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Daily Crunch: Microsoft-TikTok acquisition inches closer to reality
A possible Microsoft –TikTok acquisition is causing plenty of drama, we review Google’s new budget Pixel and SpaceX’s Crew Dragon returns to Earth. Here’s your Daily Crunch for August 3, 2020.
Microsoft-TikTok acquisition inches closer to reality
This weekend, Microsoft confirmed reports that it’s in talks to acquire TikTok, the popular mobile video app currently owned by Chinese company ByteDance. It sounds like the outcome of those talks may ultimately have less to do with Microsoft and more with President Donald Trump.
“Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States,” the company said in a statement. “Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”
And indeed, Trump said today that he’s not opposed to an acquisition, but that “a very substantial portion of that price is going to have to come into the Treasury of the United States.” Meanwhile, Chinese internet users are calling ByteDance’s CEO a traitor.
The tech giants
Google’s budget Pixel 4a addresses its premium predecessor’s biggest problem — Brian Heater reviews the new $349 handset.
Facebook launches commerce and connectivity-focused accelerator programs — Facebook’s Commerce Accelerator will select 60 startups from the EMEA and LATAM regions, while Connectivity will feature 30 startups from LATAM and North America.
Adobe’s plans for an online content attribution standard could have big implications for misinformation — The project was first announced last November, and now the team has a whitepaper going into the nuts and bolts about how its system would work.
Startups, funding and venture capital
YC-backed Artifact looks to make podcasts more personal — Using professionally contracted interviewers, Artifact conducts short interviews with a person’s closest friends or family and turns them into a personal podcast.
Founded by a lifelong house-flipper, Inspectify is a marketplace for home inspections and repairs — Through the platform, buyers can instantly book inspections and receive repair estimates.
Mobile banking startup Varo is becoming a real bank — The company announced that it has been granted a national bank charter from the Office of the Comptroller of the Currency and secured regulatory approvals from the FDIC and Federal Reserve to open Varo Bank, N.A.
Advice and analysis from Extra Crunch
The essential revenue software stack — Tim Porter and Elise La Cava of Madrona Ventures outline the set of services used by sales, marketing and growth teams across their portfolio to identify and manage their prospects and revenue.
Is the 2020 SPAC boom an echo of the 2017 ICO craze? — Alex Wilhelm looks at two new pieces of SPAC news.
After Shopify’s huge quarter, BigCommerce raises its IPO price range — BigCommerce now intends to price its IPO between $21 and $23 per share.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
SpaceX and NASA successfully return Crew Dragon spacecraft to Earth with astronauts on board — SpaceX’s Crew Dragon appears to have performed exactly as intended throughout the mission, handling the launch, ISS docking, undocking, de-orbit and splashdown in a fully automated process that kept the astronauts safe and secure throughout.
Original Content podcast: Netflix’s ‘Say I Do’ offers a wedding-focused twist on the ‘Queer Eye’ formula — I’m not someone who cares about weddings, but this show made me cry. Multiple times!
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
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What your company can learn from the Bank of England’s resilience proposal
Kolton is co-founder and CEO of Gremlin, the chaos engineering company helping the world build a more reliable internet.
More posts by this contributor
The outages at RBS, TSB and Visa left millions of people unable to deposit their paychecks, pay their bills, acquire new loans and more. As a result, the House of Commons’ Treasury Select Committee (TSC) began an investigation of the U.K. finance industry and found the “current level of financial services IT failures is unacceptable.” Following this, the Bank of England (BoE), Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) decided to take action and set a standard for operational resiliency.
While policies can often feel burdensome and detached from reality, these guidelines are reasonable steps that any company across any industry can exercise to improve the resilience of their software systems.
The BoE standard breaks down to these five steps:
- Identify critical business services based on those that end users rely on most.
- Set a tolerance level for the amount of outage time during an incident that is acceptable for that service, based on what utility the service provides.
- Test if the firm is able to stay within that acceptable period of time during real-life scenarios.
- Involve management in the reporting and sign-off of these thresholds and tests.
- Take action to improve resiliency against the different scenarios where feasible.
Following this process aligns with best practices in architecting resilient systems. Let’s break each of these steps down and discuss how chaos engineering can help.
Identify critical business services
The operational resilience framework recommends focusing on the services that serve external customers. While internal applications are important for productivity, this customer-first mentality is sound advice for determining a starting place for reliability efforts. While it’s ultimately up to the business to weigh the criticality of the different services they offer, the ones necessary to make payments, retrieve payments, investing or insuring against risks are all recommended priorities.
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Daily Crunch: Slack files antitrust complaint against Microsoft
An antitrust battle is brewing between Microsoft and Slack, Apple continues to defend its App Store policies and Dexterity raises funding for warehouse robots. Here’s your Daily Crunch for July 22, 2020.
PS: I’m going to be on vacation until Wednesday of next week. Until then, I leave you in Darrell Etherington’s capable hands!
The big story: Slack files antitrust complaint against Microsoft
The complaint was filed in the European Union and alleges that Microsoft is unfairly bundling its Teams product with the broader Office suite.
“Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers,” Slack said in a statement.
When Microsoft first announced Teams in 2016, Slack took out an ad mocking the company and saying it welcomed competition. In April, Microsoft said Teams has grown to 75 million daily active users, compared to the 12.5 million that Slack reported in March.
The tech giants
Apple digs in heels over its App Store commission structure with release of new study — Apple has been commissioning research that defends its 30% commission on App Store purchases.
Spotify and Universal sign new licensing deal, will partner on development of marketing tools — In addition to re-securing Universal’s catalog for the music streaming service, the deal signs up Universal as an early adopter of Spotify’s future products for labels and artists.
Twitter cracks down on QAnon conspiracy theory, banning 7,000 accounts — Moving forward, Twitter said it will be removing QAnon-related topics from its trending pages and algorithmic recommendations and blocking any associated URLs.
Startups, funding and venture capital
Dexterity exits stealth with $56.2 million raised for its collaborative warehouse robots — The startup’s system combines hardware and software for warehouse tasks like bin picking and box packing.
Misfits Market raises $85 million Series B to send you ‘ugly’ fruits and veggies — Users sign up for a weekly produce box and can also add chocolate, snacks, chips, coffee, herbs, grains, lentils, sauces and spices.
YC-backed Glimpse helps Airbnb hosts make money through product placement — Airbnbs could the perfect place to convince someone to try a new mattress or a new kind of coffee.
Advice and analysis from Extra Crunch
What you need to know before selling your company’s stock — Part 3 of financial adviser Peyton Carr’s guide for startup founders.
Messenger tools can help you recover millions in lost revenue — Rank Secure CEO Baruch Labunski says messenger tools have helped a single client recover more than $5 million in lost revenue.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
GEDmatch confirms data breach after users’ DNA profile data made available to police — The company said that during the breach, “Users who did not opt-in for law enforcement matching were also available for law enforcement matching, and conversely, all law enforcement profiles were made visible to Gedmatch users.”
Go SPAC yourself — I’d never heard of SPACs before today, but the latest episode of Equity explains that they could offer a way for companies to go public through a different pricing mechanism.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
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Daily Crunch: Apple and Google block banned apps in India
Banned Chinese apps are beginning to disappear from India’s app stores, Palantir is raising more funding and Venmo starts testing Business Profiles.
Here’s your Daily Crunch for July 2, 2020.
1. Apple and Google block dozens of Chinese apps in India
Two days after India blocked 59 apps developed by Chinese firms, Google and Apple have started to comply with the government’s order and are preventing users in the world’s second-largest internet market from accessing those apps.
UC Browser, Shareit, Club Factory and other apps are no longer listed on Apple’s App Store and Google Play Store. In a statement, a Google spokesperson said that the company had “temporarily blocked access to the apps”on Google Play Store as it reviews the order.
2. SEC filing indicates big data provider Palantir is raising $961M, $550M of it already secured
Palantir, the controversial and secretive big data and analytics provider, has reportedly been eyeing up a public listing this autumn. But in the meantime it’s also continuing to push ahead in the private markets.
3. Venmo begins piloting ‘Business Profiles’ for small sellers
Business Profiles offer small sellers and other sole proprietors the opportunity to have a more professional profile page on its platform. Sellers can share key business details like address, phone number, email, website and more.
4. Tesla delivered 90,650 vehicles in second quarter, a smaller than expected decline
Tesla said Thursday that it delivered 90,650 vehicles in the second quarter, a 4.8% decline from the same period last year, prompted by challenges caused by the COVID-19 pandemic — like suspending production for weeks at its main U.S. factory. But the company still managed to beat expectations despite the headwinds.
5. Top LA investors discuss the city’s post-COVID-19 prospects
From larger fund investors like Mark Suster and Kara Nortman at Upfront Ventures to Dana Settle at Greycroft Partners; to early-stage investors like Will Hsu at Mucker Capital; TX Zhuo at Fika Ventures, the responses were generally upbeat about the future opportunities for Los Angeles startups. (Extra Crunch membership required.)
6. Dish closes Boost Mobile purchase, following T-Mobile/Sprint merger
T-Mobile today announced that it has closed a deal that divests Sprint’s pre-paid businesses, including Boost and Virgin Mobile. The whole thing was a key part of T-Mobile’s bid to merge with Sprint.
7. AR 1.0 is dead: Here’s what it got wrong
Many AR startups made huge promises and raised huge amounts of capital before flaring out in a similarly dramatic fashion. Lucas Matney argues that a key error was thinking that an AR glasses company should be hardware-first, when the reality is that the missing value is almost entirely centered on first-party software experiences. (Extra Crunch membership required.)
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.
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Dear Sophie: Is immigration happening? Who can I hire?
Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
What is going on with recent USCIS furloughs and Trump’s H-1B ban?
I handle recruitment for several tech companies. Is immigration happening? Who can I hire?
—Frustrated in Fremont
Dear Fremont:
Immigration is still possible and I will explain how below. The administration continues to miss the mark with immigration policy. Trump’s U.S. unemployment “solution” of cutting off the stream of global talent to the U.S. is short-sighted. The administration is shooting America in the foot by walling off the promise of post-COVID economic revitalization and job-creation for Americans through the talent of immigrant entrepreneurs, investors and talent.
USCIS just provided a 30-day furlough notice to more than 70% of its employees. Reporters have been reaching out to me every day requesting stories of affected immigrants and HR professionals; please sign up to share your immigration story with journalists.
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Four views: How will the work visa ban affect tech and which changes will last?
The Trump administration’s decision to extend its ban on issuing work visas to the end of this year “would be a blow to very early-stage tech companies trying to get off the ground,” Silicon Valley immigration lawyer Sophie Alcorn told TechCrunch this week.
In 2019, the federal government issued more than 188,000 H-1B visas — thousands of workers who live in the San Francisco Bay Area and other startup hubs hold H-1B and H-2B visas or J and L visas, which are explicitly prohibited under the president’s ban. Normally, the government would process tens of thousands of visa applications and renewals in October at the start of its fiscal year, but the executive order all but guarantees new visas won’t be granted until 2021.
Four TechCrunch staffers analyzed the president’s move in an attempt to see what it portends for the tech industry, the U.S. economy and our national image:
Danny Crichton: Trump’s ban is a “self-inflicted” blow to our precarious economy
America’s economic supremacy is increasingly precarious.
Outsourcing and offshoring led to a generational loss of manufacturing skills, management incompetence killed off many of the country’s leading businesses and the nation now competes directly with China and other countries in critical emerging industries like 5G, artificial intelligence and the other alphabet soup of technological acronyms.
We have one thing going for us that no other country can rival: our ability to attract top talent. No other country hosts more immigrants, nor does any other country capture the imagination of a greater portion of the world’s top minds. America — whether Silicon Valley, Wall Street, Hollywood, Harvard Square or anywhere in between — is where smart people congregate.
Or at least, it was.
The coronavirus was the first major blow, partially self-inflicted. Remote work pushed employers toward keeping workers where they are (both domestically and overseas) rather than centralizing them in a handful of corporate HQs. Meanwhile, students — the first step for many talented workers to enter the United States — are taking a pause, fearing renewed outbreaks of COVID-19 in America while much of the rest of the developed world reopens with few cases.
The second blow was entirely self-inflicted. Earlier this week, President Donald Trump announced that his administration would halt processing critical worker visas like the H-1B due to the current state of the American economy.
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Volcker Rule reforms expand options for raising VC funds
It’s time to put on our thinking caps so we can discuss an esoteric but important policy change and how it is going to impact the VC world.
The 2008 financial crisis devastated the global economy. One of the reforms that came from the detritus of that situation was a policy known as the Volcker Rule.
The rule, proposed by former Fed chairman Paul Volcker and passed into law with the Dodd-Frank Act, was designed to limit the ways that banks could invest their balance sheets to avoid the kind of cataclysmic systemic risks that the world witnessed during the crisis. Many banks faced a liquidity crunch after investing in mortgage-backed securities (MBSs), collateralized debt obligations (CDOs), and other even more arcane speculative financial instruments (like POGs, or Piles Of Garbage) in seeking profits.
A number of reforms are underway to the Volcker Rule, which has been a domestic regulatory priority for the Trump administration since Inauguration Day.
One of the unintended consequences of the rule is that it limited banks from investing in certain “covered funds,” which was written broadly enough that it, well, covered VC firms as well as hedge funds and other private equity vehicles. Reforms to that policy (and to the rule in general) have been proposed for a decade with little traction until recently.
Now, a number of reforms are underway to the Volcker Rule, which has been a domestic regulatory priority for the Trump administration since Inauguration Day.
Proposed amendments to the Volcker Rule could be a lifeline for venture firms hit by market downturn
First, a simplification to some of the rule’s regulations was passed late last year and went into effect in January. Now, a final rule to reform the Volcker Rule’s applications to VC firms, among other issues, was agreed to by a group of U.S. regulatory agencies, and will go into effect later this year.
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China’s GPS competitor is now fully launched
For decades, the United States has had a monopoly on positioning, navigation and timing technology with its Global Positioning System (GPS), a constellation of satellites operated by the military that today provides the backbone for location on billions of devices worldwide.
As those technologies have become not just key to military maneuvers but the very foundation of modern economies, more and more governments around the world have sought ways to decouple from usage of the U.S.-centric system. Russia, Japan, India, the United Kingdom and the European Union have all made forays to build out alternatives to GPS, or at least, to augment the system with additional satellites for better coverage.
Few countries, though, have made the investment that China has made into its Beidou (北斗) GPS alternative. Over 20 years, the country has spent billions of dollars and launched nearly three dozen satellites to create a completely separate system for positioning. According to Chinese state media, nearly 70% of all Chinese handsets are capable of processing signals from Beidou satellites.
Now, the final puzzle piece is in place, as the last satellite in the Beidou constellation was launched Tuesday morning into orbit, according to the People’s Daily.
It’s just another note in the continuing decoupling of the United States and China, where relations have deteriorated over differences of market access and human rights. Trade talks between the two countries have reached a standstill, with one senior Trump administration advisor calling them off entirely. The announcement of a pause in new issuances of H-1B visas is also telling, as China is the source of the second largest number of petitions, according to USCIS, the country’s immigration agency.
While the completion of the current plan for Beidou offers Beijing new flexibility and resiliency for this critical technology, ultimately, positioning technologies are mostly not adversarial — additional satellites can offer more redundancy to all users, and many of these technologies have the potential to coordinate with each other, offering more flexibility to handset manufacturers.
Nonetheless, GPS spoofing and general hacking of positioning technologies remains a serious threat. Earlier this year, the Trump administration published a new executive order that would force government agencies to develop more robust tools to ensure that GPS signals are protected from hacking.
Given how much of global logistics and our daily lives are controlled by these technologies, further international cooperation around protecting these vital assets seems necessary. Now that China has its own fully working system, they have an incentive to protect their own infrastructure as much as the United States does to continue to provide GPS and positioning more broadly to the highest standards of reliability.
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Trump’s worker visa ban will hit Silicon Valley hard
Yesterday, President Donald Trump released an executive order that extended an existing ban on immigrant work visas through the end of the year. The move prohibits immigrants who are outside the United States from applying, but because new visas are generally issued in October, the impacts of the new rules will be felt well into 2021.
The proclamation specifically targets H-1B and H-2B visas, as well as J and L visas. As a result, the San Francisco Bay area, with its high concentration of STEM-based industries, could be disproportionately impacted.
To better understand the executive order’s potential impacts on the startup community — and the tech landscape in general — I interviewed TechCrunch contributor Sophie Alcorn, a Silicon Valley-based immigration lawyer.
TechCrunch: How long does the executive order prohibit issuing new work visas?
Sophie Alcorn: The new ban will last until at least December 31, 2020 and may be continued longer “as necessary.” The government plans to revisit this order within the next month. Every 60 days after that, the Departments of State, Labor and Homeland Security will be recommending modifications if necessary.
What will be some of the initial impacts of suspending new H-1B visas?
Beneficiaries of this spring’s H-1B visa lottery (for government fiscal year 2021) will not be able to apply for visas at consulates this year. Normally after the I-129 petition gets approved in the summer, applicants will go for visa interviews at consulates abroad to request H-1Bs and to enter the U.S. before the October 1 typical start date. That will probably not be possible this year.
For individuals with technical, professional and research backgrounds and companies that engage in research, a big effect is that there won’t be new J-1s issued this year either for interns, trainees, researchers and specialists who are currently abroad.
Do you have a sense of how many J-1 visa holders there are in the Bay Area?
I estimate that there are at least 15,000 J-1 visa holders in the Bay Area. In 2018, California had over 35,000 participants across over 600 sponsors according to the State Department. The purpose of the program is to promote cross-cultural exchange.
J-1s are not just au pairs, who are vital to so many families, including those with special-needs children, but many other types of workers as well. Other examples are post-doctoral researchers at universities such as Stanford and Berkeley in myriad fields. J-1 holders are also conducting advanced research at private tech companies in fields such as AI and semiconductors and genomics.
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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.
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