Month: January 2021

Where can new founders and budding entrepreneurs turn for expert advice to navigate the formative phases of building a startup? Head to TechCrunch Early Stage — a two-day virtual bootcamp that gives early founders (pre-seed through Series A) access to the leading experts across a range of essential entrepreneurial skills.

We’re talking dozens of workshops addressing operations, fundraising, pitch deck pointers, term sheet tips, product-market fit, brand building, growth marketing, recruiting, taming your tech stack and a lot more.

That’s a lot of ground to cover, amirite? That’s exactly why we’re hosting two Early Stage events this year. Each one offers different content, a separate slate of speakers and unique perspectives. Both feature highly interactive Q&As with the experts. Get answers to all your burning questions!

Note: In a hurry? Scroll down to the bottom (or click here) to get the 411 on pass types, early-bird pricing and deadlines.

The first TC-ES, on April 1 & 2, covers topics ranging from fundraising and operations to product lifecycle and recruiting — for starters. The second, on July 8 & 9, spans marketplace positioning, growth marketing, content development and even more on fundraising.

Sure, you can go to a single Early Stage event, but savvy startuppers (that’s you, right?) will sign on for a double dose of knowledge and attend both. That’s not just marketing talk — the benefits are real.

Buy a dual-event pass (for a tidy discount, by the way), and you’ll not only learn more, but you’ll also have more time to absorb and implement critical advice that can lead to your success. Seriously, which topics and tips can you afford to miss? Don’t let the FOMO haunt you.

You’ll also have plenty of opportunity to connect and network with other early founders, later-stage founders and other smart members of the startup — oh, what’s the word? — community. Build your contacts, find indispensable support and mentorship. Remember, we all go further together.

We introduced TC Early Stage last year to rave reviews — like this one from Chloe Leaaetoa, founder of Socicraft.

“You learn from industry leaders and seasoned founders — people who’ve already been there and done that. They were genuine and honest about industry expectations. Plus, they shared first-hand accounts, which made them more relatable.”

And this one from Ashley Barrington, founder of MarketPearl.

“I recommend going to Early Stage. The virtual aspect helps in terms of scheduling, it offers community-building through networking, and it gives early stage founders a framework for navigating the startup ecosystem. This is the stage where founders need more support, especially if they haven’t done this before.”

Go all-in and attend TC Early Stage 2021 in April and again in July. Increase your knowledge, sharpen your skills, avoid pitfalls and expand your network. Those are mighty big benefits, and you deserve every one of them.

Is your company interested in sponsoring or exhibiting at Early Stage 2021 – Operations & Fundraising? Contact our sponsorship sales team by filling out this form.

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Source: Tech Crunch

As a 20-year CIO and advisor to multiple startups, I sat on many customer advisory boards (CABs) and saw how they were formed. Some companies have highly functioning CABs, others merely serve as feedback loops. Any startup striving to connect directly with their customers would benefit from establishing one.

Here are some considerations to make certain your customer advisory board is a success.

Why CABs matter

For those unfamiliar, a customer advisory board is a group of customers who come together to share their experiences, insights and advice with an organization. First and foremost, the CAB functions to recognize and include the voice of the customer, an essential part of your company’s journey since customers interact closer than anyone with your product or service.

It’s best to designate early adopters to be on the board — those who took a chance on you and have been on the frontlines as your company evolved — as well as some newer customers.

While establishing this group signals appreciation and respect for your customers, it also provides an opportunity for you to formalize and structure the feedback you are requesting from them. You can seek validation for product ideas or guidance on roadmap development, test out marketing messaging and even tap into market intelligence.

The greatest benefit of a CAB, however, is the creation of champions for your brand. These loyal partners will ultimately offer testimonials, references and referrals. Key to this partnership is a shared sense of playing a small part in building the future of your company.

Assembling your CAB superteam

The best route to assembling your CAB is to start with a very small group and expand slowly. There’s quite a bit of nuance in the selection of who to include. Do you go after the executive who sponsored you, the one who saw a vision and thought your solution would fit?

Perhaps. But that individual may not be using your product every day, be involved deeply in its operational aspects and/or have their finger on the pulse of the end-user’s experience.

Source: Tech Crunch

In June of 1999, Sequoia Capital and Kleiner Perkins invested $25 million into an early-stage company developing a new search engine called Google, paving the way for a revolution in how knowledge online was organized and shared.

Now, Sequoia Capital is placing another bet on a different kind of search engine, one for physical objects in three dimensions, just as the introduction of three-dimensional sensing technologies on consumer phones are poised to create a revolution in spatial computing.

At least, that’s the bet that Sequoia Capital’s Shaun Maguire is making on the Cincinnati, Ohio-based startup Physna.

Maguire and Sequoia are leading a $20 million bet into the company alongside Drive Capital, the Columbus, Ohio-based venture firm founded by two former Sequoia partners, Mark Kvamme and Chris Olsen.

“There’s been this open problem in mathematics, which is how you do three-dimensional search. How do you define a metric that gives you other similar three-dimensional objects. This has a long history in mathematics,” Maguire said. “When I first met [Physna founder] Paul Powers, he had already come up with a wildly novel distance metric to compare different three-dimensional objects. If you have one distance metric, you can find other objects that are a distance away. His thinking underlying that is so unbelievably creative. If I were to put it in the language of modern mathematics… it just involves a lot of really advanced ideas that actually also works.”

Powers’ idea — and Physna’s technology — was a long time coming.

A lawyer by training and an entrepreneur at heart, Powers came to the problem of three-dimensional search through his old day job as an intellectual property lawyer.

Powers chose IP law because he thought it was the most interesting way to operate at the intersection of technology and law — and would provide good grounding for whatever company the serial entrepreneur would eventually launch next. While practicing, Powers hit upon a big problem, while some intellectual property theft around software and services was easy to catch, it was harder to identify when actual products or parts were being stolen as trade secrets. “We were always able to find 2D intellectual property theft,” Powers said, but catching IP theft in three dimensions was elusive.”

From its launch in 2015 through 2019, Powers worked with co-founder and chief technology officer Glenn Warner Jr. on developing the product, which was initially intended to protect product designs from theft. Tragically, just as the company was getting ready to unveil its transformation into the three-dimensional search engine it had become, Warner died.

Powers soldiered on, rebuilding the company and its executive team with the help of Dennis DeMeyere, who joined the company in 2020 after a stint in Google’s office of the chief technology officer and technical director for Google Cloud.

“When I moved, I jumped on a plane with two checked bags and moved into a hotel, until I could rent a fully furnished home,” DeMeyere told Protocol last year.

Other heavy hitters were also drawn to the Cincinnati-based company thanks in no small part to Olsen and Kvamme’s Silicon Valley connections. They include GitHub’s chief technology officer, Jason Warner, who has a seat on the company’s board of directors alongside Drive Capital’s co-founder Kvamme, who serves as the chairman.

In Physna, Kvamme, Maguire and Warner see a combination of GitHub and Google — especially after the launch last year of the company’s consumer-facing site, Thangs.

That site allows users to search for three-dimensional objects by a description or by uploading a model or image. As Mike Murphy at Protocol noted, it’s a bit like Thingiverse, Yeggi or other sites used by 3D-printing hobbyists. What the site can also do is show users the collaborative history of each model and the model’s component parts — if it involves different objects.

Hence the GitHub and Google combination. And users can set up profiles to store their own models or collaborate and comment on public models.

What caught Maguire’s eye about the company was the way users were gravitating to the free site. “There were tens of thousands of people using it every day,” he said. It’s a replica of the way many successful companies try a freemium or professional consumer hybrid approach to selling products. “They have a free version and people are using it all the time and loving it. That is a foundation that they can build from,” said Maguire.

And Maguire thinks that the spatial computing wave is coming sooner than anyone may realize. “The new iPhone has lidar on it… This is the first consumer device that comes shipped with a 3D scanner with lidar and I think three dimensional is about to explode.”

Eventually, Physna could be a technology hub where users can scan three-dimensional objects into their phones and have a representational model for reproduction either as a virtual object or as something that can be converted into a file for 3D printing.

Right now, hundreds of businesses have approached the company with different requests for how to apply its technology, according to Powers.

“One new feature will allow you to take a picture of something and not only show you what that is or where it goes. Even if that is into a part of the assembly. We shatter a vase and with the vase shards we can show you how the pieces fit back together,” Powers said.

Typical contracts for the company’s software range from $25,000 to $50,000 for enterprise customers, but the software that powers Physna’s product is more than just a single application, according to Powers.

“We’re not just a product. We’re a fundamental technology,” said Powers. “There is a gap between the physical and the digital.”

For Sequoia and Drive Capital, Physna’s software is the technology to bridge that gap.

Source: Tech Crunch

Facebook’s “Supreme Court” is now accepting comments on one of its earliest and likely most consequential cases. The Facebook Oversight Board announced Friday that it would begin accepting public feedback on Facebook’s suspension of former President Trump.

Mark Zuckerberg announced Trump’s suspension on January 7, after the then-president of the United States incited his followers to riot at the nation’s Capitol, an event that resulted in a number of deaths and imperiled the peaceful transition of power.

In a post calling for feedback, the Oversight Board describes the two posts that led to Trump’s suspension. One is a version of the video the president shared the day of the Capitol riot in which he sympathizes with rioters and validates their claim that the “election was stolen from us.” In the second post, Trump reiterates those views, falsely bemoaning a “sacred landslide election victory” that was “unceremoniously & viciously stripped away.”

The board says the point of the public comment process is to incorporate “diverse perspectives” from third parties who wish to share research that might inform their decisions, though it seems a lot more likely the board will wind up with a tidal wave of subjective and probably not particularly useful political takes. Nonetheless, the comment process will be open for 10 days and comments will be collected in an appendix for each case. The board will issue a decision on Trump’s Facebook fate within 90 days of January 21, though the verdict could come sooner.

The Oversight Board specifically invites public comments that consider:

Whether Facebook’s decision to suspend President Trump’s accounts for an indefinite period complied with the company’s responsibilities to respect freedom of expression and human rights, if alternative measures should have been taken, and what measures should be taken for these accounts going forward.

How Facebook should assess off-Facebook context in enforcing its Community Standards, particularly where Facebook seeks to determine whether content may incite violence.

How Facebook should treat the expression of political candidates, office holders, and former office holders, considering their varying positions of power, the importance of political opposition, and the public’s right to information.

The accessibility of Facebook’s rules for account-level enforcement (e.g. disabling accounts or account functions) and appeals against that enforcement.

Considerations for the consistent global enforcement of Facebook’s content policies against political leaders, whether at the content-level (e.g. content removal) or account-level (e.g. disabling account functions), including the relevance of Facebook’s “newsworthiness” exemption and Facebook’s human rights responsibilities.

The Oversight Board’s post gets very granular on the Trump suspension, critiquing Facebook for lack of specificity when the company didn’t state exactly which part of its community standards were violated. Between this and the five recent cases, the board appears to view its role as a technical one, in which it examines each case against Facebook’s existing ruleset and then makes recommendations for future policy rather than working backward from its own broader recommendations.

The Facebook Oversight Board announced its first cluster of decisions this week, overturning the company’s own choice to remove potentially objectionable content in four of five cases. None of those cases pertained to content relevant to Trump’s account suspension, but they prove that the Oversight Board isn’t afraid to go against the company’s own thinking — at least when it comes to what gets taken down.

Source: Tech Crunch

2021 is going to be another glorious year for e-commerce.

It is that time of the year when most of us are looking back at the “total addressable market” estimates to plan for specific campaigns. Unlike us, if you had your 2021 kick off in Q3, bless your soul. You are an enlightened being.

For the rest of you, for whom e-commerce is a strategic market, I have a question — have you built your total addressable market (TAM) and serviceable addressable market (SAM) estimates for 2021 considering how things evolved in 2020?

For most of us, research is a mind-numbing, repetitive exercise of clicking through links on Google until they all turn purple — at which point we start seeking the simplest possible explanation. For e-commerce, addressable market estimates come in the form of headlines from platforms like Shopify. The company quotes a merchant count number in its earnings calls and that becomes the basis for guesstimating the current TAM of e-commerce companies.

The other, rather simplistic approach is to look at the user-base count from several databases that publish tech platform-level user stats.

In reality, the simplest answer is not the right answer.

Mind the gap

Let’s take e-commerce shopping cart installations. Shopify, Magento, WooCommerce, BigCommerce and others publish installation numbers that run into millions.

Here is the dichotomy that should frame your TAM discussions.

E-commerce is long-tail heavy. Yes, there are millions of merchants, but e-commerce revenue is a fat-tail phenomenon — meaning, a disproportionate amount of e-commerce revenue comes from a few tens of thousands of companies.

PipeCandy publishes bottom-up TAM estimates with detailed data cuts by technology, logistics and payment system adoptions by firms across revenue tiers across all major markets. One of the common misconceptions we see in how firms misinterpret TAM estimates is that they equate revenue to spend potential.

Source: Tech Crunch

Coinbase plans to go public by way of a direct listing, the company announced in a blog post today.

The cryptocurrency exchange was founded in 2012 and allows users to buy and trade decentralized tokens like bitcoin and ethereum. The company has raised over $540 million in funding as a private company.

Last month, the company shared that it had confidentially filed an S-1 with the SEC, we still haven’t seen those financials but we now know that they have opted out of the traditional IPO process. Direct listings have been slowly gaining popularity and given some of the most recent first day pops from tech IPOs, it’s unsurprising to see a company like Coinbase which is likely flush with cash thanks to recent gains in the cryptocurrency market opt for a path to public markets that involves less fuss.

Direct listings allow companies to skip much of the heavy-lifting of the IPO process by stripping the public debut of a release of new shares, instead giving existing shareholders like VCs and employees a path to just liquidate their equity in the company.

This has been one of the friendliest IPO windows for tech stocks ever with investors racing to back technology companies that are primed for what’s been called the “digital transformation.” Coinbase is in a pretty favorable spot with the public markets and cryptocurrency markets aligned in frothiness. Bitcoin is currently trading near $33,000 just weeks after reaching on all-time-high.

Source: Tech Crunch

According to a new report in the WSJ, WeWork, the co-working juggernaut that saw its attempt at a public offering blow up in spectacular fashion in the fall of 2019, might become a publicly traded company by merging with a blank-check company.

Specifically, says the WSJ, the New York-based outfit has been “weighing offers from a SPAC affiliated with Bow Capital Management LLC and at least one other unidentified acquisition vehicle for several weeks” in a deal that could value WeWork at around $10 billion.

Asked for more information, a spokesperson for the company sent us the same statement that was sent to the Journal: “Over the past year, WeWork has remained focused on executing our plans for achieving profitability. Our significant progress combined with the increased market demand for flexible space, shows positive signs for our business. We will continue to explore opportunities that help us move closer toward our goals.”

The company is also contemplating inbound interest for more private funding, according to a person close to the company.

According to the WeWork spokesperson, WeWork has more than $3.6 billion of cash and unfunded cash commitments, including more than $875 million in available cash and it believes this is “more than sufficient liquidity to weather a prolonged COVID environment.”

WeWork’s CEO Sandeep Mathrani said last fall that WeWork was on track to turn profitable some time this year and that after it hit “profitable growth first,” it would “revisit the IPO plan.” Speaking to reporters in India over a Zoom call from New York, he added, as reported by Bloomberg, that as of October, WeWork was “100% done with rightsizing” after parting ways with 8,000 employees, or roughly one-third of its headcount.

Mathrani stepped into the role of CEO in February of last year, following the ouster of WeWork co-founder Adam Neumann from the company months earlier on the heels of the company’s pulled IPO.

Mathrani previously spent 1.5 years as the CEO of Brookfield Properties’ retail group and as a vice chairman of Brookfield Properties. Before joining the Chicago-based company, he spent eight years as the CEO of General Growth Properties. It was one of the largest mall operators in the U.S. until Brookfield acquired it for $9.25 billion in cash in 2018.

Mathrani also spent eight years as an executive vice president with the publicly traded real estate company Vornado Realty Trust.

Bow Capital Management is run by Vivek Ranadive, the founder of Tibco Software; in July, it registered plans for a $350 million blank-check company that would focus on acquiring a business in the technology, media and telecommunications industries.

Though there’s been much discussion over the years over whether WeWork is a tech company or much more of a pure real estate play, the company has long insisted it is the former.

This story is developing …

Source: Tech Crunch

Cryptocurrencies, more so than most other things, are only valuable because of a shared agreement that they are valuable. Their value is a product of digital handshakes over millions of transactions firming up that consensus. For bitcoin, the trust that it has worth has turned more valuable in the past several months; it’s been on a tear.

The (very bizarre) question is whether a new avenue of applying blind trust by brigading trashcan-level stocks and turning them into memes could threaten the appeal of cryptocurrencies for retail investors.

Over the past several days, we’ve seen stocks ranging from GameStop, Blockbuster and AMC make unjustifiable gains as a result of Reddit users in the r/WallStreetBets subreddit triggering a stampede toward stocks being heavily shorted by institutional investors. That in turn has led to a short squeeze troubling hedge funds, causing the price of a stock worth around $5 for the majority of 2020 to swell well above $300 today. In some ways it’s just an Occupy Wall Street protest being held on Robinhood; in other ways it’s a complete rejection of efficient markets and a reinvention of institutional trust.

Bitcoin holds fundamental differences from publicly traded stocks, many of which might matter an awful lot to those betting on the coin as a currency of the future. But to retail investors who aren’t hardcore proponents, I’d imagine FOMO was one of the most intriguing pulls into the cryptocurrency space. But if Bitcoin’s purpose for the time being is merely a “store of value,” I think there’s a world where individual investors might be evolving their interests elsewhere.

Bitcoin and other cryptocurrencies haven’t seen notable price movement in recent days  — Bitcoin is down around 6% in the past 24 hours, a hiccup as far as crypto moves go — but after a few weeks hovering well above $30,000 and peeking above $40,000, the currency seems poised to dip below the $30,000 range soon unless its trend reverses course.

All that said, Bitcoin is certainly an entity of a different scale than all of these meme stocks bundled together with a market cap above $560 billion and a 24-hour trading volume of $56 billion. Bitcoin has seen stratospheric growth over the past few months so barring an outsized crash, it’s perhaps unlikely that retail investors are going to fully abandon it in favor of buying up crusty old shares of Blockbuster stock. That said …

It’s cheaper to trade these meme stocks and easier for retail investors to get leverage via options. In short, for investors looking to have a good time or shoot the moon, meme stocks are a more fun place to be than crypto is.

The main thing to consider is what happens if GameStop, for no reason at all, becomes a long-term store of value? When investors collectively begin placing blind trust in more financial assets for the long haul, does that devalue blind trust itself and the mammoth entities that had more of a monopoly on it? Most investors aren’t expecting this to happen, but stocks like Tesla are beginning to live comfortably at ridiculous premiums that analysts can’t understand. Tesla and GameStop are very different beasts, but if anything I think institutions have a better grasp of GameStop’s rise.

The foil to all of this is whether this pandemonium births some regulatory backlash, a possibility that of course does not exist in quite the same way for cryptocurrencies from a central governance standpoint. TD Ameritrade and Schwab are already limiting trades of some of these meme stocks today and I think there is certainly a universe in which the SEC aims to take a pot shot at this saga by means of promoting market sanity and I am much more confident that there’s a world where Reddit is pushed to at least temporarily ban r/WallStreetBets for some unclear reason.

Source: Tech Crunch