Sonos revealed during its quarterly earnings report that it has acquired voice assistant startup Snips in a $37 million cash deal, Variety reported on Wednesday. Snips, which had been developing dedicated smart device assistants that can operate primarily locally, instead of relying on consistently round-tripping voice data to the cloud, could help Sonos set up a voice control option for its customers that has “privacy in mind” and is focused more narrowly on music control than on being a general-purpose smart assistant.
Sonos has worked with both Amazon and Google and their voice assistants, providing support for either on their more recent products, including the Sonos Beam and Sonos One smart speakers. Both of these require an active cloud connection to work, however, and have received scrutiny from consumers and consumer protection groups recently for how they handle the data they collect form users. They’ve introduced additional controls to help users navigate their own data sharing, but Sonos CEO Patrick Spence noted that one of the things the company can do in building its own voice features is developing them “with privacy in mind” in an interview with Variety.
Notably, Sonos has introduced a version of its Sonos One that leave out the microphone hardware altogether – the Sonos One SL introduced earlier this fall. The fact that they saw opportunity in a mic-less second version of the Sonos One suggests it’s likely there are a decent number of customers who like the option of a product that’s not round-tripping any information with a remote server. Spence also seemed quick to point out that Sonos wouldn’t seek to compete with its voice assistant partners, however, since anything they build will be focused much more specifically on music.
You can imagine how local machine learning would be able to handle commands like skipping, pausing playback and adjusting volume (and maybe even more advanced feature like playing back a saved playlist), without having to connect to any kind of cloud service. It seems like what Spence envisions is something like that which can provide basic controls, while still allowing the option for a customer to enable one of the more full-featured voice assistants depending on their preference.
Meanwhile, partnerships continue to prove lucrative for Sonos: Its team-up with Ikea resulted in 30,000 speakers sold on launch day, the company also shared alongside its earnings. That’s a lot to move in one day, especially in this category.
Africa-focused fintech startup OPay has raised a $120 million Series B round backed by Chinese investors.
Located in Lagos and founded by consumer internet company Opera, OPay will use the funds to scale in Nigeria and expand its payments product to Kenya, Ghana and South Africa — Opera’s CFO Frode Jacobsen confirmed to TechCrunch.
OPay’s $120 million round comes after the startup raised $50 million in June. It also follows Visa’s $200 million investment in Nigerian fintech company Interswitch and a $40 million raise by Lagos-based payments startup PalmPay — led by China’s Transsion.
There are a couple of quick takeaways. Nigeria has become the epicenter for fintech VC and expansion in Africa. And Chinese investors have made an unmistakable pivot to African tech.
Opera’s activity on the continent represents both trends. The Norway-based, Chinese-owned (majority) company founded OPay in 2018 on the popularity of its internet search engine.
Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.
The company has built a hefty suite of internet-based commercial products in Nigeria around OPay’s financial utility. These include motorcycle ride-hail app ORide, OFood delivery service and OLeads SME marketing and advertising vertical.
“OPay will facilitate the people in Nigeria, Ghana, South Africa, Kenya and other African countries with the best fintech ecosystem. We see ourselves as a key contributor to…helping local businesses…thrive from…digital business models,” Opera CEO and OPay Chairman Yahui Zhou, said in a statement.
Opera CFO Frode Jacobsen shed additional light on how OPay will deploy the $120 million across Opera’s Africa network. OPay looks to capture volume around bill payments and airtime purchases, but not necessarily as priority. “That’s not something you do every day. We want to focus our services on things that have high-frequency usage,” said Jacobsen.
Those include transportation services, food services and other types of daily activities, he explained. Jacobsen also noted OPay will use the $120 million to enter more countries in Africa than those disclosed.
Since its Series A raise, OPay in Nigeria has scaled to 140,000 active agents and $10 million in daily transaction volume, according to company stats.
Beyond standing out as another huge funding round, OPay’s $120 million VC raise has significance for Africa’s tech ecosystem on multiple levels.
It marks 2019 as the year Chinese investors went all in on the continent’s startup scene. OPay, PalmPay and East African trucking logistics company Lori Systems have raised a combined $240 million from 15 different Chinese actors in a span of months.
OPay’s funding and expansion plans are also a harbinger for fierce, cross-border fintech competition in Africa’s digital finance space. Parallel events to watch for include Interswitch’s imminent IPO, e-commerce venture Jumia’s shift to digital finance and WhatsApp’s likely entry in African payments.
The continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population — which makes fintech Africa’s most promising digital sector. But it’s becoming a notably crowded sector, where startup attrition and failure will certainly come into play.
And not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa.
This places OPay and its Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent. That means inevitable competition between Opera and Africa’s largest multi-service internet company, Jumia.
People dramatically proclaim all the time that they don’t think they could survive without their smartphones, but a new series form the forthcoming streaming service Quibi from Jeffrey Katzenberg and Meg Whitman approaches smartphone survival in a much more literal way. The scripted series, which will premiere on Quibi at launch in April 2020, stars Ready Player One‘s Tye Sheridan, and counts Steven Soderbergh as an executive producer.
The series, called ‘Wireless,’ was created by Jack Seidman and Zach Wechter, who are the creators of the short film Pocket, which is shot entirely as though it was taking place on a person’s phone, almost like a screencast of that device. Wireless will similar cinematic, which is a good fit for Quibi’s short-form, made for mobile approach to original streaming content. Wechter and Seidman have a head-start in this regard, in fact, since their film collective Pickpocket is specifically aimed at making this kind of feature.
‘Wireless’ will tell the story of Sheridan’s lead character, who is described as “a self-obsessed college student whose only hope for survival is the tool he has spent his whole life learning to use: his smartphone.” Said character will apparently be trapped inside of his freshly crashed car during the action, and using the smartphone (which is low on battery) to try to survive his predicament.
Quibi has already made a whole host of slate announcements, with new ones coming all the time, but it’s going to have a lot to prove once it actually debuts, into what will be by April a very crowded streaming content market. Apple TV+ and Disney+, two new entrants from heavyweights who aren’t building a name from scratch with consumers, just debuted, and there are more coming early next year from NBC, HBO/AT&T and more.
Tesla gained ground and moved up four spots in in the latest Annual Auto Reliability Survey from Consumer Reports, thanks largely to improvements with the Model 3.
Reliability has improved in the Model 3 and Model S enough that Consumer Reports can now recommend the two models.
Consumer Reports announced Thursday the results of its Annual Auto Reliability Survey, which is based on data collected from the organization’s members about their experiences with more than 400,000 vehicles. The survey covers more than 300 models.
CR does not recommend the Model X. The Model X continues to rank among the least reliable models in the survey.
The reversal is good news for Tesla. In February, Consumer Reports said it could no longer recommend the Model 3 because issues with the paint, trim and body hardware raised reliability questions.
Lexus took the top spot, followed by Mazda, Toyota, Porsche and Genesis. Tesla is still ranked in the bottom third of the survey. It now is ranked 23 out of 30 brands reviewed in the annual survey.
“The Tesla Model 3 struggled last year as the company made frequent design changes and ramped up production to meet demand,” Jake Fisher, senior director of auto testing at CR said in a statement. “But as the production stabilized, we have seen improvements to the reliability of the Model 3 and S that now allow us to recommend both models.”
While Tesla has improved, Fisher said he expects Tesla’s reliability rankings will fluctuate, given its track record to date.
Cadillac came in last place by . Audi, Acura and Volkswagen are among the brands that saw sharp drops, following the introduction of troublesome redesigned vehicles. Volkswagen, which is ranked 27th, dropped nine spots from last year due reliability issues with the Atlas and Tiguan. The Consumer Reports survey noted that the two SUVs had problems with power equipment, in-car electronics and emissions/fuel system.
Dodge posted one of the best improved reliability scores in the annual survey, gaining 13 places to round out the top 10 after years as a lower ranked brand.
Audi also fell seven spots in its ranking. CR said the number of new or redesigned 2019 models that shared similar powertrains and the new infotainment system caused the fall in ranking. The A6 and Q8 had well below average reliability, CR said.
Data privacy has become one of the defining business and cultural issues of our time.
Companies around the world are scrambling to properly protect their customers’ personal information (PI). However, new regulations have actually shifted the definition of the term, making everything more complicated. With the California Consumer Privacy Act (CCPA) taking effect in January 2020, companies have limited time to get a handle on the customer information they have and how they need to care for it. If they don’t, they not only risk being fined, but also loss of brand reputation and consumer trust — which are immeasurable.
California was one of the first states to provide an express right of privacy in its constitution and the first to pass a data breach notification law, so it was not surprising when state lawmakers in June 2018 passed the CCPA, the nation’s first statewide data privacy law. The CCPA isn’t just a state law — it will become the defacto national standard for the foreseeable future, because the sheer numbers of Californians means most businesses in the country will have to comply. The requirements aren’t insignificant. Companies will have to disclose to California customers what data of theirs has been collected, delete it and stop selling it if the customer requests. The fines could easily add up — $7,500 per violation if intentional, $2,500 for those lacking intent and $750 per affected user in civil damages.
It used to be that the meaning of personally identifiable information (PII) from a legal standpoint was clear — data that can distinguish the identity of an individual. By contrast, the standard for mere PI was lower because there was so much more of it; if PI is a galaxy, PII was the solar system. However, CCPA, and the EU’s General Data Protection Regulation GDPR, which went into effect in 2018, have shifted the definition to include additional types of data that were once fairly benign. The CCPA enshrines personal data rights for consumers, a concept that GDPR first brought into play.
The GDPR states: “Personal data should be as broadly interpreted as possible,” which includes all data associated with an individual, which we call “contextual” information. This includes any information that can “directly or indirectly” identify a person, including real names and screen names, identification numbers, birth date, location data, network addresses, device IDs, and even characteristics that describe the “physical, physiological, genetic, mental, commercial, cultural, or social identity of a person.” This conceivably could include any piece of information about a person that isn’t anonymized.
With the CCPA, the United States is playing catch up to the GDPR and similarly expanding the scope of the definition of personal data. Under the CCPA, personal information is “information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.” This includes a host of information that typically don’t raise red flags but which when combined with other data can triangulate to a specific individual like biometric data, browsing history, employment and education data, as well as inferences drawn from any of the relevant information to create a profile “reflecting the consumer’s preferences, characteristics, psychological trends, preferences, predispositions, behavior, attitudes, intelligence, abilities and aptitudes.”
These regulations aren’t checklist rules; they require big changes to technology and processes, and a rethinking of what data is and how it should be treated. Businesses need to understand what rules apply to them and how to manage their data. Information management has become a business imperative, but most companies lack a clear road map to do it properly. Here are some tips companies can follow to ensure they are meeting the letter and the spirit of the new regulations.
Figure out which regulations apply to you
The regulatory landscape is constantly changing with new rules being adopted at a rapid rate. Every organization needs to know which regulations they need to comply with and understand the distinctions between them. Some core aspects CCPA and GDPR share include data subject rights fulfillment and automated deletion. But there will be differences so having a platform that allows you to handle a heterogenous environment at scale is important.
Create a privacy compliance team that works well with others
Pan-African e-commerce startup Jumia released its third-quarter financial results today.
The numbers and presentation reflected some of the same past trends, with a dash of new, and nary a mention of a declining share price.
Jumia — with online goods and service verticals in 14 countries — posted third-quarter revenue growth of 19% (€40 million) and increased its active customer base 56% to 5.5 million from 3.5 million over the same period a year ago.
Jumia’s Gross Merchandise Value (GMV) — the total amount of goods sold over the period — grew by 39% to €275 million. The online retailer nearly doubled its orders from 3.6 million in Q3 2018 to 7 million in Q3 2019.
Jumia also saw growth in its JumiaPay digital finance product, with total payment volume growing 95% to €32 million in Q3 2019 from €16.4 million in Q3 2018.
This is significant, as the company has committed to generate more revenues from digital payment products and offer JumiaPay as a standalone service across Africa.
The overall pattern of growing revenues and customers YoY has been consistent for Jumia.
Jumia pegged a large part of the spike in losses to an increase in fulfillment expenses due to more cross-border goods transactions (with higher shipping costs) on its platform in 3Q 2019.
Jumia introduced some new methodologies and measures for its results. “We believe the most relevant monetization metrics for us are market-based revenue and gross profit,” Jumia Group CFO Antoine Maillet-Mezeray explained on the call.
“We don’t see revenue as a meaningful metric to assess the monetization of our business as it is impacted by shifts in the revenue mix between first party and marketplace,” he said.
If and when Jumia does get into the black, I suspect revenue will shift back as key.
On its path to profitability, Jumia CEO Sacha Poignonnec reaffirmed the company’s commitment to generate more revenue from higher margin (straight through) products, such as JumiaPay and Jumia’s classified business, over cost-intensive (and logistically complicated) online goods sales.
“We are focused on driving the adoption and penetration of Jumia pay within our own ecosystem,” he said — meaning across Jumia’s existing buyer-seller universe.
Since its founding in 2012, the company has been forced to adapt to slower digital payments integration in its core Nigeria and allow cash-on-delivery payments, which are costly and more problematic than digital processing.
Poignonnec highlighted Jumia’s commitment to build a financial services marketplace (and revenues) from consumers and partners using JumiaPay and JumiaLending for products such as loans, third-party credit-scoring and insurance, he explained. This has led to Jumia moving into working-capital services for vendors on its platform.
On the movement of online goods, Jumia highlighted the expansion of its JumiaMall service, which offers brands — such as L’Oreal, Samsung and Unliver — more tailored selling options on its website around shipping, product positioning and consumer data analytics.
Jumia also shared info on product mix and diversification, which showed strong upward trends in digital services, the sale of consumer electronics and beauty products.
Surprisingly absent from Jumia’s earnings call and the subsequent Q&A was any discussion of the company’s share price.
Today’s reporting was slightly more anticipated, given Jumia has faced a short-seller assault, sales scandal and significant market-cap drop since its April IPO on the NYSE.
The online retailer gained investor confidence out of the gate, more than doubling its $14.50 opening share price after the IPO.
That lasted until May, when Jumia’s stock came under attack from short-seller Andrew Left, whose firm Citron Research issued a report accusing the company of fraud. That prompted several securities-related lawsuits against Jumia.
The company’s share price plummeted 43% — from $49 to $26 — the week Left released his short-sell claims.
Then on its second-quarter earnings call in August, Jumia offered greater detail on the fraud perpetrated by some employees and agents of its JForce sales program.
The company declared the matter closed, but Jumia’s stock price plummeted more after the August earnings call (and sales-fraud disclosure), and has lingered in the $6 range for weeks.
That’s 50% below the company’s IPO opening in April and 80% below its high.
Jumia can offer new metrics to evaluate its performance, but the simplest measure — the ability to generate revenues in excess of costs to turn a profit — will still apply.
The sooner Jumia can go in that direction the faster it can revive its share price and investor confidence.
Sila Technologies, the battery materials company that has partnered with BMW and Daimler, landed $45 million in new funding and hired two high-profile executives, including Kurt Kelty, who led the battery cell team at Tesla for more than a decade.
Kelty, who was on Sila Nano’s advisory board, has been appointed vice president of automotive, according to Sina Nanotechnologies. The company also hired Bill Mulligan, the former executive vice president of global operations at SunPower, as its first COO.
Kelty was most recently senior vice president of operations at indoor vertical farming company Plenty . But he was best known for his time at Tesla, where he was a considered a critical link between the automaker and battery cell partner Panasonic.
“As part of Sila Nano’s advisory board, I’ve seen the results of the breakthrough battery chemistry firsthand and I could not pass up the opportunity to take it a step further and lead the company’s automotive partnership efforts,” Kelty said in a statement.
The company said Monday that additional $45 million in investment came from Canada Pension Plan Investment Board, bringing its total funding to $340 million. Earlier this year, Sila Nano secured $170 million in Series E funding led by Daimler AG.
This latest investment and expanded leadership team comes as the company, which is valued at more than $1 billion, aims to bring its first batteries to market.
Sila Nanotechnologies has developed a drop-in silicon-based anode that replaces graphite in lithium-ion batteries without requiring changes to the manufacturing process. The company claims that its materials can improve the energy density of batteries by 20% and has the potential to reach 40% improvement over traditional li-ion.
Here’s what that all means.
A battery contains two electrodes. There’s an anode (negative) on one side and a cathode (positive) on the other. An electrolyte sits in the middle and acts as the courier that moves ions between the electrodes when charging and discharging. Graphite is commonly used as the anode in commercial lithium-ion batteries. However, a silicon anode can store a lot more lithium ions.
The basic premise — and one that others are working on — is this: by replacing graphite in the cell with silicon, there would be more space to add more active material. This would theoretically allow you to increase the energy density—or the amount of energy that can be stored in a battery per its volume—of the cell.
Using silicon also helps reduce costs. In the end, the battery would be cheaper and have more energy packed in the same space.
The company says its innovative approach can be used in consumer electronics like wireless ear buds and smartwatches as well as electric vehicles and even energy storage for the grid.
The company started building the first production lines for its battery materials in 2018. That first line is capable of producing the material to supply the equivalent of 50 megawatts of lithium-ion batteries, Sila Nanotechnologies CEO Gene Berdichevsky, an early employee at Tesla who led the technical development of the automaker’s Roadster battery system, told TechCrunch back in April.
Sila Nanotechnologies said Monday that it will continue to ramp up production volume and plans to supply its first commercial customers in consumer electronics within the next year. The company said it also plans to go to market with battery partner Amperex Technology Limited and automotive partners BMW and Daimler.
Hardware startups are expanding from the world of consumer tech; global hardware accelerator HAX knows this better than most and details the latest trends in its yearly report. One of the most active early-stage hardware investors, the group today released exclusively to TechCrunch its yearly report with insights on hardware startups.
The report highlighted several vital insights: hardware companies are increasingly entering the public market, and more privately-held hardware startups are exceeding a valuation of $1 billion. Of those unicorns, more than 50% are Chinese hardware companies.
Snap today is announcing a new kind of advertising product, Dynamic Ads, that will help it to better attract ad dollars from retail, e-commerce and other direct-to-consumer brands — a group that today thrives on Instagram. With Dynamic Ads, advertisers can now automatically create ads in real time based on extensive product catalogs that may contain hundreds of thousands of products. These ads are then served to Snapchat users based on their interests using a variety of templates provided by Snap.
These templates have been designed for mobile, Snap says, and will help the advertiser save time as they won’t have to manually create their ads. Instead, they just sync their product catalog and allow Snap’s system to build the ad in real time. As product availability or prices change, the ads will also adjust.
The move to better serve advertisers in the retail and direct-to-consumer (DTC) space comes at a time when many DTC brands have been increasingly turning to Snapchat because Instagram has grown too crowded. Advertisers have complained about saturation and higher ad prices there. Snap, meanwhile, targeted this category of advertisers with a growing number of tools. The result, according to some DTC brands were ads that were eight times cheaper than Instagram.
The Dynamic Ads are the latest in a long line of new ad products and tools. Since Snap launched its Ads Manager two years ago, it has rolled out new ad types, integrations, buying types, and more including Snap Pixel, Product Ads, advanced optimization, reach & frequency buying, quick Instant Create ads, Shopify integrations and others aimed at video marketers, like the premium Snap Select program, the non-skip, six-second video Commercials.
More recently, it’s been focused on making ad creation easier. In July, Snap launched an “instant” tool called Instant Create that would help advertisers who were not used to creating ads for the smartphone-friendly vertical format. This ad tool would generate an ad from a brand’s existing assets, like an e-commerce storefront, in just three steps.
The new Dynamic Ads will be even simpler, in a way, as advertisers will be able to build “always-on” campaigns that don’t need constant updating.
That being said, the ads risk being a little more generic. Once these templated ads spread across Snapchat, it may be harder for the products being sold to stand out from others. After all, Instagram DTC ads often succeed because of the creative ad collateral involved, or the storytelling, which goes beyond just showcasing product photos. Instagram also allows brands to connect with a wide variety of influencers to promote the products.
Snap has clearly thought about this issue, though, as its Dynamic Ads can use the same product image across five different template styles.
Snapchat believes it can do well in this space, because it can better deliver the millennial audience. The company claims that 38% of Snapchat users 16 and older can’t be reached on Instagram daily, followed by 49% on Facebook. Snapchat, meanwhile, reaches more than 90% of 13 to 24-year-olds in the U.S. And its user base is highly engaged with the app, which gives advertisers more opportunity to reach them.
“Snapchat has become a go-to destination to reach the largest and most economically influential generations in history, Millennials and Gen Z. Snapchat Dynamic Ads now allow brands to create real-time optimized mobile ads quickly and at scale, with products showcased in visually-appealing templates that feel native to the app,” said Snap’s Kathleen Gambarelli, group product marketing manager, Direct Response, in a statement.
“More than 75% of the 13-34-year-old U.S. population is active on Snapchat, and daily Snapchat users open the app over 20 times each day, offering brands major opportunities to reach the right person with the right message at the right time,” she added.
Interested advertisers will be able to start setting up their campaigns today in an open beta test, and these will begin running in one or two weeks’ time. Dynamic Ads will be available worldwide for all Snapchat advertisers, but campaigns will only reach U.S. users to start. Snap says global markets will begin in the coming months.
If you’ve been to an airport recently, you’ve probably spotted a ton of iconic Away suitcases. The company has built one of the most successful consumer brands in recent years, and it’s just getting started. That’s why I’m excited to announce that Away co-founder and Chief Brand Officer Jen Rubio will join us at TechCrunch Disrupt Berlin.
Away has been around since 2015, long before a ton of direct-to-consumer brands took over Instagram ads. Thanks to this early bet, thoughtful design and amazing branding, Away has managed to sell more than 1 million suitcases.
More recently, the company has started to expand to other travel gear, such as backpacks, weekenders and organizers. Away now even has a handful of brick-and-mortar stores in the U.S. and London.
Jen Rubio has been instrumental to Away’s success. She was the head of social media at Warby Parker when she thought about building Away. And I’m sure she has many tips for the next generation of direct-to-consumer entrepreneurs.
Buy your ticket to Disrupt Berlin to listen to this discussion — and many others. The conference will take place December 11-12.
In addition to panels and fireside chats, like this one, new startups will participate in the Startup Battlefield to compete for the highly coveted Battlefield Cup.
Jen Rubio is the co-founder and Chief Brand Officer of Away, a global lifestyle brand that’s working to transform the entire travel experience. Under her leadership, Away has been named one of Fast Company’s “World’s Most Innovative Companies,” one of TIME’s “50 Most Genius Companies,” one of LinkedIn’s “Top Startups,” and a Forbes “Next Billion Dollar Start-Up.”
Before starting Away, Jen built her career as a branding, creative, and social media expert, redefining how customers and brands connect at companies like Warby Parker and AllSaints. She has been named to Fortune’s 40 Under 40, the Forbes 30 Under 30 list for Marketing and Advertising, Inc.’s 30 under 30 list, and NRF’s People Shaping Retail’s Future list. She lives in New York.
In a move to correct the imbalance of power between technologically sophisticated corporations and the lawmakers who regulate them, presidential candidate Senator Elizabeth Warren is proposing that Congress reinstate the Office of Technology Assessment.
It’s a move that gets deep into the weeds of how policy making in Washington works, but it’s something that Warren sees as essential to leveling the playing field between well-paid corporate lobbyists who are experts in their fields and over-worked, under-staffed congressional members who lack independent analysts to explain highly technical issues.
“Lobbyists are filling in the gaps in congressional resources and expertise by providing Congress information from the perspective of their paying corporate clients. So let’s fix it,” writes Warren.
It’s one of the key planks in Warren’s latest policy proposal and an attempt to tip the scales against corporations and their lobbyists. With the move, Warren clearly has her eye on technology companies and their representatives, who often are the very people congressional lawmakers rely on to explain how rule-making would impact their industries.
“[Members] of Congress aren’t just dependent on corporate lobbyist propaganda because they’re bought and paid for. It’s also because of a successful, decades-long campaign to starve Congress of the resources and expertise needed to independently evaluate complex public policy questions,” Warren writes.
“For every bad faith actor in Congress bought off by the big banks, there are others who are genuinely trying to grapple with the technical aspects of financial reform. But as the issues facing Congress have grown more complex, resources to objectively and independently analyze them have been slashed. Republicans eliminated an independent office of experts dedicated to advising Congress on technical and scientific information,” the Senator says.
The lack of independent analysis stymies congressional oversight in areas from banking and finance reform, to the oversight of technology companies, to the potential to effectively pass laws that will respond to the threat of climate change. Committees that oversee science and technology have seen their staff levels fall by more than 40% in the past decade, according to Warren, and staff salaries have failed to keep up with inflation, meaning that policymakers in Washington can’t compete for the same level of talent that private companies and lobbyists can afford several times over.
Sen. Warren saw this firsthand when she worked at the Consumer Financial Protection Bureau .
“Financial reform was complicated, and the bank lobbyists used a clever technique: They bombarded the members of Congress with complex arguments filled with obscure terms. Whenever a congressman pushed back on an idea, the lobbyists would explain that although the congressman seemed to be making a good point, he didn’t really understand the complex financial system,” she writes. “And keep in mind, the lobbyists would tell the congressman, that if you get this wrong, you will bring down the global economy.”
The inability of lawmakers to understand basic facts about the technologies they’re tasked with regulating was on full display during the Senate hearings into the role technology companies played in the Russian interference in the 2016 election.
Issues from net neutrality to end-to-end encryption, or online advertising to the reduction of carbon emissions, all rely on Congress having a sound understanding of those issues and how regulation may change an industry.
Under the auspices of Warren’s anti-corruption plan, the senator is calling for the reinstatement and modernization of the Congressional Office of Technology Assessment, a significant increase to salaries for congressional staffers and stronger funding for agencies that support congressional lawmaking.
The OTA was created in the seventies to help members of Congress understand science and technology issues that they’d be regulating. Over the tenure of the agency, it created more than 750 reports — including two landmark studies on the impacts of greenhouse gas emissions and global warming in the 1990s, which brought it to the attention of conservative lawmakers, who defunded it in 1995.
At the time, House Speaker Newt Gingrich, said the agency was “used by liberals to cover up political ideology.”
Under Warren’s plan, the OTA would be led by an independent director to avoid partisan manipulation. The newly re-formed agency would have the power to commission its own reports and respond to requests from lawmakers to weigh in on rule-making, help congressional legislators prepare for hearings and write regulatory letters.
Warren also calls for funding to be increased for the other congressional support agencies — the Congressional Research Service, the Congressional Budget Office and the Government Accountability Office. Combined, these agencies have lost half of their staff.
Money for the increased activities of the agencies would come from a tax on “excessive lobbying.” The goal would be “to reverse these cuts and further strengthen support agencies that members of Congress rely on for independent information,” according to the Warren plan.
“These reforms are vital parts of my plan to free our government from the grip of lobbyists – and restore the public’s trust in its government in the process,” Warren writes.
The direct-to-consumer trend in fashion has been one of the most interesting evolutions in e-commerce in the last several years, and today one of the trailblazers in the world of footwear is picking up some money from a list of illustrious backers to bring its concept to the masses.
Atoms, makers of sleek sneakers that are minimalist in style — “We will make only one shoe design a year, but we want to make that really well,” said co-founder Sidra Qasim — but not in substance — carefully crafted with comfort and durability in mind, sizes come in quarter increments and you can buy different measurements for each foot if your feet are among the millions that are not exactly the same size — has raised $8.1 million.
The company plans to use the funding to invest in further development of its shoes, and to expand its retail and marketing presence. To date, the company has been selling directly to consumers in the US via its website — which at one point had a waiting list of nearly 40,000 people — and the idea will be to fold in other experiences including selling in physical spaces in the future.
This Series A speaks to a number of interesting investors flocking to the company.
It is being led by Initialized Capital, the investment firm started by Reddit co-founder Alexis Ohanian and Garry Tan (both had first encountered Atoms and its co-founders, Qasim and CEO Waqas Ali — as mentors when the Pakistani husband and wife team were going through Y-Combinator with their previous high-end shoe startup, Markhor); with other backers including Kleiner Perkins, Dollar Shave Club CEO Michael Dubin, Acumen founder and CEO Jacqueline Novograts, LinkedIn CEO Jeff Weiner, TED curator Chris Anderson, the rapper Chamillionaire and previous backers Aatif Awan and Shrug Capital.
Investors have come to the company by way of being customers. “The thing that I love about Atoms is that it isn’t just a different look, it’s a different feel,” said Ohanian in a statement. “When I put on a pair for the first time, it was a totally unique experience. Atoms are more comfortable by an order of magnitude than any other shoe I’ve tried, and they quickly became the go-to shoe in my rotation whenever I was stepping out. That wouldn’t mean anything if the shoes didn’t look great. Luckily, that’s not a problem, I wear my Atoms all the time and even my fashion designer wife is a fan.”
Even before today’s achievement of closing a Series A, the startup has come a long way on a relative shoestring: with just around $560,000 in seed funding and some of the founders’ own savings, Atoms built a supply chain of companies that would make the materials and shoes that it wanted, and developed a gradual but strong marketing pipeline with influential people in tech, fashion and design. (That success no doubt played a big role in securing the Series A to double down and continue to build the company.)
Within the bigger trend of direct-to-consumer retail — where smaller brands are leveraging advances in e-commerce, social media and wider internet usage to build vertically-integrated businesses that bypass traditional retailers and bigger e-commerce storefronts to source their customers and sales more directly — there has been a secondary trend disrupting the very products that are being sold by using technology and advances in manufacturing. Third Love is another example in this category: the company has built a huge business selling bras and other undergarments to women by completely rethinking how they are sized, and specifically by focusing on creating as wide a range of sizes as possible.
So while companies like Allbirds — which itself is very well capitalised — may look like direct competitors to Atoms, the company currently stands apart from the pack because of its own very distinctive approach to building a mass-market business, but one that aims to make its product as individualised as possible.
You might think that approaching shoe manufacturers with the idea of creating smaller size increments and manufacturing shoes as single items rather than pairs would have been a formidable task, but as it turned out, Atoms seemed to come along at the right place and the right time.
“We thought it would be challenging, and it wasn’t unchallenging, but the good thing was that many manufacturers were already starting to think about this,” Ali said. “Think about it, there has been almost no innovation in shoe making in the last thirty or forty years.” He said they were happy to talk to Atoms because “we were the first and only company looking at shoes this way.” That helped encourage him and Qasim, he added. “We knew we would be able to figure it all out.”
Nevertheless, the pair admit that the upfront costs have been very high (they would not say how high), but given the principle of economies of scale, the more shoes that Atoms sells, the better the economics.
Currently the shoes sell for $179 a pair, which is not cheap and puts them at the high end of the market, so it will be interesting to see how and if price points evolve as it matures as a business, and competitors big and small begin to catch onto the idea of selling their own footwear at a wider range of sizes.
My colleague Josh, who first wrote about Atoms when they launched, is our own in-house tester, and as someone who could have easily moved on to another pair of kicks after he hit publish, he remains a fan:
“My Atoms have held up incredibly well from daily wear for 14 months,” he said. “They’re still my comfiest shoes and make Nikes feel uncomfortable when I try them again. They’ve sustained a tiny bit of wear on the front of the foam sole (the toe just below the fabric) while the bottoms have worn down a little like any shoes.
“The mesh fabric can pick up dirt or dust if you take them in the wilderness, and the sole isn’t hard enough that you won’t feel point rocks. But throwing them in the wash or a rub with a brush and they practically look new. The elastic laces are incredibly convenient.
“I’ve probably tied them 4 times since first lacing them up. And for a cleaner, more professional look you can tuck the bow of your laces behind the tongue. Their biggest problem is they’re porous and can let water through if you wear them in the rain or puddles.
“Overall, I’ve found them to be my best travel shoes because they’re so versatile. I can walk all day in them, but then go to a fancy dinner or nightclub. I can hike or even hit the gym with them if necessary, and they pack quite flat. With the quarter-sizing and different use cases, they make Allbirds look like restrictive outdoor slippers. For adults who still want to wear sneakers, the monochromatic color schemes and brandless, simple styles make Atoms feel as mature and reliable as you can get.”
Ali said that among those who buy one pair, some 85% have returned and purchased more, and that’s before it has even gone outside the US. Qasim said there has been a lot of interest in other regions, but for now it’s still following its original formula of keeping the organisation and business small and tight, with no plans to expand to further countries for the moment.
Mo Gawdat, the former Google and Google X executive, is probably best known for his book Solve for Happy: Engineer Your Path to Joy. He left Google X last year. Quite a bit has been written about the events that led to him leaving Google, including the tragic death of his son. While happiness is still very much at the forefront of what he’s doing, he’s also now thinking about his next startup: T0day.
To talk about T0day, I sat down with the Egypt-born Gawdat at the Digital Frontrunners event in Copenhagen, where he gave one of the keynote presentations. Gawdat is currently based in London. He has adopted a minimalist lifestyle, with no more than a suitcase and a carry-on full of things. Unlike many of the Silicon Valley elite that have recently adopted a kind of performative aestheticism, Gawdat’s commitment to minimalism feels genuine — and it also informs his new startup.
“In my current business, I’m building a startup that is all about reinventing consumerism,” he told me. “The problem with retail and consumerism is it’s never been disrupted. E-commerce, even though we think is a massive revolution, it’s just an evolution and it’s still tiny as a fraction of all we buy. It was built for the Silicon Valley mentality of disruption, if you want, while actually, what you need is cooperation. There are so many successful players out there, so many efficient supply chains. We want the traditional retailers to be successful and continue to make money — even make more money.”
What T0day wants to be is a platform that integrates all of the players in the retail ecosystem. That kind of platform, Gawdat argues, never existed before, “because there was never a platform player.”
That sounds like an efficient marketplace for moving goods, but in Gawdat’s imagination, it is also a way to do good for the planet. Most of the fuel burned today isn’t for moving people, he argues, but goods. A lot of the food we buy goes to waste (together with all of the resources it took to grow and ship it) and single-use plastic remains a scourge.
How does T0day fix that? Gawdat argues that today’s e-commerce is nothing but a digital rendering of the same window shopping people have done for ages. “You have to reimagine what it’s like to consume,” he said.
The reimagined way to consume is essentially just-in-time shipping for food and other consumer goods, based on efficient supply chains that outsmart today’s hub and spoke distribution centers and can deliver anything to you in half an hour. If everything you need to cook a meal arrives 15 minutes before you want to start cooking, you only need to order the items you need at that given time and instead of a plastic container, it could come a paper bag. “If I have the right robotics and the right autonomous movements — not just self-driving cars, because self-driving cars are a bit far away — but the right autonomous movements within the enterprise space of the warehouse, I could literally give it to you with the predictability of five minutes within half an hour,” he explained. “If you get everything you need within half an hour, why would you need to buy seven apples? You would buy three.”
Some companies, including the likes of Uber, are obviously building some of the logistics networks that will enable this kind of immediate drop shipping, but Gawdat doesn’t think Uber is the right company for this. “This is going to sound a little spiritual. There is what you do and there is the intention behind why you do it,” he said. “You can do the exact same thing with a different intention and get a very different result.”
That’s an ambitious project, but Gawdat argues that it can be done without using massive amounts of resources. Indeed, he argues that one of the problems with Google X, and especially big moonshot projects like Loon and self-driving cars, was that they weren’t really resource-constrained. “Some things took longer than they should have,” he said. “But I don’t criticize what they did at all. Take the example of Loon and Facebook. Loon took longer than it should have. In my view, it was basically because of an abundance of resources and sometimes innovation requires a shoestring. That’s my only criticism.”
T0day, which Gawdat hasn’t really talked about publicly in the past, is currently self-funded. A lot of people are advising him to raise money for it. “We’re getting a lot of advice that we shouldn’t self-fund,” he said, but he also believes that the company will need some strategic powerhouses on its side, maybe retailers or companies that have already invested in other components of the overall platform.
T0day’s ambitions are massive, but Gawdat thinks that his team can get the basic elements right, be that the fulfillment center design or the routing algorithms and the optimization engines that power it all. He isn’t ready to talk about those, though. What he does think is that T0day won’t be the interface for these services. It’ll be the back end and allow others to build on top. And because his previous jobs have allowed him to live a comfortable life, he isn’t all that worried about margins either, and would actually be happy if others adopted his idea, thereby reducing waste.