Dropbox snares HelloSign for $230mm gets workflow and e-signature (link)
- Vision in innovating Dropbox beyond pure content storage
HelloSign provides lightweight document workflow and e-signature services. Dropbox paid $230mm - Accordingly to Crunchbase generated ~4mm in revenue (year undefined, probably 2017?); Even considering 5x growth, Dropbox is paying nearly 10x Revenue multiple for this business
- Price suggests that there were almost certainly other highly motivated bidders for the deal
- Vision is to bring more seamless document workflows to more customers. Dropbox Extensions to enhance the ability to build workflows and integrations with third-party partners
- I.e. If you need to sign a contract stored in Dropbox, send it to various parties for signature and the signed documents gets returned to Dropbox automatically once all the signatures have been collected
- Person who initiated the process gets notification process is complete
Home Fitness – Tonal, Mirror, Peloton
- Tonal
- Strength-training system powered by electromagnetism resistance technology and ML (uses electromagnetism to simulate and control weight i.e. dynamically / digitally controlled weight)
- Same fee structure as all others – $49 / month for personal fitness instructor. TV mount is $2,995 ($$$)
- Mirror
- $1500, with $39 / month subscription
- Wall mount, classes playing in background. Technology seems less innovative (no ML, biometrics tracked with existing add-on technologies i.e. Apple watch)
- Peloton
- Cycling, now treadmill. Same price point ($2000) perhaps next move is creating something for more senior users?
- Some cannibalization with Soulcycle (link)
How tariffs have impacted robotics (link)
- Tariffs are regressive and place a higher burden on lower-income households
- Last week NYT reported tumbling sales and stock prices in washing machine industry because of 20% tariff on imported products (link)
- Initially planned to drive Whirlpool (Michigan, USA) sales up, lowering competitive advantage of LG, Samsung, etc. laundry machines. Whirlpool added 200 jobs to Clyde, Ohio factory post tariff
- BUT, steel tariff announced, drives costs up significantly. Cost passed down to consumers, and in Q3 2018, Whirlpool unit sales were down 2.5% compared to Q3 2017. Expect another $300mm in cost increases driven by tariff in year to come
- Similar effect on consumer electronics. iRobot for example, absorbed the cost of the tariffs in Q4, but estimated impact to profitability ~$5mm
- Plans on raising prices because business model cant take the margin hit
- TLDR: Growth in robotics / tech manufacturing / automation technology will continue despite headwinds from tariffs (aluminum), but could serve to hamper this speed of growth
One-quarter of jobs are at ‘high-risk’ of being automated (link)
- 25% of U.S. jobs are at high risk of automation, especially in food prep, production, and office admin – AI threatens to automat 70% of those tasks. Also at risk are data processing, collection, physical labor, etc.
- Ideally, can use proceeds from high-tech to reinvest in helping displaced workers prep for jobs in post-AI society
- Source: Brookings Study (link)
Where seed and early-stage funding is growing, contracting or holding steady (link)
- Tl;dr exodus of funding / talent / innovation from CA/NY/MA overstated. Smaller startup communities continue to grow in tandem
- Early / seed rounds seeing significant growth in Utah (enterprise software) and Pennsylvania (biotech, transport, robotics)
- Texas seeing medium-sized rounds; $5mm – $50mm
- Large checks still written in SF, New York, Boston (~85% of $50mm+ funding list)
- SF the obvious majority, with ~50% of seed and early stage rounds over $50mm (n=34) followed by NY (n=10), and MA (n=15)
How B2B Startups Reduce Inequality (link)
- B2B transform the nature of the costs required to start a business – reducing the influence of capital and leveling the playing field for new entrants to share in the surplus generated by the secular shift to a tech-mediated economy
- Building a business no longer confined to high fixed costs (high cost of capital). B2B transforms these costs to variable, making it less capital-intensive to start a business
- Coincided with a renaissance in freelance entrepreneurship (57mm Americans freelanced in 2018)
- Tl;dr lower barriers to entry create markets that converge on perfect competition instead of oligarchic concentration
Apple partners with Aetna to launch health app leveraging Apple Watch data (link)
- App called Attain used Apple Watch data to provide window into users’ health
Verily recently scored clearance from FDA on ECG tech (link), but only for Study Watch (prescription only device). Might open doors for potential pixel watch? (comparable to Apple Watch 4?) - Attain app divided into achieving activity goals, sustaining everyday health, personalized health notifications, and rewards for achievements
- Also uses doctor-recommended clinical guidelines and suggesting checkups
- Marketed as personalized health app, but really giving Aetna / Apple data that can be used later for potential clinical trials / make predictions about population health
- NOT used in underwriting premium or coverage decision, although might not be a bad idea to use it to track employee health / lowering insurance premiums
Will tech companies change the way we manage our health (link)
- Alphabet currently the most active investor among large tech companies in U.S. healthcare (via Verily, and DeepMind). Also made substantial investments in health insurance sector (Oscar, Clover, Collective Health)
- Amazon purchased PillPack, and filed patent in October 2018 for Alexa to detect colds and coughs
- Apple and Aetna partnership (Attain app
Radical innovation needs a “hot market” So now what? (link) Paper source: link
- Entrepreneurs might want to consider striking while the iron is still hot. That’s because research shows the more radical an innovation, the more it needs an active market to succeed
- In hot times, everything that would have been funded before gets funded plus new, more radical things get money. These riskier projects are more likely to fail, but if they survived, they were more successful / valued higher at their IPO or acquisition / more patents cited, etc.
- Advice for startups now: raise more money, raise it sooner, and be careful how fast you spend it for when budgets tighten. Use money to speak to investors, telling story, etc. during a downturn
Nat's Corner 