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Archivo del Autor: Belen De Leon

Why your startup shouldn’t rush to $1 million in revenue

There is a prevailing belief that the magic formula for early-stage tech startups hinges on how quickly they achieve $1 million in annual recurring revenue (ARR). Investors in SaaS companies, in particular, are very guilty of pushing this or its equally loaded corollary, “When will you sign your first six-figure deal?”

But in the rush toward these numbers, too many startups lose sight of their primary intent: These metrics are supposed to be an indicator of product/market fit. We’ve seen companies reach $1 million in ARR in less than a year, yet not have enough market momentum to get their next million easily. We’ve seen early-stage companies so concerned about getting those first sales, they don’t validate the market and if they’re building the right product. We’ve also watched a focus on new logos make companies forget about keeping existing customers happy, introducing unexpectedly high churn — something startups can’t afford.

Those first customers and that first million are supposed to be the bedrock on which the rest of the business grows. Founders must constantly ask what they’re learning about their market, product and go-to-market approach — in that order! — so the business becomes a flywheel.

Revenue is a lagging indicator of sales success, so must likewise be prioritized accordingly. That’s not to say revenue isn’t vitally important and that there isn’t a great deal of urgency to it, but focusing on it too much too early can mask big problems that will hurt startups later when the stakes are higher.

Here are a few lessons we’ve learned by watching our early-stage companies go through this crucial phase. Every early-stage company needs to do them well.

Customer and market discovery is job No. 1

We talk about product and knowing customers a lot, but that is insufficient. Startups must understand the market, as well. How do customers do this today? Is there urgency around the problem? What is the community saying? An early investor in PagerDuty went onto Reddit and Quora and just looked at who people were talking about. It made his decision easy.

To be really successful, it is as important to understand market dynamics as it is to deliver a great product. This also helps zero in on all the aspects of your ideal customer profile; it needs to be more specific than you think! This also then helps qualify customers for future sales.

Elevate Security stood out in their super-crowded security space because they carved out a unique position around people-powered security. They used their early sales process to carefully qualify who would help them best develop their products. Their first product got shout-outs on social media from users who loved it — a rare occurrence in security — and were indicators they had found good initial customers and were creating something unique.

Build a product that sells itself

You’ll always find smart people saying, “I love what you’re doing.” Some things are so broken even a mediocre improvement is worth a change. But this is why revenue can be a false indicator for scalable success: Founders find enough early adopters to get that first million, which leads them to believe the product is enough. The company starts chasing more revenue, not investing in a product-based growth engine. If sales keeps hitting their numbers, everyone believes things are fine. Until they’re not. And then it’s usually a really heavy lift, with 6-12 months of product, sales or team upgrades.

What startup doesn’t want a growth curve like this? Zoom had triple-digit growth for the last four years in a crowded, mature video conferencing category. Janine Pelosi, Zoom’s head of marketing, said the reason they were so successful before and after she arrived was they have a great product. It’s reliable, easy to use, and the founder, Eric Yuan, was selling it every day. Yuan knew the market really well coming out of Webex, and always touching customers meant he could adjust company strategy accordingly. Zoom embodied the real magic formula: know your market + build great product.

Pay attention to customer engagement and delight

Customer satisfaction is simple: It comes from the perception that people get value from their purchase; it’s much less about how much they paid. It’s also always cheaper to make an existing customer happy than it is to acquire a new one, so make sure even in the early days that you’re investing in making current customers happy advocates.

Aquabyte uses computer vision to identify sea lice in the $160 billion aquafarming market. When they showed customers FreckleID (think facial recognition for fish) to uniquely identify fish in a pen of 200,000, fish farmers loved the idea. The price they were willing to pay was 3x what the CEO thought possible. They’re likewise investing heavily in making sure their initial customer is successful with the product and are delighting them in unexpected ways (handwritten holiday cards). They have more prospects in their pipeline than they have capacity, which means they don’t need to expand sales to grow revenue fast.

Your startup may have the coolest tech, be in the biggest market and have the smartest team. No matter what your board says, remember revenue is NOT the primary indicator; it is simply an indicator. To become a breakout success, you need to read the tea leaves of all aspects of your market and build a product and customer experience that is truly superior.

Source: TechCrunch

Iota Biosciences raises $15M to produce in-body sensors smaller than a grain of rice

Fitness trackers and heart-rate monitors are all well and good, but if you want to track activity inside the body, the solutions aren’t nearly as convenient. Iota Biosciences wants to change that with millimeter-wide sensors that can live more or less permanently in your body and transmit wirelessly what they detect, and a $15 million Series A should put them well on their way.

The team emerged from research at UC Berkeley, where co-founders Jose Carmena and Michel Maharbiz were working on improving the state of microelectrodes. These devices are used all over medical and experimental science to monitor and stimulate nerves and muscle tissues. For instance, a microelectrode array in the brain might be able to help detect early signs of a seizure, and around the heart one could precisely test the rhythms of cardiac tissues.

But despite their name, microelectrodes aren’t really small. The tips, sure, but they’re often connected to larger machines, or battery-powered packs, and they can rarely stay in the body for more than a few weeks or months due to various complications associated with them.

Considering how far we’ve come in other sectors when it comes to miniaturization, manufacturing techniques and power efficiency, Carmena and Maharbiz thought, why don’t we have something better?

“The idea at first was to have free-floating motes in the brain with RF [radio frequency] powering them,” Carmena said. But they ran into a fundamental problem: RF radiation, because of its long wavelength, requires rather a large antenna to receive them. Much larger than was practical for devices meant to swim in the bloodstream.

“There was a meeting at which everything died, because we were like two orders of magnitude away from what we needed. The physics just weren’t there,” he recalled. “So were like, ‘I guess that’s it!’ ”

But some time after, Maharbiz had a “eureka” moment — “as weird as it sounds, it occurred to me in a parking lot. You just think about it and all these things align.”

His revelation: ultrasound.

Power at the speed of sound

You’re probably familiar with ultrasound as a diagnostic tool, for imaging inside the body during pregnancy and the like — or possibly as a range-finding tool that “pings” nearby objects. There’s been a lot of focus on the venerable technology recently as technologists have found new applications for it.

In fact, a portable ultrasound company just won TechCrunch’s Startup Battlefield in Lagos:

Iota’s approach, however, has little to do with these traditional uses of the technology. Remember the principle that you have to have an antenna that’s a reasonable fraction of an emission’s wavelength in order to capture it? Well, ultrasound has a wavelength measured in microns — millionths of a meter.

So it can be captured — and captured very efficiently. That means an ultrasound antenna can easily catch enough waves to power a connected device.

Not only that, but as you might guess from its use in imaging, ultrasound goes right through us. Lots of radiation, including RF, gets absorbed by the charged, salty water that makes up much of the human body.

“Ultrasound doesn’t do that,” Maharbiz said. “You’re just Jell-O — it goes right through you.”

The device they put together to take advantage of this is remarkably simple, and incredibly tiny. On one side is what’s called a piezoelectric crystal, something that transforms force — in this case, ultrasound — into electricity. In the middle is a tiny chip, and around the edge runs a set of electrodes.

It’s so small that it can be attached to a single nerve or muscle fiber. When the device is activated by a beam of ultrasound, voltage runs between the electrodes, and this minute current is affected by the electrical activity of the tissue. These slight changes are literally reflected in how the ultrasonic pulses bounce back, and the reader can derive electrophysiological voltage from those changes.

Basically the waves they send power the device and bounce back slightly changed, depending on what the nerve or muscle is doing. By sending a steady stream of pulses, the system collects a constant stream of precise monitoring data simply and non-invasively. (And yes, this has been demonstrated in vivo.)

Contained inside non-reactive, implant-safe containers, these microscopic “motes” could be installed singly or by the dozen, doing everything from monitoring heart tissue to controlling a prosthesis. And because they can also deliver a voltage, they could conceivably be used for therapeutic purposes, as well.

And to be clear, those purposes won’t be inside the brain. Although there’s no particular reason this tech wouldn’t work in the central nervous system, it would have to be smaller and testing would be much more complicated. The initial applications will all be in the peripheral nervous system.

At any rate, before any of that happens, they have to be approved by the FDA.

The long medtech road

As you might guess, this isn’t the kind of thing you can just invent and then start implanting all over the place. Implants, especially electronic ones, must undergo extreme scrutiny before being allowed to be used in even experimental treatment.

Fortunately for Iota, their devices have a lot of advantages over, say, a pacemaker with a radio-based data connection and five-year battery. The only transmission involved is ultrasound, for one thing, and there are decades of studies showing the safety of using it.

“The FDA has well-defined limits for average and peak powers for the human body with ultrasound, and we’re nowhere near those frequencies or powers. This is very different,” explained Maharbiz. “There’s no exotic materials or techniques. As far as constant low-level ultrasound goes, the notion really is that it does nothing.”

And unlike a major device like a medication port, pump, stint, pacemaker or even a long-term electrode, “installation” is straightforward and easily reversible.

It would be done laparoscopically, or through a tiny incision. said Carmena. “If it has to be taken out, it can be taken out, but it’s so minimally invasive and small and safe that we keep it,” he said.

These are all marks in Iota’s favor, but testing can’t be rushed. Although the groundwork for their devices was laid in 2013, the team has taken a great deal of time to advance the science to the point where it can be taken out of the lab to begin with.

In order to get it now to the point where they can propose human trials, Iota has raised $15 million in funding; the round was led by Horizons Ventures, Astellas, Bold Capital Partners, Ironfire and Shanda. (The round was in May but only just announced.)

The A round should get the company from its current prototype phase to a point, perhaps some 18 months distant, when they have a production-ready version ready to present to the FDA — at which point more funding will probably be required to get through the subsequent years of testing.

But that’s the game in medtech, and all the investors know it. This could be a hugely disruptive technology in a number of fields, although at first the devices need to be approved for a single medical purpose (one Iota has decided on but can’t disclose yet).

It’s a long road, all right, but at the end of it is the fulfillment of a promise straight out of sci-fi. It may be years before you have microscopic, ultrasound-powered doodads swimming around inside you, but that future is well on its way.

Source: TechCrunch

People lost their damn minds when Instagram accidentally went horizontal

Earlier today, when Instagram suddenly transformed into a landscape-oriented Tinder-esque nightmare, the app’s dedicated users extremely lost their minds and immediately took to Twitter to be vocal about it.

As we reported, the company admitted that the abrupt shift from Instagram’s well-established vertical scrolling was a mistake. The mea culpa came quickly enough, but Instagram’s accidental update was already solidified as one of the last meme-able moments of 2018.

Why learn about the thing itself and why it happened when you could watch the meta-story play out in frantic, quippy tweets, all vying for relevance as we slide toward 2019’s horrific gaping maw? If you missed it the first time around, here you go.

A handful of memes even managed to incorporate another late-2018 meme, Sandra Bullock in Bird Box — a Netflix original that is not a birds-on-demand service, we are told.

Unupdate might not be a word, but it is absolutely a state of mind.

For better or worse, the Met got involved with what we can only assume is a Very Important Artifact for the cause.

But can we ever really go back? Can we unsee a fate so great, one still looming on some distant social influencer shore? Probably yeah, but that doesn’t mean we won’t all lose it if it happens again.

Source: TechCrunch

Reid Hoffman denies direct knowledge of funding disinformation in the Alabama Senate race

One of Silicon Valley’s prominent billionaires is in hot water after funding deceptive social media campaigns with echoes of Russia’s own political playbook. Reid Hoffman, who co-founded LinkedIn in 2003 and is now a partner at Greylock, footed the bill for a small political project with the aim of getting Democrat Doug Jones elected in 2017’s special election. Now, Hoffman is sorry — but he also maintains that he didn’t know where his money ended up.

It’s not clear what impact the project had in successfully electing Jones, but internal documents reveal that the effort known as Project Birmingham “experimented with many of the tactics now understood to have influenced the 2016 elections.” Those tactics are now widely regarded as both politically and professionally toxic as tech companies — most notably Facebook — continue to face intense scrutiny over their role in facilitating the spread of disinformation meant to influence U.S. political behavior.

As The New York Times reported:

The project’s operators created a Facebook page on which they posed as conservative Alabamians, using it to try to divide Republicans and even to endorse a write-in candidate to draw votes from Mr. Moore. It involved a scheme to link the Moore campaign to thousands of Russian accounts that suddenly began following the Republican candidate on Twitter, a development that drew national media attention.

In a statement following reporting from The New York Times and The Washington Post, Hoffman did not dispute the assertion that he funded the efforts, but denied any knowledge of the controversial tactics themselves.

“I want to make it clear from the outset that I had never even heard of this project before reading about it in the Times’ coverage,” Hoffman said in the statement, published to Medium. “The Times articles imply that I had knowledge of it and that I endorsed its tactics. Let me be absolutely clear: I do not.”

Hoffman went on to disavow the use of political disinformation intended to influence the outcome of an election.

“I would not have knowingly funded a project planning to use such tactics, and would have refused to invest in any organization that I knew might conduct such a project,” Hoffman said. “Nevertheless, I do have an apology to make and have learned a lesson here.”

In his Medium post Hoffman describes how he became more politically active after the 2016 U.S. presidential election. He recounts how he funded dozens of political and civic engagement organizations in conjunction with a group called Investing in Us. “Our goal is to identify promising organizations and provide them with resources to accelerate positive change,” Hoffman said.

Many of those investments appear to be uncontroversial, including contributions to the Center on Rural Innovation and an organization called Opportunity at Work which helps connect Americans with job opportunities. As Hoffman explains, his entanglement in the Alabama Senate race came about through his choice to fund a group called American Engagement Technologies (AET):

One of the early organizations that we supported was American Engagement Technologies (AET), a group which sought to develop technical solutions to counteract fake news, bot armies, and other kinds of digital manipulation and disinformation, and to use social media and data analytics to increase civic engagement and improve access to accurate information about candidates and issues.

AET, in turn, provided funding to a group called New Knowledge. Through AET or otherwise, I have never personally authorized or directed any funding to New Knowledge. I — regretfully — do not know why AET chose to support New Knowledge or for what specific purposes, if any, this funding was allocated.

To reiterate yet again, I find the tactics that have been recently reported highly disturbing. For that reason, I am embarrassed by my failure to track AET — the organization I did support — more diligently as it made its own decisions to perhaps fund projects that I would reject.

Though Hoffman’s post did not specify an amount, The Washington Post reported that Hoffman invested $750,000 in AET. The group is helmed by Mikey Dickerson, a former Google engineer who served as the founding director of the USDS during Obama’s presidency.

Earlier this week, Facebook suspended the account of Jonathon Morgan, the head of New Knowledge. Morgan previously acknowledged that he set up a misleading Facebook page to test his ability to engage with conservative voters and bought less than $10 worth of Twitter retweets for the same goal. Morgan characterized this undertaking as “small-scale” and told The Washington Post that these efforts were made only in “his own capacity as a researcher seeking to understand the mechanics of disinformation tactics, not as New Knowledge’s leader.”

Last week, Doug Jones articulated his support for a federal probe into the role the disinformation tactics could have played in his successful Senate bid. Hoffman also expressed his support for a federal investigation.

“We cannot permit dishonest campaign tactics to go unchecked in our democracy — no matter which side they purportedly help,” Hoffman said.

Source: TechCrunch

TrueFacet, which sells pre-owned, authenticated watches and jewelry, is raising a $10 million round of funding

The secondary luxury goods market has been growing wildly in recent years, with more shoppers opting to both sell their lightly used luxury goods like clothing and jewelry for cold, hard cash, as well as buying the pre-owned, authenticated luxury goods of others.

One of the biggest beneficiaries of the trend is The RealReal, a nearly eight-year-old shopping destination for the growing population of people who might not be willing or able to purchase a new Hermes Birkin bag but are willing to buy one in like-new condition for considerably less. The idea — which seems to be working — is to create a virtuous cycle, wherein the bag’s original purchaser receives the bulk of that re-sale price, then uses the money to buy another new handbag (or a used one) that can be resold at a later point in time.

Another beneficiary of the trend: TrueFacet, a five-year-old, New York-based marketplace that claims to have more than 40,000 watches and 55,000 pieces of pre-owned authenticated watches and jewelry for sale at its site, and that has more recently begun offering pre-owned timepieces directly through brands like Fendi Timepieces, Raymond Weil and Roberto Coin that now partner with TrueFacet to carry their pre-owned timepieces with a manufacture warranty.

Apparently, shoppers are buying what they’re collectively selling. The company, which had previously raised $14.7 million in funding from investors, looks to be closing in on another $10 million round, judging by freshly filed SEC paperwork that shows it has so far raised $7 million in funding and is targeting $9.8 million altogether.

TrueFacet’s backers include Founders Co-op,  Freestyle Capital and Maveron, led by partner Jason Stoffer, who also happens to sit on the board of Dolls Kill, an edgy clothing marketplace that we wrote about on Monday.

TrueFacet has some tough competition in the space, including Crown & Caliber, a six-year-old, Atlanta, Ga.-based company that has never announced outside funding, and 15-year-old, Germany-based Chrono24, which has raised €21 million over the years. Both sell timepieces alone, however.

It also competes directly with The RealReal, which has raised nearly $300 million from investors and sells clothing and high-end home decor, as well as jewelry and watches. (The company doesn’t break out publicly which of these categories outpace the others in terms of sales.)

Interestingly, like The RealReal, which now operates permanent offline stores in both New York and L.A., TrueFacet is also crossing the chasm into the offline world, though it’s taking baby steps toward that end.

Specifically, earlier this month, it announced a partnership with Stephen Silver Fine Jewelry, which sells timepieces to many monied Bay Area VCs and other Silicon Valley bigs at stores in Redwood City and Menlo Park, Calif. For the time being at least, the jeweler will also sell pieces from TrueFacet’s collection.

Source: TechCrunch

Elon Musk argues comments on Twitter are protected speech in request to dismiss ‘pedo guy’ lawsuit

Elon Musk has filed a motion to dismiss a defamation lawsuit filed against him by the British cave rescuer who sued the billionaire entrepreneur for calling him a pedophile.

Musk’s motion presents numerous reasons to dismiss the defamation lawsuit, all of which come back to a two main points: Twitter is “infamous for invective and hyperbole,” and therefore should not be considered fact and these “imaginative attacks,” even if offensive, “are by their nature opinion and protected by the First Amendment.” 

Musk’s lawyers ask a single question in the request: “Accepting Unsworth’s well-pleaded allegations as true, would a reasonable reader believe that Musk’s statements were supported by objective facts or were instead “nonactionable opinion?”

The list of arguments laid out in the motion to dismiss are:

  1. Unsworth must prove that the reasonable reader would believe Musk possessed private facts implicating Unsworth as a pedophile.
  2. In context, Musk’s statements cannot reasonably be read as asserting underlying knowledge that Unsworth was a pedophile
  3. Statements on unmoderated Internet forums are presumptively opinion.
  4. Musk’s underlying argument is that “his over-the-top insults are not statements of fact.”
  5. Musk disclosed the basis for his personal opinion: Thailand’s documented problems with sex tourism
  6. Musk’s over-the-top insults are not statements of fact
  7. Musk’s colloquial statements are not reasonably interpreted as statements of facts
  8. Musk’s expressions of uncertainty show that his statements did not have a concrete factual foundation and were therefore opinion
  9. Readers did not interpret Musk’s statements as factual assertions

Whether these arguments will be enough to convince a judge to dismiss the lawsuit is unclear. However, it raises a different question. If the argument is to be believed, it would suggest that other claims and promises Musk puts on Twitter shouldn’t be trusted as fact either.

The whole “pedo guy” episode began over the summer after Musk and employees at his companies, SpaceX, Tesla, and The Boring Company, became involved in an effort to extract 12 boys and their soccer coach from the Tham Luang Nang Non cave system located in Northern Thailand after flooding trapped the group for weeks. Musk’s team developed and then sent  mini submarine built out of rocket parts that he thought could help.

The team of divers who eventually rescued every person trapped in the cave didn’t use the mini-submarine, dubbed by Musk’s people as “Wild Boar.”

Unsworth, a British ex-pat who lives in Thailand, helped plan the rescue operation and recruited other cave diving experts. The fight began after Unsworth gave an interview on CNN International, in which he called the mini submarine a “PR stunt,” that it “had absolutely no chance of working” and that Musk could “stick his submarine where it hurts.”

Musk subsequently lashed out on Twitter and insinuated that Unsworth was a pedophile. He later deleted the offending tweet and tried to backpedal — even offering an apology of sorts on Twitter. And it could have all ended there. But then Musk dug it all up again during a debate with ex-TechCrunch journalist Drew Olanoff — once again on Twitter. Olanoff had brought up the “pedo guy” attack as an example of Musk telling untruths.

Unsworth filed a lawsuit September in the U.S. District Court for the Central District of California against Musk for defamation. The lawsuit alleges that between July 15 and August 30, Musk periodically used Twitter and emails to the media to publish false and defamatory accusations against Unsworth, including accusations of pedophilia and child rape.

Read the entire motion here.

Source: TechCrunch

Get an Echo Dot for $15, a Fire TV Stick 4K for $30 or a Propel Star Wars drone for $40 – CNET

Didn’t get the gift you wanted? Treat yourself to one of these sweet deals.
Source: CNET

Rotating Detonation Engines Could Propel Hypersonic Flight

It runs on an endless shockwave, but, sadly, it’s still in the prototype stage.
Source: Wired

Fortnite reportedly will pull in an epic $3 billion profit this year – CNET

The free-to-play last-man-standing battle royale game is already a hit. Now it’s making a bunch of money too.
Source: CNET

Trump may use executive order to ban Huawei, ZTE purchases – CNET

The order could be signed as early as January, according to Reuters.
Source: CNET