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The biggest technology failures of 2020

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This was a year we needed technology to save us. A pandemic raced over the land, there were wildfires, uneasy political divisions, and we gasped in the miasma of social media. In 2020, the ways in which technology can help or hurt never seemed clearer.

In the success column we have covid-19 vaccines. But this article is not about successes. Instead, this is our annual list of the worst technology flops and failures. Our tally for 2020 includes billion-dollar digital business plans that faceplanted, covid tests that bombed, and the unforeseen consequences of wrapping the planet in cheap satellites.

Covid tests

The polymerase chain reaction is not a new technology. In fact, this technique for detecting the presence of specific genes was invented in 1980, and its inventor won a Nobel Prize a decade later. It’s employed in a vast array of diagnostic tests and laboratory research.

Covid test

GETTY

So it counts as a historic screw-up that at the beginning of the covid-19 pandemic, the specialized laboratories of the US Centers for Disease Control and Prevention sent states lab kits with wrong ingredients that didn’t work. So began the failure to stop the pathogen, the sidelining of nation’s top public health agency, and, more broadly, the unexpected inability of the country that invented PCR to get coronavirus tests to everyone who needs one. Widespread and frequent testing is what economists said would be the swiftest, cheapest way to keep the country up and running. Even now, 11 months later, lines and delays are still the testing norm in the US, even as private labs, universities, and health centers run approximately two million tests per day.

Read more:

Stop covid or save the economy? We can do both, MIT Technology Review

The CDC’s failed race against covid-19: A threat underestimated and a test overcomplicated, Washington Post

Unregulated facial recognition

Imagine a grainy video from a convenience store robbery. A shoplifter looks at the camera and presto, police use face recognition to identify a suspect. Now imagine a city—like Portland, Oregon—that decides it has to ban police from doing that.

The ability to match faces is one of the signal triumphs of the new generation of artificial intelligence, and the technique is appearing everywhere. That includes settings where its use can seem intrusive or unfair, like schools or public housing. The result this year: a run of bans and restrictions by cities, states, and companies that could stifle one of the first and most significant results of superhuman AI.

We have a podcast about this.

The reason the technology is accelerating is that cameras are everywhere—and we all handed over our selfies. “We have allowed the beast out of the bag by feeding it billions of faces, and helping it by tagging ourselves,” says Joseph Atick, who built an early face recognition system using special cameras and a custom image database. Now there are hundreds of face recognition programs crunching pictures online. Controlling these systems, says Atick, “is no longer a technological issue.”

Over the summer, Microsoft and Amazon both denied police access to their face-matching systems, at least temporarily, and cities like Portland enacted sweeping bans that also stop hotels and shops from identifying people. What’s still missing is a national framework to guide right and wrong uses.  Instead of a cycle of abuses and bans, we need policy. And in the US, we don’t have it yet.

Listen to more: Attention, Shoppers: You’re Being Tracked, In Machines We Trust podcast

Quibi’s quick collapse

“Quick bites. Big stories.” That was the motto of Quibi, a Hollywood-powered streaming service that set out in April to revolutionize entertainment with 10-minute shows for phone screens.

But the big story ended up being Quibi’s fast demise. Six months after its debut, the company was firing talent and giving what remained of its $1.75 billion budget back to investors.

Quibi founder Jeffrey Katzenberg
Quibi founder Jeffrey Katzenberg
DANIEL BOCZARSKI/GETTY IMAGES FOR QUIBI

The misfire reminded us of journalism’s infamous 2018 “pivot,” in which news sites reassigned reporters en masse to manufacture ultra-short text-on-screen videos before brutally firing everyone. Similarly, Quibi was using well-paid pros to make slick $4.99-a-month subscription content that competed with YouTube, TikTok, and hordes of creators who film cat videos and dance moves for free.

In a farewell letter, studio mogul Jeffrey Katzenberg and Quibi CEO Meg Whitman said their pursuit of a “new category of entertainment” might have been misguided, but they also directed blame at the pandemic, which kept people at home in front of the TV. “Unfortunately, we will never know, but we suspect it’s been a combination of the two,” they wrote. “Our failure was not for lack of trying.”

Read more: Quibi Is Shutting Down Barely Six Months After Going Live, Wall Street Journal

Mystery microwave weapon

Since 2016, several dozen US diplomats and spies in Cuba and China have been hit by a spectrum of painful and strange neurological symptoms. They’ve woken to sharp noises and experienced loss of balance and a feeling of pressure in the face. The most plausible cause of their torment, according to the National Academies of Sciences: a microwave weapon.

US Air Force Research Laboratory THOR
US Air Force Research Laboratory’s THOR
AFRL DIRECTED ENERGY DIRECTORATE

No one can say for sure if a directed beams of pulsed radio energy aimed into diplomats’ homes and hotel rooms are to blame for “Havana syndrome.” The US was slow to recognize and investigate the pattern of injuries and still can’t name a cause with certainty. What is clear is that anyone using a microwave weapon in deliberate attacks has failed to think things through. Other powers, including the US, can also generate powerful, invisible beams to cause headaches, clicking noises inside the skull, nausea, and hearing loss. The clandestine use of such over-the-air technology, the academies said, “raises grave concerns about a world with disinhibited malevolent actors and new tools for causing harm to others.”

Some weapons just shouldn’t be used.

Learn more: “An Assessment of Illness in U.S. Government Employees and Their Families at Overseas Embassies,” The National Academies Standing Committee to Advise the Department of State on Unexplained Health Effects on U.S. Government Employees and Their Families at Overseas Embassies

#zoomdick

Have you ever had a dream where you show up at work or school in your underpants? With Zoom, it’s entirely possible.

During the pandemic, the video app became our new office, our schoolyard, and our way to socialize. With it came the hazard of broadcasting what should remain private. There was the toilet flush as the Supreme Court held oral arguments, and the Mexican senator who changed her top on video without realizing it.

Jeffrey Toobin
Jeffrey Toobin
JOE KOHEN/GETTY IMAGES FOR THE NEW YORKER

Gross-out humor turned to tragedy in the case of prominent CNN and New Yorker legal critic Jeffrey Toobin, who allegedly exposed his genitalia to coworkers as he fumbled between a work Zoom and a pornographic interlude. Many said Toobin deserved to be fired by the New Yorker, citing the #metoo movement (#metoobin became the hashtag). Others sympathized with an all-too-human situation. “There but for better camera work go I,” they seemed to be saying.

Read more: New Yorker Suspends Jeffrey Toobin for Masturbating on Zoom Call, Vice News

Light pollution from satellite megaconstellations

Since prehistory, humankind has looked upwards for awe and inspiration, to imagine what forces created the world—and which might end it.

But now, that cosmic view is being contaminated with the reflections of thousands of inexpensive commercial satellites put aloft by companies like Amazon, OneWeb, and SpaceX, who want to cover the Earth with internet connections. Sixty satellites can swarm out of a single rocket.

Starlink Satellite streaks
Starlink streaks visibly mar this image of the night sky taken by the DeCam DELVE Survey.
CTIO/NOIRLAB/NSF/AURA/DECAM DELVE SURVEY

The problem for astronomers is that sunlight reflects from the satellites, which race by at low altitudes at dawn or hover overhead, perpetually illuminated. Their sheer numbers pose a problem. SpaceX plans to launch 12,000 of its Starlink satellites, while other operators plan 50,000.

Concern is greatest for wide-field optical telescopes sitting atop mountains, whose job includes detecting exoplanets or near-Earth objects that could collide with our planet. Now there’s an after-the-fact attempt to fix the problem. SpaceX tried coloring a satellite black, but it heated up too fast. More recently, the company started equipping satellites with sunshade visors to stop the reflections.

Read more: Satellite mega-constellations risk ruining astronomy forever, MIT Technology Review

Learn More: Impact of Satellite Constellations on Optical Astronomy and Recommendations Toward Mitigations, NSF NOIRLab

The vaccine that make you test positive for HIV

We knew things could go wrong with the rushed vaccine effort against covid-19, but the fate of Australia’s homegrown candidate was still a surprise.  

A team at the University of Queensland and the biotech company CSL developed a promising protein vaccine that seemed to be working well in people. But its main innovation was its downfall: it used two bits of HIV (the virus that causes AIDS) as a “molecular clamp” to help it inside cells. As a result, researchers discovered, volunteers who got the shot were turning up positive on common HIV tests. Those false positives created a chance for confusion and controversy, and conspiracy theorists would be certain to sow doubts over the vaccine.

The Australian team made some heroic efforts to correct the problem, but to no avail. In early December, the government admitted defeat and canceled a $750 million order for 51 million shots, making it the first advanced covid vaccine project to get scrapped. Compare that with the situation in the US, which authorized or approved several treatments against the coronavirus that don’t work, or where evidence is lacking. Sometimes admitting failure is the better course. “This is the scientific process working,” Australia’s health minister said.

Read more: Australian vaccine abandoned over false HIV response, BBC

Cyberpunk 2077

The creators of the most anticipated video game of 2020 promised players a sci-fi dystopia. Instead, they delivered a world broken in all the wrong ways. The immersive universe of Cyberpunk 2077 was beset with problems from day one. Players (in particular, those playing on consoles) encountered a ton of glitches ranging from hilarious to game-breaking. Sony pulled the game from PlayStation stores a week after its release, offering full refunds for anyone who wanted one.

cyberpunk 2077 game image

CD PROJEKT RED

The reviews of the game aren’t bad—some are even positive. And even in a virtual world, everyone makes do. The bugs and glitches that make the game unplayable are now part of the fun: try riding a motorcycle by standing on it pantless, or teleporting at random when you jump in a car.

Read more: Cyberpunk 2077 Was Supposed to Be the Biggest Video Game of the Year. What Happened? New York Times

Hydroxychloroquine, the covid drug that never worked

You knew things were getting strange when Rudolph Giuliani tweeted, late-night infomercial style, that a malaria drug called hydroxychloroquine was “100% effective” against covid-19.

Indeed, a chorus of right-wing figures—cartoonist Scott Adams, Fox News hosts, and flag-bearing avatars on social media—were all convinced the cure had been found.

Early on, in March, the old and plentiful drug did make the list of possible covid-19 treatments. But studies quickly showed it didn’t actually help. By then, though, what the studies said didn’t matter. That’s because the drug was promoted (and even taken) by Donald Trump, who—as Politico wrote—sought a silver bullet for the political problems caused by the pandemic. What he called “the hydroxy” was going to be that bullet. “A lot of good things have come out about the hydroxy, a lot of good things. You’d be surprised how many people are taking it,” Trump said.

At first the pressure to declare a cure paid off. The US Food and Drug Administrations authorized the drug’s use, and the federal government ordered pallets full. But as the nonexistent evidence was replaced by the results of clinical trials (which found no benefit and even some heart risk), covid’s fakest drug faded from view. Giuliani’s tweet was removed by Twitter. The FBI arrested a doctor selling $3,995 “survival packs” that included the drug. Trump, when he eventually fell ill with covid-19, received every treatment his doctors thought might help.

That did not include hydroxychloroquine.

Read more: The Strange and Twisted Tale of Hydroxychloroquine, Wired

Abby Ohlheiser contributed reporting and analysis.

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

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Investors still love software more than life

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Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Despite some recent market volatility, the valuations that software companies have generally been able to command in recent quarters have been impressive. On Friday, we took a look into why that was the case, and where the valuations could be a bit more bubbly than others. Per a report written by few Battery Ventures investors, it stands to reason that the middle of the SaaS market could be where valuation inflation is at its peak.

Something to keep in mind if your startup’s growth rate is ticking lower. But today, instead of being an enormous bummer and making you worry, I have come with some historically notable data to show you how good modern software startups and their larger brethren have it today.

In case you are not 100% infatuated with tables, let me save you some time. In the upper right we can see that SaaS companies today that are growing at less than 10% yearly are trading for an average of 6.9x their next 12 months’ revenue.

Back in 2011, SaaS companies that were growing at 40% or more were trading at 6.0x their next 12 month’s revenue. Climate change, but for software valuations.

One more note from my chat with Battery. Its investor Brandon Gleklen riffed with The Exchange on the definition of ARR and its nuances in the modern market. As more SaaS companies swap traditional software-as-a-service pricing for its consumption-based equivalent, he declined to quibble on definitions of ARR, instead arguing that all that matters in software revenues is whether they are being retained and growing over the long term. This brings us to our next topic.

Consumption v. SaaS pricing

I’ve taken a number of earnings calls in the last few weeks with public software companies. One theme that’s come up time and again has been consumption pricing versus more traditional SaaS pricing. There is some data showing that consumption-priced software companies are trading at higher multiples than traditionally priced software companies, thanks to better-than-average retention numbers.

But there is more to the story than just that. Chatting with Fastly CEO Joshua Bixby after his company’s earnings report, we picked up an interesting and important market distinction between where consumption may be more attractive and where it may not be. Per Bixby, Fastly is seeing larger customers prefer consumption-based pricing because they can afford variability and prefer to have their bills tied more closely to revenue. Smaller customers, however, Bixby said, prefer SaaS billing because it has rock-solid predictability.

I brought the argument to Open View Partners Kyle Poyar, a venture denizen who has been writing on this topic for TechCrunch in recent weeks. He noted that in some cases the opposite can be true, that variably priced offerings can appeal to smaller companies because their developers can often test the product without making a large commitment.

So, perhaps we’re seeing the software market favoring SaaS pricing among smaller customers when they are certain of their need, and choosing consumption pricing when they want to experiment first. And larger companies, when their spend is tied to equivalent revenue changes, bias toward consumption pricing as well.

Evolution in SaaS pricing will be slow, and never complete. But folks really are thinking about it. Appian CEO Matt Calkins has a general pricing thesis that price should “hover” under value delivered. Asked about the consumption-versus-SaaS topic, he was a bit coy, but did note that he was not “entirely happy” with how pricing is executed today. He wants pricing that is a “better proxy for customer value,” though he declined to share much more.

If you aren’t thinking about this conversation and you run a startup, what’s up with that? More to come on this topic, including notes from an interview with the CEO of BigCommerce, who is betting on SaaS over the more consumption-driven Shopify.

Next Insurance, and its changing market

Next Insurance bought another company this week. This time it was AP Intego, which will bring integration into various payroll providers for the digital-first SMB insurance provider. Next Insurance should be familiar because TechCrunch has written about its growth a few times. The company doubled its premium run rate to $200 million in 2020, for example.

The AP Intego deal brings $185.1 million of active premium to Next Insurance, which means that the neo-insurance provider has grown sharply thus far in 2021, even without counting its organic expansion. But while the Next Insurance deal and the impending Hippo SPAC are neat notes from a hot private sector, insurtech has shed some of its public-market heat.

Stocks of public neo-insurance companies like Root, Lemonade and MetroMile have lost quite a lot of value in recent weeks. So, the exit landscape for companies like Next and Hippo — yet-private insurtech startups with lots of capital backing their rapid premium growth — is changing for the worse.

Hippo decided it will debut via a SPAC. But I doubt that Next Insurance will pursue a rapid ramp to the public markets until things smooth out. Not that it needs to go public quickly; it raised a quarter billion back in September of last year.

Various and Sundry

What else? Sisense, a $100 million ARR club member, hired a new CFO. So we expect them to go public inside the next four or five quarters.

And the following chart, which is via Deena Shakir of Lux Capital, via Nasdaq, via SPAC Alpha:

Alex

 

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The Product Manager asterisk

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Product manager might be one of the most grey roles within a startup. However, as a company progresses and the team grows, there comes a time when a founder needs to carve out dedicated roles. Of these positions, product management might be one of the most elusive — and key — roles to fill.

Ken Norton, who recently left his job as director of product at Figma to consult rising PMs, thinks it’s easier to start with defining what they aren’t: the CEO of the product.

“Product managers need to realize that there is a lot of janitorial work that gets done in product management,” he said. “It’s not fun or glamorous, and it’s certainly not being the CEO of the product. It’s just stuff that needs to get done.” I wrote up a guide on how and when to hire your first product manager that expands on some of these insights, including how focus might be the biggest trait to interview for:

Hiring continues to be one of the hardest parts of building a startup, and those early employees can define the trajectory, culture and eventual success of it. Even during TC Sessions: Justice this past week, Precursor’s Sydney Thomas explained how startups need to make “pretty final decisions, pretty early on in what type of company you want to build.”

It’s a slight asterisk to the common narrative of how startups pivot every other day. It’s not that simple, and I’ll probably remind you of that every other week, dear Startups Weekly readers.

The rest of today’s newsletter will include notes on a hot up-and-coming edtech IPO, an exit that includes Jay-Z, and the latest in agricultural tech robots. Also, remember you can always find me on Twitter @nmasc_ or e-mail me at natasha.m@techcrunch.com.

The public markets get educated

It’s been yet another busy week for the public markets. I published a scoop earlier this week that Coursera is filing to go public soon, which would be one of the first debuts that will let us see how an education company’s finances changed, and accelerated, amid the pandemic’s impact on remote learning.

Here’s what to know: Like clockwork, Coursera’s S-1 dropped late Friday, giving us the first glance of the numbers behind the business. The startup tried to pain a picture of a path of profitability, with rising revenues as well as rising net losses. We get into the meat of it here. 

Image Credits: Fotograzia / Getty Images

What’s better than one billionaire? Two 

One of the biggest headlines of this past week was Square buying a majority stake of Tidal. A fintech and music collaboration might not seem that obvious, but the music economy remains one of the most under-tapped (and under-innovated) opportunities that remains out there.

Here’s what to know: Square CEO Jack Dorsey used his other company, Twitter, to share more information about the $297 million deal. As part of this transaction, Tidal owner Jay-Z got a board seat with Square, triggering conversations about the future of musical NFTs. The deal also officially confirmed that Jay-Z isn’t just a businessman, he’s a business, man.

Singer Jay-Z performs before US President Barack Obama speaks at a campaign rally in Columbus, Ohio, on November 5, 2012. After a grueling 18-month battle, the final US campaign day arrived Monday for Obama and Republican rival Mitt Romney, two men on a collision course for the world’s top job. The candidates have attended hundreds of rallies, fundraisers and town halls, spent literally billions on attack ads, ground games, and get out the vote efforts, and squared off in three intense debates. AFP PHOTO/Jewel Samad (Photo credit should read JEWEL SAMAD/AFP/Getty Images)

Decentralized insect farming, anyone?

In this week’s Equity Wednesday episode, we brought on TC’s climate tech editor, Jonathan Shieber, to talk about the opportunities within agtech right now. We covered a lot within the 20-minute episode: from $100 million for mealworms, farm-to-grill robots and decentralized insect farming.

Here’s what to know: Farms have always had a compelling reason to turn to robotics to make tedious work much, much easier. We got into two different businesses and their approaches on how to serve farm robots, from SaaS leases to selling the robots one by one.

Image Credits: Fernando Trabanco Fotografía / Getty Images

Around TechCrunch

Thanks to all of you who tuned into TC Sessions: Justice this past week, it was so fun to hang — and make sure to give virtual kudos to my colleague, and showrunner, Megan Rose Dickey.

Next up is TechCrunch Early Stage, our yearly event that is all about tactical advice to help new and first-time founders navigate the Wild West world that is venture capital and startups. We just announced the judges of the pitch-off competition, and have already landed top-tier venture capitalists to share what you won’t find on Twitter: behind the scenes startup advice that is beyond 180 characters.

It’s the bootcamp you always wished you could attend, so get your tickets here.

Across the week

Seen on Extra Crunch

Understanding how investors value growth in 2021

Dear Sophie: Can you demystify the H-1B process and E-3 premium processing

11 words and phrases to cut from your VC pitch deck

Making sense of the $6.5B Okta-Auth0 deal

Seen on TechCrunch

SoftBank makes mountains of cash off of human laziness

Mary Meeker’s Bond has closed its second fund with $2 billion

The technology selloff is getting to be somewhat material

What China’s Big Tech CEOs propose at the annual parliament meeting

And finally…

I wanted to end by using this platform to address the rise of anti-Asian violence across our country. Conversations around how to be a more inclusive and anti-racist society need to be more loud, and more collaborative in order for change to actually happen. Intention around inclusion will impact the world we live in, the startups we create and the success of our collective. Here are some resources to donate, petition and learn.

Thanks,

N

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Tens of thousands of US organizations hit in ongoing Microsoft Exchange hack

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A stylized skull and crossbones made out of ones and zeroes.

Enlarge (credit: Getty Images)

Tens of thousands of US-based organizations are running Microsoft Exchange servers that have been backdoored by threat actors who are stealing administrator passwords and exploiting critical vulnerabilities in the email and calendaring application, it was widely reported. Microsoft issued emergency patches on Tuesday, but they do nothing to disinfect systems that are already compromised.

KrebsOnSecurity was the first to report the mass hack. Citing multiple unnamed people, reporter Brian Krebs put the number of compromised US organizations at at least 30,000. Worldwide, Krebs said there were at least 100,000 hacked organizations. Other news outlets, also citing unnamed sources, quickly followed with posts reporting the hack had hit tens of thousands of organizations in the US.

Assume compromise

“This is the real deal,” Chris Krebs, the former head of the Cybersecurity and Infrastructure Security Agency, said on Twitter, referring to the attacks on on-premisis Exchange, which is also known as Outlook Web Access. “If your organization runs an OWA server exposed to the internet, assume compromise between 02/26-03/03.” His comments accompanied a Tweet on Thursday from Jake Sullivan, the White House national security advisor to President Biden.

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