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From What I've Read This Week...


Weekly Newsletter of what I've read and thought was interesting. I am a Venture Partner at Contrary Capital. Read more at karthiksuresh.me

Issue #12 - July 16, 2018

Week of the Electric Scooters
NEWS:
Uber has invested in Lime Bike. Uber is slowly building their brand in all modes of transportation. They acquired JUMP bikes and now they have partnered with Lime. It will be interesting to see how Bird, the biggest competitor to Lime, will fare.
Important to note: Bird and Lyft have a bad relationship, so the Uber-Lime partnership hurts Lyft as well as now they has to find another large scooter company to team up with (maybe Motivate...).

Netflix now has more Emmy nominations than HBO. For the past couple years, HBO has been focusing on quality over quantity and that has led to a higher number of shows nominated at the Emmy's. Netflix, on the other hand, has been dumping money and trying to focus on both quality and quantity.
The result: Netflix has been gaining data on what you watch, how you watch, and when you watch (info HBO can't compete with) and has been creating shows that tailor to that. Not to mention Netflix spent roughly 6x more than HBO on creating shows this year.

Broadcom just bought a software and services company, CA Technologies. As a large chip manufacturer, Broadcom surprised investors by buying CA Technologies, an IT management software and solutions provider.Their stock took a huge hit as investors were confused as to why Broadcom was suddenly trying to diversify its position, especially after they had tried to further their dominance in the chip manufacturing industry with plans to buy Qualcomm last month.

Twitter is removing millions of fake users. Twitter estimates that their total user base will only drop by 6% after they remove all suspicious accounts. Curious to see what the total number of accounts removed will be.

Alphabet is turning 2 of its projects, Loon and Wing, into official companies. Loon is focused on using large weather balloons to bring internet access to people around the world while Wing is tackling delivery drone systems. I'd image Google's AR and free-space optics projects are next in line to become full-fledged projects.


Startups:
Startup Paidly just raised $55M in its Series C. Paidly allows customers and businesses to create transactions without using cash or credit card. Instead they use an ML based algorithm that allows customers to pay transactions at the end of the month. This is especially useful in places like Japan where credit card use is not as commonplace as cash and can help combat credit card fraud. I would like to see how Paidly integrates itself in countries where credit card use is already widespread.

Goodwall just raised $10.8M in its Series A. Goodwall is essentially a cross between Linkedin and a job board for high school/college students with little to no work experience. This seems like there could be a potential M&A with Linkedin, AngelList, Glassdoor, etc. if they are able to prove there is a large enough market without competition from college job boards.

The Nudge just raised half a million in its pre-Seed round. The Nudge is an SMS based planning app. What caught my attention is that they have 10,000 weekly active users and their main users are active millennial women (70%). This app fits in nicely with the growing market of health/wellness apps like Headspace, Strava, and Calm. I am excited to see how their next 2 years look like.


Interesting Reads:
Analyzing discrimination in Taxis vs. Ride-sharing apps. A recent UCLA study analyzed rider wait time and driver cancellation requests across different races, ethnicities, and genders in LA for Taxi, Uber, and Lyft rides. The study found that discrimination in the taxi industry resulted in higher cancellation rates and longer wait times for black riders. When looking at ride-sharing apps like Uber and Lyft, discrimination still occurred, black riders were 4x more likely to be cancelled on than white riders, however, 99.7% of all riders were still able to reach their final destination.
Key Point: While discrimination and driver biases are still present in both taxi and ride-sharing services that may result in a trip delay, riders are never denied mobility when using ride-sharing apps. 
I would like to see some follow-up data on ride-sharing in low-income neighborhoods and if barriers such as data plans, lower smartphones, and overall cost of ride-share vs. informal carpool affects Uber/Lyft usage. (I think the first company to capitalize on this market, where there is naturally fewer means of transport available, will be the big player in the market.)

How ride-sharing is affecting traditional car sales (pg. 53).

Good op-ed on how to decide where to start looking for your target market. Although I would argue that if you want your startup to truly be successful, you would need your business model to be location-agnostic.
     
     
 
Cool Image of the week:
 
I smell a VC bubble...
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