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

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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


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).

How COVID-19 accelerated DoorDash’s business

doordash dasher bicycle delivery person

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.

 

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.”

 

Fintech VC keeps getting later, larger and more expensive

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?”

 

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.”

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

Asheem Chandna

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.”

 

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

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.”

 

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

Concept of knowledge, data and protection. Paper human head with pad lock.

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.

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

light bulb flickering on and off

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?”

 

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

 

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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This is the most precise 3D map of the Milky Way ever made

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Data collected by the European Space Agency’s Gaia observatory has been used to create the most detailed 3D map of the galaxy ever made. The new data set could help scientists unravel many mysteries about the universe’s expansion and the solar system’s future.

What is Gaia? Launched in 2013, the Gaia observatory is intended to observe as many of the galaxy’s stars as possible. It is designed to measure stellar positions, distances, motions, and brightness with more precision than any instrument before, with the goal of cataloguing approximately 1 billion objects. It is designed to observe each object about 70 times or so in order to track their motions and velocities over time, accurate enough to measure the width of a hair from 2,000 kilometers away.

The new map: The latest data pinpoints the location and movements of just under 2 billion stars, with highly accurate measurements of about 300,000 stars within 326 light-years of the solar system. The new map shows us that our solar system’s orbit around the Milky Way is accelerating by seven millimeters every year, bringing it that much closer to the center of the Milky Way over time. 

What could we learn? The point of the mission isn’t simply to get a glimpse of the galaxy’s stars in motion. The data could help astronomers answer a number of different scientific questions, including how the Milky Way was formed over time, where the solar system and other star systems are headed, what the expansion of the universe looks like, and the distribution of regular and dark matter throughout the galaxy. Previous Gaia data sets have been used to ascertain the mass of the Milky Way and how many sun-like stars might be orbited by Earth-light planets.

What’s next: Gaia will be operational until about 2022, but it’s holding up better than expected and could see its mission extend to 2024 or beyond. The final data release should catalogue more than 2 billion objects in the galaxy.

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YouTube introduces new features to address toxic comments

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YouTube today announced it’s launching a new feature that will push commenters to reconsider their hateful and offensive remarks before posting. It will also begin testing a filter that allows creators to avoid having to read some of the hurtful comments on their channel that had been automatically held for review. The new features are meant to address long standing issues with the quality of comments on YouTube’s platform — a problem creators have complained about for years.

The company said it will also soon run a survey aimed at giving equal opportunity to creators, and whose data can help the company to better understand how some creators are more disproportionately impacted by online hate and harassment.

The new commenting feature, rolling out today, is a significant change for YouTube.

The feature appears when users are about to post something offensive in a video’s comments section and warns to “Keep comments respectful.” The message also tells users to check the site’s Community Guidelines if they’re not sure if a comment is appropriate.

The pop-up then nudges users to click the “Edit” button and revise their comment by making “Edit” the more prominent choice on the screen that appears.

The feature will not actually prevent a user from posting their comment, however. If they want to proceed, they can click the “Post Anyway” option instead.

Image Credits: YouTube

The idea to put up roadblocks to give users time to pause and reconsider their words and actions is something several social media platforms are now doing.

For instance, Instagram last year launched a feature that would flag offensive comments before they were posted. It later expanded that to include offensive captions. Without providing data, the company claimed that these “nudges” were helping to reduce online bullying. Meanwhile, Twitter this year began to push users to read the article linked in tweets they were about to share before tweeting their reaction, and it stopped users from being able to retweet with just one click.

These intentional pauses built into the social platforms are designed to stop people from reacting to content with heightened emotion and anger, and instead push users to be more thoughtful in what they say and do. User interface changes like this leverage basic human psychology to work, and may even prove effective in some percentage of cases. But platforms have been hesitant to roll out such tweaks as they can stifle user engagement.

In YouTube’s case, the company tells TechCrunch its systems will learn what’s considered offensive based on what content gets repeatedly flagged by users. Over time, the system should be able to improve as the technology gets better at detection and the system itself is further developed.

Users on Android in the English language will see the new prompts first, starting today, Google says. The rollout will complete over the next couple of days. The company did not offer a timeframe for the feature’s support for other platforms and languages or even a firm commitment that such support would arrive in the future.

In addition, YouTube said it will also now begin testing a feature for creators who use YouTube Studio to manage their channel.

Creators will be able to try out a new filter that will hide the offensive and hurtful comments that have automatically been held for review.

Today, YouTube Studio users can choose to auto-moderate potentially inappropriate comments, which they can then manually review and choose to approve, hide or report. While it’s helpful to have these held, it’s still often difficult for creators to have to deal with these comments at all, as online trolls can be unbelievably cruel. With the filter, creators can avoid these potentially offensive comments entirely.

YouTube says it will also streamline its moderation tools to make the review process easier going forward.

The changes follow a year during which YouTube has been heavily criticized for not doing enough to combat hate speech and misinformation on its platform. The video platform’s “strikes” system for rule violations means that videos may be individually removed but a channel itself can stay online unless it collects enough strikes to be taken down. In practice, that means a YouTube creator could be as violent as calling for government officials to be beheaded and and still continue to use YouTube. (By comparison, that same threat led to an account ban on Twitter.)

YouTube claims it has increased the number of daily hate speech comment removals by 46x since early 2019. And in the last quarter, of the more than 1.8 million channels it terminated for violating our policies, more than 54,000 terminations were for hate speech. That indicates a growing problem with online discourse that likely influenced these new measures. Some would argue the platforms have a responsibility to do even more, but it’s a difficult balance.

In a separate move, YouTube said it’s soon introducing a new survey that will ask creators to voluntarily share with YouTube information about their gender, sexual orientation, race and ethnicity. Using the data collected, YouTube claims it will be able to better examine how content from different communities is treated in search, discovery and monetization systems.

It will also look for possible patterns of hate, harassment, and discrimination that could affect some communities more than others, the company explains. And the survey will give creators to optionally participate in other initiatives that YouTube hosts, like #YouTubeBlack creator gatherings or FanFest, for instance.

This survey will begin in 2021 and was designed in consultation with input from creators and civil and human rights experts. YouTube says the collected data will not be used for advertising purposes, and creators will have the ability to opt-out and delete their information entirely at any time.

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Google’s co-lead of Ethical AI team says she was fired for sending an email

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Timnit Gebru, a leading researcher and voice in the field of ethics and artificial intelligence, says Google fired her for an email she sent to her direct reports.  According to Gebru, Google fired her because of an email she sent to subordinates that the company said reflected “behavior that is inconsistent with the expectations of a Google manager.”

Gebru, the co-leader of Google Ethical Artificial Intelligence team, took to Twitter last night, shortly after the National Labor Relations Board filed a complaint against Google alleging surveillance of employees and unlawful firing of employees.

Gebru says no one explicitly told her she was fired, but that she received an email from one of her boss’s reports, saying:

“Thanks for making your conditions clear. We cannot agree to #1 and #2 as you are requesting. We respect your decision to leave Google as a result, and we are accepting your resignation.”

That email, according to Gebru, went on to say that “certain aspects of the email you sent last night to non-management employees in the brain group reflect behavior that is inconsistent with the expectations of a Google manager.”

It’s not clear what exactly was contained in the email. We’ve reached out to both Gebru and Google for comment.

As Bloomberg reported, Gebru has been outspoken about the lack of diversity in tech as well as the injustices Black people in tech face. According to Bloomberg, Gebru believes Google let her go to signal to other workers that it’s not ok to speak up.

Gebru is a leading voice in the field of ethics and artificial intelligence. In 2018, Gebru collaborated with Joy Buolamwini, founder of the Algorithmic Justice League, to study biases in facial recognition systems. They found high disparities in error rates between lighter males and darker females, which led to the conclusion that those systems didn’t work well for people with darker skin.

Since Gebru’s announcement, she’s received an outpouring of support from those in the tech community.

Developing…

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