“Extra Crunch roundup: 500 Startups’ demo day, smart SaaS pricing and much more - TechCrunch” plus 2 more

“Extra Crunch roundup: 500 Startups’ demo day, smart SaaS pricing and much more - TechCrunch” plus 2 more

Extra Crunch roundup: 500 Startups’ demo day, smart SaaS pricing and much more - TechCrunch

Posted: 05 Feb 2021 03:04 PM PST

Demo days at startup accelerators are a pretty big deal around here.

These events aren't just a chance to review the latest cohort of hopeful entrepreneurs — they also showcase the technology, products and services that will compete for VC and consumer attention over the next few years.

You never know where a hit will come from, which is why these events capture our attention. Here's just one example from Y Combinator's Summer 2013 Demo Day:

Positioning itself as the "FedEx of today," it hopes to provide a logistics framework that goes beyond food and can be used for any type of on-demand order.

That startup was DoorDash, by the way.

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Full disclosure: In 2016, I was 500 Startups' Journalist-in-residence. I covered one demo day in person, spending most of my time backstage where founder teams practiced their pitches.

It was quite a scene: Several people literally jumped up and down to shake off their nervous energy, but I also recall one who calmly recited their lines while gazing through a window.

Yesterday, Jon Shieber and Alex Wilhelm covered 500 Startups' 27th virtual demo day and selected eight companies as their favorites:

  • Stack
  • Adapty
  • MightyFly
  • Omnitron Sensors
  • AWSM
  • Memechat
  • Ryu Games
  • Apothecary

Thank you very much for reading Extra Crunch this week! I hope you have a safe, relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch

TechCrunch's favorite companies from 500 Startups' latest demo day

Chick hatching from egg on egg tray

Image Credits: David Malan (opens in a new window) / Getty Images

How the GameStop stonkathon helped Robinhood raise $3.4B last week

I've never used "stonkathon" in a headline before, but it's been that kind of week.

The war between hedge funds and day traders over GameStop vaulted discount trader Robinhood into the headlines for days.

But how did it affect the company's financial health?

This morning, Alex Wilhelm examined why Robinhood's investors were willing to inject $3.4 billion more into the company in just one week.

"More trades means more PFOF (payment for order flow) revenue," says Alex. "And Robinhood effectively doubled in size."

Udemy's new president discusses the reskilling company's future

Electronic signature on laptop. Business Esignature technology, digital form attached to electronically transmitted document, verification of intent to sign agreement, legal deal. Vector illustration

Image Credits: Andrew_Rybalko / Getty Images

Reporter Natasha Mascarenhas interviewed Greg Brown, new president of digital learning platform Udemy, after his company announced that it surpassed $100 million ARR.

A new arm of the company, Udemy for Business, just secured a 100,000-employee contract with Cisco Systems to offer software, business and technology courses.

"The opportunity that the company sees has really forced us to reallocate resources and strategy," said Brown.

Why one Databricks investor thinks the company may be undervalued

After scaling its ARR to $425 million and reaching a valuation of $28 billion, data analytics company Databricks is clearly IPO-ready.

Battery Ventures has backed Databricks since 2017, so Alex Wilhelm interviewed General Partner Dharmesh Thakker to understand why he thinks the company may be undervalued.

"Whether it's digital transformation, whether it's analytics, data is everywhere," said Thakker. "So the TAM is massive."

4 strategies for deep tech founders who are fundraising

Laser Light Interrupted by Unfolded Book Shape of Paper.

Image Credits: MirageC (opens in a new window) / Getty Images

Deep tech founders face special challenges when pitching investors: they usually don't have a product, customers or revenue.

It's difficult enough to ask a stranger for a check when there's a beta product, but how do you drum up interest in an unproven idea that may exist largely in your imagination?

"Early-stage investors are in the business of funding dreams," says angel investor Jessica Li.

"Investors are less interested in the intricacies of your technology and more interested in what impact it can create."

Step one: use storytelling to highlight your big vision.

Edtech valuations aren't skyrocketing, but investors see more exit opportunities

Investors funded edtech startups with $10 billion last year as the pandemic forced widespread adoption of remote learning.

The valuations of these companies aren't rising at the same rate as SaaS or fintech startups, but "where edtech lacks in impressive valuations, investors see it gaining in exit opportunities," writes Natasha Mascarenhas.

For this edtech investor survey, she interviewed:

  • Deborah Quazzo, managing partner, GSV Ventures (an education fund backing ClassDojo, Degreed and Clever)
  • Ashley Bittner, founding partner, Firework Ventures (a future-of-work fund with portfolio companies LearnIn and TransfrVR)
  • Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
  • John Danner, managing partner, Dunce Capital (an edtech and future-of-work fund with portfolio companies Lambda School and Outschool)
  • Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multistage generalist fund with investments including Forage, Clever and Outschool)
  • Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly valued companies including BYJU's, Newsela and MasterClass)
  • Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy and BibliU)
  • Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer and Aula)
  • Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
  • Daniel Pianko, co-founder and managing director, University Ventures (a higher-ed and future-of-work fund that is backing Imbellus and AdmitHub)
  • Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet and Duolingo)
  • Andreata Muforo, partner, TLcom Capital (a generalist fund backing uLesson)

Deep Science: AIs with high class and higher altitudes

Artificial Intelligence digital concept

Image Credits: MF3d (opens in a new window) / Getty Images

In his latest recap of recent breakthroughs in applied science, Devin Coldewey looked at how researchers are using AI to:

  • Categorize thousands of pieces of classical music
  • Read MRIs to spot patients with schizophrenia
  • Track elephant herds via satellite
  • Improve accessibility on mobile phones

Spotify Group Session UX teardown: the fails and their fixes

London, UK - July 31, 2018: The buttons of the music streaming app Spotify, surrounded by Podcasts, Apple Music, Facebook and other apps on the screen of an iPhone.

Image Credits: Getty Images

In the latest of a series of articles that examines user experiences for consumer apps, UX expert Peter Ramsey and TechCrunch reporter Steve O'Hear studied Spotify Group Session, the shared-queue feature that permits users to create playlists collaboratively.

"Many of these lessons can be applied to other existing digital products or ones you are currently building," such as the need to add context for important decisions and how to best use "react and explain" prompts.

Lightspeed's Gaurav Gupta and Grafana's Raj Dutt discuss pitch decks, pricing and how to nail the narrative

Gaurav Gupta, Lightspeed Venture Partners + Raj Dutt, Grafana Labs

Extra Crunch Live returned this week with two guests: Lightspeed Venture Partners' Gaurav Gupta and Raj Dutt, co-founder and CEO of Grafana Labs.

In addition to walking us through the presentation that encouraged Lightspeed to invest in Grafana's Series A, the duo also gave direct feedback to audience members about their pitch decks.

Watch a video with our complete episode, or read highlights from the chat to get Gupta and Dutt's insights on what goes into a successful pitch deck.

New episodes of Extra Crunch Live drop each Wednesday at 12 p.m. PST/3 p.m. EST/8 p.m. GMT.

Here's a breakdown of the complete episode with Gaurav Gupta and Raj Dutt:

  • How they met — 2:00
  • Grafana's early pitch deck — 12:00
  • The enterprise ecosystem — 25:00
  • The pitch deck teardown — 32:00

Subscription-based pricing is dead: Smart SaaS companies are shifting to usage-based models

paper plane made from a ten dollar bill

Paper plane made from a ten-dollar bill. Image Credits: LockieCurrie (opens in a new window)/ Getty Images

Some IT managers may still be debating the merits of usage-based pricing versus subscription-based models, but SaaS investors have made up their minds.

Compared to their rivals, companies that employ usage-based pricing trade at a 50% revenue multiple premium. You can argue with success, but seven out of the nine IPOs since 2018 with the best net dollar retention offer usage-based models.

If you're a founder who hopes to break into the $100M ARR club, this guest post can help you identify the right usage metrics for creating a sustainable customer journey.

For more actionable advice regarding SaaS pricing and sales, see these previously published Extra Crunch stories:

Bumble IPO could raise more than $1B for dating service

How many dating networks can the public market support?

In Tuesday's column, Alex Wilhelm examined the latest IPO filing from relationship-finding service Bumble.

The company set a range of $28 – $30 per share, so Alex set out to find its simple and diluted valuations, how much it expects investors to pay and "how those stack up compared to Match Group's own numbers."

Robinhood's Q4 2020 revenue shows a return to growth

Discount brokerage Robinhood stayed in the news last week as it became a proxy battlefield for institutional and retail investors, but its backers "put in another billion just last week," says Alex Wilhelm.

Why were investors so bullish after days of screaming headlines?

In yesterday's column, Alex unpacked Robinhood's Q4 2020 numbers, "which shows a return to sequential-quarterly growth at the trading upstart."

Trading app Public drops payment for order flow in favor of tips

close up of man hand with digital tablet analyzing stock market graph at night

Image Credits: Towfiqu Photography / Getty Images

Before Redditors came after GameStop, zero-cost trading service Public says it was seeing "steady ~30%" month-over-month growth.

Last week, however, "new user signups went up 20x," founders Leif Abraham and Jannick Malling told TechCrunch.

After closing a $65 million Series C, Public announced yesterday that it would "stop participating in the practice of Payment for Order Flow," replacing PFOF with an "optional tipping feature."

Customer advisory boards are a gold mine for startup brand champions

People figures with comment clouds above their heads. Commenting on feedback, participation in discussion. Brainstorming, fresh new ideas. Communication in civil society. Cooperation and Collaboration (People figures with comment clouds above their he

Image Credits: Andrii Yalanskyi (opens in a new window) / Getty Images

Startups that don't directly engage their earliest customers with purpose and intention are leaving money on the table.

Creating a Customer Advisory Board (CAB) is a proven method for soliciting product ideas, testing marketing plans and turning early users into loyal brand advocates.

Before you call a CAB, read this post to find out how to identify customers who'll contribute real insights, establish goals and "pick members who play well together."

Best practices as a service is a key investment theme to watch in 2021

Red and white stop sign on the wall. Image Credits: Karl Tapales (opens in a new window)/ Getty Images

Identity and access management company Okta announced in a study last week that its largest customers use an average of 175 different applications to manage their operations.

Managing Editor Danny Crichton says this "explosion of creativity and expressiveness and operational latitude" offers widespread benefits, but it's "also a recipe for disaster," since many end users aren't well-trained when it comes to using these tools.

This enterprise version of the Tower of Babel creates an opening for companies that offer "best practices as a service," says Danny. "The next generation of SaaS software has to take those abecedarian building blocks and forcibly guide users to using those tools in the best possible way."

Microsoft chiefs say big tech antitrust issues can be solved with laws, not lawsuits - CNET

Posted: 05 Feb 2021 05:00 AM PST


Microsoft's history with antitrust gives it an unusual perspective about tech policy these days.

James Martin/CNET

Microsoft built a monopoly on the back of its Windows software to power computers and the Internet Explorer web browser. A judge even pronounced that finding in 2001, after a three-year government investigation into the company. But after that, Microsoft effectively got a multimillion-dollar slap on the wrist, and continued being Microsoft.

Two decades later, the US government is ramping up an antitrust debate focused on Amazon, Apple, Facebook and Google. Though Microsoft isn't a target this time around, the company says there are key lessons governments should take from its 2001 case.

"Twenty years ago, almost solely the vehicle that governments used was an investigation and a lawsuit. It was a case against individual companies," Microsoft President Brad Smith said Tuesday during an editorial roundtable with Microsoft CEO Satya Nadella. This time around, Smith said, governments appear to realize that legislation can help solve larger concerns about competition. "I think regulators have broadly concluded that cases are both too narrow and too slow."


Microsoft President Brad Smith (left) and Microsoft CEO Satya Nadella at a shareholders meeting, pre-pandemic.

Jason Redmond/AFP via Getty Images

The European Union has introduced ideas like the Digital Markets Act, which seeks to spell out how much companies with large user bases can promote their own products to users ahead of those from a competitor, and the Digital Services Act, which would put pressure on companies to do a better job moderating their platforms. Tech companies could face fines of up to 10% of their global revenue -- easily reaching into the billions of dollars -- for breaking these rules if they're implemented.

The EU isn't the only government targeting tech. Microsoft's comments come at a time when governments around the world are expressing concerns about increasing signs of bad behavior among tech companies. Amazon, Apple and Google have been accused of kneecapping competitors by pushing their own products to the top of search results, deservedly or not. Facebook has often failed to stop the spread of disinformation, misinformation and hate speech.

To Nadella, this is part of a larger problem with the tech world, where companies worry about growing first before they worry about unintended consequences that come with that type of scale. For example, he said, companies need to consider how their growth can impact people's trust. And whether the company's being fair as it grows.

"The business model and the technology need to account for the unintended consequence, with the unit of scale being one," he said.

For many tech watchers, that's a bit rich coming from the CEO of Microsoft, a company whose software reached a worldwide scale so quickly and forcefully that it eventually led to the antitrust ruling in 2001.

Phone screen showing logos for Google, Apple, Facebook, Amazon and Microsoft.

The European Union is debating several laws designed to rein in big tech.

Getty Images

Nadella's tried to soften that killer instinct that came from Microsoft's co-founder Bill Gates and his successor as CEO, Steve Ballmer. Instead, Nadella talks about Microsoft as a company built around helping other companies succeed. "You join here not to be cool, but to make others cool," he told CNET in 2018. "You want to be cool by doing that empowerment. It's the result that matters."

Smith often acts as Microsoft's outspoken voice on political and policy issues that affect the company and its employees. 

He's also weighed in on larger legal issues facing his tech colleagues. Most recently, Microsoft said it supports an Australian law that, if passed, would force companies like Google and Facebook to share revenue with news publications whose articles appear on their platforms. Google's threatened to shutter its search engine in Australia if the law is passed.

"The code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses," Smith said in a statement Wednesday. "While Microsoft is not subject to the legislation currently pending, we'd be willing to live by these rules if the government designates us."

Though antitrust was certainly one of the more pressing topics Microsoft discussed during its media roundtable, the software maker also discussed social media and other political issues as well.

On TikTok

Phone screens with the Microsoft and TikTok logos.

For a while, it was starting to look like Microsoft might buy upstart social media darling TikTok. But the deal fell through.

Angela Lang/CNET

When Microsoft said last year it was interested in buying the popular upstart social media app TikTok, many tech watchers were confused. Microsoft makes business software like Office and Teams, and video games for its Xbox business. Even its LinkedIn social media network, which Microsoft bought for more than $26 billion in 2016, is focused on the professional world. It didn't have much experience managing a social media network popular with teenagers.

Nadella said he saw an opportunity to run a social network under his company's tenets of protecting privacy, ensuring internet safety and stopping disinformation. And with TikTok still growing quickly, he believes those values can make a difference early on.

"One of the things that we have recognized is context. LinkedIn, for example, has a very powerful context, and we use that. We made calls where we sort of said, oh, there is an editorial context that we bring to bear, even, to manage and shape the conversation," Nadella said. "The key thing there, for me, is don't wait for your property to scale."

On President Joe Biden

Computer screen showing the word "security" and an image of a key.

Microsoft says the Biden administration has put capable people in key cybersecurity and national security roles.

Graphic by Pixabay/Illustration by CNET

Microsoft, like many tech companies, was caught in a tough spot during President Donald Trump's administration. On one hand, the government is sometimes an important customer. On the other, the companies spoke out against the president's Muslim bans, the policy of separating families at the border and the crackdowns on H-1B visas.

By comparison, Smith said that things appear as though they'll be less contentious with President Joe Biden's team. But that isn't just because of policy, Smith said. "I just think you're seeing the Biden administration quickly put a number of really capable cybersecurity and national security experts in key roles," he said. "They are focused on this issue and public-private collaboration."

Cybersecurity continues to be one of the most pressing national security and privacy issues facing tech today. In December, researchers discovered hackers had inserted malicious code into network monitoring software from SolarWinds. That company's products are used by state and federal agencies in the US, as well as many companies across the globe, including Microsoft. The attacks so far have been attributed to Russian and Chinese hackers.

Smith said many companies and governments still aren't protected enough from cyberattacks, nor are they connected to the internet in ways that they can easily detect attacks.

Now playing: Watch this: Microsoft CEO on using tech for good, not evil


"That's the No. 1 thing where we've got to do more work to help those organizations and those governments identify whether they're still being the subject of this attack," he said.

Which is why Smith added that he feels better that the Biden administration is putting cybersecurity and national security experts into key roles.

"At this point, a couple of months into it, I would say that we are probably feeling better about where the US government is, because the government has been acting to address" cybersecurity issues, he added.

Buy Upstart, An AI Leader In Lending - Seeking Alpha

Posted: 05 Feb 2021 07:55 AM PST

[unable to retrieve full-text content]Buy Upstart, An AI Leader In Lending  Seeking Alpha


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