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Remember when the top investors and companies in tech were reacting to SoftBank’s every move? These days, we are picking through the latest results from the Japanese conglomerate and its Vision Fund to see how things went wrong, and where it is still succeeding with its startup portfolio.

First up, this fund appears to be out of additional money to spend, as Arman Tabatabai and Danny Crichton found buried in the footnotes of its new regulatory filing. Meanwhile, as they tallied on TechCrunch, the losses have piled up lately:

The Vision Fund officially lost $17.4 billion in value according to SoftBank’s financials for the year ending this past March 31. The year before, SoftBank had registered a positive gain in the Vision Fund’s value of $12.8 billion, which means that the damage of this year’s performance has completely wiped out all gains the fund had made in the previous year. But the real shock is the performance of the fund’s underlying portfolio companies. The Vision Fund currently has 88 active portfolio companies that have not exited. Of those, 19 investments saw a gain in combined value of $3.4 billion according to SoftBank, while 50 companies saw a decline in value aggregating to $20.7 billion in losses. 19 portfolio companies were left unchanged in value.

Is this worse than what the rest of the market at large is going through? Here’s Alex Wilhelm’s view on Extra Crunch:

To some degree this feels counter-narrative. Tech shares have rebounded in recent weeks, rebuilding sentiment in the sector — perhaps the COVID-19 downturn won’t be that bad, the thinking seems to go. The SoftBank Vision Fund’s results paint a more negative picture of the economy: It’s bad in many areas, lots of companies are impacted and the value of many unicorns is too high, even if the scale of write-downs that private investors like venture capitalists will have to endure is not yet clear. The private market can, therefore, expect a host of down-rounds if unicorns need to raise capital in the short-term. And many will. The Vision Fund report card, then, is an indication that enterprise software is doing as well as we might have thought, that there are some winners in the health-tech space and that, aside from those exceptions, the rule appears to be a downturn in startup land. 

Emphasis mine. Arman and Danny also broke out Arm’s financials for EC and what that top SoftBank company shows about the future of semiconductors. And, for both education and amusement, they provided a commentary about SoftBank’s in-depth and sometimes bizarre presentation about the results.

The symbolism of Jack Ma’s SoftBank board resignation

Masayoshi Son made his name via a seminal bet on a very young Alibaba back in the 1990s, and since then he and SoftBank have had much of their net value and stature tied up in the success of Jack Ma’s efforts. Ma, in turn, has bolstered SoftBank by holding a board seat on the conglomerate since 2008. After 14 years and broadly changing interests on both sides, it’s not surprising that he resigned. But as Danny wrote for TechCrunch in a helpful sidebar to the other Softbank coverage:

[I]t’s not just about an investor and his entrepreneur breaking some ties after two decades in business together. It’s about the fraying of the very globalization that powered the first wave of tech companies — that a Japanese conglomerate with major interests in the U.S. and Europe could invest in a Hong Kong/China startup and reap huge rewards. That tech world and the divide of the internet and the world’s markets continues unabated.

What will save college-town startup hubs?

Few people alive remember, but Palo Alto used to be considered a long way from San Francisco… this was back when Stanford University actually was a farm, though. The interplay of the university’s technical research and education with local technologists was core to how Silicon Valley formed and how the region grew, and in recent decades many other metros of all sizes have implemented their own successful versions of this playbook.

But maybe pandemic effects will cause startup activity to contract to the biggest startup hubs? In this week’s staff survey (a new format we’re trying out), Danny believes that’s the case. The revenues for universities will be hit too hard by the loss of foreign student tuition, decreased attendance domestically due to closed campuses and student financial problems, etc. Natasha Mascarenhas looks back at her own experiences and finds the in-person experience so irreplaceable that she thinks the core attendance will recover. Alex agrees with that.

As I move out of the Bay Area to a college town this weekend, I think I disagree with all of the above. Yes, I also expect higher education to get slammed — but what is going to remain? STEM programs already have government and private funding lined up that can stretch many years into the future, and these schools have wealthy, supportive alumni and can generate revenue from commercialization (aka startup creation). Which means that, as much as anything will exist anywhere physically in higher ed, the research labs and science and engineering programs of the country (and the world) will continue to operate. The tech companies that are still booming publicly or privately will need to hire more graduates with these degrees. So, even with remote learning, the core institutions and their environs will have the means to continue, and be regular destinations for tech talent.

Danny, it is the big cities that I think will get slammed the hardest, especially those with troubled local and state revenue sources like here in California. People of all income levels were already fleeing the largest metros due to high prices, now the pandemic is reinforcing that they can work remotely with little to no drop in productivity. Instead, commercial real estate, typically a key urban tax base, is in free-fall. Let’s say you work in tech but want to spend less and have more space and amenities. Yes there are many suburbs and exurbs you can move to — but the college town ones are some of the nicest. Nobody is fleeing Boulder now. But I bet a lot of people wish they could move there.

Combine all of this with the global networking tools that the tech industry has been hard at putting together, and I think finding a cofounder and building a company will soon be as easy as finding an online date. Why not find yourself a nice garage in a sleepy college town like Bill Hewlett and David Packard did not so long ago and settle in for some hardcore entrepreneurship? Find your cofounders and key employees from near and far as you please, and enjoy the benefits of your alma mater’s local network. Just make sure you have a great wifi connection and an ergonomic workstation.

Delivery robot demand starts to grow, create human jobs

Automation turns out to still require a lot of blood, sweat and tears to operate correctly. Resident automotive expert Kirsten Korosec takes a look at how the delivery robot sub-sector of autonomous vehicles has been hiring remote humans to help delivery robots navigate the trickiest parts of a route safely as demand grows during the pandemic. Her main example in this in-depth look on TechCrunch is a partnership between Postmates and a startup called Phantom Auto, which focuses on AV teleoperations.

Using Phantom Auto’s software, a Postmates fleet supervisor can monitor a robot from thousands of miles away. The supervisor will jump in to help the bot navigate the first and last 15 feet to a restaurant or the recipient or if it needs help crossing a busy street.

These robot guides can assist using a couple of methods. The human teleoperator can provide input to the system, something as simple as a thumbs up or thumbs down to help the bot make the right choice. The employee can also use a hand-held remote controller to steer, accelerate or slow down the bot in real-time.

The teleoperations component of mobility is spreading more broadly. She separately covered a scooter company in Atlanta that is hiring remote operators in Mexico City to deliver the vehicles to customers.

If you’re focused on these topics, you might be interested in the other things Kirsten is up to as well (if you’re not reading her already). In addition to her regular coverage, she’s been doing surveys of mobility investors along with Megan Rose Dickey for Extra Crunch. We published the first last week on the larger impact of the pandemic on the sector. Kirsten also has a weekly free newsletter called The Station about the topic and her coverage, which you can read and subscribe to here.

Investors surveyed on enterprise software, cannabis

Pandemic or no, enterprise investors will not stop being bullish, thank you very much. Resident enterprise reporter Ron Miller caught up with top investors in the space in the space for the first of a series on the cloud that he has coming. Here’s a money quote from the Extra Crunch article, courtesy of Max Gazor at CRV.

It’s abundantly clear that cloud software markets are bigger than most people anticipated. We continue to invest heavily there as we have been doing for the last decade. Specifically, the most exciting trend right now in enterprise is low-code software development. I’m on the board of Airtable, where I led the Series A and co-led the Series B investments, so I see first-hand how this will play out. We are heading toward a future where hundreds of millions of people will be empowered to compose software that fits their own needs. Imagine the productivity and transformation that will unlock in the world! It may be one of the largest market opportunities we have seen since cloud computing.

And now for something completely different. Cannabis has emerged as a serious half-legal sector that few of us have qualms about, in this part of the world at least. It has tended to breed its own strain of investor — many of whom Matt Burns caught up with for our second survey this week. The pandemic seems to have turned things around for the category, at least according to some. Here’s Matt Hawkins of Entourage Effect Capital:

Cannabis went from illegal to essential in about two weeks flat — cannabis is now listed right alongside hospitals, doctors, grocery stores, gas stations and fire departments as an essential service. As we edge close to federal legalization, there is still a large demand for research on cannabis’ medicinal benefits and a lot more opportunities to create cannabis-derived medicines. There is a lot to be excited about in the long term.

Across the week

Extra Crunch

What to do when your VC writes your startup off

Why VCs say they’re open for business, even if they’re pausing new deals

GitLab’s head of Remote on hiring, onboarding and why Slack is a no-work zone (part 1)

GitLab’s head of Remote on what people tend to get wrong about remote work (part 2)

Popping the hood on Vroom’s IPO filing

The Great Reset

TechCrunch

Work From Home is dead, long live Work From Anywhere

Following Luckin Coffee scandal, Nasdaq ready to tighten rules on IPO listings

How I Podcast: Articles of Interest’s Avery Trufelman

Europe to Facebook: Pay taxes and respect our values — or we’ll regulate

How to decode a data breach notice

Around TechCrunch

TechCrunch Disrupt 2020 is going virtual

Startup Battlefield is going virtual with TechCrunch Disrupt 2020

Sequoia Capital’s Roelof Botha is coming to Disrupt this fall

Extra Crunch Live: Join Verizon CEO Hans Vestberg for a live Q&A May 26 at 2pm ET/11am PT

Extra Crunch Live: Join Box CEO Aaron Levie May 28th at noon PT/3 pm ET/7 pm GMT

#EquityPod: Clubhouse proves that time is a flat circle

Listen here.

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

First, a big thanks to everyone who took part in the Equity survey, we really appreciated your notes and thoughts. The crew is chewing over what you said, and we’ll roll up the best feedback into show tweaks in the future.

Today, though, we’ve got Danny and Natasha and Chris and Alex back again for our regular news dive. This week we had to leave the Vroom IPO filing, Danny’s group project on The Future of Work and a handwashing startup (?) from Natasha to get to the very biggest stories:

• Brex’s $150 million raise: Natasha covered the latest huge round from corporate charge-card behemoth Brex. The party’s over in Silicon Valley for a little while, so Brex is turning down your favorite startup’s credit limit while it stacks cash for the downturn.
• Spruce raises a $29 million Series B: Led by Scale Venture Partners, Spruce is taking on the world of real estate transactions with digital tooling and an API. As Danny notes, it’s a huge market and one that could find a boost from the pandemic.
• MasterClass raises $100 million: Somewhere between education and entertainment, MasterClass has found its niche. The startup’s $180 yearly subscription product appears to be performing well, given that the company just stacked nine-figures into its checking account. What’s it worth? The company would only tell Natasha that it was more than $800 million.
• Clubhouse does, well, you know. Clubhouse happened. So we talked about it.
• SoftBank dropped its earnings lately, which gave Danny time to break out his pocket calculator and figure out how much money it spent daily, and Alex time to parse the comedy that its slideshow entailed. Here’s our favorites from the mix. (Source materials are here.)

And at the end, we got Danny to explain what the flying frack is going on over at Luckin. It’s somewhere between tragedy and farce, we reckon. That’s it for today, more Tuesday after the holiday!

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week we’re continuing to look at how the coronavirus outbreak is impacting the world of mobile applications. Notably, we saw the launch of the Apple/Google exposure-notification API with the latest version of iOS out this week. The pandemic is also inspiring other new apps and features, including upcoming additions to Apple’s Schoolwork, which focus on distance learning, as well as Facebook’s new Shops feature designed to help small business shift their operations online in the wake of physical retail closures.

Tinder, meanwhile, seems to be toying with the idea of pivoting to a global friend finder and online hangout in the wake of social distancing, with its test of a feature that allows users to match with others worldwide — meaning, with no intention of in-person dating.

Headlines

COVID-19 apps in the news

• Fitbit app: The fitness tracker app launched a COVID-19 early detection study aimed at determining whether wearables can help detect COVID-19 or the flu. The study will ask volunteers questions about their health, including whether they had COVID-19, then pair that with activity data to see if there are any clues that could be used to build an early warning algorithm of sorts.
• U.K. contact-tracing app: The app won’t be ready in mid-May as promised, as the government mulls the use of the Apple/Google API. In testing, the existing app drains the phone battery too quickly. In addition, researchers have recently identified seven security flaws in the app, which is currently being trialed on the Isle of Wight.

Apple launches iOS/iPadOS 13.5 with Face ID tweak and contact-tracing API

Apple this week released the latest version of iOS/iPadOS with two new features related to the pandemic. The first is an update to Face ID which will now be able to tell when the user is wearing a mask. In those cases, Face ID will instead switch to the Passcode field so you can type in your code to unlock your phone, or authenticate with apps like the App Store, Apple Books, Apple Pay, iTunes and others.

The other new feature is the launch of the exposure-notification API jointly developed by Apple and Google. The API allows for the development of apps from public health organizations and governments that can help determine if someone has been exposed by COVID-19. The apps that support the API have yet to launch, but some 22 countries have requested API access.

The global pandemic has cast a light on decades of cumulative efforts to manipulate and suppress voters, showing that the country is completely unprepared for any serious challenge to its elections system. There can be no more excuses: Every state must implement voting by mail in 2020 or be prepared to admit it is deliberately sabotaging its own elections. (And for once, tech might be able to help.)

To visualize how serious this problem is, one has only to imagine what would happen if quarantine measures like this spring’s were to happen in the fall — and considering experts predict a second wave in that period, this is very much a possibility.

If lockdown measures were being intensified and extended not on May 3rd, but November 3rd, how would the election proceed?

The answer is: it wouldn’t.

There would be no real election because so few people in the country would be able to legally and safely vote. This is hardly speculative: We have seen it happen in states where, for lack of any other option, people had to risk their lives, breaking quarantine to vote in person. Naturally it was the most vulnerable groups — people of color, immigrants, the poor and so on — who were most affected. The absurdity of a state requiring voters to gather in large groups while forbidding people to gather in large groups is palpable.

With this problem scaled to national levels, the entire electoral process would be derailed, and the ensuing chaos would be taken advantage of by all and sundry for their own purposes — something we see happening in practically every election.

For the 2020 election, if any elections official in this country claims to value the voters for which they are responsible, voting by mail is the only way to enable every citizen to register and vote securely and remotely. Anything less can only be considered deliberate obstruction, or at best willful negligence, of the electoral process.

Image Credits: Bill Oxford / iStock Unreleased / Getty Images

There’s a fair amount of talk about apps, online portals and other avenues, and these may figure later, but mail is the only method guaranteed right now to securely serve every address and person, providing the fundamental fabric of connectivity that is absolutely necessary to universally accessible voting.

Hand-wringing about fraud, lost ballots and other issues with voting by mail is deliberate, politically motivated FUD (and you can expect a lot of it over the next few months). States where voting by mail is the standard report no such issues; on the contrary, they have high turnout and few problems because it is simple, effective and secure. As far as risk is concerned, there is absolutely no comparison to the widespread and well-documented process and security issues with touchscreen voting systems, even before you bring in the enormous public health concerns of using those methods during a pandemic.

Federal law requires that troops around the world, among others unable to vote in person, are able to request and submit their ballots by mail. That this is the preferred method for voting in combat zones is practically all the endorsement such a system needs. That the president votes by mail is just the cherry on top.

Fear of voters

So why hasn’t voting by mail been adopted more widely? The same reason we have gerrymandered districts: Politicians have manipulated the electoral process for decades in order to stack the deck in their favor. While gerrymandering has been employed with great (and deplorable) effect by both Democratic and Republican officials, voter suppression is employed overwhelmingly by the political right.

While this is certainly a politically charged statement, it’s not really a matter of opinion. The demographics of the voting public are such that as the proportion of the population that votes grows, the aggregate position begins to lean leftward. This happens for a variety of reasons, but the result is that limiting who votes benefits conservatives more than liberals. (I am not so naive to think that if it were the other way around, Democrats would altogether abstain from the practice, but that isn’t the case.)

This is not a new complaint. Deliberate voter suppression goes back a century and more. Nor is the practice equally distributed. For one thing, white, well-off, urban areas are more likely to have effective and modern voting systems and laws.

This is not only because those areas are generally the first to receive all good things, but because voter suppression has been aimed specifically at people of color, immigrants, the poor and so on. Again, this is no longer a controversial or even particularly partisan statement; it has been admitted to by politicians and strategists at every level — including, quite recently, by the president: “They had things, levels of voting that if you’d ever agreed to it, you’d never have a Republican elected in this country again.”

When voting by mail was merely a convenient, effective alternative to voting in person, it was fairly easy to speak against it. Now, however, voting by mail is increasingly looking like the only possible method to accomplish an election.

Again, think of how we would vote during a stay-at-home order. Using only today’s methods would be dangerous, chaotic and generally an ineffective way to ask the population at large who they want to lead their city, state and country.

That is no way to conduct an election. Therefore, we currently have no way to conduct a national election. Voting by mail is the only method that can realistically be rolled out to accomplish an effective election in 2020.

Disunited states

Because elections are run by state authorities, voting methods and laws vary widely between them. The quickest way to a nationwide vote-by-mail system would use federal funding and authority, but even if states were in favor of this (they won’t be, as it is an encroachment on their authority), Washington is not. The possibility of a bill implementing universal voting by mail passing the House, Senate and the president’s desk by November is, sadly, remote.

Which is not to say that no one in D.C. is not trying it:

This means it’s down to the states — not great news, considering it is at the state level that voting rights have been eroded and voter suppression enshrined in policy.

The only hope we have is for state authorities to recognize that the 2020 presidential election will be a closely watched litmus test for competence and corruption that will haunt them for years. It’s one thing to put your finger on the scale under normal circumstances. It’s quite another to author a high-profile electoral failure in an election few doubt will be one of the most consequential in American history — especially if that failure was manifestly preventable.

And we know it is preventable because due to federal voting rights laws, every state already has some form of accessible, mail-in or absentee voting. This is not a matter of inventing a new system from scratch, but scaling existing, proven systems in ways already demonstrated and verified over decades. Several states, for instance, have simply announced that all voters will get absentee ballots or applications sent unrequested to their homes. No one said it would be easy, but the first step — committing — is at least simple.

It will be obvious in a few months which state authorities actually care about the vote and which see it as just another instrument to manipulate in order to retain and accrue power. The actions taken in the run-up to this election will be remembered for a long time. As for the federal government interfering with states’ prerogative to run their own elections — that’s a violation of states’ rights that I expect will encounter strong bipartisan opposition.

How tech can help without hindering

Image Credits: NickS (opens in a new window) / Getty Images

The tech world will want to aid in this cause out of several motives, but the simple truth is there’s no way a technological solution can be developed and deployed by November. And not only is it infeasible, but there is serious political opposition to online voting systems to be widely deployed. The idea is a non-starter for this election and probably the next.

Rather than trying, Monolith-style, to evolve voting to the next phase by taking on the whole thing tip to tail, tech should be providing support structures via uniquely digital tools that complement rather than replace effective voting systems.

For example, there is the possibility, however remote, that a mailed ballot will be intercepted by some adversary and modified, shredded, selectively deposited, or what have you. No large-scale fraud has ever been perpetrated, despite what opponents of voting by mail might say. States developed preventative solutions long ago, like secure ballot boxes placed around the city and tamper-evident envelopes.

But end to end security is something at which the tech sector excels, and moreover recent advances make a digitally augmented voting process achievable. And there’s plenty of room for competition and commercial involvement, which sweetens the pot.

Here’s a way that commonplace tech could be deployed to make voting by mail even more secure and convenient.

Imagine a mail-in ballot of the ordinary fill-in-the-bubble type. Once a person makes their selections, they take a picture of the ballot in a dedicated, completely offline app. Via fairly elementary image analysis nearly any phone can now perform, the votes can be detected and tabulated, verified by the voter, then hashed with a unique voter sheet ID into a code short enough to be written down.

The ballot is mailed and (let us say for now) received. When it is processed, the same hash is calculated by the machine reader and placed on an easily accessible list. A voter can check that their vote was tabulated and correctly recorded by entering their hash into a website — which itself reveals nothing about their vote or identity.

What if something goes wrong? Say the ballot is lost. In that case the voter has a record of their vote in both image and physical form (mail-in ballots have little tear-off tabs you keep) and can pursue this issue. The same database that lets them verify their vote was correct will allow them to see if their vote was never cast. If it was interfered with or damaged and the selections differ from what the voter already verified, the hash will differ, and the voter can prove this with the evidence they have — again, entirely offline and with no private information exposed.

This example system only works because smartphones are now so common, and because it is now trivial to process an image quickly and accurately offline. But importantly, the digital aspect only addresses shortcomings of the mail-in system rather than being central to it. You vote with only a ballpoint pen, as simply as possible — but if you want to be sure, you may choose to employ the latest technology to track your vote.

A system like this may not make it in time for the 2020 election, but voting by mail can and must if there is to be an election at all.

Nearly a year ago, Todd Howard, the director of Bethesda Games, said that the company’s “Fallout Shelter” game would be coming to Tesla displays. It arrived, via the 2020.20 software update, this week, which was first noted at driver’s platform Teslascope.

Fallout Shelter is the latest — and one of the more modern games — to join Tesla’s Arcade, an in-car feature that lets drivers play video games while the vehicle is parked. It joins 2048, Atari’s Super Breakout, Cuphead, Stardew Valley, Missile Command, Asteroids, Lunar Lander and Centipede. The arcade also includes a newly improved (meaning more difficult) backgammon game as well as chess.

The 2020.20 software update that adds the game, along with a few other improvements, hasn’t reached all Tesla vehicles yet, including the Model 3 in this reporter’s driveway (that vehicle has the prior 2020.16.2.1 update, which includes improvements to backgammon and a redesigned Tesla Toybox).

However, YouTube channel host JuliansRandomProject was one of the lucky few who did receive it and released a video that provides a look at Fallout and how it works in the vehicle. Roadshow also discovered and shared the JuliansRandomProject video, which is embedded below.

Fallout Shelter is just one of the newer features in the software update. Some functionality was added to the steering wheel so owners can use the toggle controls to play, pause and skip video playback in Theater Mode, the feature that lets owners stream Netflix and other video (while in park).

Tesla also improved Trax, which lets you record songs. Trax now includes a piano roll view that allows you to edit and fine tune notes in a track.

An eighth Amazon employee has died of COVID-19. The news comes as the company is under scrutiny for failing to be more transparent about the wider number of infections among its warehouse workers.

A spokesperson confirmed the reports of the death, telling TechCrunch, “We are saddened by the loss of an associate who had worked at our site in Randall, Ohio. “Her family and loved ones are in our thoughts, and we are supporting her fellow colleagues.”

According to the company, the worker in North Randall, a village outside of Cleveland, was sent home from work on April 30. She received a positive test a little over a week later, on May 8. Amazon says it notified fellow employees of the death and has provided counseling to colleagues.

The overall number of Amazon workers who have tested positive for the virus remains a mystery. The company stands by its decision not to disclose such information. “We don’t think that number is super valuable,” it has said previously. In a statement provided to TechCrunch, it added: 

Our rates of infection are at or below the rates of the communities where we operate. We see that in our quarantine rates as well. Quarantine rates are a critical part to understanding what’s happening in the workplace – it shows that our hard work around social distancing is paying off. Unlike others who hide beyond HIPAA, we alert every person at the site anytime there is a confirmed diagnosis. This alert to employees is a direct text message noting when the person with the confirmed diagnosis was last in the building.

The lack of transparency is one of a number of sources of criticism surrounding Amazon’s COVID-19 response.

While the company has repeatedly maintained that it has done all it can to protect the employees in its fulfillment centers, potential exposure to the virus among warehouse workers is difficult to avoid, even with the proper PPE. Earlier this month, a letter from 13 state attorneys general demanded that Amazon disclose the number of workers who have been impacted by the virus.

“We have requested but not received information on how many of the Companies’ workers have been infected with COVID-19, and how many have died from it,” the letter reads. “Please provide a state-by-state breakdown for each Company with this information.”

Earlier this week, The New York Times noted one particularly hard hit warehouse in northeastern Pennsylvania, where more than 100 workers have apparently tested positive for the virus. The exact figure is unknown, as Amazon will not disclose it. Yesterday, the Milwaukee Journal Sentinel noted that at least 30 workers at the nearby Kenosha warehouse have tested positive for the virus.

As more housebound Americans rely on Amazon for deliveries, workers have largely fallen under the “essential services” guidelines issued by many states. In mid-May, the company extended its $2 an hour “hazard pay bonuses” through the end of the month. Amazon confirmed that it will return to standard salaries, come June, stating: 

To thank employees and help meet increased demand, we’ve paid our team and partners nearly $800 million extra since COVID-19 started while continuing to offer full benefits from day one of employment. With demand stabilized, next month we’ll return to our industry-leading starting wage of $15 an hour.

The company has been subject to additional scrutiny over the firing of several employees that have raised public concerns over its treatment of workers during the crisis. While Amazon has repeatedly denied the firings were retaliation, the reports were enough to warrant another letter, this time from a number of high-profile senators, including Elizabeth Warren and Bernie Sanders.

SaaS stocks are at it again, and I think I’ve got it figured it out.

More precisely I think I’ve figured out what other people think is going on. After rigorous fact-checking by both reading tweets, making VCs talk to me on the phone, and chatting with the CEO of a $27 billion cloud company this morning, it all makes sense.

Some background to start, I think.

Today, Friday the 21st of May, the day after the economy shed another 2.4 million jobs, bringing the COVID-19 jobs-lost tally to nearly 40 million, SaaS and cloud stocks reached yet another all-time high, as measured by the Bessemer cloud index.

That particular basket of stocks is the best thing we have to understand how public investors are valuing SaaS companies at any given moment. And as I’ve made you read ad nauseam, public SaaS valuations impact private SaaS valuations; the mechanism is a little slow, as Bessemer’s Mary D’Onofrio explained here, but when SaaS stocks surge or fall, startup SaaS valuations move as well.

Another record today after several preceding records this week seems odd, given the world. Sure, the stock market is largely recovered from its March-era, COVID-19-driven lows, but successive new records are more gauche than merely working to get back to flat, as other public equity cohorts have generally managed (not all, mind).

That we’re at a record is more than my idea, or Bessemer’s — Meritech Capital wrote earlier this week that “we are now sitting at the all-time peak of public SaaS valuations in the midst of a global pandemic.” But don’t think that these valuations predicated on companies promising more growth. As the same Meritech report states: “Generally speaking, the outlooks of these businesses haven’t changed that much since February, except for Q1 earnings where, in almost all cases, management waved a yellow caution flag to investors and withdrew or lowered guidance.”

Wild, right?

There are some warning signs that growth is going to slow, as Redpoint’s Jamin Ball noted on Twitter:

But who cares! Not the markets. It’s time for some new fucking records, y’all.

Let’s talk about why this is all happening.

The Hybrid Theory Of COVID-19 Era SaaS Valuations

This is my third post in what I suppose is now a series on this stuff (more here and here), so we’re largely building on prior foundations while adding a little.

Here’s the argument in a multi-bullet nutshell:

• Investors want to buy into growth, and while many companies are struggling to grow at all, digital whatnot is still performing reasonably well, so capital is flowing from other equities into the shares of digital companies, many of which are SaaS companies. This trend is accelerated by:
• ZIRP, or the era of free money. After a hot second of rising rates (quickly brow-beaten by POTUS and then whacked by an economy in free fall), money once again costs nothing and thus yields are hot garbage. This has led investors to look for any place to stuff their lucre that might provide some sort of return. So, capital is moving away from safer stuff (boo, safety!) and is instead flowing where some return might be found. Like SaaS.
• The above two (rather related) points are made a little bit more reasonable by the fact that the digital transformation that CEOs and CTOs and every webinar you’ve ever been invited to is now going at warp speed. Like, no shit, it’s a real thing, not just something that Levie tweets about when his engagement numbers dip. That acceleration is making investors very excited about what might come later. So SaaS stocks go up.

This morning I spent 30 minutes yammering with Splunk’s CEO Doug Merritt. It went pretty well. After digging through his company’s earnings report (SaaS transformation continues, some revenue recognition headwinds, lots of cash, good ARR growth, and the company spends heavily spreading stock around to all its workers, which I dig) I asked him about whether the digital transformation stuff that he mentioned in Splunk’s earnings letter is actually making stuff move to the cloud faster, and thus boosting SaaS stocks.

He assented.

So, what’s powering the SaaS rally, stretching valuations to comical levels — recall that we’re always valuing SaaS and cloud companies on revenue, and not profit multiples, so they’re always graded on a comfortable curve — is two parts greed (capital rotation into SaaS stocks from other equities, and ZIRP limiting return to only a few asset buckets) and one part common sense (if SaaS companies are riding the digital transformation trend, an acceleration thereof could raise their long-term growth prospects).

Got it?

Anyway I’m on vacation for the next week as soon as this hits the internet. Have fun, everyone, and let me know what happens to SaaS stocks. Pretty sure my partner will end me if I keep up to speed on the stock market when I’m supposed to be napping. Hugs.

Organizers of the New York International Auto Show, once hoping to hold the rescheduled event to August, have decided to scrap the entire year. The show has been officially canceled for 2020 due to the COVID-19 pandemic, organizers announced Friday.

The next show will take place April 2 to April 11, 2021. Press days will be March 31 and April 1.

The New York Auto Show, which is organized by the Greater New York Automobile Dealers Association, was scheduled to begin April 10 at the Jacob K. Javits Convention Center in New York City. The event was rescheduled for late August after COVID-19 swept into Europe and North America.

The Jacob K. Javits Convention Center, the traditional location for the show, was set up as a field hospital for COVID-19 cases. The center doesn’t have any patients. However, it is still set up as an active hospital and is in standby mode for the foreseeable future, according to organizers.

Mark Schienberg, president of the Greater New York Automobile Dealers Association, noted that “immense planning” is needed for automakers and their exhibit partners to construct a show.

“Because of the uncertainty caused by the virus, we feel it would not be prudent to continue with the 2020 Show and instead are preparing for an even greater 2021,” Schienberg said.

“As representatives of automobile retailers, we know when this crisis passes there will be enormous pent-up demand for new vehicles in this region and across the country,” he added. “We also know how important the Show is for consumers navigating the process.”

The debate over encryption continues to drag on without end.

In recent months, the discourse has largely swung away from encrypted smartphones to focus instead on end-to-end encrypted messaging. But a recent press conference by the heads of the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) showed that the debate over device encryption isn’t dead, it was merely resting. And it just won’t go away.

At the presser, Attorney General William Barr and FBI Director Chris Wray announced that after months of work, FBI technicians had succeeded in unlocking the two iPhones used by the Saudi military officer who carried out a terrorist shooting at the Pensacola Naval Air Station in Florida in December 2019. The shooter died in the attack, which was quickly claimed by Al Qaeda in the Arabian Peninsula.

Early this year — a solid month after the shooting — Barr had asked Apple to help unlock the phones (one of which was damaged by a bullet), which were older iPhone 5 and 7 models. Apple provided “gigabytes of information” to investigators, including “iCloud backups, account information and transactional data for multiple accounts,” but drew the line at assisting with the devices. The situation threatened to revive the 2016 “Apple versus FBI” showdown over another locked iPhone following the San Bernardino terror attack.

After the government went to federal court to try to dragoon Apple into doing investigators’ job for them, the dispute ended anticlimactically when the government got into the phone itself after purchasing an exploit from an outside vendor the government refused to identify. The Pensacola case culminated much the same way, except that the FBI apparently used an in-house solution instead of a third party’s exploit.

You’d think the FBI’s success at a tricky task (remember, one of the phones had been shot) would be good news for the Bureau. Yet an unmistakable note of bitterness tinged the laudatory remarks at the press conference for the technicians who made it happen. Despite the Bureau’s impressive achievement, and despite the gobs of data Apple had provided, Barr and Wray devoted much of their remarks to maligning Apple, with Wray going so far as to say the government “received effectively no help” from the company.

This diversion tactic worked: in news stories covering the press conference, headline after headline after headline highlighted the FBI’s slam against Apple instead of focusing on what the press conference was nominally about: the fact that federal law enforcement agencies can get into locked iPhones without Apple’s assistance.

That should be the headline news, because it’s important. That inconvenient truth undercuts the agencies’ longstanding claim that they’re helpless in the face of Apple’s encryption and thus the company should be legally forced to weaken its device encryption for law enforcement access. No wonder Wray and Barr are so mad that their employees keep being good at their jobs.

By reviving the old blame-Apple routine, the two officials managed to evade a number of questions that their press conference left unanswered. What exactly are the FBI’s capabilities when it comes to accessing locked, encrypted smartphones? Wray claimed the technique developed by FBI technicians is “of pretty limited application” beyond the Pensacola iPhones. How limited? What other phone-cracking techniques does the FBI have, and which handset models and which mobile OS versions do those techniques reliably work on? In what kinds of cases, for what kinds of crimes, are these tools being used?

We also don’t know what’s changed internally at the Bureau since that damning 2018 Inspector General postmortem on the San Bernardino affair. Whatever happened with the FBI’s plans, announced in the IG report, to lower the barrier within the agency to using national security tools and techniques in criminal cases? Did that change come to pass, and did it play a role in the Pensacola success? Is the FBI cracking into criminal suspects’ phones using classified techniques from the national security context that might not pass muster in a court proceeding (were their use to be acknowledged at all)?

Further, how do the FBI’s in-house capabilities complement the larger ecosystem of tools and techniques for law enforcement to access locked phones? Those include third-party vendors GrayShift and Cellebrite’s devices, which, in addition to the FBI, count numerous U.S. state and local police departments and federal immigration authorities among their clients. When plugged into a locked phone, these devices can bypass the phone’s encryption to yield up its contents, and (in the case of GrayShift) can plant spyware on an iPhone to log its passcode when police trick a phone’s owner into entering it. These devices work on very recent iPhone models: Cellebrite claims it can unlock any iPhone for law enforcement, and the FBI has unlocked an iPhone 11 Pro Max using GrayShift’s GrayKey device.

In addition to Cellebrite and GrayShift, which have a well-established U.S. customer base, the ecosystem of third-party phone-hacking companies includes entities that market remote-access phone-hacking software to governments around the world. Perhaps the most notorious example is the Israel-based NSO Group, whose Pegasus software has been used by foreign governments against dissidents, journalists, lawyers and human rights activists. The company’s U.S. arm has attempted to market Pegasus domestically to American police departments under another name. Which third-party vendors are supplying phone-hacking solutions to the FBI, and at what price?

Finally, who else besides the FBI will be the beneficiary of the technique that worked on the Pensacola phones? Does the FBI share the vendor tools it purchases, or its own home-rolled ones, with other agencies (federal, state, tribal or local)? Which tools, which agencies and for what kinds of cases? Even if it doesn’t share the techniques directly, will it use them to unlock phones for other agencies, as it did for a state prosecutor soon after purchasing the exploit for the San Bernardino iPhone?

We have little idea of the answers to any of these questions, because the FBI’s capabilities are a closely held secret. What advances and breakthroughs it has achieved, and which vendors it has paid, we (who provide the taxpayer dollars to fund this work) aren’t allowed to know. And the agency refuses to answer questions about encryption’s impact on its investigations even from members of Congress, who can be privy to confidential information denied to the general public.

The only public information coming out of the FBI’s phone-hacking black box is nothingburgers like the recent press conference. At an event all about the FBI’s phone-hacking capabilities, Director Wray and AG Barr cunningly managed to deflect the press’s attention onto Apple, dodging any difficult questions, such as what the FBI’s abilities mean for Americans’ privacy, civil liberties and data security, or even basic questions like how much the Pensacola phone-cracking operation cost.

As the recent PR spectacle demonstrated, a press conference isn’t oversight. And instead of exerting its oversight power, mandating more transparency, or requiring an accounting and cost/benefit analysis of the FBI’s phone-hacking expenditures — instead of demanding a straight and conclusive answer to the eternal question of whether, in light of the agency’s continually-evolving capabilities, there’s really any need to force smartphone makers to weaken their device encryption — Congress is instead coming up with dangerous legislation such as the EARN IT Act, which risks undermining encryption right when a population forced by COVID-19 to do everything online from home can least afford it.

The best–case scenario now is that the federal agency that proved its untrustworthiness by lying to the Foreign Intelligence Surveillance Court can crack into our smartphones, but maybe not all of them; that maybe it isn’t sharing its toys with state and local police departments (which are rife with domestic abusers who’d love to get access to their victims’ phones); that unlike third-party vendor devices, maybe the FBI’s tools won’t end up on eBay where criminals can buy them; and that hopefully it hasn’t paid taxpayer money to the spyware company whose best-known government customer murdered and dismembered a journalist.

The worst-case scenario would be that, between in-house and third-party tools, pretty much any law enforcement agency can now reliably crack into everybody’s phones, and yet nevertheless this turns out to be the year they finally get their legislative victory over encryption anyway. I can’t wait to see what else 2020 has in store.

Working from home isn’t going anywhere anytime soon, and a slew of companies just announced longer-term initiatives to make their remote work practices either extend or permanent. That means for some it’s the perfect time to take their at-home videoconferencing setup even further, so we’re going to take a closer look at various core elements to build on our initial exploration of what can help you improve your video call or live broadcasting game. Today, it’s all about audio.

Microphone basics

In our initial feature, I highlighted some great entry-level options for add-on pics that you can use to produce better sound than what your Mac or PC can produce alone. Those included the Samson Meteor Mic, a longstanding favorite that connects directly via USB and that produces great, full-bodied sound without any customization required.

There’s also the Rode Wireless GO, a simple and affordable wireless mic pack kit that you can use on its own, or pair with a lavalier like the Rode Lavalier GO for a bit better sound. Rode also makes a great USB mic, that, like the Meteor Mic, just works and comes in at around $100 – the Rode NT-USB Mini. It features some design decisions like a magnetic desk stand that could make it more flexible for use for certain setups vs. the Meteor Mic, and the sound it produces is also fantastic.

To improve your Rode Wireless GO setup a bit further, or to use a wired lavalier-style wearable mic plugged directly into your computer or audio interface, there are a couple of great options available from Sennheiser that provide subtle but noticeable sound quality improvements no matter how you’re using them.

The Sennheiser MKE Essential Omni is a great lavalier mic that’s often used in stage productions and other professional settings, with a tiny profile that you can pretty easily hide in clothing using the included clip, or even in hair, or in tandem with an earset holder for putting it right on your cheek next to your mouth. You’ll get slightly different sound profiles depending on how you wear it, but it generally produces great, warm sound and doesn’t cost too much at just under $200 (on the relative scale of sound equipment prices).

Sennheiser’s ME 2-II is another, lower-cost option at $129.95 that also produces great results, and works with with wireless transmitters like the Rode Wireless GO, but it’s a bit less warm and present than the MKE Essential.

Getting serious about sound

High-end lavalier mics are already starting to get into high expense territory, but as with most audio equipment, the sky’s the limit here. That’s also true for shotgun microphones, which is another option for rigging your setup for the best possible audio without compromising on things like unsightly microphones in frame, or some of the trade-offs that come with using very physically small microphones like lavalier and lapel mics.

In our original post, I talked about using a Rode VideoMic NTG as one option, and that is indeed a great, mid-level shotgun mic to experiment with, with the added benefit of being terrific for use on-camera in the field thanks to its built in battery, compact dimensions and intelligent compatibility with a range of modern cameras.

But for home studio use, there are shotgun mics that are much more appropriate to the task. The Rode NTG3 is a personal favorite, and a popular standard in the broadcast and film industries – for good reason. The NTG3 is a tubular mic with a standard XLR output, that required 48v phantom power and that is perfect for videos shooting scenarios where you’re staying relatively still in a fixed location with cameras also mounted in fixed positions – ie., exactly how most people have their home working spaces set up.

The Rode NTG3 is a bit of a budget-buster, however – it’s $699, which is more than even some very high-quality standard podcasting mics out there. But for the price, you get an extremely high-quality piece of hardware, that has built-in moisture resistance for shooting outdoors if that’s ever something you want to do, and that sounds great even when mounted out of sight beyond the frame of your camera’s lens.

It’s also supercardioid in its pickup pattern, which means it does an excellent job of picking up sound directly in front of it, but not sound to either side. That’s a great advantage to have in most shared home office spaces, just like it is with on-location film shoots.

Another top option that’s a popular favorite, and that comes in at a lower price point, is the Sennheiser MKE 600. At around $330, it’s roughly have the price of the NTG3, and it has a built-in battery in case you want to take it with you and plug it into your camera. It also uses XLR, which means you’ll need a preamp like the Focusrite 2i2 or the recently released Audient EVO 4 to make it work with your computer (or the iRig Pre if you’re running it to a deck like the Blackmagic ATEM Mini, as I was).

The sound from the MKE 600 is still top notch, but it doesn’t do quite as good a job as the NTG3 of eliminating any self-noise, and of capturing a deep, rich tone that’s suitable to deeper voices. You can check out a comparison of both boom mics, along with the Sennheiser MKE Essential, in the video below.

Another option is to use a pole or boom-mounted mic like you generally see podcasters or radio personalities use. These include popular options like the Shure SM7B, which you’ll probably recognize immediately from its distinct profile. I’m partial to the Shure Beta 87A supercardioid mic for home recording of audio podcasts, but as you can see from the video below, there are some reasons that you might not want to use it for live video conferences, meetings or events – even if it sounds great even untreated.

There are a range of other options, of course – including differently priced options from both Rode and Sennheiser, most of which offer great quality for what you pay. The nature of audio is that it’s also a highly personal preference, with different people preferring sound that’s either favors the higher end, the low end, or that’s more or less balanced, so it’s going to take a lot of comparison shopping and listening to samples to figure out what works for you.

Bottom line

In the end, sticking to quality brands with established reputations in the film and video industries is a great way to get make the most of your setup. Mics like those I use above benefit even more from physical sound isolation, including measures that are fairly easy to accomplish, like laying down carpets and towels, as well as more advanced practices, like picking up dedicated sound isolating materials including foam pads and mounting them on your walls.

Sound is probably the trickiest part of any videoconferencing or virtual event setup to get right – it’s as much art as it is science, and there are a lot of variables that are hard to control, even with the best equipment, especially in live settings. But going the extra mile can mean the difference between coming across polished and professional, and appearing unprepared, which is bound to make a difference in our increasingly virtual face-to-face world.

High quality data is the fuel that powers AI algorithms. Without a continual flow of labeled data, bottlenecks can occur and the algorithm will slowly get worse and add risk to the system.

It’s why labeled data is so critical for companies like Zoox, Cruise and Waymo, which use it to train machine learning models to develop and deploy autonomous vehicles. That need is what led to the creation of Scale AI, a startup that uses software and people to process and label image, lidar and map data for companies building machine learning algorithms. Companies working on autonomous vehicle technology make up a large swath of Scale’s customer base, although its platform is also used by Airbnb, Pinterest and OpenAI, among others.

The COVID-19 pandemic has slowed, or even halted, that flow of data as AV companies suspended testing on public roads — the means of collecting billions of images. Scale is hoping to turn the tap back on, and for free.

The company, in collaboration with lidar manufacturer Hesai, launched this week an open source dataset called PandaSet that can be used for training machine learning models for autonomous driving. The dataset, which is free and licensed for academic and commercial use, includes data collected using Hesai’s forward-facing PandarGT lidar with image-like resolution as well as its mechanical spinning lidar known as Pandar64. The data was collected while driving urban areas in San Francisco and Silicon Valley before officials issued stay-at-home orders in the area, according to the company.

“AI and machine learning are incredible technologies with an incredible potential for impact, but also a huge pain in the ass,” Scale CEO and co-founder Alexandr Wang told TechCrunch in a recent interview. “Machine learning is definitely a garbage in, garbage out kind of framework — you really need high quality data to be able to power these algorithms. It’s why we built Scale and it’s also why we’re using this dataset today to help drive forward the industry with an open source perspective.”

The goal with this lidar dataset was to give free access to a dense and content-rich dataset, which Wang said was achieved by using two kinds of lidars in complex urban environments filled with cars, bikes, traffic lights and pedestrians.

“The Zoox and the Cruises of the world will often talk about how battle-tested their systems are in these dense urban environments,” Wang said. “We wanted to really expose that to the whole community.”

Image Credits: Scale AI

The dataset includes more than 48,000 camera images and 16,000 LiDAR sweeps — more than 100 scenes of 8s each, according to the company. It also includes 28 annotation classes for each scene and 37 semantic segmentation labels for most scenes. Traditional cuboid labeling, those little boxes placed around a bike or car, for instance, can’t adequately identify all of the lidar data. So, Scale uses a point cloud segmentation tool to precisely annotate complex objects like rain.

Open sourcing AV data isn’t entirely new. Last year,  Aptiv and Scale released nuScenes, a large-scale data set from an autonomous vehicle sensor suite. Argo AI, Cruise and Waymo were among a number of AV companies that have also released data to researchers. Argo AI released curated data along with high-definition maps, while Cruise shared a data visualization tool it created called Webviz that takes raw data collected from all the sensors on a robot and turns that binary code into visuals.

Scale’s efforts are a bit different; For instance, Wang said the license to use this dataset doesn’t have any restrictions.

“There’s a big need right now and a continual need for high quality labeled data,” Wang said. “That’s one of the biggest hurdles overcome when building self driving systems. We want to democratize access to this data, especially at a time when a lot of the self driving companies can’t collect it.”

That doesn’t mean Scale is going to suddenly give away all of its data. It is, after all a for-profit enterprise. But it’s already considering collecting and open sourcing fresher data later this year.