Year: 2020

Tesla started Friday to furlough its sales and delivery workforce — with the least experienced employees bearing the brunt of the action — days after a companywide email announced salary cuts and reductions due to the COVID-19 pandemic.

Several employees, who work in sales and delivery and spoke to TechCrunch on condition of anonymity, reported they were on corporate calls in which more details of the furloughs were explained. Performance is less of a factor. Instead, experience and position is being used to determine who stays and who is furloughed. Delivery and sales advisors who have been with the company less than two years will be furloughed, according to sources.

CNBC reported earlier Friday that furloughs would impact half of Tesla’s U.S.  delivery and sales workforce. TechCrunch was unable to verify the total number of sales and delivery employees who would be impacted.

The furloughs also come a little more than a week after the end of the quarter, a typically busy time for delivery staff who try to meet lofty internal goals. COVID-19 hampered delivery efforts, although customers were still reporting deliveries in California, New York and other states.

The furlough calls have been expected since an internal email sent April 7 by Tesla’s head of human resources Valerie Workman informed employees that the company would be cutting pay for salaried employees and furloughing others.

It wasn’t clear, until Friday, exactly who might be affected.

The internal email, which was viewed by TechCrunch, told employees that production at its U.S. factories would be suspended until at least May 4 due to the COVID-19 pandemic, requiring the company to cut costs.

Salaried employees will have pay reduced between 30% and 10%, depending on their position. The salary reductions are expected to be in place until the end of the second quarter, according to the email. The salary cuts and furloughs will begin April 13. Employees who cannot work from home and have not been assigned critical onsite positions will be furloughed until May 4, according to the email.

The mass die-off of coral reefs due is a catastrophe of global proportions, but the sheer scale of their success as organisms has lessons for science. Case in point: these 3D-printed “bionic corals” from Cambridge researchers that are more than scaffolds for fragile microorganisms — they’re built out of them.

If 3D-printed corals sound familiar, that’s because a couple years ago some other researchers suggested using structures printed to resemble the complex shapes of reefs as solid bases on which new corals and other animals could grow. It’s a good idea, but there’s more to a reef than a solid base.

Corals are in fact a highly evolved symbiosis between the coral organisms themselves and algae that live inside them. The algae use photosynthesis to power the creation of sugar for their host, and the coral provide a safe living environment — and, interestingly, are also highly efficient at collecting and redirecting light. This partnership has been fruitful for millions of years, though rising ocean temperatures and acidity have upset the delicate balance necessary for success.

The team at Cambridge realized that to successfully imitate the coral micro-ecosystem, they’d need to replicate that special quality of capturing sunlight and diffusing it within for use by resident algae. To do so, they studied the structure of corals closely and worked to remake it at a microscopic level. But instead of using an ordinary durable substrate, they created a sort of living gel.

“We developed an artificial coral tissue and skeleton with a combination of polymer gels and hydrogels doped with cellulose nanomaterials to mimic the optical properties of living corals,” explained Cambridge chemist Daniel Wangpraseurt, lead author of the paper in which the technique is described. Algae were infused into the mixture as well, so the researchers were essentially printing living matter.

That kind of technique is already being tested and used for medical purposes — printing part of an organ or tissue for implantation, for instance. In this case it has to be printed not with a specific large-scale shape, but with an extremely complex internal geometry that maximizes the reach of light hitting the surface. This has to be done very quickly or the algae will die from exposure.

The resulting bioprinted structure is an ideal home for the algae, producing growth rates many times the speed of an ordinary medium. That doesn’t mean the next step is growing corals super-fast — in fact, there’s no reason to think this will actually lead to coral restoration. On the other hand, this type of simulation could lead to a better understanding of the ecosystem in which the coral-algae partnership thrives, and how it can be nurtured.

In the meantime the promise of multiplying algae growth speeds has commercial appeal today, and a startup called Mantaz has been founded to pursue more near-term uses of the technology.

VOX Space, the Virgin space subsidiary dedicated to government launches, has scored a valuable new contract with the U.S. Space Force and is about to move from testing to full operations, the company announced today.

The Space Force contract is for three launches and valued at $35 million. The company will be launching payloads for the Defense Department’s Space Test Program-S28, a set of technology demonstrations in low Earth orbit. More than 36 satellites will be launched, “enabling advancements in space domain awareness and communications and informing future developments of the USSF space architecture.”

Those launches, like others planned for the U.K. and Israeli governments, aren’t exactly imminent; VOX is still in the testing phase, but expects to put payloads into orbit come 2021. (I’ve asked for more information on this and will update if I hear back.)

VOX and Virgin Orbit differ from most other launch providers in that their launch vehicles consists of a rocket strapped to the belly of a 747. This promising but unproven technique could enable a highly mobile and responsive launch infrastructure, taking off from pretty much anywhere with a runway.

After years of engineering and tests, Cosmic Girl (that’s the plane) and LauncherOne, the rocket stage that will take the payload to orbit, are almost ready for their debut.

The company is planning one last rehearsal in the form of a “cryogenic captive carry flight,” in which everything is almost exactly as it would be during a real launch, including supercooled liquid in the rocket’s fuel tanks, but they stop short of detaching and firing the rocket’s engines. The full burn and first orbital payload will saved for the Launch Demo, which is planned for later this year.

Of course the global pandemic hasn’t made things easy on the company. In a blog post signaling readiness for the next test, the company explained:

As the pandemic reached our home in California, we sent all of our staff home with full pay, giving them a week to prepare for the many changes that were to come for them and their families — and giving ourselves all the time we needed to design an entirely new way of working.

We reconfigured our Mission Control. We re-wrote procedures for our technicians on the shop floor and at the test site in order to meet social distancing requirements. We were already accustomed to using Personal Protective Equipment during many of our operations — but now we are ramping up our standards to match the latest guidelines from the CDC and other leading medical experts. And of course, we are spending extra time regularly sterilizing every square inch of our manufacturing facility, constantly educating our staff, and much more.

With a robust plan for safe operations in place, we began bringing essential teammates back on site — but continue to have as much as 90% of our staff working remotely.

As is the case for many industries, existing plans are being hugely disrupted and timing is up in the air, so to speak. But expect to hear more about VOX’s final tests and first commercial launches soon.

As the U.S. and much of the world hunkers down to slow the spread of the novel coronavirus, some virus-related conspiracy theories are having a heyday. Specifically, a conspiratorial false claim that 5G technology is linked to COVID-19 gained ground, accelerating from obscurity into the rattled mainstream by way of conspiracy theorists who’d been chattering about 5G conspiracies for years.

While there is scientific consensus around the basic medical realities of COVID-19, researchers are still filling in the gaps on a virus that no one knew existed five months ago. That relative dearth of information opens the way for ideas usually relegated to the internet’s fringes to slip into the broader conversation about the pandemic—a dangerous feature of an unprecedented global health crisis.

According to Yonder, an AI company that monitors online conversations including disinformation, conspiracies that would normally remain in fringe groups are traveling to the mainstream faster during the epidemic.

A report on coronavirus misinformation from the company notes “the mainstream is unusually accepting of conspiratorial thinking, rumors, alarm, or panic” during uncertain times—a phenomenon that explains the movement of misinformation that we’re seeing now.

While the company estimates that it would normally take six to eight months for a “fringe narrative” to make its way from the edges of the internet into the mainstream, that interval looks like like three to 14 days in the midst of COVID-19.

“In the current infodemic, we’ve seen conspiracy theories and other forms of misinformation spread across the internet at an unprecedented velocity,” Yonder Chief Innovation Officer Ryan Fox told TechCrunch. He believes that the trend represents the outsized influence of “small groups of hyper passionate individuals” in driving misinformation, like the 5G claims.

While 5G claims about the coronavirus are new, 5G conspiracies are not. “5G misinformation from online factions like QAnon or Anti-Vaxxers has existed for months, but is accelerating into the mainstream much more rapidly due to its association with COVID-19,” Fox said.

The seed of the false 5G coronavirus claim may have been planted in a late January print interview with a Belgian doctor who suggested that 5G technology poses health dangers and might be linked to the virus, according to reporting from Wired. Not long after the interview, Dutch-speaking anti-5G conspiracy theorists picked up on the theory and it spread through Facebook pages and YouTube channels already trafficking in other 5G conspiracies. Somewhere along the way, people started burning down mobile phone towers in the UK, acts that government officials believe have a link to the viral misinformation, even though they apparently took down the wrong towers. “Owing to the slow rollout of 5G in the UK, many of the masts that have been vandalised did not contain the technology and the attacks merely damaged 3G and 4G equipment,” The Guardian reported.

This week, the conspiracy went mainstream, getting traction among a pocket of credulous celebrities, including actors John Cusack and Woody Harrelson, who amplified the false 5G claims to their large followings on Twitter and Instagram, respectively.

A quick Twitter search reveals plenty of variations on the conspiracy still circulating. “… Can’t everyone see that 5G was first tested in Wuhan. It’s not a coincidence!” one Twitter user claims. “5G was first installed in Wuhan and now other major cities. Coincidence?” another asks.

In the past, 5G misinformation has had plenty of help. As the New York Times reported last year, Russian state-linked media outlet RT America began airing segments raising alarms about 5G and health back in 2018. By last May, RT America had aired seven different programs focused on unsubstantiated claims around 5G, including a report that 5G towers could cause nosebleeds, learning disabilities and even cancer in children. It’s possible that the current popular 5G hoax could be connected to disinformation campaigns as well, though we likely won’t learn the specifics for some time.

In previous research on 5G-related conspiracies, social analytics company Graphika found that the majority of the online conversation around 5G focused on its health effects. Accounts sharing those kind of conspiracies overlapped with accounts pushing anti-vaccine, flat Earth and chemtrail misinformation.

While the 5G coronavirus conspiracy theory has taken off, it’s far from the only pandemic-related misinformation making the rounds online lately. From the earliest moments of the crisis, fake cures and preventative treatments offered scammers an opportunity to cash in. And even after social media companies announced aggressive policies cracking down on potentially deadly health misinformation, scams and conspiracies can still surface in AI blindspots. On YouTube, some scammers are avoiding target words like “coronavirus” that alert automated systems in order to sell products like a powdered supplement that its seller falsely claims can ward off the virus. With their human moderators sent home, YouTube and other social platforms are relying on AI now more than ever.

Social networks likely enabled the early spread of much of the COVID-19 misinformation floating around the internet, but they don’t account for all of it. Twitter, Facebook, and YouTube all banned Infowars founder and prominent conspiracy theorist Alex Jones from their platforms back in 2018, but on his own site, Jones is peddling false claims that products he sells can be used to prevent or treat COVID-19.

The claims are so dangerous that the FDA even stepped in this week, issuing a warning letter to Jones telling him to cease the sale of those products. One Infowars video cited by the FDA instructs viewers concerned about the coronavirus “to go to the Infowars store, pick up a little bit of silver that really acts its way to boost your immune system and fight off infection.”

As it becomes clear that the disruptions to everyday life necessitated by the novel coronavirus are likely to be with us for some time, coronavirus conspiracies and scams are likely to stick around too. A vaccine will eventually inoculate human populations against the devastating virus, but if history is any indication, even that is likely to be the fodder for online conspiracists.

Instacart is adding more support roles to help its shoppers, customers, and retail partners, as the company faces unprecedented demand for its grocery delivery services due to COVID-19 shelter in place orders.

Today Instacart announced that it has doubled its Care team, from 1,200 agents to 3,000 agents. Care team employees will work on answering questions about how Instacart works, delivery issues, address mishaps, and other general woes.

The hiring news comes after Instacart shoppers organized a strike last month, demanding personal protective equipment, hazard pay, defaulted tips, and extended sick pay.

Instacart has been on a hiring spree as customer demand increased more than 300 percent year over year last week alone. Last month, the Instacart shopper community grew to 350,000 active shoppers, up from 200,000 two weeks ago.

Today, along with doubling its Care team, Instacart says it has also already hired and signed an additional 15,000 representatives that will join the team by May. With that, Instacart says it will have a Care team of about 18,000 members.

Some of Instacart’s new hires have been experienced support agents recently laid off in the flurry of cuts across the hospitality and travel industry.

With more demand, and thus more stresses on shoppers than ever before, the new members seem like yet another move by Instacart to try to pacify its growing shopper network. Last month, Instacart outlined an extended pay policy and contactless pay option. The company also introduced new product features aimed at making delivery windows for shoppers more flexible and fast.

Earlier this week, tip-baiting emerged as a grotesque tactic used by customers. Customers have been baiting Instacart shoppers to pick up their groceries by putting large tips on the bill through the app. Then, once the shopper drops off the groceries, customers are changing that tip to $0 or to a lesser amount.

The ability to change the tip price up to 14 days after grocery drop off is an option provided through the Instacart application.

According to Instacart, tip-baiting is rare. Customers either adjusted their tip upward or did not adjust tip at all on 99.5% of orders. The company also removed the “none” option in the customer tip section with hopes that customers will tip at minimum.

While these feature updates will likely have a positive impact, Instacart has still not banned customers from changing the tip after getting their groceries. The new roles will not be able to help shoppers with tip-baiting changes either since the tip is entirely up to the customer.

The company has also not changed the default tip minimum, as worker protests asked for tip defaults to be put at 10% during this time.

The surge of hires for Instacart’s Care team was not related to the tip-baiting issue, says the company, but instead related to the surge of demand for the service.

The two of us oversaw the U.S. Small Business Administration’s capital, investment, loan and innovation programs serving America’s small businesses. The nation is rooting for our 30 million small businesses. They employ more than half of the country and create most net new jobs, and 80% of them have less than 60 days cash on hand.

The world has never experienced dislocation of labor and business activity at this scale and speed. We applaud Congress and the White House for stepping up with a $2 trillion relief package, of which, $350 billion is being injected into America’s small businesses. Another $250 billion is being contemplated and negotiated as we write this.

Washington has been talking regularly with the financial sector, and for small business relief to be effective, banks of all sizes, fintechs, other tech companies, community banks and other capital conduits need to be involved in the solution. There is an urgent need to deploy the funds, and technology will be critical to that end.

Two encouraging developments  occurred on Wednesday: 1) SBA launched a new AWS-powered gateway for a streamlined lender entry point and 2) an application for non-bank, non-insured (read: fintech) lenders was made available. Good steps for sure, but retrofits always come with limitations at their root.

Looking back to move forward, the crisis of 2008 was in many ways a “dress rehearsal” of what we are experiencing now. While there are some similarities, the pandemic’s massive toll on virtually every sector of the economy is happening simultaneously, as evidenced by the fact that 17 million people have filed for jobless claims.

The financial crisis was driven by excess risk in the financial system whose shock rippled through our economy with some level of predictability. The number of exogenous factors of the pandemic’s effect on our economy are more interconnected, more widely spread and faster to hit than those in 2008.

This 21st century problem requires 21st century solutions, and that requires fresh thinking, from policy-to-execution. The large part of our economy that lives at the intersection of small business and the financial system is expecting this thinking and execution.

It must be pointed out that some constraints and limitations of implementing the CARES Act are not regulatory in nature — they are born out of legacy technologies that slow banks down. The antiquated systems of our government agencies, such as SBA’s much talked about and clunky E-Tran system, do not help either.

Government agencies, let alone their systems, were not built to deal with anything of this magnitude and urgency. But the inherent scalability, penetration, infrastructure, algorithmic capability and plumbing of financial technology should be brought to bear, and now! More on this below.

The financial system has significant tech adoption lags, organizational inertia and regulatory constraints — all contributing to the chaotic nature of the programs’ implementation. The design of a potential fourth phase of relief should take this into account. While pumping more money into small businesses is a good decision, the process and its underpinning needs to be improved.

We want regulators and agencies to help minimize the impact to American small businesses and implement the CARES Act in the spirit of what Congress intended. We don’t believe much cash has reached taxpaying citizens or small businesses as of this writing. According to the latest figures, SBA has guaranteed 25% of the relief. While this is an encouraging marker, it is still a small fraction of the $350 billion.

Probably more important for people to understand is that when banks secure loan guarantees, that does not immediately translate to funded loans injecting cash into small businesses.

For cash to move, a few things would help smooth the glide path from CARES Act to small businesses: 1) finalizing definitive guidance on bank notes; 2) enhancing secondary market liquidity; 3) developing a 21st century digital interface for more streamlined touch points for all stakeholders; and 4) opening the pathway to new players, including fintech companies as service providers, rails or lenders themselves.

This is important because SBA has been tasked to increase its capacity by a factor of at least 50. All of its credit programs combined put out $25 billion a year. The task at hand: $350 billion in 8-12 weeks. We know SBA has been working 24×7 — along with Treasury, FRB and other agencies — on systems, technology and execution, but there are real friction points working against solving the problem at hand.

The Federal Reserve’s liquidity backstop for SBA loans is welcome news, but it will take time to develop. Equally welcome news is FDIC’s easing on community bank leverage ratios. Regulators are considering relaxing additional prudent and temporary requirements and limits. This all assists the endeavor, yet there are still unanswered questions keeping lenders of all stripes on the sidelines.

The use of digital constructs and 21st century technology is highly needed due to the amount of dollars, number of loans and the short window we have to deploy them. We urge the SBA, other agencies and regulators to deploy energy and resources to leverage digital finance and financial technology.

Financial technology can help streamline applications, comply with know-your-customer and anti-money laundering rules and application automation. Technology also improves origination, underwriting, loan disbursement and loan servicing, and should be leveraged. Millions of small businesses, the most vulnerable ones in fact, don’t use bank credit. Yet many use Square to accept payments, for example. Fintech now has an open door to participate — good! We encourage regulators to fully leverage the collective capabilities of technology.

Not everyone has a printer, let alone the ability to walk into a bank — but most small businesses and their owners have mobile phones and a digital footprint. A number of fintech companies provide technology to banks themselves, and in those cases, banks should use this time with alacrity to leverage those capabilities. To be clear, fintech is no longer an innovation experiment, given the $200 billion that has been invested in financial technology since the financial crisis.

There is immeasurable pressure to get capital out on the one hand, but on the other, tight regulations create an equally forceful pull. COVID-19 has put a spotlight on the need to usher in a financial system that works for all, and technology is central to that. If there is a time to try new constructs, that time is now!

The problem with losing a job is that it is very hard to re-create. Preserving them, which is the guiding principle of all the recent government action — is energy better spent. Let’s focus on preserving jobs and providing relief to our economy’s beating heart — small businesses.

Earlier this week TechCrunch caught up with Union Square Ventures‘ (USV) Albert Wenger. Wenger, a managing partner at the venture firm, is well-known in the New York startup scene. USV has invested in former startups like Twitter, Twilio, Etsy and Cloudflare.

TechCrunch is touching base with a number of investors during the COVID-19-driven economic slowdown. Everyone is already at home, in front of a computer, so why not get them on the phone? (Follow @TechCrunch for updates, we’re keeping the series alive over the next few weeks with more neat guests.)

We wanted to know what Wenger thought about the level of fear in his local market, and how much cash startups should hold during the COVID-19 era. On the latter point, Wenger noted that each company’s present situation is suitably diverse as to avoid any single rule, but implied that companies with healthy backers don’t have to hold as much cash, as they have access to more; the weaker a startup’s investing syndicate is, the more cash it should hold, as that might be all the money it has access to.

We also took time to talk about PPP loans, and what types of startups should apply for them, a subject that Wenger has written about. There’s a moral point in the discussion that’s worth understanding.

We also took a number of questions from folks tuned in on Zoom during the call and generally had a good time. We’ve preserved the audio, so take a listen. If you wanted to see the video of TechCrunch’s Jordan Crook and Alex Wilhelm talking to Wenger, every one of the three in a different state, you missed out. Come to our next public Zoom!

The recording

Pangea.app, a Providence, Rhode Island-based startup has raised a $400,000 pre-seed round, it told TechCrunch this week. The company’s new capital, raised as a post-money SAFE, comes from PJC, a Boston-based venture capital firm and Underdog Labs. Previously, Pangea.app raised money from angel investors.

The company links “remote college freelancers,” per its website, to businesses around the country. College students want paid work and resume-building experience, while businesses need help with piece-work that students can help with, like graphic design. Today, with colleges and universities closing due to COVID-19, students stuck at home, and many businesses leery about adding new, full-time staff, Pangea.app could find itself in a market sweet spot.

Some students that had work lined up for the summer are now unexpectedly free, possibly adding to the startup’s labor rolls. “I can’t tell you how many students I’ve spoken with who have had summer internships and on-campus jobs canceled,” Adam Alpert, Pangea.app’s CEO and co-founder told TechCrunch, “we are filling an important gap helping them find short-term, remote opportunities that enable them to contribute while learning.”

Pangea.app CEO Adam Alpert and CTO John Tambunting

If its marketing position resonates as its CEO hopes, the firm could see quick growth. According to Alpert the company has seen five figures of contracts flow through its platform to date, and expects to reach a gross merchandise volume run rate that’s a multiple of its current size by the end of summer.

Some 250 schools have students on the platform; 60 schools have joined in the last three weeks.

Pangea.app makes money in two ways, taking a 15% cut of transaction volume and charging some companies a SaaS fee for access to its best-vetted student workers. The company had targeted a $500,000 raise, a sum that Alpert says he’s confident that his company can meet.

While the national economy stutters and the venture capital world slows, Pangea.app may have picked up capital at a propitious time; raising capital is only going to get harder as the year continues and it now has enough to operate for a year without generating revenue; it will generate top line, however, extending its cash cushion.

Pangea.app aspires to more than just growth. Alpert told TechCrunch that it has a number of development-focused hires on the docket for 2020, including a UI/UX designer and engineering talent. The company also intends to use its own platform to staff up over the summer to help speed up its own development.

Being based in Providence, not precisely the center of the world’s startup gravity, may have some advantages for Pangea.app. The company said that it is working to reach break-even profitability before it works on the next part of its business. It’s easier to do that in Providence where the cost of living and doing business is far lower than it is in larger startup hubs.

Update: The round was a pre-seed investment, not a seed deal as originally reported. The post has been corrected. 

So it has come to this. I haven’t set foot outside my apartment for a week and a half. YouTube yoga has been a kind of lifesaver, and I happened to have a largely untouched 30-pound kettlebell lying around. My Apple Watch has been mostly untouched, however. The stark realities of woefully underperforming exercise minutes and step counts are just too much on top of everything else.

Honestly, I scoffed a bit when a friend initially recommended an under-desk elliptical. But those were better days, when I was still able to take the bicycle out for a socially distant spin. Due to doctor’s orders, however, I now find myself unable to travel beyond the mailbox in my building lobby — and even that feels like tempting fate some days.

Now here I am, peddling away, writing a review of the Cubii Pro. It’s not a new product, exactly. But it’s certainly having its moment. In normal times, the device seems a silly bit of office “fitness” paraphernalia, designed to counteract the dangers of prolonged sitting we’ve frequently been warned against.

But if sitting was the new smoking in 2019, it’s simply the new reality in this era of self-quarantine. We’ll take our exercise wherever we can sneak it in — even if that means little more than walking between the desk and the kitchen most days. The Cubii line of products are by no means a replacement for more full-bodied exercise, but they’re a valiant attempt to help falling victim to complete atrophy.

As the name implies, the Pro is a step up from the standard Cubii that was launched via a Kickstarter campaign back in 2016. At $349, it’s an investment, with the biggest upgrades coming in the form of Bluetooth connectivity. There’s an app for iOS and Android that connects to third-party tracking software like Apple Health. That’s a pretty solid add-on, frankly, for those who’ve put a lot of stock in closing their Apple Watch rings.

The device ships mostly assembled. You’ll need to take it the last mile by attaching the pedals. And hey, free screwdriver. That’s simple enough. Honestly, the biggest headache about set up is charging the thing. The Pro is significantly larger and heavier than I’d initially anticipated, and it charges via microUSB. That means unless you’ve got a long cable, you’re going to have to find a spot to stick it near an outlet for an extended period. I don’t have floor outlets in my small apartment, so I had to get creative.

Charging takes a while, too. It’s best done overnight, if you can manage. The good news on that front, however, is it will stay charged for a while. I don’t anticipate having to charge it more often than every few weeks.

The size is also a constraint from the standpoint of use. The device’s length meant I had to pull my desk out from the wall a bit to use it. I also find myself having to sit back a bit, so as to avoid banging my knees on the bottom of the desk. Honestly, it’s probably best used while seated on a couch, watching TV (a laptop is too much to ask without a desk). If your office chair rolls as mine does, you’ll once again find yourself getting creative. The aforementioned kettlebell is getting even more use these days, as it currently sits between chair legs, hampering me from rolling backward with every peddle.

Those quibbles aside, I’ve mostly been enjoying my time with the product. The movement is smooth, the Bluetooth connection works well (though you may have to open the app to get it started) and there are eight resistance settings to keep things fresh. In other circumstances, I couldn’t imagine spending that much on this sort of product, but these are unique times. For those who still have trouble leaving the home even after things go mostly back to normal, it’s a nice, portable alternative to far pricier home exercise devices, with a solid little app to boot.

Arvind Krishna is not the only CEO to step into a new job this week, but he is the only one charged with helping turn around one of the world’s most iconic companies. Adding to the degree of difficulty, he took the role in the midst of a global pandemic and economic crisis. No pressure or anything.

IBM has struggled in recent years to find its identity as technology has evolved rapidly. While Krishna’s predecessor Ginni Rometty left a complex legacy as she worked to bring IBM into the modern age, she presided over a dreadful string of 22 straight quarters of declining revenue, a record Krishna surely hopes to avoid.

Strong headwinds

To her credit, under Rometty the company tried hard to pivot to more modern customer requirements, like cloud, artificial intelligence, blockchain and security. While the results weren’t always there, Krishna acknowledged in an email employees received on his first day that she left something to build on.

“IBM has already built enduring platforms in mainframe, services and middleware. All three continue to serve our clients. I believe now is the time to build a fourth platform in hybrid cloud. An essential, ubiquitous hybrid cloud platform our clients will rely on to do their most critical work in this century. A platform that can last even longer than the others,” he wrote.

But Ray Wang, founder and principal analyst at Constellation Research, says the market headwinds the company faces are real, and it’s going to take some strong leadership to get customers to choose IBM over its primary cloud infrastructure competitors.

“His top challenge is to restore the trust of clients that IBM has the latest technology and solutions and is reinvesting enough in innovation that clients want to see. He has to show that IBM has the same level of innovation and engineering talent as the hyper scalers Google, Microsoft and Amazon,” Wang explained.

Cultural transformation