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Is Zoom the next Android or the next BlackBerry?

By Walter Thompson
Gaurav Jain Contributor
Gaurav Jain is one of the founders of Afore Capital, a $47 million fund focused on pre-seed. He was also an early product manager for Android.

In business, there’s nothing so valuable as having the right product at the right time. Just ask Zoom, the hot cloud-based video conferencing platform experiencing explosive growth thanks to its sudden relevance in the age of sheltering in place.

Having worked at BlackBerry in its heyday in the early 2000s, I see a lot of parallels to what Zoom is going through right now. As Zooming into a video meeting or a classroom is today, so too was pulling out your BlackBerry to fire off an email or check your stocks circa 2002. Like Zoom, the company then known as Research in Motion had the right product for enterprise users that increasingly wanted to do business on the go.

Of course, BlackBerry’s story didn’t have a happy ending.

From 1999 to 2007, BlackBerry seemed totally unstoppable. But then Steve Jobs announced the iPhone, Google launched Android and all of the chinks in the BlackBerry armor started coming undone, one by one. How can Zoom avoid the same fate?

As someone who was at both BlackBerry and Android during their heydays, my biggest takeaway is that product experience trumps everything else. It’s more important than security (an issue Zoom is getting blasted about right now), what CIOs want, your user install base and the larger brand identity.

When the iPhone was released, many people within BlackBerry rightly pointed out that we had a technical leg up on Apple in many areas important to business and enterprise users (not to mention the physical keyboard for quickly cranking out emails)… but how much did that advantage matter in the end? If there is serious market pull, the rest eventually gets figured out… a lesson I learned from my time at BlackBerry that I was lucky enough to be able to immediately apply when I joined Google to work on Android.

The coronavirus has hastened the post-human era

By Walter Thompson
Mario Gabriele Contributor
Mario Gabriele is an investor at Charge and the editor of The Generalist.

In the mid-1970s, Professor Fereidoun M. Esfandiary decided to change his name. From then on he would be legally called “FM-2030.”

“Conventional names define a person’s past: ancestry, ethnicity, nationality, religion. I am not who I was ten years ago … The name 2030 reflects my conviction that the years around 2030 will be a magical time. In 2030 we will be ageless and everyone will have an excellent chance to live forever. 2030 is a dream and a goal,” he offered in explanation.

It didn’t hurt that by 2030 he would be 100 years old, an age he was sure he would reach.

Already in his forty-odd years of living, FM — which some speculated stood for “Future Man” — defied easy categorization. The son of an Iranian diplomat, he’d lived in 17 countries by the age of 11 and would go on to represent his country’s basketball team at the 1948 Olympic Games before beginning an academic career. He was educated at Berkeley and UCLA, later becoming one of the first professors of futurology at the New School. It was there that he would begin to espouse his “new concepts of the human,” discussing the steps necessary to transition to the age of post-humanity. FM described this as an epoch in which Homo sapiens became “post-biological organisms,” transcending the limits of their body through technology.

 

Much of the 21st century has seen us hurtle toward a post-human future, fulfilling predictions FM made half a century earlier. Over the course of his career, he foresaw the creation of 3D printers — which he referred to as “Santa Claus machines” — along with the advent of telemedicine, teleconferencing, teleshopping and genetic editing.

Though that suggests the process of post-humanization is well under way, we may look back on 2020 and the coronavirus crisis as a crossing over. A time in which our relationship to core aspects of our humanity is fundamentally remade. In particular, I believe we are seeing meaningful recalibrations of our relationship to identity, labor, health and love. In short, the post-human era is beginning in earnest.

Identity

The shift to a locked-in world has accelerated the acceptance of identity as distinct from physical body or place. We still want to communicate, socialize and play during this time, but have only a digital version to offer. Those constraints are forcing new expressions of selfhood, from the Zoom background used to express a personal interest or make a joke, to the avatars roaming rich, interactive metaverses. Nintendo has seen millions turn to Animal Crossing to socialize, trade virtual assets and host both weddings and conferences, while Travis Scott’s surreal performance inside of Fortnite attracted 12.3 million concurrent views, and 27.7 million unique attendees. We are showcasing even the darker aspects of our nature via these platforms, with some on Animal Crossing bullying and torturing villagers they deem “ugly.”

Tools like Pragli illustrate how this development manifests in the workplace beyond Zoom backgrounds ripped from “Tiger King” or “Love Is Blind.” Rather than hopping onto a video call with co-workers, Pragli offers the ability to connect with anime-style avatars of your officemates. Changing one’s appearance on the platform is determined by the options the company rolls out, with a recent update showcasing the ability for men to sport a bun, braid or ponytail. Set “happy” or “sad” expressions blur the lines between real and performative feelings.

All of this is in stark contrast to the masked, distant, de-individuated person we show outside our homes, something a little less than human. There are indications that this redacted version of ourselves is becoming something of a style. G95’s “biohoodie” features a built-in face-cover, while creative studio Production Club showed off a hazmat suit designed for socializing. Even once the worst is over, we may see a new cautiousness and implied distance expressed in fashion.

Labor

“Work gives you meaning and purpose and life is empty without it,” said Stephen Hawking. Whether that is an assessment you agree with, much of our conception of ourselves is tied up in our labor. COVID-19 is accelerating a shift away from humans and toward machines, doing so at a time in which we may actually feel grateful for cyborg usurpers as they keep critical services running and spare us from disease. Neolix, a Chinese manufacturer of driverless vans, has seen a spike in demand since the outbreak and has been trusted to ferry food and medical supplies, and to disinfect streets. Suppliers like AMP, UVD, Nuro and Starship have experienced a similar surge, while the order books of industrial behemoths like Harmonic Drive and Fanuc suggest more universal demand. The latter saw orders increase 7% between Q4 and March.

This insinuation is not limited to manual labor. With customer support and moderation offices closing down, many companies are aggressively employing AI solutions. Facebook and Google have expanded automated moderation, while PayPal used chatbots for 65% of customer inquiries in recent weeks, a record for the firm.

Those lucky enough to retain their jobs may face a very different work environment in which they are forced to collaborate with robots and be treated as an increasingly mechanized system themselves. Walmart greeters will stand side-by-side with automated floor-scrubbers, and McDonald’s cooks may soon be joined by a kitchen full of bionic sous-chefs. Amazon warehouse workers — old-hands at human-robot collaboration thanks to the company’s acquisition of Kiva Systems — must adapt to being managed more like their pallet-ferrying co-workers, with temperatures monitored by thermal cameras. That is just a small part of the broader surveillance blitz being undertaken around the world and across industries. China is installing more cameras to monitor the comings-and-goings of citizens, while companies dip into budgets to purchase “tattleware,” software designed to surveil employees. Among the beneficiaries are companies like InterGuard, which provide minute-by-minute breakdowns of how workers spend time online. Sneek takes photos of workers as often as once a minute. The company’s CEO joked that the “sneeksnap” command came in particularly handy when a colleague did something embarrassing like picking their nose.

Health

Much of our waking life is filled with health-related ruminations. As we become more aware of our vulnerabilities, we are turning to technologies to extend corporeal limitations, treating our bodies more like software with which we can experiment. Consumers are turning to immunity-boosting supplements such as Vitamin C and zinc, which have soared in sales, in addition to courting riskier treatments like “rectal ozone insufflations,” peddled by influencers. Spurred on by world-leaders like Trump and Brazilian president Jair Bolsonaro, demand for hydroxychloroquine has grown rapidly, with prescriptions increasing ~500%.

Whatever your opinion of the president or the treatment in question, this represents a rapid, iterative model of medicine more akin to the Silicon Valley mantra of “move fast and break things” than a considered FDA approval process. Biohacking communities, a group with high-tolerance for health-related risks, are teaming up online to research COVID-19 vaccines on their own time. “Biohacking used to be a fringe space, but I think this is becoming a kind of breakout moment for things like DIY biology and community labs and hackerspaces,” one contributor noted.

Beyond immediate experimentation, we are looking to extend the limits of our bodies in order to accommodate changing plans for the future. Reports suggest that men have turned to at-home sperm collection companies like Legacy during quarantine, motivated by fears of diminished fertility and perhaps the acknowledgment that with life on hold, children may have to wait. That certainly seems to be the case for 1,894 women surveyed by Modern Fertility and SoFi: 31% noted that the pandemic had affected their fertility plans, while 41% stated they are delaying childbearing because of the coronavirus.

Love

“The trouble is not that I am single and likely to stay single,” novelist Charlotte Brontë once wrote, “but that I am lonely and likely to stay lonely.”

The current state of affairs does not offer many ways to amend that state of misery, prompting some to turn to AI companions. Created in 2015, Replika provides a sympathetic texting partner, designed to serve as a digital therapist. But for many of the company’s 500K monthly active users, Replika is too charming to resist: up to 40% consider the bot a romantic partner. The coronavirus may serve as the ideal catalyst for relationships between humans and artificial personalities to deepen. There are signs we may already prefer their company: research on Microsoft’s XiaoIce indicated that conversations with the chatbot last longer than human-to-human interactions.

For those committed to finding love among creatures of blood and bone, the pandemic has forced a recalibration of what it means to date. Interactions take place almost entirely online, through chat or video calls, changing the necessary criteria for a match. Location matters much less now than availability and responsiveness. When the desire for touch, or “skin hunger” as it is gruesomely called, becomes too much to bear, interested parties must navigate a meeting. In the process, we treat partners as potential threats, owners of a corpus that may endanger us, despite best intentions. In doing so, we view the individual as distinct from their body, a separate being in possession of a liability with which we must negotiate. Depending on the length of the pandemic, we may see this fear harden into an unconscious aversion, reviving the disgust for the corporeal felt by more puritanical eras. These mores may take time to correct.

The self, as we know it, is being decimated. That may not be a bad thing. As identity moves online, as work is stripped from us, as our physical bodies are optimized like an OS, as love sheds its carnality, new opportunities will emerge. Humans will find meaning in new modes of self-expression, discover purpose beyond work (or reclassify what work means), reengineer physical limits as “biology eats the world” and find affection in new beings. We are undergoing a period of Schumpeterian “creative destruction,” felt at the anthropological rather than industrial level. Great things may come of it.

For FM-2030, the future was something at which to marvel, where “people will belong to no specific families or factions … we will free-flow across the planet and beyond. Highly individual yet universal.” Though the changes wrought by the coronavirus appear bleak, some of FM’s vision feels true: We are united as a world, fighting against a common enemy, more connected than ever before. Perhaps, in time, the rest of FM’s dream will be made manifest.

For all of his prescience, however, FM-2030 got one prediction very wrong. He did not make his 100th birthday, dying of pancreatic cancer in 2000. He was just 69. If he has his way though, he may still have a role to play in the creation of the future. Though dead, FM’s body remains frozen in a state of cryonic suspension in Scottsdale, Ariz. Perhaps he is waiting for the world to catch up.

Should SaaS founders be raising capital now?

By Walter Thompson
Roger Hurwitz Contributor
Roger Hurwitz is a founding partner at Volition Capital. He focuses primarily on investments in software and technology-enabled business services.
More posts by this contributor

COVID-19 quickly put the stock market in the ICU, with signs of unprecedented volatility and declines. However, the market’s resilience and swift action by the Fed made this downward spiral short-lived. The Russell 2000 Index, a benchmark for small-cap stocks, is one of several indices that highlights this.

Within a one-month period from late February into March, The Russell 2000 Index was down more than 40%, signaling the end of a long bull market and entrance into bear territory. Yet, two months later, at the end of May, the Index is up over 35% from its low. In the private market, the impact of volatility on healthy, pre-COVID-19 software company valuations is much easier to track. As SaaS founders consider their financing options, the picture might be a bit less glum than they might imagine.

Still going strong

Changes to private market valuations often lag behind what transpires in the public markets. Also, fundraising cycles for private companies generally take 2-3 months from start to close. Unlike the 2000 dot-com crash and the 2008 Great Recession, where valuations dropped for extended periods of time, private company valuations, for the most part, have not had time to adjust for the volatility seen in the public markets.

Partners at B2B European VC henQ discuss remote work’s biggest advantages

By Steve O'Hear

HenQ, an Amsterdam-based VC that invests in European B2B software startups typically at seed and Series A, recently disclosed the first close of its fourth fund at €70 million. The final close is expected to top out at between €75-€85 million later this year, and the firm has already begun backing companies out of the new fund.

However, what sets henQ apart from many VC firms isn’t just its pure focus on B2B software but that its team is fully remote. Primarily investing in the Nordics and Benelux, henQ doesn’t have any official offices, with the team working from different temporary locations. Even before the coronavirus pandemic, henQ closed deals remotely.

Successes from its previous funds include Mendix (acquired by Siemens) and SEOshop (acquired by Lightspeed).

I spoke to partners Jan Andriessen, Mick Mackaay and Jelmer de Jong to learn more about henQ, what it’s like to be a fully remote VC and how the firm envisions the post-pandemic era.

TechCrunch: Can you be more specific regarding the size of check you write and the types of companies, geographies, technologies and business models you are focusing on?

Jan Andriessen: Our main focus is seed rounds, in which we often are the lead investor. We also invest in Series A rounds, often as a co-investor. Initial check sizes vary from €500,000 to €3.5 million.

A typical seed investment has a product and perhaps a few pilot customers. The key here is not revenue (which is OK to be zero), but there is proof of the actual need for the product.

Most of our recent deals were in the Nordics and Benelux, the areas where we spent the majority of our time. But we have also invested in the Baltics, Czech Republic and the UK. For henQ 4, we expect this to be the same: the bulk of our investments will be in the Nordics and Benelux, with an occasional deal in broader Europe.

In terms of technology and business trends, one of the things we firmly believe in is the consumerization of enterprise software: successful startups are centered around their customers and focus on the job to be done. More generally, we have always been focused on startups with staying power: companies that have a right to exist over time, not just now, as they deliver a product that touches the core processes of their customers and operate at the heart of their customer’s business.

For example, looking at our portfolio, Zivver delivers secure communication solutions for hospitals and governments. Stravito works deep in the research departments of FMCGs, delivering a knowledge management platform. Mews runs the full operations of hotels with their property management system, and Orderchamp enables retailers to digitize their buying process.

We see the business model of a company as a means, not an end. Most of the startups we invest in charge a SaaS plus implementation fee, and have a more enterprise-sales driven business model. We are not afraid to invest in startups that have a more complex and longer sales cycle, and are not per se looking for SaaS ‘by-the-book.'

Global smartphone sales plummeted 20% in Q1, thanks to COVID-19

By Brian Heater

More dismal numbers confirm what we already knew: Q1 2020 was real rough for an already struggling smartphone category. Gartner’s latest report puts the global market at a 20.2% slide versus the same time last year, thanks in large part to fallout from the COVID-19 pandemic.

Every single one of the global top-five manufactures saw large declines for the quarter, save for Xiaomi, which saw a slight uptick of 1.4%. The Chinese handset maker got a surprise bump, courtesy of international sales. Samsung and Huawei and Oppo all saw double-digit drop-offs at 22.7%, 27.3% and 19.1%, while Apple declined 8.2%. Other companies combined for a sizable 24.2% loss for Q1.

The reasons are ones we’ve gone over several times before, nearly all pertaining to the global pandemic. Chief among them are global stay at home orders and general economic uncertainly. Issues with the global supply chain have no doubt been a factor, as well, as Asia was the first to get hit with the virus.

All of this comes in addition to an already plateauing/declining smartphone market. Analysts had expected that the arrival of 5G would help stem the tide a bit — but, well, some stuff happened in there. Notably, Apple’s slide wasn’t as bad as it might have been thanks to a strong start to the year.

“If COVID-19 did not happen, the vendor would have likely seen its iPhone sales reached record level in the quarter. Supply chain disruptions and declining consumer spending put a halt to this positive trend in February,” Gartner’s Annette Zimmermann said in a release. “Apple’s ability to serve clients via its online stores and its production returning to near normal levels at the end of March helped recover some of the early positive momentum.”

Overall, I suspect that recovery won’t be instantaneous for the market. The future of COVID-19 still feels largely uncertain as countries have begun the process of reopening, and a pricey investment still may not be in the cards for many who are struggling to make ends meet. 

India rejects Walmart-owned Flipkart’s proposed foray into food retail business

By Manish Singh

The Indian government has rejected Flipkart’s proposal to enter the food retail business in a setback for Walmart, which owns a majority of the Indian e-commerce firm and which recently counted its business in Asia’s third-largest economy as one of the worst impacted by the global coronavirus pandemic.

The Department for Promotion of Industry and Internal Trade (DPIIT), a wing of the nation’s Ministry of Commerce and Industry, told Flipkart, which competes with Amazon India, that its proposed plan to enter the food retail business does not comply with regulatory guidelines — though it did not elaborate, according to a person familiar with the matter.

Rajneesh Kumar, chief corporate affairs officer at Flipkart, told TechCrunch that the company was evaluating the agency’s response and intended to re-apply.

“At Flipkart, we believe that a technology and innovation-driven marketplace can add significant value to our country’s farmers and food processing sector by bringing value-chain efficiency and transparency. This will further aid boosting farmers’ income and transform Indian agriculture,” he added.

While announcing the plan to enter the nation’s growing food retail market, Kalyan Krishnamurthy, Flipkart Group CEO, said in October last year that the company planned to invest $258 million in the new venture.

Flipkart planned to invest deeply in the local agriculture-ecosystem and supply chain, and work with tens of thousands of small farmers, their associations and the nation’s food processing industry, Krishnamurthy said. The food retail unit would help “multiply farmers’ income and bring affordable, quality food for millions of customers across the country.”

Several e-commerce and grocery firms in India, including Amazon, Zomato and Grofers, have previously secured approval from New Delhi, which currently permits 100% foreign direct investment in food retail, for entering the food retail business.

A Flipkart executive, who did not want to be identified, said they were “at a loss of words” to assess on what ground their application was rejected.

Food and grocery are compelling categories for e-commerce businesses in India as it enables them to engage with their customers more frequently. According to research firm Forrester, India’s online food and grocery market remain significantly tiny, accounting for just 1% of the overall sales.

In the most recent quarterly earnings call, Walmart said limited operations at Flipkart had negatively affected the group’s overall growth. New Delhi announced one of the world’s most stringent lockdowns across the nation in late March that restricted Amazon and Flipkart from delivering in many states and only sell “essential items,” such as grocery and hygienic products.

India maintains the stay-at-home orders for its 1.3 billion citizens, though it has eased some restrictions in recent weeks to resuscitate the economy.

Correction: An earlier version of the story said that India had revisited its guideline surrounding foreign direct investment for food retail business. That’s not the case.

Before yesterdayYour RSS feeds

6 VCs share their bets on the future of work

By Megan Rose Dickey

As tech companies like Twitter and Facebook gear up for longer-term remote work solutions, the future of work is becoming one of the more exciting opportunities in venture capital, Charles River Ventures general partner Saar Gur told TechCrunch.

And as loneliness mounts with shelter-in-place orders implemented in various forms across the world, investors are looking for products and services that foster true connection among a distributed workforce, as well as a distributed society.

But the future of work doesn’t just entail spinning up home offices. It also involves gig workers, freelancers, hiring tools, tools for workplace organizing and automation. The last couple of years have particularly brought tech organizing to the forefront. Whether it was the Google walkout in 2018 or gig workers’ ongoing actions against companies like Uber, Lyft and Instacart for better pay and protections, there are many opportunities to help workers better organize and achieve their goals.

Below, we’ve gathered insights from:

Saar Gur, Charles River Ventures 

What are you most excited about in the future of work?

Future of work is one of the most exciting opportunities in venture.  

Pre-COVID, few tech companies were fully remote. While it seems obvious in retrospect, the building blocks for fully remote technology companies now exist (e.g. high-speed internet, SaaS and the cloud, reliable video streaming, real-time documents, etc.). And while SIP may be temporary, we feel the TAM of fully remote companies will grow significantly and produce a number of exciting investment opportunities.

I don’t think we have fully grokked what it means to run a company digitally. Today, most processes like interviewing, meetings and performance/activity tracking still live in the world of atoms versus bits. As an example, imagine every meeting is recorded, transcribed and searchable — how would that transform how we work?   

There is an opportunity to re-imagine how we work. And we are excited about products that solve meaningful problems in the areas of productivity, brainstorming, communication tools, workflows and more. We also see a lot of potential in infrastructure required to facilitate remote and global teams.

We are also excited by companies that are enabling new types of work. Companies like Etsy (founded 2005), Shopify (2004), TaskTabbit (2008), Uber (2009), DoorDash (2013) and Patreon (2013) have helped create a new workforce of entrepreneurs. But many of these companies are over a decade old and we fully expect a new wave of companies that give more power to the individual.

This Week in Apps: Facebook launches trio of app experiments, TikTok gets spammed, plus coronavirus impacts on app economy

By Sarah Perez

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 is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three 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 to look at how the coronavirus outbreak is impacting the world of mobile applications, with fresh data from App Annie about trends playing out across app categories benefiting from the pandemic, lockdowns and societal changes. We’re also keeping up with the COVID-19 contact-tracing apps making headlines, and delving into the week’s other news.

We saw a few notable new apps launch this week, including HBO’s new streaming service HBO Max, plus three new app experiments from Facebook’s R&D group. Android Studio 4.0 also launched this week. Instagram is getting better AR tools and IGTV is getting ads. TikTok got spammed in India.

Meanwhile, what is going on with app review? A shady app rises to the top of the iPhone App Store. Google cracks down on conspiracy theory-spreading apps. And a TikTok clone uses a pyramid scheme-powered invite system to rise up the charts.

COVID-19 contact-tracing apps in the news 

  • Latvia: Reuters this week reported that Latvia aims to become one of the first countries to launch a smartphone app, Stop Covid, using the new toolkit created by Apple and Alphabet’s Google to help trace coronavirus infections.
  • Australia: The role of the country’s Covidsafe app in the recovery appears to be marginal, The Guardian reports. In the month since its launch, only one person has been reported to have been identified using data from it. A survey even found that Australians were more supportive of using telecommunications metadata to track close contacts (79%) than they were of downloading an app (69.8%). In a second survey, their support for the app dropped to 64%. The app has been maligned by the public debate over it and technical issues.
  • France: The country’s data protection watchdog, CNIL, reviewed its contact-tracing app StopCovid, finding there were no major issues with the technical implementation and legal framework around StopCovid, with some caveats. France isn’t using Google and Apple’s contact-tracing API, but instead uses a controversial centralized contact-tracing protocol called ROBERT. This relies on a central server to assign a permanent ID and generate ephemeral IDs attached to this permanent ID. CNIL says the app will eventually be open-sourced and it will create a bug bounty. On Wednesday, the app passed its first vote in favor of its release.
  • Qatar: Serious security vulnerabilities in Qatar’s mandatory contact-tracing app were uncovered by Amnesty International. An investigation by Amnesty’s Security Lab discovered a critical weakness in the configuration of Qatar’s EHTERAZ contact-tracing app. Now fixed, the vulnerability would have allowed cyberattackers to access highly sensitive personal information, including the name, national ID, health status and location data of more than one million users.
  • India: India’s contact-tracing app, Aarogya Setu, is going open-source, according to Ministry of Electronics and Information Technology Secretary Ajay Prakash Sawhney on Tuesday. The code is being published on GitHub. Nearly 98% of the app’s more than 114 million users are on Android. The government will also offer a cash bounty of $1,325 to security experts who find bugs or vulnerabilities.
  • Switzerland: Several thousand people are now testing a pilot version of Switzerland’s contact-tracing app, SwissCovid. Like Lativia, the app is one of the first to use Apple and Google’s contact-tracing API. Employees at EPFL, ETH Zurich, the Army and select hospitals and government agencies will be the first to test the Swiss app before its public launch planned for mid-June.
  • China: China’s health-tracking QR codes, embedded in popular WeChat and Alipay smartphone apps, are raising privacy concerns, Reuters reports. To walk around freely, people must have a green rating. They also now have to present their health QR codes to gain entry into restaurants, parks and other venues. These efforts have been met with little resistance. But the eastern city of Hangzhou has since proposed that users are given a color-coded health badge based on their medical records and lifestyle habits, including how much they exercised, their eating and drinking habits, whether they smoked and how much they slept the night before. This suggestion set off a storm of criticism on China’s Weibo, a Twitter-like platform.

4 views on the future of retail and the shopping experience

By Natasha Mascarenhas

The global spread of COVID-19 and resulting orders to shelter in place have hit retailers hard.

As the pandemic drags on, temporary halts are becoming permanent closures, whether it’s the coffee shop next door, a historic bar or a well-known lifestyle brand.

But while the present is largely bleak, preparing for the future has retailers adopting technologies faster than ever. Their resilience and innovation means retail will look and fee different when the world reopens.

We gathered four views on the future of retail from the TechCrunch team:

  • Natasha Mascarenhas says retailers will need to find new ways to sell aspirational products — and what was once cringe-worthy might now be considered innovative.
  • Devin Coldewey sees businesses adopting a slew of creative digital services to prepare for the future and empower them without Amazon’s platform.
  • Greg Kumparak thinks the delivery and curbside pickup trends will move from pandemic-essentials to everyday occurrences. He thinks that retailers will need to find new ways to appeal to consumers in a “shopping-by-proxy” world.
  • Lucas Matney views a revitalized interest in technology around the checkout process, as retailers look for ways to make the purchasing experience more seamless (and less high-touch).

Alexa, how do I look?

Natasha Mascarenhas

The best investment every digital brand can make during the COVID-19 pandemic

By Walter Thompson
Steve Tan Contributor
Steve Tan is a Singapore-based serial entrepreneur and full-stack digital marketer with over 14 years of hands-on experience who is also the CEO and founder of Super Tan Brothers Pte. Ltd, which operates e-commerce, software, logistics, marketing, educational and investment companies around the globe.

Intuitively, stores that sell online should be making a killing during the COVID-19 pandemic. After all, everyone is stuck at home — and understandably more willing to shop online instead of at a traditional retailer to avoid putting themselves and others at medical risk. But the truth is, most smaller online stores have seen better days.

The primary challenge is that smaller shops often don’t have the logistics networks that companies like Amazon do. Consequently, they’re seeing substantially delayed delivery timelines, especially if they ship internationally. Customers obviously aren’t thrilled about that reality. And in many cases, they’re requesting refunds at a staggering rate.

I saw this play out firsthand in April. At that point, my stores were down 20% or in some cases even 30% in revenue. Needless to say, my team was freaking out. But there’s one thing we did that helped us increase our revenue over 200% since the pandemic, decrease refund requests and even strengthen our existing customer relationships.

We implemented a 24-hour live chat in all of our stores. Here’s why it worked for us and why every digital brand should be doing it too.

Avoid the common ‘unreachability’ frustration

When I started my first online store in 2006, challenges that bogged my team down often meant that my team’s first priority became resolving those challenges so that we could serve our customers faster. But admittedly, when these challenges came up, it became more difficult to balance communicating with our customers and resolving the issues that prevented us from fulfilling their orders quickly.

TinyML is giving hardware new life

By Walter Thompson
Adam Benzion Contributor
A serial entrepreneur, writer, and tech investor, Adam Benzion is the co-founder of Hackster.io, the world's largest community for hardware developers.

Aluminum and iconography are no longer enough for a product to get noticed in the marketplace. Today, great products need to be useful and deliver an almost magical experience, something that becomes an extension of life. Tiny Machine Learning (TinyML) is the latest embedded software technology that moves hardware into that almost magical realm, where machines can automatically learn and grow through use, like a primitive human brain.

Until now building machine learning (ML) algorithms for hardware meant complex mathematical modes based on sample data, known as “training data,” in order to make predictions or decisions without being explicitly programmed to do so. And if this sounds complex and expensive to build, it is. On top of that, traditionally ML-related tasks were translated to the cloud, creating latency, consuming scarce power and putting machines at the mercy of connection speeds. Combined, these constraints made computing at the edge slower, more expensive and less predictable.

But thanks to recent advances, companies are turning to TinyML as the latest trend in building product intelligence. Arduino, the company best known for open-source hardware is making TinyML available for millions of developers. Together with Edge Impulse, they are turning the ubiquitous Arduino board into a powerful embedded ML platform, like the Arduino Nano 33 BLE Sense and other 32-bit boards. With this partnership you can run powerful learning models based on artificial neural networks (ANN) reaching and sampling tiny sensors along with low-powered microcontrollers.

Over the past year great strides were made in making deep learning models smaller, faster and runnable on embedded hardware through projects like TensorFlow Lite for Microcontrollers, uTensor and Arm’s CMSIS-NN. But building a quality dataset, extracting the right features, training and deploying these models is still complicated. TinyML was the missing link between edge hardware and device intelligence now coming to fruition.

Tiny devices with not-so-tiny brains

How startups can leverage elastic services for cost optimization

By Walter Thompson
Joey Lei Contributor
Joey Lei is director of service management at Synoptek, a global systems integrator and managed services provider. Prior to joining Synoptek, he was a lead product manager for Dell EMC’s Data Protection Division and was a founding product manager for Dell EMC PowerProtect Data Manager, Dell EMC’s newest generation data protection and data management solution.

Due to COVID-19, business continuity has been put to the test for many companies in the manufacturing, agriculture, transport, hospitality, energy and retail sectors. Cost reduction is the primary focus of companies in these sectors due to massive losses in revenue caused by this pandemic. The other side of the crisis is, however, significantly different.

Companies in industries such as medical, government and financial services, as well as cloud-native tech startups that are providing essential services, have experienced a considerable increase in their operational demands — leading to rising operational costs. Irrespective of the industry your company belongs to, and whether your company is experiencing reduced or increased operations, cost optimization is a reality for all companies to ensure a sustained existence.

One of the most reliable measures for cost optimization at this stage is to leverage elastic services designed to grow or shrink according to demand, such as cloud and managed services. A modern product with a cloud-native architecture can auto-scale cloud consumption to mitigate lost operational demand. What may not have been obvious to startup leaders is a strategy often employed by incumbent, mature enterprises — achieving cost optimization by leveraging managed services providers (MSPs). MSPs enable organizations to repurpose full-time staff members from impacted operations to more strategic product lines or initiatives.

Why companies need cost optimization in the long run

Google’s latest experiment encourages social distancing through AR

By Brian Heater

Several months into this pandemic, you can no doubt already eyeball six feet/two meters with the best of them. But if you’re still having trouble — and happen to have an Android device handy — Google’s got you covered, I guess.

The latest project out of the company’s Experiments With Google collection, Sodar is a simple browser-based app that uses WebXR to offer a mobile augmented reality social distance. Visiting the site in Chrome on an Android handset will bring up the app. From there you’ll need to point your camera at the ground and move it around as the device recognizes the plane with a matrix of dots.

Sodar – use WebXR to help visualise social distancing guidelines in your environment. Using Sodar on supported mobile devices, create an augmented reality two meter radius ring around you. #hacktohelp https://t.co/Bu78QrEN9f pic.twitter.com/kufatNFDQk

— Experiments with Google (@ExpWithGoogle) May 28, 2020

Move it up, and you’ll get a visual perimeter of two meters (that’s 6.6 feet for us imperial unit loving Americans) — the CDC-recommended length to help curb the spread of COVID-19. The organization also handily lists it as “about two arms’ length. The app is probably more clever than it is useful at this point. Perhaps some day in the future, if smart glasses ever really take off. A big if, of course. 

Meantime, holding a phone up to make sure you’re a proper distance away from your fellow human/disease vector is a bit less practical than good old fashioned common sense.

Tech talent is flocking to smaller cities, but investors aren’t

By Natasha Mascarenhas

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week’s show took a break from regularly scheduled programming. Our co-host Alex Wilhelm, who usually leads us through the show, was on some much-deserved vacation, so Danny Crichton and Natasha Mascarenhas took the reigns and invited Floodgate Capital’s Iris Choi to join in on the fun. It’s Choi’s fourth time being on the podcast, which officially makes her our most tenured guest yet (in case the accomplished investor needs another bullet point on her bio page).

This week’s docket features scrappiness, a seed round and a Startup Battlefield alumnus.

Here’s what we chewed through:

  • LeverEdge raised seed funding to get you and your friends a volume discount on student loans. Fintech has been booming for years now, and startups often crop up around the painful world of student loans. Yet this startup still caught our eye, and it has a little something to do with its choice to use collective bargaining power as its modus operandi.
  • Stackin’ raises $12.6 million Series B for a text-messaging service that connects millennials to money tips, and eventually other fintech apps. According to CEO Scott Grimes, Stackin’ wants to be the “pipes that port people around fintech.” We get into if the world needs a fintech app marketplace and how it targets younger users.
  • D-ID, a Startup Battlefield alumnus, digitally de-identifies faces in videos and still images and just raised $13.5 million. We’re all worried about our privacy concerns, so the funding news was a refreshing change of pace from the usual headlines we see around surveillance. Now the company just needs to find a successful use case beyond the goodness in people’s hearts.
  • ByteDance, the Chinese parent company that owns TikTok, hit $3 Billion in net profit last year, reports Bloomberg. TikTok also recently snagged former Disney executive Kevin Mayer for its CEO. This one, as you can expect, made for an interesting conversation around privacy and bandwidth. We even asked Choi to weigh in on Donald J. Trump’s recent tweet threatening to regulate social media companies, since Floodgate was an early angel investor in Twitter.
  • We ended with a round table of sorts on how the future of work will look and feel in our new world, from college campuses to offices. We get into the vulnerability that comes with being on Zoom, the ever-increasing stupidity of “manels”, and how tech talent might be flocking to smaller cities but investors aren’t just yet.

And that was the show! Thanks to our producer Chris Gates for helping us put to this together, thanks to you all for listening in on this quirky episode, and thanks to Iris Choi for always bringing a fresh, candid perspective. Talk next week.

Uber UK launches Work Hub for drivers to find other gig jobs during COVID-19

By Natasha Lomas

Uber UK has launched a Work Hub for drivers to view a selection of temporary work opportunities with other companies as a way to supplement pandemic-hit ride-hailing earnings during the coronavirus crisis.

The Work Hub sits within the Uber driver app and displays offers of work from third party providers — including jobs that involve using a car to make deliveries — offering alternative gigs to drivers whose earnings have been affected by weak demand for ride-hailing during the COVID-19 pandemic.

The ride-hailing giant rolled out a similar feature in the US back in April, offering drivers there the ability to respond to job postings from around a dozen other companies, as well as the ability to receive orders through other Uber units: Eats, Freight and Works.

The UK flavor of the feature has fewer external suppliers (three at launch) — and seemingly no other internal Uber work gigs on offer.

From today, Uber said UK drivers can access “thousands” of “temporary job postings” and “flexible earning opportunities” with other companies — initially delivery firms Hermes and Yodel.

The recruiter, Adecco Group, is also offering temp work via the UK Work Hub for drivers.

“We’ll continue to add new partnerships and listings to the Work Hub as we find more opportunities for you, so check the Driver app regularly for updates,” Uber adds in a blog post announcing the launch.

The company has previously emailed UK drivers encouraging them to sign up for delivery work with the online supermarket Ocado, as demand for grocery delivery has surged during the COVID-19 pandemic.

But it’s now made this signposting more formal, via the Work Hub — and says the “thousands” of jobs are additional to any Ocado opportunities it had already emailed to UK drivers.

It’s not clear why Uber UK is not offering drivers the ability to pick up Uber Eats orders to tide themselves over.

However the Eats vs Uber ride-hailing labor force in the country likely has relatively little overlap, with cycle and motorbike couriers dominating UK Eats deliveries. Additionally, no UK cities keen to encourage extra cars to hit the streets right now — so Uber may have multiple reasons not to want to cross those streams in Europe.

“Drivers are doing essential work to keep our communities moving as we fight this virus, but with fewer trips happening they need more ways to earn. With the Work Hub, drivers can find these additional earning opportunities with other companies, working flexibly around driving on the Uber app if they choose to do so,” said Jamie Heywood, Uber’s regional GM for Northern and Eastern Europe, in a statement.

The Work Hub initiative generally looks intended to encourage drivers to supplement (pandemic-hit) Uber earnings with other gig jobs. And — cynics might say — discourage an essential platform workforce from looking elsewhere for permanent work.

Uber will need its pool of drivers to be there still, owning a car and available for gig work, when normalcy returns if it’s ride-hailing business is to bounce back.

Aside from the US and the UK, other markets where Uber has already launched the Work Hub for drivers are Australia, Chile, Costa Rica, Canada, Mexico, Portugal and South Africa.

While the feature has been born in a crisis, Uber had already made moves into the broader temp work space — launching a shift finder app, called Uber Works, in Chicago last year. And the company told us it sees longer term opportunity for the Work Hub, as a vehicle to broaden the type of earning opportunities it can put in front of drivers, saying the initiative will continue to evolve.

3 bearish takes on the current edtech boom

By Natasha Mascarenhas

Edtech is booming, but a short while ago, many companies in the category were struggling to break through as mainstream offerings. Now, it seems like everyone is clamoring to get into the next seed-stage startup that has the phrase “remote learning” on its About page.

And so begins the normal cycle that occurs when a sector gets overheated — boom, bust and a reckoning. While we’re still in the early days of edtech’s revitalization, it isn’t a gold mine all around the world. Today, in the spirit of balance and history, I’ll present three bearish takes I’ve heard on edtech’s future.

Quizlet’s CEO Matthew Glotzbach says that when students go back to school, the technology that “sticks” during this time of massive experimentation might not be bountiful.

“I think the dividing line there will be there are companies that have been around, that are a little more entrenched, and have good financial runway and can probably survive this cycle,” he said. “They have credibility and will probably get picked [by schools].” The newer companies, he said, might get stuck with adoption because they are at a high degree of risk, and might be giving out free licenses beyond their financial runway right now.

Amazon expands use of SNAP benefits for online grocery to 11 more states

By Sarah Perez

Amazon customers in nearly a dozen more U.S. states are now able to use their SNAP (Supplemental Nutrition Assistance Program) benefits to purchase groceries online, the retailer announced on Thursday. The news represents a significant expansion of a United States Department of Agriculture (USDA) pilot program introduced in 2019 that aimed to open up online grocery shopping to those on public assistance. This program is even more critical now, as in-store shopping puts consumers at risk of contracting the deadly novel coronavirus. 

To date, participating retailers in the USDA pilot program have included Walmart, Amazon, ShopRite and other smaller chains.

Amazon confirmed to TechCrunch that the 11 new states that now support using SNAP for online grocery include those that were added starting last week through today, Thursday, May 28.

The initial expansion of the pilot added New Mexico, Vermont, West Virginia and Wisconsin, which all became active last week. On Tuesday of this week, Colorado, Maryland, Minnesota and New Jersey rolled out. And today, Massachusetts, Michigan and Virginia were added as well.

With these additions, Amazon customers on public assistance can shop online for groceries across a total of 25 U.S. states plus Washington, D.C. At checkout, they can pay for groceries using their SNAP EBT.

Including the new states, Amazon now offers the use of SNAP EBT for online grocery in Alabama, Arizona, California, Colorado, Florida, Idaho, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas, Vermont, Virginia, Washington, West Virginia and Wisconsin.

However, Amazon is not the only retailer offering online grocery for SNAP EBT customers in these 25 states.

According to the USDA’s website, SNAP users can now order their groceries online through either Amazon or Walmart in these markets.

The site also indicates that Amazon is the only retailer supporting the District of Columbia at present. In addition, ShopRite supports the use of SNAP for online groceries in Maryland, New Jersey and New York. And Wright’s Markets is participating in the pilot program in Alabama.

The USDA’s website indicates several more states are now in the planning phase, so they can add online purchasing as a shopping option soon. These include Connecticut, Georgia, Illinois, Indiana, Nevada, Ohio, Oklahoma, Pennsylvania, Rhode Island, Tennessee and Wyoming.

As part of Amazon’s participation in the USDA program, it not only enabled the use of SNAP EBT as a payment method, it also made its Amazon Fresh service available to SNAP recipients in states where Fresh is available without requiring a Prime membership. And it offered free shipping on both Amazon Fresh and Amazon Pantry orders.

At launch, Amazon had said the USDA pilot program would “dramatically increase access to food for more remote customers.”

However, in the coronavirus era, access to online grocery can be a life-saving measure for some.

The pandemic has complicated access to food for those on SNAP benefits, and for high-risk individuals on SNAP in particular. These consumers now have to risk getting COVID-19 every time they go out for groceries themselves. And as more workers become unemployed due to the economic impacts from the pandemic, more people are joining public assistance programs like SNAP. 

In light of the pandemic, the USDA said it would fast-track any state that wanted to join the pilot. California, Arizona, Florida, Idaho, Kentucky, Missouri, Texas, West Virginia, D.C., North Carolina and Vermont were just approved in April, for example. In May, the USDA approved Minnesota, Colorado, Nevada, Wisconsin, Rhode Island, New Mexico and Wyoming.

In less than six weeks, the USDA has expanded access to the program to a total of 36 states plus D.C., it says, though many are not yet live. When they launch, however, online purchasing for groceries will be available to more than 90% of SNAP participants, the USDA has noted.

How Grab adapted after COVID-19 hit its ride-hailing business

By Catherine Shu

The COVID-19 pandemic is taking a heavy toll on ride-hailing services, like Uber and Lyft. Grab, Southeast Asia’s largest ride-hailing company, has also been impacted, but the company has adapted by quickly transitioning many of its ride-hailing drivers to its on-demand delivery verticals and expanding services needed by customers during social distancing measures.

The company told TechCrunch that its ride-hailing drivers saw their incomes decrease by about a double-digit percentage in April 2020, compared to October 2019, in line with a double-digit drop in gross merchandise volume for Grab’s ride-hailing business in some markets. Between March and April, more than 149,000 Grab ride-hailing drivers switched to performing on-demand deliveries. In some markets, the transition was done very quickly. For example, in Malaysia, 18,000 drivers moved to delivery in a single day. The platform also saw an influx of new driver requests, many from people who had been laid off or furloughed, as well as merchants who needed a new way to make income.

Russell Cohen, Grab’s regional head of operations, told Extra Crunch that to redeploy driver capacity to delivery verticals, the company worked with governments in its eight markets to understand how different COVID-19 responses, including stay-at-home orders, affected on-demand logistics. Anticipating shifts in consumer behavior, it also started adding new services that will continue after the pandemic.

Quickly moving driver capacity from ride-hailing to on-demand delivery

Grab currently has about nine million “micro-entrepreneurs,” or what it calls the drivers, delivery, merchants and agents on its platform. Cohen says the company began to see an effect on ride-hailing and transportation patterns in January and February as flights out of China, and air travel in general, began to decrease. Then COVID-19 started to have a material impact on its ride-hailing business in March, with a sharp drop after countries began implementing stay-at-home orders.

Presso shifts focus to clothing disinfecting for film studios amid COVID-19 concerns

By Brian Heater

The Presso team first piqued my interest in a trip to Hong Kong last summer. The startup promised a clever approach to dry cleaning that involved setting up robotic kiosks in hotel hallways. The product is aimed at traveling business people looking for a quick clean of rumpled up clothing ahead of an important business meeting. Best of all, it cuts out pricey hotel laundry services.

Obviously, a lot has changed in late-August, and like many others, the team has attempted to find a way to leverage its technology in the battle against the spread of COVID-19. The solution is a bit more niche than some, but Presso is still a fairly small team. The company has added a disinfecting element to its robot in line with CDC guidelines and has begun selling a limited number of units to TV and film production companies.

“My family in India actually contracted coronavirus and my mom and grandparents had to be hospitalized,” cofounder and CEO Nishant Jain told TechCrunch. “They are all safe now thankfully. If we can play even a small part in keeping clothes sanitized and people safe, we’d be honored. Even our team members have been quite active with helping out their local communities by sourcing masks and PPE for hospitals and designing ventilators.”

The move comes as California governor Gavin Newsom has announced plans to get film production back on track. Many studios are balking at such a rush to return to work, but for those who are still interested, Presso is offering up units for sets looking to remove the potential spread of the highly contagious novel coronavirus.

Presso’s latest push is fueled in part by an additional $250,000 in funding, bringing the team’s total up to $511,000. The company says it’s seen a 200% growth in orders from one month to the next, including high profile clients like Disney/Marvel, HBO, CBS an FOX.

Amazon says it will offer full-time jobs to 125,000 temporary workers

By Brian Heater

In a blog post today, Amazon announced plans to offer permanent jobs to around 70% of the 175,000 temporary workers it brought on to meet demand amid a COVID-19-fueled surge. Initially filled as seasonal positions, the company will be transferring 125,000 people to full-time roles next month, as the pandemic-fueled push theoretically dies down.

Those roles will earn workers a minimum wage of $15 and hour (after pushback from lawmakers like Bernie Sanders) and access to some training programs designed to help them work their way up at the company. The full-time jobs will kick in the same month Amazon winds down its $2 an hour hazard pay for workers.

Amazon has been the subject of criticism for its handling of the COVID-19 crisis, including letters from senators and attorneys general aimed at getting a better picture of its worker health policies, along with numbers of employees who have been infected or died from the novel coronavirus.

Another asked the company to offer insight into why the company had fired a number of staff who had been vocally critical of its policies. Amazon has denied any wrongdoing in all of this and insisted that COVID-19 rates among staff are lower than the general population.

This latest move comes amid the worst U.S. unemployment rate since the Great Depression. This week, an additional 2.1 million Americans applied for unemployment, bringing the total up to 41 million since the beginning of the pandemic. Economists are hopeful that reopening sectors of the country will help reverse those figures, assuming that such actions don’t lead to massive spikes in COVID-19 cases and deaths.

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