How Raya’s $8/month dating app turned exclusivity into trust

The swipe is where the similarity ends. Raya is less like Tinder and more like a secret society. You need a member’s recommendations or a lot of friends inside to join, and you have to apply with an essay question. It costs a flat $7.99 for everyone, women and celebrities included. You show yourself off with a video slideshow set to music of your choice. And it’s for professional networking as well as dating, with parallel profiles for each.

Launched in March 2015, Raya has purposefully flown under the radar. No interviews. Little info about the founders. Not even a profile on Crunchbase’s startup index. In fact, in late 2016 it quietly acquired video messaging startup Chime, led by early Facebooker Jared Morgenstern, without anyone noticing. He’d become Raya’s first investor a year earlier. But Chime was fizzling out after raising $1.2 million. “I learned that not everyone who leaves Facebook, their next thing turns to gold,” Morgenstern laughs. So he sold it to Raya for equity and brought four of his employees to build new experiences for the app.

Now the startup’s COO, Morgenstern has agreed to give TechCrunch the deepest look yet at Raya, where the pretty, popular and powerful meet each other.

Temptation via trust

Raya COO Jared Morgenstern

“Raya is a utility for introducing you to people who can change your life. Soho House uses physical space, we’re trying to use software,” says Morgenstern, referencing the global network of members-only venues.

We’re chatting in a coffee shop in San Francisco. It’s an odd place to discuss Raya, given the company has largely shunned Silicon Valley in favor of building a less nerdy community in LA, New York, London and Paris. The exclusivity might feel discriminatory for some, even if you’re chosen based on your connections rather than your wealth or race. Though people already self-segregate based on where they go to socialize. You could argue Raya just does the same digitally.

Morgenstern refuses to tell me how much Raya has raised, how it started or anything about its founding team beyond that they’re a “Humble, focused group that prefers not to be part of the story.” But he did reveal some of the core tenets that have reportedly attracted celebrities like DJs Diplo and Skrillex, actors Elijah Wood and Amy Schumer and musicians Demi Lovato and John Mayer, plus scores of Instagram models and tattooed creative directors.

Raya’s iOS-only app isn’t a swiping game for fun and personal validation. Its interface and curated community are designed to get you from discovering someone to texting if you’re both interested to actually meeting in person as soon as possible. Like at a top-tier university or night club, there’s supposed to be an in-group sense of camaraderie that makes people more open to each other.

Then there are the rules.

“This is an intimate community with zero-tolerance for disrespect or mean-spirited behavior. Be nice to each other. Say hello like adults,” says an interstitial screen that blocks use until you confirm you understand and agree every time you open the app. That means no sleazy pick-up lines or objectifying language. You’re also not allowed to screenshot, and you’ll be chastized with a numbered and filed warning if you do.

It all makes Raya feel consequential. You’re not swiping through infinite anybodies and sorting through reams of annoying messages. People act right because they don’t want to lose access. Raya recreates the feel of dating or networking in a small town, where your reputation follows you. And that sense of trust has opened a big opportunity where competitors like Tinder or LinkedIn can’t follow.

Self-expression to first impression

Until now, Raya showed you people in your city as well as around the world — which is a bit weird since it would be hard to ever run into each other. But to achieve its mission of getting you offline to meet people in-person, it’s now letting you see nearby people on a map when GPS says they’re at hot spots like bars, dance halls and cafes. The idea is that if you both swipe right, you could skip the texting and just walk up to each other.

“I’m not sure why Tinder and the other big meeting-people apps aren’t doing this,” says Morgenstern. But the answer seems obvious. It would be creepy on a big public dating app. Even other exclusive dating apps like The League that induct people due to their resume more than their personality might feel too unsavory for a map, since having gone to an Ivy League college doesn’t mean you’re not a jerk. Hell, it might make that more likely.

But this startup is betting that its vetted, interconnected, “cool” community will be excited to pick fellow Raya members out of the crowd to see if they have a spark or business synergy.

That brings Raya closer to the Holy Grail of networking apps where you can discover who you’re compatible with in the same room without risking the crash-and-burn failed come-ons. You can filter by age and gender when browsing social connections, or by “Entertainment & Culture,” “Art & Design,” and “Business & Tech” buckets for work. And through their bio and extended slideshows of photos set to their favorite song, you get a better understanding of someone than from just a few profile pics on other apps.

Users can always report people they’ve connected with if they act sketchy, though with the new map feature I was dismayed to learn they can’t yet report people they haven’t seen or rejected in the app. That could lower the consequences for finding someone you want to meet, learning a bit about them, but then approaching without prior consent. However, Morgenstern insists, “The real risk is the density challenge.”

Finding your tribe

Raya’s map doesn’t help much if there are no other members for 100 miles. The company doesn’t restrict the app to certain cities, or schools like Facebook originally did to beat the density problem. Instead, it relies on the fact that if you’re in the middle of nowhere you probably don’t have friends on it to pull you in. Still, that makes it tough for Raya to break into new locales.

But the beauty of the business is that since all users pay $7.99 per month, it doesn’t need that many to earn plenty of money. And at less than the price of a cocktail, the subscription deters trolls without being unaffordable. Morgenstern says, “The most common reason to stop your subscription: I found somebody.” That “success = churn” equation drags on most dating apps. Since Raya has professional networking as well, though, he says some people still continue the subscription even after they find their sweetheart.

“I’m happily in a relationship and I’m excited to use maps,” Morgenstern declares. In that sense, Raya wants to expand those moments in life when you’re eager and open to meet people, like the first days of college. “At Raya we don’t think that’s something that should only happen when you’re single or when you’re 20 or when you move to a new city.”

The bottomless pits of Tinder and LinkedIn can make meeting people online feel haphazard to the point of exhaustion. We’re tribal creatures who haven’t evolved ways to deal with the decision paralysis and the anxiety caused by the paradox of choice. When there’s infinite people to choose from, we freeze up, or always wonder if the next one would have been better than the one we picked. Maybe we need Raya-like apps for all sorts of different subcultures beyond the hipsters that dominate its community, as I wrote in my 2015 piece, “Rise Of The Micro-Tinders”. But if Raya’s price and exclusivity lets people be both vulnerable and accountable, it could forge a more civil way to make a connection.

Dropbox and Box were never competitors

As Dropbox had its IPO moment this morning, more than 10 years after launching, we can finally put one myth to rest. Dropbox and Box were never targeting the same customers.

As Anshu Sharma, founder at Prekari, a stealth startup and former partner at Storm Venture tweeted earlier today:

Same goes for investors, analysts and journalists. If you don’t believe they’re different, consider that in Dropbox’s S-1 paperwork they filed with SEC, you will note they didn’t even list Box as a primary competitor: “We compete with Box on a more limited basis in the cloud storage market for deployments by large enterprises,” the company wrote.

They had something in common, of course, but Dropbox has always been about managing files in the cloud, while Box has been focused on enterprise content use case cases in the cloud — and that’s a very different approach.

As Shria Ovide pointed out in her analysis on Bloomberg after the filing, the S-1 also proved that Dropbox has always been a “a consumer software company with a side hustle.” That side hustle was the enterprise business. (She also pointed out on Twitter that they may be the first company to use a cupcake emoji in their S-1, which is actually kind of cool).

Consumer with a dash of enterprise

It turns out that vast majority of Dropbox’s combined business and consumer revenue of more than a $1 billion came from consumers.  Dropbox has always offered an attractive consumer storage tool. It’s well integrated into desktop OSs and it has a nice mobile tool.

I use it and for $10 a month I get a terabyte of storage. I can back up my life there and it incorporates neatly into Finder on my Mac. When I capture screens they go automatically to Dropbox. It provides a place to back up my photos from my phone. It’s convenient and easy and it works.

It seemed that such a tool would translate nicely to business, but Alan Pelz-Sharpe, founder and principal analyst at Deep Analysis, who has been following this space for years, says Dropbox has always primarily been confined to teams on the business side. “Dropbox is primarily a consumer company with 500 million users, [with] only about 300,000 teams using their business offering,” he told TechCrunch.

That’s not to say they aren’t trying to capture more of the enterprise. In the weeks prior to the IPO, they made a pair of announcements designed to increase their enterprise credibility including one with Google to store G Suite documents natively in Dropbox and one with Salesforce to embed Dropbox folders in Salesforce Sales and Marketing clouds.

For now though, even with this business push, Pelz-Sharpe points out that most of Dropbox’s business customers are small teams of 3 or more people with a dash of larger implementations. “Nor are people building much on top of Dropbox in the way of business applications – it remains primarily a very efficient file sharing system,” he explained.

Differences with Box

This in contrast to Box, which has been working primarily with large enterprise companies for years to solve much more complex problems around content. Aaron Levie from Box said he’s absolutely rooting for Dropbox, but they have always been going after different markets, since Box decide to go enterprise about two years into its existence.

“We are fundamentally building two very different companies. Both are large markets. While there is no limit to the scale they could become, we have built a very different business around how do you serve [large companies] and deal with unstructured company data — and it’s a very different product set [from Dropbox],” Levie told TechCrunch.

Dropbox was off to a great start today with stock soaring, up nearly 40 percent in early trading, but however Dropbox ends up doing in the days and months ahead, they will do it having made their mark mostly as a consumer company — and that’s fine. If they continue to build their enterprise business over time, it will be all the better for them, but it turns out up until now, the only thing Box and Dropbox had in common was both had “box” in their names.


Have a look at Dropbox’s debut at the TechCrunch 50 (the precursor to TechCrunch Disrupt) in 2008:

Storytelling for B2B startups: Avoiding ‘buzzword bingo’ to make your wonky enterprise company worth talking about

If there’s one thing I learned from my time as both a journalist at The Wall Street Journal and Forbes and, now, advising a global venture capital firm on communications, it’s that storytelling can make or break a company.

This is especially true the more complicated and arcane a company’s technology is. Stories about online-dating and burrito-delivery apps are easily understood by most people. But if a company specializes in making technology for hybrid-cloud data centers, or parsing specialized IT alerts and cybersecurity warnings, the storytelling task becomes much harder — but, I would argue, even more important.

Sure, a wonky company will still be able to talk easily to its customers and chat up nerdy CIOs at trade shows. But what happens when they raise a Series C or D round of financing and actually need to reach a broader audience — like really big, potential business partners, potential acquirers, public investors or high-level business reporters? Often, they’re stuck.

It can be painful to watch. When I was a reporter, I was amazed at the buzzwords thrown at me by some technology companies trying to get me to write about them. For fun, my colleagues and I would put some of these terms into online “buzzword bingo” websites just to see what indecipherable company descriptions they would spit out. (Example: “An online, cloud-based, open-source hyperconverged Kubernetes solution.”) Often, when pressed, PR representatives couldn’t explain to me what these companies actually did.

These companies obviously never made it into my stories. And I would argue that many of them suffered more broadly from their overall lack of high-profile press coverage; large business publications like the ones for which I worked target the very big-company executives and investors these later-stage startups were trying to reach.

Now, of course, I’m on the other side of that reporter/company equation — and I often feel like a big chunk of my job is working as a technology translator.

A natural-born storyteller

So why is this B2B storytelling problem so common, and arguably getting worse? Lots of reasons. Many of these hard-to-understand companies are founded by highly technical engineers for whom storytelling is (not surprisingly) not a natural skill. In many cases, their marketing departments are purely data-driven, focused on demand generation, ROI and driving prospects to an online sales funnel — not branding and high-level communications. As marketing technology has gotten more and more advanced and specialized, so have marketing departments.

As a result, many B2B and enterprise-IT companies are often laser-focused on talking about their products’ specific bells and whistles, staying in “sell mode” for a technical audience and cranking out wonky whitepapers and often-boring product press releases. They’re less adept at taking a step back to address the actual business benefits their product enables. Increasingly, this tech-talk also plays well with the legions of hyper-specialized, tech-news websites that have proliferated to serve every corner of the technology market, making some executives think there’s no need to target higher-level press.

Everyone has a story to tell. It’s up you to figure out what your company’s is, and how to tell that story in a compelling, understandable fashion.

One prominent marketing and PR consultant I know, who has worked with hundreds of Silicon Valley startups since the 1980s, says she is “shocked” by how poorly many senior tech industry CEOs today communicate their companies’ stories. Many tend to “shun” communications, considering it too “soft” in this new era of data-obsessed marketing, the consultant Jennifer Jones, recently told me. But in the end, poor communications and storytelling can create or exacerbate business problems, and often affect a company’s valuation.

So how do you get to a point where you can talk about your company in plain terms, and reach the high-level audiences you’re targeting?

One tactic, obviously, is to ditch the jargon when you need to. The pitch you use on potential customers — who likely already have an intimate understanding of your market and the specific problems you’re trying to solve — is not as relevant for other audiences.

A big fund manager at Fidelity or T. Rowe Price, or a national business journalist, probably knows, for example, that cloud computing is a big trend now, or that companies are buying more technology to battle complex cybersecurity attacks. But do they really understand the intricacies of “hybrid-cloud” data center setups? Or what a “behavioral attack detection solution” does? Probably not.

The David versus Goliath angle

Another tip is to put your company story in a larger, thematic context. People can better understand what you do if you can explain how you fit into larger technology and societal trends. These might include the rise of free, open-source software, or the growing importance of mobile computing.

It’s also helpful to talk about what you do in relation to larger, more established players. Are you nipping away at the slow-growing, legacy business of Oracle/EMC/Dell/Cisco? As a journalist, I once wrote a story about a small public networking company called F5 Networks that specialized in making “application delivery controllers.” But the story mostly focused on F5’s battle with a much larger competitor; in fact, the editors titled the story “One-Upping Cisco.” That’s the angle most readers were likely to care about. Journalists, particularly, love these David versus Goliath type stories, and national business publications are full of them.

Start focusing on high-level storytelling earlier, not when you’ve already raised $100 million in venture funding and have several hundred employees.

Another key storytelling strategy is leveraging your customers. If your business is boring to the average person, try to get one of your household-name customers to talk publicly about how they use your technology. Does your supply-chain software help L’Oréal sell more lipstick, or UPS make faster package deliveries?

One of our portfolio companies had a nice business-press hit a few years ago by talking about how their software helped HBO stream “Game of Thrones” episodes. (The service had previously crashed because too many people were trying to watch the show.) You can leverage these highly visible customers for case studies on your website. These can be great fodder for your sales team as well as later press interviews, as long as they’re well-written and understandable. Try to get more customers to agree to this type of content when you sign the contract with them.

From “Mad Men” to math men

Finally, there’s the issue of marketing leadership inside tech companies. In my experience, most smaller, B2B or enterprise IT-focused startups have CMOs or VPs of marketing who are more focused on data and analytics than brand communications — more “math men” than “Mad Men.” This isn’t surprising, as these companies often sell data-rich products and have business models where PR and general advertising don’t directly drive sales (unlike, say, a company making a food-delivery app). The CEOs of these companies value data and analytics, too.

I encourage B2B tech CEOs to focus on hiring CMOs with some brand/communications experience, or at least a willingness to outsource it to competent partners who are experts in that area. After a couple of early rounds of funding, you should be outgrowing your highly specialized PR firm (if you even have one) that focuses on a narrow brand of trade publications, for example. These firms usually don’t have contacts at the bigger, national business and technology outlets that are read by big mutual fund managers, and the business development folks at Cisco or Oracle. Hiring ex-journalists — not technical experts — to write content and develop messaging can be a good idea, too.

In other words, start focusing on high-level storytelling earlier, not when you’ve already raised $100 million in venture funding and have several hundred employees. By that point, it can simply be too late: Your company has already been typecast by the trade press and written off by higher-level reporters, and sometimes even potential business partners, as too niche-y and hard to understand.

As a journalist, I learned that everyone has a story to tell. It’s up you to figure out what your company’s is, and how to tell that story in a compelling, understandable fashion. If you do, I’m pretty sure the business benefits will follow.

Lawyaw uses AI to help lawyers draft documents faster

It’s no secret that much of the legal industry is build on reusable content. Most law firms have their own customized set of standard documents (like NDAs or Wills), but lawyers or associates still have to customize these documents by hand each time a client needs them drafted.

Lawyaw, part of YC’s Winter ’18 class, is building software to automate this process by letting lawyers turn previously completed documents into smart templates.

Here’s how it works: Lawyers can drag an already customized world document into Lawyaw’s platform and it will automatically use natural language processing to first figure out what sections need to be replaced, then actually fill in those sections with the correct personalized phrases and variables. For example, software will automatically detect and replace a client’s name, contact information, location, and even more complicated things like scope of engagement.

If a variable isn’t automatically detected Lawyaw lets users manually select it, which the software will remember for future uses. Currently the platform only identifies about 50% of all variables in a document (up from 10% when it launched), but of those detected the accuracy rate for autofilling correct information is 99%. So essentially the algorithm is optimizing for quality over quantity right now, but that should equalize as the natural language processing gets better over time.

Of course Lawyaw isn’t the only solution for automatically populating legal documents. But most other solutions use complex document customization that requires knowledge of conditionals, tags and syntax. Plus, the platform has a few other useful features like integrated e-signing and a directory of over 5,000 standard court forms that can be customized.

Lawyaw charges each user $59 per month or $39 if paid annually. Interested users can just sign ups themselves instead of having to be subjected to firm-wide demos or annoying sales reps, both of which are still the status quo for legal software.

So far over 1,000 law firms have signed up, with 900 lawyers actively drafting over 24,000 total documents to date.

American Express quietly acquired UK fintech startup Cake for $13.3M

Cake Technologies, the U.K. fintech startup that wanted to make it more convenient to pay your restaurant or bar bill, has been acquired by American Express — as the credit card behemoth plans to beef up its payment options for Amex members.

According to sources the deal quietly completed in October last year for a final price of $13.3 million (approx. £10.1m). However, due to an eleventh-hour preferential debt round and after fees, only some shareholders made a profit. I also understand from one source that Cake had raised a total of £4.5 million in equity and £1.4 million in debt. Part of the equity funding was a £1 million crowdfunding round on Crowdcube in 2015.

Confirming the acquisition, American Express gave TechCrunch the following statement:

Last year American Express acquired Cake Technologies. This year, we will be on-boarding Cake and their technologies to collaborate on ways to provide our Card Members with enhanced service and value in the dining space, which is an area many of our Card Members are passionate about.

A spokesperson for American Express declined to comment on the exact financial terms of the deal, but said that it was a “good outcome for Cake employees, previous investors and American Express”. They did confirm, however, that Cake employees are now employees of American Express.

This includes Cake founders Charlotte Kohlmann and Michelle Songy, who hold the positions of Vice President Global Dining Platform Solutions at American Express, and Director Global Platform Dining Solutions at American Express, respectively.

“We are excited to have Cake on board with us and look forward to collaborating on bringing our Card Members exciting new capabilities in the dining space soon,” adds the American Express spokesperson.

The back story to Cake’s eventual exit makes for interesting reading. According to a source with knowledge of the startup’s path to a sale, who spoke to TechCrunch on the condition of anonymity, it was very close to raising a £5 million Series A in the fall of 2016 before the company’s founders walked away for “ethical reasons,” although the source declined to diverge what these were. This then left Cake in a precarious situation financially as the company could not find another VC to step in quickly enough before running out of cash.

In the holidays/early 2017, the board of Cake put together a rescue round that was structured in the form of debt and designed to give the startup more runway to try to achieve a trade sale. All existing shareholders were given the chance to participate on a pro rata basis, although some declined due to the substantial risk of doubling down.

The loan was also structured so that, should the company get acquired, these eleventh hour investors would get a multiple preferential return. This, I’m told, explains why some investors made money from the exit, while others, including some Crowdcube backers, lost money, even possibly after factoring in EIS tax breaks.

In May 2017, American Express first made an offer to acquire Cake. The startup passed due diligence in late June, but American Express pulled the deal in mid-July for unknown reasons. Determined to get the sale back on track, Cake co-founder Kohlmann flew to New York unannounced and the deal eventually closed in October.

“Despite the complications and lengthy process, Amex did a really good deal here,” says my source. “It is clear that Cake is now a very important part of their digital strategy and the purchase price looks like good value in that context. Cake’s user experience will be a benefit to users of the Amex app once fully integrated and Cake’s basket level POS integrations will give Amex better insight into exactly what products their customers are buying rather than just where they go and how much they spend”.

Y Combinator’s Jessica Livingston on Dropbox IPO: “It was just a dream of ours”

Dropbox, after more than a decade, finally went public this morning — and the stock soared more than 40% in its initial trading, making it a marquee success for one of the original Web 2.0 companies (at least for now).

While we still have to wait for the dust to settle, it’s been a very long road for Dropbox. From starting off as a file-sharing service, to hitting a $10 billion valuation in the middle of a massive hype cycle, to expectations dropping and then the announcement of a $1 billion revenue run rate. Dropbox has been a rollercoaster, but it’s another big moment this afternoon: it’s Y Combinator’s first big IPO. And Y Combinator still has a very deep bench of startups that are, thus far, obvious IPO candidates down the line like Airbnb and Stripe.

That isn’t to take away anything from the work of CEO Drew Houston and the rest of Dropbox’s team, but Y Combinator’s job is to basically take a bunch of shots in the dark based on good ideas and potentially savvy founders. Houston was one of the first of a firm that now takes in a hundred-odd founders per class. Y Combinator Founder and partner Jessica Livingston was there for the start of it, recalling back to the day that Houston rushed to her and Paul Graham to show him his little side project.

We caught up with Livingston this morning ahead of the IPO for a short interview. Here’s the conversation, which was lightly edited for clarity:

TC: Can you tell us a little bit about what it’s like to finally see the first Y Combinator company to go public?

JL: I feel like 13 years ago, it was just this dream of ours. It was this seemingly unattainable dream that goes, ‘maybe one of the startups we fund could go public someday.’ That was the holy grail. It’s an exciting day for Y Combinator. It shows what a long game investing is in early-stage startups. I do feel kind of validated.

TC: How did Y Combinator first end up in touch with Houston?

JL: He applied as a solo founder. We had met Drew the summer before. Back then, we were so small that we always encouraged people to bring friends to a Y Combinator dinner. [Xobni founder Adam Smith] brought [Houston], and we met him then and talked it through. When he applied, we invited him to come to an interview, and Paul [Graham] before the interview reached out to [Houston]. He said, “I see you’re a solo founder, and you should find a cofounder.” Three weeks later Drew showed up with [co-founder Arash Ferdowsi]. It was a great match that worked well.

TC: As Dropbox has grown, what’s stood out to you the most during changes in the market?

JL: They’re a classic example of founders who are programmers who built something to solve their own problem. Clearly, this is a perfect example of that. Drew gets on the bus, he forgets his files, and he can’t work on the whole trip down. He then creates something that will allow him to access files from everywhere. At the time, when he came on the scene with that, there were a lot of companies doing it but none were very good. I feel like Dropbox, regardless of market dynamics, from the very beginning was always dedicated to wanting to do well by building a better solution. They wanted to build one that actually works. I feel like they’ve stuck to that and that’s been driving them since. That’s been their guidepost.

TC: What was your first meeting with Houston like, and do you think he has changed in the past 10 years?

JL: When I first met him, he was young — he was very young — and he was always a good hacker, and very earnest. During Y Combinator he was very focused on building this product and was not distracted by other things. That’s when there were just two people. He’s really evolved over the years as an incredible leader. He’s grown this company and he’s navigated through all different parts of his life cycle. I’ve witnessed his growth as a leader and as a human being. He’s always been a great person. It’s sort of exciting to see where he is now that he’s come a long way, it’s really cool.

TC: Houston and Ferdowsi still own significant portions of the company even after raising a lot of venture capital. Do you think Y Combinator had any effect on companies looking for more founder friendly deals?

JL: I think when Y Combinator started, our goal in many ways was to empower founders. It was to level the playing field. You don’t have to have a connection in Silicon Valley to get funding. You just have to apply on our website. You don’t have to have gone to an Ivy League school. We [try to tell them], don’t let investors take advantage of you because you’re young and have never done this before. In general, times have changed over the past 15 years. Hopefully Y Combinator played a small role in some of those changes in making things a little more found friendly.

TC: What’s one of your favorite stories about Houston?

JL: He was always very calm, cool, and collected under pressure. I remember that was definitely a quality about him. His feathers didn’t get ruffled easily. One of the things I remember most clearly is from that summer when we had demo day. Back then it was, like, 40 people tops. Still, there was a lot of pressure. I remember Paul [Graham] came up with this idea that, ‘hey, Drew, during your demo day you should show people how well Dropbox actually works by deleting your presentation live and restoring it through Dropbox.’ That’s kind of risky, right? To delete your presentation. You’re just standing up there without anything. And he did it and he nailed the presentation. It sounds a little gimmicky, but it really worked and showed his product worked. I remember thinking, like, wow, he’s pretty calm. If it were me I don’t think I could hit the delete button in front of these people. That’s an important quality in someone, not to get flustered.

By the way, we funded them in 2007. If you asked me in 2008 how were they doing, I would say, well, they’re making progress. But it wasn’t like we funded them and we could say, ‘this is gonna be a great one.’ We just knew, yeah they’re making progress, but it’s always hard to know there.

TC: Back then, what were you just expecting? M&A? Did you even anticipate an IPO?

JL:  As we were formulating the idea, the hope was rather than going to work at Microsoft — I use them as an example because that was the company back then — and rather than going to get a job out of college, why not build a company and make Microsoft acquire you to get you to work for them? We had low expectations back then. We were hoping there’d be some small acquisitions. But yes, the hope was always acquisitions, but maybe someday in our wildest dreams there’d be an IPO. We didn’t even think YC would work when we started, people didn’t believe in YC’s models for many years.

TC: Looking back, what would you say is one of the biggest things you’ve learned throughout this experience?

JL: What a long road it is for startups. When we started YC back then, it wasn’t a popular thing to do a startup. Now, thank goodness, more people are starting them, and more types of people are starting them. It’s not just super high-tech companies. That’s exciting, but what I think a lot of people don’t realize is how hard startups are. You say, yeah, I know how hard, but people don’t realize how difficult they are and how long the commitment is. If you’re successful, it takes such a long time. For [someone like Houston] to make it to that point, they’ve committed a lot of their life and energy and all their intellectual capacity to making this work. To me, that’s so exciting, but I think it would surprise people to know realistically how long that could take.

TC: What would you tell startups with the hindsight of what happened with Dropbox’s valuation hype cycle?

JL: I will say, with startups, sometimes you just have to stick to what you’re doing. There’s a lot of stuff going on around you, especially now with social media and things like that. With a startup, you just have to keep moving forward with building a company and building a great product.

Researchers find a new material for quantum computing

Rumors of commercial quantum computing systems have been coming hot and heavy these past few years but there are still a number of issues to work out in the technology. For example, researchers at the Moscow Institute Of Physics And Technology have begun using silicon carbine to create a system to release single photons in ambient i.e. room temperature conditions. To maintain security quantum computers need to output quantum bits – essentially single photons. This currently requires a supercooled material that proves to be unworkable in the real world. From the release:

Photons — the quanta of light — are the best carriers for quantum bits. It is important to emphasize that only single photons can be used, otherwise an eavesdropper might intercept one of the transmitted photons and thus get a copy of the message. The principle of single-photon generation is quite simple: An excited quantum system can relax into the ground state by emitting exactly one photon. From an engineering standpoint, one needs a real-world physical system that reliably generates single photons under ambient conditions. However, such a system is not easy to find. For example, quantum dots could be a good option, but they only work well when cooled below -200 degrees Celsius, while the newly emerged two-dimensional materials, such as graphene, are simply unable to generate single-photons at a high repetition rate under electrical excitation.

Researchers used silicon carbide in early LEDs and has been used to create electroluminescent electronics in the past. This new system will allow manufacturers to place silicon carbide emitters right on the quantum computer chips, a massive improvement over the complex systems used today.

“Using their theory, the researchers have shown how a single-photon emitting diode based on silicon carbide can be improved to emit up to several billion photons per second. That is exactly what one needs to implement quantum cryptography protocols at data transfer rates on the order of 1 Gbps,” the researchers write. “Silicon carbide-based single-photon sources are compatible with the CMOS technology, which is a standard for manufacturing electronic integrated circuits. This makes silicon carbide by far the most promising material for building practical ultrawide-bandwidth unconditionally secure data communication lines.”

There is no timeline for commercialization of the technology but given the interest in quantum computing we can expect these little chips to shoot out single photons sometime soon.

HBO’s Silicon Valley gets the VR treatment for Season 5

For a long time, we’ve heard that VR is three to five years from becoming mainstream. While that premise remains questionable, HBO’s Silicon Valley is celebrating its fifth season with the launch of a VR experience called Silicon Valley: Inside the Hacker Hostel.

The experience will be available on the HTC Vive, and will offer users more than 700 interactive experiences, from playing foosball to taking bong rips.

The Silicon Valley VR experience takes place inside the same house where the cast has lived and worked to build a successful company for the past five years, and it all looks eerily similar to the set we’ve seen on the show, from the sloppy kitchen to the bunkbeds in the bedroom.

But it’s not just a bunch of wandering around. Silicon Valley: Inside the Hacker Hostel also includes challenges from Dinesh and Gilfoyle, as well as the opportunity to help Richard with a coding conundrum. And no Silicon Valley experience is complete without Jared, who will have a secret message that users need to track down.

The attention to detail is comes down to the fact that Rewind, the developers of the experience, took 360-degree video of the show’s real set, and worked with set blueprints, according to Fast Company.