The House and Senate finally agree on something: Robocalls

In these times of political strife, it’s nice that despite our differences we can still band together as a nation in the face of a catastrophe that affects us all equally. I speak, of course, of robocalls, and it seems that the House and Senate have put their differences aside for the present in order to collaborate on a law combating this scourge.

Despite a great deal of FCC bluster, a few high-profile fines and some talk from telecoms about their plans to implement new anti-robocall standards, half the country’s phones are still blowing up regularly with recordings and scammers on the other side.

If regulators find it difficult to act, ultimately what’s needed is legislation, and lawmakers — who no doubt are receiving the calls themselves, which might have given the task a special urgency.

As often happens in Congress, two competing versions of the bill emerged to address this issue, and both passed in their respective chambers earlier this year. Now the leaders of the committees involved have announced an “agreement in principle” that will hopefully allow them to pass a unified version of the bill.

The “Pallone-Thune TRACED Act” owes its name to its primary sponsors — Rep. Pallone (D-NJ) and Sen. John Thune (R-SD) — and the earlier and superior acronym from the House act, Telephone Robocall Abuse Criminal Enforcement and Deterrence.

“Our agreement will require telephone carriers to verify calls and allow robocalls to be blocked in a consistent and transparent way, all at no extra charge to consumers. The agreement also gives the FCC and law enforcement the ability to quickly go after scammers,” said Rep. Pallone in a statement accompanying the news.

The bill text is expected to be finalized in a matter of days, and it will hopefully make it onto the legislative calendar in a hurry.

Meanwhile, the FCC has been waiting patiently for telecoms to implement SHAKEN/STIR, an anti-spoofing measure they can implement on their networks, repeatedly warning that it will eventually take action if they don’t. A resolution in June made clear that robocalls from outside the country are legal to block, but didn’t say anything about potential fees. Fortunately the act mentioned above does make sure consumers don’t get dinged for the service.

Those crappy pre-installed Android apps can be full of security holes

If you’ve ever bought an Android phone, there’s a good chance you booted it up to find it pre-loaded with junk you definitely didn’t ask for.

These pre-installed apps can be clunky, annoying to remove, rarely updated… and, it turns out, full of security holes.

Security firm Kryptowire built a tool to automatically scan a large number of Android devices for signs of security shortcomings and, in a study funded by the U.S. Department of Homeland Security, ran it on phones from 29 different vendors. Now, the majority of these vendors are ones most people have never heard of — but a few big names like Asus, Samsung and Sony make appearances.

Kryptowire says they found vulnerabilities of all different varieties, from apps that can be forced to install other apps, to tools that can be tricked into recording audio, to those that can silently mess with your system settings. Some of the vulnerabilities can only be triggered by other apps that come pre-installed (thus limiting the attack vector to those along the supply chain); others, meanwhile, can seemingly be triggered by any app the user might install down the road.

Kryptowire has a full list of observed vulnerabilities here, broken down by type and manufacturer. The firm says it found 146 vulnerabilities in all.

As Wired points out, Google is well aware of this potential attack route. In 2018 it launched a program called the Build Test Suite (or BTS) that all partner OEMs must pass. BTS scans a device’s firmware for any known security issues hiding amongst its pre-installed apps, flagging these bad apps as Potentially Harmful Applications (or PHAs). As Google puts it in its 2018 Android security report:

OEMs submit their new or updated build images to BTS. BTS then runs a series of tests that look for security issues on the system image. One of these security tests scans for pre-installed PHAs included in the system image. If we find a PHA on the build, we work with the OEM partner to remediate and remove the PHA from the build before it can be offered to users.

During its first calendar year, BTS prevented 242 builds with PHAs from entering the ecosystem.

Anytime BTS detects an issue we work with our OEM partners to remediate and understand how the application was included in the build. This teamwork has allowed us to identify and mitigate systemic threats to the ecosystem.

Alas, one automated system can’t catch everything — and when an issue does sneak by, there’s no certainty that a patch or fix will ever arrive (especially on lower-end devices, where long-term support tends to be limited).

We reached out to Google for comment on the report, but have yet to hear back.

Update — Google’s response:

We appreciate the work of the research community who collaborate with us to responsibly fix and disclose issues such as these.

Facebook’s Libra code chugs along ignoring regulatory deadlock

“5 months and growing strong” the Libra Association announced today in a post about its technical infrastructure that completely omits the fierce regulatory backlash to its cryptocurrency.

Forty wallets, tools and block explorers plus 1,700 GitHub commits have how now been built on its blockchain testnet that’s seen 51,000 mock transactions in the past two months. Libra nodes that process transactions are now being run by Coinbase, Uber, BisonTrails, Iliad, Xapo, Anchorage and Facebook’s Calibra. Six more nodes are being established, plus there are 8 more getting set up from members who lack technical teams, meaning all 21 members have nodes running or in the works.

But the update on the Libra backend doesn’t explain how the association plans to get all the way to its goal of 100 members and nodes by next year when it originally projected a launch. And it gives no nod to the fact that even if Libra is technically ready to deploy its mainnet in 2020, government regulators in the U.S. and around the world still won’t necessarily let it launch.

Facebook itself seems to be hedging its bets on fintech in the face of pushback against Libra. This week it began the launch of Facebook Pay, which will let users pay friends, merchants and charities with a single payment method across Facebook, Messenger, WhatsApp and Instagram.

Facebook Pay could help the company drive more purchases on its platform, get more insights into transactions and lead merchants to spend more on ads to lure in sales facilitated by quicker payments. That’s most of what Facebook was trying to get out of Libra in the first place, beyond better financial inclusion.

Last month’s congressional testimony from Facebook CEO Mark Zuckerberg was less contentious than Libra board member David Marcus’ appearances on Capitol Hill in July. Yet few of lawmakers’ core concerns about how Libra could facilitate money laundering, endanger users’ assets and give Facebook even more power amidst ongoing anti-trust investigations were assuaged.

This set of announcements from the Libra Core summit of technical members was an opportunity for the project to show how it was focused on addressing fraud, security and decentralization of power. Instead, the Libra Association took the easy route of focusing on what the Facebook-led development team knows best: writing code, not fixing policy. TechCrunch provided questions to the Libra Association and some members, but the promised answers were not returned before press time.

[Update: In response to our article and criticisms about the lack of acknowledgement of regulatory issues, a Libra spokesperson provided the following statement.]

Today’s Libra Core Summit was the first step towards a collaborative development plan for Libra Core and Move. The summit was designed to educate and support members in areas include running a Libra node, building a Libra wallet, scaling the Libra network and interoperability between Libra wallet. There are many facets of the Libra project that are working in tandem. The Libra Association executive leadership team is continuing the critical work to listen to, engage and collaborate with regulators around the world.

For those organizations without a technical team to implement a node, the Libra Association is working on a strategy to support deployment in 2020, when the Libra Core feature set is complete” the Association’s Michael Engle writes. “The Libra Association intends to deploy 100 nodes on the mainnet, representing a mix of on-premises and cloud-hosted infrastructure.” It feels a bit like Libra is plugging its ears.

Having proper documentation, setting up CLAs to ease GitHub contributions, standardizing the Move code language, a Bug Bounty program and a public technical roadmap are a good start. But until the Association can answers Congress’ questions directly, they’re likely to refuse Libra approval, which Zuckerberg said the project won’t launch without.

Why Salesforce is moving Marketing Cloud to Microsoft Azure

When Salesforce announced this week that it was moving Marketing Cloud to Microsoft Azure, it was easy to see this as another case of wacky enterprise partnerships. But there had to be sound business reasons why the partnership came together, rather than going with AWS or Google Cloud Platform, both of which are also Salesforce partners in other contexts.

If you ask Salesforce, it says it was ultimately because of compatibility with Microsoft SQL.

“Salesforce chose Azure because it is a trusted platform with a global footprint, multi-layered security approach, robust disaster recovery strategy with auto failover, automatic updates and more,” a Salesforce spokesperson told TechCrunch. “Marketing Cloud also has a long standing relationship with Microsoft SQL which makes the transition to SQL on Azure a natural decision.”

Except for the SQL part, Microsoft’s chief rivals at AWS and Google Cloud Platform also provide those benefits. In fact, each of those reasons cited by the spokesperson — with the exception of SQL — are all part of the general cloud infrastructure value proposition that all the major cloud vendors provide.

There’s probably more to it than simply compatibility. There is also a long-standing rivalry between the two companies, and why in spite of their competition, they continue to make deals like this in the spirit of co-opetition. We spoke to a few industry experts to get their take on the deal to find out why these two seeming rivals decided to come together.

Retailer’s dilemma

Tony Byrne, founder and principal analyst at Real Story Group, thinks it could be related to the fact it’s a marketing tool and some customers may be wary about hosting their businesses on AWS while competing with Amazon on the retail side. This is a common argument for why retail customers in particular are more likely to go with Microsoft or Google over AWS.

“Salesforce Marketing Cloud tends to target B2C enterprises, so the choice of Azure makes sense in one context where some B2C firms are wary of Amazon for competitive reasons. But I’d also imagine there’s more to the decision than that,” Byrne said.

D-Wave sticks with its approach to quantum computing

Earlier this month, at the WebSummit conference in Lisbon, D-Wave and Volkswagen teamed up to manage a fleet of buses using a new system that, among other things, used D-Wave’s quantum technology to help generate the most efficient routes. While D-Wave’s 2000Q only played a small part in this process, it’s nevertheless a sign that quantum computing is slowly getting ready for production use and that D-Wave’s approach, somewhat controversial in its early days, is paying off.

Unlike other players in the quantum computing market, D-Wave always bet on quantum annealing as its core technology. This technology lends itself perfectly to optimization problems like the kind of routing problem the company tackled with VW, as well as sampling problems, which, in the context of quantum computing, are useful for improving machine learning models, for example. Depending on their complexity, some of these problems are nearly impossible to solve with classical computers (at least in a reasonable time).

Grossly simplified, with quantum annealing, you are building a system that almost naturally optimizes itself for the lowest energy state, which then represents the solution to your problem.

Microsoft, IBM, Rigetti and others are mostly focused on building gate-model quantum computers and they are starting to see results (with the exception of Microsoft, which doesn’t have a working computer just yet and is hence betting on partnerships for the time being). But this is also a far more complex problem. And while you can’t really compare these technologies qubit to qubit, it’s telling that D-Wave’s latest machines, the Advantage, will feature 5,000 qubits — while the state of the art among the gate-model proponents is just over 50. Scaling these machines up is hard, though, especially given that the industry is still trying to figure out how to manage the noise issues.

D-Wave remains the only major player that’s betting on annealing, but the company’s CEO Vern Brownell remains optimistic that this is the right approach. “We feel more strongly about our decision to do quantum annealing now that there are a few companies that actually have quantum computers that people can access,” he said in an interview earlier this month.

“We have customers, Volkswagen included, that have run problems against those other computers and seeing what they can actually do and it’s vastly different. Our capability is many orders of magnitude faster for most problems than what you can do with other quantum computers. And that is because of the choice of quantum annealing. And that is because quantum healing is more robust to errors.” Error correction, he argues, remains the fundamental problem, and will hamper the performance of these systems for the foreseeable future. “And in order to move into the enterprise or any kind of practical application, that error correction needs to be wrestled with,” he noted.

VC Cyan Banister on who decides what at Founders Fund (and much more)

Cyan Banister is an American success story. A homeless teenager who originally supported herself by making hemp necklaces, then silk-screen T-shirts, she went on to become a self-taught engineer and to later hold several management roles at the security startup IronPort. It was a life-changing experience for her. She made an early fortune when it sold to Cisco for $830 million in 2007. She also met her husband, Scott Banister, who co-founded the company, and the two together and separately began writing seed-stage checks, including to SpaceX, Uber and a long list of companies that are now household names.

When seed-stage valuations began soaring to levels that gave them both pause, they hit the brakes, and Banister, a self-described workaholic, headed over to AngelList as an “ev-angel-list” to help recruit people like herself to its platform. Soon after, Peter Thiel’s Founders Fund reached out to her and invited her to become a partner.

In a wide-ranging conversation at a San Francisco event on Wednesday, we talked with Banister about that path, along with her investing style, which still sees her make angel investments of $1.5 million or less in companies that are often ambitiously futuristic or boringly practical and very much needed. (She kidded that they balance out one another.)

We also chatted about Founders Fund, which has changed considerably since its 2005 founding yet maintained its reputation as a top fund — and we discussed why she thinks many of its original partners no longer live in San Francisco.

Among the things we learned: that Founders Fund doesn’t have Monday morning partner meetings, as do many firms. It doesn’t even have weekly meetings, with Banister instead describing a highly decentralized operation. “We have very few meetings, actually,” she said. “We have a brunch every two or three weeks that’s an hour, hour-and-a-half long. We submit the agenda over Slack; sometimes, we have nothing to talk about and it’s very short. You literally get a plate of food, talk about the one or two items, and you’re done.”

Founders Fund also has quarterly off-sites, typically at a partner’s house, and these are “all day affairs,” she said, adding that the team “doesn’t talk about specific deals. We talk about the future, about what’s exciting to all of us, what our different strategies might be.”

As for how decisions get made, Banister explained that the voting structure is dependent on the size of the check. “So you’d meet with one or two or three or four partners, depending on your [investing] stage,” she told attendees. Because she’s looking at very early-stage startups, for example, she doesn’t have to meet with many people to make a decision. As “dollar amounts gets larger,” she continued, “you’re looking at full GP oversight,” including the involvement of senior members like Brian Singerman and Keith Rabois, and “that can a little more difficult.”

Asked how involved Thiel himself is in these decisions, Banister said that there’s a certain threshold above which he is always involved. Pressed on what that number is, Banister smiled, adding, “Let’s just say it’s a lot.”

Pointing to the other senior members of the team, she offered that the partnership doesn’t “need Peter’s advice all the time, but there’s a certain point where he has to get involved and meet the founders. Ideally, it’s a company that we brought in at its early stages and has grown with us and he has already developed a relationship with [its founders]. We also do an off-site once a year, which is a great opportunity for him” to see everyone involved in the firm’s portfolio. “But he’s pretty involved,” she said. “He comes to these brunches and [quarterly] off-sites. We see him more now [since he called it quits in San Francisco and moved to LA] than we did when he lived next door because he’s stuck. If he comes to San Francisco, where’s he going to go? He has to stay in his office,” she joked.

Banister declined to confirm or comment on a recent WSJ report that Founders Fund is in the process of closing on $3 billion in capital commitments across two funds — a flagship fund and an opportunity type of fund to support its companies as they remain private ever longer.

But before we let her go, we asked Banister about turnover at the firm. Specifically, we noted, while Founders Fund was formed by Thiel, along with co-founders Ken Howery, Luke Nosek and Sean Parker, Howery is now the U.S. ambassador to Sweden, Nosek runs a separate fund in Austin called Gigafund and Parker is off doing a variety of other things, many of them also in LA.

She explained that everyone is encouraged to do what they want. For instance, she said, “Ken was encouraged to pursue his political aspirations; that’s something he has always wanted to do.”

But she also acknowledged that San Francisco itself might be a common thread. “It’s too expensive here. That’s the problem. We need to build more housing. We can’t afford people to even serve us in this town, they come in from other cities, they can’t even live here. And that’s a huge problem when you’re investing and your thesis is to invest only in Silicon Valley and the surrounding area.” In fact, Founders Fund is “already starting to look elsewhere [for startups], including in the Midwest,” she said.

As for whether San Francisco is doing enough for founders — or founders enough for San Francisco — Banister suggested both are coming up far short, saying of the city that “it should be the most technologically advanced” in the world. “There’s no reason we shouldn’t be like Tokyo . . . when we gave birth to Airbnb and Uber, and yet our city looks the way it does and operates the way it does and it’s a disaster.”

Tech founders and employees are in a particularly “weird situation” where on the one side a “large part of this city hates technology and hates all of us,” and on the other are people like Salesforce founder Marc Benioff who are funneling money into the city but whose efforts don’t appear to her to be making a difference. “I’ve yet to see a dent” in homelessness, she said as an example. In the meantime, “crime is going up and we now have a district attorney who won’t prosecute crimes that have to do with any sort of quality-of-life [issue]. [San Francisco is] going to start something instead where if your [car] window is broken, they’ll replace it with some kind of window Uber app at a discounted rate.”

The crowd laughed. Some attendees thought she was joking about the window replacement service. She wasn’t. “This is a really bad direction [we’re headed in],” she said. “We need diversity of thinking here, and we don’t have it on the political level, and we all need to get more involved.”

Daily Crunch: TikTok starts experimenting with commerce

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. TikTok tests social commerce

The short-form video app said it’s allowing some users to add links to e-commerce sites (or any other destination) to their profile, while also offering creators the ability to easily send their viewers to shopping websites.

On their own, these changes might not sound that dramatic, and parent company ByteDance characterizes them as experiments. But it could eventually lead TikTok to become a major force in commerce — and to follow the lead of Instagram, where “link in bio” has become one of the most common promotional messages.

2. Despite bans, Giphy still hosts self-harm, hate speech and child sex abuse content

A new report from Israeli online child protection startup L1ght  has uncovered a host of toxic content hiding within the popular GIF-sharing community, including illegal child abuse content, depictions of rape and other toxic imagery associated with topics like white supremacy and hate speech.

3. Lyft is ceasing scooter operations in six cities and laying off 20 employees

Lyft notified employees today that it’s pulling its scooters from six markets: Nashville, San Antonio, Atlanta, the Phoenix area, Dallas and Columbus. A spokesperson told us, “We’re choosing to focus on the markets where we can have the biggest impact.”

4. Takeaways from Nvidia’s latest quarterly earnings

After yesterday’s earnings report, Wall Street seems to have barely budged on the stock price — everyone’s waiting for resolution on some of the key questions facing the company. (Extra Crunch membership required.)

5. Virgin Galactic begins ‘Astronaut Readiness Program’ for first paying customers

The program is being run out of the global headquarters of Under Armour, Virgin Galactic’s partner for its official astronaut uniforms. The training, with instruction from Chief Astronaut Instructor Beth Moses and Chief Pilot Dave Mackay, is required for all Virgin Galactic passengers.

6. AWS confirms reports it will challenge JEDI contract award to Microsoft

In a statement, an Amazon spokesperson suggested that there was possible bias in the selection process: “AWS is uniquely experienced and qualified to provide the critical technology the U.S. military needs, and remains committed to supporting the DoD’s modernization efforts.”

7. SoftBank Vision Fund’s Carolina Brochado is coming to Disrupt Berlin

At SoftBank’s Vision Fund, Brochado focuses on fintech, digital health and marketplace startups. Some of her past investments with both Atomico and SoftBank include LendInvest, Gympass, Hinge Health, Ontruck and Rekki.

Three of Apple and Google’s former star chip designers launch NUVIA with $53M in series A funding

Silicon is apparently the new gold these days, or so VCs hope.

What was once a no-go zone for venture investors, who feared the long development lead times and high technical risk required for new entrants in the semiconductor field, has now turned into one of the hottest investment areas for enterprise and data VCs. Startups like Graphcore have reached unicorn status (after its $200 million series D a year ago) while Groq closed $52M from the likes of Chamath Palihapitiya of Social Capital fame and Cerebras raised $112 million in investment from Benchmark and others while announcing that it had produced the first trillion transistor chip (and who I profiled a bit this summer).

Today, we have another entrant with another great technical team at the helm, this time with a Santa Clara, CA-based startup called NUVIA. The company announced this morning that it has raised a $53 million series A venture round co-led by Capricorn Investment Group, Dell Technologies Capital (DTC), Mayfield, and WRVI Capital, with participation from Nepenthe LLC.

Despite only getting started earlier this year, the company currently has roughly 60 employees, 30 more at various stages of accepted offers, and the company may even crack 100 employees before the end of the year.

What’s happening here is a combination of trends in the compute industry. There has been an explosion in data and by extension, the data centers required to store all of that information, just as we have exponentially expanded our appetite for complex machine learning algorithms to crunch through all of those bits. Unfortunately, the growth in computation power is not keeping pace with our demands as Moore’s Law slows. Companies like Intel are hitting the limits of physics and our current know-how to continue to improve computational densities, opening the ground for new entrants and new approaches to the field.

Finding and building a dream team with a “chip” on their shoulder

There are two halves to the NUVIA story. First is the story of the company’s founders, which include John Bruno, Manu Gulati, and Gerard Williams III, who will be CEO. The three overlapped for a number of years at Apple, where they brought their diverse chip skillsets together to lead a variety of initiatives including Apple’s A-series of chips that power the iPhone and iPad. According to a press statement from the company, the founders have worked on a combined 20 chips across their careers and have received more than 100 patents for their work in silicon.

Gulati joined Apple in 2009 as a micro architect (or SoC architect) after a career at Broadcom, and a few months later, Williams joined the team as well. Gulati explained to me in an interview that, “So my job was kind of putting the chip together; his job was delivering the most important piece of IT that went into it, which is the CPU.” A few years later in around 2012, Bruno was poached from AMD and brought to Apple as well.

Gulati said that when Bruno joined, it was expected he would be a “silicon person” but his role quickly broadened to think more strategically about what the chipset of the iPhone and iPad should deliver to end users. “He really got into this realm of system-level stuff and competitive analysis and how do we stack up against other people and what’s happening in the industry,” he said. “So three very different technical backgrounds, but all three of us are very, very hands-on and, you know, just engineers at heart.”

Gulati would take an opportunity at Google in 2017 aimed broadly around the company’s mobile hardware, and he eventually pulled over Bruno from Apple to join him. The two eventually left Google earlier this year in a report first covered by The Information in May. For his part, Williams stayed at Apple for nearly a decade before leaving earlier this year in March.

The company is being stealthy about exactly what it is working on, which is typical in the silicon space because it can take years to design, manufacture, and get a product into market. That said, what’s interesting is that while the troika of founders all have a background in mobile chipsets, they are indeed focused on the data center broadly conceived (i.e. cloud computing), and specifically reading between the lines, to finding more energy-efficient ways that can combat the rising climate cost of machine learning workflows and computation-intensive processing.

Gulati told me that “for us, energy efficiency is kind of built into the way we think.”

The company’s CMO did tell me that the startup is building “a custom clean sheet designed from the ground up” and isn’t encumbered by legacy designs. In other words, the company is building its own custom core, but leaving its options open on whether it builds on top of ARM’s architecture (which is its intention today) or other architectures in the future.

Building an investor syndicate that’s willing to “chip” in

Outside of the founders, the other half of this NUVIA story is the collective of investors sitting around the table, all of whom not only have deep technical backgrounds, but also deep pockets who can handle the technical risk that comes with new silicon startups.

Capricorn specifically invested out of what it calls its Technology Impact Fund, which focuses on funding startups that use technology to make a positive impact on the world. Its portfolio according to a statement includes Tesla, Planet Labs, and Helion Energy.

Meanwhile, DTC is the venture wing of Dell Technologies and its associated companies, and brings a deep background in enterprise and data centers, particularly from the group’s server business like Dell EMC. Scott Darling, who leads DTC, is joining NUVIA’s board, although the company is not disclosing the board composition at this time. Navin Chaddha, an electrical engineer by training who leads Mayfield, has invested in companies like HashiCorp, Akamai, and SolarCity. Finally, WRVI has a long background in enterprise and semiconductor companies.

I chatted a bit with Darling of DTC about what he saw in this particular team and their vision for the data center. In addition to liking each founder individually, Darling felt the team as a whole was just very strong. “What’s most impressive is that if you look at them collectively, they have a skillset and breadth that’s also stunning,” he said.

He confirmed that the company is broadly working on data center products, but said the company is going to lie low on its specific strategy during product development. “No point in being specific, it just engenders immune reactions from other players so we’re just going to be a little quiet for a while,” he said.

He apologized for “sounding incredibly cryptic” but said that the investment thesis from his perspective for the product was that “the data center market is going to be receptive to technology evolutions that have occurred in places outside of the data center that’s going to allow us to deliver great products to the data center.”

Interpolating that statement a bit with the mobile chip backgrounds of the founders at Google and Apple, it seems evident that the extreme energy-to-performance constraints of mobile might find some use in the data center, particularly given the heightened concerns about power consumption and climate change among data center owners.

DTC has been a frequent investor in next-generation silicon, including joining the series A investment of Graphcore back in 2016. I asked Darling whether the firm was investing aggressively in the space or sort of taking a wait-and-see attitude, and he explained that the firm tries to keep a consistent volume of investments at the silicon level. “My philosophy on that is, it’s kind of an inverted pyramid. No, I’m not gonna do a ton of silicon plays. If you look at it, I’ve got five or six. I think of them as the foundations on which a bunch of other stuff gets built on top,” he explained. He noted that each investment in the space is “expensive” given the work required to design and field a product, and so these investments have to be carefully made with the intention of supporting the companies for the long haul.

That explanation was echoed by Gulati when I asked how he and his co-founders came to closing on this investor syndicate. Given the reputations of the three, they would have had easy access to any VC in the Valley. He said about the final investors:

They understood that putting something together like this is not going to be easy and it’s not for everybody … I think everybody understands that there’s an opportunity here. Actually capitalizing upon it and then building a team and executing on it is not something that just anybody could possibly take on. And similarly, it is not something that every investor could just possibly take on in my opinion. They themselves need to have a vision on their side and not just believe our story. And they need to strategically be willing to help and put in the money and be there for the long haul.

It may be a long haul, but Gulati noted that “on a day-to-day basis, it’s really awesome to have mostly friends you work with.” With perhaps 100 employees by the end of the year and tens of millions of dollars already in the bank, they have their war chest and their army ready to go. Now comes the fun (and hard) part as we learn how the chips fall.

Update: Changed the text to reflect that NUVIA is intending to build on top of ARM’s architecture, but isn’t a licensed ARM core.

Twitter makes its political ad ban official

The ban on political ads announced by Twitter two weeks ago has come into effect, and the rules are surprisingly simple — perhaps too simple. No political content as they define it may be promoted; candidates, parties, governments or officials, PACs and certain political nonprofit groups are banned from promoting content altogether.

The idea intended to be made manifest in these policies is that “political message reach should be earned, not bought,” as the company puts it. It’s hard to argue with that (but Facebook will anyway). The new rules apply globally and to all ad types.

It’s important to make clear at the outset that Twitter is not banning political content, it is banning the paid promotion of that content. Every topic is fair game and every person or organization on Twitter can pursue their cause as before — they just can’t pay to get their message in front of more eyeballs.

In its briefly stated rules, the company explains what it means by “political content”:

We define political content as content that references a candidate, political party, elected or appointed government official, election, referendum, ballot measure, legislation, regulation, directive, or judicial outcome.

Also banned are:

Ads that contain references to political content, including appeals for votes, solicitations of financial support, and advocacy for or against any of the above-listed types of political content.

That seems pretty straightforward. Banning political ads is controversial to begin with, but unclear or complicated definitions would really make things difficult.

A blanket ban on many politically motivated organizations will also help clear the decks. Political action committees, or PACs, and their deep-pocketed cousins the SuperPACs, are banned from advertising at all. That makes sense, since what content would they be promoting other than attempts to influence the political process? 501(c)4 nonprofit organizations, not as publicly notorious as PACs but huge spenders on political causes, are also banned.

There are, of course, exemptions, both for news organizations that want to promote coverage of political issues, and “cause-based” content deemed non-political.

The first exemption is pretty natural — although many news organizations do have a political outlook or ideological bent, it’s a far cry from the practice of donating millions directly to candidates or parties. But not just any site can take advantage — you’ll have to have 200,000 monthly unique visitors, make your own content with your own people and not be primarily focused on a single issue.

The “cause-based” exemption may be where Twitter takes the most heat. As Twitter’s policy states, it will allow “ads that educate, raise awareness, and/or call for people to take action in connection with civic engagement, economic growth, environmental stewardship, or social equity causes.”

These come with some restrictions: They can only be targeted to the state, province or region level — no ZIP codes, so hyper-local influence is out. And politically charged interests may not be targeted, so you can’t send your cause-based ads just to “socialists,” for example. And they can’t reference or be run on behalf of any of the banned entities above.

But it’s the play in the definition that may come back to bite Twitter. What exactly constitutes “civic engagement” and “social equity causes”? Perhaps these concepts were only vaguely defined by design to be accommodating rather than prescriptive, but if you leave an inch for interpretation, you’d better believe bad actors are going to take a mile.

Clearly this is meant to allow promotion of content like voter registration drives, disaster relief work, and so on. But it’s more than possible someone will try to qualify, say, an anti-immigrant rally as “public conversation around important topics.”

I asked Twitter whether additional guidance on the cause-based content rules would be forthcoming, but a representative simply pointed me to the very language I quoted.

That said, policy lead at Twitter Vijaya Gadde said the company will attempt to be transparent with its decisions on individual issues and clear about changes to the rules going forward.

“This is new territory,” she tweeted. “As with every policy we put into practice, it will evolve and we’ll be listening to your feedback.”

And no doubt they shall receive it — in abundance.

You’ve heard of CRISPR, now meet its newer, savvier cousin CRISPR Prime

CRISPR, the revolutionary ability to snip out and alter genes with scissor-like precision, has exploded in popularity over the last few years and is generally seen as the standalone wizard of modern gene-editing. However, it’s not a perfect system, sometimes cutting at the wrong place, not working as intended and leaving scientists scratching their heads. Well, now there’s a new, more exacting upgrade to CRISPR called Prime, with the ability to, in theory, snip out more than 90% of all genetic diseases.

Just what is this new method and how does it work? We turned to IEEE fellow, biomedical researcher and dean of graduate education at Tuft University’s school of engineering Karen Panetta for an explanation.

How does CRISPR Prime editing work?

CRISPR is a powerful genome editor. It utilizes an enzyme called Cas9 that uses an RNA molecule as a guide to navigate to its target DNA. It then edits or modifies the DNA, which can deactivate genes or insert a desired sequence to achieve a behavior. Currently, we are most familiar with the application of genetically modified crops that are resistant to disease.

However, its most promising application is to genetically modify cells to overcome genetic defects or its potential to conquer diseases like cancer.

Some applications of genome editing technology include:

  • Genetically modified mosquitos that can’t carry malaria.
  • In humans, “turning on” a gene that can create fetal type behaving cells that can overcome sickle-cell anemia.

Of course, as with every technology, CRISPR isn’t perfect. It works by cutting the double-stranded DNA at precise locations in the genome. When the cell’s natural repair process takes over, it can cause damage or, in the case where the modified DNA is inserted at the cut site, it can create unwanted off-target mutations.

Some genetic disorders are known to mutate specific DNA bases, so having the ability to edit these bases would be enormously beneficial in terms of overcoming many genetic disorders. However, CRISPR is not well suited for intentionally introducing specific DNA bases, the As, Cs, Ts and Gs that make up the double helix.

Prime editing was intended to overcome this disadvantage, as well as other limitations of CRISPR.

Prime editing can do multi-letter base-editing, which could tackle fatal genetic disorders such as Tay-Sachs, which is caused by a mutation of four DNA letters.

It’s also more precise. I view this as analogous to the precision lasers brought to surgery versus using a hand-held scalpel. It minimized damage, so the healing process was more efficient.

Prime editing can insert, modify or delete individual DNA letters; it also can insert a sequence of multiple letters into a genome with minimal damage to DNA strands.

How effective might Prime editing be?

Imagine being able to prevent cancer and/or hereditary diseases, like breast cancer, from ever occurring by editing out the genes that are makers for cancer. Cancer treatments are usually long, debilitating processes that physically and emotionally drain patients. It also devastates patients’ loved ones who must endure watching helpless on the sidelines as the patient battles to survive.

“Editing out” genetic disorders and/or hereditary diseases to prevent them from ever coming to fruition could also have an enormous impact on reducing the costs of healthcare, effectively helping redefine methods of medical treatment.

It could change lives so that long-term disability care for diseases like Alzheimer’s and special needs education costs could be significantly reduced or never needed.

How did the scientific community get to this point — where did CRISPR/prime editing “come from?”

Scientists recognized CRISPR’s ability to prevent bacteria from infecting more cells and the natural repair mechanism that it initiates after damage occurs, thus having the capacity to halt bacterial infections via genome editing. Essentially, it showed adaptive immunity capabilities.

When might we see CRISPR Prime editing “out in the wild?”

It’s already out there! It has been used for treating sickle-cell anemia and in human embryos to prevent HIV infections from being transmitted to offspring of HIV parents.

So, what’s next?

IEEE engineers, like myself, are always seeking to take the fundamental science and expand it beyond the petri dish to benefit humanity.

In the short term, I think that Prime editing will help generate the type of fetal like cells that are needed to help patients recover and heal as well as developing new vaccines against deadly diseases. It will also allow researchers new, lower cost alternatives and access to Alzheimer’s like cells without obtaining them post-mortem.

Also, AI and deep learning is modeled after human neural networks, so the process of genome editing could potentially help inform and influence new computer algorithms for self-diagnosis and repair, which will become an important aspect of future autonomous systems.

Hulu increases price for live TV by $10, to $55 per month

Hulu just sent an email to subscribers of its Hulu + Live TV plan announcing that the price of the basic live TV plan will increase from $44.99 per month to $54.99 per month.

This is Hulu + Live TV’s second price hike this year, with a $5 increase in January, followed by this twice-as-large increase, which is supposed to take effect on December 18.

In the email, Hulu says this increase “allows us to continue delivering the best live and on-demand TV experience for you.” However, as a the price keeps going up, the price advantage that a “skinny bundle” of TV channels offers over plain old cable starts to shrink.

The streaming service launched its live TV package at the beginning of 2018, and it supposedly passed 1 million subscribers before the year was done.

Hulu’s ownership has also been changing, with Disney becoming a majority shareholder following its acquisition of Fox, and then taking full operational control of the company earlier this year. Hulu is part of Disney’s broader streaming strategy, which saw the company launching its own Disney+ service earlier this week and offering Disney+, ESPN+ and Hulu (without live TV) together in a $12.99 bundle.

More layoffs at pivoting London ed tech startup pi-top

London ed tech startup pi-top has gone through another round of layoffs, TechCrunch has learned.

Pi-top confirmed that eight jobs have been cut in the London office, saying the job losses resulted from “restructuring our business to focus on the U.S. education market.”

In August we broke the news that the STEM hardware-focused company had cut 12 staff after losing out on a major contract; pi-top told us then that its headcount had been reduced from 72 to 60.

The latest cuts suggest the workforce has been reduced to around 50 — although we have also heard that company headcount is now considerably lower than that.

One source told us that 12 jobs have gone in the London office this week, as well as additional cuts in the China office, where the company’s hardware team is based — but pi-top denied there have been any changes to its China team.

Pi-top said in August that the layoffs were related to implementing a new strategy.

Commenting on the latest cuts, it told us: “We have made changes within the company that reflect our business focus on the U.S. education market and our increasingly important SaaS learning platform.”

“The core of our business remains unchanged and we are happy with progress and the fantastic feedback we have received on pitop 4 from our school partners,” pi-top added.

Additionally, we have heard that a further eight roles at the U.K. office have been informed to staff as at risk of redundancy. Affected jobs at risk include roles in product, marketing, creative services, customer support and finance.

We also understand that a number of employees have left the company of their own accord in recent months, following an earlier round of layoffs.

Pi-top did not provide comment on jobs at risk of redundancy, but told us that it has hired three new staff “to accelerate the SaaS side of our education offering and will be increasing our numbers in the U.S. to service our growth in the region.”

We understand that the latest round of cuts have been communicated to staff as a cost-reduction exercise and also linked to implementing a new strategy. Staff have also been told that the business focus has shifted to the U.S schools market.

As we reported earlier this year, pi-top appointed a new executive chairman of its board who has a strong U.S. focus: Stanley Buchesky served in the Trump administration as an interim CFO for the U.S. Department of Education under Secretary of Education Betsy DeVos. He is also the founder of a U.S. ed tech seed fund.

Sources familiar with pi-top say the company is seeking to pivot away from making proprietary ed tech hardware to focus on a SaaS learning platform for teaching STEM, called pi-top Further.

At the start of this year it crowdfunded a fourth-gen STEM device, the pi-top 4, with an estimated shipping date of this month. The crowdfunder attracted 521 backers, pledging close to $200,000 to fund the project.

In the pi-top 4 Kickstarter pitch the device is slated as being supported by a software platform called Further — which is described as a “free social making platform” that “teaches you how to use all the pi-top components through completing challenges and contributing projects to the community,” as well as offering social sharing features.

The plan now is for pi-top to monetize that software platform by charging subscription fees for elements of the service — with the ultimate goal of SaaS revenues making up the bulk of its business as hardware sales are de-emphasized. (Hardware is hard; and pi-top’s current STEM learning flagship has faced some challenges with reliability, as we reported in August.)

We understand that the strategic change to Further — from free to a subscription service — was communicated to staff internally in September.

Asked about progress on the pi-top 4, the company told us the device began shipping to backers this week. 

“We are pleased to announce the release of pi-top 4 and pi-top Further, our new learning and robotics coding platform,” it said. “This new product suite provides educators the ability to teach coding, robotics and AI with step-by-step curriculum and an integrated coding window that powers the projects students build. With pi-top, teachers can effectively use Project Based Learning and students can learn by doing and apply what they learn to the real world.”

Last month pi-top announced it had taken in $4 million in additional investment to fund the planned pivot to SaaS — and “bridge towards profitability,” as it put it today.

“The changes you see are a fast growing start-up shifting from revenue focus to a right-sized profit generating company,” it also told us.

Know your startup’s value so you can communicate it to investors

Blair Silverberg
Contributor

Blair Silverberg is co-Founder and CEO of Capital, a financial services company using technology to accelerate the fundraising process. Prior to founding Capital, Blair was a principal investor at Draper Fisher Jurvetson where he sourced and managed venture investments during his four-year residency.

I’ve always told companies that investors have a much easier job than they do. To be good at their jobs, investors have to know how to do math and make decisions. As a business owner, you have to do both while also running your business.

The math piece can seem cumbersome, but it’s vital for understanding whether your company is creating or destroying value. A few simple metrics can demonstrate to investors the health and viability of your company, and they can show you which levers to pull that will best optimize your company for investor interest (and secure a higher price). But before you can ever hope to communicate your business’ value to an investor, you must understand it yourself.

The numbers are simple; it’s the calculations that are complex

Investment math itself is not complicated. In essence, it’s just about understanding whether your company is creating or destroying value by asking:

  • Where is your company investing its financial resourcesMost growing companies invest heavily in sales and marketing or research and development.
  • What is the return on this investment?  For example, how much gross profit (revenue x gross margin percentage) does a given sales and marketing investment produce?
  • How does that number compare to your cost of capital? If it’s higher, your company is creating value. If it’s lower, you’re destroying it.

Investors use this information to determine if their return would be higher than their expectation (e.g., 15% hurdle rate), should you continue down your current path of creating or destroying value. Then, they make their decision based on that calculation.

A caveat I’ll add here is that it’s not necessarily a deal-breaker if your company is declining in value. Oil rigs, after all, are considered investment assets, even though they are perpetually declining and will eventually run out (i.e., destroy all of their value). Although this article focuses on calculations that demonstrate value creation, all investment assets can be financed at the right price.

A deep dive into calculating value

One of the best metrics you can use to demonstrate value creation is your cohort-level return on investment. It’s a calculation most investors are familiar with, but it may not be as straightforward to companies who don’t see it as often. Again, while the metrics and concepts of investment math are simple, it’s the process of getting there that requires complex analysis.

Whether you are evaluating these metrics yourself or bringing in outside counsel to assist you, use the process below to show investors you are creating value.

Determine which information to analyze

The first step in calculating value is to understand which information from your income and cash flow statements to analyze as “investments.”

Start by dividing your capital allocation into three main buckets: short-term investments, long-term investments and expenses. In general, short-term investments will be the ones you want to focus on, but it’s helpful to walk through each.

  • Short-term investments (pay back within 24 months)

Virgin Galactic begins ‘Astronaut Readiness Program’ for first paying customers

Virgin Galactic has begun its “Astronaut Readiness Program” this week, which is being run out of Under Armour Global HQ to start. Under Armour is Virgin Galactic’s partner on its official astronaut uniforms, which its first paying space tourists will don on the company’s initial trips beyond Earth.

The Astronaut Readiness Program is a preparatory course that all of Virgin Galactic’s passengers undertake before they can get their trip aboard the company’s VSS Unity sub-orbital spaceplane. It involves guidance and instruction provided by Virgin Galactic team members, including its Chief Astronaut Instructor Beth Moses and Chief Pilot Dave Mackay. Both Mackay and Moses were on Virgin’s February demonstration flight to space, and so can provide not only guidance based on their considerable expertise, but also share insights from actually having flown aboard the same vessel that will take the company’s paying passengers up. Moses will advise on how to get around on board the spacecraft, too.

Under Armour is also involved in the program, in more ways than just providing the outfits that passengers will wear. They’re providing guidance on how astronauts should prepare with nutrition and fitness programs to ready the space tourists for their adventure. A Virgin Galactic in-house medical team is also on-hand to consult with each passenger. Virgin’s customers don’t need to match the strenuous physical fitness requirements of NASA astronauts, but the company says it’s still focused on ensuring its customers are healthy and hale on their trips.

Being an early customer for Virgin Galactic means not only training through programs like the one run this week in Baltimore, but also helping the new company develop and refine its process for future use.

“We will now be using the feedback from this week in Baltimore to build on that model,” Virgin Galactic said in a press release. “We discussed with our Future Astronauts how the training and the community can be best shaped for those waiting to fly and for those who have flown.”

To date, Virgin Galactic has 600 customers signed up to fly aboard its SpaceShipTwo spacecraft, which launches from a customized cargo jet aircraft to reach sub-orbital space and provides customers with a 90-minute flight, for $250,000 per ticket. It’s looking to launch its first flights for paying customers in the first half of next year.

LA warns of ‘juice-jacking’ malware, but admits it has no cases

Los Angeles’ district attorney is warning travelers to avoid public USB charging points because “they may contain dangerous malware.”

Reading the advisory, you might be forgiven for thinking that every USB outlet you see is just waiting for you to plug in your phone so it can steal your data. This so-called “juice-jacking” attack involves criminals loading malware “on charging stations or cables they leave plugged in at the stations so they may infect the phones and other electronic devices of unsuspecting users,” it reads. “The malware may lock the device or export data and passwords directly to the scammer.”

But the county’s chief prosecutor’s office told TechCrunch that it has “no cases” of juice-jacking on its books, though it said there are known cases on the east coast. When asked where those cases were, the spokesperson did not know. And when asked what prompted the alert to begin with, the spokesperson said it was part of “an ongoing fraud education campaign.”

Which begs the question — why?

Security researcher Kevin Beaumont tweeted that he hasn’t seen “any evidence of malware being used in the wild on these things.” In fact, ask around and you’ll find very little out there. Several security researchers have dropped me messages saying they’ve seen proof-of-concepts, but nothing actively malicious.

Juice-jacking is a real threat, but it’s an incredibly complicated and imperfect way to attack someone when there are far easier ways. And given so many phones have features in place to prevent these kinds of attacks, pulling off a juice-jacking attack would likely require burning a highly powerful exploit.

The idea, though — that you can plug in your phone and have your secrets stolen — is not entirely far-fetched. Over the years there have been numerous efforts to demonstrate that it’s possible. As ZDNet points out in its coverage of the juice-jacking warning, the FBI sent out a nationwide alert about the threat after security researcher Samy Kamkar developed an Ardunio-based implant designed to look like a USB charger to wirelessly sniff the air for leaky key strokes. And just earlier this year, a security researcher developed an iPhone charger cable clone that let a nearby hacker run commands on the vulnerable computer.

LA recommend using an AC power outlet and not a charging station, and to take your cables with you. That’s sound advice, but it’s just one of many things you need to do to keep your devices and data safe.