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Cloudflare co-founder Michelle Zatlyn on the company’s IPO today, its unique dual class structure, and what’s next – TechCrunch

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Shares of Cloudflare rose 20% today in its first day of trading on the public market, opening trading at $18 after it priced its IPO at $15 a share yesterday and holding steady through the day.

Put another way, the performance of the nine-year-old company — which provides cloud-based network services to enterprises — was relatively undramatic as these things go. That’s a good thing, given that first-day “pops” often signal that a company has left money on the table. Indeed, Cloudflare had initially indicated that its shares would be priced between $10 and $12, before adjusting the price upward, which suggests its underwriters, led by Goldman Sachs, fairly accurately gauged demand for the offering.

Of course, it was still a very big day for Cloudlfare’s 1,069 employees and especially for Cloudflare’s founders Matthew Prince, its CEO, and Michelle Zatlyn, its COO. We talked with Zatlyn today in the hours after the duo rang the opening bell to ask about the experience, and how the IPO impacts the company going forward. Our chat has been edited lightly for length and clarity.

TC: Thanks for making time for us on a busy day.

MZ: Of course! [TechCrunch’s] Battlefield [competition, in which Cloudflare competed in 2011] is such an integral part of our funding story. Thank you for giving us the stage to launch our company.

TC: Did you get any sleep last night?

MZ: I was so exhausted that I got a great night’s sleep. This whole process has been so incredible, so special. I didn’t know what to expect, and it’s been way better than I could have imagined. There are 150 of our teammates, early employees, family members, board members, champions and other friends here with us [in New York at the NYSE]. We also live-streamed [our debut] to our offices around the world so they could share this moment with us.

TC: How are you feeling about today? The stock is up 20%. There’s always banter afterward about whether a listing was priced right, whether any money was left on the table.

MZ: At this point, we’ve raised almost a billion dollars between today and all of the money we’ve raised from venture investors. We have a great team. We’re really happy. The markets are going to react how they react, but it’s part of our DNA to provide more value than we capture. We think that’s the way to build an enduring company.

TC: You have a liquid currency now. Do you imagine Cloudflare might become more acquisitive as a public company?

MZ: We’ve done some acquisitions on the smaller side and of course, we have a team that’s always looking at different opportunities. But we’re really engineering-driven, and we think we have many products and services left to build, so we’ll continue to invest in our products and in R&D development, as well as in our customer relationships.

TC: Retaining employees is a challenge that some newly public companies worry about. How will you address this in the coming days and months as lock-up periods expire?

MZ: I’m so proud of where we are today and of our whole team, and we’re just getting started. [Matthew and I will] show up Monday morning and get back to work and so will our employees, because they want to make the company [an even greater business].

TC: The company went public with a dual-class structure that gives not just management but all employees 10 times the voting rights of the shares sold to the public. Why was this structure important to Cloudflare, and did it give investors pause?

MZ: There are more than 1,000 people around the world who are building the product and working with customers, and we think it’s important for them to have that 10:1 structure, so it’s something we put in place a few years ago with the encouragement of some of our earlier investors.

TC: Were you modeling this after another company? Is there a precedent for it?

MZ: I don’t know of another one — there may be — but we weren’t inspired by another company. We just felt passionately about this being the right corporate structure and [I don’t think it was harder for us to tell the story of Cloudflare because of it]. Over the last two weeks, in talking with investors across the world, it wasn’t in the top 10 topics that came up, so I think we did a good job of describing it in our S-1.

TC: What was the roadshow like? What surprised you most?

MZ: Don’t get me wrong, there’s a ton of work involved from all kinds of people, in finance, our legal teams … But roadshows have a bad rap in that people think they’re grueling and that, by the end, you’ll be exhausted. That was my expectation. But it was really fun. It was a huge privilege to represent Cloudflare to all these investors who were incredibly smart and well-prepared. We traveled all over and people told us ‘You look better than most teams.’

TC: Where does one go for these roadshows?

MZ: You have the usual suspects; there’s a travel roadshow circuit, with some variations based on people’s vacation schedules, but New York, San Francisco, Boston, Chicago, Baltimore is common, Kansas City, Indianapolis, Toronto. You go in person to some places and in others, people dial in. But the whole thing gave me new insight into these pools of capital after venture capital. It was really interesting.

TC: Cloudflare said in a recent amendment to its S-1 that it was in touch with the U.S. Treasury’s Office of Foreign Assets Control back in May after determining that its products were used by individuals and entities that have been blacklisted by the U.S. Did this new revelation slow anything down?

MZ: There was no impact. Your group of advisors expands when you go through a public offering, and lawyers dot every ‘i’ and cross every ‘t,’ and you become a better company for it.

We deliver cybersecurity solutions that are made broadly available to businesses, entrepreneurs and nonprofits, and that’s incredible, but there are also some unsavory actors online, and we’ve always been a transparent organization [about having to grapple with this].

TC: How will Cloudflare handle requests for service by embargoed and restricted entities going forward? As a public company, does that process change in any way?

MZ: We have a really good process today. I think people think that we let anyone use Cloudflare and that’s it. But if customers are breaking the law, we remove them from our network and that’s not new and we publish transparency reports on it.

Sometimes, [you’re confronting] things that aren’t illegal but they’re gross, and the question is whose job is it to take it offline. But I work with some of the smartest minds on this and we try to be very transparent about how we figure this out. The conversation is so much better than it was a few years ago, too, with policy makers and academics and the business community engaging on this. People around the world are talking about where the lines can be drawn, but these are tricky, heady conversations.

TC: They certainly put Cloudflare in a precarious spot sometimes, as when the company banned the internet forum 8chan earlier this year after it was learned that the site was used by a gunman to post an anti-immigration rant. Can we expect that Cloudflare will continue to make decisions like this on a case-by-case basis?

MZ: Freedom of speech is such a fundamental part of this nation. Citizens should want the lawmakers to decide what the law should be, and if lawmakers could do this, it would be much better. On the other side, these are new issues that are arising so we shouldn’t rush. Lots of opinions need to be weighed and conversations are much further along than they once were, but there’s still work to be done, and Cloudflare is one [participant] in a much broader conversation.



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IKEA and Sonos’ picture frame speaker has one big problem

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Sonos and IKEA have returned with another surprisingly affordable speaker, but the SYMFONISK Picture Frame hides its music in plain sight. In the process it has added a new element of design to the partnership though, as excited as I am for more attainable connected speakers, I can’t help but feel that neither company has quite closed the loop on this third product.

I’m a big fan of Sonos and IKEA’s original SYMFONISK range, particularly the bookshelf speaker. At $99 it’s the most affordable speaker you can buy which will integrate with Sonos, and that opens up the door to expanding a Sonos system into rooms and spaces you might not otherwise have been able to justify. Home offices and kids bedrooms are good examples, but the affordable speaker also serves well as components for a rear surround sound system too.

Even when it launched the bookshelf and table lamp speakers, IKEA and Sonos weren’t coy in promising more from the SYMFONISK series. It was to be a long-term collaboration, the two companies insisted, leveraging the mass-market design chops of one with the tech-savvy of the other. We had to wait, of course, almost two years to see the third product arrive.

I’ll confess, I’m left scratching my head a little at the new SYMFONISK Picture Frame. Announced yesterday, it takes Sonos into a whole new form-factor compared to what the company is familiar with.

Sonos speakers aren’t exactly attention-grabbing, and Sonos Architectural installations can be positively surreptitious. However the new speaker for IKEA goes one step further, effectively hiding the audio side of things even as the SYMFONISK sits on the wall. Only the power cable really gives things away.

Speaker companies have tried flat speakers before, but never quite like this. IKEA’s contribution is, in no small part, the price tag. Yes, at $199 the picture frame is the most expensive of the SYMFONISK line-up so far, but it’s a far, far cry from the super-premium flat speakers we’ve seen attempted in the past. At 2.36-inches deep it’s not quite as slender as them, either, but I suspect the cost/thickness balance will be far more acceptable in terms of people opening their wallets.

What I struggle with, though, is the idea of it being a picture frame at all. More specifically, the fact that right now there’s no way to actually use your own art in there.

IKEA has designed it so that the picture pops out and can be replaced. The frame – in either black or white – is super-slim, to the point that you don’t really see it around the edge of the picture insert, but it means that you’ll be able to swap the default image for something new. That is, assuming IKEA has a design you like.

The two standard art pieces are the handiwork of European artist Jennifer Idrizi. They’re apparently inspired by visualizations of music and inter-connections, the result being an abstract interplay of lines that are more like a topographical network map than anything else. Neither is unpleasant, and you could easily picture them on the wall of a fancy apartment building’s show-suite.

At the same time, though, they’re hardly striking in an art sense. IKEA will have a couple of other designs, following on in August, and the retailer says that more versions will follow – and vary by geographic location – in due course. Much like the furniture company’s regular range evolves with the seasons, so too will SYMFONISK art, it seems.

What I’d really like, though, is the ability to put my own pictures in there instead. I doubt I’m alone in that. I suspect the challenge is that IKEA isn’t using paper or canvas for its art, instead relying on some sort of mesh that’s still acoustically transparent despite also showing Idrizi’s handiwork.

For now, Sonos tells me, there’s no provision for custom art for the SYMFONISK Picture Frame. That could change in the future, of course, and I really hope it does. The ability to upload a picture and have it reproduced on a speaker-compatible mesh seems like the sort of home decor idea people would love, and the Sonos audio side of that would be the gravy on top.

Honestly, I’m not sure SYMFONISK is going in the direction I – and others – expected it to. Sonos and IKEA’s plan to democratize music and design looked, initially, like a value play: the value that IKEA is already known for with so much of its range. However instead we’ve seen the attainable design side be emphasized, a reminder that part of IKEA’s charm has long been that it works with individual designers on products that are not only distinctive to look at but can be cost-effective to manufacture and ship at scale.

That’s arguably a far more exciting approach to the home audio category, and one I hope we don’t have to wait another two years to see the next installment in. More immediately, though, my fingers are crossed that Sonos and IKEA join up the dots on this new SYMFONISK offering, because while art is nice, art with personal meaning can be truly uplifting.

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Here’s what the first Google Store is like on the inside

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The first Google Store is almost open, and if you can’t make it to New York City to check out the new brick & mortar shop, a virtual walk-around is the next best thing. Google announced earlier in the year that it would be opening its first physical location for device sales, and now it has opened its doors in Chelsea, NYC.

At first, it seems like a fairly odd decision given the events of the past 18 months. Online shopping has soared in popularity, as the COVID-19 pandemic and social distancing have kept people at home and online.

Still, Google argues that it does make sense. “This new space will be a natural extension of our commitment to NYC and provide customers with hands-on interaction with our lineup of devices and services — from Pixel phones and Nest products to Fitbit wearables and Pixelbooks,” Ivy Ross, VP of hardware design, UX & research, and Nathan Allen, head of store design & special projects, insist. Part of that is a recognition that Google’s device range is now considerable, and that can be overwhelming to new users.

As a result, the new Google Store takes a more hands-on, exploratory approach. Google worked with NYC-based architect Reddymade, even building a full-scale mockup in Mountain View, CA, where it could play with the layout and figure out how to best demo both hardware – like Pixel and Nest – and software.

The end result isn’t just a retail location, but a way for Google to showcase some of the other elements which have become increasingly important in product design. That includes sustainability: both for the devices on sale, and for the store itself. The building is certified LEED Platinum by the US Green Building Council, for example, around sustainable choices for construction and materials.

“Every element of the Google Store — the materials, building processes, mechanical systems and more — was painstakingly considered and selected,” Ross and Allen explain. “For example, the veneer on the walls is a soft gray responsibly sourced hickory, each lighting fixture is energy efficient and our custom cork and wood furniture was created with a local craftsman from Greenpoint, Brooklyn. We even attached our carpeting (which was manufactured with recycled materials) in a sustainable way.”

Of course, that still left room for some more playful elements. The most conspicuous is the “Google Imagination Space”: a 17 foot tall circular glass structure filled with huge touchscreens that can be used to show off immersive demos. That’ll begin with Google Translate, which will do real-time translation across 24 different languages as visitors speak.

There’ll be specially-trained staff to give advice and do demos, and an opportunity to see all of the different color options of each product. Gamers will be able to try out Google Stadia, too, in a specially set-up game hall.

The Google Store is open from tomorrow, June 17, from 10am ET.

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Honor 50 series launches with Google good news

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Honor has revealed its Honor 50 smartphones and, more importantly, that Google’s apps and services will be supported on the new handsets. The announcement today – which confirmed availability and pricing for the Honor 50 and Honor 50 Pro in China – came with the news that the former Huawei subsidiary has achieved its big goal in spinning out.

Honor began as Huawei’s focused brand on younger users, borrowing technology from its corporate parent but packaging it into a more affordable line-up. However when Huawei was placed on the US government’s entity list, blocking it from doing business with American firms, it left Honor also out of the loop for accessing Google apps and services.

That’s proved to be disastrous for Huawei, with its smartphone sales slumping dramatically. Honor, meanwhile, was spun out into its own, standalone business late last year. That allowed it to begin inking the deals with companies that Huawei simply wasn’t allowed to.

The fruits of that freedom will be the Honor 50 series, the company confirmed today. “Honor devices will undergo Google’s Play Protect certified security review and compatibility testing process to ensure they are ready to run apps from Google and the Google Play Store,” the company told SlashGear in a statement. “Honor devices will therefore have the option to have Google Mobile Services (“GMS”) preinstalled on compatible devices, in accordance with Google’s licensing and governance models. Consumers will be able to experience HONOR smartphones and tablets equipped with GMS.”

It’ll include both smartphones and tablets from Honor, beyond just the new Honor 50. “Going forward all the phones that we will launch in global markets will have GMS,” a spokesperson told us.

It’s a big deal for Honor, and its ambitions to be a player in global markets. Without the Google deal it’s been unable to include apps like Gmail, Google Maps, and YouTube on its phones. Equally important, it hasn’t been able to load the Google Play Store either, meaning buyers of Honor devices have been cut off from Google’s official app download store.

For the Honor 50 series specifically, the company plans to put the phones up for preorder in China on June 16. Broader availability – including the UK, France, Mexico, Malaysia, Russia, and Saudi Arabia – will follow later in the year, though no further details have been shared at this stage.

The Honor 50 Pro is, unsurprisingly, the more interesting of the two. It has a 6.72-inch 120Hz display, and is powered by Qualcomm’s Snapdragon 778G chipset. On the back are two circular camera clusters, with a 100-megapixel main sensor, an 8-megapixel ultra-wide, a 2-megapixel depth camera, and a 2-megapixel depth camera. On the front there’s a pair of cameras for selfies: a 32-megapixel regular sensor, and a 12-megapixel ultra-wide.

For the Honor 50, the chipset is the same, as are the rear cameras. However the screen is a 6.57-inch 120Hz panel, and the selfie camera loses out on the dedicated ultra-wide. The Honor 50 Pro has a 4,000 mAh battery with up to 100W fast-charging, while the Honor 50 has a slightly larger 4,300 mAh battery but only 66W fast charging.

The Honor 50 will be priced at RMB 2699 ($422), and the Honor 50 Pro at RMB 3699 ($578).

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