Category: UNCATEGORIZED

Arizona -based high-altitude balloon startup World View has a new partnership with the National Oceanic and Atmospheric Administration (NOAA) to help the latter collect data to help it deepen its study of the Earth’s stratosphere, the second layer of the Earth’s atmosphere that spans between 4.3 and 12 miles above the surface depending on where you are in the world.

NOAA will be sending up miniaturized instrument hardware that can measure atmospheric particles, or aerosols, in the stratosphere. Studying these can help scientists better understand how the atmospheric layer, and the ozone e that it contains, and human impact on both can affect the transmission of ultraviolet radiation and what kind of chemical interactions are incurring that could present a risk to humans on the surface.

World View’s ‘Stratollites’ balloons will be able to host these instruments at altitudes higher than 55,000 feet (over 10 miles) above the Earth, for trips that can span multiple weeks at a time. Traditional NOAA research has relied on sensors carried by weather balloons, and aircraft, which can’t make those kinds of long-duration data-gathering excursions; or on satellites, which operate at a completely different altitude and can’t provide the same quality of data as an an instrument actually located within the stratosphere itself.

To get a sense of what kind of difference NOAA could realize from using World View’s stratollites, consider that the Administration says that while current weather balloon flights provide around 11 days’ worth of data from a full year of flights, while just a single flight of World View’s vehicle could provide 40 days’ worth of data.

The first Wold View and NOAA flights should take place sometime next year, and the data gathered from the excursions will be made available to the public for general research use after a period of six months, as is standard for the agency.

Twitter has given its biannual transparency reports a new home with today’s launch of the Twitter Transparency Center, which the company says was designed to make the reporting more easily understood and accessible. The launch was timed alongside the belated release of Twitter’s latest transparency report covering the second half of 2019. The company attributed the delay to the COVID-19 health crisis and its work in getting the new Transparency Center up and running. The report touts Twitter’s increasing efforts in enforcing its policies, including a 95% increase in accounts actioned for violating its abuse policy, a 47% increase in account locks and suspensions, and a 54% increase in accounts actioned for violating hateful conduct policies, among others.

The company claims its ability to “proactively” surface content violations for human review has helped it increase enforcement of its rules, along with more detailed policies, improved reporting tools, and other factors.

As a result, this period saw the largest increase in the number of accounts actioned under Twitter’s abuse policies — a metric that could speak to better technology, as Twitter claims, but also perhaps hints at the devolving nature of online discourse.

Meanwhile, Twitter attributed the increase in actions taken on accounts demonstrating hateful conduct, in part, to its new “dehumanization policy” announced on July 9, 2019.

Twitter increased enforcement of its rules in other areas during this reporting period, including the posting of sensitive media/adult content (enforcement actions were up 39%), suicide & self-harm (enforcement actions up 29%), doxxing (enforcement actions up 41%), and non-consensual nudity (enforcement actions up 109%). The only area to see a decline was violent threats, which saw a 5% decrease in the number of accounts actioned for policy violations.

Twitter also actioned 60,807 accounts for violating policies around regulated goods or services.

Online harassment has been a significant challenge for Twitter as it has grown. The social network now encompasses a wider swath of the general public, compared with its early days when tech enthusiasts knew it as twttr, a sort of public-facing SMS. Today, Twitter’s idealistic goal of being an “online public town square” is bumping up against the limitations of that model, which is also increasingly criticized as a flawed or even delusional sort of analogy for what Twitter has become.

Twitter, like much of social media, can over-amplify fringe beliefs, controversy, and toxic content, to the detriment of conversation health. It can help polarize users’ opinions. And it serves as a breeding ground for cancel culture.

The company itself, as of late, seems to be waking up to the problem of putting the world together in one room to debate ideas, and the ramifications of amplifying misinformation that results in.

It suspended accounts from the fringe conspiracy movement, QAnon, in July. It has also flagged and screened Trump’s tweets and briefly froze his ability to share misinformation. On the product side, Twitter rolled out a tool that let users hide replies that don’t add value to conversations and, just last week, publicly launched a feature that lets users only tweet with friends and followers, instead of with the general public.

Abuse policy enforcement isn’t the only big change that took place in the last half of 2019. Government requests for user data also increased, Twitter found.

Twitter says that the U.S. made up the highest percentage of legal requests for information during the reporting period, accounting for 26% of all global requests. Japan was second, comprising 22% of information requests. Overall, government requests grew 21% in the period July 1 to December 31, 2019, and the aggregate number of accounts specified in the requests grew 63%.

Both metrics were the largest Twitter has seen since it began transparency reporting in 2012, it noted.

Twitter also saw 27,538 legal demands to remove content specifying 98,595 accounts — again, the largest number to date. 86% of these demands came from Japan, Russia, and Turkey.

“Our work to increase transparency efforts across the company is tireless and constant. We will continue to work on increasing awareness and understanding about how our policies work and our practices around content moderation, data disclosures and other critical areas,” the company blog post about the new center explained. “In addition, we will take every opportunity to highlight the actions of law enforcement, governments, and other organizations that impact Twitter and the people who use our service across the world,” it noted.

More metrics, including those focused on spam, terrorism, child exploitation and extremism, are available on the new Twitter Transparency Center.

Max Levchin needs little introduction in the world of tech. As an entrepreneur, he’s been the co-founder of PayPal (now public), Slide (acquired by Google) and Affirm (reportedly about to go public), some of the hottest startups to have come out of Silicon Valley. And as an investor, he’s applied his power of observation and execution also towards helping many others build huge technology businesses.

We sat down with Levchin for a recent session of Extra Crunch Live, where he spoke at length about what he sees as some of the big opportunities in fintech. Here’s an edited version of the conversation. You can watch and listen to the whole discussion — which includes stories about Levchin’s coffee and cycling habits, and how many times he’s seen “The Seven Samurai” (hint: more than once) — here, also embedded below, and you can check out the rest of the pretty cool ECL program here.

How e-commerce failed to evolve since his days at PayPal

Even going as far back as PayPal I think the industry has devolved. I think fintech had the promise of really bringing simplicity, honesty and transparency to the customer. Instead, we ended up putting a really nice user interface on products that are not designed with the user’s best interest in mind. I’m a big fan of throwing shade on credit cards, because I think fundamentally, their business model is remarkably similar to that of payday loans. You are allowed to borrow some money and don’t really know exactly what the terms are. It’s all in the fine print, don’t worry about it and then you just make the minimum payments and you stay in debt. Potentially forever.

A good brand is hard to kill. Over the past several years, the smartphone space has seen a resurgence of once-mighty mobile brands making a comeback with various degrees of success. HMD’s Nokia phones are probably the best and most successful example, but even Palm had a brief moment in the sun.

And then there’s the case of BlackBerry. TCL surprised the mobile world by bringing the brand raring back with an Android handset that re-embraced the QWERTY keyboard. That, in and of itself, wasn’t enough, of course. But TCL has the chops to deliver quality hardware, and certainly did so with the KeyOne. I know I was surprised the first time I saw one in person behind the scenes at CES a few years back.

Early this year, TCL announced the end of the partnership, noting, “We… regret to share… that as of August 31, 2020, TCL Communication will no longer be selling BlackBerry-branded mobile devices.” From its phrasing, it seemed like a less than amicable end for the deal. But TCL has already moved on to producing devices under its own brand name after years of subsidiaries and branded deals.

All of which brings us to this week’s announcement that a company you’ve never heard of, called OnwardMobility, is bringing the BlackBerry name to hardware for North America and Europe (other branding deals have existed in other markets). It’s a strange deal for starters, due to the fact that OnwardMobility is hardly a household name. It’s based in Austin, Texas, has fewer than 50 employees and was founded in March of last year, perhaps with such a partnership in mind.

After all, while a branding deal is far from a guaranteed recipe for success, it is, at least, a way of getting that first foot through the door. I’m not really sure I would be writing anything about OnwardMobility for TechCrunch dot com at the moment, were it not for the promise of reviving the BlackBerry name yet again. So that’s something. The company’s staff also notably involves some former TCL folk, as well as people involved with the BlackBerry software side of things. Another name that pops up a lot is Sonim Technologies, another Austin-based company that is a subsidiary of a Shenzhen-based brand of the same name. They largely specialize in rugged devices for first responders.

CEO Peter Franklin has both Microsoft and Zynga on his resume, and produced this fairly low-fi YouTube video to explain the company’s mission:

OnwardMobility says it’s a standalone startup. No word yet on investments or investors, though it will certainly be interesting to find out who’s backing this latest push to make the BlackBerry name relevant again. Notably, the company’s not sharing renders yet, either, but says it’s bringing a 5G device to market in 2021, with a physical keyboard and the focus on security that’s long been a key differentiator for the BlackBerry brand.

BlackBerry (the software company) certainly seems to be on board with its new partner here. CEO John Chen had this to say about the deal:

BlackBerry is thrilled OnwardMobility will deliver a BlackBerry 5G smartphone device with physical keyboard leveraging our high standards of trust and security synonymous with our brand. We are excited that customers will experience the enterprise and government level security and mobile productivity the new BlackBerry 5G smartphone will offer.

More or less what you’d anticipate on that front. For now, the news is basically OnwardMobility’s entry onto the scene and announcement of its BlackBerry licensing deal. I’m honestly not sure how much clout the BlackBerry name holds in 2020 — nor do I necessarily believe there’s a critical mass of consumers clamoring to return to the physical keyboard. So OnwardMobility has a lot to prove in an extremely crowded mobile market. I guess we’ll see what it has to offer next year. Stay tuned.

Ankhi Das, a top Facebook executive in India, has filed a criminal complaint against a journalist who she alleges attempted to defame her in a public Facebook post and made “sexually coloured remarks.”

A review of the journalist Awesh Tiwari’s post, written in Hindi (the most widely spoken language in India), finds that it was merely summarizing a recent WSJ report, which was critical of the way Das oversaw enforcement of Facebook’s hate speech policies on some posts.

The Wall Street Journal reported last week that Das, Facebook’s top public-policy executive in India, had opposed applying the company’s hate-speech rules to a member of Indian Prime Minister Narendra Modi’s party.

The report said that posts from at least three more members of BJP individuals and groups were flagged internally for “promoting or participating in violence.” Punishing those violations by politicians from Modi’s party would damage the company’s business prospects in the country, Das said of those posts, according to the report, which cited current and former employees.

The article erupted a discussion on social media with several Indian politicians — both from Modi’s BJP party and the opposition Congress — criticizing one another and also Facebook for political biasses. Several users also tweeted and submitted posts on Facebook criticizing Das’ decision.

On Monday, she filed a criminal complaint with the cyber unit of the Delhi police against a handful of users, including journalist Tiwari for posts that, she alleged, insulted and intimidated her, and made sexually coloured remarks.

Except, in the case of Tiwari, his post only summarizes WSJ’s report and shares some background information on Das that is in the public domain.

Tiwari told Indian news outlet Newslaundry that Facebook executive’s action was curbing his freedom of speech on Facebook.

If charged and convicted, Tiwari and others stand to face fines and up to two years in prison for sexual harassment, up to two years for defamation, and up to seven years in prison for criminal intimidation, according to the local law.

The Committee to Protect Journalists called on Das Wednesday to withdraw her complaint against Tiwari and respect citizens’ rights to criticize her.

Facebook, a company apparently committed to freedom of speech, did not immediately respond to a request for comment.

Reuters reported on Wednesday that a handful of employees have written a letter asking Facebook to denounce “anti-Muslim bigotry” posts from BJP politicians that Ankhi Das protected and shared herself on the platform.

In a comment posted internally to employees, Ajit Mohan, the head of Facebook in India, said the company was confident that WSJ article’s claim about political affiliations influencing decision making in India is “inaccurate and without merit”, Reuters reported.

Facebook has yet to offer any evidence to dispute the claims made in the WSJ report — and has not disputed them at all in its statements to news outlets. In its public statements, Facebook has said it is making “progress on enforcement and conduct regular audits.”

As we race toward Disrupt 2020, we’re keeping the Extra Crunch Live train rolling with a big entry next week as Twilio CEO and co-founder Jeff Lawson joins us for a chat.

Lawson is well-known in the tech industry for helping institutionalize API -delivered digital services, a business model variant that has become increasingly popular in recent years. Twilio has become a giant in and of itself, worth more than $37 billion today after going public in 2016.

As always, we’ll take some questions from the audience, so bring your best material.

Considering Twilio, it’s position in the mind of API-focused startups everywhere is notable. You tend to hear API-powered startups mention Twilio and Stripe as the two companies that they are mimicking, albeit usually with a different focus: “We’re building the Twilio for X.”

The power of API-driven startups with usage-based pricing and nearly SaaS-like gross margins is something private investors have certainly noticed and are betting on.

But there’s more to Twilio and Lawson than just that one topic, so we’ll also spend time riffing on when is the right time for a private company to go public, how his life has changed since the IPO, and what advice he might have for the super-late-stage startups who can’t seem to get out of the wings and onto the public markets. And, why, odd duck amongst most of the tech-famous, he doesn’t appear to make many angel investments.

Details follow for Extra Crunch members. If you aren’t one yet, sign up today so you can join our conversation.

Details

The Canadian Pension Plan Investment Board, an asset manager controlling around $311 billion in assets for the Canada’s pensioners and retirees, has identified four key industries that are set to experience massive changes as a result of the global economic response to the COVID-19 pandemic.

The firm expects the massive changes in e-commerce, healthcare, logistics, and urban infrastructure to remain in place for an extended period of time and is urging investors to rethink their approaches to each as a result.

“It really ties into the mandate that we have in thematic investing,” said Leon Pedersen, the head of Thematic Investments at CPPIB.

There was a realization at the firm that structural changes were happening and that there was value for the fund manager in ensuring that the changes were being addressed across its broad investment portfolio. “We have a long term mandate and we have a long term investment horizon so we can afford to think long term in our investment outlook,” Pedersen said.

The Thematic Investments group within CPPIB will make mid-cap, small-cap and private investments in companies that reflect the firm’s long term theses, according to Pedersen. So not only does this survey indicate where the firm sees certain industries going, but it’s also a sign of where CPPIB might commit some investment capital.

The research, culled from international surveys with over 3,500 respondents as well as intensive conversations with the firm’s investment professionals and portfolio companies, indicates that there’s likely a new baseline in e-commerce usage that will continue to drive growth among companies that offer blended retail offerings and that offices are likely never going to return to full-time occupancy by every corporate employee.

Already CPPIB has made investments in companies like Fabric, a warehouse management and automation company.

The e-commerce wave has crested, but the tide may turn

Amid the good news for e-commerce companies is a word of warning for companies in the online grocery space. While usage surged to 31 percent of U.S. households, up from 13 percent in August, consumers gave the service poor marks and many grocers are actually losing money on online orders. The move online also favored bigger omni-channel vendors like Amazon and Walmart, the study found.

The CPPIB also found that there may be opportunities for brick and mortar vendors in the aftermath of the epidemic. As younger consumers return to shopping center they’re going to find fewer retailers available, since bankruptcies are coming in both the US and Europe. That could open the door for new brands to emerge. Meanwhile, in China, more consumers are moving offline with malls growing and customers returning to shopping centers.

Some of the biggest winners will actually be online entertainment and cashless payments — since fewer stores are accepting cash and music and video streaming represent low-risk, easier options than live events or movie theaters.

Healthcare goes digital and privacy matters more than ever

Consumers in the West, already reluctant to hand over personal information, have become even more sensitive to government handling of their information despite the public health benefits of tracking and tracing, according to the CPPIB. In Germany and the U.S. half of consumers said they had concerns about sharing their data with government or corporations, compared with less than 20 percent of Chinese survey respondents.

However, even as people are more reluctant to share personal information with governments or corporations, they’re becoming more willing to share personal information over technology platforms. One-third of the patients who used tele-medical services in the U.S. during the pandemic did so for the first time. And roughly twenty percent of the nation had a telemedicine consultation over the course of the year, according to CPPIB data.

Technologies that improve the experience are likely to do well, because of the people who did try telemedicine, satisfaction levels in the service went down.

Cities and infrastructure will change

“From mass transit to public gatherings, few areas of urban life will be left unmarked by COVID-19,” write the CPPIB report authors.

Remote work will accelerate dramatically changing the complexion of downtown environments as the breadth of amenities on offer will spread to suburban communities where residents flock.  According to CPPIB’s data roughly half of workers in China, the UK and the US worked from home during the pandemic, up from 5 percent or less in 2019. In Canada, four-in-ten Canadian were telecommuting.

To that end, the CPPIB sees opportunities for companies enabling remote work (including security, collaboration and productivity technologies) and automating business practices. On the flip side, for those workers who remain wedded to the office by necessity or natural inclination, there’s going to need to be cleaning and sanitation services and someone’s going to have to provide some COVID-19 specific tools.

With personal space at a premium, public transit and ride hailing is expected to take a hit as well, according to the CPPIB report.

Supply chains become the ties that bind in a distributed, virtual world

As more aspects of daily life become socially distanced and digital, supply chains will assume an even more central position in the economy.

“Amid rising labor costs and heightened geopolitical risk, companies today are focused on resilience,” write the CPPIB authors.

Companies are reassessing their reliance on Chinese manufacturing since political pressure is coming from more regions on Chinese suppliers thanks to the internment of the Uighur population in Xinjiang and the crackdown on Hong Kong’s democratic and open society. According to CPPIB, India, Southeast Asia, and regional players like Mexico and Poland are best positioned to benefit from this supply chain diversification. Supply chain management software providers, and robotics and automation services stand to benefit.

“Confined to their homes for months and subjected to a rapid reordering of their perceived health risks and economic prospects, consumers are emerging from a shared trauma that will change their priorities and concerns for years to come,” the CPPIB study’s authors write.

Following Walmart’s pandemic-fueled earnings beat posted on Tuesday, Target today also handily beat Wall St. expectations to deliver a record-setting quarter across a number of key metrics. The retailer on Wednesday announced its strongest quarter to date for comparable sales, which grew 24.3% in Q2, driving Target’s profit up 80.3% year-over-year to $1.69 billion. Online ordering was particularly popular, Target noted, with digital sales growing 195%. Same-day services like Drive Up, Order Pick Up and Shipt also grew by 273%.

In the quarter, Target topped estimates for revenue, same-store sales, adjusted EPS, and gross margin. It reported $23 billion in revenue, vs. estimates of $19.82 billion. Its record-settinbg 24.3% increase in comparable sales was well above the expected 5.8%. Earnings per share came in at $3.38 vs. the $1.58 forecast. And its GM was 30.9% instead of the expected 28.98%.

The company attributed its sales growth to a number of factors, including its ability to remain open amid the pandemic as an essential business, its customers’ overall trust in the Target brand, its ability to get customers to shop across its product categories, its digital services, and most notably, the return of customers to its stores in Q2.

The latter item doesn’t necessarily mean Target shoppers were walking the aisles, however.

Instead, it speaks the investments Target made ahead of the pandemic in bridging the gap between online ordering and its physical stores. In Q2, Target’s In-store Order Pick Up grew more than 60%, as shoppers headed inside Target to pick up their web orders, for example.

Target’s Drive Up service, which allows customers to shop online then pull up in designated parking spots to have orders brought their car, was up by more than 700% in the quarter.

And Target’s Shipt same-day home delivery service Shipt was up 350% over last year.

That means that for much of what Target customers think of as “online shopping,” their sales were actually being fulfilled by Target’s stores. In fact, Target said its stores fulfilled more than 90% of its second-quarter sales.

To build out its digital fulfillment services, Target took a tech company-like approach in leveraging internal engineering teams capable of iterating quickly on new ideas. A team of eight, including four engineers, originally built Drive Up starting back in April 2017, for instance. By summer 2017, Drive Up was being tested in internally. It then rolled out to Target’s home market by that fall. And as of August 2019, Target’s Drive Up service was available nationwide.

The retailer has also made key acquisitions to aid its e-commerce operations, including its $550 million deal for Shipt in 2017, and more recently, its acquisition of same-day delivery technology from Deliv back in May. It has also integrated Shipt’s same-day service directly into its own website and app, instead of relying only on Shipt’s dedicated brand to reach Target shoppers.

The results of these efforts are now paying off in a pandemic where customers don’t necessarily want to browse stores’ aisles in-person to shop. And that has led to Target seeng what Yahoo Finance today described as “tech company-like growth” for its retail business.

Target’s Chairman and CEO Brian Cornell additionally noted the company has added $5 billion in market share in the first 6 months of 2020, during which time it’s added 10 million new digital customers.

“Our second quarter comparable sales growth of 24.3 percent is the strongest we have ever reported, which is a true testament to the resilience of our team and the durability of our business model. Our stores were the key to this unprecedented growth, with in-store comp sales growing 10.9 percent and stores enabling more than three-quarters of Target’s digital sales, which rose nearly 200 percent,” he said. “We also generated outstanding profitability in the quarter, even as we made significant investments in pay and benefits for our team. We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year,” Cornell continued.

“With our differentiated merchandising assortment, a comprehensive set of convenient fulfillment options, a strong balance sheet, and our deeply dedicated team, we are well-equipped to navigate the ongoing challenges of the pandemic, and continue to grow profitably in the years ahead,” he said.

The pandemic has played a role in what customers bought, too. Target said its sales were up across all five of its core merchandise categories. This was led by the strongest sales in electronics, a category that was up 70% year-over year due to people staying at home for work, school and entertainment, leading to more purchases of things like computers or gaming systems. Electronics were followed by home products, which were up by 30%, then increases of 20% for the beauty, food & beverages, and essentials categories. Apparel even shifted from a 20% decline in Q1 to double-digit growth in Q2. Customer basket size also grew 18.8%, as people shopped for more items on their Target runs.

Like Walmart, Target also saw a boost from government stimulus checks, which will likely taper off next quarter. But Target declined to offer further 2020 guidance, saying that the COVID-19 crisis makes consumer shopping patterns and government policies unpredictable.

 

We can’t help but wonder what the future of work will look like in the wake of this global pandemic. That’s the timely topic of today’s interactive webinar, COVID-19’s Impact on the Startup World.

The second of three in our free series of interactive webinars — exclusively for founders exhibiting in Digital Startup Alley at Disrupt 2020 — gets underway today, August 19 at 1pm PT/4pm ET. Exhibitors, be sure to register to attend.

Still on the fence about exhibiting at Disrupt? Hop off and get to it — buy a Disrupt Digital Startup Alley Package, tune in to the remaining webinars, and then get ready to reap the benefits that come with introducing your startup to a global Disrupt audience. More on those in a minute.

You’ll hear from Nicola Corzine, Executive Director of the Nasdaq Entrepreneurship Center and Cameron Stanfill, a VC Analyst at PitchBook. Jon Shieber, a TechCrunch Editor who covers venture capital and private equity investments will moderate the discussion. No one can predict the future, but these three bring years of experience to the table, and they’ll offer a data-informed perspective, tips and advice on how startups can adapt and what they need to think about both during and after COVID-19. It’s interactive, folks — got questions? Get answers.

Exhibiting in Digital Startup Alley is opportunity on steroids. Network with thousands of Disrupt attendees from around the globe. Expose your tech and talent to influencers of every stripe across the startup ecosystem — investors, R&D teams, advisors, potential customers. Make and nurture connections that can result in exciting partnerships.

CrunchMatch, our AI-powered networking platform bridges the physical distance of a virtual conference. It helps you quickly find and connect with the people who can help take your business to the next level. The platform’s up and running right now. Once you register for Disrupt, you can reach out to attendees and start expanding your network immediately.

Ready to exhibit? Great — be sure to mark your calendar for the final exclusive webinar. Tune in on August 26 for Fundraising and Hiring Best Practices with panelists Sarah Kunst of Cleo Capital and Brett Berson of First Round Capital.

We can’t predict the future, but there’s one thing we do know. It’s going to take every opportunity and every advantage to survive and thrive in these tumultuous times.

Buy a Disrupt Digital Startup Alley Package and tune in. It’s worth it.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

No company is completely insulated from the macroeconomic fallout of COVID-19, but we are seeing some companies fare better than others, especially those providing ways to collaborate online. Count Atlassian in that camp, as it provides a suite of tools focused on working smarter in a digital context.

At a time when many employees are working from home, Atlassian’s product approach sounds like a recipe for a smash hit. But in its latest earnings report, the company detailed slowing growth, not the acceleration we might expect. Looking ahead, it’s predicting more of the same — at least for the short term.

Part of the reason for that — beyond some small-business customers, hit by hard times, moving to its new free tier introduced last March — is the pain associated with moving customers off of older license revenue to more predictable subscription revenue. The company has shown that it is willing to sacrifice short-term growth to accelerate that transition.

We sat down with Atlassian CRO Cameron Deatsch to talk about some of the challenges his company is facing as it navigates through these crazy times. Deatsch pointed out that in spite of the turbulence, and the push to subscriptions, Atlassian is well-positioned with plenty of cash on hand and the ability to make strategic acquisitions when needed, while continuing to expand the recurring-revenue slice of its revenue pie.

The COVID-19 effect

Deatsch told us that Atlassian could not fully escape the pandemic’s impact on business, especially in April and May when many companies felt it. His company saw the biggest impact from smaller businesses, which cut back, moved to a free tier, or in some cases closed their doors. There was no getting away from the market chop that SMBs took during the early stages of COVID, and he said it had an impact on Atlassian’s new customer numbers.

Still, the company believes it will recover from the slow down in new customers, especially as it begins to convert a percentage of its new, free-tier users to paid users down the road. For this quarter it only translated into around 3000 new customers, but Deatsch didn’t seem concerned. “The customer numbers were off, but the overall financials were pretty strong coming out of [fiscal] Q4 if you looked at it. But also the number of people who are trying our products now because of the free tier is way up. We saw a step change when we launched free,” he said.