Year: 2019

Childcare is one of the biggest expenses for American parents and it’s not just families who are taking a hit. Childcare issues cost the United States’ economy an estimated $4.4 billion in lost productivity each year and also impacts employee retention rates. Kinside wants to help with a platform that not only enables families to get the most out of their family care benefits, but also find the right providers for their kids. The startup announced the public launch of its platform today, along with $3 million in a new funding round led by Initialized Capital.

This brings Kinside’s total raised since it was founded 18 months ago to $4 million. Its other investors include Precursor Ventures, Kairos, Jane VC and Escondido Ventures.

Founded by Shadiah Sigala, Brittney Barrett and Abe Han, Kinside began its private beta with 10 clients while participating in Y Combinator last summer. Over the past year, it has signed up over a thousand employers, underscoring the demand for childcare benefits.

“Getting meetings with employers has not been the hard part,” Sigala, Kinside’s CEO, tells TechCrunch. “Any subject line that says ‘do you want childcare for your employees?’ immediately gets a response. We a hit a nerve there and when we talked with them, we found that the biggest pain they expressed was that their employees were having a hard time finding childcare.”

Kinside co-founders SShadiah Sigala, Brittney Barrett and Abe Han

The U.S. is the only industrialized country without a national law that guarantees paid parental leave. Companies like Microsoft, Netflix and Deloitte offer strong family benefits in order to recruit and retain talent, but offering similar packages remains a challenge, especially for small- to medium-sized businesses. As a result, many employees, especially women, leave their jobs to care for their children, even if they had planned to continue working.

“The worst case for bigger, more mature companies is a delayed return to work, which has a real impact on the bottom line because of lost productivity, but the deeper pain is when we lose the women,” Sigala says. “It’s documented that 43% of women in the professional sector will leave the workforce within one to two years of having a baby.”

Other startups focused on early childhood care that have recently raised funding include Winnie, for finding providers, Wonderschool, which helps people start in-home daycares and preschools and London-based childcare platform Koru Kids.

Before Kinside, Sigala co-founded Honeybook, a business management platform for small businesses and freelancers. When she got pregnant, Sigala began developing the company’s family benefit policies and became familiar with the hurdles small companies face.

While in Y Combinator, Kinside focused on streamlining the process of using dependent care flexible spending accounts (FSA), or pre-tax benefits for caregiving costs, after its founders saw that the complicated claims process meant only a fraction of eligible parents get full use of the program. Kinside still helps parents with their accounts by partnering with FSA administrators. Now their app also includes a network of pre-screened early childcare providers ranging from home-based daycares to large preschools across the country.

The startup pre-negotiates reserved spots and discounted rates for its users and gives them access to a “concierge” made up of childcare professionals to answer questions. Parents can search for providers based on location, cost and childcare philosophy. Sigala says the startup’s team found that many childcare providers have a 20% to 30% vacancy rate, which Kinside addresses by helping them manage openings and find families who are willing to commit to a spot. In addition to its app, Kinside also plans to integrate into human resources systems.

Initialized was co-founded by Alexis Ohanian, also a founder of Reddit, and a vocal advocate of paid parental leave. One of the areas the firm focuses on is “family tech” and its portfolio also includes startups like the Mom Project, a job search platform for mothers returning to work.

In an email, Initialized partner Alda Leu Dennis said the firm invested in Kinside because “we have this fundamental problem of gender inequality which can be partially attributed to imbalances in the workplace and at home. We have a gender wage gap and domestic responsibilities, still, largely falling on the mother. By solving a problem that men and women have—access to affordable and high-quality childcare—we can improve this situation.”

Dennis added, “the business model innovation that Kinside brings to the table is to involve employers in the process of bringing peace of mind and stability to their employees’ home lives and in turn making their employees more productive.”

Sigala says Kinside sees itself as part of the benefits equity movement, including paid parental leave and, eventually universal childcare, for all working parents. The platform’s users are split equally between men and women, highlighting that the need for caregiving benefits cross gender lines and impact an entire household.

“It’s a complex issue. Our infrastructure and society is still designed for single breadwinner households and yet the economy means that for most households, being able to pay the bills depends on having two parents working,” she adds. “I see this as a movement. It’s the right time.”

One of the largest civil liberties groups in the U.S. is suing two Homeland Security agencies for failing to turn over documents it requested as part of a public records request about a controversial cell phone surveillance technology.

The American Civil Liberties Union filed suit against Customs & Border Protection (CBP) and Immigration & Customs Enforcement (ICE) in federal court on Wednesday after the organization claimed the agencies “failed to produce records” relating to cell site simulators — or “stingrays.”

Stingrays impersonate cell towers to trick cell phones into connecting to them, allowing its operator to collect unique identifiers from the device and determine their location. The devices are used for surveillance, but also ensnare all other devices in their range. It’s believed newer, more advanced devices can intercept all the phone calls and text messages in range.

A government oversight report in 2016 said both CBP and ICE collectively spent $13 million on buying dozens of stingrays, which the agencies used to “locate people for arrest and prosecution,” the ACLU said.

But little else is known about stingray technology because the cell phone snooping technology is sold exclusively to police departments and federal agencies under strict non-disclosure agreements with the device manufacturer.

The ACLU filed a Freedom of Information Act request in 2017 to learn more about the technology and how it’s used, but both agencies failed to turn over any documents, it said.

The civil liberties organization said there is evidence to suggest that records exist, but has “exhausted all administrative remedies” to obtain the documents. Now it wants the courts to compel the agencies to turn over the records, “not only to shine a light on the government’s use of powerful surveillance technology in the immigration context, but also to assess whether its use of this technology complies with constitutional and legal requirements and is subject to appropriate oversight and control,” the filing said.

The group wants the agencies’ training materials and guidance documents, and records to show where and when stingrays were deployed across the United States.

CBP spokesperson Nathan Peeters said the agency does not comment on pending litigation as a matter of policy. A spokesperson for ICE did not comment.

BMW today announced that it is finally bringing Android Auto to its vehicles, starting in July 2020. With that, it will join Apple’s CarPlay in the company’s vehicles.

The first live demo of Android Auto in a BMW will happen at CES 2020 next month and after that, it will become available as an update to drivers in 20 countries with cars that feature the BMW OS 7.0. BMW will support Android Auto over a wireless connection, though, which somewhat limits its comparability.

Only two years ago, the company said that it wasn’t interested in supporting Android Auto. At the time, Dieter May, who was then the senior VP for Digital Services and Business Model, explicitly told me that the company wanted to focus on its first-party apps in order to retain full control over the in-car interface and that he wasn’t interested in seeing Android Auto in BMWs. May has since left the company, though it’s also worth noting that Android Auto itself has become significantly more polished over the course of the last two years.

“The Google Assistant on Android Auto makes it easy to get directions, keep in touch and stay productive. Many of our customers have pointed out the importance to them of having Android Auto inside a BMW for using a number of familiar Android smartphone features safely without being distracted from the road, in addition to BMW’s own functions and services,” said Peter Henrich, Senior Vice President Product Management BMW, in today’s announcement.

With this, BMW will also finally offer support for the Google Assistant after early bets on Alexa, Cortana and the BMW Assistant (which itself is built on top of Microsoft’s AI stack). The company has long said it wants to offer support for all popular digital assistants. For the Google Assistant, the only way to make that work, at least for the time being, Android Auto.

In BMWs, Android Auto will see integrations into the car’s digital cockpit, in addition to BMW’s Info Display and the heads-up display (for directions). That’s a pretty deep integration, which goes beyond what most car manufacturers feature today.

“We are excited to work with BMW to bring wireless Android Auto to their customers worldwide next year,” said Patrick Brady, vice president of engineering at Google. “The seamless connection from Android smartphones to BMW vehicles allows customers to hit the road faster while maintaining access to all of their favorite apps and services in a safer experience.”

Pricing in the smartphone wars has taken a sharp turn in recent years on the premium end of the spectrum. Ever since the arrival of the iPhone X, flagship devices have often arrived in excess of $1,000, as company push toward more premium components in order to remain competitive.

Likely surprising no one, most consumers aren’t spending that much on devices. According to numbers from NPD’s latest Mobile Phone Tracking study, however, the numbers are pretty stark. Less than 10% of U.S. consumers are spending that much on devices. That could foretell some bleak numbers for 5G sales, as early units routinely run around $1,200.

Not an encouraging sign as many manufacturers look toward 5G as the next major driver amid flagging global sales. One thing to consider here is that most phones are good at this point. Even mid-tier smartphones are pretty solid. While the devices have become a commodity, few if any users truly need to spend that much on a product. There’s a reason Samsung, Google and even Apple have been focused on lower cost alternatives of late.

There are, however, reasons for manufacturers to be hopeful. For one thing, the arrival of 5G is often cited as one of the primary sources of slowed sales. Many premium users are likely waiting for more network coverage and devices before purchasing their next phone. NPD says that nearly 3/4ths of consumers are at least aware that 5G is a thing.

Also notable is Qualcomm’s recent 765 announcement, which should help make 5G devices accessible for consumers are a lower price point in the coming year. 

Machine learning is a complex process. You build a model, test it in laboratory conditions, then put it out in the world. After that, how do you monitor how well it’s tracking what you designed it do? Arthur wants to help, and today it emerged from stealth with a new platform to help you monitor machine learning models in production.

The company also announced it had closed a $3.3 million seed round, which closed in August.

Arthur CEO and co-founder Adam Wenchel says that Arthur is analogous to a performance monitoring platform like New Relic or DataDog, but instead of monitoring your systems, it’s tracking the performance of your machine learning models.

“We are an AI monitoring and explainability company, which means when you put your models in production, we let you monitor them to know that they’re not going off the rails, that you can explain what they’re doing, that they’re not performing badly and are not being totally biassed — all of the ways models can go wrong,” Wenchel explained.

Data scientists build machine learning models and test them in the lab, but as Wenchel says, when that model leaves the controlled environment of the lab, lots can go wrong, and it’s hard to keep track of that. “Models always perform well in the lab, but then you put them out in the real world and there is often a drop-off in performance — in fact, almost always. So being able to measure and monitor that is a capability people really need,” he said.

Interestingly enough, AWS announced a new model monitoring tool last week as part of SageMaker Studio. IBM also announced a similar tool for models built on the Watson platform earlier this year, but Wenchel says the involvement of the big guys could work to his company’s advantage since his product is platform-agnostic. “Having a neutral third party for your monitoring that works equally well across stacks is going to be pretty valuable,” he said.

As for the funding, it was co-led by Work-Bench and Index Ventures with participation from Hunter Walk at Homebrew, Jerry Yang at AME Ventures and others.

Jonathan Lehr, a general partner at Work-Bench sees a company with a lot of potential. “We regularly speak with ML executives from Fortune 1000 companies and one of their biggest concerns as they become more data-driven is model behavior in production. The Arthur platform is by far the best solution we’ve seen for AI monitoring and transparency…” he said.

The company, which is based in New York City, currently has 10 people. It launched 2018, and has been heads down working on the product since. Today, marks the release of the product publicly.

If you thought the saga of the $7,000 Apple Pro Display XDR couldn’t get any more ridiculous, prepare yourself for the proverbial cherry on top: The company insists that you only use the single special cleaning cloth that comes with the monitor. If you lose it, you’re advised to order another.

Apple, already under fire from longtime users for the ever-increasing price of its products, attracted considerable ire and ridicule when it announced the high-end monitor in June. Of course there are many expensive displays out there — it was more the fact that Apple was selling the display for $5,000, the stand separately for $999, and an optional “nano-texture” coating for an additional grand.

Just wait till you see how much the Mac Pro that goes with it costs.

Technically it’s not actually a “coating” but an extremely small-scale etching of the surface that supposedly produces improved image quality without some of the drawbacks of a full-matte coating. “Typical matte displays have a coating added to their surface that scatters light. However, these coatings lower contrast while producing unwanted haze and sparkle,” the product description reads. Not so with nano-texture.

Unfortunately, the unique nature of the glass necessitates special care when cleaning.

“Use only the dry polishing cloth that comes with your display,” reads the support page How to clean your Apple Pro Display XDR. “Never use any other cloths to clean the nano-texture glass. If you lose the included polishing cloth, you can contact Apple to order a replacement polishing cloth.” (No price is listed, so I’ve asked Apple for more information.)

Obviously if you’re cleaning an expensive screen you don’t want to do it with Windex and wadded-up newspaper. But it’s not clear what differentiates Apple’s cloth from an ordinary microfiber wipe.

Do the nano-scale ridges shred ordinary mortal cloth and get fibers caught in their interstices? Can the nano-texture be damaged by anything of insufficient softness?

Apple seems to be presuming a certain amount of courage on the part of consumers, who must pay a great deal for something that not only provides an uncertain benefit (even Apple admits that the display without the coating is “engineered for extremely low reflectivity”) but seems susceptible to damage from even the lightest mishandling.

No doubt the Pro Display XDR is a beautiful display, and naturally only those who feel it is worth the price will buy one. But no one likes to have to baby their gadgets, and Apple’s devices have also gotten more fragile and less readily repairable. The company’s special cloth may be a small, even silly thing, but it’s part of a large and worrying trend.

Few spaces are hotter right now than enterprise SaaS and tools that streamline communications in the workplace have been some of the more popular investments for savvy VCs.

The workplace email inbox is a nightmare, but there are plenty of wrong ways to kill it. Gmelius is building a workspace platform that lives inside Gmail, allowing teams to get more bespoke tools without adding yet another piece of software to their repertoire.

Gmelius slots into the Gmail workspace, adding a host of features like shared inboxes, a help desk, an account-management solution and automation tools. This integration fits into the existing interface while hiding heavier tools including Trello-like Kanban boards inside Gmail. It can understandably feel like an awful lot of functionality to fit into one app.

Gmelius has been around for a long time as a Chrome plugin, but the company has made significant strides this year to revamp their product as a premium tool for startups looking to supercharge their email and collaborate internally inside Gmail. The company still offers a free tier with limited functionality, but now has several professional tiers scaling up to a $49 per user enterprise plan.

The startup is rebelling against an overwhelming trend of service unbundling which has led startups to pay for more SaaS products than ever. Gmelius is taking on competitors like Front and others that have built out their own distinct platforms.

Gmelius recently graduated from Y Combinator and is in the midst of raising new funding to scale its team to take on more customers. They are competing in TechCrunch Disrupt Berlin’s Startup Battlefield.

Keith McCarty could have retired after Microsoft bought Yammer. Instead, he founded Eaze to address cannabis delivery.

He lead the company through its B round and then stepped back, but last year, he founded Wayv, a new cannabis startup to address an even more significant challenge for the industry: supply chain logistics. So far, it’s raised $5 million and is currently seeking its Series A. Fundraising is hard for any entrepreneur, but McCarty’s experience sets him apart from most cannabis industry founders.

The company is now the first complete payment solution in the cannabis industry, allowing money to travel throughout the ecosystem in the fastest, safest way while remaining compliant with all of California’s regulations.

We spoke at length about this ability and along the way, chatted about the cannabis startup landscape.

McCarty has been in the industry for about five years, founding Eaze in 2014 and later leaving after raising a $13 million B round. At the time, startups generally didn’t seek venture funding and McCarty helped the company become one of the first to do so. Now founder and CEO of a new cannabis startup, he’s at it again.

Over a recent dinner with twenty C-suite executives, one founder-CEO recounted how he was preparing a slide for a company all-hands with headshots of his board of directors when he was struck by the contrast between his gender-balanced employee base and his all-male board.

“It wasn’t something I was proud to share with the team,” he told us, as heads around the table nodded.

The other CEOs in the room got it. A board populated exclusively by men is at odds with efforts to promote diversity and inclusion throughout the organization. For too many CEOs, the composition of their boards can feel more like a liability than a strategic asset.

Board diversity offers an array of benefits, including new perspectives that can improve decision-making and reduce “groupthink,” access to a broader talent pool, and of course the symbolic power of women and minorities at the top rung of the corporate ladder. Yet, according to a collaborative study published today by Crunchbase, Kellogg School of Management and Him For Her, the boards of 60 percent of the most heavily funded venture-backed startups don’t include a single woman. 

As the study shows, some of the gender imbalance can be explained by the dearth of women founders and funders. With investors composing the majority of private-company board seats, the paucity of female check-writers in the venture community carries through to the boardroom. But the problem goes beyond that. Only 19 percent of independent directors — those appointed without a prior operating or investing relationship with the company — are women.

Why should CEOs care about building boards that bring more women and minorities to the table? To answer this question, we sought input from three chief executives who’ve developed standout boards with an eye toward diversity.

• Brad Garlinghouse, CEO of blockchain payments solution Ripple
• Stephane Kasriel, CEO of hiring platform Upwork
• Zander Lurie, CEO of survey software company SurveyMonkey

What follows is a synthesis of the advice they shared.

View your board as a strategic asset

Well-functioning boards help CEOs see the bigger picture by providing an external perspective. For Stephane Kasriel, CEO of Upwork, “our board has been the most useful in discovering blind spots, by asking questions that force us to think outside of our day-to-day way of looking at things.” Ripple CEO Brad Garlinghouse says his board brings “a satellite view of the world so that we can analyze global macro trends that may converge or diverge, affecting Ripple’s future.”

For early-stage startups, board members can help address tactical needs, providing introductions to candidates or lending functional expertise to shape strategy. “Over time, you’ll rely on the board for flexing its fiduciary muscle,” according to Zander Lurie, CEO of SurveyMonkey. But “don’t be afraid of governance,” he advises. “A strong board is not your enemy — it’s there to help you thrive.” The bigger risk, he warns, “is in surrounding yourself with a bunch of ‘yes’ directors who heed your commands; that has proven to be a flawed strategy for all stakeholders.”

Build a board that makes you proud

If the most valuable contributions a board can make are to provoke thinking and see around corners, then having a range of voices in the boardroom is critical. For Kasriel, more diversity “means more viewpoints on the same problems. The whole point of having an eight-person board is to have eight very different and complementary — though sometimes conflicting, and that’s OK — perspectives.” 

“It’s important to have diversity of thought to protect the company from groupthink,” adds Garlinghouse. “Also, diverse boards bring different personal networks to bear… as companies scale, especially for startups, the most effective, impactful boards are diverse ones.”

A broader set of skills, life experiences and ways of thinking give CEOs more resources to draw from for assistance. Says Lurie, “a diverse set of perspectives and experiences will help you anticipate and respond to all kinds of challenges in your organization.

Make sure your board has the skill sets and diversity attributes that make you proud to show your employees and customers. You wouldn’t make a TV commercial starring only seven white guys; make sure you exercise the same duty of care when creating your board.”

This isn’t about optics. Lurie points to “one study [that] found that companies with one or more women on their board have 26 percent better share performance than companies with all-male boards. That’s part of why I’m so proud the SurveyMonkey board is comprised of 50% women and 50% men. More voices lead to better leadership.”

Reach outside your network

You’ve heard the argument that board diversity reflects a pipeline problem. Actually, it’s a marketplace problem. There is no shortage of exceptionally-qualified female and minority candidates. The real issue is that within the personal networks responsible for appointing most directors, these candidates are often simply invisible. So how can CEOs tap into this wealth of talent?

“Plenty of us suffer from affinity bias,” Lurie acknowledges. “We unconsciously gravitate toward people who look like us, share the same work background, or maybe went to our alma mater. This homogenous network isn’t going to serve you in building a diverse board, a diverse leadership team, or a diverse organization. Start going out of your way to connect with people who are dissimilar to you.

Find events to attend that wouldn’t normally be on your radar. Ask people you know to connect you with folks they know who might add a unique perspective. Investing in diversity takes effort in the beginning, but it’s well worth it for the gains you’ll see in performance, employee engagement, and more.”

“It’s not really different from any other executive search,” observes Kasriel. “If you’re just leveraging your personal network, then it’s likely to have the same level of diversity as everything else in your personal life which, for many entrepreneurs, isn’t a lot. I’ve also found that simple InMail via LinkedIn works quite well: find someone you really admire, approach them directly, explain to them why you think they could be an amazing addition to your board and why being on your board could be interesting to them.”

Garlinghouse cautions CEOs that, “building diverse boards and leadership teams take time and intention, so make it part of your mission from the beginning — it should not be an afterthought… otherwise, those with the ‘right’ experience who get the big jobs will continue to look the same.”

Always be recruiting

According to Garlinghouse, “CEOs should always be recruiting…it’s always the right time to take that coffee meeting.” 

Kasriel concurs. “Recruiting is the number-two priority for a CEO — number one is, don’t run out of money — and this includes recruiting your board. A great board can have an outsized impact in your ability to succeed, helping you navigate difficult decisions, making sure you have the right strategy and helping you attract great executives, investors, partners and customers.”

Focus on competencies, not titles

When it comes to defining the ideal new board member, traditional wisdom says to look for a current or former CEO. But increasingly today’s chief executives reject that advice which inherently favors male candidates. Instead they focus on adding key competencies to fill out the expertise in their boardrooms.

The first step is to assess your current board. “Take stock of where your board stands today and where you have gaps to fill,” counsels Lurie, “and draw a distinction between the titles listed on someone’s resume and the competencies they bring to the table.”

Kasiel explains that, in building out the Upwork board, “We were very thoughtful in finding people who brought a specific expertise.” Recently added directors were selected for their deep knowledge of finance and operations, enterprise sales and M&A and tech marketing.

“But equally importantly,” he adds, “we wanted board members who were passionate about the mission of Upwork — to create economic opportunities so people have better lives — and were aligned with our value of maximizing value for all stakeholders, not just our stockholders.”

Garlinghouse suggests that CEOs “pay attention to what’s happening in adjacent verticals, especially if you’re in a space that’s constantly evolving; the perfect director might not — and likely won’t — have a career dedicated to what your company does, but skills always transfer.”

“One potentially controversial tip,” offers Kasriel, “consider hiring ‘more junior’ board members. In tech, things move really fast and someone who has been a CMO for 20+ years may not know as much about recent marketing technology tools or marketing practices such as ABM and Inbound Marketing. The first 15 years of that 20-year experience may not be all that useful.”

Add independent directors early

When should a startup add its first independent director? According to these CEOs, it’s never too early.

The first independent director at Upwork joined the board about six years before the company’s IPO. “I don’t think it was too early,” recalls Kasriel. “In fact, I often advise early stage companies to add an independent board member as early as they can.”

“It’s never too early to have an independent director on the board,” agrees Garlinghouse at Ripple, where the first independent was appointed only a year after the company’s founding. “The advantage of having independent directors,” he points out, “is that CEOs can prioritize diversity of thought because they are not constrained by board seats controlled by shareholders… With independent directors, CEOs have more flexibility in choosing an expertise in a specific area or a unique experience that’s currently lacking to bring companies to the next stage of scale.”

To CEOs worried about upsetting board dynamics, Kasriel responds, “the whole point of adding a new director is to change board dynamics! Obviously, you can make a bad hire on the board, just like you can make a bad hire on your management team, so it’s very important to make sure that the new board member is not only chosen well but also onboarded professionally so they can contribute fully to the functioning of the board. The onboarding may require existing board members to also evolve how they themselves operate. It goes both ways.”