Reuben's Blog: July 2020

Friday 31 July 2020

The leading arguments for a Microsoft-TikTok tie-up

Here they are, ranked by how much weight we put behind them:

Delightree raises $3M to help franchise business owners simplify their operations

Owning one brick-and-mortar business seems complicated enough. But running multiple locations? For many owners, that’s a constant juggling act of phone calls, check lists and driving back and forth from store to store. In the middle of a pandemic, it gets all the more complex.

Delightree, a company out of the previous Alchemist Accelerator class, has raised $3 million to build a tool hyper-focused on helping owners of franchise businesses (think hotels, gyms, restaurant chains, etc.) take their operations and workflows digital.

A big part of the idea with Delightree is to move much of what currently happens through pen-and-paper checklists over to smartphones, allowing franchise owners to know what’s going at their locations from afar. They digitize workflows like the daily store opening/closing procedures or maintenance routines, with employees checking boxes on their devices rather than a paper to-do list. If something gets missed along the way, Delightree can automatically ping the owner to let them know before it becomes an issue.

They’ll also help to automate and track things like onboarding new employees and staying prepared for inspections, while giving owners a centralized place to make team-wide announcements or contact employees.

Delightree evolved out of a previous company built by its co-founders, Madhulika Mukherjee and Tushar Mishra. They’d been working on Survaider, a tool that monitored customer feedback across social media, review sites, etc., and turned that feedback into actionable to-do lists.

“When we were piloting it, our customers started saying: ‘can we create our own tasks? Or can I tell something to my employees through this?’ ” Mishra told me. “It was just such an obvious problem, so we started building Delightree.”

Delightree co-founders Tushar Mishra and Madhulika Mukherjee

The team has also been working on a feature they call Delightcomply, which helps stores stay up to date on the latest CDC guidelines for businesses operating through the pandemic, and to automatically share compliance details with potential customers. A business could use Delightcomply to publicly outline the steps it’s taking to keep employees/customers safe, for example, with the listing automatically updated to show the status of each task.

Delightree is currently working directly with each new customer to help them through the initial setup — specifically, to help franchisees take the standard operating procedures they receive directly from the brand owners and turn them into Delightree workflows. They’re still working out their exact pricing model, but say that they charge on a per-location-per-month basis, with pricing varying depending on the size/complexity of the business. They’ve set up a waitlist for anyone interested.

This $3 million seed round was funded by Accel Partners, Emergent Ventures, Brainstorm Ventures, Axilor Ventures and Alchemist. As part of the deal, Emergent partner Anupam Rastogi has joined Delightree’s board of directors.

Big tech goes to Congress remotely

This week, the CEOs of Facebook, Apple, Alphabet and Amazon were called before the House’s Antitrust Subcommittee to defend the vast empires they’ve built. Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg faced questions about how their business practices propelled them into the market-dominant giants they are today. They lead four of the top six most valuable public companies in existence and are widely regarded as reshaping the consumer world, both within the tech industry and beyond. Watch TechCrunch reporters Taylor Hatmaker, Devin Coldewey and Alex Wilhelm discuss what happened during the hearing and what this might mean for the future of big tech.

Mammoth Biosciences’s CRISPR-based COVID-19 test receives NIH funding through RADx program

CRISPR tech startup Mammoth Biosciences is among the companies that revealed backing from the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics (RADx) program on Friday. Mammoth received a contract to scale up its CRISPR-based SARS-CoV-2 diagnostic test in order to help address the testing shortages across the U.S.

Mammoth’s CRISPR-based approach could potentially offer a significant solution to current testing bottlenecks, because it’s a very different kind of test when compared to existing methods based on PCR technology. The startup has also enlisted the help of pharma giant GSK to develop and produce a new COVID-19 testing solution, which will be a handheld, disposable test that can offer results in as little as 20 minutes, on site.

While that test is still in development, the RADx funding received through this funding will be used to scale manufacturing of the company’s DETECTR platform for distribution and use in commercial laboratory settings. This will still offer a “multi-fold increase in testing capacity,” the company says, even though it’s a lab-based solution instead of a point-of-care test like the one it’s seeking to create with GSK.

Already, UCSF has received an Emergency Use Authorization (EUA) from the FDA to use the DETECTR reagent set to test for the presence of SARS-CoV-2, and the startup hopes to be able to extend similar testing capacity to other labs across the U.S.

MarTech Insider Anand Thaker: Marketing Not Aimed at Building Real Relationships with Customers? Cut It.

When the country initially shut down in March due to the COVID-19 outbreak, overnight many companies cut their marketing budgets and activities to zero. Many of those dollars and organizational efforts went to helping customers and communities deal with the pandemic. And many of those efforts are still going on, and the impact of these efforts have been essential to helping people and small businesses make it through this difficult time. And another result of these efforts is to more meaningfully connect companies with their customers and surrounding communities, which has created the opportunity for these deeper relationships to be in place long after the pandemic has run its course.

It appears that companies may be learning that traditional marketing models that are more transactional in nature might be less effective in the Post Covid-19 world where relationships may matter more.

Interview with Anand Thaker on COVID-19 Changing Marketing Strategy

And recently I had an interesting LinkedIn Live conversation with marketing technology (MarTech) industry expert Anand Thaker to get his take on how COVID may be changing how companies look at marketing, and what role technology will need to play in order for those Post Covid marketing efforts to be successful.

Below is an edited transcript of a portion of our conversation. To hear the entire conversation click on the embedded SoundCloud player.

smallbiztrends · MarTech Insider Anand Thaker:

Small Business Trends: CRM thought leader Jesus Hoyos was recently on CRM Playaz and he made a point about how marketing automation technology previous to COVID was broken because there is not single point of communication with customers today, and the tech was built with that in mind. And the pandemic has made the situation even worse. What are you seeing with marketing during the pandemic, and the roll martech is playing?

Anand Thaker: Technology only magnifies who we are. If we’re bad at what we’re doing, guess what? We’re going to use the technology or misuse it and vice versa. I think what he was talking about with regards to one email address, really resonated with me because there’s another problem, especially in the B2B space, where it’s not only just one person with one email for one person, but then you also have one assumed decision maker per company. In a B2B capacity, if you had five different people at a particular company and they all downloaded your white paper or did different things to end up in your CRM database or marketing automation database, how do you rectify that? That’s one of the biggest challenges behind the scenes that people didn’t really talk about, and probably one of the main reasons that marketing operations became an incredibly thriving profession, is how do you resolve these types of things?

This is part of the reason I think we should probably start looking at databases that connect these different places. I think a lot of people have heard, especially listening in, about customer database or customer data platforms, CDPs. One of the benefits of that is you’re really trying to get a full, what we used to call the 360 view of the customer. This is the opportunity for a brand to own the customer and the customer experience starting from, again having clean data. Part of the reason we don’t have clean data is not necessarily through laziness or challenges with the experience of trying to ingest that data in from third parties, but it’s also we find a big challenge in having that data spread … I mean, we have challenges in terms of data being in the different technologies. How do we centralize that information when we actually need to do it?

This could lead to a conversation on privacy and AI. Let’s say your stack of technologies related to the customers, 18 to 30, some odd pieces of technology, how do you even respect the customer’s wishes on their privacy, or how do you apply AI in a grander scope of things that would help you navigate what that really respects?

Small Business Trends: The foundation of how we built our customer engagement is spread out. It’s disparate. It’s kind of hard to bring it all together. It’s kind of hard to make sense of whatever the interactions are because they’re coming in from all over the place. Maybe there’s a technology problem, but let’s take the technology problem out of it. There’s still a big issue with a lot of companies, because they’re looking at things from their perspective. They’re looking at how do we get people to buy more stuff and not necessarily looking at it from the customer’s perspective.

Let’s face it. They can have the greatest technology, they can have the greatest platform, they can have all the data coming in, they can have their AI running and finding all these great insights, and if they don’t deliver those insights in a meaningful way, in a way that will be empathetic and will connect the dots to the customer, all that stuff is for naught.

Anand Thaker: Yep.

Small Business Trends: I think that’s where we are. To take it one step further. I’ve talked to a number of companies, and there are a lot of folks who just cut the spigot off when it came to doing any kind of marketing, ad campaigns, marketing campaigns, cut it off completely just because of the uncertainty in the environment. The interesting thing about that is not that they did it, because everybody was kind of scared. You’re starting to see some life coming back to that, but I’ve been having some really interesting conversations, I’m not going to say who, but there are vendors who said, “Yeah, we cut it out, and guess what? We’re doing all right. We are not going to be going back to what we were doing before. We’re not going to be spending that money the way we were spending it before.”

I have a suspicion that the few companies I talked to, they are just representative of what I think is going to be happening on the other side of the pandemic. It seems to me that there’s a movement from a lot of these companies who spent a lot of money and did a lot of this programmatic stuff. They might not be coming back to spend anywhere near what they spent on those activities before COVID-19. Are you hearing anything like that?

Anand Thaker: Yeah, absolutely. We’re seeing it on a couple of fronts. COVID shook a lot of things up. The old models don’t support a lot of those purposeful missions moving forward. Let me roll back a little bit because on the front of talking about programmatic advertising and what that means, in terms of businesses actually cutting off marketing, or just cutting out marketing or cutting out advertising, I think there’s a lot of opportunity to just do things, regardless of whether it’s the highest performing, because you’ve got to do them. You’ve got the spend, you’re going to budget. That’s what everybody else is doing. You have the fear of missing out. “Oh my gosh, if I saw it … ”

Think about it like billboards or TV ads, or let’s say Superbowl commercials. People have this fear of missing out because, “Oh man, my competitor did a Superbowl commercial, therefore we should strive to do something similar.” Well, we don’t live in that kind of world today. There’s not a limited channel of ways to engage with a customer anymore. Those things start to change. Many companies that I’ve talked to or have heard from or learn about as I hear about, they try to take one channel and think that’s the silver bullet rather than trying to diversify into a portfolio. One of the things I’ve been striving for, I’ve been working intensely with companies for the last eight, nine months now trying to navigate them through the COVID or some of those crisis situations.

One of the first things is marketing, yes or no? That’s not the right question to ask. That correct question is, is the marketing efforts or spend that you have, are they engaged in building a relationship with a customer? If it’s not part of the journey or if they’re not responsible for the entire journey back into the business operations of the company, then yeah, maybe need to consider cutting it, because it’s an expensive spend and you’re basically competing … You’re selling against yourself. You spend a dollar, someone spends 105, then you got to spend 110, then they spend more and then you have to spend more, but if your marketing spend is basically driven on developing a deeper relationship, meaning you are training your staff, frontline staff perhaps, at a retail store, on developing better experiences, or you’re working on the digital journey for how people buy, or trying to come up with different ways to help your customers make a decision, or help them, say, like in a fintech world, like you have some sort of financial services option, you’re trying to help them be better financial … financially savvy.

If you’re doing those types of things and the customer feels like you’re helping them through that, whether they buy from you or not, they become those advocates. That’s the part where you can elevate across your other competitors by sitting there and focusing on it. A lot of people say that, but they’re not talking about … They’re talking about limited to the digital spend, but there’s a lot of pieces beyond the digital ad. I think that’s what a lot of companies are doing, Brent, is they’re looking at the grand scope of things and saying, “Wow. Really, ads aren’t bringing the conversion rates we’re looking for, or perhaps aren’t giving us the awareness that we’re really hoping for,” but I think a lot of that will change over time and everyone will evolve. I’m always a believer that people and companies will evolve because either they need to, or they go away.

Small Business Trends: But the whole idea of empathy …

Anand Thaker: That’s right.

Small Business Trends: What I’ve noticed, the programmatic stuff, there is absolutely no empathy involved. That’s just pure, we know data, we know where you’ve been and we’re going to follow you and hound you wherever you go on the web. You see popups and it’s just ridiculous and it makes you not want to buy anything. There’s zero … I mean, they did a lot of work on the analytics. They did a lot of data aggregation. They’ve been looking at the insight, knowing where you’re going to go. That’s great.

Anand Thaker: Right.

Small Business Trends: Zero empathy in the actual activity and the action. I think that is driving people crazy. That’s why I think you’re seeing folks, because in the pandemic, the thing that you need most is empathy in order to show folks, like you said, that they care and that you’re creating an interaction that is based off of not just data, but it’s based off of data and delivered in an empathetic way that lets people understand that you care.

Anand Thaker: Right.

Small Business Trends: That’s where I think there’s an opportunity for a shift in some of this budget away from just pure programmatic, pure analytics, pure re-target, and to have to do a little bit more work, which requires you to really understand, not just know where you’re going or know where they’re going, but to understand why, and then to create an interaction opportunity that takes that into consideration so that you don’t spend all your time and effort and money on pure analytics and understanding without being able to deliver that understanding in an empathetic way.

Anand Thaker: I agree. The reason I tend to hesitate using empathy in some of these conversations is because we don’t define that well. I think that’s one of the problems is we don’t say what it is that we’re doing to be empathetic. For example, I mean, you’re training your frontline staff to be your team members to better serve their customers, or you’re trying to find an easier way for people to pay for their merchandise online, or you’re trying to understand how to elevate someone’s profession. I mean, I think if you’re going to use the word empathy, then you need to say exactly what you’re trying to accomplish, at least one thing that’s more specific than just saying, “Oh yeah, we’re going to be empathetic.”

That’s the kind of crap that gets all these companies in trouble is they go find a lot of these empathy consultants and then guess what they’re asking you to do too? There’s a lot of good ones out there and you know what they’re going to tell you? They’re going to say, “What are you doing that makes you empathetic or more empathetic than someone else?” Empathy is a magic word, but until you actually define what that is for your company specifically, actionable, like what those actionable steps will look like or what’s the goal look like, you’re not going to get anywhere. We’ve seen some matters come up where people are like, “Oh, well you just changed your logo and put out like a press release and you think you’re done,” and it’s not. You have to do more than that to make that magic happen.

Small Business Trends: Yeah, but here’s the thing. They have resources.

Anand Thaker: Right.

Small Business Trends: I don’t want to make light of the amount of effort and finances that it takes to identify where your customers are engaging and integrate into those channels and get that data in and analyze that data and understand that data and try to find insights that will impact at that time, at the right time. That’s a ton of work. That’s a ton of money and it takes a ton of effort, but why go through all that and then fumble when you actually go to address that person if you haven’t spent a little time, a little effort? It doesn’t have to be a 50/50 split here, but it does have to have … You have to spend some time not only understanding, but then, how do we best communicate our understanding? How do we best communicate that insight so that when we do interact with somebody, they’re more likely to understand where we’re coming from and that we’re on their side and we’re trying to deliver some value for them at the time they need it? That’s all I’m saying.

Anand Thaker: Yeah. A measurable way to look at that, this is just back of the napkin kind of thing, is look at retention. How many people are you keeping as customers, if you’re in this subscription-based world? How many people are advocates of yours, like active advocates, not just liking something on one of the social media platforms? I’m talking about they are out there selling on your behalf. They’re proud to be part of your company as a result of things.

Then the third piece would be, how easy has it been to recruit? If a company is doing a great job of having empathy and it’s being well demonstrated, you’ll see people come in that want to work for you. Maybe it’s a little skewed today because COVID is going to cause a lot of shuffle in terms of talent opportunities and opportunities for jobs just period, but still, I mean, how many of the best talent is coming your way, as opposed to you having to pull them in and try to recruit them at the highest price possible because you’re struggling in some capacity? Think about it from a recruiting standpoint, an advocate standpoint and a retention standpoint. Those will give you clues about how well your empathy is working.

This article, "MarTech Insider Anand Thaker: Marketing Not Aimed at Building Real Relationships with Customers? Cut It." was first published on Small Business Trends

Cisco acquires Modcam to make Meraki smart camera portfolio even smarter

As the Internet of Things, proliferates, security cameras are getting smarter. Today, these devices have machine learning capability that help the camera automatically identify what it’s looking at — for instance an animal or a human intruder? Today, Cisco announced that it’s acquired Swedish startup Modcam and making it part of its Meraki smart camera portfolio with the goal of incorporating Modcam computer vision technology into its portfolio.

The companies did not reveal the purchase price, but Cisco tells us that the acquisition has closed.

In a blog post announcing the deal, Cisco Meraki’s Chris Stori says Modcam is going to up Meraki’s machine learning game, while giving it some key engineering talent, as well.

“In acquiring Modcam, Cisco is investing in a team of highly talented engineers who bring a wealth of expertise in machine learning, computer vision and cloud-managed cameras. Modcam has developed a solution that enables cameras to become even smarter,” he wrote.

What he means is that today, while Meraki has smart cameras that include motion detection and machine learning capabilities, this is limited to single camera operation. What Modcam brings is the added ability to gather information and apply machine learning across multiple cameras, greatly enhancing the camera’s capabilities.

“With Modcam’s technology, this micro-level information can be stitched together, enabling multiple cameras to provide a macro-level view of the real world,” Stori wrote. In practice, as an example, that could provide a more complete view of space availability for facilities management teams, an especially important scenario as businesses try to find safer ways to open during the pandemic. The other scenario Modcam was selling was giving a more complete picture of what was happening on the factory floor.

All of Modcams employees, which Cisco described only as “a small team” have joined Cisco, and the Modcam technology will be folded into the Meraki product line, and will no longer be offered as a stand-alone product, a Cisco spokesperson told TechCrunch.

Modcam was founded in 2013 and has raised $7.6 million, according to Crunchbase data. Cisco acquired Meraki back in 2012 for $1.2 billion.

Cisco Acquires Enterprise Wi-Fi Startup Meraki For $1.2 Billion In Cash

Fiverr Introduces Promoted Gigs for Freelancers to Advertise Services

Promoted Gigs

Business has slowed down across the board because of the pandemic, but this doesn’t mean there aren’t new opportunities. Promoted Gigs from Fiverr looks to give freelancers the ability to advertise their services on its marketplace. The goal is to help boost the earnings of freelancers and grow their business.

Fiverr says it is improving the eCommerce experience for freelancers with this advertising service just as they help small businesses around the world improve their operations and grow their company. Best of all Fiverr says it only takes a few clicks to get you going. And during the beta test earlier this year both sellers and buyers have experienced the benefits.

Fiverr Promoted Gigs

The Founder and CEO of Fiverr, Micha Kaufman, explains the opportunity Promoted Gigs is providing in the press release. Kaufman says this new service will allow freelancers to invest and grow their online business. Adding, “Promoted Gigs is a fantastic way for high quality, talented and motivated freelancers to stand out, earn more and build a stronger business on Fiverr.”

The new service allows sellers to bid and win prime locations on the Fiverr platform. This is made possible through an auction and pay-per-click mechanism.

Advertising on Fiverr

With 830,000 sellers since inception and more than 200 digital service categories across 160+ countries, finding the right person can get time-consuming.

When a buyer gets on Fiverr, the sheer number of freelancers can be overwhelming. Even after you use the filter there are still many people you have to go through. With Promoted Gigs things can get much easier for you. Sifting through the ads from freelancers can give you a quick look at a possible match for your particular needs.

Using Promoted Gigs

As a seller, Fiverr suggests promoting your best performing gigs. This means showcasing gigs with top reviews so you can increase your chances of converting visitors to orders. High-quality gigs with engaging descriptions and extra services are a great start.

Once you have your ad ready to go it is time to set the price you are willing to pay for the ad. Set the maximum amount you are willing to pay per click on your ad and the Fiverr auction system will take care of the rest. Remember, your chance of winning your ad spot goes up the higher you set the price.

When the ad is in place the system will calculate the minimum amount per click you need to pay so you can win against your competitors. Fiverr will recommend a price to bid, but if you want you can bid above or below that number. According to Fiverr, you only pay for clicks and you will never pay more than the maximum.

When it comes time to pay for your ad, you can do so with the balance you have in your Fiverr account. There is no upfront payment because the system can’t charge you without any activity. The charge is retroactive each month based on the ads’ activity of the previous month.

With a winning bid, the ad for the gig will appear at the top of the category pages or search results. This is where buyers searching for a particular subject are looking.

Last but not least, you can control the activity of your campaign on a single dashboard by viewing, tracking and managing your ads.

Available Categories

Fiver says at launch Promoted Gigs is not going to be available across the 200+ categories it provides.

As of now, there are 15 categories, but there will be more in the future. If you are a seller on Fiverr, here are the categories available now:

Voice Over
Illustration
Logo Design
Proofreading & Editing
Whiteboard & Animated Explainers
WordPress
Social Media Marketing
Articles & Blog Posts
Web & Mobile Design
Photoshop Editing
Architecture & Interior Design
Web Programming
E-commerce Development
Mobile Apps
Book & eBook Writing

Criteria for Freelancers

In order to get an invitation to promote their gig, freelancers have to meet certain criteria and quality standards.

Get in touch with Fiverr for more.

Image: fiverr.com

This article, "Fiverr Introduces Promoted Gigs for Freelancers to Advertise Services" was first published on Small Business Trends

Working to understand Affirm’s reported IPO pricing hopes

News broke last night that Affirm, a well-known fintech unicorn, could approach the public markets at a valuation of $5 to $10 billion. The Wall Street Journal, which broke the news, said that Affirm could begin trading this year and that its IPO options include debuting via a special purpose acquisition company, also known as a SPAC.

That Affirm is considering listing is not a surprise. The company is around eight years old and has raised north of $1 billion, meaning it has locked up investor cash during its life as a private company. And liquidity has become an increasingly attractive possibility in 2020, when new offerings of all quality levels are enjoying strong reception from investors and traders who are hungry for equity in growing companies.

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

But $10 billion? That price tag is a multiple of what Affirm was worth last year when it added $300 million to its coffer at a post-money price of $2.9 billion. There were rumors that the firm was hunting a far larger round later in 2019, though it doesn’t appear — per PitchBook records — that Affirm raised more capital since its Series F.

This morning let’s chat about the company’s possible IPO valuation. The Journal noted the strong public performance of Afterpay as a possible cognate for Affirm — the Australian buy-now, pay-later firm saw its value dip to $8.01 per share inside the last year before soaring to around $68 today. But given the firm’s reporting cycle, it’s a hard company to use as a comp.

Happily, we have another option to lean on that is domestically listed, meaning it has more regular and recent financial disclosures. So let’s how learn much revenue it takes to earn an eleven-figure valuation on the public markets by offering consumers credit.

Affirm’s business

Affirm loans consumers funds at the point of sale that are repaid on a schedule at a certain cost of capital. Affirm customers can select different repayment periods, raising or lowering their regular payments, and total interest cost.

Synchrony offers similar installment loans to consumers, along with other forms of capital access, including privately-branded credit cards. (Verizon, TechCrunch’s parent company, recent offered a card with the company, I should note.) Synchrony is worth $13.5 billion as of this morning, making it a company of similar-ish value compared to the top end of the possible Affirm valuation range.

Recruiting for diversity in VC

Dan Miller Contributor

Dan is a Partner at True Search where he leads the firm's Investment Professional practice, having worked with many top VC & PE firms in their senior hiring efforts.

Job description: Great comes in many forms

The most common reason I see for hiring processes leading to a slate with primarily white male candidates is because the criteria my client views as required almost completely precludes the possibility that the candidate slate will be diverse.

Taken as a given that women and minority men are not well-represented at senior levels in VC, any job spec that asks for a candidate to have seven to 10 years of experience in the industry, or a large number of board seats or investments led, will mean that the pool of “qualified” candidates will consist of mostly white men. This has historically been referred to as the “pipeline problem” and it’s an increasingly well-studied concept that academic literature is beginning to point to as a bias that pushes the onus of hiring minorities away from the hiring manager and on to the candidate pool. Even for firms that remain committed to hiring underrepresented groups without making adjustments to their criteria, the result is a zero-sum game where proven minority investors rotate from firm to firm, and an outcome that does not increase diversity in the industry as a whole.

VC firms seeking to improve their diversity have to recognize that great comes in many forms. By crafting broader specs and really thinking about the qualifications for their investing roles, a whole new talent pool opens up. To see that new pool of talent though, firms must first determine what characteristics are relevant to the role, and avoid tenure (or other tenure stand-ins) as the main criteria. VC investing is as much an art as a science; firms should decide what personal traits make somebody strong in their organization and why. How would a different viewpoint be additive to sourcing or diligence discussions?

Firms then need to commit to interviewing for those traits and perspectives, and assessing candidates along those same lines. One VC firm I worked with interviewed dozens of candidates before they realized that their process focused too much on financial acumen and not enough on the other factors they felt would make somebody a strong venture capitalist, resulting in a final slate of safe, “qualified,” and mostly nonminority candidates.

We reworked our process, and theirs, to interview for different criteria moving forward. We asked about overcoming hardships and about risks taken, and we got a sense for what type of impact that person made in whatever organization they came from rather than just asking about deals and transactions. It should be no surprise that the candidates with noninvesting backgrounds are performing much better in the process now, and the value they’d add to the organization more clear, even though the interviewers and the roles are the same.

Affinity bias: Go beyond what’s familiar

A broad spec and a team committed to hiring diverse talent, and interviewing appropriately, are great starting points. But then there is much more to do. Affinity bias is a well-known phenomenon that many investors are likely aware of, but it is pernicious in hiring settings and can be a serious challenge to overcome. Affinity bias in hiring is when a person or group of people prefer a candidate who looks, talks, acts or has a similar background to them.

In the case of hiring candidates with diverse backgrounds, affinity bias may be the tallest hurdle. In VC, the job is in many ways to seek common ground with the people you talk to. Good VCs are relationship builders — with entrepreneurs, other VCs and strong executives they want to recruit into their portfolio companies. But most investors are white people from affluent communities who attended elite universities and have worked at top-tier banks or consulting firms. In some cases there may have been a stint at another top-tier institution, be it a technology company or another investment firm.

White men are more likely to have these backgrounds. In a hiring process, white male VCs will naturally find ways to connect with candidates with similar backgrounds (i.e., other white men), in contrast to candidates with none of those same experiences, even when the candidates with other backgrounds are equally qualified for the role.

Affinity bias can be very subtle. It is human nature to feel the conversation was easier with somebody who in many ways has led the same life you did. It can feel somewhat logical even: The critique of the nonwhite or nonmale candidate is never as obvious as “They didn’t go to Stanford” or “They don’t belong to my country club.” Rather, it is often expressed as something softer and subjective — a seldom-articulated criteria of cultural fit. “Our culture is different from the place they work” is the most common. “I’m not sure they have the drive” is another, or “They don’t have an X-factor.” Now, these critiques can be completely legitimate.

A candidate may indeed be a bad fit for the culture of the firm because, for example, their prior employer was a gigantic corporate machine reliant on extraneous processes and they are interviewing for a role at a small entrepreneurial organization. But sometimes, particularly when interviewing candidates from different backgrounds, culture fit is a mask for affinity bias, and VCs (like all interviewers) need to be conscious of this tendency.

Look in the right networks

Investment firms almost always try to make a hire through their own network before leading a full search, and even before posting a job as being open anywhere online. This has become such an ingrained behavior that it is often discussed as a best practice. Unfortunately, “hiring through our network” almost certainly means the slate of candidates that a firm considers at the outset is going to be heavily nondiverse. Unless a firm (or to broaden this guidance, an organization) is already diverse across multiple vectors, then beginning a search by canvasing the firm’s own network is highly unlikely to yield a “diverse” candidate. This seems innocuous but it can actually be harmful to the odds that the firm ever hires a candidate from an underrepresented group. Why? There is another bias at work, the status quo bias.

Studies have shown that people tend to make choices that favor the status quo. Creating a balanced slate of choices is critical to avoid disfavoring minority candidates inadvertently. One study showed that having multiple women or Black candidates on a finalist slate increased the odds that the selected would be a minority by 70x-100x. But if a group of interviewers meets five white men through their networks before they meet anybody else, it is going to take an disproportionate number of underrepresented minority candidates to overcome the group’s bias toward hiring the “status quo” of the white men they met at the outset of the search.

At True Search, we recently audited one of our own searches to look for candidate-selected markers of their identity. We compared our pool of candidates to the NVCA diversity data from 2018. Compared to the industry averages, our pool of candidates was half as white and twice as female as the industry at large. I am not sharing that data as an advertisement for True Search, and in fact we strive to do more and are working on multiple programs to increase our networks with diverse candidate pools. The point is, when a VC firm uses a search firm or any outside consultant for a search, the pool of candidates is going to be much more diverse than if that VC firm simply calls up the people in their network, who probably are not all that diverse.

Focus on inclusion

A commitment to hiring more talent with underrepresented backgrounds is great; actually doing it is even better. Many studies have shown that diversity improves the performance of a team, but the onus is on the organization to foster an environment where those viewpoints are appreciated. In my discussions with VCs who are minorities, they point out that once they are in the door of the firm they still face challenges that white male colleagues don’t.

They are less likely to have mentors who share their backgrounds, and investing is largely an apprenticeship business. If they did not come from Stanford or Harvard, they are less likely to see deals that come through the sorts of personal networks that the firm is likely accustomed to seeing. If they came from a noninvesting background, they may be taken less seriously when presenting investment ideas to the team of career investors. A firm has to support diversity of thought once it is in the door, or the contributions of those team members may be unappreciated.

Firms can do many things to foster strong talent from diverse backgrounds once they are in the organization. Minority investors have shared some great ideas with me as I was thinking through this article, so these suggestions aren’t just my own. Underrepresented groups have historically (in the short history of such groups having any significant representation in the investing world) formed mentorship networks that transcend the walls of a given firm, such as Latinx VC, BLCK VC and All Raise.

VC firms should build as much connectivity with those sort of networks as possible. This will not only increase the odds that a firm will see more candidates from underrepresented groups, but it will also mean that the firm can play a role in finding strong mentors for their diverse talent throughout their career. Those networks can be built through small individual actions like attending and sponsoring events, or sharing job postings in the firm and portfolio with those networks.

VC firms can also help to jump-start a hire’s network in venture. Imagine a scenario where a firm hires a noninvestor with a unique yet amazing background into an investing role. Their peers all went to Stanford or worked at Facebook and are sourcing their deals through those personal networks. VC firms can use their resources to help close that network gap, such as by setting aside small pools of capital for a seed fund to be deployed by new investors with diverse backgrounds, thereby giving them a boost in early network building. I’ve seen firms deploy this strategy as a way to keep tabs on high potential operators, or on partner-level candidates they want to get to know more before they commit to hiring full-time.

Firms can help train junior talent and better prepare them for future full-time roles in venture by running intern or analyst programs and emphasizing the hiring of underrepresented groups into those roles. Even a part-time gig in VC will give a candidate a leg up in future interview processes, and even if that person goes off to another firm for a full-time role, the network back to that person will remain and could be helpful as a source of (or mentor to) the diverse talent the firm hires in the future.

Opportunities (and challenges) in church tech

Will Robbins Contributor

Will Robbins is an early-stage investor at Contrary.

Less religion, more spirituality

Yes, Americans are going to church less often, but that doesn’t mean they’re not staying spiritual. In fact, the percentage of Americans identifying as “spiritual but not religious” has grown faster than any other group in this Pew survey on religiosity. This fact is reflected in other data. For example, the percentage of Americans that pray daily or weekly has stayed fairly flat even as overall religiosity declined. This opens up two distinct opportunities, as well as two challenges.

Opportunities:

What tools do the growing “spiritual but not religious” crowd need?
Churches are realizing they need to innovate or die. What tools do they need to reach out to their members and gain new congregants?

Challenges:

Two demographics: young, tech-savvy and more willing to try a new product, but less involved in church tradition versus older, not as tech-savvy and harder to reach.
Very byzantine market: as documented in part one of this series, the market is dominated by small companies waging a turf war with one another. In addition, because churches are so local and hard to sell to, all of the companies to date have been smaller land-grabs rather than anything with scale or accumulating advantage.

Rapidly growing startups in the space are deftly navigating this landscape and taking advantage of these trends.

Last day for early bird savings to Disrupt 2020

It’s officially now o’clock startup fans. All good things come to an end, and today’s the last day you can score an early bird pass to Disrupt 2020. Don’t miss your chance to save up to $300 and get busy building your business at our global Disrupt event. Buy your pass before the deal — and the savings — expires at exactly 11:59 p.m. (PT) tonight.

Disrupt 2020 takes place September 14-18. It’s packed with non-stop programming and gives you five full days to explore — expand your knowledge, your network, your opportunities and your business.

We’ve added a new event this year: The Pitch Deck Teardown. Expert VCs and entrepreneurs will assess pitch decks submitted by registered Disrupt attendees, note red flags and offer constructive advice on how to improve this essential startup tool. We’ll hold multiple sessions over the course of Disrupt, so if you’re a registered Disrupt attendee, submit your pitch deck for consideration.

That’s just one of many exciting ways attending Disrupt can help your early-stage startup survive and thrive. Exploring the hundreds of early-stage startups exhibiting in Digital Startup Alley is a great place to start. Connect with founders around the world, increase your brand recognition, discover people and technologies that can augment your business.

“The top three benefits of going to Disrupt were introducing my product to people who would not have seen it otherwise; networking with investors, mentors, advisors and potential customers and, finally, talking to other entrepreneurs and founders and learning what it took to get their companies off the ground.” — Felicia Jackson, inventor and founder of CPRWrap.

Remember, you have five days to experience Disrupt, so don’t miss the impressive lineup of speakers who span the startup universe. You’ll hear the latest thinking from top tech, investment and business icons, leaders, movers, shakers and makers. We’ve also announced the agenda here and we’re adding more to the roster every week.

Okay, let’s review. What time is it? It’s NOW o’clock — time to register for Disrupt 2020, save up to $300 and do whatever it takes to drive your business forward. Buy your pass before the early bird deal expires at 11:59 p.m. (PT) tonight!

Is your company interested in sponsoring or exhibiting at Disrupt 2020? ContTime is running out to save up to $300 on Disrupt 2020 passes. Get yours now!act our sponsorship sales team by filling out this form.

The iron rule of founder compensation is dead

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

We had the full team this week: Myself, Danny, and Natasha on the mics, with Chris running skipper as always.

Sadly this week we had to kick off with a correction as I am 1. Dumb, and, 2. See point one. But after we got past SPAC nuances (shoutout David Ethridge), we had a full show of good stuff, including:

Y Combinator Demo Day is going virtual, as before, and its coming iteration will also be live. The Equity crew all agree that this is the right thing to do, and probably more fun to boot. And now the founders can sweat a live event, too! What fun.
Speaking of live events going digital, Disrupt is coming up. And it is going to be great. Read more here.
A group of Stanford business school students are putting together and investment vehicle to invest money into themselves, which is a good idea and something that is highly risible. Luckily, Danny and Natasha had good things to say about the effort.
Ro raised $200 million, and any jokes that were inappropriate are Danny’s fault. The company’s $200 million valuation makes the news that its competitor Hims could go public via a SPAC all the more exciting.
I covered a neat round: $20 million for Instrumental, a super neat startup that has me hype.
Facebook is still hunting up ways to get a better look into growing startups — this time via investments in venture capital funds.
And, finally, there were some hearings this week, you might have heard. We’re working on something neat that you are going to love on just that topic, so stay tuned.

And that’s Equity for this week. We are back Monday morning early, so make sure you are keeping tabs on our socials. Hugs, talk soon!

Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

In the News – Nearly Every Small Business Reinvented Itself During Pandemic

reinvent your business

The pandemic created myriad challenges for businesses of all sizes, but especially small businesses.

On the day many were told they had to close their doors and either cease operations or do business another way, it created a challenge many hadn’t faced before. But if there’s one thing we all know, it’s that small businesses are ready for just about any challenge, including a global pandemic.

And a new survey from GetApp proves that. The company found that nearly all small businesses – an astounding 92% – have reinvented themselves and made changes to their operations to keep going.

These changes may have been forced by the situations caused by the pandemic but may become the norm going forward, for the better.

To learn more about how small businesses reinvented themselves during this challenging time, check out our story on the GetApp survey: 92% of US Small Businesses Have “Reinvented” Themselves During Pandemic.

For the rest of the week’s big news for small business, check out our weekly news roundup below.

Small Business News Roundup – July 31, 2020

Walmart Open Call 2020 Deadline is August 10

Could your product or products be sold from store shelves in Walmart? You’ll never know until you try. Submissions to Walmart’s Open Call are due by August 10. The company annually hosts Open Call, a search for new and innovative products to sell in its stores. Hundreds apply and hundreds benefit.

NetBlaze Launches Digital Marketing App

The most important element of managing a small business is one that can fall through the cracks. Marketing. Small business owners need a many-pegged rack to hold all their hats. Hiring employees, stocking supplies, tracking monies in and out, paying utilities and oh yeah, marketing. Marketing is an important aspect of small business management.

Currnt Helping B2B Marketers Make Informed Decisions from a Distance

Currnt is looking to help B2B marketers sort through COVID 19. The on-demand marketing intelligence startup provides a virtual market research toolkit. And they recently launched SmartGroups, a virtual focus group tool. Small Business Trends contacted Tom O’Malley, founder and CEO of Currnt, to learn more. He described how the network of service delivery partners works.

Teespring Sees Monumental Growth – Good News for Creatives

Teespring, has announced that it has registered a compounded growth of 97% during the second quarter of 2020. The social commerce platform has attributed the staggering growth to a large-scale pivot towards eCommerce activities during the pandemic. The company has benefited as it continues to see 2,400 creators signing on the platform every day. This is a growth of 2013% for the company.

Bartering Helping Cash-Strapped Businesses Survive Pandemic

During economic downturns, such as high unemployment and cash shortages, bartering is always a go-to solution. This is what BizX is seeing during the economic hardship businesses are facing brought on by the pandemic. According to BizX, its platform is emerging as an important tool for businesses so they can keep their cash reserves.

New UPS Store Survey Shows How Small Businesses are Pivoting

UPS’ Inside Small Business Survey reveals 41% of small business owners have pivoted their business in the wake of COVID-19. The survey of more than 330 entrepreneurs, reveals how small businesses have adapted and became resilient. As some businesses ground to halt others have looked for opportunities among the challenges and soldiered on.

45% of People Working from Home Feel More Productive

As far as disruptions go, how we work has been completely upended by COVID-19. With more people working from home, the fact that 44.9% say they feel more productive is good news for businesses. Another 20.6% say they don’t see a change in productivity, leaving 34.5% who say they are more productive in the office. The data comes from a detailed survey and report from SellCell.

Some – Not Many – Small Business Owners Believe Things Will Never Return to Normal

An increasing number of small business owners are saying their businesses won’t return to normal. As of May, this year more than 50% of interviewees noted their pessimism over fears of a resurgence of COVID-19. According to a report by LendingTree the level of pessimism in the business community varies from city to city.

LiveChat Adds Text Messaging to Customer Service Platform

LiveChat has launched a new feature that enables businesses to use text messaging to communicate with customers. LiveChat are specialists in online customer service software. The company recently partnered with Twilio and launched the integration of the LiveChat application with the Twilio platform.

What Gen Z Really Wants at Work — It’s Not What You Think

Your younger employees want more than just fun, recognition, and good work-life balance at the workplace. According to the latest survey from Zippia, the most desired benefits of Gen Z (ages 18-25) are health insurance, remote work, and 401k/retirement benefits. Surprisingly, employees of all ages desired these benefits most.

Kabbage Checking Gives Small Businesses Flexibility With Full Features

Kabbage has announced the launch of its new checking account solution targeting small businesses. The new offering provides small businesses access to digital banking services including electronic wallets, free ATM access and bill payments. According to Kabbage, these are the same capabilities, convenience and security businesses can expect with a traditional checking account.

How Work from Home is Pushing the Boundaries of Privacy Again

With more people working from home, business and personal lives are getting merged more than ever. This trend is also pushing the boundaries of what level of privacy can be expected by employees and consumers in this new work environment.

Small Business Employees Returning to Work – But with Fewer Hours and Lower Pay

Small business employees are returning to work. But there’s a caveat. They’re coming back with fewer hours and less pay for now.

GatherUp Helps Businesses Gather Google Review Info

Customers put a high value on online reviews of business products and services. Businesses should also sit up and take notice. Now that’s a lot easier. GatherUp has launched a service called Google Review Attributes Monitoring. A business owner could call it a reputation management solution.

Image: Depositphotos.com

This article, "In the News – Nearly Every Small Business Reinvented Itself During Pandemic" was first published on Small Business Trends