Month: June 2019

How to make remote work work

TechCrunch columnist Jon Evans has an Extra Crunch-exclusive look on what it takes to get remote work working within an organization. Evans, who has been the remote CTO of technology consulting firm HappyFunCorp for many years, finds that “you need decisive confidence, clear direction, iterative targets, independent responsibilities, asynchronous communications, and cheerful chatter” to build out a harmonious remote work culture.

Decisive confidence. Suppose Vivek in Delhi, Diego in Rio, and Miles in Berlin are all on a project. (An example I’m drawing from my real life.) It’s late your time. You have to make a decision about the direction of their work. If you sleep on it, you’re writing off multiple developer-days of productivity.

Sometimes they have enough responsibilities to have other things to work on. (More on that below.) Sometimes you don’t have to make the decision because they have enough responsibility to do so themselves. (More on that below.) But sometimes you have to make the business-level decision based on scant information. In cases like this, remember the military maxim: “Any decision is better than no decision.”

How to negotiate term sheets with strategic investors

Over the last few years, we’ve seen the rise of hundreds of strategic investors, typically large corporates with venture wings with the mission to invest in the next wave of startups targeting their existing business lines. While many of these funds are structured at least symbolically as traditional venture capital firms, their specific concerns during deal negotiation can be quite different.

Source: Tech Crunch

Welcome back to this week’s transcribed edition of Equity.

This was a big week of news that the Equity duo had to cover. Kate was at the Code Conference, Fortnite maker, Epic Games bought Houseparty, and a bit more on the Bird-Scoot deal.

Then came talk of the CrowdStrike IPO, which gave way to a heated discussion about dual-class shares.

Alex Wilhelm: I think it’s honest. I think giving the public one vote per share, and giving yourself 10 so you retain greater than 50% of voting is a sop. I think it’s ridiculous. Just fly under your own flag. If you don’t want to share any control, then don’t. If you want to have a company with a functional governance, that adheres to historical norms for how this stuff works, then have votes. This 10 versus 1 thing is a fracking farce, because I can’t swear on this show, so you can fill that in yourself. If you want to look at a historical example of a company that didn’t have this setup, it was Amazon, which historically thinks far ahead, and has done fantastically well. It’s public company growing from a, I believe, under nine-figure revenue. The idea you can’t do it is trash. The idea that it always works is wrong. To me, it’s dishonest. If you’re going to sell shares, go public, and float, share the voting power with your shareholders. Don’t treat them like children, and you like a god. You’re not.

Kate Clark: Alex is getting really worked up, but I totally agree with you. That’s why I want to-

Wilhelm: I’m not worked up, I’m angry.

Clark: That’s why I wanted to talk about it though, because I think it’s important. I think what you just said is a perfect summary of why it’s messed up. The only thing I think that will really change this, is to see whether these dual-class stocks, versus single-class stocks, perform differently on the market. As far as I know, they’re not, which means that people don’t care. Or, people don’t know, I don’t know. If a company isn’t going to lose any money doing it … If they’re not going to have any consequences whatsoever, they’re not going to be up against any negative feedback from shareholders, then of course, they’re going to keep doing it. Like I said, it’s not really talked about very much.

Want more Extra Crunch? Need to read this entire transcript? Then become a member. You can learn more and try it for free. 

Source: Tech Crunch

Less than six months after releasing the disappointing interactive experiment “Bandersnatch,” Netflix’s science fiction anthology series “Black Mirror” is back with three traditionally-structured episodes.

On the latest installment of the Original Content podcast, we weigh in with our thoughts on the new season. We didn’t entirely agree on which episodes were strongest, but we agreed that there wasn’t a real misfire in the bunch.

Darrell and Jordan were most impressed the season opener, “Striking Vipers” — which uses a VR fighting game as a launching point for a thorny exploration of sexuality and friendship — while Anthony preferred “Smithereens,” in which the the driver with an Uber-style app takes a social media intern hostage. And we also had a good time with “Rachel, Jack and Ashley Too,” which stars as Miley Cyrus as a pop star who’s merchandised as a friendly AI assistant.

Not all of the new episodes end happily, but in general, the show’s penchant for bleakness seems to have lifted (or perhaps it was simply channeled into “Bandersnatch”), leaving room for more emotional complexity. If we had any complaints, they had more to do with the relatively abbreviated season length, and with our skepticism about some of the show’s near-future technology.

You can listen in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)

And if you want to skip ahead, here’s how the episode breaks down:

0:00 Intro
1:33 “Black Mirror” spoiler-free review
31:00 Spoiler discussion

Source: Tech Crunch

Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s noteworthy venture capital deals, funds and trends. Before I dive into this week’s topic, let’s catch up a bit. Last week, I wrote about Peloton’s upcoming initial public offering. Before that, I noted the proliferation of billion-dollar companies. 

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here. 

Now I know this newsletter is supposed to be about startups, but we’re shifting our focus to Big Tech today. Bear with me.

I spent the better part of the week in Scottsdale, Ariz. where temperatures outside soared past 100 and temperatures inside were icy cold. Both because Recode + Vox cranked the AC to ungodly levels but also because every panel, it seemed, veered into a debate around the “techlash” and antitrust.

If you aren’t familiar, the Financial Times defines the techlash as “the growing public animosity toward large Silicon Valley platform technology companies.” Code Conference has in the past been an event that underscores innovation in tech. This year, amid growing tensions between tech’s business practices and the greater good, things felt a little different.

The conference began with Peter Kafka grilling YouTube’s CEO Susan Wojcicki. Unfortunately for her, CodeCon took place the week after an enormous controversy struck YouTube. You can read about that here. Wojcicki wasn’t up to the task of addressing the scandal, at least not honestly. She apologized to the LGBTQ community for YouTube’s actions but was unable to confront the larger issue at hand: YouTube has failed to take necessary action toward eliminating hate speech on its platform, much like other social media hubs.

From there, The Verge’s Casey Newton asked Instagram head Adam Mosseri and Facebook vice president of consumer hardware Andrew Bosworth point blank if Facebook should be broken up. Unsurprisingly, neither of the two men are fond of the idea.

“Personally, if we split [Facebook and Instagram] it might make my life easier but I think it’s a terrible idea,” Mosseri, who was named CEO of Instagram last fall, said. “If you split us up, it would just make it exponentially more difficult to keep people safe. There are more people working on safety and integrity issues at Facebook than all the people that work at Instagram.”

Bosworth, who manages VR projects at Facebook, had this to say: “You take Instagram and Facebook apart, you have the same attack surfaces. They now aren’t able to share and combine data … So this isn’t circular logic. This is an economy of scale.”

Wojcicki, when asked whether YouTube should separate from Google, had a less nuanced and frankly shockingly ill-prepared response:

There’s more where that came from, but this newsletter isn’t about big tech! It’s about startups! Here’s all the startup news you missed this week.

IPO Corner

CrowdStrike’s IPO went really well: After pricing its IPO at $34 per share Tuesday evening and raising $612 million in the process (a whole lot more than the planned $378 million), the company’s stock popped 90% Wednesday morning with an initial share price of $63.50. A bona fide success, CrowdStrike boasted an initial market cap of $11.4 billion, nearly four times that of its last private valuation, at market close Wednesday. I chatted with CrowdStrike CEO George Kurtz on listing day. You can read our full conversation here.

Fiverr climbs: The marketplace had a good first day on the NYSE. The company priced its IPO at $21 per share Wednesday night, raising around $111 million. It then started trading Thursday morning at $26 apiece, with shares climbing for most of the day and closing at $39.90 — up 90% from the IPO price. Again, not bad. Read TechCrunch’s Anthony Ha’s conversation with Fiverr CEO Micha Kaufman here.

Get ready for … Slack’s highly-anticipated direct listing next week (June 20). Catch up on direct listings here and learn more about Slack’s journey to the public markets here.

Bird confirmed its acquisition of Scoot

As is usually the case with these things, parties from both Bird and Scoot declined to tell us any details about the deal, so we went and found the details ourselves! First, The Wall Street Journal’s Katie Roof reported the (mostly stock) deal was valued at roughly $25 million. We confirmed with our sources that it was indeed less than $25 million and came after Scoot struggled to raise additional capital from venture capital investors.

Fortnite throws a Houseparty 

While we’re on the subject of M&A, Epic Games, the creator of Fortnite, acquired Houseparty, a video chatting mobile app, this week. The deal comes shortly after Epic Games raised a whopping $1.25 billion. Founded in 2015, Houseparty is a social network that delivers video chat across a number of different platforms, including iOS, Android and macOS. Like Fortnite, the offering tends to skew younger. Specifically, the app caters toward teen users, providing a more private and safer space than other, broader platforms.

Startup Capital

Symphony, a messaging app, gets $165M at a $1.4B valuation
BetterUp raises $103M to fast-track employee development
Neurobehavioral health company BlackThorn pulls in $76M from GV
Against Gravity, maker of the VR hit ‘Rec Room,’ nabs $24M
Simpo secures $4.5M seed round to help drive software adoption

~Extra Crunch~

If you’ve been unsure whether to sign up for TechCrunch’s awesome new subscription service, now is the time. Through next Friday, it’s only $2 a month for two months. Seems like a no-brainer. Sign up here. Here are some of my personal favorite EC pieces of the week:

• Why is Andreessen Horowitz (and everyone else) investing in Latin America right now?
• Fundraising 101: Do VC associates matter?
• What top VCs look for in women’s fertility startups

Silicon Valley’s founder fetish infantilizes public companies

Source: Tech Crunch

Rep. Will Hurd will no longer give the keynote address at the Black Hat security conference amid questions about his voting record on women’s rights.

Hurd, a Texas Republican congressman was scheduled to headline the conference later this year but the organizers decided to walk back the decision a day later.

“Black Hat has chosen to remove U.S. Representative Will Hurd as our 2019 Black Hat USA Keynote. We misjudged the separation of technology and politics,” said a statement. “We will continue to focus on technology and research, however we recognize that Black Hat USA is not the appropriate platform for the polarizing political debate resulting from our choice of speaker.”

“We are still fully dedicated to providing an inclusive environment and apologize that this decision did not reflect that sentiment,” the statement added.

A new keynote speaker has not yet been announced.

We reported yesterday that some in the security community felt uncomfortable and described their unease with the decision to appoint Hurd as keynote speaker. Hurd has consistently voted against legislation supporting women’s rights, including a bill that would financially support women in STEM fields, but also voting in favor of allowing states to restrict access and coverage to abortions and defunding access to women’s health organizations like Planned Parenthood.

Critics said the move alienated women at a time where diversity in security remains a challenge. Others criticized the choice of speaker on his views, calling access to women’s healthcare a human right.

Several long-time Black Hat attendees said on Twitter that they would not attend the conference following news of Hurd’s keynote.

Hurd’s communications director Katie Thompson did not respond to a request for comment.

Source: Tech Crunch

Elizabeth Warren, who earlier this year confirmed her intent to run for president in 2020, has an ambitious plan to advance entrepreneurs of color.

In a series of tweets published this morning, the Massachusetts senator proposed a $7 billion Small Business Equity Fund to provide grants to Black, Latinx, Native American and other minority entrepreneurs, if she’s elected president. The initiative will be covered by her “Ultra-Millionaire Tax,” a two-cent tax on every dollar of wealth above $50 million the presidential hopeful first outlined in January.

The fund would be managed by the Department of Economic Development, a new government entity to be constructed under the Warren administration. With a goal of creating and defending American jobs, the Department of Economic Development would replace the Commerce Department and “subsume other agencies like the Small Business Administration and the Patent and Trademark Office, and include research and development programs, worker training programs, and export and trade authorities like the Office of the U.S. Trade Representative,” Warren explained.

The Small Business Equity Fund will exclusively issue grant funding to entrepreneurs eligible to apply for the Small Business Administration’s existing 8(a) program and who have less than $100,000 in household wealth, aiming to provide capital to 100,000 new minority-owned businesses, creating 1.1 million new jobs.

Founders of color receive a disproportionate amount of venture capital funding. There’s insufficient data on the topic, but research from digitalundivided published last year suggests the median amount of funding raised by black women, for example, is $0. According to the same study, black women have raised just .0006% of all tech venture funding since 2009.

Startups founded by all-female teams, despite efforts to level the playing field for female entrepreneurs, raised just 2.2% of venture capital investment in 2018.

VCs are a majority white and male. Plus, they have a proven tendency to invest their capital into entrepreneurs who look like them or who resemble founders that were previously successful. In other words, VCs are continuously on the hunt for the next Mark Zuckerberg .

“Even if we fully close the startup capital gap, deep systemic issues will continue to tilt the playing field,” Warren wrote. “86% of venture capitalists are white, and studies show that investors are more likely to partner with entrepreneurs who look like them. This tilts the field against entrepreneurs of color. So I plan to address this disparity head on too. I will require states and cities administering my new Fund to work with diverse investment managers—putting $7 billion in the hands of minority-and women-owned managers.”

Source: Tech Crunch

Freelance marketplace Fiverr has become closely associated with the gig economy, but Micha Kaufman argued that not all gig economy companies are created equal.

I spoke to Kaufman yesterday afternoon, after Fiverr debuted on the New York Stock Exchange and spent the day climbing to 90% above the IPO price.

As we talked about Fiverr’s community of freelancers, I brought up the driver strikes before Uber’s IPO and wondered how Kaufman can ensure freelancers can benefit from the company’s success. In response, he pointed out that Fiverr sellers are often highly-skilled, and they determine the terms of the job and of payment.

“That is very different than [some of the] other platforms called gig economy,” he said.

He added that this structure means a freelance designer in (say) San Francisco doesn’t have to worry as much about about matching the prices of someone across the world, who has much lower costs and can charge less.

Fiverr at the NYSE

“I think that if you have a market that pushes for bidding, then definitely, yes, there’s a downward pressure,” he said. “In a market where freelancers get to define their own scope, timing, and price, you see the opposite trend. What we’re seeing is freelancers all around the world making more and more money very year. It’s a counterintuitive, or countercyclical rather, race to the top.”

To get a little more specific about that: While the company’s S-1 filing doesn’t discuss the income of individual sellers, it says the total value of all transactions on the platform increased from $213 million in 2017 to $293.5 million in 2018, and that it had 255,000 active sellers at end of the first quarter of 2019.

The S-1 also reported that the company saw a net loss of $36.1 million on revenue of $75.5 million in 2018, but Kaufman noted that the losses — as measured in negative EBITDA — are shrinking: “We are on the path to profitability. That’s the balance we’re trying to keep — focusing on growth while building a business that would be profitable in the long term.”

And he suggested that one of the things that impressed Wall Street investors was the fact that Fiverr operates less like a traditional hiring site and “much more similar to traditional e-commerce businesses like Etsy and Amazon,” where you can browse and purchase the services you need.

As for how going public changes the company, Kaufman said it means he has “a larger constituency to report to now.” But beyond that, he said, “I don’t think that that’s going to change the culture of the business or our focus. What we’re trying to create is this everything store for digital services.”

Kaufman suggested there’s room for geographic expansion, particularly in non-English-speaking countries, and to add new categories of work. More broadly, he said he wants to change the fact that the vast majority of freelancers still get hired via offline channels.

“The average time to order a service on Fiverr is 15 minutes,” he said. “Why would you spend a minute more doing it any other way?”

Source: Tech Crunch