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Hands on with Telepath, the social network taking aim at abuse, fake news and, to some extent, ‘free speech’

There’s no doubt that modern social networks have let us down. Filled with hate speech and abuse, moderation and anti-abuse tools were an afterthought they’re now trying to cram in. Meanwhile, personalization engines deliver us only what will keep us engaged, even if it’s not the truth. Today, a number of new social networks are trying to flip the old model on its head — whether that’s attempting to use audio for more personal connections, like Clubhouse, eliminate clout chasing, like Twelv, or, in the case of new social network Telepath, by designing a platform guided by rules that focus on enforcing kindness, countering abuse, and disabling the spread of fake news.
Many of these early efforts are already facing challenges.
Private social network Clubhouse has repeatedly demonstrated that allowing free-flowing communication in the form of audio conversations is an area that’s notoriously difficult to moderate. The app, though still unavailable to the broader public, courted controversy in September when it allowed anti-Semitic content to be discussed in one of its chat rooms. In the past, it had also allowed users to harass an NYT reporter openly.

Meanwhile, Twelv, a sort of Instagram alternative, ditches the “Like” button concept and all the other features now overloading Instagram, which had once been just a photo-sharing network. But, unfortunately, this also means there’s no easy way to find and follow interesting users or trends on Twelv — you have to push friends to join the app with you or know someone’s username to look them up, otherwise it shows you no content. The result is a social network without the “social.”
Telepath, meanwhile, is a more interesting development.
It’s pursuing an even loftier goal in social networking — creating a hate speech-free platform where fake news can’t be distributed.
No social network to date has been able to accomplish what Telegraph claims it will be able to do in terms of content moderation. Its ambitions are optimistic and, as the network remains in private beta, they’re also untested at scale.
Though positioned as a different kind of social network, Telepath isn’t actually focused on developing a new sharing format that could encourage participation — the way TikTok popularized the 15-second video clip, for example, or how Snapchat turned the world onto “Stories.”
Instead, Telepath, at first glance, looks very much like just another feed to scroll through. (And given the amount of linked Twitter content in Telepath posts, it’s almost serving as a backchannel for the rival platform.)
The startup itself was founded by former Quora employees, including former Quora Business & Community head, Marc Bodnick, now Telepath Executive Chairman; and former Quora Product Lead, Richard Henry, now Telepath CEO. They’re aided by former Quora Global Writer Relations Lead, Tatiana Estévez, now Telepath Head of Community and Safety; and Ro Applewhaite, previously research staff for Pete Buttigieg for America, now Telepath Head of Outreach.
It’s backed by a couple million in seed funding, led by First Round Capital (Josh Kopelman). Other backers include Unusual Ventures (Andy Johns), Slow Ventures (Sam Lessin), and unnamed angels. Bodnick and his wife, Michelle Sandberg, also invested.

Image Credits: Telepath

When talking about Telepath, it’s clear the founders are nostalgic for the early days of the web — before all the people joined, that is. In smaller, online communities in years past, people connected and made internet friends who would become real-world friends. That’s a moment in time they hope to recapture.
“I’ve benefited a lot by meeting people through the internet, forming relationships and having conversations — that sort of thing,” says Henry. “But the internet just isn’t fun in the ways that it used to be fun.”
He suggests that the anonymity offered by networks like Reddit and Twitter make it more difficult for people to make real-world connections. Telepath, with its focus on conversations, aims to change that.
“If we facilitate a really fun, kind, and empathetic conversation environment, then lots of good things can happen. And it might be that you potentially find someone you want to work with, or you end up getting a job, or you meet new friends, or you end up meeting offline,” Henry says.
Getting Started
To get started on Telepath, you join the network with your mobile phone number and name, find and follow other users, similar to Twitter, then join interest-based communities as you would on Reddit. When you launch the app, you’re meant to browse a home feed where conversation topics from your communities and interesting replies are highlighted — orange for those replies from people you follow and gray for those that Telepath has determined are worth being elevated to the home screen.
As you read through the posts and visit the communities, you can “Thumbs Up” content you like, downvote what you don’t, reply, mute, block, and use @usernames to flag someone.

Image Credits: Telepath, screenshot via TechCrunch

Another interesting design choice: everything on Telepath disappears after 30 days. No one will get to dig through your misinformed posts from a decade ago to shame you in the present, it seems.
What’s most different about Telepath, however, is not the design or format. It’s what’s taking place behind the scenes, as detailed by Telepath’s rules.
Users who join Telepath must agree to “be kind,” which is rule number one. They must also not attack one another based on identity or harass others. They must use a real name (or their preferred name, if transgender), and not post violent content or porn. “Fake news” is banned, as determined by a publisher’s attempts at disseminating misinformation on a regular basis.
Telepath has even tried to formalize rules around how polite conversations should function online with rules like “don’t circle the drain” — meaning don’t keep trying to have the last word in a contentious debate or circumvent a locked thread; and “stay on topic,” which means don’t bombard a pro-x network with an anti-x agenda (and vice versa.)

Image Credits: Telepath

To enforce its rules, Telepath begins by requiring users to sign up with a mobile phone number, which is verified as a “real” number associated with a SIM card, and not a virtual one — like the kind you could grab through a “burner” app.
In order to the create its “kind environment,” Telepath says it will sacrifice growth and hire moderators who work in-house as long-term, trusted employees.
“All the major social networks essentially grew in an unbounded way,” explains Henry. “They had 100 million-plus active users, then were like, ‘okay, now how do we moderate this enormous thing?’,” he continues. “We’re in a lucky position because we get to moderate from day one. We get to set the norms.”
“Day one” was a long time in the making, however. The team rebuilt the product four times over a couple of years. Now, they say they’ve developed internal tools that provide moderators with visibility into the system.
According to moderator head Estévez, these include a reporting system, real-time content streams organized in to buckets (e.g. a bucket for “only new users”), as well as various searchable ways to get context around a report or a particular problematic user.
“Really good tools — including real-time streams of content, classifiers for problematic behavior, searchable context, and making it hard for banned users to return — mean that each moderator we hire will be quite scalable. We think that there are network effects around positive behavior,” she says.

Image Credits: Telepath

“It’s our intention to scale up fast and high accuracy moderation decision-making, which means that we’re going to be investing a lot of engineering effort in getting these tools right,” she adds.
The founders have decided not to use any third-party systems to aid in moderation at this time, they told TechCrunch.
“We looked at a bunch of off-the-shelf [moderation systems], and we’re basically building everything that we need from scratch,” says Henry. “We just need more control over being able to tweak how these systems work in order to get the outcome that we want.”
The investment in human moderation over automation will also require additional capital to scale. And Telepath’s decision to not run ads means it will eventually need to consider alternative business models to sustain itself. The company, for now, is interested in subscriptions, but hasn’t made decisions on this front yet.
Banning the trolls
Though Telepath has only 4,000-plus users in its private beta, the two-person moderation team is already tasked with moderating posts from across the thousands of pieces of content shared on a daily basis. (The company doesn’t disclose how many violations it takes action against per day, on average.)
When a user breaks the rules, moderators may first warn them about the violation and may require them to take down or edit a specific post. No one is punished for making a mistake or being unaware of the rules — they’re first given a chance to fix it.
But if a user breaks the rules repeatedly or in a way that seems intentional, such as engaging in a harassment campaign around another user, they are banned entirely. Because of the phone number verification system, they also can’t easily return — unless they go out and purchase a new phone, that is.
These moderation actions don’t necessarily have to follow strict guidelines, like a “three strikes rule,” for example. Instead, the way the rules may be enforced are determined on a case-by-case basis. Where Telepath leans towards stricter enforcement is around intentional and flagrant violations, or those where there’s a pattern of bad behavior. (As with Reply Guys and sealioning behavior.)
In addition, unlike on Facebook and Twitter — platforms that sometimes seem to be caught off guard by viral trends in need of moderation — Telepath intends for nothing to go viral on its platform without having been seen by a human moderator, the company says.
Fake News
Telepath is also working to develop a reputation score for users and trust scores for publishers.
In the case of the former, the goal is help the company determine how likely the user is to break Telepath’s rules. This isn’t developed yet, but would be something used behind the scenes, not put on display for all to see.
For publishers, the trust score will be how factually correct they are what percentage of the time.

Image Credits: Thomas Faull (opens in a new window) / Getty Images

“For example, if the most popular article in terms of views from the publisher is just completely factually incorrect or intentionally misleading…that should have a bigger penalty on the trust score,” explains Henry. “The problem is that the incumbent platforms have rules against disinformation, but the problem is that they don’t enforce them out of this desire to appear balanced.”
Bodnick adds this challenge is not as insurmountable as it seems.
“Our view is that, actually, a handful of outlets are responsible for most of the disinformation…I don’t think our intent is to build out some modern-day truth system that will figure out if The Washington Post is slightly more accurate than The New York Times. I think the main goal will be to identify repeat disinformation publishers — determine that they are perpetual publishers of disinformation, and then crush their distribution,” says Bodnick.
This plan, however, involves setting rules on Telepath that fly in the face of what many today consider “free speech.” In fact, Telepath’s position is that free speech-favoring social networks are a failed system.
“The problem, in our view, is that when you take this free-speech centered approach that sort of says: ‘I don’t care how many disinformation posts Breitbart has published in the last — three years, three months, three weeks — we’re going to treat every new post as if it could be equally likely to be truthful as any other post in the system,’” says Bodnick. “That is inefficient.”
“That’s how we will scale this disinformation rule — by determining which relatively small group of publishers — I’m guessing it’s hundreds, low hundreds — are responsible for publishing lots of disinformation. And then take their distribution down,” he says.
This opinion on free speech is shared by the team.
“We’re trying to build a community, which means that we have to make certain tradeoffs,” adds Estévez. “In the rules we refer to Karl Popper’s paradox of tolerance — to maintain a tolerant society, you have to be intolerant of intolerance. We have no interest in giving a platform to certain kinds of speech,” she notes.
This is the exact opposite approach that conservative social media sites are taking, like Parler and Gab. There, the companies believe in free speech to the point that they’ve left up content posted by an alleged Russian disinformation campaign, saying that no one filed a report about the threat, and law enforcement hadn’t reached out. These MAGA-friendly social networks are also filled with conspiracies, un-fact checked reports, and, frankly, a lot of vitriol.
The expectation is that if you go on their platforms, you’re in charge of muting and blocking trolls or the content you don’t like. But by their nature, those who join these platforms will generally find themselves among like-minded users.
Twitter, meanwhile, tries to straddle the middle ground. And in doing so, has alienated a number of users who think it doesn’t go far enough in counteracting abuse. Users report harassment and threats, then wait for days for their report to be reviewed only to be told the tweet in question didn’t break Twitter’s terms.
Telepath sits on the other end of the spectrum, aggressively moderating content, blocking and banning users if needed, and punishing publications that don’t fact check or those that peddle misinformation.
“Kindness” carve-outs
And yet, despite all this extra effort, Telepath doesn’t always feature only thoughtful and kind-hearted conversations.
That’s because it has carved out an exception in its kindness rule that allows users to criticize public figures, and because it doesn’t appear to be taking action on what could be problematic, if not violating, conversations.

Image Credits: Telepath

A user’s experience in these “gray” areas may vary by community.
Telepath’s communities today focus on hobbies and interests, and can range from the innocuous — like Books or Branding or Netflix or Cooking, for example — to the potentially fraught, like Race in America. In the latter, there have been discussions about the capitalization of “Black” where it was suggested that maybe this wasn’t a useful idea. In another, sympathy is expressed for a person who was falsely pretending to be a person of color.
In a post about affordable housing, someone openly wondered if a woman who said she didn’t want to live near poor people was actually racist. Another commenter then noted that gang members can bring down property values.
A QAnon community, meanwhile, discusses the movement and its ridiculous followers from afar — which is apparently permitted — though supporting it in earnest would not be.
There are also nearly 20 groups about things that “suck,” as in GOPSucks or CNNSucks or QuibiSucks.
Anti-Trump content, meanwhile, can be found on a network called “DumbHitler.”
Meanwhile, online publishers who routinely post discredited information are banned from Telepath, but YouTube is not. So if feel you need to share a link to a video of Rudy Giuliani accusing Biden of dementia, you can do so — so long as you don’t call it the truth.
And you can post opinions about some terrible people in which you describe them as terrible, thanks to the public figure carve-out.
Cheater and deadbeat dad? Go ahead and call them a “disgusting human being.” VP Pence was referred to by a commenter as “SmugFace mcWhitey” and Ronny Jackson is described as “such a piece of sh**.”
Explains Estévez, that’s because Telepath’s “be kind” rule is not intended to protect public figures from criticism.
“It is important to note that toxicity on the internet around politics isn’t because people are using bad words, but because people are using bad faith arguments. They are spreading misinformation. They are gaslighting marginalised groups about their experiences. These are the real issues we’re addressing,” she says.
She also notes that online “civility” is often used to silence people from marginalized groups.
“We don’t want Telepath’s focus on kindness to be turned against those who criticize powerful people,” she adds.
In practice, the way this plays out on Telepath today is that it’s become a private, closed door network where users can bash Trump, his supporters and right-wing politicians in peace from Twitter trolls. And it’s a place where a majority agrees with those opinions, too.
It has, then, seemingly built the Twitter that many on the left have wanted, the way that conservative social media, like Gab and Parler, built what the right had wanted. But in the end, it’s not clear if this is the solution for the problems of modern social media or merely an escape. It also remains to be seen whether a mainstream user base will follow.
Telepath remains in a closed beta of indefinite length. You need an invite to join.

Hands on with Telepath, the social network taking aim at abuse, fake news and, to some extent, ‘free speech’

Accessibility’s nextgen breakthroughs will be literally in your head

Jim Fruchterman

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Jim Fruchterman is the founder of Tech Matters and Benetech, nonprofit developers of technology for social good.

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A $6 trillion wake up call for the tech industry

Predicting the future of technology for people with visual impairments is easier than you might think. In 2003, I wrote an article entitled “In the Palm of Your Hand” for the Journal of Visual Impairment & Blindness from the American Foundation for the Blind. The arrival of the iPhone was still four years away, but I was able to confidently predict the center of assistive technology shifting from the desktop PC to the smart phone. 
“A cell phone costing less than $100,” I wrote, “will be able to see for the person who can’t see, read for the person who can’t read, speak for the person who can’t speak, remember for the person who can’t remember, and guide the person who is lost.” Looking at the tech trends at the time, that transition was as inevitable as it might have seemed far-fetched.
We are at a similar point now, which is why I am excited to play a part of Sight Tech Global, a virtual event Dec. 2-3 that is convening the top technologists to discuss how AI and related technologies will usher in a new era of remarkable advances for accessibility and assistive tech, in particular for people who are blind or visually impaired.
To get to the future, let me turn to the past. I was walking around the German city of Speyer in the 1990s with pioneering blind assistive tech entrepreneur Joachim Frank. Joachim took me on a flight of fancy about what he really wanted from assistive technology, as opposed to what was then possible. He quickly highlighted three stories of how advanced tech could help him as he was walking down the street with me. 

As I walk down the street, and walk by a supermarket, I do not want it to read all of the signs in the window. However, if one of the signs notes that kasseler kipchen (smoked porkchops, his favorite) are on sale, and the price is particularly good, I would like that whispered in my ear.
And then, as a young woman approaches me walking in the opposite direction, I’d like to know if she’s wearing a wedding ring.
Finally, I would like to know that someone has been following me for the last two blocks, that he is a known mugger, and that if I quicken my walking speed, go fifty meters ahead, turn right, and go another seventy meters, I will arrive at a police substation! 

Joachim blew my mind. In one short walk, he outlined a far bolder vision of what tech could do for him, without bogging down in the details. He wanted help with saving money, meeting new friends and keeping himself safe. He wanted abilities which not only equaled what people with normal vision had, but exceeded them. Above all, he wanted tools which knew him and his desires and needs. 
We are nearing the point where we can build Joachim’s dreams.  It won’t matter if the assistant whispers in your ear, or uses a direct neural implant to communicate. We will probably see both. But, the nexus of tech will move inside your head, and become a powerful instrument for equality of access. A new tech stack with perception as a service. Counter-measures to outsmart algorithmic discrimination. Tech personalization. Affordability. 
That experience will be built on an ever more application rich and readily available technology stack in the cloud. As all that gets cheaper and cheaper to access, product designers can create and experiment faster than ever. At first, it will be expensive, but not for long as adoption – probably by far more than simply disabled people – drives down price. I started my career in tech for the blind by introducing a reading machine that was a big deal because it halved the price of that technology to $5,000. Today even better OCR is a free app on any smartphone.
We could dive into more details of how we build Joachim’s dreams and meet the needs of millions of others of individuals with vision disabilities. But it will be far more interesting to explore with the world’s top experts at Sight Tech Global on Dec. 2-3 how those tech tools will become enabled In Your Head!
Registration is free and open to all. 

Accessibility’s nextgen breakthroughs will be literally in your head

Google takes aim at ‘beauty filters’ with design changes coming to Pixel phones

Google is taking aim at photo face filters and other “beautifying” techniques that mental health experts believe can warp a person’s self-confidence, particularly when they’re introduced to younger users. The company says it will now rely on expert guidance when applying design principles for photos filters used by the Android Camera app on Pixel smartphones. In the Pixel 4a, Google has already turned off face retouching by default, it says, and notes the interface will soon be updated to include what Google describes as “value-free” descriptive icons and labels for the app’s face retouching effects.
That means it won’t use language like “beauty filter” or imply, even in more subtle ways, that face retouching tools can make someone look better. These changes will also roll out to the Android Camera app in other Pixel smartphones through updates.
The changes, though perhaps unnoticed by the end user, can make a difference over time.

Google says that more than 70% of photos on Android are shot with the front-facing camera and over 24 billion photos have been labeled as “selfies” in Google Photos.

Image Credits: Google

But the images our smartphones are showing us are driving more people to be dissatisfied with their own appearance. According to the American Academy of Facial Plastic and Reconstructive Surgery, 72% of their members last year said their patients sought them out in order to improve their selfies, a 15% year-over-year increase. In addition, 80% of parents said they’re worried about filters’ impact and two-thirds of teens said they’ve been bullied over how they look in photos.

Google now has three mid-range Pixel phones

Google explains it sought the help of child and mental health experts to better understand the impact of filters on people’s well-being. It found that when people weren’t aware a photo filter had been applied, the resulting photos could negatively impact mental well-being as they quietly set a beauty standard that people would then compare themselves against over time.

Image Credits: Google

In addition, filters that use terminology like “beauty,” “beautification,” “enhancement” and “touch up” imply there’s something wrong with someone’s physical appearance that needs to be corrected. It suggests that the way they actually look is bad, Google explains. The same is true for terms like “slimming,” which imply a person’s body needs to be improved.
Google also found that even the icons used could contribute to the problem.

Google launches the $499 Pixel 4a 5G

It’s often the case that face retouching filters will use “sparkling” design elements on the icon that switches the feature on. This suggests that using the filter is making your photo better.
To address this problem, Google will update to using value-neutral language for its filters, along with new icons.

Image Credits: Google

For example, instead of labeling a face retouching option as “natural,” it will relabel it to “subtle.” And instead of sparkling icons, it instead shows an icon of the face with an editing pen to indicate which button to push to enable the feature.
Adjustment levels will also follow new guidelines, and use either numbers and symbols or simple terms like “low” and “high,” rather than those that refer to beauty.

Image Credits: Google

Google says the Camera app, too, should also make it obvious when a filter has been enabled — both in the real-time capture and afterwards. For example, an indicator at the top of the screen could inform the user when a filter has been turned on, so users know their image is being edited.
In Pixel smartphones, starting with the Pixel 4a, when you use face retouching effects, you’ll be shown more information about how each setting is being applied and what specific changes it will make to the image. For instance, if you choose the “subtle” effect, it will explain that it adjusts your skin texture, under-eye tone and eye brightness. Being transparent about the effects applied can help to demystify the sometimes subtle tweaks that face retouching filters are making to our photos.
Face retouching will also be shut off in the new Pixel devices announced on Wednesday, including the Pixel 4a 5G and Pixel 5. And the changes to labels and descriptions are coming to Pixel phones through an upcoming update, Google says, which will support Pixel 2 and later devices.

Google’s Pixel 5 gets reverse wireless charging and 5G for $699

Google takes aim at ‘beauty filters’ with design changes coming to Pixel phones

Launch Center Pro lets you build custom icons to customize your iOS 14 home screen

Launch Center Pro, an iOS utility that offered widgets and custom icons long before they were allowed on the iPhone’s home screen, is bringing its design tools to iOS 14. The app aims to capitalize on the recent trend toward home screen personalization by offering a set of over 7,000 glyphs and emoji that can be used to create custom icons for use with Apple’s Shortcuts app.
In addition, the app offers over 13 icon background styles with 15 colors each, along with other tools to build a customized experience like glyph styling and badges, for example. In total, it has the capability of producing 13 trillion possible icons using its built-in tools — and even more if you choose to use your own photos when creating your icons.

Image Credits: Contrast/Launch Center Pro

Much of the work to make this possible had already been done last year for iOS 13, says Launch Center Pro’s developer David Barnard. But iPhone home screen customization never really took off until this month, thanks to the launch of iOS 14. With the OS update, developers have finally been able to ship widgets of different sizes alongside their apps to offer a more engaging experience directly on users’ home screens.
While the original intention was focused on bringing informational updates from existing apps to the home screen, a handful of developers leveraged the new capabilities to build specialized widget design tools. These widget-making apps have allowed users to create widgets of many sorts and sizes, using a variety of colors and styles. Widgetsmith, for example, has been topping the App Store charts as users began to customize their home screens.
In addition, a number of users figured out how to use Apple’s Shortcuts to replace the icons associated with their favorite apps in order to create entirely unique, themed home screen experiences. Tutorials popped up on TikTok and the hashtag #iOS14homescreen began trending on Twitter as people shared the end results of their iPhone makeovers.
But one obstacle to redesigning the home screen was that you either needed to find a set of custom icons to use or design your own using an app like PicsArt or Photoshop, for example. And this could be challenging for those who don’t regularly work with creative tools. That’s where Launch Center Pro comes in:

@launchcenterproBuild your own custom icons for iOs 14! More tips to come! ##ios14homescreen ##ios14 ##homescreen♬ original sound – Launch Center Pro

The app offers simple tools that let you build your own icons without needing to be a design expert. Instead, you simply pick the icon shape, the color and the glyph, then optionally add a frame or badge. Apple’s Shortcuts app offers a similar set of tools, but with far fewer options.
The icons you make can then either be used with the Shortcuts app by exporting the icon to your Camera Roll or they can be used inside Launch Center Pro’s classic Today View widgets. These widgets can include not just favorite apps, but specific actions or tasks — like messaging a favorite friend, getting directions or anything else you commonly do on your phone.

Spent like an hour creating this layout using @_DavidSmith’s excellent Widgetsmith and @LaunchCenterPro for the icons. #ios14homescreen pic.twitter.com/ZL6hBKY8MZ
— Alex Crocker (@crockerbytes) September 24, 2020

Unfortunately, Launch Center Pro hasn’t yet released iOS 14-compatible home screen widgets at this time.
However, the team expects to have those ready later this fall, along with other big updates. In the meantime, the company hopes its icon designer will come in handy in these early days of iOS 14 customizations. They also plan on releasing smaller updates focused on improving the icon design experience in the weeks ahead.
Launch Center Pro is available as a free download on the App Store.

Launch Center Pro lets you build custom icons to customize your iOS 14 home screen

Unity Software has strong opening, gaining 31% after pricing above its raised range

Whoever said you can’t make money playing video games clearly hasn’t taken a look at Unity Software’s stock price.
On its first official day of trading, the company rose more than 31%, opening at $75 per share before closing the day at $68.35. Unity’s share price gains came after last night’s pricing of the company’s stock at $52 per share, well above the range of $44 to $48 which was itself an upward revision of the company’s initial target.
Games like “Pokémon GO” and “Iron Man VR” rely on the company’s software, as do untold numbers of other mobile gaming applications that use the company’s toolkit for support. The company’s customers range from small gaming publishers to large gaming giants like Electronic Arts, Niantic, Ubisoft and Tencent.

Unity’s IPO comes on the heels of other well-received debuts, including Sumo Logic, Snowflake and JFrog .
TechCrunch caught up with Unity’s CFO, Kim Jabal, after-hours today to dig in a bit on the transaction.
According to Jabal, hosting her company’s roadshow over Zoom had some advantages, as her team didn’t have to focus on tackling a single geography per day, allowing Unity to “optimize” its time based on who the company wanted to meet, instead, of say, whomever was free in Boston or Chicago on a particular Tuesday morning.

Unity IPO aims to fuel growth across gaming and beyond

Jabal’s comments aren’t the first that TechCrunch has heard regarding roadshows going well in a digital format instead of as an in-person presentation. If the old-school roadshow survives, we’ll be surprised, though private jet companies will miss the business.
Talking about the transaction itself, Jabal stressed the connection between her company’s employees, value  and their access to that same value. Unity’s IPO was unique in that existing and former employees were able to trade 15% of their vested holdings in the company on day one, excluding “current executive officers and directors,” per SEC filings.
That act does not seemed to have dampened enthusiasm for the company’s shares, and could have helped boost early float, allowing for the two sides of the supply and demand curves to more quickly meet close to the company’s real value, instead of a scarcity-driven, more artificial figure.

Bear and bull cases for Unity’s IPO

Regarding Unity’s IPO pricing, Jabal discussed what she called a “very data-driven process.” The result of that process was an IPO price that came in above its raised range, and still rose during its first day’s trading, but less than 50%. That’s about as good an outcome as you can hope for in an IPO.
One final thing for the SaaS nerds out there. Unity’s “dollar-based net expansion rate” went from very good to outstanding in 2020, or in the words of the S-1/A:
Our dollar-based net expansion rate, which measures expansion in existing customers’ revenue over a trailing 12-month period, grew from 124% as of December 31, 2018 to 133% as of December 31, 2019, and from 129% as of June 30, 2019 to 142% as of June 30, 2020, demonstrating the power of this strategy.
We had to ask. And the answer, per Jabal, was a combination of the company’s platform strength and how customers tend to use more of Unity’s services over time, which she described as growing with their customers. And the second key element was 2020’s unique dynamics that gave Unity a “tailwind” thanks to “increased usage, particularly in gaming.”
Looking at our own gaming levels in 2020 compared to 2019, that checks out.
This post closes the book on this week’s IPO class. Tired yet? Don’t be. Palantir is up next, and then Asana .

Unity Software has strong opening, gaining 31% after pricing above its raised range