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Lightspeed’s COO David Baga leaving to join pay advance startup Even as CEO

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David Baga is going to be getting a new paycheck, which is fitting all things considered.

Even, an “on-demand pay” startup that ‘evens’ out paychecks for workers to give them financial stability and flexibility, will announce later this morning that Baga is joining the company as its new CEO effective March 1, replacing co-founder and current CEO Jon Schlossberg. Schlossberg will remain full-time at the company as executive chairman.

Baga was most recently at Lightspeed Venture Partners, the prominent VC firm which he joined in late 2019 as chief operating officer. Prior to Lightspeed, Baga was chief business officer at Lyft and chief revenue officer at RocketLawyer.

Even was founded in 2014 by Schlossberg and a coterie of other co-founders focused on a mission of disrupting the payday loan industry with better tools for workers who increasingly live paycheck-to-paycheck. Workers who get dropped from a shift, for instance, often have to scramble to meet their upcoming financial obligations, forcing them to take usurious payday loans. Even’s product was designed to give workers better visibility and more control over their paycheck, offering tools like Instapay that offers an advance on their already earned wages. Notably, Even works on a subscription model that is designed to align its incentives with its worker-users to avoid the predatory practices that plague the industry.

I last covered the company in 2018 when it raised a $40 million Series B from Keith Rabois, who was then at Khosla Ventures. Even has had significant traction, reaching 650,000 members today according to the company, and most notably, it has an extensive partnership with Walmart, which just this week announced it was raising wages for 425,000 of its in-store associates, or roughly a third of its workforce. Even said that 53% of its members use the product daily.

Schlossberg says that while the company has had significant success in building out a high-quality product, it needs to pivot to a greater focus on revenue growth. “I am a very product-minded CEO and what we needed in the zero-to-one phase,” he said, referencing the concept of reaching product-market fit. But, “I am not an enterprise-growth CEO. This opportunity and problem deserves someone who can massively increase the probability of making [Even] as ubiquitous as 401Ks.”

He said that the company began searching for a COO to add enterprise sales experience to the executive team, but came up empty-handed. “So we offered the top job to get better candidates, and it did and we found David,” he said.

For Baga, the Even story fits in with his own background. I “grew up around a lot of blue-collar, first-generation Canadians — I can relate to Even in a lot of [ways],” he said. He migrated down to the Valley during the dot-com bubble, taking on a variety of sales jobs at companies like Oracle. His first startup experience was at RocketLawyer when it was just 20 people. “RocketLawyer was about making legal services affordable to all Americans,” a mission that resonated with Baga.

David Baga will join Even as CEO on March 1. Photo via Even.

From there, he said he eventually linked up with Logan Green and John Zimmer in 2012 when they were still operating Zimride, and would eventually join the rebranded company Lyft in 2015 when it was “thinking about a B2B version with large businesses.” He worked on enterprise and urban partnerships as well as Lyft Health, a rideshare product designed for non-emergency medical transportation.

Baga says that he wanted to stay at smaller orgs, and so as Lyft went public and grew to gargantuan size, he wanted to reset to a smaller company. He eventually landed at Lightspeed as the firm’s COO.

Baga demurred during our call to describe his time at Lightspeed or his reasoning for departing after a year and a half. Notably, Even is not a Lightspeed portfolio company. Instead, he connected with Schlossberg as Even was accelerating its CEO search and found that there was “strong values alignment” and that “they are addressing real pain points … but with a fair business model.”

In an email later, Baga stated that “It has been a privilege to work with Lightspeed Ventures and I will always be grateful for the opportunity to be a part of such a fantastic organization. At Lightspeed, I had a front row seat to entrepreneurs sharing their vision to change the world. They inspired me to heed the call to build again.”

Taking the reins on March 1, Baga said that his top priorities are to “help the team to get to know me, to understand the customers and our prospects, and to understand the product roadmap and strategy.” Schlossberg said that Even already has “a roster of pretty marquee referenceable customers across verticals of employment” and that “now is the time to scale it.” As Baga transitions into the role, Schlossberg said that the company is likely to raise a Series C round “sometime this year.”

Precarity isn’t going away in America anytime soon, yet as the last year has shown, there are tools that can help more workers find resilience in the labor they do. Even’s hope is that a well-built machine to improve pay can be rapidly expanded to make a difference in this economy.

Updated February 22, 2021 to make clear that Instapay provides access to already-earned wages, not a pay advance on future earnings.

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Sequoia Capital India’s Surge invests $2M in sales engagement platform Outplay

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A Zoom screenshot showing members of Outplay's team on a video call

Outplay’s team members on a video call

Sales engagement platforms (SEP) help sales teams automate and track the large number of tasks they need to do each day as they contact leads and hone in on potential deals. Focused on small-to-medium-sized companies, SEP startup Outplay announced today it has raised $2 million from Sequoia Capital India’s Surge program for early-stage startups.

Outplay was founded in January 2020 by brothers Ram and Laxman Papineni and now counts more than 300 clients. Before launching Outplay, the Papineni brothers built AppVirality, a referall marketing tool for app developers.

Laxman told TechCrunch that Outplay’s customers come from sectors like IT, computer software, marketing and advertising and recruiting, and most are based in North America and Europe.

Outplay is designed for teams that use multiple channels to reach potential customers, including phone calls, text messages, email, live chats on websites, and social media platforms like LinkedIn or Twitter. It integrates with customer relationship management platforms like Salesforce and Pipedrive, giving sales people a new interface that includes productivity and automation tools to cut the time they spend on administrative tasks.

Screenshots of Outplay's sales engagement platform for automating sales tasks

Outplay’s platform

For example, Outplay can be used create sequences that send initial messages through different platforms, and then automatically follows up with new messages if there isn’t a reply within a pre-set time frame. Outplay also provides analytics to help sales people track how well sales campaigns are working.

Two of Outplay’s biggest competitors are Outreach and SalesLoft, both of which hit unicorn status in recent funding rounds. Laxman said Outplay is focused on ease of use, with other differentiators including more integrations with CRMs and other software, and a strong customer support team.

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Daily Crunch: Microsoft unveils Mesh for AR/VR meetings

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Microsoft shows off a new AR/VR meeting platform, Uber spins out a robotics startup and Compass files to go public. This is your Daily Crunch for March 2, 2021.

The big story: Microsoft unveils Mesh for AR/VR meetings

Mesh is a platform that allows for shared meetings between Microsoft’s HoloLens (augmented reality) and Windows Mixed Reality (virtual reality). Lucas Matney describes it as “pretty standard faire” for spatial computing, but noted that this will also serve as a platform for developers to build their own applications.

This is just one of a long list of announcements that Microsoft made as part of its virtual Ignite conference this week. It’s also updating Teams with new presentation features; introducing a new open-source, low-code language; launching a new NoSQL database offering called Azure Managed Instance for Apache Cassandra; announcing a hardware and software platform called Azure Precept and more.

The tech giants

Uber spins out delivery robot startup as Serve Robotics — Postmates X, the robotics division of the on-demand delivery startup that Uber acquired last year, has officially spun out as an independent company called Serve Robotics.

Amazon issues rare apology in India over drama series — The series, called “Tandav,” has faced criticism over its depiction of Hindu gods and goddesses.

Apple releases results from hearing health study — Hearing loss is an issue Apple has looked to tackle, due in no small part to its growing involvement in the headphone category.

Startups, funding and venture capital

Compass files S-1, reveals $3.7B in revenue on net loss of $270M — Compass is not profitable, but it did see a massive surge in revenue over the past few years.

Vestiaire Collective raises $216M for its second-hand fashion platform — It’s a complicated industry, since you don’t want to buy a damaged item or a cheap knockoff.

Instacart raises $265M at a $39B valuation — What’s behind the massive increase in the value investors are willing to ascribe to the business? Put simply, the pandemic.

Advice and analysis from Extra Crunch

Six tips for SaaS founders who don’t want VC money — JotForm’s Aytekin Tank argues that bootstrapping is a saner, more sustainable way to build and scale a business.

Oscar Health raises IPO price as Coupang releases bullish debut valuation — IPO season is hot and investors are bothered.

Kaltura files to go public on the back of accelerating revenue growth, rising losses — The company’s revenue growth has accelerated yearly since at least 2018, and its final quarter of 2020 placed the company at a new growth rate maximum.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

MIT’s insect-sized drones are built to survive collisions — If you’re going to build something this small, you need to ensure that it doesn’t break down the first time it comes into contact with something.

Volvo to sell only all-electric vehicles by 2030 — This is part of a broader transformation of the automaker that will include shifting sales online.

Attend TechCrunch’s free virtual Miami meetup on March 11 — Even though we can’t be there physically right now, it’ll sure feel like we are.

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 3pm Pacific, you can subscribe here.

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Facebook can save itself by becoming a B Corporation

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As Facebook confronts outrage among its employees and the public for mishandling multiple decisions about its role in shaping public discourse, it is becoming clear that it cannot solve its conundrums without a major change in its business model. And a new model is readily available: for-benefit status.

For decades, a misguided ideology has warped companies, economies and societies: that the sole purpose of corporations is to maximize short-term returns to one set of stakeholders — those who have bought shares. Neither law nor history requires this to be true.

But shareholder value-maximization ideology has become cemented in far too much corporate practice at the expense of societal well-being. This is manifested in many ways: a slavish adherence to the judgment of the “market,” even when other social signals are more powerful; executives enriched by stock options; companies fearful of “activist investors” who attack whenever stock prices fail to meet quarterly “expectations” and often-frivolous shareholder lawsuits pushing for stock gains at all costs.

The pandemic, however, has accelerated an already-spreading recognition that shareholder value maximization is often a harmful choice — not by any means a moral imperative or even a fiduciary responsibility.

Major institutions of capitalism are converging on a new vision for it. The 2019 Business Roundtable CEO statement said that corporate strategy should benefit all stakeholders – including shareholders, yes, but equally customers, employees, suppliers, and the communities in which companies operate. BlackRock CEO Larry Fink’s recent annual letters assert new views of how that investment company, the world’s largest, should invest the trillions it oversees.

Fink’s 2019 letter spelled out a new vision for corporate purpose; the subsequent 2020 and 2021 letters focused on business’ responsibility around climate change, particularly in light of the pandemic. The B Corporation and conscious capitalism movements are growing. The World Economic Forum is championing a “Fourth Sector,” combining purpose with profit. Business schools, facing student rebellions against a purely profit-maximizing curriculum, are rapidly changing what they teach.

And with society under siege, many more businesses, including social media, are scrambling to seem like good corporate citizens. They have no choice.

Facebook, for example, has doubled down on philanthropy and new efforts to combat misinformation, even as usage and share price soar. Platforms like WhatsApp (owned by Facebook) have become essential services to connect people whose physical ties have been abruptly severed during the global pandemic. Shelter-in-place has become, in many ways, shelter-in-Facebook-properties.

But Facebook and its brethren remain fragile. Since the 2016 presidential election in the U.S., Facebook has faced governmental hearings and regulation, public uproar (#deleteFacebook), and huge fines for invading privacy and undermining democracy. These calls were amplified in the weeks following the January 6 Capitol riot. Separately, it faces allegations of bias, largely (though not entirely) from the political right. These have led to calls for the revocation or reform of Section 230 of the Communications Decency Act, which grants it immunity from the actions of its users.

A giant company that is simultaneously essential and pilloried is vulnerable. Just ask the ghosts of John D. Rockefeller and his fellow robber barons, whose huge monopolies industrialized America more than 100 years ago. Journalistic muckrakers and public outrage targeted them for their abusive practices until the government finally broke up their companies via antitrust legislation.

Because Mark Zuckerberg maintains complete majority control of Facebook, he could unilaterally quell public opprobrium and fend off heavy-handed regulation singlehandedly by transforming Facebook into a new kind of business: a for-benefit corporation.

Under the Public Benefit Corporation legal model, firms bind themselves to a public benefit mission statement and carry out required ongoing reporting on both the standard financials and on how the company is living up to its mission. That status protects the company against profit-demanding shareholder lawsuits, and also attracts employees and investors who want to combine profit with purpose.

Data.world is one of the thousands of certified B Corporations that have seen good returns on financial metrics. Allbirds, for example, launched in a few sustainable materials using a pro-sustainability process to manufacture comfortable shoes, quickly reaching revenues of $100 million and valuation of $1.7 billion in an industry fraught with sustainability and human rights concerns. Other household names that are B Corps include The Body ShopCourseraDanone, the Jamie Oliver GroupKing Arthur FlourNumi Tea and Patagonia.

Many companies that have not undergone formal B Certification from B Labs have nonetheless done well while transforming their business practices, such as the carpet and flooring company Interface. Some firms incorporate ESG principles into their management systems – the $24 billion (market cap) Dutch life sciences company DSM has for years had meaningful sustainability targets for its senior management that account for fully 50 percent of their annual bonuses. Both Interface and DSM attribute much of their commercial success to their attention to non-financial considerations.

A for-benefit Facebook could similarly relate to the world differently, avoiding many of the reputational shocks and regulatory responses that have led to huge stock dips and enormous fines. Its operations would align with Zuckerberg’s proclaimed purpose to enable the potential abundance that results from connecting everyone in the world.

Imagine a Facebook town hall as a true public square, not just another way to gather and sell people’s data without their explicit consent. Imagine a Facebook that put its users first and its advertisers second; that revealed where ads came from; that earned your attention in a way that you controlled rather than through machine-driven algorithms maximizing your attention for good or ill. Such a for-benefit Facebook could create true buy-in and transparency with its massive community around the world.

Of course, such steps as Facebook’s new Oversight Board, which may provide some meaningful review, don’t require a legal change. But if shareholders and employees continue to be rewarded primarily by the success of the problematic ad revenue model, a continuing conflict between private gain and public benefit makes it impossible to have confidence about what is happening behind the scenes. A shift to for-benefit incorporation and appropriate certification brings with it different performance metrics and accountability systems with public scores.

In changing Facebook into a for-benefit corporation, Zuckerberg could insulate himself against presidential rage while rehabilitating his reputation — and his company’s. It would likely create vast ripples both in Silicon Valley and beyond — and it might help transform capitalism itself.

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