Distance learning – Product Management Confabulation

May 13, 2021

Upsie’s direct-to-consumer swing at the warranty space nets $18.2M

Upsie, a consumer warranty startup, has raised $18.2 million in a Series A round led by True Ventures.

The financing brings the total raised for the St. Paul, Minnesota-based startup to $25 million since its 2015 inception.

A large group of investors participated in the round, including Concrete Rose VC, Avanta Ventures, Kapor Capital, Samsung Next, Massive, Backstage Capital, Awesome People Ventures, Draft Ventures, Matchstick Ventures, M25, Silicon Valley Bank and Uncommon VC, among others. A number of angels also put money in the round.

Clarence Bethea (pictured below) founded Upsie after realizing the significant markup that retailers were placing on warranties.

His goal was to focus not on the retailer, but rather the end user and making the process more transparent, more affordable and simpler. For example, Upsie claims that it saves its customers anywhere from 50% to 90% compared to competitor warranty plans. Most other companies in the space, such as SquareTrade, offer warranties at the point of sale via retailers.

Image Credits: Upsie

“I’m sure you’ve walked into a Best Buy or a Target, and when you’re checking out somebody at the register is offering you a warranty. But what most customers don’t know is that you’re paying as much as 900% more for that warranty than you should,” Bethea said. “There’s no transparency at the register and you never get to ask what’s covered and what’s not covered, or what should you do if you need to make a claim.”

Just like many other companies, Upsie saw a bump in business last year thanks to the COVID-pandemic and resulting increase in consumer electronics sales (17%, according to the NPD Group Retail Tracking Service). In particular, there was a spike in demand for laptops, desktops and tablets for distance learning and remote work. As a result, Upsie’s revenue surged by 2.5x over the past 12 months, although Bethea declined to reveal hard revenue figures.

“With people working from home, devices were no longer a luxury but a necessity,” he told TechCrunch.

Rather than at the point of sale, Upsie gives consumers an opportunity to purchase a warranty for a product via its website or mobile app after the transaction has taken place. The company offers protection for thousands of devices — from smartphones to appliances to gaming consoles to lawn and garden tools — or about 60% of the warranty market, according to Bethea.

Consumers have up to 120 days to purchase smartphone protection, 11 months to purchase appliance, TV and fitness equipment protection and up to 60 days for other consumer electronics. All warranty information, including a copy of the product receipt, is stored and accessible on demand. Upsie says it also aims to offer same-day repairs on many devices.

The process, according to Bethea, is straightforward. Consumers need only upload an image of their receipt and provide purchase price and serial/IMEA numbers. When they need to file a claim, it’s a matter of pressing a button. And to make the process even easier, it will give consumers the ability to say, take their items directly to the Apple store for repair, and then get reimbursed afterwards by Upsie.

“We want more people to be able to protect what they buy with their hard-earned money,” Bethea said. “Removing the worry around paying out of pocket to repair, say, your kid’s laptop is huge for families who have had to go with remote learning when the system doesn’t make this easy for everyone.”

Upsie plans to use its new capital to increase customer awareness and continue building out its warranty product offerings and verticals, as well as to double its current headcount of 15.

“We want to continue to grow our presence online through digital channels such as Facebook and Google, for one thing,” Bethea told TechCrunch.

Puneet Agarwal, partner at True Ventures, says his firm doubled down on its investment in Upsie after witnessing its solid growth over the years. (True Ventures led the startup’s $5 million seed round in April of 2019.)

Upsie nabs $5M to build a direct-to-consumer warranty service

True Ventures was initially attracted to the sheer size of the warranty industry (estimated at $100 billion globally) and “how broken it was from the consumer experience perspective.” The firm also viewed Bethea as a “very special entrepreneur” who “exudes authenticity,” which must be refreshing to VCs who get inundated with pitches.

“We love to invest in old, staid industries where companies can disrupt from a business model and product perspective,” Agarwal said. “Upsie has done that in a big way.”

He went on to describe Bethea’s move to go direct to consumer in the warranty space as “bold.”

“Upsie is the only one doing that, and it’s the biggest swing to take in this type of industry,” Agarwal said. “We believe he’s cracked the code and that’s why we doubled down.”

Bethea’s background is not the same as a “typical” startup founder, which also was viewed as an advantage by True Ventures.

“He came from the streets of Atlanta, Georgia, and had to overcome so much in his life,” Agarwal told TechCrunch. “Clarence is the type of person that when we started True, we wanted to fund. We admire his perseverance and grit to come to this point.”

Fintech startups set VC records as the 2021 fundraising market continues to impress

March 3, 2021

After 200% ARR growth in 2020, CourseKey raises $9M to digitize trade schools

When the COVID-19 pandemic hit and forced educational institutions to go virtual, many were scrambling to develop online or blended curriculums.

That struggle was particularly challenging for trade schools, many of which were not designed to teach online and were mostly paper-driven.

CourseKey, a San Diego-based trade school management SaaS startup, was in a unique position. Demand surged and its ARR grew by 200% in 2020. And now, the company has raised $9 million in a Series B led by SignalFire and with participation from existing backer Builders VC to help it continue its momentum.

Founded in 2015 by Luke Sophinos and Fadee Kannah, CourseKey’s B2B platform is designed to work with organizations that teach some of our most essential workers — from automotive mechanics to electricians to plumbers to nurses, phlebotomists and dental assistants.

CourseKey founders Luke Sophinos (left) and Faddee Kannah (right)

CourseKey founders Luke Sophinos (left) and Fadee Kannah (right)

The goal is to help those organizations boost revenue by improving student retention and graduation rates, helping them maintain regulatory compliance and generally streamline processes.

“Things really took off last year when the coronavirus hit,” Sophinos said. “So many schools had to adopt a digital arsenal. We saw a massive acceleration trend that was already going to happen. Every industry had been eaten. We just found a space that wasn’t yet.”

CourseKey currently works with over 200 career colleges, including the Paul Mitchell School and the Institute for Business & Technology, among others. Over 100,000 students use its software.

For Sophinos and Kannah, founding CourseKey was more than just a business opportunity. Kannah, who had fled Iraq as a refugee, saw family members going through trade schools that were lacking technology infrastructure and modern software tools. He architected the CourseKey platform.

Sophinos, frustrated by his own college experience, applied for The Thiel Fellowship – a program that supports students in company building instead of university attending. However, he recognized that not everyone who doesn’t want to go to traditional college has that option.

“While looking at alternatives, our early team began recognizing a market that we felt no one was paying attention to. It was occupied by our friends and by our family members,” Sophinos said. “It was a space that, for some odd reason, was largely being left out of the education conversation.”

In 2017, CourseKey partnered with a large vocational education provider to build and launch what Sophinos describes as “the world’s first trade school management system.”

“We focused on automating daily classroom procedures like attendance and grading, enhancing the student experience through communication tools, helping to identify at-risk students, and simplifying compliance,” he said. “We also visualized data for retention purposes.”

CourseKey also does things like track skill attainment, run evaluations and exams and integrate third-party tools.

Image Credits: CourseKey

The startup’s goal with its new capital is to scale the platform to serve “every trade school in the country” with the mission of changing the narrative that four-year college is the “only option.” It also plans to add new features and capabilities, largely based on customer requests. CourseKey also plans to nearly double its current headcount of just over 50 employees to nearly 100 over the next two years.

“This is a massive market and massive business opportunity,” Sophinos said.

CourseKey has an impressive list of supporters beyond SignalFire and Builders. Steve Altman, former vice chairman and president of Qualcomm, led its $3.5 million seed round which also included participation from Larry Rosenberger, former FICO CEO. Dennis Yang, former CEO of edtech giant Udemy, and Altman now serve on its board.

SignalFire Managing Director Wayne Hu, who also took a seat on the startup’s board with the new round, said his firm recognized that vocational schools and their administrators, instructors, and students “suffer from a lack of purpose-built software.”

“Student Information Systems and Learning Management Systems are optimized for traditional K-12 schools and university workflow, but vocational schools are stuck relying on pen and paper or trying to shoe-horn in solutions that aren’t built for them,” Hu wrote in a blog post.

CourseKey, in SignalFire’s view, is reimagining a new education operating system built specifically for experiential, hands-on learning models, which continues to evolve with hybrid/distance learning.

Hu also pointed out that since many of the jobs that vocational schools are preparing people for “have life or death consequences,” they are highly regulated.

“Not only does CourseKey improve trade school business KPIs, it serves as insurance against this existential risk,” he added.

November 11, 2020

As edtech crowds up, Campuswire bets big on real-time learning

Campuswire was in a fortuitous spot when colleges and universities across the world shut down on short notice because of the threat of coronavirus. Founded by Tade Oyerinde in 2018, Campuswire is a virtual solution for any teacher who wants to digitize their internal classroom communications, from Q&A time to the lecture itself.

The strategy, for the most part, has worked. Campuswire is now used at more than 300 universities among 200,000 students, Oyerinde tells me.

While Campuswire’s pitch was set to boom overnight, the founder instead saw a bigger challenge approaching: more competition. As professors moved online, lectures moved to Zoom or tools built atop of Zoom. Microsoft Teams and Google Hangouts filled in the gap for classrooms that couldn’t afford fancy licenses. Campuswire’s key monetization strategy, which was selling pro licenses for its online class software, felt threatened by alternatives.

So, after months of iterating, Campuswire has adapted its monetization strategy and today announced that it is launching live courses taught by professors. Instead of solely working with professors to streamline internal class communications, Campuswire will now help teachers produce classes that students can then take for a fee. The tuition revenue will be split between the teacher and Campuswire.

Campuswire courses kick off with an angel investing class taught by Charles Hudson, the founder and general partner of Precursor Ventures. Hudson lectures at Stanford occasionally, and working with Campuswire allows him to teach a broader set of students.

Meanwhile, Campuswire software will be free to use starting in January 2021.

The move marks Campuswire’s further dive into synchronous learning. Campuswire’s model is built on how existing classrooms work in universities and colleges. Classes on Campuswire are capped at 500 to promote conversation, and large lectures are supplemented with teacher assistant (TA) classes to hammer home confusing concepts.

Meanwhile, it’s clear amid the pandemic that asynchronous learning has its perks (students can learn on their own schedule, while educators are able to work more flexible hours). Still, Oyerinde thinks a pre-recorded format is not effective for pedagogy purposes.

Teachers are leaving schools. Will they come to startups next?

“This is kind of the hill we’re going to die on,” he said. “Real, lasting learning has to be synchronous for the majority of people.”

In other words, while there’s a small group of gifted-and-talented students who can watch a one-hour lecture and absorb every factoid and nuance, the majority of students need engagement, interaction and motivation to understand a topic, he argues. It’s the reason why MOOCs, or massive open online course providers, only have a 2-3% completion rate on their courses, he argues.

At its core, Campuswire has evolved from a platform trying to compete with Zoom to a platform that is trying to compete with these MOOCS through engaging content taught by experienced professors. Its main differentiation from MOOCs is that it’s live and has teacher assistants.

There are a number of startups that are trying to create engaging, celebrity professor-taught classes through hybrid plays. MasterClass, which just raised $100 million a few months ago, sells entertainment and education in one go, offering cooking classes from Gordon Ramsay and tennis lessons from Serena Williams. While you can’t interact with Ramsay or Williams, you can chat with fellow classmates.

The first rule of BookClub? No boring book clubs.

BookClub connects readers to the authors they are reading, giving bookworms an opportunity to ask about cliffhangers and character development. The upstart is still in its early stages, but founder David Blake says that readers could talk directly to authors down the road. There’s also Teachable, which got acquired by Hotmart earlier this year. Teachable helps any expert who wants to create a business around their expertise do so with a virtual course. Arlan Hamilton, a seed-stage investor, has a course on the platform.

Today’s pivot signals the founder’s mindset that, in order to grow to the billion-dollar business mark in edtech, you need to sell more than software that Google and Microsoft will always give away for free.

“Online learning can be 100 times bigger than it is today,” Oyerinde said. “Once you actually support synchronicity, you actually support people getting to actually interact with UCLA/Princeton/Cornell professors, not just watching them on pre-recorded videos.”

Booming edtech M&A activity brings consolidation to a fragmented sector

October 15, 2020

Brighteye Ventures’ Alex Latsis talks European edtech funding in 2020

Brighteye Ventures, the European edtech venture capital firm, recently announced the $54 million first close of its second fund, bringing total assets under management above $112 million. Out of the new fund, the 2017-founded VC will invest in 15-20 companies over the next three years at the seed and Series A stage, writing checks up to $5 million.

Described as a thesis-driven fund investing in startups that “enhance learning” within the context of automation and other new technologies, coupled with changes in the way we live, Brighteye plans to disrupt the $7 trillion global education sector “as educators and students are adapting to distance learning en masse and millions of displaced workers are seeking to upskill,” according to a press release.

The firm’s investments to date include Ornikar, an online driving school in France and Spain serving more than 1.6 million students; Tandem, a Berlin-based peer-to-peer language learning platform with over 10 million members; and Epic!, a reading platform said to be used in more than 90% of U.S. schools.

To dig deeper into Brighteye’s thesis and the edtech sector more broadly, I caught up with managing partner Alex Latsis. We also discussed some of the findings in the firm’s recent European edtech funding report and how more venture capital than ever is set to flow into educational technology.

TechCrunch: Brighteye Ventures backs seed and Series A startups across Europe and North America that “enhance learning.” Can you elaborate a bit more on the fund’s remit, such as subsectors or specific technologies and what you look for in founders and startups at such an early stage?

Alex Latsis: We invest in startups that use technology to directly enable learning, skills acquisition or research as well as companies whose products address structural needs in the education sector. For example, Zen Educate addresses the systemic issue of teacher supply shortages in the U.K. via an on-demand platform that saves schools money whilst allowing educators to earn more. Litigate is an AI-driven coach and workflow tool improving results for legal associates, while Ironhack, the largest tech bootcamp in Europe and Latin America, gives young professionals the skills needed to enter the innovation economy and connects them to employers with a 90% job placement rate.

As education is a complex field we always seek to establish a degree of founder market fit, but more importantly that the founding teams themselves are a good fit internally. No startup succeeds on the merits of a founder alone, even if they may be driving the momentum.

In “The European EdTech Funding Report 2020,” you note that Europe is gaining momentum with a healthy increase in VC investments in local edtech startups. Specifically, you say that edtech VC investment has experienced 9.2x growth between 2014 and 2019 in terms of money invested. What is driving this and how does Europe compare to other major tech regions for edtech, such as Silicon Valley/U.S. or China?

Both Europe and the U.S. saw about 2% of venture capital invested in edtech in 2019. Growth in edtech investment in these markets to date has been driven largely by increased willingness to pay for training that is unavailable, unengaging or too expensive in legacy institutions and to a lesser extent by increased digital penetration in schools and universities that has enabled SaaS products to scale.

Given the rapid evolution of online education in the face of the pandemic, we expect funding for edtech will trend closer to 3%-5% of venture funding in the coming years on both sides of the Atlantic. This will mean billions in incremental investment, hundreds of new promising companies and incredible learning opportunities, particularly for those looking to upskill/reskill. In countries like India and China where school and university student populations are growing more rapidly, we expect 5%+ of VC funding to go into edtech as there is more growth in core demand.

September 30, 2020

Twilio launches an app for frontline workers, a free 1:1 video toolkit and a new IoT platform

Twilio is hosting its annual Signal conference today and as usual, the company is using the event to launch a host of new products and features. For the most part, especially if you’re a web or mobile developer, these are not groundbreaking new features. The core Twilio services, after all, have been in place for a while now. Instead, today’s announcements build out some of the edges of the overall Twilio product ecosystem.

The most interesting launch — at least from the perspective of most developers — is probably the general availability of Twilio’s Video Web RTC Go. The free video service allows you to add 1:1 video chats to your web and mobile applications. The company notes that this is not a free trial, but you are limited to 25 GB of bandwidth through Twilio’s relays per month, or about 100,000 participant minutes. You also get logging and diagnostic features. So freemium, I guess, but with generous limits to get you started. If you need more, you can upgrade to a higher tier later.

“Twilio Video WebRTC Go is a free tier and a free offering for developers to get started building those one to one video connections for things like distance learning, client consultations — all of those things that you might have a need for in these new use cases that we’ve seen evolve through the pandemic,” Quinton Wall, Twilio’s Senior Director for Platform and Developer Experience, told me. “And what we really wanted to do is take away all the barriers and make a free tier — and a perpetually free tier — that gives them all the tools that they need to build on top of WebRTC to get going. ”

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The second major announcement is the launch of Twilio’s latest IoT service: the Microvisor IoT platform. Twilio acquired IoT hardware and software specialist Electric Imp earlier this year and when it first launched its IoT efforts, it started with cellular connectivity through its Super SIM product. The idea behind the Microvisor IoT platform is to give embedded developers all the tools they need to build connected devices and the lifecycle management tools to keep them updated and secure.

Twilio acquires Electric Imp to bolster its growing IoT business

As Evan Cummack, the GM of Twilio IoT, told me, as the company dug deeper into the IoT market, it found that a lot of projects were failing.

“When we really dug into what was going on with our customers individually, what we saw was the reasons for a lot of these failures,” he explained. “Sometimes it was a fundamental misjudgment in terms of what end-users wanted, or the end-user experience, or value and business models, but a lot of the time, it was a technical failure, or it was that the technical challenges were so steep that the ROI equation fell apart. You couldn’t deliver substantial enough value in order to justify the technical effort required.”

With Electric Imp, Twilio bought a full-stack platform — and there are others like it on the market. But as Cummack noted, most businesses aren’t buying those. Instead, they are trying to build their solutions from scratch and Twilio’s hypothesis was that they were doing so because they wanted to be able to write native code for these devices. Combining that with the convenience of a full-stack platform is difficult.

Image Credits: Twilio

The solution the team came up with combines this new software platform with a recent hardware innovation by Arm: TrustZones. But with Arm’s TrustZone hardware isolation feature at its core, the Microvisor platform only runs on devices that use the latest Cortex M-based processors, which obviously means its not a service you can use to upgrade your existing solutions. In return, users get secure boot features, over-the-air firmware updates and secure tunnels to connect to their devices, in addition to remote debugging features.

Also new today is Event Streams, a new API that helps developers aggregate data from all of their Twilio-powered experiences across voice, SMS, wireless connectivity through Super SIM, TaskRouter and more. The idea here is to give users a better understanding of how these channels are being used — and less so for understanding their bills and more for helping them build tools that allow businesses to better understand how they are interacting with customers.

Image Credits: Twilio

Lastly, there’s Twilio Frontline. This isn’t really a developer product but a React Native-based app for frontline workers who may need to communicate with customers. Think of an employee in a store who needs to talk to a customer who is waiting outside. The app focuses on chat, with support for SMS, WhatsApp, and web-based and in-app chat clients. Frontline can also be integrated with existing enterprise authentication and CRM systems.

Microsoft challenges Twilio with the launch of Azure Communication Services

September 21, 2020

Osso VR raises $14 million to bring virtual reality to surgical and medical device training

It seems that distance learning is even coming for the healthcare industry.

As remote work becomes the order of the day in the COVID-19 era, any tool that can bring training and education services to folks across industries is gaining a huge amount of investor interest — and that includes healthcare.

Virtual reality tools like those on offer from Osso VR have been raising investor dollars at a rapid clip, and now the Palo Alto, Calif.-based virtual reality distribution platform joins their ranks with a $14 million round of financing.

The money came from a clutch of investors led by the investment arm of Kaiser Permanente, a healthcare giant whose network of managed care facilities and services spans the country. Previous backers and new investors like SignalFire, GSR, Scrum Ventures, Leslie Ventures and OCA Ventures, also participated in the funding.

Osso has seen its adoption skyrocket during the pandemic as medical device manufacturers and healthcare networks turn to training tools. that don’t require a technician to be physically present.

According to company founder Dr. Justin Barad, the market for medical device education services alone is currently around $3 billion to $5 billion and growing rapidly.

Staffed by a team that comes from Industrial Light and Magic, Electronic Arts, Microsoft, and Apple, Osso VR makes generic educational content for training purposes and then produces company specific virtual reality educational videos for companies like Johnson and Johnson. Those productions can run the gamut from instructional videos on vascular surgery to robotic surgery training tips and tricks.

While Kaiser Permanente Ventures’ Amy Belt Raimundo said that the strategic investor’s decisions to commit capital aren’t based on what Kaiser Permanente uses, necessarily, the organization does take its cues from what employees want.

“We don’t tie our investment to a deployment or customer contract, but we look for the same signals within Kaiser Permanente,” said Belt Raimundo. But the organization did have employees interested in using the Osso technology. “We made the announcement that we are looking at [Osso VR] technology for use. And that’s where the investment and commercial decision was signaling off of each other, because the response showed that there was an unmet need there,” she said.

Osso VR currently has around 30 customers, 12 of which are in the medical device space. The company uses Oculus Quest headsets and is deployed in 20 teaching hospitals across 20 different countries. In a recent validation study, surgeons training with Osso VR showed a 230 percent improvement in overall surgical performance, the company said in a statement.

The goal, according to Barad, a lifelong coder with a game development credit from Activision/Blizzard, is to democratize healthcare. “This is about improving patient outcomes, democratizing access, and improving education,” said Barad. “Now that the technology is growing and maturing and VR is growing as a platform, we can attack the broader problems,” in healthcare, he said.

September 1, 2020

Now providing healthcare access to nearly 1.5 million kids, Hazel Health raises $33.5 million

Hazel Health was founded five years ago to provide telemedicine services to children in public schools. Launched by a former Apple software engineer and serial entrepreneur, Nick Woods, and named after one of Woods’ children, Hazel Health has grown to work with school districts responsible for 1.5 million children, and has raised $33.5 million to expand its footprint even further across the United States.

The company’s services are even more sorely needed as children are forced into distance learning classrooms by the global COVID-19 pandemic.

Denied the network of services that in-person schooling provides for basic healthcare and nutrition, remote services like Hazel Health become, in some cases the only window into children’s health that some communities have.

When the first lockdown orders came through, the company began working with school districts to develop remote telemedicine services distributed via applications to continue serving the children it provided basic telemedicine services for.

So far, ninety percent of eligible families have enrolled in the company’s telemedicine program and 70 percent have engaged with the company’s services. These numbers are even more significant when viewed through the lens of the nearly forty percent of the company’s users who indicate they don’t have a primary care physician.

“We built this incredibly powerful model that partnered with schools and brought access to healthcare to families,” said Hazel chief executive, Josh Golomb. “At the schools we had an iPad on a stand. You hit a button and in a few minutes you would be talking to a doctor.”

Hazel Health executive team, from left: Dr. Rob Darzynkiewicz (Chief Medical Officer), Nick Woods (Chief Tech Officer, cofounder), Raquel Antunez (VP Education Markets, cofounder), and Josh Golomb (CEO). Image Credit: Hazel Health

After the onset of the COVID-19 epidemic in the U.S., the company’s Hazel at Home service continues to provide care to kids.

“As soon as covid happened there was a lot of recognition by districts that we have to have a solution around student health and wellness,” said Golomb. “Pre-COVID we went from 300,000 in our network of districts to now, when we just passed 1.5 million. [The] rate of engagement went down but our overall expansion has increased dramatically.”

With those kinds of numbers it was no wonder that Owl Ventures and Bain Capital Ventures came in to back the company. Additional financing came from Uprising, the UCSF Foundation Investment Company and Centene Corp.

And the demand just keeps increasing, according to Golomb.

“Our pipeline has exploded,” he said. “A lot of the states have made expansion for telehealth and increasing access a priority. We were going to have eight or nine states that we were going to prioritize.. That’s priority number one… another big chunk is really making sure that we can invest in expanding the product to support that volume of states and finding ways to support our families and district partners.”

July 9, 2020

The coronavirus pandemic is expanding California’s digital divide

Kevin Frazier Contributor

Kevin Frazier, a Masters of Public Policy student at the Harvard Kennedy School and JD candidate at the UC Berkeley School of Law, uses his spare time to advocate for better government.

University entrepreneurship — without the university

Eric Tarczynski Contributor

Eric Tarczynski is the Managing Partner at Contrary, a network-driven venture firm backed by founders from Facebook, Tesla, and many others.

Across the country, university campuses are in limbo.

The California State University system has committed to online classes in Fall 2020. Northeastern University is reopening as normal. UT Austin is taking a hybrid approach: in-person classes until Thanksgiving break, then online classes during flu season.

This presents a special set of circumstances for university entrepreneurs. The traditional resources and networks are nonoperational. But time and focus, historically the most scarce resources for ambitious students, is now at an all-time high.

It’s often noted that both Facebook and Microsoft were started during Harvard’s Reading Period, a week where classes are cancelled to let students study. This spring has been like one long Reading Period, sometimes with even less responsibility.

Deprioritizing classes

Stanford undergraduate Markie Wagner is taking advantage of the mandatory Pass/Fail policy that the school adopted. Since grades are no longer a consideration, Markie and her friends have free rein to put classes on the back burner to focus on talking to entrepreneurs and experimenting with business ideas.

She told us, “I’m going full hackathon mode this quarter. I’ve been reaching out to lots of founders and VCs to learn from them.” Planning on spending her upcoming senior year building a company, she’s getting a head start on exploration and network building.

If the pandemic forces school closings for the long-run, however, students will have to deal with more than a semester with an easier course load.

There’s near-universal resentment toward the idea of paying full tuition for online classes. Many of the students in Contrary’s network are planning gap years. Or, like Austin Moninger, even skipping senior year altogether. A senior at Rice studying computer science, he originally intended to graduate in spring of 2021. But given the virtual nature moving forward, he decided to accelerate graduation and is currently pursuing full-time software engineering roles. He notes, “We’ve all learned that we’re really paying for the experience and the network at the end of the day, so without it, I might as well take my time and money elsewhere.”

This puts universities in a precarious position: They must choose between letting students take breaks and defer admissions, which risks class size or financial issues (as an example, Dartmouth’s Tuck School of Business decided against this, refusing to allow students to defer), or pushing forward at full price and risking brand damage.

That said, some students are affected by shutdowns or online classes more than the schools themselves are. Research-focused entrepreneurs working in biotech, hardware or other sectors typically require expensive lab equipment to make progress. Pure software plays like Facebook and Snap usually come to mind first when talking about university entrepreneurship, but such lean operations are certainly not the only ones being built.

It’s also unclear how prolonged closures or online classes will impact education itself and how that will impact founders in the long run. Most founders have completed the majority of their degrees by the time they commit to their companies and attempt to raise money. We have not seen any meaningful skill gap in 2020, nor do we expect to throughout the rest of the year.

Unless building a deep-tech startup, company-building can continue as long as an entrepreneur has enough of a technical or financial foundation to self-educate and learn by doing. Malwarebytes CEO Marcin Kleczynski is an excellent example of this — he famously started his cybersecurity company as a freshman at the University of Illinois at Urbana–Champaign and did the bare minimum required to get C grades in school.

Virtualizing campus

Although seed funding for university entrepreneurs has not slowed down since school closings, company-building has certainly not gotten any easier.

The main challenge for 22-year-old talent is not having energy or being scrappy — it’s usually growing the network needed to recruit the right co-founder and hire an early team. In an on-campus environment, there’s enough serendipity to make this natural. But if school closings persist and virtual offerings don’t fill the vacuum, we’ll likely see a lag in new company formation.

It’s rare that founders embark on the startup journey without having known each other for at least a year. Right now, not enough time has passed to make this a problem. But at campuses where students can’t get to know peers at a deep level, it’s impossible to build bonds over a long time period.

To combat this, at Contrary, for example, we hosted a virtual community of founders this past spring with a simple premise: Put 100 people in a room (or Slack channel, more literally), make sure they spend time together and give them the tools to build.

Over the course of six weeks, 150+ collaborations occurred as people experimented on different ideas and projects. Seventy-five percent of the founders said they’d been more productive since the remote transition occurred, and at the end of the program, nearly 70% of the group planned to continue working on their companies or begin a fresh project.

Perhaps most notable is the diversity of connections made — most interactions between participants were between students enrolled in different schools. Since even the best institutions in the world each matriculate only a single digit percentage of talent nationwide, virtualizing the program made the talent pool far larger.

Successful entrepreneurs like Steve Huffman from Reddit and Paul English from Kayak (and now Lola) gave off-the-record talks, but it turned out that most of the value came from access to a highly curated group of peers that each member wouldn’t otherwise meet. The program forced the serendipity that school closures lost, then combined that with the other necessary ingredient: Tangible opportunities to build rather than talk.

You can treat a university like a bundle of tools: The education, network, credential and social learnings all compose into one holistic experience.

Over the past decade, much of that value-stack has been eaten by other organizations.

To prove that you’re a talented individual, you can try applying for the Thiel Fellowship, or lean on name-brand past internships. Or to learn about venture, you can read Scott Kupor’s book or Paul Graham’s blog.

Until very recently, the university’s main “network effect” was the fact that you had to be there to meet other great individuals. Since COVID-19 has shifted most interactions to the cloud, however, that’s no longer the default path.

Looking forward

Hopefully flattening the curve will soon become extinguishing the curve. But until then, university-based founders will have to focus on the alternative infrastructure that powers funding, networking, credentialing and learning.

Had Contrary, Slack, Y Combinator or free AWS credits not existed prior, the closure of schools may have dealt a death knell to founders. But given the abundance of options now available to plug into the Valley and build, surprisingly little has changed.

June 2, 2020

OurCrowd launches $100M Pandemic Innovation Fund

OurCrowd, the Israeli crowdfunding venture investment platform, today announced the launch of its Pandemic Innovation Fund, with plans to raise a total of $100 million. The money will be invested in “urgent technological solutions for the medical, business, educational and social needs triggered by global pandemics and other health emergencies.”

The fund will invest in startups that look at developing vaccines and tests, as well as therapeutics, remote monitoring, digital health and personal protection. In addition, it’ll also look at startups that focus on continuity and disruption management that focus on remote working, distance learning, robotic process automation, home exercise and cybersecurity. That gives the fund a pretty broad mandate, but it’ll also allow the partners to spread the investments across a variety of industries.

“The rapid spread of the coronavirus has validated our vision of a connected digital world poised to solve any crisis through global communication and rapid response,” said OurCrowd CEO Jon Medved. “To ensure that we get the world back on track, there is now an urgent need for innovation. Technology can help us overcome many of the problems resulting from the crisis. It’s time for tech to move fast and fix things.”

OurCrowd has already invested in a number of companies that would have been a good fit for the new fund if they came along today, including MigVax, which recently raised $12 million for its coronavirus vaccine efforts, as well as Sight Diagnostics, SaNOtize, TytoCare and others.

The principals for the new fund are healthcare exec Dr. Morris Laster, OurCrowd venture partner and chairman of its medical advisory board Dr. Morry Blumenfeld and OurCrowd venture partner David Sokolic.

“Together we must tackle the current pandemic as well as plan for future ones, because this story is just beginning. Entrepreneurs are uniquely skilled to provide fast and effective solutions to some of our greatest challenges. Our new fund will create the bridge between the innovations we need and the far-sighted investors able to provide the resources required to improve our world,” said Laster.