Month: September 2020

05 Sep 2020

Facebook boots Patriot Prayer, a far-right group with a history of violence

Facebook removed accounts belonging to far-right group Patriot Prayer and its leader Joey Gibson on Friday, citing a new effort to eradicate “violent social militias” from the platform.

That effort emerged through a policy update in mid-August to the company’s rules around “Dangerous Individuals and Organizations.” Those changes resulted in the removal of a number of groups and pages linked to the pro-Trump conspiracy theory known as QAnon and some militia organizations, as well as groups and pages linked to Antifa, a decentralized left-leaning ideology that opposes fascism.

“… We have seen growing movements that, while not directly organizing violence, have celebrated violent acts, shown that they have weapons and suggest they will use them, or have individual followers with patterns of violent behavior,” Facebook wrote in a blog post addressing the push to remove potentially violent groups.

Patriot Prayer is a Vancouver, Washington-based far-right group known for staging confrontational events in left-leaning urban centers. Patriot Prayer’s events, which often result in violence and street fighting, have historically attracted individuals from other extremist groups, including the Proud Boys and the neo-Nazi group Identity Evropa.

Last year, Gibson pled not guilty to felony riot charges stemming from a street fight in Portland in which he “pushed a woman, taunted a number of people and physically threatened others,” according to court documents obtained by KOIN News.

The group attracted national attention this week when one of its supporters, Aaron “Jay” Danielson, was shot and killed on Saturday night after a caravan of armed Trump supporters drove into downtown Portland to clash with racial justice protesters who have been demonstrating in the city center for more than three months.

A suspect in Danielson’s death, Michael Reinoehl, was shot and killed Thursday night when a task force of federal agents and local law enforcement made an effort to apprehend him near Olympia, Washington. Reinoehl appears to have been a self-described anti-fascist and a regular attendee of Portland’s ongoing protests.

Screenshot via Facebook

TechCrunch reached out to YouTube and Twitter to see if those platforms have any plans to take action on Patriot Prayer’s accounts and will update this story if we learn more. The group has a Twitter account with more than 16,000 followers and the YouTube account “Joey Gibson Patriot Prayer USA” boasts more than 50,000 subscribers.

On Thursday, Gibson seemed to anticipate that the national attention might lead to his group being kicked off Facebook and encouraged Patriot Prayer supporters to follow him on the small conservative social network Parler.

“Facebook might ban me any minute,” Gibson wrote.

05 Sep 2020

One more week to save on TC Sessions: Mobility

Mobility may be one of the fastest moving technologies going, but procrastination is an equal-opportunity affliction that can strike even the most dedicated founders and devotees. Fortunately, Saint Expeditus, patron saint of procrastinators great and small, called in a favor.

Early-bird pricing for passes to TC Sessions: Mobility 2020, which takes place October 4-6, remains in effect for one more week. Find out where your got-up-and-go got-up-and went and buy your pass before the new deadlineSeptember 11 at 11:59 p.m. (PT). Boom! You just saved $100.

Now get ready to make the most of two programming-packed days. You’ll hear from the top leaders in mobility and transportation on a range of topics — from autonomous cars, AI and micromobility to investment trends, EV tech and navigating regulatory realities. Check out the agenda here.

How can attending TC Sessions: Mobility help your business? We could tell you, but why not listen to your contemporaries instead?

“People want to be around what’s interesting and learn what trends and issues they need to pay attention to. Even large companies like GM and Ford are there, because they’re starting to see the trend move toward mobility. They want to learn from the experts, and TC Sessions: Mobility has all the experts.” — Melika Jahangiri, vice president at Wunder Mobility.

“TC Sessions: Mobility isn’t just an educational opportunity, it’s a real networking opportunity. Everyone was passionate and open to creating pilot programs or other partnerships. That was the most exciting part. And now — thanks to a conference connection — we’re talking with Goodyear’s Innovation Lab.” — Karin Maake, senior director of communications at FlashParking

We’re mixing things up a bit this year (in addition to going all-virtual) by adding a pitch night competition. We’re looking for 10 outstanding early-stage mobility startups — from anywhere in the world — to deliver their best one-minute pitch on October 5. Five of them will go on to the finals and pitch from the main stage at Mobility 2020 in front of thousands of TC viewers — press, industry leaders and VCs. If you want to be considered, submit this application before September 15. Good luck!

Do not disappoint Saint Expeditus. Buy your TC Sessions: Mobility pass before September 11 at 11:59 p.m. (PT), save $100 and grab yourself a double handful of opportunity.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2020? Contact our sponsorship sales team by filling out this form.

04 Sep 2020

Daily Crunch: Peloton might expand its product lineup

Peloton’s product lineup is both getting cheaper and more expensive, Nintendo announces a new retro device and Palantir reveals more about its governance plans. This is your Daily Crunch for September 4, 2020.

The big story: Peloton might expand its product lineup

Peloton is preparing to add new products at both ends of its pricing range, according to a report in Bloomberg.

Specifically, it’s planning to add an entry-level treadmill that would retail for less than $3,000, as well as a higher-end bike, called the Bike+, which could serve as a centerpiece for a home gym that also supports strength training and other workouts. Meanwhile, Peloton would also drop the price for its existing bike to under $1,900.

Altogether, this sounds like a smart way to both lower the price of entry while also creating new products for people who don’t feel safe going to the gym (assuming it’s open at all) during the pandemic.

The tech giants

Nintendo is remaking the first portable gaming system it ever built —  For nearly a decade before Nintendo released the iconic Game Boy, it was making the Game & Watch, which it’s now planning to re-release in a limited edition.

WhatsApp reveals six previously undisclosed vulnerabilities on new security site — The vulnerabilities are being reported on a new, dedicated security advisory website.

Google pushes Europe to limit ‘gatekeeper’ platform rules — Google has made its pitch to shape the next decades of digital regulation across the European Union.

Startups, funding and venture capital

In amended filing, Palantir admits it won’t have independent board governance for up to a year — Palantir’s model is unique in allowing founders to have a commanding vote even if they were to sell their shares.

Yandex spins out self-driving car unit from its Uber JV, invests $150M into new company — The move comes amid reports that Yandex and Uber were eyeing up an IPO for their joint venture MLU last year.

Teemyco creates virtual offices so you can grab a room and talk with colleagues — The company wants to foster spontaneous interactions and casual collaboration with a room-based interface.

Advice and analysis from Extra Crunch

3 views on the future of geographic-focused funds — Natasha Mascarenhas, Danny Crichton and Alex Wilhelm of the TechCrunch Equity crew discuss the future of geographic-focused funds, given the uptick of remote investing.

Brands that hyper-personalize will win the next decade — Personalizing the experience is a start, but it isn’t the end.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Stocks are selling off again, and SaaS shares are taking the biggest lumps — Stocks, it turns out, can go down, and they can do so very quickly.

Low-cost fitness bands see a resurgence in interest amid the pandemic — While wearable fitness devices saw an uptick in shipments in North America for Q2, the overall dollar amount of the market remained steady, according to new numbers out of Canalys.

NSA’s Anne Neuberger to talk cybersecurity at Disrupt 2020 — Neuberger took the helm at the NSA’s newly created Cybersecurity Directorate a year ago.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

04 Sep 2020

AI-drawn voting districts could help stamp out gerrymandering

Gerrymandering is one of the most insidious methods out there of influencing our political process. By legally changing the way votes are collected and counted, the outcomes can be influenced — even fixed in advance for years. The solution may be an AI system that draws voting districts with an impartial hand.

Ordinarily, districts that correspond to electoral votes within a state are drawn essentially by hand, and partisan operatives on both sides of the aisle have used the process to create distorted shapes that exclude hostile voters and lock in their own. It’s so effective that it’s become commonplace — so much so there’s even a font made out of gerrymandered districts shaped like letters.

What can be done? Automate it — at least partially, say Wendy Tam Cho and Bruce Cain in the latest issue of Science, which has a special section dedicated to “democracy.” Cho, who teaches at the University of Illinois at Urbana-Champaign, has been pursuing computational redistricting for years, and just last year was an expert witness in an ACLU lawsuit that ended up overturning Ohio’s gerrymandered districts as unconstitutional.

In an essay explaining their work, they summarizes the approach thusly:

The way forward is for people to work collaboratively with machines to produce results not otherwise possible. To do this, we must capitalize on the strengths and minimize the weaknesses of both artificial intelligence (AI) and human intelligence.

Machines enhance and inform intelligent decision-making by helping us navigate the unfathomably large and complex informational landscape. Left to their own devices, humans have shown themselves to be unable to resist the temptation to chart biased paths through that terrain.

There are effectively an infinite number of ways you could divide a state into a given number of shapes, so the AI agent must be primed with criteria that limit those shapes. For instance, perhaps a state doesn’t want its districts to be any larger than 150 square miles. But then they must also account for shape — you don’t want a snakelike district slithering around the margins of others (as indeed occurs often in gerrymandered areas), or one to be enveloped by another. And then there are the innumerable historical, geographical, and demographic considerations.

This illustration from Cho and Cain's article shows a simplified version of a districting problem showing how partisan districts can be created depending on who's drawing them.

This illustration from Cho and Cain’s article shows a simplified version of a districting problem showing how partisan districts can be created depending on who’s drawing them. (Image credits: Cho/Cain/Science)

In other words, while the rationale for drawing must be set by people, it is machines that must perform “the meticulous exploration of the astronomical number of ways in which a state can be partitioned.”

Exactly how this would work would be up to the individual state, which will have its own rules and authorities as to how district maps are drawn. You see the problem immediately: We have entered politics, another complex landscape through which humans tend to “chart biased paths.”

Speaking to TechCrunch, Cho emphasized that although automation has potential benefits for nearly every state process, “transparency within that process is essential for developing and maintaining public trust and minimizing the possibilities and perceptions of bias.”

Some states have already adopted something like this, she pointed out: North Carolina ended up choosing randomly from 1,000 computer-drawn maps. So there is certainly a precedent. But enabling widespread use means creating widespread trust — something that’s in mighty short supply these days.

Mixing tech and politics has seldom proved easy, partly because of the invincible ignorance of our elected officials, and partly a justified distrust of systems that are difficult for the average citizen to understand and, if necessary, correct.

“The details of these models are intricate and require a fair amount of knowledge in statistics, mathematics, and computer science but also an equally deep understanding of our how our political institutions and the law work,” Cho said. “At the same time, while understanding all the details is daunting, I am not sure this level of understanding by the general public or politicians is necessary. The public generally believes in the science behind vaccines, DNA tests, and flying aircraft without understanding the technical details.”

Indeed, few people worry whether the wings will fall off their plane, but planes have demonstrated their reliability over a century or so. And the greatest challenge for vaccines may be ahead of us.

“Society seems to have a massive trust deficit at the moment, a fact that we must work hard to reverse,” Cho admitted. “Trust should be and must be earned. We have to develop the processes that engender the trust.”

But the point stands: You don’t need to be a statistician or machine learning expert to see that the maps produced by these methods — peer reviewed and ready to put to use, it should be said — are superior and infinitely more fair than many of those whose boundaries as crooked as the politicians who manipulated them.

The best way for the public to accept something is to see that it works, and like mail-in voting, we already have some good points to show off. First, obviously, is the North Carolina system, which shows that a fair district can be drawn by a computer reliably, indeed so reliably that a thousand equally fair maps can easily be generated so there is no question of cherry-picking.

Second, the Ohio case shows that the maps can provide a fact-based contrast to gerrymandered ones, by showing that their choices can only be explained by partisan meddling, not by randomness or demographic constraints.

With AI it is usually wise to have a human in the loop, and doubly so with AI in politics. The roles of the automated system must be carefully proscribed, their limitations honestly explained, and their place within existing processes shown to be the result of careful consideration rather than expediency.

“The public needs to have a sense of the reflection, contemplation, and deliberation within the scientific community that has produced these algorithms,” said Cho.

It’s unlikely these methods will enter wide use soon, but over the next few years as maps are challenged and redrawn for other reasons, it may (and perhaps should) become a standard part of the process to have an impartial system take part in the process.

04 Sep 2020

DoD reaffirms Microsoft has won JEDI cloud contract, but Amazon legal complaints still pending

We have seen a lot of action this week as the DoD tries to finally determine the final winner of the $10 billion, decade long DoD JEDI cloud contract. Today, the DoD released a statement that after reviewing the proposals from finalists Microsoft and Amazon again, it reiterated that Microsoft was the winner of the contract.

“The Department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft’s proposal continues to represent the best value to the Government. The JEDI Cloud contract is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract that will make a full range of cloud computing services available to the DoD,” The DoD said in a statement.

This comes on the heels of yesterday’s Court of Appeals decision denying Oracle’s argument that the procurement process was flawed and that there was a conflict of interest because a former Amazon employee helped write the requirements for the RFP.

While the DoD has determined that it believes that Microsoft should still get the contract, after selecting them last October,  that doesn’t mean that this is the end of the line for this long-running saga. In fact, a federal judge halted work on the project in February pending a hearing on an on-going protest from Amazon, which believes it should have won based on merit, and the fact it believes the president interfered with the procurement process to prevent Jeff Bezos, who owns the Washington Post from getting the lucrative contract.

The DoD confirmed that the project could not begin until the legal wrangling was settled. “While contract performance will not begin immediately due to the Preliminary Injunction Order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform,” the DoD reported in a statement.

While it takes us one step closer to the end of the road for this long-running drama, it won’t be over until the court rules on Amazon’s arguments.

04 Sep 2020

VW’s all-electric ID.4 will use interior lighting to communicate with the driver

Newly released teaser images of Volkswagen’s upcoming all-electric ID.4 compact SUV reveals an interior that leans in on tech such as touchscreens and ambient lighting used to talk to the driver without erasing every toggle or knob from automotive’s yesteryear.

In short: the ID.4 appears to have struck a balance between stark minimalism and a shepherd’s pie of toggles, switches and touchscreens. Could this be the Goldilocks story of the EV world? A few images can’t answer that question. Luckily, the ID.4, and the all the details about it, will be revealed at the end of the month.

Until then, these images are the first hints about what the ID.4 interior will look like and how it might operate. The stakes are high for Volkswagen with this latest vehicle. The ID.4 is part of the company’s plan to invest €11 billion euros ($13B) in electric mobility by 2024 as part of its Transform 2025+ strategy.

The ID.4 is the second electric vehicle to use the German automaker’s MEB platform, a flexible modular system — really a matrix of common parts — for producing electric vehicles that VW says make it more efficient and cost-effective. And it’s the first ID -badged vehicle to head to North America. The first vehicle under the label, the ID.3, will only be sold in Europe.

Inside the ID.4

Volkswagen emphasized Friday in its release that it has taken advantage of the extra space the electric platform has provided. And that seems to bear out, at least based on these few images.

Looking inside, there are two digital screens. One is located in the line of sight of the driver and another larger touchscreen is in the center. The height of center console is worth noting. It rises above the dashboard, perhaps in an effort to keep the driver from having to look over and down at the screen. It’s difficult to tell from the image, but it appears that the bottom of this touchscreen might have a few physical toggles as well.  

Volkswagen ID.4 interior

Image Credits: VW Group

There are physical buttons to the right of the steering wheel, which appear to control the active driver assistance systems. The steering wheel also a few buttons for the driver assistance system, volume control and to activate voice commands.

Volkswagen ID.4

The first interior shot of Volkswagen’s upcoming all-electric ID.4 vehicle.

Volkswagen leaned into the ambient lighting, namely a light strip below the windscreen. The automaker calls it ID. Light, suggesting this feature will show up in other ID brand vehicles. The ID. Light is designed to “support” the driver, signaling when the vehicle’s drive system is active and that the car has been unlocked or locked, for example. The light strip also signals braking prompts and incoming phone calls, and will blink to recommend a lane change.

The automaker has also updated the key to a slick looking fob with three buttons to lock and unlock the doors and trunk. For those less familiar with Volkswagen passenger vehicles, the keys have traditionally had a flip design.

Volkswagen ID.4 key fob

Image Credits: VW Group

Volkswagen said the ID.4 will also come with an option for a panoramic sunroof and the two future ID.4 limited edition models be available with seat covers made from animal-free materials. These vegan seat materials are constructed of a combination of leatherette and ArtVelours, a microfibre material that consists of around 20% recycled PET bottles, according to the company.

The ID.4 will be produced and sold in China, Europe and the U.S. Production is beginning at the Zwickau manufacturing plant, which VW has invested some €1.2 billion ($1.4 billion) in to convert it to a facility that will only produce electric vehicles. By next year, the Zwickau plant will be producing 300,000 electric vehicles annually.

Two factories in China will begin production of the ID.4 this year, Thomas Ulbrich, a VW Group board member responsible for e-mobility said last month. The company’s factory in Chattanooga, Tennessee will start ID.4 production in 2022.

04 Sep 2020

Brands that hyper-personalize will win the next decade

When people reach out to customer service, they’re seeking more than a solution to their immediate problem. They want empathy and understanding. What they’re often met with is a queue.

Nothing frustrates people more than calling customer support and getting stuck in a loop. According to a study by Vonage, 61% of consumers feel interactive voice response (IVR) actively poisons the customer experience — and only 13% found it more helpful than calling a human directly.

Like many solutions, IVR falls short in personalizing the customer experience (CX). A customer calls in for a specific task like paying a bill and instead cycles through a one-size-fits-all menu that in reality fits nobody. Experiences like this clearly indicate to customers a brand doesn’t care about them as a person, only as a case number.

Personalizing the experience is a start, but this isn’t the end. Customers will expect a one-on-one interaction the moment they enter your customer service channel. To make that happen, AI and analytics are creating scalable opportunities to show your customers how much they matter to you. Brands taking advantage of that opportunity can create unrivaled CX that sets them far ahead of their competition.

The personalization buzzword

Personalization has become a popular buzzword in recent years, but true personalization is much harder to attain than many companies realize. That was the case in 2016 when companies first hopped on the chat bandwagon. The potential for a new communication method was there, but the one-size-fits-all approach companies took in developing their interaction platforms created more problems for customers than it solved.

What they missed is how to create digital experiences in which customers converse with automation that adapts based on user context. Information like their product or service history and preferences should be pulled up the moment a customer engages. Data on disposition, tone, sentiment and stated intent should influence how the customer moves through the system and reaches their desired end goal. That navigation should be effortless and go well beyond text-based communications, including immersive UX options like maps, surveys, carousel selections and more — all in a spirit of lowering the cognitive weight for the customer.

04 Sep 2020

3 views on the future of geographic-focused funds

For many investors, the coronavirus has effectively taken geography out of the equation when it comes to vetting new opportunities.

While this dynamic opens up startups to more investment opportunities, venture capital firms that focus on a specific region are in a thornier spot. The competitive advantage they once had when raising — the notion that they’re focused on an area no one else is — is potentially threatened.

Natasha Mascarenhas, Danny Crichton and Alex Wilhelm of the TechCrunch Equity crew discussed the future of geographic-focused funds given the uptick of remote investing:

  • Natasha: Early-stage regional funds can win if they remain focused
  • Alex: Geo-focused venture funds will be weakened, but won’t die
  • Danny: Geo-focused venture funds are dead (and should never have existed)

Natasha: Early-stage regional funds can win if they remain focused

Since 2014, Steve Case and his team have made an annual bus trip across the country to meet startups in emerging startup hubs. Five days, five cities, and at least $500,000 of investment dollars given to startups. Case would even offer to fly out promising and hard-to-reach startups to have them join the trip.

The Rise of the Rest fund, with over $300 million in assets under management, has invested in over 130 startups across 70 cities, including Austin, Chicago, Detroit, Los Angeles, New Orleans, and Washington, D.C.

04 Sep 2020

Local governments that embrace digital services during challenging times can make real change happen

It has been a hard year. We wake up every morning to new developments in the tragedies of the moment spanning a pandemic, the greatest unexpected loss of life since 9/11, national civil unrest, natural disasters and a looming economic collapse.

In the face of these developments, a completely understandable message from government agencies to the public might be: We can’t serve you right now. Please take a number and we’ll get back to you as soon as possible.

But as we know now, this is an unacceptable path to successfully, and proactively, addressing the increasing needs of citizens facing public health risk and economic uncertainty. In fact, in the past few months, Americans have exhibited an unquenchable thirst for fast, effective government services and information. Resident demands of local government and community organizations are rising. Their voices are louder than ever before. People are bringing a new civic experience to the forefront of local governments that’s delivered on their terms — and aligned with growing demand for always-on, 24/7 information and services.

A hallmark of 2020 (so far) has been global developments impacting people at a very local level. For instance, a pandemic sparked a massive shift in American civic engagement around issues like public health and racial equality. The past few months have reinforced what the real power of local government is: To efficiently offer services and information that directly impact people’s lives. For cities and municipalities, the question now becomes: How can local leaders embrace this new era of civic engagement in the world of COVID-19 to deliver digital solutions that help everyone meet the moment?

Build a digital public square for the people

In the United States, the COVID-19 pandemic has literally closed city halls and forced government agencies at all levels to rethink modernizing public sector work to digitally and equitably deliver citizen services. Mayors, city council members and local agency officials, in particular, need to embrace this complex moment in time as an opportunity to cultivate a more vibrant, straightforward, inclusive and participatory municipal experience. One way to do that is to invest in digital tools, technologies and talent that can help local governments develop online civic engagement and citizen service outlets. Platforms that not only offer needed government services, but also prioritize input from residents and encourage community dialogue guided by clarity, trust and accountability.

Service has always been at the core of local government. However, a main challenge facing public sector leaders today is how to transfer critical services online. More specifically, developing online services that allow people who no longer have the luxury of waiting in lines for in-person interactions to remotely register to vote, obtain or renew a permit, report downed power lines and more.

A recommended path toward solution(s): At the end of the day, citizens are consumers. They want around-the-clock access to government services and options for ways to interact with service providers that meet their needs while taking their personal comfort into account. For local government agencies in the midst of digital transformation, building convenience into in-house digital government offerings and solution procurements is crucial. Digital government service solutions must be designed — by agencies or contracted vendors — to be platform and device agnostic (or, at least, interchangeable) on the back end; taking an omnichannel approach that addresses the needs of citizens and agencies through web, mobile, social media and offline options on the front end.

Bring the value of local government home

An increased online presence of community members and remote workers during the pandemic offers municipalities a fresh and cost-effective opportunity to advance local government digital service. Until recently, seemingly table stakes actions like producing photos for identification cards, scanning important documents, digitizing forms and streamlining workflows and case management were only plausible if large government teams had the budget to purchase required technologies separately, then stitch them together. Budget and capacity-constrained communities were largely left in the dark.

The good news is that today’s cloud-based solutions are complete, affordable and scalable to communities of all sizes. The market features solutions that are purpose-built for local governments to integrate with legacy IT systems while transitioning traditionally in-person services to digital interactions. And it’s possible to tap these solutions to fuel America’s new, more active brand of civic engagement and service citizens rapidly.

Further, the advent of accessible and affordable (or free) digital engagement platforms now complements an expanding recognition among American society that truly impactful things can come from government sources. The shift in thinking has produced civic engagement defined not by a sprint to profits, as is the case in the private sector, but by the ability for a representative community to actually influence policy and shape citizen services delivery.

A recommended path toward solution(s): In addition to always-on capabilities, digital government platforms need to be able to deliver goods and services to citizens directly and without friction. Whether accessing a government assistance application or applying for a park permit, citizens want their requests fulfilled without complications or inefficiencies plaguing the process — and going all-virtual or mostly remote during COVID-19 has made this more important than ever. In response, agencies should invest in the creation of digital forums for two-way communication to capture feedback that accurately reflects the demands and needs of the local community at the individual household level.

Boost digital forum accountability and representation moving forward

Today’s elevated energy around civic engagement is a direct result of the pandemic, expanding consumer activism and recent protests against systemic injustice. This confluence of factors offers local governments a fleeting opportunity to move beyond simply observing vocal citizen activity across the country. There’s now an opening to build upon, and actively grow, levels of civic engagement and community trust over time.

It’s now possible for local governments to reach more citizens by expanding their networks of interested subscribers and combat misinformation while keeping every resident informed. Agencies can advance on both fronts by providing civic leaders a two-way forum that encourages them to share progress being made in policy and procedures. After all, interacting with governments should be as simple and transparent for everyone as checking a bank account balance or reordering coffee pods from Amazon.

A recommended path toward solution(s): Municipalities should jump at this chance to really listen to diverse community voices pushing for change — especially as some powerful people in government and society seek to quiet or ignore them. They should consider developing long overdue digital solutions that amplify diverse community voices, deliver critical services and help to inform people broadly. Citizens, for their part, should be able to easily provide feedback, share ideas and voice their pressing needs to public sector officials or representatives who can help residents feel secure, listened to and taken care of. Expanded civic engagement impact entails reaching more people through their preferred channels, whether that’s email, text or snail mail, and establishing a dialogue that converts to action.

I’m confident that local governments throughout the country can rise to today’s unprecedented challenges by providing digital civic engagement outlets built to elevate individual perspectives on policy issues and surface life experiences that, in turn, inform inclusive civic action and real change.

04 Sep 2020

Stocks are selling off again, and SaaS shares are taking the biggest lumps

It was just days ago that cries of “stocks only go up,” and “no it makes sense that Tesla is going up because it split” and other bits of unironic stupidity were the only thing you could read online about the equities markets. Today, and yesterday, that all went to hell.

Stocks, it turns out, can go down, and they can do so very quickly. And, yes, even Tesla can endure a strong slump, giving up tens of billions of dollars in market capitalization at the same time.

What’s going on? It’s impossible to point to a single thing as the reason, but it’s worth noting that the United States is still suffering from the business impacts of COVID-19, with high unemployment and other related issues plaguing the broader economic climate.

Update: While this piece was in edit, news broke in the FT and the WSJ that SoftBank — yes, that SoftBank — was at least partially responsible for the run-up in tech stocks due to some huge wagers. Obviously we’re still figuring this out, but I wanted to note it here given the above paragraph.

The U.S. had also seen its stock market set successive all-time highs in recent days. Perhaps the better question is why were things so good for so long before this particular two-day (so far) correction to the value of domestic — particularly domestically listed, technology-related — stocks?

And notably it’s the sub-cohort of tech companies that was expected to perform the best in the future that are taking the most lumps. Yes, SaaS and cloud shares, after enjoying a historic run that saw their revenue multiples stretch to what felt like a breaking point, are snapping back, giving back weeks’ worth of gains generated during earnings season (though concerns cropped up more recently).

Yesterday, the damage was severe:

  • Dow Jones Industrial Average: -808 points, or -2.8%
  • S&P 500: -126 points, or -3.5%
  • Nasdaq: -598 points, or 5%
  • SaaS and cloud stocks (via the Bessemer index): -8.2%

That’s a goddamn mess. And today is looking pretty awful as well, though the following results include material bounce-back from session lows:

  • Dow Jones Industrial Average: -381.3 points, or -1.35%
  • S&P 500: -69.5 points, or -2%
  • Nasdaq:  -403.2 points, or 3.5%
  • SaaS and cloud stocks (via the Bessemer index): -6%

Tech stocks are taking the worst hits. And inside of tech stocks, SaaS and cloud stocks are enduring even bigger declines. As we’ve noted that some tech shares have taken lumps when their growth has underwhelmed investors, perhaps we’re seeing the entire SaaS sector see their growth expectations slip?

Bulls may say that the above declines are merely a few weeks’ gains and that the accelerated digital transformation is still a key tailwind for SaaS. Bears may say that this is the start of a real correction in the value of tech shares that had become simply too expensive for their fundamentals. What we can say with confidence is that software shares are in a technical correction, and other equities cohorts that we care about are not far behind.

Monday is an off day for stocks. Let’s see what happens Tuesday and if the bleeding stops or simply keeps on letting.