Month: December 2020

When a friend forwarded this tweet from Paul Graham, it hit close to home:

Startups are subject to something like infant mortality: before they’re established, one thing going wrong can kill the company. Hardware companies seem to be subject to infant mortality their whole lives.
I think the reason is that the evolution of the product is so discontinuous. The company has to keep shipping, and customers to keep buying, new products. Which in practice is like relaunching the company each time.
I don’t know if there is an answer to this, but if there were a way for hardware companies to evolve more the way software companies do, they’d be a lot more resilient.

Looking back on our startup journey at Minut, I remember several moments when we could have died. However, surviving several near misses we learned to tackle these challenges and have become more resilient over time. While there will never be one fully exhaustive answer, here are some of the lessons we learned over the years:

Subscription revenue is the only revenue that counts

While you can sell hardware with a margin and make important early revenue, it’s not a sustainable business model for a company that requires both software and hardware. You can’t cover an indefinite commitment with a finite amount of money.

Many hardware companies don’t consider subscriptions early enough. While it can be hard to command a subscription from the start (if you can, you might have waited too long to launch), it needs to be in the plan from the beginning. Look for markets where paying subscriptions is the norm rather than markets that operate on a one-time sale model.

Set high margins and earn them over time

It’s tempting to set low prices for hardware to attract customers, but in the beginning you should do the opposite. Margins allow for mistakes to be rectified. A missed deadline might mean you have to opt for freight by air rather than boat. You might have to scrap components or buy them expensively in a supply crunch. Surprises are seldom positive, and you don’t want to use your venture capital to pay for them.

Healthy margins can also be used to cover marketing costs while you learn what kind of messaging works and what channels you can sell through. If that wasn’t enough reason, starting with relatively high prices will help you avoid another common mistake, selling too much at launch.

This might seem counterintuitive — why wouldn’t you want great success out of the gate? The reason is that you will inevitably make mistakes with your early launches, and the bigger the launch, the bigger the blow. There are plenty of companies who achieved amazing crowdfunding success and then failed to deliver even the first units. Startups tend to chase growth at all costs, but for hardware startups in the first few years there is such a thing as too much of a good thing.

Source: Tech Crunch

Amid the pandemic, workplace cultures have been turned on their heads. Meanwhile investment and growth haven’t slowed for many tech companies, requiring them to still onboard new engineering managers even while best practices for remote management are far from codified.

Because of remote work habit shifts, plenty of new tools have popped up to help engineers be more productive, or quickly help managers interface with direct-reports more often. Okay is taking a more observatory route, aiming to give managers dashboards that quantify the performance of their teams so that they can get a picture of where they have room to improve.

The startup, which launched out of Y Combinator earlier this year, tells TechCrunch they’ve raised $2.2 million in funding led by Sequoia and are launching the open beta of their service.

Co-founders Antoine Boulanger and Tomas Barreto met while working at Box — Boulanger as a senior director of engineering and Barreto as a VP of engineering. They told TechCrunch that in the process of building out a suite of in-house tools designed to help managers at Box understand their teams better, they realized the opportunity for a subscription toolset that could help managers across companies. For the most part, Boulanger says that today Okay is largely replacing tools built in-house as well.

Getting a picture of an engineering team’s productivity means plugging into these toolsets and gathering data into a digestible feed. Okay can be integrated with a number of toolsets, including software like GitHub, PagerDuty, CircleCI and Google Calendar.

“Part of the problem for managers is that there are so many tools, so how do you get signal from the noise?” Barreto tells TechCrunch.

A large part of Okay’s sell seems to be ensuring that managers can keep an active eye on the common pitfalls of rapid scaling and keep them in check so they can keep direct-reports satisfied. On the individual basis, managers can quickly see stats related to how much of an individual manager’s time is being spent in meetings compared to uninterrupted “maker time” where they actually have the ability to get work done.

People don’t like to be micromanaged and the idea that everything you do is feeding into a pie chart that judges whether you’re a good employee isn’t the most savory sell for engineers. Okay’s founders hope they can strike a balance and give managers data that they’re not tempted to over-rely on, instead defaulting to team-level insights when they can so that managers are dialed into general trends like how long projects are taking on average or how long it takes for pull requests to be reviewed.

Investors have been bankrolling remote work tools at a heightened pace for the last several months and things have been especially fortunate for young companies that were ahead of the trend. Barreto, for his part, has served as a scout at Sequoia since 2018 according to his LinkedIn.

The team says their product, as it stands today, is best fit for companies with 50-200 engineers that are high growth and perhaps going through some of those growing pains. The company’s early customers include teams at Brex, Plaid and Split.

Source: Tech Crunch

Given the attention that TechCrunch pays to Y Combinator’s Demo Days, we also try to keep tabs on the same startups as they scale and raise more capital. Yesterday we covered YC Winter 2020 participant BuildBuddy, for example. Today we’re taking a look at Heru, a startup based in Mexico City that is announcing a $1.7 million raise after taking part in YC’s Summer 2019 session.

The pre-seed round was led by Mountain Nazca, and participated in by Magma Partners, Xtraordinary Venture Partners, Flourish Ventures, YC itself and a handful of angels. The investment was raised in two pieces: a $500,000 check in February and the other $1.2 million closing a few weeks ago.

Heru wants to provide software-based services for gig workers in Mexico, and eventually other countries. Its founders, Mateo Jaramillo and Stiven Rodríguez Sánchez, are both ex-Uber employees, which is how they wound up in Mexico from their native Colombia.

But Heru didn’t have a straightforward path to existence. The founding duo told TechCrunch their original idea, something similar to OYO, was what they went through Y Combinator and initially raised money for. But after finding OYO already in their target market, the company took three months to rethink and, keeping investors on board, pivoted to Heru.

Heru is a package of software products aimed at delivery drivers and the like, helping provide insurance, credit and tax preparation support. The tax element is key, as the company’s founders explained to TechCrunch that Mexico now expects independent workers to file taxes on a monthly basis. Folks need help with that, so Heru built them a tool to do so.

There’s competition to that element of its product, Heru said, noting that there are accountants in the market that will do the work for $25 to $30. Heru’s tax service, in contrast, costs a smaller $5 each month (100 pesos). Insurance is another $5 each month for accident-related coverage. The startup worked with an insurance provider to build what it describes as a “tailor-made” policy for gig workers who need low-cost coverage.

The founding duo, via the company.

Heru is not only targeting Uber drivers and their like, however. The company noted that it also wants to support freelancers more broadly, a population that is much larger than the three million gig workers it counts in the Mexican market.

The company’s app has been soft-launched in the market for a few weeks, with the startup now making more noise about its existence. According to its founders, around 1,200 users were accepted during its test period. Another 20,000 are in line.

Among its early user base, customers are buying on average 1.2 Heru products, a number that I’ll track as the startup scales.

Heru’s app is neat, its market large and the need it is serving material. But in the background of the software story is a brick-and-mortar tale. The startup, in addition to building its app, put together a number of so-called “Heru Casas,” places where gig workers can recharge their phones and use a bathroom. You need the app to enter a Heru Casa, helping the startup find early users.

Currently all Heru Casas are located in Mexico City. The startup is not sure about expanding that part of its efforts to more cities where its app may attract users. Why? It’s hard to scale physical build-outs, it told TechCrunch. Software is much better for quick expansion, and as that’s the name of the startup game, holding off on more physical locations could make good sense until the company can raise more capital.

Heru has big plans to double-down its product work, and eventually add more countries to its roster. The Latin American market is a ripe place for startups to shake things up. Let’s see how quickly Heru can make its mark.

Source: Tech Crunch

A few years ago, building a bottom-up SaaS company – defined as a firm where the average purchasing decision is made without ever speaking to a salesperson – was a novel concept. Today, by our count, at least 30% of the Cloud 100 are now bottom-up.

For the first time, individual employees are influencing the tooling decisions of their companies versus having these decisions mandated by senior executives. Self-serve businesses thrive on this momentum, leveraging individuals as their evangelists, to grow from a single use-case to small teams, and ultimately into whole company deployments.

In a truly self-service model, individual users can sign up and try the product on their own. There is no need to get compliance approval for sensitive data or to get IT support for integrations — everything can be managed by the line-level users themselves. Then that person becomes an internal champion, driving adoption across the organization.

Today, some of the most well-known software companies such as Datadog, MongoDB, Slack and Zoom, to name a few, are built with a primarily bottom-up product-led sales approach.

In this piece, we will take a closer look at this trend — and specifically how it has fundamentally altered pricing — and at a framework for mapping pricing to customer value.

Aligning value with pricing

In a bottom-up SaaS world, pricing has to be transparent and standardized (at least for the most part, see below). It’s the only way your product can sell itself. In practice, this means you can no longer experiment as you go, with salespeople using their gut instinct to price each deal. You need a concrete strategy that aligns customer value with pricing.

To do this well, you need to deeply understand your customers and how they use your product. Once you do, you can “MAP” them to help align pricing with value.

The MAP customer value framework

The MAP customer value framework requires deeply understanding your customers in order to clearly identify and articulate their needs across Metrics, Activities and People.

Not all elements of MAP should determine your pricing, but chances are that one of them will be the right anchor for your pricing model:

Metrics: Metrics can include things like minutes, messages, meetings, data and storage. What are the key metrics your customers care about? Is there a threshold of value associated with these metrics? By tracking key metrics early on, you’ll be able to understand if growing a certain metric increases value for the customer. For example:

• Zoom — Minutes: Free with a 40-minute time limit on group meetings.
• Slack — Messages: Free until 10,000 total messages.
• Airtable — Records: Free until 1,200 records.

Activity: How do your customers really use your product and how do they describe themselves? Are they creators? Are they editors? Do different customers use your product differently? Instead of metrics, a key anchor for pricing may be the different roles users have within an organization and what they want and need in your product. If you choose to anchor on activity, you will need to align feature sets and capabilities with usage patterns (e.g., creators get access to deeper tooling than viewers, or admins get high privileges versus line-level users). For example:

Source: Tech Crunch

Welcome to TechCrunch’s 2020 Holiday Gift Guide! Need help with gift ideas? We’re here to help! We’ll be rolling out gift guides from now through the end of December. You can find our other guides right here.

Like plenty of others, I dug much deeper into the great outdoors and camping this summer amid social distancing restrictions. It’s pretty easy to stay COVID-safe when you’re several days’ wander into the wilderness. Whether it’s a fun day hike, a car camping excursion or a multi-day backcountry backpacking trip, there’s plenty of great camping and hiking gear that can make life easier for the outdoors person (without going overboard).

I bought a ton of camping gear online this year. I had the fortune of timing a 40-mile backpacking excursion through the Los Padres national forest with one of REI’s annual sales, a time when the majority of online camping retailers also tend to offer steep discounts on their stuff. Most of my gear was optimized for backpacking and I ended up replacing most of my decade-old gear with some lighter, better-quality stuff. Backpacking leaves room for fewer luxuries, but add a few car camping trips and you’ll see the fun in bringing in the nice-to-haves to your outdoors gear repertoire.

With camping gear, you can almost always find a good sale on any individual item during the year so stay patient and keep an eye out. Plenty of sites offer one-off discounts for first time buyers or have pretty reliably timed, wide-ranging seasonal sales so if you’re smart about your purchase you can get it at a discount.

One note to hammer home: when buying gear, one of the main things to consider is whether you anticipate getting bit by the backpacking bug. It’s not always easy to tell ahead of time, but if you do think you’ll end up using your gear on backpacking trips, you’ll want to account pretty heavily for the weight of any new gear. You can certainly upgrade later too, but it’s always good to future-proof when you can. If you’re just planning to hop into the car and hit up a nice drive-in campsite, you have a lot less to worry about in terms of size and weight restrictions which makes things much simpler.

These are all things I bought with my own money or am planning to buy at some point, so no sponsored suggestions here. That said, this article contains links to affiliate partners where available. When you buy through these links, TechCrunch may earn an affiliate commission.

Mpowerd Luci Solar String Lights

Image: MPOWERD

When it comes to camping, light can really expand your options for what you can do at night. I’ve been one to rely on campfire light during the evenings but with campfire bans hitting plenty of campsites in California this season, I upped my lighting game this year.

These string lights come in a nicely designed package and are perfect for adding some ambiance and solidly bright light to your campsite. They’re a bit of a luxury but they provide a good bit of light on multiple brightness settings. The company now also makes a version with colored lights if you want to get festive.

They lights do suck up a decent amount of power so they may only last you a night or two on a single charge depending on your usage, but the handy built-in solar charger can help there. Truthfully I’ve always had mixed success with relying on solar charging, so I might save this one for the car-camping trips where you have easy access to somewhere to charge the light with its integrated USB cable.

Price: $28 from Amazon

Sea to Summit dry sacks

Image: Sea to Summit

Though mobile gear is increasingly gaining waterproof IP ratings, especially when it comes to higher-end camera gear, not everything is friendly with moisture. One purchase I made this year that felt like a no-brainer was a set of small dry-bags. They are certainly a more expensive option than the humble zip-locks which I’ve been using for years, but while a wet roll of toilet paper or map can be a bummer, a wet mirrorless camera is a disaster.

Dry bags keep the wetness out. They’re also just a nice and functional organizational tool to keep all of your tech gear together and protected from the elements. Earlier this summer I bought this small 3-pack which is sized perfectly for the tech gear I tend to bring along. Later I bought a much larger 35L sack to house gear like my sleeping bag and clothes that I really need to keep dry while hiking through river beds or while it’s raining.

I opted for a set of Sea to Summit bags which seem to be the gold standard, but if you search for dry bags on the web, you’ll come across plenty of sets with some good ratings. Just be sure to peruse the reviews to get a sense of their durability which is the only thing that matters.

Price: $43 from REI

Garmin inReach Explorer+

Image: Garmin

I have two big items on my next wish list for backpacking gear upgrades to make before next season. One is a bear can to stuff my food and toiletries into when backpacking through Tahoe’s Desolation Wilderness as I soon hope to. The other is the inReach Explorer+. I’ve relied on friends with handheld GPS units in the past but Garmin’s option, which seems to be quite popular, bundles a GPS unit with a phone that operates on a satellite network.

You need a plan for the device to use the satellite network, which you can activate on a monthly basis whenever you need it. That network is good for a couple things: sending off text messages with GPS points to friends and relatives so they can see your progress and know you’re safe, while also being able to reach the outside world if you find yourself in an emergency and might need to be rescued. While these evacuations are assuredly going to be a pricey affair, it’s never worth gambling with your life or opting for a backup plan that you might not make it back from.

Garmin also sells a mini version of the inReach that eschews GPS navigation and a decent screen size for a much smaller footprint, more of a “don’t use it unless you absolutely need to” version. I will also quickly note that satellite phones are actually illegal to have on you in some countries so be sure to check out whether that’s the case before you pack one in your bag.

Price: $450 from Garmin

Helinox Chair Zero

Image: Helinox

These chairs are probably some of the best things I’ve ever purchased. Oddly, I actually haven’t used them that much while backpacking, which seems to be the intent of the product given how light they are at just over 1 pound, but they’ve been amazing for tossing in a tote bag for a day at the park.

I’ve gotten so much use of them partially because I live in a city and don’t own a car. If I had a car, I might just opt for a larger and cheaper folding chair that I could keep in the trunk. That said, what’s great about these is that they are light enough to bring backpacking — though they are definitely still a luxury item to bring along. My one complaint is that these chairs don’t play so nicely with the sand or mud so you want to find a fairly hard surface to set them up on if you want to feel fully secure placing your full weight on these tiny chairs.

I got these for about half-off when I bought them, but there are definitely cheaper options than those from Helinox if you can’t find a deal and don’t mind an extra pound of weight or so. I have friends who are particularly big fans of the REI versions.

Side note: this year I also found a deal on a lightweight Helinox hard-top table which has been great for playing board games on or setting up a cook station.

Price: $150 from Amazon

A giant duffel bag

Image: REI

One of the big issues with amassing a collection of camping gear is storing it all during those non-camping months. The best solution for this is a big ‘ole duffel bag. They’re great to store your gear in, and it’s so easy to just toss a duffel in your car when you’re ready to go camping and not have to deal with a dozen little trips to the car and back.

I ended up buying a 90-liter REI bag during a sale, but I’ve seen great things on the bags from North Face and Patagonia as well. This size fits a ton and has the added advantage of being just about the maximum size for a standard checked bag on a flight, anything larger will require an oversized baggage fee. These bags all go on sale in pretty often so I wouldn’t rush into buying especially if you don’t need one ASAP.

Price: Varies; the one above is $140 right now from REI

Travel chess set

Image: Kidami

Cards are great, but sometimes you want to spice up your options for games. For those of you who have just binged through Queen’s Gambit, I’ll recommend searching for a good travel chess board.

I ended up going for this very random travel chess set on Amazon because the magnetic board made me feel confident I wouldn’t lose all of the pieces immediately. It’s not the most high quality-feeling but the price was right and it strikes a good balance. There are definitely plenty of options that are more robust or more lightweight.

Price: $18 from Amazon

Nalgene Mini Bottles

Image: REI

One thing every camper should have in their gear collection is a bunch of different sized mini Nalgene bottles. These things are great and can hold your soap, shampoo, oil, sauces, booze and other liquids securely and (as long as you’re religious about tightening the screw-top bottles) can ensure that you won’t have any accidental spills.

I use these aggressively for meal planning and measure out the various quantities of a liquid or sauce I’ll need for a given meal and toss them inside a bigger plastic bag with all of the ingredients. As such, I have a few sizes ranging from an ounce to 4 ounces. That’s not a use case everyone needs when you’re car-camping and don’t have the luxury of measuring everything ahead of time, but they’re also awesome for toiletry kits and I use the 2 ounce bottle for shampoo and soap when I’m flying and want to bring my own stuff.

One complaint is that these will hold onto the smell of some more pungent liquids even after you wash them so keep that in mind and maybe be careful to separate the ones you’re storing your toiletries in from the ones holding sauces.

Price: $2 from REI

Source: Tech Crunch