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Epic Games to shut down Houseparty in October, including the video chat ‘Fortnite Mode’ feature
Houseparty, the social video chat app acquired by Fortnite maker Epic Games for a reported $35 million back in 2019, is shutting down. The company says Houseparty will be discontinued in October when the app will stop functioning for its existing users; it will be pulled from the app stores today, however. Related to this move, Epic Games’ “Fortnite Mode” feature, which leveraged Houseparty to bring video chat to Fortnite gamers, will also be discontinued.
Founded in 2015, Houseparty offered a way for users to participate in group video chats with friends and even play games, like Uno, trivia, Heads Up and others. Last year, Epic Games integrated Houseparty with Fortnite, initially to allow gamers to see live feeds from friends while gaming, then later adding support to livestream gameplay directly into Houseparty. At the time, these integrations appeared to be the end goal that explained why Epic Games had bought the social startup in the first place.
Now, just over two years after the acquisition was announced, and less than half a year since support for livestreaming was added to the app, Houseparty is shutting down.
The company didn’t offer any solid insight into what, at first glance, feels like an admission of failure to capitalize on its acquisition. But the reality is that Epic Games may have something larger in store beyond just video chat. That said, all Epic Games would say today is that the Houseparty team could no longer give the app the attention it required — a statement that indicates an executive decision to shift the team’s focus to other matters.
While none of the Houseparty team members are being let go as a result of this move, we’re told, they will be joining other teams where they will work on new ways to allow for “social interactions” across the Epic Games family of products. The company’s announcement hinted that those social features would be designed and built at the “metaverse scale.”
The “metaverse” is an increasingly used buzzword that references a shared virtual environment, like those provided by large-scale online gaming platforms such as Fortnite, Roblox and others. Facebook, too, claims the metaverse is the next big gambit for social networking, with CEO Mark Zuckerberg having described it as an “embodied internet that you’re inside of rather than just looking at.”
To some extent, Fortnite has begun to embrace the metaverse by offering non-gaming experiences like online concerts you attend as your avatar, and other live events. Ahead of its shutdown, Houseparty also toyed with live events that users would co-watch and participate in alongside their friends.
An Epic Games spokesperson tells TechCrunch the Houseparty team has worked on (and continues to work on) a number of other projects that focus on social. But some of the “multiple, larger projects” Epic Games has in the works remain undisclosed, we’re told.
In terms of social products, Houseparty’s technology now underpins all of Fortnite voice chat and the features they built are widely available for free to developers through Epic Games Services. They also worked on building out new social experiences, which have ranged from the social RSVP functions for Fortnite’s global events, like the recent Ariana Grande concert, to the upcoming “Operation: Sky Fire” event for collaborating quests and other game mechanics. More social functionality and new experiences are also being built into Fortnite’s user-generated content platform, Create Mode.
While it may seem odd to close an app that only last year experienced a boost in usage due to the pandemic, it appears the COVID bump didn’t have staying power.
At the height of lockdowns, Houseparty had reported it had gained 50 million new sign-ups in a month’s time as users looked to video apps to connect with family and friends while the world was shut down. But as the pandemic wore on, other video chat experiences gained more ground. Zoom, which had established itself as an essential tool for remote work, became a tool for hanging out with friends after-hours, as well. Facebook also started to eat Houseparty’s lunch with its debut of drop-in video chat “Rooms” last year, which offered a similar group video experience. And bored users shifted to audio-based social networking on apps like Clubhouse or Twitter Spaces.
Image Credits: Apptopia
According to data from Apptopia, Houseparty has been continually declining since the pandemic bump. To date, its app has seen a total of 111 million downloads across iOS and Android, with the majority (63 million) on iOS. The U.S. was Houseparty’s largest market, accounting for 43.4% of downloads, followed by the U.K. (9.8%), then Germany (5.6%).
Epic Games, meanwhile, said the app served “tens of millions” of users worldwide. It insists the closure wasn’t decided lightly, nor was the decision to shutter “Fortnite Mode” made due to lack of adoption.
Houseparty will alert users to the shutdown via in-app notifications ahead of its final closure in October. At that point, Fortnite Mode will also no longer be available.
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Instagram will require users to provide their birthday
Instagram will begin prodding users to share their birthday with the service, if they haven’t already done so. The company today announced it will now start popping up a notification that asks you to add your birthday to “personalize your experience.” But the prompt can only be dismissed a handful of times before becoming a requirement. The move is a part of Instagram’s larger goal to create new safety features aimed at younger users, the company explains. This includes the teen privacy protections introduced earlier this year, as well as Instagram’s longer-term plan to launch a version of its service aimed at users under the age of 13.
This March, Instagram rolled out new features that made it more difficult for adults to contact teens through its app. Then in July, the company announced a larger series of changes to the default settings for new users under the age of 16. It will now default these users’ accounts to “private” and limit their accounts from being suggested elsewhere in the app. It also now restricts adults whose accounts are flagged as “potentially suspicious” from being able to reach out to other minors or interact with their posts.
Starting this week, Instagram says users who have not yet shared their birthday will begin to see pop-up notifications when they open the Instagram app.
These notifications will appear a handful of times, but at some point, users will no longer be able to dismiss the message by tapping “Not Now.” Instead, everyone will ultimately be required to share their birthday to continue to use Instagram.
The company will also now request you to share your birthday information when you come across a post with a warning screen. These screens, which hide content that’s flagged as sensitive or graphic, are not new. But Instagram has never before asked for a user’s birthday before displaying the hidden content.
Image Credits: Instagram
The birthday entry form itself is not complex. You simply scroll to choose the month, day and year of your birthday.
Of course, kids are commonly known to lie on these entry forms in order to bypass restrictions when signing up for apps. On this front, Instagram has developed AI technology to help it identify accounts were kids may have lied. For instance, it may be able to infer someone’s birthday based on comments left on “Happy Birthday” posts, where the user’s age may be referenced. The company also hints at further plans in this area, noting how it will later require users to verify their age when Facebook’s technology determines a mismatch between the age the user submitted and what appears to be their real age, based on other signals.
That technology is still in the “early stages,” says Instagram, but will involve a menu of options that will allow someone to verify their age.
The need to have users’ birthdays on hand isn’t only meant to power the recently launched teen protection features. Instagram is also working to bring its app to younger users — a decision that’s been met with a hostile response from legislators and consumer advocacy groups alike. In addition, age remains an important data point for ad targeting. Even as Instagram pulled back on the ability for marketers to target teens using interest data or their activity on other apps, it will continue to allow ad targeting based on age, gender and location across age groups.
The company is now one of several to have rolled out added protections for younger teen users, ahead of regulations that would force them to do so. Over the course of this year, TikTok, YouTube and Google have also announced changes to how younger teens can use their services and how they can be targeted by ads, in anticipation of a regulatory crackdown. While each has crafted its own set of teen safety features independently, the changes have largely addressed making the default settings for new teenage users more restrictive.
Instagram says the new birthday pop-up notifications will begin to appear this week on the mobile app and will continue to roll out over the weeks ahead to reach more users.
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This Week in Apps: In-app events hit the App Store, TikTok tries Stories, Apple reveals new child safety plan
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.
Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.
This Week in Apps offers a way to keep up with this fast-moving industry in one place, with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.
Do you want This Week in Apps in your inbox every Saturday? Sign up here: techcrunch.com/newsletters
Top Stories
Apple to scan for CSAM imagery
Apple announced a major initiative to scan devices for CSAM imagery. The company on Thursday announced a new set of features, arriving later this year, that will detect child sexual abuse material (CSAM) in its cloud and report it to law enforcement. Companies like Dropbox, Google and Microsoft already scan for CSAM in their cloud services, but Apple had allowed users to encrypt their data before it reached iCloud. Now, Apple’s new technology, NeuralHash, will run on users’ devices, tatformso detect when a users upload known CSAM imagery — without having to first decrypt the images. It even can detect the imagery if it’s been cropped or edited in an attempt to avoid detection.
Meanwhile, on iPhone and iPad, the company will roll out protections to Messages app users that will filter images and alert children and parents if sexually explicit photos are sent to or from a child’s account. Children will not be shown the images but will instead see a grayed-out image instead. If they try to view the image anyway through the link, they’ll be shown interruptive screens that explain why the material may be harmful and are warned that their parents will be notified.
Some privacy advocates pushed back at the idea of such a system, believing it could expand to end-to-end encrypted photos, lead to false positives, or set the stage for more on-device government surveillance in the future. But many cryptology experts believe the system Apple developed provides a good balance between privacy and utility, and have offered their endorsement of the technology. In addition, Apple said reports are manually reviewed before being sent to the National Center for Missing and Exploited Children (NCMEC).
The changes may also benefit iOS developers who deal in user photos and uploads, as predators will no longer store CSAM imagery on iOS devices in the first place, given the new risk of detection.
In-App Events appear on the App Store
Image Credits: Apple
Though not yet publicly available to all users, those testing the new iOS 15 mobile operating system got their first glimpse of a new App Store discovery feature this week: “in-app events.” First announced at this year’s WWDC, the feature will allow developers and Apple editors alike to showcase directly on the App Store upcoming events taking place inside apps.
The events can appear on the App Store homepage, on the app’s product pages or can be discovered through personalized recommendations and search. In some cases, editors will curate events to feature on the App Store. But developers will also be provided tools to submit their own in-app events. TikTok’s “Summer Camp” for creators was one of the first in-app events to be featured, where it received a top spot on the iPadOS 15 App Store.
Weekly News
Platforms: Apple
Apple expands support for student IDs on iPhone and Apple Watch ahead of the fall semester. Tens of thousands more U.S. and Canadian colleges will now support mobile student IDs in the Apple Wallet app, including Auburn University, Northern Arizona University, University of Maine, New Mexico State University and others.
Apple was accused of promoting scam apps in the App Store’s featured section. The company’s failure to properly police its store is one thing, but to curate an editorial list that actually includes the scams is quite another. One of the games rounded up under “Slime Relaxations,” an already iffy category to say the least, was a subscription-based slime simulator that locked users into a $13 AUD per week subscription for its slime simulator. One of the apps on the curated list didn’t even function, implying that Apple’s editors hadn’t even tested the apps they recommend.
Tax changes hit the App Store. Apple announced tax and price changes for apps and IAPs in South Africa, the U.K. and all territories using the Euro currency, all of which will see decreases. Increases will occur in Georgia and Tajikistan, due to new tax changes. Proceeds on the App Store in Italy will be increased to reflect a change to the Digital Services Tax effective rate.
Game Center changes, too. Apple said that on August 4, a new certificate for server-based Game Center verification will be available via the publicKeyUrl.
Fintech
Robinhood stock jumped more than 24% to $46.80 on Tuesday after initially falling 8% on its first day of trading last week, after which it had continued to trade below its opening price of $38.
Square’s Cash app nearly doubled its gross profit to $546 million in Q2, but also reported a $45 million impairment loss on its bitcoin holdings.
Coinbase’s app now lets you buy your cryptocurrency using Apple Pay. The company previously made its Coinbase Card compatible with Apple Pay in June.
Social
An anonymous app called Sendit, which relies on Snap Kit to function, is climbing the charts of the U.S. App Store after Snap suspended similar apps, YOLO and LMK. Snap was sued by the parent of child who was bullied through those apps, which led to his suicide. Sendit also allows for anonymity, and reviews compare it to YOLO. But some reviews also complained about bullying. This isn’t the first time Snap has been involved in a lawsuit related to a young person’s death related to its app. The company was also sued for its irresponsible “speed filter” that critics said encouraged unsafe driving. Three young men died using the filter, which captured them doing 123 mph.
TikTok is testing Stories. As Twitter’s own Stories integrations, Fleets, shuts down, TikTok confirmed it’s testing its own Stories product. The TikTok Stories appear in a left-hand sidebar and allow users to post ephemeral images or video that disappear in 24 hours. Users can also comment on Stories, which are public to their mutual friends and the creator. Stories on TikTok may make more sense than they did on Twitter, as TikTok is already known as a creative platform and it gives the app a more familiar place to integrate its effects toolset and, eventually, advertisements.
Facebook has again re-arranged its privacy settings. The company continually moves around where its privacy features are located, ostensibly to make them easier to find. But users then have to re-learn where to go to find the tools they need, after they had finally memorized the location. This time, the settings have been grouped into six top-level categories, but “privacy” settings have been unbundled from one location to be scattered among the other categories.
A VICE report details ban-as-a-service operations that allow anyone to harass or censor online creators on Instagram. Assuming you can find it, one operation charged $60 per ban, the listing says.
TikTok merged personal accounts with creator accounts. The change means now all non-business accounts on TikTok will have access to the creator tools under Settings, including Analytics, Creator Portal, Promote and Q&A. TikTok shared the news directly with subscribers of its TikTok Creators newsletter in August, and all users will get a push notification alerting them to the change, the company told us.
Discord now lets users customize their profile on its apps. The company added new features to its iOS and Android apps that let you add a description, links and emojis and select a profile color. Paid subscribers can also choose an image or GIF as their banner.
Twitter Spaces added a co-hosting option that allows up to two co-hosts to be added to the live audio chat rooms. Now Spaces can have one main host, two co-hosts and up to 10 speakers. Co-hosts have all the moderation abilities as hosts, but can’t add or remove others as co-hosts.
Messaging
Tencent reopened new user sign-ups for its WeChat messaging app, after having suspended registrations last week for unspecified “technical upgrades.” The company, like many other Chinese tech giants, had to address new regulations from Beijing impacting the tech industry. New rules address how companies handle user data collection and storage, antitrust behavior and other checks on capitalist “excess.” The gaming industry is now worried it’s next to be impacted, with regulations that would restrict gaming for minors to fight addiction.
WhatsApp is adding a new feature that will allow users to send photos and videos that disappear after a single viewing. The Snapchat-inspired feature, however, doesn’t alert you if the other person takes a screenshot — as Snap’s app does. So it may not be ideal for sharing your most sensitive content.
Telegram’s update expands group video calls to support up to 1,000 viewers. It also announced video messages can be recorded in higher quality and can be expanded, regular videos can be watched at 0.5 or 2x speed, screen sharing with sound is available for all video calls, including 1-on-1 calls, and more.
Streaming & Entertainment
American Airlines added free access to TikTok aboard its Viasat-equipped aircraft. Passengers will be able to watch the app’s videos for up to 30 minutes for free and can even download the app if it’s not already installed. After the free time, they can opt to pay for Wi-Fi to keep watching. Considering how easy it is to fall into multi-hour TikTok viewing sessions without knowing it, the addition of the addictive app could make long plane rides feel shorter. Or at least less painful.
Chinese TikTok rival Kuaishou saw stocks fall by more than 15% in Hong Kong, the most since its February IPO. The company is another victim of an ongoing market selloff triggered by increasing investor uncertainty related to China’s recent crackdown on tech companies. Beijing’s campaign to rein in tech has also impacted Tencent, Alibaba, Jack Ma’s Ant Group, food delivery company Meituan and ride-hailing company Didi. Also related, Kuaishou shut down its controversial app Zynn, which had been paying users to watch its short-form videos, including those stolen from other apps.
Twitch overtook YouTube in consumer spending per user in April 2021, and now sees $6.20 per download as of June compared with YouTube’s $5.60, Sensor Tower found.
Image Credits: Sensor Tower
Spotify confirmed tests of a new ad-supported tier called Spotify Plus, which is only $0.99 per month and offers unlimited skips (like free users get on the desktop) and the ability to play the songs you want, instead of only being forced to use shuffle mode.
The company also noted in a forum posting that it’s no longer working on AirPlay2 support, due to “audio driver compatibility” issues.
Mark Cuban-backed audio app Fireside asked its users to invest in the company via an email sent to creators which didn’t share deal terms. The app has yet to launch.
YouTube kicks off its $100 million Shorts Fund aimed at taking on TikTok by providing creators with cash incentives for top videos. Creators will get bonuses of $100 to $10,000 based on their videos’ performance.
Dating
Match Group announced during its Q2 earnings it plans to add to several of the company’s brands over the next 12 to 24 months audio and video chat, including group live video, and other livestreaming technologies. The developments will be powered by innovations from Hyperconnect, the social networking company that this year became Match’s biggest acquisition to date when it bought the Korean app maker for a sizable $1.73 billion. Since then, Match was spotted testing group live video on Tinder, but says that particular product is not launching in the near-term. At least two brands will see Hyperconnect-powered integrations in 2021.
Photos
The Photo & Video category on U.S. app stores saw strong growth in the first half of the year, a Sensor Tower report found. Consumer spend among the top 100 apps grew 34% YoY to $457 million in Q2 2021, with the majority of the revenue (83%) taking place on iOS.
Image Credits: Sensor Tower
Gaming
Epic Games revealed the host of its in-app Rift Tour event is Ariana Grande, in the event that runs August 6-8.
Pokémon GO influencers threatened to boycott the game after Niantic removed the COVID safety measures that had allowed people to more easily play while social distancing. Niantic’s move seemed ill-timed, given the Delta variant is causing a new wave of COVID cases globally.
Health & Fitness
Apple kicked out an app called Unjected from the App Store. The new social app billed itself as a community for the unvaccinated, allowing like-minded users to connect for dating and friendships. Apple said the app violated its policies for COVID-19 content.
Google Pay expanded support for vaccine cards. In Australia, Google’s payments app now allows users to add their COVID-19 digital certification to their device for easy access. The option is available through Google’s newly updated Passes API which lets government agencies distribute digital versions of vaccine cards.
COVID Tech Connect, a U.S. nonprofit initially dedicated to collecting devices like phones and tablets for COVID ICU patients, has now launched its own app. The app, TeleHome, is a device-agnostic, HIPAA-compliant way for patients to place a video call for free at a time when the Delta variant is again filling ICU wards, this time with the unvaccinated — a condition that sometimes overlaps with being low-income. Some among the working poor have been hesitant to get the shot because they can’t miss a day of work, and are worried about side effects. Which is why the Biden administration offered a tax credit to SMBs who offered paid time off to staff to get vaccinated and recover.
Popular journaling app Day One, which was recently acquired by WordPress.com owner Automattic, rolled out a new “Concealed Journals” feature that lets users hide content from others’ viewing. By tapping the eye icon, the content can be easily concealed on a journal by journal basis, which can be useful for those who write to their journal in public, like coffee shops or public transportation.
Edtech
Recently IPO’d language learning app Duolingo is developing a math app for kids. The company says it’s still “very early” in the development process, but will announce more details at its annual conference, Duocon, later this month.
Educational publisher Pearson launched an app that offers U.S. students access to its 1,500 titles for a monthly subscription of $14.99. the Pearson+ mobile app (ack, another +), also offers the option of paying $9.99 per month for access to a single textbook for a minimum of four months.
News & Reading
Quora jumps into the subscription economy. Still not profitable from ads alone, Quora announced two new products that allow its expert creators to monetize their content on its service. With Quora+ ($5/mo or $50/yr), subscribers can pay for any content that a creator paywalls. Creators can choose to enable a adaptive paywall that will use an algorithm to determine when to show the paywall. Another product, Spaces, lets creators write paywalled publications on Quora, similar to Substack. But only a 5% cut goes to Quora, instead of 10% on Substack.
Utilities
Google Maps on iOS added a new live location-sharing feature for iMessage users, allowing them to more easily show your ETA with friends and even how much battery life you have left. The feature competes with iMessage’s built-in location-sharing feature, and offers location sharing of 1 hour up to 3 days. The app also gained a dark mode.
Security & Privacy
Controversial crime app Citizen launched a $20 per month “Protect” service that includes live agent support (who can refer calls to 911 if need be). The agents can gather your precise location, alert your designated emergency contacts, help you navigate to a safe location and monitor the situation until you feel safe. The system of live agent support is similar to in-car or in-home security and safety systems, like those from ADT or OnStar, but works with users out in the real world. The controversial part, however, is the company behind the product: Citizen has been making headlines for launching private security fleets outside law enforcement, and recently offered a reward in a manhunt for an innocent person based on unsubstantiated tips.
Funding and M&A
Square announced its acquisition of the “buy now, pay later” giant AfterPay in a $29 billion deal that values the Australian firm at more than 30% higher than the stock’s last closing price of AUS$96.66. AfterPay has served over 16 million customers and nearly 100,000 merchants globally, to date, and comes at a time when the BNPL space is heating up. Apple has also gotten into the market recently with an Affirm partnership in Canada.
Gaming giant Zynga acquired Chinese game developer StarLark, the team behind the mobile golf game Golf Rival, from Betta Games for $525 million in both cash and stock. Golf Rival is the second-largest mobile golf game behind Playdemic’s Golf Clash, and EA is in the process of buying that studio for $1.4 billion.
U.K.-based Humanity raised an additional $2.5 million for its app that claims to help slow down aging, bringing the total raise to date to $5 million. Backers include Calm’s co-founders, MyFitness Pal’s co-founder and others in the health space. The app works by benchmarking health advice against real-world data, to help users put better health practices into action.
YELA, a Cameo-like app for the Middle East and South Asia, raised $2 million led by U.S. investors that include Tinder co-founder Justin Mateen and Sean Rad, general partner of RAD Fund. The app is focusing on signing celebrities in the regions it serves, where smartphone penetration is high and over 6% of the population is under 35.
London-based health and wellness app maker Palta raised a $100 million Series B led by VNV Global. The company’s products include Flo.Health, Simple Fasting, Zing Fitness Coach and others, which reach a combined 2.4 million active, paid subscribers. The funds will be used to create more mobile subscription products.
Emoji database and Wikipedia-like site Emojipedia was acquired by Zedge, the makers of a phone personalization app offering wallpapers, ringtones and more to 35 million MAUs. Deal terms weren’t disclosed. Emojipedia says the deal provides it with more stability and the opportunity for future growth. For Zedge, the deal provides
….um, a popular web resource it thinks it can better monetize, we suspect.
Mental health app Revery raised $2 million led by Sequoia Capital India’s Surge program for its app that combines cognitive behavioral therapy for insomnia with mobile gaming concepts. The company will focus on other mental health issues in the future.
London-based Nigerian-operating fintech startup Kuda raised a $55 million Series B, valuing its mobile-first challenger bank at $500 million. The inside round was co-led by Valar Ventures and Target Global.
Vietnamese payments provider VNLife raised $250 million in a round led by U.S.-based General Atlantic and Dragoneer Investment Group. PayPal Ventures and others also participated. The round values the business at over $1 billion.
Downloads
Mastodon for iPhone
Fans of decentralized social media efforts now have a new app. The nonprofit behind the open source decentralized social network Mastodon released an official iPhone app, aimed at making the network more accessible to newcomers. The app allows you to find and follow people and topics; post text, images, GIFs, polls, and videos; and get notified of new replies and reblogs, much like Twitter.
Xingtu
@_666eveITS SO COOL FRFR do u guys want a tutorial? #fypシ #醒图 #醒图app♬ original sound – Ian Asher
TikTok users are teaching each other how to switch over to the Chinese App Store in order to get ahold of the Xingtu app for iOS. (An Android version is also available.) The app offers advanced editing tools that let users edit their face and body, like FaceTune, apply makeup, add filters and more. While image-editing apps can be controversial for how they can impact body acceptance, Xingtu offers a variety of artistic filters which is what’s primarily driving the demand. It’s interesting to see the lengths people will go to just to get a few new filters for their photos — perhaps making a case for Instagram to finally update its Post filters instead of pretending no one cares about their static photos anymore.
Tweets
Facebook still dominating top charts, but not the No. 1 spot:
Not cool, Apple:
This user acquisition strategy:
Maybe Stories don’t work everywhere:
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Zebra raises $1.1M in a pre-seed round for messaging that pairs photos with voice chat
A new voice-based social app that cites Clubhouse as its biggest inspiration offers a playful new way to stay in touch with close friends and family. Zebra leaves video out of the equation altogether, inviting users to snap on-the-fly photos and send them off paired with casual voice updates.
Zebra focuses on asynchronous sharing, but it also lets users call one another if they’re both already hanging out on the app. The result is a fun and casual way to stay in touch for anyone who doesn’t feel like accidentally getting sucked into Instagram’s endless, ad-strewn feed every time they want to give a friend a quick update.
For now Zebra is a two-person team consisting of CEO Dennis Gecaj, a product designer based in Berlin, and Amer Shahnawaz, Zebra’s head of engineering, who previously worked on Snap Maps at Snapchat. The pre-seed funding was led by Alexis Ohanian’s fresh early-stage venture firm Seven Seven Six, which the Reddit co-founder announced in June. The app will launch formally in August but is now open for preorders through the App Store and as a beta in TestFlight.
“It’s no secret that we are in the midst of an audio revolution, one that has ushered in a series of new audio-first social platforms and content vehicles,” Ohanian said, noting that Zebra’s unique blend of photos and voice is what caught his eye.
Gecaj sees voice-based social networking as a much richer alternative to text-dominant platforms. While products like Instagram allow voice messages and technically let users make voice calls by disabling the camera, voice usually plays second fiddle to video. But video calls are more taxing and require more commitment — it’s no coincidence more and more Zoom cameras blinked offline as the pandemic dragged on.
Unlike Clubhouse, which Gecaj calls a “huge inspiration, Zebra is social audio designed for your inner circle. “With everything opening back up we saw an incredible opportunity for an asynchronous format for that,” he told TechCrunch.
Gecaj hopes that Zebra’s “talking photos” can capture the collective imagination in a way that makes early growth natural. Anyone who downloads Zebra can invite friends individually without needing to share their full contact list (and they’ll need to — you can’t do anything on the app without friends). Because Zebra’s interface is so clean and streamlined, this process is painless and doesn’t necessitate any extra digging through menus.
The idea of a “zebra” — naturally, Zebra is trying to make “zebra” happen — is that people like to see what they are talking about. On a different messaging app, this would require sending a photo and then sending a voice message in quick succession. But on Zebra, sending a photo is the main thing you can do. The app opens right to the camera where you snap a picture. You then hold the photo to record a snippet of voice to go along with it and send it off to friends and family, who appear in a row beneath the camera.
Zebra isn’t worried about the prospect of talking people into downloading another app. Gecaj sees a natural split emerging as creators and audiences increasingly become the focus of social platforms that were initially designed to help friends stay in touch.
“I think the trend is a division between creator platforms where you go to be entertained and platforms you go to hang out with your friends,” Gecaj told TechCrunch.
On top of that, he hopes that Zebra’s dual focus on voice and photos, two aspects of social networking that platforms either don’t prioritize or are actively abandoning, can make it appealing for people who aren’t as interested in video.
“We really also think that text messaging doesn’t have the same emotion as voice… and voice has been really neglected,” Gecaj said. “There’s really a richness to voice, a power to voice that nothing else has.”
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PicPay, the Brazilian mobile payments platform, files for an IPO on Nasdaq
Brazilian mobile payments app PicPay filed on Wednesday an F-1 with the Securities and Exchange Commission (SEC) for an IPO valued at up to $100 million. The company plans to list on the Nasdaq under the ticker symbol PICS.
PicPay operates largely as a financial services platform that includes a credit card, a digital wallet similar to that of Apple Pay, a Venmo-style P2P payments element, e-commerce and social networking features.
“We want to transform the way people and companies interact, make transactions, and communicate in an intelligent, connected, and simple experience,” said José Antonio Batista, CEO of PicPay, in a statement.
While the company is based in São Paulo now and operates across Brazil, PicPay originally launched in Vitoria in 2012, a coastal city north of Rio. In 2015 the company was acquired by the group J&F Investimentos SA, a holding company owned by Brazilian billionaire brothers Wesley and Joesley Batista, which also own the gigantic meatpacker JBS SA.
According to the company’s registration statement, J&F was involved in the biggest corruption scandal in Brazil’s history, known as The Car Wash, and in 2017 entered into a plea deal with the Brazilian Federal Prosecutor. In December 2020 the company agreed to pay a fine of $1.5 billion and contribute an extra $442.6 million to social projects in Brazil. That being said, J&F continues to be a powerful conglomerate in the country, positioning itself as a strong backer for PicPay.
2020 was an explosive year for PicPay as the company saw its active userbase grow from 28.4 million to 36 million as of March 2021. According to the company’s 2020 financial report, which PicPay shared with TechCrunch, the company’s revenues also grew drastically from $15.5 million in 2019, to $71 million in 2020. The company is not yet profitable, however, and PicPay shelled out $146 million in 2020 to fuel its growth.
“We believe that the growth of our base and user engagement in our ecosystem demonstrates the scalability of our business model and reveals a great opportunity to generate more value for these customers,” Batista added.
Fintech is one of the most popular sectors in Brazil today, because there’s a lot of room for improvement in the region. The country has traditionally been controlled by four major banks, which have been slow to adapt to technology and also charge very high fees.
PicPay’s IPO is being led by Banco Bradesco BBI, Banco BTG Pactual, Santander Investment Securities Inc., and Barclays Capital Inc.
*The Brazilian Real was valued at 5.50 to $1 USD on the date of publication.
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Hands on with Telepath, the social network taking aim at abuse, fake news and, to some extent, ‘free speech’
There’s no doubt that modern social networks have let us down. Filled with hate speech and abuse, moderation and anti-abuse tools were an afterthought they’re now trying to cram in. Meanwhile, personalization engines deliver us only what will keep us engaged, even if it’s not the truth. Today, a number of new social networks are trying to flip the old model on its head — whether that’s attempting to use audio for more personal connections, like Clubhouse, eliminate clout chasing, like Twelv, or, in the case of new social network Telepath, by designing a platform guided by rules that focus on enforcing kindness, countering abuse, and disabling the spread of fake news.
Many of these early efforts are already facing challenges.
Private social network Clubhouse has repeatedly demonstrated that allowing free-flowing communication in the form of audio conversations is an area that’s notoriously difficult to moderate. The app, though still unavailable to the broader public, courted controversy in September when it allowed anti-Semitic content to be discussed in one of its chat rooms. In the past, it had also allowed users to harass an NYT reporter openly.
Meanwhile, Twelv, a sort of Instagram alternative, ditches the “Like” button concept and all the other features now overloading Instagram, which had once been just a photo-sharing network. But, unfortunately, this also means there’s no easy way to find and follow interesting users or trends on Twelv — you have to push friends to join the app with you or know someone’s username to look them up, otherwise it shows you no content. The result is a social network without the “social.”
Telepath, meanwhile, is a more interesting development.
It’s pursuing an even loftier goal in social networking — creating a hate speech-free platform where fake news can’t be distributed.
No social network to date has been able to accomplish what Telegraph claims it will be able to do in terms of content moderation. Its ambitions are optimistic and, as the network remains in private beta, they’re also untested at scale.
Though positioned as a different kind of social network, Telepath isn’t actually focused on developing a new sharing format that could encourage participation — the way TikTok popularized the 15-second video clip, for example, or how Snapchat turned the world onto “Stories.”
Instead, Telepath, at first glance, looks very much like just another feed to scroll through. (And given the amount of linked Twitter content in Telepath posts, it’s almost serving as a backchannel for the rival platform.)
The startup itself was founded by former Quora employees, including former Quora Business & Community head, Marc Bodnick, now Telepath Executive Chairman; and former Quora Product Lead, Richard Henry, now Telepath CEO. They’re aided by former Quora Global Writer Relations Lead, Tatiana Estévez, now Telepath Head of Community and Safety; and Ro Applewhaite, previously research staff for Pete Buttigieg for America, now Telepath Head of Outreach.
It’s backed by a couple million in seed funding, led by First Round Capital (Josh Kopelman). Other backers include Unusual Ventures (Andy Johns), Slow Ventures (Sam Lessin), and unnamed angels. Bodnick and his wife, Michelle Sandberg, also invested.
Image Credits: Telepath
When talking about Telepath, it’s clear the founders are nostalgic for the early days of the web — before all the people joined, that is. In smaller, online communities in years past, people connected and made internet friends who would become real-world friends. That’s a moment in time they hope to recapture.
“I’ve benefited a lot by meeting people through the internet, forming relationships and having conversations — that sort of thing,” says Henry. “But the internet just isn’t fun in the ways that it used to be fun.”
He suggests that the anonymity offered by networks like Reddit and Twitter make it more difficult for people to make real-world connections. Telepath, with its focus on conversations, aims to change that.
“If we facilitate a really fun, kind, and empathetic conversation environment, then lots of good things can happen. And it might be that you potentially find someone you want to work with, or you end up getting a job, or you meet new friends, or you end up meeting offline,” Henry says.
Getting Started
To get started on Telepath, you join the network with your mobile phone number and name, find and follow other users, similar to Twitter, then join interest-based communities as you would on Reddit. When you launch the app, you’re meant to browse a home feed where conversation topics from your communities and interesting replies are highlighted — orange for those replies from people you follow and gray for those that Telepath has determined are worth being elevated to the home screen.
As you read through the posts and visit the communities, you can “Thumbs Up” content you like, downvote what you don’t, reply, mute, block, and use @usernames to flag someone.
Image Credits: Telepath, screenshot via TechCrunch
Another interesting design choice: everything on Telepath disappears after 30 days. No one will get to dig through your misinformed posts from a decade ago to shame you in the present, it seems.
What’s most different about Telepath, however, is not the design or format. It’s what’s taking place behind the scenes, as detailed by Telepath’s rules.
Users who join Telepath must agree to “be kind,” which is rule number one. They must also not attack one another based on identity or harass others. They must use a real name (or their preferred name, if transgender), and not post violent content or porn. “Fake news” is banned, as determined by a publisher’s attempts at disseminating misinformation on a regular basis.
Telepath has even tried to formalize rules around how polite conversations should function online with rules like “don’t circle the drain” — meaning don’t keep trying to have the last word in a contentious debate or circumvent a locked thread; and “stay on topic,” which means don’t bombard a pro-x network with an anti-x agenda (and vice versa.)
Image Credits: Telepath
To enforce its rules, Telepath begins by requiring users to sign up with a mobile phone number, which is verified as a “real” number associated with a SIM card, and not a virtual one — like the kind you could grab through a “burner” app.
In order to the create its “kind environment,” Telepath says it will sacrifice growth and hire moderators who work in-house as long-term, trusted employees.
“All the major social networks essentially grew in an unbounded way,” explains Henry. “They had 100 million-plus active users, then were like, ‘okay, now how do we moderate this enormous thing?’,” he continues. “We’re in a lucky position because we get to moderate from day one. We get to set the norms.”
Moderation
“Day one” was a long time in the making, however. The team rebuilt the product four times over a couple of years. Now, they say they’ve developed internal tools that provide moderators with visibility into the system.
According to moderator head Estévez, these include a reporting system, real-time content streams organized in to buckets (e.g. a bucket for “only new users”), as well as various searchable ways to get context around a report or a particular problematic user.
“Really good tools — including real-time streams of content, classifiers for problematic behavior, searchable context, and making it hard for banned users to return — mean that each moderator we hire will be quite scalable. We think that there are network effects around positive behavior,” she says.
Image Credits: Telepath
“It’s our intention to scale up fast and high accuracy moderation decision-making, which means that we’re going to be investing a lot of engineering effort in getting these tools right,” she adds.
The founders have decided not to use any third-party systems to aid in moderation at this time, they told TechCrunch.
“We looked at a bunch of off-the-shelf [moderation systems], and we’re basically building everything that we need from scratch,” says Henry. “We just need more control over being able to tweak how these systems work in order to get the outcome that we want.”
The investment in human moderation over automation will also require additional capital to scale. And Telepath’s decision to not run ads means it will eventually need to consider alternative business models to sustain itself. The company, for now, is interested in subscriptions, but hasn’t made decisions on this front yet.
Banning the trolls
Though Telepath has only 4,000-plus users in its private beta, the two-person moderation team is already tasked with moderating posts from across the thousands of pieces of content shared on a daily basis. (The company doesn’t disclose how many violations it takes action against per day, on average.)
When a user breaks the rules, moderators may first warn them about the violation and may require them to take down or edit a specific post. No one is punished for making a mistake or being unaware of the rules — they’re first given a chance to fix it.
But if a user breaks the rules repeatedly or in a way that seems intentional, such as engaging in a harassment campaign around another user, they are banned entirely. Because of the phone number verification system, they also can’t easily return — unless they go out and purchase a new phone, that is.
These moderation actions don’t necessarily have to follow strict guidelines, like a “three strikes rule,” for example. Instead, the way the rules may be enforced are determined on a case-by-case basis. Where Telepath leans towards stricter enforcement is around intentional and flagrant violations, or those where there’s a pattern of bad behavior. (As with Reply Guys and sealioning behavior.)
In addition, unlike on Facebook and Twitter — platforms that sometimes seem to be caught off guard by viral trends in need of moderation — Telepath intends for nothing to go viral on its platform without having been seen by a human moderator, the company says.
Fake News
Telepath is also working to develop a reputation score for users and trust scores for publishers.
In the case of the former, the goal is help the company determine how likely the user is to break Telepath’s rules. This isn’t developed yet, but would be something used behind the scenes, not put on display for all to see.
For publishers, the trust score will be how factually correct they are what percentage of the time.
Image Credits: Thomas Faull (opens in a new window) / Getty Images
“For example, if the most popular article in terms of views from the publisher is just completely factually incorrect or intentionally misleading…that should have a bigger penalty on the trust score,” explains Henry. “The problem is that the incumbent platforms have rules against disinformation, but the problem is that they don’t enforce them out of this desire to appear balanced.”
Bodnick adds this challenge is not as insurmountable as it seems.
“Our view is that, actually, a handful of outlets are responsible for most of the disinformation…I don’t think our intent is to build out some modern-day truth system that will figure out if The Washington Post is slightly more accurate than The New York Times. I think the main goal will be to identify repeat disinformation publishers — determine that they are perpetual publishers of disinformation, and then crush their distribution,” says Bodnick.
This plan, however, involves setting rules on Telepath that fly in the face of what many today consider “free speech.” In fact, Telepath’s position is that free speech-favoring social networks are a failed system.
“The problem, in our view, is that when you take this free-speech centered approach that sort of says: ‘I don’t care how many disinformation posts Breitbart has published in the last — three years, three months, three weeks — we’re going to treat every new post as if it could be equally likely to be truthful as any other post in the system,’” says Bodnick. “That is inefficient.”
“That’s how we will scale this disinformation rule — by determining which relatively small group of publishers — I’m guessing it’s hundreds, low hundreds — are responsible for publishing lots of disinformation. And then take their distribution down,” he says.
This opinion on free speech is shared by the team.
“We’re trying to build a community, which means that we have to make certain tradeoffs,” adds Estévez. “In the rules we refer to Karl Popper’s paradox of tolerance — to maintain a tolerant society, you have to be intolerant of intolerance. We have no interest in giving a platform to certain kinds of speech,” she notes.
This is the exact opposite approach that conservative social media sites are taking, like Parler and Gab. There, the companies believe in free speech to the point that they’ve left up content posted by an alleged Russian disinformation campaign, saying that no one filed a report about the threat, and law enforcement hadn’t reached out. These MAGA-friendly social networks are also filled with conspiracies, un-fact checked reports, and, frankly, a lot of vitriol.
The expectation is that if you go on their platforms, you’re in charge of muting and blocking trolls or the content you don’t like. But by their nature, those who join these platforms will generally find themselves among like-minded users.
Twitter, meanwhile, tries to straddle the middle ground. And in doing so, has alienated a number of users who think it doesn’t go far enough in counteracting abuse. Users report harassment and threats, then wait for days for their report to be reviewed only to be told the tweet in question didn’t break Twitter’s terms.
Telepath sits on the other end of the spectrum, aggressively moderating content, blocking and banning users if needed, and punishing publications that don’t fact check or those that peddle misinformation.
“Kindness” carve-outs
And yet, despite all this extra effort, Telepath doesn’t always feature only thoughtful and kind-hearted conversations.
That’s because it has carved out an exception in its kindness rule that allows users to criticize public figures, and because it doesn’t appear to be taking action on what could be problematic, if not violating, conversations.
Image Credits: Telepath
A user’s experience in these “gray” areas may vary by community.
Telepath’s communities today focus on hobbies and interests, and can range from the innocuous — like Books or Branding or Netflix or Cooking, for example — to the potentially fraught, like Race in America. In the latter, there have been discussions about the capitalization of “Black” where it was suggested that maybe this wasn’t a useful idea. In another, sympathy is expressed for a person who was falsely pretending to be a person of color.
In a post about affordable housing, someone openly wondered if a woman who said she didn’t want to live near poor people was actually racist. Another commenter then noted that gang members can bring down property values.
A QAnon community, meanwhile, discusses the movement and its ridiculous followers from afar — which is apparently permitted — though supporting it in earnest would not be.
There are also nearly 20 groups about things that “suck,” as in GOPSucks or CNNSucks or QuibiSucks.
Anti-Trump content, meanwhile, can be found on a network called “DumbHitler.”
Meanwhile, online publishers who routinely post discredited information are banned from Telepath, but YouTube is not. So if feel you need to share a link to a video of Rudy Giuliani accusing Biden of dementia, you can do so — so long as you don’t call it the truth.
And you can post opinions about some terrible people in which you describe them as terrible, thanks to the public figure carve-out.
Cheater and deadbeat dad? Go ahead and call them a “disgusting human being.” VP Pence was referred to by a commenter as “SmugFace mcWhitey” and Ronny Jackson is described as “such a piece of sh**.”
Explains Estévez, that’s because Telepath’s “be kind” rule is not intended to protect public figures from criticism.
“It is important to note that toxicity on the internet around politics isn’t because people are using bad words, but because people are using bad faith arguments. They are spreading misinformation. They are gaslighting marginalised groups about their experiences. These are the real issues we’re addressing,” she says.
She also notes that online “civility” is often used to silence people from marginalized groups.
“We don’t want Telepath’s focus on kindness to be turned against those who criticize powerful people,” she adds.
In practice, the way this plays out on Telepath today is that it’s become a private, closed door network where users can bash Trump, his supporters and right-wing politicians in peace from Twitter trolls. And it’s a place where a majority agrees with those opinions, too.
It has, then, seemingly built the Twitter that many on the left have wanted, the way that conservative social media, like Gab and Parler, built what the right had wanted. But in the end, it’s not clear if this is the solution for the problems of modern social media or merely an escape. It also remains to be seen whether a mainstream user base will follow.
Telepath remains in a closed beta of indefinite length. You need an invite to join.
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Waze gets a big visual update with a focus on driver emotions
Crowdsourced navigation platform Waze, which is owned by Google and yet remains a separate, but intertwined product relative to Google Maps, just got one of its biggest UI and design overhauls ever. The new look is much more colorful, and also foregrounds the ability for individual drivers to share their current emotions with Moods, a set of user-selectable icons (with an initial group of 30) that can reflect how you’re feeling as you’re driving.
Moods may seem like a relatively small user-personalization option, but it’s actually a very interesting way for Waze to add another data vector to the crowdsourced info it can gather. In a blog post describing the feature, Waze Head of Creative Jake Shaw talks about the added Mood set, which builds upon the Moods feature previously available in Waze and greatly expands the set of expressible emotions.
“The fundamental idea of Moods has always been the same: to reflect how users feel on the road,” he wrote. “We had a lot of fun exploring the range of emotions people feel out there. A dozen drivers could all feel different in the exact same situation, so we set about capturing as many of those feelings as possible. This was critical to us, because the Moods act as a visual reminder of all of us out there, working together.”
Extending Moods to be more varied and personalized definitely has the advantage of being more visually appealing, and that could serve to boost its engagement among the Waze user community. They don’t mention this explicitly, but you can imagine that combining this as a sort of sentiment measure along with other crowd-reported navigational details, including traffic status, weather conditions, construction and more, could ultimately help Waze build a much richer data set and resulting analyses for use in road planning, transportation infrastructure management and more.
This update also includes a full refresh of all the app’s interfaces, using colored shapes based around a grid system, and new icons for reported road hazards. It’s a big, bright change, and further helps distinguish Waze’s visual identity from that of its sibling Google Maps, too.
Shaw talk repeatedly about the value of the voice of the community in informing this redesign, and it definitely seems interested in fostering further a sense of participation in that community, as distinct from other transportation and navigation apps. Oddly, this serves as a reminder that Google’s most successful social networking product, with the exception maybe of YouTube depending on how you define it, may well be Waze.
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Omidyar-backed Spero Ventures invests in Mexico City’s Mati, a startup pitching ID-verification
Spero Ventures, the venture capital firm backed by eBay founder Pierre Omidyar, has gone to Mexico City for its latest investment, backing the identity verification technology developer Mati.
Launched in San Francisco, the two co-founders Filip Victor and Amaury Soviche, decided to relocate to Mexico because of its proximity to big, untapped markets in Mexico, Brazil and Colombia.
“After developing the technology in San Francisco, we chose to start commercially in Latin America. It has been the perfect petri dish for us: the markets here, especially in Mexico, Brazil and Colombia, are very exciting. These countries have the highest payments fraud rates in the world, which makes their identity issues the most interesting,” said Victor in a statement.
The rise of a new generation of fintech startup across Latin America creates a unique opportunity for Mati in a number of markets — and so does a new generation of financial services regulations, the company said. “We view the fintech regulations sweeping across LatAm as an opportunity to help a lot of promising fintechs and marketplaces get to the next level,” Victor said.
Already working across three countries, with operations in Mexico City, St. Petersburg and San Francisco, Mati is an example of the global scope that even very early-stage companies can now achieve.
Identity verification is at the core of much of the modern gig economy and much of the social networking defining life during a pandemic.
The company said it will use the capital investment — it would not disclose the amount of money it raised — to continue product development and expand its geographic footprint.
The scope of the identity verification problem is what brought Spero to the table to discuss an investment, according to a statement from Shripriya Mahesh, the founding partner at Spero.
“For us, identity is foundational to scaling the vast array of gig economy, fintech, social and commerce platforms that represent our collective future of work,” Mahesh said. “The ability to have safe and trusted interactions at an unprecedented scale, especially with people in places where national identity infrastructure is limited, will create opportunities and global connections we can’t yet even forecast.”
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Openbook is the latest dream of a digital life beyond Facebook
As tech’s social giants wrestle with antisocial demons that appear to be both an emergent property of their platform power, and a consequence of specific leadership and values failures (evident as they publicly fail to enforce even the standards they claim to have), there are still people dreaming of a better way. Of social networking beyond outrage-fuelled adtech giants like Facebook and Twitter.
There have been many such attempts to build a ‘better’ social network of course. Most have ended in the deadpool. A few are still around with varying degrees of success/usage (Snapchat, Ello and Mastodon are three that spring to mine). None has usurped Zuckerberg’s throne of course.
This is principally because Facebook acquired Instagram and WhatsApp. It has also bought and closed down smaller potential future rivals (tbh). So by hogging network power, and the resources that flow from that, Facebook the company continues to dominate the social space. But that doesn’t stop people imagining something better — a platform that could win friends and influence the mainstream by being better ethically and in terms of functionality.
And so meet the latest dreamer with a double-sided social mission: Openbook.
The idea (currently it’s just that; a small self-funded team; a manifesto; a prototype; a nearly spent Kickstarter campaign; and, well, a lot of hopeful ambition) is to build an open source platform that rethinks social networking to make it friendly and customizable, rather than sticky and creepy.
Their vision to protect privacy as a for-profit platform involves a business model that’s based on honest fees — and an on-platform digital currency — rather than ever watchful ads and trackers.
There’s nothing exactly new in any of their core ideas. But in the face of massive and flagrant data misuse by platform giants these are ideas that seem to sound increasingly like sense. So the element of timing is perhaps the most notable thing here — with Facebook facing greater scrutiny than ever before, and even taking some hits to user growth and to its perceived valuation as a result of ongoing failures of leadership and a management philosophy that’s been attacked by at least one of its outgoing senior execs as manipulative and ethically out of touch.
The Openbook vision of a better way belongs to Joel Hernández who has been dreaming for a couple of years, brainstorming ideas on the side of other projects, and gathering similarly minded people around him to collectively come up with an alternative social network manifesto — whose primary pledge is a commitment to be honest.
“And then the data scandals started happening and every time they would, they would give me hope. Hope that existing social networks were not a given and immutable thing, that they could be changed, improved, replaced,” he tells TechCrunch.
Rather ironically Hernández says it was overhearing the lunchtime conversation of a group of people sitting near him — complaining about a laundry list of social networking ills; “creepy ads, being spammed with messages and notifications all the time, constantly seeing the same kind of content in their newsfeed” — that gave him the final push to pick up the paper manifesto and have a go at actually building (or, well, trying to fund building… ) an alternative platform.
At the time of writing Openbook’s Kickstarter crowdfunding campaign has a handful of days to go and is only around a third of the way to reaching its (modest) target of $115k, with just over 1,000 backers chipping in. So the funding challenge is looking tough.
The team behind Openbook includes crypto(graphy) royalty, Phil Zimmermann — aka the father of PGP — who is on board as an advisor initially but billed as its “chief cryptographer”, as that’s what he’d be building for the platform if/when the time came.
Hernández worked with Zimmermann at the Dutch telecom KPN building security and privacy tools for internal usage — so called him up and invited him for a coffee to get his thoughts on the idea.
“As soon as I opened the website with the name Openbook, his face lit up like I had never seen before,” says Hernández. “You see, he wanted to use Facebook. He lives far away from his family and facebook was the way to stay in the loop with his family. But using it would also mean giving away his privacy and therefore accepting defeat on his life-long fight for it, so he never did. He was thrilled at the possibility of an actual alternative.”
On the Kickstarter page there’s a video of Zimmermann explaining the ills of the current landscape of for-profit social platforms, as he views it. “If you go back a century, Coca Cola had cocaine in it and we were giving it to children,” he says here. “It’s crazy what we were doing a century ago. I think there will come a time, some years in the future, when we’re going to look back on social networks today, and what we were doing to ourselves, the harm we were doing to ourselves with social networks.”
“We need an alternative to the social network work revenue model that we have today,” he adds. “The problem with having these deep machine learning neural nets that are monitoring our behaviour and pulling us into deeper and deeper engagement is they already seem to know that nothing drives engagement as much as outrage.
“And this outrage deepens the political divides in our culture, it creates attack vectors against democratic institutions, it undermines our elections, it makes people angry at each other and provides opportunities to divide us. And that’s in addition to the destruction of our privacy by revenue models that are all about exploiting our personal information. So we need some alternative to this.”
Hernández actually pinged TechCrunch’s tips line back in April — soon after the Cambridge Analytica Facebook scandal went global — saying “we’re building the first ever privacy and security first, open-source, social network”.
We’ve heard plenty of similar pitches before, of course. Yet Facebook has continued to harvest global eyeballs by the billions. And even now, after a string of massive data and ethics scandals, it’s all but impossible to imagine users leaving the site en masse. Such is the powerful lock-in of The Social Network effect.
Regulation could present a greater threat to Facebook, though others argue more rules will simply cement its current dominance.
Openbook’s challenger idea is to apply product innovation to try to unstick Zuckerberg. Aka “building functionality that could stand for itself”, as Hernández puts it.
“We openly recognise that privacy will never be enough to get any significant user share from existing social networks,” he says. “That’s why we want to create a more customisable, fun and overall social experience. We won’t follow the footsteps of existing social networks.”
Data portability is an important ingredient to even being able to dream this dream — getting people to switch from a dominant network is hard enough without having to ask them to leave all their stuff behind as well as their friends. Which means that “making the transition process as smooth as possible” is another project focus.
Hernández says they’re building data importers that can parse the archive users are able to request from their existing social networks — to “tell you what’s in there and allow you to select what you want to import into Openbook”.
These sorts of efforts are aided by updated regulations in Europe — which bolster portability requirements on controllers of personal data. “I wouldn’t say it made the project possible but… it provided us a with a unique opportunity no other initiative had before,” says Hernández of the EU’s GDPR.
“Whether it will play a significant role in the mass adoption of the network, we can’t tell for sure but it’s simply an opportunity too good to ignore.”
On the product front, he says they have lots of ideas — reeling off a list that includes the likes of “a topic-roulette for chats, embracing Internet challenges as another kind of content, widgets, profile avatars, AR chatrooms…” for starters.
“Some of these might sound silly but the idea is to break the status quo when it comes to the definition of what a social network can do,” he adds.
Asked why he believes other efforts to build ‘ethical’ alternatives to Facebook have failed he argues it’s usually because they’ve focused on technology rather than product.
“This is still the most predominant [reason for failure],” he suggests. “A project comes up offering a radical new way to do social networking behind the scenes. They focus all their efforts in building the brand new tech needed to do the very basic things a social network can already do. Next thing you know, years have passed. They’re still thousands of miles away from anything similar to the functionality of existing social networks and their core supporters have moved into yet another initiative making the same promises. And the cycle goes on.”
He also reckons disruptive efforts have fizzled out because they were too tightly focused on being just a solution to an existing platform problem and nothing more.
So, in other words, people were trying to build an ‘anti-Facebook’, rather than a distinctly interesting service in its own right. (The latter innovation, you could argue, is how Snap managed to carve out a space for itself in spite of Facebook sitting alongside it — even as Facebook has since sought to crush Snap’s creative market opportunity by cloning its products.)
“This one applies not only to social network initiatives but privacy-friendly products too,” argues Hernández. “The problem with that approach is that the problems they solve or claim to solve are most of the time not mainstream. Such as the lack of privacy.
“While these products might do okay with the people that understand the problems, at the end of the day that’s a very tiny percentage of the market. The solution these products often present to this issue is educating the population about the problems. This process takes too long. And in topics like privacy and security, it’s not easy to educate people. They are topics that require a knowledge level beyond the one required to use the technology and are hard to explain with examples without entering into the conspiracy theorist spectrum.”
So the Openbook team’s philosophy is to shake things up by getting people excited for alternative social networking features and opportunities, with merely the added benefit of not being hostile to privacy nor algorithmically chain-linked to stoking fires of human outrage.
The reliance on digital currency for the business model does present another challenge, though, as getting people to buy into this could be tricky. After all payments equal friction.
To begin with, Hernández says the digital currency component of the platform would be used to let users list secondhand items for sale. Down the line, the vision extends to being able to support a community of creators getting a sustainable income — thanks to the same baked in coin mechanism enabling other users to pay to access content or just appreciate it (via a tip).
So, the idea is, that creators on Openbook would be able to benefit from the social network effect via direct financial payments derived from the platform (instead of merely ad-based payments, such as are available to YouTube creators) — albeit, that’s assuming reaching the necessary critical usage mass. Which of course is the really, really tough bit.
“Lower cuts than any existing solution, great content creation tools, great administration and overview panels, fine-grained control over the view-ability of their content and more possibilities for making a stable and predictable income such as creating extra rewards for people that accept to donate for a fixed period of time such as five months instead of a month to month basis,” says Hernández, listing some of the ideas they have to stand out from existing creator platforms.
“Once we have such a platform and people start using tips for this purpose (which is not such a strange use of a digital token), we will start expanding on its capabilities,” he adds. (He’s also written the requisite Medium article discussing some other potential use cases for the digital currency portion of the plan.)
At this nascent prototype and still-not-actually-funded stage they haven’t made any firm technical decisions on this front either. And also don’t want to end up accidentally getting into bed with an unethical tech.
“Digital currency wise, we’re really concerned about the environmental impact and scalability of the blockchain,” he says — which could risk Openbook contradicting stated green aims in its manifesto and looking hypocritical, given its plan is to plough 30% of its revenues into ‘give-back’ projects, such as environmental and sustainability efforts and also education.
“We want a decentralised currency but we don’t want to rush into decisions without some in-depth research. Currently, we’re going through IOTA’s whitepapers,” he adds.
They do also believe in decentralizing the platform — or at least parts of it — though that would not be their first focus on account of the strategic decision to prioritize product. So they’re not going to win fans from the (other) crypto community. Though that’s hardly a big deal given their target user-base is far more mainstream.
“Initially it will be built on a centralised manner. This will allow us to focus in innovating in regards to the user experience and functionality product rather than coming up with a brand new behind the scenes technology,” he says. “In the future, we’re looking into decentralisation from very specific angles and for different things. Application wise, resiliency and data ownership.”
“A project we’re keeping an eye on and that shares some of our vision on this is Tim Berners Lee’s MIT Solid project. It’s all about decoupling applications from the data they use,” he adds.
So that’s the dream. And the dream sounds good and right. The problem is finding enough funding and wider support — call it ‘belief equity’ — in a market so denuded of competitive possibility as a result of monopolistic platform power that few can even dream an alternative digital reality is possible.
In early April, Hernández posted a link to a basic website with details of Openbook to a few online privacy and tech communities asking for feedback. The response was predictably discouraging. “Some 90% of the replies were a mix between critiques and plain discouraging responses such as “keep dreaming”, “it will never happen”, “don’t you have anything better to do”,” he says.
(Asked this April by US lawmakers whether he thinks he has a monopoly, Zuckerberg paused and then quipped: “It certainly doesn’t feel like that to me!”)
Still, Hernández stuck with it, working on a prototype and launching the Kickstarter. He’s got that far — and wants to build so much more — but getting enough people to believe that a better, fairer social network is even possible might be the biggest challenge of all.
For now, though, Hernández doesn’t want to stop dreaming.
“We are committed to make Openbook happen,” he says. “Our back-up plan involves grants and impact investment capital. Nothing will be as good as getting our first version through Kickstarter though. Kickstarter funding translates to absolute freedom for innovation, no strings attached.”
You can check out the Openbook crowdfunding pitch here.
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Cryptocurrency and a stock market boom pushes TradingView to $37 million in new funding
Fueled by last year’s greed-inducing visions of a cryptocurrency boom and a stock market largely untethered from classical economics, TradingView, a developer of social networking and data analysis tools for financial markets, has raised millions in new venture funding.
The New York-based company just scored $37 million in funding led by the growth-stage investment firm Insight Venture Partners .
TradingView has developed a proprietary, JavaScript-based programming language called PineScript, which lets anyone develop their own customized financial analysis tools. The company “freemium” software as a service model that lets most users connect and exchange trading tips and tricks for free, but begins charging when customers want access to more charts, data and real-time server-side alerts.
There are three payment plans beginning at $15, with a mid-tier at $30 and a high-end $60 per-month premium option.
The company had previously boosted its growth by offering its charting software for free to partner websites like SeekingAlpha, Bitfinex and the Nasdaq. That strategy helped it grow to 8 million monthly active users with around 61 percent coming from direct traffic as of March of this year.
These days the company derives nearly 75 percent of its revenue from those monthly subscription plans to individual traders. TradingView’s executives think the company still has an opportunity to expand its footprint among those retail investors, but it’s also planning to make a push to serve more institutional clients with its toolkit.
For the past seven years the company has enjoyed consistent growth, according to TradingView co-founder and chief operations officer, Stan Bokov.
For Paul Szurek, a vice-president at Insight Venture Partners, the investment in TradingView is building off of broad consumer interest in amateur speculative trading. Looking at RobinHood, Bux and eToro as gateways for new investors who eventually move on to more sophisticated tools, Szurek said that TradingView was often their next step into market investing.
“The rise of cryptocurrencies… and trading those assets… has flywheeled into a broader interest in investing across asset classes,” Szurek said.
While TradingView was never crypto-focused, according to Bokov, the company was supportive from the beginning and it’s been a boon to the broader business. “They came for crypto. They stayed for the other stuff,” Bokov said.
And crypto might just be the gateway drug for younger speculative traders to start investing in financial markets more broadly, according to Szurek. “October to January, during the real core of the crypto boom here, there were a lot of users coming in starting out researching that asset class broadly. Eighty percent move on to research other asset classes,” he said. “As TradingView kind of pushed through the [first quarter], trends in growth really diverged from what we were seeing in purely crypto-focused business and that’s a testament to users leveraging this one-stop-shop component of the platform.”
Additional investors in the new TradingView include DRW Venture Capital and Jump Capital. The company was a graduate of the 2013 Techstars Chicago batch and was seeded by Irish Angels, Techstars, iTech Capital and undisclosed angel investors.
“TradingView was built for non-professional traders, but its accessible trading tools and powerful-yet-intuitive charting capabilities have attracted the attention of institutional investors,” said Kimberly Trautmann, head of DRW Venture Capital, in a statement. “As an investor, we are excited about the diverse cross section of the industry that TradingView has reached and its rapid growth. As a proprietary trading firm on an institutional level, we’re looking forward to leveraging the platform and contributing to its further development.”
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