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Facebook reorganizes Oculus for AR/VR’s long-haul

Facebook is again looking to whip Oculus into shape for its 10-year journey towards making virtual reality mainstream. According to two sources, Facebook reorganized its AR and VR team this week from a divisional structure focused around products to a functional structure focused around technology areas of expertise. While no one was laid off, the change could eliminate redundancies by uniting specialists so they can iterate towards long-term progress rather than being separated into groups dedicated to particular gadgets.

Facebook confirmed the reorg to TechCrunch, with a spokesperson providing this statement: “We made some changes to the AR/VR organization earlier this week. These were internal changes and won’t impact consumers or our partners in the developer community.” Oculus CTO John Carmack and Oculus co-founder/newly-promoted Head of PC VR Nate Mitchell will remain in their leadership positions within VP of AR/VR Andrew ‘Boz’ Bosworth’s hardware wing of the company.

The shift obviously communicates that Facebook believes Oculus could be running more effectively. Organizing the company around areas of expertise rather than broader divisions is probably more appropriate for a moonshot effort that can’t afford redundancies, on the other hand, keeping expertise siloed could isolate new approaches and advancements from reaching other teams. As the company builds out its first full lineup of headsets, there seems to be significant overlap in the tech problems and products bring tackled by those working on mobile and PC products.

TechCrunch reported earlier this week that the company is planning to release a new Rift headset as early as 2019, possibly called the Rift S, which will featured upgraded displays and an inside-out tracking system. The company’s “Rift 2” project, codenamed Caspar, was left behind in the reorganization, a source tells us. We can’t confirm whether any other products or concepts have been shelved.

While an immersive virtual world that users can hang out and communicate in certainly seems to fit Facebook’s broader mission, the company has spent the better part of the past few years deciding how a costly, ambitious venture like Oculus fits into its corporate structure.

First, things went smoothly. The company and its empowered co-founders were building out a developer network and prepping for the launch of their Rift headset after creating a successful partnership with Samsung for the Gear VR. Then, the company’s good fortune turned as the Rift headset was racked by expensive delays and Oculus failed to ship the company’s Touch motion controllers at launch losing some initial ground to HTC. 

By the end of 2016, it was announced that co-founder Brendan Iribe was out as CEO and that the company would be reorganizing around divisions focused on things like PC VR, mobile and content with Xiaomi exec Hugo Barra coming aboard as VP of VR to lead the new effort working directly beneath CEO Mark Zuckerberg. An additional layer of oversight has been built in since then, with Bosworth was put in charge of the company’s consumer hardware ambitions with Oculus as a central pillar. His title is now VP of AR/VR.

The absorption of Oculus deeper into Facebook’s corporate structure was a trend that soon replicated itself as the company looked to rein in the independent teams under a more cohesive vision. The culmination of this was a major executive reshuffle earlier this year that changed the landscape for how divisions within the company were managed.

Now, they’re changing things up even more.

Oculus Go

The new structure sounds like it could coordinate efforts around more general lines like hardware and software allowing insights to flow more intuitively across Facebook’s planned devices.

Given the slow adoption of VR and engineering challenges of AR headsets, which at TechCrunch’s LA conference last month Facebook’s head of AR Ficus Kirkpatrick confirmed it was building, this structure could help Oculus iterate its way to long-term success rather than just getting the next product out the door.

If Facebook is going to beat companies solely focused on AR like Magic Leap, and potential incumbent invaders like Apple if it so chooses, it needs to maximize efficiency. And if it’s going to get both developers and users excited about these next-generation computing platforms, it will have to produce products that make cutting-edge technologies feel unified and accessible. That’s a lot easier when everyone’s not stepping on each other’s virtual shoes.

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Lime will open brick-and-mortar scooter ‘lifestyle stores’

How can Lime differentiate its scooters and bikes from the piles of Birds and Spins filling Los Angeles sidewalks? Apparently with a physical storefront where it can convince customers of the wonders of on-demand mobility. According to a job listing from Lime seeking a “Retail Store Manager,” the startup plans to open a “lifestyle brand store in Santa Monica”.

[Update: Following the publication of this article, Lime responded to our inquiry, telling TechCrunch “In the coming year, Lime will be opening brick & mortar storefronts in major US and international markets, starting with Santa Monica, California. Locations will place heavy importance on community engagement, rider education, and brand experience.”]

Lime will rent vehicles directly from the store as well as charge them, with the full-time manager’s role including “monitoring inventory levels” as well as daily operations, and employee recruiting. They’ll also be throwing live events to build Lime’s hype. Given the company is calling this a lifestyle store, the focus will likely be on showing how Lime’s scooters and bikes can become part of people’s lives and enhance their happiness, rather than on maximizing rental volume.

A rendering of Lime’s new office it’s building in San Francisco. The design could hint at what Lime wants to do with its retail store branding.

TechCrunch has confirmed Lime’s plans for the store, and that the deal to build it came through Lime’s investor Fifth Wall Ventures that arranges partnerships between tech companies and real estate developers. As for what will happen at the store, Fifth Wall’s Adam Demuyakor tells me “There will be deployment of scooters, charging of scooters, and some sales of apparel and accessories that are related. There will be demos, tutorials, and presentations on how to be safe.” Growing Lime’s traction is critical to Fifth Wall, which led the startup’s $70 million Series B extension in February, and joined its $335 million Series C in July.

The big motive here is for Lime to repair relationships with the local community. Demuyakor tells me “when e-mobility companies appeared, some people really loved it, but some people said ‘you dropped a bunch of scooters on my sidewalk’” in what he called a “really irresponsible manner”. But with a physical store front, Lime will have human faces to push its side of the story. “Lime would have an opportunity to control the narrative, engage with the local community, and invest in Santa Monica. They can make it clear that they care about the constituency there . . . Educate them on the benefits, educate them on safety, and provide helmets.” That could counter the idea that scooters just get in the way and are an urban eye sore. “The narrative took on legs of its own” Demuyakor explains.

Fifth Wall worked on the Lime retail store deal with one of its core LPs, Macerich, the third-largest owner of shopping malls in the US. Lime will become the exclusive distributor of scooters at the Macerich-owned open-air mall Santa Monica place. The idea is that by linking up with Macerich, Lime will be able to deploy and charge scooters “where people are coming and going from the mall” Fifth Wall co-founder and managing partner Brendan Wallace tells TechCrunch. He explains that scooter companies have thought about expansion too purely from the standpoint of acheiving market saturation. “You have to partner with local organizations both public and private, and real estate organizations because real estate developers are typically the most politically influential.”]

The listing was first spotted by Nathan Pope, a transportation researcher for consultancy Steer, and later by Cheddar’s Alex Heath. We’ve reached out to Lime and will update if we hear back from the company. Glassdoor shows that the store manager job was posted more than 30 days ago, and the site estimates the potential salary at $41,000 to $74,000.

The sheer number of Lime scooters in Santa Monica where the store will arise is already staggering. Supply doesn’t seem to be bottlenecking as it is in some other cities. Instead, it’s the fierce competition from hometown startups like local favorite Bird that Lime wants to overcome through brick-and-mortar marketing. Often you’ll see scooters from Lime and Bird lined up right next to each other. And with similarly cheap pricing, the decision of which to use comes down to brand affinity. According to Apptopia, Bird’s monthly U.S. downloads surpassed Lime’s in July for the first time ever, despite Lime offering bikes as well as scooters.

There are plenty of people who still have never tried an on-demand electric scooter, and going through the process of renting, unlocking and riding them might be daunting to some. If employees at a physical store can teach people that it’s not too difficult to jump aboard, Lime could become their default scooter. This, of course, comes with risks too, as electric scooters can be dangerous to the novice or uncoordinated. More aggressive in-person marketing might pull in users who were apprehensive about scooting for the right reason — concerns about safety. And there’s also the issue of overhead costs. Beyond charging and repair facilities near its major markets, brick-and-mortar stores could crank up the burn rate on Lime’s $467 million in funding.

As cities figure out how to best regulate scooters, I hope we see a focus on uptime, aka how often the scooters actually function properly. It’s common in LA to rent a scooter, then discover the handlebar is loose or the acceleration is sluggish, end the ride and rent another scooter from the same brand or a competitor in hopes of getting one that works right. I ditched several Lime scooters like this while in LA last week.

Regulators should inquire about what percentage of scooter company fleets are broken and what percentage of rides end within 90 seconds of starting, which is typically due to a malfunctioning vehicle. Cities could then award permits to companies that keep their fleets running, rather than that litter the streets with massive paper weights, or worse, vehicles that could crash and hurt people. Scooters are fun, cheap and therefore accessible to more people than Ubers, and reduce traffic. But unless startups like Lime put a bigger focus on helmets and cautious riding behavior, we could trade congestion on the roads for congestion in the emergency room. Hopefully the retail store will drive closer ties between Lime and city governments to prioritize safety.

This article has been updated to include Lime’s statement as well as comments from Fifth Wall Ventures.

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New York on Tech is helping under-resourced students become future tech leaders

Image: Getty Images/smartboy10/DigitalVision

Jessica Santana and Evin Robinson were riding the subway home from a college leadership conference when they realized they were getting off at the same stop.  It turned out, they had grown up in the same neighborhood, no more than 5 blocks apart.

Years later, both Santana and Robinson were working six-figure jobs in the tech practices of elite corporations but were disheartened by the homogeneity of their surroundings.

The tech industry is the primary generator of new jobs in the US, but the inaccessibility of resources and practical education left students in neighborhoods like Jessica and Evin’s unprepared and unqualified in the eyes of recruiters.

So the pair met at a local Starbucks and on the back of a napkin, they outlined what would become New York on Tech (NYOT).

By offering comprehensive computational courses and a broad professional network, NYOT hopes to provide under-resourced students in New York City with the skills and infrastructure needed for a successful career in tech.

Real skills have led to real results

What began as a passion project with just 20 students has blossomed into an organization helping more than 1000 students across the city.

Unlike the higher-level computer science classes Santana and Robinson saw offered in schools, NYOT aims to focus on more functional skills that are applicable to the day-to-day work of tech professionals.

The program caters its curriculums specifically towards areas it believes are in high demand from today’s hiring managers, including front-end and back-end web development, mobile development and UX design.

Classes are located at the offices of corporate partners, where students get direct mentorship from engineers and observe how technical skills are actually implemented in various roles

Graduates of NYOT are then given the opportunity to interview for internships at each partner organization, where they can gain practical experience and bolster resumes to be more competitive for future recruiting.

The organization points to successes both inside and outside the classroom, noting 100% of graduates in 2016 received admission into four-year colleges, many with scholarships to top engineering programs.

NYOT students have also landed paid internships and jobs with major companies that include Deutsche Bank, Morgan Stanley, and others.  And while the organization admits corporate partners were initially hard to come by, NYOT’s partnership roster now includes some of the most influential names in tech and business, such as Google, NBCUniversal and FactSet.

To date, NYOT has been built largely without city government sponsorship, funded mainly by corporate partnerships, schools, and philanthropic donations.

The company offers its programs for free and partners with schools in high poverty areas of New York City where 50% of students or more are eligible for free lunch.

But NYOT thinks of itself not just as a non-profit providing educational training but as a deep-impact talent accelerator, supplying already capable students with the key resources they lack.

“People automatically think these students are disconnected youth because we say low income and people of color.  They think they’re uninterested in the technology industry”, said the founders.  “That is not true.  They come from areas that are low income or under-resourced but the population of students we work with is super smart, driven, hungry, and motivated.”

Offering more to more people

Going forward, the company plans to add curriculums that it believes fit the future needs of employers, including classes centered on cyber security, artificial intelligence, and machine learning.

On top of serving more students in the New York metropolitan area, Santana and Robinson hope they can bring what they’ve done in New York to a national scale and expand to communities across the country. 

However, the founders emphasize that they will focus on slow effective scaling, crafting curriculums specific to each locality.  “The work we do is really embedded in community.  We’re not designing for that community but designing with it”, said Robinson.

Santana and Robinson’s broader goal is bigger than “diversity” and inclusion.”

“In the industry, we use words like diversity and inclusion.  While we and our work value diversity and inclusion, this is about economic justice”, said Santana. 

“Think about job automation and job displacement.  If our students aren’t getting the most critical training, how can we expect them to compete for the jobs of today and tomorrow?  This is not just about diversity or inclusion, it is about positioning our country’s talent strategy.”

NYOT is now seeing extremely high demand for slots in its programs.  With more qualified applicants than they can actually accept, Santana and Robinson hope to bring on more volunteers to help them break down the barriers of access for as many kids as they can.

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Facebook poaches leaders of Refdash interview prep to work on Jobs

Facebook just snatched some talent to fuel its invasion of LinkedIn’s turf. A source tells TechCrunch that members of coding interview practice startup Refdash including at least some of its executives have been hired by Facebook. The social network confirmed to TechCrunch that members of Refdash’s leadership team are joining to work on Facebook’s Jobs feature that lets business promote employment openings that users can instantly apply for.

Facebook’s big opportunity here is that it’s a place people already browse naturally, so they can be exposed to Job listings even when they’re not actively looking for a company or career change. Since launching the feature in early 2017, Facebook has focused on blue-collar jobs like service and retail industry jobs that constantly need filling. But the Refdash team could give it more experience in recruiting for technical roles, connecting high-skilled workers like computer programmers to positions that need filling. These hirers might be willing to pay high prices to advertise their job listings on Facebook, siphoning revenue away from LinkedIn.

Facebook confirms that this is not an acquisition or technically a full acquihire, as there’s no overarching deal to buy assets or talent as a package. It’s so far unclear what exactly will happen to Refdash now that its team members are starting at Facebook this week, though it’s possible it will shut down now that its leaders have left for the tech giant’s cushy campuses and premium perks. Refdash’s website now says that “We’ve temporarily suspended interviews in order to make product changes that we believe will make your job search experience significantly better.”

Founded in 2016 in Mountain View with an undisclosed amount of funding from Founder Friendly Labs, Refdash gave programmers direct qualitative and scored feedback on their coding interviews. Users would do a mock interview, get graded, and then have their performance anonymously shared with potential employers to match them with the right companies and positions for their skills. This saved engineers from having to endure grueling interrogations with tons of different hirers. Refdash claimed to place users at startups like Coinbase, Cruise, Lyft, and Mixpanel.

A source tells us that Refdash focused on understanding people’s deep professional expertise and sending them to the perfect employer without having to judge by superficial resumes that can introduce bias to the process. It also touted allowing hirers to browse candidates without knowing their biographical details, which could also cut down on discrimination and helps ensure privacy in the job hunting process (especially if people are still working elsewhere and are trying to be discreet in their job hunt).

It’s easy to imagine Facebook building its own coding challenge and puzzles that programmers could take to then get paired with appropriate hirers through its Jobs product. Perhaps Facebook could even build a similar service to Refdash, though the one-on-one feedback sessions it’d conduct might not be scalable enough for Menlo Park’s liking. If Facebook can make it easier to not only apply for jobs but interview for them too, it could lure talent and advertisers away from LinkedIn to a product that’s already part of people’s daily lives.

The co-founders of Refdash have something of a track record in building companies that get acquihired to help add new features to existing services. Nicola Otasevic and Andrew Kearney were respectively the founder and tech lead for Room 77, which was picked up by Google in 2014 to help rebuild its travel search vertical. At the time it was described as a licensing deal although Refdash’s founders these days call it an acquisition.

Building tools to improve the basic process of hiring via remote testing could help Facebook get an edge on technical recruiting, but it’s not the only one building such features. LinkedIn’s stablemate Skype (like LinkedIn, owned by Microsoft) last year unveiled Interviews to let recruiters test developers and others applying for technical jobs with a real-time code editor. LinkedIn has not (yet?) incorporated it into its platform.

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Our 3 favorite startups from Urban-X’s 4th demo day

Urban-X, the urban-tech startup accelerator backed by BMW MINI and early-stage urban-tech fund Urban.Us, hosted a demo day today for its fourth cohort of companies at its Brooklyn HQ.  The seven presenting companies offered solutions to issues plaguing modern cities, including toll-road pricing, energy and construction management, and even the inefficiencies of modern cycling helmets.

In a day that offered an impressive display of entrepreneurial talent, here are a few of the companies that really stood out to us:

Rentlogic

In hopes of improving landlord transparency, Rentlogic uses years of city government data to create objective algorithmic letter ratings for apartment buildings.  As CEO Yale Fox pointed out, despite city-dwellers spending half our paychecks on rent, urban housing hasn’t seen the same rating systems that we use to guide decisions on where we eat, what car we buy, or what shows we binge.  Rentlogic allows apartment hunters to screen buildings before signing a lease and avoid committing to unhealthy conditions or an absentee landlord.

Rentlogic partners with landlords looking to obtain a stamp of quality for potential renters, offering an added inspection feature that allows them to hang a letter rating outside their building. The company’s roster of customers already includes Blackstone and Phipps Houses, the largest for-profit and non-profit landlords in the world, respectively.   

What stands out with Rentlogic is its ability to scale. Though currently only in New York City, the same data used in New York presumably exists across all major US markets and Rentlogic has minimized the cost of entering new cities by building out the back-end infrastructure required to ingest and analyze the data.  From a demand perspective, as renters defer to Rentlogic for quality assurance and more competitors hang “A” ratings outside their buildings, landlords will face more pressure to maintain the same offering. 

The idea hit home for a born-and-bred New Yorker with my own set of landlord horror stories, and the first thing I did when I left was look up my building on Rentlogic.

Campsyte

Most companies wish they had mega-campuses or “motherships” where they could offer employees access to sprawling outdoor working areas. For companies based in urban areas, offering outdoor space can be tough, with many parks often privatized, far from city centers, or void of the amenities needed to be productive. 

Campsyte transforms underutilized urban outdoor spaces into productive and fun spaces that customers can book for co-working purposes, corporate off-sites, or events. Similar to WeWork’s approach with buildings, Campsyte takes a parking lot, and adds value by filling it with greenery, furniture, electricity, WiFi, and other services. With its services driving nearly 10x the annual revenue per square foot seen by traditional parking lots, the value proposition for lot owners is convincing.

Given the competition companies are facing when it comes to attracting and retaining talent, providing the same amenities as competitors based outside city centers seems invaluable, with Campsyte boasting an extremely impressive roster of partner companies, including LinkedIn, PayPal, Salesforce, and Airbnb. 

ODN (Open Data Nation)

As anyone who has driven in a city knows, car crashes or accidents can often be caused by the built environment around you. Yet insurers, who focus on personal characteristics like credit scores when underwriting a policy, lack the measurement tools to assess the risk of someone’s external environment.

Founded by an MIT-trained city planner, ODN builds risk models using machine learning and public data records to help insurers evaluate risk and mitigate accidents. The resulting analytics eases the selection process for insurers, allowing them to drive more sales with less cost and risk. ODN is already partnered up with some of the world’s largest insurers including Zurich, Travelers, and Hanover insurance.

The potential use cases for ODN’s technology go far beyond the massive existing insurance market, with the eventual rollout of autonomous cars forcing insurers to ask how they construct policies when human behavior plays no role in accidents. ODN is working with carriers to help answer this question while helping create a more efficient and fair underwriting process today. 

Other members of Urban-X Cohort 4 included:

Avvir:  “Avvir automates quality assurance for the construction industry, providing real-time insights into the progress and potential defects on a project.”

ClearRoad:  “ClearRoad helps government agencies automate toll road pricing for any section of road without the need for traditional proprietary hardware infrastructure.”

Park & Diamond:  “Park & Diamond makes biking better by reinventing the bike helmet, using next-generation materials to build a safer, more portable helmet that can roll up into the shape of a water bottle for easier carrying, while looking like a regular hat, cap, or beanie.”

Sapient Industries:  “Sapient Industries has developed an autonomous energy management system that senses and learns human behavior in order to eliminate wasted energy in buildings.”

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uBeam wireless power’s CEO Meredith Perry steps aside amidst B2B pivot

After repeatedly missing self-imposed deadlines for progress on its wireless charging-at-a-distance phone case, uBeam’s CEO Meredith Perry has decided to shift out of the CEO position and into a board member and senior advisor role. She’d founded the company in 2011 from her dorm room and brought in over $40 million in funding by selling a wide range of elite investors on her vision for a cordless future, including Andreessen Horowitz, Founders Fund, CrunchFund (disclosure: started by TechCrunch’s founder), Marissa Mayer and Mark Cuban.

Now rather than trying to build its own consumer products like wireless power transmitters and receivers that could charge your phone from across the room using ultrasound frequencies, uBeam is pivoting to licensing its technology for use in other companies’ products.

“Meredith made the decision to step down as CEO. She wanted the company to hire a CEO who had experience in overseeing the rollout of a b2b electronics product,” tweeted one of the startup’s lead investors, Mark Suster of Upfront Capital. Axios’ Dan Primack reported the news earlier today. TechCrunch spoke to Perry but she declined to comment on the record.

For the interim, uBeam’s head of HR and finance Jacqueline McCauley, who joined in 2016, will lead the company. In a blog post today, she announced that “Meredith felt it was time to bring on a seasoned executive in the electronics field to lead the company through its commercialization phase. The company has begun a search for this new CEO.”

uBeam had wowed investors and AllThingsD conference attendees in 2011 with a demo showing it could deliver at least some power over a distance of a few feet. A source at one point said uBeam was holding talks with top retail and dining chains, and insinuated one of the world’s top phone makers might build on its technology.

But the startup made big promises about public demonstrations and the efficiency of its technology it couldn’t keep. In 2015 Perry had told TechCrunch real-life public demos would be ready the next year, which came and went.

In 2016, things started to fall apart. The startup’s former VP of Engineering Paul Reynolds wrote a series of blog posts accusing uBeam’s technology of not working, and noted that “When I left it was an ugly departure, but was reported to the investors as ‘the VP Engineering left for personal reasons’ — personal reasons being ‘sick of putting up with this bullshit.’” He also revealed that uBeam’s original CTO and new CFO had left the company, and that Perry’s co-founder Nora Dweck had sued her over an unfair equity split (and settled).

It wasn’t until 2017 that uBeam gave two limited public demonstrations at the Upfront Ventures conference and to USA Today. It proved that an impractically large uBeam transmitter could deliver enough power over the distance of four to 10 feet to make multiple phones signal they were charging. But the company never opened itself up to more scrutiny regarding just how much power it was delivering, how fast a phone would actually charge and whether the tech could surmount practical issues like phones moving or being blocked by clothing.

Questions began to mount about whether uBeam’s approach could produce a marketable product in a palatable form factor with real utility. In the meantime, larger competitors like WattUp-maker Energous and COTA-maker Ossia have started to make real progress on over the air wireless charging. A recent deep-dive by PC Mag revealed how these two companies are starting to be able to deliver 1 watt of power across a room. But Energous and Ossia executives were careful to be realistic in their predictions about the hurdles to delivering rapid phone charging at a distance and how many years they’d need to get there.

Now with Perry stepping down, uBeam will shift gears and move to the same B2B licensing model Energous and Ossia use. They’ll now be directly competing to get their wireless power transmitters and receivers built into other products such as televisions, sound bar speakers, phone cases and more. But the industry is taking a while to mature. Energous, a public company that had raised $117 million, is trading at $10.62, down from a peak above $22 earlier this year and $15 in mid-2017. Ossia has only raised $25 million.

A bulky early uBeam transmitter prototype

Apple last year announced it was building a less ambitious AirPower near-field wireless charging pad that could juice up an AirPods case sitting on it. That was supposed to arrive in “early 2018,” but there was no mention of it onstage at the recent iPhone XS launch event. Today’s Qi-standard wireless charging pads require direct contact with devices and some fidgeting to get them to connect.

uBeam’s stumbles may make it tough to hire or retain talent, and the organizational disruption amidst direct competition could cost it valuable time as it strives to get its tech ready for licensing. The startup’s audacious idea for a world without wires may still one day come to fruition. There remains big potential in the more technically feasible over the air charging of Internet of Things devices that don’t need much power. But uBeam could serve as a reminder to fellow startups that grand visions might make it easier to secure funding, but can raise expectations that are much harder to fulfill.

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Drone startup Airware crashes, will shut down after burning $118M

Drone operating system startup Airware today suddenly informed employees it will cease operations immediately despite having raised $118 million from top investors like Andreessen Horowitz, Google’s GV, and Kleiner Perkins. The startup ran out of money after trying to manufacture its own hardware that couldn’t compete with drone giants like China’s DJI. The company at one point had as many as 140 employees, all of which are now out of a job.

A source sent TechCrunch screenshots from the Airware alumni Slack channel detailing how the staff was told this morning that Airware would shut down.

Airware makes a cloud sofware system that helps enterprise customers like construction companies, mining operations, and insurance companies reviewing equipment for damages to use drones to collect and analyze aerial data. That allowed companies to avoid using expensive helicopters or dangerous rigs with humans on harnesses to make inspections and gauge work progress.

One ex-employee asked “How do I get my options sent to me on paper so I can burn them all in a fire?😅

Founded in 2011 by Jonathan Downey, the son of two pilots, Airware first built an autopilot system for programming drones to follow certain routes to collect data. It could help businesses check rooftops for damage, see how much of a raw material was coming out of a mine, or build constantly-updated maps of construction sites. Later it tried to build its own drones before pivoting to consult clients on how to most efficiently apply unmanned aerial vehicles.

While flying high, Airware launched its own Commercial Drone Fund for investing in the market in 2015, and acquired 38-person drone analytics startup Redbird in 2016. In this pre-crypto, pre-AI boom, Airware scored a ton of hype from us and others as tried to prove drones could be more than war machines. But over time, the software that shipped with commercial drone hardware from other manufacturers was good enough to make Airware irrelevant, and a downward spiral of layoffs began over the past two years, culminating in today’s shutdown. Demonstating how sudden the shut down is, Airware opened a Tokyo headquarters alongside an investment and partnership from Mitsubishi just four days ago.

“Airware was ahead of the game trying to build their software. So far ahead that the drone hardware on the market wasn’t sophisticated enough to actually produce the granularity of data they needed to test out their software/train their algorithms” an ex-employee told TechCrunch (emphasis ours). “So they spent shitloads of money designing bespoke hardware, including two drones in-house, one multi-rotor called an AT-28, and one fixed-wing called Cygnet. Both projects were scuttled as hardware from DJI and Ebee caught up to needs, after sinking tons of engineering time and manufacturing into them.”

Following TechCrunch’s inquiry about the unnannounced news, Airware confirmed the shut down to us with this statement:

“History has taught us how hard it can be to call the timing of a market transition. We have seen this play out first hand in the commercial drone marketplace. We were the pioneers in this market and one of the first to see the power drones could have in the commercial sector. Unfortunately, the market took longer to mature than we expected. As we worked through the various required pivots to position ourselves for long term success, we ran out of financial runway. As a result, it is with a heavy heart that we notified our team, customers, and partners that we will wind down the business.

This is not the business outcome we had worked so hard for over the years and yet we are deeply proud of our company’s accomplishments and our leadership in driving the adoption of drone powered analytics to improve productivity, mitigate risks, and take workers out of harm’s way.

As we close the book of Airware; we want to thank the partners and customers who believed in us and helped us along the way. And, while it is difficult to say goodbye to our team, we want to thank them for all they have contributed to Airware and the industry. We look forward to seeing how they will take their learnings from Airware to fuel continued innovations in the world around us.”

[Update: Since we broke the news, Airware has put up a “thank you” note about the shutdown informing clients that “A representative from the Airware team will be in touch.”]

An Airware-hardware equipped drone

Employees will get one week’s severance, COBRA insurance until November, and payouts for unused paid time off. It appears the startup wasn’t able to raise necessary funding to save the company or secure an acquisition from one of its strategic partners like Catepillar.

Airware will serve as cautionary tale of startup overspending in hopes of finding product-market fit. Had it been more frugal, saved cash to extend its runway, and given corporate clients more time to figure out how to use drones, Airware might have stayed afloat. Sometimes, even having the most prestigious investors can’t save a startup from mismanagement.

Our ex-employee source concludes that “I think having $118M in the bank led Airware to charge ahead and sink tons of money into force-it-to-work methods rather than exercise a bit of patience and wait for the inevitable advance of hardware to catch up. They had a knack for hiring extremely talented and expensive people from places like Google, Autodesk, there was even SpaceX and NASA alumni there.

They spared no expense ever.”

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10 critical points from Zuckerberg’s epic security manifesto

Mark Zuckerberg wants you to know he’s trying his damnedest to fix Facebook before it breaks democracy. Tonight he posted a 3,260-word battle plan for fighting election interference. Amidst drilling through Facebook’s strategy and progress, he slips in several notable passages revealing his own philosophy.

Zuckerberg has cast off his premature skepticism and is ready to command the troops. He sees Facebook’s real identity policy as a powerful weapon for truth other social networks lack, but that would be weakened if Instagram and WhatsApp were split off by regulators. He’s done with the finger-pointing and wants everyone to work together on solutions. And he’s adopted a touch of cynicism that could open his eyes and help him predict how people will misuse his creation.

Here are the most important parts of Zuckerberg’s security manifesto:

Zuckerberg embraces his war-time tactician role

“While we want to move quickly when we identify a threat, it’s also important to wait until we uncover as much of the network as we can before we take accounts down to avoid tipping off our adversaries, who would otherwise take extra steps to cover their remaining tracks. And ideally, we time these takedowns to cause the maximum disruption to their operations.”

The fury he unleashed on Google+, Snapchat, and Facebook’s IPO-killer is now aimed at election attackers

“These are incredibly complex and important problems, and this has been an intense year. I am bringing the same focus and rigor to addressing these issues that I’ve brought to previous product challenges like shifting our services to mobile.”

Balancing free speech and security is complicated and expensive

“These issues are even harder because people don’t agree on what a good outcome looks like, or what tradeoffs are acceptable to make. When it comes to free expression, thoughtful people come to different conclusions about the right balances. When it comes to implementing a solution, certainly some investors disagree with my approach to invest so much in security.”

Putting Twitter and YouTube on blast for allowing pseudonymity…

“One advantage Facebook has is that we have a principle that you must use your real identity. This means we have a clear notion of what’s an authentic account. This is harder with services like Instagram, WhatsApp, Twitter, YouTube, iMessage, or any other service where you don’t need to provide your real identity.”

…While making an argument for why the Internet is more secure if Facebook isn’t broken up

“Fortunately, our systems are shared, so when we find bad actors on Facebook, we can also remove accounts linked to them on Instagram and WhatsApp as well. And where we can share information with other companies, we can also help them remove fake accounts too.”‘

Political ads aren’t a business, they’re supposedly a moral duty

“When deciding on this policy, we also discussed whether it would be better to ban political ads altogether. Initially, this seemed simple and attractive. But we decided against it — not due to money, as this new verification process is costly and so we no longer make any meaningful profit on political ads — but because we believe in giving people a voice. We didn’t want to take away an important tool many groups use to engage in the political process.”

Zuckerberg overruled staff to allow academic research on Facebook

“As a result of these controversies [like Cambridge Analytica], there was considerable concern amongst Facebook employees about allowing researchers to access data. Ultimately, I decided that the benefits of enabling this kind of academic research outweigh the risks. But we are dedicating significant resources to ensuring this research is conducted in a way that respects people’s privacy and meets the highest ethical standards.”

Calling on law enforcement to step up

“There are certain critical signals that only law enforcement has access to, like money flows. For example, our systems make it significantly harder to set up fake accounts or buy political ads from outside the country. But it would still be very difficult without additional intelligence for Facebook or others to figure out if a foreign adversary had set up a company in the US, wired money to it, and then registered an authentic account on our services and bought ads from the US.”

Instead of minimizing their own blame, the major players must unite forces

“Preventing election interference is bigger than any single organization. It’s now clear that everyone — governments, tech companies, and independent experts such as the Atlantic Council — need to do a better job sharing the signals and information they have to prevent abuse . . . The last point I’ll make is that we’re all in this together. The definition of success is that we stop cyberattacks and coordinated information operations before they can cause harm.”

The end of Zuckerberg’s utopic idealism

“One of the important lessons I’ve learned is that when you build services that connect billions of people across countries and cultures, you’re going to see all of the good humanity is capable of, and you’re also going to see people try to abuse those services in every way possible.”

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Snapchat shares hit all-time low as search acquisition Vurb’s CEO bails

Snapchat’s sagging share price is making it tough to retain talent. Bobby Lo, founder and CEO of mobile search app Vurb that Snap Inc acquired for $114.5 million two years ago is leaving day-to-day operations at the company. That means Lo cut out early on his four-year retention package vesting schedule, which was likely influenced by Snapchat falling to new share price lows. Snap is trading around $9.15 today, compared to its $17 IPO price and $24 first-day close.

That’s down over 7 percent from yesterday following BTIG analyst Rich Greenfield gave Snap a sell rating with a target price of $5 saying “We are tired of Snapchat’s excuses for missing numbers and are no longer willing to give management ‘time’ to figure out monetization.” Greenfield is known as one of the top social network analysts, so people take him seriously when he says “We have been disappointed in SNAP’s product evolution (as have users) and see no reason to believe this will change.”

Vurb is a good example of this. The app let users make plans with friends to visit local places, allowing them to bundle restaurants, movie theaters, and more into shareable decks of search cards. It took over a year after the October 2016 acquisition for the tech to be integrated into Snapchat in the form of context cards in search. But Snap never seemed to figure out how to make its content-craving teen audience care about Vurb’s utility. Snap could have built powerful offline meetup tools out of the cards but never did, and lackluster Snap Map adoption furthered clouded the company’s path forward around local businesses.

Now Lo tells TechCrunch of his departure, “Building experiences at Snap has been a wonderful culmination of my seven-year startup journey with Vurb. My transition to an advisor at Snap lets me continue supporting the amazing people there while directing my time back into startups, starting with investing and advising in founders.”

Lo was early to embrace the monolithic app style pioneered by WeChat in China that’s become increasingly influential in the states. Snap confirmed the departure while trying to downplay it. A spokesperson tells me, “Bobby transitioned to an advisory role this summer, and we appreciate his continued contributions to Snap.”

Given Snap is known to back-weight its stock vesting schedules, Lo could be leaving over half of his retention shares on the table. That decision should worry investors. As a solo founder, Lo already made off with a big chunk of the acquisition price that including $21 million in cash and $83 million in stock, so with the company’s share price so low, he might have had little incentive to stay.

 

Snapchat Context Cards built from Vurb’s acquired technology

Since last July, Snap has lost a ton of talent including SVP of Engineering Tim Sehn, early employee Chloe Drimal, VP of HR and Legal Robyn Thomas and VP of Securities and Facilities Martin Lev, CFO Drew Vollero, VP of product Tom Conrad, TimeHop co-founder Jonathan Wegener, Spectacles team lead Mark Randall, ad tech manager Sriram Krishnan, head of sales Jeff Lucas, and just last week, its COO Imran Khan.

With its user count shrinking, constant competition from Facebook and Instagram, and talent fleeing, it’s hard to see a bright future for Snap. Unless CEO Evan Spiegel, without the help of his departed lieutenants, can come up with a groundbreaking new product that’s not easy to copy, we could be looking at downward spiral for the ephemeral app. At what point must Snap consider selling itself to Google, Apple, Tencent, Disney, or whoever will take on the distressed social network?

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Instacart brings on Mark Schaaf as Chief Technology Officer

Instacart has brought on Mark Schaaf as Chief Technology Officer.

Schaaf previously held positions at AdMob, which was acquired by Google in 2009 for $750 million. From there, he went on to build and lead a team at Google within the mobile display ad business. In 2015, Schaaf left Google to join Thumbtack as CTO.

Schaaf has been working on marketplace businesses since 2006, and explained that Instacart represents a particularly interesting marketplace to continue scaling.

“Thumbtack is a more consumer-focused marketplace with local service professionals and consumers, but Instacart gets even more complex,” said Schaaf. “It’s a four-sided marketplace, and then you overlay it with logistics. The goal is to make the physical world better with technology, and to build a tech core that solves a problem in the physical world.”

Though the company wouldn’t disclose current numbers around engineers, Schaaf plans to double the size of the engineering team by the end of 2019. According to Schaaf, there are a number of different marketplace dynamics at play to keep the engineering team busy: balancing supply and demand, logistics and routing, efficient batching and routing, and overlaying geography to all of that.

“When you think of all that, it brings up the classic engineering problem of the traveling salesman,” said Schaaf. “This will take a lot of data science modeling and algorithmic work, a lot of AI and machine learning, to make Instacart as efficient as possible.”

Instacart has been on a bit of a hiring spree lately, bringing on David Hahn as Chief Product Officer and Dani Dudeck as its first Chief Communications Officer. TechCrunch also learned that Instacart’s Chief Growth Officer Elliot Shmukler made plans to leave last month, which may signal that another C-Suite hire is imminent.

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