Venture capitalists ‘seizing opportunities from adversity’ – INQUIRER.net


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Venture capitalists ‘seizing opportunities from adversity’  INQUIRER.net

Business doesn’t stop for startup execs during crisis. But it sure changes. – Crain’s Detroit Business


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Business doesn’t stop for startup execs during crisis. But it sure changes.  Crain’s Detroit Business

Beam Me Up – The Story of a Robotics Startup’s Demise


This post is by Founders Space from Founders Space – Startup Incubators, Accelerators & Venture Capital

Although the market is growing, making robots is hard. In Silicon Valley, venture capitalists like to say software is easy, hardware is hard, and robots are the hardest of all. This is because they require so many different disciplines to build, from mastering the complexities of hardware and movement to develop sophisticated AI. Most startups don’t have the resources or expertise to take on all of these once. Even more challenging than building the robots is building a viable business. Robotics isn’t like software. It’s a costly and difficult business to scale.

Take Beam, the telepresence robot. It looks like a giant iPad on wheels. It can scoot about an office and allow anyone to interact with it or someone else in a remote location. We had several Beam robots at our coworking space, and although they were useful on occasion, it was hard to justify the cost when compared to a $50 webcam. This is one reason Suitable Technologies, the startup that created the Beam robot, ran into trouble.

Beam originally came out of a technology research lab called Willow Garage. Scott Hassan was the charismatic founder and created a freewheeling, open atmosphere, where everyone was experimenting with the latest technologies, like computer vision, object manipulation, and autonomous control systems. It was like the next Xerox Parc but with big bots instead of tiny mice.

Hassan could afford to burn $20 million a year on his passion project because he was a billionaire. He’s credited with writing part of Google’s original code and investing in Google right after it incorporated. He also sold his email startup to Yahoo for over $400 million. Under Hassan’s guidance, Willow Garage spawned several robotics companies, one of which was Suitable Technologies. Hassan joined as founder and CEO and poured more than $90 million of his own money into the venture. For a while, the Beam robot was a hot item. Its zenith came when President Barak Obama used Beam to commemorate the 25th Anniversary of the Americans with Disabilities Act. Edward Snowden and Steph Curry also became Beam boosters. But this wasn’t enough to make the company profitable. The robot simply cost too much for the value it delivered.

Sadly, Hassan decided to close Willow Garage, and later wound up shuttering Suitable Technologies, winding up in bankruptcy and divorce court. Life isn’t easy when it comes to creating robots, but this failure was just a speed bump on the long road towards developing intelligent robots.

Lawnboy Ventures – Restoring a Sense of Smell


This post is by Founders Space from Founders Space – Startup Incubators, Accelerators & Venture Capital

Scott Moorehead suffered a traumatic brain injury when fell in the driveway, while teaching his 6-year-old son how to skateboard. He recovered from the internal bleeding and concussion but never regained his smell. The connection between the olfactory nerves in his nose and his brain had been severed.

“Until you can’t smell at all you have no idea how emotional the experience can be,” said Moorehead, who fell into a deep depression. “You start to think about these really awful things, like, someday my daughter is going to get married and I’m going to walk her down the aisle and I’m going to give her a big hug, and I’m going to have no idea what she smelled like.”

Despite his depression, Moorehead isn’t one to give up easily. He’s a successful businessman, running the largest Verizon retailer in the nation. Through a friend, he found out about a team at Virginia Commonwealth University working on converting chemical scents into useful electrical signals and offered to not only become their test subject but also their business partner. He supplied the initial round of funding to kick-off the commercialization efforts.

Together, they’ve launched a startup called Lawnboy Ventures, which Moorehead hopes will not only bring back his own sense of smell but help millions of others in the same position.

Gender Bias In Predictive Algorithms: How Applied AI Research Can Help Us Build A More Equitable Future – Forbes


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Gender Bias In Predictive Algorithms: How Applied AI Research Can Help Us Build A More Equitable Future  Forbes

4 ways to lift up others during these uncertain times – NBC News


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

4 ways to lift up others during these uncertain times  NBC News

Where are Most Unicorns Headquartered? • Tomasz Tunguz


This post is curated by Keith Teare. It was written by Keith Teare / Newsletter's Venture Trends Board. The original is [linked here]

Earlier this week, I wrote Californian Dreaming – Is Silicon Valley Still the Best Place to Start a Company, where I analyzed the IPO and M&A trends of venture-backed companies by state. Those metrics are lagging indicators of startup distribution. How will the distribution change with time?

While we can’t know the future M&A and IPO of any company in particular, we can try to divine the future by looking at current unicorn distributions.

image

I pulled the unicorn valuation list and analyzed US startups by state. 63% of current unicorns, startup companies valued at $1B or more, are headquartered in California.

image

79% of unicorn market capitalization accrues to startups headquartered in California. (Unicorn market cap is the last known valuation of the companies).

If recent history has taught us anything, it’s that valuations can change on a dime. Barring some sudden shift, these data suggest California’s share of significant exit events should at least sustain current levels; and an optimist could argue, further concentrate in California.

California Dreaming – Is Silicon Valley Still the Best Place to Start a Company? • Tomasz Tunguz


This post is curated by Keith Teare. It was written by Keith Teare / Newsletter's Venture Trends Board. The original is [linked here]

So much has happened in the last decade. We’ve seen the rise of massive startups in Europe, South America, China, Israel. Technology entrepreneurship is a global phenomenon. Within the US, there’s much talk of a diaspora out of California and Silicon Valley, particularly with the sudden move to remote work catalyzed by the coronavirus. Has the shine rubbed off the Golden State to reveal pyrite?

image

Over the last ten years, California based startups consistently raise about 35% of the venture capital in the US by round count. In dollar terms, California’s share is a bit higher at 40%. That figure hasn’t changed despite the massive increases in total venture funding from about $10B to $100B in that time frame.

image

However, California startups’ share of acquisitions has declined meaningfully from 30% to 19%. Acquirers have started to shop outside of California browsing wares in other states’ aisles. Not the states you might think of like New York or Massachusetts, but the other ones. This fragmentation is a natural by-product of labor market arbitrage and the dispersion of knowledge all over the world.

image

It’s not all bad news for California. The Bear Flag Republic’s share of US startup IPOs has doubled in the last two years from 25% to more than 40%. That’s important because a few goliath startups dominate venture capital returns. Although more M&A occurs elsewhere, more of the largest companies in the US are built in California.

And this persists for all the reasons that have made Silicon Valley special: the open networks, the universities, the culture, the concentration of capital.

image

You might counter the startup IPO market is dead, long live the IPO market. And it indeed has contracted by about 30% per year since 2010, while M&A has tripled. The real litmus test is the number of billion-dollar M&A compared to IPOs, which today are almost always valued at $1B or more. Over the past decade, 102 M&A transactions have occurred for more than $1B. With more than 150 IPOs in the slowest year and better than 3000 in the last decade, the IPO remains dominant in the quest for outsized returns.

The California dream is alive and well.

Source: Crunchbase data

Post-coronavirus fate differs among Shenzhen tech startups – Nikkei Asian Review


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Post-coronavirus fate differs among Shenzhen tech startups  Nikkei Asian Review

How Covid-19 is impacting the flow of people, information, goods, and money


This post is by Eric Feng from Stories by Eric Feng on Medium

An interesting thing occurred starting on May 8th on Google Trends: US search interest in the term “reopening” (which has spiked rapidly since early April) finally exceeded the interest level of the term “covid-19” (which has been steadily falling over that same time). “Reopening” would go onto outpace “covid-19” throughout the rest of May, one of the many signs pointing to the shift in national attention. The US is going from asking “what is Covid-19?” to asking “what happens after Covid-19?.

It’s been just over 2 months since the Covid-19 pandemic made landfall in the US in early March and altered every aspect of daily life. From personal to professional, from municipal to national, Covid-19 has disrupted something at the very core of our economy, our communities, our very society: flow.

Circular Flow

My good friend Dr. Hsiao-Wuen Hon is a brilliant researcher who explained to me that in economics, there is a concept called circular flow used to model how goods and services move between different agents (or decision makers) in a closed system. For example, circular flow can model how the ownership of products moves between sellers and buyers in a commerce market, or model income moving between households, business, and governments in an economy.

Example circular flow of income in an economy

The key to circular flow is the movement itself. Without movement, the agents can’t interact with one another. Without flow, the system or economy stagnates and breaks down. And that’s exactly what Covid-19 is doing to our communities, our economy, and our society. It’s disrupting flow.

Dr. Hon then observed that like all complex systems, the US economy also depends on movement or flow to function, specifically the circular flow of four large categories: people, goods, information, and money. Almost all business activity can be grouped into one of these four categories:

  • Flow of people: travel, airlines, hotels, tourism, concerts, events, live shows, gyms, salons, amusement parks, etc.
  • Flow of information: calls, text, communication, news, media, entertainment, documents, data, etc.
  • Flow of goods: shopping, apparel, retail, electronics, manufacturing, groceries, food, farming, etc.
  • Flow of money: lending, trading, wires, investments, stocks, bonds, and payments, etc.

Our economy fundamentally needs movement and flow to function. Unfortunately so does the Covid-19 virus. Whether it’s shelter in place or social distancing or work from home, the goal is one and the same: disrupt the circular flow of Covid-19. But that also has the unintended consequence of disrupting the circular flow of people, goods, information, and money that fuels all business sectors and industries.

To limit the spread of Covid-19, we are slowing movement across our entire economy on an unprecedented scale. So what happens when sheltering restrictions begin to lift, when the US starts reopening, when we try to restore circular flow?

Restoring the flow of people

“Until you have a vaccine, you’re going to have this reluctance for people to return to what we all called normal behavior and normal spending habits”

James Knightley, ING

The change in the circular flow of people has been the most obvious: hundreds of million of Americans effectively stopped moving as shelter in place laws swept across the country over the past two months. The impact was immediately felt by the many economies that are built off the flow of people: US restaurant spend is down 45%, hotel occupancy is down 58%, air travel is down 95%, and overall travel spend is down a staggering 99% YoY.

Early indications are that the circular flow of people will remain restricted even as shelter in place restrictions are lifted. In a recent survey, 39% of Americans said they would be unwilling to fly anytime in the next 6 months even after the government declares it is safe to do so. To understand how steep of a drop in business that represents, consider that after the 9/11 terrorist attacks, air travel had a peak reduction of 31%. So 6 months into the Covid-19 recovery, the US airline industry will still have less travel interest than at the worst point of the 9/11 aftermath.

PREDICTION: Just like the current slow flow of people, the recovery too is slow moving and may require a Covid-19 vaccine widely available before it is restored. Even then, the flow will look far different. For example, business travel is unlikely to ever return to its former levels as remote work becomes widespread. Concerts, live shows, and events will also likely be forever changed due to new occupancy rules. The flow of people (and the businesses that flow impacts) has a long and difficult road ahead.

Restoring the flow of information

“We are witnessing what will surely be remembered as a historic deployment of remote work and digital access to services across every domain”

McKinsey report

Covid-19 restrictions have only accelerated the flow of information, particularly digital information. The best example of this is the meteoric rise of Zoom video conference, which I wrote about previously. Driven by the need to share information during the pandemic, Zoom spent a record 68 consecutive days as the #1 mobile app on the App Store charts. Other communication services are also seeing wild growth: Microsoft Teams users have increased 135% since March, Google Meet usage is up 30x since the beginning of the year, and social chat app Houseparty’s recent spike in usage has been 70x over normal.

Install growth of Zoom, Microsoft Teams, Google Meet, and Houseparty

There’s a similar trend beyond communication services. Netflix doubled their projected new paid subscribers in Q1, Twitch saw its total live hours grow 100% YoY in April, a 100% increase YoY, and Teladoc had a similar 92% YoY growth in its number of patient health visits. What’s the common fuel behind all of these fast growing services? The flow of digital information. Communication is information, but at its core media and entertainment is also information, as is health consultation.

PREDICTION: Any service that at its core can be recast or recompiled as digital information flowing from one agent to another will thrive in Covid-19. And the number of services this includes — whether it’s a Peloton instructor leading a virtual workout, or an Outschool teacher instructing a video class — will only continue to grow.

Restoring the flow of goods

“It takes 2,500 components to make a car, but just one component to not make a car”

Madhur Jha, Standard Chartered

The flow of goods was put to the test by massive consumer purchasing changes as people suddenly spent all their time at home. The US subsequently had shortages of hand sanitizer, cleaning supplies, facemasks, toilet paper, spiral ham, baking flour, hair dye, and jigsaw puzzles. While our supply chains bent mightily, they did not break. People could still bake artisan bread in their kitchens and enjoy two-ply in their bathrooms afterwards. And now grocery shelves are full, online inventory is in stock, and delivery times are reliable again, as if everything is entirely back to normal. As if Covid-19 didn’t change the flow of goods. But something did change.

For decades now, the flow of goods has grown more distributed with offshore supply chains, contract manufacturing, and zero inventory / just-in-time production, all in the pursuit of greater efficiency. But the downside to this extreme level of specialization is the dependencies it creates and how vulnerable that dependency makes the entire flow of goods. China accounts for 35% of global manufacturing so their initial Covid-19 shutdown immediately created production shortfalls in entire sectors like consumer electronics, precision instruments, and even personal protective equipment.

But it’s not just globalization that’s at risk. Even domestic goods have been painfully disrupted, like the vast US food waste that Covid-19 has caused. Meat processing plant closures have led to millions of livestock being euthanized as farms have no way to process their own meat. Restaurant closures have led to millions of gallons of milk being thrown away as distributors can’t reroute the product to consumers instead. When no one manages all parts of the supply chain, a disruption at any point, domestic or international, can derail the entire flow of goods.

PREDICTION: Covid-19 is showing us the limits to distributing and globalizing manufacturing and supply chains. The relentless pursuit of greater efficiency and lower cost in the flow of goods can create vulnerabilities that make goods ultimately less efficient and more expensive. In response, businesses and governments alike will have to take back more control of their flow of goods and choose to manufacture locally or in house and hold greater inventory stores even if it means higher costs.

Restoring the flow of money

“How do we pay for it? We print the damn money.”

Paul McCulley, Pimco

In the US, the current Covid-19 crisis often gets compared to the 2008 financial crisis, given both calamities resulted in huge drops in the stock market, spikes in unemployment, and uncertainty about how the economy would recover. But that’s where the similarities end. During the 2008 financial crisis, the flow of people, information, and goods were unaffected. The impact was entirely to the flow of money, which the 2008 financial crisis ground to a halt.

To help visualize what the 2008 financial crisis did to the flow of money, the US Department of Treasury mapped how lending standards changed from 2006 to 2011 for various types of loans (commercial lending, mortgages, and credit cards). At the end of 2008 as the financial crisis was in high gear, nearly 80% of banks made loans harder to get and choked the flow of money.

Conversely for Covid-19, the flow of money has been accelerated. Driven by an unprecedented $2 trillion dollar stimulus package from the US government, all major forms of lending volume are up since the Covid-19 crisis began, with commercial lending increasing the most at over 20% from March to April.

PREDICTION: There’s a second $3 trillion dollar stimulus proposal in the works now. Deploying these funds isn’t a simple matter and has required the IRS to start updating their technology and partner with fintech pioneers like PayPal and Square. Consumer desire for contactless payments is also accelerating the adoption of digital wallets. So while people may not be able to move in Covid-19 times, the flow of money will driven both by huge government stimulus as well as new technology solutions.

One more flow

Also on May 8th, when “reopening” first surpassed “covid-19” on Google Trends, another US search term inflected: “covid donate”. As the US began to think about reopening the country, people also began searching more for ways to support Covid-19 relief efforts.

Even Covid-19 can’t stop generosity from flowing.

Short-term rental market faces consolidation as start-ups and small landlords offload properties – CNBC


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Short-term rental market faces consolidation as start-ups and small landlords offload properties  CNBC

Spinjet3D Wins 2020 New Venture Competition – Noozhawk


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Spinjet3D Wins 2020 New Venture Competition  Noozhawk

A guide to EMERGE 2020: speakers, chatroulette and virtual bars – CoFounder Magazine


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

A guide to EMERGE 2020: speakers, chatroulette and virtual bars  CoFounder Magazine

The Weekly Notable Startup Funding Report: 6/1/20 – AlleyWatch


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

The Weekly Notable Startup Funding Report: 6/1/20  AlleyWatch

Bynd Venture Capital Archives – AlleyWatch


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Bynd Venture Capital Archives  AlleyWatch

Zynga in advanced talks to acquire Turkish mobile gaming company Peak for over $1 billion: report – MENAbytes


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Zynga in advanced talks to acquire Turkish mobile gaming company Peak for over $1 billion: report  MENAbytes

EO and YPO for Entrepreneur Peer Groups


This post is by David Cummings from David Cummings on Startups

Last week I was talking to a local entrepreneur about peer groups. This particular entrepreneur has built a multi-million dollar revenue business with dozens of employees after years of high growth. Now, the business is much larger than him and he’s spending more time as a business manager, and less as a scrappy, growth-oriented entrepreneur. He wants to scale to the next level, and is looking for a peer group to share ideas and grow as a leader.

My recommendation was to consider the Entrepreneurs’ Organization (EO) and the Young Presidents’ Organization (YPO), both of which have been immensely valuable to me. In addition to strong programming and networking, the heart of each organization is the small group (usually eight members) forum experience. Forums meet monthly for four hours in a setting of strict confidence and high commitment. The confidentiality is serious — nobody, nothing, never.

Forums often have a consistent agenda:

  • Opening
  • Lightning round
    • Short questions for every person in the group to answer
  • Monthly updates (10 – 15 minutes per person, inclusive of questions)
    • Business
      • Last 30 days
        • Highlights
        • Lowlights
      • Next 30 days
        • Most looking forward to
        • Least looking forward to
    • Family
      • Last 30 days
        • Highlights
        • Lowlights
      • Next 30 days
        • Most looking forward to
        • Least looking forward to
    • Personal
      • Last 30 days
        • Highlights
        • Lowlights
      • Next 30 days
        • Most looking forward to
        • Least looking forward to
  • Presentations
    • Member does a deep dive on a topic, the groups asks questions, the group shares experiences, and the presenting member closes with any takeaways
  • Closing

A small group of people committed to helping each other and meeting on a regular basis is one of the most powerful things I’ve ever experienced.

Entrepreneurs would do well to seek out a peer group like EO or YPO. For me, it’s made a tremendous impact.

SpaceX Launched Two Astronauts—Changing Spaceflight Forever


This post is by Daniel Oberhaus from Feed: All Latest

The test mission will clear the way for regular crewed launches from the United States for the first time in nearly a decade.

Startups Weekly: Remote-first work will mean ‘globally fair compensation’ – TechCrunch


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

Startups Weekly: Remote-first work will mean ‘globally fair compensation’  TechCrunch

$100 million ag fund to address unexpected disruptions – moosejawtoday.com


This post is by "Venture Capital" - Google News from "Venture Capital" - Google News

$100 million ag fund to address unexpected disruptions  moosejawtoday.com