Month: June 2019

The writing has been on the slate for some time now. Roughly this time last year, we reported that Google had wiped all tablet sales off its site. Turns out that was just a bug, but it seemed like an ominous portent of things to come.

Google still went ahead and launched the Pixel Slate late last year, hoping the device would give users a much welcome form factor alternative to its high-end Pixel Book. Ultimately, however, the device felt redundant, and now it seem it will be the last of its kind. The company this week admitted that its hardware team is giving up the tablet ghost.

“For Google’s first-party hardware efforts, we’ll be focusing on Chrome OS laptops and will continue to support Pixel Slate,” the company said in statement sent to the press today, in response to earlier reports.

Google SVP Rick Osterloh took to Twitter to further clarify “unclear” articles. “Hey, it’s true…Google’s HARDWARE team will be solely focused on building laptops moving forward,” he wrote, “but make no mistake, Android & Chrome OS teams are 100% committed for the long-run on working with our partners on tablets for all segments of the market (consumer, enterprise, edu).”

Tablets have, of course, proven a tough nut to crack for practically every company that isn’t Apple. Google has taken numerous swings at the space, but never quite found its place in amongst the premium iPad or far cheaper Android/Chromebook alternatives. And while the company once seemed content to treat Nexus/Pixel devices as much as references for its software, it has clearly taken a much more serious approach to its own devices in recent years.

So, goodbye to the Google tablet. For now, at least.

NASA’s very own free-floating Companion Cube equivalent took its own first tentative ‘steps’ in space today, demonstrating its ability to rotate on its own in zero gravity inside the International Space Station. The robot, called ‘Bumble’ and one of a series of Astrobee robots that NASA developed to work along with astronauts on the ISS, is the first ever to fly on its own in space.

Bumble’s first flight wouldn’t necessarily wow at an airshow – the robot essentially flew a foot forward and rotated a bit. But they’re important basic maneuvers in terms of making sure the robot’s propulsion system is working and tuned correctly. Eventually, the plan is for these to operate autonomously and do some basic maintenance work, as well as support experiments, so it needs to be operating exactly as intended before it starts freely sharing space with tender human astronauts.

The Astrobee line currently counts three individual robots among its members, including Bumble, Honey (also already on the ISS) and Queen, which is coming up in July on the next resupply mission, if all goes to plan. Each is equipped with cameras to document experiments performed by humans, and they can network to actually move equipment around. The robots can also dock at a companion station to charge, and each has a little perching arm that lets it grab on to stuff to anchor itself or hold things.

Bumble blinks!

The 1-foot cubed bots were developed at NASA’s Ames research facility, and once fully operational, should free up astronauts to focus on things that only humans can handle – and there’s plenty of that work to go around on the ISS in terms of experimentation and research.

It was a historic day for Slack (NYSE: WORK). The workplace communication software juggernaut debuted on the New York Stock Exchange up 48% at $38.50 per share after reports emerged Wednesday night that the business had agreed to a reference price of $26 per share.

Slack, founded in 2009 as Tiny Speck, closed up 48.5% Thursday at $38.62 per share. The stock had climbed as high as $42 in intraday trading. Slack’s market cap now sits well above $20 billion, or nearly 3 times its most recent private valuation of $7 billion.

Slack on Thursday became the second large venture capital-backed business to complete a direct listing, an alternative path to the public markets that allows businesses to go public without selling new shares of its stock. Instead, companies are able to bypass the exorbitant fees associated with initial public offerings, like completing a roadshow and hiring investment bankers, and begin trading by selling existing shares held by investors, insiders and employees.

Slack co-founder and chief executive officer Stewart Butterfield is now a billionaire, having held on to an 8.6% stake worth $1.6 billion at the opening price. Accel, its largest shareholder, boast a stake worth a whopping $4.6 billion. Other key shareholders include Social Capital, which owns a stake worth $2 billion, Andreessen Horowitz ($2.6 billion), SoftBank ($1.4 billion) and Slack co-founder Cal Henderson ($646 million).

Slack’s successful opening isn’t surprising. Of the tech businesses to go public in 2019, the enterprise SaaS IPOs (Zoom, PagerDuty, etc.) have performed best. According to SharesPost, enterprise SaaS IPOs are trading, on average, at more than 100% above their IPO price.

Direct listings are a rather risky path to the public markets because of its unproven nature. In Slack’s case, it’s benefited from both its globally renowned brand and Wall Street’s insatiable desire to invest in SaaS.

Spotify, another notable business that opted for a direct listing, has performed relatively well since exiting in 2018. Initially, the music streaming business opened trading up 25% from its reference price of $132 before closing down 10% after its first day of trading.

Slack has previously raised a total of $1.2 billion in funding from investors, including Accel, Andreessen Horowitz, Social Capital, SoftBank, Google Ventures and Kleiner Perkins. In late 2018, the company closed on more than $400 million in new funding at a valuation of $7.1 billion.

Now that it’s public, all eyes will be on its financials. Weeks ahead of its direct listing, Slack posted an amended S-1 with an updated look at its path to profitability.

Slack posted revenues for the fiscal first quarter ending April 30 of $134.8 million on losses of $31.8 million. Slack’s most recent revenues represent a 67% increase from the same period last year when the company lost $24.8 million on $80.9 million in revenue.

For the fiscal year ending January 31, 2019, the company reported losses of $138.9 million on revenue of $400.6 million. That’s compared to a loss of $140.1 million on revenue of $220.5 million the year prior.

According to CB Insights, the number of seed-stage funding deals in the U.S. declined for the fourth straight year in 2018, continuing a trend that has seen the number of deals steadily drop, while the average size of deals increased. It’s safe to say this is the new normal. Yet, there continues to be a huge surplus of available capital and there are more funds out there than ever before.

For new entrepreneurs, as well as repeat founders of early-stage startups, these changing conditions are having a dramatic impact on how, where and from whom they raise early capital. In years past, raising a seed round often boiled down to finding a local VC or angels that would invest a few hundred thousand dollars on just an idea for a company. It was more about who you knew and where you were located, rather than actual traction or feedback from the target market.

But as competition for the best deals has ramped up, legacy investors in Silicon Valley are now beginning to seek investments in startups all over the world, due in large part to the proliferation of elite tech talent. While that may seem like a potential goldmine to entrepreneurs operating outside Silicon Valley, founders need to understand how investors think about investing in startups, particularly outside their home markets.

Here are three things entrepreneurs must remember when investors come calling from abroad.

Distributed teams are no longer a liability, but proximity to market is still a must

The prevailing school of thought historically was that in order for startups to have a legitimate shot at making it, they all have to be located in Silicon Valley or in another top U.S. tech hub. After all, the U.S. is where all the investors and best talent are located. However, that isn’t necessarily the case anymore. Yes, it is still crucial to have a foothold in the U.S., mostly on the business side of the company, as this is where so many potential customers are — but having a distributed team is no longer viewed as a red flag to many investors.

Other markets, like Israel, have proven track records of churning out elite tech talent. We have seen a number of successful startups that set up the company headquarters and at least one founder (usually the CEO) in the U.S. to be near customers and investors, while the rest of the engineering team remains in Israel.

Prudent investors will still require the CEOs of their companies to be in the U.S. market, but that doesn’t mean the R&D team can’t stay in the home market. This means that the other founder/CTO staying back with the R&D team must have the leadership skills necessary to keep everything on track, while the CEO establishes the business headquarters in the U.S.

Investors are hunting for value, often relying on local co-investors

Much has been made over the past few years about the soaring valuations of Silicon Valley startups. Every day it seems like a new company announces a $50 million-plus round of fresh funding, along with a new sky-high valuation. The frenzy created around all that activity has a profound impact not just on those companies themselves, but on all the smaller startups in the broader ecosystem, as well. The overwhelming competition for capital in Silicon Valley is forcing many seed investors to mitigate the inflated valuations in their portfolios by looking for more undervalued and underappreciated opportunities in other markets.

Valuations for startups outside of the U.S. are typically lower, and represent prime opportunities for investors that are being squeezed from the biggest VC funds that are writing checks earlier in the pipeline and driving up those massive valuations. Typically, late-stage investors would be the ones taking a “gamble” on outside opportunities like those in Israel or Europe, but competition is forcing seed investors to look for early-stage opportunities outside of their immediate geography.

As a result, seed funds are now becoming more open to co-investing with foreign funds. As mentioned above, investors are sourcing deals outside their home markets, but funds are still not comprising much of their portfolio beyond the U.S. These select deals are happening on the edges. In order to find the best deals in a foreign market, U.S. funds often seek local VCs to collaborate with, someone they have maybe done a deal with before that knows the local startup scene inside and out. They are still looking for a process of familiarity, even if it is overseas.

Not all investors add value

As a founder, who you take money from matters a lot. Is it a benefit or to your detriment to take money from investors who are not local to you? How involved will they be?

Startup founders need to think long and hard about the non-monetary value that investors provide. If they are removed from the day to day operations of the company and unaware of challenges the company faces, then what is the point in having them there?

Lately, there has been a rush of large funds to invest at the seed level, offering piles of cash but without any guarantee of long-term value and support. With this new “spray and pray” approach, billion-dollar funds just don’t have the bandwidth and attention to support their small investments the same way they do the larger, more capital-heavy investments.

The best investors are not necessarily the biggest. Instead, the best are the ones constantly adding value to actually help the business grow, whose core focus is to invest at the pre-seed and seed stages of a company. Are they making introductions to potential customers and partners, opening doors to new markets, etc.? Who are the investors that are going to actually help you work through problems? Who will be a partner to you?

Seed investing, like all venture capital, is changing in a meaningful way. What used to be a local, almost neighborhood-oriented process, is now a global business — at least in terms of deal sourcing. Yet, most investors still require physical proximity to the founder/CEO and the company HQ to ensure they can truly help the company execute on its vision.

In a world where the enterprise market hovers around $500 billion in annual sales, is it any wonder that hundreds of enterprise startups launch into that fiercely competitive arena every year? It’s a thrilling, rollercoaster ride that’s seen it all: serious success, wild wealth and rapid failure.

That’s why we’re excited to host our inaugural TC Sessions Enterprise 2019 event on September 5 at the Yerba Buena Center for the Arts in San Francisco. Like TechCrunch’s other TC Sessions, this day-long intensive goes deep on one specific topic. Early-bird tickets are on sale now for $395 — and we have special pricing for MBA students and groups, too. Buy your tickets now and save.

Bonus ROI: for every ticket you buy to TC Sessions: Enterprise, we’ll register you for a free Expo Only pass to TechCrunch Disrupt SF on October 2-4. Sweet!

Expect a full day of programming featuring the people making it happen in enterprise today. We’re talking founders and leaders from established and emerging companies, plus proven enterprise-focused VCs. Discussions led by TechCrunch’s editors, including Connie Loizos, Frederic Lardinois, and Ron Miller, will explore machine learning and AI, intelligent marketing automation and the inevitability of the cloud. We’ll even touch on topics like quantum and blockchain.

Tired of the hype and curious about what it really takes to build a successful enterprise company? We’ve got you. You’ll hear from proven serial entrepreneurs who’ve been there, done that and what they might like to build next.

We’re building the agenda of speakers, panelists and demos, and we have a limited number of speaking opportunities available. If you have someone in mind, submit your recommendation here.

This event is perfect for enterprise-minded founders, investors, MBA students, engineers, CTOs and CIOs. If you need four or more tickets, take advantage of our group rate and save 15 percent over the early-bird price when you buy in bulk. Are you an MBA student? Save your dough — buy a student ticket for $245.

TC Sessions: Enterprise 2019 takes place on Sept. 5 in San Francisco. Join us for actionable insights and world-class networking. Buy your early-bird tickets today.

Is your company interested in sponsoring or exhibiting at TC Sessions: Enterprise 2019? Contact our sponsorship sales team by filling out this form.

The online behavioural advertising industry is illegally profiling Internet users.

That’s the damning assessment of the UK’s data protection regulator in an update report published today, in which it sets out major concerns about the programmatic advertising process known as real-time bidding (RTB) which makes up a large chunk of online advertising.

In what sounds like a knock-out blow for highly invasive data-driven ads, the Information Commissioner’s Office (ICO) concludes that systematic profiling of web users via invasive tracking technologies such as cookies is in breach of UK and pan-EU privacy laws.

“The adtech industry appears immature in its understanding of data protection requirements,” it writes. “Whilst the automated delivery of ad impressions is here to stay, we have general, systemic concerns around the level of compliance of RTB.”

As we’ve previously reported, multiple complaints have been filed with European regulators arguing that RTB is in breach of the pan-EU General Data Protection Regulation (GDPR), including the ICO.

The UK watchdog has not yet issued a formal legal decision against RTB. But with this report it’s giving the industry a clear signal that practices must change.

Its full list of conclusions is well worth reading — so we’ve pasted it below, along with our own ‘plainer English’ paraphrasing of what’s actually being said (formatted in italics):

1. Processing of non-special category data is taking place unlawfully at the point of collection due to the perception that legitimate interests can be used for placing and/or reading a cookie or other technology (rather than obtaining the consent PECR [Privacy and Electronic Communications Regulations] requires).

The ICO has found that consents for dropping trackers like cookies are not being legally obtained. The law requires obtaining consent before dropping and/or reading from a tracker. This means Internet users must be asked for consent before tracking starts happening, and also — at the point they are asked — provided with ”clear and comprehensive information” about what’s intended in order that they can make a free and informed choice about whether they want to consent or not. Whereas what’s happening now is web users are being tracked without being asked if that’s okay and also without the extent and implications of all this mass surveillance being made plain to them

2. Any processing of special category data is taking place unlawfully as explicit consent is not being collected (and no other condition applies). In general, processing such data requires more protection as it brings an increased potential for harm to individuals.

Sensitive personal data (such as political views, health information, sexual orientation) is being processed by the behavioural advertising industry — but not legally because, under UK and EU law, handling this sort of information requires a higher standard of explicit consent, given there are much greater risks of harms were it to be misused or go astray. The problem is the adtech industry is not asking Internet users for explicit consent to make and share these sensitive inferences — likely because if a pop-up asked you to agree to, for example, your political or sexual preferences being broadcast to hundreds of advertisers you’d be sure to click ‘hell no’. Trying to get around the law by just not asking also isn’t legal

3. Even if an argument could be made for reliance on legitimate interests, participants within the ecosystem are unable to demonstrate that they have properly carried out the legitimate interests tests and implemented appropriate safeguards.

Here the ICO is doubly crushing the industry’s bogus reliance on claiming what’s known as ‘legitimate interest’ as the legal basis for violating Internet users’ personal space and intimacy by spying on them. Even if it were possible to use this basis for this data purpose, the watchdog points out they haven’t even fulfilled the standard for LI — which requires carrying out various assessments and taking steps to secure people’s data. What’s actually happening is RTB does the equivalent of blasting everything it knows about you through a giant global megaphone. So, er, not at all safe then

4. There appears to be a lack of understanding of, and potentially compliance with, the DPIA requirements of data protection law more broadly (and specifically as regards the ICO’s Article 35(4) list). We therefore have little confidence that the risks associated with RTB have been fully assessed and mitigated.

The ICO says it believes the adtech industry has also failed to do due diligence on RTB — because it’s found companies haven’t even bothered to carry out data protection impact assessments (DPIAs). That in turn suggests they haven’t even tried to get a handle on privacy risks, and therefore are demonstrably not making any effort to try to reduce those risks. Epic fail

5. Privacy information provided to individuals lacks clarity whilst also being overly complex. The TCF and Authorized Buyers frameworks are insufficient to ensure transparency and fair processing of the personal data in question and therefore also insufficient to provide for free and informed consent, with attendant implications for PECR compliance.

What’s being said here is that privacy polices and consent pop ups are horribly confusing — which means Internet users have little hope of understanding what on earth they’re being asked to agree to. Yet for consent to be legal people need to understand that. The ICO also specifically calls out industry mechanisms created by the Internet Advertising Bureau and Google for publishers and advertisers to gather consents as falling short of the legal standard. So, again, another major, major fail

6. The profiles created about individuals are extremely detailed and are repeatedly shared among hundreds of organisations for any one bid request, all without the individuals’ knowledge.

If you thought Internet ads were creepy here’s the proof: The ICO is saying the behavioural advertising industry’s mass surveillance of web users results in all of us being profiled in crazy detail — and those spy files then being routinely handed off to (at least) hundreds of companies who are involved in the adtech chain every time there’s a programmatic ad transaction. These Stasi-esque dossiers are also being handed over, no strings attached, billions of times per day — so goodness knows where they end up. Still browsing comfortably?

7. Thousands of organisations are processing billions of bid requests in the UK each week with (at best) inconsistent application of adequate technical and organisational measures to secure the data in transit and at rest, and with little or no consideration as to the requirements of data protection law about international transfers of personal data.

Here the watchdog makes it clear that it agrees with the substance of the RTB complaints — i.e. that people’s information is not being lawfully handled because it’s not being properly protected. It also essentially makes the point that these illegal spy files could end up in Timbuktu and you’d be none the wiser

8. There are similar inconsistencies about the application of data minimisation and retention controls.

If all that wasn’t enough, the ICO is saying the adtech industry is failing on other core legal requirements to collect as little data as possible and to place strict limits on how long it keeps data for. Insert your own *unsurprised face*

9. Individuals have no guarantees about the security of their personal data within the ecosystem.

If it wasn’t already really obvious, the watchdog rams the point home: Basically behavioural advertising is out of control

“The processing operations involved in RTB are of a nature likely to result in a high risk to the rights and freedoms of individuals,” it further warns.

The complexity and opacity involved in data-driven advertising also means Internet users are hopelessly outgunned as their rights are systematically steamrollered. (Or as the ICO puts it: “The complex nature of the ecosystem means that in our view participants are engaging with it without fully understanding the privacy and ethical issues involved.”)

While you might think such a long laundry list of staggeringly massive rights violations should be more than enough for any watchdog to bring down the hammer and order the illegal practices to cease, the ICO is taking a different tack.

It’s creeping ahead cautiously — saying it wants to gather more data from the industry, perhaps issue another report next year, while also signalling to adtech companies that practices must change.

This is frustratingly contradictory — because the ICO also writes that it doesn’t believe the industry will change without a regulatory smack down.

“Our work has highlighted the lack of maturity of some market participants, and the ongoing commercial incentives to associate personal data with bid requests. We do not think these issues will be addressed without intervention. We are therefore planning a measured and iterative approach, so that we act decisively and transparently, but also in ways in which we can observe the markets reaction and adapt our approach accordingly,” it says in the report.

“We intend to provide market participants with an appropriate period of time to adjust their practices. After this period, we expect data controllers and market participants to have addressed our concerns.”

The contrast between the view that it’s now putting out there — that massive violations of laws and rights are occurring — and yet more regulatory inaction means it is coming in for some major flak from data protection and privacy experts, who make the salient point that rules don’t exist unless they’re enforced. Nor indeed do rights unless they’re defended and upheld…

Reached for comment on the ICO’s report, Dr Johnny Ryan, chief policy and industry relations officer of private browser Brave — and also one of the individuals behind the original RTB complaints — told us: “The ICO’s report recognises the data protection issues that we raised back in September last year. This is a useful confirmation of what was already clear. However, there is an urgent need for action now to prevent the identified illegality that undermines the privacy and data protection of every person using the Internet, the regulator must now take action.”

We’ve reached out to the IAB and Google for comment but at the time of writing neither had sent a response to the report.

The ICO’s earlier Technology Strategy planning document highlighted the risks posed by data-driven advertising. It followed that by making interrogating adtech practices a regulatory priority — hence today’s update.

Attention has also been concentrated on the sector since GDPR came into force by privacy and rights campaigners filing complaints about the legality of behavioural advertising.

In May the Irish DPC announced it had opened a formal investigation into Google’s adtech, after an initial assessment of a RTB complaint filed in Ireland.

It’s likely the ICO is taking a wait and see approach now to await the outcome of the DPC’s formal probe.

In its report the UK regulator does say it will “continue to liaise and share information with our European colleagues” — and also commits to “identify opportunities to work together where appropriate”. So there may be some co-ordination going on between the two DPAs.

There is also a hint of a solution in the report, when the ICO says it will “further consult with IAB Europe and Google about the detailed schema they are utilising in their respective frameworks to identify whether specific data fields are excessive and intrusive, and possibly agree (or mandate) revised schema”.

This sounds like it’s coming round to the view that online advertising doesn’t need masses of personal data to function — but can in fact be targeted contextually, delivering ad clicks while simultaneously protecting individuals’ privacy and fundamental rights.

A view that some online publishers also share. Relevant: Revenues generated by the current structure of the adtech market disproportionately flows to the tech giant duopoly of Facebook and Google, whereas publisher revenues have not enjoyed massive growth.

“We understand that advertisements fund much of what we enjoy online. We understand the need for a system that allows revenue for publishers and audiences for advertisers. We understand a need for the process to happen in a heartbeat. Our aim is to prompt changes that reflect this reality, but also to ensure respect for internet users’ legal rights,” writes information commissioner Elizabeth Denham .

“The rules that protect people’s personal data must be followed. Companies do not need to choose between innovation and privacy.”

(For context on the -4% figure cited in the above tweet see here.)

While mirrorless cameras accelerate into the future, medium format models are hearkening unto the past — and Hasselblad chief among them. Its new digital back fits lenses going back to the ’50s, and the tiny 907X camera body is about as lovely a throwback as one can imagine.

The new set of systems, announced today, are somewhat different from what most people are used to. Most interchangeable-lens systems, like Canon and Nikon’s DSLRs and Olympus and Fujifilm’s mirrorless cameras, generally have two parts: a lens and a body, in the latter of which is found the image sensor.

Hasselblad does make cameras like that, and in fact introduced a dandy-looking new one today, the X1D II 50C (just try to keep track of these names). But the more interesting item by far to me is the CFV II digital back and 907X camera body.

Unlike a traditional DSLR, digital backs are essentially just giant sensors; they fit where the medium format film would have gone and collect light in its place. But they also need a camera unit to do the heavy lifting of parsing all those pixels — about 50 million of them in this case.

What’s nice about this is that you can attach a modern back and camera unit to a lens decades old — you could also attach a modern one, but why? Part of the fun of medium format is using equipment from the distant past, and shooting in some ways the same way someone might have shot a century ago.

The system Hasselblad introduced today is one of the most compact you’ll find, packing all the processing power needed into an enclosure that’s hardly bigger than the lens itself. On the back of it is a high-resolution touchscreen that flips out to 45 and 90 degree angles, letting you shoot top-down or from an angle, like the old days.

It may seem a mere nostalgia bid, but it’s an interesting way to shoot and is more focused on careful composition than spontaneous captures. And brother, is it handsome, as you can see above. (The top picture shows the camera rotated so you can see the screen — normally it would face away from the lens.)

Pricing and availability are to be announced, but this won’t be cheap — think in the $4,000-$6,000 range for the two pieces.

I probably will never own one, but I’m satisfied to know that there is a shooting experience out there that emulates the old medium format style so closely, and not just superficially. It’s a lovely piece of hardware and if Hasselblad’s record is any indication, it’ll take lovely photos.

“Hamilton” creator Lin-Manuel Miranda will be making his debut as a feature film director on Netflix .

Variety reports that Netflix won the rights to Miranda’s film adaptation of “Tick Tick … Boom!” following “a heated bidding war,” with Andrew Garfield (who played Eduardo Saverin in “The Social Network” and recently won a Tony for his role in the onstage revival of “Angels in America”) in talks to star.

The musical was written by Jonathan Larson, who went on to write “Rent.” It’s an autobiographical story about a composer who’s filled with anxiety and doubt as he approaches the age of 30. Larson first performed “Tick Tick … Boom!” as a solo show in 1990, and after larson’s death, playwright David Auburn adapted it into a three-actor musical that debuted Off Broadway in 2001.

“Dear Evan Hansen” writer Steven Levenson is writing the movie’s script.

While Miranda is best known for his work on the Broadway stage, he’s also made the move into film, writing songs for Disney’s “Moana” and appearing in last year’s “Mary Poppins Returns.”

He’ll also have a small role in next year’s movie adaptation of his first Broadway musical, “In The Heights,” which will be directed by Jon Chu. (Chu and the rest of the creative team behind “Crazy Rich Asians” famously turned down an offer from Netflix because they wanted a theatrical release.)

Welcome to this transcribed edition of The Operators. TechCrunch is beginning to publish podcasts from industry experts, with transcriptions available for Extra Crunch members so you can read the conversation wherever you are.

The Operators highlights the experts building the products and companies that drive the tech industry. Speaking from experience at companies like Google, Brex, Slack, Docsend, Facebook, Edmodo, WeWork, Mint, etc., these experts share insider tips on how to break into fields like product management and enterprise sales. They also share best practices for entrepreneurs to hire and manage experts in fields outside their own.

This week’s edition features Whitney Sales, a general partner at Acceleprise, the leading enterprise SaaS accelerator, and Russ Heddleston, founder and CEO of DocSend, a fast-rising document management and sharing product.

Whitney brings sales experience from LoopNet, Meltwater, SpringAhead/Tallie, and People Data Labs, before starting her own sales consultancy aptly named “The Sales Method.” Russ brings experience from founding and selling his first company to Facebook, before becoming the first salesperson of the second company he founded, DocSend.

Neil Devani and Tim Hsia created The Operators after seeing and hearing too many heady, philosophical podcasts about the future of the world and the tech industry, and not enough attention on the practical day-to-day work that makes it all happen.

Tim is a Venture Partner at Digital Garage and the CEO & Founder of Media Mobilize, a media company and ad network. Neil is an early-stage investor based in San Francisco with a focus on companies that solve serious problems, including Andela, Clearbit, Recursion Pharmaceuticals, Vicarious Surgical, and Kudi.

If you’ve ever had to convince anyone of anything, or are interested in a career in sales or starting a company where you will have to hire or manage salespeople, you can’t miss this episode.

The show:

The Operators, hosted by Neil Devani and Tim Hsia, highlights the experts building the products and companies that drive the tech industry. Speaking from experience at companies like Google, Brex, Slack, Docsend, Facebook, Edmodo, WeWork, Mint, etc., these experts share insider tips on how to break into fields like product management and enterprise sales. They also share best practices for entrepreneurs to hire and manage experts in fields outside their own.

In this episode:

In Episode 1, we’re talking about sales. Neil interviews Whitney Sales, an investor with Acceleprise, the leading enterprise SaaS accelerator, and Russ Heddleston, founder and CEO of Docsend.

Neil Devani: Hi and welcome to the first episode of The Operators when we talk to the people building the companies of today and tomorrow. We publish every other Monday and you can find us online at operators.co.

Today’s episode is sponsored by Four Sigmatic. Four Sigmatic’s Lion’s Mane Mushroom Coffee has all of coffee’s focusing bark with none of the jittery bite. Lion’s Mane provides productivity, focus, and creativity all while being a healthy alternative to that daily cup of coffee. Go to www.foursigmatic.com/operators-special to try out Four Sigmatic.

I’m your host Neil Devani, and we’re coming to you today from Digital Garage here in sunny San Francisco. Joining me is Russ Heddleston, founder and CEO of DocSend, a popular product for managing and sharing sensitive documents.

Also joining us is Whitney Sales, partner at Acceleprise, the premier SaaS accelerator. Whitney has 10 years of startup sales experience and is the founder of the sales method, a consultancy that helps startups with go-to-market and sales. Whitney and Russ, thank you for joining us. It’s a pleasure to have you. If we could start if just give us a little bit of your background that would be great.

Russ Heddleston: I’ll start. I’m Russ Heddleston, as you said, co-founder and CEO of DocSend. My background is not in sales it’s in software engineering. I was at Stanford for my Bachelor’s and Masters in computer science. And then I worked at a bunch of different tech companies over the years as an intern at Microsoft, as a PM intern, I was the first engineering intern at Trulia, I ran the engineering team in a company called Greystripe for a few years, an early intern at Dropbox. 

And then DocSend is actually my second company. I started the first one in 2010 while I was in business school at Harvard, and then ended up being acquired by Facebook. And I started DocSend about six years ago here in San Francisco.

Whitney Sales: Hi, my name is Whitney Sales. I’m a GP, general partner at Acceleprise Ventures. My background is an early stage sales. Before Acceleprise I actually started a sales consultancy called The Sales Method where I worked with founders in getting to $1M in ARR, really in the early stages of the problem solving of sales. 

Before that I worked for several startups. LoopNet in the early days, helped launch two products for them. I worked at a company called Meltwater before they were acquired. 

And I worked for a company called SpringAhead. They are now Tallie, they were also acquired. Ran sales for a company called People Data Labs. And then I just spun out on my own and started the Sales Method which ended up bringing me to Acceleprise. 

Devani: Awesome, really great story. Just to start, I would love to hear from both of you a little bit about your organizations and how you think about sales. And maybe you can give us a little bit of the definitions around different roles that you see in a sales organization, whether it’s your company or other companies you’re investing in or have worked with in the past. 

Sales: There’s a lot of different roles in sales. It really depends on the type of organization you’re running, candidly. But traditionally there’s an SDR, sales development rep. I usually recommend that being the first hire in a sales team for a founder, so they can scale up their own time.

Then there’s an account executive within an organization that’s typically doing a direct sale. There may be senior account executives or junior account executives, like a mid-market enterprise executive depending on the type of sales cycle they’re running.

Sales engineers, if you’re dealing with a complex dev tool, traditionally, or a more heavy enterprise implementation tool. 

Prosthetic limbs are getting better, but not as quickly as you’d think. They’re not as smart as our real limbs, which (directed by the brain) do things like automatically stretch out to catch ourselves when we fall. This particular “stumble reflex” was the subject of an interesting study at Vanderbilt that required its subjects to fall down… a lot.

The problem the team is aiming to help alleviate is simply that users of prosthetic limbs fall, as you might guess, more than most, and when they do fall, it can be very difficult to recover, since an artificial leg — especially for above-the-knee amputations — doesn’t react the same way a natural leg would.

The idea, explained lead researcher and mechanical engineering Professor Michael Goldfarb, is to determine what exactly goes into a stumble response and how to recreate that artificially.

“An individual who stumbles will perform different actions depending on various factors, not all of which are well known. The response changes, because the strategy that is most likely to prevent a fall is highly dependent on the ‘initial conditions’ at the time of stumble,” he told TechCrunch in an email. “We are hoping to construct a model of which factors determine the nature of the stumble response, so when a stumble occurs, we can use the various sensors on a robotic prosthetic leg to artificially reconstruct the reflex in order to provide a response that is effective and consistent with the biological reflex loop.”

The experimental setup looked like this. Subjects were put on a treadmill and told to walk forward normally; a special pair of goggles prevented them from looking down, arrows on a display kept them going straight, and a simple mental task (count backwards by sevens) kept their brain occupied.

Meanwhile an “obstacle delivery apparatus” bode its time, waiting for the best opportunity to slip a literal stumbling block onto the treadmill for the person to trip over.

When this happened, the person inevitably stumbled, though a harness prevented them from actually falling and hurting themselves. But as they stumbled, their movements were captured minutely by a motion capture rig.

After 196 stumbling blocks and 190 stumbles, the researchers had collected a great deal of data on how exactly people move to recover from a stumble. Where do their knees go relative to their ankles? How do they angle their feet? How much force is taken up by the other foot?

Exactly how this data would be integrated with a prosthesis is highly dependent on the nature of the artificial limb and the conditions of the person using it. But having this data, and perhaps feeding it to a machine learning model, will help expose patterns that can be used to inform emergency prosthetic movements.

It could also be used for robotics: “The model could be used directly to program reflexes in a biped,” said Goldfarb. Those human-like motions we see robots undertaking could be even more human when directly based on the original. There’s no rush there — they might be a little too human already.

The research describing the system and the dataset, which they’re releasing for free to anyone who’d like to use it, appeared in the Journal of NeuroEngineering and Rehabilitation.