WRAL TechWire https://www.wraltechwire.com The Triangle's Source for Tech & Startup News Tue, 14 Sep 2021 16:32:55 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.6 https://www.wraltechwire.com/wp-content/uploads/2017/11/cropped-WRALTechWire-SiteIcon-32x32.png WRAL TechWire https://www.wraltechwire.com 32 32 $50M development at Hub RTP gets a name: Horseshoe https://www.wraltechwire.com/2021/09/14/50m-development-at-hub-rtp-gets-a-name-horseshoe/ https://www.wraltechwire.com/2021/09/14/50m-development-at-hub-rtp-gets-a-name-horseshoe/#respond Tue, 14 Sep 2021 16:32:25 +0000 https://www.wraltechwire.com/?p=192903 RESEARCH TRIANGLE PARK – The building of a new retail, life science, residential and business complex at Hub RTP continues to move forward with the news Tuesday that a $50 million mix of space will be called Horseshoe at Hub RTP.

Being developed by White Point, the 125,000 square foot complex will include:

  • Some 25,000 square feet of what the developer calls “experiential and diverse retail space”
  • A large plaza
  • Some 100,000 square feet of office space

White Point says the name Horshoe “pays homage to the layout of the development, with the buildings’ focus on the central plaza, as well as a magnet’s shape to represent RTP’s reputation as a “brain magnet.”

Horseshow at Hub RTP: A rendering from developer White Point.

The Research Triangle Foundation, which runs the Park and is driving the 100-acre  Hub RTP project that someday is set to include more than 2 million square feet of office and retail space as well as residential living.

Last month, Hub RTP and developer Longfellow Real Estate Partners announced the development’s first office tower.

The Boxyard – a collection of dining and entertainment – also is being built at the Hub.

RTP gets a skyscraper: The Hub project lands office tower from developer Longfellow

Two of the largest commercial real estate firms in the region are also involved. CBRE will handle leasing the food and beverage and retail space. JLL will oversee office space leasing.

“We intend to deliver a unique, mixed-use development as we have successfully done in some of the leading live-work-play neighborhoods of the Carolinas,” said Eric Johnson, cofounder of White Point.

Horseshoe site work is expected to be completed in the second quarter of next year and to be completed in the third quarter of 2023.

A view of the Horseshoe at Hub RTP via developer White Point.






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Life science firm picks Greenville, Pitt County for nearly 300 new jobs https://www.wraltechwire.com/2021/09/14/life-science-firm-picks-greenville-pitt-county-for-nearly-300-new-jobs/ https://www.wraltechwire.com/2021/09/14/life-science-firm-picks-greenville-pitt-county-for-nearly-300-new-jobs/#respond Tue, 14 Sep 2021 15:29:33 +0000 https://www.wraltechwire.com/?p=192894 RALEIGH – Life science firm Patheon will expand its presence in Greenville with nearly 300 jobs paying an average wage of more than $66,000 under an expansion agreement signed with the state of North Carolina on Tuesday.

An investment of $154 million is to be made as part of the expansion.

The company, which is owned by Thermo Fisher, will receive more than $5 million in state tax incentives if new job targets are met, according to the North Carolina Department of Commerce’s Economic Investment Committee.

Patheon will be required to maintain the 182 current jobs at its Pitt County operation. Another 500 jobs had been pledged to be created in an earlier agreement.

The Greenville facility manufactures sterile injectables, tablets and capsules. It also offers stability storage and testing, and active pharmaceutical ingredient and large-molecule development, according to the N.C. Biotechnology Center.

500 jobs, $500M in investment coming to Thermo Fisher plant in Greenville

A total of 1,982 jobs are scheduled to be available once the expansions have been completed.

Other economic incentives include more than $500,000 in community college training, $100,000 from the North Carolina Biotech Center, and some $4 million from Pitt County and the City of Greenville.

The Pitt County site was selected over another Thermo Fisher location in Italy.

Durham drug firm Patheon being sold in $5.2B deal

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Thousands of jobs, new projects fill Wake County’s potential economic pipeline https://www.wraltechwire.com/2021/09/14/thousands-of-jobs-new-projects-fill-wake-countys-potential-economic-pipeline/ https://www.wraltechwire.com/2021/09/14/thousands-of-jobs-new-projects-fill-wake-countys-potential-economic-pipeline/#respond Tue, 14 Sep 2021 14:20:42 +0000 https://www.wraltechwire.com/?p=191035 RALEIGH – Economic developers in Wake County are having an exceptional year with significant announcements for facilities and new jobs. But the even better news is that the pipeline for future projects continues to be quite promising.

So as the Greater Raleigh Chamber of Commerce gathers for its annual meeting Tuesday afternoon, the head of economic development has plenty of good news to share.

“The pipeline remains strong,” Michael Haley of Wake County Economic Development tells WRAL TechWire. “We continue to see a variety of projects in terms of potential job creation and investment.”

Haley’s latest update comes in a year when Apple has announced plans for a new campus and a $1 billion expansion planned at North Hills. Life scinece projects such as the $2 billion Fujifilm Diosynth and another from Amgen also mean jobs.

“Our region is having an incredibly strong year,” Haley says. “Since our fiscal year began in October WCED has announced 5,815 jobs and $3.7B in capital investment, which is by far our best year yet. We are pleased by recent rankings recognizing our community as a top place to live, a global life science hub, a ‘millennial magnet’ and top tech hub, among other accolades. Being included on lists like these energize us to keep working on our community and ensuring its success for years to come.”

In the latest economic update available – July – Wake County Economic Development reported 48 active projects under consideration that could mean another 10,000 jobs and $4.6 billion in investment.

More development is coming to Wake beyond the economic rebound expected from the depths of the COVID-19 pandemic induced recession.

“The increased interest and traffic is a result of years of intentionality and collaboration across our region,” Haley explains. “Our high quality of life, talent pipeline, education and workforce partnerships and strong business ecosystem continue to anchor our community as one of the best places to live and work. These numbers fluctuate from month to month, but the pipeline has remained strong overall. ”

As for the rest of the year, Haley remains optimistic despite the resurge of COVID caused by the “Delta” variant.

“At this time, interest is remaining steady,” he says.

Here is the latest data from WCED:


  • New & Expanding Company Announcements since October 1, 2020: 71
  • Jobs: 9,037
  • Investment: $3.4 billion
  • Total Projects received Since October 1,  2020: 89
  • Potential Jobs: 24,220
  • Potential Investment: $4.6 billion
  • Client Visits: 33
  • Active Projects 48
  • Potential Jobs: 9,934
  • Potential Investment: $2.5 billion

Here’s where the project pipeline looked like a year earlier:

JULY 2020

  • New and Expanding Metrics since October 1, 2019:
  • New & Expanding Company Announcements: 75
    Jobs: 5,866
    Investment: $396 million
  • Project Metrics
  • Total Projects received Since Oct. 2019: 72
  • Potential Jobs: 16,041
  • Potential Investment: $3.9 billion
  • Client Visits: 34
  • Active Projects: 34
  • Potential Jobs: 9,139
  • Potential Investment: $1.9 billion



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Amazon to hire another 6,000 workers in NC, 125,000 in all https://www.wraltechwire.com/2021/09/14/amazon-to-hire-another-6000-workers-in-nc-125000-in-all/ https://www.wraltechwire.com/2021/09/14/amazon-to-hire-another-6000-workers-in-nc-125000-in-all/#respond Tue, 14 Sep 2021 11:45:38 +0000 https://www.wraltechwire.com/?p=192864 RESEARCH TRIANGLE PARK – Amazon, which already lists numerous open positions across the Triangle and North Carolina, says it is planning to hire another 125,000 people. And among those are 6,000 planned hires across the state, according to a spokesperson for Amazon.

Not disclosed yet, however, are where hires will be made and what additional facilities the company might add.

The news announced early Tuesday comes a day ahead of a massive “Career Day” that the tech giant has planned for Wednesday.

This is the second major boost in hiring by Amazon in recent months, coming after plans to hire 40,000 people for corporate and technology positions.

Officials recently noted that Amazon has created more than 27,000 full- and part-time jobs in North Carolina and invested more than $2.1 billion across the state since 2010.

Check out job availability at this site: www.amazon.com/apply.

The additional jobs announced Tuesday are for a variety of product distribution positions paying at least $18 an hour plus benefits.

IBM, tech firms, healthcare providers looking to hire thousands in Triangle, but …

Some locations also are offering $3,000 in signing-on bonuses. Amazon, however, did not specify where the bonuses are available.

Amazon already has opened several new distribution centers across North Carolina as the COVID-19 pandemic has led to a surge in ecommerce shopping and delivery. Amazon noted that it plans to open more than 100 buildings this month in addition to some 250 coming online this year.

“We are proud to offer opportunities for people from a range of backgrounds, from furloughed workers to former military personnel,” said Dave Clark, CEO of Worldwide Consumer at Amazon, in a statement. “We take our responsibility as an employer seriously and want our employees to succeed and thrive. That’s why we offer an average starting wage of over $18 per hour, provide a great range of comprehensive benefits—including healthcare coverage, parental leave, career training, and ways to save for the future—and have a team of thousands working to build a safe and inclusive work environment. Whether you’re looking for a short-term job to make money for the holidays or a long-term career, you’re welcome here, and we look forward to having you on our team.”

States where Amazon is expanding outside North Carolina include:

• Arizona

• California

• Colorado

• Florida

• Georgia

• Illinois

• Indiana

• Kentucky

• Maryland

• Michigan

• New Jersey

• New York

• Ohio

• Pennsylvania

• Tennessee

• Texas

• Washington

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Next unicorns? Exclusive series to spotlight Raleigh’s $1B startup pipeline https://www.wraltechwire.com/2021/09/14/next-unicorns-exclusive-series-to-spotlight-raleighs-1b-startup-pipeline/ https://www.wraltechwire.com/2021/09/14/next-unicorns-exclusive-series-to-spotlight-raleighs-1b-startup-pipeline/#respond Tue, 14 Sep 2021 11:45:11 +0000 https://www.wraltechwire.com/?p=192474 RALEIGH – Big tech firms like Apple and Google may be moving into town. But it’s the city’s homegrown talent, many argue, that will solidify Raleigh’s reputation as a tech hub. And WRAL TechWire is going to tell these stories.

In the last two years alone, Raleigh has churned out three new “unicorns,” companies valued at more than $1 billion, including insightsoftware, Pendo, and Prometheus Group.

That’s more than the decade prior combined. Plus, many more are in the pipeline.

In a new multimedia series and in conjunction with Innovate Raleigh, WRAL TechWire is set to spotlight some of those companies tipped to become tomorrow’s “homegrown” unicorns.

“Having a vibrant innovation ecosystem of high-potential, high-growth companies is integral to our economic development strategy,” Michael Haley, Wake County Economic Development’s executive director, told WRAL TechWire.

“Companies want to come to this area because of the strong ecosystem that already exists here. They want to benefit from the energy of innovation that is present.”

Michael Haley, executive director of Wake County Economic Development and senior vice president at the Greater Raleigh Chamber of Commerce.

The six-part series will launch on Wednesday, September 15. Each week, it will feature a Raleigh-born, “Goldilocks” company — not too small, not too large — that is on track to becoming a $1-billion company. These are the region’s “future breakouts, big fundraisers, acquisition targets and (fingers crossed) IPOs.”

“If the Triangle startup ecosystem was a typical funnel metaphor, the top of our funnel is getting very, very full,” said veteran entrepreneur Scot Wingo, who puts out his own official “Tweeners List” every year of startups that have at least $1 million per year in sales or 10 people.

“When I started, there were 50 companies. Now there are 250. Those are ‘unicorn seeds’ that hopefully will bear fruit in the not-too-distant future.”

WRAL TechWire selected the companies for the series based on a range of factors: annual revenue, recent fundraises, momentum and “general buzz on the street.” Many, though not all, have appeared or graduated from the Tweeners’ list. Some of the startups took 10 years to get to this inflection point; others are barely a few years old.

The series’ lineup represents a snapshot of the different people and emerging technologies at play in Raleigh’s ecosystem.

It will include a mother of four, a first-generation Greek immigrant, a native Raleighite, an African American from eastern North Carolina, an NC State grad, and a Canadian.

It will also cover a cross-section of emerging technologies: artificial intelligence, blockchain, edge computing, Internet of Things, and more. It will include a digital story, Q&A, two-minute video and LinkedIn Live chat.

The series is produced with funding support from Innovate Raleigh and other partners.

The non-profit also supports the News & Observer Fellowship. Both initiatives are aimed at supporting local journalism and coverage of technology, innovation and entrepreneurship in the Triangle.

WRAL TechWire has retained full editorial control of all content.

“Great journalism is a powerful resource for entrepreneurs and innovators to connect to their community’s talent and support,” said Bridget Harrington, Innovate Raleigh’s former executive director, who spearheaded both programs. “Collectively, the stories we tell are vital in shaping our community’s future.”

The series will run in the lead up to the Innovate Raleigh Summit, which is scheduled for Oct. 25-29.


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Apple’s big show rumors: New iPhones, AirPods, Watch, even augmented reality https://www.wraltechwire.com/2021/09/14/apples-big-show-rumors-new-iphones-airpods-watch-even-augmented-reality/ https://www.wraltechwire.com/2021/09/14/apples-big-show-rumors-new-iphones-airpods-watch-even-augmented-reality/#respond Tue, 14 Sep 2021 11:22:47 +0000 https://www.wraltechwire.com/?p=192861 By Samantha Murphy Kelly, CNN Business

A bigger iPhone battery that lasts longer. A diagonally-shaped camera system. And one terabyte of storage.

These are some of the latest rumors about what Apple may announce during a closely watched media event on Tuesday, where it’s expected to reveal the latest iPhone lineup.

At a virtual event held from its Cupertino, California, headquarters, the company is likely to unveil four new iPhones: the iPhone 13 mini, the iPhone 13, the iPhone 13 Pro and iPhone 13 Pro Max. The company may also introduce new AirPods, a new Apple Watch and something related to augmented reality.

Apple warns about spyware vulnerability on eve of expected new phone announcement

The iPhone 13 devices likely won’t have any groundbreaking design changes. In fact, they’ll probably look very similar to last year’s models, with some exceptions. But there’s a long list of potential feature changes under the hood, including perennial updates such as a faster processor, improved camera capabilities and better battery life.

The stakes are high for Apple. The iPhone continues to be a major revenue driver and central to its ecosystem of products. In April, Apple reported quarterly iPhone sales of nearly $48 billion, a massive 65% increase from the year prior, fueled by demand for its 5G-capable iPhone 12. (Apple no longer discloses the number of iPhone units sold.) Now it must entice customers to spend more than $1,000 for some models of the next generation.

“Apple clearly doesn’t have to do much,” said David McQueen, a director at market research firm ABI Research. “Despite the relatively high price points, consumers will still buy and upgrade to Apple products, partly because of brand strength and the quality of the products, and partly because they have already invested heavily in the Apple ecosystem.”

Here’s what to expect from Apple’s big event, which kicks off at 1 p.m. ET on its website.

No more ‘notch’

There may be at least one notable tweak to the phone’s design: Apple could finally do away with the “notch” at the top of its display, which holds its TrueDepth camera, speakers, microphone and other sensors, to give a less obstructed view of the touchscreen.

When Apple debuted the iPhone X in 2017, it made headlines for removing the Home button and including smaller bezels around the frame to free up screen space. But there was that unattractive notch near the top. Now Apple may remove it all together, possibly repositioning the components to the bezels.

The device could also get an always-on display and an under-display Touch ID.

Diagonal cameras, more storage and bigger, better batteries

The iPhone 13 and more budget-friendly iPhone 13 mini are rumored to have two rear-camera lenses placed diagonally for the first time, potentially to make room for a larger sensor.

Meanwhile, the three rear-camera lenses on iPhone 13 Pro models could come in different sizes and sit inside a thicker bump, reportedly for advancements with stabilization. New camera features could include portrait mode for videos and astrophotography support to take pictures of the night sky.

Other updates might include satellite technology support for sending messages in emergency situations, a faster refresh rate for better gaming, an improved 5G chip and a bigger battery that promises to last all day. (Bigger and better batteries may also be coming to the 5.4-inch iPhone 13 mini, helping to address one of the common complaints of Apple’s smallest, thinnest and lightest 5G phone and potentially boost its lackluster sales.)

In a recent investor note, Wedbush analyst Dan Ives said the iPhone 13 could come with an option for 1 terabyte storage option, double the Pro’s maximum current storage capacity of 512 GB.

Beyond that, there’s potential for augmented reality to be a focus, too. The picture included in this year’s press invite featured an Apple logo over a lake. When users tapped the same picture on the Apple website, it opened an augmented reality tool.

New AirPods and Apple Watches

The company could introduce the new Apple Watch Series 7 model with updated health features and better battery life. Although some of the bigger rumored features, such as glucose monitoring and body temperature readings, aren’t expected to hit until next year, Apple may announce a slightly larger screen, slimmer borders and a faster processor.

Apple may also show off its next-generation AirPods, featuring a design more in line with its higher-end AirPods Pro with spatial audio support and touch controls. The earbuds are rumored to come with a redesigned charging case that includes a 20% bigger battery so people can get more usage out of one charge.

Moving closer to a wireless future

For months, there have been rumors that Apple is about to drop the Lightning port from its iPhones. The move in that direction started years ago with the removal of the cord and plug from the box and continued on with the introduction of MagSafe, a magnetically attached wireless charger that snaps on and off to the back of an iPhone case.

Axing the port won’t likely happen yet — to start, its MagSafe partners need to be ready with more wireless chargers — but the company is said to be working on expanding and improving compatible accessories to get its iPhones more primed for a wireless future.

A price jump?

There could also be at least one unwelcome update this year: higher prices.

Apple tends to keep the cost of its new iPhones relatively close to its most recent prior models, but iPhone 13 prices could be slightly higher this year due to current issues with chip supply that are expected to hike prices.

“Despite the high profit margins on its iPhones, it would be of no surprise if Apple passed this rise onto the consumer, potentially pushing prices of its iPhones to their highest ever level,” McQueen said.

A slight price change may not dissuade people from upgrading to an iPhone 13. But considering the iPhone 12 Pro models start in the four figures range, it’s unclear how much more people will be willing to pay for a few incremental improvements.

The-CNN-Wire™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

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Red Hat to back Linux Foundation-supported open source project tackling climate change https://www.wraltechwire.com/2021/09/14/red-hat-to-back-linux-foundation-supported-open-source-project-tackling-climate-change/ https://www.wraltechwire.com/2021/09/14/red-hat-to-back-linux-foundation-supported-open-source-project-tackling-climate-change/#respond Tue, 14 Sep 2021 11:15:11 +0000 https://www.wraltechwire.com/?p=192859 Editor’s note: LimeLight is a new feature from WRAL TechWire offering another means of publishing noteworthy news. Be sure to check out more LimeLight worthy news at this link.
RALEIGH — Red Hat, the world’s leading provider of open source solutions, has joined OS-Climate (OS-C), a Linux Foundation-backed open source project that intends to build the breakthrough technology and data platforms needed to more fully integrate the impacts of climate change in global financial decision-making and risk management.
As part of its membership, Red Hat will provide technical acumen and resources to help OS-C build a “Data Commons” that serves as an open data ingestion, processing and management platform for members to collaborate on standardizing and improving the accuracy of corporate climate and environmental, social and governance (ESG) metrics. The resulting curated library of public and private sources can then be used to help bankers, asset owners, asset managers and regulators assess climate risk and opportunity as elements of financial decision-making.
Says Chris Wright, senior vice president and CTO, Red Hat:“Developing a common way to understand and model the impact a business has on the climate is the kind of challenging endeavor best suited to broad-scale industry collaboration. By bringing our technical and community expertise to OS-Climate, we’re able to help bring open, collaborative standards to bear to help tackle one of the world’s most critical issues.”
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OS-C is a non-profit, non-competitive organization that seeks to use open source technology and collaboration to align the efforts of the financial community in addressing the challenge of global climate change while preserving the opportunity to innovate and compete in global capital markets. This approach is a crucial component for closing the $1.2 trillion annual gap in investment needed to achieve Paris Climate Accord goals. The organization’s members include Allianz, Amazon, BNP Paribas, Goldman Sachs, KPMG, Microsoft, the Net Zero Asset Owner Alliance and many more technology and financial leaders, with membership having tripled since the community’s launch in September 2020.

Red Hat brings a wealth of experience and expertise in building open source communities for other Linux Foundation projects, serving as a founding member of the Cloud Native Computing Foundation (CNCF), the Open Container Initiative (OCI) and many more. Beyond the technical skill to actively contribute code to these initiatives, Red Hat also provides the nuanced understanding of how to encourage collaboration between organizations that would otherwise be competitive in-market.

The open source model championed by Red Hat and selected by OS-C is intended to enable the creation of a complex, multi-layered ecosystem for OS-C members, including an open data platform that can be adopted by individual organizations for their own specific uses. This helps to provide a more level data playing field that meets a variety of regulatory requirements, providing global financial institutions with better, deeper views to evaluate climate change risk and opportunity as a core part of finance, banking and investment strategies.

OS-Climate Data Commons

To help adopt financial flows to the physical and economic market impacts of climate change, financial institutions and banks need a clearer view into an ever-growing tide of related data. To address this need, OS-C is working to build the OS-Climate Data Commons, an open platform that aggregates a variety of structured and unstructured data, from SEC filings and corporate PDFs to scientific and market research, into a single library of trusted data. OS-C’s goal is to make publicly available as much high quality data as possible, while also linking to public and commercial data and enabling its use in open source analytic tools.

Red Hat’s work around the Data Commons initiative is intended to help create a portable, enterprise-grade data platform that supports members in managing complex data ingestion and processing flows using the latest advances in machine learning. This helps to collate and sanitize public and proprietary data sources, while still supporting compliance requirements around regulatory disclosures. The platform is also intended to provide open, interoperable tooling that organizations can consume alongside their own workflows and internal processes.

As part of its membership, Red Hat will commit a team of eight solutions architects, data engineers and software engineers to the project, emphasizing the creation of OS-Climate Data Commons. The company will also provide community management resources to help OS-C establish the proper infrastructure and collaboration processes to effectively engage its growing membership.

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Intuit buying Mailchimp for $12B in move to focus on small business https://www.wraltechwire.com/2021/09/14/intuit-buying-mailchimp-for-12b-in-move-to-focus-on-small-business/ https://www.wraltechwire.com/2021/09/14/intuit-buying-mailchimp-for-12b-in-move-to-focus-on-small-business/#respond Tue, 14 Sep 2021 10:56:21 +0000 https://www.wraltechwire.com/?p=192857 By Diksha Madhok, CNN Business

Intuit is buying email newsletter platform Mailchimp for about $12 billion.

The maker of tax return product TurboTax and other financial software announced the cash-and-stock deal Monday, saying that it hopes Mailchimp will help it “become the center of small business growth.”

As part of the agreement, Mailchimp will work with QuickBooks, Intuit’s accounting software, to help small and medium-sized businesses acquire and retain customers, Intuit CEO Sasan Goodarzi said in a statement.

Mailchimp has “a lot of customer data. We have all the purchase data,” Goodarzi told investors on a conference call Monday. “The magic is putting these two together.”

Mailchimp was founded in Atlanta in 2001 and has 13 million users, ranging from small businesses and individuals to Fortune 100 companies. Together, the two firms plan to help companies market their businesses online, manage customer relationships and access capital.

“This is an exciting new chapter for Mailchimp, our 1,200+ dedicated employees, and customers,” said Ben Chestnut, CEO and co-founder of Mailchimp, in a statement.

Intuit said the transaction, which is still subject to regulatory approvals, is expected to close before the end of the company’s second quarter in fiscal 2022.

The-CNN-Wire™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

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How to raise money for a billion $ startup – go crazy and dangerous https://www.wraltechwire.com/2021/09/14/how-to-raise-money-for-a-billion-startup-go-crazy-and-dangerous/ https://www.wraltechwire.com/2021/09/14/how-to-raise-money-for-a-billion-startup-go-crazy-and-dangerous/#respond Tue, 14 Sep 2021 10:24:09 +0000 https://www.wraltechwire.com/?p=192855 Editor’s note: Joe Procopio is the Chief Product Officer at Get Spiffy and the founder of teachingstartup.com. Joe has a long entrepreneurial history in the Triangle that includes Automated Insights, ExitEvent, and Intrepid Media. He writes a column weekly for WRAL TechWire. It’s published each Tuesday.

RESEARCH TRIANGLE PARK – If we’re starting a company that we hope will one day reach a billion dollar valuation or more, we’ll need a different kind of strategy from the beginning.

An app is not likely to ever get to billion dollar potential, not anymore. Even a standard software play is going to have to have some kind of first-mover edge or new science to transcend the glut of options that exist today.

No, in order to start a billion dollar company, we’re going to have to be playing with something that’s both crazy and dangerous. And by crazy and dangerous, I mean it has to have at least one element that scares the hell out of investors.

Joe Procopio (Photo courtesy of Joe Procopio)

It’s a chicken-and-egg situation. A billion-dollar valuation is virtually impossible to achieve without a major cash infusion to prove out a crazy or dangerous concept. And since investors usually shy away from those kinds of concepts, how do we raise money for a billion-dollar kind of company?

Crazy and Dangerous? Hardware

So what do we mean by crazy and dangerous? It’s something that comes with major risk and doesn’t yet have any kind of track record for return. It’s also something that’s expensive, either the talent is rare or strategy shifts are inherently costly. Or both. Usually both.

Artificial intelligence, until recently, was considered crazy and dangerous. And even today, investors usually just stick to machine learning. Bitcoin and blockchain make a great recent example, which is why an entire fake digital market rose up around those things and fooled a lot of people with phony ICOs.

However, one of the oldest and easiest-to-understand examples of a crazy and dangerous element that drives investors away is hardware. Yes, plain old hardware. Any kind of product you can hold in your hands.

Hardware startups run the trifecta of crazy and dangerous.

One: It usually takes a large upfront investment to bring a physical product to market.

Two: A physical product requires an expensive physical distribution chain. And T

hree: Mistakes and changes are so expensive that concepts like feedback loops, continuous improvement, and continuous delivery are all but moot.

But hardware products are indeed investable, so how does that investment happen?

“Everyone is saying NO”

Last week, “Kelly” contacted me via my website as she was about to start raising a round for her bootstrapped hardware startup. Kelly, her product, and her company were all pretty impressive. A first time founder, she had scratched and clawed her way to a working prototype, a small team which featured a couple of experienced scientists, a patent pending, and about four-fifths of the way through filling out a small, but not insignificant, seed round.

We hopped on the phone. Turns out we knew a couple of the same investors, and those investors had, unsurprisingly, soured on the hardware aspect. They were nice, they were interested, they were even helpful, but they were all hung up on the hardware.

So let’s dive into Kelly’s approach, and let’s use hardware as our example. But keep in mind that all of this applies to any of the crazy and dangerous elements we discussed above. Or you can bring your own.

Don’t Get Thesis-Blocked

Because Kelly is already quite far along, her number one priority in fundraising is going to be to waste as little time as possible. Fundraising is a drag, both on our time and on our energy. It’s not just hearing “No” all the time, it’s hearing “Maybe.” It’s hearing “Let’s talk again in six weeks.” It’s hearing “These numbers are great, but can I see them broken out by region and maybe use some different colors in the chart?”

I’m paraphrasing that last one. A little.

Fundraising with a crazy and dangerous element in our startup can be a slow death. We’ll end up spending way too much time explaining and convincing, not just to land the investment, but also when it comes time to spend it. Kelly is talking to a lot of high-growth software investors, but as a first-timer, she needs investors who know hardware growth strategy.

Thus, she shouldn’t waste a lot of time pitching investors who don’t have hardware in their thesis. The good non-hardware investors will reject her outright. The better ones will introduce her to investors and firms who do indeed have hardware in their portfolio.

That’s not to say she should avoid investors with no hardware in their thesis. We never know where the money is going to come from, and if the investor is interested in her tech and open to her strategy and aggressive in getting a deal done, they deserve all her attention.

Ask For a Ton of Money

As I mentioned, Kelly will soon close a small seed round to bridge her company finances while she raises a more significant amount to market test her product. However, the number she was looking to raise for that second round, low seven-figures, immediately seemed too low to me.

Sure, we always need to be careful that valuations and dilution don’t creep up on us, even with billion-dollar thinking. But hardware is a different beast. With software, small changes are inexpensive and big pivots are survivable if we do them right. With hardware, small changes not only have to be designed, tested, and rolled into production, but then there’s distribution, packaging, and retro-fitting to consider, just for starters. And big pivots? In hardware, that’s called “starting over” or, more commonly, “shutting down.”

The biggest investor fear with hardware is the distribution mechanism. Hardware has to be manufactured and shipped, inventory has to be stored, defects need hands-on repair, shrinkage is a thing.

So when thinking about a go-to-market plan, we need to realize that, yes, we can take customer feedback from an MVP, but applying changes takes a ton of time, a ton of money, and potential obsolescence of existing units. These costs add up quickly.

Kelly also needs to be thinking about what’s next. She’s raising on her “A” story, the product she is building today for the purpose it’s intended for. But what happens when her product is a raging success? Does she need to spend another six to nine months raising another round to expand? Will she need another bridge over that time?

A while back, I wrote a post called Three Stories Every Entrepreneur Should Know that outlines Story A - as described above, Story B - which is when the company uses its initial success to catapult into new markets and new products, and Story C - the billion-dollar story.

At every story transition, Kelly needs runway for the runway. She needs to be raising this round not just for Story A, but also to be able to start the transition to Story B. This tells me she needs to be thinking about raising three times the number she has in mind.

Get Corporate

A move that far too few entrepreneurs consider is a strategic investment from an incumbent corporation within or related to the industry the startup is trying to disrupt.

These incumbent players are disrupt-able because they’re huge, they’re not nimble, and that makes innovation difficult for them. One of the ways they offset their lumbering size is to invest and eventually acquire innovation rather than creating it.

Not every disruption needs to be confrontational and not every investment needs to become an acquisition. If we’re careful with the terms, this kind of investment can make a nice stepping stone to that billion-dollar valuation while also acting as a soft landing if we don’t make it.

When we include corporations linked to the industry, we open up a lot of options. For example, if we’re building a better lawn-mower, we should be talking to John Deere and Honda. But we should also be talking to Toyota and Ford, because they don’t make lawn mowers. We should be talking to Dyson, because lawn mowers move a lot like vacuum cleaners. We should be talking to Scott’s, because people who care for lots of large lawns likely need lots of lawn mowing.

Many large corporations have research and development departments and a good number of them even have investment arms. Getting to know the people involved in those programs can never hurt, and it may open some doors that wouldn’t be identified otherwise.

Raising money for a startup with billion-dollar potential will always be an uphill battle, even if we use the right strategy, have a good head start, and get some early traction. It’s a long, winding road, but if we don’t start with the right strategy, we’ll never get on that road in the first place.

Hey! If you found this post actionable or insightful, please consider signing up for my weekly newsletter at joeprocopio.com so you don’t miss any new posts. It’s short and to the point.


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Apple warns about spyware vulnerability on eve of expected new phone announcement https://www.wraltechwire.com/2021/09/14/apple-warns-about-spyware-vulnerability-on-eve-of-expected-new-phone-announcement/ https://www.wraltechwire.com/2021/09/14/apple-warns-about-spyware-vulnerability-on-eve-of-expected-new-phone-announcement/#respond Tue, 14 Sep 2021 10:14:22 +0000 https://www.wraltechwire.com/?p=192853 By Sean Lyngaas, CNN Business

Apple has updated its software for iPhones to address a critical vulnerability that independent researchers say has been exploited by notorious surveillance software to spy on a Saudi activist. The news came Monday a day before Apple is expected to announce new phone and other products at a media event.

Researchers from the University of Toronto’s Citizen Lab said the software exploit has been in use since February and has been used to deploy Pegasus, the spyware made by Israeli firm NSO Group that has allegedly been used to surveil journalists and human rights advocates in multiple countries.

The urgent update that Apple released Monday plugs a hole in the iMessage software that allowed hackers to infiltrate a user’s phone without the user clicking on any links, according to Citizen Lab. The Saudi activist chose to remain anonymous, Citizen Lab said.

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Apple credited the Citizen Lab researchers for finding the vulnerability.

“Attacks like the ones described are highly sophisticated, cost millions of dollars to develop, often have a short shelf life, and are used to target specific individuals,” Ivan Krstić, head of Apple Security Engineering and Architecture, said in a statement.

Krstić said Apple rapidly addressed the issue with a software fix and that the vulnerability is “not a threat to the overwhelming majority of our users.”

Still, security experts encouraged users to update their mobile devices for protection.

In a statement, NSO Group did not address the allegations, only saying, “NSO Group will continue to provide intelligence and law enforcement agencies around the world with life saving technologies to fight terror and crime.”

The firm has previously said its software is only sold to vetted customers for counterterrorism and law enforcement purposes.

Researchers, however, say they have found multiple cases in which the spyware was deployed on dissidents or journalists. In 2019, Citizen Lab analysts alleged that Pegasus was used on the mobile phone of the wife of a slain Mexican journalist.

In a lawsuit filed in 2019, Facebook accused NSO Group of being complicit in a hack of 1,400 mobile devices using WhatsApp. (NSO Group disputed the allegations at the time.)

The proliferation of easy-to-use mobile hacking tools has given governments around the world a new and stealthy means of targeting adversaries. Sophisticated spyware made by NSO Group and other vendors has been reportedly used from Uzbekistan to Morocco.

The surge in spyware prompted a United Nations panel of human rights experts in August to call for a moratorium on the sale of such surveillance tools. The UN panel said the ban should remain in place until governments have “put in place robust regulations that guarantee its use in compliance with international human rights standards.”

The-CNN-Wire™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

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