Entrepreneurs are invited to the 392nd FREE online 1Mby1M mentoring roundtable on Thursday, March 29, 2018, at 8 a.m. PDT/11 a.m. EDT/8:30 p.m. India IST. If you are a serious entrepreneur, register...

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Sramana Mitra: I did a startup in AI 20 years ago. That was not when AI was really happening. Mack Sundaram: There you go. It was incredible to get that opportunity. It was a great experience for me....

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Dr. Anita Sands is a global technology and business leader, public speaker, and advocate for the advancement of women. She currently serves on the board of three Silicon Valley public companies...

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The One Million by One Million (1Mby1M) global virtual accelerator is yet another benefit granted to NetApp startups through a partnership between the two companies. NetApp has awarded six startups...

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This discussion explores Machine Learning apps in financial services. Sramana Mitra: Let’s start by introducing our audience to yourself and Featurespace. Dave Excell: I’m the Founder of...

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After an Ars Technica report that Facebook surreptitiously scrapes call and text message data from Android phones and has done so for years, the scandal-burdened company has responded that it only collects that information from users who have given permission.

Facebook’s public statement, posted on its press site, comes a couple of days after it took out full page newspaper ads to apologize for the misuse of data by third-party apps as it copes with fallout from the Cambridge Analytica scandal (follow the story as it develops here). In the ad, founder and chief executive officer Mark Zuckerberg wrote “We have a responsibility to protect your information. If we can’t, we don’t deserve it.”

The company’s response to the Ars Technica story, however, struck a different tone, with Facebook titling the post “Fact Check: Your Call and SMS History.” It said “You may have seen some recent reports that Facebook has been logging people’s call and SMS (text) history without their permission. This is not the case,” before going on to explain that call and text history logging is included with an opt-in feature on Messenger or Facebook Lite for Android that “people have to expressly agree to use” and that they can turn off at any time, which would also delete any call and text data shared with that app.

Ars Technica has already amended its original post with a response to Facebook’s statement, saying it contradicts several of its findings, including the experience of users who shared their data with the publication.

“In my case, a review of my Google Play data confirms that Messenger was never installed on the Android devices I used,” wrote Ars Technica IT and national security editor Sean Gallagher in the amendment to his post. “Facebook was  installed on a Nexus tablet I used and on the Blackphone 2 in 2015, and there was never an explicit message requesting access to phone call and SMS data. Yet there is call data from the end of 2015 until late 2016, when I reinstalled the operating system on the Blackphone 2 and wiped all applications.”

In its statement, Facebook said “Contact importers are fairly common among social apps and services as a way to more easily find the people you want to connect with. This was first introduced in Messenger in 2015, and later offered as an option in Facebook Lite, a lightweight version of Facebook for Android .”

When people first sign up for Messenger or Facebook Lite on Android or log into Messenger on an Android device, they see a screen giving them the option to continuously upload contacts as well as call and text history. Facebook added that on Messenger, users are then given three options: to turn the feature on, “learn more” for more information or “not now” to skip it. On Facebook Lite, they get two options: turn it on or skip. If users who opted in change their minds later, Facebook said they could turn it off in the app’s settings, with the option of turning off continuous call and text history logging while keeping contact uploading enabled or deleting all contact information they’ve uploaded from that app.”

Facebook emphasized in bold text that it “never sell this data, and this feature does not collect the content of your text messages or calls.”

Even though the opt-in screens do state that granting permission will “continuously upload info” about contacts and call and text history, it is arguable that many users don’t really understand what that means and that instead of saying “this lets friends find each other on Facebook and helps us create a better experience for everyone” (a message sweetened with a saccharine cartoon of a figure texting a little heart), Facebook should really be giving more details about what exactly will be recorded and why.

With the Cambridge Analytica scandal still fresh on everyone’s minds, Facebook’s apparent willingness to place the onus for protecting personal data on users who already feel victimized is unlikely to help them regain any goodwill. But even people who truly understand the implications of the feature and chose to opt-in anyway did so assuming that their data would be guarded as Facebook promised. As the Cambridge Analytica fiasco threw into sharp relief, that hasn’t always been the case.

The American Midwest has a long history of making stuff. During the 20th century, it was the manufacturing center for the nation, and indeed much of the world. It’s still where a surpassing majority of agricultural commodities are grown and processed. But is it also a major producer of technology startups? Maybe not as much as the coasts, but the Midwest’s bustling metropoli and vast expanses of rural land prove to be fertile ground for quite a bit of startup activity.

And that’s what we’re going to take a look at here. In a similar vein to our recent analysis of startup fundraising in the South, we’ll break down the region into its constituent parts, assessing deal and dollar volume trends in the Midwest’s two primary sub-regions, some of its individual states and the most active metropolitan areas in the U.S.’s midsection.

And, to be clear, this is not Crunchbase News’s first foray into the region. We’ve covered the region’s seed-stage interest in AI and hard tech, a few notable rounds and have always included the Midwest in all manner of data-spelunking expeditions. And to this, we’ll add a deep dive into the numbers.

Defining the midwest

Borders and boundaries are a deep well of disputes. To preempt debate, we use the U.S. Census Bureau’s definition of the Midwest region which, unlike its definition of the South, shouldn’t be too controversial. If you have something against Kansas or Ohio being included in this group, take it up with the Feds.

The good folks at the Census Bureau split the Midwest into two distinct — and rather unimaginatively named — sub-regions: the West North Central and East North Central states, which are separated by the Mississippi River. We’ve included the map below.

By splitting the Midwest into two distinct parts, we’ll be able to see where most of the startup and funding activity is concentrated. Spoiler alert: The farther west you go, the startup population (and the population itself) grows more scattered.

Capital flows into Midwestern startups

Based only on reported data in Crunchbase, the Midwest appears to be affected by the same phenomenon as the rest of the country. Crunchbase News has previously found that the number of seed and early-stage deals has gone off a cliff in the U.S., resulting in a top-heavy market featuring many large, late-stage deals. And this wouldn’t be a problem if it weren’t for a shortfall in new startups to fill the next cycle of early-stage funding. The “hollowing out” of the Midwestern venture deal pipeline becomes readily apparent when you look at funding data for the past several years, which you can find in the chart below.

To wit, deal volume is down markedly since 2014, as Crunchbase News reported in its Q4 2017 report of startup funding activity in the U.S. and Canada. But somewhat counterintuitively, the amount of money being invested into startups is on the rise in the Midwest and throughout many other parts of the country, reaching fresh multi-year highs in 2017. Almost one full quarter into 2018, the trend appears to continue unabated.

But this chart abstracts away a lot of nuance, so let’s take a closer look at the region and its states.

Focusing in on Midwestern deal and dollar volume

We’ll start first with deal volume, because that’s a fairly decent indicator of a geographic region’s level of startup activity. Below, we’ve plotted venture deal volume, divided by sub-region.

Again, based on the reported data from Crunchbase, we found that deal counts have been on a downward trend for several years. And though some of this may be attributable to reporting delays, projected deal volume data for the whole of the U.S. and Canada (fourth chart down in the Q4 quarterly report) shows a years’-long downtrend. There’s no reason to believe that startup activity in the Midwest is materially different from the rest of the U.S. and Canada.

But what about the relative “balance of power” between the two sub-regions? At least when it comes to deal volume, has one sub-region waxed while the other waned? To a limited extent, the answer is yes. Between 2012 and 2017, the percentage share of all Midwestern dealflow going to West North Central states like the Dakotas, Minnesota and Missouri has grown from 25.4 percent to 31.2 percent, up by nearly one-fifth in relative terms.

Now let’s check out dollar volume. The chart below displays aggregate reported venture capital dollar volume raised by startups in the Midwest.

As far as the amount of money Midwestern startups have raised over time, the trendline is generally up and to the right. But that’s not the only way this differs from the deal volume data we looked at earlier. For dollar volume, there appears to be no appreciable change in the “balance of power” between the two sub-regions since 2012. Depending on the year, East North Central states like Illinois, Michigan and Ohio raked in between 70 and 78 percent of total dollar volume, but that variance doesn’t appear in an orderly trend.

Where are most Midwestern deals done?

We started first at the regional level, then compared smaller groupings of states. Now, let’s see how deal and dollar volume is distributed on a state-by-state level. Doing so will point to the states that lead the region in venture-backed startup activity. Below, you’ll find a chart of how deal volume is split between the top five Midwestern states.

And here is how dollar volume is distributed.

As we saw with our analysis of the South, the top five Midwestern states for deal volume are the same five top-ranked states for dollar volume. But there is some notable variation in how these states rank among each other and the amount of deal and dollar volume they account for.

Considering that Illinois is home to Chicago and a number of downstate universities with deep tech startup roots, the fact that it places first for both metrics shouldn’t come as much of a surprise.

What might be more of a head-scratcher is Minnesota, which ranks third in deal volume but second in dollar volume. Why does it switch places with Ohio? The answer could lie in the industrial mix which, in the case of Minnesota, includes a disproportionately high number of medical device and other life sciences companies, which typically take a lot of capital to get off the ground.

The top Midwestern startup cities

Longtime readers of Crunchbase News may remember a ranking of Midwestern startup cities we wrote back in August 2017. However, here we’re just focusing on deal and dollar volume over the past 15 months, since the start of 2017.

Let’s start first with the top 10 Midwestern cities as measured by number of startup funding rounds.

And in the chart below, you can see the top cities, as ranked by venture dollar volume, from the same period of time.

In both rankings, four of the top five cities are the same, but the odd one out appears to be Columbus, Ohio. Although there were a fairly large number of rounds raised by startups in that metro area, most of the rounds were fairly small by national standards. And one of the main reasons why Kansas City, Missouri jumped so much in the dollar volume rankings was a $100 million Series F round raised by C2FO.

But, again, as far as the Midwest goes, everything pales in comparison to Chicago alone.

For many, the Midwest is in a kind of Goldilocks zone. The East and West coasts seem to hold more or less equal sway over the culture and economy and most of its cities are neither too big nor too small. The only extreme it seems to occupy is its winter weather.

Facebook chief Mark Zuckerberg has taken out a full page ad in the Washington Post, the New York Times, the Wall Street Journal and six UK papers today to apologize Cambridge Analytica scandal, according to CNN’s Brian Stelter.

The ad starts in bold letters, saying:

“We have a responsibility to protect your information. If we can’t, we don’t deserve it.”

The ad was published on Sunday, following Zuck’s first public acknowledgement of the issue on Facebook and a subsequent media tour earlier this week.

Congress has also put Mark Zuckerberg on notice to potentially come speak with them, with Senator Kennedy of Louisiana encouraging Zuck to “do the common sense thing and roll up his sleeves and take a meaningful amount of time talking to [them].”

For those of you still unsure what’s going on with Facebook and Cambridge Analytica, you can see a full play-by-play here.

Here’s the full transcript from the print ad:

We have a responsibility to protect your information. If we can’t, we don’t deserve it.

You may have heard about a quiz app built by a university researcher that leaked Facebook data of millions of people in 2014. This was a breach of trust, and I’m sorry we didn’t do more at the time. We’re now taking steps to make sure this doesn’t happen again.

We’ve already stopped apps like this from getting so much information. Now we’re limiting the data apps get when you sign in using Facebook.

We’re also investigating every single app that had access to large amounts of data before we fixed this. We expect there are others. And when we find them, we will ban them and tell everyone affected.

Finally, we’ll remind you of which apps you’ve given access to your information — so you can shut off the ones you don’t want anymore.

Thank you for believing in this community. I promise to do better for you.

Mark Zuckerberg

Auris Health (née Auris Surgical Robots) has done a pretty good job flying under the radar, in spite of raising a massive amount of capital and listing one of the key people behind the da Vinci surgical robot among its founders. With FDA clearance finally out of the way, however, the Redwood City-based startup medical startup is ready to start talking.

This week, Auris revealed the Monarch Platform, which swaps the da Vinci’s surgical approach for something far less invasive. The system utilizes the common endoscopy procedure to a insert a flexible robot into hard to reach places inside the human body. A doctor trained on the system uses a video game-style controller to navigate inside, with help from 3D models.

Monarch’s first target is lung cancer, the which tops the list of deadliest cancers. More deaths could be stopped, if doctors were able to catch the disease in its early stages, but the lung’s complex structures, combined with current techniques, make the process difficult. According to the company,  “More than 90-percent of people diagnosed with lung cancer do not survive, in part because it is often found at an advanced stage.”

“A CT scan shows a mass or a lesion,” CEO Frederic Moll tells TechCrunch. “It doesn’t tell you what it is. Then you have to get a piece of lung, and if it’s a small lesion. It isn’t that easy — it can be quite a traumatic procedure. So you’d like to do it a very systematic and minimally invasive fashion. Currently it’s difficult with manual techniques and 40-percent of the time, there is no diagnosis. This is has been a problem for many years and [inhibits] the ability of a clinician to diagnose and treat early-stage cancer.

Auris was founded half a dozen years ago, in which time the company has managed to raise a jaw-dropping $500 million, courtesy of Mithril Capital Management, Lux Capital, Coatue Management and Highland Capital. The company says the large VC raise and long runway were necessary factors in building its robust platform.

“We are incredibly fortunate to have an investor base that is supportive of our vision and committed to us for the long-term,” CSO Josh DeFonzo tells TechCrunch. “The investments that have been made in Auris are to support both the development of a very robust product pipeline, as well as successful clinical adoption of our technology to improve patient outcomes.”

With that funding and FDA approval for Monarch out of the way, the company has an aggressive timeline. Moll says Auris is hoping to bring the system to hospitals and outpatient centers by the end of the year. And once it’s out in the wild, Monarch’s disease detecting capabilities will eventually extend beyond lung cancer.

“We have developed what we call a platform technology,” says Moll. “Bronchoscopy is the first application, but this platform will do other robotic endoscopies.”

There is a familiar trope in Hollywood cyberwarfare movies. A lone whiz kid hacker (often with blue, pink, or platinum hair) fights an evil government. Despite combatting dozens of cyber defenders, each of whom appears to be working around the clock and has very little need to use the facilities, the hacker is able to defeat all security and gain access to the secret weapon plans or whatever have you. The weapon stopped, the hacker becomes a hero.

The real world of security operations centers (SOCs) couldn’t be further from this silver screen fiction. Today’s hackers (who are the bad guys, by the way) don’t have the time to custom hack a system and play cat-and-mouse with security professionals. Instead, they increasingly build a toolbox of automated scripts and simultaneously hit hundreds of targets using, say, a newly discovered zero-day vulnerability and trying to take advantage of it as much as possible before it is patched.

Security analysts working in a SOC are increasingly overburdened and overwhelmed by the sheer number of attacks they have to process. Yet, despite the promises of automation, they are often still using manual processes to counter these attacks. Fighting automated attacks with manual actions is like fighting mechanized armor with horses: futile.

Nonetheless, that’s the current state of things in the security operations world, but as V.Jay LaRosa, the VP of Global Security Architecture of payroll and HR company ADP explained to me, “The industry, in general from a SOC operations perspective, it is about to go through a massive revolution.”

That revolution is automation. Many companies have claimed that they are bringing machine learning and artificial intelligence to security operations, and the buzzword has been a mainstay of security startup pitch decks for some times. Results in many cases have been nothing short of lackluster at best. But a new generation of startups is now replacing soaring claims with hard science, and focusing on the time-consuming low-hanging fruit of the security analyst’s work.

One of those companies, as we will learn shortly, is JASK. The company, which is based in San Francisco and Austin, wants to create a new market for what it calls the “autonomous security operations center.” Our goal is to understand the current terrain for SOCs, and how such a platform might fit into the future of cybersecurity.

Data wrangling and the challenge of automating security

The security operations center is the central nervous system of corporate security departments today. Borrowing concepts from military organizational design, the modern SOC is designed to fuse streams of data into one place, giving security analysts a comprehensive overview of a company’s systems. Those data sources typically include network logs, an incident detection and response system, web application firewall data, internal reports, antivirus, and many more. Large companies can easily have dozens of data sources.

Once all of that information has been ingested, it is up to a team of security analysts to evaluate that data and start to “connect the dots.” These professionals are often overworked since the growth of the security team is generally reactive to the threat environment. Startups might start with a single security professional, and slowly expand that team as new threats to the business are discovered.

Given the scale and complexity of the data, investigating a single security alert can take significant time. An analyst might spend 50 minutes just pulling and cleaning the necessary data to be able to evaluate the likelihood of a threat to the company. Worse, alerts are sufficiently variable that the analyst often has to repeatedly perform this cleanup work for every alert.

Data wrangling is one of the most fundamental problems that every SOC faces. All of those streams of data need to be constantly managed to ensure that they are processed properly. As LaRosa from ADP explained, “The biggest challenge we deal with in this space is that [data] is transformed at the time of collection, and when it is transformed, you lose the raw information.” The challenge then is that “If you don’t transform that data properly, then … all that information becomes garbage.”

The challenges of data wrangling aren’t unique to security — teams across the enterprise struggle to design automated solutions. Nonetheless, just getting the right data to the right person is an incredible challenge. Many security teams still manually monitor data streams, and may even write their own ad-hoc batch processing scripts to get data ready for analysis.

Managing that data inside the SOC is the job of a security information and event management system (SIEM), which acts as a system of record for the activities and data flowing through security operations. Originally focused on compliance, these systems allow analysts to access the data they need, and also log the outcome of any alert investigation. Products like ArcSight and Splunk and many others here have owned this space for years, and the market is not going anywhere.

Due to their compliance focus though, security management systems often lack the kinds of automated features that would make analysts more efficient. One early response to this challenge was a market known as user entity behavior analytics (UEBA). These products, which include companies like Exabeam, analyze typical user behavior and search for anomalies. In this way, they are meant to integrate raw data together to highlight activities for security analysts, saving them time and attention. This market was originally standalone, but as Gartner has pointed out, these analytics products are increasingly migrating into the security information management space itself as a sort of “smarter SIEM.”

These analytics products added value, but they didn’t solve the comprehensive challenge of data wrangling. Ideally, a system would ingest all of the security data and start to automatically detect correlations, grouping disparate data together into a cohesive security alert that could be rapidly evaluated by a security analyst. This sort of autonomous security has been a dream of security analysts for years, but that dream increasingly looks like it could become reality quite soon.

LaRosa of ADP told me that “Organizationally, we have got to figure out how we help our humans to work smarter.” David Tsao, Global Information Security Officer of Veeva Systems, was more specific, asking “So how do you organize data in a way so that a security engineer … can see how these various events make sense?”

JASK and the future of “autonomous security”

That’s where a company like JASK comes in. Its goal, simply put, is to take all the disparate data streams entering the security operations center and automatically group them into attacks. From there, analysts can then evaluate each threat holistically, saving them time and allowing them to focus on the sophisticated analytical part of their work, instead of on monotonous data wrangling.

The startup was founded by Greg Martin, a security veteran who previously founded threat intelligence platform ThreatStream (now branded Anomali). Before that, he worked as an executive at ArcSight, a company that is one of the incumbent behemoths in security information management.

Martin explained to me that “we are now far and away past what we can do with just human-led SOCs.” The challenge is that every single security alert coming in has to go through manual review. “I really feel like the state of the art in security operations is really how we manufactured cars in the 1950s — hand-painting every car,” Martin said. “JASK was founded to just clean up the mess.”

Machine learning is one of these abused terms in the startup world, and certainly that is no exception in cybersecurity. Visionary security professionals wax poetic about automated systems that instantly detect a hacker as they attempt to gain access to the system and immediately respond with tested actions designed to thwart them. The reality is much less exciting: just connecting data from disparate sources is a major hurdle for AI researchers in the security space.

Martin’s philosophy with JASK is that the industry should walk before it runs. “We actually look to the autonomous car industry,” he said to me. “They broke the development roadmap into phases.” For JASK, “Phase one would be to collect all the data and prepare and identify it for machine learning,” he said. LaRosa of ADP, talking about the potential of this sort of automation, said that “you are taking forty to fifty minutes of busy work out of that process and allow [the security analysts] to get right to the root cause.”

This doesn’t mean that security analysts are suddenly out of a job, indeed far from it. Analysts still have to interpret the information that has been compiled, and even more importantly, they have to decide on what is the best course of action. Today’s companies are moving from “runbooks” of static response procedures to automated security orchestration systems. Machine learning realistically is far from being able to accomplish the full lifecycle of an alert today, although Martin is hopeful that such automation is coming in later phases of the roadmap.

Martin tells me that the technology is being used by twenty customers today. The company’s stack is built on technologies like Hadoop, allowing it to process significantly higher volumes of data compared to legacy security products.

JASK is essentially carving out a unique niche in the security market today, and the company is currently in beta. The company raised a $2m seed from Battery in early 2016, and a $12m series A led by Dell Technologies Capital, which saw its investment in security startup Zscaler IPO last week.

There are thousands of security products in the market, as any visit to the RSA conference will quickly convince you. Unfortunately though, SOCs can’t just be built with tech off the shelf. Every company has unique systems, processes, and threat concerns that security operations need to adapt to, and of course, hackers are not standing still. Products need to constantly change to adapt to those needs, which is why machine learning and its flexibility is so important.

Martin said that “we have to bias our algorithms so that you never trust any one individual or any one team. It is a careful controlled dance to build these types of systems to produce general purpose, general results that applies across organizations.” The nuance around artificial intelligence is refreshing in a space that can see incredible hype. Now the hard part is to keep moving that roadmap forward. Maybe that blue-haired silver screen hacker needs some employment.

Hip hop stars are taking their reputations to Wall Street and Sand Hill road.

Unlike their rock star brethren, who’ve historically been disinterested in dabbling with startups, quite a few hip hop artists have amassed good-sized portfolios. They’ve seen a few big hits too, most recently including a massive up round for zero-commission stock trading platform Robinhood, which counted Jay-Z, Nas and Snoop Dogg among its earlier backers.

But just how deep does the hip hop-startup relationship go and where is it headed? To shed some light on that question, we put together a review of Crunchbase data on the startup investment activity of famous musicians. We looked at both hip hop and pop stars, culling a list of 21 artists who are either active investors or have joined one or more rounds in recent years.

The general conclusion: Artists are doing more deals, raising more funds and backing more companies that graduate to up rounds and exits. Here are a few examples:

Besides getting a slice of Robinhood, Jay-Z and his entertainment company, Roc Nation, also saw an early portfolio company, flight club startup JetSmarter, go on to raise financing a year ago at a reported valuation more than $1.5 billion. Roc Nation also made headlines this week for investing in Promise, a startup providing alternatives to incarceration for people who can’t afford bail.QueensBridge Venture Partners, the investment fund co-founded by Nas, was an early-stage investor in video doorbell maker Ring, which Amazon just bought for $1.1 billion. The firm could also see some paper gains this week in the much-anticipated market debut of Dropbox, which it backed in a 2014 Series C round. In addition, QueensBridge participated in a $25 million Series B round for cryptocurrency trading platform Coinbase back in 2013. Coinbase’s last reported valuation was around $1.6 billion.Casa Verde Capital, a cannabis-focused venture fund co-founded by Snoop Dogg, has closed its debut fund with $45 million. Just this week it backed a $3.5 million round for vape manufacturer Green Tank.

That’s not to say everything a star touches turns multi-platinum. We found quite a few flops in their portfolios and assembled a list here of 10 startups now shuttered that counted a hip hop or pop star among their backers.

Of course, flops are part of life for early-stage investors, so there’s no reason we’d expect celebrities to be an exception. Moreover, most of the now-shuttered companies were not heavily capitalized by venture standards.

However, there are some higher-profile or more heavily funded companies on the flop list. One is Washio, a laundry delivery service, which raised $17 million from Nas and 20 other investors before hanging itself out to dry in 2016. Another is Viddy, an app for shooting and sharing video clips backed by Roc Nation.

Why the rich, hip and famous like startups

A number of venture pundits and pop culture mavens have previously pontificated why celebrities, and hip hop stars in particular, are drawn to startups.

One possibility is that rap music and startups resemble each other at the earliest stages, postulates Cam Houser, CEO of the 3 Day Startup Program. Rap music starts with a rapper and a producer. This duality, he says, is similar to the beginning stages of a startup, which commonly also brings together two people, a business and a technical co-founder.

Rap and startup entrepreneurship are also both longshot career tracks that celebrate raw ambition and unabashed self-promotion. To make it, however, both require an excellent grasp of what sells in the real world.

Branding is perhaps the most common rationale provided for the celebrity-startup connection. With their massive fan bases, swooning coverage and millions of social media followers, celebrities can certainly help get the word out about a new product or app. That said, the attention usually works only if said product also has compelling attributes of its own.

One of the less controversial explanations is that becoming and remaining famous requires many of the same skills and qualities as running an entrepreneurial venture, including an exceptional degree of tenacity.

It’s also true that in venture capital and the music business, it’s the hits that matter. It helps that we’re seeing plenty of those. 

The swipe is where the similarity ends. Raya is less like Tinder and more like a secret society. You need a member’s recommendations or a lot of friends inside to join, and you have to apply with an essay question. It costs a flat $7.99 for everyone, women and celebrities included. You show yourself off with a video slideshow set to music of your choice. And it’s for professional networking as well as dating, with parallel profiles for each.

Launched in March 2015, Raya has purposefully flown under the radar. No interviews. Little info about the founders. Not even a profile on Crunchbase’s startup index. In fact, in late 2016 it quietly acquired video messaging startup Chime, led by early Facebooker Jared Morgenstern, without anyone noticing. He’d become Raya’s first investor a year earlier. But Chime was fizzling out after raising $1.2 million. “I learned that not everyone who leaves Facebook, their next thing turns to gold,” Morgenstern laughs. So he sold it to Raya for equity and brought four of his employees to build new experiences for the app.

Now the startup’s COO, Morgenstern has agreed to give TechCrunch the deepest look yet at Raya, where the pretty, popular and powerful meet each other.

Temptation via trust

“Raya is a utility for introducing you to people who can change your life. Soho House uses physical space, we’re trying to use software,” says Morgenstern, referencing the global network of members-only venues.

We’re chatting in a coffee shop in San Francisco. It’s an odd place to discuss Raya, given the company has largely shunned Silicon Valley in favor of building a less nerdy community in LA, New York, London and Paris. The exclusivity might feel discriminatory for some, even if you’re chosen based on your connections rather than your wealth or race. Though people already self-segregate based on where they go to socialize. You could argue Raya just does the same digitally.

Morgenstern refuses to tell me how much Raya has raised, how it started or anything about its founding team beyond that they’re a “Humble, focused group that prefers not to be part of the story.” But he did reveal some of the core tenets that have reportedly attracted celebrities like DJs Diplo and Skrillex, actors Elijah Wood and Amy Schumer and musicians Demi Lovato and John Mayer, plus scores of Instagram models and tattooed creative directors.

Raya’s iOS-only app isn’t a swiping game for fun and personal validation. Its interface and curated community are designed to get you from discovering someone to texting if you’re both interested to actually meeting in person as soon as possible. Like at a top-tier university or night club, there’s supposed to be an in-group sense of camaraderie that makes people more open to each other.

Then there are the rules.

“This is an intimate community with zero-tolerance for disrespect or mean-spirited behavior. Be nice to each other. Say hello like adults,” says an interstitial screen that blocks use until you confirm you understand and agree every time you open the app. That means no sleazy pick-up lines or objectifying language. You’re also not allowed to screenshot, and you’ll be chastized with a numbered and filed warning if you do.

It all makes Raya feel consequential. You’re not swiping through infinite anybodies and sorting through reams of annoying messages. People act right because they don’t want to lose access. Raya recreates the feel of dating or networking in a small town, where your reputation follows you. And that sense of trust has opened a big opportunity where competitors like Tinder or LinkedIn can’t follow.

Self-expression to first impression

Until now, Raya showed you people in your city as well as around the world — which is a bit weird since it would be hard to ever run into each other. But to achieve its mission of getting you offline to meet people in-person, it’s now letting you see nearby people on a map when GPS says they’re at hot spots like bars, dance halls and cafes. The idea is that if you both swipe right, you could skip the texting and just walk up to each other.

“I’m not sure why Tinder and the other big meeting-people apps aren’t doing this,” says Morgenstern. But the answer seems obvious. It would be creepy on a big public dating app. Even other exclusive dating apps like The League that induct people due to their resume more than their personality might feel too unsavory for a map, since having gone to an Ivy League college doesn’t mean you’re not a jerk. Hell, it might make that more likely.

But this startup is betting that its vetted, interconnected, “cool” community will be excited to pick fellow Raya members out of the crowd to see if they have a spark or business synergy.

That brings Raya closer to the Holy Grail of networking apps where you can discover who you’re compatible with in the same room without risking the crash-and-burn failed come-ons. You can filter by age and gender when browsing social connections, or by “Entertainment & Culture,” “Art & Design,” and “Business & Tech” buckets for work. And through their bio and extended slideshows of photos set to their favorite song, you get a better understanding of someone than from just a few profile pics on other apps.

Users can always report people they’ve connected with if they act sketchy, though with the new map feature I was dismayed to learn they can’t yet report people they haven’t seen or rejected in the app. That could lower the consequences for finding someone you want to meet, learning a bit about them, but then approaching without prior consent. However, Morgenstern insists, “The real risk is the density challenge.”

Finding your tribe

Raya’s map doesn’t help much if there are no other members for 100 miles. The company doesn’t restrict the app to certain cities, or schools like Facebook originally did to beat the density problem. Instead, it relies on the fact that if you’re in the middle of nowhere you probably don’t have friends on it to pull you in. Still, that makes it tough for Raya to break into new locales.

But the beauty of the business is that since all users pay $7.99 per month, it doesn’t need that many to earn plenty of money. And at less than the price of a cocktail, the subscription deters trolls without being unaffordable. Morgenstern says, “The most common reason to stop your subscription: I found somebody.” That “success = churn” equation drags on most dating apps. Since Raya has professional networking as well, though, he says some people still continue the subscription even after they find their sweetheart.

“I’m happily in a relationship and I’m excited to use maps,” Morgenstern declares. In that sense, Raya wants to expand those moments in life when you’re eager and open to meet people, like the first days of college. “At Raya we don’t think that’s something that should only happen when you’re single or when you’re 20 or when you move to a new city.”

The bottomless pits of Tinder and LinkedIn can make meeting people online feel haphazard to the point of exhaustion. We’re tribal creatures who haven’t evolved ways to deal with the decision paralysis and the anxiety caused by the paradox of choice. When there’s infinite people to choose from, we freeze up, or always wonder if the next one would have been better than the one we picked. Maybe we need Raya-like apps for all sorts of different subcultures beyond the hipsters that dominate its community, as I wrote in my 2015 piece, “Rise Of The Micro-Tinders”. But if Raya’s price and exclusivity lets people be both vulnerable and accountable, it could forge a more civil way to make a connection.

As Dropbox had its IPO moment this morning, more than 10 years after launching, we can finally put one myth to rest. Dropbox and Box were never targeting the same customers.

As Anshu Sharma, founder at Prekari, a stealth startup and former partner at Storm Venture tweeted earlier today:

Same goes for investors, analysts and journalists. If you don’t believe they’re different, consider that in Dropbox’s S-1 paperwork they filed with SEC, you will note they didn’t even list Box as a primary competitor: “We compete with Box on a more limited basis in the cloud storage market for deployments by large enterprises,” the company wrote.

They had something in common, of course, but Dropbox has always been about managing files in the cloud, while Box has been focused on enterprise content use case cases in the cloud — and that’s a very different approach.

As Shria Ovide pointed out in her analysis on Bloomberg after the filing, the S-1 also proved that Dropbox has always been a “a consumer software company with a side hustle.” That side hustle was the enterprise business. (She also pointed out on Twitter that they may be the first company to use a cupcake emoji in their S-1, which is actually kind of cool).

Consumer with a dash of enterprise

It turns out that vast majority of Dropbox’s combined business and consumer revenue of more than a $1 billion came from consumers.  Dropbox has always offered an attractive consumer storage tool. It’s well integrated into desktop OSs and it has a nice mobile tool.

I use it and for $10 a month I get a terabyte of storage. I can back up my life there and it incorporates neatly into Finder on my Mac. When I capture screens they go automatically to Dropbox. It provides a place to back up my photos from my phone. It’s convenient and easy and it works.

It seemed that such a tool would translate nicely to business, but Alan Pelz-Sharpe, founder and principal analyst at Deep Analysis, who has been following this space for years, says Dropbox has always primarily been confined to teams on the business side. “Dropbox is primarily a consumer company with 500 million users, [with] only about 300,000 teams using their business offering,” he told TechCrunch.

That’s not to say they aren’t trying to capture more of the enterprise. In the weeks prior to the IPO, they made a pair of announcements designed to increase their enterprise credibility including one with Google to store G Suite documents natively in Dropbox and one with Salesforce to embed Dropbox folders in Salesforce Sales and Marketing clouds.

For now though, even with this business push, Pelz-Sharpe points out that most of Dropbox’s business customers are small teams of 3 or more people with a dash of larger implementations. “Nor are people building much on top of Dropbox in the way of business applications – it remains primarily a very efficient file sharing system,” he explained.

Differences with Box

This in contrast to Box, which has been working primarily with large enterprise companies for years to solve much more complex problems around content. Aaron Levie from Box said he’s absolutely rooting for Dropbox, but they have always been going after different markets, since Box decide to go enterprise about two years into its existence.

“We are fundamentally building two very different companies. Both are large markets. While there is no limit to the scale they could become, we have built a very different business around how do you serve [large companies] and deal with unstructured company data — and it’s a very different product set [from Dropbox],” Levie told TechCrunch.

Dropbox was off to a great start today with stock soaring, up nearly 40 percent in early trading, but however Dropbox ends up doing in the days and months ahead, they will do it having made their mark mostly as a consumer company — and that’s fine. If they continue to build their enterprise business over time, it will be all the better for them, but it turns out up until now, the only thing Box and Dropbox had in common was both had “box” in their names.

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Have a look at Dropbox’s debut at the TechCrunch 50 (the precursor to TechCrunch Disrupt) in 2008:

If there’s one thing I learned from my time as both a journalist at The Wall Street Journal and Forbes and, now, advising a global venture capital firm on communications, it’s that storytelling can make or break a company.

This is especially true the more complicated and arcane a company’s technology is. Stories about online-dating and burrito-delivery apps are easily understood by most people. But if a company specializes in making technology for hybrid-cloud data centers, or parsing specialized IT alerts and cybersecurity warnings, the storytelling task becomes much harder — but, I would argue, even more important.

Sure, a wonky company will still be able to talk easily to its customers and chat up nerdy CIOs at trade shows. But what happens when they raise a Series C or D round of financing and actually need to reach a broader audience — like really big, potential business partners, potential acquirers, public investors or high-level business reporters? Often, they’re stuck.

It can be painful to watch. When I was a reporter, I was amazed at the buzzwords thrown at me by some technology companies trying to get me to write about them. For fun, my colleagues and I would put some of these terms into online “buzzword bingo” websites just to see what indecipherable company descriptions they would spit out. (Example: “An online, cloud-based, open-source hyperconverged Kubernetes solution.”) Often, when pressed, PR representatives couldn’t explain to me what these companies actually did.

These companies obviously never made it into my stories. And I would argue that many of them suffered more broadly from their overall lack of high-profile press coverage; large business publications like the ones for which I worked target the very big-company executives and investors these later-stage startups were trying to reach.

Now, of course, I’m on the other side of that reporter/company equation — and I often feel like a big chunk of my job is working as a technology translator.

A natural-born storyteller

So why is this B2B storytelling problem so common, and arguably getting worse? Lots of reasons. Many of these hard-to-understand companies are founded by highly technical engineers for whom storytelling is (not surprisingly) not a natural skill. In many cases, their marketing departments are purely data-driven, focused on demand generation, ROI and driving prospects to an online sales funnel — not branding and high-level communications. As marketing technology has gotten more and more advanced and specialized, so have marketing departments.

As a result, many B2B and enterprise-IT companies are often laser-focused on talking about their products’ specific bells and whistles, staying in “sell mode” for a technical audience and cranking out wonky whitepapers and often-boring product press releases. They’re less adept at taking a step back to address the actual business benefits their product enables. Increasingly, this tech-talk also plays well with the legions of hyper-specialized, tech-news websites that have proliferated to serve every corner of the technology market, making some executives think there’s no need to target higher-level press.

One prominent marketing and PR consultant I know, who has worked with hundreds of Silicon Valley startups since the 1980s, says she is “shocked” by how poorly many senior tech industry CEOs today communicate their companies’ stories. Many tend to “shun” communications, considering it too “soft” in this new era of data-obsessed marketing, the consultant Jennifer Jones, recently told me. But in the end, poor communications and storytelling can create or exacerbate business problems, and often affect a company’s valuation.

So how do you get to a point where you can talk about your company in plain terms, and reach the high-level audiences you’re targeting?

One tactic, obviously, is to ditch the jargon when you need to. The pitch you use on potential customers — who likely already have an intimate understanding of your market and the specific problems you’re trying to solve — is not as relevant for other audiences.

A big fund manager at Fidelity or T. Rowe Price, or a national business journalist, probably knows, for example, that cloud computing is a big trend now, or that companies are buying more technology to battle complex cybersecurity attacks. But do they really understand the intricacies of “hybrid-cloud” data center setups? Or what a “behavioral attack detection solution” does? Probably not.

The David versus Goliath angle

Another tip is to put your company story in a larger, thematic context. People can better understand what you do if you can explain how you fit into larger technology and societal trends. These might include the rise of free, open-source software, or the growing importance of mobile computing.

It’s also helpful to talk about what you do in relation to larger, more established players. Are you nipping away at the slow-growing, legacy business of Oracle/EMC/Dell/Cisco? As a journalist, I once wrote a story about a small public networking company called F5 Networks that specialized in making “application delivery controllers.” But the story mostly focused on F5’s battle with a much larger competitor; in fact, the editors titled the story “One-Upping Cisco.” That’s the angle most readers were likely to care about. Journalists, particularly, love these David versus Goliath type stories, and national business publications are full of them.

Another key storytelling strategy is leveraging your customers. If your business is boring to the average person, try to get one of your household-name customers to talk publicly about how they use your technology. Does your supply-chain software help L’Oréal sell more lipstick, or UPS make faster package deliveries?

One of our portfolio companies had a nice business-press hit a few years ago by talking about how their software helped HBO stream “Game of Thrones” episodes. (The service had previously crashed because too many people were trying to watch the show.) You can leverage these highly visible customers for case studies on your website. These can be great fodder for your sales team as well as later press interviews, as long as they’re well-written and understandable. Try to get more customers to agree to this type of content when you sign the contract with them.

From “Mad Men” to math men

Finally, there’s the issue of marketing leadership inside tech companies. In my experience, most smaller, B2B or enterprise IT-focused startups have CMOs or VPs of marketing who are more focused on data and analytics than brand communications — more “math men” than “Mad Men.” This isn’t surprising, as these companies often sell data-rich products and have business models where PR and general advertising don’t directly drive sales (unlike, say, a company making a food-delivery app). The CEOs of these companies value data and analytics, too.

I encourage B2B tech CEOs to focus on hiring CMOs with some brand/communications experience, or at least a willingness to outsource it to competent partners who are experts in that area. After a couple of early rounds of funding, you should be outgrowing your highly specialized PR firm (if you even have one) that focuses on a narrow brand of trade publications, for example. These firms usually don’t have contacts at the bigger, national business and technology outlets that are read by big mutual fund managers, and the business development folks at Cisco or Oracle. Hiring ex-journalists — not technical experts — to write content and develop messaging can be a good idea, too.

In other words, start focusing on high-level storytelling earlier, not when you’ve already raised $100 million in venture funding and have several hundred employees. By that point, it can simply be too late: Your company has already been typecast by the trade press and written off by higher-level reporters, and sometimes even potential business partners, as too niche-y and hard to understand.

As a journalist, I learned that everyone has a story to tell. It’s up you to figure out what your company’s is, and how to tell that story in a compelling, understandable fashion. If you do, I’m pretty sure the business benefits will follow.

It’s no secret that much of the legal industry is build on reusable content. Most law firms have their own customized set of standard documents (like NDAs or Wills), but lawyers or associates still have to customize these documents by hand each time a client needs them drafted.

Lawyaw, part of YC’s Winter ’18 class, is building software to automate this process by letting lawyers turn previously completed documents into smart templates.

Here’s how it works: Lawyers can drag an already customized world document into Lawyaw’s platform and it will automatically use natural language processing to first figure out what sections need to be replaced, then actually fill in those sections with the correct personalized phrases and variables. For example, software will automatically detect and replace a client’s name, contact information, location, and even more complicated things like scope of engagement.

If a variable isn’t automatically detected Lawyaw lets users manually select it, which the software will remember for future uses. Currently the platform only identifies about 50% of all variables in a document (up from 10% when it launched), but of those detected the accuracy rate for autofilling correct information is 99%. So essentially the algorithm is optimizing for quality over quantity right now, but that should equalize as the natural language processing gets better over time.

Of course Lawyaw isn’t the only solution for automatically populating legal documents. But most other solutions use complex document customization that requires knowledge of conditionals, tags and syntax. Plus, the platform has a few other useful features like integrated e-signing and a directory of over 5,000 standard court forms that can be customized.

Lawyaw charges each user $59 per month or $39 if paid annually. Interested users can just sign ups themselves instead of having to be subjected to firm-wide demos or annoying sales reps, both of which are still the status quo for legal software.

So far over 1,000 law firms have signed up, with 900 lawyers actively drafting over 24,000 total documents to date.

Cake Technologies, the U.K. fintech startup that wanted to make it more convenient to pay your restaurant or bar bill, has been acquired by American Express — as the credit card behemoth plans to beef up its payment options for Amex members.

According to sources the deal quietly completed in October last year for a final price of $13.3 million (approx. £10.1m). However, due to an eleventh-hour preferential debt round and after fees, only some shareholders made a profit. I also understand from one source that Cake had raised a total of £4.5 million in equity and £1.4 million in debt. Part of the equity funding was a £1 million crowdfunding round on Crowdcube in 2015.

Confirming the acquisition, American Express gave TechCrunch the following statement:

Last year American Express acquired Cake Technologies. This year, we will be on-boarding Cake and their technologies to collaborate on ways to provide our Card Members with enhanced service and value in the dining space, which is an area many of our Card Members are passionate about.

A spokesperson for American Express declined to comment on the exact financial terms of the deal, but said that it was a “good outcome for Cake employees, previous investors and American Express”. They did confirm, however, that Cake employees are now employees of American Express.

This includes Cake founders Charlotte Kohlmann and Michelle Songy, who hold the positions of Vice President Global Dining Platform Solutions at American Express, and Director Global Platform Dining Solutions at American Express, respectively.

“We are excited to have Cake on board with us and look forward to collaborating on bringing our Card Members exciting new capabilities in the dining space soon,” adds the American Express spokesperson.

The back story to Cake’s eventual exit makes for interesting reading. According to a source with knowledge of the startup’s path to a sale, who spoke to TechCrunch on the condition of anonymity, it was very close to raising a £5 million Series A in the fall of 2016 before the company’s founders walked away for “ethical reasons,” although the source declined to diverge what these were. This then left Cake in a precarious situation financially as the company could not find another VC to step in quickly enough before running out of cash.

In the holidays/early 2017, the board of Cake put together a rescue round that was structured in the form of debt and designed to give the startup more runway to try to achieve a trade sale. All existing shareholders were given the chance to participate on a pro rata basis, although some declined due to the substantial risk of doubling down.

The loan was also structured so that, should the company get acquired, these eleventh hour investors would get a multiple preferential return. This, I’m told, explains why some investors made money from the exit, while others, including some Crowdcube backers, lost money, even possibly after factoring in EIS tax breaks.

In May 2017, American Express first made an offer to acquire Cake. The startup passed due diligence in late June, but American Express pulled the deal in mid-July for unknown reasons. Determined to get the sale back on track, Cake co-founder Kohlmann flew to New York unannounced and the deal eventually closed in October.

“Despite the complications and lengthy process, Amex did a really good deal here,” says my source. “It is clear that Cake is now a very important part of their digital strategy and the purchase price looks like good value in that context. Cake’s user experience will be a benefit to users of the Amex app once fully integrated and Cake’s basket level POS integrations will give Amex better insight into exactly what products their customers are buying rather than just where they go and how much they spend”.