention to detail, good connections (in all senses) and the application of digital forensics all sorts of discrete data dots can be linked — enabling official narratives to be interrogated and unpicked with technology-fuelled speed.

Witness, for example, how quickly the Kremlin’s official line on the Skripal poisonings unravelled.

After the UK released CCTV of two Russian suspects of the Novichok attack in Salisbury, last month, the speedy counter-claim from Russia, presented most obviously via an ‘interview’ with the two ‘citizens’ conducted by state mouthpiece broadcaster RT, was that the men were just tourists with a special interest in the cultural heritage of the small English town.

Nothing to see here, claimed the Russian state, even though the two unlikely tourists didn’t appear to have done much actual sightseeing on their flying visit to the UK during the tail end of a British winter (unless you count vicarious viewing of Salisbury’s wikipedia page).

But digital forensics outfit Bellingcat, partnering with investigative journalists at The Insider Russia, quickly found plenty to dig up online, and with the help of data-providing tips. (We can only speculate who those whistleblowers might be.)

Their investigation made use of a leaked database of Russian passport documents; passport scans provided by sources; publicly available online videos and selfies of the suspects; and even visual computing expertise to academically cross-match photos taken 15 years apart — to, within a few weeks, credibly unmask the ‘tourists’ as two decorated GRU agents: Anatoliy Chepiga and Dr Alexander Yevgeniyevich Mishkin.

When public opinion is faced with an official narrative already lacking credibility that’s soon set against external investigation able to closely show workings and sources (where possible), and thus demonstrate how reasonably constructed and plausible is the counter narrative, there’s little doubt where the real authority is being shown to lie.

And who the real liars are.

That the Kremlin lies is hardly news, of course. But when its lies are so painstakingly and publicly unpicked, and its veneer of untruth ripped away, there is undoubtedly reputational damage to the authority of Vladimir Putin.

The sheer depth and availability of data in the digital era supports faster-than-ever evidence-based debunking of official fictions, threatening to erode rogue regimes built on lies by pulling away the curtain that invests their leaders with power in the first place — by implying the scope and range of their capacity and competency is unknowable, and letting other players on the world stage accept such a ‘leader’ at face value.

The truth about power is often far more stupid and sordid than the fiction. So a powerful abuser, with their workings revealed, can be reduced to their baser parts — and shown for the thuggish and brutal operator they really are, as well as proved a liar.

On the stupidity front, in another recent and impressive bit of cross-referencing, Bellingcat was able to turn passport data pertaining to another four GRU agents — whose identities had been made public by Dutch and UK intelligence agencies (after they had been caught trying to hack into the network of the Organisation for the Prohibition of Chemical Weapons) — into a long list of 305 suggestively linked individuals also affiliated with the same GRU military unit, and whose personal data had been sitting in a publicly available automobile registration database… Oops.

There’s no doubt certain governments have wised up to the power of public data and are actively releasing key info into the public domain where it can be poured over by journalists and interested citizen investigators — be that CCTV imagery of suspects or actual passport scans of known agents.

A cynic might call this selective leaking. But while the choice of what to release may well be self-serving, the veracity of the data itself is far harder to dispute. Exactly because it can be cross-referenced with so many other publicly available sources and so made to speak for itself.

Right now, we’re in the midst of another fast-unfolding example of surveillance apparatus and public data standing in the way of dubious state claims — in the case of the disappearance of Washington Post journalist Jamal Khashoggi, who went into the Saudi consulate in Istanbul on October 2 for a pre-arranged appointment to collect papers for his wedding and never came out.

Saudi authorities first tried to claim Khashoggi left the consulate the same day, though did not provide any evidence to back up their claim. And CCTV clearly showed him going in.

Yesterday they finally admitted he was dead — but are now trying to claim he died quarrelling in a fistfight, attempting to spin another after-the-fact narrative to cover up and blame-shift the targeted slaying of a journalist who had written critically about the Saudi regime.

Since Khashoggi went missing, CCTV and publicly available data has also been pulled and compared to identify a group of Saudi men who flew into Istanbul just prior to his appointment at the consulate; were caught on camera outside it; and left Turkey immediately after he had vanished.

Including naming a leading Saudi forensics doctor, Dr Salah Muhammed al-Tubaigy, as being among the party that Turkish government sources also told journalists had been carrying a bone saw in their luggage.

Men in the group have also been linked to Saudi crown prince Mohammed bin Salman, via cross-referencing travel records and social media data.

“In a 2017 video published by the Saudi-owned Al Ekhbariya on YouTube, a man wearing a uniform name tag bearing the same name can be seen standing next to the crown prince. A user with the same name on the Saudi app Menom3ay is listed as a member of the royal guard,” writes the Guardian, joining the dots on another suspected henchman.

A marked element of the Khashoggi case has been the explicit descriptions of his fate leaked to journalists by Turkish government sources, who have said they have recordings of his interrogation, torture and killing inside the building — presumably via bugs either installed in the consulate itself or via intercepts placed on devices held by the individuals inside.

This surveillance material has reportedly been shared with US officials, where it must be shaping the geopolitical response — making it harder for President Trump to do what he really wants to do, and stick like glue to a regional US ally with which he has his own personal financial ties, because the arms of that state have been recorded in the literal act of cutting off the fingers and head of a critical journalist, and then sawing up and disposing of the rest of his body.

Attempts by the Saudis to construct a plausible narrative to explain what happened to Khashoggi when he stepped over its consulate threshold to pick up papers for his forthcoming wedding have failed in the face of all the contrary data.

Meanwhile, the search for a body goes on.

And attempts by the Saudis to shift blame for the heinous act away from the crown prince himself are also being discredited by the weight of data…

And while it remains to be seen what sanctions, if any, the Saudis will face from Trump’s conflicted administration, the crown prince is already being hit where it hurts by the global business community withdrawing in horror from the prospect of being tainted by bloody association.

The idea that a company as reputation-sensitive as Apple would be just fine investing billions more alongside the Saudi regime, in SoftBank’s massive Vision Fund vehicle, seems unlikely, to say the least.

Thanks to technology’s surveillance creep the world has been given a close-up view of how horrifyingly brutal the Saudi regime can be — and through the lens of an individual it can empathize with and understand.

Safe to say, supporting second acts for regimes that cut off fingers and sever heads isn’t something any CEO would want to become famous for.

The power of technology to erode privacy is clearer than ever. Down to the very teeth of the bone saw. But what’s also increasingly clear is that powerful and at times terrible capability can be turned around to debase power itself — when authorities themselves become abusers.

So the flip-side of the surveillance state can be seen in the public airing of the bloody colors of abusive regimes.

Turns out, microscopic details can make all the difference to geopolitics.

RIP Jamal Khashoggi


Source: Tech Crunch

In State Tectonics, an explosive ending for the future of democracy

An omnipotent data infrastructure and knowledge-sharing tech organization has spread across the planet. Global conspiracies to disseminate propaganda and rig elections are ever present. Algorithms determine what people see as objective truth, and terrorist organizations gird to bring down the monopoly on information.

Malka Older faces a problem few speculative science fiction authors face in their lifetimes: having their work become a blueprint for reality. The author, who began formulating her Centenal Cycle series just a few years ago, now finds that her plots have leapt off the page and have become the daily fodder for cable news programs and Congressional investigations. Her universe is set decades into the future, but history is accelerating, and decades into the future can now mean 2019.

So we arrive at the third and final volume of a trilogy that began as a single work called Infomocracy and has proliferated into Null States and now State Tectonics. Ending a trilogy is rarely easy, but State Tectonics does what Older has always done best with her works, smashing together ideas about the future of politics with a medley of thriller styles to deliver an ample helping of thought-provoking nuance.

Older’s world is built on two simple premises. First, through a project called microdemocracy, the world has been subdivided into 100,000 person governing units known as centenals, and every citizen in the world has the right of migration to choose the government they want. This creates strange artifacts — for instance, in dense areas like New York City, citizens can change governments from a corporate-backed libertarian paradise to a leftist environmental oasis in as quick as a subway stop.

Second, to ensure that citizens can make the best choices for themselves, a global organization called Information (a hybrid Google, United Nations, and BBC) tirelessly works to provide objective information to citizens about politics and the world, verifying claims about everything from election promises to the taste of items on a restaurant menu.

Together, they allow Older to explore a world of information manipulation and electoral strategy while meditating on the meaning of objective truth. Across the trilogy, we follow a crew of Information staffers as they uncover political plots and intrigue around a series of global elections. This structure allows Older to create paced thrillers without losing the intellectual spirit of speculative fiction.

While in her last work Null States, the focus was on inequality and lack of access to information, in State Tectonics, Older interrogates the meaning of Information’s monopoly on … information itself. In this microdemocratic world, it is a crime to provide unverified information to people, and yet, Information hardly has infinite knowledge about the world. A shadowy group starts to purvey local information about cities and people outside the normal Information channels, and that raises profound questions — who ultimately “owns” reality? How do we decide what objective truth even is?

In the background of this central question is a trial for an Information staffer accused of the crime of algorithmic bias, of adjusting reality to suit her own ends. Sound familiar?

As a work of speculative fiction — particularly about a subject as complex as the future of democracy — State Tectonics is superlative. Older is striking in her frenetic ability to weave together idea after idea into vignettes that caused this reader to constantly stop and wander in thought. In just this book, we have discussions on the future of politics, mental health, infrastructure finance, transportation, food, nationalism, and identity politics. The dynamic range here is exhilarating.

Unfortunately, that enormous range forces Older to sacrifice depth, not only in the sophistication of some of these topics, which are often only conceived in slight brushstrokes, but also in the characters themselves. After three reasonably hefty books, I still don’t feel as if I truly know the characters I’ve spent so much time with. They are like friends in a transient city such as New York City, people to hang out with on weekends, but not worth a followup once they move on.

More pejoratively, the book feels constantly weighed down by extraneous details that at times can feel more like Wikipedia than assiduous worldbuilding. In this regard, Older has actually matured as a writer from her earlier works, as the detailed digressions are fewer and far between, but they remain as distracting from her core plot, and take time away from the needed work of fleshing out her characters further.

State Tectonics, like its earlier siblings, is the best and worst of fusion cuisine: the brilliant items on the menu can inspire us to think radically beyond our traditional categories and beliefs, but the vast majority of the dishes end up being mishmashes that are ultimately ephemeral and forgotten. The novel is brilliant in discoursing on the future of democracy, and if that is a topic of keen interest, few books will satisfy that urge like this one will.


Source: Tech Crunch

Convene uses landlord partnership model to outclass WeWork

Recent reports that Softbank may take a majority stake in WeWork has added fuel to the already hot market for start-ups in the workspace and property tech sectors. One of the more compelling companies that stands to benefit from this trend is New York-based Convene. Started by co-founders Ryan Simonetti (CEO) and Chris Kelly (President), 500-person strong Convene has distinguished itself as a top-tier provider of meeting, event and flexible workspace offerings in its 21 locations. But unlike freelance-heavy WeWork and other co-working companies who cater to 1-10 person companies, Convene puts owners of Class A office buildings at the center of its business model. The goal is to help these landlords provide tenants with the high-end of amenities of, say a unicorn tech startup.

On the back of the company’s recent $152 million Series D, Simonetti and Kelly were eager to discuss new initiatives including a co-branded turnkey workplace and amenity solution and their plans to launch additional Convene locations, including London. They also elaborate on how they plan to benefit during the next recession and open up on their differences with category giant WeWork. Finally, they explain why paintings by renowned artists including Picasso and Calder are tucked into corners of the company’s first, soon-to-be-opened members club at Rockefeller Center.

Gregg Schoenberg: Ryan and Chris. It’s great to see you both. To kick things off, I want to establish that Convene is not a typical startup in that you’ve been around for about nine years.

Ryan Simonetti: Yes, is that called being washed-up in the start-up world?

GS: Not necessarily. Tell me about where the idea for Convene came from?

RS: Chris and I met during our freshman year orientation at Villanova University, ended-up pledging the same fraternity and spent a lot of time getting to know each other. From the beginning, we were probably two of the more entrepreneurial guys at Villanova. We sold used textbooks, spring break trips, parties into Philadelphia. If there was a way to monetize something in college, we were the two guys that were trying do it.

GS: Two scrappy guys from Villanova.

RS: Yes, we’ve always joked that we were probably the only kids at Villanova who didn’t have our parents’ credit cards.

GS: So years later, what was that catalyzing moment where you said, “Okay, here’s the idea for Convene”?

Chris Kelly: I remember two phone calls from Ryan that represent the earliest seeds of Convene. The first phone call was in the middle of the financial collapse, and in that phone call, Ryan said, “We’re about to witness the largest shift of wealth that the world has ever seen and we have to figure out how to be on the winning end of that.” Then a few weeks later, Ryan called me up and introduced the crazy idea for Convene.

GS: And what was that specific pitch?

CS: He walked me through the Grand Hyatt in Midtown Manhattan and said, “Look at the way these guys are doing business. This is a $60 million a year catering and meetings operation that was in essence being outsourced to hotels.”

“Just like Airbnb would tell you that their primary stakeholder is the homeowner, or OpenTable would tell you the primary stakeholder is a restaurateur, we view the building owner as our primary stakeholder.”

GS: And you’re saying hotels weren’t doing a great job?

CS: Hotels simply didn’t have the sensibility about what people really need in a business environment. They treated a shareholder meeting like a wedding with a projector. And we saw a huge opportunity to create spaces that met enterprise workplace requirements.

GS: So fast forward to today and tell me exactly what Convene is, because I think sometimes people struggle and just say, “Well you’re a WeWork competitor on the premium end.”

RS: We partner with Class A building owners to design places where people can meet, work and be inspired. It’s not any more complicated than that.

CS: To build on that, you could say that we’re essentially allowing landlords to offer Googleplex-style workplace experiences.

RS: That’s a big challenge for even large organizations. Look at Google, Facebook or JP Morgan. These companies can deliver an amazing experience at their corporate headquarters location. But in their smaller offices, it’s really tough to deliver a corporate HQ experience if you only have five, ten, or 15,000 square feet. You can’t build the kitchen infrastructure, or the gym, or all of those other things. So to Chris’s point, we’re democratizing access to that experience, and doing it with the landlord as the key partner.

GS: So the landlords are the core client?

RS: Just like Airbnb would tell you that their primary stakeholder is the homeowner, or OpenTable would tell you the primary stakeholder is a restaurateur, we view the building owner as our primary stakeholder. And what we’re helping them do is respond to the changing demands of today’s tenant, who want increased flexibility and better agility to adapt to change.

GS: I take it marrying technology infrastructure to the physical spaces is key to that, which is why you recently bought Beco. What exactly do they do?

RS: Beco is a workplace analytics platform that’s using sensor-based technology to help us, our landlord partners and our corporate clients better understand the way that people are actually interacting with space and services.

“But what really differentiates us strategically is that we’re not trying to build our own supply chain or our own inventories.”

GS: As you contemplated that acquisition, were you worried that it might be perceived to some of your traditional clients as Big Brothery?

RS: Look, everyone today is concerned about data privacy, and rightfully so. The way that the technology actually operates is that the actual users are anonymous to us.

GS: So is that data anonymous, or anonymous anonymous?

RS: Anonymous anonymous, meaning all we’re capturing is a random ID assigned to a phone, and that ties back to the sensor and data analytics platform.

GS: Do you have to opt in?

RS: It’s all opt in.

GS: Okay, I want to turn to the big gorilla in the broader flexible workspace category, because right or wrong, everyone, including Convene, gets compared to WeWork.

RS:Look, if we think about the macro trends that are shaping and changing not just the way that we work, but also the way that we live and travel, I would argue that WeWork and us have a similar view of the world and the future. But from a business model perspective, the quality of the product that we’ve built, the level of service that we deliver, the strategic nature of our partnerships with building owners, I don’t view us as directly competitive.

GS: I appreciate that WeWork ultimately caters to smaller sized end-users than Convene, so in that way you’re different. But it’s also true that even though Red Bull and Coca Cola are different drinks, you’re not going to drink a Coke and a Red Bull at the same time.

RS: From an analogy perspective, there’s a difference between Planet Fitness and Equinox, right? Would you argue that they’re competitive? Maybe. But the way I think about office real estate is Class C, Class B, Class A. Convene is a Class A partner to landlords.

GS: Right, but WeWork, with all that current and possibly future cash from Softbank, is moving upmarket.

RS: Sure, as they move more into enterprise and upmarket, of course, they’ll be competitive. But what really differentiates us strategically is that we’re not trying to build our own supply chain or our own inventories. We’re partnering with the existing supply chain to create a new category of supply that speaks to the collective demand from our customer demographic.

GS: As a service provider, I get that. But what happens when the next recession comes —

RS: — Yes, by the way, we’re excited for the next one.

GS: Because the knock on WeWork and other companies in the broader sector is that when the recession hits, the blood will hit the fan because of those short-term tenant leases.

RS: Well, right now, you see a lot of capital flowing into the sector and you have platforms that probably shouldn’t be here as well.

GS: Let’s take Brookfield. WeWork has a relationship with Brookfield. You guys have a relationship with Brookfield. But I think the difference is this: if bad things happen in the economy, they have to hope that WeWork is going to effectively manage those short-term lease obligations. From my outsider’s perspective, that looks to me like a counterparty relationship. But in Convene’s case, it looks more like an aligned partnership. After all, Brookfield, as well as Durst and RXR, are on your cap table.

RS: Every deal structure is aligned and even the leases we have are aligned. And when the recession hits, we will use it as an opportunity to deepen our landlord partnerships and take market share.

GS: With whose balance sheet?

RS: We’re using the landlord’s balance sheet to grow our business.

CS: And WeWork is using the Softbank balance sheet to grow their business.

GS: Could you elaborate?

RS: WeWork did us the greatest favor in the world, because our strategy since day one has been to make the landlord a key partner and stakeholder. Do you want to know who has the cheapest cost of capital? Cheaper than Softbank’s? It’s the landlord’s balance sheet. Their cost of equity capital is like six to eight percent.

GS: Really?

RS: Yes. If you think about the investor-anticipated yield in asset classes, real estate sits between a fixed income expectation and an equity capital markets expectation.

GS: Okay, but how does using the landlord’s balance sheet enhance your approach strategically?

CS: Because there are elements of the way we structure our deals that allow our performance to be variable. And by using the landlord’s balance sheet to grow our business, it aligns us and the landlord to be able to ride through a recession together.

“Do you want to know who has the cheapest cost of capital? Cheaper than Softbank’s? It’s the landlord’s balance sheet.”

GS: Have many of the nation’s Class A landlords have bought into your model?

RS: If you look at our current partners that we’re actively working with, I think they globally control over 250 million square feet of Class A office space. So if 10% of that moves to flexible consumption, that means Convene could have an addressable market of 25 million square feet of inventory.

GS: So given the way you’re talking, would it be fair to say that your landlord partners have recognized that the flexible workspace trend is here for the long-term?

CS: How we consume real estate is undergoing a fundamental shift. This is the same conversation that was happening in the transportation industry 15 years ago. It’s the same thing that was happening in the travel industry when Airbnb was starting. That same conversation is happening today within the existing supply chain. So, yes, It’s a buy, build, partner decision that is being made in every landlord’s office around the country today.

GS: It still sounds odd to hear the phrase, “consume real estate.” Maybe I’m old-school, but you guys are down to earth. Do you find that language odd?

CS: Actually, what we’re seeing is the consumerization of real estate. Real estate was historically very B2B, very financially driven. Today, it’s being driven by human experience, So yes, brands matter, the customer experience matters. And that consumerization of real estate actually is happening.

GS: I take it that’s why you launched this new managed workplace solution that features the services you bring, but enables a client to use its own name?

CS: What makes that platform unique is that it’s co-branded. It’s an endorsed brand model by Convene, which means that the Convene brand standards, the Convene operating model, the Convene staffing model and the Convene university training program comes with it.

GS: So Intel inside?

CK: Yes, which gives clients the best of both worlds. It gives them the brand and reach and expertise of Convene. At the same time, they can now have something that feels more authentic and unique to them as a landlord.

GS: I want to shift to the future of work, which is something you both have spoken about in pretty bold terms. We’re at this amazing Convene members club, which sort of feels like a SoHo House except we’re in midtown. And you’ve talked about how an experiential personal life will be closer to a work life. Where is all this going?

RS: From a trend perspective, we believe fundamentally in what we call work/life integration. It used to be that you go to work and at the end of the day that stops and then you move to the rest of your life. That’s not really the way it works anymore. And when we think about some of the services that we’ve launched over the last couple years, it’s been with that idea in mind.

GS: Are you creating future offerings in-house or partnering?

RS: Actually, we’re about to announce a partnership on the wellness side, where we’re taking some of the wellness elements and starting to incorporate them into the broader Convene ecosystem.

GS: Do either of you guys have children?

RS: Yes, we both do.

GS: Because if you want to talk about quality of life and the war for talent, it seems like a natural extension to see if your plan to help the workforce addresses the challenges of working while raising young kids. Are such extensions on your whiteboard?

RS: Yes, they’re definitely on the whiteboard and some of those things are already in process. The difference is partnership. When I think about the way that we’re building our platform and the way that WeWork is building theirs, I think about us as being an open-source platform, Do you think you need to do everything yourself because you’re the best in the world at everything, or do you want to work with best-in-class partners?

GS: So for something like childcare, you’d bring in a partner?

RS: If we decide, which I’m not saying we are, to get into childcare, we’re going to do that with a proven partner that has a track record of delivering that experience and doing it really well.

GS: How does Convene fare in a world where remote work becomes an even bigger trend?

CS: Actually, there’s a difference between remote work and mobility. Remote work is the traditional concept of working from home, and we’re actually seeing some backlash now of companies who are really trying to drive culture, and want more face-to-face interaction.

GS: Does that show up in the design of your spaces?

CK: Yes, the built environments of our offices are changing from looking like cubicle farms where everybody reports to their desk and their computer to operating a lot more like a digitally-enabled campus. And the decoupling of people and their work from their desk is opening up an opportunity to build what’s called an activity-based workplace, where there are different types of spaces that are specialized and built for specific uses.

GS: You guys don’t even have offices, right?

CK: Right. None of us have offices.

RS: Also, people used to talk about remote work in magical terms. They’d say, I’m not going to need an office. We don’t believe that this is the case. We think that there a few things that will continue to matter to organizations. One is brand, two is culture, three is collaboration. And until technology can somehow magically replicate that experience, we think that the best ideas will come from face-to-face interaction.

GS: I have two important last topics to cover. First-off, why on earth, nestled into a semi-remote corner of this club, do you have a Picasso painting hanging on the wall? Because in my experience, usually people like to show off the Picasso if they have one.

RS: Ha, well, the Picasso, as well as all of the other amazing art that you’ve seen at Club 75, is part of the partnership here with the landlord.

GS: Well, it speaks to the confidence they have in you.

RS: Yes, but it also speaks to the experience we’re creating. We think about space as the body language of an organization. Space has the ability to move people and we think that art is a big part of that.

CK: It also demonstrates the extent to which landlords are committed to delivering a great experience.

RS: Right. Having a coffee next to a Calder or a Picasso can put you in a totally different headspace.

“There’s no amount of money in the world that can buy you a partnership with Brookfield or a half a dozen landlords that we’ll be powering next year.”

GS: Well, I’m glad you didn’t use shareholder money to buy these works, which brings me to my last topic. At this point, are you concerned about profitability?

CS: Yes, we are and that’s another one of the differences between us and others. In fact, we’ve been cashflow positive since Day one. And as an organization, profitability has always been something that we think is very important.

GS: It’s because you don’t have enough VCs on your cap table. Speaking of which, you’re obviously aware of the fact that Softbank and other megafunds may helicopter drop a lot more money into this space, which could change the competitive dynamics.

RS: First of all, the last time I checked, we were the second most capitalized platform in the category, by dollars raised. And if you look at our partnership-driven approach, where the landlord’s balance sheet is funding a lot of our growth, the actual capital that’s being invested in the platform is multiples of the $260 million we’ve raised.

But to your point, our concern isn’t so much about the capital that’s flooding in, There’s no amount of money in the world that can buy you a partnership with Brookfield or a half a dozen landlords that we’ll be powering next year. And money, whether its from Softbank or anyone else, can’t give an organization its corporate culture. And I think one of the reasons we’ve been selected as the partner to some of the most discerning customers in the world is because of the fact that everyday, we deliver consistently against a premium experience.

GS: Well, on that note, Chris and Ryan, I’d like to thank you for your kind hospitality.

RS: It’s been our pleasure and thank you.


Source: Tech Crunch

Domio just raised $12 million in Series A funding to build “apart hotels” across the U.S.

Hotels can be pricey, and and travelers are often forced to leave their rooms for basic things, like food that doesn’t come from the minibar. Yet Airbnb accommodations, which have become the go-to alternative for travelers, can be highly inconsistent.

Domio, a two-year-old, New York-based outfit, thinks there’s a third way: apartment hotels, or “apart hotels,” as the company is calling them.

The idea is to build a brand that travelers recognize as upscale yet affordable, more tech friendly than boutique hotels, and features plenty of square footage, which it expects will appeal to both families as well as companies that send teams of employees to cities and want to do it more economically.

Domio has a host of competitors, if you’ll forgive the pun. Marriott International earlier this year introduced a branded home-sharing business called Tribute Portfolio Homes wherein it says it vets, outfits and maintains homes of its choosing to hotel standards. And Marriott is among a growing number of hotels to recognize that customers who stay in a hotel for a business trip or a family vacation might prefer a multi-bedroom apartment with hotel-like amenities.

Property management companies have been raising funding left and right for the same reason. Among them: Sonder, a four-year-old, San Francisco-based startup offering “spaces built for travel and life” that, according to Crunchbase, has raised $135 million from investors, much of it this year; TurnKey, a six-year-old, Austin, Tex.-based home rental management company that has raised $72 million from investors, including via a Series D round that closed back in March; and Vacasa, a nine-year-old, Portland, Ore.-based vacation rental management company that manages more than 10,000 properties and which just this week closed on $64 million in fresh financing that brings its total funding to $207.5 million.

That’s saying nothing of Airbnb itself, which has begun opening hotel-like branded apartment complexes that lease units to both long-term renters and short-term visitors in partnership with development partner Niido.

Whether Domio can stand out from competitors remains to be seen, but investors are happy to provide give it the financing to try. The company is today announcing that it has raised $12 million in Series A equity funding led by Tribeca Venture Partners, with participation from SoftBank Capital NY and Loric Ventures. The round comes on the heels of Domio announcing a $50 million joint venture last month with the private equity firm Upper 90 to exclusively fund the leasing and operations of as many as 25 apartment-style hotels for group travelers.

Indeed, Domio thinks one advantage it may have over other home-share companies is that rather than manage the far-flung properties of different owners, it can shave costs and improve the quality of its offerings by entering five- to 10-year leases with developers and then branding, furnishing and operating entire “apart hotel” properties. (It even has partners in China making its furniture.)

As CEO and former real estate banker Jay Roberts told us earlier this week, the plan is to open up 25 of these buildings across the U.S. over the next couple of years. The units will average 1,500 square feet and feature three bedrooms and if all goes as planned, they’ll cost 10 to 25 percent below hotel prices, too.

And if the go-go property management market turns? Roberts insists that Domio can “slow down growth if necessary.” He also notes that “Airbnb was founded out of the recession, supported by people who were interested in saving money. We’re starting to see companies that want to be more cost-effective, too.”

Domio had earlier raised $5 million in equity and convertible debt from angel investors in the real estate industry; altogether it has now amassed funding of $67 million.


Source: Tech Crunch