Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

Top Stories

Here Comes Apple One

Thanks for all the market research, app developers.

Image Credits: Apple

Apple issued a slight beat on earnings this week, despite the COVID pandemic and a 20% decline in iPhone sales year-over-year, including a drop in China.

But for app developers who already have a large install base to serve across Apple’s mobile devices, it’s Apple’s expansion into the services market that may draw more attention. Apple continues to edge its way into nearly every category that has proven popular on mobile devices. Streaming music? Apple Music. Streaming TV and movies? Apple TV+. Paid news and magazine subscriptions? Apple News+. Cloud storage? iCloud. Payments? Apple Card and Apple Pay. Gaming? Apple Arcade. And so on.

Its latest effort, launching on October 30, is Apple One — a way for users to pay for multiple Apple services in a single bundle.

At launch, the $14.95 per month Individual bundle includes Apple Music, Apple TV+, 50GB of iCloud storage and Apple Arcade. The same thing as a Family Plan (up to six people) is $19.95 per month and ups the iCloud storage to 200GB. And for $29.95 per month on the Premier plan, you get 2TB of iCloud storage, and add in Apple News+ and the new Fitness+, which arrives later this quarter.

Image Credits: Apple

While each plan saves a little money than if paying individually, the most value can be found at the higher end. Which means Fitness+ could immediately gain an influx of new subscribers, even if the user primarily opted for the Premier plan because of its access to News+. That means Fitness+ doesn’t even have to try that hard to compete with third-party membership-based fitness apps. Instead, Fitness+ acquires users by its association with other known and valued Apple services.

As Apple stretches itself into new services markets — say, AirTags subscriptions, or something we haven’t thought of yet — like subscription medications (Health+?), financial news (Stocks+?), ridesharing (Car+?) social (FaceTime+?) — it will have a head start on user acquisition.

For app developers finding themselves having done the job of proving the market for a subscription-based business in their category, they’ll then be thrust into the role of trying to value add on top of a baseline product that offers a deeper integration with the iOS operating system than they’re allowed.

Cloud gaming’s unknown future on iOS

Image Credits: Facebook Gaming featuring Asphalt Legends

Speaking of services…this week Facebook launched its cloud gaming service that offers free-to-play games that Facebook users can play without leaving the social app.

The games are streamed from the cloud (meaning, Facebook’s servers), instead of requiring users download the titles locally.

This format for mobile gaming makes sense in mature markets that are now steadily moving to 5G. However, Facebook’s new service is only available on desktop and Android — not on iOS.

Facebook excluded Apple devices from the launch, citing Apple’s “arbitrary” policies around third-party apps. Though Apple recently updated its guidelines, it still doesn’t allow applications to act like third-party app stores where games are bought, used and streamed from within the main app directly. Instead, it’s permitting the model GameClub pioneered as a means of working around Apple’s rules last year. That is, there is a main app where users can subscribe and browse a catalog, but each individual game has to be listed on the App Store individually and be playable in some way — even if it’s just a demo.

There’s one school of thought (a point Facebook keeps pushing) that says Apple’s rules here are losing it money.

After all, Facebook says its avoidance of iOS is not about the 30% commission — it’s paying that on Android, in line with Google Play policies. Oh, why oh why doesn’t Apple want its 30%, too?, Facebook cries.

The answer is because Facebook’s iOS snub is part of its long-term strategy. To say it’s not about the money is disingenuous. Facebook at launch is already taking the 30% when in-app purchases are made on the web version of its cloud gaming services.

What’s really happening is that Facebook is making a calculated risk. It’s betting that regulators will ultimately force Apple to permit third-party app stores on iOS and maybe even end Apple’s requirements around in-app purchases, allowing alternative payments. If that comes to pass, the 30% goes back in Facebook’s own pocket.

Even if regulators only push Apple to allow third-party payment systems in addition to the Apple Pay requirement, Facebook could still make money when users picked the Facebook payment option. And it’s ready. Facebook has already built out Facebook Pay infrastructure and it’s now encouraging Facebook Pay usage by redesigning Facebook and Instagram as online shopping platforms.

This all makes the near-term loss of cloud gaming users on iOS worth the risk. Instead of catering to the iOS base, Facebook is raising a stink about “Apple’s rules” to make it look like Apple is harming the market and stifling competition. In reality, Facebook could very easily list its handful of gaming titles separately, if it desired, as per Apple’s current rules — especially because many are more casual games than those found on xCloud or Stadia.

But that wouldn’t help its larger goal: to see Apple’s App Store regulated.

It’s not even like Facebook is being shy about its motives here. CEO Mark Zuckerberg has publicly stated that Apple’s control of the App Store “deserves scrutiny.”

“I do think that there are questions that people should be looking into about that control of the App store and whether that is enabling as robust of a competitive dynamic,” he said in an Axios interview. “…I think some of the behavior certainly raises questions. And I do think it’s something that deserves scrutiny.”

TikTok Goes Shopping

Image Credits: Shopify

Remember how Walmart angled in on that TikTok acquisition (whose status is still unknown) and everyone was wondering what the heck Walmart was doing? Well, it was thinking ahead.

TikTok this week partnered with Shopify on a social commerce initiative. The deal aims to make it easier for Shopify’s moer than 1 million merchants to reach TikTok’s younger audience and drive sales, by creating and optimizing TikTok campaigns from their Shopify dashboard.

The ad tools allow merchants to create native, shareable content that turns their products into In-Feed video ads that will resonate with the TikTok community. Merchants will be able to target their audiences across gender, age, user behavior and video category (see, TikTok does have SOME data on you!), and then track the campaign’s performance over time.

As a part of this effort, Shopify merchants can also install or connect their “TikTok Pixel” — a tool that helps them to more easily track conversions driven by their TikTok ad campaigns.

The campaigns’ costs will vary, based on the merchant’s own business objectives and how much they want to spend.

The partnership will eventually expand to include other in-app shopping features, as well.

The TikTok-Shopify partnership could help the video platform better compete against other sources of social commerce, including the growing number of live stream shopping apps as well as efforts from Facebook and its family of apps.

Weekly News Round-Up

Platforms

• Epic says Apple has “no right to the fruits of Epic’s labor” in its latest court filing. “Consumers who choose to make in-app purchases in Fortnite pay for Epic’s creativity, innovation and effort—to enjoy an experience that Epic has designed,” the filing said. The company is making the point that it did the work to create an in-game marketplace for its players to use. The App Store and its payments system are not necessary — they’re forced upon Epic so Apple can ” maintain its monopoly,” Epic’s lawyers said.
• Adoption of iOS 14 reaches 46.36% six weeks after launch, according to Mixpanel data.
• Apple releases App Store server notifications into production. The notifications provide developers with real-time updates on a subscriber’s status, allowing app makers to create customized user experiences.
• Facebook provides new guidance for partners on iOS 14 SKAdNetwork. The company said it will release an updated version of the Facebook SDK by early Q1 to support the upcoming iOS 14 privacy feature requirements, noting that “guidance from Apple remains limited.” The new version of the Facebook SDK will provide support for Apple’s SKAdNetwork API and conversion value management.
• Google tests a new “app comparison” feature on Google Play that lets you analyze multiple apps across metrics, like ease of use, features, downloads and star rating. Google confirmed the test was live, but downplayed it saying it was “small” and the company had no plans for a broader rollout at this time.

• Apple search crawler activity could be pointing to Apple’s plans to build its own search engine to rival Google. In iOS 14, Apple can now display its own search results when users type in queries from its home screen, bypassing Google.
• ExxonMobile embraces Apple’s App Clips. The fuel company will bring the lightweight App Clips and Apple Pay to more than 11,500 Exxon and Mobil gas stations across the U.S., allowing consumers to scan a QR code on the pump to pay via an App Clip version of the ExxonMobil app.

Policies

• Search engine app makers tell the European Commission that the Android choice screen isn’t working to remedy antitrust issues. Ecosia, DuckDuckGo, Lilo, Qwant and Seznam signed the letter to the Commission.
• Big technology platforms asked the E.U. to protect them from legal liabilities over removing hate speech and illegal content, reports Bloomberg, citing a paper from Edima, an association representing Alphabet’s Google, Facebook, ByteDance and others.

Trends

Image Credits: Sensor Tower

• U.S. home improvement brand app adoption doubled over 2019 since March, per Sensor Tower. As COVID stuck people at home, first-time installs of top home improvement brand apps in the U.S. from March to September 2020 doubled year-over-year, climbing 103%. MAUs grew 35% during that time.
• U.S. Adoption of Food & Drink apps climbed 30% during COVID-19, also per Sensor Tower. Worldwide, these apps saw a slowdown in download growth in Q3 with a +14% growth rate — slower than other previous third quarters.
• Samsung reclaims the No. 1 spot in the Indian smartphone market, beating Xiaomi. The new data from marketing research firm Counterpoint conflicts with a report last week from Canalys, making it a close race.
• Facebook is losing users in the U.S. and Canada. The company reported during its Q3 earnings that user growth in these key markets was slowing after the COVID surge. The company now has 196 million users in North America, down from 198 million in Q2, and it expects the decline to continue. DAUs and MAUs in these markets were also flat or down slightly in the quarter.

Services

• T-Mobile launches its own skinny bundles of live TV for phones. The telco introduced its TVision lineup, which includes four tiers, Vibe, Live, Live+ and Live Zone, at $10, $40, $50 and $60 per month, respectively. Vibe includes more than 30 channels of live and on-demand content, while Live adds live news and sports. The other tiers add even more channels. Add-ons like Starz, Showtime and Epix are also available.
• Facebook launches cloud gaming on desktop and Android, but not on iOS. The company excluded Apple devices from its free-to-play gaming service due to what it called Apple’s “arbitrary” policies.
• Amazon-owned Audible further expands into podcasts. The e-book service is venturing further into podcasts with the addition of 100,000 third-party audio programs it will use to upsell customers into its paid membership plans where they can access an expanded array of originals, or also download audiobooks.
• Spotify to raise prices for its streaming service plans. During its Q3 earnings, CEO Daniel Ek said the company would “further expand price increases” as a result of its expanded content library of originals and exclusive podcasts, which provide more value to listeners. The company has tested price hikes for its Family Plan in several markets already.

Security/Privacy

• True, a social networking app that promised to protect user privacy, found to be exposing private messages and user locations.
• A massive analysis of the COVID-19 tracing app ecosystem tracks the permissions the apps require, SDKs in use, location-tracking abilities and more.
• PUBG Mobile to terminate all service and access to users in India on October 30, after the country banned the game from the world’s second largest internet market over cybersecurity concerns due to its China ties. PUBG already tried cutting ties with its Chinese publishing partner, Tencent Games, but critics called this a Band-Aid if Tencent still had a hand in game development.

App News

• Sony’s PlayStation app gets an upgrade before the PS5 launch on November 12. The updated app introduced a completely redesigned interface, with a home screen where you can see what friends are playing, voice chat support for up to 15 people, integrated messages and PS Store and news. When, the PS5 arrives, the app will allow users to remotely launch their games, manage storage and more.
• Instagram extends time limits on live streams to four hours, the same as Facebook live streams on mobile. It will also soon support archiving of live video content.
• YouTube revamps its mobile app with new gestures, video chapter lists and others changes. The video chapter lists expand the feature introduced in May, and now turn chapters into scrollable lists, each with their own video thumbnail.
• Tinder roll outs Face To Face, its opt-in video chat feature, to users worldwide. The dating company was pushed to accelerate its virtual options due to the pandemic.

• Microsoft Office apps add mouse and trackpad support for iPadOS, meaning you can now use Apple’s new Magic Keyboard with apps like Word, Excel and PowerPoint.
• Cryptocurrency exchange Coinbase is launching a debit card in the U.S. later this year. The Visa debit will work with Visa-compatible payment terminals, online checkout interfaces and ATMs. A mobile app will allow you to control how you want to spend your cryptocurrencies.
• Eko asks court to freeze Quibi assets related to its turnstyle tech. Even though Quibi is shutting down, Eko’s case against the mobile streaming service continues. Eko wants a payout of at least $96.5 million for infringing on its intellectual property.
• Netflix engineers detail the studio apps shift to Kotlin Multiplatform in new blog post.
• TikTok countersues Triller. The China-based, ByteDance-owned video app asks a U.S. judge to rule on Triller’s patent infringement allegations. Triller had filed a suit in late July,
• TikTok parent ByteDance launches a smart lamp with a camera, display and virtual assistant. The device works with a mobile app and its aimed at helping kids with homework, in an education push.
• TikTok expands its in-app Election Guide to include Election Day resources like information about polling locations and hours, services that can help people having voting difficulties and those offering other details how the voting process works, as well as live election results from the AP.

Funding and M&A

• Corsair acquires EpocCam. Gaming peripheral maker bought smartphone app EpocCam, a top video app that lets users turn their iPhone or iPad into a high-def webcam for their Windows or Mac PC. The app grew in popularity due to the pandemic, and its wide support for major video apps includes Zoom, Skype, OBS Studio, Google Meet and Microsoft Teams. Under Corsair’s Elgato subsidiary, the app has been relaunched to fit into the company’s expanded ecosystem of content creation tools.
• Digital health startup Nutrium raises $4.9 million led by Indico Capital for its service and app which links dietitians and their patients.
• Bay Area-based Jiko raises $40 million Series A from Upfront Ventures and Wafra Inc. for its mobile banking startup.
• Helsinki-headquartered app management startup AppFollow raises $5 million Series A led by Nauta Capital. The company now has 70,000 clients on its platform, including McDonald’s, Disney, Expedia, PicsArt, Flo, Jam City and Discord.
• Mobile device management startup Kandji raises $21 million Series A in a round led by Greycroft. The startup’s MDM solution helps larger companies manage their fleet of Apple devices and keep them in compliance.
• SimilarWeb raises $120 million for its AI-based market intelligence platform for websites and mobile apps. The company counts more than half of the Fortune 100 as customers, including Walmart, P&G, Adidas and Google.
• Phone forensics company Grayshift, a startup that helps feds break into iPhones, raises $47 million. The round was led by PeakEquity Partners, for the company that claims to have doubled adoption, revenues, and employees in the last year.
• Intelligent visual assistance startup TechSee raises $30 million to automate field work with AR and computer vision.
• Betty Labs, parent company to Locker Room, a new social audio app connecting sports fans for live conversations, raised $9.3 million in seed funding led by Google Ventures.
• Mobile gaming company Scopely raises $340 million at a $3.3 billion valuation. Scopely had just raised $200 million last year. Unlike other gaming giants, Epic and Unity, the company doesn’t make tools for gaming, it focuses on keeping players engaged. Today, those users spend 80 minutes per day on games like its Star Trek Fleet Command, MARVEL Strike Force, Scrabble GO and YAHTZEE with Buddies.

Recommended Downloads

Filtertune

Image Credits: Lightricks

From the makers of Facetune, this new iOS app lets influencers create custom filters that can be shared across social media along with their photos, allowing fans to snap a screenshot of the photo — which includes a QR code on a banner — into order to import the custom preset photo filter into the app’s library. The filter can then be used to edit photos, and further personalized by the end user.

Clips 3.0 eyes TikTok with its biggest update ever

Image Credits: Apple

Apple rolled out an updated version of its casual video creation app, Clips. Before, the app only supported Instagram-like square video, but the new version, Clips 3.0, expands to include support for vertical and horizontal video, making it easier to export videos to apps like TikTok.

The new app also features a refreshed interface on iPhone and iPad, HDR recording with iPhone 12, support for a mouse, trackpad and keyboard cases on iPad, along with other smaller changes, like new stickers, sounds and posters. There are eight new social stickers (like “Sound On” for Instagram Stories), 24 new royalty-free soundtracks (bringing the total library to 100), and six new arrows and shapes, as well as a set of poster templates to use within videos.

Backbone

Image Credits: Backbone

The Backbone app works with the new $99 Backbone One mobile gaming controller for iPhone that lets you play games like Call of Duty: Mobile, Minecraft, Asphalt 9: Legends, hundreds of Apple Arcade titles and other iPhone games that support game controllers.

The controller also includes a Capture Button that lets you record gaming clips to share directly to social platforms like Instagram Stories and iMessage.

Read the TechCrunch review here.

New Releases in iOS 14 Widgets

Image Credits: Pinterest

• Pinterest: The pinboarding app jumps into widgets with an update that lets you put either a small or large widget on your home screen that pulls photos from a Pinterest board — either one you follow or one you created. This allows you to set up a widget that rotates through a set of photos from an online resource, instead of requiring you to keep an on-device photo gallery.
• TikTok: The short form video app updated this week to include three different widgets from small to large that allow you to easily access trending videos and sounds right from your iOS home screen.
• Widgit: This new widget lets you put GIF-like animated images on your iOS 14 home screen (in-app purchases).

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

As promised, the whole gang is back, this time to chew on the biggest, baddest, worstest, and most troubling earnings reports from the current cycle. This week saw Amazon and Alphabet and Microsoft and Apple and Facebook report, along with a host of smaller companies.

Spoiler alert: there were more tricks than treats.

• Danny, Natasha and Alex wanted to get to the bottom of the big tech results, asking what really mattered from each of them?
• Then it was time to dig into themes. We saw plan price increases coming from Netflix and Spotify, advertising getting a boo-st from politics and 2020’s overall meltdown, and boo-ming billions of consumer interest in…desktops.
• After that, a dive into the results of smaller SaaS and cloud companies, picking out trends that might help us see around the corner a bit; is the tech boom slowing, or is corporate growth merely failing to keep up with inflated investor expectations?
• This week felt like a shudder ran through the spine of our economy. The earnings paint a neutral picture, which isn’t exactly an exhale to rejoice over. The coronavirus continues to be a threat that poses a risk to public businesses. For startups, that could mean a less frothy exit market nad lower valuations. And for the public, it means that the uncertain is still ahead of us. So wear a mask.

And with that, the show is back Monday morning. Have a good weekend, everyone.

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

For years — decades, even — there was little question about whether you could become a venture capitalist if you weren’t comfortable financially. You couldn’t. The people and institutions that invest in venture funds want to know that fund managers have their own “skin in the game,” so they’ve long required a sizable check from the investor’s own pocket before jumping aboard. Think 2% to 3% of the fund’s total assets, which often equates to millions of dollars.

In fact, five years ago, I wrote that the real obstacle to becoming a venture capitalist ties less to gender than to financial inequality. I focused then on women, who are paid less (especially Black and Hispanic women), and who possess less wealth. But the same is true of anyone of lesser means.

Consider that one or two partners trying to raise a $50 million debut fund have to come up with $1.5 million. They’ll collect management fees off that $50 million fund — the standard is 2% annually for the fund’s investment period — but they have to use that $1 million per year to pay for everyone’s salaries, along with rent, auditing, legal costs and back-office administration fees. That doesn’t leave much, which is why having something to start with helps.

LPs: The ≧1% of a fund capital commitment you expect from GPs makes it hard for POCs to raise funds.

Consider that “for a $20M fund, a 2% commitment with 2 GPs is still a $200K commitment for each partner.” This is out of reach for many of us. https://t.co/bguXpa3CiY

— lolitataub (@lolitataub) October 29, 2020

Thankfully, things are changing, with a growing number of ways that aspiring VCs can jump into the business who can’t write a big check. None of these approaches can guarantee success in raising a fund, but these are paths that other VCs have effectively used in the past when starting out.

1.) Find investors, i.e. limited partners, who are willing to take less than 3% and maybe even less than 1% of the overall fund size being targeted. You’ll likely find fewer investors as that “commit” shrinks. But for example Joanna Rupp, who runs the $1.1 billion private equity portfolio for the University of Chicago’s endowment, suggests that both she and other managers she knows are willing to be flexible based on the “specific situation of the GP.”

Says Rupp, “I think there are industry ‘norms,’ but we haven’t required a [general partner] commitment from younger GPs when we have felt that they don’t have the financial means.”

Bob Standish, founder of the fund administration firm Standish Management, echoes the sentiment, saying that a smaller general partner commitment in exchange for special investor economics is also fairly common. “You might see a reduced management fee for the LP for helping them or reduced carry or both, and that has been done for years.”

2.) Learn more about what are called management fee offsets, which investors in venture funds often determine to be reasonable. These aren’t uncommon, says, Michael Kim of Cendana Capital, a firm that has stakes in dozens of seed stage funds, because they also offer tax advantages (though the IRS has talked about doing away with these).

How does theses work? Say your “commit” was $1 million over 10 years (the standard life of a fund). Instead of trying to come up with $1 million that you presumably don’t have, you can offset up to 80% of that, putting in $200,000 instead but reducing your management fees by that same amount over time so that it’s a wash and you’re still getting credit for the entire $1 million. You’re basically converting fee income into the investment you’re supposed to make.

3.) Use your existing portfolio companies as collateral. Kim has had at least two managers whose brands have come to be highly regarded launch a fund not with a “commit” but rather by bringing to the table stakes in startups they’d funded as angel investors.

In both of these cases, it was a great deal for Kim, who says the companies were quickly marked up. For the fund managers’ part, it meant not having to put more of their own money into the funds.

4.) Make a deal with wealthier friends if you can. When Kim launched his fund of funds to invest in venture managers after working for years as a VC himself, he raised $1 million in working capital from six friends to get it off the ground. The money gave Kim, who had a mortgage at the time and young children, enough runway for two years. Obviously, your friends have to be willing to gamble on you, but sweeteners certainly help, too. In Kim’s case, he gave his friends a percentage of Cendana’s economics in perpetuity.

5.) Get a bank loan. Rupp said she would be uncomfortable if a GP’s commit was being funded through a bank loan for several reasons, including that there’s no guarantee a fund manager will make money on his or her fund, a loan adds risk on top of risk, and because should a manager need liquidity related to that loan, he or she might sell a strongly performing position too early.

That said, loans aren’t uncommon, says Raynard. He says banks with venture capital relationships like Silicon Valley bank and First Republic are typically happy to lend a fund manager a line of credit to help him or her to make capital calls, though he says it does depend on who else is involved with the fund. “As long as it’s a diverse group of LPs,” the banks are comfortable moving forward in exchange for winning over a new fund’s business, he suggests.

6.) Consider the merits of so-called front loading. This is a technique with which “more creating LPs can sometimes get comfortable,” says Kim. It’s also how investor Chris Sacca, now a billionaire, got started when he first turned to fund management. How does it work? Say a fund manager is getting paid a 2.5% management fee over the life of a 10-year fund. Over that decade, that amounts to 25% of the fund. Typically, management fees decline over time, to 2% and even slightly lower because you are typically no longer actively managing it but rather managing out the bets you’ve made in the first few years.

Some beginning managers blend that management fee — say it’s 20% over the fund’s duration — and pay themselves a higher percentage — say 5% for each of its first three years — until by the end of the fund’s life, the manager is receiving no management fee for it at all.

Without carry, that could mean no income if you aren’t yet seeing profits from your investments. But presumably — especially given pacing in recent years — you, the general partner, have raised another fund by the time that happens so have resources coming in from that second fund.

These are just a few of the ways to get started. There are other paths to take, too, notes Lo Toney of Plexo Capital — which, like Cendana Capital — has stakes in many venture funds. Just one of these is to structure to use a self-directed IRA to finance that GP “commit.” Another is to sell a portion of the management company or to sell a greater percentage of future profits and to use those proceeds, though VCs Charles Hudson of Precursor Ventures and Eva Ho of Fika Ventures avoided that path and suggested that first-time managers do the same if they can.

Either way, suggests Toney, a former partner with the Alphabet’s venture arm, GV, it’s important to know  one’s options but keep in mind, too, that what you start with may ultimately prove irrelevant.

Said Toney via email this week: “I have not seen any data on the front end of a VC’s career that wealth indicates future success.”

TikTok has won another battle in its fight against the Trump administration’s ban of its video-sharing app in the U.S. — or, more accurately in this case, the TikTok community won a battle. On Friday, a federal judge in Pennsylvania issued an injunction that blocked the restrictions that would have otherwise blocked TikTok from operating in the U.S. on November 12.

This particular lawsuit was not led by TikTok itself, but rather a group of TikTok creators who use the app to engage with their million-plus followers.

According to the court documents, plaintiff Douglas Marland has 2.7 million followers on the app; Alec Chambers has 1.8 million followers; and Cosette Rinab has 2.3 million followers. The creators argued — successfully as it turns out — that they would lose access to their followers in the event of a ban, as well as the “professional opportunities afforded by TikTok.” In other words, they’d lose their brand sponsorships — meaning, their income.

This is not the first time that the U.S. courts have sided with TikTok to block the Trump administration’s proposed ban over the Chinese-owned video sharing app. Last month, a D.C. judge blocked the ban that would have removed the app from being listed in U.S. app stores run by Apple and Google.

That ruling had not, however, stopped the November 12 ban that would have blocked companies from providing internet hosting services that would have allowed TikTok to continue to operate in the U.S.

The Trump administration had moved to block the TikTok app from operating in the U.S. due to its Chinese parent company, ByteDance, claiming it was a national security threat. The core argument from the judge in this ruling was the “Government’s own descriptions of the national security threat posed by the TikTok app are phrased in the hypothetical.”

That hypothetical risk was unable to be stated by the government, the judge argued, to be such a risk that it outweighed the public interest. The interest, in this case, was the more than 100 million users of TikTok and the creators like Marland, Chambers and Rinab that utilized it to spread “informational materials,” which allowed the judge to rule that the ban would shut down a platform for expressive activity.

“We are deeply moved by the outpouring of support from our creators, who have worked to protect their rights to expression, their careers, and to help small businesses, particularly during the pandemic,” said Vanessa Pappas, Interim Global Head of TikTok, in a statement. “We stand behind our community as they share their voices, and we are committed to continuing to provide a home for them to do so,” she added.

The TikTok community coming to the rescue on this one aspect of the overall TikTok picture just elevates this whole story. Though the company has been relatively quiet through this whole process, Pappas has thanked the community several times for its outpouring of support. Though there were some initial waves of “grief” on the app with creators frantically recommending people follow them on other platforms, that has morphed over time into more of a “let’s band together” vibe. This activity coalesced around a big swell in voting advocacy on the platform, where many creators are too young to actually participate but view voting messaging as their way to participate.

TikTok has remained active in the product department through the whole mess, shipping elections guides and trying to ban QAnon conspiracy spread, even as Pakistan banned and then un-banned the app.

Asymptomatic spread of COVID-19 is a huge contributor to the pandemic, but of course if there are no symptoms, how can anyone tell they should isolate or get a test? MIT research has found that hidden in the sound of coughs is a pattern that subtly, but reliably, marks a person as likely to be in the early stages of infection. It could make for a much-needed early warning system for the virus.

The sound of one’s cough can be very revealing, as doctors have known for many years. AI models have been built to detect conditions like pneumonia, asthma and even neuromuscular diseases, all of which alter how a person coughs in different ways.

Before the pandemic, researcher Brian Subirana had shown that coughs may even help predict Alzheimer’s — mirroring results from IBM research published just a week ago. More recently, Subirana thought if the AI was capable of telling so much from so little, perhaps COVID-19 might be something it could suss out as well. In fact, he isn’t the first to think so.

He and his team set up a site where people could contribute coughs, and ended up assembling “the largest research cough dataset that we know of.” Thousands of samples were used to train up the AI model, which they document in an open access IEEE journal.

The model seems to have detected subtle patterns in vocal strength, sentiment, lung and respiratory performance, and muscular degradation, to the point where it was able to identify 100% of coughs by asymptomatic COVID-19 carriers and 98.5% of symptomatic ones, with a specificity of 83% and 94% respectively, meaning it doesn’t have large numbers of false positives or negatives.

“We think this shows that the way you produce sound, changes when you have COVID, even if you’re asymptomatic,” said Subirana of the surprising finding. However, he cautioned that although the system was good at detecting non-healthy coughs, it should not be used as a diagnosis tool for people with symptoms but unsure of the underlying cause.

I asked Subirana for a bit more clarity on this point.

“The tool is detecting features that allow it to discriminate the subjects that have COVID from the ones that don’t,” he wrote in an email. “Previous research has shown you can pick up other conditions too. One could design a system that would discriminate between many conditions but our focus was on picking out COVID from the rest.”

For the statistics-minded out there, the incredibly high success rate may raise some red flags. Machine learning models are great at a lot of things, but 100% isn’t a number you see a lot, and when you do you start thinking of other ways it might have been produced by accident. No doubt the findings will need to be proven on other data sets and verified by other researchers, but it’s also possible that there’s simply a reliable tell in COVID-induced coughs that a computer listening system can hear quite easily.

The team is collaborating with several hospitals to build a more diverse data set, but is also working with a private company to put together an app to distribute the tool for wider use, if it can get FDA approval.

Major Internet platforms will be required to open up their algorithms to regulatory oversight under proposals European lawmakers are set to introduce next month.

In a speech today Commission EVP Margrethe Vestager suggested algorithmic accountability will be a key plank of the forthcoming legislative digital package — with draft rules incoming that will require platforms to explain how their recommendation systems work as well as offering users more control over them.

“The rules we’re preparing would give all digital services a duty to cooperate with regulators. And the biggest platforms would have to provide more information on the way their algorithms work, when regulators ask for it,” she said, adding that platforms will also “have to give regulators and researchers access to the data they hold — including ad archives”.

While social media platforms like Facebook have set up ad archives ahead of any regulatory requirement to do so there are ongoing complaints from third party researchers about how the information is structured and how (in)accessible it is to independent study.

More information for users around ad targeting is another planned requirement, along with greater reporting requirements for platforms to explain content moderation decisions, per Vestager — who also gave a preview of what’s coming down the pipe in the Digital Services Act and Digital Markets Act in another speech earlier this week.

Regional lawmakers are responding to concerns that ‘blackbox’ algorithms can have damaging effects on individuals and societies — flowing from how they process data and order and rank information, with risks such as discrimination, amplification of bias and abusive targeting of vulnerable individuals and groups.

The Commission has said it’s working on binding transparency rules with the aim of forcing tech giants to take more responsibility for the content their platforms amplify and monetize. Although the devil will be in both the detail of the requirements and how effectively they will be enforced — but a draft of the plan is due in a month or so.

“One of the main goals of the Digital Services Act that we’ll put forward in December will be to protect our democracy, by making sure that platforms are transparent about the way these algorithms work – and make those platforms more accountable for the decisions they make,” said Vestager in a speech today at an event organized by not-for-profit research advocacy group AlgorithmWatch.

“The proposals that we’re working on would mean platforms have to tell users how their recommender systems decide which content to show – so it’s easier for us to judge whether to trust the picture of the world that they give us or not.”

Under the planned rules the most powerful Internet platforms — so-called ‘gatekeepers’ in EU parlance — will have to provide regular reports on “the content moderation tools they use, and the accuracy and results of those tools”, as Vestager put it.

There will also be specific disclosure requirements for ad targeting that go beyond the current fuzzy disclosures that platforms like Facebook may already offer (in its case via the ‘why am I seeing this ad?’ menu).

“Better information” will have to be provided, she said, such as platforms telling users “who placed a certain ad, and why it’s been targeted at us”. The overarching aim will be to ensure users of such platforms have “a better idea of who’s trying to influence us — and a better chance of spotting when algorithms are discriminating against us,” she added. 

Today a coalition of 46 civic society organizations led by AlgorithmWatch urged the Commission to make sure transparency requirements in the forthcoming legislation are “meaningful” — calling for it to introduce “comprehensive data access frameworks” that provide watchdogs with the tools they need to hold platforms accountable, as well as to enable journalists, academics, and civil society to “challenge and scrutinize power”.

The group’s set of recommendations call for binding disclosure obligations based on the technical functionalities of dominant platforms; a single EU institution “with a clear legal mandate to enable access to data and to enforce transparency obligations”; and provisions to ensure data collection complies with EU data protection rules.

Another way to rebalance the power asymmetry between data-mining platform giants and the individuals who they track, profile and target could involve requirements to let users switch off algorithmic feeds entirely if they wish — opting out of the possibility of data-driven discrimination or manipulation. But it remains to be seen whether EU lawmakers will go that far in the forthcoming legislative proposals.

The only hints Vestager offered on this front was to say that the planned rules “will also give more power to users — so algorithms don’t have the last word about what we get to see, and what we don’t get to see”.

Platforms will also have to give users “the ability to influence the choices that recommender systems make on our behalf”, she also said.

In further remarks she confirmed there will be more detailed reporting requirements for digital services around content moderation and takedowns — saying they will have to tell users when they take content down, and give them “effective rights to challenge that removal”. While there is widespread public support across the bloc for rebooting the rules of play for digital giants there are also strongly held views that regulation should not impinge on online freedom of expression — such as by encouraging platforms to shrink their regulatory risk by applying upload filters or removing controversial content without a valid reason.

The proposals will need the support of EU Member States, via the European Council, and elected representatives in the European parliament.

The latter has already voted in support of tighter rules on ad targeting. MEPs also urged the Commission to reject the use of upload filters or any form of ex-ante content control for harmful or illegal content, saying the final decision on whether content is legal or not should be taken by an independent judiciary.

Simultaneously the Commission is working on shaping rules specifically for applications that use artificial intelligence — but that legislative package is not due until next year.

Vestager confirmed that will be introduced early in 2021 with the aim of creating “an AI ecosystem of trust”.

Facebook today confirmed that it will be limiting the distribution of the hashtag “save our children.” Over the past several months, the phrase — and ones like it — have become associated with QAnon. As a popular splinter group, these terms have served to provide a kind of innocuous cover for the popular online conspiracy theory.

A spokesperson for the social network confirmed the move today, noting that child safety resources will be prioritized in search above those potentially tied to QAnon.

“Earlier this week, we stepped up how we enforce our rules against QAnon on pages, events, and groups,” a spokesperson told TechCrunch. “Starting today, we’re limiting the distribution of the ‘save our children’ hashtag given we’ve found that content tied to it is now associated with QAnon. When people search for it, they will now see the credible child safety resources.”

The company finally took action to remove the constellation of dangerous conspiracy theories with a ban on QAnon content across both Facebook and Instagram. It  had previously announced a ban on QAnon groups that “discussed potential violence” but the expanded ban evinced a deeper understanding of how conspiracies draw in and radicalize regular users. The ban has actually proven quite successful so far, making it more more difficult for QAnon-related posts and accounts to be discovered and amplified.

Over the summer, the service began to crack down on QAnon-adjacent hashtags like SaveTheChildren. It even went so far as temporarily blocking the phrase, which, for around a century, has been associated with nonprofit youth organizations. “We temporarily blocked the hashtag as it was surfacing low-quality content,” Facebook told the press at the time. “The hashtag has since been restored, and we will continue to monitor for content that violates our community standards.”

By then, however, the movement had already gained life beyond social media, with several well-attended rallies being held across the U.S. and in different locations across the globe. Organizers have broadly purported to be protesting child exploitation, ranging from accusations of pedophilia among the Hollywood elite to outrage over the Netflix film “Cuties.”

In August, the U.S.-based Save the Children Federation, Inc. released a statement seeking to clarify and distance itself from the trend. “Our name in hashtag form has been experiencing unusually high volumes and causing confusion among our supporters and the general public,” the org wrote. “In the United States, Save the Children is the sole owner of the registered trademark ‘Save the Children.’ While people may choose to use our organization’s name as a hashtag to make their point on different issues, we are not affiliated or associated with any of these campaigns.”

Facebook’s crackdown on QAnon and adjacent #SaveTheChildren content come after the company allowed the dangerous conspiracy theory group to thrive on its platform for years, moving from the fringes of online life into its center. While President Trump and a handful of QAnon-friendly Republican political figures have given the conspiracies a boost, mainstream social networks allowed adherents to ferry the revelations of so-called “Q drops” from the obscure and often extreme message board 8chan into the center of American political life.

Some users happen upon conspiracy content organically, but algorithmic recommendations on platforms like Facebook and YouTube are known to usher users from the edges of conspiracies like QAnon into their often more extreme core ideas. Dedicated QAnon believers are responsible for a number of real-world violent actions, including an armed occupation of the Hoover Dam. Matthew Wright, the man who pled guilty to a terrorism charge for blocking the bridge, explained in a video that his agitation stemmed from President Trump’s failure to arrest his political enemies, which disappointed QAnon believers. Last year, a 29-year-old QAnon adherent shot and killed a mob boss who he believed was part of the “deep state” — a frequent preoccupation of Q followers.

In 2015, then-Twitter product manager Terri Burns penned a piece about staying optimistic despite the sexism and racism that exists expansively within tech. “America has broke my heart countless times, but I believe that technology can be a tool to mend some of the woes of the world and produce tools to better humanity,” she wrote.

“It’s hard to continue to believe this when the industry holding this power takes so little interest in the basic rights of women and people of color. I actively choose to remain hopeful under the belief that myself and many of the incredible people also working toward equality and justice in technology and in America will make a difference.”

Burns left Twitter in 2017 to join GV, formerly known as Google Ventures. Her hope has now been met with recognition. GV has promoted Terri Burns to partner, making her the first Black woman to hold that role — and the youngest ever. Making history comes with its own set of pressures and spotlight, but Burns seems focused on simply finding a new place to put her optimism and hope: Gen Z.

Read on for a Q&A with Burns about her investment thesis, role change and plans as partner.

TechCrunch: Before you were in venture, you held product roles at Venmo and Twitter. When did you know that computer science was the right field for you? 

Terri Burns: I grew up in Southern California, in Long Beach. And I think I’ve always just been a really curious kid. For me, I always spent a ton of time just asking questions and I always liked science. But, I actually did not have any interest in computer science until college.

I went to NYU and I remember thinking my freshman year, major-wise, that I’m not entirely sure what it is that I want to do. By chance, I happened to apply to this program called Google BOLD. It was a week-long program for people that are a little bit too young for a full-time internship. There we just talked about all the opportunities at Google that were not engineering.

It’s funny, I grew up in California, but growing in Long Beach, I didn’t know anything about Silicon Valley whatsoever. College was really the first time I had an introduction to Silicon Valley, to technology, to entrepreneurship, to Google. Even though [Google BOLD] was a nontechnical program, I was “I want to know what this coding thing is about.” So my sophomore year, when I went back to campus, I took my first computer science class. And that was the beginning.

What’s the most effective way to get on your radar without knowing you prior? Any anecdotes for how out of network founders grabbed your attention?

Yes! In fact, I met Suraya Shivji, the CEO of HAGS, through Twitter. I knew people who were buzzing about the company on Twitter, and I proactively reached out to her to do a virtual coffee. Social media, networking events and warm intros are pretty good paths. For what it’s worth, I read every cold email I receive as well; I’m just not able to respond to all of them!

What kind of companies will you always take a meeting with?

Mobile consumer and consumer in general is definitely what my background is in, and so I’ll always have a natural inclination
in consumer. I recognize that that’s broad, but I think software consumer companies are ones that I know and I understand. So that’s something I’m always going to lean into. One of the things that I really love about GV is that we are a generalist firm, which has also been a theme for me personally and something that I definitely want to uphold as an investor. Some other things that I’m interested in [are] fintech on the enterprise side and [ … ] enterprise collaboration tools.

It wasn’t the lingering exhaustion that made Christine Huang, a New York public school teacher, leave the profession. Or the low pay. Or the fact that she rarely had time to spend with her kids after the school day due to workload demands.

Instead, Huang left teaching after seven years because of how New York City handled the coronavirus pandemic in schools.

“Honestly, I have no confidence in the city,” she says. Tensions between educators and NYC officials grew over the past few weeks, as school openings were delayed twice and staffing shortages continue. In late September, the union representing NYC’s principals called on the state to take control of the situation, slamming Mayor de Blasio for his inability to offer clear guidance.

Now, schools are open and the number of positive coronavirus cases are surprisingly low. Still, Huang says there’s a lack of grace given to teachers in this time.

Huang wanted the flexibility to work from home to take care of her kids who could no longer get daycare. But her school said that, while kids have the choice on whether or not to come into class, teachers do not. She gave her notice days later.

There are more than 3 million public school teachers in the United States. Over the years, thousands have left the system due to low pay and rigid hours. But the coronavirus is a different kind of stress test. As schools seesaw between open and closed, some teachers are left without direction, feeling undervalued and underutilized. The confusion could usher numbers of other teachers out of the field, and massively change the teacher economy as we know it.

Teacher departures are a loss for public schools, but an opportunity for startups racing to win a share of the changing teacher economy. Companies don’t have the same pressures as entire school districts, and thus are able to give teachers a way to teach on more flexible hours. As for salaries, edtech benefits from going directly to consumers, making money less of a budget challenge and more of a sell to parents’ wallets.

There’s Outschool, which allows teachers to lead small-group classes on subjects such as algebra, beginner reading or even mindfulness for kids; Varsity Tutor, which connects educators to K-12 students in need of extra help; and companies such as Swing and Prisma that focus on pod-based learning taught by teachers.

The startups all have different versions of the same pitch: they can offer teachers more money, and flexibility, than the status quo.

Underpaid and overworked teachers

There’s a large geographic discrepancy in pay among teachers. Salaries are decided on a state-by-state and district-by-district level. According to the National Center for Education Statistics, a teacher who works in Mississippi makes an average of $45,574 annually, while a teacher in New York makes an average of $82,282 annually.

Although cost of living factors impacts teacher salaries like any other profession, data shows that teachers are underpaid as a profession. According to a study from the Economic Policy Institute, teachers earn 19% less than similarly skilled and educated professionals. A 2018 study by the Department of Education shows that full-time public school teachers are earning less on average, in inflation-adjusted dollars, than they earned in 1990.

The variance of salaries among teachers means that there’s room, and a need, for rebalancing. Startups, looking to get a slice of the teacher economy, suddenly can form an entire pitch around these discrepancies. What if a company can help a Mississippi teacher make a wage similar to a New York teacher?

Image: Bryce Durbin / TechCrunch

Reach Capital is a venture capital firm whose partners invest in education technology companies. Jennifer Carolan, co-founder of the firm, who also worked in the Chicago Public School system for years, sees coronavirus as an accelerator, not a trigger, for the departure of teachers.

“We have a system and education system where teachers are underpaid, overworked, and you don’t have the flexibility that has become so important for workers now,” she said. “All these things have caused teachers to seek opportunity outside of the traditional schooling system.”

Carolan, who penned an op-ed about teachers leaving the public school system, says that new pathways for teachers are emerging out of the homeschooling tech sector. One of her investments, Outschool, has helped teachers earn tens of millions this year alone, as the total addressable market for what it means to be “homeschooled” changed overnight.

Gig economy powered by startups

Education technology services have created a teacher gig economy over the past few years. Learning platforms, with unprecedented demand, must attract teachers to their service with one of two deal sweeteners: higher wages or more flexible hours.

Outschool is a platform that sells small-group classes led by teachers on a large expanse of topics, from Taylor Swift Spanish class to engineering lessons through Lego challenges. In the past year, teachers on Outschool have made more than $40 million in aggregate, up from $4 million in total earnings the year prior.

CEO Amir Nathoo estimates that teachers are able to make between $40 to $60 per hour, up from an average of $30 per hour in earnings in traditional public schools. Outschool itself has surged over 2,000% in new bookings, and recently turned its first profit.

Outschool makes more money if teachers join the platform full-time: teachers pocket 70% of the price they set for classes, while Outschool gets the other 30% of income. But, Nathoo views the platform as more of a supplement to traditional education. Instead of scaling revenue by convincing teachers to come on full-time, the CEO is growing by adding more part-time teachers to the platform.

The company has added 10,000 vetted teachers to its platform, up from 1,000 in March.

Outschool competitor Varsity Tutors is taking a different approach entirely, focusing less on hyperscaling its teacher base and more on slow, gradual growth. In August, Varsity Tutors launched a homeschooling offering meant to replace traditional school. It onboarded 120 full-time educators, who came from public schools and charter schools, with competitive salaries. It has no specific plans to hire more full-time teachers.

Brian Galvin, chief academic officer at Varsity Tutors, said that teachers came seeking more flexibility in hours. On the platform, teachers instruct for five to six hours per day, in blocks that they choose, and can build schedules around caregiver obligations or other jobs.

Varsity Tutors’ strategy is one version of pod-based learning, which gained traction a few months ago as an alternative to traditional schooling. Swing Education, a startup that used to help schools hire substitute teachers, pivoted to help connect those same teachers to full-time pod gigs. Prisma is another alternative school that trains former educators, from public and private schools, to become learning coaches.

Pod-based learning, which can in some cases cost thousands a week, was popular among wealthy families and even led to bidding wars for best teacher talent. It also was met with criticism, suggesting the product wasn’t built with most students in mind.

The reality of next job

A tech-savvy future where students can learn through the touch of a button, and where teachers can rack in higher earnings, is edtech’s goal. But that path is not accessible for all.

Some tutoring startups could create a digital divide among students who can pay for software and those who can’t. If teachers leave public schools, low-income students are left behind and high-income students are able to pay their way into supplemental learning.

Still, some don’t think it’s the job of public school teachers, the vast majority of which are female, to work for a broken system. In fact, some say that the whole concept of villainizing public school teachers for leaving the system comes with ingrained sexism that women have to settle for less. In this framework, startups are both a bridge to a better future for teachers and a symptom of failures from the public educational systems.

Huang, now on the job hunt, says that the opportunities that edtech companies are creating aren’t built for traditional teachers, even though they’re billed as such. So far, she has applied to curriculum design jobs at educational content website BrainPop, digital learning platform Newsela, math program company Zearn and Q&A content host Mystery.org.

“What I’m finding is that a lot of edtech companies don’t seem to value our skills as teachers,” she said. “They’re not looking for teachers, they’re looking for coders.”

Edtech has been forced to meet increasing demand for services in a relatively short time. But the scalability could inherently clash with what teachers came to the profession to do. Suddenly, their work becomes optimized for venture-scale returns, not general education. Huang feels the tension in her job interviews, where she feels like recruiters don’t pay attention to creativity, knowledge and human skills needed for managing students. She has created 30 different versions of her resume.

The lack of suitable jobs made Huang decide to go on childcare leave instead of quitting the education system entirely, in case she needs to return to the traditional field. She hopes that is not the case, but isn’t optimistic just yet.

“I haven’t gotten a whole lot of interviews, because people see my resume; they see that I’m a teacher, and they automatically write me off,” she said.

Image Credits: Bryce Durbin (opens in a new window)