Author: azeeadmin

Sometimes the smallest innovations can have the biggest impacts on the world’s efforts to stop global climate change. Arguably, one of the biggest contributors in the fight against climate change to date has been the switch to the humble LED light, which has slashed hundreds of millions of tons of carbon dioxide emissions simply by reducing energy consumption in buildings.

And now firms backed by Robert Downey Jr. and Bill Gates are joining investors like Amazon and iPod inventor Tony Fadell to pour money into a company called Turntide Technologies that believes it has the next great innovation in the world’s efforts to slow global climate change — a better electric motor.

It’s not as flashy as an arc reactor, but like light bulbs, motors are a ubiquitous and wholly unglamorous technology that have been operating basically the same way since the nineteenth century. And, like the light bulb, they’re due for an upgrade.

“Turntide’s technology and approach to restoring  our planet will directly reduce energy consumption,” said Steve Levin, the co-founder (along with Downey Jr. ) of FootPrint Coalition Ventures. 

The operation of buildings is responsible for 40% of CO2 emissions worldwide, Turntide noted in a statement. And, according to the U.S. Department of Energy (DOE), one-third of energy used in commercial buildings is wasted. Smart building technology adds an intelligent layer to eliminate this waste and inefficiency by automatically controlling lighting, air conditioning, heating, ventilation and other essential systems and Turntide’s electric motors can add additional savings.

That’s why investors have put over $100 million into Turntide in just the last six months.

PARIS, FRANCE – JUNE 16: Tony Fadell Inventor of the iPod and Founder and former CEO of Nest attends a conference during Viva Technology at Parc des Expositions Porte de Versailles on June 16, 2017 in Paris, France. Viva Technology is a fair that brings together, for the second year, major groups and startups around all the themes of innovation. (Photo by Christophe Morin/IP3/Getty Images)

The company, led by chief executive and chairman Ryan Morris is commercializing technology that was developed initially at the Illinois Institute of Technology.

Turntide’s basic innovation is a software controlled motor, or switch reluctance motor, that uses precise pulses of energy instead of a constant flow of electricity. “In a conventional motor you are continuously driving current into the motor whatever speed you want to run it at,” Morris said. “We’re pulsing in precise amounts of current just at the times when you need the torque… It’s software defined hardware.” 

The technology spent eleven years under development, in part because the computing power didn’t exist to make the system work, according to Morris.

Morris was initially part of an investment firm called Meson Capital that acquired the technology back in 2013, and it was another four years of development before the motors were actually able to function in pilots, he said. The company spent the last three years developing the commercialization strategy and proving the value in its initial market — retrofitting the heating ventilation and cooling systems in buildings that are the main factor in the built environment’s 28% contribution to carbon dioxide emissions that are leading to global climate change.

“Our mission is to replace all of the motors in the world,” Morris said.

He estimates that the technology is applicable to 95% of where electric motors are used today, but the initial focus will be on smart buildings because it’s the easiest place to start and can have some of the largest immediate impact on energy usage. 

“The carbon impact of what we’re doing is pretty massive,” Morris told me last year. “The average energy reduction [in buildings] has been a 64% reduction. If we can replace all the motors in buildings in the US that’s the carbon equivalent of adding over 300 million tons of carbon sequestration per year.”

That’s why Downey Jr.’s Footprint Coalition, and Bill Gates’ Breakthrough Energy Ventures and the real estate and construction focused venture firm Fifth Wall Ventures have joined the Amazon Climate Fund, Tony Fadell’s Future Shape, BMW’s iVentures fund and a host of other investors in backing the company.

The company has raised roughly $180 million in financing including the disclosure today of an $80 million investment round, which closed in October.

Buildings are clearly the current focus for Turntide, which only yesterday announced the acquisition of a small Santa Barbara, Calif.-based building management software developer called Riptide IO. But there’s also an application in another massive industry — electric vehicles.

“Two years from now we will definitely be in electric vehicles,” Morris said. 

“Our technology has huge advantages for the electric vehicle industry. There’s no rare earth minerals. Every EV uses rare earth minerals to get better performance of their electric motors,” he continued. “They’re expensive, destructive to mine and China controls 95 percent of the global supply chain for them. We do not use any exotic materials, rare earth minerals or magnets.. We’re replacing that with very advanced software and computation. It’s the first time Moore’s law applies to the motor.”

Robotic process automation has taken the enterprise world by storm, by providing a set of tools for those doing repetitive, volume-based tasks to use software to remove some of that labor to let those people focus on more complicated tasks. Today a startup that’s taken some of that ethos and is applying it to more individualized work — that of salespeople — is announcing some funding.

Dooly, a Vancouver, Canada-based startup that has built a set of AI-based tools that automate the busywork that goes into updating data in their sales software, and namely Salesforce — has picked up $20 million in funding to build out its business, which to date has picked up a number of customers among the sales teams of enterprise-focused software companies. They include Intercom, Contentful, Vidyard, BigCommerce, Liftoff and CrowdRiff.

Its aim is to make sales software more useful for salespeople by eliminating the work that goes into inputting data into those systems.

“Really they’ve just created a mountain of virtual filing cabinets,” Kris Hartvigsen, Dooly’s founder and CEO, said in an emailed interview with me. “Filing cabinets just wait for drawers to be opened — or in the case of enterprise software, reports to be pulled and data to be input. We know people are capturing information across the business and our job is to make sure that the people and systems across the business have a better, faster, more far-reaching way of staying informed.”

The funding is being announced today, but it was actually raised in two tranches that had not previously been disclosed. A $3.3 million seed round was led by boldstart ventures and also included BoxGroup. Its $17 million Series A, meanwhile, was led by Addition, with boldstart and BoxGroup again participating, along with Battery Ventures, Mantis (representing musicians The Chainsmokers), and SV Angel.

Alongside the VCs, there are a number of interesting strategic individual investors, too. Daniel Dines and Brandon Deer of UIPath (the RPA connection clearly is not one that I’m imagining!); Allison Pickens, the ex-COO Gainsight; Zander Lurie of SurveyMonkey); Jay Simons, ex-CEO of Atlassian); Harry Stebbings, and other unnamed investors are all also involved. Ed Sim of Boldstart is joining Dooly’s board of directors with this announcement.

The challenge that Dooly has been built to solve is that while there are a lot of tools out there now to help salespeople source leads, manage the progress of their sales, give them advice and other helpful material to supplement their charm and the basic strength of a product, manage customers once they’ve signed on, and so on, all of them still require something important to work: a time commitment from salespeople to keep them updated with information. Ironically, the more tools to help them that are built, the more time salespeople need to spend feeding them data.

Even more ironically, one of the big daddies of the problem — the somewhat overweight Salesforce — has published figures (cited by Dooly) that say salespeople spend just 34% of their time selling. The rest (minus trips to get coffee to stay caffeinated) seems to be about data entry.

The idea with Dooly is that you turn it on, connect it to what you are using — starting with Salesforce — and Dooly lets you make notes which it then organises and puts into the right places in the rest of your apps.

“When a salesperson starts using Dooly, the ‘aha moment’ is pretty immediate,” Hartvigsen said. “Whether they want to do quick pipeline edits or push their notes to Salesforce, we don’t ask the user to learn any new patterns they aren’t familiar with, we just automate a bunch of things they hate doing, often comparing those traditional chores to clerical work.” For example, he notes, when they sync a note, Dooly automatically updates any Salesforce with any contacts found in the meeting, update fields, add in to-do’s, log activities, push messages to the appropriate internal stakeholders on Slack, all in the same motion.

The product currently also integrates with Slack, G-Cal, and G-Drive, because, Hartvigsen said, “we see this as an area where there is the most immediate friction and an area that was in need of disruption.” He added that the plans is to add more integrations over time. “We see need to expand the solutions that anchor to our connected workspace, with our near-term focus being the systems that touch revenue teams,” he said.

The design of Dooly seems to be about investing a little in order to save more. On average people are using Dooly between 2.5 and 5 hours each week, but Hartvigsen claims that right now the system helps people make up for more hours each week in lost productivity. Its pricing starts at $25 per user per month, going up depending on features and use.

There are quite literally thousands of products out in the market today, and among them hundreds of strong ones, being built to help salespeople with different aspects of getting their jobs done. I’ve written about quite a few of them, and I’ve actually asked companies about whether they are tackling the very issue that Dooly has identified and is trying to fix.

They weren’t, but that doesn’t mean that they won’t. Chief among them are companies like UiPath and Salesforce, which sit on different sides of this problem and could well move into it as they keep growing. (Having UiPath as a backer by way of its founders means there is a relationship there, which is interesting.)

In the meantime, there have been some other interesting innovations using AI to improve the sales process, with companies like Pipedrive, Clari, Seismic, Chorus.ai and Gong all using natural language, machine learning, and big data analytics (itself helped by AI) to improve how sales get done.

“The first thing we noticed when we met the Dooly team was the thoughtful design first approach to product that engendered tons of customer love. This love was inherent not only on popular ratings sites like G2 Crowd but also in the individual usage and viral adoption throughout companies with only one initial user,” said Ed Sim, Founder and Managing Partner at boldstart ventures in a statement. “Dooly is revolutionizing the note-taking experience for customer facing end users from sales to customer success to product.”

“Dooly is relentlessly focused on building a user-first experience for its customers to seamlessly create workflows and unlock new revenue opportunities,” said Lee Fixel, Founder of Addition, added. “We are thrilled to support Dooly as it continues to scale and enhance the sales function for more businesses.”

When merchants launch their e-commerce businesses, they can easily manage the end-to-end operations in the early stages. But as they begin to grow, managing their own operations, from warehousing and logistics to delivery and cash collection, can become difficult. This can prevent them from scaling effectively despite having a steady inflow of demand.

Now, there’s a need to offload some of this workload. This is where e-commerce fulfillment services come in handy.

Today, Flextock, one such company providing this service to businesses and consumers in Egypt, is announcing that it is part of Y Combinator’s Winter 2021 batch. Founded by Mohamed Mossaad and Enas Siam in September 2020, the Egyptian company launched in stealth this January.

According to COO Siam, the founders noticed that as e-commerce activities in the Middle East and North African regions accelerated due to the pandemic, merchants were left overwhelmed with the volume of orders they received.

“We saw it as an opportunity to build a tech-enabled platform to be able to help anyone that wanted to grow their own independent brand or store,” she told TechCrunch. “We wanted them to focus on their products and marketing while leaving the supply chain and logistics bit to us, which we do through our end-to-end proprietary software.”

Mossaad, the company’s CEO, describes Flextock as a tech-enabled fulfillment provider. When merchants sign up to the platform, they send their products to one of the company’s fulfillment centers. Flextock takes the whole catalog and tags the products for tracking purposes. Then, integration is made between Flextock and any online store they use, be it Shopify, WooCommerce, Wix and Odoo, among others. 

As orders are made, Flextock packages and ships the products from the fulfillment center to the customers. Flextock doesn’t own any delivery vehicles, so to achieve this, the company partners with existing logistics companies in Egypt. This model has helped the startup to create a marketplace for different last-mile delivery companies in the country.

Image Credits: Flextock

There’s also a dashboard for these merchants to track each order, get more visibility into their shipping process and know how well their products sell.

Flextock makes money on a per-order basis. That means the merchants on the platform pay a flat fee that changes with respect to the volume of products moved.

Mossaad says that since the company beta launched in January with more than 20 businesses, it has been growing 50% week on week. It has also completed over 300,000 orders across 28 cities in the country.

According to the CEO, Flextock is the first end-to-end fulfillment service in Egypt. And in a market that will likely see more competition in the next couple of years, Mossaad thinks Flextock has the opportunity to become the market leader.

Behind this rationale is that the six-month-old startup is backed by Y Combinator and has also raised $850,000 which is just the first part of its million-dollar pre-seed round that will close sometime this year.

“We were able to very quickly get the acceptance of YC given the size of the opportunity we are focused on. We believe that commerce is expected to change in the Middle East and Africa, and Flextock is going to be at the forefront of powering this next generation of commerce,” he said.

The founders combine a wealth of corporate experience and a strong track record of scaling tech startups in the MENA region.

L-R: Mohamed Mossaad (CEO) and Enas Siam (COO)

Siam started her career managing supply operations at Nestle across the Middle East and North Africa. Later, she became the General Manager of Careem Bus, a mass-transit service and Uber subsidiary, where she helped build the product from scratch and grew it to 150,000 monthly rides in a year.

Mossaad, on the other hand, has worked on multiple turnarounds across different African countries during his time at Bain & Company. He joined Egyptian online food delivery platform, Elmenus, as Chief Strategy Officer. He helped scale the company’s revenues 5x in less than a year and was instrumental to its $8 million Series B round.

The CEO says Flextock has its sights on other African and Middle Eastern markets — specifically Saudi Arabia — and the plan is to provide its services to over 1 million businesses in these regions over the next decade.

“We are on a mission to enable more than 1 million merchants in Africa and the Middle East to sell online without carrying out the hassle of running their own operations. We are well-positioned to do that, and hopefully, we will be able to achieve that in a record time.”

In China’s cosmetics world, where foreign brands were historically revered, indigenous startups are increasingly winning over Gen-Z consumers with cheaper, more localized options. One of the rising stars is the direct-to-consumer brand Perfect Diary, which is owned by five-year-old startup Yatsen.

Yatsen impressed the capital market with a $617 million initial public offering on NYSE in November. Its flagship brand Perfect Diary consistently ranks among the top makeup brands by online sales next to giants like L’Oreal and Shiseido. Now the company is plotting another big move as it set out to buy Eve Lom, a 35-year-old skincare brand owned by British private equity firm, Manzanita Capital.

On Wednesday, Yatsen, named after the father of modern China, Sun Yat-sen, announced it has entered into a definitive agreement to acquire Eve Lom, which is known for its cleanser. The deal is expected to close within the next few weeks and Manzanita will retain a minority stake in the business and serve as a strategic partner.

The size of the deal wasn’t disclosed but Bloomberg reported in February that Manzanita was looking to sell Eve Lom for as much as $200 million.

Perfect Diary rose to prominence in China by partnering with influencers who reviewed the brand’s lipsticks, eyeshadow palettes, foundation and other products on Chinese social commerce platforms like Xiaohongshu. It took advantage of its vicinity to China’s abundant cosmetics and packaging suppliers, many of whom also work with top international brands. The strategies have allowed Perfect Diary to offer affordable prices without compromising quality, and earn it the moniker, “Xiaomi for cosmetics.”

Growth has skyrocketed at Yatsen since its founding. Its gross sales more than quadrupled to 3.5 billion yuan ($540 million) in 2019 from 2018, thanks to an effective e-commerce strategy. But losses also ballooned. The company recorded a net loss of 1.16 billion yuan ($170 million) in the nine months ended September 2020, compared to a net income of 29.1 million yuan in the year before.

Yatsen has been on the hunt for potential acquisitions to diversify its product portfolio, as it noted in its prospectus. Through the Eve Lom marriage, the company hopes to “enrich our global brand-building capabilities and product offerings,” said Jinfeng Huang, founder and CEO of Yatsen in the announcement.

Yatsen has already embarked on international expansion, landing in Southeast Asia first where it is selling on e-commerce sites like Shopee. It said in the prospectus that it plans on “selectively cooperating with local partners to accelerate our international expansion and localize our product offerings.” In the competitive and entrenched makeup world, Yatsen’s overseas expedition is definitely a curious one to watch.

In a year where mass transit on airplanes, trains and buses has had lower traveler numbers in the wake of the Covid-19 pandemic, one of the startups hoping to pioneer a totally new approach to getting individuals from A to B — flying taxis — has raised some significant funding.

Volocopter, a startup out of southern Germany (Bruchsal, specifically) that has been building and testing electric VTOL (vertical take-off and landing) aircraft, has picked up €200 million (about $241 million) in a Series D round of funding. Alongside its aircraft, Volocopter has also been building a business case in which its vessels will be used in a taxi-style fleet in urban areas. CEO Florian Reuter tells us that live services are now two years out for the two vehicle models it has been developing.

“We are actually expecting to certify our VoloCity in around two years and start commercial air taxi operations right after,” he said. “Paris and Singapore are in pole position [as the first cities], where Paris wants to get have electric air taxis established for the 2024 Olympics. With our VoloDrone we expect first commercial flights even earlier than with our VoloCity.”

To date, Volocopter has shown off its craft in flights in Helsinki, Stuttgart, Dubai, and over Singapore’s Marina Bay. In addition to Europe and Asia, it also wants to launch services in the U.S..

For some context, this is basically on track with what the company had previously projected: in 2019 — when Volocopter raised an initial $55 million in funding for its Series C (finally closed out at €87 million, around $94 million) — the company said it was three years away from service.

This latest (oversubscribed) Series D includes investments from a mix of financial and strategic backers. Funds managed by BlackRock; global infrastructure company Atlantia S.p.A.; Avala Capital; automotive parts behemoth Continental AG; Japan’s NTT via its venture capital arm; Tokyo Century, a Japanese leasing company; multiple family offices are all new investors, among others. Volocopter also said that all of its existing investors — that list includes Geely, Daimler, DB Schenker, Intel Capital, btov Partners, Team Europe, and Klocke Holding and more — also contributed to the round.

If that sounds like a big list, it’s somewhat intentional, as the task of what Volocopter is complex and requires a wide ecosystem of other players, said Rene Griemens, the company’s CFO.

“Getting urban air mobility off the ground requires a full ecosystem that we are developing right now. Many of our strategic partners will support us on different aspects of the supply chain, scaling components, entering markets, improving operations amongst others. Most of them know certain aspects of our business model really well (eg. Japan Airlines for aviation, Atlantia for infrastructure),” he said. “Their investment is a reflection of their excitement about Volocopter as a leader in building the entire ecosystem of UAM, thereby giving credibility and comfort for purely financial investors.”

He added that many of these companies have a very “hands-on partnership” with Volocopter. “DB Schenker, for example, is rolling out leading-edge heavily-load electric logistics drones together with us around the globe.”

The company has now raised nearly $390 million. We’re asking for an updated valuation, but for some context, PitchBook data estimates its valuation now at $624 million.

Founded in 2011, Volocopter has now been working on its idea — distinctive for its very wide circular design that sits where the rotor on a helicopter would be — for a whole decade, and in many regards it’s the classic idea of a moonshot in action.

It has yet to make any money, and the product that it’s building to do so is very groundbreaking — flying into completely unchartered territory, so to speak — and therefore ultimately untested. It’s not the only one working on “flying taxi” concepts — there are other very well-capitalised companies like Lilum, Joby Aviation, Kitty Hawk and eHang.

However, all of these have faced various hurdles ranging from investor lawsuits to mothballed projects, crashes and divestments (Joby scooped up Elevate last year as Uber stepped away from costly moonshots), and none of them are flying commercially yet. With Volocopter (as with the others), investors have taken a long-term bet here on a concept and a team it believes can deliver.

For now, the company says that technology is no longer the barrier, and neither it seems are regulators, who are, in the pandemic, more focused on considering new approaches to old problems to improve efficiency and acknowledge that we might have to do things a little differently from now on, in the wake of the pandemic.

In the case of VTOL craft, the promise has always been that they could bypass a lot of the issues with street congestion in urban areas, and provide a more environmental alternative to gas-guzzling, present-day transportation modes.

The challenge, on the other hand, has been determining the safety both of completely new devices, and also of the traffic and other systems that they would operate under. With the idea being that ultimately these craft would be autonomous, that adds another complex twist.

Interestingly, regulators in different markets that might have been more skeptical of new concepts seem to be more open to considering them differently now with the pandemic at hand. (This has played out in other arenas, too, such as the electric scooter market in the UK, which saw a bump in activity after regulators long skeptical gave them a provisional nod last year, citing the need for more individualised transportation options in a pandemic-hit country.)

“There aren’t any major hurdles anymore in terms of the technology as such,” said Retuer. “It is now all about execution. EASA has defined what is necessary to get electric air taxis certified to the highest safety level in aviation. We have the best technology in the market to certify to EASA’s high safety standards and will keep our heads down to finalize the few remaining steps to certification.”

In contrast, he said the other challenges that remain are those of any highly technical startup: “Our largest challenge right now is talent acquisition,” he said. “We are looking for the best talents worldwide and growing our team quickly now, so that we can accelerate on the technical and market development sides. Especially in the markets where we will open early routes, such as Paris, Singapore, China and Japan, we are going full speed in preparing everything necessary from digital infrastructure to landing sites, city approvals and more.”

The rapid growth of e-commerce in Indonesia, especially during the pandemic, is placing increasing demands on its supply chain infrastructure. But the country’s logistics industry is highly fragmented, with companies usually relying on multiple providers for one shipment, and many warehouses are still concentrated around major cities. Advotics wants to help with software to make the whole supply chain easier to track, and recently closed a $2.75 million funding round led by East Ventures.

Founded in 2016 by Boris Sanjaya, Hendi Chandi and Jeffry Tani, Advotics currently counts more than 70 clients, ranging from individual resellers to large corporations like Exxonmobil, Danone, Reckitt Benckiser, Sampoerna, Kalbe and Mulia Group.

According to research institution Statistics Indonesia, there are about 5 million small and medium-sized manufacturers in Indonesia. They use a supply chain with 15 million small to mid-sized distributors and about 288,000 large distribution companies. This fragmentation means higher expenses, with Report Linker estimating that logistics costs range between 25% to 30% of Indonesia’s gross domestic product.

To help make logistics more efficient for its clients, Advotics offers SaaS solutions to monitor almost their entire supply and logistics chain, from warehouse inventory to generating delivery routes for drivers. It includes a product digitalization feature that uses QR codes to track products and prevent counterfeiting. The company’s new funding will be used to launch a online-to-offline system for SMEs and grow its sales team.

Advotics is among several tech startups that are taking different approaches to tackle Indonesia’s logistics infrastructure. For example, Shipper wants to give sellers access to “Amazon-level logistics,” while Logisly is focused on digitizing truck shipments. Waresix recently acquired Trukita to connect businesses to shippers and truck shipment platform Kargo’s backers include Uber co-founder Travis Kalanick.

The Facebook Oversight Board (FOB) is already feeling frustrated by the binary choices it’s expected to make as it reviews Facebook’s content moderation decisions, according to one of its members who was giving evidence to a UK House of Lords committee today which is running an enquiry into freedom of expression online. 

The FOB is currently considering whether to overturn Facebook’s ban on former US president, Donald Trump. The tech giant banned Trump “indefinitely” earlier this year after his supporters stormed the US capital.

The chaotic insurrection on January 6 led to a number of deaths and widespread condemnation of how mainstream tech platforms had stood back and allowed Trump to use their tools as megaphones to whip up division and hate rather than enforcing their rules in his case.

Yet, after finally banning Trump, Facebook almost immediately referred the case to it’s self-appointed and self-styled Oversight Board for review — opening up the prospect that its Trump ban could be reversed in short order via an exceptional review process that Facebook has fashioned, funded and staffed.

Alan Rusbridger, a former editor of the British newspaper The Guardian — and one of 20 FOB members selected as an initial cohort (the Board’s full headcount will be double that) — avoided making a direct reference to the Trump case today, given the review is ongoing, but he implied that the binary choices it has at its disposal at this early stage aren’t as nuanced as he’d like.

“What happens if — without commenting on any high profile current cases — you didn’t want to ban somebody for life but you wanted to have a ‘sin bin’ so that if they misbehaved you could chuck them back off again?” he said, suggesting he’d like to be able to issue a soccer-style “yellow card” instead.

“I think the Board will want to expand in its scope. I think we’re already a bit frustrated by just saying take it down or leave it up,” he went on. “What happens if you want to… make something less viral? What happens if you want to put an interstitial?

“So I think all these things are things that the Board may ask Facebook for in time. But we have to get our feet under the table first — we can do what we want.”

“At some point we’re going to ask to see the algorithm, I feel sure — whatever that means,” Rusbridger also told the committee. “Whether we can understand it when we see it is a different matter.”

To many people, Facebook’s Trump ban is uncontroversial — given the risk of further violence posed by letting Trump continue to use its megaphone to foment insurrection. There are also clear and repeat breaches of Facebook’s community standards if you want to be a stickler for its rules.

Among supporters of the ban is Facebook’s former chief security officer, Alex Stamos, who has since been working on wider trust and safety issues for online platforms via the Stanford Internet Observatory.

Stamos was urging both Twitter and Facebook to cut Trump off before everything kicked off, writing in early January: “There are no legitimate equities left and labeling won’t do it.”

But in the wake of big tech moving almost as a unit to finally put Trump on mute, a number of world leaders and lawmakers were quick to express misgivings at the big tech power flex.

Germany’s chancellor called Twitter’s ban on him “problematic”, saying it raised troubling questions about the power of the platforms to interfere with speech. While other lawmakers in Europe seized on the unilateral action — saying it underlined the need for proper democratic regulation of tech giants.

The sight of the world’s most powerful social media platforms being able to mute a democratically elected president (even one as divisive and unpopular as Trump) made politicians of all stripes feel queasy.

Facebook’s entirely predictable response was, of course, to outsource this two-sided conundrum to the FOB. After all, that was its whole plan for the Board. The Board would be there to deal with the most headachey and controversial content moderation stuff.

And on that level Facebook’s Oversight Board is doing exactly the job Facebook intended for it.

But it’s interesting that this unofficial ‘supreme court’ is already feeling frustrated by the limited binary choices it’s asked them for. (Of, in the Trump case, either reversing the ban entirely or continuing it indefinitely.)

The FOB’s unofficial message seems to be that the tools are simply far too blunt. Although Facebook has never said it will be bound by any wider policy suggestions the Board might make — only that it will abide by the specific individual review decisions. (Which is why a common critique of the Board is that it’s toothless where it matters.)

How aggressive the Board will be in pushing Facebook to be less frustrating very much remains to be seen.

“None of this is going to be solved quickly,” Rusbridger went on to tell the committee in more general remarks on the challenges of moderating speech in the digital era. Getting to grips with the Internet’s publishing revolution could in fact, he implied, take the work of generations — making the customary reference the long tail of societal disruption that flowed from Gutenberg inventing the printing press.

If Facebook was hoping the FOB would kick hard (and thorny-in-its-side) questions around content moderation into long and intellectual grasses it’s surely delighted with the level of beard stroking which Rusbridger’s evidence implies is now going on inside the Board. (If, possibly, slightly less enchanted by the prospect of its appointees asking it if they can poke around its algorithmic black boxes.)

Kate Klonick, an assistant professor at St John’s University Law School, was also giving evidence to the committee — having written an article on the inner workings of the FOB, published recently in the New Yorker, after she was given wide-ranging access by Facebook to observe the process of the body being set up.

The Lords committee was keen to learn more on the workings of the FOB and pressed the witnesses several times on the question of the Board’s independence from Facebook.

Rusbridger batted away concerns on that front — saying “we don’t feel we work for Facebook at all”. Though Board members are paid by Facebook via a trust it set up to put the FOB at arm’s length from the corporate mothership. And the committee didn’t shy away or raising the payment point to query how genuinely independent they can be?

“I feel highly independent,” Rusbridger said. “I don’t think there’s any obligation at all to be nice to Facebook or to be horrible to Facebook.”

“One of the nice things about this Board is occasionally people will say but if we did that that will scupper Facebook’s economic model in such and such a country. To which we answer well that’s not our problem. Which is a very liberating thing,” he added.

Of course it’s hard to imagine a sitting member of the FOB being able to answer the independence question any other way — unless they were simultaneously resigning their commission (which, to be clear, Rusbridger wasn’t).

He confirmed that Board members can serve three terms of three years apiece — so he could have almost a decade of beard-stroking on Facebook’s behalf ahead of him.

Klonick, meanwhile, emphasized the scale of the challenge it had been for Facebook to try to build from scratch a quasi-independent oversight body and create distance between itself and its claimed watchdog.

“Building an institution to be a watchdog institution — it is incredibly hard to transition to institution-building and to break those bonds [between the Board and Facebook] and set up these new people with frankly this huge set of problems and a new technology and a new back end and a content management system and everything,” she said.

Rusbridger had said the Board went through an extensive training process which involved participation from Facebook representatives during the ‘onboarding’. But went on to describe a moment when the training had finished and the FOB realized some Facebook reps were still joining their calls — saying that at that point the Board felt empowered to tell Facebook to leave.

“This was exactly the type of moment — having watched this — that I knew had to happen,” added Klonick. “There had to be some type of formal break — and it was told to me that this was a natural moment that they had done their training and this was going to be moment of push back and breaking away from the nest. And this was it.”

However if your measure of independence is not having Facebook literally listening in on the Board’s calls you do have to query how much Kool Aid Facebook may have successfully doled out to its chosen and willing participants over the long and intricate process of programming its own watchdog — including to extra outsiders it allowed in to observe the set up.

The committee was also interested in the fact the FOB has so far mostly ordered Facebook to reinstate content its moderators had previously taken down.

In January, when the Board issued its first decisions, it overturned four out of five Facebook takedowns — including in relation to a number of hate speech cases. The move quickly attracted criticism over the direction of travel. After all, the wider critique of Facebook’s business is it’s far too reluctant to remove toxic content (it only banned holocaust denial last year, for example). And lo! Here’s its self-styled ‘Oversight Board’ taking decisions to reverse hate speech takedowns…

The unofficial and oppositional ‘Real Facebook Board’ — which is truly independent and heavily critical of Facebook — pounced and decried the decisions as “shocking”, saying the FOB had “bent over backwards to excuse hate”.

Klonick said the reality is that the FOB is not Facebook’s supreme court — but rather it’s essentially just “a dispute resolution mechanism for users”.

If that assessment is true — and it sounds spot on, so long as you recall the fantastically tiny number of users who get to use it — the amount of PR Facebook has been able to generate off of something that should really just be a standard feature of its platform is truly incredible.

Klonick argued that the Board’s early reversals were the result of it hearing from users objecting to content takedowns — which had made it “sympathetic” to their complaints.

“Absolute frustration at not knowing specifically what rule was broken or how to avoid breaking the rule again or what they did to be able to get there or to be able to tell their side of the story,” she said, listing the kinds of things Board members had told her they were hearing from users who had petitioned for a review of a takedown decision against them.

“I think that what you’re seeing in the Board’s decision is, first and foremost, to try to build some of that back in,” she suggested. “Is that the signal that they’re sending back to Facebook — that’s it’s pretty low hanging fruit to be honest. Which is let people know the exact rule, given them a fact to fact type of analysis or application of the rule to the facts and give them that kind of read in to what they’re seeing and people will be happier with what’s going on.

“Or at least just feel a little bit more like there is a process and it’s not just this black box that’s censoring them.”

In his response to the committee’s query, Rusbridger discussed how he approaches review decision-making.

“In most judgements I begin by thinking well why would we restrict freedom of speech in this particular case — and that does get you into interesting questions,” he said, having earlier summed up his school of thought on speech as akin to the ‘fight bad speech with more speech’ Justice Brandeis type view.

“The right not to be offended has been engaged by one of the cases — as opposed to the borderline between being offended and being harmed,” he went on. “That issue has been argued about by political philosophers for a long time and it certainly will never be settled absolutely.

“But if you went along with establishing a right not to be offended that would have huge implications for the ability to discuss almost anything in the end. And yet there have been one or two cases where essentially Facebook, in taking something down, has invoked something like that.”

“Harm as oppose to offence is clearly something you would treat differently,” he added. “And we’re in the fortunate position of being able to hire in experts and seek advisors on the harm here.”

While Rusbridger didn’t sound troubled about the challenges and pitfalls facing the Board when it may have to set the “borderline” between offensive speech and harmful speech itself — being able to (further) outsource expertise presumably helps — he did raise a number of other operational concerns during the session. Including over the lack of technical expertise among current board members (who were purely Facebook’s picks).

Without technical expertise how can the Board ‘examine the algorithm’, as he suggested it would want to, because it won’t be able to understand Facebook’s content distribution machine in any meaningful way?

Since the Board currently lacks technical expertise, it does raise wider questions about its function — and whether its first learned cohort might not be played as useful idiots from Facebook’s self-interested perspective — by helping it gloss over and deflect deeper scrutiny of its algorithmic, money-minting choices.

If you don’t really understand how the Facebook machine functions, technically and economically, how can you conduct any kind of meaningful oversight at all? (Rusbridger evidently gets that — but is also content to wait and see how the process plays out. No doubt the intellectual exercise and insider view is fascinating. “So far I’m finding it highly absorbing,” as he admitted in his evidence opener.)

“People say to me you’re on that Board but it’s well known that the algorithms reward emotional content that polarises communities because that makes it more addictive. Well I don’t know if that’s true or not — and I think as a board we’re going to have to get to grips with that,” he went on to say. “Even if that takes many sessions with coders speaking very slowly so that we can understand what they’re saying.”

“I do think our responsibility will be to understand what these machines are — the machines that are going in rather than the machines that are moderating,” he added. “What their metrics are.”

Both witnesses raised another concern: That the kind of complex, nuanced moderation decisions the Board is making won’t be able to scale — suggesting they’re too specific to be able to generally inform AI-based moderation. Nor will they necessarily be able to be acted on by the staffed moderation system that Facebook currently operates (which gives its thousand of human moderators a fantastically tiny amount of thinking time per content decision).

Despite that the issue of Facebook’s vast scale vs the Board’s limited and Facebook-defined function — to fiddle at the margins of its content empire — was one overarching point that hung uneasily over the session, without being properly grappled with.

“I think your question about ‘is this easily communicated’ is a really good one that we’re wrestling with a bit,” Rusbridger said, conceding that he’d had to brain up on a whole bunch of unfamiliar “human rights protocols and norms from around the world” to feel qualified to rise to the demands of the review job.

Scaling that level of training to the tens of thousands of moderators Facebook currently employs to carry out content moderation would of course be eye-wateringly expensive. Nor is it on offer from Facebook. Instead it’s hand-picked a crack team of 40 very expensive and learned experts to tackle an infinitesimally smaller number of content decisions.

“I think it’s important that the decisions we come to are understandable by human moderators,” Rusbridger added. “Ideally they’re understandable by machines as well — and there is a tension there because sometimes you look at the facts of a case and you decide it in a particular way with reference to those three standards [Facebook’s community standard, Facebook’s values and “a human rights filter”]. But in the knowledge that that’s going to be quite a tall order for a machine to understand the nuance between that case and another case.

“But, you know, these are early days.”

Jack Abraham has a lot of confidence in what he’s building. Then again, you can’t be immodest or unsure of yourself if you’re going to bet exclusively on your own startups as an investor, which is precisely the model that Abraham’s San Francisco-based venture studio, Atomic, has followed since it was launched nine years ago.

It all started with $10 million of Abraham’s own money, capital he amassed by selling his first startup, a local shopping engine called Milo, to eBay in 2010, for $75 million. Abraham had dropped out of Wharton as an undergrad with $500,000 from a professor who believed that Abraham — whose father founded ComScore — would himself be a company-building machine.

The professor had good instincts. After selling Milo at age 24, Abraham spent more than three years building products inside of eBay and learning how to lead multiple teams before beginning to look outward, making angel bets, including on Uber and Pinterest, and, he says, spreading around some of his ideas. (Among these, he says, he “invented Postmates. I gave the founders literally the idea for the company; they were working on a B2B company at the time. I was fairly early on there; that helped spawn the whole food delivery thing.”)

He had so many ideas — hundreds, he says — that not long afterward, he created Atomic with cofounder Andrew Dudum, a Wharton peer who is also the son of entrepreneurs and who also dropped out of college to join the startup world. (Dudum’s first stop was a then-nascent startup backed by Sequoia Capital.)

At first, Atomic worked on one company. The following year, it worked on two. By 2018, the outfit had built out a team that could handle many of the back-end functions that startups need to thrive, from recruiting to accounting, and launched 10 companies. Impressed investors gave the firm $150 million to create even more startups.

By then, Abraham and Dudum had brought in two other general partners: Chester Ng and Andrew Salamon. Salamon left in 2019 to launch his own venture studio, Material, with Blue Apron founder Matt Salzberg. The same year, JD Ross, one of a handful of cofounders of the newly public company Opendoor, joined Atomic as a general partner.

The firm has only picked up speed since. Indeed, at this point, Atomic has created “dozens” of startups — including roughly one per month last year, says Abraham. It also just closed on $260 million in new capital commitments, including from a prominent university that now serves as its anchor investor but would prefer not to be named publicly.

Citing “proprietary aspects” to the model, Abraham declines to explain how Atomic’s economics work, except to acknowledge that it operates in “more of a fund context instead of a holding company” where investors would essentially be buying stakes in Atomic itself.

Certainly, it’s easy to appreciate the enthusiasm of Atomic’s investors, including early backers like Peter Thiel and Marc Andreessen. Abraham and Dudum are both compelling storytellers, as we’ve witnessed first-hand in interviewing them at different times. The firm is also starting to see some exits.

One of Atomic’s creations, the telehealth company Hims, was taken public in January through a blank-check company in a deal that valued the company at $1.6 billion, and its shares have been rising since. As of this writing, the three-and-a-half-year-old outfit — run by Dudum, who is doing double-duty as Hims’s CEO and a general partner with Atomic — boasts a market cap of $2.9 billion.

Atomic also sold a voice-powered sales startup, TalkIQ, to the company Dialpad in 2018 for what Forbes reported at the time to be a “little under $50 million.” TalkIQ had raised $22 million altogether.

More exits are coming, suggests Abraham. “There many companies we have that are now approaching the sort of growth and run rate where they have the ability to go public, even as soon as in the next year,” he says.

One of those eventual prospects is Replicant, an autonomous call center startup that has raised $35 million since its 2017 founding, including a $27 million Series A round led by Norwest Venture Partners back in September. Another Atomic startup, Homebound, a three-year-old home-building outfit that handles everything from financing to construction, has also enjoyed some momentum, as well as attracted $53 million from investors.

Though Atomic prides itself on “pressure testing” its ideas, not every startup has been a hit. A photo-sharing app called Ever was quickly shut down after NBC reported that the photos people shared were used to train the company’s facial recognition system. A sleep-tracking specialist, Rested, was also shut down.

Meanwhile, ZenReach, a Wi-Fi marketing company that had collected at least $94 million from investors through 2018, laid off 20% of its employees that same year. A CEO who’d been brought aboard by Abraham and who was previously an operating partner with Atomic, has since moved on to a role elsewhere.

If not all of its ideas set the world on fire, Atomic has no shortage of others.

Asked about some of the areas where he sees the most opportunity to innovate, Abraham quickly ticks off “healthcare, finance, education, real estate, and other large industries where truthfully, when you’re inside them, you understand how broken they are, and they are broken up and down the entire stack.

“You study them,” he says, “and then you wonder how is this possible this happened.”

Outplay’s team members on a video call

Sales engagement platforms (SEP) help sales teams automate and track the large number of tasks they need to do each day as they contact leads and hone in on potential deals. Focused on small-to-medium-sized companies, SEP startup Outplay announced today it has raised $2 million from Sequoia Capital India’s Surge program for early-stage startups.

Outplay was founded in January 2020 by brothers Ram and Laxman Papineni and now counts more than 300 clients. Before launching Outplay, the Papineni brothers built AppVirality, a referall marketing tool for app developers.

Laxman told TechCrunch that Outplay’s customers come from sectors like IT, computer software, marketing and advertising and recruiting, and most are based in North America and Europe.

Outplay is designed for teams that use multiple channels to reach potential customers, including phone calls, text messages, email, live chats on websites, and social media platforms like LinkedIn or Twitter. It integrates with customer relationship management platforms like Salesforce and Pipedrive, giving sales people a new interface that includes productivity and automation tools to cut the time they spend on administrative tasks.

Outplay’s platform

For example, Outplay can be used create sequences that send initial messages through different platforms, and then automatically follows up with new messages if there isn’t a reply within a pre-set time frame. Outplay also provides analytics to help sales people track how well sales campaigns are working.

Two of Outplay’s biggest competitors are Outreach and SalesLoft, both of which hit unicorn status in recent funding rounds. Laxman said Outplay is focused on ease of use, with other differentiators including more integrations with CRMs and other software, and a strong customer support team.

As Facebook confronts outrage among its employees and the public for mishandling multiple decisions about its role in shaping public discourse, it is becoming clear that it cannot solve its conundrums without a major change in its business model. And a new model is readily available: for-benefit status.

For decades, a misguided ideology has warped companies, economies and societies: that the sole purpose of corporations is to maximize short-term returns to one set of stakeholders — those who have bought shares. Neither law nor history requires this to be true.

But shareholder value-maximization ideology has become cemented in far too much corporate practice at the expense of societal well-being. This is manifested in many ways: a slavish adherence to the judgment of the “market,” even when other social signals are more powerful; executives enriched by stock options; companies fearful of “activist investors” who attack whenever stock prices fail to meet quarterly “expectations” and often-frivolous shareholder lawsuits pushing for stock gains at all costs.

The pandemic, however, has accelerated an already-spreading recognition that shareholder value maximization is often a harmful choice — not by any means a moral imperative or even a fiduciary responsibility.

Major institutions of capitalism are converging on a new vision for it. The 2019 Business Roundtable CEO statement said that corporate strategy should benefit all stakeholders – including shareholders, yes, but equally customers, employees, suppliers, and the communities in which companies operate. BlackRock CEO Larry Fink’s recent annual letters assert new views of how that investment company, the world’s largest, should invest the trillions it oversees.

Fink’s 2019 letter spelled out a new vision for corporate purpose; the subsequent 2020 and 2021 letters focused on business’ responsibility around climate change, particularly in light of the pandemic. The B Corporation and conscious capitalism movements are growing. The World Economic Forum is championing a “Fourth Sector,” combining purpose with profit. Business schools, facing student rebellions against a purely profit-maximizing curriculum, are rapidly changing what they teach.

And with society under siege, many more businesses, including social media, are scrambling to seem like good corporate citizens. They have no choice.

Facebook, for example, has doubled down on philanthropy and new efforts to combat misinformation, even as usage and share price soar. Platforms like WhatsApp (owned by Facebook) have become essential services to connect people whose physical ties have been abruptly severed during the global pandemic. Shelter-in-place has become, in many ways, shelter-in-Facebook-properties.

But Facebook and its brethren remain fragile. Since the 2016 presidential election in the U.S., Facebook has faced governmental hearings and regulation, public uproar (#deleteFacebook), and huge fines for invading privacy and undermining democracy. These calls were amplified in the weeks following the January 6 Capitol riot. Separately, it faces allegations of bias, largely (though not entirely) from the political right. These have led to calls for the revocation or reform of Section 230 of the Communications Decency Act, which grants it immunity from the actions of its users.

A giant company that is simultaneously essential and pilloried is vulnerable. Just ask the ghosts of John D. Rockefeller and his fellow robber barons, whose huge monopolies industrialized America more than 100 years ago. Journalistic muckrakers and public outrage targeted them for their abusive practices until the government finally broke up their companies via antitrust legislation.

Because Mark Zuckerberg maintains complete majority control of Facebook, he could unilaterally quell public opprobrium and fend off heavy-handed regulation singlehandedly by transforming Facebook into a new kind of business: a for-benefit corporation.

Under the Public Benefit Corporation legal model, firms bind themselves to a public benefit mission statement and carry out required ongoing reporting on both the standard financials and on how the company is living up to its mission. That status protects the company against profit-demanding shareholder lawsuits, and also attracts employees and investors who want to combine profit with purpose.

Data.world is one of the thousands of certified B Corporations that have seen good returns on financial metrics. Allbirds, for example, launched in a few sustainable materials using a pro-sustainability process to manufacture comfortable shoes, quickly reaching revenues of $100 million and valuation of $1.7 billion in an industry fraught with sustainability and human rights concerns. Other household names that are B Corps include The Body Shop, Coursera, Danone, the Jamie Oliver Group, King Arthur Flour, Numi Tea and Patagonia.

Many companies that have not undergone formal B Certification from B Labs have nonetheless done well while transforming their business practices, such as the carpet and flooring company Interface. Some firms incorporate ESG principles into their management systems – the $24 billion (market cap) Dutch life sciences company DSM has for years had meaningful sustainability targets for its senior management that account for fully 50 percent of their annual bonuses. Both Interface and DSM attribute much of their commercial success to their attention to non-financial considerations.

A for-benefit Facebook could similarly relate to the world differently, avoiding many of the reputational shocks and regulatory responses that have led to huge stock dips and enormous fines. Its operations would align with Zuckerberg’s proclaimed purpose to enable the potential abundance that results from connecting everyone in the world.

Imagine a Facebook town hall as a true public square, not just another way to gather and sell people’s data without their explicit consent. Imagine a Facebook that put its users first and its advertisers second; that revealed where ads came from; that earned your attention in a way that you controlled rather than through machine-driven algorithms maximizing your attention for good or ill. Such a for-benefit Facebook could create true buy-in and transparency with its massive community around the world.

Of course, such steps as Facebook’s new Oversight Board, which may provide some meaningful review, don’t require a legal change. But if shareholders and employees continue to be rewarded primarily by the success of the problematic ad revenue model, a continuing conflict between private gain and public benefit makes it impossible to have confidence about what is happening behind the scenes. A shift to for-benefit incorporation and appropriate certification brings with it different performance metrics and accountability systems with public scores.

In changing Facebook into a for-benefit corporation, Zuckerberg could insulate himself against presidential rage while rehabilitating his reputation — and his company’s. It would likely create vast ripples both in Silicon Valley and beyond — and it might help transform capitalism itself.