When you live in Silicon Valley, it feels like nearly everyone works in tech and that entry into the industry is wide open. Of course, the reality is very different. Even as software eats the world, not everyone has the training or connections to land a high-paying job in either the traditional tech industry or with a company that’s actively embracing its digital future.
In fact, it would be challenging to interest an executive recruiter in someone who doesn’t have a tech background and didn’t go to college, yet a company called SV Academy is doing just that. According to cofounder and CEO Rahim Fazal, the nearly two-and-a-half-year-old, Bay Area company is currently helping 100 people every 30 days — or 1,200 per year — land jobs at companies like SurveyMonkey, Palo Alto Networks, and PayPal.
Very notably, it costs these job candidates nothing. Employers pay SV Academy between $12,000 to $15,00 per hire; all the prospects really need to do is convince SV Academy that they have the drive required to take a 12-week, training program that teaches the skills necessary for tech-based sales roles, plus a year of ongoing training and mentorship for a year after they graduate.
It sounds like a great deal, and it is, which is why SV Academy says it has more interest than it can handle. Fazal tells us that the company, which received 1,000Â applications over eight months in its first year of operations, is now receiving 1,000 applications a week from people who’ve largely heard of the company through word of mouth.
Because it’s focused on grooming candidates who are serious about developing new careers (and will stay in their jobs), SV Academy is loath to scale up to accommodate that kind of demand. Still, a new round of funding should help widen the funnel a bit. Until recently, the company was backed by $2 million that it raised a couple of years ago from Bloomberg Beta, Rethink Education, Precursor Ventures, Uprising Ventures, 500 Startups and WTI.
The money was enough for SV Academy to achieve profitability and get to the point of placing employers on a waiting list. But with demand beginning to more seriously outpace its supply of candidates, SV Academy recently hit the market again, sharing exclusively that it has just closed on $9.5 million in Series A funding led by Owl Ventures with participation from Kapor Capital, Strada Education Network, and several earlier backer participating, namely Bloomberg, Rethink, and Uprising.
It isn’t the first time that Fazal has started a company that has taken off. He cofounded a company a decade ago that sold to Oracle, where he spent the next two and a half years. But SV Academy is even closer to his heart, given that he is exactly the kind of person the SV Academy wants to lift up — someone smart but lacking resources. Fazal himself grew up in government housing. He didn’t go to college. He knows firsthand that with determination and right amount of guidance and support, apparent obstacles like a lack of financial stability or a fancy degree can fall away.
Fazal also recognizes the importance of having the right cofounder, which he seems to have landed on with Joel Scott, who is also the company’s COO. A Stanford-trained lawyer, Scott was previously VP of operations at Hewlett Packard, and according to Fazal has trained upwards of 500 SaaS salespeople since college.
Indeed, Scott played a major role in creating SV Academy’s curriculum, which is very focused on training people for SaaS jobs (for now) and that is entirely virtual, from the 12-week-training period, to the coaching that comes afterward. The reason: it enables it to reach students in the U.S. wherever they may be, and whatever their experience might be.
Though some of the applicants who it accepts are college graduates, many are also “working full-time jobs, or they’re caretakers, and it’s impossible for them to drive into the city several times a week for classes,” Fazal explains.
Whatever the case, it seems to be working. Fazal says that 100% of the individuals who complete the program are not only receiving median job offers of $79,000 plus benefits and, in many cases, equity, but 70% of them are also receiving promotions within their first year. Yes, the law of small numbers is a factor, but it’s also easy to understand investors’ enthusiasm for what they are seeing — including the cautious approach SV Academy is taking to expanding.
“Real transformation is difficult,” says Fazal. “You can’t create outcomes like this by throwing software at the problem.”
Above, left to right: Joel Scott and Rahim Fazal of SV Academy
Source: TechCrunch
There’s seemingly no end in sight for DoorDash’s compensation model where it subsidizes driver wages with customer tips. The mildly bright side, however, is that DoorDash is now providing more transparency after each completed delivery, DoorDash CEO Tony Xu wrote in a blog post today.
“With our current pay model, Dashers see a guaranteed minimum — including tips — prior to accepting a delivery,” Xu wrote. “The guaranteed minimum is based on the estimated time and effort required to complete the delivery. Providing this guarantee upfront means that Dashers are more likely to accept all kinds of deliveries because they know what their earnings will be even if the customer provides little or no tip.”
That means DoorDash’s base pay is sometimes just $1.
“Talking about transparency is good,” labor rights group Working Washington said in a statement to TechCrunch. “And admitting you pay $1/job is better than denying it. But $1 is still $1.”
In light of pay controversies at Instacart, DoorDash and Postmates, Working Washington formed the Pay Up Campaign, which unites thousands of workers across all those gig economy platforms.
“They continue to subtract tips from worker pay,” the organization said in its statement. “And they continue to mislead customers about where their tips are going. When a customer tips more, DoorDash pays less — in other words, the customer is tipping the company.”
Despite what DoorDash said in its blog post about what workers want, the Pay Up campaign says it wants a minimum pay floor of $15 per hour plus expenses for time with an active job, tips, and a detailed breakdown of pay.
Source: TechCrunch
Slack’s recent direct listing marks a momentous 15-month stretch for freemium SaaS businesses. With Slack joining the public company ranks, six companies will have tapped the public markets since Dropbox’s IPO last March. This group of companies now has a collective market value of more than $50 billion.
When Zoom filed its public S-1, the tech industry fawned over the company’s financial profile. Here was a company growing revenue over 100% that had somehow managed to be cash flow positive. Conventional wisdom among many Silicon Valley investors has recently been that profits and rapid growth are mutually exclusive.
Uber and other high-growth tech companies aspire to be the next Amazon, foregoing profits into the foreseeable future to establish a dominant market position. This land grab mentality has held sway with most of the SaaS businesses that go to market with a traditional enterprise sales force. In contrast, the recent crop of public freemium businesses show they can actually make money while sustaining attractive growth rates.
How can this flavor of enterprise software business run so much more efficiently than their traditional enterprise brethren? The answer heavily lies in their approach to sales and marketing. Despite similar growth rates, traditional enterprise SaaS businesses spend an average of 10% more of their revenue on sales and marketing than their freemium comparables.
A common criticism of freemium businesses is that their retention rates dramatically lag those of traditional enterprise software businesses. Customer relationships for freemium businesses usually begin online. An individual employee wants to use a product for her/his own productivity and simply charges a credit card to pay for a subscription. In contrast to larger-ticket enterprise relationships with multiple stakeholders that tend to renew at 90%+ annually, the retention profile of these individual users often resembles consumer subscription businesses — usually in the 60-80% range. When it comes time to renew the subscription a year later, the person may have changed jobs, changed credit cards or only used the product episodically.
It’s less well understood that many of these business models are evolving in real time as they leverage widespread individual adoption to establish broader enterprise customer relationships. When sales reps for freemium products call on enterprise buyers, they usually have hundreds, or even thousands, of their employees already using the product individually or in small teams.
Their products and brands are already widely known and loved, with power-users clamoring for broader internal support and acting as advocates in the sales process. This internal validation makes it much easier to convince an enterprise buyer that the product will deliver compelling value to end users. While some hands-on sales support is usually required to land a contract over $5,000, this job can be done by less-experienced and lower-cost sales reps. If you visit the offices of freemium businesses and ask to walk their sales floor, you’ll see a sea of millennials closing sizeable contracts over the phone.
Legacy enterprise players have historically successfully fended off competition from freemium businesses by accusing them of not being “enterprise-grade� technology. It can take years to build out robust security infrastructure, deep integration into other systems and administration and reporting capabilities, all of which are needed in the enterprise procurement process. This was a muscle that freemium businesses, whose product orientation was around end-user design rather than back-end infrastructure capabilities, needed to build. They also had to build sales motions to navigate the longer, complex sales cycles that come with six and seven-figure annual recurring revenue (ARR) deals.
However, the financial results of these public freemium companies show just how well this is now working, and there are many more private companies following their lead.
Most public companies don’t report granular renewal rates for their larger enterprise relationships, but the unit economics of these businesses are incredibly compelling.
Lucid Software now has more than 3,000 enterprise customers, which generates more than 60% of the company’s revenue, up from just 350 and 15% when we invested in the company three years ago. The logo renewal rate for their 3,000+ enterprise customers is more than 95% and net revenue retention is more than 130% annually, because end user seat growth more than outstrips any customer losses.
At Spectrum Equity, we’re watching with interest as these early freemium leaders emerge as successful public companies and the broader industry better understands how these business models work. Since leading SurveyMonkey’s first financing more than 10 years ago, Spectrum has invested in Lucid Software, Bitly, Litmus and Prezi, which are all charting a similar course from freemium online through to the enterprise. A number of Spectrum’s content businesses, such as Lynda.com, Teachers Pay Teachers, Headspace, DataCamp, Offensive Security and Digital Marketing Institute, have also successfully built hybrid individual and enterprise distribution strategies.
We believe companies that create the most compelling end-user experiences will win over the long term, and this trend of the consumerization of enterprise technology has only just begun.
(Note from Spectrum Equity: The specific companies identified above may not represent all of Spectrum’s investments, and no assumptions should be made that any investments identified were or will be profitable. View the complete list of our portfolio companies.)
Source: TechCrunch
Today’s major Apple news may be the departure of its design guru Jony Ive, but the even as the company stomachs the executive loss, their software plows ahead. Today, in an interview with French news site Numerama, Apple honcho Eddy Cue revealed that the number of Apple Music subscribers has now climbed to 60 million.
The company seems to give updates every time it surpasses another additional 10 million subscribers, we last heard that they had crossed the 50 million mark back in April.
Now, the company’s music service is well past the halfway market in its mission to surpass Spotify which currently has 100 million subscribers.
Source: TechCrunch
The celebrated tech designer, who worked with co-founder Steve Jobs on the iMac, iPod and iPhone, is starting his own firm. Apple will be a primary client.
Source: CNET
Spoiler alert: The social network has a lot of details to work out.
Source: CNET
Hans Zimmer, the film score composer behind dozens of Hollywood movies including The Lion King and Inception, is shaping what the next generation of BMW electric vehicles sound like.
Zimmer and Renzo Vitale, an acoustic engineer and sound designer at the BMW Group, recently composed the sound for the BMW Vision M NEXT, the concept that had its world debut June 25.
BMW’s project with Zimmer ties into its new “BMW IconicSounds Electric” sound brand.
“We want to get BMW IconicSounds Electric in position for customers who value emotional sound. With BMW IconicSounds Electric they will be able to experience the joy of driving with all their senses”, Jens Thiemer, senior vice president of the BMW brand, said in a statement.
The pair composed the drive sounds and sound signs for the BMW Vision M NEXT together in Zimmer’s studios in London and Los Angeles. Watch the video below and listen for the wooshing sound that is produced as the vehicle accelerates. Sadly, it’s not the soundtrack of Inception playing on repeat.
The M NEXT will not be in your local BMW dealership any time soon. It’s a concept that should show where the automaker is headed in terms of tech and design.
But customers can expect the next generation of electric vehicles to come with special acoustics meant to mimic the feeling a driver might get when they’re behind an M5 or other BMW with an internal combustion engine.
The idea isn’t to make an electric car sound like an ICE vehicle. Instead, the sound is meant to match the power and speed of the electric vehicle.
It turns out that BMW has been working on artificially generated sound since at least 2009. Engineers wanted to increase awareness of the traditional quiet electric vehicles, which at the time include the MINI E test fleet.
Since the launch of the BMW i3, customers have been able to choose acoustic pedestrian protection as optional equipment. Legislation has required automakers to adopt acoustic pedestrian protection, a feature being rolled out as standard in all plug-in hybrids and all-electric vehicles from BMW. The aim in the development was to fulfill the warning function without disturbing pedestrians.
Source: TechCrunch
Spotify has 100 million.
Source: CNET
One contractor was fired after including music from blue-collar rocker Bruce Springsteen in his profile, The Washington Post reports.
Source: CNET
PepsiCo is planning to replace its plastic bottles of Aquafina with aluminum cans at locations around the U.S.
The move is part of a broader initiative from the company to reduce its plastic use as a consumer backlash against plastic use grows across the country. Microplastics, found in both air and water, block up the guts of animals and insects and can potentially have incredibly harmful consequences on ocean ecosystems.
The move could be calamitous for startups like Liquid Death, the direct to consumer retail startup pitching canned “tallboys” of water with a metal message and a veneer of environmental responsibility.
Aluminum is nearly 100% recyclable and has a better overall environmental footprint as a packaging material than plastic, according to some advocates.
For now, Pepsi’s canned water will only be available at food vendors who stock its products, but the company is considering a broader transition to aluminum cans across its supply chain.
The company also announced that its LIFEWTR brand would only be sold in 100% recycled polyethylene terephthalate and its bubly product will no longer be packaged in plastic.
The changes, which the company said will go into effect next year, will eliminate 8,000 metric tons of virgin plastic and roughly 11,000 metric tons of greenhouse gas emissions.
Pepsi has set a goal of using nothing but recyclable, compostable or biodegradable packaging by 2025, the company said.
“As one of the world’s leading food and beverage companies, we recognize the significant role PepsiCo can play in helping to change the way society makes, uses, and disposes of plastics,” said PepsiCo Chairman and CEO Ramon Laguarta, in a statement. “We are doing our part to address the issue head on by reducing, recycling and reinventing our packaging to make it more sustainable, and we won’t stop until we live in a world where plastics are renewed and reused.”
Source: TechCrunch