All posts in “Entrepreneurship”

Quantifying the driverless startup boom


For driverless car startups, raising capital seems to happen on autopilot. Investors and acquirers have put billions into the space over the past couple of years in the race for early mover advantage. They’ve shown no desire to hit the brakes lately either, as indicated by a spate of recent deals, including last week’s $450 million sale of autonomous driving software developer NuTonomy to Delphi Automotive.

In an effort to put the deal-making in perspective, Crunchbase News has aggregated some of the metrics for startup investment in the space. Our chief finding — that autonomous driving is a red-hot sector — is already obvious.

But in addition, we found:

  • Startup investment so far this year is more than double 2016 totals.
  • While Silicon Valley is a known hotspot for autonomous driving, Israel is a pretty solid No. 2 for startup deals, with three of the 10 largest rounds this year. Intel’s $15.3 billion purchase of Mobileye, an Israel-based startup, is also the largest M&A deal for an autonomous driving-related company for this or any year.
  • Self-driving tech rounds are pretty crowded. For U.S. investments in the space this year, we found just one financing — Ford’s investment in Argo AI — with a sole investor. (And that wasn’t a traditional VC deal, as it has Argo developing technology specifically for Ford.) On average, U.S. autonomous vehicle-related deals this year had an average of seven listed investors per round.

Valuations for self-driving tech companies are going up along with round sizes, Chris Stallman, partner at transportation-focused venture firm Fontinalis Partners, tells Crunchbase News. Part of the impetus comes from automakers and suppliers, many of whom are aggressively expanding their autonomous vehicle capabilities and are making early acquisition offers to promising companies.

“They are attempting to shore up their supply chains and are fearful of becoming too tied to a technology company that may ultimately be acquired by a competitor,” Stallman says. Meanwhile, traditional VCs and corporate venture investors are also actively extending term sheets to talented startup teams.

In the following sections, we look at some key metrics for the driverless car startup space: year-over-year comparisons, largest recent rounds and biggest M&A deals.

Investment revs up

It seemed like 2016 was a remarkably bullish period for autonomous driving investments. But at first glance, 2017 makes last year look kind of slow.

So far this year, investors have poured about $1.4 billion into companies in the space, more than double 2016 levels ($630 million), according to Crunchbase data. Deal count is relatively flat, with about 43 rounds in the first 10 months of this year compared to 48 in all of 2016. We compiled a list of noteworthy deals for this year here and for 2016 here.

As always, metrics are imperfect. For one, some companies, such as Lyft and Uber, aren’t known as self-driving car startups, but do have partnerships, internal R&D and strategic plans tied to the technology. For this exercise, we focused mostly on companies that principally characterize themselves as autonomous vehicle technology companies, leaving out ride-sharing and new auto brands. Also worth noting is that the biggest deal for this year, Ford’s $1 billion investment into Argo AI, has characteristics of both a venture deal and an acquisition.

There also is some blurring of categories, including companies that operate in sectors like automotive safety or mobility as well as autonomous vehicles. (When looking at more mature companies in the space, another consideration is that many, such as computer vision juggernaut Mobileye, started out before driverless vehicles existed as a discrete category.)

The biggest deals of 2017

Not only are autonomous vehicle startups raising big rounds, they’re doing so at fairly early stages of development.

In the chart below, we look at the 10 largest rounds for self-driving tech companies this year. Half of the top 10 are less than three years old.

Have checkbook, want startup

Acquirers also have continued to snap up autonomous vehicle companies this year. By far the largest deal related to the space — Intel’s purchase of Mobileye — involved a mature, publicly traded company. But buyers were also picking up early-stage startups, including October’s sale of NuTonomy to Delphi Automotive.

In the chart below, we look at the largest M&A transactions in recent years involving self-driving technology startups:

Parking all that capital

For autonomous vehicles, arguably the most crucial capability is being able to brake when necessary. For autonomous vehicle investors, however, the greatest concern seems to be whether they’re accelerating fast enough.

“Although valuations have crept up, I don’t think we have reached an oversaturation in autonomous vehicle companies,” Stallman says. One reason automakers are motivated to move fast is that much of the early innovation in autonomous vehicles came in the years following the 2008 financial crisis, when U.S. car companies were struggling for survival and R&D suffered. Now they’re having to catch up.

Yet while they’re paying handsomely for self-driving talent, investors and acquirers are cognizant of the risks Stallman says. Deploying autonomous technologies on the road safely requires overcoming a tremendous number of challenges and will require better perception of the vehicle’s surroundings, better maps, better processing capabilities and better decision making.

Like other segments of venture capital, there will be winners and losers. In this space, however, the race to the finish line is happening at an unusually rapid pace.

Featured Image: Li-Anne Dias

IBM Launches Private Cloud to Ease Public Cloud Transition

IBM on Wednesday announced IBM Cloud Private, a software platform that allows enterprise customers to run applications and store critical data in an on-premises, private cloud environment.

The new service employs a Kubernetes-based container architecture that supports both Docker containers and Cloud Foundry.

IBM also introduced new container-optimized versions of core enterprise software including Websphere Liberty, Db2 and MQ.

Companies in heavily regulated industries like finance and healthcare have embraced private clouds as they plan their transitions to public cloud environments, IBM said. Companies will spend an estimated US$50 billion per year on these efforts and grow private cloud business at an estimated rate of between 15 percent and 20 percent per year.

“Innovation and adoption of public cloud services has been constrained by the challenge of transitioning complex enterprise systems and applications into a true cloud native environment,” said Arvind Krishna, senior vice president for IBM Hybrid Cloud.

IBM Cloud Private brings “rapid application development and modernization” to existing IT infrastructure, he said, and allows it to be combined with the services of public cloud technology.

Building Blocks

IBM has played a key role in the development of cloud-based computing for the enterprise. It is a founding member of the Cloud Native Computing Foundation, and just last month open-sourced its WebSphere Liberty Code to support Java microservices. More than 12 million Java and enterprise developers are managing legacy WebSphere and Db2 applications, according to IBM.

IBM and Google last month announced plans to open-source the Grafeas project, which is designed to help developers deal with security issues when working with containers.

The Grafeas technology has been one of the key building blocks for IBM Cloud for many years, said Chip Childers, chief technology officer of Cloud Foundry.

“Companies like American Airlines depend on IBM to provide an easy solution to deliver code to production, something Cloud Foundry Application Runtime excels at,” he told the E-Commerce Times. “This offering is a huge step in the right direction — it shows IBM doubling down on open source not just with Cloud Foundry, but also adding Kubernetes into the mix.”

The Cloud Private software contains several key features to help enterprises manage their applications and data, IBM said, including the following:

  • Cloud Management Automation — streamlined management across cloud environments to help launch, monitor and manage services, and maintain security.
  • Security and Data Encryption — Security Vulnerability Advisor to scan for potential vulnerabilities and in-flight data encryption.
  • Core Cloud Platform — a container engine, Kubernetes orchestration, Cloud Foundry and essential management tools surrounding developer runtimes.
  • Infrastructure Choice — compatibility with systems from technology firms including Cisco, Dell EMC, Intel, Lenovo and NetApp, as well as IBM Power Systems, IBM Z, and IBM Hyperconverged Systems, powered by Nutanix.
  • Data and Analytics — integration with database services including IBM Db2, PostGreSQL and MongoDB.
  • Application Support and DevOps Tools — containerized versions of IBM WebSphere Liberty middleware, Open Liberty, MQ and Microservice Builder and other frameworks are included in software bundles. APM, Netcool and UrbanCode can be added for an additional fee.

Ready to Launch

IBM is running pilot programs with Finnish pension firm Illmarinen and Chile’s Banco de Credito, according to spokesperson Joseph Collier. Illmarinen, which manages pensions that cover 900,000 people in that country, is expected to start regular production with Cloud Private by early 2018. BCI’s schedule was not immediately available.

IBM has certain built in competitive advantages as it strives to expand its increasingly critical cloud computing business to compete against Amazon, Google, Microsoft, and other data and information companies, suggested Jeff Kaplan, managing director of ThinkStrategies.

“IBM’s greatest comparative advantage is its ability to appeal to its installed base of enterprise companies that have made enormous investments in traditional data center systems and software, and still believe they need to rely on private cloud resources to support their corporate operations and objectives,” he told the E-Commerce Times.

The Cloud Private program is the “newest example of how IBM embraces modernization technologies,” Pund-IT Principal Analyst Charles King told the E-Commerce Times, “to ensure the continued relevancy of its various platforms and services.”


David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain’s New York Business and The New York Times.

New Relationship Marketing Hub Aims to Goose Conversion Rates

Optimove this week released a new version of its relationship marketing hub.

New Relationship Marketing Hub Aims to Goose Conversion Rates

Optimove 6.0 lets users automate targeted marketing campaigns for new visitors as precisely as they can for current customers, the company said. It combines Web analytics with look-alike data, machine learning, and artificial intelligence from its retention ecosystem to make accurate predictions of future spend before customers make a purchase.

Based on those predictions, Optimove 6.0 segments visitors into micro-categories and indicates which campaigns are most likely to lead to conversions.

The aim is to capture more of the 98 percent of people who visit a website but do not make a purchase, the company said.

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“Our own data shows that 94.3 percent of active website browsers do not purchase in the first five minutes of browsing,” said Ray Wang, principal analyst at Constellation Research.

“Improving relevancy through context via [artificial intelligence] is the only way to invoke engagement,” he told CRM Buyer. “Engagement is the factor that drives conversion rates or sales. The only metric that matters is conversion rate optimization.”

What Optimove 6.0 Does

Optimove 6.0 reduces the conflict between the often-siloed customer acquisition and retention teams, whose approaches to lowering per-acquisition costs and keeping customers for the long term are often in opposition, according to the company.

That conflict leads to losses when teams move from one CRM application to another.

After integrating both lifecycle tools into a single CRM solution, marketers will see conversion sales increase by an average iof 25 percent, Optimove claimed.

Customer acquisition and retention teams “sit in different departments,” Wang noted. “In many cases, you multiply this by each channel — for example, Web team vs. contact center vs. mobile.”

Optimove 6.0 is limited in that it “is an approach to optimizing sales rather than a solution in and of itself,” said Michael Jude, research manager at Stratecast/Frost & Sullivan.

It “targets specific customers to specific marketing and sales approaches,” he told CRM Buyer. “All of that underlying sales collateral has to be produced, market tested and so on.”

Improving Conversion Rates

Improving customer conversions by 25 percent may be too ambitious a goal, Constellation’s Wang suggested. “Improving conversion rates by 10 percent is good enough. Twenty-five percent is extraordinary.”

The global conversion rate of visitors to e-commerce websites worldwide was 2.48 percent in the first quarter of this year, according to Statista. That was down from 2.94 percent in the preceding quarter.

Conversion rates depend on many factors. A store selling high-end electronics won’t have the same conversion rate as one selling US$10 tee shirts. One with a loyal list of, say, 100,000 buyers will have a better conversion rate than one buying cold traffic off Facebook.

Conversion rates “are very situational,” Frost’s Jude observed. “I might be selling buggy whips, for example, and, if no one is really buying such things, the market might be saturated already.”

Among the factors impacting conversion rates, according to Invespro, are the following:

  • Product type
  • Product cost or average order value
  • Traffic source
  • Type of Device
  • Platform
  • Location

Optimove’s Hurdles

“The challenge for Optimove is how they will ultimately embed themselves in the business process,” Constellation’s Wang said. “You need to orchestrate the process in order to deliver better personalization.”

Optimove has done a good job with personalization, and machine learning is where it will differentiate itself from the competition, he suggested.

Ultimately, what will drive differentiation, Wang remarked, is not the algorithms “but the type of customers a business has.”


Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology.
Email Richard.

The Eve of the Self-Driving Revolution

A decade ago, there wasn’t much talk about self-driving cars or autonomous-cars, but Toyota and Lexus were setting the stage with their self-parking cars. They aired television commercials showing how cars magically parallel-parked themselves. That was before any mention of the first iPhone or Android. At the time, it seemed amazing, but that was nothing compared to what’s coming next.

The self-parking revolution that spread throughout the automotive industry over the last decade is now expanding. There is more technology in cars today than ever before: navigation systems, automatic updates wirelessly downloaded to the dashboard, in-cabin WiFi and much more.

Self-Driving Levels

The market for self-driving cars, or autonomous cars, is going to be huge, but it will grow in stages. Autos with these technologies will roll out at different levels and at different times. There’s a problem with the terminology, though. The terms “self-driving” and “autonomous” often are used loosely, but they mean different things. It is going to take a while for these high-tech cars to arrive, and it will be a staggered rollout.

Some cars will be completely self-driving — you’ll be able to read, work or even nap while on a trip. It will be a while before they’re widely available, though. Other cars will have certain helpful features, but drivers will have to keep their eyes on the road and their hands on the wheel. Some cars will be limited to doing a few things on their own — like parking. Yet they are all considered “autonomous” vehicles.

Some of these technologies are already available or ready to roll out. Others will require infrastructure buildout — things like sensors in the roads, updated satellites and wireless systems. That means companies, cities and governments will have to make long-term investments in their roadways and technologies.

Growth Opportunities

This exciting new self-driving space relies heavily on artificial intelligence, the Internet of Things, wireless tech and the cloud. The car makers will blow their autonomous horns as loud as they can to attract attention to themselves with customers and investors. This could lead to some confusion. Companies likely will use the same terminology in their marketing of many different offerings.

The self-driving trend represents a huge growth opportunity for the wireless industry — for carriers like AT&T Mobility, Verizon Wireless, T-Mobile and Sprint, and handset makers like Apple, Google, Samsung, HTC, Xiaomi, Sony, LG, HTC and others.

It will be up to consumers to get smart about what this revolution means for each company, each car and each person. If you line up five different manufacturers and cars, you will have five different technologies to understand. You’ll have to educate yourself if you want to understand the various next-gen self-driving options.

Self-Driving Car Safety Decisions

One issue that’s going to require a lot of reassurance is safety.

For example, if an accident involving a self-driving car is inevitable, how does the artificial intelligence determine which maneuver would be the least harmful? Motorists already face this dilemma at times, often with just seconds to decide. Are we ready to turn over this life-or-death decision making to technology?

Ready or not, autonomous cars are coming. Fortunes will be made and technology will advance. As they roll out, some will be far more advanced than others, and questions we haven’t even thought of will arise as this industry develops.

In the early years, all a company will have to say is that it is in the self-driving or autonomous driving space, and it will attract investors and workers. Over time, as we all get smarter about it, the doers will stand out from the talkers. Right now, we are still in the talking stage.


Jeff Kagan has been an ECT News Network columnist since 2010. His focus is on the wireless and telecom industries. He is an independent
analyst, consultant and speaker.
Email Jeff.

6 Ways E-Commerce SMBs Can Offer Great Customer Service on a Tight Budget

Keeping customers satisfied is the No. 1 priority of any retail business. Technological advances such as interactive voice response systems, chatbots, omnichannel accessibility and robotics have helped many large e-commerce companies improve customer satisfaction rates.

However, these options require financial and manpower resources that small and mid-sized firms often don’t have, so SMBs have to look at other options.

Here are some budget-friendly solutions e-commerce SMBs can employ.

1. Prioritize Excellent Customer Service

Make customer service a distinctive trademark and selling point for your business, suggested Robert C. Johnson, CEO of TeamSupport.

“Getting the right answer and personalizing your response is more important than always rushing to clear out the ticket queue,” he told the E-Commerce Times. “It’s impossible to beat large players on price, but “customers are wiling to spend more with a company that offers superior customer service.”

So, when hiring customer service reps, “try to get people who are a B+ in multiple areas — from phone to email to chat and more — instead of employees who specialize in only one thing,” Johnson said.

2. Keep the Customer Informed

Communicate throughout the customer journey, advised Tara Kelly, CEO of Splice Software.

Good technology “can make great customer service more affordable,” she told the E-Commerce Times.

Personalize automated calls with customers’ first names, account numbers and other information, and ensure the system brings the right tone to the call.

3. Stay Up to Date

Keep abreast of technological advances in your industry, suggested Terry Duncan, president of Duncan Management.

“If your systems begin to hamper your ability to properly serve, supply or distribute in a timely manner, budget for replacement,” he told the E-Commerce Times.

Having a customer support software solution “is a must for small businesses,” TeamSupport’s Johnson said. Among other things, software “can make a customer service team appear bigger than it actually is, with built-in solutions like a self-service hub.”

4. Invest in Training

Technologies, equipment and customer needs constantly change, Duncan said, and both your company and your customers will benefit if your staff keeps up.

Focusing on improving, challenging and training associates makes for better working conditions and a lower turnover rate, which will be reflected in better customer service.

5. Understand Your Strengths

Don’t try to go head-to-head with Amazon and other large companies on their turf.

“SMBs are notorious for thinking too big when it comes to customer service in an attempt to compete,” Duncan observed.

“Don’t fall into this trap. Use your responsive, innovative and personable techniques as your armor to prevail,” he advised.

“Customers will enjoy the personable sales associate over the money they’ve spent every time,” noted Duncan. “And don’t forget the handwritten thank-you card a few days after the sale.”

6. Monitor Your Progress

Keep track of how your company is doing in terms of customer satisfaction.

Companies have to “measure beyond metrics like wait times and on-time order shipping and get to the heart of customer loyalty, which is about creating fans who will recommend and endorse your product,” Splice Software’s Kelly said.

For example, it’s surprisingly easy and affordable to run an automated Net Promoter Score survey, she pointed out, focusing on the key question: “How likely are you to recommend our company?”


Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology.
Email Richard.