Dec
15
2018
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The limits of coworking

It feels like there’s a WeWork on every street nowadays. Take a walk through midtown Manhattan (please don’t actually) and it might even seem like there are more WeWorks than office buildings.

Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on. I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @Arman.Tabatabai@techcrunch.com.

Co-working has permeated cities around the world at an astronomical rate. The rise has been so remarkable that even the headline-dominating SoftBank seems willing to bet the success of its colossal Vision Fund on the shift continuing, having poured billions into WeWork – including a recent $4.4 billion top-up that saw the co-working king’s valuation spike to $45 billion.

And there are no signs of the trend slowing down. With growing frequency, new startups are popping up across cities looking to turn under-utilized brick-and-mortar or commercial space into low-cost co-working options.

It’s a strategy spreading through every type of business from retail – where companies like Workbar have helped retailers offer up portions of their stores – to more niche verticals like parking lots – where companies like Campsyte are transforming empty lots into spaces for outdoor co-working and corporate off-sites. Restaurants and bars might even prove most popular for co-working, with startups like Spacious and KettleSpace turning restaurants that are closed during the day into private co-working space during their off-hours.

Before you know it, a startup will be strapping an Aeron chair to the top of a telephone pole and calling it “WirelessWorking”.

But is there a limit to how far co-working can go? Are all of the storefronts, restaurants and open spaces that line city streets going to be filled with MacBooks, cappuccinos and Moleskine notebooks? That might be too tall a task, even for the movement taking over skyscrapers.

The co-working of everything

Photo: Vasyl Dolmatov / iStock via Getty Images

So why is everyone trying to turn your favorite neighborhood dinner spot into a part-time WeWork in the first place? Co-working offers a particularly compelling use case for under-utilized space.

First, co-working falls under the same general commercial zoning categories as most independent businesses and very little additional infrastructure – outside of a few extra power outlets and some decent WiFi – is required to turn a space into an effective replacement for the often crowded and distracting coffee shops used by price-sensitive, lean, remote, or nomadic workers that make up a growing portion of the workforce.

Thus, businesses can list their space at little-to-no cost, without having to deal with structural layout changes that are more likely to arise when dealing with pop-up solutions or event rentals.

On the supply side, these co-working networks don’t have to purchase leases or make capital improvements to convert each space, and so they’re able to offer more square footage per member at a much lower rate than traditional co-working spaces. Spacious, for example, charges a monthly membership fee of $99-$129 dollars for access to its network of vetted restaurants, which is cheap compared to a WeWork desk, which can cost anywhere from $300-$800 per month in New York City.

Customers realize more affordable co-working alternatives, while tight-margin businesses facing increasing rents for under-utilized property are able to pool resources into a network and access a completely new revenue stream at very little cost. The value proposition is proving to be seriously convincing in initial cities – Spacious told the New York Times, that so many restaurants were applying to join the network on their own volition that only five percent of total applicants were ultimately getting accepted.

Basically, the business model here checks a lot of the boxes for successful marketplaces: Acquisition and transaction friction is low for both customers and suppliers, with both seeing real value that didn’t exist previously. Unit economics seem strong, and vetting on both sides of the market creates trust and community. Finally, there’s an observable network effect whereby suppliers benefit from higher occupancy as more customers join the network, while customers benefit from added flexibility as more locations join the network.

… Or just the co-working of some things

Photo: Caiaimage / Robert Daly via Getty Images

So is this the way of the future? The strategy is really compelling, with a creative solution that offers tremendous value to businesses and workers in major cities. But concerns around the scalability of demand make it difficult to picture this phenomenon becoming ubiquitous across cities or something that reaches the scale of a WeWork or large conventional co-working player.

All these companies seem to be competing for a similar demographic, not only with one another, but also with coffee shops, free workspaces, and other flexible co-working options like Croissant, which provides members with access to unused desks and offices in traditional co-working spaces. Like Spacious and KettleSpace, the spaces on Croissant own the property leases and are already built for co-working, so Croissant can still offer comparatively attractive rates.

The offer seems most compelling for someone that is able to work without a stable location and without the amenities offered in traditional co-working or office spaces, and is also price sensitive enough where they would trade those benefits for a lower price. Yet at the same time, they can’t be too price sensitive, where they would prefer working out of free – or close to free – coffee shops instead of paying a monthly membership fee to avoid the frictions that can come with them.

And it seems unclear whether the problem or solution is as poignant outside of high-density cities – let alone outside of high-density areas of high-density cities.

Without density, is the competition for space or traffic in coffee shops and free workspaces still high enough where it’s worth paying a membership fee for? Would the desire for a private working environment, or for a working community, be enough to incentivize membership alone? And in less-dense and more-sprawl oriented cities, members could also face the risk of having to travel significant distances if space isn’t available in nearby locations.

While the emerging workforce is trending towards more remote, agile and nomadic workers that can do more with less, it’s less certain how many will actually fit the profile that opts out of both more costly but stable traditional workspaces, as well as potentially frustrating but free alternatives. And if the lack of density does prove to be an issue, how many of those workers will live in hyper-dense areas, especially if they are price-sensitive and can work and live anywhere?

To be clear, I’m not saying the companies won’t see significant growth – in fact, I think they will. But will the trend of monetizing unused space through co-working come to permeate cities everywhere and do so with meaningful occupancy? Maybe not. That said, there is still a sizable and growing demographic that need these solutions and the value proposition is significant in many major urban areas.

The companies are creating real value, creating more efficient use of wasted space, and fixing a supply-demand issue. And the cultural value of even modestly helping independent businesses keep the lights on seems to outweigh the cultural “damage” some may fear in turning them into part-time co-working spaces.

And lastly, some reading while in transit:

Nov
21
2018
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LinkedIn cuts off email address exports with new privacy setting

A win for privacy on LinkedIn could be a big loss for businesses, recruiters and anyone else expecting to be able to export the email addresses of their connections. LinkedIn just quietly introduced a new privacy setting that defaults to blocking other users from exporting your email address. That could prevent some spam, and protect users who didn’t realize anyone who they’re connected to could download their email address into a giant spreadsheet. But the launch of this new setting without warning or even a formal announcement could piss off users who’d invested tons of time into the professional networking site in hopes of contacting their connections outside of it.

TechCrunch was tipped off by a reader that emails were no longer coming through as part of LinkedIn’s Archive tool for exporting your data. Now LinkedIn confirms to TechCrunch that “This is a new setting that gives our members even more control of their email address on LinkedIn. If you take a look at the setting titled ‘Who can download your email’, you’ll see we’ve added a more detailed setting that defaults to the strongest privacy option. Members can choose to change that setting based on their preference. This gives our members control over who can download their email address via a data export.”

That new option can be found under Settings & Privacy -> Privacy -> Who Can See My Email Address? This “Allow your connections to download your email [address of user] in their data export?” toggle defaults to “No.” Most users don’t know it exists because LinkedIn didn’t announce it; there’s merely been a folded up section added to the Help center on email visibility, and few might voluntarily change it to “Yes” as there’s no explanation of why you’d want to. That means nearly no one’s email addresses will appear in LinkedIn Archive exports any more. Your connections will still be able to see your email address if they navigate to your profile, but they can’t grab those from their whole graph.

Facebook came to the same conclusion about restricting email exports back when it was in a data portability fight with Google in 2010. Facebook had been encouraging users to import their Gmail contacts, but refused to let users export their Friends’ email addresses. It argued that users own their own email addresses, but not those of their Friends, so they couldn’t be downloaded — though that stance conveniently prevented any other app from bootstrapping a competing social graph by importing your Facebook friend list in any usable way. I’ve argued that Facebook needs to make friend lists interoperable to give users choice about what apps they use, both because it’s the right thing to do but also because it could deter regulation.

On a social network like Facebook, barring email exports makes more sense. But on LinkedIn’s professional network, where people are purposefully connecting with those they don’t know, and where exporting has always been allowed, making the change silently seems surreptitious. Perhaps LinkedIn didn’t want to bring attention to the fact it was allowing your email address to be slurped up by anyone you’re connected with, given the current media climate of intense scrutiny regarding privacy in social tech. But trying to hide a change that’s massively impactful to businesses that rely on LinkedIn could erode the trust of its core users.

Nov
20
2018
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LinkedIn launches its own Snapchat Stories: ‘Student Voices’

The social media singularity continues with the arrival of Snapchat Stories-style slideshows on LinkedIn as the app grasps for relevance with a younger audience. LinkedIn confirms to TechCrunch that it plans to build Stories for more sets of users, but first it’s launching “Student Voices” just for university students in the U.S. The feature appears atop the LinkedIn home screen and lets students post short videos to their Campus Playlist. The videos (no photos allowed) disappear from the playlist after a week while staying permanently visible on a user’s own profile in the Recent Activity section. Students can tap through their school’s own slideshow and watch the Campus Playlists of nearby universities.

LinkedIn now confirms the feature is in testing, with product manager Isha Patel telling TechCrunch “Campus playlists are a new video feature that we’re currently rolling out to college students in the US. As we know, students love to use video to capture moments so we’ve created this new product to help them connect with one another around shared experiences on campus to help create a sense of community.” Student Voices was first spotted by social consultant Carlos Gil, and tipped by Socially Contented’s Cathy Wassell to Matt Navarra.

A LinkedIn spokesperson tells us the motive behind the feature is to get students sharing their academic experiences like internships, career fairs and class projects that they’d want to show off to recruiters as part of their personal brand. “It’s a great way for students to build out their profile and have this authentic content that shows who they are and what their academic and professional experiences have been. Having these videos live on their profile can help students grow their network, prepare for life after graduation, and help potential employers learn more about them,” Patel says.

But unfortunately that ignores the fact that Stories were originally invented for broadcasting off-the-cuff moments that disappear so you DON’T have to worry about their impact on your reputation. That dissonance might confuse users, discourage them from posting to Student Voices or lead them to assume their clips will disappear from their profile too — which could leave embarrassing content exposed to hirers. “Authenticity” might not necessarily paint users in the best light to recruiters, so it seems more likely that students would post polished clips promoting their achievements… if they use it at all.

LinkedIn seems to be desperate to appeal to the next generation. Social app investigator and TechCrunch’s favorite tipster Jane Manchun Wong today spotted 10 minor new features LinkedIn is prototyping that include youth-centric options like GIF comments, location sharing in messages and Facebook Reactions-style buttons beyond “Like” such as “Clap,” “Insightful,” “Hmm,” and “Support.”

When users post to Student Stories, they’ll have their university’s logo overlaid as a sticker they can move around. LinkedIn will generate this plus a set of suggested hashtags like #OnCampus based on a user’s profile, including which school they say they attend, though users can also overlay their own text captions. Typically, users in the test phase were sharing videos of around 30 to 45 seconds. “Students are taking us to their school hackathons, showing us their group projects, sharing their student group activities and teaching us about causes they care about,” Patel explains. You can see an example video here, and watch a sizzle reel about the feature below.

For now, LinkedIn tells me it has no plans to insert ads between clips in Student Voices. But if the Stories content assists with discovering and vetting job candidates, it could make LinkedIn more unique and indispensable to recruiters who do pay for premium access. And if these Stories get a ton of views simply by being emblazoned atop the LinkedIn feed, users might return to the app more frequently to share them. As we’ve seen with the steady increase in popularity of Facebook Stories, if you give people a stage for narcissism, they will fill it.

LinkedIn’s start as a dry web tool for seeking jobs has made for a rocky transition as it tries to become a daily habit for users. Some tactical advice in its feed can be helpful, but much of LinkedIn’s content feels blatantly self-promotional, boring or transactional. Meanwhile, it’s encountering new competition as Facebook integrates career listings and job applications for blue-collar work into its social network that already sees over a billion people visit each day. It’s understandable why LinkedIn would try to latch on to the visual communication trend, as Facebook estimates Stories sharing will surpass feed sharing across all apps in 2019. But Student Voices nonetheless feels unabashedly “how do you do, fellow kids?”

Nov
09
2018
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LinkedIn Learning now includes 3rd party content and Q&A interactive features

LinkedIn, the Microsoft-owned social network for the working world with some 580 million users, took a big step into professional development and education when it acquired Lynda.com for $1.5 billion and used it as the anchor for LinkedIn Learning. Now, with 13,000 courses on the platform, LinkedIn is announcing two new developments to get more people using the service. It will now offer videos, tutorials and courses from third-parties such as Treehouse and the publishing division of Harvard Business School. And in a social twist, people who use LinkedIn Learning — the students and teachers — will now be able to ask and answer questions around LinkedIn Learning sessions, as well as follow instructors on LinkedIn, and see others’ feedback on courses.

Unlimited access to LinkedIn Learning comes when a person pays for LinkedIn’s Premium Career tier, which costs around $30/month, or when a company takes an enterprise team subscription for the Learning service. Today, LinkedIn tells me that it has around 11,000 enterprise customers; it doesn’t break out how much traffic it has overall on LinkedIn, but says that there has been a 64 percent growth in paid learners since the start of 2017 — a number that it’s clearly looking to boost with these new features.

James Raybould, the director of product for LinkedIn Learning, said that the third-party expansion will come slowly at first, with a handful of partners getting access to integrate with LinkedIn Learning. Over time, this could expand to be a public API for anyone to integrate content, he added, but for now, LinkedIn is doing the curating.

Notably, he also said that LinkedIn itself is not planning on curtailing the amount of content it will continue to produce for Learning: it’s currently adding more than 70 new courses each week on average, he said.

The content in this first wave of third-party providers feels like a natural extension of the influencer-based content that LinkedIn has been running in its main newsfeed: it runs the gamut from actual courses to learn new skills in specific disciplines, to the more nebulous area of professional development.

The first group includes Harvard Business Publishing (e.g. leadership development courses from Harvard Business School’s publishing arm); getAbstract (a Blinkist-style service that provides 10,000+ non-fiction book summaries plus TED talks); Big Think: 500 short-form videos on topics of the day (these are not so much “courses” as they are “life lessons” — subjects include organizing activism and an explainer on how to end bi-partisan politics); Treehouse, with courses on coding and product design skills; and Creative Live, with courses and tutorials for professionals in the creative industries to improve their skills and business acumen.

The fact that LinkedIn is adding more learning material that’s a natural extension of the kind of content it already offers to users in their timelines is not the only parallel between main LinkedIn and LinkedIn Learning. Raybould said that to help users discover content that might be most interesting to them, it uses data about what users browse and click on in the regular site.

“We have rich information about the network, including on engagement,” he said, and that helps LinkedIn’s algorithms suggest what to populate in individual learning libraries.

This is also, presumably, one of the reasons why third-parties will want to integrate: to get new audiences that are more targeted to the kind of content they are producing.

“At Harvard Business Publishing, we work to create the world’s best learning experiences to help organizations discover new ways to solve their most pressing leadership development challenges,” said Rich Gravelin, director of Partnerships and Alliances at Harvard Business Publishing, in a statement. “As an inaugural partner in the LinkedIn Learning Content Partner Program, we are bringing rich leadership development content to professionals across the globe, helping them navigate today’s complex business landscape. Thanks to the robust platform that LinkedIn Learning has built, we’re able to meet learners where they are and provide them with the unique and personalized learning experiences they need to succeed in their organizations.”

The social features also follow this model. Last year, LinkedIn rolled out a mentorship product across selected markets to pair users with people who steer them on their career development. That product set a precedent for how LinkedIn might use its wider social network and communication features to engage users in different ways, in the name of professional development.

The addition of Q&A features follows on from that, giving those taking courses or watching videos a way of interacting and following up with those who are doing the teaching. Adding that it could see more engagement across the whole of the Learning product.

It’s a surprise, in a way, that it’s taken this long for LinkedIn to add an interactive Q&A feature, considering that direct messaging and users interacting with each other has been a cornerstone of the product. On the other hand, it will be interesting to see if it proves to be a compelling enough feature to bring in more users to LinkedIn, luring them away from the Udemys and Skillsofts of the world.

Oct
07
2018
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Facebook poaches leaders of Refdash interview prep to work on Jobs

Facebook just snatched some talent to fuel its invasion of LinkedIn’s turf. A source tells TechCrunch that members of coding interview practice startup Refdash including at least some of its executives have been hired by Facebook. The social network confirmed to TechCrunch that members of Refdash’s leadership team are joining to work on Facebook’s Jobs feature that lets business promote employment openings that users can instantly apply for.

Facebook’s big opportunity here is that it’s a place people already browse naturally, so they can be exposed to Job listings even when they’re not actively looking for a company or career change. Since launching the feature in early 2017, Facebook has focused on blue-collar jobs like service and retail industry jobs that constantly need filling. But the Refdash team could give it more experience in recruiting for technical roles, connecting high-skilled workers like computer programmers to positions that need filling. These hirers might be willing to pay high prices to advertise their job listings on Facebook, siphoning revenue away from LinkedIn.

Facebook confirms that this is not an acquisition or technically a full acquihire, as there’s no overarching deal to buy assets or talent as a package. It’s so far unclear what exactly will happen to Refdash now that its team members are starting at Facebook this week, though it’s possible it will shut down now that its leaders have left for the tech giant’s cushy campuses and premium perks. Refdash’s website now says that “We’ve temporarily suspended interviews in order to make product changes that we believe will make your job search experience significantly better.”

Founded in 2016 in Mountain View with an undisclosed amount of funding from Founder Friendly Labs, Refdash gave programmers direct qualitative and scored feedback on their coding interviews. Users would do a mock interview, get graded, and then have their performance anonymously shared with potential employers to match them with the right companies and positions for their skills. This saved engineers from having to endure grueling interrogations with tons of different hirers. Refdash claimed to place users at startups like Coinbase, Cruise, Lyft, and Mixpanel.

A source tells us that Refdash focused on understanding people’s deep professional expertise and sending them to the perfect employer without having to judge by superficial resumes that can introduce bias to the process. It also touted allowing hirers to browse candidates without knowing their biographical details, which could also cut down on discrimination and helps ensure privacy in the job hunting process (especially if people are still working elsewhere and are trying to be discreet in their job hunt).

It’s easy to imagine Facebook building its own coding challenge and puzzles that programmers could take to then get paired with appropriate hirers through its Jobs product. Perhaps Facebook could even build a similar service to Refdash, though the one-on-one feedback sessions it’d conduct might not be scalable enough for Menlo Park’s liking. If Facebook can make it easier to not only apply for jobs but interview for them too, it could lure talent and advertisers away from LinkedIn to a product that’s already part of people’s daily lives.

The co-founders of Refdash have something of a track record in building companies that get acquihired to help add new features to existing services. Nicola Otasevic and Andrew Kearney were respectively the founder and tech lead for Room 77, which was picked up by Google in 2014 to help rebuild its travel search vertical. At the time it was described as a licensing deal although Refdash’s founders these days call it an acquisition.

Building tools to improve the basic process of hiring via remote testing could help Facebook get an edge on technical recruiting, but it’s not the only one building such features. LinkedIn’s stablemate Skype (like LinkedIn, owned by Microsoft) last year unveiled Interviews to let recruiters test developers and others applying for technical jobs with a real-time code editor. LinkedIn has not (yet?) incorporated it into its platform.

Sep
25
2018
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LinkedIn steps into business intelligence with the launch of Talent Insights

LinkedIn may be best known as a place where people and organizations keep public pages of their professional profiles, using that as a starting point for networking, recruitment and more — a service that today that has racked up more than 575 million users, 20 million companies and 15 million active job listings. But now under the ownership of Microsoft, the company has increasingly started to build a number of other services; today sees the latest of these, the launch of a new feature called Talent Insights.

Talent Insights is significant in part because it is LinkedIn’s first foray into business intelligence, that branch of enterprise analytics aimed at helping execs and other corporate end users make more informed business decisions.

Talent Insights is also notable because it’s part of a trend, where LinkedIn has been launching a number of other services that take it beyond being a straight social network, and more of an IT productivity tool. They have included a way for users to look at and plan commutes to potential jobs (or other businesses); several integrations with Microsoft software including resume building in Word and Outlook integrations; and adding in more CRM tools to its Sales Navigator product.

Interestingly, it has been nearly a year between LinkedIn first announcing Talent Insights and actually launching it today. The company says part of the reason for the gap is because it has been tinkering with it to get the product right: it’s been testing it with a number of customers — there are now 100 using Talent Insights — with employees in departments like human resources, recruitment and marketing using it.

The product that’s launching today is largely similar to what the company previewed a year ago: there are two parts to it, one focused on people at a company, called “Talent Pool,” and another focused on data about a company, “Company Report.”

 

The first of these will let businesses run searches across the LinkedIn database to discover talent with characteristics similar to those what a business might already be hiring, and figure out where they are at the moment (in terms of location and company affiliation), and where they are moving, what skills they might have in common, and how to better spot those who might be on the way up based on all of this.

The second set of data tools (Company Report) provides a similar analytics profile but about your organisation and those that you would like to compare against it in areas like relative education levels and schools of the respective workforces; which skills employees have or don’t have; and so on.

Dan Francis, a senior product manager running Talent Insights, said in an interview that for now the majority of the data that’s being used to power Talent Insights is primarily coming from LinkedIn itself, although there are other data sources also added into it, such as material from the Bureau of Labor Statistics. (And indeed, even some of LinkedIn’s other data troves, for example in its recruitment listings, or even in its news/content play, the material that populates both comes from third parties.)

He also added that letting companies feed in their own data to use that in number crunching — either for their own reports or those of other companies — “is on our roadmap,” an indication that LinkedIn sees some mileage in this product.

Adding in more data sources could also help the company appear more impartial and accurate: although LinkedIn is huge and the biggest repository of information of its kind when it comes to professional profiles, it’s not always accurate and in some cases can be completely out of date or intentionally misleading.

(Related: LinkedIn has yet to launch any “verified”-style profiles for people, such as you get on Facebook or Twitter, to prove they are who they say they are, that they work where they claim to work, and that their backgrounds are what they claim them to be. My guess as to why that has not been rolled out is that it would be very hard, if not impossible, to verify everything in a clear way, and so LinkedIn relies on the power of public scrutiny to keep people mostly honest.)

“We’re pretty transparent about this,” said Francis. “We don’t position this as a product as comprehensive, but as a representative sample. Ensuring data quality is good is something that we are careful about. We know sometimes data is not perfect. In some cases it is directional.”

Aug
07
2018
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Slack is raising $400M+ with a post-money valuation of $7B or more

Slack — the app that lets coworkers and others in professional circles chat with each other and call in data from hundreds of integrated apps in the name of getting more work done (or at least procrastinating in an entertaining way) — has been on a growth tear in the last few years, most recently passing 8 million daily active users, 3 million of them paying. Now, the company is planning to capitalise on that with some more funding.

TechCrunch has learned that Slack is raising another round, this time in the region of $400 million or possibly more, with a post-money valuation of at least $7 billion — adding a whopping $2 billion on top of the company’s last valuation in September 2017, when SoftBank led a $250 million round at a $5.1 billion valuation.

We’ve heard from multiple sources that a new investor, General Atlantic, is leading this round, with possibly another new backer, Dragoneer, also in the mix. It’s not clear which other investors might be involved; the company counts no less than 41 other backers on its cap table already, according to PitchBook. (You might even say Several People Are Funding…) We also don’t know whether this round has closed.

At $400 million, this would make it Slack’s biggest round to date. That size underscores a few different things.

First, it points to the existing opportunity in enterprise messaging. Consumerisation has taken hold, and apps that let users easily start and carry on a mix of serious and diverting conversations, infused with GIFs or whatever data they might need from other applications, are vying to replace other ways that people communicate in the workplace, such as email, phone conferences and in-person chats, even when people are in the same vicinity as each other. With consumer messaging apps like WhatsApp topping 1.5 billion users, there’s plenty of room for enterprise messaging to grow.

Second, the round and valuation emphasize Slack’s position as a leader in this area. While there were other enterprise social networking apps in existence before Slack first launched in 2013 — Yammer, Hipchat and Socialcast among them — nothing had struck a chord quite as Slack did. “Things have been going crazy”, was how co-founder and CEO Stewart Butterfield described it to me when Slack exited beta: teams trialling it were seeing usage from “every single team member, every day.”

That growth pace has continued. Today, the company counts 70,000 paid teams including Capital One, eBay, IBM, 21st Century Fox, and 65 percent of Fortune 100 companies among its bigger users; and with customers in 100 countries, half of its DAUs are outside North America (UK, Japan, Germany, France and India are its biggest international markets).

But thirdly — and this could be key when considering how this funding will be used — Slack is not the only game in town.

Software giant Microsoft has launched Teams, and social networking behemoth Facebook has Workplace. Using their respective dominance in enterprise software and social mechanics, these two have stolen a march on picking up some key customer wins among businesses that have opted for products that are more natural fits with what their employees were already using. Microsoft reported 200,000 paying organizations earlier this year, and Facebook has snagged some very large customers like Walmart.

Slack’s bottom-up distribution strategy could give it an edge against these larger companies and their broader but more complex products. The lightweight nature of Slack’s messaging-first approach allows it more easily be inserted into a company’s office stack. Nearly every type of employee needs office messaging, creating the potential for Slack to serve as an identity layer for enterprise software, not to mention the platform where not only people, but the information that exists in separate apps, converges. Its own Slack Fund invests in potential companies that plug in, as the company hopes to build an ecosystem of partners that can fill in missing functionality.

AUSTIN, TX – MARCH 15: Stewart Butterfield, CEO of Slack speaks onstage at ‘Stewart Butterfield in Conversation with Farhad Manjoo’ during the 2016 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 15, 2016 in Austin, Texas. (Photo by Mindy Best/Getty Images for SXSW)

Alongside dozens of other, smaller rivals offering comparative mixes of tools, it’s no surprise that last month Slack tightened up its bootlaces to take on the role of consolidator, snapping up IP and shutting down Hipchat and Stride from Atlassian, with the latter taking a stake in Slack as part of the deal.

Slack, which has a relatively modest 1,000+ employees, has ruled out an IPO this year, so this latest round will help it shore up cash in the meantime to continue growing, and competing.

Contacted for this story, Slack said that it does not comment on rumors or speculation.

Aug
07
2018
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Slack is raising $400M+ with a post-money valuation of $7B or more

Slack — the app that lets coworkers and others in professional circles chat with each other and call in data from hundreds of integrated apps in the name of getting more work done (or at least procrastinating in an entertaining way) — has been on a growth tear in the last few years, most recently passing 8 million daily active users, 3 million of them paying. Now, the company is planning to capitalise on that with some more funding.

TechCrunch has learned that Slack is raising another round, this time in the region of $400 million or possibly more, with a post-money valuation of at least $7 billion — adding a whopping $2 billion on top of the company’s last valuation in September 2017, when SoftBank led a $250 million round at a $5.1 billion valuation.

We’ve heard from multiple sources that a new investor, General Atlantic, is leading this round, with possibly another new backer, Dragoneer, also in the mix. It’s not clear which other investors might be involved; the company counts no less than 41 other backers on its cap table already, according to PitchBook. (You might even say Several People Are Funding…) We also don’t know whether this round has closed.

At $400 million, this would make it Slack’s biggest round to date. That size underscores a few different things.

First, it points to the existing opportunity in enterprise messaging. Consumerisation has taken hold, and apps that let users easily start and carry on a mix of serious and diverting conversations, infused with GIFs or whatever data they might need from other applications, are vying to replace other ways that people communicate in the workplace, such as email, phone conferences and in-person chats, even when people are in the same vicinity as each other. With consumer messaging apps like WhatsApp topping 1.5 billion users, there’s plenty of room for enterprise messaging to grow.

Second, the round and valuation emphasize Slack’s position as a leader in this area. While there were other enterprise social networking apps in existence before Slack first launched in 2013 — Yammer, Hipchat and Socialcast among them — nothing had struck a chord quite as Slack did. “Things have been going crazy”, was how co-founder and CEO Stewart Butterfield described it to me when Slack exited beta: teams trialling it were seeing usage from “every single team member, every day.”

That growth pace has continued. Today, the company counts 70,000 paid teams including Capital One, eBay, IBM, 21st Century Fox, and 65 percent of Fortune 100 companies among its bigger users; and with customers in 100 countries, half of its DAUs are outside North America (UK, Japan, Germany, France and India are its biggest international markets).

But thirdly — and this could be key when considering how this funding will be used — Slack is not the only game in town.

Software giant Microsoft has launched Teams, and social networking behemoth Facebook has Workplace. Using their respective dominance in enterprise software and social mechanics, these two have stolen a march on picking up some key customer wins among businesses that have opted for products that are more natural fits with what their employees were already using. Microsoft reported 200,000 paying organizations earlier this year, and Facebook has snagged some very large customers like Walmart.

Slack’s bottom-up distribution strategy could give it an edge against these larger companies and their broader but more complex products. The lightweight nature of Slack’s messaging-first approach allows it more easily be inserted into a company’s office stack. Nearly every type of employee needs office messaging, creating the potential for Slack to serve as an identity layer for enterprise software, not to mention the platform where not only people, but the information that exists in separate apps, converges. Its own Slack Fund invests in potential companies that plug in, as the company hopes to build an ecosystem of partners that can fill in missing functionality.

AUSTIN, TX – MARCH 15: Stewart Butterfield, CEO of Slack speaks onstage at ‘Stewart Butterfield in Conversation with Farhad Manjoo’ during the 2016 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 15, 2016 in Austin, Texas. (Photo by Mindy Best/Getty Images for SXSW)

Alongside dozens of other, smaller rivals offering comparative mixes of tools, it’s no surprise that last month Slack tightened up its bootlaces to take on the role of consolidator, snapping up IP and shutting down Hipchat and Stride from Atlassian, with the latter taking a stake in Slack as part of the deal.

Slack, which has a relatively modest 1,000+ employees, has ruled out an IPO this year, so this latest round will help it shore up cash in the meantime to continue growing, and competing.

Contacted for this story, Slack said that it does not comment on rumors or speculation.

Aug
01
2018
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WhatsApp finally earns money by charging businesses for slow replies

Today WhatsApp launches its first revenue-generating enterprise product and the only way it currently makes money directly from its app. The WhatsApp Business API is launching to let businesses respond to messages from users for free for up to 24 hours, but will charge them a fixed rate by country per message sent after that.

Businesses will still only be able to message people who contacted them first, but the API will help them programatically send shipping confirmations, appointment reminders or event tickets. Clients also can use it to manually respond to customer service inquiries through their own tool or apps like Zendesk, MessageBird or Twilio. And small businesses that are one of the 3 million users of the WhatsApp For Business app can still use it to send late replies one-by-one for free.

After getting acquired by Facebook for $19 billion in 2014, it’s finally time for the 1.5 billion-user WhatsApp to pull its weight and contribute some revenue. If Facebook can pitch the WhatsApp Business API as a cheaper alternative to customer service call centers, the convenience of asynchronous chat could compel users to message companies instead of phoning.

Only charging for slow replies after 24 hours since a user’s last message is a genius way to create a growth feedback loop. If users get quick answers via WhatsApp, they’ll prefer it to other channels. Once businesses and their customers get addicted to it, WhatsApp could eventually charge for all replies or any that exceed a volume threshold, or cut down the free window. Meanwhile, businesses might be too optimistic about their response times and end up paying more often than they expect, especially when messages come in on weekends or holidays.

WhatsApp first announced it would eventually charge for enterprise service last September when it launched its free WhatsApp For Business app that now has 3 million users and remains free for all replies, even late ones.

Importantly, WhatsApp stresses that all messaging between users and businesses, even through the API, will be end-to-end encrypted. That contrasts with The Washington Post’s report that Facebook pushing to weaken encryption for WhatsApp For Business messages is partly what drove former CEO Jan Koum to quit WhatsApp and Facebook’s board in April. His co-founder, Brian Acton, had ditched Facebook back in September and donated $50 million to the foundation of encrypted messaging app Signal.

Today WhatsApp is also formally launching its new display ads product worldwide. But don’t worry, they won’t be crammed into your chat inbox like with Facebook Messenger. Instead, businesses will be able to buy ads on Facebook’s News Feed that launch WhatsApp conversations with them… thereby allowing them to use the new Business API to reply. TechCrunch scooped that this was coming last September, when code in Facebook’s ad manager revealed the click-to-WhatsApp ads option and the company confirmed the ads were in testing. Facebook launched similar click-to-Messenger ads back in 2015.

Finally, WhatsApp also tells TechCrunch it’s planning to run ads in its 450 million daily user Snapchat Stories clone called Status. “WhatsApp does not currently run ads in Status though this represents a future goal for us, starting in 2019. We will move slowly and carefully and provide more details before we place any Ads in Status,” a spokesperson told us. Given WhatsApp Status is more than twice the size of Snapchat, it could earn a ton on ads between Stories, especially if it’s willing to make some unskippable.

Together, the ads and API will replace the $1 per year subscription fee WhatsApp used to charge in some countries but dropped in 2016. With Facebook’s own revenue decelerating, triggering a 20 percent, $120 billion market cap drop in its share price, it needs to show it has new ways to make money — now more than ever.

May
31
2018
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More speakers, panels at The Europas, and how to get your ticket free

The Europas Unconference & Awards is back on 3 July in London and we’re excited to announce more speakers and panel sessions as the event takes shape. Crypto and Blockchain will be a major theme this year, and we’re bringing together many of the key players. TechCrunch is once again the key media partner, and if you attend The Europas you’ll be first in the queue to get offers for TC events and Disrupt in Europe later in the year.

You can also potentially get your ticket for free just by sharing your own ticket link with friends and followers. See below for the details and instructions.

To recap, we’re jumping straight into our popular breakout sessions where you’ll get up close and personal with some of Europe’s leading investors, founders and thought leaders.

The Unconference is focused into zones including AI, Fintech, Mobility, Startups, Society, and Enterprise and Crypto / Blockchain.

Our Crypto HQ will feature two tracks of panels, one focused on investing and the other on how blockchain is disrupting everything from financial services, to gaming, to social impact to art.

We’ve lined up some of the leading blockchain VCs to talk about what trends and projects excite them most, including Outlier Ventures’ Jamie Burke, KR1’s George McDonaugh, blockchain angel Nancy Fenchay, Fabric Ventures’ Richard Muirhead and Michael Jackson of Mangrove Capital Partners.

Thinking of an ICO vs crowdfunding? Join Michael Jackson on how ICOs are disrupting venture capital and Ali Ganjavian, co-founder of Studio Banana, the creators of longtime Kickstarter darling OstrichPillow to understand the ins and outs of both.

We’ve also lined up a panel to discuss the process of an ICO – what do you need to consider, the highs, the lows, the timing and the importance of community. Linda Wang, founder and CEO of Lending Block, which recently raised $10 million in an April ICO, joins us.

We are thrilled to announce that Civil, the decentralised marketplace for sustainable journalism, will be joining to talk about the rise of fake news and Verisart’s Robert Norton will share his views on stamping out fraud in the art world with blockchain. Min Teo of ConsenSys will discuss blockchain and social impact and Jeremy Millar, head of Consensys UK, will speak on Smart Contracts.

Our Pathfounders Startup Zone is focused purely on startups. Our popular Meet the Press panel is back where some of tech’s finest reporters will tell you what makes a great tech story, and how to pitch (and NOT pitch them). For a start, TechCrunch’s Steve O’Hear and Quartz’s Joon Ian Wong are joining.

You’ll also hear from angels and investors including Seedcamp’s Carlos Eduardo Espinal; Eileen Burbidge of Passion Capital; Accel Partners’ Andrei Brasoveanu; Jeremy Yap; Candice Lo of Blossom Capital; Scott Sage of Crane Venture Partners; Tugce Ergul of Angel Labs; Stéphanie Hospital of OneRagtime; Connect Ventures’ Sitar Teli and Jason Ball of Qualcomm Ventures.

Sound great? You can grab your ticket here.

All you need to do is share your personal ticket link. Your friends get 15% off, and you get 15% off again when they buy.

The more your friends buy, the more your ticket cost goes down, all the way to free!

The Public Voting in the awards ends 11 June 2018 11:59: https://theeuropas.polldaddy.com/s/theeuropas2018

We’re still looking for sponsor partners to support these editorially curated panels.

Please get in touch with Petra@theeuropas.com for more details.

SPEAKERS SO FAR:

Jamie Burke, Outlier Ventures


Jeremy Millar, ConsenSys


Linda Wang, Lending Block


Robert Norton, Verisart


George McDonaugh, KR1


Eileen Burbidge, Passion Capital


Carlos Eduardo Espinal, Seedcamp


Sitar Teli, Connect Ventures


Michael Jackson, Mangrove Capital Partners


Min Teo, ConsenSys


Steve O’Hear, TechCrunch


Joon Ian Wong, Quartz


Richard Muirhead, Fabric Ventures


Nancy Fechnay, Blockchain Technologist + Angel


Candice Lo, Blossom Capital


Scott Sage, Crane Venture Partners


Andrei Brasoveanu, Accel


Tina Baker, Jag Shaw Baker


Jeremy Yap


Candice Lo, Blossom Capital


Tugce Ergul, Angel Labs


Stéphanie Hospital, OneRagtime


Jason Ball, Qualcomm Ventures

The Europas Awards
The Europas Awards are based on voting by expert judges and the industry itself. But key to the daytime is all the speakers and invited guests. There’s no “off-limits speaker room” at The Europas, so attendees can mingle easily with VIPs and speakers.

Vote for your Favourite Startups

Public Voting is still humming along. Please remember to vote for your favourite startups!

Awards by category:

Hottest Media/Entertainment Startup

Hottest E-commerce/Retail Startup

Hottest Education Startup

Hottest Startup Accelerator

Hottest Marketing/AdTech Startup

Hottest Games Startup

Hottest Mobile Startup

Hottest FinTech Startup

Hottest Enterprise, SaaS or B2B Startup

Hottest Hardware Startup

Hottest Platform Economy / Marketplace

Hottest Health Startup

Hottest Cyber Security Startup

Hottest Travel Startup

Hottest Internet of Things Startup

Hottest Technology Innovation

Hottest FashionTech Startup

Hottest Tech For Good

Hottest A.I. Startup

Fastest Rising Startup Of The Year

Hottest GreenTech Startup of The Year

Hottest Startup Founders

Hottest CEO of the Year

Best Angel/Seed Investor of the Year

Hottest VC Investor of the Year

Hottest Blockchain/Crypto Startup Founder(s)

Hottest Blockchain Protocol Project

Hottest Blockchain DApp

Hottest Corporate Blockchain Project

Hottest Blockchain Investor

Hottest Blockchain ICO (Europe)

Hottest Financial Crypto Project

Hottest Blockchain for Good Project

Hottest Blockchain Identity Project

Hall Of Fame Award – Awarded to a long-term player in Europe

The Europas Grand Prix Award (to be decided from winners)

The Awards celebrates the most forward thinking and innovative tech & blockchain startups across over some 30+ categories.

Startups can apply for an award or be nominated by anyone, including our judges. It is free to enter or be nominated.

Instead of thousands and thousands of people, think of a great summer event with 1,000 of the most interesting and useful people in the industry, including key investors and leading entrepreneurs.

• No secret VIP rooms, which means you get to interact with the Speakers

• Key Founders and investors speaking; featured attendees invited to just network

• Expert speeches, discussions, and Q&A directly from the main stage

• Intimate “breakout” sessions with key players on vertical topics

• The opportunity to meet almost everyone in those small groups, super-charging your networking

• Journalists from major tech titles, newspapers and business broadcasters

• A parallel Founders-only track geared towards fund-raising and hyper-networking

• A stunning awards dinner and party which honors both the hottest startups and the leading lights in the European startup scene

• All on one day to maximise your time in London. And it’s sunny (probably)!

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That’s just the beginning. There’s more to come…

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