Building a great startup requires more than genius and a great invention

Many entrepreneurs assume that an invention carries intrinsic value, but that assumption is a fallacy.

Many entrepreneurs assume that an invention carries intrinsic value, but that assumption is a fallacy.

Here, the examples of the 19th and 20th century inventors Thomas Edison and Nikola Tesla are instructive. Even as aspiring entrepreneurs and inventors lionize Edison for his myriad inventions and business acumen, they conveniently fail to recognize Tesla, despite having far greater contributions to how we generate, move, and harness power. Edison is the exception, with the legendary penniless Tesla as the norm.

Universities are the epicenter of pure innovation research. But the reality is that academic research is supported by tax dollars. The zero-sum game of attracting government funding is mastered by selling two concepts: Technical merit, and and broader impact toward benefiting society as a whole. These concepts are usually at odds with building a company, which succeeds only by generating and maintaining competitive advantage through barriers to entry.

In rare cases, the transition from intellectual merit to barrier to entry is successful. In most cases, the technology, though cool, doesn’t give the a fledgling company the competitive advantage it needs to exist among incumbents, and inevitable copycats. Academics, having emphasized technical merit and broader impact to attract support for their research, often fail to solve for competitive advantage, thereby creating great technology in search for a business application.

Of course there are exceptions: Time and time again, whether it’s driven by hype or perceived existential threat, big incumbents will be quick to buy companies purely for technology.  Cruise/GM (autonomous cars), DeepMind/Google (AI), and Nervana/Intel (AI chips). But as we move from 0-1 to 1-N in a given field, success is determined by winning talent over winning technology. Technology becomes less interesting; the onus on the startup to build a real business.

If a startup chooses to take venture capital, it not only needs to build a real business, but one that will be valued in the billions. the question becomes how a startup can create durable, attractive business, with a transient, short-lived technological advantage.

Most investors understand this stark reality. Unfortunately, while dabbling in technologies which appeared like magic to them during the cleantech boom, many investors were lured back into the innovation fallacy, believing that pure technological advancement would equal value creation. Many of them re-learned this lesson the hard way. As frontier technologies are attracting broader attention, I believe many are falling back into the innovation trap.

So what should aspiring frontier inventors solve for as they seek to invest capital to translate pure discovery to building billion-dollar companies?  How can the technology be cast into an unfair advantage that will yield big margins and growth that underpin billion-dollar businesses?

Talent productivity: In this age of automation, human talent is scarce, and there is incredible value attributed to retaining and maximizing human creativity.  Leading companies seek to gain an advantage by attracting the very best talent. If your technology can help you make more scarce talent more productive, or help your customers become more productive, then you are creating an unfair advantage internally, while establishing yourself as the de facto product for your customers.

Great companies such as Tesla and Google have built tools for their own scarce talent, and build products their customers, in their own ways, can’t do without. Microsoft mastered this with its Office products in the 90s, through innovation and acquisition, Autodesk with its creativity tools, and Amazon with its AWS Suite. Supercharging talent yields one of the most valuable sources of competitive advantage: switchover cost.  When teams are empowered with tools they love, they will loathe the notion of migrating to shiny new objects, and stick to what helps them achieve their maximum potential.

Marketing and Distribution Efficiency: Companies are worth the markets they serve.  They are valued for their audience and reach.  Even if their products in of themselves don’t unlock the entire value of the market they serve, they will be valued for their potential to, at some point in the future, be able to sell to the customers that have been tee’d up with their brands. AOL leveraged cheap CD-ROMs and the postal system to get families online, and on email.

Dollar Shave Club leveraged social media and an otherwise abandoned demographic to lock down a sales channel that was ultimately valued at a billion dollars. The inventions in these examples were in how efficiently these companies built and accessed markets, which ultimately made them incredibly valuable.

Network effects: Its power has ultimately led to its abuse in startup fundraising pitches. LinkedIn, Facebook, Twitter, and Instagram generate their network effects through Internet and Mobile. Most marketplace companies need to undergo the arduous, expensive process of attracting vendors and customers.  Uber identified macro trends (e.g., urban living) and leveraged technology (GPS in cheap smartphones) to yield massive growth in building up supply (drivers) and demand (riders).

Our portfolio company Zoox will benefit from every car benefitting from edge cases every vehicle encounters: akin to the driving population immediately learning from special situations any individual driver encounters. Startups should think about how their inventions can enable network effects where none existed, so that they are able to achieve massive scale and barriers by the time competitors inevitably get access to the same technology.

Offering an end-to-end solution: There isn’t intrinsic value in a piece of technology; it’s offering a complete solution that delivers on an unmet need deep-pocketed customers are begging for. Does your invention, when coupled to a few other products, yield a solution that’s worth far more than the sum of its parts? For example, are you selling a chip, along with design environments, sample neural network frameworks, and datasets, that will empower your customers to deliver magical products? Or, in contrast, does it make more sense to offer standard chips, licensing software, or tag data?

If the answer is to offer components of the solution, then prepare to enter a commodity, margin-eroding, race-to-the-bottom business. The former, “vertical” approach is characteristic of more nascent technologies, such as operating robots-taxis, quantum computing, and launching small payloads into space. As the technology matures and becomes more modular, vendors can sell standard components into standard supply chains, but face the pressure of commoditization.

A simple example is Personal Computers, where Intel and Microsoft attracted outsized margins while other vendors of disk drives, motherboards, printers, and memory faced crushing downward pricing pressure.  As technology matures, the earlier vertical players must differentiate with their brands, reach to customers, and differentiated product, while leveraging what’s likely going to be an endless number of vendors providing technology into their supply chains.

A magical new technology does not go far beyond the resumes of the founding team.

What gets me excited is how the team will leverage the innovation, and attract more amazing people to establish a dominant position in a market that doesn’t yet exist. Is this team and technology the kernel of a virtuous cycle that will punch above its weight to attract more money, more talent, and be recognized for more than it’s product?

KZen raises $4 million to bring sanity to crypto wallets

KZen, a company run by former TC editor Ouriel Ohayon, has raised $4 million in seed to build a “better wallet,” obviously the elusive Holy Grail in the crypto world. Benson Oak Ventures, Samsung Next, Elron Ventures invested. Ohayon, who has worked at Internet Lab and founded TechCrunch France and Appsfire, wanted to create an […]

KZen, a company run by former TC editor Ouriel Ohayon, has raised $4 million in seed to build a “better wallet,” obviously the elusive Holy Grail in the crypto world.

Benson Oak Ventures, Samsung Next, Elron Ventures invested.

Ohayon, who has worked at Internet Lab and founded TechCrunch France and Appsfire, wanted to create an easy-to-use crypto wallet that wouldn’t confound users. The company name is a play on the Japanese word kaizen or improvement and it also points to the idea of the zero-knowledge proof.

Omer Shlomovits, Tal Be’ery, and Gary Benattar are deep crypto researchers and developers and helped build the wallet of Ohayon’s dreams.

“We wanted something that did not feel like a pre-AOL experience, that was incredibly superior in terms of security, and simple to use,” he said. “We wanted a solution that brings peace of mind and that did not force the user into compromising between convenience and security which is, unfortunately, the current state of affairs. We quickly realized that this mission would not be possible to achieve with the same tools and ideas other companies tried to use so far.”

The app is launching this month and is being kept under wraps until then. Ohayon is well aware that the world doesn’t need another crypto wallet but he’s convinced his solution is the best one.

“The market does not lack solutions,” he said. “On the contrary, there are software wallets, hardware wallets, paper wallets, vaults, hosted custody. But there is no great solution. To be able to use a crypto wallet you either need a good dose of Xanax or a master’s degree in computer science or both, unless you want to depend on a central entity, which is even worse as the news are reminding us weekly.”

We’ll see as they use the cash to launch a crypto wallet that anyone – not just Xanax-eaters – can use.

Here are the companies that pitched in Startup Battlefield MENA

Today in lovely Beirut, Lebanon TechCrunch held its first Startup Battlefield in the country. Over 700 people watched the show on site, which featured speakers from throughout the Middle East and 15 startups competing in Startup Battlefield. A winner will be chosen at the end of the day and they will walk away with a […]

Today in lovely Beirut, Lebanon TechCrunch held its first Startup Battlefield in the country. Over 700 people watched the show on site, which featured speakers from throughout the Middle East and 15 startups competing in Startup Battlefield.

A winner will be chosen at the end of the day and they will walk away with a $25,000 prize. As of this post’s publication, a winner has not been picked.

What follows, is each company’s Startup Battlefield pitch in the order that they appeared on stage.

[Please note: Videos will be added to this list as they become available]

Startup Battlefield Competition – Flight #1

BuildInk

Real estate construction firms nowadays are struggling to keep up with the fast-moving pace of technological advancements in order to fulfill the market constantly changing demands. Buildink is offering a revolutionary solution for construction firms, via a scalable and mobile friendly Cable Robot Concrete 3D printer and Signature Concrete Mixture. Concrete 3D printing will not only open the space for unlimited architectural designs, it will also reduce the overall construction cost.

Harmonica

Harmonics is the leading marriage making app in MENA that not only match singles but also help them build healthy relationships. Launched in Cairo with a unique matching algorithm of one match at a time, powered by a strong team of phycologists, managed to reach a 100,000 user base in only few months.

Material Solved

MaterialSolved is a data visualization software for chemical/nano compounds. MaterialSolved helps scientists and scientific illustrators create complex scientific 3D models, static illustrations, and animations in an efficient way. Unlike general purpose graphics and visualization software, we use a new model that merges several algorithms to achieve significant time and cost reduction and make many visual representations possible.

MoneyFellows

MoneyFellows enables access to interest free credit and helps savers to easily reach their saving goals. We do this by digitizing the traditional ROSCA model (Rotating Savings and Credit Association).
How it works:
1- Group of people joins together to contribute a fixed monthly installment into a common pot.
2- Every month one of the users takes the whole pot as a payout.
3- Circle ends when all circle participants gets his/her payout once.
4- Circle is then usually repeated with the same group of people over again.”

Neotic AI

Neotic.ai created auto-traders for financial markets, giving the opportunity for everyone to use advanced technology to get higher returns on their savings. In other words, Neotic users can find ready to use, plug and play, live tested, AI powered trading strategies and deploy them directly on the broker account without writing any single line of code.

Startup Battlefield Competition – Flight #2

Naturansa

Naturansa produces high-quality protein from edible insect grown through pre-consumer food waste decomposition. We have built scalable technology that produces insect year-round which then get converted into a protein powder. We currently use our product in pet food market, but our target is to move into human consumption and solve major environmental problems that are present in current protein production.

IT Grapes

IT Grapes is a precision farming platform composed by an internally developed hardware for smart monitoring of environmental data and control of in-field equipment, combined with an online hub that gives access to federated data for selected actors of the agricultural sector in order to help farmers, taking the right decisions and improve the decentralized intelligence included in the in-field devices.

IN2

IN2 is a sports and activities platform that aims to streamline the activity organization process. Whether it’s fitness, sports, music, or other activities, IN2 makes planning and participating in activities a much more enjoyable experience. It does that by empowering businesses & organizers with management tools and connecting them to the relevant stakeholders

Seez

Seez is a mobile app that reduces the time people spend searching for a car from 17 hours down to a few seconds. By fully automating your search, seez uses its AI chatbot, Cesar, to scan all sites, identify the seller, and even negotiate the price down for you. This way you will see all cars for sale in your country and the final price of each car.

Autotell

AUTOTELL is revamping driving experience, Our aim is to give you the right advice at the right moment, helping you reduce consumption, get the maximum return out of your car by providing you with the remote monitoring, detecting faults on road, have an access to an automotive Eco-system and getting instant advice whenever needed through AI personal assistant 24/7.

We’re kicking off Startup Battlefield MENA, here are the startups and agenda

We’re kicking off Startup Battlefield MENA here in Beirut, where 15 startups will be taking the stage, along with speakers from Facebook (our partner on the event through its FB Start program), Instabug, Eventus, Wuzzuf, Careem and Myki. For those of you who can’t be here in person, check back on TechCrunch later today, where […]

We’re kicking off Startup Battlefield MENA here in Beirut, where 15 startups will be taking the stage, along with speakers from Facebook (our partner on the event through its FB Start program), Instabug, Eventus, Wuzzuf, Careem and Myki.

For those of you who can’t be here in person, check back on TechCrunch later today, where we’ll be sharing videos and other highlights from the event. And of course, announcing the winner!

For the first time, TechCrunch is holding Startup Battlefield MENA in partnership with FB Start. After scouring does dozens of countries, sifting through hundreds and hundreds of extremely talented startups, TechCrunch selected 15 elite companies across the region to compete in prestigious global Startup Battlefield competition for $25,000 equity-free prize, a trip for 2 to TechCrunch Disrupt San Francisco 2019 and the coveted title of “Middle East & North Africa’s Favorite Startup”.

After weeks of intense coaching from the TC team, these startups are primed for international launch. For the semi-final round, each founder will pitch for 6 minutes, with a live demo on stage, followed by 6 minutes of Q&A with our expert panel of judges. After, our judges will deliberate and 5 teams will be selected to compete in the final round of Startup Battlefield – same pitch, but with an even more intense Q&A.

So, who are these chosen few? From creating new forms of fast setting concrete to quickly build houses in areas recovering from natural disasters to agricultural monitoring technology preventing water-related conflict, this batch of companies is truly changing the world. Companies also include financial investment AI platforms, edible insect based protein powder, to culturally relevant dating apps. Founders in the automotive industry are poised to change everything from how we pick the cars we want to buy to how we optimize their maintenance. From innovations to hydroponic gardens, educational tutoring platforms to modernizing technology for hotel chains, Startup Battlefield MENA is set to highlight the regions most promising startups. Videos from the event will be posted on TechCrunch.com after the event. Stay tuned!

Session 1: 9:30am – 10:30am

BuildinkHarmonicaMaterialSolvedMoneyFellowsNeotic AI

Session 2: 11:10am – 12:10am

NaturansaSeabex by IT GrapesIN2SeezAutotell 

Session 3: 1:40pm – 2:40pm

SynkersVerboseMakerbraneArgineeringPureHarvest


Welcome Remarks
9:05 am – 9:25 am

Infrastructure and Connectivity: A Regional Perspective with Imad Kreidieh (Ogero Telecom) and Ari Kesisoglu (Facebook)
Access to the internet and connectivity is the driving force for the 4th industrial revolution. Join a conversation about how the Telco industry is changing in Lebanon and the region, and what that means for businesses and consumers. Sponsored by Facebook

9:25 am – 10:30 am

Startup Battlefield Competition – Flight #1
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

10:30 am – 10:50 am

BREAK
10:50 am – 11:10 am

Jennifer Fong (Facebook)
Hear from Facebook’s head of the Developer Circles Program about their work with developers, startups and businesses to build, grow, measure, and monetize using Facebook and Messenger platform products. Sponsored by Facebook

11:10 am – 12:10 am

Startup Battlefield Competition – Flight #2
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

12:10 pm – 1:10 pm

BREAK
12:15 pm – 1:15 pm

Workshop: Automated Driving Mobility in MENA with Mandali Khalesi (Toyota)
Toyota’s Global Head of Automated Driving Mobility and Innovation will share Toyota’s latest automated driving research findings and its plans for the future. There will be 30 minutes set aside for consultation, where the audience will have the opportunity to advise Toyota on both how it should go about developing automated driving mobility for MENA, as well as how best to work together with entrepreneurs in the region.

1:15 pm – 1:40 pm

Lessons 10 Years On with Omar Gabr (Instabug), Nour Al Hassan (Tarjama), Mai Medhat (Eventtus) and Ameer Sherif (Wuzzuf) – Moderated by Editor at Large Mike Butcher
Ten years ago the Middle East and North Africa’s tech ecosystem was worth perhaps tens of millions of dollars. Today it’s in the hundreds of millions, and beyond. A decade ago the societal landscape was very different from today. Let’s discuss the huge changes that have happened and challenges and opportunities ahead.

1:40 pm – 2:40 pm

Startup Battlefield Competition – Flight #3
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

2:40 pm – 3:00 pm

Fireside Chat with Magnus Olsson (Careem) – Moderated by Managing Editor Matt Burns
How do you scale a big startup in MENA? We hear from Magnus Olsson, founder and Managing Director of ride-hailing giant Careem on how they joined the unicorn club with Lyft and Uber.

3:00 pm – 3:25 pm

Where Will the Exits Come From with Henri Asseliy (Leap Ventures), Priscilla Elora Sharuk (Myki), and Kenza Lahlou (Outlierz Ventures) – Moderated by News Editor Ingrid Lunden
Both VCs and startups in MENA alike are furiously building the companies of the future. But you can’t have a startup without an acquisition or IPO, so where are they going to come from? We’ll hear from both the founder and investor perspectives.

3:25 pm – 4:40 pm

Startup Battlefield Competition – Final Round
TechCrunch’s iconic startup competition is here and for the first time in MENA, as entrepreneurs from around the region pitch expert judges and vie for US$25,000 no-equity cash prize and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019.

4:40 pm – 4:55 pm

BREAK
4:55 pm – 5:20 pm

MENA Content Plays with Paul Chucrallah (BeryTech Fund), Hussam Hammo (Tamatem) and Rami Al Qawasmi (Mawdoo3) – Moderated by News Editor Ingrid Lunden
A little-known fact about the MENA market is the sheer lack of Arabic language content online for consumers, whether it be media, music, games or events. Arabic-specific sites have appeared, tailor-made to the market. We’ll get the perspective of key entrepreneurs in this space.

5:20 pm – 5:35 pm

Startup Battlefield Closing Awards Ceremony
Watch the crowning of the latest winner of the Startup Battlefield

Tech In Asia lays off staff after canceling planned ICO

Earlier this month, media startup Tech In Asia surprised its readers when it announced plans to implement an $18 per month paywall. More expensive than packages for the Bloomberg and the Wall Street Journal, the subscription went live this week. It’s designed to make the business self-sustaining after a tricky period of business in which […]

Earlier this month, media startup Tech In Asia surprised its readers when it announced plans to implement an $18 per month paywall. More expensive than packages for the Bloomberg and the Wall Street Journal, the subscription went live this week. It’s designed to make the business self-sustaining after a tricky period of business in which the company contemplated an ICO and was forced to make cutbacks to its team.

The Singapore-based company — which operates a popular blog and events business in Southeast Asia — laid off as many as one-third of its staff after it went back on a plan to raise money from an ICO, according to documents reviewed by TechCrunch and multiple people familiar with the situation.

In July, as the company scrapped its ICO plans, Tech In Asia fired 18 of its 60 employees in Singapore; one-third of its smaller employee base in Indonesia and restructured other business units after scrapping the plan to develop its own cryptocurrency. Most of the layoffs were in non-editorial business lines — like the company’s jobs division, which works with companies to pitch the Tech In Asia website as a recruitment platform. That division laid off half of its team, according to a source, while a number of reporters elected to leave the company too, as E27 reported in August.

Tech In Asia founder and CEO Willis Wee did not respond to multiple requests for comment.

While the fundraising target for the ICO wasn’t disclosed, the plan was to bring in enough new investment to extend the company’s eroding runway.

The ICO was part of ‘Project Tribe,’ a strategy to develop a decentralized platform that would allow any organization to develop online communities using a blockchain-based framework built by Tech In Asia, according to documents viewed by TechCrunch.

“Our goal is to give Tech In Asia back into the hands of the community and harness community forces to bring us closer to our mission of building and serving Asia’s tech communities,” the company wrote in one section of the whitepaper, which was never released but had been widely-circulated beyond Tech In Asia staff.

The most successful ICOs have developed decentralized systems that are often initially beneficial to the company behind the token sale, but that can, in theory, be extended to cover other businesses.

Project Tribe used that angle. Bearing some basic similarities to the Civil journalism platform, the plan was initially to host Tech In Asia’s news and community website over the next three years, before opening up to third parties by 2021.

Company-wide Slack messages seen by TechCrunch show that it was discarded after the management team balked at the risk behind the move. They told staff their concern that token economics, pleasing retail investors and legal uncertainties would all distract from the core business. That reversal was taken despite “significant” investment resources and dozens of staff being allocated to develop the concept and whitepaper over a number of months.

From funding to cutbacks

It wasn’t so long ago that Tech In Asia was the toast of Asia’s media community.

The startup — which launched in 2010 — brought in $6.6 million in fresh funding last November in a round led by Korean investor Hanwha.

In the ensuing six months, after watching annual revenue drop thanks in part to a dramatic decline in its events business, the Tech In Asia leadership caught crypto fever and decided to venture into the new world of ICOs.

There were signs of trouble earlier in 2017 for the company. Tech in Asia laid off most of its India-based team in early 2017 and ended its events business in that country. Those decisions impacted its event business, which a source said saw total revenue drop by more than 50 percent.

A shift to community content, with fewer ‘original’ reporting and journalism pieces also cut into company performance. Internal data seen by TechCrunch shows that monthly active users on the site were down 31 percent year-on-year in Q2 2018 — reaching 1.84 million — while total pageviews slipped by one-third, too.

Tech In Asia’s management team told all staff in June that its runway, which was thought to be shored up by the November deal, had gone from a solid-looking 81 months to just 14 months. Management claimed that a change in financial calculations caused the difference and employees were reassured that their jobs were safe.

One month later, however, the company began shedding staff in an effort to cut costs, reversing a hiring spree it launched in January, according to sources.

Two sources told TechCrunch that morale of the remaining staff was crushed when members of the management ‘flaunted’ the fruits of their wealth on social media just days after firing large portions of the team. Some social media updates posted to the internet that upset departing staff members included a photo of Rolex, the view of a villa on a weekend trip to Bali, and an expensive sushi dinner bill. 

With the company facing a straitened financial situation, if Tech In Asia tries to raise money again it’ll have some explaining to do to potential investors.

The business grossed SG$3.37 million (US$2.47 million) for the first six months of the year. Annualized, that would represent a 15 percent drop on 2017’s revenue, and Tech In Asia is still losing money. It recorded a net loss of SG$1.43 million (US$1.05 million) for the first half of 2018, according to internal data. That’s an average monthly burn rate of SG$0.23 million, or US$0.17 million.

Nonetheless, Wee — the Tech In Asia CEO — is hopeful that the subscription model pivot can make Tech In Asia sustainable in the long run.

“As you probably know, our business model has been built around events and advertising. While these have kept our business going, we are still working towards becoming profitable. Why is achieving this important? Because the only way we can be better at serving Asia’s tech ecosystem is if we have more resources and a consistent income stream,” he wrote when announcing the subscription package.

Full disclosure: I bought an annual subscription to Tech In Asia at the early bird discount rate being offered right now. That doesn’t impact my coverage of this story — I support a number of media businesses via subscription packages.

SparkLabs is launching a cybersecurity and blockchain accelerator program in the US

Investment firm SparkLabs has run accelerator programs across APAC, now it has announced its first that’ll be based on U.S. soil and it’s a cybersecurity and blockchain program that’ll be located in Washington, D.C. from next year. The program will be led by former Startup Grind COO Brian Park and Mike Bott, who is ex-managing […]

Investment firm SparkLabs has run accelerator programs across APAC, now it has announced its first that’ll be based on U.S. soil and it’s a cybersecurity and blockchain program that’ll be located in Washington, D.C. from next year.

The program will be led by former Startup Grind COO Brian Park and Mike Bott, who is ex-managing director of The Brandery accelerator. Advisors signed on to work with the batch of companies includes top names like Microsoft’s former chief software architect Ray Ozzie, Litecoin creator Charlie Lee, LinkedIn co-founder Eric Ly and Rich DeMillo, who was the first CTO of HP.

Named “SparkLabs Cybersecurity + Blockchain,” the program will kick off with an inaugural batch of companies in March next year, with applications opening accepted from January. SparkLabs co-founder and partner Bernard Moon told TechCrunch in an interview that the plan is to run the program for four months with two intakes per year.

It’ll use SparkLabs’ standard investment approach that sees selected companies offered $50,000 for up to six percent equity. That’s variable on a case-by-case basis — for example for those that have raised significant early funding at a large valuation — but Moon said that the priority for the security and blockchain program is to seek out companies that are bootstrapped or at least have not raised much.

Moon said that the general focus is not on cryptocurrency but instead enterprise-led technologies. So, on the blockchain side, that might mean protocols and other infrastructure layer plays, although Moon said he does believe that there is scope for more consumer companies, too.

SparkLabs has a dedicated blockchain fund — SparkChain Capital — but neither that fund nor its principal, Stellar founder Joyce Kim, is directly involved in the accelerator. That’s very deliberate, Moon said, because SparkLabs wants to grow its network in the blockchain space outside of SparkChain, although he did explain that the program will be “a vetted deal source” for the fund, so graduates could potentially look it to when they want follow-on funding.

Outside of SparkChain Capital, SparkLabs is active in crypto, primarily through its presence in Asia — especially Korea where it operates its first accelerator program. The company is even tokenizing two of its accelerators — a six month IOT-focused initiative in Korean smart city Songdo and Cultiv8, an accelerator for agriculture and food tech in Australia — although Moon said that the project has been delayed but remains on track to happen soon. Investment-wise, it has backed over 10 blockchain companies and a dozen in the cybersecurity space.

The cybersecurity and blockchain program has an interesting story. Park and Bott originally spun out AOL’s Fishbowl Labs accelerator program but after a discussion with Moon for advice, the pair ended up signing up with SparkLabs. That’s a move that Moon believes will help bring a global perspective through SparkLabs’ presence in the rest of the world — it has six other programs globally — and marrying that with what’s happening in the U.S.

“We want to foster and grow a robust ecosystem in both cybersecurity and distributed ledger technologies.  We believe these two verticals are synergetic by nature, but we will seek innovations beyond the overlap,” Park said in a statement

“It’s so early within this space that we are only seeing the Friendsters and MySpaces of the blockchain world.  The next Facebooks and Twitters will be developed over the next several years,” he added.

Mary Meeker, author of the Internet Trends Report, is leaving Kleiner Perkins

Mary Meeker is leaving Kleiner Perkins to build a new fund and she’s taking the firm’s growth team with her, as first reported by Recode. Meeker, widely known for her annual Internet Trends Report, joined the firm in 2010 after two decades as a managing director at Morgan Stanley. She was well-established as a tech analyst on Wall Street. In Silicon Valley, she quickly built a reputation as one of the best.

Mary Meeker is leaving Kleiner Perkins to build a new fund and she’s taking the firm’s growth team with her.

The news, first reported by Recode and confirmed to TechCrunch, is the latest high-level departure at one of the most prominent Silicon Valley venture capital firms.

Joining Meeker in her new fund are Kleiner Perkins GPs Mood Rowghani and Noah Knauf, as well as Juliet de Baubigny, a partner. According to the firm, this is less of a messy break-up and more of an amicable and intentional decision to spin-off Kleiner’s growth-investing unit.

“The environment for venture has evolved — with larger checks being written for seed and A rounds and more support from partners required to build companies — demanding a high degree of specialization and extreme focus to excel,” a spokesperson for Kleiner Perkins said in a statement provided to TechCrunch. “The changes in both areas have led to less overlap between venture and growth and creating two separate firms with different people and operations now makes sense.”

We’ve reached out to Meeker for comment.

Meeker, widely known for her annual Internet Trends Report (don’t worry, it’s not going anywhere), joined the firm in 2010 after two decades as a managing director at Morgan Stanley. She was well-established as a tech analyst on Wall Street. In Silicon Valley, she quickly built a reputation as one of the best.

She was one of few women to earn a GP title at Kleiner Perkins in an industry where women have traditionally been shut out from the highest roles in VC. There will be no female GPs at Kleiner in her wake.

A new era at Kleiner Perkins

Founded in 1972, Kleiner has been around to support some of the biggest names in tech. It’s backed Google, Aol and Amazon, and more recently, Slack, Uber and Peloton.

Meeker, Rowghani and Knauf’s departures, as well as several other recent exits, signal a new era at the firm.

Since legendary investor John Doerr stepped down as managing partner in 2016, replaced by Ted Schlein, the firm has been hemorrhaging top talent.

Schlein, however, seems unphased. In an interview with Recode, he said he didn’t think it was a “huge deal.”

The late-stage team at Kleiner “continued to diverge away from what the core part of Kleiner Perkins has done for 46 years, and will continue to do for another 46 years,” he said.

Just last week, longtime Kleiner investor, and the only other female GP, Beth Seidenberg took the wraps off her own fund after announcing in May she would be leaving the firm.

Last year, general partner Mike Abbott left the firm one month after Arielle Zuckerberg, a partner, also exited. The pair was part of a group of seven to leave Kleiner at the time.

Verizon declines to comment on WSJ report saying Tim Armstrong is in talks to leave Oath

The Wall Street Journal is reporting that Tim Armstrong is in talks to leave Verizon as soon as next month. Armstrong heads up the carrier giant’s digital and advertising division, Oath (formerly AOL, prior to the Yahoo acquisition and the subsequent merger of the two units). Oath also happens to be TechCrunch’s parent, of course. […]

The Wall Street Journal is reporting that Tim Armstrong is in talks to leave Verizon as soon as next month.

Armstrong heads up the carrier giant’s digital and advertising division, Oath (formerly AOL, prior to the Yahoo acquisition and the subsequent merger of the two units). Oath also happens to be TechCrunch’s parent, of course.

We reached out to our corporate overlords for a confirm or deny on the newspaper report. A Verizon spokesperson told us: “We don’t comment on speculation and have no announcements to make.”

The WSJ cites “people familiar with the matter” telling it Armstrong is in talks to leave, which would mean he’s set to step away from an ongoing process of combining the two business units into a digital content and ad tech giant.

Though he has presided over several rounds of job cuts already, as part of that process.

Verizon acquired Armstrong when it bought AOL in 2015. The Yahoo acquisition followed in 2017 — with the two merged to form the odd-sounding Oath, a b2b brand that Armstrong seemingly inadvertently outted.

Building an ad giant to challenge Google and Facebook is the underlying strategy. But as the WSJ points out there hasn’t been much evidence of Oath moving Verizon’s growth needle yet (which remains tied to its wireless infrastructure).

The newspaper cites eMarketer projections which have Google taking over a third of the online ad market by 2020; Facebook just under a fifth; and Oath a mere 2.7%.

Meanwhile, Verizon’s appointment of former Ericsson CEO, Hans Vestberg, as its new chief exec in June, taking over from Lowell McAdam (who stepped down after seven years), suggests pipes (not content) remain the core focus for the carrier — which has the expensive of 5G upgrades to worry about.

A cost reduction program, intending to use network virtualization to take $10BN in expenses out of the business over the next four years, has also been a recent corporate priority for Verizon.

Given that picture, it’s less clear how Oath’s media properties mesh with its plans.

The WSJ’s sources told the newspaper there were recent discussions about whether to spin off the Oath business entirely — but said Verizon has instead decided to integrate some of its operations more closely with the rest of the company (whatever ‘integrate’ means in that context).

There have been other executive changes at Oath earlier this year, too, with the head of its media properties, Simon Khalaf, departing in April — and not being replaced.

Instead Armstrong appointed a COO, K Guru Gowrappan, hired in from Alibaba, who he said Oath’s media bosses would now report to.

“Now is our time to turn the formation of Oath into the formation of one of the world’s best operating companies that paves a safe and exciting path forward for our billion consumers and the world’s most trusted brands,” Armstrong wrote in a staff memo on Gowrappan’s appointment obtained by Recode.

“Guru will run day to day operations of our member (consumer) and B2B businesses and will serve as a member of our global executive team helping to set company culture and strategy. Guru will also be an important part of the Verizon work that is helping both Oath and Verizon build out the future of global services and revenue,” he added, saying he would be spending more of his time “spread across strategic Oath opportunities and Verizon… leading our global strategy, global executive team, and corporate operations”.

At the start of the year Oath also named a new CFO, Vanessa Wittman, after the existing officer, Holly Hess, moved to Verizon to head up the aforementioned cost-saving program.

Reaction to the rumour of Armstrong’s imminent departure has sparked fresh speculation about jobs cuts on the anonymous workplace app Blind — with Oath/AOL/Yahoo employees suggesting additional rounds of company-wide layouts could be coming in October.

Or, well, that could always just be trolling.

Yahoo still scans your emails for ads — even if its rivals won’t

You’re not the only one reading your emails. A deep dive in The Wall Street Journal on Tuesday dug out new details on a massive email scanning operation by Oath, the Verizon-owned subsidiary that’s the combined business of AOL and Yahoo. The email-scanning program analyzes over 200 million AOL and Yahoo inboxes for data that […]

You’re not the only one reading your emails.

A deep dive in The Wall Street Journal on Tuesday dug out new details on a massive email scanning operation by Oath, the Verizon-owned subsidiary that’s the combined business of AOL and Yahoo. The email-scanning program analyzes over 200 million AOL and Yahoo inboxes for data that can be sold to advertisers. (Disclosure: TechCrunch is owned by Verizon by way of Oath.)

The logic goes that by learning about its users, the internet giant can hone its ad-targeting effort to display the most relevant ads.

But where other major email providers have bailed from email scanning amid privacy scandals and security issues, Oath remains the outlier.

Google ended its ad-targeting email-scanning operation across its consumer Gmail service last year — a decision lauded after facing criticism for years over the practice — though the company still uses machine learning to help you reply to emails. Meanwhile, Microsoft told TechCrunch in a statement that it does “not use email content for ad targeting in any way, anywhere in Microsoft.” And Apple has never scanned its customers’ inboxes for advertising, though its privacy policy says it can access your data for law enforcement purposes or for more vague reasons like “issues of public importance.”

So it’s basically just Oath, then.

Scanning the inboxes of its hundreds of millions of email users is a gutsy move for the year-old internet giant, which prior to its rebranding was responsible for two data breaches at Yahoo exposing more than thee billion users’ data and a separate breach at AOL in 2014. Yahoo reportedly built a secret customer email-scanning tool at the behest of the U.S. intelligence community, which led to the departure of former Yahoo infosec chief Alex Stamos, who until recently was Facebook’s chief security officer.

Although the email scanning program isn’t new — announced earlier this year — it does go deeper than Gmail’s scanning ever did.

“Yahoo mined users’ emails in part to discover products they bought through receipts from e-commerce companies such as Amazon.com,” said the WSJ. “In 2015, Amazon stopped including full itemized receipts in the emails it sends customers, partly because the company didn’t want Yahoo and others gathering that data for their own use.”

Although some content is excluded from the scanning — such as health and medical information — it remains to be seen how (or even if) Oath can exclude other kinds of sensitive data from its customers’ inboxes, like bank transfers and stock receipts.

Yahoo Mail’s privacy policy says email accounts are subject to “manual review,” which allows certain Oath employees access to inboxes.

TechCrunch asked Oath and its parent Verizon about what assurances they could provide that confidential emails and information won’t be collected or used in any way. We also asked how consent was obtained from users in Europe, where data protection rules under the newly implemented GDPR regulations are stricter.

Neither Verizon or Oath responded by our deadline.

It should go without saying that email isn’t the most sensitive or secure communications medium, and inboxes should never be assumed to be private — not least from law enforcement and the companies themselves.

Deleting your account might be overkill, especially if you don’t want anyone to hijack your email address once it’s recycled. But if there’s ever been a time to find a better inbox, now might be it.

One Medical raises $350 million from Carlyle Group to help double up offices and offerings

One Medical has confirmed to TechCrunch it has closed on funding from the Carlyle Group for a new cash infusion worth $350 million. This announcement follows an earlier report this week One Medical was seeking to close a $200 million deal, on top of a possible $100 million in stock for the financing firm. However, […]

One Medical has confirmed to TechCrunch it has closed on funding from the Carlyle Group for a new cash infusion worth $350 million. This announcement follows an earlier report this week One Medical was seeking to close a $200 million deal, on top of a possible $100 million in stock for the financing firm.

However, we have since learned the deal is a tad higher, including $220 toward the primary equity investment and another $130 million in a secondary investment.

CEO Amir Rubin tells TechCrunch the new funds will go toward a serious expansion for the company, including doubling it’s 72 offices throughout the seven states One Medical is currently serving and expanding into new markets. Rubin was coy about where those new markets might be for now but said we’d know soon enough.

One Medical is a members-only technology platform offering an array of concierge medical services, including same-day scheduling, virtual doctor visits and reminders for important checkups. It started out as a direct-to-consumer model but has expanded in the last few years to offer medical care for employees at companies like Uber and Adobe.

The funding will also help One Medical take on both dinosaur incumbents in the medical field as well as newer startups with a similar technology offering like Forward, an AI-based “medical office of the future.”

To beat both, Rubin would like to use part of the new cash to beef up his company’s tech backend. One Medical’s platform is built on algorithms and machine learning to pull together new information and help patients have a better experience at the doctor’s office. Right now, getting all of your medical history in one place is a hard problem to solve in the U.S. healthcare system — only complicated by the many coded hurdles in dealing with insurance. Rubin would like his platform to quickly surf through the data and find procedures done elsewhere to ensure patients are better served by their medical team.

Lastly, the new funding provides an opportunity for One Medical to scale up its human medical team. One Medical tells TechCrunch it will also invest tremendously in its clinical team, doubling its provider numbers, which are in the “several hundreds” right now.

Prior to this round, One Medical had raised just over $180 million and was last valued around $1 billion. The new funding puts the total raised at $530 million.