The chief executive of autonomous vehicle developer Aurora Innovation presented a swath of cost-cutting and cash-generating options to its board, ranging from a hiring freeze and spinning out assets to a small capital raise, going private and even selling itself to high-profile tech companies Apple and Microsoft.
The ideas, all aimed at shoring up its cash position and extending its runway in tough market conditions, were laid out in an internal memo first reported by Bloomberg and also viewed by TechCrunch. The internal memo, which was intended for the board ahead of its August 3 meeting, was mistakenly sent to all Aurora employees, which today numbers around 1,600 people.
Following the Bloomberg report, Aurora shares jumped as much as 27%. Shares closed up 15.17% to $2.43.
Aurora has a “cash runway” that will allow it to continue operations through mid-2024, according to its second-quarter letter to shareholders and noted in the memo. However, Aurora is still a pre-revenue company. And the memo written by co-founder and CEO Chris Urmson acknowledged a two-fold problem: a challenging financial market that makes it difficult to raise additional capital and shifting timelines by its OEM partners that delays revenue.
Aurora, which has prioritized commercializing self-driving trucks, has pilot partnerships with FedEx, Paccar, Schneider, Werner and Xpress.
Aurora held a board meeting after the email was shared. An Aurora spokesperson declined to comment on what was discussed during the meeting. The company did provide an emailed statement stating,“Given the current macro conditions, every company should be going through the exercise of evaluating its options and long-term strategy. We think that thinking through things like this is a positive sign and a mark of good governance.”
Urmson noted that market conditions make it unlikely that the company could raise $1 billion. Instead, he laid out a long list of options — each one noting pros and cons as well as his biggest concern of maintaining employee morale — and said there was value in finding a “path to raise $300 million in the next year to add around six months to our runway.”
Extending the runway
Urmson’s internal memo reads more like a financial and strategic exercise than a plan of action. The lengthy memo, which was sent ahead of its August 3 board meeting, lays out virtually every option the company could take to extend its cash position.
The memo’s more eye-catching ideas include selling itself to Big Tech companies like Apple or Microsoft or a Tier 1 supplier. However, the memo provides zero hint that discussions with any company have even begun.
There are a number of other options, which fall under cash-savings and cash-generating measures, laid out in the memo. The cash savings methods run the gamut, including a hiring freeze and even job cuts, although Urmson cautioned against the latter.
“I believe that a RIF (reduction in force) will be damaging to morale,” Urmson wrote, noting that teams are feeling understaffed. “Though the board (and I) might believe that the team will be more efficient if smaller, we expect that the negative morale impact and follow-on increase in attrition of valuable talent would be challenging. Unless the layoffs are substantial, we should think of this primarily as an improving efficiency tactic, rather than a substantial increase in runway, once we consider the severance costs.”
On the workforce front, Urmson recommended two options: “aggressive performance management of poor performers” and “more intensive de-duplication and prioritization.” Cutting through the jargon this could mean laying off poor performers and eliminating duplicated positions or simply not filling those positions once vacated.
Those measures, Urmson wrote, may not have the operational simplicity of a RIF or hiring freeze, but would result in meaningful efficiency improvements and cost savings. He estimated a savings of $7.5 million.
Other cash-cutting measures such as eliminating the CEO equity grant, reducing software licenses by 20%, suspending annual bonuses and stopping food service were also included in the memo.
Urmson also threw out a variety of cash-generating options that ranged from the sale of its test track and building to bigger moves such as spinning out or selling its lidar or simulation assets, acquiring other AV companies that are trading at or near the cash on their balance sheet “in the neighborhood of $150 million to $300 million,” taking Aurora private or selling itself to a bigger tech company or Tier 1 supplier.
Acquiring another AV company would eliminate another competitor, reduce the dilution of funding in the marketplace and allow Aurora to “aggressively reduce redundancies,” according to the memo. Aurora doesn’t name any potential companies on that acquisition list. However, there are a few such as Embark, which has a market cap of $204 million, that might qualify.
Aurora hired Allen & Co to analyze the acquisition path, according to the memo.
Of all the options, Urmson seemed most interested in exploring whether there was a viable path to spinning out tech, pursuing an acquisition and investigating a small capital raise.
Urmson said in the memo he was disinclined to sell the company at this time, unless there was a strong offer from a “very compelling strategic purchaser.”
Buzzy startup to SPAC
Aurora went from buzzy startup to publicly traded company-via-SPAC in a span of four years. The company was founded in 2017 by Sterling Anderson, Drew Bagnell and Urmson, all whom have a history of working on automated vehicle technology.
The three co-founders, who hailed from Google’s self-driving project, Uber ATG and Tesla, helped attract high-profile investors and a stack of capital.
Aurora’s co-founders doubled down in December 2020 when they reached an agreement with Uber to buy the ride-hailing firm’s self-driving unit. The complex deal that at the time valued the combined company at $10 billion helped Aurora double the size of its workforce.
Under the terms of that acquisition, Aurora did not pay cash for Uber ATG. Instead, Uber handed over its equity in ATG and invested $400 million into Aurora. Uber received a 26% stake in the combined company, according to a filing with the U.S. Securities and Exchange Commission.
Aurora made at least one other acquisition following the Uber deal. In February 2021, Aurora bought OURS Technology, the second lidar startup it had acquired in less than two years. Aurora acquired Blackmore, a Montana-based lidar startup, in May 2019.
Against that backdrop, dozens of startups across industries that were keen to unlock more capital turned to mergers with special purpose acquisition companies. These SPAC mergers offered a quicker, yet often more costly, path to the public marketplace.
Aurora jumped on the SPAC train, announcing in July 2021 that it would go public via a merger with Reinvent Technology Partners Y, a special purpose acquisition company launched by LinkedIn co-founder and investor Reid Hoffman, Zynga founder Mark Pincus and managing partner Michael Thompson.
A year later, the promises of what a high-flying public marketplace could offer has come back down to earth, forcing frontier tech companies like Aurora to find ways to extend their capital runways long enough to reach commercialization.
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Twitter expands access to its experimental Status feature…but not to its paid subscribers • TechCrunch
Twitter’s throwback feature, Twitter Status, is today expanding its list of potential status updates to choose from, in a continuation of tests that began this July. The feature, which is something of a cross between MySpace moods and a Facebook status, allows users to tag posts with an additional expression beyond the tweet itself — like “shower thoughts,” “spoiler alert” or “picture of the day.” Now, the company is adding common Twitter slang to its list, allowing users to tag their tweets with things like “Don’t @ me,” “Tweeting it into existence,” or “That’s it, that’s the Tweet,” and more.
The expansion was first spotted by app researcher Jane Manchun Wong, and Twitter confirmed the addition began rolling out to Twitter Status testers on Monday.
Other new status options now available include “Breaking news,” “Gaming,” “Pet of the day,” “So wholesome,” “Then and now,” “To whom it may concern,” “Touching grass,” “Twitter do your thing,” “Watching cricket,” “Watching football,” “Watching rugby,” and “Winning.”
The experiment, however, is not one of the “early access” features provided to Twitter’s paying customers as part of their Twitter Blue subscription.
Until today, the option to add a status to a tweet has been available to a select group of users in the U.S. With the update, Twitter says it’s now bringing on users in Australia, as well.
“As part of this expansion, those with access to the status feature will see a new set of potential statuses to choose from. Additionally, more people in Australia will also receive access to the experiment today,” a Twitter spokesperson told TechCrunch. They added that, with today’s update, the “majority of people in Australia” will now be able to use the feature.
One group that doesn’t necessarily have the ability to use the Twitter Status feature is the group of power users who pay for a Twitter Blue subscription. Though Twitter marketed Blue to those who wanted an expanded range of features — like a better news reading experience, personalization options, and early access to experiments — it hasn’t made all its new product tests available to its paid subscribers.
For instance, when Twitter began rolling out the addition of podcasts to its revamped “Audio” tab, Twitter Blue users weren’t the first group to gain access to the feature. Instead, Twitter made podcasts visible to a random group within its English-speaking mobile audience in August before later rolling out podcasts to paid subscribers the following month.
Similarly, Twitter Status isn’t listed among the experiments offered to Twitter Blue subscribers at this time.
Asked why Twitter isn’t prioritizing its paid subscriber base when it comes to trialing its new products first, as promised, a spokesperson clarified that it will only offer some of its experiments to subscribers while others will be tested with the broader public.
This seems to be a poor strategic decision on Twitter’s part, as those who are actually paying for Twitter have to stand by and watch other users get to play around with new features first — a perk they were promised. Though it’s understandable that some features may need to be tested among a larger group, at the very least, paid customers should be within that group.
The spokesperson clarified that Twitter Blue subscribers will have access to what the company considers “higher-impact” features first — like NFT profile pictures and, notably, the new Edit Tweet option.
The latter also today rolled out to Blue subscribers in Canada, Australia, and New Zealand after Twitter teased the editing feature last week. But the launch does not yet include Twitter Blue’s largest market, the U.S., which Twitter said would be “coming soon.”
Again, this strategy seems to be off the mark. While it’s one thing to test a small experiment within select geographies, it’s disheartening to see Twitter prioritize select markets and non-subscribers over its paying customers when it comes to some of its most fun and in-demand features.
Geely’s Europe expansion continues, Argo robotaxis on the Lyft app and Tesla AI Day takeaways • TechCrunch
The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive the full edition of the newsletter every weekend in your inbox. This is a shorter version of The Station newsletter that is emailed to subscribers. Want all the deals, news roundups and commentary? Subscribe for free.
Welcome back to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B.
The week capped off with Tesla AI Day, a recruitment slash roadshow that ended up lasting three hours. Yeah.
What did we learn and see? Tesla has made progress on its Tesla bot, also called Optimus. It is no longer a human dressed in a robot suit, but an actual robot. Will it make Boston Dynamics or Serve Robotics shake in their boots? Probably not. But it was a robot that moved, albeit briefly.
A few takeaways:
1. The event was somehow simultaneously very dense and lacking basic details that would help establish baselines and progress.
2. Tesla made a point to put employees from the AI and hardware teams on stage (this is unusual for the typical Elon-centric reveals and events)
3. There was an incredible emphasis on how the bot was equipped with components and tech used in Tesla vehicles, notably Autopilot. There is an efficiency that comes from shared parts and technology, but it also can come at great risk. Especially when said tech — ahem Autopilot — is controversial and coming under increased scrutiny by regulators.
4. Musk was asked if Tesla was still a sustainable energy company and he responded “I think the mission effectively does somewhat broaden with the advent of Optimists to you know, I don’t know, making the future awesome.” He also said that he believed that Tesla could provide a meaningful contribution to artificial general intelligence.
5. Tesla employees provided other updates, including its auto-labeling technology and the Dojo supercomputer. While Tesla employees explained these, Musk was off-stage tweeting” “Naturally, there will be a catgirl version of our Optimus.”
There wasn’t too much micromobility news this week, so we’ll keep this brief. Here’s what you need to know in the world of tiny electric vehicles.
Climate change is killing bees, and that’s a big problem, because bees kind of help regulate the effects of climate change. What’s this got to do with micromobility? Well, Cake launched a limited edition Kalk model bike called Flower Power that’s available in seven different color options. The company said that 5% of profits from the bikes will be donated to the World Bee Project, which is dedicated to saving the planet’s bee population.
Delfast unveiled a smaller electric moped that it’s calling the Delfast California, which has a 750W motor and reach a max speed of 28 mph, making it slightly less intense than Delfast’s more badass bike the Top 3.0.
Pure Electric is teasing a folding scooter that is expected to launch in early October. Is that a fat tire we detect, or just a play of the light?
You’re reading an abbreviated version of micromobbin’. Subscribe for free to the newsletter and you’ll get a lot more.
Deal of the week
When news broke that Chinese carmaker Geely Holding Group acquired a 7.6% share of British luxury automaker Aston Martin Lagonda Global Holdings, one of my co-workers (and an international reporter who covers China) exclaimed: Geely owns everyone!
It sure seems like it.
Geely was aiming to own all of Aston Martin. Instead, it settled for a small stake. Geely didn’t even get a board seat out of the deal. But no matter, Geely has squeezed a lot out of seemingly empty juice vesicles before.
Geely, which owns Lotus and is the largest shareholder of Polestar and Volvo Cars, took a 10% stake valued at $9 billion in Mercedes-Benz parent Daimler in 2018. Geely didn’t have a board seat either, but managed to exert its influence over the company, including a joint venture with the German automaker that gave it partial control of the Smart car brand.
Aston Martin also announced that it raised $732 million from investors that included Mercedes-Benz and Saudi’s Public Investment Fund participating. Yew Tree Consortium holds 19% of Aston Martin following the raise. The Public Investment Fund has become a new anchor shareholder with a 18.7% stake in the company.
Other deals that got my attention this week …
Faraday Future, the struggling EV SPAC, secured up to $100 million in funding through $40 million in convertible notes and warrant exercise payments and up to $60 million in convertible notes from Hong Kong holding company Senyun International.
Gogoro signed a $345 million five-year credit facility agreement in order to increase liquidity amid uncertain economic conditions. The loan comes from a group of 10 syndicated banks led by Mega International Commercial Bank Co., according to a regulatory filing.
Harley Davidson’s electric motorcycle division spinoff, LiveWire, raised less than planned and was valued below expectations when it went public this week through a SPAC combination. Shocking! LiveWire brought in $295 million in net proceeds, which is short of the $545 million anticipated when the deal was announced in December.
Want more deals? A whole list of them, including info on Aptiv, TerraWatt and TruckSmarter were in the subscription version this week. Subscribe for free here.
Notable reads and other tidbits
Argo AI’s robotaxis are now operating on the Lyft network in Austin, Texas. This is a public service and the second city in which Lyft and Argo are operating a commercial robotaxi operation after Miami, which launched in December.
Aurora announced its 4th generation Driver, which can now detect and maneuver around a variety of objects and debris on the road and detect repainted lines in complex construction zones.
In a series of simulated tests, Waymo’s driver avoided crashes better than a virtual representation of a hyper-attentive driver.
Electric vehicles, batteries & charging
Arrival produced its first battery-electric van at the company’s Microfactory in Bicester, U.K., which uses autonomous mobile robots instead of a traditional assembly line. The remaining vans built this year will be earmarked for testing, validation and quality control, rather than customer delivery.
ChargerHelp has partnered with Tesla improve reliability and consumer confidence in charging access.
New York follows California and mandates that all new passenger cars, pickup trucks and SUVs sold in New York state must be zero emissions by 2035.
Airbnb co-founder and billionaire Joe Gebbia has joined Tesla’s board as an independent director.
Charly Mwangi, the former executive vice president of manufacturing at Rivian, who previously worked at Tesla, is now a partner at Eclipse Ventures.
Lyft has canceled job interviews and issued a hiring freeze in the U.S., according to anonymous professional network Blind.
Treepz CEO Onyeka Akumah talks to TechCrunch’s Rebecca Bellan about how to succeed in transportation in the latest edition of our founder’s Q&A series.
Want to read more of the notable reads plus other bits of news from the week? The Station’s weekly emailed newsletter has a lot more on EVs and AVs, future of flight, insider info and more. Click here and then check “The Station” to receive the full edition of the newsletter every weekend in your inbox.
24 hours left to apply to volunteer at TechCrunch Disrupt and attend for free • TechCrunch
It takes a veritable army to make TechCrunch Disrupt — which takes place October 18–20 in San Francisco — the well-oiled experience that savvy startuppers have come to know and love. And we couldn’t do it nearly as well without our incredible volunteers.
If you’re looking for a no-budget way to experience Disrupt up close and personal, sign up to volunteer for work exchange. Not only will you get a behind-the-scenes look at how to produce events, but you’ll also earn a free pass ($1,995 value) to experience the event. The deadline to apply is tomorrow, October 3 at 11:59 p.m. PDT.
You’ll work hard, play hard and get free access to all three days of Disrupt. Whether you dream of becoming a startup founder, marketer or event coordinator, this is a great way to see what it takes to produce a world-renowned tech startup conference.
Plus, your free pass gives you access to the full Disrupt experience — the main stage, the TechCrunch+ stage, the expo floor — where you’ll find the Startup Battlefield 200 — and the Startup Battlefield competition.
Volunteers handle a variety of tasks to help make this startup conference an epic experience for everyone. At any given time, you might help with registration, wrangle speakers, direct attendees, stuff goodie bags, place signage, scan tickets or help with pre-marketing activities.
We need volunteers on October 17–20. If you can meet the following criteria, we want to hear from you:
- Attend a mandatory orientation on Monday, October 17 at Moscone Center.
- Work a minimum of 10 hours during the entire conference, starting from October 17 (the day before the conference starts) to October 20. You’ll find volunteer shift availability in the application. We might select you for some pre-event opportunities, which would count toward your hours.
- You may be scheduled for an 8- to 9-hour shift or you may be scheduled with two separate shifts of 4 to 5 hours each. Shifts can start as early as 6:30 a.m. PDT or end as late as 8:30 p.m. PDT.
- You must provide your own housing and transportation.
- Due to the high volume of applications, we will notify only the selected applicants.
Read the volunteer FAQ for more information.
Lend us a helping hand, and we’ll hand you a free pass. Save money, gain valuable experience and still have plenty of time to take in all the startup goodness that TechCrunch Disrupt has to offer. Apply to volunteer by October 3 to get your free pass, and we’ll see you in October!
Meta plans hiring freeze, NASA shoots an asteroid, and Elon’s texts about Twitter are made public • TechCrunch
Hi all! Welcome back to Week in Review, the newsletter where we quickly sum up some of the most read TechCrunch stories from the past seven days. The goal? Even when you’re swamped, a quick skim of WiR on Saturday morning should give you a pretty good understanding of what happened in tech this week.
Want it in your inbox? Get it here.
- Elon’s texts: As part of the ongoing Musk vs. Twitter trial, a big ol’ trove of Twitter-related texts between Elon and various key figures/executives/celebrities has been made public. Amanda and Taylor look at some of the most interesting bits, with appearances from people like Gayle King, Joe Rogan, and Twitter founder Jack Dorsey (or, as he seems to be named in Elon’s contacts, “jack jack”.)
- Instagram bans PornHub’s account: “After a weeks-long suspension,” writes Amanda, “Pornhub’s account has been permanently removed from Instagram.” Why? PH says they don’t know, as they insist everything they put on Instagram was totally “PG” while calling for “full transparency and clear explanations.”
- Interpol issues a red notice for Terra’s founder: “Interpol has issued a red notice for Do Kwon,” write Manish and Kate, “requesting law enforcement agencies worldwide to search for and arrest the Terraform Labs founder whose blockchain startup collapsed earlier this year.”
- Google Maps’ new features: A bunch of new stuff is coming to Google Maps, and Aisha has the roundup. There’s a new view style meant to help you “immerse” yourself in a city before you visit, a “Neighborhood vibe” feature that aims to capture an area’s highlights, and augmented reality features that use the view from your camera to show exactly where ATMs and coffee shops are.
- Meta’s hiring freeze: The era of explosive hiring at Meta/Facebook is over, it seems. The company will freeze hiring and “restructure some groups” internally, Zuckerberg reportedly announced during an internal all-hands this week.
- Hacker hits Fast Company, sends awful push notifications: If you got a particularly vulgar push notification from Fast Company by way of Apple News this week, it’s because a hacker managed to breach the outlet’s content management system. The hacker also apparently published a (now pulled) post on Fast Company outlining how they got in.
- NASA hits an asteroid: If we needed to hit an asteroid from millions of miles away — to, say, change its course and steer it away from Earth — could we do it? NASA proved they could do just that this week, smashing a purpose-built spacecraft into an asteroid at 14,700 mph. The asteroid in question was never believed to be a threat to Earth, but these are the kinds of things you want tested before they’re necessary.
- Microsoft confirms Exchange vulnerabilities: “Microsoft has confirmed two unpatched Exchange Server zero-day vulnerabilities are being exploited by cybercriminals in real-world attacks,” writes Carly. Even worse? There’s no patch yet, though MSFT says one has been put on an “accelerated timeline” and offers temporary mitigation measures in the meantime.
Didn’t have time to tune in to all of TechCrunch’s podcasts this week? Here’s what you might’ve missed:
- Evernote and mmhmm co-founder Phil Libin joined us on Found to share what he’s learned about remote work and why he’ll “never go to work in the metaverse.”
- The Chain Reaction crew went deep on why crypto exchange FTX bid billions on a bankrupt company’s assets.
- Amanda joined Darrell on the TechCrunch Podcast to explore whether Tumblr was reversing its controversial porn ban (spoiler: no), and Devin hopped on to talk all about NASA’s wild anti-asteroid test mission.
What hides behind the TechCrunch+ paywall? Lots of really great stuff! It’s where we get to step away from the unrelenting news cycle and go a bit deeper on the stuff you tell us you like most. The most-read TC+ stuff this week?
- Is Silicon Valley really losing its crown?: A provocative question, one asked all the more after COVID flipped the switch on widespread remote work pretty much overnight. Alex dives into the investor data to see where the money is going, and whether or not that’s changed.
- Investors hit the brakes on productivity software: It’s an Alex Wilhelm double feature this week! After a few quarters of consistent investment growth, it seems investor interest in productivity tools might be waning. Why? Alex looks at why/how investment in the vertical has shifted.
Telegram cuts subscription cost by more than half in India • TechCrunch
Telegram has cut the monthly subscription fee for its premium tier by more than half in India, just months after introducing the offering as it attempts to aggressively cash in on a large user base in one of its biggest markets.
In a message to users in India on Saturday, Telegram said it was making the subscription available in the country at a discount. The monthly subscription now costs customers 179 Indian rupees ($2.2), down from 469 Indian rupees ($5.74) earlier. The app’s monthly subscription, called Telegram Premium, costs between $4.99 to $6 in every other market.
Users who have not received the message are also seeing the new price in the settings section of the app, they said and TechCrunch independently verified.
India is one of the largest markets for Telegram. The instant messaging app has amassed over 120 million monthly active users in the country, according to analytics firm data.ai. (An industry executive shared the figures with TechCrunch.) That figure makes the app the second most popular in its category in the country, only second to WhatsApp, which has courted over half a billion users in the South Asian market.
Telegram, which claims to have amassed over 700 million monthly active users globally, introduced the optional subscription offering in June this year in a move it hopes will improve its finances and continuing to support a free tier. Premium customers gain access to a wide-range of additional features such as the ability to follow up to 1,000 channels, send larger files (4GB) and faster download speeds.
The Dubai-headquartered firm joins a list of global tech firms that offer their services for lower cost in India. Apple’s music app charges $1.2 for the individual monthly plan in the country, whereas Netflix’s offerings starts at as low as $1.83 in the country.
Welcome to spooky season in startups • TechCrunch
Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.
It would be unfair to say that this week in tech and startups felt like 2021’s boom cycle; especially when you look at layoffs coming from Truepill, its fourth this year, and Meta announcing that it will freeze hiring. At the same time, it does feel like there’s a new feeling in the air. Heck, NFT marketplaces are still raising money.
The market is not dull, but it’s not loud; and the mood among my sources is certainly closer to spooky than it is to savage. Besides the fact that, yes, I did grow up writing poetry about fall foliage before deciding that I wanted to be a journalist, I’m saying all this to validate the nuance of this moment.
The ideas that I’m looking toward throughout the end of the year are as follows:
- What happened to the black swan memos? In the early innings of the economic downturn, investors turned to portfolio companies to warn of an increasingly volatile environment. That conversation hasn’t disappeared, but it has certainly gotten quieter, with many investors now telling me that there’s a super surge of financing on the way. So, what’s the new guidance that is being sent to portfolio companies?
- What’s the human side of the layoff story? My colleagues Mary Ann and Christine gave us all an important lesson this week, which is that stories about workforce reductions should not revolve around the employer. The duo wrote about the human cost of Better.com’s layoff spree — full story here — and I’m not-so-subtly going to steal this idea. I want to talk to people impacted by tech’s 2022 layoff wave and hear what next steps look like. I hear it’s a lot more complicated than “you should’ve known your company was overhyped to begin with.”
- Finally, what are startups preparing to actually do differently? I’m guilty of this, but we often speak about startups and tech with generalizations, slightly hedged by explaining that it’s useful for directional purposes. I want to know what startups learned this year and are tactically doing differently. Spending with more discipline or focusing on the product doesn’t count; give me specifics, and better yet, tell me what you are disagreeing with your investors on.
Do let me know what yours are by tweeting at me or responding to this post. If you missed last week’s newsletter, read it here: “Tiger Global, fickle checks and the difficulty of acceleration.” We also recorded a companion podcast, here: “Building startups in public has an end date.”
In today’s newsletter, we’ll talk about the beauty of pivots, a creative way to prove that your startup hires entrepreneurial people and the latest from 500 global.
If you like this newsletter, do me a quick favor? Forward it to a friend, share it on Twitter and tag me so I can thank you for reading myself!
A reminder that pivots work
TC’s Rebecca Szkutak wrote about how a pivot helped HopSkipDrive win a difficult pitch to parents: Trust your kids with our ride-sharing services.
Here’s why it’s important: As we discussed in our latest Equity podcast, sometimes we’re all just a Hop, Skip and a Drive away from success. The “Uber for X” model has been MIA for a few years now, so the story behind HopSkipDrive and its trusty partner stands out to me. Who said schools weren’t experimental!
A different version of CVC, I guess
News broke this week that Cloudflare gathered $1.25 billion in financing for startups that use its own platform. Well, kind of.
Here’s why it’s important: The security, performance and reliability company didn’t raise a corporate venture fund, typical of other companies looking to breed entrepreneur attention. Instead, Cloudflare just got dozens of venture firms to offer to invest up to $1.25 billion to companies in their existing funds. It’s a little softer than a traditional investment vehicle, given that we don’t know how formal those offers of support are, and the fact that Cloudflare is not providing any funding or making any funding decisions.
To me, the commitment just tells us that Cloudflare wants to show startups that it doesn’t just make sense to use their software, it makes cents.
I’m experimenting with a new section in Startups Weekly, where each week we follow up with an old story or trend to see what’s changed since our first look. This week, we’re following up on our conversation about accelerator and demo days with a look at how 500 Global, formerly 500 Startups, thinks about it.
Here’s what’s new: It’s been a little over a year since accelerator 500 Startups rebranded to 500 Global in an attempt to reposition itself as a venture firm. In my latest for TechCrunch+, I spoke to Clayton Bryan, partner and head of 500 Global’s accelerator program, about how they keep up with competition. Excerpt down below!
The investor highlighted the effectiveness of rolling admissions, which its two main accelerator competitors, Y Combinator and Techstars, don’t do. Three years ago, 500 Global said it would decide on investments all year instead of just twice yearly. Demo days will still happen biannually, but startups can choose which demo day they want to be a part of.
“That change has really resonated with founders,” Bryan said. He compared the previous version of 500 Global to a school with an annual schedule: There are times when you’re doing homework, times when you sit back and recruit, and summer vacation. Now, it’s year-round, and he admits it’s more challenging to manage, “but at the same time, much more appreciated by the founders.”
“I do think it makes us more competitive,” he said. “We can more frequently talk to founders and they can start our program at different points in time. They don’t have to wait for that application to open or that deadline. Whereas [with] some other programs, they might say, ‘Hey, wait for a couple more months so we’re accepting applications again.’ I think that openness and flexibility gives us a bit of an advantage.”
A few notes
We’re less than one month away from TechCrunch Disrupt, and I’m already emotional. It’s going to be a blast, a pep talk, a realization and a week not to miss. Here’s the full agenda, and here’s where you can get your tickets.
- First up, use code “STARTUPS” for a special reader discount for Disrupt tickets. We’re less than one month away!
- We also have a special for those impacted by layoffs. If you were laid off, go here to get a free ticket to TechCrunch Disrupt’s Expo.
While I have you, let’s talk some more. As you know, I co-host Equity, which goes out thrice a week and is TC’s longest-running podcast. We have some besties to listen to, too, including our crypto-focused show that goes by Chain Reaction and founder-focused show that goes by Found. The TechCrunch Podcast is also a can’t miss, so pay attention to all the good shows that they’re putting out.
Seen on TechCrunch
Seen on TechCrunch+
Same time, same web page, next week?
Tesla’s robot strategy is inextricably tied to its Autopilot strategy, for better or for worse • TechCrunch
Tesla unveiled its first prototype of its Optimus humanoid robot on Friday — an actual robot this time, by the strictest definition, instead of a flesh and blood human clad in a weird suit. The robot performed some basic functions, including walking a little bit and then raising its hands — all for the first time without supports or a crane, according to Tesla CEO Elon Musk.
The company may be taking its first early steps into humanoid robotics, but it has a lot riding on the business. Musk has said that the Optimus bot will eventually be more valuable “than the car business, worth more than FSD (Tesla’s add-on ‘Full Self-Driving” feature, which is not self driving.)
What was apparent at the event Friday night is that Tesla is making the economically wise, but strategically questionable decision to yoke together the destinies of both Optimus and its Autopilot (and by extension, FSD) ambitions.
Tesla suggested that the reason it’s been able to move so quickly in the robotics world is that it has already laid a lot of the groundwork in its work attempting to develop automated driving for vehicles.
“Think about it. We’re just moving from wheels to our legs,” explained one of the company’s engineers. “So some of the components are pretty similar […] It’s exactly the same occupancy network. Now we’ll talk a little bit more details later with Autopilot team […] The only thing that changed really is the training data.”
It was a recurring theme throughout the presentation, with various presenters from Tesla (the company trotted out many, as is maybe to be expected for an event billed primarily as a recruiting exercise) bringing up how closely tied the two realms of research and development actually are.
In truth, what Tesla showed with its robot on stage at the event was a very brief demo that barely matched and definitely didn’t exceed a large number of humanoid robot demonstrations from other companies over the years, including most famously Boston Dynamics. And the linkage between FSD and Optimus is a tenuous one, at best.
The domain expertise, while reduced to a simple translation by Tesla’s presentation, is actually quite a complex one. Bipedal robots navigating pedestrian routes is a very different beast from autonomous vehicle routes, and oversimplifying the connection does a disservice to the immense existing body of research and development work on the subject.
Tesla’s presenters consistently transitioned relatively seamlessly between Optimus and its vehicles’ autonomous navigation capabilities. One of the key presenters for Optimus was Milan Kovac, the company’s director of Autopilot Software Engineering, who handed off to fellow Autopilot director Ashok Elluswamy to dive further into Tesla vehicular Autopilot concerns.
It’s very clear that Tesla believes this is a linked challenge that will result in efficiencies the market will appreciate as it pursues both problems. The reality is that there remains a lot of convincing to do to actually articulate that the linkages are more than surface-deep.
Not to mention, Autopilot (and more specifically, FSD) faces its own challenges in terms of public and regulatory skepticism and scrutiny. A robot you live with daily in close proximity doesn’t need that kind of potential risk.
Tesla may have turned its man-in-a-suite into a real robot with actual actuators and processors, but it still has a ways to go to make good on the promise that it’s a viable product with a sub-$20,000 price tag any of us will ever be able to purchase.
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