How do you leave the place that made you? You figure out what it made you for. TechCrunch made me a part of the startup ecosystem I love. Now it’s time to put that love into action to help a new generation of entrepreneurs build their dreams and tell their stories.
So it’s “TC to VC” for me. After 8.5 years at TechCrunch and 10 in tech journalism, I’m leaving today to join the venture team at VC fund SignalFire. I’m going to be a principal investor and their head of content.
I’ll be seeking out inspiring new companies, doing deals (when I’m eventually up to speed) and providing pitch workshops based on countless interviews for TechCrunch. Thankfully, I’ll also still get to write. We’re going to find out what founders really want to learn and produce that content to help them form, evolve and grow their companies. I’m doing my signature bounce & smile with excitement.
Where to follow my writing
You’ll still be able to follow my writing as well as my journey into VC on my newsletter Moving Product at constine.substack.com as well as on Twitter: @JoshConstine. No way I could just suddenly shut up about startups! If you’re building something, you can always reach me at joshsc [at] gmail.com
On the newsletter you can read a deeper explanation for why I picked SignalFire . I also just published the first real issue of Moving Product on how quarantine is “loaning” concurrent users to startups that will help the new wave of synchronous apps snowball to sustainability, plus commentary from top product thinkers on Facebook’s new Rooms.
Why I chose SignalFire?
I was drawn to SignalFire because it’s built like the startups I love writing about: to solve a need. Entrepreneurs need tactical advantages in areas like recruiting, where they spend most of their time, and expert advice on specific problems they’re facing.
SignalFire CEO and founder Chris Farmer
That’s why SignalFire spent six years in stealth building its recruitment prediction and market data analysis engine called Beacon. It can spot deal opportunities for SignalFire’s new $200 million seed and $300 million breakout funds while helping the portfolio hire smarter. Then SignalFire assembled more than 80 top experts, like Instagram’s founders, for its invested advisor network. Traditional funds need partners to exhaust their social capital asking for favors from friends to help their portfolio. SignalFire’s model sees its advisors share in the returns of the fund, so they’re sustainably motivated to assist.
SignalFire’s founder and CEO Chris Farmer was also willing to invest in me, figuratively. I’ve written about thousands of startups but I’ve never funded one. He and his team have offered to mentor me as I learn the art and science of investing. They also accept me for my opinionated, outspoken self. Instead of constricting my voice, the plan is to harness it to highlight new ideas and proven methods for building companies. I wrote this post on my newsletter with a deeper look at why I picked SignalFire and how its modernized approach to venture works.
What makes TechCrunch different
Of the 3,600 articles I’ve written for TechCrunch, this was the hardest.
TechCrunch gave me the platform to make an impact and the freedom to say what I believe. That’s a rare opportunity in journalism, but especially important for covering startups. TechCrunch writes about things that haven’t happened yet. There are often no objective facts by which to judge an early-stage company. Whether you decide to cover them or not, and the tone of your analysis, depends on having conviction about whether the world needs something or not, if the product is built right and if the team has what it takes.
If you rely on others’ signals about what matters, whether in the form of traction or investment, you’ll be late to the story. That means editors have to trust their writers’ intuition. At TechCrunch, that trust never wavered.
SAN FRANCISCO, CALIFORNIA – OCTOBER 04: (L-R) Snap Inc. Co-founder & CEO Evan Spiegel and TechCrunch editor-at-large Josh Constine speak onstage during TechCrunch Disrupt San Francisco 2019. (Photo by Steve Jennings/Getty Images for TechCrunch)
I met my wife Andee at a TechCrunch event. [Image Credit: Max Morse]
I’ll always be indebted to Eric Eldon, who gave a freshly graduated cybersociologist with no experience his first shot at blogging back at Inside Facebook. Editors like Alexia Tsotsis and Matthew Panzarino helped me develop a more critical voice without sterilizing my personality. And all my fellow writers over the years, including Zack Whittaker and Sarah Perez, pushed me to hustle, whether that meant pontificating on new product launches or exposing industry abuse. If my departure from journalism elicits a sigh of relief from the companies in my cross-hairs, I know I did my job. The TechCrunch business and events team have turned Disrupt into the tech industry’s reunion. I appreciate them giving me the chance to learn public speaking, from the most heartfelt moments to the cringiest. And really, I owe them the rest of my life, too, since I met my wife Andee at a Disrupt after-party.
Treating writing like a sport to be won kept me cranking all these years, and I’m grateful for Techmeme offeringa scoreboard for extra motivation. I’ll unhumbly admit it’s nice to hang up my jersey while ranked No. 1. My gratitude to Jane Manchun Wong for furnishing so many scoops over the years, and to all my other sources. It’s been fun competing and collaborating with my favorite other reporters, and I know Taylor Lorenz, Casey Newton and Mike Isaac will keep a close eye on tech’s trends and travesties.
But most of all, I want to extend an enormous thank you to…you. To everyone who has read or shared my articles over the years. I woke up each day with a sense of duty to you, and felt proud to say “I fight for the user” like Tron. What makes this industry special is how the community refuses to treat it as zero-sum. We grow the pie together, and everyone knows their competitor today could be their future co-founder. That makes us willing to share and learn together. I believe no recession, correction or bubble-burst will change that.
BERLIN, GERMANY – DECEMBER 12: Group Photo on stage at TechCrunch Disrupt Berlin 2019 at Arena Berlin on December 12, 2019 in Berlin, Germany. (Photo by Noam Galai/Getty Images for TechCrunch)
So I’ll leave you with a final thought that’s made my life so fulfilling: If you have the privilege or create the opportunity, turn your passion into your profession.
Specialize. Learn. Then make what you want. If you can find some niche you’re endlessly interested in, that’s growing in importance, and at least someone somewhere earns money from, you’ll become essential. Not necessarily today. But that’s the beauty of writing — it teaches you while proving to others what you’ve been taught. No matter what it is, blog about it once a week. In time you’ll become an expert, and be recognized as one. Then you’ll have the power to adapt to the future, however feels most graceful.
Personal news: It's TC to VC for me! I'm leaving TechCrunch to join SignalFire as a principal investor & head of content. I'm also launching my newsletter where I'm writing now: https://t.co/F7gvssC4Ky A "toast", to the future! pic.twitter.com/XRhDxdS5NF
“I didn’t know what the term ‘freight forwarder’ meant until a year into starting the business.” Considering his shipping logistics startup Flexport was last valued at $3.2 billion, that quote from my first interview with CEO and founder Ryan Petersen back in 2016 seems even more surprising now.
But it also hints at why he’s one of the most talented and exciting executives in tech: He learns. Humbly. Relentlessly. About whatever the role requires as it evolves.
Right now, it means learning that 1.15 million medical masks can fit in a pasenger plane if you strap boxes to the seats like they’re people. Flexport has delivered around 62 million pieces of personal protective equipment, with delivery of over 7.7 million of those funded by the company’s non-profit arm Flexport.org. Petersen and Flexport meanwhile helped create the Frontline Responders Fund that’s raised over $7 million for COVID relief.
Flexport.org packed 3 million pieces of PPE into a repurposed passenger plane to get them to frontline responders
“He’s one of the most impressive founders I’ve known” said fellow FRF leader and Science co-founder Peter Pham . “Ryan just wants to solve problems without ego.”
In this profile, TechCrunch charts Petersen’s growth across our six interviews with him over the past four years as he raised $1.3 billion and reached hundreds of millions in revenue.
Overcoming Shlep Blindness
Petersen soon found out that ‘freight forwarding’ means coordinating all the shipping and hand-offs to get pallets and containers of goods on one side of the world, through trucks and boats and planes, to a retailer on the other. By then Flexport was going through Y Combinator in 2014, preparing to take on the trillion-dollar freight industry.
“I thought the problem was too big, and that I wouldn’t be able to solve it” he recalls. “How am I going to fix global trade? Only much later did I realize that, well, let’s try it! It can’t just sit there broken forever.” Somehow, freight forwarding was still being organized with faxed logs and paper manifests, or Excel files and email if a client was lucky.
Freight forwarding had plagued plenty of founders but none had tackled it because it seemed so insurmountable that it engendered ‘schlep blindness’, as YC’s co-creator Paul Graham termed it.
“Schlep blindness is something so hard that your brain won’t think about it. I think it’s a necessary feature of our brains. Otherwise we’d sit here contemplating our mortality all day and never be able to do anything” Petersen explains. “Anyone who ever sold anything on the internet pre-Stripe went through this terrible process. 100% of internet entrepreneurs saw that problem and then went about their way.” With its 100 year-old shipping incumbents and endless regulatory acronyms, who’d want to wade in?
“Ryan is what I call an armor-piercing shell: a founder who keeps going through obstacles that would make other people give up” says Graham, who donated $1 million to Flexport.org’s COVID-19 relief efforts. “But he’s not just determined. He sees things other people don’t see. The freight business is both huge and very backward, and yet who of all the thousands of people starting startups noticed?”
Petersen. What really irked him was that the big freight forwarders didn’t want those clients to learn what influenced prices and timelines to keep them in the dark about how sub-optimal their routes were. “They just made money off the fact that I didn’t understand how it all works. And I assumed at the time that that was just something about entrepreneurs who are new to this space but it turns out even the biggest companies struggle with this stuff. They’re afraid forwarders are trying to take advantage of them.”
But Petersen wasn’t so naive. He’d actually been in the freight business his whole life.
From Slinging Soda To Founding Startups
“Maybe without her realizing it, she was training us to be entrepreneurs” Petersen reflects. He and he brother David grew up with a biochemist mom who ran her own food safety business while their dad did the company’s programming. “All of our childhood conversations were around using software to make government regulations more accessible.” When would Flexport would eventually be jumping through the hoops of the 43 different US trade regulators, it felt natural for its CEO.
Ryan Petersen back in 2015 before Flexport had its own planes
Petersen exudes a kinetic energy that subtly coveys that he’s always itching for the next knot to unwind. “At the time I was terribly bored by everything”. So his Mom put him to work. “She paid my allowance as a kid by having me deliver sodas to stock their office. My dad would drive me to Safeway to buy sodas for four bucks a case and sell them for nine.” With a laugh, he considers, “It was potentially a way for her to make my allowance tax-free.”
Soon Petersen was moving bigger items longer distances, buying scooters in China and selling them online in the States. By 2005, Petersen was living in China to get closer to the supply chains. The next year, he co-founded ImportGenius with his brother and Michael Klanko. They’d realized there was a ton of valuable information locked up in paper shipping manifests, so they began scanning and selling the data to importers and exporters so they could keep tabs on competitors.
Petersen’s first moment in the spotlight came in 2008 when he accidentally butted heads with Steve Jobs. ImportGenius had identified that Apple was shipping a large number of “electronic computers”, a new classification for the company. “We scooped the launch of the iPhone 3G with our public manifest data. Steve Jobs called US Customs, who called me” he told me back in 2016.
Though ImportGenius eventually plateaued, Petersen had accumulated the knowledge to lift the veil and pierce his schlep blindness. “I realized the largest problem was staring me in the face. Global trade is too hard, and there’s not software to manage it” he remembers. “I thought there was no software for SMBs. What I discovered was that there’s NO software.”
At first he wanted to build what would become Flexport inside of ImportGenius, but it was tough to get existing investors to stomach the risk. It’d be scary, but also exciting to start something separate. “My brother is my best friend and my best advisor” Petersen tells me. They’d always pushed each other with a jovial sense of competition — Ryan’s Twitter handle is @TypesFast. David’s is @TypesFaster.
So David made the first move, founding BuildZoom, which has gone on to raise $23 million to coordinate the logistics (are you sensing a pattern?) of hiring contruction contractors. In 2013, Ryan lept. “I think part of me wanted to go out on my own and prove myself . . . to prove that I was capable of running the show. It was a really, really challenging to do it. Then the day I did it, it was the most liberating, awesome feeling ever.”
They Laugh At You, Then You Raise $1 Billion
It took a few years to get all its regulatory approvals and develop the basis of the Flexport product. But with early capital from Founders Fund, Petersen built the freight software he’d spent so long pining for. Still, “Senior execs at big companies were making fun of us. One of them compared us to Doc Emett Brown [from Back To The Future] and his ‘flex capacitor’ but we he missed is that Doc invented a time machine and it worked.”
By 2016, Flexport was serving 700 clients across 64 countries. I described it as the unsexiest trillion-dollar startup, attacking an enormous industry that was so boring that it repelled earlier innovation. Oversaturation in consumer startup verticals was pushing investors to look to where tech was evolving previously untouched markets. Flexport raised a high-profile $110 million round led by DST at a $910 million post-money valuation in 2017, and Silicon Valley was starting to take notice.
The Flexboard Platform dashboard offers maps, notifications, task lists, and chat for Flexport clients and their factory suppliers.
Luckily, the freight big-wigs were still laughing despite Flexport moving 7000 shipping containers per month for 1800 customers. “I don’t worry about startup competitors. I worry the big guys will stop thinking of us as such a joke” Petersen said that year. Soon incumbents like 25-year-old Chinese private delivery giant S.F. Express were allying with Flexport, leading another $100 million round in 2018. Meanwhile, Flexport was trying to sound more like its older competition. Petersen told me “We’re trying to retire the word ‘startup’. [Our clients] want a company that will help them grow, not the fly-by-night startup.”
At that point, Petersen didn’t care if freight was appealing or not. “I never thought it was sexy or unsexy. I just thought it was a backstage pass to the world economy” he’d later say. Yet SoftBank’s Saudi-backed Vision Fund felt the attraction. Flexport was vertically integrating, adding freight financing so retailers could pay factories for good they’d sell months later. It was also chartering its own plane and building its own warehouses where it could experiment with next-generation logistics, scanning the physical dimensions of everything that came through its doors to optimize future shipments.
By then, Flexport had plenty of exit options. But Petersen was enjoying the ride. “I’m just having fun. You have a purpose. You get invited to interesting things. Once you sell your business, you’re just another rich guy.I never want to sell the business.” Luckily, the potential to grab more of the freight forwarding profits convinced SoftBank to invest a jaw-dropping $1 billion into Flexport in early 2019 at a $3.2 billion post-money valuation.
“It was controversial with our board. They thought it was a lot of dilution to take on but I convinced them that, this was going to go up and down and we wanted we to have cash to ride out the cycles. My view is that the world’s uncertain. You should be prepared for all outcomes” Ryan explains. As long as it could weather the storm, “we’re going to win on some time horizon.”
That strategy soon paid off. When trade with China effectively halted as COVID-19 exploded in the country and Flexport had far fewer containers to coordinate, it didn’t have to execute mass layoffs like fellow late-stage startups. It proactively cut 3% of its staff or around 50 people on February 4th, centered in recruiting that it plans to slow. “It’s painful to disappoint people” Petersen reveals.
Flexport chartered its own plane for several years to ship freight
Transitioning to a recession-era CEO and learning to reduce headcount with empathy became Petersen’s new objective. “I wanted people to know that I take personal responsibility for it. I wanted people to know that there’s transparency here” he tells me, his voice straining under the gravity of the situation. “If people feel fear and then they look at the leadership and they think the leadership is not feeling fear, then the fear amplifies. Whereas if people feel fear and they see, ‘oh the leaders are feeling fear also? Then okay, they’re going to behave appropriately.'”
Taking decisive action before COVID-19 spread widely stateside kept Flexport’s momentum strong and its runway long. Petersen is proving he can guide the company through bust as well as boom.
Flexport’s Tricks To Management
“My big learning in the last 18 months or so is that you can’t do everything. You can do anything you want, but you can’t do everything” Petersen outlines. “I see good ideas and I say ‘DO THAT!'” he tells me with a wry smile. “Soon, you’re spread pretty thin. You need some top down discipline to say ‘no’ to things. We really lacked that in the early years.”
The quest for discipline led him to develop and lean on two major frameworks for prioritizing customer needs and preserving company culture. They’re crucial now that Flexport has grown to 1800 employees across 14 offices and 6 warehouses, and 10,000 clients including Sonos, Kleen Kanteen, and Timbuk2.
Ryan Petersen whiteboards his management frameworks
The first framework is from Petersen’s mentor and American business mogul Charlie Munger. It lays out the six stake-holders or ‘customers’ a business must satisfy to succeed. Here’s how Petersen describes them:
Clients: The people who pay you money. For Flexport, we have both importers and exporters
Vendors: The people you pay. For Flexport, who own the planes, ships, and trucks
Employees: Make sure they’re treated well. It has to be a win-win trade.
Investors: They deserve a return on their money. They took a risk
Regulators: They decide who to give licenses to. For Flexport, there are 43 regulators in just the US who take an interest in imported products.
Communities: Where you operate. Maybe one day that’s global society
“If you don’t have at least a B grade in everything and ideally an A, you’re probably not long-term sustainable” Petersen explains. It’s a smart lens for anyone assessing companies, whether that’s ones to work at, invest in, work with, or one you’re leading and trying to improve.
Take Airbnb for example. Clients generally love its alternative to hotels, they’ve been able to continuously recruit employees effectively, and investors have offered it billions and kicked in to help it survive COVID-19. But its vendor hosts and their neighbors have struggled with disruptive guests, and communities and their local regulators have clashed with the startup over its impact on housing supply. The six customers concept identifies where Airbnb needs to work harder.
The second framework Petersen developed himself for how to ensure a company’s core values persist as it scales. It lays out the six culture questions:
Why?: Why do you exist? What’s your purpose, mission, vision, and impact?
Who?: Who do you hire and what values and behaviors do you look for?
What?: What are you focused on and what metrics do you use to measure success?
How?: How do decisions get made and how do you shorten the feedback loop for improvement?
When?: When should things get done and when should you ship your product?
Where?: Where does your team feel like it belongs and how do you become more inclusive?
Petersen likens these tenets to addressing a medical condition. It’s easier if leaders build them into their culture early than trying to fix them later. “If you were to get these things right in any company, you’ll outperform” he believes.
To execute on these, Petersen built a team close to him that just “makes sure our OKRs (objectives and key results) are clear, that we’re running inclusive meetings with good documentation, that we’re holding people accountable.” The method is heavily influenced by Amazon’s corporate style. As Petersen told me last year, “The English language lacks a positive word for bureaucracy.”
Taking process seriously has made the CEO a hit with his employees. “Working for Ryan accelerated my career at least a decade. He has the uncanny ability to push people to their peak performance” said Flexport’s long-time former VP of product Sean Linehan, who went on to found Placement. “Ryan is building the playbook for operationally-intense tech businesses. Building a global logistics behemoth from scratch is an insanely complex job. But Ryan thrives in complexity. Where most entrepreneurs fall apart, he hits his stride.”
With the economics headwinds we’re facing, Petersen will need that drive if he wants to bring Flexport public. As you might expect, he’s learning about it. “I like reading annual reports. It’s like a hobby of mine, particularly with my competitors” Petersen says. “I want to go public. But I don’t want to go public until we’re profitablebecause I don’t want to be at Wall Street’s whims. If you’re losing money and you’republic and Wall Street doesn’t like your stock, you can get into this death cycle.”
Being the CEO of a company that outperforms has opened doors to new mentors too, like executive coach Matt Messari, and Microsoft’s Satya Nadella. Petersen asked Nadella “How can you make learning and development measurable?”. Redmond’s head honcho answered “You don’t have to measure everything.” Petersen took the note. Sometimes, you just do what you think is right.
The Wartime CEO
Leading with his heart has steered Flexport to join the coronavirus relief effort in huge ways. “We were not put on this earth to lay in bed staying warm under the blankets. It’s time to step up and do something for the world” Petersen tweeted.
Flexport’s response started in Januarury with multiple blog posts per week laying out how COVID-19 was impacting global trade, how aid organizers could navigate supply chain issues, and how governments and private companies could help. Then it launched the Frontline Responders Fund and began routing all Flexport.org contributions to the cause, massively discounting freight forwarding costs to help get PPE wherever it’s needed.
Flexport.org launched the Frontline Responders Fund
“100% of your donation to this cause will go directly toward shipping masks to people on the front lines as fast as possible. I give you my word that we won’t waste a penny of your money” Petersen tweeted. Despite his business encountering its own troubles with global trade and demand disrupted, he shifted to spending his full time running Flexport.org and promoting the FRF. With the help of celebs like Arnold Schwarzenegger and Edward Norton, it’s raised over $7 million. The FRF has delivered over 6.9 million masks, 240,000 gowns, 1,000 ventilators, 155,000 gloves, and 250,000 meals for vulnerable populations.
Petersen hasn’t been shy about rallying more leaders to the cause, writing this expansive guide to the major bottlenecks blocking relief. “Philanthropists should also step up, lending money to organizations that have received purchase orders for PPE, but that can’t afford to buy the equipment unless they are paid upfront. Because they’ll get their money back when the pandemic subsides, this is one of the highest impact forms of philanthropy out there right now.”
That willingness to get involved has inspired his employees to roll up their sleeves too. “During a crisis, leaders really show the values they embody” says Susy Schöneberg, head of Flexport.org. After the COVID-19 outbreak, Ryan immediately offered us more resources to support our commercial and nonprofit clients. Over the last weeks, my days started and ended by talking to him – no matter what time is was.”
From his vantage point, Petersen also has special visibility into who is trying to exploit the crisis. “Effective immediately Flexport will not ship personal protective equipment unless the customer can demonstrate which hospital system or other frontline emergency responder they are being provided to” Petersen wrote. “There are global shortages of these products, and it is immoral to allow war-profiteering from entrepreneurs looking to make an easy dollar.”
In the absence of proper federal crisis management, Petersen has become a defacto general in the war against coronavirus. “Given the scale of the problem and the complexity of the market failures outlined above, there’s no way for the US government to solve this on its own. But it can and must provide leadership, breaking down obstacles and coordinating the response of the private sector.” Until then, Petersen’s learning as fast as he can to become the wartime CEO needed right now.
Paraphrasing Kobe Bryant, Petersen concludes, “When you know what your goal is, the entire world is your library.”
For more of this author Josh Constine’s thoughts on tech, subscribe to his newsletter Moving Product
Facebook is co-opting some of the top video chat innovations like Zoom’s gallery view for large groups and Houseparty’s spontaneous hangouts for a new feature called Rooms. It could usher in a new era of unplanned togetherness via video.
Launching today on mobile and desktop in English speaking countries, you can start a video chat Room that friends can discover via a new section above the News Feed or notifications Facebook will automatically send to your closest pals. You can also just invite specific friends, or share a link anyone can use to join your Room.
For now, up to 8 people can join, but that limit will rise to 50 within weeks, making it a more legitimate alternative to Zoom for big happy hours and such. And more importantly, users will soon be able to create and discover Rooms through Instagram, WhatsApp, and Portal, plus join them from the web without an account, making this Facebook’s first truly interoperable product.
“People just want to spend more time together” Facebook’s head of Messenger Stan Chudnovsky tells me. One-on-one and group video calling was already growing, but “Now in the time of COVID, the whole thing is exploding. We already had a plan to do a bunch of stuff here [so people could] hang out on video any time they want, but we accelerated our plans.” There’s no plans for ads or other direct monetization of Rooms, but the feature could keep Facebook’s products central to people’s lives.
Choosing to create a separate and extremely prominent space for discovering Room above the News Feed reveals how seriously Facebook is taking this product. It could have marooned Rooms in a standalone app or made them just another News Feed post that’s timeliness would get lost in the algorithm. Instead, it was willing to push the feed almost entirely off the start screen beneath the composer, Rooms, and Stories. Clearly Facebook sees sharing, ephemeral content, and synchronous connection as more key to its future than static status updates.
Facebook Goes All-In On Video
The launch of Rooms comes alongside a slew other video-related updates designed to shore up Facebook’s deficiency in many-to-many communication. Messenger and WhatsApp now see 700 million people using audio and video calls each day, while Facebook and Instagram Live videos now reach 800 million people per day. Facebook already owns the many-to-one feeds and has emerged as a leader in one-to-many livestreaming, but “the middle piece needed way more investment” Chudnovsky says.
Here’s a rundown of the other announcements and what they mean:
Virtual And 360 Backgrounds with mood lighting – Facebook will soon launch the ability to choose a virtual background to cover up what’s behind you on a video call, including 360 backgrounds that look different as you move around, plus mood lighting to make you look better on camera
WhatsApp expands group calls from four to eight max participants – Encompassing larger families and friend groups makes WhatsApp a more viable competitor to Zoom
Facebook Live With returns – It’s tough to be the center of attention for long periods, so being able to bring a guest on screen during Live calls keeps them interesting and low pressure
Donate button on live videos – This makes it much easier for musicians, activists, and normal people to raise money for causes during the coronavirus crisis
Live via audio only – With more musicians bringing their tours to Facebook Live, now you can listen while still going about your day when you can’t watch too or want to conserve data, and you can use a toll-free number to dial in to some Pages’ videos
Instagram Live on web – You can now watch Live videos and comment from desktop so you can multi-task during longer streams
Live on IGTV – Long live videos won’t have to disappear since they can now be saved to IGTV, encouraging higher quality Instagram Lives meant to last
Portal Live – You’ll now be able to go Live to Pages and Groups from Portal devices so you can move around while streaming
Facebook Dating Video Chat – Rather than going on a date where you have no chemistry, you’ll be able to video chat with matches on Facebook Dating to get a feel for someone first.
How To Use Facebook Rooms
Facebook strived to make Rooms launchable and discoverable across all its apps in hopes of blitzing into the space. You can launch a Room from the News Feed composer, Groups, Events, the Messenger inbox, and soon Instagram Direct’s video chat button, WhatsApp, and Portal. You’ll be able to choose a start time, add a description, and choose who can join in three ways.
You can restrict your Room just to people you invite, such as for a family catch-up. You can make it open to all your friends, who’ll be able to see it in the new Rooms discovery tray above the News Feed or inbox and eventually similar surfaces in the other apps. In this case, Facebook may notify some close friends to make sure they’ll see it. Or you can share a link to your Room wherever you want, effectively making it public.
Facebook apparently watched the PR disaster that emerged from Zoombombing, and purposefully built security into Rooms. The host can lock the room to block people from joining via URL, and if they boot someone from a Room, it automatically locks until they unlock it. That ensures that if trolls find your link, they can’t just keep joining from the web.
Naturally, Chudnovsky tried to downplay the influence of Zoom and Houseparty on Rooms. “We’re glad there are many other apps people can use when they want to see each other and stay close to each other. I don’t think we necessarily learned anything that actually became part of this product” he insisted. It’s also convenient that Rooms is essentially a non-exclusive video version of Clubhouse, the voice chat app that’s the talk of Silicon Valley right now
Facebook has been quietly working on Rooms since at least 2017, exploring how to make group chats discoverable. It tried a standalone app for group video chat discovery called Bonfire that year. In fact, Facebook launched a standalone app called Rooms back in 2014 for anonymous forums.
The genius of this launch is how it combines three of Facebook’s biggest strengths to build a product that copies others but is hard to copy itself.
The ubiquity of its messaging apps and web compatibility make Rooms highly accessible, without the friction of having to download a new app.
The frequency of visits to its feeds and inboxes where Rooms can be found by the family of apps’ 2.5 billion users plus Facebook’s willingness to bet big by sticking Rooms atop our screen like it did with Stories could unlock a new era of spontaneous, serendipitous socializing.
The social graph we’ve developed with great breadth across Facebook’s apps plus the depth of its understanding about who we care about most allow it to reach enough concurrent users to make Rooms fun by intelligently ranking which we see and who gets notifications to join rather than spamming your whole phone book.
No other app has all of these qualities. Zoom doesn’t know who you care about. Houseparty is growing but is far from ubiquitous. Messaging competitors don’t have the same discovery surfaces.
Facebook knows the real engagement on mobile comes from messaging. It just needed a way to make us message more than our one-on-one threads and asynchronous group chats demanded. Rooms makes video calls something you can passively discover and join rather having to actively initiate or be explicitly pulled into by a friend. That could significantly increase how often and long we use Facebook without the deleterious impacts of zombie-like asocial feed scrolling.
Leaked images obtained by TechCrunch reveal that Google considered and designed a feature that would let people donate money to websites to help support news publishers, bloggers, and musicians. But Google scrapped the idea and chose not to build out the product, despite these kinds of businesses and creators often struggling to earn revenue.
Google’s design for tipping money to The New York Times
Last year, Google explored tipping as a new wing of Google Contributor, a service that lets people pay around 1 cent per page view to remove ads from partnered websites. Screenshots of the tipping feature showed the ability to make one-time donations of $0.20 to $5 to help support sites. “Want to see more content like this on our site? Support with a contribution” one version explained. It’s unclear if Google would have taken the same 10% cut of tips as it does from Contributor ad removal fees. Google mocked up designs for tipping on the sites of the New York Times, Wired, “Tech Crunch” [sic], and more.
If Google had launched the tipping feature, it could have provided a valuable tool to sites battered by the declining display ad market. And now amidst coronavirus lockdowns that have cancelled events and reduced podcast listenership that media publishers rely on for revenue, the ability to accept donations could have helped sites avoid laying off staff. Perhaps Google should consider resurrecting tipping as a more sustainable form of assistance alongside its new Journalism Emergency Relief Fund.
Google’s designs for tipping money to news sites
TechCrunch obtained these screenshots from a source that provided evidence that they came directly from Google. When asked, Google confirmed that the designs were of internal idea it explored last year but decided not to pursue as part of Contributor and Google Funding Choices, which lets sites ask visitors to disable ad blockers, or instead buy a subscription or pay a per page fee to remove ads. Google shared the idea with under a handful of publishers in a request for feedback. The company decided to prioritize other products, including a way for sites to request consent to personalize ads using their data amidst strengthened regulations like GDPR.
A Google spokesperson provided TechCrunch with a statement that “We recognize that there isn’t a single business model that works for all publishers today and think it’s critical to explore new technologies that can help publishers make more money. Funding Choices is a great example of a product we have invested in significantly and will continue to evolve to support publishers and their monetization strategies.”
A design for the floating button to be overlaid on websites for making a contribution
In fact, few business models work for publishers at all. With layoffs common across local news, national papers, and digital outlets, publishers could use have used all the help they could get, even if long-term subscriptions would be more lucrative than one-off tips.
Google’s Unlaunched Patronage Feature
Designs for Google’s tipping feature show a floating “Support New York Times” button overlaid at the bottom of the screen as you scroll. Tapping it reveals instructions to “Select an amount below using Google Contributor to help fund this site” with options like $1, $3, or $5.
Google’s designs for tipping on a musician’s website
After choosing one, users log into their Google account if they aren’t already, and then “By clicking ‘Pay now’ you agree that: You will use your Google Payments account to make this one-time payment.” You’re then returned to the page you were viewing, with the button saying “Thank you for your support!” before shrinking to just the Contributor logo.
Google also designed a micropayments version of the feature where users could make smaller donations, such as $0.20. This call to action could be inserted into a static position inside a website. When a user’s contributions totaled $1 or more, they would be billed. They’d also have the option to save their contribution and make it later.
Google’s designs for micropayment tipping to blogs
To drive home the emotional satisfaction of making a donation, this design shows a profile photo of you and tip recipient with a heart in between. Afterwards, a cute cat photo illustration shows a messaging saying “Thanks for the support. Your contribution is saved and we will send a confirmation email” with a cheeky “Purrrrrfect, thanks!” before returning you to the site.
Beyond traditional news sites, Google mocked up the tipping feature for The Points Guy travel advice site, the Spiritual Boss Babe blog, the Miranda Sings musician site, and the Forest Research UK government site. TechCrunch was not aware that Google was using our site in mockups for the tipping feature. Other sites included in the mockups did not respond to inquiries about if they were asked for feedback.
Publishers In Need
Google got into the publisher funding space with Google One Pass in 2011, helping users buy subscriptions to sites before it was shut down a year later. In 2014, Google Contributor launched to let people pay a monthly fee in exchange for ad removal on partnered sites, but that program concluded around the end of 2016.
In 2017, Google relaunched the program with users paying up front to fund a per page view fee for removal, and that program remains active with some publishers. The tech giant also operates Subscribe With Google, which lets people buy and manage publisher subscriptions or fan club entry from their Google account, and then surfaces that site’s content atop related Google searches.
If Google ever chose to revive the tipping feature and taxed it 10% like Contributor, it could create a modest new revenue stream. But more importantly, it could help fuel the creation of the content that fills its News and Search results. It would also allow Google to double-dip, potentially earning money from tips and from the ads users see on those sites.
A tipping feature could be especially helpful for websites that haven’t figured out a premium subscription strategy and mostly rely on ads. The fall of display ad prices, worsened by the COVID-19 recession, could put these publishers in danger of closing. BuzzFeed and Vox have cut staff pay or furloughed team members while tons of newspaper and sites like Protocol have suffered layoffs.
Tips might not replace other revenue streams, but could extend sites’ runway. A voluntary option to accept tips without having to build all the payments infrastructure could be a lifeline for the news business, if Google would ordain it a priority.
Forget the calendar invite. Just jump into a conversation. That’s the idea powering a fresh batch of social startups poised to take advantage of our cleared schedules amidst quarantine. But they could also change the way we work and socialize long after COVID-19 by bringing the free-flowing, ad-hoc communication of parties and open office plans online. While “Live” has become synonymous with performative streaming, these new apps instead spread the limelight across several users as well as the task, game, or discussion at hand.
The most buzzy of these startups is Clubhouse, an audio-based social network where people can spontaneously jump into voice chat rooms together. You see the unlabeled rooms of all the people you follow, and you can join to talk or just listen along, milling around to find what interests you. High-energy rooms attract crowds while slower ones see participants slip out to join other chat circles.
Clubhouse blew up this weekend on VC Twitter as people scrambled for exclusive invites, humblebragged about their membership, or made fun of everyone’s FOMO. For now, there’s no public app or access. The name Clubhouse perfectly captures how people long to be part of the in-crowd.
Clubhouse was built by Paul Davison, who previously founded serendipitous offline people-meeting location app Highlight and reveal-your-whole-camera-roll app Shorts before his team was acquired by Pinterest in 2016. This year he debuted his Alpha Exploration Co startup studio and launched Talkshow for instantly broadcasting radio-style call-in shows. Spontaneity is the thread that ties Davison’s work together, whether its for making new friends, sharing your life, transmitting your thoughts, or having a discussion.
It’s very early days for Clubhouse. It doesn’t even have a website. There’s no telling exactly what it will be like if or when it officially launches, and Davison and his co-founder Rohan Seth declined to comment. But the positive reception shows a desire for a more immediate, multi-media approach to discussion that updates what Twitter did with text.
Sheltered From Surprise
What quarantine has revealed is that when you separate everyone, spontaneity is a big thing you miss. In your office, that could be having a random watercooler chat with a co-worker or commenting aloud about something funny you found on the internet. At a party, it could be wandering up to chat with group of people because you know one of them or overhear something interesting. That’s lacking while we’re stuck home since we’ve stigmatized randomly phoning a friend, differing to asynchronous text despite its lack of urgency.
Clubhouse founder Paul Davison. Image Credit: JD Lasica
Scheduled Zoom calls, utilitarian Slack threads, and endless email chains don’t capture the thrill of surprise or the joy of conversation that giddily revs up as people riff off each other’s ideas. But smart app developers are also realizing that spontaneity doesn’t mean constantly interrupting people’s life or workflow. They give people the power to decide when they are or aren’t available or signal that they’re not to be disturbed so they’re only thrust into social connection when they want it.
Houseparty embodies this spontaneity. It’s become the breakout hit of quarantine by letting people on a whim join group video chat rooms with friends the second they open the app. It saw 50 million downloads in a month, up 70X over its pre-COVID levels in some places. It’s become the #1 social app in 82 countries including the US, and #1 overall in 16 countries.
Originally built for gaming, Discord lets communities spontaneously connect through persistent video, voice, and chat rooms. It’s seen a 50% increase in US daily voice users with spikes in shelter-in-place early adopter states like California, New York, New Jersey, and Washington. Bunch, for video chat overlayed on mobile gaming, is also climbing the charts and going mainstream with its user base shifting to become majority female as they talk for 1.5 million minutes per day. Both apps make it easy to join up with pals and pick something to play together.
The Impromptu Office
Enterprise video chat tools are adapting to spontaneity as an alternative to heavy-handed, pre-meditated Zoom calls. There’s been a backlash as people realize they don’t get anything done by scheduling back-to-back video chats all day.
Loom lets you quickly record and send a video clip to co-workers that they can watch at their leisure, with back-and-forth conversation sped up because videos are uploaded as they’re shot.
Screen exists as a tiny widget that can launch a collaborative screenshare where everyone gets a cursor to control the shared window so they can improvisationally code, design, write, and annotate.
Pragli is an avatar-based virtual office where you can see if someone’s in a calendar meeting, away, or in flow listening to music so you know when to instantly open a voice or video chat channel together without having to purposefully find a time everyone’s free. But instead of following you home like Slack, Pragli lets you sign in and out of the virtual office to start and end your day.
While visual communication has been the breakout feature of our mobile phones by allowing us to show where we are, shelter-in-place means we don’t have much to show. That’s expanded the opportunity for tools that take a less-is-more approach to spontaneous communication. Whether for remote partying or rapid problem solving, new apps beyond Clubhouse are incorporating voice rather than just video. Voice offers a way to rapidly exchange information and feel present together without dominating our workspace or attention, or forcing people into an uncomfortable spotlight.
High Fidelity is Second Life co-founder Philip Rosedale’s $72 million-funded current startup. After recently pivoting away from building a virtual reality co-working tool, High Fidelity has begun testing a voice and headphones-based online event platform and gathering place. The early beta lets users move their dot around a map and hear the voice of anyone close to them with spatial audio so voices get louder as you get closer to someone, and shift between your ears as you move past them. You can spontaneously approach and depart little clusters of dots to explore different conversations within earshot.
High Fidelity is currently using a satellite photo of Burning Man as its test map. It allows DJs to set up in different corners, and listeners to stroll between them or walk off with a friend to chat, similar to the real offline event. Since Burning Man was cancelled this year, High Fidelity could potentially be a candidate for holding the scheduled virtual version the organizers have promised.
Houseparty’s former CEO Ben Rubin and Skype GM of engineering Brian Meek are building a spontaneous teamwork tool called Slashtalk. Rubin sold Houseparty to Fortnite-maker Epic in mid-2019, but the gaming giant largely neglected the app until its recent quarantine-driven success. Rubin left.
His new startup’s site explains that “/talk is an anti-meeting tool for fast, decentralized conversations. We believe most meetings can be eliminated if the right people are connected at the right time to discuss the right topics, for just as long as necessary.” It lets people quickly jump into a voice or video chat to get something sorted without delaying until a calendared collab session.
Slashtalk co-founder Ben Rubin at TechCrunch Disrupt NY 2015
Whether for work or play, these spontaneous apps can conjure times from our more unstructured youth. Whether sifting through the cafeteria or school yard, seeing who else is at the mall, walking through halls of open doors in college dorms, or hanging at the student union or campus square, the pre-adult years offer many opportunities for impromptu social interation.
But while socializing or collaborating IRL requires transportation logistics and usually a plan, the new social apps discussed here bring us together instantly, thereby eliminating the need to schedule togetherness ahead of time. Gone too are the geographic limits restraining you to connect only with those within a reasonable commute. Digitally, you can pick from your whole network. And quarantines have further opened our options by emptying parts of our calendars.
Absent those frictions, what shines through is our intention. We can connect with who we want and accomplish what we want. Spontaneous apps open the channel so our impulsive human nature can shine through.
Instagram founders Kevin Systrom and Mike Krieger have teamed up to launch their first product together since leaving the Facebook mothership. Rt.live is an up-to-date tracker of how fast COVID-19 is spreading in each state.
“Rt” measures the average number of people who become infected by an infectious person. The higher above the number 1, the faster COVID-19 races through a population, while a number below one shows the virus receding. For example, Rt.live displays that Georgia has the highest, most dangerous Rt score of 1.5 while New York is down to 0.54 thanks to aggressive shelter-in-place orders.
Krieger tells me that “Kevin has been writing and publishing open-source data analysis notebooks on how to calculate Rt on a daily basis. We wanted to take that work and visualize it so anyone can see how their state is doing at curbing the spread.” Krieger had meanwhile been pitching in by building SaveOurFaves, a directory of local Bay Area restaurants that are selling gift cards so patrons can keep them afloat during quarantine. Built with his wife, the Kriegers open sourced it so people can build similar sites for their communities.
Rt.live shows that as of yesterday, Texas and California are at or just under 1 and Vermont has the best score at 0.33. The charts over time reveal how Washington and Georgia were successfully fighting COVID-19, dipping beneath 1 until the virus bounced back recently. Data is sourced from the COVID Tracking Project and you can examine Rt.live’s modeling system on GitHub.
“As states decide whether and how to open back up, they’ll have to manage their infection rate carefully, and we hope dashboards like rt.live will be helpful in doing so” Krieger says. By better illustrating how even small differences in shelter-in-place policy and compliance can exponentially change the severity of the impact of the virus, it could help convince people to stay inside. This kind of tool could also be helpful for determining where it’d be safe to reactivate some businesses, and quickly catch if virality is spiking and strict social distancing needs to be reinstated.
One fascinating feature of the site is the ability to filter by region so you can see how the Western states are doing better at suppressing COVID-19 than those in the South. You can also view the states with no shelter-in-place orders to see they’re doing worse on average. The charts could help identify how different political orientations and their subsequent policies translate to infection outcomes.
It might seem out of character for the photo app moguls to be building a medical statistics site. But Systrom has long studied virality as part of his work that helped Instagram grow so fast. He began publishing his own statistical models for tracking coronavirus infections and deaths on March 19th. “We’d been talking about ways of working together and this came out of that — my first job out of school was actually doing data visualizations / analysis at Meebo so a blast from the past in more ways than one” Krieger tells me. While Systrom did the data analysis, Krieger built the site, mirroring their old front-end and back-end Instagram roles.
“We built Rt.live because we believe Rt — the effective infection rate — is one of the best ways to understand how COVID is spreading” Kreiger explains. “It was great to work together again — we were able to take it from idea to launch in just a few days because of all our history & shared context.”
Would you pay with a “Google Card?” TechCrunch has attained imagery that shows Google is developing its own physical and virtual debit cards. The Google card and associated checking account will allow users to buy things with a card, mobile phone or online. It connects to a Google app with new features that let users easily monitor purchases, check their balance or lock their account. The card will be co-branded with different bank partners, including CITI and Stanford Federal Credit Union.
A source provided TechCrunch with the images seen here, as well as proof that they came from Google. Another source confirmed that Google has recently worked on a payments card that its team hopes will become the foundation of its Google Pay app — and help it rival Apple Pay and the Apple Card. Currently, Google Pay only allows online and peer-to-peer payments by connecting a traditionally issued payment card. A “Google Pay Card” would vastly expand the app’s use cases, and Google’s potential as a fintech giant.
Google the financial services company?
By building a smart debit card, Google has the opportunity to unlock new streams of revenue and data. It could potentially charge interchange fees on purchases made with the card or other checking account fees, and then split them with its banking partners. Depending on its privacy decisions, Google could use transaction data on what people buy to improve ad campaign measurement or even targeting. Brands might be willing to buy more Google ads if the tech giant can prove they drive a sales lift.
The long-term implications are even greater. While once the industry joke was that every app eventually becomes a messaging app, more recently it’s been that every tech company eventually becomes a financial services company. A smart debit card and checking accounts could pave the way for Google offering banking, stock brokerage, financial advice or robo-advising, accounting, insurance or lending.
Google’s vast access to data could allow it to more accurately manage risk than traditional financial institutions. Its deep connection to consumers via apps, ads, search and the Android operating system gives it ample ways to promote and integrate financial services. With the COVID-19 downturn taking shape, high-margin finance products could help Google develop efficient revenue opportunities and build its share price back up.
When TechCrunch asked Google for confirmation, it did not dispute our findings or assertions. The company offered us a statement it provided reporters following a November story, wherein Google told The Wall Street Journal it was experimenting in the checking account space. TechCrunch is the first to report Google’s debit card plans:
We’re exploring how we can partner with banks and credit unions in the US to offer smart checking accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account. Our lead partners today are Citi and Stanford Federal Credit Union, and we look forward to sharing more details in the coming months.
For now, Google’s strategy is to let partnered banks and credit unions provide the underlying financial infrastructure and navigate regulation while it builds smarter interfaces and user experiences. With people around the world suddenly more concerned about their finances amidst the coronavirus economic disaster, a debit card with more transparency and controls could be appealing.
First look at the Google Card
Traditional banking products can be clunky, often requiring phone communication with customer service or sifting through cluttered websites to address security issues. Google hopes to make financial management as intuitive as its email and mapping apps. The card and app designs shown here are not final, and it’s unclear when Google’s debit card may launch. But let’s take a look at what these internal Google materials reveal about its ambitions for its payment instrument.
The Google debit card will come co-branded with the Google name and its partnered bank. In the designs, it’s a chip card on the Visa network, though Google could potentially support other networks like Mastercard. Users are able to add money or transfer funds out of their account from the connected Google app, which is likely to be Google Pay, and use a fingerprint and PIN for account security.
Once connected to their bank or credit union account, users could pay for purchases in retail stores with a physical Google debit card, including with contactless payments, by just holding it up to a card reader. A virtual version of the card that lives on a user’s phone can also be used for Bluetooth mobile payments. Meanwhile, a virtual card number can be used for online or in-app payments.
Users are shown a list of recent transactions, with each including the merchant name, date and price. They can dig into each transaction to see the location on a map, get directions or call the store. If users don’t recognize a transaction, it’s easy to protect themselves with the card’s vast security options.
If a customer suspects foul play because they lost their card, they can lock it and optionally order a replacement while still being able to pay with their phone or online, thanks to Google’s virtual card number system that’s different than the one on their physical card. If instead they suspect their virtual card number was stolen by a hacker, they can quickly reset it. And if they believe someone has gained unauthorized access to their account, they can lock it entirely to block all types of payments and transfers.
The settings reveal options for notifications and privacy controls to “decide what information you share,” though we don’t have imagery of what’s contained in those menus. It’s unclear how much power Google will give customers to limit the company or merchant’s data access. Google’s decisions there could impact how transaction data might fuel its other businesses.
Google is a relative late-comer to offering its own card. Apple launched its Apple Card in August, offering a slickly designed titanium Mastercard credit card backed by Goldman Sachs. It charges minimal customer fees, comes with a virtual card for use through Apple Pay and generates interest.
Apple does collect interchange fees from merchants, though, which Google could similarly gather to earn revenue. Last month, Apple changed the Card’s privacy settings to share more data with Goldman Sachs that might also help the two provide additional financial services. Apple Pay now accounts for 5% of global card transactions, and is forecast to hit 10% by 2024, according to Bernstein research. The underlines the gigantic market Google is gunning for here.
The stock brokerage and robo-advisor apps have also joined the payments race. Wealthfront launched cash accounts and debit cards last February, bringing in $1 billion in assets in two months and doubling the company’s total holdings to $20 billion by September. Betterment launched its checking product in October 2019 with a Visa debit card, but it doesn’t generate interest.
Robinhood botched the December 2018 launch of its checking accounts due to ineligible insurance, but relaunched in October 2019 with debit card withdrawls from 75,000 ATMs and a solid interest rate. It’s unclear how Google’s card will work with ATMs or how its checking accounts will generate interest.
Robinhood’s debit cards
The appeal for Google and the rest is clear. It seems whenever companies help move people’s money around, some of it inevitably “falls off the truck” and lands in their pockets. Financial services are typically low-overhead ways to generate revenue. That could be especially enticing, as Google has found many of its side hustle “other bets” to be unsustainable. It’s moved to prune some of these tertiary projects, such as its Makani wind energy kites.
Google may never find businesses as lucrative as its core in search and advertising, but it has the advantages to become a serious player in fintech. Its vast sums of cash, deep bench of engineering talent, experience building complex utilities, numerous consumer touch points and near-bottomless well of data could give it an edge over stodgier old banks and scrappier startups. And while Facebook slams into regulatory scrutiny and is forced to scale back its Libra cryptocurrency, Google’s more familiar approach via debit cards could pay off.
Could avatars that show what co-workers are up to save work-from-home teams from constant distraction and loneliness? That’s the idea behind Pragli, the Bitmoji for the enterprise. It’s a virtual office app that makes you actually feel like you’re in the same building.
Pragli uses avatars to signal whether co-workers are at their desk, away, in a meeting, in the zone while listening to Spotify, taking a break at a digital virtual water coooler or done for the day. From there, you’ll know whether to do a quick ad hoc audio call, cooperate via screenshare, schedule a deeper video meeting or a send a chat message they can respond to later. Essentially, it translates the real-word presence cues we use to coordinate collaboration into an online workplace for distributed teams.
“What Slack did for email, we want to do for video conferencing,” Pragli co-founder Doug Safreno tells me. “Traditional video conferencing is exclusive by design, whereas Pragli is inclusive. Just like in an office, you can see who is talking to who.” That means less time wasted planning meetings, interrupting colleagues who are in flow or waiting for critical responses. Pragli offers the focus that makes remote work productive with the togetherness that keeps everyone sane and in sync.
The idea is to solve the top three problems that Pragli’s extensive interviews and a Buffer/AngelList study discovered workers hate:
Lack of boundaries
You never have to worry about whether you’re intruding on someone’s meeting, or if it’d be quicker to hash something out on a call instead of vague text. Avatars give remote workers a sense of identity, while the Pragli water cooler provides a temporary place to socialize rather than an endless Slack flood of GIFs. And because you clock in and out of the Pragli office just like a real one, co-workers understand when you’ll reply quickly versus when you’ll respond tomorrow unless there’s an emergency.
“In Pragli, you log into the office in the morning and there’s a clear sense of when I’m working and when I’m not working. Slack doesn’t give you astrong sense if they’re online or offline,” Safreno explains. “Everyone stays online and feels pressured to respond at any time of day.”
Pragli co-founder Doug Safreno
Safreno and his co-founder Vivek Nair know the feeling first-hand. After both graduating in computer science from Stanford, they built StacksWare to help enterprise software customers avoid overpaying by accurately measuring their usage. But when they sold StacksWare to Avi Networks, they spent two years working remotely for the acquirer. The friction and loneliness quickly crept in.
They’d message someone, not hear back for a while, then go back and forth trying to discuss the problem before eventually scheduling a call. Jumping into synchronous communicating would have been much more efficient. “The loneliness was more subtle, but it built up after the first few weeks,” Safreno recalls. “We simply didn’t socially bond while working remotely as well as in the office. Being lonely was de-motivating, and it negatively affected our productivity.”
The founders interviewed 100 remote engineers, and discovered that outside of scheduled meetings, they only had one audio or video call with co-workers per week. That convinced them to start Pragli a year ago to give work-from-home teams a visual, virtual facsimile of a real office. With no other full-time employees, the founders built and released a beta of Pragli last year. Usage grew 6X in March and is up 20X since January 1.
Today Pragli officially launches, and it’s free until June 1. Then it plans to become freemium, with the full experience reserved for companies that pay per user per month. Pragli is also announcing a small pre-seed round today led by K9 Ventures, inspired by the firm’s delight using the product itself.
To get started with Pragi, teammates download the Pragli desktop app and sign in with Google, Microsoft or GitHub. Users then customize their avatar with a wide range of face, hair, skin and clothing options. It can use your mouse and keyboard interaction to show if you’re at your desk or not, or use your webcam to translate occasional snapshots of your facial expressions to your avatar. You can also connect your Spotify and calendar to show you’re listening to music (and might be concentrating), reveal or hide details of your meeting and decide whether people can ask to interrupt you or that you’re totally unavailable.
From there, you can by audio, video or text communicate with any of your available co-workers. Guests can join conversations via the web and mobile too, though the team is working on a full-fledged app for phones and tablets. Tap on someone and you can instantly talk to them, though their mic stays muted until they respond. Alternatively, you can jump into Slack-esque channels for discussing specific topics or holding recurring meetings. And if you need some down time, you can hang out in the water cooler or trivia game channel, or set a manual “away” message.
Pragli has put a remarkable amount of consideration into how the little office social cues about when to interrupt someone translate online, like if someone’s wearing headphones, in a deep convo already or if they’re chilling in the microkitchen. It’s leagues better than having no idea what someone’s doing on the other side of Slack or what’s going on in a Zoom call. It’s a true virtual office without the clunky VR headset.
“Nothing we’ve tried has delivered the natural, water-cooler-style conversations that we get from Pragli,” says Storj Labs VP of engineering JT Olio. “The ability to switch between ‘rooms’ with screen sharing, video and voice in one app is great. It has really helped us improve transparency across teams. Plus, the avatars are quite charming as well.”
With Microsoft’s lack of social experience, Zoom consumed with its scaling challenges and Slack doubling down on text as it prioritizes Zoom integration over its own visual communication features, there’s plenty of room for Pragli to flourish. Meanwhile, COVID-19 quarantines are turning the whole world toward remote work, and it’s likely to stick afterwards as companies de-emphasize office space and hire more abroad.
The biggest challenge will be making comprehensible enough to onboard whole teams such a broad product encompassing every communication medium and tons of new behaviors. “How do you build a product that doesn’t feel distracting like Slack but where people can still have the spontaneous conversations that are so important to companies innovating?,” Safreno asks. The Pragli founders are also debating how to encompass mobile without making people feel like the office stalks them after hours.
“Long-term, [Pragli] should be better than being in the office because you don’t actually have to walk around looking for [co-workers], and you get to decide how you’re presented,” Safreno concludes. “We won’t quit, because we want to work remotely for the rest of our lives.”
It’s a brutal time for marijuana startups. I’m hearing some are raising at one-fifth of their 2019 valuation amid rampant competition, tall taxes and slow legalization. The struggles for marijuana’s best-known startup, delivery service Eaze, continue as today it’s losing one of its top partners: $75 million-funded weed brand empire Caliva has dropped Eaze in favor of launching its own delivery system.
By partnering with Hypur banking to solve the marijuana payments legality issue, Caliva will be able to accept contactless mobile payments, unlike Eaze, which usually requires customers to pay in cash. Caliva buyers won’t have to worry about trips to the ATM, especially now during COVID-19 shelter-in-place orders, which the startup expects will boost their average order volume. Combined with verticalizing delivery in-house, plus its retail and wholesale operations, Caliva hopes it can grow its margins and survive this long winter for weed startups.
“Our mission at Caliva has always been to provide safe and easy access to plant-based solutions for health, happiness and healing,” said Caliva CEO Dennis O’Malley. “Together with Hypur, we are proud to offer our customers safe, compliant and convenient cashless payment options to improve and modernize their purchasing experience.” It hasn’t been so easy for Eaze, though.
Back in January, we reported that Eaze was in trouble, having suffered unannounced layoffs and executive departures. It burned cash on billboards, and never launched the services of a startup it acquired. There were questions about data security, and weed brands dropped Eaze due to delayed payments. It was almost out of money and in danger of vaporizing. It luckily managed to secure a $15 million bridge round to keep it alive, plus a $20 million Series D in February just before COVID-19 hit the fan, though I dread to think of the terms of that funding.
The plan for Eaze was to verticalize, buying and developing brands that it could sell through its existing delivery service to up its margins. Now it’s seeing former partner Caliva do the reverse, launching a delivery service to sell its own Fun Uncle, Deli and Caliva brands, as well as distribute other vape, edible and flower brands like Dosist and Kiva. Its menu breadth to attract customers and in-house brands to drive profits could be a winning combo. After limited pilots in SoCal, Caliva delivery is launching in LA and the Bay Area.
Unfortunately, traditional payment processors usually refuse to work with marijuana companies for fear of legal repercussions. That’s why most delivery services can’t accept credit or debit cards, or do so through sketchy legal workarounds that have led payment providers to be sued. Others like CanPay only offer ACH transfers, while Square only works with CBD sellers. “We spent time researching and evaluating all platforms that accept cannabis payments in the U.S., and found that Hypur has the best security, compliance and consumer experience” O’Malley tells me.
Although 400-person Caliva is now trying to raise a Series B, it may experience tough headwinds with shelter-in-place orders in effect in states where marijuana is legal. Stiff taxes on marijuana have meanwhile helped the black market continue to thrive, as California’s $3.1 billion in legal 2019 sales were overshadowed by an estimated $8.7 billion in illegal sales. Faster delivery and simpler payments could help. But enthusiasm for the industry has dwindled following the initial flood of entrants sought to exploit the end of prohibition. Is the Green Rush over?
It takes either audacious self-confidence or reckless hubris to build a completely asocial video app in 2020. You can decide which best describes Quibi, Hollywood’s $1.75 billion-funded attempt at a mobile-only Netflix of six to 10-minute micro-TV show episodes. Quibi manages to miss every trend and tactic that could help make its app popular. The company seems to believe it can succeed on only its content (mediocre) and marketing dollars (fewer than it needs).
I appreciate that Quibi is doing something audaciously different than most startups. Rather than iterating toward product-market fit, it spent a fortune developing its slick app and buying fancy content in secret so it could launch with a bang.
Yet Quibi’s bold business strategy is muted by a misguided allegiance to the golden age of television before the internet permeated every entertainment medium. It’s unshareable, prescriptive, sluggish, cumbersome and unfriendly. Quibi’s unwillingness to borrow anything from social networks makes the app feel cold and isolated, like watching reality shows in the vacuum of space.
In that sense, Quibi is the inverse of TikTok, which feels fiercely alive. TikTok is designed to immediately immerse you in crowd-vetted content that grabs your attention and inspires you to spread your take on it to friends. That’s why TikTok has almost 2 billion downloads to date, while Quibi picked up just 300,000 on the day of its big splash into market.
Here’s a breakdown of the major missteps by Quibi, why TikTok does it better and how this new streaming app can get with the times.
What Hollywood thinks we want
Quibi feels like some off-brand cable channel, with a mix of convoluted reality shows, scripted dramas and news briefs. Imagine MTV at noon in the mid-2000s. Nothing seemed must-see. There’s no Game of Thrones or Mandalorian here. While the production value is better than what you’ll find on YouTube, the show concepts feel slapdash with novelty that quickly fades.
Chrissy Teigen as a small claims court judge? The tear-jerking “Thanks A Million” does skillfully multiply the “OMG” gratitude moment from makeover programs to happen 4X per episode. But a cooking show where blindfolded chefs have to guess what food was just exploded in their faces…(sigh)
The catalog feels like the product of TV writers being told they have 10 seconds to come up with an idea. “What would those idiots watch?” The shows remind me of old VR games that are barely more than demos, or an app built in a garage without ever asking prospective users what they need. Co-founder Jeffrey Katzenberg may have produced The Lion King and Shrek, but the app’s content feels like it was greenlit by, well, Hewlett Packard Enterprise’s leader Meg Whitman, who indeed is Quibi’s CEO.
Despite being built for a touch-screen interface, there’s little Bandersnatch-style interactive content so far, nor are the creators doing anything special with the six to 10-minute format. The shows feel more like condensed TV programs with episodes ending when there would be a commercial break. There’s no onboarding process that could ask which popular TV shows or genres you’re into. As the catalog expands, that makes it less likely you’ll find something appealing within a few taps.
TikTok comes from the opposite direction. Instead of what Hollywood thinks we want, its content comes straight from its consumers. People record what they think would make them and their friends laugh, surprised or enticed. The result is that with low to zero production budget, random kids and influencers alike make things with millions of Likes. And as elder millennials, Gen Xers and beyond get hooked, they’re creating videos for their peers, as well. The algorithm monitors what you’re hovering over and rapidly adapts its recommendations to your style.
TikTok is fundamentally interactive. Each clip’s audio can be borrowed to produce remixes that personalize a meme for a different demographic or subculture. And because its stars are internet natives, they’re in constant communication with their fan base to tune content to what they want. There’s something for everyone. No niche is too small.
The Fix: Quibi should take a hint from Brat TV, the Disney Channel for the YouTube generation that gives tween social media stars their own premium shows about being a grade school kid to create content with a built-in fan base. [Disclosure: My cousin Darren Lachtman is a Brat co-founder.)
Take the Chrissy’s Court model, and shift it to stars who are 20 years younger. Give TikTok phenoms like Charli D’Amelio or Chase Hudson Quibi shows and let them help conceptualize the content, and they’ll bring their legions of fans. Double-down on choose-your-own-adventures and fan voting game shows that leverage the phone’s interactivity. Fund creators that will differentiate Quibi by making it look like anything other than daytime TV. And ask users directly what they want to see right when they download the app.
This is frankly insane. Screenshots of Quibi appear as a blank black screen. That means no memes. If people can’t turn Quibi scenes into jokes they’ll share elsewhere, its shows won’t ever become fixtures of the cultural zeitgeist like Netflix’s Tiger King has. Yes, other mobile streaming apps like Netflix and Disney+ also block screenshots, but they have web versions where you can snap and share what you want. Quibi never should have structured its deals to license content from producers in a way that prevented any way to riff on or even let friends preview its content.
The Fix: Quibi should allow screenshots. There’s little risk of spoilers or piracy. If its deals prohibit that, then it should offer pre-approved screenshots and video clips/trailers of each episode that you can download and share. Think of it like an in-app press kit. Even if we’re not allowed to set up the perfect screenshot for making a meme, at least then we could coherently discuss the shows on other social networks.
On mobile, you’re always just a swipe away from something more interesting. It’s like if you watched TV with your finger permanently hovering over the change channel button. Ever noticed how movie trailers now often start with a fast-forward collage of their most eye-catching scenes? Quibi seems intent on communicating prestige with its slow-building dramas like The Most Dangerous Game and Survive, which both had me bored and fast-forwarding. And that’s watching Quibi at home on the couch. While on the go, where it was designed to be consumed, slow pacing could push users with a minute or two to spare to open Instagram or TikTok instead.
None of this is helped by Quibi not auto-playing a trailer or the first episode the moment you scroll past a show on the home screen. Instead, you see a static title card for two seconds before it starts playing you an excerpt of the program. That makes it more cumbersome to discover new shows.
Where TikTok wins is in immediacy. Creators know users will swipe right past their video if it’s not immediately entertaining or obviously revving up to a big reveal. They grab you in the first second with smiles, costumes, bold captions or crazy situations. That also makes it easy for viewers to dismiss what’s irrelevant to them and teach the TikTok algorithm what they really want. Plus, you know that you can score a dopamine hit of joy even if you only have 30 seconds. TikTok makes Quick Bites feel like an understaffed sit-down restaurant.
The Fix: Quibi needs to teach creators to hook viewers instantly by previewing why they should want to watch. Since tapping a show’s card on the Quibi homepage instantly plays it, those teasers need to be built into the first episode. Otherwise, Quibi needs a button to view a trailer from its buried dedicated show pages to the preview card most people interact with on the home screen. Otherwise, users may never discover what Quibi shows resonate with them and teach it which to show and make more of.
Anti-social video club
Quibi neglects all its second-screen potential. No screenshotting makes it tough to discuss shows elsewhere, yet there’s no built-in comments or messaging to discuss or spread them in-app. Pasting an episode link into Twitter doesn’t even display the show’s name in the preview box. Nor do shows have their own social accounts to follow to remind you to keep watching.
There’s no way for friends to follow what you’re watching or see your recommendations. No leaderboards of top shows. Certainly no time-stamped, live-stream style crowd annotations. No synced-up co-watching with friends, despite a lack of TV apps preventing you from watching with anyone else in person unless you crowd around one phone.
It all feels like Quibi figured advertising would be enough. It could run contests where winners get a Cameo-esque message or chat with their favorite stars. Quibi could let you share scenes with your face swapped onto actors’ heads, deepfake-style like Snapchat’s (confusingly named) Cameos feature. It could host in-app roundtables with the casts where users could submit questions. It’s like if Web 2.0 never happened.
TikTok, meanwhile, harnesses every conceivable social feature. Follow, Like, comment, message, go Live, duet, remix or download and share any video. It beckons viewers to participate in trending challenges. And even when users aren’t itching to return to TikTok, notifications from these social features will drag them back in, or watermarked clips will follow them to other networks. Every part of the app is designed to make its content the center of popular culture.
The Fix: Quibi needs to understand that just because we’re watching on mobile, doesn’t make video a solo experience. At first, it should add social content discovery options so you can see which friends opt in to share that they’re watching or view a leaderboard of the top programs. Shows, especially ones dripping out new episodes, are more fun when you have someone to chat about them with.
Eventually, Quibi should layer on in-app second-screen features. Create a way to share comments at the end of each episode that people read during the credits so they feel like they’re in a viewing community.
Can Quibi be more?
What’s most disappointing about Quibi is that it has the potential to be something fresh, merging classically produced premium content with the modern ways we use our phones. Yet beyond shows being shot in two widths so you can switch between watching in landscape or portrait mode at any time, it really is just a random cable channel shrunk down.
Youths act in front of a mobile phone camera while making a TikTok video on the terrace of their residence in Hyderabad on February 14, 2020 (Photo by NOAH SEELAM / AFP) (Photo by NOAH SEELAM/AFP via Getty Images)
One of the few redeeming opportunities for Quibi is using the daily episode release schedule to serialize content that benefits from suspense, as Ryan Vinnicombe aka InternetRyan notes. Bingeing via traditional streaming services can burn through thrillers before they can properly build up suspense and fan theories or let late-comers catch up while a show is still in the zeitgeist. Cliffhangers with just a day instead of a week to wait could be Quibi’s killer feature.
Suspense is also one thing TikTok fails at. Within a single video, they’re actually often all about suspense, waiting through build up for a gag or non-sequitur to play out. But creators try to rope in followers by making a multi-minute video and splitting it into parts so people subscribe to them to see the next part. Yet since TikTok doesn’t always show timestamps and surfaces old videos on its home screen, it can often be a chore to find the Part Two, and there’s no good way for creators to link them together. TikTok could stand to learn about multi-episode content from Quibi.
But today, Quibi feels like a minitiaturized and degraded version of what we already get for free on the web or pay for with Netflix. Quibi charging $4.99 per month with ads or $7.99 without seems like a steep ask without delivering any truly must-see shows, novel interactive experience or memory-making social moments.
Quibi’s success may simply be a test of how bad people are at cancelling 90-day free trials (hint: they’re bad at it!). The bull case is that absentminded subscribers among the 300,000 first-day downloads and some diehard fans of the celebs it’s given shows will bring Quibi enough traction to raise more cash and survive long enough to socialize its product and teach creators to exploit the format’s opportunities.
But the bear case is already emerging in Quibi’s rapidly declining App Store rank, which fell from No. 4 overall when it launched Monday to No. 21 yesterday after just 830,000 total downloads according to Sensor Tower. Lackluster content and no virality means it might never become the talk of the town, leading top content producers to slink away or half-ass their contributions, leaving us to dine on short video elsewhere.