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We’re excited to announce another terrific panel for our stacked TechCrunch Early Stage event on April 1 & 2. Marlon Nichols will be joining us to discuss securing seed funding.
Nichols is intimately acquainted with the topic — as a founding managing partner of MaC Venture Capital (nee Cross Culture Ventures), he has been involved in helping more than 100 early-stage startups receive seed funding. Previously, Nichols served as a Kauffman Fellow and Investment Director at Intel Capital, focusing on media and entertainment.
He has had a hand in a number of high-profile investments, including Gimlet Media, MongoDB, Thrive Market, PlayVS, Fair, LISNR, Mayvenn, Blavity and Wonderschool. His accolades include the MVMT50 SXSW 2018 Innovator of the Year and Digital Diversity’s Innovation & Inclusion Change Agent awards.
He will be discussing ways to get on investors’ radar and how to raise that early round. Per the panel description:
Right now, there is more seed-stage fundraising than ever before, and Marlon will speak on how to get noticed by investors, how to grow your business and how to survive in the crowded, competitive space of tech startups. He will provide insights on how to network, craft a great pitch and target the best investors for your success.
The panel is part of the two days of events that explore seed and Series A fundraising, recruiting and more for early-stage startups at TC Early Stage – Operations and Fundraising on April 1 & 2. Grab your ticket now before prices increase next week!
Just because there are no short cuts to startup success doesn’t mean you have to reinvent the wheel. At TechCrunch Early Stage 2021, a virtual bootcamp experience in two distinct parts, you’ll learn from leading experts across the startup spectrum — including prominent founders ready to share their personal experiences and hard-won advice to help you avoid costly missteps.
Early-bird pricing for passes to Early Stage part one (April 1-2) — or dual-event passes (Early Stage part 2 takes place July 8-9) — remains in effect for just one more week. Be a savvy shopper — save up to $250 — beat the deadline and buy your Early Stage passes by Feb 27 at 11:59 p.m. (PT).
While both Early Stage bootcamps focus on startups in the very early innings, each event will feature different topics, content and experts. You’ll learn or strengthen the core entrepreneurial skillsets every startup founder needs to master — legal issues, fundraising, marketing, growth, product-market fit, tech stack, recruiting, pitch deck teardowns and more.
What’s more, you’ll learn from the best of the best. Here are just two of the featured speakers ready to download serious knowledge in April. We’ll be adding even more (and posting the agenda) in the weeks to come.
Melissa L. Bradley: Co-founder of venture backed Ureeka (a community where small businesses gain unprecedented access to the expertise needed to grow their business), Melissa is also founder and Managing Partner of 1863 Ventures. A professor at Georgetown University, she teaches impact investing, social entrepreneurship, P2P economies and innovation.
Neal Sáles-Griffin: Managing Director of Techstars Chicago and a Venture Partner for MATH, Neal is an entrepreneur, investor and teacher. In 2011, he co-founded the first beginner-focused, in person coding bootcamp. He is active in non-profit and civic engagement across Chicago and in 2018 he ran for mayor. Neal has an undergraduate degree from Northwestern University, where he is an Adjunct Professor teaching entrepreneurship.
We love highlighting the best startups, and we’re devoting day two to that noble cause in the form of an Early Stage Pitch-Off! We’re looking for 10 founders who will pitch live on stage for five minutes followed by a five-minute Q&A with a panel of prominent VC judges. The top three founders pitch yet again to a new set of judges — and engage in a more intensive Q&A. Talk about awesome exposure!
Get the essential Pitch-off 411 here (like who qualifies and what the winner receives). Whatever you do, apply here before the deadline: February 21 at 11:59 p.m.
Don’t grind your gears reinventing the wheel. Join us at TechCrunch Early Stage 2021 on April 1-2. You have just one week left to score the best possible price. Buy your early bird pass before the deal ends on Feb 27 at 11:59 p.m. (PT).
Is your company interested in sponsoring or exhibiting at Early Stage 2021 — Operations & Fundraising? Contact our sponsorship sales team by filling out this form.
Financial institutions are falling behind the tech curve in delivering on the convenience consumers demand, leaving the door wide open for Big Tech companies like Apple, Amazon and Google to become our bankers. In November, Google redesigned its contactless payments service Google Pay, merging the services of traditional banks with the seamless, convenient experience users expect from the likes of Big Tech.
But there’s a catch.
Despite the elaborate smoke and mirrors that Google has put up, one fact remains: Google is an advertising company with ads representing 71% of its revenue sources in 2019.
What happens when an advertising company now wants to be our bank?
One must ask: What happens when an advertising company — armed with the terabytes of data points it has harvested from our personal emails, location data, song preferences and shopping lists — now wants to be our bank? The answer is potentially unsettling, especially considering the extraordinary neglect Big Tech has shown for user privacy, as seen here. And here. And here.
As the marketplace is poked by yet another technocrat tentacle, this time in the heart of financial services, traditional banks that consumers and businesses once relied on find themselves at a crossroads. To retain market share, these institutions will need to continue investing in fintech so they can level up with convenience and personalization provided by new competitors while preserving trust and transparency.
Traditional banks miss the digital mark
Fintech holds the potential to fundamentally transform the financial services industry, enabling financial institutions (FIs) to operate more efficiently and deliver superb user experiences (UX).
But there’s a digital gap holding FIs back, especially small community banks and credit unions. Many have long struggled to compete with the deep pockets of national banks and the tech savvy of neo and challenger banks, like Varo and Monzo. After investing more than $1 trillion in new technology from 2016 through 2019, the majority of banks globally have yet to see any financial boost from digital transformation programs, according to Accenture.
Never before has this gap been more prevalent than amid the pandemic as customers migrated online en masse. In April 2020 alone, there was a 200% uptick in new mobile banking registrations and total mobile banking traffic jumped 85%, according to Fidelity National Information Services (FIS).
Data is the grand prize for Big Tech, not revenue from financial services
Naturally, Big Tech players have recognized the opportunity to foray into financial services and flex their innovation muscles, giving banks and credit unions a strenuous run for their money. Consumers looking to digitize their finances must heed caution before they break up with traditional banks and run into the arms of Big Tech.
It’s important to bear in mind that the venture into payments and financial services is multipronged for Big Tech players. For example, in-house payments capabilities would not just provide companies focused on retail and commerce an additional revenue stream; it promises them more power and control over the shopping process.
Regulations in the U.S. might restrain this invasion to an extent, or at least limit a company’s ability to directly profit. Because let’s face it: the Big Tech players certainly aren’t asking for the regulatory “baggage” that comes with a bank charter.
But tech companies don’t need to profit directly from offerings like payments and wealth management, so long as they can hoard data. Gleaning insights on users’ spending patterns offers companies significant ROI in the long term, informing them how a user spends their money, if they have a mortgage, what credit cards they have, who they bank with, who they transact with, etc.
Financial behavior also potentially includes highly personal purchases, such as medications, insurance policies and even engagement rings.
With this laser sharp view into consumers’ wallets, imagine how much more valuable and domineering Google’s advertising platform will become.
Banks must lead the charge in ethical data
When it comes to the digitization of financial services, the old adage “with great power comes great responsibility” rings true.
Customer data is an incredible tool, allowing banks to cater to all consumers wherever they fall on the financial spectrum. For example, by analyzing a customers’ spending habits, a bank can offer tailored solutions that help them save, invest or spend money more wisely.
However, what if being a customer of these services means you’re then inundated with ads that respond directly to your searches and purchases? Or, even more insidiously, what if your bank now knows you so well that they can create a persona for you and proactively predict your needs and desires before even you can? That’s what the future looks like if you’re a customer of the Bank of Google.
It’s not enough to use customer data to refine product offerings. It must be done in a way that ensures security and privacy. By using data to personalize services, rather than bolster revenue behind the scenes, banks can distinguish a deeper understanding of consumer needs and gain trust.
Trust could become the weapon that banks use to defend their throne, especially as consumers become more aware of how their data is being used and they rebel against it. A Ponemon study on privacy and security found that 86% of adults said they are “very concerned” about how Facebook and Google use their personal information.
In an environment where data collection is necessary but contentious, the main competitive advantage for banks lies in trust and transparency. A report from nCipher Security found that consumers still overwhelmingly trust banks with their personal information more than they do other industries. At the same time, trust is waning for technology, with 36% of consumers reportedly less comfortable sharing information now than a year ago, according to PwC.
Banks are in a prime position to lead the charge on ethical data strategy and the deployment of artificial intelligence (AI) technologies, while still delivering what consumers need. Doing so will give them a leg up on collecting data over Big Tech in the long term.
Looking toward a customer-centric, win-win future
The financial services industry has reached a pivotal crossroads, with consumers being given the choice to leave traditional banks and hand over their personal data to Big Tech conglomerates so they can enjoy digital experiences, greater convenience and personalization.
But banks can still win back consumers if they take a customer-centric approach to digitization.
While Big Tech collects consumer data to support their advertising revenue, banks can win the hearts of consumers by collecting data to drive personalization and superior UXs. This is especially true for local community banks and credit unions, as their high-touch approach to services has always been their core differentiator. By delivering personalized interactions while ensuring the data collection is secure and transparent, banks can regain market share and win the hearts of customers again.
Big Tech has written the playbook for what not to do with our data, while also laying the framework for how to build exceptional experiences. Even if a bank lacks the technology expertise or the deep-pocket funding of Facebook, Google or Apple, it can partner with responsible fintechs that understand the delicate balance between ethical data usage and superior UXs.
When done right, everybody wins.
Yesterday’s House Financial Services Committee hearing about GameStop and Robinhood wasn’t great. Reuters has a good summary of one its few interesting bits, a scrap between the elected inquisitors and Robinhood CEO Vlad Tenev regarding whether or not his firm had to raise additional capital to continue operations during the GameStop saga; TechCrunch has reported on the matter since its inception, though learning a little bit more was useful.
Lawmakers also managed to extract an interesting, if expected data point: the company generates more than half of its revenues from payment for order flow (PFOF), a controversial practice in which Robinhood is paid by market makers for executing customer trades.
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Those skeptical of PFOF contend that the setup effectively transforms users of neotrading services that monetize their order volume into the product being sold, leaving retail investors susceptible to poor trade execution pricing. Robinhood has gotten into trouble regarding trade pricing in the past. But those in who don’t find PFOF to be an inherent issue contend that it allows for low-cost consumer access to the equities markets. That’s fair enough.
Regardless of where you land between — or even on — those two poles is immaterial. PFOF doesn’t appear to be in material danger of being regulated out of existence, and Robinhood’s use of the business model allowed it to generate huge growth in 2020. For perspective, Robinhood’s PFOF revenues rose from a little over $90 million in Q1 2020 to around $220 million in Q4.
How many users did it take to generate those PFOF sums? Tenev also told Congress in his written testimony that Robinhood has more than 13 million “customers,” though we lack clarity on precisely who counts as customer. But those millions do not monetize equally. Some of those 13 million users are more lucrative than others.
To understand that, let’s start with working to learn what fraction of Robinhood users trade options. Here’s Tenev, via his testimony:
[A]s of the end of 2020, about 13 percent of Robinhood customers traded basic options contracts (e.g., puts and calls), and only about two percent traded multi-leg options. Less than three percent of funded accounts were margin-enabled.
This, combined with the fact that Tenev allowed that PFOF incomes comprise the majority of its revenue, comes to an interesting conclusion: A somewhat small fraction of Robinhood’s users are responsible for the vast bulk of its incomes. We can tell that that is the case by recalling that when we examine PFOF data, Robinhood’s revenues from trades in S&P 500 stocks are modest, its incomes from trades involving non-S&P 500 stocks a bit larger, and its incomes from options’ order flow comprised the majority of the revenue reported in recent periods.
For example, in the months of October, November, and December, TechCrunch calculates that Robinhood’s PFOF revenues were around 67%, 64%, and 63% options-derived, respectively.
For reference, 13% of 13 million is 1.69 million. That’s the number of Robinhood users we estimate have traded options. The multi-leg options number is a far smaller 260,000 users.
Source: https://techcrunch.com/2021/02/19/a-fraction-of-robinhoods-users-are-driving-its-runaway-growth/
The COVID-19 vaccine developed by Pfizer and BioNTech now has less stringent and extreme transportation requirements than it debuted with. Originally, the mRNA-based vaccine had to be maintained at ultra-low temperatures throughout the transportation chain in order to remain viable – between -76°F and -112°F. New stability data collected by Pfizer and BioNTech, which has been submitted to the U.S. Food and Drug Administration (FDA) for review, allow it to be stored at temps between 5°F and -13°F – ranges available in standard medical freezers found in most clinics and care facilities.
The vaccine should remain stable for up to two weeks at that temperature, which vastly improves the flexibility of its options for transportation, and last-mile storage in preparation for administration to patients. To date, the vaccine has relied largely on existing “cold-chain” infrastructure to be in place in order for it to be able to reach the areas where it’s being used to inoculate patients. That limitation hasn’t been in place for Moderna’s vaccine, which is stable at even higher, standard refrigerator temperatures for up to a month.
This development is just one example of how work continues on the vaccines that are already being deployed under emergency approvals by health regulators across the U.S. and elsewhere in the world. Pfizer and BioNTech say they’re working on bringing those storage temp requirements down even further, so they could potentially approach the standard set by the Moderna jab.
Taken together with another fresh development, study results from Israeli researchers that found just one shot of the ordinarily two-shot Pfizer-BioNTech vaccine could be as high as 85 percent effective on its own, this is a major development for global inoculation programs. The new requirements open up participation to a whole host of potential new players in supporting delivery and distribution – including ride-hailing and on-demand delivery players with large networks like Amazon, which has offered the President Biden’s administration its support, and Uber, which is already teamed up with Moderna on vaccine education programs.
This also opens the door for participation from a range of startups and smaller companies in both the logistics and the care delivery space that don’t have the scale or the specialized equipment to be able to offer extreme ‘cold-chain’ storage. Technical barriers have been a blocker for some who have been looking for ways to assist, but lacked the necessary hardware and expertise to do so effectively.
