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Samsung’s latest Galaxy Fold adds stylus support, waterproofing and an under-display camera

Behold, Samsung’s latest flagship. With the Galaxy Note out of the way — for this year, at least — the company used today’s Unpacked event to breathe added legitimacy into its foldable line. The original Galaxy Fold, introduced in 2019, represent a sort of experiment for the company (along with all the hiccups that entailed), as the first foldable from a major hardware manufacture, whereas last year’s Galaxy Z Fold 2 found the company correcting some of the glaring issues with its predecessor.

Today’s event finds the company making the case for Galaxy Z Fold 3 as something beyond an experiment or a curiosity. The task will almost certainly be an uphill battle for the next few generations. Unlike the latest version of the Flip, which starts at a price reduced considerably from its predecessor, the new Fold drops the entry price $200, down to $1,800. Any price reduction is a step in the right direction — and something that should be increasingly feasible as the technology continues to scale. But even in the world of premium flagships, that will continue to be a tough pill to swallow.

Image Credits: Brian Heater

What the upgraded Fold truly brings to the table, however, is a continued refinement to build materials that make the foldable screen a feasible option for day to day usage. This, of course, is precisely what hamstrung the original. Sure, the company did a lot of testing in controlled rooms, but once the product got out into the world (and into the hands of non-Samsung employees), problems of durability began cropping up, resulting in displays that were unintentionally damaged in a variety of imaginative ways.

The Galaxy Z Fold features a stronger frame made of “Armor Aluminum,” new protective film for the foldable display, Gorilla Glass Victus on the front-facing screen and an IPX8 rating — representing the first waterproof rating for the company’s foldable. Waterproofing has, of course, become something of an industry standard, but obviously things complicate quickly when you add folding mechanisms into the equation.

In fact, that’s why the rating has an “X” stuck in the middle of it. It’s effectively protected from accidental dunks in water, but not dust and debris. This is due to the hinge mechanism created for earlier models that allows some particulate matter through, but sweeps it away with a built in brush that moves as the device opens. That effectively protects it from getting behind the screen, where it could damage the phone with a finger press on the other side.

Image Credits: Brian Heater

Of course, the stronger protective film is the thing. It’s what’s (hopefully) standing between you and damaging your phone’s biggest selling point with an overzealous finger press — or, for that matter, a stylus. The Fold, after all, is following in the footsteps of Samsung’s S series by blurring the line with the Note (which handily opted to sit this round out).

In fact, Samsung actually went out of its way to create a special Fold Edition of the S-Pen specially designed to not damage the Fold display. It’s optional, of course, and as with the S21, there’s slot for the stylus in the handset — that’s to be expected, given the relatively fragility of the product. There will, of course, be a case with a built-in S-Pen holster.

The Fold Edition S-Pen is smaller and features a spring-loaded tip designed to retract so you don’t damage the screen by writing/drawing too hard. Certainly the Fold is a clear candidate for stylus functionality, given its 7.6-inch canvas that puts even the Note Ultra’s 6.9-inch screen to shame. Of course, the feasibility of this combination has been severely hampered by structural integrity issues with the screen. It will be interesting to see how the company has managed to navigate that.

At 7.6 inches (2208 x 1768, 374 ppi), the primary screen is largely unchanged. The cover screen, too, is about the same, at 6.2 inches — though it now joins the main screen with a 120 Hz refresh rate. 

Image Credits: Brian Heater

Notably, the Galaxy Z Fold 3 is the first Samsung device to add an under-display camera. That, along with foldable displays, has been one of the biggest holy grails in the smartphone category for the past several years. Samsung’s not the first to introduce the technology. A handful of Chinese manufacturers, including Xiaomi and Oppo, have either released or plan to release devices sporting the technology.

It’s telling that the company opted to test the water with the Fold. Aside from the obvious aspect of creating a contiguous display, it gives the company the opportunity to test out another mainstream technology. The dirty little secret about the first generation of under-screen cameras is that the picture quality tends to suck. Samsung surely knows this and has opted to stick it on a device that already has a selfie camera above its front display.

The company describes new tech as follows, “the minimum pixels applied on top of the camera hole, Z Fold 3 features an increased viewable area so users get an unbroken canvas for their favorite apps.” The thinking here is that the internal camera simply doesn’t get as much use, save for things like teleconferencing (which is, granted, something we’ve been doing a lot more of in the past year). As currently configured, it’s a bit of a compromise on both ends. Picture quality takes a hit and the camera hole is still semi-visible. So, either the best or worst of both worlds, depending on what you’re looking for.

Image Credits: Brian Heater

The under-display camera is four megapixels (when was the last time you saw one of those?), verses the 10-megapixel front/cover camera. The rear camera setup is virtually identical to its predecessor:

  • 12MP Ultra Wide. F2.2, Pixel size: 1.12μm, FOV: 123-degree
  • 12MP Wide-angle. Dual Pixel AF, OIS, F1.8, Pixel size: 1.8μm, FOV: 83-degree
  • 12MP Telephoto. PDAF, F2.4, OIS, Pixel size: 1.0μm, FOV: 45-degree

The battery has taken a bit of a hit, down from 4,500 to 4,400mAh (spread out over two modules, as is the foldable way). The Fold also supports fast charge/fast wireless and Wireless Powershare to use that 4,400mAh battery to power other gadgets. Samsung generally doesn’t offer battery estimates for phones prior to release, so wait on the review for that. The whole thing is powered by a Snapdragon 888 chip (market depending), coupled with 12GB of RAM and either 256 or 512GB of storage.

Image Credits: Brian Heater

Like the rest of the devices announced today, the Galaxy Z Fold 3 is up for preorder now and starts shipping on the 26th. The $1,800 price tag continues to be a roadblock toward more mainstream adoption, though the company has moved a number of these devices to early adopters already. Preorders get a $200 Samsung Credit.

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No-code is code

Today, the release of OpenAI Codex, a new Al system that translates natural language to code, marks the beginning of a shift in how computer software is written.

Over the past few years, there’s been growing talk about “no code” platforms, but this is no new phenomenon. The reality is, ever since the first programmable devices, computer scientists have regularly developed breakthroughs in how we “code” computer software.

The first computers were programmed with switches or punch cards, until the keyboard was invented. Coding became a matter of typing numbers or machine language, until Grace Hopper invented the modern compiler and the COBOL language, ushering in decades of innovation in programming languages and platforms. Languages like Fortran, Pascal, C, Java and Python evolved in a progression, where the newest language (built using an older language) enabled programmers to “code” using increasingly more human language.

Alongside languages, we’ve seen the evolution of “no-code” platforms — including Microsoft Excel, the 1980s granddaddy of no-code — that empower people to program computers in a visual interface, whether in school or in the workplace. Anytime you write a formula in a spreadsheet, or when you drag a block of code on Code.org or Scratch, you’re programming, or “coding,” a computer. “No code” is code. Every decade, a breakthrough innovation makes it easier to write code so that the old way of coding is replaced by the new.

Does this mean coding is dead? No! It doesn’t replace the need for a programmer to understand code. It means coding just got much easier, higher impact and thus more important.

This brings us to today’s announcement. Today, OpenAl announced OpenAI Codex, an entirely new way to “write code” in the natural English language. A computer programmer can now use English to describe what they want their software to do, and OpenAl’s generative Al model will automatically generate the corresponding computer code, in your choice of programming language. This is what we’ve always wanted — for computers to understand what we want them to do, and then do it, without having to go through a complex intermediary like a programming language.

But this is not an end, it is a beginning. With Al-generated code, one can imagine an evolution in every programming tool, in every programming class, and a Cambrian explosion of new software. Does this mean coding is dead? No! It doesn’t replace the need for a programmer to understand code. It means coding just got much easier, higher impact and thus more important, just as when punch cards were replaced by keyboards, or when Grace Hopper invented the compiler.

In fact, the demand for software today is greater than ever and will only continue to grow. As this technology evolves, Al will play a greater role in generating code, which will multiply the productivity and impact of computer scientists, and will make this field accessible to more and more computer programmers.

There are already tools that let you program using only drag-and-drop, or to write code using your voice. Improvements in these technologies and new tools, like OpenAI Codex, will increasingly democratize the ability to create software. As a result, the amount of code — and the number of coders — in the world will increase.

This also means that learning how to program — in a new way — is more important than ever. Learning to code can unlock doors to opportunity and also help solve global problems. As it becomes easier and more accessible to create software, we should give every student in every school the fundamental knowledge to not only be a user of technology but also a creator.

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Former Snap employees raise $9M for Trust, emerging from beta to level marketing playing field

Trust wants to give smaller businesses the same advantages that large enterprises have when marketing on digital and social media platforms. It came out of beta with $9 million in seed funding from Lerer Hippeau, Lightspeed Venture Partners, Upfront Ventures and Upper90.

The Los Angeles-based company was started in 2019 by a group of five Snap alums working in various roles within Snap’s revenue product strategy business. They were building tools for businesses to fund success with digital marketing, but kept hearing from customers about the advantage big advertisers had over smaller ones — the ability to receive good payment terms, credit lines, as well as data and advice.

Aiming to flip the script on that, the group created Trust, which is a card and business community to help digital businesses navigate the ever-changing pricing models to market online, receive the same incentives larger advertisers get and make the best decision of where their marketing dollars will reach the furthest.

Trust dashboard

Trust does this in a few ways: Its card, built in partnership with Stripe, enables businesses to increase their buying power by up to 20 times and have 45 days to make payments on their marketing investments, CEO James Borow told TechCrunch. Then as part of its community, companies share knowledge of marketing buys and data insights typically reserved for larger advertisers. Users even receive news via their dashboard around their specific marketing strategy, he added.

“The ad platforms are walled gardens, and most people don’t know what is going on inside, so our customers work together to see what is going on,” Borow said.

The growth of e-commerce is pushing more digital marketing investments, providing opportunity for Trust to be a huge business, Borow said. E-commerce sales in the U.S. grew by 39% in the first quarter, while digital advertising spend is forecasted to increase 25% this year to $191 billion. Meanwhile, Google, Facebook, Snapchat and Twitter all recently reported rapid growth in their year-over-year advertising revenues, Borow said.

The new funding will go toward increasing the company’s headcount.

“We have active customers on the platform, so we wanted to ramp up hiring as soon as we went into general release,” he added. “We are leaving beta with 25 businesses and a few hundred on our waitlist.”

That list will soon grow. In addition to the funding round, Trust announced a strategic partnership with social shopping e-commerce platform Verishop. The company’s 3,500 merchants will receive priority access to the Trust card and community, Borow said.

Andrea Hippeau, partner at Lerer Hippeau, said she knew Borow from being an investor in his previous advertising company Shift, which was acquired by Brand Networks in 2015.

When Borow contacted Lerer about Trust, Hippeau said this was the kind of offering that would be applicable to the firm’s portfolio, which has many direct-to-consumer brands, and knew marketing was a huge pain point for them.

“Digital marketing is important to all brands, but it is also a black box that you put marketing dollars into, but don’t know what you get,” she said. “We hear this across our portfolio — they spend a lot of money on ad platforms, yet are treated like mom-and-pop companies in terms of credit. When in reality Casper is outspending other companies by five times. Trust understands how important marketing dollars are and gives them terms that are financially better.”

 

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E-commerce-as-a-service platform Cart.com picks up $98M to give brands scaling tools

Cart.com, a Houston-based company providing end-to-end e-commerce services, brought in its third funding round this year, this time a $98 million Series B round to bring its total funding to $143 million.

Oak HC/FT led the new round of funding and was joined by PayPal Ventures, Clearco, G9 Ventures, Mercury Fund, Valedor Partners and Arsenal Growth. Strategic investors in the Series B include Heyday CEO Sebastian Rymarz and Casper CEO Philip Krim. This new round follows a $25 million Series A round, led by Mercury and Arsenal in July, and a $20 million seed round from Bearing Ventures.

Cart.com CEO Omair Tariq, who was previously an executive at Home Depot and COO of Blinds.com, co-founded the company in September 2020 with Jim Jacobson, former CEO of RTIC Outdoors.

Tariq told TechCrunch that the company provides software, services and infrastructure to businesses so they can scale online. Cart.com is taking the best parts of selling direct-to-consumer on marketplaces like Amazon and Shopify to create value for brands. Tariq said he is pioneering the term “e-commerce-as-a-service” to bring together under one platform a suite of business tools like storefront software, marketing, fulfillment, payments and customer service.

“We see the power of having an interconnected platform,” Tariq said. “There also needs to be a hybrid between selling direct-to-consumer and on Amazon and Shopify for companies that don’t have the money to pay for a percentage of their sales and receive no access to customers or data, and needing 20 different plug-ins that are not connected.”

Cart.com went after the new funding after seeing validation of its idea: brands coming to them wanting more products and services, which led to acquisitions. The company has acquired seven companies so far, including — AmeriCommerce, Spacecraft Brands and, more recently, DuMont Project and Sauceda Industries. Tariq is planning for another three or four by the end of the year.

In addition, it received inbound interest from strategic investors, like Oak and PayPal, which Tariq said was going to enable the company “to be more successful faster.”

Allen Miller, principal at Oak HC/FT, said after spending time with Tariq to understand his vision about Cart.com’s software, payments and services, he felt that the company was doing something that didn’t exist in today’s commerce infrastructure.

He said that Cart.com is well positioned to help companies, like those with $1 million in sales, stay focused on growing the business while Cart.com stitches together all of the tools for them to operate in the background.

“It’s a unique offering to merchants that has a high value proposition,” Miller said. “The vision and drive that Omair and Jim have, along with an inspiring mission they want to achieve — to be brand-centric and help the next generation of merchants. These guys also have a good playbook on finding companies and teams to acquire, as well as handling the post M&A to have everyone on one platform.”

The new financing will enable Cart.com to further invest in technology development and to increase headcount by at least 15 times, with plans to go from fewer than two dozen employees to more than 300 team members by the end of the year. The company has nearly 70 jobs posted on its website for positions in engineering, technology, digital marketing and e-commerce. Tariq also expects half of the funds to go toward more acquisitions.

Cart.com currently serves over 2,000 e-commerce brands, including GNC, Haymaker Coffee and KeHE, and processes more than $700 million in gross merchandise value per year. The company saw revenue increase 400% since the platform’s launch in November.

In addition, the company has nine fulfillment centers across the country, and is increasing its access to reach 80% of the U.S. population with two-day shipping, Tariq added.

“We are giving the power back to brands by giving them what they need to operate e-commerce,” he said. “There are still a few pieces to fill in so brands have a unified experience, but with us, they can add fulfilment, marketing or customer conversion tools with the click of a couple of buttons.”

 

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Bite Ninja scoops up pre-seed funding to reimagine restaurant working environments

Will Clem knows all too well about restaurant workers not showing up for a shift. At least one person would have car trouble or need to stay home with sick children, and it became a common occurrence on the weekends for the co-founder of Memphis Meats and owner of Baby Jacks BBQ in Memphis.

Needing to fill a shift one Friday night, Clem decided to prop his laptop in the drive-thru lane of one of his restaurants and took orders from home by remoting into the system. No one noticed that he wasn’t actually taking orders from the kitchen itself. Thus came the idea for Bite Ninja, a remote hiring technology platform for restaurants.

Clem connected with Orin Wilson to start the company in 2020 and worked for a year on the technology before launching it in March. Today, the company announced $675,000 in pre-seed funding led by Y Combinator, AgFunder and Manta Ray.

With many restaurants unable to find workers as a result of the global pandemic, Clem and Wilson wanted to build a technology that would enable restaurants to go back to normal operating hours, or even reopen their stores. At the same time, the workers, or “Ninjas” as they are referred to, can work the drive-thru or counter for a lunch or dinner rush shift from home, but appear on-screen to customers via menu boards, Wilson said.

Bite Ninja drive-thru. Image Credits: Bite Ninja

“When a restaurant is slammed, you need an army of people to work the rush, but it is not reasonable to ask them to get in their uniform and get in their cars, last-minute, to clock in for just an hour or two,” he added. “They have control of their schedule and can pick the right shift for them. It is so popular that we typically have five to 10 people bidding on each shift.”

Bite Ninja is providing a better experience and reaches potential workers that would not necessarily have an interest in performing fast food work. Many of the 3,000 Ninjas already working with the company are stay-at-home moms and retirees with customer service experience, but who can’t physically come into a store, Clem said. In addition, the company is working with the Nurse-Family Partnership to help women get back into the workforce.

The company initially ran three pilot programs and has expanded services to curbside and front cashier stations. The funding will enable Bite Ninja to scale initiatives, hire additional software engineers and prepare for a rollout at national food chains.

Since launching earlier this year, Bite Ninja is already being used in a few thousand stores.

Manuel Gonzalez, partner at AgFunder, said restaurants are a big part of entrepreneurship, but the pandemic forced more than 110,000 of them out of business.

“Bite Ninja’s solution is one that decreases costs to restaurant owners, but increases the income of the worker,” he said. “It also helps entrepreneurs and the community because restaurants are important for economic, cultural, community and social points of view.”

 

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Pave gets Y Combinator to back better startup compensation tools, again

Pave, a San Francisco-based startup that helps companies benchmark, plan and communicate compensation to their employees, has raised a $46 million Series B. YC Continuity led the round, which also saw participation from Andreessen Horowitz and Bessemer Venture Partners. The round comes eight months after Pave closed a $16 million Series A round. Today’s financing puts Pave’s valuation at $400 million, up from $75 million one year ago.

Pave launched with an ambitious goal: Can it measure pay across venture-backed tech companies in real time, and help startups move their comp table off of spreadsheets? AngelList and Glassdoor have already tried to build a similar benchmark-worthy data set, but Pave may have a built-in advantage over the companies that tried to fix the same problem before. Y Combinator, which helped incubate Pave and is now leading its most recent round through its later-stage capital vehicle, is one of the largest startup accelerators in the world. Of Pave’s 900 customers to date, one-third come from Y Combinator, and CEO Matthew Schulman only sees that number growing.

“Having YC’s deep support of Pave as the YC-stamped leader in the burgeoning [compensation technology] industry is and will continue to be game changing for our distribution and ability to have ample data coverage in our benchmarking product,” Schulman said. He compared Pave’s distribution trajectory as similar to what fintech company Brex, also backed by Y Combinator Continuity, managed. The founder estimates that 60% of YC companies are active Brex customers.

The reliance on YC could engender platform risk, considering how often the accelerator invests in competitors — often within the same batch. That said, an investment from Y Combinator Continuity, which does Series B rounds and higher, may be a signal that YC has found the comptech player it wants to back. Ali Rowghani, the managing director of the fund and former COO of Twitter, is joining Pave’s board.

Data is everything for the startup, supporting each of Pave’s three main services that it offers to companies. First, Pave uses market and partner data to help companies benchmark salaries for their employees. Second, the startup integrates with HR tools such as Workday, Carta and Greenhouse to give its customers a holistic picture on how employees are currently being compensated, and what makes sense for promotion cycles and salary bumps. And third, the data work culminates into formal offers and compensation packages that employers can then offer to new and old employees.

Pave’s current customers account for data on over 65,000 employee records. The first product serves as a free top of funnel service, while the last two are paid services offered up like any ol’ enterprise software contract.

The world of compensation is rife with inequity, leading to the gender wage gap, and the gaps we can see in the market regarding minority pay disparity.

Schulman views one of Pave’s goals as getting companies to go from doing their D&I analysis from once a year, to doing it consistently. The company plans to build diversity and inclusion-specific dashboards that allow companies to see inequities and access ways or suggestions to improve their breakdown.

“What gets measured, gets improved,” Schulman said. Pave has begun to track its own compensation and diversity metrics, in an effort to be more transparent with its employees and maybe inspire some companies to do the same. About 33% of Pave’s workforce identify as women, compared to an industry average of 28.8%. Half of Pave’s executives, and half of Pave’s board members, identify as women. The company has committed to having 50% of its client-facing roles, which include customer success managers and sales members, “to be female or persons from underrepresented groups.”

While Pave is starting to disclose its own internal benchmarks, transparency around diversity isn’t yet a standard within tech companies — it’s far easier to get valuations than to get specifics around the makeup of historically overlooked individuals within organizations. Pave recently launched the Pave Data Lab, which uses its data set to showcase compensation trends and inequities within how tech workers are paid. That said, Pave doesn’t currently require the companies it works with to upload gender and race information into their benchmarking tool, and didn’t disclose what specific percentage of companies on its platform share that data.

It is hoping noise will make a difference. Pave’s compensation benchmarking data is now free for all companies to use, which will bring more data underneath its umbrella, and more standards to the confusing world of compensation.

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Extra Crunch roundup: Influencer marketing, China’s tech clampdown, drafting growth teams

Before you hire a marketing consultant who doesn’t understand your products or commit to a CMO who has several years of experience — but none in your sector — consider influencer marketing.

If the phrase evokes images of celebrities hawking hard seltzer, think again: An influencer can be as humble as an enthusiastic Reddit user who manages your Telegram channel.

According to Uber growth marketing manager Jonathan Martinez:

“ … You don’t need to find influencers with millions of followers. Instead, lean toward microinfluencers for testing, which will bring cost efficiency and the ability to sponsor a diverse range of people.”

If your startup has a clear brand pitch, “an enticing offer” and “clear next steps,” you’re ready to reach out to influencers, he says.

In a guest post, Martinez explains how to structure offers that will maximize conversions and keep your representatives motivated to promote your products and services.


Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.


An illustration of Julian Shapiro

Image Credits: Julian Shapiro

This morning, we published an interview with growth expert Julian Shapiro, a founder and angel investor who also advises startups on the best way to present themselves.

Marketing is data-driven, but good storytelling is an art, says Shapiro.

To connect with consumers on an emotional level, “you need a mix of goodwill, what-we-stand-for ideology, social prestige and customer delight — among other affinity-building ingredients.”

Thanks very much for reading Extra Crunch this week!

Walter Thompson

Senior Editor, TechCrunch

@yourprotagonist

Everyone wants to fund the next Coinbase

“In celebration of Coinbase’s earnings report today, investors poured a mountain of cash into one of the company’s global competitors,” Alex Wilhelm writes in The Exchange.

Rolling up his sleeves, he dug into numbers from Coinbase, FalconX and FTX to give readers some perspective on the state of cryptocurrency exchanges.

How to hire and structure a growth team

colorful blocks with people icons over wooden table

Image Credits: tomertu (opens in a new window) / Getty Images

Companies that have reached $5 million to $10 million in annual revenue are more likely to assemble growth teams; it’s a smart investment for any startup that’s achieved product-market fit.

It can also be potentially disruptive: Early marketing and product managers may feel sidelined by new cross-functional teams that suddenly take a leadership role.

In a detailed walkthrough, senior director of growth at OpenView Sam Richard explains the core players needed to build a growth team and how to integrate them into the organization smoothly, and shares some useful experiments to run.

“Don’t expect a single hire to scratch the growth itch for you,” Richard warns.

“A brilliant hire is going to come up with ideas, but will absolutely need a team to support them, turn them into experiments and then make them a reality.”

Indiegogo’s CEO on how crowdfunding navigated the pandemic

Image Credits: Bryce Durbin

In an interview with Brian Heater, Indiegogo CEO Andy Yang spoke about how the pandemic has impacted the crowdfunding platform, the challenges of stepping into the role after the previous CEO departed, and how the company reached profitability.

The company wasn’t profitable when you joined?

We weren’t profitable. I joined and then we cut to profitability, or at least kind of a neutral state, and with any kind of change in leadership, some tenured folks opted out, and we basically became a new team overnight to kind of re-found the company, and we’ve been slowly adding people over the last couple years, but always with that eye on profitability and controlling our own destiny.

Kickstarter’s CEO on the future of crowdfunding

Image Credits: Bryce Durbin

Last week, Kickstarter announced that people have backed more than 200,000 projects with $6 billion in pledges since the company launched in 2009. Just 15 months ago, it crossed the $5 billion threshold.

Brian Heater spoke to CEO Aziz Hasan, who took over in 2019, about last year’s substantial of layoffs, the pandemic’s long-term impact on crowdfunding, and how he’s working to build a more resilient company:

I think for us some of the most important things are to really just understand how we’re operating the business, making sure that we are sufficient in the buffer that we have for the business to make sure that we’re operating in a way that we can feel confident that the team is going to have some stability, that they’re going to have this resilience.

Craft your pitch deck around ‘that one thing that can really hook an investor’

We frequently run articles with advice for founders who are working on pitch decks. It’s a fundamental step in every startup’s journey, and there are myriad ways to approach the task.

Michelle Davey of telehealth staffing and services company Wheel and Jordan Nof of Tusk Venture Partners appeared on Extra Crunch Live recently to analyze Wheel’s Series A pitch.

Nof said entrepreneurs should candidly explain to potential investors what they’ll need to believe to back their startup.

” … It takes a lot of guesswork out of the equation for the investor and it reorients them to focus on the right problem set that you’re solving,” he said.

“You get this one shot to kind of influence what they think they need to believe to get an investment here … if you don’t do that … we could get pretty off base.”

Online retailers: Stop trying to beat Amazon

Image of a shop owner taking a photograph of a pair of shoes before mailing to represent how small businesses can compete with Amazon.

Image Credits: TravelCouples (opens in a new window) / Getty Images

Going up against global e-commerce behemoth Amazon might seem futile, but smaller players can leverage value adds that give them a leg up when it comes to ensuring a loyal customer base, says Kenny Small, vice president SAP and Enterprise at Qualitest Group.

“The reality is that Amazon’s true unique selling proposition is its distribution network,” he writes in a guest post. “Online retailers will not be able to compete on this point because Amazon’s distribution network is so fast.

“Instead, it’s important to focus on areas where they can excel — without having to become a third-party seller on Amazon’s platform.”

The China tech crackdown continues

Edtech and fintech have been in the Chinese Communist Party crosshairs in recent weeks — now, chat apps and gaming are among the targets.

Beijing filed a civil suit against Tencent over claims that its WeChat Youth Mode flouts laws protecting minors, and state media criticized the gaming industry as the digital equivalent of passing out drugs to kids, Alex Wilhelm writes in The Exchange.

He writes that the “news appears to indicate that we should expect more of the same as we’ve seen in recent months from the Chinese government: More complaints about the impact of ‘excessive’ capital in its industries, more tumbling share prices and more held IPOs.”

5 ways AI can help mitigate the global shipping crisis

Robot arm holding a cardboard box

Image Credits: Yuichiro Chino (opens in a new window) / Getty Images

In an increasingly on-demand world, shipping delays and disruptions are a major roadblock to customer happiness.

AI can help, says Ahmer Inam, chief artificial intelligence officer at Pactera EDGE, who offers five strategies for using AI that can help startups understand supply chain disruptions and prepare for a Plan B.

“While AI won’t protect startups, manufacturers and retailers from these types of disruptions in the future, it can help them sense, anticipate, reroute and respond to them more effectively.”

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Perform a quality of earnings analysis to make the most of M&A

As a startup founder, there will be three scenarios in which you’ll need to understand how to properly do a quality of earnings (QofE) if you want to maximize value.

The first scenario will be when you decide to raise a Series A and subsequent VC rounds, followed by when you do a strategic acquisition, and lastly, when you sell your company.

This post is a framework for how to think and organize your QofE and go through the most common items that you’ll want to keep top of mind for every M&A and private equity transaction you may be part of.

Why perform a QofE?

The goal of a QofE is to adjust the reported EBITDA to calculate a restated EBITDA that best reflects the current state of the company on an ongoing basis. It also presents a historical adjusted EBITDA that is comparable throughout the last two or three years.

QofE can have a significant impact on a company valuation for three main reasons:

  1. The adjusted EBITDA will be used by a buyer/investor as the basis for valuation (for companies valued based on an EBITDA multiple).
  2. The adjusted revenue will be used to recalculate the effective growth rate.
  3. The adjusted revenue and EBITDA will form the basis of forecasts.

With that in mind, every entrepreneur must understand how to properly form a view of what is the proper adjusted EBITDA and adjusted revenue of your company. It is common for founders in an M&A process to be unfamiliar with the notion of QofE and leave value on the table.

When performed by a professional transaction service advisory team, the quality of earnings is a result of a thorough review of all the documents generally available in a data room.

This breakdown aims to ensure that you won’t be that founder and that you’ll be armed to negotiate your company valuation on equal ground with your investors. If you are in the seller’s shoes, you will get the advantage of understanding how an experienced investor or buyer thinks. If you’re in the buyer’s shoes, you’ll benefit from understanding and valuing your acquisitions better.

How is a QofE professionally performed?

When performed by a professional transaction service advisory team, the quality of earnings is a result of a thorough review of all the documents generally available in a data room. These include, but are not limited to: Legal documentation, financial statements (P&L, balance sheet, cash flow), audit reports, management presentation and contracts.

When doing a QofE analysis, it’s key to consistently ask yourself: “Can or should this information translate into an adjustment of revenue or EBITDA, net working capital (NWC) or net debt?”

Why did we include NWC and net debt? That is because they often have an indirect impact on adjusted EBITDA. Think of an adjustment to the historical level of inventory. Less inventory likely means fewer storage costs. So if you adjust historical inventory, you’ll want to also impact your adjusted EBITDA.

On top of reviewing all the aforementioned documents, your QofE analysis will heavily rely on interviewing management. No matter how long you look at the financials, if you can’t have management confirm information or explain trends, you won’t be able to draw proper conclusions and understand the numbers.

Principles for efficiently building your QofE

  1. Automatically link everything you read and hear to potential QofE adjustments. This has to become second nature during the engagement.
  2. Always think about all the ways an event or item that qualifies for an adjustment impacts the financial statements overall. For instance, if the event impacted revenue, did it impact costs in some way as well?
  3. Make sure that the cost you are adjusting was not already offset by another accounting entry (i.e., had no impact on EBITDA).
  4. Make sure that the cost you adjust for was classified above EBITDA in the first place.
  5. Make sure that you can quantify each adjustment in the most objective and rational way. This is sometimes not possible and you may have to come up with a range.

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Product School raises $25M in growth equity to scale its product training platform

Traditional MBA programs can be costly, lengthy and often lack the application of real-world skills. Meanwhile, big global brands and companies who need product managers to grow their businesses can’t sit around waiting for people to graduate. And the edtech space hasn’t traditionally catered to this sector.

This is perhaps why Product School says it has secured $25 million in growth equity investment from growth fund Leeds Illuminate (subject to regulatory approval) to accelerate its product and partnerships with client companies.

The growth funding for the company comes after bootstrapping since 2014, in large part because product managers (PMs) are no longer needed just inside tech companies but have become sought after across almost virtually all industries.

Product School provides certificates for individuals as well as team training, and says it has experienced an upwelling of business since COVID switched so many companies into digital ones. It also now counts Google, Facebook, Netflix, Airbnb, PayPal, Uber and Amazon amongst its customers.

“Product managers have an outsized role in driving digital transformation and innovation across all sectors,” said Susan Cates, managing partner of Leeds Illuminate. “Having built the largest community of PMs in the world validates Product School’s certification as the industry standard for the market and positions the company at the forefront of upskilling top-notch talent for global organizations.”

Carlos Gonzalez de Villaumbrosia, CEO and founder of Product School, who started the company after moving from Spain, said: “There has never been a better time in history to build digital products and Product School is excited to unlock value for product teams across the globe to help define the future. Our company was founded on the basis that traditional degrees and MBA programs simply don’t equip PMs with the real-world skills they require on the job.”

Product School has also produced the The Product BookThe Proddy Awards and ProductCon.

Its main competitor is MindTheProduct, a community and training platform, which has also boostrapped.

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