Category: UNCATEGORIZED

U.S. government officials are currently in discussion with a number of tech companies, including Facebook and Google, around how data from cell phones might provide methods for combatting the ongoing coronavirus pandemic, according to a new Washington Post report. The talks also include health experts tracking the pandemic and its transmission, and one possible way in which said data could be useful is through aggregated, anonymized location data, per the report’s sources.

Location data taken from the smartphones of Americans could help public health experts track and map the general spread of the infection, the group has theorized, though of course the prospect of any kind of location tracking is bound to leave people uncomfortable, especially when it’s done at scale and involves not only private companies with which they have a business relationship, but also the government.

These efforts, however, would be strictly aimed at helping organizations like the Centers for Disease Control and Prevention (CDC) get an overview of patterns, decoupled from any individual user identity. The Post’s sources stress that this would not involve the generation of any kind of government database, and would instead focus on anodized, aggregated data to inform modelling of the COVID-19 transmission and spread.

Already, we’ve seen unprecedented collaboration among some of the largest tech companies in the world on matters related to the coronavirus pandemic. Virtually every large tech company that operates a product involved in information dissemination came together on Monday to issue a statement about working closely together in order to fight the spread of fraud and disinformation about the virus.

The White House has also been consulting with tech companies around the virus and the U.S. response, including via a meeting last week that included Amazon, Apple, Facebook, Google, Microsoft and Twitter, and Amazon CEO Jeff Bezos has been in regular contact with the current administration as his company is increasingly playing a central and important role in how people are dealing with essentially global guidelines of isolation, social distancing, quarantine and even shelter-in-place orders.

Earlier this week, an open letter co-signed by a lengthy list of epidemiologists, excecutives, physicians and academics also sought to outline what tech companies could contribute to the ongoing effort to stem the COVID-19 pandemic, and one of the measures suggested (directed at mobile OS providers Apple and Google specifically) is an “opt-in, privacy preserving OS feature to support contact tracing” for individuals who might have been exposed to someone with the virus.

Of course, regardless of assurances to the contrary, it’s natural to be suspicious of any widespread effort to collect personal data. Especially when it’s historically been the case that in times of extreme duress, people have made trade-offs about personal freedoms and protections that have subsequently backfired. The New York Times also reported this week on an initiative to track the location data of people who have contracted the virus using an existing, previously undisclosed database of cellphone data from Israeli cellphone selfie providers and their customers.

Still, there’s good reason not to instantly dismiss the idea of trying to find some kind of privacy-protecting way of harnessing the information available to tech companies, since it does seem like a way to potentially provide a lot of benefit – particularly when it comes to measuring the impact of social distancing measures currently in place.

Earlier today, TechCrunch caught up with Chris Sugden, a managing partner at Edison Partners, to talk about the current fundraising market, what’s next for SaaS startups and if there’s any good news to be found in today’s market.

As the stock market continues to gyrate (more up than down), and the unicorn exit market looks increasingly moribund, understanding how private investors are putting capital to work today and over the next few quarters is critical for startup founders. A host of startups that would have normally raised in Q1 of this year did not. The fundraising market they encounter the rest of the year will help determine their business trajectory.

Before we dive into our Q&A on all that, a short note on Edison Partners . Edison is a growth equity firm, which, according to Sugden, means that its checks range from $5 million to $30 million, with a “sweet spot” between $10 million and $15 million. Regarding stage, Sugden said that Edison looks to put capital into companies with between $8 million and $20 million in revenue, noting that the larger companies stretch his firm’s check size to the max.

About 75% of the firm’s investments are in software-as-a-service companies (SaaS), with the other 25% going into other types of startups. According to the investor, the average growth in Q4 2019 of the firm’s 12 investments from its ninth fund was about 100%, compared to the year-ago period.

So, Sugden is an active investor at a firm that has been around for a few decades with a good-sized account from which to invest. Let’s dig into how he sees the market shaking out.

Fundraising in 2020

The following excerpts come from TechCrunch’s chat with Sugden, which we’ve grouped and edited for clarity. We’ve peeled back the conversation, allowing us to pull out the parts that felt the most useful for startups. We start with his view of the 2020 venture capital market.

As a way to try to ease some of the pressure and low ratings gig workers may face from panicked customers, Instacart has made some changes to its app. The first is that shopper ratings won’t affect their access to orders during the pandemic. Instacart will also forgive all ratings under five stars.

Instacart, in a blog post, said it made this change based on feedback from shoppers.

Shoppers can also cancel batches leading up until they arrive at the store. And if a customer’s entire order is out of stock, Instacart will automatically cancel the order and notify the customer, so that the shopper does not have to contact the support team.

“We’re continuing to see a surge in demand across our platform as consumers increasingly rely on Instacart as an essential service to get the fresh groceries and household goods they need,” an Instacart spokesperson said in a statement. “As part of this growth, we’ve built new product features and increased flexibility for shoppers to help them continue delivering for customers during this busy time. We have more shoppers on the platform than ever before and we have the capacity for more people to join Instacart as a flexible earnings opportunity to pick, pack, and deliver groceries. As customer demand continues, our team is working around the clock to best serve shoppers so they can continue being household heroes for families across North America.”

Lastly, Instacart now allows shoppers to use Apple Pay or Google Pay to checkout, and is working with its retail partners to introduce item caps to prevent customers from ordering more than the in-store purchase limits.

These product changes come a few days after Instacart announced it would offer up to two weeks of pay for any shopper who is diagnosed with COVID-19 or placed in quarantine by a public health authority. In California, some gig workers would rather companies like Instacart, DoorDash and Uber make them W2 employees and offer them benefits like health care, paid sick leave, disability leave and more. Last week, Gig Workers Rising called on California legislators to enforce the new AB-5 law that would ensure companies classify workers as W2 employees instead of independent contractors. It’s worth noting that Instacart is one of the companies working to combat AB5 in a proposed ballot initiative.

“…The occupational accident insurance provisions included in the measure would cover drivers the same as workers compensation insurance covers W2 employees,” a spokesperson for the Protect App-Based Drivers & Services Act told TechCrunch in a statement. “It would cover medical expenses and disability payments for drivers who became ill on the job, either from Coronavirus or another illness. The flexibility, the minimum wage guarantee, the health insurance and the insurance coverage make the ballot measure more imperative now than ever.”

It has only been nine days since I wrote an overview of the state of VC investing during the rise of the novel coronavirus pandemic.

And what a week it has been: The markets have triggered circuit breakers for an unprecedented third time, a global economic depression seems in the offing and the Trump administration is now proposing upwards of $1 trillion in fiscal stimulus on top of the Fed’s hundreds of billions of dollars in quantitative easing.

My God, there is so much news.

Given how much has changed in just the past few days, I wanted to revisit my original advice and go over what is still true, what has turned out to be wrong and what is trending one way or the other as events unfold.

Let’s get started.

As I have said ad nauseam this year, VCs are in a hyper-competitive market like we have never seen before. There are more VCs, VC firms and VC dollars in more geos worldwide prowling for the next startup than ever.

The coronavirus outbreak has not changed this basic thesis in the market.

As China continues to handle the fallout of the novel coronavirus that first originated in Wuhan in Hubei province in early-to-mid December, the Chinese Communist Party announced today that it would rescind the press credentials for certain journalists working at the New York Times, Wall Street Journal, Washington Post, and would further demand operating details from Time magazine and Voice of America.

Those journalists would be limited from working in China, including in Hong Kong, where mass protests last year fueled by a growing democracy and independence movement has brought increasingly critical global attention onto the Beijing government.

China had previously kicked out three reporters from the Wall Street Journal in mid-February, for what it claimed was an insensitive headline in the newspaper’s opinion pages. The Journal’s opinion section operates outside of its newsroom.

China’s suppression of external dissent is also being mirrored with regard to its own citizens. While there was a bit of an open window for discussion as the government attempted to moderate blowback over its response to the novel coronavirus pandemic, internet censors according to the New York Times are now once again clamping down hard on negative conversations and adding additional reinforcements to police online discussions:

Little is known about the group, formally part of the Cybersecurity Defense Bureau, which has long policed hacking and online fraud. But occasional government releases offer clues. In 2016, the 50-million person region of Guangxi said it had almost 1,200 internet police officers. The goal was to have one internet police officer for every 10,000 people in the region, a sign of the force’s ambitions.

The U.S. and China have been locked in a trade war over the past few years, but the looming global depression has placed ever more acute pressure on a relationship that has frayed since China’s turn toward authoritarianism under President Xi Jinping and the election of Donald Trump as president of the United States.

Last week, the U.S. State Department issued its annual human rights report, which particularly singled out China as among the worst offenders globally. In a paragraph that should win an award for semicolon usage, the department wrote that:

Significant human rights issues included: arbitrary or unlawful killings by the government; forced disappearances by the government; torture by the government; arbitrary detention by the government; harsh and life-threatening prison and detention conditions; political prisoners; arbitrary interference with privacy; substantial problems with the independence of the judiciary; physical attacks on and criminal prosecution of journalists, lawyers, writers, bloggers, dissidents, petitioners, and others as well as their family members; censorship and site blocking; interference with the rights of peaceful assembly and freedom of association, including overly restrictive laws that apply to foreign and domestic nongovernmental organizations (NGOs); severe restrictions of religious freedom; substantial restrictions on freedom of movement (for travel within the country and overseas); refoulement of asylum seekers to North Korea, where they have a well-founded fear of persecution; the inability of citizens to choose their government; corruption; a coercive birth-limitation policy that in some cases included forced sterilization or abortions; trafficking in persons; and severe restrictions on labor rights, including a ban on workers organizing or joining unions of their own choosing; and child labor.

The U.S. government is moving to lift restrictions on telemedicine services and expand coverage to all Americans, even as many providers say they’re struggling to meet existing demand.

The expansion covers roughly 62 million Medicare beneficiaries who are among the most vulnerable to the novel coronavirus.

“This action is a part of our broader effort to ensure that government requirements, [and] rules and regulations don’t get in the way of patient care during an emergency,” said Seema Verma in a press conference at the White House on Tuesday.

With the announcement, telemedicine services are now being expanded beyond just the rural areas and brief visits that were previously covered, Verma said. “These services can be provided in a variety of settings including nursing homes, hospital outpatient departments, and more.”

The new agreements also relax restrictions around HIPAA compliance so that doctors can use their own phones. Furthermore, the government said it would be using discretion when it comes to collecting co-pays to further reduce the costs of telemedicine services, according to Verma.

These relaxed rules will ultimately help patients who need care that’s unrelated to an infection with the novel coronavirus. COVID-19 patients are currently being treated at several hospitals around the country and the new guidelines ensure that other patients won’t run the risk of infection.

“With our new telehealth benefits, this person who’s not really… who’s at risk for the coronavirus, doesn’t have to venture outside their home, they can talk to their doctor via Skype and they don’t have to risk exposure to the virus and they can experience that from the comfort of their own home,” said Verma.

Even without the government’s urging, telemedicine services have seen demand spike, according to a report on CNBC.

American Well, Doctor on Demand and 98point6 are all struggling to keep up with new patients as networks suffer and the push to staff-up increases.

That demand will only increase as the government encourages private insurance companies “to expand their telehealth benefits and make it clear to providers and their members what they cover,” as Verma said in her statement to reporters.

Already, some health plans are responding. In New York, two health plans, CDPHP and MVP HealthCare, are offering members no-cost access to telemedicine services.

“As the public contends with coronavirus COVID-19, it’s essential that communities and businesses like ours collaborate to tackle this issue in innovative ways,” said MVP Health Care’s president and CEO, Christopher Del Vecchio, in a statement. “Together with CDPHP, we’re leveraging technology during a challenging time to support the health and safety of the communities we serve. This program is a game-changer for anyone in need of virtual ER triage.”

New startups in the market are doing their part to ensure care as well. Holmdel, N.J.-based Beam Health is offering its telemedicine service to independent physicians in the U.S. for free, the company said yesterday.

Beam doesn’t actually provide the services itself. Instead, it aggregates telemedicine companies and gives consumers their choice of providers. The company is making the service available for free for 90 days to independent doctors’ offices in the U.S.

“Virtual is where it’s at, especially during the rise of this contagious disease,” said Dr. Susan Fedewa, owner of 98point6 Emergicenter in Lansing, Mich., in a statement. “We’re using Beam to continue to provide care to people and hopefully keep the well away from the sick. Especially at times like this, people tend to panic and seek care.”

I know, I know, don’t start a podcast just because you’re bored. Let’s be real though, the COVID-19 situation is going to be the event that launches a million podcasts, as we’re all stuck at home with hours to prattle on about things into he void.

Zencastr, one of the better tools for remote podcasters, announced today that it will be waiving the limits for those on its Hobbyist tier. That includes a dropping limits on hours and and the number of participants. The policy will remain in place until the 1st of July. Hopefully we’ll be able to, you know, go outside by then.

I’ve listed Zencastr in a few of my podcasting guides as a great podcast-specific alternative to virtual conferencing platforms like Skype and Zoom. Among the features is the ability to automatically record and upload individual tracks — a terrific feature when it comes time to edit the thing together.

Waymo said Tuesday it is pausing operations of Waymo One, a service in the Phoenix area that allows the public to hail rides in self-driving vehicles with trained human safety operators behind the wheel, in in response to the COVID-19 pandemic. Waymo is also halting testing on public roads in California.

However, Waymo will keep some operations up and running, notably its truly driverless vehicles, which don’t require a human safety driver, according to an announcement on its website Tuesday. These driverless vehicles are used in the Phoenix area as part of Waymo’s early rider program that lets vetted members of the public to hail a ride.

Both the Waymo early rider program and Waymo One service use self-driving Chrysler  Pacifica minivans to shuttle Phoenix residents in a geofenced area that covers several suburbs, including Chandler and Tempe. Until last fall, all of these “self-driving rides” had a human safety driver behind the wheel.

In October, Waymo started to invite members of its early rider program to take driverless rides with no human safety operator behind the wheel.

Waymo says that it has stepped up efforts to clean its driverless vehicles. The vehicles will be cleaned and sanitized several times throughout the day. The company said it has also added sanitizing products to every Waymo car for rider use.

Here’s the entire statement:

In the interest of the health and safety of our riders and the entire Waymo community, we’re pausing our Waymo One service with trained drivers in Metro Phoenix for now as we continue to watch COVID-19 developments. We’ve also paused driving in California in line with local guidance. 

Our fully driverless operations in Phoenix will continue for now within our early rider program, along with our local delivery and trucking efforts.

We can carry out driverless, delivery, and trucking services for our riders and partners while respecting the important social distancing and hygiene guidelines shared by the CDC and local authorities. Removing the human driver holds great promise for not only for making our roads safer, but for helping our riders stay healthy in these uncertain times.

We’ll continue to monitor COVID-19 developments carefully, and we’ll reach out to our riders if there are any further service changes. Until then, our Rider Support team will be available to answer any questions. 

Stay healthy and thanks from all of us at Waymo.

The move follows guidance from the federal government to take special efforts to slow the spread of COVID-19. It also comes after at least one incident of a human safety driver in a Waymo One vehicle refusing to pick up someone at Intel’s campus in Chandler, Arizona because they had heard a case of COVID-19 had been reported.

Waymo’s partnership with UPS, which involves delivery trips and truck testing outside of California will continue.

Google this week warned Android developers that Play Store app review times will be much longer than normal due to the impacts of the COVID-19 crisis. Developers should expect app reviews to take up to a week or even longer, the company informed its community by way of an alert on the Google Play Console.

This slowdown in moderation efforts isn’t something that’s just impacting Google Play.

Yesterday, YouTube announced it would more heavily rely on its automated systems during this time, which meant more videos will likely be taken down by machine learning-powered systems before they received a review from a human moderator.

In both cases, the slowdowns are related to the reduced in-office staffing levels — a result of the COVID-19 pandemic, which is impacting employee scheduling at Google and elsewhere.

Up until now, Google Play had a fairly quick app review process.

For years, the company differentiated its Play Store from Apple’s App Store by allowing developers to publish without a lengthy review. This, of course, led to issues as the store was over-filled with low-quality and sometimes even malicious apps. In 2015, Google revealed it had begun to utilize an internal team of reviewers to analyze apps for policy violations prior to publication.

Despite the change in process, apps were being approved within hours instead of days, Google said at the time.

That changed last year, however, as the company implemented a more stringent review. It then began to advise developers to plan for review times of at least three days between submission and the app going live. But the length was reduced for established, trusted developers who continued to see faster reviews, Google had noted.

Review times of a week or even longer are unprecedented, much like the COVID-19 crisis itself.

News of the increased app reviews was first reported by Android Police.

A Google spokesperson confirmed the delay to TechCrunch, saying: “Due to adjusted work schedules at this time, we are currently experiencing longer than usual review times. While the situation is currently evolving, app review times may fluctuate, and may take 7 days or longer.”

The delay is also confirmed in the Play Console’s Help documentation.

As the U.S. flirts with extreme market volatility and the possibility of its first recession since the 2008 financial crisis, it’s amazing to think how much consumer financial services have changed in that time. For the last ten years, fintechs have relentlessly democratized financial products by lowering the barriers to use them.

But democratization brings its own risks. To truly improve the lives of their users and guarantee long-term customer loyalty, fintechs should add guardrails and adopt their own version of medicine’s Hippocratic Oath.

Financial institutions and fintechs of the last decade brought unbanked and underbanked consumers onto the ‘financial grid’ in a way that empowered many for the first time. Now, there is a big opportunity to give consumers not only access, but also guidance for how to use financial products in a responsible way. While the first phase in fintech innovation was defined by users’ financial access, this second phase will be defined by their financial health.

During that first phase over the last ten years, financial services became ‘democratized’ at a breathless pace. If someone wanted to open a bank account in 2009, they had to do so in-person. The same was true of taking out a loan. High brokerage fees prevented them from being an active stock trader. Debit cards were used when credit card rewards were lackluster, and many paychecks were still physical.

The paradigm for all these services has shifted. Prices are lower (or eliminated), products are digitized, and an unprecedented number of consumers — not just in the US but globally — can access financial services previously unavailable to them. From personal finance startups to legacy payments companies, many fintechs now champion the cause of democratizing people’s access to finance.

It has become such a cause célèbre that “democratizing finance” could almost be considered its own fintech category, whose hallmarks include:

• Lowering barriers, such as cost, qualifications, and availability to use financial products.
  • Example: Remitly lowers cross-border remittance costs; Square Capital opens term loans to asset-light businesses.
• Targeting new audiences previously unfamiliar with (or shut out from) these products.
  • Example: Step provides no-fee banking and money management services to teenagers; Petal (disclosure, a former employer) gives credit access to people without credit scores.
• Standardizing products across customer demographics.
  • Example: Republic gives retail investors access to the same startups as family offices and accredited investors.

But is unrestricted access always good? What are the implications of entirely removing the barriers to finance? To a higher degree than products in say education, fintech can cause serious consequences, whose effects are most pronounced on unsophisticated consumers.

As at-the-time Harvard Law Professor Elizabeth Warren wrote in 2007, “it is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street.” Credit cards, investing, and trading all carry similar risks.

Today’s market volatility is bringing to light the level of familiarity most people have with financial products: “I had no idea what was going on, I thought the stock market crashed and the Robinhood app couldn’t handle it. I just didn’t know,” one Robinhood user told Fortune during the free stock app’s platform downtime. Consumers have increasingly turned to forums like Reddit to demystify personal finance.

This is actually a feature, not a bug, of traditional finance. Some institutions have worked to make financial concepts non-transparent, to obscure the true cost of finance and justify hidden fees. For instance, APR, which for credit cards is calculated monthly against the average daily balance of the cardholder for the prior statement cycle, could be a simple percentage calculated against a set dollar amount of monthly spending, expressed in cash terms as well as rate.

Fintech startups have done an amazing job making products available, but democratizing access is only half the battle: the next opportunity is to improve consumers’ lives by making these products responsible.

Like democratic voting itself, financial systems will work best when people are:

• Informed. As a civil society, we can do a better job teaching personal finance in schools; it was not until taking a 1-unit elective course as a senior in college that I learned how a mortgage worked. Fintechs can help fill this gap by making information on product risks available and easy to digest for new users. Simplicity is key: concepts such as APR are inherently unintuitive and need to be explained in plain English. And this means finding a way to offset the loss to a traditional profit-center of consumer finance: using complexity to obscure the true cost of finance to customers.
• Responsible. Fintech products can introduce nudges and features that help people self-police. Clear heuristics like risk disclaimers on investments, overdraft alerts, displaying total loan obligations in cash alongside savings can give people contextual information to determine whether products are right for them.
• Limited from doing too much self-harm. This is why the ‘ability to repay’ test in lending, limits on margin in stock trading, and accredited investor requirements exist. People are notoriously bad at forecasting risk and evaluating the potential downside impact of financial products. There is a point at which limits to access become necessary to prevent overexposure to financial danger.
• Context-driven in their decision-making. Personal situations, such as backgrounds, goals, and current obligations, can vary massively from person to person. This is true even for customers who look the same on paper. Though the abundance of digital data gives fintechs increasingly clearer profiles of their users, understanding the nuance of personal context is critical to delivering healthy financial solutions.
• Incentive-aligned with financial services providers. This is the hardest question to answer: how does a company change its revenue model to dovetail with consumer financial health? This means no surprise overdraft fees without low balance alerts. No rewards programs that encourage risky spending. Moving from penalty-based revenue streams to subscription ones. Service providers should only win when consumers win.

Democratization can be dangerous without these types of guardrails in-place. To truly improve people’s financial lives, fintech should adhere to the standard of ‘first, do no harm.’

Give people risk-free environments to learn, like the dad who walked his 14-year old son through investing in Tesla stock or Credit Karma’s debt repayment calculator and credit score simulator. Leverage data to understand people’s personal circumstances. Clearly explain the outcomes — both positive and negative — that products can have on people’s lives.

Traditionally, regulators have played the role of financial health cop, ensuring that service providers remained aligned with their customers’ interests. This is why early-stage fintechs, with lower overhead, the ability to nimbly tweak products for user behavior, and their new revenue models, stand to create such significant change: they can align their incentives with customers without having to reverse course on decades-long practices.

Fintechs have a phenomenal opportunity to cement their leadership position as the go-to providers of financial services. By focusing on the long-term health of users, improving their financial literacy, and using guardrails to encourage responsibility, they can democratize access in a way that truly changes people’s lives for the better.

These opinions are the author’s personal views and do not reflect any views of his employer or other parties.