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Open source sustainability

22:25 | 23 June

Open source sustainability has been nothing short of an oxymoron. Engineers around the world pour their sweat and frankly, their hearts into these passion projects that undergird all software in the modern internet economy. In exchange, they ask for nothing in return except for recognition and help in keeping their projects alive and improving them. It’s an incredible movement of decentralized voluntarism and represents humanity at its best.

The internet and computing giants — the heaviest users of open source in the world — are collectively worth trillions of dollars, but you would be remiss in thinking that their wealth has somehow trickled down to the maintainers of the open source projects that power them. Working day jobs, maintainers today can struggle to find the time to fix critical bugs, all the while facing incessant demands from users requesting free support on GitHub. Maintainer burnout is a monstrous challenge.

That distressing situation was chronicled almost exactly two years ago by Nadia Eghbal, in a landmark report on the state of open source published by the Ford Foundation. Comparing open source infrastructure to “roads and bridges,” Eghbal provided not just a comprehensive overview of the challenges facing open source, but also a call-to-arms for more users of open source to care about its economics, and ultimately, how these critical projects can sustain themselves indefinitely.

Two years later, a new crop of entrepreneurs, open source maintainers, and organizations have taken Eghbal up on that challenge, developing solutions that maintain the volunteer spirit at the heart of open source while inventing new economic models to make the work sustainable. All are early, and their long-term effects on the output and quality of open source are unknown. But each solution offers an avenue that could radically change the way we think of a career in open source in the future.

No one sees that the Roads and Bridges are falling down

Eghbal’s report two years ago summarized the vast issues facing open source maintainers, challenges that have remained essentially unchanged in the interim. It’s a quintessential example of the “tragedy of the commons.” As Edghbal wrote at the time, “Fundamentally, digital infrastructure has a free rider problem. Resources are offered for free, and everybody (whether individual developer or large software company) uses them, so nobody is incentivized to contribute back, figuring that somebody else will step in.” That has led to a brittle ecosystem, just as open source software reached the zenith of its influence.

The challenges, though, go deeper. It’s not just that people are free riding, it’s often that they don’t even realize it. Software engineers can easily forget just how much craftsmanship has gone into the open source code that powers the most basic of applications. NPM, the company that powers the module repository for the Node ecosystem, has nearly 700,000 projects listed on its registry. Starting a new React app recently, NPM installed 1105 libraries with my initial project in just a handful of seconds. What are all of these projects?

And more importantly, who are all the people behind them? That dependency tree of libraries abstracts all the people whose work has made those libraries available and functional in the first place. That black box can make it difficult to see that there are far fewer maintainers working behind the scenes at each of these open source projects than what one might expect, and that those maintainers may be struggling to work on those libraries due to lack of funding.

Eghbal pointed to OpenSSL as an example, a library that powers a majority of encrypted communications on the web. Following the release of the Heartbleed security bug, people were surprised to learn that the OpenSSL project was the work of a very small team of individuals, with only one of them working on it full-time (and at a very limited salary compared to industry norms).

Such a situation isn’t unusual. Open source projects often have many contributors, but only a handful of individuals are truly driving a particular project forward. Lose that singular force either to burnout or distraction, and a project can be adrift quickly.

When free isn’t free

No one wants open source to disappear, or for maintainers to burnout. Yet, there is a strong cultural force against commercial interests in the community. Money is corrupting, and dampens the voluntary spirit of open source efforts. More pragmatically, there are vast logistical challenges with managing money on globally distributed volunteer teams that can make paying for work logistically challenging.

Unsurprisingly, the vanguard of open source sustainability sees things very differently. Kyle Mitchell, a lawyer by trade and founder of License Zero, says that there is an assumption that “Open source will continue to fall from the sky like manna from heaven and that the people behind it can be abstracted away.” He concludes: “It is just really wrong.”

That view was echoed by Henry Zhu, who is the maintainer of the popular JavaScript compiler Babel. “We trust startups with millions of VC money and encourage a culture of ‘failing fast,’ yet somehow the idea of giving to volunteers who may have showed years of dedication is undesirable?” he said.

Xavier Damman, the founder and CEO of Open Collective, says that “In every community, there are always going to be extremists. I hear them and understand them, and in an ideal world, we all have universal basic income, and I would agree with them.” Yet, the world hasn’t moved to such an income model, and so supporting the work of open source has to be an option. “Not everyone has to raise money for the open source community, but the people who want to, should be able to and we want to work with them,” he said.

Mitchell believes that one of the most important challenges is just getting comfortable talking about money. “Money feels dirty until it doesn’t,” he said. “I would like to see more money responsibility in the community.” One challenge he notes is that “learning to be a great maintainer doesn’t teach you how to be a great open source contractor or consultant.” GitHub works great as a code repository service, but ultimately doesn’t teach maintainers the economics of their work.

Supporting the individual contributor: Patreon and License Zero

Perhaps the greatest debate in sustaining open source is deciding who or what to target: the individual contributors — who often move between multiple projects — or a particular library itself.

Take Feross Aboukhadijeh for example. Aboukhadijeh (who, full disclosure, was once my college roommate at Stanford almost a decade ago) has become a major force in the open source world, particularly in the Node ecosystem. He served an elected term on the board of directors of the Node.js Foundation, and has published 125 repositories on GitHub, including popular projects like WebTorrent (with 17,000 stars) and Standard (18,300 stars).

Aboukhadijeh was looking for a way to spend more time on open source, but didn’t want to be beholden to working on a single project or writing code at a private company that would never see the light of day. So he turned to Patreon as a means of support.

(Disclosure: CRV, my most immediate former employer, is the series A investor in Patreon. I have no active or passive financial interest in this specific company. As per my ethics statement, I do not write about CRV’s portfolio companies, but given that this essay focuses on open source, I made an exception).

Patreon is a crowdsourced subscription platform, perhaps best known for the creatives it hosts. These days though, it is also increasingly being used by notable open source contributors as a way to connect with fans and sustain their work. Aboukhadijeh launched his page after seeing others doing it. “A bunch of people were starting up Patreons, which was kind of a meme in my JavaScript circles,” he said. His Patreon page today has 72 contributors providing him with $2,874 in funding per month ($34,488 annually).

That may seem a bit paltry, but he explained to me that he also supplements his Patreon with funding from organizations as diverse as Brave (an adblocking browser with a utility token model) to PopChest (a decentralized video sharing platform). That nets him a couple of more thousands of dollars per month.

Aboukhadijeh said that Twitter played an outsized role in building out his revenue stream. “Twitter is the most important on where the developers talk about stuff and where conversations happen…,” he said. “The people who have been successful on Patreon in the same cohort [as me] who tweet a lot did really well.”

For those who hit it big, the revenues can be outsized. Evan You, who created the popular JavaScript frontend library Vue.js, has reached $15,206 in monthly earnings ($182,472 a year) from 231 patrons. The number of patrons has grown consistently since starting his Patreon in March 2016 according to Graphtreon, although earnings have gone up and down over time.

Aboukhadijeh noted that one major benefit was that he had ownership over his own funds. “I am glad I did a Patreon because the money is mine,” he said.

While Patreon is one direct approach for generating revenues from users, another one is to offer dual licenses, one free and one commercial. That’s the model of License Zero, which Kyle Mitchell propsosed last year. He explained to me that “License Zero is the answer to a really simple question with no simple answers: how do we make open source business models open to individuals?”

Mitchell is a rare breed: a lifelong coder who decided to go to law school. Growing up, he wanted to use software he found on the web, but “if it wasn’t free, I couldn’t download it as a kid,” he said. “That led me into some of the intellectual property issues that paved a dark road to the law.”

License Zero is a permissive license based on the two-clause BSD license, but adds terms requiring commercial users to pay for a commercial license after 90 days, allowing companies to try a project before purchasing it. If other licenses aren’t available for purchase (say, because a maintainer is no longer involved), then the language is no longer enforceable and the software is offered as fully open source. The idea is that other open source users can always use the software for free, but for-profit uses would require a payment.

Mitchell believes that this is the right approach for individuals looking to sustain their efforts in open source. “The most important thing is the time budget – a lot of open source companies or people who have an open source project get their money from services,” he said. The problem is that services are exclusive to a company, and takes time away from making a project as good as it can be. “When moneymaking time is not time spent on open source, then it competes with open source,” he said.

License Zero is certainly a cultural leap away from the notion that open source should be free in cost to all users. Mitchell notes though that “companies pay for software all the time, and they sometimes pay even when they could get it for free.” Companies care about proper licensing, and that becomes the leverage to gain revenue while still maintaining the openness and spirit of open source software. It also doesn’t force open source maintainers to take away critical functionality — say a management dashboard or scaling features — to force a sale.

Changing the license of existing projects can be challenging, so the model would probably best be used by new projects. Nonetheless, it offers a potential complement or substitute to Patreon and other subscription platforms for individual open source contributors to find sustainable ways to engage in the community full-time while still putting a roof over their heads.

Supporting the organization: Tidelift and Open Collective

Supporting individuals makes a lot of sense, but often companies want to support the specific projects and ecosystems that underpin their software. Doing so can be next to impossible. There are complicated logistics required in order for companies to fund open source, such as actually having an organization to send money to (and for many, to convince the IRS that the organization is actually a non-profit). Tidelift and Open Collective are two different ways to open up those channels.

Tidelift is the brainchild of four open-source fanatics led by Donald Fischer. Fischer, who is CEO, is a former venture investor at General Catalyst and Greylock as well as a long-time executive at Red Hat. In his most recent work, Fischer invested in companies at the heart of open source ecosystems, such as Anaconda (which focuses on scientific and statistical computing within Python), Julia Computing (focused on the Julia programming language), Ionic (a cross-platform mobile development framework), and TypeSafe now Lightbend (which is behind the Scala programming language).

Fischer and his team wanted to create a platform that would allow open source ecosystems to sustain themselves. “We felt frustrated at some level that while open source has taken over a huge portion of software, a lot of the creators of open source have not been able to capture a lot of the value they are creating,” he explained.

Tidelift is designed to offer assurances “around areas like security, licensing, and maintenance of software,” Fischer explained. The idea has its genesis in Red Hat, which commercialized Linux. The idea is that companies are willing to pay for open source when they can receive guarantees around issues like critical vulnerabilities and long-term support. In addition, Tidelift handles the mundane tasks of setting up open source for commercialization such as handling licensing issues.

Fischer sees a mutualism between companies buying Tidelift and the projects the startup works with. “We are trying to make open source better for everyone involved, and that includes both the creators and users of open source,” he said. “What we focus on is getting these issues resolved in the upstream open source project.” Companies are buying assurances, but not exclusivity, so if a vulnerability is detected for instance, it will be fixed for everyone.

Tidelift initially launched in the JavaScript ecosystem around React, Angular, and Vue.js, but will expand to more communities over time. The company has raised $15 million in venture capital from General Catalyst and Foundry Group, plus former Red Hat chairman and CEO Matthew Szulik.

Fischer hopes that the company can change the economics for open source contributors. He wants the community to move from a model of “get by and survive” with a “subsistence level of earnings” and instead, help maintainers of great software “win big and be financially rewarded for that in a significant way.”

Where Tidelift is focused on commercialization and software guarantees, Open Collective wants to open source the monetization of open source itself.

Open Collective is a non-profit platform that provides tools to “collectives” to receive money while also offering mechanisms to allow the members of those collectives to spend their money in a democratic and transparent way.

Take, for instance, the open collective sponsoring Babel. Babel today receives an annual budget of $113,061 from contributors. Even more interesting though is that anyone can view how the collective spends its money. Babel currently has $28,976.82 in its account, and every expense is listed. For instance, core maintainer Henry Zhu, who we met earlier in this essay, expensed $427.18 on June 2nd for two weeks worth of Lyft rides in SF and Seattle.

Xavier Damman, CEO and founder of Open Collective, believes that this radical transparency could reshape how the economics of open source are considered by its participants. Damman likens Open Collective to the “View Source” feature of a web browser that allows users to read a website’s code. “Our goal as a platform is to be as transparent as possible,” he said.

Damman was formerly the founder of Storify. Back then, he built an open source project designed to help journalists accept anonymous tips, which received a grant. The problem was that “I got a grant, and I didn’t know what to do with the money.” He thought of giving it to some other open source projects, but “technically, it was just impossible.” Without legal entities or paperwork, the money just wasn’t fungible.

Open Collective is designed to solve those problems. Open Collective itself is a 501(c)6 non-profit, and it technically receives all money destined for any of the collectives hosted on its platform as their fiscal sponsor. That allows the organization to send out invoices to companies, providing them with the documentation they need in order to write a check. “As long as they have an invoice, they are covered,” Damman explained.

Once a project has money, it is up to the maintainers of that community to decide how to spend it. “It is up to each community to define their own rules,” Damman said. He notes that open source contributors can often spend the money on the kind of uninteresting work that doesn’t normally get done, which Damman analogized as “pay people to keep the place clean.” No one wants to clean a public park, but if no one does it, then no one will ever use the park. He also noted that in-person meetings are a popular usage of revenues.

Open Collective was launched in late 2015, and since then has become home to 647 open source projects. So far, Webpack, the popular JavaScript build tool, has generated the most revenue, currently sitting at $317,188 a year. One major objective of the non-profit is to encourage more for-profit companies to commit dollars to open source. Open Collective places the logos of major donors on each collective page, giving them visible credit for their commitment to open source.

Damman’s ultimate dream is to change the notion of ownership itself. We can move from “Competition to collaboration, but also ownership to commons,” he envisioned.

Sustaining sustainability

It’s unfortunately very early days for open source sustainability. While Patreon, License Zero, Tidelift, and Open Collective are different approaches to providing the infrastructure for sustainability, ultimately someone has to pay to make all that infrastructure useful. There are only a handful of Patreons that could substitute for an engineer’s day job, and only two collectives by my count on Open Collective that could support even a single maintainer full time. License Zero and Tidelift are too new to know how they will perform yet.

Ultimately though, we need to change the culture toward sustainability. Henry Zhu of Babel commented, “The culture of our community should be one that gives back and supports community projects with all that they can: whether with employee time or funding. Instead of just embracing the consumption of open source and ignoring the cost, we should take responsibility for it’s sustainability.”

In some ways, we are merely back to the original free rider problem in the tragedy of the commons — someone, somewhere has to pay, but all get to share in the benefits.

The change though can happen through all of us who work on code — every software engineer and product manager. If you work at a for-profit company, take the lead in finding a way to support the code that allows you to do your job so efficiently. The decentralization and volunteer spirit of the open source community needs exactly the same kind of decentralized spirit in every financial contributor. Sustainability is each of our jobs, every day. If we all do our part, we can help to sustain one of the great intellectual movements humanity has ever created, and end the oxymoron of open source sustainability forever.

 


0

Are scooter startups really worth billions?

20:05 | 23 June

It’s been hard to miss the scooter startup wars opening fresh, techno-fueled rifts in Valley society in recent months. Another flavor of ride-sharing steed which sprouted seemingly overnight to clutter up sidewalks — drawing rapid-fire ire from city regulators apparently far more forgiving of traffic congestion if it’s delivered in the traditional, car-shaped capsule.

Even in their best, most-groomed PR shots, the dockless carelessness of these slimline electrified scooters hums with an air of insouciance and privilege. As if to say: Why yes, we turned a kids’ toy into a battery-powered kidult transporter — what u gonna do about it?

An earlier batch of electric scooter sharing startups — offering full-fat, on-road mopeds that most definitely do need a license to ride (and, unless you’re crazy, a helmet for your head) — just can’t compete with that. Last mile does not haul.

But a short-walk replacement tool that’s so seamlessly manhandled is also of course easily vandalized. Or misappropriated. Or both. And there have been a plethora of scooter dismemberment/kidnap horror stories coming out of California, judging by reports from the scooter wars front line. Hanging scooters in trees is presumably a protest thing.

Scooter brand Lime struck an especially tone-deaf tech note trying to fix this problem after an update added a security alarm  that bellowed robotic threats to call the cops on anyone who fumbled to unlock them. Safe to say, littering abusive scooters in public spaces isn’t a way to win friends and influence people.

Even when functioning ‘correctly’, i.e. as intended, scooter rides can ooze a kind of brash entitlement. The sweatless convenience looks like it might be mostly enabling another advance in tech-fueled douche behavior as a t-shirt wearing alpha nerd zips past barking into AirPods and inhaling a takeaway latte while cutting up the patience of pedestrians.

None of this fast-seeded societal friction has put the brakes on e-scooter startup momentum, though. Au contraire. They’ve been raising massive amounts of investment on rapidly inflating valuations ($2BN is the latest valuation for Bird).

But buying lots of e-scooters and leaving them at the mercy of human whim is an expensive business to try scaling. Hence big funding rounds are necessary if you’re going to replace all the canal-dunked duds and keep scooting fast enough for the competition.

At the same time, there isn’t a great deal to differentiate one e-scooter experience over another — beyond price and proximity. Branding might do it but then you have to scramble even harder and faster to create a slick experience and inflate a brand that sticks. (And it goes without saying that a scooter sticky with fecal-matter is absolutely not that.)

The still fledgling startups are certainly scrambling to scale, with some also already pushing into international markets. Lime just scattered ~200 e-scooters in Paris, for example. It’s also been testing the waters more quietly in Zurich. While Bird has its beady eye on European territory too.

The idea underpinning some very obese valuations for these fledgling startups is that scooters will be a key piece of a reworked, multi-modal transport mix for urban mobility, fueled by app-based convenience and city buy-in to greener transport options with emissions-free benefits. (Albeit scooters’ greenness depends on what they’re displacing; Great if it’s gas-guzzling cars, less compelling if it’s people walking or peddling.)

And while investors are buying in to the vision that lots of city dwellers are going to be scooting the last mile in future, and betting big on sizable value being captured by a few plucky scooter startups — more than half a billion dollars has been funneled into just two of these slimline scooter brands, Bird and Lime, since February — there are skeptical notes being sounded too.

Asking whether the scooter model really justifies such huge raises and heady valuations. Wondering if it isn’t a bit crazy for a fledgling Bird to be 2x a unicorn already.

Shared bike and scooter fleets are paving the way to a revolution in urban mobility but will only capture little value in the long term. Investors are highly overestimating the virtue of these businesses.

— Thibaud Elziere (@tiboel)

The bear case for these slimline e-scooters says they’re really only fixing a pretty limited urban mobility problem. Too spindly and unsafe to go the distance, too sedate of pace (and challenged for sidewalk space) to feel worthwhile if you don’t have far to go anyway. And of course you’re not going to be able to cart your kids and/or much baggage on a stand-up two wheeler. So they’re useless for families.

Meanwhile scooter invasions are illegal in some places and, where they are possible, are fast inviting public and regulatory frisson and friction — by contributing to congestion and peril on already crowded pavements.

After taking one of Lime’s just-landed e-scooters for a spin in Paris this week, Willy Braun, VC at early stage European fund Daphni, came away unimpressed. “I didn’t feel I was really saving time in a short distance, since there is always many people in our narrow sidewalks,” he tells us. “And it isn’t comfortable enough for me to imagine a longer distance. Also it’s quite expensive ($1 per use and $.15/min).

“Lastly: Before renting it I read two news media that told me I had to use it only on the sidewalks and they tell us that we should only use it on the road during the onboarding — and that wearing an helmet is mandatory without providing it). As a comparison, I’d rather use e-bikes (or emoto-bikes) for longer journey without hesitation.”

“Give us Jump instead of Lime!” he adds, namechecking the electric bike startup that’s been lodged under Uber’s umbrella since April, adding a greener string to its urban mobility bow — and which is also heading over to Europe as part of the ride-hailing giant’s ongoing efforts to revitalize its regionally battered brand.

“Uber stands ready to help address some of the biggest challenges facing German cities: tackling air pollution, reducing congestion and increasing access to cleaner transportation solutions,” said CEO Dara Khosrowshahi wheeling a bright red Jump bike on stage at the Noah conference in Berlin earlier this month. Uber’s Jump e-bikes will launch in Germany this summer.

E-bikes do seem to offer more urban mobility versatility than e-scooters. Though a scooter is arguably a more accessible type of wheeled steed vs a bike, given you can just stand on it and be moved.

But in Europe’s dense and dynamic urban environments — which, unlike the US, tend to be replete with public transit options (typically at a spectrum of price-points) — individual transport choices tend to be based firstly on economics. After which it’s essentially a matter of personal taste and/or the weather.

Urban transport horses for courses — depending on your risk, convenience and comfort thresholds, thanks to a publicly funded luxury of choice. So scooters have loads of already embedded competition.

TechCrunch’s resident Parisienne, Romain Dillet — a regular user of on-demand bike services in the city (of which there are many), and prior to that the city’s own dock-based bike rental scheme — also went for a test spin on a Lime scooter this week. And also came away feeling underwhelmed.

“This is bad,” he said after his ride. “It’s slow and you need to brake constantly. BUT the worst part is that it feels waaaaaay more dangerous than a bike. Basically you can’t brake abruptly because you’re just standing there.”

Index Venture’s Martin Mignot was also in Paris this week and he took the chance to take a Lime scooter for a spin too — checking out the competition in his case, given the European VC firm is a Bird backer. So what did he think?

“The experience is pretty cool. It’s slightly faster than a bike, there’s no sweating. The weather was just amazing and very hot in Paris so it was pretty amazing in terms of speed and lack of effort,” he says, rolling out the positively spun, vested view on scooter sharing. “Especially going up hill to go to Gare du Nord.

“And the lack of friction — just to get on board and get started. So in general I think it’s a great experience and I think it feels a really interesting niche between walking and on-demand bikes… In Paris you’ve also got the mopeds. So that kind of ‘in between offering’. I think there’s a big market there. I think it’s going to work pretty well in Paris.”

Mignot is a tad disparaging about the quality of Lime’s scooters vs the model being deployed by Bird — a scooter model he also personally owns. But again, as you’d expect given his vested interests.

“Obviously I’m biased but I would say that the Xiaomi scooter/Ninebot scooter is higher quality than the one that Lime are using,” he tells us. “I thought that the Lime one, the handlebar is a little bit too high. The braking is a little bit too soft. Maybe it was the one I used, I don’t know.”

Talking generally about scooter startups, he says investors’ excitement boils down to trip frequency — thanks exactly to journeys being these itty-bitty last mile links.

But it’s also then about the potential for all that last mile hopping to be a shortcut for winning a prized slot on smartphone users’ homescreens — and thus the underlying game being played looks like a jockeying for prime position in the urban mobility race.

Lime, for example, started out with bike rentals before jumping into scooters and going multi-modal. So scooter sharing starts to look like a strategy for mobility startups to scoot to the top of the attention foodchain — where they’re then positioned to offer a full mix and capture more value.

So really scooters might mostly be a tool for catching people’s app attention. Think of that next time you see one lying on a sidewalk.

“What’s very interesting if you look at the trip distribution, most of the trips are short. So the vast majority of trips if you’re walking, obviously, are less than three miles. So that’s actually where the bulk of the mobility happens. And scooters play really well in that field. So in terms of sheer number of trips I think it’s going to dwarf any other type of transportation. And especially ride-hailing,” says Mignot.

“If you look at how often do people use Uber or Lyft or Taxify… it’s going to be much less frequent than the scooter users. And I think that’s what makes it such an interesting asset… The frequency will be much higher — and so the apps that power the scooters will tend to be on the homescreen. And kind of on top of the foodchain, so to speak. So I think that’s what makes it super interesting.”

Scooters also get a big investor tick on merit of the lack of friction standing in the way of riding vs other available urban options such as bikes (or, well, non-electric scooters, skateboards, roller blades, public transport, and so on and on) — in both onboarding (getting going) and propulsion (i.e. the lack of sweat required to ride) terms.

“That’s what’s so brilliant with these devices, you just snap the QR code and off you go,” he says. “The difference with bikes is that you don’t have to produce any effort. I think there are cases where obviously bikes are better. But I think there are a lot of cases where people will want something where you don’t sweat.

“Where you don’t wrinkle your clothes. Which goes a little bit faster. Without going all the way to the moped experience where you need to put the helmet, which is a bit more dangerous, which a lot of people, especially women, are not super familiar with. So I think what’s exciting with scooters as a form factor is it’s actually very mainstream.

“Anyone can ride them. It’s very simple to manoeuvre. It’s not super fast, it’s not too dangerous. It doesn’t require any muscular effort — so for older people or for people who just don’t want to sweat because they’re going to a meeting or something. It’s just a fantastic option.”

Index has also invested in an e-bike startup (Cowboy) and the firm is fully signed up to the notion that urban mobility will be multimodal. So if e-scooters valuations are a bit overcooked Index is not going to be too concerned. People in cities are clearly going to be riding something. And backing a mix is a smart way to hedge the risk of any one option ending up more passing fad than staple urban steed.

Mostly Index is betting that people will keep on riding robotic horses for urban courses. And whatever they ride it’s a fairly safe bet that an app is going to be involved in the process of finding (docklessness is therefore another attention play) or unlocking (scan that QR code!) the mobility device — opening up the possibility that a single app could house multiple mobility options and thus capture more overall value.

“It’s not a one-size fits all. They’re all complementing each other,” says Mignot of the urban mobility options in play. “I would say e-bikes are probably a little bit more great for little bit longer trips because you’re sitting down. But again it takes a little bit longer, because you have to adjust the saddle, you need to start peddling. There’s a bit more friction both on the onboading and on the riding. But they’re a bit better for slightly longer distances. I would say for shorter distances there’s nothing better than the scooter.”

He also points out that scooters are both cheaper and less bulky than e-bikes. And because they take up less street space they can — at least in theory — be more densely stacked, thereby generating the claimed convenience by having them sitting near enough to convince someone not to bother walking 10 minutes to the café or gym — and just scoot instead. So scooters’ slimline physique is also especially exciting to investors. (Even if, ironically, it’s being deployed to urge people to walk less.)

“I think we will end up with more density of scooters. Which is super important,” he continues. “People will, in the end, tend to take the vehicle that they can find where they are. And I think it’s more likely, eventually, that they will get a scooter than an e-bike. Just simply because they take less space and they are less expensive.”

But why wouldn’t people who do get won over to the sweatless perks of last mile scooting just buy and own their own ride — rather than shelling out on an ongoing basis to share?

Unlike bikes, scooters are mobile enough to be picked up and moved around fairly easily. Which means they can go with you into your home, office, even a restaurant — disruptively reducing theft risk. Whereas talk to any bike owner and they’ll almost invariably have at least one tale of theft woe, which is a key part of what makes bike sharing so attractive: It erases theft worry.

Add to that, you can find e-scooters on sale in European electronics shops for as little as €140. So if you’re going to be a regular scooterer, the purely economic argument to just own your own looks pretty compelling.

And people zipping around on e-scooters is a pretty common sight in another dense European city, Barcelona, which has very scooter-friendly weather but no scooter startups (yet). But unless it’s a tourist weaving along the seafront most of these riders are not shared: People just popped into their local electronics shop and walked out with a scooter in a box.

So the rides aren’t generating repeat revenue for anyone except the electricity companies.

 

Asked why people who do want to scoot won’t just buy, rather than rent Mignot talks up the hassle of ownership — undermined slightly by the fact he is also a scooter owner (despite the claimed faff from problems such as frequent flat tires and the chore of the nightly charge).

“The thing you notice very rapidly: There are two things, one is the maintenance,” he says. “The models that exist today are not super robust. Maybe in a very flat, very smooth roads, maybe Santa Monica, maybe it’s a little bit less true but I would say in Europe the maintenance that is required is fairly high… I have to do something on mine every week.

“The other thing is it takes a little bit of space. If you have to bring it to a restaurant or whatever type of crowded place, a movie theatre or wherever you’re going, to an office, to a meeting room, it’s a little bit on the heavy side, and it’s a little bit inconvenient. So certainly some people will buy them… But I also think that there are a lot of cases where you’d rather have it just on-demand.”

Unlike Mignot and Index, Tom Bradley, of UK focused VC firm Oxford Capital, is not so convinced by the on-demand scooter craze.

The firm has not made any e-scooter investments itself, though mobility is a “core theme”, with the portfolio including an on-demand coach travel startup (Sn-ap), and technology plays such as Morpheus Labs (machine learning for driverless cars) and UltraSoc (complex circuits for automotive parts, which sells to the likes of Tesla).

But it’s just not been sold on scooter startups. Bradley describes it as an “open question” whether scooters end up being “an important part of how people move around the cities of the future”. He also points to theft problems with dockless bike share schemes that have not played out well in the UK.

“We’re not convinced that this is a fundamental part of the picture,” he says of scooter sharing. “It may be a part of the picture but I personally am not yet convinced that it’s as big a part of the picture that people seem to be prepared to pay for.”

“I keep thinking of the Segway example,” he adds. “It’s an absolutely delightful product. It’s brilliant. It’s absolutely brilliant. In a way that these electric scooters are not. But obviously it was much more expensive. And it made people feel a bit weird. But it was supposed to be the answer — and it’s not the answer. Before its time, perhaps.”

Of course he also accepts that capital is “being used as a weapon”, as he puts it, to scoot full-pelt towards a future where shared electric scooters are the norm on city streets by waging a “marketing war” to get there.

“Venture capital valuations are what someone is prepared to pay. And in this case people are valuing potential rather than valuing the business… so the valuations [of Bird and Lime] are being driven more than anything by the amount of money being raised,” he says. “So you decide a rule of thumb about what is acceptable dilution, and if you’re going to raise $400M or whatever then the valuation’s got to be somewhere between $1.6BN and $2BN to make that sort of raise make sense — and leave enough equity for the previous investors and founders. So there’s an element of this where the valuations are being driven by the amount of capital being raised.”

Oxford Capital’s bearish view on scooter sharing is also bounded by the fund only investing in UK-based startups. And while Bradley says it sees lots of local mobility strengths — especially in the automotive market — he admits it’s more of a mental leap to imagine a world leading scooter startup sprouting from the country’s green and pleasant lands. Not least because it’s not legal to use them on UK public roads or pavements.

“If you look at places like Amsterdam, Berlin, they’re sort of built for bikes. London’s getting towards being built for bikes… Cycling’s been one of the big success stories in London. Is [scooter sharing] going to replace cycling? I don’t know. Not so convinced… It’s obviously easy for anyone to get on and off these things, young and old. So that’s good, it’s inclusive. But it feels a little bit like a solution looking for a problem, the sorts of journeys people talk about for these things — on campus, short urban journeys. A lot of these are walkable or cycle journeys in a lot of cities. So is there a mass need?

“Is this Segway 2 or is this bike hire 2… it’s hard to tell. And we’re coming down on the former. We’re not convinced this is going to be a fundamental part of the transport space. It will be a feature but not a huge part.”

But for Mignot the early days of the urban mobility attention wars mean there’s much to play for — and much that can be favorably reshaped to fit scooters into the mix.

“The whole thing, even on-demand bikes, it’s a two year old phenomenon really,” he says. “So I think everyone is just trying to learn and figure out and adapt to this new reality, whether it’s users or companies or cities. I think it’s very similar to when cars were first introduced. There were no parking spaces at the time and there were no rules on the road. And fast forward 100 years and it looks very different.

“If you look at the amount of infrastructure and effort and spend that has been put into making — and I would argue way more than should have — into making a city car-friendly, if you only do a 100th of the same amount of effort and spend into making some space for bicycles and light two-wheel vehicles I think we’ll be fine.

“That’s the beauty of this model. If you compare the space of the tech and if you look at the efficiency of moving people around vs the space, the scooters are simply the most efficient because their footprint on the ground is just so small.”

He even makes the case for scooters working well in London — arguing the sprawl of the city amps up the utility because there are so many tedious last mile trips that people have to make.

Even more so than in denser European cities like Paris, where he admits that hopping on a scooter might just be more of a “nice to have”, given shorter distances and all the other available options. So, really, where urban mobility is concerned, it can actually be courses for horses.

Yet, the reality is London is off-limits to the likes of Bird and Lime for now — thanks to UK laws barring this type of unlicensed personal electric vehicle from public roads and spaces.

You can buy e-scooters for use on private land in the UK but any scooter startups that tried their usual playbook in London would be scooting straight for legal hot water.

It’s not just the British weather that’s inclement.

“I’m really hoping that TfL [Transport for London] and the Department for Transport are going to make it possible,” says Mignot on that. “I think any city should welcome this with open arms. Some cities are, by the way. And I think over time once they see the success stories in other parts of the world I think they all will. But I wish London was one of those cutting edge cities that would welcome new innovation with open arms. I think right now, unfortunately, it’s not there.

“There’s a lot of talk about air quality, and so on, but actually, when push comes to shove… you have a lot of resistance and a lot of pushback… So it’s a little bit disappointing. But, you know, we’ll get there eventually.”

 


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Your second chance for Startup Battlefield at Disrupt SF

20:00 | 22 June

If you missed the deadline last week to apply for the infamous Startup Battlefield at Disrupt SF, have no fear. There is still one more chance at being part of the action!

Out of all of the early-stage companies exhibiting at Disrupt, three Startup Alley companies will have the opportunity to be selected as one of the “Wild Card” winners. You might be wondering, “what is Wild Card”? Wild Card is a Startup Alley exhibiting company that is selected by our TechCrunch editorial team to participate in the renowned Startup Battlefield competition. This year we’re selecting three, and if you are exhibiting in Startup Alley, you could be one of the lucky winners.

Last year at Disrupt NY 2017, RecordGram got a table in Startup Alley, where they ended up being selected as one of the Wild Card companies and ultimately went on to win the Startup Battlefield competition — and took home $50,000. Guess what? This year, the grand prize of Startup Battlefield at Disrupt SF has been doubled to $100,000!

Plus, you’ll have all the benefits of being a Startup Alley exhibitor, including access to CrunchMatch, Disrupt’s matchmaking service between startups and investors. So far, the investors coming to Disrupt SF this year have investment funds in excess of $4 billion, and we’re expecting more to sign up in the coming weeks. Also, over the course of the three-day conference, there will be curated tracks of content across four unique stages in 12 different verticals, plus tons of educational workshops and a plethora of networking opportunities.

So, if your company is pre-series A, Startup Alley at Disrupt SF is the place for you. Secure your exhibitor package here before we sell out!

 


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WordPress.com parent company acquires Atavist

19:47 | 22 June

Automattic, the company behind WordPress.com, WooCommerce, Longreads, Simplenote and a few other things, is acquiring Brooklyn-based startup Atavist.

Atavist has been working on a content management system for independent bloggers and writers. With an Atavist website, you can easily write and publish stories with a ton of media.

You might think that this isn’t particularly groundbreaking as anyone can create a website on WordPress.com or Squarespace and do the same thing. But the company also lets you create a paywall and build a subscription base.

Many writers don’t want to deal with the technical details of running a website. That’s why Atavist gives you the tools so that you can focus on your stories.

Atavist is also running a publication called Atavist Magazine. The publication is also joining Automattic. It’s unclear if it’s going to be part of Longreads or remain its own thing.

The CMS itself won’t stick around. Automattic said that the publishing platform will be integrated into WordPress. And this is the interesting part.

While WordPress is probably a much more solid CMS than Atavist, it could mean that Automattic wants to start offering subscriptions and paywalls. You can imagine WordPress.com websites that offer monthly subscriptions natively.

30 percent of the web runs on WordPress. Many of them are open source instances of WordPress hosted on their own servers. But many websites are hosted by WordPress.com, including TechCrunch.

Subscriptions on WordPress.com is good news for the web. Medium abruptly canceled its subscription program leaving many independent publications in the dust. So it’s hard to trust Medium when it comes to providing enough revenue to independent writers.

Automattic could create a seamless portal to manage subscriptions to multiple publications. And this could lead to less advertising and better content.

 


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Lime scooters are live in Paris

19:24 | 22 June

Lime is the hot new thing in San Francisco, but will it work in other countries? The company just launched its electric scooter service in Paris.

This isn’t the first European city as Lime is also operating in Berlin, Bremen, Frankfurt and Zurich. But it’s a significant launch as alternative mobility solutions have all been trying to grab some market share in Paris.

Yesterday, you could see 200 scooters in the South East of Paris ready to be deployed. Lime plans to expand its fleet over time. Every day, the company will collect all the scooters at 9 PM to recharge them and put them back on the streets at 5 AM.

Between October and January, four bike-sharing services launched in Paris — GoBee Bike, Obike, Ofo and Mobike. GoBee Bike has left the market since then because it was underfunded and suffering from too much competition.

But Mobike and Ofo seem to be doing really well, especially if you compare it to the docked bikes — Vélib is more or less broken right now. Vélib started in 2007, years before cities like New York and London adopted a bike-sharing system. That’s why Parisians have had enough time to get familiar with the idea of sharing a bike with other members.

And then, there is Cityscoot and Coup, two electric scooter services (motorcycles, not standing scooters). They’re more expensive but quite popular, especially for longer distances.

It leaves Lime in an awkward position. I tried a Lime earlier today and wasn’t convinced it was the right solution for Paris. First, it’s quite expensive. You pay €1 to unlock it and then €0.15 per minute. A 20-minute ride costs €4 for instance. This is more expensive than 20 minutes on a Cityscoot, and less expensive than 20 minutes using Coup.

But it’s way more expensive than 20 minutes on an Ofo bike, which costs €0.50. I’m not convinced people are willing to pay eight times as much for everyday rides. Public transport options are also much more efficient in Paris than in San Francisco.

Paris is also much more difficult to navigate on a Lime scooter than San Francisco. There are speed bumps made out of paving stones and narrow streets. In addition to that, you can’t brake abruptly because you’re just standing on a scooter. I had to brake constantly in order to overcome those obstacles.

And yet, cities will need many different options to replace cars. There won’t be just one thing. People will use a multitude of transportation methods, from bikes to Lime scooters to electric motorcycle scooters. Now let’s see if Lime scooters won’t end up in the Seine.

 


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Sphero acquires a music education startup

19:04 | 22 June

It’s hard to say precisely how Sphero’s pivot to education is going in these early stages, but it recently got an infusion of funding and is already out acquiring new startups. The BB-8 maker announced this morning that it’s picked up Specdrums​ — the fellow Boulder, Co-based startup is a Kickstarter success story that lets users create music with an app connected ring.

It’s a strange fit at first glance, but Sphero clearly sees the company’s wearable technology as a strong addition to its newfound STEAM education focus.

“We firmly believe that play is a powerful teacher. With the addition of Specdrums, we are strengthening the ‘A’ in STEAM in our product roadmap,” Sphero CEO Paul Berberian said in a press release tied to the news. “With Sphero’s infrastructure and the groundwork that the Specdrums founders have already completed, we believe there’s a huge opportunity to continue to inspire curiosity in classrooms and beyond.”

We're stoked to announce the addition of Specdrums, app-enabled musical rings that turn colors into sounds, to the Sphero family.

Get more details below, and be the first to know when Specdrums become available for purchase so you can stop beatboxing. https://t.co/P5xdpX583c pic.twitter.com/fbH5WcggnA

— Sphero (@Sphero)

How Specdrums will fit into the larger company remains to be seen, but for now, Sphero is promising a relaunch of the company’s first music product the end of this year or the beginning of next. The initial Spedrums offering had been sold out after the closing of the company’s 2017 crowdfunding campaign.

Sphero, for its part, kicked off the year on rough footing, laying off dozens of staffers after the company’s glut of Disney-branded robotics toys failed to maintain its earlier Star Wars success. At the time, the company promised to double down on education, and is looking to fulfill that goal with a recent $12 million funding round.

Terms for this particular acquisition, however, have not been disclosed.

 


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Citymapper lets you find Ofo, Mobike and scooters around you

17:49 | 22 June

Urban transportation app Citymapper quietly rolled out an app update that lets you find many alternative mobility services in the app. You can now find the nearest dockless bike or electric scooter around you (not the Bird and Lime kind, the motorcycle kind).

The integrations are already live in many cities. The company didn’t add new buttons for each service because it was already getting quite crowded with buses, subways and ride-sharing services.

If you tap the bike button, you get a map view of the streets around you. In addition to traditional bike-sharing services, you’ll now find colored dots representing both Ofo and Mobike . Below the map, you get a list of the closest bikes. TechCrunch’s Ingrid Lunden previously reported that the Mobike integration was coming soon.

But Citymapper also added a new scooter button in multiple cities. As the name suggests, this button helps you locate the closest free-floating scooter that you can unlock with your phone.

In Paris, you’ll find Coup and Cityscoot scooters. In Berlin, you’ll find Coup scooters. In Madrid and Barcelona, you’ll find Muving, ioscoot, eCooltra and Yugo scooters… You get the idea. Chances are all your local options will be there.

Interestingly, electric scooters from Bird and Lime aren’t in there just yet. It might be what everybody is talking about, but you’ll only see Jump and Ford bikes in San Francisco.

For now, all you can do is locate the nearest bike or scooter. You still have to open each individual app to scan the QR code and unlock those vehicles.

But this is an interesting approach. Citymapper doesn’t operate any transportation service. It can be an agnostic player and provide a comprehensive view of what’s around you without any conflict of interest. It doesn’t have to recreate a transportation hub like Lyft or Uber as those two companies recently acquired Motivate and Jump to provide bike-sharing services.

And if you’re visiting a city for the first time, you can open the app to find out how you’ll be able to navigate that new city.

 


0

Transfer.sh is an instant sharing tool for programmers

17:22 | 22 June

File sharing tools are a dime a dozen these days. There’s Dropbox, Google Drive, and iCloud. But what if you want to share something quickly and easily from the command line? That’s why programmer Remco Verhoef created Transfer.sh.

The service has basically a file dump. You send a file to transfer.sh via curl and it stays there for fourteen days until its automatically deleted. For example, I uploaded this picture by adding a bit of code to my .bashrc.

The system is one of those small, clever tools that just works. Verhoef created it because he needed to be able to upload files on the fly.

“I created this application when I needed to share log data from within a ssh shell with someone else,” he said. “So I created a web application where I can easily upload files using curl (which is available on almost every platform) just using the command line and modify the file on the fly, like encrypting the contents, applying grep etc. The application has been made open source because it could be usable for many other people and I’d encourage them to run their own server.”

“We don’t have a business model, and we are keeping the site running as courtesy. It is getting a bit difficult to keep it running, because of the popularity and usage,” he said. He also runs a dev shop and is releasing a number of other products including ICO security.

Verhoef doesn’t promise security on his platform, only convenience. He recommends piping files through gpg before uploading them.

Not everyone is using the product for good, however, which frustrates his team.

“It is being used by a lot of people,” he said. “Some are using it for uploading log files, others are exporting complete video surveillance to us. Sometimes it is being abused, by distributing malware, botnets and other malicious tools, but we try to stop it as soon as possible. One time a porn website was serving porn photos through us, and when we found out we had all photos replaced by dogs and kittens.”

 


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Twitter buys a startup to battle harassment, e-cigs are booming, and a meditation app is worth $250M

16:00 | 22 June

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This week TechCrunch’s Silicon Valley Editor Connie Loizos and I jammed out on a couple topics as Alex Wilhelm was out managing his fake stock game spreadsheets or something. (The jury is out on whether this was a good or bad thing.)

First up is Twitter buying Smyte, a startup targeting fixes for spam and abuse. This is, of course, Twitter’s perennial problem and it’s one that it’s been trying to fix for some time — but definitely not there yet. The deal terms weren’t disclosed, but Twitter to its credit has seen its stock basically double this year (and almost triple in the past few years). Twitter is going into a big year, with the U.S. midterm elections, the 2018 World Cup, and the Sacramento Kings probably finding some way to screw up in the NBA draft. This’ll be a close one to watch over the next few months as we get closer to the finals for the World Cup and the elections. Twitter is trying to bill itself as a home for news, focusing on live video, and a number of other things.

Then we have Juul Labs, an e-cigarette company that is somehow worth $10 billion. The Information reports that the PAX Labs spinout from 2015 has gone from a $250 million valuation all the way to $10 billion faster than you can name each scooter company that’s raising a new $200 million round from Sequoia that will have already been completed by the time you finish this sentence. Obviously the original cigarette industry was a complicated one circa the 20th century, so this one will be an interesting one to play out over the next few years.

Finally, we have meditation app Calm raising a $27 million round at a $250 million pre-money valuation. Calm isn’t the only mental health-focused startup that’s starting to pick up some momentum, but it’s one that’s a long time coming. I remember stumbling upon Calm.com back in 2012, where you’d just chill out on the website for a minute or so, so it’s fun to see a half-decade or so later that these apps are showing off some impressive numbers.

That’s all for this week, we’ll catch you guys next week. We apologize in advance if Alex makes it back on to the podcast.

Equity  drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocketcast, Downcast and all the casts.

 


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Labstep wants to fix the way science experiments are recorded and reproduced

11:00 | 22 June

Labstep, an app and online platform to help scientists record and reproduce experiments, has raised £1 million in new funding, including from existing investors. The company, whose team has a background in commercial R&D and academic research, including at Oxford University, is backed by Seedcamp and says it plans to use the new capital to double its team to 12, and for further product development.

This will include the launch of a marketplace for lab supplies, and is one of the ways Labstep plans to generate revenue. The startup will also add features to its app that streamline how scientists outsource elements of their research.

First conceived of in late 2013 and soft launched in 2015, Labstep has set out to digitise the lab experiment tracking and sharing process, and in turn give scientific research a major leg up.

As explained by CEO and co-founder Jake Schofield, science experiments are often recorded in an archaic way, relying on a mixture of pen and paper or entering resulting data into legacy software. Not only is this cumbersome but it also means that experiments are prone to mistakes and can be especially hard to replicate and therefore validate, either by a team working together internally or when sharing and cross-checking with the wider scientific and research community.

Enter: Labstep. The platform and app enables scientists to build libraries of experimental procedures — a bit like recipes — and then easily record progress when following a procedure in the lab, including building a timeline of the experiment. Procedures can also be shared with teams or more broadly, as well as deviated from in a transparent way. In fact, Schofield says one way to think about Labstep is as a ‘Github for lab experiments’. Procedures can be made public or private and can be optionally forked.

“Rather than following paper printouts, when actually carrying out your experimentation you can walk through these procedures step by step on a mobile device at the bench,” Schofield tells me. “Interactive features streamline and make it much easier to capture, comment, and record when you deviate from these processes”.

“Our API allows you to connect all the devices in your lab and automate the upload of results,” he explains. “Every action creates a timeline post, this automatic audit trail increases accuracy and saves the huge amounts of time normally spent writing a progress diary after the fact. You can form lab groups, like internal slack channels, that allow you to share these protocol libraries and real-time updates to see how your colleagues are progressing, this is massive as people are often collaborating and working in different geographical locations”.

In addition, the record of the steps that lead to a scientific conclusion can be attached to academic papers in the form of a URL so that other scientists can attempt to replicate the findings. This feature alone could go some way to tackling what the Labstep founder says is “a global reproducibility crisis,” estimated to cost billions per year in wasted research.

“At the point you publish your results, the competitive emphasis on keeping your research private shifts as you now want others to reproduce and validate your findings. We generate unique IDs that can be put in your publications and methods sections to link the protocols and the process that lead to these results,” he says.

As a route to monetisation, in the coming months Labstep will roll out a marketplace to make it easier to source the lab supplies needed to reproduce findings. It also plans to harness the real-time data that the Labstep app captures on how supplies in the lab are used, and Schofield says that by streamlining the ordering process, the reproducibility problem can be further addressed.

In another nod to collaboration, Labstep will also launch cloud features that allow users to outsource elements of the experimental process. I’m told that although outsourcing of research is commonly done in commercial R&D, it is used much less in academia.

Meanwhile, Labstep says it has users from over 600 universities globally including Stanford, Harvard and MIT in the U.S., and Oxford, University College London, Imperial College, King’s College and the Crick Institute in the U.K. It’s also not the only startup in this space to have got the attention of investors. Benchling, a graduate of Silicon Valley’s Y Combinator, raised a $14.5 million funding round a couple of weeks ago.

 


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