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Amazon Fire TV tops 34 million users, potentially widening its lead over Roku

Posted by on May 15, 2019 in Amazon, Amazon Fire TV, cord cutting, fire tv, Hardware, Media, roku, streaming, Streaming Media, streaming media players | 0 comments

Amazon Fire TV’s lead over rival streaming platform Roku is widening. In January at the Consumer Electronics Show in Las Vegas, Amazon said it had “well over” 30 million Fire TV users compared with Roku’s then 27 million active users. In roughly four months’ time, Fire TV has grown to more than 34 million active users, according to new statements made by Amazon this week. Meanwhile, Roku grew its account base by 2 million in the first quarter of 2019, to reach 29.1 million active accounts, per its earnings report this month.

The new figures for Amazon Fire TV were shared yesterday by Fire TV GM and global head of Marketing, Growth & Engagement, Jen Prenner, at the Pay TV Show during a panel titled “The Battle for Your Living Room: Sticks, Boxes, and Smart TV Platforms.”

Amazon also claims that Fire TV has grown to become the No. 1 streaming media player platform in the U.S., U.K., Germany, India and Japan, thanks to its strong sales momentum.

When Amazon first announced its user number at CES, there was some question as to how those figures were calculated. Roku typically defines an “active” account as one that has streamed through its platform over the past 30 days. Amazon, at the time, had only spoken about users more generally, without characterizing them as “actives.”

However, yesterday’s comments referenced “active users,” Amazon says, not just a total number of users.

Roku notes that its active account figures may include a family with multiple people (i.e. several “users”) — something it wants to note because of how the newly reported growth figures make it look. And until Amazon chooses to define how it determines an active user, it’s not possible to fully understand how to compare the two. Update: However, Fire TV devices today are registered to one person’s Amazon user’s account information. Once set up, it’s certainly possible for multiple people to watch the same Fire TV device. And if they’re not switching profiles, then Amazon — like Roku — wouldn’t have a way to track individual user data either.

Update, 5/15/19 3:45 PM: Amazon confirmed it measures “users” the exact same way Roku measures “accounts.”

Roku dominated U.S. streaming player market share last year, but Fire TV has likely gained ground internationally. Today, the Fire TV ships worldwide to a wide range of countries, all of which can use the device to stream Prime Video content. Roku, meanwhile, ships to a couple dozen countries, including the U.S., Canada, the U.K., France and parts of Latin America. However, Roku last year had to stop sales in Mexico until it addressed issues involving access to pirated content, which were only resolved in October.

Fire TV also benefits from Amazon’s frequent and steep discounts on its hardware devices — including those over the holiday shopping period, where Fire TV Stick became a best seller. It’s been known to sell devices at cost or below, in an effort to gain market share. Plus, today’s consumers may be drawn to Fire TV because of its built-in access to Alexa — something that makes it one of the cheapest ways to get the popular voice assistant into the home.

Amazon is focused this year on expanding access to content and Alexa voice controls on Fire TV. On the content front, it recently came to an agreement with Google that allows it to finally bring YouTube to Fire TV, and following that, YouTube TV and YouTube Kids. It also has plans to support both Disney+ and Apple TV+ later this year, the company says.


Source: The Tech Crunch

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Madrona Venture Labs raises $11M to build companies from the ground up

Posted by on May 15, 2019 in alpha, Amazon, Artificial Intelligence, blake irving, eBay, economy, entrepreneurship, erik blachford, Facebook, Finance, GoDaddy, madrona venture group, Microsoft, money, Private Equity, Seattle, spencer rascoff, Startup company, TC, Trinity Ventures, Venture Capital, venture capital Firms, venture capital funds, Zillow | 0 comments

In regions where would-be entrepreneurs need a little more support and encouragement before they’ll quit their day job, the startup studio model is taking off.

In Seattle, Madrona Venture Labs (MVL), a studio founded within one the city’s oldest and most-celebrated venture capital firms, Madrona Venture Group, has raised $11.3 million. The investment brings the studio’s total funding to $20 million.

Traditional venture capital funds invite founders to pitch their business idea to a line-up of partners. Sometimes that’s a founder with an idea looking for seed capital, other times it’s a more mature company looking to scale. When it comes to startup studios, the partners themselves craft startup ideas internally, recruiting entrepreneurs to lead the projects, then building them from the ground up within their own safe, protective walls. After a project passes the studio’s litmus test, i.e. shows proof of traction, product-market fit and more, it’s spun out with funding from Madrona and other VCs within its large and growing investor network.

For aspiring entrepreneurs deterred by the risk factors inherent to building venture-backed startups, it’s a highly desirable route. In the Pacific Northwest, where MVL focuses its efforts, it’s a chance to lure Microsoft and Amazon employees into the world of entrepreneurship.

“We want to be an onboard for founders in our market,” MVL managing director Mike Fridgen, who previously led the eBay-acquired business Decide.com, tells TechCrunch. “In Seattle, everyone isn’t a co-founder or an angel investor. Not everyone has been at a startup. A lot of people coming here are coming to work at Amazon, Microsoft or one of the larger satellite offices like Facebook. We want to help them fast-track learning, fundraising and everything else that comes with launching a successful company.”

Fridgen, MVL managing director Ben Elowitz, who co-founded the online jewelry marketplace Blue Nile and chief technology officer Jay Bartot, the co-founder of Hulu-acquired Vhoto, lead Madrona’s studio effort.

The investment in MVL comes in part from its parent company, Madrona, and for the first time, outside investors have acquired stakes in the practice. Alpha Edison, West River Group, Founder’s Co-op partner Rudy Gadre, Zillow co-founder Spencer Rascoff, former GoDaddy CEO Blake Irving, Trinity Ventures venture partner Gus Tai, TCV venture partner Erik Blachford and others participated.

With $1.6 billion in assets under management, Madrona is known for investments in Seattle bigwigs like Smartsheet, Rover and Redfin. The firm, which recently closed on another $100 million for an acceleration fund that will expand its geographic reach beyond the Pacific Northwest, launched its startup studio in 2014. Since then, it’s spun-out seven companies with an aggregate valuation of $140 million.

“There are some 85 VCs that have $300 million-plus funds,” Fridgen said. “In Seattle, we have two of the most valuable companies in the world and we have just one [big fund], Madrona; it’s the center of gravity for Seattle technology innovation.”

Companies created within MVL include Spruce Up, an AI-powered personal shopping platform, and Domicile, a luxury apartment rental service geared toward business travelers. Domicile was co-founded by Ross Saario, who spent the three years ahead of launching the startup as a general manager at Amazon. The company recently raised a $5 million round, while Spruce Up, co-founded by serial founder Mia Lewin, closed a $3 million round in May.

Other spin-outs include MightyAI, which was valued at $71 million in 2017; Nordstrom-acquired MessageYes, Chatitive and Rep the Squad. The latter, a jersey rental business, was a failure, shutting down in 2018 after failing to land necessary investment, according to GeekWire.

MVL’s latest fundraise will be used to invest in operations. Though MVL does provide its spin-outs with some capital, between $100,000 to $200,000 Fridgen said, it takes a back seat when it comes time to raise outside capital and doesn’t serve as the lead investor in deals.


Source: The Tech Crunch

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Amazon’s one-two punch: How traditional retailers can fight back

Posted by on Apr 18, 2019 in 6 River Systems, Amazon, Artificial Intelligence, Column, E-Commerce, eCommerce, getvu, IBM, jeff bezos, Kiva Systems, locus robotics, magazino, merchandising, online retail, online shopping, physical retail, Retail, retailers, siemens, TC, whole foods | 0 comments

If you think physical retail is dead, you couldn’t be more wrong. Despite the explosion in e-commerce, we’re still buying plenty of stuff in offline stores. In 2017, U.S. retail sales totaled $3.49 trillion, of which only 13 percent (about $435 billion) were e-commerce sales. True, e-commerce is growing at a much faster annual pace. But we’re still very far from the tipping point.

Amazon, the e-commerce giant, is playing an even longer game than everyone thinks. The company already dominates online retail — Amazon accounted for almost 50 percent of all U.S. e-commerce dollars spent in 2018. But now Amazon is eyeing the much bigger prize: modernizing and dominating retail sales in physical locations, mainly through the use of sophisticated data analysis. The recent reports of Amazon launching its own chain of grocery stores in several U.S. cities — separate from its recent Whole Foods acquisition — is just one example of how this could play out.

You can think of this as the Amazon one-two punch: The company’s vast power in e-commerce is only the initial, quick jab to an opponent’s face. Data-focused innovations in offline retail will be Amazon’s second, much heavier cross. Traditional retailers too focused on the jab aren’t seeing the cross coming. But we think canny retailers can fight back — and avoid getting KO’d. Here’s how.

The e-commerce jab starts with warehousing

Physical storage of goods has long been crucial to advances in commerce. Innovations here range from Henry Ford’s conveyor belt assembly line in 1910, to IBM’s universal product code (the “barcode”) in the early 1970s, to J.C. Penney’s implementation of the first warehouse management system in 1975. Intelligrated (Honeywell), Dematic (KION), Unitronics, Siemens and others further optimized and modernized the traditional warehouse. But then came Amazon.

After expanding from books to a multi-product offering, Amazon Prime launched in 2005. Then, the company’s operational focus turned to enabling scalable two-day shipping. With hundreds of millions of product SKUs, the challenge was how to get your pocket 3-layer suture pad (to cite a super-specific product Amazon now sells) from the back of the warehouse and into the shippers’ hands as quickly as possible.

Make no mistake: Amazon’s one-two retail punch will be formidable.

Amazon met this challenge at a time when automated warehouses still had massive physical footprints and capital-intensive costs. Amazon bought Kiva Systems in 2012, which ushered in the era of Autonomous Guided Vehicles (AGVs), or robots that quickly ferried products from the warehouse’s depths to static human packers.

Since the Kiva acquisition, retailers have scrambled to adopt technology to match Amazon’s warehouse efficiencies.  These technologies range from warehouse management software (made by LogFire, acquired by Oracle; other companies here include Fishbowl and Temando) to warehouse robotics (Locus Robotics, 6 River Systems, Magazino). Some of these companies’ technologies even incorporate wearables (e.g. ProGlove, GetVu) for warehouse workers. We’ve also seen more general-purpose projects in this area, such as Google Robotics. The main adopters of these new technologies are those companies that feel Amazon’s burn most harshly, namely operators of fulfillment centers serving e-commerce.

The schematic below gives a broad picture of their operations and a partial list of warehouse/inventory management technologies they can adopt:

It’s impossible to say what optimizations Amazon will bring to warehousing beyond these, but that may be less important to predict than retailers realize.

The cross: Modernizing the physical retail environment

Amazon has made several recent forays into offline shopping. These range from Amazon Books (physical book stores), Amazon Go (fast retail where consumers skip the cashier entirely) and Amazon 4-Star (stores featuring only products ranked four-stars or higher). Amazon Live is even bringing brick-and-mortar-style shopping streaming to your phone with a home-shopping concept à la QVC. Perhaps most prominently, Amazon’s 2017 purchase of Whole Foods gave the company an entrée into grocery shopping and a nationwide chain of physical stores.

Most retail-watchers have dismissed these projects as dabbling, or — in the case of Whole Foods — focused too narrowly on a particular vertical. But we think they’re missing Bezos’ longer-term strategic aim. Watch that cross: Amazon is mastering how physical retail works today, so it can do offline what it already does incredibly well online, which is harness data to help retailers sell much more intelligently. Amazon recognizes certain products lend themselves better to offline shopping — groceries and children’s clothing are just a few examples.

How can traditional retailers fight back? Get more proactive.

Those shopping experiences are unlikely to disappear. But traditional retailers (and Amazon offline) can understand much, much more about the data points between shopping and purchase. Which path did shoppers take through the store? Which products did they touch and which did they put into a cart? Which items did they try on, and which products did they abandon? Did they ask for different sizes? How does product location within the store influence consumers’ willingness to buy? What product correlations can inform timely marketing offers — for instance, if women often buy hats and sunglasses together in springtime, can a well-timed coupon prompt an additional purchase? Amazon already knows answers to most of these questions online. They want to bring that same intelligence to offline retail.

Obviously, customer privacy will be a crucial concern in this brave new future. But customers have come to expect online data-tracking and now often welcome the more informed recommendations and the convenience this data can bring. Why couldn’t a similar mindset-shift happen in offline retail?

How can retailers fight back?

Make no mistake: Amazon’s one-two retail punch will be formidable. But remember how important the element of surprise is. Too many venture capitalists underestimate physical retail’s importance and pooh-pooh startups focused on this sector. That’s extremely short-sighted.

Does the fact that Amazon is developing computer vision for Amazon Go mean that alternative self-checkout companies (e.g. Trigo, AiFi) are at a disadvantage? I’d argue that this validation is actually an accelerant as traditional retail struggles to keep up.

How can traditional retailers fight back? Get more proactive. Don’t wait for Amazon to show you what the next best-practice in retail should be. There’s plenty of exciting technology you can adopt today to beat Jeff Bezos to the punch. Take Relex, a Finnish startup using AI and machine learning to help brick-and-mortar and e-commerce companies make better forecasts of how products will sell. Or companies like Memomi or Mirow that are creating solutions for a more immersive and interactive offline shopping experience.

Amazon’s one-two punch strategy seems to be working. Traditional retailers are largely blinded by the behemoth’s warehousing innovations, just as they are about to be hit with an in-store innovation blow. New technologies are emerging to help traditional retail rally. The only question is whether they’ll implement the solutions fast enough to stay relevant.


Source: The Tech Crunch

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Get ready for a new era of personalized entertainment

Posted by on Apr 13, 2019 in Amazon, Artificial Intelligence, Column, computing, Content, Facebook, machine learning, Marketing, Multimedia, personalization, smart devices, Spotify, Streaming Media, streaming services, Twitter, virtual reality, world wide web | 0 comments

New machine learning technologies, user interfaces and automated content creation techniques are going to expand the personalization of storytelling beyond algorithmically generated news feeds and content recommendation.

The next wave will be software-generated narratives that are tailored to the tastes and sentiments of a consumer.

Concretely, it means that your digital footprint, personal preferences and context unlock alternative features in the content itself, be it a news article, live video or a hit series on your streaming service.

The title contains different experiences for different people.

From smart recommendations to smarter content

When you use Youtube, Facebook, Google, Amazon, Twitter, Netflix or Spotify, algorithms select what gets recommended to you. The current mainstream services and their user interfaces and recommendation engines have been optimized to serve you content you might be interested in.

Your data, other people’s data, content-related data and machine learning methods are used to match people and content, thus improving the relevance of content recommendations and efficiency of content distribution.

However, so far the content experience itself has mostly been similar to everyone. If the same news article, live video or TV series episode gets recommended to you and me, we both read and watch the same thing, experiencing the same content.

That’s about to change. Soon we’ll be seeing new forms of smart content, in which user interface, machine learning technologies and content itself are combined in a seamless manner to create a personalized content experience.

What is smart content?

Smart content means that content experience itself is affected by who is seeing, watching, reading or listening to content. The content itself changes based on who you are.

We are already seeing the first forerunners in this space. TikTok’s whole content experience is driven by very short videos, audiovisual content sequences if you will, ordered and woven together by algorithms. Every user sees a different, personalized, “whole” based on her viewing history and user profile.

At the same time, Netflix has recently started testing new forms of interactive content (TV series episodes, e.g. Black Mirror: Bandersnatch) in which user’s own choices affect directly the content experience, including dialogue and storyline. And more is on its way. With Love, Death & Robots series, Netflix is experimenting with episode order within a series, serving the episodes in different order for different users.

Some earlier predecessors of interactive audio-visual content include sports event streaming, in which the user can decide which particular stream she follows and how she interacts with the live content, for example rewinding the stream and spotting the key moments based on her own interest.

Simultaneously, we’re seeing how machine learning technologies can be used to create photo-like images of imaginary people, creatures and places. Current systems can recreate and alter entire videos, for example by changing the style, scenery, lighting, environment or central character’s face. Additionally, AI solutions are able to generate music in different genres.

Now, imagine, that TikTok’s individual short videos would be automatically personalized by the effects chosen by an AI system, and thus the whole video would be customized for you. Or that the choices in the Netflix’s interactive content affecting the plot twists, dialogue and even soundtrack, were made automatically by algorithms based on your profile.

Personalized smart content is coming to news as well. Automated systems, using today’s state-of-the-art NLP technologies, can generate long pieces of concise, comprehensible and even inventive textual content at scale. At present, media houses use automated content creation systems, or “robot journalists”, to create news material varying from complete articles to audio-visual clips and visualizations. Through content atomization (breaking content into small modular chunks of information) and machine learning, content production can be increased massively to support smart content creation.

Say that a news article you read or listen to is about a specific political topic that is unfamiliar to you. When comparing the same article with your friend, your version of the story might use different concepts and offer a different angle than your friend’s who’s really deep into politics. A beginner’s smart content news experience would differ from the experience of a topic enthusiast.

Content itself will become a software-like fluid and personalized experience, where your digital footprint and preferences affect not just how the content is recommended and served to you, but what the content actually contains.

Automated storytelling?

How is it possible to create smart content that contains different experiences for different people?

Content needs to be thought and treated as an iterative and configurable process rather than a ready-made static whole that is finished when it has been published in the distribution pipeline.

Importantly, the core building blocks of the content experience change: smart content consists of atomized modular elements that can be modified, updated, remixed, replaced, omitted and activated based on varying rules. In addition, content modules that have been made in the past, can be reused if applicable. Content is designed and developed more like a software.

Currently a significant amount of human effort and computing resources are used to prepare content for machine-powered content distribution and recommendation systems, varying from smart news apps to on-demand streaming services. With smart content, the content creation and its preparation for publication and distribution channels wouldn’t be separate processes. Instead, metadata and other invisible features that describe and define the content are an integral part of the content creation process from the very beginning.

Turning Donald Glover into Jay Gatsby

With smart content, the narrative or image itself becomes an integral part of an iterative feedback loop, in which the user’s actions, emotions and other signals as well as the visible and invisible features of the content itself affect the whole content consumption cycle from the content creation and recommendation to the content experience. With smart content features, a news article or a movie activates different elements of the content for different people.

It’s very likely that smart content for entertainment purposes will have different features and functions than news media content. Moreover, people expect frictionless and effortless content experience and thus smart content experience differs from games. Smart content doesn’t necessarily require direct actions from the user. If the person wants, the content personalization happens proactively and automatically, without explicit user interaction.

Creating smart content requires both human curation and machine intelligence. Humans focus on things that require creativity and deep analysis while AI systems generate, assemble and iterate the content that becomes dynamic and adaptive just like software.

Sustainable smart content

Smart content has different configurations and representations for different users, user interfaces, devices, languages and environments. The same piece of content contains elements that can be accessed through voice user interface or presented in augmented reality applications. Or the whole content expands into a fully immersive virtual reality experience.

In the same way as with the personalized user interfaces and smart devices, smart content can be used for good and bad. It can be used to enlighten and empower, as well as to trick and mislead. Thus it’s critical, that human-centered approach and sustainable values are built in the very core of smart content creation. Personalization needs to be transparent and the user needs to be able to choose if she wants the content to be personalized or not. And of course, not all content will be smart in the same way, if at all.

If used in a sustainable manner, smart content can break filter bubbles and echo chambers as it can be used to make a wide variety of information more accessible for diverse audiences. Through personalization, challenging topics can be presented to people according to their abilities and preferences, regardless of their background or level of education. For example a beginner’s version of vaccination content or digital media literacy article uses gamification elements, and the more experienced user gets directly a thorough fact-packed account of the recent developments and research results.

Smart content is also aligned with the efforts against today’s information operations such as fake news and its different forms such as “deep fakes” (http://www.niemanlab.org/2018/11/how-the-wall-street-journal-is-preparing-its-journalists-to-detect-deepfakes). If the content is like software, a legit software runs on your devices and interfaces without a problem. On the other hand, even the machine-generated realistic-looking but suspicious content, like deep fake, can be detected and filtered out based on its signature and other machine readable qualities.


Smart content is the ultimate combination of user experience design, AI technologies and storytelling.

News media should be among the first to start experimenting with smart content. When the intelligent content starts eating the world, one should be creating ones own intelligent content.

The first players that master the smart content, will be among tomorrow’s reigning digital giants. And that’s one of the main reasons why today’s tech titans are going seriously into the content game. Smart content is coming.


Source: The Tech Crunch

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Amazon Prime members get a free year of Nintendo Switch Online through Twitch Prime

Posted by on Mar 28, 2019 in Amazon, Gaming, Nintendo, nintendo switch, nintendo switch online, twitch | 0 comments

You may have forgotten about Twitch Prime, but the company is adding an interesting new perk for Nintendo Switch owners. The company is giving out up to one year of Nintendo Switch Online, the subscription service that lets you play online multiplayer games and access NES games.

If you’re an Amazon Prime or Prime Video subscriber, you automatically become a Twitch Prime member once you link your accounts together — Amazon owns Twitch. Twitch Prime gives you access to free loot, such as in-game skins for Apex Legends or Call of Duty Black Ops 4, as well as free (mostly indie) games.

As part of Twitch Prime, you can also subscribe to a Twitch channel for free — the streamer still gets compensated. Twitch Prime also gives your more options to customize your chat experience.

Nintendo and Twitch are partnering to offer a complimentary Nintendo Switch Online subscription — it usually costs $20. But you won’t get 12 months at once. You can go to this website to redeem three months right now.

In two months, you’ll be able to redeem another nine months. Twitch and Nintendo probably hope that you’ll forget about the second part of the perk, so don’t forget to set up a reminder.

The offer expires on September 24, 2019 for the initial three months, and on January 22, 2020 for the additional nine months. The good news is that it also works if you’re already a Nintendo Switch Online subscriber. You’ll just get additional subscription time.


Source: The Tech Crunch

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Boundless gets $7.8M to help immigrants navigate the convoluted green card process

Posted by on Mar 28, 2019 in Amazon, Boundless, Brad Feld, foundation capital, Foursquare, funding, Government, Pioneer Square Labs, San Francisco, Startups, TC, United States, Venture Capital, Warby Parker | 0 comments

Two years ago, former Amazon product manager Xiao Wang stood on the stage at TechCrunch Disrupt San Francisco and made the case for a platform meant to help couples apply for marriage green cards, a complex process made worse by bureaucracy and red tape.

Called Boundless, the startup had spun out of Seattle startup studio Pioneer Square Labs and raised a $3.5 million seed round. Now, Foundry Group’s Brad Feld has led a $7.8 million Series A in the startup, with participation from existing investors Trilogy Equity Partners, PSL, Two Sigma Ventures and Founders’ Co-Op.

“Families have really only had two choices, they could spend weeks or months trying to figure this out on their own, or they can spend thousands and thousands of dollars on an immigration attorney,” Wang, Boundless co-founder and chief executive officer, told TechCrunch. “What we are trying to do is basically give everyone access to the information, the tools and the support that was previously only available to those that could afford high-priced attorneys.”

Boundless charges $750 for its online green card application support services, which includes ensuring families correctly complete applications and have access to an immigration lawyer to review those applications. The fee comes at a major discount to the costs of an immigration lawyer and streamlines a process that can be delayed months when errors are made. The startup also offers a recently launched $395 naturalization product meant to assist eligible green card holders with their U.S. citizenship applications.

Wang founded Boundless in 2017 after helping build Amazon Go, the e-commerce giant’s line of cashierless convenience stores. Wang is an immigrant, having relocated to the U.S. from China when he was a child.

“We spent almost five months of rent money on an immigration attorney because the stakes were so high and we only had one shot,” Wang said. “We wanted to make sure we were doing it right. This is a story that is echoed by millions of families every year; this is such an important part of them starting a new life in a new country.”

Wang, after three years at Amazon, realized he could use his technology background and data prowess to build an information platform supportive of these millions of families.

“This is exactly what tech and data is meant to do,” he said. “I believe there is a moral obligation for tech to be used in meaningfully improving people’s lives.”

Boundless plans to use this investment to expand its team and product offerings, as well as build out its content library, which Wang said is rapidly becoming the go-to place for immigrants navigating the legal labyrinth that is the U.S. green card and citizenship process. Its resources page, which includes straightforward guides, a number of forms and more, counts 300,000 unique visitors per month.

“We hold their hand through the entire process,” Wang said. “We want to be the single source of information and tools for all family-based immigration.”

Wang and his team also hope to shine a brighter light on immigration policy. In late 2018, as part of its effort to be louder advocates for immigrants, Boundless, alongside Warby Parker, Foursquare, Foundation Capital and more, published an open letter to the U.S. Department of Homeland Security opposing its proposed “public charge” immigration regulation, which would allow for non-citizens who are in the country legally to be denied a visa or a green card if they have a medical condition, financial liabilities and other disqualifiers.

“The stakes for making sure your application is correct have never been higher; the government has far more leeway to be able to deny applications,” Wang said. “While we can’t speed up the government processing times, we can make meaningful improvements to helping families gather all the materials they need to send in the right information.”


Source: The Tech Crunch

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Unicorns aren’t profitable, and Wall Street doesn’t care

Posted by on Mar 26, 2019 in Amazon, Exit, Facebook, Fundings & Exits, Groupon, jeff bezos, Lyft, Pinterest, Snap, snap inc, Startups, TC, Uber, unicorns, Venture Capital, WeWork, Zimride | 0 comments

In Silicon Valley, investors don’t expect their portfolio companies to be profitable. “Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies,” a bible for founders, instead calls for heavy spending on growth to scale in an Amazon -like fashion.

As for Wall Street, it’s shown an affinity for stock in Jeff Bezos’ business, despite the many years it spent navigating a path to profitability, as well as other money-losing endeavors. Why? Because it too is far less concerned with profitability than market opportunity.

Lyft, a ride-hailing company expected to go public this week, is not profitable. It posted losses of $911 million in 2018, a statistic that will make it the biggest loser amongst U.S. startups to have gone public, according to data collected by The Wall Street Journal. On the other hand, Lyft’s $2.2 billion in 2018 revenue places it atop the list of largest annual revenues for a pre-IPO business, trailing behind only Facebook and Google in that category.

Wall Street, in short, is betting on Lyft’s revenue growth, assuming it will narrow its loses and reach profitability… eventually.

Wall Street’s hungry for unicorns

Lyft, losses notwithstanding, is growing rapidly and Wall Street is paying attention. On the second day of its road show, reports emerged that its IPO was already oversubscribed. As a result, Lyft is said to have upped the cost of its stock, with new plans to raise more than $2 billion at a valuation upwards of $25 billion. That represents a revenue multiple of more than 11x, a step up multiple of more than 1.6x from its most recent private valuation of $15.1 billion and, of course, Wall Street’s insatiable desire for unicorns, profitable or not.

New data from PitchBook exploring the performance of billion-dollar-plus VC exits confirms Wall Street’s leniency toward unprofitable tech companies. Sixty-four percent of the 100+ companies valued at more than $1 billion to complete a VC-backed IPO since 2010 were unprofitable, and in 2018, money-losing startups actually fared better on the stock exchange than money-earning businesses. Moreover, U.S. tech companies that had raised more than $20 million traded up nearly 25 percent of 2018, while the S&P 500 technology sector posted flat returns.

Wall Street is still adapting to the rapid growth of the tech industry; public markets investors, therefore, are willing to deal with negative to minimal cash flows for, well, a very long time.

A tolerance for outsized exits

There’s no doubt Lyft and its much larger competitor, Uber, will go public at monstrous valuations. The two IPOs, set to create a whole bunch of millionaires and return a number of venture capital funds, will provide Silicon Valley a lesson in Wall Street’s tolerance for outsized exits.

Much like a seed-stage investor must bet on a founder’s vision, Wall Street, given a choice of several unprofitable businesses, has to bet on potential market value. Fortunately, this strategy can work quite well. Take Floodgate, for example. The seed fund invested a small amount of capital in Lyft when it was still a quirky idea for ridesharing called Zimride. Now, it boasts shares worth more than $100 million. I’m sure early shareholders in Amazon — which went public as a money-losing company in 1997 — are pretty happy, too.

Ultimately, Wall Street’s appetite for unicorns like Lyft is a result of the shortage of VC-backed IPOs. In 2006, it was the norm for a company to make its stock market debut at 7.9 years old, per PitchBook. In 2018, companies waited until the ripe age of 10.9 years, causing a significant slowdown in big liquidity events and stock sales.

Fund sizes, however, have grown larger and the proliferation of unicorns continues at unforeseen rates. That may mean, eventually, an influx of publicly shared unicorn stock. If that’s the case, might Wall Street start asking more of these startups? At the very least, public market investors, please don’t be swayed by WeWork‘s eventual stock offering and its “community adjusted EBITDA.” Silicon Valley’s pixie dust can’t be that potent.


Source: The Tech Crunch

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Surging costs send shares of ecommerce challenger Pinduoduo down 17 percent

Posted by on Mar 14, 2019 in alibaba, alibaba group, Amazon, Asia, bytedance, China, e-book, E-Commerce, Earnings, eCommerce, online marketplaces, Qutoutiao, shanghai, supply chain, tiktok | 0 comments

China’s new tech force Pinduoduo is continuing its race to upend the ecommerce space, even at the expense of its finances. The three-year-old startup earmarked some big wins from the 2018 fiscal year, but losses were even greater, dragging its shares down 17 percent on Wednesday after the firm released its latest earnings results.

The Shanghai-based company is famous for offering cheap group deals and it’s able to keep prices down by sourcing directly from manufacturers and farmers, cutting out middleman costs. In 2018, the company saw its gross merchandise value, referring to total sales regardless of whether the items were actually sold, delivered or returned, jump 234 percent to 471.6 billion yuan ($68.6 billion). Fourth-quarter annual active buyers increased 71 percent to 418.5 million, during which monthly active users nearly doubled to 272.6 million.

These figures should have industry pioneers Alibaba and JD sweating. In the twelve months ended December 31, JD fell behind Pinduoduo with a smaller AAU base of 305 million. Alibaba still held a lead over its peers with 636 million AAUs, though its year-over-year growth was a milder 23 percent.

But Pinduoduo also saw heavy financial strain in the past year as it drifted away from becoming profitable. Operating loss soared to 10.8 billion ($1.57 billion), compared to just under 600 million yuan in the year-earlier period. Fourth-quarter operating loss widened a staggering 116 times to 2.64 billion yuan ($384 million), up from 22 million yuan a year ago.

Pinduoduo is presenting a stark contrast to consistently profitable Alibaba, which generates the bulk of its income from charging advertising fees on its marketplaces. This light-asset approach grants Alibaba wider profit margins than its arch-foe JD, which controls most of the supply chain like Amazon and makes money from direct sales. Pinduoduo seeks out a path similar to Alibaba’s and monetizes through marketing services, but its latest financial results showed that mounting costs have tempered a supposedly lucrative model.

Where did the ecommerce challenger spend its money? Pinduoduo’s total operating expenses from 2018 stood at 21 billion yuan ($3 billion), of which 13.4 billion yuan went to sales and marketing expenses such as TV commercials and discounts for users. Administration alongside research and development made up the remaining costs.

Pinduoduo’s spending spree recalls the path of another up-and-coming Chinese tech startup, Qutoutiao . Like Pinduoduo, Qutoutiao has embarked on a cash-intensive journey by burning billions of dollars to acquire users. The scheme worked, and Qutoutiao, which runs a popular news app and a growing e-book service, is effectively challenging ByteDance (TikTok’s parent company) in smaller Chinese cities where many veteran tech giants lack dominance.

Offering ultra-cheap items is a smart bet for Pinduoduo to lock in price-intensive consumers in unpenetrated, smaller cities, but it’s way too soon to know whether this kind of expensive growth will hold out long-term.


Source: The Tech Crunch

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Facebook won’t store data in countries with human rights violations — except Singapore

Posted by on Mar 13, 2019 in Amazon, Asia, Facebook, Government, human rights, Human Rights Watch, Privacy, Singapore | 0 comments

As soon as Mark Zuckerberg said in a lengthy 3,225-word blog post to not build data centers in countries with poor human rights, he had already broken his promise.

He chose to ignore Singapore, which the Facebook founder had only months earlier posted about, declaring the micro-state home to the company’s first data center in Asia to “serve everyone.”

Zuckerberg was clear: “As we build our infrastructure around the world, we’ve chosen not to build data centers in countries that have a track record of violating human rights like privacy or freedom of expression.”

If there are two things Singapore is known for, it’s that there’s no privacy nor freedom of expression.

For all its glitz and economic power, Singapore’s human rights record falls far below internationally recognized norms. The state, with a population of five million, consistently falls close to the bottom in worldwide rankings by rights groups for its oppressive laws against freedom of speech, expression and assembly and limited rights to privacy under its expanding surveillance system. Worse, the country is known for its horrendous treatment of those in the LGBTQ+ community, whose actions are heavily restricted and any public act or depiction is deemed criminal. And even the media are under close watch and often threatened with rebuke and defamation lawsuits by the government.

Reporters Without Borders said Singapore has an “intolerant government,” and Human Rights Watch called some of the country’s more restrictive laws “draconian.”

We brought these points up to Facebook, but the company doesn’t see Zuckerberg’s remarks as contradictory or hypocritical.

“Deciding where to locate a new data center is a multi-year process that considers dozens of different factors, including access to renewable energy, connectivity, and a strong local talent pool,” said Facebook spokesperson Jennifer Hakes. “An essential factor, however, is ensuring that we can protect any user data stored in the facility.”

“This was the key point that Mark Zuckerberg emphasized in his post last week,” said Hakes. “We looked at all these factors carefully in Singapore and determined that it was the right location for our first data center in Asia.”

It’s ironic that Facebook’s own platform has been a target for Singapore’s government to crack down on vocal opponents of the state. Jolovan Wham, an activist, was jailed after organizing a public assembly from a Facebook page. The assembly’s permit was denied, so he switched the venue to a Skype call.

When asked, Facebook declined to comment on what it considers unacceptable human rights by a country, only referring back to Zuckerberg’s post.

Singapore remains be an important hub for the tech industry and business — particularly for Western companies, which have thrown human rights to the wind even as they tout their commitment to privacy and free speech at home. Amazon, Microsoft, Google, DigitalOcean, Linode and OVH all have data centers in the micro-state.

But only one to date has made public commitments to not store data in countries with poor records on human rights.

Why has Facebook made an exception for Singapore? It’s a mystery to everyone but Mark Zuckerberg.


Source: The Tech Crunch

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Meet the 19 startups in AngelPad’s 12th batch

Posted by on Mar 13, 2019 in Accelerator, Adidas, Amazon, angelpad, Apple, Carine Magescas, caterpillar, citi, Cvent, DroneDeploy, law firms, mopub, New York City, Oscar, periscope data, Pipedrive, Postmates, Real Estate, sephora, Stanford University, Startups, Tesla, thomas korte, twitch, Twitter, Venture Capital, Zum | 0 comments

AngelPad just wrapped the 12th run of its months-long New York City startup accelerator. For the second time, the program didn’t culminate in a demo day; rather, the 19 participating startups were given pre-arranged one-on-one meetings with venture capital investors late last week.

AngelPad co-founders Thomas Korte and Carine Magescas did away with the demo day tradition last year after nearly a decade operating AngelPad, which is responsible for mentoring startups including Postmates, Twitter-acquired Mopub, Pipedrive, Periscope Data, Zum and DroneDeploy.

“Demo days are great ways for accelerators to expose a large number of companies to a lot of investors, but we don’t think it is the most productive way,” Korte told TechCrunch last year. Competing accelerator Y Combinator has purportedly considered their eliminating demo day as well, though sources close to YC deny this. The firm cut its investor day, a similar opportunity for investors to schedule meetings with individual startups, “after analyzing its effectiveness” last year.

Feedback to AngelPad’s choice to forego demo day has been positive, Korte tells TechCrunch, with startup CEOs breathing a sigh of relief they aren’t forced to pitch to a large crowd with no promise of investment.

AngelPad invests $120,000 in each of its companies. Here’s a closer look at its latest batch:

LotSpot is a parking management tool for universities, parks and malls. The company installs cameras at the entrances and exits of customer parking lots and autonomously tracks lot occupancy as cars enter and exit. The LotSpot founders are Stanford University Innovation Fellows with backgrounds in engineering and sales.

Twic is a discretionary benefits management platform that helps businesses offer wellness benefits at a lower cost. The tool assists human resources professionals in selecting vendors, monitoring benefits usage and managing reimbursements with a digital wallet. Twic customers include Twitch and Oscar. The company’s current ARR is $265,000.

Zeal is an enterprise contract automation platform that helps sales teams manage custom routine agreements, like NDAs, independently and efficiently. The startup is currently working on test implementations with Amazon, Citi and Cvent. The founders are attorneys and management consultants who previously led sales and legal strategy at AXIOM.

ChargingLedger works with energy grid operators to optimize electric grid usage with smart charging technology for electric vehicles. The company’s paid pilot program is launching this month.

Piio, focused on SEO, helps companies boost their web presence with technology that optimizes website speed and performance based on user behavior, location, device, platform and connection speed. Currently, Piio is working with JomaShop and e-commerce retailers. Its ARR is $90,000.

Duality.ai is a QA platform for autonomous vehicles. It leverages human testers and simulation environments to accelerate time-to-market for AV sidewalk, cars and trucks. Its founders include engineers and designers from Caterpillar, Pixar and Apple. Its two first beta customers generated an ARR of $100,000.

COMUNITYmade partners with local manufacturers to sell their own brand of premium sneakers made in Los Angeles. The company has attracted brands, including Adidas, for collaborations. The founders are alums of Asics and Toms.

Spacey is a millennial-focused art-buying platform. The company sells limited-edition collections of fine-art prints at affordable prices and offers offline membership experiences, as well as a program for brand ambassadors with large social followings.

LegalPassage saves lawyers time with business process automation software for law firms. The company focuses on litigation, specifically class action and personal injury. The founder is a litigation attorney, former adjunct professor of law at UC Hastings and a past chair of the Family Law Section of the Bar Association of San Francisco.

Revetize helps local businesses boost revenue by managing reputation, encouraging referrals and increasing repeat business. The startup, headquartered in Utah, has an ARR of $220,000.

House of gigs helps people find short-term work near them, offering “employee-like” services and benefits to those freelancers and gig workers. The startup has 90,000 members. The San Francisco and Berlin-based founders previously worked together at a VC-backed HR startup.

MetaRouter provides fast, flexible and secure data routing. The cloud-based on-prem platform has reached an ARR of $250,000, with customers like HomeDepot and Sephora already signed on.

RamenHero offers a meal kit service for authentic gourmet ramen

RamenHero offers a meal kit for authentic gourmet ramen. The startup launched in 2018 and has roughly 1,700 customers and $125,000 in revenue. The startup’s founder, a serial entrepreneur, graduated from a culinary ramen school in Japan.

ByteRyde is insurance for autonomous vehicles, specifically Tesla Model 3s, taking into account the safety feature of self-driving cars.

Foresite.ai provides commercial real estate investors a real-time platform for data analysis and visualization of location-based trends.

PieSlice is a blockchain-based equity issuance and management platform that helps create fully compliant digital tokens that represent equity in a company. The founder is a former trader and stockbroker turned professional poker player.

Aitivity is a security hardware company that is developing a scalable blockchain algorithm for enterprises, specifically for IoT usage.

SmartAlto, a SaaS platform with $190,000 ARR, nurtures real estate leads. The company pairs agents with digital assistants to help the agents show more homes.

FunnelFox works with sales teams to help them spend less time on customer research, pipeline management and reporting. The AI-enabled platform has reached an ARR of $75,000 with customers including Botify and Paddle.


Source: The Tech Crunch

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