Allison Xu is an investor at Bain Capital Ventures, where she focuses on investments in the fintech and property tech sectors.
In the wake of COVID-19 this spring, construction sites across the nation emptied out alongside neighboring restaurants, retail stores, offices and other commercial establishments. Debates ensued over whether the construction industry’s seven million employees should be considered “essential,” while regulations continued to shift on the operation of job sites. Meanwhile, project demand steadily shrank.
Amidst the chaos, construction firms faced an existential question: How will they survive? This question is as relevant today as it was in April. As one of the least-digitized sectors of our economy, construction is ripe for technology disruption.
Construction is a massive, $1.3 trillion industry in the United States — a complex ecosystem of lenders, owners, developers, architects, general contractors, subcontractors and more. While each construction project has a combination of these key roles, the construction process itself is highly variable depending on the asset type. Roughly 41% of domestic construction value is in residential property, 25% in commercial property and 34% in industrial projects. Because each asset type, and even subassets within these classes, tends to involve a different set of stakeholders and processes, most construction firms specialize in one or a few asset groups.
Regardless of asset type, there are four key challenges across construction projects:
High fragmentation: Beyond the developer, architect, engineer and general contractor, projects could involve hundreds of subcontractors with specialized expertise. As the scope of the project increases, coordination among parties becomes increasingly difficult and decision-making slows.
Poor communication: With so many different parties both in the field and in the office, it is often difficult to relay information from one party to the next. Miscommunication and poor project data accounts for 48% of all rework on U.S. construction job sites, costing the industry over $31 billion annually according to FMI research.
Lack of data transparency: Manual data collection and data entry are still common on construction sites. On top of being laborious and error-prone, the lack of real-time data is extremely limited, therefore decision-making is often based on outdated information.
Skilled labor shortage: The construction workforce is aging faster than the younger population that joins it, resulting in a shortage of labor particularly for skilled trades that may require years of training and certifications. The shortage drives up labor costs across the industry, particularly in the residential sector, which traditionally sees higher attrition due to its more variable project demand.
A construction tech boom
Too many of the key processes involved in managing multimillion-dollar construction projects are carried out on Excel or even with pen and paper. The lack of tech sophistication on construction sites materially contributes to job delays, missed budgets and increased job site safety risk. Technology startups are emerging to help solve these problems.
Here are the main categories in which we’re seeing construction tech startups emerge.
1. Project conception
How it works today: During a project’s conception, asset owners and/or developers develop site proposals and may work with lenders to manage the project financing.
Key challenges: Processes for managing construction loans are cumbersome and time intensive today given the complexity of the loan draw process.
How technology can address challenges: Design software such as Spacemaker AI can help developers create site proposals, while construction loan financing software such as Built Technologies and Rabbet are helping lenders and developers manage the draw process in a more efficient manner.
2. Design and engineering
How it works today: Developers work with design, architect and engineering teams to turn ideas into blueprints.
Key challenges: Because the design and engineering teams are often siloed from the contractors, it’s hard for designers and engineers to know the real-time impact of their decisions on the ultimate cost or timing of the project. Lack of coordination with construction teams can lead to time-consuming changes.
How technology can address challenges: Of all the elements of the construction process, the design and engineering process itself is the most technologically sophisticated today, with relatively high adoption of software like Autodesk to help with design documentation, specification development, quality assurance and more. Autodesk is moving downstream to offer a suite of solutions that includes construction management, providing more connectivity between the teams.
Campuswire was in a fortuitous spot when colleges and universities across the world shut down on short notice because of the threat of coronavirus. Founded by Tade Oyerinde in 2018, Campuswire is a virtual solution for any teacher who wants to digitize their internal classroom communications, from Q&A time to the lecture itself.
The strategy, for the most part, has worked. Campuswire is now used at more than 300 universities among 200,000 students, Oyerinde tells me.
While Campuswire’s pitch was set to boom overnight, the founder instead saw a bigger challenge approaching: more competition. As professors moved online, lectures moved to Zoom or tools built atop of Zoom. Microsoft Teams and Google Hangouts filled in the gap for classrooms that couldn’t afford fancy licenses. Campuswire’s key monetization strategy, which was selling pro licenses for its online class software, felt threatened by alternatives.
So, after months of iterating, Campuswire has adapted its monetization strategy and today announced that it is launching live courses taught by professors. Instead of solely working with professors to streamline internal class communications, Campuswire will now help teachers produce classes that students can then take for a fee. The tuition revenue will be split between the teacher and Campuswire.
Campuswire courses kick off with an angel investing class taught by Charles Hudson, the founder and general partner of Precursor Ventures. Hudson lectures at Stanford occasionally, and working with Campuswire allows him to teach a broader set of students.
Meanwhile, Campuswire software will be free to use starting in January 2021.
The move marks Campuswire’s further dive into synchronous learning. Campuswire’s model is built on how existing classrooms work in universities and colleges. Classes on Campuswire are capped at 500 to promote conversation, and large lectures are supplemented with teacher assistant (TA) classes to hammer home confusing concepts.
Meanwhile, it’s clear amid the pandemic that asynchronous learning has its perks (students can learn on their own schedule, while educators are able to work more flexible hours). Still, Oyerinde thinks a pre-recorded format is not effective for pedagogy purposes.
“This is kind of the hill we’re going to die on,” he said. “Real, lasting learning has to be synchronous for the majority of people.”
In other words, while there’s a small group of gifted-and-talented students who can watch a one-hour lecture and absorb every factoid and nuance, the majority of students need engagement, interaction and motivation to understand a topic, he argues. It’s the reason why MOOCs, or massive open online course providers, only have a 2-3% completion rate on their courses, he argues.
At its core, Campuswire has evolved from a platform trying to compete with Zoom to a platform that is trying to compete with these MOOCS through engaging content taught by experienced professors. Its main differentiation from MOOCs is that it’s live and has teacher assistants.
There are a number of startups that are trying to create engaging, celebrity professor-taught classes through hybrid plays. MasterClass, which just raised $100 million a few months ago, sells entertainment and education in one go, offering cooking classes from Gordon Ramsay and tennis lessons from Serena Williams. While you can’t interact with Ramsay or Williams, you can chat with fellow classmates.
BookClub connects readers to the authors they are reading, giving bookworms an opportunity to ask about cliffhangers and character development. The upstart is still in its early stages, but founder David Blake says that readers could talk directly to authors down the road. There’s also Teachable, which got acquired by Hotmart earlier this year. Teachable helps any expert who wants to create a business around their expertise do so with a virtual course. Arlan Hamilton, a seed-stage investor, has a course on the platform.
Today’s pivot signals the founder’s mindset that, in order to grow to the billion-dollar business mark in edtech, you need to sell more than software that Google and Microsoft will always give away for free.
“Online learning can be 100 times bigger than it is today,” Oyerinde said. “Once you actually support synchronicity, you actually support people getting to actually interact with UCLA/Princeton/Cornell professors, not just watching them on pre-recorded videos.”
When large parts of the world were shutting down in March, we really didn’t know how we would move massive numbers of employees used to working in the office to work from home.
In early March, I wrote a piece on how to prepare for such an eventuality, speaking to several experts who had a background in the software and other tooling that would be involved. But the shift involved so much more than the mechanics of working at home. We were making this transition during a pandemic that was forcing us to deal with a much broader set of issues in our lives.
Yet here we are seven months later, and surely we must have learned some lessons along the way about working from home effectively, but what do these lessons look like and how can we make the most of this working approach for however long this pandemic lasts?
I spoke to Karen Mangia, vice president of customer and market insights at Salesforce and author of the book, Working from Home, Making the New Normal Work for You, to get her perspective on what working from home looks like as we enter our eighth month and what we’ve learned along the way.
As employees moved home in March, managers had to wonder how productive employees would be without being in the office. While many companies had flexible approaches to work, this usually involved some small percentage of employees working from home, not the entire workforce, and that presented challenges to management used to judging employee performance based for the most part on being in the building during the work day.
One of the things that we looked at in March was putting the correct tools in place to enable communication even when we weren’t together. Mangia says that those tools can help close what she calls the trust gap.
“Leaders want to know that their employees are working on what’s expected and delivering outcomes. Employees want to make sure their managers know how hard they’re working and that they’re getting things done. And the technology and tools I think help us solve for that trust gap in the middle,” she explained.
She believes the biggest thing that individuals can do at the moment is to simply reassess and look for small ways to improve your work life because we are probably not going to be returning to the office anytime soon. “I think what we’re discovering is the things that we can put in place to improve the quality of our own experiences as employees, as learners and as leaders can be very simple adjustments. This does not have to be a five year, five phase, $5 million roadmap kind of a situation. Simple adjustments matter,” she said, adding that could be measures as basic as purchasing a comfortable chair because the one you’ve been using at the dining room table is hurting your back.
Asymptomatic spread of COVID-19 is a huge contributor to the pandemic, but of course if there are no symptoms, how can anyone tell they should isolate or get a test? MIT research has found that hidden in the sound of coughs is a pattern that subtly, but reliably, marks a person as likely to be in the early stages of infection. It could make for a much-needed early warning system for the virus.
The sound of one’s cough can be very revealing, as doctors have known for many years. AI models have been built to detect conditions like pneumonia, asthma and even neuromuscular diseases, all of which alter how a person coughs in different ways.
He and his team set up a site where people could contribute coughs, and ended up assembling “the largest research cough dataset that we know of.” Thousands of samples were used to train up the AI model, which they document in an open access IEEE journal.
The model seems to have detected subtle patterns in vocal strength, sentiment, lung and respiratory performance, and muscular degradation, to the point where it was able to identify 100% of coughs by asymptomatic COVID-19 carriers and 98.5% of symptomatic ones, with a specificity of 83% and 94% respectively, meaning it doesn’t have large numbers of false positives or negatives.
“We think this shows that the way you produce sound, changes when you have COVID, even if you’re asymptomatic,” said Subirana of the surprising finding. However, he cautioned that although the system was good at detecting non-healthy coughs, it should not be used as a diagnosis tool for people with symptoms but unsure of the underlying cause.
I asked Subirana for a bit more clarity on this point.
“The tool is detecting features that allow it to discriminate the subjects that have COVID from the ones that don’t,” he wrote in an email. “Previous research has shown you can pick up other conditions too. One could design a system that would discriminate between many conditions but our focus was on picking out COVID from the rest.”
For the statistics-minded out there, the incredibly high success rate may raise some red flags. Machine learning models are great at a lot of things, but 100% isn’t a number you see a lot, and when you do you start thinking of other ways it might have been produced by accident. No doubt the findings will need to be proven on other data sets and verified by other researchers, but it’s also possible that there’s simply a reliable tell in COVID-induced coughs that a computer listening system can hear quite easily.
The team is collaborating with several hospitals to build a more diverse data set, but is also working with a private company to put together an app to distribute the tool for wider use, if it can get FDA approval.
It wasn’t the lingering exhaustion that made Christine Huang, a New York public school teacher, leave the profession. Or the low pay. Or the fact that she rarely had time to spend with her kids after the school day due to workload demands.
Instead, Huang left teaching after seven years because of how New York City handled the coronavirus pandemic in schools.
“Honestly, I have no confidence in the city,” she says. Tensions between educators and NYC officials grew over the past few weeks, as school openings were delayed twice and staffing shortages continue. In late September, the union representing NYC’s principals called on the state to take control of the situation, slamming Mayor de Blasio for his inability to offer clear guidance.
Now, schools are open and the number of positive coronavirus cases are surprisingly low. Still, Huang says there’s a lack of grace given to teachers in this time.
Huang wanted the flexibility to work from home to take care of her kids who could no longer get daycare. But her school said that, while kids have the choice on whether or not to come into class, teachers do not. She gave her notice days later.
There are more than 3 million public school teachers in the United States. Over the years, thousands have left the system due to low pay and rigid hours. But the coronavirus is a different kind of stress test. As schools seesaw between open and closed, some teachers are left without direction, feeling undervalued and underutilized. The confusion could usher numbers of other teachers out of the field, and massively change the teacher economy as we know it.
Teacher departures are a loss for public schools, but an opportunity for startups racing to win a share of the changing teacher economy. Companies don’t have the same pressures as entire school districts, and thus are able to give teachers a way to teach on more flexible hours. As for salaries, edtech benefits from going directly to consumers, making money less of a budget challenge and more of a sell to parents’ wallets.
There’s Outschool, which allows teachers to lead small-group classes on subjects such as algebra, beginner reading or even mindfulness for kids; Varsity Tutor, which connects educators to K-12 students in need of extra help; and companies such as Swing and Prisma that focus on pod-based learning taught by teachers.
The startups all have different versions of the same pitch: they can offer teachers more money, and flexibility, than the status quo.
Underpaid and overworked teachers
There’s a large geographic discrepancy in pay among teachers. Salaries are decided on a state-by-state and district-by-district level. According to the National Center for Education Statistics, a teacher who works in Mississippi makes an average of $45,574 annually, while a teacher in New York makes an average of $82,282 annually.
Although cost of living factors impacts teacher salaries like any other profession, data shows that teachers are underpaid as a profession. According to a study from the Economic Policy Institute, teachers earn 19% less than similarly skilled and educated professionals. A 2018 study by the Department of Education shows that full-time public school teachers are earning less on average, in inflation-adjusted dollars, than they earned in 1990.
The variance of salaries among teachers means that there’s room, and a need, for rebalancing. Startups, looking to get a slice of the teacher economy, suddenly can form an entire pitch around these discrepancies. What if a company can help a Mississippi teacher make a wage similar to a New York teacher?
Image: Bryce Durbin / TechCrunch
Reach Capital is a venture capital firm whose partners invest in education technology companies. Jennifer Carolan, co-founder of the firm, who also worked in the Chicago Public School system for years, sees coronavirus as an accelerator, not a trigger, for the departure of teachers.
“We have an education system where teachers are underpaid, overworked, and you don’t have the flexibility that has become so important for workers now,” she said. “All these things have caused teachers to seek opportunity outside of the traditional schooling system.”
Carolan, who penned an op-ed about teachers leaving the public school system, says that new pathways for teachers are emerging out of the homeschooling tech sector. One of her investments, Outschool, has helped teachers earn tens of millions this year alone, as the total addressable market for what it means to be “homeschooled” changed overnight.
Gig economy powered by startups
Education technology services have created a teacher gig economy over the past few years. Learning platforms, with unprecedented demand, must attract teachers to their service with one of two deal sweeteners: higher wages or more flexible hours.
Outschool is a platform that sells small-group classes led by teachers on a large expanse of topics, from Taylor Swift Spanish class to engineering lessons through Lego challenges. In the past year, teachers on Outschool have made more than $40 million in aggregate, up from $4 million in total earnings the year prior.
CEO Amir Nathoo estimates that teachers are able to make between $40 to $60 per hour, up from an average of $30 per hour in earnings in traditional public schools. Outschool itself has surged over 2,000% in new bookings, and recently turned its first profit.
Outschool makes more money if teachers join the platform full-time: teachers pocket 70% of the price they set for classes, while Outschool gets the other 30% of income. But, Nathoo views the platform as more of a supplement to traditional education. Instead of scaling revenue by convincing teachers to come on full-time, the CEO is growing by adding more part-time teachers to the platform.
The company has added 10,000 vetted teachers to its platform, up from 1,000 in March.
Outschool competitor Varsity Tutors is taking a different approach entirely, focusing less on hyperscaling its teacher base and more on slow, gradual growth. In August, Varsity Tutors launched a homeschooling offering meant to replace traditional school. It onboarded 120 full-time educators, who came from public schools and charter schools, with competitive salaries. It has no specific plans to hire more full-time teachers.
Brian Galvin, chief academic officer at Varsity Tutors, said that teachers came seeking more flexibility in hours. On the platform, teachers instruct for five to six hours per day, in blocks that they choose, and can build schedules around caregiver obligations or other jobs.
Varsity Tutors’ strategy is one version of pod-based learning, which gained traction a few months ago as an alternative to traditional schooling. Swing Education, a startup that used to help schools hire substitute teachers, pivoted to help connect those same teachers to full-time pod gigs. Prisma is another alternative school that trains former educators, from public and private schools, to become learning coaches.
Pod-based learning, which can in some cases cost thousands a week, was popular among wealthy families and even led to bidding wars for best teacher talent. It also was met with criticism, suggesting the product wasn’t built with most students in mind.
The reality of next job
A tech-savvy future where students can learn through the touch of a button, and where teachers can rack in higher earnings, is edtech’s goal. But that path is not accessible for all.
Some tutoring startups could create a digital divide among students who can pay for software and those who can’t. If teachers leave public schools, low-income students are left behind and high-income students are able to pay their way into supplemental learning.
Still, some don’t think it’s the job of public school teachers, the vast majority of which are female, to work for a broken system. In fact, some say that the whole concept of villainizing public school teachers for leaving the system comes with ingrained sexism that women have to settle for less. In this framework, startups are both a bridge to a better future for teachers and a symptom of failures from the public educational systems.
Huang, now on the job hunt, says that the opportunities that edtech companies are creating aren’t built for traditional teachers, even though they’re billed as such. So far, she has applied to curriculum design jobs at educational content website BrainPop, digital learning platform Newsela, math program company Zearn and Q&A content host Mystery.org.
“What I’m finding is that a lot of edtech companies don’t seem to value our skills as teachers,” she said. “They’re not looking for teachers, they’re looking for coders.”
Edtech has been forced to meet increasing demand for services in a relatively short time. But the scalability could inherently clash with what teachers came to the profession to do. Suddenly, their work becomes optimized for venture-scale returns, not general education. Huang feels the tension in her job interviews, where she feels like recruiters don’t pay attention to creativity, knowledge and human skills needed for managing students. She has created 30 different versions of her resume.
The lack of suitable jobs made Huang decide to go on childcare leave instead of quitting the education system entirely, in case she needs to return to the traditional field. She hopes that is not the case, but isn’t optimistic just yet.
“I haven’t gotten a whole lot of interviews, because people see my resume; they see that I’m a teacher, and they automatically write me off,” she said.
In an interview with CNN’s Jake Tapper White House Chief of Staff Mark Meadows said that the US is “not going to control the pandemic… We are gonna control the fact that we get vaccines, therapeutics and other mitigation.”
The admission is a final nail in the coffin for a federal response that could have involved a return to lockdowns to stop the spread of the virus, or national testing and contact tracing and other mitigation measures. Meadows statement comes as the US experiences a second peak in infection rates. There are now over 8.1 million cases and over 220,000 deaths since the first confirmed infection on US soil on January 20.
The number of Covid cases, hospitalizations, and deaths is going to continue to grow sharply as we enter the winter; until all of us on our own start taking enough collective action to slow the spread. There is no seasonal backstop, and won’t be any new national policy action. https://t.co/YoCFZkhVSb
Now, the focus is all on the vaccines, therapies and treatments being developed by large pharma companies and startups alike that are making their way through the approval processes of regulatory agencies around the world.
In China, the state run pharmaceutical company Sinopharm has filed its application to China’s regulatory commission for the approval of a vaccine and hundreds of thousands of civilians have already been vaccinated under emergency use approvals from the Chinese government, according to a report in the New Yorker. Meanwhile the privately held Chinese pharmaceutical company, Sinovac, is moving forward with phase three trials for its own vaccine in Brazil, Bangladesh and Indonesia. Another private Chinese company, CanSino Biologics developed a vaccine that was already being distributed to members of the Chinese military in late July,
A collaboration in the U.K. between the University of Oxford and European pharmaceutical company AstraZeneca is also recruiting volunteers in Brazil, India, the United Kingdom, the US and South Africa. And, in Australia, the Murdoch Children’s Research Institute is trying to see whether a vaccine used to prevent tuberculosis could be used to vaccinate against the coronavirus.
Finally in Russia, the Gamaleya National Center of Epidemiology and Microbiology in partnership with the state-run Russian Direct Investment Fund have claimed to have developed a vaccine that the country has registered as the first one on the market cleared for widespread use. Russia has not published any data from the clinical trials it claims to have conducted to prove the efficacy of the vaccine and the World Health Organization still considers the treatment to be in the first phase of development.
Therapies in phase three clinical trials
If vaccines can prevent against infection, a slew of companies are also working on ways to limit the severity of the disease should someone become infected with Sars-Cov-2, the novel coronavirus that causes COVID-19.
The Milken Institute lists 41 different therapies that have made it through to phase three of their clinical trials (the last phase before approval for widespread delivery).
These therapies come in one of five primary categories: antibody therapies, antivirals, cell-based therapies, RNA-based treatments, and repurposing existing treatments that may be in pharmaceutical purgatory.
Antibody therapies use the body’s natural defense systems either taken from the blood of people who have recovered from an infection or manufactured in a lab to neutralize the spread of a virus or bacteria. Antivirals, by contrast, stop a virus from spreading by attacking the viruses’ ability to replicate. Cell-based therapies are designed to boost the immune system’s ability to fight pathogens like viruses or bacteria. Meanwhile RNA-based treatments are another method to stop the virus from replicating by blocking the construction of viral proteins. Finally, several companies are mining their libraries of old drug compounds to see if any might be candidates for COVID-19 treatments.
So far, only three therapeutics have been approved to treat COVID-19. In the U.K. and Japan dexamethasone has received approvals, while favilavir is being used in China, Italy and Russia; and — famously thanks to its use by the President — remdesivir has been approved in the United States, Japan and Australia.
Adaptive Biotechnologies, Cytovia Therapeutics, and SAB Biotherapeutics are all developing antibody treatments. Applied Therapeutics is using an understanding of existing compounds to develop treatments for specific conditions associated with COVID-19. Cellularity has a cell-therapy that could reduce a patient’s viral load by stimulating so-called natural killer cells to attack infected cells. Humanigen has developed a new drug that could reduce fatalities in high-risk COVID-19 patients with severe pneumonia. Meanwhile Partner Therapeutics is working on a drug that could improve lung function in COVID-19 patients — and potentially boost antibody production against the virus and restore damaged lung cells. Finally, Sarepta Therapeutics has been working with the United States Army Medical Research Institute of Infectious Diseases to find ways for its RNA-based treatment to stop the spread of coronaviruses by attacking the ability for the virus to replicate.
Beyond therapies, startups are finding other ways to play a role in helping the nation address the COVID-19 epidemic.
“At this point the U.S. doesn’t have the best public health system, but at the same time we have best-in-class private companies who can sometimes operate a lot more efficiently than governments can,” Carbon Health chief executive Eran Bali told the audience at TechCrunch’s Disrupt 2020 conference. “We also just recently launched a program to help COVID-positive patients get back to health quickly, a rehabilitation program. Because as you know even if you survive it doesn’t mean your body was not affected, there are permanent effects.”
Indeed the drive for more effective at-home tests and remote treatments for consumers are arguably more important when the federal government refuses to make the prevention of viral spread a priority, because consumers may voluntarily lock down if the government won’t.
“This is an opportunity to take a technology that naturally is all about detecting viruses — that’s what CRISPR does in [its native environment] bacteria — and repurposing it to use it as a rapid diagnostic for coronavirus,” said the Nobel Prize-winning co-inventor of some foundational CRISPR gene-editing technology, Jennifer Doudna. “We’re finding in the laboratory that that means that you can get a signal faster, and you can also get a signal that is more directly correlated to the level of the virus.”
Scott Purcell is the CEO and chief trust officer of Prime Trust, an innovative API-enabled B2B open-banking financial solutions provider.
The economic impact of the COVID-19 pandemic adversely affected the financial outlook for millions of people, and continues to cause significant fiscal distress to millions more, but such challenging times have also wrought a more resilient and resourceful financial system.
With the ingenuity of crowdfunding, considered to be one of the last decade’s greatest “success stories,” and such desperate times calling for bold new ways to finance a wide variety of COVID-19 relief efforts, we are now seeing an excellent opportunity for banks and other financial institutions to partner with crowdfunding platforms and campaigns, bolstering their efforts and impact.
COVID-19 crowdfunding: A world of possibilities to help others
Before considering how financial institutions can assist with crowdfunding campaigns, we must first look at the diverse array of impressive results from this financing option during the pandemic. As people choose between paying the rent or buying groceries, and countless other despairing circumstances, we must look to some of the more inventive ways businesses, entrepreneurs and people in general are using crowdfunding to provide the COVID-19 relief that cash-strapped consumers with maxed-out or poor credit do not have access to or the government has not provided.
Some great examples of COVID-19 crowdfunding at its best include the following:
The possibilities presented by crowdfunding in this age of the coronavirus are endless, and financial institutions can certainly lend their assistance. Here is how.
1. Acknowledge that crowdfunding is not a trend
Crowdfunding is a substantial and ever-so relevant means of financing all sorts of businesses, people and products. Denying its substantive contribution to the economy, especially in digital finance during this pandemic, is akin to wearing a monocle when you actually need glasses for both of your eyes. Do not be shortsighted on this. Crowdfunding is here to stay. In fact, countless crowdfunding businesses and platforms continue to make major moves within the markets globally. For example, Parpera from Australia, in coordination with the equity-crowdfunding platforms, hopes to rival the likes of GoFundMe, Kickstarter and Indiegogo.
2. Be willing to invest in crowdfunded campaigns
This might seem contrary to the original purpose of these campaigns, but the right amount of seed-cash infusions to campaigns that are aligned with your goals as a company is a win-win for both you and the entrepreneurs or causes, especially now in such desperate times of need.
3. Get involved in the community and its crowdfunding efforts
This means that small businesses and medium-sized businesses within your institution’s community could use your help. Consider investing in crowdfunding campaigns similar to the ones mentioned earlier. Better yet, bridge the gaps between financial institutions and crowdfunding platforms and campaigns so that smaller businesses get the opportunities they need to survive through these difficult times.
4. Enable sustainable development goals (SDG)
Last month, the United Nations Development Program released a report proclaiming that digital finance is now allowing people from all over the world to customize and personalize their money-management experiences such that their financial needs have the potential to be more readily and sufficiently met. Financial institutions willing to work as a partner with crowdfunding platforms and campaigns will further these goals and set society up for a more robust rebound from any possible detrimental effects of the COVID-19 recession.
5. Lend your regulatory expertise to this relatively new industry
Other countries are already beginning to figure out better ways to regulate the crowdfunding financing industry, such as the recent updates to the European Union’s handling of crowdfunding regulations, set to take effect this fall. Well-established financial institutions can lend their support in defining the policies and standard operating procedures for crowdfunding even during such a chaotic time as the COVID-19 pandemic. Doing so will ensure fair and equitable financing for all, at least, in theory.
While originally born out of either philanthropy or early-adopting innovation, depending on the situation, person or product, crowdfunding has become an increasingly reliable means of providing COVID-19 economic relief when other organizations, including the government and some banks, cannot provide sufficient assistance. Financial institutions must lend their vast expertise, knowledge and resources to these worthy causes; after all, we are all in this together.
European entrepreneurs who want to launch startups could do worse than Switzerland.
In a report analyzing Europe’s general economic health, cost of doing business, business environment and labor force quality, analysts looked for highly educated populations, strong economies, healthy business environments and relatively low costs for conducting business. Switzerland ended up ranking third out of 31 European nations, according to Nimblefins. (Germany and the UK came out first and second, respectively).
According to official estimates, the number of new Swiss startups has skyrocketed by 700% since 1996. Zurich tends to take the lion’s share, as the city’s embrace of startups has jump-started development, although Geneva and Lausanne are also hotspots.
As well as traditional software engineering startups, Switzerland’s largest city boasts a startup culture that emphasizes life sciences, mechanical engineering and robotics. Compared to other European countries, Switzerland has a low regulatory burden and a well-educated, highly qualified workforce. Google’s largest R&D center outside of the United States is in Zurich.
But it’s also one of the more expensive places to start a business, due to its high cost of living, salary expectations and relatively small labor market. Native startups will need 25,000 Swiss Francs to open an LLC and 50,000 more to incorporate. While they can withdraw those funds from the business the next day, local founders must still secure decent backing to even begin the work.
This means Switzerland has gained a reputation as a place to startup — and a place to relocate, which is something quite different. It’s one reason why the region is home to many fintech businesses born elsewhere that need proximity to a large banking ecosystem, as well as the blockchain/crypto crowd, which have found a highly amenable regulatory environment in Zug, right next door to Zurich. Zurich/Zug’s “Crypto Valley” is a global blockchain hotspot and is home to, among others, the Ethereum Foundation.
Lawyers and accountants tend to err on the conservative side, leading to a low failure rate of businesses but less “moonshot innovation,” shall we say.
But in recent years, corporate docs are being drawn up in English to facilitate communication both inside Switzerland’s various language regions and foreign capital, and investment documentation is modeled after the U.S.
Ten years ago startups were unusual. Today, pitch competitions, incubators, accelerators, VCs and angel groups proliferate.
The country’s Federal Commission for Technology and Innovation (KTI) supports CTI-Startup and CTI-Invest, providing startups with investment and support. Venture Kick was launched in 2007 with the vision to double the number of spin-offs from Swiss universities and draws from a jury of more than 150 leading startup experts in Switzerland. It grants up to CHF 130,000 per company. Fundraising platforms such as Investiere have boosted the angel community support of early funding rounds.
Swiss companies, like almost all European companies, tend to raise lower early-stage rounds than U.S. ones. A CHF 1-2 million Series A or a CHF 5 million Series B investment is common. This has meant smaller exits, and thus less development for the ecosystem.
What trends are you most excited about investing in, generally? Consumer-facing startups with first revenues.
What’s your latest, most exciting investment? AirConsole — a cloud-gaming platform where you don’t need a console and can play with all your friends and family.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now? I really wish that the business case for social and ecological startups will finally be proven (kind of like Oatly showed with the Blackstone investment). I also think that femtech is a hyped category but funding as well as renown exits are still missing.
What are you looking for in your next investment, in general? I am looking for easy, scalable solutions with a great team.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about? I think the whole scooter/mobility space is super hyped but also super capital intensive so I think to compete in this market at this stage is hard. I also think that the whole edtech space is an important area of investment, but there are already quite a lot of players and it oftentimes requires cooperation with governments and schools, which makes it much more difficult to operate in. Lastly, I don’t get why people still start fitness startups as I feel like the market has reached its limits.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less? Switzerland makes — maximum — half of our investments. We are also interested in Germany and Austria as well as the Nordics.
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders? Zurich and Lausanne are for sure the most exciting cities, just because they host great engineering universities. Berne is still lagging behind but I am hoping to see some more startups emerging from there, especially in the medtech industry.
How should investors in other cities think about the overall investment climate and opportunities in your city? Overall, Switzerland is a great market for a startup to be in — although small, buying power is huge! So investors should always keep this in mind when thinking about coming to Switzerland. The startup scene is pretty small and well connected, so it helps to get access through somebody already familiar with the space. Unfortunately for us, typical B2C cases are rather scarce.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work? I think it is hard to make any kind of predictions. But on the one hand, I could see this happening. On the other hand, I also think that the magic of cities is that there are serendipity moments where you can find your co-founder at a random networking dinner or come across an idea for a new venture while talking to a stranger. These moments will most likely be much harder to encounter now and in the next couple of months.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times? I think travel is a big question mark still. The same goes for luxury goods, as people are more worried about the economic situation they are in. On the other hand, remote work has seen a surge in investments. Also sustainability will hopefully be put back on the agenda.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now? Not much. I think we allocated a bit more for the existing portfolio but otherwise we continue to look at and discuss the best cases. The biggest worries are the uncertainties about [what] the future might look like and the related planning. We tell them to first and foremost secure cash flow.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic? Totally! Some portfolio companies have really profited from the crisis, especially our subscription-based models that offer a variety of different options to spend time at home. The challenge now is to keep up the momentum after the lockdown.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two. What gives me hope is to see that people find ways to still work together — the amount of online events, office hours, etc. is incredible. I see the pandemic also as a big opportunity to make changes in the way we worked and the way things were without ever questioning them.
Facebook and Twitter took action against a post from President Trump Tuesday that claimed that COVID-19 is “far less lethal” than the flu. Trump made the tweet and posted the same message to Facebook just hours after arriving back at the White House following a multi-day stay at Walter Reed medical center, where the president was treated after testing positive for COVID-19.
Facebook took down Trump’s post outright Tuesday, stating that it “[removes] incorrect information about the severity of COVID-19, and have now removed this post.” Twitter hid the tweet behind a warning saying that it broke the platform’s rules about spreading misleading or harmful COVID-19 misinformation.
Flu season is coming up! Many people every year, sometimes over 100,000, and despite the Vaccine, die from the Flu. Are we going to close down our Country? No, we have learned to live with it, just like we are learning to live with Covid, in most populations far less lethal!!!
“We placed a public interest notice on this Tweet for violating our COVID-19 Misleading Information Policy by making misleading health claims about COVID-19,” a Twitter spokesperson said.
Taking down one of the president’s posts is rare but it wasn’t a first for Facebook. In August, Facebook removed a video Trump shared in which he claimed that children are “almost immune” to COVID-19. The clip originally aired on Fox News.
On twitter, Trump’s tweet will have “significantly limited” engagement, meaning that it can’t be retweeted without quoting, liked or replied to, but it will remain up because it’s in the public interest. By the time Twitter took action on the tweet it had more than 59,000 retweets and 186,000 likes.
Facebook and Twitter both created new policies to address the spread of pandemic-related misinformation earlier this year. In the pandemic’s earlier days, the false claim that COVID is comparable to the flu was a common refrain from Trump and his allies, who wished to downplay the severity of the virus. But after months of the virus raging through communities around the U.S., the claim that COVID-19 is like the flu is an even more glaring lie.
While much remains not understood about the virus, it can follow an aggressive and unpredictable trajectory in patients, attacking vital organs beyond the lungs and leaving people who contracted it with long-lasting health effects that are not yet thoroughly studied or understood. Trump’s own physician has said the president “may not be out of the woods yet” in his own fight with the virus.
In recent months, the president’s social media falsehoods had shifted more toward lies about the safety of vote-by-mail, the system many Americans will rely on to cast votes as the pandemic rages on.
But less than a day out of a multi-day stay at the hospital where he was given supplemental oxygen and three experimental treatments, it’s clear Trump’s own diagnosis with the virus doesn’t mean he intends to treat the health threat that’s upended the economy and claimed more than 200,000 lives with any seriousness at all.
Instead, Trump is poised to continue waging a political war against platforms like Twitter and Facebook — if the results of the election give him the chance. Trump has already expressed interest in dismantling Section 230, a key legal provision that protects platforms from liability for user-generated content. He tweeted “REPEAL SECTION 230!!!” Tuesday after Twitter and Facebook took action against his posts saying the flu is worse than COVID-19.
As with all Extra Crunch Live episodes, we’ve included the full video below, along with a number of favorite quotes from the conversation.
Above the paywall, I wanted to share what De Rycker said about the European startup ecosystem: It’s been stuck in my head for the last day, because her comments points to a future where there is no single center of startup gravity.
Instead, considering her bullishness on her local scene, we’re going to see at least three major hubs, namely North America with a locus in the United States, Asia with a possible capital in India, and Europe, with a somewhat distributed layout.
Here’s De Rycker from our chat, responding to my question about how active the European venture and startup scene is today (transcript has been lightly edited for clarity):
What has surprised me even more [than change in the European startup scene over time] is the acceleration in the last couple of years. And I think it’s continued in the last few months, despite the COVID environment.
And that’s really because Europe isn’t just one location, right? It’s a collection of different ecosystems, different locations, different hubs. At any point in time there are 15 to 20 cities that are relevant, and they’ve all sort of reached this tipping point. And together, Europe is at this inflection point, in terms of the quality of entrepreneurs, [and] the number of opportunities. And it feels like it’s all come together with the digitization that’s going on that we’re all, you know, very much believing in right now. And the fact that there’s a ton of capital around. So I would say that we’re seeing a pretty frenetic pace, more than, candidly, pre-COVID, which is not something we expected. […]
But I would say that overall, Europe is incredibly active [regarding] deal pace, deal count, I wouldn’t say it’s very different from what I understand to be the situation in the U.S.
Undergirding what De Rycker said above, TechCrunch recently reported on the financial results of TransferWise, a European fintech unicorn that grew 70% in the last year, to £302.6 million in revenue. Toss in Adyen’s epic run as a public European tech company and there’s lots to celebrate from the continent, even if we don’t read enough about here in the States.