The deplatforming of a president

After years of placid admonishments, the tech world came out in force against President Trump this past week following the violent assault of the U.S. Capitol building in Washington D.C. on Wednesday. From Twitter to PayPal, more than a dozen companies have placed unprecedented restrictions or outright banned the current occupant of the White House from using their services, and in some cases, some of his associates and supporters as well.

The news was voluminous and continuous for the past few days, so here’s a recap of who took action when, and what might happen next.

Twitter: a permanent ban and a real-time attempt to shut down all possible account alternatives

Twitter has played a paramount role over the debate about how to moderate President Trump’s communications, given the president’s penchant for the platform and the nearly 90 million followers on his @realDonaldTrump account. In the past, Twitter has repeatedly warned the president, added labels related to electron integrity and misinformation, and outright blocked the occasional tweet.

This week, however, Twitter’s patience seemed to have been exhausted. Shortly after the riots at the Capitol on Wednesday, Twitter put in place a large banner warning its users about the president’s related tweet on the matter, blocking retweets of that specific message. A few hours later, the company instituted a 12-hour ban on the president’s personal account.

At first, it looked like the situation would return to normal, with Twitter offering Thursday morning that it would reinstate the president’s account after he removed tweets the company considered against its policies around inciting violence. The president posted a tweet later on Thursday with a video attachment that seemed to be relatively calmer than his recent fiery rhetoric, a video in which he also accepted the country’s election results for the first time.

Enormous pressure externally on its own platform as well as internal demands from employees kept the policy rapidly changing though. Late Friday night, the company announced that it decided to permanently ban the president from its platform, shutting down @realDonaldTrump. The company then played a game of whack-a-mole as it blocked the president’s access to affiliated Twitter handles like @TeamTrump (his official campaign account) as well as the official presidential account @POTUS and deleted individual tweets from the president. The company’s policies state that a blocked user may not attempt to use a different account to evade its ban.

Twitter has also taken other actions against some of the president’s affiliates and broader audience, blocking Michael Flynn, a bunch of other Trump supporters, and a variety of QAnon figures.

With a new president on the horizon, the official @POTUS account will be handed to the new Biden administration, although Twitter has reportedly been intending to reset the account’s followers to zero, unlike its transition of the account in 2016 from Obama to Trump.

As for Trump himself, a permanent ban from his most prominent platform begs the question: where will he take his braggadocio and invective next? So far, we haven’t seen the president move his activities to any social network alternatives, but after the past few years (and on Twitter, the last decade), it seems hard to believe the president will merely return to his golf course and quietly ride out to the horizon.

Snap: a quick lock after dampening the president’s audience for months

Snap locked the president’s account late Wednesday following the events on Capitol Hill, and seemed to be one of the most poised tech companies to rapidly react to the events taking place in DC. Snap’s lock prevents the president from posting new snaps to his followers on the platform, which currently number approximately two million. As far as TechCrunch knows, that lock remains in place, although the president’s official profile is still available to users.

Following the death of George Floyd in Minneapolis and the concomitant Black Lives Matter protests, the company had announced back in June that it would remove the president’s account from its curated “Discover” tab, limiting its distribution and discoverability.

The president has never really effectively used the Snap platform, and with an indefinite ban in place, it looks unlikely he will find a home there in the future.

Facebook / Instagram: A short-to-medium ban with open questions on how long “indefinite” means

Facebook, like Twitter, is one of the president’s most popular destinations for his supporters, and the platform is also a locus for many of the political right’s most popular personalities. It’s moderation actions have been heavily scrutinized by the press over the past few years, but the company has mostly avoided taking direct action against the president — until this week.

On Wednesday as rioters walked out of the halls of Congress, Facebook pulled down a video from President Trump that it considered was promoting violence. Later Wednesday evening, that policy eventually extended into a 24-hour ban of the president’s account, which currently has 33 million likes, or followers. The company argued that the president had violated its policies multiple times, automatically triggering the one-day suspension. At the same time, Facebook (and Instagram) took action to block a popular trending hashtag related to the Capitol riots.

On Thursday morning, Mark Zuckerberg, in a personal post on his own platform, announced an “indefinite” suspension for the president, with a minimum duration of two weeks. That timing would neatly extend the suspension through the inauguration of president-elect Biden, who is to assume the presidency at noon on January 20th.

What will happen after the inauguration? Right now, we don’t know. The president’s account is suspended but not deactivated, which means that the president cannot post new material to his page, but that the page remains visible to Facebook users. The company could remove the suspension once the transition of power is complete, or it may continue the ban longer-term. Given the president’s prominence on the platform and the heavy popularity of the social network among his supporters, Facebook is in a much more intense bind between banning content it deems offensive, and retaining users important to its bottom line.

Shopify / PayPal: Ecommerce platforms won’t sell Trump official merchandise for the time being

It’s not just social networks that are blocking the president’s audience — ecommerce giants are also getting into moderating their platforms against the president. On Thursday, Shopify announced that it was removing the storefronts for both the Trump campaign and Trump’s personal brand.

That’s an evolution on policy for the company, which years ago said that it would not moderate its platform, but in recent years has removed some controversial stores, such as some right-wing shops in 2018.

PayPal meanwhile has been deactivating the accounts of some groups of Trump supporters this week, who were using the money-transfer fintech to coordinate payments to underwrite the rioters’ actions on Capitol Hill. PayPal has been increasingly banning some political accounts, banning a far-right activist in 2019 and also banning a spate of far-right organizations in the wake of violent protests in Charlottesville in 2017. These bans have so far not extended directly to the president himself from what TechCrunch can glean.

Given the president’s well-known personal brand and penchant for product tie-ins before becoming president, it’s a major open question about how these two platforms and others in ecommerce will respond to Trump once he leaves office in two weeks. Will the president go back to shilling steaks, water and cologne? And will he need an ecommerce venue to sell his wares online? Much will depend on Trump’s next goals and whether he stays focused on politics, or heads back to his more commercial pursuits.

Google removes Parler from the Google Play Store, while Apple mulls a removal as well

For supporters of Trump and others concerned about the moderation actions of Facebook and other platforms, Parler has taken the lead as an alternative social network for this audience. Right now, the app is number one in the App Store in the United States, ahead of encrypted and secure messaging app Signal, which is at number four and got a massive endorsement from Elon Musk this week.

Parler’s opportunism for growth around the riots on Capitol Hill though has run into a very real barrier: the two tech companies which run the two stores for mobile applications in the United States.

Google announced Friday evening that it would be removing the Parler app from its store, citing the social network’s lack of moderation and content filtering capabilities. The app’s page remains down as this article was going to press. That ban means that new users won’t be able to install the app from the Play Store, however, existing users who already have Parler installed will be able to continue using it.

Meanwhile, Buzzfeed reports that Apple has reportedly sent a 24-hour takedown notice to Parler’s developers, saying that it would mirror Google’s actions if the app didn’t immediately filter content that endangers safety. As of now, Parler remains available in the App Store, but if the timing is to be believed, the app could be taken down later this Saturday.

Given the complexities of content moderation, including the need to hire content moderators en masse, it seems highly unlikely that Parler could respond to these requests in any short period of time. What happens to the app and the president’s supporters long-term next is, right now, anyone’s guess.

Discord / Twitch / YouTube / Reddit / TikTok: All the socials don’t want to be social anymore with President Trump

Finally, let’s head over to the rest of the social networking world, where Trump is just as unpopular as he is at Facebook and Twitter HQ these days. Companies widely blocked the president from accessing their sites, and they also took action against affiliated groups.

Google-owned YouTube announced Thursday that it would start handing out “strikes” against channels — including President Trump’s — that post election misinformation. In the past, videos with election misinformation would have a warning label attached, but the channel itself didn’t face any consequences. In December, the company changed that policy to include the outright removal of videos purveying election misinformation.

This week’s latest policy change is an escalation from the company’s previous approach, and would result in lengthier and lengthier temporary suspensions for each additional strike that a channel receives. Those strikes could eventual result in a permanent ban for a YouTube channel if they happen within a set period of time. That’s precisely what happened with Steve Bannon’s channel, which was permanently banned Friday late afternoon for repeated violations of YouTube’s policies. Meanwhile, President Trump’s official channel has less than 3 million followers, and is currently still available for viewing on the platform.

Outside YouTube, Twitch followed a similar policy to Facebook, announcing Thursday morning that it would ban the president “indefinitely” and at least through the inauguration on January 20th. The president has a limited audience of just about 151,000 followers on the popular streaming platform, making it among the least important of the president’s social media accounts.

In terms of the president’s supporters, their groups are also being removed from popular tech platforms. On Friday, Reddit announced that it would ban the subreddit r/DonaldTrump, which had become one of a number of unofficial communities on the platform where the president’s most ardent supporters hung out. The social network had previously removed the controversial subreddit r/The_Donald back in June. Discord on Friday shut down a server related to that banned subreddit, citing the server’s “overt connection to an online forum used to incite violence.”

Lastly, TikTok announced on Thursday that it was limiting the spread of some information related to the Capitol riots, including redirecting hashtags and removing violent content as well as the president’s own video message to supporters. The president does not have a TikTok account, and therefore, most of the company’s actions are focused on his supporters and broader content surrounding the situation on Capitol Hill this week.

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Why Twitter banned President Trump

Twitter permanently banned the U.S. president Friday, taking a dramatic step to limit Trump’s ability to communicate with his followers. That decision, made in light of his encouragement for Wednesday’s violent invasion of the U.S. Capitol, might seem sudden for anyone not particularly familiar with his Twitter presence.

In reality, Twitter gave Trump many, many second chances over his four years as president, keeping him on the platform due to the company’s belief that speech by world leaders is in the public interest, even if it breaks the rules.

Twitter permanently bans President Trump

Now that Trump’s gone for good, we have a pretty interesting glimpse into the policy decision making that led Twitter to bring the hammer down on Friday. The company first announced Trump’s ban in a series of tweets from its @TwitterSafety account but also linked to a blog post detailing its thinking.

In that deep dive, the company explains that it gave Trump one last chance after suspending and then reinstating his account for violations made on Wednesday. But the following day, a pair of tweets the president made pushed him over the line. Twitter said those tweets, pictured below, were not examined on a standalone basis, but rather in the context of his recent behavior and this week’s events.

“… We have determined that these Tweets are in violation of the Glorification of Violence Policy and the user @realDonaldTrump should be immediately permanently suspended from the service,” Twitter wrote.

Screenshot via Twitter

This is how the company explained its reasoning, point by point:

• “President Trump’s statement that he will not be attending the Inauguration is being received by a number of his supporters as further confirmation that the election was not legitimate and is seen as him disavowing his previous claim made via two Tweets (1, 2) by his Deputy Chief of Staff, Dan Scavino, that there would be an ‘orderly transition’ on January 20th.
• “The second Tweet may also serve as encouragement to those potentially considering violent acts that the Inauguration would be a ‘safe’ target, as he will not be attending.
• “The use of the words ‘American Patriots’ to describe some of his supporters is also being interpreted as support for those committing violent acts at the US Capitol.
• “The mention of his supporters having a ‘GIANT VOICE long into the future’ and that ‘They will not be disrespected or treated unfairly in any way, shape or form!!!’ is being interpreted as further indication that President Trump does not plan to facilitate an ‘orderly transition’ and instead that he plans to continue to support, empower, and shield those who believe he won the election.
• “Plans for future armed protests have already begun proliferating on and off-Twitter, including a proposed secondary attack on the US Capitol and state capitol buildings on January 17, 2021.”

All of that is pretty intuitive, though his most fervent supporters aren’t likely to agree. Ultimately these decisions, as much as they do come down to stated policies, involve a lot of subjective analysis and interpretation. Try as social media companies might to let algorithms make the hard calls for them, the buck stops with a group of humans trying to figure out the best course of action.

Twitter’s explanation here offers a a rare totally transparent glimpse into how social networks decide what stays and what goes. It’s a big move for Twitter — one that many people reasonably believe should have been made months if not years ago — and it’s useful to have what is so often an inscrutable high-level decision making process laid out plainly and publicly for all to see.

President Trump responds to Twitter account ban in tweet storm from @POTUS account

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Twitter permanently bans President Trump

President Trump was permanently suspended from Twitter Friday. In the announcement, the company cited “the risk of further incitement of violence” and the president’s past transgressions on the platform.

“In the context of horrific events this week, we made it clear on Wednesday that additional violations of the Twitter Rules would potentially result in this very course of action,” Twitter wrote. “… We made it clear going back years that these accounts are not above our rules and cannot use Twitter to incite violence.”

After close review of recent Tweets from the @realDonaldTrump account and the context around them we have permanently suspended the account due to the risk of further incitement of violence.https://t.co/CBpE1I6j8Y

— Twitter Safety (@TwitterSafety) January 8, 2021

On Wednesday, Twitter suspended President Trump’s account until he deleted three tweets that the company flagged as violating its rules. Trump’s account was set to reactivate 12 hours after those deletions, and he returned to the platform on Thursday night with a video in which he appeared to concede his election loss for the first time.

Trump crossed a line with Twitter when he failed to condemn a group of his supporters who staged a violent riot at the Capitol building while Congress met to certify the election results. In one tweet, Trump shared a video in which he gently encouraged the group to return home, while reassuring his agitated followers that he loved them and that they were “special.”

At that time, Twitter said that Trump’s tweets contained “repeated and severe violations” of its policy on civic integrity and threatened that any future violations would result in “permanent suspension” of the president’s account.

Wednesday, January 6:

• 1 PM ET: Trump wraps up a rally near the White House protesting the legitimate election results. During the event he urges attendees to march toward Congress.
• 2:15 PM: Trump supporters breach the interior of the Capitol building.
• 4:15 PM: Trump tweets a video gently telling rioters that they need to go home and “we love you.”
• 5 PM: Twitter places a large warning label on the video.
• 6 PM: Trump tweets again, failing to denounce the violence and urging his supporters to “Remember this day forever!”
• 7 PM: Twitter locks Trump out his account until he deletes three tweets and waits for a 12-hour period.

As a result of the unprecedented and ongoing violent situation in Washington, D.C., we have required the removal of three @realDonaldTrump Tweets that were posted earlier today for repeated and severe violations of our Civic Integrity policy. https://t.co/k6OkjNG3bM

— Twitter Safety (@TwitterSafety) January 7, 2021

Thursday, January 7:

• Trump’s account reinstated. In a video shared to Twitter, the president for the first time personally denounces the “heinous attack” and makes what sounds like a concession speech.

Friday, January 8:

• 9:45 AM: Trump tweets again with a less conciliatory tone, declaring that anyone who voted for him will “not be treated unfairly in any way, shape or form!!!”
• 10:45 AM: Trump tweets that he will not attend President-elect Joe Biden’s inauguration.
• 6:20 PM: Twitter announces that @realDonaldTrump is suspended permanently.

While Facebook initially took more drastic action against Trump’s account in the aftermath of Wednesday’s chaotic siege on Capitol Hill, Twitter has a longer history of friction with the outgoing president. In early 2020, Twitter’s decision to add a contextual label to a Trump tweet calling mail-in voting “fraudulent” prompted the president to craft a retaliatory though largely toothless executive order targeting social media companies.

Trump held the same grudge through the end of the year, trying to push a doomed repeal of Section 230 of the Communications Decency Act — the law that protects online companies from liability for user-generated content — through Congress in increasingly unusual ways.

Twitter’s move Friday to suspend the sitting U.S. president from its platform is a historic decision — and one the company avoided making for the last four years. In the wake of Wednesday’s insurrectionist violence, and Trump’s role in inciting it, tech’s biggest social networks appear to have at last had enough.

But as with election conspiracies, dangerous COVID-19 misinformation and the camo-clad extremists who attacked the Capitol this week, it’s too late to undo the chaos that real-time Trump unleashed over the last four years, 280 characters at a time.

Mark Zuckerberg announces Trump banned from Facebook and Instagram for ‘at least the next two weeks’

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Daily Crunch: Roku buys Quibi’s content library

{rss:content:encoded} Daily Crunch: Roku buys Quibi’s content library https://ift.tt/35p8I3j https://ift.tt/2CoAoqu January 09, 2021 at 12:14AM

Quibi’s content will live on, Hyundai may partner with Apple and Donald Trump returns to Twitter. This is your Daily Crunch for January 8, 2021.

The big story: Roku buys Quibi’s content library

If you’re wondering what will happen to Quibi shows like “Most Dangerous Game” and “Chrissy Court,” wonder no longer: They’re going to Roku.

The streaming TV platform announced today that it has acquired the global rights to Quibi’s content library, which it plans to bring to The Roku Channel, free and ad-supported, some this year. This includes “more than a dozen” shows that never got a chance to stream on Quibi before the app shut down.

“The most creative and imaginative minds in Hollywood created groundbreaking content for Quibi that exceeded our expectations,” said Quibi founder Jeffrey Katzenberg in a statement. “We are thrilled that these stories, from the surreal to the sublime, have found a new home on The Roku Channel.”

The tech giants

Shares of Hyundai Motor Co. climb more than 20% on potential EV deal with Apple — Hyundai said discussions are still in the “early stage.”

Google’s plan to replace tracking cookies goes under UK antitrust probe — U.K.’s Competition and Markets Authority said it’s investigating “suspected breaches of competition law by Google.”

Trump returns to Twitter with what sounds like a concession speech — President Trump only had to wait 12 hours before returning to his social network of choice.

Startups, funding and venture capital

Jobandtalent tops up with $108M for its ‘workforce as a service’ platform — The startup operates a dual-sided platform that connects temp workers with employers.

Detroit’s Ludlow Ventures goes for fund four — The Detroit-based seed-stage firm is in the process of closing its fourth fund of $65 million.

Jumbotail raises $14.2M for its wholesale marketplace in India — Jumbotail said it serves more than 30,000 neighborhood stores, popularly known in India as kiranas.

Advice and analysis from Extra Crunch

VCs discuss gaming’s biggest infrastructure investment opportunities in 2021 — Investors highlighted numerous areas for new opportunity, including specialized engines, next-gen content creation platforms and tools to port desktop experiences to mobile.

What is up with Tesla’s value? — And a bunch of other stocks, for that matter.

The Roblox Gambit — So it turns out that Roblox is worth $29.5 billion.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Stolen computers are the least of the government’s security worries — The SolarWinds breach is likely to be a bigger cybersecurity threat than any computers stolen during the pro-Trump riot on Wednesday.

Five reforms necessary to create a truly cashless society — Convenience shouldn’t come at the cost of other aspects of commerce.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Holographic startup Envisics partners with Panasonic to fast-track in-car AR tech

Envisics founder and CEO Dr. Jamieson Christmas launched the startup three years ago to “revolutionize” the in-car experience with its holographic technology. Now, it has a partner that could help it achieve that mission.

The U.K.-based holographic technology startup said Friday it reached an agreement with Panasonic Automotive Systems to jointly develop and commercialize a new generation of head-up displays for cars, trucks and SUVs. Panasonic Automotive Systems is a Tier 1 automotive supplier and a division of Panasonic Corporation of North America. The head-up displays are units integrated in the dash of a vehicle that project images onto the windshield to aid drivers with navigation and provide other alerts. The Panasonic HUDs, as they’re often called, will use Envisics holographic technology.

The deal, announced ahead of the virtual 2021 CES tech trade show, follows Envisics’ $50 million Series B funding round and news that its tech will be integrated in the upcoming Cadillac Lyriq electric vehicle. The funding round, which brought Envisics a valuation of more than $250 million, included investments from Hyundai Mobis, GM Ventures, SAIC Ventures and Van Tuyl Companies.

Envisics’ technology, the foundation of which came out of Christmas’ PhD studies at Cambridge University more than 15 years ago, electronically manipulates the speed of light. This process enables images to appear three-dimensional, Christmas explained in a recent interview. The company has secured more than 250 patents and has another 160 pending certification.

The company is solely focused upon the automotive application of holography, Christmas said, adding that its first generation is already integrated in more than 150,000 Jaguar Land Rover vehicles.

Christmas said this new agreement aims to combine Panasonic’s expertise in optical design and its global reach as a Tier 1 supplier with Envisics’ technology to bring holography into the mainstream. Mass production of vehicles using its technology is slated for 2023, according to the companies.

“This is very much about part of our business plan, you know the Series B funding round we undertook was about scaling the business and enabling us to move forward as we enter the market,” Christmas said. “Part of that was a commitment to engage in partnerships with Tier ones that we can then work with to deliver these products to market.

“This is the first of those agreements,” he added, suggesting that Envisics has a much larger aim.

What that means, Christmas said, will be head-up displays with high resolution, wide color gamut and large images that can be overlaid upon reality. The technology can also project information at multiple distances simultaneously.

“That really unlocks very interesting applications,” he said. “In the short term, it will be kind of relatively simple augmented reality applications like navigation, highlighting the lane you’re supposed to be in and some safety applications. But as you look forward into things like autonomous driving it unlocks a whole realm of other opportunities like entertainment and video conferencing.”

He added that it could even be used for night vision applications such as overlaying enhanced information upon a dark road to make it clear where the road is going and what obstacles might be out there.

Envisics nabs $50M for its in-car holographic display tech at a $250M+ valuation

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Extra Crunch roundup: 2 VC surveys, Tesla’s melt up, The Roblox Gambit, more

This has been quite a week.

Instead of walking backward through the last few days of chaos and uncertainty, here are three good things that happened:

• Google employee Sara Robinson combined her interest in machine learning and baking to create AI-generated hybrid treats.
• A breakthrough could make water desalination 30%-40% more effective.
• Bianca Smith will become the first Black woman to coach a professional baseball team.

Despite many distractions in our first full week of the new year, we published a full slate of stories exploring different aspects of entrepreneurship, fundraising and investing.

We’ve already gotten feedback on this overview of subscription pricing models, and a look back at 2020 funding rounds and exits among Israel’s security startups was aimed at our new members who live and work there, along with international investors who are seeking new opportunities.

Plus, don’t miss our first investor surveys of 2021: one by Lucas Matney on social gaming, and another by Mike Butcher that gathered responses from Portugal-based investors on a wide variety of topics.

Thanks very much for reading Extra Crunch this week. I hope we can all look forward to a nice, boring weekend with no breaking news alerts.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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The Roblox Gambit

Image Credits: Nigel Sussman (opens in a new window)

In February 2020, gaming platform Roblox was valued at $4 billion, but after announcing a $520 million Series H this week, it’s now worth $29.5 billion.

“Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19,” writes Alex Wilhelm this morning. “That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion.”

Alex suggests that Roblox’s decision to delay its IPO and raise an enormous Series H was a grandmaster move that could influence how other unicorns will take themselves to market. “A big thanks to the gaming company for running this experiment for us.”

I asked him what inspired the headline; like most good ideas, it came to him while he was trying to get to sleep.

“I think that I had “The Queen’s Gambit“ somewhere in my head, so that formed the root of a little joke with myself. Roblox is making a strategic wager on method of going public. So, ‘gambit’ seems to fit!”

The Roblox Gambit

8 investors discuss social gaming’s biggest opportunities

Image Credits: Erik Von Weber (opens in a new window) / Getty Images

For our first investor survey of the year, Lucas Matney interviewed eight VCs who invest in massively multiplayer online games to discuss 2021 trends and opportunities:

• Hope Cochran, Madrona Venture Group
• Daniel Li, Madrona Venture Group
• Niko Bonatsos, General Catalyst
• Ethan Kurzweil, Bessemer Venture Partners
• Sakib Dadi, Bessemer Venture Partners
• Jacob Mullins, Shasta Ventures
• Alice Lloyd George, Rogue
• Gigi Levy-Weiss, NFX

Having moved far beyond shooters and sims, platforms like Twitch, Discord and Fortnite are “where culture is created,” said Daniel Li of Madrona.

Rep. Alexandria Ocasio-Cortez uses Twitch to explain policy positions, major musicians regularly perform in-game concerts on Fortnite and in-game purchases generated tens of billions last year.

“Gaming is a unique combination of science and art, left and right brain,” said Gigi Levy-Weiss of NFX. “It’s never just science (i.e., software and data), which is why many investors find it hard.”

8 investors discuss social gaming’s biggest opportunities

How to convert customers with subscription pricing

Image Credits: C.J. Burton (opens in a new window) / Getty Images

Startups that lack insight into their sales funnel have high churn, low conversion rates and an inability to adapt or leverage changes in customer behavior.

If you’re hoping to convert and retain customers, “reinforcing your value proposition should play a big part in every level of your customer funnel,” says Joe Procopio, founder of Teaching Startup.

How to convert customers with subscription pricing

What is up with Tesla’s value?

Image Credits: Bloomberg (opens in a new window) / Getty Images

Alex Wilhelm followed up his regular Friday column with another story that tries to find a well-grounded rationale for Tesla’s sky-high valuation of approximately $822 billion.

Meanwhile, GM just unveiled a new logo and tagline.

As ever, I learned something new while editing: A “melt up” occurs when investors start clamoring for a particular company because of acute FOMO (the fear of missing out).

Delivering 500,000 cars in 2020 was “impressive,” says Alex, who also acknowledged the company’s ability to turn GAAP profits, but “pride cometh before the fall, as does a melt up, I think.”

Note: This story has Alex’s original headline, but I told him I would replace the featured image with a photo of someone who had very “richest man in the world” face.

What is up with Tesla’s value?

How Segment redesigned its core systems to solve an existential scaling crisis

Image Credits: piranka / Getty Images

On Tuesday, enterprise reporter Ron Miller covered a major engineering project at customer data platform Segment called “Centrifuge.”

“Its purpose was to move data through Segment’s data pipes to wherever customers needed it quickly and efficiently at the lowest operating cost,” but as Ron reports, it was also meant to solve “an existential crisis for the young business,” which needed a more resilient platform.

How Segment redesigned its core systems to solve an existential scaling crisis

Dear Sophie: Banging my head against the wall understanding the US immigration system

Image Credits: Sophie Alcorn

Dear Sophie:

Now that the U.S. has a new president coming in whose policies are more welcoming to immigrants, I am considering coming to the U.S. to expand my company after COVID-19. However, I’m struggling with the morass of information online that has bits and pieces of visa types and processes.

Can you please share an overview of the U.S. immigration system and how it works so I can get the big picture and understand what I’m navigating?

— Resilient in Romania

The first “Dear Sophie” column of each month is available on TechCrunch without a paywall.

Dear Sophie: Banging my head against the wall understanding the US immigration system

Revenue-based financing: The next step for private equity and early-stage investment

Image Credits: Hiraman (opens in a new window) / Getty Images

For founders who aren’t interested in angel investment or seeking validation from a VC, revenue-based investing is growing in popularity.

To gain a deeper understanding of the U.S. RBI landscape, we published an industry report on Wednesday that studied data from 134 companies, 57 funds and 32 investment firms before breaking out “specific verticals and business models … and the typical profile of companies that access this form of capital.”

Revenue-based financing: The next step for private equity and early-stage investment

Lisbon’s startup scene rises as Portugal gears up to be a European tech tiger

Image Credits: Westend61 (opens in a new window)/ Getty Images

Mike Butcher continues his series of European investor surveys with his latest dispatch from Lisbon, where a nascent startup ecosystem may get a Brexit boost.

Here are the Portugal-based VCs he interviewed:

• Cristina Fonseca, partner, Indico Capital Partners
• Pedro Ribeiro Santos, partner, Armilar Venture Partners
• Tocha, partner, Olisipo Way
• Adão Oliveira, investment manager, Portugal Ventures
• Alexandre Barbosa, partner, Faber
• António Miguel, partner, Mustard Seed MAZE
• Jaime Parodi Bardón, partner, impACT NOW Capital
• Stephan Morais, partner, Indico Capital Partners
• Gavin Goldblatt, managing partner, Portugal Gateway

Lisbon’s startup scene rises as Portugal gears up to be a European tech tiger

How late-stage edtech companies are thinking about tutoring marketplaces

Image Credits: John Lund (opens in a new window)/ Getty Images

How do you scale online tutoring, particularly when demand exceeds the supply of human instructors?

This month, Chegg is replacing its seven-year-old marketplace that paired students with tutors with a live chatbot.

A spokesperson said the move will “dramatically differentiate our offerings from our competitors and better service students,” but Natasha Mascarenhas identified two challenges to edtech automation.

“A chatbot won’t work for a student with special needs or someone who needs to be handheld a bit more,” she says. “Second, speed tutoring can only work for a specific set of subjects.”

The tech-powered wave of smart, not slow, tutoring sessions

Decrypted: How bad was the US Capitol breach for cybersecurity?

Image Credits: Treedeo (opens in a new window) / Getty Images

While I watched insurrectionists invade and vandalize the U.S. Capitol on live TV, I noticed that staffers evacuated so quickly, some hadn’t had time to shut down their computers.

Looters even made off with a laptop from Senator Jeff Merkley’s office, but according to security reporter Zack Whittaker, the damages to infosec wasn’t as bad as it looked.

Even so, “the breach will likely present a major task for Congress’ IT departments, which will have to figure out what’s been stolen and what security risks could still pose a threat to the Capitol’s network.”

Decrypted: How bad was the US Capitol breach for cybersecurity?

Extra Crunch’s top 10 stories of 2020

Image Credits: Catherine Falls Commercial (opens in a new window) / Getty Images

On New Year’s Eve, I made a list of the 10 “best” Extra Crunch stories from the previous 12 months.

My methodology was personal: From hundreds of posts, these were the 10 I found most useful, which is my key metric for business journalism.

Some readers are skeptical about paywalls, but without being boastful, Extra Crunch is a premium product, just like Netflix or Disney+. I know, we’re not as entertaining as a historical drama about the reign of Queen Elizabeth II or a space western about a bounty hunter. But, speaking as someone who’s worked at several startups, Extra Crunch stories contain actionable information you can use to build a company and/or look smart in meetings — and that’s worth something.

Extra Crunch’s top 10 stories of 2020

https://ift.tt/2GZMFat Extra Crunch roundup: 2 VC surveys, Tesla’s melt up, The Roblox Gambit, more https://ift.tt/39cz3mk

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Twitter bans QAnon figures Michael Flynn, Sidney Powell and Ron Watkins

Twitter took action against a pair of President Trump’s close associates, banning them from the platform Friday.

Trump ally Michael Flynn and former Trump campaign lawyer Sidney Powell were both suspended under Twitter’s “Coordinated Harmful Activity” policy. Ron Watkins, who previously ran 8kun (formerly 8chan) also saw his account removed.

“We’ve been clear that we will take strong enforcement action on behavior that has the potential to lead to offline harm, and given the renewed potential for violence surrounding this type of behavior in the coming days, we will permanently suspend accounts that are solely dedicated to sharing QAnon content,” a Twitter spokesperson told TechCrunch.

Each figure has promoted the QAnon conspiracy in recent months. Flynn and Powell were both also actively involved in Trump’s quest to overturn the results of the November election. As the administrator of QAnon’s central online hub, Watkins played a key role QAnon’s explosion into the mainstream over the last few years.

Developing…

Twitter cracks down on QAnon conspiracy theory, banning 7,000 accounts

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What is up with Tesla’s value?

The last year taught us that the connection between the stock market and the economy is imprecise at best.

Despite some useful commentary underscoring the two are at least somewhat linked, it’s clear that many Americans can lose their jobs and financial security at the same time that stocks can keep on rising like the boom times will never end.

It seems that today’s market is willing to value stocks not on their past performance, current performance or analyst-expected future performance but on the rosiest future that investors have imagined for their favorite companies.

That’s the macro picture; 2021 is teaching us its microcorollary — smaller groups of stocks can keep rising regardless of what is going on with their fundamentals.

And in the micro-micro case, that Tesla’s value is unlimited, because [fill in your reasons here].

To avoid all useless Twitter whining, yes, Tesla’s ability to turn GAAP profits — albeit at times by selling regulatory credits — is a win, and joining the S&P 500 is great. Delivering 500,000 cars in 2020, a full 75% of GM’s third-quarter deliveries, is impressive as well.

I am certainly not arguing that Tesla is worthless, or that the group of companies like those that comprise the ARK Innovation ETF, are all overpriced. Instead, it seems that today’s market is willing to value stocks not on their past performance, current performance or analyst-expected future performance but on the rosiest future that investors have imagined for their favorite companies.

You can see elements of this logic at work if you ever talk about stocks on the internet. Don’t call Tesla a car company, for example — this despite automotive revenues making up nearly 87% of the company’s Q3 top line. Tesla is a battery company, its religious fans will tell you.

That’s why it’s fine to pay 31x sales for Tesla, while GM is worth 0.5348x sales today. Amazon, for comparison, is worth 4.6x sales. Tesla shares are valued like Twilio’s own in terms of their price-sales ratio, but the difference is that the car company had gross margins of 23.5% in Q3 2020, while the software company managed twice that. And Twilio is growing more quickly.

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Jumbotail raises $14.2 million for its wholesale marketplace in India

Jumbotail, an online wholesale marketplace for grocery and food items, said on Friday it has raised an additional $14.2 million as the Bangalore-based startup chases the opportunity to digitize neighborhood stores in the world’s second-largest internet market.

The five-year-old startup said the new tranche of its Series B financing round was led by VII Ventures, with participation from Nutresa, Veronorte, Jumbofund, Klinkert Investment Trust, Peter Crosby Trust, Nexus Venture Partners and Discovery Ventures.

The startup told TechCrunch that the new tranche concludes its Series B round, which it kickstarted in 2019 with a tranche of $12.7 million. It ended up raising about $44 million in the Series B round (including Friday’s tranche), and to date has amassed about $54 million in equity investment, the startup told the publication.

Jumbotail said it serves more than 30,000 neighborhood stores (popularly known in India as kiranas) in the country. In addition to its business-to-business marketplace, the startup also provides working capital to neighborhood stores through partnerships with financial institutions.

Indian B2B e-commerce startup Udaan raises $280 million

The startup, which has built its own supply chain network to enable last-mile delivery, also supplies these stores with point-of-sale devices so they can easily get access to a much wider selection of catalog and have the new inventory shipped to them within two days. It also integrates these stores with hyperlocal delivery startups such as Dunzo and Swiggy to help mom and pop shops further expand their customer base.

Ashish Jhina, co-founder of Jumbotail, said he believes the startup has reached an inflection point in its growth and is now ready for its next chapter, which includes hiring top talent and expanding to more regions in the country, especially in several cities in South India.

“We are seeing tremendous interest from investors across the globe who are drawn to our highly scalable and operationally profitable business model, built on the industry’s best technology and customer NPS,” said Jhina, who previously served in the Indian army and then worked at e-commerce firms eBay and Flipkart.

At a recent virtual conference, Jhina said that the coronavirus pandemic, which prompted New Delhi to order a nationwide lockdown and put restrictions on e-commerce firms, has illustrated just how crucial neighborhood stores are in people’s lives. And for all the ills that the virus has wrought, it did help accelerate the adoption of technology among these stores.

A number of food brands whose products neighborhood stores sell today are not standardized, which poses a question about their quality. To fill this gap, Jumbotail runs its own private label portfolio and Jhina said the startup will deploy part of the fresh fund to broaden this catalog. Having a private label also allows Jumbotail to ensure that its retail partners can get the supply of items throughout the year — and of course, it also helps the startup, which has been operationally profitable for nearly three quarters, improve its margin.

There are more than 30 million neighborhood stores in India located across the thousands of cities and towns in the country. These small businesses have been around for decades and survived — and even thrived — despite e-commerce giants pouring billions of dollars in India to change how people shop. In recent years, scores of startups — and giants — in India have begun to explore ways to work with these neighborhood stores.

One of them is India’s largest retail chain Reliance Retail, which serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 cities and towns in the country. In late 2019, it entered the e-commerce space with JioMart through a joint venture with sister subsidiary telecom giant Jio Platforms. By mid last year, JioMart had expanded to over 200 Indian cities and towns — though currently its reach within those cities and customer service leave a lot to be desired.

Reliance Retail also maintains a partnership with Facebook for WhatsApp integration. Facebook, which invested $5.7 billion in Jio Platforms last year, has said that it will explore various ways to work with Reliance to digitize the nation’s mom and pop stores, as well as other small and medium-sized businesses.

For JioMart, Reliance Retail is working with neighborhood shops, giving them a digital point-of-sale machine to make it easier for them to accept money electronically. It is also allowing these shops to buy their inventory from Reliance Retail, and then use their physical presence as delivery points. At present, the platform is largely focused on grocery delivery. In a recent report to clients, Goldman Sachs analysts estimated that Reliance could become the largest player in online grocery within three years.

Facebook invests $5.7B in India’s Reliance Jio Platforms

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SilviaTerra wants to bring the benefits of carbon offsets to every landowner everywhere

Zack Parisa and Max Nova, the co-founders of the carbon offset company SilviaTerra, have spent the last decade working on a way to democratize access to revenue-generating carbon offsets.

As forestry credits become a big, booming business on the back of multibillion-dollar commitments from some of the world’s biggest companies to decarbonize their businesses, the kinds of technologies that the two founders have dedicated 10 years of their lives to building are only going to become more valuable.

That’s why their company, already a profitable business, has raised $4.4 million in outside funding led by Union Square Ventures and Version One Ventures, along with Salesforce founder and the driving force between the One Trillion Trees Initiative, Marc Benioff.

“Key to addressing the climate crisis is changing the balance in the so-called carbon cycle. At present, every year we are adding roughly 5 gigatons of carbon to the atmosphere. Since atmospheric carbon acts as a greenhouse gas this increases the energy that’s retained rather than radiated back into space which causes the earth to heat up,” writes Union Square Ventures managing partner Albert Wenger in a blog post. “There will be many ways such drawdown occurs and we will write about different approaches in the coming weeks (such as direct air capture and growing kelp in the oceans). One way that we understand well today and can act upon immediately are forests. The world’s forests today absorb a bit more than one gigatons of CO2 per year out of the atmosphere and turn it into biomass. We need to stop cutting and burning down existing forests (including preventing large scale forest fires) and we have to start planting more new trees. If we do that, the total potential for forests is around 4 to 5 gigatons per year (with some estimates as high as 9 gigatons).”

For the two founders, the new funding is the latest step in a long journey that began in the woods of Northern Alabama, where Parisa grew up.

After attending Mississippi State for forestry, Parisa went to graduate school at Yale, where he met Louisville, Kentucky native Max Nova, a computer science student who joined with Parisa to set up the company that would become SilviaTerra.

SilviaTerra co-founders Max Nova and Zack Parisa. Image Credit: SilviaTerra

The two men developed a way to combine satellite imagery with field measurements to determine the size and species of trees in every acre of forest.

While the first step was to create a map of every forest in the U.S., the ultimate goal for both men was to find a way to put a carbon market on equal footing with the timber industry. Instead of cutting trees for cash, potentially landowners could find out how much it would be worth to maintain their forestland. As the company notes, forest management had previously been driven by the economics of timber harvesting, with over $10 billion spent in the U.S. each year.

The founders at SilviaTerra thought that the carbon market could be equally as large, but it’s hard for most landowners to access. Carbon offset projects can cost as much as $200,000 to put together, which is more than the value of the smaller offset projects for landowners like Parisa’s own family and the 40 acres they own in the Alabama forests.

Yayzy app automatically calculates the environmental impact of your spending

There had to be a better way for smaller landowners to benefit from carbon markets too, Parisa and Nova thought.

To create this carbon economy, there needed to be a single source of record for every tree in the U.S. and while SilviaTerra had the technology to make that map, they lacked the compute power, machine learning capabilities and resources to build the map.

That’s where Microsoft’s AI for Earth program came in.

Working with AI for Earth, SilviaTierra created their first product, Basemap, to process terabytes of satellite imagery to determine the sizes and species of trees on every acre of America’s forestland. The company also worked with the U.S. Forestry Service to access their data, which was used in creating this holistic view of the forest assets in the U.S.

With the data from Basemap in hand, the company has created what it calls the Natural Capital Exchange. This program uses SilviaTerra’s unparalleled access to information about local forests, and the knowledge of how those forests are currently used to supply projects that actually represent land that would have been forested were it not for the offset money coming in.

Currently, many forestry projects are being passed off to offset buyers as legitimate offsets on land that would never have been forested in the first place — rendering the project meaningless and useless in any real way as an offset for carbon dioxide emissions. 

“It’s a bloodbath out there,” said Nova of the scale of the problem with fraudulent offsets in the industry. “We’re not repackaging existing forest carbon projects and trying to connect the demand side with projects that already exist. Use technology to unlock a new supply of forest carbon offset.”

The first Natural Capital Exchange project was actually launched and funded by Microsoft back in 2019. In it, 20 Western Pennsylvania land owners originated forest carbon credits through the program, showing that the offsets could work for landowners with 40 acres, or, as the company said, 40,000.

Landowners involved in SilviaTerra’s pilot carbon offset program paid for by Microsoft. Image Credit: SilviaTerra

“We’re just trying to get inside every landowners annual economic planning cycle,” said Nova. “There’s a whole field of timber economics… and we’re helping answer the question of given the price of timber, given the price of carbon does it make sense to reduce your planned timber harvests?”

Ultimately, the two founders believe that they’ve found a way to pay for the total land value through the creation of data around the potential carbon offset value of these forests.

It’s more than just carbon markets, as well. The tools that SilviaTerra have created can be used for wildfire mitigation as well. “We’re at the right place at the right time with the right data and the right tools,” said Nova. “It’s about connecting that data to the decision and the economics of all this.”

The launch of the SilviaTerra exchange gives large buyers a vetted source to offset carbon. In some ways it’s an enterprise corollary to the work being done by startups like Wren, another Union Square Ventures investment, that focuses on offsetting the carbon footprint of everyday consumers. It’s also a competitor to companies like Pachama, which are trying to provide similar forest offsets at scale, or 3Degrees Inc. or South Pole.

Under a Biden administration there’s even more of an opportunity for these offset companies, the founders said, given discussions underway to establish a Carbon Bank. Established through the existing Commodity Credit Corp. run by the Department of Agriculture, the Carbon Bank would pay farmers and landowners across the U.S. for forestry and agricultural carbon offset projects.

Sequoia picks its horse in the consumer carbon offset market, leading a $2.5 million round for Joro

“Everybody knows that there’s more value in these systems than just the product that we harvest off of it,” said Parisa. “Until we put those benefits in the same footing as the things we cut off and send to market…. As the value of these things goes up… absolutely it is going to influence these decisions and it is a cash crop… It’s a money pump from coastal America into middle America to create these things that they need.” 

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