Samsung acquires network analytics startup Zhilabs to help its transition to 5G

Samsung Electronics is betting that acquiring Zhilabs, a real-time networks analytics startup based in Barcelona, will ease its transition from 4G to 5G technologies. Financial details of the deal, which was announced today, have not been disclosed. Zhilabs will be fully owned by Samsung, but it will continue to operate independently under its own management.

The acquisition of Zhilabs is part of Samsung’s initiative, announced in August, to invest 25 trillion won (about $22 billion) in businesses working on AI, 5G, components for self-driving vehicles, and biopharmaceutical technologies.

In a statement, Youngky Kim, Samsung Electronic’s president and head of networks business, said “5G will enable unprecedented services attributed to the generation of exponential data traffic, for which automated and intelligent network analytics tools are vital. The acquisition of Zhilabs will help Samsung meet these demands to assure each subscriber receives the best possible service.”

Founded in 2008, Zhilabs’ products are used by customers including Hewlett Packard Enterprise, Vodafone, and Telefonica to analyze and test network performance in real-time. Because its solutions allow service issues to be automatically detected and fixed, Zhilabs’ AI-based automation will help Samsung launch new services related to the industrial Internet of Things and smart cars.

Scribd and The New York Times announce a joint $12.99 subscription

If you want to subscribe to both Scribd and The New York Times, you can now do it for a combined price of $12.99 per month — particularly impressive when you consider that a standard NYT digital subscription costs $15.99 on its own.

You sign up and pay through Scribd, but once you do, you’ll get separate logins. Those will give you full access to The Times’ website and apps, as well Scribd’s library of ebooks, audiobooks and more. (One caveat: You’ll need to be a new subscriber to both services.)

The two companies have worked together in the past, both on a student subscription and by incorporating selected Times articles into the Scribd service. This, however, looks like their biggest partnership yet.

When asked about the price, The Times’ vice president of customer experience and retention Dork Alahydoian said simply, “We felt the need to be competitive with other major services.”

He added that The Times is hoping use these kinds of bundles to find and retain new subscribers. However, it hasn’t done many of these partnerships in the past — basically, a promotion with Spotify is the only one in the United States.

“We definitely needed to make sure it was the right partner, the right audience, the right model,” Alahydoian said. In his view, Scribd was a good fit because it attracts a similar audience as The Times, namely educated readers who are “willing to pay for content.”

As for whether The Times might do more deals like this in the future, he said, “We’re always looking for the right partnership. It’s about making sure it’s an impactful relationship.”

Scribd, meanwhile, has been experimenting with subscription bundles of its own. In this case, CEO Trip Adler said he’s hoping to provide “everything you could want to read in one subscription.”

“By having such a great offering, we think we can really expand the number of people who pay for news and for books and for written content,” he added.

Blockchain media startup Civil is issuing full refunds to all buyers of its cryptocurrency

Many doubted The Civil Media Company‘s ambitious plan to sell $8 million worth of its cryptocurrency, called CVL. 

The skeptics, as it turns out, were right. Civil’s initial coin offering, meant to fund the company’s effort to create a new economy for journalism using the blockchain, failed to attract sufficient interest. The company announced today that it would provide refunds to all CVL token buyers by October 29.

Civil’s goal was to sell 34 million CVL tokens for between $8 million and $24 million. The sale began on September 18 and concluded yesterday. Ultimately, 1,012 buyers purchased $1,435,491 worth of CVL tokens. A spokesperson for Civil told TechCrunch an additional 1,738 buyers successfully registered for the sale, but never completed their transaction.

Civil isn’t giving up. The company says “a new, much simpler token sale is in the works,” details of which will be shared soon. Once those new tokens are distributed, Civil will launch three new features: a blockchain-publishing plugin for WordPress, a community governance application called The Civil Registry and a developer tool for non-blockchain developers to build apps on Civil.

ConsenSys, a blockchain venture studio that invested $5 million in Civil last fall, has agreed to purchase $3.5 million worth of those new tokens. The purchase is not an equity; all capital from the token sale is committed to the Civil Foundation, an independent nonprofit initially funded by Civil that funds grants to the newsrooms in Civil’s network.

In a blog post today, Civil chief executive officer Matthew Iles wrote that the token sale failure was a disappointment but not a shock. Days prior, he’d authored a separate post where he admitted things weren’t looking good.

“This isn’t how we saw this going,” Iles wrote. “The numbers will show clearly enough that we are not where we wanted to be at this point in the sale when we started out. But one thing we want to say at the top is that until the clock strikes midnight on Monday, we are still working nonstop on the goal of making our soft cap of $8 million.”

A recent Wall Street Journal report claimed Civil had reached out to The New York Times, The Washington Post, Dow Jones and Axios, among others, but failed to incite interest in its token.

Separate from its token sale, Civil has inked strategic partnerships with media companies like the Associated Press and Forbes, both of which confirmed to TechCrunch today that the failed token sale doesn’t impact their partnerships with Civil. 

Forbes became the first major media brand to test Civil’s technology when it announced earlier this month that it would experiment with publishing content to the Civil platform. As for the AP, it granted the newsrooms in Civil’s network licenses to its content. 

Civil, of course, isn’t the only blockchain startup targeting journalism. Nwzer, Userfeeds, Factmata and Po.et, which was founded by Jarrod Dicker, a former vice president at The Washington Post, are all trying their hand at bringing the new technology to the content industry.

Which, if any, will actually find success in the complicated space, is the question.

10 lessons from Marketo’s growth to a multi-billion-dollar exit

With Adobe’s acquisition of Marketo, I have been reflecting on what an amazing and pioneering company Marketo has been since it was founded in 2006. There are very few tech companies that have defined a new category, executed a successful IPO, been acquired by a private equity firm for more than four times the company’s initial IPO market value and now, at a price of $4.75 billion, become the largest acquisition of a world-class company like Adobe.

The credit for this dream-come-true Silicon Valley company goes to the co-founding team of Phil Fernandez, Jon Miller and David Morandi, who together built an amazing customer-first product, defined a breakthrough category and launched a marketing automation company that continues to delight and amaze partners and customers alike.

I had the unique pleasure of meeting the founding team in 2006 when they shared their vision and passion for marketing automation. At the time, all they had was a PowerPoint deck. But it was clear then that they had a special idea and the unique capability to build a breakthrough product to deliver on their vision.

In all honesty, I couldn’t know how truly extraordinary the company would become. Thankfully, I was lucky enough that the team chose me and my former partner Bruce Cleveland as their first investor and also was fortunate to serve on the board for 10 years. Most recently, I was thrilled that Phil joined me at Shasta. One of the qualities I admire most about Phil — which was apparent all those years ago and continues to this day — is that he never stops iterating to do things better or faster or more efficiently or more thoughtfully. Phil always carried a notebook that said “THINK” on the cover, which epitomizes how he approaches his work.

Phil recently shared his “10 Things I’d Do Even Better If I Did It Again” presentation with our team and our founder/CEO community. We believe his insights are “10 Must-Dos” for today’s software entrepreneurs. It’s hard for entrepreneurs to know the trade-offs required when making the tough decisions — especially early on ­– but what follows is what I learned from Phil, and the key takeaways from his talk that I believe can help more founders create iconic companies with lasting value. (Note: Click here to view excerpts of Phil’s talk.)

Have one person own revenue

If your company is like every other company, there are two executives — vice president of Sales and the chief marketing officer — who are regularly locking horns because they are each tasked with taking different approaches to the same goal of increasing revenue. How do you solve this?

Hire a chief revenue officer (CRO) who can see both perspectives, plus give the context that sales and marketing are missing. This seat understands the big picture and doesn’t belong in marketing or sales. The CRO needs to talk strategically about life cycle revenue — across the customer journey. She or he should be a storyteller who can look at the numbers and the models and explain it all in plain English to the executive team so that everyone understands. Like a chief people officer, you’re going to have to spend on a CRO — but it’s worth it in the long run.

Hire a chief people officer (CPO) ASAP

Your company needs a leader of “all things people” who can make sure your workplace is welcoming, diverse and responsive to employee needs. For the staff to have trust, this person needs to be in a role that is empowered by the organization and not just by the CEO. Hire the most senior, overqualified HR executive into your business as early as possible — Series A level — and have him or her report directly to the CEO. By constantly listening to people — which is really hard when you’re working really hard — the CPO will help build your culture and be the eyes and ears for the CEO. Investing early in HR will come back to you tenfold through employee retention, team morale and an enviable culture.

Give back when it makes no sense

The day you think you’ve got to get a product release out the door and there’s no time to do anything else is the day you get out and give back in whatever way makes sense for your company and your community. Give employees time off to volunteer. Pick a cause for your company to support. Or, consider starting a charitable foundation with pre-public stock. It will create a spirit and energy that will give back to your team five or 10 times whatever it is costing you.

Charge your first customer

Phil personally wrote a stupid thing on their website that said, “At Marketo, your success doesn’t have a price.” That copy stayed up for years as a testament to how customer-centric they were. They were proud that they weren’t charging for services. But as Phil said, that was a big mistake; they should have been charging from day one.

When you’re a startup, short-range thinking is seductive, but long-range thinking is powerful.

There really isn’t any friction about asking customers to pay for services. If you say, “Look, this product is great. It’s going to transform your business but it’s not easy and it will cost money,” they will spend it. Feature-level sales is a great way to justify why you are charging what you are charging, and it keeps customers renewing services and adding more features as their business grows and changes. To make this strategy work, gear your sales metrics toward incremental increases over time­ instead of pushing sales reps to sell as much as they can all at once. Customers will pay for quality products that meet their needs.

Build a world-class Rev Ops/Sales Enablement team

You need a VP-level Rev Ops/Sales Enablement executive by the time your company reaches $2-3 million in revenue. That individual must think holistically about how revenue is happening, from the early lead in the door and the sale to renewal and the up-sale; understanding full lifetime value and thinking about it in a modeling sense. She or he needs to be a storyteller — one who can look at the numbers, look at the models and then explain it in plain English to the executive team. That’s gold.

Focus on continuous ARPU expansion

Today, to increase ARPU (average revenue per user), you need to design feature-level packaging every bit as much as how you design product functionally. The same people on product management ought to be thinking together with Rev Ops and Sales about how you dish out the product, how you launch the pieces, how you turn on pieces and how you enable pieces. It becomes a part of the art of product design as much as the art of revenue design — and that’s where these two rules of thought really come together. Basically, you need to design an expansion pass.

Incubate new product initiatives

Marketo failed in defining a multi-product company, from when it was $30 million a year to when it was $300 million a year. If you’re going to bring a second product line into the company — whether it’s organic or inorganic — it needs to be incubated. It needs to have its own dedicated sales team and its own separate quotas. If you’re thinking about becoming a multi-product company, do not pass Go, do not collect $200; go read Geoffrey Moores’ Zone to Win, the only business book Phil has ever recommended.

Pursue constant technology renewal

The pace at which tech is moving and the competitive advantage that new tech is providing over old tech has never been like this during the past 35 years. Today, you need someone that’s charged with thinking not about product but about the future. You need to value technical currency. If you’re three years old on your technology and a new company enters your market — the degree of agility, pace and performance the new entrant has in running circles around your company will win over a five-year cycle. Every time.

Always be seeking more TAM

No matter how good your initial tenure is, no matter how good it feels, no matter how amazing you see your company, as the CEO, as a leader, have a Plan B. Know what’s next, know where you’re going next and make sure you’re always talking about it. Be absolutely zealous about ensuring you know the next piece of TAM you’re going to go after. Think about what’s going to happen if you have more money; what would you do next? Give yourself that opportunity to dream, but make it real, make it defensible.

Watch the clock during scale up

When you’re a startup, short-range thinking is seductive, but long-range thinking is powerful. Always be watching the time. The tension between operating leverage and scale-up investment is really dangerous. At Marketo, they got to it late and their growth slowed a little too much. Live in the real world and focus on cash and on making the investments so you have the capacity when you need it. Have a long-range planning process and understand the day when you’ll need $2 million of ramp capacity. Don’t let the tyranny of a seductive short-range model triumph over what the real world is telling you about the dynamics of growing the business. Understand what it takes to really scale.

Netflix shares are up after the streaming service adds nearly 7M new subscribers in Q3

After a disappointing second quarter, Netflix is back in Wall Street’s good graces. The company just released its third-quarter earnings report, and as of 5:30pm East Coast time, the stock is up 12 percent in after-hours trading.

The most important number here is subscriber growth, and that’s where Netflix came in way ahead of expectations, with 6.96 million net additions, compared to the 5.07 million that analysts predicted. The service now has a total of 137 million members, and 130 million paying members.

The company also reported earnings of 89 cents per share on revenue of $4 billion — analysts had predicted EPS of 68 cents.

In addition to reporting on the latest financials, Netflix’s letter to shareholders also offers an update on its original content strategy. It distinguishes between two different types of Netflix Originals — the ones like “Orange Is the New Black,” where Netflix gets the first window for distribution, and others like “Stranger Things,” where it actually owns the content.

The company says:

Today, we employ hundreds of people in physical production, working on a wide variety of owned titles spread across scripted and unscripted series, kids, international content, standup, docs and feature films from all over the world. To support our efforts, we’ll need more production capacity; we recently announced the selection of ​Albuquerque, New Mexico​ as the site of a new US production hub, where we anticipate bringing $1 billion dollars in production over the next 10 years and creating up to 1,000 production jobs per year. Our internal studio is already the single largest supplier of content to Netflix (on a cash basis).

Netflix subscription adds Q3

Netflix also says romance has been big recently, thanks to its “Summer of Love” slate of original films, which have been watched by more than 80 million accounts. Apparently “To All The Boys I’ve Loved Before” did particularly well, becoming one of Netflix’s most-watched original films, “with strong repeat viewing.”

The service plans to release “Gravity” director Alfonso Cuarón’s new film “Roma” in December, which has already been getting rave reviews at film festivals. While Netflix’s original movies generally have a minimal presence in theaters, the company says “Roma” (like Paul Greengrass’ “22 July”) will be released on more than 100 screens worldwide — not a blockbuster rollout, but not a perfunctory release, either.

The company is forecasting the addition of 9.4 million new members in the fourth quarter.