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Daily Crunch: Facebook faces blistering civil rights audit

By Anthony Ha

Auditors were not impressed by Facebook’s civil rights work, Tinder tests video chat and a new nasal spray could reduce the risk of COVID-19 transmission. Here’s your Daily Crunch for July 8, 2020.

The big story: Facebook faces blistering civil rights audit

The results are out in a multi-year audit of Facebook’s approach to civil rights issues. In recent weeks, as the company has faced an advertiser boycott over some of these same issues, executives have pointed to the audit as a sign that it’s taking civil rights concerns seriously. But the findings aren’t exactly positive.

“While the audit process has been meaningful and has led to some significant improvements in the platform, we have also watched the company make painful decisions over the last nine months with real world consequences that are serious setbacks for civil rights,” wrote former ACLU director Laura W. Murphy and attorneys from law firm Relman Colfax.

Meanwhile, Facebook executives met with the leaders of the boycott yesterday, but it sounds like little progress was made, with Color of Change President Rashad Robinson criticizing the company for “expecting an A for attendance.”

The tech giants

Tinder now testing video chat in select markets, including US — The feature will allow Tinder users to go on virtual dates when both of them opt-in (something that’s probably a lot more appealing during the current pandemic).

Slack snags corporate directory startup Rimeto to up its people search game — With this acquisition, Slack could potentially improve the experience of searching for employees across a company.

Microsoft makes Teams video meetings less tiring with its new Together mode — Instead of presenting all the attendees as little squares, Together mode shows them sitting together in an auditorium. Although it sounds silly, Microsoft says this is actually easier for the brain to process.

Startups, funding and venture capital

Permutive raises $18.5 million to help publishers target ads in a new privacy landscape — Rather than relying on third-party cookies, Permutive uses a publisher’s first-party data to deliver more targeted ads.

Swiftmile raises $5 million round led by Thayer Ventures for micromobility charging stations — Swiftmile makes charging stations for electric bikes and scooters, with 150 stations deployed throughout the United States to date.

Harvard biomedical engineering professor to launch nasal spray that could reduce COVID-19 transmission risk — The product is called FEND, and the startup Sensory Cloud plans to release it in September.

Advice and analysis from Extra Crunch

What India’s TikTok ban means for China — Manish Singh discusses how a recent order from the Indian government is shifting the market in favor of local companies.

As media revenue struggles, subscription startups see growth — It’s not exactly a rosy picture for media startups, but there have been some promising subscription success stories.

Ford’s Bronco relaunch demonstrates the power of nostalgia — Even if you don’t care about the Bronco, this week’s rollout has been a master class in how companies can use nostalgia for marketing.

(Reminder: Extra Crunch is our subscription membership program, designed to democratize information about startups. You can sign up here.)

Everything else

Trump’s sudden reversal on student visas will be felt in Silicon Valley — With international students no longer allowed to stay in the U.S. if their universities move their courses entirely online, there could be a big impact on technical talent and innovation.

The tech industry comes to grips with Hong Kong’s national security law — We interviewed a range of players to get a sense of what the new law will mean for internet freedom and entrepreneurship.

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.

Facebook and Instagram boot close Trump ally Roger Stone for network of fake accounts

By Taylor Hatmaker

Facebook released today its latest report detailing disinformation campaigns operating on its massive social network, and this one came with a few surprises. In the new report, Facebook disclosed that it had removed a network of accounts linked to close Trump ally and former campaign advisor Roger Stone for “inauthentic” activity and coordinated fake accounts around the time of the 2016 presidential election. Facebook has since removed Stone’s own accounts from both Facebook and Instagram.

The accounts linked to Stone, who is set to go to prison next week, posted on a number of topics, mostly from 2015 to 2017, including Florida politics, WikiLeaks’ release of hacked Democratic National Committee emails, the 2016 races and Stone himself, “praising his political acumen, defending him against criminal charges.” Facebook removed 54 Facebook accounts, 50 Facebook pages and four Instagram accounts linked to Stone and his close associates. The network ran related accounts on Twitter and YouTube, as well.

Researchers at the social analytics firm Graphika dive into considerable detail in their own report on the newly unearthed campaign, which was discovered in connection with newly public search warrants from Special Counsel Robert Mueller’s investigation.

Facebook also noted that some of the pages it removed had links to the Proud Boys, the extremist group Facebook eventually banned in 2018 after the group leveraged the platform to recruit and grow its ranks for months if not years. It began looking into the network of accounts through suspected activity by Proud Boys members seeking to return to the platform, uncovering the broader network after the search warrants came to light in April.

Last November, Stone was found guilty of seven felony charges, including making false statements to Congress, obstructing Congress and witness tampering. President Trump has hinted that he plans to pardon his longtime associate. Trump’s Attorney General William Barr created a firestorm of scrutiny earlier this year when he took the highly unusual step of intervening in order to reduce Stone’s sentence, presumably due to the president’s closeness with Stone.

Stone wasn’t the only high-profile political figure to be caught manipulating the social network. A parallel Facebook investigation into fake account networks in Brazil uncovered a cluster of accounts linked to the office of Brazil’s president Jair Bolsonaro and his sons, who had previously been investigated for running “a criminal fake news racket.”

Garry Kasparov on AI: ‘People always called me an optimist’

By Ron Miller

Garry Kasparov is a political activist who’s written books and articles on artificial intelligence, cybersecurity and online privacy, but he’s best known for being the former World Chess Champion who took on the IBM computer known as Big Blue in the mid-1990s.

I spoke to Kasparov before a speaking engagement at the Collision Conference last month where he was participating in his role as Avast Security Ambassador. Our discussion covered a lot of ground, from his role as security ambassador to the role of AI.

TechCrunch: How did you become a security ambassador for Avast?

Garry Kasparov: It started almost by accident. I was invited by one of my friends, who knew the previous Avast CEO (Vince Steckler) to be the guest speaker at the opening of their new headquarters in Prague. I met the team and very quickly we recognized that we could work together very effectively since Avast wanted an ambassador.

I thought that it would be a great combination because it’s about cybersecurity, and it’s also about customers, about individual rights, which is related to human rights, and it also had a little bit of a political element of course. But most importantly, it’s a combination of privacy and security and I felt that with my record of working for human rights, and also writing about individuals and privacy and also having some experience with computers, that it would be a good match.

Now it’s my fourth year and it seems that many of the things we have been discussing at conferences when I have spoken about the role of AI in our lives, and many of the discussions that we thought were theoretical, have become more practical.

What were those discussions like?

One of the favorite topics that was always raised at these conferences is whether AI will be a helping hand or threat. And my view has been that it’s neither because I have always said that AI was neither a magic wand nor a Terminator. It’s a tool. And it’s up to us to find the best way of using it and applying its enormous power to our good.

Strive School wants to increase the number of job-ready software engineers in Europe

By Natasha Mascarenhas

College in the United States is expensive and, for many, comes with massive student debt. The price tag has led to the increase of coding bootcamps and alternative schooling options to help students gain employment, and a salary, without taking on millions of dollars in debt.

In Europe, the picture looks vastly different: A majority of universities are low-cost or free to attend. Students have to front the cost of living, textbooks and other externalities, but overall education in Europe comes with a lower price tag than the United States.

But accessibility doesn’t equate to effectiveness, according to Tobia De Angelis, the co-founder of Berlin-based Strive School.

De Angelis launched Strive School to address what he sees as an existing weakness in European universities: outdated STEM course material. The company, which is currently going through Y Combinator, connects students to a six-month coding program and then connects them to a job in exchange for a portion of their future salary, also known as income-sharing agreements (ISA).

“The market is demanding [from] universities something they’re not meant to deliver in the first place: more high quality, job-ready software engineers,” De Angelis told TechCrunch.

ISAs are often used by companies as a pitch to help students forgo the expensive price tag of a university or online degree. The idea is that students only need to pay for the education once it works, or once it leads to a job.

Strive School, with its focus on Europe, needs to convince students to pay for education they could otherwise get low-cost because of the job prospects.

It’s hard to do, but so far Strive School has placed five out of seven students in its inaugural class. The second class is being placed, and the third class is in session. The company is accepting applications for its fourth cohort, starting in late September.

The company uses Europe’s free education model to its advantage by going to STEM faculties around Europe to recruit talent and students. The first focus for Strive School programming is full-stack web engineering.

Beyond that, Strive School looks and feels like a digital bootcamp. Students, or “strivers,” learn to code with deadlines, in a team environment and within the scope of a project. Lessons are taught fully remote with a mix of synchronous and asynchronous communication. 

Strive’s curriculum, according to De Angelis, is more focused on soft skills (like applying code to real-life situations) than hard skills. The teachers on the platform are engineers, scientists and coders. 

Once a student completes the coursework, Strive School will help them get placed. Its ISA terms are that it charges 10% of salary for four years with a maximum total of €18,000.

The ISA space has grown considerably in recent years, bringing with it a whole bunch of regulatory and legal scrutiny. Another Y Combinator company, Lambda School, tackles the coding skills shortage through an ISA model and launched in 2017. Since, students have complained about the quality of education a company can bring when it demands venture-sized returns with an ISA model.

Lambda cut staff and executive pay in April, citing the coronavirus and a general dialing back of growth plans. Strive School’s De Angelis said that the coronavirus makes placing students into jobs harder due to layoffs, thus hurting the upstart’s main source of revenue, but he is hopeful of growth in sub-sectors within tech like e-commerce.

ISA struggles doesn’t mean companies are straying away just yet. Within the YC alumni network, Blair helps college students finance their education through income-sharing agreements. And VCs recently bet millions in Microverse, a Lambda School for the developing world.

De Angelis is confident that Europe is big and diverse enough to need a platform that is specialized in working for its student base.

De Angelis spent time working at two early-stage funds in Italy and Denmark, and his co-founder Diego Banovaz is a software engineer who worked at startups and taught postgraduate courses in Trieste, Italy.

The coronavirus has forced the world to rethink online education models and move past the status quo put in place by institutional universities. It has brought re-skilling networks into the mainstream and forced questions about inclusion to be dealt with head-on. But perhaps Jomayra Herrera, an investor with Cowboy VC, puts it best: “You can give someone access to something, but it’s not true access unless they have the tools and structure to really engage with it.”

In pandemic era, entrepreneurs turn to SPACs, crowdfunding and direct listings

By Jonathan Shieber

If necessity is the mother of invention, then new business owners are getting very inventive in the ways in which they access cash. Relying on some long-tested and some new avenues to raise money, entrepreneurs are finding more ways to get public market cash faster than they would have in the past.

Whether it’s from Reg A crowdfunding dollars, Special Purpose Acquisition Companies (SPACs) or direct listings, these somewhat arcane and specialized financing vehicles are making a comeback alongside a rise in new funding mechanisms to get to market quickly and avoid the dilution that comes from private market rounds (especially since those rounds are likely to come at a reduced valuation given market conditions).

Some of these tools have existed for a while and are newly popular in an era where retail investors are driving much of the daily fluctuations of the public markets. Wall Street institutions are largely maintaining their conservative postures with regard to new offerings, so secondary market retail volume growth is outpacing institutional. Retail investors want into these new issues and are pouring into the markets, contributing to huge pops to new public offerings for companies like Lemonade this Thursday and creating an environment where SPACs and crowdfunding campaigns can flourish.

The rise of zero-commission brokerages and the popularization of fractional trading led by the startup Robinhood and adopted by every one of the major online brokers including Charles Schwab, TD Ameritrade, E-Trade and Interactive Brokers has created a stock market boom that defies the underlying market conditions in the U.S. and globally. For instance, daily trades on Robinhood are up 300% year-over-year as of March 2020.

According to data from the BATS exchange, the total trade count in the U.S. was up 71% and May trading was up more than 43% over 2019. Meanwhile, E-Trade daily average revenue trades posted a 244% increase in May over last year’s numbers.

Don’t call it a comeback

The appetite for new issues is growing and if many of the largest venture-backed companies are holding off on going public, smaller names are using SPACs to access public capital and reach these new investors.

Blistering civil rights audit raises alarms about Facebook’s ongoing policy failures

By Taylor Hatmaker

The results of a multiyear investigation into Facebook’s policies and their consequences for the civil liberties of its more than 2.5 billion users are out.

The audit, conducted by former ACLU director Laura W. Murphy and lawyers from law firm Relman Colfax set out by collecting concerns from a broad swath of civil rights organizations concerned about Facebook’s growing power and its potentially harmful reverberations through marginalized communities in particular and democratic society more broadly. The auditors also used concerns from some lawmakers, who have become increasingly critical of Facebook since the 2016 U.S. election, to steer their investigation. The ultimate goal of the project was to “make sure important civil rights laws and principles are respected, embraced and robustly incorporated” into the social network.

As the report notes, the audit doesn’t situate Facebook’s decisions in the context of it competitors, instead evaluating the company’s behavior on its own. The approach is useful, because social media companies often get a pass for behavior that’s standard in the industry, an approach that lowers standards across the board rather than looking at real-world impacts. The auditors make a point of giving Facebook credit for its cooperation in the audit, which the company itself undertook with pressure from outside groups concerned about its failings on issues like race-based hate, misinformation, voter suppression and extremism.

While the report has its positive moments of giving credit where credit is due, the auditors found that Facebook’s progress on civil rights issues has had many one step forward, two steps back moments over the last two years. Any sense of optimism about the company’s progress is tempered by frustration about Facebook’s policy missteps at the very top.

“While the audit process has been meaningful and has led to some significant improvements in the platform, we have also watched the company make painful decisions over the last nine months with real world consequences that are serious setbacks for civil rights,” the auditors wrote.

As far as positive decisions go, they cite Facebook’s progress on changing policy in discriminatory housing and employment ads, expanded voter suppression policies, census interference prevention measures, more frequent meetings with civil rights leaders and changes to content moderation policies, like its prohibition of praise for white nationalism that went into effect last year.

In spite of some progress, the auditors say they still have a number of concerns. Specifically, they called for Facebook to implement its voter suppression policies more aggressively leading into the 2020 U.S. election, citing President Trump’s ominous false claims about voting in the 2020 election, which went untouched on the platform.

Facebook’s enforcement of its policies against white nationalism and white separatism (terms mostly synonymous with white supremacy) were also an area of concern, with the auditors calling for the company to forbid this kind of content even if it doesn’t use those terms specifically. The chalked some of these failures up to the company’s policies being “too reactive and piecemeal” rather than coherent, a statement that anyone paying attention to the company’s recent decisions can certainly relate to.

The audit cites a number of specific moments as failures for Facebook’s policies, including Nick Clegg’s deeply controversial assertion last year that politicians wouldn’t be subject to the company’s already shaky fact-checking program, a decision widely denounced by civil rights leaders and Facebook’s other critics for giving people in power “more freedom on the platform to make false, voter suppressive and divisive statements than the average user.”

Mark Zuckerberg’s Georgetown speech last October enshrining a very narrow and contentious conception of free speech at the expense of everything else was another major moment of departure for Facebook from its stated commitment to civil rights, the auditors write. “The prioritization of free expression over all other values, such as equality and nondiscrimination, is deeply troubling.”

Facebook’s decision to this day to not reverse its course on posts from Trump that intentionally mislead the public about voting (in one he baselessly claimed vote-by-mail systems are “fraudulent”) also remains an ongoing source of frustration, undermining the company’s progress. The auditors wrote that they are confounded about why the company “has failed to grasp the urgency” of robust policy enforcement with fewer than five months to go before the U.S. presidential election, concluding that Facebook’s decision to keep the Trump posts up shows that civil rights and voting integrity fall far behind its expedient interpretation of free expression on the company’s list of values.

“This report outlines a number of positive and consequential steps that the company has taken, but at this point in history, the Auditors are concerned that those gains could be obscured by the vexing and heartbreaking decisions Facebook has made that represent significant setbacks for civil rights,” the report states.

The bits of the audit we’ve touched on here only scratch the surface of a fairly comprehensive and often clarifying examination of a complex company’s often troubling policy decisions, so we’ve embedded the full Facebook civil rights audit document below.

GoHealth eyes multibillion-dollar valuation as it sets its initial IPO price range

By Alex Wilhelm

GoHealth, a Chicago-based company that provides consumers with a digital portal to help them select insurance products, set an initial price range for its IPO today. The firm intends to price its equity between $18 to $20 per share in its debut.

As the company expects to sell 39.5 million shares in the offering, its IPO haul is huge. At the low-end of its range, GoHealth would raise $711 million, a figure that rises to $790 million at other end of its pricing spectrum. Including the 5.925 million shares the company will offer its underwriting team, its fundraise swells to between $817.65 million and $908.5 million.

Valuing the company at its IPO price range is a bit tough, as the firm was previously majority-sold to a buyout firm called Centerbridge in a deal that valued the firm at what Reuters reported as a $1.5 billion price-tag in 2019 (others confirmed the price). That transaction turned the company’s organization, and shareholding structure, into a muddle.

Parts of its shareholding structure are simple. The firm’s Class A shares, for example, at the top end of its IPO price, are worth around $1.7 billion, including equity offered to underwriters. So, regardless of what happens with its other interests and shares, the IPO looks set to be a win for Centerbridge.

Next, there are several hundred million Class B shares that come with votes, but no “economic interest in GoHealth, Inc.” And, finally, there are LLC interests in the company, which correspond with Class B shares. Holders of LLC interests can swap them for “newly-issued shares of our Class A common stock on a one-for-one” when they’d like.

So, how does that all square out? When we properly count all the shares for the firm and apply its IPO price range, GoHealth could be worth between $5.6 billion and $6.3 billion, figures that we are glad other publications arrived at as well.

That’s a big price tag, but one befitting a company looking to raise $711 million to $908.5 million in its public debut.

A financial reminder

In Q1 2020, GoHealth posted $141.0 million in revenue, and net income of $1.4 million. Not a fat profit margin to be sure, but it did make money in the period, which is always popular, if out-of-date in today’s IPO market.

The company has grown nicely in recent years, with its S-1 filing touting 139% “pro forma growth” from 2018 to 2019. That’s great, given that GoHealth has at least some history of making money as well.

Turning to the most recent quarter, however, we find some red ink. In the quarter ending June 30, 2020:

  • GoHealth had revenues of “between $118.0 million and $130.0 million,” up 66.4% at the midpoint of that range compared to the year-ago period.
  • That growth came at a cost, with GoHealth reporting that its “net loss is expected to be between $20.0 million and $26.0 million, as compared to net income of $15.3 million for the three months ended June 30, 2019.”
  • However, for the bulls out there, GoHealth’s adjusted EBITDA — a heavily tuned “profit” metric — should be between $24 and $28 million in the quarter, up from $17.2 million in the year-ago period.

How investors will parse all that out and place a proper valuation on the firm is their job; have fun, ya’ll.

What about startups?

Sure, GoHealth raised capital while it was a private company, and, sure, its business is digital. But it’s not really the core substance of TechCrunch’s coverage, namely startups. The company is around 19 years old, for heaven’s sake.

But what matters for our purposes is that earlier this year there was a boom in insurance marketplaces raising capital, leading TechCrunch to write a piece entitled “Why VCs are dumping money into insurance marketplaces.” GoHealth is a related entity to those younger companies. If it has a good IPO, that’s good for its smaller brethren. If it struggles, or only attracts a slim, unattractive multiple, it could partially chill the fundraising climate for companies looking to follow in its footsteps.

What India’s TikTok ban means for China

By Manish Singh

For more than a decade, China has limited how foreign tech firms that operate inside its borders do business. The world’s largest internet market has used its Great Firewall to block Facebook, Twitter, Google and other services in the name of preserving its cyber sovereignty.

The walled-garden approach has helped homegrown giants like Tencent and Alibaba Group win the local market, while giving the Chinese government a better hold on what gets communicated on these platforms. China has even suggested that other nations deploy similar measures.

Be careful what you ask for: Last week, dozens of Chinese firms got a front-seat view to the challenges their global counterparts face in their territory. With a press release, India declared that the world’s second-largest internet market was shutting the door to dozens of Chinese firms for an indefinite period.

India said it would ban 59 apps and services, including ByteDance’s TikTok, Alibaba Group’s UC Browser and UC News, and Tencent’s WeChat over cybersecurity concerns.

New Delhi is open to meeting these firms and hear their defenses, but for now, local telecom operators and other internet service providers have been ordered to block access to these services. Google and Apple have already complied with India’s order and delisted the apps from their app stores.

India’s order is already shifting the market in favor of local firms, several of which have rushed to cash in on the app ban. A crop of recently launched short-form video sharing services have amassed tens of millions of users just this week.

But depending on how long the ban remains in place, the move could also derail a big funding source for thousands of Indian startups. The vast majority of India’s unicorns count Chinese VCs as some of their biggest and longest-term backers. New Delhi’s order could also change how American giants, many of which are already bullish on India, review the market moving forward.

Today, we will explore various ways India and China’s situation could play out and impact various stakeholders. But first, some background on how tension escalated between the two nuclear-armed nations.

Swiftmile raises $5 million round led by Thayer Ventures for micromobility charging stations

By Megan Rose Dickey

Swiftmile, the startup that makes and deploys charging stations for electric bikes and scooters in cities, has raised a $5 million round led by Thayer Ventures with participation from Verizon Ventures, Alumni Ventures Groups and WSGR. This round brings Swiftmile’s total funding to $11 million.

“What’s happening today is streets are being totally reimagined,” Swiftmile co-founder and CEO Colin Roche told TechCrunch. “If you talk to any city planner, the old rules are being thrown out and new ones are being written. Public transportation use has plummeted because people are scared of [COVID-19] transmission in closed environments. We went from being a nice to have to a need to have.”

Swiftmile works with cities to deploy charging hubs and charges the operators by the minute, but not to exceed a certain amount, depending on the market. Initially, the docking system will be open to all operators in order to show them how it works and how beneficial it can be. After a certain period of time, Swiftmile will only charge its customers’ scooters.

With the new funding, Swiftmile plans to deploy its systems in three additional cities in the U.S., as well as work on expanding into Europe. Currently, Swiftmile has 150 smart-charging stations deployed throughout the U.S.

Hear how to manage your enterprise infrastructure from Sam Pullara at TechCrunch Early Stage

By Danny Crichton

In just over a decade, cloud-based platforms have completely reshaped the multi-hundred billion dollar enterprise IT market. Companies have thrown out their boxes and software-defined and microservice’d everything from the network stack to storage, compute, and application delivery and everything in-between.

It should be the most lucrative single slice of the startup world today, except for one (well, maybe three) major challenges whose their names are AWS, Google Cloud, and Azure.

The growth of these three platforms has been dizzying and they have driven much of the enterprise adoption of cloud technologies the past decade. But they also lock customers into their vertically-integrated offerings, leaving in some cases just table scraps for startups trying to find margin in an incredibly competitive world.

How can startups fend off the biggest cloud providers and still maintain growth? How can they offer differentiated offerings when AWS alone offers more services than are countable by the most advanced forms of artificial intelligence?

Thankfully, we have a long-time operator and veteran VC joining us at TC Early Stage online on July 21-22 to discuss this and more on how infrastructure startups can compete in platform-dominated world.

Sam Pullara is a managing director at Sutter Hill Ventures where he invests in enterprise infrastructure startups like application performance monitoring service Observe, DevOps platform Transposit, and anomaly detection startup Lacework.

He’s up-to-speed on the latest in the infra world, and informed from his previous experience at Twitter, where he was a senior technology advisor and a senior infrastructure engineer, and he was formerly Chief Technologist at Yahoo, which today is part of the Borg corporate entity that is Verizon Media, TechCrunch’s magnanimous and enigmatic parent company.

If you’re interested in the future of the enterprise, this is where you want to be.

TC Early Stage is our brand-new virtual event series that focuses on getting new founders the information, insight and advice directly from the experts — the founders, investors and lawyers who’ve been down these roads many times before. Schippers and Evans are joining an already incredible list of speakers, with sessions and talks from folks like Reid Hoffman, Brooke Hammerling, Dalton Caldwell, Garry Tan, Charles Hudson and Cyan Banister.

One catch: Each of the 50+ breakout sessions at TC Early Stage will be capped at just 100 people and will be filled on a first-come, first-serve basis. Buy your ticket today and you’ll be able to sign up for any breakout sessions we announce, plus any we’ve already announced that still have room.

It all goes down on July 21-22. The best news? This two-day event is all virtual, so you can tune in from the comforts of your couch. Want to know more? Find all the details you could ever want right here.

Ford’s Bronco relaunch demonstrates the power of nostalgia

By Matt Burns

Ford is finally taking the wraps off the reborn Bronco next week. Literally. The company has teased the vehicle for months, showing a camouflaged SUV bouncing through rocky streams and charging over dusty hills. This week, the wraps come off and the sheet metal will finally be exposed.

The launch of the Bronco looks to be a masterclass in nostalgia. For the last few weeks, Ford has been feeding journalists with media assets — pictures, staged interviews, and upcoming advertisements. And I’ve yet to see the full vehicle because in the end, Ford is not relying on the Bronco itself to drive sales, but rather, is digging deep into the power of nostalgia to move the Bronco off lots.

Recalling the past can help companies develop a unified theme around a product or service. And in this case with the Bronco, only recalling part of the past helps companies dial in messaging. With Ford, the company wants consumers in agreement: this is a tough vehicle and it’s always been a tough vehicle. Forget about OJ, these adverts say. Instead, look at how the Bronco was used by two burly men bounding over the rolling hills of a cattle ranch. Ford is digging deep into American lore to show the Bronco as a rugged conqueror of the frontier instead of a conqueror of parking lot flowerbeds.

The Bronco is an iconic American vehicle. It wasn’t the best selling, nor the best performing vehicle in its class. It had reliability issues, and was often underpowered and outclassed by competitors. And yet, like the Mustang, it was a hit for Ford. In 1966 Ford unveiled the Bronco as a competitor to the Jeep CJ-5 and International Harvester Scout. Ford took the Bronco racing, and racked up wins in long-distance endurance races. Over its 31-year run, the Bronco remained true to itself as a two-door, sport utility vehicle.

The upcoming model is set to be different than the past. Ford is relaunching the Bronco as a family of vehicles with three models at launch. Little is known about the difference at this time, though the family appears to include a two-door off-roader, four door version and an entry-level sport model.

The launch of the new Bronco is similar to how Ford launched the retro Mustang in 2005. At the time, the Mustang was coming off decades of stale designs and lagging sales. The Fox body Mustang of the 80s was boring at best (though the 5.0 engine is notable), and the swooping design of the ’90s model was uninspired. In 1999, Ford launched a sharp, modern take on the Mustang, and yet in a few years, it was time for something new.

Popshop Live gets $3 million to bring live streaming to shopping

By Jordan Crook

Streaming video has become a huge part of our lives, whether it’s watching your favorite shows on Netflix or getting live TV through Hulu or YouTube or checking out your favorite gamers on Twitch. But streaming is trickling into other facets of our lives, too, whether it’s fitness or the move from physical events to virtual ones.

The next frontier? For Popshop Live, it’s shopping.

Popshop Live is an ecommerce platform that uses streaming video to let sellers both connect with their shoppers and sell their wares in a new way. The company has today announced the close of a $3 million funding round, led by Floodgate and Abstract Ventures, with participation from Long Journey Ventures, Cyan and Scott Banister, Shrug Capital, Backend Capital and Halogen Ventures. This brings the company’s total funding to $4.5 million.

Founded by Danielle Li, Popshop Live is a reimagining of the Home Shopping Network, or QVC, for the year 2020. Individual sellers, or established brands and stores, can get on the platform to create and host their own shows. The product also integrates with Shopify to help sellers manage their inventory and POS during the show without any additional hassle.

Popshop Live provides sellers with a playbook for best practices on running their own show. Sellers also get access to gamification features, show templates, real-time performance stats, and metrics reports to give them a complete picture of how their show is performing across a wide range of data points.

Japan LA, one of the biggest stores on the platform, did more sales on Popshop Live than its offline and online sales combined on an average Saturday before the pandemic. Popshop Live told TechCrunch that Japan LA did $17,000 in sales with more than 1,500 individual checkouts in a single show. The company has even started reserving a portion of its inventory specifically for sale via Popshop.

“What I love most about our Popshop Live shows is that, with the live videos and interactive features, I’m able to respond to customers’ requests in real-time, such as adding any products that the audience sees in the show on the fly,” said Jamie Rivadeneira, Owner of Japan LA. “I also love that I’m able to bring the same energy as helping customers in person, but to hundreds of people at once.”

She added that Japan LA is considering setting up a dedicated studio space for Popshop Live shows.

Popshop Live 1 min reel from Popshop on Vimeo.

Sellers can share the link to their show on their social platforms or on their website and direct shoppers to the platform. Once users are on the platform they can browse other shows that they might be interested in.

Cyan Banister, an investor in the platform, also started her own show to sell stuff she had sitting around in her house. She chose to give the profits to charity and matched all sales through her show. In total, she sold $8,000 worth of stuff, and with the matching, gave $16,000 to charities.

I asked Banister if the pandemic, which has stalled offline retail sales significantly, had any impact on her decision to invest in Popshop Live.

“No,” said Banister concisely. “What Danielle is building can shine in or out of a pandemic. It might have been harder to get customers on board, so in a pandemic she benefits from that in that all of these stores need a way to sell their products.”

Banister added that it goes beyond giving businesses a new way to sell their products, as both sellers and shoppers are finding a community within Popshop Live.

The Popshop Live team consists of 17 people, with 70 percent people of color and 40 percent women.

The app is currently invite-only and available on iOS. However, readers can download the app here using the code “TECH20”.

Teal, with $5 million in funding, looks to help people land a job

By Jordan Crook

Teal, a platform that looks to help people land jobs that they love, has closed a $5 million seed round, which was led by Flybridge Capital, with participation from Lerer Hippeau, Corigin Ventures, Aleph, Oceans Ventures, Hight Output, AVG Basecamp, and Kairos Angels.

Teal launched in November of 2019 with a system that did all of the heavy lifting for people seeking jobs, including resume consultations, searching listings, and sending application information to the right people. Essentially, Teal handled everything but the interview.

Since launch, the company has made a slight pivot to a product that’s more scalable, called Career Assist.

Fano explained that, with the original product (called Career Agent), there was a group of people who were very clear on what they wanted and saw great success on the platform. But there was also a group of people who were unsure about their career path that Teal was spending a tremendous amount of time and energy on, and they still weren’t seeing success.

“There was something kind of flawed in this model in that the people that want us the most and will pay us for the longest are going to be the least satisfied,” said Fano, adding that Career Agent was built more for job-hopping than helping people who were unemployed find a job. “So we decided to take all the learnings we’ve gotten through Career Agent and understand where things repeat and where there are inefficiencies that don’t get identified on an individual basis. When you do that for many people, you can start to identify those patterns.”

Career Assist is a curriculum that allows cohorts (of 20-30 people) to learn the best possible process for finding and landing a job they want. It includes a four-week workshop (eight classes in total) guided by experts who lead live sessions around everything from writing a resume to how to send in that resume (to the right person) to interview skills.

According to cofounder and CEO Dave Fano, applying for a job through a website is one of the worst things you can do. Instead, applicants should find the head of recruiting or HR and send them a direct email. There are also plenty of tactics, gleaned from the sales playbook, that increase an applicant’s chances of hearing back on an email.

Teal looks not only to give job-seekers a better, more interactive playbook for landing a job, but also pairs its members with other members who are going through the same thing, to offer emotional support and empathy during a time where people desperately need it.

Career Assist was originally launched for free, but has since moved to a paid model, costing users $149 for full access to the four-week program. Since April, more than 200 people have landed new jobs after going through the course.

Fano, a serial entrepreneur who sold his first company, CASE, to WeWork, has a much broader vision for Teal than getting a job. There are many situations over the course of a person’s career where they can benefit from guidance and expertise, such as negotiating contracts, asking for a promotion or a raise, or resigning.

Teal wants to stay with workers throughout the entirety of their career to help them navigate these more challenging situations.

Teal plans on using the funding to continue growing the team, which is currently at 12 people, with a 50/50 split between men and women.

Fano says that one of the greatest challenges for the company is also one of its biggest opportunities. He explained that most people think they need an individual, bespoke career coach because of the general complexity of individual careers.

Fano believes that by combining resources that exist with data from its existing user base, Teal can cover a broader set of situations and circumstances for people than an individual coach may be able to while still being able to give specific advice from this collective data set.

“Building up that data set is one of the bigger challenges, and that’s why these things don’t exist,” said Fano. “But that’s also why we’re taking the approach that we are, focusing on things that don’t scale, and so far we’ve seen that people are very willing to interact with us because we’ve shown we’ve got their best interest at heart.”

He added that the company has no interest in becoming a B2B tool that sells into the HR department, but rather wants to focus on the end-consumer.

Trump’s sudden reversal on student visas will be felt in Silicon Valley

By Natasha Mascarenhas

Growing up in the Philippines, Andreia Carrillo always liked the stars. It’s what brought her to the United States to study astronomy, and why she wants others to follow in her footsteps and study the stars.

“Though, we’ll see if that happens now,” Carrillo said.

Carrillo is one of the hundreds of thousands of students affected by a recent rule change, issued by U.S. Immigration and Customs Enforcement (ICE) to no longer allow international students from staying in the U.S. if their university moves classes fully online.

The rule change, published Monday, lands as the threat of the coronavirus pandemic grows across the country, forcing some universities to shift to digital-only operations for the fall.

News of the rule change caught immigration lawyers by surprise. The Trump administration said nothing more about the policy beyond a tweet from the president: “SCHOOLS MUST OPEN IN THE FALL!!!,” a decision over which the federal government has little authority. It’s a sharp reversal from the administration’s position in March — at the height of the pandemic’s spread in the U.S. — allowing students to retain their lawful immigration status even as in-person classes were suspended across the country.

SCHOOLS MUST OPEN IN THE FALL!!!

— Donald J. Trump (@realDonaldTrump) July 6, 2020

The sudden rule change puts universities in a difficult dynamic: administrators can let campuses stay open to keep international students in the country but run the risk of spreading the virus; or close up, maintain social distancing, and international students be damned.

But the knock-on effect will be felt across the U.S., not just by the students, the universities whose revenue largely depends on higher tuition fees from international students, or even the college towns whose economies rely on schools keeping their doors open. The rule change will also impact the fields that these students pursue, largely engineering, math, and computer science, and the rate of innovation that can be sustained in a country without the core, often invisible, talent behind it.

After all, one of the most popular destinations for international students is the state of California, the heart of Silicon Valley.

Eric Tarczynski, the founder of Contrary Capital, says that he’s seen “scores of entrepreneurial people come to universities from abroad explicitly because it’s their gateway to building a company in the United States.

“To some extent, it’s their Ellis Island, and we’ve funded several companies this way,” he said. He pointed to alternative programs, like Lambda School, will help the same talented students shift online.

New York University president Andrew Hamilton said in response to the government’s rule change that “requiring international students to maintain in person instruction or leave the country, irrespective of their own health issues or even a government mandated shutdown of New York City, is just plain wrong and needlessly rigid.”

“If there were a moment for flexibility in delivering education, this would be it,” he wrote..

NYU will join a chorus of other schools in reaching out to federal officials to ask them to revoke the rule change. Harvard and MIT have gone further by suing ICE to stop the rule change going into effect.

“The coronavirus has become a vehicle for the administration to continue in its advancement of anti-immigrant policies,” Tahmina Watson, an immigration lawyer, told TechCrunch. “With the election looming in a few months, the administration is looking for every possible angle to block immigration.”

“The invisible wall is real and gets higher every day,” said Watson.

One option for schools is going to the hybrid model route where some classes are taught live and others are taught online. Harvard, for example, said it will bring up to only 40% of undergraduates to campus this fall. Universities that go virtual may struggle to justify their traditionally exorbitant tuition fees.

The rule change touches on a nerve that has been agitated throughout the pandemic: how remote education shapes what we can learn, and more importantly, who can have the opportunity to learn. Some have noted that a remote shift might harshly impact international students who have spotty connections in other countries. Others say that higher education’s appeal in the U.S. is largely the network it provides.

In Carrillo’s case, there was no opportunity to study astronomy in the Philippines. She had to come to the U.S. if she wanted to pursue her dream career path.

The rule change is likely to face legal challenges. Watson noted that Monday’s policy has questionable legality. The administration referred to it as a “temporary final rule,” which she says essentially avoids the rule going through a more typical public comment period.

“I am sure schools, among others, would have a lot to say about this policy,” said Watson. “If the administration wants to change long standing policy, the Administrative Procedure Act should be followed at every step.”

The rule, thus, awaits more direction and clarity from the administration. Until then, it is up to colleges and students to figure out how to process the drastic step.

One international student who attends graduate school at University of Washington, who asked to remain anonymous fearing their visa status, said that the rule change puts their research and scholarship at risk if they are forced to go back to their home. If their school opts for a hybrid model, they worry about their health.

“I’ve never felt so disrespected in the United States,” the student said. “If only the international students are required to go back to class, and there is a chance of getting the virus, you’re risking the international students to get infected, they said.

When Carrillo heard the rule change, she said she panicked and emailed her department. To her relief, her current college — the University of Texas, Austin — will take a hybrid approach to classes in the fall. She can stay in the country, for now.

But the news isn’t a complete sigh of relief. International students, like Carrillo, are used to feeling a false sense of security under the Trump administration.

“I feel so shitty for wanting things to be hybrid,” she said. “Morally I want things to be safer and have things online, but then that would also mess up my stay here.”

 

The TourBox adds a touch of tactile control to your editing workflow in a portable package

By Darrell Etherington

Now is a great time to be dipping back into creative projects you’ve had on hold, including editing archives of photos you promised you’d get back to ‘later.’ There are a number of different gadgets designed to help make that process easier, but one of the more accessible is the TourBox, a $169 hardware controller that includes a number of different hardware buttons, dials and switches which can be customized via software to work with a variety of creative applications.

The basics

TourBox is a device that occupies roughly the desk space of an Apple Magic Trackpad, with a USB-C connection to plug into your computer. It’s equipped with a D-pad, two dials, a scroll wheel, and seven buttons. The TourBox software provides customizable controls for each of these, allowing you to assign keys to each.

Built-in profiles support popular photo editing applications including Photoshop, Lightroom and Capture One; video editing software like Final Cut Pro, Premiere and DaVinci Resolve; and drawing software including Clip Studio Paint. Each of the default configurations for these applications can also be customized depending on a user’s preferences and needs.

TourBox differs from other, more expensive devices in this category in a number of respects – it leans heavily on keyboard shortcuts, for instance, definitely simplifying software actions but not providing the same level of plug-in integration that competitors including the more premium Loupedeck+ and Loupedeck CT provide. Those are considerably more expensive, however, and what TourBox provides could suit the workflows of pros who are looking primarily to supplement, rather than replace their existing keyboard productivity workflows.

Design

The TourBox is compact, but feels sturdy. It’s heavier than I expected, which makes it more likely to stay put on the desk where you put it rather than shifting around during use. The exterior is a matte, rubberized plastic that has a nice aesthetic and a pleasant tactile feel, though it will pick up dust.

TourBox’s buttons and controls feature unique shapes and elements like raised spokes and ridges on the wheels to help you navigate the control surface entirely by feel. It produces a controller that looks very interesting because of its asymmetrical layout and exterior surface, but all of that actually makes it much easier to learn how to operate it entirely by feel after a little practice, which is key to long-term use in terms of actually ensuring the TourBox saves you time, by being something you can eventually basically commit to muscle memory.

While the design of the buttons and other controls makes a lot of sense, the actual feel of them isn’t all that great. There are some highlights, including clicky turning to help with fine-grained controls, but overall the buttons feel a bit mushy and generally don’t match up to the feel of the controls on other surfaces like the Loupedeck hardware mentioned above. Given the price difference, the lower-quality feel of the physical controls can be forgiven, and it doesn’t affect actual performance, but it’s something to keep in mind.

Performance

As with any new hardware controller, the TourBox takes some getting used to, and the software that the company provides, while it includes a basic tutorial, requires non-obvious user tweaks like manual switching of profiles to work with different applications. There’s a major 2.1 update in the works that will deliver auto-profile switching, among a number of other improvements.

Once you learn how to use the TourBox software and spend some time familiarizing yourself with the profiles for the applications you use, TourBox is indeed user-friendly, and can save you a lot of time and extra keystrokes on most common functions, including things like zooming and panning, adjusting brush size, undoing and redoing and much more.

As mentioned, the unique physical layout and button shapes appear initially odd, but ultimately mean that you can develop a very memorable workflow using the TourBox that becomes second nature. By default, some of the modifier key combinations that were shipped in the software profiles required a bit of unusual hand gymnastics for me, but all of these are customizable so it was easy to make changes that resulted in more ergonomically friendly usage.

Bottom line

While there are a growing number of options when it comes to hardware control surfaces to help you create an at-home editing suite, the TourBox at $169 is one of the most affordable out there. It’s also an extremely portable option, requiring just one cable, which you can easily pack in just about any bag.

More demanding and pro users would do well to look at Loupedeck’s offerings, and the Monogram Creative Console provides a lot more modular customizability for a system that can grow with your needs, but for on-the-road editing and for enthusiasts who are just looking for something to make their editing easier and faster but with minimal fuss, the TourBox is a solid option.

As media revenue struggles, subscription startups see growth

By Alex Wilhelm

The COVID-19 pandemic hasn’t been a friend to the media business. Its economic impacts slashed advertising budgets, diminishing a key revenue plank for many publications. The results of falling ad spend have been felt across the industry, with a wave of layoffs hitting publications large and small, niche and general.


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Other forms of publisher income, like events, have also been reduced. But the pain of 2020’s media downturn hasn’t been felt equally in the industry. Publications that had built subscription revenue bases were in a better position to weather declines in other media incomes than peers who hadn’t; revenue diversification can provide real shelter when the economy rapidly shifts.

Subscription incomes are not enough for publications to avoid all pain; The Atlantic’s subscription base famously surged during the early months of COVID-19, but the company still saw layoffs. The Athletic’s subscription business was predicated on sports events taking place — it too underwent cuts despite a membership-first model.

In this era, the healthiest publications tend to have a subscription component. The paywalled New York Times and Wall Street Journal are hiring, as is Business Insider, which launched a membership service in 2017. But not all subscription publications that are succeeding are large. Indeed, thanks to a growing set of publisher-friendly subscription services, there are a number of options in the market for supporting publications as small as a single author.

Perhaps most famously, Substack has seen good growth in the last year. The venture-backed newsletter-and-blogging service provides authors with the ability to charge for their writing. But other startups are competing in the space, helping publications derive more income directly from readers.

Pico, which provides paid-subscription tooling for publishers, has seen strong growth in the COVID-19 era. TechCrunch caught up with its co-founder Jason Bade to chat about what his company has seen in recent months. And a few months ahead of COVID-19’s arrival, publishing platform Ghost launched its paid subscription product into beta. TechCrunch asked Ghost about the reception, and growth of the membership portion of its business to better understand today’s media market.

What emerges from data and conversations concerning the startup-supported media membership landscape is something hopeful. Some writers are going to build micro-pubs that can finance their existence. And larger publications have never had more available help to wean their businesses off of ads, pageviews, and Google’s favor.

Google launches the Open Usage Commons, a new organization for managing open-source trademarks

By Frederic Lardinois

Google, in collaboration with a number of academic leaders and its consulting partner SADA Systems, today announced the launch of the Open Usage Commons, a new organization that aims to help open-source projects manage their trademarks.

To be fair, at first glance, open-source trademarks may not sound like it would be a major problem (or even a really interesting topic), but there’s more here than meets the eye. As Google’s director of open source Chris DiBona told me, trademarks have increasingly become an issue for open-source projects, not necessarily because there have been legal issues around them, but because commercial entities that want to use the logo or name of an open-source project on their websites, for example, don’t have the reassurance that they are free to use those trademarks.

“One of the things that’s been rearing its ugly head over the last couple years has been trademarks,” he told me. “There’s not a lot of trademarks in open-source software in general, but particularly at Google, and frankly the higher tier, the more popular open-source projects, you see them more and more over the last five years. If you look at open-source licensing, they don’t treat trademarks at all the way they do copyright and patents, even Apache, which is my favorite license, they basically say, nope, not touching it, not our problem, you go talk.”

Traditionally, open-source licenses didn’t cover trademarks because there simply weren’t a lot of trademarks in the ecosystem to worry about. One of the exceptions here was Linux, a trademark that is now managed by the Linux Mark Institute on behalf of Linus Torvalds.

With that, commercial companies aren’t sure how to handle this situation and developers also don’t know how to respond to these companies when they ask them questions about their trademarks.

“What we wanted to do is give guidance around how you can share trademarks in the same way that you would share patents and copyright in an open-source license […],” DiBona explained. “And the idea is to basically provide that guidance, you know, provide that trademarks file, if you will, that you include in your source code.”

Google itself is putting three of its own open-source trademarks into this new organization: the Angular web application framework for mobile, the Gerrit code review tool and the Istio service mesh. “All three of them are kind of perfect for this sort of experiment because they’re under active development at Google, they have a trademark associated with them, they have logos and, in some cases, a mascot.”

One of those mascots is Diffi, the Kung Fu Code Review Cuckoo, because, as DiBona noted, “we were trying to come up with literally the worst mascot we could possibly come up with.” It’s now up to the Open Usage Commons to manage that trademark.

DiBona also noted that all three projects have third parties shipping products based on these projects (think Gerrit as a service).

Another thing DiBona stressed is that this is an independent organization. Besides himself, Jen Phillips, a senior engineering manager for open source at Google is also on the board. But the team also brought in SADA’s CTO Miles Ward (who was previously at Google); Allison Randal, the architect of the Parrot virtual machine and member of the board of directors of the Perl Foundation and OpenStack Foundation, among others; Charles Isbel, the dean of the Georgia Institute of Technology College of Computing, and Cliff Lampe, a professor at the School of Information at the University of Michigan and a “rising star,” as DiBona pointed out.

“These are people who really have the best interests of computer science at heart, which is why we’re doing this,” DiBona noted. “Because the thing about open source — people talk about it all the time in the context of business and all the rest. The reason I got into it is because through open source we could work with other people in this sort of fertile middle space and sort of know what the deal was.”

The tech industry comes to grips with Hong Kong’s national security law

By Rita Liao

Scott Salandy-Defour used to make frequent stops at a battery manufacturer in southern China for his energy startup based in Hong Kong. The appeal of Hong Kong, he said, is its adjacency to the plentiful electronics suppliers in the Pearl River Delta, as well as the city’s amenities for foreign entrepreneurs, be it its well-established financial and legal system or a culture blending the East and West.

“It’s got the best of both worlds,” Salandy-Defour told TechCrunch. “But it’s not going to be the same.”

On July 1, Hong Kong’s sweeping new national security law came into effect, spelling the most profound change to the city’s way of life since the former British colony returned to Chinese rule in 1997.

The legislation will see Beijing set up an official security apparatus in the city to suppress what the authority defines as subversion, terrorism, separatism and collusion with foreign forces. Non-permanent residents can be expelled and companies can face fines if suspected of contravening the law.

Though the law doesn’t target the technology sector per se, speculation is rife about how it may affect entrepreneurs and larger companies as they go about their day-to-day operations and long-term plans. We talked to a handful of individuals in an attempt to parse out the ramifications of the law on internet freedom, data control, entrepreneurship, venture capital and other aspects pertaining to the tech industry. Several of our sources requested to have their names withheld in order to speak freely, an example of the law’s effect in action.

Part of the concern arises from the vagueness of the legislation. “We do not know anything concrete,” a Shanghai-based lawyer specializing in cross-border corporate cases told TechCrunch. “The national security law passed in Macau 11 years ago, but I heard there have been no enforcement cases. Hong Kong might be different. Police already prepared and carried banners warning against speech or gathering in violation of the new law.”

The bottom line is that the law impacts everyone in Hong Kong. “[It] will have a chilling effect as people try to understand its implementation,” reckoned Jeremy Daum, a senior research fellow at the Yale Law School Paul Tsai China Center.

Internet freedom

An outstanding concern is that the new rules could curtail internet freedom in the freewheeling city. Specifically, Article 9 stipulates that the Hong Kong government “shall employ necessary measures to strengthen publicity, guidance, oversight and management in schools, social organizations, media, networks and other matters related to national security,” with ‘networks’ here referring to the internet.

There are already signs of self-censorship. Some residents have started to delete their Twitter accounts and messages “out of fear of the national security law,” a Hong Kong-based media professor pointed out to TechCrunch.

While the law doesn’t give rise to “a Great Firewall situation overnight, it will be insidious nonetheless,” said a Hong Kong-based digital rights expert. “Platforms, publishers, and content hosts are likely to self-censor broadly given the vagueness of the law, and even then we’ll likely see more takedown requests and the like from the government.”

Shortly after the law took effect, an app called Eat With You, which labels local eateries supportive of the Hong Kong protesters, terminated its service. A source close to the app told us that the takedown was voluntary. Though the developer didn’t say whether it made the decision to preempt internet crackdown, it has “put other plans on hold.”

AppleCensorship.com told TechCrunch it’s monitoring potential removal of apps by Apple in Hong Kong, where the giant commands a 44% market share in the mobile handset market. The site is a project created by researchers at GreatFire.org, an organization that monitors internet censorship in China, to track what apps are unavailable in various App Stores.

“Apple has shown over and over again that they are willing to censor apps on their platform at the behest of government authorities,” said GreatFire.org’s Charlie Smith of Apple’s recent removal of TikTok in India.

A week after the law’s enactment, tech giants have come to reckon with the city’s new circumstances. Facebook and Twitter said they have suspended data requests from the Hong Kong authority. TikTok, on the other hand, announced it would exit Hong Kong. Reddit, which received an outsize investment from Tencent, provided a more evasive response: “All legal requests from Hong Kong are bound by careful review for validity and with a special attention to human rights implications.”

Residents in the city of seven million people have been bracing for censorship in recent weeks. Demand for virtual private networks (VPNs), which let users access otherwise banned apps, surged in Hong Kong after Beijing passed the national security law in late May.

“But a VPN is not a magic bullet,” the media professor argued. The tool has proven to be a short-lived solution. Back in 2017, Apple removed hundreds of VPNs from its Chinese App Store, stating it did so to comply with Chinese regulations.

Others who are more attuned to the Chinese internet are less wary. Hugo Cheuk, co-founder and chief operating officer of viAct.ai, a Hong Kong-based startup using computer vision to manage construction safety, said he already uses a wide range of apps, both Chinese and overseas ones, and can easily switch to alternatives.

“Let’s say if for whatever reasons WhatsApp cannot be used in Hong Kong one day, you still have other options like Messenger, Line, Dingtalk, WeChat,” he said. “Even apps like Slack or Snapchat weren’t popular just a few years ago, but we still communicate well back then.”

Data control

Some worry that the enforcement of the security law could lead to requests of user data by Beijing, making Hong Kong a less attractive place for tech companies resistant to China’s data review policies. As Daum noted, several provisions directly allow for the search of electronic devices and request service providers to delete information.

According to Article 43:

“When handling cases of crimes endangering national security, the Hong Kong Special Administrative Region government police department for the preservation of national security may employ the various measures that the extant laws of the Hong Kong Special Administrative Region allow the police and other law enforcement departments to take when investigating serious crimes, and may employ the following measures:

(1) search premises, vehicles, boats, aircraft and other relevant places and electronic devices that may contain evidence of an offence.

(4) Requiring persons who published information or the related service providers to remove information or provide assistance.”

“When setting up their APAC headquarters, foreign headquarters may no longer choose Hong Kong because the law overrides the original legal system,” partner of a Hong Kong venture capital firm told TechCrunch.

While Hong Kong is primarily known as a free trade and financial center, many international tech firms have set up offices there as a conduit into the APAC market.

Facebook and Twitter, whose main services are unavailable to mainland users, employ marketing staff in Hong Kong to court Chinese exporters with overseas advertising needs. Unicorns like delivery service Lalamove, logistics firm Gogovan and travel platform Klook, put their headquarters in Hong Kong for its strategic geographical location to attract customers across Asia.

“As a historic trading center, with ease of currency exchange, data and logistic flows, Hong Kong has played a key role in cross-border e-commerce. Many start-up tech companies service clients across Southeast Asia from a base in Hong Kong,” said Napoleon Biggs, a digital marketing consultant with over two decade’s experience in the region.

Though the new regulation may hit these sectors in terms of requests for government access to data, it will not affect their businesses otherwise, he reasoned.

Being in a key geographic location, as an internet hub for submarine cables and satellite dishes, Hong Kong also acts a top data center destination for multinationals, Biggs observed. The question now, he said, is how multinationals will perceive this new law and how it will affect their daily operations, if at all.

Startup hopes

Many entrepreneurs see Hong Kong as a springboard to its nearby resources rather than their main market. “Hong Kong investors are super risk-averse. The risk of being an entrepreneur doesn’t have the same level of respect here as in the U.S.,” reckoned Salandy-Defour, whose company Liquidstar deploys smart batteries primarily in Africa.

“But there are opportunities to network quickly,” he added. “We are also so close to Shenzhen and can speak to people [in tech] there who know what they are doing.”

Some Hong Kong entrepreneurs are hopeful that the law could accelerate the Greater Bay Area (GBA) initiative, which aims to stitch together Hong Kong, Macau and other cities around the Pearl River Delta, including economic powerhouses like Shenzhen and Guangzhou.

With its own set of laws and economic system in line with Western practices, Hong Kong has long been a top destination for multinational financial services. The special status was, however, not beneficial for technology companies targeting the Chinese market.

“If we want to do business in China, the first concern is the adaptation of different laws of China. Now, with the newly established national security law plus the GBA initiatives, more resources will be allocated to the 9+2 cities in the market and business perspectives, so we can more easily access the China market,” suggested Cheuk.

The integration can extend the potential reach of Hong Kong companies from seven million customers to 70 million in the GBA region, the entrepreneur said. “It’s good for startups trying to attract investment.”

His optimism is echoed by a Hong Kong-based investor for a Chinese venture capital firm. “After the law came into effect, there may be fewer technological exchanges between Hong Kong and the U.S. or Europe, but the GBA is more important to Hong Kong’s future development.”

For Hong Kong-based entrepreneurs who uphold freedom of information, the law may not bode well. Salandy-Defour, an American citizen, said he’s mulling a move to Singapore or Australia. In the long term, he plans to diversify his supply chain in other countries like Japan or Germany for sustainable batteries.

Relocation is less realistic for entrepreneurs who generate most of their revenues from the mainland. Several of them voiced concerns about the law’s adverse effect on freedom of speech, but have declined our interview requests due to concerns that their comment may violate the new law.

Decoupling spillover

The divide between Washington and Beijing is spilling into Hong Kong as the security law is seen as undermining the territory’s autonomy. In response, the U.S. declared Hong Kong is no longer autonomous from China and suspended the export of sensitive technologies to the city.

The impact of the split was evident. Shortly after China passed the national security for Hong Kong in late May, Hong Kong-based staff of China Mobile lost access to a piece of IBM data software, an employee at the Chinese telecom giant told TechCrunch. The staff has since switched to a Huawei substitute called TaiShan, which the source said comes with a user interface “very similar” to the IBM product.

China Mobile and IBM have not responded to our request for comment.

When it comes to picking promising local startups, the Hong Kong venture partner said he will avoid industries deemed ‘sensitive’ or susceptible to sanctions by the U.S. He’s also advised portfolio companies with an international plan to diversify their supply chain from China to nearby regions like Southeast Asia. Limited partners from the U.S. may start to shy away from Hong Kong VC funds, he speculated, as the city gets caught in the crossfire of trade tensions.

It’s notable that one of the most prominent VCs in Hong Kong, Horizons Ventures, which backs a lot of startups globally and is led by one of Asia’s richest men Li Ka-shing, has long kept a low profile. It continues to do now, perhaps very wisely. Some of the big names in its expansive portfolio include Spotify, Slack, Zoom, Impossible Foods and Skype. The firm did not respond to requests for comment for this article.

An unintended implication of Hong Kong’s loss of its special status is the potential inconvenience to mainland companies. It’s a common practice for Chinese companies to maintain a Hong Kong entity as a gateway to purchase U.S. technologies, tapping the region’s favorable trading terms, the venture partner said. Many Chinese exporters also take advantage of Hong Kong’s well-developed financial system and currency stability to handle international fund transfers.

“If that expediency is gone, Hong Kong is just another Chinese city,” said the investor.

Blavity has a big opportunity with Black millennials, despite struggling to fit the VC formula

By Connie Loizos

Black Lives Matter may be the largest movement in U.S. history, according to four different polls cited recently by the New York Times that suggest anywhere from 15 million to 26 million people in the U.S. have participated in demonstrations over the death of George Floyd and others since Floyd’s death in late May.

Blavity, a six-year-old, L.A.-based media company that’s focused on Black culture, could hardly be better positioned to help outraged Americans better understand what’s really been going on. Blavity founder Morgan DeBaun says the outfit receives at least a handful of videos each week that feature egregious acts against Black Americans, and the same has been true since DeBaun, working at the time at Intuit, founded the company in 2014 after unarmed, 18-year-old Michael Brown was gunned down by a police office in her native Missouri.

Blavity tells the stories that the mainstream media has largely been missing, but that’s only part of the story. The company is also become a go-to destination for a growing number of Black millennials interested in fresh takes on culture and politics; in Black Hollywood and travel (via two other properties it runs); and in its sizable networking events, one of which attracted 10,000 people last year.

Last week, we talked with DeBaun about Blavity — which has raised a comparatively conservative $11 million to date, including from GV, Comcast Ventures, and Plexo Capital — to learn more about how the company seizes this moment, and whether investors see the opportunity. Our chat has been edited for length and clarity (you can hear the full discussion here).

TC: You started Blavity in part to address a need you were feeling to connect with others after Michael Brown’s death. What were you reading at the time?

MD: The unfortunate answer is I wasn’t reading anything. I hadn’t really felt the need to stay connected to local or regional or Black issues until I moved out of my community and found myself wondering [from California], what is going on.

Historically in the Black community, we’ve had our own networks and platforms and brands: the African American newspapers in various cities, Essence, Jet, Ebony, and more recently, The Root. [But] a significant amount of media publications are still focused on entertainment and Hollywood and not necessarily on news. And so there was a huge gap of information that I felt wanting to understand.

This was before Twitter really became a source of information and truth for so many people, so there was a gap of information from what I saw happening on the ground in St. Louis and in text messages and as part of an email list with friends who were on the ground, and what I saw in the mainstream media. And to me, that was a huge miss, because we needed to be connected at that point more than ever so we could help impact change.

TC: There’s a lot of social injustice covered by Blavity. Two of the most popular stories on the site as we speak are about Sacramento police officer who placed a plastic bag on a 12-year-old’s head, and a cop who was arrested and charged after tasing a pregnant woman on her stomach. Are these stories central to making Blavity a resource to its readers?

MD: We tend to be a reflection of the pulse of the reality and the Black experience, and we do share stories and news that people might not find other places. I get the question more recently about: Does this time feel different? Are we covering different things? And unfortunately, the answer is that we’ve been covering these stories weekly since Michael Brown happened. It’s been a critical part of our publication and ethos to ensure that we’re sharing the stories of our community and bringing light to the injustices that are happening.

We also share joy and happiness and celebrations and moments of great accomplishments and local stories of heroes. But certainly right now, we’re making sure that we’re doing our diligence and covering the stories that are very important for this moment in time.

TC: You recently told Forbes that advertisers and marketers do not want to spend money next to Black death and violence. You have to cover these stories because it’s core to what you do, but it’s a double-edged sword for you, it sounds like.

MD: Blavity as an organization has five different brands. So we have a diversified revenue stream where we don’t just rely on display advertising against our news business, because if we did, we would wind up very much similar to what we’ve seen happen [to other struggling media companies]. There was a time when our Facebook page was even blocked because [stories] have gotten flagged as being too violent. And it’s like, well yeah, violence against Black bodies is real. It’s the truth; it’s real news.

So we do have this weird kind of balance that we strike in terms of really making sure that we’re telling the truth and that we are pushing back against our clients, our advertisers, and even Facebook to ensure that Blavity can continue to distribute content. But overall, the news business isn’t our highest revenue-generating business. It’s our conference business and our display ads business across all of our brands, some of which are lifestyle brands.

We also have an ad network that we don’t advertise publicly much, but essentially, we run ads and sales operations for other publishers of color who maybe don’t have the scale to necessarily have their own sales team and ad tech and engineers and things of that nature. We’re fighting for deals against a Vice or a Refinery 29 that also have ad networks, so we wanted to make sure that we could also win those deals and we needed that huge inventory and [that business has] allowed us the flexibility to reinvest [in the rest of the business].

TC: I understand that you’re also starting a paid-for membership-only professional network.

MD: We have an exciting announcement that’ll come out in a few weeks about a new platform that will specifically be a place for young Black professionals to come together to have discussions to learn; to get jobs, because that’s one of our core competencies through [our conference business]; but most importantly, to have discussions around the issues and topics that are trending and that matter. We already do daily conversations through Facebook Live and YouTube and Instagram Live. So we’re trying to build a place where we can have a more private space for those conversations that feels safe and also is a place where people can connect on a deeper level.

TC: Have you noticed a real change in Silicon Valley in the last month or so among investors? Are you seeing interest from firms that previously hadn’t reached out to you?

MD: There are a lot of VCs that perhaps are paying attention, but the bias is so deep that I don’t even think they know how to get out. It.

Have I seen more requests for conversations? Yes. Do I think that that’s going to result in more investments and wires and checks? No. I’m very skeptical of this kind of like performative ‘we care’ flag. The most important metric of success for VCs are returns on their investments. [Venture money] is not a donation; it’s not charity. [VCs look for companies that] meet the metrics of success. And my metrics may be different because I’ve been chronically underfunded despite how much we’ve done.

TC: Can you elaborate?

I think the argument that [later-stage] investors make is, ‘Well, there are just not that many Series A Series B companies to invest in. [But] there are enough companies to invest in, that have your revenue criteria and your goal criteria in terms of a potential exit, but that may not call themselves startups. They may look different. And so you need to do more work to go get them.

There are certainly a lot more people raising funds and having really success in terms of raising their first fund, or that are now on their second fund as a result of this [focus on diversity] and that’s very encouraging and that’s really going to help the seed- and early-stage founders.

I wish I was a founder right now who was raising a seed [round], because I could raise $10 million, there’s so much money going around.

TC: It’s incredible that you could be at a disadvantage because you’re now running a real business with multiple properties, particularly given that you seem to have a huge opportunity ahead of you. As you’ve mentioned in the past, there will be a majority minority population in this country in 10 years or so. Are you developing products for other communities, including the Afro-Latino community?

MD: We’ve thought a lot about the sub communities that have huge audiences, are growing quickly, but perhaps don’t have a space or a place to connect. And originally, one of our ideas was to build out our tech platform, then change the UI to accommodate all these [ideas] and become a true house with brands that serve people and communities on a niche level — so Gen Z, Black, LGBT,  Afro Latina, for the many Caribbean folks who are in the U.S. and Nigerian Americans; there are so many sub communities within the diaspora.

What we realized is that the overhead and operations of doing that over and over would not be a good idea and that we should figure out how to a build the operations side instead. That’s why we invested in our own ad network, because we can say, ‘Hey, creator in Brooklyn who’s amazing, you have a million monthly unique visitors, which is better than half the publications out there. You don’t have ad sales team. Let’s partner with each other.’ That was the first solution.

The second is this social networking platform that we’ve built. Part of the frustration and tension I felt when I started the company was feeling like there was no one like me. I couldn’t find other Black women who wanted to build a huge company and change the world and do it through tech. There was no one walking around Mountain View who looked like that, and I didn’t know where to go. We want to solve that through technology and through a platform that makes it easy for people to find each other. Hopefully then, once people are more connected, they can build their own companies and come up with their own organizations.

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Samsung will reveal the next Galaxy Note on August 5

By Brian Heater

Samsung’s next big Unpacked event is scheduled for August 5. As is the trend these days, the unveiling will be online-only, following in the footsteps of big virtual events from the likes of. Microsoft and Apple. It’s Samsung’s first crack at the format. The company just made it under the pre-COVID-19 shutdown wire back in February for the Galaxy S20 launch.

The headliner of next month’s event will no doubt be the next version of Samsung’s popular phablet line. The Galaxy Note S20 has leaked online a fair bit already, because Samsung. The most notable occasion was the beginning of the month, when the company’s Russia site briefly posted a copper colored version of the Note 20 Ultra.

The premium version of the handset sports a folded zoom lens, much like the Galaxy S20 Ultra. Additional leaks appear to confirm some minor changes to the handsets design, including the swapping of some buttons and moving the S-Pen slot to the left of the charging port. Other details will almost certainly leak out between now and August 5, because that’s just how these things go. There will likely be a slew of other devices on the docket for the event, as well. Samsung likes to pack a lot into Unpacked, after all. 

Notably, Samsung also announced that it will be holding its own virtual event in the early September timeframe. The company had initially planned to attend IFA, but ultimately — and understandably — thought better of it. The August 5 event, meanwhile, kicks off at 10AM ET/7 AM PT. 

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