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Startup founders must overcome information overload

By Walter Thompson
Mercedes Bent Contributor
Mercedes Bent is a partner at Lightspeed where she invests in consumer, edtech and fintech companies.

Many of the founders I spoke to said one of their biggest early challenges was figuring out how to sift through all the advice they receive.

Advice overload plagues everyone and founders have it especially bad, given that most startups have a board of advisors. Founders described needing conviction in their decisions and preserving carved out time for their own information processing. They viewed the ability to sift through all this advice as a crucial skill to learn. 

There is so much information out there, you end up driving yourself crazy,” said Devin Lennon, founder of end-of-life advice service Death Doula Devin. “Figuring out who is more helpful than others was difficult. Typically people with more experience tended to be more helpful, but not always,” said Hardbound founder Nathan Bashaw. “We wasted a lot of time talking to the wrong people.”

According to Ryan Williams, CEO and co-founder of proptech platform Cadre, “The real challenge is who you listen to for which points. You get information overload. The real skill is pattern recognition over time of who is actually useful for good information — knowing who to listen to and for what. You get a lot of conflicting advice. That’s where I’ve grown the most.”

Special raises $2.26M to build a subscription platform for online creators

By Anthony Ha

Special is a new startup offering online video creators a way to move beyond advertising for their income.

The service was created by the team behind tech consulting and development firm Triple Tree Software. Special’s co-founder and CEO Sam Lucas told me that the team had already “scrapped our way from nothing to a seven-figure annual revenue,” but when the founders met with Next Frontier Capital (Next Frontier, like Special, is based in Bozeman, Montana) they pitched a bigger idea — an app where creators charge a subscription fee for access to premium content.

While Triple Tree started in the service business, Lucas explained that the goal was always to create “a product company that we could sell for $100 million.” Now Special is announcing that it has raised $2.26 million in seed funding from Next Frontier and other investors.

It’s also built an initial version of the product that’s being tested by friends, family and a handful of creators, with plans for a broader beta release in October.

With online advertising slowing dramatically during the COVID-19 pandemic, YouTube recently highlighted the fact that 80,000 of its channels are earning money from non-ad sources, and that the number of creators who receive the majority of their income from those sources grew 40% between January and May.

One of the main ways that creators can ask their viewers for money is through Patreon. Lucas acknowledged Patreon as a “very big inspiration” for Special, but he said that conversations with creators pointed to a few key ways that the service falls short.

Special

Image Credits: Special

For one thing, he argued while contributions on Patreon are framed as “donations” or “support,” Special allows creators to emphasize the value of their premium content by putting it behind a subscription paywall. patreon supports paywalls as well, but that leads to Lucas’ next point — it was built built for creators of all kinds, while Special is focused specifically on video, and it’s built a high-quality video player into the experience.

In fact, Lucas described Special’s spin on the idea of a white labeled product as “silver label.” The goal is to create “the perfect balance between a platform and a custom app” — creators get their own customizable channels that emphasize their brand identity (rather than Special’s), while still getting the distribution and exposure benefits of being part of a larger platform, with their content searchable and viewable on web, mobile and smart TVs.

Creators also retain ownership of their content, and they get to decide how much they want to charge subscribers — Lucas said it can be anywhere between “$1 or $999” per month, with Special taking a 10% fee. He added that the team has plans to build a bundling option that would allow creators to team up and offer a joint subscription.

Lucas’ pitch reminded me of startups like Vessel (acquired and shut down by TechCrunch’s parent company Verizon in 2016), which previously hoped to bring online creators together for a subscription offering. In Lucas’ view, Vessel was similar to newer apps like Quibi, in that they directly funded creators to produce exclusive content.

“It’s a billion-dollar arms race, with what used to be a technology play but is now a production studio play,” he said. Special doesn’t have the funding to compete at that level, but Lucas suggested that a studio model also provides the wrong incentives to creators, who say “Hell yeah, keep those checks coming in,” but disappear “the moment the checks stop.”

“I almost think it’s an egotistical play,” Lucas added. “The company thinks they know best what a creator should produce for an audience that doesn’t exist yet. We say: Let them do it on Special. Do whatever you want, as long as you follow our terms of service, and own your creative vision.”

It might also seem like a big challenge to recruit creators while based in Montana, but Lucas replied that Special has more access than you might think, especially since the town has become “such a hotspot for extremely wealthy people to buy their third home.”

More broadly, he suggested that the distance from Hollywood and Silicon Valley “allows us to not follow the trends of every new streaming platform and [instead] truly find those independent creators underneath the woodworks.”

Without desks and a demo day, are accelerators worth it?

By Natasha Mascarenhas

As a result of the pandemic, accelerators have moved operations fully remote to abide by social distancing. The shift has forced well-known programs like 500 Startups, Y Combinator and Techstars to go fully online, while encouraging existing venture capital firms to launch new digital-only fellowships like Cleo Capital and NextView Ventures.

Before the pandemic, accelerators could advertise their value by lending desk space once used by Airbnb, Twilio and Brex’s co-founders, plus a glitzy demo day. Now, stripped of their in-person element, the actual value of an accelerator program — and the network they provide — is being tested in new ways.

So a question remains for participating founders: Are they getting the benefits of what they thought they signed up for?

In the Zoom where it happened

The last thing Michael Vega-Sanz wanted to do was was join another Zoom get-together for entrepreneurs. But the car-sharing company he co-founded with twin brother Matthew was in the middle of a pivot, so they joined NextView Ventures’ inaugural remote accelerator program.

“I envisioned an accelerator with awkward happy hours, mass Zoom calls,” Vega-Sanz said. Fast-forward one month into the program, he says it “has been quite the opposite.”

Before joining NextView’s accelerator, Vega-Sanz did an in-person incubator at Babson College in Boston, but there’s “a lot less fluff” in being virtual, he told TechCrunch.

“[With in-person] the reality was you’d go to lunch, and by the time you drove over there and had all your side talk, small talk, chit-chat and actually got into the nitty-gritty of the event, there was a lot of time loss,” he said. “You could have been working for your company during that time.”

If possible, Vega-Sanz still recommends that first-time founders attend a physical accelerator instead of a virtual one for the energy it brings, even with the downside of useless events.

Nextdoor launches Sell for Good for easy donations to local nonprofits

By Anthony Ha

Nextdoor is launching a new feature called Sell for Good, allowing uses to sell items on the neighborhood-focused social network and donate the proceeds to local nonprofits.

CEO Sarah Friar said that since the pandemic started, conversations about donations have increased 7x on Nextdoor .

“Communities are hurting,” Friar said. “People are looking to go donate, but things like Goodwill and so on are closed.”

At the same time, nonprofits are struggling. Pointing to a recent survey from the Nonprofit Finance Fund, she explained, “A lot of them depend on in-person events — the race that you might do, the book drive they always have, all of that has dried up.”

One way to support those nonprofits is to sell goods (perhaps the very same goods you were planning to give to Goodwill) on Nextdoor’s For Sale and Free section and then donate the money from the sale. In fact, Product Manager Rhett Angold said that users have already been doing this — for example, someone in Berkeley raised thousands of dollars for a local animal shelter by selling homemade masks.

So Sell for Good is designed to make this process as straightforward as possible. Nextdoor has partnered with the PayPal Giving Fund to support nonprofits in different cities, including A Better Chicago, LA Voice, New York Cares, Operation HOPE, Spark, The Hidden Genius Project and ViBe Theater Experience.

Sellers can choose which organization to support, then their sale will be identified as a donation. Once an item has been purchased, the seller can approve the donation and they’ll receive a receipt for their tax-deductible contribution.

And while the feature currently donates the full sale proceeds (minus the “typical PayPal processing fees”), Angold said his team is working on giving sellers the ability to donate a smaller portion as well.

Sell for Good is currently available to all Nextdoor users in the United States.

Mighty Health created a wellness app with older adults top of mind

By Natasha Mascarenhas

Virtual classes might make it easier to work out anywhere, anytime, but not for anyone. Mainstream fitness tech often targets the young and fit, in advertisements and cardio-heavy exercises. It effectively excludes aging adults from participating.

This gap between mainstream fitness and elders is where Mighty Health, a Y Combinator graduate, comes in.

Mighty Health has created a nutrition and fitness wellness app that is tailored to older adults who might have achy hips or joint problems. Today, the San Francisco-based startup has announced it raised $2.8 million in funding by Y Combinator, NextView Ventures, RRE Ventures, Liquid2 Ventures, Soma Capital and more.

Founder and CEO James Li is the child of immigrants, a detail he says helped him lean into entrepreneurship. He had the idea for Mighty Health after his father was rushed to the hospital for emergency open-heart surgery.

“Growing up, we can often think of our parents as invincible — they look after you and take care of you, and you usually don’t worry too much about them,” Li said. His dad survived the surgery, and Li thought about the evolving health needs and limitations of folks over 50 years old. He teamed up with co-founder Dr. Bernard Chang, the youngest-ever ED doctor to receive a top-tier NIH grant and the vice chair of research at Columbia University Medical Center, to create Mighty Health.

Mighty Health’s product is focused on three things: live coaching; content focused on nutrition, preventative checkups and workouts; and celebrations that let family members tune into their loved ones’ achievements.

The app has inclusivity built into its functionality. Everyday, a user logs in and gets a set of three to five tasks to complete, distributed among nutrition, exercise and workouts. The workouts are pre-recorded videos with trainers that have focused on the over-50 population. Think indoor cardio sets focused on being kinder to joints or lower her impacts.

Image Credits: Mighty Health

One customer, Elizabeth, is a 56-year-old mother who joined Mighty Health after suffering a cardiac incident. The app got her to start walking 9,000 steps a day, lose weigh, lower cholesterol and, best of all, discover a love for a vegetable she had recently written off: brussels sprouts.

Mighty Health’s other core focus, beyond fitness, is nutrition. The app pairs users with a coach to help them create healthy habits around nutrition and lifestyle. The coaching is done through text message. Li says this was intentional because in the early days of Mighty Health, he saw that coaching in-app was difficult for users to navigate.

Image Credits: Mighty Health

“You have to meet them in the middle where they are,” Li said. The live coaching is also met with phone calls, although 90% of coach interactions are text-message based.

The nutrition program also accounts for a diverse user base. Mighty Health chose not to offer or push recipes upon members, unlike a lot of other applications, because all countries and cultures might not find generic recipes accessible.

“Instead, we focus on the ingredient level,” he said. “We send them ingredients that they can piece together however they like at home in the way that they cook their cultural meals.”

The company offers a free seven-day trail, followed by a membership fee of $20 per month. It’s also having discussions with a number of health insurers to offer Mighty Health as a benefit.

With the new capital, the startup hired a few engineers and a designer to build out product integrations with fitness trackers, plus add new content. For now, Li sees his father’s progress with pride.

“Though I’m sure he sometimes thinks I just went from nagging him directly to nagging him through my product, he’s been eating healthier and exercising nearly every day,” Li said. So far, his father has lost 25 pounds.

Autonomous drone startup Skydio raises $100 million and launches the X2 commercial drone

By Darrell Etherington

Skydio has raised a $100 million Series C funding round, which was led by Next47 and includes participation from other new investors Levitate Capital and NTT DOCOMO Ventures, as well as existing investors a16z, IVP and Playground. This new funding will help the drone maker move faster on its product development efforts, and expand its go-to-market strategy to cover not only consumer applications, but also enterprise and public sector drone technology, the company says. To serve the market, Skydio also launched the X2 family of drone hardware today, which is designed for commercial use.

Founded in 2014, Skydio has raised $170 million total and launched two consumer-focused drones to date, both of which employ artificial intelligence technology to give them autonomous navigation capabilities. This means their drones can actively track objects and people, while simultaneously avoiding potential collisions with objects, including trees, power lines and other obstacles. The end result is video that looks like it was recorded by a professional film crew in a helicopter, but available to the general consumer market in a sub-$1,000 price point.

The first Skydio drone, the R1, was launched in 2018, and retailed for $2,499. Its intelligence and tracking capabilities were impressive, and were later improved via software updates and the second-generation hardware, which launched last year and is currently available for order.

Skydio’s new X2 drone platform is designed for enterprise use, and will ship in Q4 of this year, according to the company. It includes an onboard 360-degree superzoom camera, a FLIR 320×256 resolution thermal imaging camera, a battery life of 35 minutes of flying time and a maximum range of 6.2 miles. There’s also a Skydio Enterprise Controller for the drone, which has a touchscreen, hardware controls and a protective hood to block glare.

The move from consumer to enterprise makes a lot of sense for Skydio; the same collision avoidance features and easy piloting for which the company has received praise in the consumer world are very applicable in enterprise use. The company says that its close-proximity avoidance tech, which allows for very tight tolerances in flight, make it a great candidate for doing things like remote infrastructure and equipment inspection, where having a person do those would be dangerous or impossible.

X2 can also capture 180-degree images directly above itself, which makes it uniquely capable of inspecting bridge spans and other overhead construction from a different perspective than is offered by many rotor-drones like this one. And the infrared coverage means it can operate day and night, and provide heat-maps of targets.

Skydio will still serve the consumer market as well, but this progression throughout its brief history is likely a very attractive one for investors: The company went from an expensive, but highly capable, consumer product accessible only to a few individuals, to a much more accessibly priced but still high-tech offering, and now appears to be turning the economies it has realized in its tech to the potentially much more lucrative enterprise hardware and software arena.

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