Year: 2020

Tesla plans its next massive “gigafactory,” Google steps up efforts against COVID-19 and NEA raises a $3.6 billion fund. Here’s your Daily Crunch for March 11, 2020.

1. Tesla is eyeing Nashville for Cybertruck gigafactory

Tesla CEO Elon Musk tweeted Tuesday evening that the company is “scouting” locations to build a new U.S. “gigafactory” that will produce the Cybertruck and Model Y crossover. Musk didn’t provide further information in the tweets, but a source told TechCrunch that Nashville is on a short list of contenders.

Tesla broke ground on its first gigafactory on land near Reno, Nev. in 2014, creating a massive, 1.9 million-square-foot structure.

2. Google expands work from home recommendation to all North American employees, establishes ‘COVID-19 fund’

Last week, Google sent out a memo to staff recommending that Washington State-based employees work remotely, in order to mitigate the potential spread of COVID-19. Yesterday, the suggestion was dramatically expanded, in line with the spread of the virus. A new note from the company recommends similar action for employees across North America.

3. NEA, venture capital’s quiet giant, closes on $3.6 billion

Unlike some firms, the partnership at NEA hasn’t really focused on star-making. For the last several years the fund has been run by Scott Sandell, who has been with the firm since 1996 (his last tweet was in 2010).

4. Now streaming on Hotstar in India: Disney+

Disney+ has arrived in India weeks ahead of its scheduled launch date. The American giant revamped the Hotstar app and populated the on-demand video streaming service with the Disney+ original catalog on Wednesday morning.

5. Why so many robotic startups fail, and what can be done about it

Citing a handful of high-profile examples like Rethink, Anki, Jibo and CyPhy Works, Brian Heater put the question to panelists at last week’s TC Sessions: Robotics + AI event: Even with a lot of funding and plenty of smart people on board, why do so many robotic startups fail? (Extra Crunch membership required.)

6. SpotOn taps $50M to take on Square and more in payments and financial services for SMBs

SpotOn provides point-of-sale payment solutions, alongside a number of related tools such as marketing, appointment booking and loyalty services. In the last 12 months the startup says that it has grown revenues by 150%.

7. Quibi and Eko are in a legal battle over video tech

The Wall Street Journal broke the news that interactive video company Eko is accusing Quibi of infringing on its patented technology. Meanwhile, The Hollywood Reporter noted that Quibi (which is launching its short-form mobile video service next month) has filed a complaint in California federal court claiming that Eko has engaged in “a campaign of threats and harassment.”

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 9am Pacific, you can subscribe here.

“Smart” cameras are to be found in millions of homes, but the truth is they’re not all that smart. Facial recognition and motion detection are their main tricks… but what if you want to know if the dog jumped on the couch, or if your toddler is playing with the stove? VisualOne equips cameras with the intellect to understand a bit more of the world and give you more granular — and important — information.

Founder Mohammad Rafiee said that the idea came to him after he got a puppy (Zula) and was dissatisfied with the options he had for monitoring her activities while he was away. Here she is doing what dogs do best:

There are no bad dogs, but chairs are for people.

“There were specific things I wanted to know were happening, like I wanted to check if the dog got picked up by the dog walker. The cameras’ motion detection is useless — she’s always moving,” he lamented. “In fact, with a lot of these cameras, just a change in the lighting or wind or rain can trigger the motion alert, so it’s completely impractical.”

“My background is in machine learning. I was thinking about it, and realized we’re at a stage where this problem is starting to become solvable,” he continued.

Some tasks in computer vision, indeed, are as good as solved — detecting faces and common objects such as cars and bikes can be done quickly and efficiently. But that’s not always useful — what’s the point of knowing someone rode their bike past your house? In order for this to have value, the objects need to be understood as part of a greater context, and that’s what Rafiee and VisualOne are undertaking.

Unfortunately, it’s far from easy — or else everyone would be doing it already. Identifying a cat is simple, and identifying a table is simple, but identifying a cat on a table is surprisingly hard.

“It’s a very difficult problem. So we’re breaking it down to things we can solve right now, then building on that,” Rafiee explained. “With deep learning techniques we can identify different objects, and we build models on top of those to specify different interactions, or specific objects being in specific locations. Like a car in the wrong spot, or a dog getting on a couch. We can recognize that with high accuracy right now — we have a list of supported objects and models that we’re expanding.”

In case you’re not convinced that the capabilities are that much advanced from the usual “activity in the living room” or “Kendra is at the front door” notifications, here are a few situations that VisualOne is set up to detect:

• Kid playing with the stove
• Toddler climbing furniture
• Kid holding a knife
• Baby left alone for too long
• Raccoon getting into garbage
• Elderly person taking her medications
• Elderly person in bed for too long
• Car parked in the wrong spot
• Garage door left open
• Dog chewing on a shoe
• Cat scratching the furniture

The process for creating these triggers is pretty straightforward.

If one of those doesn’t make you think “actually… that would be really good to know” then perhaps a basic security camera is enough for your purposes after all. Not everyone has a knife-curious toddler. But those of you who do are probably scrolling furiously past this paragraph looking for where to buy one of these things.

Unfortunately VisualOne isn’t something you can just install on any old existing system — with the prominent exception of Nest, which it can plug into. Camera workflows are generally too locked down for security and privacy purposes to allow for third-party apps and services to be slipped in. But the company isn’t trying to bankrupt everyone with an ultra-luxury offering. It’s using off-the-shelf cameras from Wyze and loading them with its own software stack.

Rafiee said he pictures VisualOne as a mid-tier option for people who want to have more than a basic camera setup but aren’t convinced by the more expensive plays. That way the company avoids going head-on with commodity hardware’s race to the bottom or the brand warfare taking place between Google and Amazon’s Nest and Ring. Cameras cost $30-$40, and the service is $7 per month currently.

Ultimately the low-end companies may want to license from VisualOne, while the high-end companies will be developing their own full stack at great cost, making it difficult for them to go downmarket. “Hardware is hard, and AI is specialized — unless you’re a giant company it’s hard to do both. I think we can fill the gap in the market for mid-market companies without those resources,” he said.

Of course privacy is paramount as well, and Rafiee said that because of the way their system works, although the AI lives in the cloud and therefore requires the cameras to be online (like most others), no important user data needs to be or will be stored on VisualOne servers. “We do inference in the cloud so we can be hardware agnostic, but we don’t need to store any data. So we don’t add any risk,” he said.

VisualOne is launching today (after a stint in YC’s latest cohort) with an initial set of objects and interactions, and will continue developing more as it observes which use cases prove popular and effective.

The World Health Organization officially declared COVID-19 a pandemic at a press conference in Geneva today. The move comes as causes from the viral coronavirus strain have increased 13-fold in two weeks, effectively tripling the number of countries that have diagnosed cases.

According to the organization, the global death toll has his 4,291, from 118,000 reported cases across 114 countries. WHO chief Tedros Adhanom Ghebreyesus noted during the conference that, “pandemic is not a word to use lightly or carelessly,” but added that there was still time for officials to curb growth. While the term has already been employed by many medical professionals, the WHO has avoided an official declaration before now.

The organization officially defines pandemic as “the worldwide spread of a new disease,” noting that “viruses that have caused past pandemics typically originated from animal influenza viruses,” which appears to the be the case with this novel coronavirus. Consensus among officials is that the situation likely to continue to get worse before it improves. 

TikTok, the popular social media app owned by Chinese tech company ByteDance, has been under a national security investigation by U.S. lawmakers who have raised concerns about the company’s access to U.S. user data and whether it was censoring content at the behest of the Chinese government. Today, TikTok tries to combat these concerns with the opening of a “Transparency Center” that will allow outside experts to examine and verify TikTok’s practices.

The new facility in TikTok’s L.A. office will allow outside experts to view how TikTok’s teams operate day-to-day, the company explains, as staff moderates content on the platform. This includes how moderators apply TikTok’s content Guidelines to review the content its technology automatically flagged for review, as well as other content the technology may have missed.

In addition, the experts will be shown how users and creators are able to bring concerns to TikTok and how those concerns are handled. TikTok will also explain how the content on the platform aligns with its Guidelines, the company says.

This center mainly aims to address the censorship concerns the U.S. has with TikTok, which, as a Chinese-owned company may have to comply with “state intelligence work,” according to local laws, experts have said. TikTok has long denied that’s the case, claiming that no governments — foreign or domestic — have directed its content moderation practices.

That being said, The Washington Post reported last year that searches on TikTok revealed far fewer videos of the Hong Kong protests than expected, prompting suspicions that censorship was taking place. The Guardian, meanwhile, came across a set of content guidelines for TikTok that appeared to advance Chinese foreign policy through the app. TikTok said these guidelines were older and no longer used.

Today, TikTok’s moderation practices are still being questioned, however. In November, it removed a video that criticized China’s treatment of Muslims, for example. The video was restored after press coverage, with TikTok citing a “human moderation error” for the removal.

While the larger concern to U.S. lawmakers is potential for China’s influence through social media, TikTok at times makes other moderation choices that don’t appear to be in line with U.S. values. For example, singer Lizzo recently shaded TikTok for removing videos of her wearing a bathing suit, even as TikTok stars posted videos of themselves dancing in their bathing suits. (The deleted video was later restored after press coverage). The BBC also reported that transgender users were having their posts or sounds removed by TikTok, and the company couldn’t properly explain why. And The Guardian reported on bans of pro-LGBT content. Again, TikTok said the guidelines being referenced in the article were no longer in use.

TikTok says the new transparency center will not only allow the experts to watch but also provide input about the company’s moderation practices.

“We expect the Transparency Center to operate as a forum where observers will be able to provide meaningful feedback on our practices. Our landscape and industry is rapidly evolving, and we are aware that our systems, policies and practices are not flawless, which is why we are committed to constant improvement,” said TikTok  U.S. General Manager, Vanessa Pappas. “We look forward to hosting experts from around the world and continuing to find innovative ways to improve our content moderation and data security systems,” she added.

The Center will open in early May, initially with a focus on moderation. Later, TikTok says it will open up for insight into its source code and efforts around data privacy and security. The second phase will be led by TikTok’s newly appointed Chief Information Security Officer, Roland Cloutier, who starts next month.

The company notes it has taken many steps to ensure its business can continue to operate in the U.S. This includes the release of its new Community Guidelines and the publishing of its first Transparency Report a few months ago. TikTok has also hired a global General Counsel and expanded its Trust & Safety hubs in the U.S., Ireland, and Singapore, it said.

CRM software accounts for one-quarter of all enterprise IT spend. But ironically, while a lot of money is spent on platforms like Salesforce or SAP to manage incoming calls and outgoing marketing and sales activity, not a lot of attention is given to the issue of how to help the teams using all that software work better.

What are the peak times for calls? What are the most common questions? Which staff are best skilled at what kinds of questions? And who is actually working at any given time? These are just some of the issues, but in many cases, there isn’t much in the way of tools used to help with these at all — organisations often just hack a spreadsheet platform like Google Sheets or a calendar app to get by, or do nothing at all.

Today, a startup called Assembled is coming out of stealth mode to address that gap in the market, with a platform that’s built specifically to address the kinds of questions and issues that customer support teams encounter and — answered well — can help them work much better.

Out of the gate, Assembled is announcing $3.1 million in seed funding led by Stripe — where the founding team previously worked — with participation also from Basis Set Ventures, Signalfire, and several angel investors (who are also mostly former Stripe employees).

Assembled’s longer-term ambition is to build tools for what co-founder Ryan Wang describes as “the logistics of customer support.”

“We want to become the operating system for support teams,” he said. Most immediately, the company’s focus will be on agent performance. “Teams to want to learn about their top performers and how they spend their time, and offer data to empower their decision-making.”

Stripe — the payments and related services provider that is now valued at $35 billion — has developed a sizeable operation funding startups adjacent to its own interests in cultivating relationships with startups and other smaller businesses. You could consider it a strategic investor in Assembled: alongside Grammarly, Gofundme, Hopper and Harry’s, Stripe is one of Assembled’s marquee customers.

[gallery ids="1957470,1957471,1957472"]

Wang, an ex-Stripe engineer who co-founded Assembled with his brother John and Assembled’s CEO Brian Sze (both also ex-Stripe), said in an interview that the idea for the startup came directly out of the pair’s experiences as early employees at Stripe.

The approach at the startup in its early days was very grass-roots: employees would get together outside the office to go through support tickets as a way of identifying trends and to talk through them to figure out what might need fixing, how to handle issues in the future, and so on.

It was probably a great way for the team to really stay in touch with what customers needed and wanted. But eventually this approach presented a problem: how do you scale this kind of process? To a tech person, the solution would be obvious: build a platform that can help you do this.

“Within the landscape of CRM, we could see that tech hadn’t really been applied to the business of supporting customer support,” Wang said. “That is why we left. We’d understood that it was a broad problem.”

A tool to help improve workforce management for customer support teams is a no brainer for a company already trying to address these issues through its own home-baked solutions. Wang noted that one of its current customers had built out such an extensive map of data on Google Sheets trying to address customer support workforce management that “they broke Google Sheets. It was just too big.”

Indeed, Bob van Winden, Stripe’s head of operations, noted: “Millions of businesses rely on Stripe every day. To support them, we obsess over every detail of delivering fast, reliable customer service, including free 24×7 phone and chat support. This led us to Assembled, which our global support teams are using to stay coordinated and focused on helping Stripe’s users thrive.”

Less obvious is the use case when a company has never identified these issues, or sees them but haven’t made efforts to try to solve them because it seems too difficult. (The classic issues here are that Assembled is “too clever by half”, or “too ahead of its time.”) That presents both an open market for Assembled, but also a greenfield challenge.

One route to customers has been to integrate with more established CRM packages. Currently Assembled integrates with Salesforce, Kustomer and Zendesk, so that it can source data from these to provide more insights to users.

Another is to provide a set of tools that speak to the wider trend for analytics and data-based insights that can be used to improve how a company works. Indeed, just as Kustomer has disrupted the idea of a CRM being focused a narrow funnel of inbound requests, Assembled also is rethinking how to parse data to figure out what a customer support person should be doing and when. 

The startup provides a way to forecast inbound support query volumes, and to map that into staffing plans that cover multiple channels like chat, email, phone and social media. The staffing plan, in turn, also acts as a scheduling tool to set up group and single calendars for individuals.

A team’s activity, meanwhile, is tracked through a set of metrics that whole team can see and use to calibrate their work better.

Going forward, you can imagine Assembled expanding in a couple of different directions. One might be to offer workforce management to more teams beyond customer support, but that also have to work out how to manage inbound requests and turn them into more efficient work plans. Another might be to continue expanding the kinds of tools it might provide to customer support teams to continue complementing basic CRMs, in particular as customer support comes to mean different things, depending on who the “customer” actually is.

“We see the term ‘customer support’ evolving,” Wang said. “The big struggle is what is the encompassing term should be instead. Generally, our view is that we want to transform and elevate what customer support means. It’s not just about call centers, but any drivers of customer experience related to your products.”

With the markets in turmoil and fear running rampant through the global economy, you might not think it’s the right moment to start a company. According to at least one well-known venture capitalist, however, it’s a great time to start up.

TechCrunch recently caught up with former founder and active venture capitalist Jason Lemkin to chat about the world of software-as-service companies, better known as “SaaS.” Lemkin swung by TC HQ in San Francisco to spend some time with the Equity crew to discuss all things SaaS, markets and startups.

Long-time listeners of our Equity podcast will recall that this is not the first or even second time that we’ve had Lemkin on. He was, after all, our first guest, as well as a repeat guest for Episode 100. But as it’s Equity’s third birthday, and the SaaStr conference was just around the corner (now postponed), we had Lemkin back to dig deep into one of our favorite startup categories. So let’s get nerdy about SaaS. 

Hit the clip if you’ve had a long, hard week and want some optimism:

In the full interview after the jump, hear about Jason’s current venture fund, investing cadence, vertical SaaS, his advice for the middle class of SaaS, how to think about venture debt, SaaS consolidation, software in India, and the Slack versus Microsoft scrap. It’s a lot of fun, so let’s get into it.

AWS has launched its own open-source operating system for running containers on both virtual machines and bare metal hosts. Bottlerocket, as the new OS is called, is basically a stripped-down Linux distribution that’s akin to projects like CoreOS’s now-defunct Container Linux and Google’s container-optimized OS. The OS is currently in its developer preview phase, but you can test it as an Amazon Machine Image for EC2 (and by extension, under Amazon EKS, too).

As AWS chief evangelist Jeff Barr notes in his announcement, Bottlerocket supports Docker images and images that conform to the Open Container Initiative image format, which means it’ll basically run all Linux-based containers you can throw at it.

One feature that makes Bottleneck stand out is that it does away with a package-based update system. Instead, it uses an image-based model that, as Barr notes, “allows for a rapid & complete rollback if necessary.” The idea here is that this makes updates easier. At the core of this update process is “The Update Framework,” an open-source project hosted by the Cloud Native Computing Foundation.

AWS says it will provide three years of support (after General Availability) for its own builds of Bottlerocket. As of now, the project is very much focused on AWS, of course, but the code is available on GitHub and chances are we will see others expand on AWS’ work.

The company is launching the project in cooperation with a number of partners, including Alcide, Armory, CrowdStrike, Datadog, New Relic, Sysdig, Tiger, Trend Micro and Waveworks.

“Container-optimized operating systems will give dev teams the additional speed and efficiency to run higher throughput workloads with better security and uptime,” said Michael Gerstenhaber, Director of Product Management at Datadog.” We are excited to work with AWS on Bottlerocket, so that as customers take advantage of the increased scale they can continue to monitor these ephemeral environments with confidence.”

Deep tech — the generic term for technologies not focused on end-user services that includes artificial intelligence, robotics, blockchain, advanced material science, photonics and electronics, biotech and quantum computing — has been an identified category for investment as long as the tech industry itself.

But as with many other sectors, it has found itself in and out of favor depending on the wider climate. In the years when mainstream tech adoption started to take off, under-the-radar deep tech became even more obscure as big-ticket apps and other services and gadgets popular with consumers received all the limelight.

Now, with “winners” in that bigger category climbing to new heights — it’s hard to imagine anyone replacing Facebook, Google, Apple or Amazon anytime soon, even as other apps grow in niche popularity — the enthusiasm of taking bets on consumer startups has leveled off. Coupled with that, investors are again looking at startups focused on a more diverse set of technologies that solve hard problems, which might prove to be the levers of instrumental change.

Those trends have contributed to a rising interest in deep tech, with investments in the wider category growing 20% annually between 2015 and 2018, culminating in nearly $18 billion of investment, according to a 2019 report from Boston Consulting Group.

One measure of the enthusiasm in the space is the activity of VCs who focus on deep tech. Last month, Tel Aviv-based Grove Ventures, which funds companies spanning Europe and beyond, closed a $125 million fund to back deep-tech startups and is already raising another fund of the same amount. Firms that Grove has backed include fabless IoT semiconductor startup Wiliot, API marketplace RapidAPI, autonomous vehicle startup TriEye, next-generation manufacturing startup 3DSignals and a number of startups still in stealth.

Another major tech show has fallen victim to COVID-19 concerns. Rumors around E3’s cancelation began swirling around last night, with a number of publications reporting from sources close to the show. 

Governing body the Entertainment Software Association made the news official. In a statement provided to TechCrunch, the ESA noted,

After careful consultation with our member companies regarding the health and safety of everyone in our industry – our fans, our employees, our exhibitors and our longtime E3 partners – we have made the difficult decision to cancel E3 2020, scheduled for June 9-11 in Los Angeles.

Following increased and overwhelming concerns about the COVID-19 virus, we felt this was the best way to proceed during such an unprecedented global situation. We are very disappointed that we are unable to hold this event for our fans and supporters.  But we know it’s the right decision based on the information we have today.

Our team will be reaching out directly to exhibitors and attendees with information about providing full refunds.

Held in Los Angeles during the summer, E3 continues to be one the world’s premier gaming shows. But struggles roughly a decade ago found the event transforming into a far leaner trade show, opening the doors to a number of competitors in the process. While it has managed to rebound to some degree, thanks in part to the decision to open its doors to the gaming public, E3’s bottom line. Such a move could ultimately have a profound effect on the show’s future, moving forward.

Even with Sony’s decision to skip the show being announced back in January, 2020 was shaping up to be a big year for the event, with next generation versions of both the PlayStation and Xbox due out by year’s end. 

E3 is just the latest in a long line of tech shows that have closed up shop for the year, beginning with Mobile World Congress last month. Likely many will following Nintendo’s longstanding tradition of making announcements via webcast. The question for E3’s organizers, is whether those companies who move to an online approach will ultimately return in 2021.

The ESA is “exploring options” around offering elements of the event online.

Robotics have found a lot of success in the shipping and warehouse fulfillment categories for their ability to give logistics companies an edge in timing. Amazon is probably the best and most prominent example, with more than 200,000 robots currently deployed in its centers across the U.S.

As the retail giant has shifted expectations to next and same-day deliveries, competitors and partners have looked for an edge, with many turning to third-party robotics. Shipping giant DHL has been looking to robotics companies. In late 2018, the company’s North American wing announced its plan to invest $300 million in robotics and automation across 350 facilities.

A partner since 2017, Locus Robotics is reaping some of that windfall. DHL this week committed to deploying a total of 1,000 LocusBots from the Massachusetts-based startup. In spite of some large investments, it still feels like a drop in the bucket of the company’s overall footprint, expanding the robots’ locations from two to 12 sites in the coming year.

Clearly the shipping company does have good things to say about how the pilot has run so far.

“DHL Supply Chain’s initial implementation of the Locus solution within the life sciences and retail sectors was a tremendous success; we saw increases in fulfillment productivity of up to 80% in selected customer operations,” DHL retail president Jim Gehr said in a release. “We now see an opportunity to extend the benefits of utilizing their highly flexible AMR solution at scale for customers across multiple sectors. We look forward to continuing to work with Locus to drive productivity, support capacity growth and deliver continuous improvement within our customers’ supply chains nationwide.”

Locus Robotics is one of about 25 robotics companies DHL had plans to partner with when its initial investments were announced in 2018. The startup raised a $26 million Series C in April of last year.