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The AI stack that’s changing retail personalization

By Walter Thompson
Sowmiya Chocka Narayanan Contributor
Sowmiya Chocka Narayanan is Co-founder and CTO at Lily AI, a leading AI platform helping brands & retailers understand individual customer’s emotional context. Prior to joining Lily AI, Sowmiya helped to build Box and worked on numerous projects at Yahoo! and Pocket Games.

Consumer expectations are higher than ever as a new generation of shoppers look to shop for experiences rather than commodities. They expect instant and highly-tailored (pun intended?) customer service and recommendations across any retail channel.

To be forward-looking, brands and retailers are turning to startups in image recognition and machine learning to know, at a very deep level, what each consumer’s current context and personal preferences are and how they evolve. But while brands and retailers are sitting on enormous amounts of data, only a handful are actually leveraging it to its full potential.

To provide hyper-personalization in real time, a brand needs a deep understanding of its products and customer data. Imagine a case where a shopper is browsing the website for an edgy dress and the brand can recognize the shopper’s context and preference in other features like style, fit, occasion, color etc., then use this information implicitly while fetching similar dresses for the user.

Another situation is where the shopper searches for clothes inspired by their favorite fashion bloggers or Instagram influencers using images in place of text search. This would shorten product discovery time and help the brand build a hyper-personalized experience which the customer then rewards with loyalty.

With the sheer amount of products being sold online, shoppers primarily discover products through category or search-based navigation. However, inconsistencies in product metadata created by vendors or merchandisers lead to poor recall of products and broken search experiences. This is where image recognition and machine learning can deeply analyze enormous data sets and a vast assortment of visual features that exist in a product to automatically extract labels from the product images and improve the accuracy of search results. 

Why is image recognition better than ever before?

retail and artificial intelligence

 

While computer vision has been around for decades, it has recently become more powerful, thanks to the rise of deep neural networks. Traditional vision techniques laid the foundation for learning edges, corners, colors and objects from input images but it required human engineering of the features to be looked at in the images. Also, the traditional algorithms found it difficult to cope up with the changes in illumination, viewpoint, scale, image quality, etc.

Deep learning, on the other hand, takes in massive training data and more computation power and delivers the horsepower to extract features from unstructured data sets and learn without human intervention. Inspired by the biological structure of the human brain, deep learning uses neural networks to analyze patterns and find correlations in unstructured data such as images, audio, video and text. DNNs are at the heart of today’s AI resurgence as they allow more complex problems to be tackled and solved with higher accuracy and less cumbersome fine-tuning.

How much training data do you need?

D2C companies deliver customer delight and simplicity

By Walter Thompson
Ashwin Ramasamy Contributor
Ashwin Ramasamy is the cofounder of PipeCandy, which provides algorithm-generated insights and predictions about ecommerce and D2C companies. His company helps investors, banks, tech firms and governments understand the global ecommerce landscape. @Ashwinizer

As the holiday season approaches, I can feel the tension in the air: how do I make my gifts stand out?

Thankfully, there are so many fun direct to consumer (D2C) categories — from bath salts to plants, to even organic fertilizer.

A New York City-based VC firm once asked us, “there are so many products that are getting launched in the direct to consumer route. It’s good that you track them. But can you tell us which segment is likely to go direct to consumer?” In other words, they were asking us to be psychics.

We aren’t, but I never let that question go.

There are many reasons why a brand can go D2C. You could unbundle every category on Amazon and there could be a case made for going direct to consumer. Several brands that do just that, but Amazon is not the obvious place to look for all answers.

Let’s take the example of plants and fertilizer. I want to gift a plant this holiday season, but I have two problems: I don’t know which plant to pick for my friend because I don’t know his preferences, and even if I find the right plant, I don’t know whether he’ll be able to keep it alive.

Generally, when people consider purchasing a plant, it’s not because they woke up after having a startling dream about a fern or a ficus that won its heart — it’s more likely that they looked at an empty balcony while sipping their morning coffee and thought it needed a touch of green. People aren’t buying plants; they’re buying better visuals, and a potted palm tree is a vehicle to their preferred emotional state.

But what if he’s unable to take care of the plants? Should I just buy some really good candles instead? Rooted, an online plant store, sorts its offerings using criteria like the amount of light required and how frequently a plant needs to be watered. As a result, I found Tim, a snake plant that’s “virtually indestructible and adaptable to almost any conditions.”

Some products are complex. No two plants are the same, and no two plant buyers are identical, either. It’s complicated. You can walk into a nursery and get the plant you are drawn towards and read the instructions wrapped inside, but the onus is still on you to help it thrive.

Companies like Rooted and Bloomscape know that you are buying an emotional state, so they help you avoid post-purchase dissonance. Instead, they offer a customer-focused product experience that starts with choosing the right plant and includes an onboarding kit that educates users, all contained within a continuous positive feedback loop delivered through carefully designed, friendly, educational content.

By going direct to consumer, brands can personalize the buying experience, optimize customer enjoyment and use, educate them at the right cadence, and ultimately, help them successfully harvest the emotions they were seeking.

This approach works for any category that is perceived to be complex. Whether it’s coffee, wine, food supplements or plants, these products are complex experiences that need to be tailored to customers, and the education process could be overwhelming. Brands that get it right can achieve the right experience by going direct to consumer.

People are generally resistant to change, but they love brands that can help them find a better version of themselves. Fear of the unknown and making the wrong decision ends in post-purchase dissonance; bad brands introduces dissonance, while a good brand attenuates this fear. The good or the bad is determined by the onboarding experience, intuitive design, content, online support, customer reviews and after-sales experience.

Like batteries that store power, brands store emotional states, positive and negative; a consumer’s interaction with Comcast taps into a different range of emotions than a visit to an Apple Store.

Creating comfortable footwear, for example, requires complex engineering; with unique types for walking, cycling and running, how do you figure which one is right for you? Nike Fit, an app released this year, uses AI to help customers find the optimal fit for their foot.

“Three out of every five people are likely to wear the wrong size shoe,” the company said in a statement. “Length and width don’t provide nearly enough data to get a shoe to fit comfortably. Sizing as we know it is a gross simplification of a complex problem.” The AI even tells you if your right foot is larger than your left and recommends the best sneaker; emotions unlocked! It’s no wonder Nike’s doubling down on its D2C channels.

Ultimately, a brand that performs well is a brand that has recognized and solved a customer’s problem; ecommerce and D2C are mediums that to do precisely that. A good brand offers good experience design that brings simplicity to a complex product, magically making it seem familiar.

Amazon to open its first non-Whole Foods grocery store in 2020

By Sarah Perez

Amazon is opening its first non-Whole Foods grocery store in the LA neighborhood of Woodland Hills, the retailer today confirmed. The news of the new store was first reported by CNET, which spotted several job postings referencing the location, including those for a zone leader, grocery associates and a food service associate.

Unlike Amazon’s growing number of cashierless Amazon Go convenience stores, the new store will feature conventional checkout technology, says Amazon. CNBC also noted the store may be located in a former Toys “R” Us location at a shopping center.

Amazon declined to offer more details about its plans for the store or others like it, but did confirm it’s opening a grocery store in Woodland Hills in 2020.

The retailer’s plans to expand its grocery operations beyond its Whole Foods brand was previously reported by The Wall Street Journal in October. Amazon, the report claimed, was planning a chain of dozens of grocery stores across the U.S., beginning with sites in LA, Chicago and Philadelphia. Woodland Hills was mentioned as being among the first locations, along with Studio City and Irvine.

Other locations being scouted included those in the New York metro area, New Jersey and Connecticut.

Amazon’s interest in an expanded brick-and-mortar presence comes at a time when Walmart’s grocery business has been booming, with some reports claiming it now dominates those from rivals, including Amazon, Instacart and others.

Walmart in Q2 reported 37% increase in e-commerce sales, supported by the strong growth in online grocery. Much of its success in that area can be attributed to the proximity of its stores to its customer base. With no markups on food prices (as some of its competitors do), it’s affordable to order from Walmart Grocery online, then drive to pick up the groceries — or pay a small fee to have them delivered.

Amazon’s Whole Foods, meanwhile, has long had a reputation as a more expensive store. Following the acquisition of the grocery chain, Amazon has tried to combat that notion with weekly sales and discounts for Prime members. But Whole Foods is still considered to be a more high-end store, and its prices continue to reflect that.

The new Amazon grocery stores, on the other hand, will be targeted at the mainstream consumer who typically shops from more traditional, or even value, grocery chains.

“When it comes to grocery shopping, we know customers love choice and this new store offers another grocery option that’s distinct from Whole Foods Market, which continues to grow and remain the leader in quality natural and organic food,” an Amazon spokesperson told CNET.

They said Whole Foods would continue to expand, despite the launch of the new Amazon grocery stores. Whole Foods opened 17 locations this year and has more planned, the company said.

Two security researchers earned $60,000 for hacking an Amazon Echo

By Zack Whittaker

Two security researchers have been crowned the top hackers in this year’s Pwn2Own hacking contest after developing and testing several high profile exploits, including an attack against an Amazon Echo.

Amat Cama and Richard Zhu, who make up Team Fluoroacetate, scored $60,000 in bug bounties for their integer overflow exploit against the latest Amazon Echo Show 5, an Alexa-powered smart display.

The researchers found that the device uses an older version of Chromium, Google’s open-source browser projects, which had been forked some time during its development. The bug allowed them to take “full control” of the device if connected to a malicious Wi-Fi hotspot, said Brian Gorenc, director of Trend Micro’s Zero Day Initiative, which put on the Pwn2Own contest.

The researchers tested their exploits in a radio-frequency shielding enclosure to prevent any outside interference.

“This patch gap was a common factor in many of the IoT devices compromised during the contest,” Gorenc told TechCrunch.

Amat Cama (left) and Richard Zhu (right), who make up Team Fluoroacetate. (Image: ZDI)

An integer overflow bug happens when a mathematical operation tries to create a number but has no space for it in its memory, causing the number to overflow outside of its allotted memory. That can have security implications for the device.

When reached, Amazon said it was “investigating this research and will be taking appropriate steps to protect our devices based on our investigation,” but did not say what measures it would take to fix the vulnerabilities — or when.

The Echo wasn’t the only internet-connected device at the show. Earlier this year the contest said hackers would have an opportunity to hack into a Facebook Portal, the social media giant’s video calling-enabled smart display. The hackers, however, could not exploit the Portal.

Corporate, public investments spur interest in Pacific Northwest startups

By Walter Thompson
Dan Burgar Contributor
Dan Burgar is President of the Vancouver VR/AR Association, where he has helped develop the city's ecosystem into the second largest VR/AR hub globally. He's also a partner at Shape Immersive, which creates innovative solutions for top brands and enterprises.
Kate Wilson Contributor
Kate Wilson is a Vancouver-based journalist. Previously technology editor at the Georgia Straight, Western Canada’s largest news and entertainment weekly, she has also written for The Independent, BetaKit, BC Business, and others.

Cities have always been America’s centers of power, driving the economy forward through competition. But now, they’re ceasing to lead the country’s innovation.

As jobs and talent have clustered, expertise has spilled over urban boundaries. In locations like the Gulf Coast, Texas Triangle, Great Lakes and Southern California, metropolitan areas are cooperating across borders to share new ideas. Eleven of these have earned the title of “megaregion,” and they host some of the continent’s cutting-edge centers of technology.

The Cascadia Innovation Corridor — the strip of land down the West Coast from Vancouver, Canada to Portland, Oregon — is perhaps the best example. Home to powerhouses like Microsoft, Amazon, Nike, Lululemon, Boeing and Intel, the area has seen large investments from companies hoping to encourage further cooperation. Over the past five years, state and provincial governments have signed formal agreements for collaboration, and executive-filled conferences are being held to encourage new partnerships.

Why are businesses and government organizations investing so much into the region? Challenge Seattle CEO and former Washington State Governor Christine Gregoire believes it’s the evolution of a trend that’s been unfolding for decades.

“For many years, a number of international companies from Seattle have been putting Canadian headquarters in Vancouver,” she says. “So without anybody deliberately thinking about how we could work together, it was already actually happening. These organizations have decided to capitalize on [what] was happening from the ground up, and build out a vision, and bring us all together so we can really magnify the success of what’s already happening on the ground.”

Local support

The West Coast’s urban centers are linked by more than shared geography and, as Gregoire jokes, a love of the Seattle Seahawks — the Pacific Northwest is characterized by an open and inclusive culture, heterogeneous populations and creating technology with a focus on social good. Economically, too, there are similarities. West Coast cities have historically turned to Asian and South Asian markets for trade, as well as looking to each other. Washington State exports more to British Columbia than it does to all other Canadian provinces combined, and if Washington State were a country, it would represent B.C.’s third-largest international export market

For Bill Tam, a member of the Cascadia Innovation Corridor steering committee and former president of BC Tech, Vancouver, Seattle, and Portland have different reasons to support the megaregion.

“In Vancouver, which has a great startup ecosystem, a lot of those companies and a lot of the research organizations have really bought into this idea of being part of something bigger and more substantive,” he says. “I think on the U.S. side, what was interesting was that we saw the impetus come from larger companies — particularly Microsoft, but they’re not the only ones. Everyone from the Nordstroms to the REIs really see the value in learning and working together to try and build leverage, and to accelerate the things they want to do.”

Tam’s hope for the region’s success comes from its ability to share resources across cities. Vancouver, for instance, is known for its highly-educated workforce: the location’s nature-filled setting and welcoming immigration policies attracts many qualified tech employees. With its industry focused on startups, though, it lacks larger brands and anchor companies that would help propel it onto the global stage. 

The Seattle area, however, has the opposite problem. America’s tight immigration regulations make it hard for companies to secure qualified talent, but the influence of tech giants like Microsoft and Amazon mean the city is a hotbed for international investment and innovation. By joining forces — and by integrating Portland, which sits somewhere between both poles — the Cascadia region, Tam believes, can emerge as a powerful global competitor. 

“I think the long-term vision for Cascadia is to feel like it is an economic region that is not only the best place to build new innovations, but also a cohesive area that understands the values of collaboration,” he says. “It ties together all the responsible aspects of how we live — whether it’s on the sustainability agenda, the environment agenda, and how we actually treat each other as an open and diverse society.”

Vancouver Skyline, (lee robinson) unsplash

Photo: Lee Robinson/Unsplash

Areas of expertise

Aside from giants Amazon and Microsoft’s dominance in ecommerce, software, and cloud-based computing, the area has spawned niche areas of expertise. President and CEO of the Business Council of British Columbia Greg D’Avignon believes those sectors will help elevate Cascadia’s profile.

“There’s a myriad of interesting companies here in British Columbia that are driving innovation,” he says. “In the quantum space, there’s D-Wave Systems, 1QBit, and others. D-Wave is the first commercial quantum computing company in the world, and it’s driving significant and complex computations on datasets to try to resolve issues that are endemic to challenges we have in terms of climate, personal health, aging, and growing populations. Life sciences is another important sector. There are some very interesting companies in the personalized medicine and health business — we’ve got Zymeworks […] and a myriad of other companies [that] are changing the nature of population-based healthcare.”

The region is also well-regarded in the virtual and augmented reality (VR/AR) space. Microsoft developed one of the leading AR headsets — the HoloLens — in the Pacific Northwest, and Vancouver has since been recognized as the world’s second-largest VR and AR ecosystem. More than 230 companies are located in the city, drawing on its history of gaming and visual effects to develop everything from surgical-training software to AAA-aspiring titles.

As well as individual successes in the consumer blockchain space with viral game Cryptokitties and data aggregation with Hootsuite, Cascadia is known for technical apparel, with the likes of Lululemon, REI, Eddie Bauer, Arc’teryx, and Nike choosing the region as their home. With Amazon’s monopoly on online retail, the West Coast leads North America in merchandizing tech.

“When we talk about some of the foundational pillars in the corridor, we’re talking about the movement of people and goods across the border,” D’Avignon says. “We’re talking about bringing together postsecondary in a way that is important. That’s all rooted deeply in how we look at making this region better. And then as we learn, how do we share that learning and those commercial opportunities with the rest of the world?”

Where VCs are looking for voice startup investments

By Eric Peckham

Led by Amazon’s Alexa, smart speakers’ install base is expected to reach 200 million units worldwide by 2020. A quarter of Americans over the age of 12 own a smart speaker, and the majority of those users have more than one device in their home. Moreover, Apple could sell 50 million of its Airpods this year (generating $8 billion in sales) as Bluetooth earpieces explode in popularity.

For the market penetration of this hardware, the app ecosystem remains limited in terms of mainstream adoption. Podcast production and consumption has exploded, but they don’t take advantage of smart speakers and headphones as interactive devices. Even though there were 57,000 Alexa skills available at the end of last year, most people are using smart speakers mainly to check the weather, check the news, ask simple questions and play music.

If voice is a new operating system, where are the opportunities to build giant companies on top of it?

To get a better sense of how the smart money views this market, I asked five VCs who have spent the most time in this space to share which types of startups have captured their attention:

  • Matt Hartman, Partner at Betaworks Ventures
  • Nicole Quinn, Partner at Lightspeed Venture Partners
  • Paul Bernard, Director of the Alexa Fund at Amazon
  • Ann Miura-Ko, Partner at Floodgate
  • Jordan Cooper, Partner at Pace Capital

Here are their responses:

Matt Hartman, Partner at Betaworks Ventures

The most recent wave of audio was about constant connectivity and streaming, and we invested in Anchor, Gimlet, and other audio-first businesses that would thrive in the podcast renaissance. For the next wave of audio, we’re focused [on] three broad categories: personalization, new behaviors/new interfaces, and monetization. Personalization means both utilizing location, Apple Watch, and other data to create magical audio experiences and customized audio content, but also advances in generative content like Resemble.ai and Descript that can create custom audio. 

In terms of new behaviors/new interfaces, people are leaving their Airpods in longer, which means there may be an opportunity for “Airpod-first” product design. Finally, as audio becomes an industry, monetization will be improved and also re-thought: subscription products such as Shine and Headspace are interesting in the context that if they don’t really work as ad-supported podcasts, and they are packaged in such a way that people are willing to pay a monthly or annual subscription.

Nicole Quinn, Partner at Lightspeed Venture Partners

We are in between platforms and it’s not clear what the next platform will be. VR and AR are options, but I believe voice will be the next major platform with mass adoption. The biggest hurdle right now is discoverability which in turn leads to engagement and retention issues. This was the same for mobile before the App Store allowed us to discover new apps. We need the same for voice.

We will then see voice move from a music and list creation tool to one which quickly becomes part of popular culture around shopping, games, travel, meditation, etc. Leading audio apps such as Calm, the meditation and sleep app, are already set up to take advantage of the move to voice.

Paul Bernard, Director of the Alexa Fund at Amazon

Alexa got its start in the home, but we knew early on that bringing this experience to customers outside the home would become important. Our investments in companies like North (smart glasses), Vesper (power-efficient microphones) and Syntiant (power-efficient AI chip) were inspired by this vision, and reflect the idea that ambient computing is becoming part of daily life.

These companies are also helping create the surface area for interactive entertainment and information services, such as Drivetime’s trivia games (we are an investor there too), and social ones like TTYL, which enables friends wearing earbuds to maintain “audio-presence” with each other throughout their day while they multi-task. We also expect to see innovation in how voice can help seniors aging in place — our recent investment in Labrador Systems, which builds assistive robots, is a good example of this trend.

Ben Horowitz on shocking rules and dramatic object lessons

By Connie Loizos

Ben Horowitz, co-founder of venture firm Andreessen Horowitz, has a new book out titled “What You Do Is Who You Are,” which takes a look at how to create culture at a company.

We sat down with Horowitz last month to discuss some of the lessons he aims to impart and why he felt compelled to write about culture now — including whether it has to do with the growing tech backlash against once-small companies that have taken over the world, and whose cultures are magnified exponentially as a result.

We published parts of our chat here, where we talked about Uber and WeWork specifically. The rest, which dives more into practical advice for founders, follows. Our conversation has been edited lightly for length and clarity.

Extra Crunch: One of the problems we’re dealing with right now, that’s driving this big tech backlash in ways, has a lot to do with just how empowered founders are. And that seemingly goes back to them having more say than other shareholders via dual-class shares. How much power should these founders have?

Ben Horowitz: I think it’s pretty important for tech companies to have some sort of long-term view of the business. Now, fast forward and Eric Ries has this new idea of a Long Term Stock Exchange, which basically says, okay, founders won’t have to have dual-class shares, but the shareholders and the founders will be in it together. So the shareholders have to vest their shares to get voting rights and if you hold the stock for years, and you can get some power, but you don’t get it right off the bat.

I think that that’s probably the optimal model. But I would say that, at least in my view, dual-class is still better than activist investors going after tech companies, because you can’t get to the next product. It’ll just make the company very short-term.

Also, and maybe I’m talking like an old CEO, but I think one of the things that gets lost in the kind of conversation between founders and shareholders is employees. It’s very bad for employees when activist investors get control of the company and drive it toward short-term returns because often, everybody ultimately loses their job in those scenarios.

What about phasing out those dual-class shares over time, though, maybe over five, or seven, or 10 years, which is a decent amount of time for founders to transition their startups to publicly-traded companies?

I think that that would make sense if the people who got power were long-term investors. I just think that if you have short-term investors, making decisions about [a] technology company, the easier way to expand profits is to stop doing R&D because it’s not going to show up in the next two years. But long-term, that’ll spell doom. And I think that’s kind of the way these proxy battles have gone. It’s been like, ‘Okay, stop spending, stop investing.’

I don’t think the kind of cultural issues that companies have run into have much to do with voting power. I think it just has more to do some combination of lack of skill and how fast the companies are growing.

Going back to the book, why weave in the cultural figures that you have — Toussaint Louverture, Genghis Khan and Shaka Senghor [a contemporary who served time for murder and today is a criminal justice reform advocate]. There are so many people you could have included, and you focused on these three individuals.

It’s a weird origin story, but Prince years ago put out an album called 3121, and he opened this club in Vegas called the 3121, and he would perform there, like, every weekend. And the show would start at 10 and he would show up at midnight or 1 a.m., but during that time in between, he would show these old films with these really interesting dancers in these elaborate clothes. And you’d just be watching these old guys, and then Prince would start to splice in [his own movies, including] “Under the Cherry Moon” and “Purple Rain,” and you’d go, ‘well those are the dance moves from those guys [in the older films] and that’s a quote from those guys,’ and you realize: that was what he was trying to express. And I thought, you know, I finally really understand him. And I thought, you know, [these three] have really influenced my views on culture [for a variety of reasons] and it would be a good way to tell this story.

It’s fascinating how it comes together. Were you ever a teacher?

When I was in graduate school, I was a computer science kind of TA, so I taught the freshmen computer science, programming languages, and whatnot.

My grandfather was a teacher — he was fired actually during the McCarthy era for being a communist teacher; he was teaching junior high.

He was a communist. So at least McCarthy got that part right. But it makes me very nervous, people wanting to remove people from their positions these days because of their points of view. My grandfather supported Stalin, and, like, Stalin was really bad. But I don’t think he should have been fired for being a teacher. I just don’t think it’s very good for society. Everybody’s got to be able to have a bad point of view. When you go, ‘You have a bad point of view and that’s illegal, to think that, and now we’re going to take away your job from you, make you not a legitimate person . . .’

We just saw that in the sports world, which was pretty crazy. Speaking of which, in the book you talk about the need to create shocking rules as part of establishing a company culture. As part of that section, you reference former New York Giants coach Tom Coughlan, who started meetings five minutes early and fined players $1,000 for every minute they were late. Doesn’t Andreessen Horowitz do something like that, penalize people for being late?

Amazon now sells movie tickets in India

By Manish Singh

Amazon has set its eye on the next business it wants to disrupt in India: online movie tickets. The e-commerce giant said Saturday it has partnered with online movie ticketing giant BookMyShow to offer booking option on its shopping site and app.

The move comes months after the e-commerce giant began offering flight ticketing option in the country as it races to turn its payments service Amazon Pay into a “super app” — a strategy increasingly employed by players in emerging markets such as India.

Starting today, Amazon users in India can book their movie tickets from the “movie tickets” category under “shop by category” or the Amazon Pay tab, the e-commerce firm said. BookMyShow, which leads the online movie ticketing market, is the exclusive partner for this new offering, the two said.

Neither of the parties disclosed the financial arrangements of the deal, but BookMyShow is likely paying Amazon a fee for tapping “millions” of customers the e-commerce giant has amassed in the country.

Amazon said its credit card users in India will get a 2% cashback on each movie ticket purchase. On its app, the company adds until November 14. it will also offer cashback of up to Rs 200 on each ticket purchase.

For its flight ticketing service, Amazon India partnered with Cleartrip . Balu Ramachandran, SVP at Cleartrip, told TechCrunch in an interview earlier that the company was paying a promotional fee to Amazon, but declined to offer specifics.

An Amazon India spokesperson declined to comment on the financial arrangements.

BookMyShow, which employs 1,400 employees, sells about 15 million tickets each month. The service, which has a presence in over 650 towns and cities, today counts heavily-backed Paytm as one of its biggest rivals. Paytm, which entered the movie ticketing business three years ago, has been able to eat some of BookMyShow’s market share by offering cashback on each ticket purchase.

The media and entertainment business in India is worth $23.9 billion, a report from EY-FICCI said in March this year, which noted that consumer spendings on the web is increasingly growing. More than 50% of all tickets sold by the top four multiplex chains in the country have occurred on the web.

Ashish Hemrajani, founder and CEO of BookMyShow, said through the partnership the company will be able to access Amazon India’s “deep penetration across tier 2 and tier 3 cities.”

Mahendra Nerurkar, Director of Amazon Pay, said today’s partnership shows Amazon’s commitment to “simplify the lives of our customers in every possible way — as they shop, pay bills, or seek other services.”

Last month, Amazon introduced a new feature that allows Amazon Pay users to pay their mobile, internet, and utility bills. This is the first time Amazon is offering these functionalities in any market (it plans to bring this to the U.S. in coming months).

Amazon has been quietly expanding its payments offering, built on top of UPI payments infrastructure, in the country. Unlike its global rivals Google and Walmart that offer standalone apps for their payment services and also focus on transactions among customers, Amazon has kept Pay integrated with its e-commerce offering and focused on consumer-to-business transactions.

The company maintains tie-ups with several popular Indian online services and frequently offers cashback to incentivize users to pick Amazon Pay over other solutions. Earlier this week, Amazon pumped about $634 million into its India business.

Lightspeed’s Jeremy Liew is on the hunt for always-on media startups

By Eric Peckham

Perhaps best known for a career-making seed investment in Snapchat, Lightspeed partner Jeremy Liew is a leading investor across media and entertainment, making bets on startups like Cheddar, Giphy, HQ, SpecialGuest, Mic, Beme, Playdom, Duta and Flixster.

I spoke to him earlier this week about how he assesses the market for media startups, which led into a discussion about “always-on” forms of entertainment that add stimulation to a person’s environment, instead of commanding their full focus.

Here’s the transcript of our conversation, edited for length and clarity:

Eric Peckham: Do you have a consistent framework for evaluating potential investments?

Jeremy Liew: Our perspective is that consumer technology is now more about the consumer side than the technology side. It’s really more about pop culture than new innovations in technology. 

When we are assessing a consumer investment we ask ourselves, “does this have the potential to become part of pop culture?” One way to think about it is whether people who don’t use the product will still become familiar with what it is. Like how you can understand a reference to “Game of Thrones” even if you don’t watch it. 

Another key question is, whether there is a scalable, repeatable way for the product to reach its audience. That can be advertising, it can be word of mouth, it could be through social channels.

We also asked ourselves, “is this product going to build a new habit?” and we assess whether the entrepreneur has a unique insight into both why this is happening and why it’s happening now.

Your colleague Alex Taussig told me you have an overarching “future of TV” thesis that’s guided a number of your investments. Tell me about that thesis and how it filters opportunities in the media & entertainment space for you.

I think you can split what used to be called TV into two core use cases: “TV as entertainment” and “TV as company.”

“TV as entertainment” is most of what Netflix, Amazon, Apple, HBO, and similar companies have been focused on. It is high-production quality entertainment you have to pay attention to. Think shows like “Game of Thrones,” “Succession,” “Orange is the New Black.”

Then there’s another classic category of TV — “TV as company,” which is stuff that’s on while you’re doing something else. You’ve got the morning show on while you’re getting the kids ready for school or you’re getting ready to go to work. That’s how you get the five hours of TV viewing per day that Americans average.

TV as entertainment has to be so good that you choose to watch it over doing anything else; TV as company you just have to not choose to turn it off.

The vast amount of attention to the move to video — with subscription video on-demand (SVOD) and so forth — has been on TV as entertainment. There are hit shows that will attract people to Netflix, or to HBO Go, to Disney+. But what causes them to stay as a subscriber after they binge-watched all the way through the stuff that brought them in the first place?

That tends to be the TV as company content. If you actually look at hours watched in television, no one is tuning in to catch the latest episode of “Shark Week” — it is just what’s on. Think about the TV Guide grid: every genre, every channel will likely have a mobile native equivalent.

Some of these already exist. ESPN — it’s a channel where men watch the best competitors in the world play the sports they used to play when they were in high school and then they talk about it with their friends. Twitch is a place where men, mostly, watch the best competitors in the world play the games they used to play when they were younger and talk about it with their friends.

Nielsen says it can now measure Amazon Prime Video

By Sarah Perez

Nielsen announced this morning it will now be able to measure the viewing taking place on Amazon Prime Video, through its Subscription Video on Demand Content Ratings solution. This product, first launched two years ago, was originally focused on measuring Netflix’s viewing numbers with promises to add support for measuring Prime Video in 2018.

Though delayed by a year, that Prime Video measurement is now available.

Through Nielsen’s service, clients will have access to the measurement data for their own content, as well as the total content life cycle for competitive media — whether it’s live, content-shifted viewing, steamed or available through video-on-demand, Nielsen says.

As with Netflix, however, Nielsen is able to measure only the Amazon Prime Video streams taking place in the U.S. via TVs. This includes through connected and smart devices — like streaming media players, for example.

That limitation has been a point of criticism from Netflix, which routinely dismisses Nielsen’s accuracy because it misses streams coming from mobile devices and PCs. But insiders now say Nielsen’s numbers are fairly close, according to a Variety report from earlier this year, which detailed how Nielsen’s numbers backed up Netflix’s claims about its hit movie “Bird Box.”

Plus, those missing mobile and PC streams may not be as important in terms of U.S. viewership as you may think. Although many U.S. consumers are cutting the cord with traditional linear TV, they still often watch their streamed shows on the TV’s big screen. Hulu, for example, said last year that as much as 78% of its viewing takes place on a TV, to give you an idea.

For networks and studios, Nielsen’s SVOD measurement numbers help provide insight into what otherwise can be a bit of a black box. Although Netflix argued during its Q3 earnings last week that it does now share some viewing data with producers, it can be hard for studios and networks to put those numbers in context.

“Nielsen’s measurement in the SVOD space is invaluable for our studio to understand how our programs perform on these platforms and the audiences they attract,” said James Petretti, SVP, U.S. Research and Analytics at Sony Pictures Television, in a statement. “It becomes even more exciting for us, because Nielsen has the ability to help us understand what these audiences are doing outside of those platforms as well — how and what they are watching on other on-demand and linear services,” he continued.

“We are also able to understand the impact of traditional linear advertising driving viewers to these SVOD programs so what Nielsen is providing is extraordinarily compelling,” said Petretti.

To kick off its news of new capabilities, Nielsen also offered a few examples of what sort of data its Prime Video measurements can deliver.

The company says the Amazon Prime Video show “The Boys” averaged 4.1 million viewers per episode, with its premier averaging a little over 6 million. The largest share (39%) of viewers are aged 35 to 49, it also said. And within the first 10 days, the show had reached nearly 8 million viewers across its eight-episode season.

“This is a significant milestone for Nielsen, especially considering the upcoming high-profile streaming service launches,” said  Brian Fuhrer, SVP Product Leadership, Nielsen, in a statement. “We think the addition of Amazon Prime Video will allow rights owners an added ability to understand both the size, as well as the composition, of their streaming audiences relative to other platforms or programs. Beyond that, making this enhancement re-affirms our commitment to continuous improvement and to being the one media truth of an increasingly-fragmented video landscape,” he added.

We’ve reached out to Amazon for comment and will update if one is provided.

EU contracts with Microsoft raising ‘serious’ data concerns, says watchdog

By Natasha Lomas

Europe’s chief data protection watchdog has raised concerns over contractual arrangements between Microsoft and the European Union institutions which are making use of its software products and services.

The European Data Protection Supervisor (EDPS) opened an enquiry into the contractual arrangements between EU institutions and the tech giant this April, following changes to rules governing EU outsourcing.

Today it writes [with emphasis]: “Though the investigation is still ongoing, preliminary results reveal serious concerns over the compliance of the relevant contractual terms with data protection rules and the role of Microsoft as a processor for EU institutions using its products and services.”

We’ve reached out to Microsoft for comment.

A spokesperson for the company told Reuters: “We are committed to helping our customers comply with GDPR [General Data Protection Regulation], Regulation 2018/1725 and other applicable laws. We are in discussions with our customers in the EU institutions and will soon announce contractual changes that will address concerns such as those raised by the EDPS.”

The preliminary finding follows risk assessments carried out by the Dutch Ministry of Justice and Security, published this summer, which also found similar issues, per the EDPS.

At issue is whether contractual terms are compatible with EU data protection laws intended to protect individual rights across the region.

“Amended contractual terms, technical safeguards and settings agreed between the Dutch Ministry of Justice and Security and Microsoft to better protect the rights of individuals shows that there is significant scope for improvement in the development of contracts between public administration and the most powerful software developers and online service outsourcers,” the watchdog writes today.

“The EDPS is of the opinion that such solutions should be extended not only to all public and private bodies in the EU, which is our short-term expectation, but also to individuals.”

A conference, jointly organized by the EDPS and the Dutch Ministry, which was held in August, brought together EU customers of cloud giants to work on a joint response to tackle regulatory risks related to cloud software provision. The event agenda included a debate on what was billed as “Strategic Vendor Management with respect to hyperscalers such as Microsoft, Amazon Web Services and Google”.

The EDPS says the idea for The Hague Forum — as it’s been named — is to develop a common strategy to “take back control” over IT services and products sold to the public sector by cloud giants.

Such as by creating standard contracts with fair terms for public administration, instead of the EU’s various public bodies feeling forced into accepting T&Cs as written by the same few powerful providers.

Commenting in a statement today, assistant EDPS, Wojciech Wiewiórowski, said: “We expect that the creation of The Hague Forum and the results of our investigation will help improve the data protection compliance of all EU institutions, but we are also committed to driving positive change outside the EU institutions, in order to ensure maximum benefit for as many people as possible. The agreement reached between the Dutch Ministry of Justice and Security and Microsoft on appropriate contractual and technical safeguards and measures to mitigate risks to individuals is a positive step forward. Through The Hague Forum and by reinforcing regulatory cooperation, we aim to ensure that these safeguards and measures apply to all consumers and public authorities living and operating in the EEA.”

EU data protection law means data controllers who make use of third parties to process personal data on their behalf remain accountable for what’s done with the data — meaning EU public institutions have a responsibility to assess risks around cloud provision, and have appropriate contractual and technical safeguards in place to mitigate risks. So there’s a legal imperative to dial up scrutiny of cloud contracts.

In parallel, the EDPS has been pushing for greater transparency in consumer agreements too.

On the latter front Microsoft’s arrangements with consumers using its desktop OS remain under scrutiny in the EU. Earlier this year the Dutch data protection agency referred privacy concerns about how Windows 10 gathers user data to the company’s lead regulator in Europe.

While this summer the company made changes to its privacy policy for its VoIP product Skype and AI assistant Cortana after media reports revealed it employed contractors who could listen in to audio snippets to improve automated translation and inferences.

The French government, meanwhile, has been loudly pursuing a strategy of digital sovereignty to reduce the state’s reliance on foreign tech providers. Though kicking the cloud giant habit may prove harder than ditching Google search.

Commercetools raises $145M from Insight for Shopify-style e-commerce APIs for large enterprises

By Ingrid Lunden

Global retail e-commerce is expected to be a $25 trillion business this year, and today one of the companies that has built a set of tools to help larger enterprises to sell to consumers online has raised a large growth round to meet that demand. Commercetools, a German startup that provides a set of APIs that power e-commerce sales and related functions for large businesses, has raised $145 million (€130 million) in a growth round of funding led by Insight Partners, at a valuation that we understand from a close source is around $300 million.

The funding comes at the same time that commercetools is getting spun out by REWE, a German retail and tourist services giant that acquired the startup in 2015 for an undisclosed amount.

The route the company took after that is a not-totally-uncommon one for tech startups acquired by non-tech companies: commercetools had been acquired by REWE as part of a strategy to take some of its own e-commerce tech in-house, but commercetools had always continued to work with outside clients and has been growing at about 110% annually, CEO and co-founder Dirk Hoerig said in an interview.

Current companies include Audi, Bang & Olufsen, Carhartt, Yamaha and some very big names in retail products and services (including major telco/media brands in the USA that you will definitely know). Ultimately, the decision was taken to bring in outside funding and spin out the businesses as an independent startup once again to supercharge that growth. REWE will remain a significant shareholder with this deal.

Hoerig said that commercetools had raised only around $30 million in outside funding when it was a startup ahead of getting acquired.

Although e-commerce has grown over the last couple of years with slightly less momentum than in previous years given wider economic uncertainty, it continues to expand, and in that growth, we’ve seen a swing back to individual retail brands looking for ways of connecting more directly with customers outside of the third-party marketplaces (like Amazon) that have come to dominate how people spending money online.

That is giving a boost to those providing essentially non-tech businesses the tools to build e-commerce activity by offering “headless” tools that are attached to front-end systems designed by others.

Shopify — coincidentally, also backed by Insight when it was still a private company — focuses more on providing e-commerce tools by way of APIs to medium and smaller customers, and it has ballooned to some 800,000 customers. Commercetools, in contrast, focuses more on companies that typically generate revenues in excess of $100 million annually, Hoerig said.

Commercetools has no plans to expand to smaller companies — “We have no plan to compete against Shopify,” Hoerig said. Nor is there any strategy in place to extend into logistics, another important component of e-commerce services.

That’s not to say that commercetools doesn’t have a crowded field when it comes to competition, though. Hoerig noted that companies like SAP, Oracle and IBM are typical competitors and are more often already the incumbent provider to large enterprises. Then, there are others like Microsoft, in hot competition with Amazon for cloud customers, also expanding their commerce services for business. Companies typically make the change to replace them with something like commercetools, he said, when they decide they need a “more modern” approach.

In all (if that list alone wasn’t a strong enough hint), the wider market for e-commerce tools is very fragmented.

“Even SAP has only something like a 2% share,” he added.

Today, commercetools offers a range of services, starting at APIs to power the basics of webshops and mobile sites, along with IoT services (“machines buying from machines,” Hoerig noted), powering chatbots, the architecture for running marketplaces, social commerce services (for example, powering selling through Instagram), and augmented reality. It currently integrates with Adobe, Frontastic, Bloomreach and Magnolia.

Commercetools plans to use the funding to continue expanding its business in North America and other parts of the world, as well as to continue building up its B2B2B offering — that is, tools for businesses to sell to other businesses. This is an area that companies like Alibaba are very strong in (and Amazon has been also growing its business), and the idea is to provide tools to let companies sell on their own sites either as a complement to, or to replace, third-party marketplaces.

Another area where it will continue to figure where it can play better is in the development of better online-to-offline technology.

Richard Wells and Matt Gatto of Insight are both joining the board with this deal.

“With a strong track record of investing in retail software leaders, we are excited to have the opportunity to invest in commercetools and help them scale up internationally,” said Wells in a statement. “In our opinion commercetools represents the next wave of enterprise commerce software and has the potential to unlock powerful innovation and growth within the e-commerce sector.”

New Nvidia Shield Android TV streaming device leaks via Amazon listing

By Darrell Etherington

The fact that Nvidia is updating its Shield TV hardware has already been telegraphed via an FCC filing, but a leak earlier today paints much more of a detailed picture. An Amazon listing for a new Nvidia Shield Pro set-top streaming device went live briefly before being taken down, showing a familiar hardware design and a new remote control and listing some of the forthcoming feature updates new to this generation of hardware.

The listing, captured by the eagle-eyed Android TV Rumors and shared via Twitter, includes a $199.99 price point, specs that include 3GB of RAM, 2x USB ports, a new Nvidia Tegra X1+ chip and 16GB of on-board storage. In addition to the price, the Amazon listing had a release date for the new hardware of October 28.

If this Amazon page is accurate (and it looks indeed like an official product page that one would expect from Nvidia), the new Shield TV’s processor will be “up to 25% faster than the previous generation,” and will offer “next-generation AI upscaling” for improving the quality of HD video on 4K-capable displays.

It’ll offer support for Dolby Vision HDR, plus surround sound with Dolby Atmos support, and provide “the most 4K HDR content of any streaming media player.” There’s also built-in Google Assistant support, which was offered on the existing hardware, and it’ll work with Alexa for hands-free control.

The updated @Nvisia Shield TV is on https://t.co/er7yzgQKLY ?
Comes with Dolby Vison, new Tegra X1 + processorhttps://t.co/IXOFlEvVCS pic.twitter.com/TGEWEZD2zM

Android TV Rumors (@androidtv_rumor) October 17, 2019

The feature photos for the listing show a new remote control, which has a pyramid-like design, as well as a lot more dedicated buttons on the face. There’s backlighting, and an IR blaster for TV control, as well as a “built-in lost remote locator” according to the now-removed Amazon page.

This Amazon page certainly paints a comprehensive picture of what to expect, and it looks like a compelling update to be sure. The listing is gone now, however, so stay tuned to find out if this is indeed the real thing, and if this updated streamer will indeed be available soon.

UPDATE: Yet another Nvidia leak followed the first, this time through retailer Newegg (via The Verge). This is different, however, and features a Shield TV device (no “Pro” in the name) that has almost all the same specs, but a much smaller design that includes a microSD card, and seems to have half the amount of on-board storage (8GB versus 16GB) and a retail price of around $150.

nvidia.0

‘Cloud kitchens’ is an oxymoron

By Danny Crichton

The biggest wave in consumer products right now has all the hallmarks of another bubble of misplaced investor expectations and sadly lower margins.

Cloud kitchens (the category, and not just CloudKitchens the startup service) is essentially WeWork for restaurant kitchens. Instead of buying an expensive restaurant site on a heavily-walked street, a cloud kitchen is developed in a cheaper locale (an industrial district perhaps), with dozens of kitchen stations that are individually rentable for short periods of time by chefs and restaurant proprietors.

It’s a market that has exploded this year. CloudKitchens, which has been funded by former Uber founder and CEO Travis Kalanick, is perhaps the most well-known example, but others are competing, and none more so than meal delivery companies. DoorDash announced that it was opening a shared kitchen in Redwood City just this week, Amazon has announced it is getting in the game, and around the world, companies like India-based transportation network Ola are building out their own shared kitchens.

That has led to laudatory headlines galore. Mike Isaac and David Yaffe-Bellany talk about “the rise of the virtual restaurant” at the New York Times, while Douglas Bell, contributing to Forbes, wrote that “Deliveroo’s Virtual Restaurant Model Will Eat The Food Service Industry.”

And there are not just headlines, but predictions of doom as well for millions of small-business restaurant owners. Mike Moritz, the famed partner at Sequoia, wrote in the Financial Times earlier this year that:

The large chain restaurants that operate pick-up locations will be insulated from many of these services, as will the high-end restaurants that offer memorable experiences. But the local trattoria, taqueria, curry shop and sushi bar will be pressed to stay in business.

Latent in these pieces (there are dozens of them published on the web) lies a superficial storyline that’s appealing to the bright but not detail-oriented: that there are high software margins (or ‘cloud’ margins if you will) to come from a world in which kitchen space is suddenly shareable, and that’s going to lead to a complete disruption of restaurants as we know them.

It’s the same sort of storyline that propelled WeWork to meteoric heights before eventually crashing the last few weeks back down to reality. As Jesse Hempel wrote in Wired a few years ago about the shareable office startup: “Over time, this could be a much bigger opportunity than coworking spaces, one in which everything WeWork has built so far will simply feed an algorithm that will design a perfectly efficient approach to office space.”

Clearly, the AI algorithm for office efficiency (“WeWork Brain”?) wasn’t as profitable as hoped, with WeWork expected to lay off 500 software engineers in the coming weeks.

And yet despite the seeming collapse of WeWork and the destruction of its narrative, we still haven’t learned our lesson. As Isaac and Yaffe-Bellany discuss in their NYT piece, “No longer must restaurateurs rent space for a dining room. All they need is a kitchen — or even just part of one.” Now I know what the two mean here, but let’s be uncharitable for a moment: you can’t rent a part of a kitchen. No one rents the stovetop and not the prep area.

But it is that quickly slippery logic that can cause an entire industry to rise and eventually crumble. Just as with the whole “WeWork should really be valued as a software company” meme, the term ‘cloud kitchens’ implies the flexibility (and I guess margins?) of data centers, when in reality, they couldn’t be further away in practice from them. Commercial kitchens require regulatory licenses and inspections, constant monitoring and maintenance, not to mention massive kitchen staffs (they aren’t automated kitchens!).

So let’s look at how margins and leverage play out for the different players. If you are the owner of one of these cloud kitchens, how exactly do you get any pricing leverage in the marketplace? Isaac and Yaffe-Bellany again write, “Diners who order from the apps may have no idea that the restaurant doesn’t physically exist.”

That sounds plausible, but if consumers don’t know where these restaurants physically are, what is stopping an owner from switching its kitchen to another ‘cloud’? In fact, why not just switch regularly and force a constant bidding war between different clouds? Unlike actual cloud infrastructure, where switching costs are often extremely prohibitive, the switching costs in kitchens seems rather minimal, perhaps as simple as packing up a box or two of ingredients and walking down the street.

That’s why we are seeing almost no innovation coming from early-stage startups in this space. Deliveroo, Uber Eats, DoorDash, Ola, and more — let alone Amazon — are hardly under-funded startups.

In fact, this supposed rise of the cloud kitchen gets at the real crux of the matter: the true ‘expense’ of restaurants isn’t rent or labor, but in fact is really marketing: how do you acquire and retain customers in one of the most competitive industries around?

Isaac and Yaffe-Bellany argue that restaurants will join these meal delivery platforms to market their foods. “…[T]hey can hang a shingle inside a meal-delivery app and market their food to the app’s customers, without the hassle and expense of hiring waiters or paying for furniture and tablecloths.”

Let me tell you from the world of media: relying on other platforms to own your customers on your behalf and wait for ‘traffic’ is a losing proposition, and one that I expect the vast majority of restaurant entrepreneurs to grok pretty quickly.

Instead, it’s the meal delivery companies themselves that will take advantage of this infrastructure, an admission that actually says something provocative about their business models: that they are essentially inter-changeable, and the only way to get margin leverage in the industry is to market and sell their own private-label brands.

For example, I get the same food delivered from the same restaurants regularly, but change the service based on which coupon is best this week (for me, that’s Uber Eats, which offered me $100 if I spent it by Friday). That inter-changeability makes it hard to build a durable, profitable business. Uber Eats, for instance, is expected to be unprofitable for another half decade or more, while GrubHub’s profit margins remain mired in the single digits.

The great hope for these companies is that cloud kitchens can fill the hole in the accounting math. Private brands drive large profits to grocery stores due to their higher margins, and the hope is that an Uber Burger or a DoorDash Pizza might do the same.

The question, of course, is whether consumers “just want food” or whether they specifically want the pad thai from that restaurant down the street they love because it is raining and they don’t want to walk to it. Food brands have a prodigiously long gestation period, since food choices are deeply personal and take time to shift. Just because these meal delivery platforms start offering a burger or a rice bowl doesn’t suddenly mean that consumers are going to flock to those options.

All of which takes us back to those misplaced investor expectations. Cloud kitchens is an interesting concept, and I have no doubt that we will see these sorts of business models for kitchens sprout up across urban cities as an option for some restaurant owners. I’m also sure that there will be at least one digital-only brand that becomes successful and is mentioned in every virtual restaurant article going forward as proof that this model is going to upend the restaurant industry.

But the reality is that none of the players here — not the cloud kitchen owners themselves, not the restaurant owners, and not the meal delivery platforms — are going to transform their margin structures with this approach. Cloud kitchens is just adding more competition to one of most competitive industries in the world, and that isn’t a path to leverage.

Amazon’s Echo gets a decent-sounding refresh

By Brian Heater

Amazon seemingly didn’t realize what it had on its hands with the original Echo. Released five and a half years back for a select number of Amazon Prime users, the first Alexa device ushered in a consumer electronics revolution.

According to numbers from Canalys, 26.1 million smart speakers were shipped in Q2 2019. That’s a hefty 55.4% growth from the year prior, with Amazon capturing just over a quarter of the total global market. Much of Amazon’s growth (up 61% y-o-y) is courtesy of its rapidly growing line, which now ranges from the $50 Echo Dot to the $200 Echo Studio.

At $100, the Echo sits right in the middle. And unlike Google, which has left the Home largely unchanged during its two-year existence, Amazon’s now on the third generation for its own base-level device.

The latest version of the device, announced at an Alexa event at Amazon HQ in Seattle earlier this month, ditches the swappable face gimmick of the previous generation. Instead, the company has focused on the speaker part of the smart speaker. It was something that was too often neglected by earlier devices, which were primarily viewed as a conduit for voice assistants.

amazon echo 2019

Of course, if someone is simply looking for a cheap and easy way to introduce a smart assistant into their home, they can pick up an Echo Dot or Nest Mini for a fraction of the price — or, for that matter, the $25 Echo Flex wall plug.

The new Echo slots pretty nicely between the Dot and Studio, Amazon’s new HomePod competitor. It’s probably not where you want to do all of your music listening, but it’s a nice addition to a desk at home or work, or a room like the kitchen where music listening is secondary. More importantly, software updates like stereo pairing with two Echo devices and multi-room music, paired with hardware add-ons like Echo Sub, Link and Input, have made the $99 product a potential addition to a larger, better sound system.

The third-generation Echo certainly marks an improvement sound-wise over earlier models. It offers decent 360 sound and surprisingly heavy bass, courtesy of a 3.0-inch woofer and 0.8-inch tweeter. There’s also a 3.5-inch audio jack for inputting or outputting sound. The setup is essentially the same as last year’s Echo Plus, only without the increasingly less important smart home hub functionality.

In fact, the device looks almost identical to the second-gen Echo Plus, leaving many wondering if the product is long for this world. I wouldn’t be surprised to see the company phase out the product entirely after selling through this batch during the holiday season.

amazon echo 2019

With four different colors, the Echo should fit in well with most surroundings. The rounded, fabric-covered model is a far cry from the early days of hard plastic. There is a prominent light ring up top to let you know when the Echo is listening, along with a quartet of buttons: volume up/down, microphone and the action button, which performs a variety of tasks, including firing up Alexa and turning off timers.

Maybe it’s the fact that I just reviewed the Nest Mini, but touch functionality would be a nice addition here. When you move your hand toward the speaker while it’s playing music, a pair of lights illuminate for volume. Tapping the middle of the device would play or pause music. It’s a simple but handy addition.

All in all, solid additions on the hardware front, coupled with the continued addition of things like selectable music services make for a solid upgrade to the company’s base smart speaker.

Amazon introduces a Kindle for kids

By Brian Heater

While it’s true that many parents are doing their best to reduce screen time as much as possible, there’s something to be said for the Kindle Kids Edition. The best and worst thing about the device are its limitations. It’s purpose built for reading, and that’s about it.

For that reason, the Kindle line makes a lot of sense to get the kid treatment. Kids can’t really play games or get into too much trouble on the E Ink display — not any more than they’d be able to get into that the local library, at least. The Dewey Decimal system is a gateway to all sorts of shenanigans.

From the looks of it, the Kindle Kids Edition is basically a repurposing of the standard Kindle — much as Amazon did with the Echo Dot. It’s got a six-inch, 167 PPI E Ink screen with a front light, coupled with the standard weeks-long battery. The color, drop-friendly case is included in the $200 price. As is one year of FreeTime Unlimited and a two-year warrantee. There also are a slew of different kid-friendly features, including activity badges, kid wallpaper and vocabulary building tools.

A few weeks after introducing a ridiculous number of new Echo devices, the company is revealing a bunch of new kid-focused products in addition to the new Kindle. There’s a new version of the Fire 10 Kids Edition, featuring 12 hours of battery and a USB-C port — the latter of which appears to a first for these Fire devices.

FreeTime, meanwhile, will also be arriving on Fire TV, first through the Fire TV Stick, followed by Fire TV Edition smart TVs. Echo Show devices are getting access to the app, as well.

Annual Extra Crunch members can receive $1,000 in AWS credits

By Travis Bernard

We’re excited to announce a new partnership with Amazon Web Services for annual members of Extra Crunch. Starting today, qualified annual members can receive $1,000 in AWS credits. You also must be a startup founder to claim this Extra Crunch community perk.

AWS is the premier service for your application hosting needs, and we want to make sure our community is well-resourced to build. We understand that hosting and infrastructure costs can be a major hurdle for tech startups, and we’re hoping that this offer will help better support your team.

What’s included in the perk:

  • $1,000 in AWS Promotional Credit valid for 1 year
  • 2 months of AWS Business Support
  • 80 credits for self-paced labs

Applications are processed in 7-10 days, once an application is received. Companies may not be eligible for AWS Promotional Credits if they previously received a similar or greater amount of credit. Companies may be eligible to be “topped up” to a higher credit amount if they previously received a lower credit.

In addition to the AWS community perk, Extra Crunch members also get access to how-tos and guides on company building, intelligence on what’s happening in the startup ecosystem, stories about founders and exits, transcripts from panels at TechCrunch events, discounts on TechCrunch events, no banner ads on TechCrunch.com and more. To see a full list of the types of articles you get with Extra Crunch, head here.

You can sign up for annual Extra Crunch membership here.

Once you are signed up, you’ll receive a welcome email with a link to the AWS offer. If you are already an annual Extra Crunch member, you will receive an email with the offer at some point today. If you are currently a monthly Extra Crunch subscriber and want to upgrade to annual in order to claim this deal, head over to the “my account” section on TechCrunch.com and click the “upgrade” button.

This is one of several new community perks we’ve been working on for Extra Crunch members. Extra Crunch members also get 20% off all TechCrunch event tickets (email extracrunch@techcrunch.com with the event name to receive a discount code for event tickets). You can learn more about our events lineup here. You also can read about our Brex community perk here.

As Sinai Ventures returns first fund, partner Jordan Fudge talks new LA focus

By Eric Peckham

At age 27, Jordan Fudge is quietly making a splash in the VC world.

Fudge is the managing partner of Sinai Ventures, a multi-stage VC fund that manages $100 million and has more than 80 portfolio companies including Ro, Drivetime, Kapwing, and Luminary. His 2017 investment in Pinterest — a secondary shares deal from his prior firm that was rolled into Sinai when he spun out — will have returned the value of Sinai’s Fund I by itself once the lockup on shares expires next week.

Fudge and co-founder Eric Reiner, a Northwestern University classmate, hired staff in New York and San Francisco when Sinai launched in early 2018. Today, they’re centralizing the team in Los Angeles for its next fund, a bet on the rising momentum of the local startup ecosystem and their vision to be the city’s leading Series A and B firm.

Fudge and Reiner have intentionally stayed off the radar thus far, wanting to prove themselves first through a track record of investments.

Kwaku EDITS V2

Jordan Fudge. Image via Sinai Ventures

A part-time film financier who also serves on the board of LGBT advocacy non-profit GLAAD, Fudge describes himself as an atypical VC firm founder, an edge he’s using to carve out his niche in a crowded VC landscape.

I spoke with Fudge to learn more about his strategy at Sinai and what led to him founding the firm. Here’s the transcript (edited for length and clarity):

Eric Peckham: Tell me the origin story here. How did Sinai Ventures get seeded?

Jordan Fudge: I was working for Eagle Advisors, a multi-billion dollar family office for one of the founders of SAP, focused on the tech sector across public markets, crypto, and eventually VC deals. Two years in, I pitched them on spinning out to focus on VC and they seeded Sinai with the private investments like Compass and Pinterest I had done already, plus a fresh fund to invest out of on my own. It was $100 million combined.

Amazon’s Prime Video app disappears from the App Store [Updated]

By Sarah Perez

In what we understand was a “technical issue”, the Amazon Prime Video app disappeared from the Apple App Store, making it unavailable for new downloads or updates to users both on iOS and Apple TV. Twitter users began to tweet to Amazon for help about the problem on Friday morning, to which Amazon’s support channels have yet to reply.

[Update: we’ve learned the issue is technical in nature, but we have no further information as to the details. The app should be back shortly.]

The app’s disappearance was earlier reported by AppleInsider, iMore and others.

The most likely reason for the app’s removal is a technical one — an issue with the update could have caused it to be temporarily pulled, perhaps.

What’s not likely is that Amazon Prime Video is gone for good.

The company just released an X-Ray upgrade to the app across platforms, including iOS, allowing users to get more information about what they’re streaming, including Amazon’s run of Thursday Night Football games.

Nor is it likely that Apple has for some reason booted out Prime Video, given the anti-competitive nature of such a move (Apple TV+ is soon to launch), at a time when the tech giants are under increased regulatory scrutiny.

Not just you – https://t.co/DTgGRZwsUc

— Jared DiPane (@jareddipane) October 4, 2019

Was ist da los? Amazon Prime Video wurde aus dem App Store entfernt? pic.twitter.com/w6urAq7X70

— Pino (@madphone) October 4, 2019

The amazon prime video app is gone from the App Store? 🤔@PrimeVideo pic.twitter.com/wtiyIBCI3u

— Adrian (@emoflipsan) October 4, 2019

@PrimeVideo is it just me or is the Amazon Prime Video app gone from the Apple App Store??

— Gary Schafer (@GaryLSchafer) October 4, 2019

Does the Amazon Prime Video app not exist on the App Store anymore?

— Swapnanil Dhol (@SwapnanilDhol) October 4, 2019

Whaaat!!! Amazon Prime Video App removed pic.twitter.com/ayxtrGAHuz

— Jesús Cruz (@jesusmisanador) October 4, 2019

Amazon video is no longer in App Store @amazon @PrimeVideo pic.twitter.com/JuY3s9Ygs0

— Ahmad Najim Noori (@Ah_najeem_noori) October 4, 2019

The issue isn’t only impacting users in the U.S., nor is it limited to iPhone, as Apple TV is also affected.

According to data from app store intelligence firm Sensor Tower, the app was removed today in all regions except Australia, Guatemala, Hong Kong, Hungary, Israel, India, Kenya, Kuwait, Lithuania, Luxembourg, Madagascar and Saudi Arabia.

Amazon has not responded publicly to users asking for help.

TechCrunch has also reached out to Amazon for comment and will update when we hear back.

Google-backed Dunzo raises $45M to expand its hyperlocal delivery startup in India

By Manish Singh

An Indian startup that is increasingly posing a threat to established food and grocery delivery businesses and e-commerce giants just closed a new financing round to expand its business in the nation.

Bangalore-based Dunzo said today it has raised $45 million from Google, Lightbox Ventures, STIC Investment and STIC Ventures, and 3L Capital in a new financing round. The round, dubbed Series D, valued the startup at about $200 million, three people familiar with the matter told TechCrunch. The startup has raised $81 million to date.

Dunzo, a four-year-old startup, operates an eponymous hyper-local delivery service. Users get access to a wide-range of items across several categories, from grocery, perishables, pet supplies and medicines to dinner from their neighborhood stores and restaurants.

But that’s not all. You can have Dunzo pick up and deliver anything within a city. Forgot your laptop charger at home? Dunzo will bring it to your office. Part of the service’s charm is that its delivery is fast (most of its deliveries take less than 25 minutes), and as long as the store is not very far away, it’s not going to cost you more than a $1.

Dunzo is currently operational in eight Indian cities: Bangalore, Delhi, Noida, Pune, Gurgaon, Powai, Hyderabad and Chennai. The startup said it will use the fresh capital to expand its technology infrastructure and develop partnerships with small and medium businesses to “give them a fighting chance” to compete with major giants.

E-commerce accounts for less than 3% of all retail sales in India, according to industry estimates. Mom and pop stores and other neighborhood outlets that dot tens of thousands of cities, towns, villages and slums across the country drive most of the sales in the nation. Dunzo joins a growing number of startups in India that are attempting to help small and micro merchants embrace technology for the first time to grow their businesses.

“We are on course to building the largest commerce platform in the country with the most efficient logistics solution for each city,” said Kabeer Biswas, co-founder and CEO of Dunzo, said.

dunzo hq techcrunch

As the service scales, it is increasingly becoming a competitor to food and grocery delivery startups such as BigBasket, Swiggy and Zomato. Dunzo founders told TechCrunch that food category already accounts for a quarter of all deliveries it processes.

In recent months, Dunzo has also started to test delivery of smartphones and other products. It recently tied up with Xiaomi to deliver smartphones to users in select parts of India. Unlike Amazon or Flipkart that take a day or two to deliver a phone, Dunzo was getting the new phones to users in 30 minutes. Dunzo has tested a similar partnership with Puma, executives told TechCrunch.

Jayanth Kolla, founder and analyst at research firm Convergence Catalyst, told TechCrunch that by getting a new phone to users in half an hour, Dunzo is able to “offer the instant gratification” — something that plays a crucial role in a person’s purchasing decision — that e-commerce platforms in India can’t match today.

But Dunzo remains tiny in comparison to the giants whose businesses it is beginning to disrupt. Today, the startup processes about 2 million orders a month, up from about 50,000 early last year. Swiggy and Zomato, in comparison, process more than 3 million orders a day, for instance. And they are also heavily backed.

In an interesting turn of events, last month Swiggy announced Go, a service that allows users in select cities in India to deliver any kind of item — not just food — within their own city, thereby entering Dunzo’s territory. While Swiggy moves beyond food delivery, Zomato is increasingly trying to assume more control over the ins and outs of the food business.

The 11-year-old firm is working on something it internally calls Project Kisan to procure supplies directly from farmers and fishermen, TechCrunch reported earlier. The company has already set up warehouses to store these supplies in many parts of the country, including South Delhi and Pune.

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