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Lime hires its first chief business officer amid push into car-sharing
After four months “on the beach,” per his LinkedIn profile, Uber’s former global head of business and corporate development has a new gig. Lime has hired David Richter (pictured) as its first-ever chief business officer and interim chief financial officer.
Based in San Francisco, Richter will be overseeing the bike- and e-scooter-sharing startup’s business operations. Richter spent more than four years at Uber leading the ride-hailing giant’s global business development, corporate development, experiential marketing, autonomous vehicle alliances and brand relevance teams. He left in May after expressing frustrations with a series of departures in his group, according to The Information.
“As Lime continues to grow, David will bring in unparalleled expertise, particularly in the realm of business development and corporate partnerships, as well as in managing our overall business strategy and deal flow,” Lime co-founder and chief executive officer Toby Sun said in a statement. “His leadership experience, coupled with his keen understanding of the fast-moving shared mobility industry will be a huge advantage to our company as we continue to expand our global footprint.”
Lime is said to be completing the fundraising circuit right now, asking investors for a valuation north of $3 billion. The company, which entered the unicorn club in June, has raised a total of $467 million to date from GV, Andreessen Horowitz, IVP, Section 32, GGV Capital and more.
The company is using the buckets of capital to expand beyond bikes and scooters. Last Monday, rumors emerged that it was planning a brick-and-mortar push. The company confirmed that it would indeed build scooter “lifestyle stores” in major U.S. and international markets, starting with Santa Monica, Calif.
The next day on stage at the JD Power Automotive Roundtable, Lime announced its official foray into car-sharing. The company has since applied for a car-sharing permit in Seattle and plans to rent out small electric vehicles, which it’s calling “transit pods,” by the end of the year.
According to Axios, Lime plans to spend $50 million on the pods, which will cost $1 for consumers to start, plus an additional 40 cents per minute.
“You can expect electric vehicles to be an additional micro-mobility option for Lime riders to choose from within the Lime app soon,” a spokesperson for Lime said in a statement provided to TechCrunch. “More details on timing, specs of the vehicle, locations for the first rollout, etc. will be announced in the coming weeks.”
Lime launched in 2017 and has since recorded 11.5 million scooter and bike rides.
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Facebook poaches leaders of Refdash interview prep to work on Jobs
Facebook just snatched some talent to fuel its invasion of LinkedIn’s turf. A source tells TechCrunch that members of coding interview practice startup Refdash including at least some of its executives have been hired by Facebook. The social network confirmed to TechCrunch that members of Refdash’s leadership team are joining to work on Facebook’s Jobs feature that lets business promote employment openings that users can instantly apply for.
Facebook’s big opportunity here is that it’s a place people already browse naturally, so they can be exposed to Job listings even when they’re not actively looking for a company or career change. Since launching the feature in early 2017, Facebook has focused on blue-collar jobs like service and retail industry jobs that constantly need filling. But the Refdash team could give it more experience in recruiting for technical roles, connecting high-skilled workers like computer programmers to positions that need filling. These hirers might be willing to pay high prices to advertise their job listings on Facebook, siphoning revenue away from LinkedIn.
Facebook confirms that this is not an acquisition or technically a full acquihire, as there’s no overarching deal to buy assets or talent as a package. It’s so far unclear what exactly will happen to Refdash now that its team members are starting at Facebook this week, though it’s possible it will shut down now that its leaders have left for the tech giant’s cushy campuses and premium perks. Refdash’s website now says that “We’ve temporarily suspended interviews in order to make product changes that we believe will make your job search experience significantly better.”
Founded in 2016 in Mountain View with an undisclosed amount of funding from Founder Friendly Labs, Refdash gave programmers direct qualitative and scored feedback on their coding interviews. Users would do a mock interview, get graded, and then have their performance anonymously shared with potential employers to match them with the right companies and positions for their skills. This saved engineers from having to endure grueling interrogations with tons of different hirers. Refdash claimed to place users at startups like Coinbase, Cruise, Lyft, and Mixpanel.
A source tells us that Refdash focused on understanding people’s deep professional expertise and sending them to the perfect employer without having to judge by superficial resumes that can introduce bias to the process. It also touted allowing hirers to browse candidates without knowing their biographical details, which could also cut down on discrimination and helps ensure privacy in the job hunting process (especially if people are still working elsewhere and are trying to be discreet in their job hunt).
It’s easy to imagine Facebook building its own coding challenge and puzzles that programmers could take to then get paired with appropriate hirers through its Jobs product. Perhaps Facebook could even build a similar service to Refdash, though the one-on-one feedback sessions it’d conduct might not be scalable enough for Menlo Park’s liking. If Facebook can make it easier to not only apply for jobs but interview for them too, it could lure talent and advertisers away from LinkedIn to a product that’s already part of people’s daily lives.
The co-founders of Refdash have something of a track record in building companies that get acquihired to help add new features to existing services. Nicola Otasevic and Andrew Kearney were respectively the founder and tech lead for Room 77, which was picked up by Google in 2014 to help rebuild its travel search vertical. At the time it was described as a licensing deal although Refdash’s founders these days call it an acquisition.
Building tools to improve the basic process of hiring via remote testing could help Facebook get an edge on technical recruiting, but it’s not the only one building such features. LinkedIn’s stablemate Skype (like LinkedIn, owned by Microsoft) last year unveiled Interviews to let recruiters test developers and others applying for technical jobs with a real-time code editor. LinkedIn has not (yet?) incorporated it into its platform.
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Recent departures hint at turmoil at Quartet Health, a mental health startup backed by GV
Backed with nearly $87 million in venture capital funding from GV, Oak HC/FT and F-Prime Capital, Quartet Health was founded in 2014 by Arun Gupta, Steve Shulman and David Wennberg to improve access to behavioral healthcare. Its mission: “enable every person in our society to thrive by building a collaborative behavioral and physical health ecosystem.”
Recent shakeups within the New York-based company’s c-suite and a perusal of its Glassdoor profile suggest Quartet’s culture is not fully in line with its own philosophy.
In the last few weeks, chief product officer Rajesh Midha has left the company and president and chief operating officer David Liu is on his way out, TechCrunch has learned and confirmed with Quartet. Founding chief executive officer Arun Gupta, meanwhile, has stepped into the executive chairman role, relinquishing responsibility of the company’s day-to-day operations to former chief science officer David Wennberg, who’s taken over as CEO.
“I’m focusing on our external growth,” Gupta told TechCrunch on Friday. “David has really stepped up as CEO.”
Gupta and Wennberg said Liu’s role was no longer needed because Wennberg had assumed his responsibilities. Liu will formally exit the company at the end of the month. As for its product chief, the pair say Midha had “transitioned out” of the role and that an unnamed internal candidate was tapped to replace him.
When asked whether other employees had left in recent weeks, Wennberg provided the following indeterminate statement: “We are always having people coming in. I don’t think we’ve had any unusual turnover. We’re hiring and people’s roles change and that’s just part of growth.”
Quartet, which provides a platform that allows providers to collaborate on treatment plans, currently has 150 employees, according to its executives.
In a LinkedIn status update published this week — after TechCrunch’s initial inquiries — Gupta announced his transition to executive chairman:
“Still full-time, though focused largely on our opportunity to further evangelize our mission, [I will] drive the change we want to see in this world, and expand our reach … I have tremendous confidence in David’s ability to lead our many talented Quartetians to deliver this next phase.”
Several former employees seemed less than pleased with Gupta’s performance, writing in a number of Glassdoor reviews that he was “abominable,” “kind of a monster” and “by far the worst executive.”
When asked for comment on those reviews, Gupta and Wennberg shrugged it off: “Glassdoor is Glassdoor.” They agreed its important to pay attention to but impossible to vet.
Gupta began his career as a management consultant at McKinsey and served as a consultant to The World Bank before joining Palantir, Peter Thiel’s data-mining company, as an advisor in 2014. Wennberg, for his part, was the CEO of The High Value Healthcare Collaborative, a consortium of 15 healthcare delivery systems, before co-founding Quartet.
In January, Quartet raised a $40 million Series C to expand throughout the U.S. F-Prime Capital and Polaris Partners led the round, with participation from GV and Oak HC/FT. The financing valued the company at $300 million, according to PitchBook.
As part of the funding, Quartet announced it was adding three new directors to its board: F-Prime’s executive partner Carl Byers; Ken Goulet, an executive vice president at health insurance provider Anthem; and former Rackspace CEO and BuildGroup co-founder Lanham Napier. Other outside board members include Oak HC/FT’s managing partner Annie Lamont, GV partner Krishna Yeshwant, Polaris managing partner Brian Chee and former U.S. Congressman Patrick Kennedy.
Quartet previously raised a $40 million Series B in April 2016 led by GV. The investment marked the venture capital investment arm of Google’s first in a mental health startup. Before that, the startup brought in a $7 million Series A led by Oak HC/FT’s managing partner Annie Lamont.
For now, Quartet remains committed to growth.
“We learn from what we are doing and we continue to learn,” Wennberg said. “That is part of growth. It’s hard and you just keep working and growing because we have a huge mission.”
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LinkedIn steps into business intelligence with the launch of Talent Insights
LinkedIn may be best known as a place where people and organizations keep public pages of their professional profiles, using that as a starting point for networking, recruitment and more — a service that today that has racked up more than 575 million users, 20 million companies and 15 million active job listings. But now under the ownership of Microsoft, the company has increasingly started to build a number of other services; today sees the latest of these, the launch of a new feature called Talent Insights.
Talent Insights is significant in part because it is LinkedIn’s first foray into business intelligence, that branch of enterprise analytics aimed at helping execs and other corporate end users make more informed business decisions.
Talent Insights is also notable because it’s part of a trend, where LinkedIn has been launching a number of other services that take it beyond being a straight social network, and more of an IT productivity tool. They have included a way for users to look at and plan commutes to potential jobs (or other businesses); several integrations with Microsoft software including resume building in Word and Outlook integrations; and adding in more CRM tools to its Sales Navigator product.
Interestingly, it has been nearly a year between LinkedIn first announcing Talent Insights and actually launching it today. The company says part of the reason for the gap is because it has been tinkering with it to get the product right: it’s been testing it with a number of customers — there are now 100 using Talent Insights — with employees in departments like human resources, recruitment and marketing using it.
The product that’s launching today is largely similar to what the company previewed a year ago: there are two parts to it, one focused on people at a company, called “Talent Pool,” and another focused on data about a company, “Company Report.”
The first of these will let businesses run searches across the LinkedIn database to discover talent with characteristics similar to those what a business might already be hiring, and figure out where they are at the moment (in terms of location and company affiliation), and where they are moving, what skills they might have in common, and how to better spot those who might be on the way up based on all of this.
The second set of data tools (Company Report) provides a similar analytics profile but about your organisation and those that you would like to compare against it in areas like relative education levels and schools of the respective workforces; which skills employees have or don’t have; and so on.
Dan Francis, a senior product manager running Talent Insights, said in an interview that for now the majority of the data that’s being used to power Talent Insights is primarily coming from LinkedIn itself, although there are other data sources also added into it, such as material from the Bureau of Labor Statistics. (And indeed, even some of LinkedIn’s other data troves, for example in its recruitment listings, or even in its news/content play, the material that populates both comes from third parties.)
He also added that letting companies feed in their own data to use that in number crunching — either for their own reports or those of other companies — “is on our roadmap,” an indication that LinkedIn sees some mileage in this product.
Adding in more data sources could also help the company appear more impartial and accurate: although LinkedIn is huge and the biggest repository of information of its kind when it comes to professional profiles, it’s not always accurate and in some cases can be completely out of date or intentionally misleading.
(Related: LinkedIn has yet to launch any “verified”-style profiles for people, such as you get on Facebook or Twitter, to prove they are who they say they are, that they work where they claim to work, and that their backgrounds are what they claim them to be. My guess as to why that has not been rolled out is that it would be very hard, if not impossible, to verify everything in a clear way, and so LinkedIn relies on the power of public scrutiny to keep people mostly honest.)
“We’re pretty transparent about this,” said Francis. “We don’t position this as a product as comprehensive, but as a representative sample. Ensuring data quality is good is something that we are careful about. We know sometimes data is not perfect. In some cases it is directional.”
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Inside the pay-for-post ICO industry
In a world where nothing can be trusted and fake news abounds, ICO and crypto teams are further muddying the waters by trying – and often failing – to pay for posts. While bribes for blogs is nothing new, sadly the current crop of ICO creators and crypto projects are particularly interested in scaling fast and many ICO CEOs are far happier with scammy multi-level marketing tricks than real media relations.
The worst part of this spammy, scammy ecosystem is the service providers. A new group of media organizations are appearing where pay-to-post is the norm rather than the rare exception. I’ve been looking at these groups for a while now and recently found a few egregious examples.
But first some background.
Oh yeah, Mr. Smart Guy? How do I get press?
Say you’re trying to publicize a startup. You’ve emailed all the big names in the industry and the emails have gone unanswered. Your product is about to flounder on the market without users and you can’t get any because, in perfect chicken-or-egg fashion, you can’t get funding without users and you can’t get users without funding. So isn’t it a good idea to pay a few dollars for a little press?
No.
And isn’t most PR just pay-for-post anyway?
No.
PR people are consummate networkers and are paid to reach out to media on your behalf and their particular set of skills, honed over long careers, are dedicated to breaking down the forcefield between the journalist and the outside world. They are your surrogate hustlers, dedicated to getting you more exposure. A good PR person is worth their weight in gold. They can call up a popular journalist and make a simple pitch: “This cool new thing is happening. Can I put you in touch?”
If a journalist’s mission is to afflict the comfortable and comfort the afflicted, a good PR person makes the comfortable look slightly afflicted in order to give the journalist a better story. Also, like velociraptors, they are tenacious and will follow up multiple times on your behalf.
A bad PR person, on the other hand, will cold-call hundreds of journalists and read a script that is half the length of Moby Dick. They produce little more than spam and their efforts begin and end with pressing the “Send” button. It’s also interesting to note that many bad PR people, of late, have found new life as ICO specialists.
Now meet the pay-for-post hucksters. As I wrote before, there is now a subset of the PR world that offers to get your press release or story on the top of various websites for the low, low price of between $500 and $13,000. For example, one set of hucksters created a small business selling posts on Harvard.edu by creating garbage WordPress blogs and posting press releases to increase SEO coverage. Further, I received a document that outlined the prices for placement in various blogs including this one. While it is impossible to buy a post on TechCrunch this way, it doesn’t stop many from trying.
What’s the difference between that price list and the job a PR person will do for you? The difference is trust. A pay-for-post huckster is dependent on convincing poorly paid freelance writers to add links and other dross to their posts in order to get a “placement.” I get requests like this almost every day and almost all the journalists I talked to reported the same.
Some entrepreneurs are savvy enough to avoid these scams. Even more aren’t.
“I’ve never paid since I think it’s almost always a waste of money but I’ve been offered this type of coverage many times,” said Rick Ramos, of HealthJoy.com. “The last offer was for Kathy Ireland’s Worldwide Business… A TV show that I’ve never heard of in my life. I’ve also been approached by niche publications like InsuranceOutlook and HealthCareTechOutlook that want $3,000 for a ‘reprint branding package.’ A quick Alexa.com search shows their rank as 1,725,207 and 1,054,501 globally. I think I get pitched at least every six months for one of these types of packages.
Unfortunately, many of these organizations hide their request for payment until the last minute. That said, how do you know when it’s someone selling pay-for-play vs. a real editor? It’s usually obvious.
“It’s usually pretty easy to sniff out based on their email blast. It’s pretty untargeted with no reference to what your company does or how it related to a story. Some people are up front about the payment but others want a ’15 min call to discuss.’ A quick LinkedIn search always shows them as a sales person versus a reporter or editor,” said Ramos.
It’s getting worse
This is a document I received from a company attempting an ICO. This sort of menu was quite uncommon until fairly recently when the “on-demand” economy melded with PR scammers. The completeness of the document is unique – you could feasibly plan your own PR efforts just by reaching out to journalists who work at all of these places. But you’ll also note that each spot has its own price, often in the low hundreds of dollars, which means that those spots are mostly pay-for-play anyway.
ICOLists by on Scribd
No PR company can promise coverage. In fact, many pay-for-play folks mention this in their communications, hiding it in plain sight. This snippet of text appeared in a contract for work from one of the pay-for-play providers. In short, you’re paying for something they cannot guarantee to get. Interestingly, the PR company below calls their product an IO – an insertion order – which is language used in ad sales. Further, they take great pains in explaining that it is almost impossible to achieve what they promise.
None of the pay-for-post folks I mentioned here would respond to my requests for comment.
Counter-point: Journalists are also at fault
Journalists should never expect money for coverage.
Yet many do.
“Lately I have worked on a number of blockchain technology pieces and I have encountered a wide variety of these asks,” said Brittany Whitmore, CEO at Exvera Communications. “A lot of the new, smaller blockchain-focused outlets seem to do a lot of pay-to-play, likely trying to capitalize on the ICO gold rush. The strangest request that I received was that the outlet would do a an article about the news for free but only if we paid them over $1,000 to promote the article with ads. I did not proceed.”
In one very detailed article on The Outline, Jon Christian explored this world and found that many writers received small sums for a single brand mention in a story, a sort of SEO flogging that rarely helps. He wrote:
An unpaid contributor to the Huffington Post, also speaking on condition of anonymity because, in his words, “I would be pretty fucked if my name got out there,” said that he has included sponsored references to brands in his articles for years, in articles on the Huffington Post and other sites, on behalf of six separate agencies. Some agencies pay him directly, he said, in amounts that can be as small as $50 or $175, but others pay him through an employee’s personal PayPal account in order to obfuscate the source of the funds. In a statement, Huffington Post said “Using the HuffPost Contributors Network to self-publish paid content violates our terms of use. Anyone we discover to be engaging in such abuse has their post removed from the site and is banned from future publication.”
The Huffington Post writer also described specific brands he’d written about on behalf of one of the agencies, which ranged from a popular ride-hailing app, to a publicly-traded site for booking flights and hotels, to a large American cell phone service provider.
“This is a classic example of payola,” he said of the brand mentions, invoking a term that’s been used to describe radio DJs who accept payments from record companies in order to play certain artists on the air.
Further, many influencers – folks who sell their Internet fame to the highest bidder – masquerade as journalists, asking for outrageous sums to flog an ICO on their YouTube channel or Instagram page. Pay-for-play services can also put out organic content like this in hopes of appearing in the news.
The rule of thumb? Paid posts and native advertising are not journalism. Ultimately, journalists who charge for coverage are marketers. No one at any reputable news organization will ask for cash but, sadly, there are a number of disreputable news organizations making the rounds.
ICO spamming/Don’t do it
All this still doesn’t answer the question: Should you pay-to-post?
“The short answer is no,” said Kevin Bourke of BourkePR. “I get asked all the time, and in fact, turned down another request just today. And I advise my clients to decline these offers as well.”
Pay-for-post disrupts journalism in a way that should be familiar and desirable to any modern-day entrepreneur. Middlemen are being knocked out everywhere and brands are approaching consumers from every angle including native ads in Instagram and Twitter. But the value of coverage – real coverage – from a journalists perspective is the opportunity to explain complex ideas to a ready audience. While posting a picture of a blockchain on Facebook and hoping for clicks is one strategy, explaining your views, opinions, and insights is far more important even if you approach it from a mercenary position.
“When you start paying for placement, you remove objectivity and credibility, and in my opinion, this is the reason you look for coverage of your company/products in the first place. That’s what influences readers/viewers. But I understand the temptation for startups. You come to believe that ‘all visibility is good visibility.’ I just can’t agree with that,” said Bourke. “I see the trend toward paid placements (now called sponsored content), paid awards and I can’t stand it – especially with the trade show awards in high tech. They’ve completely devalued the Best of Show awards in so many cases. Typically, only the big companies with budgets can afford them, so many of the smaller guys with no money but amazing products get left out. I understand that the publishing industry needs to figure out new revenue streams – these are very difficult times for them. But they need to figure out smarter business models and maintain the integrity of editorialized content, built on the opinions and perspectives of journalists and influencers.”
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Security, privacy experts weigh in on the ICE doxxing
In what appears to be the latest salvo in a new, wired form of protest, developer Sam Lavigne posted code that scrapes LinkedIn to find Immigration and Customs Enforcement employee accounts. His code, which basically a Python-based tool that scans LinkedIn for keywords, is gone from Github and Gitlab and Medium took down his original post. The CSV of the data is still available here and here and WikiLeaks has posted a mirror.
“I find it helpful to remember that as much as internet companies use data to spy on and exploit their users, we can at times reverse the story, and leverage those very same online platforms as a means to investigate or even undermine entrenched power structures. It’s a strange side effect of our reliance on private companies and semi-public platforms to mediate nearly all aspects of our lives. We don’t necessarily need to wait for the next Snowden-style revelation to scrutinize the powerful — so much is already hiding in plain sight,” said Lavigne.
Doxxing is the process of using publicly available information to target someone online for abuse. Because we can now find out anything on anyone for a few dollars – a search for “background check” brings up dozens of paid services that can get you names and addresses in a second – scraping public data on LinkedIn seems far easier and innocuous. That doesn’t make it legal.
“Recent efforts to outlaw doxxing at the national level (like the Online Safety Modernization Act of 2017) have stalled in committee, so it’s not strictly illegal,” said James Slaby, Security Expert at Acronis. “But LinkedIn and other social networks usually consider it a violation of their terms of service to scrape their data for personal use. The question of fairness is trickier: doxxing is often justified as a rare tool that the powerless can use against the powerful to call attention to perceived injustices.”
“The problem is that doxxing is a crude tool. The torrent of online ridicule, abuse and threats that can be heaped on doxxed targets by their political or ideological opponents can also rain down on unintended and undeserving targets: family members, friends, people with similar names or appearances,” he said.
The tool itself isn’t to blame. No one would fault a job seeker or salesperson who scraped LinkedIn for targeted employees of a specific company. That said, scraping and publicly shaming employees walks a thin line.
“In my opinion, the professor who developed this scraper tool isn’t breaking the law, as it’s perfectly legal to search the web for publicly available information,” said David Kennedy, CEO of TrustedSec. “This is known in the security space as ‘open source intelligence’ collection, and scrapers are just one way to do it. That said, it is concerning to see ICE agents doxxed in this way. I understand emotions are running high on both sides of this debate, but we don’t want to increase the physical security risks to our law enforcement officers.”
“The decision by Twitter, Github and Medium to block the dissemination of this information and tracking tool makes sense – in fact, law enforcement agents’ personal information is often protected. This isn’t going to go away anytime soon, it’s only going to become more aggressive, particularly as more people grow comfortable with using the darknet and the many available hacking tools for sale in these underground forums. Law enforcement agents need to take note of this, and be much more careful about what (and how often) they post online.”
Ultimately, doxxing is problematic. Because we place our information on public forums there should be nothing to stop anyone from finding and posting it. However, the expectation that people will use our information for good and not evil is swiftly eroding. Today, wrote one security researcher, David Kavanaugh, doxxing is becoming dangerous.
“Going after the people on the ground is like shooting the messenger. Decisions are made by leadership and those are the people we should be going after. Doxxing is akin to a personal attack. Change policy, don’t ruin more lives,” he said.
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Reid Hoffman to talk ‘blitzscaling’ at Disrupt SF 2018
When it comes to scaling startups, few people are as accomplished or consistently successful as Reid Hoffman .
While the rest of us consider scaling a startup to market domination a daunting task, Hoffman has continued to make it look easy.
In September, Hoffman will join us at TC Disrupt SF to share his strategies on “blitzscaling,” which also happens to be the title of his forthcoming book.
Hoffman started out his Silicon Valley career at PayPal, serving as EVP and a founding board member. In 2003, Hoffman founded LinkedIn from his living room. LinkedIn now has more than 500 million members across 200 countries and territories across the world, effectively becoming a necessity to the professional marketplace.
Hoffman left LinkedIn in 2007, but his contributions to the company certainly helped turn it into the behemoth it is today, going public in 2011 and selling to Microsoft for a whopping $26.2 billion in 2016.
At Disrupt, he’ll outline some of the methodology behind going from startup to scale up that is outlined in his new book, Blitzscaling, co-authored with Chris Yeh:
Blitzscaling is a specific set of practices for igniting and managing dizzying growth; an accelerated path to the stage in a startup’s life-cycle where the most value is created. It prioritizes speed over efficiency in an environment of uncertainty, and allows a company to go from “startup” to “scaleup” at a furious pace that captures the market.
Drawing on their experiences scaling startups into billion-dollar businesses, Hoffman and Yeh offer a framework for blitzscaling that can be replicated in any region or industry. Readers will learn how to design business models that support lightning-fast growth, navigate necessary shifts in strategy at each level of scale, and weather the management challenges that arise as their company grows.
Today, Hoffman leads Greylock Partners’ Discovery Fund, where he invests in seed-stage entrepreneurs and companies. He currently serves on the boards of Airbnb, Convoy, Edmodo and Microsoft. Hoffman’s place in the VC world is a natural continuation of his angel investing. His angel portfolio includes companies like Facebook, Flickr, Last.fm, and Zynga.
Hoffman has also invested in tech that affects positive change, serving on the non-profit boards of Biohub, Kiva, Endeavor, and DoSomething.org.
Blitzscaling marks Hoffman’s third book (others include The Startup of You and The Alliance) and we’re absolutely thrilled to have him teach us a thing or two at Disrupt SF.
Tickets to Disrupt SF are available now right here.
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ServiceTitan is LA’s least likely contender to be the next billion-dollar startup
The city of Glendale, Calif. seems like an unlikely place to grow one of the next billion-dollar startups in the booming Los Angeles tech ecosystem.
Located at the southeastern tip of the San Fernando Valley, the Los Angeles suburb counts its biggest employers as the adhesive manufacturer Avery Dennison; the Los Angeles industrial team for the real estate developer CBRE; the International House of Pancakes; Disney Consumer Products; DreamWorks Studios; Walt Disney Animation and Univision. “Silicon Beach” this ain’t.
But it’s here in the (other) Valley’s southernmost edge that investors have found a startup they consider to be the next potential billion-dollar “unicorn” that will come out of Los Angeles. The company is ServiceTitan, and its market… is air conditioners.
More specifically, it’s the contractors that service equipment like the heating, ventilation and cooling systems at commercial and residential properties across the U.S.
Founded by Ara Mahdessian and Vahe Kuzoyan in 2012, ServiceTitan is very much an up-and-coming billion-dollar business that’s a family (minded) affair.
Mahdessian and Kuzoyan met on a ski trip organized by the Armenian student associations at Stanford and the University of Southern California back when both men were in college.
Both programmers, the two reconnected after doing stints as custom developers during and after college, and then when they were developing tools for their families’ businesses as residential contractors in the Los Angeles suburb of Glendale.
The two men built a suite of services to help contractors like their fathers manage their businesses. Now following a $62 million round of funding led by Battery Ventures last month, the company is worth roughly $800 million, according to people with knowledge of the investment, and is on its way to becoming Los Angeles’ next billion-dollar business.
Battery isn’t the only marquee investor to find value in ServiceTitan’s business developing software managing day labor.
Iconiq Capital, the investment firm managing the wealth of some of Silicon Valley’s most successful executives (the firm counts Facebook chief executive Mark Zuckerberg, and senior staff like Dustin Moskovitz and Sheryl Sandberg; Twitter chief Jack Dorsey; and LinkedIn founder and chief executive Reid Hoffman among its clients, according to a 2014 Forbes article), has also taken a shine to the now-gargantuan startup from Glendale.
It was Iconiq that put a whopping $80 million into ServiceTitan just last year — and while the 2017 cash infusion may have been larger, the company’s valuation has continued to rise.
That’s likely due to a continually expanding toolkit that now boasts a customer relationship management system, efficient dispatching and routing, invoice management, mobile applications for field professionals and marketing analytics and reporting tools.
“ServiceTitan’s incredibly fast growth is a testament to the brisk demand for new mobile and cloud-based technology that is purpose-built for the tradesmen and women in our workforce,” said Battery Ventures general partner Michael Brown — who’s taking a seat on the ServiceTitan board.
What distinguishes the ServiceTitan business from other point solutions is that they’ve taken to targeting not mom-and-pop small businesses but franchises like Mr. Rooter and George Brazil. Gold Medal Service, John Moore Services, Hiller Plumbing, Casteel Air, Baker Brothers Plumbing and Air Conditioning and Bonney may not be household names, but they’re large providers of contractors who work under those brands.
The company counts 400 employees on staff, and will look to use the money to continue to grow out its suite of products and services, according to a March statement announcing the funding.
And as Battery Ventures investor Sanjiv Kalevar noted in a blog post last year, the opportunity for software companies serving blue-collar workers is huge.
For people sitting at our desks and working behind laptops on programs like Microsoft Office, it can be easy to overlook the large, sometimes forgotten, workforce out there in construction, manufacturing, transportation, hospitality, retail and many other multi-billion dollar industries. Indeed, more than 60% of U.S. workers and even more globally fall into these “blue collar” industries.
By and large, these workers have not benefitted much from recent technology improvements available to office-based workers—think new email and workplace-collaboration technologies, or advanced sales and HR systems. Never mind the long-term opportunities for companies in these sectors from technologies like artificial intelligence, drones, and virtual or augmented reality; hourly and field workers are dealing with much more basic on-the-job challenges, like finding work, getting their jobs done on time and getting paid. These more basic needs can be solved with seemingly simple technologies—software for billing, scheduling, navigation and many other business workflows. These kinds of technologies, unlike AI, don’t automate away workers. Instead, they empower them to be more efficient and productive.
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GIF search is coming to LinkedIn messaging through Google’s GIF engine Tenor
Tenor is now going to exclusively power GIF searches in LinkedIn messaging after Google a few weeks ago, adding yet another service to its already pretty large portfolio of messaging platforms.
Tenor has long positioned itself as a GIF search tool working across a number of different platforms, ranging from its own keyboard to Facebook Messenger. As such, it wasn’t a huge surprise that Google — a search platform — decided to acquire the company toward the end of march. Tenor at the time said it powered more than 12 billion GIF searches every month, and that kind of search volume fits pretty neatly with Google’s quest to index the world’s information in a way that’s easily searchable. LinkedIn adds another component to that Swiss army knife, and it also gives Google another entry point to a different platform when it comes to some variation of GIF search.
The new engine is available for 50% of users today, and will be rolling out to more users over time. This gives LinkedIn messenger a robust GIF search platform, as well as ways to find trending GIFs, as well as a custom trending stream based on GIFs most often found in their network.
GIFs are increasingly popular in messaging apps, and Tenor is one example of how it’s become almost table stakes for any messenger platform. While LinkedIn is mostly a place where you’d expect to be closing deals and acquiring customers — or searching for a job — it doesn’t really change the core value proposition of what a GIF provides. Companies like Tenor seek to position GIFs as a way to compress more information (or some kind of emotion) into a compact form factor that has very little friction inside a messenger platform.
Tenor is going to exclusively power the GIF search engine, which is going to be another pretty substantial win for Google as it looks to expand its search capabilities into other areas of the Internet — even if it’s just a consumer-oriented GIF format. Tenor can places sponsored GIFs inside its quick search interface, offering brands a unique opportunity to capture the attention of users as well as creating a new advertising category that could be very appealing for larger marketers. Google, at its heart, is an advertising business and finding these new use cases (even if it doesn’t plan to get started on them right away) is something that would fit neatly inside its model.
This also gives Google a unique entry point into different platforms, including even Facebook Messenger, which may seek to find GIF search platforms and use them indiscriminately. Google already has its own keyboard with GBoard. As Google looks to further integrate with a typical user’s lifestyle, tapping the popularity (and potential) of GIFs is something that will be important down the line.
Messages on LinkedIn have grown 60% year-over-year, the company said as part of the announcement, as messaging increasingly becomes a core component of any platform that has any kind of sticky human communication component. That’s especially important for trying to explain the nuance behind a connection while building that relationship through a faux-warm intro as well as finding ways to appeal to customer acquisition. Microsoft acquired LinkedIn in mid 2016 for $26.2 billion, essentially picking up one of the largest customer acquisition channels in the world.
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How Raya’s $8/month dating app turned exclusivity into trust
The swipe is where the similarity ends. Raya is less like Tinder and more like a secret society. You need a member’s recommendations or a lot of friends inside to join, and you have to apply with an essay question. It costs a flat $7.99 for everyone, women and celebrities included. You show yourself off with a video slideshow set to music of your choice. And it’s for professional networking as well as dating, with parallel profiles for each.
Launched in March 2015, Raya has purposefully flown under the radar. No interviews. Little info about the founders. Not even a profile on Crunchbase’s startup index. In fact, in late 2016 it quietly acquired video messaging startup Chime, led by early Facebooker Jared Morgenstern, without anyone noticing. He’d become Raya’s first investor a year earlier. But Chime was fizzling out after raising $1.2 million. “I learned that not everyone who leaves Facebook, their next thing turns to gold,” Morgenstern laughs. So he sold it to Raya for equity and brought four of his employees to build new experiences for the app.
Now the startup’s COO, Morgenstern has agreed to give TechCrunch the deepest look yet at Raya, where the pretty, popular and powerful meet each other.
Temptation via trust
Raya COO Jared Morgenstern
“Raya is a utility for introducing you to people who can change your life. Soho House uses physical space, we’re trying to use software,” says Morgenstern, referencing the global network of members-only venues.
We’re chatting in a coffee shop in San Francisco. It’s an odd place to discuss Raya, given the company has largely shunned Silicon Valley in favor of building a less nerdy community in LA, New York, London and Paris. The exclusivity might feel discriminatory for some, even if you’re chosen based on your connections rather than your wealth or race. Though people already self-segregate based on where they go to socialize. You could argue Raya just does the same digitally.
Morgenstern refuses to tell me how much Raya has raised, how it started or anything about its founding team beyond that they’re a “Humble, focused group that prefers not to be part of the story.” But he did reveal some of the core tenets that have reportedly attracted celebrities like DJs Diplo and Skrillex, actors Elijah Wood and Amy Schumer and musicians Demi Lovato and John Mayer, plus scores of Instagram models and tattooed creative directors.
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aya’s iOS-only app isn’t a swiping game for fun and personal validation. Its interface and curated community are designed to get you from discovering someone to texting if you’re both interested to actually meeting in person as soon as possible. Like at a top-tier university or night club, there’s supposed to be an in-group sense of camaraderie that makes people more open to each other.
Then there are the rules.
“This is an intimate community with zero-tolerance for disrespect or mean-spirited behavior. Be nice to each other. Say hello like adults,” says an interstitial screen that blocks use until you confirm you understand and agree every time you open the app. That means no sleazy pick-up lines or objectifying language. You’re also not allowed to screenshot, and you’ll be chastized with a numbered and filed warning if you do.
It all makes Raya feel consequential. You’re not swiping through infinite anybodies and sorting through reams of annoying messages. People act right because they don’t want to lose access. Raya recreates the feel of dating or networking in a small town, where your reputation follows you. And that sense of trust has opened a big opportunity where competitors like Tinder or LinkedIn can’t follow.
Self-expression to first impression
Until now, Raya showed you people in your city as well as around the world — which is a bit weird since it would be hard to ever run into each other. But to achieve its mission of getting you offline to meet people in-person, it’s now letting you see nearby people on a map when GPS says they’re at hot spots like bars, dance halls and cafes. The idea is that if you both swipe right, you could skip the texting and just walk up to each other.
“I’m not sure why Tinder and the other big meeting-people apps aren’t doing this,” says Morgenstern. But the answer seems obvious. It would be creepy on a big public dating app. Even other exclusive dating apps like The League that induct people due to their resume more than their personality might feel too unsavory for a map, since having gone to an Ivy League college doesn’t mean you’re not a jerk. Hell, it might make that more likely.
But this startup is betting that its vetted, interconnected, “cool” community will be excited to pick fellow Raya members out of the crowd to see if they have a spark or business synergy.
That brings Raya closer to the Holy Grail of networking apps where you can discover who you’re compatible with in the same room without risking the crash-and-burn failed come-ons. You can filter by age and gender when browsing social connections, or by “Entertainment & Culture,” “Art & Design,” and “Business & Tech” buckets for work. And through their bio and extended slideshows of photos set to their favorite song, you get a better understanding of someone than from just a few profile pics on other apps.
Users can always report people they’ve connected with if they act sketchy, though with the new map feature I was dismayed to learn they can’t yet report people they haven’t seen or rejected in the app. That could lower the consequences for finding someone you want to meet, learning a bit about them, but then approaching without prior consent. However, Morgenstern insists, “The real risk is the density challenge.”
Finding your tribe
Raya’s map doesn’t help much if there are no other members for 100 miles. The company doesn’t restrict the app to certain cities, or schools like Facebook originally did to beat the density problem. Instead, it relies on the fact that if you’re in the middle of nowhere you probably don’t have friends on it to pull you in. Still, that makes it tough for Raya to break into new locales.
But the beauty of the business is that since all users pay $7.99 per month, it doesn’t need that many to earn plenty of money. And at less than the price of a cocktail, the subscription deters trolls without being unaffordable. Morgenstern says, “The most common reason to stop your subscription: I found somebody.” That “success = churn” equation drags on most dating apps. Since Raya has professional networking as well, though, he says some people still continue the subscription even after they find their sweetheart.
“I’m happily in a relationship and I’m excited to use maps,” Morgenstern declares. In that sense, Raya wants to expand those moments in life when you’re eager and open to meet people, like the first days of college. “At Raya we don’t think that’s something that should only happen when you’re single or when you’re 20 or when you move to a new city.”
The bottomless pits of Tinder and LinkedIn can make meeting people online feel haphazard to the point of exhaustion. We’re tribal creatures who haven’t evolved ways to deal with the decision paralysis and the anxiety caused by the paradox of choice. When there’s infinite people to choose from, we freeze up, or always wonder if the next one would have been better than the one we picked. Maybe we need Raya-like apps for all sorts of different subcultures beyond the hipsters that dominate its community, as I wrote in my 2015 piece, “Rise Of The Micro-Tinders”. But if Raya’s price and exclusivity lets people be both vulnerable and accountable, it could forge a more civil way to make a connection.
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