Month: July 2018

Life without Uber should be simple for Grab, but a battle with regulators in Singapore could see the company’s acquisition of Uber’s Southeast Asia business unwound while some consumers have voiced concern around a lack of competition.

Grab co-founder Hooi Ling Tan recently claimed competition remains in the market, but that hasn’t stopped another consumer backlash after the ride-hailing firm altered its loyalty program without warning.

To be fair to Grab, earning loyalty points for taxi rides is something unique — Uber doesn’t offer any kind of program, for example — and the changes initiated last week seem aimed at spreading the benefit beyond taxis and into Grab’s newer ventures, which include its GrabPay payment service and food deliveries.

However, in doing so, the company made two cardinal sins. The changes included the lowering of benefits for Grab’s highest tier (read: most loyal) customers — with rebates dropping from a range of 3.5-4.5 percent to 0.7-1.7 percent, as MileLion explains in thorough detail. Worse than that, it initiated the new terms, which include these drastic drops, on a Friday and with immediate effect.

That meant points earned over the past year were suddenly devalued with no apparent recourse.

10 July 2018; Tan Hooi Ling, Co-Founder, Grab, speaks at a pressconferencee during day one of RISE 2018 at the Hong Kong Convention and Exhibition Centre in Hong Kong. Photo by Stephen McCarthy / RISE via Sportsfile

Unsurprisingly that sparked a backlash, with many consumers accusing Grab of making the changes to save on money. (Grab has said it hasn’t increased prices after Uber’s exit despite some consumers claiming to the contrary.)

That led to a second announcement, made late on Monday, that postponed the introduction of the new loyalty program terms until September 30. However, it hasn’t scrapped the new changes themselves. That’s the right move, and it gives customers the chance to spend the credit they earned in the way they believed it would be redeemed before the change kicks in.

“We acknowledge that customers would appreciate time to adjust to the changes. Effective tomorrow (24 July) at 8am until 30 September, GrabRewards members can claim ride reward points at the previous rates. Customers who have purchased Grab ride rewards based on the new rates will have the difference in points refunded,” the company said in a statement.

It added that it plans to introduce “more exclusive perks” for its higher-tier ‘platinum” and ‘gold’ customers before the end of the year. TechCrunch understands that will relate to partnerships with third-parties, enabling users to spend points accumulated with Grab in more places although details aren’t finalized.

In the past, competition with Uber might have given Grab some leeway for messing up communication with users. But, as this latest saga shows, the removal of that competition has dented consumer confidence in Grab, and that means every misstep has the potential to alienate or upset users more than it did in the past. That’s part and parcel of adjusting from being the underdog fighting a global giant to being the biggest fish in the pond.

Catering marketplace company ezCater is already putting its big $100 million funding round to good use. The company is acquiring GoCater, a European marketplace that operates in the same field. This is ezCater’s first international expansion move.

If you’re in charge of ordering catered lunch at your office, you probably have heard about ezCater . The company lets you order breakfast, lunch or dinner for 10, 30 or maybe 100 people at once. This service could be particularly useful to impress a client, throw an office party, get lunch together during an off-site and more.

But ezCater doesn’t cook anything itself. The company is a marketplace and connects you with catering companies and big restaurants around you. In other words, ezCater lets you browse the menu of dozens of restaurants around you from the same website and place an order without picking up the phone.

Of course, ezCater didn’t invent catering. But catering is a fragmented industry with a lot of friction. It’s hard to know how much you’re going to pay in advance, it takes a lot of effort to find a new restaurant outside of your usual list. And restaurants could use a new way to promote their offering. Those are the perfect ingredients to create an online marketplace.

You may already know all the options around your office, but ordering through ezCater provides additional benefits. For instance, all your receipts are centralized in the same interface, which lets you get a clear overview of your spendings on catering.

You can also let other people order food for their clients and events. ezCater lets you set maximum amounts, tipping policies and more.

GoCater offers more or less the same thing, but in France and Germany. The company started as a spinoff from French startup La Belle Assiette. GoCater lets you create a whitelist of catering options. You can also set up an approval system so that the intern doesn’t order ice creams for everyone. Finally, GoCater clients only get billed once per month, even if companies order multiple times.

You pay the same price if you order through GoCater or the catering company directly. Catering companies end up paying a cut on GoCater orders. But the startup takes care of billing, accounting and accounts receivable. This way, you can focus on your core business instead of chasing money from past clients.

ezCater is an order of magnitude bigger than GoCater. ezCater works with 60,000 restaurants, while GoCater only has a few hundred restaurants on its platform. It’s worth noting that ezCater has been around for much longer.

But GoCater has one big advantage over ezCater — they have a team on the ground in Europe, ready to attract new restaurants and corporate clients. It’s clear that ezCater was looking for a way to get started in Europe, and GoCater seems like the right fit.

For now, the company will keep both brands after the acquisition. The teams will slowly merge the platforms into a single product.

“The entire GoCater team is staying, and we’re now going to rapidly expand the European team of the company — both the sales team for Europe and the tech and product team for the group,” GoCater founder and CEO Stephen Leguillon told me.

It was revealed at E3 last month that Microsoft was building a cloud gaming system. A report today calls that system Scarlett Cloud and it’s only part of Microsoft next-gen Xbox strategy. And it makes a lot of sense, too.

According to Thurrott.com, noted site for all things Microsoft, the next Xbox will come in two flavors. One, will be a traditional gaming console where games are processed locally. You know, like how it works on game systems right now. The other system will be a lower-powered system that will stream games from the cloud — most likely, Microsoft’s Azure cloud.

This streaming system will still have some processing power, which is in part to counter latency traditionally associated with streaming games. Apparently part of the game will run locally while the rest is streamed to the system.

The streaming Xbox will likely be available at a much lower cost than the traditional Xbox. And why not. Microsoft has sold Xbox systems with a slim profit margin, relying on sales of games and online services to make up the difference. A streaming service that’s talk about on Thurrott would further take advantage of this model while tapping into Microsoft’s deep understanding of cloud computing.

A few companies have tried streaming full video games. Onlive was one of the first and while successful for a time, but eventually went through a dramatic round of layoffs before a surprise sale for $4.8 million in 2012. Sony offers an extensive library of PS2, PS3 and PS4 games for streaming through its PlayStation Now service. Nvidia got into the streaming game this year and offers a small selection of streaming through GeForce Now. But these are all side projects for the companies.

Sony and Nintendo do not have the global cloud computing platform of Microsoft, and if Microsoft’s streaming service hits, it could change the landscape and force competitors to reevaluate everything.

The title could just as easily be Sweet Justice.

The Boston-headquartered publishing house Little, Brown has agreed to publish a new book about Cameron and Tyler Winklevoss, who famously settled a 2008 lawsuit against their former Harvard classmate Mark Zuckerberg over Facebook’s earliest days, then made a much larger fortune with their settlement money by investing it in bitcoin.

According to the business magazine The Bookseller, the new opus, titled Bitcoin Billionaires, covers a lot of territory, from the brothers trying without success to raise a venture fund in Silicon Valley (no one wanted to upset Zuckerberg, is the claim) to first hearing about bitcoin on a jaunt to Ibiza, Spain. In fact, they reportedly wound up gathering up one percent of all the bitcoin in circulation during or around 2012. 

Whether the book is made into a movie remains to be seen, but it seems as likely as not, given that its author is fellow Harvard grad Ben Mezrich, who also authored The Accidental Billionaires.

That book was eventually adapted by Aaron Sorkin into the Academy Award-winning movie about Facebook’s origins, The Social Network. In fact, when Mezrich began pitching his newest effort to publishing houses in the spring, the New York Post reported on “buzz that there’s already a movie deal in the works for the planned book.”

In the meantime, the Winklevoss brothers are receiving some fresh attention in Fortune, which included them in a new 40 Under 40 List that the outlet published this morning and which focuses on young movers and shakers at the “edge of finance and technology.” The reasoning behind their inclusion: the brothers, now 36, run one of the world’s most influential crypto funds with their New York and L.A.-based firm Winklevoss Capital. They also oversee the three-year-old digital asset exchange Gemini, which they founded in 2015.

Pokémon GO just got a little surprise update, complete with a curious new feature: “Lucky” Pokémon

Most things in Pokémon GO are adapted from things that already exist in the Pokémon universe. Items like incense, lucky eggs, and the like all exist in the main Pokémon series (though what these items actually do tends to be a bit different in GO.)

Lucky Pokémon, as far as I know, is a new concept all together.

So what are they? And how are they different from existing Shiny Pokémon?

Shiny Pokémon are rare variations of existing Pokémon with colors that differ from the standard. You might tap on your 398th Dratini, for example, only to find that it’s bright pink instead of the standard blue. You might randomly tap a Minun to find that it has green ears instead of blue, or an Aron with red eyes instead of blue. It’s a fun way to keep players tapping on Pokémon even after their Pokédex is technically complete. The differences are only skin deep, though; beyond the visual shift, Shiny Pokémon are generally functionally the same as their non-shiny version.

The new “Lucky” Pokémon, meanwhile, don’t look much different (save for a sparkly background when you look at them in your collection). They do, however, have a little functional advantage: powering them up requires less stardust. In other words, you’ll be able to make them stronger faster and with less work.

How do you get’em? By trading. While folks are still working out the exact mechanics, it looks like non-Lucky Pokémon have a chance to become Lucky Pokémon when traded from one player to another. According to Niantic, the odds of a Pokémon becoming “lucky” after a trade increase based on how long ago it was originally caught.

And for the collectors out there: yes, for better or worse, “Lucky” Pokémon are now a category in the Pokédex. Niantic just added trading to Pokémon GO a month ago, and this is a clever way to get players to care about trading even after they’ve already caught everything there is to catch.

This update also brings a few other small changes, mostly just polishing up the way the friend/trading system works:

• You can now give friends nicknames. That’s super useful for remembering who is who, or for remembering that you added PikaFan87 because they promised to trade you a Kangaskhan
• You now get a bit of XP for sending gifts
• Gifts can now contain stardust
• You can now delete gifts from your inventory

Doughbies should have been a bakery, not a venture-backed startup. Founded in the frothy days of 2013 and funded with $670,000 by investors including 500 Startups, Doughbies built a same-day cookie delivery service. But it was never destined to be capable of delivering the returns required by the VC model that depends on massive successes to cover the majority of bets that fail. The startup became the butt of jokes about how anything could get funding.

This weekend, Doughbies announced it was shutting down immediately. Surprisingly, it didn’t run out of money. Doughbies was profitable, with 36 percent gross margins and 12 percent net profit, co-founder and CEO Daniel Conway told TechCrunch. “The reason we were able to succeed, at this level and thus far, is because we focused on unit economics and customer feedback (NPS scoring). That’s it.”

Many other startups in the on-demand space missed that memo and vaporized. Shyp mailed stuff for you and Washio dry cleaned your clothes, until they both died sudden deaths. Food delivery has become a particularly crowded cemetary, with Sprig, Maple, Juicero, and more biting the dust. Asked his advice for others in the space, Conway said to “Make sure your business makes sense – that you’re making money, and make sure your customers are happy.”

Doughbies certainly did that latter. They made one of the most consistently delicious chocolate chip cookies in the Bay Area. I had them cater our engagement party. At roughly $3 per cookie plus $5 for delivery, it was pricey compared to baking at home, but not outrageous given SF restaurant rates. From its launch at 500 Startups Demo Day with an ‘Oprah’ moment where investors looked beneath their seats to find Doughbies waiting for them, it cared a lot about the experience.

But did it make sense for a bakery to have an app and deliver on-demand? Probably not. There was just no way to maintain a healthy Doughbies habit. You were either gunning for the graveyard yourself by ordering every week, or like most people you just bought a few for special occassions. Startups like Uber succeed by getting people to routinely drop $30 per day, not twice a year. And with the push for nutricious and efficient offices, it was surely hard for enterprise customers to justify keeping cookies stocked.

Flanked by Instacart and Uber Eats, there weren’t many ripe adjacent markets for Doughbies to conquer. It was stuck delivering baked goods to customers who were deterred from growing their cart size by a sense of gluttony.

Without stellar growth or massive sales volumes, there aren’t a lot of exciting challenges to face for people like Conway and his co-founder Mariam Khan. “Ultimately we shutdown because our team is ready to move on to something new” Conway says.

The startup just emailed customers explaining that “We’re currently working on finding a new home for Doughbies, but we can’t make any promises at this time.” Perhaps a grocery store or broader food company will want its logistics technology or customer base. But delivery is a brutal market to break into, dominated by those like Uber who’ve built economies scale through massive fleets of drivers to maximize routing efficiency. 

In the end, Doughbies was a lifestyle business. That’s not a dirty word. A few co-founders with dream can earn a respectable living doing what they care about. But they have to do it lean, without the advantage of deep-pocketed investors.

As soon as a company takes venture funding, it’s under pressure to deliver adequate returns. Not 2X or 5X, but 10X, 100X, even 1000X what they raise. That can lead to investors breathing down their neck, encouraging big risks that could tank the business just for a shot at those outcomes. Two years ago we saw a correction hit the ecosystem, writing down the value of many startups, and we continue to see the ripple effect as companies funded before hit the end of their runway.

Desperate for cash, founders can accept dirty funding terms that screw over not just themselves, but their early employees and investors. FanDuel raised over $416 million at a peak valuation of $1.3 billion. But when it sold for $465 million, the founders and employees received zero as the returns all flowed to the late-stage investors who’d secured non-standard liquidation preferences. After nearly 10 years of hard work, the original team got nothing.

Not every business is a startup. Not every startup is a rocket ship. It takes more than just building a great product to succeed. I can require suddenly cutting costs to become profitable before you run out of funding. Or cutting ambitions and taking less cash at a lower valuation so you can realistically hit milestones. Or accepting a low-ball acquisition offer because it’s better than nothing. Or not raising in the first place, and building up revenues the old-fashioned way so even modest growth is an accomplishment.

Investors are often rightfully blamed for inflating the bubble, pushing up raises and valuations to lure startups to take their money instead of someone else’s. But when it comes to deciding what could be a fast-growing business, sometimes its the founders who need the adjustment.

San Francisco is one of the most beautiful, diverse cities in the world. If you’re planning a trip to San Francisco this September during Labor Day week, maybe for some sightseeing, maybe for TechCrunch Disrupt SF, then you’ll want to make sure you take advantage of these killer hotel deals TechCrunch has negotiated.

These discounts are not only cheaper than publicly offered rates but you’ll also get some free bells and whistles* at many of the hotels, such as:

• Complimentary Wi-Fi
• Complimentary access to the fitness center
• 20 percent discount on food and beverage outlets inside the hotel
• Complimentary use of bicycles
  *Concessions vary from hotel to hotel

All these hotels are within easy walking distance of public transportation and major SF sights. You can check out the complete list of hotels right here. You do not need to be registered for Disrupt SF 2018 to take advantage of these awesome hotel discounts.

Hotel highlights

Grand Hyatt San Francisco
Towering 36 stories above newly renovated historic Union Square in the heart of downtown San Francisco, the Grand Hyatt is the perfect place to relax after a busy day around the city. See more.

Hilton San Francisco Union Square
The Hilton San Francisco Union Square is located in the heart of San Francisco just off Union Square. The location is very convenient and an ideal spot from which to enjoy the many exciting attractions and neighborhoods that make up the city. See more.

InterContinental San Francisco
Towering 32 stories high, the 550-room InterContinental San Francisco Hotel features 43,000 square feet of flexible meeting space, destination restaurant and companion bar, 10-room treatment spa, health club and indoor swimming pool. See more.

About Disrupt SF 2018
Disrupt SF 2018 (September 5-7) is where thousands of startups, investors, founders and entrepreneurs gather to hear from thought leaders and discover the latest tech innovations. With three stages hosting awesome content, a $100,000 pitch competition and a startup-filled expo floor, Disrupt SF 2018 is an event you won’t want to miss. Early-bird ticket sales end July 25. Book your tickets here.

Have more questions about booking your hotel room, or traveling with a big group? Email TechCrunch@38nconnections.com.

When Google Cloud brought Diane Greene on board at the end of 2015, one of her goals was to expand the division’s partnership network, an approach she found worked quite well when she was running VMware in the early 2000s. It appears to be working at Google too.

This week at Google Next, the company’s annual cloud conference, they announced the partner program had grown significantly since the beginning of last year. “Since the start of 2017, we’ve increased the number of technology partners by 10x and we’ve more than doubled our team supporting these partners,” Google’s Nan Boden and Nina Harding wrote in a blog post on partner program progress.

Google is partnering with a variety of large enterprise vendors from Cisco to SAP to NetApp to Diane Greene’s old company, VMware. In addition, they are also working with the traditional systems integrators like Accenture, Deloitte, KPMG and others.

All of this is enabling Google Cloud customers to work through familiar channels while helping Google to build out its cloud business and gain more traction in the enterprise. Partners in general help customers work with a platform like Google Cloud more easily by providing integrations that might not otherwise exist.

One thing Google has going for it, especially on the G Suite side of the house, which includes Gmail, Docs, Drive and Calendar, is sheer numbers with millions of users. It benefits the partner to work with a company like Google Cloud to help all their common users, and perhaps attract new ones, and it benefits Google because it makes their cloud services all the more valuable to the customer.

The company sees Software as a Service in particular as a key area for growth and they announced out a new partnership program this week with access to more Google personnel and marketing funding to help encourage more interaction with SaaS partners on the platform. They already have multiple agreements in place with popular SaaS vendors including Salesforce, Box, MongoDB, Zenoss, Elastic, RedisLabs, JFrog, BetterCloud, DialPad, and many others

Cloud computing has always been different from traditional enterprise computing because cooperation has always been the watch word. Even companies like Salesforce and DialPad and Cisco and SAP that could be competing with Google on some levels see the benefits of working with them (and other cloud providers). It’s what their customers want, and cooperation when it makes sense, benefits all parties involved.

Google was already worth more than $800 billion and, while well short of Apple, is now jumping into that batch of companies that are on their way to being a $1 trillion company.

Alphabet, Google’s parent company, substantially outperformed market expectations in its second quarter by bringing in $32.66 billion. That’s a 26 percent increase year-over-year, and, perhaps more significantly, it’s a faster rate of increase than it saw in the same quarter last year. The company’s second-quarter revenue in 2017 was a 21 percent jump from that in 2016. It’s a bit of a handful, but either way it shows that Alphabet still continues to — unsurprisingly — print money off its advertising business even as its cost-per-click (one of the metrics that indicates the value of its advertisements) continues to decline.

Following the report, Alphabet shares jumped an additional 5 percent, making its valuation about neck-and-neck with Amazon — though, again, well short of Apple. But it wasn’t that long ago that Apple hit a $900 billion market cap and we started talking about it being a contender to hit $1 trillion. Google’s advertising business continues to be healthy and growing. While it’s getting slapped with a massive fine by the EU, this doesn’t seem to bother Wall Street all that much as it sees Alphabet as a company that will continue to grow over time.

Google’s “other revenue,” which includes its very increasingly important cloud efforts, rose substantially to $4.43 billion. But comparing the growth patterns, Google’s advertising revenue grew around 24 percent, while Google’s other revenue grew around 37 percent year-over-year. This isn’t so dissimilar from the patterns you’ll see with Amazon, where its core business continues to grow but its AWS growth appears to be increasingly contributing to its growth and performance. It’s still a slice-of-a-slice of its advertising revenue, but it does represent some substantial upside.

That’s going to be critical going forward as Google tries to convince investors that it’s not just an advertising company, but also a services company, with a set of hardware, and a platform company beyond even that. As Google continues to capture developers with its deep-learning framework TensorFlow, and lock them into its own ecosystem with hardware like the TPU geared toward deep learning, it’ll continue to see a lot of momentum as deep learning tools proliferate across the entire technology industry. Indeed, TensorFlow is increasingly killing off a lot of the complexity that goes into complicated machine learning problems, and it’s going to be a strong lure to get companies onto its cloud platform.

That EU fine also got its own line item in Google’s earnings report, which is kind of interesting in a sort of zeitgeist-y way.

Its other bets — not to be confused with other revenue — that include its other ancillary projects that may or may not pan out and be part of Alphabet’s future business continued to see some improvement by hitting $145 million in revenue in the second quarter this year. Its losses there widened from a loss of $633 million to $732 million.