Category: UNCATEGORIZED

Hello, weekenders. This is Week-in-Review, where I give a heavy amount of analysis and/or rambling thoughts on one story while scouring the rest of the hundreds of stories that emerged on TechCrunch this week to surface my favorites for your reading pleasure.

Last week, I offered up some mildly interesting takes on how Waymo was shaping the future of autonomous vehicles inside of a virtual space rather than wholly on physical roads.

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The big story

There are two internets. There’s the one where we click through interfaces and hit menu buttons and dive down predictable lines of inquiry and find predictable ends. And then there are ads. We don’t understand why we get what we get but we the content flows from platform to user with asymmetric information of the “how?”.

Advertising is the economic backbone of the free consumer web, but users are haplessly oblivious to where that generated content comes from and why. What intrigues me here is that a few days ago Instagram announced that it was further rolling out a test to hide like counts from users and that it has been further minimizing the prominence of follower counts on profiles.

It’s an (admittedly small) step in the evolution but it hinges a bit more on how internet giants have come to realize UX transparency can actually lead to some negatives.

There’s of course the ethical argument where you think about the responsibility that Facebook has not to make people feel shitty about themselves by offering a dopamine-hit conveyor belt as a platform, but a more fascinating idea is what a change like this opens up to the company in terms of returns and what it means for how platforms portray the nebulous idea of “engagement.”

One of the easy returns I bet Instagram finds as they expand this test is that by eliminating the conforming social pressures inherent to seeing what other users are enjoying, Instagram might paint a clearer picture of its users. Without giving users a groupthink crutch to influence their own decisions on what to click the heart button on, a web of content less-focused on stats might lead them to things that actually break into.

What’s the most interesting — that this change sort of lightly grazes across — is that we’ve spent the past few decades with the necessary evil of a web predicated on a cause and effect interface. We’ve had a decent idea of why we’re coming across some piece of content and the statistics of why are often user-facing. But do we need to know how the internet works? Do we need to know why we’re seeing anything?

We’ve been thrust fully into this world of algorithmic feeds and while we’re seeing variation across platforms, we’re seeing the potential and pitfalls of the various platforms. Instagram has flirted with serving users content more boldly outside of things they’ve specifically followed with the Explore feed, but the question is when that smartly-sourced content that will come to dominate a user’s central feed and be their main touchpoint with the platform.

We’ve also seen the dangers of algorithmic content where the “why” is invisible to users, YouTube’s platform has grown immensely based off  ad-like invisibly sourced “watch next” suggestions, but can social platforms pull this off as well or are the fundamentals of today’s algorithmic feeds based around user actions and follows going to stay true down the road?

Send me feedback
on Twitter @lucasmtny or email
lucas@techcrunch.com

On to the rest of the week’s news.

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

• Musk’s Neuralink makes its first promises
  The SpaceX founder is known for his moonshots, but this one kind of takes the cake. On Tuesday, Musk spoke about the progress and long-term goals of the company he hoped would allow humans to “achieve a sort of symbiosis with artificial intelligence.” Read more about the promises made in our report.
• FaceApp goes viral, again
  If you used the internet at all this week, chances are that you saw somebody posting an old-looking photo of themselves that was algorithmically generated by an app called FaceApp. There was an awful lot of backlash to the app’s Russian ties and its user permissions, but we tried to break down what was actually happening.
• SpaceX’s ‘Starhopper’ bursts into flames
  It was only a test vehicle, but uncontrolled explosions generally aren’t the best sign when it comes to testing components for space flight. Check out the video and the company’s explanation here.

GAFA Gaffes

How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:

1. Libra shortcomings:
   [Congressional testimony reveals some faults in Facebook’s digital currency plans]
2. Facebook continues to contradict itself:
   [Facebook accused of contradicting itself on claims about platform policy violations]

Our premium subscription service had another week of interesting deep dives. This week, we showcased the beginning of our deep dive on Roblox, the wildly popular kids gaming platform that has grown beyond unicorn status.

How Roblox avoided the gaming graveyard and grew into a $2.5B company

“…In some ways, Roblox stayed trendy: for instance, it launched sales of its Robux currency in 2008 and virtual goods for developers in 2013, adding microtransactions at a time that much of the game industry was still trying to come to grips with the idea of free gaming. It also supported and nourished a community of unpaid content creators during a time that few other companies had done so, with a few exceptions like YouTube.

Still, the activity taking place in gaming was a philosophical threat. When a company in Roblox’s space hit it big, years before Roblox itself had any hope to, that winning strategy became a temptation. “There are friends, acquaintances, competitors chattering in your ear and saying, maybe you can just do that,” says Dusek…”

Here are some of our other top reads this week for premium subscribers. This week, we talked about seed stage dilution and startup profitability.

• What seed stage dilution tells us about changing investor expectations
• Which types of startups are most often profitable?

We’re excited to announce The Station, a new TechCrunch newsletter all about mobility. Each week, in addition to curating the biggest transportation news, Kirsten Korosec will provide analysis, original reporting and insider tips. Sign up here to get The Station in your inbox beginning in August.

Yes, Captain Jean-Luc Picard is indeed coming back. We knew this from previous announcements, but CBS All Access turned heads at this year’s San Diego Comic Con with an actual trailer of Sir Patrick Stewart Picarding his heart out. He says “engage!” for god’s sake.

From what I can grasp from this trailer, the plot of this Picard-centric follow-up to Star Trek: The Next Generation is that Jean-Luc has retired to a quiet life running a winery but quickly realizes that he’s not through adventuring. For some reason, he has Data stored in pieces in a drawer. He’s convinced to come out of retirement with what looks like a fairly rag-tag crew. Then Data is back somehow.

All of which is to say that this looks awesome and I wish it was here now instead of its “early 2020” release date on the CBS streaming service.

NASA’s 50th anniversary celebrations weren’t limited to just remembrances of past achievements – the space agency also marked the day by confirming that the Orion crew capsule that will bring astronauts back to the Moon for the first time since the end of the Apollo program is ready for its first trip to lunar orbit, currently set for sometime after June 2020.

Orion won’t be carrying anyone for its first Moon mission – instead, as part of Artemis 1, it’ll fly uncrewed propelled by the new Space Launch System, spend a total of three weeks in space including six days orbiting the Moon, and then return back to Earth. Once back, it’ll perform a crucial test of high speed re-entry into Earth’s atmosphere, to demonstrate the efficacy of the Orion capsule’s thermal shielding prior to carrying actual crew for Artemis 2 in 2022, and ultimately delivering astronauts back to the lunar surface with Artemis 3 in 2024.

This isn’t Orion’s first trip to space, however – that happened back in 2014 with Exploration Flight Test 1, another uncrewed mission in which Orion spent just four-hours in space, orbiting the Earth twice and then returning to ground. This mission used a Delta IV rocket instead of the new SLS, and was meant to test key systems prior to Artemis.

NASA contractor Lockheed Martin, which is responsible for the Orion spacecraft’s construction, also noting that the combined crew module and service module are currently being properly integrated, and then will undergo a series of tests before returning to Kennedy Space Center in Florida by the end of the year to begin the final preparations before launch.

Reminder: Extra Crunch Event Discounts for Summer Party

TechCrunch’s annual Summer Party is just around the corner next week — come meet all the staff at the Park Chalet beer garden on the Pacific Coast in San Francisco this Thursday evening. We handed out 50 free tickets to EC subscribers this past week by email, but if you weren’t able to snag one, be sure to use your event discount (part of the annual EC subscription offering) by emailing your member customer service representative at extracrunch@techcrunch.com.

How US national security is holding the internet hostage

I have written quite a bit about CFIUS, the inter-agency process for reviewing venture capital investments and company acquisitions made by foreigners. Now, our special correspondent Mark Harris explores a much less well-known group known as Team Telecom who has been actively reviewing — and denying — additional fiber bandwidth beneath the Pacific Ocean.

SpaceX CEO Elon Musk believes that both the Texas and Florida Starship prototype rockets being developed by the private space company will fly “in 2 to three months,” which is an aggressive timeline considering the planned untethered flight of its Starhopper demonstration prototype missed its target of running this past week.

SpaceX is developing two Starship prototypes in parallel, at both its Texas and Florida facilities, in what is sometime referred to in the technology industry as a ‘bake-off.’ Both teams develop their own rockets independently, in an attempt to spur a sense of internal competition and potentially arrive at combined progress that wouldn’t be possible with just a single team working together on the task.

Earlier this month, Musk stated that the inaugural untethered test of its Starhopper (Hopper for short) Starship tech demo prototype would happen this past Tuesday, July 16. Those plans were derailed when a preliminary test firing of its engines resulted in a large fireball captured on camera by many local observers. Musk later said on Twitter that this was the result of a “post test fuel leak” but added that there was actually no significant damage to the sub-scale Starhopper itself.

The SpaceX CEO then continued with a new timeline for the untethered test, saying it should happen sometime this coming week instead. That’s definitely a required step for the company to take ahead of any test flights of the more complete Starhopper prototypes.

Those initial test will be sub-orbital flights, Musk said on Friday, with orbital tests to follow some “2 to 3 months” after those first test flights 2 to 3 months from today – so, that puts the earliest orbital test flights for Starship at just 4 to 6 months from now. Based on how Musk’s stated timelines match up with reality, you should definitely consider that an extremely optimistic assessment.

Musk also shared some detail about how Starship will launch – it’ll use a launch structure, which is currently under construction at another site, much like Falcon 9 and Falcon Heavy does today.

NASA is celebrating the 50th anniversary of the Apollo 11 Moon landing in a variety of ways today, but here’s one you can experience no matter where you are, provided you have a modern smartphone. NASA’s Astromaterials Research & Exploration Science (ARES) department has released a fully detailed model of the first ever sample of lunar soil and rock, bagged by Astronaut Neil Armstrong during humanity’s first-ever trip to the Moon’s surface.

The rock is fully manipulable provided you visit this link on a smartphone with the capability to display interactive 3D field on the web, so you can twist and turn it using touch to get a better look. It has an incredible level of detail, (“research-grade,” in fact, according to ARES, and is part of a larger effort to make more of the organization’s larger library of lunar and antarctic meteroite samples available to more people, both for research and for education.

These 3D models are created using extremely high resolution photography that captures high megapixel images of the actual samples from 240 different angles, which can offer resolution as detailed as just 30 to 60 microns (doubt the width of a human hair).

But that’s just a start – software uses computer vision to ensure the 3D image provides accurate volume and text true information, and a process that involves the use of X-rays to get a cross-section image without actually slicing up the samples is also employed to ensure fully accurate representation.

If somehow you don’t have a smartphone but you do have those basic red/blue 3D glasses, then you can also view the image below in eye-popping detail. Meanwhile, NASA’s also opening up its lab of Moon rock samples to geologists for the first time, so they can study them directly in person, after years of keeping them under strict lock and key.

Just to get this out of the way: “Frankenstein’s Monster’s Monster, Frankenstein” is a great title. In fact, it’s probably the best thing about the new comedy special on Netflix .

That’s not a complaint about the special itself, which stars David Harbour (a.k.a. Chief Hopper on “Stranger Things”), as both David Harbour Jr — an actor taking on the role of Frankenstein in a play also called “Frankenstein’s Monster’s Monster, Frankenstein” — and David Harbour III, an actor who investigates his father’s life decades later.

If this sounds needlessly complicated don’t worry. As we explain on the latest episode of the Original Content podcast, the plot mostly serves as a springboard lots for jokes about actorly jealousy, Chekhov’s gun and the fact that no one can remember that Frankenstein and his monster are two different people. Anthony and Darrell, at least, found the whole thing to be pretty darn delightful.

Jordan, on the other hand, was baffled and unimpressed, and no matter how much time her co-hosts spent over-explaining the various gags, we couldn’t win her over.

In addition to our review, we discuss Netflix’s recent earnings report and try to figure out why, for one of the first times in its history, the streaming service reported a net loss in U.S. subscribers.

You can listen in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)

If you’d like to skip ahead, here’s how the episode breaks down:
0:00 Intro
1:50 Netflix subscriber numbers
22:53 “Frankenstein’s Monster’s Monster, Frankenstein” review

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Zoom and Superhuman’s PR disasters. Before that, I noted the big uptick in VC spending in 2019.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

Now let’s talk about mental health startups. VCs may be confident in the potential of teletherapy, but struggling companies in the space tell another story.

Nine months ago Basis launched a website and app for guided conversations via chat or video with pseudo-therapists or people trained in research-backed approaches but who lack the same certifications as a counseling or clinical psychologist. I wrote a story noting that the company, led by former Uber VP Andrew Chapin, had raised a $3.75 million round from Bedrock, Wave Capital and Lightspeed Venture Partners.

But last month, things took a turn for the worse. Basis quietly shut down its website and app, its co-founder and chief science officer, Lindsay Trent, a former research psychologist at Stanford, exited and a good chunk of eight-person team went out the door.

Basis was one of many startups to benefit from VCs’ growing appetite for innovative businesses in the mental health sector. As the stigma associated with seeking mental health support has dwindled and technology developments have allowed for personalized mental health tools and practices, more entrepreneurs have entered the space. Basis, despite having many of the ingredients needed for startup success, couldn’t achieve success with its direct-to-consumer approach to therapy.

When asked why the Basis app and website were no longer active, Chapin said the company is in the process of “shifting business models.” He declined to provide further details. Lightspeed declined to comment. Wave Capital and Bedrock did not respond to requests for comment.

Basis, which did not claim to treat diagnosable conditions like bipolar disorder or schizophrenia, charged $35 per 45-minute phone call with its paraprofessionals. Its use of unlicensed therapists sparked concern in the mental health provider community. Harley Therapy founder Sheri Jacobson, an accredited counselor and psychotherapist, noted flaws with the service: “For me, replacing professional therapists and all of their lived experience and empathy with telepsychiatry administered by novice advisers could be potentially dangerous,” Jacobson said in a statement. “Would you let a learner driver navigate an oil tanker?”

What could go wrong?

“Because Basis works with paraprofessionals — people trained in research-backed approaches but who don’t have the same certifications as a counseling or clinical psychologist — it’s a much cheaper alternative to paying for a therapist.”

— Christina Farr (@chrissyfarr) October 4, 2018

Consumer mental health startups continue to attract capital from private market investors. Workplace mental health service Unmind, Blackthorn Therapeutics (a neurobehavioral health company using machine learning to create personalized medicine for mental health) and Talkspace (a leader in the online counseling space) have all closed funding rounds in 2019.

Whether Basis will find its footing is TBD. What’s clear is VCs are still willing to dole out checks as they experiment with the mental health space, but if startups don’t start proving viable business models and learn to navigate the complex adoption curve, we’ll see additional startups cease operations and mental health tech’s moment in the sun will end all too soon.

Now for a quick look at the top VC and startup news of the week:

Adam Neumann did what?

The eccentric co-founder and CEO of the international real estate co-working startup WeWork has reportedly cashed out of more than $700 million from his company ahead of its upcoming IPO. According to Axios, a majority of that capital came in the form of loans while the remaining $300 million came from stock sales. The size and timing of the payouts is unusual, considering that founders typically wait until after a company holds its public offering to liquidate their holdings. But even with the big sale, Neumann remains the single largest shareholder in WeWork.

Medallia soars

The customer experience management platform priced shares of its stock at $21 apiece Thursday, closing up Friday a whopping 76%. Money left on the table? I think so, and I bet Bill Gurley does too. The nearly two-decades-old company sold a total of 15.5 million shares in its IPO, raising $326 million at a $2.5 billion valuation in the process. Medallia’s $268 million in VC funding came from Sequoia Capital — which owned a roughly 40% pre-IPO stake — Saints Capital, TriplePoint Venture Growth and Grotmol Solutions.

The stock was dramatically mispriced by an archaic hand allocated matching process that needs to go away. This is 2019 and everyone intelligent knows there is a better way to match supply and demand. These are failures.

— Bill Gurley (@bgurley) June 29, 2019

Uber finally sets diversity and inclusion goals

Within the next three years, Uber aims to increase the percentage of women at levels L5 and higher (manager and above) to 35% and increase the percentage of underrepresented employees at levels L4 and higher to 14%. Currently, Uber is 9.3% black and 8.3% Latinx compared to just 8.1% black and 6.1% Latinx last year. Uber’s tech team, however, is just 3.6% black, 4.4% Latinx and 2.7% multi-racial. Unsurprisingly, there’s little representation of black and brown people in leadership roles. While Uber CEO Dara Khosrowshahi commented that he’s proud the promotion rates for women have improved over the last couple of years, he added, “I can’t yet say the same for promotions for people of color.”

Email platforms and productivity apps and subscription tools, oh my!

Startups focused on improving productivity and email are unstoppable this year. The latest to close VC rounds are Substack and Notion. Andreessen Horowitz is betting that there’s still a big opportunity in newsletters, leading a $15.3 million Series A in Substack. The company, which consists of just three employees working out of a living room, says that newsletters on the platform have now amassed a total of 50,000 paying subscribers (up from 25,000 in October) and that the most popular Substack authors are already making hundreds of thousands of dollars per year. As for Notion, The Information reported this week that it raised $10 million at an $800 million valuation. Notion is a note-taking and task management app that hasn’t sought much VC funding and, as a result, VCs have been desperately knocking at its door.

Other notable funding events of the week:

• India’s Oyo valued at $10B after founder buys back shares
• Car-sharing marketplace Turo gets $250M at $1B valuation
• Banking startup N26 raises another $170M at $3.5B valuation
• Patreon secures $60M Series D, targets international growth and customization
• Business travel SaaS startup TravelPerk nabs $60M
• Esports company 100 Thieves raises $35M Series B
• Serena Williams, Marc Cuban back Mahmee, a network for new moms

The trouble with blitzscaling

Get ready for … The Station

TechCrunch senior transportation reporter Kirsten Korosec has something great in the works. All of us here at TechCrunch are very excited to announce The Station, a new TechCrunch newsletter all about mobility. Each week, in addition to curating the biggest transportation news, Kirsten will provide analysis, original reporting and insider tips on the fast-growing industry. Sign up here to get The Station in your inbox beginning in August.

~Extra Crunch~

While we’re on the subject of amazing TechCrunch #content, it’s probably time for a reminder for all of you to sign up for Extra Crunch. For a low price, you can learn more about the startups and venture capital ecosystem through exclusive deep dives, Q&As, newsletters, resources and recommendations and fundamental startup how-to guides. Here are some of my personal favorite EC posts from the past week:

• The Roblox EC-1, Part 1: The Origin Story // How Roblox avoided the gaming graveyard and grew into a $2.5B company by Sherwood Morrison.
• What seed-stage dilution tells us about changing investor expectations // A little-noticed startup financing trend has big implications for how VC firms evaluate companies raising Series A and B rounds by Dale Chang.
• Which types of startups are most often profitable? // One answer: E-commerce, Chrome extensions, mobile apps, enterprise SaaS, SMB SaaS — in that order by Julian Shapiro.

#EquityPod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Equity co-host Alex Wilhelm and I debate Forbes’ latest next billion-dollar startups list.

Extra Crunch subscribers can read a transcript of each week’s episode every Saturday. Read last week’s episode here and learn more about Extra Crunch here. Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Pocket Casts, Downcast and all the casts.

That’s all, folks.

Tesla has withdrawn its request for a court-ordered restraining order against Randeep Hothi, documents submitted to the court where the complaint was filed revealed Friday. Hothi, an individual who is very vocal on social media about his short position in Tesla, had gone to extreme and potentially dangerous lengths in his avid attempts to collect materials to support his vocal criticism, according to the company.

The Alameda County Superior Court actually granted Tesla a temporary injunction in this matter back in April, after Tesla filed a complaint with supporting documents supporting its assertion that Hothi had injured a guard during a hit-and-run incident in February, and that he nearly caused an accident by driving dangerously in pursuit of a Tesla Model 3 undertaking a test driven on April 16.

After granting the temporary injunction based on Tesla’s description of events, supporting materials, and written affidavits submitted by employees, the court asked Tesla to produce both audio and video recordings related to these two incidents pursuant to a hearing. In withdrawing its complaint Friday, Tesla conveyed in documents filed with the court that it considered this requirement unnecessary in light of materials already provided, and an undue imposition on the privacy of their employees, since the recorded conversations regarding the incident contained “its employees’ private and personal conversations” as well as materials relating to the case.

Tesla maintains in its letter to the court that it still believes “a restraining order against Mr. Hothi is necessary and appropriate to protect its employees at their workplace,” it says that faced with the choice between said protection and exposing their employees’ private conversations to further public scrutiny, it will instead opt to pursue the protection of their safety “through other means.”

When contacted about the withdrawal, a Tesla spokesperson told TechCrunch that the company is now confident Hothi should be well aware at this stage that he’s not permitted to enter the company’s property, and that it will pursue legal action should he ever attempt to do so in future.

Introduced a few I/Os back, Fast Pair is Google’s attempt to make its own mark on the post-AirPod headphone landscape. Many of the features are similar to Apple’s offerings, but Google’s got a leg up in one key way: third-party hardware. Like Android, the company’s focused on bringing Fast Pair to as many manufacturers as possible.

That list now includes Libratone, Jaybird, JBL (four models), Cleer, LG (four models), Anker (one pair of headphones and speaker) and, of course, Google’s own Pixel Buds. This week, the company announced a number of key features coming to Fast Pair headphones.

New this time around is Find My Device functionality, aimed at helping owners locate missing headsets. The app will show the time and location they were last in use, and will send out a chime from buds that are still in Bluetooth range.

Also new is individual battery life for buds and case. Opening up the case near a paired handset will pop up that information. All of the above features will arrive on the 15 or so headphones that currently sport the feature.