E-commerce now accounts for 14% of all retail sales, and its growth has led to a rise in the fortunes of startups that build tools to enable businesses to sell online. In the latest development, a company called VTEX — which originally got its start in Latin America helping companies like Walmart expand their business to new markets with an end-to-end e-commerce service covering things like order and inventory management, front-end customer experience and customer service — has raised $140 million in funding, money it will be using to continue taking its business deeper into more international markets.
The investment is being led by SoftBank, specifically via its Latin American fund, with participation also from Gávea Investimentos and Constellation Asset Management. Previous investors include Riverwood and Naspers; Riverwood continues to be a backer, the company said.
Mariano Gomide, the CEO who co-founded VTEX with Geraldo Thomaz, said the valuation is not being disclosed, but he confirmed that the founders and founding team continue to hold more than 50% of the company. In addition to Walmart, VTEX customers include Levi’s, Sony, L’Oréal and Motorola . Annually, it processes some $2.4 billion in gross merchandise value across some 2,500 stores, growing 43% per year in the last five years.
VTEX is in that category of tech businesses that has been around for some time — it was founded in 1999 — but has largely been able to operate and grow off its own balance sheet. Before now, it had raised less than $13 million, according to PitchBook data.
This is one of the big rounds to come out of the relatively new SoftBank Innovation Fund, an effort dedicated to investing in tech companies focused on Latin America. The fund was announced earlier this year at $2 billion and has since expanded to $5 billion. Other Latin American companies that SoftBank has backed include online delivery business Rappi, lending platform Creditas and property tech startup QuintoAndar.
The common theme among many SoftBank investments is a focus on e-commerce in its many forms (whether that’s transactions for loans or to get a pizza delivered), and VTEX is positioned as a platform player that enables a lot of that to happen in the wider marketplace, providing not just the tools to build a front end, but to manage the inventory, ordering and customer relations at the back end.
“VTEX has three attributes that we believe will fuel the company’s success: a strong team culture, a best-in-class product and entrepreneurs with profitability mindset,” said Paulo Passoni, managing investment partner at SoftBank’s Latin America fund, in a statement. “Brands and retailers want reliability and the ability to test their own innovations. VTEX offers both, filling a gap in the market. With VTEX, companies get access to a proven, cloud-native platform with the flexibility to test add-ons in the same data layer.”
Although VTEX has been expanding into markets like the U.S. (where it acquired UniteU earlier this year), the company still makes some 80% of its revenues annually in Latin America, Gomide said in an interview.
There, it has been a key partner to retailers and brands interested in expanding into the region, providing integrations to localise storefronts, a platform to help brands manage customer and marketplace relations, and analytics, competing against the likes of SAP, Oracle, Adobe and Salesforce (but not, he said in answer to my question, Commercetools, which builds Shopify -style API tools for mid and large-sized enterprises and itself raised $145 million last month).
E-commerce, as we’ve pointed out, is a business of economies of scale. Case in point: While VTEX processes some $2.5 billion in transactions annually, it makes a relatively small return on that — $69 million, to be exact. This, plus the benefit of analytics on a wider set of big data (another economy of scale play), are two of the big reasons VTEX is now doubling down on growth in newer markets like Europe and North America. The company now has 122 integrations with localised payment methods.
“At the end of the day, e-commerce software is a combination of knowledge. If you don’t have access to thousands of global cases you can’t imbue the software with knowledge,” Gomide said. “Companies that have been focused on one specific region are now realising that trade is a global thing. China has proven that, so a lot of companies are now coming to us because their existing providers of e-commerce tools can’t ‘do international.’ ” There are very few companies that can serve that global approach and that is why we are betting on being a global commerce platform, not just one focused on Latin America.”
Slack makes customer acquisition look easy.
The day we acquired our first Highspot customer, it was raining hard in Seattle. I was on my way to a startup event when I answered my cell phone and our prospect said, “We’re going with Highspot.” Relief, then excitement, hit me harder than the downpour outside. It was a milestone moment – one that came after a long journey of establishing product-market fit, developing a sustainable competitive advantage, and iterating repeatedly based on prospect feedback. In other words, it was anything but easy.
User-first products are driving rapid company growth in an era where individuals discover, adopt, and share software they like throughout their organizations. This is great if you’re a Slack, Shopify, or Dropbox, but what if your company doesn’t fit that profile?
Product-led growth is a strategy that works for the right technologies, but it’s not the end-all, be-all for B2B customer acquisition. For sophisticated enterprise software platforms designed to drive company-wide value, such as Marketo, ServiceNow and Workday, that value is realized when the product is adopted en masse by one or more large segments.
If you’re selling broad account value, rather than individual user or team value, acquisition boils down to two things: elevating account based-selling and revolutionizing the inside sales model. Done correctly, you lay a foundation capable of doubling revenue growth year-over-year, 95 percent company-wide retention, and more than 100 percent growth in new customer logos annually. Here are the steps you can take to build a model that realizes on-par results.
Account-based selling is not a new concept, but the availability of data today changes the game. Advanced analytics enable teams to develop comprehensive and personalized approaches that meet modern customers’ heightened expectations. And when 77 percent of business buyers feel that technology has significantly changed how companies should interact with them, you have no choice but to deliver.
Despite the multitude of products created to help sellers be more productive and personal, billions of cookie-cutter emails are still flooding the inboxes of a few decision makers. The market is loud. Competition is cut throat. It’s no wonder 40 percent of sales reps say getting a response from a prospect is more difficult than ever before. Even pioneers of sales engagement are recognizing the need for evolution – yesterday’s one-size-fits-all approach to outreach only widens the gap between today’s sellers and buyers.
Companies must radically change their approach to account-based selling by building trusted relationships over time from the first-touch onward. This requires that your entire sales force – from account development representatives to your head of sales – adds tailored, tangible value at every stage of the journey. Modern buyers don’t want to be sold. They want to be advised. But the majority of companies are still missing the mark, favoring spray-and-pray tactics over personalized guidance.
One reason spamming remains prevalent, despite growing awareness of the need for quality over quantity, is that implementing a tailored approach is hard work. However, companies can make great strides by doing just three things:
The holy grail of customer experience these days involves gathering all of the data on an individual customer into a single record. Today at Dreamforce, the company’s massive customer customer conference taking place in San Francisco, Salesforce announced the latest iteration of Customer 360, its platform of tools designed to create that single record.
The goal here is to be able to have all your customer data in a single place so that you can build a deep understanding, and deliver meaningful experiences based on that knowledge. The company is not alone in this. Adobe announced genera availability of a similar product last week and startups like Segment are also trying to solve this issue.
Salesforce has been working on this problem for the last year, and today it announced Customer 360 Truth. “What we’ve been working on for the last year is some new capabilities and some existing capabilities, and bringing them all together to actually go and try to create that single source of truth of your customer,” Patrick Stokes, EVP of platform and shared services at Salesforce explained.
This isn’t just about pulling Salesforce data into this record. “We are connecting to every application, not just within Salesforce, but external to Salesforce as well. We are helping you authenticate and govern the customer data that you have. And then ultimately getting it into a state where you can use it to really deliver personalized experiences,” Stokes said.
The Salesforce solution involves four main components, which generally are part of any solution like this. The first is Customer 360 Data Manager, which provides a way to connect to and gather data from a variety of data sources. Next is Salesforce Identity, which is designed to create a unified login, which could help make it easier to identify who the person is. Customer 360 Audience, which helps you identify all of the different online identities an individual has, and finally there is Salesforce Privacy and Data Governance, which lets you control how the data is used.
The solution also encompasses MuleSoft’s tools to help connect to various data sources and pull them into a single view, and the Cloud Information Model, an open source data model introduced last week with AWS and Genesys also involved. The Customer 360 Truth platform is built on top of this model.
All of the components are generally available starting today, except Audience Manager, which is expected some time in the first half of next year.
All of this is hard to do, and while Salesforce is providing all the base level tools you need for a solution like this, time will tell how well all of these components fit together to build the kind of complex customer profile this promises.
Salesforce and AWS announced an expansion of their on-going partnership that actually goes back to a $400 million 2016 infrastructure services agreement, and expanded last year to include data integration between the two companies. This year, Salesforce announced it will be offering AWS telephony and call transcription services with Amazon Connect as part of its Service Cloud call center solution.
“We have a strategic partnership with Amazon Web Services, which will allow customers to purchase Amazon Connect from us, and then it will be pre-integrated and out of the box to provide a full transcription of the call, and of course that’s alongside of an actual call recording of the call,” Bill Patterson, executive vice president for Service Cloud explained.
It’s worth noting that the company will be partnering with other telephony vendors as well, so that customers can choose the Amazon solution or another from Cisco, Avaya or Genesys, Patterson said.
These telephony partnerships fill in a gap in the Service Cloud call center offering, and give Salesforce direct access to the call itself. The telephony vendors will handle call transcription and hand that off to Salesforce, which can then use its intelligence layer called Einstein to “read” the transcript and offer the CSR next best actions in real time, something the company has been able to do with interactions from chat and other channels, but couldn’t do with voice.
“As this conversation evolves, the consumer is explaining what their problem is, and Einstein is [monitoring] that conversation. As the conversation gets to a critical mass, Einstein begins to understand what the content is about and suggests a specific solution to the agent,” Patterson said.
Salesforce will begin piloting this new Service Cloud capability in the spring with general availability expected next summer.
Only last week, Salesforce announced a major partnership with Microsoft to move Salesforce Marketing Cloud to Azure. These announcements show Salesforce will continue to use multiple cloud partners when it makes sense for the business. Today, it’s Amazon’s turn.
At its annual Dreamforce mega-conference in San Francisco, Salesforce today introduced the next steps in its Einstein Voice project, which it first announced last year. Einstein Voice is the company’s AI voice assistant. You can think of it as Salesforce’s Alexa or Google Assistant, but with a more focused mission.
During a briefing ahead of the event, Salesforce Chief Product Officer Bret Taylor showed off an Einstein and Alexa enabled Einstein speaker (Salesforce chairman and co-CEO Marc Benioff was supposed to be at the meeting, too, but for unknown reasons, he didn’t show) — and yes, it looked like Salesforce’s Einstein cartoon figure and its voluminous white hair lit up when it responded to queries. The company isn’t planning on making these devices available to the public, but it does show off the work the company has done with Amazon to integrate the service (though is by no means an Amazon -exclusive since the company is also working to bring Einstein to Google devices).
The theory here, as Taylor explained, is that having access to Salesforce data through voice will enable salespeople to quickly enter data into Salesforce when they are on the go and to ask the system questions about their data. The company argues that while voice assistants have found a place in the home, there are a lot of upsides to bringing it to businesses as well. That means a system has to account for the security needs of enterprises, too, as well as the fact that there is a wide range of different user personas it has to account for.
“We’re really excited about the idea of voice in businesses — the idea that every business can have an AI guide to their business decisions,” Taylor said. “I view it as part of this progression of technology. Computers and software started in the terminal with a keyboard, thanks to Xerox Parc moved to a mouse and graphic user interface, and then thanks to Steve Jobs, moved to a touchscreen, which I think is probably the dominant form factor for computers nowadays. And voice is really that next step.”
This next step, Taylor argues, will allow companies to rethink how people interact with software and data. With voice, Einstein, which is Salesforce’s catch-all name for its AI products, has a “seat at the table,” he noted because you can simply as the system a question if you need additional data during a conversation. But the real mission here is to bring these tools to every business — not just to Salesforce’s executive meetings.
To enable this, Salesforce is launching a tool that will allow anybody within a company to quickly build basic Einstein skills to pull up data from Salesforce. These skills focus on data input and relatively basic queries, for now. During a demo ahead of the event, the team showed off how easy it would be to enable a manager to ask about the current sales performance of his team, for example. By now means, though, is this tool as rich as products like Google’s DialogFlow or Microsoft’s Azure Bot Service. It’s nowhere near as flexible yet, but the team notes that it’s still early days and that it is working on enabling the ability to have more complex dialogs with Einstein in the future, for example.
To be honest, it’s hard not to look at this as a bit of a gimmick. There are probably real use cases here, that every company will have to define for itself. Maybe there are salespeople who indeed want to use a voice interface to update their CRM system after a customer meeting, for example. Or they may want to ask about the value of an account while they are in the car. In many ways, though, this feels like a technology looking for a problem, despite Salesforce’s protestations that customers are asking for this.
Some of the other uses cases here, which the company didn’t really highlight all that much in its briefing, seem far more compelling. It’s using Einstein Voice to coach call center agents by analyzing calls to pull out insights and trends from sales call transcripts. It’s also launching Service Cloud Voice, which integrates telephony inside the company’s Service Cloud. Using a built-in transcription service, Einstein can listen to the call in real time and proactively provide sales teams and call center agents with relevant information. Those use cases may not be quite as exciting, but in the end, they may generate for more value for companies than having yet another voice assistant for which they have to build their own skills, using what is, at least for the time being, a rather limited tool.
A year and a half after getting acquired by Salesforce for $6.5 billion, MuleSoft is beginning to resemble a Salesforce company — using its language and its methodologies to describe new products and services. This week at Dreamforce, as the company’s mega customer conference begins in San Francisco, MuleSoft announced a slew of new services as it integrates more deeply into the Salesforce family of products.
MuleSoft creates APIs to connect different systems together. This could be quite useful for Salesforce as a bridge between older software that may be on-prem or in the cloud. It allows Salesforce and its customers to access data wherever it lives, even from different parts of the Salesforce ecosystem itself.
MuleSoft made a number of announcements designed to simplify that process and put it in the hands of more customers. For starters, it’s announcing Accelerators, which are pre-defined integrations that let companies connect more easily to other systems. Not surprisingly, two of the first ones connect data from external products and services to Salesforce Service Cloud and Salesforce Commerce Cloud.
“What we’ve done is we’ve pre-built integrations to common back-end systems like ServiceNow and JIRA in Service Cloud, and we prebuilt those integrations, and then automatically connected that data and services through a Salesforce Lightning component directly in the Service console,” Lindsey Irvine, chief marketing officer at MuleSoft, explained.
What this does is allow the agent to get a more complete view of the customer by getting not just the data that’s stored in Salesforce, but in other systems as well.
The company also wants to put these kinds of integration skills in the hands of more Salesforce customers, so they have designed a set of courses in Trailhead, the company’s training platform, with the goal of helping 100,000 Salesforce admins, developers, integration architects and line of business users develop expertise around creating and managing these kinds of integrations.
The company is also putting resources into creating the API Community Manager, a place where people involved in building and managing these integrations can get help from a community of users, all built on Salesforce products and services, says Mark Dao, chief product officer at MuleSoft.
“We’re leveraging Community Cloud, Service Cloud and Marketing Cloud to create a true developer experience platform. And what’s interesting is that it’s targeting both the business users — in other words, business development teams and marketing teams — as well as external developers,” he said. He added that the fact this is working with business users as well as the integration experts is something new, and the goal is to drive increased usage of APIs using MuleSoft inside Salesforce customer organizations.
Finally, the company announced Flow Designer, a new tool fueled by Einstein AI, which helps automate the creation of workflows and integrations between systems in a more automated fashion without requiring coding skills.
MuleSoft Flow Designer requires no coding (Screenshot: MuleSoft)
Dao says this is about putting MuleSoft in reach of more users. “It’s about enabling use cases for less technical users in the context of the MuleSoft Anypoint Platform. This really requires a new way of thinking around creating integrations, and we’ve been making Flow Designer simpler and simpler, and removing that technical layer from those users,” he said.
API Community Manager is available now. Accelerators will be available by the end of the year and Flow Designer updates will be available Q2 2020, according to the company.
These and other features are all designed to take some of the complexity out of using MuleSoft to help connect various systems across the organization, including both Salesforce and external programs, to make use of data wherever it lives. MuleSoft does requires a fair bit of technical skill, so if the company is able to simplify integration tasks, it could help put it in the hands of more users.
Last year at Dreamforce, Salesforce’s enormous annual customer conference, Apple and Salesforce announced the beginnings of a partnership where the two organizations would work together to enhance Salesforce products running on Apple devices. Today, the companies announced the fruits of that labor with general availability of two new tools that were first announced at last year’s event.
For starters, Apple has been working with Salesforce to redesign the Salesforce Mobile to build in Apple iOS features into the app like being able to use Siri shortcuts to get work done faster, using your voice instead of typing, something that’s sometimes awkward to do on a mobile device.
For instance, you could say, “Hey Siri, next sales meeting,” and Siri can interact with Salesforce CRM to tell you who your meeting is with, the name of his or her company, when you last met and what the Einstein opportunity score is to help you predict how likely it is that you could make a sale today (or eventually).
In addition, the Mobile App takes advantage of Apple’s Handoff feature to reflect changes across devices immediately, and Apple’s Face ID for easy log on to the app.
Salesforce also announced a pilot of Einstein Voice on Salesforce Mobile, allowing reps to enter notes, add tasks and update the CRM database using voice. Einstein is Salesforce’s general artificial intelligence layer, and the voice feature use natural language understanding to do what the rep asks.
Salesforce reports that over 1000 companies participated in piloting the updated app, which constitutes the largest pilot in the history of the company.
The company also announced its new mobile development platform SDK, built specifically for iOS and iPadOS using the Swift language. The idea is to provide a tool to give Salesforce developers with the ability to build apps for iPad and iPhone, then package them up with a new tool called Swift UI and Package Manager.
Trailhead Go is the mobile version of the company’s online learning platform designed specifically for iPad and iPhone. It was built using the new Mobile SDK, and allows users to access the same courses they can on the web in a mobile context. This includes the ability to “handoff” between devices along with support for picture-in-picture and split view for multi-tasking when it makes sense.
Salesforce Mobile and Trailhead Go are available starting today for free in the iOS App Store. The Salesforce Mobile SDK will be available later this year.
As this partnership continues to develop, both companies should benefit. Salesforce gets direct access to Apple features, and can work with Apple to implement them in an optimized way. Apple gets deeper access to the enterprise with help from Salesforce, one of the biggest enterprise software vendors around.
When Salesforce announced this week that it was moving Marketing Cloud to Microsoft Azure, it was easy to see this as another case of wacky enterprise partnerships. But there had to be sound business reasons why the partnership came together, rather than going with AWS or Google Cloud Platform, both of which are also Salesforce partners in other contexts.
If you ask Salesforce, it says it was ultimately because of compatibility with Microsoft SQL.
“Salesforce chose Azure because it is a trusted platform with a global footprint, multi-layered security approach, robust disaster recovery strategy with auto failover, automatic updates and more,” a Salesforce spokesperson told TechCrunch. “Marketing Cloud also has a long standing relationship with Microsoft SQL which makes the transition to SQL on Azure a natural decision.”
Except for the SQL part, Microsoft’s chief rivals at AWS and Google Cloud Platform also provide those benefits. In fact, each of those reasons cited by the spokesperson — with the exception of SQL — are all part of the general cloud infrastructure value proposition that all the major cloud vendors provide.
There’s probably more to it than simply compatibility. There is also a long-standing rivalry between the two companies, and why in spite of their competition, they continue to make deals like this in the spirit of co-opetition. We spoke to a few industry experts to get their take on the deal to find out why these two seeming rivals decided to come together.
Tony Byrne, founder and principal analyst at Real Story Group, thinks it could be related to the fact it’s a marketing tool and some customers may be wary about hosting their businesses on AWS while competing with Amazon on the retail side. This is a common argument for why retail customers in particular are more likely to go with Microsoft or Google over AWS.
“Salesforce Marketing Cloud tends to target B2C enterprises, so the choice of Azure makes sense in one context where some B2C firms are wary of Amazon for competitive reasons. But I’d also imagine there’s more to the decision than that,” Byrne said.
In the world of enterprise software, there are often strange bedfellows. Just yesterday, Salesforce announced a significant partnership with AWS around the Cloud Information Model. This morning, it announced it was moving its Marketing Cloud to Microsoft Azure. That’s the way that enterprise partnerships shimmy and shake sometimes.
The companies also announced they were partnering around Microsoft Teams, integrating Teams with Salesforce Sales Cloud and Service Cloud.
Salesforce plans to move Marketing Cloud, which has been running in its own data centers, to Microsoft Azure in the coming months, although the exact migration plan timeline is not clear yet. This is a big deal for Microsoft, which competes fiercely with AWS for customers. AWS is the clear market leader in the space, but Microsoft has been a strong second for some time now, and bringing Salesforce on board as a customer is certainly a quality reference for the company.
Brent Leary, founder at CRM Essentials, who has been watching the market for many years, says the partnership says a lot about Microsoft’s approach to business today, and that it’s willing to partner broadly to achieve its goals. “I think the bigger news is that Salesforce chose to go deeper with Microsoft over Amazon, and that Microsoft doesn’t fear strengthening Salesforce at the potential expense of Dynamics 365 (its CRM tool), mainly because their biggest growth driver is Azure,” Leary told TechCrunch.
Microsoft and Salesforce have always had a complex relationship. In the Steve Ballmer era, they traded dueling lawsuits over their CRM products. Later, Satya Nadella kindled a friendship of sorts by appearing at Dreamforce in 2015. The relationship has ebbed and flowed since, but with this announcement, it appears the frenemies are closer to friends than enemies again.
Let’s not forget though, that it was just yesterday that Salesforce announced a partnership with AWS around the Cloud Information Model, one that competes directly with a different partnership between Adobe, Microsoft and SAP; or that just last year AWS announced a significant partnership with AWS around data integration.
These kinds of conflicting deals are confusing, but they show that in today’s connected cloud world, that companies, who will compete fiercely with one another in one part of the market, may still be willing to partner in other parts when it makes sense for both parties and for customers. That appears to be the case with today’s announcement from these companies.
Last year, Adobe, SAP and Microsoft came together and formed the Open Data Initiative. Not to be outdone, this week, AWS, Salesforce and Genesys, in partnership with The Linux Foundation, announced the Cloud Information Model.
The two competing data models have a lot in common. They are both about bringing together data and applying a common open model to it. The idea is to allow for data interoperability across products in the partnership without a lot of heavy lifting, a common problem for users of these big companies’ software.
Jim Zemlin, executive director at The Linux Foundation, says this project provides a neutral home for the Cloud Information model, where a community can work on the problem. “This allows for anyone across the community to collaborate and provide contributions under a central governance model. It paves the way for full community-wide engagement in data interoperability efforts and standards development, while rapidly increasing adoption rate of the community,” Zemlin explained in a statement.
Each of the companies in the initial partnership is using the model in different ways. AWS will use it in conjunction with its AWS Lake Formation tool to help customers move, catalog, store and clean data from a variety of data sources, while Genesys customers can use its cloud and AI products to communicate across a variety of channels.
Patrick Stokes from Salesforce says his company is using the Cloud Information Model as the underlying data model for his company’s Customer 360 platform of products. “We’re super excited to announce that we’ve joined together with a few partners — AWS, Genesys and The Linux Foundation — to actually open-source that data model,” Stokes told TechCrunch.
Of course, now we have two competing “open” data models, and it’s going to create some friction until the two competing projects find a way to come together. The fact is that many companies use tools from each of these companies, and if there continues to be these competing approaches, it’s going to defeat the purpose of creating these initiatives in the first place.
As Satya Nadella said in 2015, “It is incumbent upon us, especially those of us who are platform vendors to partner broadly to solve real pain points our customers have.” If that’s the case, having competing models is not really achieving that.
Convoy, the digital freight network that connects truckers with shippers, has raised $400 million in a Series D funding round as it aims to scale its business amid an increasingly competitive market.
The funding round brings Convoy’s post-money valuation to $2.75 billion.
The round was co-led by Generation Investment Management and previous Convoy investor T. Rowe Price Associates. Asset management firm Baillie Gifford, which has fondness for pre-IPO tech companies, Fidelity and Durable Capital Partners, as well as Series C investors CapitalG and Lone Pine Capital, also participated in the round.
Convoy has managed to attract a slew of high-profile investors — and their capital — such as Jeff Bezos, Salesforce CEO Marc Benioff and even U2’s Bono and the Edge. In the four years since its founding, Convoy has raised a total of more than $668 million. Early investors include Greylock Partners, Y Combinator, Cascade Investment (the private investment vehicle of Bill Gates) and Code.org founders Hadi and Ali Partovi.
And that money has been put to work. Convoy co-founders Dan Lewis and Grant Goodale set out in 2015 to modernize freight brokerage, a fragmented and oftentimes analog business that matches loads from shippers with truckers.
The company has gone from hundreds of loads per week in 2016 to tens of thousands per week across the U.S. Notably, Convoy’s platform handles 100% of the matching, as opposed to having humans complete the task.
Convoy also has about 100 routes, many of them concentrated around economic hubs such as Chicago, Michigan and California, Lewis told TechCrunch.
The 850-person company wants to accelerate those efforts with capital raised in this latest round. However, it’s bound to face more competition. Uber Freight, Loadsmart and Flexport are just a few online marketplaces that are targeting freight.
Convoy has added new features to its platform as part of its scaling strategy. The company launched in 2019 an automated reloads feature that allows truckers to book multiple loads at a time. It also added Convoy Go, which allows drivers to bring their truck cab and hook up to a trailer pre-filled with cargo.
In September, Salesforce Ventures, the venture of arm of Salesforce, announced a hefty $300 million investment in Automattic, the company behind WordPress, the ubiquitous content management system (CMS). At the same time, the company was putting the finishing touches on Salesforce CMS, an in-house project it released last week.
The question is, why did it choose to do both?
One reason could be that WordPress isn’t just well-liked; it’s also the world’s most popular content management system, running 34 percent of the world’s 10 billion websites — including this one — according to the company. With Automattic valued at $3 billion, that gives Salesforce Ventures a 10 percent stake.
Given the substantial investment, you wouldn’t have been irrational to at least consider the idea that Salesforce may have had its eye on this company as an acquisition target. In fact, at the time of the funding, Automattic CEO Matt Mullenweg told TechCrunch’s Romain Dillet that there could be some partnerships and integrations with Salesforce in the future.
Now we have a Salesforce CMS, and a potential partnership with one of the world’s largest web content management (WCM) tools, and it’s possible that the two aren’t necessarily mutually exclusive.
We’ve seen our fair share of shocking headlines recently: tenuous IPOs, the “retailpocalypse” and a fickle market have reset the way we size up subscription businesses. Recurring revenue models have their pitfalls, and 2019 has certainly taught the industry a few lessons.
Next year, retention is set to be a top priority for companies looking to keep customers engaged and drive growth. From niche products to personalization, how companies deliver on and measure the success of their customer experience will separate successful subscription businesses from the next unflattering news story.
These seven trends will emerge to shape the way companies delight and retain customers in 2020.
We’ve all seen articles detailing the financial fall of many brick-and-mortar stores. The retail crunch predicted years ago is coming to fruition as we’ve watched household names like Sears, Toys R Us and Barney’s consider bankruptcy or go up for sale.
Consumers aren’t letting up in their preference for convenience; they want easier ways to buy, and that means stores must develop better online experiences and offer subscription options or risk losing revenue. We’ll see big brands like Nike and Ikea continue to experiment and expand innovative subscription offerings.
For struggling brick-and-mortar businesses, subscription services could very well be a lifeline to retain a dwindling customer base. The shifting retail industry presents an opportunity for traditional companies to fully embrace recurring revenue models next year — smart organizations will do so.
We’ve experienced a rapid period of subscription adoption, with more options launching everyday. And that’s led us to a point of max fragmentation where companies and consumers alike are subscribed to so many niche products and services, they can no longer manage or afford new offerings.
Because the proliferation of subscriptions are so vast, specialized products and services will need to do prove their worth or risk being replaced. B2B (project management, martech, ecommerce) and B2C (clothing, streaming, meal delivery) companies alike must offer far better experiences in 2020 than in years past. For B2B organizations, products must be integrated with larger systems to justify their existence. One-off point solutions that silo information and create broken customer experiences will no longer be accepted. And for B2C companies, pricing will have to be spot on as more competition vies for the budgets of consumers who haven’t budgeted for increased spending.
Ultimately, not every company will be able to compete in the age of subscription fatigue, so we’ll see more consolidation, partnerships and mergers occur in the coming year.
It’s impossible to ignore the IPO press around WeWork, Blue Apron, Uber, Peloton and others. If 2020’s tech and consumer unicorns have poor unit economics and aren’t turning a profit, they need to prepare to be the next ugly headline. Marketers can be a force for change by focusing on the long-term retention of the customers they acquire. And I believe they’ll do so happily. Why?
Bob Stutz has had a storied career with enterprise software companies including stints at Siebel Systems, SAP, Microsoft and Salesforce. He announced on Facebook last week that he’s leaving his job as head of the Salesforce Marketing Cloud and heading back to SAP as president of customer experience.
Bob Stutz Facebook announcement
Constellation Research founder and principal analyst Ray Wang says that Stutz has a reputation for taking companies to the next level. He helped put Microsoft CRM on the map (although it still had just 2.7% marketshare in 2018, according to Gartner) and he helped move the needle at Salesforce Marketing Cloud.
Bob Stutz, SAP’s new president of customer experience. Photo: Salesforce
“Stutz was the reason Salesforce could grow in the Marketing Cloud and analytics areas. He fixed a lot of the fundamental architectural and development issues at Salesforce, and he did most of the big work in the first 12 months. He got the acquisitions going, as well,” Wang told TechCrunch. He added, “SAP has a big portfolio from CallidusCloud to Hybris to Qualtrics to put together. Bob is the guy you bring in to take a team to the next level.”
Brent Leary, who is a long-time CRM industry watcher, says the move makes a lot of sense for SAP. “Having Bob return to head up their Customer Experience business is a huge win for SAP. He’s been everywhere, and everywhere he’s been was better for it. And going back to SAP at this particular time may be his biggest challenge, but he’s the right person for this particular challenge,” Leary said.
The move comes against the backdrop of lots of changes going on at the German software giant. Just last week, long-time CEO Bill McDermott announced he was stepping down, and that Jennifer Morgan and Christian Klein would be replacing him as co-CEOs. Earlier this year, the company saw a line of other long-time executives and board members head out the door including including SAP SuccessFactors COO Brigette McInnis-Day, Robert Enslin, president of its cloud business and a board member, CTO Björn Goerke and Bernd Leukert, a member of the executive board.
Having Stutz on board could help stabilize the situation somewhat, as he brings more than 25 years of solid software company experience to bear on the company.
As fintech investments soar to new heights, investors are looking at the bottom and top levels of the services stack to find the next billion-dollar startups.
That’s the word from seasoned investors like Andreessen Horowitz’s managing director, Angela Strange, who has invested in a number of successful financial services technology companies. For Strange and Chris Britt, co-founder and chief executive of financial services startup Chime Bank, the best opportunities are in customer-facing financial services and specific infrastructure opportunities that can support those businesses.
For many large companies, financial services are already entering a twilight period. Markets like consumer and student lending, banking and financial management and business lending are becoming more crowded, and companies like Affirm, Betterment, Brex, Chime Bank, CommonBond, Kabbage, Robinhood, SoFi, Wealthfront and many others have raised hundreds of millions so they can take on established players in banking and finance.
Investments into financial technology companies in the U.S. exploded in 2019 with at least $12.7 billion flowing in the first half of the year alone. That figure — a 60% jump in dollars committed — came even as the number of deals remained relatively steady, according to data from Accenture.
Increasing capital commitments were even more pronounced in Europe and the United Kingdom, where a fintech boom has nearly doubled the amount of money committed to startups over the first half of 2019 from a year-ago period.
Editor’s note: James Buckhouse is design partner at Sequoia.
James Buckhouse: We partner from idea to IPO and beyond, but it’s partnering at the idea stage that we love the most — that moment when anything is possible. And it’s happened throughout Sequoia’s history. YouTube incubated in our office. Dropbox was an unreleased demo. Stripe didn’t have a single line of code. Apple was just two dudes named Steve. And so our favorite place to be is in the earliest moments.
We’re not here tonight to share with you lessons of our great wisdom on how company building ought to go. We’re here tonight to say that we understand how hard it is. And the three partners that you’ve got here to talk with tonight — Roelof Botha, Jess Lee and Mike Vernal — are people who have actually been in the trenches building companies themselves.
James Buckhouse: Great companies like Apple, Amazon and Zoom all have this one thing in common: customer obsession. That’s an easy thing to think about when you already have a billion customers, and you already have a bunch of money. But what do you do when you’re at the pre-seed stage and you want to be customer-obsessed but you don’t even have a product yet, let alone any customers? How do you even begin?
Jess Lee: I think at the very earliest of stages, all that really matters is product market fit. A common mistake we see is that a founder is only obsessed with the product, and then goes on to think, “I have my product. Let me go find a market that works for this,” when it should actually be the other way around. You should look at the market first, and then get to know the customers in that market by doing customer research.
There’s a great book by Erika Hall where she discusses how to ask the right questions to customers in order to really understand their pain points, their motivations and their needs. That’s a hallmark of some of the best companies that we’ve seen, even at the earliest stages. They spend a lot of time talking to customers and understanding what they want. Something we at Sequoia like to recommend when we work with seed and pre-seed-stage companies is to actually take the time to write down a set of customer personas. Who are your prototypical or your archetypes of different types of customers? In the very early days, you might think, “I know the customer. I can remember this. I don’t need to write it down.” But as soon as you add one new team member, who maybe isn’t as familiar with your customer, a lot of things get lost in translation.
For my company Polyvore, which was in the women’s fashion space, I had a lot of engineers on my team who were men and didn’t understand women’s fashion very well. I would always beat my head against the wall wondering why a feature they designed didn’t quite make sense, and it’s because we did the personas exercise a little bit too late. It made me wish we’d done it earlier. Once we had three very clear personas, I started to notice everything ran more smoothly. I found, whether it was the sales team or the engineering team, people started to clearly communicate the idea of what our customer really wanted. People made better decisions at all levels. That’s why at Sequoia we always encourage even our earliest-stage companies to write their customer research down immediately, way before they think they need it.
James Buckhouse: How does an early-stage startup make sure that they’re on the right track and building the right product?
Mike Vernal: The key thing to me is actually not being data-driven; it’s much more about being hypothesis-driven. The problem is people think about product as art. But I actually think of product as being equal parts art and science. And I think the science part of it, which is really important, especially at an early stage, is being clear about what your hypotheses are, what you think is going to work, why you think it’s going to work and really sort of pressure-testing that on a logical level. And, if you are able to, actually pressure-testing it with real data.
One of Jess’s techniques, which I think is great, is the notion of fake doors. If you want to know whether something’s actually going to hum in the market, whether people are going to care about it, build a landing page for it. Build a sign-up button for it. Run a bunch of ads for it. Test a bunch of different marketing copy and see if people actually want the product. I’ve seen a bunch of companies use this to great effect.
I think that in general the mistakes people make with product is, one, being too artistic and not scientific enough about things. And then two, to Jess’s point, the most important thing before you have a product is finding product market fit. Usually, finding product market fit in a category is a function of two or three important things. Identifying those important things and testing them to get clarity around that first, then designing the full product, is way better than just starting with a masterpiece, and then slowly painting over and over the masterpiece until you get to something that is great.
James Buckhouse: For enterprise companies, Roelof, can you talk a little bit about the Sales Ready Product and Templeton compression approach?
Roelof Botha: If you go to our website and search for Sequoia Sales Ready Product or Templeton, you’ll find very useful content that we put together. The insight came from one of the best leaders that we’ve worked with, in a variety of companies, who argued to not just go for an MVP, a Minimal Viable Product, if you’re building an enterprise company, but what he termed a Sales Ready Product, an SRP.
The difference is that a Minimal Viable Product just gets over the hurdle but doesn’t convince your customer to jump out of their seats to buy your product. When we invested in Cisco in the late 1980s, the first product they shipped had so many bugs it didn’t work. But the product solved such an important need for the customer that they came back to Cisco and asked if they could fix it since they needed the product to work so badly because there was a fundamental problem in trying two networks at the time. And that to me was a Sales Ready Product. You’ve got something that, even if it’s not perfect, really solves your customer’s pain point.
And so to condense the whole theory behind this: Spend a little bit more time, probably another three months, maybe another four, five months, from when you would otherwise ship an MVP to ship an SRP. The reason it matters for an enterprise company is that your sales organization will be so much more effective. Your sales team will ramp up a curve far more steeply and you’ll get sales momentum much, much faster if you sell an SRP.
James Buckhouse: I’m going to do something a little bit unexpected here and call on Alfred in the back. Could you talk a little bit about what it was like at Airbnb, where they started with culture very early on?
Alfred Lin: Brian, Joe and Nate came and visited Zappos, where we offered tours, to see what the culture was all about (Alfred was COO of Zappos). At Zappos, we started writing down our core values a little late, when we were at about 300 people. And I told Brian, Joe and Nate that that was too late.
After that trip, they went back and wrote down their core values, before hiring their first employee. They knew that they had to create a new category. Home-sharing was not something that people really thought about. And so they needed people who were willing to champion the mission. And that was one of the first core values that they wrote down.
James Buckhouse: Oftentimes, people think that culture is the thing you do later on, once your business has grown large and suddenly you have a lot of people. But that’s not true. Culture matters a lot more than people think. And it matters earlier than people think. Jess, can you talk about your framework on core values?
Jess Lee: This is something we spend a lot of time on with seed and pre-seed companies, who think, “Oh, I already know my culture. I’ll wait to write it down later.” But it’s important to get it right up front. We encourage people to not pick too many core values. Generally, you want a framework that’s a core value and the behaviors you want that exemplify that core value. And most importantly, you need a story. You need some legendary anecdote or example from inside the company that really brings the core value to life.
To use Airbnb as an example, one of its core values is to be a cereal entrepreneur. The reason it’s cereal with a “C” is because at the time, Airbnb was running out of money. They weren’t sure they had product market fit, but they went to the Democratic National Convention to try the Airbnb idea when they were down to the wire in terms of money. In order to just get the word out about the business they made boxes of cereal that said “Obama-Os” and “Captain McCain.” It’s a good example of rolling up your sleeves and doing whatever it takes to get your business launched. Somehow, they actually managed to generate revenue that they put back into the business. The really memorable part of that is the cereal anecdote. Whatever it might be at your company, make sure that the lore lives on. That’s really what brings culture to life. It’s not just the value itself.
James Buckhouse: Roelof, can you talk a little bit about the culture at PayPal in the early days?
Roelof Botha: There are a couple of elements in that. One is this idea of intercept versus slope. For those of you that are fans of math or science, it comes naturally, but sometimes you get to hire people who have a high intercept. They have a lot of experience. In our case, we needed to hire people who knew a lot about financial services, because we as the early, young team didn’t. You hire people with intercept, but then you want people with slope. People who are going to learn very quickly. And at the end of the day, part of what made PayPal successful was that we had a good slope and we learned very, very quickly.
Our culture was very hard-working. We faced a bit of a crunch in June of 2000. We’d raised a bunch of money during the dot-com era, and then we were sitting with seven months of runway and no revenue, burning $10 million a month. It was a “you’re all-in” culture. Management meetings were on Saturdays, because that’s the kind of sacrifice we were going to make as a team to get to the other side. Culture was really important to the success of the company. We had a strong bond between us as team members because we were in the trenches. We had to figure out how to make this business work when the odds were against us and the press had given up on us.
Most people on the outside are going to think that you’re going to fail. Expect that. Don’t be surprised by that. Draw strength from that, and rally your team around your cause. You should ignore that kind of feedback.
James Buckhouse: How do you discern a strong founding team?
Roelof Botha: My favorite, especially with companies at the seed stage, is to have no slides and to have a conversation with you about your business. What I find compelling is, the more I dig, the more excited I get, because your depth of knowledge, of understanding the problem that you’re trying to solve, shows itself. There are a lot of people who start companies for the wrong reasons, and they have very superficial knowledge. So as soon as you start to pressure test it, it’s clear that there’s no depth.
The founders who are the best are the ones that are so motivated to solve the problem they’re working on, they’ve researched everything. You would have found a simpler solution to the problem if you could, and you didn’t. That inspired you to start this company. As I ask you questions, you just have this depth of knowledge. You’ve thought about it so many levels deep. Those founders are the ones that keep coming up with new ideas, and that’s why their imitators don’t do so well. We see this in our industry. You come up with a great idea, TechCrunch writes about it, everybody around the world reads about it and now you’ve got 15 competitors in other countries going after what you’re doing. But guess what? They didn’t have the idea, you did. Since you had the original idea, you’ve thought about it more deeply and you can iterate faster than they can.
James Buckhouse: Jess, how about you? What do you look for to discern a strong founding team?
Jess Lee: I do agree, and I think different investors look for very different things. There is probably a notion of founder/investor fit to some extent. For me, I especially appreciate a unique insight and depth of understanding of that customer and that market. But on top of that, the other thing I think about is grit. I think that being a founder is so hard. I felt like I was on the struggle bus the entire time. Either we weren’t doing well, which was a struggle, or we were doing really well and then we were in a state of hyper-growth, and that’s also really hard. Your job changes underneath you every six months. Because even if you’re successful, everything that used to work for you as the CEO or founder is now broken because your team is now 50 people instead of 10.
What is it driving you, to either solve this problem or just driving you in general? Because it’s just not easy, and folks who give up too easily or came into this because they thought being a founder was going to be really cool, it’s not that cool all the time, so I look for that. Sometimes it shows up in the form being really mission-driven, and you have some burning desire to solve the problem. Sometimes it’s just that you’ve been underestimated your whole life and you’re really mad about it, and you want to prove yourself. There are a lot of different ways to suss out grit, but that’s one big thing that I look for.
One thing I also like to see, that is not a must-have but I find very compelling, is if you’re a good storyteller. I think that at the end of the day you have to convince your family that you’re not crazy for quitting your job to pursue this thing. You’ve got to convince early employees to join you when you can’t pay them any money. You’ve got to convince early-stage seed investors to take a chance on you and give you money when there is nothing there yet. And you’ve got to convince customers. Being able to tell a good story, both taking something complicated and making it sound simple, as well as being able to influence and talk about why your approach is interesting and different, not just better than the competitors. I look for that as well. I think that’s important.
One area where I do disagree with Roelof is that I do prefer to see slides. I think it showcases your storytelling ability. I look at a lot of consumer companies and your attention to design and detail is also an interesting thing that you can suss out with slides.
James Buckhouse: How about you, Mike?
Mike Vernal: If you can’t describe the business in a minute or two, then you need to keep iterating. Some bad meetings end up as the following: Someone will come in with 40 slides and want to convey all of the knowledge in the 40 slides in excruciating detail.
I think a couple of things. One is, many investors look at a lot of companies all day long so they might actually know more about your space than you might think. Then two, if you need 40 minutes to explain the business, marketing and all of these other things, then for an investor meeting that might work because you have that time scheduled, but for the random engineer you meet at a party who you want to get excited about joining your company, that’s going to be really hard.
The best pitch is when I’m two minutes in and I’m like, “I get the business. This is super interesting. Let’s ask all these questions.” The tough ones are 40 minutes of being talked at, where there is no real interaction.
James Buckhouse: Different types of companies need different types of capital strategies. How do you all think about how founders ought to think about their strategy for capital?
Jess Lee: It’s really important to think about three things: First, what is the actual cash you need for your business? If you’re a pure software business you don’t usually need as much as if you’re building hardware or you’re making physical goods.
Second, what is the valuation that actually makes sense? True valuation, when you become a public company, when you do M&A, is actually a function of your free cash flow, or a multiple of your revenue, so just being able to understand in the long, long-term what is a likely five, 10-year-out valuation, and then making sure you don’t overshoot that just because you can. That’s another first principle.
The third thing is ownership. Doing the math, if you don’t need to raise a lot of money, if you don’t need to raise as many rounds, at the end of the day when ideally your company is acquired for hundreds of millions of dollars, or billions of dollars, or you IPO, what is your ownership at that moment? We have founders like Dropbox, that when they went public, Drew and Arash owned nearly 40% of the company. So you have to think — would you rather have 40% of a $10 billion company, or would you rather have 2% of a $20 billion company? That ownership at the end of the day is really important. So you have to think about those three things, which is a pretty complicated equation.
It really hit home for me when my company, Polyvore, went through the M&A process and it suddenly hit me that all the acquirers were not using funny VC math. They were looking at our cash flow and the multiple of revenue. Luckily, we hadn’t raised that much money, as I’d wanted to keep as much ownership as possible. I was optimizing for ownership for the team. Because of that, we actually had a really nice outcome, where everybody made money because we hadn’t over-raised since we didn’t need to. We were a pure software-based, capital-efficient kind of company, but I think not enough founders think about that from first principles, starting from the early days. They just look at who’s raising what, and how much they could possibly get. They want to maximize that, when in reality, it’s not actually the right way to think about it.
Roelof Botha: When you raise money, you’re recruiting a partner. I see too many companies, especially seed-stage companies, make the mistake of accepting funding from whoever shows up, when that’s probably the most expensive equity you’ll ever sell in your business. You could potentially be selling it to people that are not going to be there six months or six years from now, helping you close a candidate, helping you wrestle with an important strategic decision or helping you refine your business model. Those people aren’t going to be there, so it’s a recruiting decision. Take it seriously. It’s also important to check their references. Your investor is going to do references on you. Why aren’t you doing references on them?
At the very beginning, there were 20 startups. After two days of incredibly fierce competition, we now have a winner.
Startups participating in the Startup Battlefield have all been hand-picked to participate in our highly competitive startup competition. They all presented in front of multiple groups of VCs and tech leaders serving as judges for a chance to win $100,000 and the coveted Disrupt Cup.
These startups made their way to the finale to demo in front of our final panel of judges, which included: Mamoon Hamid (Kleiner Perkins), Ashton Kutcher (Sound Ventures), Alfred Lin (Sequoia), Marissa Mayer (Lumi Labs), Ann Miura-Ko (Floodgate Ventures) and Matthew Panzarino (TechCrunch).
Render has created a managed cloud platform. The company wants to provide an alternative to traditional cloud providers, such as AWS, Azure and GCP. And it starts with an infrastructure that is easier to manage thanks to automated deployments and a abstracted way to manage your application that is reminiscent of Heroku.
OmniVis aims to make detection of cholera and other pathogens as quick, simple and cheap as a pregnancy test. Its smartphone-powered detection platform could save thousands of lives.
On September 17, HTC announced that cofounder Cher Wang would be stepping down as CEO. In her place, Yves Maitre stepped into the role of Chief Executive, after more than a decade at French telecom giant, Orange.
It’s a tough job at an even tougher time. The move comes on the tail of five consecutive quarterly losses and major layoffs, including a quarter of the company’s staff, which were let go in July of last year.
It’s a far fall for a company that comprised roughly 11 percent of global smartphone sales, some eight years ago. These days, HTC is routinely relegated to the “other” column when these figures are published.
All of this is not to say that the company doesn’t have some interesting irons in the fire. With Vive, HTC has demonstrated its ability to offer a cutting edge VR platform, while Exodus has tapped into an interest in exploring the use of blockchain technologies for mobile devices.
Of course, neither of these examples show any sign of displacing HTC’s once-booming mobile device sales. And this January’s $1.1 billion sale of a significant portion of its hardware division to Google has left many wondering whether it has much gas left in the mobile tank.
With Wang initially scheduled to appear on stage at Disrupt this week, the company ultimately opted to have Maitre sit in on the panel instead. In preparation for the conversation, we sat down with the executive to discuss his new role and future of the struggling Taiwanese hardware company.
When Elizabeth Warren took on Mark Zuckerberg and Facebook earlier this week, it was a low moment for what New Yorker writer Andrew Marantz calls “techno-utopianism.”
That the progressive, populist Massachusetts Senator and leading Democratic Presidential candidate wants to #BreakUpBigTech is not surprising. But Warren’s choice to spotlight regulating and trust-busting Facebook was nonetheless noteworthy, because of what it represents on a philosophical level. Warren, along with like-minded political leaders, social activists, and tech critics, has begun to offer the first massively popular alternative to the massively popular wave of aggressive optimism and “genius” ambition that characterized tech culture for the past decade or two.
“No,” Warren and others seem to say, “your vision is not necessarily making the world a better place.” This is a major buzzkill for tech leaders who have made (positive) world-changing their number one calling card — more than profits, popularity, skyscrapers like San Francisco’s striking Salesforce Tower, or any other measure.
Enter Marantz, a longtime New Yorker staff writer and Brooklyn, N.Y. resident who has recently trained his attention on tech culture, following around iconic figures on both sides of what he sees as the divide of our time — not between tech greats whose successes make us all better and those who would stop them, but between the alternative figures on the “new right” and the self-understood liberals of Silicon Valley who, according to Marantz, have both contributed to “hijacking the American conversation.”
Marantz’s first book, “Antisocial: Online Extremists, Techno-Utopians, and the Hijacking of the American Conversation,” will be released next week, and I recently had a chance to talk with him for this series the ethics of technology.
Greg Epstein: Congratulations on your absolutely fascinating new book Antisocial, and on everything you’ve been up to.
Facebook’s relentless blatant feature copy of Snapchat have been seen as one of the chief examples of the company’s competitive overreach, but Snap CEO Evan Spiegel isn’t sure whether antitrust activity from the government is going to change the company’s near-term prospects of competing with Instagram.
“I mean the history of antitrust would basically say that these investigations last like seven to ten years or something like that and that basically nothing happens,” Spiegel said onstage at TechCrunch Disrupt SF. “I think a lot can change in the seven to ten years that this process will take.”
Though Spiegel didn’t seem to have the most faith in the process giving Snap a more level playing field to take on Facebook, he did say there were clear public concerns with how Facebook was responding to competition in the market.
“The thing that everyone’s concerned about is like is that they’ve seen that competition has been what has motivated Facebook to make those changes over time,” Spiegel said onstage. “So, if you look at Snapchat, the inventions that we create around ephemerality, around privacy, those have really motivated Facebook to dramatically change their product offering in order to compete.”
Whether Facebook was specifically suppressing Snapchat content, Spiegel said, “It’s hard to say and I you know I’d probably be stupid to talk about it here.”
“I think what everyone is concerned about is what they would characterize as anti competitive practices so for example, you know, people upload snaps they create on Snapchat to Instagram, all the time, and then Instagram suppresses you know the Snapchat hashtag or they suppress people’s ability to post snap codes as their profile picture or suppress their ability to link to Snapchat on their profile. And that’s an example of anti-competitive behavior.”
Spiegel also confirmed that the company had put together a list of some of Facebook’s competitive moments called Project Voldemort, noting that the list had been started several years ago. The initiative’s existence was first reported by The Wall Street Journal.
“I didn’t make it, our legal team put it together,” Spiegel said. “I think just because they kept hearing from our partners all of these things that Facebook was doing and it was actually so many that people couldn’t actually remember them all so they started writing them down.”