Business News

Startups Weekly: The mad dash to the public markets

Startup News - 2019, August 17 - 9:00pm

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about the differences between raising cash from angels and traditional venture capitalists. Before that, I summarized DoorDash’s acquisition of Caviar.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

It’s Friday morning and I don’t want to dig into another IPO prospectus. The startups don’t care though, they’re in a mad dash to get to the public markets, reporters be damned.

This week, three billion-dollar venture-backed “unicorns” unveiled S-1 filings, the paperwork necessary to complete an IPO. First came WeWork, the $47 billion co-working giant beloved by SoftBank. Then came Cloudflare, a business that provides web security and denial-of-service protection for websites. Then this morning, after we all thought it was time for a breather, “teledentistry” company SmileDirectClub made its filing public.

There’s plenty to read on each of these high-profile IPOs; here’s a quick reading list:

WeWork

WeWork reveals IPO filing
WeWork’s S-1 misses these three key points
Making sense of WeWork’s S-1 (or trying to)

Cloudflare

Cloudflare files for initial public offering
Cloudflare says cutting off customers like 8chan is an IPO ‘risk factor’
In its IPO filing, Cloudflare thanks a third co-founder: Lee Holloway

SmileDirectClub
SmileDirectClub files to go public amid concerns from dental associations

On to other things…

Meet the startups in Y Combinator’s summer batch
As you may know, YC summer demo days are next week. A whopping 176 companies are expected to present and we’ll be there reporting live, as usual. In preparation, we’ve been cherry-picking companies in the latest batch that interest us. Here’s a look at our latest — more to come:

Equity Podcast
This was a very special week for Equity. We taped two great episodes, one in which we hung out with Axios’ Dan Primack in Boston, the other featuring me recording out of a New York City Blue Bottle Coffee shortly after WeWork dropped its S-1 filing. You can listen to our latest episodes here and here. Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts or Spotify.

Extra Crunch
In our latest installment of EC-1, in which go deep on an up-and-coming startup, TechCrunch’s Eric Peckham tells the founding story of Kobalt, the world’s next music tech unicorn. Here’s a passage from Peckham’s extensive piece: “You may not have heard of Kobalt before, but you probably engage with the music it oversees every day, if not almost every hour. Combining a technology platform to better track ownership rights and royalties of songs with a new approach to representing musicians in their careers, Kobalt has risen from the ashes of the 2000 dot-com bubble to become a major player in the streaming music era. It is the leading alternative to incumbent music publishers (who represent songwriters) and is building a new model record label for the growing ‘middle class’ of musicians around the world who are stars within niche audiences.”

Categories: Business News

ClearBrain launches analytics tools focused on connecting cause and effect

Startup News - 2019, August 17 - 6:39am

Businesses need to understand cause and effect: Someone did X and it increased sales, or they did Y and it hurt sales. That’s why many of them turn to analytics — but Bilal Mahmood, co-founder and CEO of ClearBrain, said existing analytics platforms can’t answer that question accurately.

“Every analytics platform today is still based on a fundamental correlation model,” Mahmood said. It’s the classic correlation-versus-causation problem — you can use the data to suggest that an action and a result are related, but you can’t draw a direct cause-and-effect relationship.

That’s the problem that ClearBrain is trying to solve with its new “causal analytics” tool. As the company put it in a blog post, “Our goal was to automate this process [of running statistical studies] and build the first large-scale causal inference engine to allow growth teams to measure the causal effect of every action.”

You can read the post for (many) more details, but the gist is that Mahmood and his team claim they can draw accurate causal relationships where others can’t.

The idea is to use this in conjunction with A/B testing — customers look at the data to prioritize what to test next, and to make estimates about the impact of things that can’t be tested. Otherwise, Mahmood said, “If you wanted to measure the actual impact of every variable on your website and your app — the actual impact it has on conversation — it could take you years.”

When I wrote about ClearBrain last year, it was using artificial intelligence to improve ad targeting, but Mahmood said the company built the new analytics technology in response to customer demand: “People didn’t just want to know who was going to convert, they wanted to know why, and what caused them to do so.”

The causal analytics tool is currently available to early access users, with plans for a full launch in October. Mahmood said there will be a number of pricing tiers, but they’ll be structured to make the product free for many startups.

In addition to launching the analytics tool in early access, ClearBrain also announced this week that it’s raised an additional $2 million in funding from Harrison Metal and Menlo Ventures.

ClearBrain uses AI to help advertisers target the right users

Categories: Business News

How ‘ghost work’ in Silicon Valley pressures the workforce, with Mary Gray

Startup News - 2019, August 17 - 4:04am

The phrase “pull yourself up by your own bootstraps” was originally meant sarcastically.

It’s not actually physically possible to do — especially while wearing Allbirds and having just fallen off a Bird scooter in downtown San Francisco, but I should get to my point.

This week, Ken Cuccinelli, the acting Director of the United States Citizenship and Immigrant Services Office, repeatedly referred to the notion of bootstraps in announcing shifts in immigration policy, even going so far as to change the words to Emma Lazarus’s famous poem “The New Colossus:” no longer “give me your tired, your poor, your huddled masses yearning to breathe free,” but “give me your tired and your poor who can stand on their own two feet, and who will not become a public charge.”

We’ve come to expect “alternative facts” from this administration, but who could have foreseen alternative poems?

Still, the concept of ‘bootstrapping’ is far from limited to the rhetorical territory of the welfare state and social safety net. It’s also a favorite term of art in Silicon Valley tech and venture capital circles: see for example this excellent (and scary) recent piece by my editor Danny Crichton, in which young VC firms attempt to overcome a lack of the startup capital that is essential to their business model by creating, as perhaps an even more essential feature of their model, impossible working conditions for most everyone involved. Often with predictably disastrous results.

It is in this context of unrealistic expectations about people’s labor, that I want to introduce my most recent interviewee in this series of in-depth conversations about ethics and technology.

Mary L. Gray is a Fellow at Harvard University’s Berkman Klein Center for Internet and Society and a Senior Researcher at Microsoft Research. One of the world’s leading experts in the emerging field of ethics in AI, Mary is also an anthropologist who maintains a faculty position at Indiana University. With her co-author Siddharth Suri (a computer scientist), Gray coined the term “ghost work,” as in the title of their extraordinarily important 2019 book, Ghost Work: How to Stop Silicon Valley from Building a New Global Underclass. 

Image via Mary L. Gray / Ghostwork / Adrianne Mathiowetz Photography

Ghost Work is a name for a rising new category of employment that involves people scheduling, managing, shipping, billing, etc. “through some combination of an application programming interface, APIs, the internet and maybe a sprinkle of artificial intelligence,” Gray told me earlier this summer. But what really distinguishes ghost work (and makes Mary’s scholarship around it so important) is the way it is presented and sold to the end consumer as artificial intelligence and the magic of computation.

In other words, just as we have long enjoyed telling ourselves that it’s possible to hoist ourselves up in life without help from anyone else (I like to think anyone who talks seriously about “bootstrapping” should be legally required to rephrase as “raising oneself from infancy”), we now attempt to convince ourselves and others that it’s possible, at scale, to get computers and robots to do work that only humans can actually do.

Ghost Work’s purpose, as I understand it, is to elevate the value of what the computers are doing (a minority of the work) and make us forget, as much as possible, about the actual messy human beings contributing to the services we use. Well, except for the founders, and maybe the occasional COO.

Facebook now has far more employees than Harvard has students, but many of us still talk about it as if it were little more than Mark Zuckerberg, Cheryl Sandberg, and a bunch of circuit boards.

But if working people are supposed to be ghosts, then when they speak up or otherwise make themselves visible, they are “haunting” us. And maybe it can be haunting to be reminded that you didn’t “bootstrap” yourself to billions or even to hundreds of thousands of dollars of net worth.

Sure, you worked hard. Sure, your circumstances may well have stunk. Most people’s do.

But none of us rise without help, without cooperation, without goodwill, both from those who look and think like us and those who do not. Not to mention dumb luck, even if only our incredible good fortune of being born with a relatively healthy mind and body, in a position to learn and grow, here on this planet, fourteen billion years or so after the Big Bang.

I’ll now turn to the conversation I recently had with Gray, which turned out to be surprisingly more hopeful than perhaps this introduction has made it seem.

Greg Epstein: One of the most central and least understood features of ghost work is the way it revolves around people constantly making themselves available to do it.

Mary Gray: Yes, [What Siddarth Suri and I call ghost work] values having a supply of people available, literally on demand. Their contributions are collective contributions.

It’s not one person you’re hiring to take you to the airport every day, or to confirm the identity of the driver, or to clean that data set. Unless we’re valuing that availability of a person, to participate in the moment of need, it can quickly slip into ghost work conditions.

Categories: Business News

Lumineye helps first responders identify people through walls

Startup News - 2019, August 17 - 3:20am

Any first responder knows that situational awareness is key. In domestic violence disputes, hostage rescue or human trafficking situations, first responders often need help determining where humans are behind closed doors.

That’s why Megan Lacy, Corbin Hennen and Rob Kleffner developed Lumineye, a 3D-printed radar device that uses signal analysis software to differentiate moving and breathing humans from other objects, through walls.

Lumineye uses pulse radar technology that works like echolocation (how bats and dolphins communicate). It sends signals and listens for how long it takes for a pulse to bounce back. The software analyzes these pulses to determine the approximate size, range and movement characteristics of a signal.

On the software side, Lumineye’s app will tell a user how far away a person is when they’re moving and breathing. It’s one dimensional, so it doesn’t tell the user whether the subject is to the right or left. But the device can detect humans out to 50 feet in open air; that range decreases depending upon the materials placed in between, like drywall, brick or concrete.

One scenario the team gave to describe the advantages of using Lumineye was the instance of hostage rescue. In this type of situation, it’s crucial for first responders to know how many people are in a room and how far away they are from one another. That’s where the use of multiple devices and triangulation from something like Lumineye could change a responding team’s tactical rescue approach.

Machines that currently exist to make these kind of detections are heavy and cumbersome. The team behind Lumineye was inspired to manufacture a more portable option that won’t weigh down teams during longer emergency response situations that can sometimes last for up to 12 hours or overnight. The prototype combines the detection hardware with an ordinary smartphone. It’s about 10 x 5 inches and weighs 1.5 pounds.

Lumineye wants to grow out its functionality to become more of a ubiquitous device. The team of four is planning to continue manufacturing the device, selling it directly to customers.

 

Lumineye’s device can detect humans through walls using radio frequencies

Lumineye has just started its pilot programs, and recently spent a Saturday at a FEMA event testing out the the device’s ability to detect people covered in rubble piles. The company was born out of the Boise, Idaho cohort of Stanford’s Hacking4Defense program, a course meant to connect Silicon Valley innovations with the U.S. Department of Defense and Intelligence Community. The Idaho-based startup is graduating from Y Combinator’s Summer 2019 class.

Megan Lacy, Corbin Hennen and Rob Kleffner

Categories: Business News

Slack co-founder Cal Henderson and Spark Capital’s Megan Quinn are coming to Disrupt SF

Startup News - 2019, August 17 - 3:14am

If there was one company at the top of everyone’s mind this year, it was Slack.

The now-ubiquitous workplace messaging tool began trading on the New York Stock Exchange in June after taking an unusual route to the public markets known as a direct listing. Slack bypassed the typical IPO process in favor of putting its current stock on to the NYSE without doing an additional raise or bringing on underwriter banking partners.

Slack co-founder and chief technology officer Cal Henderson and Slack investor and Spark Capital general partner Megan Quinn will join us on stage at TechCrunch Disrupt SF to give a behind the scenes look at Slack’s banner year, the company’s origin story and what convinced Quinn to participate in the business’s funding round years ago.

Early in his career, Henderson was the technical director of Special Web Projects at Emap, a UK media company. Later, he became the head of engineering for Flickr, the photo-sharing tool co-founded by Slack chief Steward Butterfield. In April 2009, he was reported to be starting a new stealth social gaming company with Butterfield, a project that would ultimately become Slack.

Quinn, for her part, added Slack to the Spark Capital portfolio in 2015, participating in the company’s $160 million Series E at a valuation of $2.8 billion. No small startup at the time, Slack already had 750,000 daily users and backing from Accel, Andreessen Horowitz, Social Capital, GV and Kleiner Perkins.

Quinn is a seasoned investor, known for striking deals with Coinbase, Glossier, Rover and Wealthfront, among others. She first entered the venture capital scene in 2012 as an investment partner at Kleiner Perkins, where she invested in early to mid-stage consumer tech startups. Quinn joined Spark Capital in 2015 to make growth-stage investments in companies across the board.

Before trying her hand at VC, she spent seven years in product management and strategic partnership development at Google and one year as the head of product at payments company Square.

Disrupt SF runs October 2 to October 4 at the Moscone Center in San Francisco. Tickets are available here.

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Categories: Business News

Showcase your startup in Startup Alley at Disrupt SF 2019

Startup News - 2019, August 17 - 2:00am

What’s the lifeblood of any early-stage startup? Money and media coverage. Opportunities to acquire both abound at Disrupt San Francisco 2019, our flagship tech conference that takes place on October 2-4. It’s all about networking and making the right connections to make your startup dreams come true, and there’s no better networking mecca than Startup Alley.

Buy a Startup Alley Exhibitor Package and plant your early-stage startup in the path of more than 10,000 attendees, including leading technologists, investors, 400 accredited media outlets and other leading influencers. The package includes one full exhibit day and three Founder passes.

You’ll have access to three days of Disrupt programming across the Main Stage, the Extra Crunch Stage, the Showcase Stage and the Q&A Stage. You can watch Startup Battlefield, our epic pitch competition, to see who takes home the $100,000 prize. You’ll also receive invitations to VIP events, like a reception with top-tier investors and global media outlets.

You’ll have CrunchMatch at your side to make networking as easy as possible. This free, business match-making platform helps you find and connect with the people who can move your business forward. It matches people based on their mutual business interests, suggests meetings and sends out invitations (which recipients can easily accept or decline). CrunchMatch even lets you reserve dedicated meeting spaces where you can network in comfort.

And how’s this for opportunity? Every early-stage startup that exhibits in Startup Alley is eligible for a chance to win a Wild Card entry to the Startup Battlefield pitch competition. TechCrunch editors will select two standout startups as Wild Card teams to compete for $100,000 in Startup Battlefield.

It might sound like a longshot (and it is), but RecordGram earned a Wild Card spot and went on to become the Startup Battlefield champ at Disrupt NY 2017. Because dreams do come true.

Disrupt San Francisco 2019 takes place on October 2-4. Buy a demo table, exhibit in Startup Alley and network your way to greatness. Come on and show the world what you’ve got.

Is your company interested in sponsoring at Disrupt SF 2019? Contact our sponsorship sales team by filling out this form.

Categories: Business News

Startup ads are taking over the subway

Startup News - 2019, August 17 - 1:31am

If you’re a New Yorker, one of the easiest ways to keep up-to-date on the latest consumer products — furniture, beauty products, mobile apps, you name it — is to hop on the subway.

Even before you board, you may find yourself walking through a station filled with colorful startup ads. And once you’re actually on the train, you may find yourself surrounded by even more of those of ads.

It felt very different when I first moved to New York in 2013, back when the only companies that seemed to buy subway ads were local colleges, law firms and sketchy-sounding surgeons. Over the next few years, I noticed that the companies I wrote about in TechCrunch were starting to show up on the subway walls.

These ads are managed by Outfront Media, which has an exclusive contract with the MTA and says it’s worked with more than 150 startups and direct-to-consumer brands since 2018.

“Startups and DTC brands, now more than ever before, are looking for ways to raise awareness and gain market share among a heavy competitor set,” said Outfront’s chief product experience officer Jason Kuperman via email. “For these brands, it is all about testing and learning, and leveraging out-of-home (OOH) [advertising] and advertising on the subway allows them to do just that.”

Kuperman added that when they launch their subway campaigns, many of these startups are unknown, so they “find value in a permanent place to advertise that people pass through every day.”

From out-of-home to in transit

John Laramie, CEO of out-of-home advertising agency Project X, agreed that there’s been a big shift over the past few years.

He and I first spoke in 2011 about startups buying billboard ads alongside Silicon Valley’s main highway, Route 101. More recently, he told me, “Fast forward to the last four years, and who cares about the 101? It’s all about the New York City subway.”

Categories: Business News

SmileDirectClub files to go public amid concerns from dental associations

Startup News - 2019, August 17 - 1:31am

SmileDirectClub, the at-home teeth-straightening service, is on its way to becoming a public company. SmileDirectClub is seeking to raise up to $100 million in its IPO, according to its S-1 filed today. The number of shares and price range for the offering have yet to be determined.

Prior to this, SmileDirectClub reached a $3.2 billion valuation following a $380 million funding round last October. Investors from Clayton, Dubilier & Rice led the round, which featured participation from Kleiner Perkins and Spark Capital. This funding came on top of Invisalign maker Align Technology’s $46.7 million investment in SmileDirectClub in 2016, and another $12.8 million investment in 2017 to own a total of 19% of the company.

In 2018, SmileDirectClub’s revenues came in at $432.2 million, a significant uptick from just $147 million the year prior.

The company ships invisible aligners directly to customers, and licensed dental professionals (either orthodontists or general dentists) remotely monitor the progress of the patient. Before shipping the aligners, patients either take their dental impressions at home and send them to SmileDirectClub or visit one of the company’s “SmileShops” to be scanned in person. SmileDirectClub says it costs 60% less than other types of teeth-straightening treatments, with the length of treatments ranging from four to 14 months. The average treatment lasts six months.

Though, members of the American Association of Orthodontists have taken issue with SmileDirectClub, previously asserting that SmileDirectClub violates the law because its methods of allowing people to skip in-person visits and X-rays is “illegal and creates medical risks.” The organization has also filed complaints against SmileDirectClub in 36 states, alleging violations of statutes and regulations governing the practice of dentistry. Those complaints were filed with the regulatory boards that oversee dentistry practices and with the attorneys general of each state.

SmileDirectClub explicitly calls out those issues in its S-1 as potential risk factors. Here’s a key nugget:

A number of dental and orthodontic professionals believe that clear aligners are appropriate for only a limited percentage of their patients. National and state dental associations have issued statements discouraging use of orthodontics using a teledentistry platform. Increased market acceptance of our remote clear aligner treatment may depend, in part, upon the recommendations of dental and orthodontic professionals and associations, as well as other factors including effectiveness, safety, ease of use, reliability, aesthetics, and price compared to competing products.

Furthermore, our ability to conduct business in each state is dependent, in part, upon that particular state’s treatment of remote healthcare and that state dental board’s regulation of the practice of dentistry, each which are subject to changing political, regulatory, and other influences. There is a risk that state authorities may find that our contractual relationships with our doctors violate laws and regulations prohibiting the corporate practice of dentistry, which generally bar the practice of dentistry by entities. Two state dental boards have established new rules or interpreted existing rules in a manner that purports to limit or restrict our ability to conduct our business as currently conducted.

Additionally, as the S-1 notes, a national dental association recently filed a petition with the U.S. Food and Drug Administration claiming that SmileDirectClub’s manufacturing violates “prescription only” requirements. While no regulations or laws have been passed that would affect SmileDirectClub to date, it’s a possible scenario that would greatly impact the company’s core business.

Tech startups want to go inside your mouth

Categories: Business News

Y Combinator-backed Holy Grail is using machine learning to build better batteries

Startup News - 2019, August 17 - 12:52am

For a long, long time, renewable energy proponents have considered advancements in battery technology to be the Holy Grail of the industry.

Advancements in energy storage has been among the hardest to achieve economically, thanks to the incredibly tricky chemistry that’s involved in storing power.

Now, one company that’s launching from Y Combinator believes it has found the key to making batteries better. The company is called Holy Grail and it’s launching in the accelerator’s latest cohort.

With an executive team that initially included Nuno Pereira, David Pervan and Martin Hansen, Holy Grail is trying to bring the techniques of the fabless semiconductor industry to the world of batteries.

The company’s founders believe that the only way to improve battery functionality is to take a systems approach to understanding how different anodes and cathodes will work together. It sounds simple, but Pereira says the computational power hadn’t existed to take into account all of the variables that go along with introducing a new chemical to the battery mix.

“You can’t fix a battery with just a component,” Pereira says. “All of the batteries that were created and failed in the past. They create an anode, but they don’t have a chemical that works with the cathode or the electrolyte.”

For Pereira, the creation of Holy Grail is the latest step on a long road of experimentation with mechanical and chemical engineering. “As a kid I was more interested in mechanical engineering and building stuff,” he says. But as he began tinkering with cars and became fascinated with mobility, he realized that batteries were the innovation that gave the world its charge.

In 2017 Pereira founded a company called 10Xbattery, which was making high-density lithium batteries. That company, launching with what Pereira saw as a better chemistry, encapsulated the industry’s problem at large — the lack of a holistic approach to development.

So, with the help of a now-departed co-founder, Pereira founded Holy Grail. “He essentially told me, ‘Do you want to take a step back and see if there’s a better way to do this?’ ” said Pereira.

The company pitches itself as science fiction coming from the future, but it relies on a combination of what are now fairly standard (at least in the research community) tools. Holy Grail’s pitch is that it can automate much of the research and development process to create new batteries that are optimized to the specifications of end customers.

“It’s hard for a human to do the experiments that you need and to analyze multidimensional data,” says Pereira. “There are some companies that only do the machine-learning part and the computational science part and sell the results to companies. The problem is that there’s a disconnection between experimental reality and the simulations.”

Using computer modeling, chemical engineering and automated manufacturing, Holy Grail pitches a system that can get real test batteries into the hands of end customers in the mobility, electronics and utility industries orders of magnitude more quickly than traditional research and development shops.

Currently the system that Holy Grail has built out can make 700 batteries per day. The company intends to  build a pilot plant that will make batteries for electronics and drones. For automotive and energy companies, Holy Grail says it will partner with existing battery manufacturers that can support the kind of high-throughput manufacturing big orders will require.

Think of it like bringing the fabless chip design technologies and business models to the battery industry, says Pereira.

Holy Grail already has $14 million in letters of intent with potential customers, according to Pereira, and is expecting to close additional financing as it exits Y Combinator.

To date the company has been backed by the London-based early-stage investment firm Deep Science Ventures, where Pereira worked as an entrepreneur in residence.

Ultimately, the company sees its technology being applied far beyond batteries as a new platform for materials science discoveries broadly. For now, though, the focus is on batteries.

“For the low volume we sell direct,” says Pereira. “While on high-volume production, we will implement a pilot line through the system… we are able to do the research engineering with the small ones and test the big ones. In our case when we have a cell that works, it’s not something that works in a lab, it’s something that works in the final cell.”

Categories: Business News

Y Combinator-backed Narrator wants to become the operating system for data science

Startup News - 2019, August 17 - 12:18am

Cedric Dussud, Michael Nason, Ahmed Elsamadisi and Matthew Star (pictured above, in order) spent the summer sharing a house in San Francisco, cooking meals together and building Narrator, a startup with ambitions of becoming a universal data model fit for any company.

Narrator is one of more than 100 startups graduating next week from Y Combinator, the San Francisco accelerator program. Put simply, the company provides data-science-as-a-service to its customers: fellow startups.

“We provide the equivalent of a data team for the price of an analyst,” explains Narrator co-founder and director of engineering Star. “Within the first month, our clients get an infinitely scalable data system.”

Led by chief executive officer Elsamadisi, a former senior data engineer at WeWork, the Narrator founding team is made up entirely of alums of the co-working giant. The building blocks of Narrator’s subscription-based data modeling tool were developed during Elsamadisi’s WeWork tenure, where he was tasked with making sense of the company’s disorganized trove of data.

As an early addition to WeWork’s data team, Elsamadisi spent two years bringing WeWork’s data to one place, scaling the team to 40 people and ultimately creating a functional data model the soon-to-be-public company could use to streamline operations. Then in 2017, Elsamadisi had an a-ha moment. The system he created at WeWork could be applied to any data stream, he thought.

“All companies are fundamentally the same when it comes to the kinds of data they want to understand about their business,” Narrator’s Dussud tells TechCrunch. “Every startup wants to know what’s my monthly recurring revenue, why are my customers churning or whatever the case may be. The only reason they have to go hire a data team and hire a business analyst is because the way that their data is structured is specific to that company.”

All Narrator clients use the same consistent format to absorb and manage their data, saving startups time and heaps of money.

Narrator follows a long line of Y Combinator graduates that built startups catering to other startups, as the accelerator becomes more of a SaaS incubator of sorts. PagerDuty and Docker proved that YC companies could build with a strong focus on other YC companies. Brex, a recent YC grad that issues credit cards to entrepreneurs, has leveraged the same startup-focused model for big-time success.

“Why not build a company to make something that other startups can have?” Asks Dussud. “It’s hugely valuable and only big companies have access to it. Let’s make it available to everybody.”

New York-based Narrator sees a massive opportunity ahead. Every company, after all, wants to increase revenue or decrease costs, a difficult task easier accomplished with a data-driven culture.

“If you start to imagine a world where, under the hood, the structure of the data at all companies is the same, you can now start reusing a lot of the things that in the past would actually be quite complicated,” said Star. “Right now, anytime you want to start from scratch with a new data system, you are literally starting from scratch and unfortunately reinventing the wheel. If you had a standardized system, you know, a standardized model, you could start reusing a lot of really wonderful things.”

Narrator is working with 14 clients today, each using an identical data model. Their goal is for Narrator’s structure to become the standard by which all startups do data science. In other words, Narrator hopes to become the operating system for data science.

“What’s kind of amazing is whether we’re working with a financial app … a clothing rental startup or a healthcare company, they’re all using the same data model,” said Star. “Any one of those teams, if they wanted to get the same level of analysis, they would have to hire a data analyst.”

Narrator raised $1.3 million in seed funding led by Flybridge Capital Partners prior to joining YC. Hot off the heels of the accelerator program, there’s no doubt the startup will close another round of financing soon.

To fund Y Combinator’s top startups, VCs scoop them before Demo Day

Categories: Business News

How should B2B startups think about growth? Not like B2C

Startup News - 2019, August 16 - 11:09pm
Tyler Elliston & Kevin Barry Contributor Tyler Elliston is the founder of Right Side Up, a collective of growth marketers that primarily helps early to mid-stage companies scale. Kevin Barry is the co-founder of Right Percent, a B2B-only performance marketing agency that develops tailored acquisition strategies for early to mid-stage companies.

Over the years, we’ve seen a lot of B2B companies apply ineffective demand generation strategies to their startup. If you’re a B2B founder trying to grow your business, this guide is for you.

Rule #1: B2B is not B2C. We are often dealing with considered purchases, multiple stakeholders, long decision cycles, and massive LTVs. These unique attributes matter when developing a growth strategy. We’ll share B2B best practices we’ve employed while working with awesome B2B companies like Zenefits, Crunchbase, Segment, OnDeck, Yelp, Kabbage, Farmers Business Network, and many more. Topics covered include:

  • Descriptions of growth stages you can use to determine your company’s status
  • Tactics for each stage with specific examples
  • Which advertising channels work best
  • Optimization of your ad copy to maximize CTR and conversions
  • Optimization of your sales funnel
  • Measuring the ROI of your advertising spend

We often crack growth for companies that didn’t think it was possible, based on their prior experience with agencies and/or internal resources. There are many misconceptions out there about B2B growth, rooted in the misapplication of B2C strategies and leading to poor performance. Study the differences and you’ll develop a filter for all the advice you get that’s good for one context (ex: B2C) but bad for another (ex: B2B). This guide will get you off on the right foot.

Table of Contents
  • What growth stage is your B2B startup?
  • How do you find B2B customers?
  • When do you use which channels?
  • What kind of marketing messaging should you use?
  • How do you build your sales funnel?
  • How should you calculate and use the ROI of your marketing budget?
  • In summary

What growth stage is your B2B startup?

The best growth strategy for your company ultimately depends on whether you’re in an incubation, iteration, or scale stage. One of the most common mistakes we see is a company acting like they’re in the scale phase when they’re actually in the iteration phase. As a result, many of them end up developing inefficient growth strategies that lead to exorbitant monthly ad spends, extraneous acquisition channels, hiring (and later firing) ineffective team members, and de-emphasizing critical customer feedback. There is often an intense pressure to grow, but believing your own hype before it’s real can kill early-stage ventures. Here’s a breakdown of each stage:

Incubation is when you are building your minimum viable product (MVP). This should be done in close partnership with potential customers to ensure you are solving a real problem with a credible solution. Typically a founder is a voice of the customer, as someone who experienced the problem and sought out the solution s/he is now building. Other times, founders enter a new space and build a panel of prospective buyers to participate in the product development process. The endpoint of this phase is a working MVP.

Iteration is when you have customers using your MVP and you are rapidly improving the product. Success at this stage is rooted in customer insights – both qualitative and quantitative – not marketing excellence. It’s valuable to include in this iterative process customers with whom the founder(s) have no prior relationship. You want to test the product’s appeal, not friends’ willingness to help you out. We want a customer set that is an accurate sample of a much larger population you will later sell to. The endpoint of the iteration phase is product/market fit.

Scale is when you have product/market fit and are trying to grow your customer base. The goal of this phase is to build a portfolio of tactics that maximize market penetration with minimal – or at least profitable – cost. Success is rooted in growing lifetime value through retention and margin, maximizing funnel conversion to efficiently convert leads to customers, and finding repeatable tactics to drive prospective buyers’ awareness and consideration of your product. The endpoint of this phase is ultimately market saturation, leading to the incubation and iteration of new features, customer segments, and geographies.

How do you find B2B customers? 

Here’s a list of B2B customer acquisition tactics we commonly employ and recommend. Later in this article, we’ll connect each channel to the growth stage it’s best used in. This list is generally sorted by early stage to later stage:

1. Leverage your network. This is particularly valuable for founders who are building a product based on their own past experience.

  • Reach out to old colleagues you know have the same problem you had (and are solving).
  • Leverage the startup ecosystem. If your startup is in YCombinator, for instance, other companies in your batch may be prospects, along with alumni who will take your call simply because of your affiliation.
  • Example: If you’re building an app for marketers, ask past marketing colleagues you’ve worked with to try out your product is a no brainer.

Categories: Business News

Protein replacement startups are coming for food additives as Shiru launches from Y Combinator

Startup News - 2019, August 16 - 9:41pm

Shiru, a new company that’s launching from the latest batch of Y Combinator-backed startups, is joining the ranks of the businesses angling for a spot at the vanguard of the new food technology revolution.

The company was founded by Jasmin Hume, the former director of food chemistry at Just (the company formerly known as Hampton Creek) and takes its name from a homophone of the Chinese shi rou (which Hume has roughly translated to an examination of meat). At Just, Hume was working with a team that was fractionating plants to look at their physical properties to identify what products could be made from the various proteins and chemicals researchers found in the plants.

Shiru, by contrast, is using computational biology to find the ideal proteins for specific applications in the food industry.

The company’s looking at what proteins are best for creating certain kinds of qualities that are used in food additives — things like viscosity building, solubility, foam stability, emulsification and binding, according to Hume.

In some ways, Hume’s approach looks similar to the early product roadmap for Geltor, a company backed by SOSV and IndieBio that was also looking to make functional proteins. The company, which has raised over $18 million to date, shifted its attention to proteins for the beauty industry and cosmetics instead of food — potentially leaving an opening for Shiru to exploit.

 Still in its early days, Shiru doesn’t have a product nailed down yet, but the science the company is exploring is increasingly well understood, and Hume says it’s looking at several different genetically engineered feedstocks — from yeasts to undisclosed strains of bacteria and fungi to make its proteins. 

“We use the power of molecular design and machine learning to identify protein structures that are more functional than existing alternatives,” says Hume. “The proteins that we are screening for are inspired by nature.”

Hume’s path to founding Shiru involves quite the pedigree. Before Just, she received her doctorate in materials chemistry from New York University, and she’d spent a stretch as a summer associate at the New York-based frontier technology-focused investment firm Lux Capital.

Hume expects to begin pilot production of initial proteins later this year and be producing small but repeatable quantities by the end of 2020.

The company hasn’t raised any outside capital before Y Combinator and is currently in the process of raising a round, Hume said.

Categories: Business News

How-to: Exhibit for free in Startup Alley at Disrupt Berlin 2019

Startup News - 2019, August 16 - 5:00pm

We love a good how-to, especially one that saves early-stage startup founders money and positions them for mad success. We’re talking about how to apply to be a TC Top Pick and exhibit at Disrupt Berlin 2019 — for free.

Our TC Top Picks program is what we call a pre-Disrupt competition. If you’re a founder of an early-stage startup this is your chance to win a free Startup Alley Exhibitor Package and a VIP experience in Berlin. How does it all work? Read on!

First, fill out an application if your startup falls into one of these tech categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.

TechCrunch editors closely vet each application — and these editors have an almost-mystical ability to spot serious success potential. Ultimately, they’ll choose up to five of the best representatives for each category.

A Startup Alley Exhibitor Package includes one exhibit day, three Founder passes, access to the full conference and all programming at the event.

TC Top Picks attract a lot of attention at the show, and it’s a networking wonderland. You’ll meet investors, potential customers and future collaborators who can help you move to the next level. Plus, you’ll be interviewed by a TechCrunch editor live on the Showcase Stage. We’ll record that interview and promote it on our social media platforms. Talk about a great long-term marketing tool.

Take a page from Caleb John’s playbook. Here’s what the CEO of Cedar Robotics said about exhibiting as a TC Top Pick:

“It blew away my expectations. The number of people we met, the connections we made and the amount of media exposure we received is worth its weight in gold.”

And another thing! You — and all the other exhibiting startups — might even win a chance to compete in Startup Battlefield. TechCrunch editors will choose a startup as a Wild Card competitor, and they’ll compete for $50,000. It’s a longshot, but it sure paid off for RecordGram. They won the Wild Card and then won the Battlefield. Can lightning strike twice?

Disrupt Berlin 2019 takes place on 11-12 December. Don’t miss your opportunity to showcase your outstanding startup in Startup Alley and enjoy a VIP experience — for free. Apply to our TC Top Picks program today.

Categories: Business News

Twitter leads $100M round in top Indian regional social media platform ShareChat

Startup News - 2019, August 16 - 10:30am

Is there room for another social media platform? ShareChat, a four-year-old social network in India that serves tens of million of people in regional languages, just answered that question with a $100 million financing round led by global giant Twitter .

Other than Twitter, TrustBridge Partners, and existing investors Shunwei Capital, Lightspeed Venture Partners, SAIF Capital, India Quotient and Morningside Venture Capital also participated in the Series D round of ShareChat.

The new round, which pushes ShareChat’s all-time raise to $224 million, valued the firm at about $650 million, a person familiar with the matter told TechCrunch. ShareChat declined to comment on the valuation.

“Twitter and ShareChat are aligned on the broader purpose of serving the public conversation, helping the world learn faster and solve common challenges. This investment will help ShareChat grow and provide the company’s management team access to Twitter’s executives as thought partners,” said Manish Maheshwari, managing director of Twitter India, in a prepared statement.

Twitter, like many other Silicon Valley firms, counts India as one of its key markets. And like Twitter, other Silicon Valley firms are also increasingly investing in Indian startups.

ShareChat serves 60 million users each month in 15 regional languages, Ankush Sachdeva, co-founder and CEO of the firm, told TechCrunch in an interview. The platform currently does not support English, and has no plans to change that, Sachdeva said.

That choice is what has driven users to ShareChat, he explained. The early incarnation of the social media platform supported English language. It saw most of its users choose English as their preferred language, but this also led to another interesting development: Their engagement with the app significantly reduced.

The origin story

“For some reason, everyone wanted to converse in English. There was an inherent bias to pick English even when they did not know it.” (Only about 10% of India’s 1.3 billion people speak English. Hindi, a regional language, on the other hand, is spoken by about half a billion people, according to official government figures.)

So ShareChat pulled support for English. Today, an average user spends 22 minutes on the app each day, Sachdeva said. The learning in the early days to remove English is just one of the many things that has shaped ShareChat to what it is today and led to its growth.

In 2014, Sachdeva and two of his friends — Bhanu Singh and Farid Ahsan, all of whom met at the prestigious institute IIT Kanpur — got the idea of building a debate platform by looking at the kind of discussions people were having on Facebook groups.

They identified that cricket and movie stars were popular conversation topics, so they created WhatsApp groups and aggressively posted links to those groups on Facebook to attract users.

It was then when they built chatbots to allow users to discover different genres of jokes, recommendations for phones and food recipes, among other things. But they soon realized that users weren’t interested in most of such offerings.

“Nobody cared about our smartphone recommendations. All they wanted was to download wallpapers, ringtones, copy jokes and move on. They just wanted content.”

So in 2015, Sachdeva and company moved on from chatbots and created an app where users can easily produce, discover and share content in the languages they understand. (Today, user generated content is one of the key attractions of the platform, with about 15% of its user base actively producing content.)

A year later, ShareChat, like tens of thousands of other businesses, was in for a pleasant surprise. India’s richest man, Mukesh Ambani, launched his new telecom network Reliance Jio, which offered users access to the bulk of data at little to no charge for an extended period of time.

This immediately changed the way millions of people in the country, who once cared about each megabyte they consumed online, interacted with the internet. On ShareChat people quickly started to move from sharing jokes and other messages in text format to images and then videos.

Path ahead and monetization

That momentum continues to today. ShareChat now plans to give users more incentive — including money — and tools to produce content on the platform to drive engagement. “There remains a huge hunger for content in vernacular languages,” Sachdeva said.

Speaking of money, ShareChat has experimented with ads on the app and its site, but revenue generation isn’t currently its primary focus, Sachdeva said. “We’re in the Series D now so there is obviously an obligation we have to our investors to make money. But we all believe that we need to focus on growth at this stage,” he said.

ShareChat, which is headquartered in Bangalore, also has many users in Bangladesh, Nepal and the Middle East, where many users speak Indian regional languages. But the startup currently plans to focus largely on expanding its user base in India, hopefully doubling it in the next one year, he said.

It will use the new capital to strengthen the technology infrastructure and hire more tech talent. Sachdeva said ShareChat is looking to open an office in San Francisco to hire local engineers there.

A handful of local and global giants have emerged in India in recent years to cater to people in small cities and villages, who are just getting online. Pratilipi, a storytelling platform has amassed more than 5 million users, for instance. It recently raised $15 million to expand its user base and help users strike deals with content studios.

Perhaps no other app poses a bigger challenge to ShareChat than TikTok, an app where users share short-form videos. TikTok, owned by one of the world’s most valued startups, has over 120 million users in India and sees content in many Indian languages.

But the app — with its ever growing ambitions — also tends to land itself in hot water in India every few weeks. In all sensitive corners of the country. On that front, ShareChat has an advantage. Over the years, it has emerged as an outlier in the country that has strongly supported proposed laws by the Indian government that seek to make social apps more accountable for content that circulates on their platforms. Though it is grappling with some of this issue, too.

Categories: Business News

Cloudflare, in its IPO filing, thanks a third co-founder: Lee Holloway

Startup News - 2019, August 16 - 7:47am

Not every co-founder is acknowledged at the companies that they help to launch. Sometimes, they quit or they’re elbowed out. Often, they’re conveniently written out of the company’s history.

In the case of Cloudflare, a third co-founder who began the company with its higher-profile CEO, Matthew Prince, and its COO, Michelle Zatlyn, is little known outside the company for a very different reason. As Cloudflare states in an S-1 IPO filing that it made public today, “Tragically, Lee stepped down from Cloudflare in 2015, suffering the debilitating effects of Frontotemporal Dementia, a rare neurological disease.”

Frontotemporal dementia impacts between 50,000 and 60,000 Americans, according to a rough estimate cited by the Alzheimer’s Association, and it tends to impact younger people, often beginning in their 40s.

Though the cause isn’t known, a person’s risk for developing frontotemporal dementia — wherein the frontal and temporal lobes of the brain shrink — is higher if there’s a family history of dementia, according to the Mayo Clinic.

Cloudflare did not respond today to questions about Holloway, but Prince and Zatlyn, in a section of the filing addressed to potential shareholders, credit Holloway as the “genius who architected our platform and recruited and led our early technical team.” In fact, they write, when picking a code name for the company’s IPO, they chose “Project Holloway” to honor his contribution, because the “technical decisions Lee made, and the engineering team he built, are fundamental to the business we have become.”

Holloway’s beneficiaries will be rewarded for that work. According to the S-1, trusts affiliated with him own 18% of the company’s Series A shares (or common shares) and 3.2% of the company’s total outstanding shares. Prince meanwhile owns 20.2% of the company’s class B shares and 16.6% of all outstanding shares, and Zatlyn has 6.8% of the company’s class B shares and 5.6% of the overall shares outstanding.

If Cloudflare goes public at the $3.2 billion valuation that it was last assigned by its private investors, Holloway’s family and other trust recipients could see upwards of $100 million.

That’s none too shabby for a computer geek who attended Monte Vista High School in Danville, Calif., before working as an engineer at the bubble-era home improvement site HomeWarehouse.com. Its assets were sold in 2000 to Walmart.com in an apparent fire sale; at the time, then-CEO Jeanne Jackson told the San Francisco Chronicle that Walmart was “very impressed with the commerce platform developed by the Homewarehouse.com team.”

After that experience, Holloway headed to UC Santa Cruz, where he studied computer science and, in a meeting that would change his life, was introduced through a professor to Prince with whom he began building an anti-spam startup called Unspam Technologies. Holloway was its chief software architect; Prince continues to serve as chairman.

The two also co-created Project Honey Pot, an open-source community that still tracks online fraud and abuse.

Zatlyn would enter the picture soon after.

According to Cloudflare itself, in 2009, Prince had taken a sabbatical from work to get his MBA from Harvard Business School. It was when he began telling Zatlyn, a classmate, about Project Honey Pot and its community of users that she helped him recognize a related opportunity in not just tracking internet threats but also stopping them.

While they worked on the business plan as part of their studies, Holloway built the first working prototype. It worked well enough that by 2010, they were pitching investors at a TechCrunch Disrupt as one of the event’s “battlefield” participants.

Holloway wasn’t onstage for that demonstration. He might have preferred to operate in the background given the nature of his work.

Indeed, in the first of just three tweets he has ever published, he wrote simply, “Pondering the nature of web exploits.”

Pictured above: Cloudflare co-founders Zatlyn, Holloway and Prince.

Categories: Business News

Elysium and the quest to bottle the fountain of youth

Startup News - 2019, August 16 - 5:45am
Alice Lloyd George Contributor Share on Twitter Alice Lloyd George is an early stage investor based in New York and the host of Flux, a series of podcast conversations with leaders in frontier technology. More posts by this contributor

In the latest episode of Flux podcast, I sit down with Eric Marcotulli, the co-founder of Elysium, a life sciences company developing consumer-facing health products based on aging research. The company’s first product is Basis, a supplement that combines compounds designed to increase NAD levels and activate sirtuins, boosting cellular health and longevity.

In this conversation we discuss why precursor companies failed, including Cambridge-based Sirtris Pharmaceuticals, which was bought for $720 million in 2008. Eric explains how Elysium is a platform-based company that will sell a host of products and diagnostics, why he believes direct to consumer is the best market strategy, and what the current user base looks like. The company just announced a new clinical trial this week. Eric gets into the importance of bringing academic rigor and peer review to the supplement category, how he plans to build consumer trust and ultimately pull it into the mainstream. He shares why he believes in open source research, how cellular senescence is a particular area of interest right now, what his personal health routine is and how he thinks about the singularity.

An excerpt of our conversation is published below. Full transcript on Medium.

Eric Marcotulli — Bottling the Fountain of Youth

ALG: Welcome everyone to the latest episode of Flux. I’m excited to have Eric Marcotulli here today. He is the co-founder and CEO of Elysium Health a company that is rethinking healthcare whose first product is a science based supplement that promotes cellular health. Welcome.

EM: Thank you.

ALG: Appreciate it. I’ve been excited about your company for a long time. It’s nice to meet in person.

EM: Likewise.

ALG: As a New York based VC it’s also great to meet New York based companies, especially science focused companies. I’d love to start by hearing the beginnings of Elysium. You started the company in 2014. I talked to one of your investors last summer, he said to ask you the story of how you met your co-founder at Equinox  —  is that true?

EM: So there’s two co-founders and they both have their own stories. I’ll start with my scientific co-founder, Leonard Guarente. Leonard’s run the biology of aging Lab at MIT for the last 25 to 30 years. I didn’t set out to become an entrepreneur. It was a confluence of events.

If you go back to 2011, 2012 I was in business school and in one of my classes we were studying a company that in the field of aging is well known but outside is not. It’s called Sirtris Pharmaceuticals and it was a Boston based biotech company going back to the mid 2000s. What’s interesting about this company is they were studying processes of aging and they identified one in particular. It was a class of genes that we now affectionately refer to as longevity genes. They’re called sirtuins. What they identified was that these genes are found in every living thing and that the activity level of these genes decreases through the normal course of aging. And when they reactivated these genes they saw amazing benefits, regardless of which model or organism you were looking at. They would live to the human equivalent of 120 years old. They don’t get cancer. They don’t gain weight.

ALG: You mean the mice?

EM: That’s right. Life is pretty good at this point if you’re a mouse. It was a monumental discovery in terms of aging research and it got the researchers nominated for the Nobel Prize. One of the researchers involved in that series of discoveries in the late 90s early 2000s went off to Harvard to open his own lab. And being more risk-seeking he was screening for natural molecules that could potentially activate these genes. The hypothesis there, which has since carried over to Elysium, is that aging itself isn’t a disease. It’s about the interconnected degradation or failure of our own biological processes and metabolisms. There is a prevailing hypothesis we are seeing develop that natural compounds will be the most effective interventions. That was the approach taken there, and the researcher’s name is David Sinclair. He screened natural product libraries for potential hits that could activate these genes.

And he found one, a derivative of red wine called resveratrol. Some people have heard of this. If you look back at the ‘04 ‘05 time frame there was a massive spike in red wine sales due to all the media coverage around it. So they started a company, Sirtris. So they make you the protagonist in this case study, and you have to make a decision as the management of the company. What was interesting was that you have a natural product and that aging isn’t a disease. To try and create a traditional pharmaceutical company and go after diseases you’d be trying to fit a square peg in a round hole. You’d likely have to modify the molecule, you would have to start looking at disease models. On the other hand, you could build a direct to consumer company, where you don’t have to modify the molecule, and aging isn’t a disease so you don’t have to go through a laborious long-term and huge cost effort from an approval standpoint. We debated the merits of both of these business models. I was firmly in the camp of the consumer facing effort, because I was reading this research and saying, how could anybody sitting in this room not want this for themselves or their parents or their friends?

ALG: Right.

EM: It ends up not mattering which position you take. [In 2008] GlaxoSmithKline stepped in and bought the company for almost three quarters of a billion in cash, before they read any human data. I was fascinated at this point with the research. If you had played word association with me going into that class and you said “anti-aging” and “longevity” I would have just rattled off “late-night infomercials” and “snake oil.”

ALG: So that class awakened you to the industry and got you interested?

EM: That’s right. I didn’t know this was something you could study. Aging  —  most people think it’s an unstoppable ambiguous force. But it’s not. It’s something that we can now quantify and measure and potentially intervene. That was new to me, the fact that people at MIT and Harvard were studying this and making progress. So I left that fascinated. Shortly thereafter I reached out directly to the the the MIT professor who was the original discoverer of these genes, the sirtuins. I reached out to the scientific co-founder at Harvard. The question I had was, whatever happened to this? Because now it’s almost a decade since the acquisition. There had been little news on it. If you fast forward to today the MIT professor, the one where they made the original discoveries of the longevity genes, is now the co-founder of Elysium.

Elysium Health co-founders Eric Marcotulli, Dan Alminana, Leonard Guarente.

ALG: Leonard?

EM: Yes. Dr. Guarente. Or Lenny as we call him. Lenny and I just started off with conversations around how the research had progressed. At one point Lenny called me and said, “I’ve been approached by a Japanese venture capitalist who has invested in a company in Taiwan. They believe they have a potent sirtuin activating compound that’s very different from the resveratrol molecule.” He said, “I know nothing about the business side of things. We’re dealing with a venture capitalist and you’re a venture capitalist.” I was at the time — before business school I was at Bain Capital Ventures, after I was at Sequoia. He said, “would you want to go with me to look at this potential molecule?”

I said, “I don’t know how much help I can be but I’m happy to go with you.” So Lenny and I met for the first time six months after our first phone call. This was late 2012. We met in San Francisco International Airport and went to Taiwan for a few days. It was a fascinating experience. We ultimately passed on that molecule despite some interesting research. But it was through that that Lenny and I came up with this idea that you could build a direct to consumer facing effort and that there would be more of these types of products, that it wasn’t limited to a single product idea. So this was the vision for creating a platform-based company.

ALG: So that’s how you met him. And it sounds like you explored a couple of different routes in terms of what molecules could stimulate sirtuins right?

EM: That’s right.

ALG: And the one you ultimately went for first is NAD?

EM: So there’s two components to the product we have today, which is called Basis. One of the things that Lenny and his constituencies in the research community had identified was that sirtuins are dependent on a coenzyme called NAD. We didn’t know that at the time that Sirtris was founded. It’s the production of NAD  —  a coenzyme, a fuel that’s used in a variety of reactions at the metabolic level  —  it was actually the production of this coenzyme that was decreasing in all of these living things. So NAD itself is not new. We’ve known about it for a hundred years. Two Nobel prizes have been awarded for elucidating its function. It’s important for things like DNA maintenance and repair, the creation of energy, the way the cells communicate both internally and with one another. Without NAD you’d be dead in under a minute. It’s very important. So this idea that it was decreasing, which we didn’t know until 2012, was a monumental discovery.

ALG: Decreasing over a mouse or human lifespan?

EM: Universally. Whether you’re a plant, animal, bacteria  —  doesn’t matter. You have NAD, you use it for these critical functions and it declines in its production in everything that ages. But not every living thing ages. Jellyfish don’t age for example.

ALG: Oh wow. What’s going on with their NAD?

EM: Well we don’t know yet. But it’s a small number [of organisms]. In everything else you see this decrease [in NAD] when the organism ages. Since we didn’t know this, Lenny said trying to activate these sirtuins would have been a failure regardless. So what we first need to do is restore levels of NAD. Then we need to activate these sirtuins. And we know that resveratrol does not work in humans. So that was another discovery that happened in the subsequent time period after the acquisition.

ALG: So all the red wine articles are baloney?

EM: Well interestingly if you drink red wine you do get the benefit of sirtuin activation. You just have to drink quite a bit of it.

ALG: I can do that.

EM: Ha most people say that. So that’s just an example of removing a high purity molecule from its natural carrier state in the wine to a pill as an example, which was a failure in humans. So we identified a cousin of resveratrol called pterostilbene [an antioxidant], which from a structural standpoint, at the molecular level, is more stable.

ALG: The stuff found in blueberries?

EM: That’s right. If you could choose one food for the rest of your life my recommendation would be blueberries. Some people would disagree with me. Maybe it’s wine. But that was the idea behind Basis. First we need to restore levels of NAD. Secondly we can then go in and activate these longevity genes. And that there would be a synergy associated with that. The best way to think about it would be sports cars. If you’re activating sirtuins it’s like putting a turbo in the engine, but the car still requires some energy source. So if there’s no gasoline, or if you own a Tesla and there’s no battery power, it’s not going to work. But once you have the two of them together there’s a supercar.

ALG: It’s actually an analogy a lot of people use for aging. I don’t know if you know Aubrey de Grey and the SENS foundation, but he talks about aging as a disease. That it’s just like a car and we need to figure out how to repair the car and the many different things that go into that. I also want to ask you more about this reframing of how we think about living longer, and how the healthcare system doesn’t consider aging a problem so far or something to tackle. How does the shift happen?

EM: Part of it is, we are going to have to deal with it regardless. Everything we’re seeing now given the advancements in medicine is somehow related to aging. If you survive cancer you are unfortunately going to die from Alzheimer’s or cardiovascular disease or Type 2 diabetes. I won’t get the number exactly right, but if you cured every single form of cancer it would only add about three years of lifespan collectively, on average.

ALG: Because there’s going to be another disease that kills you.

EM: Correct. So for example, one of the areas we’re interested in is something called acute kidney injury. Thirty percent of people who go in for cardiovascular surgery will develop acute kidney injury, and with too much of it you’ll get kidney failure and dialysis. In 2004 there were just shy of a million cases in the United States of acute kidney injury. In 2014 just 10 years later there were four million cases. It’s not that our surgical techniques changed, it’s that older people are going in for these surgeries more often because our healthcare system is actually getting better. So we’re going to have to deal with these things. Two, from a diagnostic standpoint we are moving  —  out of necessity, at the research level  —  into an area where we’re now able to quantify aging. As an example there is an epigenetic test, a cheek swab or a spit tube type test, developed at UCLA in conjunction with the National Institutes of Health. It can basically tell you your biological age. The age on your passport or your driver’s license is your chronological age. But there’s something that the gene activity expression data we collect can tell you about how you are aging.

ALG: Is that a hard test to do? I’m sure everyone would want to do that if they could.

EM: So we are commercializing this test. Think of it as rings of a tree. Over time you can get a pretty accurate understanding of a single tree. How old is it. Did it go through a bountiful spring or a terrible winter. Was there a forest fire. That’s at the individual level. Then when you look at the macro level, at the forest, you can learn a lot about that particular ecosystem. It’s an oversimplification of the idea but it’s the same thing every time, looking at something called methylation. Every time one of these sites is methylated it leaves a mark. So we can quantify that and say does this intervention or product reverse, slow, or stop the aging process.

ALG: That’s a game changer for you right. Because everyone thinks it’s a good idea to take [the product], why not. But without being able to measure a result, it is hard to say. People do report feeling better in the short term  —  less hangovers etc. I saw one of your advisers say something about his elbows getting softer—

EM: Oh Rich.

ALG: Yeah. A lot of great side effects that sound like they are worth having anyway. Like great energy peaks.

EM: Right. As we move towards aging, we would argue that it should be classified as a disease. But today it’s difficult because it’s not a moment in time diagnosis. It’s not like one day you wake up feeling symptoms and you go to the doctor and he says, “yes we ran the tests and you have aging.” It’s a decades long accumulation of mutations and failures and other things. So these types of diagnostics have been developed by the research community out of necessity. They need to understand does this intervention actually slow, stop, or reverse aging. That’s just one measure. We’re going to see other diagnostics that take shape and form over the next several years. So to your point, that’s important for us. Because one, the conversation today has been around, OK if you can reverse this fundamental process of aging what does it mean for me? It’s one thing to say, the models that exist today could show efficacy in cancer or neurodegenerative diseases et cetera. But there’s been nothing between showing the reversal of that process and the outcome of it from a disease standpoint. So this idea that there’s a middle ground, something where you can say, well the speed at which you’re aging has changed for the better. That is an important step in the entire process.

ALG: That’s super exciting. So what does the roadmap look like? Lets get into the product so that listeners who haven’t seen it know. Out the gate, your first product was Basis, the daily supplement which is $50 a month for a subscription, or $480 for the year. And it’s recommended that you take two pills in the morning. So that’s product one. It sounds like there’s a lot of other things in the works? How do the diagnostics fit in?

EM: Sure. Going back to the hypothesis for the company  —  we sought early on to commercialize these technologies on a platform basis. We knew the diagnostics were coming. We knew that there would be other interventions. The third leg of the stool would be things on the digital front or the wearable front. We’re still a bit aways away from seeing the commensurate rigor in that camp. One is  —  as you mentioned earlier  —  the diagnostics are important to show the efficacy broadly speaking for these products. The other thing that’s exciting is this idea of N of 1. We’re finally going to be able to move into the realm of personalization. First, is this product working for me? Second, what is it doing for me? Third, how would I have to modify my lifestyle or administration of the product?

That’s how we think about the world from a product development standpoint, through these systems. Apple is an exaggerated example but they’ve done a fantastic job from a platform basis  —  of providing the app store and cloud services to integrate all the devices you have. What’s interesting about these diagnostics that we’re developing is that they are very much a subscription in nature. What you’re doing today is going to be different to what you’re doing tomorrow. Your health status may change for a whole host of reasons, genetic or otherwise. Since these aren’t just genetic tests looking at your ancestry, our hope is that 5 or 10 years in the future this is part of your annual checkup.

ALG: And there’s no negative side effects that we know?

EM: No. By and large this is one of the safest products we’ve ever seen, with all of the data that we have and millions and millions of data points in ongoing safety testing. Moving beyond that requires us to prove more digestible and accessible points of understanding. This idea of rate of aging is a step in that direction. We’re also, as an example, doing a study on photo aging of the skin based on both the existing body of literature that’s out there as well as feedback we’ve had from customers. The conversation changes a lot if I can put you under a special camera that shows the UV damage to your skin and then shows you the before and after of someone who has taken the product for six months and how it changed them. Even just showing wrinkles and things like that. Things that people are used to, from a marketing standpoint, but they might not actually see the science in it today. So there is that evolution. The evolution from, yes we can reverse this fundamental process of aging to, well what does that mean for me? Well it means it’s actually going to change the rate at which you age, which is tied to your health and all these diseases. Well OK, now I can actually tell you that it’s going to do XYZ for your skin, brain or whatever it might be.

ALG: You say upfront that this is about improving cellular function, but there’s no guarantee of longevity, though of course the name has connotations there. I’d like to ask your thoughts on longevity. There’s now things like cryo and people are signing up for places like Alcor. Do you think if we all had the ability to live forever, that that would be a good thing?

EM: So you skipped over the easier question. We’re focused on healthspan first and foremost. If you go into a room of people, and we do this all the time, and you say to the audience, “We’re going to take a quick poll. How many of you want to live forever? How many of you want to live to 120 or 150? How many of you want to live to 80?” It’s interesting to see the distribution. If you then say, “you are going to live to that age but you’re going to be as healthy as you are today, would you change your answer?” Most people do. So we are first and foremost focused on quality of life and healthspan. The belief is, ultimately if you improve every day, that you’ll have more days on the back end.

ALG: So it would be fine to go to 90 with a 20 year old’s full health, then kick the bucket. That’s more the goal.

EM: That’s exactly it. We’ve all dealt with it ourselves with loved ones. No one wants to live for another 10 or 20 years in a certain state. Usually the conversation is, what are the implications of that. From our standpoint, every time humanity has had an order of magnitude improvement in health  —  the introduction of antibiotics for example  —  I don’t think we’ve ever seen humanity broadly say, we don’t need this or we don’t want it. I do think the question changes with the singularity. Which is living forever.

ALG: We should probably do another 40 minutes on the singularity, it’s an important topic.

EM: It is. I always say without question in our lifetime we will see a merging with something digital. Musk has announced his Neurolink technology recently and is claiming to make progress on it, so it may happen. We’re not going to be able to predict when it happens. And when it happens it’s going to happen quickly. That’s dangerous for a whole host of reasons. But I’m not sure we have a good answer for, “should we?”

ALG: I guess the answer is in splitting the question into healthspan and lifespan. People are generally in agreement on healthspan. Lifespan is more of a question mark.

EM: Without question. If you talk to anybody in the aging community at the research level, we would be surprised to hear them say, let’s focus on longevity first. Everybody is actually focused on understanding its implications and its role in human health more broadly and how interventions might change that. Then of course the idea is, well if we can get rid of all these diseases of aging, you would think that you’re going to live longer too. In a higher quality state.

ALG: It does amaze me. From a personal perspective I am signed up at Alcor. Do I think it’s going to work? Not really. But I did it for other reasons—

EM: Yes. I think we as a group need to hold companies in this space to a higher standard than we have in the last 10 years in terms of these types of things. I always say when someone brings me a product  —  even the products that I’m interested in  —  What is the research behind it? Where are the studies published? What do they find? How are they designed? If you just look at the supplement portion of our business, the consumer facing interventions, it’s a $35 billion dollar market in the United States.

ALG: And that’s with the current low standards and general snake oil perceptions [in supplements.]

EM: Of course. The other thing is, if you stop someone on the street and ask, “what’s your favorite supplement company?” you’re going to get a puzzled look back. No one walks around with a hat or a bag that has one of these companies on it. That’s because they lack legitimacy. That’s a huge part of Elysium’s mission. Hiring with the rigor that you would see in life sciences on the pharma side, into the consumer market. This is part of the shift. We will see legitimate companies not just Elysium, but others in the consumer sphere, changing this conversation. The market will look like a lot of other markets as opposed to this fragmented, untrustworthy one that we see today. That evolution might take a little longer. But ultimately we’re going to end up in a place where people feel good about the products they’re buying, because only the products that work are going to survive.

The global supplements market was estimated at USD $115.06 billion in 2018. It is expected to grow at a CAGR of 7.8% in coming years. [Source]

ALG: It’s interesting because you’re a pioneer in this area of supplements. There are other supplements startups, such as prenatal which is also taking off. But there’s less controversy  —  people say, prenatal vitamins? Of course, why wouldn’t you take that. With yours there’s more questions. My point on Alcor and backlash was that people have strong opinions on human longevity.

EM: It’s interesting. Our category is hot right now. In a lot of these established categories  —  take prenatal —  there’s great literature supporting the use of folic acid. There’s companies that sell products around that. But they’ll make unique claims or link to literature that’s been done by other companies on other formulations or other delivery methodologies. Those can be dangerous. The data might appear to be good but in fact their own product hasn’t been tested. We have to do it by virtue of what you highlighted, the fact that we are new. But the buyer should beware of whether this exact formulation or exact product was tested for what it’s claiming to accomplish for you.

ALG: So you’re trying to do as much as you can in-house, which includes all R&D at the moment?

EM: Yes. We have a very open source model. One of the things we did, going back two or three years, was we did a randomized, placebo-controlled, double blind study on Basis to show that it could actually restore levels of NAD. We had to show that it actually did what it did. Now that’s mechanism of action in terms of what we’re showing. We didn’t show any tangible health benefits in that particular study, it was just the reversal—

ALG: That was the 2017 study?

EM: That’s right. It was an important first step to show that.

ALG: NAD levels increased by an average of 40 percent in your users?

EM: Yes. In a one month span. Then that was sustained over a period of time after that. And it was done safely. But if a traditional pharmaceutical company had done that study they would have just internally validated that the product works, then continued their research. We chose to publish and announce it. What we found was an influx of research interest from MDs and PHDs all around the world who said, “I’m interested in NAD repletion or sirtuin activation, and I now know that your product can safely and sustainably reverse this decline. Would you be willing to work on this particular health problem with me?” So a lot of it we do internally. And a lot of it is also driven by the scientific advisory board or collaborators that approach us and say we’d love to do something with you. This idea of open source is something that’s important to us and we encourage others to pursue it as well.

ALG: A lot of exciting stuff going on there. To wrap up is there anything else you want to share about the company or what we should expect in the next six to eight months?

EM: In terms of 2019, it is our plan to launch new products in both of the categories we talked about. You’ll see new diagnostics and you’ll see new interventions from us.

ALG: Exciting. I can’t wait to see. Thanks Eric for coming on. It’s great to meet and I look forward to seeing the products when they come out.

EM: Great. Thank you.

ALG: Thank you.

Categories: Business News

Traces AI is building a less invasive alternative to facial recognition tracking

Startup News - 2019, August 16 - 5:03am

With all of the progress we’ve seen in deep learning tech in the past few years, it seems pretty inevitable that security cameras become smarter and more capable in regards to tracking, but there are more options than we think in how we choose to pull this off.

Traces AI is a new computer vision startup, in Y Combinator’s latest batch of bets, that’s focused on helping cameras track people without relying on facial recognition data, something the founders believe is too invasive of the public’s privacy. The startup’s technology actually blurs out all human faces in frame, only relying on the other physical attributes of a person.

“It’s a combination of different parameters from the visuals. We can use your hair style, whether you have a backpack, your type of shoes and the combination of your clothing,” co-founder Veronica Yurchuk tells TechCrunch.

Tech like this obviously doesn’t scale too great for a multi-day city-wide manhunt and leaves room for some Jason Bourne-esque criminals to turn their jackets inside out and toss on a baseball cap to evade detection. As a potential customer, why forego a sophisticated technology just to stave off dystopia? Well, Traces AI isn’t so convinced that facial recognition tech is always the best solution, they believe that facial tracking isn’t something every customer wants or needs and there should be more variety in terms of solutions.

“The biggest concern [detractors] have is, ‘Okay, you want to ban the technology that is actually protecting people today, and will be protecting this country tomorrow?’ And, that’s hard to argue with, but what we are actually trying to do is propose an alternative that will be very effective but less invasive of privacy,” co-founder Kostya Shysh tells me.

Earlier this year, San Francisco banned government agencies from the use of facial recognition software, and it’s unlikely that they will be the only city to make that choice. In our conversation, Shysh also highlighted some of the backlash to Detroit’s Project Green Light which brought facial recognition surveillance tech city-wide.

Traces AI’s solution can also be a better option for closed venues that have limited data on the people on their premises in the first place. One use case Shysh highlighted was being able to find a lost child in an amusement park with just a little data.

“You can actually give them a verbal description, So if you say, it’s a missing 10-year-old boy, and he had blue shorts and a white t shirt, that will be enough information for us to start a search,” Shysh says.

In addition to being a better way to promote privacy, Shysh also sees the technology as a more effective way to reduce the racial bias of these computer vision systems which have proven less adept at distinguishing non-white faces, and are thus often more prone to false positives.

“The way our technology works, we actually blur faces of the people before sending it to the cloud. We’re doing it intentionally as one of the safety mechanisms to protect from racial and gender biases as well,” Shysh says.

The co-founders say that the U.S. and Great Britain are likely going to be their biggest markets due to the high quantity of CCTV cameras, but they’re also pursuing customers in Asian countries like Japan and Singapore where face-obscuring facial masks are often worn and can leave facial tracking software much less effective.

Categories: Business News

GradJoy is a Y Combinator-backed fintech to help you knock out your student loans

Startup News - 2019, August 16 - 3:21am

The right people to solve the trillion-dollar student debt crisis might be the ones who are suffering from it the hardest.

If you’re a recent college graduate, there’s a 50% chance you took on debt when you moved off campus. If you’re like the average student borrower, you graduated with $29,800 of loan debt, and are making a monthly re-payment of between $200 and $300, according to a recent report from the New York Fed.

GradJoy is a new Y Combinator-backed startup that wants to help the 45 million student debt borrowers in the U.S. manage their repayment plans. Within seven days of being a live platform and a marketing strategy that consisted of reaching out to a few universities, GradJoy is already managing $20 million in loans.

Co-founders Jose Bethancourt and Marco del Carmen turned down roles at Cloudflare and MongoDB, respectively, upon learning they’d been accepted to Y Combinator’s Summer 2019 class. GradJoy bills itself as a “student loan co-pilot,” and currently exists as a platform that helps users manage student loan repayments — whether that’s assessing pros and cons of refinancing, what a monthly payment should look like and if they have any wiggle room based on greater income and spending habits. GradJoy hopes to hammer a few cracks in the $1.5 trillion federal student loan debt crisis by giving new borrowers more insight into their repayment journey.

Loan companies will always advise borrowers to pay the minimum because they benefit from the outrageous interest fees amassed over time. GradJoy wants to tap into your bank account and monitor your finances to deliver more transparent loan-management advice with a feature that lets you simulate how different payment amounts would affect your loans.

Bethancourt, a recent University of Texas graduate, was his own first user. He built the GradJoy platform for himself while calculating his optimal student loan repayment plan in Excel. He’d met his co-founder in a coding bootcamp in the Rio Grande Valley at the border of Mexico and South Texas — where Bethancourt is originally from.

Jose Bethancourt (Left) Marco del Carmen (Right)

Student lending is a predatory industry that benefits off the ignorance of first-time borrowers and has been known to purposefully constrict resources for customers. New borrowers must navigate landmines like refinancing scams, the “7-minute rule” for customer service assistance and tricky requirements buried within the public service loan forgiveness program.

A question is posed for new startups that want to punch up against greedy student loan servicers like Navient and AES. Without replicating the corrupt business models that lenders have in order to make money off the student loan debt problem, how can newcomers like GradJoy become profitable?

Gradjoy bills itself as a “student loan co-pilot”

Aside from venture capital, which GradJoy will be seeking upon its graduation from Y Combinator, it will make money in a few ways. In order to align with users’ goals, GradJoy’s business model is tied to their savings. If a user refinances using GradJoy, they get a referral payment from their lending partners. The platform is currently beta testing their robo-advisor for debt, and in the future they plan on charging a small fee per month if they’re able to save a user money.

Student loans don’t only burden millennial bank accounts. The student loan debt crisis is creating an economic trend. Inability to repay student loans causes young people to rely on credit cards to make ends meet and delay major life choices like investing in property. Not to mention the affect of student debt on mental health for young people at an already volatile point in their lives.

In five years, GradJoy’s founders say they’d like to be running a more robust financial services product that was first focused on helping its customers pay off student loans. They hope to mobilize customers while they’re at the nascence of their financial independence, and scale up to launch a larger suite of financial service products.

Categories: Business News

Local governments are forcing the scooter industry to grow up fast

Startup News - 2019, August 16 - 3:05am

Gone are the days when tech companies can deploy their services in cities without any regard for rules and regulations. Before the rise of electric scooters, cities had already become hip to tech’s status quo (thanks to the likes of Uber and Lyft) and were ready to regulate. We explored some of this in “The uncertain future of shared scooters,” but since then, new challenges have emerged for scooter startups.

And for scooter startups, city regulations can make or break their businesses across nearly every aspect of operations, especially two major ones: ridership growth and ability to attract investor dollars. From issuing permits to determining how many scooters any one company can operate at any one time to enforcing low-income plans and impacting product roadmaps, the ball is really in the city’s court.

Categories: Business News

How about earning crypto tokens to carbon-offset your Uber rides?

Startup News - 2019, August 16 - 2:29am

Most of us, by now, are aware that all sorts of crazy stuff is happening to the planet’s climate, and the blame is pretty much universally recognized as lying with humans pumping more and more carbon into the atmosphere. Scientists are now saying tree planting, for instance, has to happen very, very quickly if we are to avert disaster.

A few startups, such as Changers, have tried to incentivize us to do things like walk instead of taking the car, with mixed results.

Now a blockchain startup thinks it may have the making of one solution, rewarding us with crypto tokens for making the right choices for the planet. Now, before you roll your eyes, hear me out…

Imagine rewarding people for taking the bus instead of their car — and them exchanging that token to offset their carbon by planting a tree? Or incentivizing passengers for sharing their travel data — helping companies to improve their experience in the future? That’s the big idea here.

Here’s how it works: The DOVU platform offers a token, wallet and marketplace and allows users to earn tokens and spend them to carbon-offset their activity and on rewards within the mobility ecosystem, starting with their Uber rides.

Users link their Uber account to their DOVU wallet, enabling them to earn DOV tokens for every journey taken. The startup has connected to Uber APIs, meaning that, once authenticated, the user has to do nothing other than take the journey.

The DOVU CO2 calculator then automatically rewards the value of tokens depending on the length of the journey. The DOV tokens can then be spent within the DOVU Action, and the user can choose the project to back or the user can ask DOVU to choose the project on their behalf to ensure the carbon offsetting happens.

The platform can connect to any published API, meaning it is in a notional position to have an immediate impact on all the new mobility solutions globally.

With Jaguar Land Rover as shareholders, DOVU potentially has the backing to try to make this happen.

Mobility-related organizations often have a need to reward, incentivize or nudge their users to do the right thing. It might be sharing their data for better service planning, taking an alternate route to help ease traffic congestion or charging electric batteries at times that are best for the grid. Whether it’s influencing consumer behavior or encouraging data sharing, the DOVU platform could, in theory, provide a solution that meets the needs of both the mobility provider and the end user. That at least is their pitch.

Hell, given the state of the planet, it might be worth a shot…

Categories: Business News

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