Welcome back to This Week in Apps, the TechCrunch 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.
There was so much wrong with Quibi’s premise that it’s sometimes hard to even know where to start. But at the core, its problem was that it fundamentally misunderstood how, when and why users would watch video on their phones.
The company’s thinking was that you could fund high-production value content ($100K/minute, yikes) then chop it up into smaller “bites,” add a technology layer, then call this a reinvention of cinema.
The reality is there was little demand for this sort of content, and it didn’t fit with how people want to be entertained on their phones.
When people want to appreciate high-quality filmmaking (or even TV production), they tend to want a bigger screen — they’ve spent money for their fancy high-def or 4K TV, after all. Pre-COVID, they might even pay to go a movie theater. On mobile, the production value of content is far less of a concern, if it even registers.
Quibi also misunderstood what users want to watch in terms of video on their phones when they have a few minutes to kill.
By positioning its app in this space, it had to compete with numerous and powerful sources for “short-form” content — existing apps like YouTube, TikTok, Facebook (e.g. News Feed content, Watch feeds), Instagram Stories, Snapchat and so on. This is content you don’t have to get invested in, since you’re just distracting yourself from a few minutes of boredom. It’s not a time or place to engage with a longer story — chopped or otherwise.
Quibi also cut the length of content to serve its artificial limitations — at the expense of story quality and enjoyment.
A reality show dumbed down to just its highlights is almost unwatchable, as it exposes the editors’ machinations and manipulations that are better hidden among longer stretches of fluff. And there was simply no reason to cut down movies — like Quibi’s “The Dangerous Game,” for example — into pieces. It didn’t elevate the storytelling; it distracted from it. And if you wanted a quick news update (e.g. Quibi’s “Daily Essentials”), you didn’t need a whole new app for that.
Quibi content may have been considered “high quality,” but it often wasn’t good. (I still can’t believe I sat through an episode of “Dishmantled,” where chefs had to recreate dishes of food that were thrown in their face. And Quibi had the nerve to shame YouTube’s low-quality and lack of talent?!)
Quibi also wanted to charge for its service, but its catalog wasn’t designed for families, with content that ranged from kids to adult programming. It didn’t offer parental controls. This immediately limited its competitiveness.
At launch, Quibi also limited itself to the phone, which meant it limited your ability to use the phone as a second screen while you watched a show. (There was no PiP support). TechCrunch has been writing about phones as the second screen for the better part of a decade, often with a focus on startups. But in Quibi’s case, it killed the second screen experience, seemingly forgetting that people text friends, order food, check Twitter and peek in on other apps while a TV show plays in the background. Did it really think that a reboot of “Punk’d” deserved our full attention?
Quibi naturally blamed COVID for its failure to thrive. It had imagined a world where users had ample time to kill while out and about: commuting on the subway, standing in long lines, that sort of thing.
But even this premise was flawed. It would have eventually caught up to Quibi, too; COVID just accelerated it. The issue is that Quibi imagined the U.S. as only a swath of urban metros where public transportation is abundant and standing in lines is the norm. In reality, more than half (52%) the U.S. is described as suburban, 27% is urban and 21% is rural. Non-urban commuters often drive themselves to work. Sure, they could stream Quibi during those commutes, but not really look at it. So why burn high-production value on them? And standing in long lines, believe it or not, is not actually that common in smaller cities and towns, either. If it only takes two minutes to grab a coffee or a burrito before you hop back in your car, do you really want to start a new show?
So where would that have left Quibi? Hoping for Gen Z’ers attention as they lounge around their bedrooms looking for something to do? And yet it wanted to appeal to these kids using Hollywood A-Listers they don’t even know? As COVID pressed down, it left Quibi in competition with (often arguably better) content that streamed natively on the TV from apps like Netflix, HBO, Hulu, Prime Video, Disney+, and others where you could binge through seasons at once instead of waiting every week for a new “quick bite” to drop.
There’s more, so much more that could still be said, including the fact that a former eBay and HP CEO may not be the right person to lead a company that wanted to dazzle a younger demographic. Or how its video-flipping TurnStyle feature was clever, but added complexity to filmmaking, and was not enough of a technological leap to build a business around. Or how, no matter how much money it had raised, it was still not enough, compared with the massive budgets of competitors like Netflix and Amazon.
In the meantime, TikTok still isn’t banned.
Snapchat’s maker was forecast to bring around $555 million in revenues in Q3 but posted $679 million instead, a 52% YoY increase, in a surprise earnings beat. EPS were an adjusted $0.01, beating an expected loss of $0.04. The company also grew daily active users by 4% (11 million) to 249 million, an 18% YoY increase. Snap’s net loss of $200 million was a 12% improvement over last year, too.
As a result of the earnings, shares jumped nearly 30% the next day and its valuation cracked $50 billion for the first time, a record high.
During earnings, the company touted it now reaches 90% of the Gen Z population and 75% of millennials in the U.S., U.K. and France. User growth was attributed to new products, including Profiles, Minis, Lens creation tools and AR ads. In particular, Snap leveraged the Facebook ad boycott to reach out to brands that wanted to “realign their marketing efforts” with companies that “share their corporate values,” the company said.
Snap also just launched its TikTok competitor, Sounds on Snapchat, which lets users add licensed music to their Stories.
Image Credits: Sensor Tower
Image Credits: Lux
The developers of popular pro iPhone camera apps Halide and Spectre this week launched their latest creation, the Halide Mark II camera app. The new interface has been designed for one-handed operation and includes a range of new features.
These include a new gesture-based automatic and manual switcher; tactile touch for enabling and disabling features like exposure warnings, focus peaking, and loupe as you adjust exposure or focus; an overhauled manual mode; new dynamic labeling of controls and actions to explain features to new users; support for the edge-to-edge interface of the iPhone 12 models; a redesigned reviewer with a full metadata read-out; in-app memberships for photo lessons; and over 40 more changes.
A new “Coverage” feature can take a photo with Smart HDR 2/3 and Deep Fusion for maximum quality and computational processing as well as a RAW file — with only a slight delay between captures.
Image Credits: Lux
Halide Mark II also uses machine learning to process an iPhone RAW file in the app (ProRAW) with 17 steps, including detail enhancement, contrast and color adjustment and more. This feature, called Instant RAW, intelligently develops the file to get the best possible results.
And the app includes top pro tools, like a new waveform and color exposure warnings (zebras) that use XDR (Extended Dynamic Range) 14-bit RAW sampling, for accurate exposure previews and readings.
The app is $36 (currently $30 during a promo period) if you want to only pay once. Otherwise it’s $11.99 per year on subscription (currently $9.99 per year if you lock in the price now during the promo period). Subscribers to the membership plan also get perks, like custom icons. Existing Halide 1 users, unbelievably, are upgraded for free but are asked to support the app with a membership.
Aaand here it is..!!!
— Cyril Diagne (@cyrildiagne) October 22, 2020
A new app called ClipDrop launches on iOS, Android, macOS and Windows as a new sort of “copy and paste” experience. The app uses state-of-the-art vision AI to copy images from your desktop with a screenshot to any other app (e.g. Docs, Photoshop, Canva, etc.) and it allows you to extract anything — objects, people, drawings or text.
The mobile app lets you snap photos of real-world items and then digitally transfer them to other apps or websites. In the below demo, the company shows how you could “clip” an image of an article of clothing using the camera, then import the photo into a document.
The company also just released a plugin for Photoshop that lets you drop the image into its app as a new layer with an editable mask.
The app is $39.99 per year (until November 2020, when it ups to $79.99 per year.)
Image Credits: Adobe
As part of Adobe’s virtual MAX 2020 conference this week, the company launched the first public version of its Illustrator vector graphics app on the iPad and brought its Fresco drawing and painting app to the iPhone. In time, the company plans to bring more effects, brushes and AI features to Illustrator. Fresco 2.0, meanwhile, includes new smudge brushes and support for personalized brushes, among other things.
Designed for landlords, Airbnb owners or other vacation rental property owners, Party Squasher offers a hardware device and paired mobile app that counts the number of people at your house by counting the mobile phones in or around a house. The phones can be counted even if they’re not connected to the home’s Wi-Fi.
Because the device doesn’t include cameras or microphones, it’s ideal for ensuring that renters aren’t hosting large (and these days, potentially illegal) parties without violating privacy.
In the event that a large gathering is present, you’re sent a text or email so you can take action.
The device is $249 and the app charges a $199 per year subscription.
Remember App Clips?
— Paul Haddad (@tapbot_paul) October 22, 2020
Quibi made their “episodes” 11 minutes to avoid paying union writers. Everyone should MC Hammer dance on their grave.
— Jawn Wick (@LukeXCunningham) October 21, 2020
Omg I forgot to turn her app time limits back on pic.twitter.com/wrzSTGizWA
— Sarah Perez (@sarahintampa) October 22, 2020
The No. 1 game in the App Store is now Among Us!.
Can you guess why?
— The Recount (@therecount) October 21, 2020
In ye olden days of piracy, RIAA takedown notices were a common thing — I received a few myself. But that’s mostly fallen off as tracking pirates has gotten more difficult. But the RIAA can still issue nastygrams — to the creators of software that could potentially be used to violate copyright, like YouTube downloaders.
One such popular tool used by many developers, YouTube-DL, has been removed from GitHub for the present after an RIAA threat, as noted by Freedom of the Press Foundation’s Parker Higgins earlier today.
This is a different kind of takedown notice than the ones we all remember from the early 2000s, though. Those were the innumerable DMCA notices that said “your website is hosting such-and-such protected content, please take it down.” And they still exist, of course, but lots of that has become automated, with sites like YouTube removing infringing videos before they even go public.
What the RIAA has done here is demand that YouTube -DL be taken down because it violates Section 1201 of U.S. copyright law, which basically bans stuff that gets around DRM. “No person shall circumvent a technological measure that effectively controls access to a work protected under this title.”
That’s so it’s illegal not just to distribute, say, a bootleg Blu-ray disc, but also to break its protections and duplicate it in the first place.
If you stretch that logic a bit, you end up including things like YouTube-DL, which is a command-line tool that takes in a YouTube URL and points the user to the raw video and audio, which of course have to be stored on a server somewhere. With the location of the file that would normally be streamed in the YouTube web player, the user can download a video for offline use or backup.
But what if someone were to use that tool to download the official music video for Taylor Swift’s “Shake it off”? Shock! Horror! Piracy! YouTube-DL enables this, so it must be taken down, they write.
As usual, it only takes a moment to arrive at analogous (or analog) situations that the RIAA has long given up on. For instance, wouldn’t using a screen and audio capture utility accomplish the same thing? What about a camcorder? Or for that matter, a cassette recorder? They’re all used to “circumvent” the DRM placed on Tay’s video by creating an offline copy without the rights-holder’s permission.
Naturally this takedown will do almost nothing to prevent the software, which was probably downloaded and forked thousands of times already, from being used or updated. There are also dozens of sites and apps that do this — and the RIAA by the logic in this letter may very well take action against them as well.
Of course the RIAA is bound by duty to protect against infringement, and one can’t expect it to stand by idly as people scrape official YouTube accounts to get high-quality bootlegs of artists’ entire discographies. But going after the basic tools is like the old, ineffective “Home taping is killing the music industry” line. No one’s buying it. And if we’re going to talk about wholesale theft of artists, perhaps the RIAA should get its own house in order first — streaming services are paying out pennies with the Association’s blessing. (Go buy stuff on Bandcamp instead.)
Tools like YouTube-DL, like cassette tapes, cameras, and hammers, are tech that can be used legally or illegally. Fair use doctrines allow tools like these for good-faith efforts like archiving content that might be lost because Google stops caring, or for people who for one reason or another want to have a local copy of some widely available, free piece of media for personal use.
YouTube and other platforms, likewise in good faith, do what they can to make obvious and large-scale infringement difficult. There’s no “download” button next to the latest Top 40 hit, but there are links to buy it, and if I used a copy — even one I’d bought — as background for my own video, I wouldn’t even be able to put it on YouTube in the first place.
Temporarily removing YouTube-DL’s code from GitHub is a short-sighted reaction to a problem that can’t possibly amount to more than a rounding error in the scheme of things. They probably lose more money to people sharing logins. It or something very much like it will be back soon, a little smarter and a little better, making the RIAA’s job that much harder, and the cycle will repeat.
Maybe the creators of Whack-a-Mole will sue the RIAA for infringement on their unique IP.
In August, Harness made its first acquisition when it bought open source continuous integration startup Drone.io. The company didn’t waste any time building on that purchase, announcing a new enterprise continuous integration tool today to go alongside the open source project Drone has been building.
The Harness software development platform consists of various modules and the latest one helps with continuous integration, which is the build and test process that happens before developers start deploying their code changes.
“Drone is a continuous integration software. It helps developers to continuously build, test and deploy their code. The project was started in 2012, and it was the first cloud-native, container-native continuous integration solution on the market, and we open sourced it.”
Bansal indicated at the time of the acquisition that he wanted to build on that open source project and provide an enterprise commercial version, while continuing to support the open source project.
“This is really the first product in the industry that is bringing AI and machine learning into optimizing the build and test process,” Bansal said. That intelligence layer is what separates it from the open source version of the software, and the idea is to use machine learning to speed up the building and testing process.
The company is also announcing a new module around managing feature flags. These are elements developers leave in the code to limit the roll out of software, allowing them to see how the update is performing before rolling it out to the user base at large. The problem is these as these flags proliferate, they become difficult to manage, and the new module is designed to help developers understand and control the flags that exist in their code.
Bansal says his goal for the company has been to put the kind of automated software delivery pipeline that’s in place at the world’s largest tech companies within reach of every developer.
“[Our goal] is that every company in the world can have the same level of software delivery sophistication as a Google or Amazon or Facebook,” Bansal said.
Bansal founded AppDynamics, a company he sold to Cisco in 2017 for $3.7 billion. He launched Harness later that same year. The company has raised almost $80 million on a valuation of $500 million, according to Pitchbook data.
The Google Maps Platform, the developer side of Google Maps, is launching a new service for on-demand rides and delivery companies today that ties together some of the platform’s existing capabilities with new features for finding nearby drivers and sharing trip and order progress information with customers.
This isn’t Google Maps Platform’s first foray into this business. Back in 2018, the company launched a solution for in-app navigation for ridesharing companies, for example. At the time, the team didn’t really focus on delivery solutions, though, but that’s obviously one of the few booming markets right now, thanks to the COVID-19 pandemic.
“Building on 15 years of experience mapping the world, the On-demand Rides & Deliveries solution helps businesses improve operations as well as transform the driver and customer journey from booking to arrival or delivery–all with predictable pricing per completed trip,” Google senior product manager Eli Danziger writes in today’s announcement.”
At the core of the service is the Google Maps routing service, which developers can tweak for deliveries by bike or motorcycle, for example, and to find optimized routes with the shortest or fastest path. The team notes that this so-called ‘Routes Preferred’ feature also enables arrival time predictions for time-sensitive deliveries and pricing estimates.
The other new feature of this platform is to enable developers to quickly build an experience that helps users find nearby drivers. Imaginatively called ‘Nearby Drivers,’ the idea here is about as straightforward as you can imagine and allows developers to find the closest driver with a single API call. They can also add custom rankings, based on their specific needs, to ensure the right driver is matched to the right route.
Unsurprisingly, the platform also features support for in-app navigation, and that’s tied in closely with the rest of the feature set.
Developers can also easily integrate Google’s real-time trip and order progress capabilities to “keep customers informed from pickup to drop-off or delivery, with a real-time view of a driver’s current position, route, and ETA.”
All of this is pretty much what any user would expect from a modern ride-sharing or delivery app, so for the most part, that’s table stakes. The technology behind it is not, though, and a lot of delivery companies have set up large tech operations to build out exactly these features. They aren’t likely to switch to Google’s platform, but the platform may give smaller players a chance to operate more efficiently or enter new markets without the added expense of having to build this tech stack from the ground up — or cobble it together from multiple vendors.
The Coalition for App Fairness (CAF), a newly formed advocacy group pushing for increased regulation over app stores, has more than doubled in size with today’s announcement of 20 new partners — just one month after its launch. The organization, led by top app publishers and critics, including Epic Games, Deezer, Basecamp, Tile, Spotify and others, debuted in late September to fight back against Apple and Google’s control over app stores, and particularly the stores’ rules around in-app purchases and commissions.
The coalition claims both Apple and Google engage in anti-competitive behavior, as they require publishers to use the platforms’ own payment mechanisms, and charge 30% commission on these forced in-app purchases. In some cases, those commissions are collected from apps where Apple and Google offer a direct competitor. For example, the app stores commission Spotify, which competes with Google’s YouTube Music and Apple’s own Apple Music.
The group also calls out Apple more specifically for not allowing app publishers any other means of addressing the iOS user base except through the App Store that Apple controls. Google, however, allows apps to be sideloaded, so is less a concern on that platform.
The coalition launched last month with 13 app publishers as its initial members, and invited other interested parties to sign up to join.
Since then, CAF says “hundreds” of app developers expressed interest in the organization. It’s been working through applications to evaluate prospective members, and is today announcing its latest cohort of new partners.
The apps also hail from a number of app store categories, including Business, Education, Entertainment, Developer Tools, Finance, Games, Health & Fitness, Lifestyle, Music, Navigation, News, Productivity, Shopping, Sport and Travel.
The new partners include: development studio Beonex, health app Breath Ball, social app Challenge by Eristica, shopping app Cladwell, fitness app Down Dog Yoga, developer tool Gift Card Offerwall, game maker Green Heart Games, app studio Imagine BC, business app Passbase, music app Qobuz, lifestyle app QuackQuack and Qustodio, game Safari Forever, news app Schibsted, app studio Snappy Mob, education app SpanishDict, navigation app Sygic, app studio Vertical Motion, education app YARXI, and the Mobile Marketing Marketing Association.
With the additions, CAF now includes members from Austria, Australia, Canada, France, Germany, India, Israel, Malaysia, Norway, Singapore, Slovakia, Spain, United Kingdom and the United States.
The new partners have a range of complaints against the app stores, and particularly Apple.
SpanishDict, for instance, was frustrated by weeks of rejections with no recourse and inconsistently applied policies, it says. It also didn’t want to use Apple’s new authentication system, Apple Sign-In, but Apple made this a requirement for being included on the App Store.
Passbase, a Sign In With Apple competitor, also argues that Apple applied its rules unfairly, denying its submission but allowing its competitors on the App Store.
While some of the app partners are speaking out against Apple for the first time, others have already detailed their struggles publicly.
Eristica posted on its own website how Apple shut down its seven-year-old social app business, which allowed users to challenge each other to dares to raise money for charity. The company claims it pre-moderated the content to ensure dangerous and harmful content wasn’t published, and employed human moderators, but was still rejected over dangerous content.
Meanwhile, TikTok remained on the App Store, despite hosting harmful challenges, like the pass out challenge, cereal challenge, salt and ice challenge and others, Eristica says.
Apple, of course, tends to use its policies to shape what kind of apps it wants to host on its App Store — and an app that focused on users daring one another may have been seen as a potential liability.
That said, Eristica presents a case where it claims to have followed all the rules and made all the changes Apple said it wanted, and yet still couldn’t get back in.
Down Dog Yoga also recently made waves by calling out Apple for rejecting its app because it refused to auto-charge customers at the end of its free trial.
Wow! Apple is rejecting our latest update because we refuse to auto-charge at the end of our free trial. They can choose to steal from their customers who forget to cancel, but we won't do the same to ours. THIS IS A LINE THAT WE WILL NOT CROSS. pic.twitter.com/s9HwD4ay4h
— Down Dog (@downdogapp) June 30, 2020
The issue, in this case, wasn’t just that Apple wants a cut of developers’ businesses, it also wanted to dictate how those businesses are run.
Another new CAF partner, Qustodio, was among the apps impacted by Apple’s 2018 parental control app ban, which arrived shortly after Apple introduced its own parental control software in iOS.
The app developer had then co-signed a letter asking Apple to release a Screen Time API rather than banning parental control apps — a consideration that TechCrunch had earlier suggested should have been Apple’s course of action in the first place.
Under increased regulatory scrutiny, Apple eventually relented and allowed the apps back on the App Store last year.
Not all partners are some little guy getting crushed by App Store rules. Some may have run afoul of rules designed to protect consumers, like Apple’s crackdown on offerwalls. Gift Card Offerwall’s SDK, for example, was used to incentivize app monetization and in-app purchases, which isn’t something consumers tend to welcome.
Despite increased regulatory pressure and antitrust investigations in their business practices, both Apple and Google have modified their app store rules in recent weeks to ensure they’re clear about their right to collect in-app purchases from developers.
Meanwhile, Apple and CAF member Epic Games are engaged in a lawsuit over the Fortnite ban, as Epic chose to challenge the legality of the app store business model in the court system.
“Apple must be held accountable for its anticompetitive behavior. We’re committed to creating a level playing field and fair future, and we’re just getting started,” CAF said in an announcement about the new partners. It says it’s still open to new members.
In the world of software development, one term you’re sure to hear a lot of is full-stack development. Job recruiters are constantly posting open positions for full-stack developers and the industry is abuzz with this in-demand title.
But what does full-stack actually mean?
Simply put, it’s the development on the client-side (front end) and the server-side (back end) of software. Full-stack developers are jacks of all trades as they work with the design aspect of software the client interacts with as well as the coding and structuring of the server end.
In a time when technological requirements are rapidly evolving and companies may not be able to afford a full team of developers, software developers that know both the front end and back end are essential.
In response to the coronavirus pandemic, the ability to do full-stack development can make engineers extremely marketable as companies across all industries migrate their businesses to a virtual world. Those who can quickly develop and deliver software projects thanks to full-stack methods have the best shot to be at the top of a company’s or client’s wish list.
So how can you become a full-stack engineer and what are the expectations? In most working environments, you won’t be expected to have absolute expertise on every single platform or language. However, it will be presumed that you know enough to understand and can solve problems on both ends of software development.
Full-stack is becoming the default way to develop, so much so that some in the software engineering community argue whether or not the term is redundant. As the lines between the front end and back end blur with evolving tech, developers are now being expected to work more frequently on all aspects of the software. However, developers will likely have one specialty where they excel while being good in other areas and a novice at some things….and that’s OK.
Since full-stack developers can communicate with each side of a development team, they’re invaluable to saving time and avoiding confusion on a project.
One common argument against full stack is that, in theory, developers who can do everything may not do one thing at an expert level. But there’s no hard or fast rule saying you can’t be a master at coding and also learn front-end techniques or vice versa.
One hold up you may have before diving into full-stack is you’re also mulling over the option to become a DevOps engineer. There are certainly similarities among both professions, including good salaries and the ultimate goal of producing software as quickly as possible without errors. As with full-stack developers, DevOps engineers are also becoming more in demand because of the flexibility they offer a company.
Sym, a new platform that makes it easier for developers to integrate security and privacy workflows into their process, today announced that it has raised a $9 million Series A round led by Amplify Partners. Earlier this year, the company announced its $3 million seed round lead by Andy McLoughlin of Uncork Capital and Robin Vasan of Mango Capital. Angel investors include former Google CISO Gerhard Eschelbeck, Atlassian CTO Sri Viswanath and Jason Warner, the CTO of GitHub.
Sym co-founder Yasyf Mohamedali spent the last few years as CTO of health tech company Karuna Health. In that role, he became intimately familiar with working in a high-compliance industry, handling vendor reviews and security audits. To make those processes more efficient, his team built lots of small tools, but he realized that everybody else in the industry was doing the same.
“As an engineer, it’s frustrating when you see people building the same thing over and over,” Mohamedali told me. “For years, I had this kind of concept in my head of, ‘what if we just built it all once, and then people didn’t have to keep redoing the same thing over and over?’ And so when I stepped away from Karuna to start Sym, originally, what I wanted to do was exactly that — and specifically for HIPAA. It’s kind of a naïve approach where I was like, ‘you know, what, I’m just going to build all the tools, someone needs to do HIPAA and open source it as like a black box thing.”
What he realized, though, is that companies have their own security and governance workflows that tend to share the same core but also a lot of variabilities. So what Sym now does is offer these core tools and lets companies mix and match what they need from this developer-centric toolbox the company has created.
“What we’re building is a set of workflow templates and primitives that map to that shared 20% core — and then a set of integrations that you can use to pull down those workflow templates, and codify that last mile variance by connecting those templates to all your different services,” Mohamedali explained.
What’s interesting about this approach is that Sym offers a Python SDK and lets developers create these workflows and integrations with only a few lines of code. In part, that’s due to the company’s philosophy of putting engineers back into control of security — the same way DevOps allowed them to reclaim control over infrastructure and Q&A. “DevOps is a thing. So now, DevSecOps needs to be a thing. We need to reclaim security. And we want to be the tool to do that with,” he said.
Mohamedali stressed that this was very much an opportunistic round, and for the next few months this raise won’t change anything in the company’s road map. But because Sym started signing up large customers — and had made commitments to them — now was a good time to raise, especially because the right partners came along. That means hiring more engineers, but over time, the company obviously also plans to build out its sales and marketing teams. The product itself, though, will remain in private beta until about the middle of next year. At that time, Sym will also launch a self-serve version of its platform.
This has been a long time coming, but the OpenStack Foundation today announced that it is changing its name to “Open Infrastructure Foundation,” starting in 2021.
The announcement, which the foundation made at its virtual developer conference, doesn’t exactly come as a surprise. Over the course of the last few years, the organization started adding new projects that went well beyond the core OpenStack project, and renamed its conference to the “Open Infrastructure Summit.” The organization actually filed for the “Open Infrastructure Foundation” trademark back in April.
After years of hype, the open-source OpenStack project hit a bit of a wall in 2016, as the market started to consolidate. The project itself, which helps enterprises run their private cloud, found its niche in the telecom space, though, and continues to thrive as one of the world’s most active open-source projects. Indeed, I regularly hear from OpenStack vendors that they are now seeing record sales numbers — despite the lack of hype. With the project being stable, though, the Foundation started casting a wider net and added additional projects like the popular Kata Containers runtime and CI/CD platform Zuul.
“We are officially transitioning and becoming the Open Infrastructure Foundation,” long-term OpenStack Foundation executive president Jonathan Bryce told me. “That is something that I think is an awesome step that’s built on the success that our community has spawned both within projects like OpenStack, but also as a movement […], which is [about] how do you give people choice and control as they build out digital infrastructure? And that is, I think, an awesome mission to have. And that’s what we are recognizing and acknowledging and setting up for another decade of doing that together with our great community.”
In many ways, it’s been more of a surprise that the organization waited as long as it did. As the foundation’s COO Mark Collier told me, the team waited because it wanted to be sure that it did this right.
“We really just wanted to make sure that all the stuff we learned when we were building the OpenStack community and with the community — that started with a simple idea of ‘open source should be part of cloud, for infrastructure.’ That idea has just spawned so much more open source than we could have imagined. Of course, OpenStack itself has gotten bigger and more diverse than we could have imagined,” Collier said.
As part of today’s announcement, the group also announced that its board approved four new members at its Platinum tier, its highest membership level: Ant Group, the Alibaba affiliate behind Alipay, embedded systems specialist Wind River, China’s FiberHome (which was previously a Gold member) and Facebook Connectivity. These companies will join the new foundation in January. To become a Platinum member, companies must contribute $350,000 per year to the foundation and have at least two full-time employees contributing to its projects.
“If you look at those companies that we have as Platinum members, it’s a pretty broad set of organizations,” Bryce noted. “AT&T, the largest carrier in the world. And then you also have a company Ant, who’s the largest payment processor in the world and a massive financial services company overall — over to Ericsson, that does telco, Wind River, that does defense and manufacturing. And I think that speaks to that everybody needs infrastructure. If we build a community — and we successfully structure these communities to write software with a goal of getting all of that software out into production, I think that creates so much value for so many people: for an ecosystem of vendors and for a great group of users and a lot of developers love working in open source because we work with smart people from all over the world.”
The OpenStack Foundation’s existing members are also on board and Bryce and Collier hinted at several new members who will join soon but didn’t quite get everything in place for today’s announcement.
We can probably expect the new foundation to start adding new projects next year, but it’s worth noting that the OpenStack project continues apace. The latest of the project’s bi-annual releases, dubbed “Victoria,” launched last week, with additional Kubernetes integrations, improved support for various accelerators and more. Nothing will really change for the project now that the foundation is changing its name — though it may end up benefitting from a reenergized and more diverse community that will build out projects at its periphery.
Temporal, a Seattle-based startup that is building an open-source, stateful microservices orchestration platform, today announced that it has raised an $18.75 million Series A round led by Sequoia Capital. Existing investors Addition Ventures and Amplify Partners also joined, together with new investor Madrona Venture Group. With this, the company has now raised a total of $25.5 million.
Founded by Maxim Fateev (CEO) and Samar Abbas (CTO), who created the open-source Cadence orchestration engine during their time at Uber, Temporal aims to make it easier for developers and operators to run microservices in production. Current users include the likes of Box and Snap.
“Before microservices, coding applications was much simpler,” Temporal’s Fateev told me. “Resources were always located in the same place — the monolith server with a single DB — which meant developers didn’t have to codify a bunch of guessing about where things were. Microservices, on the other hand, are highly distributed, which means developers need to coordinate changes across a number of servers in different physical locations.”
Those servers could go down at any time, so engineers often spend a lot of time building custom reliability code to make calls to these services. As Fateev argues, that’s table stakes and doesn’t help these developers create something that builds real business value. Temporal gives these developers access to a set of what the team calls ‘reliability primitives’ that handle these use cases. “This means developers spend far more time writing differentiated code for their business and end up with a more reliable application than they could have built themselves,” said Fateev.
Temporal’s target use is virtually any developer who works with microservices — and wants them to be reliable. Because of this, the company’s tool — despite offering a read-only web-based user interface for administering and monitoring the system — isn’t the main focus here. The company also doesn’t have any plans to create a no-code/low-code workflow builder, Fateev tells me. However, since it is open-source, quite a few Temporal users build their own solutions on top of it.
The company itself plans to offer a cloud-based Temporal-as-a-Service offering soon. Interestingly, Fateev tells me that the team isn’t looking at offering enterprise support or licensing in the near future, though. “After spending a lot of time thinking it over, we decided a hosted offering was best for the open-source community and long term growth of the business,” he said.
Unsurprisingly, the company plans to use the new funding to improve its existing tool and build out this cloud service, with plans to launch it into general availability next year. At the same time, the team plans to say true to its open-source roots and host events and provide more resources to its community.
“Temporal enables Snapchat to focus on building the business logic of a robust asynchronous API system without requiring a complex state management infrastructure,” said Steven Sun, Snap Tech Lead, Staff Software Engineer. “This has improved the efficiency of launching our services for the Snapchat community.”
French startup Koyeb has raised a $1.6 million (€1.4 million) pre-seed round. The company focuses on data-processing workflows across multiple cloud providers. It hides many complexities using a serverless model.
Jean-David Chamboredon and Juliette Mopin from ISAI are leading the round with Plug and Play Ventures, Kima Ventures, AceCap and a long list of business angels also participating, such as Zachary Smith, Justin Ziegler, Alexis Lê-Quôc, Sébastien Lucas, Marc Jalabert, Amirhossein Malekzadeh, Philippe Besnard, Eric Ouisse, Dominique Vidal and Fabrice Bernhard.
Koyeb believes that companies will take advantage of the best cloud-native APIs and storage services going forward. In order to mix-and-match those various providers, Koyeb provides the serverless glue that ties everything together.
For instance, you can store videos on an object storage managed by DigitalOcean, transcribe the audio from those video files on Google Cloud using Google’s speech-to-text API and save the results on another object storage bucket.
You can move and process data based on a fixed schedule or based on events. For instance, when there’s a new file, you can trigger Koyeb with an API call. Everything scales automatically to process your task. And once your workflow is done, you no longer get billed for runtime.
Koyeb supports many different storage providers, such as AWS, Google Cloud, Microsoft Azure, Wasabi, Backblaze B2 as well as object storage products from DigitalOcean, Linode, Scaleway, Vultr, etc.
The company has also been working on a feature that lets you deploy your own Docker container so that you can build your custom functions. You can also push your function from GitHub directly.
This way, you don’t have to spin up new servers and shut them down later. You don’t have to manage your cloud infrastructure using Terraform and Kubernetes as Koyeb abstracts your infrastructure for you.
Image Credits: Koyeb
A video call group photo of NeuraLegion’s team working remotely around the world
Application security platform NeuraLegion announced today it has raised a $4.7 million seed round led by DNX Ventures, an enterprise-focused investment firm. The funding included participation from Fusion Fund, J-Ventures and Incubate Fund. The startup also announced the launch of a new self-serve, community version that allows developers to sign up on their own for the platform and start performing scans within a few minutes.
Based in Tel Aviv, Israel, NeuraLegion also has offices in San Francisco, London, and Mostar, Bosnia. It currently offers NexDAST for dynamic application security testing, and NexPLOIT to integrate application security into SDLC (software development life-cycle). It was launched last year by a founding team that includes chief executive Shoham Cohen, chief technology officer Bar Hofesh, chief scientist Art Linkov, and president and chief commercial officer Gadi Bashvitz.
When asked who NeuraLegion views as its closest competitors, Bashvitz said Invicti Security and WhiteHat Security. Both are known primarily for their static application security testing (SAST) solutions, which Bashvitz said complements DAST products like NeuraLegion’s.
“These are complementary solutions and in fact we have some information partnerships with some of these companies,” he said.
Where NeuraLegion differentiates from other application security solutions, however, is that it was created for specifically for developers, quality assurance and DevOps workers, so even though it can also be used by security professionals, it allows scans to be run much earlier in the development process than usual while lowering costs.
Bashvitz added that NeuraLegion is now used by thousands of developers through their organizations, but it is releasing its self-serve, community product to make its solutions more accessible to developers, who can sign up on their own, run their first scans and get results within fifteen minutes.
In a statement about the funding, DNX Ventures managing partner Hiro Rio Maeda said, “The DAST market has been long stalled without any innovative approaches. NeuraLegion’s next-generation platform introduces a new way of conducting robust testing in today’s modern CI/CD environment.”
There are more than 2 billion websites in existence in the world today, millions of apps, and a growing range of digital screens where people and businesses present constantly changing arrays of information to each other. But all that opportunity also has a flip side: how can you say what you want, just how you want to say it, without technical hurdle after hurdle getting in your way?
A startup called Sanity has built a platform to help businesses (and their people) do that more easily with a SaaS platform that lets developers create code and systems to manage content. Now, after picking up some 25,000 customers, from “traditional” publishers like Conde Nast and National Geographic through to hundreds of others like Sonos, Brex, Figma, Cloudflare, Mux, Remarkable, Kleiner Perkins, Tablet Magazine, MIT, Universal Health Services, Eurostar, and Nike, it is announcing funding of $9.3 million to fuel its growth.
The funding, a Series A, is being led by Threshold Ventures (the VC formerly known as Draper Fisher Jurvetson, rebranded in 2019 after none of the namesakes remained at the firm), with an interesting cast of others also participating.
They include Ev Williams (who knows a thing or two about ‘content’ as the co-founder of Blogger, Twitter and most recently Medium); Adam Gross, ex-CEO of Heroku; Guillermo Rauch, inventor of NextJS and CEO and co-founder of Vercel; Stephanie Friedman (ex-Xamarin and Microsoft); and Monochrome Capital, the new firm launched by Ben Metcalfe (the co-founder of WP Engine, among many other roles).
Heavybit and Alliance Venture, which led its seed round of $2.4 million last year, also participated. Other existing investors include Matthias Biilman and Chris Bach, co-founders of Netlify; Jon Dahl, CEO and co-founder of Mux; and Edvard Engsæth, co-founder of NURX.
Sanity bills itself as a “content platform”, and the open-ended idea of what that could possibly mean is essentially the essence of what the company is about.
Led by co-founder and CEO Magnus Hillestad, it has crafted a set of tools that can help developers structure how and where content gets created, input and eventually presented to people, with its target audience being any organization or person that might be putting together a digital experience whose content is regularly updated and is not static.
Hillestad said that thinking of content as a separate and dynamic element in digital experiences represents a “paradigm shift” in terms of how the web and other content experiences are developing. The idea, he said, is for an organization “not to be held back by features but to have the code to make the components they want.” He described it as a progression along the same trajectories of “what Twilio did by coming in with APIs for communications, and Figma did with its concept of collaboration.”
While e-commerce has typically been a major customer of such “headless” platforms — they will use services like these to help design and manage the front end, with another service like Shopify to manage the commerce at the back end — it’s actually a basic framework that has been applied to a pretty wide range of use cases at Sanity.
They do include e-commerce experiences, but also companies building interactive tools for customers to look at, mix, and match various light fixtures from a lighting consultancy; more standard publishing services; and for helping tailor materials for emergency medical training services.
These days, the medium, as they say, is the message, and in that regard “publishing” has taken on a new meaning in the digital age. Whereas in the past it only referred to materials prepared for print, such as books, magazines and newspapers, these days it can be any kind of content prepared for the web or any other endpoint where it will not only be “read” but potentially manipulated in some way, and likely also changed by the producers as well. The very un-static nature of that content makes it fun and interesting, but also a pain to manage.
Sanity has a notable origin that speaks to how it has always given a wide berth and prime positioning to the sanctity of content. It was built originally by an agency in Oslo, Norway, as part of a remit to rethink and recast how to present works for a new website for OMA, the architecture firm co-founded by the iconic Dutch designer Rem Koolhaas.
The information matrix and content management system concept that they put together was strong enough to use the agency to build more sites using the CMS, and eventually the firm spun Sanity out as its own independent firm, founded by Even Westvang, Hillestad, Oyvind Rostad and Simen Svale Skogsrud.
Part of the team, including Hillestad, relocated to the Bay Area to build the startup and integrate it deeper with the bigger tech ecosystem in the region and build out the concept under a SaaS model, while others remained in Oslo.
In its move to the US, Sanity has over the past few years been tapping into a growing market for services to enable those who rely on the web to do business do it in a more creative and dynamic way.
“A decade ago, I co-founded WP Engine with the goal of bringing the power of WordPress to the enterprise and small business buyer,” said Metcalfe in a statement. “Not only are we moving away from monolithic codebases to API-driven services, but the way we think about content is changing; as we create once and expect it to appear across web, apps and even IoT devices. Sanity has reimagined the headless CMS, bringing content closer to the developer where it can exist as the defacto content system of record across an entire organization. With CMS so close to my roots, I couldn’t be more delighted that Sanity is the inaugural investment for Monochrome Capital.”
It is not the only company in this wider area getting a lot of attention. Last week, Shogun — which focuses only on e-commerce and front-end design, raised $35 million. Others include Commercetools, Commerce Layer, Strapi, Contentful, and ContentStack. Sanity stands out partly by keeping its focus wider than e-commerce and by not using the words “content” or “commerce” in its name.
“We’re seeing a tidal wave of companies transform and digitize every aspect of their business, but the tools they use limit their progress,” said Josh Stein, partner, Threshold Ventures, in a statement. “Sanity’s content platform liberates content and content owners by enabling a truly collaborative and customizable experience, while treating content as data to maximize content velocity across all customer touchpoints and surfaces. We’re excited to back the Sanity team and their impressive developer-focused content management platform.”
Stein and Jesse Robbins, a partner at Heavybit, are both joining Sanity’s board of directors with this round.
Atlassian has been offering collaboration tools, often favored by developers and IT for some time with such stalwarts as Jira for help desk tickets, Confluence to organize your work and BitBucket to organize your development deliverables, but what it lacked was machine learning layer across the platform to help users work smarter within and across the applications in the Atlassian family.
That changed today, when Atlassian announced it has been building that machine learning layer called Atlassian Smarts, and is releasing several tools that take advantage of it. It’s worth noting that unlike Salesforce, which calls its intelligence layer Einstein or Adobe, which calls its Sensei; Atlassian chose to forgo the cutesy marketing terms and just let the technology stand on its own.
Shihab Hamid, the founder of the Smarts and Machine Learning Team at Atlassian, who has been with the company 14 years, says that they avoided a marketing name by design. “I think one of the things that we’re trying to focus on is actually the user experience and so rather than packaging or branding the technology, we’re really about optimizing teamwork,” Hamid told TechCrunch.
Hamid says that the goal of the machine learning layer is to remove the complexity involved with organizing people and information across the platform.
“Simple tasks like finding the right person or the right document becomes a challenge, or at least they slow down productivity and take time away from the creative high-value work that everyone wants to be doing, and teamwork itself is super messy and collaboration is complicated. These are human challenges that don’t really have one right solution,” he said.
He says that Atlassian has decided to solve these problems using machine learning with the goal of speeding up repetitive, time-intensive tasks. Much like Adobe or Salesforce, Atlassian has built this underlying layer of machine smarts, for lack of a better term, that can be distributed across their platform to deliver this kind of machine learning-based functionality wherever it makes sense for the particular product or service.
“We’ve invested in building this functionality directly into the Atlassian platform to bring together IT and development teams to unify work, so the Atlassian flagship products like JIRA and Confluence sit on top of this common platform and benefit from that common functionality across products. And so the idea is if we can build that common predictive capability at the platform layer we can actually proliferate smarts and benefit from the data that we gather across our products,” Hamid said.
The first pieces fit into this vision. For starters, Atlassian is offering a smart search tool that helps users find content across Atlassian tools faster by understanding who you are and how you work. “So by knowing where users work and what they work on, we’re able to proactively provide access to the right documents and accelerate work,” he said.
The second piece is more about collaboration and building teams with the best personnel for a given task. A new tool called predictive user mentions helps Jira and Confluence users find the right people for the job.
“What we’ve done with the Atlassian platform is actually baked in that intelligence, because we know what you work on and who you collaborate with, so we can predict who should be involved and brought into the conversation,” Hamid explained.
Finally, the company announced a tool specifically for Jira users, which bundles together similar sets of help requests and that should lead to faster resolution over doing them manually one at a time.
“We’re soon launching a feature in JIRA Service Desk that allows users to cluster similar tickets together, and operate on them to accelerate IT workflows, and this is done in the background using ML techniques to calculate the similarity of tickets, based on the summary and description, and so on.”
All of this was made possible by the company’s previous shift from mostly on-premises to the cloud and the flexibility that gave them to build new tooling that crosses the entire platform.
Today’s announcements are just the start of what Atlassian hopes will be a slew of new machine learning-fueled features being added to the platform in the coming months and years.
When Jen Grant joined Turbo Systems, the no-code mobile application platform, as CEO in March, she came on board just as COVID was shutting down businesses, but she went straight to work and over the last six months she has led two major initiatives that the company announced today: a name change and a new app marketplace.
For starters, the company is changing its name to Appify to more accurately reflect its mission around building mobile apps. She says that they found most people related the term “turbo” to cars. They began looking for a better name that was more closely aligned with what they do when her team stumbled across Appify.
“We had been playing around with different names and what are we were about, and a lot of what we’re about is amplifying your business and your systems and your people with apps. And so when we kind of stumbled across Appify and the domain name was available, we moved quite quickly,” Grant explained.
While she was at it, Grant was talking to customers, and while the core company mission is to make it easy to build mobile apps, especially in the field service space, she felt that they could make it even easier. Rather than asking customers to build the apps themselves, they could provide a marketplace with some pre-built apps and simply let them customize them for their workflows.
“What we have done with the Appify Marketplace is instead of saying, here’s a box of parts, now fix your business problem, we’re saying, here’s an app that you can launch in minutes. It has all of the functionality that you will need […] and you can then very easily customize it using this no code platform to make it specific to your business,” she said.
The marketplace is launching today with a couple of apps aimed at the company’s core field service market including Field Sales, which allows salespeople in the field to send a bid or quote from a tablet directly from the field without having to return to the office. The other is a Field Service app for repair people, which provides all of the information about the repair, while allowing the service rep to update the customer record from the field using a mobile device.
Grant says this is just the start and there are many apps on the road map that they will be releasing in the coming months. Eventually, they may have systems integrators use the platform to build apps for specific industries as they move forward.
Appify was born as Turbo Systems in 2017 and has raised over $11 million, according to Pitchbook data.
Frontegg, a Tel Aviv-based startup that helps SaaS companies build their products faster by giving them access to a set of enterprise-ready building blocks for often-used features like authentication and notifications, today announced that it has raised a $5 million seed round. The round was led by Pitango, with backing from i3 Equity and Global Founders Capital.
The founders of Frontegg, Sagi Rodin (CEO) and Aviad Mizrachi (CTO), met during their time at security company Check Point, where Mizrachi managed an R&D group and Rodin’s last role was that of director in its cloud security organization. Both have extensive experience in various management and engineering roles at other companies.
“Most of the SaaS products today kind of feel and act the same,” Rodin explained. “They provide the same capabilities and the same user experience around things like authentication, security, notification, reporting dashboards and capabilities like that. These are capabilities that have become the facto standard in the landscape of modern SaaS products.”
Frontegg, he hopes, can become the new standard for SaaS companies to build these kinds of features into their products.
“Over the last decade, the SaaS market has matured and customer expectations for SaaS features have become firmly established,” said Ayal Itzkovitz, managing partner at Pitango Early Stage, who will join the company’s board of directors. “SaaS companies building products powered by the Frontegg platform can supercharge SaaS innovation, simplifying the development process while delivering solutions with the confidence they will be secure, stable and scalable, all the while meeting high customer expectations for experience and performance.”
For the most part, these are also table stakes that take a long time to develop — or involve bringing in expensive third-party services — but that don’t help these companies differentiate and that take focus away from developing their own products. The idea behind Frontegg is to give dev teams the building blocks to integrate all of these capabilities into their own products.
Right now, the team is focusing on building out tools around three main areas: security, connectivity and engagement. That includes the ability to add enterprise-level authentication through third-party identity providers, setting up roles and permissions for users and audit logs, for example, as well as features like in-app alerts, push notifications and various reporting capabilities.
In part, the company’s philosophy is also to give these companies the ability to allow their own customers to self-manage everything on their own, so a lot of these building blocks focus on giving SaaS companies the ability to build these self-service capabilities into their products.
Interestingly, Rodin noted that a lot of companies that are using the service today aren’t starting from zero but are looking to integrate new capabilities quickly because their users are demanding them.
Right now, the one-year-old company has 16 employees, with plans to use the new funding to expand the team and build out the product.
The concept of a developer portal is to provide the necessary technical information to configure and manage the communication between an API and both internal and external systems. Originally, it was not thought of as a business-generating tool for companies that adopt them. Rather, it was an interface between APIs, SDKs and other digital tools and their administrators.
However, over time, many developer portal elements have caused friction for partners and resulted in higher costs for the company providing the data through APIs.
An alternative option to replace a developer portal is a Hybrid Integration Platform (HIP), a simple system connection solution that has the potential to generate more business through pairing ecosystems directly, efficiently and at a lower cost.
The leading cause of friction within a developer portal is the amount of time it takes to create and support it. Quite often, an integration is delayed because the company providing the API is stuck waiting for support from the people they are working with.
To fulfill the demand for consumers in different stages of maturity, companies providing APIs later realized they needed to provide more data, new business cases and different mappings and transformations.
Once the portal and APIs adapt to the system, three key factors are necessary to provide a good user experience in the developer portal:
Frequently, isolated and disconnected business challenges complicate developer portal implementations. To avoid such challenges, you should address these questions before the implementation process takes place:
When approaching a systems integration, it’s essential to develop a solution that considers business results first, before simplifying or removing any technical issues. Fixing predicted issues before they become problems only wastes time and takes the focus off the goal of making your business more efficient and profitable. Yet, many times we see the opposite happen — businesses tend to spend too much time fixing problems before they even occur.
The pandemic has forced businesses to change the way they interact with customers. Whether it’s how they deliver goods and services, or how they communicate, there is one common denominator, and that’s that everything is being forced to be digitally driven much faster.
To some extent, that’s what drove Twilio to acquire Segment for $3.2 billion today. (We wrote about the deal over the weekend. Forbes broke the story last Friday night.) When you get down to it, the two companies fit together well, and expand the platform by giving Twilio customers access to valuable customer data. Chee Chew, Twilio’s chief product officer says while it may feel like the company is pivoting in the direction of customer experience, they don’t necessarily see it that way.
“A lot of people have thought about us as a communications company, but we think of ourselves as a customer engagement company. We really think about how we help businesses communicate more effectively with their customers,” Chew told TechCrunch.
Laurie McCabe, co-founder and partner at SMB Group, sees the move related to the pandemic and the need companies have to serve customers in a more fully digital way. “More customers are realizing that delivering a great customer experience is key to survive through the pandemic, and thriving as the economy recovers — and are willing to spend to do this even in uncertain times,” McCabe said.
Certainly Chew recognized that Segment gives them something they were lacking by providing developers with direct access to customer data, and that could lead to some interesting applications.
“The data capabilities that Segment has are providing a full view of the customer. It really layers across everything we do. I think of it as a horizontal add across the channels and extending beyond. So I think it really helps us advance in a different sort of way […] towards getting the holistic view of the customer and enabling our customers to build intelligence services on top,” he said.
Brent Leary, founder and principal analyst at CRM Essentials, sees Segment helping to provide a powerful data-fueled developer experience. “This move allows Twilio to impact the data-insight-interaction-experience transformation process by removing friction from developers using their platform,” Leary explained. In other words, it gives developers that ability that Chew alluded to, to use data to build more varied applications using Twilio APIs.
Paul Greenberg, author of CRM at the Speed of Light, and founder and principal analyst at 56 Group agrees saying, “Segment gives Twilio the ability to use customer data in what is already a powerful unified communications platform and hub. And since it is, in effect, APIs for both, the flexibility [for developers] is enormous,” he said.
That may be so, but Holger Mueller, an analyst at Constellation Research says the company has to be seeing that the pure communication parts of the platform like SMS are becoming increasingly commoditized, and this deal, along with the SendGrid acquisition in 2018, gives Twilio a place to expand its platform into a much more lucrative data space.
“Twilio needs more growth path and it looks like its strategy is moving up the stack, at least with the acquisition of Segment. Data movement and data residence compliance is a huge headache for enterprises when they build their next generation applications,” Mueller said.
As Chew said, early on the problems were related to building SMS messages into applications and that was the problem that Twilio was trying to solve because that’s what developers needed at the time, but as it moves forward, it wants to provide a more unified customer communications experience, and Segment should help advance that capability in a big way for them.
We have heard from a couple of industry sources that the deal is in the works and could be announced as early as Monday.
Twilio and Segment are both API companies. That means they create an easy way for developers to tap into a specific type of functionality without writing a lot of code. As I wrote in a 2017 article on Segment, it provides a set of APIs to pull together customer data from a variety of sources:
Segment has made a name for itself by providing a set of APIs that enable it to gather data about a customer from a variety of sources like your CRM tool, customer service application and website and pull that all together into a single view of the customer, something that is the goal of every company in the customer information business.
While Twilio’s main focus since it launched in 2008 has been on making it easy to embed communications functionality into any app, it signaled a switch in direction when it released the Flex customer service API in March 2018. Later that same year, it bought SendGrid, an email marketing API company for $2 billion.
Twilio’s market cap as of Friday was an impressive $45 billion. You could see how it can afford to flex its financial muscles to combine Twilio’s core API mission, especially Flex, with the ability to pull customer data with Segment and create customized email or ads with SendGrid.
This could enable Twilio to expand beyond pure core communications capabilities and it could come at the cost of around $5 billion for the two companies, a good deal for what could turn out to be a substantial business as more and more companies look for ways to understand and communicate with their customers in more relevant ways across multiple channels.
As Semil Shah from early stage VC firm Haystack wrote in the company blog yesterday, Segment saw a different way to gather customer data, and Twilio was wise to swoop in and buy it.
Segment’s belief was that a traditional CRM wasn’t robust enough for the enterprise to properly manage its pipe. Segment entered to provide customer data infrastructure to offer a more unified experience. Now under the Twilio umbrella, Segment can continue to build key integrations (like they have for Twilio data), which is being used globally inside Fortune 500 companies already.
Segment was founded in 2011 and raised over $283 million, according to Crunchbase data. Its most recent raise was $175 million in April on a $1.5 billion valuation.
Twilio stock closed at $306.24 per share on Friday up $2.39%.
Neither Segment nor Twilio responded to our request for comment. If that changes, we will update the story.
Picture yourself in the role of CIO at Roblox in 2017.
At that point, the gaming platform and publishing system that launched in 2005 was growing fast, but its underlying technology was aging, consisting of a single data center in Chicago and a bunch of third-party partners, including AWS, all running bare metal (nonvirtualized) servers. At a time when users have precious little patience for outages, your uptime was just two nines, or less than 99% (five nines is considered optimal).
Unbelievably, Roblox was popular in spite of this, but the company’s leadership knew it couldn’t continue with performance like that, especially as it was rapidly gaining in popularity. The company needed to call in the technology cavalry, which is essentially what it did when it hired Dan Williams in 2017.
Williams has a history of solving these kinds of intractable infrastructure issues, with a background that includes a gig at Facebook between 2007 and 2011, where he worked on the technology to help the young social network scale to millions of users. Later, he worked at Dropbox, where he helped build a new internal network, leading the company’s move away from AWS, a major undertaking involving moving more than 500 petabytes of data.
When Roblox approached him in mid-2017, he jumped at the chance to take on another major infrastructure challenge. While they are still in the midst of the transition to a new modern tech stack today, we sat down with Williams to learn how he put the company on the road to a cloud-native, microservices-focused system with its own network of worldwide edge data centers.
Startups that deliver their service via an API are having a moment. Or perhaps a year.
Speaking with founders and investors this year, it has become clear that the API model of delivering a product is more than an occasional hit-maker for companies like Twilio or Plaid. Instead, it appears that there is ample room for lots of API-powered startups to build and prosper.
TechCrunch took note of a cluster of funding rounds for API-powered startups earlier this year, only to see more of the same as startups like Alpaca (equities trading via an API) reported massive growth and Noyo (APIs that link players in the health insurance market) raised new capital.
There’s more to come. Twilio’s Jeff Lawson told TechCrunch recently that “the world is getting broken down into APIs” as “every part of the stack of business that a developer might need to build is eventually turning into APIs that developers can use.”
We should expect to see more startups, then, pursuing the business model as time passes.
To dig deep into the API-focused startup space, we’ve done something unusual today. Instead of merely ringing a bunch of VCs to get their take — though we did that as well — we took the time for this survey to also bring a number of entrepreneurs into the conversation.
With two sets of questions targeted at each group, here’s who we corresponded with:
And they had a lot to say.
We’ll limit ourselves to two themes from investors and two from founders. But don’t worry, as we’ve embedded full responses down below.
Starting with investors, our chief takeaway was that the money folks are bullish on not only the current generation of API-powered startups, but also on their future. We asked about the possible union between API-powered startups and low-code/no-code technologies. Our hunch was that as more folks can code in some manner, and APIs get better, there comes a day when nontraditional developers can leverage application programming interfaces.
That day, if it comes, could provide a huge boost to the startups in the space, right? Root VC’s Edward seems to think so. He answered our question about the possibility of nontraditional developers interacting with APIs in the future with an enthusiastic yes, adding that he believes that “eventually almost everyone will be a programmer, but that our definition of programmer will expand to fit a much broader range of activities.” That could mean lots more folks out there ingesting, using and paying for access to APIs that startups will be there to offer.
Even more, Edwards added that the same forces work in reverse, that “API-driven businesses enable low-code implementations and give superpowers to junior developers or people who don’t consider themselves developers at all.”
Shasta’s Roth agreed, saying that “these are highly related segments: low code and APIs.”
Our second investor takeaway is that it’s too simplistic to merely say that API-focused startups are going to be akin to SaaS startups in many ways, albeit with lower gross margins. They are not worse businesses than SaaS startups. Instead, they are different. Roth noted, for example, that API-delivered startups should have strong gross retention (logo retention), but that they may not have strong upselling power (net retention). Adding to the nuance of the conversation around economics, the Accel duo said that while API-powered startups may have “endemically lower” gross margins than SaaS startups, they also often feature “lower spend on sales and marketing and stronger net retention, both via lower churn and faster, bigger expansion.”
So, the net retention point is probably not fully settled yet, but what is clear is that our previous view of API startup economics is probably a bit simplistic.
From our trio of founders, two quick things. First, the venture capital community is as active as you’d expect, especially when it comes to preemption. Second, their startups tend to have improving economic profiles over time. The question for them then becomes how far they can run the gross margin numbers up before they go public.
We’ll see. You’ll find full answers below, lightly edited for clarity:
Are API-delivered startups a plank in your firm’s general investment thesis? If so, why?
Yes, very much. But making APIs an investing pillar is like making SaaS an investing pillar — it’s too broad. Rather, we have integrated the understanding that there is a shift to composable capabilities and that it is no longer the domain of custom expensive integrators to hook these capabilities together. The secret sauce is what industries will this affect in which ways, what are the opportunities that arise as a result, which types of APIs will be adopted first and last, of course, where does value lie?
We also see increasing use of APIs by enterprises leading to startups creating solutions for enterprises to manage, monitor and secure APIs and home-grown applications created using those APIs.
Are you seeing most API-delivered startups in the market for capital today find new places to apply APIs, or are you seeing the majority of startups pursuing the model working inside of market areas known to be API-friendly? What market segment is the ripest for API-delivered startup disruption?
The unbundling of financial services, which makes way for innovation and personalized experiences is a great opportunity. That one is easier to realize. An underappreciated opportunity is in HR and corporate finance where monolithic applications integrate many functionalities that could benefit from evolving separately and could be knit together by each enterprise in a manner that is oriented toward their unique needs.
Security is another industry where every solution seems to have its own stovepipe interface and yet most CIOs and CISOs want integrated panes of glass. There will be low-code solutions for aggregation security information and response. Additionally, we predict a significant increase in the use of APIs within enterprises and CISOs to look for solutions to manage access and threats emerging from these APIs.
Finally, think about commerce — a segment that has already benefited from the API economy — it was the original poster child for APIs and is finally catching up to that promise. However, because the nature of commerce is being accelerated due to COVID there is a lot of room left here.
Is the economic profile of API-delivered startups, especially from a gross-margin perspective, still on track to land one level below that of SaaS startups?
Until APIs have proprietary value by aggregating data (see my article about this in Programmable Web) the switching cost is lower than SaaS because there isn’t as much stickiness from needing to retrain a workforce if you switch. This means customers have more pricing power. Similarly, APIs enable competition because they define a standard interaction, and this causes lower margins. But keep reading for how to overcome this.
Does strong retention rates amongst API-delivered startups countermand their more limited gross margin profile?
Related to the above, a well-performing API will retain customers but it may not have as strong net retention as SaaS unless the API business can aggregate more value either beneath the API (more functionality) or around the API (management, integration, workflow, compliance, risk management, etc.).