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What 377 Y Combinator pitches will teach you about startups – TechCrunch

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Along with a cadre of other TechCrunch folks, I spent this week extremely focused on one event: Y Combinator. The elite accelerator announced a staggering 377 startups as its Summer 2021 cohort. We covered every single on-the-record startup that presented and plucked out some favorites:

There’s something quite earnest and magical about spending literally hours hearing founder after founder pitch their ideas, with one minute, a single slide and a whole lot of optimism. It’s why I like covering demo days: I get tunnel vision into where innovation is going next, what behemoths are ripe for disruption and what founders think is a witty competitive edge versus a simple baseline.

That said, I will share one caveat. While YC is an ambitious snapshot, it’s not entirely illustrative of the next wave of decision-makers and leaders within startups — from a diversity perspective. The accelerator posted small gains in the number of women and LatinX founders in its batch, but dropped in the number of Black founders participating. The need for more diverse accelerators has never been more obvious, and as some in the tech community argue, is Y Combinator’s biggest blind spot.

This in mind, I want to leave you with a few takeaways I had after listening to hundreds of pitches. Here’s what 377 Y Combinator pitches taught me about startups:

  1. Instacart walked so YC startups could stroll. Instacart, last valued at $39 billion, is one of Y Combinator’s most successful graduates — which makes it even more spicier that a number of startups within this summer’s batch want to take on the behemoth. Instead of going after the obvious — speed — startups are looking to enhance the grocery delivery experience through premium produce, local recipes and even ugly vegetables. It suggests that there may be a new chapter in grocery delivery, one in which ease isn’t the only competitive advantage.
  2. Crypto’s pre-seed world is quieter than fintech. YC feels more like a fintech accelerator than ever before, but when it comes to crypto, there weren’t as many moonshots as I’d expect. We discussed this a bit in the Equity podcast, but if anyone has theories as to why, I’m game to hear ‘em.
  3. Edtech wants to disrupt artsy subjects. It’s common to see edtech founders flock to subjects like science and mathematics when it comes to disruption. Why? Well, from a pure pedagogical perspective, it’s easier to scale a service that answers questions that only have one right answer. While math may fit into a box that works for a tech-powered AI tutoring bot, arts, on the other hand, may require a little bit more human touch. This is why I was excited to see a number of edtech startups, from Spark Studio to Litnerd, focusing on humanities in their pitches. As shocking as it sounds, to rethink how a bookclub is read is definitely a refreshing milestone for edtech.
  4. Sometimes, the best pitch is no pitch at all. One pitch stood out simply because it addressed the elephant in the room: We’re all stressed. Jupe sells glamping-in-a-box and the profitable business likely benefited from COVID-19. I remember that because the founder used a portion of his pitch to tell investors to breathe, because it’s been a long two days. Being human, and more importantly, speaking like one, is what it takes to stand out these days.

On that note, exhale. Let’s move on to the rest of this newsletter, which includes nostalgic nods to Wall Street, public filings and my favorite new podcast. As always, you can find and support me on Twitter @nmasc_ or send me tips at [email protected].

A return to old school Wall Street

With so many new funds, solo-GPs and alternative capital sources on the market these days, founders are confused. Funding may have moved away from three dudes on Sand Hill Road, but it’s also become more fragmented, which means entrepreneurs need to be even more sophisticated in how they fill up their cap tables. This week, I interviewed one recently venture-backed startup that proposed a solution: a return to old school Wall Street. 

Here’s what to know: Hum Capital wants to help investors allocate their resources to ambitious businesses, perfectly. The startup seeks to emulate the world of old school Wall Street, which helped ambitious business owners find the best financing option for their goal, instead of today’s dance of startups trying to prove worthiness for one type of capital. In my story, I explained more about the business.

At this stage, Hum Capital’s product is easy to explain:

It uses artificial intelligence and data to connect businesses to the available funders on the platform. The startup connects with a capital-hungry startup, ingests financial data from over 100 SaaS systems, including QuickBooks, NetSuite and Google Analytics, and then translates them to the some 250 institutional investors on its platform.

From Hum to mmhmm:       

IPO filings & other hubbub

Image Credits: ansonmiao / Getty Images

When the pandemic began to impact startups, Toast was top of the list. The restaurant tech startup had a series of deep layoffs as many of its clients in the hospitality industry had to shut down. Months later, Toast reentered headlines with a dramatically different message: It’s going public, and here’s all of our financial data.

Here’s what you need to know: This week, Toast published its S-1, offering a portrait into how the startup was impacted by the COVID-19 pandemic and answering questions on why it’s going public now. After ripping apart the Warby Parker S-1, Alex had five takeaways from the Toast S-1. My favorite excerpt? Toast was smart to diversify beyond its hardware, hand-held payment processors:

Toast’s two largest revenue sources — software and fintech incomes — have posted constant growth on a quarter-over-quarter basis. Hardware revenues have proved slightly less consistent, although they are also moving in a positive direction this year and set what appears to be an all-time record result in Q2 2021.

Toast would have had a much worse second quarter last year if it didn’t have software revenues. And since then, its growth would not have been as impressive without payments revenues (its fintech line item, speaking loosely). The broad revenue mix that Toast built has proved to limit downside while opening lots of room for growth.

Butter or jam:

Around TC

You already bought your tickets to Disrupt right? If not, here’s the link, with a fancy discount from yours truly.

Now that that’s out of the way, I want you to listen to Found, TechCrunch’s newest podcast that focuses on talking to early-stage founders about building and launching their companies. Recent episodes include:

Across the week

Seen on TechCrunch

Seen on Extra Crunch

Talk next week,

N



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Twilio gets hacked, teens ditch Facebook, and SpaceX takes South Korea to the moon – TechCrunch

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Hi again! Welcome back to Week in Review, the newsletter where we quickly recap the top stories from TechCrunch dot-com this week. Want it in your inbox every Saturday? Sign up here.

Is Facebook for old people? If you’ve got a teenager around the house, you’ve probably heard them say as much. The most read story this week is on a Pew study that suggests this generation of teens has largely abandoned the platform in favor of Instagram/YouTube/TikTok/etc.; whereas in 2014 around 71% of teens used Facebook, the study says in 2022 that number has dropped down to 32%.

other stuff

Mark Cuban sued over crypto platform promotion: “A group of Voyager Digital customers filed a class-action suit in Florida federal court against Cuban, as well as the basketball team he owns, the Dallas Mavericks,” writes Anita, “alleging their promotion of the crypto platform resulted in more than 3.5 million investors losing $5 billion collectively.”

A troubling layoff trend: While tech layoffs might, maybe, hopefully be showing signs of slowing, Natasha M points out a troubling trend: some companies are announcing layoffs only to announce another round of layoffs just weeks or months later.

SpaceX launches South Korea’s first moon mission: South Korea has launched its first-ever lunar mission — a lunar orbiter “launched atop a SpaceX Falcon 9 rocket” ahead of plans to land on the surface some time in 2030.

Twilio gets hacked: While it’s unclear exactly what data was taken, Twilio says the data of at least 125 customers was accessed after some of its employees were tricked “into handing over their corporate login credentials” by an intense SMS phishing attack.

Amazon’s bizarre new show: Think “America’s Funniest Home Videos,” but made up of user-submitted footage from Ring security cameras. By now most people probably realize their every step is recorded on a security camera or three — but doesn’t embracing it as Entertainment™ like this feel kind of…icky?

Haus hits hard times: Haus, a company that ships specialized low-alcohol drinks direct to consumers, is looking for a buyer after a major investor backed out of its Series A. The challenge? Investor diligence for an alcohol company can take months, and Haus just doesn’t “have the cash to support continued operations at this time.”

Image Credits: Haus

audio stuff

How clean is the air you breathe every day? Aclima co-founder Davida Herzl wants everyone to be able to answer that question, and sat down with Jordan and Darrell on this week’s Found podcast to explain her mission. Meanwhile on Chain Reaction, Jacquelyn and Anita explain the U.S. gov’s crackdown of the cryptocurrency mixer Tornado Cash, and the Equity crew spent Wednesday’s show discussing whether the turbulent market conditions of late will mean we see fewer early-stage endeavors in the months ahead.

additional stuff

What lies behind the paywall? A lot of really good stuff! Here’s what TechCrunch+ subscribers were reading most this week…

Building an MVP when you can’t code: Got a great idea but can’t code? You can still get the ball rolling. Magnus Grimeland, founder of the early-stage VC firm Antler, lays out some of the key principles to keep in mind.

Are SaaS valuations staging a recovery?: “…the good news for software startup founders,” writes Alex, “is that the period when the deck was being increasingly stacked against them may now be behind us.”

VCs and AI-powered investment tools: Do VCs want AI-powered tools to help them figure out where to put their money? Kyle Wiggers takes a look at the concept, and why not all VCs are on board with it.



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Digital pensions platform Penfold raises $8.5M Series A led by Bridford Group – TechCrunch

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Penfold, a digital pensions platform, has closed a £7m ($8.49m) Series A funding round led by Bridford Group, an investment group.

Also participating in the round was Jeremy Coller, Chief Investment Officer and Chairman of Coller Capital. Penfold also raised additional funding via a crowdfund amongst its customer base. The cash will be used to expand Penfold’s workplace pension division.

Chris Eastwood, Co-Founder at Penfold, commented (in a statement): “It’s been a big year for Penfold – from launching our workplace pension offering, to reaching £100m AUA.”

Bridford Group, lead investor, commented: “The pensions industry represents a huge market – with £8trn in savings in the UK alone. Despite this, many people remain uninterested and unengaged in their pensions. With so many people not saving enough, there’s a real opportunity for a new provider to step in.” 



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After the FBI raid at Mar-a-Lago, online threats quickly turn into real-world violence – TechCrunch

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Threats of violence reached a fever pitch — reminiscent of the days leading up to the Capitol attack — following the news that the FBI raided Trump’s Florida beach club to retrieve classified documents the former president may have unlawfully taken there.

After Trump himself confirmed Monday’s raid at Mar-a-Lago, pro-Trump pundits and politicians rallied around declarations of “war,” and Trump’s ever-fervent supporters called for everything from dismantling the federal law enforcement agency to committing acts of violence against its agents. The situation escalated from there in record time, with online rhetoric boiling over quickly into real-world violence.

By Thursday, an armed man identified as Ricky Shiffer attempted to force his way into an FBI office in Cincinnati, Ohio, brandishing a rifle before fleeing. Law enforcement pursued Shiffer and he was fatally shot during the ensuing standoff with police.

Analysts with the Institute for Strategic Dialogue (ISD), a nonprofit that researches extremism and disinformation, found evidence that Shiffer was driven to commit violence by “conspiratorial beliefs related to former President Trump and the 2020 election…interest in killing federal law enforcement, and the recent search warrant executed at Mar-a-Lago earlier this week.” He was also reportedly present at the January 6 attack — another echo between this week’s escalating online threats and the tensions that culminated in political violence at the Capitol that day.

Shiffer appears to have been active on both Twitter and Truth Social, the platform from Trump’s media company that hosts the former president and his supporters. As Thursday’s attack unfolded, Shiffer appeared to post to Truth Social about how his plan to infiltrate the FBI office by breaking through a ballistic glass barrier with a nail gun had gone awry. “Well, I thought I had a way through bullet proof glass, and I didn’t,” the account posted Thursday morning. “If you don’t hear from me, it is true I tried attacking the F.B.I., and it’ll mean either I was taken off the internet, the F.B.I. got me, or they sent the regular cops…”

In posts on Truth Social, the account implored others to “be ready to kill the enemy” and “kill the FBI on sight” in light of Monday’s raid at Mar-a-Lago. It also urged followers to heed a “call to arms” to arm themselves and prepare for combat. “If you know of any protests or attacks, please post here,” the account declared earlier this week.

By Friday, that account was removed from the platform and a search of Shiffer’s name mostly surfaced content denouncing his actions. “Why did you censor #rickyshiffer‘s profile? So much for #truth and #transparency,” one Truth Social user posted on Friday. Still, online conspiracies around the week’s events remain in wide circulation on Truth Social and elsewhere, blaming antifa for the attack on the Ohio FBI office, accusing the agency of planting documents at Mar-a-Lago and sowing unfounded fears that well-armed IRS agents will descend on Americans in light of Friday’s House passage of the Inflation Reduction Act.

“‘Violence against law enforcement is not the answer no matter what anybody is upset about or who they’re upset with,’ FBI director Christopher Wray said in light of emerging threats of violence this week. Trump appointed Wray to the role in 2017 after infamously ousting former FBI director James Comey.”

Friday is also the five-year anniversary of the Unite the Right rally, which saw white nationalists clad in Nazi imagery marching openly through the streets of Charlottesville, Virginia. The ensuing events left 32-year-old protester Heather Heyer dead and sent political shockwaves through a nation that had largely grown complacent about the simmering threat of white supremacist violence.



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Diagnostic Robotics has AI catching health problems before they take you to the ER – TechCrunch

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A stitch in time saves nine, they say — and a blood thinner in time saves a trip to the emergency room for a heart attack, as Diagnostic Robotics hopes to show. The company’s machine learning-powered preventative care aims to predict and avoid dangerous (and costly) medical crises, saving everyone money and hopefully keeping them healthier in general —  and it’s raised $45 million to scale up.

It’s important to explain at the start that this particular combination of AI, insurance, hospital bills, and “predictive medicine” isn’t some kind of technotopian nightmare. The whole company is based on the fact that it’s both better for you and cheaper if you, for example, improve your heart health rather than have a heart attack.

That’s why your doctors tell you to cut down on red meat and maybe even take a cholesterol-maintenance medication instead of saying “well, if you have a heart attack just go to the ER.” It’s just common sense, and it also saves patients, hospitals, and insurance companies money. And don’t worry, this kind of prediction can’t be used to raise your premiums or deny care. They want you making monthly payments — they just don’t want to have to shell out for a $25,000 operation if they can help it.

The question is, what about less obvious conditions, or ones that patients haven’t had specific tests for? This is where machine learning models come in; they’re very good at teasing out a signal from a large amount of noise. And in this case what the AI was trained on is 65 million anonymized medical records.

“We see how people look before the problems — everything we do is preventative care,” said Kira Radinsky, CEO and co-founder of Diagnostic Robotics. “It’s all about offering the right intervention, at the right time, to the right patient.”

She noted that providers often focus on the most expensive patients in order to reduce costs — for example, someone with advanced heart disease. But while acute and maintenance care continues to be important for them, that money has already gone out the door. On the other hand, if you diagnose someone with early signs of congestive heart failure, you can stop it from advancing and save money and possibly even a life. And the technique applies beyond things that can be detected in labs.

“Say the challenge is to find patients suffering from depression or anxiety, but aren’t taking any medications,” Radinsky proposed. “How do you identify someone with depression or anxiety based on medical records? We identify the entropy of their visits — lots of providers, lots of complaints — that’s a strong signal. Then you do specific questions, a medical triage, and you get them connected to a psychologist or psychiatrist, and they’re no longer deteriorating.”

The company claims it can reduce ER visits by three quarters, which is important beyond the immediate benefits for a person and their provider; ERs and urgent cares are overwhelmed in the U.S., paradoxically due to the pervasive fear of incurring huge medical expenses.

Example of a tablet interface showing a patient’s info as sorted by Diagnostic Robotics’ models.

In many cases, she said, medical providers or insurers will offer medications or treatment for free or at nominal cost, since they know they’re saving themselves a bigger bill down the line. Sure, it’s all out of self-interest, but that means you can trust them.

The Tel Aviv-based Diagnostic Robotics just raised a big $45 million B round, led by StageOne investors, with participation from Mayo Clinic, Technion (Israel Institute of Technology) and Bradley Bloom. Radinsky said this will help the company start working more directly with providers, taking on more holistic health goals in addition to specific high-risk conditions. (The company currently tracks around 20.)

A pilot test of this broader approach was recently validated in a study of a few hundred patients, in which the AI-prepared health plan was statistically indistinguishable from a clinician’s. The company is already serving millions of patients in some capacity, in Israel, South Africa, and in the U.S., with Blue Cross Rhode Island.

If they expand to your provider, don’t expect some kind of robotic examination, though the name obviously suggests this.

“You’ll get phone calls from care managers offering additional treatments, for free or almost for free,” Radinsky said. The AI will already have done its work, and maybe your test results and location suggest you’re at risk for something — and you’d do well to take these recommendations seriously. AI may have a lot of room to grow still but it’s good at sniffing out statistical correlations.

She was careful to add that they are also actively working on finding, defining, and mitigating bias in the algorithms, whether it results from biased data or human error somewhere else along the lines. “What the algorithm is trying to do is see who will benefit the most,” Radinsky explained, but as with other forms of AI and machine learning, only careful monitoring will tell whether its idea of who benefits matches the real world.



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Amazon-owned MGM makes a viral video show with surveillance footage from Amazon-owned Ring – TechCrunch

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MGM (which is owned by Amazon) is making a viral video show based on footage from Ring security cameras (also owned by Amazon). The syndicated television show, “Ring Nation,” is poised to be a modern-day, surveillance-tinged spin on “America’s Funniest Home Videos” with Wanda Sykes as host.

According to a report in Deadline, the show will feature Ring footage of “neighbors saving neighbors, marriage proposals, military reunions and silly animals.” Ring is also known for activities like accidentally leaking people’s home addresses and handing over footage to the government without users’ permission.

Between January and July of this year, Amazon shared ring doorbell footage with U.S. authorities 11 times without the device owner’s consent. Ring has been critiqued for working unusually closely with at least 2,200 police departments around the United States, allowing police to request video doorbell camera footage from homeowners through Ring’s Neighbors app. Like Citizen and Nextdoor, the Neighbors app tracks local crime and allows users to comment anonymously — plus, Ring’s police partners can publicly request video footage on the app.

An Amazon-owned police surveillance network is bad enough, but Neighbors users have also faced repeated safety and security issues.

An executive at MGM, Barry Poznick, praised the new show: “From the incredible, to the hilarious and uplifting must-see viral moments from around the country every day, Ring Nation offers something for everyone watching at home.”

But perhaps what viewers at home really want is data privacy.

Ring only started disclosing its connections with law enforcement after fielding demands for transparency from the U.S. government. In a 2019 letter, Senator Ed Markey (D-MA) said that the company’s relationship with police forces raise civil liberties concerns.

“The integration of Ring’s network of cameras with law enforcement offices could easily create a surveillance network that places dangerous burdens on people of color and feeds racial anxieties in local communities,” Sen. Markey wrote. “In light of evidence that existing facial recognition technology disproportionately misidentifies African Americans and Latinos, a product like this has the potential to catalyze racial profiling and harm people of color.”

Amazon bought the smart video doorbell company in 2018 for $1 billion, then bought MGM for $8.5 billion earlier this year. Now, these two investments — which seemingly have nothing to do with each other — are merging to create a late-capitalist dystopian spectacular that we couldn’t have imagined in our worst nightmares. Amazon also just spent $1.7 billion on iRobot, maker of the Roomba vacuum, but we will not dare to imagine how that acquisition may one day inspire a horrifying TV show.



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Teens have abandoned Facebook, Pew study says – TechCrunch

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Gen Z internet use is on the rise, but the rate at which teens use Facebook is rapidly declining. A Pew Research Center study on teens, technology and social media found that only 32% of teens aged 13-17 use Facebook at all, but in a previous survey from 2014-2015, that figure was 71%, beating out platforms like Instagram and Snapchat.

Jules Terpak, a Gen Z content creator covering digital culture, told TechCrunch that teens just don’t find value in Facebook anymore.

“There are now well over five strongly positioned social media platforms to endlessly scroll through, and it isn’t sustainable for our minds to compartmentalize nor prioritize our relationship with all of them,” Terpak said via email. “For the sake of time and sanity, people have to eliminate platforms that begin to lack a value-add incentive.”

Terpak thinks that Facebook, which teens often associate with their parents, has little to offer Gen Z.

“The culture cultivated by the average Facebook user is very disconnected from what attracts Gen Z to a platform today, instead exuding the energy of a spam email,” she said.

Even in 2013, when 77% of online teens used Facebook, young users still felt negatively about the platform.

“While Facebook is still deeply integrated in teens’ everyday lives, it is sometimes seen as a utility and an obligation rather than an exciting new platform that teens can claim as their own,” Pew’s report from 2013 said. In that nine-year-old study, Pew found that teens expressed more enthusiasm for other platforms, even if they weren’t using them as much as Facebook. That trend has remained constant — as new generations of teens join social media, they’ve almost abandoned Facebook altogether.

Pew’s new findings are also consistent with Facebook’s own internal reporting, according to documents leaked by whistleblower Frances Haugen. A Facebook researcher found in early 2021 that teenage users on Facebook’s app had declined 13% since 2019 and projected that the figure would continue to plummet 45% over the next two years. Overall, Facebook usership has remained somewhat stagnant, but this drop-off in a key demographic is bad news for Facebook’s ads business, which makes up the bulk of its revenue.

“Most young adults perceive Facebook as a place for people in their 40s and 50s,” said the 2021 internal Facebook document obtained by The Verge. “Young adults perceive content as boring, misleading, and negative.”

Instagram is not far behind TikTok

Even if teens are tired of Facebook, they haven’t given up on Instagram, another Meta platform. Sixty-two percent of teens use Instagram, up from 52% in the 2014-2015 survey. But TikTok, which wasn’t even released at the time of the last study, is now used by 67% of U.S. teens. Ninety-five percent of teens say they use YouTube, which may make it seem like it’s the dominant social platform — but many users interact with the platform simply to watch videos, rather than as a place to connect with others online. For example, a teen who uses YouTube to listen to music would be included in that 95%.

But as TikTok inches above Instagram and Snapchat — which are used by 62% and 59% of American teens, respectively — it makes sense why these older platforms are so desperate to mimic their newer competitor.

Pew also asked the 1,316 surveyed teens about the frequency with which they use these apps. But TikTok still earned a greater share of teens’ attention than any platform aside from YouTube, which 19% of teens say they use “almost constantly.” TikTok, Instagram and Snapchat earned this “almost constant attention” from 16%, 10% and 15% of teens respectively. Only 2% said this about Facebook.

These “almost constant” admissions might seem alarming, but teens are aware that social media usage may not always provide the social connection they hope for. Thirty-six percent of teens think that they spend too much time on social media. Conversely, only 8% of teens said that they think they don’t use social media enough.

If you think Gen Z is full of phone-addicted zombies, though, you might be wrong. Forty-five percent of teens said that they wouldn’t have trouble giving up social media. More power to them.



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Google Meet’s new feature lets users consume YouTube and Spotify together – TechCrunch

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As Google continues the great merger between its Duo and Meet video communications apps, the company today announced that it’s introducing new Apple SharePlay-like live-sharing features to Meet, making it easier for call-participants to engage with content together in real time.

It’s worth noting that Google already introduced some live-sharing features (e.g. watching YouTube videos together) to Duo back in February, and now it’s bringing them to Meet as the part of the merger.

The live-sharing feature will let users watch YouTube videos together, for example, and listen to songs on Spotify or play games such as Heads Up!, UNO! Mobile or Kahoot!.

These new features will be available under a new Activities tab — which also hosts Q&A and polls options — and is accessible through the three-dot menu. From there, users can start a shared activity — for instance, if they want to listen to a Spotify track together, they would tap on the Spotify icon and Meet redirects them to the Spotify app where they can join a group session. Notably, the group session feature is only available for Spotify Premium customers, with support for two to five participants.

Last week, Google took the next step of merging both video calling apps by updating the icon for Duo and renaming it Google Meet. As for Google Meet, it will be now called “Google Meet (original),” with a green icon — yes, it’s all very confusing. The tech giant has been adding other new features to Meet, too, such as instant and schedule meeting options, in-meeting chat, and virtual backgrounds.

While these latest updates work well for Meet calls across different platforms, consumers embedded in Apple’s ecosystem will already be familiar with this type of social content consumption through SharePlay, which works across a broader array of apps such as Apple TV+, TikTok, Disney+, Hulu, HBO Max, NBA, Twitch, TikTok, MasterClass, ESPN+, Paramount+, Pluto TV, Apple Fitness+, and Apple Music.



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