Amazon Web Services
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The time Animoto almost brought AWS to its knees
Today, Amazon Web Services is a mainstay in the cloud infrastructure services market, a $60 billion juggernaut of a business. But in 2008, it was still new, working to keep its head above water and handle growing demand for its cloud servers. In fact, 15 years ago last week, the company launched Amazon EC2 in beta. From that point forward, AWS offered startups unlimited compute power, a primary selling point at the time.
EC2 was one of the first real attempts to sell elastic computing at scale — that is, server resources that would scale up as you needed them and go away when you didn’t. As Jeff Bezos said in an early sales presentation to startups back in 2008, “you want to be prepared for lightning to strike, […] because if you’re not that will really generate a big regret. If lightning strikes, and you weren’t ready for it, that’s kind of hard to live with. At the same time you don’t want to prepare your physical infrastructure, to kind of hubris levels either in case that lightning doesn’t strike. So, [AWS] kind of helps with that tough situation.”
An early test of that value proposition occurred when one of their startup customers, Animoto, scaled from 25,000 to 250,000 users in a 4-day period in 2008 shortly after launching the company’s Facebook app at South by Southwest.
At the time, Animoto was an app aimed at consumers that allowed users to upload photos and turn them into a video with a backing music track. While that product may sound tame today, it was state of the art back in those days, and it used up a fair amount of computing resources to build each video. It was an early representation of not only Web 2.0 user-generated content, but also the marriage of mobile computing with the cloud, something we take for granted today.
For Animoto, launched in 2006, choosing AWS was a risky proposition, but the company found trying to run its own infrastructure was even more of a gamble because of the dynamic nature of the demand for its service. To spin up its own servers would have involved huge capital expenditures. Animoto initially went that route before turning its attention to AWS because it was building prior to attracting initial funding, Brad Jefferson, co-founder and CEO at the company explained.
“We started building our own servers, thinking that we had to prove out the concept with something. And as we started to do that and got more traction from a proof-of-concept perspective and started to let certain people use the product, we took a step back, and were like, well it’s easy to prepare for failure, but what we need to prepare for success,” Jefferson told me.
Going with AWS may seem like an easy decision knowing what we know today, but in 2007 the company was really putting its fate in the hands of a mostly unproven concept.
“It’s pretty interesting just to see how far AWS has gone and EC2 has come, but back then it really was a gamble. I mean we were talking to an e-commerce company [about running our infrastructure]. And they’re trying to convince us that they’re going to have these servers and it’s going to be fully dynamic and so it was pretty [risky]. Now in hindsight, it seems obvious but it was a risk for a company like us to bet on them back then,” Jefferson told me.
Animoto had to not only trust that AWS could do what it claimed, but also had to spend six months rearchitecting its software to run on Amazon’s cloud. But as Jefferson crunched the numbers, the choice made sense. At the time, Animoto’s business model was for free for a 30 second video, $5 for a longer clip, or $30 for a year. As he tried to model the level of resources his company would need to make its model work, it got really difficult, so he and his co-founders decided to bet on AWS and hope it worked when and if a surge of usage arrived.
That test came the following year at South by Southwest when the company launched a Facebook app, which led to a surge in demand, in turn pushing the limits of AWS’s capabilities at the time. A couple of weeks after the startup launched its new app, interest exploded and Amazon was left scrambling to find the appropriate resources to keep Animoto up and running.
Dave Brown, who today is Amazon’s VP of EC2 and was an engineer on the team back in 2008, said that “every [Animoto] video would initiate, utilize and terminate a separate EC2 instance. For the prior month they had been using between 50 and 100 instances [per day]. On Tuesday their usage peaked at around 400, Wednesday it was 900, and then 3,400 instances as of Friday morning.” Animoto was able to keep up with the surge of demand, and AWS was able to provide the necessary resources to do so. Its usage eventually peaked at 5000 instances before it settled back down, proving in the process that elastic computing could actually work.
At that point though, Jefferson said his company wasn’t merely trusting EC2’s marketing. It was on the phone regularly with AWS executives making sure their service wouldn’t collapse under this increasing demand. “And the biggest thing was, can you get us more servers, we need more servers. To their credit, I don’t know how they did it — if they took away processing power from their own website or others — but they were able to get us where we needed to be. And then we were able to get through that spike and then sort of things naturally calmed down,” he said.
The story of keeping Animoto online became a main selling point for the company, and Amazon was actually the first company to invest in the startup besides friends and family. It raised a total of $30 million along the way, with its last funding coming in 2011. Today, the company is more of a B2B operation, helping marketing departments easily create videos.
While Jefferson didn’t discuss specifics concerning costs, he pointed out that the price of trying to maintain servers that would sit dormant much of the time was not a tenable approach for his company. Cloud computing turned out to be the perfect model and Jefferson says that his company is still an AWS customer to this day.
While the goal of cloud computing has always been to provide as much computing as you need on demand whenever you need it, this particular set of circumstances put that notion to the test in a big way.
Today the idea of having trouble generating 3,400 instances seems quaint, especially when you consider that Amazon processes 60 million instances every day now, but back then it was a huge challenge and helped show startups that the idea of elastic computing was more than theory.
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Extra Crunch roundup: Toast and Freshworks S-1s, pre-pitch tips, flexible funding lessons
The digital transformation currently sweeping society has likely reached your favorite local restaurant.
Since 2013, Boston-based Toast has offered bars and eateries a software platform that lets them manage orders, payments and deliveries.
Over the last year, its customers have processed more than $38 billion in gross payment volume, so Alex Wilhelm analyzed the company’s S-1 for The Exchange with great interest.
“Toast was last valued at just under $5 billion when it last raised, per Crunchbase data,” he writes. “And folks are saying that it could be worth $20 billion in its debut. Does that square with the numbers?”
Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.
Airbnb, DoorDash and Coinbase each debuted at past Y Combinator Demo Days; as of this writing, they employ a combined 10,000 people.
Today and tomorrow, TechCrunch reporters will cover the proceedings at YC’s Summer 20201 Demo Day. In addition to writing up founder pitches, they’ll also rank their favorites.
Even remotely, I can feel a palpable sense of excitement radiating from our team — anything can happen at YC Demo Day, so sign up for Extra Crunch to follow the action.
Thanks very much for reading; I hope you have an excellent week.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
How Amazon EC2 grew from a notion into a foundational element of cloud computing
Image Credits: Ron Miller/TechCrunch
In August 2006, AWS activated its EC2 cloud-based virtual computer, a milestone in the cloud infrastructure giant’s development.
“You really can’t overstate what Amazon was able to accomplish,” writes enterprise reporter Ron Miller.
In the 15 years since, EC2 has enabled clients of any size to test and run their own applications on AWS’ virtual machines.
To learn more about a fundamental technological shift that “would help fuel a whole generation of startups,” Ron interviewed EC2 VP Dave Brown, who built and led the Amazon EC2 Frontend team.
3 ways to become a better manager in the work-from-home era
Image Credits: Jasmin Merdan (opens in a new window)/ Getty Images
Most managers agree that OKRs foster transparency and accountability, but running a team effectively has different challenges when workers are attending all-hands meetings from their kitchen tables.
Instead of just discussing key metrics before board meetings or performance reviews, make them part of the day-to-day culture, recommends Jeremy Epstein, Gtmhub’s CMO.
“Strengthen your team by creating authentic workplace transparency using numbers as a universal language and providing meaning behind your team’s work.”
The pre-pitch: 7 ways to build relationships with VCs
Image Credits: Getty Images under an Andrii Yalanskyi (opens in a new window) license
Many founders must overcome a few emotional hurdles before they’re comfortable pitching a potential investor face-to-face.
To alleviate that pressure, Unicorn Capital founder Evan Fisher recommends that entrepreneurs use pre-pitch meetings to build and strengthen relationships before asking for a check:
“This is the ‘we actually aren’t looking for money; we just want to be friends for now’ pitch that gets you on an investor’s radar so that when it’s time to raise your next round, they’ll be far more likely to answer the phone because they actually know who you are.”
Pre-pitches are good for more than curing the jitters: These conversations help founders get a better sense of how VCs think and sometimes lead to serendipitous outcomes.
“Investors are opportunists by necessity,” says Fisher, “so if they like the cut of your business’s jib, you never know — the FOMO might start kicking hard.”
Lessons from COVID: Flexible funding is a must for alternative lenders
Image Credits: MirageC (opens in a new window) / Getty Images
FischerJordan’s Deeba Goyal and Archita Bhandari break down the pandemic’s impact on alternative lenders, specifically what they had to do to survive the crisis, taking a look at smaller lenders including Credibly, Kabbage, Kapitus and BlueVine.
“Only those who were able to find a way through the complexities of their existing capital sources were able to maintain their performance, and the rest were left to perish or find new funding avenues,” they write.
Inside Freshworks’ IPO filing
Image Credits: Nigel Sussman (opens in a new window)
Customer engagement software company Freshworks’ S-1 filing depicts a company that’s experiencing accelerating revenue growth, “a great sign for the health of its business,” reports Alex Wilhelm in this morning’s The Exchange.
“Most companies see their growth rates decline as they scale, as larger denominators make growth in percentage terms more difficult.”
Studying the company’s SEC filing, he found that “Freshworks isn’t a company where we need to cut it lots of slack, as we might with an adjusted EBITDA number. It is going public ready for Big Kid metrics.”
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Octane banks $2M for flexible billing software
Software billing startup Octane announced Tuesday that it raised $2 million on a post-money valuation of $10 million to advance its pay-as-you-go billing software.
Akash Khanolkar and his co-founders met a decade ago at Carnegie Mellon University and since then went off in different directions. In Khanolkar’s case, he ran a cloud consulting business and saw how fast companies like Datadog and Snowflake were coming to market and dealing with Amazon Web Services.
He found that the commonality in all of those fast-growing companies was billing software using a pay-as-you-go business model versus the traditional flat-rate plans, Khanolkar told TechCrunch.
However, he explained that monitoring consumption means that billing becomes complicated: companies now have to track how customers are using the software per second in order to bill correctly each month.
Seeing the shift toward consumption-based billing, the co-founders came back together in June 2020 to create Octane, a metered billing system that helps vendors create a plan, monitor usage and charge in a similar way to Snowflake and AWS, Khanolkar said.
“We are API-driven, and you as a vendor will send us usage data, and on our end, we store it and then do real-time aggregations so at the end of the month, you can accordingly bill customers,” Khanolkar said. “We have seen contention between engineering and product. Engineers are there to create core plans, so we built a no-code experience for product teams to be able to create new price plans and then perform changes, like adding coupons.”
Within the global cloud billing market, which is expected to reach $6.5 billion by 2025, there are a set of Octane competitors, like Chargebee and Zuora, that Khanolkar said are tackling the subscription management side and succeeding in the past several years. Now there is a usage and consumption-based world coming and a whole new set of software businesses, like Octane, coming in to succeed there.
The new round of funding was led by Basis Set Ventures and included Dropbox co-founder Arash Ferdowsi, Github CTO Jason Warner, Fortress CTO Assunta Gaglione, Scale AI CRO Chetan Chaudhary, former Twilio executive Evan Cummack, Esteban Reyes, Abstraction Capital and Script Capital.
“With the rise of product-led growth and usage-based pricing models, usage-based billing is a critical and foundational piece of infrastructure that has been simply missing,” said Chang Xu, partner at Basis Set Ventures, via email. “At the same time, it’s something that every department cares about as it’s your revenue. Many later-stage companies we talk to that have built this in-house talk about the ongoing maintenance costs and wishes that there is a vendor they can outsource it to.”
We are super impressed with the Octane team with their dedication to building a best-in-class and robust usage-based billing solution. They’ve validated this opportunity by talking to lots of engineering teams so they can solve for all the edge cases, which is important in something as mission critical as billing. We are convinced that Octane will become an inevitable part of the tech infrastructure.”
The new funding will go primarily toward hiring engineers, as well as product, marketing and sales staff. Octane currently has seven employees, and Khanolkar expects to be around 10 by the end of the year.
The company is working with a large range of companies, primarily focused on infrastructure and the depth gauge industries. Octane is also seeing some unique use cases emerge, like a construction company using the usage meter to track the hours an employee works and companies in electric charging using the meter for those purposes.
“We didn’t envision construction guys using it, but in theory, it could be used by any company that tracks time — even legal,” Khanolkar added.
He declined to speak about the company’s revenue, but did say it now had two to three years of runway.
Up next, the company plans to roll out new features like price experimentation based on usage to help customers better make decisions on how to price their software, another problem Khanolkar sees happening. It will build ways that customers can try different plans against usage data to validate which one works the best.
“We are still in the early innings of consumption-based models, but we see more end users opting to go with an enterprise that wants to let them try out the software and then pay as they go,” he added.
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How Amazon EC2 grew from a notion into a foundational element of cloud computing
Fifteen years ago this week on August 25, 2006, AWS turned on the very first beta instance of EC2, its cloud-based virtual computers. Today cloud computing, and more specifically infrastructure as a service, is a staple of how businesses use computing, but at that moment it wasn’t a well known or widely understood concept.
The EC in EC2 stands for Elastic Compute, and that name was chosen deliberately. The idea was to provide as much compute power as you needed to do a job, then shut it down when you no longer needed it — making it flexible like an elastic band. The launch of EC2 in beta was preceded by the beta release of S3 storage six months earlier, and both services marked the starting point in AWS’ cloud infrastructure journey.
You really can’t overstate what Amazon was able to accomplish with these moves. It was able to anticipate an entirely different way of computing and create a market and a substantial side business in the process. It took vision to recognize what was coming and the courage to forge ahead and invest the resources necessary to make it happen, something that every business could learn from.
The AWS origin story is complex, but it was about bringing the IT power of the Amazon business to others. Amazon at the time was not the business it is today, but it was still rather substantial and still had to deal with massive fluctuations in traffic such as Black Friday when its website would be flooded with traffic for a short but sustained period of time. While the goal of an e-commerce site, and indeed every business, is attracting as many customers as possible, keeping the site up under such stress takes some doing and Amazon was learning how to do that well.
Those lessons and a desire to bring the company’s internal development processes under control would eventually lead to what we know today as Amazon Web Services, and that side business would help fuel a whole generation of startups. We spoke to Dave Brown, who is VP of EC2 today, and who helped build the first versions of the tech, to find out how this technological shift went down.
Sometimes you get a great notion
The genesis of the idea behind AWS started in the 2000 timeframe when the company began looking at creating a set of services to simplify how they produced software internally. Eventually, they developed a set of foundational services — compute, storage and database — that every developer could tap into.
But the idea of selling that set of services really began to take shape at an executive offsite at Jeff Bezos’ house in 2003. A 2016 TechCrunch article on the origins AWS described how that started to come together:
As the team worked, Jassy recalled, they realized they had also become quite good at running infrastructure services like compute, storage and database (due to those previously articulated internal requirements). What’s more, they had become highly skilled at running reliable, scalable, cost-effective data centers out of need. As a low-margin business like Amazon, they had to be as lean and efficient as possible.
They realized that those skills and abilities could translate into a side business that would eventually become AWS. It would take a while to put these initial ideas into action, but by December 2004, they had opened an engineering office in South Africa to begin building what would become EC2. As Brown explains it, the company was looking to expand outside of Seattle at the time, and Chris Pinkham, who was director in those days, hailed from South Africa and wanted to return home.
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4 key areas SaaS startups must address to scale infrastructure for the enterprise
Startups and SMBs are usually the first to adopt many SaaS products. But as these customers grow in size and complexity — and as you rope in larger organizations — scaling your infrastructure for the enterprise becomes critical for success.
Below are four tips on how to advance your company’s infrastructure to support and grow with your largest customers.
Address your customers’ security and reliability needs
If you’re building SaaS, odds are you’re holding very important customer data. Regardless of what you build, that makes you a threat vector for attacks on your customers. While security is important for all customers, the stakes certainly get higher the larger they grow.
Given the stakes, it’s paramount to build infrastructure, products and processes that address your customers’ growing security and reliability needs. That includes the ethical and moral obligation you have to make sure your systems and practices meet and exceed any claim you make about security and reliability to your customers.
Here are security and reliability requirements large customers typically ask for:
Formal SLAs around uptime: If you’re building SaaS, customers expect it to be available all the time. Large customers using your software for mission-critical applications will expect to see formal SLAs in contracts committing to 99.9% uptime or higher. As you build infrastructure and product layers, you need to be confident in your uptime and be able to measure uptime on a per customer basis so you know if you’re meeting your contractual obligations.
While it’s hard to prioritize asks from your largest customers, you’ll find that their collective feedback will pull your product roadmap in a specific direction.
Real-time status of your platform: Most larger customers will expect to see your platform’s historical uptime and have real-time visibility into events and incidents as they happen. As you mature and specialize, creating this visibility for customers also drives more collaboration between your customer operations and infrastructure teams. This collaboration is valuable to invest in, as it provides insights into how customers are experiencing a particular degradation in your service and allows for you to communicate back what you found so far and what your ETA is.
Backups: As your customers grow, be prepared for expectations around backups — not just in terms of how long it takes to recover the whole application, but also around backup periodicity, location of your backups and data retention (e.g., are you holding on to the data too long?). If you’re building your backup strategy, thinking about future flexibility around backup management will help you stay ahead of these asks.
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Vantage raises $4M to help businesses understand their AWS costs
Vantage, a service that helps businesses analyze and reduce their AWS costs, today announced that it has raised a $4 million seed round led by Andreessen Horowitz. A number of angel investors, including Brianne Kimmel, Julia Lipton, Stephanie Friedman, Calvin French Owen, Ben and Moisey Uretsky, Mitch Wainer and Justin Gage, also participated in this round.
Vantage started out with a focus on making the AWS console a bit easier to use — and helping businesses figure out what they are spending their cloud infrastructure budgets on in the process. But as Vantage co-founder and CEO Ben Schaechter told me, it was the cost transparency features that really caught on with users.
“We were advertising ourselves as being an alternative AWS console with a focus on developer experience and cost transparency,” he said. “What was interesting is — even in the early days of early access before the formal GA launch in January — I would say more than 95% of the feedback that we were getting from customers was entirely around the cost features that we had in Vantage.”
Image Credits: Vantage
Like any good startup, the Vantage team looked at this and decided to double down on these features and highlight them in its marketing, though it kept the existing AWS Console-related tools as well. The reason the other tools didn’t quite take off, Schaechter believes, is because more and more, AWS users have become accustomed to infrastructure-as-code to do their own automatic provisioning. And with that, they spend a lot less time in the AWS Console anyway.
“But one consistent thing — across the board — was that people were having a really, really hard time 12 times a year, where they would get a shocking AWS bill and had to figure out what happened. What Vantage is doing today is providing a lot of value on the transparency front there,” he said.
Over the course of the last few months, the team added a number of new features to its cost transparency tools, including machine learning-driven predictions (both on the overall account level and service level) and the ability to share reports across teams.
Image Credits: Vantage
While Vantage expects to add support for other clouds in the future, likely starting with Azure and then GCP, that’s actually not what the team is focused on right now. Instead, Schaechter noted, the team plans to add support for bringing in data from third-party cloud services instead.
“The number one line item for companies tends to be AWS, GCP, Azure,” he said. “But then, after that, it’s Datadog, Cloudflare, Sumo Logic, things along those lines. Right now, there’s no way to see, P&L or an ROI from a cloud usage-based perspective. Vantage can be the tool where that’s showing you essentially, all of your cloud costs in one space.”
That is likely the vision the investors bought into, as well, and even though Vantage is now going up against enterprise tools like Apptio’s Cloudability and VMware’s CloudHealth, Schaechter doesn’t seem to be all that worried about the competition. He argues that these are tools that were born in a time when AWS had only a handful of services and only a few ways of interacting with those. He believes that Vantage, as a modern self-service platform, will have quite a few advantages over these older services.
“You can get up and running in a few clicks. You don’t have to talk to a sales team. We’re helping a large number of startups at this stage all the way up to the enterprise, whereas Cloudability and CloudHealth are, in my mind, kind of antiquated enterprise offerings. No startup is choosing to use those at this point, as far as I know,” he said.
The team, which until now mostly consisted of Schaechter and his co-founder and CTO Brooke McKim, bootstrapped the company up to this point. Now they plan to use the new capital to build out its team (and the company is actively hiring right now), both on the development and go-to-market side.
The company offers a free starter plan for businesses that track up to $2,500 in monthly AWS cost, with paid plans starting at $30 per month for those who need to track larger accounts.
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Jeff Bezos’ investment fund is backing a startup hoping to be the AWS for SMB accounting
One of the biggest pain points for startups and small businesses is keeping up with back office tasks such as bookkeeping and managing taxes.
QuickBooks, it seems, just doesn’t always cut it.
Three-time co-founders Waseem Daher, Jeff Arnold, and Jessica McKellar formed Pilot with the mission of affordably providing back office services to startups and SMBs. With over 1,000 customers, it has gained serious traction over the years. And Pilot has now also received validation from some big-name investors. On Friday, the company announced a $100 million Series C that doubles the company’s valuation to $1.2 billion.
Bezos Expeditions — Amazon founder Jeff Bezos’ personal investment fund — and Whale Rock Capital (a $10 billion hedge fund) co-led the round, which also included participation from Sequoia Capital, Index Ventures, Authentic Ventures and others.
Stripe and Index Ventures co-led Pilot’s $40 million Series B in April 2019. The latest financing brings the company’s total funding raised to over $158 million since its 2017 inception.
The founding team certainly has an impressive track record, having founded and sold two previous companies: Ksplice (to Oracle) and Zupli (to Dropbox).
Pilot’s pitch is about more than just software. The company combines its software with accountants to do things such as provide “CFO Services” to SMBs without a full-stack finance team. It also provides monthly variance analysis for all its bookkeeping customers, essentially serving as a controller for those companies, so they can make better budgeting and spending decisions.
It also helps companies access small business tax credits they may not have otherwise known about.
Last year, Pilot completed more than $3 billion in bookkeeping transactions for its customers, which range from pre-revenue startups to larger companies with more than $30M of revenue a year. Customers include Bolt, r2c and Pathrise, among others.
Pilot has also inked a number of co-marketing partnerships with companies such as American Express, Bill.com, Brex, Carta, Gusto, Rippling, Stripe, SVB, and Techstars.
Ironically, Pilot says it aspires to the “AWS of SMB backoffice.” (In fact, co-founder Waseem Daher started his career as an intern at Amazon). Put simply, Pilot wants to take care of all those back office tasks so companies can focus more on growth and winning business.
Pilot strives to offer an “exceptional customer experience,” which is reflected in the fact that over 80% of the company’s business is driven by customer referrals and organic interest, according to Daher.
Whale Rock Partner Kristov Paulus said that white-glove customer service experience and Pilot’s “carefully-engineered” software make a powerful combination.
“We look forward to supporting Pilot in their vision to make back office services as easy-to-use, scalable, and ubiquitous as AWS has with the cloud,” he said.
Pilot’s model reminds me a lot of that of ScaleFactor’s, an Austin-based startup that raised $100 million in a year before it crashed and burned. But the difference in this case is that Pilot seems to have satisfied customers.
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This Week in Apps: TikTok viral hit breaks Spotify records, inauguration boosts news app installs, judge rules against Parler
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020.
Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.
Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.
This week, we’re looking into how President Biden’s inauguration impacted news apps, the latest in the Parler lawsuit, and how TikTok’s app continues to shape culture, among other things.
Top Stories
Judge says Amazon doesn’t have to host Parler on AWS
Logos for AWS (Amazon Web Services) and Parler. Image Credits: TechCrunch
U.S. District Judge Barbara Rothstein in Seattle this week ruled that Amazon won’t be required to restore access to web services to Parler. As you may recall, Parler sued Amazon for booting it from AWS’ infrastructure, effectively forcing it offline. Like Apple and Google before it, Amazon had decided that the calls for violence that were being spread on Parler violated its terms of service. It also said that Parler showed an “unwillingness and inability” to remove dangerous posts that called for the rape, torture and assassination of politicians, tech executives and many others, the AP reported.
Amazon’s decision shouldn’t have been a surprise for Parler. Amazon had reported 98 examples of Parler posts that incited violence over the past several weeks before its decision. It told Parler these were clear violations of the terms of service.
Parler’s lawsuit against Amazon, however, went on to claim breach of contract and even made antitrust allegations.
The judge shot down Parler’s claims that Amazon and Twitter were colluding over the decision to kick the app off AWS. Parler’s claims over breach of contract were denied, too, as the contract had never said Amazon had to give Parler 30 days to fix things. (Not to mention the fact that Parler breached the contract on its side, too.) It also said Parler had fallen short in demonstrating the need for an injunction to restore access to Amazon’s web services.
The ruling only blocks Parler from forcing Amazon to again host it as the lawsuit proceeds, but is not the final ruling in the overall case, which is continuing.
TikTok drives another pop song to No. 1 on Billboard charts, breaks Spotify’s record
@livbedumb♬ drivers license – Olivia Rodrigo
We already knew TikTok was playing a large role in influencing music charts and listening behavior. For example, Billboard last year noted how TikTok drove hits from Sony artists like Doja Cat (“Say So”) and 24kGoldn (“Mood”), and helped Sony discover new talent. Columbia also signed viral TikTok artists like Lil Nas X, Powfu, StaySolidRocky, Jawsh 685, Arizona Zervas and 24kGoldn. Meanwhile, Nielsen has said that no other app had helped break more songs in 2020 than TikTok.
This month, we’ve witnessed yet another example of this phenomenon. Olivia Rodrigo, the 17-year-old star of Disney+’s “High School Musical: The Musical: the Series” released her latest song, “Drivers License” on January 8. The pop ballad and breakup anthem is believed to be referencing the actress’ relationship with co-star Joshua Bassett, which gave the song even more appeal to fans.
Upon its release the song was heavily streamed by TikTok users, which helped make it an overnight sensation of sorts. According to a report by The WSJ, Billboard counted 76.1 million streams and 38,000 downloads in the U.S. during the week of its release. It also made a historic debut at No. 1 on the Hot 100, becoming the first smash hit of 2021.
On January 11, “Drivers License” broke Spotify’s record for most streams per day (for a non-holiday song) with 15.17 million global streams. On TikTok, meanwhile, the number of videos featuring the song and the views they received doubled every day, The WSJ said.
Charli D’Amelio’s dance to it on the app has now generated 5 million “Likes” across nearly 33 million views, as of the time of writing.
@charlidamelio♬ drivers license – Olivia Rodrigo
Of course, other TikTok hits have broken out in the past, too — even reaching No. 1 like “Blinding Lights” (The Weeknd) and “Mood” (24kGoldn). But the success of “Drivers License” may be in part due to the way it focuses on a subject that’s more relevant to TikTok’s young, teenage user base. It talks about first loves and being dumped for the other girl. And its title and opening refer to a time many adults have forgotten: the momentous day when you get your driver’s license. It’s highly relatable to the TikTok crowd who fully embraced it and made it a hit.
Weekly News
Platforms: Apple
- Apple stops signing iOS 12.5, making iOS 12.5.1 the only versions of iOS available to older devices.
- A report claims Apple’s iOS 15 update will cut support for devices with an A9 chip, like the iPhone 6, iPhone 6s Plus and the original iPhone SE.
- New analysis estimates Apple’s upcoming iOS privacy changes will cause a roughly 7% revenue hit for Facebook in Q2. The revenue hit will continue in following quarters and will be “material.”
Platforms: Google
- Google adds “trending” icons to the Play Store. New arrow icons appeared in the Top Charts tab, which indicate whether an app’s downloads are trending up or down, in terms of popularity. This could provide an early signal about those that may still be rising in the charts or beginning to fall out of favor, despite their current high position.
- Google appears to be working on a Restricted Networking mode for Android 12. The mode, discovered by XDA Developers digging in the Android Open Source Project, would disable network access for all third-party apps.
Gaming
- Goama (or Go Games) introduced a way for developers to integrate social games into their apps, which was showcased at CES. The company focuses on Asia and Latin America and has more than 15 partners, including GCash and Rappi, for digital payments and communications.
- Fortnite maker Epic Games is getting into movies. The animated feature film Gilgamesh will use Epic’s Unreal Engine technology to tell the story of the king-turned-deity. The movie is not an in-house project, but rather is financed through Epic’s $100M MegaGrants fund.
Augmented Reality
- Patents around Apple’s AR and VR efforts describe how a system could be identified in a way that’s similar to FaceID, then either permitted or denied the ability to change their appearance in the game.
- Pinterest launches AR try-on for eyeshadow in its mobile app using Lens technology and ModiFace data. The app already offered AR try-on for lipsticks.
Entertainment
- The CW app became the No. 1 app on the App Store this week, topping TikTok, Instagram and YouTube, thanks to CW’s season premieres of Batwoman, All American, Riverdale and Nancy Drew.
- Users of podcasting app Anchor, owned by Spotify, say the app isn’t bringing them any sponsorship opportunities, as promised, beyond those from Spotify and Anchor itself.
- YouTube launches hashtag landing pages on the web and in its mobile app. The pages are accessible when you click hashtags on YouTube, not via search, and weirdly rank the “best” videos through some inscrutable algorithm.
- Apple’s Podcasts app adds a new editorial feature, Apple Podcasts Spotlight, meant to increase podcast listening by showcasing the best podcasts as selected by Apple editors.
E-commerce
- WeChat facilitated 1.6 trillion yuan (close to $250 billion) in annual transactions through its “mini programs” in 2020. The figure is more than double that of 2019.
Fintech
- Douyin, the Chinese version of TikTok, launched an e-wallet, Douyin Pay. The wallet will supplement the existing payment options, Alipay and WeChat Pay, and will help to support the Douyin app’s growing e-commerce business.
- Neobank Monzo founder Tom Blomfield left the startup, saying he struggled during the pandemic. “I think [for] a lot of people in the world…going through a pandemic, going through lockdown and the isolation involved in that has an impact on people’s mental health,” he told TechCrunch.
- New estimates indicate about 50% of the iPhone user base (or 507 million users) now use Apple Pay.
- Samsung’s newest phones drop support for MST, which emulates a mag stripe at terminals that don’t support NFC.
Social
- Indian messaging app, StickerChat, owned by Hike, is shutting down. Founder Kavin Bharti Mittal said India will never have a homegrown messenger unless it bars Western companies from its market. Hike pivoted this month to virtual social apps, Vibe and Rush, which it believes have more potential.
- Instagram head Adam Mosseri, in a Verge podcast, said he’s not happy with Reels so far, and how he feels most people probably don’t understand the difference between Instagram video and IGTV. He says the social network needs to simplify and consolidate ideas.
- Facebook and Instagram improve their accessibility features. The apps’ AI-generated image captions now offer far more details about who or what is in the photos, thanks to improvements in image recognition systems.
- TikTok launches a Q&A feature that lets creators respond to fan questions using text or videos. The feature, rolled out to select creators with more than 10,000 followers, makes it easier to see all the questions in one place.
Health & Fitness
- Health and fitness app spending jumped 70% last year in Europe to record $544 million, a Sensor Tower report says. The year-over-year increase is far larger than 2019, when growth was just 37.2%. COVID-19 played a large role in this shift as people turned to fitness apps instead of gyms to stay in shape.
Government & Policy
- Biden’s inauguration boosted installs of U.S. news apps up to 170%, Sensor Tower reported. CNN was the biggest mover, climbing 530 positions to reach No. 41 on the App Store, and up 170% in terms of downloads. News Break was the second highest, climbing 13 positions to No. 65. Right-wing outlet Newsmax climbed 43 spots to reach No. 108. In 2020, the top news apps were: News Break (23.7 million installs); SmartNews (9 million); CNN (5 million); and Fox News (4 million). This month, however, News Break saw 1.2 million installs, followed by Newsmax with about 863,000 installs, the report said.
- Ireland’s Data Protection Commission (DPC) sent a draft decision to fellow EU Data Protection Authorities over the WhatsApp-Facebook data sharing policy. This means a decision on the matter is coming closer to a resolution in terms of what standards of transparency is required by WhatsApp.
- German app developer Florian Mueller of FOSS Patents filed a complaint with the EU, U.S. DOJ and other antitrust watchdogs around the world over Apple and Google’s rejection of his COVID-related mobile game. Both stores had policies to only approve official COVID-19 apps from health authorities. Mueller renamed the game Viral Days and removed references to the novel coronavirus to get the app approved. However, he still feels the stores’ rules are holding back innovation.
Productivity
- Basecamp’s Hey, which famously fought back against Apple’s App Store rules over IAP last year, has launched a business-focused platform, Hey for Work, expected to be public in Q1. The app has more App Store ratings than rival Superhuman, a report found. Currently, Hey has a 4.7-star rating across 3.3K reviews; Superhuman has 3.9 rating across only 274 reviews.
Trends
- Baby boomers are increasingly using apps. Baby boomers/Gen Xers in the U.S. spent 30% more time year-over-year in their most used apps, App Annie reports. That’s a larger increase than either Millennials or Gen Z, at 18% and 16%, respectively.
Funding and M&A
- Curtsy, a clothing resale app for Gen Z women, raised an $11 million Series A led by Index Ventures. The app tackles some of the problems with online resale by sending shipping supplies and labels to sellers, and by making the marketplace accessible to new and casual sellers.
- Storytelling platform Wattpad acquired by South Korea’s Naver for $600 million. The reading apps whose stories have turned into book and Netflix hits will be incorporated into Naver’s publishing platform Webtoon.
- On-demand delivery app Glovo partnered with Swiss-based real estate firm, Stoneweg, which is investing €100 million in building and refurbishing real estate in key markets to build out Glovo’s network of “dark stores.”
- Pocket Casts app is up for sale. The podcast app was acquired nearly three years ago by a public radio consortium of top podcast producers (NPR, WNYC Studios, WBEZ Chicago and This American Life). The owners have now agreed to sell the app, which posted a net loss in 2020. (NPR’s share of the loss was over $800,000.)
- Travel app Maps.me raised $50 million in a round led by Alameda Research. The funding will go toward the launch of a multi-currency wallet. Cryptocurrency lender Genesis Capital and institutional cryptocurrency firm CMS Holdings also participated in the round, Coindesk reported.
- Bangalore-based hyperlocal delivery app Dunzo raised $40 million in a round that included investment from Google, Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada and Alteria.
- London-based food delivery app Deliveroo raised $180 million in new funding from existing investors, led by Durable Capital Partners and Fidelity Management, valuing the business at more than $7 billion.
- Dating Group acquired Swiss startup Once, a dating app that sends one match per day, for $18 million.
Downloads
Bodyguard
Image Credits: Bodyguard
A French content moderation app called Bodyguard, detailed here by TechCrunch, has brought its service to the English-speaking market. The app allows you to choose the level of content moderation you want to see on top social networks, like Twitter, YouTube, Instagram and Twitch. You can choose to hide toxic content across a range of categories, like insults, body shaming, moral harassment, sexual harassment, racism and homophobia and indicate whether the content is a low or high priority to block.
Beeper
Image Credits: Beeper
Pebble’s founder and current YC Partner Eric Migicovsky has launched a new app, Beeper, that aims to centralize in one interface 15 different chat apps, including iMessage. The app relies on an open-source federated, encrypted messaging protocol called Matrix that uses “bridges” to connect to the various networks to move the messages. However, iMessage support is more wonky, as the company actually ships you an old iPhone to make the connection to the network. But this system allows you to access Beeper on non-Apple devices, the company says. The app is slowly onboarding new users due to initial demand. The app works across MacOS, Windows, Linux, iOS and Android and charges $10/mo for the service.
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AWS introduces new Chaos Engineering as a Service offering
When large companies like Netflix or Amazon want to test the resilience of their systems, they use chaos engineering tools designed to help them simulate worst-case scenarios and find potential issues before they even happen. Today at AWS re:Invent, Amazon CTO Werner Vogels introduced the company’s Chaos Engineering as a Service offering called AWS Fault Injection Simulator.
The name may lack a certain marketing panache, but Vogels said that the service is designed to help bring this capability to all companies. “We believe that chaos engineering is for everyone, not just shops running at Amazon or Netflix scale. And that’s why today I’m excited to pre-announce a new service built to simplify the process of running chaos experiments in the cloud,” Vogels said.
As he explained, the goal of chaos engineering is to understand how your application responds to issues by injecting failures into your application, usually running these experiments against production systems. AWS Fault Injection Simulator offers a fully managed service to run these experiments on applications running on AWS hardware.
Image Credits: Amazon / Getty Images
“FIS makes it easy to run safe experiments. We built it to follow the typical chaos experimental workflow where you understand your steady state, set a hypothesis and inject faults into your application. When the experiment is over, FIS will tell you if your hypothesis was confirmed, and you can use the data collected by CloudWatch to decide where you need to make improvements,” he explained.
While the company was announcing the service today, Vogels indicated it won’t actually be available until some time next year.
It’s worth noting that there are other similar services out there by companies, like Gremlin, which are already providing a broad Chaos Engineering Service as a Service offering.
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Twitter taps AWS for its latest foray into the public cloud
Twitter has a lot going on, and it’s not always easy to manage that kind of scale on your own. Today, Amazon announced that Twitter has signed a multi-year agreement with AWS to run its real-time timelines. It’s a major win for Amazon’s cloud arm.
While the companies have worked together in some capacity for over a decade, this marks the first time that Twitter is tapping AWS to help run its core timelines.
“This expansion onto AWS marks the first time that Twitter is leveraging the public cloud to scale their real-time service. Twitter will rely on the breadth and depth of AWS, including capabilities in compute, containers, storage and security, to reliably deliver the real-time service with the lowest latency, while continuing to develop and deploy new features to improve how people use Twitter,” the company explained in the announcement.
Parag Agrawal, chief technology officer at Twitter, sees this as a way to expand and improve the company’s real-time offerings by taking advantage of AWS’s network of data centers to deliver content closer to the user. “The collaboration with AWS will improve performance for people who use Twitter by enabling us to serve Tweets from data centers closer to our customers at the same time as we leverage the Arm-based architecture of AWS Graviton2 instances. In addition to helping us scale our infrastructure, this work with AWS enables us to ship features faster as we apply AWS’s diverse and growing portfolio of services,” Agrawal said in a statement.
It’s worth noting that Twitter also has a relationship with Google Cloud. In 2018, it announced it was moving its Hadoop clusters to GCP.
This announcement could be considered a case of the rich getting richer as AWS is the leader in the cloud infrastructure market by far, with around 33% market share. Microsoft is in second with around 18% and Google is in third with 9%, according to Synergy Research. In its most recent earnings report, Amazon reported $11.6 billion in AWS revenue, putting it on a run rate of over $46 billion.
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