The current narrative explaining why tech stocks are getting hammered

This morning the tech-heavy Nasdaq Composite index is off 2.34% after falling yesterday. Shares of Tesla are off more than 6% today, now mired in a bear-market correction after reaching new all-time highs earlier this year. Apple stock is worth $ 122.02 per share, down from its recent highs of more than $ 145.

After a long period of time when it felt like tech stocks only went up, the recent correction is starting to feel material.

There are other ways to measure the selloff. Bessemer’s cloud index is off 4.5% today, after falling over 5% yesterday. And the now-infamous $ ARKK, or ARK Innovation ETF that many investors have used as a proxy for growthy tech stocks, is off 6.6% today after falling 5.9% yesterday.

Hell, even bitcoin has taken a pounding in the last few days, after its recent, relentless rise.

What’s driving the rapid turnaround in the value of tech companies, tech-focused indices and tech-adjacents, like cryptocurrencies? Not merely one thing, of course, in an environment as complex as the world’s capital markets. But there is a rising narrative that you should consider.

Namely that the money-is-cheap-and-bond-yield-is-garbage-so-everyone-is-putting-money-into-stocks trade is losing steam. As some yields rise, bonds are become more attractive bets. And as COVID-19 vaccines roll out, some investors are pushing their stock-market bets into categories other than tech.

The result is that the landscape of value is shifting; the winds that were at the back of every tech company are receding, at least for now. If the changed weather persists until the very investment climate that tech stocks exist in reaches a new equilibrium, we could see the appetite for tech IPOs lessen, late-stage private valuations for startup shares dip, and more.

Here’s CNBC from earlier today on what’s changing:

Stocks dropped again on Tuesday as tech shares continued to tumble in the face of higher interest rates and a rotation into stocks more linked to the economic comeback.

Here’s The Wall Street Journal on the same theme, from yesterday:

The lift in yields largely reflects investor expectations of a strong economic recovery. However, the collateral damage could include higher borrowing costs for businesses, more options for investors who had seen few alternatives to stocks and less favorable valuation models for some hot technology shares, investors and analysts said.

And here’s Barrons from this morning, noting that what we’re seeing at home is not merely a U.S. issue:

While members of the NYSE FANG+ index including Tesla, Facebook and Apple have dropped sharply as the yield on the 10-year Treasury has climbed, the sector also is on the retreat overseas.

The market could snap back. Or not. It’s worth watching stocks for the next few days.

Startups – TechCrunch

Lightspeed’s Gaurav Gupta and Grafana’s Raj Dutt discuss pitch decks, pricing and how to nail the narrative

Before he was a partner at Lightspeed Venture Partners, Gaurav Gupta had his eye on Grafana Labs, the company that supports open-source analytics platform Grafana. But Raj Dutt, Grafana’s co-founder and CEO, played hard to get.

This week on Extra Crunch Live, the duo explained how they came together for Grafana’s Series A — and eventually, its Series B. They also walked us through Grafana’s original Series A pitch deck before Gupta shared the aspects that stood out to him and how he communicated those points to the broader partnership at Lightspeed.

Gupta and Dutt also offered feedback on pitch decks submitted by audience members and shared their thoughts about what makes a great founder presentation, pulling back the curtain on how VCs actually consume pitch decks.

We’ve included highlights below as well as the full video of our conversation.

We record new episodes of Extra Crunch Live each Wednesday at 12 p.m. PST/3 p.m. EST/8 p.m. GMT. Check out the February schedule here.

Episode breakdown:

  • How they met — 2:00
  • Grafana’s early pitch deck — 12:00
  • The enterprise ecosystem — 25:00
  • The pitch deck teardown — 32:00

How they met

As soon as Gupta joined Lightspeed in June 2019, he began pursuing Dutt and Grafana Labs. He texted, called and emailed, but he got little to no response. Eventually, he made plans to go meet the team in Stockholm but, even then, Dutt wasn’t super responsive.

The pair told the story with smiles on their faces. Dutt said that not only was he disorganized and not entirely sure of his own travel plans to see his co-founder in Stockholm, Grafana wasn’t even raising. Still, Gupta persisted and eventually sent a stern email.

“At one point, I was like ‘Raj, forget it. This isn’t working’,” recalled Gupta. “And suddenly he woke up.” Gupta added that he got mad, which “usually does not work for VCs, by the way, but in this case, it kind of worked.”

When they finally met, they got along. Dutt said they were able to talk shop due to Gupta’s experience inside organizations like Splunk and Elastic. Gupta described the trip as a whirlwind, where time just flew by.

“One of the reasons that I liked Gaurav is that he was a new VC,” explained Dutt. “So to me, he seemed like one of the most non-VC VCs I’d ever met. And that was actually quite attractive.”

To this day, Gupta and Dutt don’t have weekly standing meetings. Instead, they speak several times a week, conversing organically about industry news, Grafana’s products and the company’s overall trajectory.

Grafana’s early pitch deck

Dutt shared Grafana’s pre-Series A pitch deck — which he actually sent to Gupta and Lightspeed before they met — with the Extra Crunch Live audience. But as we know now, it was the conversations that Dutt and Gupta had (eventually) that provided the spark for that deal.

Startups – TechCrunch

Narrative raises $8.5M as it launches a new data marketplace

Narrative has raised $ 8.5 million in Series A funding and is launching a new product designed to further simplify the process of buying and selling data.

I’ve already written about the company’s existing marketplace and software for managing data transactions. With the new Data Streams Marketplace, the process should be simpler than ever — not much different than buying products on Amazon.

“Essentially, the idea was to take the best parts of the e-commerce and search models and apply that to a non-consumer offering to find, discover and ultimately buy data,” founder and CEO Nick Jordan (pictured above on the left) told me. “The premise is make it as easy to buy data as it is to buy stuff online.”

For example, Jordan showed me how a marketer could search browse and search for different types of data in the marketplace. Once they found something they want to purchase (say, the mobile IDs of people who have the Uber Driver app installed on their phones, or the Zoom app) at a price they’re willing to pay (usually via subscription), they can just add the data set to their shopping cart, enter their credit card information, accept the terms of service and check out.

In Jordan’s view, this approach has become more attractive in recent months, because with all the uncertainty, companies need more data, and they need it quickly. For example, he suggested that a large company spending tens of millions of dollars on advertising “needs a way to find and buy the data almost programmatically and have the whole thing take five minutes instead of five months — those are the orders of magnitude we’re talking about here.”

Narrative screenshot

Image Credits: Narrative

This data is generally sold by third-party sellers who are vetted by Narrative before they join the platform. Jordan also said the marketplace allows buyers to learn more about who they’re buying data from and even to establish a direct relationship — something that could be important for understanding things like regulatory compliance and data quality.

Although Narrative works to “deeply understand [sellers’] data collection methodologies,” Jordan warned, “There’s not necessarily a silver bullet for things being safe from a regulatory perspective.”

Similarly, he said that Narrative isn’t going to be grading the quality of the data sold on the platform. He argued, “Data quality is in the eye of the beholder. Someone’s signal is someone else’s noise.”

The goal with both of these issues is to provide transparency and allow buyers to do more research when necessary. Jordan also said Narrative is building out a marketplace of third-party applications — and that could include applications that score the quality of a data set.

“In the long run, I can imagine a number of use cases that’s almost infinite,” he said.

Narrative had previously raised $ 5.3 million in funding, according to Crunchbase. The Series A was led by G20 Ventures with additional funding from existing investors Glasswing Ventures, MathCapital, Revel Partners, Tuhaye Venture Partners and XSeed Capital.

Jordan said the new round will allow the company to hire in areas like product, engineering, sales and marketing. He also noted that Narrative has long prioritized hiring team members from across North America, and recently, it’s been placing a bigger focus on outreach and hiring from underrepresented groups.

“It’s easier said that’s done,” he acknowledged. “Any company that’s doing it well has to make it a priority and not just something they hope happens.”

Startups – TechCrunch

Auckland-based photo software startup Narrative raises $2.58 million led by Founders Fund

For many freelance photographers, marketing their businesses and editing photos takes as much time, if not much more, than photoshoots. Founded in 2017, Auckland-based Narrative helps professional photographers with tools including a website builder and Narrative Select, an AI-based tool that identifies the best frames from a shoot, cutting down the amount of time it takes to go through hundreds or thousands of shots.

The company announced today that it has raised $ 2.58 million in seed funding led by Founders Fund, with participation from Icehouse Ventures.

The company said its website software, Narrative Publish, is currently used by tens of thousands of photographers. Part of the new funding will be used to market Narrative Select, which is available on a subscription basis, and build its user base as photographers around the world seek to recover from the the impact of COVID-19.

Narrative is also recruiting tech talent from the United States and United Kingdom to work at its offices in New Zealand, which is gaining more interest as an immigration destination because of its success in containing the spread of COVID-19.

Narrative Select uses machine learning to flag photos as desirable or undesirable, focusing in particular on people in the photo. For example, if a subject is blurry or their eyes are closed, the photo is flagged as undesirable. The company says Narrative typically tags 30% of photos in a batch as undesirable, making the editing process faster for photographers. Narrative Select will be expanded to cover fashion, commercial and lifestyle photography, too.

Startups – TechCrunch

Equity Monday: Uber-Postmates is announced, three funding rounds, and narrative construction

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our week-starting primer in which we go over the latest news, dig into the week ahead, talk about some neat funding rounds, and dive into the latest big news from the startup world. (You can follow the show on Twitter here, and myself here, if you are so inclined! Don’t forget to check out last Friday’s episode as well. All the cool kids are doing it.)

What a weekend! After some quiet, somewhat dull off-week periods, this weekend brought us twists and turns that were good fun. Most dealt with a possible Uber -Postmates tie up, so we wrote the show to talk about the transaction’s unconfirmed nature.

Then, it got confirmed. So, here’s the second edition of today’s Equity Monday, recast due to the deal’s official nature:

  • Uber will buy Postmates for $ 2.65 billion in an all-stock transaction. Uber shares were up this morning ahead of the open on the wings of the rumor — wings that beat even harder after the deal was confirmed. Uber investors seem pleased, for now, that after losing out on GrubHub their company has managed to buy a smaller player. Doing so may give Uber more leverage over restaurants and drivers, and boost Uber’s H2 2020 revenue numbers that will still be impacted by COVID-19 and its resulting economic impacts.
  • Q3 earnings don’t kick off for tech and other VC-backed companies for a bit, and heading into the week the public markets are up. Despite all the bad news. The inverse correlation between bad news (short-term, economic), and stock market gains is slowly moving from joke to sordid reality.
  • This week we’re keeping tabs on US and Chinese economic data, the geopolitical situation in Hong Kong and the India-China border, and Q2 VC data as it comes out.
  • We also dug into three funding rounds this morning, detailing Scalefast raising $ 22 million, DigniFi raising $ 14 million, and AirVet raising $ 14 million as well. More international rounds to come, we promise.

We wrapped this morning wondering if Postmates can provide a narrative boost to Uber, a company that isn’t going to have the best Q2 numbers in its history. With Postmates tucked under its arm going into the earnings call, Uber can double-down on its Uber Eats narrative, flash Postmates around the room, and promise that Rides data will get better as well.

Perhaps that would be enough?

Equity drops every Monday at 7:00 AM PT and Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Startups – TechCrunch

[OurCrowd CEO Jon Medved in Cleaveland Jewish News] Tech giants tell Jerusalem Day narrative of the capital’s thriving startup ecosystem

OurCrowd founder and CEO Jon Medved related that Jerusalem is so much “in the trend” of global innovation that it has “moved into its rightful slot as a major part of Israel’s, and onto the world’s, tech scene.”

Read more here.

The post [OurCrowd CEO Jon Medved in Cleaveland Jewish News] Tech giants tell Jerusalem Day narrative of the capital’s thriving startup ecosystem appeared first on OurCrowd.


How to Market Your Startup’s Narrative Through Storytelling

I think an underrated art of business is the simple act of explaining to people what you do. Those moments when you give your 30-second elevator pitch, or just discussing your business in general. When you don’t tell your story well, there is a huge disconnect. It’s a terrible feeling when you love what you do, but maybe the storytelling aspect is difficult for you. Maybe it’s a little bit (or a lot) technical. But you know what you’re doing is pretty darn awesome.

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In Episode 555 of my Onward Nation podcast, I spoke with Pamela Herrmann, author of “The Customer Manifesto.” As we talked, she explained her interest in helping Main Street entrepreneurs articulate what they do. When she asked me how I describe my work, I fumbled a bit, to be totally honest.

Since then, and for a number of reasons not limited to this conversation with Pamela, my team and I have gotten crystal clear on what my business does, and we are able to explain it in a simple and engaging way. It’s made a big difference in how we connect with peers and potential clients.

What I remember, though, about my conversation with Pamela, is how she brought her work (neuroscience) into the conversation seamlessly. She was studying neuroscience for her work with both big corporate clients and Main Street business owners.

Related: Profitable Podcasting: Build Your Nation of True Fans

There’s a neuroscience connection to the experience you have while networking: the one where people’s eyes glaze over, or they get super-interested in their phones when you’re talking about your business.

Here’s what’s happening: You are talking from an area of the brain called the neocortex. This is where all the high-level reasoning and critical thinking happens. We are delivering messages from that part of our brains, but that’s not where people are listening to those messages. Initially, these messages go to the filter of the reptilian brain. That’s the part of the brain that has to quickly assess if a situation is dangerous, or just dangerously boring! There’s, of course, lots more to it than that, but you get the idea.

The point is, while you are speaking about high level, technical things, as fascinating as they are to you, the other person is trying to work out in their minds if they should even trust you to begin with. It’s the same part of the brain where the fight or flight impulse is worked out, so that’s the level of thinking that is going on here in these moments.

So how do you overcome that reptilian brain conundrum?

You have to be able to market or articulate in a very relatable narrative, what it is that you do.

What is it about your business that captivates you? It’s not just in conversations about what you do, either. It’s how you write your web copy. Whether you’re creating content in the form of a newsletter, articles, or video, it doesn’t matter. You have to be able to create a narrative around what you do in a way that people understand.

So, here’s how to fix that communication breakdown in order to get people excited and invested in your startup: through storytelling.

When you tell a story, you create a connection. You create a moment that is relatable to the other person; something similar to their own experience. And when that happens, you don’t have to get into the technical weeds of what you do.

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Pamela put it this way:

“When you approach marketing from that perspective, now you’re starting to build the seeds of loyalty, which gets somebody nodding their head yes and saying, ‘I like you. How can we work together? I don’t even know what you do for a living, but I want to figure out what the potential is for doing business.’”

Storytelling is becoming a bit of a buzzword, and it is a critically important skill for aspiring entrepreneurs to master.

Personal connection means helping people get beyond that fight or flight reptilian brain response, so you can hear what they have to say, and they can hear you. With that, you can begin to build a beautiful business relationship.

The post How to Market Your Startup’s Narrative Through Storytelling appeared first on StartupNation.