Year: 2020

Shipt shoppers, which began organizing in February, are staging their first action today. Yesterday, a group of Shipt shoppers, who shop and deliver orders from Target and other stores, announced their plans to walk off today. The walk-off is in protest of the way Shipt has treated its shoppers amid the COVID-19 pandemic, Vice first reported.

“Unless you get tested for COVID-19 or you’re half dead, Shipt’s not going to care,” Iowa-based Shipt shopper Angie Kufner tells TechCrunch.

Kufner hasn’t been working for the past couple of weeks because she’s been feeling ill, but Shipt has not provided her with sick pay, even though Shipt provides workers diagnosed with COVID-19 up to two weeks worth of sick pay. Kufner’s experience is just one example of why shoppers are demanding the company extend that policy to include those who are immunocompromised or have a note from a doctor telling them to stay home. Currently, Shipt says it determines eligibility for sick pay on a case by case basis.

“I guarantee you there are a lot more people who have felt like crap,” Kufner says. “The stores are totally unsafe. It’s not worth the $6 they’re going to pay you to go in the store.”

In addition to extending the sick pay policy, shoppers at Ship are demanding hazard pay of $5 per order and personal protective equipment for everyone. Additionally, Shipt shoppers are demanding the company reinstate its original transparent pay structure, make tips transparent and stop exploiting new workers.

“To me, they’ve proven it’s profit over people,” Kufner says of Shipt and Target . “They don’t care about shoppers or the customers because at this point they’re putting customers at risk when these shoppers aren’t protected themselves inside the stores. It’s frustrating because Target and Shipt are both making a fortune with all the new customers and all the new orders and they’ve done almost nothing to support the shoppers.”

In an updated blog post yesterday, Shipt said all shoppers will be provided with gloves and a mask within the next two weeks. Shipt says it has also sent its most active shoppers information on how to claim a free kit that includes gloves and hand sanitizer.

Prior to the pandemic, Shipt shoppers had begun expressing their dismay toward the company. In January, Shipt started testing a new pay structure where, instead of basing it on cart size, Shipt takes into account the time it takes to complete and deliver an order.

Prior to the changes, shoppers had received a $5 flat rate and 7.5% of the total store receipt, one shopper, who asked to remain anonymous, previously told TechCrunch.

“We are losing money as shoppers at a ridiculous rate,” a shopper from Kalamazoo previously told TechCrunch. “A very good, close friend of mine told me in the three weeks since the new structure was implemented, she has lost the equivalent of a car payment. It is a lot of money. Our best guestimation is, we’re all losing about 30% or more. I did four orders this past weekend and I lost money on every single one.”

Now, Shipt workers have joined the likes of workers at Instacart, Amazon, Whole Foods and others that are demanding better protections during this global health crisis.

Amid strikes from workers at Instacart, the company began implementing some changes but still has yet to meet all of their demands. A few days ago, Instacart finally began offering shoppers face masks, hand sanitizers and thermometers. One day later, DoorDash said it was investing in getting more personal protective equipment for its delivery workers.

It’s now widely understood that gig workers are providing essential services during these times, as many cities have enacted shelter-in-place ordinances and as vulnerable people are remaining at home in order to reduce their risk of exposure to the virus.

“Shipt has lowered pay, used shoppers vehicles without fuel or maintenance reimbursement, ignored a faulty rating system, and never paid for healthcare or insurance,” one Shipt shopper said in a statement. “Now they are sending shoppers into stores during a pandemic with no pay increase, no PPE, and no guidance. Shipt is treating it’s shoppers as expendable while advertising to customers as a personal concierge service.”

In addition to the walk-off, organizers are calling for customers to boycott the app on Friday, April 10.

Last year, The Information reported that CNN was working on a new digital news service to compete with the likes of Apple and Facebook. Today, some of those plans are taking shape. The Turner-owned news broadcaster has acquired Canopy, an all-purpose content personalisation that uses human curation, on-device machine learning and differential privacy to help readers discover things they actually want to see, while at the same kind keeping personal data private. The startup will become an anchoring part of CNN’s upcoming news project.

Canopy was founded in 2018, and to date its only product and commercial example of how it would work was an app that it had launched itself called Tonic. That app, Canopy tells me, will be wound down over the coming months, as the team and assets of the Boston/Brooklyn-based startup are integrated into its new parent.

CNN is not disclosing any of the financial terms of the deal, except to confirm that it is a full acquisition of talent (15 people in all), IP and other assets. Canopy — which was led and co-founded by Brian Whitman, the former co-founder of Echo Nest (the content recommendation company that became the basis of Spotify’s recommendation engine after it acquired the company) 00 had raised $4.5 million from Matrix Partners and E14.

Nor is CNN talking much yet about its new project, currently codenamed “NewsCo”, except to say that it is a “news and information platform connecting users to trusted sources, storytellers and creators across a wide range of topics.”

The initiative is part of a bigger plan at the company to build new products and services to meet the tastes, interests and needs of current but also new consumers. In that, it underscores a bigger, and longer-term, push from across all of the media industry to chase and capture ever-elusive audience, and the money that comes with it in the form of advertising, paid subscriptions, and more.

That “more” in many cases, controversially, has included data, which is swapped and sold across a range of known and less-known entities. And it seems that here CNN is drawing a line to see how and if it can build a service that doesn’t cross it. At least, that seems to be the hope here.

“There has never been a more crucial time to help people discover trusted sources around topics and issues that matter most to them,” said Whitman in a statement. “We’re incredibly excited to join the team at CNN to build some amazing products for their millions of global users.”

It’s notable that this is not CNN’s first rodeo when it comes to making an acquisition of a startup focused on content personalisation. Way back in 2011, the company acquired Zite, another company with a similar aim, reading what you read and watch to help you find more articles like it.

From what I understand, that deal was made by a previous leadership team, in a time when there wasn’t a bigger plan for how and where it would fit into the bigger picture. Zite was eventually sold three years later to Flipboard.

“Timing, in life and in business, is everything,” a spokesperson at CNN told TechCrunch. “We didn’t get Zite quite right, because candidly, we didn’t have all the pieces in place at the time to be able to fully leverage the capabilities for which we acquired them. We made the right decision in selling Zite to Flipboard. It was the right outcome for everyone. And the lessons we learned helped us evolve as an organization.”

You might wonder why Canopy decided to sell up rather than partner, which had been the company’s original business model in building a recommendation engine that could be used for different kinds of content plays. The company notably had not picked up any customers that it’s talking about, nor had it raised money. It may be that it’s just too challenging to scale that kind of play as a standalone service if your aim is to be used by many.

“Our long term dream is to reach millions of people and help them navigate the increasingly complex world in a way that can only help them,” said Whitman in an emailed response. “This acquisition takes the big dream of Canopy and makes it much bigger. We’re going to build new ways for millions of people to connect with news and information while keeping their data safe and secure.”

Canopy had never released user numbers for Tonic, but it confirms that its data security expertise was part of the attraction for CNN, so expect to see more on that, with a product launch date “expected within a year,” Whitman said.

“This acquisition enables us to light up in a single transaction a proven, best-in-class team whose deep knowledge and skill sets would’ve taken many months or even years to assemble,” said CNN EVP & Chief Digital Officer Andrew Morse in a statement. “Canopy’s culture of fast-cycle, iterative software and product development will enable us to more rapidly realize our ambitions and deliver against our goals.”

The decade-old New Media Ventures investment fund, which backs startup businesses and non-profits developing technologies to improve access to government, said it is raising a “Crisis Innovation Fund” aiming to provide matching grants for startups advancing democracy and centering marginalized communities.

The fund will offer grants and investments of between $25,000 and $250,000 to entrepreneurs developing businesses and tech-enabled services focused on progressive causes, the fund said.

“COVID-19 will be one of the biggest economic, political, and cultural turning points of our lifetime — but what the future holds depends entirely on our collective actions in the coming months and years,” said Taren Stinebrickner-Kauffman, President, New Media Ventures, in a statement. “This is a moment of great uncertainty and fear, but also one of great altruism and entrepreneurialism. Our new Crisis Innovation Fund will resource the most promising COVID-19-relevant ideas that emerge from the 2020 Open Call.”

Focused on founders with direct experience of the problems facing people of color, LGBTQ, poor and vulnerable communities, as well as companies and organizations that are “shifting power, building movements and sparking civic engagement,” the NMV is opening up a rolling process for funding.

The annual open call to provide seed funding for organizations has previously resulted in $50 million in commitments over the organization’s ten-year history. Previous investments from the investor’s 85 strong roster of companies include nonprofit organizations and for-profit companies like: ActBlue Civics, TurboVote, Upworthy, Attentive.ly (acquired by Blackbaud), Crowdtangle (acquired by Facebook), and SumOfUs.

WorkClout, a graduate of the Y Combinator Winter 2019 cohort, announced today that it has shifted its focus from manufacturing automation to manufacturing performance support and has raised a $2.3 million seed round.

The funding was led by Spider Capital with participation from Y Combinator, Liquid 2, Soma Capital, Pioneer Fund, Mehta Ventures and several individual investors.

When the company launched last year, it was looking at helping customers drive operational efficiency in their processes, but WorkClout founder and CEO Arjun Patel says they were seeing that there was a ceiling in terms of how much efficiency they could squeeze out of work processes using software.

At that point, Patel decided to take a step back and do some research to figure out how WorkClout could best help manufacturing customers with its software-based solutions. After surveying 124 manufacturers, he says that he realized that these companies really needed help training front-line workers, an area he says is called performance support.

“We found that most of the companies were saying that employees are the biggest challenge that they have to face in terms of how to engage them better or how to empower them better, because ultimately they realize people, even if there is automation, are still the driving force for a lot of sectors,” Patel told TechCrunch.

Towards the end of last year, the company built a new tool to help customers train employees for complex front-line tasks. The workers might have a phone or tablet, which shows them how to complete each task, and gives them feedback as they move through a set of tasks. It also enables these workers to communicate with one another and with management about issues they are seeing on the line. Managers can monitor communication and see how workers are doing on a back-end system in the office.

“We gave them the ability to allow employees to capture and share critical information in real time on the factory floor, where the goal is to actually create standardized multimedia and training content for machines, processes and stations, allowing new and existing employees to get better insight into their work, and at the same time, allowing employees to communicate better about problems on the floor and reduce downtime,” he explained.

Patel recognizes that this is a difficult time to pivot, but says he believes it puts the company in a better position to succeed in the long term. He has cut the team from nine to five employees in an effort to run lean for the short term.

He hopes to begin hiring again in the fourth quarter this year or, at the latest, by Q1 next year. He plans to use that time to build out the product and prepare for a big go-to market push whenever the economy begins to rebound.

He sees this money giving him a long runway of 2.5 years with the company’s current burn and revenue rates, and that should give him enough time to wait out the current economic downturn.

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

We’ve dug into churn twice in the last week from an expert and data-based perspective. We’ve also spent a good amount of time talking to venture capitalists about how they are approaching today’s turbulent market.

This morning we’re adding to both conversations by bringing Menlo Ventures‘ Matt Murphy into the discussion. Murphy spent 16 years at Kleiner Perkins before joining Menlo Ventures in 2015. TechCrunch spoke with Murphy late last week, working to understand how startups should plan for what could prove a difficult Q2 and how churn expectations should adapt as the economy changes.

In Murphy’s view, Q1 startup results are likely to come in a bit better than some expect considering the how the quarter finished from a macroeconomic perspective. Q2, however, is a different beast. Murphy expects B2B startup growth to slow, which could make the world much harder for the cohort of startups with less than 18 months of cash; fundraising off slowing growth as valuations broadly dip is not a recipe for an enjoyable capital cycle.

So let’s talk about how Q2 is going to impact startups and how young companies might respond. After we get through the nitty-gritty stuff, I pulled a bit more from our interview as a treat, exploring what the Menlo Ventures investor thinks about the recent Notion deal, and how the firm’s portfolio is set up heading into a possible recession.

Planning for a turbulent Q2

Autonomous electric transportation startup Einride has taken a key step in its mission to deploy autonomous cargo pods on roads for commercial operations. The Swedish startup demonstrated its technology in use with one person remotely operating two pods at once, which is a fundamental part of their vision of multiple pods ultimately being overseen by one person essentially operating as a traffic controller.

The demonstration saw an operator oversee and remotely control the two driverless pods using a steering wheel controller and a surround view display using a number of monitors. The system demo shows how a pod can request that an operator take over manual control if it encounters an issue it can’t address via its onboard automated driving computer.

It’s a clever and practical way to bridge the gap between manually driven vehicles and fully autonomous transportation, while still changing the economics of fleet logistics. With a one-to-many model, Einride would be able to offer trucking companies big advantages in terms of costs and efficiencies, increasing the number of miles that can be driven without boosting headcount requirements. Plus, the electric drivetrains of the vehicles will add up to big fuel and ecological advantages when it comes to day-to-day operations.

Einride also says that its platform has the potential to change the dynamics of the profession of trucker, since it can provide comfortable, remote operations centers that replace long weeks on the road away form home. This could open up the industry to more potential employees and recruits, which is a crucial need since trucking has typically required more new drivers than the market could supply in the U.S. over the pas few years.

Einride’s demonstration included complex maneuvers including parking and pulling out from a busy transportation hub, and shows in practice the potential of their tech. The company announced a commercial trial with Coca-Cola’s official European bottling and distribution partner at the end of last year, and is continuing to work towards broad commercialization.

After a sharp Monday rally seemingly built on optimism that the impact of the global pandemic may have reached its zenith in Europe — and indeed that the United States might see a lower infection and mortality peak than some anticipated — shares once again rose this morning.

Here’s how the day looks a few minutes into the start of trading today, on this holiday-shortened week:

• Dow Jones Industrial Average: rose 886.67 at the open, or 3.91%, to 23,566.66
• S&P 500: climbed to 85.46, or 3.21%, to 2,749.14
• Nasdaq Composite: scaled 207.20, or 2.62%, to 8,120.44

Shares of SaaS and cloud companies, as measured by the Bessemer cloud index, were XXXX to start the day as well.

While the value of equities remain depressed from recent highs, yesterday’s close and today’s open have scrubbed quite a lot of red ink from the domestic market. However, volatility has been the only certainty for stock markets in recent weeks, so a few days’ trading should not be read as a longterm directional shift. Tomorrow could bring a selloff if the news turns.

Investors are hoping for a quick containment of COVID-19 and a rapid return to work, boosted by massive Federal stimulus and aid. It isn’t clear how realistic that scenario is, given rising unemployment and many states pursuing more weeks of shutdowns, and months of social distancing. How to value an economy that will either return to form slowly, or a bit more quickly than slowly, is hard. But, traders appear more sunny than not as they bid for shares today.

Earnings are next. Q1 2020 results are likely going to matter less than forecasts, so how companies talk about the future that investors are currently betting on and against will set the tone moving forward. Today, sitting between the start of the quarter, new unemployment claims data, and the real onset of earnings means that we’re in something of an information vacuum. And into such a lack of substance all sorts of optimism can blow.

Still, better positive thinking than negative, perhaps.

Just days after SoftBank announced that it would not consummate its $3 billion tender offer for WeWork shares that would have bought out some of the equity held by the company’s co-founder Adam Neumann along with venture capital firms like Benchmark and many individual company employees, the company is now retaliating, suing SoftBank over alleged breach of contract and breach of fiduciary duty.

In a press statement this morning, the Special Committee of WeWork’s board said that it “regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork’s minority stockholders.” WeWork’s Special Committee argues that SoftBank already received the benefits of the contract it signed last year, which included board control provisions. It’s demanding that SoftBank either complete the transaction, or offer cash to cover damages related to its scuttling of the deal.

Under the terms of the tender offer proposed in November last year, SoftBank would buy upwards of $3 billion in shares from existing shareholders with the transaction closing at the beginning of April. As part of the terms of that contract, the co-working company and SoftBank agreed to a set of performance milestones that WeWork agreed to meet in exchange for the secondary liquidity. Such terms are customary in most financial transactions.

SoftBank in its statement last week said that WeWork failed to meet a number of those performance requirements, and said that it was within its rights under the tender offer contract to walk away from the deal. WeWork’s financials have been rocked by the global pandemic of novel coronavirus, which has seen the company’s co-working facilities mostly closed worldwide as part of public health mandates for social distancing.

Given the disagreement between the parties, a lawsuit was all but inevitable.

SoftBank is WeWork’s largest shareholder, and if the tender offer had been completed, the Japanese telecom conglomerate would have owned roughly 80% of the co-working company.

The lawsuit was filed in Delaware Chancery Court. WeWork is more formally known as The We Company.

With in-person classes canceled, we’re about to start our online versions of Hacking for Defense and Hacking for Oceans (and here). The classes are built on the Lean Startup methodology: customer discovery, agile engineering and the business/mission model canvas. So how do our students get out of the building to do customer discovery when they can’t leave home? How do startups do it?

Reminder: What’s the point of talking to customers?

Talking to customers seems like a simple idea, but most founders find it’s one of the hardest things they have to do. Entrepreneurs innately believe they understand a customer’s problem and just need to spend their time building a solution. We now have a half-century of data to say that’s wrong. To build products people want and will really use, founders first need to validate the problem/need, then understand whether their solution solves that problem (i.e. finding product-market fit).

Finally, to have a better chance of a viable enterprise, they need to test all the other hypotheses in their business/mission model (pricing, demand creation, revenue, costs, etc.).

The key principles of customer development are:

1. There are no facts inside the building, so get the heck outside.
2. All you have are a series of untested hypotheses.
3. You can test your hypotheses with a series of experiments with potential customers.

Now with sheltering-in-place the new normal, we’ll add a fourth principle:

Austin-based SourceDay, which sells supply chain management software, said it raised $12.5 million in its latest round of financing.

The company developed software to manage the relationship between companies and the businesses they source raw materials from as part of their direct spending needs.

Baird Capital led the round with participation from existing investors including Silverton Partners, ATX Ventures and Draper Associates, the company said.

For companies dealing the supply chain shocks caused by the COVID-19 pandemic, supply chain management tools are more important than ever, according to the company.

“As businesses face unprecedented times, they are seeking faster answers to bigger challenges,” said Joanna Arras, Principal at Baird Capital and SourceDay’s newest board member, said in a statement. “More than ever, companies need resilient and agile supply chains. Poor supply chain visibility and inefficient collaboration will be crippling during this time of rapidly shifting demand. Baird Capital is proud to invest in SourceDay to help companies face these challenges head-on.”

The company counts over 6,000 manufacturers, distributors and suppliers among its customer base and said it would use the financing to further develop tools that can aid customers in their mitigation of supply chain risks.

“The COVID-19 pandemic is exposing the ways that outdated supply chain practices make manufacturers vulnerable,” said Tom Kieley, CEO, SourceDay, in a statement.

SourceDay is coming off a record-breaking year that saw the company add thousands of new customers and bringing the total amount of spending processed on its platform to over $66 billion. It now counts over 50 employees on staff since its launch in 2013.