All posts in “TC”

Litho is a finger-worn controller for augmented reality, IoT and other ‘spatial’ interactions

I first encountered the founders of Litho, a new hardware and software startup developing a new finger-worn controller, at London’s Pitch@Palace last April. The event sees startups pitch in front of the British royal family and other esteemed guests, and naturally the company’s young founders, 24-year-old Nat Martin (CEO) and 25-year-old Charlie Bruce (CTO), were a little overawed by the occasion, just like many of the other founders pitching that day. However, perhaps unbeknown to them, Litho was also one of the more notable companies, not least because, as the saying goes, hardware is hard.

Fast forward to today and the young company is ready to show the world the first publicly available iteration of what it has been building: an innovative finger-worn device that provides control over various “spatial interactions” and should find applications ranging from AR and VR to the smart home and the control of other IoT devices. The next stage for Litho is to offer the controller and access to its SDK to developers who join the startup’s beta programme for $199/£179.

“Computing is increasingly structured around the real world rather than the desktop,” says Litho’s Nat Martin. “With the advent of smart devices such as lights, thermostats, and door locks, physical things are becoming digitally connected. Equally, with the advent of AR, digital things are becoming physically anchored in the real world. These are two sides of the same coin — digital interactions are entering physical space”.

However, the status quo is for the smartphone to be the primary interface for these spatial interactions, but smartphones were designed to interact with 2D content on screens and are therefore struggling to make the leap. “Trying to interact with objects in the real world through a smartphone is like trying to do heart surgery with a spork,” says Martin. “More often than not our phones end up being a frustrating barrier to the digital world, rather than a tool to enable interactions with it”.

To solve this problem requires a combination of hardware and software, while the Litho device itself is described as an unobtrusive finger-worn controller that connects via Bluetooth Low Energy to a smartphone or AR headset. The controller has a capacitive touch surface on the underside, which allows for precise 2D input, scrolling and tapping. But, more significantly, it also has an array of motion sensors and provides haptic feedback.

The Litho SDK uses the popular 3D game development platform Unity, and Martin says developers will be able to make apps that can not only identify the direction (/vector) in which the wearer is pointing, but what they are pointing at in the real world. It also provides an interaction framework of off-the-shelf solutions for core interactions, including templates for tools such as object creation, movement and deletion, making it easier for developers to quickly build “delightful and intuitive experiences”.

“Having an input device designed from the ground up for 3D interaction opens a whole new paradigm of mobile interactions,” he adds. “Instead of an awkward and frustrating interface, developers can create precise yet effortless interactions in 3D space. This opens up a whole new range of use cases — architects and designers can create precise 3D models in the context of the real world, and gamers can create a virtual theme park in their back garden simply by pointing and drawing. At home, instead of opening up a smartphone app, searching for the right bulb, and operating a virtual dimmer, you can simply point and swipe to dim your lights”.

Meanwhile, Litho has already picked up a number of notable investors. The burgeoning startup has raised an undisclosed amount of seed funding from U.S. venture firm Greycroft, Paul Heydon (an early investor in Unity and Supercell), and Chris Albinson (who co-led investments in DocuSign, Pinterest and Turo), along with several other unnamed angel investors.

Instagram’s fundraiser stickers could lure credit card numbers

Mark Zuckerberg recently revealed that commerce is a huge part of the 2019 roadmap for Facebook’s family of apps. But before people can easily buy things from Instagram etc, Facebook needs their credit card info on file. That’s a potentially lucrative side effect of Instagram’s plan to launch a Fundraiser sticker in 2019. Facebook’s own Donate buttons have raised $1 billion, and bringing them to Instagram’s 1 billion users could do a lot of good while furthering Facebook’s commerce strategy.

New code and imagery dug out of Instagram’s Android app reveals how the Fundraiser stickers will allow you to search for non-profits and add a Donate button for them to your Instagram Story. After you’ve donated to something once, Instagram could offer instant checkout on stuff you want to buy using the same payment details.

Back in 2013 when Facebook launched its Donate button, I suggested that it could add a “remove credit card after checkout” option to its fundraisers if it wanted to make it clear that the feature was purely altruistic. Facebook never did that. You still need to go into your payment settings or click through the See Receipt option after donating and then edit your account settings to remove your credit card. We’ll see if Instagram is any different. We’ve also asked whether Instagrammers will be able to raise money for personal causes, which would make it more of a competitor to GoFundMe — which has sadly become the social safety net for many facing healthcare crises.

Facebook mentioned at its Communities Summit earlier this month that it’d be building Instagram Fundraiser stickers, but the announcement was largely overshadowed by the company’s reveal of new Groups features. This week, TechCrunch tipster Ishan Agarwal found code in the Instagram Android app detailing how users will be able search for non-profits or browse collections of Suggested charities and ones they follow. They can then overlay a Donate button sticker on their Instagram Story that their followers can click through to contribute.

We then asked reverse engineering specialist Jane Manchun Wong to take a look, and she was able to generate the screenshots seen above that show a green heart icon for the Fundraiser sticker plus the non-profit search engine. A Facebook’s spokespeople tell me that “We are in early stages and working hard to bring this experience to our community . . . Instagram is all about bringing you closer to the people and things you love, and a big part of that is showing support for and bringing awareness to meaningful communities and causes. Later this year, people will be able to raise money and help support nonprofits that are important to them through a donation sticker in Instagram Stories. We’re excited to bring this experience to our community and will share more updates in the coming months.”

Zuckerbeg said during the Q4 2018 earnings call last month that “In Instagram, one of the areas I’m most excited about this year is commerce and shopping . . . there’s also a very big opportunity in basically enabling the transactions and making it so that the buying experience is good”. Streamlining those transactions through saved payment details means more people will complete their purchase rather than abandoning their cart. Facebook CFO David Wehner noted on the call that “Continuing to build good advertising products for our e-commerce clients on the advertising side will be a more important contributor to revenue in the foreseeable future”. Even though Facebook isn’t charging a fee on transactions, powering higher commerce conversion rates convinces merchants to buy more ads on the platform.

With all the talk of envy spiraling, phone addiction, bullying, and political propaganda, enabling donations is at least one way Instagram can prove it’s beneficial to the world. Snapchat lacks formal charity features, and Twitter appears to have ended its experiment allowing non-profits to tweet donate buttons. Despite all the flack Facebook rightfully takes, the company has shown a strong track record with philanthropy that mirrors Zuckerberg’s own $47 billion commitment through the Chan Zuckerberg Initiative. And if having some relatively benign secondary business benefit speeds companies towards assisting non-profits, that’s a trade-off we should be willing to embrace.

GoCardless raises $75M Series E for its recurring payments network and heads to America

Compared to startups born into the frothy London fintech space as it exists today, 2011-founded GoCardless could well be considered a slow burner. However, in more recent years, the nearly 300 person company — headed up by co-founder and CEO Hiroki Takeuchi — has undoubtedly stepped on the gas in a bid to become the one stop shop globally for businesses that want to let customers pay via recurring bank payments.

A little over a year ago, GoCardless announced that it had raised $22.5 million in further funding, off the back of record annual growth in the U.K. and strong early traction in new markets. And today the fintech is disclosing another fresh injection of capital: $75 million in Series E funding, in part to fund new offices across EMEA, APAC and North America. In addition to its London HQ, the company already has sites in France, Australia and Germany, from which it says it processes transactions for 40,000 businesses worldwide.

Leading the round are new investors Adams Street Partners, Google Ventures and Salesforce Ventures. Previous backers Accel Partners, Balderton Capital, Notion Capital and Passion Capital have also followed on.

In a call with Takeuchi late last week, he picked up on a familiar a theme, describing the collection of recurring payments for many business as “broken”. Accessing the various bank to bank payments schemes has traditionally been difficult from a commercial, compliance and technical point of view. Instead, businesses have typically relied on payment methods, such as card payments or cheques, which aren’t up to the job of recurring payments.

That’s because these payment options are designed for one-off transactions (cards, for example, expire, breaking the payment flow). Meanwhile, there’s been a rise in subscription business models and an expanding B2B market in which contractors and partners need to make regular variable payments. According to Takeuchi, this means an international recurring payments network like the one GoCardless is building is needed more than ever.

“A global network for bank debit is an absolute necessity in allowing businesses to easily collect recurring payments anywhere, in any currency,” he says. “Thanks to the support of our investors we can now open up our global network and payments platform to more businesses across the world, delivering on our mission to take the pain out of getting paid, so that businesses can focus on what they do best”.

Takeuchi also tells me GoCardless is investing heavily in its product, with a product team of around 100 members. He declined to go into much detail with regards to GoCardless’ immediate or more long term roadmap, although currency conversion is one area the company is developing new products for. It’s not clear if that will be via an FX partner, such as London neighbour TransferWise, or a more home grown solution, although the former seems more likely. Takeuchi wouldn’t be drawn on any specifics.

Other areas of development include products to help businesses boost cash flow via “instant settlement,” and smarter payment features to increase transaction success rates. The latter could include using open banking to check if funds are available before trying to process a bank debit, or to automatically set the most appropriate payment date.

VCs aren’t falling in love with dating startups

Some 17 years ago, when internet dating was popular but still kind of embarrassing to talk about, I interviewed an author who was particularly bullish on the practice. Millions of people, he said, have found gratifying relationships online. Were it not for the internet, they would probably never have met.

A lot of years have passed since then. Yet thanks to Joe Schwartz, an author of a 20-year-old dating advice book, “gratifying relationship” is still the term that sticks in my mind when contemplating the end-goal of internet dating tools.

Gratifying is a vague term, yet also uniquely accurate. It encompasses everything from the forever love of a soul mate to the temporary fix of a one-night stand. Romantics can talk about true love. Yet when it comes to the algorithm-and-swipe-driven world of online dating, it’s all about gratification.

It is with this in mind, coincident with the arrival of Valentine’s Day, that Crunchbase News is taking a look at the state of that most awkward of pairings: startups and the pursuit of finding a mate.

Pairing money

Before we go further, be forewarned: This article will do nothing to help you navigate the features of new dating platforms, fine-tune your profile or find your soul mate. It is written by someone whose core expertise is staring at startup funding data and coming up with trends.

So, if you’re OK with that, let’s proceed. We’ll start with the initial observation that while online dating is a vast and often very profitable industry, it isn’t a huge magnet for venture funding.

In 2018, for instance, venture investors put $127 million globally into 27 startups categorized by Crunchbase as dating-focused. While that’s not chump change, it’s certainly tiny compared to the more than $300 billion in global venture investment across all sectors last year.

In the chart below, we look at global venture investment in dating-focused startups over the past five years. The general finding is that round counts fluctuate moderately year-to-year, while investment totals fluctuate heavily. The latter is due to a handful of giant funding rounds for China-based startups.

While the U.S. gets the most commitments, China gets the biggest ones

While the U.S. is home to the majority of funded startups in the Crunchbase dating category, the bulk of investment has gone to China.

In 2018, for instance, nearly 80 percent of dating-related investment went to a single company, China-based Blued, a Grindr-style hookup app for gay men. In 2017, the bulk of capital went to Chinese mobile dating app Tantan, and in 2014, Beijing-based matchmaking site Baihe raised a staggering $250 million.

Meanwhile, in the U.S., we are seeing an assortment of startups raising smaller rounds, but no big disclosed financings in the past three years. In the chart below, we look at a few of the largest funding recipients.

Dating app outcomes

Dating sites and apps have generated some solid exits in the past few years, as well as some less-stellar outcomes.

Mobile-focused matchmaking app Zoosk is one of the most heavily funded players in the space that has yet to generate an exit. The San Francisco company raised more than $60 million between 2008 and 2012, but had to withdraw a planned IPO in 2015 due to flagging market interest.

Startups without known venture funding, meanwhile, have managed to bring in some bigger outcomes. One standout in this category is Grindr, the geolocation-powered dating and hookup app for gay men. China-based tech firm Kunlun Group bought 60 percent of the West Hollywood-based company in 2016 for $93 million and reportedly paid around $150 million for the remaining stake a year ago. Another apparent success story is OkCupid, which sold to Match.com in 2011 for $50 million.

As for venture-backed companies, one of the earlier-funded startups in the online matchmaking space, eHarmony, did score an exit last fall with an acquisition by German media company ProSiebenSat.1 Media SE. But terms weren’t disclosed, making it difficult to gauge returns.

One startup VCs are assuredly happy they passed on is Ashley Madison, a site best known for targeting married people seeking affairs. A venture investor pitched by the company years ago told me its financials were quite impressive, but its focus area would not pass muster with firm investors or the VCs’ spouses.

The dating site eventually found itself engulfed in scandal in 2015 when hackers stole and released virtually all of its customer data. Notably, the site is still around, a unit of Canada-based dating network ruby. It has changed its motto, however, from “Life is short. Have an affair,” to “Find Your Moment.”

An algorithm-chosen match

With the spirit of Valentine’s Day in the air, it occurs that I should restate the obvious: Startup funding databases do not contain much about romantic love.

The Crunchbase data set produced no funded U.S. startups with “romantic” in their business descriptions. Just five used the word “romance” (of which one is a cold brew tea company).

We get it. Our cultural conceptions of romance are decidedly low-tech. We think of poetry, flowers, loaves of bread and jugs of wine. We do not think of algorithms and swipe-driven mobile platforms.

Dating sites, too, seem to prefer promoting themselves on practicality and effectiveness, rather than romance. Take how Match Group, the largest publicly traded player in the dating game, describes its business via that most swoon-inducing of epistles, the 10-K report: “Our strategy focuses on a brand portfolio approach, through which we attempt to offer dating products that collectively appeal to the broadest spectrum of consumers.”

That kind of writing might turn off romantics, but shareholders love it. Shares of Match Group, whose portfolio includes Tinder, have more than tripled since Valentine’s Day 2017. Its current market cap is around $16 billion.

So, complain about the company’s dating products all you like. But it’s clear investors are having a gratifying relationship with Match. When it comes to startups, however, it appears they’re still mostly swiping left.

How to read fiction to build a startup

“The book itself is a curious artefact, not showy in its technology but complex and extremely efficient: a really neat little device, compact, often very pleasant to look at and handle, that can last decades, even centuries. It doesn’t have to be plugged in, activated, or performed by a machine; all it needs is light, a human eye, and a human mind. It is not one of a kind, and it is not ephemeral. It lasts. It is reliable. If a book told you something when you were 15, it will tell it to you again when you’re 50, though you may understand it so differently that it seems you’re reading a whole new book.”—Ursula K. Le Guin

Every year, Bill Gates goes off-grid, leaves friends and family behind, and spends two weeks holed up in a cabin reading books. His annual reading list rivals Oprah’s Book Club as a publishing kingmaker. Not to be outdone, Mark Zuckerberg shared a reading recommendation every two weeks for a year, dubbing 2015 his “Year of Books.” Susan Wojcicki, CEO of YouTube, joined the board of Room to Read when she realized how books like The Evolution of Calpurnia Tate were inspiring girls to pursue careers in science and technology. Many a biotech entrepreneur treasures a dog-eared copy of Daniel Suarez’s Change Agent, which extrapolates the future of CRISPR. Noah Yuval Harari’s sweeping account of world history, Sapiens, is de rigueur for Silicon Valley nightstands.

This obsession with literature isn’t limited to founders. Investors are just as avid bookworms. “Reading was my first love,” says AngelList’s Naval Ravikant. “There is always a book to capture the imagination.” Ravikant reads dozens of books at a time, dipping in and out of each one nonlinearly. When asked about his preternatural instincts, Lux Capital’s Josh Wolfe advised investors to “read voraciously and connect dots.” Foundry Group’s Brad Feld has reviewed 1,197 books on Goodreads and especially loves science fiction novels that “make the step function leaps in imagination that represent the coming dislocation from our current reality.”

This begs a fascinating question: Why do the people building the future spend so much of their scarcest resource — time — reading books?

Image by NiseriN via Getty Images. Reading time approximately 14 minutes.

Don’t Predict, Reframe

Do innovators read in order to mine literature for ideas? The Kindle was built to the specs of a science fictional children’s storybook featured in Neal Stephenson’s novel The Diamond Age, in fact, the Kindle project team was originally codenamed “Fiona” after the novel’s protagonist. Jeff Bezos later hired Stephenson as the first employee at his space startup Blue Origin. But this literary prototyping is the exception that proves the rule. To understand the extent of the feedback loop between books and technology, it’s necessary to attack the subject from a less direct angle.

David Mitchell’s Cloud Atlas is full of indirect angles that all manage to reveal deeper truths. It’s a mind-bending novel that follows six different characters through an intricate web of interconnected stories spanning three centuries. The book is a feat of pure M.C. Escher-esque imagination, featuring a structure as creative and compelling as its content. Mitchell takes the reader on a journey ranging from the 19th century South Pacific to a far-future Korean corpocracy and challenges the reader to rethink the very idea of civilization along the way. “Power, time, gravity, love,” writes Mitchell. “The forces that really kick ass are all invisible.”

The technological incarnations of these invisible forces are precisely what Kevin Kelly seeks to catalog in The Inevitable. Kelly is an enthusiastic observer of the impact of technology on the human condition. He was a co-founder of Wired, and the insights explored in his book are deep, provocative, and wide-ranging. In his own words, “When answers become cheap, good questions become more difficult and therefore more valuable.” The Inevitable raises many important questions that will shape the next few decades, not least of which concern the impacts of AI:

“Over the past 60 years, as mechanical processes have replicated behaviors and talents we thought were unique to humans, we’ve had to change our minds about what sets us apart. As we invent more species of AI, we will be forced to surrender more of what is supposedly unique about humans. Each step of surrender—we are not the only mind that can play chess, fly a plane, make music, or invent a mathematical law—will be painful and sad. We’ll spend the next three decades—indeed, perhaps the next century—in a permanent identity crisis, continually asking ourselves what humans are good for. If we aren’t unique toolmakers, or artists, or moral ethicists, then what, if anything, makes us special? In the grandest irony of all, the greatest benefit of an everyday, utilitarian AI will not be increased productivity or an economics of abundance or a new way of doing science—although all those will happen. The greatest benefit of the arrival of artificial intelligence is that AIs will help define humanity. We need AIs to tell us who we are.”

It is precisely this kind of an AI-influenced world that Richard Powers describes so powerfully in his extraordinary novel The Overstory:

“Signals swarm through Mimi’s phone. Suppressed updates and smart alerts chime at her. Notifications to flick away. Viral memes and clickable comment wars, millions of unread posts demanding to be ranked. Everyone around her in the park is likewise busy, tapping and swiping, each with a universe in his palm. A massive, crowd-sourced urgency unfolds in Like-Land, and the learners, watching over these humans’ shoulders, noting each time a person clicks, begin to see what it might be: people, vanishing en masse into a replicated paradise.”

Taking this a step further, Virginia Heffernan points out in Magic and Loss that living in a digitally mediated reality impacts our inner lives at least as much as the world we inhabit:

“The Internet suggests immortality—comes just shy of promising it—with its magic. With its readability and persistence of data. With its suggestion of universal connectedness. With its disembodied imagines and sounds. And then, just as suddenly, it stirs grief: the deep feeling that digitization has cost us something very profound. That connectedness is illusory; that we’re all more alone than ever.”

And it is the questionable assumptions underlying such a future that Nick Harkaway enumerates in his existential speculative thriller Gnomon:

“Imagine how safe it would feel to know that no one could ever commit a crime of violence and go unnoticed, ever again. Imagine what it would mean to us to know—know for certain—that the plane or the bus we’re travelling on is properly maintained, that the teacher who looks after our children doesn’t have ugly secrets. All it would cost is our privacy, and to be honest who really cares about that? What secrets would you need to keep from a mathematical construct without a heart? From a card index? Why would it matter? And there couldn’t be any abuse of the system, because the system would be built not to allow it. It’s the pathway we’re taking now, that we’ve been on for a while.” 

Machine learning pioneer, former President of Google China, and leading Chinese venture capitalist Kai-Fu Lee loves reading science fiction in this vein — books that extrapolate AI futures — like Hao Jingfang’s Hugo Award-winning Folding Beijing. Lee’s own book, AI Superpowers, provides a thought-provoking overview of the burgeoning feedback loop between machine learning and geopolitics. As AI becomes more and more powerful, it becomes an instrument of power, and this book outlines what that means for the 21st century world stage:

“Many techno-optimists and historians would argue that productivity gains from new technology almost always produce benefits throughout the economy, creating more jobs and prosperity than before. But not all inventions are created equal. Some changes replace one kind of labor (the calculator), and some disrupt a whole industry (the cotton gin). Then there are technological changes on a grander scale. These don’t merely affect one task or one industry but drive changes across hundreds of them. In the past three centuries, we’ve only really seen three such inventions: the steam engine, electrification, and information technology.”

So what’s different this time? Lee points out that “AI is inherently monopolistic: A company with more data and better algorithms will gain ever more users and data. This self-reinforcing cycle will lead to winner-take-all markets, with one company making massive profits while its rivals languish.” This tendency toward centralization has profound implications for the restructuring of world order:

“The AI revolution will be of the magnitude of the Industrial Revolution—but probably larger and definitely faster. Where the steam engine only took over physical labor, AI can perform both intellectual and physical labor. And where the Industrial Revolution took centuries to spread beyond Europe and the U.S., AI applications are already being adopted simultaneously all across the world.”

Cloud Atlas, The Inevitable, The Overstory, Gnomon, Folding Beijing, and AI Superpowers might appear to predict the future, but in fact they do something far more interesting and useful: reframe the present. They invite us to look at the world from new angles and through fresh eyes. And cultivating “beginner’s mind” is the problem for anyone hoping to build or bet on the future.