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Read more “I have to choose my words carefully,” says Joe Castelino of Stevens Creek Volkswagen in San Jose, California, when asked about the management software on which most car dealerships rely for inventory information, marketing, customer relationships and more.
Castelino, the dealership’s service director, laughs as he says this. But the joke has apparently been on car dealers, most of whom have largely relied on a few frustratingly antiquated vendors for their dealer management systems over the years — along with many more sophisticated point solutions.
It’s the precise opportunity that former Tesla CIO, Jay Vijayan, concluded he was well-positioned to address while still in the employ of the electric vehicle giant.
As Vijayan tells it, he knew nothing about cars until joining Tesla in 2011, following a dozen years of working in product development at Oracle, then VMware. Yet he learned plenty over the subsequent four years. Specifically, he says he helped to build with Elon Musk a central analysis system inside Tesla, a kind of brain that could see all of the company’s internal systems, from what was happening in the supply chain to its factory systems to its retail platform.
Tesla had to build it itself, says Vijayan; after evaluating the existing software of third-company providers, the team “realized that none of them had anything close to what we needed to provide a frictionless modern consumer experience.”
It was around that time that a lightbulb turned on. If Tesla could transform the experience for its own customers, maybe Vijayan could transform the buying and selling experience for the much bigger, broader automotive industry. Enter Tekion, a now four-year-old, San Carlos, California company that already employs 470 people locally and in Bangalore and has come far enough along that just attracted $150 million in fresh funding led by the private equity investor Advent International.
With the Series C round — which also included checks from Index Ventures, Airbus Ventures, FM Capital and Exor, the holding company of Fiat-Chrysler and Ferrari — the company has now raised $185 million altogether. It’s also valued at north of $1 billion. (The automakers General Motors, BMW and the Nissan-Renault-Mitsubishi Alliance are also investors.)
Eric Wei, a managing director at Advent, says that over the last decade, his team had been eager to seize on what’s approaching a $10 billion market annually. Instead, they found themselves tracking incumbents Reynolds & Reynolds, CDKGlobal and Cox Automotive’s Dealertrack — and waiting for a better player to emerge.
Then Wei was connected to Tekion through Jon McNeill, a former Tesla president and an advisory partner to Advent.
Says Wei of seeing how Tekion’s tech compared with its more established rivals: “It was like comparing a flip phone to an iPhone.”
Unsurprisingly, McNeill, who worked at Tesla with Vijayan, also sings the company’s praises, noting that Tekion even bought a dealership in Gilroy, Calif., to use as a kind of lab while it was building its technology from scratch.
It’s nice, such praise, but more important is that Tekion is also attracting the attention of dealers. Though citing competitive reasons, Vijayan declines to share how many customers have bought its cloud software — which connects dealers with both manufacturers and car buyers and is powered by machine learning algorithms — he says it’s already being used across 28 states.
One of these dealerships is the national chain Serra Automotive, whose founder, Joseph Serra, is now an investor in Tekion.
Another is that Volkswagen dealership in San Jose, where Castelino — who doesn’t have a financial interest in Tekion — speaks enthusiastically about the time and expenses his team is saving because of Tekion’s platform.
For example, he says customers need only log-in now to flag a particular issue. After that, with the help of an RFID tag, Stevens Creek knows exactly when that customer pulls into the dealership and what kind of help they need, making their arrival far more seamless.
Tekion can also make recommendations based on a car’s history. It might, for instance, suggest a brake fluid flush to a customer without an advisor having to look through that customer’s history, Castelino says.
As crucially, he says, the dealership has been able to cut ties with a lot of other software vendors, while also making more productive use of its time. Says Castelino, “As soon as a [repair order] is live, it’s in a dispatcher’s hand and a technician can grab the car.” It’s like that with every step, he insists. “You’re saving 15 minutes again and again, and suddenly, you have three hours where your intake can be higher.”
With converts like Castelino, it’s easy to image Tekion making serious strides in market share. And yet it does have rivals, some of which have long contracts in place with their customers.
Even steeper competition, should it come, might eventually be from Tesla itself.
In a Tesla earnings call earlier today, Musk told analysts that there are essentially a dozen startups housed inside of Tesla, including one centered on vehicle service. It’s the very business that Vijayan helped to create.
As for whether Musk might spin out any of these, he said Tesla currently has no plans to do so. He suggested it has enough on its plate for the time being. If Tekion takes off, however, that could well change.
Today during a call with investors and journalists, Tesla CEO Elon Musk was asked to expand a tweet from yesterday. In it, he stated: “Tesla should really be thought of as roughly a dozen technology startups, many of which have little to no correlation with traditional automotive companies.”
In short, he explained there are over a dozen startups in Tesla, and he views every product line and plant as a startup. It’s an interesting point of view from the top of Tesla, a car manufacturing company that also builds batteries, home solar panels and, among other things, is looking to offer car insurance, too.
Outside of vehicle manufacturing, Musk points to insurance when asked about the growth potential. He says the insurance business could grow into 30-40% of Tesla’s car business.
This strategy seemingly works well for Tesla, which constantly rolls out updates to existing products at an unusual pace. New features arrive without much warning, and it makes sense when Tesla is treating different vehicle component divisions as a collection of companies instead of a collection of divisions.
According to Musk, some of the so-called startups include autonomy, chip design, vehicle service, sales, designing a drive unit, motors, supercharger network and, soon, insurance.
“The thing people don’t understand about Tesla is [the company] is a whole chain of startups,” Musk said. “And then people say, ‘well, you didn’t do that before.’ Yeah, well, we’re doing it now. I think we may have been a bit slower than other startups, but I don’t think we’ve really had anything fail.”
He concluded there are no plans to spin out any business, noting there’s no need to add complexity.
The end is in sight for Quibi, PayPal adds cryptocurrency support and Netflix tests a new promotional strategy. This is your Daily Crunch for October 21, 2020.
The big story: Quibi is shutting down
The much-hyped streaming video app led by Jeffrey Katzenberg and Meg Whitman, which raised nearly $2 billion in funding, is shutting down, according to reports in The Information and The Wall Street Journal.
Katzenberg, a longtime Hollywood executive, had blamed the coronavirus pandemic for a lackluster launch in May — an app designed for on-the-go viewing didn’t have much appeal when people were largely stuck at home. And whatever the reason, none of Quibi’s shows ever became a breakout hit.
Quibi executives confirmed the news in a post on Medium.
The tech giants
PayPal to let you buy and sell cryptocurrencies in the US — In partnership with Paxos, PayPal plans to support Bitcoin, Ethereum, Bitcoin Cash and Litecoin at first.
Facebook is working on Neighborhoods, a Nextdoor clone based on local groups — Facebook said that Neighborhoods currently is live only in Calgary, Canada.
Netflix to test free weekend-long access in India — The streaming service recently stopped offering a month of complimentary access to new users in the United States.
Startups, funding and venture capital
Syte, an e-commerce visual search platform, gets $30M Series C to expand in the US and Asia — Launched in 2015 to focus on visual search for clothing, Syte’s technology now covers other verticals, like jewelry and home decor.
June’s third-gen smart oven goes up for pre-order, starting at $599 — It’s been two years since the smart oven’s last major update.
Mine raises $9.5M to help people take control of their personal data — Mine scans users’ inboxes to help them understand who has access to their personal data.
Advice and analysis from Extra Crunch
Founders don’t need to be full-time to start raising venture capital — John Vrionis and Sarah Leary of Unusual Ventures told us that lightweight investing matters in the early days of a company.
Dear Sophie: What visa options exist for a grad co-founding a startup? — The latest edition of immigration lawyer Sophie Alcorn’s column answering immigration-related questions about working at tech companies.
Lessons from Datto’s IPO pricing and revenue multiple — How do you value slower, more profitable software growth?
(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
Sam’s Club will deploy autonomous floor-scrubbing robots in all of its US locations — Sam’s Club parent company Walmart is already using robotics to perform inventory in its own stores.
AOC’s Among Us stream topped 435,000 concurrent viewers — The purpose of the stream, which drew a massive crowd, was to get out the vote as we head into the general election.
Coalition for App Fairness, a group fighting for app store reforms, adds 20 new partners — The coalition claims that both Apple and Google engage in anti-competitive behavior.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
In memory of the death of Quibi, here’s a quick sendoff from four of our writers who came together to discuss what we can learn from Quibi’s amazing, instantaneous, billions-of-dollars failure.
Lucas Matney looks at what the potential was for Quibi and how it missed the mark in media. Danny Crichton discusses why billions of dollars in VC funding isn’t enough in competitive markets like video. Anthony Ha discusses the crazy context of Quibi and our interview with the company earlier this year. And Brian Heater looks at why constraints are not benefits in new products.
Lucas Matney: A deadpool company before it was even launched
There will be dozens of post-mortems on Quibi, but the fact is there were dozens of post-mortems written about Quibi before it even launched. The whole idea was, to be kind, audacious, though it was also clear to most people that weren’t personal friends with founder Jeffrey Katzenberg that it was doomed from the start.
Quibi’s death is an important moment for streaming, largely because it’s a pretty strong rebuke of services trying to one-up the Netflix model by solely focusing on high-dollar original content. I think Quibi made several mistakes, but its most pertinent ones can be tied to a lack of flexibility in vision.
The startup insisted that all of its titles were mobile-only, high-production value and relying on Hollywood star power when they probably could have succeeded by keeping a closer eye on what kind of quick-bite content was succeeding elsewhere. Snap has seen success with Discover after years of attempts, and there is space for a dedicated player here, but Katzenberg tried to level-up by throwing checks at his friends and not doing the hard work of scouting out rising trendsetters in the creator world.
There are other lessons here that apply to other streaming new-comers like Apple. Namely that creating a hit TV show is hard and buying a hit TV series is easier if you already have the money. Quibi and Apple TV+ both launched with plenty of new series and no back libraries of beloved legacy content for users to spend time digging into. There’s just so much good stuff out there already. Apple has shifted strategy here, but Quibi boxed itself in and probably couldn’t afford to play here once its error was made clear.
Quibi showcases how the streaming wars’ upending of Hollywood has probably eclipsed reason at this point. Players like Apple don’t belong here, and there’s just too much money pouring into original content that loosely fits the Hollywood mold.
Netflix stock is down 7% today after earnings yesterday showcased slowing growth. With HBO Max, Disney+, Peacock and Apple TV+ all launching in the last 12 months, the streaming market’s cup runneth over. And while I don’t think a Quibi death spells the end for innovation here, I think that the market is ready for some 2021 consolidation.
Here we sit in the valley of predespair, 2 weeks ahead of the election and God knows where we are in the pandemic. As my partner Tina says to me on this once glorious sunny day (the view formerly known as the Pacific Ocean has been replaced by the fog like a Zoom background) we seem to be better prepared for something to go wrong than right.
We’ve learned how to stay socially distant, half-learned to wear a mask, unlearned how it might be a good idea to stay home and let things just happen. The last four years seems like a bizarre experiment in what not to do, the triumph of the worst of our instincts and fear of the other. For my generation, the thought that we would be tested so apocalyptically had never entered our mind. Free love, social media, mind-altering drugs — all ideas that seemed good at the time.
Too good to be true, it turned out. In the stampede to enjoy the fruits of our labors, we turned success into the failure of others. The space race may have spawned the computer industry, but it also reinforced the notion that we beat them to save us. And the tech boom saw us undermine the very soul, the soundtrack of how we marked our lives. Thanks, Napster.
Today, East v. West is Apple v. Android, a detente that Washington distorts into trust v. loyalty. Which is worse, the silence of the social giants or making mistakes in the open? I’m sick of beating up on Twitter for our failures, even more so our toothless tut-tutting of Facebook for spreading the lies we support by staying put.
So, let’s try something going right for a change. Take Spotify and their new plan to embed full versions of our musical heritage in podcasts. This is a complicated offer, to be sure. You can’t use partial versions of songs, talk over any portion of the song, or place ads within 60 seconds of music. Ads must have at least 10 minutes of non-music content between them. More importantly, these shows are only available on Spotify’s Anchor podcasting service.
But what really stands out is the attempt by one of the two major music streaming services to create a composite product reconstituting a post digital radio business. If Apple Music were nudged to support the idea, it would resuscitate a major platform of the tech crowd with a mashup of DJ and playlist content. This in turn would create new leaderboards or charts in old record biz terms that would jumpstart new and catalog music in media. Already we see some of that energy in Saturday Night Live clips where audience numbers are shifting to mobile and online viewing. Composite ratings of broadcast and digital are growing fast.
This evolution from broadcast to online ratings success may presage how live entertainment venues and audiences obliterated by the pandemic adapt with hybrid live/digital events. We’re seeing this act out in real time with the election, where early voting and election day registration have produced record turnout for both the safety of mail and absentee voting (mostly Democrats) and more traditional party switching (mostly Republicans or former Democrats more engaged by Trump.) This “new normal” in politics may not bear immediate fruit, but it’s at a minimum a harbinger of things to come.
Fast forward to a future dinner party in an AR/VR augmented version of our favorite restaurants, with autotesting and contact tracing making it safe enough to reconstitute weekly gettogethers not just of local friends but virtual guests from around our town and beyond. Courses are served by delivery and robot waiters as we watch party our favorite artists and comedians both professional and amateur. Election night becomes a vote-from-home proposition, with the electoral college results calculated in realtime.
As the concession speeches wind down, a vanquished candidate references the Paul Simon song:
When something goes wrong
I’m the first to admit it
I’m the first to admit it
But the last one to know
When something goes right
Well it’s likely to lose me
It’s apt to confuse me
It’s such an unusual sight
I can’t get used to something so right
Something so right
__________________
The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary, and Steve Gillmor . Recorded live Friday, October 16, 2020.
Produced and directed by Tina Chase Gillmor @tinagillmor
@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang
For more, subscribe to the Gillmor Gang Newsletter and join the backchannel here on Telegram.
The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.
Just before 9 p.m. on October 20, Alexandria Ocasio-Cortez went on Twitch to play the hottest game in America: Among Us. “Hi, everyone! This is crazy!” she began, urging viewers to make a plan for how they will vote with I Will Vote, an outreach program funded by the Democratic National Committee.
After a few technical difficulties, Ocasio-Cortez spent three and a half hours playing the game with popular Twitch streamers as well as fellow Democratic congresswoman Ilhan Omar .
At one point Ocasio-Cortez’s Twitch stream attracted about 430,000 viewers, making her the third most popular streamer on the site ever. Not bad for your first go.
More important, the event offered a glimpse at the future of political campaigning. In the waning weeks of 2020’s volatile American election campaign, Democrats are increasingly turning to Twitch streams of popular video games to reach out to young voters and urge every last one of them to show up and vote. (Politicians are prohibited from using Twitch to fundraise, run ads, or monetize channels, according to a Twitch spokesperson.)
And you don’t get much more popular than Among Us. In September, it was downloaded nearly 84 million times on iOS and Android. And it’s been the most downloaded game on Steam, Apple, and Android since September, gaining nearly 200,000 players in the past few weeks alone.
The game itself is pretty simple. You play as a blob locked in a rocket ship with several other (differently colored) blobs. One of you—maybe you?—is a murderer, an “imposter.” The others, “crewmates,” have one mission: figure out who the imposter is before being “killed” by that imposter. You do this by running around the rocket ship, solving easy puzzles, and keeping an eye on any “sus” (suspicious) activity.
Among Us’s simplicity is reminiscent of Animal Crossing, which similarly has a fervent fan base dating back to the early days of the pandemic, when its explosion in popularity led to a worldwide shortage of Nintendo Switches. That game—you cultivate a deserted island populated by cute animals, build a house, and till the land to create a home—also had a fan in Ocasio-Cortez, who took to Twitter to open her DMs and offer codes to a lucky few who could then visit her virtual island.
It’s not only Ocasio-Cortez. Just last week, in Animal Crossing, the Biden campaign launched its own island, Biden HQ, featuring a Biden avatar in aviators who only says “No malarkey!” along with a shop and voting area—with text codes for players to sign up to vote and buy in-game merchandise benefiting the campaign. Biden HQ’s launch was streamed to hundreds of thousands live on Twitch.
Republicans are on Twitch too-—kind of. The Republican Convention streamed on the platform a couple of months ago, and President Donald Trump has an account, mostly used to stream favorable news segments or air campaign videos.
But the Republican Party has scoffed at the Democrats’ activities. “This explains everything. Not only does Joe Biden think he’s campaigning for president of Animal Crossing from his basement, his handlers are keeping him busy with video games while they stash him away to avoid talking about the bombshell reports of his corruption,” deputy national press secretary Samantha Zager said in a statement when asked about the launch of Biden HQ.
That sentiment may miss the potential of Twitch streams as a voter outreach tool. Nearly 140 million people were streaming on Twitch monthly as of July, and the number has grown exponentially during the pandemic.
Twitch’s video-game streams are far more nuanced than they at first appear, and the Amazon-backed company is arguably evolving into a social-media platform in itself, putting it in a position to become a political player alongside Facebook and Twitter.
The power of social media as a way to reach younger American voters was first identified in 2008, when Barack Obama’s Facebook-heavy grassroots campaign showed that this demographic could be encouraged to turn out in droves. That narrative was turned on its head in 2016, when Russian disinformation worked to target millennials’ parents and grandparents in a multipronged, sophisticated digital effort to ramp up support for Trump.
“We understand that the strategies in 2016 didn’t cut it,” says Briana Megid, the deputy national press secretary for NextGen, a progressive group focusing on youth outreach. “Poll-tested messaging, traditional spokespersons, and interviews with the political elite aren’t as appealing to your average unregistered voter as they may have been in the past.”
So far, unlike Facebook and Twitter, Twitch hasn’t had a massive disinformation problem or issues with content moderation. With a user group drawn almost entirely from millennials and Gen Z, it has become America’s pandemic-era alternative to TV, where a person can watch celebrities play games and engage in the type of side chats you might enjoy at a bar.
Democrats have recognized its value.
“It’s built political will,” says Jordan Uhl, who manages Twitch streaming for the progressive organization MoveOn. “It’s more an engagement platform than a streaming one.”
Animal Crossing was a crucial way for Democrats to test whether voter outreach through video games actually worked. “It’s both more strategic and less strategic than you think,” says Megid. “Sure, we want to reach out to young people and mobilize them to get out and vote. However, we need to find a sufficiently inclusive game, so that anyone can join, and one with a pseudo-chat feature so that we can attempt to bring up certain topics.” Animal Crossing was perfect for these reasons.
And Uhl says Twitch streams of Among Us have opened up ways for candidates to speak to socially distant, isolated voters. MoveOn is trying out chat prompts that pop up automatically with get-out-the-vote messages and screen overlays that show deadlines for voting by mail, he says.
But does Twitch streaming actually translate into votes? There’s no hard data either way. “There’s a recognition that these platforms are successful because they’re not built for traditional voter outreach,” Megid says. “We can’t give a head count, so we can’t say ‘Yes, this worked’ or ‘No, it didn’t [work].’ We can certainly say, however, that we reached new people in new ways, and that moves the needle when it comes to persuading young people to get out the vote.”
Benjamin Chicka agrees. He is a lecturer in philosophy at Curry College who is writing an upcoming book about how philosophy and ethics intersect with video-game culture. “Even if in-person events go back to what they used to be, meeting people where they are rather than asking them to come to you and giving them [voters] the platform makes sense,” he says. “There’s something about that little affirmation that seems small, but it manifests in real, meaningful action in the real world.”
At midnight, Ocasio-Cortez— who did not respond to multiple requests for comment—said her goodbyes to her fellow streamers before addressing the audience, which stood at over 300,000. She told viewers she would come back. “Don’t forget to vote!” she urged one last time before turning to her monitor. “Okay, now I’ve gotta figure out how to turn this off,” she mumbled.
At 6:08 p.m. US Eastern Time on Tuesday, NASA’s OSIRIS-REx spacecraft finished a four-and-a-half-hour descent to the surface of asteroid Bennu, 200 million miles from Earth. Once there, it briefly made contact with the ground in an attempt to collect some rocky pebbles and dust before safely flying away. We won’t know if the sample collection was successful until later.
Why do we want a sample? Asteroids like Bennu are some of the oldest objects in the solar system—they are time capsules chock full of the same materials (such as organics and hydrated minerals) that eventually formed into planets like Earth. Studying these asteroids in depth could reveal new insights into how habitable worlds are made.
But in order to really understand the origin and evolution of these objects, we need to investigate them in laboratories here on Earth. The main goal of OSIRIS-REx has always been to bring back a sample of Bennu so we can take a closer look.
How did it happen? OSIRIS-REx touched down on a 52-foot-long site called Nightingale, within three feet of the landing target. The sample collection was made possible through a “touch-and-go” pogo method in which the spacecraft descended with a large 11-foot-long, one-foot-wide arm extended to the ground, making contact for about six seconds. During that time it fired off nitrogen gas that wafted small rocks and dust into a collection chamber at the head of the arm, with most of the collection occurring in the first three seconds. The head itself seems to have pushed down into the surface and crushed some material, which is expected to have helped the head collect more material. The spacecraft then flew back out to a safe distance away from the asteroid.
“Everything went just exactly perfect,” Dante Lauretta, the principal investigator for OSIRIS-REx at the University of Arizona, said on NASA TV after the maneuver. “We have overcome the amazing challenges that this asteroid has thrown at us, and the spacecraft appears to have operated flawlessly.”
The procedure was initially complicated by the fact that Bennu’s topography is different from what we once thought. When NASA first selected the asteroid for study, scientists thought it was covered in soft, sandy material like a beach, which would have been very easy to pick up. Instead, OSIRIS-REx quickly revealed Bennu to be a rocky surface covered in boulders and other hazards that would present new challenges for the sample collection. Luckily, OSIRIS-REx managed to avoid those dangers.
What’s next? Things aren’t over yet. The touch-and-go move went smoothly, but we still don’t know if OSIRIS-REx actually scooped up enough rock. NASA wants at least 60 grams, and there’s a 30% chance it failed to get that amount. Based on preliminary analysis, Lauretta is optimistic, saying the maneuver went “as good as we could have imagined it would.” He and his team must run a few tests to know precisely how much material was collected, including a sample-mass measurement scheduled for Saturday. They expect to have a report ready by October 26. If things look good, OSIRIS-REx will stow the sample and depart Bennu in the spring, to deliver the samples to Earth in 2023. If not, the spacecraft has the ability to make two more sample collection attempts. Check back here later to see how it did.
This post has been updated with new information and media provided by NASA.