| | | Wednesday, June 5, 2019 By Danny Crichton |
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| ICYMI: As Peloton files for IPO, can its live fitness gamification model extend to other verticals? | | | | | | | Peloton confidentially filed for its IPO today, and the juggernaut fitness company is positioned to be one of the most interesting consumer debuts in the upcoming IPO season now that Uber has cleared the hurdle. Extra Crunch's media columnist Eric Peckham interviewed Zwift CEO Eric Min last month about the live video model that Peloton pioneered, and explored whether 'Peloton for X' is the next wave of consumers startups. If you missed it, be sure to read it now. | | | | | | | | Which type of funding is actually best for your business? | | | | | | | PM Images via Getty Images | | | Fundraising is hard. We explored how to generate FOMO among VCs in Eric's column last week, but this week, we wanted to explore the routes to funding a startup, and whether venture capital is even the right option. Jared Hecht, who is CEO and founder of Fundera, explores the topic for Extra Crunch members. For many business owners, the decision to pursue debt over venture capital is an easy one either because venture capital isn't a viable path for them (as in, they're not a hyper-growth business that can promise that 10x return on capital) or they don't have the aspiration to sign up for a massive return on invested capital. In other cases, they just may not want to sell a piece of their company. The data supports that most businesses fall into these buckets. By the end of 2018, the venture industry deployed $130.9 billion in US-based startups. That sounds like a lot, until you consider that only around 0.07% of businesses receive venture capital funding and that the whales of the industry inhale a lot of these dollars. On the other hand, bank loans to small businesses alone totaled nearly $600 billion in 2015—and that doesn't take into account loans from online or alternative lenders, from OnDeck to Square to PayPal. | | | | | | | | How Kubernetes came to rule the world | | | | | | | Few open-source technologies have reached the pinnacle of Kubernetes, the oft-mispronounced microservices orchestration platform that has been rebuilding cloud architectures over the past five years. TechCrunch enterprise editor Frederic Lardinois looks back at the history and development of Kubernetes, interviewing leaders Craig McLuckie, Tim Hockin, and Gabe Monroy about how they developed the technology, and where it will be going forward. There are also some great lessons about how to get traction within a company (in this case, Google) on open source. While the success of Kubernetes now seems almost pre-determined, simply getting Google to release it as an open-source project was a bit of a struggle, even though the company knew that it needed a magic bullet if it wanted to compete with AWS — and as McLuckie stressed, the launch of Kubernetes was very much about that competition. "For me, the journey started with Compute Engine. Joe [Beda — one of the other co-founders of Kubernetes] and I were working on our infrastructure service offering and we constructed what we felt was a world-class piece of infrastructure service that had incredibly favorable consistency, network properties, the block device was really good," McLuckie, who is now at VMware and freed from whatever shackles the Google PR team put on him during his tenure there, said. "But it was also pretty clear that, without a significant change in the ecosystem, Amazon had pretty much achieved escape velocity — just on a pure VM-based focus on things." To get backing for the Kubernetes project, Google's executive team needed some good business reasons — and being able to better compete with AWS was surely a good reason. "If you asked Tim [Hockin] or Joe [Beda], they'll be like: it was an opportunity to change the world and create great technology, and it certainly was, but it's hard to sponsor a project on that basis," McLuckie said. | | | | | | | | Apple's new ecosystem world order and the privacy economy | | | | | | | David Becker via Getty Images | | | Newly rechristened TechCrunch writer Darrell Etherington writes in on his first day back with us on Apple's increasing traction around privacy. Josh Constine dubbed Apple a "privacy-as-a-service" company following its announcements at WWDC this week, and Etherington locks in the reasons it is able to offer such services: The question has always been to what extent that incentive structure remains intact as Apple's services business shifts from being primarily a driver of its hardware sales, to a business in its own right, likely evaluated on the merits of its own profit and loss statement. The answer, so far, seems to be that Apple is not only keeping that incentive structure intact, but leaning into it – its WWDC announcements included its boldest move yet in privacy as a selling point, a new single-sign on facility called "Sign in with Apple" that it's making mandatory for all developers that offer other SSO options, including Facebook and Google's authentication methods. | | | | | | | | Why four security companies just sold for $1.5B | | | | | | | Lee Woodgate via Getty Images | | | Talking about privacy, cybersecurity has really been on our minds these last few days as four startups got bought last week for a total of $1.5 billion in exit value. Our enterprise reporter Ron Miller has his analysis of what's happening and why: It's not just your imagination that security is a huge market. According to research firm Canalys, the security industry worldwide reached a staggering $37 billion last year, up 9 percent over the previous year. While it's not the kind of growth you see in the cloud computing market, it is quite substantial. According to Canalys, the biggest players in the space are Cisco with 9.9% of the market, up 14.3% from 2017. (Cisco bought Duo Security last year for $2.35 billion, another proof point of the value of security companies.) Palo Alto is number two in the market with 6.9%, and grew a brisk 28.5% from the previous year. Meanwhile, CheckPoint checks in at number three with 6.1%. | | | | | | | | How Marcin Kleczynski went from message boards to founding anti-malware startup Malwarebytes | | | | | | | Meanwhile, our security editor Zack Whittaker is continuing his interview series with up-and-coming cybersecurity startup CEOs, this time interviewing Marcin Kleczynski of Malwarebytes. This was a fun one — it's always great to see how the smallest actions (in this case, posting in an online discussion forum) can eventually morph into a massive startup business: In early 2008, his company's first anti-malware product was released. To no surprise, the very people on the message boards who helped Kleczynski recover his computer were the same championing his debut software. So much so that Kleczynski hired one of the people from the message board who helped him rid the malware from his computer as one of his first employees. Within months, Malwarebytes was turning over a couple of hundred thousand dollars, Kleczynski told TechCrunch. By August came the question of whether he would run his company or go to university. "After about a 15-second conversation with my mother, she quickly informed me that I would be attending university," he said. And so he did both. Fast-forward to today, the company is a multi-million dollar anti-malware giant serving 150 million consumer customers and 50,000 paying small to medium-sized business and enterprise customers from its five offices — two in the U.S., as well as Estonia, Ireland and Singapore. | | | | | | | | Verified Expert Growth Marketing Agency: Bell Curve | | | | | | | Yvonne Leow has our next Verified Expert profile, this one on growth marketing agency Bell Curve (which you might have heard about before because its founder, Julian Shapiro, has now written three columns for us at Extra Crunch). The firm has worked with Imperfect Produce, Outschool, and more to drive conversion optimization, particularly in ecommerce-focused businesses. Yvonne Leow: What were some of the learnings you had working with founders, and how did that translate that into the creation of Bell Curve? Julian Shapiro: [One key learning was:] If you go very deep with your expertise on just a few things, you can forsake a lot of other things and still get a lot of growth in a short amount of time. So, for example, Facebook ads, Instagram ads, conversion rate optimization, which is where you optimize pages to prompt people to purchase or sign up at a higher rate. Those three things out of say 100 things you could be doing for growth are so high leverage that if I afforded my team the opportunity to specialize in those three categories, we would probably see the greatest rate of success per client. | | | | | | | | Should Your Company Move into a Co-Working Space, Sublease Space or a Traditional Office? | | | | | | | Finally, we have two articles on using physical space effectively. First, we have a guest post from Sam Einhorn, a director with Colliers International, on how to think about office space for your startup. Once year-over-year headcount projections are defined, it's an appropriate time to begin a full analysis of long-term needs, inclusive of budgetary restrictions, brand identity, specialty alterations (i.e., stadium seating, showers, fish tanks, etc). When you're ready for a long-term home you're ready to consider a traditional "direct" office lease. The process includes analyzing the possible options in your entire building rather than just one space so that you can anticipate and plan for long-term growth for your company. | | | | | | | | Is Your Event Strategy Paying Off? How to Calculate Your Event ROI | | | | | | | Second, how do you use physical space and events to maximize your marketing budget? Sarah Shewey of Happily discusses how to evaluate the economics of an event and objectively judge whether the large outlays of costs are worth the return on investment. The experiential marketing industry has long struggled to measure success in a meaningful way. They propose all the same KPIs (key performance indicators), but rarely do those KPIs provide a benchmark to determine if an event is successful or give marketers the ability to tell what worked and what didn't. They especially fall down when customers aren't won until months after an event. While increasingly important, events require a lot of time, resources, and exhausting weekly meetings to do them well. The per-person cost for a modest conference with lots of donated services will cost around $350 and an upscale conference experience costs about $1,500. For one day. Per person. So how do you know when putting on an event is worth the effort? | | | | | | | To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people, and companies. If I can ever be of assistance, hit reply, or send an email to danny@techcrunch.com. | | | | | | | U.S. Region: Privacy Policy Oath Inc.: 701 First Avenue, Sunnyvale, CA 94089 Canada Region: Privacy Policy Oath (Canada) Corp: 99 Spadina Ave, Suite 200, Toronto ON M5 J1A7, Canada European Region: Privacy Policy Oath (EMEA) Limited: 5-7 Point Square, North Wall Quay, Dublin 1, Ireland |
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