Tag: harvard

Posted on

Seeking product-market fit in a down market? Hire freelancers to manage your burn rate

Dean Glas Contributor
Dean Glas is co-founder and CEO of SellX, a modern sales platform connecting companies with an on-demand sales force to drive revenue.

Winter is coming for the global economy: 8% inflation, China in lockdown, a war in Europe, plunging capital markets, a pandemic that won’t end, and a looming recession.

But for the tech and startup world, winter is already here. The stocks of public software companies have fallen 80% to 90% from their highs, startups large and small are laying off workers in droves, and VCs are publishing a slew of blog posts and PowerPoint presentations advising their portfolio companies on how they will need to survive for years without new funding.

The tone of the moment is that of uncertainty — the likes of which most of us have never experienced. No one knows how bad things will get or for how long. The rational response for many leaders is to batten down the hatches and prepare for the worst. This means canceling investments, freezing new hires, and conserving cash.

However, prior recessions have taught us that the companies that cut the fastest and deepest — slashing costs, laying off workers — are not the ones to thrive on the other end of recessions. By going on a starvation diet, they become weak, and have less ability to seize opportunities as the economy bounces back.

Layoffs are particularly destructive to company culture, lowering morale, engagement and productivity among remaining workers. They diminish internal corporate know-how and damage the image of the company with customers. The net result is that companies that resort to layoffs to survive adversity often end up less profitable and can struggle for years to regain their footing.

Limiting the number of full-time employees and using freelancers is one way startups can play both defensively and offensively to increase their options while controlling costs.

The takeaway? Playing defense in a downturn is not a recipe for success.

Often the companies that come out on top are the ones that find ways to play defense and offense at the same time. They end up taking market share from competitors and put themselves in position to dominate in the boom that inevitably follows.

This is not an easy balancing act. In the 2010 Harvard Business Review study, Roaring out of Recession, the authors found that a key element of success was the ability to reexamine and reconfigure the entire operation to reduce costs and increase flexibility.

For startups at the Series A or earlier stages that have a war chest of cash, there is a way to easily extend runway while maintaining flexibility and optionality: freelancers

Freelancers can help keep your company’s burn rate low if you employ them for rigorously defined and budgeted projects. The scope and spend can be limited until there is clear ROI at a small scale. Once positive unit margins can be validated and revenue models become clear, freelance talent platforms can enable a working strategy to be scaled flexibly.

Posted on

Go1 nabs $100M at a $2B+ valuation to upgrade its curated enterprise learning platform

Online education continues to get a lot of attention in the wake of Covid-19 and the shift it brought to how people can learn. And to underscore that fact, Go1 — one of the rising stars in the world of enterprise learning, providing education and training to businesses in turn to offer to its employees or users — is announcing a significant round of $100 million, at over a $2 billion valuation, to fuel its growth.

The funding — which closed in May — is being co-led by AirTree Ventures and Five Sigma, with SoftBank Vision Fund 2, Salesforce Ventures, Blue Cloud Ventures, Larsen Ventures, Scott Shleifer and John Curtius from Tiger Global, TEN13, M12 – Microsoft’s venture fund – Madrona Venture Group, SEEK, and Y Combinator also participating. (The company was part of a Y Combinator cohort in 2015.)

For some context on that valuation, Brisbane, Australia-based Go1 has now $400 million to date. And when it last announced funding less than a year ago, a $200 million round July 2021 led by SoftBank, it was valued at half that amount, $1 billion.

That’s a notable increase, in particular when you consider not just the current constricted state of the funding market, but the fact a number of big players in online education have seen their fortunes contract in recent months compared to the booms they saw leading up to and during the pandemic (some perhaps due to overall market pressures, some as part of what appear to be wider macroeconomic and consumer changes).

The core of Go1’s product is a platform in which it brings in content from dozens of other providers — they include companies like Blinkist and Thrive as well as Skillsoft, Pluralsight and Harvard Business Publishing. Go1 aggregates and curates the content, the idea being that that its customers — which include companies that range from the likes of TikTok through to the Singaporean government — can ink a deal to be able to access that educational and training content without having to ink all of those agreements themselves.

At a time when there is a lot of fragmentation and many options for e-learning, that approach has seen a lot of traction, largely to fill needs in three categories: training, upskilling, and more general education to attract and retain talent. In the last year, CEO and co-founder Andrew Barnes told me in an interview that Go1’s revenues, customers and learners all doubled, and it now has some 5 million learners taking courses through its platform,

And while most of its growth to-date has been organic, it will be using some of the funding potentially to bring some inorganic growth into the mix. It’s already doing some of that: in April, it made an acquisition of French-Swiss edtech B2B edtech startup Coorpacademy to expand deeper into francophonic markets.

But Go1’s ambitions extend beyond that: it also plans to use some of the funding to further explore how it might extend its platform beyond corporate learning as well.

“Right now our learners come to us through their employers, but we want to have a relationship outside of that context,” Barnes said. That is dovetailing with another ambition, he added. “Internally, we are considering how to provide education to everyone without pricing them out. If we do something in consumer, we would want to make that a target. It would be quite a different product.”

Another area where it would like to use investment is to bring more technological innovations into the Go1 platform. One of these is likely to be more VR-based learning, Barnes said; another is to build out more live streaming to complement the existing catalogue, which is based today around asynchronous content.

Online education definitely got a boost during the pandemic both for emerging as a necessary tool for students to continue learning; but also as a critical route for helping organizations keep their workers connected to company culture, trained in new skills, and more at a time when they too were less able to assemble in person. Interestingly, while Barnes acknowledges that the pandemic definitely brought remote learning into focus, the market for online education in the workplace was already a thriving one pre-Covid.

“Companies are embracing the opportunity to programmatically upskill, reskill and empower their workforces, and Go1 has emerged as the go-to provider of learning content to make that opportunity a reality,” said Craig Blair, Founder at AirTree Ventures, in a statement. “We’re delighted to be a part of Go1’s global journey in building an enduring company at the helm of the Learning & Development ecosystem.”

Similar to others in the same space such as Odilo (which announced funding just last week), Go1 positions itself as a kind of Netflix or Spotify, aggregating and curating content for its customers. Unlike Odilo, Go1 keeps its branding intact throughout the experience, more like a YouTube. Barnes said there are no plans to move into a completely white-label product.

Posted on

The IRS’s crypto tax partner, ZenLedger, raises $15 million Series B

Government tends to struggle when it comes to keeping up with tech innovation. The past U.S. tax season that just wrapped up in April was particularly stressful for investors and the Internal Revenue Service (IRS) alike, as both struggled with the implications of 2021’s crypto investing boom.

The IRS, for its part, turned to Seattle, WA-based startup ZenLedger for help. Since its founding in 2017, ZenLedger has managed to secure four contracts with the U.S. government worth just over $500,000, none of which are expected to expire, the New York Times reported. While $500,000 seems like a paltry sum for a federal agency, the contracts are significant in the small, hypercompetitive world of crypto tax prep startups. Heading into this year’s tax filing period, ZenLedger had raised just $11.5 million in its latest funding round — significantly less than competitors such as CoinTracker and TaxBit had in their coffers at the time.

Still, ZenLedger gained the trust of the U.S. government, and it’s been doubling down on that strategy ever since, its CEO and founder Pat Larsen told TechCrunch. The company announced today that it has taken in $15 million in fresh funding from investors through a Series B fundraise.

ZenLedger founder and CEO Pat Larsen

ZenLedger founder and CEO Pat Larsen Image Credits: ZenLedger

New investor ParaFi Capital led the round alongside existing investor Bloccelerate VC, which led ZenLedger’s Series A last August. A mix of old and new investors also participated, including King River Capital, G1 Ventures, Main Street Investment, Three Point Capital, Shorooq Partners, VaynerFund, Blizzard the Avalanche Fund, and AngelList Quant Fund, the company says.

“We are moving ahead with more government contracting, which is interesting, because, basically, what we do is we build a plan for crypto. We have to ingest all the transactions from on-chain off-chain, NFTs, decentralized exchange income, sales of NFTs, and clean that up and then report it out,” Larsen said. “That turns out to be extremely useful for an individual when you do accounting and tax. It also turns out to be very useful for accounting firms.”

ZenLedger’s historical focus on individual tax filers rather than enterprise contracts differentiates it in some ways from competitors like TaxBit too, Larsen said. Still, Larsen added that ZenLedger is used by “Big Four” accounting firms, ultra-high-net-worth tax practices and CPA firms.

As for other competitors like TokenTax and Koinly, Larsen said ZenLedger aims to win by building out more, and better, integrations. The company supports over 500 exchanges, 50 blockchains, and 40 DeFi protocols including NFTs today, it says. While Larsen didn’t share details on how much ZenLedger makes in revenue, he said that its revenue has grown 5x from last year.

The company announced it had hired multiple C-suite executives in April, including a CTO and CFO.

The latest funding comes about a month after ZenLedger landed in the spotlight because its former COO, Dan Hannum, was found by the New York Times to have misrepresented his educational and work credentials to the company itself, investors, and the general public. ZenLedger found out about Hannum’s untruths well before the Times article went up and immediately fired Hannum, Larsen said.

In its April announcement, the company said it had hired Greg Adams, an army veteran with an MBA from Harvard, to serve as its new COO. Larsen said the situation with Hannum didn’t affect investors’ attitude towards the funding round, and that ZenLedger had already secured ParaFi as a lead investor before Hannum’s misdeeds were made public.

“Some investors can be pretty fickle, but we didn’t have low conviction investors. We weren’t the super-hot deal where people just wanted to get in because Tiger Global is here or something,” Larsen said. “[Our investors] weren’t here just because other people were in. They were in because they really liked the team and the business. We weren’t any individual token that had some rug pull that just explodes the whole value proposition…nothing changed materially about the business.”

5 crypto tax tools that could save your ass on Tax Day

Posted on

a16z debuts new crypto research team led by Columbia, Stanford researchers

In the world of crypto, where vast amounts of investment are pouring into young and scrappy teams building uncharted technology, it’s increasingly the VC firms who are investing heavily in research to sweeten their sell to early teams with plenty of offers on the table.

On Thursday, venture firm Andreessen Horowitz announced that it was building out a dedicated crypto research team led by faculty from Columbia and Stanford. A blog post from a16z GPs Chris Dixon and Ali Yahya notes that the research team will be tasked to “work along with the founders in our portfolio on solving some of the hardest problems in web3.”

The organization will be led by Columbia’s Tim Roughgarden and Stanford’s Dan Boneh. Joining the founding team are Harvard’s Scott Duke Kominers, Meta’s Valeria Nikolaenko, author Joseph Bonneau and researcher Benedikt Bünz.

The research team marks another maneuver from the storied venture firm to shore up its dominance in a competitive crypto investment landscape where younger funds are proving themselves increasingly formidable opponents. Research has become an increasingly important differentiator for venture firms in the crypto space who are working with founders pushing up against new and unfamiliar technical problems that require research that many young startups can’t always afford to tackle.

Andreessen Horowitz is not the only firm eyeing research labs. Paradigm, which has quickly grown to build an outsized presence in the crypto VC space, has largely built its reputation on the strength of its own research team. On a call with TechCrunch, Yahya sought to distinguish a16z’s new organization from early efforts at firms such as Paradigm.

“So many people in this space claim to have research and I think the big difference here is that this is ‘capital R’ research, and it connects basically world-class talent at the scientific academic level, with world-class talent at the engineering level, with the best and most interesting problems in the space through the portfolio,” Yahya said. “We’re really looking at this as a first-class organization, and we will see it scale far beyond anything that really exists within the context of any other venture firm.”

Andreessen Horowitz unveils piloted program for early-stage entrepreneurs

Nukes, NFTs and Meta’s income tax

Posted on

Blidz, a European Pinduoduo clone, raises $6.6M to expand its social shopping app

Gamification and social hooks have become cornerstones across every category of consumer apps these days, and today one that’s using these to build out a new e-commerce platform is Europe is announcing a seed round to give its growth a boost. Blidz — a social shopping app that offers big discounts (many items in categories like jewelry, clothes and gadgets sell for just $0.99 on there) on goods based on how many people are coming together to buy them, and then presents users with a selection of games on top of that to unlock more deals — has picked up €6 million ($6.6 million at today’s rates) in a seed round of funding after seeing its early growth reach 50,000 monthly users.

General Catalyst — one of the group of VCs out of the U.S. that have turned increasing attention to backing startups out of Europe in recent years — and European VC Peak are co-leading this round, with D4 Ventures, Fabric Ventures, FJ Labs and previous backer IPR.VC also participating, along with a few individuals: Youngme Moon (the Harvard professor who focuses on the digital economy), Christopher North (formerly a longtime Amazon exec, now primarily an investor) and Don Hoang (the ex-Uber and Revout exec).

If you are au fait with the world of social shopping and the description of Blidz sounds a little familiar to you, it might be because it is in large part a clone, specifically of Pinduoduo, the wildly successful gamified social shopping app in China, which CEO Lasse Diercks, who co-founded Blidz with Markus Haverinen (CPTO), cites as a direct inspiration.

“We saw the trend of Pinduoduo, learned how the model worked, built it and sent it out to the market a little over a year ago,” he told me matter-of-factly in an interview the other day.

Pinduoduo’s fortunes and challenges are bookends worth contemplating with thinking about Blidz: the Chinese platform currently has a market cap of nearly $60 billion (it’s listed on Nasdaq in the U.S.) and nearly 870 million active buyers — although recent growth has been slowing on the back of more competition and the weaker performance of China’s economy overall. That speaks of a lot of potential for Blidz, but also some of the same growth issues longer term.

The longer-term challenges, however, seem to be a far-off consideration at the moment for a startup that is only a year old. Like Pinduoduo’s founder Colin Huang, Diercks tells me he saw an opportunity to provide a different offering to the market beyond the domination not just of Amazon but the Amazon approach to e-commerce that was essentially being repeated by other marketplace platforms (build for scale with a huge number of SKUs, optimize around personalization, search and ads to surface products to potential buyers, improve margins by providing your own products alongside these and/or other logistics economies of scale).

“Our vision is to liberate Western consumers,” Diercks said. “We want to offer the western consumers better and less expensive shopping experience.”

In his view, that offering is addressed in two ways. Firstly, it’s about the front-end experience. Using gamification (currently there are four games on Blidz, and there will be more coming), Blidz also uses social hooks (share your deal on your timelines and in messaging to friends and groups!) respectively to engage users, getting them to create their own network effect by recommending products to people they know over other social channels, and for people to be won over to buying goods by seeing how many others are also buying them, and the price lowering as a result.

(That indeed has been a trick used in the pre-internet days, too, initially pioneered by home shopping live TV shows where people phoned in to buy goods.)

Secondly is the choice that Blidz, like Pinduoduo before it, is making to accept a much lower margin on sales in exchange for selling more goods.

Translating that to today’s internet landscape in regions like Europe and the U.S. was a no-brainer since the market has so little variety in it at the moment.

“Sixty percent of e-commerce in Europe today is dominated by Amazon, and then a long tail of others like it. We believe that there is a monopoly in price extraction,” he said. “In the end, that’s the vision of the company, to offer Western consumers a better and less expensive shopping experience.”

The solution, he believes, is to accept a much smaller margin on goods sold and aim for simply selling more of them to make up the difference and then some. China’s Pinduoduo, he said, sometimes makes as little as 0.5% off a sale. “This is a 60x difference compared to for example Wish.”

China is playing another key role for the company beyond being the market that birthed the platform that is Blidz’s inspiration: it’s also the key country in the supply chain for goods that are sold on Blidz. That’s reality commerce for you: although there are definitely signs of some startups building business models that nurture more manufacturing and goods production closer to those who are making purchases, China remains a critical supplier for the wider consumer market, and will be for a long time.

“We are building a supply chain in China where we have a team ex-Wish guys. They are building this for us,” said Diercks. This is not about buying cheap goods, but tapping into a newer generation of products coming out the country’s factories that are just as good and sometimes better than the average offerings. It then buys these in bulk, in a concept he described as “quality-to-price.”

“We don’t want to work with every supplier. We want to work with a select number,” he said. And that constrain of supply appears to be giving Blidz better bargaining power, he said. “They are waiting to come on board. The end vision is to be the Shein of this space,” he added, referring to the Chinese fashion sensation that has leveraged its own direct relationships with clothes and accessory manufacturers to source a higher level of quality, and then sells those goods directly to consumers itself.

The social shopping space is littered with a lot of businesses that appeared to be rocket ships, only to fizzle out their engines before reaching long-term, stratospheric orbits. Diercks doesn’t believe that Pinduoduo, and now Blidz, are comparable to these. “We don’t believe that Groupon or LivingSocial were ever really that social,” he said, because they never truly leveraged people’s own social graphs in their selling approaches. They are also more focused on experiences rather than products in their DNA, even if more recently Groupon’s goods business has shifted that somewhat.

The potential here of building out that model to more markets and possibly picking up more localized variations along the way, and picking up what looks like a base of loyal users up to now, have together been enough to sell the idea to top investors willing to take a punt on it.

“The Blidz founding team has a number of unique insights relating to the evolution of online commerce,” noted Adam Valkin, MD of General Catalyst, in a statement. They are creating a new customer experience in the West by combining social media, gaming and shopping into a data-driven entertaining and easy-to-use platform. We’re excited to see what emerges from this talented team.” 

Posted on

Daily Crunch: 2 months after launching, São Paulo-based payments startup Yuno raises $10M

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PST, subscribe here.

Hello and welcome to Daily Crunch for Thursday, March 10, 2022! Am writing to you after coming off a live taping of Equity, which means I am still full of adrenaline. Doing stuff live is really good fun, which is why I am pleased to bring you a raft of news about our upcoming live events! TC Sessions Climate is coming; OpenView Ventures’ Kyle Poyar is coming to Early Stage to talk software pricing; and we just announced that Luminar’s Austin Russell is coming to our upcoming mobility-focused event. TechCrunch is going to have a busy darn year. We can’t wait to see you! – Alex

The TechCrunch Top 3

Startups and VC

Much is going on as always, but let’s flip the script and start with some venture news before we delve into startups, yeah? TechCrunch wrote about Antler East Africa, which just put together a $13.5 million fund for early-stage startups. The company is a blend of venture fund and accelerator, we report.

Moving on, let’s knock out the day’s huge rounds: Up first is Lunar, a Nordic neobank. It just raised a $77 million round at a $2 billion valuation. As part of the news, Lunar also released crypto trading and a B2B payments service. And people said that neobank fundraising was dead! Also out today was news from Stilt, which raised $114 million in equity and debt for its credit API. Furthermore, Typeform raised nine figures. The company reached $70 million ARR last year.

Now, the rest of the news:

  • Zeta raises for surgical imaging tech: Boston-based with the requisite Harvard pedigree, Zeta Surgical came out of stealth this week with $5.2 million in funding and a goal of “delivering precise surgical imaging guidance for non-invasive surgeries performed outside the operating room,” we write.
  • Curacel wants to help tech companies offer insurance: Speaking of startup niches that you might have thought were done raising capital for a bit, insurtech, like neobanks, is also not dead! Curacel offers an API that allows other firms – fintech, e-commerce, etc. – to offer insurance products.
  • Sure, Mobileye is going public, but Autobrains is like bring it: Israel-based Autobrains has raised a $19 million round at a $120 million valuation to keep working in making self-driving cars work. Sure, Mobileye could be worth $50 billion. That isn’t stopping smaller firms from claiming their bite on the apple.
  • Don’t reinvent Excel, just amend it? That appears to be the pitch that DataRails is making to finance types who live in the well-known Microsoft spreadsheeting app. Many startups are building stuff to get folks out of spreadsheets. It’s neat to see a company not take that approach.

And to close us out, Instacart is building out features for its in-store shoppers. Our growth questions about the company remain.

How to calculate your startup’s TAM, SAM and SOM

For many first-time founders, calculating the size of the market in which they hope to compete is one of their biggest challenges.

Calculating TAM, SAM and SOM sounds like an existential exercise, but there’s no need to dread it “if you approach market sizing methodically,” says Marjorie Radlo-Zandi, a veteran investor and entrepreneur.

In a comprehensive article for TechCrunch+, she breaks down the steps required to capture these key metrics that “show prospective investors how they stand to gain from investing in your company, and put yourself in the best possible position to achieve your goals.”

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

How to calculate your startup’s TAM, SAM and SOM

Big Tech Inc.

  • Twitter makes it easy to swap modes: One thing I love about Twitter is the fact that I can get my tweets in time-series format. It’s the only way that I want to interact with the service. But some folks prefer to have Twitter’s overlord robot (read: algorithm) do the sorting for them. Now you can swap between the two more easily in its app.
  • Hey Google, pay for my parking: Sadly, Google won’t lend you its debit card, but the company’s mobile OS will now work with ParkMobile to let users pay for parking more easily. If this works, let it spread.
  • DoorDash wants to help you return packages: The market for food delivery is not infinite. And with multiple competitors in nearly every market you can name, it’s competitive to boot. And with public-market growth expectations thrown in, you can’t be shocked that DoorDash is looking for TAM boosters.
  • Google to work on data portability: Major platforms don’t want your data to leave their domain. After all, data is power and companies want more power, not less. But Google is working on the matter after tech has scuffled with the EU over data issues in recent years, we report.
Posted on

Zeta Surgical comes out of stealth with a $5.2M raise for image-guided surgery

Boston-based Zeta Surgical comes out of stealth this week, with the announcement of a $5.2 million seed round. The funding, led by Innospark Ventures, follows a $250,000 pre-seed featuring Y Combinator and Plug and Play Ventures.

The company was founded by Harvard graduates Jose Maria Amich and Raahil Sha, who currently serve as CEO and CTO, respectively. Harvard Medical School Associate Professor of Neurosurgery William Gormley serves as the company’s chief medical officer. The team’s mission is delivering precise surgical imaging guidance for non-invasive surgeries performed outside the operating room.

Beginning with procedures like ventriculostomy and neuromodulation, Zeta believes its technology can help democratize such procedures by offering more precision and lowering the barrier of entry.

“There is this giant disconnect between the precision we have on one hand, and the complete lack of technology and precision we have for the other group of surgeries,” says Gormley. “The reason for that is that lots of these are emergent, and the technology has just not been developed to take care of that group of patients. What [Amich and Sha] have brought is technology, which we can apply very quickly and with very little of a surgical team on a patient that’s awakened and actually moving around. It’s hard to overstate how different that is from what we’re doing. It completely changes everything for that group of patients.”

Image Credits: Zeta Surgical

The Zeta system includes a mixed reality overlay designed to help a surgeon pinpoint minimally invasive neurosurgery procedures. That’s combined with an optional robotic system that utilizes an off-the-shelf Doosan robotic arm combined with proprietary tools. The team says they’ve explored headsets for imaging, but believe the technology isn’t yet accurate enough for such surgeries.

“We have considered both AR and VR systems, but for the moment, we’re going with the standard screen-based navigation,” says Sha. “Some of that is technical — AR systems don’t really have the accuracy required for surgical-grade precision. We could do an AR overlay, but it wouldn’t be as accurate as we need for neurosurgery.”

The startup has completed pre-clinical studies in both Boston and Singapore as it eyes the North American and Asian Markets. The team is planning to file for approval with the FDA early this year, with hopes of launching a commercial version of the device in late summer/early fall, if approvals go according to plan.

“This current round is focused on two core deliverables: completing our initial set of clinical trials for the device,” explains Amich. “And the other is to take the device through FDA clearance and launch with our initial set of clinical partners, after the approval comes in. A huge part of this is completing the full development of the system, which will involve expanding our team and hiring new engineers.”

Posted on

The idea that university degrees don’t matter is a Silicon Valley fantasy

Jamie Beaton Contributor
Jamie Beaton is the author of “Accepted! Secrets to Gaining Admission to the World’s Topic Universities,” and is CEO of Crimson Education, a university admissions consulting company.

Silicon Valley loves to celebrate the cult of the dropout — the inspired entrepreneur who decides that traditional education isn’t for her because it teaches her nothing of relevance, slows her down, and, in a world of readily available information, no longer gates learning resources like it once did.

Legendary advocates of the dropout cult range from Peter Thiel, whose Thiel Fellows program pays students to take a year out of college, to informal mascots like Mark Zuckerberg and Bill Gates, who never completed their college degrees but actually vigorously advocate for higher education.

My perspective on college admissions is informed by supporting thousands of ambitious students globally aiming to get into the world’s best universities and then seeing what happens next in their careers. Unless you are born into a privileged, well-connected family with substantial capital (which is often the vantage point many of the dropout cult advocates come from), your undergraduate degree from a top university is the most powerful socioeconomic opportunity that exists.

Silicon Valley’s undisputed leading startup accelerator is Y Combinator. Its prolific success ranges from huge hits like Coinbase, Brex, DoorDash, Airbnb and many more unicorns. Young aspiring entrepreneurs apply for Y Combinator in the hopes of receiving seed funding, mentorship and networking opportunities to help create the next unicorn.

To understand the cult of the dropout, I took a deep dive into who actually succeeds at Y Combinator, and the results nearly made me fall out of my chair – and I was already a big proponent for undergraduate degrees.

The dropouts are no ordinary dropouts – they had won places at the most prestigious universities in the world and took high school extremely seriously.

Firstly, demographics: The average Y Combinator founder that created a unicorn was 28.1 when they launched their company. However, the average Y Combinator founder of consumer technology unicorns was 22.5 (fresh out of college). When the founders of these companies are so young, often with no experience, you have to ask: How can Y Combinator bet so confidently on these talented young people? What is the signal that gives away their ability?

Image Credits: Jamie Beaton

The answer, in large part, lies with their degree. Only 7.1% of co-founders did not go to university. Only 3.9% of co-founders dropped out, and all of them left well-known institutions like Harvard, Stanford or MIT; gaining admission alone sends a powerful signal of their academic abilities. The dropouts are no ordinary dropouts – they had won places at the most prestigious universities in the world and took high school extremely seriously.

As for the vast majority? You guessed it: 35% of founders went to Harvard, Stanford, Yale, Princeton, MIT and UC Berkeley, while 45% of co-founders went to an Ivy League school, Oxbridge, MIT, Stanford, Carnegie Mellon or USC. Among co-founders who started their company before the age of 25, more than two-thirds went to an Ivy League school, Oxbridge, MIT, Stanford, CMU or USC. MIT is the most common university co-founders went to, followed by Stanford and UC Berkeley.

Where else did they go? A vast majority of the Indian unicorn founders went to the Ivy League of India: the Indian Institutes of Technology. Founders didn’t just stop at undergrad degrees – 35.7% of co-founders completed some form of postgraduate education.

In my book, I offer a key explanation for this phenomenon: signaling. This is a term coined by Gary Becker, a Nobel prize-winning economist. Essentially, the labor market is so competitive that it is too costly to figure out how talented everyone actually is. As a result, venture capitalists need to use short heuristics to figure out who to bet on.

An elite college degree means a young person spent thousands of hours on academics, extracurriculars and leadership pursuits over an extended period of time and was deemed of a certain quality by an admissions panel. This acts as the signal needed for accelerators like Y Combinator to quickly sort candidates into how promising they may be.

Not every Stanford undergrad will get into Y Combinator, but the hit rate from Stanford, MIT and Harvard dwarfs that of normal universities or folks applying without this level of education.

As I went about raising growth capital from some of the world’s top investors, I would often hear investors mentioning that certain founders were “investable” and others were not. As I dug into this definition, it often revolved around how compelling the academic credentials of the founder were. Did this person seem backable, and would the fund’s institutional investors scratch their heads or be supportive?

Peter Thiel is perhaps one of the loudest advocates for dropout hysteria. He himself received an undergraduate degree and a J.D. from Stanford. In my research, it is hard to find individuals who supported the university dropout path who didn’t themselves have the buffer of an elite institution.

Founders Fund, Peter Thiel’s personal venture fund, sounds like it should be the place to be for aspiring investors without an elite college education. A closer look reveals the opposite. Of the 18 people working at Founders Fund, there are 18 elite degrees, including six Stanford undergrads, a Harvard J.D., two Stanford MBAs, a Stanford J.D., a Cornell undergrad, a Yale undergrad, an MIT undergrad, a Duke undergrad and more. One investor got close: They won an award for “most likely to drop out” – but still finished their MBA.

The best advice is followed by those who give it — only then do you know it is battle-tested. If you aspire to be a unicorn founder and rock the world through entrepreneurship, the most effective launchpad is a top-tier university degree.

Posted on

Deepnote raises $20M for its collaborative data science notebooks

Deepnote, a startup that is building a data science platform on top of Jupyter-compatible notebooks, today announced that it has raised a $20 million Series A round co-led by Index Ventures and Accel, both of which participated in its 2020 seed round. Existing investors Y Combinator and Credo Ventures also participated in this round.

As Deepnote co-founder and CEO Jakub Jurovych told me, the company has pretty much stayed true to its original vision since its launch a couple of years ago.

“When we started out, we were coming from this data science and machine learning background,” Jurovych explained. “We were pretty confident that something needed to change in the data science space because we tried everything out there — like all the tools you could possibly imagine — the collaboration was always broken, no matter what we tried.”

The team, which includes co-founder Jan Matas (CTO) and Filip Stollar (head of Design), was already quite familiar with Jupyter notebooks and set to work on bringing easier ways to collaborate to this existing tool.

Image Credits: Deepnote

In many ways, Deepnote has become the de facto standard for shared data science notebooks. Companies like ByteDance, Discord and Gusto now use the company’s platform, and because the data science market is growing quickly, yet talent remains hard to find, the team also made a concerted effort to bring its tools to students. Today, 80 out of the top 100 universities in the world use Deepnote in at least some of their classes.

“The pain that students and teachers our feeling is pretty much the same thing that you see at organizations. “You have the same need to collaborate,” Jurovych said. And just like a professor is able to use the tool to distribute an assignment to hundreds of students, enterprise users can now share their notebooks with anybody else inside the company, including C-level executives. Indeed, Jurovych believes that notebooks — as a format — are able to breach the gap between technical and non-technical audiences. So while Deepnote specifically targets data scientists, one of the team’s goals is to lower the barrier of entry for using notebooks (while staying fully compatible with the Jupyter standard).

Image Credits: Deepnote

“Two years ago, you would have to know how to write Python to get any value out of the notebooks,” Jurovych said. “Today, you just receive a link from someone else who is technical on the team and if you want to tweak the visualization, it’s actually a pretty simple thing to do. If you want to leave a comment, provide some feedback, you don’t have to be the most technical person in the world.”

Deepnote offers a free tier, with a paid Pro plans starting at $12/month/editor that is also available for free for students and teachers.

The remote-first company plans to use the new funding to build out its product and expand its foothold in the data science community. In the process, Jurovych expects to double the teams’ size to about 50 employees in the next 12 months.

Deepnote raises $3.8M to build a better data science platform

Posted on

Runway raises $2M seed, launches its ‘air traffic control’ system for mobile app releases

Runway, a startup that emerged from the challenges that faced Rent the Runway’s first iOS team, is now exiting beta and launching its service that simplifies the mobile app release cycle — or, as the team describes it, offers “air traffic control” for mobile releases. The company has additionally raised a $2 million round of seed funding for its product, led by Bedrock Capital.

Other investors include Array Ventures, Chapter One, Breakpoint Capital, Liquid 2 Ventures, Four Cities, Harvard Management, Seed Capital, SoftBank Opportunity Fund, and various angels.

The idea for Runway comes from co-founders Gabriel Savit, Isabel Barrera, David Filion, and Matt Varghese, who had all worked together on the first mobile app team at Rent the Runway. While there, they learned that getting an app release out the door involves a lot of overhead in terms of time spent and wasted, and a lot of back-and-forth on internal communication apps like Slack. Interdisciplinary teams consisting of engineers, product, marketing, design, QA, and more all have to keep each other updated on their own part of the app’s release process — something that’s still often done using things like shared documents and spreadsheets.

Runway instead offers an alternative with its dedicated software specifically designed for managing the various parts of the app’s release cycle.

The system integrates with a company’s existing tools, like GitHub, JIRA, Trello, Bitrise, CircleCI and others, to automatically update teams as to what’s been done and what action items still remain. Since launching into beta this spring, Runway has doubled the number of supported integrations, which also now include tools like Linear, Pivotal Tracker, Jenkins, GitHub Actions, GitLab CI, Travis CI, Slack, Bugsnag, Sentry, TestRail, and more, with others on the way soon.

Image Credits: Runway

During its test period, Runway has been used by a handful of early customers, including ClassPass, Kickstarter, Capsule and others, who, as of this March, had pushed out over 40 app releases via its platform.

Since its beta, it’s grown its client base to 15 and now includes Gusto, NTWRK, Brex, and Chick-fil-A as customers, as well as some bigger names in at the enterprise end of the scale, the company notes. (One is a “favorite food delivery app,” we understand). Several of these customers have also contributed statements of support for using Runway over their old methods. For instance, ClassPass’s Mobile Lead Sanjay Thakur said the system results in “less confusion” and less time spent on releases.

“Our engineers tell me their load during sprints in the release manager role has shrunk,” Thakur said.

Kickstarter’s Senior iOS engineer Hari Singh noted that “things are easier now” with Runway, and remarked, “it’s nice to have all of our team members looking at the same thing, all the time. There’s no subjective opinion of what’s happening,” he said.

“Runway has not only made releases faster, but mental stress around releases is something we don’t have to worry about anymore,” noted Senior Software Engineer Hari Singh of NTWRK. “We used to be hesitant to release as often as we would have liked. Now, we know it’s going to go smoothly, and we know it’s going to require minimal effort.”

As of today, Runway says its early adopters have since pushed out 60 app releases through its platform. It has also made a number of key product changes and updates since its beta in March.

Image Credits: Runway

These include the addition of many more automation for tasks that would have otherwise been handled manually or other chores like automatically pausing unstable phased releases, automatically accelerating stable phased releases, adding in default Release Notes for the app stores’ “What’s New” section, support for rollouts with automatically increasing staged percentage (including Android), selecting the latest build in the app stores, submitting new builds for beta review on iOS, tagging release at the end fo the release cycle, autogenerating changelogs, attaching artifacts, adding missing labels or fixing versions to tickets in project management tools, and more.

Runway also added support for quicker hotfix releases, an approvals feature that loops in external stakeholders, a screenshot viewer and approval gate, build artifact downloads directly from the CI pipeline, regression testing integrations, stability monitoring integrations, TestFlight and Play Store beta track testing integrations, additional capabilities for frequent releases like bumping the version number in code, and support for roles, permissions, and access control lists, among other things. It’s also attained SOC 2 certification.

One area it’s still working on is simplifying the onboarding of new customers. Because it’s designed to be a broad platform, the initial setup process where a customer connects Runway to its many internal apps and services can take time. However, Runway believes that ultimately, its ability to adapt to many teams’ different tools and processes will be a selling point, not an obstacle to its adoption.

As it goes to launch, Runway continues to charge $400 per month per app for its standard tier but has now added on custom, enterprise pricing for larger businesses, as it has more companies on the high-end in the pipeline. It may add new pricing for indie teams in the future, we’re told.

Runway says it will apply the new funds to hiring, including the hire of multiple full-stack engineers (particularly ex-mobile engineers), and a full-time employee to help with growth and marketing. It has already made its first full-time hire with the addition of a form senior mobile engineer.