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Extra Crunch roundup: RapidSOS EC-1, how to prep for an M&A exit, inside Genki Forest
According to one estimate, Americans call 911 about 240 million times every year.
Sending emergency services to the right location sounds straightforward, but each 911 call is routed through one of thousands of call centers known as public safety answering points (PSAPs).
“Every 911 center is very different and they are as diverse and unique as the communities that they serve,” said Karin Marquez, senior director of public safety at RapidSOS.
One PSAP that serves New York City is a 450,000-square-foot, blast-resistant cube set on nine acres, but you also have “agencies in rural America that have one person working 24/7 and they’re there to answer three calls a day,” Marquez noted.
Founded eight years ago, RapidSOS processes more than 150 million emergencies each year across approximately 5,000 PSAPs. The company’s technology helps call centers integrate requests from cell phones, landlines and IoT devices.
“Its technology is almost certainly integrated into the smartphone you’re carrying and many of the devices you have lying around,” Managing Editor Danny Crichton writes in a four-part series that studies the company’s origins and ensuing success:
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Use discount code ECFriday to save 20% off a one- or two-year subscription
- Part 1: The early years and why a consumer app company turned to govtech and integrated services for technology and device companies.
- Part 2: How RapidSOS made its pivot and why its current business model has performed so well.
- Part 3: To transform 911 services, RapidSOS established dozens of corporate and individual partnerships.
- Part 4: Examines the future of 911 and RapidSOS in light of limited infrastructure funding.
“I’ve honestly never met a company like RapidSOS with so many signed partnerships,” says Danny, who initially wrote about the firm six years ago.
“It’s closed dozens of partnerships and business development deals, and with some of the biggest names in tech. How does it do it? This story is about how it built a successful BD engine.”
Thanks very much for reading Extra Crunch this week!
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
How to prepare for M&A, your most likely exit avenue
Image Credits: Reinhard Krull / EyeEm (opens in a new window) / Getty Images
The headlines might be littered with mega deals, IPOs and SPACs, but in all likelihood, you will exit your startup via a relatively smaller merger or acquisition, Ben Boissevain writes in a guest column.
“The IPO market is healthy again, but M&A still represents 88% of exits: So far this year, there were 503 IPOs and 5,203 deals,” writes Boissevain, founder of Ascento Capital.
“While it is good to strive for a billion-dollar-plus sale, a successful IPO or a SPAC deal, it is practical to prepare your startup for a smaller transaction.”
Duolingo boosts IPO price target in boon to edtech startups
Image Credits: Nigel Sussman (opens in a new window)
U.S. edtech company Duolingo bumped up its IPO price range Monday morning, targeting $95 to $100 per share, up from previous guidance of $85 to $95 per share.
“The fact that Duolingo is raising its IPO price range indicates that we are more likely on the path for a strong offering than a weak one,” Alex Wilhelm notes.
Data-driven iteration helped China’s Genki Forest become a $6B beverage giant in 5 years
Image Credits: VCG (opens in a new window) / Getty Images
Many Extra Crunch readers will not have heard of China’s fastest-growing bottled beverage company: Genki Forest is a direct-to-consumer startup that started selling its sodas, milk teas and other products just five years ago.
Today, its products are available in 40 countries and the company hopes to generate revenue of $1.2 billion in 2021. After closing its latest funding round, Genki Forest is valued at $6 billion.
Industry watchers frequently compare the upstart to giants like PepsiCo and Coca-Cola, but founder Binsen Tang comes from a tech background, having funded ELEX Technology, a social gaming company that found success internationally.
“China doesn’t need any more good platforms,” Tang told his team in 2015, “but it does need good products.”
Leveraging China’s robust distribution network, lighting-fast manufacturing capabilities and a vast pool of data that enables holistic digitization, Genki Forest sells more than 30% of its products online.
“Everything feels right about the company,” said VC investor Anna Fang. “The space, the founder, the products and the back end … they exemplify the new Chinese consumer brand.“
Sequoia’s Mike Vernal outlines how to design feedback loops in the search for product-market fit
Sequoia’s Mike Vernal joined us on TechCrunch Early Stage: Marketing and Fundraising to discuss how founders should approach product-market fit, with a specific focus on tempo.
It doesn’t mean fast in the kind of uncontrolled, reckless, crashing sense. It means fast in a sort of consistent, maniacal, get-a-little-bit-better-each-day kind of way. And it’s actually one of the top things that we look for, at least when evaluating a team: How consistently fast they move.
As China shakes up regulations, tech companies suffer
Image Credits: Nigel Sussman (opens in a new window)
Alex Wilhelm spent the end of last week and the beginning of this one looking at Chinese regulations targeting its edtech sector, aiming to understand “precisely what is going on with the various regulatory changes.”
“For startups, the regulatory changes aren’t a death blow; indeed, many Chinese tech startups won’t be affected by what we’ve seen thus far,” he writes. “But on the whole, it feels like the risk profile of doing business in China has risen.”
Automakers have battery anxiety, so they’re taking control of the supply
Image Credits: Porsche AG
To ensure a steady supply of batteries, automakers are increasingly looking to joint ventures.
“Like if you’re VW, and you say, ‘We’re going to go 50% electric by whatever year,’ but then the batteries don’t show up, you’re bankrupt, you’re dead,” Sila Nano CEO Gene Berdichevsky said in a recent interview.
“Their scale is so big that even if their cell partners have promised them to deliver, automakers are scared that they won’t.”
Pro tips from the team behind Kickstarter’s most funded app
Image Credits: AndreyPopov / Getty Images
The team at memoryOS “spent countless hours researching down the rabbit hole of crowdfunding tips and tricks” before it successfully became the most-funded app on Kickstarter, the company’s CEO, Alex Ruzh, writes in a guest column.
“We’re sharing our approach (and secrets) to building a successful crowdfunding campaign because we know just how tough it can be to launch your own product,” he writes.
SOSV partners explain how deep tech startups can fundraise successfully
Startups developing so-called deep tech often find it challenging to raise capital for various reasons.
At TechCrunch Early Stage: Marketing and Fundraising, two experienced investors, SOSV partners Pae Wu and Garrett Winther, spoke on the subject and advised startups facing a challenging fundraising path.
Checkout is the key to frictionless B2B e-commerce
Image Credits: Dilok Klaisataporn (opens in a new window)
Processing payments, credit and authorizations for B2B purchases is all handled electronically, but that’s not a panacea.
For example, volume sellers prefer to work through traditional accounts payable systems instead of paying the service fees smaller companies accept as the cost of doing business.
However, the combination of fraud and identity protection with credit handling and digital payments “creates a powerful network, the type that can not only build trust but enable one-click transactions at scale,” says Andrew Steele, an investor at Activant Capital.
Cowboy Ventures’ Ted Wang: CEO coaching is ‘about having a second set of eyes’
At TechCrunch Early Stage: Marketing and Fundraising, Cowboy Ventures’ Ted Wang spoke about why he encourages founders in his portfolio to work with executive coaches.
I don’t think you need to limit advice from people who are “been there, done that.” I think it is really important to get input from those people, but in terms of personal development, I think you want insight from people who understand how human beings listen and learn and grow.
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Fluent Forever raises $4.9M for its language learning system
Fluent Forever, a startup that uses a novel learning system to help its users master a new language faster, has raised a $4.9 million funding round led by Denver-based Stout Street Capital. Other investors in this round include The Syndicate, LAUNCH, Mana Ventures, Noveus VC, Flight.VC, Insta VC, UpVentures, Firebrand Ventures, Cultivation Capital, Spero Ventures and Lofty Ventures.
In many ways, Fluent Forever is a direct competitor to Duolingo, Babbel and similar online language learning services. What sets it apart is a focus on a personalized learning system that emphasizes ear training, visual aids and something akin to spaced-repetition for helping you memorize new words and phrases. It’s a paid service (after a 14-day free trial) with subscriptions starting at $10 per month for a monthly subscription and the usual discounts for longer-term commitments.
To teach himself his first languages, the company’s founder and CEO Gabriel Wyner used the popular flashcard service Anki, wrote a book about his approach, and taught workshops on language learning using his system with Anki. But as he noted, Anki is a serious tool, and simply learning how to get the most out of it takes a lot of time and energy.
Image Credits: Fluent Forever
“I’ve watched everyone else fail at language learning,” he told me. “And the first thought is, okay, well, if you just learn how to do it right, then that’s a fixable thing. That’s exciting. And then once you have a solution for people and they’re all excited about it — but then you watch them fail because of IT reasons. That’s extra frustrating.”
In many ways then, Fluent Forever uses Wyner’s flashcard approach — because building those flashcards by hand is at the core of his learning system — and turns it into a far-easier-to-use application.
What people want, Wyner acknowledged, is a tool where you just press some buttons and learn something. But that doesn’t work. “I had to have a really strong reaction to this — a really strong answer — and say, ‘absolutely not. That is the one thing that teaches you is building it.’ ”
Wyner is not afraid to compare his approach to Duolingo’s and argues that its focus on translation exercises doesn’t translate to real language skills in the long run. At the same time, he freely acknowledges that the Duolingo user experience and gamification are far better than Fluent Forever. But he also believes that learners see far better results with his system.
Image Credits: Fluent Forever
“We ask [our users]: ‘Why are you with us? Why would you pay for us when you could just get Duolingo for free?” What they come back with is, ‘yeah, your product is rough around the edges. I wish you would fix this, this and that, but you had me thinking in Spanish in two weeks,” Wyner said.
Fluent Forever currently supports nine languages: Japanese, French, Russian, Mexican and Spanish Spanish, Italian, Korean, German and Brazilian Portuguese, with Dutch being the next language the team is tackling.
As Wyner told me, the company had trouble raising in 2019, in part because the service was seeing pretty flat growth at the time. “People are very skeptical about language learning — that is not a sexy field. People don’t like it. The idea of jumping and trying to be competitive with Duolingo was just not appealing to anyone,” he told me. Come 2020, though, growth picked up, even before the COVID pandemic. At the same time, Fluent Forever also participated in Jason Calacanis’ Launch Accelerator.
Looking ahead, Wyner tells me that Fluent Forever is looking at ways to bring live tutors into the loop. Live tutoring online has been done before, of course, and there are some companies like Preply that specialize in it already, but what Fluent Forever wants to do is combine the online language learning service with short live sessions and then use the online component to go back to that conversation over the course of a week or so. One advantage here is that these users — who will likely pay a premium for the live service — will also use their time with live tutors to create their own personalized sentences in the Fluent Forever system, which could then over time become content that’s available to all users, too.
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Five key lessons from founders who launched social impact startups
Shannon Farley is co-founder and executive director at Fast Forward, a tech accelerator for social impact startups.
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From healthcare, to education, to human rights, tech has the potential to drive social impact at scale. In this moment of global pandemic, growing economic insecurity and an uprising against racial injustice, the need for scalable solutions is greater than ever. But there are lessons we’ve seen founders learn the hard way time and again.
In the spirit of reaching impact at scale faster, we rounded up our top five lessons to take to heart if you want to turn your world-changing idea into a tech nonprofit. Distilled from The Tech Nonprofit Playbook, a free guide to starting a social impact startup, we drew from the learnings of tech nonprofits whose work has transformed their sectors.
1. Get to know the problem intimately
You have a big idea. You’ve identified a social problem you can’t help but try to fix, and you think you just might have a world-changing, tech-driven solution. But you can’t solve the issue you’ve identified without a deep understanding of the community you’re serving. Not doing so is a recipe for failure. If you haven’t lived the problem, bring on a co-founder who has. Then, go meet others who have firsthand experience with the problem. Interview these individuals with a user-centered lens to allow insights and opportunities to reveal themselves.
To see this in action, consider Upsolve, the TurboTax for chapter 7 bankruptcy, helping low-income Americans recover from crippling financial crises. During their user research phase, the co-founders asked brick and mortar legal aid organizations for their waitlists, and passed out their cards in legal aid clinics where people were seeking help around debt lawsuits. These strategies enabled Upsolve to consider a broad sample of perspectives and develop a deep understanding of the problem from the users’ point of view. Don’t skimp on this — your user research should inspire and inform your initial product idea.
2. Build a tech for good product, but don’t start from scratch
Now, it’s time to put your product idea to the test by piloting a minimum viable product, or MVP — an early version of a product that surfaces learnings about your users with little effort. Your MVP needn’t be a fully fleshed-out product. In Upsolve’s case, it was a physical space where they helped users file for bankruptcy in real life. Run a small-scale pilot of your MVP to confirm, deny or alter your hypothesis. Once you’ve piloted your MVP for enough time that you’re confident you have a viable solution, it’s time to build a beta product.
To build your beta product, or an almost ready-to-launch product, leverage existing tech solutions to address your new use case — don’t start from scratch. For Upsolve, it was a Typeform, an online plug-and-play form. From less technical products like website and communication tools, to more technical ones like app development tools, databases and APIs, piecing together existing tech building blocks will drive your startup costs down and ultimately make it easier to maintain your product. With your solution out in the world, build user feedback into your product as you continue testing, refining and iterating to more closely serve your mission.
3. Learn the art of nonprofit judo
Being a tech nonprofit comes with a pretty unique set of advantages that, when leveraged, are what we like to call nonprofit judo. A critical nonprofit judo tactic is forging aligned partnerships with other organizations, funders and companies to create mutually beneficial relationships that drive sustainability for your tech nonprofit and increase user acquisition.
Take CareerVillage.org, which crowdsources career advice for millions of underserved youth. For the first few years, recruiting volunteers and fundraising each took a lot of the founding team’s time. But a solution arose when they learned that Fortune 500 companies were looking for easy and scalable volunteering programs for their employees. CareerVillage.org built a sustainable “earned income” revenue model centered around volunteering engagements for corporate employees.
This nonprofit judo has become a major driver of the organization’s rapid growth. Win-win.The Tech Nonprofit Playbook digs into more strategic advantages nonprofits can leverage, and shares real-world examples of nonprofit judo. Rather than going into your tech nonprofit journey imagining an uphill battle, turn the scenario around by tapping into the unique opportunities it presents.
4. Your people will make or break your organization
To achieve your mission, find the people who believe in your cause and can help you get there.
Most importantly, find a complementary co-founder early on who is either technical or an issue expert. Co-founders fill in each other’s gaps, distribute the work and build a strong foundation for the team.
Next, focus on hiring talented, mission-driven people (they exist!) who can help you build and scale. This doesn’t mean hiring as many people as possible once you have the funding for it — something CommonLit, the free reading platform for students, learned the hard way. After winning a $4 million grant, founder Michelle Brown raced to hire 15 people in 40 days. After the fact, Brown realized that you cannot hire people as individuals, you must hire a team. The individuals powering your organization will define what it becomes. Choose wisely.
5. Be intentional about how you measure impact
Impact is a tech nonprofit’s true north. Before you can get down to creating impact, you have to figure out your “who” and your “why,” or distribution ethics. Distribution ethics, the framework shared by Josh Nesbit, founder of Medic Mobile, is the concept that deciding who you are going to help and why they need your help over others is an ethical stance — and will impact everything you do as an organization.
When Nesbit first launched Medic Mobile, the organization was implementing healthcare tools in partnership with on-the-ground organizations. In doing so, he was providing tools to local partners who already had human and financial capital. Nesbit realized this framework wasn’t reflective of his moral stance — he wanted to help those with the least access to medical care. This realization helped him refocus the organization and redefine its product vision to serve those most in need. Since then, Medic Mobile has been building open-source tools that enable a decentralized network of community health workers to deliver effective last-mile healthcare. And it has made a huge impact: Last year, Medic Mobile supported a global network of 27,477 health workers, which provided more than 11 million services for their community.
As you grow, be intentional about how you measure your impact. Impact measurement dictates your organization’s architecture by aligning your work with the value you want to create for the world. It’s a critical practice that not only centers your output around your mission, but helps you raise support for your work through funding and partnerships.
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Edtech startups prepare to become ‘not just a teaching tool but a necessity’
As Stanford, Princeton, Columbia and others shutter classrooms to limit the coronavirus outbreak, college educators around the country are clambering to move their classes online.
At the same time, tech companies that enable remote learning are finding a surge in usage and signups. Zoom Video Communications, a videoconferencing company, has been crushing it in the stock market, and Duolingo, a language teaching app, has had 100% user growth in the past month in China, citing school closures as one factor.
But Kristin Lynn Sainani, an associate professor of epidemiology and population health at Stanford, has a fair warning to those making the shift: scrappiness has its setbacks.
“[The transition to online] is not going to be well planned when you’re doing it to get your class done tomorrow,” said Sainani, who has been teaching online classes since 2013. “At this point, professors are going to scramble to do the best they can.”
As the outbreak spreads and universities respond, can edtech startups help legacy institutions rapidly adopt online teaching services? And perhaps more tellingly, can they do so in a seamless way?
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Waze now shows road toll prices along your driving route
Navigation app Waze is making getting to where you’re going even easier — or at least more transparent. A new feature rolling out today will show you any tolls along your route, including the actual amount you’re going to pay, across both the U.S. and Canada.
This is above and beyond what you’ll get in most navigation apps, where you might get a visual or text indicator that there is a toll on one of the roads in your path (and you can opt to avoid them if possible) but you won’t know what you’re actually paying. With Waze, you’ll get the amount — sourced from its community of user-drivers, rather than direct from the official toll road operators — but Waze’s crowd-sourced navigation data often has a leg up on the official source in other cases.
Waze will show you the toll prices up front, too, before the navigation actually gets under way, which is great, because that’s when you actually have the opportunity to do something about it, whether it’s scrounging seat-cushion change or just choosing to drive a different way.
This will be rolling out beginning today, so keep an eye out if you’re trying to get somewhere in the U.S. or Canada.
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Security startup Bugcrowd on crowdsourcing bug bounties: ‘Cybersecurity is a people problem’
For a cybersecurity company, Bugcrowd relies much more on people than it does on technology.
For as long as humans are writing software, developers and programmers are going to make mistakes, said Casey Ellis, the company’s founder and chief technology officer in an interview TechCrunch from his San Francisco headquarters.
“Cybersecurity is fundamentally a people problem,” he said. “Humans are actually the root of the problem,” he said. And when humans made coding mistakes that turn into bugs or vulnerabilities that be exploited, that’s where Bugcrowd comes in — by trying to mitigate the fallout before they can be maliciously exploited.
Founded in 2011, Bugcrowd is one of the largest bug bounty and vulnerability disclosure companies on the internet today. The company relies on bug finders, hackers, and security researchers to find and privately report security flaws that could damage systems or putting user data at risk.
Bugcrowd acts as an intermediary by passing the bug to the companies to get fixed — potentially helping them to dodge a future security headache like a leak or a breach — in return for payout to the finder.
The greater the vulnerability, the higher the payout.
“The space we’re in is brokering conversations between different groups of people that don’t necessarily have a good history of getting along but desperately need to talk to each other,” said Ellis.
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Company raises $347K ICO, vanishes
A company called Confido raised a small ICO by selling special CFD designed to allow “safe and trustless cryptocurrency payments. According to ICODrops they raised their goal of about $400,000 and quickly disappeared, taking the cash with it. The site is currently a parked web server that points to nothing. The apparent founder and former eBay employee, Joost van Doorn, posted a message to… Read More
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Google partners with VCs to host its own machine learning startup competition
On the heels of acquiring data science community Kaggle, Google is launching a machine learning competition of its own for startups. Google is targeting early-stage companies taking an innovative approach to machine learning. The competition is being run in partnership with seven venture capital firms. Read More
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With a $1.5M seed round, Eloquent Labs mixes AI and Mechanical Turk to fix customer service
Keenon Werling would be the first to agree that conversational AI is regularly overhyped. So instead of taking the traditional approach and gloating about a glitzy new deeper learning algorithm to pitch his new venture Eloquent Labs, Werling instead opted to differentiate by optimizing something far more low-tech, people. The startup’s special sauce is embracing a mix of AI,… Read More
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Five industries that should take a cue from Netflix and crowdsource parts of its tech
By crowdsourcing for solutions using machine learning to utilize the abundant data available across these five industries, we can find relevant signals and patterns among the noise and make these industries not only more efficient, but also more integral to improving our lives. Read More
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