No one knows how to hire, plus brand design and African tech

Editor’s Note: No one knows how to hire

Hiring is the lifeblood of the world. Few people do truly singular work; instead, nearly every facet of our civilization is built by groups of humans (and increasingly machines) working in tandem.

Image by PeopleImages via Getty Images

That presents quite the puzzle though: if teamwork is so critical to the functioning of, well, everything, why are we so god awfully bad at building teams?

Minus a couple of high functioning teams of course, the evidence for team rot is all around us. Startups go bust when teams of two (i.e. founders) can’t make simple decisions about the future of their business. Large companies exsanguinate cash while their teams spend eons debating the minutia of a pixel in the checkout flow. At even larger scale, massive infrastructure projects like California’s HSR fail because the right people weren’t planning and building it (plus ten other issues of course).

How do we get this so wrong, so consistently?

The first reason, and the one most challenging to overcome, is that human endeavors are fundamentally built upon aspirations. A startup is a dream, no different than improving Excel’s formula editor or adding traffic signals to an intersection. Action cannot happen without aspiration, and so we tend to be far more optimistic with all facets of a plan before execution.

Google Cloud, McDonald’s big tech acquisition, and motivating an engineering team

Our live conference call on Google Cloud Next

Last week at its conference in San Francisco, Google Cloud unveiled a bevy of new features, and we also got to hear for the first time from its head honcho, Thomas Kurian . TechCrunch was on the scene, with enterprise editor Frederic Lardinois and enterprise reporter Ron Miller covering all aspects of this major conference.

They conducted a live conference call with Extra Crunch members last week. In case you missed it, we’ve posted the transcript for members.

New Series: The Exit (this time with Dynamic Yield)

We talk a lot at Extra Crunch about starting companies up, but how do startups exit?

Lucas Matney, one of TechCrunch’s San Francisco-based writers, is developing a new series exploring why certain companies successfully exit. In this inaugural interview, he talks with venture capitalist Adam Fisher of Bessemer about his investment in Dynamic Yield, an adtech (but not really ad-based) startup that exited to (of all places) McDonald’s for a reported $300 million.

Lucas Matney: McDonald’s certainly seems like a bit of an unexpected buyer considering the early history of the company, but at what point in the company’s life cycle did it make sense that they would want to buy this tech? Or are you still a little surprised that this is the deal that went through?

Adam Fisher: Oh, yeah, with these kind of things you have to be skeptical until you see it in writing, and even then, skeptical. You know, as a VC, I’ve seen too many deals never mature to an offer, or even after the offer it’s pulled away. I mean, the less traditional the buyer, the more worried you have to be that something strange will happen, that somebody will change their mind, that somebody will get fired, that something unrelated will happen on the macro level.

So, you know, we were obviously skeptical until there was an offer.

But it was very clear, at a certain point, that the level of engagement was so high and so immense that they were serious, that this wasn’t just an idea that popped up after the had met Dynamic Yield, that they had been thinking about making such an acquisition for quite a while beforehand.

Niantic EC-1, Part 3 and what the data show are the best fundraising decks

Harry Potter, the Platform, and the Future of Niantic

After deep dives into the story of Niantic’s spinout from Google and its creation and development of Pokémon GO, TechCrunch editor Greg Kumparak turns his attention to Niantic’s future, looking at how Harry Potter: Wizards Unite is not just uniting wand-wielders, but also the company’s ambitions in areas as diverse as 5G, China, 3D mapping, and the next-generation of augmented reality.

This is definitely a weekend read (it’s about 25 mins in length), but here’s a taste:

There’s one more piece to this grander AR vision, and it’s perhaps the biggest and most challenging one.

Your phone knows your location, but current GPS tech is really only accurate within a few feet. Even when it’s at its most accurate, it doesn’t always stay there for long. Ever use Google Maps in a big city and had your marker hop around all over the map? That’s probably from the signals bouncing off buildings, vehicles, and all of the myriad metal things around you.

That’s good enough for basic augmented reality functionality seen in Pokémon GO today. But Niantic wants to get closer and closer to the vision of GO’s original trailer, where hundreds of people can look up to see the same Zapdos flying overhead, synchronized in time and space across all of their devices. Where you can gather in a park with friends to watch massive Pokémon battles play out in real time, or leave a virtual gift on a bench for a friend to walk up to and discover. For this, Niantic will need something more precise and more consistent. Like pretty much everything with Niantic, it all goes back to maps.

More specifically, they’ll need to build a 3D map of the environments where people are playing. It’s easy enough to get relatively accurate 3D data about huge things like buildings, but what about everything around those buildings? The statues, the planters, the trees, the bus stops. John [Hanke, Niantic’s CEO], and others in the space, refer to this map as the “AR Cloud.”

AI dumbos, Niantic, mobility, design, and Google Next

Tomorrow: Google Cloud Next conference call

Join TechCrunch’s enterprise mavens Frederic Lardinois and Ron Miller as they discuss what’s happening on the ground and at the (I am sure, very exciting) parties this week at Google Cloud Next in SF. They will talk live tomorrow at 1pm EDT / 10am PDT, and be sure to check your inbox one hour before for the dial-in information.

When to ditch that nightmare customer

No, we are not “firing” any Extra Crunch members — yet. But multi-time founder Joe Procopio has a strong view that not only should you identify your worst customers, you should fire them, stat. Here’s a preview of his personal journey learning this fundamental tenet of startups:

Scooters, remote workers, ethics, the future of fintech, etc.

Editor’s Note: refocused newsletters

It was another dizzying week here at Extra Crunch as you will shortly see in this newsletter.

One change that we are making: we are simplifying our newsletters to keep you better informed on what is happening on Extra Crunch. We are merging the daily, weekly, and article editions of this newsletter into a “roundup” format that will come out twice per week. The goal is to keep the signal high, and the noise in your inbox low.

To control which newsletters you receive from Extra Crunch (and TechCrunch more broadly), feel free to go to our newsletters page while logged in. And as always, if you have feedback, do let me know at [email protected].

Scooters may kill the sharing economy?

TechCrunch’s scooter aficionado Megan Rose Dickey dived into the current state of the scooter market, and came back decidedly non-plussed. Scooters seem like a viable solution to the last-mile problem of urban transportation, but the reality is that the sharing economics behind them are weak, and huge regulatory barriers are being erected that will almost certainly slow their advance. Even worse, sharing may disappear entirely:

The future of scooters and media (but not scooter media!)

We have two great deep dives on the future of scooters and the future of media. Thanks to the many of you who joined our live conference call today with Kate Clark and Kirsten Korosec, where we talked all things Lyft today. If you weren’t able to join us, we will be publishing the transcript in the next few days, and we are going to try to embed the audio as well (we’ve heard your requests and working out a solution as we speak).

The Future of Scooters

 

Our long-time transportation and scooter aficionado Megan Rose Dickey has all the latest on where the scooter world stands today and what’s in store going forward:

Data rules everything around me (D.R.E.A.M.). Cities are relatively down for this new era of transportation and operators are increasingly more willing to share their data with cities. Now, cities just have to find out what to do with this data and how to extract learnings from it.

“We’re able to share more data with those companies which I think is really helpful for policymaking and decision-making but it also helps us to set up rules of the road that meet the needs of everybody in San Francisco,” Maguire said.

A number of startups have emerged in this space, including Populus, Passport and Ride Report.

The Future of Media

TechCrunch media columnist Eric Peckham has an interview with prominent media venture capitalist Pär-Jörgen Pärson of Northzone. His comments on content exclusivity:

In terms of exclusive content, I do believe that the content market, and the idea of exclusivity, is flawed in many ways. And I think Spotify proved it really well. Proved that what the artists or the content owners really need is maximum distribution — and distribution at a certain minimum RPU (revenue per user), of course. But the thing is when you start to restrict distribution, you can get a higher RPU, but the underlying market is still actually eyeballs. So what is ultimately fueling the interest of Man United or the Patriots is the number of people who want to watch their games. If you restrict that, then you’re undermining the company. We saw that when Twitter had acquired the online rights for the NFL…I think it was the Superbowl, a few years back. It was a total disaster for the NFL. They got no eyeballs for that and it really undermined their OTT business.

Thanks

To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to [email protected].

Compliance, ethics, and live calls

Reminder: Live conference call today at 2pm EDT / 11am PDT

We have TechCrunch writers Kirsten Korosec and Kate Clark talking all things tech today — be sure to check your inboxes for dial-in details a bit later today, and come armed with questions!

A roundtable conversation on tech ethics

Our resident humanist and ethicist Greg Epstein published a roundtable conversation with three notable scholars of ethics, debating what exactly is tech ethics and what do the debates around it mean. Hilary Cohen, Kathy Pham, and Jessica Baron had much to offer on the subject, and why it is a bit more complicated than the term suggests.

EC Weekly: Gaming, crypto, shipping and the multiple future strategies of tech

Niantic EC-1

Illustration by Nigel Sussman

Greg Kumparak published the first part of his planned four part EC-1 series on Niantic yesterday, focusing on the founding story of the AR/gaming unicorn from Keyhole and Google Earth to a complicated spinout from Alphabet. Lots of great nuggets on how companies get formed and built, but one I particularly enjoyed was this one:

Like most companies, Google doesn’t like when employees leave. Especially employees who ran key parts of the company for years. Leaving means competition. Leaving means potential opportunities lost.

John [Hanke, CEO of Niantic] eventually sat down with Larry Page to figure out what it’d take to keep him within Google . They talked about John’s interest in augmented reality. They talked about a book called Freedom™ by David Suarez, which centers around an out-of-control AI that taps a network of real-world operatives to control the world (the earliest hints of Niantic’s first game, Ingress, already sneaking in here years before it’s made.)

John wanted to take his interest in AR and his background in maps and gaming and mash them all up and see what it could look like. Larry wanted it to happen within Google.

What I loved is that Eliot Peper wrote a piece for Extra Crunch just a few weeks ago about the importance of speculative fiction in the creation of startups, and also gave a guide on just what books he recommends to find your next startup.

Expect Part 2 of the Niantic EC-1 to drop early next week as we do a rolling release.

Game streaming is the new battlefield among tech giants

Bryce Durbin / TechCrunch

Game streaming is quickly becoming one of the most important strategic arenas for owning users, with offerings from all major tech and gaming companies. Devin Coldewey provided a comprehensive strategic overview of the stakes involved this week, and why so much money is being poured into a technology that until now seemed impossible due to bandwidth and latency. It’s like Super Smash Bros: Tech Melee edition:

Form D filings, logistics, and Niantic

From Extra Crunch

  • I wrote a comprehensive look at the new norms around Form D filings, which are filed with the SEC after a venture round closes. Those who’ve read this newsletter for a while know that I’ve been researching this topic for some months now. This is the sort of story that I love: a technical issue, but one with freakishly large consequences for founders and frankly for society in general. Do have a read if you have no idea what a Form D is or why it is important.
  • John Eden has a look at how software and regulations are opening up the shipping and logistics space for startups and greater competition.
  • The first part of the Niantic EC-1 drops later today – do take a look at the Extra Crunch stream a few hours from now to catch it all early.

Wide Angle

Photo by Stephen McCarthy / RISE via Sportsfile

Stories from outside the 280/101 corridor

How to delay your Form Ds (or not file them at all)

Building a startup is incredibly tough. There are the constant ups and downs, the moments of sheer ambiguity and terror. And so, few moments in a startup’s life are as triumphant — and crystal clear — as closing a round of funding. Yes, yes, raising venture capital shouldn’t be celebrated as a milestone, and the focus should always be on product and users … but it just feels so damn good sometimes just to feel that sense of euphoria: I built something, and now others are giving me potentially millions of dollars to shoot for the stars.

Unfortunately, that clarity is increasingly vanishing. First, “closing a round” is rarely as sharp a distinction as it used to be. Seed rounds (and even later-stage rounds) are often raised over extended periods of time, with many partial closings conducted as new angels and seed funds come to the (cap) table.

Then there is also the growing disconnect between raising capital and the actual announcement of that fundraise. Founders are trying to remain under stealth for longer periods of time to hide from competitors, and they want to message their news in a careful manner.

All of which means that the Form D filed with the Securities and Exchange Commission when closing an exempt fundraise (aka venture rounds) is no longer as simple a process as it once was.

Lawyers will state publicly that startups should always file their legally mandatory paperwork (that’s probably also a good rule for life). The reality, though, is pretty much the opposite when you talk to startup attorneys in private.

Here’s the secret about Form D filings today: the norms in Silicon Valley have changed, and Form D filings are often filed late, not at all, and many startups are advised to lie low in the hopes of avoiding stricter SEC scrutiny. What was once a fait accompli is now a deliberative process, with important decision points for founders.

Extra Crunch contacted about two dozen startup attorneys, from the biggest firms in the industry to the one-person shops with a shingle out front. Getting straight answers here has been tough, if only because no lawyer really wants to say out loud that they actively recommend their clients violate government regulations (there is that whole law license thing, which apparently lawyers care about).

Practically all of these conversations were done off-the-record and not for attribution, since as one lawyer said, “the last thing I need is the damn SEC sending our firm a nastygram.” Other firms wholly swore us off from even discussing their Form D cultures.

Full disclosure: I am not an attorney, and while I had attorneys read over this draft, this does not constitute legal advice, particularly specific legal advice for your specific startup and situation. Get inspiration from this analysis, but always (really, truly, always) consult qualified legal counsel to answer legal questions about your startup.

With that said, here is our guide to the new world of venture capital securities filings.