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What’s left to learn from Theranos? Have friends.

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What’s left to learn from Theranos? Have friends.

Elizabeth Holmes’ fraud trial has been the talk of the town (both in Silicon Valley and, you know, on Twitter). The four-month trial was so popular that the journalists who covered it had to wake up at 3 A.M. to make sure they could get a seat in the courtroom and do their jobs. Too many curious onlookers and fans of John Carreyrou’s tell-all “Bad Blood” wanted to witness tech history for themselves.

One of those curious onlookers was Danielle Baskin, a San Francisco-based artist who often pokes fun at tech culture through elaborate pranks (like Blue Check Homes) that sometimes turn into actual companies (like Branded Fruit). She arrived at the courthouse in San Jose with a suitcase in tow, selling bootleg Holmes merch: blonde wigs, red lipstick, black turtlenecks and blood energy drinks.

It was a joke, mocking the absurdity of the fact that someone on trial for fraud has “stans” who call themselves “Holmies.” But as Baskin watched Holmes’ third day of testimony, she shared a key insight about how Theranos got so out of control.

“Coming out of the Holmes trial, I think one of my biggest pieces of advice to startup founders is to have friends,” Baskin tweeted after court adjourned. “You need people in your life you enjoy hanging out with that say things like ‘lol what are you talking about’ or ‘that’s a bad idea’ when you say weird shit.”

Smoke and mirrors

In his opening statement of the case, federal prosecutor Robert Leach described how Holmes constructed a company with a $10 billion valuation based on technology that was dangerously faulty, at best. He said that one of Holmes’ techniques was to rely on “false and misleading” media coverage of Theranos to secure funding from investors. Holmes was on the cover of Fortune, Forbes and Inc. Magazine, and she was celebrated as one of TIME’s 100 Most Influential People in 2015, lauded as a “tech visionary.” It made sense that people believed her vision when so many powerful people and institutions said she was the next Steve Jobs.

“When I was introduced to Elizabeth by [former Secretary of State] George Shultz, her plan sounded like an undergraduate’s dream. I told her she had only two prospects: total failure or vast success. There would be no middle ground,” Henry Kissinger wrote in the TIME 100 blurb about Holmes. “Elizabeth accepted only one option: making a difference.”

Kissinger went on to call Holmes a “formidable advocate” who was “on the verge of achieving her vision.” But already, a level of uncertainty bubbled around Theranos. “Others will judge the technical aspects of Theranos, but the social implications are vast,” Kissinger wrote in the final line of the blurb.

Holmes was surrounded by hype — investors like George Shultz treated her like another grandchild. So when his grandson Tyler Shultz, who worked at Theranos, told him that he suspected Holmes was lying about the efficacy of Theranos’ technology, the senior Shultz didn’t believe him.

“Elizabeth is a very, very charismatic person,” Tyler Shultz said to CBS News this week. “When she speaks to you, she makes you feel like you are the most important person in her world in that moment. She almost has this reality distortion field around her that people can just get sucked into.”

Isolation and abuse

Tyler Shultz became the first whistleblower for Theranos, but at great personal and financial cost — in his audio-memoir “Thicker than Water,” he discussed being threatened by high-profile lawyers like David Boies and being followed by private investigators. But Shultz told a brief, yet poignant anecdote in his memoir about attending family dinners with his grandfather, who always invited Holmes and even hosted her thirtieth birthday party.

“There was a weird situation where my parents kept telling [Holmes] to invite her parents, and they just kind of assumed that she did, and then my grandparents were talking to Elizabeth’s parents on the phone, and Elizabeth’s parents were completely unaware she was having a thirtieth birthday party, so it didn’t seem she was very close with her parents at all,” Shultz recalled. Throughout the trial, Holmes was usually seen clutching her mom’s hand — but per Shultz’s memory, they weren’t all that close at the time of her crimes.

Shultz goes on to describe the attendees of her birthday party: He says that he and Holmes’ brother were the only people under 30, and the next youngest person was Theranos COO Sunny Balwani, who was almost 50 — he met Holmes when she was 18 and he was 37. They dated in secret for more than 10 years, unbeknownst to most Theranos employees and investors. Holmes moved in with Balwani in 2005, soon after she dropped out of Stanford.

“He impacted everything about who I was and I don’t fully understand that,” Holmes testified.

Holmes tearfully explained in court that Balwani sexually and emotionally abused her throughout their relationship. She said that he controlled what she ate, when she slept and how she behaved.

“He told me that I didn’t know what I was doing in business, that my convictions were wrong, that he was astonished by my mediocrity, and that if I followed my instincts I was going to fail,” Holmes said on the stand.

Her defense submitted as evidence two documents that showed how Holmes was being controlled by Balwani: one was a schedule of her daily routine, while another set instructions for how she behaved. These guidelines would help her “become a new Elizabeth,” Holmes said Balwani told her. One “non-negotiable” in her instructions declared that she would never meet with anyone — especially direct reports — for longer than five minutes unless she had written down a clear agenda for the meeting. According to the documents, her lifestyle was monastic: waking up at 4 A.M., praying, mediating, exercising, only eating certain foods and never doing anything for recreation.

Holmes’ schedule became a bit of a meme, with some journalists even trying out her schedule for clicks — but the reality is much darker than that. It may be difficult to take Holmes’ account of abuse seriously, since she’s famously a liar and was just convicted of criminal fraud — but these documents, if legitimate, show a woman whose every action was being controlled by an older partner and business associate.

“He said I needed to spend all of my time on the business, and that I should only be spending time with people who could help the business to be successful, that I needed to be working seven days a week, and I needed to be only doing things that could contribute to making the company successful,” Holmes testified.

In this context, Shultz’s account of Holmes thirtieth birthday party makes more sense. She was so committed to building Theranos that she didn’t seem to have any friends or hobbies, nor did she communicate enough with her parents to invite them to her birthday party.

“Sunny would get very upset if I was with my family, because he said it was a distraction to the business,” Holmes said in trial. Her defense referenced a text from Balwani from Thanksgiving weekend in 2013, which said: “When ur family is here, I feel lonely bcz u spend a total of 10 seconds with me a day.”

Maybe if Holmes had friends to confide in, someone would have told her that she was going too far by stretching the truth with investors, or that it wasn’t a good idea to deliver unreliable blood test results to patients, even if her boyfriend-slash-COO said to do so. But by design, there was no one for the single-minded entrepreneur to talk to.

Founders need community

This is not to exonerate Holmes of her crimes. It can be true that she was abused by a controlling, manipulative, older partner, yet it can simultaneously be true that she committed fraud. Plus, even though she was not convicted of defrauding patients, her lies caused significant distress to Theranos customers who were given alarmingly false blood test results.

We talk a lot about what the tech industry learned from Theranos, but we gloss over something so simple: Startup founders need to have a life outside of their job.

We valorize founders like Elizabeth Holmes who are so dedicated to their vision that they will make huge sacrifices, abandoning their social lives to build their companies. But this isolating form of hustle culture doesn’t usually breed success — it breeds burnout at best, and millions of dollars of criminal fraud at worst.

If you’re a startup founder, you’re probably not the next Elizabeth Holmes. But if you just do normal things like, I don’t know, see a gosh darn movie with some friends (COVID permitting), maybe you’ll spare yourself from making some short-sighted mistakes.

Source: Tech

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Dashworks is a search engine for your company’s sprawling internal knowledge

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As a company grows, the amount of important information employees need to keep track of inevitably grows right along with it. And, as your tech stack gets more complicated, that information ends up split up across more places — buried in Slack threads, tucked into Jira tickets, pushed as files on Dropbox, etc.

Dashworks is a startup aiming to be the go-to place for all of that internal knowledge. Part landing page and part search engine, it hooks into dozens of different enterprise services and gives you one hub to find what you need.

On the landing page front, Dashworks is built to be your work laptop’s homepage. It’s got support for broadcasting company wide announcements, building out FAQs, and sharing bookmarks for the things you often need and can never find — your handbooks, your OKRs, your org charts, etc.

More impressive, though, is its cross-tool search. With backgrounds in natural language processing at companies like Facebook and Cresta, co-founders Prasad Kawthekar and Praty Sharma are building a tool that allow you to ask Dashworks questions and have them answered from the knowledge it’s gathered across all of those aforementioned Slack threads, or Jira tickets, or Dropbox files. It’ll give you a search results page of relevant files across the services you’ve hooked in — but if it thinks it knows the answer to your question, it’ll just bubble that answer right to the top of the page, Google Snippets style.

Image Credits: Dashworks

Right now Dashworks can hook into over 30 different popular services, including Airtable, Asana, Confluence, Dropbox, Gmail, Google Drive, Intercom, Jira, Notion, Slack, Salesforce, Trello, and a whole bunch more — with more on the way, prioritized by demand.

Giving another company access to all of those services and the knowledge within might be unsettling — something the Dashworks team seems quite aware of. Kawthekar tells me that their product is SOC-2 certified, that all respective data is wiped from their servers if you choose to disconnect a service, and that, for teams that are equipped to host the tool themselves, they offer a fully on-prem version.

This week Dashworks is announcing that it raised a $4M round led by Point72 ventures, backed by South Park Commons, Combine Fund, Garuda Ventures, GOAT Capital, Unpopular Ventures, and Starling Ventures. Also backing the round is a number of angels, including Twitch co-founder Emmett Shear and Gusto co-founders Josh Reeves and Tomer London. The company was also a part of Y Combinator’s W20 class.

Image Credits: Dashworks

Source: Tech

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Daily Crunch: Google will offer G Suite legacy edition users a ‘no-cost option’

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To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PST, subscribe here.

Hello and welcome to Daily Crunch for January 28, 2022! It’s nearly blizzard o’clock where I am, so please enjoy the following newsletter as my final missive before hunkering down. In happier and better news, TechCrunch Early Stage is coming up in just a few months and not only am I hype about it, I’ll hopefully be there IRL. See you soon! – Alex

The TechCrunch Top 3

  • Google invests up to $1B in Airtel: With a $700 million investment and $300 million in “multi-year commercial agreements” with Airtel, and Indian telco, Google has made its second major bet on Indian infra. Recall that Google also put money into Jio, another Indian telco. The deal underscores the importance of the country in the future of technology revenues.
  • What’s ahead for Europe: On the heels of news that European startups had an outsized 2021 when it came to fundraising, TechCrunch explored what’s ahead for the continent. Some expect a slowdown from peak activity, while others anticipate further acceleration. Regardless of which perspective you favor, European venture investment is expected to remain elevated for some time to come.
  • Zapp raises $200M: And speaking of European startups, Zapp, the U.K.-based quick-convenience delivery startup, just raised a massive Series B. The company previously raised $100 million, meaning that this round was big in absolute and comparative terms. As we see some consolidation in the fast-delivery space, this deal caught our eye.

Startups/VC

  • Are charter cities the future for African tech growth? TechCrunch’s Tage Kene-Okafor has a great piece up on the site noting that “African cities have the fastest global urban growth rate,” which is leading to overcrowding. Some folks think that “charter cities offer a solution.” Special economic zones of all types have been tried before – will they offer African tech a faster route forward?
  • Personalized learning is hot: Our in-house edtech expert Natasah Mascarenhas has a great piece out today on personalized learning startups – Learnfully, Wayfinder, Empowerly, and others – that are taking the lessons of remote schooling to heart and working to make products that work better for our kids. It’s an encouraging, fascinating story.
  • Rise wants to remake team calendaring: There is no shortage of apps in the market to help individuals and teams work together. But we might not need as many as we have. That’s why Rise is making me think. The team calendaring app just raised a few million, and could replace a few tools that myself and friends use. I wonder if the solution to the Tool Overload of 2022 is tools that do less, intentionally.
  • Canvas wants non-tech folks to be able to squeeze answers from data: Developers are in short supply, so no-code tools that allow folks who don’t sling code to do their own building are blowing up. Similarly, a general dearth of data science talent in the market is creating space for tools like Canvas, which “is going all in with a spreadsheet-like interface for non-technical teams to access the information they need without bothering data teams,” TechCrunch reports.
  • Zigbang buys Samsung IoT business: The IoT promises of yesteryear are coming true, and not. Samsara recently went public on the back of its IoT business. That was a win for the category. That Zigbang, a South Korean proptech startup, is buying Samsung’s IoT unit feels slightly less bullish.
  • Series F-tw? Once upon a time I would have mocked a Series F as indication that the company in question had failed to go public. But that was then. Today Series Fs are not that rare. Indian B2B marketplace Moglix just raised one, which doubled its valuation to $2.6 billion. Tiger co-led the $250 million round.

And if you are looking down the barrel of a blizzard, TechCrunch’s Equity podcast has your downtime covered. Enjoy!

European, North American edtech startups see funding triple in 2021

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

Pre-pandemic, VCs were notoriously reluctant to invest in education-related companies. Today, edtech startups are seeing higher average deal sizes, more seed and pre-seed funding from non-VC investors, and an influx of generalists.

According to Rhys Spence, head of research at Brighteye Ventures, funding for edtech startups based in Europe and North America trebled over the last year.

“Exciting companies are spawning across geographies and verticals, and even generalist investors are building conviction that the sector is capable of producing the same kind of outsized returns generated in fintech, healthtech and other sectors,” writes Spence.

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

  • Northern Light Venture Capital’s He Huang says the Chinese robotics market is overheated: Per the investor, robotics in China is “riddled with speculation and overvalued companies,” calling the situation a bubble. It’s worth noting that China’s central government is working to retool where its tech investment dollars flow.
  • Robinhood goes down, back up: This morning, in the wake of the company’s lackluster earnings report, TechCrunch dug through why Robinhood’s stock sold off in after-hours, pre-market, and early trading sessions yesterday and today. And then Robinhood turned around and gained ample ground during the rest of the day. It’s a weird market moment, but good news for the U.S. fintech all the same.
  • Google to allow legacy G Suite users to move to free accounts: After angering techies still using the “G Suite legacy free edition” by announcing that it was ending the program and requiring payment, the search giant has decided to ”offer more options to existing users,” TechCrunch reports. Somewhere inside of Google, a business decision just met the market and was flipped on its head. Makes you wonder who is calling the shots over there, and if they previously worked for McKinsey.

TechCrunch Experts

Image Credits: SEAN GLADWELL / Getty Images

TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

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3 experiments for early-stage founders seeking product-market fit

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At Human Ventures, we have a fund for pre-seed and seed-stage investments, a venture studio and an Entrepreneur in Residence (EIR) program.

Through this work, we’ve discovered a lot about how different founders fulfill their journey of customer discovery and product-market fit. One of the largest challenges for pre-seed and seed stage founders is determining where to start: There are a million things to do. What should you do at each stage?

We interviewed three founders from our portfolio, all of whom ran discovery experiments to find their product-market fit at different stages of their company’s development.

Here’s what they had to share:

Pre-MVP/customer discovery phase: Tiny Organics

Tiny Organics is a plant-based baby and toddler food company on a mission to shape childrens’ palates so they’ll choose and love vegetables from their earliest days. The company raised $11 million in their Series A in 2021 and is growing at over 500% annually.

Founders Sofia Laurell and Betsy Fore joined our venture studio as EIRs and went through a six-week discovery sprint. As Sofia explains, they knew they wanted to build something to make parents’ lives easier and threw a lot of initial ideas at the wall from the Finnish baby box 2.0 (Sofia is Finnish) to an easier way to create Instagrammable baby pictures.

They went through multiple exercises to test the viability of new parents’ most pressing and urgent needs:

  • Conduct a “Start with Why” exercise
  • Define the “Jobs to be Done”
  • Create a lean canvas for each (viable) concept
  • Define the user journeys
  • Conduct user surveys using platforms like pollfish.com and 1Q (instant survey tool)
  • Identify and define their customer personas
  • Conduct customer interviews and synthesize them
  • Construct concept prototypes

They also met prospective customers, conducting a focus group of 10-15 moms. When the founders asked them to text them what they were feeding their children along with pictures for a week, they realized the lack of healthy finger foods in the market, thus sparking the idea for Tiny Organics.

Source: Tech

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