Rohan Malhotra and Arjun Malhotra left their jobs in London and Silicon Valley to explore opportunities in India in late 2013. A year later, the brothers launched Investopad to connect with local startup founders and product managers and built a community to exchange insight. Somewhere in the journey, they wrote early checks to social-commerce startup Meesho, which now counts Facebook as an investor, Autonomic, which got acquired by Ford, and HyperTrack, among others. Now the duo is ready to be full-time VCs.
On Monday, they announced Good Capital, a VC fund that would invest in early-stage startups. Through Good Capital’s maiden fund of $25 million, the brothers plan to invest in about half a dozen startups in a year and provide between $100,000 to $2 million in their Seed and Series A financing rounds, they told TechCrunch in an interview last week.
“Through Investopad, we helped startup founders raise money, provided guidance, and helped them find customers. We did a ton of events, and learned about the market,” said Arjun, who worked at Capricorn Investment Group and also acted in 2014 blockbuster Bollywood title “Highway.”
Investopad’s first fund portfolio stands at a gross IRR of 138.3% and nine of its 12 investments have realised returns, with every dollar invested already returned, the brothers said.
One example of such startup is the social-commerce startup that has amassed over 2 million users who are engaging with the platform to sell products across India.
In a statement, Vidit Aatrey, cofounder and CEO of Meesho, said, “Rohan and Arjun were our earliest investors. They have a phenomenal global network of entrepreneurs, operators and investors. They helped us early on with introductions to such people; who brought not only capital but, more importantly, valuable operational inputs which helped us learn quickly and find product-market fit faster. While we’ve grown from 2 people to over 1,000+ at Meesho, they remain close confidants!”
Good Capital will focus on investing in startups that are building solutions that address users who have come online in India for the first time in the last two years, they said.
“We don’t have laser-focus on a particular sector,” said Rohan, who previously worked as a sports agent in the talent management business. “Our primary focus is to help startups that are taking a bottom-up approach.”
The VC fund has completed its first close of $12 million from Symphony International Holdings, a host of European family offices, and a number of other Silicon Valley entrepreneurs.
Sundeep Madra, CEO of Ford X, and Yogen Dalal, Partner Emeritus at the Mayfield Fund and founder of Glooko, and Dinesh Moorjani, Managing Director of Comcast Ventures and founder of Hatch Labs and Tinder, will serve as advisors to Good Capital.
“Rohan and Arjun have a unique ability to identify trends and bring together founders and investors to go after the unique problems that India needs to have solved. They operate with a sense of urgency and innovation which is a major key at the seed-stage.” said Madra, who has invested in companies such as Uber and Zenefits.
The fund has also set up an investment committee whose members are Sanjay Kapoor, former CEO of Airtel and now a senior advisor at BCG, Rahul Khanna, formerly a managing partner at Cannan Partners and now founder of Trifecta Capital, and Kashyap Deorah, a serial entrepreneur who is currently building HyperTrack.
Good Capital has also already made two investments: SimSim, a video-based e-commerce platform that is trying to replicate the experience consumers have in offline stores, and Spatial, a cross-reality platform that allows people to collaborate through augmented reality. Garrett Camp, a founder of Uber and Expa, and Samsung Next have also invested in Spatial.
The VC fund is also interested in funding business-to-business startups, though they say these startups would ideally be building solutions for overseas markets. “There we are generally targeting makers, developers and designers, rather than solving problems for heavy-duty sales businesses.”
The arrival of Good Capital should help the Indian startup community, which today has to rely on a handful of VC funds that invest in early stage startups. “Conventionally, funds have targeted the top of the pyramid by exploring visible opportunities and replicated US companies and models,” said Moorjani in a statement.
“In contrast, Good Capital’s first principles thinking applied to India’s larger economy, which is coming online at scale with a supporting ecosystem for the first time, has been refreshing to see. The team is beyond talented.,” he added.
Even as Indian tech startups raised a record $10.5 billion in 2018, early-stage startups saw a decline in the number of deals they participated in and the amount of capital they received.
Early-stage startups participated in 304 deals in 2018 and raised $916 million in funds last year, down from $988 million they raised from 380 rounds in 2017 and $1.096 billion they raised from 430 deals the year before, research firm Venture Intelligence told TechCrunch.
As for Investopad, the brothers said they have hired a number of people who will now continue its operation.
The promise of flying cars has become an idea more synonymous with the tech world’s shortcomings than its exciting potential, but today one of the startups that has been focused on actually trying to make small, airborne vehicles a reality is announcing a fundraise and says it’s on track for a commercial launch in two to three years.
Volocopter, which has been building drone-like autonomous electric flying taxis for its own (as-yet unlaunched) urban commercial passenger transportation service — the latest model is its two-passenger VoloCity announced earlier this summer — has closed €50 million ($55 million) in funding led by Zhejiang Geely Holding Group Co., Ltd, the Chinese automotive company that owns Volvo, Lotus and a number of other car brands. There are also plans for another significant tranche of money underway, likely to be closed later this year.
In this latest round, Geely is investing alongside other unnamed new and existing investors in the Bruchsal, Germany-based company. Previous backers include Intel and Daimler, the German car giant that owns Mercedes and a number of other brands.
Rene Griemens, Volocopter’s CFO, said in an interview that the German company intends to use the funding to continue working on its taxi R&D; meeting safety and other regulatory requirements for its small taxi vessels (which seat two); working other upcoming models such as those that can transport cargo; and business development around commercial launches.
Indeed, part of this latest investment is paving the way for future business: Geely and Volocopter will be working on a joint venture to bring the Volocopter and its “Urban Air Mobility” concept to China.
While there is no commercial airtaxi or other “flying car” services in existence today in any urban area, the market for hopefuls is a crowded one, with the likes of Lilium, Kitty Hawk, eHang, Uber, and many others building completely new styles of aircraft and hoping to play a role in offering short-range flights as an affordable alternative to road-based transportation. (Blade, an airtaxi service of sorts, is offering more conventional helicopters and other vessels in its limited launch for executives.)
“Urban mobility needs to evolve in the next few years to meet rising demand,” said Florian Reuter, CEO of Volocopter, in a statement. “With our Volocopter air taxis, we are adding a whole new level of mobility in the skies.”
Among its many potential competitors, Volocopter has been one of the more prolific when it comes to building and testing its drone-like vehicles, most recently in Helsinki where it became the first autonomous VTOL — vertical take-off and landing — aircraft to operate in the same airspace as other commercial aircraft.
Details on how Volocopter’s service would operate are still — pardon the expression — up in the air, but Griemens said that while Volocopter would own the aircraft, it would likely partner with local operators to help run the service. The average price of each aircraft, he noted, may be akin to a small helicopter, but operations would likely be one-fifth to one-quarter of the price. While initial rides would be expensive, between five and 10 years, they estimate the price would come down to the cost of a taxi ride on the ground.
“The goal was always to democratize flying,” he said.
Its first launch markets are likely to be Singapore, Dubai — where it has a partnership with the city — and an unspecified large European city. That could be somewhere in its home market of Germany, or Helsinki, but just as equally London, where the company has been engaging with city officials on what an airtaxi service could look like. (It’s also part of a new experimental ‘sandbox’ launched by the UK’s Civil Aviation Authority to test out technology related to air-based transportation and travel.)
But even with regulatory frameworks in place, delays can come in many forms. This isn’t even the first time that Volocopter has predicted commercial services in “two to three years.”
Nevertheless, startups like Volocopter represent a credible version of the future of transportation, so for companies like Geely, Daimler and Intel, which still have large legacy businesses, investing in and working with Volocopter gives them a shot at playing a key role (and having a financial stake) in that market.
“Geely is transitioning from being an automotive manufacturer to a mobility technology group, investing in and developing a wide range of next-generation technologies,” said Li Shufu, Geely’s chairman, in a statement. “Our joint venture with Volocopter underlines our confidence in Volocopter air taxis as the next ambitious step in our wider expansion in both electrification and new mobility services.”
Geely already works with Volocopter’s investor Daimler — which has been a prolific investor in next-generation transportation services — on ride-sharing services in the country.
HackerOne, the seven-year-old, San Francisco-based company that mediates between hackers and companies interested in testing their online vulnerabilities, has raised $36.4 million in Series D funding that brings the company’s total funding to date to $110 million.
The deal was led by Valor Equity Partners, which was joined by the company’s earlier investors, including Benchmark, New Enterprise Associates, Dragoneer Investment Group and EQT Ventures.
The company says it now works with more than 1,500 customers that use the company to help find critical security weaknesses so they can address them before players with nefarious intentions find and exploit them. Among the list of companies that pay for its help are Google, Intel, Airbnb, Alibaba, General Motors, and the U.S. Department of Defense.
As we reported late last month, HackerOne is also working with Facebook and its partners on the Libra cryptocurrency project; specifically, it’s developing a bug bounty program for applications built on its blockchain.
With data breaches becoming an everyday occurrence for all kinds of businesses — often caused by flaws in payment systems but also sometimes the simple result of poor cyber hygiene — it’s no surprise that HackerOne, along with competitors like Synack and BugCrowd, are becoming more central to many more companies.
With more outfits under attack than ever before, the rewards that hackers can earn is also on the rise. While each client determines what it will pay for a job, with more complicated issues typically promising higher bounties (HackerOne refers to each task as “piece work”), the average bounty Hacker One paid for critical vulnerabilities has increased to $3,384 in the last year, a 48% increase over the prior year’s average.
The company meanwhile says that six hackers on its platform have now earned more than $1 million each in lifetime earnings. The first of these, a 19-year-old, self-taught hacker from Argentina, became the first person to earn more than $1 million in bounty awards from HackerOne back in March. He has reported more than 1,670 valid unique vulnerabilities to companies, including Verizon Media Company, Twitter, WordPress parent Automattic.
Since then, five more hackers have joined the million-dollar club, says HackerOne.
HackerOne works with hundreds of thousands of individuals in service to its customers. At an event hosted by this editor a couple of years ago, HackerOne CEO Marten Mickos suggested that a fair number are teenagers, too. Said Mickos at the time: “Some [of the hackers we work with] are teenage boys and girls today, and they’ll write us and say their life has changed. They bought an apartment for their mother, or they bought a motorbike for themselves. They show up on social media in their HackerOne hoodies. That’s their identity. It’s shaping them into respectable, contributing citizens who take responsibility for the world. It’s amazing to see how these young people stand up when we adults have been screwing up this world.”
Alice Lloyd George is an early stage investor based in New York and the host of Flux, a series of podcast conversations with leaders in frontier technology.
In the latest episode of Flux podcast I sit down with Matthew Cauble the co-founder of Kin Euphorics, a functional beverage company that aims to reduce stress and boost bliss. Matthew was previously the co-founder of YC-backed startup Soylent. He shares tales from the company’s early days and describes how they made one of the largest pivots in YC history, from building software-defined radios to meal-replacement shakes.
Matthew explains why Soylent resonated and we get into co-founder Rob Rhinehart’s latest interest in space settlement and the Mars industry event he hosted in the Mojave. Matthew shares why he became interested in wellness, how he’s applying lessons learned at Soylent to building the Kin product, and why he believes that strong companies often look like new social movements. We get into the beverage’s formula that includes nootropics and adaptogens, and what it means to challenge a ritual as ancient as alcohol.
An excerpt of our conversation is published below. Full transcript on Medium.
ALG: Matt is the co-founder and president of Kin Euphorics, a New York based company. Welcome.
MC: Thank you. It’s great to be here.
ALG: So I actually don’t know a ton about your background before what you’re doing now. You were one of the founders and COO of Soylent is that right?
MC: That’s right.
Soylent now also sells solid meal replacement bars
ALG: I don’t know how much our listeners know about Soylent. Let’s presume not too much. There was a couple of articles when Soylent came out that said things like, “This is The End of Food” [the New Yorker] or called it “a contrarian food replacement company.” And it’s been a huge success, selling drinkable meals to initially time-crunched Silicon Valley workers. Now the market’s much bigger. You moved from liquids to solids. A lot of the buyers and consumers of it initially thought about maximizing efficiency as one of the reasons they go for the product. I’ve checked the numbers and there’s a strong community — about 35,000 active Reddit folks in the Soylent community which is amazing. And it’s now a nationwide product. It’s available not only on the e-commerce channels where you started, but also in retail locations like 7-Eleven and Walmart.
MC: It’s in Walmart. That’s the best thing.
ALG: That’s crazy.
MC: The dream.
ALG: And it didn’t start as a food or supplement company. You guys started as cell phone towers?
MC: Wireless networks.
ALG: That seems like a large pivot and interesting journey for the company.
MC: Paul Graham said it was the biggest pivot in YC history. So when Rob and I were in college he was working on building these software defined radios —
ALG: You met in college.
MC: We met freshman year of college.
ALG: Where did you go?
MC: We went to Georgia Tech. Rob is from Atlanta. I’m actually from Arizona. But my grandfather and my uncle went to Georgia Tech. I knew I wanted to leave the West Coast and that I wanted to go somewhere else. And Georgia Tech is an amazing school for what I was studying.
ALG: Incredible technical school.
MC: It’s great. Yeah. I wanted to develop an engineering skill set. I wanted to meet people that were working in technology. I didn’t want to be in a major city but I wanted to be somewhere that felt like a city. Georgia Tech is in downtown Atlanta. It’s absolutely beautiful. Rob and I met freshman year. We were in the same fraternity. If you’ve ever met Rob, he’s one of the most fun people who has some of the best ideas of what to do late at night.
ALG: What was the first time you met Rob do you remember?
Rob Rhinehart
MC: The first image I have of Rob is him wearing pants that didn’t quite touch his ankles. But he had extreme confidence. Rob’s a pretty tall guy and he was just coming out of high school.
ALG: So not intentionally cropped pants.
MC: No not at all. I don’t think any of us were expecting to wear pants that day and it happened to be just a day where we had to dress up and so everyone threw something together. But Rob just has this great presence and confidence and he’s a witty, smart person. I love that about him. So we got along from day one and had a lot of adventures throughout college. When we got to the end we realized we wanted to start companies and take risks out of school. Seeing that we didn’t really need any money and didn’t have much responsibility and we had this dream of building something that changed the world. That’s when we got into Y Combinator and moved out to California to work on these wireless networks using software defined radios.
ALG: How did you decide to build wireless networks, what was the conversation?
MC: Rob was thinking about it. He was taking a network class. He was taking a social entrepreneurship class. I took that same social entrepreneurship class. We were thinking about what was something we could bring to the rest of the world. Not just serving customers in the United States, but places in Africa or South America. Developing nations that are getting wealthy. The Internet is the thing. Everyone wants internet. Rob wanted to build a network that people could use in Africa and in rural areas. We also saw an opportunity to build the next AT&T using next wave technology.
ALG: I mean when you look at the NPS for the existing providers, the AT&Ts, they’re pretty low scores. There’s room there. But it does require quite a lot of CAPEX.
MC: Insane CAPEX. The idea was using wireless we could get around a lot of that CAPEX. There was development in the TV networks coming offline opening up this huge amount of space for us to send information across the airwaves that used to be used for ABC and NBC back in the day, which could now be used for people to get internet. And instead of having to set up these like hard network infrastructure we could set up radios and antennas across different houses and apartments and businesses.
ALG: So Paul Graham loved the idea and said come to YC?
MC: I think they were surprised at how audacious these 22 year olds were with this idea. When we went into the interview, typically YC is fast talking, high pressure. But they were laid back and just stricken by this concept of building a software defined radio to make a wireless network. They wanted it to happen. They invested in us because they just thought it was the craziest idea they’d heard.
ALG: So this was when? Summer of?
MC: 2012. We started in Y Combinator May of 2012. We were living down in Silicon Valley. We had this old rundown house. The pool turned into an algae pool. One of our roommates studied bio at Harvard and we would joke about how this algae should be used for something, that we should turn it into something. But what could we possibly do with it. And while we were working 24 hours a day on this network and studying —
ALG: Like, could we use it to power the software defined radio in some way?
MC: Yeah haha. Could we turn this into energy? Could we maybe just encode information in the algae and send it out to people? It actually turned around pretty quickly to talking about bio and synthetic biology and food. Because one of our roommates Dave ended up being a co-founder of Soylent.
ALG: Got it. So it was accidental that you were living in this house together?
Rob Rhinehart, Matt Cauble, David Renteln, John Coogan
MC: It was. So John and Dave the other two co-founders of Soylent showed up one day. They were in another incubator and just needed a cheap place to live. They walked in and they took a look at the place. I told them the price and they said, when can we move in? I said right now. They said great, all of our stuff is outside in the car. And they moved in that day. We all got along because we just had that attitude of, let’s get this done, keep moving, make decisions and keep pushing forward. We loved talking about our projects, the projects that we thought were interesting, as well as just hanging out. We were good friends. We’re really friends.
ALG: At what point did you decide to move over to Soylent, which I guess is a reference to the novel by Harry Harrison?
MC: Harry Harrison. Yeah. Which is “Make Room Make Room” and the ominous food company in there is called Soylent. They make a bunch of different products and one of them is Soylent Green, which in the book is just meant to be the most efficient food source. It was sensationalized in the movie with Charlton Heston to be made from people. Almost every food company talks about how “people are the key ingredient.” So Soylent was very on the nose about it, food companies are all about people and Soylent just went for it.
“Soylent Green” the 1973 thriller starring Charlton Heston
ALG: Kind of a wink reference.
MC: Big wink yeah. We just brought it to the top. So we got to Soylent by dropping the wireless network project, moving to San Francisco, and opening ourselves up to any new idea possible. We were humbled by that point. But fortunate to have some money left over from the initial Y Combinator investment. We spent the time developing whatever we could and getting it out there. And Rob started looking at food. He read a book about food and nutrition and biochemistry. He started experimenting. He formed this whole plan to spend a month eating only these raw nutrients in a slurry.
ALG: So it was partly for yourselves that you decided to build the product?
MC: It was for Rob. Rob built this product.
ALG: I’ve got this image of you guys sitting in your house in San Francisco making mulch.
MC: Well house is a loose term, we’re talking about a one bedroom apartment.
ALG: OK. And I guess it was a lot of iterating, self-testing, queasy stomachs? I talk a lot about frontier markets and early adopters on the podcast. How did you make that jump to thinking people are going to want to buy this?
MC: In the summer during Y Combinator, we had this fun discussion about R. Kelly’s “Trapped in the Closet.” Do you know what “Trapped in the Closet” is?
ALG: No.
MC: It’s this hip hop opera. One of the most interesting, wild things that’s probably ever been released. We listened to the first five episodes, laughed about it and saw that there was a way to describe graph theory through “Trapped in the Closet.” Because it’s about all these different relationships people are having and then cheating on each other basically. So Rob created this graph theory explanation in a blog post that reached Hacker News. It got about 150 upvotes and garnered him a bunch of followers on his blog, which he continued to develop content for. Then he pushed out a post about Soylent, about his experience on no food and how he had a miracle experience where he had so much more energy, was very active, had a lot of confidence, was able to study and read. All the things that he ever wanted he was getting out of this experiment that he ran. I think he just had a critical audience that understood. It spoke to them. It sounded interesting. It started going viral on Hacker News and Facebook almost immediately. Rob came in a day after he released his blog post, sat down and said, I think people want this product. He knew that because he had 4000 e-mails or something crazy. A ton of emails in his inbox people from all over the country asking him to give them the Soylent.
MC: I don’t think anyone was bold enough to say they stopped eating food. People think too hard about how do you sell a story to the customer. Rob had this beautiful way of thinking about it — well, this is replacing my food. I was eating food and now I’m not eating food right. Now I’m eating this thing that I’m calling Soylent.
ALG: So it’s pretty simple. We don’t have to sell this in a complicated way. We know people want it. Let’s just make it and sell it.
MC: It’s not even that we know people want it. It’s — I know I want it. I know I had a great experience. I’m going to tell the truth. And truth is one of the best sales things you can possibly have. So Rob just saw. If you read that blog post it’s just dripping with truth and emotion and real experience that people related to. It’s one of those ideas that people are like, I thought about this too. I never want to clean my dishes. I don’t like going to the store. I don’t like having to think about my nutrition. This makes total sense for me.
ALG: So the early adopter there was, I don’t say workaholics, but folks who wanted to focus on other things and minimize the amount of effort or calculation that goes into, where’s my next meal coming from?
MC: That’s right. What we learned is that food, 80 percent of the time is for fuel. It’s for that ability to go to work, to do meetings, to hang out with people in a productive way. Then there are the times that are romantic with your family, with your significant others, sharing stories over fires. Those are great times to have traditional food. But Soylent is the perfect food to have whenever you’re busy.
ALG: I always associated it with going to Mars. Though it might be quite heavy actually come to think of, as its a liquid. But in terms of what are we going to use to fuel ourselves as humans on the way to Mars. I always thought that that was one of the things behind Soylent. I actually saw Rob at this event in LA in the desert run by SynbioBeta. It was called Betaspace. It was 100 founders, folks from NASA, SpaceX who were getting together to discuss colonizing Mars, or industries that could be viable now with revenue that could be generated now that can also be used on Mars. Rob was a big part of sponsoring that —
Coverage of the Betaspace event in April 2019 [LA Times]
MC: It was on his land.
ALG: There was a ritual, a ritual around destroying old tech. I guess Rob now is looking a lot at Mars. And you are helping to build this new company here in New York called Kin Euphorics. I’d love you to explain what it is. We also have it here in the studio and I have never tried it.
Kin bottle — $39 per bottle. Kin spritz — $24 for a 4 pack.[Shop]
MC: I think we should start off by pouring glasses. Then we can talk about it.
ALG: OK great. Because I wanted to see if over the course of the conversation I might feel some effects.
MC: Yeah. We’ll have a good conversation at least. Let’s go ahead and open it and pour some drinks. Have a proper social conversation. Break the ice.
ALG: I don’t know if this is technically allowed in the studio but —
MC: There’s no booze in it. We don’t need a license or anything for this. We can serve this anywhere we want. Are you gonna try it straight? Let’s try it straight and do some tasting notes.
ALG: So I’m doing a wine sniff, are you supposed to do that.. [sloshes drink] Wow.
MC: What does it remind you of.
ALG: Well I’m from England where we have a lot of herbals and liqueurs. Everything from Ribena, to lime juice, to elderflower cordial. That’s what we drink at home. What does this remind me of? There are some herbal notes. But it’s strong and light at the same time.
MC: That’s right. We made it so you can mix it pretty easily into whatever you want.
ALG: I want to say some licorice or spices?
MC: Yeah there’s licorice in there. You nailed it. It’s inspired by Campari. When I first started thinking about this problem of alcohol and hangovers and social drinking I was in Italy drinking a lot of Campari spritzes.
ALG: I love Campari. Though they do give you a bit of a hangover. I’m drinking this straight now. So I’m going to mix in —
MC: Let’s mix in some tonic water. Which one do you want. Do you want this. Angostura, do you want this one?
ALG: So you got the idea for Kin in Italy?
MC: Well backing up, I left Soylent in 2016 and our accountant introduced me to my co-founder Jen. At the time she was working on a wellness company. We had a great conversation about why are people who are looking for health and wellness still drinking. When you have a wellness event people are still serving wine. One of the easiest things you can do to be healthy is just not drink. But that isn’t exactly true because it’s hard to have any social life if you’re not drinking. It’s very difficult, especially in New York City, to live and meet people and expand your career if you’re not going out to bars and restaurants and drinking at least wine. I thought that was an interesting problem.
Alcohol volumes have been declining in the U.S. [Source: WSJ]
And I continued traveling, went around South America went to Europe. My first interest was in curing hangovers. As I started looking into the effects of hangovers and what happens when we process alcohol, I realized it has become a big problem. Like wow this is something that we’re doing and we’re not even thinking about it. It’s a leading cause of cancer, it kills people every year. It’s got all these downsides. But there’s also this beautiful side to it, this ritual, this social connection, this gathering side. When I got back from traveling I started thinking about what I wanted to work on next. I called up Jen and said, hey let’s go ahead and try to make something that takes down alcohol. Or at least replaces alcohol for that social benefit.
ALG: Wow.
MC: We spent about a year working on different formulas. We were looking into, what is it that people actually want when they drink. We came to this realization that people want to feel something and they want to feel it with other people in a ritual.
ALG: But it could be a different feeling than what we currently experience?
MC: Yes. We want to be taken out of our current mode, which I think is stress. We’re typically stressed out right now. We want to feel a little less stressed. We want to think about something other than work. So what are different compounds that people are taking if they have high anxiety, if they’re socially awkward, if they can’t sleep, if they’re lethargic —
ALG: You didn’t just want to dose Xanax into some kind of mixer?
MC: Haha no.
ALG: The whole of New York is on that anyway.
MC: Yes we’re finding out there’s a lot of people with drug interactions. Start making a drink that offers these effects and people will tell you immediately if they’re taking anything else. We’ve found out that a lot of people in York City are medicating.
ALG: I think everyone’s medicating based on the data I’ve seen. I might be the only person I know that’s not on Xanax or one of those. Let’s talk about the ingredients. If you go on the website you talk about how it’s “euphorics for humankind.” Essentially it’s botanical spirits. Based on the compounds you’ve got in here, including adaptogens and nootropics, you say that you’ll experience a “rise” within maybe 15 minutes of drinking. We’re about 10 minutes in. I’m waiting for that rise. I’m generally excited so I might just rise anyway.
MC: I can tell. You have the anticipation. Placebo is gonna be real for you.
ALG: I know. I’m excited. I want it to work. And it says it might last one hour. It’s supposed to “adapt to what our bodies need to balance our hormonal response to stress, which is to reach a homeostasis.” I guess what you’re getting at is cellular balance? What is the rationale behind that?
MC: Euphorics, that word actually means to come into health. It’s a Greek word that means to come into yourself. To come into your true self. Which is homeostasis. That feeling of euphoria is to not only give you that rise and give you that feeling of awake and less stress but also to actually heal you. So the ingredients that we put in there — Rodeola is is the main root in the current formula that has been used in ayurvedic Eastern medicine for a long time in order to balance out stress and cortisol levels. So if your cortisol is too high it’ll bring it down, if it’s too low it actually bring it up. I think most people right now have cortisol levels that are too high as we feel like we’re being attacked all the time. We balance that out with other ingredients like B vitamins that help replenish your neurotransmitters. We put in Citicoline, which increases oxygen flow to your cells. We put in L-tyrosine which is a precursor to dopamine. 5-HTP is a precursor to serotonin. And hibiscus, which has been used in the Middle East for a long time to increase blood flow and lower blood pressure. So before you start drinking booze your brain is firing dopamine in anticipation of that drug. Your body has that relaxing, the shoulders drop, you feel chilled out. What we decided to do with Kin instead was put in the precursors for dopamine. So what you’re feeling instead of just anticipation, you’re actually feeling like a nourishment of dopamine, that increased amount from the drink itself.
ALG: A lot of this ties to neurochemistry. I messaged my friend who’s a neuroscientist this morning, he loves this stuff. I asked, “what do you think of adaptogens and nootropics?” He said, “well they’re not mainstream scientific terms, they’re more marketing speak. But if these guys do invent the magic brain cocktail I want to start using it immediately.” I feel like that’s the general attitude of people right now. There’s some skepticism that it actually works but everyone wants it to work.
MC: That’s right. If you look at alcohol it can’t make any claims about what it does. If you look at all of its marketing and what it is, it’s purely situational. It’s purely aspirational. We have a similar problem to solve. What we’re trying to get people into is this whole new way of drinking with their friends. And there isn’t a ton of science about nootropics or adaptogens. It’s a lot of anecdotal and a lot of experiential. Fortunately in this age of social media people are willing to talk about it openly. So we have those channels open for people to call us and to talk about their experiences.
Other estimates put the nootropics market at $6 billion by 2024, expanding at a CAGR of 17.9% from 2016 to 2024 [Source]
ALG: So the wellness industry over the last two years it grew 13 percent. It’s now a four trillion dollar industry of which $700 billion is about eating and nutrition. You’re probably in that booming category. Nootropics is about $1.3 billion now and estimated to be $6 billion by 2024 and that’s not even anything proven. There’s nothing scientific in there. It’s fascinating to watch that market growing. There’s a lot of cultural and social trends driving it regardless of any science underneath it.
MC: People just want to live longer. People want to live longer and be healthy. We’ve seen the effects of being unhealthy on a lot of the population and people in our own families. We’re so educated now. We have ambitions and we want to make things. We want to create. We say that Kin is about uniting creators and if you have a brain you’re a creator. What nootropics and health and wellness is about at the end of day, is not just making yourself feel good. It’s about doing good. Doing things that you want to do. Having the energy and the time to do it. If we can be what your friend called it, “the brain cocktail the future,” if we can be that platform for people to go out at night or throughout the day. Be together and have something that gives that that effect and that feeling and that drives more creation. Then we’re changing humanity. We’re actually pushing people forward.
ALG: It’s exciting. You could change the trajectory. We’ve been drinking alcohol for —
MC: Eight thousand years.
The discovery of late Stone Age beer jugs shows that intentionally fermented beverages existed at least as early as the Neolithic period, 10,000 years ago. Wine clearly appeared in Egyptian pictographs around 4,000 BC and wine samples from Greece date to the same period. [Source]
ALG: Quite a long time. There hasn’t been much change to that.
MC: No. It’s crazy to think about how the rise of civilization, the rise of laws, the rise of agriculture — all coincide with this discovery of alcohol. Looking around you can see how it affects behavior. And if behavior is what drives culture, then how much of an impact has alcohol had on who we are today?
ALG: It’s fascinating to think that we’re on the cusp of these alternative ideas that are starting now. You’re obviously in the food and beverage space so you have been thinking about these things for a long time. You probably saw the Beyond Meat IPO recently. They set their IPO at $25 and it’s now at $146 dollars. That’s a 480% gain since the IPO — crazy.
MC: I love Beyond Meat, just on the record. I also love Impossible. We are so fortunate that there is so much money, interest and competition going into this. We win at the end of the day.
ALG: Yes. They’re the first one to IPO and they’re at a market cap of $9 billion that’s about 70% of the market cap of Campbell’s which is $13 billion. And Campbell’s does 100x the revenue of Beyond Meat.
MC: People are excited about the future. It’s like Tesla and cars. These companies that are offering the promise of the future, of how we’re gonna live on Mars. That’s what people want to invest in right now. There’s that pent up optimism for how we can change ourselves. Beyond is a great example of that.
ALG: What’s fascinating is that both times — with Soylent and now with with Kin — you identified early adopter groups. What do you see as the similarities, what have you learned from speaking to a passionate, engaged, forward-thinking initial consumer?
MC: With Soylent Rob was the perfect fit for the initial market, which was people living in San Francisco. People in tech. Rob is a software engineer. He knows how to speak the language of software and he applied that language to food. That got people that typically thought about bits and bytes to think about their calories and proteins. Rob did a great job of hitting that initial market. We were able to start there and grow out. And now it’s in Walmart. It’s all over the country and people know what Soylent is for the most part.
With Kin, actually my co-founder and I realized that the initial market would be women in urban cities, that are in the workforce, building their careers, starting their own businesses, creating their own channels. My co-founder is the perfect face and CEO for this company, because she speaks to them so well. She comes from wellness. She comes from helping people heal. She’s also a fun, lively person. So we realized early on that the market was going to be this group of women that she is a part of. When thinking about new markets I don’t think I’m the person that can lead them. I’m humble and I look for the the person that’s the right person to lead the group, to start a movement. At the end of the day a great company looks a lot like a social movement. It looks a lot like a MLK or Gandhi. Companies are like new social movements that you should be looking for.
ALG: You’re starting a religion.
MC: You could say that.
ALG: Interesting that most of your followers are women so far.
MC: Yes we’re about 70 percent women, split between New York and Los Angeles, which is who we’ve been focused on. People looking for that new alternative. When we talk to our customers they say, “I’ve been looking for this for years and I have never had this option. I’m just so grateful.” You want to hear customer feedback of gratefulness to the point where you cry. We got that at Soylent. We’re getting that now with Kin. At the end of the day that’s what makes you wake up in the morning. A real person telling you how much love you’re giving them. That’s what everyone should be trying to do right.
ALG: How do you feel about building this company in New York. Why New York?
MC: New York is the most social place on earth. People are out and about all the time.
ALG: So if you could crack the alcohol industry here, the nightlife and social customs and get togethers, then you could crack it anywhere?
MC: Yeah. The saying is if you can make it here you can make it anywhere. I think socially that’s very true. New York is the perfect place. There’s a ton of fashion. A ton of creators. Tons of art in New York City across a lot of different industries. If Kin can be the main drink for people in these creative industries in New York City it’s just going to spread to other places.
ALG: Is there a presumption that the LA wellness folks are going to adopt this super fast anyway?
MC: I haven’t even thought about LA wellness people. They have so many options out there. LA has so many options.
ALG: It’s interesting that you don’t have CBD in it.
MC: We tried. We actually tried to put CBD in. It just doesn’t make sense. No one’s figured out what CBD is yet. No one has actually said this is what it does for you.
ALG: There’s no neurochemistry in it.
MC: No. It seems to be some sort of anti-inflammatory on the level of an Ibuprofen. There are benefits to that but it’s not nearly the benefits that people are talking about so far. That being said I think people have had real experiences on CBD and that’s great for them too.
Before he founded the plant-based burger company Impossible Foods, Patrick Brown, who spent 25 years as a biochemistry professor at Stanford, also co-founded a Hayward, Ca.-based food company called Kite Hill that has developed numerous nut milk products that it says are healthier and more sustainable than their dairy counterparts.
Investors seem to agree. According to a new SEC filing, the now nine-year-old company is sealing up $15 million more in funding (and has at least $10 million in fresh capital locked down). The company most recently closed a round if funding last fall, including from backers General Mills, CAVU Venture Partners, and New Crop Capital, and this newest infusion should bring the company’s total funding to around $80 million, according to Crunchbase.
It’s easy to understand their enthusiasm for the space more broadly. The vegan cheese market has seen double-digit growth over the past few years, according to Nielsen data, which recently found that sales of plant-based cheese grew 41% through August of of 2018, compared with the flat sales of traditional dairy cheese. Sales of almond, soy, oat and other plant-based milks are soaring, too. According to Nielsen data, sales of plant-based milk beverages rose 9% in the year ending in June 2018, up from 3% the previous year. Meanwhile, traditional cow’s milk sales fell 6% during the same period.
Kite Hill makes almond milk yogurts, greek yogurts, cream cheese, ricotta, pastas, dips, and kids tubes that are sold in Safeway, Whole Foods, and Amazon, among other retail outlets. Along with Brown, it was founded by Monte Casino, a former instructor at Le Cordon Bleu in Boston and Tal Ronnen a chef and the founder of the vegan Los Angeles restaurant Crossroads Kitchen.
It’s a crowded space to be operating in. Califia Farms, for example, which makes non-dairy milks and yogurts, among other things, was founded the same year in Bakersfield, Ca., and has raised $115 million so far, including from Stripes Group. Five-year-old Ripple Foods, in Emeryville, Ca., has similarly outpaced Kite Hill on the fundraising front, raising $120 million so far for its non-dairy milk products.
Kite Hill is also competing with big companies that are eager to stay relevant as customer preferences change. Among them, Danone revealed plans to triple the size of its plant-based business — including its non-dairy beverage and yogurt products — by 2025.
Indeed, a strategy for most brands like Kite Hill seems to be to accept funding from the growing number of giant food companies that have established venture arms and hope they’ll help grow their brand, rather than try extinguishing it. Among the behemoths currently funding their smaller rivals is General Mills (its venture arm is 301 INC), Campbell Soup (Acre Venture Partners), Tyson Foods (Tyson Ventures), and Kelloggs (1894 Capital).
While there’s no question that highlight-filled phones create stiff competition for ticket sales, college football’s biggest attendance problem may be that it hasn’t adopted enough technology in its effort to fill seats. At the start of the 2019 season, however, that appears to be changing, with the majority of top 25 teams moving away from their reliance on 3rd-party distribution via the secondary ticket market and inside season-ticket sales.
As a supplement, they’re introducing more products than ever using the kind of brand-centric, direct-to-consumer (DTC) marketing that helped upstarts like Dollar Shave Club, Casper, and Warby Parker take share from some of the most entrenched brands on the planet.
While the ticket category is estimated to be around $20 billion across both the primary and secondary markets, if that number is going to grow over the next decade, direct team and artist brands will likely have to lead the charge by taking a page out of the DTC brands playbook. In addition to leveraging performance-based marketing channels like Facebook, Instagram and Google, schools will also need to move away from a one-size-fits-all message and focus on hyper-targeting consumer with new and more personalized products than ever before.
They’ll also need to make it cheaper.
In a recent poll by Front Office Sports, 58% of respondents cited ticket cost the top reason for not attending a college sporting event. According to TicketIQ, since 2012, the average price of top 25 college football tickets on the secondary market has increased by 24%.
Add to that the cost of parking, gas and food, and the cheapest option to see Saturday football live is a couple hundred dollars…most likely for a game that will be over in the first quarter. For a competitive rivalry, prices can easily be double or triple that. For the Iron Bowl between Alabama and Auburn, the cheapest lower level seat will run $300, while USC’s semi-annual visit to Notre Dame starts at $254.
Image courtesy of Getty Images/Bernard Lang
One play to boost ticket sales is through group ticketing. It’s become a major driver of direct-to-fan marketing for college sports. According to Jake Bye, EVP at IMG Learfield–a leading outsourced ticket sales platform that works with over 40 colleges–group ticket scan rates can be as much as 20% higher than season or single-game tickets.
That may be one of the reasons that IMGL has entered into a national deal with ticket startup Fevo, which launched in 2016 and provides technology to help ticket sellers manage and customize group offers to any affinity group. Using Fevo, IMGL has rolled out multiple new group products this season with themes including education day, tickets for veterans, youth sports, as well as cheer and dance–all cohorts that can be targeted directly.
According to the Journal, the difference in announced attendance and scanned tickets was as high as 50% for some major college football programs, and in the range of 10-15% for big-name schools like Alabama and Ohio State. That’s on top of the numbers reported by the NCAA and making headlines, which shows that FBS attendance is down 9% over the last 10 years.
In addition to innovating around products and price, teams looking to evolve their marketplace also must actually have tickets to sell. While that may sound like an obvious statement, it requires a break from the old-school definition of ticket-market success: Selling Out.
2018 was the year the sell-out died for some big name ticket brands like Taylor Swift and the Washington Redskins, and 2019 appears to be the year that college football is following suit. Of the top five teams in the 2019 TicketIQ top 25 only the University of Georgia is completely sold out, meaning that the secondary ticket market is the only place to get tickets. Even blue chip programs like Notre Dame, Ohio State and the National Champs, Clemson, have unsold single-game tickets available directly through Ticketmaster or Paciolan, their primary ticketing platforms.
Even with single-game tickets to sell, new products in the market, and measurable, ROI-positive marketing channels to tap into, reversing the downward trend for college ticket sales isn’t a sure thing. It will take an entrepreneurial mindset and willingness to test a lot of new strategies, which can be an uphill battle, especially for bureaucratic-heavy state schools.
In a world that values experiences more than things, however, the platform that college sports has to work with is enviable. Colleges likely have the deepest level of brand identification of any major sports category. Even the most ardent professional sports fans can’t claim to have ever actually been a Yankee or a Laker. For a large percentage of college ticket buyers, however, the opposite is true, and it’s the kind of brand loyalty that can’t be bought. For the 2019 season and beyond, the key to reversing the negative attendance trend will be figuring out how to sell it.
A friend and MIT grad wrote to me yesterday, “I don’t know if the Media Lab is redeemable at all.” This in the wake of the bombshell Ronan Farrow piece in the New Yorker, reporting that the Media Lab under its director Joi Ito had covered up a much closer relationship with Jeffrey Epstein than previously revealed. Ito promptly resigned.
The Media Lab has always occupied a curious place in the tech world. According to itself, it “transcends known boundaries and disciplines by actively promoting a unique, antidisciplinary culture that emboldens unconventional mixing and matching of seemingly disparate research areas … In its earliest years, some saw the Media Lab as a house of misfits. Here, the emphasis was on building; the Lab’s motto was “demo or die.””
It ceased being viewed as a house of misfits a long time ago. Instead it has become perceived as a hyper-prestigious, creme-de-la-creme entity, a weird mixture of counterculture and patrician, seen as home to the best (and coolest) of the best, whose annual budget has tripled from $25 million in 2009 to $75 million in 2019. It seems fair to estimate that roughly a billion inflation-adjusted dollars have been spent on it since its birth in 1986.
While it’s an academic institution it has always been exceptionally business-oriented. “At first glance, much of the Media Lab’s research may seem tangential to current business realities, but for more than 30 years, the Lab has demonstrated that seemingly “far out” research can find its way into the most conventional—and useful—applications … The Media Lab has spawned dozens of new products by our members, and over 150 start-up companies,” to quote, again, them.
And yet. One can’t help but notice. Consider its basic ingredients:
founded in 1986, as Moore’s Law began to hit us all, and tech began the exponential growth that has made it the world’s dominant force
at the most prestigious technical university on the entire planet
in a position to pick and choose from the brightest minds of its generation
allotted $1 billion to spend over those thirty years of hockey-stick growth
Given all that, wouldn’t you have expected … well … a whole lot more than what it has actually accomplished?
Because that list of accomplishments is surprisingly scrawny. Take its spin-off companies. Here’s its list. Trivia question: how many Media Lab spinoffs have gone public, without merging or being acquired, in its 33 years of existence? As far as I can tell, the answer is one, and even that comes with a sizable asterisk: the Art Technology Group, which didn’t start building products until six years after it spun out (it was a consultancy), IPOd during the first dot-boom, and was eventually acquired by Oracle.
There are companies you’ll recognize on that list. Well, there’s one: BuzzFeed. Yes, really. There are a few others of note. Harmonix, makers of Rock Band. Makani Power, acquired by Alphabet six years ago. Elance, which became Upwork and then had its platform phased out. Jana. Formlabs, Otherlab, The Echo Nest, all of which I think are great, but none of which I would have heard of if not for some personal connections. One Laptop Per Child, a bad idea a decade ago and a forgotten one now. And, notably, E Ink, the Media Lab’s one definite, unambiguous big win … back in 1996.
It’s not nothing, but it’s so much less than you’d expect, given its ingredients. It’s certainly no Bell Labs, or Xerox PARC, or even Y Combinator, and I say that as someone who is less of a YC enthusiast than most of the Valley.
OK, I hear you arguing, but they’re a basic research facility! Spinoff companies are not their true measure of success! Sure. Fine. So let’s take a hard look at their own list of their top 30 tech products or platforms (PDF). Aside from E Ink — which, again, was 23 years ago — doesn’t that look a lot like a list of occasionally interesting, but fundamentally limited and/or niche, technologies? Doesn’t it seem rather utterly devoid of any significant impact on the world?
Wouldn’t you have expected so, so much more?
Criticisms that the Lab is more about style and sizzle than serious substance are not exactly new. Nor are they old: here’s a piece condemning its recent “personal food computer” as smoke and mirrors that doesn’t actually work. This “Hunter S. Negroponte” piece dates back to the 1990s. It’s satire, but if you read it, you’ll likely find you can’t help but raise your eyebrows and wonder just how far back the Media Lab’s systemic problems go.
Maybe if it hadn’t been a “plutocratic friendocracy,” to quote former Media Lab faculty, and it had actually systemically favored the best and brightest and most innovative, regardless of background or personal connection — maybe then things would have been very different. Maybe it would actually have been what it pretended to be for all this time.
Hello subscribers. This is Week-in-Review, where I give a heavy amount of analysis and/or rambling thoughts on one story while scouring the rest of the hundreds of stories that emerged on TechCrunch this week to surface my favorites for your reading pleasure.
For all that Facebook has been experimenting with and exploring as of late, the launch of Facebook Dating is one feature that feels pretty integral to their DNA. Facebook already piloted relationship statuses and added another step to the dating process, now they’re trying to enable those relationships in the first place.
The biggest threat to Facebook’s dating play (which launched in the United States this week) is that people aren’t using Facebook the same way that they did ten or fifteen years ago. Facebook very well could have missed the boat.
People grumbled when Messenger was spun out of the core Facebook app, but as the app became more about media consumption, actions like visiting friends’ profiles became more about browsing than interacting. Facebook was once the ideal space for an app like this, but it might be a bit less natural of a home compared to apps like Messenger where most communication happens.
Facebook has more than just new user habits to contend with. The company isn’t blazing the trail here, they have a whole mess of contending apps to take on, though interestingly there are only a couple competing conglomerates they need to neutralize given the pretty extreme consolidation in the dating app scene.
Entrepreneurs aligned with Match Group seem to see Facebook trying to ship a one-sized fits all solution for an industry that has proven to need several platforms of varying niches. So, the questions are how broad of an audience Facebook can find and whether they’ll go out of their way to pursue different modes to appeal to what other apps have already gleamed from the market.
Facebook’s clearest advantage is that it already has a directory of most of the people that you know and it can leverage that network for things like its “secret crush” feature that lets you list friends of yours that you’re interested in and can make a connection if one of those Facebook friends feels the same way.
We’ll see soon whether Facebook’s play is coming too late or right on time.
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On to the rest of the week’s news.
Trends of the week
Here are a few big news items from big companies, with green links to all the sweet, sweet added context:
Samsung’s Galaxy Fold is aiming for a triumphant relaunch
Samsung’s biggest fiasco since the Note 7 is ready for another go. The company announced this week that it’s ready to relaunch its $2,000 folding phone in Korea and plans to release the US version in the coming weeks. Read more here.
Facebook looks at removing like counts User-visible metrics have made the social media world go ’round but there are some questions about how healthy it is to constantly be judging what you share about yourself based on getting likes and shares. Facebook is experimenting a bit with taking like counts off of posts. Read more here.
What to expect at the 9/10 iPhone event
Apple is launching its latest iPhone models this week and we have some pretty decent ideas of what we’re going to see. It’s the third-year of the iPhone X cycle so we’re not expecting a full revamp, just some iterative updates, most of which we’re expecting to show up in a redesigned camera. Check out my colleague Brian Heater’s story for all of what he’s expecting at the event.
Our premium subscription service had another week of interesting deep dives. We published a roadmap for entrepreneurs trying to make the most of the data that they have.
“…There are good and bad ways for startups to use data. In my opinion, the bad way unfortunately is often preached on saas blogs, a/b test tool marketing pages, and especially growth hacker conferences: that by simply measuring and looking at data you’ll find simple things to do that will drive explosive growth. Silver bullets, if you will.
The good way is comparable to first principles thinking. Below the surface of your day to day results, your startup can be described by a set of numbers. It takes some work to discover these numbers, but once you have them you can use them to make predictions and spot underlying trends. If everyone in your company knows these numbers by heart, they will inevitably make better decisions…”
(Photo by Steve Jennings/Getty Images for TechCrunch)
Disrupt SF
Our biggest event of the year is right around the corner and we’re bringing in some of the most important figures in the tech industry. Here’s who’s coming to Disrupt SF 2019.
In addition to taking in the great line-up of speakers, you can roam around Startup Alley to catch the more than 1,000 companies showcasing their products and technologies. And of course the Startup Battlefield competition that launched the likes of Dropbox, Cloudflare and Mint will once again be one of the biggest highlights of Disrupt SF.
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How long have you been using your current smartphone? The answer for an increasing number of consumers is years, plural. After all, why upgrade every year when next year’s model is almost exactly the same as the device you’re holding in your hand?
Dutch social enterprise Fairphone sees this as an opportunity to sell sustainability. A chance to turn a conversation about ‘stalled smartphone innovation’ on its head by encouraging consumers to think more critically about the costs involved in pumping out the next shiny thing. And sell them on the savings — individual and collective — of holding their staple gadget steady.
Its latest smartphone, the Fairphone 3 — just released this week in Europe — represents the startup’s best chance yet of shrinking the convenience gap between the next hotly anticipated touchscreen gizmo and a fairer proposition that requires an altogether cooler head to appreciate.
On the surface Fairphone 3 looks like a fairly standard, if slightly thick (1cm), Android smartphone. But that’s essentially the point. This 4G phone could be your smartphone, is the intended message.
Specs wise, you’re getting mostly middling, rather than stand out stuff. There’s a 5.7in full HD display, a Qualcomm Snapdragon 632 chipset, 4GB of RAM and 64GB of storage (expandable via microSD), a 12MP rear lens and 8MP front-facing camera. There’s also NFC on board, a fingerprint reader, dual nano-SIM slots and a 3,000mAh battery that can be removed for easy replacement when it wears out.
There’s also a 3.5mm headphone jack: The handy port that’s being erased at the premium smartphone tier, killing off a bunch of wired accessories with it. So ‘slow replacement’ smartphone hardware demonstrably encourages less waste across the gadget ecosystem too.
But the real difference lies under the surface. Fairer here means supply chain innovation to source conflict-free minerals that go into making the devices; social incentive programs that top up the minimum wages of assembly workers who put the phones together; and repairable, modular handset design that’s intended to reduce environmental impact by supporting a longer lifespan. Repair, don’t replace is the mantra.
All the extra effort that goes into making a smartphone less ethically challenging to own is of course invisible to the naked eye. So the Fairphone 3 buyer largely has to take the company’s word on trust.
The only visual evidence is repairability. Flip the phone over and a semi-opaque plastic backing gives a glimpse of modular guts. A tiny screwdriver included in the box allows you take the phone to pieces so you can swap out individual modules (such as the display) in case they break or fail. Fairphone sells replacements via a spare parts section of its website.
Despite this radically modular and novel design vs today’s hermetically sealed premium mobiles the Fairphone 3 feels extremely solid to hold.
It’s not designed to pop apart easily. Indeed, there’s a full thirteen screws holding the display module in place. Deconstruction takes work (and care not to lose any of the teeny screws). So this is modularity purely as occasional utility, not flashy party trick — as with Google’s doomed Ara Project.
For some that might be disappointing. Exactly because this modular phone feels so, well, boringly normal.
Visually the most stand out feature at a glance is the Fairphone logo picked out in metallic white lettering on the back. Those taking a second look will also spot a moralizing memo printed on the battery so it’s legible through the matte plastic — which reads: “Change is in your hands”. It may be a bit cringeworthy but if you’ve paid for an ethical premium you might as well flaunt it.
It’s fair to say design fans won’t be going wild over the Fairphone 3. But it feels almost intentionally dull. As if — in addition to shrinking manufacturing costs — the point is to impress on buyers that ethical internals are more than enough of a hipster fashion statement.
It’s also true that most smartphones are now much the same, hardware, features and performance wise. So — at this higher mid-tier price-point (€450/~$500) — why not flip the consumer smartphone sales pitch on its head to make it about shrinking rather than maximizing impact, via a dull but worthy standard?
That then pushes people to ask how sustainable is an expensive but valueless — and so, philosophically speaking, pointless — premium? That’s the question Fairphone 3 seems designed to pose.
Or, to put it another way, if normal can be ethical then shouldn’t ethical electronics be the norm?
Normal is what you get elsewhere with Fairphone 3. Purely judged as a smartphone its performance isn’t anything to write home about. It checks all the usual boxes of messaging, photos, apps and Internet browsing. You can say it gets the job done.
Sure, it’s not buttery smooth at every screen and app transition. And it can feel a little slow on the uptake at times. Notably the camera, while fairly responsive, isn’t lightning quick. Photo quality is not terrible — but not amazing either.
Testing the camera I found images prone to high acutance and over saturated colors. The software also struggles to handle mixed light and shade — meaning you may get a darker and less balanced shot that you hoped for. Low light performance isn’t great either.
That said, in good light the Fairphone 3 can take a perfectly acceptable selfie. Which is what most people will expect to be able to use the phone for.
Fairphone has said it’s done a lot of work to improve the camera vs the predecessor model. And it has succeeded in bringing photo performance up to workable standard — which is a great achievement at what’s also a slightly reduced handset price-point. Though, naturally, there’s still a big gap in photo quality vs the premium end of the smartphone market.
On the OS front, the phone runs a vanilla implementation of Android 9 out of the box — preloaded with the usual bundle of Google services and no added clutter so Android fans should feel right at home. (For those who want a Google-free alternative Fairphone says a future update will allow users to do a wipe and clean install of Android Open Source Project.)
In short, purely as a smartphone, the Fairphone 3 offers very little to shout about — so no screaming lack either. Again, if the point is to shrink the size of the compromise Fairphone is asking consumers to make in order to buy an ethically superior brand of electronics they are slowly succeeding in closing the gap.
It’s a project that’s clearly benefiting from the maturity of the smartphone market. While, on the cellular front, the transformative claims being made for 5G are clearly many years out — so there’s no issue with asking buyers to stick with a 4G phone for years to come.
Given where the market has now marched to, a ‘fairer’ smartphone that offers benchmark basics at a perfectly acceptable median but with the promise of reduced costs over the longer term — individual, societal and environmental — does seem like a proposition that could expand from what has so far been an exceptional niche into something rather larger and more mainstream.
Zooming out for a second, the Fairphone certainly makes an interesting contrast with some of the expensive chimeras struggling to be unfolded at the top end of the smartphone market right now.
Foldables like the Samsung Galaxy Fold — which clocks in at around 4x the price of a Fairphone and offers ~2x the screen real estate (when unfolded), plus a power bump. Whether the Fold’s lux package translates into mobile utility squared is a whole other question, though.
And where foldables will need to demonstrate a compelling use-case that goes above and beyond the Swiss Army utility of a normal smartphone to justify such a whopping price bump, Fairphone need only prick the consumer conscience — as it asks you pay a bit more and settle for a little less.
Neither of these sales pitches is challenge free, of course. And, for now, both foldables and fairer electronics remain curious niches.
But with the Fairphone 3 demonstrating that ethical can feel so normal it doesn’t seem beyond the pale to imagine demand for electronics that are average in performance yet pack an ethical punch scaling up to challenge the mainstream parade of copycat gadgets.
Joichi Ito, the embattled director of the M.I.T. Media Lab, has stepped down according to a statement by MIT’s president, L. Rafael Reif. The news was first reported by The New York Times, which had received a copy of an email sent by Ito to university provost Martin A. Schmidt.
“After giving the matter a great deal of thought over the past several days and weeks,” the now-former director writes, “I think that it is best that I resign as director of the media lab and as a professor and employee of the Institute, effective immediately.”
In addition to resigning as director, Reif’s statement also confirmed that Ito resigned as a professor of the university.
The ‘matter’ to which the letter refers to is Ito’s reported connections to Jeffrey Epstein. The financier died in prison by hanging on August 10, following an arrest a month prior on federal charges of sex tracking minors.
Ito was among several high profile and powerful people whose alleged ties to the disgraced billionaire came into sharp focus following his arrest. In the immediate aftermath of that arrest, it came to light that the MIT Media Lab and Ito personally received funds from Epstein, to which Ito apologized in an August 15th letter.
The allegations against Ito intensified overnight following a report by Ronan Farrow in The New Yorker that Ito’s engagement of Epstein were far deeper than had been previously been acknowledged. According to emails and documents discovered by Farrow, Ito and MIT Media Lab’s head of development, Peter Cohen, worked in tandem to conceal Epstein’s contributions from MIT’s central fundraising office, such as by marking donations anonymous and keeping his name out of disclosure statements.
Ito has long stood firm that the facts of his relationship with Epstein have been misreported. In an email to the Times, Ito said that the New Yorker piece was “full of factual errors.”
In response to Farrow’s piece, M.I.T, president L. Rafael Reif in today’s statement said:
Because the accusations in the story are extremely serious, they demand an immediate, thorough and independent investigation. This morning, I asked MIT’s General Counsel to engage a prominent law firm to design and conduct this process. I expect the firm to conduct this review as swiftly as possible, and to report back to me and to the Executive Committee of the MIT Corporation, MIT’s governing board.
The MIT Media Lab is a storied research center with a long legacy of contributions to science, technology, and innovation. There are no indications yet on who might replace Ito.
In addition to the MIT Media Lab, Ito sits as a board director for The New York Times Company, where he sits on the company’s audit committee.
