Month: June 2021

In my role at CloudBlue, Fortune 500 companies often approach me for help with solving technology challenges while shifting to a subscription business model, only to realize that they have not taken crucial organizational steps necessary to ensure a successful transition.

Subscriptions scale better, enhance customer experience and hold the promise of recurring and more predictable revenue streams — a pretty enticing prospect for any business. This business model is predominant in software as a service (SaaS), but it is hard to find an industry that doesn’t have a successful subscription story. A growing number of companies in sectors ranging from automotive, airlines, gaming and health to wellness, education, professional development and home maintenance have been introducing subscription services in recent years.

However, businesses should be aware that the subscription model is much more than simply putting a monthly or annual price tag on their offering. Executives cannot just layer a subscription model on top of an existing business. They need to change the entire operation process, onboard all stakeholders, recalibrate their strategy and create a subscription culture.

While 70% of business leaders believe subscriptions will be key to their future, only 55% of companies believe they’re ready for the transition. Before talking technology, which is an enabler, companies should first address the following core issues to holistically plan and switch to a recurring revenue model.

Get internal stakeholders involved

Legacy companies accustomed to pay-as-you-go models may assume shifting to a subscription model is just a sales issue. They are wrong. Such a migration will affect nearly all departments across an organization, from product development and manufacturing to finance, sales, marketing and customer service. Leaders must therefore get all stakeholders motivated for the change and empower them to actively prepare for the transformation. The better you prepare, the smoother the transition.

But as we know, people naturally do not like change, even if it is for their own good. So it can be a formidable task to secure the cooperation of all internal stakeholders, which, depending on the size of your company, could number in the thousands.

Source: Tech Crunch

When the pandemic struck last year, the fundraising world turned upside down. Due to shifting priorities, investors had to commit to taking care of their portfolio companies, the majority of which were led by white men.

Any funding opportunities we had in the pipeline evaporated. This was especially true for investors considering attempts to reach new and underrepresented founders.

But the fundraising market came back pretty quickly in 2020 — for some. And though we are thrilled to have closed a $1.5 million pre-seed round in the middle of a pandemic, the challenges we faced in the past continued. The spotlight only turned back on minority founders after the Black Lives Matter movement took off last summer, and we began to pursue fundraising again in late 2020. We could tell by how investors interacted with our pitch deck or asked us questions that they already had preconceived ideas about us and our business.

We were in our second year of running Handsome and had traction similar to, if not better than, other male-centric startups that were getting funded, yet we still ran into friction when fundraising. The hard part was that we didn’t have any concrete evidence as to why, or the extent to which, fundraising was harder for minority and female teams outside of our apparent challenges and personal experiences. Men are allowed to have a vision or an idea on the back of a cocktail napkin, while women need to have fully established businesses and revenue streams.

The evidence is in the analytics

DocSend, a tool that we and thousands of other startups use to send out pitch decks to investors, analyzed how investors interact with pitch decks. A recent DocSend study confirmed our hunch, finding that investors do indeed scrutinize the decks of businesses founded by women and minorities differently.

For instance, their data showed investors spent 20% longer on the business model section of decks from all-female teams at the pre-seed stage than all-male teams. While more time spent on a particular section of a deck may seem to indicate more interest, it can actually be a sign of greater scrutiny and skepticism.

When you look at the makeup of the average VC you are pitching to, it is likely a middle-aged white man. When pitching Handsome — something that’s reimagining the education and community of the beauty industry — you can imagine that most VCs don’t understand the value and opportunity at hand. Although beauty is a $190 billion global industry ($60 billion alone in the U.S.), investors who don’t follow this industry might have a hard time understanding how big it is, how the industry works, and how our business fits into this thriving market. Even further, investors might completely discredit our business because of the “beauty” label.

All these factors can lead to more time spent analyzing the business model — and its viability — articulated in our pitch deck. In reality, VCs are busy, and if they’re spending more time on the fundamentals of your business, they don’t understand it. It’s more likely they are looking for ways that your business won’t work. And, frankly, we are not business school graduates or Stanford alumni, so investors who want to de-risk their portfolios will spend more time looking at our deck to gauge if we know how to build a business.

More than goodwill is needed for lasting change

Despite all this, we believe that most of the time, investors don’t even know they are acting on these biases. They don’t realize they may have already written you off, which is part of the problem. Awareness of a subconscious bias is the first step toward making positive change. Investors may think they’re widening the funnel simply by taking a meeting or providing mentorship over coffee when, subconsciously, they’ve already counted you out.

Even though the barriers are being lowered, minority founders just starting out still have a hard time getting their foot in the door. Most underrepresented founders don’t have an established network, making it difficult to get even an initial introduction. That’s why these founders aren’t getting meetings. So even with more investor goodwill, founders are still unable to access the capital they need to grow their businesses.

It takes time and effort to enact meaningful changes. Truly committed people are going to work on these issues over the coming years and decades. It’s only on a longer time scale that we’re going to be able to tell whether investors promising change have delivered. Changing the demographics of the founders you fund requires year in, year out consistency, again and again and again.

Only then will we see a time when the future of great ideas is not hindered by the demographics of the people building businesses out of those ideas.

Source: Tech Crunch

For many companies in the United States, a board of directors is a fact of doing business. While sole proprietorships and LLCs are not obligated to have one, C and S corporations must. The board’s goal is to ensure the best is done for the company and its shareholders. While many entrepreneurs see board meetings as a chore, they can be a powerful tool if used well.

Communicate often

While board meetings usually happen quarterly, it’s good practice to keep the conversation going in between them. Sending a monthly email update to the board offers multiple advantages:

• Shorter updates: Business professionals’ attention spans are shrinking. Shorter content is easier to digest, and therefore more likely to be read.
• Timely feedback: A quarter can be a long time, especially for young startups or during challenging times. The monthly format allows the company to receive help or feedback from the board earlier. In business, speed of iteration is key!
• Keep them posted: Keeping directors up to date will avoid lengthy updates during board meetings, ensuring focus remains on strategic conversations.

Reach out when in need

Board members can also be solicited on an ad-hoc basis — founders should keep in mind that board members are here to help the company. If you have doubts about a project decision or want a second, informed opinion, reach out to a board member. This is especially true of directors who have expertise on a specific topic. A quick five-minute call can be a game changer.

Being a founder can be a lonely experience because it can be difficult to discuss sensitive matters with the team. Board members should sign nondisclosure agreements, allowing entrepreneurs to share confidential information and get a different perspective on things.

Discuss goals for the next fundraising event

Founders should make sure to regularly discuss business goals to ensure they reach their next round of funding. Because the industry landscape or economy evolved or the competition stepped up, investors may reconsider their expectations to further fund the company.

Source: Tech Crunch

While every food delivery company is trying to get an edge on its rivals with discount codes, faster service, and a turn into the realm of spooky with ghost kitchens and dark stores, a startup built on a lighter, social concept — letting people see what their friends are chomping on, making it possible to order food and drinks for each other and group order, with buyers picking it all up for themselves — has just raised a substantial Series B and says that it is already profitable.

Snackpass, which describes itself as a “food meets friends” — essentially a social commerce platform for ordering from restaurants, with “snack”, the CEO tells me, of having a double meaning of eating (of course), and a flirtatious reference to a cutie pie — has picked up a $70 million, a super-sized Series B that it will be using to continue expanding to more markets in the U.S.

Conceived four years ago while Kevin Tan, the CEO who co-founded the company with Jamie Marshall, was still a student at Yale studying physics, Snackpass has grown by remaining true to its higher-ed roots. The startup now has 500,000 users across 13 college towns, and has seen its growth explode 7x in the last three months alone. This round values the startup at over $400 million.

This latest tranche of funding is coming from an interesting group of investors. Led by Craft Ventures, it also includes Andreessen Horowitz (which led its $21 million Series A), General Catalyst, Y Combinator, and a long list of individual backers that speaks to the attention Snackpass is getting and the place it’s carving out for itself as a go-to food platform for millennials and younger users.

That list includes AirAngels, the Airbnb alumni investor syndicate; Bastian Lehmann of the Uber-acquired delivery giant Postmates (et tu, Bastian?); David Grutman, a Miami-based hospitality entrepreneur; Draymond Green of the San Francisco Warriors; Gaingels; HartBeat Ventures, Kevin Hart’s venture fund; musician celebs the Jonas Brothers; Shrug Capital (the VC that says it’s interested in consumer startups that are actually interesting to “non-tech” audiences); Stephen Paglucia, co-owner of the Boston Celtics; hip DJ Steve Aoki; Turner Novak of Banana Capital; William Barnes of Moving Capital; and the Uber alumni investor syndicate.

The vast majority of food-ordering platforms these days are focused around delivery and in many cases ways of getting an edge over other platforms in executing on that — a push that often comes at the expense of margins than are thinner than a Roman pizza. Snackpass’s big breakthrough, if you could call it that, was to simply dial back from that one-upmanship, moving away from that premise altogether, aiming to disrupt something much more mundane: the queue.

Tan said Snackpass asked its users what they would do if they weren’t using the app, and they said, “Oh, I just stand in line to order,” he told me in an interview.

“The market share right now is owned by people standing in line at the register, and placing their order. Our vision is that in five years that will no longer exist, like, there will be no more registers. We don’t think it makes any sense.”

He notes that for those who really want delivery, people can opt for that, too — Snackpass integrates with DoorDash, UberEats and others to fulfill that — but 90% of the orders on Snackpass are pickup, meaning that not only does the company then not have to deal with its own fleets of delivery people, and the infrastructure of that, but the operating costs to provide that are also not there.

It turns out that actually a lot of young people seem happy to pop out to get something nice to eat. It means they get to socialise, and take a selfie with their food or drink (boba tea figures strongly) at the venue where it’s being bought. It becomes an experience.

It’s also where the market is in another sense. “What people don’t realize is delivery is only 8% of the restaurant industry,” Tan told me. “And while it’s very much competed for by like big companies, and it’s a huge market, the restaurant industry, is like, much bigger, it’s $800 billion. And 90% of that purchasing is still offline,” he continued, referring to the many people who just queue up, order, buy, and leave. “It’s anonymous, and it’s on the verge of disruption. And we’re focused on that much bigger blue ocean.”

Its formula seems to be working with its target users. Tan said that the service has 80% penetration with students in the markets where it has launched. The average customer orders four and a half times a month, with some customers ordering every day. “You can actually see that it’s like, five to ten times more engagement than the delivery platforms, like UberEats or DoorDash.”

The company’s commissions vary and start at 7% and it’s current suite includes online ordering, self-service kiosks, digital menus, marketing services, and a customer referral program. It’s already profitable but as it continues to grow (and maybe extend to other demographics) you can imagine it adding and expanding on all of these.

There is something about Snackpass that reminds me a lot of Snapchat, not just that the names have a similar ring to them, and not just that they have resonated with college-aged users (and not just that they both squarely target them). It’s something of the whimsy of the app, and how it takes a light touch in its approach to do something that might otherwise feel cumbersome, or mundane, or what, basically, older people do.

Right now, there isn’t much of a social “user graph” per se on Snackpass, nor does it integrate particularly deeply with any specific social apps, but you could imagine a partnership there down the line, especially considering that Snap is getting a whole lot more involved with commerce now.

“In building a social experience around food through shared rewards, gifting, and a social activity feed, Snackpass has created a dynamic and attractive restaurant ordering system,” says Bryan Rosenblatt, partner, Craft Ventures, in a statement. “The growth of its marketplace and virality of the product coupled with Snackpass’ outstanding  team and vision, make it the ultimate solution for consumers and businesses alike. We are thrilled to help take Snackpass to the next level with this latest round of funding.”

Source: Tech Crunch

It’s hard to understand just how steeply the cost of launching and operating satellites has dropped, particularly since the introduction of lower cost launch services from a number of commercial players, and the maturation of the smartphone supply chain. Swarm co-founder and CEO realized just how much the cost curve had changed when she and her co-founder Ben Longmeir realized that they could outfit tiny satellites Longmeir had created as a kind of space lover’s hobby with the equipment needed to provide low-bandwidth connectivity to low-powered devices around the world.

In this week’s episode of Found, Sara walks us through how she went from an engineering career that included stints at NASA’s Jet Propulsion Laboratory and Google, to building Swarm as a first-time founder and CEO. We covered a range of topics including how Sara and Ben decided who would be CEO, what it’s like leading a small but growing team, and how to evaluate your decisions as a founder, and commit to a course of action to move forward.

Sara was extremely candid with us about her experience as a founder and CEO, and this is definitely one of our most open and honest conversations to date.

We loved our time chatting with Sara, and we hope you love yours listening to the episode. And of course, we’d love if you can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Please leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email at found@techcrunch.com. And please join us again next week for our next featured founder.

Source: Tech Crunch

Successfully selling a business has much to do with timing. For many entrepreneurs, it’s the high-stakes end game where they cash out and reap the rewards of their efforts. At a certain point, when both buyers and sellers are working hard to close the deal, negotiations can move very quickly. If you’re the seller, this is not the time to discover unanticipated problems in your business.

Distressingly often, these problems are related to employment. Inattention to employment issues can have a significant impact on deals — from preventing closings and reducing the deal value to altering the deal terms or significantly limiting the pool of potential buyers.

Fortunately, such issues typically can be resolved well in advance with a little forethought and legal guidance. It’s important to get your employment ducks in a row long before you start planning your exit.

What follows is an overview of the three main categories of employment issues that can derail or delay a sale. For the most part, these assume an asset sale, but may vary in the case of a stock sale.

Compliance

By far the most significant problem is general employment law compliance. This means creating strong employment policies and practices that are documented, in place and operating long before you pursue a deal. The key area is wage and hour issues — timekeeping and payroll practices, worker classification issues (employee vs. independent contractor; exempt vs. non-exempt), meal and rest periods, PTO policies and payouts at termination.

Source: Tech Crunch

Here at TechCrunch, we’re big fans of startup competitions. From our Extra Crunch Live Pitch-offs all the way up to the world-famous Disrupt Startup Battlefield, we can’t get enough of ’em. So we’re hooking up with Extreme Tech Challenge (XTC) to present the Extreme Tech Challenge Global Finals, a startup competition focused on powering a more sustainable, equitable, inclusive, and healthy world.

Extreme Tech Challenge is the world’s largest transformative tech startup competition and forum for the leaders of tomorrow to be able to unleash their full potential. Last year, the competition attracted startups from 87 countries, and the 52 finalists raised more than $167M in venture investment since being selected. 

This year, over 3700 startups applied from 92 countries across XTC’s competition tracks: Agtech, Food & Water, Cleantech & Energy, Edtech, Enabling Tech, Fintech, Healthtech, and Mobility & Smart Cities. Check out the 80 Global Finalists that emerged from this competitive pool. The Category winners and the Special Awards winners will make it to the Global Finals stage. 

Join the Extreme Tech Challenge on 7/22 to meet the world’s best purpose-driven startups making the world better through transformative tech. Network with corporations, VCs, & founders. Get your free tickets here!

Today, we’re excited to share the agenda of the event with you.

Powering the Future Through Transformative Tech with Young Sohn (XTC), Bill Tai (XTC) and Beth Bechdol (Deputy Director-General, United Nations Food and Agriculture Organization) 

What are the breakthrough tech innovations transforming industries to build a radically better world? How can business, government, philanthropy, and the startup community come together to create a better tomorrow? Hear from these industry veterans and thought leaders about how technology can not only shape the future, but also where the biggest opportunities lie, including some exciting news about XTC and the United Nation’s Food and Agriculture Organization. 

Going Green with Shilpi Kumar (Urban Us), Jenny Rooke (Genoa Ventures), and Albert Wenger (Union Square Ventures)

Sustainability is the key to our planet’s future and our survival, but it’s also going to be incredibly lucrative and a major piece of our world economy. Hear from these seasoned investors and founders how VCs and startups alike are thinking about greentech and how that will evolve in the coming years.

The Extreme Tech Challenge 2021 Global Finals: Startup Pitches Part 1

The reason we’re all here – the XTC Category and Special Awards Winners get their chance to pitch their transformative tech ideas to a panel of expert judges and hear their feedback. XTC is a global platform that connects exceptional, purpose-driven startups with a network of investors, corporations, and mentors to help them raise capital, launch corporate collaborations, and scale their world-changing startups.

Waste Matters with Leon Farrant (Green Li-ion), Matanya Horowitz (AMP Robotics), and Elizabeth Gilligan (Material Evolution) 

According to the EPA, the U.S. alone produces 292.4 million tons of waste a year. Can technology help this massive – and growing – issue? Leon Farrant (Green Li-ion), Matanya Horowitz (AMP Robotics), and Elizabeth Gilligan (Material Evolution) will discuss their companies’ unique approaches to dealing with the problem.

The Extreme Tech Challenge 2021 Global Finals: Startup Pitches Part 2

The reason we’re all here – the XTC Category and Special Awards Winners get their chance to pitch their transformative tech ideas to a panel of expert judges and hear their feedback, in this second and final round. 

Cutting Out Carbon Emitters with Bioengineering with Aaron Nesser (AlgiKnit), Jennifer Holmgren (LanzaTech) and Patricia Bubner (Orbillion Bio)

Bioengineering may soon provide compelling, low-carbon alternatives in industries where even the best methods produce significant emissions. By utilizing natural and engineered biological processes, we may soon have low-carbon textiles from Algiknit, lab-grown premium meats from Orbillion Bio, and fuels captured from waste emissions via LanzaTech. Leaders from these companies will join our panel to talk about how bioengineering can do its part in the fight against climate change.

Announcement of the Extreme Tech Challenge 2021 Winners

The judging panel will crown the global winner of Extreme Tech Challenge 2021 and also announce the winner of the Female Founder Award.

Networking

Join thousands of investors, corporate executives, startups, and policymakers to network via video chat.

Join the Extreme Tech Challenge on July 22 to meet the world’s best purpose-driven startups making the world better through transformative tech. Network with corporations, VCs, & founders. Get your free tickets here!

Source: Tech Crunch