Dec
29

The 18 biggest tech scandals of 2018 (FB, TWTR, GOOGL, TSLA, AAPL)

Starting with Apple, Alex Jones was kicked off social media sites one by one for his videos, podcasts, and posts. The social networking sites said Jones' posts were filled with hate speech and threats of physical violence targeting Muslims, transgender people, and mainstream media.

Other social media sites followed soon after with their own bans, and Twitter removed Jones after facing increasing pressure from outside groups.

Jones has long floated extreme conspiracy theories: he has claimed that the government staged the September 11 terrorist attacks, and he's currently facing a defamation lawsuit for calling the 2012 Sandy Hook massacre a staged event.

Platforms that have banned Jones this year include Facebook, Spotify, YouTube, Vimeo, PayPal, Apple App Store and Apple Podcasts, Twitter, Periscope, LinkedIn, and Pinterest.

Original author: Paige Leskin and Nick Bastone

Continue reading
  44 Hits
Dec
29

The top 7 shows on Netflix and other streaming services this week

Average demand expressions: 23,295,462

Description: "In an all-new series, five unlikely heroes and their flying robot lions unite to form the megapowerfulVoltron and defend the universe from evil."

Rotten Tomatoes critic score (Season 8): N/A

What critics said: "Season 8 manages to do the seemingly impossible by ramping up the stakes to the utmost, delivering the most powerful emotional resonance between our heroes and villains yet, and wrapping everything up in a tearful, bittersweet, and fully satisfying way." — Dave Trumbore, Collider

Season 8 premiered on Netflix December 14.

Original author: Travis Clark

Continue reading
  49 Hits
Jan
30

1Mby1M Virtual Accelerator Investor Forum: With Anirudh Suri of India Internet Fund (Part 2) - Sramana Mitra

Tesla drivers are reporting a spate of "ICE-ing" (an acronym from Internal Combustion Engine) by large trucks at Superchargers across the country.

In one instance, Reddit user Leicina said a group of trucks blocked all of the charging spots while chanting "F Tesla" before being asked to leave by an employee of the store.

Like most superchargers, the location where the incident occurred — behind a Sheetz convenience store in Hickory, North Carolina, about 40 miles northwest of Charlotte — isn't on land owned by Tesla. Rather, it's leased from third-parties, giving the company no control over how the Supercharger spots are used from day to day.

"I was really uncomfortable," the Tesla owner said, adding that the Sheetz employees were "really understanding and sent someone out immediately."

A Sheetz spokesperson said the company was aware of the incident, and apologized for any inconvenience.

"Sheetz is proud to offer a wide variety of fueling options, including one of the largest networks of Tesla Superchargers," Nick Ruffner, the chain's PR manager, said in an email. "Parking spots with Tesla Superchargers are reserved exclusively for those charging their vehicles. These spots are regularly monitored by our store managers and employees - who routinely ask other motorists to move their vehicles."

Another Tesla owner in Bristol, Tennessee spotted a Dodge Ram truck blocking a charging spot, with the charging cable mockingly attached to the bed.

Reddit

Laws about parking in reserved spots vary by state. In Arizona, for instance, its illegal to park in "any parking space specially designated for parking and fueling motor vehicles fueled exclusively by electricity unless the motor vehicle is powered by electricity and has been issued an alternative fuel vehicle special plate."

The incidents aren't new — and Tesla owners have complained about them for years online. (To be sure, some may be accidental, but many — like the incident in Hickory, were clearly meant to provoke.) Some even love to shame their gas-guzzling peers when they park in EV charging spots.

A Tesla spokesperson did not respond to a request for comment.

Many people have compared the practice to "rolling coal," when diesel owners modify their engines to dump excess amount of fuel into the cylinders. It results in more horsepower and torque, but also black plumes of smoke when not all of the fuel can be burned.

In videos posted online, drivers brag about blowing clouds on protestors or an unlucky Prius on the highway.

The practice has been illegal at the federal level for years, and a similar law was adopted by New Jersey in 2015.

Luckily for Tesla owners, the supercharger network is quickly expanding. CEO Elon Musk this week said the company is "dramatically increasing Tesla Superchargers within cities & working with landlords to add home charging to apartment buildings."

Original author: Graham Rapier

Continue reading
  44 Hits
Dec
29

Eight teams paid more than $30 million each to join the Overwatch League – here's everything you need to know before the new season starts (ATVI)

"Overwatch" is one of the most popular video games in the world, and the best players can pursue a career playing the game through the Overwatch League, an international esports league dedicated to the first-person shooter.

Overwatch League's first season launched in December 2017 with 12 teams, nine of which are based in the United States. Those teams signed up players from across the globe, offering a minimum salary of $50,000 and a shot at another $3.8 million in prize money. The season one finals brought in 10.8 million viewers across Twitch, ABC, ESPN, Disney XD and Twitch, according to "Overwatch" publisher and league owner Activision Blizzard.

The 2019 Overwatch League season will start on February 14 with a rematch between last year's grand finalists, the Philadelphia Fusion, and defending champion London Spitfire.

As it enters its second season, the Overwatch League has added eight new teams, expanding the roster to 20 international franchises. According to Jacob Wolf of ESPN, Activision Blizzard asked each new expansion team to pay between $30 and $60 million for the rights to join the league. The 12 founding teams reportedly paid $20 million each to participate in the inaugural season, meaning that the cost of buying in is going up.

The new teams will expand the international scope of the league with three expansions in China (Hangzhou, Chengdu, and Guangzhou), two in Canada (Toronto and Vancouver), and a team based in Paris. The U.S. welcomes new teams in Washington D.C., and Atlanta. At the bottom of this post you can find a list can see every Overwatch League team, their parent organizations (in parenthesis), and their team colors.

Here's what you need to know about the Overwatch League, the teams, and the key games to watch this season.

Original author: Kevin Webb

Continue reading
  64 Hits
Dec
29

2019 will be a critical year for Tesla — here's what to expect from the automaker (TSLA)

If 2018 was the wildest and craziest year in Tesla's 15-year history, then 2019 is shaping up to be its most critical year.

CEO Elon Musk's all-electric automaker will enter 2019 having produced and sold more vehicles than ever and the company could be well on its way to a half-million in cars delivered by the end of the year. That might sound awesome — but Tesla has traditionally struggled mightily with the building-cars aspect of the car business.

Musk will also be facing potential twin headwinds in 2019: an economic slowdown in the US; and the first stages of the 2020 national election. If the US auto market slips into a downturn, then Tesla won't be spared some pain.

There's good news on the horizon, however, as Tesla prepares to unveil its Model Y crossover SUV, along with some other new vehicles, including a rumored pickup truck.

Here's a month-by-month look forward to Tesla's big events and news for 2019:

Original author: Matthew DeBord

Continue reading
  60 Hits
Jan
30

TimeFlip is a time-tracking gadget simple enough that I might actually use it

When Snap CEO Evan Spiegel was growing up, he wasn't allowed to watch TV.

The 28-year-old chief exec told the Financial Times in a recent interview that his parents enforced a no-TV policy until he was "almost a teenager."

Spiegel — whose messaging app Snapchat now claims 186 million daily active users — said not watching TV made life at school a "little tricky," but "actually thought that was valuable because [he] spent a lot of time just building stuff and reading or whatever."

Today, Spiegel and his wife Miranda Kerr impose an hour and a half of screen time per week on their seven-year-old child, who comes from Kerr's first marriage.

"I think the more interesting conversation to have is really around the quality of that screen time," Spiegel told the Financial Times. He brought it back to Snapchat: He says more "positive" videos should be promoted on the app, even if they will unavoidably be among mind-numbing content he describes as "junk food" stories.

Spiegel also thinks parents need to lead by example.

He said that parents should cut down on their own screen time or explain what they're doing on their devices so kids aren't "looking at the black back of the phone . . . [with] no idea what's going on".

Of course, Spiegel may need to start practicing what he preaches, as the Snap CEO reportedly spends much of his time during board meetings glued to his phone and disengaged from conversation.

Read more: Evan Spiegel spends most of his time during board meetings on Snapchat

Read the full Financial Times interview here.

Original author: Nick Bastone

Continue reading
  42 Hits
Jan
26

Heetch raises another $20 million to compete head-to-head with Uber in Europe

Sensor data platform Samsara confirmed this morning that it had closed a new round of funding from existing investors Andreessen Horowitz and General Catalyst that values the startup at $3.6 billion.

The news was first reported by Cheddar, which spotted a filing with the state of Delaware on December 21 disclosing Samsara’s intent to raise a $100 million round at more than double the valuation it garnered upon its $50 million Series D this March.

“Our growth comes from bringing transformational new technologies to solve the problems of operational businesses, a massive segment of the economy that has long been underserved by the technology industry,” wrote Kiren Sekar, Samsara’s vice president of marketing and products, in the funding announcement. “Today, the advent of inexpensive sensors, high-bandwidth wireless connectivity, smartphones, and cloud computing enable these businesses to fully reap the benefits of 21st century technology.”

Founded in 2015, Samsara supports the transportation, logistics, construction, food production, energy and manufacturing industries with its internet-connected sensor systems, which helps businesses collect data and derive insights to improve the efficiency of physical operations.

The company’s co-founders are Sanjit Biswas and John Bicket, who previously launched Meraki, an enterprise Wi-Fi startup acquired by Cisco in an all-cash $1.2 billion deal in 2012.

Samsara’s latest financing brings the company’s total raised to $230 million. According to PitchBook, Andreessen Howoritz and General Catalyst are the only two private investors in the company, with Marc Andreessen and Hemant Taneja of General Catalyst representing the venture capital firms as lead investors on several Samsara deals.

San Francisco-based Samsara says revenue grew 250 percent in 2018 as its customer base swelled to 5,000. As for how it will deploy the new capital, the company plans to hire 1,000 employees, double down on AI and computer vision technology and open its first East Coast office in Atlanta.

The startup has yet to spend a dime of its last financing round, evidence it, like many other venture-funded startups, is pulling in capital before a market downturn strikes the industry and makes it increasingly difficult to raise hefty sums at impressive valuations.

“While the company already had a healthy balance sheet – we hadn’t dipped into our previous round of funding – the new capital enables us to accelerate long-term product investments and expand into new markets while continuing to maintain a strong balance sheet over the long term,” wrote Sekar.

Continue reading
  17 Hits
Jan
26

January 31 – Rendezvous with Sramana Mitra in Menlo Park, CA - Sramana Mitra

Ajay Chopra Contributor
Ajay Chopra co-founded Pinnacle Systems in his living room and grew it to a multi-billion dollar public company before becoming a venture capitalist with Trinity Ventures.

About 13 years ago I faced an excruciating decision: whether to sell my company, Pinnacle Systems, to a private equity firm or to another large public company. I felt that both suitors would treat my employees well (and I negotiated hard to make sure that was the case), and both offered a good asking price well above our value on NASDAQ.

After raising what at the time felt like my first child, born in my living room and nurtured into a publicly traded entity, I was ready for it to take its next step and for me to take mine. I ultimately opted for the strategic sale, but I left the process intrigued by what was already an evolving dynamic between private equity firms and tech exits.

In years past, stigma often accompanied private equity sales. I know I felt that way, even under strong deal terms. Plus, private equity exits were only available to companies generating substantial annual revenues and often profits, making this exit option inaccessible for many startups. Today, private equity buyout firms can provide a solid (and on occasion excellent) exit route — as well as an increasingly common one, accounting for 18.5 percent of VC-backed exits in 2017.

Private equity firms are investing in a broad array of technology companies, including highly valued unicorns, but also early- to mid-stage profitable and unprofitable companies that a few years ago would have been unable to secure interest from these buyout firms.

In addition, the lines between venture capital and private equity are increasingly blurring, with more private equity investments in tech, and several-late stage VC firms creating large, billion-dollar plus late-stage growth funds. Further blurring the lines, some of the late-stage VC firms are taking controlling interests in startups, a strategy typically associated with private equity. Recently, one of our portfolio companies received an investment from a late-stage VC firm that acquired a majority stake by providing liquidity to some existing shareholders and investing in the company, utilizing a strategy typically associated with PE buyout firms.

The rise of private equity buyouts within the tech sector presents a viable exit option for founders, given the reality that most startups won’t ultimately IPO. (According to PitchBook, only 3 percent of venture-backed companies in the last decade eventually went public.)

If an IPO is not a realistic long-term option, the remaining primary exit option has typically been a sale to another company (a strategic buyer, in venture parlance). However, in the past few years, private equity firms have become aggressive buyers of private companies, sometimes bidding as high as or higher than strategic buyers. With one of my portfolio companies, a private equity buyer placed the second highest bid ahead of all but one strategic buyer and helped raise the final price from the strategic buyer just by being in the bidding process.

Founders who find themselves in negotiations with strategic buyers should also reach out to PE firms to optimize the outcomeSilver Lake, Francisco Partners, Thoma Bravo and Vista are a few technology-focused PE firms, and PitchBook’s annual liquidity report lists other firms. Vista has been especially active, acquiring many technology companies, including Infoblox, Lithium and Marketo. Not all PE firms are the same, just like not all VCs and strategic buyers are the same.

Years ago, when private equity buyouts were typically only large deals, new management teams were almost always brought in to tweak the edges of already successful companies. Today, each private equity firm has its own strategy — some only buy large profitable companies, others focus on mid-size acquisitions and some only buy early-stage (typically unprofitable) companies, which brings us to the next point.

Even early-stage startups can explore a PE exit, especially if things are not going well

While most readers are familiar with private equity buyers at later stages, what’s new is the emergence of PE activity at early stages. These firms acquire majority stakes in startups that have only raised early-stage investments but are having trouble scaling or raising the next round.

After a buyout, these private equity firms typically provide value by adding the missing elements, such as marketing or sales know-how, in order to kick-start the business and achieve scale. Their goal is to increase the value of the underlying asset by augmenting founder teams with the buyout firm’s own operational experts, sometimes combining newly acquired assets with already existing assets to create a stronger whole, or doubling-down on promising products (while shedding less promising offerings) to unlock potential.

Typically, these PE firms then sell the company to another company (usually a strategic buyer) for greater value. In some cases, these early-stage PE firms sell to another PE buyout firm further up market. In some of these acquisitions, founders can maintain minority ownership in the company (though not a controlling stake), which they can carry through to their “next exit.”

Unlike PE buyouts at later stages, PE buyouts at the earlier stages are not usually high-value exits; they are mostly an avenue to provide the founders some return for their hard work, rather than the disappointing returns they can expect from an acqui-hire or, even worse, a shutdown. If negotiated correctly, a private equity deal can give founders an opportunity to play another hand to the next exit.

Few founders create companies in order to flip them. Strong entrepreneurs create companies to transform their missions into reality and positively impact the world. Steve Jobs said, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” An acquisition — particularly to private equity — may not have been the original goal, but it may fuel the continued pursuit of the founder’s mission. Or, perhaps it will enable the pursuit of a new and worthy mission.

Continue reading
  47 Hits
Jan
07

Top 5 stories of the week: AI buzz and CES unveils a self-driving — baby stroller?

2018 saw Africa’s tech sector become more dynamic and international. VC firms on the continent multiplied. There were numerous investment rounds. And startups pursued acquisitions and global expansion. Here’s a snapshot of the news that shaped African tech over the last year.  

Surge in VC funds

A notable 2018 trend was Africa’s VC landscape becoming more African, with an increasing number of investment funds headquartered on the continent and run by locals, according to Crunchbase data released in this TechCrunch exclusive.

Drawing on its database and primary source research, Crunchbase identified 51 viable Africa-focused VC funds globally with at least 7-10 investments in African startups from seed to series stage.

Of the 51 funds, 22 (or 43 percent) were headquartered in Africa and managed by Africans. Of those 22, nine (or 41 percent) were formed since 2016 and nine were Nigerian.

Four of the nine Nigeria-based funds were formed within the last year: Microtraction, Neon Ventures, Beta.Ventures and CcHub’s Growth Capital fund.

The Crunchbase study also tracked more Africans in top positions at outside funds and the rise of homegrown corporate venture arms.

One of those entities with a corporate venture arm, Naspers, announced a $100 million fund named Naspers Foundry to invest in South African tech startups. This was part of a $300 million (4.6 billion Rand) commitment by the South African media and investment company to support South Africa’s tech sector overall, as reported here at TechCrunch.

Another DFI came on the scene when France announced a $76 million African startup fund administered by the French Development Agency, AFD. TechCrunch got the skinny on how it will work here.

Investment and expansion

If African VC investment headlines were scarce a decade ago, in 2018 we became overwhelmed with them. This was largely a result of several recently closed Africa funds — TLcom’s $40 million, Partech’s $70 million, TPG’s 2 billion — beginning to deploy that capital.

In March, Nigerian consumer data analytics firm Terragon raised $5 million from TLcom. Kenyan business enterprise software company Africa’s Talking raised $8.6 million in a round led by IFC.

Investment startup Piggybank.ng closed $1.1 million in seed funding and announced a new product — Smart Target, for traditional savings groups. Trucking Logistics company Kobo360 raised two rounds, for a total of $7.2 million. Kenya-based agtech supply chain startup Twiga Foods raised $10 million. B2B retail supply chain Sokowatch closed a $2 million seed round led by 4DX ventures.

White-label lending startup Mines.io secured a $13 million Series A round. South African SME payment venture Yoco raised $16 million. Paga Payments added $10 million in fresh funding.

And then there were the three huge raises of the year. Kenyan digital payment company Cellulant hauled in $37.5 million in a Series C round led by TPG Growth. South African lending startup Jumo raised $52 million led by Goldman Sachs. And just this month, The Carlyle Group invested $40 million in Africa-focused online travel site Wakanow.com.  

Acquisitions and expansion

In 2018, African tech demonstrated it can travel, as several digital companies expanded on the continent and abroad. In May, MallforAfrica and DHL launched MarketPlaceAfrica.com, a global e-commerce site for select African artisans to sell wares to buyers in any of DHL’s 220 delivery countries.

Paga announced plans to expand in Africa and internationally, with an eye on Ethiopia, Mexico and the Philippines, CEO Tayo Oviosu told TechCrunch. Kobo360 is moving into in new markets — Ghana, Togo and Cote D’Ivoire.

On the back of its $52 million round, Jumo said it would expand in Asia and started by opening an office in Singapore.

On the acquisition front, Terragon bought Asian mobile marketing company Bizense in a cash and stock deal. The company is exploring greater growth opportunities in Latin America and Southeast Asia, CEO Elo Umeh told TechCrunch.

TPG Growth acquired a majority stake (of an undisclosed value) in Africa entertainment content company TRACE. After previous investments, Naspers acquired  96 percent of Southern African e-commerce venture Takealot.

And in December, California-based Emergent Technology Holdings acquired Ghanaian fintech payment company InterpayAfrica.

Partnerships

Collaboration between local tech firms and big global names continued in 2018. Liquid Telecom and Microsoft continued their partnership to offer connectivity cloud services such as Microsoft’s Azure, Dynamics 365 and Office 365 to select startups and hubs. This is part of Liquid Telecom’s strategy to go long on Africa’s startups as its future clients and the continent’s next big companies.

Facebook teamed up with Nigerian tech hub CcHub to launch its NG_Hub high-tech incubator.

Blockchain

As crypto fever gripped many leading economies in 2018, Africa was shaping its own blockchain narrative — one more grounded in utility than speculation. 500 Startups-backed SureRemit launched a crypto token product aimed at disrupting Africa’s multi-billion-dollar remittance market and raised $7 million in an ICO. South African payments venture Wala and solar energy startup Sun Exchange also had ICOs.

For blockchain as a platform, agtech startups Twiga Foods and Hello Tractor partnered with IBM Research to use the digital ledger tech to advance small-scale farmers and agriculture on the continent.

Ride-hail boda bodas

Ride-hail tech expanded into the continent’s frequently used motorcycle taxi market. Uber entered the three-wheeled tuk tuk moto taxi market in Tanzania in March and Uber and Taxify launched motorcycle passenger services in East Africa, including Kenya and Uganda.

Fails

Last year saw Y Combinator-backed VOD startup Afrostream shutter. In February 2018, Nigerian e-commerce startup Konga — backed by VC — was sold in a distressed acquisition. There were high expectations for Konga and its much-liked founder Sim Shagaya. I made the case that Konga’s acquisition was one of Africa’s first big startup fails that flew under the radar.

Drones

TechCrunch did a deep dive into Africa’s drone scene, talking to several experts and looking at emerging use cases across delivery services, agtech and surveying. On the regulatory side, several countries — Rwanda, Tanzania, South Africa, Zambia and Malawi — are doing some interesting things around regulation and creating drone-testing corridors for global players.

TechCrunch and Africa

In 2018 TechCrunch did more with Africa than any previous year. In addition to more content, there was a market engagement trip to Ghana and Nigeria, with meet-and-greets at Impact Hub, MEST Accra and Lagos, and CcHub.

TechCrunch also had its first Africa panel on Disrupt SF’s main stage, an Africa session at Disrupt Berlin and held the second Startup Battlefield Africa in December in Nigeria.

Fifteen startups competed in Lagos in front of a Pan-African and global crowd. South African virtual banking startup Bettr was runner-up. Ultra-affordable ultrasound startup M-Scan from Uganda was the winner.

More Africa-related stories @TechCrunch

Netflix rival Iflix offloads its Africa business to focus on AsiaSimbaPay launches Kenya to China payment service over WeChat

African tech around the ‘net  

Africa Tech Ventures closes $7.5M from AfDB for seed-stage investmentsSix African startups selected for GSMA Ecosystem Accelerator Innovation Fund

  73 Hits
Jan
07

3 ways tech leaders can take the right risks

Martina Lauchengco Contributor
Martina spent over 20 years as a marketing and product executive building and crafting strategies for market-defining software like Microsoft Office and Netscape Navigator. As an operating partner at Costanoa Ventures, she sits on multiple boards and advises companies on all things go-to-market. She also teaches at the UC Berkeley graduate school of engineering.
Jim Wilson Contributor
Jim is a seasoned sales executive with over 25 years experience in diverse technology industries. As an operating partner at Costanoa Ventures, Jim provides companies with sales and market entry strategy advice.

There is a prevailing belief that the magic formula for early-stage tech startups hinges on how quickly they achieve $1 million in annual recurring revenue (ARR). Investors in SaaS companies, in particular, are very guilty of pushing this or its equally loaded corollary, “When will you sign your first six-figure deal?”

But in the rush toward these numbers, too many startups lose sight of their primary intent: These metrics are supposed to be an indicator of product/market fit. We’ve seen companies reach $1 million in ARR in less than a year, yet not have enough market momentum to get their next million easily. We’ve seen early-stage companies so concerned about getting those first sales, they don’t validate the market and if they’re building the right product. We’ve also watched a focus on new logos make companies forget about keeping existing customers happy, introducing unexpectedly high churn — something startups can’t afford.

Those first customers and that first million are supposed to be the bedrock on which the rest of the business grows. Founders must constantly ask what they’re learning about their market, product and go-to-market approach — in that order! — so the business becomes a flywheel.

Revenue is a lagging indicator of sales success, so must likewise be prioritized accordingly. That’s not to say revenue isn’t vitally important and that there isn’t a great deal of urgency to it, but focusing on it too much too early can mask big problems that will hurt startups later when the stakes are higher.

Here are a few lessons we’ve learned by watching our early-stage companies go through this crucial phase. Every early-stage company needs to do them well.

Customer and market discovery is job No. 1

We talk about product and knowing customers a lot, but that is insufficient. Startups must understand the market, as well. How do customers do this today? Is there urgency around the problem? What is the community saying? An early investor in PagerDuty went onto Reddit and Quora and just looked at who people were talking about. It made his decision easy.

To be really successful, it is as important to understand market dynamics as it is to deliver a great product. This also helps zero in on all the aspects of your ideal customer profile; it needs to be more specific than you think! This also then helps qualify customers for future sales.

Elevate Security stood out in their super-crowded security space because they carved out a unique position around people-powered security. They used their early sales process to carefully qualify who would help them best develop their products. Their first product got shout-outs on social media from users who loved it — a rare occurrence in security — and were indicators they had found good initial customers and were creating something unique.

Build a product that sells itself

You’ll always find smart people saying, “I love what you’re doing.” Some things are so broken even a mediocre improvement is worth a change. But this is why revenue can be a false indicator for scalable success: Founders find enough early adopters to get that first million, which leads them to believe the product is enough. The company starts chasing more revenue, not investing in a product-based growth engine. If sales keeps hitting their numbers, everyone believes things are fine. Until they’re not. And then it’s usually a really heavy lift, with 6-12 months of product, sales or team upgrades.

What startup doesn’t want a growth curve like this? Zoom had triple-digit growth for the last four years in a crowded, mature video conferencing category. Janine Pelosi, Zoom’s head of marketing, said the reason they were so successful before and after she arrived was they have a great product. It’s reliable, easy to use, and the founder, Eric Yuan, was selling it every day. Yuan knew the market really well coming out of Webex, and always touching customers meant he could adjust company strategy accordingly. Zoom embodied the real magic formula: know your market + build great product.

Pay attention to customer engagement and delight

Customer satisfaction is simple: It comes from the perception that people get value from their purchase; it’s much less about how much they paid. It’s also always cheaper to make an existing customer happy than it is to acquire a new one, so make sure even in the early days that you’re investing in making current customers happy advocates.

Aquabyte uses computer vision to identify sea lice in the $160 billion aquafarming market. When they showed customers FreckleID (think facial recognition for fish) to uniquely identify fish in a pen of 200,000, fish farmers loved the idea. The price they were willing to pay was 3x what the CEO thought possible. They’re likewise investing heavily in making sure their initial customer is successful with the product and are delighting them in unexpected ways (handwritten holiday cards). They have more prospects in their pipeline than they have capacity, which means they don’t need to expand sales to grow revenue fast.

Your startup may have the coolest tech, be in the biggest market and have the smartest team. No matter what your board says, remember revenue is NOT the primary indicator; it is simply an indicator. To become a breakout success, you need to read the tea leaves of all aspects of your market and build a product and customer experience that is truly superior.

  71 Hits
Jan
06

Why cloud observability will be critical in 2023

The secondary luxury goods market has been growing wildly in recent years, with more shoppers opting to both sell their lightly used luxury goods like clothing and jewelry for cold, hard cash, as well as buying the pre-owned, authenticated luxury goods of others.

One of the biggest beneficiaries of the trend is The RealReal, a nearly eight-year-old shopping destination for the growing population of people who might not be willing or able to purchase a new Hermes Birkin bag but are willing to buy one in like-new condition for considerably less. The idea — which seems to be working — is to create a virtuous cycle, wherein the bag’s original purchaser receives the bulk of that re-sale price, then uses the money to buy another new handbag (or a used one) that can be resold at a later point in time.

Another beneficiary of the trend: TrueFacet, a five-year-old, New York-based marketplace that claims to have more than 40,000 watches and 55,000 pieces of pre-owned authenticated watches and jewelry for sale at its site, and that has more recently begun offering pre-owned timepieces directly through brands like Fendi Timepieces, Raymond Weil and Roberto Coin that now partner with TrueFacet to carry their pre-owned timepieces with a manufacture warranty.

Apparently, shoppers are buying what they’re collectively selling. The company, which had previously raised $14.7 million in funding from investors, looks to be closing in on another $10 million round, judging by freshly filed SEC paperwork that shows it has so far raised $7 million in funding and is targeting $9.8 million altogether.

TrueFacet’s backers include Founders Co-op,  Freestyle Capital and Maveron, led by partner Jason Stoffer, who also happens to sit on the board of Dolls Kill, an edgy clothing marketplace that we wrote about on Monday.

TrueFacet has some tough competition in the space, including Crown & Caliber, a six-year-old, Atlanta, Ga.-based company that has never announced outside funding, and 15-year-old, Germany-based Chrono24, which has raised €21 million over the years. Both sell timepieces alone, however.

It also competes directly with The RealReal, which has raised nearly $300 million from investors and sells clothing and high-end home decor, as well as jewelry and watches. (The company doesn’t break out publicly which of these categories outpace the others in terms of sales.)

Interestingly, like The RealReal, which now operates permanent offline stores in both New York and L.A., TrueFacet is also crossing the chasm into the offline world, though it’s taking baby steps toward that end.

Specifically, earlier this month, it announced a partnership with Stephen Silver Fine Jewelry, which sells timepieces to many monied Bay Area VCs and other Silicon Valley bigs at stores in Redwood City and Menlo Park, Calif. For the time being at least, the jeweler will also sell pieces from TrueFacet’s collection.

  59 Hits
Jan
06

Confluent expands Kafka Streams capabilities, acquires Apache Flink vendor

Startups supporting startups are blazing a new trail with support from venture capitalists.

Co-working spaces like The Wing and The Riveter raked in funding rounds this year, as did Brex, the provider of a corporate card built specifically for startups. Now Carta, which helps companies manage their cap tables, valuations, portfolio investments and equity plans, has announced an $80 million Series D at a valuation of $800 million. The company, formerly known as eShares, raised the capital from lead investors Meritech and Tribe Capital, with support from existing investors.

The round brings Carta’s total funding to $147.8 million. Its existing investors include Spark Capital, Menlo Ventures, Union Square Ventures and Social Capital, though the latter didn’t participate in the Series D funding. Tribe Capital, however, is a new venture capital firm launched by Arjun Sethi, who previously led Social Capital’s investment in Carta, Jonathan Hsu and Ted Maidenberg, a trio of former Social Capital partners who exited the VC firm amid its transition from a traditional VC fund to a technology holding company. Tribe is said to be in the process of raising its own $200 million debut fund.

Founded in 2012 by Henry Ward (pictured), the Palo Alto-based company plans to use the latest investment to develop their transfer agent and equity administration products and services to better support startups transitioning into public companies. It also will launch additional products for investors to collect data from their portfolio companies and to manage their back office.

“We’ve come this far by changing how ownership management works for private companies—popularizing electronic securities and cap table software, combined with audit-ready 409As,” Ward wrote in an announcement. “But our ambitions go far beyond supporting privately-held, venture-backed companies.”

Carta, which counts Robinhood, Slack, Wealthfront, Squarespace, Coinbase and more as customers, currently manages $500 billion in equity. This year, Carta expanded its headcount from 310 employees to 450 employees, launched board management and portfolio insights products and completed a study in partnership with #Angels that highlighted the major equity gap female startup employees are victim to.

The study, released in September, revealed that women own just 9 percent of founder and employee startup equity, despite making up 35 percent of startup equity-holding employees. On top of that, women account for 13 percent of startup founders, but just 6 percent of founder equity — or $0.39 on the dollar.

  68 Hits
Jan
06

Twitter data breach shows APIs are a goldmine for PII and social engineering 

Grove Collaborative, a four-year-old, San Francisco-based startup that sells household, personal care, baby, children’s and pet products, has been busy raising money in 2018, shows two new SEC filings that lists representatives from the company’s earlier investors, including Mayfield, Norwest Venture Partners and MHS Capital, as well as apparent new investor General Atlantic, represented by partner Catherine Beaudoin.

One of the filings shows that Grove Collaborative, which had already raised roughly $62 million as of the start of 2018, subsequently raised $27.4 million more this year. A separate, second filing shows another $76.4 million has been secured in what looks to be a newer round that’s targeting $125 million. It’s a lot of money for such a young company, which suggests it has found traction with a growing customer base.

We’ve reached out to Grove Collaborative and are waiting to learn more.

As we reported back in January, co-founder Stuart Landesberg started the company after working with retail brands during two years as an associate with TPG Capital, which focuses on growth equity and middle-market private equity transactions. With shelf space limited for brands in brick-and-mortar stores, he saw an opportunity for a startup that prompts consumers to buy the kinds of items they buy over and over again just as they are running out of them: think dish soap, pet food, deodorant, vitamins and sunscreen.

Amazon, of course, similarly prompts its customers to buy such items, but Grove Collaborative is marketing to a slightly narrower demographic, that of people who want only all-natural products. In fact, along with the brands that it make it easier for its customers to find — think Method and Mrs. Meyers — the company began selling its own all-natural products this year. Among the many dozens of offerings it now retails under the Grove Collaborative label: a coconut body lotion, a foaming hand soap, coffee filters, soy candles and lip balm.

The move puts the startup in more direct competition with other e-commerce companies, like the consumer goods company Honest Company, which similarly sells natural products for the home and personal care, though many of its products are now sold on shelves in big retail stores like Target.

Grove Collaborative also looks to be competing more directly now with well-funded Brandless, which raised $240 million from SoftBank’s Vision Fund in summer at a valuation of slightly more than $500 million. Brandless also sells its own all-natural household and personal care products, though, unlike Grove Collaborative, it also focuses on food and, unlike Grove, it offers a subscription service, yet does not revolve around one. Grove is exclusively selling an auto-shipment service.

Grove had previously raised two separate rounds of funding in quick succession: a $15 million Series B round it closed in March of 2017, following by a $35 million Series C round it announced in January of this year.

Given that Landesberg was formerly an investor himself, he may well have realized — as have many founders — that raising money next year may be far harder in 2019 than it has been this year. As the CEO of Zymergen, whose giant funding round we recently featured, told Bloomberg last week: “We wanted to have some fat on our bones for sure . . . The time to raise money is when people are giving it to you.”

  66 Hits
Jan
12

Autonomous vehicles and the imminent death of Vision Zero

This year has been good for tech titles. Books like Bad Blood and Brotopia brought us some in-depth reporting on crashes and burns, while Stephen Hawking brought us his last thoughts. Here are some of our favorite tech titles for 2018.

  26 Hits
Jan
15

Our data centers need a hard reset

Elon Musk would really like everyone to just forget about that whole 'pedo' thing.

Lawyers for the Tesla CEO have filed a motion to dismiss the defamation claim brought by Vern Unsworth, the British cave diver baselessly described by Musk as a "pedo guy."

We first heard of the legal update on Thursday via BuzzFeed reporter Ryan Mac.

The billionaire CEO's attempt to dismiss the claim hinges on the arguments that Unsworth attacked Musk first, that Musk made his attacks on a social media platform known for "hyperbole", and that Musk's remarks were opinion and not statements of fact.

Musk's lawyers wrote in a filing to a California court: "[The] reasonable reader would not have believed that Musk — without ever having met Unsworth, in the midst of a schoolyard spat on social media, and from 8,000 miles afar — was conveying that he was in possession of private knowledge that Unsworth was sexually attracted to children or engaged with sex acts with children."

British caver Vernon Unsworth, who is suing Elon Musk for libel. Screenshot/ 7 News

They described Twitter, where Musk first made his insults, as a "rough-and-tumble" platform known for "invective and hyperbole." Most readers, they claimed, don't necessarily expect everything they read on social media to be factually correct.

And they claimed Musk's statements were "imaginative attacks" which were protected by US free speech laws. Expressions of opinion are protected under Californian law.

The lawyers wrote: "The more colourful the invective, the more likely the reader is to understand that it is opinion."

Business Insider has contacted Unsworth's legal representatives in the US and the UK for comment.

Vern Unsworth is one of the cave divers who helped in the effort this summer to rescue 12 Thai boys and their football coach from a network of caves in Thailand, where they had been stranded thanks to floodwater.

The 12 soccer players and their coach react as they explain their experience in the cave during their news conference in the northern province of Chiang Rai, Thailand, July 18, 2018. REUTERS/Soe Zeya Tun

About a week after the boys went missing, Musk stated on Twitter that he was keen to help in the rescue attempt. He subsequently flew to Thailand with engineers from his company SpaceX to offer up a mini-submarine as a rescue vehicle. Ultimately, the head of the rescue mission described the mini-submarine as "not practical", and the boys were successfully rescued by diverse guiding them through the cave network.

After the rescue, Unsworth appeared on CNN and dismissed Elon Musk's mini-submarine, stating that the Tesla CEO could "stick his submarine where it hurts." He criticised the plan as a PR stunt.

This prompted Musk to describe Unsworth a "pedo guy" baselessly on Twitter. He later apologised and deleted the original tweet, but then revived the feud in August by asking why Unsworth hadn't sued him yet. He then doubled down on his original pedophile comments in an email to BuzzFeed, suggesting Unsworth was a "child rapist", again without offering proof.

Unsworth then sued for libel.

You can read Musk's motion to dismiss here:

Original author: Shona Ghosh

  71 Hits
Jan
15

How AI can mitigate supply chain issues

From AT&T's blockbuster deal to acquire Time Warner and AppNexus to Adobe's $4.75 billion bet on Marketo, 2018 was a big year for advertising and marketing-tech deals.

For years, venture capital firms and acquirers have chased "mad-tech" companies with the goal of loosening Facebook and Google's chokehold on digital advertising. Meanwhile, Amazon has emerged as a new threat to both the duopoly and smaller ad-tech companies.

This year produced some big deals. For example:

Facebook, Google and Amazon loomed over such deals. According to eMarketer, Facebook and Google controlled 56.8% of US digital ad dollars this year while Amazon will take 2.7%. Google has its tentacles deep into ad tech, powering and managing the data from ads served on millions of websites.

Read more: 'The industry is looking for alternatives to the duopoly': Here are the winners and losers of AT&T's acquisition of AppNexus

Ad-tech firms need to prove that they can make money

Increasing pressure from the tech giants means that there could be less M&A activity in 2019, Jay MacDonald, CEO of the investment bank Digital Capital Advisors, told Business Insider.

Meanwhile, investors are concerned with ad-tech companies' profitability.

"Companies out of necessity and survival are going to need to get profitable. They've known that, but now they're really starting to work on it," he said. "The ad markets tend to be fickle — they like the shiny, new object. If you're not profitable, you're no longer the new, shiny object."

There's a glut of companies who do the same thing

MacDonald said a growing number of ad-tech and mar-tech firms are vying to solve the same problem, making it hard for ad-tech firms to build bigger businesses. Take mobile marketing. A group of location-based companies like Verve, GroundTruth and PlaceIQ have long pitched their data to marketers as a way to better target ads, but these companies struggle to build big-enough audiences to attract advertisers.

Competition is stiff in programmatic advertising, too, where a growing number of vendors are vying for the same commoditized display ad impression. Companies like MediaMath and The Trade Desk have started to pitch technology like artificial intelligence and roots in connected TV advertising to set themselves apart.

Both OpenX and MediaMath went through leadership restructuring and layoffs this year.

"There's too many lookalike companies that are not the dominant player in their vertical," MacDonald said.

The growth in lookalike companies has led ad-tech firms to be more transparent in how they package ad deals, said Nate Woodman, U.S. chief data officer at Havas Media. As more marketers scrutinize so-called ad-tech taxes, companies like MediaMath are starting to break down the costs involved in media for buyers, then bundle the ad deals with data costs.

"The last couple of years have shed a lot of light on the ad-tech tax, and I'm putting out next year as something dramatically being done about it," he said. "The conversations with the data and media owners are turning more into bundling across technology, hardware, data and media and finding a combined price for all of that."

Marketers are looking for less "off the shelf" tech

One advantage that independent ad-tech and mar-tech firms have over giants like Google and Adobe is the ability to customize tech stacks for brands.

Instead of pitching marketers on the same generic set of tools, ad-tech companies can build tech pipes that are specific to them, which can be a big selling point with brands.

That's why Mac Delaney, SVP of media investment and innovation at Merkle, believes that marketers will lean harder on smaller ad-tech firms in 2019.

"Marketers will centralize on one platform for a much longer period of time, maybe forever, and that may not be [Google's] DoubleClick Bid Manager all the time," he said.

Original author: Lauren Johnson

  66 Hits
Jan
09

The goofy and weird products of CES 2023

Since Sir Martin Sorrell's sudden departure as chief of WPP earlier this year, he set up S4 Capital to create a global advertising, marketing and ad tech company by acquisition. That was followed by two big deals — MightyHive and MediaMonks.

Business Insider caught up with Sorrell offstage at its IGNITION Conference in New York in December, where he weighed in on the agency holding company model, WPP, and advertising measurement. Our interview has been edited and condensed.

Tanya Dua: With MediaMonks and MightyHive, S4 seems to have the programmatic and digital production side of the equation figured out. What's next?

Sir Martin Sorrell: We almost have the complete train set, probably about, three-quarters to seven-eighths of the set. I'd like to see a little bit more in content and a little bit more in first-party data. But it's difficult to find good assets, and they're expensive. On the data side, there's stuff that I really like, but pricing is hard. When IPG bought Acxiom, they seemed to leave behind the best asset [LiveRamp], and I wonder why that was.

Dua: The agency holding companies are making huge changes as well. Will that model as we know it survive?

Sorrell: They'll survive, but there will be more consolidation. I can't remember a time when it's been more revolutionary.

Dua: What is your opinion on the VMLY&R and Wunderman-J. Walter Thompson mergers at WPP?

Sorrell: VMLY&R was something that I initiated. [VMLY&R CEO] Jon Cook and I fully agreed that it was going to happen. We were going to put Geometry into it as well. But I think it was a mistake for Jon not to have been more magnanimous. He would have done himself and his people at VML a lot of good by calling it Y&RVML.

I can understand the idea of making it digital-first by implication, so you put Wunderman before Thompson and VML before Y&R, but it means the death of the Y&R and Thompson brand. I was in Argentina when it was announced, and Y&R and JWT in Argentina mean something.

These decisions are difficult to make, but when you make them, you have to blend them in. You have to go out and talk to the troops and explain why you're doing it, because if you don't, you will lose their hearts and minds.

Read more: Sir Martin Sorrell says the advertising industry reminds him of Burning Man, and should embrace 'radical change'

Dua: Do these moves signal the death of creative agencies? You don't seem to be shopping for creative assets for S4.

Sorrell: You're living in the 19th century if you define creativity like Don Draper. The definition of creativity is shifting. Believe it or not, data analysts can be creative. People who do digital can be creative. Data doesn't destroy creativity, but enhances it, informs it and makes it more effective.

Dua: So who is S4 competing with? The consulting firms?

Sorrell: I don't worry too much about the industry. What I worry about is what does S4 deliver in terms of data, driving content and driving media planning, buying or programmatic. Several clients have said to me that is their model. They have their first-party data at the core, and that drives what they do from a content point of view and what they do on the media planning and buying side.

The acid test of S4 will be whether the combination works effectively and has correctly analyzed what clients want. The mantra — it's a terrible mantra in many respects — is doing it faster, better, cheaper, and more efficiently.

Dua: You've said before that measurement needs to be improved. Some advertising executives have gone over to the measurement side recently. What are your thoughts on that?

Sorrell: Comscore is a tragedy. We invested in Comscore when I was at WPP, and they had a massive opportunity. I was really disappointed with the way that was handled. I'm just as hopeful now as I was before. With Nielsen, I think [new CEO] David Kenny will make a difference. It's too early to tell. But there's a big opportunity there.

Dua: Has Amazon started to challenge Google and Facebook's dominance?

Sorrell: In terms of market cap, it has already. In terms of advertising, Amazon has a long way to [go], but it will challenge on advertising and search. 55% of product searches in the US, according to Kantar, are delivered or initiated through Amazon. Those are the three, the troika, if you ignore the Eastern challenge, which includes Tencent and Alibaba.

Original author: Tanya Dua

  61 Hits
Jan
08

Building a greener future begins with buildings

The UK's Defence Secretary, Gavin Williamson, said he has 'grave, very deep concerns' about using equipment from Chinese firm Huawei in Britain's 5G infrastructure.

According to The Times, Williamson said the UK would need to examine the possible security threats as it upgrades its mobile networks over the next two years.

"I have grave, very deep concerns about Huawei providing the 5G network in Britain. It's something we'd have to look at very closely," he said. "We've got to look at what partners such as Australia and the US are doing in order to ensure that they have the maximum security of that 5G network and we've got to recognise the fact, as has been recently exposed, that the Chinese state does sometimes act in a malign way."

Huawei is one of the most popular consumer smartphone brands in the world and sells more phones than Apple globally. But Western governments are sounding the alarm over Huawei's core telecommunications business, due to concerns its equipment contains flaws that enable spying by the Chinese government.

The company has always denied that its equipment contains "backdoors" in this way. In a statement to The Times, Huawei said it had "never been asked by any government to build any backdoors or interrupt any networks, and we would never tolerate such behaviour by any of our staff."

The UK is due to shift over to superfast 5G networks from 2019, with telcos such as BT and O2 beginning to run small-scale trials. There are also broader concerns about having a Chinese company dominate so much of the UK's critical infrastructure.

REUTERS/Stringer

Alex Younger, the head of M16, warned earlier in December that the UK needed to examine its relationships with Chinese tech companies closely.

He said at the time: "We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken a very definite position."

Read more: An arrest, a debutante ball, and 3 marriages: Inside the lives of the super rich Huawei dynasty

The US has taken a much stronger stance against Huawei, reportedly pressuring local telcos like AT&T not to sell the firm's smartphones. And in August 2018, president Donald Trump signed a bill banning Huawei and another Chinese firm, ZTE, from use by the government and contractors. According to the Wall Street Journal, the US has asked its allies to follow suit. Both Huawei and ZTE are banned in Australia from having any part in its 5G networks.

The UK's biggest telecoms firm, BT, has already said it will remove Huawei's equipment from its existing EE mobile networks, and won't use its kit in its 5G network. The company said the decision was made to bring EE's networks in line with its existing legacy infrastructure.

Huawei is still permitted to sell phones in the UK and, given its difficulties in the US, Europe remains one of its biggest consumer markets. The Chinese firm also has a facility in Banbury, Oxford, which runs security tests on its own equipment. That facility is regularly scrutinised by British intelligence agency GCHQ.

Original author: Shona Ghosh

  65 Hits
Jan
10

Why customer-focused product development is crucial to staying competitive

This year had been a tough one for Apple. But things could get a whole lot better for the company in 2019.

Apple's stock is well positioned to outshine its peers among the big tech companies, said Gene Munster, a managing partner at Loup Ventures and a longtime tech stock analyst.

Changes in the way Apple reports its financial results, in the regulatory landscape, and in wireless technology will all benefit the company in the coming year, allowing it to distance itself from the other companies in the group of FAANGs — Facebook, Amazon, Apple, Netflix, and Google parent Alphabet — he said.

"Apple will be the best performing FAANG stock in 2019," Munster said as part of a blog post laying out Loup's predictions for the tech industry for the coming year.

That would be a welcome relief for the company's investors. Despite a rebound on Wednesday, Apple's stock is down 5.7% in the year to date and has underperformed the broader market as well as all of its big-tech peers except for Facebook.

Apple's reporting changes could be a good thing for its stock

Part of what has worried investors of late has been the company's iPhone sales. The company sold fewer smartphones than Wall Street expected in its most recent quarter, and the number it sold in its most recent fiscal year was barely more than in sold in its previous year.

Loup Ventures' Gene Munster is bullish on Apple going into next year. Brian Ach/Getty Images for LocationWorld Adding to those concerns, the company announced last month that starting next year it would stop disclosing the number of iPhones it sells each quarter. Many investors and analysts interpreted that announcement as a sign that the company believed its smartphone sales would start to decline.

But Munster thinks the changes Apple is making to its financial reporting will benefit the company and its stock by focusing investors attention on its overall revenue and earnings growth, rather than on how many iPhones it sells each quarter.

The changes should also highlight the growing importance of Apple's services business, he said. That business promises to be more profitable than its device sales. As investors start to focus on that business, they should start to accord Apple a higher price-to-earnings multiple that takes into account the services segment's growth and profit potential, he said.

"We believe the theme of Apple as a Service will slowly take root in 2019," Munster said.

Read this:Investors focused on Apple's disappointing iPhone sales are missing the company's hidden goldmine

Apple's going to benefit from not being Facebook or Google

Apple will also benefit from simply not being Facebook, Google, and Amazon, he said. All three of those companies are facing increasing regulatory scrutiny over their data-collection practices and market dominance. Munster's Loup colleague, Doug Clinton, forecasts that the US will pass a data privacy law next year that will constrain Facebook and Google in particular. Such a prospect could hinder their stocks, but likely would have little affect on Apple, whose business model is not built around similar data collection.

"Facebook, Google, and Amazon will be facing regulatory headwinds," Munster said.

The iPhone maker could also benefit from the wireless industry's latest technological evolution. Carriers are starting to roll out their 5G — or fifth generation — networks, which promise much faster speeds and much greater capacity.

Investors are going to get excited about 5G

Apple isn't expected to roll out its first 5G phones until 2020 at the earliest. But investors will likely start getting excited next year about what the new technology will mean for the company's future smartphone sales. That's because the ability to connect to the fast new networks will be big deal for the company's customers, Munster said.

"5G will be the biggest new iPhone 'feature' since the larger-screen iPhone 6 in 2014," he said.

The release of that phone spurred record unit sales for Apple that the company has yet to surpass.

A big year next year isn't a sure thing for Apple, of course. An economic downturn would hit the company just like many others, Munster acknowledged. Even so, he still think the company will stand out from the pack.

"If there's a prolonged slowdown, it will be negative for shares of AAPL, but we would still expect Apple to 'outperform' the rest of FAANG," he said.

Original author: Troy Wolverton

  76 Hits
Jan
12

Quantum machine learning (QML) poised to make a leap in 2023 

With the stock markets facing turbulent times, many investors are likely wondering where to invest.

Colin Sebastian has some suggestions.

Although talk of recession is increasingly in the air, Sebastian, a financial analyst who covers internet and technology stocks for Baird Equity Research, is betting that the stock selloff in recent months is simply a market correction, not the advent of an economic downturn. If that's the case, the internet and video game software sectors should be poised for a big rebound, he said.

"We think it is reasonable to consider a more optimistic outcome" than a recession, Sebastian said in a research report issued Wednesday.

Baird Equity Research analyst Colin Sebastian studied how tech stocks performed after market corrections. CNBC/YouTube That would have been a remarkable statement after the huge selloff investors saw in recent weeks and have seen in recent months. But he may be on to something, given the market's rebound on Wednesday.

To figure out what investors could expect in the case of a rebound, and where they should place their bets, Sebastian took a look at how the companies he follows performed after the four most recent market corrections.

On average, the internet companies he covers saw their stocks rise 11% in the six months after those corrections. The video game companies did slightly better, rising 12%.

But those averages mask a lot of variation among the different companies.

Among the 15 companies he studied, just three traded higher six months after each of the four corrections on which he focused: Google parent Alphabet, Facebook, and Activision Blizzard. All three were also the best performers when it came to volatility — they each posted the lowest variance from their average price during those rebound periods.

But that doesn't mean he think each one of those companies is a good bet this time around. Instead, here are his top picks:

Original author: Troy Wolverton

  73 Hits