Month: March 2021

On Wednesday, a coalition of a dozen state attorneys general called on Facebook and Twitter to step up their enforcement of their community guidelines to curtail the spread of Covid-19 vaccine misinformation on their platforms. Their letter specifically identified 12 “anti-vaxxer” accounts that were responsible for a sizable 65% of public anti-vaccine content on Facebook, Instagram, and Twitter. In today’s House hearing on disinformation and extremism, Twitter and Facebook’s CEOs, along with Google CEO Sundar Pichai, were directly asked if they would be willing to take down these 12 accounts.

Their answers were a mixed bag and a demonstration of social media execs’ unwillingness to take a simple action — taking down a handful of disinformation sources — that could have a significant impact on Americans’ willingness to get vaccinated to end the pandemic.

Over the course of the hearing, Congressman Mike Doyle (D-PA) pointed out that nearly 550,000 Americans had lost their lives to Covid-19, and an independent study found that Facebook users in five countries, including the U.S., had been exposed to Covid-19 disinformation 3.8 billion times. Now that the U.S. is rushing to get shots into people’s arms to reduce the spread of the deadly virus, it’s still having to deal with social media sites continuing to promote and recommend content leading to vaccine hesitancy.

“My staff found content on YouTube telling people not to get vaccines, and was recommended to similar videos. The same was true on Instagram, where it was not only easy to find vaccine disinformation, but platforms recommended similar posts,” said Doyle. “The same thing happened on Facebook, except they also had anti-vax groups to suggest, as well. And Twitter was no different.”

“You can take this content down,” Doyle said. “You can reduce the vision. You can fix this, but you choose not to,” he told the CEOs.

He later directly asked the CEOs if they would be willing to take down the 12 accounts the attorneys general had identified in their letter as the so-called “super-spreaders” of misinformation.

The coalition had written that both Facebook and Twitter had yet to remove the accounts of 12 prominent anti-vaxxers, who repeatedly violated the company’s terms of service. These users’ accounts, associated organizations, groups and websites, were responsible for 65% of public anti-vaccine content across Facebook, Twitter and Instagram, as of March 10, the letter noted.

In response to the question of taking down these dozen accounts, Zuckerberg hedged. He said that Facebook’s team would have to first look at the exact examples being referenced, leading to Doyle cutting him off.

Pichai tried to start his answer by noting that YouTube had removed over 850,000 videos with misleading coronavirus information, but was also cut off as Doyle re-asked the question as to whether or not YouTube would take down the accounts of the 12 super-spreaders.

“We have policies to take down content,” Pichai said, but added that “some of the content is allowed, if it’s people’s personal experiences.”

When Twitter CEO Jack Dorsey was posed the same question, he said, “yes, we remove everything against our policy” — a better answer, but als. one that’s not necessarily a confirmation that Twitter would, indeed, remove those specific 12 accounts.

Dorsey, earlier in the hearing, had also spoken broadly about Twitter’s long-term vision for dealing with misinformation, “Bluesky,” its vision for a decentralized future. He explained how Bluesky would leverage a base, open source protocol that’s shared, allowing for “increased innovation around business models, recommendation algorithms, and moderation controls which are placed in the hands of individuals, rather than private companies,” Dorsey said. The answer indicated Twitter’s vision for moderation was ultimately about handing off the responsibility to others — something Facebook has also done in recent months with its Oversight Committee, an external body that will weigh in on the hardest moderation decisions.

These moves indicate that social networks have decided for themselves that they’re not capable of handling the responsibilities of content moderation on their own. But whether the U.S. government will actually step in to regulate them as result still remains to be seen.

Source: Tech Crunch

In an interview with Reuters six days after the attack on the U.S. Capitol, Facebook Chief Operating Officer Sheryl Sandberg infamously downplayed her company’s role in the day’s horrific events, which left five people dead.

“I think these events were largely organized on platforms that don’t have our abilities to stop hate and don’t have our standards and don’t have our transparency,” Sandberg said at the time, touting Facebook’s very recent and far from thorough efforts to remove QAnon, conspiracies and violent militias.

At Thursday’s hearing with the House Energy and Commerce committee, lawmakers circled back to Sandberg’s denial, but Facebook still didn’t have a good answer.

In his opening statements, Zuckerberg said that Facebook “did our part” to protect the U.S. election and placed the blame on the actions of former President Donald Trump.

“I believe that the former president should be responsible for his words and that the people who broke the law should be responsible for their actions,” Zuckerberg wrote.

Asked if Facebook “bears some responsibility” for spreading election misinformation and the Stop the Steal movement, Zuckerberg deflected, declining to answer directly.

“How is it possible for you not to at least admit that Facebook played a leading role in the recruitment, planning and execution of the attack on the capitol?” Rep. Mike Doyle (D-PA) asked.

Pressed again, Zuckerberg passed the buck.

“I think the responsibility lies with the people who took the actions to break the law and do the insurrection,” he said. “Secondarily, also with the people who spread that content, including the president but others as well, with repeated rhetoric over time, saying that the election was rigged and encouraging people to organize, I think that those people bear the primary responsibility as well.”

Doyle wasn’t having it, arguing that Facebook “supercharged” the dangerous rhetoric, which spread like wildfire on the platform before the January 6 attack. As Doyle pointed out, the FBI showed that insurrectionists used Facebook during the “recruitment, planning and execution” stages of the attack. 

Rep. Jan Schakowsky (D-IL) brought up the Sandberg interview specifically, 

“My question for you is, will you admit today that Facebook groups in particular played a role in fomenting the extremism that we saw, and that led to the Capitol siege?” Schakowsky asked.

“The comment that Sheryl made, what I believe that we were trying to say and what I stand behind is what was widely reported at the time … ” Zuckerberg began, before Schakowsky told him to get to the point.

“Certainly there was content on our services,” Zuckerberg said vaguely. “And from that perspective, I think that there’s further work we need to do to make our services and moderation more effective.”

Beyond the fact that the Stop the Steal movement swelled to enormous numbers in Facebook groups, insurrectionist leaders relied on Facebook to communicate and hunt for lawmakers on the day of the attack.

That shouldn’t have come as a surprise to the company: The militia members who hatched a plot to capture or kill Michigan Governor Gretchen Whitmer last year also relied on the platform to organize and communicate, according to FBI affidavits. 

Source: Tech Crunch

Electric vehicle manufacturers are pushing back against a decision to delay penalty increases for automakers who fail to meet fuel efficiency standards.

A lobbying group representing legacy automakers — many of whom are now making substantial investments in zero-emissions vehicles — said the increase would have a significant economic impact during a time when the industry is facing mass disruption from the COVID pandemic. But new EV entrants say the penalty mechanism is a powerful performance incentive to decrease tailpipe emissions and encourage investment in lower- or zero-emissions technology.  

The decision, issued in January by the National Highway Traffic Safety Administration (NHTSA), postpones imposing a penalty increase from the beginning of model year 2019 to model year 2022. Tesla is petitioning the Second Circuit U.S. Court of Appeals to review the ruling, saying that the delay “inflicts ongoing, irreparable injury” on the company and creates an “uneven playing field” by reducing the consequences of nonadherence.

The Corporate Average Fuel Economy (CAFE) penalty has been increased just once — from $5 to $5.50 for every 0.1 mile per gallon that doesn’t meet the standard — since its instatement in 1975. Congress acted to rectify the effects of inflation on the penalty by raising it to $14 in 2015, but NHTSA and the courts have ping-ponged about the increase ever since. A decision from the Second Circuit last August seemed to settle the issue in favor of instating the higher penalty starting with model year 2019, but automakers last October successfully petitioned that the increase be delayed.

The CAFE penalty can be a huge boon for zero emissions automakers, who receive credits that they can then sell to other OEMs who fail to meet the fuel efficiency target. In a recent report to regulators, Tesla said it earned $1.58 billion from selling regulatory credits to other automakers in 2020, up from $594 million in 2019. Delaying the increase harms companies that have made economic decisions on the basis of an increase to the credit, Tesla said.  

EV startups Rivian and Lucid Motors told TechCrunch they also oppose any delay to increasing the CAFE penalty.

“The credit market is very beneficial for the entire EV industry, so every company that is looking to start building EVs, either as a startup or the existing manufacturers, when they build EVs it’s to their benefit to have robust credits,” Kevin Vincent, Lucid Motor’s Associate General Counsel, told TechCrunch. “A lot of existing manufacturers end up selling credits themselves, so it benefits the forward-thinking companies that are improving fuel economy.”

James Chen, Rivian’s VP of Public Policy and Chief Regulatory Counsel, said in a statement to TechCrunch that any rollback of the CAFE or other emission standard “only sets the U.S. backward in terms of emission reductions ([greenhouse gas] and criteria pollutants), increased fuel efficiency, reduction of dependence on foreign oil, technology leadership and EV proliferation.” He added that the company “strongly supports efforts to bolster EV adoption that includes more stringent emission standards and higher penalties for failure to meet those standards.”

NHTSA postponed the increase on the grounds that the penalty should not be retroactively applied to model years that had already been manufactured. As manufacturers have no way to increase the fuel economy level in these vehicles, “it would be inappropriate to apply the adjustment to model years that could have no deterrence effect and promote no additional compliance with the law,” NHTSA said.

Automakers, in a petition filed by the lobbying group Alliance for Automotive Innovation and in supplemental comments, also cited economic hardship due to the COVID-19 pandemic. Mercedes-Benz told NHTSA that the pandemic caused disruptions to its supply chain, workforce and production.

“We believe that retroactively applying an increased penalty rate in such a tenuous financial climate is unconscionable and inconsistent with this administration’s efforts to promote regulatory relief in light of the economic consequences of COVID-19,” the automaker said.

Tesla maintained in its court filing that relying on the COVID pandemic “falls flat” in the absence of specific evidence as to why it warrants the delay.  

Attorney generals from 16 states, including California and New York, as well as environmental groups Sierra Club and the Natural Resources Defense Council, have also objected to the delay.

The NHTSA decision was issued in docket no. NHTSA-2021-0001. Tesla filed with the second circuit under case no. 21-593.

Source: Tech Crunch

The pandemic made remote work and on-demand delivery normal far faster than anyone expected. Today, as the world beings to emerge from the pandemic, location doesn’t matter like it did a year ago.

Modern society produced superstar cities filled with skyscraper office and residential buildings. Now, the populations that once thrived in these urban centers are deciding how to repurpose them for a post-pandemic world.

I caught up with ten top investors who focus on real estate property technology to get a sense of how they’re betting on the future.

They are optimistic overall, because the typically glacial real estate industry now sees proptech as essential to its future. However, they are the most unsure about the office sector, at least as we knew the concept before the pandemic.

They expect remote work to be part of the future in a significant way and foresee ongoing high housing demand in the suburbs and smaller cities. They are especially positive about fintech and SaaS products focused on areas like single-family home sales and rentals. Many are continuing to invest in big cities, but around alternative housing (co-living, accessory dwelling units) and climate-related concepts.

Most surprisingly, some investors are actually excited about physical retail. I examined the latest evidence and found myself agreeing. As shocking as it sounds, we could be entering a much better era for small, local businesses. Details farther down.

(And before we dig in below, please note that Extra Crunch subscribers can separately read the following people responding fully in their own words, with lots of great information I wasn’t able to explore below.)

When the office is more of a luxury

The pandemic combined with existing trends has made office renters “more akin to a consumer of a luxury product,” explains Clelia Warburg Peters, a venture partner at Bain Capital Ventures and long-time proptech investor and real estate operator.

Landlords who have “largely been in a position of power since the 1950s” now have to put the customer first, she says. The “best landlords will recognize that they are going to be under pressure to shift from simply providing a physical space, to helping provide tenants with a multichannel work experience.”

This includes tangible additional services like software and hardware for managing employees as they travel between various office locations. But the market today also dictates a new attitude. “These assets will need to be provided in the context of a much more human relationship, focusing on serving the needs of tenants,” she says. “As lease terms inevitably shorten, tenants will need to be courted and supported in a much more active way than they have been in the past.”

The changes in office space may be more favorable to the supply side in suburban areas.

“Companies are going to have to offer employees space in an urban headquarters,” Zach Aarons of Metaprop tells me. But many will also want to offer ”some sort of office alternative in the suburbs so the worker can leave home sometimes but not have to take a one-hour train ride to get to the office when needed.”

“If we were still purchasing hard real estate assets like many of us on the MetaProp team used to do in previous careers,” he added, “we would be looking aggressively to purchase suburban office inventory.”

Most people thought that remote work was here for good and would impact the nature of office space in the future.

Adam Demuyakor, co-founder and managing director of Wilshire Lane Partners, is generally bullish on big cities, but he notes that startups themselves are already untethering from specific places. This is a key leading indicator, in TechCrunch’s opinion.

“Something that has been interesting to watch over the past year is how startups themselves have begun to evolve due to newfound geographic flexibility from the pandemic,” he observes. “Previously, startups (especially real-estate-related startups) felt pressure to be ‘headquartered’ near where their customers, prospective capital sources and pools of talent were located. However, we’ve seen this change over the past few months.”

In fact, a recent report by my former colleague Kim-Mai Cutler, now a partner at Initialized Capital, highlights these trends in a regular survey of its portfolio companies. When the pandemic began, the Bay Area was still the number one place that founders said they’d start a company. Today, remote-first is in first place. Meanwhile, the portfolio companies are either going toward remote-first or a hub-and-spoke model of a smaller headquarters and more far-flung offices. Those who maintain some sort of office say they will require significantly less than five days a week. Nearly two-thirds of respondents said they would also not adjust salaries based on location!

That’s a small sample but as Demuyakor says, “Startups (a) are frequently the most adept at utilizing the types of technology necessary for effective remote work and (b) simultaneously have to compete ferociously for talent. As such, I think we may be able to infer what the ‘future of work’ may look like as we observe what startups choose to do as the pandemic passes.”

Some landlords (with big loans) and large cities (with big budgets) are making a push to repopulate their offices quickly, and some large companies are loading up on office space or reaffirming their commitments to current locations.

Maybe efforts like these, plus the natural desire to network live, will bring back the industry clusters and pull everyone back to the old geographies? Maybe something close to 100% of what we saw before? What does that look like?

In such a scenario, some pandemic-era changes will persist, says Christopher Yip, a partner and managing director at RET Ventures. “A populace that has become sensitized to public health considerations may well gravitate toward solo forms of transportation (cars and bicycles) instead of mass transit, and parking-related and bike-sharing tech tools may likely thrive. From a real estate management perspective, technology that makes high-density living more comfortable and healthier will also increase, as consumers will become increasingly attracted to touchless technology and tools that facilitate self-leasing.”

Here’s the other scenario that he lays out “if a large number of jobs remain fully remote.”

“In theory, retail and office properties could structurally continue to suffer, and there has been some talk from government officials in certain regions about converting office properties into affordable housing,” he details. “If market-rate vacancies in cities remain high, there will be increasing demand for short-term rental platforms like Airbnb and Kasa, which enable landlords to gain revenue from hotel-type stays even in a market where residential demand is not strong.”

Vik Chawla, a partner at Fifth Wall, sketches out a middle-of-the-road scenario. “We believe that major cities will continue to attract knowledge workers and top talent post-pandemic,” he says, “though we expect remote work to become an increasingly critical component to the work economy, meaning that there will be increased flexibility in terms of time spent in the office versus elsewhere.”

This would still mean some sort of long-term price decline. “At a city level, this means that rents should taper relative to pre-pandemic levels due to lesser demand,” he believes. “That said, the real estate ecosystems in cities that have experienced growth throughout the pandemic will enter a period of innovation, and with it, see an increase in housing density, ADUs and modular building techniques.”

Andrew Ackerman, managing director of UrbanTech for DreamIt Ventures, also sees a gentle deflation of commercial office prices over time, followed by some complex space-management questions.

“[T]he return to work will likely result in more flexible work arrangements rather than the demise of the office which, as leases renew over the next 5-10 years, will lead to a gradual meaningful-but-not-catastrophic reduction in the demand for office space. The question is, what then happens to the excess office space?”

“Office to residential conversion is tricky,” he elaborates. “Layout is a major constraint. Many modern offices have deep, windowless interior space that is hard to repurpose. But even with narrow layouts, the structural elements are often in the wrong place. Drilling thousands of holes in structural concrete so you can move plumbing and gas to the right places is a heavy lift.”

This might just lead to new types of still-valuable uses? “One of the areas that I’m still investigating is whether co-living or microunits might be a more attractive conversion option. Turning an office break room and interior bullpens into a shared kitchen, dining area, and recreation or work flexspace may be a better way to repurpose deep interior space without a very costly retrofit. And if you don’t have to reroute too much plumbing, it may even be possible to convert (and convert back!) individual floors as market demand for office and residential space fluctuates over time.”

All respondents saw proptech being a core part of the next era of big cities (of course), however bullish or bearish they may be about the office itself.

A new equilibrium for residential

Housing availability has become even more limited in most places during the pandemic, with many more people looking to buy and fewer people wanting to sell. This is even though the previously hottest cities have seen major rental price drops.

Demuyakor of Wilshire Lane is staying focused on the housing problem, and solutions to it like co-living. “Despite the pandemic, it is still difficult for millennials and Gen Z to afford to live in the most expensive cities (New York, San Francisco, Los Angeles, etc.) at current wage levels,” he says. “As such, we believe that we will continue to see demand for products and solutions that can continue to help alleviate costs and burdens of living in major cities. For example, we think that at its core, co-living is an economic decision. Solutions that continue to help people live where they want to live more easily (ADUs are another example of this) will continue to thrive.”

Casey Berman, managing director and general partner of Camber Creek, thinks that “cities will continue to attract people to live, work and play because they offer density and opportunities for experiences that people crave even more now. To the extent all of this is true, there will be renewed demand for urban spaces and properties to take advantage of that demand.”

He says that the firm has been investing in products to make dense living safer and more convenient and “we expect those solutions will become increasingly popular. Flex allows tenants to pay rent online in easier-to-manage installments and in the process makes it more likely that landlords will receive payment on time. Latch’s access control devices are in one out of 10 new multifamily buildings. A lot of people purchased a pet over the past year. PetScreening makes it easy to manage pet records and confirm when a pet is a service or support animal.”

Robin Godenrath and Julian Roeoes, partners at Picus Capital, generally share this viewpoint and describe how new living arrangements in cities could allow for more radical changes to how people live.

“Flexible living solutions will allow remote workers to spend time across different cities with a fully managed, affordable and safe rental option for short-to-long-term urban living,” he says, “while commercial conversion to residential will play a key role in driving down per square foot prices enabling long-term returning residents to afford less densified space. Although co-living densifies multifamily buildings, we believe it will remain an interesting sector as the continued shift to remote work will make living communities increasingly important considering the reduced social interaction on the job.”

But modern proptech is also making the suburbs and beyond more appealing in the long run, according to many. Great new technologies for living can exist anywhere you are.

Proptech has also helped fuel the new suburban boom. “There is an ongoing trend of reverse urban migration causing an uptick in the demand for suburban-style living,” he says. “Proptech companies have played a significant role in enabling this shift, specifically via digitizing the home buying, selling and renting transaction processes (e.g., iBuyers, alternative financing models and tech-enabled brokerages). Additionally, proptech companies have played a key role in reducing physical interactions through remote appraisals, 3D/VR viewings and digital communications thus enabling homebuyers and sellers to efficiently and safely transact throughout the pandemic.”

Ultimately, the same technologies that could make cities more affordable will also help out in the suburbs. “We strongly believe that the acceleration of the digitalization of the home transaction process coupled with the significant increase in demand for suburban-style housing and evolving buyer profiles (e.g., tech-savvy millennials) opens up a multitude of opportunities for proptech to significantly impact suburban living across construction, access and lifestyle. This includes companies focusing on built-to-rent developments, modular homebuilding, affordable housing, community building and digital amenities.

Many investors who we talked to highlighted the single-family rental market trend. Here’s Christopher Yip again from RET.

“One of the unheralded trends of the past decade has been the rise of the single-family rental (SFR) market,” he says “with a significant number of major investors moving into this asset class. The SFR space is poised to benefit from the migration from cities, and the tech that supports SFR will likely have positive ripple effects across the industry.”

“SFR portfolios are particularly challenging to operate efficiently and at scale; compared with a multifamily property, they have more distinct unit layouts and are more spread out geographically,” he explains. “Technology has the ability to streamline operations and maintenance for SFR operators, with smart home tools like SmartRent facilitating self-touring and management of these distributed portfolios. We’re bullish on this space and are keeping a close eye on proptech tools that serve this market.”

Andrew Ackerman of DreamIt agrees. “Single-family has been neglected, slowly growing more interesting both from an asset and proptech perspective for some time. For example, we invested in startups like NestEgg and Abode who service this ecosystem … prior to the pandemic. COVID has been good to these startups and brought more attention to the opportunities in single-family in general.”

Stonly Baptiste and Shaun Abrahamson, co-founders of Urban.us, already see a world of options unfolding across geographies, with choices like co-living and short-term rentals letting people find new lifestyles. “Portfolio companies like Starcity are really thriving as co-living doesn’t just solve for cost, but also for a key overlooked issue — access to community. We also see room for more nomadic lifestyles. A lot of the discussion about Miami is about people moving there, but it seems like a more interesting question for a lot of places is maybe whether or not people will spend a few months of the year there. So for remote workers this might mean places near specific activities like mountain biking, surfing, snowboarding etc. Starcity makes it easy to move between city locations and Kibbo takes this far beyond the city by building communities around van life.”

Here’s how all these changes are adding up for the suburban market, as mapped out by Clelia Warburg Peters of BCV.

“The residential transaction disruption is now settling in three core categories: iBuyers (who buy homes directly from sellers and ultimately hope to own the sell-side marketplace), neobrokers (who generally employ their agents and use secondary services such as title mortgage and insurance to increase their revenue) and elite agent tools (platforms or tools focused on the top agents).”

This combination of innovations are changing residential real estate as we know it. “[C]onsumers are increasingly open to alternative financing tools, including home-equity-based financing models (where you sell a stake in your home, or you buy into full ownership in a home over time). The growth and proliferation of these new models are consolidating the whole residential market so that brokerage sales commissions and commission from the sale of mortgage, title and home insurance are now functionally one large and intertwined disruptable market.”

The surprising revival of neighborhood retail

Humans seem to love the concept of a traditional Main Street full of bustling, walkable local businesses. But the hits have kept coming to the people trying to successfully operate independent retail storefronts.

E-commerce began cutting into traditionally thin margins with the rise of Amazon and the 90s wave of “e-tailers.” More recently, art galleries, high-end restaurants and boutiques became a harbinger of gentrification in many cities. Many commercial retail landlords in these locations aggressively priced rents as more residents moved in who could afford higher prices, ultimately contributing to gluts of empty storefronts in prime locations.

The pandemic seemed to be the final blow, with even the most loyal shoppers turning to order online while local businesses stayed closed.

And yet, a range of investors are strangely optimistic. Even though the pandemic upended social and economic activity for more than a year, most agreed that IRL retail experiences are an essential aspect of modern life.

“Humans are fundamentally social animals and I think we will all be hungry for in-person experiences once it is safe to return to them. Additionally, I think the shift away from working five days a week in the office is going to create a greater desire for ‘third spaces’ — not home, not a formal office environment,” said Peters.

“I do think we will continue to see more ‘Apple store’-type retail experiences, where the focus is less on selling inventory and more on creating an environment for customers to physically interact with goods and experience the brand ethos beyond a website. Because I anticipate that retail rents are going to be meaningfully lower at the end of the pandemic, I actually think we will see even more experimentation than we did pre-COVID. It will be a very interesting period for retail.”

Many others held views in this direction, whether they are investing specifically in retail-related tech or more generally in third-space ideas.

“It’s true that retail has been in flux for more than a decade; the list of common e-commerce purchases has expanded from books and clothing to prepared meals and groceries. It’s also true that the pandemic has accelerated e-commerce’s growth, to the detriment of brick-and-mortar retail,” says RET’s Yip. “But people are still human and crave in-person experiences. Even if cities never bounce back fully, major metropolises will still have enough foot traffic to support a fair amount of retail, and innovative models like pop-up shops can be brought in to help address vacancies. It should also be noted that the public markets still have some confidence in the retail space. While the major REITs struggled in early to mid-2020, many have recovered substantially, and several have actually surpassed their pre-pandemic figures. It has been a bad decade for retail — and a very bad year — but it is just too soon to close the book on the sector.”

Godenrath and Roeoes of Picus say movie theaters are just one example of a retail sector poised for success when public life resumes at scale post-pandemic.

“Cinemas, many of which are key shopping center anchor tenants, were already reinventing the traditional theater experience by offering a more holistic experiential solution (e.g., reserved seating, 4DX visuals, in-theater restaurants, cafes and bars) and the pandemic has led to an expansion of these offerings (i.e., private theater rentals and events). We have the opinion that this trend will continue to expand across the entire retail real estate industry from restaurants (immersive culinary experiences) to traditional retail (integrated online and offline shopping experiences) and believe that proptech will play a defining role in helping retail real estate owners identify potential tenants and market properties as well as in helping retailers drive in-store customer engagement and gain key insights into the customer journey.”

The internet is also a friend these days, surprisingly! “We also see a lot of potential for hybrid models combining online and offline experiences without friction,” they say. “Taking the fitness sectors as an example we can imagine a new normal where in-studio courses are broadcasted to allow a broader participant group and apps tracking fitness and health progress throughout in-studio visits and at-home workouts.”

You can also see how retail intersects with many other solutions investors are betting on, particularly to improve the appeal of cities and solve for macro problems like climate change.

“Cities have some massively underutilized assets, perhaps the biggest being public spaces that are allocated to cars,” Baptiste and Abrahamson say. “So one change we think will become permanent is reallocating parking spaces away from private vehicles to micromobility (bike/scooter/board lanes, parking, etc.). We’re seeing a lot of demand for portfolio companies like Coord (manages curb space starting with commercial vehicles and smart zones), Qucit (manages bike and scooter share operations in many large cities) and Oonee (secure bike/scooter/board parking).”

That’s just the start of the virtuous cycle they foresee.

“As [car removal] happens, the use cases like logistics can shift to electric micro-EVs. Similarly, parklets or seating areas increase social spaces. The EU is setting the pace for banning cars, but overall reduced access to streets for cars is going to be a big change. And likely will make cities attractive — yes, you give up private living space, but you’re going to get a lot more common/social space. This is also likely to drive more co-living so you can decrease the cost basis for being in a city, but get a lot more from shared spaces, which have no real comparison in lower density communities.”

Demuyakor of Wilshire Lane is betting in the same direction.

“One of the key tenets of our overall strategy has always been a focus on space utilization and identifying the best ways technology can monetize underutilized spaces. This can be seen clearly with many of our newest investments: Stuf and Neighbor (monetization of basements, parking garages and other vacant spaces), MealCo (monetization of vacant kitchens), WorkChew (monetization of restaurant seating areas, hotel lobbies and conference rooms), and Saltbox (monetization of empty warehouses). We believe that landlords can certainly use these types of strategies to help mitigate increased levels of vacancies that we’re seeing across the real estate industry today in the medium term.”

If this thesis pans out, retail may become more about shared spaces. “With WorkChew in particular, which just announced funding this week, we’re seeing a ton of demand for their product both on the demand side and the supply side. Hotels and restaurants are excited to partner with them to monetize their less-utilized spaces and infrastructure,” said Demuyakor. “And of course, employers and companies love [it] as an easy amenity that can be offered to their hybrid workforces that increasingly want to spend more time out of the HQ office.”

I have a few additional reasons to believe in the future of retail that I didn’t hear explicitly from the investors I interviewed.

• First, millions of new businesses have been created during the pandemic, to the surprise of even economists and policymakers. A large portion appear to have a very local angle, whether food delivery (cupcakes) or services (on-site haircuts) or internet-first products with strong local followings (much of Etsy). These entrepreneurs went internet-first and now, as commercial rents plummet, they have sufficient revenue to support a physical presence.
• Second, most local business that have sustained themselves during the COVID-19 era figured out how to succeed on the internet. To see which ones in your vicinity are weathering the storm, just open one of your preferred on-demand delivery and services apps and place an order.
• Third, as noted by respondents and available data, landlords are already starting to drop prices, creating a renter’s market for the first time in decades.
• Fourth, there are whole new types of financing opening up to more traditional businesses that could enable any company with a successful online side hustle, hobby (or perhaps larger project) to get funding for expansion. (This reason is perhaps the most speculative, but we are trying to figure out the future here at TechCrunch.) For example, Shopify has just invested in Pipe.com, a new “platform for trading recurring revenue.” Although the companies are not saying much now about the relationship, it’s possible to imagine a bunch of successful small(ish) businesses on Shopify suddenly getting a new kind of capital infusion right as the math is suddenly much better for a storefront location.

If you roll all of this up with other broader shifts in how we think about cities, like making them more climate-friendly through allowing density and bike lanes, you can start to see a world emerging that sounds a lot more like the fantasies of a New Urbanist than the world before the pandemic.

At the same time, these concepts are being deployed across smaller cities, suburbs and towns: All will compete to offer the highest quality of living — unless the old network effects of industry clusters return miraculously.

And let’s say the industry clusters don’t cluster like they used to. It’s possible that many landlords, lenders and city budgets will have to retrench soon, creating a drag on the economies of otherwise-attractive cities.

Even in this case, you can imagine a rebirth for places like New York and San Francisco focused around housing, retail and amenities. Maybe one day, we’ll look back at recent decades as the bad old days before we collectively bottomed out during the pandemic and had to decide on the right answers for the long-term.

And with that, I invite readers to go check out the full sets of responses from the investors I interviewed. Each person offered a lot more than I was able to fit into this already-too-long article and is worth reading in detail. Extra Crunch subscription required, so you can support our ongoing coverage of these changes.

I’ll be covering the future of proptech and cities more soon. Have other thoughts about all of this? Email me at eldon@techcrunch.com.

Source: Tech Crunch

The pandemic made the internet a lifeline for shopping, earning a living and maintaining personal relationships. Now, as lockdowns start to lift, the real estate industry has to figure out what that means.

Seeking answers, I surveyed the people who are betting on the biggest and most surprising changes in the sector — proptech investors. While landlords and their lenders may hope for a return to the past, proptech investors are focused on where the notion of place is going in the future. I have an in-depth writeup with many excerpts and my thoughts over on TechCrunch, including a look at the revival of neighborhood retail, the rebirth of cities and much more.

I couldn’t get into all of the great topics, though, including the rapid recent evolution of the residential sales and rental market, construction tech, related climate-tech topics and other issues.

So here are the thousands of words of answers in full, below. Extra Crunch subscription required. If you’re a startup founder, employee, investor, etc., you may also enjoy the previous editions of this survey, from the fall of 2020, spring of 2020 and fall of 2019.

The investors we talked to:

• Clelia Warburg Peters, venture partner, Bain Capital Ventures
• Christopher Yip, partner and managing director, RET Ventures
• Zach Aarons, co-founder and general partner, MetaProp
• Casey Berman, general partner, Camber Creek
• Vik Chawla, partner, Fifth Wall
• Adam Demuyakor, co-founder and managing partner, Wilshire Lane Partners
• Robin Godenrath and Julian Roeoes, partners, Picus Capital
• Stonly Baptiste, founding partner, and Shaun Abrahamson, managing partner, Urban Us
• Andrew Ackerman, managing director, Dreamit

Clelia Warburg Peters, venture partner, Bain Capital Ventures

As the pandemic hopefully enters its final stages, how are the changes from this period affecting your real estate and proptech investment strategy? Are big trends of the present, like high nationwide housing demand and mass commercial vacancies, refocusing your investing strategy?

Above all, I think COVID will prove to be an accelerant to existing trends in both the residential and commercial space. I like to think of it as a decade of innovation acceleration in 24 months.

The pandemic has certainly refocused attention on life at home, and that combined with low interest rates has undeniably made this an incredible period for companies that touch the housing market. Given that I got into proptech through work at a family residential brokerage, this market has always been a big area of interest for me, and I would observe that we were in the midst of some major shifts in this market pre-COVID. The residential transaction disruption is now settling in three core categories: iBuyers (who buy homes directly from sellers and ultimately hope to own the sell-side marketplace), neobrokers (who generally employ their agents and use secondary services such as title mortgage and insurance to increase their revenue) and elite agent tools (platforms or tools focused on the top agents). Additionally, consumers are increasingly open to alternative financing tools, including home-equity-based financing models (where you sell a stake in your home, or you buy into full ownership in a home over time. The growth and proliferation of these new models are consolidating the whole residential market so that brokerage sales commissions and commission from the sale of mortgage, title and home insurance are now functionally one large and intertwined disruptable market. In this context, while some of the valuations we are seeing may be a little euphoric, I think there is no doubt that we are in a period of massive and sustainable innovation in how we buy and hold our homes and I think these trends are going to be enduring.

In the commercial arena, we were also in the midst of a meaningful shift in how companies were conceiving of office space, in many ways thanks to the innovations that WeWork brought to the market. But the pandemic has pushed this much further, fundamentally shifting the relationship between the landlord/manager (who has largely been in a position of power since the 1950s) and the tenant (who is now in a position of much greater power, more akin to a consumer of a luxury product). As a result of this, I think the best landlords will recognize that they are going to be under pressure to shift from simply providing a physical space, to helping provide tenants with a multichannel work experience. This might mean a physical/digital hybrid of systems that include access control, physical space management (both in the hub location and potentially in spoke locations), and a digital space for meetings and collaboration. These assets will need to be provided in the context of a much more human relationship, focusing on serving the needs of tenants. As lease terms inevitably shorten, tenants will need to be courted and supported in a much more active way than they have been in the past.

How do you see the big cities adapting to life after the pandemic — or will they? What solutions are you focusing on in particular for the future of urban living (co-living, ADUs, commercial conversion to residential, etc.)?

I think the experience of cities after the pandemic is going to be highly variable — for instance, the trajectories for Austin and New York will likely look radically different. I am personally uncertain about how co-living, or even commercial to residential conversion will be at play, but I do believe that there will be a few consistent areas of interest.

First, smaller-scale urban life will continue to be a significant trend. I think we will continue to see a proliferation of bike lanes, a focus on living in walkable neighborhoods, and a reliance on tools (such as the app Nextdoor) that reinforce our feeling of connection to our neighbors.

Second, I think we will continue to see a reliance on certain types of outsourced services — ghost kitchens for takeout or rapid provision of groceries and other essentials — and technologies and spaces that facilitate these will be a growth area.

Finally, I do believe that in some more sprawling urban environments ADUs will be an area of growth, particularly with seniors who are looking for an additional income stream so they can age at home. One caveat is that I think this will be something of a winner-takes-all space with a limited number of geographically dominant winners.

The demand for suburban-style living is back — for now. What are you focusing on across this category for the next year or two (new residential services and amenities, build-to-rent housing developments, etc.)?

The current transition out of urban environments and into suburban environments is playing out alongside some broader changes in the way the American public seems to be approaching homeownership. Over the past decade, there has been a net decline in homeownership and a net growth in renting. Some of this is by necessity, and some is by choice. I think one component of the tech-related opportunity in the migrations we see now will be around rental platforms and multifamily amenitization. There is still no data aggregator like the MLS on the rental side, and a number of portals (including Zillow Rentals, Apartment List, Zumper, RentalBeast and others) are competing to provide listing information to consumers. On the multifamily side, many multifamily operators are understanding that the integration of work/life/play is creating a new need for amenitization and greater services in their offerings. I think we will continue to see more and more emphasis on hospitality-style brand creation in the multifamily space, and much of this will be facilitated by different kinds of tech-facilitated amenities.

It’s also important to note the flood of both institutional and private investor money that is coming into the single-family rental space. (It may be that in the future a certain percent of the population is renting their primary home, but exposed to the property market through ownership of these kinds of real estate assets.) This growth is being facilitated by property management services like Mynd, marketplaces like Roofstock, and innovative products like Zibo or Knox Financial.

Source: Tech Crunch

I grew up in poverty in upstate New York, but I was lucky enough to study engineering at Rensselaer Polytechnic Institute. I founded a company that went public when I was 28, and I used that wealth to invest in startups.

It’s been exhilarating to watch many founders flourish, but when I return to upstate New York, the desolate remains of long-closed factories remind me of the sectors that the tech revolution never reached.

The numbers behind those empty facades could not be more dire. In late 2019, even before COVID struck, U.S. manufacturing fell to 11% of GDP, the lowest level in 72 years. We ceded much of that ground to low-cost competitors in China, which became the world’s top manufacturer back in 2011. We now have only a small window of time to restore manufacturing as a foundation of American prosperity, and a remarkable but underappreciated federal program has a big role to play.

My firm, SOSV, specializes in running programs that help founders take technically difficult ideas from research to product. Many of these companies represent the future of American industry, especially when it comes to such national priorities as industrial automation and decarbonization.

You might think those startups would be ripe for venture investment, but in reality, only a fraction of venture capital flows to them. They are simply too risky compared with categories like SaaS and consumer.

That is exactly why in 1982 the U.S. Congress established the Small Business Innovation Research (SBIR) program, which, in the words of its founder, Roland Tibbetts, aimed to “provide funding for some of the best early-stage innovation ideas — ideas that, however promising, are still too high risk for private investors, including venture capital firms.”

For a little more than $3 billion per year in contracts and grants disbursed by federal agencies, the SBIR has produced 70,000 patents, $41 billion in follow-on venture capital investments and 700 public companies.

SBIR’s brilliant design has helped thousands of technology-minded entrepreneurs cross the chasm from research to real products, new markets and venture backing. We’ll need thousands more brilliant scientists, technologists and entrepreneurs to step up in the decade ahead. They can do this from their garage, but they can’t do it out of thin air. Congress should act quickly to create an “SBIR 2.0” with three critical improvements over how SBIR works today.

First, we need at least 10 times more SBIR funding. Even at $30 billion, SBIR’s funding would be a rounding error compared to many budgets in Washington, like $693 billion for defense in 2020, and just a fraction of total U.S. venture investing, which in 2020 reached $156 billion. Yet, arguably, nothing in the federal budget could do more to help American industry.

Second, we need to focus new SBIR funding on critical strategic areas, especially decarbonization and advanced manufacturing. The first will save humanity’s future on this planet. The second will help us leap over our missed generation of manufacturing investment to establish leads in critical areas, including robotics, battery technology, artificially intelligent devices and additive manufacturing. Who could ask for better markets?

Finally, the review and reward process needs to be fast. One great example is the innovative U.S. Air Force “pitch day” programs in 2019 and 2020, which granted funds to the best founder pitches (carefully pre-qualified) in a matter of minutes. In our almost frictionless market for talent, long waits to deliberate and disburse funds is not a winning approach.

The Biden administration’s late-February issuance of an executive order on America’s supply chains suggests that the White House is already working hard on policy measures. No doubt the administration’s effort will draw on many approaches, but the key must be a relentless focus on America’s primary unspent fuel: the ingenuity and drive of our people.

We will only pull the depressed regions of this country out of poverty by giving them the tools to, with their own hands, rebuild American manufacturing through entrepreneurship.

Editor’s note: Former TechCrunch COO Ned Desmond is now senior operating partner at SOSV.

Source: Tech Crunch

Polycystic ovary syndrome, or PCOS, is a common disorder that can cause irregular periods, infertility or gestational diabetes in women. And the condition is far from rare: PCOS impacts one in 10 women, meaning there’s a big market of people out there that want better support and risk-screening to navigate the symptoms.

That’s where Veera Health comes in. The startup is an online clinic aimed at helping women in India navigate PCOS through risk-screening, mental health support and answers about effects such as acne and weight gain. If the startup does its job right, it can help bring earlier diagnosis to women around the world.

“The big issue around polycystic ovary syndrome is that there [are] a lot of different symptoms, and very often women take a long time to actually get diagnosed in the right manner,” CEO and co-founder Shashwata Narain said. “We want to provide a higher level and quality of guidance so she can have open eyes experience as she goes through her treatment process.”

Veera Health’s subscription-based program takes the medical history of a patient to better understand symptoms and any existing reports. About 60% to 70% of the patients that Veera Health has worked with so far are pre-diagnosed and are looking for a solution, so the startup then starts to pick apart potential risk factors and suggests a holistic treatment plan. The startup has a team of specialists, from clinical nutritionists to dermatologists and gynecologists, that it works with on a contractual basis to approve any plan given to a patient. The startup has employed a number of care managers, which is basically an employee in charge of handling weekly and daily communication with the patient about these plans.

The company uses published research on assessment and management of PCOS as a framework for its suggestions.

Veera Health officially launched three months ago and already has made $10,000 in revenue, growing at 300% month over month in paid customers.

Veera Health isn’t covered by insurance, so patients pay out of pocket for the services. In India, Narain says, outpatient care is “almost entirely an out-of-pocket market” and insurance is largely focused on hospitalization expenses. By using Veera Health, the co-founder estimates that by aggregating all these services into one spot, Veera Health can stop customers from spending “thousands and thousands of rupees” and playing specialist hopscotch.

In fact, one study shows that PCOS clinics have had a high retention in patients compared to other single-care providers.

The co-founder says the biggest challenge for Veera Health is educating women about how to prioritize their own health and get past the stigma of PCOS.

“It’s a challenge because you want to get as much information out there and make sure women are paying attention to their health, yet at the same time there’s a lot of stigma on [PCOS] and around women’s health to begin with.”

We know of at least one investor that thinks the conversation is ready to be had, anyway. Veera Health recently graduated from Y Combinator’s Winter 2021 cohort as one of the 39 companies based in India, the highest concentration from the accelerator yet.

Narain says that Veera Health is uniquely positioned to help women during the pandemic. Her sister and co-founder, Shobhita, was diagnosed with PCOS so experienced firsthand the confusing path to diagnosis.

“Because of the pandemic, there’s a lot more openness to online solutions,” she said. “People are at home, not able to exercise and are much more stressed out. This had a ramp up in the level of awareness on [PCOS] and the search for solutions.”

Source: Tech Crunch

Twitter today is announcing what the company calls a “strategic acquihire” of the API integration platform Reshuffle. The startup’s commercial technology, which allows developers to build workflows and connect systems using any API, will be wound down as a result of Twitter’s deal. However, Reshuffle’s entire team of seven, including co-founders Amir Shevat and Avner Braverman, will be joining Twitter where they’ll work to accelerate the work being done to modernize Twitter’s new, unified API.

The new Twitter API 2.0 was first introduced last year, having been rebuilt from the ground up for the first time since 2012. It now includes features missing from the older version, like conversation threading, poll results, pinned tweets, spam filtering, and more powerful stream filtering and search query language. It’s also been designed in a way that will allow Twitter to release new functionality faster as the company itself rolls out more features. For example, the API has added new support for newer features like “hide replies” and tweet annotations. And as Twitter’s pace of development has recently been sped up, the company now has even more significant product launches on the horizon, including the public release of Twitter Spaces (audio rooms) and soon, Super Follow (a subscription service for creators and their fans).

In addition, Twitter’s API team is working to develop products that meet the various needs of different types of developers, including consumer-facing app developers, business and enterprise developers, and academic researchers. In January, Twitter’s API opened up to researchers, and Twitter promised more functionality would soon be on the way.

Reshuffle’s team will be immediately tasked with helping Twitter accelerate its API efforts and building tools for developers.

Reshuffle’s CEO Avner Braverman, who has nearly two decades of experience in both engineering and technical consumer-facing roles across startups and larger companies like IBM, will join Twitter’s Developer Platform team. Meanwhile, Reshuffle’s CPO Amir Shevat, whose previous roles included VP of Platform for Twitch, Head of Developer Relations at Slack, and Senior Developer Relations Manager at Google, will join Twitter as a senior member of the Developer Platform team.

“We’re doubling down on our investment and ambitions by bringing the Reshuffle team on board,” noted a Twitter blog post announcing the deal, co-authored by Twitter Revenue Product Lead Bruce Falck and Twitter Developer Platform Lead Sonya Penn. “Their experience building developer platforms will accelerate and enhance our work by building the tools that will make it easier and quicker for developers to find value on our platform,” it read.

Reshuffle’s existing product will wind down operations over the coming weeks, following the acquihire. However, the team will continue to maintain its open source project for the developer community, Twitter notes.

Image Credits: A photo of Reshuffle’s product

Twitter has been on an acquisition and acquihire spree in recent months, having bought newsletter platform Revue, which is already integrated into Twitter’s website; as well as teams from social podcasting app Breaker, screen sharing social app Squad, creative design agency Ueno; and last year, stories template maker Chroma Labs.

Twitter says it will continue to look for more acquihire opportunities in the future as a means of scaling its own teams and accelerating their work.

The company declined to share deal terms for the Reshuffle acquihire.

According to Pitchbook, Reshuffle was backed by $6.35 million in funding from investors including Cardumen Capital, Cerca Partners, Maverick Ventures, Meron Capital, Dell Technologies Capital, Engineering Capital, and Lightspeed Venture Partners. Pitchbook says the business was valued at $11.85 million.

Source: Tech Crunch

Since the dawn of the internet, knowing (or, perhaps more accurately, not knowing) who is on the other side of the screen has been one of the biggest mysteries and thrills. In the early days of social media and online forums, anonymous usernames were the norm and meant you could pretend to be whoever you wanted to be.

As exciting and liberating as this freedom was, the problems quickly became apparent — predators of all kinds have used this cloak of anonymity to prey upon unsuspecting victims, harass anyone they dislike or disagree with, and spread misinformation without consequence.

For years, the conversation around moderation has been focused on two key pillars. First, what rules to write: What content is deemed acceptable or forbidden, how do we define these terms, and who makes the final call on the gray areas? And second, how to enforce them: How can we leverage both humans and AI to find and flag inappropriate or even illegal content?

While these continue to be important elements to any moderation strategy, this approach only flags bad actors after an offense. There is another equally critical tool in our arsenal that isn’t getting the attention it deserves: verification.

Most people think of verification as the “blue checkmark” — a badge of honor bestowed upon the elite and celebrities among us. However, verification is becoming an increasingly important tool in moderation efforts to combat nefarious issues like harassment and hate speech.

That blue checkmark is more than just a signal showing who’s important — it also confirms that a person is who they say they are, which is an incredibly powerful means to hold people accountable for their actions.

One of the biggest challenges that social media platforms face today is the explosion of fake accounts, with the Brad Pitt impersonator on Clubhouse being one of the more recent examples. Bots and sock puppets spread lies and misinformation like wildfire, and they propagate more quickly than moderators can ban them.

This is why Instagram began implementing new verification measures last year to combat this exact issue. By verifying users’ real identities, Instagram said it “will be able to better understand when accounts are attempting to mislead their followers, hold them accountable, and keep our community safe.”

The urgency to implement verification is also bigger than just stopping the spread of questionable content. It can also help companies ensure they’re staying on the right side of the law.

Following an exposé revealing illegal content was being uploaded to Pornhub’s site, the company banned posts from nonverified users and deleted all content uploaded from unverified sources (more than 80% of the videos hosted on its platform). It has since implemented new measures to verify its users to prevent this kind of issue from infiltrating its systems again in the future.

Companies of all kinds should be looking at this case as a cautionary tale — if there had been verification from the beginning, the systems would have been in a much better place to identify bad actors and keep them out.

However, it’s important to remember that verification is not a single tactic, but rather a collection of solutions that must be used dynamically in concert to be effective. Bad actors are savvy and continually updating their methods to circumvent systems. Using a single-point solution to verify users — such as through a photo ID — might sound sufficient on its face, but it’s relatively easy for a motivated fraudster to overcome.

At Persona, we’ve detected increasingly sophisticated fraud attempts ranging from using celebrity photos and data to create accounts to intricate photoshopping of IDs and even using deepfakes to mimic a live selfie.

That’s why it’s critical for verification systems to take multiple signals into account when verifying users, including actively collected customer information (like a photo ID), passive signals (their IP address or browser fingerprint), and third-party data sources (like phone and email risk lists). By combining multiple data points, a valid but stolen ID won’t pass through the gates because signals like location or behavioral patterns will raise a red flag that this user’s identity is likely fraudulent or at the very least warrants further investigation.

This kind of holistic verification system will enable social and user-generated-content platforms to not only deter and flag bad actors but also prevent them from repeatedly entering your platform under new usernames and emails, a common tactic of trolls and account abusers who have previously been banned.

Beyond individual account abusers, a multisignal approach can help manage an arguably bigger problem for social media platforms: coordinated disinformation campaigns. Any issue involving groups of bad actors is like battling the multiheaded Hydra — you cut off one head only to have two more grow back in its place.

Yet killing the beast is possible when you have a comprehensive verification system that can help surface groups of bad actors based on shared properties (e.g., location). While these groups will continue to look for new ways in, multifaceted verification that is tailored for the end user can help keep them from running rampant.

Historically, identity verification systems like Jumio or Trulioo were designed for specific industries, like financial services. But we’re starting to see the rise in demand for industry-agnostic solutions like Persona to keep up with these new and emerging use cases for verification. Nearly every industry that operates online can benefit from verification, even ones like social media, where there isn’t necessarily a financial transaction to protect.

It’s not a question of if verification will become a part of the solution for challenges like moderation, but rather a question of when. The technology and tools exist today, and it’s up to social media platforms to decide that it’s time to make this a priority.

Source: Tech Crunch