platforms
Auto Added by WPeMatico
For startups choosing a platform, a decision looms: Build or buy?
Everyone warns you not to build on top of someone else’s platform.
When I first started in VC more than 10 years ago, I was told never to invest in a company building on top of another company’s platform. Dependence on a platform makes you susceptible to failure and caps the return on your investment because you have no control over API access, pricing changes and end-customer data, among other legitimate concerns.
I am sure many of you recall Facebook shutting down its API access back in 2015, or the uproar Apple caused when it decided to change the commission it was charging app developers in 2020.
Put simply, founders can no longer avoid the decision around platform dependency.
Salesforce in many ways paved the way for large enterprise platform companies, being the first dedicated SaaS company to surpass $10 billion in annual revenue supported by its open application development marketplace. Salesforce’s success has given rise to dominant platforms in other verticals, and for founders starting companies, there is no avoiding that platform decision these days.
Some points to consider:
- Over 4,000 fintech companies, including several unicorns, have built their platforms on top of Plaid.
- Recruiters may complain about the cost, but 95% still utilize LinkedIn.
- More than 20,000 companies trust Segment to be their system of record for customer data.
- Shopify powers over 1 million businesses across the globe.
- Epic has the medical records of nearly 50% of the U.S. population.
What does this mean for founders who decide to build on top of another platform?
Increase speed to market
PostScript, an SMS/MMS marketing platform for commerce brands, built its platform on Shopify, giving it immediate access to over 1 million brands and a direct customer acquisition funnel. That has allowed PostScript to capture 3,500 of its own customers and successfully close a $35 million Series B in March 2021.
Ability to focus on core functionality
Varo, one of the fastest-growing neobanks, started in 2015 with the principle that a bank could put customers’ interests first and be profitable. But in order to deliver on its mission, it needed to understand where its customers were spending their money. By partnering with Plaid, Varo enabled more than 176,000 of its users to connect their Varo account to outside apps and services, allowing Varo to focus on its core mission to provide more relevant financial products and services.
Gain credibility by association
Powered by WPeMatico
Box benefits from digital transformation as it raises its growth forecast
Box has always been a bit of an enigma for Wall Street, and perhaps for enterprise software in general. Unlike vendors who shifted to the cloud tools like HR, CRM or ERP, Box has been building a way to manage content in the cloud. It’s been a little harder to understand than these other enterprise software stalwarts, but slowly but surely Box has shifted into a more efficient, and dare we say, profitable public company.
Yesterday the company filed its Q2 2021 earnings report and it was solid. In fact, the company reported revenue of $192.3 million. That’s an increase of 11% year over year and it beat analyst’s expectations of $189.6 million, according to the company. Meanwhile the guidance looked good too, moving from a range of $760 to $768 million for the year to a range of $767 to $770 million.
All of this points to a company that is finding its footing. Let’s not forget, Starboard Value bought a 7.5% stake in the company a year ago, yet the activist investor has mostly stayed quiet and Box seems to be rewarding its patience as the pandemic acts as a forcing function to move customers to the cloud faster — and that seems to be working in Box’s favor.
Let’s get profitable
Box CEO Aaron Levie has not been shy about talking about how the pandemic has pushed companies to move to the cloud much more quickly than they probably would have. He said as a digital company, he was able to move his employees to work from home and remain efficient because of tools like Slack, Zoom, Okta and, yes, Box were in place to help them do that.
All of that helped keep the business going, and even thriving, through the extremely difficult times the pandemic has wrought. “We’re fortunate about how we’ve been able to execute in this environment. It helps that we’re 100% SaaS, and we’ve got a great digital engine to perform the business,” he said.
He added, “And at the same time, as we’ve talked about, we’ve been driving greater profitability. So the efficiency of the businesses has also improved dramatically, and the result was that overall we had a very strong quarter with better growth than expected and better profitability than expected. As a result, we were able to raise our targets on both revenue growth and profitability for the rest of the year,” Levie told TechCrunch.
Let’s get digital
Box is seeing existing customers and new customers alike moving more rapidly to the cloud, and that’s working in its favor. Levie believes that companies are in the process of reassessing their short and longer term digital strategy right now, and looking at what workloads they’ll be moving to the cloud, whether that’s cloud infrastructure, security in the cloud or content.
“Really customers are going to be trying to find a way to be able to shift their most important data and their most important content to the cloud, and that’s what we’re seeing play out within our customer base,” Levie said.
He added, “It’s not really a question anymore if you’re going to go to the cloud, it’s which cloud are you going to go to. And we’ve obviously been very focused on trying to build that leading platform for companies that want to be able to move their data to a cloud environment and be able to manage it securely, drive workflows on it, integrate it across our applications and that’s what we’re seeing,” he said.
That translated into a 60% increase quarter over quarter on the number of large deals over $100,000, and the company crossed 100,000 customers globally on the platform in the most recent quarter, so the approach seems to be working.
Let’s keep building
As with Salesforce a generation earlier, Box decided to build its product set on a platform of services. It enabled customers to tap into these base services like encryption, workflow and metadata and build their own customizations or even fully functional applications by taking advantage of the tools that Box has already built.
Much like Salesforce president and COO Bret Taylor told TechCrunch recently, that platform approach has been an integral part of its success, and Levie sees it similarly for Box. calling it fundamental to his company’s success, as well.
“We would not be here without that platform strategy,” he said. “Because we think about Box as a platform architecture, and we’ve built more and more capabilities into that platform, that’s what is giving us this strategic advantage right now,” he said.
And that hasn’t just worked to help customers using Box, it also helps Box itself to develop new capabilities more rapidly, something that has been absolutely essential during this pandemic when the company has had to react quickly to rapidly changing customer requirements.
Levie is 15 years into his tenure as CEO of Box, but he still sees a company and a market that is just getting started. “The opportunity is only bigger, and it’s more addressable by our product and platform today than it has been at any point in our history. So I think we’re still in the very early stages of digital transformation, and we’re in the earliest stages for how document and content management works in this modern era.”
Powered by WPeMatico
How will EC plans to reboot rules for digital services impact startups?
A framework for ensuring fairness in digital marketplaces and tackling abusive behavior online is brewing in Europe, fed by a smorgasbord of issues and ideas, from online safety and the spread of disinformation, to platform accountability, data portability and the fair functioning of digital markets.
European Commission lawmakers are even turning their eye to labor rights, spurred by regional concern over unfair conditions for platform workers.
On the content side, the core question is how to balance individual freedom of expression online against threats to public discourse, safety and democracy from illegal or junk content that can be deployed cheaply, anonymously and at massive scale to pollute genuine public debate.
The age-old conviction that the cure for bad speech is more speech can stumble in the face of such scale. While illegal or harmful content can be a money spinner, outrage-driven engagement is an economic incentive that often gets overlooked or edited out of this policy debate.
Certainly the platform giants — whose business models depend on background data-mining of internet users in order to program their content-sorting and behavioral ad-targeting (activity that, notably, remains under regulatory scrutiny in relation to EU data protection law) — prefer to frame what’s at stake as a matter of free speech, rather than bad business models.
But with EU lawmakers opening a wide-ranging consultation about the future of digital regulation, there’s a chance for broader perspectives on platform power to shape the next decades online, and much more besides.
In search of cutting-edge standards
For the past two decades, the EU’s legal framework for regulating digital services has been the e-commerce Directive — a cornerstone law that harmonizes basic principles and bakes in liabilities exemptions, greasing the groove of cross-border e-commerce.
In recent years, the Commission has supplemented this by applying pressure on big platforms to self-regulate certain types of content, via a voluntary Code of Conduct on illegal hate speech takedowns — and another on disinformation. However, the codes lack legal bite and lawmakers continue to chastise platforms for not doing enough — nor being transparent enough about what they are doing.
Powered by WPeMatico
Miro lands $50M Series B for digital whiteboard as demand surges
Miro is a company in the right place at the right time. The makers of a digital whiteboard are seeing usage surge right now as businesses move from the workplace and physical whiteboards. Today, the company announced a hefty $50 million Series B.
Iconiq Capital led the round with help from Accel and a slew of individual investors. Today’s investment brings the total raised to around $75 million, according to the company. Among the company’s angel investors was basketball star Steph Curry.
What’s attracting this level of investment is that this is a product made for a moment when workers are forced to stay home. One of the primary complaints about working at home is the inability to sit in the same room with colleagues and brainstorm around a whiteboard. This reproduces that to an extent.
What’s more, Miro isn’t simply light-weight add-in like you might find built into a collaboration tool like Zoom or Microsoft Teams; it’s more of a platform play designed to integrate with many different enterprise tools, much like Slack does for communications.
Miro co-founder and CEO Andrey Khusid said the company planned the platform idea from its earliest days. “The concept from day one was building something for real-time collaboration and the platform thing is very important because we expect that people will build on top of our product,” Khusid told TechCrunch.
Image Credit: Miro
That means that people can build integrations to other common tools and customize the base tool to meet the needs of an individual team or organization. It’s an approach that seems to be working as the company reports it’s profitable with more than 21,000 customers including 80% of the Fortune 100. Customers include Netflix, Salesforce, PwC, Spotify, Expedia and Deloitte.
Khusid says usage has been skyrocketing among both business and educational customers as the pandemic has forced millions of people to work at home. He says that has been a challenge for his engineering team to keep up with the demand, but one that the company has been able to meet to this point.
The startup just passed the 300 employee mark this week, and it will continue to hire with this new influx of money. Khusid expects to have another 150 employees before the end of the year to keep up with increasing demand for the product.
“We understand that we need to come out strong from this situation. The company is growing much faster than we expected, so we need to have a very strong team to maintain the growth at the same pace after the crisis ends.”
Powered by WPeMatico
Want to survive the downturn? Better build a platform
When you look at the most successful companies in the world, they are almost never just one simple service. Instead, they offer a platform with a range of services and an ability to connect to it to allow external partners and developers to extend the base functionality that the company provides.
Aspiring to be a platform and actually succeeding at building one are not the same. While every startup probably sees themselves as becoming a platform play eventually, the fact is it’s hard to build one. But if you can succeed and your set of services become an integral part of a given business workflow, your company could become bigger and more successful than even the most optimistic founder ever imagined.
Look at the biggest tech companies in the world, from Microsoft to Oracle to Facebook to Google and Amazon. All of them offer a rich complex platform of services. All of them provide a way for third parties to plug in and take advantage of them in some way, even if it’s by using the company’s sheer popularity to advertise.
Michael A. Cusumano, David B. Yoffie and Annabelle Gawer, who wrote the book The Business of Platforms, wrote an article recently in MIT Sloan Review on The Future of Platforms, saying that simply becoming a platform doesn’t guarantee success for a startup.
“Because, like all companies, platforms must ultimately perform better than their competitors. In addition, to survive long-term, platforms must also be politically and socially viable, or they risk being crushed by government regulation or social opposition, as well as potentially massive debt obligations,” they wrote.
In other words, it’s not cheap or easy to build a successful platform, but the rewards are vast. As Cusumano, Yoffie and Gawer point out their studies have found, “…Platform companies achieved their sales with half the number of employees [of successful non-platform companies]. Moreover, platform companies were twice as profitable, were growing twice as fast, and were more than twice as valuable as their conventional counterparts.”
From an enterprise perspective, look at a company like Salesforce . The company learned long ago that it couldn’t possibly build every permutation of customer requirements with a relatively small team of engineers (especially early on), so it started to build hooks into the platform it had built to allow customers and consultants to customize it to meet the needs of individual organizations.
Eventually Salesforce built APIs, then it built a whole set of development tools, and built a marketplace to share these add-ons. Some startups like FinancialForce, Vlocity and Veeva have built whole companies on top of Salesforce.
Rory O’Driscoll, a partner at Scale Venture Partners, speaking at a venture capitalist panel at BoxWorks in 2014, said that many startups aspire to be platforms, but it’s harder than it looks. “You don’t make a platform. Third-party developers only engage when you achieve a critical mass of users. You have to do something else and then become a platform. You don’t come fully formed as a platform,” he said at the time.
If you’re thinking, how you could possibly start a company like that in the middle of a massive economic crisis, consider that Microsoft launched in 1975 in the middle of recession. Google and Salesforce both launched in the late 1990s, just ahead of the dot-com crash, and Facebook launched in 2004, four years before the massive downturn in 2008. All went on to become tremendously successful companies
That success often requires massive spending and sales and marketing burn, but when it works, the rewards are enormous. Just don’t expect that it’s an easy path to success.
Powered by WPeMatico
Roblox raises $150M Series G, led by Andreessen Horowitz, now valued at $4B
Online gaming platform Roblox, now home to 115 million largely Gen Z players per month, announced today it has raised $150 million in Series G funding, led by Andreessen Horowitz’s Late Stage Venture fund. The company will also open a tender offer for up to $350 million of common and preferred shares, it says.
The company has previously offered stakeholders and employees liquidity through periodic secondary offerings, as it believes in its long-term potential. Roblox is also cash-flow positive, according to its CFO Michael Guthrie.
Others participating in the Series G include new investors Temasek and Tencent Holdings Limited, as well as existing investors Altos Ventures, Meritech Capital, and Tiger Global Management.
The funding comes at a period of significant growth for the gaming platform. Just last summer, it was being visited by 100 million users, topping Minecraft, and its developer community of over 2 million actives earned $110 million in 2019 — up from around $70+ million in 2018 and $40+ million in 2017.
Since then, Roblox has further invested in its developer business, with the launch of new tools for building more realistic 3D experiences and a marketplace where creators can sell their own development assets and tools to others, among other things.
Roblox offers a platform for its developers to build upon, similar to the App Store. Many of its most popular games are free, instead monetizing as players spend on in-game items using virtual cash called Robux. Some of its largest games average over 10 million users monthly. Over 10 games have seen more than 1 billion visits.
Players on Roblox often do more than just focus on completing a goal or task — they go online to hang out with friends in a gaming environment. Half of weekly active users go to Roblox to play with friends. In addition, half of Roblox users update their avatar every month.
In recent months, Roblox has also been working to take its platform further outside the U.S. including most notably China. Last year, Roblox entered a strategic partnership with Tencent in an effort to bring its platform and coding curriculum to the region, including by adding support for Chinese languages and running coder camps. Today, Roblox has players and creators in over 200 countries, it says.
As of last year, Roblox was valued at $2.5 billion, with roughly half of U.S. children ages 9 through 12 playing on its platform, according to comScore. This remains true today. In addition, its user base overall skews younger, with over 40% 13 and up.
The company is now valued at $4 billion, The Wall Street Journal reported. (TechCrunch additionally understands this to be true. Roblox isn’t commenting.)
Today, Roblox says its user base is spending a collective 1.5 billion hours per month on its service. And because it’s accessible across platforms, users often move from PC to smartphone to continue to play — a newer trend in online gaming, and one that’s also driving adoption of games like Fortnite, PUBG, and others.
“We are big believers in Roblox’s long-term vision, and are confident in backing the team as they enter this next inflection point,” said David George, General Partner at Andreessen Horowitz, of the firm’s investment. “Roblox is one of those rare platform companies with massive traction and an organic, high-growth business model that will advance the company, and push the industry forward for many years to come,” he added.
Roblox plans to leverage the new funds to continue its growth, including international; further build out its developer tools and ecosystem; and invest in engineering talent and infrastructure.
“We’ve stayed true to our vision of creating a safe and civil place where people come together to create, learn, and have fun, and it’s amazing to see what we’ve built together with our global creator community,” said David Baszucki, CEO and co-founder of Roblox, in a statement. “Looking ahead, we’re doubling down on our commitment to building the most advanced tools and technology to take our creators and players into the metaverse of the future.”
Updated, 2/26/20, 7:30 PM ET with more updated statistics.
Powered by WPeMatico
App Annie acquires analytics firm Libring, bringing adtech-related insights to its platform
App Annie, a go-to source for mobile app market data and analytics, is expanding its platform with the acquisition of mobile analytics provider Libring. The deal will allow App Annie to present its mobile app market data side by side with advertising analytics data in order to paint a more complete picture of an app’s performance and revenue.
Already, App Annie customers leverage its platform to track key metrics related to their app’s growth and usage, like downloads, active users, retention numbers, demographics, rankings, reviews, competitive analysis and more. But the company said it heard from publishers and brands how it’s still difficult to analyze their user acquisition efforts, including their ad spend and related costs.
With the addition of Libring, App Annie is integrating adtech insights into its platform.
This includes the ability to combine the ad spend and monetization insights from more than 325 data sources, including Supply Side Platforms (SSPs), Demand Side Platforms (DSPs), app stores and analytics platforms.
This data is then presented in a single dashboard so it’s easier to understand critical metrics — like the customer acquisition cost, the lifetime value, the return on ad spend and the return on investment.
It’s ideal for larger organizations that have outgrown the spreadsheet, as it’s been sort of the App Annie of revenue aggregation, so to speak.
“The most successful companies find a way to capitalize on mobile, yet they have been struggling to maximize its value to their business,” explained App Annie CEO Ted Krantz, in a statement about the acquisition. “Today, this requires custom work to stitch together multiple point solutions, spreadsheets, business intelligence teams, agencies and consultants. We are committed to solving this by applying data science and machine learning to automate these composite metrics for brands and publishers,” he said.
The deal comes at a time when mobile ad spend is continuing to grow rapidly — it’s expected to double to $375 billion globally by 2022, the company noted. It’s now a massive part of the overall app industry, at triple the amount of consumer spending on the app stores.
As a result of the deal, Libring’s 30-plus employees are joining App Annie.
In the near-term, Libring’s current customers will continue to use its product as they do today.
But App Annie tells us there’s only some overlap between the two companies’ respective customer bases. For now, App Annie will work with its customers who want to purchase the new analytics service and find out what sort of enhancements they are looking for in an analytics solution. Libring’s customers can also purchase App Annie’s analytics, if they choose.
Later, App Annie will migrate the Libring backend to the same infrastructure provider the rest of App Annie uses, and will then integrate the front-end so customers can log in and visualize the new analytics and other market data together. More information about how this will all work will be shared when those tools are closer to being available, which is still several months from now.
Going forward, App Annie says its data science team will also offer predictive and prescriptive insights based on the new data.
According to Libring’s website, its customers included SEGA, Slickdeals, Reddit, Jam City, Wooga, EA, Zynga, Next Games, Meet Me, GameInsight, Deviant Art, Webedia, Ubisoft, theChive, saambaa, badoo, textnow and others.
App Annie declined to disclose the deal terms.
Related to the changes and expansion, App Annie also today introduced a new brand that features a gem logomark. The gem is meant to be a tribute to mobile gaming and the idea of “leveling up” while also a reflection of the value of actionable data, the company says.
The acquisition comes on the heels of several notable milestones for App Annie, including the launch of a product development testing ground, App Annie Labs; plus the addition of mobile web analytics in March — the same time when App Annie passed $100 million in annual recurring revenue.
The company is soliciting feedback about its plans for Libring and will post updates about the project on App Annie Labs, it says.
Powered by WPeMatico
New Box platform pricing designed to give developers more cost certainty
Box has been in the process of enhancing its developer platform, and today it announced a new pricing plan designed to provide developers with more cost certainty than the old pricing approach.
“We’ve been in the market for 18 months and there has been a tremendous amount of traction, but pricing was still complicated,” Jeetu Patel, CSO and SVP of Box Platform told TechCrunch. Read More
Powered by WPeMatico
Computing’s future? It’s in your pocket
Technology’s neverending story has always, apparently, been the quest for The Next Big Thing. Whether that thing is something entirely new and transformative — unimaginable except within the fantastical confines of the sci-fi genre, say. Or just a far faster/more powerful iteration of the rough-round-the-edges gizmo sitting on your desk today — one which delivers a bona fide… Read More
Powered by WPeMatico
Why Clayton Christensen Is Wrong About Uber And Disruptive Innovation
Silicon Valley has disrupted disruptive innovation, and Clayton Christensen isn’t happy about it. Christensen vaulted to rock-star status in the tech world in 1995 when he introduced the theory of disruptive innovation. Two years later, he published his bestselling book, The Innovator’s Dilemma. His work was widely praised. The concept of disruptive innovation was a hugely… Read More
Powered by WPeMatico