Monat: September 2016

Two Unicorns Go To War In Business Software

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Josh Reeves, the 33-year-old CEO of the payroll and benefits startup Gusto, is an Eagle Scout with a sweet smile and a sensible haircut. He speaks softly, blushes easily, and gently reminds guests to remove their shoes before entering the office.

But last week, at a press briefing in a private dining room of an upscale San Francisco lunch spot, Reeves slung mud at Zenefits, his most prominent — and most prominently troubled — rival. He had just been telling the reporters about Gusto's new product, a Zenefits-like human resources software system. With Zenefits expected to unveil its own product upgrade next month — dubbed Z2 — Reeves seemed keen to ensure his rival&039;s past missteps wouldn&039;t be forgotten.

“Z2 sounds like a sequel,” Reeves said. “Ideally the first movie is good enough on its own.”

“There are no shortcuts. There&039;s always a poster child for that,” he added, in a not-so-subtle dig at Zenefits&039; past failures to comply with insurance broker licensing rules. “Things like compliance have to be there from the beginning.”

“We&039;ve been thrilled by the customers moving to us from Zenefits,” Reeves continued. The burger he had ordered remained untouched.

The beef between Gusto and Zenefits — which fired its founding CEO and lost hundreds of employees earlier this year in the wake of its broker licensing scandal — stretches back about a year. That&039;s when BuzzFeed News reported that Zenefits, known for making human resources software and selling health insurance, was secretly developing a payroll processing system, stepping directly onto the turf of its onetime partner Gusto, then known as Zenpayroll.

Zenefits&039; effort had the tongue-in-cheek nickname “Project Nutshot.”

Sergei Supinsky / AFP / Getty Images

Gusto — which at that time was itself quietly moving onto Zenefits&039; turf by preparing to sell health insurance — has now fired back in force. On Tuesday it announced it has created an “all-in-one” human resources software system, including features to help small companies onboard new employees and manage 401(k)s. The effort is a direct challenge to Zenefits, which has long offered similar features but has lately been busy patching things up with regulators and customers.

Told of Reeves&039;s comments, Zenefits spokesperson Jessica Hoffman picked up the gauntlet.

“It&039;s great to hear that our competitors are already in a panic about Z2,” Hoffman said in an email to BuzzFeed News. “They&039;re still trying to copy version one of our product while we are about to launch version two, which will redefine this industry.”

“The fact that they&039;re talking so much about Zenefits indicates who the market leader is,” Hoffman added.

Silicon Valley startups aren&039;t often willing to spar like this in public (they&039;re usually more comfortable criticizing giant incumbents in their industry, as Zenefits did last year in a legal fight with ADP). That Gusto and Zenefits would publicly trade blows underscores their yearning to capture potential riches in the business of HR and payroll management. Both startups are trying to bring technology to an antiquated, paperwork-heavy industry that can cause real headaches for small businesses. Zenefits moved early in offering a software-powered HR system, but it moved too quickly, and now Gusto is trying to seize an advantage.

At the media briefing last week — held at celebrity chef Tyler Florence&039;s Wayfare Tavern, where spiced deviled eggs seem as plentiful as tap water — Gusto staff handed out embargoed press releases with details on the startup&039;s progress and plans. Over 40,000 small businesses use Gusto&039;s payroll software, according to the release and an email from a spokesperson. (Zenefits, by comparison, says it has more than 20,000 customers using its HR software.) The new Gusto HR product will include a “welcome wall” where coworkers can warmly greet a new employee, according to the release. An executive at a healthcare company was quoted saying he was “confident that everything is done right with Gusto.”

Many details seemed intended to highlight how Gusto was different than Zenefits, though the release never mentioned its rival by name. Reeves, however, was less coy. After introducing the subject of Zenefits by saying he wanted to discuss the “ecosystem,” Reeves said he had heard “horror stories” from companies that had used Zenefits and switched to Gusto.

Borrowing a line that Zenefits once used, Reeves said he was “excited to be the fastest-growing company in this space, as far as I can tell,” by number of customers. (Still, Gusto has been in payroll processing for most its existence, while Zenefits has been in the slightly different business of insurance and HR management.)

Reeves also said he was “excited to be doubling our valuation in our last financing round, while others are halving their valuation.”

Gusto, which launched in 2012, was valued by investors at $1 billion in a financing round in December, doubling its valuation in under a year. Zenefits, launched in 2013, agreed in June to cut its valuation in half — to $2 billion from $4.5 billion — in a deal with its investors.

Zenefits&039; new CEO, David Sacks, has undertaken a sweeping effort to remake the company, including by taking a contrite tone and forging a string of settlements with state regulators. In May Sacks announced he had changed the company&039;s stated values: “Everyone’s shit stinks,” for example, became “Put the customer first.”

Reeves, as his burger got cold, had something to say about company values, too.

“You don&039;t really change them,” he said. “You have to know them from the beginning.”

Sacks, as it happens, invested in Gusto in its seed round several years ago. Reeves said at the briefing that Sacks — an experienced entrepreneur who sold his software startup Yammer to Microsoft for just over $1 billion — currently has no access to Gusto&039;s confidential information. The two spoke in 2012, when Reeves got advice from Sacks on building a business, and haven&039;t spoken since, Reeves said.

Quelle: <a href="Two Unicorns Go To War In Business Software“>BuzzFeed

These Ex-Googlers Want To Test You (And Your Family) For Cancer

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DNA-testing startup Color Genomics, which launched in spring 2015, is notable in the biotech world because of its emphasis on the “tech” side: Two of its cofounders are former Google and Twitter engineers. Another way it&#039;s setting itself apart from the competition: Its costs. Color prices its cancer gene tests at a fraction of the cost of many tests on the market in an attempt to make them accessible and affordable — and in turn to broaden its data pool.

San Francisco Bay Area–based Color now has plans to make its tests even more widely available. Currently, its $249 saliva-based test scans 30 genes to detect an individual&039;s risk of common hereditary cancers, including breast, ovarian, colon, pancreatic, prostate, uterine, colorectal, and stomach cancer; in contrast, other tests range from $1,500 to $4,500. Color&039;s test is cheap enough that many people could pay for it out of pocket, instead of going through insurers, who traditionally shoulder the bulk of the cost for genetic tests.

Now, the startup is teaming up with the BRCA Foundation and private donors to offer the tests at an even steeper discount — $50 — to first-degree relatives of people who have already tested positive for one of the 30 mutations on Color&039;s test. Parents, siblings, and adult children are then eligible to also take a Color test. A relative of someone with a BRCA mutation, for example, has a 50% chance of having the mutation, too, which can lead to breast or ovarian cancer. Color has partnered with private donors and the BRCA Foundation to subsidize the screening program.

Unlike DNA-testing startup 23andMe, whose tests can be bought without the approval of a medical professional, doctors and genetic counselors are involved in interpreting and reviewing the results of Color&039;s “spit kits.” Already, the tests are being used in a $14 million study in which the University of California is aiming to put 100,000 women through personalized breast cancer screening. Color customers can choose to contribute their anonymized data to research, or not.

To support its growth more broadly, Color also said it&039;s raised $45 million from General Catalyst, U2 frontman Bono, Khosla Ventures, 8VC, Laurene Powell Jobs&039; Emerson Collective, and Susan Wagner, a BlackRock cofounder. Wagner is also joining its board of directors, along with General Catalyst managing director Hermant Taneja. To date, the startup has raised $60 million in total.

Color is up against several other hereditary cancer-testing companies, including both startups and established heavyweights, such as Myriad Genetics, Invitae, and Counsyl. The company says it keeps costs low by employing advanced software and machine learning technologies to be more efficient — from highly automating the analysis of DNA samples, to automatically creating family trees for the Color genetic counselors who explain results to customers.

“We’re viewing what we’re doing as biology 2.0,” CEO and cofounder Elad Gil told BuzzFeed News. That tech mindset comes from Gil&039;s years as a former vice president for corporate strategy at Twitter, as well as a product manager at Google. Another cofounder, Othman Laraki, also worked at Google and was vice president of product at Twitter. (The two came to Twitter after founding Mixer Labs, which made geolocational software, and selling it to the social networking company in 2009.) But Gil also has a PhD in biology from the Massachusetts Institute of Technology, and chief scientific officer Taylor Sittler trained in clinical pathology at UC San Francisco.

Referring to the idea of tailoring therapies to individuals&039; unique backgrounds and risk factors, Gil said, “The thing we ask ourselves every day is, &039;How can we help facilitate things so precision medicine will be available to everybody next year or in two years?&039;”

Quelle: <a href="These Ex-Googlers Want To Test You (And Your Family) For Cancer“>BuzzFeed