Extra Crunch roundup: Inside DoorDash’s IPO, first-person founder stories, the latest in fintech VC and more

One of my favorite series of Monty Python sketches is built around the concept of surprise:

Chapman: I didn’t expect a kind of Spanish Inquisition.

[JARRING CHORD]

[Three cardinals burst in]

Cardinal Ximénez: NOBODY expects the Spanish Inquisition!

I was reminded of this today when I needed to reschedule a few stories so we could cover DoorDash’s S-1 filing from multiple angles. First, Managing Editor Danny Crichton looked at how well the company’s co-founders and many investors stand to make out. Alex Wilhelm covered the IPO announcement in depth on TechCrunch before writing an Extra Crunch column that studied the role the COVID-19 pandemic played in the home-delivery platform’s recent growth.

Our all-hands-on-deck coverage of DoorDash’s S-1 is a good illustration of Extra Crunch’s mission: timely analysis of current and future technology trends that serves founders and investors. We have a talented team, and as today’s coverage shows, they’re just as good as they are fast.

The stories that follow are an overview of Extra Crunch from the last five days. The full articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.

Thanks very much for reading Extra Crunch this week. I hope you have a great weekend!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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What I wish I’d known about venture capital when I was a founder

Why I left edtech and got into gaming

Image Credits: Klaus Vedfelt / Getty Images

We frequently run posts by guest contributors, but two stories we published this week were written in the first person, which is a bit of a departure.

In Why I left edtech and got into gaming, Darshan Somashekar brought us inside his decision to pivot away from a sector that’s been growing hotter in 2020.

His post is a unique take on two oft-discussed categories, but it also examines one founder/investor’s thought process when it comes to evaluating new opportunities.

Andy Areitio, a partner at early-stage fund TheVentureCity, wrote What I wish I’d known about venture capital when I was a founder, a reflection on the “classic mistakes” founders tend to make when it’s time to fundraise.

“Error number one (and two) is to raise the wrong amount of money and to do it at the wrong time,” he says. “They can also put all their eggs in one basket too early. I made that mistake.”

You can find business writing that explores best practices anywhere, which is why we hunt down stories that are firmly rooted in data or personal experience (which includes success and failure).

What I wish I’d known about venture capital when I was a founder

Why I left edtech and got into gaming

How COVID-19 accelerated DoorDash’s business

Image Credits: DoorDash

The coronavirus pandemic looms large in DoorDash’s S-1 filing.

According to the food-delivery platform, “58% of all adults and 70% of millennials say that they are more likely to have restaurant food delivered than they were two years ago,” and “the COVID-19 pandemic has further accelerated these trends.”

As in other sectors, the pandemic didn’t wave a magic wand — instead, it hastened trends that were already in play: consumers love convenience, which means DoorDash’s gross order volume and revenue were tracking well before the virus started to shape our lives.

“It’s your call on how to balance the factors and decide whether or not to buy into the IPO, but this one is going to be big,” writes Alex Wilhelm in a supplemental edition of today’s The Exchange.

How COVID-19 accelerated DoorDash’s business

 

The VC and founder winners of DoorDash’s IPO

SAN FRANCISCO, CA – SEPTEMBER 05: DoorDash CEO Tony Xu speaks onstage during Day 1 of TechCrunch Disrupt SF 2018 at Moscone Center on September 5, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch)

None of us knew DoorDash would release its S-1 filing today, but Danny Crichton jumped on the story “so we can see who is raking in the returns on the country’s delivery startup champion.”

After estimating the value of the respective ownership stakes held by DoorDash’s four co-founders, he turned to the investors who participated in rounds seed through Series H.

Some growth funds are about to look very good after this IPO, and each founder is looking at hundreds of millions, he found.

But even so, their diminished haul of about $1.3 billion is “a sign of just how much dilution the co-founders took given the sheer amount of capital the company fundraised over its life.”

The VC and founder winners of DoorDash’s IPO

 

Fintech VC keeps getting later, larger and more expensive

Image Credits: Nigel Sussman (opens in a new window)

Investors sent stacks of cash to late-stage fintech companies in Q3 2020, but these sizable rounds may also point to shrinking opportunities for early-stage firms, reports Alex Wilhelm in this morning’s edition of The Exchange.

2020 could be a record year for fintech VC in Europe and North America, but are these “huge late-stage dollars” actually “a dampener for new fintech startups trying to get off the ground?”

Fintech VC keeps getting later, larger and more expensive

 

Accelerators embrace change forced by pandemic

Devin Coldewey interviewed the leaders of three startup accelerators to learn more about the adaptations they’ve made in recent months:

• David Brown, founder and CEO, Techstars
• Cyril Ebersweiler, founder HAX, venture partner at SOSV
• Daniela Fernandez, founder, Ocean Solutions Accelerator

Due to travel bans, shelter-in-place orders and other unknowns, they’ve all shifted to virtual. But accelerators are intensive programs designed to indoctrinate founders and elicit brutally honest feedback in real time.

Despite the sudden shift, that boot-camp mindset is still in effect, Devin reports.

“Cutting out the commute time in a busy city leaves founders with more time for workshops, mentor matchmaking, pitch practice and other important sessions,” said Fernandez. “Everybody just has more flexibility and tranquility.”

Said Ebersweiler: “People are for some reason more participative and have more feedback than physically — it’s pretty strange.”

Accelerators embrace change forced by pandemic

Greylock’s Asheem Chandna on ‘shifting left’ in cybersecurity and the future of enterprise startups

Image Credits: Greylock

In a recent interview with Greylock partner Asheem Chandna, Managing Editor Danny Crichton asked him about the buzz around no-code platforms and what’s happening in early-stage enterprise startups before segueing into a discussion about “shift left” security:

“Every organization today wants to bring software to market faster, but they also want to make software more secure,” said Chandna.

“There is a genuine interest today in making the software more secure, so there’s this concept of shift left — bake security into the software.”

Greylock’s Asheem Chandna on ‘shifting left’ in cybersecurity and the future of enterprise startups

 

Square and PayPal earnings bring good (and bad) news for fintech startups

Image Credits: Nigel Sussman (opens in a new window)

If you missed Wednesday’s The Exchange, Alex scoured earnings reports from PayPal and Square to see what the near future might hold for several fintech startups currently waiting in the wings.

Using Square and PayPal’s recent numbers for stock purchases, card usage and consumer payment activity as a proxy, he attempts to “see what we can learn, and to which unicorns it might apply.”

Square and PayPal earnings bring good (and bad) news for fintech startups

 

Conflicts in California’s trade secret laws on customer lists create uncertainty

Image Credits: jayk7 (opens in a new window)/ Getty Images

In California, non-competition agreements can’t be enforced and a court has ruled that customer contact lists aren’t trade secrets.

That doesn’t mean salespeople who switch jobs can start soliciting their former customers on their first day at the new gig, however.

Before you jump ship — or hire a salesperson who already has — read this overview of California’s trade secret laws.

“Even without litigation, a former employer can significantly hamper a departing salesperson’s career,” says Nick Saenz, a partner at Lewis & Llewellyn LLP, who focuses on employment and trade secret issues.

Conflicts in California’s trade secret laws on customer lists create uncertainty

As public investors reprice edtech bets, what’s ahead for the hot startup sector?

Image: Bryce Durbin / TechCrunch

News of a highly effective COVID-19 vaccine appeared to drive down prices of the three best-known publicly traded edtech companies: 2U, Chegg and Kahoot saw declines of about 20%, 10% and 9%, respectively after the report.

Are COVID-19 tailwinds dissipating, or did the market make a correction because “edtech has been categorically overhyped in recent months?”

As public investors reprice edtech bets, what’s ahead for the hot startup sector?

 

Dear Sophie: What does a Biden win for tech immigration?

Image Credits: Sophie Alcorn

What does President-elect Biden’s victory mean for U.S. immigration and immigration reform?

I’m in tech in SF and have a lot of friends who are immigrant founders, along with many international teammates at my tech company. What can we look forward to?

— Anticipation in Albany

Dear Sophie: What does Biden’s win mean for tech immigration?

 

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Demon’s Souls: The first truly next-gen game is a lopsided but impressive showcase

The next generation of gaming is here with the PlayStation 5 and Xbox Series X — except it isn’t, because there are almost no next-generation games to play on them. Demon’s Souls is the first title that can truly be called next-gen, and it shows — even though it’s a remake of a PS3 game… which also shows.

The original Demon’s Souls was an incredibly influential game. Its sequel, Dark Souls, was more popular and improved on the first quite a bit, but much of what made the now major series good had already been established. “Souls-like” is practically a genre now, though the originals are unsurprisingly still the nonpareil.

The comparative few who played Demon’s Souls were elated to hear that it was being remade, and by Bluepoint at that (who also remade the legendary Shadow of the Colossus), but worried that the game might not stand up by modern standards.

Can an old game, the essentials of which are a decade behind its descendants, be given a really, really, really, ridiculously good-looking coat of paint and still act as a blockbuster next-gen debut? Well, it kind of has to — there’s no other option! Fortunately the game really does hold up, and in fact makes for a harrowing, cinematic experience despite a few significant creaks.

I don’t want to give a full review of the game itself; let it suffice to say that, although it looks and runs much better, the core of the game is almost entirely unchanged. Any review from the last decade is still completely relevant, down to the “magic is overpowered” and “inventory burden is annoying.”

As a next-gen gaming experience, however, Demon’s Souls is as yet without comparison. It serves as a showcase not only for the PS5’s graphical prowess, but its sound design, haptics, speed, and OS.

Image Credits: Sony

First, the graphics. It’s clear that Sony and Bluepoint intended this to be a truly lavish remake, and the game’s structure — essentially five long, mostly linear levels — provides an excellent platform for breathtaking visuals carefully tuned to the user’s experience.

The environments themselves are incredibly detailed, and the various enemies you fight very well realized, but what I kept being impressed by was the lighting. Realistic lighting is something that has proven difficult even for top-tier developers, and it’s only now that the hardware has enough headroom to start doing it properly.

Demon’s Souls doesn’t use ray-tracing, the computation-heavy lighting technique perennially on the cusp of being implemented, but the real-time lighting effects are nevertheless dramatic and extremely engaging. This is a dark, dark world and the player is very limited as far as personal light sources, meaning the way you experience the environment is carefully designed.

Although the detailed armor, props, and monsters are all very nice, it’s the realistic lighting that really sets them off in a way that seems truly new and beautiful. Dynamic range is used properly, to have actually dark areas illuminated dramatically, such as the still-terrifying Tower of Latria.

Image Credits: Sony

The game isn’t a huge leap over the best the PC has to offer right now, but it does make me excited for game designers who really want to use light and shadow as gameplay elements.

(Incidentally, don’t bother with the “cinematic” option versus “performance.” The latter keeps the game silky smooth, which for Souls games is a luxury, and the other setting didn’t improve the look much if at all, while severely affecting the framerate. Skip it unless you’re taking glamour shots.)

Similarly sound is extremely well done in the game, though I’m cautious about hyping Sony’s “3D audio” — really, games have had this sort of thing for years on many platforms. Having a decent pair of headphones is the important bit. But perhaps the PS5 offers improved workflows for spatializing sound; at all events in Demon’s Souls it was very good, with great separation, location, and clarity. I have reliably dodged an enemy attack from offscreen after recognizing the characteristic grunt of an attacking foe, and the screeches and roars of dragons and boss monsters (as well as the general milieu of Latria) were suitably chilling.

Image Credits: Sony

This combined well with the improved haptics of the DualSense controller, which seemed to have a different “sensation” for every event. A dragon flying overhead, a demon stomping the ground, a blocked attack, an elevator ride. Mostly these were good and only aided immersion, but some, like the elevators, felt to me more like an annoying buzz than a rumble, like holding a power tool. I hope that developers will be sensible about these things and identify vibration patterns that are irritating. Fortunately the intensity can be adjusted universally in the PS5’s controls.

Likewise the adaptive triggers were nice but not game-changing. It was helpful when using the bow to know when the arrow was ready to release, for instance, but beyond a few things like that it was not used to great advantage.

Hands-on: Sony’s DualSense PS5 controller could be a game changer

Something that had a more immediate effect on how I played was the incredibly short load times. The Souls series has always been plagued by long load times when traveling and dying, the latter of which you can expect to do a lot. But now it’s rare that I can count to three before I’m materializing at the bonfire again.

This significantly reduces (but far from eliminates) frustration in this infamously unforgiving game, and actually makes me play it differently. Where once I could not be bothered to briefly travel to another area or the hub in order to accomplish some small task, now I know I can return to the Nexus, fuss around a bit with my loadout, and be back in Boletaria in 30 seconds flat. If I die, I’m back in action in five seconds rather than twenty, and believe me, that adds up real fast. (Load times are improved across the board in PS4 games running on the PS5 as well.)

Aiding this, kind of, is the new fancy pause screen Sony has implemented on its new console. When hitting the (annoyingly PS-shaped) PS button, a set of “cards” appears showing recent achievements and screenshots, but also ongoing missions or game progress. Pausing in Latria to take a breath, the menu offered up the ability to instantly warp to one of the other worlds, losing my souls but skipping the ordinarily requisite Nexus stop. This will certainly change how speedruns are accomplished, and provides a useful, if somewhat immersion-breaking, option for the scatterbrained player.

The pause menu also provides a venue for tips and hints, in both text and video form. Again this is a funny game to debut these in (I don’t count Astro’s Playroom, the included game/tech demo, which is fun but slight), because one of the Souls series’s distinctive features is player-generated notes and ghosts that alternatively warn and deceive new players. In another game I might have relied on the PS5’s hints more, but for this specific title they seem somewhat redundant.

As arguably the only “real” PS5 launch title, Demon’s Souls is a curious but impressive creature. It definitely shows the new console to advantage in some ways, but the game itself (while still amazing) is dated in many ways, limiting the possibilities of what can be shown off in the first place.

Certainly the remake is the best (and for many, only) way to play a classic, and for that alone it is recommended — though the $70 price (more in Europe and elsewhere) is definitely a bit of a squinter. One would hope that for the new higher asking price, we could expect next-generation gameplay as well as next-generation trimmings. Well, for now we have to take what we can get.

Review: Sony’s PlayStation 5 is here, but next-generation gaming is still on its way

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Nintendo’s Mario Game & Watch is a choice gaming stocking stuffer of 2020

Nintendo will never stop mining its past for new nostalgia-based products, but at least it tends to do so with aplomb and occasionally even generosity. The former at least is on display with the Super Mario Bros. Game & Watch, a standalone handheld that plays the first Mario game, its unbelievably hard “Lost Levels” sequel, and acts as a totally impractical timepiece.

This tiny gaming system isn’t the most practical thing in the world, but it is a charming piece of hardware that does exactly what it says on the tin.

Turn on the Game & Watch with a button on the side and you can select between, naturally, the Game and Watch modes. In game mode, you can select between playing the original Super Mario Bros. for NES, the sequel we never got in the U.S., but was eventually released as “The Lost Levels,” and a recreation of an old-school LCD game where Mario juggles balls at ever-increasing speeds.

Image Credits: Devin Coldewey / TechCrunch

The screen, while certainly small, is bright and sharp, apparently displaying the exact pixel dimensions of the original Nintendo game. It plays well, too — the controls are responsive, though it feels strange to play the game on anything other than an original NES controller. The buttons of the Game & Watch are a bit softer than I’d like — but they were good enough that I cleared the first set of levels without any real frustration other than my own lack of skill.

While there is no support for saving or rewinding the game — pretty much essential for the 99 percent of us who can’t beat it honestly — at least you don’t have to to try to beat it in one sitting. The game freezes its state when you turn if off or switch to any other game or mode, meaning you can play a couple levels between subway stops and not worry about losing progress.

Image Credits: Devin Coldewey / TechCrunch

You can hand it back and forth with a friend (after sanitizing it, of course) too, since player 2 uses the same controls.

The juggling game is a fun little diversion but, like most of those old LCD games, goes from really boring to nearly impossible in the course of about 60 seconds.

Image Credits: Devin Coldewey / TechCrunch

The “Watch” mode has a charming little landscape with the current time made out of bricks, and Mario running across the screen below stomping goombas and avoiding bullet bills. If you watch for a while he’ll moonwalk, mount a pipe, and perform other hijinks. You can switch the background from normal to hills to mushroom platforms. I wouldn’t use it as a watch but if you don’t want to pull your phone out while you’re playing, there you go.

For $50 it may seem a little steep, and perhaps it is. If this had Marios 1 through 3 on it I would consider it a bargain, especially considering the ability to come back to the game time after time — I’d work my way through the epic-length third game with pleasure.

As it is, however, it’s hard to justify the price — except, of course, as a gift to a Nintendo-loving friend or loved one. That’s why I suspect these will sell like hotcakes this holiday season. With no new Switch hardware, no N64 mini, and no must-have games on Nintendo’s platforms, it’s looking a bit dry, but a Game & Watch is just silly enough — and decent enough — a device to sate the hunger of a retro-minded gamer for a few days.

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Nintendo’s Switch dominates US console sales ahead of PlayStation/Xbox launches

Another banner month month for Nintendo hardware sales, per the latest figures from NPD. The firm puts Switch sales (including the standard and Lite models) at 735,000 units in the U.S., making the best October for a Nintendo console since the Wii sold 807,000 units in October 2008.

It’s been a good couple of years for the Switch, which has marked 23 straight months as the best-selling console in the States. In its own reporting, Nintendo adds that the company has sold more than 63 million units worldwide, to date. 2020 has been particularly strong for the company, owing to both pandemic-related stay-at-home orders and the strength of titles like Animal Crossing: New Horizons, which was a downright powerhouse.

Of course, many Microsoft and Sony devotees were no doubt holding off on purchasing new hardware, with the arrival of the Xbox Series X/S and PlayStation 5 a month out. Per NPD, Nintendo offset its competitors’ declines in the meantime. Though an end to Nintendo’s console sales dominance could very well be in the cards for November, even with the Switch bundles the company has on offer for Black Friday.

FIFA 21 was the best-selling game for the month — the first time an entry in the soccer franchise hit the number one spot in the U.S. on launch. The hybrid title, Mario Kart Live: Home Circuit, was Nintendo’s best-selling game at number five overall, though Nintendo managed to claim nine of the top 20 spots for the month.

Review: Microsoft’s Xbox Series X is ahead of its time

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Onfido’s Husayn Kassai steps back, brings in new CEO ahead of a planned IPO

There are big changes today at Onfido, the global identity verification and authentication platform which has rocketed in adoption as so many services become digitized during the pandemic. The company, which has raised more than $200 million to date, is appointing a new CEO with the intention of moving towards an IPO “at some point” in the future, according to co-founder and current CEO Husayn Kassai.

Kassai has of this week handed over the reins to Mike Tuchen, the former CEO of Talend who successfully took the compay to the NASDAQ in 2016.

Kassai says he will remain with Onfido, working “2-3 days a week” to assist Tuchen as he leads the company through the next period of growth across sectors and geographies, and towards that IPO.

Prior to Talend, a leader in cloud data integration, Tuchen led Rapid7, a security software startup, and founded a marketing analytics startup in between senior management roles at Microsoft and Polycom.

Kassai co-founded Onfido with Eamon Jubbawy and Ruhul Amin in 2012 to make digital identity verification simpler and more accurate, and it now employs over 400 people globally.

Speaking exclusively to TechCrunch Kassai said: “Its kind’ve been non-stop for 10 years. I’ve taken us from zero to one. And in order to go from ‘one to 100’, specifically an IPO and listing in large part, that’s the stage where you have to meet with consulting firms, banks etc, which has a lot of fun in it, but it’s not what I’m interested in. So I’d rather step down, still work with the company and help an experienced CEO take this forward for the next stage.”

Asked if he was stepping down for any other reason Kassai told TechCrunch: “No this is predominantly about the IPO focus, plus I have I’ve been speaking internally for a year about taking a break after this ten year period. My personal life has been on hold for this whole time. Exercise, eating well, family birthdays, everything else that goes with it. On hold. This move, in part, helps me get back some of my personal life, while the company will be in good hands.”

Asked if he would be taking the title of Chairman or Co-CEO or some other title, Kassai said that was undecided that this point.

On the joint call between Tuchen and Kassai, Tuchen said: “My first company was a security company in Boston. It’s now public on the NASDAQ. We took Talends public in 2016. So, I’ve had a lot of experience working across Europe and the US.”

Tuchen said he would be based in California, now that the whole company has moved to remote working because of the pandemic: “I don’t expect to move a lot during COVID. We are a remote-first company right now and will be for the medium term at least, and still trying to work out what our longer-term plans are, as we get – post-vaccine – back in the office. I spent a lot of time on the road before, but we’ll be figuring out how to develop that same kind of relationship with people over Zoom, with all the stuff that, you know, we’re used to doing in the regular world. So we’re kind of experimenting and figuring that out. The entire process of me joining was done over Zoom. And now the whole onboarding and getting to know the company is all being done on top, so we’re all kind of breaking new ground here in this dynamic environment.”

Tuchen said no decision had been made about where the IPO would be placed, but “most likely on one of the US exchanges.”

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Twitter labeled 300,000 US election tweets — around 0.2%

Just over a week after the U.S. elections, Twitter has offered a breakdown of some of its efforts to label misleading tweets. The site says that from October 27 to November 11, it labeled some 300,000 tweets as part of its Civic Integrity Policy. That amounts to around 0.2% of the total number of election-related tweets sent during that two-week period.

Of course, not all Twitter warnings are created equal. Only 456 of those included a warning that covered the text and limited user engagement, disabling retweets, replies and likes. That specific warning did go a ways toward limited engagement, with around three-fourths of those who encountered the tweets seeing the obscured texts (by clicking through the warning). Quote tweets for those so labeled decreased by around 29%, according to Twitter’s figures.

The president of the United States received a disproportionate number of those labels, as The New York Times notes that just over a third of Trump’s tweets between November 3 and 6 were hit with such a warning. The end of the election (insofar as the election has actually ended, I suppose) appears to have slowed the site’s response time somewhat, though Trump continues to get flagged, as he continues to devote a majority of his feed to disputing the election results confirmed by nearly every major news outlet.

His latest tweet as of this writing has been labeled disputed, but not hidden, as Trump repeats claims against voting machine maker, Dominion. “We also want to be very clear that we do not see our job as done,” Legal, Policy and Trust & Safety Lead Vijaya Gadde and Product Lead Kayvon Beykpour wrote. “Our work here continues and our teams are learning and improving how we address these challenges.”

YouTube removes ads from, but won’t pull, ‘Trump Won’ video following backlash

Twitter and other social media sites were subject to intense scrutiny following the 2016 election for the roles the platforms played in the spread of misinformation. Twitter sought to address the issue by tweaking recommendations and retweets, as well as individually labeling tweets that violate its policies.

Earlier today, YouTube defended its decision to keep controversial election-related videos, noting, “Like other companies, we’re allowing these videos because discussion of election results & the process of counting votes is allowed on YT. These videos are not being surfaced or recommended in any prominent way.”

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Facebook’s Snapchat-like ‘Vanish Mode’ feature arrives on Messenger and Instagram

Facebook today announced its new Snapchat-like feature for disappearing messaging, Vanish Mode, is arriving on Messenger and Instagram. The feature, meant for more casual conversations, allows users to set chats to automatically delete after the message is seen and the chat is closed.

In Vanish Mode, Messenger and Instagram users can send text chats, emoji, pictures, GIFs, voice messages, and stickers, which will disappear after they’ve been seen and users leave the chat, Facebook explains.

Image Credits: Facebook

However, unlike on Snapchat, Vanish Mode is not a default setting. Instead, users are meant to enable it from within an existing chat by swiping up on their mobile device’s screen while in the chat.

Upon first launch, a screen will appear explaining how Vanish Mode works. It also notes that users will be alerted if someone takes a screenshot of the conversation — as Snapchat does.

For safety purposes, Facebook supports blocking and reporting in Vanish Mode. If a user in the conversation reports a chat, the disappearing messages will be included for up to 1 hour after they disappear, the company explains. This allows Facebook to review the reported conversation and take action, if need be.

Image Credits: Facebook

Vanish Mode is also an opt in experience — meaning you can can choose whether to enter a Vanish Mode chat. And it only works with people you’re connected to, Facebook says.

Once in Vanish Mode, the screen goes dark to signal the change. To exit Vanish Mode, you tap on the “Turn Off Vanish Mode” button at the top of the screen.

Facebook’s plans for Vanish mode were announced earlier as part of its overhaul of the Instagram messaging experience in September. This update had included the ability for Instagram and Messenger users to communicate across apps, along with other “fun” features.

As a part of that update, Instagram received many Messenger-inspired additions — like the ability to change the chat color or react with any emoji, for example. But though announced, the Vanish Mode feature was then said to be coming “soon.”

Image Credits: Facebook

To be clear, Vanish Mode is not designed to cater to those looking to secure an entire conversation. Though the feature is end-to-end encrypted, Facebook already offers a fully end-to-end encrypted conversations feature, Secret Conversations. Instead, Vanish Mode’s main focus is to chip away at yet another advantage held by rival Snapchat.

That’s part for the course for Facebook these days. The company already copied the Stories format popularlized Snapchat, and now that product alone on each of its platforms is used by more people (500M+) than all of Snapchat. (249M).

To get Vanish Mode, and other recent updates to the Instagram messaging experience, users have to opt-in to the upgrade. Essentially, these new features are being used as lures to get Instagram users to agree to the upgrade.

The upgrade then locks them further inside the Facebook universe as they then also receive the ability to communicate cross-platform with users on Facebook. Eventually, WhatsApp may become a part of this cross-platform communication strategy, as well.

Once upgraded, people can use just one messaging apps to reach friends and family on two of the largest social networks in the world. And with additions like Vanish Mode, they won’t miss out on things found on competitors’ apps. Meanwhile, with Reels on Instagram, Facebook aims to retain TikTok users, too.

Facebook says Vanish Mode is launching starting today on Messenger in the U.S. Canada, Mexico, Peru and Bangladesh, and on Instagram (soon) in Canada, Argentina, Chile, Peru and a few other countries. It will soon roll out to other countries across both platforms, the company says.

 

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Gaming startup Statespace raises $29 million, tops 1.5 million MAUs

Statespace, the training platform for gamers, has today announced the close of a $29 million Series B financing led by Khosla Ventures. This comes just six months after the announcement of a $15 million Series A funding, also led by Khosla.

Founder and CEO Wayne Mackey described the funding as pre-emptive as the company experiences a growth spurt alongside the broader gaming industry. Statespace has jumped from 2 million registered users and 500,000 monthly active users in May to 5 million total registered users and 1.5 million monthly active users today.

Statespace launched out of stealth in 2017 with a product called Aim Lab. Aim Lab runs on Steam and replicates the physics of popular video games to give users a training environment to practice their aim. Moreover, Aim Lab (which was developed by neuroscientists) measures visual acuity and lets users know their strengths and weaknesses.

Image Credits: Statespace

The company also has plans to launch a product called The Academy, which lets users pay for courses that are taught by top streamers and players. These players include KingGeorge (Rainbox Six Siege), SypherPK (Fortnite), Valkia (Overwatch), Drift0r (CoD) and Launders (CS:GO).

The tech behind Aim Lab can be applied to a number of use cases in the gaming world. For one, pro esports organizations don’t necessarily have the breadth of data they want to make decisions on roster formation, recruiting, etc. Statespace partnered with the Pro Football Hall of Fame to develop a “Cognitive Combine,” giving players an overall score based on a wide range of skills outside of any specific game.

Statespace picks up $2.5M to help gamers train

There are also medical applications for the tech. The company has applied for a grant alongside several universities to work on a commercial application for stroke rehabilitation, and believes that its tech can be used to help with cerebral palsy rehabilitation.

Statespace has also grown its team to more than 40 people, and interestingly around one quarter of those people do not have a college degree.

“Internally, we talk about being like the island of misfit toys as a company,” said Mackey. “Give us all the underdogs and weirdos and people that traditionally wouldn’t have this type of career or a shot and let’s put them all together and win.”

The Statespace team is 30% female, 28% people of color and 5% Black.

Mackey explained that growth is the number-one priority of the company, which has yet to determine a primary revenue channel. Statespace is currently partnering with teams and big streamers to develop skins that are for sale, but Aim Lab is free to use.

Statespace, the platform that trains gamers, raises $15 million

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Facebook loses final appeal in defamation takedown case, must remove same and similar hate posts globally

Austria’s Supreme Court has dismissed Facebook’s appeal in a long running speech takedown case — ruling it must remove references to defamatory comments made about a local politician worldwide for as long as the injunction lasts.

The Austrian Supreme Court has now delivered its final judgment in the #Glawischnig-Piesczek case. #Facebook has to remove the defamatory comment and any comments that are identical or equivalent in meaning worldwide.https://t.co/zhbYRr4DnG https://t.co/Y2W5SWRgO6

— Clara Rauchegger (@ClaraRauchegger) November 12, 2020

We’ve reached out to Facebook for comment on the ruling.

Green Party politician Eva Glawischnig successfully sued the social media giant seeking removal of defamatory comments made about her by a user of its platform after Facebook had refused to take down the abusive postings — which referred to her as a “lousy traitor”, a “corrupt tramp” and a member of a “fascist party”. 

After a preliminary injunction in 2016, Glawischnig won local removal of the defamatory postings the next year but continued her legal fight — pushing for similar postings to be removed and take downs to also be global.

Questions were referred up to the EU’s Court of Justice. And in a key judgement last year the CJEU decided platforms can be instructed to hunt for and remove illegal speech worldwide without falling foul of European rules that preclude platforms from being saddled with a “general content monitoring obligation”. Today’s Austrian Supreme Court ruling flows naturally from that.

Europe’s top court sets new line on policing illegal speech online

Austrian newspaper Der Standard reports that the court confirmed the injunction applies worldwide, both to identical postings or those that carry the same essential meaning as the original defamatory posting.

It said the Austrian court argues that EU Member States and civil courts can require platforms like Facebook to monitor content in “specific cases” — such as when a court has identified user content as unlawful and “specific information” about it — in order to prevent content that’s been judged to be illegal from being reproduced and shared by another user of the network at a later point in time with the overarching aim of preventing future violations.

The case has important implications for the limitations of online speech.

Regional lawmakers are also working on updating digital liability regulations. Commission lawmakers have said they want to force platforms to take more responsibility for the content they fence and monetize — fuelled by concerns about the impact of online hate speech, terrorist content and divisive disinformation.

A longstanding EU rule, prohibiting Member States from putting a general content monitoring obligation on platforms, limits how they can be forced to censor speech. But the CJEU ruling has opened the door to bounded monitoring of speech — in instances where it’s been judged to be illegal — and that in turn may influence the policy substance of the Digital Services Act which the Commission is due to publish in draft early next month.

In a reaction to last year’s CJEU ruling, Facebook argued it “opens the door to obligations being imposed on internet companies to proactively monitor content and then interpret if it is ‘equivalent’ to content that has been found to be illegal”.

“In order to get this right national courts will have to set out very clear definitions on what ‘identical’ and ‘equivalent’ means in practice. We hope the courts take a proportionate and measured approach, to avoid having a chilling effect on freedom of expression,” it added.

How will EC plans to reboot rules for digital services impact startups?

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Act now before Google kills us, 135-strong coalition of startups warns EU antitrust chief

A coalition of 135 startups and tech companies with services in verticals including travel, accommodation and jobs have written to the European Commission to urge antitrust action against Google — warning that swift enforcement is needed or some of their businesses may not survive.

They also argue the Commission needs to act now or it risks undermining its in-train reform of digital regulations — which is due to be lay out in draft form early next month.

The letter has been inked by veteran Internet players such as Booking.com, Expedia, Kayak, Opentable, Tripadvisor and Yelp, co-signing along with a raft of (mostly) smaller European startups across all three verticals.

A further 30 co-signatories are business associations and organizations in related and other areas such as media/publishing — making for a total of 165 entities calling for Google to face swift antitrust banhammers.

A European Commission spokesperson confirmed to TechCrunch it’s received the Google critics’ letter — saying it will reply “in due course”.

‘Not competing on the merits’

While there have been complaints on this front before — the Commission has said it’s been hearing rumblings of discontent in the travel segment since for years at this point — a growing coalition of businesses (including some based in the US) are bandying together to pressure the EU antitrust chief to clip Google’s wings — with, for example, jobs-related businesses joining the travel startups whose complaints we reported on recently.

Reuters, which obtained the letter earlier, reports that the coalition is the largest ever to complain in concert to the EU’s competition division.

Travel startups cry foul over what Google’s doing with their data

In the letter, which TechCrunch has reviewed, the group argues that Google is violating a 2017 EU competition enforcement decision over Google Shopping that barred the tech giant from self-preferencing and unfairly demoting rivals.

The group argues Google is unfairly leveraging its dominant position in Internet search to grab marketshare in the verticals where they operate — pointing to a feature Google displays at the top of search results (called ‘OneBoxes’) where it points Internet users to its own services, simultaneously steering them away from rival services.

The Commission is considering limiting such self-preferencing in forthcoming legislative proposals that it wants to apply to dominant ‘gatekeeper’ Internet platforms — which Google would presumably be classified as.

For, now, though no such ex ante regulation exists — and the coalition argues the Commission needs to pull its finger out and flex its existing antitrust powers to stop Google’s market abuse before its too late for their businesses.

“Google’s technical integration of its own specialised search services into its near monopoly general search service continues to constitute a clear abuse of dominance,” they argue in the letter to Vestager.

Europe to limit how big tech can push its own services and use third-party data

“Like no service before, Google has amassed data and content relevant for competition on such markets at the expense of others – us,” they go on. “Google did not achieve its position on any such market by competing on the merits. Rather, there is now global consensus that Google gained unjustified advantages through preferentially treating its own services within its general search results pages by displaying various forms of grouped specialised search results.”

A similar complaint about Google unfairly pushing its own services at the expense of rivals’ can be found in the US Department of Justice’s antitrust lawsuit against it, filed just last month — which is doubtless giving succour to Google complainants to redouble their efforts in Europe.

Back in 2017, the Commission found Google to be a dominant company in Internet search. Under EU law this means it has a responsibility not to apply the same types of infringing behavior identified in the Google Shopping case in any other business vertical, regardless of its marketshare.

Antitrust chief Margrethe Vestager has gained a reputation for taking on big tech during her first (and now second term) stint as the Commission’s competition chief — now combined with an EVP role shaping digital strategy for the bloc.

But while, on her watch, Google has faced enforcement over its Shopping search (2017), Android mobile OS (2018) and AdSense search ad brokering business (2019), antitrust complainants say the regulatory action has done nothing to dislodge the tech giant’s dominance and restore competition to those specific markets or elsewhere.

“The Commission’s Google Search (Shopping) decision of 27 June 2017 (was supposed to) set a precedent that Google is not permitted to promote its own services within the search results pages of its dominant general search service. However, as of today, the decision did not lead to Google changing anything meaningful,” the coalition argues in the letter dated November 12, 2020.

The Commission contends its Shopping decision has let to a significant increase in the rate of display of offers from competitors to Google in its Shopping units (up 73.5%), also pointing to a rate of near parity between Google offers on Shopping units getting clicks and rivals’ offers being clicked on. However, if Google is compensating for losing out on (some) marketshare in Shopping searches by dialling up its marketshare in other verticals (such as travel and jobs) that’s hardly going to sum to a balanced and effective antitrust remedy.

It’s also interesting to note that the signatures on the latest letter include the Foundem CEO: aka the original shopping comparison engine complainant in the Google Shopping case.

In further remarks today, the Commission spokesperson told us: “We continue to carefully monitor the market with a view to assessing the effectiveness of the remedies,” adding: “Shopping is just one of the specialised search services that Google offers. The decision we took in June 2017 gives us a framework to look also at other specialised search services, such as Google jobs and local search. Our preliminary investigation on this is ongoing.”

Google’s EU Android choice screen isn’t working say search rivals, calling for a joint process to devise a fair remedy

On the Commission’s forthcoming Digital Services Act and Digital Markets Act package, the coalition suggests a lack of action to rein in abusive behavior by Google now risks making it impossible for those future regulations to correct such practices.

“If, in the pending competition investigations, the Commission accepts Google’s current conduct as ‘equal treatment’, this creates the risk of pre-defining and hence devaluing the meaning of any future legislative ban on self-preferencing,” they warn, adding that: “Competition and innovation will continue to be stifled, simply because the necessary measures to counter the further anti-competitive expansion are not taken right now.”

Additionally, they argue that a legislative process is simply too slow to be used as an antitrust corrective measure — leaving their businesses at risk of not surviving Google in the meanwhile.

“While a targeted regulation of digital gatekeepers may help in the long run, the Commission should first use its existing tools to enforce the Shopping precedent and ensure equal treatment within Google’s general search results pages,” they urge, adding that they generally welcome the Commission plan to regulate “dominant general search engines” but emphasize speed is of the essence.

“We face the imminent risk of being disintermediated by Google. Many of us may not have the strength and resources to wait until such regulation really takes effect,” they add. “Action is required now. If Google were allowed to continue the anti-competitive favouring of its own specialised search services until any meaningful regulation takes effect, our services will continue to lack traffic, data and the opportunity to innovate on the merits. Until then, our businesses continue to be trapped in a vicious cycle – providing benefits to Google’s competing services while rendering our own services obsolete in the long run.”

Asked for its response to the group’s criticism of its business practices, a Google spokesperson send this statement: “People expect Google to give them the most relevant, high quality search results that they can trust. They do not expect us to preference specific companies or commercial rivals over others, or to stop launching helpful services which create more choice and competition for Europeans.”

Google fined $2.7BN for EU antitrust violations over shopping searches

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Calling Dublin VCs: Be featured in The Great TechCrunch Survey of European VC

TechCrunch is embarking on a major new project to survey the venture capital investors of Europe, and their cities.

Our <a href=”https://forms.gle/k4Ji2Ch7zdrn7o2p6”>survey of VCs in Dublin will capture how the city is faring, and what changes are being wrought amongst investors by the coronavirus pandemic. (Please note, if you have filled the survey out already, there is no need to do it again).

We’d like to know how Ireland’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and, generally, how your thinking will evolve from here. Obviously, most VCs are in Dublin, but we don’t want to miss out on those based elsewhere.

Our survey will only be about investors, and only the contributions of VC investors will be included. More than one partner is welcome to fill out the survey.

The shortlist of questions will require only brief responses, but the more you can add, the better.

You can fill out the survey here.

Obviously, investors who contribute will be featured in the final surveys, with links to their companies and profiles.

What kinds of things do we want to know? Questions include: Which trends are you most excited by? What startup do you wish someone would create? Where are the overlooked opportunities? What are you looking for in your next investment, in general? How is your local ecosystem going? And how has COVID-19 impacted your investment strategy?

This survey is part of a broader series of surveys we’re doing to help founders find the right investors.

https://ift.tt/3jAb9oJ

For example, here is the recent survey of London.

You are not in Dublin, but would like to take part? That’s fine! Any European VC investor can STILL fill out the survey, as we probably will be putting a call out to your city next anyway! And we will use the data for future surveys on vertical topics.

The survey is covering almost every European country on the continent of Europe (not just EU members, btw), so just look for your country and city on the survey and please participate (if you’re a venture capital investor).

Thank you for participating. If you have questions you can email mike@techcrunch.com

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Instagram redesign puts Reels and Shop tabs on the home screen

Instagram is putting its TikTok competitor Reels front-and-center in a redesigned version of its app by giving it the center position on its new navigation bar. The update, arriving today, also replaces the Activity tab (heart icon) with the Shop tab, following a test that had changed this aspect of the app’s home screen earlier this summer.

In the redesigned app, both the Compose button and the Activity tab have been relocated to the top-right of the home screen, while the center middle button now belongs to Reels.

Before, Reels videos were mixed in with other photo and video content on the Instagram Explore page, though Instagram this fall began to experiment with different layouts (see below).

This led to some early complaints from users looking for Reels in the app, who had said it was harder to find, the company says.

We’re starting to test different versions of Instagram’s home screen – when you open the app you’ll soon see a Reels tab and a Shop tab in one of these three layouts. pic.twitter.com/WLmjAwYwFW

— Adam Mosseri (@mosseri) September 9, 2020

The redesign, which makes Reels the main button in the app, is an aggressive attempt on Instagram’s part to direct users to its short-form video feed, which has so far seen only a lukewarm reception from reviewers. Critics have said Reels lacks competitive features, contributes to Instagram’s bloat, feels stale and features a lot of recycled TikTok content. At best, it’s been deemed a shameless clone.

Instagram, on the other hand, would argue that it’s still early days for its Reels short-form video in its app. And the change could encourage more creators to share their Reels, given the now high-profile position given to the product.

That said, it cannot be understated how significant it is to relocate a Compose button in an app that relies on user-generated content. That Instagram would minimize the button’s importance in this way is a testament to how much of its future relies on making Reels work.

“The way we think about this update is that we’re trying to make it really easy to use an expanded suite of products now available on Instagram, while maintaining a simplicity,” explains Instagram’s director of Product Management, Robby Stein.

Simplicity, given the wide range of products Instagram now offers, could become a challenge.

When tapped, the relocated Compose button will now take users to a redesigned Camera experience, too. Here, you can either pick photos or videos to post to your Feed, or scroll over to choose to post to your Story, Reels, or go Live. While this doesn’t replace the swipe gesture to get to the Camera, it does give all the different post formats a more equal footing.

Image Credits: Instagram

Next to the new Compose button is the relocated Activity button (the heart icon) and a redesigned messaging button that takes you to your Instagram DMs — which are now connected to Facebook Messenger’s universe. The messages button itself has been changed to look like the Facebook Messenger icon (for those who opted in to the new experience), and not the paper airplane icon that was previously associated with the Instagram inbox.

Another major change sees the Instagram Shop winning a home screen placement.

The company began testing the Shop tab in place of the Activity tab in July, where it would send users to an updated version of the Instagram Shop. Here, users could filter by brands they followed on Instagram or by product category. And, in many cases, users could pay for their purchase using Instagram’s own Checkout feature, which involves a selling fee.

New forecast pegs TikTok to top 1.2B monthly active users in 2021

Instagram’s push to make its app more of an online shopping destination through this and other changes comes at a critical time for the e-commerce market. The coronavirus pandemic accelerated the shift to e-commerce by at least five years, according to some analysts. That means any plans Instagram had to become a major player in online commerce were also just expedited.

Image Credits: Instagram

Combined, both moves signal a company that’s worried about the impact TikTok may have on the long-term future of its business.

The Chinese-owned rival video app has been surging in popularity around the world, and particularly with the Gen Z demographic. TikTok is now projected to top 1.2 billion monthly active users in 2021, according to a recent forecast. However, the app’s U.S. fate is still unknown due to a lack of attention from the Trump administration over the TikTok ban, as well as uncertainty as to how the incoming Biden administration will proceed to enforce it.

Today’s TikTok captures users’ attention with its short-form content, personalized “For You” feed, sizable music catalog and special effects.

Image Credits: Instagram

But there’s also potential for the app to expand beyond being just an entertainment platform, as its recent partnership with Shopify on social commerce indicates. TikTok’s video format makes for an ideal medium to showcase a brand’s products — which is why Walmart angled in on the would-be TikTok acquisition for its U.S. operations, driven by Trump’s TikTok ban.

If and when TikTok scales this side of its business in the U.S., it could win social commerce market share from both Facebook and Instagram. And its appeal on the entertainment front could make it more difficult for Reels, or anyone else, to compete.

TikTok partners with Shopify on social commerce

But Instagram has one big advantage in this battle: user data. It can inform its own personalization algorithms for Reels based on what users are doing elsewhere in its app, and even on Facebook if the user connected their account.

However, Stein says the main signals Reels personalization algorithms use are based on data coming from engagement within Reels, like whether you liked a video, for example.

Though Instagram users may not appreciate the buttons being relocated, Stein says, in tests, people came to adapt the changes. And in the end, it was necessary.

“We try to maintain simplicity by making sure that it’s clear why everything is where it is. But also, each tab has a really clear purpose to you,” says Stein. “So there’s now one clear place to go to start watching video and be entertained and, hopefully, have some fun,” he says. “There’s one really clear place to go now, when you want to post. And there’s one really clear place now you want to shop, which is really important to us.”

The changes will roll out to all markets where Reels and Shop are live, including the U.S., over the next few days.

Correction, 11/12/20 9:20 am et: We initially misspelled Robby Stein’s name. It’s spelled Robby Stein, not Robbie Stein. This has been corrected. Apologies for the error. 

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