A rare glimpse into the sweeping — and potentially troubling — cloud kitchens trend

Posted: 28 Jun 2019 08:06 PM PDT

Independent restaurant owners may be doomed, and perhaps grocery stores, too.

Such is the conclusion of a growing chorus of observers who’ve been closely watching a new and powerful trend gain strength: that of cloud kitchens, or fully equipped shared spaces for restaurant owners, most of them quick-serve operations.

While viewed peripherally as an interesting and, for some companies, lucrative development, the movement may well transform our lives in ways that enrich a small set of companies while zapping jobs and otherwise taking a toll on our neighborhoods. Renowned VC Michael Moritz of Sequoia Capital seemed to warn about this very thing in a Financial Times column that appeared last month, titled “The cloud kitchen brews a storm for local restaurants.”

Moritz begins by pointing to the runaway success of Deliveroo, the London-based delivery service that relies on low-paid, self-employed delivery riders who deliver local restaurant food to customers — including from shared kitchens that Deliveroo itself operates, including in London and Paris.

He believes that Amazon’s recent investment in the company “might just foreshadow the day when the company, once just known as the world's largest bookseller, also becomes the world's largest restaurant company.”

That’s bad news for people who run restaurants, he adds, writing, “For now the investment looks like a simple endorsement of Deliveroo. But proprietors of small, independent restaurants should tighten their apron strings. Amazon is now one step away from becoming a multi-brand restaurant company — and that could mean doomsday for many dining haunts.”

The good news . . . and the bad

He’s not exaggerating. While shared kitchens have so far been optimistically received as a potential pathway for food entrepreneurs to launch and grow their businesses — particularly as more people turn to take out —  there are many downsides  that may well outweigh the good, or certainly counteract it.

Last year, for example, UBS wrote a note to its clients titled “Is the kitchen dead?” wherein it suggested the rise of food delivery apps like Deliveroo and Uber Eats could well prove ruinous for home cooks, as well as restaurants and supermarkets.

The economics of food delivery have grown too alluring, suggested the bank. It’s already inexpensive because of cheap labor — and that will cost center will disappear entirely if delivery drones take flight. Meanwhile, food will become cheaper to make because of central kitchens, the kind that Deliveroo is opening and Uber is reportedly venturing into. (In March, Bloomberg reported that Uber is testing out a program in Paris where it’s renting out fully equipped, commercial-grade kitchens to serve businesses that selling food on delivery apps like Uber Eats.)

The favorable case for cloud kitchens argues that restaurants renting from them pay less than they would for their own real estate. But the reality is also that most of the businesses moving into them right now aren’t small restaurateurs but fast-food brands that already have a following and aren’t particular known for emphasis on food quality but instead for quickly churning out affordable food.

As Eric Greenspan, a chef who has appeared regularly on the Food Network and opened and closed numerous restaurants, says in a new independent documentary about cloud kitchens: “Delivery is the fastest growing market in restaurants. What started out as 10 percent of your sales is now 30 percent of your sales, and [the industry predicts] it will be 50 to 60 percent of a quick-serve restaurant’s sales within the next three to five years. So you take that, plus the fact that quick-serve brands are kind of the key to getting a fat payout at the end of the day . . .”

Greenspan continues on to explain that during an age when fewer people frequent restaurants, running one simply makes less and less sense. “[Opening] up a brick-and-mortar restaurant these days is just like giving yourself a job. Now [with centralized kitchens], as long as the product is coming out strong, I don’t need to be there as a presence. I can quality control remotely now. I can go online and [sign out of a marketplace like Postmates or UberEats or Deliveroo] and not piss off any customers, because if I just decided to close the restaurant one day, and you drove over and it was closed, you’d be pissed. But if you’re looking for [one of my restaurants] in Uber Eats and you can’t find it because I turned it off, well, you’re not pissed. You just order something else.”

Big players only need apply . . .

The model works for now for Greenspan, who is running numerous restaurant concepts from one cloud kitchen in L.A. As it happens, that facility belongs in part to Uber cofounder Travis Kalanick, who was quicker than some to grok the opportunity that shared kitchens present.

In fact, it was early last year that he announced he was investing $150 million in a startup called City Storage Systems that focused on repurposing distressed real estate assets and turning them into spaces for new industries, like food delivery.

That company owns CloudKitchens, which invites food chains, as well as independent restaurant and food truck owners, to lease space in one of its facilities for a monthly fee, charging additional fees for data analytics that it says are meant to help the entrepreneurs boost their sales.

The pitch to restaurateurs is that CloudKitchens can increase their sales while reducing their overhead. But the company is also amassing all kinds of data about its tenants and their customer preferences in the process — data that could presumably benefit CloudKitchens in various ways. Little wonder that Amazon wanted entrée into the industry, or that these competing outfits have at least one serious competitor in China — Panda Selected — that raised $50 million led by Tiger Global Management earlier this year.

No one can fault savvy entrepreneurs for seizing on what looks like a gigantic business opportunity. Still, the kitchens, which make all the sense in the world from an investment standpoint, should not be embraced so readily by everyone else as a panacea.

Ripple effects . . .

One of the biggest area of concern is that in order to work, central kitchens rely on the same people who drive Ubers and handle food deliveries — people who aren’t afforded health benefits and whose financial picture is precarious as a result. (As with Uber drivers, Deliveroo employees tried to gain status as “workers” last year with better pay, but they were denied them. The EU Parliament more recently passed new rules to protect so-called gig economy workers, though they don’t go far. Meanwhile, in the U.S, Uber and Lyft continue to fight legislation that would give employee status to contract workers.)

Matt Newberg, a founder and foodie from New York, says he could see the writing on the wall when he recently toured CloudKitchen’s two L.A. facilities along with the shared kitchens of two other companies: Kitchen United which last fall raised $10 million from GV, and and Fulton Kitchens, which offers commercial kitchens for rent on an annual basis.

Newberg filmed what he saw (which you can watch below) and suggests that he was taken aback by the conditions of the first facility that CloudKitchens opened and operates in South L.A.

Though most restaurant kitchens are chaotic scenes, Newberg said that as “someone who loves food and sustainability” the facility didn’t feel “very humane” to him when he walked through it. It’s windowless for one thing (it’s a warehouse). Newberg also says it was filled with people who appeared to him to be low-wage workers. Not last, he says he also counted 27 kitchens packed into what are “maybe 250-square-feet to 300 square-foot spaces,” and a lot of people who appeared to be in panic mode.

“Imagine lots of screaming, lots of sirens triggered when an order gets backed up, tablets everywhere.”

Adds Newberg, “When i walked in, I was like, holy shit, no one even knows this exists in L.A. It felt like Ground Zero. It felt like a military base. I mean, it seemed genius, but also crazy.”

Newberg says CloudKitchen’s second, newer location is far nicer, as are the facilities of Kitchen United and Fulton Kitchens. “That [second CloudKitchen warehouse] felt like a WeWork for kitchens. Super sleek. It was as quiet as a server farm. There were still no windows, but the kitchens are nicer and bigger.”

Growing pains . . .

Every startup has growing pains, and presumably, shared kitchen companies are not immune to these. Still, Moritz, the venture capitalist, warns that most restaurateurs should remain wary of them. Writing in the FT, he says that in the early 2000s, his firm, Sequoia, invested in a chain of kebab restaurants called Faasos that planned to delivery meals to customers’ homes but was getting crushed by high rents and turnover among other things.

To save itself, it opened a centralized kitchen to sell kebobs. Now, he writes, Fassos produces a wide variety of foods, including other Indian specialities but also Chinese and Italian dishes under separate brand names.

It’s the same playbook that Eric Greenspan is using, telling Food & Wine magazine last year that his goal was to have six delivery-only concepts running simultaneously, with two menus each for breakfast, lunch, and dinner.

Greenberg, who is obviously media savvy, can probably pull it off, as has Fassos. But for restaurants that are not known franchises or have the star appeal of celebrity chef, the future might not look so bright.

Writes Moritz: “In some markets there is still an opportunity for hardened restaurant and kitchen operators — particularly if they are gifted in the use of social media to build a following and refashion themselves. But they need to move quickly before it becomes too expensive to compete with the larger, faster-moving companies. The mere prospect of Amazon using cloud kitchens to provide cuisine catering to every taste — and delivering these meals through services such as Deliveroo — should be enough to give any restaurateur heartburn.”

It should also worry people who care about their neighborhoods.

Cloud kitchens may make it faster and cheaper than ever to order take-out. But there will be consequences, some of which most of us have yet to imagine.

Google finance head joins Postmates board ahead of anticipated IPO

Posted: 28 Jun 2019 05:49 PM PDT

Google’s vice president of finance, has joined Postmates’ board of directors, the latest sign that the on-demand food delivery startup is prepping to take the company public.

Postmates announced Friday that Kristin Reinke, vice president of Finance at Google, will join the San Francisco startup as an independent director.

Reinke has been with Google since 2005. Prior to Google, Reinke was at Oracle for eight years. Reinke also serves on the Federal Reserve Bank of San Francisco's Economic Advisory Council.

Her skill set will come in handy as Postmates creeps towards an IPO.

Earlier this year, the company lined up a $100 million pre-IPO financing that valued the business at $1.85 billion. Postmates is backed by Tiger Global, BlackRock, Spark Capital, Uncork Capital, Founders Fund, Slow Ventures and others. Spark Capital’s Nabeel Hyatt tweeted the news earlier Friday.

"Postmates has established itself as the market leader with a focus on innovation and route efficiency in the fast‐growing on‐demand delivery sector. Given their strong execution, accelerating growth, and financial discipline, they are well positioned for continued market growth across the U.S.," said Reinke. "I'm thrilled to join the board."

The startup has been beefing up its executive quiver, most recently hiring Apple veteran and author Ken Kocienda as a principal software engineer at Postmates X, the team building the food delivery company's semi-autonomous sidewalk rover, Serve.

Kocienda, author of "Creative Selection: Inside Apple's  Design Process During the Golden Age of Steve Jobs," spent 15 years at Apple focused on human interface design, collaborating with engineers to develop the first iPhone, iPad and Apple Watch.

SpaceX aims to provide commercial Starship launches by 2021

Posted: 28 Jun 2019 05:40 PM PDT

SpaceX is only getting started launching Falcon Heavy commercial missions, but it already has its eyes on the next prize – launching Starship. Now, we know that it’s hoping to start commercial service for this next-generation, fully reusable rocket by 2021, according to SpaceX Vice President of Commercial Sales Jonathan Hofeller.

Hofeller was speaking at a conference in Indonesia (via SpaceNews), and noted that the private space launch company is currently talking to three different telecom companies about selecting which will be the first mission aboard the new spacecraft. Starship, formerly knowns as ‘BFR’ or ‘Big Falcon Rocket’) is currently in development at two separate SpaceX facilities, one in Texas and one in Florida, in what amounts to an internal company ‘bake-off’ to see which team can delivery the better solution faster. An engineering show-down of this kind is not uncommon among tech companies, and often produces results from both efforts that complement or enhance whatever the final product ends up being, rather than being a ‘winner take all’ scenario.

Starship, once complete, will include a launch system propelled to orbit by a ‘Super Heavy’ booster, with even more lift capacity than the existing Falcon Heavy rocket. It’ll be able to delivery as many as 20 metric tons to geostationary transfer orbit, or over 100 tons to low-Earth orbit. It’s also intended to be the spacecraft that enables SpaceX to achieve its goal of running crewed missions to Mars.

Previously stated target dates for Starship milestones include achieving orbital launches by 2020, though based on this new info those will be test or demonstration missions rather than for paying customers. SpaceX CEO Elon Musk also previously said that the company is looking at 2023 as the earliest target date for providing a Moon circuit space trip to his first paying tourist customer, Japanese entrepreneur Yusaku Maezawa.

Theranos founder Elizabeth Holmes to stand trial in 2020

Posted: 28 Jun 2019 03:18 PM PDT

Elizabeth Holmes, the founder of the now-defunct biotech unicorn Theranos, will face trial in federal court next summer with penalties of up to 20 years in prison and millions of dollars in fines.

Jury selection will begin July 28, 2020, according to U.S. District Judge Edward J. Davila, who announced the trial will commence in August 2020 in a San Jose federal court Friday morning.

Holmes and former Theranos president Ramesh "Sunny" Balwani were indicted by a grand jury last June with 11 criminal charges in total. Two of those charges were conspiracy to commit wire fraud (against investors, and against doctors and patients). The remaining nine are actual wire fraud, with amounts ranging from the cost of a lab test to $100 million.

According to Bloomberg, Holmes’ legal team plans to argue that The Wall Street Journal’s John Carreyrou "had an undue influence on federal regulators," and "went beyond reporting the Theranos story."

"The jury should be aware that an outside actor, eager to break a story, and portray the story as a work of investigative journalism, was exerting influence on the regulatory process in a way that appears to have warped the agencies' focus on the company and possibly biased the agencies' findings against it," her attorneys wrote, per Bloomberg. "The agencies' interactions with Carreyrou thus go to the heart of the government's case."

Theranos, founded in 2003 by then 19-year-old Stanford dropout Holmes, raised more than $700 million from private market investors in what’s been referred to by the Securities and Exchange Commission as an "elaborate, years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial performance."

Theranos first came under scrutiny in October 2015, when Carreyrou published his first of many investigative pieces questioning the efficacy of Theranos’ blood-testing technology. At the time, Theranos was one of the most buzzworthy companies in Silicon Valley, boasting a valuation of $9 billion and the support of high-profile investors like Tim Draper and Robert Murdoch.

Theranos, as a result of Carreyrou’s reporting, was discovered to be a threat to public health. Its technology, as it turns out, was a long way from processing an expansive range of laboratory tests from just a few drops of blood.

According to The Wall Street Journal, federal prosecutors have collected more than 2 million pages of evidence for the defense teams. Holmes, despite ample evidence, has maintained her innocence since the grand jury indictment last year.

Following criminal charges, Holmes stepped down from Theranos last year; shortly after, the company ceased operations. Carreyrou, for his part, released a best-selling book, ‘Bad Blood,’ documenting Theranos’ secrets and lies. A documentary chronicling Holmes' and Theranos’ rapid rise and fall was released by HBO in 2019. A Hollywood production starring Jennifer Lawrence as Elizabeth Holmes is reportedly in the works.

Check out the breakout sessions at TC Sessions: Mobility

Posted: 28 Jun 2019 03:03 PM PDT

TC Sessions: Mobility on July 10 in San Jose is fast approaching. Get ready for a superb lineup of speakers like Dmitri Dolgov (Waymo), Eric Allison (Uber) and Summer Craze Fowler (Argo AI). See the full agenda here.

In addition to the outstanding main stage content, TechCrunch is proud to partner with today’s leading mobility players for a full day of breakout sessions. These breakout sessions will give attendees deeper insights into overcoming some of mobility’s biggest challenges and answering questions directly from today’s industry leaders.

Breakout Session Lineup

How much data is needed to make Autonomous Driving a Reality?
Presented by: Scale AI

We are in the early days of autonomous vehicles, and what's necessary to go into production is still very much undecided. Simply to prove that these vehicles are safer than driving with humans will require more than 1 billion miles driven. Data is a key ingredient for any AI problem, and autonomy is the mother of all AI problems. How much data is really needed to make autonomy safe, reliable, and widespread, and how will our understanding of data change as that becomes a closer reality? Sponsored by Scale AI.

Think Big by Starting Small: Micromobility Implications to the Future of Mobility

Presented by: Deloitte

A host of new micromobility services have emerged to address a broader range of transportation needs – bikesharing, electric scooters and beyond. The urban emergence of micromobility offers powerful lessons on finding the right balance between fostering innovations that will ultimately benefit consumers and broader transportation systems, while safeguarding public interests. Sponsored by Deloitte.

If You Build It, Will They Buy? – The Role of the FleetTech Partner in the Future Mobility Ecosystem with Brendan P. Keegan
Presented by: Merchants Fleet

The future will bring a convergence of new technologies, services, and connectivity to the mobility space – but who will manage and connect it all? Explore how FleetTech is creating the mobility ecosystem to help organizations embrace technologies – adopting your innovations through trials and pilots and bringing them to market. Sponsored by Merchants Fleet.

The Economics of Going Electric: Constructing NextGen EV Business Models
Presented by: ABB

How do we make the rapidly growing EV industry operational and scalable? Join ABB, HPE and Microsoft for a discussion on how government, industry, providers and suppliers are addressing market shifts and identifying solutions to build successful business models that support the future of mobility. Moderated and sponsored by ABB.

Bringing Efficiency to Closed-Course AV Testing with Atul Acharya
Presented by: AAA Northern California, Nevada & Utah

Looking to jump-start or accelerate your automated vehicle test operations? AAA has built its expertise by operating GoMentum Stations and performing safety assessments on multiple AVs and proving grounds. Join AAA as it shares its collective technical and operational learnings and testing results that will bring efficiency to your testing efforts. Sponsored by AAA Northern California, Nevada & Utah.

Friction-Free Urban Mobility
Presented by: Arrive

What does the future of seamless, urban mobility look like? How do mobility-as-a-service providers and connected vehicles work together to power transportation in a smart city? And which platform will aggregate all of the providers? In what promises to be a thought-provoking discussion, Arrive's COO Dan Roarty will lay the foundation for what a city's connected future will look like and outline key steps needed to achieve it. Sponsored by Arrive.

Michigan's Mobility Ecosystem
Presented by: PlanetM

Revolutionary things can happen when some of the brightest minds in technology come together in one room. This Breakout Session will offer key insights into Michigan's mobility ecosystem: the people, places and resources dedicated to the evolution of transportation mobility. Following a brief discussion, attendees will have the opportunity to connect with the people and companies moving the world forward through technology innovation and collaboration. Sponsored by PlanetM.

We hope to see you at TC Sessions: Mobility on July 10. Tickets are still on sale but selling fast. Book your $395 general admission ticket here. Students, grab a $45 here.

Facebook SDK bug crashed apps like Timehop

Posted: 28 Jun 2019 01:33 PM PDT

A malfunction in Facebook’s Software Development Kit that lets apps add Login With Facebook, sharing, and other features caused apps that integrate it like Timehop to repeatedly crash for about three hours. TechCrunch received a tip that developers were getting tons of user complaints and crash reports starting around noon pacific today due to a problem with the Facebook for iOS SDK. TechCrunch’s testing verified that products like Timehop, Joytunes’ Simply Piano, Momento GIFs, and more kept breaking when users access Facebook features or in some cases just opened the app.

This is a big issue for Facebook because it relies on these apps to drive user lock-in. If people use Facebook to log into or share from other apps, they’re less likely to delete their account. But if the Facebook developer platform screws up like this morning, developers could instead highlight sharing via Twitter or SMS, and divert ad buys to other platforms. Most problematically, the bug could push developers to other login platforms like Google’s or Apple’s new Sign In With Apple.

[Update: 3:45pm PT: Facebook has fixed the bug and apps integrated with the SDK are starting to work normally again. A Facebook spokesperson tells me “We started to work on the issue as soon as it was reported to us, and it has been resolved.” Facebook engineer Ram Sharma posted that “Our engineering team worked to resolve this issue as soon as it was discovered. It is now mitigated and app function should be restored.” Developers confirm the bug has been fixed. The rest of this article remains as originally published.]

Facebook SDK Bug

The bug was initially submitted to Facebook’s developer forums by Ryan Layne. These crashes thwart normal usage of other apps, costing their developers ad views and in-app purchases, or leading their users to uninstall or abandon them.

Timehop Facebook SDK Crash

Hitting the Connect Facebook button on Timehop causes the app to crash. Developers in Facebook’s bug reporting forum pile on saying their apps are breaking

The situation highlights the increasing centralization of the web as more and more companies depend on a small number of mobile, hosting, and social platforms. Earlier this month, a Google Cloud outage knocked down Snapchat and Discord. While these tools make it simpler to start a company or launch an app without having to build everything in-house, they introduce platform risk. Beyond technical outages, there’s also the concern that a platform could use its insights to copy its clients, or block them if they compete with the gatekeeper too vigorously as Facebook has done to chat and social media apps in the past.

Happy weekend, Slack is down for real this time

Posted: 28 Jun 2019 01:26 PM PDT

It’s not just you.

After a minor hiccup this morning, Slack is down again — and this time it’s really for real. This morning, the popular workplace chat service experienced issues resulting in double posting. This time out, however, this appear to be more severe, with the company’s Status page moving from 9/10 to 10/10 service problems.

This afternoon’s outage appears to be an escalation of this morning’s issues. The company has been updating throughout the day, and in spite of a hopeful “some signs of recovery” around 2PM ET, things have clearly gone from better to worse in the past couple of afternoon hours.

The company has confirmed the on-going issue via social media Muppet GIFs and its status page, writing, “Some users have reported intermittent connectivity issues. We remain hard at work to come to a full resolution.”

But this late on a Friday, honestly, it’s probably time we all go ahead and cut our losses. Happy forced summer Fridays, everyone. See you on the other side. We’ll update when things are back to normal. Or maybe not. I mean, it’s pretty nice outside. Don’t tell our bosses and we won’t tell yours. Deal?

Tesla’s in-dash sketchpad gets a boost in next update, music tools coming later

Posted: 28 Jun 2019 12:34 PM PDT

Tesla owners will be better able to express themselves artistically using their in-vehicle infotainment touchscreen with the next update of their vehicle’s in-car software. Tesla revealed via Twitter today that the forthcoming software update will bring improved Sketchpad features, providing essential upgrades to an Easter Egg it first debuted over two years ago that lets Tesla owners doodle in their cars.

In response to a request from a fan asking for Tesla’s in-car drawing software (this is a weird phrase to be writing) to add a color picker, saturation controls and an undo history, Tesla noted that new features are coming in the next big update planned for Tesla vehicle software. It sounds like all of those could be on the menu, based on this tweet, and that might not be the end of the improvements in store.

In May, Tesla CEO Elon Musk responded to another Twitter fan who was requesting animation support. Musk replied just a simple ‘Ok’ but given his general meme love, I would not at all be surprised if the next version of Sketchpad supports GIF output.

Musk also noted at around the same time that “Every Tesla should have good art & music creation software” which does not actually seem like an essential accoutrement for a vehicle at all, but then again Musk is a billionaire and I am not.

The CEO also followed up with some more details on what he has in mind for music curation: A ‘little music tool’ to be released later, and even in-car karaoke.

Apple tries out the ‘choose-your-own adventure’ Twitter thread format that recently went viral

Posted: 28 Jun 2019 11:52 AM PDT

It looks like choose-your-own-adventure Twitter games won’t be a one-hit wonder, now that Apple’s social team has adopted the format. A new tweet from the @AppleTV Twitter account today helps users find a movie to watch by having them click through a series of Twitter threads. However, their effort (so far at least) pales compared with the original viral sensation — a Twitter choose-your-own-adventure style game that blew up earlier this month, where Twitter users try to not get fired as Beyoncé’s new assistant.

If you haven’t seen this masterpiece of Twitter handiwork, give yourself a break this Friday and go try it. It’s great fun.

The game is played by presenting you with a multiple choice question. You then click on your answer from among the Twitter replies presented by the original poster.

For example, you start your day by ordering Queen Bey her breakfast. You’re asked to choose between ordering a five-star breakfast or granola and yogurt. If you choose the former (spoiler alert!), you’re fired. If you click the right answer, you move on to the next task.

Further questions take you to new threads where you choose things like who Beyoncé should FaceTime, what activity you suggest while she waits for hair and makeup, what song to play for her when she asks for music, when she should get dressed for the event and where, whether you should photobomb her on the red carpet to fix her dress, where she sits at an event, and so on.

The game isn’t always simple A/B choices, either. The answers lead you down different paths. Your choice may not immediately result in being fired, but still could later on. For instance, if you send Beyoncé swimming, there’s no way to save your job when the next set of choices comes.

According to a TIME profile, the idea for the thread came from 19-year-old student Landon Rivera, who lives in L.A.

The thread, now which now has over a quarter million Twitter likes, was noticed by celebs like Chrissy Teigen and Questlove, the report also noted.

After the Beyoncé game blew up into a viral hit, the creator started new threads about being Cardi B’s bodyguard and getting away with murder. These haven’t yet taken off to the extent the original Beyoncé thread did, which today stands at over 250K Likes on the thread placeholder tweet, and 97,300 retweets.

While it’s interesting that Apple’s social media team has now copycatted the idea, their choose-your-own-adventure thread falls short.

Actually, really short.

In fact, it’s not much of an adventure at all.

Instead, the movie suggestion thread doesn’t go much further than letting your pick between two movie watching scenarios, then directs you into a genre of your choosing…then, it dead ends with a movie suggestion.

This overlooks the reasons the Beyoncé game went viral in the first place: because it was lengthy, complex, multi-branched, and funny. You could get down several threads deep into the thing and then get booted out and lose.

The questions themselves also prompted commentary from those who knew Beyoncé actual habits (or at least, thought they did.)

Social media teams looking to replicate this formula for their own success will need to do more than create a handful of quick-to-end threads with little payoff. Either invest the serious effort in designing a clever branching narrative or just tweet as usual.




Apple is reportedly moving Mac Pro assembly to China

Posted: 28 Jun 2019 11:51 AM PDT

Back in 2013, Apple announced that it would it would be assembling its high-end desktop in the U.S. After manufacturing had mostly moved out the country, the company made a point of touting its use of its Texas plant to help produce the Mac Pro.

When the long-awaited followup was announced earlier this month at WWDC, many wondered whether the company would return to Austin. Apple didn't comment on its plans at the time, but a new report from The Wall Street Journal claims that the desktop will be produced by Quanta Computer Inc. in a plant outside of Shanghai.

Apple hasn't denied the report, which comes courtesy of "people familiar with its plans." Asked for comment, a spokesperson for the company highlights the other parts of the production process,

"Like all of our products, the new Mac Pro is designed and engineered in California and includes components from several countries including the United States," the statement reads. "We're proud to support manufacturing facilities in 30 US states and last year we spent $60 billion with over 9,000 suppliers across the US. Our investment and innovation supports 2 million American jobs. Final assembly is only one part of the manufacturing process."

The report comes at a particularly sensitive time for U.S./China relations, as a trade war has been stoked, in particular, by Trump. Apple has long been aware of the potential impact of tariffs on components and international sales. Last year, CEO Tim Cook noted that he had met with the President, telling him that tariffs were "the wrong move."

How startups can make influencer marketing work on a budget

Posted: 28 Jun 2019 11:40 AM PDT

Influencer Marketing has ballooned into a $25 billion industry, yet many marketing managers are left confused by this, because for them, it's really not delivering the results to justify the hype.

Here's the thing. Influencer marketing is not a one-size-fits-all marketing strategy such as Facebook or Adwords advertising. Each company needs to take a closer look at what influencer marketing can achieve, where it falls down, and how you can do a better job with this latest form of marketing that delivers, on average, $6.50 of value for every $1 spent.

The analysis below relies on clients and case studies from our experience at OpenSponsorship.com (my company) which is the largest marketplace connecting brands with over 5500 professional athletes for marketing campaigns.

With over 3500 deals to date across clients as big as Vitamin Shoppe and Anheuser Busch, established players like Jabra and Project Repat, and new startups like Brazyn and Gutzy, we have seen a lot go wrong (who knew you could disable comments on a post!) and a lot go right (an unknown skiier's $100 Instagram, posted right before the Winter Olympics, going viral after he won the Silver)!!

Thanks to our in-house data experts, integrations with IBM Watson, robust ROI tracking tools and 10 years+ of experience combining the learnings of sports sponsorship with influencer marketing, we have gained extensive insights into campaign strategies.

We will share our learnings about what criteria to consider when choosing the best influencer to work with, figuring out how much to pay the influencer, what rights to ask for in the deal, what terms and conditions are reasonable and how to track ROI for the deal.

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Table of Contents

Who is the right influencer? 

At OpenSponsorship, we match brands with athletes for marketing campaigns, with a view to further expand into other areas of media and entertainment such as music artists, comedians, actors. Even within the athlete world, there is the concept of micro-influencers such as yogis, triathletes, marathon runners, all the way to macro-influencers such as NFL Quarterbacks, starting NBA point guards and everything in between.

Our 3 recommendations for picking the right influencers are:

Shuttl is winning over office workers in India with safer bus commute option

Posted: 28 Jun 2019 10:47 AM PDT

Miles away from the fancy parts of Gurgaon, where a cohort of Uber and Ola cars race all day to dot the surrounding, hundreds of people are working on a different solution to contribute to India's push for improved mobility.

When Uber entered India six years ago, and its local rival Ola began to expand in the nation, many thought the two cab services will be able to meet the needs of most Indians. To be sure, the heavily discounted cab rides in the early days meant that the two companies were able to quickly scale their businesses to dozens of cities and were clocking about three million rides a day.

But in the years since, it has become clear that Ola and Uber alone can't serve the masses — a significant portion of which lacks the means to book a cab ride — or magically circumvent through India’s alarmingly congested roads. This has resulted in the emergence of a growing number of electric bike makers such as Yulu — which partnered with Uber last month, Vogo — which is backed by Ola,  Bounce, and Ather Energy that are both showing promising growth and attracting big bucks from investors.

For four years, another startup has been quietly working on expanding its platform. But unlike the bike startups and cab aggressors, it is betting on buses. Shuttl operates over 1,300 buses in more than 300 routes in five cities of India. The platform serves more than 65,000 customers each day.

Shuttl, too, hasn't had much difficulty in attracting capital. It has raised about $48.5 million to date. TechCrunch recently learned that the startup was in talks with investors to raise an additional $50 million. Amit Singh, cofounder and CEO of Shuttl, declined to comment on the upcoming funding round. But he sat with us to explain his business and the challenges it comes with.

Tesla vehicle fire in Shanghai caused by single battery module

Posted: 28 Jun 2019 10:39 AM PDT

The Tesla Model S vehicle fire that occurred in Shanghai this past April, prompting international media attention, was caused by a single battery module and is not a system defect, the company said Friday.

Tesla provided the update on the cause of the fire in a post Friday on its Weibo social media account. A team of investigators analyzed the battery, vehicle history, software and manufacturing data. The fire was caused by a single battery module at the front of the vehicle, Tesla said.

The company has issued a software update that will change battery charge and thermal management settings in Model S sedans and Model X SUVs.

This software update was first announced in May following the company’s investigation into another Model S fire in Hong Kong. In that incident, a Tesla Model S caught fire March 14 while parked near a Hong Kong shopping mall. The vehicle was sitting for about a half an hour before it burst into flames. Three explosions were seen on CCTV footage.

Tesla said, at the time, that the software update was being done out of "an abundance of caution." The update is supposed to "protect the battery and improve its longevity." The over-the-air software update will not be made to Model 3 vehicles.

The company added that while the probability of a Tesla electric vehicle fire is lower than a gasoline-powered vehicle, it takes any incident seriously.

Two other companies, Chinese automotive startup Nio and Audi, have issued recalls to due to risk of battery fire. In Audi’s case, there hasn’t been any reported fires. But the company went ahead and issued a voluntary recall in the U.S. for the E-Tron SUV after it found that moisture can seep into the battery cell through a wiring harness. There have been five cases worldwide where this has caused a battery fault warning.

Nio is grappling with a design issue in an older battery pack module. The company, which began deliveries of its ES8 SUV in June 2018, is recalling nearly 5,000 of the vehicles after a series of battery fires in China and a subsequent investigation revealed a vulnerability that created a safety risk.

A Nio-led team of experts that included the supplier of the battery pack module, investigated a reported fire involving an ES8 in Shanghai. The team concluded there was a vulnerability in the design of the battery pack that could cause a short circuit. In this case, battery packs in the vehicles involved were equipped with a module specification NEV-P50.

Vehicles with 70kWh battery packs produced after October 20, 2018 are equipped with the NEV-P102 modules and have different internal structural designs. These packs don't have the same risk, Nio said.

Daily Crunch: Jony Ive is leaving Apple

Posted: 28 Jun 2019 10:12 AM PDT

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Jony Ive is leaving Apple to launch a new firm

The man who won over decades of Apple fans with iconic product design and his pronunciation of "aluminum" is out at the company.

The executive will begin transitioning away from Apple at the end of 2019, launching a new project titled LoveFrom next year. In a press release, Apple noted that it will remain a client of his new design firm.

2. Amazon launches Counter in-store pick-up in the US, starting with 100 Rite Aid locations

The longer-term plan for Amazon is to expand the pick-up option to 1,500 stores (including non-Rite Aid partners) by the end of 2019 — a very quick ramp-up in the next six months.

3. Google Maps can now predict how crowded your bus or train will be

This is a new prediction technique Google has been perfecting for over half a year. Starting in October, the company began to ask Google Maps users who traveled between 6am to 10am for details about their journey.

4. Apple's Sidecar just really gets me, you know?

Darrell has been trying out Sidecar, the feature that lets you use an iPad as an external display for your Mac — and he says it’s just about everything you could ask for.

5. Niantic is throwing a Harry Potter: Wizards Unite fan festival this summer

Niantic has been doing in-person "anomaly" events around the world for their first title, Ingress, for years, and the company has also held dozens of real-world events for Pokémon GO.

6. My six months with $30/month email service Superhuman

A $30-per-month email service capturing the adoration of investors and founders in Silicon Valley is perhaps an unsurprising story in a subscription-obsessed landscape, yet we're only now hearing how stealth-y startup Superhuman has captured major funding.

7. The rise of the new crypto ‘mafias’

Drawing on the idea of the “PayPal mafia,” this article examines the formation and flow of talent within the crypto landscape today. (Extra Crunch membership required.)

Twitch will join Amazon Prime Day with giveaways, events and QVC-style live show

Posted: 28 Jun 2019 09:13 AM PDT

Amazon -owned game streaming site Twitch will be participating in Amazon Prime Day this year, with giveaways of free content from Apex Legends and EA Sports games, live-streamed events, and even a live-streamed shopping show.

The latter was reported this morning by AdWeek, which accidentally detailed the streaming site’s plans for a 2-day live shopping show on its Twitch Presents channel. Twitch officially shared the news at 10 AM PT.

Twitch’s plan is to loop in some of the gaming site’s favorite streamers to Amazon’s big shopping holiday.

The show, titled "Twitch Sells Out," will feature a curated selection of Prime Day deals with a focus on those of interest to the gaming community. The event takes place on Prime Day at 10 AM PT for 12 hours, then again on July 16 at the same 10 AM – 10 PM PT time frame.

Dozens of yet-to-be-named favorite Twitch streamers will be involved showcasing deals on things like games, gaming peripherals, electronics, and even kitchenware. They'll also show off some unseen demos and play games in between pitching the deals. Viewers will be able to buy and pre-order items from the stream itself.

Top Twitch creators (Partners and Affiliates) will also be able to co-stream with Twitch Presents during Prime Day, via the Blacksmith Extension which offers product links.

It’s worth noting Amazon has tried to make QVC-style video shopping work several times in the past.

Years ago, it briefly ran a fashion-and-beauty focused show called “Style Code Live,” that was canceled in spring 2017. It also ran live video during past Prime Day events right on Amazon.com to show off some of its brand advertisers’ best deals.

And most recently, Amazon launched a dedicated section on its site, Amazon Live, which features a live-streamed video shows brands build using a new app, Amazon Live Creator.

Given its push for more live video, it only makes sense that Twitch would get involved with Prime Day in this way, too.

Beyond Twitch’s plans for live video, the streaming site is also offering a number of giveaways and hosting live events.

ea sports

Twitch Prime, which comes with an Amazon Prime subscription, will offer members an exclusive character and weapon skins for Apex Legends, along with free content in multiple EA Sports titles. Members will have to link their Twitch Prime account to their EA Account to gain access to the in-game offers, Twitch says.

In addition, Twitch will host two events ahead of Prime Day. On July 13, Las Vegas and London will host Twitch Prime Crown Cup tournaments, featuring Apex Legends and EA Sports games. In London, Olympic gold medalist runner Sir Mo Farah, footballer Thierry Henry, and five-time X Games gold medalist street skateboarder Leticia Bufoni compete against each other in an unnamed EA Sports game.

Meanwhile, the Vegas event will feature music producer Murda Beatz, global platinum-selling DJ Dillon Francis, and others, the company says.

The 8-hour event will be live-streamed on Twitch Prime’s channel starting at 10 AM PDT.

Twitch Prime is a gaming perk with Amazon’s $119/year Prime membership. This year, it’s given away more than $2,000 in free games and content, the company says, including two dozen free games.

Unrelated to Prime Day, Twitch also announced this week the launch of subscriber-only streams for its top creators, Twitch Partners and Twitch Affiliates.

Update: 6/28/19, 10 AM PT – Updated with official details on live show from Twitch

Bumble now lets you call your matches without exchanging numbers

Posted: 28 Jun 2019 09:00 AM PDT

Bumble is giving users some new options to get to know each other inside its dating app. Today the company announced that it’s adding voice and video calls to the app.

The feature is double opt-in, meaning you won’t get a video call from some rando the second that you match with them. Instead, users will see an icon inside their chat that they can tap on to enable the features that move beyond text. Once both users get onboard, you can get to chatting without worrying about exchanging your numbers or social media profiles.

You can only get to know someone so well between photos and chat messages though that’s more than enough for some interactions.

The goal of the new features was “giving users a more real life interaction, and saving them time by getting a deeper understanding of who they’ve matched with before they decide to meet in person or share valuable contact information,” MagicLab (the newly announced parent company of Bumble, Badoo, Chappy and Lumen) CEO Andrey Andreev told TechCrunch in an email.

The ability to have a phone call or video call inside the app without exchanging numbers is a nice way to protect users from harassment. Bumble announced “Private Detector” a couple months ago which analyzes photos sent in chat and lets users know if there’s anything “explicit” in the photo so they know what they’re getting into when they open it. That feature is launching this summer.

MagicLab plans to bring voice and video calls to its other dating apps, as well.

NASA restores Apollo Mission Control to its 1969 Moon landing condition

Posted: 28 Jun 2019 08:58 AM PDT

To celebrate the 50th anniversary of the Moon landing, which is coming up on July 20, NASA has restored and re-opened the original Apollo Mission Control Center at Johnson Space Center in Houston. The restoration is a painstakingly detailed recreation, which involved years of research of archival footage and photography, and seven months of restoration work.

Everything used in the restoration, which was guided by a team that included members of the actual Apollo Mission Control team who supported the Apollo 11 astronauts, is either an original or a carefully crafted recreation. That means not only the large items like computer consoles and terminals, but also carpeting, articles of clothing, ashtrays and pens. They’ve all been put in place as close as possible to where they were during the actual mission, both in the control room proper, and in the visitor’s gallery and simulation support room adjacent to the room itself that make up the larger Control Center facility.

This restored marvel of modern history will be accessible to the public, via tours provided to visitors of Space Center Houston, and it’s safe to say it’ll be a pretty popular attraction come next month leading up to, and including the milestone anniversary of Apollo 11.

The facility was actively used to coordinate missions from Gemini, through Apollo, Skylab and Space Shuttle programs, from its initial test debut in 1965 to its last use in 1992 for Space Shuttle Discovery’s STS-53 mission.

Below, you can get a better look at some of the finer detail work done on the restoration – including a pipe, three-hole punch, and a variety of other once-mundane errata now embed with a weird historical awe-inspiring quality.

[gallery ids="1850126,1850127,1850128,1850129,1850130"]

Enterprise SaaS revenue hits $100B run rate, led by Microsoft and Salesforce

Posted: 28 Jun 2019 08:48 AM PDT

In its most recent report, Synergy Research, a company that monitors cloud marketshare, found that enterprise SaaS revenue passed the $100 billion run rate this quarter. The market was led by Microsoft and Salesforce.

It shouldn’t be a surprise at this point that these two enterprise powerhouses come in at the top. Microsoft reported $10.1 billion in Productivity and Business Processes revenue, which includes Office 365, the Dynamics line and LinkedIn, the company it bought in 2016 for $26.2 billion. That $10.1 billion accounted for the top spot with 17 percent

Salesforce was next with around 12%. It announced $3.74 billion in revenue in its most recent earnings statement with Service Cloud alone accounting for $1.02 billion in revenue, crossing that billion-dollar mark for the first time.

Adobe came in third, good for around 10% market share, with $2.74 billion in revenue for its most recent report. Digital Media, which includes Creative Cloud and Document Cloud, accounted for the vast majority of the revenue with $1.8 billion. SAP and Oracle complete the top companies

SaaS Q119

A growing market

While that number may seem low, given we are 20 years into the development of the SaaS market, it is still a significant milestone, not to be dismissed lightly. As Synergy pointed out, while the market feels mature, if finds that SaaS revenue still accounts for just 20 percent of the overall enterprise software market. There’s still a long way to go, showing as with the infrastructure side of the market, things change much more slowly than we imagine, and the market is growing rapidly, as the impressive growth rates show.

“While SaaS growth rate isn't as high as IaaS (Infrastructure as a Service) and PaaS (Platform as a Service), the SaaS market is substantially bigger and it will remain so until 2023. Synergy forecasts strong growth across all SaaS segments and all geographic regions,” the company wrote in its report.

Salesforce is the only one of the top five that was actually born in the cloud. Adobe, an early desktop software company, switched to cloud in 2013. Microsoft, of course, has been a desktop stalwart for many years before embracing the cloud over the last decade. SAP and Oracle are traditional enterprise software companies, born long before the cloud was even a concept, that began transitioning when the market began shifting.

Getting to a billion

Yet in spite of being late to the game, these numbers show that the market is still dominated by the old guard enterprise software companies and how difficult it is to achieve market dominance for companies born in the cloud. Salesforce emerged 20 years ago as an early cloud adherent, but of all of the enterprise SaaS companies that were started this century only ServiceNow and WorkDay show up in the Synergy list lumped in “the next 10.”

That’s not to say there aren’t SaaS companies making some serious money, just not quite as much as the top players to this point. Jason Lemkin, CEO and founder at SaaStr, a company that invests in and supports enterprise SaaS companies, says a lot of companies are close to that $1 billion goal than you might think, and he’s optimistic that we are going to see more.

“We will have at least 100 companies top $1 billion in ARR, probably many more. It is just math. Almost everyone IPO’ing [SaaS company] has 120-140% revenue retention. That will compound $100 million or $200 million to $1 billion. The only question is when,” he told TechCrunch.

SaaS revenue numbers by company

Chart courtesy of SaasStr

He adds that annualized numbers are very close behind ARR numbers and it won’t take long to catch up. Yet as we have seen with some of the companies on this list, it’s still not easy to get there.

It’s hard to develop a billion dollar SaaS company, and it takes time and patience, and perhaps some strategic acquisitions to get there, but the market trajectory continues to move upward. It will likely only grow stronger as more companies move to software in the cloud, and that bodes well for many of the players in this market, even those that didn’t show up on Synergy’s chart.

Quibi is getting an action-thriller series starring Liam Hemsworth

Posted: 28 Jun 2019 08:26 AM PDT

Streaming media startup Quibi, co-founded by entertainment industry heavyweight Jeffrey Katzenberg and former HP CEO Meg Whitman, is adding more star power to its launch slate. The short-form video content startup will have an action-thriller series starring Liam Hemsworth, one of the many Hemsworths (the one who was in The Hunger Games, specifically).

This series doesn’t yet have a name, but Hemsworth will start as ‘Dodge Maynard’ (Dodge is a very common name), who undertakes a very different kind of indecent proposal where apparently he ends up becoming human prey for villains who probably end up being very rich people who want nothing more than to hunt ‘the most dangerous game,’ to draw conclusions from a popular fictional trope.

There’s strong creative talent attached behind the scenes, too, including Sopranos writer Nick Santora and frequent Mad Men episodes director Phil Abraham.

Quibi, which is set for a launch in April next year, will have lots of content from a laundry list of top creators, likely owing to Katzenberg’s considerable tinsel town influence. Shows already greenling include a murder mystery comedy from SNL’s Lorne Michaels, a documentary series from Tyra Banks, a Steven Spielberg horror show, plus projects from Guillermo Del Toro, Chrissy Teigen, Idris Elba and more.

The company has already signed up $100 million in ad revenue commitments, and $1 billion in total funding. It’s unique proposition compared to the rest of the streaming originals market is to create short content specifically meant to be consumed on mobile devices on the go. Pricing at launch will range from $4.99 to $7.99 per month, depending on whether users want some ads, or a totally ad-free experience.

Smartphone users are upgrading less frequently — will 5G help?

Posted: 28 Jun 2019 08:18 AM PDT

A new study out of NPD confirms what we already know about the state of the smartphone in 2019. People just aren't upgrading as frequently. You can see the ramifications of this as companies like Apple and Google scramble to right the ship. Still, it's nice to put some numbers to the abstract trend.

The analyst firm conducted a study of 3,650 U.S, based cellphone users earlier this year and found that a quarter held onto their previous device for more than three years. That represents an 18 percent increase from two years prior. Twenty-nine percent, meanwhile, have had their current device for two or more years.

Upgrade cycles have slowed, and you can thank higher prices, fewer exciting features and, frankly, better devices for that. In that last sense, at least, smartphone manufactures have kind of painted themselves into a corner on this one. Companies were surely aware that the whole thing was going to plateau and decline eventually, though many have been seemingly caught off-guard by how quickly and severely it has happened.

5G is a bright spot, of course. NPD says ~2/3rds of consumers are aware of the technology (a number that has almost certainly increased since the second half of last year, when the number was collected), and around one-third are "interested" in purchasing such a device. Promising, but I'm also "interested" in purchasing a major league baseball team, so maybe take that bit with a grain or two of salt.

We're seeing the first few handsets trickle through from companies like Samsung, LG and Motorola, along with some spotty coverage around the U.S. Of course, that's going to have to be much more ubiquitous before the technology becomes a tangible driver of new handset adoption.

5G is certainly destined to be the next major driving feature in the category — particularly with foldables currently in a somewhat depressing state of limbo. But if company are hoping it will turn around their fortunes entirely, I've got some of Trump's 6G spectrum to sell them.