The impact of Covid-19 on Livestreaming adoption

Humans are social creatures. We want to connect and communicate. In my previous post I looked at virtual events in the age of social distancing. Benedict Evans wrote an excellent piece on forced experiments on a large scale as a result of Covid-19. The first mass experiment is remote working. The tools for working from home went from a nice-to-have, to must-have, almost overnight.

The second forced experiment, I believe, is consumer entertainment, or how we fill our leisure time outside of work (but still at home). As a fund that invests in Entertainment tech and gaming, we at Remagine Ventures are naturally interested in this. What does this second experiment mean? Livestreaming is set to be a big winner. In this post, I cover the rise of why this is the case, and offer lots of examples of verticals and applications as well as opportunities for startups and streamers.

Livestreaming is increasingly key to work and play

Pre-Covid-19, livestreaming had been mostly associated with gaming. But as A16Z points out in the “The rise of lifestyle streamers“, a new audience has emerged, hungry for non-gaming content. On Twitch, for example, the fastest growing category is “Just Chatting“. IGTV (Instagram live) is where the ‘influencers’ go live to feed pop culture, and Youtube Live offers a bit of everything.

Non-gaming streams on Twitch are growing fast (source)

The appetite for livestreaming during lockdown has grown to:

Work – Working remotely is pretty much ubiquitous now for knowledge workers, and teams, customers and suppliers still need to connect. Zoom went from 10 million users at the end of 2019 to 200 million at the end of March – all in a matter of three months (though its worth saying that its also seen a number of organisations and governments ban its use in recent days over security concerns). Google reported that it is adding 2 million users to Hangouts every day and had over 2 billion minutes of chat in March, growing 60% day-over-day. Almost overnight, webinars, internal communications, and product demos suddenly switched to livestreaming.

Education – Universities are facing a tough challenge adapting to online teaching. Some business schools have had students make demands for refunds while others have announced that they may not reopen until Jan 2021. In “How Covid-19 is Accelerating the Disruption of Higher Education“, Scott Galloway predicts that the future of high education is far from MOOCs or Masterclass, but it’s certain that livestreaming will be part of it. Harvard University has started offering 63 free courses during Covid-19. For K-12 education, livestreaming is more focused on targeted activities (football, piano, science).

Play – Livestreaming and gaming go hand in hand. Twitch, Mixer, Caffeine, Facebook Live and Youtube live are filled with gaming streamers. Some of them, like Ninja or Shroud became huge stars, making over $500,000 a month. People are craving all sorts of entertainment, to take their mind off things, so a new crop of streamers is gaining popularity – more on those below.

Social – when Epic Games acquired HouseParty, the ‘face to face’ social network, it had yet to find its moment. But quarantine has accelerated adoption, from 130,000 monthly installs to 50 million signups in the last month, more than a 70x increase in the rate of downloads, according to Houseparty’s CEO, Sima Sistani. The live group interaction, coupled with excellent video quality shot the app to the top of the social category.

The ascent of livestreaming

Livestreaming is by no means new, but the pandemic and quarantine serve as a catalyst to rapid change and adoption. Adam Fisher described this well:

“Compelling opportunities are likely to appear in previously stubborn markets that have resisted fundamental technology change for too long. The crisis may dislodge whatever was blocking technology adoption, forever altering the trajectory of markets such as telemedicine and other types of business infrastructure and service modernization”

Adam Fisher, Bessemer, “Letter to a young investor

Netflix is great, but as consumers don’t have sports or late night shows to watch on TV, streaming may now feel too pedestrian. Livestreaming of all sorts became a possible substitute, as people crave a close substitute to in-real-life engagement. Netflix knows it is competing for viewers attention, and I’ve speculated on VC Cafe in the past that the Streaming Wars might escalate from the streaming platform into live content. Coming back to Twitch as an indicator, DJs and musicians are entertaining fans from their living rooms.

Livestreaming is relevant across categories and age groups:

  • Music/ live streamed concerns of all sorts – from big acts to emerging artists, musicians are turning to live streaming to connect with their fans.
  • Watch people sleep – people are gaining thousands of followers and literally make money in their sleep by letting others watch them asleep on TikTok live. New York Times has the story.
  • Charity fundraising – most sporting charity events are off, so people have found creative ways to raise money. Like the inspiring story story of 99 year old Capt Tom Moore who raised £14 million for the NHS by walking 100 lengths of his back yard.
  • Live entertainment showsHQ Trivia is back from bankruptcy with an unnamed buyer and regular programming is set to return soon. In the past, Trivia attracted hundreds of thousands concurrent viewers for its interactive game shows, paying cash prizes for the winners.
  • Video gaming – according to a recent report by Verizon, video game play in the US increased by 75% in peak hours. Twitch, Mixer and Caffeine are perhaps the most well known for hosting live gaming streams, but Google and Facebook are picking up as well – Facebook Gaming launched the ability to host tournaments, and Google is giving two months free for Stadia, its cloud gaming platform, which also offers a one-click to stream. We made two investments in this space at Remagine VenturesMadskil and Novos.
  • Live fitness classes – from Peloton to to PE with Joe Wicks on Youtube, live fitness is picking up in popularity and there seems to be a grow.
  • Clubbing – people are paying real money to get into Zoom nightclubs.
  • Goats – you can pay $100 to invite a Goat or a Llama to join your next corporate Zoom call with Goat2Meeting.
  • Professional content – Webinars and more webinars how to deal with the impact of Covid-19 on______ (fundraising/ hiring/ sales/ marketing/ pick your word) seems to be a popular topic we can’t get enough of, but there are plenty of chats offered on a variety of topics on a daily basis. How to find them all is the question I tried to answer in my previous post.
  • Patreon has seen a surge in registrations. It grew from 150,000 total users by 30,000 (20% of its total base) in March alone, according to the Patreon blog.
  • Eating – when I was in Taiwan and Vietnam over the summer, I noticed several people livestreaming their meals (especially hot pot!). In Korea it’s a popular thing. Restaurants in Wuhan are now using live streaming models to signal customers that it’s safe to come in again.
  • Porn – Pornhub has made their premium tier free and strippers are moving their business to online streaming to earn an income from home.
Why not add a goat to your next meeting? (Photo credit: Business Insider)

Big opportunities remain

As social distancing is here for the next foreseeable future (some estimates say 12-18 months), travel restrictions and bans on public gatherings will make a ‘return to normal’ a gradual process. So where are the opportunities for startups?

Kids entertainment – from my own experience doing remote lessons for our kids (fitness, piano), this is a need for both kids and parents.

Live e-commerce – livestreaming e-commerce sales are already very popular in China, and one could imagine a QVC for the Gen Z generation.

Combatting loneliness/ dating – you may have read ‘my girlfriend is a chatbot‘. As dating is happening online, people will be looking for companionship online, in all forms.

Therapy/ mental health – some of the side effects of isolation are anxiety, increase in addictions, divorce, domestic abuse. More people will require help and while the category is already crowded, opportunities remain.

In conclusion

Until today, the main beneficiaries of the rise of livestreaming are the platforms, generating revenue from advertising, revenue share on subscriptions, etc, and the top creators who managed to make this into a living.

The rapid adoption of livestreaming during the pandemic will create new winners – tech startups supporting streamers, engagement tools for viewers, better monetization models, and hopefully can ‘win’ too: in the form of mass training, entertainment and education. If you’re building something in this space and could benefit from our feedback, please sign up to the Remagine Ventures office hours.

The future of events in a social distancing era

The conference and event circuit took a big hit on account of the pandemic. Even as governments discuss their ‘exit strategy’–meaning slowly relaxing quarantine measures over the course of weeks or months–it’s hard to imagine conferences going back to normal in the near future.

It’s in this setting that we’ve seen events emblematic of physical space and mixing, like Burning Man, go completely online. If you’re in tech, you must have been invited to a number of these discussions, likely over Zoom. But it’s not just professional events that got cancelled. It’s everything – standup, music, group meditation and poetry slams. But people want to get together. Even virtually. They are willing to pay, to get admitted into a virtual night club.

A map of the Zone. Some rooms were intentionally made “secret” until somebody tipped you the password.
Illustration: Gaia Harvey Jackson (Source: Bloomberg)

So I got curious: if virtual conferences and events are going mainstream, is there a virtual event aggregator? What is going on where? As a fund that covers Entertainment and gaming tech, this is something we think about a lot at Remagine Ventures.

Is there already a virtual events aggregator?

The answer is sort of. A few early attempts are out there but there’s by no means a ‘winner’ yet. Here are a few contenders:

If you add to these the non-live events and online experiences, like the ability to take virtual tours of the world’s top museums or watch one of the many talks, documentaries or comedy shows online, the huge inventory and lack of proper discovery turn out to be a huge missed opportunity.

What’s missing?

The netflix for events? The TV guide for IGTV? E! Entertainment for streamers?

The current solutions leave a lot to be desired, but also create a huge opportunity. The big challenge today is discoverability and fragmentation – there’s a lot going on, but no easy way to find it. Also, the ideal solution needs to be a tool for event organisers – enable them to easily create events on the platform, and help with distribution and promotion.

There are also different user needs, and they required some dedicated features. IRL in my opinion comes closest:

“If you can’t find something public to do, you can make plans with friends using the composer with suggestions like “Let’s video chat,” “Zoom workout,” “gaming sesh” or “Netflix party.” 

IRL screenshots, iOS app store

Why ain’t Zoom or Twitch doing it?

Bigger fish to fry. With usage exploding and the stock ($ZM) trading with a PE ratio of 1658, you’d think Zoom would have jumped on this already. But they have bigger problems to solve first; One security issue after another, challenging PR, and how to handle the massive growth in scale in the last few months (from 10 million users in Dec to over 200 million in March). So an event directory is probably not the CEO’s top priority.

Twitch is growing these days, but it’s the wild west like Youtube. Twitch must be aware of the challenges in discoverability of new emerging streams and has done little to curate the events to date.

What’s next?

It’s hard to predict how soon we’ll go back to traveling or attending large events during these days of social distancing. At least until there’s a vaccine widely available for Covid-19, virtual events are here to stay. Big companies are built in a time of crisis, and I can’t wait to see the many businesses that will be created to capture this potential across professional events, dating, education, entertainment, sports and more.

In a new post tomorrow, I’ll go more in depth into livestreaming of all sorts.

Alternative tech job boards during Covid-19

Startups are getting hit hard by the economic price of Covid-19. As the New York Times reported yesterday, many companies have started laying off people already. Social distancing means that in many cases, this happens via video conferencing. As a record number of Americans filed for unemployment, this is a very stressful time for job seekers.

According to an HR survey conducted by Viola Ventures, an Israeli venture capital fund, a third of respondents reported that they are planning layoffs. Most have frozen hiring as well, in an effort to reduce cash burn and extend runway until fundraising options open up. For many, including some well capitalised startups like Bird or Airbnb, layoffs are a matter of survival.

“Around 30% of companies have already frozen or are planning on freezing talent acquisition except for key positions. It’s worth noting that two companies have already started firing people, or plan to.” – Viola Venture Blog

The number of people who filed for unemployment in the US shot up dramatically in the last two weeks, reaching over 6.6 million people (as of April 1st). In a report by the Washington Post, Economist Heidi Shierholz, who has spent her life studying the job market and said she is predicting 20 million Americans will be out of work by July — the worst unemployment situation since the Great Depression. That is her “best case” scenario if Congress does another big stimulus package to aid the economy.

Some estimate the unemployment rate in the US could reach 10%, the highest rate since the great depression. (source)

There are questions about the role of government in supporting venture backed startups. The US just announced that startups are eligible for government support as part of the $2 trillion aid package. France has announced a €4.3 billion plan to support startups. Israel treasury approved a 650 million NIS for startups and in the UK investors are lobbying for a package.

Community job boards and lists

A few crowdsourced initiatives were quickly put together to help job seekers understand who’s hiring, who’s laying off, and who’s furloughing (forced holiday with reduced pay). Sharing it here in case it’s helpful for anyone looking for a job.

Crowdsourced jobs in Israel

Techjobs Corona

(started by Fusion LA, an accelerator for Israeli startups in LA)

Pitango’s – Who’s hiring DB

(started by Pitango, an Israeli VC fund)

In the UK

Talent Tech UK

(Started by David Fogel, co-organiser of the Israeli tech parliament in the UK). submit your job openings to [email protected]

Cananda startup job board

Best of luck out there, stay safe.

Nerd Immunity – eSports during Coronavirus Pandemic

As Major Leagues cancel their season in the US and the olympics postponed at least till 2021 to avoid public gatherings in the time of Covid-19, it’s a tough moment for sports and sports fans.

As mentioned by The Vulture in “What will ESPN do without sports?“:

“From March Madness to Major League Baseball, auto racing to international soccer, leagues and events have been suspended, postponed, and outright canceled, all in an effort to slow the spread of the coronavirus”

The natural answer would have been eSports, but it’s not so simple. It’s hard for broadcasters to put on shooter games in primetime TV, and classic eSports games like League of Legends are too complicated for a non-gamer audience to follow. Does it just leave them with Fifa tournaments?

As mentioned by We Are Social, “In lockdown: a world without sport”:

Another category to explore is sports and gaming. These fans have significant natural overlap and affinity, with some of the biggest gaming titles based on sports. The number of hours streamed on Twitch has increased 15% over the past few days, which suggests fans are looking for entertainment elsewhere. Sport stars have joined the action, streaming games ranging from Fifa, Fortnite and Formula 1. Mesut Ozil for example, has recently been generating over 40k views playing Fortnite.

Can this be the watershed moment for eSports?

Viewership on Twitch is up 10%, and 15% on YouTube Gaming compared to a week ago, according to Doron Nir, CEO of livestreaming tool and service provider SteamElements (source)

The esports industry had to make its own pivot from massive in-person events to fully digital tournaments, but content consumption is up as sports fans are looking for entertainment while in quarantine.

As Kevin Klowden, executive director at the Milken Institute’s Center for Regional Economics mentioned to Venturebeat:

“In some ways, this is the opportunity for esports, though I’m not sure it’s the one anybody wanted. Suddenly, the major sports networks have no programming. People actually want to watch games. Nobody is in a better position to take advantage of this, in terms of having content, than esports. Productions are suspended in entertainment for a while.”

Esports pivots to digital because of the coronavirus, Venturebeat

To get some clarity, I’ve asked Stefan Zant, CEO of esports.com and Managing Director of ProsiebenSat1’s 7Sports how does it look from the broadcaster side.

Stefan Zant, CEO of esports.com and MD of 7Sports

VC Cafe: What are the limitations for putting esports on primetime TV?

Stefan Zant: Esports has a huge potential for getting big on TV, but is still a niche phenomenon at the moment. On top to that, in german television broadcast we are still limited by youth protections. This is why we are not allowed to broadcast titles with FSK 16 (e.g. Counter-Strike) before 10 p.m. and titles with FSK 18 (e.g. Fortnite) before 11 p.m. With a view to the next years, professionalization of eSports associations as well as a stronger acceptance by society will become the most important drivers to become a mass market and get ready for primetime on television.

VC Cafe: Are you observing any changes in content consumption as people are in quarantine? 

Stefan Zant: In light of the current situation we logically adjusted our content approach from aggregating event highlights and news to more situation-specific and creative formats, since most of the esports events are also postponed. For example, we created an interactive editorial meeting format with our community or included recommendations for best games while being in quarantine in our content offer. These creative formats received very good response by now and also made us break new grounds to stay innovative and add value to our content offer, especially at times like these.

VC Cafe: How do you see esports changing in 2020? 

Stefan Zant: Esports has everything that is needed to be a real sport: Competitions, emotions, tactics, skill, speed and much, much more. With increasing media coverage in combination with a higher social acceptance and professionalisation of eSports associations, new viewers will be attracted although they have nothing in common with active gaming. This is why we see eSports becoming a mass media sport in the future.

***

As we are in the thick of a global health and economic crisis, this is hardly an “opportunity”. But technology has a big role to play in entertainment, and these newly created esports fans may continue their habits when life goes back to normal.

“Fans who pick up esports during this period may continue to follow it once sport does return, providing brands an opportunity to develop a relationship with the esports community. This goes beyond the realms of like-for-like games (e.g. basketball and NBA 2K), but also into games like Fortnite and Call of Duty which will appeal to the average gamer”

In Lockdown


Hatzalah – A Blessing for an Entrepreneurial Hero (Guest post)

Guest post by Mark Gerson*

Eli Beer, founder of United Hatzalah

Around 20 years ago, Eli Beer identified a problem.  A very young man, he had been volunteering for two years on an ambulance near his home in Jerusalem — and never saved anyone’s life.  By the time that the ambulance arrived at the call, often pursuant to a heart attack, choking, an accident or stroke, the victim would be dead. 

He arrived at one call in his neighbourhood for a boy who had been choking on a hot dog.  When he arrived there on the ambulance, he and his fellow medics began treatment. A doctor passed by and entered the house.  He told Eli and his colleagues what they probably knew: the boy was dead. And then the doctor said something haunting. He told them that he lived down the street, and was home at the time.  Why didn’t anyone call him?  

A light went off for Eli.  He never saved anyone’s life because he always arrived too late.  This was not the fault of the Jerusalem ambulance system or anyone in particular.   There would never, and could never, be an ambulance near every victim. They were just too expensive.  And they would never, and could never, be fast enough. They would always get stuck in traffic. 

As a result, people died — all day, every day, everywhere in the world. 

But Eli had a solution.  He began to train people in his neighbourhood in the basics of life-saving.  He got a scanner that had the emergency calls. He had a relative donate some rudimentary equipment.  And he and his friends started getting to the emergency calls, minutes ahead of the ambulance, and saving lives. 

I met Eli shortly thereafter, and we worked together to grow the system in Israel.  In 2006, we established United Hatzalah — which he runs and I chair. We now have 6,000 volunteers throughout Israel, serving every community — Jews of all kinds, Muslims, Christians, Druze.  They have all completed several hundred hours of classroom and practical training, and carry (in specially designed bags, and often in specially designed vehicles) all of the equipment necessary to save a life.  All of these volunteers are connected through what is perhaps the most technologically modern dispatch center in the world. The dispatchers immediately identify the closest volunteers, and sends them to the scene equipped with specific knowledge of the case.  United Hatzalah is now answering approximately 2,000 emergency calls a day, with a response time of below three minutes nationwide and below 90 seconds in cities. Consequently, the volunteers of United Hatzalah are able to save the lives of several hundred people a day who would otherwise die waiting for an ambulance. 

Eli’s is one of the great entrepreneurial stories of this generation. 

We have learned many things from Eli — and one of them is the absolutely critical role of philanthropic donations in life-saving work, and the genuine partnership that donors to worthy causes have with those who carry out the work.  He never had to tell me that. He shows it. Eli spends hundreds of nights a year on the road, raising money. In a typical three week span from February to March, Eli was in India, London, New York, Los Angeles and Miami — raising money for the organization. 

Eli was in Miami when he started to feel ill.  Exactly one week ago today, he got himself to the hospital — with shortness of breath, difficulty breathing, a fever and a dry cough.  He was in significant pain, and the test came back on Friday afternoon confirming what everyone knew: he had Covid-19. We spoke with him on Friday morning.  Hearing Eli educated me as to what is meant by the term we had only heard and understood abstractly — difficulty breathing. Still, he told us that he was relieved that he did not have to be intubated — and put to sleep for an indefinite period of time. 

On late Friday afternoon, he had to be intubated.  Immediately before being sedated, he apparently recorded this video.  

The context in which we viewed it was through the Book of Genesis.  Jacob is on a journey to see his brother. An unnamed “man” appears and engages Jacob in a nightlong wrestling match.  Jacob is injured but emerges victorious. Still, he tells his opponent: “I will not let you go until you bless me.” 

One should always, we learn, emerge from a struggle with a blessing. 

Eli is now in a struggle. He remains sedated, and will likely be for some time — under outstanding care at the University of Miami Hospital.  There is not, as one might say in such a circumstance, “little that we can do.”  There is a lot we can do — we can enable Eli to emerge from this struggle with a blessing. 

His statement in this video shows how he would like to be blessed.  We can imagine his smile, and indeed joy, if upon waking he sees this page filled with support and supporters: https://israelrescue.org/project/coronaresponse

Updated from Eli Beer March 20 2020 before he was sedated
(Content might be disturbing for some users)

***

Mark Gerson is a private investor, and Chairman of United Hatzalah.

100+ Startups offering free products and services in response to Coronavirus

 Coronavirus tech for good

It’s safe to say that we don’t yet know how long the Covid-19 situation will continue, but it has already had a major impact on public health and the economy. Tech can play a role in helping on various fronts:

  1. Startups and tech companies working directly on tackling Coronavirus – from prevention to testing and patient care.
  2. Startups and companies offering free or deeply discounted services to support impacted people – from educating kids in quarantine to helping teams work better remotely.

For #1, there are calls for action coming from the EU and UK government to companies that can accelerate the manufacturing of respirators. I was happy to see great examples of Israeli startups fighting Covid-19 being put to use in hospitals, techies using their 3D printers to create much needed valves, and hackathons being organised by the tech community to improve working from home, business continuity and help those in need.

In this post, I’ll be covering #2 only. At the time of writing this post there’s already been over 110 entries from Europe and Israel. Please fill this form to add your company. Hopefully this helps inspire more action-oriented entrepreneurs to contribute to solving this global pandemic in whatever way they can. I removed spam and irrelevant entries.

A few examples worth calling out:

  • Touchnote – Send a free postcard to vulnerable people who are isolated due to coronavirus, using the code KINDNESS20
  • Guild – Offering Guild free to any event organiser who has an event cancelled in the next 6 months as a way to engage their community and provide a means to communicate, connect and collaborate.
  • Genially – Create stunning presentations, infographics, and more, to help our educators community and facilitate #remotelearning. Our premium templates and resources will be made available for free.
  • CodeSpark Academy – At home kids coding for ages 5-9. Use promo code “schoolclosed” for 3 FREE Months
  • Busuu – is offering free language lessons to children affected by coronavirus school closures. They are being live streamed on YouTube. A lesson schedule can be found here: https://www.busuu.com/en/keep-kids-learning
  • Geomiq – connecting design engineers with manufacturers. Making their platform available at no cost for whoever is manufacturing parts for ventilators (hopefully manufacturers will also manufacture at cost)

100+ startups offering free products or services in response to Covid-19

I’ll keep the form open another week and will continue to update this list.

A couple more resources for startups worth calling out:

We’ll get through this crisis. Stay safe.

#coronavirus #covid-19 #techforgood #startups

Plenty of Dry powder for Europe and Israel VC funds

The markets have been taking a beating with Coronavirus and startups that were valued in the hundreds of millions have been folding at what seems like an accelerated rate, prompting journalists to post articles about the bubble being burst. Are we heading into a market correction in 2020? Who knows.

What is certain is that European venture hit a local maximum in 2019, attracting over €4 billion in Q4. The American VC funds are now coming to Europe, seeing European startups as a new asset class worth investing in. More on this from Nicolas Colin. Overall, European and Israeli venture capital funds have a lot of dry powder to fund companies in the years to come, regardless of a potential recession.

European and Israeli tech VC fundraising – source

European Funds launched in 2020 ??

The dry powder in Europe seems to go way beyond the ski slopes. This is a partial list of venture capital funds announced in Europe since the start of 2020:

The availability of capital is of course a welcome change in Europe, but can also become a double edged sword, as Ivan Farnetti points out:

Another question is around exits in Europe, and availability of late stage capital.

geo distribution of VC Capital
The UK continues to attract the most capital, followed by Germany, Sweden, France and Israel

Israeli VC funds launched in 2020 ??

In Israel there’s also been an influx of fresh capital.

The challenges is Israel are different than in Europe. Capital and exits have historically not been real constraints, but the success of the Israeli tech ecosystem, combined with a large number of multinational R&D centres have created a talent crunch.

?Thank you Yannick Roux and Stefano Bernardi for curating this resource.

YC’s Guide to Series A

There are many good startup resources out there, and it can be confusing for founders to know which one to pay attention to. Well, here’s a good one for you! Y Combinator‘s Aaron Harris and Janelle Tam created a great resource for startups – a 70 page guide to raising Series A.

Main takeaways:

1. Fundraising should be a tightly run process. Start with a number (30!) of coffee meetings and narrow down. YC brings the best practices of running a a good fundraisng process.

2. Create FOMO and maximize leverage – competition from other investors can do that. The guide details how can founders use information to create leverage.

3. Fundraising is the CEO’s job and requires focus – but don’t get obsessed with it at the cost of taking your eye off the fundamentals. Very important to establish trust – don’t obfuscate the numbers and don’t invent fake deadlines.

4. Write an investment memo – it will help you articulate things in the way investors digest them. A good memo is an articulation of your overall pitch.

5. It can take months to complete the process. Plan to have at least six months of runway when you start, and start meeting with Series A investors shortly after raising seed. YC recommends starting when you have 12 months of runway.

Final point is on Funding Benchmarks, something I’ve written about in the past on VC Cafe. YC shares some interesting data points based on their follow on experience with core KPIs, valuation range and expected dilution. It can be pretty standard for SaaS and differ a lot in hard tech/moonshots.

For the full guide: https://www.ycombinator.com/resources/serial-vs-parallel-fundraising

Israel’s talent crunch detailed in new report

A new comprehensive report on human capital in Israel by the Israel Innovation Authority and Startup Nation Central found there’s a shortage of tech employees for Israeli startups and scale ups. What about the solutions? the reports offers a few suggestions, mainly incorporating Arabs and Orthodox jews in the high tech economy.

Israel’s high tech sector employed 321,000 people in 2019, representing 9.2% of overall employees in the Israeli economy. According to the report, there are over 18,400 unfilled positions in tech in 2019. In a way, this is a story about success – Israeli high tech did phenomenally in the past decade, with over $39 billion raised and Israeli tech M&A and IPOs reaching $111.29 billion between 2010-2019, with $21.74 billion in exits in 2019 alone.

This is a multi dimensional problem, described below.

Challenges:

  • Competition on top talent – Israeli high tech employees are in high demand from corporates (over 380 multinational R&D centres) and scale ups. Their ability to pay (above market) has the potential to starve startups from access to top talent
  • Increase of demand for talent – It’s important not to conflate demand with shortage. The study addresses this point by comparing actual recruitments with open positions.
  • High churn/voluntary departures – the shortage in talent causes employees to leave for wage premiums, ultimately hurting startups who can’t afford to pay as much.

Solutions:

  • Outsourcing – while more of a consequence rather than a solution, a large percentage of companies use outsourcing to address the talent shortage. Mainly to Eastern Europe, which is now almost an integral part of Israeli startups and scale ups.
Offshore is commonplace for Israeli tech companies and startups
  • Training is needed – the larger the company the more open it is to hire inexperienced employees as it has the resources to train them.
  • Diversification and inclusion of under represented minorities is needed – Numerous government entities and nonprofit organizations offer various training programs designed to facilitate entry to the high-tech industry, in particular for populations that are currently under-represented in this sector, but more action is needed.

Read the full report here.

Who’s watching the algorithms? 3 Israeli startups predicting performance of AI models

It’s the opposite of an “AI winter” it seems, as investment levels in Artificial Intelligence continue to break records globally. According to the State of European Tech 2019 report by Atomico, European AI companies raised $4.9 billion in 2019 alone.

State of Euorpean Tech 2019, AI investments

When it comes to AI however, it’s mostly a black box. Data scientist know that the accuracy of the models to make predictions or recommendations, has to do with data quality/annotation and training of the algorithms, but most simply trust the data and thus create a blind spot. As more companies embrace AI for their needs, what happens when the algorithms start slipping? who’s policing the quality?

The stakes are high for AI model performance, as it may affect decisions taken on loans, patient care, cyber security, autonomous vehicles and so on. You can imagine the scenarios where a deterioration in the confidence level of the models can create a real mess.

Several Israeli startups understood there is a potential market in monitoring AI performance and are tackling this market. While these solutions don’t provide 100% “explainable AI” that opens the black box, they solve the problem of 3rd party verification of quality.

Superwise.ai – started in January 2019, Superwise hopes to become the AI Performance Management for the enterprise, connecting to any ML system in production. It offers real-time performance monitoring & analysis, predictive intelligence that is based on machine learning models, auto-benchmarking, out of the box explanation and bias detection and cloud or on-premise configuration. Superwise raised an undisclosed round from F2 Capital, and is founded by two brothers, Oren and Ofer Razon. Ofer the CEO previously started the AI unit at Amdocs.

Superwise dashboards – source

MonaLabs – founded in October 2018, Mona labs is targeting data science teams. It aims to maintain data integrity to solve the garbage in, garbage out risk when data is mis-formatted. Mona also tackles model bias and detects concept drift. It offers a performance benchmarking score and allows to evaluate the quality of models in production. It works in the cloud or on-premise as well. Mona announced an undisclosed seed round led by Global Founders Capital in Feb 2019. Started by a team of ex-Googlers, who previously led the work on Google Trends.

MonaLabs dashboard – source

Deepchecks.com – focus on warning organisations before their deployed AI systems make bad calls using proprietary predictive analytics algorithms. The company was backed by Grove Ventures in an undisclosed round (still in stealth, so not much information available yet).

deepchecks.com
Deepchecks, still in stealth (source)

For a deeper technical review of other services for data scientists, check out this excellent Medium post by Ori Cohen.