<span>Monthly Archives</span><h1>August 2019</h1>
    Startups

    Watch YC CEO Michael Seibel chat startups, prices and tech’s center of gravity

    August 22, 2019

    This week, nearly 200 startups convened at Y Combinator Demo Day to pitch venture capitalists, angels and other folks looking to spend some money.

    YC chief executive officer Michael Seibel took some time out of his busy schedule to join us on a special episode of Equity, TechCrunch’s venture-capital-focused podcast. Given that we had Seibel to chat with, Kate and Alex decided to drop the regular format and riff interview-style about what the accelerator program is up to.

    We discussed the new startup batch (roundups here, here, and here), recent changes to the program, rising deal prices, SAFEs versus convertible notes and the future of technology in San Francisco. Regarding price, here’s what Seibel had to say:

    “It’s a competitive market where investors are bidding against each other. So if you see pricing go up you have to ask yourself the question, ‘where is the money supply coming from?’ The big trend over the last six years has been institutional investors moving from just kind of Series A funds and growth funds down to the seed level. When you looked at Demo Day when I was going through the first time it was full of angels – people investing off their own personal balance sheet. And if you look at the room today it’s full of funds. The reality is that, as the pool of capital increases in the seed world, the seed investors are competing against each other and one of the easier ways for investors to compete is to bid up price.”

    But, Seibel continued, YC doesn’t necessarily consider the situation a net-positive, because companies that raise such huge rounds can spend money as though they had reached the fabled “product-market fit,” when in reality they have not. They just have money, which can feel the same but is not.

    Ultimately, the thing that’s going to kill you, Seibel says, isn’t fundraising or who you raised from. The thing that’s going to kill you, he says, is that you didn’t build something your customers wanted.

    Watch a clip from the interview here:

    To hear more from Seibel and watch four more video clips discussing YC, the new class, and the startup game in San Francisco and beyond, become an Extra Crunch member. You can learn more and try it for free. 


    Source: Tech Crunch Startups | Watch YC CEO Michael Seibel chat startups, prices and tech’s center of gravity

    Tech News

    Pew: Mobile and social media users in emerging markets have more diverse social networks

    August 22, 2019

    The latest study from Pew Research Center takes a look at the impact mobile technology, including the use of smartphones and social media, is having on the diversity of people’s social network in emerging markets. For the purpose of the study, Pew surveyed mobile users in 11 key markets: Mexico, Venezuela, Colombia, South Africa, Kenya, India, Vietnam, the Philippines, Tunisia, Jordan and Lebanon. It found that users in these markets had broader social networks than those without smartphones and social media.

    In the U.S., we’ve been concerned with social media’s ability to create “filter bubbles” — meaning how we surround ourselves online with people who hold the same opinions as us, which is then reinforced by social media’s engagement-focused algorithms. This leads us to believe, sometimes in error, that what we think is the most correct and most popular view.

    According to Pew’s study, emerging markets are experiencing a somewhat different phenomenon.

    Instead of isolation, the study found that smartphone users in these markets, and particularly those who also used social media, were more regularly exposed to people with different racial and ethnic backgrounds, different religious preferences, different political parties and different income levels, compared to those without a smartphone.

    In Mexico, for example, 57% of smartphone owners regularly interacted with people of other religions, while only 38% of those without a smartphone did. And more than half (54%) interact with people who supported different political parties. They were also 24% more likely to interact with people of different income levels, and 17% more likely to interact with people of different ethnic or racial backgrounds.

    PI PG 2019.08.22 Social Networks Emerging Economies 0 01

    These sorts of trends help up across the nations studied, Pew noted, with a median of 66% saying they interacted with people with different income levels, 51% saying they interacted with a those of different race or ethnicity, 50% saying they interacted with those having different religious views and a median 44% saying they interacted with those who supported a different political party.

    The use of social media and messaging apps was found to be a huge contributor here, as it made people more likely to encounter people different from them, the study also said.

    The report, however, isn’t claiming that smartphones and the related social media use are the cause of this increase in diversity in these people’s lives. There may be other reasons for that. Smartphone owners, in general, may have more resources and money — they own a smartphone, after all — and this alone could help expose them to a more diverse group of people.

    That said, smartphones are helping people stay connected to distant family and friends, and build out online networks of people they don’t ever see in person.

    More than half the people in most of the surveyed countries said they only see in person half — or fewer — of the people they call or text. Indeed, 93% said they keep in touch with far-flung contacts. And a median of 46% said they see few or none of their Facebook friends regularly.

    All this connecting isn’t seen as being fully positive, however.

    An earlier Pew report found that users in these 11 countries believe the internet and social media are making people more divided in their opinions and only sometimes more accepting of different views. Exposure to diversity and acceptance of it are different things.

    The new report also gets into how smartphones are used. For example, a median of 82% said they texted, 69% took photos or videos, 61% looked up health information, 47% looked up news and political information and 37% looked up information about government resources.

    It also examined smartphones’ impact on digital divides, noting that people with access to these devices and social media, as well as younger people, those with higher levels of education and men, were gaining more benefits than others.

    The study is based on in-person interviews conducted by D3 Systems, Inc. and the results are based on national samples, notes Pew.

    The full report is available here, with deeper dives on activities and data by individual countries.

    Source: Tech Crunch Mobiles | Pew: Mobile and social media users in emerging markets have more diverse social networks

    Startups

    Tumblr’s next step forward with Automattic CEO Matt Mullenweg

    August 22, 2019

    After months of rumors, Verizon finally sold off Tumblr for a reported $3 million — a fraction of what Yahoo paid for the once mighty blogging service back in 2013.

    The media conglomerate (which also owns TechCrunch) was clearly never quite sure what to do with the property after gobbling it up as part of its 2016 Yahoo acquisition. All parties have since come to the conclusion that Tumblr simply wasn’t a good fit under either the Verizon or Yahoo umbrella, amounting to a $1.1 billion mistake.

    For Tumblr, however, the story may still have a happy ending. By all accounts, its new home at Automattic is a far better fit. The service joins a portfolio that includes popular blogging service WordPress.com, spam filtering service Akismet and long-form storytelling platform, Longreads.

    In an interview this week, Automattic founder and CEO Matt Mullenweg discussed Tumblr’s history and the impact of the poorly received adult content restrictions. He also shed some light on where Tumblr goes from here, including a potential increased focused on multimedia such as podcasting.

    Brian Heater: I’m curious how [your meetings with Tumblr staff] went. What’s the feeling on the team right now? What are the concerns? How are people feeling about the transition?


    Source: Tech Crunch Startups | Tumblr’s next step forward with Automattic CEO Matt Mullenweg

    Tech News

    Mobile gaming is a $68.5 billion global business, and investors are buying in

    August 22, 2019

    By the end of 2019, the global gaming market is estimated to be worth $152 billion, with 45% of that, $68.5 billion, coming directly from mobile games. With this tremendous growth (10.2% YoY to be precise) has come a flurry of investments and acquisitions, everyone wanting a cut of the pie. In fact, over the last 18 months, the global gaming industry has seen $9.6 billion in investments and if investments continue at this current pace, the amount of investment generated in 2018-19 will be higher than the eight previous years combined.

    What’s interesting is why everyone is talking about games, and who in the market is responding to this — and how.

    The gaming phenomenon

    Today, mobile games account for 33% of all app downloads, 74% of consumer spend and 10% of all time spent in-app. It’s predicted that in 2019, 2.4 billion people will play mobile games around the world — that’s almost one-third of the global population. In fact, 50% of mobile app users play games, making this app category as popular as music apps like Spotify and Apple Music, and second only to social media and communications apps in terms of time spent.

    In the U.S., time spent on mobile devices has also officially outpaced that of television — with users spending eight more minutes per day on their mobile devices. By 2021, this number is predicted to increase to more than 30 minutes. Apps are the new prime time, and games have grabbed the lion’s share.

    Accessibility is the highest it’s ever been as barriers to entry are virtually non-existent. From casual games to the recent rise of the wildly popular hyper-casual genre of games that are quick to download, easy to play and lend themselves to being played in short sessions throughout the day, games are played by almost every demographic stratum of society. Today, the average age of a mobile gamer is 36.3 (compared with 27.7 in 2014), the gender split is 51% female, 49% male, and one-third of all gamers are between the ages of 36-50 — a far cry from the traditional stereotype of a “gamer.”

    With these demographic, geographic and consumption sea-changes in the mobile ecosystem and entertainment landscape, it’s no surprise that the game space is getting increased attention and investment, not just from within the industry, but more recently from traditional financial markets and even governments. Let’s look at how the markets have responded to the rise of gaming.

    Image courtesy of David Maung/Bloomberg via Getty Images

    Games on games

    The first substantial investments in mobile gaming came from those who already had a stake in the industry. Tencent invested $90 million in Pocket Gems and$126 million in Glu Mobile (for a 14.6% stake), gaming powerhouse Supercell invested $5 million in mobile game studio Redemption Games, Boom Fantasy raised $2M million from ESPN and the MLB and Gamelynx raised $1.2 million from several investors — one of which was Riot Games. Most recently, Ubisoft acquired a 70% stake in Green Panda Games to bolster its foot in the hyper-casual gaming market.

    Additionally, bigger gaming studios began to acquire smaller ones. Zynga bought Gram Games, Ubisoft acquired Ketchapp, Niantic purchased Seismic Games and Tencent bought Supercell (as well as a 40% stake in Epic Games). And the list goes on.

    Wall Street wakes up

    Beyond the flurry of investments and acquisitions from within the game industry, games are also generating huge amounts of revenue. Since launch, Pokémon GO has generated $2.3 billion in revenue and Fortnite has amassed some 250 million players. This is catching the attention of more traditional financial institutions, like private equity firms and VCs, which are now looking at a variety of investment options in gaming — not just of gaming studios, but all those who have a stake in or support the industry.

    In May 2018, hyper-casual mobile gaming studio Voodoo announced a $200 million investment from Goldman Sachs’ private equity investment arm. For the first time ever, a mobile gaming studio attracted the attention of a venerable old financial institution. The explosion of the hyper-casual genre and the scale its titles are capable of achieving, together with the intensely iterative, data-driven business model afforded by the low production costs of games like this, were catching the attention of investors outside of the gaming world, looking for the next big growth opportunity.

    The trend continued. In July 2018, private equity firm KKR bought a $400 million minority stake in AppLovin and now, exactly one year later, Blackstone announced their plan to acquire mobile ad-network Vungle for a reported $750 million. Not only is money going into gaming studios, but investments are being made into companies whose technology supports the mobile gaming space. Traditional investors are finally taking notice of the mobile gaming ecosystem as a whole and the explosive growth it has produced in recent years. This year alone mobile games are expected to generate $55 billion in revenue, so this new wave of investment interest should really come as no surprise.

    A woman holds up her cell phone as she plays the Pokemon GO game in Lafayette Park in front of the White House in Washington, DC, July 12, 2016. (Photo: JIM WATSON/AFP/Getty Images)

    Government intervention

    Most recently, governments are realizing the potential and reach of the gaming industry and making their own investment moves. We’re seeing governments establish funds that support local gaming businesses — providing incentives for gaming studios to develop and retain their creatives, technology and employees locally — as well as programs that aim to attract foreign talent.

    As uncertainty looms in England surrounding Brexit, France has jumped on the opportunity with “Join the Game.” They’re painting France as an international hub that is already home to many successful gaming studios, and they’re offering tax breaks and plenty of funding options — for everything from R&D to the production of community events. Their website even has an entire page dedicated to “getting settled in France,” in English, with a step-by-step guide on how game developers should prepare for their arrival.

    The U.K. Department for International Trade used this year’s Game Developers Conference as a backdrop for the promotion of their games fund — calling the U.K. “one of the most flourishing game developing ecosystems in the world.” The U.K. Games Fund allows for both local and foreign-owned gaming companies with a presence in the U.K. to apply for tax breaks. And ever since France announced their fund, more and more people have begun encouraging the British government to expand their program, saying that the U.K. gaming ecosystem should be “retained and enhanced.” But, not only does the government take gaming seriously, the Queen does as well. In 2008, David Darling, the CEO of hyper-casual game studio Kwalee, was made a Commander of the Order of the British Empire (CBE) for his services to the games industry. CBE is the third-highest honor the Queen can bestow on a British citizen.

    Over in Germany, and the government has allocated €50 million of its 2019 budget for the creation of a games fund. In Sweden, the Sweden Game Arena is a public-private partnership that helps students develop games using government-funded offices and equipment. It also links students and startups with established companies and investors. While these numbers dwarf the investment of more commercial or financial players, the sudden uptick in interest governments are paying to the game space indicate just how exciting and lucrative gaming has become.

    Support is coming from all levels

    The evolution of investment in the gaming space is indicative of the stratospheric growth, massive revenue, strong user engagement and extensive demographic and geographic reach of mobile gaming. With the global games industry projected to be worth a quarter of a trillion dollars by 2023, it comes as no surprise that the diverse players globally have finally realized its true potential and have embraced the gaming ecosystem as a whole.

    Source: Tech Crunch Mobiles | Mobile gaming is a .5 billion global business, and investors are buying in

    Tech News

    US cell carriers team up to combat robocalls — but no deadline set

    August 22, 2019

    Twelve cell carriers, including the four largest — AT&T, Sprint, T-Mobile and Verizon — have promised to make efforts to prevent spoofed and automated robocalls.

    Announced Thursday, the pledge comes after 51 U.S. attorneys general brokered a deal that would see the telecom giants roll out anti-robocalling technologies, including a way of cryptographically signing callers to wipe out phone number spoofing. Known as STIR/SHAKEN, the system relies on every customer phone number having a unique digital signature which, when checked against the cell networks, validates that a caller is real. The carrier near-instantly invisibly approves the call and patches it through to the recipient.

    Robocalls are illegal, but are a billion-dollar industry. Many of these automated, robot-dialed calls imitate a cell number area code to convince unsuspecting victims into picking up the phone. Often robocalls try to sell products they don’t need — or worse, try to con victims out of cash.

    The hope is that STIR/SHAKEN would weed out most robocalls. The system would verify real callers while the billions of illegal or spoofed robocalls made every year would fail.

    So far to date, AT&T and Comcast have tested the new anti-robocalling system, and AT&T and T-Mobile have also teamed up to use the technology to fight robocalls. But the system works best when every carrier uses the technology, allowing calls to be checked even as they traverse between networks. By getting Verizon (which owns TechCrunch), Sprint and the other cell giants on board, the attorneys general hope the cooperation will vastly reduce the number of robocalls each year.

    CenturyLink, Charter and U.S. Cellular have also signed up to the pledge.

    There’s a catch: No deadline was set, allowing the carriers to take as long as necessary to roll out the technology. That may not be good news for those seeking immediate relief. Although all of the major networks have already made some progress in testing the new anti-robocalling system, few have said exactly when their service will be ready to roll out to consumers across the country.

    The Washington Post first reported the news ahead of Thursday’s announcement.

    The pledge comes just weeks after the Federal Trade Commission and the Justice Department took coordinated action against close to a hundred individuals and companies accused of making more than a billion illegal robocalls.

    Source: Tech Crunch Mobiles | US cell carriers team up to combat robocalls — but no deadline set

    Tech News

    Daily Crunch: Apple plans Pro iPhones

    August 22, 2019

    The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

    1. Apple reportedly launching new iPhone Pro and iPads with better cameras, 16-inch MacBook Pro and new AirPods

    Here come the leaks around Apple’s fall hardware event (rumored to be scheduled for September 10). According to Bloomberg, we’ll get new iPhones — including a new Pro model that replaces the XS line and adds a third, wider angle rear camera.

    Beyond 2019, Apple also reportedly has plans for iPhones that support 5G in the next year, plus a more affordable HomePod.

    2. Google ditches desserts as Q becomes Android 10

    Google’s official reasoning is more diplomatic than, “we couldn’t think of anything that started with ‘Q.’ ” Instead, it says that the desserts simply weren’t universal enough for the 2.5 billion active devices it has deployed around the world.

    3. Our 12 favorite startups from Y Combinator’s S19 Demo Day 2

    Over the course of two days, the TechCrunch team witnessed more than 160 on-the-record startup pitches, spanning healthcare, B2B services, augmented reality and life extension. (Extra Crunch membership required.)

    Image via Working Partnerships USA / Jeff Barrera

    4. Hundreds of Uber and Lyft drivers to launch a protest caravan across California

    Over 200 drivers in more than 75 cars plan to drive south to north — with more drivers joining along the way — to take dramatic action in advocating for California State Legislature bill AB5, and for a drivers’ union.

    5. Eminem’s publisher accuses Spotify of copyright infringement in new lawsuit

    Eight Mile Style has filed a lawsuit against Spotify, accusing the service of “blatant copyright infringement” in streaming “Lose Yourself” and other Eminem songs.

    6. Splunk acquires cloud monitoring service SignalFx for $1.05B

    SignalFx provides real-time cloud monitoring solutions, predictive analytics and more. The acquisition should make Splunk a far stronger player in the cloud space.

    7. Google proposes new privacy and anti-fingerprinting controls for the web

    If fully realized, this initiative will make it harder for online marketers and advertisers to track you across the web.

    Source: Tech Crunch Mobiles | Daily Crunch: Apple plans Pro iPhones

    Startups

    How do you build a secure startup? Find out at TechCrunch Disrupt SF

    August 22, 2019

    Security is everything — more so than ever in startup land. But with the constant pressures to launch and scale, how do you build a secure startup from the ground up without slowing growth?

    Whether you’re starting out small or you’re a multinational unicorn, your customers and their data will be your greatest asset. We’re excited to announce three cybersecurity industry experts who know better than anyone how to keep their organizations safe from phishing emails to nation-state attackers — and everything in between.

    We’ll be joined by Google’s Heather Adkins, IOActive’s Jennifer Sunshine Steffens and Duo’s Dug Song, who will discuss those startup security questions at TechCrunch Disrupt SF.

    Adkins, a 16-year Google veteran, runs Google’s information security shop. As an early employee, Adkins built a global team responsible for maintaining the safety and security of Google’s networks, systems and applications as the company has ballooned in size. Her extensive background in network and systems administration has led her to work to build and secure some of the world’s largest infrastructure.

    Steffens, who has spent over a decade at penetration testing and ethical hacking company IOActive, knows all too well how to build a security company. Her team goes into enterprises large and small and finds the weak spots in their security in an effort to fix the flaws before bad actors exploit them. Having worked during the early stages at several successful startups, Steffens brings a world of corporate and security knowledge to the table.

    And Song, who co-founded security giant Duo, led one of the most successful exits in Silicon Valley security startup history following the company’s $2.35 billion acquisition by Cisco last year. Song is a leading voice in the security community, with broad experience in developing security solutions for the enterprises.

    How do these cybersecurity leaders keep ahead of the bad guys — and the insider threats? Join us on the Extra Crunch stage to find out. Tickets to the show, which runs October 2 to October 4, are available here.

    Did you know Extra Crunch annual members get 20% off all TechCrunch event tickets? Head over here to get your annual pass, and then email extracrunch@techcrunch.com to get your 20% off discount. Please note that it can take up to 24 hours to issue the discount code.

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    Source: Tech Crunch Startups | How do you build a secure startup? Find out at TechCrunch Disrupt SF