Monday, October 21, 2019

“Grab, Inside Out: Singapore Unicorn's Big Foray Into Investing in Startups - Entrepreneur” plus 2 more

“Grab, Inside Out: Singapore Unicorn's Big Foray Into Investing in Startups - Entrepreneur” plus 2 more


Grab, Inside Out: Singapore Unicorn's Big Foray Into Investing in Startups - Entrepreneur

Posted: 20 Oct 2019 10:37 PM PDT

Singapore's Grab earlier this year launched its investment platform, Grab Ventures, focused on tech, logistics, mobility, payments, food and groceries, and other on demand services

5 min read

While Uber and Lyft's initial public offerings were making headlines day after day earlier this year, Singapore's biggest ride-hailing, Grab, was quietly working on growing its footprint in Indonesia, expanding into Vietnam with a $500 million investment, and bolstering its new startup accelerator program, Grab Ventures.

Over a year old, the company launched the investment vehicle to primarily put money in growth-stage startups, especially those focused on tech, logistics, mobility, payments, food and groceries, and other on demand services.

However, tech remains its hottest pick.

"We're a tech company through and through," says Chris Yeo, head of Grab Ventures, talking to Entrepreneur at a fireside chat in Hong Kong. "Right now, we're in a space where technological disruptions happen often, and 'disruption' is one of our core principles," he added.

The accelerator is a way for Grab to invest in companies that could potentially become strategic partners for its "super-app", an all-in-one regional mobile application for cabs, food, medicines, groceries – basically anything 'on demand'.

Currently, its portfolio includes GrabWheels, an e-scooter hailing service, Kitchen by GrabFood, Drive.ai, an artificial intelligence-related autonomous vehicle company, and HappyFresh, an independent online grocery delivery service that received investment from the company in April this year, at a valuation of $20 million, according to data aggregator Crunchbase.

While all of these fit into Grab's suite of services perfectly, the company prefers taking a minority stake, over acquisitions, to perhaps test waters before diving in completely.

"We can't take a lot of financial risk, and so, we are strategic with our investments," Yeo says.

"With any company, we first like to take a test drive – if it does very well, we invest. If it goes moderately well, we could maybe do a commercial partnership, so both Grab, and the startup can benefit from it."

The company infuses capital into a startup in three ways: by venture building, where invests in businesses that are strategic for Grab, but still quite a few steps away from its core operations; through its scale-up program, and then through the normal venture capital or traditional route, Yeo said.

The advantage in being a part of Grab's startup club is that the company has been there, done that.

"For example if a local player wants to go to other parts of Southeast Asia, Grab can help the company do that - we've done all the hard work already. So we scale national champions to regional champions. And that's how their business grows. Because when our startups grow, it benefits us as well," Yeo said.

And even though most of the company's investment decisions are made keeping the larger ecosystem in mind, there are no constraints on startups having a clientele outside of Grab.

"Grab Ventures is a minority investment vehicle. So our startups all essentially do have their own customer bases, and business models outside Grab. We house them, accelerate their businesses, and then help them scale," says Yeo.

"We don't want businesses that succeed only for Grab - we want them to thrive outside the Grab ecosystem as well because we're putting money into it. They must be successful in their own right. Otherwise we would just acquire them, instead of investing time and money."

Investing Philosophy

Yeo says on a personal level, he first likes connecting with the founders more than with the business.

"I have to buy into the founder and the co-founder first. So even if they fail, but I believe he or she is a good founder, I'll reinvest in his next venture."

The second thing that he looks for while making investment decisions is if the founders are sure of what they are signing up for.

"I always ask the founders 'why are you talking to me?', because strategic investors are very different from other investors. I always say to them 'you are seeking strategic investment from Grab, rather than the several other traditional financial investors that are all excellent as well.' I need to be very clear that they understand their decision, if we decide to invest," Yeo says.

Hitching a Ride on Grab's Huge Mobile Platform

Every investor and startup relationship is predicated on give and take, and Grab's biggest strength is its mobile internet platform, which has 140 million downloads across several Southeast Asian geographies – an enviable exposure not every startup gets.

"We have a strong consumer platform, and an equally strong merchant platform. So whether it's a B2B startup, or a B2C startup, we can unleash potential synergies," Yeo says.

He adds that Grab's tech architectures are designed to quickly onboard new startups and partners, which then lets the businesses show proof of concept quickly – a valuable proposition to any new company looking to get its feet wet quickly.

"We've clearly said that Grab focuses very much on transport, food, payments and financial services, and logistics. We're laser-focused on those areas, and it's our core. For everything else, we partner with startups," Yeo says.

Expanding Boundaries

Grab Ventures already has a strong foothold in Singapore, Indonesia, and other Southeast Asian markets, which it clearly has a preference for, because synergies are apparent and immediate, Yeo says.

 Europe, China, India are some of the other markets the company has investments in, although those are mostly for enabling technological innovations.

South Africa's startup CEOs and developers are Africa's best paid - Quartz Africa

Posted: 21 Oct 2019 10:32 AM PDT

It pays more to be a startup CEO in South Africa than anywhere else, according to a survey of startup compensation packages focused on nearly 50 startups in Kenya, South Africa, Nigeria and Ghana. The survey was carried out by Timon Capital, early-stage investor in sub-Saharan Africa and think tank Briter Bridges.

Nigeria, South Africa and Kenya are often regarded as Africa's most advanced markets for tech startups and ecosystems. It's a view that's validated annually with startups in the three countries typically receiving largest amounts of funding from tech investors. But while these countries jointly receive hundreds of millions of dollars annually, there are some significant disparities in compensation packages.

On average, startup employees across all levels earn far more in South Africa than anywhere else. For instance, chief executives of startups in South Africa earn more than five times their counterparts in Ghana and Nigeria, and more than double those in Kenya.

Among software engineers, South Africa also ranks highest for pay packages. In contrast, despite being Africa's largest economy and being home to the continent's most valuable start-up ecosystem, Nigeria is the least lucrative for software engineers among countries surveyed.

One often cited argument among industry insiders is that Kenya and South Africa, while being home to smaller economies and populations, have larger actual markets in terms of potential customers with disposable income compared to Nigeria where nearly half of the country lives in extreme poverty. On paper, Nigeria's vast population makes for an interesting funding pitch deck but, in reality, the addressable market is much smaller as e-commerce pioneers have increasingly realized.

The smaller pay packages on offer for Nigerian software engineers has also fueled a growing brain drain over the past year: with local startups unable to match higher salary packages elsewhere, local engineers have increasingly resorted to moving abroad given better career prospects.

Being highly paid is not the only advantage South African startup executives enjoy though. With the country home to a more mature financial market and overall investment culture, South Africa-based startups are likely also closer to capital than their counterparts elsewhere. In one significant example, Africa's most valuable company, the Cape Town-based Naspers has committed to investing over $300 million in South African tech businesses over the next three years.

Sign up to the Quartz Africa Weekly Brief here for news and analysis on African business, tech and innovation in your inbox

6 tips founders need to know about securing their startup - TechCrunch

Posted: 21 Oct 2019 01:00 PM PDT

If you've read anything of mine in the past year, you know just how complicated security can be.

Every day it seems there's a new security lapse, a breach, a hack, or an inadvertent exposure, such as leaving a cloud storage server unprotected without a password. These things happen, but they don't have to; aecurity isn't as difficult as it sounds, but there's no one-size-fits-all solution.

We sat down with three experts on the Extra Crunch stage at TechCrunch's Disrupt SF earlier this month to help startups and founders understand what they need to do, when, and why.

We asked Google's Heather Adkins, Duo's Dug Song, and IOActive's Jennifer Sunshine Steffens for their best advice. Here's what they had to say.

Quotes have been edited and condensed for clarity.

1. Don't put off the security conversation

The one resounding message from the panel: don't put security off.

"There are basically three areas that folks should start considering how to bucket those risks," said Duo's Song. "The first is corporate risk in defending your users and applications they access. The second is application security and product risk. A third area is is around production, security and making sure that the operation of your security program is something that keeps up with that risk. And then a fourth — a new and emerging space — is trust, and not just privacy, but also safety."

It's better to be proactive about security than to be reactive to a data breach; not only will it help your company bolster its security posture, but it also serves as an important factor in future fundraising negotiations.

Song said founders have a "very direct obligation" to think about security as soon as they take someone else's money, but especially when a company starts gathering user or customer data. "You have to put yourself in the shoes of those folks whose data you have to protect," he said. "It's not just your existential threats to your business, but you do have a responsibility, right to figure out how to do this well."

IOActive's Steffens said startups are already a target — simply because it's assumed many won't have thought much about security.

"A lot of attackers will go after startups who have high value data, because they know security is not a priority and it's going to be a lot easier to get ahold of," she said. "Data these days is extraordinarily valuable."

2. Start with the security basics

Google's Adkins, who runs the search giant's internal information security team, joined the company almost two decades ago when it was just the size of a large startup. Her job is to keep the company's network, assets, and employees safe.

"When I got there, they were so fanatical about security already, that half of the job was already done," she said. "From the moment [Google] took its first search query, it was thinking about where those logs are stored, who has access to them, and what is its responsibility to its users," she said.

"Startups who are successful with security are those where the chief executive and the founders are fanatical from day one and understand what threats exist to the business and what they need to do to protect it," she said.

Song said many popular products and technologies these days come with strong security by default, such as iPhones, Chromebooks, security keys and Windows 10.

"You're better off than the 90% of large companies out there," he said. "That's one of those few strategic advantages you have as a smaller, nimbler organization that doesn't have a lot of legacy," he added. "You can do things better from the start."

"A lot of the basics are still key," said Steffens. "Even as we come out with the new shiny technology, having things like firewalls and antivirus, and multi-factor authentication."

"Security doesn't always have to be a money thing," she said. "There's a lot of open source technology that's really great."

3. Start looking at security as an investment

"The sooner you start thinking about security, the less expensive it is in the end," said Steffens.

That's because, the experts said, proactive security gives companies an edge over competitors who tack on security solutions after a breach. It's easier and more cost-effective to get it right the first time without having to fill in gaps years later.

It might be a hard sell to funnel money into something where you won't actively see financial returns, which is why founders should think of security as investments for the future. The idea is that if you spend a little money at the start, it can save you down the line from the inevitable — a security incident that will cost you in bad headlines, lost customer trust, and potentially fines or other sanctions.

MeitY launches startup hub; Story of one of India’s largest podcast platforms - YourStory

MeitY launches startup hub; Story of one of India’s largest podcast platforms  YourStory

Top tech startup news for today, Monday, October 21, 2019 - TechStartups.com

Top tech startup news for today, Monday, October 21, 2019  TechStartups.com

Luge Capital raises $85M to invest in Canadian fintech startups - TechCrunch

Luge Capital raises $85M to invest in Canadian fintech startups  TechCrunch

Business competition brings in innovative ideas | News - Washburn Review

Business competition brings in innovative ideas | News - Washburn Review


Business competition brings in innovative ideas | News - Washburn Review

Posted: 18 Oct 2019 11:37 AM PDT

The five finalists of the Washburn School of Business Pitch Competition presented their ideas with the hopes of taking home the big prize, Thursday, Oct. 17.

Abigail McCrory, sophomore business major, took first place in the competition with her idea of a mobile coffee shop that would take her family's coffee shop to the next level.

"I am very blessed to have been given this opportunity. It's awesome to have won and have all my family and mentors here to celebrate with me," said McCrory.

McCrory's coffee truck idea is one that she has been wanting to do for a long time, way before this competition.

"This is an idea that's always been in the works. Grounded is a family business, and part of me always knew that I wanted to take it further." said McCrory.

In second place was Taylor Jacobsen with an idea of a Zamboni type device to clean grain bins. He came up with idea when he was working on a farm.

In third place was Chase Brill and Elias Overby with a scavenger hunt app that combines entertainment, activity, and discounts. In fourth place was Jesus Gallegos with an autopilot drone that could be used for home or property surveillance. In fifth place was Yuto Hirayama with a online matching service for people wanting to improve their English.

Additionally, Benjamin Price won the top freshman entry with a fitness training suit and Harold Slack won top Washburn Tech entry with an idea to convert gas cars into electric cars.

Each of these winners received a financial award courtesy of Go Topeka. The School of Business plans to hold its seventh annual pitch competition next fall.

"It's awesome to be a part of such a great school that provides students the opportunities to excel," said McCrory.

Edited by Adam White, Jada Johnson, Jessica Galvin

Opinion: Entrepreneurs and Their Startup Businesses Need San Diego’s Support - Times of San Diego

Posted: 21 Oct 2019 10:00 AM PDT

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Startup businesses
Startup teams at an EvoNesus incubator in downtown San Diego. Photo by Chris Jennewein

By Duane Cameron

Everyone in business and economic development agree that startups are great for cities—but how can communities and leaders do more than just tout the benefits of startups, and actually help pave the way for entrepreneurs to bring their business ideas to life?

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One way of getting behind San Diego startups is through celebrating the innovation and creativity being brought to our region. This month Cox Business, Tech Coast Angels and the San Diego Venture Group are doing exactly that by sponsoring and organizing the John G. Watson Quick Pitch Competition.

The Quick Pitch Competition on Oct. 29 gives 10 local startups the opportunity to compete for grants of up to $50,000 to further develop their idea. It's one of several others like it throughout the year here in our region.

Opinion logoHowever, we can always do more to support our startup ecosystem—especially if we want to hang on to our distinction as one of the best cities in America to launch a business. Moreover, San Diego in particular has a number of very good reasons to do so:

• Small businesses, including startups, are the backbone of our regional economy. Small businesses, defined as those with 100 employees or fewer, employ 697,000 people, or 59 percent of San Diego's workforce. If we were to attract fewer talented entrepreneurs, opportunities for both our long-time residents and recent transplants would dry up, and our economy would suffer.

• They've given us our reputation as a life sciences and biotechnology innovation hub. Aside from the San Francisco Bay Area and the Boston-Cambridge region, we're one of the top cities for manufacturing, testing and research in the fields of biotechnology, pharmaceuticals and medical devices. Several of the top employers in this area are, of course, large companies like Illumina, but a vast majority of the more than 1,100 life and sciences biotech businesses in San Diego began life as small startups with an idea.

• They encourage competition. Competition is a good thing and spurs innovation, and a competitive business ecosystem makes our city stand out as a dynamic source of tech solutions. As Ben Yoskowitz, an angel investor and founding partner at Year One Labs puts it, "Any reasonably good idea has 10,000 people working on it right now."

• A few local startups have made it big already. Thanks to our large pool of talent both local and transplanted (the perks of being a major center for universities) as well as a good network of accelerators that coach startups on how to prepare for a successful launch, many of our startups have emerged as major players on the national scene. Think GoFundMe, Classy, Brain Corp, and Human Longevity. Imagine how many more ideas like these are currently incubating among San Diego's startup founders.

• They employ talent from other tech hubs, especially recent graduates. The job market may have improved greatly since the 2008-2009 recession, and unemployment may be low, but it's still challenging to get your foot in the door as a recent college graduate. In cities like San Diego, though, where there's a strong pool of startups, these young professionals can easily find employment that develops them professionally into the future talent that our city will need to continue to grow.

San Diego has steadily climbed higher on lists of top U.S. cities for startups over the past few years, but that didn't happen in a vacuum. Every big company started small, and it's important that larger companies encourage startups, and help provide funding through programs such as the Quick Pitch Competition—especially if they're in your field. It's good for business and for everyone who lives and works in America's finest region.

Duane Cameron has more than 30 years of experience in the telecommunications industry. He is vice president for Cox Business, helping to bring innovative products and services to Southern California businesses.

Opinion: Entrepreneurs and Their Startup Businesses Need San Diego's Support was last modified: October 17th, 2019 by Editor
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6 Key Steps Required to Get You From a Good Idea to a Sustainable Business - Inc.com

Posted: 21 Oct 2019 10:09 AM PDT

As a new business advisor and occasional investor, I get approached regularly by people who have a dream or a new business idea, and are looking for support and money to make it a reality.

They are usually short on specifics required for execution, so I have to tell them that the idea is the easy part - and the real challenge is execution, even if someone gives you the money.

Based on my experience and data from the field, over seventy-five percent of new startups fail, even with venture backing. The number is much higher for those who choose to go it alone, without help.

I say this not to discourage you from acting on your idea, but to encourage you to anticipate the work required to get you from inspiration to a sustainable and satisfying business.

Thus, I'm more impressed with entrepreneurs who ask me to review their implementation plan, rather than listen again to their idea.  There are lots of resources available for the challenge of that activity, including the Internet and mentors like me.

In my experience, the key steps I look for always include the following:

1. Testing the idea against customers who have money to spend.

Just because you think it's a great idea doesn't mean there is a business opportunity. I suggest you use social media, blogging, crowdfunding, or documented research to quantify a real demand from people who can afford it, and don't have a better alternative already out there.

I love good causes and social entrepreneurs, but a recent pitch to me about eliminating world hunger with a new product (harvesting algae at low cost) seemed to forget that really hungry people don't have any money. Even a non-profit needs income to operate.

2. Build a credible business implementation plan to quantify costs.

Some dreams sound great, but may not yet be viable or proven with today's technology.

Others may be so exciting that you will find multiple competitors fighting for the same space. Writing down key parameters will force you solidify the specifics, and mentally commit to them.

I recommend a ten-slide pitch to start, reviewed by friends and advisors, to be expanded to a ten-to-twenty-page business plan with opportunity sizing, cost and price details, competitors, marketing and sales strategy, financial projections, and resources required.

3. Make sure your solution is defensible and unique.

Unfortunately, I see good startups fail simply because they don't have the resources or intellectual property to stay ahead of copycats or big players who see the potential as soon as you step into the marketplace.

Any startup with no patents, trade secrets, or other secret sauce is very high risk today.

Even a provisional patent will hold your position for a year, can be done by your team at low cost, and will at least incent big competitors to buy your idea rather than just steal it. Most investors will not even look at you until you have a defensible solution to offer.

4. Prepare your marketing story for customers and investors.

I haven't seen a new idea yet that was so intuitively obvious that it would sell itself. Start by developing an "elevator pitch," that you can deliver in thirty seconds to hook a potential customer or investor. Present at trade shows and network with your ten-slide pitch to build your following.

For inspiration, I recommend you watch a few episodes of the Shark Tank TV series, where entrepreneurs pitch their wares, looking for an investment and national visibility for their product or service. Reach out with creative videos to influencers in your domain.

5. Make the product or service come alive.

Well before launch, as well as after, all the preparations have to be in place to deliver and support your solution. This means staffing and delivering the business legally as an LLC or corporation, completing a website and business licensing, and arranging for manufacturing, distribution, and support. 

6. Implement a strategy for growth and improvement.

For a business to be sustainable in this era of rapid change, you need a strategy and plan for continuous innovation, new products, and expanding your customer base.

This is the point where you must manage to metrics, work on the culture of the organization, and look for partner-based growth. 

Now you can see why you, as well as advisors and investors, should never judge business potential by the idea alone. In fact, the common element in all these steps is "you." As a result, smart investors will tell you they invest in the jockey, not the horse (people, not ideas).

A great vision and dreaming about a great idea, without implementation, won't make a business.

I believe totally in the old adage that a successful business is really one percent inspiration, followed by ninety-nine percent perspiration. How much execution perspiration are you prepared to expend along the steps outlined above to make your dream come true?

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

Minister: Over 2,000 startups joined the I2B - From Idea to Business project [PHOTO] - AzerNews

Posted: 21 Oct 2019 03:45 AM PDT

By Leman Mammadova

More than 2,000 startups have joined the I2B - From Idea to Business project, which shows the project's success and its popularity among young people, Minister of Transport, Communications and High Technologies Ramin Guluzade has said.

Guluzade made the remarks during the final ceremony of the "I2B - From Idea to Business" project held on October 18 as part of the Innovation Week, where the winners of 2019 were determined.

Guluzade noted that one of the tasks of the Ministry is to support innovative development. In his words, the Innovation Agency under the Ministry supports start-ups in the implementation of business ideas.

"Various projects, trainings, competitions are held to expand the startup movement, the development of innovative thinking among young people, their active involvement in this process. The startup tours 'I2B - From Idea to Business' held in Baku and the regions serve precisely this purpose," he stressed.

Pointing to the opportunities created for startups at the InnoCamp innovation camp in Shamakhi, Guluzade noted the importance of such events in the formation and development of an innovative ecosystem in the country.

"Currently, the process of formation of the innovation ecosystem in Azerbaijan is rapidly developing," Alessandro Fracassetti, UNDP Resident Representative for Azerbaijan said. Fracassetti emphasized that the UNDP supports the start-up movement in Azerbaijan, the implementation of innovations in education, agriculture and the environment.

During the final ceremony, held at the Heydar Aliyev Center as part of InnoWeek - Innovation Week, the best winners of startup tours held in Baku and the regions in 2019 were determined.

As many as 153 teams took part in startup tours conducted in 12 regions of the country. During startup tours, representatives of government agencies, various incubation centers, technology parks, as well as well-known ICT companies organized trainings and seminars for participants on the ecosystem of startups, ways to turn their ideas into business.

In the startup tours organized in Baku, Sumgait, Shamakhi, Sheki, Zagatala, Tovuz, Goychay, Ganja, Lankaran, Mingachevir, Sabirabad and Nakhchivan, 17 teams reached the semifinals. And the 10 teams that passed the final selection stage got the right to compete in the final of the project "I2B - From Idea to Business".

At  the last stage, the finalists, including Heal With (Baku), Health Bag (Goychay), PayPort (Nakhchivan), Palliativ Plus (Baku), Chameleon (Baku), OSHE-01 (Shirvan), Professional (Nakhchivan), Nano Desal (Baku), Biobone (Ganja), Agroshare (Baku), presented their projects to a jury, and answered questions related to projects during the allotted time.

The projects have been evaluated according to criteria such as the uniqueness of the idea, market potential, the period of return on investment, the time required to develop a preliminary service/prototype, the team's ability to realize the idea.

Thus, "Heal With" team was announced the winner of the "I2B - From Idea to Business" project. In addition, "Buqelemun" team was ranked in the second place, while "Palliativ Plus" team in the third.

The organizers and partners will provide financial support to the first three winners to turn their ideas into business.

The winners will be able to present their projects at the 25th international exhibition and conference "Telecommunications, Innovations and High Technologies" Bakutel, which will be held on December 3-6.

The project "I2B - From Idea to Business" was implemented jointly by the Ministry of Transport, Communications and High Technologies, the Regional Development Public Union of Heydar Aliyev Foundation, Azerbaijan Youth Foundation, the UNDP, Microsoft and Azercell.

Startup tours under the project "I2B - From Idea to Business" are envisaged to continue in the next years.

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Leman Mammadova is AzerNews' staff journalist, follow her on Twitter: @leman_888

Follow us on Twitter @AzerNewsAz  

Event serves as great incubator for innovative ideas - Citrus County Chronicle

Posted: 21 Oct 2019 12:22 PM PDT

THE ISSUE: Fire Up Citrus! 2019.

OUR OPINION: The forum is necessary to showcase innovation.

Since 2013, the Citrus County Chamber of Commerce's initiative Fire Up Citrus! has served as a platform for every day citizens to share their dreams for Citrus County.

At Fire Up Citrus! 2019, presenters had just five minutes to pitch innovative concepts to spur economic development and improve quality of life in Citrus — and some of the ideas brought forward this year have definite potential.

From a cat café to an economic development "sweet spot" cleverly planned near the Suncoast Parkway's State Road 44 interchange, the 12 unique ideas introduced at the event could mean big enhancements for Citrus County.

Over the years, the Fire Up Citrus! has generated new pathways to inspire positive change in Citrus, and it has been extremely successful.

Some past conceptualizations brought to life from Fire Up include the Citrus County Construction Academy (up and running at Withlacoochee Technical college), Treetop Adventure & Zip Line (built and operating), The Path Grove (operating), the Crystal River trolley service for tourists (operating), Veterans Village (county has dedicated land for anticipated future construction), and Pedal-Powered Works of Art (underway). These informative, animated and often whimsical sessions bring together community, government and business leaders to hear the spirited ideas of citizens and help move the county forward in a positive manner.

The Chamber does an excellent job in leading this endeavor and in involving the public to participate in the process.

After hearing each presenter, Fire Up attendees are given a survey to vote on which projects they like the best. The Chamber tallies up the surveys to determine what projects are deemed worth moving forward. This year's crowd at the Valerie Theatre had 150 citizens lending their opinions to better our county — that's impressive.

This session had some solid ideas, the outcome of which will include further stimulated discussion and smart planning of growth in Citrus. Ideas, without a doubt, flow in creative spaces.

To further enhance the presentations of Fire Up Citrus!, perhaps the Chamber can recruit additional partners to be involved, like SCORE, as well as assisting presenters in attaining seed money for the best ideas.

It's great to see the Citrus community looking forward. Fire Up Citrus! proves year after year to be an effective incubator for economic development.

Estonian startup Gelatex wins Green Alley Award 2019 - Baltic Times

Posted: 21 Oct 2019 04:38 AM PDT

This year's Green Alley Award goes to Estonia: Estonian startup Gelatex Technologies impressed the expert jury during a live pitch evening on 17 October in Berlin, Germany. Its gelatine-based alternative to leather beat off competition from five other startups in the circular economy.

Gelatex Technologies from Estonia has won the Green Alley Award 2019. The winning idea is a gelatine-based eco-friendly textile. The innovative textile is compared to other materials the closest to leather or suede. The jury was particularly impressed with the high level of innovation of the Gelatex Technologies product. The environmentally friendly material is made from gelatine derived from low-value waste from the meat and leather industries. The textile is produced without the use of toxins and the production is easily scalable. The ability to customise the thickness and texture makes Gelatex attractive for both the fashion and automotive industry.

Jan Patrick Schulz, CEO of Landbell Group, is very happy with this year's winner: 'We have been organising the Green Alley Award since 2014 and every year we discover unusual circular economy ideas from the startup sector,' he says. 'Once again this year, we have seen good concepts and taken away important inspiration. We presented the Green Alley Award to Gelatex Technologies because they have developed an environmentally friendly alternative to leather – a material widely used in the textile and automotive industries. Making a new product from a waste product is fully in line with the circular economy and therefore worthy of the award.'

Märt-Erik Martens, co-founder and CTO of Gelatex Technologies, explains the added value offered by the circular economy idea: 'With Gelatex we want to offer an alternative to leather that is both more environmentally friendly and more affordable,' he says. 'The Green Alley Award endorses our green approach: sustainability plays a key role in the circular economy and we are delighted that we were able to convince the jury with our idea.'

The Green Alley Award is the first European startup prize for the circular economy. Landbell Group has been rewarding startups whose ideas help make the sector more sustainable since 2014. In 2019 it received entries from 274 startups in over 30 countries, with business models in the areas of digital circular economy, recycling and waste prevention. In September this year, Landbell Group nominated six finalists proposing green alternatives to conventional materials, or biodegradable packaging. 'Startups are important actors in a sector that is increasingly striving for innovation,' says Schulz. 'Gelatex Technologies has not only developed an idea, but something with great market potential.'

The Green Alley Award comes with prize money of €25,000 and the option of a crowdfunding campaign with Landbell Group's partner, Seedmatch.

About the Green Alley Award

The Green Alley Award is Europe's only prize awarded specifically to startups in the circular economy. Since 2014, prizes have been awarded each year to European startups that use innovative business ideas to drive the waste and recycling industry forward and turn the linear economy into a circular economy. The award is organised by Landbell Group with support from a network of circular economy and European startup experts, including Seedmatch, Germany's crowdfunding pioneer, Bethnal Green Ventures, a British accelerator programme for startups that use technology to tackle environmental and social problems, and R2Pi, an EU-funded Horizon 2020 project.

More information is available at www.green-alley-award.com

About Landbell Group

Landbell Group is a leading provider of services and consulting for global environmental and chemical compliance. Since 1995, the company has helped 27,000 customers in more than 50 countries implement their extended producer responsibility (EPR) and other product and packaging requirements. In addition, Landbell is a competent partner providing support for manufacturers and retailers on their journey towards a circular economy. Its portfolio covers 35 take-back schemes for various waste streams across Europe, as well as consulting and software solutions. In 2018, Landbell Group generated a turnover of more than €170 million.

More information is available at www.landbell-group.com

About Gelatex

Gelatex Technologies is a material technology startup founded in 2016 in Tallinn, Estonia by two co-founders - Märt-Erik Martens and Mari-Ann Meigo Fonseca - with the mission to make eco-friendly materials accessible to everyone. Namely, they aim to manufacture textiles that are affordable, scalable, and non-toxic. Gelatex has developed a technology to make nanofibrous material from gelatine - a substance derived from the low value livestock industry waste. The technology is energy efficient, eco-friendly, easily scalable and cheaper than alternative technologies. The material can be used in various applications in medicine, filtration and textile industry, whereas the main focus of the company is now to develop an eco- friendly leather-like textile for fashion and interior. Gelatex has been supported by Techstars, Estonian Ministry of Environment, Climate-KIC, Prototron, Horizon2020 SME Instrument and others.

UEFA's business incubator signs three start-ups - Inside World Football

Posted: 21 Oct 2019 10:02 PM PDT

October 22 – UEFA has signed three start-up businesses as part of its business innovation drive to develop new technologies and products that will significantly impact the commercial management and promotion of football and its assets.

UEFA's Start-Up Challenge was launched in January 2019 by the governing body's Innovation Hub – essentially an incubator for the development of the business ideas.

WSC Sports, which creates and distributes automated highlights packages for any digital platform; Formalytics, which has produced an app which allows players of all abilities and ages to monitor and improve their footballing skills; and LiveLike, which offers fans a platform to increase engagement around football matches – are the first to companies to get the opportunity to develop under UEFA's innovation wing.

UEFA emphasises that innovation is "not just about the latest technology and the digital world" but  "a cultural shift to enhance and shape the sport of the future alongside our partners, leveraging our ecosystem both in and outside the industry."

"This is the first time that we have given start-ups the chance to become integrated into UEFA and help our organisation explore exciting new pathways," said UEFA's director of financial sustainability and research Andrea Traverso.

"At UEFA, we need to create platforms for innovation, research and development as well as supporting the use of modern technologies and use of data in order to improve our business working model and create better engagement with our fans."

"Being a part of the UEFA innovation journey gave LiveLike an inside look at the challenges and future ambitions of a global organisation such as UEFA," said Miheer Walavalkar, the CEO of LiveLike.

"Through collaborations between international associations like UEFA and companies like LiveLike, we can work towards the best possible future for fans and the sporting industry as a whole."

UEFA says its Innovation Hub is constantly on the lookout for new partners to help it stay one step ahead of the latest footballing trends and is always open to approaches through its Open Innovation Portal.

Contact the writer of this story at moc.l1571721218labto1571721218ofdlr1571721218owedi1571721218sni@n1571721218osloh1571721218cin.l1571721218uap1571721218

6 tips founders need to know about securing their startup - TechCrunch

6 tips founders need to know about securing their startup - TechCrunch


6 tips founders need to know about securing their startup - TechCrunch

Posted: 21 Oct 2019 01:00 PM PDT

If you've read anything of mine in the past year, you know just how complicated security can be.

Every day it seems there's a new security lapse, a breach, a hack, or an inadvertent exposure, such as leaving a cloud storage server unprotected without a password. These things happen, but they don't have to; aecurity isn't as difficult as it sounds, but there's no one-size-fits-all solution.

We sat down with three experts on the Extra Crunch stage at TechCrunch's Disrupt SF earlier this month to help startups and founders understand what they need to do, when, and why.

We asked Google's Heather Adkins, Duo's Dug Song, and IOActive's Jennifer Sunshine Steffens for their best advice. Here's what they had to say.

Quotes have been edited and condensed for clarity.

1. Don't put off the security conversation

The one resounding message from the panel: don't put security off.

"There are basically three areas that folks should start considering how to bucket those risks," said Duo's Song. "The first is corporate risk in defending your users and applications they access. The second is application security and product risk. A third area is is around production, security and making sure that the operation of your security program is something that keeps up with that risk. And then a fourth — a new and emerging space — is trust, and not just privacy, but also safety."

It's better to be proactive about security than to be reactive to a data breach; not only will it help your company bolster its security posture, but it also serves as an important factor in future fundraising negotiations.

Song said founders have a "very direct obligation" to think about security as soon as they take someone else's money, but especially when a company starts gathering user or customer data. "You have to put yourself in the shoes of those folks whose data you have to protect," he said. "It's not just your existential threats to your business, but you do have a responsibility, right to figure out how to do this well."

IOActive's Steffens said startups are already a target — simply because it's assumed many won't have thought much about security.

"A lot of attackers will go after startups who have high value data, because they know security is not a priority and it's going to be a lot easier to get ahold of," she said. "Data these days is extraordinarily valuable."

2. Start with the security basics

Google's Adkins, who runs the search giant's internal information security team, joined the company almost two decades ago when it was just the size of a large startup. Her job is to keep the company's network, assets, and employees safe.

"When I got there, they were so fanatical about security already, that half of the job was already done," she said. "From the moment [Google] took its first search query, it was thinking about where those logs are stored, who has access to them, and what is its responsibility to its users," she said.

"Startups who are successful with security are those where the chief executive and the founders are fanatical from day one and understand what threats exist to the business and what they need to do to protect it," she said.

Song said many popular products and technologies these days come with strong security by default, such as iPhones, Chromebooks, security keys and Windows 10.

"You're better off than the 90% of large companies out there," he said. "That's one of those few strategic advantages you have as a smaller, nimbler organization that doesn't have a lot of legacy," he added. "You can do things better from the start."

"A lot of the basics are still key," said Steffens. "Even as we come out with the new shiny technology, having things like firewalls and antivirus, and multi-factor authentication."

"Security doesn't always have to be a money thing," she said. "There's a lot of open source technology that's really great."

3. Start looking at security as an investment

"The sooner you start thinking about security, the less expensive it is in the end," said Steffens.

That's because, the experts said, proactive security gives companies an edge over competitors who tack on security solutions after a breach. It's easier and more cost-effective to get it right the first time without having to fill in gaps years later.

It might be a hard sell to funnel money into something where you won't actively see financial returns, which is why founders should think of security as investments for the future. The idea is that if you spend a little money at the start, it can save you down the line from the inevitable — a security incident that will cost you in bad headlines, lost customer trust, and potentially fines or other sanctions.

What the Lean Startup Method Gets Right and Wrong - Harvard Business Review

Posted: 21 Oct 2019 06:04 AM PDT

Executive Summary

The Lean Startup approach was an instant hit in Silicon Valley, as startups embraced this new experimental ethos. Indeed, the evidence strongly suggest that startups should engage in experimentation along the lines pioneered by the Lean Startup Method. But there are two problems with the Lean Startup approach: First, it pushes founders to "get out of the office" and talk to customers as quickly as possible. But the focus on getting fast feedback from customers to Minimal Viable Products makes startups prone to aim for incremental improvements, focusing on what customers want today, rather than trying to see ahead into the future. Second, while the questions Lean asks are useful — you should know who your customers are! — it doesn't ask the most important one: what is your theory about why your company is going to win?

JW LTD/Getty Images

When someone finds out that I am an entrepreneurship professor, they tend to either ask me to listen to their startup pitch, or else they look at me quizzically and say: "But I thought entrepreneurship was all about improvisation. How can you teach entrepreneurship?" As a result, I have heard a lot of startup pitches (last year was blockchain; this year was CBD) but I also have thought about how to answer the bigger question: what can we teach founders to make their startups more successful? Fortunately, the last decade has given me a lot of valuable lessons I can share, and these lessons come from two different sources.

The first was the rise of the Lean Startup Method, pioneered by Steve Blank and Eric Ries, and covered very ably by Blank in HBR six years ago. In short, the Lean Startup Method proposed that the key to a successful startup was to be biased towards action. Founders should start by understanding the assumptions behind their business using a Business Model Canvas, which requires founders to fill in nine boxes covering topics like "Value Propositions" and "Customer Segments." Founders turn the key questions they have about their business into testable hypotheses and then build fast and cheap Minimal Viable Products to test these hypotheses. If the tests show they are correct, great! But if not, they should pivot and change direction, modifying the product they are selling, or the market they are approaching, based on the feedback from their MVPs. They continue to explore combinations of product and market until they achieve product-market fit with a demonstrated demand for their product.

The Lean Startup approach was an instant hit in Silicon Valley, as startups embraced this new experimental ethos. The method also proved to be relatively easy to teach, so it became a mainstay of startup accelerators and entrepreneurship classes everywhere. But Lean Startups were not the only big change in startup strategy of the last ten years, as another, quieter revolution was taking place. Academics, with access to better data, more sophisticated analysis techniques, and new approaches, have begun to crack the code of startup success. What was once conventional wisdom is now being tested. (Should startups always have cofounders? Are young people better founders?) And we have begun to learn some valuable things about the Lean Startup Method.

First, the good news! The evidence strongly suggests that startups should engage in experimentation along the lines pioneered by the Lean Startup Method. A group of Italian academics conducted a gold-standard randomized controlled experiment on 116 startups. Half of them were taught how to do rigorous experiments on their startup ideas, generating hypotheses and testing them systematically. The others were taught to do experiments but were not shown how to use the scientific method of hypothesis generation. The groups that acted like scientists did much better — pivoting more, avoiding problems, and ultimately generating higher revenues than the control group. Rigorous experimentation is clearly important to startup success.

However, other work has shown that there are aspects of the Lean Startup Method that may actually be harmful. In a new paper, a group of prominent entrepreneurship scholars identified two major issues with the approach:

  1. Lean Startups push you to "get out of the office" and talk to customers as quickly as possible. But, in the words of Steve Jobs: "It isn't the customer's job to know what they want." The focus on getting fast feedback from customers to Minimal Viable Products makes startups prone to aim for incremental improvements, focusing on what customers want today, rather than trying to see ahead into the future. Additionally, a lot of research, such as that done by Clay Christensen on disruptive innovation, shows that novelty is often initially disliked by customers. Seeking external validation from early customers can thus be even harder if you have a breakthrough idea than if you have an incremental, but easily explained, product.
  2. This problem is compounded by the Business Model Canvas. While the questions the Canvas asks are useful — you should know who your customers are! — it doesn't ask the most important one: what is your hypothesis about the world based on your unique knowledge and beliefs? Filling out the nine boxes of the Canvas instead focuses you on what your startup looks like at the end of the process — when you have elaborate channel and supplier relationships, and so forth — but there is no roadmap to get to that end-state in the Lean Startup Method. Further, the detailed business elements of the Canvas obscure the actual insights that make your idea special. Take a look, for example, at the many examples of completed Canvases for LinkedIn, and you can see how none of them show the special insights into networking and resumes that made the company a hit. To generate your theory about why your startup is special, you should return to the scientific method. Begin by observing the world, and use your observations to generate the theory about how you can change the world with your startup idea.

So, how do we keep the good aspects of Lean Startups without holding onto the bad? Another HBR article, from last year, offers one path. Joshua Gans, Erin L. Scott, and Scott Stern draw from the research on corporate strategy, and suggest a new, more effective approach to startup experimentation. They offer an approach that starts with a strategy — a theory about why your company is going to win — and, based on the choices founders make, suggests the right experiments to conduct. By returning power to the founders, rather than the customers, to develop key breakthrough insights, this approach has the potential to be the next step in the evolution of Lean.

With these new tools and evidence in hand, we really can teach people to launch more successful evidence-based startups. Startups that are not just based on gathering evidence, as in the Lean Startup Method, but also on the latest academic evidence on how to make entrepreneurs more successful.

These Startups Are Building Tools to Keep an Eye on AI - WIRED

Posted: 21 Oct 2019 03:00 AM PDT

In January, Liz O'Sullivan wrote a letter to her boss at artificial intelligence startup Clarifai, asking him to set ethical limits on its Pentagon contracts. WIRED had previously revealed that the company worked on a controversial project processing drone imagery.

O'Sullivan urged CEO Matthew Zeiler to pledge the company would not contribute to the development of weapons that decide for themselves whom to harm or kill. At a company meeting a few days later, O'Sullivan says, Zeiler rebuffed the plea, telling staff he saw no problems with contributing to autonomous weapons. Clarifai did not respond to a request for comment.

O'Sullivan decided to take a stand. "I quit," she says. "And cried through the weekend." Come Monday, though, she took a previously planned trip to an academic conference on fairness and transparency in technology. There she met Adam Wenchel, who previously led Capital One's AI work, and the pair got to talking about the commercial opportunity of helping companies keep their AI deployments in check.

O'Sullivan and Wenchel are now among the cofounders of startup Arthur, which provides tools to help engineers monitor the performance of their machine learning systems. They're supposed to make it easier to spot problems such as a financial system making biased lending or investment decisions. It is one of several companies, large and small, trying to profit from building digital safety equipment for the AI era.

Researchers and tech companies are raising alarms about AI going awry, such as facial recognition algorithms that are less accurate on black faces. Microsoft and Google now caution investors that their AI systems may cause ethical or legal problems. As the technology spreads into other industries such as finance, health care, and government, so must new safeguards, says O'Sullivan, who is Arthur's VP of commercial operations. "People are starting to realize how powerful these systems can be, and that they need to take advantage of the benefits in a way that is responsible," she says.

Keep Reading

The latest on artificial intelligence, from machine learning to computer vision and more

Arthur and similar startups are tackling a drawback of machine learning, the engine of the recent AI boom. Unlike ordinary code written by humans, machine learning models adapt themselves to a particular problem, such as deciding who should get a loan, by extracting patterns from past data. Often, the many changes made during that adaptation, or learning, process aren't easily understood. "You're kind of having the machine write its own code, and it's not designed for humans to reason through," says Lukas Biewald, CEO and founder of startup Weights & Biases, which offers its own tools to help engineers debug machine learning software.

Researchers describe some machine learning systems as "black boxes," because even their creators can't always describe exactly how they work, or why they made a particular decision. Arthur and others don't claim to have fully solved that problem, but offer tools that make it easier to observe, visualize, and audit machine learning software's behavior.

The large tech companies most heavily invested in machine have built similar tools for their own use. Facebook engineers used one called Fairness Flow to make sure its job ad recommendation algorithms work for people of different backgrounds. Biewald says that many companies without large AI teams don't want to build such tools for themselves, and will turn to companies like his own instead.

Weights & Biases customers include Toyota's autonomous driving lab, which uses its software to monitor and record machine learning systems as they train on new data. That makes it easier for engineers to tune the system to be more reliable, and speeds investigation of any glitches encountered later, Biewald says. His startup has raised $20 million in funding. The company's other customers include independent AI research lab OpenAI. It uses the startup's tools in its robotics program, which this week demonstrated a robotic hand that can (sometimes) solve a modified Rubik's Cube.

“Investors are the biggest losers when women and minority entrepreneurs don’t get startup money - MarketWatch” plus 3 more

“Investors are the biggest losers when women and minority entrepreneurs don’t get startup money - MarketWatch” plus 3 more


Investors are the biggest losers when women and minority entrepreneurs don’t get startup money - MarketWatch

Posted: 07 Oct 2019 12:00 AM PDT

I saw myself as a technologist, like so many in Silicon Valley. I believed that with a good idea for a product and enough gumption, I could make anything happen for my business. I had earned a certain amount of micro-celebrity from my days at "Jack and Jill Politics" (a popular blog at the time) and from the company I co-founded, Fission Strategy, which was earning millions of dollars in revenue. 

So when my business partner, Roz Lemieux, and I sought funding to take our new product, Attentive.ly, from side hustle to main gig, I could never have foreseen the road blocks we'd run into as two female entrepreneurs.

The meetings with potential investors would typically go something like this: We'd sit down with an angel investor who would listen to our demo politely and at the end say something along the lines of, "I can definitely see where this product could make a difference, but I just don't know if you are the person who can actually take it to market."

I knew that I had as good of a track record as anybody walking into those meetings. We had a good product and paying customers. Yet here I was consistently being told it was a good idea but that there was a problem with me. The clear, explicit statement was that if someone else had brought it in, it would be worth it. Attentive.ly ultimately found seed-stage startup capital from two angel investors and secured future rounds of angel investment.

As a woman, I can attest to the fact that we experience different challenges in society than men, and one place it shows up is how we are perceived in business. Investors will make snap judgments — unconscious or not — about you while you're sitting in front of them. 

The fact that Bee Shapiro, founder of fragrance company Ellis Brooklyn, experienced difficulty seeking funding whenever she wore her wedding ring is a prime example of how these snap judgments disproportionately affect women. 

Shapiro was frequently asked, "How are you going to balance your personal and professional life?" One day, before going to an important investor meeting, she forgot to put on her wedding ring. That question never came up. So Shapiro stopped wearing it to take the question off the table, as it had become a clear distraction. I doubt male entrepreneurs often have their pitches questioned and derailed over a piece of jewelry they choose whether or not to wear.

Representation matters

Now you may be asking yourself, "Why in this day and age is it still so difficult to secure funding as a woman, and even harder to do as a woman of color?" The answer comes down to one word: representation. 

Without female and minority representation at the top to act as advocates, it's almost impossible for those seeking funding to get their foot in the door. 

In 2017, 98% of venture capitalist money went to men, the vast majority of whom were white. Considering that the National Venture Capital Association reports that 89% of partners at venture capital firms are men who are predominantly white, I can't say I'm surprised. People tend to stick with what they know. Without female and minority representation at the top to act as advocates, it's almost impossible for those seeking funding to get their foot in the door. 

Read: Women-owned businesses face a lack of funding — and here's how to change this

The fact of the matter is that less than 10% of venture-backed companies have a female leader. As one of those 10%, knowing how hard I fought tooth-and-nail to get here, I have one thing to say to VCs: The lack of women and minority representation affects you too

Here's why: Look at who ultimately loses when we don't invest in diversity. Gender-diverse companies are 21% more likely to outperform their peers; ethnically diverse companies outperform non-diverse groups by 35%, and inclusive companies are 1.7 times more likely to be innovation leaders in their market. Moreover, through personal experience, women and people of color naturally identify markets and profit streams that would otherwise be unseen and untapped. 

Read: How to create more female corporate leaders

More: The shocking profession with the biggest gender wage gap

We clearly still have a long way to go, but thankfully people are beginning to rise to the challenge by acting as resources and sounding boards for VCs who want to learn more about inclusivity and female and minority entrepreneurs seeking advice. 

Whenever I see companies that walk the walk when it comes to equal representation and diversity, I feel the need to spread the word. One such company is SOCAP (Social Capital Markets), which convenes an annual social impact conference for male an d female entrepreneurs and investors from all walks of life. What's particularly encouraging about the SOCAP conference and similar gatherings is that they give female social entrepreneurs, founders, investors, and business owners an opportunity to share wisdom, connect around best practices, and explore what happens when women take charge.

Cheryl Contee is CEO and co-founder of Do Big Things, a digital agency focused on causes and campaigns, and author of Mechanical Bull: How You Can Achieve Startup Success.. She was a co-founder of social marketing software Attentive.ly. Her prior company Fission Strategy helped write early source code for Crowdtangle. Contee is a co-founder of the tech inclusion initiative #YesWeCode.

On October 22 in San Francisco, Contee will be a panelist at When Women Lead: A World Changing Women Workshop.

Read: This is what it would take to close the gender pay gap

More:   Why are just 12% of inventors with a U.S. patent women?

Impact funds pour money into ed tech businesses - The Hechinger Report

Posted: 21 Oct 2019 03:03 AM PDT

The Hechinger Report is a national nonprofit newsroom that reports on one topic: education. Sign up for our weekly newsletters to get stories like this delivered directly to your inbox.

Ed tech companies are benefitting from the rise of impact funds.

In September 2019, a young Canadian ed tech company called Classcraft announced that it had raised $7.5 million from investors. One of the investors — the MaRS Catalyst Fund — was unusual. It's backed by the philanthropic foundation of Virgin Group founder Richard Branson and it aims to solve societal problems as it makes profits.

The Branson-backed "impact investor" is monitoring not only Classcraft's revenues but also squishier, less quantifiable performance indicators such as student engagement and school climate in the schools that have bought the product. (The Classcraft product is a piece of software that turns classroom behavior into a game. Teachers choose which behaviors they want to foster and students rack up points for actions like being kind or handing in their homework on time.)

Classcraft is an example of impact investing, investments that seek social or environmental benefits along with financial returns. Since the term was coined in 2007, the concept has quickly grown into an enormous $500 billion pot of money, according to one estimate by the Global Impact Investing Network. Education is attracting only a small slice of it (renewable energy and healthcare firms are getting the lion's share). But even a small slice of a half trillion dollars is a lot and it's starting to affect the field of education and what wares educators get pitched.  One of the main things Classcraft plans to do with its new money is build its sales force to sell its gamification software for social-emotional learning to schools.

The topic of impact investing dominated a September 2019 lunch panel at BMO's Annual Back to School Conference, which brings more than a thousand investors and education entrepreneurs together in a Manhattan hotel every year. Phil Alphonse, a senior partner at the Chicago-based private equity firm Vistria and a veteran education investor, noted that the competition from the new impact investors is forcing him and others to pay more to own a piece of a start-up.

"Valuations are going up," Alphonse said in a interview. "It's a good time to be an education entrepreneur."

Wealthy millennials are driving the impact investing. Three-quarters of millennial-run foundations, Alphonse said, have an interest in impact investing, compared with only a third of family foundations overall. Instead of just writing bigger checks for good causes, many younger heirs are attracted to the idea of investing in companies with a social mission.

What this means for education is that there are more dollars to fund education technology, such as computer-generated lessons tailored for each student, and online learning. "Impact investing could mean the more rapid adoption of those technologies," said Alphonse, whose firm recently created a new fund with an impact approach.

Related: Research shows lower test scores for fourth graders who use tablets in schools

For education companies, impact investing means reporting about different kinds of metrics. For example, online universities have traditionally been focused on building a marketing operation to recruit customers. Alphonse says that impact investors want to know about graduation rates, whether students are graduating on time and whether students are earning a credential that leads to a good job.

"Those other questions are questions that impact investors are raising and tracking," said Alphonse.

Non-financial metrics are still in their infancy. Often companies create their own and they're not audited by outsiders. For Classcraft, school climate is measured by how many points students rack up when playing their games. Student engagement is measured by how frequently students do the activities that the game encourages.

"I wouldn't ding a company for publishing its own data," said Vistria's Alphonse. "Over time, people will get smarter and figure out objective, audited data so that we can all be honest and make sure we're doing this the right way."

To be fair, Classcraft also shares student attendance, a more objective measure of student engagement, with its impact investor.

For entrepreneurs like Classcraft's Devin Young, impact investors are benevolent shareholders. "I was very enthusiastic to take on an impact investor," Young said.

He told me about a meeting with prospective investors who wanted to exploit his gamification tool and put it in Starbucks. "You're not the investor for us," he recalled. "This is about serving kids and impact investors have the same set of values and beliefs that we do."

So is it good for education to have more dollars financing ed tech innovations? One can engage in endless debates about which education tasks the private sector might be able to accomplish more effectively. But ultimately tax dollars are what are paying for these companies' products, either in the form of pubic school spending on supplies or in the form of federal student loans for college tuition. Every dollar spent on a piece of software is one dollar less for a good teacher's salary.

Related: 3 lessons from data on how students are actually using educational apps and software at school

Classcraft's Young makes a strong argument for the other side of this debate. "We're attacking really important systemic issues in education that I don't think the school system or the government can," said Young. "We have technical expertise. We bring a bunch of things to the table that other actors in the education landscape aren't tooled to do."

The problem is that there isn't strong research evidence for the effectiveness of a lot of ed tech. Sometimes it's harmful. I worry that impact funds will help well-intentioned companies build effective marketing teams to sell ineffective products to schools. Schools will buy them and students may not be the winners.

This story about impact investing in education was written by Jill Barshay and produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn't mean it's free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

Join us today.

How to Get the Most From Passive Real Estate Investing - Motley Fool

Posted: 21 Oct 2019 10:27 AM PDT

Real estate can be an excellent way to build wealth and generate income, but the reality is that being a landlord isn't a good fit for everyone. Even if you choose to hire a property manager to deal with the day-to-day operations of running your rental properties, there is still a substantial amount of time, risk, and capital involved with buying and holding individual rental properties.

Fortunately, there are several ways you could passively invest in real estate that can be rather lucrative ways to put your money to work. You can invest in real estate through the stock market thanks to real estate investment trusts (REITs) and other real estate companies. You can participate in a crowdfunded real estate investment and invest in a single-property opportunity that an experienced real estate developer has identified. Or you could choose to partner with an active real estate investor to buy investment properties and take a passive role in the business.

However, there are some important things to know before you get started, particularly how to avoid excessively risky passive real estate investments, how to spread your money out the right way, and how to monitor your investments over time.

With that in mind, here's what to consider when you are looking for and managing your passive real estate investments.

1. Avoid falling into traps

As the old saying goes, if something looks too good to be true, it probably is. However, you need to be able to spot what "too good to be true" looks like when it comes to passive real estate investments.

Let's start with real estate investment trusts. One of the first red flags you should look for is a dividend yield that's significantly higher than its peers. For example, if the average hotel REIT pays a 6% dividend yield and you find one that pays 10%, it could be a sign that something is wrong with the business. Stock investors often refer to this as a yield trap.

In addition to a too-good-to-be-true dividend yield, there are some other potential red flags to look for when evaluating REITs. To be clear, none of these are a perfect indicator of trouble all by themselves. However, the presence of any of these factors should be a reason to dig a little deeper into the company's business before you keep it on your watch list.

  • A dividend payout ratio that's more than 100% of a REIT's funds from operation (FFO). Funds from operations is the REIT version of earnings. While REITs typically pay out more of their earnings than the average dividend stock, a dividend that is more than a company's FFO isn't sustainable over the long run.
  • Declining occupancy in the company's property portfolio. You'll see this quite a bit in the retail sector, although a declining occupancy rate can be a troubling sign for any REIT.
  • Slowing, stagnant, or declining same-store revenue growth. Healthy commercial properties are able to increase their rent slightly each year, and many have rent increases built right into multi-year leases. If same-store rent growth turns negative, it can be a serious sign of trouble.
  • Excessive debt. There's no set-in-stone rule about how much debt is too much for a REIT to carry, but if I see a debt-to-capitalization ratio of more than 50%, I start to get suspicious.

The same "too good to be true" principle applies when considering crowdfunded real estate deals or individual investment properties. For example, a crowdfunded real estate investment that is targeting a 25% annualized return for investors might be an indication that there's a lot of execution risk involved in the deal. A duplex that's selling for $100,000 while similar properties are listed for $150,000 or more could be a sign that something is seriously wrong with the property and that if you choose to buy it, you should take your due diligence period very seriously.

2. Diversify your portfolio

If you had a bundle of money to invest in the stock market, would you put it all in just one company? Probably not. The same concept applies to real estate investing.

To be clear, real estate itself can certainly be used to diversify your assets. For example, if you have a $1 million net worth and 95% of it is in stocks and bonds, putting some of your money in real estate can help protect you from stock market crashes.

However, it's important to spread out your real estate allocation as well. This is especially true if you choose to invest in crowdfunded real estate deals, as these tend to be higher-risk investments and spreading your money around is vital to ensure that if a deal goes sour, you won't end up financially devastated.

Additionally, different types of commercial real estate don't react in the same way to economic conditions. For example, hotels, self-storage facilities, and entertainment properties tend to be highly cyclical -- that is, their business tends to get adversely affected by recessions more than the average company. On the other hand, healthcare properties, office buildings, and apartments tend to be much less economically sensitive. By diversifying the nature of your passive real estate investments, you can set yourself up for relatively strong investment performance no matter what the economy is doing.

3. Do your homework

As a final point, it's important to discuss what passive real estate investing is, and what it isn't. Passive investing means that you don't take any active role in the underlying business. In other words, when you invest in a stock, you don't have any involvement with the company's day-to-day business operations.

However, passive investing does not imply that you simply put your money in and then forget all about it. If you're investing in REITs or other real estate stocks, it's important to keep up with how the company is doing to ensure that your reasons for buying the stock in the first place still apply. At a minimum, I suggest you read the quarterly reports for each company whose stock you own and sign up to receive email alerts whenever the company has a major news release (most REITs have an easy way to do this on their investor relations webpage). Listening to the company's quarterly conference calls can give you an extra layer of insight into the business.

All of the REIT stocks in my portfolio were bought with the hope that I'll own them forever, but that doesn't necessarily mean that I will. If my original thesis for buying a REIT changes, I'm usually pretty quick to move on.

Ongoing homework is less critical in crowdfunded real estate investing, simply because you can't just cash out of your investment whenever you want. However, it's still important to keep up with the updates you receive from the deal's sponsor. After all, if a particular crowdfunded investment isn't going well, even though you can't sell the investment, it could affect how much risk you want to carry elsewhere in your portfolio.

The bottom line is that passive, buy-and-hold real estate investing is certainly less of a time commitment when compared to active strategies like owning and managing rental properties or fixing and flipping houses. Just be aware that this doesn't mean that there's no ongoing time commitment after you invest.

These Startups Are Building Tools to Keep an Eye on AI - WIRED

Posted: 21 Oct 2019 03:00 AM PDT

In January, Liz O'Sullivan wrote a letter to her boss at artificial intelligence startup Clarifai, asking him to set ethical limits on its Pentagon contracts. WIRED had previously revealed that the company worked on a controversial project processing drone imagery.

O'Sullivan urged CEO Matthew Zeiler to pledge the company would not contribute to the development of weapons that decide for themselves whom to harm or kill. At a company meeting a few days later, O'Sullivan says, Zeiler rebuffed the plea, telling staff he saw no problems with contributing to autonomous weapons. Clarifai did not respond to a request for comment.

O'Sullivan decided to take a stand. "I quit," she says. "And cried through the weekend." Come Monday, though, she took a previously planned trip to an academic conference on fairness and transparency in technology. There she met Adam Wenchel, who previously led Capital One's AI work, and the pair got to talking about the commercial opportunity of helping companies keep their AI deployments in check.

O'Sullivan and Wenchel are now among the cofounders of startup Arthur, which provides tools to help engineers monitor the performance of their machine learning systems. They're supposed to make it easier to spot problems such as a financial system making biased lending or investment decisions. It is one of several companies, large and small, trying to profit from building digital safety equipment for the AI era.

Researchers and tech companies are raising alarms about AI going awry, such as facial recognition algorithms that are less accurate on black faces. Microsoft and Google now caution investors that their AI systems may cause ethical or legal problems. As the technology spreads into other industries such as finance, health care, and government, so must new safeguards, says O'Sullivan, who is Arthur's VP of commercial operations. "People are starting to realize how powerful these systems can be, and that they need to take advantage of the benefits in a way that is responsible," she says.

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Arthur and similar startups are tackling a drawback of machine learning, the engine of the recent AI boom. Unlike ordinary code written by humans, machine learning models adapt themselves to a particular problem, such as deciding who should get a loan, by extracting patterns from past data. Often, the many changes made during that adaptation, or learning, process aren't easily understood. "You're kind of having the machine write its own code, and it's not designed for humans to reason through," says Lukas Biewald, CEO and founder of startup Weights & Biases, which offers its own tools to help engineers debug machine learning software.

Researchers describe some machine learning systems as "black boxes," because even their creators can't always describe exactly how they work, or why they made a particular decision. Arthur and others don't claim to have fully solved that problem, but offer tools that make it easier to observe, visualize, and audit machine learning software's behavior.

The large tech companies most heavily invested in machine have built similar tools for their own use. Facebook engineers used one called Fairness Flow to make sure its job ad recommendation algorithms work for people of different backgrounds. Biewald says that many companies without large AI teams don't want to build such tools for themselves, and will turn to companies like his own instead.

Weights & Biases customers include Toyota's autonomous driving lab, which uses its software to monitor and record machine learning systems as they train on new data. That makes it easier for engineers to tune the system to be more reliable, and speeds investigation of any glitches encountered later, Biewald says. His startup has raised $20 million in funding. The company's other customers include independent AI research lab OpenAI. It uses the startup's tools in its robotics program, which this week demonstrated a robotic hand that can (sometimes) solve a modified Rubik's Cube.