Month: July 2021

Duolingo landed onto the public markets this week, rallying excitement and attention for the edtech sector and its founder cohort. The language learning business’ stock price soared when it began to trade, even after the unicorn raised its IPO price range, and priced above the raised interval.

Duolingo’s IPO proves that public market investors can see the long-term value in a mission-driven, technology-powered education concern; the company’s IPO carries extra weight considering the historically few edtech companies that have listed.

For those that want the entire story of Duolingo, from origin to messy monetization to historical IPO, check out our EC-1. It has dozens of interviews from executives, investors, linguists and competitors.

For today, though, we have fresh additions. We sat down with Duolingo CEO Luis von Ahn earlier in the week to discuss not only his company’s IPO, but also what impact the listing may have on startups. Duolingo’s IPO can be looked at as a case study into consumer startups, mission-driven companies that monetize a small base of users, or education companies that recently hit scale. Paraphrasing from von Ahn, Duolingo doesn’t see itself as just an edtech company with fresh branding. Instead, it believes its growth comes from being an engineering-first startup.

Selling motivation, it seems, versus selling the fluency in a language is a proposition that international consumers are willing to pay for, and an idea that investors think can continue to scale to software-like margins.

1. The IPO event will bring “more sophistication” to Duolingo’s core service

Duolingo has gone through three distinct phases: Growth, in which it prioritized getting as many users as it could to its app; monetization, in which it introduced a subscription tier for survival; and now, education, in which it is focusing on tacking on more sophisticated, smarter technology to its service.

Source: Tech Crunch

Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.

The tech industry in China has had quite a turbulent week. The government is upending its $100 billion private education sector, wiping billions from the market cap of the industry’s most lucrative players. Meanwhile, the assault on Chinese internet giants continued. Tech stocks tumbled after Tencent suspended user registration, sparking fears over who will be the next target of Beijing’s wrath.

Incisive observers point out that the new wave of stringent regulations against China’s internet and education firms has long been on Beijing’s agenda and there’s nothing surprising. Indeed, the central government has been unabashed about its desires to boost manufacturing and contain the unchecked powers of its service industry, which can include everything from internet platforms, film studios to after-school centers.

A few weeks ago I had an informative conversation with a Chinese venture capitalist who has been investing in industrial robots for over a decade, so I’m including it in this issue as it provides useful context for what’s going on in the consumer tech industry this week.

Automate the factories

China is putting robots into factories at an aggressive pace. Huang He, a partner at Northern Light Venture Capital, sees three forces spurring the demand for industrial robots — particularly ones that are made in China.

Over the years, Beijing has advocated for “localization” in a broad range of technology sectors, from enterprise software to production line automation. One may start to see Chinese robots that can rival those of Schneider and Panasonic a few years down the road. CRP, an NLVC-backed industrial robot maker, is already selling across Southeast Asia, Russia and East Europe.

On top of tech localization, it’s also well acknowledged that China is facing a severe demographic crisis. The labor shortage in its manufacturing sector is further compounded by the reluctance of young people to do menial factory work. Factory robots could offer a hand.

“Youngsters these days would rather become food delivery riders than work in a factory. The work that robots replace is the low-skilled type, and those that still can’t be taken up by robots pay well and come with great benefits,” Huang observed.

Large corporations in China still lean toward imported robots due to the products’ proven stability. The problem is that imported robots are not only expensive but also selective about their users.

“Companies need to have deep technical capabilities to be able to operate these [Western] robots, but such companies are rare in China,” said Huang, adding that the overwhelming majority of Chinese enterprises are small and medium size.

With the exceptions of the automotive and semiconductor industries, which still largely rely on sophisticated, imported robots, affordable, easy-to-use Chinese robots can already meet most of the local demand for industrial automation, Huang said.

China currently uses nearly one million six-axis robots a year but only manufactures 20% of them itself. The gap, coupled with a national plan for localization, has led to a frenzy of investments in industrial robotics startups.

The rush isn’t necessarily a good thing, said Huang. “There’s this bizarre phenomenon in China, where the most funded and valuable industrial robotic firms are generating less than 30 million yuan in annual revenue and not really heard of by real users in the industry.”

“This isn’t an industry where giants can be created by burning through cash. It’s not the internet sector.”

Small-and-medium-size businesses are happily welcoming robots onto factory floors. Take welding for example. An average welder costs about 150,000 yuan ($23,200) a year. A typical welding robot, which is sold for 120,000 yuan, can replace up to three workers a year and “doesn’t complain at work,” said the investor. A quality robot can work continuously for six to eight years, so the financial incentive to automate is obvious.

Advanced manufacturing is not just helping local bosses. It will eventually increase foreign enterprises’ dependence on China for its efficiency, making it hard to cut off Chinese supply chains despite efforts to avoid the geopolitical risks of manufacturing in China.

“In electronics, for example, most of the supply chains are in China, so factories outside China end up spending more on logistics to move parts around. Much of the 3C manufacturing is already highly automated, which relies heavily on electricity, but in most emerging economies, the power supply is still quite unstable, which disrupts production,” said Huang.

War on internet titans

The shock of antitrust regulations against Alibaba from last year is still reverberating, but another wave of scrutiny has already begun. Shortly after Didi’s blockbuster IPO in New York, the ride-hailing giant was asked to cease user registration and work on protecting user information critical to national security.

On Tuesday, Tencent stocks fell the most in a decade after it halted user signups on its WeChat messenger as it “upgrades” its security technology to align with relevant laws and regulations. The gaming and social media giant is just the latest in a growing list of companies hit by Beijing’s tightening grip on the internet sector, which had been flourishing for two decades under laissez-faire policies.

Underlying the clampdowns is Beijing’s growing unease with the service industry’s unscrutinized accumulation of wealth and power. China is unequivocally determined to advance its tech sector, but the types of tech that Beijing wants are not so much the video games that bring myopia to children and algorithms that get adults hooked to their screens. China makes it clear in its five-year plan, a series of social and economic initiatives, that it will go all-in on “hard tech” like semiconductors, renewable energy, agritech, biotech and industrial automation like factory robotics.

China has also vowed to fight inequality in education and wealth. In the authorities’ eyes, expensive, for-profit after-schools dotting big cities are hindering education attainment for children from poorer areas, which eventually exacerbates the wealth gap. The new regulatory measures have restricted the hours, content, profits and financing of private tutoring institutions, tanking stocks of the industry’s top companies. Again, there have been clear indications from President Xi Jinping’s writings to bring off-campus tutoring “back on the educational track.” All China-focused investors and analysts are now poring over Xi’s thoughts and directives.

Source: Tech Crunch

The world has just witnessed one of the fastest work transformations in history. COVID-19 saw businesses send people home en masse, leaning on technology to maintain business as usual. Working from home, once the exception rather than the rule, became responsible for two-thirds of economic activity as an estimated 1.1 billion people around the world were forced to perform their daily jobs remotely, up from 350 million in 2019.

As we explain in the 2021 Accenture Technology Vision report, this transformation is just the beginning. Looking ahead, where and how people work will be much more flexible concepts with the potential to bring benefits to employees and employers alike. In fact, 87% of executives Accenture surveyed believe that the remote workforce opens up the market for difficult-to-find talent.

These benefits will only be fully realized if enterprises adopt a strategic approach to the future of work. Think back to a few years ago, when the bring your own device (BYOD) trend was in vogue. Faced with demand from workers to use their own devices in the enterprise setting, businesses had to think through new policies and controls to support this model.

Employers must now do the same thing, but on a much bigger scale. BYOD has become “BYOE”: Employees are bringing their entire environments to work. These environments include a broader range of worker-owned tech (smart speakers, home networks, gaming consoles, security cameras and more) and their work setting. One person may have a home office set up in a shed in their garden, another may be working from the kitchen table, surrounded by their family.

The workplace reimagined

Looking ahead, the BYOE-style of work won’t be limited to employees’ homes. People will be free to work from anywhere, and they will want to work in the environment that’s best for them — whether that’s the office, home or a hybrid mix of the two. This is something leaders must accommodate rather than fight.

Indeed, leaders can rethink the purpose of working at the warehouses, depots, factories, offices, labs and other locations that make up their businesses. They should consider carefully when it makes sense for people to be at certain sites and with certain people. They will thereby be able to optimize their operations.

A few years from now, the organizations that succeed will be the ones that resisted the urge to race everyone back to the office and instead rethought how their workforce operates. They will have put in place a robust strategy for change that includes the adoption of technology enablers like the cloud, AI, IoT and XR. But more importantly, this will outline how their reimagined workforce model can support and enable their people and how this can be reflected in the corporate culture.

Enabling the new

The first step toward this future requires gaining visibility into the employee experience. With BYOE, the employee experience has never been more important, but it has also never been harder to monitor. Workplace analytics will therefore be critical to understanding how employees’ environments are impacting their work and finding insights that can improve their experience and productivity.

Security is another primary enabler. Businesses need to accept that their employees’ environments are a permanent part of their enterprise and adjust them accordingly. IT security teams will have to do more than ensure that a worker’s laptop is secured with the latest firewall patches, and consider the worker’s network security and the security of all devices linked to that network, such as baby monitors and smart TVs.

Once the technology, analytics and security foundations are in place, businesses will be better positioned to unlock the full value of BYOE: operating model transformation. When companies go virtual-first, they have new opportunities to integrate emerging technologies into the workforce. With a virtual-first BYOE strategy, for example, businesses can have a warehouse full of robots doing the physical work, coupled with offsite employees safely monitoring and overseeing strategy.

Cultural change is key

Success in BYOE will also come down to culture. The enterprise must accept that the employee environment is now part of the “workplace” and accommodate people’s needs. This will be a large, slow-to-emerge cultural shift, but there will be quick wins, too.

Take the disconnect between in-person and remote workers as an example. So much is currently tied to geography, but the future will be all about balance. Workers in different roles will benefit from the work environment best suited to their needs. However, without careful implementation, the approach could lead to a divided workforce, where in-office and remote workers struggle to collaborate. Quora is already looking to overcome this challenge by requiring all employees who are attending meetings, regardless of whether they’re home or in the office, to appear on their own video screen.

Reimagining the organization for BYOE is a moving target and best practices are still emerging. But one thing is already clear: You can’t afford to wait. To attract the best talent and keep employees engaged, start planning now.

Source: Tech Crunch

Kodiak Robotics is one of the last private autonomous vehicles companies focused on trucking that is still standing. Nearly all the rest have been wooed by the public marketplace and the capital it can provide. But co-founder and CEO Don Burnette says the three-year-old company’s strategy of staying focused and small(er) is paying off.

It will be able to deploy a commercial-scale operation for about $500 million in funding, he says in the interview below. To put those go-to-market costs in perspective, that’s 10% of what Waymo has raised in external fundraising and less than 25% of newly publicly traded company TuSimple’s total fundraise.

Kodiak’s strategy is to take a specialized, hyperfocused approach to autonomous trucking that outsources a lot of tech, like data labeling, lidar, radar and mapping, to existing companies. Burnette, who was one of four founders of the self-driving truck startup Otto that Uber acquired, thinks this is a faster, cheaper and more efficient path to commercialization versus building out your own systems and teams.

The company is moving freight for commercial customers, dipping its toes in the market by working with technology partners within the existing ecosystem. Burnette says Kodiak’s Driver technology has achieved a level of maturity where it can handle anything the highway throws at it. In December, the startup achieved “disengagement-free deliveries” between Dallas and Houston, meaning the autonomous system didn’t have to be switched off for safety reasons.

The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity. 

You previously told me that Kodiak would need about $500 million in total funding to get to commercial driverless. You also said you’ve had some undisclosed funding rounds, but publicly, you’ve only raised $40 million. Can you still execute on your vision this far off?

Absolutely. We are always, as startups are, in fundraising mode. We’re always talking to investors. And there’s a lot of great things happening behind the scenes currently that we haven’t yet announced. We are growing, we’re hiring, if you can look to that as an indicator of the health of a company.

Our tech and our plan is really sound, and we are building up our commercialization efforts in a way that I think is going to be very exciting to the overall industry and to the market. We will need to raise more money, as you pointed out, that’s certainly no secret, but I think that we have multiple options to do that.

How do you intend to close that gap? Are you looking at venture capital, or maybe going for an IPO or SPAC?

We’re considering all of the above. It’s a constant conversation internally on what is the best path for Kodiak, what is the appetite of the various forms of investors and strategic relationships. Nothing is excluded.

The stock market is obviously very attractive and exciting. I think TuSimple has demonstrated that an IPO with the right set of metrics and the right set of momentum and partners is possible and can be successful. I think there’s also lots of opportunity within the VCs and the private markets. Kodiak is one of the only remaining serious AV trucking companies still in the private sector, and so I think that gives us some advantages in a lot of ways.

What’s your sense of the venture funding environment right now in autonomous? Is it harder now than it was, say, four years ago?

The appetite has changed. In particular, investors are more skeptical of timelines and promises. There is not this sense of Wild West excitement like there was four or five years ago, and that was the Golden Age of raising capital, certainly for earlier stage companies.

Kodiak was at the tail end of that age, and now the goalposts have changed, and the target investors have changed. It’s no longer the early-stage VCs that companies like Kodiak and others are talking to. It’s more of the growth-stage funds, and growth-stage funds look for different types of metrics. They look for commercial traction, product-market fit, users, efficiencies, etc.

Source: Tech Crunch

“The best thing a startup can do, and I’m seeing it happen more and more, is investing in community early on,” growth marketing expert Max van den Ingh of Unmuted tells us. “When I was leading growth at MisterGreen, we created a community for the first thousand Tesla Model 3 owners in the Netherlands. Everyone wanted to be a part of this founding tribe, learn from each other, get insights and so on.”

“This group turned out to be our most effective marketing tool,” he explains in an interview we published this week. “Word-of-mouth went through the roof. We had all of these people talking about our community at birthday parties, in their office, you name it. This is a great example of investing in marketing you can’t really measure, but which you do strongly believe in.”

Elsewhere in this week’s growth marketing recap, you’ll find TechCrunch’s coverage of growth marketing, and related topics, from the past week. You’ll also find a few recommendations for growth marketers. If you’d like to recommend a great one you’ve worked with, please fill out our survey.

Marketer: Scott Graham
Recommended by: Heather Larrabee, CMO, FORM
Testimonial: “He was referred to us and blew our socks off from his initial analysis. He’s the rare growth adviser expert at strategy and execution. He’s a servant leader, a systems thinker, integrates with the team with empathy and curiosity like he’s an internal teammate, brings a wealth of cutting-edge knowledge, and a stable of incredible partners and resources. He runs with the best and the brightest, but he’s the first one on and the last one off for the day, putting in the time to make things great. He has an uncanny ability to communicate complex concepts and make them accessible for all audiences, and he’s been a foundational game changer for our business and many others.”

Marketer: Ascendant
Recommended by: Robyn Weatherley, Thirdfort Limited
Testimonial: “Beyond their knowledge and experience (which is in abundance!), they have a deep understanding and appreciation for the unique challenges early-stage businesses have. They are in tune with the particular hurdles at various stages of growth and are able to adapt their working style dependent on those. They haven’t just helped us execute vital growth tactics, but they’ve helped us set up the framework to keep executing on those whether we are 5, 50 or 500 people. This is incredibly important as we scale and to demonstrate to future investors. They are also exceptional mentors and are able to offer real-world advice and work flexibly to suit the ever-changing nature of a high-growth early-stage business.”

Marketer: Ferdinand Goetzen
Recommended by: Willem van Roosmalen, Homerun
Testimonial: “Exceptional skills and experience in B2B SaaS, impressive track record, clear communicator, true leader, makes impact from day one, entrepreneur (actually launched his own start up, Reveall).”

Marketer: Adriana Ivascu, HoneyPot Dgtl
Recommended by: Mihaela Petre, Brussels Beer Project
Testimonial: “Besides her solid experience in growth and digital, Adriana has a genuine interest in growing not only the company but its people. She is hands-on in digital transformation but on top of it, she is a coach who inspires and brings the best in teams. We are very happy to have benefited from a long-term strategic growth path and a skill playbook that we can pass on to our whole organization.”

Marketer: Mariska Vroegindeweij, Growth & confetti
Recommended by: Hugo Pereira, EVBox
Testimonial: “[During our time working together] she was very young and bright. She started the Growth Marketing division on her own, built a team of developers, designers, advertisement specialists, product owners to drive conversion on the whole funnel from MQL to Opportunities. It’s hard to find a marketer that combines leadership skills with hardcore skills to drive growth. She was also very data-driven, challenged me a lot on assumptions and proved me wrong a few times by doing experiments and showcasing better ways to convert. And she was bold enough to start her own agency at a young age and doing well. Plus, she’s tons of fun.”

 

Help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.

 

The MKT1 interview: Growth marketing in 2021, hiring versus outsourcing and more: We hosted a Twitter Spaces with strategic marketing firm MKT1 recently, following a popular interview we published with them a few weeks ago. “The skill sets of growth marketers are in high demand,” co-founder Kathleen Estreich told host Danny Crichton during the event. “They always have been, but it feels pretty acute right now. Given that a lot of the companies are raising money earlier and starting to try and build that traction faster to grow into the valuations, we’re starting to see a huge need.” If you’re curious to see what skills are needed in growth marketing positions right now, take a look at the job board curated by MKT1.

Draft.dev CEO Karl Hughes on the importance of using experts in developer marketing: Anna Heim interviewed Karl Hughes, founder of Daft.dev, which works with a large number of developer tool companies. Hughes’ insights come from personal experience, “I’ve been a software developer, and then most recently was a CTO at a startup in Chicago, so I knew that there were lots of companies trying to reach developers [ … ] and that a lot of them were doing a poor job of it.” In this interview, Hughes addresses the mistakes made when targeting marketing toward developers, the steps that Draft.dev takes to mitigate them and more.

Unmuted founder Max van den Ingh on success beyond the metrics: “At Unmuted, when we start working with a new client, we perform a series of exercises together,” he told us in the interview. “This helps us get a clear picture of where the client is now and where they could be when we’ve optimized marketing. Next, instead of fixed numbers, like a specific amount of new customers in a given period, we focus on growth levers, like month-over-month growth in certain conversion or activation areas. Focusing on growth levers makes our work more actionable.” Read the interview with him for more about Unmuted’s “modern” marketing approach, setting realistic goals and trends seen in growth marketing during the pandemic.

Dan Olsen leads a product-market fit masterclass for the Startup Alley+ cohort: As part of Startup Alley+, TC Disrupt 2021 is offering a VIP experience where Dan Olsen will be holding a product-market fit masterclass. Olsen’s roster of clients includes Google, Facebook and Amazon.

Is there a startup growth marketing expert that you want us to know about? Let us know by filling out our survey.

Source: Tech Crunch

It all seems so simple. Instead of the dreaded back-and-forth on email, what if there was a solution that helped two parties (or multiple parties) schedule a call or a hangout?

Calendly was born out of that question. Today, the company is worth more than $3 billion, according to reports, and has more than 10 million users. The growth of the product is insane, with more than 1,000% growth from last year.

But that kind of success doesn’t come without hard work and dedication.

To hear more about the journey from bootstrapped to billions, Calendly founder and CEO Tope Awotona will join us at Disrupt this September.

P.S. Early Bird Tickets to Disrupt end today, Friday, July 30. Book your tickets now! 

Awotona put his entire life savings into Calendly and managed to bootstrap it for years before taking a $350 million funding round led by OpenView and Iconiq.

We’ll chat with Awotona about the early days of Calendly, how he navigated the hyper-growth phase, what made him choose to finally take institutional funding, his thoughts on pricing and packaging, and much more.

Awotona joins an incredible roster of speakers, including Secretary of Transportation Pete Buttigieg, Mirror’s Brynn Putnam, Chamath Palihapitiya, Slack CEO Stewart Butterfield and more. Plus, Disrupt features the legendary Startup Battlefield competition, where startups from across the globe compete for $100,000 and eternal glory.

Disrupt’s virtual format provides plenty of opportunity for questions, so come prepared to ask the experts about the issues that keep you up at night.

One post can’t possibly contain all of Disrupt’s events. Don’t miss the epic Startup Battlefield competition, hundreds of early-stage startups exhibiting in the Startup Alley expo area, special breakout sessions — like the Pitch Deck Teardown — and so much more.

TechCrunch Disrupt 2021 offers tons of opportunities. Don’t miss out on the first one — buy your Disrupt pass today, July 30, by 11:59 pm (PT) for less than $100. It’s a sweet deal!

Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.

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Source: Tech Crunch

Software developers and engineers have rarely been in higher demand. Organizations’ need for technical talent is skyrocketing, but the supply is quite limited. As a result, software professionals have the luxury of being very choosy about where they work and usually command big salaries.

In 2020, the U.S. had nearly 1.5 million full-time developers, who earned a median salary of around $110,000, according to the Bureau of Labor Statistics. Over the next 10 years, the federal agency estimates, developer jobs will grow by 22% to 316,000.

But what happens after a developer or engineer lands that sweet gig? Are they able to harness their skills and grow in interesting and challenging new directions? Do they understand what it takes to move up the ladder? Are they merely doing a job or cultivating a rewarding professional life?

These are the kinds of questions that have gnawed at me throughout my 25 years in the tech industry. I’ve long noticed that, to put it bluntly, many developers and engineers stink at managing their own careers.

It’s simply not a priority for some. By nature, developers delight in solving complex technical challenges and working hard toward their company’s digital objectives. Care for their own careers may feel unattractively self-promotional or political — even though it’s in fact neither. Charting a career path may feel awkward or they just don’t know how to go about it.

Companies owe it to developers and engineers, and to themselves, to give these key people the tools to understand what it takes to be the best they can be. How else can developers and engineers be assured of continually great experiences while constantly expanding their contributions to their organizations?

Coaching and mentoring can help, but I think a more formal management system is necessary to get the wind behind the sails of a companywide commitment to making developers and engineers believe that, as the late Andy Grove said, “Your career is your business and you are its CEO.”

That’s why I created a career development model for developers and engineers when I was an Intel Fellow at Intel between 2003 and 2013. This framework has since been put into practice at the three subsequent companies I worked at — Google, VMWare, and, now, Juniper Networks — through training sessions and HR processes.

The model is based on a principle that every developer can relate to: Treat career advancement as you would a software project.

That’s right, by thinking of career development in stages like those used in app production, developers and engineers can gain a holistic view of where they are in their professional lives, where they want to go and the gaps they need to fill.

Step 1: Functional specification

In software development, a team can’t get started until it has a functional specification that describes the app’s requirements and how it is supposed to perform and behave.

Why should a career be any different? In my model, folks begin by assessing the “functionality” expected of someone at their next career level and how they’re demonstrating them (or not). Typically, a person gets promoted to a higher level only when they already demonstrate that they are operating at that level.

Source: Tech Crunch