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Alphabet pulls the plug on its internet balloon company, Apple is reportedly developing a new MacBook Air and Google threatens to pull out of Australia. This is your Daily Crunch for January 22, 2021.
The big story: Alphabet shuts down Loon
Alphabet announced that it’s shutting down Loon, the project that used balloons to bring high-speed internet to more remote parts of the world.
Loon started out under Alphabet’s experimental projects group X, before spinning out as a separate company in 2018. Despite some successful deployments, it seems that Loon was never able to find a sustainable business model.
“While we’ve found a number of willing partners along the way, we haven’t found a way to get the costs low enough to build a long-term, sustainable business,” Loon CEO Alastair Westgarth wrote in a blog post. “Developing radical new technology is inherently risky, but that doesn’t make breaking this news any easier.”
The tech giants
Apple reportedly planning thinner and lighter MacBook Air with MagSafe charging — The plan is reportedly to release the new MacBook Air as early as late 2021 or 2022.
Google threatens to close its search engine in Australia as it lobbies against digital news code — Google is dialing up its lobbying against draft legislation intended to force it to pay news publishers.
Cloudflare introduces free digital waiting rooms for any organizations distributing COVID-19 vaccines — The goal is to help health agencies and organizations tasked with rolling out COVID-19 vaccines to maintain a fair, equitable and transparent digital queue.
Startups, funding and venture capital
‘Slow dating’ app Once is acquired by Dating Group for $18M as it seeks to expand its portfolio — Once has 9 million users on its platform, with an additional 1 million users from a spin-out app called Pickable.
MotoRefi raises $10M to keep pedal on auto refinancing growth — CEO Kevin Bennett sees the opportunity to service Americans who collectively hold $1.2 trillion in auto loans.
Backed by Vint Cerf, Emortal wants to protect your digital legacy from ‘bit-rot’ — Emortal is a startup that wants to help you organize, protect, preserve and pass on your “digital legacy” and protect it from becoming unreadable.
Advice and analysis from Extra Crunch
How VCs invested in Asia and Europe in 2020 — The unicorns are feasting.
End-to-end operators are the next generation of consumer business — VC firm Battery has tracked seismic shifts in how consumer purchasing behavior has changed over the years.
Drupal’s journey from dorm-room project to billion-dollar exit — Twenty years ago, Drupal and Acquia founder Dries Buytaert was a college student at the University of Antwerp.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Everything else
UK resumes privacy oversight of adtech, warns platform audits are coming — The U.K.’s data watchdog has restarted an investigation of adtech practices that, since 2018, have been subject to scores of complaints under GDPR.
Boston Globe will consider people’s requests to have articles about them anonymized — It’s reminiscent of the EU’s “right to be forgotten,” though potentially less controversial.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Source: https://techcrunch.com/2021/01/22/daily-crunch-alphabet-shuts-down-loon/
“The digital divide is now a matter of life and death for people who are unable to access essential healthcare information,” said UN Secretary General António Guterres in June 2020. Almost half the global population currently has no internet access, and many who do cannot freely access all information sources.
Freedom House, which tracks internet restrictions worldwide, says the coronavirus pandemic is accelerating a dramatic decline in global internet freedom. It found that governments in at least 28 countries censored websites and social media posts in 2020 to suppress unfavorable health statistics, corruption allegations and other COVID-19-related content.
Now, U.S. company Toki is building “school-in-a-box” devices to connect up to 1 billion people across Africa and Asia, using technologies that it claims could filter content to avoid some information sources and bypass local censorship. The devices will be Wi-Fi-ready servers that run on electric power or batteries and can handle dozens of concurrent users. If no networks are available, the servers will also come pre-installed with digital libraries curated to provide “locally relevant content.”
One of Toki’s country managers describes on LinkedIn that the devices would also run a decentralized search engine, designed to be anonymous, private and censorship-resistant. They will be donated to communities in the developing world by a U.S. nonprofit* called eRise, which was founded in 2019 to, according to its website, “focus on digital empowerment initiatives that are capital-efficient, and which improve access to content, community and commerce.”
Both Toki and eRise were founded by entrepreneur and free speech advocate Rob Monster. Monster owns domain registration company Epik, which allowed controversial social network Parler to come briefly back online last week after the site was booted from Amazon’s cloud service. Parler is just one of several platforms enabled by Epik, and Monster’s other domain and web hosting companies, that have been home to far-right content. Parler is accused of hosting users that helped to coordinate the attack on the U.S. Capitol on January 6.
The “school-in-a-box” would contain a memory card with educational content, games, books, maps and modules related to prayers, the story of religions and “the art of being grateful.” It says the device is intended for “parents who want their kids to be smarter and curious; schools who can’t afford a computer; [and] religious places who wish to spread awareness about education and empower the society.”
But one researcher says this effort recalls Facebook’s heavily criticized project offering free connectivity in India, which spawned accusations of bias and self-censorship.
“We’ve seen a similar tactic by Facebook, to provide digital access points that can also serve the purpose of delivering favorable content and ensuring that these groups become dependent on your benevolence,” said Dr. Joan Donovan, director of the Technology and Social Change Research Project at the Shorenstein Center. “It becomes that much harder later on to change the power dynamics when the ideology is in the infrastructure.”
Monster has used free speech arguments to defend Epik’s working with platforms that either welcome or tolerate extreme content. The Southern Poverty Law Center, which tracks hate groups, has been reported as saying that Monster “offers services to the most disreputable horrific people on the Internet.”
Epik spokesperson Rob Davis told TechCrunch that Epik actively works with its clients to help them moderate content, and claimed that the company has deplatformed Nazi groups and deleted those promoting genocide.
“Lawful, responsible freedom of speech is an amazing right,” said Davis. “Every [domain registrar] has groups like this but Epik is often held to a higher standard.”
In a series of posts in 2019 on a forum dedicated to domain-name trading, Monster provided more details about the Toki technology. The servers would be powered by cheap Raspberry Pi processors and run a proprietary version of Linux that would enable file sharing, peer-to-peer commerce, a digital wallet and a personalized search engine, with the option of “ignoring certain data sources.”
“Decentralization not only means decentralization of the narrative and talking points of big tech groups like Google, Twitter and Facebook,” said Epik’s Davis. “It also means anti-censorship by empowering people with things that they didn’t know.” The spokesperson gave the example of naturopathic remedies for minor health complaints. Naturopathic remedies have not been proven to be effective against COVID-19.
Eventually, each device might come pre-loaded with a “snapshot” of the internet, said Davis, although he did not describe how the internet might be reduced to fit on a single, small physical device. The eRise website notes that content would be curated by local digital librarians that it would recruit. Davis told TechCrunch that Toki has working models of its server, is already conducting field trials and hopes to start deploying the devices to 6,000 villages in Africa in 2022 or 2023, perhaps in collaboration with an unnamed Asian telecoms company.
The Toki devices’ selectivity, if practical, could raise its own content and censorship concerns; for example, if eRise allowed extreme content similar to that seen on Epik’s clients like Gab and Parler, or ignored scientific advice on COVID-19 or other health issues.
Donovan said she is wary of any one-box solution. “We have to focus on decoupling information companies from service providers,” she said. “That much control can be used for political gain. Technology is politics by other means.”
*Although eRise also claims on its website to be a 501(c)(3) nonprofit, which would exempt it from some taxes and allow tax-free donations, TechCrunch could not locate it on the IRS’s database of nonprofits. Monster later admitted eRise was not a registered 501(c)(3)).
At Battery, a central part of our consumer investing practice involves tracking the evolution of where and how consumers find and purchase goods and services. From our annual Battery Marketplace Index, we’ve seen seismic shifts in how consumer purchasing behavior has changed over the years, starting with the move to the web and, more recently, to mobile and on-demand via smartphones.
The evolution looks like this in a nutshell: In the early days, listing sites like Craigslist, Angie’s List* and Yelp effectively put the Yellow Pages online — you could find a new restaurant or plumber on the web, but the process of contacting them was largely still offline. As consumers grew more comfortable with the web, marketplaces like eBay, Etsy, Expedia and Wayfair* emerged, enabling historically offline transactions to occur online.
More recently, and spurred in large part by mobile, on-demand use cases, managed marketplaces like Uber, DoorDash, Instacart and StockX* have taken online consumer purchasing a step further. They play a greater role in the operations of the marketplace, from automatically matching demand with supply, to verifying the supply side for quality, to dynamic pricing.
The key purpose of being end-to-end is to deliver an even better value proposition to consumers relative to incumbent alternatives.
Each stage of this evolution unlocked billions of dollars in value, and many of the names listed above remain the largest consumer internet companies today.
At their core, these companies are facilitators, matching consumer demand with existing supply of a product or service. While there is no doubt these companies play a hugely valuable role in our lives, we increasingly believe that simply facilitating a transaction or service isn’t enough. Particularly in industries where supply is scarce, or in old-guard industries where innovation in the underlying product or service is slow, a digitized marketplace — even when managed — can produce underwhelming experiences for consumers.
In these instances, starting from the ground up is what is really required to deliver an optimal consumer experience. Back in 2014, Chris Dixon wrote a bit about this phenomenon in his post on “Full stack startups.” Fast forward several years, and more startups than ever are “full stack” or as we call it, “end-to-end operators.”
These businesses are fundamentally reimagining their product experience by owning the entire value chain, from end to end, thereby creating a step-functionally better experience for consumers. Owning more in the stack of operations gives these companies better control over quality, customer service, delivery, pricing and more — which gives consumers a better, faster and cheaper experience.
It’s worth noting that these end-to-end models typically require more capital to reach scale, as greater upfront investment is necessary to get them off the ground than other, more narrowly focused marketplaces. But in our experience, the additional capital required is often outweighed by the value captured from owning the entire experience.
End-to-end operators span many verticals
Many of these businesses have reached meaningful scale across industries:
Image Credits: Battery Ventures (opens in a new window)
All of these companies have recognized they can deliver more value to consumers by “owning” every aspect of the underlying product or service — from the bike to the workout content in Peloton’s case, or the bank account to the credit card in Chime’s case. They have reinvented and reimagined the entire consumer experience, from end to end.
What does success for end-to-end operator businesses look like?
As investors, we’ve had the privilege of meeting with many of these next-generation end-to-end operators over the years and found that those with the greatest success tend to exhibit the five key elements below:
1. Going after very large markets
The end-to-end approach makes the most sense when disrupting very large markets. In the graphic above, notice that most of these companies play in the largest, but notoriously archaic industries like banking, insurance, real estate, healthcare, etc. Incumbents in these industries are very large and entrenched, but they are legacy players, making them slow to adopt new technology. For the most part, they have failed to meet the needs of our digital-native, mobile-savvy generation and their experiences lag behind consumer expectations of today (evidenced by low, or sometimes even negative, NPS scores). Rebuilding the experience from the ground up is sometimes the only way to satisfy today’s consumers in these massive markets.
2. Step-functionally better consumer experience versus the status quo
Source: https://techcrunch.com/2021/01/22/end-to-end-operators-are-the-next-generation-of-consumer-business/
I had my first telehealth consultation last year, and there’s a high probability that you did, too. Since the pandemic began, consumer adoption of remote healthcare has increased 300%.
Speaking as an unvaccinated urban dweller: I’d rather speak to a nurse or doctor via my laptop than try to remain physically distanced on a bus or hailed ride traveling to/from their office.
Even after things return to (rolls eyes) normal, if I thought there was a reliable way to receive high-quality healthcare in my living room, I’d choose it.
Clearly, I’m not alone: a May 2020 McKinsey study pegged yearly domestic telehealth revenue at $3 billion before the coronavirus, but estimated that “up to $250 billion of current U.S. healthcare spend could potentially be virtualized” after the pandemic abates.
That’s a staggering number, but in a category that includes startups focused on sexual health, women’s health, pediatrics, mental health, data management and testing, it’s clear to see why digital-health funding topped more than $10 billion in the first three quarters of 2020.
Drawing from The TechCrunch List, reporter Sarah Buhr interviewed eight active health tech VCs to learn more about the companies and industry verticals that have captured their interest in 2021:
- Bryan Roberts and Bob Kocher, partners, Venrock
- Nan Li, managing director, Obvious Ventures
- Elizabeth Yin, general partner, Hustle Fund
- Christina Farr, principal investor and health tech lead, OMERS Ventures
- Ursheet Parikh, partner, Mayfield Ventures
- Nnamdi Okike, co-founder and managing partner, 645 Ventures
- Emily Melton, founder and managing partner, Threshold Ventures
Full Extra Crunch articles are only available to members
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Since COVID-19 has renewed Washington’s focus on healthcare, many investors said they expect a friendly regulatory environment for telehealth in 2021. Additionally, healthcare providers are looking for ways to reduce costs and lower barriers for patients seeking behavioral support.
“Remote really does work,” said Elizabeth Yin, general partner at Hustle Fund.
We’ll cover digital health in more depth this year through additional surveys, vertical reporting, founder interviews and much more.
Thanks very much for reading Extra Crunch this week; I hope you have a relaxing weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
8 VCs agree: Behavioral support and remote visits make digital health a strong bet for 2021
Image Credits: Luis Alvarez (opens in a new window) / Getty Images
Lessons from Top Hat’s acquisition spree
Image Credits: Bryce Durbin
In the last year, edtech startup Top Hat acquired three publishing companies: Fountainhead Press, Bludoor and Nelson HigherEd.
Natasha Mascarenhas interviewed CEO and founder Mike Silagadze to learn more about his content acquisition strategy, but her story also discussed “some rumblings of consolidation and exits in edtech land.”
How VCs invested in Asia and Europe in 2020
Image Credits: Nigel Sussman (opens in a new window)
Last year, U.S.-based VCs invested an average of $428 million each day in domestic startups, with much of the benefits flowing to fintech companies.
This morning, Alex Wilhelm examined Q4 VC totals for Europe, which had its lowest deal count since Q1 2019, despite a record $14.3 billion in investments.
Asia’s VC industry, which saw $25.2 billion invested across 1,398 deals is seeing “a muted recovery,” says Alex.
“Falling seed volume, lots of big rounds. That’s 2020 VC around the world in a nutshell.”
Decrypted: With more SolarWinds fallout, Biden picks his cybersecurity team
Image Credits: Treedeo (opens in a new window) / Getty Images
In this week’s Decrypted, security reporter Zack Whittaker covered the latest news in the unfolding SolarWinds espionage campaign, now revealed to have impacted the U.S. Bureau of Labor Statistics and Malwarebytes.
In other news, the controversy regarding WhatsApp’s privacy policy change appears to be driving users to encrypted messaging app Signal, Zack reported. Facebook has put changes at WhatsApp on hold “until it could figure out how to explain the change without losing millions of users,” apparently.
Hot IPOs hang onto gains as investors keep betting on tech
Image Credits: Nigel Sussman (opens in a new window)
A big IPO debut is a juicy topic for a few news cycles, but because there’s always another unicorn ready to break free from its corral and leap into the public markets, it doesn’t leave a lot of time to reflect.
Alex studied companies like Lemonade, Airbnb and Affirm to see how well these IPO pop stars have retained their value. Not only have most held steady, “many have actually run up the score in the ensuing weeks,” he found.
Dear Sophie: What are Biden’s immigration changes?
Image Credits: Bryce Durbin / TechCrunch
Dear Sophie:
I work in HR for a tech firm. I understand that Biden is rolling out a new immigration plan today.
What is your sense as to how the new administration will change business, corporate and startup founder immigration to the U.S.?
—Free in Fremont
Hello, Extra Crunch community!
Image Credits: atakan (opens in a new window) / Getty Images
I began my career as an avid TechCrunch reader and remained one even when I joined as a writer, when I left to work on other things and now that I’ve returned to focus on better serving our community.
I’ve been chatting with some of the folks in our community and I’d love to talk to you, too. Nothing fancy, just 5-10 minutes of your time to hear more about what you want to see from us and get some feedback on what we’ve been doing so far.
If you would be so kind as to take a minute or two to fill out this form, I’ll drop you a note and hopefully we can have a chat about the future of the Extra Crunch community before we formally roll out some of the ideas we’re cooking up.
Drew Olanoff
@yoda
In 2020, VCs invested $428m into US-based startups every day
Image Credits: Nigel Sussman (opens in a new window)
Last year was a disaster across the board thanks to a global pandemic, economic uncertainty and widespread social and political upheaval.
But if you were involved in the private markets, however, 2020 had some very clear upside — VCs flowed $156.2 billion into U.S.-based startups, “or around $428 million for each day,” reports Alex Wilhelm.
“The huge sum of money, however, was itself dwarfed by the amount of liquidity that American startups generated, some $290.1 billion.”
Using data sourced from the National Venture Capital Association and PitchBook, Alex used Monday’s column to recap last year’s seed, early-stage and late-stage rounds.
How and when to build marketing teams at deep tech companies
Image Credits: Andy Roberts (opens in a new window) / Getty Images
Building a marketing team is one of the most opaque parts of spinning up a startup, but for a deep tech company, the stakes couldn’t be higher.
How can technical founders working on bleeding-edge technology find the right people to tell their story?
If you work at a post-revenue, early-stage deep tech startup (or know someone who does), this post explains when to hire a team, whether they’ll need prior industry experience, and how to source and evaluate talent.
Bustle CEO Bryan Goldberg explains his plans for taking the company public
Bustle Digital Group CEO Bryan Goldberg. Image Credits: Bustle Digital Group
Senior Writer Anthony Ha interviewed Bustle Digital Group CEO Bryan Goldberg to get his thoughts on the state of digital media.
Their conversation covered a lot of ground, but the biggest news it contained focuses on Goldberg’s short-term plans.
“Where do I want to see the company in three years? I want to see three things: I want to be public, I want to see us driving a lot of profits and I want it to be a lot bigger, because we’ve consolidated a lot of other publications,” he said.
It may not be as glamorous as D2C, but beauty tech is big money
Image Credits: Laia Divols Escude/EyeEm (opens in a new window) / Getty Images
The U.S. Federal Trade Commission is not a huge fan of personal-care D2C brands merging with traditional consumer product companies.
This month, razor startup Billie and Proctor & Gamble announced they were calling off their planned merger after the FTC filed suit.
For similar reasons, Edgewell Personal Care dropped its plans last year to buy Harry’s for $1.37 billion.
In a harsher regulatory environment, “the path to profitability has become a more important part of the startup story versus growth at all costs,” it seems.
Twilio CEO says wisdom lies with your developers
SAN FRANCISCO, CA – SEPTEMBER 12: Founder and CEO of Twilio Jeff Lawson speaks onstage during TechCrunch Disrupt SF 2016 at Pier 48 on September 12, 2016 in San Francisco, California. Image Credits: Steve Jennings/Getty Images for TechCrunch
Companies that build their own tools “tend to win the hearts, minds and wallets of their customers,” according to Twilio CEO Jeff Lawson.
In an interview with enterprise reporter Ron Miller for his new book, “Ask Your Developer,” Lawson says founders should use developer teams as a sounding board when making build-versus-buy decisions.
“Lawson’s basic philosophy in the book is that if you can build it, you should,” says Ron.
We are all pumping out data into the cloud. Some of it we’d like to keep forever. Emortal is a startup that wants to help you organize, protect, preserve and pass on your ‘digital legacy’ and protect it from becoming unreadable, otherwise known as ‘bit-rot’. The project has received backing from the legendary Vint Cerf, one of the co-creators and founding fathers of the internet.
Emortal, which has been in engineering R&D for more than 10 years, has raised $5.7 million from ‘friends and family’. It is now raising $2.7 million in a crowdfunding on the UK’s Crowdcube platform, following what it says was a successful BETA test.
The company will use Google architecture to preserve digital memories – photographs, documents, correspondence, videos, interviews and more – indefinitely into the future. The idea is that this will ensure that as, operating systems, devices and tech evolves, your entire digital legacy will remain safe, secure and accessible – to only those you choose.
The platform is now set to be launched in the UK and US in Q3 this year and will be designed for occasional considered use, for example when taking a picture at a christening, rather than saving every photo you take. It will charge a flat, standard subscription fee of £4.99 a month.
Cerf said in a statement: “The cornerstone of the Emortal proposition is to tie data preservation in with digital legacy protection to ensure that our digital memories are safe and accessible for generations to come.”
Colin Culross, founder and CEO of Emortal said: “We are keen to use the Crowdcube platform for this raise because Emortal is a service designed for ALL families. We believe the most powerful way for the business to grow is to have thousands of our customers investing in the business.”
