coronavirus
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This startup reworked its privacy-friendly sensors to help battle COVID-19
One little-known home and retail automation startup might seem like an unlikely candidate to help combat the ongoing pandemic. But its founder says its technology can do just that, even if it wasn’t the company’s original plan.
Butlr, a spin-out of the MIT Media Lab, uses a mix of wireless, battery-powered hardware and artificial intelligence to track people’s movements indoors without violating their privacy. The startup uses ceiling-mounted sensors to detect individuals’ body heat to track where a person walks and where they might go next. The use cases are near-endless. The sensors can turn on mood-lighting or air conditioning when it detects movement, help businesses understand how shoppers navigate their stores, determine the wait-time in the queues at the checkout and even sound the alarm if it detects a person after-hours.
By using passive infrared sensors to detect only body heat, the sensors don’t know who you are — only where you are and where you’re heading. The tracking stops as soon as you leave the sensor’s range, like when you leave a store.
The technology is in high demand. Butlr says some 200,000 retail stores use its technology, not least because it’s far cheaper than the more privacy-invading — and expensive — alternatives, like surveillance cameras and facial recognition.
But when the pandemic hit, most of those stores closed — as effectively did entire cities and nations — to counter the ongoing threat from of COVID-19. But those stores would have to open again, and so Butlr got back to work.
Butlr’s privacy-friendly body heat sensors don’t know who you are — only where you are. Now the company is retooling its technology to help combat coronavirus. (Image: Butlr)
Butlr’s co-founder Honghao Deng told TechCrunch that it began retooling its technology to help support stores opening again.
The company quickly rolled out new software features — like maximum occupancy and queue management — to help stores with sensors already installed cope with the new but ever-changing laws and guidance that businesses had to comply with.
Deng said that the sensors can make sure no more than the allowed number of people can be in a store at once, and make sure that staff are protected from customers by helping to enforce social distancing rules. Customers can also see live queue data to help them pick a less-crowded time to shop, said Deng.
All these things before a pandemic might have sounded, frankly, a little dull. Fast-forward to the middle of a pandemic and you’re probably thankful for all the help — and the technology — you can get.
Butlr tested its new features in China at the height of the pandemic’s rise in February, and later rolled out to its global customers, including in the United States. Deng said Butlr’s technology is already helping customers at furniture store Steelcase, supermarket chain 99 Ranch Market and the Louvre Museum in Abu Dhabi to help them reopen while minimizing the risk to others.
It’s a pivot that’s paid off. Last month Butlr raised $1.2 million in seed funding, just as the pandemic was reaching its peak in the United States.
Nobody knew a pandemic was coming, not least Deng. And as the pandemic spread, businesses have suffered. If it wasn’t for quick thinking, Butlr might’ve been another startup that succumbed to the pandemic.
Instead, the startup is probably going to help save lives — and without compromising anyone’s privacy.
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The future of work is human
Heather Hartnett is general partner and CEO of Human Ventures, an early-stage venture fund and startup studio in New York City.
More posts by this contributor
Human Ventures builds and invests in what we call the “human needs economy,” which encompasses products and services that address material human problems — specifically those in the areas of health and wellness, the future of work and community. This spring, our Humans in the Wild cohort program brought together a group of exceptional entrepreneurs, building companies within health and wellness. This fall, we are excited to call upon entrepreneurs who are building companies reimagining the way in which we, as humans, work. Applications are open here.
The human needs economy is the future. Throughout the last few decades, fundamental shifts in technology and human behavior have impacted the nature and life cycle of the “traditional” professional journey — and that disruption has started to shape a new labor economy. The past decade specifically has brought significant technological advancements that help humans work more efficiently, and share and organize information at scale. However, those technological advances are now starting to outpace the human condition, creating a society weary of automation, one that finds individuals searching for their place and purpose in an increasingly competitive and fast-paced labor market.
As COVID-19 saw boardrooms go dark, turning homes into makeshift offices, nascent trends were forced into prominence. Abruptly, the labor force was newly eager for innovative solutions to help them thrive in the new normal. But there is a long way to go before this new normal feels normal. There’s much work to be done to help the human needs economy not just survive this seismic shift, but to use it as an advantage.
Human Ventures has identified four areas of opportunity best positioned to serve the human side of work over the next decade:
Image Credits: Human Ventures (opens in a new window)
If you are building in these areas, we would love to connect with you.
1. New work environments
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All B2B startups are in the payments business
Jeff Coppolo has over 25 years of experience in the fintech industry and is currently Head of Global Business Development and Partnerships for payments processing company BlueSnap.
The COVID-19 pandemic has forced businesses to rethink how they accept and make payments. Paper invoices, checks and point-of-sale payments have given way to “corona-free payments” through mobile apps, electronic invoicing and ACH. Although significant, this is the sideshow to a more significant reshuffling of the payments industry.
Nearly $150 trillion in worldwide B2B and B2C transactions take place every year, but only a tiny portion are digital. A lot of technology companies want their piece of that massive pie. Until recently, though, only payment facilitators (aka, “payfacs”), gateways, banks and credit card companies had access to it.
That’s changing. Whether they know it yet or not, B2B tech platforms are becoming payments companies. Payfacs are competing to integrate their technology into these platforms, which drive an ever-growing number of transactions. Revenue-sharing deals are on the table, and payfacs are pushing the competitive advantages they can offer to the clients of these B2B platforms. Capabilities like cross-border payments, seamless customer onboarding, fraud protection, marketplace payments and B2B invoicing influence, which payfacs win in “integrated payments” (the jargon for this space) and which don’t.
B2B companies that use to leave the choice of gateway to their clients need to become savvy in payment technology, both to control the user experience and to tap this new business. There’s a massive amount of revenue on the table, and it’s just too easy to blow this opportunity and alienate clients in the process.
How we arrived here
A decade ago, the revolution in cloud computing led to a wave of B2B tech platforms promising to “disrupt” every industry. Gyms got gym management platforms. Hospitals got clinic management platforms. Retailers got commerce management platforms. Media companies got subscription management platforms. Many of these fill-in-the-blank management platforms — all independent software vendors (ISVs) — helped clients manage their operations and interactions with consumers or other businesses.
But ISVs didn’t get involved in payments, which was odd, given how complementary payments were to their platforms and how much money was at stake. Mastercard says there is about $120 trillion annually in B2B payments worldwide, and paper checks still dominate about half of the U.S.’s $25 trillion payment volume. Meanwhile, retail e-commerce sales account for $4.2 trillion out of $26 trillion in total retail, or about 16.1%, according to eMarketer. Less than 8% of global commerce is thought to occur online.
You’d think B2B software companies would find a way to generate revenue on some of that $146 trillion in transactions, but most did not. Payment processing is its own, messy, complicated niche. Payfacs go through a grueling underwriting process to provision a merchant account, which includes know-your-customer (KYC) and anti-money laundering (AML) checks. If a merchant defaults, the payfac is next in line to make good on the transactions.
When you run a venture-backed B2B platform, you have enough to worry about already.
So, B2B platforms stayed clear. They formed integrations with a basket of payfacs (Stripe, PayPal, Square, my company BlueSnap, etc.) and then let their clients choose which one to use. That’s a lot of integrations to maintain.
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Roblox launches Party Place, a private venue for virtual birthday parties and other meetups
The coronavirus pandemic and related government lockdowns have led to a surge in online gaming — particularly on social platforms where people can connect with real-life friends in a virtual venue. We’ve already heard of Fortnite birthday parties, Roblox playdates and Animal Crossing meetups taking place online amid the pandemic. Now, Roblox is launching a new feature called “Party Place” to directly cater to the growing demand among users for a dedicated, private place to host virtual events.
The company’s new “Party Place” venue is based on the technology the gaming company built to accommodate its own virtual events, including its 7th Annual Bloxy Awards and the One World: Together At Home concert, hosted in April in collaboration with Lady Gaga.
The venue itself doesn’t offer any activities or games, but rather serves as a private place for Roblox users to gather — for example, for a virtual birthday party, a remote learning activity with classmates, for virtual playdates, or anything else. From Party Place, the group can chat and hang out as they decide which Roblox game they plan to play next.
The product is in beta testing, according to the Roblox website, and has seen only around 45.3,000 visits since its launch last week. Likely, many of these visits were just from curious kids poking around in a public area as you can today join the Party Place venue without a private server if you want to just see the venue. Roblox, however, says it’s making private servers available for free in Party Place, so parents and kids can create a place where only those friends they directly invite can join and play.
Roblox has been doing particularly well as the pandemic has forced children to stay at home under lockdown. The entertainment platform now has more than 120 million active monthly players and, as of June, surpassed a milestone of $1.5 billion in lifetime player spending, according to a report from Sensor Tower. It hit the new record only seven months after reaching its $1 billion milestone — a surge in consumer spend attributed directly to the global COVID-19 pandemic and the related growth in entertainment platforms and social gaming.
In March, Roblox revenue grew 28% month-over-month to $69.8 million, the report found. In April, revenue grew 34% to $93.2 million. And by May, sales hit close to $103 million.
Roblox had already begun catering to players’ interest in social gaming with its launch of its “Play Together” game sort in April, which made it easier for players to find those games where you socialize with others — like visiting a virtual shopping mall, going camping or riding virtual water slides, for example. These games also offer an option for private VIP servers, often for a small fee paid in Roblox’s virtual currency, Robux, which is renewed on a subscription basis until you cancel.
Of course, the company isn’t the only one developing products in response to user demand for online “hangout” spots in virtual worlds. Fortnite, for instance, introduced “Party Royale,” a game mode offering a weapons-free party island featuring mini-games and, sometimes, even live concerts. Its Travis Scott concert was hosted in the game, attracting 12.3 million concurrent players at its peak.
For today’s younger players — the COVID kids, so to speak — platforms like Fortnite and Roblox are becoming their own version of a social network. The kids don’t just go online to play. They socialize, chat and hang out with a mix of real-life friends and virtual ones, blurring the lines between online and offline in ways that traditional social networks, like Facebook, do not.
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COVID-19 has driven engagement for an already thriving gaming industry
A few days after releasing new figures for the month of June, NPD is offering up some broader trends for the gaming industry at large. It likely won’t surprise you to hear that the industry continues to thrive in 2020, and COVID-19-driven stay-at-home orders have only further contributed to gaming adoption here in the U.S.
According to the report, three out of four people in the U.S. play some amount of video games. That’s 244 million people — up by 32 million from 2018. Among those who play, 39% are light gamers, playing less than five hours a week; 32% are classified as moderate, at five to 15 hours, and 20% play more than 15 hours a week, putting them in the heavy camp. On average, gamers surveyed play around 14 hours a week, up from the 12 hours reported in 2018.
The novel coronavirus has driven adoption, as gaming sales have suggested for several months now. Of those surveyed, 35% say they’re playing more than they were prior to pandemic restrictions. Though most are simply playing on non-gaming-specific devices they already owned — primarily things like smartphones, tablets and computers.
Only 6% of respondents say they began gaming on a new platform. The relatively low figure seems to reflect some of the dire economics of the last several months. Few were purchasing new consoles. In the case of the Switch, Nintendo ran into some serious supply issues that have found the console out of stock in many online stores. Microsoft and Sony, meanwhile, are launching new systems before the end of the year, meaning current systems will be outdated in the not so distant future.
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Extension rounds help some startups play offense during COVID-19
The venture capital world is constantly changing, and its evolution can sometimes flip pieces of conventional wisdom on their heads. For example, a recent flurry of extension rounds from Silicon Valley’s hottest startups like Stripe and Robinhood seem to signal that the investment type has suddenly become cool.
Extensions evolving from unloved to hot is not the first time that a type of VC deal has gained, or lost luster. In past times, for example, raising consecutive rounds from the same lead investor was often perceived as a negative signal; why couldn’t the startup find a new, different lead investor? Today, in contrast, venture capitalists are using inside rounds to double-down on winning startups, a way of helping ensure returns for their own backers.
The recent phenomenon of extensions becoming vogue is a tale of the times, in which the best startups get to play offense, and startups that can’t show accelerating growth are left behind. Let’s explore what has changed.
A series of fortunate extensions
TechCrunch first wrote about the new extension-round trend after seeing what felt like a wave of the deals crop up. Some were large, like MariaDB’s huge $25 million add-on to its Series C, or Robinhood’s biblical $320 million addition to its Series F.
But most were smaller events like Sayari adding $2.5 million to its Series B, or CALA adding $3 million to its seed round. Even more recently, Eterneva raised another $3 million on top of its seed round, and also out this week was a million pounds more for Edinburgh-based Machine Labs’ seed round.
One reason for the growth of extension rounds in 2020 has been runway — making sure that a startup has enough. Upstarts often raise on an 18-month cadence. But because of COVID-19 and its constituent economic disruptions, many have reduced costs in a bid to bolster how long they have until their cash stores reach zero.
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Game developer poll suggests longer hours and less productivity as the industry adapts to remote work
Ahead of the upcoming online-only version of its big annual conference, GDC commissioned a survey of 2,500 game developers to determine how the industry is coping with the ongoing impact of the COVID-19 pandemic. While gaming sales are up as many turn to the medium to cope with stay-at-home orders, the virus appears to be impacting devs in similar (if somewhat blunted) fashion to innumerable other industries.
For starters, 32% find themselves being less productive, in spite of working longer hours. That no doubt sounds familiar to anyone who has attempted to transition to a home office amid the pandemic. Some 70% of developers say they’ve moved to working from home — if that number seems relatively low, that’s only because 27% of those surveyed say they were already working from home. That leaves some 3% in the office, I suppose.
One-quarter of respondents say their household income has declined, while a third say their business has declined over the last few months. A third also say they’ve had a project delayed. That could certainly complicate the upcoming schedules of the latest version of the Xbox and PlayStation, both due out at the end of the year.
The shift toward moving online found many companies scrambling to update their workflows, including a shift to different cloud services. Though, the nature of the industry means that many were already accustomed to having a distributed workforce prior to the pandemic. While two-thirds say their company has a plan to return to the office, only 12% feel safe returning to the office right now.
The majority of respondents added that they believe the pandemic will permanently change some aspect of their workplace, going forward. “We had to make some changes on our daily tasks to compensate not being at our office working physically together, but those have proven to increase our efficiency and productivity,” one developer responded. “Lately we have even talked about embracing the home office configuration even after the pandemic.”
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Benchmark-backed Optimizely confirms it has laid off 15% of staff
Optimizely, a San Francisco-based startup that popularized the concept of A/B testing, has laid off 15% of its staff, the company confirmed in a statement to TechCrunch. The layoff impacts around 60 people, and those laid off were given varied levels of severance. Each employee was given six months of COBRA and was allowed to keep their laptops.
“As with so many other businesses globally, Optimizely has been impacted by COVID-19. Today, we have had to make a heartbreaking decision to reduce the size of our workforce,” Erin Flynn, chief people office, wrote in a statement to TechCrunch, adding that “today’s difficult decision sets up our business for continued success.”
The startup was founded in 2009 by Dan Siroker and Pete Koomen on the idea that it helps to have customers experience different versions of the website, also known as A/B testing, to see what iteration sticks best. A year after founding, the startup went through Y Combinator and in 2013 it signed a lease for a 56,000-square-foot office in San Francisco.
Optimizely last raised $50 million in Series D financing from Goldman Sachs, bringing its total venture capital secured to date to $200 million. Other investors include Index Ventures, Andreessen Horowitz and GV.
In June, Optimizely said it handles more than 6 billion events a day. Customers include Visa, BBC, IBM, The Wall Street Journal, Gap, StubHub and Metromile.
Optimizely was not listed as applying for a PPP loan, a program created by the government to help businesses avoid laying off staff. The loans were met with controversy in Silicon Valley, as some thought venture-backed businesses should turn to investors, instead of the government, for extra capital.
Optimizely’s layoffs are somewhat surprising, given recent earnings reports that show that enterprise SaaS companies have broadly benefited from the coronavirus pandemic. In an online work world, infrastructure and software services become more vital by the day. Box, for example, helps people manage content in the cloud and it beat expectations on adjusted profit and revenue. So why is Optimizely struggling?
There are a ton of reasons for layoffs beyond what the market thinks about a business. Optimzely’s customers are a mix of heavy-hitters in enterprise, but also include businesses that have struggled during this pandemic, including StubHub and Metromile — both of which had layoffs.
While the pace of layoffs is slowing down, cuts themselves aren’t disappearing. As the stocks show us, it’s a volatile time and businesses are looking for ways to stay financially safe.
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VidMob rethinks video production in the pandemic era
VidMob, which started out as a marketplace connecting marketers and video editors, now bills itself as a “creative technology platform.” Now there’s a “creator network” that’s part of a broader suite of tools for managing video production and turning those videos into online ads.
And the company has continued to evolve during the COVID-19 pandemic. Founder and CEO Alex Collmer told me that how customers use the platform has changed substantially in recent months. For example, he said that one of the platform’s “best skills” involved taking existing footage — including footage shot for TV commercials — and other creative assets and turning them into social media ads. But of course, “Over the last few months, all physical shoots were canceled.”
So Collmer said that rather than simply treating VidMob as a social media advertising tool, brands are increasingly turning to the startup for a way to manage remote video production. The result is that the company saw 100% year-over-year “logo growth” (a.k.a. new customers) in the first quarter, and then grew another 50% in Q2.
“What we have seen here is the acceleration of the digital transformation of the enterprise,” he said. “Pretty much every client we have, every marketer we talk to is looking very seriously at how to move all their creative operations onto some sort of unifying software platform, so that they feel safe in the event that they continue to have to work in a remote environment, and to be more efficient with existing media.”
One of those gin brand Monkey 47, whose brand lead Jennifer Schwartz said in a statement, “We have worked multiple times with VidMob as they quickly and efficiently help a lean and nimble brand like ours get out our message to millions of consumers.”
Another client is Citi, whose Chief Brand Officer Carla Hassan told me her team has been working with VidMob since last year. She said that as as a result of the pandemic, like many marketers, “We were required to really be flexible and adjust and scale programs quickly.”
For example, in response to the #InItTogether hashtag, Citi used VidMob to create a series of inspirational videos showcasing the work of its employees — such as Mihir in the video above, who was 3D printing protective equipment for his communities.
“As we thought about how we told the stories, we realized that your colleagues are some of the most important heroes that you have,” Hassan said.
According to Citi, the videos have been viewed nearly 250,000 times since the campaign launched in early May, with 80% of that viewing on LinkedIn.
And although dealing with the initial pandemic and shutdown was difficult enough, the news keeps coming, with protests for racial justice, a COVID-19 resurgence, resulting closures and more.
“We’re going to be in a period of uncertainty for a while, but to be honest, I see that as an opportunity,” Hassan said. “Brands who understand what their consumers want, brands who are tuned into the cultural zeitgeist, brands [who] pivot quickly to create content that is relevant and engaging and drive business KPIs … that will be what wins in the future.”
Similarly, Collmer said that in a period of uncertainty, brands need to respond more quickly, rather than simply falling silent: “Shutting up and going away is not a great way to position yourself.”
Update: This post has been updated to correctly identify the executive at Citi and to include a quote from Monkey 47.
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FlexJobs CEO Sara Sutton on what newly remote companies tend to get right and wrong
Over the last few months, just about any tech company that can go remote has gone remote.
Are companies adopting remote for the long haul, or is it just a holdover until they can get people back in the office? What are newly remote companies getting wrong or right in the transition? If a company is going to be sticking with a remote workforce, what can they do to make their roles more enticing and to build a better culture?
FlexJobs CEO Sara Sutton has been thinking about remote work for longer than most. She founded FlexJobs in 2007 — at a time when she herself was looking for a more flexible job — as a platform tailored specifically for jobs that didn’t keep you in an office all day. In 2015 she also founded Remote.co, a knowledge base for remote companies and employees to share the lessons they’ve learned along the way.
I recently got a chance to chat with Sara about her views and insights on remote work. Here’s the transcript of our chat, lightly edited for brevity and clarity.
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