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People

This VC firm will invest up to $100K in students who want to take a gap year to build a company

Contrary Capital plans to back five teams of students who would rather use a year to start a company than take remote classes.

Eric Tarcyznski, founder of Contrary Capital.

"We do believe pretty deeply in universities, but primarily when they are in person," says Eric Tarcyznski, founder of Contrary Capital.

Photo: Courtesy of Eric Tarcyznski

The coronavirus pandemic has made returning to the classroom less appealing to many students. Contrary Capital founder Eric Tarczynski sees that as an opportunity.

"Perhaps obviously, paying $50,000 to take classes online is just not appealing to anyone," Tarczynski said. Students headed to elite schools such as Harvard seem particularly troubled by the situation. Instead, Tarczynski's venture firm is making a different offer: It will invest up to $100,000 in exchange for a small slice of ownership in startups created by five different students (or student teams) who are willing to take a gap year to build a company.

The idea of a gap year isn't new. Neither is the idea of investors paying kids to drop out of college: Peter Thiel has been doing it for years. But Contrary's experiment is a bet on the pandemic being a good time for students to start companies — and on there being more of an interest in leaving college, on a temporary basis, to do it.

It's an interesting move for a firm like Contrary, which has been traditionally cozy with colleges. Part accelerator, part venture firm, Contrary's business has been to scout college campuses for the next generation of entrepreneurs and give them support and access to Silicon Valley funding networks. Now, the gap year experiment is encouraging founders to take a year away from school.

"We do believe pretty deeply in universities, but primarily when they are in person," Tarczynski said.

It's also a different approach than the Thiel Fellowship, which offers the money as a grant and pays students to drop out of college entirely to pursue their company. But the precedent the Thiel fellowship has set is an inspiring one to Tarczynski. Billion-dollar startups like Oyo Rooms and Figma were born out of Thiel Fellowships, and Ethereum's co-creator, Vitalik Buterin, was also a Fellow.

For Contrary's program, groups have to commit to working on the project full time, but otherwise the firm is open to backing entrepreneurs at any education stage, from undergraduates to doctorates. Contrary is also open to backing immigrant founders, especially since some international students may be sent home if schools don't have in-person classes. The hope is to help college students looking for an alternative path during the time of coronavirus to be able to focus on a company without the distractions of school for a year.

"We pretty strongly believed that the limiting factor for young people when it comes to company creation is just bandwidth," Tarczynski said.

Paying founders to take a year off is an easy way to clear their plates.

People

Beeper built the universal messaging app the world needed

It's an app for all your social apps. And part of an entirely new way to think about chat.

Beeper is an app for all your messaging apps, including the hard-to-access ones.

Image: Beeper

Eric Migicovsky likes to tinker. And the former CEO of Pebble — he's now a partner at Y Combinator — knows a thing or two about messaging. "You remember on the Pebble," he asked me, "how we had this microphone, and on Android you could reply to all kinds of messages?" Migicovsky liked that feature, and he especially liked that it didn't care which app you used. Android-using Pebble wearers could speak their replies to texts, Messenger chats, almost any notification that popped up.

That kind of universal, non-siloed approach to messaging appealed to Migicovsky, and it didn't really exist anywhere else. "Remember Trillian from back in the day?" he asked, somewhat wistfully. "Or Adium?" They were the gold-standard of universal messaging apps; users could log in to their AIM, MSN, GChat and Yahoo accounts, and chat with everyone in one place.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Protocol | Enterprise

Why Oracle and SAP are fighting over startups

Did someone mention a chance to burnish reputations and juice balance sheets?

New cloud-based offerings and favorable contract terms are convincing startups to switch to software from Oracle and SAP earlier in their lives than your might expect.
Jane Seidel

In the hunt for their next big-ticket customers, SAP and Oracle are trying to cast off reputations as stodgy tech providers by making a huge push to provide their software to startups.

Both companies have found themselves in choppy waters recently as potential customers have turned to the cloud, shunning the on-premises solutions SAP and Oracle are known for. That's coupled with a global pandemic that dried up demand for the expensive enterprise-grade software that drives profits at the vendors.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Is this a VC bubble, or just the new normal?

Huge deals, little diligence and hyper-fast follow-on rounds have become commonplace. For now.

Things are looking awful frothy, aren't they?

Photo: Drew Beamer/Unsplash

The VC industry is "frothy," "overheated" or "bonkers," investors say. Whether this is the new normal or unhealthy signs of an overheated market depends on your point of view — and how well your portfolio is doing.

There are signs that VC has changed all around. In recent months, deal sizes and valuations have spiked in hot deals; due diligence on startups has evaporated as investors compete to get into hot deals first; venture firms are investing much more than they normally do; there are hyper-fast follow-on rounds; and more non-traditional investors are backing early-stage startups.

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Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

COVID-19 bruised TripActions’ business. It chose to innovate.

If nobody's booking business flights through your startup, why not help people pay for their corporate takeout instead?

TripActions had to confront a world with far less travel.

Photo: TripActions

TripActions was a fast-growing startup that helped clients manage their business travel when the pandemic hit early last year. Now, almost a year later, it's also helping businesses with their work-from-home expenses.

Chief financial officer Thomas Tuchscherer compared what happened last spring to being in a speeding car that was forced off a cliff — a terrifying experience shared by most travel industry companies hit hard by the COVID-19 crisis.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

Politics

In 2020, COVID-19 derailed the privacy debate

From biometric monitoring to unregulated contact tracing, the crisis opened up new privacy vulnerabilities that regulators did little to address.

Albert Fox Cahn, executive director of the Surveillance Technology Oversight Project, says the COVID-19 pandemic has become a "cash grab" for surveillance tech companies.

Photo: Lianhao Qu/Unsplash

As the coronavirus began its inexorable spread across the United States last spring, Adam Schwartz, senior staff attorney at the Electronic Frontier Foundation, worried the virus would bring with it another scourge: mass surveillance.

"A lot of really bad ideas were being advanced here in the U.S. and a lot of really bad ideas were being actually implemented in foreign countries," Schwartz said.

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Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
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