Transportation

The Great Reset

Posted by | Column, coronavirus, COVID-19, Entertainment, Extra Crunch, food, Gaming, Health, Market Analysis, Media, science, Social, Startups, Transportation, Venture Capital | No Comments
Ann Miura-Ko
Contributor

Ann Miura-Ko is a co-founding partner at Floodgate, a seed-stage VC firm. A repeat member of the Forbes Midas List and the New York Times Top 20 Venture Capitalists Worldwide, she earned a PhD in math modeling of cybersecurity at Stanford University.

Talk of an economic downturn can be frightening, especially one precipitated by a pervasive health crisis. At times, I’m overwhelmed by the images of countless patients on life-support and the near-endless streams of statistics regurgitating bad news.

Having started in venture at the beginning of two recessions, I’ve seen how the startup industry functions during economic trouble. My second day of work at Charles River Ventures was September 11th, 2001. My first project, analyzing the VC industry, propelled the firm to return more than 60% of its fund to investors, going from a $1.2 billion fund to $450 million. In May 2008, Mike Maples and I founded Floodgate in the midst of the Great Recession. We learned that great founders won’t wait for a better economic moment to start a company.

While we are currently embroiled in personal and professional circumstances unimaginable even three months ago, these very challenges will form the basis of incredibly innovative ideas. In order for the world to move forward, we need our greatest minds to imagine a brighter future and create solutions to make it a reality.

When I analyze our society and novel health situation, one thing is certain: COVID-19 is a paradigm-shifting event, creating massively accelerated social and economic change.

The Great Reset is not just another economic event

Our current situation is unique. It’s not merely a cyclical economic event, nor is it a standalone health crisis. What we are experiencing is not just an inflection point: it’s a societal phase-change unlike anything we have ever seen. We face an epic choice of how we move forward, and the decisions we make today will shape an entire generation.

Here’s why: COVID-19 is prompting us to reset many of our most fundamental behaviors. These changes are impacting our financial system, with effects visible throughout our homes, businesses and even the concept of “workplace” itself.

COVID-19 is pervasive

As a global pandemic, the virus itself has spread to nearly every country in the world.

Between February 20 and March 26, 100% of the world’s 20 largest economies implemented government-mandated social distancing. Globally, the number of scheduled airline flights is down 64%. In some countries, like Spain and Germany, flight numbers are down by more than 90%.

Since the timeline for lifting government restrictions is unclear — and even then, scientists are uncertain how the virus will spread — the question lingers: How long will this go on?

COVID-19’s impact is uncertain, long-term and potentially undulating, affecting every facet of our lives. You can’t simply wait it out with the expectation that industries will rebound. In 2001, September 11 felt pervasive, but its economic impact ultimately stemmed from just one single incident and the resulting fear… and that one single incident still cost more than three trillion dollars. How much larger will COVID-19 be?

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TechCrunch’s Top 10 investigative reports from 2019

Posted by | Airbnb, Apple, Apps, Bing, Diversity, Drama, Education, Elon Musk, Facebook, Facebook Researchgate, giphy, Hack, hardware, HQ Trivia, microsoft bing, Mobile, Personnel, pi-top, Policy, Security, Social, Startups, TC, The Boring Company, Transportation, tufts, Twitter, WannaCry | No Comments

Facebook spying on teens, Twitter accounts hijacked by terrorists, and sexual abuse imagery found on Bing and Giphy were amongst the ugly truths revealed by TechCrunch’s investigating reporting in 2019. The tech industry needs more watchdogs than ever as its size enlargens the impact of safety failures and the abuse of power. Whether through malice, naivety, or greed, there was plenty of wrongdoing to sniff out.

Led by our security expert Zack Whittaker, TechCrunch undertook more long-form investigations this year to tackle these growing issues. Our coverage of fundraises, product launches, and glamorous exits only tell half the story. As perhaps the biggest and longest running news outlet dedicated to startups (and the giants they become), we’re responsible for keeping these companies honest and pushing for a more ethical and transparent approach to technology.

If you have a tip potentially worthy of an investigation, contact TechCrunch at tips@techcrunch.com or by using our anonymous tip line’s form.

Image: Bryce Durbin/TechCrunch

Here are our top 10 investigations from 2019, and their impact:

Facebook pays teens to spy on their data

Josh Constine’s landmark investigation discovered that Facebook was paying teens and adults $20 in gift cards per month to install a VPN that sent Facebook all their sensitive mobile data for market research purposes. The laundry list of problems with Facebook Research included not informing 187,000 users the data would go to Facebook until they signed up for “Project Atlas”, not receiving proper parental consent for over 4300 minors, and threatening legal action if a user spoke publicly about the program. The program also abused Apple’s enterprise certificate program designed only for distribution of employee-only apps within companies to avoid the App Store review process.

The fallout was enormous. Lawmakers wrote angry letters to Facebook. TechCrunch soon discovered a similar market research program from Google called Screenwise Meter that the company promptly shut down. Apple punished both Google and Facebook by shutting down all their employee-only apps for a day, causing office disruptions since Facebookers couldn’t access their shuttle schedule or lunch menu. Facebook tried to claim the program was above board, but finally succumbed to the backlash and shut down Facebook Research and all paid data collection programs for users under 18. Most importantly, the investigation led Facebook to shut down its Onavo app, which offered a VPN but in reality sucked in tons of mobile usage data to figure out which competitors to copy. Onavo helped Facebook realize it should acquire messaging rival WhatsApp for $19 billion, and it’s now at the center of anti-trust investigations into the company. TechCrunch’s reporting weakened Facebook’s exploitative market surveillance, pitted tech’s giants against each other, and raised the bar for transparency and ethics in data collection.

Protecting The WannaCry Kill Switch

Zack Whittaker’s profile of the heroes who helped save the internet from the fast-spreading WannaCry ransomware reveals the precarious nature of cybersecurity. The gripping tale documenting Marcus Hutchins’ benevolent work establishing the WannaCry kill switch may have contributed to a judge’s decision to sentence him to just one year of supervised release instead of 10 years in prison for an unrelated charge of creating malware as a teenager.

The dangers of Elon Musk’s tunnel

TechCrunch contributor Mark Harris’ investigation discovered inadequate emergency exits and more problems with Elon Musk’s plan for his Boring Company to build a Washington D.C.-to-Baltimore tunnel. Consulting fire safety and tunnel engineering experts, Harris build a strong case for why state and local governments should be suspicious of technology disrupters cutting corners in public infrastructure.

Bing image search is full of child abuse

Josh Constine’s investigation exposed how Bing’s image search results both showed child sexual abuse imagery, but also suggested search terms to innocent users that would surface this illegal material. A tip led Constine to commission a report by anti-abuse startup AntiToxin (now L1ght), forcing Microsoft to commit to UK regulators that it would make significant changes to stop this from happening. However, a follow-up investigation by the New York Times citing TechCrunch’s report revealed Bing had made little progress.

Expelled despite exculpatory data

Zack Whittaker’s investigation surfaced contradictory evidence in a case of alleged grade tampering by Tufts student Tiffany Filler who was questionably expelled. The article casts significant doubt on the accusations, and that could help the student get a fair shot at future academic or professional endeavors.

Burned by an educational laptop

Natasha Lomas’ chronicle of troubles at educational computer hardware startup pi-top, including a device malfunction that injured a U.S. student. An internal email revealed the student had suffered a “a very nasty finger burn” from a pi-top 3 laptop designed to be disassembled. Reliability issues swelled and layoffs ensued. The report highlights how startups operating in the physical world, especially around sensitive populations like students, must make safety a top priority.

Giphy fails to block child abuse imagery

Sarah Perez and Zack Whittaker teamed up with child protection startup L1ght to expose Giphy’s negligence in blocking sexual abuse imagery. The report revealed how criminals used the site to share illegal imagery, which was then accidentally indexed by search engines. TechCrunch’s investigation demonstrated that it’s not just public tech giants who need to be more vigilant about their content.

Airbnb’s weakness on anti-discrimination

Megan Rose Dickey explored a botched case of discrimination policy enforcement by Airbnb when a blind and deaf traveler’s reservation was cancelled because they have a guide dog. Airbnb tried to just “educate” the host who was accused of discrimination instead of levying any real punishment until Dickey’s reporting pushed it to suspend them for a month. The investigation reveals the lengths Airbnb goes to in order to protect its money-generating hosts, and how policy problems could mar its IPO.

Expired emails let terrorists tweet propaganda

Zack Whittaker discovered that Islamic State propaganda was being spread through hijacked Twitter accounts. His investigation revealed that if the email address associated with a Twitter account expired, attackers could re-register it to gain access and then receive password resets sent from Twitter. The article revealed the savvy but not necessarily sophisticated ways terrorist groups are exploiting big tech’s security shortcomings, and identified a dangerous loophole for all sites to close.

Porn & gambling apps slip past Apple

Josh Constine found dozens of pornography and real-money gambling apps had broken Apple’s rules but avoided App Store review by abusing its enterprise certificate program — many based in China. The report revealed the weak and easily defrauded requirements to receive an enterprise certificate. Seven months later, Apple revealed a spike in porn and gambling app takedown requests from China. The investigation could push Apple to tighten its enterprise certificate policies, and proved the company has plenty of its own problems to handle despite CEO Tim Cook’s frequent jabs at the policies of other tech giants.

Bonus: HQ Trivia employees fired for trying to remove CEO

This Game Of Thrones-worthy tale was too intriguing to leave out, even if the impact was more of a warning to all startup executives. Josh Constine’s look inside gaming startup HQ Trivia revealed a saga of employee revolt in response to its CEO’s ineptitude and inaction as the company nose-dived. Employees who organized a petition to the board to remove the CEO were fired, leading to further talent departures and stagnation. The investigation served to remind startup executives that they are responsible to their employees, who can exert power through collective action or their exodus.

If you have a tip for Josh Constine, you can reach him via encrypted Signal or text at (585)750-5674, joshc at TechCrunch dot com, or through Twitter DMs

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Marijuana delivery giant Eaze may go up in smoke

Posted by | Apps, eaze, eCommerce, funding, Government, Logistics, marijuana, meadow, Mobile, payments, Recent Funding, Startups, TC, Transportation, weed delivery | No Comments

The first cannabis startup to raise big money in Silicon Valley is in danger of burning out. TechCrunch has learned that pot delivery middleman Eaze has seen unannounced layoffs, and its depleted cash reserves threaten its ability to make payroll or settle its AWS bill. Eaze was forced to raise a bridge round to keep the lights on as it prepares to attempt a major pivot to “touching the plant” by selling its own marijuana brands through its own depots.

TechCrunch spoke with nine sources with knowledge of Eaze’s struggles to piece together this report. If Eaze fails, it could highlight serious growing pains amid the “green rush” of startups into the marijuana business.

Eaze, the startup backed by some $166 million in funding that once positioned itself as the “Uber of pot” — a marketplace selling pot and other cannabis products from dispensaries and delivering it to customers — has recently closed a $15 million bridge round, according to multiple sources. The funding was meant to keep the lights on as Eaze struggles to raise its next round of funding amid problems with making decent margins on its current business model, lawsuits, payment processing issues and internal disorganization.

 

An Eaze spokesperson confirmed that the company is low on cash. Sources tell us that the company, which laid off some 30 people last summer, is preparing another round of cuts in the meantime. The spokesperson refused to discuss personnel issues, but noted that there have been layoffs at many late-stage startups as investors want to see companies cut costs and become more efficient.

From what we understand, Eaze is currently trying to raise a $35 million Series D round, according to its pitch deck. The $15 million bridge round came from unnamed current investors. (Previous backers of the company include 500 Startups, DCM Ventures, Slow Ventures, Great Oaks, FJ Labs, the Winklevoss brothers and a number of others.) Originally, Eaze had tried to raise a $50 million Series D, but the investor that was looking at the deal, Athos Capital, is said to have walked away at the eleventh hour.

Eaze is going into the fundraising with an enterprise value of $388 million, according to company documents reviewed by TechCrunch. It’s not clear what valuation it’s aiming for in the next round.

An Eaze spokesperson declined to discuss fundraising efforts, but told TechCrunch, “The company is going through a very important transition right now, moving to becoming a plant-touching company through acquisitions of former retail partners that will hopefully allow us to more efficiently run the business and continue to provide good service to customers.”

Desperate to grow margins

The news comes as Eaze is hoping to pull off a “verticalization” pivot, moving beyond online storefront and delivery of third-party products (rolled joints, flower, vaping products and edibles) and into sourcing, branding and dispensing the product directly. Instead of just moving other company’s marijuana brands between third-party dispensaries and customers, it wants to sell its own in-house brands through its own delivery depots to earn a higher margin. With a number of other cannabis companies struggling, the hope is that it will be able to acquire at low prices brands in areas like marijuana flower, pre-rolled joints, vaporizer cartridges or edibles.

An Eaze spokesperson confirmed that the company plans to announce the pivot in the coming days, telling TechCrunch that it’s “a pretty significant change from provider of services to operating in that fashion but also operating a depot directly ourselves.”

The startup is already making moves in this direction, and is in the process of acquiring some of the assets of a bankrupt cannabis business out of Canada called Dionymed — which had initially been a partner of Eaze’s, then became a competitor, and then sued it over payment disputes, before finally selling part of its business. These assets are said to include Oakland dispensary Hometown Heart, which it acquired in an all-share transaction (“Eaze effectively bought the lawsuit,” is how one source described the sale). This will become Eaze’s first owned delivery depot.

In a recent presentation deck that Eaze has been using when pitching to investors — which has been obtained by TechCrunch — the company describes itself as the largest direct-to-consumer cannabis retailer in California. It has completed more than 5 million deliveries, served 600,000 customers and tallied up an average transaction value of $85. 

To date, Eaze has only expanded to one other state beyond California (Oregon). Its aim is to add five more states this year, and another three in 2021. But the company appears to have expected more states to legalize recreational marijuana sooner, which would have provided geographic expansion. Eaze seems to have overextended itself too early in hopes of capturing market share as soon as it became available.

An employee at the company tells us that on a good day Eaze can bring in between $800,000 and $1 million in net revenue, which sounds great, except that this is total merchandise value, before any cuts to suppliers and others are made. Eaze makes only a fraction of that amount, one reason why it’s now looking to verticatlize into more of a primary role in the ecosystem. And that’s before considering all of the costs associated with running the business. 

Eaze is suffering from a problem rampant in the marijuana industry: a lack of working capital. Because banks often won’t issue working capital loans to weed-related business, deliverers like Eaze can experience delays in paying back vendors. Another source says late payments have pushed some brands to stop selling through Eaze.

Another drain on its finances has been its marketing efforts. A source said out-of-home ads (billboards and the like) allegedly were a significant expense at one point. It has to compete with other pot-purchasing options like visiting retail stores in person, using dispensaries’ in-house delivery services or buying via startups like Meadow that act as aggregated online points of sale for multiple dispensaries.

Indeed, Eaze claims that its pivot into verticalization will bring it $204 million in revenues on gross transactions of $300 million. It notes in the presentation that it makes $9.04 on an average sale of $85, which will go up to $18.31 if it successfully brings in “private label” products and has more depot control.

Selling weed isn’t eazy

The poor margins are only one of the problems with Eaze’s current business model, which the company admits in its presentation have led to an inconsistent customer experience and poor customer affinity with its brand — especially in the face of competition from a number of other delivery businesses.  

Playing on the on-demand, delivery-of-everything theme, it connected with two customer bases. First, existing cannabis consumers already using some form of delivery service for their supply; and a newer, more mainstream audience with disposable income that had become more interested in cannabis-related products but might feel less comfortable walking into a dispensary, or buying from a black market dealer.

It is not the only startup that has been chasing that audience. Other competitors in the wider market for cannabis discovery, distribution and sales include Weedmaps, Puffy, Blackbird, Chill (a brand from Dionymed that it founded after ending its earlier relationship with Eaze), and Meadow, with the wider industry estimated to be worth some $11.9 billion in 2018 and projected to grow to $63 billion by 2025.

Eaze was founded on the premise that the gradual decriminalization of pot — first making it legal to buy for medicinal use, and gradually for recreational use — would spread across the U.S. and make the consumption of cannabis-related products much more ubiquitous, presenting a big opportunity for Eaze and other startups like it. 

It found a willing audience among consumers, but also tech workers in the Bay Area, a tight market for recruitment. 

“I was excited for the opportunity to join the cannabis industry,” one source said. “It has for the most part gotten a bad rap, and I saw Eaze’s mission as a noble thing, and the team seemed like good people.”

Eaze CEO Ro Choy

That impression was not to last. The company, this employee was told when joining, had plenty of funding with more on the way. The newer funding never materialized, and as Eaze sought to figure out the best way forward, the company cycled through different ideas and leadership: former Yammer executive Keith McCarty, who co-founded the company with Roie Edery (both are now founders at another cannabis startup, Wayv), left, and the CEO role was given to another ex-Yammer executive, Jim Patterson, who was then replaced by Ro Choy, who is the current CEO. 

“I personally lost trust in the ability to execute on some of the vision once I got there,” the ex-employee said. “I thought that on one hand a picture was painted that wasn’t the truth. As we got closer and as I’d been there longer and we had issues with funding, the story around why we were having issues kept changing.” Several sources familiar with its business performance and culture referred to Eaze as a “shitshow.”

No ‘Push for Kush’

The quick shifts in strategy were a recurring pattern that started well before the company got into tight financial straits. 

One employee recalled an acquisition Eaze made several years ago of a startup called Push for Pizza. Founded by five young friends in Brooklyn, Push for Pizza had gone viral over a simple concept: you set up your favorite pizza order in the app, and when you want it, you pushed a single button to order it. (Does that sound silly? Don’t forget, this was also the era of Yo, which was either a low point for innovation, or a high point for cynicism when it came to average consumer intelligence… maybe both.)

Eaze’s idea, the employee said, was to take the basics of Push for Pizza and turn it into a weed app, Push for Kush. In it, customers could craft their favorite mix and, at the touch of a button, order it, lowering the procurement barrier even more.

The company was very excited about the deal and the prospect of the new app. They planned a big campaign to spread the word, and held an internal event to excite staff about the new app and business line. 

“They had even made a movie of some kind that they showed us, featuring a caricature of Jim” — the CEO at a the time — “hanging out of the sunroof of a limo.” (We found the opening segment of this video online, and the Twitter and Instagram accounts that had been created for Push for Kush, but no more than that.)

Then just one week later, the whole plan was scrapped, and the founders of Push for Pizza fired. “It was just brushed under the carpet,” the former employee said. “No one could get anything out of management about what had happened.”

Something had happened, though: The company had been taking payments by card when it made the acquisition, but the process was never stable and by then it had recently gone back to the cash-only model. Push for Kush by cash was less appealing. “They didn’t think it would work,” the person said, adding that this was the normal course of business at the startup. “Big initiatives would just die in favor of pushing out whatever new thing was on the product team’s radar.” 

Eaze’s spokesperson confirmed that “we did acquire Push for Pizza . . but ultimately didn’t choose to pursue [launching Push for Kush].”

Payments were a recurring issue for the startup. Eaze started out taking payments only in cash — but as the business grew, that became increasingly problematic. The company found itself kicked off the credit card networks and was stuck with a less traceable, more open to error (and theft) cash-only model at a time when one employee estimated it was bringing in between $800,000 and $1 million per day in sales. 

Eventually, it moved to cards, but not smoothly: Visa specifically did not want Eaze on its platform. Eaze found a workaround, employees say, but it was never above board, which became the subject of the lawsuit between Eaze and Dionymed. Currently the company appears to only take payments via debit cards, ACH transfer and cash, not credit card.

Another incident sheds light on how the company viewed and handled security issues. 

Can Eaze rise from the ashes?

At one point, employees allegedly discovered that Eaze was essentially storing all of its customer data — including users’ signatures and other personal information — in an Azure bucket that was not secured, meaning that if anyone was nosing around, it could be easily discovered and exploited.

The vulnerability was brought to the company’s attention. It was something that was up to product to fix, but the job was pushed down the list. It ultimately took seven months to patch this up. “I just kept seeing things with all these huge holes in them, just not ready for prime time,” one ex-employee said of the state of products. “No one was listening to engineers, and no one seemed to be looking for viable products.” Eaze’s spokesperson confirms a vulnerability was discovered but claims it was promptly resolved.

Today, the issue is a more pressing financial one: The company is running out of money. Employees have been told the company may not make its next payroll, and AWS will shut down its servers in two days if it doesn’t pay up. 

Eaze’s spokesperson tried to remain optimistic while admitting the dire situation the company faces. “Eaze is going to continue doing everything we can to support customers and the overall legal cannabis industry. We’re excited about the future and acknowledge the challenges that the entire community is facing.”

As medicinal and recreational marijuana access became legal in some states in the latter 2010s, entrepreneurs and investors flocked to the market. They saw an opportunity to capitalize on the end of a major prohibition — a once in a lifetime event. But high government taxes, enduring black markets, intense competition and a lack of financial infrastructure willing to deal with any legal haziness have caused major setbacks.

While the pot business might sound chill, operations like Eaze depend on coordinating high-stress logistics with thin margins and little room for error. Plenty of food delivery startups, from Sprig to Munchery, went under after running into similar struggles, and at least banks and payment processors would work with them. With the odds stacked against it, Eaze has a tough road ahead.

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Echodyne steers its high-tech radar beam on autonomous cars with EchoDrive

Posted by | artificial intelligence, automotive, autonomous vehicles, echodyne, Gadgets, hardware, radar, robotics, Transportation | No Comments

Echodyne set the radar industry on its ear when it debuted its pocket-sized yet hyper-capable radar unit for drones and aircraft. But these days all the action is in autonomous vehicles — so they reinvented their technology to make a unique sensor that doesn’t just see things but can communicate intelligently with the AI behind the wheel.

EchoDrive, the company’s new product, is aimed squarely at AVs, looking to complement lidar and cameras with automotive radar that’s as smart as you need it to be.

The chief innovation at Echodyne is the use of metamaterials, or highly engineered surfaces, to create a radar unit that can direct its beam quickly and efficiently anywhere in its field of view. That means that it can scan the whole horizon quickly, or repeatedly play the beam over a single object to collect more detail, or anything in between, or all three at once for that matter, with no moving parts and little power.

But the device Echodyne created for release in 2017 was intended for aerospace purposes, where radar is more widely used, and its capabilities were suited for that field: a range of kilometers but a slow refresh rate. That’s great for detecting and reacting to distant aircraft, but not at all what’s needed for autonomous vehicles, which are more concerned with painting a detailed picture of the scene within a hundred meters or so.

“They said they wanted high-resolution, automotive bands [i.e. radiation wavelengths], high refresh rates, wide field of view, and still have that beam-steering capability — can you build a radar like that?,” recalled Echodyne co-founder and CEO Eben Frankenberg. “And while it’s taken a little longer than I thought it would, the answer is yes, we can!”

The EchoDrive system meets all the requirements set out by the company’s automotive partners and testers, with up to 60hz refresh rates, higher resolution than any other automotive radar and all the other goodies.

An example of some raw data — note that Doppler information lets the system tell which objects are moving which direction.

The company is focused specifically on level 4-5 autonomy, meaning their radar isn’t intended for basic features like intelligent cruise control or collision detection. But radar units on cars today are intended for that, and efforts to juice them up into more serious sensors are dubious, Frankenberg said.

“Most ADAS [advanced driver assist system] radars have relatively low resolution in a raw sense, and do a whole lot of processing of the data to make it clearer and make it more accurate as far as the position of an object,” he explained. “The level 4-5 folks say, we don’t want all that processing because we don’t know what they’re doing. They want to know you’re not doing something in the processing that’s throwing away real information.”

More raw data, and less processing — but Echodyne’s tech offers something more. Because the device can change the target of its beam on the fly, it can do so in concert with the needs of the vehicle’s AI.

Say an autonomous vehicle’s brain has integrated the information from its suite of sensors and can’t be sure whether an object it sees a hundred meters out is a moving or stationary bicycle. It can’t tell its regular camera to get a better image, or its lidar to send more lasers. But it can tell Echodyne’s radar to focus its beam on that object for a bit longer or more frequently.

The two-way conversation between sensor and brain, which Echodyne calls cognitive radar or knowledge-aided measurement, isn’t really an option yet — but it will have to be if AVs are going to be as perceptive as we’d like them to be.

Some companies, Frankenberg pointed out, are putting on the sensors themselves the responsibility for deciding which objects or regions need more attention — a camera may very well be able to decide where to look next in some circumstances. But on the scale of a fraction of a second, and involving the other resources available to an AV — only the brain can do that.

EchoDrive is currently being tested by Echodyne’s partner companies, which it would not name but which Frankenberg indicated are running level 4+ AVs on public roads. Given the growing number of companies that fit those once-narrow criteria, it would be irresponsible to speculate on their identities, but it’s hard to imagine an automaker not getting excited by the advantages Echodyne claims.

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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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Ghost wants to retrofit your car so it can drive itself on highways in 2020

Posted by | Android, Argo AI, Automation, automotive, autonomous car, AV, california, controller, Emerging-Technologies, founders fund, Ghost Locomotion, gps, IBM, Keith Rabois, Khosla Ventures, Lyft, machine learning, Mike Speiser, National Highway Traffic Safety Administration, Pure Storage, robotics, self-driving cars, sutter hill ventures, TC, technology, Tesla, transport, Transportation, Uber, unmanned ground vehicles, waymo, zoox | No Comments

A new autonomous vehicle company is on the streets — and unbeknownst to most, has been since 2017. Unlike the majority in this burgeoning industry, this new entrant isn’t trying to launch a robotaxi service or sell a self-driving system to suppliers and automakers. It’s not aiming for autonomous delivery, either.

Ghost Locomotion, which emerged Thursday from stealth with $63.7 million in investment from Keith Rabois at Founders Fund, Vinod Khosla at Khosla Ventures and Mike Speiser at Sutter Hill Ventures, is targeting your vehicle.

Ghost is developing a kit that will allow privately owned passenger vehicles to drive autonomously on highways. And the company says it will deliver in 2020. A price has not been set, but the company says it will be less than what Tesla charges for its Autopilot package that includes “full self-driving” or FSD. FSD currently costs $7,000.

This kit isn’t going to give a vehicle a superior advanced driving assistance system. The kit will let human drivers hand control of their vehicle over to a computer, allowing them to do other activities such as look at their phone or even doze off.

The idea might sound similar to what Comma.ai is working on, Tesla hopes to achieve or even the early business model of Cruise. Ghost CEO and co-founder John Hayes says what they’re doing is different.

A different approach

The biggest players in the industry — companies like Waymo, Cruise, Zoox and Argo AI — are trying to solve a really hard problem, which is driving in urban areas, Hayes told TechCrunch in a recent interview.

“It didn’t seem like anyone was actually trying to solve driving on the highways,” said Hayes, who previously founded Pure Storage in 2009. “At the time, we were told that this is so easy that surely the automakers will solve this any day now. And that really hasn’t happened.”

Hayes noted that automakers have continued to make progress in advanced driver assistance systems. The more advanced versions of these systems provide what the SAE describes as Level 2 automation, which means two primary control functions are automated. Tesla’s Autopilot system is a good example of this; when engaged, it automatically steers and has traffic-aware cruise control, which maintains the car’s speed in relation to surrounding traffic. But like all Level 2 systems, the driver is still in the loop.

Ghost wants to take the human out of the loop when they’re driving on highways.

“We’re taking, in some ways, a classic startup attitude to this, which is ‘what is the simplest product that we can perfect, that will put self driving in the hands of ordinary consumers?’ ” Hayes said. “And so we take people’s existing cars and we make them self-driving cars.”

The kit

Ghost is tackling that challenge with software and hardware.

The kit involves hardware like sensors and a computer that is installed in the trunk and connected to the controller area network (CAN) of the vehicle. The CAN bus is essentially the nervous system of the car and allows various parts to communicate with each other.

Vehicles must have a CAN bus and electronic steering to be able to use the kit.

The camera sensors are distributed throughout the vehicle. Cameras are integrated into what looks like a license plate holder at the back of the vehicle, as well as another set that are embedded behind the rearview mirror.

A third device with cameras is attached to the frame around the window of the door (see below).

Initially, this kit will be an aftermarket product; the company is starting with the 20 most popular car brands and will expand from there.

Ghost intends to set up retail spaces where a car owner can see the product and have it installed. But eventually, Hayes said, he believes the kit will become part of the vehicle itself, much like GPS or satellite radio has evolved.

While hardware is the most visible piece of Ghost, the company’s 75 employees have dedicated much of their time on the driving algorithm. It’s here, Hayes says, where Ghost stands apart.

How Ghost is building a driver

Ghost is not testing its self-driving system on public roads, an approach nearly every other AV company has taken. There are 63 companies in California that have received permits from the Department of Motor Vehicles to test autonomous vehicle technology (always with a human safety driver behind the wheel) on public roads.

Ghost’s entire approach is based on an axiom that the human driver is fundamentally correct. It begins by collecting mass amounts of video data from kits that are installed on the cars of high-mileage drivers. Ghost then uses models to figure out what’s going on in the scene and combines that with other data, including how the person is driving by measuring the actions they take.

It doesn’t take long or much data to model ordinary driving, actions like staying in a lane, braking and changing lanes on a highway. But that doesn’t “solve” self-driving on highways because the hard part is how to build a driver that can handle the odd occurrences, such as swerving, or correct for those bad behaviors.

Ghost’s system uses machine learning to find more interesting scenarios in the reams of data it collects and builds training models based on them.

The company’s kits are already installed on the cars of high-mileage drivers like Uber and Lyft drivers and commuters. Ghost has recruited dozens of drivers and plans to have its kits in hundreds of cars by the end of the year. By next year, Hayes says the kits will be in thousands of cars, all for the purpose of collecting data.

The background of the executive team, including co-founder and CTO Volkmar Uhlig, as well as the rest of their employees, provides some hints as to how they’re approaching the software and its integration with hardware.

Employees are data scientists and engineers, not roboticists. A dive into their resumes on LinkedIn and not one comes from another autonomous vehicle company, which is unusual in this era of talent poaching.

For instance, Uhlig, who started his career at IBM Watson Research, co-founded Adello and was the architect behind the company’s programmatic media trading platform. Before that, he built Teza Technologies, a high-frequency trading platform. While earning his PhD in computer science he was part of a team that architected the L4 Pistachio microkernel, which is commercially deployed in more than 3 billion mobile Apple and Android devices.

If Ghost is able to validate its system — which Hayes says is baked into its entire approach — privately owned self-driving cars could be on the highways by next year. While the National Highway Traffic Safety Administration could potentially step in, Ghost’s approach, like Tesla, hits a sweet spot of non-regulation. It’s a space, that Hayes notes, where the government has not yet chosen to regulate.

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A bike lover’s take on the Cowboy e-bike

Posted by | Cowboy, e-bike, eletric bike, Europe, Gadgets, Startups, TC, Transportation | No Comments

Electric-bike maker Cowboy recently let me spend a couple of weeks with one of their e-bikes. It’s a well-designed e-bike that makes biking effortless, even if you’re going uphill.

Cowboy is a Brussels-based startup. The company raised a $3 million seed round a couple of years ago and an $11.1 million (€10 million) Series A round last year.

The company designs e-bikes from scratch. Components feel more integrated than in a normal e-bike. And it also opens up some possibilities when it comes to connectivity and smart features.

Cowboy sells its bikes directly to consumers on its online store. It is currently available in Belgium, France, Germany, the Netherlands and Austria for €2,000 ($2,220).

I rode 70 kilometers (43 miles) in the streets of Paris to try it out. For context, riding a bike in Paris is nothing new for me. I primarily use my non-electric bike to go from point A to point B — bikes are commuting devices for me. And given that Cowboy is primarily designed for densely populated cities, I thought I’d give it a try.

Cowboy 5

From the outside, the Cowboy e-bike is a sleek bike. It features a seamless triangle-shaped aluminum frame, integrated lights and a low-key Cowboy logo near the saddle. The handlebar is perfectly straight like on a mountain bike. The only sign that this is an e-bike is that the frame is much larger below the saddle.

The e-bike is relatively light at 16 kg (35 lbs). Most of the weight is at the back of the Cowboy e-bike because of the battery. But an investor in the startup told me that it wasn’t a problem and that he was even able to attach a baby seat at the back.

There are two things you’re going to notice quite quickly: there are no gears and there’s a rubber and fiberglass belt. Cowboy has opted for an automatic transmission — motor assistance kicks in automatically when you need it the most, such as when you start pedaling, accelerate or go uphill.

Cowboy 4

If you usually ride on a normal bike, this feels weird at first. I constantly shift from one gear to another. With the Cowboy e-bike, you have to trust the bike and forget about gears.

The electric motor kicks in a second after you start pedaling. It means that you are much faster than people using regular bikes. And you can reach a speed of 30 to 35 kmph in no time (18 to 22 mph). Yes, this bike is fast.

Fortunately, the brakes work surprisingly well. You have to be careful with them. If you’re braking too hard, you’ll skid, especially if it’s raining.

I was able to ride from one end of Paris to another without breaking a sweat. Sure, the Cowboy e-bike is fast, but I only saved a few minutes compared to my non-electric bike. You still spend a lot of time waiting at big intersections.

In fact, riding the Cowboy e-bike felt more like riding a moped-style scooter. You start your engine at a green light, ride as quickly as possible, brake aggressively at a red light and spend more time waiting at intersections. I believe an e-bike makes more sense in larger cities with huge hills. Paris is much, much smaller than London or Berlin, after all.

Cowboy 6

You may have noticed that the Cowboy e-bike doesn’t have fenders. Cowboy will start selling custom-designed fenders for €89 in a few weeks ($100).

Another thing worth noting is that you have to be relatively tall to use the Cowboy e-bike. I’m 1.75 m tall (5’ 8”) and I lowered the saddle as much as possible. If you’re just a tiny bit smaller than me, chances are it’s going to be too high for you. Similarly, naming your brand “Cowboy” doesn’t make your bike particularly attractive for women.

Cowboy 2

When it comes to connectivity, the Cowboy e-bike isn’t just an electric bike — it’s also a smart bike. It has built-in GPS tracking and an integrated SIM card.

After pairing the bike with your phone using Bluetooth, you can control it from a mobile app. In particular, you can lock and unlock the bike, turn on and off the lights and check the battery. It would have been nice to put a light sensor on the bike itself as you may forget to turn on the lights at night. You also can get a rough idea of the current battery level without the mobile app — there are five LEDs on the frame of the device.

Thanks to GPS capabilities and the integrated SIM card, you can locate your bike using a feature called “Find my Bike.” The company also sells insurance packages for €8 to €10 per month with theft insurance and optionally damage insurance.

Cowboy 10 1

I recharged the battery once during my testing. According to the company, you can get up to 70 km on a single charge (43 miles). I got less than that, but I also tried the off-road mode, which consumes more battery. Unless you’re going on a long bike trip, range isn’t an issue for city rides.

When it’s time to recharge the battery, you can detach the battery with a key and bring it back home. This is a great feature for people living in apartments, as you can leave your bike at its normal parking spot and plug in the battery at home. The battery was full after three to four hours.

Cowboy 11

Cowboy battery charger; tomato for scale

Overall, the Cowboy e-bike is the perfect commuting bike for people living in large cities. It’s a smooth and well-designed experience. If you’re looking for an e-bike, you should definitely consider the Cowboy e-bike as one of your options. I recommend you book a test ride before buying one though.

If you’re happy with a normal bike like me, the Cowboy e-bike is 100% an e-bike. Don’t expect to get the same experience on a Cowboy e-bike. It’s a completely different thing. But I’m glad e-bikes exist, because they are going to convince more people to ditch their cars and moped-style scooters.

Cowboy 1

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Unagi is the iPhone of scooters you actually buy

Posted by | Billie Eilish, Boosted Boards, David Hyman, funding, Fundings & Exits, Gadgets, hardware, menlo ventures, micromobility, Ninebot, Recent Funding, Scooters, Startups, TC, Transportation, unagi | No Comments

Can you never find a scooter to rent when you need one? Here’s a radical idea. Buy one. While Bird, Lime, Skip, Scoot, Uber, Lyft and more compete for on-demand micromobility, a new startup invented a vehicle worthy of ownership. The Unagi looks downright futuristic with its classy paint jobs, foldable body, LED screen and built-in lights. The ride feels sturdy, strong and responsive while being light enough at 24 lbs to lug up subway stairs or the flights to your home.

That’s why Unagi has become a hit with musicians like Kendrick Lamar, Chance the Rapper, Halsey, Steve Aoki and teen pop megastar Billie Eilish, who use the scooter to rip around the empty venues as they soundcheck before concerts. Paparazzi shots of those moments have spurred demand for the $990 dual-motor and $840 single-motor Unagis, with co-founder David Hyman telling me the startup can’t make them fast enough, but it’s ramping up production.

Unagi Scooter

To fuel the fervor for the scooter before it’s inevitably copied by cheap knock-offs, Unagi has raised a $3.15 million seed round led by Menlo Ventures . Building on its $750,000 in Kickstarter, angel and founder-contributed funding, the cash will go to building out a distribution network and developing its next-gen scooter with a smoother ride but no more pounds.

“We felt Unagi’s focus on light weight and substantial powering in a beautifully designed package was the right approach for ownership,” Menlo partner Shawn Carolan tells me. “This is what premium brands do — continue to reinvent the way we think about the world. This category of vehicle — personal, portable and electric — has enormous potential and we are still in the first inning of the game.”

The magic of the Unagi Model One is how it balances speed, battery, weight, price and style so it works for most anything and everyone. That combination won it CNET‘s best all-around scooter award versus the hardcore but extremely heavy Boosted Rev, cheap but weak Swagtron, long-lasting but boring Ninebot and speedy but scary Mercane.

The Unagi’s biggest flaw is the smoothness of the ride due to its harder airless wheels and narrow handlebars that can make gravelly roads precarious. The high-pitched beeeeeep of its horn is also so annoying that people are more likely to cover their ears than get out of your way, but Hyman promises his 12-person team will fix that.

Unagi Handlebars

Where Unagi truly excels is in its looks. The lithe curves of its polished carbon fiber frame are accented with candy paint jobs in matte black, white, grey and blue. It ditches the bike handlebar vibe for something closer to Space Shuttle controls. And while many people scoff at scooter riders, I saw those smirks turn into curious awe as I flew by.

Unagi Scooter Weight 1Hyman got the idea for a premium scooter you own after a rental turned into a melty mess. He’d taken an on-demand scooter to the grocer on a hot day, picked up some ice cream, and emerged to find his ride snatched by another user. He hustled to another nearby but someone else got there first. He walked home dripping sugar everywhere wondering, “Why am I messing around with rentals, I just want to own one?”

He bought a generic scooter off Alibaba, and despite being janky straight out of the box, “it made me feel like I was a super hero with this magic carpet.” But he wanted something better.

Previously the CEO of audio fingerprinting giant Gracenote, and then Beats Music before it sold to Apple, Hyman is known for his obsession with hi-fi speaker systems. So after touring Chinese scooter factories and still being unsatisfied, he partnered with a group of inventors called QMY who’d prototyped a slick vehicle they called the Swan. Hyman funded it to production, brought the team in house, and now they’re selling Unagis as fast as they can.

Now the startup wants to double-down on selling to more petite riders who could never carry the 46-lb Boosted Rev out of a train station. But the clock is ticking before copycats with similar silhouettes but inferior insides spring up. Meanwhile, Unagi must keep safety top-of-mind to avoid any disastrous crashes hurting customers and its brand. There are plenty of better-funded mobility giants that could barge into the space if Unagi can’t build a lead. It also has to prove why the reliability of ownership is worth the price of renting a scooter hundreds of times.

Unagi Scooter Blue 5

Scooters are part of a powerful wave of new technologies that actually sell us back our time. When a 20-minute walk becomes a four-minute scoot, you gain something priceless. Urban landscapes unfold beneath their wheels as you explore new neighborhoods or parts of parks. I was once a diehard electric skateboarder until a crash on a Boosted Board shattered my ankle. Unagi is the first scooter that delivers that same gliding feeling of weightlessness and freedom but in a form-factor safe enough for most people to experience.

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Google Assistant, navigation and apps coming to GM vehicles starting in 2021

Posted by | Android, automotive, automotive industry, Chevrolet, connected car, General-Motors, Google, Google Play Store, onstar, smart home devices, Transportation, voice assistant | No Comments

GM is turning to Google to provide in-vehicle voice, navigation and other apps in its Buick, Cadillac, Chevrolet and GMC vehicles starting in 2021.

GM began shipping vehicles with Google Android Automotive OS in 2017, starting with the Cadillac CTS and expanding to other brands. Android Automotive OS shouldn’t be confused with Android Auto, which is a secondary interface that lies on top of an operating system. Android Automotive OS is modeled after its open-source mobile operating system that runs on Linux. But instead of running smartphones and tablets, Google modified it so it could be used in cars.

Now, GM is taking the additional step of embedding the Google services that so many people already use through their phones and smart speakers. GM was convinced by its own customer research to bring Google into its cars, Santiago Chamorro, GM’s vice president for global connected customer experience, told TechCrunch.

Google voice, navigation and apps found in the Google Play Store will be in compatible GM brands starting in 2021. Broad deployment across all GM brands is expected to occur in the years following.

Future GM infotainments, powered by Android, will have a built-in Google Assistant that drivers can use to make calls, text, play a radio station, change the climate in the car or close the garage door, if they have the requisite connected smart home device. The Google Assistant integration will continue to evolve over time, so that drivers in the future will be able to simply use their voice to engage with their vehicle, which could include renewing their OnStar or Connected Services plans, checking their tire pressure or, scheduling service, according to GM and Google.

Google Maps will also be embedded in the vehicle to help drivers navigate with real-time traffic information, automatic re-routing and lane guidance. Google Assistant is tied into maps, allowing drivers to use voice to
navigate home, share their ETA or find the nearest gas station and EV charging stations.

The infotainment system will include in-vehicle apps from the Google Pay store.

GM isn’t ditching all of its own features for Google, Chamorro said, adding that the automaker will continue to offer its own infotainment features such as service recommendations, vehicle health status, in-vehicle commerce and more, with the Google applications and services complementing their offerings.

In May, Google announced that it was opening its Android Automotive operating system to third-party developers to bring music and other entertainment apps into vehicle infotainment systems. Media app developers are now able to create new entertainment experiences for Android Automotive OS.

Google has been pushing its way into the automotive world, first through Android Auto and then with its operating system, for several years now.

In 2017, Volvo announced plans to incorporate into its car infotainment systems a version of its Android operating system. A year later, the company said it would embed voice-controlled Google Assistant, Google  Play Store, Google Maps and other Google services into its next-generation Sensus infotainment system.

Polestar 2, an all-electric vehicle developed by Volvo’s standalone electric performance brand, also has the Android OS. Renault-Nissan-Mitsubishi Alliance and Fiat Chrysler Automobiles also announced plans for Android Automotive OS.

“Cars are quickly transforming and opening up a lot of opportunity,” Patrick Brady, vice president of engineering at Google, said in a recent interview. “It’s the beautiful thing about having a platform like this. There are services that we might not be thinking about today and that may be here tomorrow.”

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Cowboy recruits Sunrise co-founder Jeremy Le Van as VP of Product

Posted by | Bike, Cowboy, e-bike, Europe, Gadgets, Jeremy Le Van, Mobile, Personnel, Startups, Transportation | No Comments

Electric-bike maker Cowboy has recruited a well-known name when it comes to mobile app design. Jeremy Le Van co-founded Sunrise, a well-designed calendar app that was acquired by Microsoft back in 2015. Le Van will become VP of Product and lead the development of Cowboy’s mobile app.

Following Sunrise’s acquisition, Le Van worked for Microsoft. Sunrise has been the foundation for the calendar feature of the Outlook mobile app.

“I am incredibly excited to join the Cowboy team and bring my insights into how we can transform the smart bicycle market to make it more appealing to the mobile-first generation,” he said in a statement.

Of course, Cowboy is a hardware company, as it designs and sells an e-bike. The company wants to make e-bikes more efficient. It features an automatic transmission — motor assistance kicks in automatically when you need it the most, such as when you start pedaling, you accelerate or you go uphill.

Cowboy bikes also feature integrated lights (with a rear light that flashes when you break), a rubber and glass fiber belt and a removable battery. Like VanMoof bikes, it has built-in GPS tracking and an integrated SIM card — you unlock the bike with your phone.

But the mobile app is also an essential part of the experience. You can configure the lights, check the battery and get stats from the app. Let’s see how it evolves with today’s appointment.

Cowboy is currently available in Belgium, France, Germany, the Netherlands and Austria. The startup has raised a €10 million Series A funding round from Tiger Global, Index Ventures, Hardware Club and others.

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