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ReviveMed turns drug discovery into a big data problem and raises $1.5M to solve it
What if there’s a drug that already exists that could treat a disease with no known therapies, but we just haven’t made the connection? Finding that connection by exhaustively analyzing complex biomechanics within the body — with the help of machine learning, naturally — is the goal of ReviveMed, a new biotech startup out of MIT that just raised $1.5 million in seed funding.
Around the turn of the century, genomics was the big thing. Then, as the power to investigate complex biological processes improved, proteomics became the next frontier. We may have moved on again, this time to the yet more complex field of metabolomics, which is where ReviveMed comes in.
Leila Pirhaji, ReviveMed’s founder and CEO, began work on the topic during her time as a postgrad at MIT. The problem she and her colleagues saw was the immense complexity of interactions between proteins, which are encoded in DNA and RNA, and metabolites, a class of biomolecules with even greater variety. Hidden in these innumerable interactions somewhere are clues to how and why biological processes are going wrong, and perhaps how to address that.
“The interaction of proteins and metabolites tells us exactly what’s happening in the disease,” Pirhaji told me. “But there are over 40,000 metabolites in the human body. DNA and RNA are easy to measure, but metabolites have tremendous diversity in mass. Each one requires its own experiment to detect.”
As you can imagine, the time and money that would be involved in such an extensive battery of testing have made metabolomics difficult to study. But what Pirhaji and her collaborators at MIT decided was that it was similar enough to other “big noisy data set” problems that the nascent approach of machine learning could be effective.
“Instead of doing experiments,” Pirhaji said, “why don’t we use AI and our database?” To that end she founded ReviveMed with her PhD advisor, Ernest Fraenkel, and shortly afterwards was joined by data scientist Demarcus Briers and biotech veteran Richard Howell.
Pharmaceutical companies and research organizations already have a mess of metabolites masses, known interactions, suspected but unproven effects and disease states and outcomes. Plenty of experimentation is done, but the results are frustratingly vague owing to the inability to be sure about the metabolites themselves or what they’re doing. Most experimentation has resulted in partial understanding of a small proportion of known metabolites.
That data isn’t just a few drives’ worth of spreadsheets and charts, either. Not only does the data comprise drug-protein, protein-protein, protein-metabolite and metabolite-disease interactions, but they’re including data that’s essentially never been analyzed: “We’re looking at metabolites that no one has looked at before.”
The information is sitting in an archive somewhere, gathering dust. “We actually have to go physically pick up the mass spectrometry files,” Pirhaji said. (“They’re huge,” she added.)
Once they got the data all in one place (Pirhaji described it as “a big hairball with millions of interactions,” in a presentation in March), they developed a model to evaluate and characterize everything in it, producing the kind of insights machine learning systems are known for.
The “hairball.”
The results were more than a little promising. In a trial run, they identified new disease mechanisms for Huntington’s, new therapeutic targets (i.e. biomolecules or processes that could be affected by drugs) and existing drugs that may affect those targets.
The secret sauce, or one ingredient anyway, is the ability to distinguish metabolites with similar masses (sugars or fats with different molecular configurations but the same number and type of atoms, for instance) and correlate those metabolites with both drug and protein effects and disease outcomes. The metabolome fills in the missing piece between disease and drug without any tests establishing it directly.
At that point the drug will, of course, require real-world testing. But although ReviveMed does do some verification on its own, this is when the company would hand back the results to its clients, pharmaceutical companies, which then take the drug and its new effect to market.
In effect, the business model is offering a low-cost, high-reward R&D as a service to pharma, which can hand over reams of data it has no particular use for, potentially resulting in practical applications for drugs that already have millions invested in their testing and manufacture. What wouldn’t Pfizer pay to determine that Robitussin also prevents Alzheimer’s? That knowledge is worth billions, and ReviveMed is offering a new, powerful way to check for such things with little in the way of new investment.
This is the kind of web of molecules and effects that the system sorts through.
ReviveMed, for its part, is being a bit more choosy than that — its focus is on untreatable diseases with a good chance that existing drugs affect them. The first target is fatty liver disease, which affects millions, causing great suffering and cost. And something like Huntington’s, in which genetic triggers and disease effects are known but not the intermediate mechanisms, is also a good candidate for which the company’s models can fill the gap.
The company isn’t reliant on Big Pharma for its data, though. The original training data was all public (though “very fragmented”) and it’s that on which the system is primarily based. “We have a patent on our process for getting this metabolome data and translating it into insights,” Pirhaji notes, although the work they did at MIT is available for anyone to access (it was published in Nature Methods, in case you were wondering).
But compared with genomics and proteomics, not much metabolomic data is public — so although ReviveMed can augment its database with data from clients, its researchers are also conducting hundreds of human tests on their own to improve the model.
The business model is a bit complicated, as well — “It’s very case by case,” Pirhaji told me. A research hospital looking to collaborate and share data while sharing any results publicly or as shared intellectual property, for instance, would not be a situation where a lot of cash would change hands. But a top-5 pharma company — two of which ReviveMed already has dealings with — that wants to keep all the results for itself and has limitless coffers would pay a higher cost.
I’m oversimplifying, but you get the idea. In many cases, however, ReviveMed will aim to be a part of any intellectual property it contributes to. And of course the data provided by the clients goes into the model and improves it, which is its own form of payment. So you can see that negotiations might get complicated. But the company already has several revenue-generating pilots in place, so even at this early stage those complications are far from insurmountable.
Lastly there’s the matter of the seed round: $1.5 million, led by Rivas Capital along with TechU, Team Builder Ventures and WorldQuant. This should allow them to hire the engineers and data scientists they need and expand in other practical ways. Placing well in a recent Google machine learning competition got them $200,000 worth of cloud computing credit, so that should keep them crunching for a while.
ReviveMed’s approach is a fundamentally modern one that wouldn’t be possible just a few years ago, such is the scale of the data involved. It may prove to be a powerful example of data-driven biotech as lucrative as it is beneficial. Even the early proof-of-concept and pilot work may provide help to millions or save lives — it’s not every day a company is founded that can say that.
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Stripe debuts Radar anti-fraud AI tools for big businesses, says it has halted $4B in fraud to date
Cybersecurity continues to be a growing focus and problem in the digital world, and now Stripe is launching a new paid product that it hopes will help its customers better battle one of the bigger side-effects of data breaches: online payment fraud. Today, Stripe is announcing Radar for Fraud Teams, an expansion of its free AI-based Radar service that runs alongside Stripe’s core payments API to help identify and block fraudulent transactions.
And there are further efforts that Stripe is planning in coming months. Michael Manapat, Stripe’s engineering manager for Radar and machine learning, said the company is going to soon launch a private beta of a “dynamic authentication” that will bring in two-factor authentication. This is on top of Stripe’s first forays into using biometric factors in payments, made via partners like Apple and Google. With these and others, fingerprints and other physical attributes have become increasingly popular ways to identify mobile and other users.
The initial iteration of Radar launched in October 2016, and since then, Manapat tells me that it has prevented $4 billion in fraud for its “hundreds of thousands” of customers.
Considering the wider scope of how much e-commerce is affected by fraud — one study estimates $57.8 billion in e-commerce fraud across eight major verticals in a one-year period between 2016 and 2017 — this is a decent dent, but there is a lot more work to be done. And Stripe’s position of knowing four out of every five payment card numbers globally (on account of the ubiquity of its payments API) gives it a strong position to be able to tackle it.
The new paid product comes alongside an update to the core, free product that Stripe is dubbing Radar 2.0, which Stripe claims will have more advanced machine learning built into it and can therefore up its fraud detection by some 25 percent over the previous version.
New features for the whole product (free and paid) will include being able to detect when a proxy VPN is being used (which fraudsters might use to appear like they are in one country when they are actually in another) and ingesting billions of data points to train its model, which is now being updated on a daily basis automatically — itself an improvement on the slower and more manual system that Manapat said Stripe has been using for the past couple of years.
Meanwhile, the paid product is an interesting development.
At the time of the original launch, Stripe co-founder John Collison hinted that the company would be considering a paid product down the line. Stripe has said multiple times that it’s in no rush to go public — and statement that a spokesperson reiterated this week — but it’s notable that a paid tier is a sign of how Stripe is slowly building up more monetization and revenue generation.
Stripe is valued at around $9.2 billion as of its last big round in 2016. Most recently, it raised $150 million back in that November 2016 round. A $44 million from March of this year, noted in Pitchbook, was actually related to issuing stock related to its quiet acquisition of point-of-sale payments startup Index in that month — incidentally another interesting move for Stripe to expand its position and placement in the payments ecosystem. Stripe has raised around $450 million in total.
The Teams product, aimed at businesses that are big enough to have dedicated fraud detection staff, will be priced at an additional $0.02 per transaction, on top of Stripe’s basic transaction fees of a 2.9 percent commission plus 30 cents per successful card charge in the U.S. (fees vary in other markets).
The chief advantage of taking the paid product will be that teams will be able to customise how Radar works with their own transactions.
This will include a more complete set of data for teams that review transactions, and a more granular set of tools to determine where and when sales are reviewed, for example based on usage patterns or the size of the transaction. There are already a set of flags the work to note when a card is used in frequent succession across disparate geographies; but Manapat said that newer details such as analysing the speed at which payment details are entered and purchases are made will now also factor into how it flags transactions for review.
Similarly, teams will be able to determine the value at which a transaction needs to be flagged. This is the online equivalent of when certain purchases require or waive you to enter a PIN or provide a signature to seal the deal. (And it’s interesting to see that some e-commerce operations are potentially allowing some dodgy sales to happen simply to keep up the user experience for the majority of legitimate transactions.)
Users of the paid product will also be able to now use Radar to help with their overall management of how it handles fraud. This will include being able to keep lists of attributes, names and numbers that are scrutinised, and to check against them with analytics also created by Stripe to help identify trending issues, and to plan anti-fraud activities going forward.
Updated with further detail about Stripe’s funding.
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Cloud Foundry Foundation looks east as Alibaba joins as a gold member
Cloud Foundry is among the most successful open source project in the enterprise right now. It’s a cloud-agnostic platform-as-a-service offering that helps businesses develop and run their software more efficiently. In many enterprises, it’s now the standard platform for writing new applications. Indeed, half of the Fortune 500 companies now use it in one form or another.
With the imminent IPO of Pivotal, which helped birth the project and still sits at the core of its ecosystem, Cloud Foundry is about to gets its first major moment in the spotlight outside of its core audience. Over the course of the last few years, though, the project and the foundation that manages it have also received the sponsorship of companies like Cisco, IBM, SAP, SUSE, Google, Microsoft, Ford, Volkswagen and Huawei.
Today, China’s Alibaba Group is joining the Cloud Foundry Foundation as a gold member. Compared to AWS, Azure and Google Cloud, the Alibaba Cloud gets relatively little press, but it’s among the largest clouds in the world. Starting today, Cloud Foundry is also available on the Alibaba Cloud, with support for both the Cloud Foundry application and container runtimes.
Cloud Foundry CTO Chip Childers told me that he expects Alibaba to become an active participant in the open source community. He also noted that Cloud Foundry is seeing quite a bit of growth in China — a sentiment that I’ve seen echoed by other large open source projects, including the likes of OpenStack.
Open source is being heavily adopted in China and many companies are now trying to figure out how to best contribute to these kind of projects. Joining a foundation is an obvious first step. Childers also noted that many traditional enterprises in China are now starting down the path of digital transformation, which is driving the adoption of both open source tools and cloud in general.
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Cloud.gov makes Cloud Foundry easier to adopt for government agencies
At the Cloud Foundry Summit in Boston, the team behind the U.S. government’s cloud.gov application platform announced that it is now a certified Cloud Foundry platform that is guaranteed to be compatible with other certified providers, like Huawei, IBM, Pivotal, SAP and — also starting today — SUSE. With this, cloud.gov becomes the first government agency to become Cloud Foundry-certified.
The point behind the certification is to ensure that all of the various platforms that support Cloud Foundry are compatible with each other. In the government context, this means that agencies can easily move their workloads between clouds (assuming they have all the necessary government certifications in place). But what’s maybe even more important is that it also ensures skills portability, which should make hiring and finding contractors easier for these agencies. Given that the open source Cloud Foundry project has seen quite a bit of adoption in the private sector, with half of the Fortune 500 companies using it, that’s often an important factor for deciding which platform to build on.
From the outset, cloud.gov, which was launched by the General Services Administration’s 18F office to improve the U.S. government’s public-facing websites and applications, was built on top of Cloud Foundry. Similar agencies in Australia and the U.K. have made the same decision to standardize on the Cloud Foundry platform. Cloud Foundry launched its certification program a few years ago; last year it added another program for certifying the skills of individual developers.
To be able to run government workloads, a cloud platform has to offer a certain set of security requirements. As Cloud Foundry Foundation CTO Chip Childers told me, the work 18F did to get the FedRAMP authorization for cloud.gov helped bring better controls to the upstream project, too, and he stressed that all of the governments that have adopted the platform have contributed to the overall project.
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A flaw-by-flaw guide to Facebook’s new GDPR privacy changes
Facebook is about to start pushing European users to speed through giving consent for its new GDPR privacy law compliance changes. It will ask people to review how Facebook applies data from the web to target them with ads, and surface the sensitive profile info they share. Facebook will also allow European and Canadian users to turn on facial recognition after six years of the feature being blocked there. But with a design that encourages rapidly hitting the “Agree” button, a lack of granular controls, a laughably cheatable parental consent request for teens and an aesthetic overhaul of Download Your Information that doesn’t make it any easier to switch social networks, Facebook shows it’s still hungry for your data.
The new privacy change and terms of service consent flow will appear starting this week to European users, though they’ll be able to dismiss it for now — although the May 25th GDPR compliance deadline Facebook vowed to uphold in Europe is looming. Meanwhile, Facebook says it will roll out the changes and consent flow globally over the coming weeks and months with some slight regional differences. And finally, all teens worldwide that share sensitive info will have to go through the weak new parental consent flow.
Facebook brought a group of reporters to the new Building 23 at its Menlo Park headquarters to preview the changes today. But feedback was heavily critical as journalists grilled Facebook’s deputy chief privacy officer Rob Sherman. Questions centered around how Facebook makes accepting the updates much easier than reviewing or changing them, but Sherman stuck to talking points about how important it was to give users choice and information.
“Trust is really important and it’s clear that we have a lot of work to do to regain the trust of people on our service” he said, giving us deja vu about Mark Zuckerberg’s testimonies before congress. “We know that people won’t be comfortable using Facebook if they don’t feel that their information is protected.”
Trouble at each step of Facebook’s privacy consent flow
There are a ton of small changes, so we’ll lay out each with our criticisms.
Facebook’s consent flow starts well enough with the screen above offering a solid overview of why it’s making changes for GDPR and what you’ll be reviewing. But with just an “X” up top to back out, it’s already training users to speed through by hitting that big blue button at the bottom.
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Sensitive info
First up is control of your sensitive profile information, specifically your sexual preference, religious views and political views. As you’ll see at each step, you can hit the pretty blue “Accept And Continue” button regardless of whether you’ve scrolled through the information. If you hit the ugly grey “Manage Data Setting” button, you have to go through an interstitial where Facebook makes its argument trying to deter you from removing the info before letting you make and save your choice. It feels obviously designed to get users to breeze through it by offering no resistance to continue, but friction if you want to make changes.
Facebook doesn’t let advertisers target you based on this sensitive info, which is good. The only exception is that in the U.S., political views alongside political Pages and Events you interact with impact your overarching personality categories that can be targeted with ads. You can opt out of being targeted by those too. But your only option here is either to remove any info you’ve shared in these categories so friends can’t see it, or allow Facebook to use it to personalize the site. There’s no option to keep this stuff on your profile but not let Facebook use it.
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Facial recognition
Facebook is bringing facial recognition back to Europe and Canada. The Irish Data Protection commissioner who oversees the EU banned it there in 2012. Users in these countries will get a chance to turn it on, which is the default if they speed through. It’s a useful feature that can make sure people know about the photos of them floating around. But here the lack of granularity is concerning. Users might want to see warnings about possible impersonators using their face in their profile pics, but not be suggested as someone to tag in their friends’ photos. Unfortunately, it’s all or nothing. While Facebook is right to make it simple to turn on or off completely, granular controls that unfold for those that want them would be much more empowering.
[Update: This article has been updated to reflect that Facebook indeed can offer facial recognition in Europe and Canada.]
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Data collection across the web
A major concern that’s arisen in the wake of Zuckerberg’s testimonies is how Facebook uses data collected about you from around the web to target users with ads and optimize its service. While Sherman echoed Zuckerberg in saying that users tell the company they prefer relevant ads, and that this data can help thwart hackers and scrapers, many users are unsettled by the offsite collection practices. Here, Facebook lets you block it from targeting you with ads based on data about your browsing behavior on sites that show its Like and share buttons, conversion Pixel or Audience Network ads. The issue is that there’s no way to stop Facebook from using that data from personalizing your News Feed or optimizing other parts of its service.
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New terms of service
Facebook recently rewrote its terms of service and data use policy to be more explicit and easy to read. It didn’t make any significant changes other than noting the policy now applies to its subsidiaries like Instagram and Messenger. [Correction: But WhatsApp and Oculus have their own data policies.] That’s all clearly explained here, which is nice.
But the fact that the button to reject the new Terms of Service isn’t even a button, it’s a tiny “see your options” hyperlink, shows how badly Facebook wants to avoid you closing your account. When Facebook’s product designer for the GDPR flow was asked if she thought this hyperlink was the best way to present the alternative to the big “I Accept” button, she disingenuously said yes, eliciting scoffs from the room of reporters. It seems obvious that Facebook is trying to minimize the visibility of the path to account deletion rather than making it an obvious course of action if you don’t agree to its terms.
I requested Facebook actually show us what was on the other side of that tiny “see your options” link and this is what we got. First, Facebook doesn’t mention its temporary deactivation option, just the scary permanent delete option. Facebook recommends downloading your data before deleting your account, which you should. But the fact that you’ll have to wait (often a few hours) before you can download your data could push users to delay deletion and perhaps never resume. And only if you keep scrolling do you get to another tiny “I’m ready to delete my account” hyperlink instead of a real button.
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Parental consent
GDPR also implements new regulations about how teens are treated, specifically users between the ages of 13 (the minimum age required to sign up for Facebook) and 15. If users in this age range have shared their religious views, political views or sexual preference, Facebook requires them to either remove it or get parental consent to keep it. They also need permission to be targeted with ads based on data from Facebook’s partners. Without that permission, they’ll see a less personalized version of Facebook. But the system for attaining and verifying that parental consent is a joke.
Users merely select one of their Facebook friends or enter an email address, and that person is asked to give consent for their “child” to share sensitive info. But Facebook blindly trusts that they’ve actually selected their parent or guardian, even though it has a feature for users to designate who their family is, and the kid could put anyone in the email field, including an alternate address they control. Sherman says Facebook is “not seeking to collect additional information” to verify parental consent, so it seems Facebook is happy to let teens easily bypass the checkup.
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Privacy shortcuts
To keep all users abreast of their privacy settings, Facebook has redesigned its Privacy Shortcuts in a colorful format that sticks out from the rest of the site. No complaints here.
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Download your information
Facebook has completely redesigned its Download Your Information tool after keeping it basically the same for the past eight years. You can now view your content and data in different categories without downloading it, which alongside the new privacy shortcuts is perhaps the only unequivocally positive and unproblematic change amidst today’s announcements.
And Facebook now lets you select certain categories of data, date ranges, JSON or HTML format and image quality to download. That could make it quicker and easier if you just need a copy of a certain type of content but don’t need to export all your photos and videos, for example. Thankfully, Facebook says you’ll now be able to download your media in a higher resolution than the old tool allowed.
But the big problem here was the subject of my feature piece this week about Facebook’s lack of data portability. The Download Your Information tool is supposed to let you take your data and go to a different social network. But it only exports your social graph, aka your friends, as a text list of names. There are no links, usernames or other unique identifiers unless friends opt into let you export their email or phone number (only 4 percent of my friends do), so good luck finding the right John Smith on another app. The new version of Download Your Information exports the same old list of names, rather than offering any interoperable format that would let you find your friends elsewhere.
A higher standard
Overall, it seems like Facebook is complying with the letter of GDPR law, but with questionable spirit. Sure, privacy is boring to a lot of people. Too little info and they feel confused and scared. Too many choices and screens and they feel overwhelmed and annoyed. Facebook struck the right balance in some places here. But the subtly pushy designs seem intended to steer people away from changing their defaults in ways that could hamper Facebook’s mission and business.
Making the choices equal in visible weight, rather than burying the ways to make changes in grayed-out buttons and tiny links, would have been more fair. And it would have shown that Facebook has faith in the value it provides, such that users would stick around and leave features enabled if they truly wanted to.
When questioned about this, Sherman pointed the finger at other tech companies, saying he thought Facebook was more upfront with users. Asked to clarify if he thought Facebook’s approach was “better,” he said “I think that’s right.” But Facebook isn’t being judged by the industry standard, because it’s not a standard company. It’s built its purpose and its business on top of our private data, and touted itself as a boon to the world. But when asked to clear a higher bar for privacy, Facebook delved into design tricks to keep from losing our data.
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Ripple’s Brad Garlinghouse and Michael Arrington to talk cryptocurrency at Disrupt SF
Ripple CEO Brad Garlinghouse and Arrington XRP Capital founder (and TechCrunch founder) Michael Arrington will be joining us at TechCrunch Disrupt SF in September to talk money.
Garlinghouse has had a long and storied career in the tech industry, serving as a senior vice president at Yahoo!, president of Consumer Applications at AOL and CEO of the file collaboration service Hightail. But in 2016, Garlinghouse was promoted from COO to CEO at payment services company Ripple.
Ripple’s goal is to try to make it as easy as possible to transfer money between two stores of value. Right now, that process is incredibly tedious, with no unifying structure to send money overseas or to underbanked communities. The notion of a unifying ledger is not a new one, but it’s one that’s transformed Ripple into a full-fledged company.
But Ripple also created the world’s third-largest digital token, XRP. The token has a current total market cap around $30 billion, and the company is working to expand the use cases for XRP, which has primarily been marketed as a tool for banks but has only attracted cross-border payment services.
As cryptocurrencies continue to evolve and gain mainstream attention, questions continue to mount around how these tokens will revolutionize the economy and gain utility.
TechCrunch founder and former Editor-In-Chief Michael Arrington will join Garlinghouse onstage to discuss the evolution of cryptocurrencies. Arrington left TechCrunch in 2011 and went on to start CrunchFund, which has invested in big-name startups such as Uber, Airbnb and Yammer.
In 2016, Arrington reduced his role at CrunchFund and has since started Arrington XRP Capital, a $100 million digital asset management firm in blockchain-based capital markets. Ripple is one of the first portfolio companies for Arrington XRP Capital.
This comes at a time when the SEC is doing everything it can to learn more about cryptocurrencies, sending out subpoenas to crypto funds far and wide, including Arrington XRP Capital.
This conversation is sure to be an interesting one, and one you won’t want to miss. Tickets to Disrupt SF (September 5 to September 7) are available now.
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Here’s what you’ll learn at Atrium’s fundraising workshop
Justin Kan is qualified to teach you how to pitch, and isn’t shy about it. Having raised about $90 million for a few companies and sold his startup Twitch to Amazon for almost a billion dollars, not being shy is actually part of what Kan teaches. His legal services startup Atrium today officially launches Atrium Scale, its free Series A fundraising workshop that’s helped eight startups raise $100 million since it started in beta five months ago. The two-day in-person seminar includes pitch coaching, intros to investors and mentors, follow-up online pitch deck help, legal advice, Amazon and Google Cloud credits and tax and accounting services.
I went through Atrium Scale myself, pretending I was the founder of a hypothetical startup that replaces your phone’s contacts app. While the lectures were full of valuable tips, you can get a lot of those from instructional blog posts by Kan and other VCs. But the small group Q&A and coaching with entrepreneurs who’d successfully raised did a remarkable job of improving attendees’ pitches and the esoteric song-and-dance necessary to get investors to part with their cash.
Atrium co-founder Justin Kan
Here’s a breakdown of how Atrium Scale works:
- When: Once per quarter over a Saturday and Sunday
- Where: Atrium’s offices in downtown San Francisco
- How much: Free, but Atrium hopes you’ll end up using its legal services
- Who: Startups planning to raise their Series A in the next six months, the sooner the better, who fly themselves in from all over the world
- Who gets in: Atrium selects the 10 percent of applicants most ready for venture funding. Applications can be submitted here
- Investors involved to date: Sequoia, General Catalyst, Accel, Venrock, Social Capital, Signia, KPCB, Lightspeed
- Mentors: Justin Kan (Atrium, Twitch), Holly Liu (Kabam, Y Combinator), James Richards (Teleborder, TriNet), Andrew Trader (Zynga), Ashu Desai (Make School)
What Atrium Scale teaches
The Atrium Scale method revolves around the concepts of how to pitch and when. While there are plenty of ways to show off a business, Kan recommends a calculated approach to storytelling. “When should you raise? When you can convince investors to give you money and when cash is the constraint to scaling your business,” Kan said to kick off our program.
The song
“It all starts with a narrative — 99 percent is the work of building the business, but an important 1 percent is convincing people,” Kan relays.
First, explain how the world is a certain way. Describe the problem, why it’s big and who in the market would pay for a solution. Demonstrate that you’re an expert.
Second, explain how the world is changed by your solution to the problem. Frame what’s possible for businesses or consumers once they have your product.
Third, explain how the world is new now that your solution exists. Provide metrics on traction and mechanisms for growth, and show why your team is uniquely equipped to succeed. Identify adjacent markets your product will conquer.
Unlike the frothy days of yore, “people are no longer willing to lose money on a per-unit basis,” says Kan. VCs will demand to understand your unit economics and scalable customer acquisition strategy that turns cash invested into more cash earned.
Perhaps the most important part of the pitch is practice, though. Pitch to fellow founders, investors or angels, but explicitly tell them you want feedback, not money. Running through the pitch over and over boosts confidence, A/B tests narratives and unearths questions. Know your numbers by heart so you always seem sure of where the business is heading, and define a personal pitching style that plays to your personality strengths.
Kan says it all comes down to making investors see your vision for how you’re going to become a massive company.
Atrium Scale helps here by letting you pitch in groups, as well as one-on-one with mentors. Simply being surrounded by people all trying to improve creates an atmosphere conducive to progress rather than getting defensive about criticism. There could be better homework or takeaway materials to help startups continue to improve after the workshop ended, but I heard entrepreneurs work out kinks and trim off tangents that could have derailed their pitch during a real meeting.
The dance
Where Atrium Scale shined brightest was digging into the cadence of the fundraising process. Anyone can work out a decent pitch in their garage, but it takes special know-how to navigate turning that pitch into money in the bank. This is the kind of in-group knowledge that often makes it tough for outsiders to break into Silicon Valley.
You should pitch wide, planning to talk to at least 10 to 20 investors, but knowing it can take 100 ‘nos’ to get a ‘yes.’ Pick investors not based on their firm’s name recognition but their expertise and track record in your industry. Contact investors at least three to four weeks out and schedule meetings in as rapid succession as possible. The goal is to be able to get term sheets back at the same time so you can play firms off each other and pick the best deal.
You’ll start with single partner meetings. You’ll hear back within 24 to 48 hours if they go well, and you can assume they didn’t if you don’t hear back soon. Those that like you will set up multi-partner meetings, and you should ask them what their colleagues will want to know. If that goes well you’ll be brought in for an exhaustive full-partnership pitch where they’ll try to poke holes in your business. Lots of questions means lots of interest, while few questions and VCs bored on their phones means you’re toast.
If the partnership believes in you, you’ll quickly receive a term sheet, but you don’t have to sign it right away. Since you can’t fire your investors, be sure to call their references so you’re sure which you want to work with forever. This also gives you time to go back to other firms you’ve pitched. Don’t say who it’s from, but use your existing term sheet as leverage to get them to give you one or one with a better deal.
Aim for a lead investor that will put in at least 25 percent of the round volume and then fill it out with other firms, strategics and angels. Know that the median delay for investor due diligence is 41 days, so make sure you have enough runway to wait that long after you complete the pitch process. The fundraise should last you 12 to 18 months, but be careful because your spending will expand to take up what’s in the bank. Be ready by then to show you’ve hit new milestones that de-risk your business.
The program also reviewed more advanced topics like raising money from strategic investors, equity versus SAFE financing, crooked deal terms like ratchets and liquidation preferences and how to manage your board. That one-size-fits all info is certainly helpful, but thanks to the small class size, Atrium Scale’s Q&As let founders get answers to industry-specific questions and their own edge cases.
There are plenty of people looking to help startups in Silicon Valley, but few are giving away this high-quality of education for free. Accelerators can charge 7 percent of equity and advisors can charge a percentage point or two. That can be worth a lot if the startup does well. Consultants want cash that pre-A startups rarely have. But Atrium is merely looking for lead generation and it needs them to raise money to be able to afford its legal services. That aligns the workshop well with the outcomes for the companies.
If you have a dumb business idea, no amount of turd polishing will get you legitimate funding. But for startups on to something that just need help communicating, Atrium Scale could be a quick and cheap way to boost their chances of getting picked from the crowd.
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Crypto fans, let’s meet in New York next week
I’ll be helping build a larger meetup focused on pre-ICO companies in New York on April 23 and I’d love to see you there. It will be held at Knotel on April 23 at 7pm and will feature a pitch-off with eight startups — I will write about the best ones — and two panels with some yet-unnamed stars in the space.
I’d love to see you there, so please sign up here. It’s free for early birds, so hurry.
The event will be held at 551 Fifth Avenue on the 9th Floor and you can sign up to pitch here. I’ll have more information as we get closer to the event. This is still an experimental format, so let’s see how it works.
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Parsley Health picks up $10 million to reimagine healthcare
According to Parsley Health, the average adult spends 19 minutes with their physician every year. Seventy percent of the time, these short visits result in the prescription of a medication.
“According to the CDC, 70% of diseases in our country are chronic and lifestyle-driven,” said Parsley Health founder and CEO Dr. Robin Berzin. “And yet instead of addressing the root causes of health problems, medicine’s toolkit is limited to prescriptions and procedures, driving up costs while the average person gets sicker. The answer isn’t just another pill.”
Parsley Health, an annual membership service ($150/month), reimagines what medicine can be. The company focuses on the cause of an illness rather than simply throwing Band-Aids at the problem. But in order to do this, your doctor needs far more than 19 minutes of your time each year.
Today, Parsley announced the close of a $10 million Series A funding led by FirstMark Capital, with participation from Amplo, Trail Mix Ventures, Combine and The Chernin Group. Individual investors such as Dr. Mark Hyman, M.D., director of the Cleveland Clinic Center for Functional Medicine; Nat Turner, CEO of Flatiron Health; Neil Parikh, co-founder of Casper; and Dave Gilboa, co-founder of Warby Parker, also invested in the round.
As part of the financing, FirstMark Capital partner Catherine Ulrich will join the board.
Here’s how Parsley works:
When a user first signs up online, they enter in a wide range of data about themselves, from family health history to past procedures to symptoms and lifestyle. The user then schedules their first visit with their new doctor, which will last for 75 minutes, during which time the doctor will exhaustively go through that information to download a full picture of that patient’s health.
After that visit, the user has full transparency into their medical data and the doctor’s notes. The patient also leaves with a health plan, including lifestyle nutritional advice, and access to their own health coach. Parsley also writes prescriptions, when necessary, and refers patients to top-of-the-line specialists, if needed.
Membership includes five annual visits with their doctors (which rounds out to about four hours), as well as five sessions with their certified health coach. These coaches help patients stay on their health plan, whether it’s advice on physical exercise or getting better sleep or finding take-out places and menu items near their office to eat healthier meals.
Throughout a patient’s membership, they have full access to their medical data and doctor’s notes online, as well as unlimited direct messaging with their doctor. At Parsley, there is always a doctor on call to answer questions about semi-urgent issues like a UTI or a sinus infection.
All of Parsley’s doctors and health coaches are full-time employees at Parsley, and Dr. Berzin told TechCrunch that the company sees a lot of inbound from doctors who want to spend more time with patients and help solve the root of their problems.
Parsley also trains their doctors in functional medicine, which uses a systems-biology approach to better resolve and manage modern chronic disease, as part of Parsley’s clinical fellowship, where they are trained in evaluating thousands of biomarkers to diagnose and treat diseases at their origin.
Parsley is not the first in the space. Forward and One Medical also look to change the way that healthcare is provided in this country, while NextHealth Technologies is focused on supplemental treatments like IV treatments and cryo.
“When I tell people about Parsley, they say ‘wow! That’s what medicine should be’,” said Dr. Berzin. “People are really searching for something better than feeling like they’re paying more and more for healthcare while getting less and less. People are excited to invest in their health and wellness and to have a team that’s working to care for them.”
Parsley has clinics in San Francisco, New York and Los Angeles.
Editor’s Note: An earlier version of this article incorrectly stated that Parsley Health costs $150/year.
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Google Cloud releases Dialogflow Enterprise Edition for building chat apps
Building conversational interfaces is a hot new area for developers. Chatbots can be a way to reduce friction in websites and apps and to give customers quick answers to commonly asked questions in a conversational framework. Today, Google announced it was making Dialogflow Enterprise Edition generally available. It had previously been in beta.
This technology came to them via the API.AI acquisition in 2016. Google wisely decided to change the name of the tool along the way, giving it a moniker that more closely matched what it actually does. The company reports that hundreds of thousands of developers are using the tool already to build conversational interfaces.
This isn’t just an all-Google tool, though. It works across voice interface platforms, including Google Assistant, Amazon Alexa and Facebook Messenger, giving developers a tool to develop their chat apps once and use them across several devices without having to change the underlying code in a significant way.
What’s more, with today’s release the company is providing increased functionality and making it easier to transition to the enterprise edition at the same time.
“Starting today, you can combine batch operations that would have required multiple API calls into a single API call, reducing lines of code and shortening development time. Dialogflow API V2 is also now the default for all new agents, integrating with Google Cloud Speech-to-Text, enabling agent management via API, supporting gRPC, and providing an easy transition to Enterprise Edition with no code migration,” Dan Aharon, Google’s product manager for Cloud AI, wrote in a company blog post announcing the tool.
The company showed off a few new customers using Dialogflow to build chat interfaces for their customers, including KLM Royal Dutch Airlines, Domino’s and Ticketmaster.
The new tool, which is available today, supports more than 30 languages and as a generally available enterprise product comes with a support package and service level agreement (SLA).
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