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There are few things that US political leaders can agree on these days, but one of them thankfully seems to be 5G. Manufacturing, transportation, agriculture, healthcare, and many other industries are beginning to incorporate the fast device-to-device connectivity offered by the fifth generation wireless standard. However, the main 3.5 GHz frequency band was reserved for military and government purposes. After years of Congress and the latest executive action, it will now be auctioned in early 2021. The marketing fluff will finally give way to the promises of technology. Further analysis by Danny Crichton:
In recent years, the pressure on US heads of government has increased due to the slow 5G transition, which has fallen behind comparable countries like China and South Korea. Korea in particular led the world with more than two million 5G subscribers in the country. This is thanks to Seoul's aggressive industrial policy to invest in the country's telecommunications infrastructure and take the lead in this new wireless transition.
The US has advanced faster in the millimeter spectrum (high frequency spectrum) for 5G with the largest bandwidth, but has lagged behind in allocating the mid-band spectrum. While today's announcements are noteworthy, there will also be concerns about whether 100 MHz of spectrum is enough to support a wide variety of 5G devices, and so this allocation may just be the first in a row.
However, an additional mid-band spectrum for 5G will drive the transition and help device and chip makers to focus on the specific bands they need for their products. While it may take a few more years for 5G devices to become widespread (and useful) in the US, the spectrum has been a determining factor in reaching the next generation of wireless devices and a gate that is finally opening.
All types of IPOs
"Today it is almost difficult to remember the fear that the startup country has taken over," writes Alex Wilhelm in a review of the latest unicorn news for Extra Crunch. "Sure, there are warning signs of cloud growth rates, but for many unicorns we are still living in boom times." In fact, two of the biggest names in pre-public startups reappear after IPOs. Airbnb could go public this month despite pandemic losses in its business. The payment provider Stripe also seems to be moving in this direction. The oldest unicorn in the valley, Palantir, can finally make this direct submission. Meanwhile, Accenture spinout Duck Creek Technologies had its big liquidity event for its private equity owners yesterday with a 50% pop. Alex took a closer look at the Insurtech company's financial data for Extra Crunch on Monday and essentially predicted events:
(T) To understand the sales base we need to annualize the nine month period through May 31, 2020 (ew) and thus extrapolate a (sort of) sales multiplier using a number of metrics that we do not use. t tend to use for things like that (yuck).
- Duck Creek nine month revenue for the period ended May 31, 2020: $ 153.35 million.
- That number, annualized: $ 204.5 million.
- Implies a sales multiplier on its two IPO ratings: 11.9x and 13.2x.
They seem a little sensible? Maybe a little expensive given the company's slow revenue growth and below average SaaS gross margin?
According to this logic, the company will increase its IPO range, the price over the increased interval and five times on the first trading day.
Do you want more zingers like that? He's busy guiding the unicorn's path to the 2020 IPO through all of its twists and turns on The Exchange, which subscribers can receive in daily mail and as a weekly newsletter that comes out every Saturday.
Don't let a theinformationsuperhighway reporter accidentally crash your corporate meeting
Our security editor Zack Whittaker had a first-person situation this week with poor security practices at a startup. And not just any kind of startup:
I got a tip about a new security startup with new funding and an idea that piqued my interest. I didn't have much to do, so I did what any nosy reporter would and started rummaging around. The startup's website was bubbly, but mostly a jumble of words. I couldn't find basic answers to my simple questions. However, the idea of the company still seemed smart. I just wanted to know how the company actually works.
So I went through the website a little harder.
Reporters use a variety of tools to gather information, monitor changes to websites, verify that someone has opened their email for comments, and navigate huge pools of public data. These tools are not special and are reserved only for media representatives who are card-carrying. They are open to anyone looking for and reporting information. One tool I use a lot on the security beat is listing all of the subdomains on a company's website. These subdomains are public, but intentionally not visible. However, you can often find things that you wouldn't find on the website itself.
Bingo! I immediately found the company's pitch deck. Another subdomain had a lot of documentation on how the product worked. Some subdomains were not loaded and some were only blocked for employees. (It's a line in the legal sand, too. If it's not public and you aren't let in, don't break the door.) I clicked on another subdomain. A page flashed, an icon in my Mac dock bounced briefly, and the camera lamp flashed. Before I could register what was happening, I had joined what appeared to be the company's morning meeting.
Founders, lock these documents!
Megan Rose Dickey, who started writing a weekly column on technology work called Human Capital, has compiled a short series of resources for businesses, including a glossary of terms and key organizations, and key topics and data points for context. Here's more:
After the Minneapolis police killed George Floyd and the subsequent racial justice riot, rooftop technicians shouted "Black Lives Matter," even though Black and Latinx people were underrepresented in their businesses. In some cases, these companies' proclamations of "Black Lives Matter" felt particularly performative in contrast to their respective stance on Trump and selling their technology to law enforcement agencies.
However, this has led to an increased focus on diversity, inclusion and equity in the technology industry. If you are wondering, "Where can I find black and brown talent?" or to say, "I would invest in Black and Latinx people if I could find them!" then this is for you.
Below you will learn more about some of the current issues, some of the key organizations working in the field, and access to a glossary of commonly used terms in the field of diversity, equity, and inclusion in technology.
Minimum viable email and other tips for growth marketing
Lucas Matney went through three growth marketing conversations at an early stage to identify key tactics for those who weren't there. In addition to discussions around SEO and landing pages, here is a great presentation by Susan Su of Sound Venture on growing a business through email marketing in 2020. Here is an excerpt:
“The first role email plays in growth is a tool that you can use to speed up your reinforcement feedback loops. For example, email growth can help you increase LTV if you're building an e-comm for consumers or shorten the sales cycle if you're a B2B or SaaS company. It's also very effective at reducing attrition or churn, which of course is key, and sometimes an overlooked way to actually increase growth. "
The second role (email) plays for growth is a two-way channel that connects your product and your user. This channel can pass information about your product value from your brand to your user or information about your user needs and preferences from them to you. "
In her full talk moderated by your loyal correspondent, you will find advanced topics such as improving your domain's credibility with spam filters.
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Hello and welcome back to Equity, theinformationsuperhighway's venture capital-focused podcast (now on Twitter!) Where we unpack the numbers behind the headlines.
This week we had the full crew again – Natasha Mascarenhas, Danny Crichton, Chris Gates and me. And as always, having the entire crew was important as there was a huge amount of news to get through. Before we get on the show, make sure you've checked out the latest work from Danny on the theinformationsuperhighway list.
- The TikTok saga continues: This week we spent a few minutes discussing why bankers are being incentivized to make the proposed TikTok-Microsoft deal as competitive as possible. Or at least make it look as competitive as possible. There is some data in Microsoft about how the business is viewed.
- Airbnb could go public this month! It could go public before the end of the year! That's a lot better than we expected. (Bloomberg got its Q2 finances.)
- Palantir could request direct listing next month! That's great. We wanted to know what Palantir really is, namely a consulting company or a technology company. And then we played rating bingo so we could look back and ridicule each other later.
- I was excited to see Duck Creek going public. Few of my friends were upset with me.
- The three of us also took a minute to read the latest Pinterest news that things are going badly and are sexist according to his now-former COO. We'd love to stop reporting these stories, but they keep happening.
- Danny had some nice SPAC data to share to illustrate that SPACs aren't just a meme, they're a real driving force behind public company action this year. Like the announced Tesla stock split, which led us to ask why a few times.
- Next, Natasha took us through her latest work and examined how Gen Z is shaking up the finance world. We put the changes in a historical context and found that the children are really fine in the end.
- Danny ended us on a note on Conduit (connecting founders and early-stage investors) and Circle (creator software). Both are worth your time.
And that was our show! We are back on Monday morning. Stay calm!
Equity decreases every Monday at 7:00 a.m. and Friday at 6:00 a.m. So subscribe to us on Apple Podcasts, Overcast, Spotify and All Casts.