Market Analysis
Auto Added by WPeMatico
These best practices maximize the value of your online events
Jonathan Greechan is co-founder of the world’s largest pre-seed accelerator, Founder Institute, has run over 100 webinars including 100,000+ live attendees, and is one of Meetup’s most active organizers.
Around the world, the COVID-19 pandemic is disrupting calendars — along with travel budgets and marketing plans — by canceling events ranging from major league sports to tech conferences. This has impacted the startup and tech industries on all levels; by early March, economic losses from tech event cancellations alone amounted to more than $1.1 billion.
In response, many businesses have taken events online. Teleconferencing tools are being used more than ever, and Zoom registered 200 million daily users in March, up from a record of 10 million. Business figures and organizations can harness these online tools to minimize the blow of the worldwide shutdown, reach their target audiences and position themselves as thought leaders, but moving events online has its own problems.
The more meetups are generated, the more likely it is that yours will get lost in a sea of options. It’s also significantly easier for people to “attend” an event — and ignore it or exit early. There are plenty of studies demonstrating that internet users have shorter attention spans.
So you have to stand out and keep people engaged while speaking to people through a screen thousands of miles away. Over the past decade I have run more than 100 webinars with over 100,000 live attendees, and am one of the largest Meetup organizers in the world. Through trial and error I have developed a set of best practices that will keep people engaged in online events.
Transmitting real value by computer is certainly more challenging than face-to-face, but following these three pointers will help you get there.
1. Prepare for all eventualities
We all know what a badly prepared organized meeting looks like: frozen screens, buffering videos and broken audio.
Powered by WPeMatico
Why we’re doubling down on cloud investments right now
Mary D’Onofrio is a software investor at Bessemer Venture Partners who joined to start the firm’s growth practice; she’s also an architect of ^EMCLOUD and authored the 10 Laws of Cloud and the State of the Cloud 2020.
Hansae Catlett is an investor for Bessemer Venture Partners where he primarily focuses on investments in cloud (enterprise and SMB), machine learning and consumer technologies; he’s an author behind the State of the Cloud 2020.
Elliott Robinson is a partner for Bessemer Venture Partners, one of the authors behind the State of the Cloud 2020, and focuses primarily on growth investments in SaaS and cloud companies.
Years from now, people will look back on the COVID-19 pandemic as a watershed moment for society and the global economy.
Wearing a mask might be as common as owning a phone; telework, telemedicine and online education will be more of a norm than a backup plan; and for the global economy, the cloud will have transformed the underlying infrastructure of businesses and entire industries.
COVID-19 is a turning point for the cloud and cloud company founders. For its computing power and as a delivery model of software, the cloud has been embraced as a solution to many challenges that businesses face during today’s economic downturn and recovery. Not only is the cloud industry more resilient than other industries, but the cloud model offers businesses a promising future in the age of social distancing and beyond.
We believe that once founders find shelter in the cloud, they’ll never go back.
Cloud’s resiliency amid historic volatility
Over the past decade, there’s been a massive market shift from on-premises to cloud, as 94% of enterprises use at least one cloud service today. 2020 was already a milestone year for the cloud industry, as aggregate SaaS and IaaS run-rate revenue each crossed $100 billion, and the BVP Nasdaq Emerging Cloud Index (^EMCLOUD) market cap crossed $1 trillion in early February. Yet in a matter of days, as the COVID-19 pandemic spread, fear tore through financial markets.
In early March, public markets experienced the steepest crash in history with volatility we haven’t seen since the Great Recession. The cloud index market cap dropped to ~$750 million and cloud multiples returned close to their historical averages of ~7x while the VIX volatility index spiked to the mid-80s. Both at global highs in February 2020, the ^EMCLOUD and the S&P 500 traded off by roughly 35% by mid-March. Over the next two months, though, the ^EMCLOUD recouped those losses, charging to a new all-time high on May 7.
The cloud index has continued its rise since then, and as of the close on May 11 has a market cap above $1.2 trillion and has returned to the lofty 12x forward run rate revenue multiples from 2019. Similar to Adobe in 2012, we expect many enterprises to transition over to the cloud model, and the index will continue to expand. As we predicted in this year’s State of the Cloud 2020, by 2025 we expect the cloud to penetrate 50% of enterprise software.
Powered by WPeMatico
Startups are transforming global trade in the COVID-19 era
Scott Bade is a former speechwriter for Mike Bloomberg and co-author of “More Human: Designing a World Where People Come First.”
More posts by this contributor
Global trade watchers breathed a sigh of relief on January 15, 2020.
After two years of threats, tariffs and tweets, there was finally a truce in the trade war between the U.S. and China. The agreement signed by President Trump and Chinese Vice Premier Liu He in the Oval Office didn’t resolve all trade tensions and maintained most of the $360 billion in tariffs the administration had put on Chinese goods. But for the first time in months, it looked like manufacturers, importers and shippers could start to put two difficult years behind them.
Then came COVID-19, at first a local disruption in Wuhan, China. Then it spread throughout Hubei province, causing havoc in a concentric circle that eventually engulfed the rest of China, where industrial production fell by more than 13.5% in the first two months of the year. When the virus spread everywhere, chaos ensued: Factories shuttered. Borders closed. Supply chains crumbled.
“It has had a cascading effect through the entire world’s economy,” says Anja Manuel, co-founder and managing partner of Rice, Hadley, Gates & Manuel LLC, an international strategic consulting firm based in Silicon Valley.
The crisis has caused a drastic contraction in global trade; the World Trade Organization estimates trade volumes will fall 13-20% in 2020. And spinning activity back up could be tricky: Even as China starts to get back online, the slowdown there could reduce worldwide exports by $50 billion this year. When factories do reopen, there’s no guarantee whether they will have parts available or empty warehouses, says Manuel, who also serves on the advisory board of Flexport, a shipping logistics startup. “Our supply chains are so tightly-knit and so just-in-time that throw a few wrenches in it like we’ve just done, and it’s going to be really hard to stand it back up again. The idea that we go back to normal the moment we lift restrictions is unlikely, fanciful, even.”
Getting to that new normal, though, is a job that a number of logistics startups are embracing. Already on the rise, companies like Flexport, Haven and Factiv see a global trade crisis as a setback, but also an opportunity to demonstrate the value of their digital platforms in a very much analog industry.
Powered by WPeMatico
Decrypted: Contact-tracing privacy, Zoom buys Keybase, Microsoft eyes CyberX
As the world looks to reopen after weeks of lockdown, governments are turning to contact tracing to understand the spread of the deadly coronavirus.
Most nations are leaning toward privacy-focused apps that use Bluetooth signals to create an anonymous profile of where a person has been and when. Some, like Israel, are bucking the trend and are using location and cell phone data to track the spread, prompting privacy concerns.
Some of the biggest European economies — Germany, Italy, Switzerland and Ireland — are building apps that work with Apple and Google’s contact-tracing API. But the U.K., one of the worst-hit nations in Europe, is going it alone.
Unsurprisingly, critics have both security and privacy concerns, so much so that the U.K. may end up switching over to Apple and Google’s system anyway. Given that one of Israel’s contact-tracing systems was found on an passwordless server this week, and India denied a privacy issue in its contact-tracing app, there’s not much wiggle-room to get these things wrong.
Turns out that even during a pandemic, people still care about their privacy.
Here’s more from the week.
THE BIG PICTURE
Zoom acquires Keybase, but questions remain
When Zoom announced it acquired online encryption key startup Keybase, for many, the reaction was closer to mild than wild. Even Keybase, a service that lets users store and manage their encryption keys, acknowledged its uncertain future. “Keybase’s future is in Zoom’s hands, and we’ll see where that takes us,” the company wrote in a blog post. Terms of the deal were not disclosed.
Zoom has faced security snafu after snafu. But after dancing around the problems, it promised to call in the cavalry and double down on fixing its encryption. So far, so good. But where does Keybase, largely a consumer product, fit into the fray? It doesn’t sound like even Zoom knows yet, per enterprise reporter Ron Miller. What’s clear is that Zoom needs encryption help, and few have the technical chops to pull that off.
Keybase’s team might — might — just help Zoom make good on its security promises.
Powered by WPeMatico
4 edtech CEOs peer into the industry’s future
When Zach Sims first started pitching his coding startup, Codecademy, he framed it to investors as a corporate tutoring company. That was intentional, despite the fact that edtech is a $5 trillion business.
“It was much easier for investors to understand instead of an education company,” he said, noting that the industry has long been defined by tight budgets and slow sales cycles.
But, as millions adopt remote learning overnight, edtech’s reputation is changing — and investors are scrambling accordingly. The revitalization means that a new wave of edtech startups is upon us. We asked four entrepreneurs who have been working in this space to share what they think the next billion-dollar business will look like. While we’ve covered the investor side of edtech quite a bit, it was refreshing to hear from founders and executives who are on the ground making decisions:
- Matthew Glotzbach, CEO, Quizlet
- Jessie Woolley-Wilson, CEO and president, DreamBox Learning
- Darren Shimkus, general manager, Udemy for Business
- Zach Sims, co-founder and CEO, Codecademy
How to sell: Classroom and outside the box
According to Matthew Glotzbach, CEO of Quizlet, “any edtech solution tailored toward schools and classrooms may find a significant headwind,” such as games or VR/AR headsets that need to be used within classroom settings. “Not because physical spaces are going away, but in this limited time, limited budget environment, teachers and administrators are going to spend their money on solutions that are more tailored toward distance.”
Startups should plan to be useful in both a pre-coronavirus and post-coronavirus world, likely hybridizing tech solutions that are useful for day-to-day classroom operations as well as remote learning.
How to reach scale: B2C or B2B?
Powered by WPeMatico
Former Tesla president and Lyft COO Jon McNeill on what both companies have gotten right and wrong
We recently interviewed Jon McNeill to learn more about his newest project, a startup studio called DeltaV Ventures. But we also wanted to hear about what it’s like to work inside of Tesla and Lyft.
McNeill spent two-and-a-half years as the carmaker’s president, heading up global sales, marketing, delivery and government relations before heading to Lyft in early 2018, where he served as COO for 18 months. (He left four months after the ride-hail company’s IPO last year.)
He shared his take on his experience at both places, and what, from each, he is using and eschewing at DeltaV. Our conversation has been edited lightly for length and clarity.
TechCrunch: What was it like working with Elon Musk?
Jon McNeill: To me, it was fascinating. He’s the best practitioner of my craft as an entrepreneur. It’s hard to name another entrepreneur who has started four companies, all of which are worth more than $10 billion in market cap [and] several of which are worth more than $50 billion.
We were in hyper-growth mode, and there were no playbooks. Like, literally, when I started, the company had about $2 billion in annual run rate revenue, and three years later, it had $20 billion in annual run rate revenue. And there are no playbooks for that, so we were innovating constantly to either try to get ahead of that growth or just to keep up with it.
Powered by WPeMatico
Fintech startups amass war chests for the economic downturn
Consumer fintech startups were massively successful in 2019, attracting millions of new users and disrupting traditional retail banks and financial services with mobile-first, consumer-oriented products. Despite the economic downturn in public markets and the massive wave of cuts at public and private companies in recent weeks, fintech startups have been raising a ton of money.
It feels like they’re all building a war chest to survive the economic winter as traditional banks continue to iterate so they can catch up and offer more user-friendly services. This is not the time to raise fees, slow down on product development or plans to acquire new users.
Nine-figure rounds
Back in January, I looked at challenger banks and their growth trajectories, but since then, they have managed to attract even more customers. According to the most recent figures:
- Nubank has 20 million customers;
- Revolut has 10 million users;
- Chime has 8 million users;
- N26 has 5 million users;
- Monzo has 4 million users.
And that’s without mentioning Starling Bank, Atom Bank, Bunq, Bnext, Paysend, etc. At some point, there will be as many challenger banks as non-challenger banks — perhaps we shouldn’t call them challenger banks anymore.
Beyond these startups, trading app Robinhood recently reached 13 million users, international payments startup TransferWise has 7 million customers and cryptocurrency exchange Coinbase has 30 million users.
Powered by WPeMatico
Sequoia’s Roelof Botha is more optimistic about startups today than he was a year ago
“I just think change unfairly favors the startup, the nimble small company,” says Roelof Botha.
The Sequoia partner, whose portfolio includes Unity, 23andMe, Instagram, Instacart, Xoom and YouTube, says he’s hopeful about the opportunities this pandemic has created for companies across a variety of sectors, including healthcare, cloud computing, social and others.
We spoke for an hour with Botha about several topics, including how user behavior is rapidly evolving, trends he’s seeing, his outlook on economic recovery, how he’s evaluating new investments and how fundraising itself is changing. Fun fact: Sequoia has made 10 investments over Zoom since the coronavirus pandemic forced us to stay at home.
The full conversation was broadcast on YouTube, and the embed appears below.
Side note: Extra Crunch Live is our new virtual speaker series for Extra Crunch members. Folks can ask their own questions live during the chat, with guests that include Aileen Lee, Kirsten Green, Mark Cuban and many, many more. You can check out the schedule here.
Below, you’ll find a lightly edited transcript of our recent chat with Botha. Enjoy!
The differences in fundraising based on stage
When you’re listening to a seed-stage company, it’s often about the story. The founders paint a vision of the future. That’s part of what I love about my job, by the way. You’re sitting there and you’re trying to imagine what the world is going to look like one day and whether this company is on the right side of history. Or is it implausible that this will happen? It’s so much fun to sit there and think about that. At the seed stage, it’s about the story.
As you get to a Series A or Series B stage, the company will definitely start to have some metrics: usage numbers, early adoption numbers. If it’s an enterprise company, what are people willing to pay for your product? You start to get a sense of the metrics that back up the story. If the metrics don’t support the story, then you start to wonder if that company makes sense. In the long run, you need to have financials that flow from the metrics. But that’s typically at a Series C or later stage. And clearly, by the time a company goes public, you need to have connected story to metrics to financials.
Powered by WPeMatico
This Week in Apps: WWDC goes online, Android 11 delays, Facebook SDK turns into app kill switch
Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.
The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.
In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.
This week we’re continuing to look at how the coronavirus outbreak is impacting the world of mobile applications, including the latest on countries’ various contact-tracing apps, the pandemic’s impact on gaming and fintech and more. We’re also looking at that big app crash caused by Facebook, plus new app releases from Facebook and Google, Android 11’s new timeline and Apple’s plans to move WWDC online, among other things.
Headlines
WWDC goes virtual June 22
Apple announced this week its plans for a virtual version of its Worldwide Developer Conference. The company will host its WWDC 2020 event beginning on June 22 in the Apple Developer app and on the Apple Developer website for free for all developers.
It will be interesting to see how successfully Apple is able to take its developer conference online. After all, developers could already access the sessions and keynotes through videos — but the real power of the event was in the networking and being able to talk to Apple engineers, ask questions, get hands-on help and see how other developers are using Apple technologies to innovate. Unless Apple is planning a big revamp of its developer site and app that would enable those connections, it seems this year’s event will lack some of WWDC’s magic.
The company also announced the Swift Student Challenge, an opportunity for student developers to showcase their coding by creating their own Swift playground.
Powered by WPeMatico
As funding slows in Boston, its early-stage market could shine
Chris Lynch, a founder and former general partner at Boston-based seed-stage fund Accomplice, remembers “VC Mountain in Waltham.”
Back then, entrepreneurs on funding quests would visit a building overlooking the Waltham Reservoir near Boston where they pitched to a few investors: Matrix Partners, Charles River Ventures and Highland Capital Partners.
“And if they didn’t invest in you, you weren’t getting money to start your company,” Lynch said.
Since then, Lynch has watched the area’s startup ecosystem reach the point where seed-stage firms are ubiquitous, but in a city populated with firms waiting to make first bets, the scene is unsurprisingly undergoing a funding drought. Crunchbase data indicates that the city’s Q2 venture capital pace slowed dramatically, with April seeing far fewer rounds and dollars invested in 2020 than in 2019.
Boston saw just seven known equity funding rounds in April, investments worth a hair under $60 million. In the year-ago April, Boston recorded 24 equity funding rounds worth more than $500 million.
Yet, while the numbers are slow, some Boston tech leaders think seed startups will continue to thrive thanks to accelerators and a healthy base of local early-stage investors. And Lynch, who left Accomplice in 2017, says the venture slowdown might help firms recalibrate their appetite for new deals to a more healthy pace.
“The advantage of more access to capital without a proportional increase in great ideas really waters down the fort,” he said, referring to upmarkets. “A lot of money has been invested in companies before they even proved their ideas were right, and I think even I fell into a trap of competing so hard for deals that I lost sight of a good deal.” He estimates that in our COVID-19 world, investors will start to again take three months for due diligence on a deal, versus three weeks to a signed term sheet.
If Boston’s seed investors becomes more conservative, that means that accelerators — homes of the brightest founders, often before they even have their first customer — will be pressed to react.
Accelerators
Venture Lane, a co-working space and startup incubator for early-stage companies, was nearing its one-year anniversary in the heart of Boston when COVID-19 hit the city.
The incubator, which traditionally hosts 10 startups at a time, made its whole program virtual and reworked existing content to help navigate the climate. Plus, per founder Christian Magel, its tips and workshops were opened up to any early-stage founder, not just the ones enrolled with Venture Lane. Hundreds have signed up, he said.
Powered by WPeMatico