Category: Tech news

Ask any venture capitalist about the most important ingredient to success in startups, and they’ll tell you it’s founders who can persuade not only investors to part with their capital but, more important, who can convince people to leave what are often more stable jobs in order to help build their companies.

Ryan Cohen certainly fits the description. It goes a long way in explaining why Chewy, the online retailer of pet food and supplies that he cofounded in 2011, sold to PetSmart for a reported $3.35 billion in 2017 — and why it’s also expected to stage a successful IPO this Friday, when PetSmart spins it off (though PetSmart will continue to hold a majority stake in the company). Just today, the expected IPO price range, originally planned at between $17 and $19 per share, was raised to $19 to $21 per share, with the IPO advisory firm IPO Boutique saying the guidance it has received is that the deal is “multiple times oversubscribed.”

Cohen stepped away from Chewy last year, nearly a year after its all-cash sale. Naturally, he’s still excited to stand on the balcony of the NYSE as the company’s shares begin trading publicly on Friday. We talked with him earlier today about his path, beginning as a baby-faced founder without a college degree or any kind of network — and what, at age 33, he’s planning to do next.

TC: Your company sold in what was called at the time as the biggest e-commerce sale in history, yet most people still don’t know who you are. Who are you?

RC: [Laughs.] I’ve been an entrepreneur since as far back a I can remember. My father was a glassware importer — so a businessperson — and I saw what it was like to be accountable and responsible and to have your own employees and from an early age, I just knew that I wasn’t cut out for a traditional job, that entrepreneurship was the right path for me.

TC: Were you coding away in your bedroom like 90 percent of the founders we talk with?

RC: I was building websites at [age] 13, 14, then I moved on to affiliate marketing . . . My cofounder, Michael Day [who became Chewy’s CTO] and I met each other in an internet chat room, back when they were pure and bad things weren’t happening [online]. It was [centered around] website design computer programming, and we just hit it off.

TC: You get together, and then you settle on creating a retail pets business. Why? 

RC: We were doing affiliate marketing and we wanted to own the entire customer experience and were looking for big categories that were underpenetrated. In fact, we thought the jewelry space was ripe for disruption, so we started going to trade shows and building the site and the back end.

We even spent a few hundred thousand dollars on jewelry and we were a few weeks away from launching the company, but I have a poodle, Tylee, who’s now 12 years old, and I would go every couple of weeks to buy products from this store owner who knew me and who I really trusted and who was a pet lover like me. And I had this epiphany; I realized I’m so much more passionate about this category. So we sold the jewelry, luckily getting back most of our money, and started Chewy.

TC: Obviously, you’d heard of the terrible fate of dot.com high-flier Pets.com. Why didn’t that dissuade you?

RC: The world was full of business models back then didn’t make sense. People weren’t online. They were using dial-up. They weren’t comfortable putting their credit cards online. But over time, so much changed, including that the pets market had moved up into high-margin, higher-retail price points. You could also suddenly ship 30-pound boxes from most of the country overnight, thanks to shipping density.

TC: You were living in Dania Beach, Florida — not exactly a tech hub at the time. Did you think about moving?

RC: I had family here, growing up. I also knew it would be really expensive to build out customer service in a big city.  So it ended up working our really well. But you’re right, from a financing standpoint, south Florida is not a popular tech hub. We also had the fact that we were going head-to-head with Amazon, that I have no college eduction, and the demise of Pets.com, and so when we talked with VCs, it was like, ‘We’ll pass.’

TC: Without outside help, how did you get started?

RC: We contacted a local distributor who worked with a [third-party logistics] company that was next to him, and we started buying product the same day.  Then we started marketing to cities and states near fulfillment centers, using all direct response marketing that we were able to optimize on the fly. We’d buy the inventory as we sold it and we were doing almost everything ourselves, so if an order came in and we didn’t have inventory, I’d go buy the product and ship it out from a local Kinkos.

For the first couple of years, it was three guys and a call center.

TC: When did that change?

RC: We hit an inflection point where three [third party logistics companies] we were working with [were getting overwhelmed]. We’d give them weekly or monthly projections so they could plan ahead and have warehouse space, but they didn’t fully believe our growth and by the end of 2013, we had these 3PLs that couldn’t scale any more, so we had to bring fulfillment in house.

We didn’t know anything about this, so we hired a bunch of people who were experts in fulfillment and we flew to Mechanicsburg, Pa. to lease a 4,000-square-foot space, and within nine months or so, we became expert at doing fulfillment. It was risky. It was totally outside of our areas of competence. But by August of 2014, after breaking everything first, that center was humming along, and then we launched another in Reno. At that point, we went national.

TC: How would you describe your hiring process?

RC: A lot of it was intuitive. I believe in the Warren Buffett model of treating people with respect and being honest and transparent with them. A lot of these people would come from Amazon and Wayfair.  I went home at night and reached out to them after finding them on LinkedIn. We’d jump on a call and we’d talk about this vision to build the largest pet retailer in the world, while focusing on delighting customers and being category experts. And all of my management team, they came from amazing companies and stable jobs, and they pulled their kids out of school to come to south Florida because they believed in me.

I was really grateful they took that leap of faith, but it was also a huge responsibility, so I was going to fight even harder; I wasn’t going to let them down.

TC: You say VCs weren’t interested. What happened exactly?

RC: Almost from the beginning we reached out to investors, but I knew nothing about raising capital. I have no network. I come from a middle-class family. I don’t have a rich uncle. We just started cold-calling VCs and I learned the hard way that’s not how it works. [Laughs.]. I got turned down basically every single time, until Larry [Cheng of Volition Capital] invested, and it was not a competitive process.

TC: What convinced Larry to write you that first check?

RC: We’d reached out to Volition six to nine months earlier and spoke to an associate who took down our information, and they followed up with us in late 2012. We’d given them our projections and we were crushing our numbers. Larry was doing to Disneyland anyway with his family, so he decided to make a pit stop to meet with us. I remember he was like, ‘Who is going to take this company to $100 million in sales?’ and I was like, ‘Me! Who do you think?’

I looked very young at the time so I think I was easy to underestimate. I’ve been slightly aged now from Chewy. But he gave us that needed credibility. Then Greenspring Associates — they’re investors in Volition — came in to lead our Series B.

TC: Did you want to take the company public or were you hugely relieved when PetSmart came knocking?

RC: We were building a big company that inevitably was going to go public. Especially in those later years, we’d become ‘public company ready.’ We built up our finance and accounting team; we had audited financials. We’d raised a lot of capital — $350 million — but we had a lot of discipline. We also had a lot of revenue. We went from $200 million in sales in 2014 to $3.5 billion in sales by 2018. We burned through $130 million, but that cash burn was going to new customer acquisition and future fulfillment centers.

TC: So when you got that call from PetSmart . . .

RC: It was very fast. From the time I had a conversation with Raymond [Svider, the executive chairman of PetSmart] to the time he gave us a term sheet — and I was looking for an all-cash deal — the entire thing happened in 30 days, on our terms. We weren’t going to go and open up the kimono unless we got comfortable, and we were comfortable with the entire transaction.

TC: You stayed on for bit, though I gather you weren’t locked up.

RC: I wasn’t locked up at all. I could have left the day after the deal. I stayed but I felt like the teams were built and the systems and strategy were in place, and it felt like a fine-oiled machine. The business was at a significant scale. I just felt like my job was done. I’d been at it for more than seven years, going 24/7. I gave my life to this thing. But I have a two-year-old today and just being with my family and being able to return to civilian life was [irresistible after a point].

TC: I’m a Chewy customer but I’m not even sure why, except that it’s easy for me to re-order. Why do you think I’m a Chewy customer?

RC: Because Chewy is the best in the business. It has the best selection, competitive pricing, fast shipping, excellent customer service and we know the product better than our competitors. If you need a weight loss product for your dog, we’ll tell you which to buy.  All Chewy does is sell pet products, and that’s a big differentiator. E-commerce can feel like a series of faceless transactions; we wanted to recreate that feeling I use to enjoy at the pet store, shopping with a pet parent who I trusted. And we did that at scale, which is hard but we stayed focused.

TC: How are you feeling about the IPO?

RC: It feels like my baby is graduating from the college that I never went to.

TC: There are concerns over the fact that Chewy remains unprofitable. Do you worry that, as a publicly traded company, Chewy might have to change — that it may need to charge for shipping, for example?

RC: It’s not profitable because it’s continuing to execute on scale and market leadership. If you reduce your marketing and decide you don’t want to grow as much, the company could have been profitable years ago. The underlying company is profitable.

TC: What about the fact that Amazon and Walmart are expanding their own pet product offerings?

RC: Amazon made us fight really hard. Obviously, they’re a fierce competitor. But I don’t think it was the category that made us successful. I think it was delighting our customers. You focus on that and you’re going to do just fine.

TC: You’re a young guy. Are you retiring?

RC: Retirement is overrated.

I’m lucky. I’m talking to a lot of different entrepreneurs and business and looking at corporate board opportunities. I’m going through that exploratory process.

TC: Would you partner again with Michael on a different e-commerce business or maybe a venture outfit?

RC: We’re really close. It needs to be the right opportunity obviously, and we need to be picky. But I have no plans to sit in retirement, that’s for sure. I’m 33 and I’m competitive and I like consumer businesses and I like to win.

Microsoft’s Sunday E3 pressure was all about the games. In fact, while the company did offer some information about hardware and services, the information all arrived fast and furious at the end of the conference. While it’s probably unsurprising that the company had very little to offer in the way of information about its upcoming 8K console, Project Scarlett, most of us expected Project xCloud to get a lot more face time on stage.

The company powered through a whole lot of information about its upcoming streaming offering like it was going out of style (or, perhaps, like the lights were going out at its own theater). The speed and brevity of it all left a number of audience members confused on the specifics — and caused some to speculate that the service night not be as far along as Microsoft had hoped.

We caught up with a few Microsoft reps on our final day at the show to answer some questions. The company is unsurprisingly still mum on a number of key details around the offering. A couple of key things are worth clarifying, though. For starters console stream is not considered a part of Project xCloud. Rather, the ability to play games on one’s own Xbox One remotely is a separate feature that will be coming to users via a software update.

Asked what advantages console streaming has over the parallel xCloud offering, Microsoft’s answer was simple: it’s free. Fair enough. This serves a two-fold purpose. First, it helps differentiate Microsoft’s streaming offerings from Stadia and second, it provides another value proposition for the console itself. As to how performance is expected to differ between console streaming and XCloud, it wouldn’t comment.

As I wrote earlier today, the company does see the potential of a large scale move to the cloud, but anticipates that such a shift is a long ways off. After all, if it didn’t, it likely wouldn’t have announced a new console this week at E3.

You’d be forgiven for assuming that “battle royale” is an inherently violent genre. Hell, the word battle is right there, staring you in the face. Certainly the most prominent examples of the category, like Fornite and PUBG, represent a particular strand of gun-toting mayhem. Mediatonic’s Fall Guys, on the other hand, presents an interesting example of a warmer, fuzzier direction for the category.

I ventured across the street at E3 earlier today, to the series of trailers where Devolver set up shop this week, in staunch defiance of the conference’s over-the-top show floor. Inside one (mercifully air conditioned), Mediatonic set up shop with a gaming demo with a kind of nursery school rumpus room aesthetic — a fitting choice for the subject matter.

I sat down in one of the bean bag chairs and demoed a trio of short “qualifying” games. The game will support 100 players when it launches on PS4 and Steam. For the sake of the demo, it was me and a handful of human players pitted against a whole bunch of less-sophisticated bots.

The first level involved racing through a series of walls. Some crumbled with contact and others were solid as concrete. You can either follow behind and let the few couple of waves of players test out their density or lead the way and risk losing precious time by slamming headlong into one.

The second level was a version of tag that revolved around snatching a tail from one of your oblong compatriots. They’ll almost immediately steal it back. The only rule is that you have the tail in your possession when the clock runs out.

The third level is a kind of catchall uphill obstacle course requiring you to avoid obstacles, like swinging hammers. I was awesome on the first two and utterly sucked at the third. There’s plenty of room for self-improvement is my point. Ultimately there will be around 30 levels in all.

It’s a fun time, but I couldn’t shake the feeling that I was playing a casual, mobile-style game on the PS4. Certainly there’s no hardware demands that require such hardware. It seems like an easy thing to port to iOS or Android — particularly in the age of cross-platform battle royal like Fornite. Mediatonic senior developer Stephen Taylor says the company opted for the most advanced platform for control/interface reasons, though the company’s exploring the possibility.

I suspect Devolver’s involvement played a role in this as well. The publisher’s been far more interested in console and PC gaming, along a premium charge up front, rather than the free to play Fortnite model. Fall Guys will follow this model — though the pricing has yet to be announced. Ultimately, of course, paying upfront is generally cheaper for many gamers than the death by a million cuts that is in-game purchases.

Hyundai Motor Group has invested in Aurora, the latest sign that the scope of the year-old partnership between the automaker and self-driving car startup has expanded.

Aurora and Hyundai didn’t disclose terms of the investment. However, picking part new details of its Series B funding round and speaking to sources within the industry, Hyundai’s investment is below $30 million.

Aurora announced in February that it had raised more than $530 million in a Series B round that was led by Sequoia Capital and included “significant investment” from Amazon and T. Rowe Price Associates. Since then, that Series B round has expanded to more than $600 million with new investment from Hyundai, Baillie Gifford and the Canada Pension Plan Investment Board, TechCrunch has learned.

To date, Aurora has raised more than $700 million, a figure that includes its seed round Series A round of $90 million.

Hyundai’s stake in Aurora is an affirmation of the company and their working relationship. But it’s just one measure. What Aurora is actually doing matters as much.

When the partnership was first announced in January 2018, the details of the relationship were scant. New information reveals that Aurora has been working with Hyundai and Kia for the last year to integrate its “Driver” into Hyundai’s flagship fuel cell vehicle NEXO.

Aurora says it will expand research and development of a self-driving platform for a wide range of Hyundai and Kia’s models.

Aurora, which launched in January 2017, works with companies like Hyundai, Byton, and until more recently Volkswagen, to design and develop a package of sensors, software, and data services needed to deploy autonomous vehicles. The company describes this “full stack,” (an industry parlance) the Aurora Driver.

Aurora, like many of its competitors, are focused on Level 4 autonomous systems with an eye toward Level 5. Level 4 is a designation by SAE, the automotive engineering association, for autonomous vehicles that take over all driving in certain conditions. In Level 5 autonomy, the vehicle is self-driving in all situations.

About a year after Aurora’s official launch date, the company announced partnerships with Hyundai and Volkswagen, followed by a Series A funding raise that resulted in two new board members — LinkedIn co-founder and Greylock partner Reid Hoffman and Mike Volpi, former chief strategy officer at Cisco and general partner at Index Ventures.

Volkswagen has since ended its partnership with Aurora. Meanwhile, Fiat Chrysler Automobiles has announced a collaboration with Aurora to to develop self-driving commercial vehicles. The partnership with FCA will focus on integrating Aurora’s technology into the automaker’s line of Ram Truck commercial vehicles, a portfolio that includes cargo vans and trucks. The deal could extend to FCA’s Fiat Professional brand as well, TechCrunch has learned.

Depending on who you ask, the advantage of technology based on artificial or machine intelligence could be a topsy-turvy funhouse mirror world — even in some very fundamental ways.

“I actually think 10 years from now, you won’t be listening to music,” is a thing venture capitalist Vinod Khosla said onstage today during a fireside chat at Creative Destruction Lab’s second annual Super Session event.

Instead, he believes we’ll be listening to custom song equivalents that are automatically designed specifically for each individual, and tailored to their brain, their listening preferences and their particular needs.

Khosla noted that AI-created music is already making big strides — and it’s true that it’s come a long way in the past couple of years, as noted recently by journalist Stuart Dredge writing on Medium.

As Dredge points out, one recent trend is the rise of mood or activity-based playlists on Spotify and channels on YouTube. There are plenty of these types of things where the artist, album and song name are not at all important, or even really surfaced. Not to mention that there’s a big financial incentive for an entity like Spotify to prefer machine-made alternatives, as it could help alleviate or eliminate the licensing costs that severely limit their ability to make margin on their primary business of serving up music to customers.

AI-generated chart toppers and general mood music is one thing, but a custom soundtrack specific to every individual is another. It definitely sidesteps the question of what happens to the communal aspect of music when everyone’s music-replacing auditory experience is unique to the person. Guess we’ll find out in 10 years.

The growing presence of encrypted communications apps makes a lot of communities safer and stronger. But the possibility of physical device seizure and government coercion is growing as well, which is why every such app should have some kind of self-destruct mode to protect its user and their contacts.

End to end encryption like that you see in Signal and (if you opt into it) WhatsApp is great at preventing governments and other malicious actors from accessing your messages while they are in transit. But as with nearly all cybersecurity matters, physical access to either device or user or both changes things considerably.

For example, take this Hong Kong citizen who was forced to unlock their phone and reveal their followers and other messaging data to police. It’s one thing to do this with a court order to see if, say, a person was secretly cyberstalking someone in violation of a restraining order. It’s quite another to use as a dragnet for political dissidents.

This particular protestor ran a Telegram channel that had a number of followers. But it could just as easily be a Slack room for organizing a protest, or a Facebook group, or anything else. For groups under threat from oppressive government regimes it could be a disaster if the contents or contacts from any of these were revealed to the police.

Just as you should be able to choose exactly what you say to police, you should be able to choose how much your phone can say as well. Secure messaging apps should be the vanguard of this capability.

There are already some dedicated “panic button” type apps, and Apple has thoughtfully developed an “emergency mode” (activated by hitting the power button five times quickly) that locks the phone to biometrics and will wipe it if it is not unlocked within a certain period of time. That’s effective against “Apple pickers” trying to steal a phone or during border or police stops where you don’t want to show ownership by unlocking the phone with your face.

Those are useful and we need more like them — but secure messaging apps are a special case. So what should they do?

The best-case scenario, where you have all the time in the world and internet access, isn’t really an important one. You can always delete your account and data voluntarily. What needs work is deleting your account under pressure.

The next best-case scenario is that you have perhaps a few seconds or at most a minute to delete or otherwise protect your account. Signal is very good about this: The deletion option is front and center in the options screen, and you don’t have to input any data. WhatsApp and Telegram require you to put in your phone number, which is not ideal — fail to do this correctly and your data is retained.

Signal, left, lets you get on with it. You’ll need to enter your number in WhatsApp (right) and Telegram.

Obviously it’s also important that these apps don’t let users accidentally and irreversibly delete their account. But perhaps there’s a middle road whereby you can temporarily lock it for a preset time period, after which it deletes itself if not unlocked manually. Telegram does have self-destructing accounts, but the shortest time you can delete after is a month.

What really needs improvement is emergency deletion when your phone is no longer in your control. This could be a case of device seizure by police, or perhaps being forced to unlock the phone after you have been arrested. Whatever the case, there need to be options for a user to delete their account outside the ordinary means.

Here are a couple options that could work:

• Trusted remote deletion: Selected contacts are given the ability via a one-time code or other method to wipe each other’s accounts or chats remotely, no questions asked and no notification created. This would let, for instance, a friend who knows you’ve been arrested remotely remove any sensitive data from your device.
• Self-destruct timer: Like Telegram’s feature, but better. If you’re going to a protest, or have been “randomly” selected for additional screening or questioning, you can just tell the app to delete itself after a certain duration (as little as a minute perhaps) or at a certain time of the day. Deactivate any time you like, or stall for the five required minutes for it to trigger.
• Poison PIN: In addition to a normal unlock PIN, users can set a poison PIN that when entered has a variety of user-selectable effects. Delete certain apps, clear contacts, send prewritten messages, unlock or temporarily hard-lock the device, etc.
• Customizable panic button: Apple’s emergency mode is great, but it would be nice to be able to attach conditions like the poison PIN’s. Sometimes all someone can do is smash that button.

Obviously these open new avenues for calamity and abuse as well, which is why they will need to be explained carefully and perhaps initially hidden in “advanced options” and the like. But overall I think we’ll be safer with them available.

Eventually these roles may be filled by dedicated apps or by the developers of the operating systems on which they run, but it makes sense for the most security-forward app class out there to be the first in the field.

Anyone who has traveled to Hong Kong knows how ubiquitous the Octopus Card is. Distributed by a company which is majority owned by the Hong Kong government, the cards are used to pay for everything from public transit to groceries, to Starbucks coffee. It’s an incredible payment solution that’s used by almost everyone in the city.

But as hundreds of thousands of people gather in the city center to protest against proposed regulations that residents view as tearing down the last protections against the authoritarian control of mainland China, those same citizens are viewing their Octopus cards in a different light.

Protestors in Hong Kong are waiting in line to pay cash for a single-use card rather then use an Octopus card that’s tied to their bank accounts and identity. Their fear, as QZ journalist Mary Hui notes, is that the government will track their data and location.

Already, China’s security apparatus are leaning on citizens. In one instance they allegedly requested that the organizer of a large Telegram group open their phone and reveal their contacts.

Potential privacy concerns are a huge downside for cashless technology. While electronic payments can make things more convenient for the people that can afford it, it opens up new avenues for government or corporate surveillance and monitoring.

On the mainland, the Chinese government is already experimenting with social credit scoring that can affect a citizen’s access to everything from home and personal loans to public transportation.

Examples like this are another argument against the push for cashless systems.

Indeed, as some cities in the U.S. consider — or enact — bans on cashless stores, companies are shifting their policies on how to develop the technology. Philadelphia became the first city to ban cashless stores in March and the state of New Jersey quickly followed suit. Other cities considering the bans include New York, San Francisco and Chicago.

As nations like China and India push to go cashless, it’s worth noting that the ease of use promised by integrated electronic payment systems can be coupled with increasingly sophisticated forms of surveillance. Locking citizens in to a model where all financial transactions can be tracked — or are intrinsically linked — to a smartphone, may be great for governments, but it’s potentially terrible for democracy and its support for free speech and assembly.

Like many good ideas, CrowdStrike, a seller of subscription-based software that protects companies from breaches, began as a few notes scribbled on a napkin in a hotel lobby.

The idea was to leverage new technology to create an endpoint protection platform powered by artificial intelligence that would blow incumbent solutions out of the water. McAfee, Palo Alto Networks and Symantec, long-time leaders in the space, had been too slow to embrace new technologies and companies were suffering, the CrowdStrike founding team surmised.

Co-founders George Kurtz and Dmitri Alperovitch, a pair of former McAfee executives, weren’t strangers to legacy cybersecurity tools. McAfee had for years been a dominant player in endpoint protection and antivirus. At least, until the emergence of cloud computing.

Since 2012, CrowdStrike’s Falcon Endpoint Protection platform has been pushing those incumbents into a new era of endpoint protection. By helping enterprises across the globe battle increasingly complex attack scenarios more efficiently, CrowdStrike, as well as other fast-growing cybersecurity upstarts, has redefined company security standards much like Salesforce redefined how companies communicate with customers.

“I think we had the foresight that [CrowdStrike] was going to be a foundational element for security,” CrowdStrike chief executive officer George Kurtz told TechCrunch this morning. The full conversation can be read further below.

CrowdStrike co-founder and CEO George Kurtz.

FlyCleaners, a New York startup offering on-demand laundry pickup and delivery, has laid off “a large number” of its employees, co-founder and CEO David Salama told TechCrunch.

This confirms a story earlier this week in Crain’s New York reporting that FlyCleaners filed a notification with the Department of Labor outlining plans to close its Long Island City plant and lay off 116 employees.

As Salama explained when we profiled him several years ago, FlyCleaners customers can use the mobile app whenever they want someone to pick up their laundry — the startup handles pickup and return, while the actual cleaning is handled by local businesses.

In an email about the layoffs, Salama told me that the company (which raised a $2 million round led by Zelkova Ventures back in 2013) created its own team for pickup and delivery because “when we started FlyCleaners six years ago, the last-mile logistics industry was simply not where we needed it to be in order to effectively service our customers.” More recently, however, the company has been testing partnerships with other logistics companies as a way to “supplement” its own team.

“Recently, it became clear to us that the cost of our internal team was just too large to bear and it was starting to hamper our ability to execute strategically and to sustain and grow our business,” Salama continued. “And so, that [led] to the painful decision to lay off a large number of employees and to proceed as a more asset-light organization.”

He added, “We don’t anticipate that this change will materially decrease the service we offer our customers. If anything, by partnering with larger-scale logistics providers, our service should be more efficient and resilient than it currently is.”

But if partners are handling pickups, delivery and the laundry, what does FlyCleaners bring to the table? When I asked what the company will focus on moving forward, Salama said, “I prefer to be discreet about it[,] but I’m comfortable saying that our plan is to leverage our technology to create the best customer experience possible.”

He also said that the startup is working with its logistics partners to find new positions for laid-off employees.

Doubling down on comments he’s made throughout the years regarding AI’s potential impact on the medical industry, legendary Silicon Valley investor and Sun Microsystems founder Vinod Khosla said on Wednesday that he believes “any radiologist who plans to practice in 10 years will be killing patients every day,” because machine-powered solutions will have advanced to such a point that they’ll be far more effective than professional human practitioners.

Speaking at the closing keynote of Creative Destruction Lab’s Super Session in Toronto, Khosla also said onstage that “radiologists are toast,” and that they flat out “shouldn’t be a job,” continuing that in a decade when AI-based diagnostic technology has advanced, people in this profession will “be causing deaths, because [they] choose to practice.”

The position was in keeping with his past statements on the subject, dating back to as early as 2017, when he expressed the belief that some types of doctors would be “obsolete” within five years (the timeline seems to have gotten a bit longer in the interim, but he later qualified that this includes the time it will take for acceptance by the community and general public that the tech is better). Khosla added that he also believes that oncologists will also be surpassed by alternatives based on domain-specific AI solutions, but that that’s probably a bit further out on the 15-year horizon.

Instead, he believes that human general practitioner doctors will be more valuable, and will work with AI solutions for more specialized medical fields often currently considered more highly skilled. This is in keeping with the general thinking about how narrowly focused AI is easier to accomplish than machine intelligence that addresses more general topics.

Khosla noted further that oncology is “much easier to automate” than the job of a factory worker, since the job of a factory worker “has much more dimensionality.”

The investor qualified the strength of his statements by adding that he believes the time for being polite is over, since he does believe that on balance people will be more dangerous than machine intelligence in the specific domain of radiology in the 10-year time frame.

Facebook obtained personal and sensitive device data on about 187,000 users of its now-defunct Research app, which Apple banned earlier this year after the app violated its rules.

The social media giant said in a letter to Sen. Richard Blumenthal’s office — which TechCrunch obtained — that it collected data on 31,000 users in the U.S., including 4,300 teenagers. The rest of the collected data came from users in India.

Earlier this year, a TechCrunch investigation found both Facebook and Google were abusing their Apple-issued enterprise developer certificates, designed to only allow employees to run iPhone and iPad apps used only inside the company. The investigation found the companies were building and providing apps for consumers outside Apple’s App Store, in violation of Apple’s rules. The apps paid users in return for collecting data on how participants used their devices and to understand app habits by gaining access to all of the network data in and out of their device.

Apple banned the apps by revoking Facebook’s enterprise developer certificate — and later Google’s enterprise certificate. In doing so, the revocation knocked offline both companies’ fleet of internal iPhone or iPad apps that relied on the same certificates.

But in response to lawmakers’ questions, Apple said it didn’t know how many devices installed Facebook’s rule-violating app.

“We know that the provisioning profile for the Facebook Research app was created on April 19, 2017, but this does not necessarily correlate to the date that Facebook distributed the provisioning profile to end users,” said Timothy Powderly, Apple’s director of federal affairs, in his letter.

Facebook said the app dated back to 2016.

A portion of Apple’s letter to lawmakers. (Image: TechCrunch)

TechCrunch also obtained the letters sent by Apple and Google to lawmakers in early March, but were never made public.

These “research” apps relied on willing participants to download the app from outside the app store and use the Apple-issued developer certificates to install the apps. Then, the apps would install a root network certificate, allowing the app to collect all the data out of the device — like web browsing histories, encrypted messages and mobile app activity — potentially also including data from their friends — for competitive analysis.

A response by Facebook about the number of users involved in Project Atlas (Image: TechCrunch)

In Facebook’s case, the research app — dubbed Project Atlas — was a repackaged version of its Onavo VPN app, which Facebook was forced to remove from Apple’s App Store last year for gathering too much device data.

Just this week, Facebook relaunched its research app as Study, only available on Google Play and for users who have been approved through Facebook’s research partner, Applause. Facebook said it would be more transparent about how it collects user data.

Facebook’s vice president of public policy Kevin Martin defended the company’s use of enterprise certificates, saying it “was a relatively well-known industry practice.” When asked, a Facebook spokesperson didn’t quantify this further. Later, TechCrunch found dozens of apps that used enterprise certificates to evade the app store.

Facebook previously said it “specifically ignores information shared via financial or health apps.” In its letter to lawmakers, Facebook stuck to its guns, saying its data collection was focused on “analytics,” but confirmed “in some isolated circumstances the app received some limited non-targeted content.”

“We did not review all of the data to determine whether it contained health or financial data,” said a Facebook spokesperson. “We have deleted all user-level market insights data that was collected from the Facebook Research app, which would include any health or financial data that may have existed.”

But Facebook didn’t say what kind of data, only that the app didn’t decrypt “the vast majority” of data sent by a device.

Facebook describing the type of data it collected — including “limited, non-targeted content” (Image: TechCrunch)

Google’s letter, penned by public policy vice president Karan Bhatia, did not provide a number of devices or users, saying only that its app was a “small scale” program. When reached, a Google spokesperson did not comment by our deadline.

Google also said it found “no other apps that were distributed to consumer end users,” but confirmed several other apps used by the company’s partners and contractors, which no longer rely on enterprise certificates.

Google explaining which of its apps were improperly using Apple-issued enterprise certificates (Image: TechCrunch)

Apple told TechCrunch that both Facebook and Google “are in compliance” with its rules as of the time of publication. At its annual developer conference last week, the company said it now “reserves the right to review and approve or reject any internal use application.”

Facebook’s willingness to collect this data from teenagers — despite constant scrutiny from press and regulators — demonstrates how valuable the company sees market research on its competitors. With its restarted paid research program but with greater transparency, the company continues to leverage its data collection to keep ahead of its rivals.

“After its previous app was rightly taken down and blocked from operating, Facebook moved more quickly to reintroduce a market research product than it has to provide any substantial consumer privacy protections or resolve the significant abuse on its platform,” Sen. Blumenthal told TechCrunch. “At a time when the company is under investigation for its data practices and anticompetitive actions, the Facebook Study app is at best tone-deaf and ill-considered.”

Facebook and Google came off worse in the enterprise app abuse scandal, but critics said in revoking enterprise certificates Apple retains too much control over what content customers have on their devices.

The Justice Department and the Federal Trade Commission are said to be examining the big four tech giants — Apple, Amazon, Facebook and Google-owner Alphabet — for potentially falling afoul of U.S. antitrust laws.

About two months ago, in the middle of the night, a small, specially designed unmanned aircraft system — a drone — carried a precious cargo at 300 feet altitude and 22 miles per hour from West Baltimore to the University of Maryland Medical Center downtown, a trip of about 5 minutes. They called it, “One small hop for a drone; one major leap for medicine.”

The cargo was a human kidney, and waiting for that kidney at the hospital was a patient whose life would be changed for the better.

“This whole thing is amazing,” the 44-year-old recipient later told the University of Maryland engineering and medical teams that designed the drone and the smart container. The angel flight followed more than two years of research, development and testing by the Maryland aerospace and medical teams and close coordination with the Federal Aviation Administration (FAA) .

There were many other ways the kidney could have been delivered to the hospital, but proving that it could be done by drone sets the stage for longer and longer flights that will ultimately lower the cost and speed up the time it takes to deliver an organ. And speed is life in this case — the experts say the length of time it takes to move an organ by traditional means is a major issue today.

This is one example of how small drones are already changing the landscape of our economy and society. Our job at the Department of Transportation (DOT), through the FAA, is to safely integrate these vehicles into the National Airspace System.

Time is of the essence. The Department has been registering drones for less than four years and already there are four times as many drones — 1.5 million — on the books as manned aircraft. This week in Baltimore, more than 1,000 members of the drone community are coming together to discuss the latest issues in this fast-growing sector as part of the fourth annual FAA UAS Symposium, which the Department co-hosts with the Association for Unmanned Aircraft Systems.

Along with public outreach, the Department is also involved in demonstration projects, including the Integration Pilot Program, or IPP. Created by this administration in 2017, the IPP allows the FAA to work with state, local and tribal governments across the U.S. to get the experience needed to develop the regulations, policy and guidance for safely integrating drones, including tackling tough topics like security and privacy. The experience gained and the data collected will help ensure the United States remains the global leader in safe UAS integration and fully realizes the economic and societal benefits of this technology.

A couple of IPP examples show the ingenuity of the drone community.

In San Diego, the Chula Vista Police Department and CAPE, a private UAS teleoperations company, are using drones as first responders to potentially save the lives of officers and make the department more efficient. Since October, they have launched drone first responders on more than 400 calls, in which 59 arrests were made; for half of those calls, the drone was first on the scene with an average on-scene response time of 100 seconds. Equally important is the 60 times that having the drone there first eliminated the need to send officers at all.

Recently, as the result of an IPP project, the FAA granted the first airline certification to Alphabet Inc.’s Wing Aviation, a commercial drone operator that will deliver packages in rural Blacksburg, Va.

What happens next is that the FAA will gradually implement new rules to expand when and how those operators can conduct their business safely and securely. To manage all the expected traffic, the FAA is working with NASA and industry on a highly automated UAS Traffic Management, or UTM, concept.

At the end of the day, drones will help communities like Baltimore — and others throughout the country — save lives and deliver new services. DOT and the FAA will help ensure it’s all done safely, and that public concerns about privacy and security are addressed.

Canadian startup program Creative Destruction Lab (CDL) escapes succinct description in some ways — it’s an accelerator, to be sure, and an incubator. Startups show up and present to a combined audience of investors, mentors, industry players (some of whom, like former astronaut Chris Hadfield, verge on celebrity status) — but it’s not a demo day, per se, and presentations happen in focused rooms with key, vertically aligned audience members who can provide much more than just funding to the startups that participate.

North founder Stephen Lake onstage at CDL’s Super Session 2019

Seven years into its existence, CDL really puts on a show for its cornerstone annual event (itself only two years old), and clearly shows the extent to which the program has scaled. From an inaugural cohort of just 25 startups with a focus on science, CDL has grown to the point where it’s graduating 150 startups spanning cohorts across six cities associated with multiple academic institutions. It has consistently added new areas of focus, including a space track this year, for which Hadfield is a key mentor, as is Anousheh Ansari, the first female private space tourist to pay her own way to the International Space Station and the co-founder and CEO of Prodea Systems.

The ‘Super’ in Super Session

This is the second so-called “Super Session” after the event’s debut in 2017. It includes roughly 850 attendees, made up of investors, mentors, industry sponsors and the graduating startups themselves. As CDL Fellow Chen Fong put it in his welcoming remarks, CDL’s Super Session is an opportune moment for networking, mentorship and demonstration of the companies the program has helped foster and grow.

A keynote track included talks by Ansari and Hadfield, as well as from Celmatix CEO and founder Piraye Beim, and a fireside chat with North founder and CEO Stephen Lake. Subjects ranged from the importance of the linkage between exploration and technology, to what Beim described as “probably the first CDL talk to include menstrual health, vibrators, incontinence and menopause, all in the span of 15 minutes.” Lake meanwhile discussed the future of seamless human-computer interfaces, and Ansari discussed her work founding the Xprize program and the impetus behind the current momentum and interest in private space innovation.

Celmatix CEO and founder Piraye Beim speaking at the 2019 Creative Destruction Lab Super Session in Toronto

The variety in the keynote speaker mix and topic selection is reflective of the eclectic and comprehensive nature of CDL’s modern program, which scouts globally for prospective startup participants. Its six hubs then enter into a matching process with startups signed on to take part, where each scores the other, and that leads to placement.

How CDL works

CDL’s originating thesis is all about supplying the limiting resource in a startup ecosystem; the thing which the program’s organizers think is the missing ingredient that differentiates Silicon Valley from any other innovation hub in the world. Namely, CDL theorizes that this missing ingredient is what CDL Director of Community Kristjan Sigurdson calls “entrepreneurial judgement.”

Sigurdson explains that this basically boils down to the ability to know what are the most important things you need to do as an entrepreneur, and in what order. The missing piece, he says, isn’t ideas, funding availability or a lack of effort — instead, it’s the kind of judgement that results from experience. CDL’s model, which emphasizes five sessions, is held periodically, during which a panel of mentors helps startups set three clearly defined objectives they can accomplish within the next eight weeks.

After each of these sessions, some triage occurs — essentially CDL mentors gathered in closed-door meetings are asked if they’d work with any of the startups that presented during the session. If startups don’t receive sponsorship in these closed-door meetings, they’re not asked to participate in the next session, and effectively are out of the program. All told, the program graduates around 40-45% of the startups that enter the program, Sigurdson said.

Group session with small group mentoring on site at Creative Destruction Lab’s 2019 Super Session in Toronto

CDL is also a bit out of the ordinary in that it takes no equity from the startups it works with — it’s fundamentally an academic program, started by the University of Toronto, and is designed to provide real-world business cases for the school’s MBA students to work on. But it’s become so much more — providing mentorship and guidance as described, and also connecting researchers who often enter into formal advisory roles with CDL companies.

Sigurdson also noted that CDL has actually seen “much higher investment levels” versus the average for more traditional incubation or acceleration programs. “It’s a program that I think allows companies to raise money much more organically even though it’s an artificial program we created,” he said, referencing CDL’s own comparative research.

Lab-grown and forged in fire

True to its name, Creative Destruction Lab in practice feels like a generative cauldron of ideas, shared with peers and industry specialists for debate, discussion and reformation. Sessions are remarkable to witness — where else are you going to see brand new companies get direct feedback from astronauts and representatives of global space agencies, for instance.

Creative Destruction Lab opening keynote for its Super Session 2019 event

The model is unique, but clearly effective, and able to scale — as evidenced from its growth to what it is today from its starting point in 2012, when one founder described it as “7 people in a room.” The room featuring presentations from space-track companies alone featured around 50 people in attendance for instance – almost all of which were top-flight industry leaders and investors, including Hadfield, Ansari, CDL alumni Mina Mitry of Kepler Communications and prominent Toronto angel investor Dan Debow. Startups presenting in the space track included Wyvern, a hyperspectral imaging company; Mission Control, a startup that wants to be the software layer for Moon rovers; and Atomos, which is building a space tug for extra-atmospheric “last-mile” transportation solutions.

It’s easy to see why this program results in solid investment pipeline, given the profile of the sponsors and mentors involved. And it’s another strong stake in the ground for the claim that Canada’s startup scene, with Toronto as its locus of gravity, is increasingly earning (and outperforming) its reputation as a global center of innovation.

NFC — the technology that helps power Apple Pay as well other clever features for iOS apps like Launch Center Pro’s tappable stickers — is getting a big upgrade with the launch of iOS 13, due out this fall. Instead of only allowing iPhone apps to read NFC tags, apps will be able to write directly to blank tags, as well as interact with tags through native protocols. This opens up a range of new application possibilities, Apple told attendees at its Worldwide Developer Conference last week, including the ability to create apps that read passports and contactless smart cards and interact with NFC-enabled hardware.

We’ve already seen the potential for NFC that goes beyond just an easier way to check out at point-of-sale in a traditional retail environment, as with Apple Pay.

For example, both Apple and Google recently announced support for Apple Pay and Google Pay-enabled contactless payments for the NYC Subway. Portland offers something similar, as do several other international cities.

With the updates to the core NFC framework, however, the iPhone’s NFC capabilities will get even more powerful.

With iOS 13 (on iPhone 7 and up), users will be able to read a range of contactless smartcards and tags, including NFC-enabled passports and other government IDs.

There are already solutions in the works that will take advantage of this new feature.

For example, both Engadget Japan and Nikkei have reported the Japanese government will add support for NFC tag reading to Japan’s national ID (Individual Number Card) when iOS 13 launches later this year.

The news was confirmed by the Japanese government, via a tweet from an advisor to the government’s CIO:

In addition, the U.K. government’s NFC passport reader app, ReadID, will now work on the iPhone as a result of the iOS 13 updates.

“This announcement means that ReadID will also work on iPhones, using the embedded internal NFC capability,” the company said in a blog post.

“Needless to say we are very excited about this. We’re convinced this will have a major impact on the online use cases such as mobile onboarding for banks, especially for countries with a high iPhone penetration,” the announcement read.

Beyond ID-scanning, iOS apps will be able to write to NFC tags (i.e. NDEF writing), and even lock the tag so it can’t be written to again, if the developer chooses.

And now, the core NFC framework will support tag reading and writing across various formats, including not only NFC NDEF Tag (for NDEF tags, as offered today), but also Mifare, FeliCa, ISO 7816 (e.g. for passports), and ISO 15693.

That means NFC will work in more places with more type of tags than what’s available today.

Above Image Credit: Ata Distance, which covers Apple Pay and contactless news 

Apple had unveiled some of its plans around NFC by pre-announcing support for NFC stickers and tags that can trigger Apple Pay payments at the Transact conference in Las Vegas, just ahead of WWDC.

Bird (scooters), Bonobos (retailer) and PayByPhone (parking meters) said they would soon support this feature, which enables NFC transactions without a terminal or special app from the vendor.

This is enabled by way of new support for Value Added Service (VAS) tags, which also support loyalty sign-ups with merchants. On this front, Apple said that Dairy Queen, Dave & Buster’s and Caribou Coffee will later this year use NFC tags that make it easier for their customers to sign up for their loyalty programs.

Panera Bread, Yogurtland and Jimmy John’s Gourmet Sandwiches will also pilot instant enrollment.

At Apple’s WWDC, the company demonstrated NFC’s expanded abilities in a real-world scenario.

As an example of NFC in action on an iOS 13 device, the company showed off how a merchant could use NFC tags that displayed a product description after the customer scanned it, as well as how another NFC tag could offer the customer a coupon for their purchase, when scanned.

Launch Center Pro developer David Barnard, who had been selling NFC tags that were pre-encoded and locked so they couldn’t work with other apps beyond his own, is now unloading older inventory in preparation for iOS 13. The developer tweeted that his app will soon be able to write to blank NFC stickers, which you can buy in bulk on Amazon.

In addition, the upgrade to Apple’s Siri Shortcuts app means users could kick off an action or even a multi-step workflow just by scanning an NFC tag.

Developers have wanted more NFC capabilities for some time, and Apple has delivered. Consumers may not understand the underlying technology or know what it’s called. However, they will get the “tap to interact” functionality thanks to broad Apple Pay adoption, which taught them the behavior.

Details of the Pixel 4 have been swirling around this week, so Google decided to just leak the design of its next phone via its official Twitter account, revealing the backplate and new camera module on the smartphone.

“Well, since there seems to be some interest, here you go! Wait ’til you see what it can do. #Pixel4,” the tweet from the company’s verified @MadeByGoogle account read.

Renders of the Pixel 4 had leaked this week via smartphone blog Pricebaba.

The back of the phone makes some big changes. Most noticeable is the now-square camera module with a pair of lenses, a flash module and a couple of other sensor modules. Also noteworthy is the apparent lack of a rear fingerprint reader, in contrast to past models. There’s not much else evident here; they didn’t post renders of the device’s front.

Google’s Pixel 3 release kind of cemented that Google doesn’t stake much of the Pixel line’s strengths on hardware specs, it’s all about what it can leverage machine learning software tricks to do within those bounds.

On that note, it’s worth noting that Google has been pretty late to the two-camera rear-module setup; at past events the company has always justified this by suggesting that because of their software they can do more with one than most can do with two. This was clearly the case given the strengths of their cameras, but there are undoubtedly advantages to having dual cameras with different specs; it seems Google is now ready to take this plunge.