“The Platform” is not a subtle movie.
That’s true of its approach to horror, with intense, bloody scenes that prompted plenty of screaming and pausing from your hosts at the Original Content podcast. It’s also true of its thematic material — right around the time one of the characters accuses another of being communist, you’ll slap yourself on the forehead and say, “Oh, it’s about capitalism.”
The new Netflix film takes place in a mysterious prison, with two prisoners on each level (they’re randomly rotated each month). Once each day, a platform laden with delicious food is lowered through the prison. If you’re on one of the top levels, you feast. If you’re further down, things are considerably more grim, and can become downright gruesome as the month wears on.
“The Platform” is a hard movie to sit through, and it has other faults, like an irritatingly mystical ending. But it’s certainly memorable, and even admirable in its dedication to fully exploring both the logistical and moral dimensions of its premise.
You can listen to our review in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)
And if you’d like to skip ahead, here’s how the episode breaks down:
0:27 “The Platform” review
17:29 “The Platform” spoilers
[Editor’s note: Want to get this free weekly recap of TechCrunch news that startups can use by email? Subscribe here.]
There are a few online productivity stocks booming, and a few popular remote-first product companies still announcing funding rounds amid a huge new wave of unicorn layoffs. But what about the previously white-hot software-as-a-service category overall?
Pullbacks in spending are expected in general, obviously, which means higher churn and slower growth for major SaaS companies. An informal peer survey put together by Gainsight CEO Nick Mehta indicates that many leading execs in the space expect churn to head to double digits in the near future, Alex Wilhelm learned while researching the topic this week for Extra Crunch.
But, the effects of so much of the world going remote could end up still being a bigger lift for many companies large and small. George Kurtz, CEO of publicly traded cybersecurity company Crowdstrike, expects global growth as mainstream businesses everywhere get serious about remote for the first time.
Meanwhile, fresh index data from Profitwell seems to already show a bit of a rebound in subscriptions following weeks of drops, which Alex digs into separately. It’s probably too soon to be hopeful, but anecdotally Extra Crunch’s own growth has gotten back to its previously strong footing in the last few weeks (thanks for the support, everyone).
He also caught up with Mary D’Onofrio, an investor with Bessemer Venture Partners about how to value a startup during a downturn. She also pointed out that many of the losses you’re seeing are relative. “We’re just reverting back to historical cloud software multiples. Historically if you look at the emerging cloud index basket, it’s traded at seven times forward [revenue]. Right now we’re trading at eight times forward [revenue].” At least for many companies in the space, things are still not so bad.
We’ve been writing a daily-ish series of articles about the state of startup investing in the face of COVID-19. First up, Danny Crichton breaks down “the denominator effect” on TechCrunch, where a limited partner is required through their own funding agreements to allocate a mix of equities beyond startups and rebalance based on the circumstances. When the other portions lose too much (such as, say, public stocks), LPs then have to pull back on the amount of money they can have in venture capital firms… thereby leaving those firms short of money for startups. Where is this going? “If the markets happen to rapidly recover, they might quickly reopen their investments in VC and other alternative assets,” Danny writes. “But if the markets stay sour for longer, then expect further downward gravitational pull on the VC asset class as portfolio managers reset their portfolios to where they need them. It’s the tyranny of fifth grade mathematics and a complex financial system.”
How can venture firms navigate this daunting terrain? Connie Loizos checks in for TechCrunch with Aydin Senkut of Felicis Ventures (“now is probably one of the toughest times” to get a firm launched), Charles Hudson of Precursor Ventures (find some family offices who are going to be less orthodox in general and potentially less affected) and Eva Ho of Fika Ventures (don’t get discouraged, but use the additional challenge to really reflect about this career choice).
Check out additional coverage over on Extra Crunch, including a quick survey of other investors about their approaches, an interview with a venture debt lender, and a look at the trends in funding going back to last year.
Why is TikTok able to dominate the charts in the face of giant competitors? As millions sit at home using the app, Josh Constine dives into why it is likely to continue beating incumbent consumer products from companies like Alphabet and Facebook (or consumer startups). It’s what he calls the “content network effect,” as he detailed on TechCrunch:
Facilitating remixes offers a way to lower the bar for producing user generated content. You’d don’t have to be astoundingly creative or original to make something entertaining. Each individual’s life experiences inform their perspective that could let them interpret an idea in a new way. What began with someone ripping audio of two people chanting “don’t be Suspicious, don’t be suspicious” while sneaking through a graveyard in TV show Parks and Recreation led to people lip syncing it while trying to escape their infant’s room without waking them up, leaving the house wearing clothes they stole from their sister’s closet, trying to keep a llama as a pet, and photoshopping themselves to look taller. Unless someone’s already done the work to record an audio clip, there’s nothing to inspire and enable others to put their spin on it.
Healthtech in the time of COVID-19
While most people reading this newsletter have probably been experiencing the worldwide remote-first switch, an equally momentous set of changes are sweeping health care as medical systems try to get a grip on the pandemic. We had just published a big survey of leading digital health investors in December, but now is the time for an update. We checked in with:
Here’s CRV’s Spohn, summing the situation up nicely: “COVID-19 is driving opportunities, notably the rapid adoption of telehealth/virtual care by clinicians and patients, clinical trials in the cloud, as well as renewed focus on rapid point-of-care diagnostics. With virtual care, we’re seeing a decade of acceleration happening in a matter of weeks. Up until this point, there has been high-activation energy to conduct a first “eVisit” because the alternative (in-person care) was so well-established and largely available.”
How are you holding up? Are you keeping up? And most importantly, are you hydrating yourself? There’s so much news lately that we’re all falling a bit behind, but, hey, that’s what Equity is for. So, Natasha, Danny, and Alex got together to go over a number of the biggest stories in the worlds of private companies.
A warning before we get into the list, however. We’re going to be covering layoffs for a while. Don’t read more into that beyond a note to this unfortunate situation. We try to talk about the most important news, not what brings delight or joy to our hearts (because if that was the case, we would be all over mega-rounds). That in mind, here’s this week’s rundown….
Under new guidance issued by the Small Business Administration it seems non-profits and faith-based groups can apply for the Paycheck Protection Program loans designed to keep small business afloat during the COVID-19 epidemic, but most venture-backed companies are still not covered.
Late Friday night, the Treasury Department updated its rules regarding the “affiliation” of private entities to include religious organizations but keep in place the same rules that would deny most startups from receiving loans.
(b) If you are a faith-based organization, *no affiliation rules apply to you,* because the SBA just said so. Out of nowhere. At like 10pm on a Friday night.
— Doug Rand (@doug_rand) April 4, 2020
The NVCA and other organizations had pushed Treasury Secretary Steve Mnuchin to clarify the rules regarding startups and their potential eligibility for loans last week. And House Republican leader Kevin McCarthy even told Axios that startups would be covered under the revised regulations.
2/ There are rumors that the PPP Loan program may still fix the Affiliate Rule next week. Until fixed, it's nearly impossible for most VC-backed startups to apply because it would require huge legal lift to amend all of the charters of these companies to change control provisions
— Mark Suster (@msuster) April 4, 2020
At its essence, the issue for startups seems to be centered on the board rights that venture investors have when they take an equity stake in a company. For startups with investors on the board of directors, the decision-making powers that those investors hold means the startup is affiliated with other companies that the partner’s venture firm has invested in — which could mean that they’re considered an entity with more than 500 employees.
“[If] there’s a startup that’s going gangbusters right now, they shouldn’t apply for a PPP loan,” wrote Doug Rand, the co-founder of Seattle-based startup Boundless Immigration, and a former Assistant Director for Entrepreneurship in the Office of Science and Technology Policy during the Obama administration, in a direct message. “But most startups are getting killed because, you know, the economy is mostly dead.”
The $2 trillion CARES Act passed by Congress and signed by President Trump was designed to help companies that are adversely affected by the economic fallout resulting from the COVID-19 outbreak in the US and their employees — whether those businesses are directly affected because their employees can’t leave home to do their jobs or indirectly, because demand for goods and services has flatlined.
While some tech startups have seen demand for their products actually rise during these quarantined days, many companies have watched as their businesses have gone from one to zero.
The sense frustration among investors across the country is palpable. As the Birmingham-based investor, Matt Hottle, wrote, “After 4 days of trying to help 7 small businesses navigate the SBA PPP program, the program went to shit on launch. I’m contemplating how many small businesses, counting on this money, are probably locked out. I feel like I/ we failed them.”
After 4 days of trying to help 7 small businesses navigate the @SBAgov PPP program, the program went to shit on launch. I’m contemplating how many small businesses, counting on this money, are probably locked out. I feel like I/ we failed them.
— Matt Hottle (@MattRedhawk) April 4, 2020
And although the rules around whether or not many startups are eligible remain unclear, it’s probably wise for companies to file an application, because, as the program is currently structured, the $349 billion in loans are going to be issued on a first-come, first-served basis, as Suster flagged in his tweets on the subject.
General Catalyst is advising its companies that are also backed by SBIC investors to apply for the loans, because that trumps any other rules regarding affiliation, according to an interview with Holly Maloney Burbeck, a managing director at the firm.
And there’s already concerns that the money could run out. In a tweet, the President announced that he would request more money from Congress “if the allocated money runs out.”
I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out. So far, way ahead of schedule. @BankofAmerica & community banks are rocking! @SBAgov @USTreasury
— Donald J. Trump (@realDonaldTrump) April 4, 2020
“Congress saw fit to allow Darden to get a forgivable small business loan—actually a taxpayer-funded grant—for like every Olive Garden in America. But Congress somehow neglected to provide comparable rescue measures for actual small businesses that have committed the sin of convincing investors that they have the potential to employ a huge number of people if they can only survive,” Rand wrote in a direct message. “The Trump administration has full authority to ride to the rescue, and they did… but only for large religious organizations.”
The COVID-19 pandemic rages on.
As cases in the United States skyrocket, one of the most foreboding possibilities of COVID-19’s rapid growth is the potential to overwhelm hospital capacity. Hospitals in cities like New York are already underwater, relying on hospital boats (“70,000 ton message[s] of hope and solidarity”) to keep them afloat, and on retired providers as well as prematurely graduated medical students to staff those beds.
In tandem, telehealth has rapidly evolved from a “nice to have” to a “need to have” for U.S. health systems.
This timing is prescient, as the technologies for telehealth have existed for several decades (at varying levels of sophistication) with modest uptake to-date. From 2005 to 2017, only one out of every 150 doctor visits and one in every 5,000-10,000 specialist visits were conducted via telemedicine.
A major catalyst to uptake was the federal government’s announcement two weeks ago that restrictions on the use of telehealth for Medicare would be temporarily lifted. That policy change included expanding coverage across specialties and settings; waiving co-payments; and loosening HIPAA privacy requirements (such as prohibiting ubiquitous teleconferencing technologies like Apple’s FaceTime).
Accordingly, telehealth—overnight(ish)—is finally mainstream.
At America’s largest health systems, adoption of telehealth has accelerated rapidly: at Massachusetts General Hospital, the weekly number of virtual appointments has multiplied 10-20 times in the past weeks, while at NYU Langone Health, staffing was increased fivefold to handle the rush of new appointments. Teladoc, the U.S.’s largest virtual-care provider, is now reporting over 100,000 appointments weekly.
The proliferation of telehealth via pioneering health systems has spawned unique use cases rarely seen before in the landscape of U.S. healthcare.
These use cases cut across numerous settings: emergent care, intensive care, triage, and monitoring, to name a few. Outside the hospital setting, domestic initiatives such as Houston’s Project Emergency Telehealth and Navigation (ETHAN) has provided a precedent for the use of telemedicine by paramedics and EMTs in first-response. These sorts of programs have actively been pioneered by startups such as RapidSOS in response to COVID-19.
At the gateway to the hospital (the emergency room), building on work by Jefferson Hospital in Philadelphia, health systems including Kaiser Permanente, Intermountain Health, and Providence Health have adopted programs for tele-intake to minimize contact between providers and patients under investigation (PUIs) for COVID-19.
Upon admission to the hospital, telehealth is being used for monitoring patient status while also ensuring the safety of health providers. Such technologies are proving exceptionally important given wide-scale shortages of personal protective equipment (PPE).
At Washington State’s Providence Regional Medical Center Everett (the site of the first COVID-19 case in America), programs for telemonitoring of ICU patients were built from the ground up in six weeks. Startups like EarlySense are combining multimodal sensors with audiovisual capabilities to enable remote detection and evaluation of clinical deterioration on non-intensive wards.
Following discharge from the emergency room or the inpatient units of the hospital, telescreening tools like TytoCare are enabling physicians to conduct exams and deliver care remotely that previously would have required in-person contact. In the case of discharge from the emergency room—given the volatile clinical course of COVID-19—methods for streamlined and regular check-ins are critical to monitor symptoms and guide the need for more intensive treatment.
Likewise, given recovery from the disease can potentially be tumultuous (especially after ICU care), these technologies are essential for mitigating what has been deemed the “post-hospital syndrome” and ensuring long-term health after discharge from inpatient care.
While the near-overnight expansion of telehealth in diverse forms is positive news, barriers remain to its widespread dissemination in this country. To move from the prototyping stage at the meccas of modern medicine to a widely useful tool across healthcare settings, telehealth must seek to solve what has been deemed the “last mile problem.”
The last mile refers to the non-technological, practical elements of local care delivery. As with telehealth, when these practical elements of care delivery are inadequately addressed, they inhibit providers from implementing new technologies for patients. In the case of telehealth, the last mile can be grouped into four domains: those related to (a) coverage and reimbursement (b) legal concerns (c) clinical care and (d) social challenges. The federal government’s policy change this month took major steps forward to resolve some legal concerns, including limitation of tort liability and allowing common teleconferencing platforms that may not be strictly HIPAA compliant.
However, considerable obstacles to the uptake of telehealth persist across the other three domains, especially for the 86.5% of Americans not on Medicare. To effectively combat COVID-19, telehealth must also reach these 281 million individuals in the under-resourced nooks and crannies of the U.S. As the virus becomes more pervasive across the country, rural health systems are depending heavily on these technologies to manage the imminent surge of cases.
In terms of coverage for patients, only 36 states mandated coverage of telehealth services in insurance plans as of April 2019. For those with mandatory coverage, out-of-pocket copays typically ranged $50-80 per appointment. Alternatively, certain plans waived copays, but only following an annual fee for premium services—premiums which may well rise going forward.
All of these costs will hinder the use of telehealth in non-Medicare patients amidst the present outbreak.
While in the past two weeks, some private insurers such as United Healthcare (covering 45 million Americans), Humana (39 million), and Aetna (13 million) waived copays on telehealth services, the privates covering the remaining hundreds of millions of Americans must follow quickly. States can help accelerate this by following the lead of Massachusetts, which last month required all insurers to cover telehealth.
In terms of reimbursement to providers, only 20% of states required payment parity for telehealth to ensure—if telehealth was covered at all—it is remunerated at rates approximating in-person visits for similar diagnoses. This disparity has made adoption of telehealth undesirable and/or untenable for health systems, since the reimbursement rates for telehealth average 20-50% lower than for comparable in-person service.
The challenges to adoption of telehealth are further heightened for independent practices, who must pay subscription fees to use standard telehealth platforms, but simultaneously experience revenue decreases of some 30% upon integrating telehealth. To make adoption of telehealth financially feasible for health systems and individual practices amidst the COVID-19 outbreak, states once again should follow Massachusetts in seizing the opportunity to enforce payment parity by private insurers.
Finally, in terms of clinical care, issues abound in the minutia of how and where telehealth can be performed. In terms of how telehealth is performed: while these services should integrate with the existing workflows of clinical practice, insurance rules currently hinder this. For example, e-visits and check-ups are only permitted for “existing” patients rather than for new patients presenting with mild symptoms or fleeting concerns, who may not require a full work-up (this is the case even under the recent CMS policy).
Moreover, asynchronous methods such as “store-and-forward” consultations and remote patient monitoring—exactly the sort of efficient and highly-scalable pathways integral to the flexible provision of care to the dispersed masses—are restricted in most states.
Additionally, where telehealth can be conducted is hamstrung by “origination site” policies banning these services in patient homes but for a select few conditions (such as stroke assessment and opiate rehabilitation). Such arbitrary, excessive regulations make the widespread utilization of telehealth unrealistic. Also, state-by-state licensing requirements prevent physicians from providing care across borders (for reasons rooted in nineteenth-century concerns of medical quality gaps between states).
To promote the care of COVID-19 patients in epicenter regions, states should follow the lead of New York and Florida to suspend out-of-state licensing bans, allow license transferability, or at least expedite licensing through “licensure compacts” in allied states.
Finally, in terms of social challenges, considerable access disparities exist between demographic groups. For example, according to the National Telecommunications and Information Administration’s 2018 survey, vulnerable populations such as the elderly were 21% less likely to have internet access and almost 50% less likely to conduct videocalls; the poor were 34% less likely to communicate with doctors online; and other demographic minorities (such as Hispanic ethnicity or lower educational attainment) were also less likely to have access to and/or use telehealth technologies.
Since these populations are more likely to face the sorts of comorbid conditions and social determinants of health that heighten mortality from COVID-19—and less likely to have levels of health literacy allowing them to reduce their risk of transmitting infectious diseases like coronavirus—inequalities in telehealth access bear important implications on the country’s ability to flatten the curve of COVID-19.
One of the single best interventions to augment access for these individuals is expanding the scope of practice of non-physician health providers. These providers have their wings clipped by arcane laws fiercely defended by state medical associations that require their “supervision” by physicians for most cases of patient care. This is despite analyses since the 1980s exhibiting the capability for non-physician healthcare providers (such as nurse practitioners and physician assistants) to provide services as high quality as those of physicians.
Liberating various allied health practitioners (including also registered nurses, pharmacists, dentists, paramedics, and social workers) to screen, diagnose, treat, and prescribe with increased autonomy would undergird telehealth’s capabilities as a “force multiplier” in the setting of COVID-19. They can also unleash the potential of startups such as The MAVEN Project which provide platforms for peer-to-peer consults between specialty and generalist health providers in emergency settings.
In geographically dispersed states such as California—where allied health providers are expected to provide half of all primary care appointments by 2030—these policies are especially vital. Bills designed to facilitate these programs like the California Assembly Bill 890 that remains stalled should be endorsed to protect patients across the state from the insidious diffusion of COVID-19.
In summary, the early responses by federal and state agencies to COVID-19 have made progress to promote the uptake of telehealth. However, as the virus expands its siege across the country, more comprehensive solutions are urgently needed to equip the creators, users, and beneficiaries of telehealth with the arsenal they desperately require to vanquish this invisible enemy. Accordingly, pen-and-paper may be the most important technologies for bolstering telehealth today. Letters to senators, in the near-term, may be the most potent ammunition we’ve got.
It’s no secret that adaptability has become a critical trait for knowledge workers. To stay on top of a rapidly evolving world, we must assess new situations, make intelligent decisions and implement them effectively.
A 2014 research report by Barclays indicated that 60% of employers say adaptability has become more important during the last decade, and BBC called adaptability the “X factor” for career success in an era of technological change.
But even the most intrepid executive, entrepreneur or freelancer would be forgiven for struggling to adapt to a global pandemic. The impact of coronavirus has been unrelenting: hospitals at capacity, students sent home, conference cancellations, sold out inventory, markets in free fall and cities under lockdown.
Not just start-ups. Every big company, every nonprofit, every government organization, and most people too
— Bob Sutton (@work_matters) March 16, 2020
This moment requires us to learn new skills, develop new habits and let go of old ways of working. In the book “Range,” there’s a chapter about “dropping familiar tools” that details how experienced professionals will overlearn specific behavior and then fail to adapt to a new circumstance. This mentality affected everyone from firefighters to aviation crews to NASA engineers, often with deadly results, and underscores how hard it can be to adapt to change.
To help us cultivate adaptability in this unprecedented moment, I sought answers in unexpected places. Here’s what I learned.
Adaptability is required first and foremost when circumstances change. It’s easy to get attached to certain outcomes, especially when they’ve been planned long in advance or have significant emotional weight.
Due to coronavirus, a couple I know is postponing their wedding originally set for April. Having tied the knot only a year ago myself, I can’t imagine how frustrating that must be for them. But it was the right decision; demanding that the show go on would have been dangerous for their families, friends and the public at large.
I recently spoke with my friend Belinda Ju, an executive coach with a longstanding meditation practice. Non-attachment is a core concept of Buddhism, the spiritual path she’s followed for many years, and I wanted her thoughts on how that idea might help us adapt to unforeseen circumstances.
“Attachment doesn’t work because certainty doesn’t work. You can’t predict the future,” she explained. Being attached to something means “seeing the world through a false lens. Nothing is fixed.” For Ju and her clients, non-attachment doesn’t mean giving up on goals — it means focusing on what you can control.
“You might have a fixed goal of needing to raise X million dollars to keep your team afloat,” she said. “But in the age of coronavirus, investors might be slower to respond. So what are the levers in your control? What are the options you have and the pros and cons to each one?”
Her points hit home for me. As a NYC-based startup founder, I was preparing to make several trips to the West Coast to raise the next round for my company, Midgame, a digital party host for gamers.
I like pitching in person, but that’s obviously not going to happen, so I need to embrace video calls as my new reality. By doing that, I can get to stocking up on coffee, cleaning up my work space and setting up a microphone so when I do pitch over video, I’m bringing my A game.
Another way to think about adaptability is that it’s the ability to improvise. In theater, improv performers can’t rely on prewritten lines, and have to react in real time to suggestions from the audience or the words and actions of their scene partners.
“ ‘Playing the scene you’re in’ is a principle from improv which means to be present to the situation you’re in.”
That’s what Mary Lemmer told me. As an entrepreneur and VC who spent a stint at The Second City improv theater in Chicago, Lemmer knows a thing or two about having to adapt. Today, she brings her insights to corporations through training and workshops.
She explained that as an improv performer, you may start a scene with a certain idea in mind of how it will go, but that can quickly change. “If you’re not present,” she said, “then you’re not actively listening and because there’s no script, you’ll miss details. That’s when scenes fall apart.”
When I was a PM at Etsy and we had a major launch, we’d get engineering, dev ops, product, marketing and customer support together in a room to talk through the final event sequencing. These weren’t always the most exciting meetings and it was easy to get distracted by email or chat. One time engineering announced a significant last-minute issue that almost slipped through the cracks. Luckily, someone piped up with a clarifying question and we were all able to work together to minimize the issue.
Lemmer argues that in improv, like in business, you can’t make assumptions about people or situations. “We see this a lot in board meetings. People start to assume ‘Sally’ will always be the proactive one or ‘Jim’ will always be the naysayer and tune out.”
This is kind of attitude is problematic in a stable environment, but downright dangerous in an unstable situation where new data and events can quickly open up a new set of challenges and opportunities.
Early on, some experts thought the coronavirus crisis would stabilize globally by April. In early February, S&P Global stated that in the “worst-case scenario,” the virus would be contained by late May. A month later, that prediction already looked wildly optimistic.
Experts are saying now that cases may peak in May or June, which means everyone should be hunkering down for eight or more weeks of social distancing and isolation. A COVID-19 vaccine just started human trials, but testing in large enough sample sizes to identify side effects and then ramping up large-scale production still might not be fully available for more than a year.
In other words, dealing with this virus is not a sprint, it’s a marathon. A marathon no one signed up for.
Someone who knows a lot about this topic is Jason Fitzgerald. A 2:39 marathoner, Fitzgerald now helps people run faster and healthier as an author and coach.
When we spoke over the phone, he pointed out that running, unlike say basketball or gymnastics, is a sport where “you have to voluntarily want to experience more and more discomfort.”
Fitzgerald calls this ability to endure “mental toughness,” and it’s a skill we all can build. For runners, it requires doing workouts that scare them, putting in mileage that’s higher than they have in the past and racing regularly. It’s also about accepting and even embracing the pain of running hard.
The same is true for adaptation. We can train ourselves to respond better to change (we’re all getting lots of practice right now!), but developing new habits and working in new ways is always uncomfortable. As decorated cyclist Greg LeMond once said, “it doesn’t get easier, you just get faster.”
We also have to recognize that we won’t get it right every time. “The more that we get comfortable with poor performances, the more we can learn from them,” Fitzgerald said, noting that he’s had his share of bad races, including failing to finish an ultramarathon in 2015. “Sometimes you dwell on a bad race for a couple days, but then you have to just forget about it and move on with your training.”
Many of us are reeling from more cancellations, suspensions and complete one-eighties in the last month than in the last five years. But we can’t let ourselves stay bogged down by our feelings of frustration or disappointment. We accept our new reality, learn what we can from it, and keep going.
It’s clear that the people who can let go of their past plans and embrace the new environment ahead will thrive. Already we’re seeing companies pivot from live events to online webinars, and remote-first workplaces becoming the new normal. Shares of Zoom have risen even as the stock market has taken a beating and I’m sure other winners will emerge in the coming weeks and months.
But adaptability doesn’t just matter for individuals or even companies, it matters for governments. For China, Taiwan and Hong Kong, thanks to aggressive testing and quarantining efforts, life is returning, somewhat, to normal. New cases are on the decline and there’s hope of life returning to normalcy in the near future. Countries that bungled their response to the disease progression, including Italy, Spain, the U.K. and the United States, are now facing increasingly dire consequences.
Whether you want to survive a global pandemic, reach the next phase in your career or be selected on a mission to Mars, it’s hard to overstate the importance of adaptability in getting there.
Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.
The app industry saw a record 204 billion downloads and $120 billion in consumer spending in 2019, according to App Annie’s “State of Mobile” annual report. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.
In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.
This week, we’re continuing our special coverage of how the COVID-19 outbreak is impacting apps and the wider mobile app industry — or rather, the boost many apps are receiving as a result. In fact, the first quarter saw consumer spending hit record levels in Q1 as everyone was staying indoors. But as some apps shoot up the charts, scrutiny over their practices increases. This week saw No. 1 app Zoom defending itself against a host of complaints over security issues, for example, while social video app Houseparty defended itself against a possible smear campaign. There’s also a new app from the Pinterest CEO for tracking the spread of COVID-19.
Also this week: more leaks about the new version of iOS, Apple bought Dark Sky, Niantic pivoted, TikTok moved up the charts and more.
Hours after security researchers at Citizen Lab reported that some Zoom calls were routed through China, the video conferencing platform has offered an apology and a partial explanation.
To recap, Zoom has faced a barrage of headlines this week over its security policies and privacy practices, as hundreds of millions forced to work from home during the coronavirus pandemic still need to communicate with each other.
The latest findings landed earlier today when Citizen Lab researchers said that some calls made in North America were routed through China — as were the encryption keys used to secure those calls. But as was noted this week, Zoom isn’t end-to-end encrypted at all, despite the company’s earlier claims, meaning that Zoom controls the encryption keys and can therefore access the contents of its customers’ calls. Zoom said in an earlier blog post that it has “implemented robust and validated internal controls to prevent unauthorized access to any content that users share during meetings.” The same can’t be said for Chinese authorities, however, which could demand Zoom turn over any encryption keys on its servers in China to facilitate decryption of the contents of encrypted calls.
Zoom now says that during its efforts to ramp up its server capacity to accommodate the massive influx of users over the past few weeks, it “mistakenly” allowed two of its Chinese datacenters to accept calls as a backup in the event of network congestion.
From Zoom’s CEO Eric Yuan:
During normal operations, Zoom clients attempt to connect to a series of primary datacenters in or near a user’s region, and if those multiple connection attempts fail due to network congestion or other issues, clients will reach out to two secondary datacenters off of a list of several secondary datacenters as a potential backup bridge to the Zoom platform. In all instances, Zoom clients are provided with a list of datacenters appropriate to their region. This system is critical to Zoom’s trademark reliability, particularly during times of massive internet stress.”
In other words, North American calls are supposed to stay in North America, just as European calls are supposed to stay in Europe. This is what Zoom calls its datacenter “geofencing.” But when traffic spikes, the network shifts traffic to the nearest datacenter with the most available capacity.
China, however, is supposed to be an exception, largely due to privacy concerns among Western companies. But China’s own laws and regulations mandate that companies operating on the mainland must keep citizens’ data within its borders.
Zoom said in February that “rapidly added capacity” to its Chinese regions to handle demand was also put on an international whitelist of backup datacenters, which meant non-Chinese users were in some cases connected to Chinese servers when datacenters in other regions were unavailable.
Zoom said this happened in “extremely limited circumstances.” When reached, a Zoom spokesperson did not quantify the number of users affected.
Zoom said that it has now reversed that incorrect whitelisting. The company also said users on the company’s dedicated government plan were not affected by the accidental rerouting.
But some questions remain. The blog post only briefly addresses its encryption design. Citizen Lab criticized the company for “rolling its own” encryption — otherwise known as building its own encryption scheme. Experts have long rejected efforts by companies to build their own encryption, because it doesn’t undergo the same scrutiny and peer review as the decades-old encryption standards we all use today.
Zoom said in its defense that it can “do better” on its encryption scheme, which it says covers a “large range of use cases.” Zoom also said it was consulting with outside experts, but when asked a spokesperson declined to name any.
Bill Marczak, one of the Citizen Lab researchers that authored today’s report, told TechCrunch he was “cautiously optimistic” about Zoom’s response.
“The bigger issue here is that Zoom has apparently written their own scheme for encrypting and securing calls,” he said, and that “there are Zoom servers in Beijing that have access to the meeting encryption keys.”
“If you’re a well-resourced entity, obtaining a copy of the Internet traffic containing some particularly high-value encrypted Zoom call is perhaps not that hard,” said Marcak.
“The huge shift to platforms like Zoom during the COVID-19 pandemic makes platforms like Zoom attractive targets for many different types of intelligence agencies, not just China,” he said. “Fortunately, the company has (so far) hit all the right notes in responding to this new wave of scrutiny from security researchers, and have committed themselves to make improvements in their app.”
Zoom’s blog post gets points for transparency. But the company is still facing pressure from New York’s attorney general and from two class-action lawsuits. Just today, several lawmakers demanded to know what it’s doing to protect users’ privacy.
Will Zoom’s mea culpas be enough?
Facebook’s WhatsApp is in the midst of a lawsuit against Israeli mobile surveillance outfit NSO Group. But before complaining about the company’s methods, Facebook seems to have wanted to use them for its own purposes, according to testimony from NSO founder Shalev Hulio.
Last year brought news of an exploit that could be used to install one of NSO’s spyware packages, Pegasus, on devices using WhatsApp. The latter sued the former over it, saying that over a hundred human rights activists, journalists and others were targeted using the method.
Last year also saw Facebook finally shut down Onavo, the VPN app it purchased in 2013 and developed into a backdoor method of collecting all manner of data about its users — but not as much as they’d have liked, according to Hulio. In a document filed with the court yesterday he states that Facebook in 2017 asked NSO Group for help collecting data on iOS devices resistant to the usual tricks:
In October 2017, NSO was approached by two Facebook representatives who asked to purchase the right to use certain capabilities of Pegasus, the same NSO software discussed in Plaintiffs’ Complaint.
The Facebook representatives stated that Facebook was concerned that its method for gathering user data through Onavo Protect was less effective on Apple devices than on Android devices. The Facebook representatives also stated that Facebook wanted to use purported capabilities of Pegasus to monitor users on Apple devices and were willing to pay for the ability to monitor Onavo Protect users. Facebook proposed to pay NSO a monthly fee for each Onavo Protect user.
NSO declined, as it claims to only provide its software to governments for law enforcement purposes. But there is a certain irony to Facebook wanting to employ against its users the very software it would later decry being employed against its users. (WhatsApp maintains some independence from its parent company but these events come well after the purchase by and organizational integration into Facebook.)
A Facebook representative did not dispute that representatives from the company approached NSO Group at the time, but said the testimony was an attempt to “distract from the facts” and contained “inaccurate representations about both their spyware and a discussion with people who work at Facebook.” We can presumably expect a fuller rebuttal in the company’s own filings soon.
Facebook and WhatsApp are, quite correctly, concerned that effective, secret intrusion methods like those developed and sold by NSO Group are dangerous in the wrong hands — as demonstrated by the targeting of activists and journalists, and potentially even Jeff Bezos. But however reasonable Facebook’s concerns are, the company’s status as the world’s most notorious collector and peddler of private information makes its righteous stance hard to take seriously.
The massive surge of COVID-19-related layoffs has put tech in a unique position. While the startup world is facing layoffs itself, it is also trying to help get people back to work.
Back at the end of 2019, the SoftBank-backed belt-tightening period led to a flurry of crowdsourced spreadsheets with employee names from companies like Oyo, WeWork, Zume and more. The spreadsheets popped up as a bet on the network effect, with the ultimate goal of hoping the sheets land in the hands of a recruiter looking to hire one of hundreds laid off. Now, as COVID-19 cripples the economy, layoffs have surged dramatically past that one period.
On one end, we’ve reported on numbers of tech companies cutting staff, from Oyo, to ZipRecruiter, to TripActions. But on the other, brighter end, we’ve also seen the rise of platforms to connect those laid off and pledges from employers to not fire any employees during this trying time.
In a world where people are laid off on Zoom, tech’s efforts to give community, and a course of action, to those laid off is undeniably important.
So many start-ups have done or are planning layoffs that at this point it would be easier to list the ones that *haven't* cut staff.
So here are some places trying to help laid off employees:
— erin griffith (@eringriffith) April 2, 2020
The current climate of the pandemic, and the massive unemployment that has resulted, means that a spreadsheet with a long list of employee names and unverified contact information doesn’t cut it.
Shannon Anderson, the director of talent at Madrona Venture Group in Seattle, saw her firm’s portfolio companies struggling with layoffs and the changing economy. Two of the portfolio companies, Textio and Rover, laid off staff, along with a number of other companies.
“We wanted to anticipate a reduction in force across the ecosystem,” said Anderson. “It’s a global problem.”
So, to help boost the network of those laid off, Anderson reached out to a number of HR leaders, including Chris Brownridge, the founder of Silver Lining, a job platform for those who have been laid off. He started Silver Lining after he shut down his startup last summer and had to lay off his staff of 20.
“I felt the pain [of layoffs] from the employer side, and it is painful for the employer, especially when you care about [your workers],” he said back in January. “I don’t want to keep seeing spreadsheets thrown around; I think that is not the right answer. We need a standardized way to deal with it, with a community behind it.”
Silver Lining is a platform that lets candidates submit profiles for recruiters from top companies to review. Job seekers on the site range from architects, UX designers, engineers, community managers and more.
Then COVID-19 spread across the world, forcing people to stay home and spend less. The economy’s downturn unevenly impacted companies around the world: where layoffs exist for the travel sector, usage surges exist for the remote work companies. But as a whole, the labor force is struggling, with 6.6 million Americans filing for unemployment just last week alone.
Madrona said it is donating a portion of its budget to help Silver Lining offer more services to those laid off. The firm declined to share the total amount of the donation.
Silver Lining will also now offer coaching, resume writing and emotional support to folks on the platform, Brownridge says. Thanks to donations from Madrona, Skytap, Bandwidth, Voodle, Female Founders Alliance and more, the site is free to use.
The uptick in layoffs has led Boston-based Drafted, a referral startup, to launch a product called the Layoff Network to help those who have been laid off. The startup previously was sending out a newsletter, Layoff List, of weekly list of layoffs with spreadsheets hyperlinked. During the SoftBank layoffs, Olivia Clark, the creator of the newsletter, noticed a surge in traffic — more than 1,000 recruiters subscribed.
Now she says traffic is “up 2,000%” and, in just two weeks, Drafted’s engineering team has productized that newsletter into a job search network.
The Layoff Network connects with recruiters people who have been recommended by their colleagues and “endorsed” for their skills. If you’re laid off, you can sign up and create a profile and ask a previous employer or colleague to recommend you. Clark says this is similar to LinkedIn’s “endorse” feature to make sure the people are credible.
Once the person has been endorsed, they will be added to a talent feed. That is where recruiters can search for nominees, job titles, companies or locations. Unlike a spreadsheet, this is clearly easier to navigate and adds another layer of human touch.
Clark says that the platform will be free for individuals who have been laid off, and who are recruiting or hiring. Drafted has a paid enterprise level that is for organizations that are conducting mass layoffs and want to provide support for former employees.
The grassroots efforts are vast and diverse. Here’s a list that posts companies that are actively hiring. Here’s a list for Canadian tech workers, and one for Colorado’s tech scene. And here’s a live tracker of startups that have issued layoffs, started by the team over at Human Interest, a startup that has nothing to do with layoffs.
Megan Murphy, who created Chicago Superstars for those laid off from the Chicago tech scene, has not received donations or support yet. As the number of unemployed people increases, Murphy says she’s noticing a lack of clarity on which companies are hiring, and which job postings are still active. If a company was hiring for a position in January, it might not be anymore (to help keep costs down).
“I can’t waste time crafting cover letters and custom resumes for jobs that won’t actually move forward,” she said. “There are tons of crowdsourced tools trying to flag who’s actually hiring still, while others are trying to flag who’s instituted a hiring freeze or laid people off, and in the meantime, company career pages aren’t up to date. We need one source of truth — and right now nobody’s really set up to do that.”
1575 Remote Jobs From 100+ Companies Hiring Remotely: https://t.co/pMk38QwvDX
— Brianne Kimmel (@briannekimmel) March 24, 2020
For now, Murphy says she’s getting creative in her own search, and asking for others to do the same. “Virtual communities and experiences are about to be more important than ever.” She notes guerrilla Slack channels and Reddit as an example of organic communication.
As for how she’s able to keep up with the demand of people needing help for their next job? Murphy, who is looking for a job herself after getting laid off, says she has fewer interviews from potential employers, so she’s been able to help those reaching out.
The work done by these entrepreneurs scratches at the same hope that lies within the hundreds of lines of contact information within a crowdsourced layoff spreadsheet: a need for a community in a trying time. And these days, more than most, remind us of the power of having a group of people together in the first place.