During this week’s roundtable, we had our guests Roz Lemieux, Senior Director, Blackbaud Labs, and Rachel Hutchisson, VP, Corporate Citizenship & Philanthropy, and Chair, Senior Women’s...

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Sramana Mitra: What was the trajectory of that group of e-commerce sites? Did you raise money? Did you bootstrap? Anders Ankarlid: This was very early on. This was pre-Facebook in Scandinavia. Most...

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This is it, startup founders. Today, October 18, is the last day and your final opportunity to be chosen as a TC Top Pick, to score a free Startup Alley Exhibitor Package and to shine a bright spotlight on your company at Disrupt Berlin 2019 on 11-12 December.

You have only a few hours left to beat today’s 12 p.m. (PT) deadline. It’s quick, it’s painless and it’s free. What are you waiting for? Apply to be a TC Top Pick while you still can.

Every early-stage startup needs exposure to survive and thrive. Exposure to potential customers, to accredited media and to investors with the backing to make dreams come true. Our TC Top Picks provides exposure to possibility.

If your startup falls into one of the categories listed below, we want you. TechCrunch editors will vet the applications and choose up to five startups that represent the best of each category: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.

If you earn a TC Top Pick designation, you receive a free Startup Alley Exhibitor Package and a VIP experience. Your package includes one full day exhibiting in Startup Alley (the Disrupt expo floor), three Founder passes, press lists and invitations to networking parties, to name just a few perks.

Our Top Picks cohort generates a lot of curiosity, and Disrupt attendees flock to Startup Alley to meet and greet. It’s networking nirvana, where you can connect with potential customers, investors, mentors, collaborators — think infinite opportunity.

And yet another great opportunity awaits. TechCrunch editors interview each Top Pick startup live on the Showcase Stage. While we promote the interview video across our social media platforms, you can use it to drive traffic to your website and as a long-term marketing tool for pitching investors and customers.

And then there’s the Wild Card. TechCrunch editors will pick one early-stage startup exhibiting in the Alley to be the Wild Card, and that startup will compete in Startup Battlefield, our epic pitch competition. It’s a chance to win even more investor and media love along with the $50,000 prize. Last year, Legacy earned the Wild Card slot, and then went on to win the Startup Battlefield competition.

Disrupt Berlin 2019 takes place on 11-12 December. So much opportunity, so little time left to take advantage of it. The TC Top Picks opportunity is free, and the benefits are priceless. Don’t miss your chance — apply to be a TC Top Pick before 12 p.m. (PT) today, 18 October.

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

French startup MadBox is raising a $16.5 million (€15 million) Series A funding round from Alven. The company is developing mobile games and handles everything from start to finish, from game design to publishing and user acquisition.

MadBox is a young player in the mobile game space. The company is the result of the merger of two tiny Paris-based game studios in July 2018. After a couple of months, the startup released its first game, Dash Valley. And the game quickly ended up trending in the top 50 of top free game downloads in the App Store in the U.S.

The company has released a handful of games since then. At some point, MadBox had three games in the top 10 charts in the U.S. (once again, free game downloads) — StickMan Hook, Sausage Flip and Idle Ball Race. Overall, MadBox has generated 100 million game downloads.

“The core method at MadBox is that we internalize everything,” co-founder and CEO Jean-Nicolas Vernin told me. “We try to automate as many thing as possible.”

In addition to reusing assets from one game to another, MadBox also tries to apply the same method when it comes to user acquisition and marketing. “People often tell us that we have a data-driven culture that is disproportionately developed in our company,” Vernin said.

MadBox has a careful approach when it comes to growth. The company hires slowly and doesn’t release dozens of games in a year.

With 30 to 40 employees and a business model mostly based on ads, the company is currently profitable. MadBox now wants to tackle a wider range of mobile games, from hyper casual to idle games and less casual games. The startup is also opening a second office in Barcelona.

“We are a generation of friends who have worked for well-known casual game studios. And we all think that big game productions will have to become simpler so that people can play them like casual games — and vice versa,” Vernin said. And MadBox wants to be there when these two worlds collide.

Safaricom’s Nairobi-based Alpha innovation incubator may have an uncertain future, according to sources.

With two high-level departures, and the passing of Safaricom’s CEO Bob Collymore, there are questions on how or if Alpha will continue to operate.

The space was established in 2017 to spur new product development for Safaricom, which is Kenya’s largest mobile operator and the provider of M-Pesa — East Africa’s most used mobile-money product.

As TechCrunch reported, one of the first objectives of Alpha was to build upon the success of M-Pesa.

As a telco, Safaricom has 69% of the Kenya’s mobile subscribers and generates around one-fourth ($531 million) of its ≈ $2.2 billion annual revenues (2018) from M-Pesa. The fintech product has 20.5 million customers across a network of 176,000 agents.

While these stats have put Safaricom in a coveted position, the company’s former CEO Bob Collymore expressed concerns over the risk of too many eggs in one basket. For years, Collymore pressed his company to diversify product and revenue streams.

Through in-house development and partnerships, Safaricom added to its mobile and fintech network consumer and small business-based products, such as ride-hail app Little and website services.

In 2017, Safaricom’s chief innovation officer and first head of Alpha, Kamal Bhattacharya, echoed Collymore’s mission to diversify the company’s offerings.

“We’d actually like to move beyond M-Pesa by leveraging its power as a social network to connect people to other product solutions,” he told TechCrunch.

Bhattacharya — who’d come to Safaricom after senior positions at IBM Research Africa and a stint restructuring Kenyan innovation center iHub — recruited a team for Alpha, led by founder and computer scientist Shikoh Gitau.

From a market perspective, Alpha was something to watch, as corporate incubators in Africa were (and continue to be) a relatively new component across the continent’s tech ecosystem.

In a space purposely established away from Safaricom’s HQ, Alpha’s team of innovators set to shaping new digital offerings.

In 2018, the incubator rolled out its first product, a social networking platform called Bonga, to augment M-Pesa.

Because M-Pesa was already established as a commercial network, the idea was to amplify that by creating more social media-type transactions around it — channeling Facebook, YouTube, iTunes, PayPal and eBay in one platform.

With Bonga, Alpha appeared to have some momentum into 2018, before the innovation incubator lost two of its biggest backers.

First, Kamal Bhattacharya exited Safaricom and his position of lead of Alpha in October 2018. The reason given by the company was a bit of corporate say-nothing-speak: “leaving to pursue other interests.”

The real reasons for Bhattacharya’s sudden exit were unclear. There was, however, plenty of scuttlebutt about powers within Safaricom — resistant to the brand of bureaucracy rattling change Alpha could bring — conspiring to push him out.

After losing its head, Alpha lost another key ally in Bob Collymore when he passed away in July of this year after a fight with cancer.

Alpha said farewell to another senior figure in August when Huston Malande left. It also rebranded Bonga to Zwuup this year — though Safaricom’s last two annual reports don’t indicate how the product has fared under either name, with no mention of Bonga, Zwuup or Alpha.

What’s next for Alpha?

Several sources close to Safaricom (speaking on background) expressed doubt that it would have the support within the company to continue after Collymore’s passing.

One source suggested Alpha would more likely be morphed into the larger Safaricom bureaucracy rather than shut down completely, to avoid negative news that an abrupt closure would bring.

TechCrunch asked Safaricom directly on the future of Alpha, and specifically if it would confirm or deny reports the innovation incubator could shut down. A Safaricom spokesperson said it could not comment on anything related to Alpha’s products or performance before Safaricom’s next earnings reporting, scheduled for November 1.

So Kenya’s tech community will have to wait a couple more weeks to see if Safaricom sticks to its experiment to spur inside innovation by creating an outside incubator — or not.

Airbnb may be another overvalued “unicorn,” but it’s no WeWork.

The Information this morning reported new Airbnb financials — indicating a massive increase in operating losses — that immediately call Airbnb’s future into question. Precisely, Airbnb lost $306 million on operations on $839 million in revenue, namely as a result of marketing spend, in the first quarter of 2019. In total, Airbnb invested $367 million in sales and marketing, representing a 58% increase year-over-year, in Q1. The company is gearing up for a major liquidity event next year and is making a concerted effort to rake in new customers, as any soon-to-be-public business would.

Given WeWork’s sudden demise, coupled with Uber and Lyft’s lukewarm performances on the stock markets, many have wondered how Wall Street will respond to Airbnb’s eventual IPO prospectus. Will money managers have an appetite for another over-valued Silicon Valley darling? Or will the market compete like mad for shares in the massive home-sharing marketplace?

But Airbnb, again, is no WeWork, and I wager Wall Street will have a much friendlier approach to its offering. For one, Airbnb’s co-founder and chief executive officer Brian Chesky isn’t dropping $60 million on private jets — I don’t think. CEO behaviors aside, Airbnb has more capital in the bank than it has raised in its entire 11-year history, which is a whole lot of money. This is all according to a source who is familiar with Airbnb’s financials and shared this detail with TechCrunch following The Information’s Thursday morning report. As for Airbnb, the company told TechCrunch, “we can’t comment on the figures, but 2019 is a big investment year in support of our hosts and guests.”

Airbnb has attracted more than $3.5 billion in equity funding at a $31 billion valuation and has even more locked away in its bank account. Additionally, Airbnb has an untouched $1 billion credit line, the source said. Presumably, the referenced credit line is the 2016 $1 billion debt financing from JPMorgan, CitiGroup, Morgan Stanley and others.

Moreover, Airbnb has been “cumulatively” free cash flow positive for some time, meaning that it’s seen more money coming in than going out during recent quarters, according to our source. It has been reported that Airbnb surpassed $1 billion in revenue in the second quarter of 2019 and in the third quarter of 2018, but we’re guessing the business did not top $1 billion in Q4 of 2018 or Q1 of 2019 because it if had, that information would probably have been “leaked.”

Finally, Airbnb has been profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis for two consecutive years, the company announced in January. Gross bookings, meanwhile, are growing, as is Airbnb’s business offering and its experiences product.

Why does any of this matter, you ask?

Welcome to this edition of The Operators, a recurring Extra Crunch column produced by insiders with executive experience at companies like AirBnB, Brex, Dropbox, Facebook, Google, Lyft, Slack, Square, Twitter, and Uber, sharing their stories and insights. It’s made for founders who are navigating domains outside their expertise, covering topics they may be learning for the first time like enterprise sales, product management, and finance/accounting.

In this episode:

When and how should a company seek press coverage?The difference between marketing and communicationsBuilding relationships with reportersBeing or identifying a great communications leader

Early on, most founders and investors focus on getting positive press, but if they’re unfortunate or make mistakes, mitigating bad coverage becomes a common goal. Broadly, communications consists of how and what information to share, both inside and outside of the company, touching domains like management, recruiting, marketing, and business development. It’s also highly optimizable and often, mission critical — the difference between dramatic success and catastrophic failure.

We spoke with three communications experts to learn more:

Sean Garrett was Twitter’s first VP of Communications. He previously worked for Governor Pete Wilson of California and has founded two separate communications firms, with clients including Slack, Cisco, and Disney. He’s currently a Managing Partner at Pramana Collective.Faryl Ury is a former reporter with experience at NPR and the Associated Press. Her communications experience also began in government, working for US Senator Jeanne Shaheen before managing comms at Square and Uber. She was then a marketing executive at Dropbox before becoming the Director of Communications at Aurora, a leading autonomous vehicle company, with investors including Sequoia Capital, Amazon, and Hyundai.Adi Raval started as a journalist at ABC News and the BBC, covering 9/11, the Iraq War, and the White House. He moved into government as a diplomat for the State Department serving in Afghanistan, and later, as a spokesperson and Director of Communications at USAID. After leaving government, Adi was the top communications executive for the Bechtel Corporation, the Head of Comms and PR for TaskRabbit, and now the Head of Communications at Kodiak Robotics. He’s also a term member for the Council on Foreign Relations.

Below is a synthesized summary of our conversation; check out The Operators for the full episode.

When and how should a company seek press coverage?

Investors love to see public recognition of their portfolio companies, and founders sometimes believe press coverage will solve all their problems, yielding a panacea of inbound customers, employees, and new backers. Whether it’s a fundraising announcement or a product launch, more exposure can only help, right? Of course, that’s not always true. Being unprepared for an influx of inbound interest can lead to bad experiences and a negative reputation.

What’s more likely than a bad response? No response at all: reporters are constantly pitched by entrepreneurs seeking coverage who don’t have a compelling story to share, which means most of them are primed to say “no.”

Faryl told us that when she asks founders why they want to do press, they often answer, “our investors told us to,” or “I talked to other entrepreneurs and they do press.” Being prepared for the response means knowing what you want the response to be, which in turn means knowing what you have to say, and why anyone will listen and respond the right way. Thinking through this exercise involves asking questions, said Sean, specifically, “what is your positioning? What is your messaging? And for some organizations, that’s the right first step to figure out, at a high level, what are we even trying to accomplish here…?”

Having a clear purpose in mind before approaching reporters will also help you execute. For some startups, landing a story with trade press may be better than being written up by a generalized tech publication. On the other hand, if you’re spending a ton of money on Facebook and Google to advertise directly to consumers, getting coverage in the right publications may be much more efficient and impactful. 

Atlassian today announced that it has acquired Code Barrel, the makers of Automation for Jira, a low-code tool for easily automating many aspects of Jira that’s also one of the most popular add-ons for Jira Software and Jira Service Desk in Atlassian’s marketplace. The two companies did not disclose the price of the acquisition.

Sydney-based Code Barrel was founded by two of the first engineers who built Jira at Atlassian, Nick Menere and Andreas Knecht. With this acquisition, they are returning to Atlassian after four years in startup land.

“For me and Andreas, it’s almost like coming home,” said Menere, who joined the Jira team in 2005 when there were only a handful of developers working on the product. “It’s the place where we pretty much learned how to develop software and how to develop product. For us, this was the only company we would ever go back to.”

As the name implies, Automation for Jira makes it easy to automate recurring tasks in Atlassian’s issue and project tracking service. “Increasingly, [our customers] are having to spend a lot of time on the mundane,” Noah Wasmer, the VP of Product for Tech Teams at Atlassian, told me. “What we’re seeing is that with Jira as the backbone, they are interacting with a lot of systems, are duplicating work, are manually entering work into different systems. And so what we’re finding is that they’re spending an inordinate amount of time doing things that aren’t actually helping them build and create those next-generation things that help change our world.”

If you want to reduce this kind of duplication of work, then automation is the obvious thing to look at. And with more than 6,000 companies that found Code Barrel’s solution in Atlassian’s marketplace, plus the founders’ obvious connection to the company, Automation for Jira must have been an obvious candidate for an acquisition.

Wasmer also stressed that the fact that they built a no-code tool will allow anybody who uses Jira to create scripts without having to be a programmer. Automation for Jira allows users to set up time-based rules or those that run based on triggers inside of Jira. It also features third-party integrations with SMS, Slack and Microsoft Teams, among others.

For the time being, Automation for Jira will remain in the Atlassian Marketplace and will continue to sell at the same price of $5/user/month for teams with up to 10 users and $2.5/user/month for teams between 11 and 100 users, with prices going down from there for larger enterprises. Surely, Atlassian will start integrating some of the tool’s features into Jira, but for the time being the company doesn’t have anything to announce on that front.

A year ago, at a demo day south of San Francisco, we watched a number of recently formed startups pitch investors on their companies. One that stood out to us at the time was Zubale, a Mexico City-based outfit whose founders were looking to connect big corporations with Latin Americans eager to address tasks on their behalf. A person could conduct on-the-ground market research for a brand, for example, then earn mobile phone credits or other redeemable digital rewards.

Fast-forward and Zubale, which had 10 employees at the time, now has 40 full-time employees, and has completed 170,000 tasks on behalf of the consumer brands on which it is squarely focused — and for two reasons.

First, according to Zubale co-founder Allison Campbell, the retail industry across Latin America is generating $2 trillion per year, but companies are also shelling out $40 billion on “super painful and high spend” that includes employees who complete in-store tasks like stocking shelves, checking prices and building displays.

Campbell says Zubale can save — even make — these companies money by crowdsourcing the same tasks to independent contractors who can choose from an inventory of similar jobs near them.

Campell and her co-founder, Sebastian Monroy, also know a few things about retail in emerging markets. Before heading to HBS, Campbell spent nearly eight years with Walmart, first as a merchandise manager, then as a director of international strategic initiatives, roles that placed her in Gurgaon, India, then Shanghai and Shenzhen, China.

Monroy’s path was similar; he spent more than seven years working in a variety of sales roles for Proctor & Gamble in Mexico before heading to Harvard, where he met Campbell on their first day of business school. (“We realized we were wearing the same exact glasses and took a picture together,” she says with a laugh. They decided to team up on Zubale a year later.)

Indeed, though one could see Zubale using its platform to crowdsource any number of tasks, à la TaskRabbit, the opportunity is so massive in catering to retailers that the startup plans to stay in its lane for the foreseeable future.

If anything, says Campell, Zubale — which plans to eventually expand from Mexico into other countries, including Brazil, Chile and Peru — may end up offering the contractors more in the way of financial services products, given that there remains a dearth of these and that these individuals are constantly checking the app anyway.

It makes sense. While 85% of Mexico’s population of 125 million now has a smart phone — giving rise to more app-driven startups like Zubale — only 10% have a credit card, and only 35% have a checking account. It’s for that reason that many of the people who work for Zubale still choose to earn mobile phone credit and other digital rewards that they can redeem through making online purchases.

They “love us,” too, says Campbell, because they can “increase their income by 40%” by performing work for Zubale. In fact, she suggests Zubale hasn’t had to do much in the way of marketing, thanks to Facebook Groups where the company is discussed, as well as through other word of mouth, including workers’ friends who want more jobs and find it easier to find and complete jobs in 30-minute increments at the same store location rather than run from store to store or job to job. (On average, she adds, they complete 20 jobs for the company per week.)

Certainly, investors like the company. Campbell and Monroy say they had a lot of inbound interest when they began seeking seed funding more recently. They chose the venture firm NFX to lead the $4.4 million round, given its expertise in marketplaces and network effects-driven businesses. Other participants in the round include Industry Ventures, Joe Montana’s Liquid 2 Ventures and XFactor Fund, along with individual investors Jonathan Swanson (who is the chairman of Thumbtack), Sergio Romo (the CEO of Grow Mobility) and Bob White (the founder and a former managing director of Bain Capital).

Meanwhile, the company’s very first check came from the seed-stage firm Pear in Palo Alto, which had hosted that demo day.

Since it was founded by journalist Jessica Lessin in 2013, The Information has stood out in the tech news landscape for its focus on an ad-free, subscription-driven business model (a focus that seems increasingly prescient).

Now, the upcoming launch of an app called Ticker suggests that the company is looking to expand its audience while maintaining that subscription model.

The Information describes Ticker as its first consumer app. The assumption is that anyone who’s currently paying the $399 annual fee for an Information subscription needs it for their job — whether they’re an investor, entrepreneur or some other professional in the tech industry.

The new app, meanwhile, is designed for anyone who might be interested in keeping up-to-date with the latest tech news, and it’s priced much more affordably, at $29 per year. (Information subscribers will get access as well.)

Apparently the app was inspired by the Briefing section of The Information website, which offers quick summaries (often drawn from reporting by other publications) of major tech news.

Ticker, meanwhile, will include a section called Today with summaries of the day’s tech headlines — similar to Briefing, but written for a consumer audience. It will also include a calendar highlighting upcoming IPOs, conferences and other events that readers might want to know about. (Not included: The Information’s full articles and original reporting.)

“More and more, we’ve been hearing from readers who don’t have a business reason to follow tech but are finding it more and more central to their lives,” Lessin said in a statement. “We are launching Ticker for them — giving them access to the best summaries of the most significant news, written by our team at The Information.”

The company plans to launch Ticker later this fall. In the meantime, you can sign up here.

The biggest wave in consumer products right now has all the hallmarks of another bubble of misplaced investor expectations and sadly lower margins.

Cloud kitchens (the category, and not just CloudKitchens the startup service) is essentially WeWork for restaurant kitchens. Instead of buying an expensive restaurant site on a heavily walked street, a cloud kitchen is developed in a cheaper locale (an industrial district, perhaps), with dozens of kitchen stations that are individually rentable for short periods of time by chefs and restaurant proprietors.

It’s a market that has exploded this year. CloudKitchens, which has been funded by former Uber founder and CEO Travis Kalanick, is perhaps the most well-known example, but others are competing, and none more so than meal delivery companies. DoorDash announced that it was opening a shared kitchen in Redwood City just this week, Amazon has announced it is getting in the game and, around the world, companies like India-based transportation network Ola are building out their own shared kitchens.

That has led to laudatory headlines galore. Mike Isaac and David Yaffe-Bellany talk about “the rise of the virtual restaurant” at The New York Times, while Douglas Bell, contributing to Forbes, wrote that “Deliveroo’s Virtual Restaurant Model Will Eat The Food Service Industry.”

And there are not just headlines, but predictions of doom as well for millions of small-business restaurant owners. Mike Moritz, the famed partner at Sequoia, wrote in Financial Times earlier this year that:

The large chain restaurants that operate pick-up locations will be insulated from many of these services, as will the high-end restaurants that offer memorable experiences. But the local trattoria, taqueria, curry shop and sushi bar will be pressed to stay in business.

Latent in these pieces (there are dozens of them published on the web) lies a superficial storyline that’s appealing to the bright but not detail-oriented: that there are high software margins (or “cloud” margins, if you will) to come from a world in which kitchen space is suddenly shareable, and that’s going to lead to a complete disruption of restaurants as we know them.

It’s the same sort of storyline that propelled WeWork to meteoric heights before eventually crashing the last few weeks back down to reality. As Jesse Hempel wrote in Wired a few years ago about the shareable office startup: “Over time, this could be a much bigger opportunity than coworking spaces, one in which everything WeWork has built so far will simply feed an algorithm that will design a perfectly efficient approach to office space.”

Clearly, the AI algorithm for office efficiency (“WeWork Brain”?) wasn’t as profitable as hoped, with WeWork expected to lay off 500 software engineers in the coming weeks.

And yet despite the seeming collapse of WeWork and the destruction of its narrative, we still haven’t learned our lesson. As Isaac and Yaffe-Bellany discuss in their NYT piece, “No longer must restaurateurs rent space for a dining room. All they need is a kitchen — or even just part of one.” Now I know what the two mean here, but let’s be uncharitable for a moment: you can’t rent a part of a kitchen. No one rents the stovetop and not the prep area.

But it is that quickly slippery logic that can cause an entire industry to rise and eventually crumble. Just as with the whole “WeWork should really be valued as a software company” meme, the term “cloud kitchens” implies the flexibility (and I guess margins?) of data centers, when in reality, they couldn’t be further away in practice from them. Commercial kitchens require regulatory licenses and inspections, constant monitoring and maintenance, not to mention massive kitchen staffs (they aren’t automated kitchens!).

So let’s look at how margins and leverage play out for the different players. If you are the owner of one of these cloud kitchens, how exactly do you get any pricing leverage in the marketplace? Isaac and Yaffe-Bellany again write, “Diners who order from the apps may have no idea that the restaurant doesn’t physically exist.”

That sounds plausible, but if consumers don’t know where these restaurants physically are, what is stopping an owner from switching its kitchen to another “cloud”? In fact, why not just switch regularly and force a constant bidding war between different clouds? Unlike actual cloud infrastructure, where switching costs are often extremely prohibitive, the switching costs in kitchens seems rather minimal, perhaps as simple as packing up a box or two of ingredients and walking down the street.

That’s why we are seeing almost no innovation coming from early-stage startups in this space. Deliveroo, Uber Eats, DoorDash, Ola and more — let alone Amazon — are hardly under-funded startups.

In fact, this supposed rise of the cloud kitchen gets at the real crux of the matter: the true “expense” of restaurants isn’t rent or labor, but in fact is really marketing: how do you acquire and retain customers in one of the most competitive industries around?

Isaac and Yaffe-Bellany argue that restaurants will join these meal delivery platforms to market their foods. “…[T]hey can hang a shingle inside a meal-delivery app and market their food to the app’s customers, without the hassle and expense of hiring waiters or paying for furniture and tablecloths.”

Let me tell you from the world of media: Relying on other platforms to own your customers on your behalf and wait for “traffic” is a losing proposition, and one that I expect the vast majority of restaurant entrepreneurs to grok pretty quickly.

Instead, it’s the meal delivery companies themselves that will take advantage of this infrastructure, an admission that actually says something provocative about their business models: that they are essentially inter-changeable, and the only way to get margin leverage in the industry is to market and sell their own private-label brands.

For example, I get the same food delivered from the same restaurants regularly, but change the service based on which coupon is best this week (for me, that’s Uber Eats, which offered me $100 if I spent it by Friday). That inter-changeability makes it hard to build a durable, profitable business. Uber Eats, for instance, is expected to be unprofitable for another half decade or more, while Grubhub’s profit margins remain mired in the single digits.

The great hope for these companies is that cloud kitchens can fill the hole in the accounting math. Private brands drive large profits to grocery stores due to their higher margins, and the hope is that an Uber Burger or a DoorDash Pizza might do the same.

The question, of course, is whether consumers “just want food” or whether they specifically want the pad thai from that restaurant down the street they love because it is raining and they don’t want to walk to it. Food brands have a prodigiously long gestation period, since food choices are deeply personal and take time to shift. Just because these meal delivery platforms start offering a burger or a rice bowl doesn’t suddenly mean that consumers are going to flock to those options.

All of which takes us back to those misplaced investor expectations. Cloud kitchens is an interesting concept, and I have no doubt that we will see these sorts of business models for kitchens sprout up across urban cities as an option for some restaurant owners. I’m also sure that there will be at least one digital-only brand that becomes successful and is mentioned in every virtual restaurant article going forward as proof that this model is going to upend the restaurant industry.

But the reality is that none of the players here — not the cloud kitchen owners themselves, not the restaurant owners and not the meal delivery platforms — are going to transform their margin structures with this approach. Cloud kitchens is just adding more competition to one of the most competitive industries in the world, and that isn’t a path to leverage.

Sramana Mitra: Give me an example of a type of patient that you identify. How do you design their payment plan? David Shelton: We run through a specific algorithm with a scoring process where we’ll...

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Today’s 461st FREE online 1Mby1M Roundtable For Entrepreneurs is starting NOW, on Thursday, October 17, at 8 a.m. PDT/11 a.m. EDT/5 p.m. CEST/8:30 p.m. India IST. Click here to join. All are...

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Today’s 461st FREE online 1Mby1M Roundtable For Entrepreneurs is starting in 30 minutes, on Thursday, October 17, at 8 a.m. PDT/11 a.m. EDT/5 p.m. CEST/8:30 p.m. India IST. Click here to join....

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As handset makers continue to work on ways of making smartphones more streamlined and sleek, while at the same time introducing new features that will get people buying more devices, a startup that is pioneering something called “software-defined” surfaces — essentially, using ultrasound and AI to turn any kind of material, and any kind of surface, into one that will respond to gestures, touch and other forces — is setting out its stall to help them and other hardware makers change up the game.

Sentons, the startup out of Silicon Valley that is building software-defined surface technology, is today announcing the launch of SurfaceWave, a processor and accompanying gesture engine that can be used in smartphones and other hardware to create virtual wheels and buttons to control and navigate apps and features on the devices themselves. The SurfaceWave processor and engine are available to “any mobile manufacturer.”

Before this, Sentons had already inked direct deals to test market interest in its technology. There were already three smartphones released — two of which were only sold in Asia (models and customer names undisclosed by Sentons) and one of which is made by Asus in partnership with Tencent, the Republic of Gamers phone (the Air Triggers are powered by Sentons). Jess Lee, the company’s CEO, told me in an interview that there are another 10-12 devices “in process” right now due to be released in coming cycles. He would not comment on whether his former employer is one of them.

Sentons has been around since 2011, but very much under the radar until this year, when it announced that Lee — who had been at Apple, after his previous company, the cutting-edge imaging startup InVisage, was acquired by the iPhone maker — was coming on as CEO.

The company has quietly raised about $37 million mainly from two investors, NEA and Chinese-American firm Northern Light Venture Capital, with Khosla also holding a stake. Lee confirmed to me that Sentons is currently raising another, probably larger, round. (Given the company’s partnership with Tencent and Asus, those are two companies I would think are candidates as strategic investors.)

The sound of silence

Sentons’ core idea is focused around sound — specifically ultra sound.

Its system is based around a processor that emits ultrasonic “pings” (similar to sonar array, the company says, which is used for example on submarines to navigate and communicate) to detect physical movement and force on the surface of an object. The company says that this technique is much more sophisticated than capacitive touch that has been used on smartphones up to now, because combined with Sentons’ algorithms it can measure force and intent as well as touch.

Combined with the processor that emits the pings and houses the gesture engine, Sentons also uses “sensor modules” around the perimeter of a device to detect when those pings are interrupted. The system trains itself and can adjust both to temporal “buttons” and also other unintended things like when a screen cracks and your gestures move over to a different area of the phone.

Gaming — the main use case for Asus’s ROG phone — is an obvious category ripe for software-defined surfaces. The medium always strives for more immersive experiences, and as more games are either natively made for phones, or ported there because of the popularity of mobile gaming, handset makers and publishers are always trying to come up with ways to enhance what is, ultimately, very limited real estate (even with larger screens). Using any and all parts of a device to experience motion and other physical responses, and to control the game, is a natural fit for what Sentons has built.

But the bigger picture and longer-term goal is to apply Sentons’ technology for other uses on devices — photography and building enhanced camera tools is one obvious example — and on other “hardware,” like connected cars, clothes and even the human body, as Sentons’ technology can also work on and through human tissue.

“Every surface is an opportunity,” Lee said, noting that conversations around health and medical technology are still very early, while other areas like wearables and automotive are seeing “engagement” already. “In the cabin of a vehicle, you have a wealth of tactile materials, whether it’s leather dashboards or metal buttons, and all of those are extremely interesting to us,” he added.

At the same time, the more immediate opportunity for Sentons is the mobile industry.

Smartphone sales have slowed down, and for some vendors declined, in recent years; and while some of that might have to do with premium device prices continuing to climb, and much higher smartphone penetration globally, some have laid the blame in part on a lack of innovation. Specifically, newer phones are just not providing enough “must have” new features to merit making a purchase of a new device if you already have one.

You could argue that making a technology like this widely available and open to all comers might make those who are trying to make their devices stand out with special features less inclined to jump on the bandwagon.

“Yes, you could say there is more value in scarcity, an approach we took in the last company,” Lee said, referring to InVisage and how very under the radar it was before being snapped up by Apple.

However, he thinks a different approach is needed here. “Whether we launched this platform to everyone or not, the gates have opened, the piñata has broken, and we see a lot more opportunities and want to go for them,” he said.

“You can call it a multi-pronged approach,” he continued, “but ensuring the adoption of software-defined interactions [by trying to work with as many companies as possible] gets the technology or use out there quickly.” He noted that when a new gesture is introduced on devices, it can take time for the world to absorb it, “and we are positive there will be followers, perhaps with different technology, that will compete with us, so a broad launch is what we are going for.”

The story behind ArsenalBio begins with Sean Parker’s Institute for Cancer Immunotherapy.

Founded in 2016, the Institute has been instrumental in providing a space for the top researchers into cancer across different fields to collaborate and communicate on the latest breakthroughs in settings that range from formal meetings to informal retreats.

It was at one of these informal retreats that luminaries like Dr. Bradley Bernstein, a professor of pathology and researcher at the Broad Institute; W. Nicholas Haining, vice president of discovery oncology at Merck Research Laboratories; Dr. Alexander Mason, an associate professor of immunology at the University of California San Francisco; and E. John Wherry, a professor of systems immunology at the University of Pennsylvania, began to talk about the current state of the art in cancer diagnostics and therapies and the technologies powering cell-based therapies to potentially cure cancer.

Parker suggested that rather than have each of these researchers spin their technologies out into separate companies that would develop one discrete innovation that would be needed to get to a cell-based therapy for solid tumors, the researchers should combine forces and build an arsenal of tools for the discovery and development of potential cures.

“I look at this as a tour de force of a combination of bringing academics together who typically would start separate companies and get them working together with a dream team management team,” says Beth Seidenberg, the founder of Westlake Village BioPartners and an investor in ArsenalBio. 

Indeed, the management team is just as impressive as the researchers behind the project. Kleiner Perkins founding partner Brooke Byers recruited Dr. Ken Drazan to serve as a consultant to the company as it was getting off the ground. Drazan, now the company’s chief executive, was the former president of the cancer research and diagnostics startup Grail and has served as an executive and founder at a number of healthcare startups and large medical companies.

With Drazan on board, the company quickly recruited the rest of the management team: Jane Grogan, the former principal scientist in charge of adaptive tumor and cell therapy at Genentech; Michael Kalos, the former vice president of immuno-oncology and cell therapies at Janssen Oncology; and Tarjei Mikkelsen, the former vice president of biology at 10x Genomics.

ArsenalBio initially formed as a shell company with seed financing from investors in 2018, basically on the back of its technical team and nascent executive staff.

Alongside the powerhouse executive team and scientific founders, ArsenalBio has now raked in $85 million in financing from investors including Westlake Village, the PICI, Kleiner Perkins, the University of California San Francisco Foundation Investment Company, Euclidean Capital and Osage University Partners.

The idea is to improve the ability of T cell therapies to fight a broader range of cancers more effectively. T cell treatments have already shown amazing promise with certain types of cancer, but have not been able to effectively treat the solid tumors that represent the deadliest manifestation of the disease.

To tackle solid tumors like sarcomas, carcinomas and lymphomas, doctors need to figure out how to deliver the T cells first to the area around the tumor and then to the right tissues where the tumor is spreading. That requires a set of biological instructions, which, in many cases have yet to be discovered.

“We need to get the cells to deal with the tumor microenvironment,” says Seidenberg.

T cells are the human body’s natural response to fighting off infections and disease. Cancers essentially turn off that natural immune response by signaling to the cells that a tumor is actually something they should ignore rather than attack.

“Our goal is to program [cells] by delivering additional  instructions to tell the T cell to ignore the instructions from the tumor… to ignore the signals,” says Drazan. 

The company is still developing its first product strategies now, Drazan says. But ArsenalBio will be selling two different types of technologies. The first will be the medicines themselves that will be used to cure certain types of cancer. The second will be the sequences of genes that can be used to counteract or override the signals that are coming from different types of tumors which prohibit T cells from performing their normal functions.

Drazan compared those sequences to programs on GitHub that other researchers, clinicians and companies could use to develop their own therapies.

“ArsenalBio allows us to rewrite vast stretches of code to give T cells dramatic new functions — that means they can be made to be more effective at killing cancer and a broad spectrum of other diseases,” said Sean Parker, founder and chairman of PICI and ArsenalBio director, in a statement. “It’s also very rewarding to see ArsenalBio born from the deep collaboration of PICI investigators — who worked together across research centers, hospitals and universities on the science behind these technologies. The company’s very existence demonstrates how much faster and better we can get therapies from bench to bedside when we collaborate and put patients first.”

Blackbaud, the world’s leading cloud software company powering social good, and the One Million by One Million (1Mby1M) global virtual accelerator have come together to launch the Blackbaud –...

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The tech world has a lot to offer those with disabilities, but it can be hard to get investors excited about the accessibility space. That’s why Microsoft’s AI for Accessibility grants are so welcome: equity-free Azure credits and cash for companies looking to adapt AI to the needs of those with disabilities. The company just announced ten more, including education for the blind startup ObjectiveEd.

The grant program was started a while back with a $5 million, 5-year mission to pump a little money into deserving startups and projects — and get them familiar with Microsoft’s cloud infrastructure, of course.

Applications are perennially accepted, and “anybody who wants to explore the value of AI and machine learning for people with disabilities is welcome to apply,” said Microsoft’s Mary Bellard. As long as they have “great ideas and roots in the disability community.”

Among the grantees this time around is ObjectiveEd, which I wrote about earlier this year. The company is working on an iPad-based elementary school curriculum for blind and low-vision students that’s also accessible to sighted kids and easy for teachers to deploy.

Part of that, as you might guess, is braille. But there aren’t nearly enough teachers capable of teaching braille as students who need to learn it, and the most common technique is very hands-on: a student reads braille (on a hardware braille display) out loud and a teacher corrects them. Depending on whether a student has access to the expensive braille display and a suitable tutor at home, that can mean as little as an hour a week dedicated to these crucial lessons.

“We thought, wouldn’t it be cool if we could send a sentence to the braille display, have the student speak the words out loud, then have Microsoft’s Azure Services translate that to text and compare that to the braille display, then correct the student if necessary and move on. All within the context of a game, to make it fun,” said ObjectiveEd founder Marty Schultz.

And that’s just what the company’s next app does. Speech-to-text accuracy is high enough now that it can be used for a variety of educational and accessibility purposes, so all it will take for a student to get some extra time in on their braille lessons is an iPad and braille display — admittedly more than a thousand dollars worth of hardware, but no ever one said being blind was cheap.

Braille literacy is dropping, and, I suggested, no surprise there: With pervasive and effective audio interfaces, audio books, and screen readers, there are fewer times when blind and low-vision people truly need braille. But as Schulz and Bellard both pointed out, it’s great to be able to rely on audio for media consumption, but for serious engagement with the written word and many educational purposes, braille is either necessary or a very useful alternative to speech.

Both Schultz and Bellard noted that they are not trying to replace teachers at all — “Teachers teach, we help kids practice,” Schultz said. “We’re not experts in teaching, but we can follow their advice to make these tools useful to students.”

There are ten other grantees in this round of Microsoft’s program, covering a wide variety of approaches and technologies. I like the SmartEar, for instance, which listens for things like doorbells or alarms and alerts deaf people of them via their smartphone.

And City University of London has a great idea in personalizing object recognition. It’s pretty straightforward for a computer vision system to recognize a mug or keychain on a table. But for a blind person it’s more useful if a system can identify their mug or keychain, and then perhaps say, it’s on the brown table left of the door, or what have you.

Here are the ten grantees besides ObjectiveEd (descriptions provided by Microsoft, as I wasn’t able to investigate each one, but may in the future):

AbiliTrek : A platform for the disability community to rate and review the accessibility of any establishment, with the ability to tailor search results to the specific needs of any individual.Azur Tech Concept – SmartEar : A service that actively listens for environmental sounds (i.e. doorbell, fire alarm, phone call) and retransmits them in colored flashes on small portable boxes or a smart phone to support the deaf community.Balance for Autism – Financial Accessibility: An interactive program which provides information and activities designed to better match people with programs and servicesCity University of London – The ORBIT : Developing a data set to train AI systems for personalizing object recognition, which is becoming increasingly important for tools used by the blind community.Communote – BeatCaps : A new form of transcription that uses beat tracking to generate subtitles that visualize the rhythm of music. These visualizations allow the hard of hearing to experience music.Filmgsindl GmbH – EVE: A system that recognizes speech and generates automatic live subtitles for people with a hearing disability. Humanistic Co-Design : A cooperative of individuals, organizations and institutions working together to increase awareness about how designers, makers, and engineers can apply their skills in collaboration with people who have disabilities.iMerciv –  MapinHood : A Toronto-based startup developing a navigation app for pedestrians who are blind or have low vision and want to choose the routes they take if they’re walking to work, or to any other destination. inABLE and I-Stem – I-Assistant: A serves that uses text-to-speech, speech recognition, and AI to give students a more interactive and conversational alternative to in-person testing in the classroom.Open University – ADMINS : A chatbot that provides administrative support for people with disabilities who have difficulty filling out online academic forms.

The grants will take the form of Azure credits and/or cash for immediate needs like user studies and keeping the lights on. If you’re working on something you think might be a good match for this program, you can apply for it right here.

According to a report by Research On Global Markets, the global machine learning market is expected to grow 48% annually to $19.4 billion by 2023. The growing adoption of IoT devices and of a...

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Work management platform Asana today announced the launch of a new feature that will take the work out of some of the most mundane and repetitive tasks on its platform. Asana Automation, as the new feature is called, allows users to create their own “if this then that” rules, but also features a new voice transcription service, as well as an OCR tool and new smart templates that integrate some of the service’s machine learning smarts.

“Earlier this year we launched Workload, empowering teams to be more agile when planning, monitoring and managing their efforts,” said Asana head of product Alex Hood. “Now with Automation, we’re introducing the ability to automate your routine tasks so you can spend more energy on your craft and leave the repetitive busywork to Asana.”

The rule builder comes with more than 70 pre-built and preset rules at launch, but users can obviously build their own rules as well. Asana customers can use the service to automatically route tasks to a specific team member, for example. Like with the rest of the new features the company announced today, the idea here is to automate many of the processes that keep teams busy all day, doing “work about work.”

The new OCR and transcription services, which are now available in Asana’s iPhone app, are pretty self-explanatory. They make it easier to capture what was said in a meeting or written on a whiteboard, which users can then assign to a given task in Asana.

Smart project templates, too, take some of the grunt work out of using Asana. “Now when using a template, such as an event plan or campaign launch, a complete workback schedule can be instantly layered on,” the company explains. “When a conflict arises between task deadlines, Asana will automatically correct, enabling teams to spend less time setting up projects and workflows, and more time getting work done.”