Category: UNCATEGORIZED

Entrepreneurship in consumer packaged goods (CPG) is being democratized. Every step of the value channel has been compressed and made more affordable (and thereby accessible).

At VMG Ignite, we have worked with dozens of direct-to-consumer startups trying to both find product-market fit and achieve scale through Amazon and online advertising.

This article focuses on customer acquisition, particularly Amazon and online advertising, for the direct-to-consumer (D2C) CPG venture. Selling on Amazon, specifically third-party (3P), has become an increasingly important component of the D2C playbook. About 46% of product searches start on Amazon, which makes it a compelling source of sales even for early-stage ventures.

Table of contents

• How to find product-market fit
• How to get started with Amazon
• Maximizing sales on Amazon 
  • Titles
  • Image stack
  • Bullet points
  • Descriptions
  • Backend details
  • Browse nodes
  • A+ content
  • Ads
• Getting started with Facebook ads
• Growing sales after you have product-market fit
• What tools and technology to use for your D2C business 

How to find product-market fit 

People say that ideas are a dime a dozen. They aren’t valuable. But finding product-market fit? Now, that’s hard. The gap between an unexecuted idea and proven product-market fit can seem vast. Yet it’s a critical first step because, ultimately, marketing amplifies your product and value proposition.

If they aren’t compelling, marketing will fail. If they’re compelling, even mediocre marketing can often be successful. So start with a great product that people love.

How do you create a great product, you ask? A/B test your product configuration like you A/B test your landing page, copy, and design. Your product is a variable, not a constant. Build, ship, get feedback. Build, ship, get feedback. Turn detractors into your customer panel for testing.

Early-stage D2C companies typically get their first customers through three channels:

1. Begging your friends and family to buy and promote your product.
2. List it on Amazon as a 3P seller. Figure out the platform and start selling!
3. Advertise on Facebook. Start with a daily budget of 10x your price point to get started and start tinkering with creative, audiences, and settings to minimize cost per order.

The companies that succeed are often the ones that iterate the fastest. In his book Creative Confidence, IDEO founder David Kelley and his co-author (and brother) Tom relay a story of a pottery class that was split into two groups.

The first group was told they would each be graded on the single best piece of pottery they each produced. The second group was told they would each be graded based on the sheer volume of pottery they produced.

Naturally, the first group labored to craft the perfect piece while the second group churned through pottery with reckless abandon. Perhaps not so intuitive, at the end of the class, all the best pottery came from the second group! Iteration was a more effective driver of quality than intentionality.

Don’t know how to manage Amazon or Facebook? Here are some best practices:

How to get started with Amazon

John Donovan, CEO of AT&T Communications, announced today his plans to retire effective October 1, 2019. Donovan has for the past two years led AT&T’s largest business unit, which services 100 million mobile, broadband and pay-TV customers in the U.S., as well as millions of business customers, including nearly all the Fortune 1000.

The news comes amid several big changes in that business unit itself, and more in the broader telecom industry.

For starters, AT&T had just rebranded its over-the-top streaming service DIRECTV NOW to AT&T TV NOW, and  just last week rolled out a brand-new TV service, AT&T TV, in 10 test markets.

While DIRECTV NOW (aka AT&T TV NOW) is meant to compete with other over-the-top streaming services like Dish’s Sling TV, Hulu with Live TV, YouTube TV and others, the new AT&T TV is a more conventional — though still “over-the-top” — option that can work with any broadband connection.

However, it locks in customers to two-year contracts, requires a set-top box, and has packages that range from $60-$80 per month, much like a traditional TV subscription.

Elsewhere at AT&T, its WarnerMedia division is working a streaming service of its own, HBO Max, which is meant to battle more directly with premium offerings, like Disney+ or Apple TV+, for example. AT&T also operates a low-cost streaming service, Watch TV.

And the company continues to offer pay-TV offerings like DIRECTV (satellite service) and U-verse (cable).

It seems AT&T is due to consolidate these efforts at some point, and Donovan’s departure could signal some changes on that front, perhaps. Plus, as The WSJ reported, Donovan and WarnerMedia head John Stankey had a strained relationship at times. That could because HBO Max will end up competing with other AT&T offerings and services, the report suggested.

In addition to its various streaming ambitions, AT&T is also starting to roll out 5G, a move Donovan spearheaded. The company is also preparing for competition from new players, including what arises from a T-Mobile/Sprint merger, and from Dish’s plans to enter the wireless market.

Donovan had been CEO of AT&T Communications for two years, after having originally joined the company as CTO in 2008. Prior to his CEO role starting in July 2017, he had been promoted to AT&T’s Chief Strategy Officer and Group President—AT&T Technology and Operations.

He had also previously worked at Verisign, Deloitte Consulting, and InCode Telecom Group.

Donovan, 58, was nearing the company’s retirement age of 60, but his departure was still unexpected, The WSJ also said.

“It’s been my honor to lead AT&T Communications during a period of unprecedented innovation and investment in new technology that is revolutionizing how people connect with their worlds,” said John Donovan, in a statement. “All that we’ve accomplished is a credit to the talented women and men of AT&T, and their passion for serving our customers. I’m looking forward to the future – spending more time with my family and watching with pride as the AT&T team continues to set the pace for the industry.”

“JD is a terrific leader and a tech visionary who helped drive AT&T’s leadership in connecting customers, from our 5G, fiber and FirstNet buildouts, to new products and platforms, to setting the global standard for software-defined networks,” added Randall Stephenson, AT&T’s chairman and CEO. “He led the way in encouraging his team to continuously innovate and develop their skill sets for the future. We greatly appreciate his many contributions to our company’s success and his untiring dedication to serving customers and making our communities better. JD is a good friend, and I wish him and his family all the best in the years ahead.”

Disclosure: TechCrunch is owned by Verizon by way of Verizon Media Services. This does not influence our reporting. 

Porsche’s upcoming all-electric Taycan has set a narrow, yet notable record lap time at the famous Nürburgring Nordschleife test track in Germany.

The company said Monday the Porsche Taycan, which will debut Sept, 4., completed the 12.8-mile course in 7 minutes and 42 seconds. This is the fastest lap for a four-door electric vehicle. The record time was set in a pre-series Taycan driven by Lars Kern.

But it’s not the fastest lap for any electric vehicle. That honor goes to Volkswagen’s ID R electric race car, which completed the course in 6:05.336 minutes. The previous record was set in 2017 by Peter Dumbreck, who was driving a Nio electric vehicle.

Still, it’s a zippy time for any vehicle. Porsche has set out to show the speed and endurance of its first electric vehicle ahead of its debut. Porsche says its record run at Nürburgring-Nordschleife and an endurance test the Nardò high-speed track show the Taycan can both.

Earlier this year, Porsche tested the Taycan’s ability to do successive acceleration runs from zero to 62 miles per hour. A video shows 26 successive starts without losses in performance. The average acceleration figure from the timed runs was under 10 seconds, according to Porsche. The difference between the fastest and slowest acceleration runs was 0.8 seconds, the company said.

The German automaker also drove 2,128 miles at speeds between 128 and 133 mph within 24 hours, only stopping to charge the battery and change drivers, at the Nardò track in Italy.

At Nürburgring-Nordschleife, development engineers started driving a Taycan around in a simulator to test and evaluate its performance on a virtual race track. Porsche said one of the main goals was determining electric energy with thermal management, which form an important contribution to achieving the lap time.

Porsche is aiming to prove to its existing customers, many of whom have never driven or owned an electric vehicle, that the Taycan will meet the same performance standards as its gas-powered cars and SUVs. It also hopes to attract new customers to the Porsche brand.

It appears the company is on the right track, if the thousands of reservations for the Taycan convert into actual purchases.

Many Silicon Valley companies and fintech startups in India today share a common mission: They all want to bring their financial services to the next billion users. Dozens of fintech startups that we have spoken to in recent months have told us that they all want to address much of India, one of the last great growth markets globally, in the next few years.

So you can imagine our excitement when we learned there is at least one startup that is going after just a few million users in the immediate future. We’re talking about CRED, a nine-month-old, Bangalore-based startup that is building solutions to incentivize credit card users in India to become more responsible with money and thereby improve their credit score.

CRED has raised $120 million in a Series B financing round, Kunal Shah, founder and CEO of the startup, told TechCrunch on Monday. He declined to share more information. The startup, which has raised about $145 million to date, is now valued between $430 million to $450 million, a person familiar with the matter told TechCrunch.

According to a regulatory filing, existing investors Sequoia Capital, Ribbit Capital and DST Global’s Gemini Investments led the round, with participation from Tiger Global, Hillhouse Capital, General Catalyst, Greenoaks Capital and Dragoneer.

Hundreds of millions of Indians today don’t have a credit score because they have never taken a loan from a recognized entity nor owned a credit card. According to the government’s official figures, fewer than 50 million credit cards are in circulation in India currently, with industry reports suggesting that the actual number of unique credit card holders is about half of that.

“Nobody taught us about how to use money,” Shah told TechCrunch in a recent interview. “This has created a huge trust gap in India. If you look at developed markets, systematic trust is very high between all the entities. Members don’t have to rely on third-parties. In India, even if you wanted to rent a flat, you look for brokers, for instance.”

You can build that trust when you know how someone handles their money, and how they have handled it in recent history. “Our aim is to create a big membership community with high credit worthiness, therefore open up more opportunities for them,” Shah explained.

Shah is not going after the masses. He wants to focus on just the credit card users for now, and if he could win the trust of just half of those plastic card holders in India, he would consider it a success.

“Instead of chasing the mythological mass customers who are currently useful only on paper if you wanted to boast about your daily active user or monthly active user metric, our goal is to serve the existing users,” he said.

On CRED, users are offered a range of features, including the ability to better track their spending, get reminders and check their credit score, but more importantly, access to a range of lofty offers such as membership to a gym at a discounted price, access to good restaurants at low prices and subscription to various services at little to no charge. Users can access these features by earning points, which they can secure every time they pay their bills on time.

Varun Krishnan, editor of technology news site FoneArena, told TechCrunch that he has found CRED useful in getting reminders to pay his bills and likes that he can pay them through a range of payment options, including UPI apps and debit cards. “I have several cards and it is hard to track amounts and due dates of payment for each one. They send all these alerts on WhatsApp, which is a blessing,” he said.

These are the reasons that attracted many people like Krishnan to join CRED. That, and some incentive to pay his bills — though he hopes that CRED expands the range of offers it currently provides to customers.

That wish may soon come true. In the coming months, CRED will enable these highly sought-after customers to access some financial services from banks in a single-click. Additionally, it is also exploring expansion to some international markets, the aforementioned source said.

CRED does not charge users any money for joining its platform, nor for availing any of the features it offers. But it is generating revenue from some of the partners that are supplying offers on the app.

Generating revenue, however, is not the biggest focus for Shah currently. And he is one of the few people in the industry who can build a business with such conviction.

An industry veteran known for speaking the uncomfortable truth at conferences, it’s no surprise that Shah has won the trust of so many investors already. He built one of the biggest payment apps in India, Freecharge, and sold it to e-commerce giant Snapdeal for a whopping $400 million in one of the increasingly rare exits that India’s fintech market has seen to date.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Bedding startup Boll & Branch raises $100M

The company sells sustainably sourced sheets, pillows, mattresses and towels. Until now, it had only raised $12 million in outside capital.

This new funding comes from L Catterton. CEO Scott Tannen compared Boll & Branch to the firm’s previous investments The Honest Company and Peloton — companies that “have become the winner in the startup competition” and are ready to “really become household names.”

2. Nvidia and VMware team up to make GPU virtualization easier

Nvidia today announced that it has been working with VMware to bring its virtual GPU technology to VMware’s vSphere and VMware Cloud on AWS.

3. Megvii, the Chinese startup unicorn known for facial recognition tech, files to go public in Hong Kong

Founded by three Tsinghua University graduates in 2011, Megvii is among China’s leading AI startups, with its peers (and rivals) including SenseTime and Yitu. Its clients include Alibaba, Ant Financial, Lenovo, China Mobile and Chinese government entities.

4. Watch the first look at ‘Star Wars: The Rise of Skywalker’ from Disney’s big fan event

This video goes really heavy on the nostalgia.

5. Experimental US Air Force space plane breaks previous record for orbital spaceflight

The Boeing-built X-37B space plane commissioned and operated by the U.S. Air Force has now broken its own record for time spent in space. Its latest mission has lasted 719 days as of today.

6. Is Knotel poised to turn WeWork from a Unicorn into an Icarus?

Knotel has reversed the WeWork “co-working” model. Instead of “WeWork” branding everywhere, Knotel simply leases buildings, takes a small office for its staff and then kits out the space in a way where a company can just move straight in and call it their own. (Extra Crunch membership required.)

7. This week’s TechCrunch podcasts

John Vrionis of Unusual Ventures joins Equity to talk about why he thinks “stage-agnostic” investing doesn’t make any sense. And on Original Content, we review the Netflix movie “The Red Sea Diving Resort.”

Bell Helicopter’s catchily-named Autonomous Pod Transport 70 (aka APT 70) has managed a major milestone, performing its first autonomous flight during a test at its Forth Worth providing ground. The aircraft is a small vertical take-off and landing craft that users four rotors to provide lift and propulsion once it’s in the air, and it’s a prototype for what Bell hopes will eventually be a small autonomous commercial cargo craft.

APT 70 has a max speed of over 100 mph, and can carry 70 lbs on board, which is good for a fair range of potential applications, including package delivery and even things like humanitarian and rescue missions. Because of the way it flies, switching from vertical to horizontal orientation for its rotors, it can fly much faster than traditional rotor-based aircraft given similar size and power constraints.

Bell’s goal with APT 70 is to successfully simulate a commercial mission as part of the NASA Systems Integration and Operationalization demo set to take place sometime in the middle of next year. This demonstration aims show how the aircraft can be intreated with centralized command and control and obstacle avoidance technologies, a key step in readying autonomous aircraft for commercial service in the U.S.

In addition to its U.S. demonstration mission with NASA, Bell is working with Japanese logistics company Yamato, and hopes to have their first collaborative product in market for on-demand customer deliveries sometime in the middle of next year.

Apple has fixed a security flaw for a second time after it accidentally reintroduced an old bug in a recent software update.

iOS 12.4.1, released Monday, contains a security fix that was first patched months earlier in iOS 12.3. Apple rolled out a fix in May, but accidentally undid the security patch in its latest update, iOS 12.4, in July.

In a brief security advisory published after the software’s release, Apple said it fixed a kernel vulnerability that could have allowed an attacker to execute code on an iPhone or iPad with the highest level of privileges.

Those privileges, also known as system or root privileges, can open up a device to running apps that are not normally allowed by Apple’s strict rules. Known as jailbreaking, apps can access parts of a device that are normally off-limits. On one hand that allows users to extensively customize their devices, but it can also expose the device to malicious software, like malware or spyware apps .

Spyware apps often rely on undisclosed jailbreaks exploits to get access to a user’s messages, track their location, and listen to their calls without their knowledge. Nation states are known to hire mobile spyware makers to remotely install malware on the devices of activists, dissidents, and journalists. Washington Post journalist Jamal Khashoggi, who was murdered by agents of the Saudi regime, is believed to have been targeted by mobile spyware, according to reports. The company accused of supplying the spyware, Israel-based NSO Group, has denied any involvement.

Apple confirmed the fix in its iOS 12.4.1 security notes, which included a short acknowledgement to Pwn20wnd, the team which confirmed last week that its jailbreak was working again.

Usually when someone in tech says the word “quantum,” I put my hands on my ears and sing until they go away. But while IBM’s “quantum computing safe tape drive” nearly drove me to song, when I thought about it, it actually made a lot of sense.

First of all, it’s a bit of a misleading lede. The tape is not resistant to quantum computing at all. The problem isn’t that qubits are going to escape their cryogenic prisons and go interfere with tape drives in the basement of some datacenter or HQ. The problem is what these quantum computers may be able to accomplish when they’re finally put to use.

Without going too deep down the quantum rabbit hole, it’s generally acknowledged that quantum computers and classical computers (like the one you’re using) are good at different things — to the point where in some cases, a problem that might take incalculable time on a traditional supercomputer could be done in a flash on quantum. Don’t ask me how — I said we’re not going down the hole!

One of the things quantum is potentially very good at is certain types of cryptography: It’s theorized that quantum computers could absolutely smash through many currently used encryption techniques. In the worst case scenario, that means that if someone got hold of a large cache of encrypted data that today would be useless without the key, a future adversary may be able to force the lock. Considering how many breaches there have been where the only reason your entire life wasn’t stolen was because it was encrypted, this is a serious threat.

IBM and others are thinking ahead. Quantum computing isn’t a threat right now, right? It isn’t being seriously used by anyone, let alone hackers. But what if you buy a tape drive for long-term data storage today, and then a decade from now a hack hits and everything is exposed because it was using “industry standard” encryption?

To prevent that from happening, IBM is migrating its tape storage over to encryption algorithms that are resistant to state of the art quantum decryption techniques — specifically lattice cryptography (another rabbit hole — go ahead). Because these devices are meant to be used for decades if possible, during which time the entire computing landscape can change. It will be hard to predict exactly what quantum methods will emerge in the future, but at the very least you can try not to be among the low-hanging fruit favored by hackers.

The tape itself is just regular tape. In fact, the whole system is pretty much the same as you’d have bought a week ago. All the changes are in the firmware, meaning earlier drives can be retrofitted with this quantum-resistant tech.

Quantum computing may not be relevant to many applications today, but next year who knows? And in ten years, it might be commonplace. So it behooves companies like IBM, which plan to be part of the enterprise world for decades to come, to plan for it today.

IMDb TV, the free ad-supported streaming service launched by Amazon-owned IMDb at the beginning of the year (originally called Freedive), is today arriving on mobile devices. With the updated version of iOS and Android IMDb app rolling out now, users can stream from the app’s growing library of free movies and TV series.

Prior to IMDb TV’s launch, the movie website had experimented with video content in the form of trailers, celebrity interviews, and other short-form series. But consumers today are more interested in services where they can stream premium content for free, without a subscription — as they can on IMDb TV competitors like Walmart-owned Vudu’s “Movies on Us,” Tubi, or The Roku Channel, for example.

At launch, IMDb TV offered a collection of TV shows like Fringe, Heroes, The Bachelor and Without a Trace, as well as Hollywood movies like Awakenings, Foxcatcher, Memento, Monster, Run Lola Run, The Illusionist, The Last Samurai, True Romance, and others.

This summer, it expanded its lineup through new deals with Warner Bros., Sony Pictures Entertainment and MGM Studios.

This brought movies like Captain Fantastic and La La Land to the service, the latter which has since become one of the service’s most-streamed movies this summer. Other popular titles included Jerry Maguire, Practical Magic, A Knight’s Tale, Drive, Max, Step Dogs, Zookeeper, Paddington, and NeverEnding Story.

More recent deals with Paramount and Lionsgate have also brought new content to IMDb TV, like Silver Linings Playbook, Age of Adaline, In the Heart of the Sea, and the TV show, The Middle.

The company hasn’t said how many customers IMDb TV has, but the service has benefitted from integrations with Amazon’s Fire TV.

Earlier this year, Marc Whitten, vice president of Fire TV, noted that Fire TV customers’ use of free, ad-supported apps had increased by over 300% during the last year. IMDb TV, is expected to contribute to that, with its placement on the “Your Apps & Channels” row on Fire TV and its availability as a free channel within the Prime Video app.

The updated iOS and Android IMDb app is rolling out starting today, the company says.