Extra Crunch
Auto Added by WPeMatico
How tech can build more resilient supply chains
Over the past two years, the global supply chain has been hit with two major upheavals: the United States-China trade war and, more cataclysmically, COVID-19.
When Reefknot Investments launched its $50 million fund for logistics and supply chain startups last September, the industry was already dealing with the effects of the tariff war, says managing director Marc Dragon. Then a few months later, the COVID-19 crisis began in China before spreading to the rest of the world, disrupting the supply chain on an unprecedented scale.
Almost all industries have been impacted, from food, consumer goods and medical supplies to hardware.
Reefknot, a joint venture between Temasek, Singapore’s sovereign fund, and global logistics company Kuehne + Nagel, focuses on early-stage tech companies that use AI to solve some of the supply chain’s most pressing issues, including risk forecasting, financing and tracking goods around the world.
In March, around the time the World Health Organization declared the COVID-19 crisis a pandemic, Reefknot surveyed nine shippers about the challenges they face. While there are other macroeconomic factors at play, including Brexit and the oil price war, the survey’s main focus was on the combined effect of COVID-19 and the U.S.-China trade war on the supply chain and logistics industry.
According to the study, the main things shippers want is the ability to dynamically manage supply chain risks and operations and optimize cash flow between corporate buyers and their suppliers, who often struggle with working capital.
Many of the current solutions used in the supply chain involve a lot of manual tasks, including spreadsheets to predict demand, phone calls to confirm capacity on planes and ships and checking goods to make sure orders were fulfilled properly.
Powered by WPeMatico
PopSugar co-founder says pandemic will create ‘a huge windfall’ for digital media
It’s been less than a year since Group Nine Media acquired PopSugar — but it’s been a uniquely challenging time in digital media.
Brian Sugar founded the eponymous women’s lifestyle site with his wife Lisa Sugar . Post-acquisition, he’s become president for the entirety of Group Nine (which also owns Thrillist, NowThis, The Dodo and Seeker) and also joined the company’s board.
That job probably looks very different from what he expected last fall. The company had to lay off 7% of its staff back in April, which Sugar described as “one of the worst days of my career.” At the same time, he remains confident about the online advertising business. In his view, it’s TV advertising that’s taken a “huge punch” in the face and will never recover.
“We like to think of ourselves as one of the fastest, most innovative publishers out there,” Sugar told me. “And now’s the time for us to kind of show that off.”
You can read an edited, updated and condensed transcript of our conversation below, in which I talked to Sugar about how his role has evolved, how he motivates the team during difficult times and what gets lost in the shift to remote work.
TechCrunch: Obviously, it’s been a crazy couple of months since we last talked. What does your job look like now?
Brian Sugar: Well, I feel like a data miner, searching for answers. I feel like a hackathon engineer. And I feel like a therapist. You know, we like to think of ourselves as one of the fastest, most innovative publishers out there. And now’s the time for us to kind of show that off.
[We’ve just been] looking at data on how people are consuming our content across platforms. And on our site, we’ve come up with some really interesting ideas that we’ve implemented. We’ve been having these really cool hackathon Fridays to build stuff quickly, because a lot of people feel like they have a little bit more time on their hands — because you don’t have to travel to meetings, you can get more work done. Some people feel they’re more efficient.
We’re extremely optimistic. All our brands are extremely optimistic, and so is [the whole] company.
You mentioned launching some new products to respond to how audience behavior is changing. Are there any examples?
The first one [is] the PopSugar Fitness thing. We were planning on launching a paid workout subscription service in May, but everybody was working from home [in March], and we decided to pull the launch all the way up to as fast as we can launch it. We launched it that following weekend. Since the launch in late March, over the past few months, we’ve had 200,000 people sign up, and we have 50,000 monthly active users on it.
Powered by WPeMatico
Founders can raise funding before launching a product
It’s possible to raise VC funding even if you haven’t built a real product, according to Charles Hudson, founder and managing partner at seed-stage firm Precursor Ventures. It’s just very, very difficult.
I interviewed Hudson during TechCrunch Early Stage, our virtual event for startup founders. He gave a short talk titled “How to sell an idea when you don’t have a product,” then answered questions from me and from attendees watching at home.
Hudson said Precursor invests in about 25 startups every year and that a majority are pre-launch and pre-traction. So when he’s considering startups where there “isn’t any evidence or traction,” he and other investors are basically considering two things: How well the founder knows the industry, and how well the investors know the founder.
Of course, if you’ve already had success and you know everyone on Sand Hill Road, it might not be that hard to get that first check. But what about everyone else?
Below, I’ve quoted some highlights from Hudson’s thoughts about how to raise money pre-product. You can also watch the full presentation/conversation at the end of this post.
‘You need to have a unique and durable insight that will still be true in 12 to 18 months’
You need to have a unique and durable insight that will still be true in 12 to 18 months … The unique part is important because you still haven’t launched your product yet. And so whatever it is that you’re doing, if it’s not unique, if it’s a really obvious insight, you’ll probably have 10 or 12 competitors that are launched in the market by the time you get your product out.
Powered by WPeMatico
Extra Crunch Live: Join Anu Duggal for a live Q&A on August 20 at 11am PT/2pm ET
Rent the Runway and Glossier became unicorns within the same week in June 2019. That same year, only 2.7% of venture capital dollars went toward female-founded companies.
Silicon Valley’s disconnect between the monetary success of female-founded companies and funding them in the first place is disheartening. The conversation is there, but the dollar sign momentum remains missing.
Anu Duggal founded the Female Founders Fund before both were even a tangible reality. In 2014, the entrepreneur launched her first fund to invest in female-led startups. It took her 700 meetings over two years to make that first close, she said. Years later, venture capital has slightly taken note. But the Female Founders Fund, or “F Cubed,” has tracked female-led wins and bet big on the underestimated asset class.
Her early focus on female founders hasn’t evolved, but the landscape has. And in an unprecedented world of remote deals and democratization of venture capital, we’re even more excited to have Duggal join us on Extra Crunch Live this upcoming Thursday at 11 a.m. PT/2 p.m. EST/6 p.m. GMT
Those tuning in and taking notes are encouraged to ask questions, but you have to be an Extra Crunch member to access the chat. If you still haven’t signed up, now’s your chance! With the subscription, you’ll also be able to check out all of our stellar previous guests on-demand (watch those episodes here).
Female Founders Fund has provided seed institutional capital to entrepreneurs with over $3 billion in enterprise value. The firm has cut checks into women-led companies such as Rent the Runway, Billie, Tala, Peanut, Thrive Global and Zola. The fund has also attracted limited partners like Melinda Gates and Girls Who Code founder Reshma Saujani.
Duggal herself has a fascinating trajectory into technology investing. At 25, she started a wine bar in Bombay called The Tasting Room. She went on to get an MBA from London Business School, and co-founded Exclusively.in, an e-commerce company that got acquired by Indian fashion e-commerce company Myntra in 2011.
Hear from Duggal on August 20 about how the investment landscape has changed for female founders, what she thinks of as a success story and if 2020 feels different than 2014. And Extra Crunch fam, make sure to bring your thoughtful questions for me to ask her live on air.
You can find the full details of the conversation below the jump.
Powered by WPeMatico
Facebook’s former PR chief explains why no one is paying attention to your startup
At TechCrunch Early Stage, I spoke with Coatue Management GP Caryn Marooney about startup branding and how founders can get people to pay attention to what they’re building.
Marooney recently made the jump into venture capital; previously she was co-founder and CEO of The Outcast Agency, one of Silicon Valley’s best-regarded public relations firms, which she left to become VP of Global Communications at Facebook, where she led comms for eight years.
While founders often may think of PR as a way to get messaging across to reporters, Marooney says that making someone care about what you’re working on — whether that’s customers, investors or journalists — requires many of the same skills.
One of the biggest insights she shared: at a base level, no one really cares about what you have to say.
Describing something as newsworthy or a great value isn’t the same as demonstrating it, and while big companies like Amazon can get people to pay attention to anything they say, smaller startups have to be even more strategic with their messaging, Marooney says. “People just fundamentally aren’t walking around caring about this new startup — actually, nobody does.”
Getting someone to care first depends on proving your relevance. When founders are forming their messaging to address this, they should ask themselves three questions about their strategy, she recommends:
- Why should anyone care?
- Is there a purchase order existing for this?
- Who loses if you win?
Powered by WPeMatico
Thoughts on ‘self-driving money,’ day trading and product development from Wealthfront’s Andy Rachleff
Andy Rachleff founded Wealthfront a decade ago to give investors a better and smarter way to manage their wealth, building on core academic research showing that a carefully balanced portfolio of low-fee ETFs outperformed more aggressive strategies. Since then, the company has taken in billions of dollars of invested capital under management and expanded into new banking services, including high-interest checking accounts.
Rachleff and I talked on Extra Crunch Live about where Wealthfront is heading as it speeds toward its second decade, how he sees the competition from other, more active trading platforms like Robinhood and his advice for startup founders looking to build enduring products and companies away from the daily status quo.
Self-driving money*
Rachleff began our conversation talking about the future of Wealthfront, which is increasingly moving beyond its wealth management app to new services.
“Our vision is to automate all of your finances — we call this self-driving money,” he said. That platform is expected to role out in September, and include features like easy direct deposit and automated bill pay, with any savings left over automatically moving to the right investment assets that meet a user’s chosen risk tolerance.
Powered by WPeMatico
Eliminate DevOps waste with Japanese management practices
Co-founder and CTO of Rookout, Liran is an award-winning cybersecurity practitioner and writer who advocates for modern software methodologies.
Across the board, industries need to embrace modern workflows to keep up with the speed of startups. And out of all the various methodologies, I find the “lean methodology” to be the most intriguing of them all. It’s a unique combination of pragmatism and a higher purpose.
Lean methodology descends directly from the Toyota Production Systems (TPS), which is based on a philosophy of eliminating waste to achieve efficiency in processes. It relies heavily on the mindset of “just-in-time,” making only “what is needed when needed, and in the amount needed.” In software development, this means only developing the features your clients need, and only when they need them.
To emphasize the point and stir some creative juices, let’s look at the Japanese concepts of muda, mura and muri, and how this applies to being lean when we are building and shipping software.
Muda, mura and muri
Muda is the “waste” we are working to remove that is directly hurting efficiency. Waste is any activity that doesn’t create value, in the form of the products and services we offer. As every engineer knows, spending half the day in meetings is a painful waste of time.
Mura is “unevenness,” referring to any variance in the process itself or the output generated. In software development, “mura” causes unpredictability that makes it impossible to embrace a “just-in-time” mindset. If the quality of a new upcoming feature is uncertain, then additional time and resources will have to be reserved for quality assurance and bug-fixing efforts. It’s better to know upfront what you are going to get, how long it will take and what the cost will be.
Muri is “overburden,” which happens when we demand the unreasonable from our team, tools and processes. If we want to deliver a specific feature just-in-time, then we must allocate the appropriate time and resources. Giving our engineering teams too many simultaneous tasks, or failing to give them the tools necessary to succeed, will only lead to disappointment in time, quantity, quality or cost.
Forms of waste
Diving deeper into muda — what I consider the cardinal sin of lean methodology — here are the forms of waste we should always be on the lookout for:
- Overproduction – Producing more than is needed, or before it is required. Besides unneeded features, we often over-allocate computing resources, especially in non-cloud environments.
Powered by WPeMatico
Edtech exits are increasing, but by how much?
Before the coronavirus made edtech more relevant, companies in the sector were historically likely to see slow, low exits. Despite successful IPOs by 2U, Chegg and Instructure in the United States, public markets are not crowded with edtech companies.
Some of the largest exits in the space include LinkedIn’s scoop of Lynda for a $1.5 billion in cash and stock and TPG’s purchase of Ellucian for $3.5 billion.
But both of those deals happened in 2015. Five years later, edtech is cooler and surging — but is it seeing exits? Are Lynda and Ellucian one-off success stories?
2U’s co-founder and CEO, Chip Paucek, said he is optimistic.
“We are a rare edtech IPO,” he told TechCrunch last week. “For a long time in edtech it was either ‘sell to Pearson or not.’”
Despite the sector’s slow past, Paucek said now is a good time to start an edtech company because the sector “is finally starting to hit its stride” with more back-end infrastructure and demand for online education.
This morning, let’s use some data to paint a picture of the landscape of edtech exits and bring some balance to this stodgy stereotype.
Boot the growth
There have been approximately 225 acquisitions in edtech between 2003 and 2018, according to Crunchbase data. RS Components sent me a graph in March to contextualize this timeframe a bit more:
Edtech deals over time. Graph credit: RS Components.
Powered by WPeMatico
How to get what you want in a term sheet
One of the most exciting moments in the life of every newly christened founder is the sweet relief of seeing a term sheet come in from an investor. After weeks, perhaps months (but hopefully not years!), of work fundraising and pitching, there is nothing like getting that email with a PDF attached to it laying out the terms and conditions of the VC relationship going forward.
Of course, that rejoicing dampens quickly as all the specific nuances of the deal suddenly come to the forefront. It’s one thing to get the valuation you want, or the amount of capital you are seeking, but what about the setup of the board of directors? What should you do about deal terms that may shape your startup for a decade or more?
The reality of term sheets, as our guest Lior Zorea discusses, is that the terms you agree to early on at a startup tend to be the terms that will carry through for the life of the company. That means getting that first term sheet right is critical for ensuring the financial and capital success of your business.
Powered by WPeMatico
Five success factors for behavioral health startups
Courtney Chow is an associate with Battery Ventures in San Francisco who focuses on early and growth-stage internet, software and services companies.
Justin Da Rosa
Contributor
Contributor
Justin Da Rosa is a vice president with Battery Ventures in San Francisco. He focuses on consumer internet, online marketplace and software investments.
Telehealth, or remote, tech-enabled healthcare, has existed for years in primary medical care through companies like Teladoc (NYSE: TDOC), Doctors on Demand and MDLIVE.
In recent years, the application of telehealth had rapidly expanded to address specific chronic and behavioral health issues like mental health, weight loss and nutrition, addiction, diabetes and hypertension, etc. These are real and oftentimes very severe issues faced by people all over the world, yet until now have seen little to no use of technology in providing care.
We believe behavioral health is particularly suited to benefit from the digitization trends COVID-19 has accelerated. Previously, we’ve written about the pandemic’s impact on online learning and education, both for K-12 students and adult learners. But behavioral health is another area impacted by the fundamental change in consumers’ behavior today. Below are four reasons we think the time is now for behavioral health startups — followed by five key factors we think characterize successful companies in this area.
Telehealth can significantly lower the cost of care
Traditional behavioral healthcare is cost-prohibitive for most people. In-person therapy costs $100+ per session in the U.S., and many mental health and substance-use providers don’t accept insurance because they don’t get paid enough by insurers.
By contrast, telehealth reduces overhead costs and scales more effectively. Leveraging technology, providers can treat more patients in less time with almost zero marginal costs. Mobile-based communications enable asynchronous care that further helps providers scale. Access to digital content gives patients on-going support without the need for a human on the other side. This is particularly useful in treating behavioral health issues where ongoing support and motivation may be necessary.
Technology unlocks supply in “shadow markets” of providers
Globally, we face an extreme shortage of behavioral health providers. For example, the United States has fewer than 30,000 licensed psychiatrists (translating to <1 for every 10,000 people). Outside of big cities, the problem gets worse: ~50-60% of nonmetro counties have no psychologists or psychiatrists at all.
Even when providers are available, wait times for appointments are notoriously long. This is a huge issue when behavioral health conditions often require timely intervention.
We are seeing new platforms build large networks of certified coaches, licensed psychologists and psychiatrists, and other providers, aggregating supply in what has historically been a scarce and a highly fragmented provider population.
Behavioral/mental health issues are losing their stigma
We believe the stigma associated with mental illness and other behavioral health conditions is dissipating. More and more public figures are speaking out about their struggle with anxiety, depression, addiction and other behavioral health issues. Our zeitgeist is shifting fast, and there’s an all-time high in people seeking help as the Google Trends data below demonstrates.
Image Credits: Google
Note: The anomalous dip in March/April ’20 was driven by mandatory shelter-in-place due to COVID-19.
Policy and regulations are changing quickly
Powered by WPeMatico