Saturday, 29 February 2020

Why you can’t overlook the small details in the pursuit of innovation

Why you can’t overlook the small details in the pursuit of innovation

This week, we read a very short story, The Great Silence, as we start to head toward the end of Ted Chiang’s Exhalation collection. This story asks questions about how we connect with nature, and also how to think about innovation and where new ideas come from.

We will finish the remaining two stories in the collection in the coming week, and then it will be time (sadly!) to change books. I’ll announce the next book in the book club hopefully shortly.

Some further quick notes:

  • Want to join the conversation? Feel free to email me your thoughts at bookclub@techcrunch.com (we got a real email address!) or join some of the discussions on Reddit or Twitter (hashtag TCBookClub)
  • Follow these informal book club articles here: https://techcrunch.com/book-review/. That page also has a built-in RSS feed for posts exclusively in the Book Review category, which is very low volume.
  • Feel free to add your comments in our TechCrunch comments section below this post.

Reading The Great Silence

This is a quite short story with a simple message. The narrator is a parrot discussing humanity’s quest to seek out artificial life elsewhere in the universe. The parrot, observing these actions, reflects on why humanity spends so much time looking for intelligence elsewhere, when it itself is intelligent, and located right next to us. The devastating line Chiang delivers comes toward the end:

But parrots are more similar to humans than any extraterrestrial species ever will be, and humans can observe us up close; they can look us in the eye. How do they expect to recognize an alien intelligence if all they can do is eavesdrop from a hundred light-years away?

The author offers us some obvious points to think about around environmental destruction and species extinction, and those are obvious enough that I think any reader can sort of surmise how the story connects to those issues.

So I want to instead connect this discussion to a theme dear to the heart of TechCrunch readers, and that is the quest for science and innovation.

To me, Chiang isn’t just criticizing our disdain for the animal species around us, but is also critiquing an innovation community that constantly strives for the big and “shiny” discoveries when so many smaller and local discoveries have yet to be made.

We invest billions of dollars into satellites and telescopes and radar arrays hoping to capture some fleeting glimpse into an alien world somewhere in the galaxy. And yet, there are deeply alien worlds all around us. It’s not just parrots — Earth is filled with species that are incredibly different from us in physiology, behavior, and group dynamics. What if the species most alien to our own in the whole galaxy is located right under our noses?

Of course, there would be huge headlines in finding even a single-celled organism on another planet (assuming there was even some way to detect such life in the first place). But that is precisely the type of narrow-minded, novelty-seeking behavior that Chiang is pointing out here.

Nonetheless, innovation can be a weird beast. It isn’t hard to look around the Valley these days and be dismayed at just how adrift a huge part of the industry is. We are creating more “smart” products than ever, yet huge social challenges and scientific frontiers remain completely unfunded. It’s easier to raise funding to start up an upgraded handbag company with a new brand and marketing strategy than it is to build an engineering team to push quantum computing forward.

There are certainly many valid arguments for moving our money to more “worthwhile” pursuits. Yet, fresh ideas that change industries can sometimes come from the oddest places, with even frivolous products occasionally creating fundamental advances in technology. Facebook as a social network might be a time sink for its users, but its huge scale also triggered all kinds of new data center infrastructure technologies that have been widely adopted by the rest of the tech industry. Solving a frivolous problem became the means to solving a problem of more depth.

In the end, you need to seek answers. Don’t overlook the obvious around us or get inured to the quotidian challenges that may just be the fount of innovation. Maybe figuring out the communication of parrots does nothing for us. Or maybe, exploring that area will open up whole new ideas for how to communicate and understand the neural patterns of speech. We can’t know until we tread along the path.

Now, to take one aside before we close out: Exhalation is a collection of previously-published short stories, but Chiang manages to work in his arch-symbol of breath and air into this piece in a fairly tight way:

It’s no coincidence that “aspiration” means both hope and the act of breathing.

When we speak, we use the breath in our lungs to give our thoughts a physical form. The sounds we make are simultaneously our intentions and our life force.

It’s a symbol we saw most substantively in Exhalation (the short story itself, not this whole collection) which we talked about a few posts ago. It’s a gorgeous little motif, and Chiang nicely embeds it to create an empathetic connection between humans and animals.

Some question about Omphalos

For the next and penultimate short story Omphalos, here are some questions to think about as you read the story.

  • What is the meaning of belief? How does belief influence both our views on our place in the world and our approaches to science and the scientific method?
  • Does existence and existentialism flow from external symbols or internal rationales?
  • How do religion and science mix? How did Chiang frame this narrative to make this question easier to contend with?
  • The story focuses on the dynamics of archaeology and astronomy — why these two disciplines and not some other field of science?
  • What’s the ultimate message of the story? Or is there more than one that can be read into the text?


FDA allows new diagnostic technologies to test for coronavirus before receiving emergency approvals

FDA allows new diagnostic technologies to test for coronavirus before receiving emergency approvals

The U.S. Food and Drug Administration said today that it would allow new diagnostics technologies to be used to test for the novel coronavirus, COVID-19, at elite academic hospitals and healthcare facilities around the country.

The agency’s new initiative comes as critics have assailed various U.S. government agencies for being woefully underprepared to effectively address the spread of the novel coronavirus in the country despite being aware of the potential risks the virus posed since the first cases were reported in Wuhan, China in early December.

As the first diagnosed cases of the new virus appeared in the country, U.S. Centers for Disease Control and Prevention had conducted only 459 tests. Meanwhile, China had five commercial tests for the coronavirus on the market one month ago and can now conduct up to 1.6 million tests per week. South Korea has tested another 65,00 people so far, according to a report in Science Magazine. Initial tests in the U.S. were hampered by the distribution of test kits which contained a faulty reagent — rendering the kits useless.

The CDC isn’t the only U.S. agency criticized for its mishandling of the response to a potential outbreak. On Thursday a whistleblower complaint was filed against the Department of Health and Human Services alleging that the agency sent over a dozen employees to Wuhan to evacuate American citizens from the country without the proper training or protective gear, as first reported by The Washington Post.

Now, the Food and Drug Administration is opening the doors for research centers across the country to use new technologies that have yet to be approved for emergency use in order to dramatically increase the number of tests healthcare facilities can perform.

“We believe this policy strikes the right balance during this public health emergency,” said FDA Commissioner Dr. Stephen M. Hahn, in a statement. “We will continue to help to ensure sound science prior to clinical testing and follow-up with the critical independent review from the FDA, while quickly expanding testing capabilities in the U.S. We are not changing our standards for issuing Emergency Use Authorizations. This action today reflects our public health commitment to addressing critical public health needs and rapidly responding and adapting to this dynamic and evolving situation.”

The new policy allows laboratories to begin to use validated COVID-19 diagnostics before the FDA has completed review of the labs’ Emergency Use Authorization (EUA) requests, the agency said in a statement.

In cases where the Department of Health and Human Services indicates that there’s a public health emergency or a significant potential for a public health emergency, the FDA can issue these EUAs to permit the use of medical products that can diagnose, treat, or prevent a disease. The HHS secretary determined that the outbreak of the COVID-19 coronavirus was just such an emergency on February 4.

So far, the FDA has authorized one EUA for COVID-19 that’s already being used by the CDC and some public health labs, the agency said.

“The global emergence of COVID-19 is concerning, and we appreciate the efforts of the FDA to help bring more testing capability to the U.S.,” said Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases (NCIRD).

Development of new diagnostics tests are handled by the Biomedical Advanced Research and Development Authority, part of the HHS Office responsible for preparedness and response to health issues.

“This step may reduce development costs, speed the process for availability at more testing sites, incentivize private development and, ultimately, help save lives,” said Rick Bright, the BARDA’s director.

Startups like the Redwood City, Calif.-based genome sequencing device manufacturer, Genapsys, and Co-Diagnostics, another molecular diagnostics startup out of Salt Lake City, have been approached by the Chinese government and European testing facilities, respectively.

In the U.S. a number of large, publicly traded companies and startups are pursuing new diagnostics tools that can be used to identify the novel strain of the coronavirus.

“At BARDA, we are identifying industry partners to develop rapid diagnostics that can be used in commercial and hospital labs or even doctors’ offices so that medical professionals and their patients have the information they need to take action,” Bright said.



Coronavirus grifts crop up online for political gain and profit

Coronavirus grifts crop up online for political gain and profit

These days capitalism and democracy seem to mean that it’s never too early to take advantage of the misery of others, and the outbreak of the novel coronavirus, COVID-19, is the latest proof point.

On Saturday the Washington Post reported that an agency within the State Department had compiled a report of two million tweets, which peddled conspiracy theories about the COVID-19 coronavirus outbreak.

Among the hoaxes compiled in the report and reported by the Post included the suggestion that the virus had been created by the Bill and Melinda Gates Foundation or was the result of a bioweapon developed by the Chinese government.

In all, these tweets represent about 7 percent of the total tweets surveyed by the government, according to the Post’s reporting.

Critically, the report indicated that some of the misinformation spread online appeared to be the result of “inauthentic and coordinated activity,” the Post reported the document saying.

The report mirrors warnings from cybersecurity firms like Check Point Software, which issued a report tracking the launch of new websites linked to themes around the coronavirus outbreak earlier this month.

According to the company’s Global Threat Index for January 2020, “cyber-criminals are exploiting interest in the global epidemic to spread malicious activity, with several spam campaigns relating to the outbreak of the virus.”

The company correlated Google search terms with what it deemed to be “malicious discussions” about the virus, and showed them to be tightly correlated.

In one instance, a hacking campaign targeting web users in Japan distributed malicious email attachments by pretending to be a Japanese disability welfare service provider. The email provided misinformation about the spread of the coronavirus in several Japanese cities, and when a user opened an attachment to the email, they downloaded a modular, self-propagating Trojan virus onto their computer.

Email campaigns represent one threat, but another one that the security firm tracked was new websites with domain names linked to the virus.

The company already spotted one fake website, “vaccinecovid-19.com”. It was first created on February 11, 2020 and registered in Russia. According to Check Point, “the website is insecure, and offers to sell ‘the best and fastest test for Coronavirus detection at the fantastic price of 19,000 Russian rubles (about US$300)’.

Facebook, Amazon, and Twitter have all taken steps to remove misinformation about the novel coronavirus from their platforms including advertisements offering purported cures for the disease.

Earlier this month, the big tech companies met with representatives of the World Health Organization to come up with a plan and coordinate on ways to combat misinformation and scams online.

Earlier this week, Facebook issued the following statement about its continuing response to misinformation campaigns on the site:

As world health officials issue new guidance and warnings about coronavirus (COVID-19), we’re continuing our work to connect people to information from regional and local health organizations and limit the spread of misinformation and harmful content about the virus.

Connecting People to Accurate Information and Helpful Resources

Anyone who searches for information related to the virus on Facebook is shown educational pop-ups on top of search results connecting them to expert health organizations including the World Health Organization (WHO). We’ve launched these globally over the last few weeks in all languages on Facebook, directing people to the WHO. In several countries we are directing people to their local ministry of health. For example, in the US we are directing people to information from the Centers for Disease Control and Prevention (CDC) and in Singapore, we’re directing people to the Singapore Ministry of Health. Moreover, in countries where the WHO has reported person-to-person transmission and deaths, we’ve shown additional messages to people toward the top of News Feed with more information.



Startups Weekly: Why some fintech companies aren’t blinking at customer acquisition costs

Startups Weekly: Why some fintech companies aren’t blinking at customer acquisition costs

[Editor’s note: Welcome to our weekly review of news that startups can use from across TechCrunch and Extra Crunch. If you want this post by email, just subscribe here.] 

Why some fintech startups aren’t blinking at customer acquisition costs

Distribution channels are getting saturated across the internet and beyond, and in many tech sectors the cost of acquiring new customers is crimping profitability. But so far, so good in the “great credit card craze,” as Alex digs into this week for Extra Crunch. It turns out that the remaining revenue possibilities combined with the current revenues from interchange fees mean costs are staying relatively flat — or so say a few well-placed execs.

“If anything, our customer numbers are massively accelerating despite cutting back on marketing spend,” explains Brian Barnes of M1 Finance. “And I do think that gets into how we positioned ourselves [as] a firm and what drives at the capital efficiency of how we’ve gotten to where we’ve gotten.”

Feast or famine in early-stage funding

After Elizabeth Yin posted a popular Twitter thread last month about the bifurcation of fundraising outcomes in Silicon Valley these days, we caught up with the Hustle Fund cofounder to talk more. “I’m seeing companies at the Series A and Series B stages with 30% MoM growth that were popular before now struggle to raise their next rounds because they are not profitable,” she writes in a guest column on TechCrunch. “The feedback they receive is to ‘come back when you’re profitable or really close to it.’”

She also noted that even though it does seem like there is a lot of money available, much of that is going to repeat entrepreneurs and/or companies with lots of growth and profitability in the numbers. In a companion interview with Alex Wilhelm for Extra Crunch, she notes that: “In the later stages, it is worthwhile to move to San Francisco because as you’re growing your company, there are a lot more people in San Francisco who have built high-growth companies before, there’s a lot of knowledge that I think is still insider knowledge in San Francisco itself. But at the earlier stages, I don’t think that that’s necessary.”

Y Combinator publishes big new Series A round guide

Speaking of raising these days, this new guide could help. Connie Loizos caught up with co-author and YC partner Aaron Harris in an interview for TechCrunch. Here’s one example he provides about the nuance it covers:

We explain how to work through a diligence request by an investor. Someone might say, ‘Hey, can you give me a month-by-month breakdown of major customers?’ And we’ve seen founders give them a full list of their customers, then the VC calls them, and if the customer is having a bad day or [the VC] reaches the wrong person, that bad reference check can sink a round. It’s really important that founders ask instead about what the VC is trying to learn from the diligence request, then call those customers so they’re ready, You also want to make sure that 15 investors aren’t calling the same customer so that [that person or company] isn’t overwhelmed.

Virtual worlds are finally becoming real

Despite the decades of unrealized dreams, breakout hits like Fortnite and Minecraft are showing the emerging opportunities for mass-market virtual worlds. Media analyst Eric Peckham is exploring the evolution of this trend through a seven-part Extra Crunch series, which he and many others believe will come to gradually define our lives. So far, he’s published an overview, and Extra Crunch articles on gaming on social networks, our multiverse gaming future and why that future is not here yet. Stay tuned for his articles on the emerging competitive landscape and more.

Where top VCs are investing in medical and surgical robotics

Medical device and robotics startups raised roughly 600-700 rounds of venture capital in 2019, according to data from Pitchbook and Crunchbase, with most deals occurring at the early stage (over 25% of rounds occurred at the seed stage). With our 2020 Robotics+AI sessions event next week in Berkeley, be sure to check out our interviews with top med-tech investors in this week’s investor survey on Extra Crunch.

Avoiding the on-demand trap

We’re trying some thing new here — a preview of upcoming guest columns. The following note is from growth strategist Chris Yeh, co-author of Blitzscaling.

Thanks to the success of companies like Uber and Airbnb, a seemingly endless array of startups jumped into becoming “the Uber for X” or the “Airbnb of Y”.  So many of these startups have struggled or failed. Why? The fell into the “on-demand” trap: Believing that the delivery mechanism (a smartphone-enabled marketplace) rather than the market determines success. If you apply the on-demand model to the wrong market, you’ll be doomed to failure. To avoid the on-demand trap, avoid markets where the product or service A) is a low-consideration transaction and B) naturally lends itself to long-term buyer/seller relationships.

Want to learn more?  Look for a detailed explanation of the on-demand trap, coming to TechCrunch and ExtraCrunch soon.

Across the week

Twilio 2010 board deck gives peek at now-public company’s early days (EC)

Startup malaise, startup ambition (TC)

For investors, late-stage fintech startups are a lucrative bet (EC)

What happens if a pandemic hits? (TC)

Instead of IPOs and acquisitions, exiting to community is one alternative (EC)

With better recall of our photos and videos, will our ability to forgive disappear? (TC)

Superhuman CEO Rahul Vohra on waitlists, freemium pricing and future products (EC)

How do we connect a child to technology? (TC)

#EquityPod

From Alex:

What a week. What an insane, heart-stopping, odd and stuffed week. I’m utterly exhausted. But, in better news, all of that is great fodder for podcast and chat, so today’s Equity is pretty okay, if I may say so.

Danny and I chewed through all the stuff that we couldn’t get out of our heads, like the markets falling apart and DoorDash’s initial movement toward going public. But in keeping with the real beating heart of Equity, we also went over four venture rounds and spent some time talking about SoftBank.



Multiverse virtual worlds will be healthier for society than our current social networks

Multiverse virtual worlds will be healthier for society than our current social networks

The basis of the classic James Bond film “Tomorrow Never Dies” is an evil media mogul who instigates war between the U.K. and China because it will be great for TV ratings. There’s been a wake-up call recently that our most popular social networks have been indirectly designed to divide populations into enemy camps and reward sensational content, but without the personal responsibility of Bond’s nemesis because they’re algorithmically driven.

(This is part five of a seven-part series about virtual worlds.)

The rise of “multiverse” virtual words as the next social frontier offers hope to one of the biggest crises facing democratic societies right now. Because the dominant social media platforms (in Western countries at least) monetize through advertising, these platforms reward sensational content that results in the most clicks and shares. Oversimplified, exaggerated claims intended to shock users scrolling past are best practices for individuals, media brands and marketing departments alike, and social platforms intentionally steer users toward more extreme content in order to captivate them for longer.

Our impending cultural shift to socializing equally as often through virtual worlds could help rescue us from this constant conflict of interest between what we recognize as healthy interactions with others and how these social apps incentivize us to behave.

Virtual worlds can have advertisements within them, but the dominant monetization strategies in MMOs are upfront purchase of games and in-game transactions. Any virtual world that gains enough adoption to compete as a social hub for mainstream society will need to be free-to-play and will earn more money through in-world transactions than from ads.



This Week in Apps: Coronavirus impacts app stores, Facebook sues mobile SDK maker, Apple kicks out a cloud gaming app

This Week in Apps: Coronavirus impacts app stores, Facebook sues mobile SDK maker, Apple kicks out a cloud gaming app

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads in 2019 and $120 billion in consumer spending in 2019, according to App Annie’s recently released “State of Mobile” annual report. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, we’ll look at the coronavirus outbreak’s impact on the App Store, China’s demand for App Store removals — and soon-to-be-removals, it seems. We’re also talking about Facebook’s lawsuit over a data-grabbing SDK, Tinder’s new video series, the TSA ban on TikTok, Instagram’s explanation for its lack of an iPad app and how Democratic presidential primary candidates are performing on mobile and social, among other things.

Headlines

Coronavirus concerns send Chinese ride-hailing apps crashing, games surging



Friday, 28 February 2020

GDC 2020 has been canceled

GDC 2020 has been canceled

Well, after what I’m sure was a hectic few days for the folks planning the Game Developers Conference in San Francisco, the team announced today that they have officially decided to cancel the event happening this March, saying in a blog post that they hoped they would be able to reschedule an event for “later in the summer.”

In recent days, nearly all of the event’s top corporate sponsors announced that they would not be sending employees to the event due to concerns surrounding coronavirus. Microsoft, Unity, Epic, Amazon, Facebook and Sony had all bowed out of the event. GDC’s statement did not reference the virus.

The company behind GDC detailed that they will be refunding conference and expo attendees in full, though a blog post details the group hopes to host a GDC even later in the summer, noting, “We will be working with our partners to finalize the details and will share more information about our plans in the coming weeks.”

GDC is just the latest tech conference to be shuttered in the wake of worldwide concern surrounding the outbreak of coronavirus. Yesterday, Facebook announced it would be canceling the in-person component of its F8 conference and we have already seen the cancellation of GSMA’s Mobile World Congress in Barcelona.



Lyft ramps up self-driving program

Lyft ramps up self-driving program

A year ago, Lyft submitted a report to the California Department of Motor Vehicles that summed up its 2018 autonomous vehicle testing activity in a single, short paragraph.

“Lyft Inc. did not operate any vehicles in autonomous mode on California public roads during the reporting period,” the letter read. “As such, Lyft Inc. has no autonomous mode disengagements to report.”

The 2019 data tells a different story. Lyft had 19 autonomous vehicles testing on public roads in California in 2019, according to data released earlier this week by the CA DMV. Those 19 vehicles, which operated during the reporting period of December 2018 to November 2019, drove nearly 43,000 miles in autonomous mode.

The report is the latest sign that Lyft is trying to ramp up its self-driving vehicle program known as Level 5. 

The CA DMV, the agency that regulates autonomous vehicle testing on public roads in the state, requires companies to submit an annual report that includes data such as total AV miles driven and number of vehicles. It also requires companies to report “disengagements,” a term that describes each time a self-driving vehicle disengages out of autonomous mode either because its technology failed or a human safety driver took manual control for safety reasons.

That’s still far below established AV developers such as Cruise and Waymo, which accumulated 831,000 and 1.45 million autonomous miles, respectively. And it makes up just a tiny sliver of the total autonomous miles racked up by the 36 companies that tested on public roads in 2019.

The total number of autonomous miles driven in 2019 rose 40%, to more than 2.87 million, thanks largely to a notable uptick in public on-road testing by Baidu, Cruise, Pony.ai, Waymo and Zoox. While the number of companies with testing permits grew to 60 in 2019, the percentage of companies actually testing on public roads fell to about 58%. In 2018, about 62% of the 48 companies that held permits tested on public roads.

Other companies scaled back public testing in California. Some moved public testing outside of California, others retracted due to the high cost. Others said they were opting to place greater emphasis on simulation.

Still, the report shows Lyft is doing more than partnering with autonomous vehicle companies like Aptiv. Lyft and Aptiv launched a robotaxi pilot in January 2018 in Las Vegas. The program, which puts Aptiv vehicles on Lyft’s ride-hailing network, surpassed 100,000 rides this month. Human safety drivers are always behind the wheel and the vehicles do not drive autonomously in parking lots and hotel lobby areas.

Lyft’s Level 5 program — a nod to the SAE automated driving level that means the vehicle handles all driving in all conditions — was launched in July 2017. Today, Level 5 employs more than 400 people in the U.S., Munich and London.

Testing on public roads in California began in November 2018 with a pilot program in Palo Alto that provided rides to Lyft employees in Palo Alto. The pilot provided on-demand rides set on fixed routes, such as traveling between the Lyft office and Caltrain.

Since then, the company has expanded the scope and geography of the pilot. By late 2019, Lyft was driving four times more autonomous miles per quarter than it was six months prior.

Lyft is also testing on a dedicated closed-course track in East Palo Alto that it opened in November 2019. The company told TechCrunch it uses this facility, which can be changed to include intersections, traffic lights and merges, to test software prior to putting its vehicles on public roads.



FCC proposes $200M in fines for wireless carriers that sold your location for years

FCC proposes $200M in fines for wireless carriers that sold your location for years

The FCC has officially and finally determined that the major wireless carriers in the U.S. broke the law by secretly selling subscribers’ location data for years with almost no constraints or disclosure. But its Commissioners decry the $200 million penalty proposed to be paid by these enormously rich corporations, calling it disproportionate to the harm caused to consumers.

Under the proposed fines, T-Mobile would pay $91M; AT&T, $57M; Verizon, $48M; and Sprint, $12M. (Disclosure: TechCrunch is owned by Verizon Media. This does not affect our coverage in the slightest.)

The case has stretched on for more than a year and a half after initial reports that private companies were accessing and selling real-time subscriber location data to anyone willing to pay. Such a blatant abuse of consumers’ privacy caused an immediate outcry, and carriers responded with apparent chagrin — but failed to terminate or even evaluate these programs in a timely fashion. It turns out they were run with almost no oversight at all, with responsibility delegated to the third party companies to ensure compliance.

Meanwhile the FCC was called on to investigate the nature of these offenses, and spent more than a year doing so in near-total silence, with even its own Commissioners calling out the agency’s lack of communication on such a serious issue.

Finally, in January, FCC Chairman Ajit Pai — who, it really must be noted here, formerly worked for one of the main companies implicated, Securus — announced that the investigation had found the carriers had indeed violated federal law and would soon be punished.

Today brings the official documentation of the fines, as well as commentary from the Commission. The general feeling seems to be that while it’s commendable to recognize this violation and propose what could be considered  substantial fines, the whole thing is, as Commissioner Rosenworcel put it, “a day late and a dollar short.”

The scale of the fines, they say, has little to do with the scale of the offenses — and that’s because the investigation did not adequately investigate or attempt to investigate the scale of those offenses. Essentially, the FCC didn’t even look at the number or nature of actual instances of harm — it just asked the carriers to provide the number of contracts entered into.

And why not go after the individual companies? They’re not being fined at all. Even if the FCC lacked the authority to do so, it could have handed off the case to Justice or local authorities that could determine whether these companies violated other laws.

As Rosenworcel notes in her own statement, the fines are also extraordinarily generous even beyond this minimal method of calculating harm:

The agency proposes a $40,000 fine for the violation of our rules—but only on the first day. For every day after that, it reduces to $2,500 per violation. The FCC heavily discounts the fines the carriers potentially owe under the law and disregards the scope of the problem. On top of that, the agency gives each carrier a thirty-day pass from this calculation. This thirty day “get-out-of-jail-free” card is plucked from thin air.

Given that this investigation took place over such a long period, it’s strange that it did not seek to hear from the public or subpoena further details from the companies facilitating the violations. Meanwhile the carriers sought to declare a huge proportion of their responses to the FCC’s questions confidential, including publicly available information, and the agency didn’t question these assertions until Starks and Rosenworcel intervened.

$200M sounds like a lot, but divided among several billion-dollar communications organizations it’s peanuts, especially when you consider that these location-selling agreements may have netted far more than that in the years they were active. Only the carriers know exactly how many times their subscribers’ privacy was violated, and how much money they made from that abuse. And because the investigation has ended without the authority over these matters asking about it, we likely never will know.

The proposed fines, called a Notice of Apparent Liability, are only a tentative finding, and the carriers have 30 days to respond or ask for an extension — the latter of which is the more likely. Once they respond (perhaps challenging the amount or something else) the FCC can take as long as it wants to come up with a final fine amount. And once that is issued, there is no requirement that the fine actually be collected — and the FCC has in fact declined to collect before once the heat died down, though not with a penalty of this scale.

The only thing that led to this case being investigated at all was public attention, and apparently public attention is necessary to ensure the federal government follows through on its duties.



Apple has blocked Clearview AI’s iPhone app for violating its rules

Apple has blocked Clearview AI’s iPhone app for violating its rules

An iPhone app built by controversial facial recognition startup Clearview AI has been blocked by Apple, effectively banning the app from use.

Apple confirmed to TechCrunch that the startup “violated” the terms of its enterprise program.

The app allows its users — which the company claims it serves only law enforcement officers — to use their phone camera or upload a photo to search its database of 3 billion photos. But BuzzFeed News revealed that the company — which claims to only cater to law enforcement users — also includes many private-sector users, including Macy’s, Walmart and Wells Fargo.

Clearview AI has been at the middle of a media — and legal — storm since its public debut in The New York Times last month. The company scrapes public photos from social media sites, drawing ire from the big tech giants that claim Clearview AI misused their services. But it’s also gained attention from hackers. On Wednesday, Clearview AI confirmed a data breach in which its client list was stolen.

The public Amazon S3 page containing the iPhone app. (Image: TechCrunch)

TechCrunch found Clearview AI’s iPhone app on an public Amazon S3 storage bucket on Thursday, despite a warning on the page that the app is “not to be shared with the public.”

The page asks users to “open this page on your iPhone” to install and approve the company’s enterprise certificate, allowing the app to run.

But this, according to Apple’s policies, is prohibited if the app’s users are outside of Clearview AI’s organization.

Clearview AI’s use of an enterprise certificate on an iPhone. (Image: TechCrunch)

Enterprise certificates are issued by Apple to allow companies to build and approve iPhone and iPad apps designed for internal company use only. It’s common for these certificates to be used to test apps internally before they are pushed out to the App Store. Apple maintains a strict set of rules on use of enterprise certificates, and says they cannot be used by consumers. But there have been cases of abuse.

Last year, TechCrunch exclusively reported that both Facebook and Google were using their enterprise certificates for consumer-facing apps in an effort to bypass Apple’s App Store. Apple revoked the tech giants’ enterprise certificates, disabling the infracting app but also any other app that relied on the certificate, including their catering and lunch menu apps.

The app was labeled as “beta” — typically a pre-release or a test version of the app. Besides this claim, there is no evidence to suggest this app was not used by Clearview AI customers.

Clearview AI chief executive Hoan Ton-That told TechCrunch: “We are in contact with Apple and working on complying with their terms and conditions.”

A brief analysis of the app through network traffic tools and disassembly tools shows it works largely in the same manner as Clearview AI’s Android app, which was discovered by Gizmodo on Thursday.

Like the Android app, a user needs a Clearview AI-approved username and password to use the app.



Facebook Messenger ditches Discover, demotes chat bots

Facebook Messenger ditches Discover, demotes chat bots

Chat bots were central to Facebook Messenger’s strategy three years ago. Now they’re being hidden from view in the app along with games and businesses. Facebook Messenger is removing the Discover tab this week as it focuses on speed and simplicity instead of broad utility like China’s WeChat.

The changes are part of a larger Messenger redesign that reorients the People tab around Stories as Facebook continues to try to dominate the ephemeral social media format it copied from Snapchat. The People tab now defaults to a full-screen sub-tab of friends’ Stories, and requires a tap over to the Active sub tab to see which friends are online now.

The changes could push users to spend more time visually communicating with friends and consuming content than exploring chat bots for shopping, connecting with businesses, and playing games. That in turn could help Facebook earn more money from Messenger since it’s now showing Stories ads.

TechCrunch was tipped off to the redesign by social media director Jeff Higgins who provided us with extensive screenshots of the update. These show the absence of Discover tab, the switch to just Chat and People tabs, and the People sub-tabs for Stories and Active. We poked around some more and noticed the Instant Games and Transportation options missing from the chat composer’s utility tray. That formerly offered quick Uber and Lyft hailing. Messenger’s M Suggestions also no longer recommend the Transportation feature.

When we asked Messenger about the changes, a spokesperson confirmed that this redesign will start rolling out in the next week, removing Discover and splitting the People tab. They noted that Facebook had announced last August that it planned to eventually axe Discover, and that the added emphasis on Stories was motivated by users’ affinity for the ephemeral social media format. They also told us that Transportation was removed in late 2017, and Instant Games’ removal from the composer is part of the migration to Facebook Gaming announced last July.

A look at the old Messenger Discover tab that’s being removed

Chat bots, businesses, and games are being hidden, but not completely banished from Messenger. They’ll still be accessible if users purposefully seek them through the Messenger search bar, Pages and ads on Facebook, buttons to start conversations on businesses’ websites, and m.me URL that create QR codes which open to business accounts in Messenger. The spokesperson diplomatically claimed that businesses are still an important part of Messenger.

But without promotion via Discover, businesses will have to rely on their owned or paid marketing channels to gain traction for their chat bots. That could discourage them from building on the Messenger platform.

The Rise And Fall Of Facebook Chat Bots

The update feels like the end of a four-year era for Facebook. Back in 2016, it saw artificially intelligent chat bots as a way for businesses to scalably communicate with people, deliver customer service, and push ecommerce. But when it launched the chat bot platform at its F8 conference that year, it arrived half-baked.

The typing-based semantic user interfaces were confusing, the AI necessary to make chat bots seem human or at least reliably understand their human conversation partners hadn’t evolved yet, and several of the launch partner bots like Poncho The Weather Cat were laughably useless. The public soured on the idea of chat bots, and attempts to improve them felt insufficient.

Messenger launched Discover in 2017 in hopes that free promotion and visibility might convince developers to invest in building better chatbots. Yet by early 2018 even Facebook was backpedaling, shelving its plan to build out a full-service AI personal assistant called M that you could ask to do anything. Instead, it’d merely make AI suggestions of different Messenger features to use like Stickers or reminders based on what you typed. Then it announced last year that it would move Instant Games out of Messenger and into Facebook’s dedicated Gaming tab.

A laughably bad interaction with old Messenger chat bot Poncho The Weather Cat

Now with Discover disappearing, Messenger seems to be surrendering the fight to become a WeChat-style monolithic utility. In China, WeCat serves not just as a messaging app but a way to make payments, hail a taxi, book flights, top up your mobile data, get a loan, find housing, or shop at businesses via mini programs.

But while that centralized all-in-one style fit Chinese culture, Western markets have experienced more of an unbundling with different apps emerging to handle each of these use cases. Facebook’s constant privacy scandals and increasing anti-trust scrutiny also inhibited this approach with Messenger. Users and the US government weren’t ready to trust Facebook to handle so much of our daily lives. Facebook Messenger also has to jockey with competition like iMessage and Snapchat that could undercut it if it gets too bloated.

So now Messenger is going in the opposite direction. It’s becoming more WhatsApp-like — simple, speedy, and centered around peer-to-peer communication. Visual communication through Stories, with replies to them delivered as messages, feels like a natural extension of this focus while conveniently offering a path to monetization. If Messenger can be the best-in-class place to chat, unencumbered by promotion of chat bots and businesses, users might stay locked into the Facebook ecosystem.



Facebook brings its 3D photos feature to users with single-camera phones

Facebook brings its 3D photos feature to users with single-camera phones

Facebook first showed off its 3D photos back in 2018, and shared the technical details behind it a month later. But unless you had one of a handful of phones with dual cameras back then (when they weren’t so common), you couldn’t make your own. Today an update brings 3D photos to those of us still rocking a single camera.

In case you don’t remember or haven’t seen one lately, the 3D photos work by analyzing a 2D picture and slicing it into a ton of layers that move separately when you tilt the phone or scroll. I’m not a big fan of 3D anything, and I don’t even use Facebook, but the simple fact is this feature is pretty cool.

The problem is it used the dual camera feature to help the system determine distance, which informed how the picture should be sliced. That meant I, with my beautiful iPhone SE, was out of the running — along with about a billion other people who hadn’t bought into the dual-camera thing yet.

But over the last few years the computer vision team over at Facebook has been working on making it possible to do this without dual-camera input. At last they succeeded, and this blog post explains, in terms technical enough that I’m not even going to attempt to summarize them here, just how they did it.

The advances mean that many — though not all — relatively modern single-camera phones should be able to use the feature. Google’s Pixel series is now supported, and single-camera iPhones from the 7 forward. The huge diversity of Android devices makes it hard to say which will and won’t be supported — it depends on a few things not usually listed on the spec sheet — but you’ll be able to tell once your Facebook app updates and you take a picture.



Daily Crunch: Facebook cancels F8 over coronavirus concerns

Daily Crunch: Facebook cancels F8 over coronavirus concerns

Coronavirus fears prompt even more event cancellations, controversial facial recognition software is being used widely and DocuSign acquires Seal Software. Here’s your Daily Crunch for February 28, 2020.

1. Facebook cancels F8 conference, citing coronavirus concerns

Facebook has confirmed that it has canceled its annual F8 developers conference over growing concerns about the COVID-19 coronavirus pandemic. More specifically, the company says it’s canceling the “in-person component” — there may still be video presentations, along with live-streamed and local events, under the F8 umbrella.

At the same time, companies, including Microsoft, are pulling out of the Game Developers Conference over similar concerns. And the Geneva Motor Show was just canceled.

2. Clearview said its facial recognition app was only for law enforcement as it courted private companies

After claiming that it would only sell its controversial facial recognition software to law enforcement agencies, a new report in BuzzFeed News suggests that Clearview AI is less than discerning about its client base, and has in fact shopped its technology far and wide.

3. DocuSign acquires Seal Software for $188M to enhance its AI chops

Seal Software was founded in 2010, and, while it may not be a mainstream brand, its customers include the likes of PayPal, Dell, Nokia and DocuSign itself. (DocuSign previously invested in the company, too.) These businesses use Seal for its contract management tools, but also for its analytics, discovery and data extraction services.

4. Senate passes ‘rip and replace’ bill to remove old Huawei and ZTE equipment from networks

Written as a response to recent concerns around Chinese hardware manufacturers, the bill would ban purchase of telecom equipment from embattled Chinese manufactures like Huawei and ZTE. It also includes $1 billion in funding to help smaller rural telecoms “rip and replace” existing equipment from specific manufacturers.

5. The world Bob Iger made

The Disney executive has been openly thinking about retirement and searching for a successor — a search that culminated in this week’s announcement that he’d be stepping down from the CEO role immediately. But Iger’s succession planning hasn’t stopped him from solidifying Disney’s dominance of the entertainment business, a position designed to last long after his departure. (Extra Crunch membership required.)

6. ‘Robot’ was coined 100 years ago, in a play predicting human extinction by android hands

Published 100 years ago, R.U.R. (Rossum’s Universal Robots) by Czech writer Karel Čapek is best remembered for bringing the word “robot” to sci-fi — and English, generally.

7. Catching up with Startup Battlefield

We’re trying out something new: As you (hopefully) know, TechCrunch hosts a number of Startup Battlefield events, and afterwards, those startups often go on to do interesting and newsworthy things. But there are so many Battlefield alumni at this point that we can’t cover every announcement. So occasionally, I’ll be rounding them up here.

This week, we’ve got news from Berlin 2019 competitor Nodle.io, which is crowdsourcing the connectivity of smart sensors by offloading the task to smartphones. And Nodle announced this week that it has acquired Internet-of-Things security company Brickchain.com.

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.



Amazon is the latest to ditch GDC this year

Amazon is the latest to ditch GDC this year

GDC’s top sponsors continue to pull out of attending the San Francisco gaming conference. Today, Amazon announced it would no longer be sending employees to the event.

In an update, the team shared that they would instead be hosting a “global online event” to share news that they had been planning to detail at the conference.

Amazon Game Tech is a “diamond partner” at the Game Developers Conference this year, a designation that signifies sponsors “who play an integral role in the success of GDC,” the conference says on its website. At this point, the only diamond partners who have not officially withdrawn are Intel, Nvidia and Google.

Facebook, Sony, Microsoft, Unity and Epic Games had all pulled out on the conference over concerns surrounding the COVID-19 outbreak. Now, Amazon joins them.

TechCrunch has reached out to the other remaining sponsors at the event.



Microsoft’s Cortana drops consumer skills as it refocuses on business users

Microsoft’s Cortana drops consumer skills as it refocuses on business users

With the next version of Windows 10, coming this spring, Microsoft’s Cortana digital assistant will lose a number of consumer skills around music and connected homes, as well as some third-party skills. That’s very much in line with Microsoft’s new focus for Cortana, but it may still come as a surprise to the dozens of loyal Cortana fans.

Microsoft is also turning off Cortana support in its Microsoft Launcher on Android by the end of April and on older versions of Windows that have reached their end-of-service date, which usually comes about 36 months after the original release.

cortana

As the company explained last year, it now mostly thinks of Cortana as a service for business users. The new Cortana is all about productivity, with deep integrations into Microsoft’s suite of Office tools, for example. In this context, consumer services are only a distraction, and Microsoft is leaving that market to the likes of Amazon and Google.

Because the new Cortana experience is all about Microsoft 365, the subscription service that includes access to the Office tools, email, online storage and more, it doesn’t come as a surprise that the assistant’s new feature will give you access to data from these tools, including your calendar, Microsoft To Do notes and more.

And while some consumer features are going away, Microsoft stresses that Cortana will still be able to tell you a joke, set alarms and timers, and give you answers from Bing.

For now, all of this only applies to English-speaking users in the U.S. Outside of the U.S., most of the productivity features will launch in the future.



Wondering about getting a job at SpaceX? Elon Musk says innovation is the main criterion

Wondering about getting a job at SpaceX? Elon Musk says innovation is the main criterion

In a wide ranging discussion at the Air Warfare Symposium held by the U.S. Air Force, Elon Musk touched on some old and new themes, but one highlight of the discussion was the small window into hiring and firing practices at SpaceX — arguably one of the world’s most demanding engineering companies. 

The company prides itself on innovation and for its chief executive officer, that apparently extends to the interview process itself.

“[When we] interview people we ask for some evidence of exceptional ability that includes innovation,” says Musk. “At the interview point we select for new people who want to create new technology.”

The mercurial chief executive didn’t elaborate more fully on what proof of innovation looks like in the interview process or in an applicant’s previous work, but it’s an interesting bullet point on the company’s practices.

And the emphasis on innovation extends to the company’s incentive structure, advancement decisions and ultimately how long someone will remain at the company, Musk said.

“Incentive structure is set up that innovation is rewarded and making mistakes along the way but failure to try to innovate comes with a big penalty,” Musk said.  “You will be fired.”

It’s not just a failure to innovate, according to Musk. If the employee’s “innovations aspirations are not very good, they will no longer be at the company.”

This emphasis on innovation is critical for companies and nations to remain ahead of their competition. Musk said he doesn’t necessarily worry about intellectual property theft at either Tesla or SpaceX because hopefully the companies are developing technologies that are at least three years ahead of the competition.

“The way you achieve intellectual property protection is by innovating fast enough,” says Musk. “Speed of innovation is what matters. I do say this to my teams quite a lot. Innovation per-year is what matters.”

Although a company like IBM, with a massive patent portfolio and thousands of innovations locked in its laboratory might take issue with the sentiment, Musk says his point extends not just to companies, but to competing nation-states too.

Specifically, Musk mentioned the need for innovation if the U.S. is going to compete effectively against China, a country that could have an economy twice to three-times the size of the United States in the coming years.

“The foundation of war is economics,” Musk said. “If you have half the resources of the counterparty then you better be real innovative because [otherwise] we’re going to lose… The U.S. will be, militarily, second.”



End Game, the startup behind Zombs Royale, raises $3M

End Game, the startup behind Zombs Royale, raises $3M

End Game Interactive CEO Yang C. Liu has a refreshingly straightforward description of what he and his co-founder Luke Zbihlyj are up to: “We’re just building games. And to be honest, we don’t know what we’re doing.”

Despite this self-proclaimed ignorance, End Game has just raised $3 million in seed funding from an impressive group of investors: The round was led by the game-focused firm Makers Fund, with participation from Clash of Clans developer Supercell, Unity CEO David Helgason, Twitch COO Kevin Lin, Twitch VP Hubert Thieblot, Danny Epstien and Alexandre Cohen of Main Street Advisors and music executive Scooter Braun.

Liu told me that he and Zbihlyj got their start by building websites tied to existing games, such as PokéVision, a site for finding Pokémon in Pokémon GO. However, they were inspired by the success of simple, browser-based multiplayer games like Slither.io to create games of their own — first Zombs.io, then Spinz.io, then Zombs Royale.

Altogether, End Game says its titles have attracted more than 160 million players, with 1 million people playing in a single day. Zombs Royale, in particular, seems to have been a hit — the battle royale game (where a single map can pit up to 100 players against each other) was one of 2018’s most Googled games in the United States.

Liu said the team’s success convinced them to focus their efforts on game development: “Do we want to make products that people simply use, or games that people think about out when they’re going to school, or going to work, or dream about?”

End Game founders

Zombs Royale was supposedly built in less than four weeks, but Liu said that after its launch in early 2018, the team spent most of the year maintaining and scaling the game. Then 2019 was all about building a team and creating the next game, Fate Arena, a title in the new Auto Chess genre that’s supposed to launch on PC, mobile and other platforms soon.

Liu noted that unlike End Game’s previous work, which featured simple 2D art (“On Zombs Royale and Spinz, I did the art, and it’s terrible”), Fate Arena will feature a “3D, high-fidelity art style.”

But even as the company’s games start looking a little less primitive, the goal is still to develop and iterate quickly. Liu said his goal to fund “many tries” at building other cross-platform, multiplayer games with this seed round.

“We pride ourselves on rapid experimentation,” he said, adding that the key is “not biting off more than we can chew. We design [our games] to scale from the beginning. We don’t necessarily need to be World of Warcraft, where you need to make 100 quests as the baseline. We’re focused on games with a small starting point that can scale into something much bigger.”

Supercell Developer Relations Lead Jaakko Harlas made a similar point in a statement included in the funding announcement:

Many companies are quick to point out how fast-moving they are. Then you come across a team like this and realize what being lean and moving fast really means. Yang, Luke and the team have already shown that they can ship accessible games that showcase a real flair for fun, and we look forward to supporting them in their quest for the next big hit game.

 



Google, Toyota invest in WhereIsMyTransport to map transport in emerging cities

Google, Toyota invest in WhereIsMyTransport to map transport in emerging cities

In emerging markets, up to 80% of the population may have to rely on informally-run public transport to get around. Literally, privately-run buses and cars. But journey-planning apps that work well for commuters in developed markets like New York or London do not work well in emerging markets, which is why you can’t just flip open an app like Citymapper in Lagos, Nigeria. Furthermore, mobility is a fundamental driver of social, political, and economic growth and if you cannot get around then you can’t grow as a country. So it’s pretty important for these emerging economies.

WhereIsMyTransport specialises in mapping these formal and informal public transport networks in emerging markets. They have mapped 34 cities in Africa and are mapping cities in India, Southeast Asia, and Latin America. Its integrated mobility API includes proprietary algorithms, features, and capabilities designed for complex transit networks in these emerging markets.

It’s now raised a $7.5 million Series A funding round led by Liil Ventures, that also includes returning investors Global Innovation Fund and Goodwell Investments, plus new strategic investment from Google, Nedbank, and Toyota Tsusho Corporation (TTC).

The platform now has more than 750,000 km of routes in 39 cities and the new strategic investment will drive further international expansion.

Devin de Vries, said: “We make the invisible visible, by collecting all kinds of data related to public transport and turning the data into information that can be shared with the people who need it most. In emerging markets, the mobility ecosystem is complex; informal public transport doesn’t behave like formal public transport. Data and technology solutions that work well in London or San Francisco wouldn’t make anything like the same impact, if any at all, in the cities where we work. Our solutions are designed specifically to overcome these contextual challenges.”

Mr. Masato Yamanami, Automotive Division’s CEO of Toyota Tsusho Corporation. “Our division’s global network, that covers 146 countries, is primarily focused on new emerging countries where people rely on informal public transport. Through strategic collaboration with WhereIsMyTransport, we will establish better and more efficient mobility services that help to resolve social challenges and contribute to the overall economic development of nations, primarily emerging nations.”

Alix Peterson Zwane, Chief Executive Officer, Global Innovation Fund said: “Informal and often unreliable mass transit is a significant problem that disproportionately affects poor people. We are excited to continue to work with WhereIsMyTransport to make mass transportation in emerging cities more accessible and more efficient.”



Public markets fall yet again as venture deal counts appear to slip

Public markets fall yet again as venture deal counts appear to slip

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

All around, this has been a tough week. The coronavirus is spreading and worry is running high as infections mount. In economic terms, global markets were repeated declines last night (domestic results here), and the U.S. indices are off again this morning.

There’s been plenty of bad news to read, even in our private market, startup-focused world. Yesterday the impact of COVID-19 on earnings became more apparent, bringing what has, for months, been an external concern to domestic technology companies. The problems are now. The past week’s market collapse into correction territory hasn’t helped,.

But the story so far has largely been public-market focused and with good reason: You can see the public markets contract in real-time. It’s far harder to see into the shifting dynamics of the private market. Today, however, we are going to try, all the same, by digging into some preliminary venture capital data.

I realize that the last few days have been awful. So, at the end of this piece, I’ve excerpted a quote from a recent interview I held with the CEO of Smartsheet, Mark Mader, about tech cycles, downturns, and getting through tough times. It’s perhaps useful today as the downward trend appears to continue.

Let’s start with a brief reminder of how elevated stock prices remain and what that means for tech multiples, and then look at early February VC results from the U.S., China and Europe. With that, in Sanskrit: अभिमुखी करोति.

Multiples, Markets

Before we dig into the venture capital data, a reminder that, even with recent declines, we’re still in warm waters as far as tech valuations go.



Teen hit Yolo raises $8M to let you Snapchat anonymously

Teen hit Yolo raises $8M to let you Snapchat anonymously

It wasn’t a fad. Yolo became the country’s No. 1 app just a week after launch by letting teens ask for anonymous replies to questions they posted on Snapchat. But nine months later, Yolo is still in the top 100 iOS apps and has 10 million active users. Now it’s safeguarding the app from predators while revealing a smart new feature for spinning up anonymous group chats, powered by $8 million in fresh funding.

“What we are trying to build is a new kind of network where there’s a fluidity to identity,” Yolo co-founder Greg Henrion tells me. “We weren’t sure if Yolo was here to stay, but we’re still ranking well and there seems to be a real opportunity in anonymity starting with Snapchat Q&A.”

Yolo is the first big win for Snapchat’s Snap Kit platform that lets developers piggyback on its login, Bitmoji avatars, stickers and Stories. This lets tiny development teams build apps that hundreds of millions of people, teens in particular, can instantly sign up for in just a few taps. Another Snap Kit app for meeting new people called Hoop recently spiked to No. 2 on the charts

We haven’t seen this kind of social platform success since Zynga’s empire rose atop Facebook. Spawning more blockbusters like Yolo could ensure that a Snapchat account is a must-have utility for the next generation.

Sleepless nights atop the charts

“For two weeks we basically didn’t sleep,” Henrion recalls about the chaos he and co-founder Clément Raffenoux endured after Yolo shot to No. 1 last May. “You’re trying to stay afloat. It was very, very wild.”

The basic premise of Yolo is that you write a question like, “Who’s my celebrity look alike?”, “What do people really think of me?” or “How could I be nicer?”. You’re then switched over to Snapchat, where you can post the question in your Story or messages with a link back to Yolo. There, people can anonymously leave a response; you can post that and your reply with another post on Snapchat.

Yolo co-founder and CEO Greg Henrion, in real life and Bitmoji

The result is that friends and followers feel comfortable giving you real talk. They don’t have to sugarcoat their answers. And that makes people race to open Yolo each time they get a message. Yolo has seen 26 million downloads across iOS and Android globally, with nearly 70% in the U.S.

Other anonymous apps like tbh (acquired by Facebook) and Sarahah (kicked off the app stores) quickly faded, and others eventually imploded due to bullying, like Secret and YikYak. Although tbh hit No. 1 in September 2017, it was out of the top 500 by November. It seems a combination of inherent virality via Snapchat, easy user acquisition via Snap Kit and sharp product design has given Yolo some staying power. It still managed 2.2 million downloads last month versus a peak of 5.5 million in its first month back in May 2019.

That June, Yolo quietly raised a $2 million seed round thanks to its sudden success. The team had been grinding since 2017 on a video reactions app called Popshow funded by a small pre-seed round from SV Angel, Shrug Capital and Product Hunt’s Ryan Hoover. They’d previously built music video-making app Mindie that eventually sold to influencer collective Shots Studios. Popshow never caught on, so the team began experimenting on Snap Kit, building a more official Q&A feature for Snapchat than predecessors like Sarahah and Polly. Then, boom. Days after launch, Yolo’s usage exploded.

But to keep users interested, Yolo needed to evolve. That would require more funding for the eight-person team split between Snapchat’s home of Los Angeles and Henrion’s home of Paris.

An honest way to chat

The concept of a social app where users could shift between full anonymity and representation via avatar attracted its $8 million Series A to invest in product and engineering. The round was led by Thrive Capital, Ron Conway’s A.Capital, former TechCrunch editor Alexia Tsotsis’ Dream Machine, Shrug, Day One, Goodwater, Knight VC, ex-Facebooker Bobby Goodlatte, Twitter co-founder Biz Stone and SV Angel’s Brian Pokorny.

That cash fueled the release of Yolo’s new group chat feature. You can set up a chat room, give it a name and generate an invite URL or sticker you can post on Snapchat, just like its previous question feature. Friends or friends of friends that are already in can join the group chat, represented by their Bitmoji instead of their name. Yolo suggests people join the more open “party mode” chats where their friends are active.

What makes this special is that once an hour, users can tap the Yolo Superpowers button to send  a totally anonymous message to the group. More Superpowers are coming, but there’s also an anonymous “Someone has a crush on [name]” message so you can secretly profess your affection to anyone or someone else in the chat.

“The limits of Q&A is that it doesn’t generate real conversation. It’s an ice breaker, but we also want conversations to happen,” Henrion stresses. ” ‘What do you think about this dress?’ The group chat is more about ‘let’s talk about the dress.’ ” The chats could be focused on people you actually know offline, or those you share interests with. The option to restrict group chats to either just your contacts or friends of friends “limits the amount of meeting strangers,” Henrion explains. “This is very different from the public communities like Reddit or the dating apps.”

Can “anonymous” be synonymous with “safe”?

Still, anonymous apps have consistently proven to be havens for cyberbullying and unsafe behavior. Without the accountability of having your name attached, people are free to say awful things. That can be even worse amongst teenagers who might get in trouble for being mean at school but not on an app.

Yolo first focused on messages blocking 10% of overall messages that contained offensive content. That meant blatant hate speech and trolling couldn’t spread through the app. “We’re strict on moderation. When looking at the reviews about bullying, it’s like nothing compared to any other anonymous app. I think we solved 90% of the problem.”

Now it’s working with Snapchat to safeguard the group chats feature. The goal is to ensure Yolo doesn’t actively recommend chat amongst adults to minors and vice-versa. Henrion says this update should roll out soon.

“It’s 2020 and we need to be very responsible” Henrion tells me. “Moderation and growth are the most difficult things to balance. It’s moderation first for sure. We don’t care about growth if it’s not healthy or sustainable.” The new funding also gives Yolo the luxury of pushing back monetization while it focuses on safely adding more users.

By making anonymity more private, Yolo has a chance to sidestep some of the worst elements of human behavior. Making fun of someone has less appeal if there’s no wider audience like trolls exploited in the feeds and comment reels of Secret and YikYak.

That could let the brighter side of anonymity shine through: vulnerability, honesty and deep connections that are enhanced by the absence of embarrassment. With all the change, uncertainty and anxiety that’s part of growing up, teens deserve a place where they can be open with each other and speak their minds. After all, you only live once.