This week, we welcome guest Hana Mohan to our podcast Found. Hana is the co-founder and CEO of MagicBell, a new startup she created with Josue Montano that just recently graduated from Y Combinator’s Winter 2021 cohort. MagicBell is a full-featured, plug-and-play notifications inbox aimed at developers who want to build one into their own product, but don’t want to have to build one themselves from scratch.
Hana’s experience as an entrepreneur spans multiple companies, including her last one which she grew to significant success in terms of annual revenue. She’s also a proud transgender woman, who underwent her transition mid-way through her existing history as a founder and entrepreneur. Hana talks to us about the challenges she faced taking on her transition in an industry where the focus is often exclusively on how hard you’re hustling and what you’re building next, and about her origin story as a founder coming from an environment where there weren’t necessarily many examples with similar life experience to look to for inspiration.
During our chat, Hana also shared lots of insight into YC, and what it provides founders, as well as perspective on what it was like going through the program during a global pandemic in a remote context. Finally, she offers some great context on finding your first investors and customers as a distributed team.
We loved talking to Hana, and we hope you love the episode. You can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Definitely leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email. Come back next week for yet another great conversation with a founder all about their own one-of-a-kind startup journey.
The European Commission has announced that it’s issued formal antitrust charges against Apple, saying today that its preliminary view is Apple’s app store rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers.
The Commission begun investigating competition concerns related to iOS App Store (and also Apple Pay) last summer.
“The Commission takes issue with the mandatory use of Apple’s own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple’s App Store,” it wrote today. “The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.”
Commenting in a statement, EVP and competition chief Margrethe Vestager, said: “App stores play a central role in today’s digital economy. We can now do our shopping, access news, music or movies via apps instead of visiting websites. Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition. This is done by charging high commission fees on each transaction in the App store for rivals and by forbidding them from informing their customers of alternative subscription options.”
Apple sent us this statement in response:
“Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that. Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store. At the core of this case is Spotify’s demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”
Vestager is due to hold a press conference shortly — so stay tuned for updates.
This story is developing…
A number of complaints against Apple’s practices have been lodged with the EU’s competition division in recent years — including by music streaming service Spotify; video games maker Epic Games; and messaging platform Telegram, to name a few of the complainants who have gone public (and been among the most vocal).
The main objection is over the (up to 30%) cut Apple takes on sales made through third parties’ apps — which critics rail against as an ‘Apple tax’ — as well as how it can mandate that developers do not inform users how to circumvent its in-app payment infrastructure, i.e. by signing up for subscriptions via their own website instead of through the App Store. Other complaints include that Apple does not allow third party app stores on iOS.
Apple, meanwhile, has argued that its App Store does not constitute a monopoly. iOS’ global market share of mobile devices is a little over 10% vs Google’s rival Android OS — which is running on the lion’s share of the world’s mobile hardware. But monopoly status depends on how a market is defined by regulators (and if you’re looking at the market for iOS apps then Apple has no competitors).
The iPhone maker also likes to point out that the vast majority of third party apps pay it no commission (as they don’t monetize via in-app payments). While it argues that restrictions on native apps are necessary to protect iOS users from threats to their security and privacy.
Last summer the European Commission said its App Store probe was focused on Apple’s mandatory requirement that app developers use its proprietary in-app purchase system, as well as restrictions applied on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.
It also said it was investigating Apple Pay: Looking at the T&Cs and other conditions Apple imposes for integrating its payment solution into others’ apps and websites on iPhones and iPads, and also on limitations it imposes on others’ access to the NFC (contactless payment) functionality on iPhones for payments in stores.
The EU’s antitrust regulator also said then that it was probing allegations of “refusals of access” to Apple Pay.
In March this year the UK also joined the Apple App Store antitrust investigation fray — announcing a formal investigation into whether it has a dominant position and if it imposes unfair or anti-competitive terms on developers using its app store.
US lawmakers have, meanwhile, also been dialling up attention on app stores, plural — and on competition in digital markets more generally — calling in both Apple and Google for questioning over how they operate their respective mobile app marketplaces in recent years.
Last month, for example, the two tech giants’ representatives were pressed on whether their app stores share data with their product development teams — with lawmakers digging into complaints against Apple especially that Cupertino frequently copies others’ apps, ‘sherlocking’ their businesses by releasing native copycats (as the practice has been nicknamed).
Back in July 2020 the House Antitrust Subcommittee took testimony from Apple CEO Tim Cook himself — and went on, in a hefty report on competition in digital markets, to accuse Apple of leveraging its control of iOS and the App Store to “create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings”.
“Apple also uses its power to exploit app developers through misappropriation of competitively sensitive information and to charge app developers supra-competitive prices within the App Store,” the report went on. “Apple has maintained its dominance due to the presence of network effects, high barriers to entry, and high switching costs in the mobile operating system market.”
The report did not single Apple out — also blasting Google-owner Alphabet, Amazon and Facebook for abusing their market power. And the Justice Department went on to file suit against Google later the same month. So, over in the U.S., the stage is being set for further actions against big tech. Although what, if any, federal charges Apple could face remains to be seen.
At the same time, a number of state-level tech regulation efforts are brewing around big tech and antitrust — including a push in Arizona to relieve developers from Apple and Google’s hefty cut of app store profits.
While an antitrust bill introduced by Republican Josh Hawley earlier this month takes aim at acquisitions, proposing an outright block on big tech’s ability to carry out mergers and acquisitions.
Although that bill looks unlikely to succeed, a flurry of antitrust reform bills are set to introduced as U.S. lawmakers on both sides of the aisle grapple with how to cut big tech down to a competition-friendly size.
In Europe lawmakers are already putting down draft laws with the same overarching goal.
In the EU the Commission has proposed an ex ante regime to prevent big tech from abusing its market power, with the Digital Markets Act set to impose conditions on intermediating platforms who are considered ‘gatekeepers’ to others’ market access.
In the UK, which now sits outside the bloc, the government is also drafting new laws in response to tech giants’ market power — saying it will create a ‘pro-competition’ regime that will apply to platforms with so-called ‘strategic market status’ — but instead of a set list of requirements it wants to target specific measures per platform.
Live audio experiences will be adopted by every major platform just like Stories have been, Spotify CEO Daniel Ek told investors on Wednesday’s earnings call. The streaming service recently acquired a live audio app, Locker Room, whose technology it expects to use to power a range of new live audio conversations centered around sports, culture and, of course music.
Investors were curious how exactly Locker Room would fit in with Spotify’s current offerings, given the streamer today is focused on delivering recorded content — music and podcasts — amd not some sort of live social networking experience.
Ek, mirroring what many in the industry have already been thinking, said he sees live audio as a new set of capabilities that will be broadly adopted by all. He basically dubbed it the next “Stories” — a feature popularized by Snapchat, but that eventually made its way to every platform.
“It’s really no different than how you think about Stories,” Ek said, explaining his thoughts on live audio. “Stories today exist on a format on a number of platforms, including Spotify, including, of course, Instagram, Snap and many others. So, I do look at [live audio] as a compelling feature set, and I think creators will engage in the places where they have the best sort of creator-to-fan affinity for the type of interactions that they’re looking for. And I think this is very similar to say how Stories played out historically.”
In other words, each platform may attract a certain kind of live audio creator, and Spotify sees its own potential in the realm of music and culture — the latter thanks to its existing and expansive investments in podcasts.
The interest in live audio emerged in the middle of a pandemic that trapped people at home and shut down traditional networking and large events, like conferences. But that doesn’t mean there’s no future for the format when the world opens back up.
Of course, Clubhouse gets credit for dring the interest in the live audio space as its exclusive invite-only status attracted a crowd of determined networkers (and clout-chasers) looking to participate in the next big thing. But as the app grew more popular, snagging big-name celeb guests — like Tesla founder Elon Musk, Facebook CEO Mark Zuckerberg, actor-turned-investor Ashton Kutcher, Drake, Oprah, and more — other tech companies began to take notice. Soon, everyone was building a Clubhouse clone.
Today, Facebook, Instagram, Reddit, Twitter, Discord, Telegram, and even LinkedIn have plans for live audio in various stages of development or availability.
Instead of starting from scratch, however, Spotify made an acquisition. Thanks to Locker Room, originally a place to discuss sports, Spotify said it would soon open up live audio to more professional athletes, writers, musicians, songwriters, podcasters, and “other global voices” who want to host real-time conversations. The Locker Room service will be rebranded as “Spotify Greenroom,” Ek noted, via a company podcast.
In its first earnings call since the deal was announced, investors asked whether Spotify believed linear consumption of spoken word audio was more interesting than music streaming.
Ek explained how spoken word content may only be the beginning of what’s to come as the format evolves.
“As more people start engaging with a feature in a medium, you start seeing more and more professional creators jump on board. So I think it’s probably going to start out with spoken word content,” he said. “But specifically as it relates to Spotify, I think that there will be a lot of musicians that want to engage in everything from speaking to their fans to having listening parties and all other things because it’s so clear to them that on the Spotify platform, that engagement drives meaningful conversion to monetization opportunities just on the basis of our revenue model.”
Spotify said that the biggest request it gets from its over 8 million creators are to have more ways for them to connect with fans. Live audio, by its nature, would give them a very direct way to do just that, given Spotify’s reach of over 350 million users.
In other words, live audio does not present some either/or scenario with regard to music streaming, as the investor’s question suggested. It’s more of a loop where one thing feeds the other. And “live,” apparently, could also mean music, not just chat.
For example, Ek hinted, when an artist has an album to promote, “you as the fan, may be able to experience that earlier than other consumers can.” Oh really?
Artists could also use live audio to talk about their thinking around writing a song, similar to what the Genius integration “Behind the Lyrics” today provides.
“I think it really comes down to the quality of the content,” said Ek. “And I think when I look at our 8 million creators, we have some of the world’s best storytellers on the platform, and that’s ultimately what people will tune into, and that’s what matters.”
But one area that could be difficult is moderation of live content. Live audio presents a whole new range of challenges for any company, as conversations can go off the rails quickly. And Spotify’s position on drawing line between free speech and policing misinformation or other inappropriate content is still somewhat murky. Its top podcaster Joe Rogan recently advised listeners to not get the Covid vaccine, if they were young and healthy, for example. Spotify declined to weigh in on this particular controversy. But it has removed some 40-plus episodes from the same podcast in the past — some for seemingly lesser violations, like an episode about Bulletproof Coffee and its health claims, for instance.
Before Spotify wades into live audio, it may want to first solidify its own values around creator content. It will need a careful, worst-case-scenario plan for what happens when a live session goes out of bounds, too.
Despite Ek’s optimism around live audio, Spotify’s stock tumbled after earnings as there were signs of slowing growth on the horizon, thanks to increased pressure from rivals, like Apple and Amazon. The company added 3 million paid subscribers in the quarter, but missed on expectations of monthly active users and lowered its full-year guidance. Revenues were up €2.1 billion ($2.6 billion) in the quarter, a 16% increase from the same period last year but down 1% from Q4 2020, raising concerns. But live audio could give fans a reason to tune back in more often in the future, if the Spotify can make the integration work.
Today was yet another day of earnings from tech’s biggest names. To keep you up to speed without burying you in an endless crush of numbers we’ve pulled out the key data from each of the major reports.
In each you will also find a link to their earnings reports. What does all of the data from the week’s earnings downloads mean for startups? We’ll have a full roundup on that front tomorrow morning, so stay tuned.
Here’s what you need to know:
You can catch up on Microsoft and Alphabet earnings, among others, here.
Facebook announced last week an expanded partnership with streaming music service Spotify that would bring a new way to listen to music or podcasts directly within Facebook’s app, which it called Project Boombox. Today, the companies are rolling out this integration via a new “miniplayer” experience that will allow Facebook users to stream from Spotify through the Facebook app on iOS or Android. The feature will be available to both free Spotify users and Premium subscribers.
The miniplayer itself is an extension of the social sharing option already supported within Spotify’s app. Now, when Spotify users are listening to content they want to share to Facebook, they’ll be able to tap the existing “Share” menu (the three dot-menu at the upper right of the screen) and then tap either “Facebook” or “Facebook News Feed.”
When a user posts an individual track or podcast episode to Facebook through this sharing feature, the post will now display in a new miniplayer that allows other people who come across their post to also play the content as they continue to scroll, or reshare it. (Cue MySpace vibes!)
Spotify’s paid subscribers will be able to access full playback, the company says. Free users, meanwhile, will be able to hear the full shared track, not a clip . But afterwards, they’ll continue to listen to ad-supported content on Shuffle mode, just as they would in Spotify’s own app.
One important thing to note here about all this works is that the integration allows the music or podcast content to actually play from within the Spotify app. When a user presses play on the miniplayer, an app switch takes place so the user can log into Spotify. The miniplayer activates and controls the launch and playback in the Spotify app — which is how the playback is able continue even as the user scrolls on Facebook or if they minimize the Facebook app altogether.
This setup means users will need to have the Spotify mobile app installed on their phone and a Spotify account for the miniplayer to work. For first-time Spotify users, they’ll have to sign up for a free account in order to listen to the music shared via the miniplayer.
Spotify notes that it’s not possible to sign up for a paid account through the mini-player experience itself, so there’s no revenue share with Facebook on new subscriptions. (Users have to download the Spotify app and sign up for Paid accounts from there if they want to upgrade.)
The partnership allows Spotify to leverage Facebook’s reach to gain distribution and to drive both sign-ups and repeat usage of its app just as the Covid bump to subscriber growth may be wearing off. However, it’s still responsible for the royalties paid on streams, just as it was before, the company told TechCrunch, because its app is the one actually doing the streaming. It’s also fully in charge of the music catalog and audio ads that play alongside the content.
Spotify and Facebook have a long history of working together on music efforts. Facebook back in 2011 had been planning an update that would allow music subscription users to engage with music directly on Facebook, much like this. But those plans were later dialed back, possibly over music rights’ or technical issues. Spotify had also been one of the first media partners on Facebook’s ticker, which would show you in real-time what friends were up to on Facebook and other services. And Spotify had once offered Facebook Login as the default for its mobile app. Today, as it has for years, Spotify users on the desktop can see what their Facebook friends are streaming on its app, thanks to social networking integrations.
The timing for this renewed and extended partnership is interesting. Now, both Facebook and Spotify have a mutual enemy with Apple, whose privacy-focused changes are impacting Facebook’s ad business and whose investments in Apple Music and Podcasts are a threat to Spotify. As Facebook’s own music efforts in more recent years have shifted towards partnership efforts — like music video integrations enabled by music label agreements — it makes sense that it would turn to a partner like Spotify to power a new streaming feature that supports Facebook’s broader efforts around monetizable tools and services aimed at the creator economy.
The miniplayer feature had been tested in non-U.S. markets, Mexico and Thailand, ahead of its broader global launch today.
In addition to the U.S., the integration is fully rolling out to users in Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Indonesia, Israel, Japan, Malaysia, Mexico, New Zealand, Nicaragua, Panama, Paraguay, Peru, South Africa, Thailand, and Uruguay.
The Internet of Things has a security problem. The past decade has seen wave after wave of new internet-connected devices, from sensors through to webcams and smart home tech, often manufactured in bulk but with little — if any — consideration to security. Worse, many device manufacturers make no effort to fix security flaws, while others simply leave out the software update mechanisms needed to deliver patches altogether.
That sets up an entire swath of insecure and unpatchable devices to fail, and destined to be thrown out when they break down or are invariably hacked.
Security veteran Window Snyder thinks there is a better way. Her new startup, Thistle Technologies, is backed with $2.5 million in seed funding from True Ventures with the goal of helping IoT manufacturers reliably and securely deliver software updates to their devices.
Snyder founded Thistle last year, and named it after the flowering plant with sharp prickles designed to deter animals from eating them. “It’s a defense mechanism,” Snyder told TechCrunch, a name that’s fitting for a defensive technology company. The startup aims to help device manufacturers without the personnel or resources to integrate update mechanisms into their device’s software in order to receive security updates and better defend against security threats.
“We’re building the means so that they don’t have to do it themselves. They want to spend the time building customer-facing features anyway,” said Snyder. Prior to founding Thistle, Snyder worked in senior cybersecurity positions at Apple, Intel, and Microsoft, and also served as chief security officer at Mozilla, Square, and Fastly.
Thistle lands on the security scene at a time when IoT needs it most. Botnet operators are known to scan the internet for devices with weak default passwords and hijack their internet connections to pummel victims with floods of internet traffic, knocking entire websites and networks offline. In 2016, a record-breaking distributed denial-of-service attack launched by the Mirai botnet on internet infrastructure giant Dyn knocked some of the biggest websites — Shopify, SoundCloud, Spotify, Twitter — offline for hours. Mirai had ensnared thousands of IoT devices into its network at the time of the attack.
Other malicious hackers target IoT devices as a way to get a foot into a victim’s network, allowing them to launch attacks or plant malware from the inside.
Since device manufacturers have done little to solve their security problems among themselves, lawmakers are looking at legislating to curb some of the more egregious security mistakes made by default manufacturers, like using default — and often unchangeable — passwords and selling devices with no way to deliver security updates.
Snyder said the push to introduce IoT cybersecurity laws could be “an easy way for folks to get into compliance” without having to hire fleets of security engineers. Having an update mechanism in place also helps to keeps the IoT devices around for longer — potentially for years longer — simply by being able to push fixes and new features.
“To build the infrastructure that’s going to allow you to continue to make those devices resilient and deliver new functionality through software, that’s an incredible opportunity for these device manufacturers. And so I’m building a security infrastructure company to support that security needs,” she said.
With the seed round in the bank, Snyder said the company is focused on hiring device and back-end engineers, product managers, and building new partnerships with device manufacturers.
Phil Black, co-founder of True Ventures — Thistle’s seed round investor — described the company as “an astute and natural next step in security technologies.” He added: “Window has so many of the qualities we look for in founders. She has deep domain expertise, is highly respected within the security community, and she’s driven by a deep passion to evolve her industry.”
Today’s children and teens want more power and control over their spending.
And while there are a number of financial services and apps out there aimed at helping this demographic save and invest money (Greenlight being among the most popular and well-known), one startup is coming at the space from another angle: helping younger people also better manage their spend.
Till Financial describes itself as a collaborative family financial tool that aims to empower kids to become smarter spenders. The New York-based company’s banking platform is designed to encourage “open and honest” discussions between parents and their kids. And it has just raised $5 million to help it advance on that goal.
A slew of investors put money in the round, including Elysian Park Ventures, Melinda Gates’ venture fund Pivotal Ventures with Magnify Ventures, Afore Capital, Luge Capital, Alpine Meridian Ventures, The Gramercy Fund, SM Ventures (the family office of the founders/CEOs of Stadium Goods) and Lightspeed Venture Partners’ Scout Fund. Also participating were angel investors such as the founders of fintech Petal, the founders of alcohol marketplace Drizly, the president of Transactis, and the president of 1800Flowers.
Part of Till’s goal is to help kids “learn by doing” and gain confidence in spending decisions. It arms them with a bank account, digital and physical debit card and goal-based savings. For example, say a teen wants to buy an iPad, they can set up an account that they can save toward that iPad and give family members (such as grandparents, for example) the opportunity to pitch in the same amount, or more. They can also set up recurring payments for things like Netflix or Spotify subscriptions so they can get a taste of what it’s like to pay regular bills.
“Parents and the current banking options miss the point when they just focus on savings. We need to first prepare kids to be Smarter Spenders, supported by savings and investing,” said Taylor Burton, who founded the company with Tom Pincince. “On Till, kids learn to spend with intention and purpose, while parents gain confidence and trust based on transparency and accountability.”
To Pincince, the market is clearly underserved.
“The legacy banks really don’t care about this young person and the early digital players are really missing the mark,” he said.
And despite the plethora of apps targeting the demographic, Pincince believes there’s plenty of room for the right players.
“The reality is you’re talking about a swath of kids under the age of 18 and over the age of eight that is the single largest unbanked population,” he said. “We’re not fighting to be the top of your son’s wallet. We’re fighting to be the first product into that wallet.”
Indeed, it’s a big market — the average middle-class family in the U.S. spends $284,570 per child by the time they turn 18.
The platform is free to all families and, early on, attracted the attention of Peggy Mangot, operating partner/COO of PayPal Ventures. She invested personally in Till in its pre-seed rounds. Prior to PayPal, Mangot ran development of Greenhouse, Well Fargo’s fee-free mobile banking app that aimed to help younger users build responsible spending habits.
Mangot has three kids and recalls that when they were shopping online, she’d give them her credit card. Or, if they were going to the corner store or meeting with friends, she’d give them cash.
“But that way, the money is meaningless to them. They didn’t really know how to understand what things cost and there was no sense of ownership,” she said. “It was just me handing over cash or a card.”
What attracted her the most about Till, Mangot said, was the team’s approach to treat younger people “with respect and agency.”
She also believes that by helping children and teens understand important financial lessons at a younger age, the world will ultimately be full of more responsible adults.
“By putting these tools in the hands of these young people early, they’ll have years and years of experience before they’re more independent and have to manage their paycheck and bills,” Mangot told TechCrunch. “Once you have mass adoption, it’s going to create a much more financially literate, confident and in control set of young adults than we’ve ever had.”
Besides making money on interchange fees, Till aims to earn revenue by partnering with merchants to offer rewards to users. It also plans to earn referral fees by referring the teens to other financial institutions when they get older and have different needs.
“It’s not our intention to be your son or daughter’s forever bank. It’s our intention to be the first bank,” Pincince said. “So, they hit the age of maturity, we’re actually giving them a high-five off of our platform and introducing them to maybe their first college loan or their first credit card.”
In today’s antitrust hearing in the U.S. Senate, Apple and Google representatives were questioned on whether they have a “strict firewall” or other internal policies in place that prevent them from leveraging the data from third-party businesses operating on their app stores to inform the development of their own competitive products. Apple, in particular, was called out for the practice of copying other apps by Senator Richard Blumenthal (D-CT), who said the practice had become so common that it earned a nickname with Apple’s developer community: “sherlocking.”
Sherlock, which has its own Wikipedia entry under software, comes from Apple’s search tool in the early 2000s called Sherlock. A third-party developer, Karelia Software, created an alternative tool called Watson. Following the success of Karelia’s product, Apple added Watson’s same functionality into its own search tool, and Watson was effectively put out of business. The nickname “Sherlock” later became shorthand for any time Apple copies an idea from a third-party developer that threatens to or even destroys their business.
Over the years, developers claimed Apple has “sherlocked” a number of apps, including Konfabulator (desktop widgets), iPodderX (podcast manager), Sandvox (app for building websites) and Growl (a notification system for Mac OS X) and, in more recent years, F.lux (blue light reduction tool for screens) Duet and Luna (apps that makes iPad a secondary display), as well as various screen-time-management tools. Now Tile claims Apple has also unfairly entered its market with AirTag.
During his questioning, Blumenthal asked Apple and Google’s representatives at the hearing — Kyle Andeer, Apple’s chief compliance officer and Wilson White, Google’s senior director of Public Policy & Government Relations, respectively — if they employed any sort of “firewall” in between their app stores and their business strategy.
Andeer somewhat dodged the question, saying, “Senator, if I understand the question correctly, we have separate teams that manage the App Store and that are engaged in product development strategy here at Apple.”
Blumenthal then clarified what he meant by “firewall.” He explained that it doesn’t mean whether or not there are separate teams in place, but whether there’s an internal prohibition on sharing data between the App Store and the people who run Apple’s other businesses.
Andeer then answered, “Senator, we have controls in place.”
He went on to note that over the past 12 years, Apple has only introduced “a handful of applications and services,” and in every instance, there are “dozens of alternatives” on the App Store. And, sometimes, the alternatives are more popular than Apple’s own product, he noted.
“We don’t copy. We don’t kill. What we do is offer up a new choice and a new innovation,” Andeer stated.
His argument may hold true when there are strong rivalries, like Spotify versus Apple Music, or Netflix versus Apple TV+, or Kindle versus Apple Books. But it’s harder to stretch it to areas where Apple makes smaller enhancements — like when Apple introduced Sidecar, a feature that allowed users to make their iPad a secondary display. Sidecar ended the need for a third-party app, after apps like Duet and Luna first proved the market.
Another example was when Apple built screen-time controls into its iOS software, but didn’t provide the makers of third-party screen-time apps with an API so consumers could use their preferred apps to configure Apple’s Screen Time settings via the third-party’s specialized interface or take advantage of other unique features.
Blumenthal said he interpreted Andeer’s response as to whether Apple has a “data firewall” as a “no.”
Posed the same question, Google’s representative, White, said his understanding was that Google had “data access controls in place that govern how data from our third-party services are used.”
Blumenthal pressed him to clarify if this was a “firewall,” meaning, he clarified again, “do you have a prohibition against access?”
“We have a prohibition against using our third-party services to compete directly with our first-party services,” White said, adding that Google has “internal policies that govern that.”
The senator said he would follow up on this matter with written questions, as his time expired.
Streaming revenue has been a longtime concern for musicians, especially those scraping by in the wake of an industry-wide implosion of record labels. Of course, a year that has made touring an impossibility has only brought those issues into starker relief as the primary revenue source for many has completely dried up.
Apple is hoping to clarify some of the major questions around streaming revenue in a letter it sent to artists. The note, reported by The Wall Street Journal, outlines a revenue that amounts to around double what Spotify pays out.
“As the discussion about streaming royalties continues, we believe it is important to share our values,” the company notes. “We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay for featuring music in prime display space on its service.”
The company’s comment is a clear shot at Spotify’s much more varied payment model. What that actually works out to at the end of the day, however, is a slightly more complicated question. Things start at around a penny-per-stream (though it can go down from there). That amount is paid out to rights holders — be they record labels or publishers. It’s another in a long line of issues that have led many musicians to question the efficacy of intermediaries in 2021.
Spotify CEO Daniel Ek fanned the flames in an interview last year, stating, “Some artists that used to do well in the past may not do well in this future landscape, where you can’t record music once every three to four years and think that’s going to be enough.”
At the end of the day, it’s a battle of pennies — or fractions thereof, for many artists. And it has become immensely difficult for mid-tier and truly independent artists to maintain a living as the world has shifted to a streaming model. Services like Bandcamp and Soundcloud have worked to make things more manageable for smaller artists, but the life of a modern musician remains a struggle — especially in the age of COVID-19.
Chili Piper, which has a sophisticated SaaS appointment scheduling platform for sales teams, has raised a $33 million B round led by Tiger Global. Existing investors Base10 Partners and Gradient Ventures (Google’s AI-focused VC) also participated. This brings the company’s total financing to $54 million. The company will use the capital raised to accelerate product development. The previous $18M A round was led by Base10 and Google’s Gradient Ventures 9 months ago.
It’s main competitor is Calendly, started 21/2 years previously, which recently achieved a $3Bn valuation.
Launched in 2016, Chili Piper’s software for B2B revenue teams is designed to convert leads into attended meetings. Sales teams can also use it to book demos, increase inbound conversion rates, eliminate manual lead routing, and streamline critical processes around meetings. It’s used by Intuit, Twilio, Forrester, Spotify, and Gong.
Chili Piper has a number of different tools for businesses to schedule and calendar accountments, but its key USP is in its use by ‘inbound SDR Sales Development Representatives (SDR)’, who are responsible for qualifying inbound sales leads. It’s particularly useful in scheduling calls when customers hit websites ask for a salesperson to call them back.
Nicolas Vandenberghe, CEO, and co-founder of Chili Piper said: “When we started we sold the house and decided to grow the company ourselves. So all the way until 2019 we bootstrapped. Tiger gave us a valuation that we expected to get at the end of this year, which will help us accelerate things much faster, so we couldn’t refuse it.”
Alina Vandenberghe, CPO, and Co-founder said: “We’re proud to have so many customers scheduling meetings and optimizing their calendars with Chili Piper’s Instant Booker.”
Since the pandemic hit, the husband-and-wife founded company has gone fully remote, with 93 employees in 81 cities and 21 countries.
John Curtius, Partner at Tiger Global said: “When we met Nicolas and Alina, we were fired up by their product vision and focus on customer happiness.”
TJ Nahigian, Managing Partner at Base10 Partners, added: “We originally invested in Chili Piper because we knew customers needed ways to add fire to how they connected with inbound leads. We’ve been absolutely blown away with the progress over the past year, 2020 has been a step-change for this company as business went remote.”
When Hampus Jakobsson, Heidi Lindvall, and Joel Larsson, all well-known players in the European venture ecosystem, began talking about their new firm Pale Blue Dot, they began by looking at the problems with venture capital.
For the three entrepreneurs and investors, whose resumes included co-founding companies and accelerators like The Astonishing Tribe (Jakobsson) and Fast Track Malmö (Lindvall and Larsson) and working as a venture partner at BlueYard Capital (Jakobsson again), the problems were clear.
Their first thesis was that all investment funds should be impact funds, and be taking into account ways to effect positive change; their second thesis was that since all funds should be impact funds, what would be their point of differentiation — that is, where could they provide the most impact.
The three young investors hit on climate change as the core mission and ran with it.
As it was closing on €53 million ($63.3 million) last year, the firm also made its first investments in Phytoform, a London headquartered company creating new crops using computational biology and synbio; Patch, a San Francisco-based carbon-offsetting platform that finances both traditional and frontier “carbon sequestration” methods; and 20tree.ai, an Amsterdam-based startup, using machine learning and satellite data to understand trees to lower the risk of forest fires and power outages.
Now they’ve raised another €34 million and seven more investments on their path to doing between 30 and 35 deals.
These investments primarily focus on Europe and include Veat, a European vegetarian prepared meal company; Madefrom, a still-in-stealth company angling to make everyday products more sustainable; HackYourCloset, a clothing rental company leveraging fast fashion to avoid landfilling clothes; Hier, a fresh food delivery service; Cirplus, a marketplace for recycled plastics trading; and Overstory, which aims to prevent wildfires by giving utilities a view into vegetation around their assets.
The team expects to be primarily focused on Europe, with a few opportunistic investments in the U.S., and intends to invest in companies that are looking to change systems rather than directly affect consumer behavior. For instance, a Pale Blue Dot investment likely wouldn’t include e-commerce filters for more sustainable shopping, but potentially could include investments in sustainable consumer products companies.
The size of the firm’s commitments will range up to €1 million and will look to commit to a lot of investments. That’s by design, said Jakobsson. “Climate is so many different fields that we didn’t want to do 50% of the fund in food or 50% of the fund in materials,” he said. Also, the founders know their skillsets, which are primarily helping early stage entrepreneurs scale and making the right connections to other investors that can add value.
“In every deal we’ve gotten in co-investors that add particular, amazing, value while we still try to be the shepherds and managers and sherpas,” Jakobsson said. “We’re the ones that are going to protect the founder from the hell-rain of investor opinions.”
Another point of differentiation for the firm are its limited partners. Jakobsson said they rejected capital from oil companies in favor of founders and investors from the tech community that could add value. These include Prima Materia, the investment vehicle for Spotify founder Daniel Ek; the founders of Supercell, Zendesk, TransferWise and DeliveryHero are also backing the firm. So too, is Albert Wenger, a managing partner at Union Square Ventures.
The goal, simply, is to be the best early stage climate fund in Europe.
“We want to be the European climate fund,” Lindvall said. “This is where we can make most of the difference.”
Spotify wants to have a bigger presence in your car, Apple hints at iPad-centric announcements and Microsoft’s new Surface Laptop goes on sale. This is your Daily Crunch for April 13, 2021.
The big story: Spotify unveils an in-car entertainment system
Spotify’s new device is the oddly (but memorably!) named Car Thing. While there are plenty of other ways to listen to Spotify while driving, the company said this will provide a “more seamless” and personalized experience. Car Thing includes a touchscreen, a navigation knob, voice control and preset buttons to access your favorite music, podcasts and playlists.
This is actually an updated version of an in-car device that Spotify started testing a couple years ago. While Spotify is now making Car Thing available more broadly, it sounds like the company still views this as a bit of an experiment — during this limited U.S. release, it’s available for free, with users just paying for the cost of shipping.
The tech giants
Apple’s next event is April 20 — Invites for its “Spring Loaded” event went out today, sporting what appears to be a doodle drawn on an iPad.
Microsoft’s latest Surface Laptop goes on sale this week, starting at $999 — Sometimes the classics are classics for a reason.
Facebook, Instagram users can now ask ‘oversight’ panel to review decisions not to remove content — The move expands the Oversight Board’s remit beyond reviewing (and mostly reversing) content takedowns.
Startups, funding and venture capital
Fortnite-maker Epic completes $1B funding round — The company is amassing a large portfolio of titles through acquisitions, a trend that is almost certain to continue with this latest massive round.
Home gym startup Tempo raises $220M to meet surge in demand for its workout device — Tempo’s freestanding cabinet, which the company launched in February 2020, includes a 42-inch touchscreen with a 3D motion-tracking camera that consistently scans, tracks and coaches users as they work out.
ConsenSys raises $65M from JP Morgan, Mastercard, UBS to build infrastructure for DeFi — The fundraise looks like a highly strategic one, based around the idea that traditional institutions will need visibility into the increasingly influential world of “decentralized finance.”
Advice and analysis from Extra Crunch
What’s fueling hydrogen tech? — In 2021, the world may be ready for hydrogen.
Five product lessons to learn before you write a line of code — To uncover some basic truths about building products, we spoke to three entrepreneurs who have each built more than one company.
Expect an even hotter AI venture capital market in the wake of the Microsoft-Nuance deal — The $19.7 billion transaction is Microsoft’s second-largest to date, only beaten by its purchase of LinkedIn.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Republican antitrust bill would block all big tech acquisitions — There are about to be a lot of antitrust bills taking aim at big tech.
Startup Alley at TechCrunch Disrupt 2021 is filling up fast — If you’re busy shoving envelopes and busting down boundaries, don’t miss your chance to exhibit in Startup Alley at TechCrunch Disrupt 2021 in September.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Spotify this morning officially announced the limited U.S. release of its first hardware device, the oddly named Car Thing, aimed at Spotify Premium subscribers. The new device — which Spotify is surprisingly offering for free plus shipping — has evolved substantially from the version that first began testing in 2019. This upgraded model has a touchscreen, a big, grippable knob for navigation, voice control features, and four preset buttons at the top for favorite music, podcasts or playlists, similar to Spotify on mobile devices.
The company explained its interest in Car Thing is about solving a need for customers who want a “more seamless” and personalized in-car listening experience. Although many cars today support Apple CarPlay or Android Auto, Spotify points out that the average age of a car in the U.S. is actually 11 years old and the average lifetime of cars is 18 years. That means there are still a large number of cars on the road that don’t support modern, in-car infotainment systems.
Car Thing is being introduced to serve this market — and likely, to give Spotify the opportunity to explore future business models where it has a more direct relationship with customers inside the vehicle, though the company isn’t speaking to its longer-term ambitions at this time.
Image Credits: Spotify
The new Car Thing itself is a lightweight (3.4 oz.), thin (4.6″ x 2.5″ x 0.7″) music and podcast player that offers a combination of voice control, knobs, buttons, and a touchscreen display for navigating its menus and selecting the media you want to hear. You can choose to use set up the device to work via Bluetooth or an AUX or USB cable, depending on how you usually connect your phone to your car stereo to play music.
You’re also able to mount Car Thing to your dash in a variety of ways as the device ships with three different types of dash and vent mounts to choose from, along with a car charger and USB-C cable.
Image Credits: Spotify
At launch, Car Thing will walk you through a quick tour where it explains how to get started. The user interface recalls the Spotify mobile app, so it isn’t difficult to get used to for first-time users. Here, you can tap, swipe and use your voice to interact with the screen. The knob lets you quickly move through your choices — an experience that may be more comfortable to those used to interacting with knobs on their car’s built-in stereo.
Across the top of the device are four preset buttons that let you save your favorite content for easy access. By default, these are configured with your Liked Songs and Spotify’s Daily Drive and Morning Commute playlists, with the last preset empty. Many users may just keep these selections, but you can change them at any time, Spotify says.
Image Credits: Spotify
Ahead of the device’s launch, Spotify quietly began rolling out support for its “Hey Spotify” voice command, which Car Thing leverages, too. This lets you speak your requests directly to Spotify, by asking for a song, album, artist, playlist, station or podcast, which Car Thing “hears” by way of its four microphones at the top. (Four, because Spotify wants Car Thing to respond even if you’re blasting your music or have the windows down, which creates additional noise.)
On mobile devices, using “Hey Spotify” is an opt-in option that you can shut off from the app’s settings. But Car Thing represents a smarter, not to mention more safety-focused, use case for voice control. Instead of fiddling with the screen or knobs, you can speak your commands — or allow your kids to shout out their options from the backseat, perhaps.
Image Credits: Spotify
Spotify’s policy regarding its use of voice data explains the company will collect recordings and transcripts of what you say along with information about the content it returned to you, and may use the data to improve the feature over time. The company told us that beyond the voice data, the device isn’t collecting any more information that it does already in the mobile app. Still, Car Thing does give Spotify a more direct window into what people listen to during commutes and longer road trips, which could inform its future products, programmed playlists and other features.
“In a typical year, Americans spend over 70 billion hours in their cars and there are 250 million cars on America’s roads today,” noted Spotify’s Head of Global Culture and Trends, Shanon Cook. “That’s a lot of time spent on the road. So what you do and what you listen to, to help you get through those hours in the car really matters.”
Initially, Car Thing is being made available during this limited release period for free, as selected users will just pay the cost of shipping — a choice Spotify made because Car Thing is still somewhat experimental.
“This is Spotify’s first hardware, and we obviously want to get things right,” said Spotify’s Head of Hardware Products, Andreas Cedborg. “And we want to learn quite a lot here in the beginning, so it’s a natural way for us to start,” he said.
Spotify says the current retail price for the device is $80. It doesn’t know if or when it will begin to retail the device, however. But it can roll out updates to its software so at least the device won’t be immediately obsolete, if Spotify decides to go in a different direction one day.
Despite Spotify’s exploration into hardware, the company stressed it doesn’t aim to be a hardware company. If anything, it’s seems more likely that Spotify is toying with the idea of becoming the next SiriusXM by way of a specialized in-car experience — although one that’s even more of an add-on than SiriusXM is as you physically have to attach the thing — the Car Thing — to your dash. Longer-term, it’s not clear it makes much sense to develop a Car Thing product line as cars get smarter every year and infotainment systems become more standard.
Car Thing will only be offered on an invite-only basis via carthing.spotify.com to U.S. Spotify Premium subscribers with a smartphone. The company declined to say how many units would be shipped, so you’ll probably want to jump on the waitlist sooner rather than later if such a device interests you.
Our new podcast Found is now available, and the first episode features guest Iman Abuzeid, co-founder and CEO of Incredible Health. Abuzeid’s story of founding and building Incredible Health, a career platform for healthcare professionals focusing specifically on nurses, is all about a focused entrepreneur building a unique skill set, and acquiring the experience necessary to create a world-leading solution.
Abuzeid went to medical school and acquired her MD, but decided before residency to instead go get an MBA from Wharton, in order to pursue her dream of entrepreneurship, inspired by two generations of entrepreneurs in the family that preceded her. After eventually making her way to Silicon Valley and working in a couple of other startups in the healthcare space, Abuzeid took important lessons away from those experiences about what not to do when running your own company, and embarked on building her own with co-founder Rome Portlock, now the company’s CTO.
Incredible Health is tackling a huge challenge — the shortfall of availability of skilled nurses, and the lack of mature, sophisticated career resources to help those nurses in their professional life. COVID-19 threw those issues into stark relief, and Incredible Health adjusted its game plan to adapt to its users’ needs. Abuzeid tells us all about how she made those calls, and also how she convinced venture investors to come along for the ride.
We hope you enjoy this episode, and don’t forget to subscribe in Apple Podcasts, Spotify, or your podcast app of choice. We’d love to hear your feed back, too — either on Twitter or via email, and tune in weekly for more episodes.
Found is hosted by Darrell Etherington and Jordan Crook, and is produced, mixed and edited by Yashad Kulkarni. TechCrunch’s audio products are managed by Henry Pickavet, and Bryce Durbin created the show’s artwork. Found published weekly on Friday afternoons, and you can find past episodes on TechCrunch here.
In 2019, Spotify began testing a hardware device for automobile owners it lovingly dubbed “Car Thing,” which allowed Spotify Premium users to play music and podcasts using voice commands that began with “Hey, Spotify.” Last year, Spotify began developing a similar voice integration into its mobile app. Now, access to the “Hey Spotify” voice feature is rolling out more broadly.
Spotify chose not to officially announce the new addition, despite numerous reports indicating the voice option was showing up for many people in their Spotify app, leading to some user confusion about availability.
One early report by GSM Arena, for example, indicated Android users had been sent a push notification that alerted them to the feature. The notification advised users to “Just enable your mic and say ‘Hey Spotify, Play my Favorite Songs.” When tapped, the notification launched Spotify’s new voice interface where users are pushed to first give the app permission to use the microphone in order to be able to verbally request the music they want to hear.
Image Credits: GSM Arena (opens in a new window)
Several outlets soon reported the feature had launched to Android users, which is only partially true.
As it turns out, the feature is making its way to iOS devices, as well. When we launched the Spotify app here on an iPhone running iOS 14.5, for instance, we found the same feature had indeed gone live. You just tap on the microphone button by the search box to get to the voice experience. We asked around and found that other iPhone users on various versions of the iOS operating system also had the feature, including free users, Premium subscribers and Premium Family Plan subscribers.
The screen that appears suggests in big, bold text that you could be saying “Hey Spotify, play…” followed by a random artist’s name. It also presents a big green button at the bottom to turn on “Hey Spotify.”
Once enabled, you can ask for artists, albums, songs and playlists by name, as well as control playback with commands like stop, pause, skip this song, go back and others. Spotify confirms the command with a robotic-sounding male voice by default. (You can swap to a female voice in Settings, if you prefer.)
Image Credits: Spotify screenshot iOS
This screen also alerts users that when the app hears the “Hey Spotify” voice command, it sends the user’s voice data and other information to Spotify. There’s a link to Spotify policy regarding its use of voice data, which further explains that Spotify will collect recordings and transcripts of what you say along with information about the content it returned to you. The company says it may continue to use this data to improve the feature, develop new voice features and target users with relevant advertising. It may also share your information with service providers, like cloud storage providers.
The policy looks to be the same as the one that was used along with Spotify’s voice-enabled ads, launched last year, so it doesn’t seem to have been updated to fully reflect the changes enabled with the launch of “Hey Spotify.” However, it does indicate that, like other voice assistants, Spotify doesn’t just continuously record — it waits until users say the wake words.
Given the “Hey Spotify” voice command’s origins with “Car Thing,” there’s been speculation that the mobile rollout is a signal that the company is poised to launch its own hardware to the wider public in the near future. There’s already some indication that may be true — MacRumors recently reported finding references and photos to Car Thing and its various mounts inside the Spotify app’s code. This follows Car Thing’s reveal in FCC filings back in January of this year, which had also stoked rumors that the device was soon to launch.
Spotify was reached for comment this morning, but has yet been unable to provide any answers about the feature’s launch despite a day’s wait. Instead, we were told that they “unfortunately do not have any additional news to share at this time.” That further suggests some larger projects could be tied to this otherwise more minor feature’s launch.
Though today’s consumers are wary of tech companies’ data collection methods — and particularly their use of voice data after all three tech giants confessed to poor practices on this front — there’s still a use case for voice commands, particularly from an accessibility standpoint and, for drivers, from a safety standpoint.
And although you can direct your voice assistant on your phone (or via CarPlay or Android Auto, if available) to play content from Spotify, some may find it useful to be able to speak to Spotify directly — especially since Apple doesn’t allow Spotify to be set as a default music service. You can only train Siri to launch Spotify as your preferred service.
If, however, you have second thoughts about using the “Hey Spotify” feature after enabling it, you can turn it off under “Voice Interactions” in the app’s settings.
Sonos has a new speaker that starts shipping later this month, and it’s a significant departure from the company’s usual offerings in a number of ways. The all-new Sonos Roam is a compact, portable speaker with a built-in battery and Bluetooth connectivity — but still very much a Sonos system team player, with wifi streaming, multi-room feature, voice assistant support and surprisingly great sound quality.
Priced at $179, the Sonos Roam is truly diminutive, at just over 6 inches, by roughly 2.5 inches for both height and depth. It weighs under a pound, and is available in either a matte white or black finish, which is par for the course for Sonos in terms of colorways. Roam is also IP67-rated, meaning it’s effectively waterproof, with a resistance rating of up to 30 minutes at depths of up to 1 meter (3.3 feet).
Sonos has placed the speaker’s control surface at one end of the device, including a microphone button, volume controls and a play/pause button. These are actual, tactile buttons, rather than touch-sensitive surfaces like you’d find on other Sonos speakers, which makes sense for a speaker designed to be used on the go, and in conditions where touch controls might get flummoxed by things like rain and water.
The Roam also has a power button on the back, next to a USB-C port for charging. It also offers wireless charging, via a receiver found in the base of the speaker, which can be used with Sonos’ own forthcoming magnetic charging adapter (sold separately), or with any standard Qi-powered wireless charger you want.
In addition to wifi streaming, Sonos Roam can also connect to any device via Bluetooth 5.0. It also features AirPlay 2 for connecting to Apple devices when on wifi, and it works out of the box with Spotify Connect. The built-in battery is rated for up to 10 hours of playback on a full charge, according to Sonos, and can also provide up to 10 days of its sleep-like standby mode.
This is the smallest speaker yet released by Sonos, and that’s definitely a big plus when it comes to this category of device. The dimensions make it feel like a slightly taller can of Red Bull, which should give you some sense of just how portable it is. Unlike Sonos’ first portable speaker with a built-in battery, the Sonos Move, the Roam truly feels like something designed to be thrown in a bag and brought with you wherever you happen to need it.
Despite its small size, the Sonos Roam offers impressive sound — likely the best I’ve yet encountered for a portable speaker in this size class. Inside, it manages to pack in dual amplifiers, one tweeter and a separate custom racetrack mid-woofer, which Sonos developed to help deliver both lows and mids with a faithfulness that normally escapes smaller speakers. The Roam also gets a lot louder than you’d probably expect it could, while keeping audio quality clear and free of distortion at the same time.
One of the keys to the Roam’s great sound quality is Sonos’ Automatic Trueplay tech, which tunes the audio to best suit its surroundings actively and continually. This feature requires that the mic be enabled to work, but it’s well worth having on in most settings, and makes a big difference while streaming in both Bluetooth and wifi modes. This also helps the speaker adjust when it’s switched from horizontal to vertical orientation, and it’s one of the main reasons that the Roam punches above its weight relative to other speakers in this size and price category.
The Roam would be a winner based on audio quality alone for the price, but the extra Sonos system-specific features it boasts really elevate it to a true category leader. These include a standby mode that preserves battery while keeping the Roam available to your system for wifi streaming via the Sonos app (handy, and also optional since you can hold the power button down for five seconds to truly power off and preserve your charge for even longer, which is great for travel).
One of Roam’s truly amazing abilities is a hand-off feature that passes playback of whatever you’re using it to listen to on to the nearest Sonos speaker in your system when you long press the play/pause button. This works almost like magic, and is a great speaker superpower for if you’re wandering around the house and the yard doing chores with the Roam in your pocket.
Sonos waited a long time to release their first travel-friendly portable speaker, but they obviously used that time wisely. The Sonos Roam is the most thoughtfully-designed, feature-rich and best-sounding portable speaker you can get for under $200 (and better than many more expensive options, at that). Even if you don’t already have a Sonos system to use it with, it’s an easy choice if you’re in the market for a portable, rugged Bluetooth speaker — and if you’re already a Sonos convert, the decision gets that much easier.
At the end of 2020, I argued that edtech needs to think bigger in order to stay relevant after the pandemic. I urged founders to think less about how to bundle and unbundle lecture experience, and more about how to replace outdated systems and methods with new, tech-powered solutions. In other words, don’t simply put engaging content on a screen, but innovate on what that screen looks like, tracks and offers.
A few months into 2021, the exit environment in edtech…feels like it’s doing exactly that. The same startups that hit billion and multi-billion valuations during the pandemic are scooping up new talent to broaden their service offerings.
Ruben Harris, the founder of Career Karma, a platform that matches aspiring coding professionals to bootcamps, put together a massive report recently with his team to talk about the pandemic’s impact on the bootcamp market.
James Gallagher, the author of the report, tells me:
It is important to note that the full potential of bootcamps has not yet been realised. We are now seeing more exploration of niches like technology sales which provide gateways into new careers in tech for people who otherwise may not have been able to acquire training. To scale such models, new businesses will need venture capital.
He went on to explain how a notable acquisition from 2020 was K12 scooping up Galvanize, “which would give K12 exposure into corporate training and the coding bootcamp space, a market outside of K12’s focus at the moment.”
To me this report signal two things: the financial interest in boot camps isn’t simply stemming from other bootcamps (although that is happening), but it’s surprising partnerships. Leaving this subsector, we see creative acquisitions such as a Roblox for edtech buying a language learning tool, and a startup known for flashcards scooping up a tech tutoring service.
Readers should know by this point that I love a nonobvious acquisition (except when this almost happened), so if you have any more tips on coming deals in edtech, please Signal me or direct message me on Twitter.
I’ll end with this: Successful startup founders are innately ambitious, finding opportunity in moonshots and convincing others that the odds are in their favor. However, the ceiling for what defines ambition heightens almost everyday. What used to be a win is now a nonnegotiable, and a feat is only a feat until your competitor hits the exact same milestone.
Acquisitions are one way to scoop up competition and synergistic talent, but it’s what happens next that matters the most.
In the rest of this newsletter, we will talk about Clubhouse competitors, how a homegrown experiment became one of the fastest growing companies in fitness tech and a cool-down in public markets (?!). As always, you can get this newsletter in your inbox each Saturday morning, so subscribe here to join the cool kids.
Remember when everyone was buzzing around about building Stories? That’s so pre-pandemic. A number of companies recently announced plans to build their own versions of Clubhouse, after the buzzy app unearthed the consumer love for audio.
Here’s what to know: It might be easier to start guessing who isn’t building a Clubhouse clone at this point. Our predictions are already starting, but jokes aside, the rise in clones could mean that Clubhouse might have to make a run for its pre-monetized money (cough, cough, Twitter spaces). It doesn’t matter if a startup is first in unlocking a key insight, all that matters is who executes that key insight the best.
Image Credits: Getty Images
Tonal, a fitness tech startup, became a unicorn this week after raising a new tranche of capital.
Here’s what to know: The new status underscores market growth for at-home fitness solutions. And while we don’t have a Tonal S-1 yet, we do have a Tonal EC-1. EC-1’s are TechCrunch’s riff on an S-1, and are essentially a deep dive into a company.
Reporter JP Mangalindan wrote thousands and thousands of words about Tonal, from its origin story to business model, its focus on communities and its biggest hurdles ahead.
Image Credits: Nigel Sussman
You’ve probably had a better week than Compass, Deliveroo and Kaltura. The three companies all had different events that illustrate a potential damper on the part that has been the public markets.
Here’s what to know: Compass cut its shares and lowered pricing of said shares, Deliveroo had a rough debut as a delivery company on the public markets, and Kaltura postponed its IPO after valuation demand didn’t hit expectations.
In other news, though:
Photo Taken In Arizona, United States. Image Credits: Jure Batagelj / 500px / Getty Images
Thanks to everyone who tuned in to TechCrunch Early Stage! If you enjoyed the event (or missed it), don’t worry: Disrupt is almost here.
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
Natasha and Danny and Alex and Grace were all here to chat through the week’s biggest tech happenings. It was a busy week on the IPO front, Danny was buried in getting the Tonal EC-1 out, and Natasha took some time off. But the host trio managed to prep and record a show that was honestly a kick to record, and we think, a pleasure to listen to!
So, for your morning walk, here’s what we have for you:
It was a mix of laughs, ‘aha’ moments and honest conversations about how complex ambition in startups should be. One listener the other day mentioned to us that the pandemic made it harder to carve out time for podcasts, since listening was often reserved for commutes. We get it, and in true scrappy fashion, we’re curious how you’ve adapted to remote work and podcasts. Let us know how you tune into Equity via Twitter and remember that we’re thankful for your ears!
Spotify this morning announced it’s significantly expanding its selection of personalized playlists with the addition of three new categories of playlists under the heading of “Spotify Mixes.” This collection will include artist mixes, genre mixes, and decade mixes — meaning you’ll gain access to a sizable number of new mixes with easy-to-understand titles, like 2010s Mix, R&B Mix, Pop Mix, Drake Mix, Selena Gomez Mix, and so on — or whatever reflects your own tastes and interests.
The company says the idea for the Spotify Mixes was inspired by its Daily Mixes, launched in fall 2016.
The Daily Mixes had been one of the company’s first big expansions in personalization beyond its flagship playlist, Discover Weekly, as they introduced a large set of playlists that reflected users’ listening history. Today, Daily Mixes bring together your recent listens with other tracks to keep you engaged — and the new Spotify Mixes essentially do the same, as they’re populated with music you like plus “fresh tracks.” The difference is that the new mixes have clearer names and a more specific focus, in some cases.
The Spotify Mixes will be available to all users globally, including both Free users and Premium subscribers. At launch, you can find them within Search in the “Made for You” hub.
You’ll easily spot them, too, as Spotify has already populated its app with a selection of mixes in the top three rows of the “Made for You” hub. Here, you’ll find “Your Genre Mixes,” “Your Artist Mixes,” and “Your Decade Mixes” — each with a horizontally scrollable selection of mixes to get you started. Spotify says each mix category will be updated frequently and will always have several playlists available.
The new feature somewhat competes with a similar offering on Pandora, launched three years ago. The SiriusXM-owned music app had used its Music Genome technology to create personalized playlists across a number of attributes, including also genre and mood. While not an apples-to-apples comparison, necessarily, Pandora’s launch had instantly expanded its users’ access to personalized playlists by the dozens. It’s actually a bit surprising that it took Spotify as long as it did to offer a competitive response.
Spotify says the new playlists are rolling out today to global users.
Independent music distribution platform and tool factory UnitedMasters has raised a $50M series B round led by Apple. A16z and Alphabet are participating again in this raise. United Masters is also entering a strategic partnership with Apple alongside this investment.
If you’re unfamiliar with UnitedMasters, it’s a distribution company launched in 2017 by Steve Stoute, a former Interscope and Sony Music executive. The focus of UnitedMasters is to provide artists with a direct pipeline to data around the way that fans are interacting with their content and community, allowing them to connect more directly to offer tickets, merchandise and other commercial efforts. UnitedMasters also generally allows artists to retain control of their own masters.
Neither of these conditions are at all typical in the music industry. In a typical artist deal, recording companies retain all audience and targeting data as well as masters. This limits an artist’s ability to be agile, taking advantage of new technologies to foster a community.
While Apple does invest in various companies, it typically does so out of its Advanced Manufacturing Fund to promote US manufacturing or strategically in partners that make critical components of its hardware like silicon foundries or glass manufacturing. Apple does a lot more purchasing than investing, typically, buying a company every few weeks or so to supplement one product effort or another. UnitedMasters, then, would be a relatively unique partnership, especially in the music space.
I spoke to UnitedMasters CEO Steve Stoute about the deal and what it means for the businesses 1M current artists and new ones. Stoute credits Apple executive Eddy Cue having a philosophy aligned with the UnitedMasters vision with getting this deal done.
“We want all artists to have the same opportunity,” says Stoute. “Currently, independent artists have less opportunity for success and we’re trying to remove that stigma.”
This infusion, Stoute says, will be used to hire talent that are mission oriented to take UnitedMasters global. They’re seeking local technical talent and artists talent to build out the platform worldwide.
“Every artist needs access to a CTO,” Stoute says. “Some of the value of what a manager is today for an artist needs to be transferred to that role.”
Currently, UnitedMasters has deals with the NBA, ESPN, TikTok, Twitch and others that allow artists to tap big brand deals that would normally be brokered by a label and manager. It also has a direct distribution app that allows publishing to all of the major streaming services. Most importantly, they can check stream, fan and earnings data at a glance.
“Steve Stoute and UnitedMasters provide creators with more opportunities to advance their careers and bring their music to the world,” said Apple’s Eddy Cue in a release statement. “The contributions of independent artists play a significant role in driving the continued growth and success of the music industry, and UnitedMasters, like Apple, is committed to empowering creators.”
“UnitedMasters has completely transformed the way artists create, retain ownership in their work, and connect with their fans,” said Ben Horowitz, Co-Founder and General Partner of Andreessen Horowitz in a release. “We are excited to work with Steve and team to build a better, bigger, and far more profitable world for musical artists.”
We are currently at an inflection point in the way that artists and fans connect with one another. Though there have been seemingly endless ways for artists to get their messages out or speak to fans using social media and other platforms, the actual business of distributing work to a community and making money from that work has been out of their hands completely since the beginning of the recording industry. Recent developments like NFTs, DAOs and social tokens, as well as an explosion of DTC frameworks have begun to re-write that deal. But the major players have yet to make the truly aggressive strides they need to in order to embrace this ‘artist centric’ new world.
The mechanics of distribution have been based on a framework defined by DRM and the DMCA for decades. This framework was always marketed as a way to protect value for the artist but was in fact architected to protect value for the distributor. We need a rethinking of the entire distribution layer.
As I mentioned when reporting the UnitedMasters + TikTok deal, it’s going to be instrumental in a more equitable future for artists:
It’s beyond time for the creators of The Culture to benefit from that culture. That’s why I find this UnitedMasters deal so interesting. Offering a direct pipeline to audiences without the attendant vulture-ism of the recording industry apparatus is really well-aligned with a platform like TikTok, which encourages and enables “viral sounds” with collaborative performances. Traditional deal structures are not well-suited to capturing viral hype, which can rise and fall within weeks without additional fuel.
In music, Apple is at the center of this maelstrom along with a few other major players like Spotify. One of the big misses in recent years for Apple Music, in my opinion, was Apple’s failure to turn Apple Music Connect into an industry-standard portal that allowed artists to connect broadly with fans, distribute directly, sell tickets and merchandise but — most importantly — to foster and own their community.
A UnitedMasters tie up isn’t a straight line to that goal, but it’s definitely got the ingredients. I’m looking forward to seeing what this produces.
Image Credits: Steve Stoute