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4 things to remember when adapting AI/ML learning models during a pandemic

By Walter Thompson
Pedro Alves Contributor
Pedro Alves is the founder and CEO of Ople.AI, a software startup that provides an automated machine learning platform to empower business users with predictive analytics.

The machine learning and AI-powered tools being deployed in response to COVID-19 arguably improve certain human activities and provide essential insights needed to make certain personal or professional decisions; however, they also highlight a few pervasive challenges faced by both machines and the humans that create them.

Nevertheless, the progress seen in AI/machine learning leading up to and during the COVID-19 pandemic cannot be ignored. This global economic and public health crisis brings with it a unique opportunity for updates and innovation in modeling, so long as certain underlying principles are followed.

Here are four industry truths (note: this is not an exhaustive list) my colleagues and I have found that matter in any design climate, but especially during a global pandemic climate.

Some success can be attributed to chance, rather than reasoning

When a big group of people is collectively working on a problem, success may become more likely. Looking at historic examples like the 2008 Global Financial Crisis, there were several analysts credited with predicting the crisis. This may seem miraculous to some until you consider that more than 200,000 people were working in Wall Street, each of them making their own predictions. It then becomes less of a miracle and more of a statistically probable outcome. With this many individuals simultaneously working on modeling and predictions, it was highly likely someone would get it right by chance.

Similarly, with COVID-19 there are a lot of people involved, from statistical modelers and data scientists to vaccine specialists, and there is also an overwhelming eagerness to find solutions and concrete data-based answers. Following appropriate statistical rigor, coupled with machine learning and AI, can improve these models and decrease the chances of false predictions that arrive from too many predictions being made.

Automation can help in maintaining productivity if used wisely

During a crisis, time-management is essential. Automation technology can be used not only as part of the crisis solution, but also as a tool for monitoring productivity and contributions of team members working on the solution. For modeling, automation can also greatly improve the speed of results. Every second a piece of software can perform automation for a model, it allows a data scientist (or even a medical scientist) to conduct other more important tasks. User-friendly platforms in the market now give more people, like business analysts, access to predictions from custom machine learning models.

Federal Executions During Covid-19 Put Innocent Lives at Risk

By Emma Grey Ellis
The current wave of executions is increasing the likelihood that lawyers, observers, and correctional staff could be infected.

Outschool, newly profitable, raises a $45M Series B for virtual small group classes

By Natasha Mascarenhas

Outschool, which started in 2015 as a platform for homeschooled students to bolster their extracurricular activities, has dramatically widened its customer base since the coronavirus pandemic began.The platform saw its total addressable market increase dramatically as students went home or campus to abide by COVID regulations instituted by the CDC.

Suddenly, live, small-group online learning classes became a necessity for students. Outschool’s services, which range from engineering lessons through Lego challenges to Spanish teaching by Taylor Swift songs, are now high in demand.

“When the CDC warned that school closures may be required, they talked about ‘internet-based tele-schooling,’” co-founder Amir Nathoo said. “We realized they meant classes over video chat, which is exactly what we offer.”

From August 2019 to August 2020, the online educational class service saw a more than 2,000% increase in bookings. But the surge isn’t just a crop of free users piling atop the platform. Outschool’s sales this year are around $54 million, compared to $6.5 million the year prior. It turned its first profit as a result of the COVID-19 crisis, and is making more than $100 million in annual run rate.

While the profitability and growth could be a signal of the COVID-19 era, today Outschool got a vote of confidence that it isn’t just a pandemic-era boom. Today, Jennifer Carolan of Reach Capital announced at TechCrunch Disrupt that Outschool has raised a $45 million Series B round, bringing its total known capital to $55 million.

The round was led by Lightspeed Venture Partners, with participation from Reach Capital, Union Square Ventures, SV Angel, FundersClub, Y Combinator and others.

The cash gives Outschool the chance to grow its 60-person staff, which started at 25 people this year.

Founder Amir Nathoo was programming computer games from the age of five. So when it came to starting his own company, creating a platform that helped other kids do the same felt right.

In 2015, Nathoo grabbed Mikhail Seregine, who helped build Amazon Mechanical Turk and Google Consumer Surveys, and Nick Grandy, a product manager at Clever, another edtech company and YC alum. The trio drummed up a way to help students access experiences they don’t get in school.

To gauge interest, the company tried in-person classes in the SF Bay area, online content and tested across hundreds of families. Finally, they started working with homeschoolers as an early adopter audience, all to see if people would pay for non-traditional educational experiences.

“Homeschooling was interesting to us because we believed that if some new approach is going to change our education system radically for the better, it was likely that it would start outside the existing system,” Nathoo said.

He added that he observed that the homeschooling community had more flexibility around self-directed extracurricular activities. Plus, those families had a bigger stake in finding live, small-group instruction, to embed in days. The idea landed them a spot in Y Combinator in 2016, and, upon graduation, a $1.4 million seed round led by Collab+Sesame.

“We’d all been on group video calls with work, but we hadn’t seen this format of learning in K12 before,” he said. Outschool began rolling out live, interactive classes in small groups. It took off quickly. Sales grew from $500,000 in 2017 to over $6 million in 2019.

The strategy gave Outschool an opportunity to raise a Series A from Reach Capital, an edtech-focused venture capital fund, in May 2019. They began thinking outwards, past homeschooling families: what if a family with a kid in school wants extra activities, snuck in afterschool, on weekends or on holidays?

Today feels remarkably different for the startup, and edtech more broadly. Nathoo says that 87% of parents who purchase classes on Outschool have kids in school. The growth of Outschool’s total addressable market comes with a new set of challenges and goals.

When the pandemic started, Outschool had 1,000 teachers on its platform. Now, its marketplace hosts 10,000 teachers, all of whom have to get screened.

“That has been a big challenge,” he said. “We aren’t an open marketplace, so we had to rapidly scale our supply and quality team within our organization.” While that back-end work is time-consuming and challenging, the NPS score from students has remained high, Nathoo noted.

Outschool has a number of competitors in the live learning space. Juni Learning, for example, sells live small-group classes on coding and science. The company raised $7.5 million, led by Forerunner Ventures, and has around $10 million in ARR. Note earlier that Outschool is at $100 million in ARR.

“We provide a much broader range of learning options than Juni, which is focused just on coding classes,” Nathoo said. Outschool currently lists more than 50,000 classes on its website.

Varsity Tutors is another Outschool competitor, which is more similar to Outschool. Varsity Tutors sells online tutoring and large-group classes in core subjects such as Math and English. Nathoo says that Outschool’s differentiation remains in its focus of small-group teaching and a variety of topics.

As for what’s ahead for Outschool, Nathoo flirts with the idea of contradiction: what if the platform goes in schools?

“When I think about our strategy going forward, I think of new types of classes, international embedding and embedding ourselves back into school,” he said.

Outschool might use its growing consumer business as an engine to get into school districts, which are notoriously difficult to land deals with due to small budgets. But, to Nathoo, it’s important to get into schools to increase access to learning.

“Our vision is to build a global education community that supplements local school,” he said.

Jennifer Doudna sees CRISPR gene-editing tech as a Swiss Army knife for COVID-19 and beyond

By Devin Coldewey

Jennifer Doudna, one of the pioneers of the gene-editing technique known as CRISPR, thinks the biotech tool could be an essential one for combating COVID-19 and future pandemics. Due to its capacity to be “reprogrammed” like software, CRISPR could eventually be integral to countless tests and treatments.

In an interview at Disrupt 2020, Doudna was all optimism for the technique, which has already proven to be extremely useful in less immediately applicable situations.

“One thing that’s so intriguing about the whole CRISPR technology, it’s a toolbox and there’s many ways to repurpose it for manipulating genomes, but also for detection, even getting virus materials and the kinds of reagents that you need for an effective vaccine,” she explained.

This is all because of CRISPR’s main asset: its ability to home in on incredibly specific sequences or structures and manipulate them. Certainly one way to use that is to snip out a potentially harmful bit of DNA, but that bit could also be amplified for easy detection.

“This is an opportunity to take a technology that naturally is all about detecting viruses — that’s what CRISPR does in [its native environment] bacteria — and re-purposing it to use it as a rapid diagnostic for coronavirus,” Doudna said.

The advantages CRISPR offers are threefold, Doudna explained: first, it’s a “direct” method of detection. Current tests rely on enzymes and proteins that are indirect evidence of infection, which limits their reliability and timing — you can’t, for instance, detect the virus before it starts producing that secondary evidence. CRISPR detects RNA from the viral genome itself.

“We’re finding in the laboratory that that means that you can get a signal faster, and you can also get a signal that is more directly correlated to the level of the virus,” she said.

Second, the sequence that the CRISPR complex searches for can easily be changed. “That means that scientists can reprogram the CRISPR system trivially, to target different sections of the coronavirus to make sure that we’re not missing viruses that have mutated,” Doudna said. “We’re already working on a strategy to co-detect influenza and coronavirus; as you know, it’s really important to be able to do that, but also to pivot very quickly to detect new viruses that are emerging.”

Very long GIF of a CRISPR Cas-9 protein seeking, finding, and snipping out a piece of DNA. Image credits: UC Berkeley

“I don’t think any of us thinks that viral pandemics are going away,” she continued. “The current pandemic is a call to arms; we have to make sure that scientifically we’re ready for the next attack by a new virus.”

And third, a CRISPR-based test wouldn’t be manufactured with the same materials as other tests, making it easier to manufacture alongside them. Managing supply chains effectively will be crucial for getting vaccines, tests and treatments to people as quickly as possible.

The barrier to CRISPR, however, is not theoretical but practical: It’s still more or less lab-bound because therapies using the technology are still very much under review. It is in clinical trials in some forms and COVID-19-related applications could be fast-tracked, but its novelty means it will be slower to reach those who need it. Not to mention the cost.

“This underscores what I think is one of the key challenges that we face in this age of advancing biotechnologies,” said Doudna. “That is, how do we make a technology like CRISPR affordable and accessible to a lot of people? I’d like to see a day when CRISPR is the standard of care for treating a rare genetic disease, and it’s going to take some real R&D to get there.”

Perhaps one of the avenues for advancement will be the newly discovered sibling technique, CRISPR Cas-Φ (that’s a “phi”), which works similarly but is much more compact, owing to its origin as, apparently, a countermeasure by viruses that invade CRISPR-bearing bacteria. “Who knew they carried around their own form of CRISPR?” mused Doudna. “But they do, and it’s a very interesting protein, because it’s very small compared to the original formats for CRISPR that allows a much, much smaller protein to be able to do [this] kind of editing.”

Doudna had much more to say about the possibilities for the technique of which she was one of the chief creators. You can watch the rest of the interview below.

Why hasn’t digital learning lived up to its promise?

By Walter Thompson
Tom Adams Contributor
Tom Adams is the president of Quantic School of Business & Technology.

The fall semester is off to a rocky start. When schools were forced to close in the spring, students (and parents) struggled. As the new school year begins, affluent families are building pandemic pods and inequities abound, while surveys suggest that college students want tuition discounts for online classes.

To avoid a catastrophic loss in revenue, colleges are bringing students back to campus. At UNC-Chapel Hill, those plans were quickly reversed when 130 students tested positive for the virus just a week into the new semester. As cases skyrocket, UNC will not be the only educational institution or school district to move online again.

What is it about digital learning that has schools so keen on reopening despite the health and reputational risks? Why hasn’t digital learning lived up to its promise?

If I were asked 20 years ago, as the founding CEO of Rosetta Stone, what digital learning would look like today, I would have imagined a very different future. Online learning was exploding. Teachers and faculty were experimenting with now commonplace consumer technologies like speech recognition and virtual reality to create immersive learning experiences.

Sadly, most of these innovations never took hold in our schools and colleges, and remote learners today are left with edtech that feels like it is still trapped in the 90s.

Ironically, the business of edtech and digital learning has been booming. Billions of dollars have been invested in tools and platforms that promise to improve the learning outcomes and lives of students. But for all the investments, headlines and flashy IPOs, edtech has little to show in terms of transformative outcomes.

The United States continues to lag behind many other advanced industrialized nations in math, science and reading literacy. Schools at all levels grapple with pervasive equity gaps. And research shows that heavily investing in education technology has, so far, yielded virtually no appreciable improvement in student achievement in these core subjects.

The challenge stems from the fact that rather than making learning better, the education technology field has, for the most part, focused on reaching more students. In our rush to scale, we have largely ignored tremendous pedagogical innovation that has occurred over the last twenty years.

No matter how high-tech a digital learning solution might be, it means nothing if it doesn’t also reflect recent and emerging changes in pedagogy. In 2010, a study at the University of North Texas compared how students retain information literacy skills in a face-to-face class, an online class and a blended class. The researchers found that there was no difference in outcomes between the three kinds of classes. This is because all three used the same materials and pedagogical approach.

But in a digital environment, far more is possible. We can now create video-game quality simulations to evaluate complex skills like creativity or problem-solving. Shy students can take the form of learning avatars in online laboratories — or explore career paths first-hand, through virtual reality. We know more than ever about attention span and engagement, or the connection between socio-emotional development and academic outcomes.

Researchers have, likewise, gained a deeper understanding of the ways students’ minds work. We know more than ever about how students reason, process information and solve problems. We know what kinds of scaffolding is required to develop and master these skills. Learning is best when it is built around doing, and when the context is practical, allowing students to try their hand at solving problems even as they’re still learning. It’s best when it is individualized, with progress based on a student’s personal aptitude and proficiency as they move toward mastering the material. And it’s best when it is enriched with peer-based discussion, practice and collaboration.

Astonishingly, few mass-market digital learning tools are built or adopted with these pedagogical advancements in mind. While Zoom is a fine tool for live conversations in small groups, it has few tools to facilitate the kind of engagement necessary for real learning. Coursera has raised millions for simply replicating the old-fashioned experience of a teacher lecturing at the front of a classroom. Quizlet is but a virtual collection of flashcards; it can assess the learning of certain facts, but it is hardly useful for the acquisition of skills. These types of common digital learning tools are increasingly great at making educators’ jobs easier. They are great at expanding access, allowing teachers and schools to reach more students than ever before. But scale, ease and access are not sufficient to help students learn and build skills.

The frustrations of educators and learners alike reflect the fact that education technology functions as a digital proxy for our oldest methods of teaching. Simply listening to a lecture is not effective in the real world, and yet that largely remains the default mode of education online. The impact of COVID-19 has only exacerbated these long-standing shortcomings. To create the digital learning experience students deserve — to finally fulfill the untapped promise and potential of educational technology — we must create tools that reflect not only advancements in technology, but in what we now understand about how the mind works and how students learn.

Superhuman’s Rahul Vohra asks 6 VCs how to raise funding when the sky is falling

By Walter Thompson
Rahul Vohra Contributor
Rahul Vohra is the founder and CEO of email app Superhuman.

When I wrote about how to run your startup in a downturn, the world was on the brink of recession. The economy contracted sharply — and the effects of the 2020 recession will persist.

If you are a founder, you can help. You can build companies that connect people, create employment and spark lasting change.

“Building is how we reboot the American dream,” declared Marc Andreessen, venture capitalist and co-founder of Andreessen Horowitz. In his rallying cry “It’s Time to Build” he writes: “We need to break the rapidly escalating price curves for housing, education and healthcare, to make sure that every American can realize the dream, and the only way to do that is to build.”

Yet building requires capital. How do you raise funding when the economy is on its knees? I spoke with six top venture capitalists to find out:

  • Bill Trenchard, general partner, First Round Capital
  • Dan Rose, chairman, Coatue Ventures
  • Brianne Kimmel, founder, Work Life
  • Sarah Guo, general partner, Greylock
  • Merci Grace, partner, Lightspeed
  • Charles Hudson, managing partner, Precursor Ventures

How has investment behavior changed during the pandemic?

  • Deal velocity has gone up.
  • The bar for investments is rising.
  • VCs are nurturing existing investments and “proto-founders.”

The recession did not cause activity to stall. In fact, deal velocity has gone up.

“It’s almost like a superheated environment right now,” says Bill Trenchard, general partner at First Round. “The speed with which partnerships can quickly meet with a company that’s of interest is so much higher in the Zoom world. It’s changing our thinking around velocity in the market, which was already very high.”

“We’ve been as active as we were before,” agrees Dan Rose, chairman at Coatue Ventures. “Maybe even slightly more active because I think more good companies are raising as kind of an insurance policy. When it became clear that we weren’t going to be able to meet with founders in person anymore, we snapped to Zoom.”

Velocity may be rising, but investors now require more data to reach conviction.

“The pricing is still the same but we see risk going up,” says Bill Trenchard. “You need to be very rigorous on your investment theses and how you’re looking at companies. We’ve been looking for more grapple hooks and more data for things that we do invest in, so that we have more conviction when we do.”

“There’s been almost an immediate shift in terms of expectations from VCs,” says Brianne Kimmel, founder of early stage venture firm Work Life. “Companies have been forced to come in with more richness and customer development, a clear path to revenue, a lot more of a strategic approach around the core mechanics of the business and more specifically the business model.”

Sarah Guo, general partner at Greylock, also has high expectations for founders.

Europe will go it alone on digital tax reform in 2021 if it must, says EU president, as bloc directs €150BN in COVID-19 relief toward cloud, AI and broadband

By Natasha Lomas

Europe will propose its own digital tax early next year if there’s no agreement at a global level on how to update taxation rules for the Internet age, EU president Ursula von der Leyen said today, reiterating the bloc’s determination not to let tax reform slide in a ‘state of the union’ speech to the European Parliament.

“We will spare no effort to reach agreement in the framework of OECD and G20. But let there be no doubt: should an agreement fall short of a fair tax system that provides long-term sustainable revenues, Europe will come forward with a proposal early next year,” she told MEPs.

In the wide-ranging speech — which also called for the 2020s to be Europe’s “digital decade” — von der Leyen committed the bloc to spending a fifth (€150BN) of the €750BN coronavirus support fund announced earlier this year on digital investments.

“There has never been a better time to invest in European tech companies with new digital hubs growing everywhere from Sofia to Lisbon to Katowice,” she said. “We have the people, the ideas and the strength as a Union to succeed. And this is why we will invest 20% of NextGenerationEU on digital.”

“We are reaching the limits of the things we can do in an analogue way. And this great acceleration is just beginning. We must make this Europe’s Digital Decade,” von der Leyen added.

“We need a common plan for digital Europe with clearly defined goals for 2030, such as for connectivity, skills and digital public services. And we need to follow clear principles: the right to privacy and connectivity, freedom of speech, free flow of data and cybersecurity.

“But Europe must now lead the way on digital – or it will have to follow the way of others, who are setting these standards for us. This is why we must move fast.”

Beneath the rousing ‘digital sovereignty’ rhetoric, the speech didn’t offer much new on the tech policy front — but the EU president confirmed that updates to Europe’s competition rules and regulation on the use of AI are coming next year.

The Commission is currently consulting on whether a new competition tool is needed to respond to digital network effects that can lead to tipping markets, as well as more widely around a forthcoming Digital Services Act (which didn’t get any direct mentions in the speech).

“On personalized data — business to consumer — Europe has been too slow and is now dependent on others,” she said. “This cannot happen with industrial data. And here the good news is that Europe is in the lead — we have the technology, and crucially we have the industry.”

“We presented our new industry strategy in March to ensure industry could lead the twin green and digital transition. The last six months have only accelerated that transformation — at a time when the global competitive landscape is fundamentally changing. This is why we will update our industry strategy in the first half of next year and adapt our competition framework which should also keep pace,” she said.

Tech investment priorities

Priorities for digital investment she highlighted are the plan to build a European cloud — which will be based on the GaiaX federated data infrastructure that’s developing common requirements for pan-EU data sharing. (This is part of a major Commission push around industrial data reuse, announced earlier this year.)

The second area of investment focus named was artificial intelligence — with the EU president citing the tech’s potential to deliver innovations such as “precision farming in agriculture, more accurate medical diagnosis and safe autonomous driving”. However she also emphasized the importance of having rules in place to wrap around the tech, reiterating EU lawmakers’ conviction that a framework is needed to ensure what they dub ‘human-centric’ AI.

Earlier this year the EU put out a white paper — setting out proposals for regulating ‘high risk’ applications of artificial intelligence. Though the final shape of the proposal will have to wait for 2021.

von der Leyen also suggested lawmakers are looking for ways to give consumers more control over how their data is used in the big data-powered AI era.

“We want a set of rules that puts people at the centre. Algorithms must not be a black box and there must be clear rules if something goes wrong. The Commission will propose a law to this effect next year,” she said today.

“This includes control over our personal data which [we] still have far too rarely today. Every time an App or website asks us to create a new digital identity or to easily log on via a big platform, we have no idea what happens to our data in reality.”

To this end, she said the Commission wants to develop “a secure European e-identity” that EU citizens could use anywhere in the bloc — “to do anything from paying your taxes to renting a bicycle”. It would be “a technology where we can control ourselves what data and how data is used”, she added, riffing on her digital sovereignty theme.

The Commission is reviewing existing regulations around eID, including running a consultation that’s due to end next month — where it says it’s looking at barriers to uptake of eID and trusted services, and considering how to evolve the framework towards an “EU digital identity”.

It now sounds like lawmakers have concrete plans to overhaul eID — with the aim of promoting a proprietary digital authentication mechanism that can help drive the wider strategy around digitization and data reuse.

The third focus for ‘COVID-19 relief’ digital spending is infrastructure, with a push planned around broadband access.

“The investment boost through NextGenerationEU is a unique chance to drive [broadband] expansion to every village. This is why we want to focus our investments on secure connectivity, on the expansion of 5G, 6G and fiber,” said von der Leyen, adding: “NextGenerationEU is also a unique opportunity to develop a more coherent European approach to connectivity and digital infrastructure deployment.”

Her speech also highlighted a planned €8BN investment in developing next-gen supercomputers. And reiterated calls for European industry to develop its own next-generation chips — “that will allow us to use the increasing data volumes energy-efficient and securely”.

“None of this is an end in itself — it is about Europe’s digital sovereignty, on a small and large scale,” she added.

Green Deal

von der Leyen also spend a fair amount of time on the environment and the risks attached to climate change.

The European Green Deal is set to account for a larger chunk of COVID-19 relief spending than digital projects — although there could, presumably, be some overlap, with von der Leyen talking about “a world where we use digital technologies to build a healthier, greener society”.

She said 37% (€277BN) of the NextGenerationEU fund to be spent directly on Green Deal objectives.

This spending looks set to give a major boost to electric cars via investment in charging infrastructure. Other areas of focus she mentioned are hydrogen replacing coal for industrial production; and adapting the construction industry to make it more sustainable and less polluting, including by the use of AI and smart technologies.

“NextGenerationEU should invest in lighthouse European projects with the biggest impact: hydrogen, renovation and 1 million electric charging points,” she said. “I want NextGenerationEU to create new European Hydrogen Valleys to modernise our industries, power our vehicles and bring new life to rural areas.”

“Our buildings generate 40% of our emissions. They need to become less wasteful, less expensive and more sustainable,” she added. “And we know that the construction sector can even be turned from a carbon source into a carbon sink, if organic building materials like wood and smart technologies like AI are applied.”

The systemic change needed to support a wholesale shift to a circular economy was dubbed”a new cultural project for Europe”.

“Every movement has its own look and feel. And we need to give our systemic change its own distinct aesthetic – to match style with sustainability,” she said, announcing a plan to set up “a new European Bauhaus” — aka “a co-creation space where architects, artists, students, engineers, designers work together to make that happen”.

Dropbox CEO Drew Houston says the pandemic forced the company to reevaluate what work means

By Ron Miller

Dropbox CEO and co-founder Drew Houston, appearing at TechCrunch Disrupt today, said that COVID has accelerated a shift to distributed work that we have been talking about for some time, and these new ways of working will not simply go away when the pandemic is over.

“When you think more broadly about the effects of the shift to distributed work, it will be felt well beyond when we go back to the office. So we’ve gone through a one-way door. This is maybe one of the biggest changes to knowledge work since that term was invented in 1959,” Houston told TechCrunch Editor-In-Chief Matthew Panzarino.

That change has prompted Dropbox to completely rethink the product set over the last six months, as the company has watched the way people work change in such a dramatic way. He said even though Dropbox is a cloud service, no SaaS tool in his view was purpose-built for this new way of working and we have to reevaluate what work means in this new context.

“Back in March we started thinking about this, and how [the rapid shift to distributed work] just kind of happened. It wasn’t really designed. What if you did design it? How would you design this experience to be really great? And so starting in March we reoriented our whole product road map around distributed work,” he said.

He also broadly hinted that the fruits of that redesign are coming down the pike. “We’ll have a lot more to share about our upcoming launches in the future,” he said.

Houston said that his company has adjusted well to working from home, but when they had to shut down the office, he was in the same boat as every other CEO when it came to running his company during a pandemic. Nobody had a blueprint on what to do.

“When it first happened, I mean there’s no playbook for running a company during a global pandemic so you have to start with making sure you’re taking care of your customers, taking care of your employees, I mean there’s so many people whose lives have been turned upside down in so many ways,” he said.

But as he checked in on the customers, he saw them asking for new workflows and ways of working, and he recognized there could be an opportunity to design tools to meet these needs.

“I mean this transition was about as abrupt and dramatic and unplanned as you can possibly imagine, and being able to kind of shape it and be intentional is a huge opportunity,” Houston said.

Houston debuted Dropbox in 2008 at the precursor to TechCrunch Disrupt, then called the TechCrunch 50. He mentioned that the Wi-Fi went out during his demo, proving the hazards of live demos, but offered words of encouragement to this week’s TechCrunch Disrupt Battlefield participants.

Although his is a public company on a $1.8 billion run rate, he went through all the stages of a startup, getting funding and eventually going public, and even today as a mature public company, Dropbox is still evolving and changing as it adapts to changing requirements in the marketplace.

Replace legacy healthcare staffing with a vertical marketplace for workers

By Walter Thompson
Jeff Fluhr Contributor
Jeff Fluhr is a general partner at Craft Ventures, the founder and former CEO of StubHub and is an expert on building marketplace companies.

Over the last several months, we’ve seen dramatic swings in the demand for healthcare across the country. While hospitals in some cities were overwhelmed by an influx of COVID-19 patients, others sat empty — and in many cases experienced financial distress — as patients postponed elective surgeries and care for non-life-threatening matters. Cities went from relative safe zones to dangerous hotspots and back again within a matter of a few months.

This “COVID-19 whipsaw” has brought into focus a problem that has long been simmering in healthcare: The movement of labor is highly inefficient. We need a new paradigm in healthcare labor markets.

The pandemic has exposed systemic vulnerabilities

Early in the pandemic, many clinicians moved across state lines to answer Governor Andrew Cuomo’s calls for help in New York, only to be told upon arrival that their contracts had been canceled because the hospitals had overestimated their need. The imbalance of nurse and physician labor across states, which existed well before the pandemic, reached a terrifying apex during the height of the pandemic. In some parts of the country, clinicians were being furloughed or laid off, while in others they were stretched to their full capacity working around the clock to save lives. With each month came new hotspots — New York, Detroit, Miami, Phoenix, Los Angeles — and with each new hotspot a near disaster caused by a shortage of healthcare workers.

The marathon of addressing COVID-19 has imposed severe stress, depression and anxiety on our nation as a whole, with our healthcare providers at the epicenter. Clinician burnout was a serious issue even before COVID-19, but it has only gotten worse in recent months, especially for those working in geographic hotspots.

Healthcare workers across the country have found themselves delivering care for a high volume of acutely ill patients, often with severely limited supplies of personal protective equipment (PPE), magnifying their own risk. Many have watched colleagues fall sick and even die, while others have been asked to ration patient care. Multiple studies have highlighted increased instances of depression, anxiety, insomnia and psychological distress amongst frontline workers, and some clinicians have even taken their own lives.

Challenges with the legacy staffing model

Prior to the pandemic, our healthcare system had long dealt with seasonal and geographic differences in healthcare demand. Flu season, for example, causes more demand for healthcare in December than July. Florida experiences more demand for care in February than June because snowbirds migrate from the northeast in the winter and bring their healthcare needs with them.

In the past, temporary or contingent workers — travel nurses, per diem nurses and locum tenens doctors — helped to balance supply of labor with the seasonal and geographic peaks and troughs in demand. Staffing agencies worked with these temporary clinicians to match them with opportunities at hospitals, ambulatory surgical centers, long-term care facilities and other providers. Many people don’t realize that temporary clinicians are an important part of the healthcare workforce. Estimates are that supplemental staffing accounts for more than 30% of total nursing hours in the U.S.

Staffing agencies, however, cannot scale for pandemic scale events because they are using outdated tools and processes. Recruiters at staffing agencies make phone calls and send emails to communicate with the clinicians who are frequently annoyed by inconvenient and unwanted solicitations. More importantly, these tools are not fast enough when we experience sudden unpredicted spikes in different geographic areas like those in the past six months.

Outdated regulations are partly to blame. Licensure for nurses is handled state-by-state, which creates obstacles that prohibit nurses from working in states where they are not licensed. There are approximately 35 states that are part of a licensing compact that offers mutual recognition, but many of the largest states and those hit hardest by the early days of the pandemic — like California, New York and Washington — are not part of the compact. In California, it takes six weeks on average to get a license for an out-of-state nurse, a number that has not budged even as the state’s COVID-19 cases have skyrocketed.

Some states that are not part of the compact have used executive actions or emergency declarations to allow nurses to cross state lines, but many of those are now expiring and were never meant to be a long-term solution. The pandemic has highlighted the need for new regulations as part of the solution described below that allow for a more fluid movement of clinicians across state lines. Are patients and diseases in California really that different from the patients and diseases in Texas such that we need different regulatory standards and license requirements in each state?

The solution: A vertical marketplace for healthcare workers

We need to move beyond the antiquated staffing agency model to facilitate a more rapid response, a better clinician experience and more efficient matching. The good news is that we are starting to see companies addressing this problem with a software-centric model: the vertical labor marketplace. Some examples of these marketplaces include Trusted Health and Nomad Health.

Like StubHub, the company I started 20 years ago, these marketplaces use the power of the internet to connect supply with demand. In the case of these healthcare labor marketplaces, the clinicians make up the supply while the hospitals and other care facilities make up the demand. Rather than scouring the job boards for individual hospitals or fielding calls from recruiters, clinicians can see all available positions that meet their skills and experience, along with compensation and other job details. They can check the marketplace when it is convenient without getting inundated by phone calls or emails.

Clinicians can use the marketplaces to come in and out of the labor pool as they wish. This helps to reduce stress and increase work-life balance before burnout sets in. Some nurses might choose to leverage the marketplace to move to Florida in the winter to serve the snowbirds while others may choose to take the summer off and work during flu season. The marketplace also creates financial opportunities for underutilized clinicians by better allocating their labor to geographies and hospitals that need them. Hospitals and other providers benefit from these simple-to-use cloud-based marketplaces that allow them to quickly ramp up capacity when they need it most.

The system needs more contingent workers

In the staffing agency paradigm, when an independent hospital experiences a spike in demand it must work with a staffing agency to bring in temporary clinicians quickly. A multihospital health system has the advantage of being able to move clinicians from lower demand hospitals to a sister-hospital that is experiencing an unexpected peak. A widely adopted national marketplace would theoretically have an even greater advantage because its broader visibility across more hospitals would allow it to move resources from hospitals with excess capacity to those with the highest demand, even if the two hospitals are unaffiliated.

There have been heroic doctors and nurses who have volunteered to move to areas with the highest demand. However, hospitals and health systems are not incentivized to lend out their doctors and nurses to nonaffiliated hospitals. Therefore, the solution requires more clinicians to be in the contingent workforce (like travel and per diem nurses). If the mix between contingent nurses and permanent nurses were 70/30 instead of 30/70, peaks and troughs would be more easily handled since a larger percentage of the resources would be shared across a larger network of hospitals. The marketplaces would have an even greater impact on our society because they would be able to allocate even more resources to the hospitals with the most acute needs.

There are two possible sources of additional contingent workers. First, permanent healthcare workers may decide to terminate their affiliation with a single hospital or health system in favor of contingent work because they are attracted to the flexibility. Second, workers in other industries may choose to enter the healthcare industry because it provides more options for contingent work. Regardless of the path, an expansion of the supply of contingent healthcare workers is a necessary part of the solution.

A side benefit: Stronger financial health for our hospitals

During the pandemic, patients across the country chose to postpone many elective surgeries and non-life-threatening procedures because they were scared of contracting the virus at the hospital. As a result, hospitals lost revenue from profitable elective procedures. Because hospitals have huge fixed costs (salaries are a big component), the government has provided tens of billions of stimulus money for hospitals in financial distress.

In addition to all the other benefits described above, a more widely adopted vertical labor marketplace for healthcare workers would provide relief to hospitals by shifting a larger portion of clinician labor from a fixed cost to a variable cost. Hospitals would have a smaller number of permanent employees and a larger number of temporary contingent workers. When demand drops, hospitals would use fewer contingent clinicians. When demand rises, they could tap into the marketplace to bring on more capacity.

A marketplace approach to America’s healthcare and its clinicians is long overdue. While the pandemic magnified our current system’s vulnerabilities, they have been there all along. By leveraging the technology and marketplace paradigm that has made so many other industries efficient, we can improve not only our healthcare system and clinician quality of life, but also our hospitals’ bottom line. Let’s galvanize the collective distress COVID-19 has created and use it to pioneer a more efficient model for all.

* Craft is an investor in Trusted.

If you care about remote employees, start tracking their performance

By Walter Thompson
Alex Circei Contributor
Alex Circei is CEO and co-founder of Waydev, a Git analytics tool that measures engineers' performance automatically.

Remote work has been thrust upon us, but are business leaders ready for it?

More than half of U.S. companies now plan on making working from home a permanent option. However, most of us still don’t know what an optimal business machine with remote operations looks like simply because reaching that point requires years of trying, testing and adapting.

One major thing we haven’t all realized yet is that, without the visibility of face-to-face contact, data is essential in tracking employee progress and well-being, as well as the company’s overall health.

And not just any data — granular (ideally automatic) data is needed to give us accurate insights and stop us from making burdensome mistakes, especially in tech companies where even more of the work effort is purely digital. Take productivity. If we were to focus on people’s work hours alone, we’d likely get the wrong picture. Half of software developers have been working more during quarantine. But what does this tell us about the toll this workload is taking on their mental health? Or the quality of their work, and how much extra time is going toward bringing their tasks up to scratch? Nothing at all.

Putting data at the core of project management is not about Big Brother; far from it. Data isn’t inherently good or bad; it just gives you the tools to implement intelligent strategies and reduce errors. If anything, it will minimize the number of times you have to interfere with employees to ask for updates and micromanage.

Embracing data to create your new remote-ready project management strategy will enhance you and your team’s work lives in the following ways.

Reduce wrong decisions

Managers don’t have accurate visibility into remote employees’ productivity. Radio “silence” from team members can be misinterpreted to mean they’re not working enough, especially independent workers like software engineers. You might think you wouldn’t notice if they spent half their work hours on a coffee break, and your mind can run away with you. (The opposite — for those who talk too much — is also true).

However, a digital lifestyle produces digital indicators. Data-driven project management tools such as Wrike can tell you about employee output, but also about iterations and quality indicators on the same task. Such as how many times a pull request went back to a developer, why (due to error or for minor improvements?), or how many other employees stepped in to help before the final product was achieved.

Facebook announces $4.3 million grant for small businesses in India, introduces support for gift cards

By Manish Singh

More than a third of small and medium-sized businesses on Facebook in India expect cash flow to be a challenge for them as they navigate through the coronavirus pandemic in the next few months, according to a report by Organisation for Economic Co-operation and Development (OECD) and the World Bank.

Facebook, which reaches nearly every internet users in India and which collaborated with OECD and World Bank for the report, wants to help. The social giant today announced a grant of $4.3 million for more than 3,000 small businesses across Delhi, Gurgaon, Mumbai, Hyderabad, and Bangalore (Indian cities where the company has its offices).

In an interview with TechCrunch, Ajit Mohan, head of Facebook India, said the grant includes both cash and ad credits, with cash constituting the larger share. These businesses don’t have to advertise on Facebook to be eligible for the grant, he said.

The India grant is part of the company’s $100 million global grant for small businesses that it announced in March.

Gift Cards on Facebook and Instagram

Additionally, Facebook and Instagram have also launched capabilities for businesses in India to sell gift cards. “During the pandemic, it’s been inspiring to see how people and businesses have come together on the Facebook family of apps to support their local communities,” said Mohan. (Mohan will be appearing at Disrupt 2020 conference Wednesday.)

These gift cards, which will be issued by startups Quiksilver and PayU, are designed to help businesses get the immediate cash flow to stay afloat. Users can redeem these gift cards at these businesses later on.

The announcement today comes as Facebook begins to engage deeply with small businesses in the country. The company invested $5.7 billion in Jio Platforms earlier this year and said it would work with the Indian giant to explore ways to serve the nation’s 60 million businesses.

“The recovery of small businesses from the pandemic will be critical to the recovery of Indian economy, and we want to do everything we can to help. Today we’re building on our commitment by announcing the small business grant for India,” said Mohan.

Businesses can apply for the grant starting today.

More to follow…

Carbon Health and Color founders see power in bringing healthcare to the edge

By Kirsten Korosec

When COVID-19 spread to the United States, the pandemic exposed two conflicting realities: a healthcare system that excels at high-cost, complex treatments while failing to provide sufficient access at the local level.

That lack of access to public health infrastructure might be the country’s biggest challenge. It has also created opportunities for healthcare startups, founders of Carbon Health and Color said Monday during TechCrunch Disrupt 2020, which kicked off today.

“When we think about making healthcare accessible, we tend to focus on the cost of care, which is definitely a big problem,” Othman Laraki, founder and CEO of Color, said during the Disrupt panel “Tech, test and treat: Healthcare startups in the COVID-19 era.” The other big side of making healthcare accessible is actually taking it to people where it’s part of their lives. I think oftentimes for underprivileged communities, etc. that sometimes the cost of care is a lesser problem compared to the access of it.”

Primary care startup Carbon Health and Color are already tackling that issue. And in Carbon Health’s case, the company’s business model to bring high-quality primary care to the local level gave it early insight into the spread of COVID.

Carbon Health has 25 primary care locations today. Co-founder and CEO Eren Bali noted that as early as February, the company started seeing patients coming to its clinics directly from Wuhan, China with COVID-like symptoms.

Carbon Health’s technology platform asks patients questions prior to their visit, which collects important data and assesses patients’ symptoms and problems ahead of time. Those early insights left Carbon Health with two options: shut down and wait for the COVID storm to pass or jump all in. Carbon Health chose the latter, Bali said.

Laraki and Bali’s comments Monday during TechCrunch Disrupt match up with their respective business models and growth trajectory. COVID has merely accelerated that development.

Earlier this week, Carbon Health launched a new pop-up clinic model. These clinics are now open in Brooklyn, Manhattan, Los Angeles, San Francisco and Seattle. The company is adding more in the coming weeks, including a clinic in Detroit. Ultimately, 100 new COVID-19 testing sites will be added with a collective capacity to handle 100,000 patients per month across the country. Color is collaborating with Carbon Health at its clinics in San Francisco.

Meanwhile, as the pandemic swept into the U.S., Color built a platform to help ease the logistical and supply chain constraints around COVID testing. The company, which runs a large, automated testing lab in the Bay Area, is now processing 75% of the testing in the city.

Today, there are still limits to that hyperlocal level of healthcare. For instance, someone who needs surgery must go to a hospital, which might be hours away.

“It’s not that easy to push that to the edge,” Lariki said, using the surgery example. “But I think what’s happening now — and I think what’s going to happen in the next 10 years — is that we’re going to have really, truly edge-distributed healthcare.”

The idea is that technology will allow healthcare to be taken into communities in a more cost effective model, which will make it more accessible. “That’s something that really hasn’t existed in the U.S. so far and I think it is really starting to happen and it is fundamentally a technology problem,” Lariki added.

Unicorn layoffs prompt more startups to consider acqui-hiring

By Natasha Mascarenhas

Alex Zajaczkowski was just months into her role at Toast, a restaurant point-of-sale software company, when she was let go during COVID-19 layoffs. Toast, last valued at $5 billion, cut 50% of its staff through layoffs and furloughs.

Zajaczkowski said she started applying for jobs within a week.

“I think I got on the boat a little bit quicker than others because I wanted that security a little bit faster,” she said. She and former Toast colleagues formed a Slack to communicate about layoffs, their job searches and what lay ahead. Toast created an opt-in spreadsheet for recruiters that listed laid-off employees.

The sheet brought Zajaczkowski to Stavvy, an online mortgage startup also based in Boston, for an interview. Today, a majority of Stavvy’s team are ex-Toasters, including Zajaczkowski.

“I think one of the benefits of recruiting from an organization that is sort of an iconic Boston company, is that you know what the hiring practices are,” Ligris said. “There’s been a level of vetting that has occurred.”

Stavvy’s onboarding of former Toast employees suggests that the layoffs which rocked startups in March could be an opportunity for smaller startups to scoop up star talent that already has chemistry. While acqui-hiring is not a new concept, it has new weight in an environment reeling from mass layoffs and a shift to remote-first work.

Stavvy co-founders Kosta Ligris and Josh Feinblum, though, say hiring a pod of employees can backfire without proper diligence.

As COVID-19 era drags on, VCs look beyond Zoom calls for due diligence and sourcing

By Natasha Mascarenhas

While the coronavirus has accelerated the dealmaking pace for many early-stage startups, activity has not come without adaptation.

Remote investment struggles for investors were clear from the get go: it’s challenging to invest millions in someone you have never met, and there’s not a lot to learn from “off-the-cuff” conversations that are calendared days in advance. Some investors said the pandemic was forcing them to stick with people they know in categories where they have experience, limiting the network that one can push money into.

Over six months into a global pandemic, though, new techniques are emerging to address some of these woes. The very art of a deal, from due diligence to sourcing, is changing from a cultural and technological standpoint.

One of the new places that recreates informal bonding and camaraderie is Matchbox.VC, formerly Fortnite.VC.

The service connects founders and investors over video games to network and source deals in a low-stress environment. Matchbox.VC was inspired from a tweet by Founders Fund principal Delian Asparouhov and has garnered interest from investors like Arjun Sethi from Tribe Capital, Ryan Shea, the ex-founder of Blockstack, Jake Chapman from AlphafundVC and Peter Rojas from Betaworks. Its last game night was backed by Yac, Tribe Capital and Shrug Capital.

We’ve invested $14m total in the company and it’s off to the races, and is counter cyclical in a covid world so yeah

pretty pleased with my Fortnite sourcing thus far

— delian (@zebulgar) April 24, 2020

The pitch is simple: founders and investors sign up on the website, answer basic questions about their focus, company and stage before picking three game choices from eight options that include Fortnite, COD: Warzone and Valorant.

England’s long-delayed COVID-19 contacts-tracing app to launch on September 24

By Natasha Lomas

The UK’s long delayed coronavirus contact tracing app finally has a release date: The Department of Health and Social Care (DHSC) announced today that the app will launch in England and Wales on September 24.

The other regions of the country, Scotland and Northern Ireland, already have their own COVID-19 contacts tracing apps — the latter launching an app this summer. While the Protect Scotland app was released yesterday, where it went on to clock up more than 600,000 downloads in a matter of hours.

England and Wales have had a far lengthy-than-expected wait for an app after a false start back in May, when government ministers had suggested in daily coronavirus briefings that an app would be landing shortly.

Instead the launch was delayed, and DHSC took over development of the NHS COVID-19 app from the National Health Service’s digital division, NHSX, after it ran into problems related to the choice of a centralized app architecture — which triggered privacy concerns and saw the test app plagued by technical issues around iPhones device detection.

The government pivoted the app to a decentralized architecture which means it’s able to make use of exposure notification APIs offered by Apple and Google for official COVID-19 contacts tracing apps, avoiding the technical issues associated with iOS background Bluetooth detection.

Another element that’s been added to the NHS COVID-19 app is a check-in feature for venues via scannable QR codes. The government is encouraging businesses and locations where people may congregate, such as pubs, restaurants, hairdressers, libraries and so on, to print out and display a QR code that app users can scan to check into the venue.

This check-in data will be held locally on the device, taking the same privacy-preserving approach as for contacts data generated when devices come into proximity and swap ephemeral IDs.

Venue check-in data will be retained on device for 21 days, per the DHSC. If an outbreak is identified at a location its venue ID will be broadcast to all devices running the app — and those that contain recent check-ins will generate an on-device match.

The DHSC says such a match may generate an alert and advice to the app user on what to do (e.g. whether to quarantine) — “based on the level of risk”.

The government says trials of the reformulated app on the Isle of Wight and with NHS Volunteer Responders have shown it to be “highly effective” when used in conjunction with traditional contact tracing to identify contacts of those who have tested positive for the novel coronavirus.

It had previously suggested there were issues related to limitations in Apple’s and Google’s APIs which made it difficult to effectively estimate the distance between devices which it said was needed to generate exposure notifications.

Talking up the impending launch of the app, health and social care secretary Matt Hancock suggested that the scannable venue codes will provide “an easy and simple way to collect contact details to support the NHS Test and Trace system”. Although businesses will need a fall-back system to collect data from patrons who do not have the app.

“We need to use every tool at our disposal to control the spread of the virus including cutting-edge technology. The launch of the app later this month across England and Wales is a defining moment and will aid our ability to contain the virus at a critical time,” Hancock added.

UK businesses are being invited to download a QR code to display at their premise via gov.uk/create-coronavirus-qr-poster.

Reports last month in UK national press that suggested the app would abandon automatic contact tracing altogether appear to have been wide of the mark.

Carbon Health to launch 100 pop-up COVID-19 testing clinics across the US

By Darrell Etherington

Primary care health tech startup Carbon Health has added a new element to its “omnichannel” healthcare approach with the launch of a new pop-up clinic model that is already live in San Francisco, LA, Seattle, Brooklyn and Manhattan, with Detroit to follow soon – and that will be rolling out over the next weeks and months across a variety of major markets in the U.S., ultimately resulting in 100 new COVID-19 testing sites that will add testing capacity on the order of around an additional 100,000 patients per month across the country.

So far, Carbon Health has focused its COVID-19 efforts around its existing facilities in the Bay Area, and also around pop-up testing sites set up in and around San Francisco through collaboration with genomics startup Color, and municipal authorities. Now, Carbon Health CEO and co-founder Even Bali tells me in an interview that the company believes the time is right for it to take what it has learned and apply that on a more national scale, with a model that allows for flexible and rapid deployment. In fact, Bali says the they realized and began working towards this goal as early as March.

“We started working on COVID response as early as February, because we were seeing patients who are literally coming from Wuhan, China to our clinics,” Bali said. “We expected the pandemic to hit any time. And partially because of the failure of federal government control, we decided to do everything we can to be able to help out with certain things.”

That began with things that Carbon could do locally, more close to home in its existing footprint. But it was obvious early on to Bali and his team that there would be a need to scale efforts more broadly. To do that, Carbon was able to draw on its early experience.

“We have been doing on-site, we have been going to nursing homes, we have been working with companies to help them reopen,” he told me. “At this point, I think we’ve done more than 200,000 COVID tests by ourselves. And I think I do more than half of all the Bay Area, if you include that the San Francisco City initiative is also partly powered by Carbon Health, so we’re already trying to scale as much as possible, but at some point we were hitting some physical space limits, and had the idea back in March to scale with more pop-up, more mobile clinics that you can actually put up like faster than a physical location.”

Interior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.

To this end, Carbon Health also began using a mobile trailer that would travel from town to town in order to provide testing to communities that weren’t typically well-served. That ended up being a kind of prototype of this model, which employs construction trailers like you’d see at a new condo under development acting as a foreman’s office, but refurbished and equipped with everything needed for on-site COVID testing run by medical professionals. These, too, are a more temporary solution, as Carbon Health is working with a manufacturing company to create a more fit-for-purpose custom design that can be manufactured at scale to help them ramp deployment of these even faster.

Carbon Health is partnering with Reef Technologies, a SoftBank -backed startup that turns parking garage spots into locations for businesses, including foodservice, fulfilment, and now Carbon’s medical clinics. This has helped immensely with the complications of local permitting and real estate regulations, Bali says. That means that Carbon Health’s pop-up clinics can bypass a lot of the red tape that slows the process of opening more traditional, permanent locations.

While cost is one advantage of using this model, Bali says that actually it’s not nearly as inexpensive as you might think relative to opening a more traditional clinic – at least until their custom manufacturing and economies of scale kick in. But speed is the big advantage, and that’s what is helping Carbon Health look ahead from this particular moment, to how these might be used either post-pandemic, or during the eventual vaccine distribution phase of the COVID crisis. Bali points out that any approved vaccine will need administration to patients, which will require as much, if not more infrastructure than testing.

Exterior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.

Meanwhile, Carbon Health’s pop-up model could bridge the gap between traditional primary care and telehealth, for ongoing care needs unrelated to COVID.

“A lot of the problems that telemedicine is not a good solution for, are the things where a video check-in with a doctor is nearly enough, but you do need some diagnostic tests – maybe you might you may need some administration, or you may need like a really simple physical examination that nursing staff can do with the instructions of the doctor. So if you think about those cases, pretty much 90% of all visits can actually be done with a doctor on video, and nursing staff in person.”

COVID testing is an imminent, important need nationwide – and COVID vaccine administration will hopefully soon replace it, with just as much urgency. But even after the pandemic has passed, healthcare in general will change dramatically, and Carbon Health’s model could be a more permanent and scalable way to address the needs of distributed care everywhere.

Shift’s George Arison shares 6 tips for taking your company public via a SPAC

By Walter Thompson
George Arison Contributor
George Arison is the co-founder and co-CEO of online used car marketplace Shift.

When startup entrepreneurs think about going public, they typically think about gearing up for an initial public offering (IPO). Going public via a special purpose acquisition company (SPAC), commonly referred to as a reverse merger process, is another route that’s becoming more popular and is also worth considering.

When Manish Patel, one of Shift’s board members, first suggested that I learn about SPACs back in 2019, I had no clue what he was talking about.

Now, just over a year later, we’ve almost completed Shift’s SPAC process. I hope that what we’ve learned from our experience is useful for other CEOs and founders considering a SPAC.

Shift announced its SPAC in June 2020 and is expected to complete the process of going public later this year. Here are a few of the things you and your team might want to get in order if you’ve decided that a SPAC might be a fit for you and your business:

Be prepared to become a SPAC expert

SPACs have been around for a number of years, but they have become en vogue in recent months, especially given how well the public markets have held up in the COVID-19 era. Even still, don’t expect others to understand the SPAC process right off the bat.

If you go the SPAC route, you’ll need to become an expert at financial engineering. When we first started the process, I had to spend a lot of time educating our investors and team about how SPACs work and their validity. So I’ve had to come to the table with examples of when SPACs have worked and why, with a lot of data to back up my claims. Keep in mind that going through a SPAC will likely be a new process for all of them too. Even if you’ve been through a successful IPO process, you’ll still need to educate yourself — the SPAC process and the IPO process are completely different.

Slack’s earnings detail how COVID-19 is both a help and a hindrance to cloud growth

By Alex Wilhelm

Slack’s shares are set to fall sharply this morning, down around 16% in pre-market trading. As the company beat analyst expectations last quarter and guided within range, the selloff might feel a little surprising.

Perhaps it shouldn’t.

I spoke with a VC last week about what the new benchmark results are for private SaaS companies, and to my surprise, he said software startups don’t have to grow at 100% to be fundable in today’s market. Given what I’d heard from other venture capitalists about how so much of their portfolios had found a COVID-19 growth bump, the perspectives felt incongruous.


The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Startups wanted to grow at a pace of more than 100% pre-pandemic, and some have accelerated since. So how could a startup growing less than three figures yearly be attractive? Throw in Zoom’s impressive earnings results and some warning signs from earlier this earnings cycle that cloud growth hasn’t wound up being quite as fast as expected felt diminished.

Slack’s earnings help sort out what’s going on.

Reading the company’s SEC filing related to earnings this morning, it’s hard to miss Slack’s notes about COVID-19. The enterprise communications company describes early benefits from the pandemic, along with lingering pain associated with its economic impacts. In short, the software-related COVID-bump could wind up leaving a hangover in the short- to medium-term.

This helps us understand why a software startup could be VC-attractive in 2020 without a 100% growth rate. Perhaps more SaaS and cloud startups than have been generally told are struggling, which means slower revenue expansion is palatable provided that other indicators are flashing green.

To understand what could be happening to your favorite startup, let’s tease apart Slack’s COVID-19-related business notes, starting with the good news, before turning to what I’ve penciled in as the bad news — and the even badder tidings.

This Labor Day, spare a thought for the workers who made your doorstep delivery possible

By Walter Thompson
Arjuna Costa Contributor
Arjuna Costa is a partner at Omidyar Network and early stage investor in Ruma.

A few weeks ago, I bought a used paperback mystery for $3 via a small online bookseller. Intrigued that the book came with free shipping, I dug in a bit and was shocked to see that my little impulse purchase traveled through seven different distribution hubs across five states before it got to me. It was loaded and unloaded onto trucks in Indiana, Illinois, Colorado, Nevada and finally California and handled by an unknown number of logistics workers along the way, many of them in the middle of the night.

The logistics of getting the book to me, and the human toll it takes, are mind boggling, but we have become somewhat inured to them.

COVID-19 lockdowns have put a spotlight on the importance and complexity of supply chain dynamics. In a world shaped by the pandemic, our reliance on e-commerce for everything from PPE to toilet paper to hard-boiled paperback mysteries has exploded. A recent report from Adobe found that total online spending is up 77% year-over-year, accelerating growth by “four to six years.” That growth has a very real human cost, and one that we don’t think about or act on enough as a society.

While people recognize the contributions of frontline workers they can see like doctors and nurses, postal carriers and grocery store workers, there’s an entire hidden infrastructure of logistics workers that keeps the online economy humming. These workers are also on the frontlines, but they are behind the scenes. Most earn minimum wage and work long, grueling, high-stress shifts without strong protections in the event they get sick or injured. The fact is that many corporations haven’t made protections for those workers a priority. That was true before COVID-19, but the pandemic gave the issue a renewed urgency, prompting workers from Amazon, Walmart, Target and FedEx, among others, to organize walkouts. And with unprecedented levels of unemployment, more and more people are going to find jobs in the logistics sector.

This Labor Day, it’s time to think about how corporations can better support and protect this vital but often forgotten segment of the workforce.

Better safety in the warehouse

Imagine there’s a package handler at a major manufacturer named Jack who spends his shifts heaving heavy boxes onto a conveyor belt. It’s an arduous movement that Jack will repeat a few thousand times before he punches out. As a 10-year veteran on the job, Jack has performed this singular task on this same warehouse floor more times than he can count. On this particular night, he’s tired after staying up late playing with his kids, and he slips a disk in his back. Unfortunately, Jack’s plight is all too often a reality for millions of workers today.

According to the Bureau of Labor Statistics, 5% of warehouse workers in the U.S. experience an injury on the job each year—higher than the national average. After service workers, like firefighters and police, transportation/shipping and manufacturing/production rank second and third as the occupations with the largest number of workplace injuries resulting in days away from work. Jobs that involve heavy lifting, arduous repetition and operating complex machinery come with serious risk.

Injuries can be devastating for workers, both physically and financially. Taking time off work can not only result in lost wages, but also drive people into debt due to health-related expenses, creating health-poverty traps that are difficult to climb out of. Worker injuries are also costly for employers. A study from Liberty Mutual, using data from the U.S. Bureau of Labor Statistics and the National Academy of Social Insurance, found that serious, nonfatal injuries cost $84.04 million a week in the transportation and warehousing industry. It is in corporations’ best interest to prioritize workplace safety.

One challenge is that traditional approaches to workplace safety are slow, inaccurate and costly. Without practical interventions, organizations spend an estimated $2,000+ per worker annually on injury prevention. Within manufacturing and logistics industries, it costs an additional $2,000+ annually for workers’ compensation per full-time employee. Currently, there is no standard solution to preventing workplace injuries while lowering costs, leaving workers like Jack without adequate protections. Fortunately, digital platforms and tools that leverage technological innovation, including sensors and wearables, are advancing new ways to prevent workplace accidents and injuries.

Take for example StrongArm, one of Flourish’s portfolio companies. StrongArm has built a technology platform that integrates a new generation of industrial wearables, big data analytics and smart algorithms. It is designed to modernize industry dynamics for workers, employers and workers’ compensation insurers. The company’s GDPR-compliant wearable hardware devices and data platform called FUSE deliver real-time injury prevention feedback and collect data to support precise interventions for overall injury reduction and has reduced injury rates by more than 40% year-over-year for its clients.

StrongArm has also helped keep workers safe during the pandemic by launching a new suite of capabilities on its FUSE platform, including CDC communication, proximity alerts (i.e., notifications to workers within six feet of one another), and exposure analysis (understanding who has interacted with whom, at what time, and for what duration, exposing any potential contact transfer with accuracy). These enhanced capabilities can get workers back to work faster, earning vitally needed income while reducing COVID-19 risk by 95%.

Fetch Robotics is another company using technological innovation and digital platforms to promote worker safety. Fetch makes an Autonomous Mobile Robot (AMR) that can transport materials within warehouses, factories and distribution centers while also gathering environmental data. This can relieve the burden of heavy lifting from human workers and ensure that conditions, like heat, remain safe in work environments. In June 2020, the company announced that it was launching a disinfecting AMR that can decontaminate spaces larger than 100,000 square feet in 1.5 hours, helping workers stay safe and get back to work quicker amid the spread of the virus.

Employers should do more

In its report titled, “The Impact of COVID-19 on Tech Innovation,” Lux Research found that the outbreak of COVID-19 will likely push corporations with major manufacturing and logistics operations to assess the potential of robotics. More companies will explore how they can automate processes, particularly those that are repeatable and predictable. Findings like these inevitably lead to questions about how increased automation will impact workers — the eternal “will robots take all the jobs?” question. However, we are still a long way away from a world where human workers are obsolete (just ask Elon Musk).

Robots are still not good at picking up small or oddly shaped objects, for instance. For the foreseeable future, corporations will depend on logistics workers and have a responsibility to protect the safety of those workers. It’s not enough to plaster the required OSHA sign on the factory or warehouse floor. Corporations need to do more. Fortunately in this case, the right thing to do is the good thing to do. By embracing technological innovation, promoting worker safety is a win-win.

Local governments that embrace digital services during challenging times can make real change happen

By Walter Thompson
Bob Ainsbury Contributor
Bob Ainsbury is the Chief Product Officer at Granicus.

It has been a hard year. We wake up every morning to new developments in the tragedies of the moment spanning a pandemic, the greatest unexpected loss of life since 9/11, national civil unrest, natural disasters and a looming economic collapse.

In the face of these developments, a completely understandable message from government agencies to the public might be: We can’t serve you right now. Please take a number and we’ll get back to you as soon as possible.

But as we know now, this is an unacceptable path to successfully, and proactively, addressing the increasing needs of citizens facing public health risk and economic uncertainty. In fact, in the past few months, Americans have exhibited an unquenchable thirst for fast, effective government services and information. Resident demands of local government and community organizations are rising. Their voices are louder than ever before. People are bringing a new civic experience to the forefront of local governments that’s delivered on their terms — and aligned with growing demand for always-on, 24/7 information and services.

A hallmark of 2020 (so far) has been global developments impacting people at a very local level. For instance, a pandemic sparked a massive shift in American civic engagement around issues like public health and racial equality. The past few months have reinforced what the real power of local government is: To efficiently offer services and information that directly impact people’s lives. For cities and municipalities, the question now becomes: How can local leaders embrace this new era of civic engagement in the world of COVID-19 to deliver digital solutions that help everyone meet the moment?

Build a digital public square for the people

In the United States, the COVID-19 pandemic has literally closed city halls and forced government agencies at all levels to rethink modernizing public sector work to digitally and equitably deliver citizen services. Mayors, city council members and local agency officials, in particular, need to embrace this complex moment in time as an opportunity to cultivate a more vibrant, straightforward, inclusive and participatory municipal experience. One way to do that is to invest in digital tools, technologies and talent that can help local governments develop online civic engagement and citizen service outlets. Platforms that not only offer needed government services, but also prioritize input from residents and encourage community dialogue guided by clarity, trust and accountability.

Service has always been at the core of local government. However, a main challenge facing public sector leaders today is how to transfer critical services online. More specifically, developing online services that allow people who no longer have the luxury of waiting in lines for in-person interactions to remotely register to vote, obtain or renew a permit, report downed power lines and more.

A recommended path toward solution(s): At the end of the day, citizens are consumers. They want around-the-clock access to government services and options for ways to interact with service providers that meet their needs while taking their personal comfort into account. For local government agencies in the midst of digital transformation, building convenience into in-house digital government offerings and solution procurements is crucial. Digital government service solutions must be designed — by agencies or contracted vendors — to be platform and device agnostic (or, at least, interchangeable) on the back end; taking an omnichannel approach that addresses the needs of citizens and agencies through web, mobile, social media and offline options on the front end.

Bring the value of local government home

An increased online presence of community members and remote workers during the pandemic offers municipalities a fresh and cost-effective opportunity to advance local government digital service. Until recently, seemingly table stakes actions like producing photos for identification cards, scanning important documents, digitizing forms and streamlining workflows and case management were only plausible if large government teams had the budget to purchase required technologies separately, then stitch them together. Budget and capacity-constrained communities were largely left in the dark.

The good news is that today’s cloud-based solutions are complete, affordable and scalable to communities of all sizes. The market features solutions that are purpose-built for local governments to integrate with legacy IT systems while transitioning traditionally in-person services to digital interactions. And it’s possible to tap these solutions to fuel America’s new, more active brand of civic engagement and service citizens rapidly.

Further, the advent of accessible and affordable (or free) digital engagement platforms now complements an expanding recognition among American society that truly impactful things can come from government sources. The shift in thinking has produced civic engagement defined not by a sprint to profits, as is the case in the private sector, but by the ability for a representative community to actually influence policy and shape citizen services delivery.

A recommended path toward solution(s): In addition to always-on capabilities, digital government platforms need to be able to deliver goods and services to citizens directly and without friction. Whether accessing a government assistance application or applying for a park permit, citizens want their requests fulfilled without complications or inefficiencies plaguing the process — and going all-virtual or mostly remote during COVID-19 has made this more important than ever. In response, agencies should invest in the creation of digital forums for two-way communication to capture feedback that accurately reflects the demands and needs of the local community at the individual household level.

Boost digital forum accountability and representation moving forward

Today’s elevated energy around civic engagement is a direct result of the pandemic, expanding consumer activism and recent protests against systemic injustice. This confluence of factors offers local governments a fleeting opportunity to move beyond simply observing vocal citizen activity across the country. There’s now an opening to build upon, and actively grow, levels of civic engagement and community trust over time.

It’s now possible for local governments to reach more citizens by expanding their networks of interested subscribers and combat misinformation while keeping every resident informed. Agencies can advance on both fronts by providing civic leaders a two-way forum that encourages them to share progress being made in policy and procedures. After all, interacting with governments should be as simple and transparent for everyone as checking a bank account balance or reordering coffee pods from Amazon.

A recommended path toward solution(s): Municipalities should jump at this chance to really listen to diverse community voices pushing for change — especially as some powerful people in government and society seek to quiet or ignore them. They should consider developing long overdue digital solutions that amplify diverse community voices, deliver critical services and help to inform people broadly. Citizens, for their part, should be able to easily provide feedback, share ideas and voice their pressing needs to public sector officials or representatives who can help residents feel secure, listened to and taken care of. Expanded civic engagement impact entails reaching more people through their preferred channels, whether that’s email, text or snail mail, and establishing a dialogue that converts to action.

I’m confident that local governments throughout the country can rise to today’s unprecedented challenges by providing digital civic engagement outlets built to elevate individual perspectives on policy issues and surface life experiences that, in turn, inform inclusive civic action and real change.

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