What top enterprise VCs are thinking, using data effectively, ethics, Light, and Flipkart

Top VCs on the changing landscape for enterprise startups

TechCrunch had our debut confab for enterprise types this week at Yerba Buena Center in SF, where we heard from Aaron Levie, CEO of Box, Apple VP Susan Prescott of Apple, and Microsoft Azure CTO Mark Russinovich. We were sold out, which perhaps isn’t all that surprising given the amount of interest in enterprise these days. Expect more events to come.

Our Silicon Valley editor Connie Loizos hosted a panel with leading enterprise VCs, and she selected the most interesting points from that conversation and from her calls with them for Extra Crunch members. Hear a bit from Jason Green of Emergence Capital, Rebecca Lynn of Canvas Ventures and Maha Ibrahim of Canaan Partners and what they are investing in these days.

And if you want to hear even more from Jason Green and yours truly, head over to TechCrunch’s VC podcast Equity, where we shot live from Yerba Buena along with host Kate Clark with a special focus on enterprise startups.

Maha Ibrahim: I feel like people are focusing too much on metrics and not as much on [the total addressable market]. We make money [when a startup strikes on a] huge, huge market.

But there’s [also] so much correlation between consumer and enterprise startups in that we want customers that love the product. We want customers that come back and come back and come back to us, without us having to pay for them to come back. So the equivalent in a consumer company would be me having to spend advertising dollars to acquire that customer again, as opposed to that customer just coming back because he or she loves what I’m doing. The same goes for the enterprise.

How early-stage startups can use data effectively

Silicon Valley may be obsessed with using data to improve startup outcomes, but the reality is quite a bit more nuanced. Koen Bok, co-founder of interactive design tool Framer, has put together an extensive guide here on how to to use data — and when not to.

A/B tests are anti-startup

To make decisions based on data you need volume. Without volume, the data itself is not statistically significant and is basically just noise. To detect a 3% difference with 95% confidence you would need a sample size of 12,000 visitors, signups, or sales. That sample size is generally too high for most early-stage startups and forces your product development into long cycles.

While on the subject of shipping fast and iterating later, let’s talk about A/B testing. To get reliable measurements, you should only be changing one variable at a time. During the early stages of Framer, we changed our homepage in the middle of a checkout A/B test, which skewed our results. But as a startup, it was the right decision to adjust the way we marketed our product. What you’ll find is that those two factors are often incompatible. In general, constant improvements should trump tests that block quick reactionary changes.

Teaching ethics in computer science the right way with Georgia Tech’s Charles Isbell

Software is eating the world, which also means that software is getting itself involved in ever more challenging social questions. How much work should be automated by AI? How do you ensure equity in outcomes from a machine learning platform? How do you even frame these questions in the first place?

Our resident ethicist Greg Epstein talks with Charles Isbell, dean of the College of Computing at Georgia Tech, about how the school is adapting its CS curriculum for this new world, as well as how students are being taught to reason through the tough ethical situations they are likely to face.

Epstein:Since you’re going to be responsible for educating such a big percentage of Computer Science students, what do you think Computer Science degrees need to include about ethics?

Isbell:I love this question, because even the way it’s phrased tells you the problem. It treats ethics as a thing that is separate from Computer Science. And it’s difficult not to think that way, because ethics is missing, clearly.

If you’re a civil engineer, you have to be certified to build that bridge. If you aren’t certified, you can’t build a bridge. That’s considered a profession.

Computer Science is not considered a profession. There isn’t a code of [computer science] ethics the way a profession has a code of ethics, even though various groups try to create codes of ethics that say ‘you are responsible for this.’ When the bridge falls down, you’re responsible. when the plane crashes because you have a software bug you’re responsible, when the robot shoots the wrong person, none of that is built into our notion [of CS ethics].

So the reason I liked the question is, it tells you is ethics should not be taught along with Computer Science, ethics must be fundamentally integrated from the very beginning. And that’s hard.

Light Phone’s founders discuss life beyond the smartphone

Light is just what it sounds like — a lightweight feature phone without all the distractions afforded by modern smartphones. Our hardware editor Brian Heater sat down with founders Kaiwei Tang and Joe Hollier to discuss how the project came together and how the two are thinking about the future of consumer hardware.

Brian: There are a number of pain points for a product like this, which is a bit niche. When you meet with investors, what are the expectations as far as what sales are going to be initially, and how quickly you’re able to scale?

Kai: When we came to [Foxconn] with the first Light Phone, it was just a simplified, voice-only device. Right after the pitch, the sales VP said, “Hey Kai, I need Light Phone right now. Smartphones have ruined my life. My kids don’t talk to me.” And then we start talking about all the potential for such a device.

Every smartphone user can theoretically have a secondary phone, and just assuming, 1% of smartphone users that loved the idea that buy a Light Phone for themselves or for their kids, that’s probably a 20 million units a year business model.

That makes our business case. Back to four or five years ago, no one really thought about a secondary phone. So we were leading this conversation when we started.

Anti-utopian type design according to Monotype’s Charles Nix

This is a bit different from our normal fare, but thought it was quite interesting for EC readers nonetheless. Our writer Devin Coldewey sat down with Charles Nix, who is the Type Director at font foundry Monotype, to discuss Nix’s new font Ambiguity, an attempt to challenge design conventions around typography. The two discuss the state of font design, and how fonts can be a mechanism for change.

Coldewey: That’s certainly true. But on the other hand it produces these huge amounts of free and open types. Is the free fonts economy a threat to the paid font ecosystem? In 10 years are we all going to be using free fonts and Monotype is going to be bankrupt, and there’ll be a dark age of typography? Obviously not — but like the free and freemium systems in other areas, how has that changed the business model for providing fonts?

Nix: I mean, free is free, but free is also truly democratic and ubiquitous. The chief benefit of a unique visual voice via typography is sort of undermined by the idea of everyone else having the same free type basis as you. It’s not grasping at straws, given what I do for a living, it’s actually true that people do want to create a unique visual voice. And we’re an essential part of that equation.

So you can’t stop nor do I want to stop people from using free fonts. They perform a very valuable service to people who are strapped for cash or just want to communicate in frank terms. But people who really want to nuance their visual voice will seek out typefaces that speak directly to what they want to say, and they will pay money for it.

Why Walmart’s Flipkart is betting heavily on Hindi

Finally this holiday week, we have a dispatch from our India-based correspondent Manish Singh, who gets us up to speed on the latest news around Flipkart, which was acquired by Walmart last year for $16 billion. Manish interviewed the company’s executives about their new localization campaign, which includes translating the app from English into Hindi.

For Flipkart, the need to make the switch was even more urgent. About 60% to 70% of orders it currently receives on its platform come from these small cities and towns — often dubbed as India 2 and India 3, said Kalyan Krishnamurthy, the company’s group CEO.

“We spent a lot of time with people in their houses, spoke with many on the streets,” said Jeyandran Venugopal, SVP of Consumer Experience and Platform at Flipkart, in an interview with TechCrunch.

The company found that online shopping in English for these users appears to be “full of guesswork with limited understanding,” he said. “There was a lot of apprehension that these users had about what might happen when they tap a button. Because the language was English, these users were very cautious about engaging with a platform where you could spend money.”

ICYMI: Earlier this week:

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