TikTok launches a music distribution platform, SoundOn

TikTok has already achieved massive influence in today’s music industry, sending songs that find popularity on the app to the top of the Billboard charts. Now the company is launching its own music marketing and distribution platform, SoundOn, to help more artists get their music heard. The new platform allows artists to upload their music directly to TikTok and to parent company ByteDance’s own music streaming service Resso, in addition to global streaming platforms including Apple Music, Spotify, Pandora, Deezer, and Tencent’s Joox.

This distribution is provided free of charge and all transaction fees are being waived by the platform. TikTok says SoundOn will pay 100% of royalties to music creators for an unlimited time on Bytedance-owned platforms. This includes distribution to TikTok; plus Resso in Brazil, Indonesia, and India; and to ByteDance’s video editor app, CapCut.

For global streaming services, the payout is also 100% in the artist’s first year, but will drop to 90% in year two and beyond. By comparison, competitor DistroKid charges artists and labels on a subscription basis, while allowing artists to keep 100% of their earnings. TuneCore, meanwhile, charges for distribution on a per-song or per-album basis, but also promises artists keep 100% of streaming revenues.

According to SoundOn’s FAQ, artists will retain all rights and royalties, meaning they’ll own their masters in addition to receiving 100% of royalties (or later, 90%).

Image Credits: TikTok

Beyond its handling the mechanics of music distribution, SoundOn offers other promotional tools and support, including audience insights and development, advice from the SoundOn marketing team, access to TikTok’s song tab (where music is linked on profile pages), TikTok verification, editorial placements on Resso and Capcut, and promotional support through creator marketing on TikTok’s platform.

The SoundOn website notes that releasing through its platform will get tracks in front of TikTok creators.

“TikTok creators are the lifeblood of our platform and the reason sounds become hits,” the website explains. “When you release through our platform, our team will activate diverse creators to make videos with your track. This helps you broaden your fanbase and reach new communities that these creators are a part of.”

The TikTok marketing aspect to SoundOn’s value proposition could make the service particularly appealing to new and emerging artists, as they understand that being given an extra push on TikTok can help them to break out and reach a wider audience, thanks to TikTok’s viral trends. Fans then follow artists on music streaming services, where that loyalty is converted into actual dollars and cents.

“New artists and musical creators are a vibrant community within TikTok and SoundOn is designed to support them as they take the first steps in their career,” said Ole Obermann, Global Head of Music at TikTok, in a statement about the launch. “Our SoundOn teams will guide creators on their journey to the big stage and bring the expertise and power of TikTok to life for the artist. We’re incredibly excited about how this will surface and propel new talent and how SoundOn will contribute to an increasingly diverse and growing global music industry.”

The SoundOn platform had been in beta testing since last fall, and is now fully available in the U.S., U.K., Brazil and Indonesia, with an undisclosed number of artists and creators already using the service, including Muni Long, Games We Play, Abby Roberts and Chloe Adams in the U.K.

SoundOn is not TikTok’s first move into the music distribution space. The company in 2020 announced a deal with UnitedMasters, which became the first music distribution company to be integrated into TikTok.

ByteDance’s expansion into music distribution is not unusual for streaming service operators. Apple invested in UnitedMasters last year, for example, which also has large deals with the NBA and ESPN, in addition to TikTok. And Spotify has a small stake in DistroKid — though it sold off two-thirds of that stake for $167 million last fall.

TikTok says interested artists can now register for SoundOn at us.soundon.global or soundon.global.

TechCrunch+ roundup: After the exit, starting up in stealth, Wag’s SPAC plans

Startups do not have a great survival rate.

Nine out of ten will fail, and those that persist will likely need at least three to four years to become profitable.

Entrepreneurs who are fortunate enough to make it across the finish line of an exit often still find themselves running uphill: reorganizations and layoffs create profound cultural shifts that few are prepared for.

Last month, enterprise reporter Ron Miller spoke to executives who’ve managed acquisitions to learn about how they oversee the process.


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For balance, he also interviewed three executives who worked at the companies that were acquired:

  • Will Conway, CEO, Pathwire
  • Matthew Gonnering, former CEO, Widen
  • Nick Gaehde, president, Lexia Learning

The trio generally agreed that transparency is key for a smooth transition. Fundamental changes are inevitable, but a collaborative process can smooth out some of the bumps and potholes on the journey.

“Though they aren’t about to talk crap about their new overlords, you do get the sense that they landed in a pretty decent spot, all things considered,” writes Ron.

Thanks very much for reading TechCrunch+ this week!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

Wag’s recovery is a bet on you going back to work

Approximately 23 million American households acquired a pet since the pandemic began. For non-essential workers, spending time with a new canine companion quickly became one of the top benefits of working remotely.

But as companies resume working out of offices, dog-walking app Wag hopes that its services will be in demand once again, Alex Wilhelm reported in The Exchange.

The company, which recently said it would go public via a SPAC merger, is seeing demand recover after sales fell off a cliff when the pandemic struck.

“The deal may serve as a reminder that bad times don’t last forever, and if your business tanks due to market conditions, those old conditions may come back. In time.”

4 signs to look for when evaluating ESG investments

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Consumers who are concerned about sustainability appreciate seeing their contributions quantified: the company that delivers my weekly grocery box keeps a running total of how many pounds of food, water and CO2 my purchases have conserved.

Similarly, investors care about the potential impact of the companies they’re backing. But how do you tell if a startup will live up to its environmental, social and corporate governance (ESG) goals?

In a post for TechCrunch+. Bruce Dahlgren, CEO of MetricStream, identifies four signals investors can check for to see if an ESG investment is viable.

“Investors need to start thinking about ESG risk in the same way they consider investment risk, as a first step,” he says.

How to recruit when your software startup is in stealth mode

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Hiring for an early-stage startup is challenging, but recruiting for a company that’s still in stealth brings a unique set of problems.

How do you get a developer excited about an upcoming interview if you can’t share any details beforehand? Black box testing is one thing, but few engineers are looking forward to a black box interview.

In a TC+ article, Michael Fey, co-founder and CEO of Island, described the process he and his co-founder used “to turn interviewees into believers without actually divulging the details of what we were working on.”

From movies to shipping, AWS is driving Amazon’s revenue diversification

Boxes move along a conveyor belt at the Amazon.com Inc. fulfillment center on Cyber Monday in Robbinsville, New Jersey, U.S., on Monday, Nov. 30, 2015. Online sales on Cyber Monday may rise at least 18 percent from a year earlier, slower growth than during the holiday weekend, as consumers start their Internet shopping earlier, according to forecasts by International Business Machines Corp. Photographer: Michael Nagle/Bloomberg via Getty Images

Image Credits: Michael Nagle/Bloomberg via Getty Images

Most businesses tend to struggle to diversify in the face of competition, regulation, and changing market forces.

But for Amazon, revenue from its fast-growing AWS business is allowing the company to experiment, invest and venture into new areas that will bolster its core e-commerce offering, report Ron Miller and Alex Wilhelm.

“Yes, Amazon has done well by offering its internal compute services externally, allowing other companies to leverage the work it has done on building low-cost, high-quality cloud services.

But it is also able to use AWS to cover operating losses posted by its global e-commerce businesses.”

3 views: How should creators weigh monetization strategies in the platform era?

Image Credits: VladSt

A friend of mine is a well-known YouTube content creator.

They spent years building a following with tutorials, topical commentary and other material that has created real value for viewers — and advertisers.

But they don’t rely on YouTube: they also write books, make paid appearances, and offer group and private instruction.

Diversification is a core tenet for many creators, but given how frequently major platforms rewrite their terms of service agreements, how should they monetize their work?

  • Amanda Silberling: I’m tired of everything being an ad
  • Alex Wilhelm: Not your platform, not your money
  • Natasha Mascarenhas: De-risk where possible

Why 2022 insurtech investment could surprise you

No one seems to want public insurtech stocks, but VCs were as hungry as ever for insurtech startups in 2021: funding reached 566 deals and $15.4 billion in capital.

But insurtech startups’ fortunes in 2022 might be different depending on where they stand: purely insurance players stand to lose value, while those innovating could benefit, report Alex Wilhelm and Anna Heim.

“Insurtech startups that are more tech than insurance might do just fine, while insurtech startups that are more insurance than tech are going to see their multiples cut until they fit with a whole set of comps they wanted to avoid.”

Should tech bootcamps keep using job placement metrics in their advertising?

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It’s easy to get lured in when a course promises a job placement, but what happens if students don’t land a job once the course is over?

Natasha Mascarenhas delves deep into the ethics and issues around placement rates promised by tech bootcamps, and whether transparency is the key to delivering a fair deal to customers who have high expectations.

“When you promise jobs, that gives you the liberty to increase your cost as much as you want because you promise the job,” said Nucamp CEO Ludovic Fourrage, who plans to cease using the stats in advertising materials.

Web3’s early promise for artists tainted by rampant stolen works and likenesses

Jillian C. York didn’t want to be a non-fungible token.

A Berlin-based author and activist, York is also the Director for International Freedom of Expression at the Electronic Frontier Foundation. For some reason – York doesn’t agree with her inclusion there – her name also appears on a list of so-called cypherpunks on Wikipedia. Cypherpunks advocate for security, encryption, privacy – three things York supported but had never made her main focus.

“Of course, I can’t edit myself off that list and I don’t identify as a cypherpunk, despite the fact that I’ve advocated for cryptography,” she said. Because she respects Wikipedia’s editing rules, York was technically forced into a group she didn’t want to join.

On Christmas Eve 2021, however, York and a number of security advocates and cypherpunks on that list appeared as NFTs on the token market OpenSea. The tokens included artist renditions of each of the cypherpunks and York’s card featured her signature buzzcut peeking out from what looked like a background of circuits and fingerprints. She was now part of another group she didn’t want to join: those whose art or work had been stolen to make NFTs. She was outraged. First, the photo the creators used was copyright-protected and not actually her property.

Second, they spelled her name wrong.

The card, which was based on a photograph taken by a professional photographer, featured the name Jillion York. Furthermore, alongside York and her colleagues, the NFT collection featured outcasts in the security space like Richard Stallman and Jacob Appelbaum. York and several other people depicted in the cards wanted nothing to do with them.

“I don’t approve of this whatsoever and would like it removed,” tweeted York on December 26. Many other supporters and victims popped up with similar comments. A back and forth with OpenSea and the NFT creator, a company called ItsBlockchain, answered requests to remove all of the NFTs.

Many saw the irony in having to visit a central location to destroy a decentralized asset.

“Pretty absurd, and distressing, that in the new realm of Web3 digital property rights people can have their identities tokenized, without their consent, and sold as tradable commodities for the profit of others,” wrote Jacob Silverman, an editor for the New Republic.

York’s ordeal was over almost as soon as it began. The creator of the NFTs, Hitesh Malviya, contacted York and others and agreed to take down the images. In a few days, they were gone, replaced by a Medium post in which Malviya wrote that his team wanted to “educate the young community in crypto about Cypher Punks and how significant they were to this date to the evolution of blockchain technology.”

“Unfortunately, many Cypher Punks were against this idea and didn’t want to participate in any way,” he wrote. “So we apologize to each and every Cypher Punk for not taking consent and creating your NFTs.”

Malviya was testy when I asked him about the NFTs and why he thought he could use private photos and information – essentially someone’s art – for this money-making venture.

“We were not aware of the likeness laws in NFTs as the market is not regulated,” he said in a direct message. “And we spent three months of resources and time to create an educational series and this NFT collection. We learnt our lessons. I hope you got your answers. No more comments.”

York’s situation and the resulting tumult of commentary is part of a growing and confusing part of Web 3: when everything is permissionless, when do you need to get permission to use someone’s face, art, or data? And, more importantly, what’s to stop bad actors from turning everything, from your t-shirt design to even your naked body, into an NFT?

Unfortunately, York’s situation is not new and it’s creating an entirely new industry and toolchain aimed at protecting creators from get-rich-quick NFT creators.

Another wholesale NFT heist happened in April 2021 when artist Qing Han aka Quinni’s work was stolen and reposted on the same platform that York used, OpenSea. Quinni, beloved by fans for her artistic takes health and chronic illnes, died of cancer in February 2020. After her death, her brother and fellow artist, Ze Han, maintained her social media accounts and posted her work.

A year later, thieves posted Quinni’s work anonymously. After fan outcry, the art was taken down off of various NFT sites, including Opensea, and, as of this writing, all of it has been ostensibly removed from the blockchain. Her brother refuses to take part in NFTs after the theft.

“A reminder to report any of Qinni’s artwork being sold without authorization,” wrote Ze Han on Twitter. “There are no legitimate avenues where Qinni’s art is being sold (this may change in the future).”

This case forced many creators to become educated in NFTs. Developers created a number of tools that help creators, many who have no interest in cryptocurrency at all, find their stolen art while Twitter feeds popped up to highlight the thefts.

One major figure in the online sharing community, DeviantArt, is familiar with wholesale art theft.

“We host over half a billion pieces of art on the platform,” said Liat Karpel Gurwicz, DeviantArt’s CMO “Over the years we’ve dealt with theft and it’s nothing new. It’s something that we’ve always dealt with being an online art community even prior to there being actual regulation around it.”

Most recently the company created a bot that searches for user art on the blockchain. The bot compares art on popular NFT sites like OpenSea with images by registered users. Using machine learning, the bot finds art that looks similar to art already posted on DA’s servers. It streamlines the takedown process as well, showing artists how to contact Opensea and other providers.

DeviantArt COO Moti Levy said that the system doesn’t yet discriminate between art posted by legitimate owners and hijackers.

“If we find something that is a near-identical match, we will update our users,” he said. “In some cases, it might be their NFT. We don’t know who minted it.”

The company is finding success with the tool. DeviantArt Protect has already found 80,000 possible infringement cases with a 300% increase in notices sent between November and mid-December 2021. The company has also added anti-bot tools that keep NFT creators from swooping up whole collections of art as NFTs.

Ironically, the decentralized markets selling NFTs are starting to centralize around one or two providers. One of the most popular, OpenSea, has a full takedown team dedicated to situations like York’s or Quinni’s.

The company has taken off, reaching a stratospheric $13 billion valuation after a $300 million round in early January. The company is far and away the biggest player in the NFT market with an estimated 1.26 million active users and over 80 million NFTs. According to Dappradar, the platform took in $3.27 billion in transactions in the last thirty days and managed 2.33 million transactions. Its nearest competitor, Rarible, saw $14.92 million in transactions in the same period.

OpenSea has been open about its place in the ecosystem and claims that it is managing takedown requests by artists as quickly as it can.

“​​It is against our policy to sell NFTs that violate the publicity rights of others,” said an OpenSea spokesperson. “We regularly enforce this in multiple ways, including delisting and banning accounts when we are notified that usage of a likeness is not authorized.”

Interestingly, the company also seems to be cracking down on deep fakes or, as OpenSea calls it, non-consensual intimate imagery (NCII), a problem that hasn’t surfaced widely yet but could become pernicious for influencers and media stars.

“We have a zero-tolerance policy for NCII,” they said. “NFTs using NCII or similar images (including images doctored to look like someone that they are not) are prohibited, and we move quickly to ban accounts that post this material. We are actively expanding our efforts across customer support, trust and safety, and site integrity so we can move faster to protect and empower our community and creators.”

OpenSea’s efforts haven’t satisfied plenty of artists, many of whom were already skeptical of NFTs before they saw their own work and colleagues’ work hijacked on their platform. Many users are still finding their art on OpenSea and, when they publicly complain, they are inundated with support scammers who purport to be official representatives of platforms like OpenSea.

Because of this mess, Levy at DeviantArt said the company is exploring NFTs but refuses to offer them yet. In fact, he thinks his users don’t want them.

“In the long term, we think that Web3 is interesting and has potential, but for us, it would have to be done in a better way and in a way that protected artists and empowered them, not in a way that puts them in danger.”

TechCrunch+ roundup: VC advice for CEOs, 2022 e-commerce trends, OpenSea’s valuation

Data privacy is top of mind for online sellers, and for good reason: Regulators in China, Europe and North America are taking an interest, and iOS 14.5 allowed many consumers to disable data tracking, with negative consequences for companies that relied on Facebook’s granular ad targeting.

Bearing those factors and others in mind, Ben Parr, president and co-founder of e-commerce marketing platform Octane.ai, shared his e-commerce predictions for 2022:

  • Personalization and zero-party data become critical.
  • E-commerce embraces web3 and NFTs, but what will that look like?
  • Live shopping goes mainstream.
  • Slow but gradual improvement to the supply chain.

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If you manage an e-commerce startup’s brand, this is a helpful overview; Parr even weighs in on whether startups need to begin putting NFTs on their virtual shelves this year.

“I’m also eager to see brands utilize tokens for loyalty and rewards, a topic I’ve heard people discuss but not yet embrace.”

My prediction: We’ll be running many articles in 2022 with tactics for zero-party data collection. Google temporarily postponed its plan to deprecate third-party cookies until the latter half of 2023, which means the ad tech landscape is going to undergo tectonic shifts.

We have more expert-written posts with 2022 predictions in the pipeline, so stay tuned!

Thanks very much for reading,

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

Making sense of OpenSea at a $13B valuation

NFT marketplace OpenSea’s valuation has skyrocketed, but at $13.3 billion, its revenue multiple isn’t very high when compared with other software companies, writes Alex Wilhelm in The Exchange.

“It appears that the new OpenSea valuation is cheap compared to recent fundamentals, but a little expensive when we consider how much its market booms and busts.”

After talking to marketing leaders for a year, here’s my advice for CEOs

paper head with puzzle pieces-Autism concept.Blue background

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

This is a fantastic time to launch a startup, but if you’re trying to grow one — well, winter is coming.

We’ve already noted the impacts of new data regulations and consumers’ growing desire for more privacy, but here’s another log to toss on the bad news fire: As a percentage of company revenue, marketing budgets plummeted from 11% in 2020 to 6.4% last year.

“This is the lowest proportion allocated to marketing in the history of Gartner’s Annual CMO Spend Survey,” the research company reported.

Rebecca Lynn, co-founder and general partner at Canvas Ventures, has had dozens of conversations with early-stage founders in recent months.

In a TechCrunch+ guest post, she covers the “downward pressure on the efficiency of marketing dollars” and shares several strategies that are producing results — as well as some “crazy” ideas “that seemed ridiculous at the time.”

Mark Cuban-backed fintech Dave’s public offering puts SPACs to the test

As a startup with relatively good financial performance, consumer financial service startup Dave could have bided its time for an initial public offering. Instead, it chose the SPAC route.

While the decision brought benefits, the fact that a cohort of less-than-stellar SPAC listings debuted at the same time brought some troubles as well, said CEO and co-founder Jason Wilk.

“If I could have done it all over again, I guess it would have been the same price discovery and guaranteed capital without the name SPAC associated with it, just because it’s been unfair.”

5 growth marketing predictions for 2022

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Our latest guest column with predictions for the coming year doesn’t just prognosticate: Growth expert Jonathan Martinez shares several tactics early-stage companies can use to capitalize on these trends.

Among other topics, Martinez shared methods for incrementally testing ads, his ideas about video ads and influencer marketing, and a few thoughts about Facebook and iOS 14 privacy changes.

“I believe we’ll start seeing heavy investments by Facebook and other social media platforms to keep users on their platforms, where they will still have access to first-party data,” writes Martinez.

Where will our data go when cookies disappear?

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Digital advertising has changed a lot in the past year, and it’s bound to change further when Google blocks third-party cookies from Chrome next year.

For publishers, it means advertising dollars should be spent wisely on strategies that maximize ad monetization without relying on old methods, writes James Avery, founder and CEO of Kevel.

In a deep dive of the changing ad world, Avery explains how publishers will have to prioritize first-party data to gather user insights, the importance of walled garden ad solutions, and why unified IDs are unsustainable in the long term.

Israel’s cybersecurity startups post another record year in 2021

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Israel’s cybersecurity startups raised a stunning $8.84 billion last year, more than triple the amount raised in 2020 ($2.75 billion), according to YL Ventures’ State of the Cyber Nation 2021 report.

“Cybersecurity in Israel has become a polarized market that accepts only two types of startups: potential unicorns and actual unicorns,” writes Yonit Wiseman, associate at YL Ventures.

VCs and founders are max bullish as public markets flash warning signs

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Public software stocks have lost a fair bit of value so far this year, but startup valuations continue to climb higher, seemingly unaffected by the markets’ declining opinion, writes Alex Wilhelm.

“Startups had best hope that private investors are right to index heavily on nascent growth rates over other traditional private-market metrics.

If not, everyone is going to be left holding some part of the bag when later rounds don’t consummate at higher prices.”

TechCrunch+ roundup: Less VC for SV, 2022 marketing predictions, GTM research strategies

Detroit became the center of America’s automobile industry largely for logistical reasons: its midwestern location, high population density and proximity to raw materials were just a few factors that assured investors it was an optimal spot for building an industrial hub.

Silicon Valley’s tech ecosystem, on the other hand, was initially seeded by military research and a surge in college admissions after the Second World War that fostered a community of technologists and investors.

But those aren’t permanent geographic traits like being close to ports or large deposits of iron and copper ore.

Decades after Palo Alto’s first garage startup, talent and capital has become more evenly distributed: This year, Bay Area startups only attracted 27% of all U.S. seed- and early-stage venture dollars.


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“It’s been more than 10 years since that percentage fell below 30%,” reports Mary Ann Azevedo, who analyzed “Beyond Silicon Valley,” a report released by investment firm Revolution and PitchBook.

She identified several factors pushing investors in major tech hubs to venture outside their own backyards in search of opportunities. Many readers may be surprised to learn which city is now the top destination for dollars from NYC and SF-based investors.

“This momentum we’re seeing now? You ain’t seen nothing yet,” said Revolution founder and CEO Steve Case.

Some might think “Silicon Valley’s share of US VC funding falls to lowest level in more than a decade” is a scary headline, but from my perspective as a resident, it’s great news. The San Francisco Bay Area has received tremendous benefits from making itself a magnet for technology talent and money, but it’s also had unintended impacts on the region’s infrastructure, housing and income inequality.

I mean, we have the best food and weather, but we certainly haven’t cornered the market on good ideas. If more people are starting up in cities like Cincinnati, Portland and Buffalo, not only will those communities benefit directly, we’ll also see new products and services that reflect a greater diversity of thought and location.

Thanks very much for reading, and I hope you have a great weekend.

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

3 disruptive trends that will shape marketing in 2022

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Since the pandemic began, the rules of the game for growth marketing have changed considerably.

Consumers are embracing Apple’s iOS 14.5’s privacy changes, regulators are taking a greater interest in browser cookies, and The Great Resignation are just a few X factors, but there are many others.

“What worked yesterday may not work today and likely won’t work tomorrow,” write Jonathan Metrick, chief growth officer at Sagard & Portage Ventures, and Simon Lejeune, user acquisition lead at Wealthsimple.

Here’s what they’re preparing for:

  • Less data, more privacy and the return of growth hacking.
  • TikTok, influencers and the dominance of native creative.
  • The Great Resignation and the Gettysburg for growth talent.

How to acquire customer research that shapes your go-to-market strategy

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A marketer is one of a startup’s most important first hires, but finding out just who your end users are and what they want from your product is even more important.

“You must first get to know your potential customer and what is going on in their life that will ultimately trigger them into using you,” writes Lucy Heskins, an early-stage startup marketing adviser.

Heskins shares three key questions that will help you better understand target customers, along with recommendations for how to apply the data you’ll gather in future marketing campaigns:

  • Why would a customer subscribe to your product?
  • What triggers your customer to decide your product is the one?
  • Who else are you competing against?

Dear Sophie: 2 questions about resuming consular appointments

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Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I sponsored my fiancé for a K-1 visa last year right before the pandemic. Unfortunately, the consulate canceled my fiancé’s visa interview and he hasn’t yet been able to get his visa.

Now that travel restrictions to the United States have been lifted, what’s the status of visa interviews?

— Pining in Pittsburgh


Dear Sophie,

I’m in the U.S. on an approved H-1B petition, but I don’t have an H-1B visa stamp in my passport. I want to visit my family in Mumbai.

Will I get a visa stamp in time to return to the U.S. within a month?

— Hankering for Home

The peculiar investment management industry

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Investment management is one of a few industries where a manager’s win comes at another’s loss, writes Versatile VC founder David Teten and Katina Stefanova, CIO and CEO of Marto Capital.

“If you eat a great steak dinner, it doesn’t imply that others have to eat hot dogs. In asset management, each new money manager who generates alpha (returns above the passive benchmark performance) does so at the expense of other managers who underperform.”

In the first post in a series that examines investment management, Teten and Stefanova give us a look at the current state of the industry and explain why it is primed for disruption.

Usage-based pricing is a company-wide effort

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In his latest guest post for TechCrunch+, OpenView partner Kyle Poyar explains why usage-based pricing “is a company-wide effort” that “requires ditching the old SaaS metrics playbook.”

It’s no fad: UBP went mainstream because SaaS companies that use it see dramatically higher growth and retention rates.

Citing examples from powerhouses like Twilio, Stripe, AWS and others, Poyar explains how UBP companies “share their customers’ success” and reduce their risk of ending up with a CRM packed “with lots of unprofitable customers.”

TechCrunch+ roundup: Credit Karma post-exit, recruiting developers, re:Invent recap

The same day in February 2020 that Credit Karma planned to announce that it had been acquired by Intuit for more than $7 billion, the stock market tanked, spooked by news that a novel virus had the potential to start a pandemic.

“I’m up at 5 o’clock in the morning, the Dow is flashing red … and we’re all like, ‘Are we going to do this?’” said Credit Karma CEO Ken Lin.

That deal eventually closed in December 2020, but in the intervening months, the U.S. Department of Justice forced the company to divest its tax business, and credit markets tightened considerably.


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Fintech reporter Ryan Lawler interviewed Lin, Intuit CEO Sasan Goodarzi, Credit Karma’s chief people officer Colleen McCreary and other executives to learn about how they weathered COVID-19 and divestment while simultaneously crafting a new management structure.

“What had been a very profitable business for a very long time is all of a sudden very unprofitable, because you can’t pivot on a dime,” said Lin. “We had a lot of decisions to make.”

Thanks very much for reading,

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

Samsara could become a decacorn in upcoming IoT-themed IPO

Initially founded to create wireless sensors, IoT platform company Samsara reached a $3.6 billion valuation in 2018, but its latest S-1/A filing could boost that “from $10.1 billion to $11.6 billion,” reports Alex Wilhelm in today’s edition of The Exchange.

Two weeks ago, he delved into the company’s inner workings, but “today, we’re more interested in the resulting numbers, not how they were achieved.”

AWS re:Invent 2021 was more incremental than innovative

AWS re:Invent 2021

Image Credits: Amazon

We’re used to Amazon making news: it’s the world’s third-largest company, and its founder is planning to build his own private space station.

But at last week’s re:Invent, the annual conference for AWS customers, “it felt more like Amazon was checking boxes and filling in holes in the product road map,” writes enterprise reporter Ron Miller.

After going virtual in 2020, this year’s in-person return to Las Vegas saw updates from incoming CEO Adam Selipsky, CTO Werner Vogels and others, but “nothing came out of the 2021 re:Invent that felt really cool.”

A few highlights: AWS unveiled the Gravitron 3, its latest Arm-based processor, along with re:Post, a managed Q&A service that replaces AWS forums, and Amplify Study, a no-code/low-code service for devs building cloud-connected applications.

But notably, “this is the first re:Invent in a long time where AWS did not announce a new database,” said Holger Mueller, an analyst at Constellation Research.

Ron’s recap of the week’s announcements — and the lack thereof — points to a company in transition: “Perhaps Amazon is becoming a bit more like Apple.”

Essential steps to thriving and surviving while fundraising

Close-Up Of Eyeglasses Against Grassy Field

Image Credits: Nilou Van Soest/EyeEm (opens in a new window) / Getty Images

For a founder, raising seed money can be the hardest part of the puzzle, and depending on the sector, can take dozens of weeks to accomplish.

A data-driven approach to the process, however, can help founders tackle fundraising efficiently while minimizing headaches, writes Russ Heddleston, CEO of DocSend.

“Having very clear data on where VCs focus their time on pitch decks or in meetings will guide you to deliver a finely tuned pitch to the right investor.”

3 ways to recruit engineers who fly under LinkedIn’s radar

Close-up of binoculars on table by the sea during sunset, the sunset is reflected in the glass of the binoculars (Close-up of binoculars on table by the sea during sunset, the sunset is reflected in the glass of the binoculars, ASCII, 113 components,

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

Last week’s announcement by LinkedIn that it would start offering its services in Hindi highlights a problem facing startups trying to recruit software developers — many of them don’t use the platform.

Potential hires who live in emerging markets are less likely to use LinkedIn, but a lot of devs just don’t take a strong interest in building their brands on social media.

Making an effort to meet developers where they are will help your company as an attractive place to work, writes Sergiu Matei, founder of Index.

In a TechCrunch+ post, he shares three tips you can use to attract engineers in an increasingly competitive market:

  • Open up your content, chats and code
  • Make EQ, not IQ, your hiring criteria
  • Say “yes” to more candidates

SenseTime’s IPO to test market demand for high-growth, high-loss shares in Hong Kong

The market is ripe for AI companies to go public, but for SenseTime’s Hong Kong IPO, demand may be less than that of the wider market, writes Alex Wilhelm.

The company’s new IPO target of up to HK$5.99 billion (US$768 million) is a far cry from its previous $2 billion IPO, possibly reflecting the fact that investors aren’t excited about its steadily increasing losses, Alex writes.

GitHub gets a new CEO

GitHub CEO Nat Friedman is stepping down from his role on November 15 to become the Chairman Emeritus of the Microsoft-owned service. Thomas Dohmke, who only recently became GitHub’s chief product officer, will step into the CEO role.

When Microsoft acquired GitHub in 2018, there was quite a bit of worry in the developer community that it would be an overbearing presence and turn the code sharing and collaboration service into a Microsoft-first platform. With Friedman, who thanks to his developer and open source background brought a lot of community goodwill with him when he took the job, GitHub remained independent and platform-neutral during his three-year tenure.

As Dohmke told me, that’s not going to change under his leadership. As he noted in an interview ahead of today’s announcement, Friedman had asked him to come on board after the acquisition. The German-born Dohmke is probably best known as the co-founder and CEO of HockeyApp, which Microsoft acquired in 2015.

“In 2018, Nat picked me to lead the GitHub deal from the Microsoft side,” said Dohmke, who had risen in the ranks of Microsoft’s developer division since the acquisition of HockeyApp. “It was a really exciting time for me. It was kind of like getting back to my CEO roots even then because I was leading all the different deal functions. GitHub has a lot of aspects outside of the product and engineering world that needed to be figured out. And then Nat asked me to join GitHub with him, which I gladly accepted. I ran strategic programs and special projects at GitHub.”

new GitHub CEO Thomas Dohmke

new GitHub CEO Thomas Dohmke

One of his first projects was to make private repos free for all developers in early 2019. And while most developers are probably aware of that, Dohmke himself admits that he doesn’t have the public profile that Friedman had when he stepped into the CEO role, but he stressed that his background as a developer and open source advocate fits into the overall line of GitHub CEOs of the past.

“I hope people will look back on the last few years with Nat as the leader of GitHub and be excited and grateful for all the things that have shipped and made GitHub a better place for software development,” Dohmke said. “I hope they’re looking back at this era as one of the great eras of GitHub. During the time of the Microsoft deal, people were nervous about what this will mean for GitHub’s independence. Are we getting closer to Microsoft? I think we have proven over the last few years that we will stay independent, that we will stay cloud-neutral and that we do the right thing for the developers and that we put the developers first. Hopefully, they see this transition as a continuation of the tradition of GitHub CEOs being developers. The previous CEOs, we are all developers, Nat was a developer, I’m a developer. I hope everybody’s excited about where we will go as a company and how we will innovate and make developers more productive.”

He did note that his overall style is a bit different, though, with his focus more on execution than necessarily being a visionary.

“Over the last few years that we have been working together very closely, a lot of our styles have aligned and we have very close conversations almost daily. I think Nat is a little bit more visionary and seeing the future — and I have a little more of the execution-style of focusing on what has to ship now. But I think we both share that we are very customer-obsessed,” Dohmke explained.

Looking ahead, though, Dohmke, who still likes to take on a few mobile-centric private coding projects in his spare time, isn’t planning to make any major changes right away. Instead, a lot of what he described is the continuation of the trajectory that GitHub is already on — and to continue its march to getting 100 million developers onto its platform. In his view, there are four pillars to this.

First of all, the company will continue to build out AI projects like Copilot. As Dohmke noted, in the last few years, GitHub worked a lot on the CI/CD side of software development — everything that happens after the pull request. “With artificial intelligence and Copilot, we’re bringing this to the inner loop, to what developers are doing on their laptops, what they’re doing in their editor,” he said.

The second pillar he described is Codespaces, GitHub’s cloud-based developer environment, backed by Visual Studio Code. The idea here, he said, is to ensure that GitHub can meet developers where they are — and free them from having to set up complex development environments for every new project.

The third pillar is, unsurprisingly, the GitHub community. “If you think about creator communities today, we think about TikTok, and YouTube and Substack,” he said. “But really, open source was one of the original creative communities going back to the ’90s. If you think about the early days of open source, the early days of Linux — this is all about creating stuff and sharing stuff with the world and partnering with each other to create this universe of software. And so we think GitHub is becoming more and more of a creative community, or, if you will, it was one of the original creator communities when it started in 2008.”

Security, in Dohmke’s mind, is the fourth pillar for GitHub to build on top off — and that has obviously been a focus for the company for a while. Dohmke himself helped lead some of the acquisitions in this space, including the Dependabot and Semmle acquisitions in 2019.

Dohmke only became GitHub’s CPO in August, and it looks like he didn’t expect to be in this new role quite this quickly.

“In August, I didn’t know that I would already become the CEO, but from talking to Nat as a friend, from talking to Nat as a peer, a partner within GitHub, I knew at some point that his heart is elsewhere and he wants to go back to his entrepreneurial roots and explore the startup scene more,” Dohmke told me. “So this has been for a while coming and we were preparing for an orderly transition.” As part of his role in the GitHub leadership team, he had already been in all product reviews for the last three years.

Friedman confirms that he wants to return to the startup scene. “With all that we’ve accomplished in mind, and more than five great years at Microsoft under my belt, I’ve decided it’s time for me to go back to my startup roots,” he writes in today’s announcement. “What drives me is enabling builders to create the future. I’ve loved working with and learning from developers who are building new tools and new projects, solving thorny problems, and creating magic out of code. That’s why I’m moving on to my next adventure: to support, advise, and invest in the founders and developers who are creating the future with technology and tackling some of the biggest opportunities of our day.”

It’s hard to blame him. He sold the Xamarin to Microsoft in 2016 and stayed longer than most would’ve expected. In part, that’s surely due to the fact that he was offered the role as GitHub’s CEO. We’ll keep an eye on what he does next. There is a good chance it will involve a monkey as a mascot, after all.

Writing helper Copy.ai closes on its second funding round this year

On the one-year anniversary of Copy.ai’s launch on Twitter, the company, a GPT-3 AI-powered platform that generates copywriting tools for business customers, secured another round of funding.

This time, the company brought in an $11 million Series A round, led by Wing Venture Capital, with participation from existing investors Craft Ventures and Sequoia, and new investors including Tiger Global and Elad Gil. This follows a $2.9 million seed round announced in March and brings the company’s total funding to $13.9 million.

Copy.ai’s software costs $35 a month and can, for example, write a blog post outline based on a few sentences and create link descriptions for Facebook ads and even generate a company motto.

A year since CEO Paul Yacoubian and Chris Lu co-founded the company, it is seeing $2.4 million in annual recurring revenue. Not profitable yet, the company did double its revenue over the last year and went from three employees to 13, Yacoubian told TechCrunch.

Though it raised funding earlier this year, he and Lu felt the time was right to go after a Series A to expand the team and hire more engineers to provide capacity for new product features. One recent feature is Editor, which enables users to organize thoughts, save ideas and edit notes directly in the app. Copy.ai is also developing products for long-form content creation.

“AI is good at pattern-matching, and when you feed it more information about a business, it can assume the identity of the business, so we are also building a teams product so as the AI learns more, you can invite other business users to sign up, too,” Yacoubian added.

The company will be investing the new capital into hiring. It is a fully remote team with employees all over the country. Copy.ai already has over 300,000 marketers using its tools, like eBay, Nestlé and Ogilvy. Over 3,000 have signed up for a free trial since the seed round and it has more than 10,000 premium customers.

Copy.ai is early into AI natural language generation, something Yacoubian said the company is just scratching the surface of, so it will continue to improve the core app experience and the quality of the text that is generated.

The founders also hit it off with Wing Venture Capital partner Zach DeWitt, who Yacoubian said understands the company’s vision and how well artificial intelligence can help marketers.

“While looking at the creative capacity of AI, we hear a lot about automation taking away jobs, but not a lot of narrative to create value for yourself or your company,” Yacoubian added. “If AI progresses, it will be a source of empowerment and another tool that has uncapped potential. It is interesting in how it can unlock human capital, and in a smaller company that can’t afford full-time agencies, provide a quick, simple tool that solves their problem.”

DeWitt said customers are fully moving online as digital penetration increases, and companies have to meet customers where they are, whether that be newsletters, blogs, social media or email.

In speaking with small business customers of Copy.ai, he got a sense that  the amount of written content is overwhelming to some, and to enable marketers or founders to write a great piece of copy, using AI is the best way to do that.

DeWitt, himself, used the product to generate his initial email to the company. He also writes a weekly blog and is active on Twitter, so Copy.ai’s products have come in handy as he thinks about blog post ideas and content formats, he said.

He added that the company is one of the fastest-growing that Wing had come across for a company this young. They are also leveraging social media to make their metrics public, which in turn generates loyalty and provides a way for them to learn in public as well, something that initially attracted Wing to the company.

“This round was massively oversubscribed, so you can get a sense of the interest in the company, the quality of the team and their traction,” DeWitt added. “Chris and Paul had the luxury of being selective in the investors they chose to set them up for future success.”

 

Creator tools startup Spore raises $1M to build closer bonds between influencers and their fans

Few spaces have grown hotter in the past year than the creator economy has, but for all of the new tools available to those starting a podcast, newsletter or storefront, most players have been more focused on building out their own platform opportunity rather than selling full independence to creators.

Spore wants to transform the creator web experience into a Shopify-like basket of tools that users tap into to connect with their audience across a variety of mediums. Spore CEO Austin Hallock is looking to compete with other creator giants for the “link in bio” real estate on social media sites with a white-label option that uses a creator’s own URL, selling an easy-to-build hub focused solely on connecting personalities with their fans.

With Spore, users can manage their audience, communicate with them and analyze what is and isn’t working.

The platform allows for blasting out newsletter updates, podcasts or texts while embedding functionality like storefronts or Discord-like chat feeds into their sites to keep the interactions going 24/7. Creators can also use the tool to convert free subscribers to paying ones, managing the payments flow while also building flows to allow creators to send certain content to their paying fans.

The small startup has raised a $1 million pre-seed round led by SignalFire with additional participation from Justin Kan & Robin Chan’s GOAT, Canaan, Lenny Rachitsky, Nathan Baschez, Justin Waldron and Dave Nemetz, among others.

Spore’s creator platform backend

It’s the first lead investment for former TechCrunch editor Josh Constine in his role at SignalFire (full disclosure: I used to work closely with Josh). Constine started using Spore to build out a site for his regular show on Clubhouse, fellow investor Justin Kan also grew familiar with the team by building out a website for his podcast and YouTube channel.

“I chose Spore as my first lead investment as a VC because it solves creators’ biggest problems by giving them their own white-labeled website they control, and combining all the best content, communication, analytics, and payment tools so creators can spend their time making art instead of being web developers,” Constine tells TechCrunch.

Spore is certainly a small-scale operation at the moment with 4 full-time employees, though they’re hoping to grow their team with this raise. All of these features are in their early MVP stages, but Hallock wants his company to continue building out its utility to creators so that they can build a direct connection with their fans, one that isn’t obfuscated by algorithms..

“We definitely want to give creators ownership,” Hallock tells TechCrunch. “Today, you’re promoting your Linktree page or Patreon rather than just promoting your own brand… We don’t want it to be about Spore.”