Thanksgiving – Product Management Confabulation

July 22, 2022

How to check for founder-investor alignment before you start fundraising

Evan Kipperman Contributor

Evan Kipperman is a partner in the emerging companies and venture capital practice at Wiggin and Dana. He helps growth-stage companies, VC firms, family offices and high-net-worth individuals achieve their business goals.

Paul Hughes Contributor

Paul Hughes is a partner in the emerging companies and venture capital practice at Wiggin and Dana. Formerly GC of a venture-backed healthcare services company, he works with emerging companies across software, life sciences, healthcare, consumer products and data science.

Len Gray Contributor

Len Gray is a partner in the emerging companies and venture capital practice at Wiggin and Dana. He has founded multiple startups and his own law practice and works with emerging companies, founders and investors.

As the flood of pandemic-era venture capital recedes, startups need to avoid the scarcity trap that accompanies the chase for dwindling investor dollars. And as the markets turn, founders should remember the fundamentals they learned during times of plenty.

Investors are pulling back as fears of a recession grow. In the first quarter of 2022, global venture funding declined 19% to $143.9 billion from the previous quarter’s record-breaking peak, according to CB Insights.

Whether you’re looking for angel investors to seed your business or later-stage backers to help you scale, the partners you choose today will affect your company’s future — from how you run your company day to day to your exit strategy. That’s why it’s important to pick investors who are a good fit and have track records that show how they might act when the chips are down.

It’s crucial to understand who your partners are before you let them in the tent. Below, we’ll discuss key factors that startups should consider when evaluating investors in a changing landscape.

Kick the tires and get references

Check in with a potential investor’s portfolio companies, both current and past, to see what their experience has been. You’ll need to do this without violating any non-disclosure agreements, but a key question is how investors behaved in previous downturns. For example, in the second quarter of 2020, when COVID-19 upended the global economy, did they provide portfolio companies with a bridge through uncertain times or tell them to find their own money?

Early in the pandemic, investors at a venture-backed technology company we worked with helped the business manage expenses but initially refused to write checks. They also attempted to use their blocking rights to prevent other investors from backing the company and then offered it a term sheet that was substantially lower than the offer they blocked, attempting to take control of the company.

Choosing the right partner for the right stage of your business can make the difference between building a billion-dollar company and losing control of the business.

We were able to work with the company to prevent that from happening. But these were people with sharp elbows, and the company had been aware of information in the public domain involving those same investors that should have been noted. Heed such signs if you come across them during your due diligence.

So, what can you do? Ask around your network (including your attorneys) and the investor’s existing portfolio to see what kind of reputation an investor or fund generally has and what kind of value they’ve added to the companies they’ve backed. You can also ask funds for a reference to a portfolio company where their investment didn’t work out.

Talking to the CEO of a company where things didn’t go as planned can shed light on how an investor behaves in challenging circumstances. Just like anyone else, investors have reputations and tendencies, and this is information that’s available to founders, if they’re inclined to look.

January 12, 2022

Wordle is tech born of love that asks nothing in return

The internet loves an unlikely success story, and as we approached the new year, one came around the corner to delight us with a simple idea, and a short game to play it out: Wordle, where you guess a five-letter word in six tries, and then laugh and cry with others as you share your results and the grid charting your attempts.

It’s a breath of fresh air in the tech industry, as we discussed with the game’s creator, Josh Wardle: no mobile app. Only one word every 24 hours. No advertising. No registration required. And you can even play it if your internet connection drops.

But perhaps, even more delighting than the game itself, is the origin story.

The short version is that British-raised New York resident Josh Wardle, who used to work at Reddit and is now a software engineer at Brooklyn art collective Mschf, originally built Wordle last year for his partner, a word puzzle enthusiast, for them to play together.

Hosting it on a website he’s had for years as a home for his other creative efforts (powerlanguage.co.uk, back from from his time in England), Wardle casually shared the game with family. Then he showed it to a few well-placed friends. But virality, as we know, doesn’t take much to get rolling when the stars are aligned. It was in the blink of an eye that all hell broke loose.

Over the space of weeks, the game grew from under 1,000 to 2 million players.

“What I built [at the start] is the game that everyone is playing today,” he said in an interview with TechCrunch. “It was definitely not the intention when I started.”

That rapid growth has surprised Wardle. At his day job at Mschf — the collective known for stunts like Lil Nas X’s controversial “blood shoes” — he says he occasionally finds himself “going down the rabbit hole” on Twitter looking at what people are saying about his creation.

But Wardle’s not an impresario, nor at this point particularly entrepreneurial (we mean that in a good way — he’s just natural in his approach) and that’s leading to some unexpected outcomes.

People have suspected, and we’ve now confirmed, that Wardle has been getting approached by investors who want to take Wordle to the next level. (Sidenote: Wardle’s employer Mschf is backed by VCs like Founders Fund. So that could be an interesting template for one direction to go. Or not.) But Wardle isn’t trying to turn a profit on Wordle.

“I don’t want Wordle to be my full time job, but I don’t want to invest in it or do any of that stuff. I’m very happy with where it’s at,” Wardle told TechCrunch. “I think that if [venture funding] were to happen, it would be more in the context of being an artist with a patron or something like that.”

While Wardle considers what to do, if anything at all, his runaway game has found a ton of traction with other less salubrious types: numerous developers have started cloning it, taking advantage of Wordle’s static place on the web and building apps to profit off the interest.

While Wardle himself has not really had much of a chance to consider how or if to defend his IP, others have taken up his cause, and now Apple appears to be taking down Wordle clone apps independently of any appeals from Wordle’s creator.

At the same time, ironically, Wardle’s also getting accused of stealing the Wordle concept from others. The host of Lingo, a gameshow in the UK, has been publicly railing about how he has given Lingo no credit, considering that the game “looks like ours, works like ours, smells like ours and basically is OURS.”

But Wardle didn’t build the game for money or viral fame. When you consider the impetus for making Wordle, and how few iterations it’s had since then, all of this seems to be missing the point.

“I feel smart when I get a Wordle, even though I made the game,” Wardle told us. “It’s about the journey, especially on days like today where I’m like really stumped and I like have to think about it.” (The answer on the day we talked was “query”, which is quite perfect.) “It’s hard enough that it will hit, like, that sense of accomplishment that feels good.”

We sat down with Josh Wardle to hear more about his reasons for keeping it simple, and what he’s thinking about next.

+++++++++++++

[This interview has been condensed for clarity]

Something that people love about Wordle is that you can only play once a day – it’s not comparable to past viral games like Flappy Bird, which was eventually deleted by its developer because it got too addictive. How intentional were you about building a game that, by nature, can only take up a few minutes of your day?

My partner and I play a lot of the New York Times word games, and they follow that one-a-day model. One thing that is interesting to reflect on, though, is that Wordle could be one a day, but if everybody was getting a different word on that day — if the word was random but you could still only play one — it wouldn’t have caught on the way it has. Right? It’s something about the fact that it’s one puzzle, and everybody is solving it. In terms of games like Flappy Bird, I’m just kind of suspicious of apps and games that want your endless attention — like, I worked in Silicon Valley. I know why they do that. With Wordle, actually, I kind of deliberately did what you’re not meant to do if growth is your goal. And bizarrely, I think, those things have led to growth. But obviously, a ton of it is luck, and being in the right place at the right time. I think people have an appetite for things that transparently don’t want anything from you. I think people quite like it that way, you know?

You built this for you and your partner to play together, so how did the game go from that to viral sensation?

Back in the UK over the summer, I shared it with my family, and they loved it so much that it derailed the family group chat, so we had to splinter off and create a Wordle channel. There wasn’t the emoji grids at that point, so you’d just come into the chat and say “I got the word in three” or whatever. I introduced it to a few friends in the states, and Andy Baio shared it on his blog. Then, a New York Times newsletter author included it as a footnote around Thanksgiving, like, “Hey, I’ve been enjoying this thing,” and that somehow led to it getting really popular in New Zealand, and then Australia, and then a Guardian journalist in Australia wrote about it, and that’s the first time I remember logging in the next day and seeing that 80,000 people had played the previous day. One of the early adopters in New Zealand came up with the emoji grid idea and was manually typing them out to share her results on Twitter, so I decided to integrate it into the app itself, and obviously that’s had a huge impact.

I think people have an appetite for things that transparently don’t want anything from you. I think people quite like it that way, you know?

You’re now seeing millions of people playing it, all off your Power Language site. How have you handled that traffic?

It’s incredibly simple. It’s literally just a website and some javascript that downloads, and once it’s downloaded, it never needs to do anything again, like your phone could go offline and you could continue to play it. So there’s no backend. There’s some shortcomings to the way I did it, like right now, I have people looking at the source code, and they discover all the words are there and they can examine those things. But if I had to be scaling a backend, you know, every time you submitted a guess you had to go to a server, that would have been a huge headache. So because I just built it for my partner and me, I built it as simply as possible. For the people who look in the source for the solution, I’ve seen – which I quite like – on Twitter, people are saying it’s like if you’re doing the puzzle section in the newspaper, you can turn the puzzle upside down and read the answers. It’s more about like, who are you cheating if you’re doing that? You can open an incognito browser and take the puzzle again today if you really want, you know? It’s very low stakes.

[Originally the site was hosted by an independent company] and for a while there, I was waking up in the morning, hoping fewer people would have played because I was worried I was gonna hit my bandwidth limit. After Wordle went viral, close to the end of December, I still had enough breathing room where I had 100 gigabytes of bandwidth to play with. Then one of my good ex-Reddit friends, Kevin O’Connor [now the VP of Engineering at Kickstarter] helped me put Cloudflare in front of my website; then more recently, we migrated the hosting to Amazon S3, which can scale indefinitely as long as I’m happy to pay for it.

So many venture capitalists are playing Wordle and posting their results on Twitter. Have any VCs reached out to you? What do you think about what some of them must be thinking, that this might have potential as an enterprise rather than just a fun game?

I’ve had a few people reach out in that very diplomatic and warm VC style. [Laughs.] I haven’t had any conversations yet. I don’t even know – I’ve never been in this position before, and I don’t know what that conversation would look like when I’m giving this thing away for free. I like giving it away for free – part of the point is it’s free.

Are you going to respond to them and see what happens?

I think I’d be foolish not to, right? It seems like a unique opportunity. I don’t want Wordle to be my full time job, but I don’t want to invest in it or do any of that stuff. I’m very happy with where it’s at. But given that I work in tech, and I’ll probably continue working in tech, it seems like one of those things where it’s good to meet these people and at least have a discussion.

I’m fortunate enough to be in a position where it does cost me a bit to keep the servers up to run Wordle, but I can afford to do that.

It’s not like I think that everyone needs to give away the things they create online for free, it was just that because that’s how I started this, it’s made it easier for me to continue it this way. I made something that felt really authentic to me, and now when people are asking like, “Do you want to monetize it? Why aren’t you doing X, Y and Z?”

It’s really easy for me to say… No, I was really happy with it when it was just my partner and me playing together. It’s really easy to get seduced by all that stuff, but I try and instead be like… I was happy then, and I think I’ll be happy in the future if that’s where it ends. If at the end of the day with Wordle, it’s just her and me playing again, I think I’ll be totally happy for that to be the outcome.

We noticed you did two pretty cool projects when you worked at Reddit, “The Button” and “Place.” What drives you to create these?

My background is in art, and I’m just interested in making interesting things. The business side of things is not super interesting to me at all, and I can’t imagine anyone paying… like, the things that I’m interested in making are very weird or like not conventional, I think, and don’t really make sense as businesses. I think that if [venture funding] were to happen, it would be more in the context of being an artist with a patron or something like that.

So many people on the internet are making memes and art around Wordle – do you have any favorites?

I really like the creative interpretations of the emoji grids. There’s an account I started following recently that does green and yellow Microsoft Paint style pictures. I saw someone who cross-stitches her Wordle results, which is quite awesome. So it’s those things – that people enjoy and care enough about this thing that it gives them inspiration, and they want to express it, and it makes them feel good creatively. That’s really an amazing compliment. I like to create things myself, so seeing people respond to something I’ve made in that way feels amazing.

but what if i cross stitch every single one of my wordle results pic.twitter.com/g312E8WrCC

— abcdefghijklmnopqrs_uvwxyz (@traceyfanclub) January 8, 2022

It feels like chatter about the game is especially big on Twitter. Why?

One thing I will say is that the majority of players are not actually posting their results on Twitter. There’s an account called Wordle Stats that looks at Twitter, then collects all the grids people share, then posts it the next day and says, “Okay, 30% of people got it in four,” and I think it was two days ago that it collected 100,000-something, whereas at that time, close to 2 million people played Wordle.

There are Wordles being shared in WhatsApp groups, like my family group. For some people, Twitter is that family WhatsApp group. But the vast majority of people playing are off Twitter. I think they’re playing it with their friends and family. It’s hard for some families to see each other because of COVID, and sometimes it’s hard to come up with a topic of conversation. But Wordle is just such a low-effort way to check in, and sometimes you just post your result, sometimes you can respond to others’, but it’s this really comforting way of letting other people know that you’re thinking about them. It’s a shared experience.

Why is your website called “powerlanguage”?

That’s just a username I’ve used online for a long time, which originates from mishearing someone. Someone was berating my friends and me in my youth. We were being told off for swearing at each other. I thought he said, “power language.” In retrospect, he was saying “foul language,” and I misheard it, but I was so delighted by the idea of swearing being called “power language” and just kind of ran with it in a way you do when you’re 16 or whatever.

I was really happy with it when it was just my partner and me playing together. […] If at the end of the day with Wordle, it’s just her and me playing again, I think I’ll be totally happy for that to be the outcome.

What do you think of all the Wordle clones? Would you ever want to make an app?

People have asked me about the app thing a lot – one response is I don’t have the skills, and I’d have to invest the time to learn how to do it, which I could do, but it would be an investment of my time. And again, if I’m building a game for my partner… We can use a website every day. It’s not a problem. If my goal was to make Wordle my business or to monetize it, I can see why it would make sense, but then I would have to wrestle with a bunch of things like… Would I send you a push notification? I would definitely have to think about the contract I’m establishing with the player. Do you really want me to notify you? Is this the best way? Why don’t you just forget about Wordle for a little bit?

Wordle is being punished by app stores for choosing the open web

I will say, I did have one really nice thing happen to me where there was someone who built a game called Wordle on the App Store years ago, and it suddenly started getting a lot of traffic and downloads. He Googled it, found the New York Times article, and reached out to me on Twitter and was like, “Hey, I really like how you’re approaching this. I got some money from people downloading the app and I want to donate it, where should I donate it?” I need to get back to him, but he was like, “I think I would want it to go to a charity focused on literacy or something,” which I thought was amazing.

As far as the clones, I mean, there are some subtle things with Wordle that actually make it work. I actually put quite a lot of effort in – the solutions list, I actually invested a fair amount of time filtering those. A big one for me was if there were a bunch of five letter words you’ve never heard of, and if the solution was one of those words, I think that feels bad for people.

The Ringer reported that “FARTS” will never be a Wordle solution. Is there a reason for that?

There is a reason for that, but I know part of the joy of discovering Wordle and playing it over a number of times… I know why it’s not included, but I don’t want to state that. I want to let people kind of discover it themselves. It’s an exercise to the reader. (Note: We think we figured it out.)

January 6, 2022

The New York Times plans to buy The Athletic for $550M

The New York Times Company agreed to purchase sports media outlet The Athletic in a deal valued at $550 million, The Information reports.

This deal comes after months of speculation — at one point, The Athletic CEO Alex Mather approached Axios about a merger, which did not come to fruition. With this deal, the company seeks to bolster its subscription business — The New York Times surpassed 8 million subscriptions last year and is on track to surpass its goal to grow to 10 million subscribers by 2025.

Founded in 2016, The Athletic had 1.2 million subscribers as of November, who pay about $72 per year. But on its own, The Athletic isn’t yet profitable, and didn’t plan to be until 2023 — it employs 600 staff and spent almost $100 million between 2019 and 2020, though it only brought in around $73 in the same time period.

With $550M the NYT could have just subsribed to The Athletic for 46 million years.

— Winging It In Motown (@wingingitmotown) January 6, 2022

The New York Times’ acquisition of The Athletic is consistent with recent trends in media, where many outlets are consolidation. Recently, BuzzFeed acquired Complex and HuffPost before going public, for example. But media workers are skeptical of these changing tides — after BuzzFeed acquired HuffPost, for example, it laid off 47 of 190 HuffPost employees and closed the entire HuffPost Canada arm, impacting 23 more employees. At the onset of the pandemic, both The New York Times and The Athletic laid off employees as well, as did many media companies.

More media workers are seeking out union agreements to protect them from sudden layoffs and paycuts, which were a constant threat in the industry even before the onset of the pandemic. Some journalists have taken an even more radical approach — in late 2019, Deadspin’s entire staff quit the site due to frustrations with management and started Defector, a worker-owned media company. In its first year, Defector earned $3.2 million in revenue, which accounted for its $3 million in operating expenses.

In a much smaller deal than its acquisition of The Athletic, The New York Times purchased Wirecutter, a product reviews site, for $30 million in 2016. But there has been significant tension between Wirecutter and its parent company in recent months — after two years of slow-paced union contract negotiations, Wirecutter staff went on strike for five consecutive days, including Black Friday and Cyber Monday, after management failed to reach an agreement with them before Thanksgiving. Then, the Wirecutter Union filed an unfair labor practices complaint with the National Labor Relations Board after The New York Times withheld their pay while on strike. By December 14, the union, represented by The NewsGuild of New York, reached a deal with the New York Times, ensuring increased pay and improved working conditions. But the New York Times is still facing scrutiny for anti-union behavior.

“Hey @TheAthletic, we’d love you to meet our friend @nyguild,” the Wirecutter Union tweeted after the news broke.

There’s no word yet on how subscriptions to The Athletic will change, or how staff at the publication will be impacted by the acquisition.

November 30, 2021

Cyber Week online spending down 1.4% to $33.9 billion as U.S. consumers shopped earlier this year

Consumer awareness of supply chain shortages and even earlier deals may have contributed to a slight decline in U.S. e-commerce sales during Cyber Week — the kickoff to the holiday shopping season that runs from Thanksgiving Day through Cyber Monday. Last year, U.S. consumers spent a record $34.4 billion during Cyber Week, up 20.7% from the year prior. But this year, that figure dropped by 1.4% to $33.9 billion in online spend, according to data from Adobe’s Digital Economy Index.

Adobe’s analysis comes from data from over one trillion visits to U.S. e-commerce websites, which feature 100 million individual SKUs across 18 product categories, giving it a comprehensive window into holiday shopping trends.

The company noticed the declines this year starting on Black Friday. This year, retailers pulled in $8.9 billion in Black Friday online sales, down 1.3% from last year’s record of $9.03 billion — its first-ever year-over-year decline. Cyber Monday 2021 sales also dropped 1.4% year-over-year to $10.7 billion — just $100 million shy of what consumers spent last year, at $10.8 billion. Meanwhile, Thanksgiving Day online sales stayed flat at $5.1 billion.

These declines, while relatively small, represent a reverse in the usual trend of holiday shopping sales that jump up with every subsequent year. For an industry supposedly accelerated several years by the pandemic, according to reports from last year, it’s a notable demonstration of how the long-lasting impacts of the pandemic — which now include supply chain shortages — may have played out in consumers’ psyches. Worried about possible shortages, consumers may have shopped even earlier this year, Adobe says.

The data seems to back this up. During the month of November (Nov. 1 to Nov. 29), consumers spent $109.8 billion, a significant jump of 11.9% over last year. That means 22 days of the month have exceeded $3 billion in online spending, Adobe notes. This is a new record, as only 9 days in 2020 hit that same milestone. Plus, consumers may have shopped last month, as well, the company points out.

“With early deals in October, consumers were not waiting around for discounts on big shopping days like Cyber Monday and Black Friday,” said Taylor Schreiner, Director at Adobe Digital Insights, in an announcement about the Cyber Week findings. “This was further fueled by growing awareness of supply chain challenges and product availability. It spread out e-commerce spending across the months of October and November, putting us on track for a season that still will break online shopping records,” Schreiner added.

In other words, sales aren’t necessarily going to be down in 2021 overall, they’re just not going to be as concentrated as before. In fact, the pandemic may have may online shopping such a regular habit that now consumers are placing their holiday purchases alongside their usual activity, instead of waiting for a big Black Friday or Cyber Monday sales event as in years past.

Despite the declines, the peak holiday shopping period otherwise looked a lot like it would have otherwise. Cyber Monday shoppers went for the usual categories in greater numbers compared with September 2021 sales, across categories like toys (sales were up by nearly 11x the pre-season levels in Sept. 2021), gift cards (up by 7x), books (up by 7x), video games (up by 6x), and baby and toddler products (up by 6x). Appliances, including microwave ovens and small kitchen appliances, were also up 9.6x and 7.1x respectively, leading to the category’s increase of 5.6x.

Smartphone-driven sales were also up this year, with Cyber Monday smartphone-driven sales up 8.4% year-over-year, for example. This actually represents a change in course, however. Pre-pandemic, smartphone sales were expected to top 50% of online sales. But consumers now working from home may not need to shop from their phones as much as before, Adobe noted.

Although the shopping patterns look different, Adobe says it expects the overall holiday season to break a new record. It forecasts that consumers will drive 10% year-over-year growth in sales to hit $207 billion from November 1 through December 31.

November 22, 2021

Roku customers report streaming issues after 10.5 update

A number of Roku customers are experiencing problems with their Roku TVs following the Roku OS 10.5 update. According to reports published to Roku’s own customer forums and other sites, like Reddit, impacted Roku TV owners say many of their streaming apps — like HBO Max, Disney+, Amazon Prime Video, Paramount+ and others, no longer work while others have more intermittent issues, like Netflix.

Some are also experiencing problems with their screens being frozen and their Roku remote no longer functioning, they said, but it’s unclear for now if these are a related or separate issue.

Roku says it’s aware of the problem and working to resolve it.

While the 10.5 update began rolling out in October, Roku tends to update its streaming players first followed by its Roku TV devices. That means many of the impacted customers only recently received the update, as they own a Roku TV, leading to the flood of consumer complaints when the update resulted in favorite streaming apps not working. In addition, the issues impact Roku Ultra devices, as well.

Though the issue began to blow up on the Roku forums last week, some users said they’ve been dealing with a non-functional TV for multiple weeks, leading them to purchase a Chromecast or Fire TV stick instead.

In an 18-page thread on Roku’s community forums, users reported issues with Westinghouse, TCL, Sharp, and Hisense TVs, among other devices. There are many other threads as well, with dozens of responses. Customers with both hardwired and wireless network connections are impacted, according to consumer complaints. A few users said rebooting their TV or router worked, but others said they tried that, as well as a factory reset, without any resolution.

Roku has been aware of the problem for some time, as a Roku forum moderator has been writing back to forum posters since at least last week, asking for information about their devices like the serial number, Roku device model, device ID, and software OS version.

With no official fix yet available, Roku has been forced to roll back the update for some of its users by downgrading their devices to software version 10.0.0. But this option hasn’t been automatically deployed to all customers. Instead, forum members said a Roku representative had privately messaged them with instructions after they shared their device information.

And, as of last week, users were being asked to private message a Roku employee with their device information to receive the downgrade, indicating the fix is being handled on a one-off basis for the time being. This process is frustrating some Roku customers who think a broader rollback should be underway at this point.

The issues arrive at a time when many U.S. consumers will be taking time off from work over the Thanksgiving holidays — meaning they have a lot more time for watching TV. Tuning into NFL football, for example, is part of the Thanksgiving tradition, but live streaming apps like Sling TV and Hulu are among those impacted by the software issues.

A representative for Roku was reached for comment this afternoon but didn’t yet have a statement available.

Later in the day, Roku shared the following comment with TechCrunch:

A small portion of users that have certain older Roku TV models or older Roku Ultra players are experiencing issues with the latest firmware update, OS 10.5. We are actively investigating and working to resolve this as quickly as possible, and will provide our customers with real-time updates [on our website at support.roku.com/contactus and on twitter at @RokuSupport].

November 18, 2021

For those who want to turn travel into dollars, Fora can help start your next career

Travel is back, at least according to experts who say travel bookings for over the Thanksgiving holiday are showing to be even higher than pre-pandemic levels.

Anyone who loves travel or is that friend who always plans the best vacations, Fora has a tool for you. The company was co-founded by onefinestay’s Evan Frank, Virtuoso agency owner Henley Vazquez and entrepreneur Jake Peters, to redefine what we think of the travel agency and enable people who want to sell travel as a career, or in their spare time, a way to do it.

Frank and Vazquez had known each other for five years when the idea for Fora came up.

“We always talked about doing something together, but this past March, we connected again,” Vazquez said. “I was in Costa Rica and talking about opportunities for women sitting on sidelines due to the pandemic and looking for interesting work. Content creators are circulating around the travel world, and we saw a big opportunity for technology to modernize the industry.”

Travel agencies are a $100 billion market in the U.S., but it is still largely one that works with fax machines and phone calls. Fora is one of the latest startups seeing venture capital attraction to push more of the travel industry into the digital age and tapping into the creator economy. Another is Thatch, which took in $3 million in August to enable travel creators to monetize their recommendations.

However, Fora has a unique approach compared to some of its competitors: It is actually teaching people to sell travel through training sessions, content authoring tools and negotiated rates at the world’s top hotels.

“A lot of companies sell content or expertise, but we saw a bigger opportunity to empower more people to sell travel,” Frank said. “The booking of travel without a system or knowledge is janky and hard. We are focused on tooling to help our advisors be successful themselves.”

Since its soft launch in August, Fora has already booked $2 million in travel, and today, the company announced $5 million in a seed round. It was led by Forerunner Ventures with participation from Heartcore Capital, Uncommon Capital and individual investors, including Katrina Lake, Gokul Rajaram, Ran Makavy and Ben Rubin.

The company decided to go after venture capital to help build out its technology more quickly. Fora plans to use the new investment to onboard new advisors, product development and go-to-market. Its advisor waitlist has grown to more than 2,000 people, and the company will also spend the time onboarding and training them over the next few months.

Meanwhile, Brian O’Malley, general partner at Forerunner Ventures, said that his firm was looking at the creator space and found that what will make Fora successful is having the advisor with a circle of friends and a passion for travel.

“In our eyes, that fits the entrepreneur next store versus the person on Instagram getting free stuff,” he added. “The cost of customer acquisition is skyrocketing, and Fora is coming in as a ‘Trojan horse’ by getting networks that already existed. It’s also a next-generation platform that is getting people back into the workforce.”

Airbnb is buying trust during the COVID-19 travel slowdown

November 2, 2021

Martie launches with $3M to divert shelf-stable food items from landfills

Companies are attacking food waste in different ways, from developing a better food supply chain to “skins” for produce to food sharing.

And today, Martie officially enters the market with its approach to stop from going into landfills food that is thrown away due to package changes, being a seasonal product or reaching its expiration date before purchase.

Louise Fritjofsson and Kari Morris started the company in January to “rescue” pantry staples and offer them, initially in California, for between 40% and 70% off retail prices. The pair met two years ago. Both previous entrepreneurs, Fritjofsson from the tech side and Morris on the food side, they bonded over wanting to make better-for-you food more accessible and affordable.

Fritjofsson says there are 13 million Americans who are food insecure and have to make the decision everyday on what to eat, and are often swayed by food that is not as healthy because it is cheaper.

Martie website. Image Credits: Martie

They tested a few different things, including launching five food brands, but kept having a surplus of items they didn’t know what to do with.

“If you don’t have a sustainable approach you shouldn’t do it,” Fritjofsson told TechCrunch. “We thought we were doing the right things, but we still had a surplus. We started talking to food brands about their surplus, and they usually sell it for pennies on the dollar.”

Ironically, they learned that donating surplus food to places like food banks was difficult, cumbersome and the tax credit only went so far. Though brands are usually careful with positioning their inventory in normal retail channels, some 40% of shelf-stable food — around 146 tons — goes to the landfill each year, she added.

Taking a nod from brands that paved the way by providing imperfect or “ugly” fruits and vegetables, Fritjofsson and Morris decided to do the same, but with pantry staples like cookies, coffee, baking ingredients and snacks. Products come in 10 categories, like breakfast, bakeshop, condiments and pastas.

Since the global pandemic started over 18 months ago, consumer behavior toward purchasing groceries online became more regular and is expected to grow to $190 billion by 2024. Not only that, but with food prices increasing since September, experts say this year’s Thanksgiving dinner could be the most expensive meal in the holiday’s history.

Martie comes online with over 400 SKUs and $3 million in funding from Upfront Ventures. The new funding enables the company to make new hires to build efficiencies on the website, form additional buyer relationships and develop marketing.

There is no subscription or membership for Martie. Consumers can go to the website, pick the items they want and check out.

“Our goal is to keep barriers low, so there are no constraints,” Fritjofsson said. “We even have a call-in number in Spanish and English for people who are not comfortable placing an online order.”

Apeel bites into another $250M funding round, at a $2B valuation, to accelerate fresh food supply chains

Kobie Fuller, partner at Upfront Ventures, says his firm has a history of investing in retail and consumer, with a big emphasis on startups that have an impact on the planet, including Apeel Sciences, which recently brought in $250 million in new funding to continue developing its plant-based layer for the surface of fruits and vegetables that is tasteless and odorless and that keeps moisture in while letting oxygen out.

Fuller heard about what Fritjofsson and Morris were doing and their sustainability approach checked off a lot of boxes for him. The future of food waste will require “a village of companies” and the new wave of investments into this space are necessary to elevate those successes into household names that will be the model for sustainability, he added.

Fuller knew Fritjofsson from a previous company and while he didn’t invest in that one at the time, he thought the concept of Martie was a hit.

“Here is a budding product that rescues foods while offering discounts and does it in a way that the brand is elevated,” he said. “For me, this is brilliant. I am super impressed with Louise and her team and think this is going to be gigantic.”

4 sustainable industries where founders and VCs can see green by going green

November 30, 2020

Dear Sophie: What I’m thankful for

Sophie Alcorn Contributor

Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

Despite pandemic, forecasts predict U.S. online holiday sales increase of 20%-30% or more

Strong e-commerce sales are predicted to help lift overall holiday retail spending in the U.S., according to forecasts released today by the National Retail Federation (NRF) and eMarketer. Both firms expect to see overall retail sales growth during November and December, though the market may be impacted by slowing brick-and-mortar sales.

Of the two, NRF had the more optimistic forecast. It estimates U.S. holiday sales during November and December will increase between 3.6% and 5.2% year-over-year, for a total between $755.3 billion and $766.7 billion. That’s compared with a 4% increase in 2019 to $729.1 billion, and an average of a 3.5% increase over the past five years.

Image Credits: NRF

Growth will come from online and other non-store sales, which are included in the total, which will increase between 20% and 30% to reach between $202.5 billion and $218.4 billion. That’s up from $168.7 billion last year.

NRF’s takeaway is that consumers are willing to spend — perhaps because of the challenging year that 2020 has been, rather than despite it.

“After all they’ve been through, we think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday,” noted NRF Chief Economist Jack Kleinhenz. “There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season,” he added.

The firm also noted Americans may have reduced their spending in other categories, like personal services, travel and entertainment due to the pandemic, which could increase the money they have for retail spending.

eMarketer, on the other hand, paints a less rosy picture when it comes to overall sales.

The firm predicts that total holiday season retail sales will see the lowest growth rate at just 0.9% year-over-year. This growth will come from the e-commerce sector, which will see its highest growth rate — 35.8% — since the firm began tracking retail sales in 2008. Brick-and-mortar sales, on the other hand, will decline 4.7%.

The discrepancy between these two firms’ estimates have to do with how they calculate “retail sales.”

eMarketer’s estimates include auto and gasoline sales, but exclude restaurants, travel, and event sales. NRF’s figures, on the other hand, exclude auto, gasoline and restaurants.

However, both agree on an e-commerce surge. NRF notes online sales were already up 36.7% year-over-year in the third quarter — in part, due to early holiday shopping. This year, some 42% of consumers had started shopping earlier than usual, it recently found. Plus, retail sales were up 10.6% in October 2020 versus October 2019, in aggregate, its forecast noted.

But whether it’s 20% to 30% growth or 35.8%, depending on the firm, it’s clear e-commerce is saving the day here.

NRF also expects seasonal hiring to be in line with recent years, as retailers hire between 475,000 and 575,000 seasonal workers compared with 562,000 in 2019. Some of that hiring may have already taken place in October, due to early shopping, it said.

Though Black Friday may not see the same levels of in-person shopping as in years past, brick-and-mortar retailers have made it easier to shop digitally, then either have items shipped home, picked up in-store, or even curbside. Outside of Amazon, Walmart and Target have particularly benefited from investments in e-commerce, as both retailers easily beat Wall St. expectations in their latest earnings reports, released just ahead of the holiday quarter.

Online, however, Cyber Monday will continue to rule, however, eMarketer says.

Image Credits: eMarketer

Of the five big online shopping days in 2020, eMarketer says Cyber Monday will again beat out Black Friday in terms of overall e-commerce sales, at $12.89 billion compared with Black Friday’s $10.20 billion. But Thanksgiving Day will see the most year-over-year growth in e-commerce sales, at 49.5%, followed by Black Friday, Small Business Saturday, Cyber Sunday and Cyber Monday.

Image Credits: eMarketer

In a mobile forecast, analytics firm App Annie predicted Americans would spend over 110 million hours in shopping apps on Android devices during the two-week period consisting of Black Friday and Cyber Monday weeks. It noted the pandemic had already accelerated mobile device usage to 4 hours, 20 minutes per day, and Americans spent over 61 million hours shopping during the week of Prime Day.

November 30, 2019

Startups Weekly: Chinese investors double down on African startups

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Airbnb’s issues. Before that, I noted Uber’s new “money” team.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you’re new, you can subscribe to Startups Weekly here.

China’s pivot to Africa

Three African fintech startups; OPay, PalmPay and East African trucking logistics company Lori Systems, closed large fundraises this year. On their own, the deals aren’t particularly notable, but together, they expose a new trend within the African startup ecosystem.

This year, those three companies brought in a total of $240 million in venture capital funding from 15 different Chinese investors, who’ve become increasingly active in Africa’s tech scene. TechCrunch reporter Jake Bright, who covers African tech, writes that 2019 marks “the year Chinese investors went all in on the continent’s startup scene” — particularly its fintech projects. Why?

“The continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population — which makes fintech Africa’s most promising digital sector,” Bright notes. “In previous years, the country’s interactions with African startups were relatively light compared to deal-making on infrastructure and commodities. Chinese actors investing heavily in African mobile consumer platforms lends to looking at new data-privacy and security issues for the continent.”

Active Chinese investors in Africa include Hillhouse Capital, Meituan-Dianping, GaoRong, Source Code Capital, SoftBank Ventures Asia, BAI, Redpoint, IDG Capital, Sequoia China, Crystal Stream Capital, GSR Ventures, Chinese mobile-phone maker Transsion and NetEase .

Here’s more of TechCrunch’s recent coverage of Africa startup activity:

VC Deals

It was a short week (Happy Thanksgiving, by the way). But here’s a quick look at the top deals of the last few days.

M&A (VR edition)

Last week, Facebook announced it was buying Beat Games, the game studio behind Beat Saber, a rhythm game that’s equal parts Fruit Ninja and Guitar Hero. Heard of the company? Maybe if you’re a gamer, but if you’re readying this newsletter because of your interest in VC, this company may not have come across your radar.

Why? It’s one of virtual reality’s biggest successes today, but it’s just an eight-person team with no funding.

“I’m really proud that we were able to build the company with this mindset of making decisions based on what is good for the game and not what is the most profitable thing,” Beat Games CEO told TechCrunch earlier this year. Read about Facebook’s acquisition here and an in-depth profile of the small team here.

Equity

If you like this newsletter, you will definitely enjoy Equity, which brings the content of this newsletter to life — in podcast form! Join myself and Equity co-host Alex Wilhelm every Friday for a quick breakdown of the week’s biggest news in venture capital and startups.

This week, we discussed Weekend Fund’s new vehicle, Cocoon’s new friend-tracking app and the unfortunate demise of a startup called Omni. You can listen here.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.