Exit

Omni storage & rentals fails, shutters, sells engineers to Coinbase

Posted by | Apps, clutter, coinbase, Collaborative Consumption, eCommerce, Exit, Flybridge Capital Partners, founders fund, Fundings & Exits, Highland Capital Partners, Logistics, Mobile, Omni, payments, rentals, Startups, TC, Transportation | No Comments

$35 million-funded Omni is packing up and shutting down after struggling to make the economics of equipment rentals and physical on-demand storage work out. It’s another victim of a venture capital-subsidized business offering a convenient service at an unsustainable price.

The startup fought for a second wind after selling off its physical storage operations to competitor Clutter in May. Then sources tell me it tried to build a whitelabel software platform for letting brick-and-mortar merchants rent stuff like drills or tents as well as sell them so Omni could get out of hands-on logistics. But now the whole company is folding, with Coinbase hiring roughly 10 of Omni’s engineers.

“They realized that the core business was just challenging as architected” a source close to Omni tells TechCrunch. “The service was really great for the consumer but when they looked at what it would take to scale, that would be difficult and expensive.” Another source says Omni’s peak headcount was around 70.

The news follows TechCrunch’s report in October that Omni had laid off operations teams members and was in talks to sell its engineering team to Coinbase. Omni had internally discussed informing its retail rental partners ahead of time that it would be shutting down. Meanwhile, it frantically worked to stop team members from contacting the press about the startup’s internal troubles.

We’ll be winding down operations at Omni and closing the platform by the end of this year. We are proud of what we built and incredibl y thankful for everyone who supported our vision over the past five and a half years” an Omni spokesperson says. Omni CEO Tom McLeod did not respond to multiple requests for comment. Oddly, Omni was still allowing renters to pay for items as of this morning, though it’s already shut down its blog and hasn’t made a public announcement about its shut down.

Coinbase has reached an agreement with Omni to hire members of its engineering team. We’re always looking for top-tier engineering talent and look forward to welcoming these new team members to Coinbase” a Coinbase spokesperson tells us. The team was looking for more highly skilled engineers they could efficiently hire as a group, though it’s too early to say what they’ll be working on.

Omni originaly launched in 2015, offering to send a van to your house to pick up and index any of your possession, drive them to a nearby warehouse, store them, and bring them back to you whenever you needed for just a few dollars per month. It seemed too good to be true and ended up being just that.

Eventually Omni pivoted towards letting you rent out what you were storing so you and it could earn some extra cash in 2017. Sensing a better business model there, it sold its storage business to Softbank-funded Clutter and moved to helping retail stores run rental programs. But that simply required too big of a shift in behavior for merchants and users, while also relying on slim margins.

Omni Rentals

One major question is whether investors will get any cash back. Omni raised $25 million from cryptocurrency company Ripple in early 2018. Major investors include Flybridge, Highland, Allen & Company, and Founders Fund, plus a slew of angels.

The implosion of Omni comes as investors are re-examining business fundamentals of startups in the wake of Uber’s valuation getting cut in half in the public markets and the chaos at WeWork ahead of its planned IPO. VCs and their LPs want growth, but not at the cost of burning endless sums of money to subsidize prices just to lure customers to a platform.

It’s one thing if the value of the service is so high that people will stick with a startup as prices rise to sustainable levels, as many have with ride hailing. But for Omni, ballooning storage prices pissed off users as on-demand became less afforable than a traditional storage unit. Rentals were a hassle, especially considering users had to pick-up and return items themselves when they could just buy the items and get instant delivery from Amazon.

Startups that need a ton of cash for operations and marketing but don’t have a clear path to ultra-high lifetime value they can earn from customers may find their streams of capital running dry.

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Camp Grounded Digital Detox returns after founder’s death

Posted by | Camp Grounded, Digital Detox, digital well-being, Education, events, Exit, Forest Bronzan, Fundings & Exits, GreenTech, Health, Levi Felix, M&A, Mobile, Personnel, Startups, summer camp, TC, Time Well Spent | No Comments

Summer camp for adults and beloved tech-free weekend getaway Camp Grounded ground to a halt in 2017. Its big-hearted founder, Levi Felix, who’d espoused the joys of trading screens for nature walks, was tragically killed by brain cancer at just age 32. Left in his wake was a mourning community that had lost their digital detox rally just as everyone was realizing the importance of looking up from their phones.

As an attendee, I’d been impressed by how the founder (known as Professor Fidget Wigglesworth at camp) used playfulness and presence to transport us back to childhood, before we got hooked on the internet. But he also broke people’s addiction to shame, mandating that anyone who screwed up in a sports game or talent show announce “I’m awesome,” and be met with a cheer from the crowd, “you’re awesome!”

Attendees compete in camp-wide games

Luckily, one of Felix’s elementary school friends, Forest Bronzan, wants to write a happier ending to this story. Almost three years after it went into hibernation following its creator’s death, Bronzan has acquired Camp Grounded and its parent company Digital Detox .

Camp Grounded will relaunch in May 2020 as two back-to-back weekend retreats at Northern California’s gorgeous Camp Mendocino. Attendees will again leave their devices in Tech Check lockers run by hazmat-suit wearing staffers, assume nicknames and stop the work talk. They’ll get to play in the woods like technology never existed, indulging in Camp Grounded favorites, from archery to arts & crafts to bonfire singalongs about enthusiastic consent. However, to simplify logistics, Camp Grounded will no longer hold sessions in New York, North Carolina or Texas.

The company will also organize more four-hour Unplugged Nights in cities around the country where partiers can switch off their phones and make new friends. The idea is to give a broader range of people a taste of the Grounded lifestyle in smaller doses. Those interested in early access to tickets for all of Digital Detox’s events can sign up here.

Camp Grounded’s Tech Check staffers confiscate attendees’ devices upon their arrival (Image Credit: Daniel N. Johnson)

Meanwhile, Digital Detox will start a new business of education and certifications for K-12 schools, coaching teachers and parents on how to gently reduce students’ screentime. Schools will pay per student like a Software-as-a-Service model. Through research by a few PhDs, the company will recommend proper rules for using tech in and out of the classroom to minimize distraction, and empathetic penalties for violations.

The obvious question to ask, though, is if Bronzan is just some business guy coming to coin off the anti-tech trend and Felix’s legacy. “I’m not Apple coming in and buying the company. This isn’t a tech acquisition,” Bronzan insists at a coffee shop in San Francisco. “I knew Levi before anyone else knew Levi. We went trick-or-treating and played in school band together. I went to the first Digital Detox summit, and brought my company year after year. I’ve been involved from the beginning, seeing Levi’s passion and inspiration.”

Levi Felix and Forest Bronzan (from left) in 1996

Fidget had an innately soothing camp counselor vibe to him that Bronzan doesn’t quite capture. He’d previously built and sold Email Aptitude, a CRM and email agency, not an event or education business. But he truly seems to mean well, and he’s earned the support of Digital Detox’s team.

“My mission was to find someone that was as excited and ferocious as Levi and I were when we started Digital Detox to further it as a movement,” says Brooke Dean, Felix’s wife and co-founder. “It was imperative that the person running DD and CG had actually experienced the magic. This person had to be more than a lover of camp and nature, they also needed the hard skills and successful track record of running a company. Forest is stable, business-minded and also finds value in that very unique magic.”

Brooke Dean and Levi Felix (foreground, from left) at Camp Grounded

Bronzan tells me the acquisition includes a cash component (“We’re not talking eight figures”) and a capital investment in the business, both funded by his email company’s exit. Two other individuals and one company had also expressed interest. Dean and Felix’s brother Zev will retain equity in the company, and she’ll stay on the board of directors. The trio are launching the Levi Felix Foundation that will donate money to brain cancer research.

While moving into education might seem like a left turn for Digital Detox after throwing events since 2012, Dean says, “Levi was planning on going back to school and was deeply interested in being an academic in this field. We always believed that there needed to be evidence in order to convince the masses that being outside and connecting with other human beings ‘IRL’ is critical to our health and longevity.”

Some alarming stats the organization has already uncovered include:

  • 77% of people check or pretend to check their phone to avoid talking to others
  • 38% feel less connected to their partner or close friend due to cell phone use
  • Nearly 20% check their phone while having sex

“We want to eventually be the central source of tools on how tech is affecting lives and relationships at all age levels,” Bronzan tells me. It’s zeroing in on how compulsive behaviors like endless scrolling increase anxiety and depression, and how parents glued to their devices train children to not be present. The father of two kids under age five, Bronzan knows a weekend at camp in your 20s or 30s is too little too late to seriously address the crisis of fractured attention.

Digital Detox’s new CEO says he’s heartened by the progression of some of Felix’s ideals, as with the Time Well Spent movement. The screentime dashboards launched by tech companies don’t do enough to actually change people’s actions, he says, though, “They’re at least making some effort.” Digital Detox plans to launch a comprehensive quiz to determine how addicted you are to your phone, and Bronzan says he’d happily work with tech giants to integrate his company’s research.

On the camp for adults front, we’ve seen Burning Man go mainstream but lose some of what made it special, including a lack of cell phone reception. It’s now common to see people on the playa staring at their phones, talking about work, and stressed about the clock — all of which are prohibited at Camp Grounded. Festivals like Coachella seem to get more corporate and less mindful each year. That leaves plenty of open space for Digital Detox to fill with purposeful breaks from the default world.

Bronzan also wants to introduce more surprise and serendipity to the event calendar. Camp Grounded will experiment with a “Mystery Trip” where eight to 10 people sign up to be whisked away, only receiving a confidential briefing package the day before they show up. The point is to extract people from their routines where unhealthy habits manifest. Without connectivity, Camp Grounded hopes people will forge new connections in their minds, and with each other.

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SocialRank sells biz to Trufan, pivots to a mobile LinkedIn

Posted by | Advertising Tech, Apps, Enterprise, Exit, funding, Fundings & Exits, M&A, Mobile, Personnel, Recent Funding, Social, Startups, TC | No Comments

What do you do when your startup idea doesn’t prove big enough? Run it as a scrawny but profitable lifestyle business? Or sell it to a competitor and take another swing at the fences? Social audience analytics startup SocialRank chose the latter and is going for glory.

Today, SocialRank announced it’s sold its business, brand, assets, and customers to influencer marketing campaign composer and distributor Trufan which will run it as a standalone product. But SocialRank’s team isn’t joining up. Instead, the full six-person staff is sticking together to work on a mobile-first professional social network called Upstream aiming to nip at LinkedIn.

SocialRank co-founder and CEO Alex Taub

Started in 2014 amidst a flurry of marketing analytics tools, SocialRank had raised $2.1 million from Rainfall Ventures and others before hitting profitability in 2017. But as the business plateaued, the team saw potential to use data science about people’s identity to get them better jobs.

“A few months ago we decided to start building a new product (what has become Upstream). And when we came to the conclusion to go all-in on Upstream, we knew we couldn’t run two businesses at the same time” SocialRank co-founder and CEO Alex Taub tells me. “We decided then to run a bit of a process. We ended up with a few offers but ultimately felt like Trufan was the best one to continue the business into the future.”

The move lets SocialRank avoid stranding its existing customers like the NFL, Netflix, and Samsung that rely on its audience segmentation software. Instead, they’ll continue to be supported by Trufan where Taub and fellow co-founder Michael Schonfeld will become advisors.

“While we built a sustainable business, we essentially knew that if we wanted to go real big, we would need to go to the drawing board” Taub explains.

SocialRank

Two-year-old Trufan has raised $1.8 million Canadian from Round13 Capital, local Toronto startup Clearbanc’s founders, and several NBA players. Trufan helps brands like Western Union and Kay Jewellers design marketing initiatives that engage their customer communities through social media. It’s raising an extra $400,000 USD in venture debt from Round13 to finance the acquisition, which should make Trufan cash-flow positive by the end of the year.

Why isn’t the SocialRank team going along for the ride? Taub said LinkedIn was leaving too much opportunity on the table. While it’s good for putting resumes online and searching for people, “All the social stuff are sort of bolt-ons that came after Facebook and Twitter arrived. People forget but LinkedIn is the oldest active social network out there”, Taub tells me, meaning it’s a bit outdated.

Trufan’s team

Rather than attack head-on, the newly forged Upstream plans to pick the Microsoft-owned professional network apart with better approaches to certain features. “I love the idea of ‘the unbundling of LinkedIn’, ala what’s been happening with Craigslist for the past few years” says Taub. “The first foundational piece we are building is a social professional network around giving and getting help. We’ll also be focused on the unbundling of the groups aspect of LinkedIn.”

Taub concludes that entrepreneurs can shackle themselves to impossible goals if they take too much venture capital for the wrong business. As we’ve seen with SoftBank, investors demand huge returns that can require pursuing risky and unsustainable expansion strategies.

“We realized that SocialRank had potential to be a few hundred million dollar in revenue business but venture growth wasn’t exactly the model for it” Taub says. “You need the potential of billions in revenue and a steep growth curve.” A professional network for the smartphone age has that kind of addressable market. And the team might feel better getting out of bed each day knowing they’re unlocking career paths for people instead of just getting them to click ads.

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Africa’s top mobile phone seller Transsion lists in Chinese IPO

Posted by | africa, Beijing, China, Egypt, ethiopia, Exit, huawei, india, initial public offering, IPO, kenya, Mobile, mobile phone, Nigeria, Opera, Samsung, shanghai, Shanghai Stock Exchange, shenzhen, smartphone, smartphones, South Africa, Startups, Tanzania, TC, technology, Tecno, telecommunications, Transsion, Wapi Capital | No Comments

Chinese mobile phone and device maker Transsion has listed in an IPO on Shanghai’s STAR Market, a Transsion spokesperson confirmed to TechCrunch. 

Headquartered in Shenzhen, Transsion is a top seller of smartphones in Africa under its Tecno brand. The company has also started to support venture funding of African startups.

Transsion issued 80 million A shares at an opening price of 35.15 yuan (≈ $5.00) to raise 2.8 billion yuan (or ≈ $394 million).

A shares are the common shares issued by mainland Chinese companies and are normally available for purchases only by mainland citizens. 

Transsion’s IPO prospectus is downloadable (in Chinese) and its STAR Market listing application is available on the Shanghai Stock Exchange’s website.

STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that went live in July with some 25 companies going public.

Transsion plans to spend 1.6 billion yuan (or $227 million) of its STAR Market raise on building more phone assembly hubs, and around 430 million yuan ($62 million) on research and development, including a mobile phone R&D center in Shanghai, a company spokesperson said.

To support its African sales network, Transsion maintains a manufacturing facility in Ethiopia. The company recently announced plans to build an industrial park and R&D facility in India for manufacture of phones to Africa.

The IPO comes after Transsion announced its intent to go public and filed its first docs with the Shanghai Stock Exchange in April.

Listing on STAR Market puts Transsion on China’s new exchange — seen as an extension of Beijing’s ambition to become a hub for tech startups to raise public capital. Chinese regulators lowered profitability requirements for the STAR Market, which means pre-profit ventures can list.

China Star Market Opening July 2019 1

Transsion’s IPO comes when the company is actually in the black. The firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan a year earlier. Net profit for the year slid to 654 million yuan, down from 677 million yuan in 2017, according to the firm’s prospectus.

Transsion sold 124 million phones globally in 2018, per company data. In Africa, Transsion holds 54% of the feature phone market — through its brands Tecno, Infinix and Itel — and in smartphone sales is second to Samsung and before Huawei, according to International Data Corporation stats.

Transsion has R&D centers in Nigeria and Kenya and its sales network in Africa includes retail shops in Nigeria, Kenya, Tanzania, Ethiopia and Egypt. The company also attracted attention for being one of the first known device makers to optimize its camera phones for African complexions.

On a 2019 research trip to Addis Ababa, TechCrunch learned the top entry-level Tecno smartphone was the W3, which lists for 3,600 Ethiopian Birr, or roughly $125.

In Africa, Transsion’s ability to build market share and find a sweet spot with consumers on price and features gives it prominence in the continent’s booming tech scene.

Africa already has strong mobile-phone penetration, but continues to undergo a conversion from basic USSD phones, to feature phones, to smartphones.

Smartphone adoption on the continent is low, at 34%, but expected to grow to 67% by 2025, according to GSMA.

This, added to an improving internet profile, is key to Africa’s tech scene. In top markets for VC and startup origination — such as Nigeria, Kenya and South Africa — thousands of ventures are building business models around mobile-based products and digital applications.

If Transsion’s IPO enables higher smartphone conversion on the continent, that could enable more startups and startup opportunities — from fintech to VOD apps.

Another interesting facet to Transsion’s IPO is its potential to create greater influence from China in African tech, in particular as the Shenzhen company moves more definitely toward venture investing.

In August, Transsion-funded Future Hub teamed up with Kenya’s Wapi Capital to source and fund early-stage African fintech startups.

China’s engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities — further boosted in recent years as Beijing pushes its Belt and Road plan.

Transsion’s IPO is the second event this year — after Chinese owned Opera’s venture spending in Nigeria — to reflect greater Chinese influence and investment in the continent’s digital scene.

So in coming years, China could be less known for building roads and bridges in Africa and more for selling smartphones and providing VC for African startups.

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How Peloton made sweat addictive enough to IPO

Posted by | Apps, Conspicuous self-actualization, Entertainment, Exercise, Exit, Fundings & Exits, Gaming, hardware, Health, IPO, Media, Opinion, Peloton, Reviews, Social, Startups, TC, Video | No Comments

It makes lazy people like me work out. That’s the genius of the Peloton bicycle. All you have to do is velcro on the shoes and you’re trapped. You’ve eliminated choice and you will exercise. Through a succession of savvy product design choice I’ll break down here, Peloton removes the friction to getting fit. It’s the leader in a movement I call “pushbutton health”. And this is why I think Peloton will be a big succes no matter what short-term investors do when it IPOs this week after raising $994 million in venture capital.

Peloton Bike Photo

The bike

Basically, Peloton is a $2300 stationary bike with an iPad stuck to the front. The $40 per month subscription unlocks thousands of live and on-demand video cycling classes where instructors positively yell at you. When you think you’re tired already, they look into your eyes, tell you “you got this”, the soundtrack crescendos, you crank up the resistance, and you pedal harder at home. The resulting endorphin rush is addictive, and you find yourself persuading friends they need a Peloton too.

That viral loop which adds to its 500,000 subscribers is how Peloton plans to raise ~$1.16 billion going public this week at an ~$8 billion valuation. Its revenue doubled this year as it began to dominate the connected exercise equipment market, though losses quadrupled as it burned cash to become a household name. But after riding 110 of 150 days I’ve been home since buying its bike, I’m confident in the company. Whatever it invests now to build its lead will likely be paid back handsomely by its increasingly handsome customers who can’t bear to clip out. Here’s why.

Peloton Class

Peloton classes are recorded in front of a live studio audience of riders

The Brilliance Of This Bike

The Shoes – Usually the activation energy to start a workout requires dragging yourself to the gym or suiting up to face the elements outside. That can be daunting enough that you rarely do. But once you slip into the Peloton bike shoes, you can hardly walk normally which means you can hardly procrastinate. You’re home so you don’t even need clothes. Just a few velcro straps and you’re over the hump and resigned to exercise.

The Clips – Home gym equipments reduces the barrier to entry but also the barrier to exit. You can tell yourself you’ll keep doing push-up sets or squats jumping rope, but you can stop any time. Yet after you’re clipped into the Peloton bike, you’re almost assured to keep pedaling until the instructor gives you that end-of-ride congratulations.

Peloton Shoes

Just put the shoes on and you’ll exercise

The Schedule – You can get a sweat in just 10 or 20 minutes going hard on a Peloton. Combined with zero commute, that means you’ll practically always be able fit in a ride regardless of how busy you are. No more “I don’t have time to make it to the gym so I’ll just skip out”. When my calendar gets crunched or I dawdle a little before deciding to ride, classes as short as 5 minutes ensure there’s no weaseling out.

The Instructors – I wish I had these coaches to motivate me through sorting email. Peloton’s 20+ instructors range from hippie-dippie gurus to no-nonsense trainers that fit your personality type. You find yourself craving your favorite’s special brand of relentless positivity. I burn far more calories in a shorter time than exercising solo because they inspire me to push a little harder or they slow their countdown to add a couple all-out seconds to the end of a sprint. They’re even becoming celebrities, with bankers lining up for selfies during Peloton’s IPO road show. Sick of them? You can always Scenic Ride through video of some of the world’s prettiest bike paths.

Peloton Instructors

Peloton instructors (from left): Alex Toussaint, Emma Lovewell, Ben Alldis, and Leane Hainsby

The Intimacy – You’re eye-to-eye with those instructors as they stare into the camera and out of the giant screen bolted to your handlebars. That generates intimacy despite them broadcasting to thousands. Even in person, a SoulCycle coach across the room can feel further away. You’re mostly guided by audio cues, but their gaze compels you to perform. Peloton almost feels like FaceTime, and that’s a sense of connection many long for more of these days.

The Pavlovian Response – Your brain quickly begins to associate the sounds of Peloton with the glowing feeling of finishing a workout. The rip of the velcro shoe straps, the click of clipping into the bike, but most of all the instructor catch-phrases. You get hooked on hear the bubbling British accent of “I’mmmm Leeaannne Haaaaainsby” as she introduces herself, Ben Alldis’ infectious “You got 5, you got 4…” countdowns, or Emma Lovewell reminding you to “Live, learn, love well”. That final ‘namaste’ followed by wiping down the bike and jumping in a cold shower forms a ritual you’re inclined to repeat.

Peloton Class

Eye-contact with the instructors creates an intimate bond

The Soundtrack – Popular songs are more than just a pump-up accompaniment to Peloton classes. Your pedaling pace is often pegged to the tempo, with sprints starting when the beat drops. As your legs tire, you feel obliged to maintain your speed so you don’t fall behind the drums. You can even search classes by music genre and preview each’s playlist. Peloton has paid out $50 million in royalties for its music, and faces $300 million-plus in lawsuits for copyright infringement. But having the best tunes to bike to might end up worth the penalty since it helped Peloton race ahead in a lucrative market.

The Bike As Decor – Most home exercise equipment ends up in a closet or as a clothing rack. By designing its bicycles for beauty, Peloton coerces you to place them conspicuously in your home. You might have seen the hysterical Twitter thread parodying this practice, but it’s funny because it’s true. You’re a lot more likely to ride it if it’s central to your home (ours is between our bed and the doors to the veranda), and you’ll be embarassed if visitors ask about it and you haven’t hopped on recently.

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“A good place for your Peloton bike is between your kitchen and your living room facing the cactus garden so you always remember virtual spin class” –ClueHeywood on Twitter

The Network Effect – Many of these smart product design moves could be copied by competitors. But by amassing a community of 1.4 million members to date, Peloton benefits from social features and economies of scale. You can ride together with pals over video chat, send each other digital high fives, or race and compare achievements. Each friend that joins Peloton is one more reason not to sign up for a competitor. The whole concept virtual personal training is being legitimized. And the cost of producing more classes gets spread wider as membership grows.

The Shared Accounts – Peloton has even built in a way to feel noble about your sanctimonious prosyletizing about how it “jumpstarted your metabolism”. Each $39 on-bike subscription allows unlimited accounts on up to three devices, so you can hook up some friends if you convince them to buy the big-budget gadget.

Peloton High Five

High-five fellow riders as you virtuall pass them

The Growth Hacks – Peloton streaks are for adults what Snapchat streaks are to kids: a clever way to reward consistent usage. But beyond the achievement badges displayed on your profile, you’ll get in-ride leaderboards full of people to proudly pass, progress bars to fill by pedaling, and kilojoule output high scores to beat. Peloton makes exercise a game you want to win.

The Shoutouts – Yet Peloton’s most explicit levering of our psychology comes from the in-class name-drop shoutouts instructors give. Whether mentioning the screen names of a few participants at the start of a session or congratulating users hitting their 50th, 200th, or 500th ride, the recognition pushes people to join the dozen live-streamed classes each day that add urgency to the on-demand catalog. Proof it works? People strategize to ensure their 100th ride is a long live class to maximize the chance of a shout-out.

Peloton Century Club Free Shirt

A free cult shirt after your 100th ride

The ‘Transcendence’ – Peloton minimizes the isolation from working out at home. In fact, its whole product enables people to feel ‘glamorous’ and ‘manifested’ yet nonchalant in ways going to a sweaty gym or using a personal trainer can’t. It’s like being able to buy a little piece of the smug satisfaction and in-group affiliation of going to Burning Man. That’s why the company even sends you a free “Century Club” t-shirt when you hit your 100th ride. You’re meant to feel cool sharing that you “Peloton”, using the startup’s name as a verb.

Peloton Conspicuous Self Actualization 2

Conspicuous Self-Actualization

Still, Peloton has plenty left to optimize. There’s room to expand use of its camera to offer premium one-on-one coaching, head-to-head racing, group video chat with friends, and augmented reality filters to make people feel comfortable on screen and take shareable selfies. A wider range of intense but short classes could appeal to overworked professionals who picked Peloton precisely because they don’t have an hour for the gym.

Novelty could come from celebrity guest instructors, or themed classes for pre-gaming for a night out, fans of a particular artist, or songs about a certain topic. And it should definitely have some iconic sounds like an om or singing bowl chime that play before each class to center you and after to release you.

Most excitingly, the Peloton screen has the potential to be a platform for exercise-controlled gaming and apps. Whether pedaling to escape zombies chasing you or piece together a puzzle, maintaining an output level to keep your cross-hairs locked on an enemy plane as you dogfight, or making a garden bloom by growing each flower during a different interval, Peloton could evolve riding to be much more interactive. Apps could offer training simulators for different sports focused on sprints for basketball or marathons for soccer. Or just put Netflix on it! By opening up to outside developers, Peloton could build a moat of extra experiences competitors can’t match.

With the strengths and opportunities of its core product, Peloton is poised to absorb more of your fitness time and money. It’s already branching out with yoga, meditation, lifting, bootcamp, and jazzercise classes you can do standing next to your bike or without one on its $19 per month app. Its second gadget is a $4300 treadmill.

From there it could break into more of the “pushbutton health” business. I categorize these as wellness products and services that rely on convenience instead of your will power. Think delivery health food instead calorie-counting apps that are a chore. My pushbutton regimen includes Peloton, six salads per week dropped off in batches by Thistle, monthly packages of Nomiku vacuum-sealed meals that RFID scan into its sous vide machine, and a Future remote personal trainer who nags me by text message.

Peloton Coaching

It’s easy to get hooked on the positivity

Peloton could easily dive into selling meal kits, personal training, or a wider range of workout clothes to compete with Lulu Lemon. If it’s the center of your fitness routine, the company could become a gateway to new health products it owns or partners with.

I’m bullish on Peloton because I’m betting people are going to stay busy, lazy, and competitive. It offers the effectiveness of a spin class but with scheduling flexibility. It removes every excuse for staying on the couch. And in an age of visual communication where many seek to share both the journey to and the destination of an Instagrammable body and the discipline to ge there, Peloton provides conspicuous self-actualization through consumerism. Plus, finishing a ride feels damn good.

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Maker Faire halts operations and lays off all staff

Posted by | Education, Entertainment, Exit, Fundings & Exits, Gadgets, Hack, hardware, layoffs, MAKE, maker faire, Maker Media, Media, Personnel, robotics, Startups, Talent, TC | No Comments

Financial troubles have forced Maker Media, the company behind crafting publication MAKE: magazine as well as the science and art festival Maker Faire, to lay off its entire staff of 22 and pause all operations. TechCrunch was tipped off to Maker Media’s unfortunate situation which was then confirmed by the company’s founder and CEO Dale Dougherty.

For 15 years, MAKE: guided adults and children through step-by-step do-it-yourself crafting and science projects, and it was central to the maker movement. Since 2006, Maker Faire’s 200 owned and licensed events per year in over 40 countries let attendees wander amidst giant, inspiring art and engineering installations.

Maker Media Inc ceased operations this week and let go of all of its employees — about 22 employees” Dougherty tells TechCrunch. “I started this 15 years ago and it’s always been a struggle as a business to make this work. Print publishing is not a great business for anybody, but it works…barely. Events are hard . . . there was a drop off in corporate sponsorship.” Microsoft and Autodesk failed to sponsor this year’s flagship Bay Area Maker Faire.

But Dougherty is still desperately trying to resuscitate the company in some capacity, if only to keep MAKE:’s online archive running and continue allowing third-party organizers to license the Maker Faire name to throw affiliated events. Rather than bankruptcy, Maker Media is working through an alternative Assignment for Benefit of Creditors process.

“We’re trying to keep the servers running” Dougherty tells me. “I hope to be able to get control of the assets of the company and restart it. We’re not necessarily going to do everything we did in the past but I’m committed to keeping the print magazine going and the Maker Faire licensing program.” The fate of those hopes will depend on negotiations with banks and financiers over the next few weeks. For now the sites remain online.

The CEO says staffers understood the challenges facing the company following layoffs in 2016, and then at least 8 more employees being let go in March according to the SF Chronicle. They’ve been paid their owed wages and PTO, but did not receive any severance or two-week notice.

“It started as a venture-backed company but we realized it wasn’t a venture-backed opportunity” Dougherty admits, as his company had raised $10 million from Obvious Ventures, Raine Ventures, and Floodgate. “The company wasn’t that interesting to its investors anymore. It was failing as a business but not as a mission. Should it be a non-profit or something like that? Some of our best successes for instance are in education.”

The situation is especially sad because the public was still enthusiastic about Maker Media’s products  Dougherty said that despite rain, Maker Faire’s big Bay Area event last week met its ticket sales target. 1.45 million people attended its events in 2016. MAKE: magazine had 125,000 paid subscribers and the company had racked up over one million YouTube subscribers. But high production costs in expensive cities and a proliferation of free DIY project content online had strained Maker Media.

“It works for people but it doesn’t necessarily work as a business today, at least under my oversight” Dougherty concluded. For now the company is stuck in limbo.

Regardless of the outcome of revival efforts, Maker Media has helped inspire a generation of engineers and artists, brought families together around crafting, and given shape to a culture of tinkerers. The memory of its events and weekends spent building will live on as inspiration for tomorrow’s inventors.

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Twitter acqui-hires highlight-sharing app Highly

Posted by | acquihire, Apps, Exit, Fundings & Exits, Mobile, Screenshots, Social, Startups, TC, Twitter | No Comments

Quotes from articles are much more eye-catching than links on Twitter, so the social giant is scooping up the team behind highlight-sharing app Highly. This talent could help Twitter build its own version of Highly or develop other ways to excerpt the best content from websites and get it into the timeline.

Twitter confirmed to TechCrunch that the deal was an acqui-hire, and a spokesperson provided this statement: “We are excited to welcome the Highly team to Twitter. Their expertise will accelerate our product and design thinking around making Twitter more conversational.” We’ve asked about what data portability options Highly will offer.

Highly will shut down its iOS and Slack app on April 26th, though it promises that “No highlights will be harmed.” It’s also making its paid “Crowd Control” for private highlight sharing plus Highly For Teams free in the meantime.

“Social highlights can make sharing stories online feel personal, efficient and alive — like retelling a story to a friend, over coffee. They give people shared context and spark meaningful conversations,” the Highly team writes.

Quotes can make the difference between someone breezing past a link they don’t want to leave Twitter to explore, and getting a peek at what’s smart about an article so they know if it’s worth diving deeper. Many people use OneShot to generate Twitter-formatted screenshots of posts. But Highly lets you just rub your finger over text to turn it into an image with a link back to the article for easy tweeting. You could also search an archive of your past highlights, and follow curators who spot the best quotes. Its browser extensions and native app let you highlight from wherever you read.

Get Highly before Twitter shuts down its appshttps://t.co/3yLbfWW25l pic.twitter.com/xAEMG7oJai

— Josh Constine (@JoshConstine) April 17, 2019

“Sharing highlights, not headlines — sharing thinking instead of lazily linking — helps spark the kind of conversation that leaves participants and observers alike a bit better off than they started. We’d like to see more of this,” the Highly teams writes. That’s why it’s joining Twitter to work on improving conversation health. Founded in 2014, Highly had raised a seed round in 2017.

Twitter’s shift to algorithmic ranking of the timeline means every tweet has to compete to be seen. Blasting out links that are a chore to open and read can lead to low engagement, causing Twitter to show it to fewer people. Tools like Highly can give tweeters a leg up. And if Twitter can build these tools right into its service, it could allow more people to create appealing tweets so they actually feel heard.

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Ocean drone startup merger spawns Sofar, the DJI of the sea

Posted by | drones, eCommerce, Exit, funding, Fundings & Exits, Gadgets, GreenTech, hardware, M&A, openrov, Recent Funding, science, Startups, TC, underwater drone | No Comments

What lies beneath the murky depths? SolarCity co-founder Peter Rive wants to help you and the scientific community find out. He’s just led a $7 million Series A for Sofar Ocean Technologies, a new startup formed from a merger he orchestrated between underwater drone maker OpenROV and sea sensor developer Spoondrift. Together, they’re teaming up their 1080p Trident drone and solar-powered Spotter sensor to let you collect data above and below the surface. They can help you shoot awesome video footage, track waves and weather, spot fishing and diving spots, inspect boats or infrastructure for damage, monitor acquaculture sites or catch smugglers.

Sofar’s Trident drone (left) and Spotter sensor (right)

“Aerial drones give us a different perspective of something we know pretty well. Ocean drones give us a view at something we don’t really know at all,” former Spoondrift and now Sofar CEO Tim Janssen tells me. “The Trident drone was created for field usage by scientists and is now usable by anyone. This is pushing the barrier towards the unknown.”

But while Rive has a soft spot for the ecological potential of DIY ocean exploration, the sea is crowded with competing drones. There are more expensive professional research-focused devices like the Saildrone, DeepTrekker and SeaOtter-2, as well as plenty of consumer-level devices like the $800 Robosea Biki, $1,000 Fathom ONE and $5,000 iBubble. The $1,700 Sofar Trident, which requires a cord to a surface buoy to power its three hours of dive time and two meters per second speed, sits in the middle of the pack, but Sofar co-founder David Lang things Trident can win with simplicity, robustness and durability. The question is whether Sofar can become the DJI of the water, leading the space, or if it will become just another commoditized hardware maker drowning in knock-offs.

From left: Peter Rive (chairman of Sofar), David Lang (co-founder of OpenROV) and Tim Janssen (co-founder and CEO of Sofar)

Spoondrift launched in 2016 and raised $350,000 to build affordable ocean sensors that can produce climate-tracking data. “These buoys (Spotters) are surprisingly easy to deploy, very light and easy to handle, and can be lowered in the water by hand using a line. As a result, you can deploy them in almost any kind of conditions,” says Dr. Aitana Forcén-Vázquez of MetOcean Solutions.

OpenROV (it stands for Remotely Operated Vehicle) started seven years ago and raised $1.3 million in funding from True Ventures and National Geographic, which was also one of its biggest Trident buyers. “Everyone who has a boat should have an underwater drone for hull inspection. Any dock should have its own weather station with wind and weather sensors,” Sofar’s new chairman Rive declares.

Spotter could unlock data about the ocean at scale

Sofar will need to scale to accomplish Rive’s mission to get enough sensors in the sea to give us more data on the progress of climate change and other ecological issues. “We know very little about our oceans since we have so little data, because putting systems in the ocean is extremely expensive. It can cost millions for sensors and for boats,” he tells me. We gave everyone GPS sensors and cameras and got better maps. The ability to put low-cost sensors on citizens’ rooftops unlocked tons of weather forecasting data. That’s more feasible with Spotter, which costs $4,900 compared to $100,000 for some sea sensors.

Sofar hardware owners do not have to share data back to the startup, but Rive says many customers are eager to. They’ve requested better data portability so they can share with fellow researchers. The startup believes it can find ways to monetize that data in the future, which is partly what attracted the funding from Rive and fellow investors True Ventures and David Sacks’ Craft Ventures. The funding will build up that data business and also help Sofar develop safeguards to make sure its Trident drones don’t go where they shouldn’t. That’s obviously important, given London’s Gatwick airport shutdown due to a trespassing drone.

Spotter can relay weather conditions and other climate data to your phone

“The ultimate mission of the company is to connect humanity to the ocean as we’re mostly conservationists at heart,” Rive concludes. “As more commercialization and business opportunities arise, we’ll have to have conversations about whether those are directly benefiting the ocean. It will be important to have our moral compass facing in the right direction to protect the earth.”

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Apple acquires talking Barbie voicetech startup PullString

Posted by | Apple, Apps, artificial intelligence, Developer, Entertainment, Exit, Fundings & Exits, Gadgets, hardware, M&A, pullstring, Startups, TC, toytalk, voice apps, voice assistant | No Comments

Apple has just bought up the talent it needs to make talking toys a part of Siri, HomePod, and its voice strategy. Apple has acquired PullString, also known as ToyTalk, according to Axios’ Dan Primack and Ina Fried. TechCrunch has received confirmation of the acquistion from sources with knowledge of the deal. The startup makes voice experience design tools, artificial intelligence to power those experiences, and toys like talking Barbie and Thomas The Tank Engine toys in partnership with Mattel. Founded in 2011 by former Pixar executives, PullString went on to raise $44 million.

Apple’s Siri is seen as lagging far behind Amazon Alexa and Google Assistant, not only in voice recognition and utility, but also in terms of developer ecosystem. Google and Amazon has built platforms to distribute Skills from tons of voice app makers, including storytelling, quizzes, and other games for kids. If Apple wants to take a real shot at becoming the center of your connected living room with Siri and HomePod, it will need to play nice with the children who spend their time there. Buying PullString could jumpstart Apple’s in-house catalog of speech-activated toys for kids as well as beef up its tools for voice developers.

PullString did catch some flack for being a “child surveillance device” back in 2015, but countered by detailing the security built intoHello Barbie product and saying it’d never been hacked to steal childrens’ voice recordings or other sensitive info. Privacy norms have changed since with so many people readily buying always-listening Echos and Google Homes.

In 2016 it rebranded as PullString with a focus on developers tools that allow for visually mapping out conversations and publishing finished products to the Google and Amazon platforms. Given SiriKit’s complexity and lack of features, PullString’s Converse platform could pave the way for a lot more developers to jump into building voice products for Apple’s devices.

We’ve reached out to Apple and PullString for more details about whether PullString and ToyTalk’s products will remain available.

The startup raised its cash from investors including Khosla Ventures, CRV, Greylock, First Round, and True Ventures, with a Series D in 2016 as its last raise that PitchBook says valued the startup at $160 million. While the voicetech space has since exploded, it can still be difficult for voice experience developers to earn money without accompanying physical products, and many enterprises still aren’t sure what to build with tools like those offered by PullString. That might have led the startup to see a brighter future with Apple, strengthening one of the most ubiquitous though also most detested voice assistants.

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Unity acquires Vivox, which powers voice chat in Fortnite and League of Legends

Posted by | Exit, Gaming, Startups, TC, unity-technologies, Vivox | No Comments

Game engine maker Unity believes voice communications are going to grow to become a critical part of gaming across platforms, and it’s buying one of the top companies in the space to bolster what its customers can build on its platform.

Unity has acquired Vivox, a company that powers voice and text chat for the world’s most massive gaming titles, from Fortnite to PUBG to League of Legends. The company’s positional voice chat enables gamers to hear other players chatting around them directionally in 3D space. The company also provides text-based chat. No details on deal terms.

“We thought, I thought, that voice is just one of those things that we should offer our customers,” Unity CEO John Riccitiello tells TechCrunch. “There are just a lot of places to innovate there and I was excited by the roadmap of Vivox .”

Unity plans to use its cross-platform support expertise to make it easier for developers on platforms traditionally underserved by voice chat tools, like mobile, to take advantage of the deeper communication that’s made possible by Vivox. As Unity looks toward new customers beyond gaming, this acquisition has broader reach, as well.

“We’re increasingly supporting industries like architecture, engineering, construction and the auto industry and they talk a lot about collaborating and communicating,” Riccitiello says.

Vivox was founded in 2005 and raised more than $22 million in venture funding from firms like Benchmark and Canaan Partners before it struck hard times some time after its last reported funding in 2010. The startup’s name and some of its assets were acquired by a new entity, Mercer Road Corp, we are told. The company has maintained much of the original leadership during this time; founder and CEO Rob Seaver will continue on with the company after its acquisition.

For his part, Riccitiello doesn’t seem to have immediate plans to shake things up at the Massachusetts-based company, which will maintain its offices and 50+ employees situated in The Bay State. Seaver will report directly to Riccitiello.

Though the company’s previous customers include studios like Unity-rival Epic Games that used the tool to bolster voice chat in Fortnite, there don’t seem to be any plans to cut off non-Unity customers from using the service. “Nothing is changing,” Riccitiello tells TechCrunch.

“It can be nerve-racking to count on something from a smaller company when they might get acquired by a competitor or might go out of business,” he says. “I don’t think anyone is worried about Unity going out of business and I don’t think anyone is worried about Unity being bad hands, we’re sort of Switzerland in our world, we support all platforms and virtually every publisher in the world.”

Asked whether he felt the company’s status as an open platform had been harmed by recent feuds with U.K.-based cloud-gaming startup Improbable, Riccitiello minimized the issue, saying it was a skirmish based on “them claiming a partnership that didn’t exist,” reiterating that “relative to developers, I think they can count on us morning, noon and night to do the right things for them.”

Unity has raised more than $600 million and is valued at north of $3 billion.

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