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TechCrunch+ roundup: 2022 VC predictions, how to hook an angel, product advisory councils
Well-researched personas are useful, but nothing is better than talking to a customer if you want to understand what delights them — and what they’re willing to pay for.
I’ve worked at early-stage startups where we relied on our best guesses to shape product pipelines and develop marketing strategies.
I have also held jobs at companies where we engaged directly with current and past customers to ask them what they wanted. You can probably guess which approach generated more favorable outcomes.
Whether it’s done informally via a Reddit AMA or a Twitter Space, it’s never a bad idea to interact with people who use your products and services.
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Well-researched personas are useful, but nothing is better than talking to a customer if you want to understand what delights them — and what they’re willing to pay for.
With a product advisory council (PAC), early-stage startups can tap into the their users’ hive mind. The benefits are many: PACs can help validate everything from marketing campaigns to future product planning.
But to build one, founders must first define clear goals and create value for participants. In this seven-step guide, you’ll find strategies and tactics for identifying key members and influencers, streamlining the communication process, and creating “a little FOMO.”
Thanks very much for reading TechCrunch+ this week. I hope you have a relaxing weekend!
Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist
Why Microsoft’s $2T+ market cap makes its $68B Activision buy a cheap bet
Risk is an essential part of gambling, so it may be improper to describe Microsoft’s planned purchase of Activision Blizzard as a “bet.”
Considering that Microsoft has a market cap over $2 trillion, purchasing a gaming company that pumps out titles like Call of Duty, Guitar Hero and Candy Crush for $68 billion isn’t exactly fraught with danger.
According to Box CEO Aaron Levie, the move solidifies Redmond’s entry into AR/VR gaming.
“If you believe VR and immersive computing is the future — whether for consumer or business use cases — Activision helps Microsoft build a flywheel of content and technology that gets more users on board to this future.”
500 Global’s Christine Tsai shares her 2022 VC predictions
2021 was a year like no other when it came to venture investment, and this year is poised to tread a similar path, writes 500 Global’s CEO and co-founder, Christine Tsai.
According to Tsai, 2022 will see web3 going mainstream, more capital flowing to underestimated founders, and broader investments in regions that have traditionally been overlooked.
“All signs point to a continued abundance of opportunities for startup founders and investors in the year ahead.”
Will quantum computing remain the domain of the specialist VC?
Quantum computing’s potential applications include machine learning and computer-aided drug design, but the industry is still very much in its early days.
In 2021, there were approximately 90 quantum investments that totaled $1.4 billion. A significant jump from $700 million the year before, but compared to SaaS, not even a drop in the bucket.
Even so, we’re already seeing quantum exits: IonQ reached a $2 billion valuation after its 2021 SPAC, and Rigetti plans to do the same this year as it develops its superconducting quantum computer.
In a comprehensive market map of the quantum computing industry, Maria Lepskaya, a senior associate at Runa Capital, sorted the top companies in the space into 12 quadrants, “each corresponding to particular quantum technology and a stage of startups.”
Dear Sophie: How do I successfully expand my company to the US?
Dear Sophie,
I’m an entrepreneur in Guatemala and would like to come to the United States to expand my tech company.
What is the best way to do that?
— Groundbreaking Guatemalan
5 areas where VCs can play an outsized role in addressing climate change
Climate tech startups raised $32 billion in 2021, but that amount is nowhere close to the estimated $2.5-$4.8 trillion required to fund enough adaptation and mitigation projects to make a meaningful difference.
Private investors can’t fill the gap alone, but VCs are in a unique position to change this dynamic.
By backing climate startups, they can de-risk proven climate tech, build legitimacy to attract talent, help with scaling, attract new kinds of investors, and shape the overall ecosystem, write investor Jamil Wyne and climate finance researcher Abrar Chaudhury.
“While most VC verticals will be assessed in terms of how much they return to investors, climate tech may be unique in that its success will also be determined, essentially, by its contribution to the preservation of our livelihoods and how much it can avoid a winner-take-all dynamic.”
Inside Secfi’s 2021 state of stock options equity report
It’s great to have a stake in the company you’re helping to build, but when employees don’t know the optimal way to exercise their stock options, they usually end up with a raw deal.
Last year, startup employees paid an estimated $11 billion in avoidable taxes by exercising their options post-exit, rather than pre-exit, according to Secfi data.
In a post for TechCrunch+, CEO Frederik Mijnhardt shared his analysis of the biggest trends around stock options in 2021, including why, despite stellar IPOs, most employees couldn’t exercise their options until after the exit, dramatically increasing their tax liability.
“Looking ahead to 2022, it seems that the industry’s current trend toward mega-sized rounds of funding and longer exit timelines mean that for the average startup employee, their total cost to exercise stock options will continue to rise,” says Mijnhardt.
If you want startup funding, don’t make VCs feel ignorant
It’s important to ask potential investors questions, but first-time founders often alienate VCs by quizzing them about the breadth and depth of their knowledge.
The trick, according to Prashant Fonseka, a partner at Tuesday Capital: only ask easy questions.
“Save the challenging questions for a time when you’re selecting from multiple investors who are ready to write checks after you’ve convinced them your company is fundable.”
The berserk pace of fintech investing outshines the global VC boom
From Buy Now, Pay Later to open banking and social finance, fintech has scaled rapidly since the pandemic began. Investment has kept pace with growth: last year, fintech accounted for more than 20% of all venture investments.
In a deeply researched post, Mary Ann Azevedo and Alex Wilhelm examine how fintech overtook and outperformed every other sector to the point where its outlines mirror that of the broader venture market.
“To some degree, it appears that what is true for the venture capital market is also true for the fintech market, but in a more exaggerated form. Fintech is like most venture, but simply more extreme.”
Changes to corporate investing rules could diminish China’s resilient venture landscape
China has a mature venture investment ecosystem, but recent interventions by the country’s government to rein in the tech sector have left many wondering whether startup investment in the country may suffer permanently.
In The Exchange, Alex Wilhelm makes the case that the country’s venture market will take a hit — but not a lethal one.
“There are lots of non-corporate investors in China who are still active. So long as they persist, the numbers will not collapse,” writes Alex.
“But potential new regulatory rules regarding major tech companies could prove to be a material knock to the country’s venture scene.”
5 essential factors for attracting angel investment
In a guest post by Marjorie Radlo-Zandi, the veteran angel investor shared five key elements she considers before investing.
Her advice is clear and simple, which makes it particularly valuable in an environment where startup funding is flowing faster than ever.
Few investors expect a first-time founder’s pitch deck to be the most definitive analysis of a particular sector, but you’re better off being cautious instead of overly optimistic.
“An extraordinarily high projection signals you’re not altogether credible, and I advise you to avoid this mistake at all costs,” says Radlo-Zandi.
There’s never been a better time to found a startup, but you can’t catch pennies from VC heaven if there are holes in your story.
NFT volume, DAOs and the curious case of LooksRare
NFT marketplace OpenSea largely had the field to itself, but after competitor LooksRare announced an airdrop for its $LOOKS token last week, it overtook OpenSea in trading volume.
“Let’s talk about incentives and governance tokens to parse out what’s up with LooksRare and the larger future of the financialization of everything,” wrote Alex Wilhelm in The Exchange.
LG and the hunt for the next-gen corporate incubator
South Korean conglomerate LG produces everything from flat-screen TVs to soft drinks, so the idea that it would set up a startup incubator program isn’t a huge leap.
To learn more about the initiative, Haje Jan Kamps interviewed Sokwoo Rhee, LG’s corporate SVP and head of its North America Innovation Center.
“When I say new businesses, that can mean a lot of different things,” said Rhee. “We are willing to create a new business unit if the idea, suggestions and partnership hit a home run.”
Fintech and insurtech innovation in Brazil set to take off on regulatory tailwinds
A substantial portion of Brazil’s population remains underbanked, but instant payment system Pix processed more than 8 billion transactions last year.
Launched by Brazil’s central bank in November 2020, Pix is already used by 60% of the population.
To better understand how shifting regulations and increased adoption are impacting LatAm fintech startups, Anna Heim spoke to:
- Amy Cheetham, partner, Costanoa Ventures
- Javier Santiso, founder and general partner, Alma Mundi Ventures
- Rodrigo Teijeiro, CEO, RecargaPay
- Pedro Sônego de Oliveira, CEO TruePay
Government
Chinese migration to US is nothing new – but the reasons for recent surge at Southern border are
A gloomier economic outlook in China and tightening state control have combined with the influence of social media in encouraging migration.
The brief closure of the Darien Gap – a perilous 66-mile jungle journey linking South American and Central America – in February 2024 temporarily halted one of the Western Hemisphere’s busiest migration routes. It also highlighted its importance to a small but growing group of people that depend on that pass to make it to the U.S.: Chinese migrants.
While a record 2.5 million migrants were detained at the United States’ southwestern land border in 2023, only about 37,000 were from China.
I’m a scholar of migration and China. What I find most remarkable in these figures is the speed with which the number of Chinese migrants is growing. Nearly 10 times as many Chinese migrants crossed the southern border in 2023 as in 2022. In December 2023 alone, U.S. Border Patrol officials reported encounters with about 6,000 Chinese migrants, in contrast to the 900 they reported a year earlier in December 2022.
The dramatic uptick is the result of a confluence of factors that range from a slowing Chinese economy and tightening political control by President Xi Jinping to the easy access to online information on Chinese social media about how to make the trip.
Middle-class migrants
Journalists reporting from the border have generalized that Chinese migrants come largely from the self-employed middle class. They are not rich enough to use education or work opportunities as a means of entry, but they can afford to fly across the world.
According to a report from Reuters, in many cases those attempting to make the crossing are small-business owners who saw irreparable damage to their primary or sole source of income due to China’s “zero COVID” policies. The migrants are women, men and, in some cases, children accompanying parents from all over China.
Chinese nationals have long made the journey to the United States seeking economic opportunity or political freedom. Based on recent media interviews with migrants coming by way of South America and the U.S.’s southern border, the increase in numbers seems driven by two factors.
First, the most common path for immigration for Chinese nationals is through a student visa or H1-B visa for skilled workers. But travel restrictions during the early months of the pandemic temporarily stalled migration from China. Immigrant visas are out of reach for many Chinese nationals without family or vocation-based preferences, and tourist visas require a personal interview with a U.S. consulate to gauge the likelihood of the traveler returning to China.
Social media tutorials
Second, with the legal routes for immigration difficult to follow, social media accounts have outlined alternatives for Chinese who feel an urgent need to emigrate. Accounts on Douyin, the TikTok clone available in mainland China, document locations open for visa-free travel by Chinese passport holders. On TikTok itself, migrants could find information on where to cross the border, as well as information about transportation and smugglers, commonly known as “snakeheads,” who are experienced with bringing migrants on the journey north.
With virtual private networks, immigrants can also gather information from U.S. apps such as X, YouTube, Facebook and other sites that are otherwise blocked by Chinese censors.
Inspired by social media posts that both offer practical guides and celebrate the journey, thousands of Chinese migrants have been flying to Ecuador, which allows visa-free travel for Chinese citizens, and then making their way over land to the U.S.-Mexican border.
This journey involves trekking through the Darien Gap, which despite its notoriety as a dangerous crossing has become an increasingly common route for migrants from Venezuela, Colombia and all over the world.
In addition to information about crossing the Darien Gap, these social media posts highlight the best places to cross the border. This has led to a large share of Chinese asylum seekers following the same path to Mexico’s Baja California to cross the border near San Diego.
Chinese migration to US is nothing new
The rapid increase in numbers and the ease of accessing information via social media on their smartphones are new innovations. But there is a longer history of Chinese migration to the U.S. over the southern border – and at the hands of smugglers.
From 1882 to 1943, the United States banned all immigration by male Chinese laborers and most Chinese women. A combination of economic competition and racist concerns about Chinese culture and assimilability ensured that the Chinese would be the first ethnic group to enter the United States illegally.
With legal options for arrival eliminated, some Chinese migrants took advantage of the relative ease of movement between the U.S. and Mexico during those years. While some migrants adopted Mexican names and spoke enough Spanish to pass as migrant workers, others used borrowed identities or paperwork from Chinese people with a right of entry, like U.S.-born citizens. Similarly to what we are seeing today, it was middle- and working-class Chinese who more frequently turned to illegal means. Those with money and education were able to circumvent the law by arriving as students or members of the merchant class, both exceptions to the exclusion law.
Though these Chinese exclusion laws officially ended in 1943, restrictions on migration from Asia continued until Congress revised U.S. immigration law in the Hart-Celler Act in 1965. New priorities for immigrant visas that stressed vocational skills as well as family reunification, alongside then Chinese leader Deng Xiaoping’s policies of “reform and opening,” helped many Chinese migrants make their way legally to the U.S. in the 1980s and 1990s.
Even after the restrictive immigration laws ended, Chinese migrants without the education or family connections often needed for U.S. visas continued to take dangerous routes with the help of “snakeheads.”
One notorious incident occurred in 1993, when a ship called the Golden Venture ran aground near New York, resulting in the drowning deaths of 10 Chinese migrants and the arrest and conviction of the snakeheads attempting to smuggle hundreds of Chinese migrants into the United States.
Existing tensions
Though there is plenty of precedent for Chinese migrants arriving without documentation, Chinese asylum seekers have better odds of success than many of the other migrants making the dangerous journey north.
An estimated 55% of Chinese asylum seekers are successful in making their claims, often citing political oppression and lack of religious freedom in China as motivations. By contrast, only 29% of Venezuelans seeking asylum in the U.S. have their claim granted, and the number is even lower for Colombians, at 19%.
The new halt on the migratory highway from the south has affected thousands of new migrants seeking refuge in the U.S. But the mix of push factors from their home country and encouragement on social media means that Chinese migrants will continue to seek routes to America.
And with both migration and the perceived threat from China likely to be features of the upcoming U.S. election, there is a risk that increased Chinese migration could become politicized, leaning further into existing tensions between Washington and Beijing.
Meredith Oyen does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
congress pandemic deaths south america mexico chinaGovernment
Is the National Guard a solution to school violence?
School board members in one Massachusetts district have called for the National Guard to address student misbehavior. Does their request have merit? A…
Every now and then, an elected official will suggest bringing in the National Guard to deal with violence that seems out of control.
A city council member in Washington suggested doing so in 2023 to combat the city’s rising violence. So did a Pennsylvania representative concerned about violence in Philadelphia in 2022.
In February 2024, officials in Massachusetts requested the National Guard be deployed to a more unexpected location – to a high school.
Brockton High School has been struggling with student fights, drug use and disrespect toward staff. One school staffer said she was trampled by a crowd rushing to see a fight. Many teachers call in sick to work each day, leaving the school understaffed.
As a researcher who studies school discipline, I know Brockton’s situation is part of a national trend of principals and teachers who have been struggling to deal with perceived increases in student misbehavior since the pandemic.
A review of how the National Guard has been deployed to schools in the past shows the guard can provide service to schools in cases of exceptional need. Yet, doing so does not always end well.
How have schools used the National Guard before?
In 1957, the National Guard blocked nine Black students’ attempts to desegregate Central High School in Little Rock, Arkansas. While the governor claimed this was for safety, the National Guard effectively delayed desegregation of the school – as did the mobs of white individuals outside. Ironically, weeks later, the National Guard and the U.S. Army would enforce integration and the safety of the “Little Rock Nine” on orders from President Dwight Eisenhower.
One of the most tragic cases of the National Guard in an educational setting came in 1970 at Kent State University. The National Guard was brought to campus to respond to protests over American involvement in the Vietnam War. The guardsmen fatally shot four students.
In 2012, then-Sen. Barbara Boxer, a Democrat from California, proposed funding to use the National Guard to provide school security in the wake of the Sandy Hook school shooting. The bill was not passed.
More recently, the National Guard filled teacher shortages in New Mexico’s K-12 schools during the quarantines and sickness of the pandemic. While the idea did not catch on nationally, teachers and school personnel in New Mexico generally reported positive experiences.
Can the National Guard address school discipline?
The National Guard’s mission includes responding to domestic emergencies. Members of the guard are part-time service members who maintain civilian lives. Some are students themselves in colleges and universities. Does this mission and training position the National Guard to respond to incidents of student misbehavior and school violence?
On the one hand, New Mexico’s pandemic experience shows the National Guard could be a stopgap to staffing shortages in unusual circumstances. Similarly, the guards’ eventual role in ensuring student safety during school desegregation in Arkansas demonstrates their potential to address exceptional cases in schools, such as racially motivated mob violence. And, of course, many schools have had military personnel teaching and mentoring through Junior ROTC programs for years.
Those seeking to bring the National Guard to Brockton High School have made similar arguments. They note that staffing shortages have contributed to behavior problems.
One school board member stated: “I know that the first thought that comes to mind when you hear ‘National Guard’ is uniform and arms, and that’s not the case. They’re people like us. They’re educated. They’re trained, and we just need their assistance right now. … We need more staff to support our staff and help the students learn (and) have a safe environment.”
Yet, there are reasons to question whether calls for the National Guard are the best way to address school misconduct and behavior. First, the National Guard is a temporary measure that does little to address the underlying causes of student misbehavior and school violence.
Research has shown that students benefit from effective teaching, meaningful and sustained relationships with school personnel and positive school environments. Such educative and supportive environments have been linked to safer schools. National Guard members are not trained as educators or counselors and, as a temporary measure, would not remain in the school to establish durable relationships with students.
What is more, a military presence – particularly if uniformed or armed – may make students feel less welcome at school or escalate situations.
Schools have already seen an increase in militarization. For example, school police departments have gone so far as to acquire grenade launchers and mine-resistant armored vehicles.
Research has found that school police make students more likely to be suspended and to be arrested. Similarly, while a National Guard presence may address misbehavior temporarily, their presence could similarly result in students experiencing punitive or exclusionary responses to behavior.
Students deserve a solution other than the guard
School violence and disruptions are serious problems that can harm students. Unfortunately, schools and educators have increasingly viewed student misbehavior as a problem to be dealt with through suspensions and police involvement.
A number of people – from the NAACP to the local mayor and other members of the school board – have criticized Brockton’s request for the National Guard. Governor Maura Healey has said she will not deploy the guard to the school.
However, the case of Brockton High School points to real needs. Educators there, like in other schools nationally, are facing a tough situation and perceive a lack of support and resources.
Many schools need more teachers and staff. Students need access to mentors and counselors. With these resources, schools can better ensure educators are able to do their jobs without military intervention.
F. Chris Curran has received funding from the US Department of Justice, the Bureau of Justice Assistance, and the American Civil Liberties Union for work on school safety and discipline.
army governor pandemic mexicoInternational
Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”
Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"
Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…
Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86.
So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip.
Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...
Thousands of people have been asking if I'd run for Senate leadership...
— Rand Paul (@RandPaul) March 8, 2024
...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each.
????????️VOTE NOW ????️ ???? Who would you like to be the next Senate leader?
— Rand Paul (@RandPaul) March 8, 2024
Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse.
I would support Rand Paul and suspect that other candidates will not actually run polls out of concern for the results, but let’s see if they will!
— Elon Musk (@elonmusk) March 8, 2024
Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:
This bill is an insult to the American people. The earmarks are all the wasteful spending that you could ever hope to see, and it should be defeated. Read more: https://t.co/Jt8K5iucA4 pic.twitter.com/I5okd4QgDg
— Senator Rand Paul (@SenRandPaul) March 8, 2024
In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”
Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act.
Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."
Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support:
Mitch McConnell, who has served in the Senate for almost 40 years, announced he'll step down this November.
— Robert F. Kennedy Jr (@RobertKennedyJr) February 28, 2024
Part of public service is about knowing when to usher in a new generation. It’s time to promote leaders in Washington, DC who won’t kowtow to the military contractors or…
In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience.
That may be his strongest endorsement yet.
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