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When you look at fourth quarter worldwide PC sales data from Canalys, IDC and Gartner, it’s fair to say that the news was not great with all three firms seeing precipitous declines from 2021 highs.

In fact, the numbers plunged for the fourth consecutive quarter with sales falling 28% according to IDC, 28.5% according to Gartner and 29% according to Canalys. These numbers include laptops and desktop computers running Windows, MacOS or Chrome operating systems.

The yearly totals told a similar story with all three firms coming in at around -16% decline year-over-year. But IDC analyst Ryan Reith pointed out, it may not be as gloomy as those numbers suggest because it was coming off a stellar 2021.

“2021 was near historic levels for PC shipments, so any comparison is going to be distorted. There’s no question when we look back at this time that the rise and fall of the PC market will be one for the record books, but plenty of opportunity still lies ahead,” Reith said in a statement.

In terms of units shipped for the fourth quarter, Gartner reported 65.3 million units with Canalys coming in at 65.4 million units and IDC at 67.2 million units.

There were no real winners in Q4 with not a single manufacturer in positive territory. The best you could hope for was minimal losses, and in most cases all three firms reported double digit losses across the board.

Apple had the least red ink on all three reports with Gartner reporting -10.1%, Canalys reporting a -7.5% growth rate compared to last year with IDC coming in at a more modest -2.1%. The news only got worse from there.

Among the top 3 PC manufacturers, Dell was the biggest loser on all three reports with all three reporting a loss of approximately 37%. After that, it was HP with -29% and Lenovo with about -28%. Those are big declines, regardless of the reason.

The Q4 numbers are particularly troublesome because the holidays usually represent a time when sales increase, and manufacturers made a big effort to boost sales with price cuts, but to no avail. Gartner reported it was the biggest drop they had seen for one quarter since it began tracking these numbers in the mid-1990s.

What does this all mean for the coming year? In general, in spite of the uncertain economic outlook, analysts are cautiously optimistic that we will begin to see an upswing later in the year, or by the beginning of 2024 at the latest.

“​​Once businesses and consumers ride out the storm, we expect delayed purchases to begin boosting the market in late 2023, with momentum picking up in 2024,” Canalys analyst Ishan Dutt said in a statement.

That is in line with IDC’s thinking as well, which is predicting a rebound in 2024 with some pockets of recovery in the coming year, while Gartner analyst Mikako Kitagawa is predicting the malaise could continue until the beginning of 2024.

While the market has taken a hit this year, it’s important to understand these numbers in context, and it appears that in spite of the precipitous drops in year-over-year percentages, when compared with the numbers prior to the lockdown in 2020, the outlook is somewhat more positive.

PC sales slip for fourth straight quarter in Q4 as demand remains muted by Ron Miller originally published on TechCrunch

This was the CES of putting things on my face. I spent time with the Magic Leap 2, Meta Quest Pro, Vive XR Elite and PSVR2 over the course of a few days. All of those products fit in the same bucket, more or less. And then there’s the Dyson Zone, a product that, quite frankly, doesn’t fit in any bucket, per se.

There are a few potential reasons for this:

It could be a brilliant product no one had thought of yet.
People thought of the brilliant product, but had neither the wherewithal, follow-through or vision to execute on it.
People thought of it and ultimately thought better of it.

There’s a greater than zero chance you, too, had a visceral reaction when the product was announced. And perhaps like me, you thought to yourself, good or bad, I absolutely have to try the thing. I won’t say I tried it so you don’t have to. There’s a decent chance you still want to put it on your face — but probably not to the tune of $1,000.

The company walked us through some of the early iterations of the product design, fitted to a row of mannequin heads aligned on a desk in the hotel suite. One thing I feel comfortable saying: Dyson has vision. Another thing: They’ve made some really quality (but pricey) products over the years. I have a Dyson vacuum. It’s the best vacuum I’ve ever owned by some order of magnitude — a rare splurge for me and one I never regretted.

Moving air is Dyson’s whole deal. If its products don’t suck, they blow (though one could argue that they all technically do both). The Zone, in a word, blows. It’s a product that addresses a very real problem: pollution in urban environments. There’s a big difference in addressing the symptoms as opposed to the underlying causes of human-made pollution, but both serve a purpose. A U.K.-based company, Dyson points to the London’s Central line — a notoriously polluted Underground line — as a prime example of when and where the Zone is meant to be used.

We spent much of the meeting talking headphones. That was a bit of a surprise. Let’s be honest, no one is focused on the headphones here. The market is flooded with them. It takes something truly out of left field to turn heads in consumer electronics this days, and the mask happily fits the bill there. Part of me wondered whether the amount of time devoted to audio engineering was a way of justifying the thought process that went into such an admittedly strange project.

Interestingly, the company pointed out that, much like the mask’s airflow, the six or so years of work that went into the headphones is rooted in existing Dyson technology. Here that specifically relates tothe method for reducing the noise of airflow. After all, a high-powered hand dryer, say, has different expectations around dB levels than something designed to be strapped to your face. Over-ear headphones make sense here from a noise reduction, as well as form factor, standpoint. I likely don’t need to tell you this, but noise cancellation works best when the active form is combined with the passive. That means utilizing both the onboard microphones to actively cancel it and the headphone earbuds to passively/physically block out ambient noise.

The Zone’s noise canceling is decent — somewhere between the best and worst I’ve tried. I feel comfortable being a bit less wildly broad if we end up spending more time with it. This trial was a rare time you can suggest that a company got “lucky” in booking an expensive Vegas hotel suite with an extremely loud HVAC system directly outside the window. Nice view of the Paris Las Vegas’ half-scale fake Eiffel Tower, too.

The Zones blocked out some of that noise, though the higher frequencies still managed to get through fairly easily. If I had to venture a guess, I’d say the thing is tuned to specifically cancel out the face mask noise. I was, however, genuinely impressed with the sound quality. I’d suspected the headphones might be something of an afterthought, but, then, Dyson is not one to half-ass things. They’re a good-looking, good-sounding pair of headphones, and Dyson could do well to sell them on their own (though, the fact that the actual filtration happens in the earcups is admittedly a bit silly of a thing to have without the mask).

The mask itself is a soft strip that snaps onto the headphones with magnets but doesn’t come into direct contact with your face. The air flow is a nice, pleasant breeze over your mouth. There are some thoughtful features included. For one, tipping the mask down or detaching it will switch from noise canceling to transparency mode (you can reenable it with a tap on the side of the ear cups).

The Dyson Zone is certainly weird and unquestionably silly. It’s also quite unique. The fact that it can’t purport to effectively filter out viruses certainly felt like a missed opportunity when it was first announced early in the pandemic. There is an attachment that works with N95 masks, but the Zone itself isn’t going to protect you from COVID.

I don’t see a scenario where I’d actually wear one of these things around, but I’m also not mad that something so wonderfully weird exists in the world.

I put Dyson’s Bane mask on my face by Brian Heater originally published on TechCrunch

The continuing onslaught of tech layoffshas not let up in the new year. Last week, we saw big layoff announcements from Amazon and Salesforce with thousands of employees being let go. Yesterday CRN reported that Cloud Software Group was undertaking massive layoffs. Today the company confirmed it was laying off 15% of the workforce.

Although the company would not share just how many people were involved, it appears to be in the thousands.

Cloud Software Group was formed last year after PE firms Vista Equity Partners and Evergreen Coast Capital (an affiliate of Elliott Investment Management) took Citrix private in a $16.5 billion deal, the third biggest enterprise M&A deal of last year. At the time, the firms indicated they would be combining Citrix with Tibco, another enterprise firm that Vista had purchased previously.

In a post published today from CEO Tom Krause, who was put in charge when the combined company was formed, he confirmed that layoffs had indeed happened. “Yesterday, we notified roughly 15% of the total Cloud Software Group workforce that their roles have been eliminated or made redundant as part of our planning process for the new company,” he said, not pulling any punches.

Krause wrote that layoffs are among the toughest decisions any executive has to make, and he acknowledged the pain that comes with these moves. “Please know that these decisions were not taken lightly. Rather, they were practical business decisions designed to strengthen the combined companies,” he wrote.

When Vista and Elliott announced that they were acquiring Citrix for such a hefty amount, and combining the two companies, it seemed likely that cost-cutting would follow. At the time Constellation Research analyst Holger Mueller expected as much when he told TechCrunch:

“The combo has a lot of assets to play with on the tech side, especially with Citrix’s virtualization and the future of work. But it will be all about execution, and we will see in a few months if Vista and Elliott are undertaking a go-forward and growth strategy, or if they will save costs and ‘milk’ the install base. The high price tag will make the latter strategy hard to lay off, but perhaps with some asset sales, it could work well,” Mueller said.

It’s worth noting that Krause said that in addition to eliminating duplicate positions across the two companies, it would be looking at top customers and aligning the product roadmap to meet those customers, so it seems it’s looking at the installed base that Mueller alluded to.

But each of those jobs, redundant or not from a business perspective, was held by an individual who is out of work today, and they join the thousands of other tech workers who have been laid off in recent months. If there is any silver lining to be found here, multiple reports have stated over the last several months that laid off tech workers are quickly finding work.

Company created by Citrix-Tibco merger confirms it has laid off 15% of staff by Ron Miller originally published on TechCrunch

In the heat of 2021’s record-setting venture market, you couldn’t avoid the growing noise from the burgeoning web3 sector. Trust me, I tried. But while some of that momentum carried into 2022 (Yuga Labs closed a $450 million seed round in March), the rest of the year was relatively quiet.

Yes, venture as a whole had a quieter year overall in 2022, but the lack of web3 deals stood out particularly because the sector entered the year with so much momentum. Maybe the dramatic meltdowns of token Luna and the second-largest crypto exchange FTX scared investors off web3 as a whole? Did the rapid decline of consumer interest in NFTs spur VCs to rethink the category? We decided to find out.

To get a better idea of how the people writing the checks are thinking about web3, TechCrunch surveyed more than 35 investors, and it turns out the majority are not only actively investing in the category, they also harbor hopes of a shining future for what they feel is a potentially transformative technology.

One VC, who asked to remain anonymous, said that because the technology is so nascent, we aren’t seeing the true potential use cases yet, which could explain the lack of continued excitement after 2021’s rally.

“Those who understand the space know there’s a lucrative future that’s still in its earliest days,” they said. “Those who don’t understand the space also know that but will be more hesitant to deploy without a fundamental grasp of the real-world applications. Almost none of the purported benefits of web3 (decentralization, pseudonymous identities, zero-knowledge proofs, etc.) have been realized in full yet. It’s like the era of the [early World Wide Web], when every web page was simple HTML with ridiculous graphics and archaic capabilities.”

When it comes to web3, investors say they’re in it for the long haul by Rebecca Szkutak originally published on TechCrunch

Twitter is considering selling usernames as a way to boost revenue, according to a new report from the New York Times. The report comes as the social network’s owner, Elon Musk, has been looking for ways to generate revenue for the company.

The report says engineers at the company have considered organizing online auctions where people can bid for usernames, also known as handles. The potential new revenue stream has been discussed since at least December. It’s unknown if the idea will come to fruition, and if it does, it’s unclear if the plan will affect all usernames or only some of them.

Last month, Musk said in a tweet that Twitter would soon start freeing up 1.5 billion usernames, noting that inactive accounts would be deleted. After acquiring the social network in October, Musk signaled in tweet reply that he was interested in freeing up accounts with desired usernames.

The social network did not respond to TechCrunch’s request for comment.

Twitter’s username squatting policy does not allow the buying and selling of usernames. Despite this rule, people have been able to buy coveted Twitter usernames on the black market for years. The practice of selling desirable usernames has also attracted hackers in the past. In 2020, a teenager was arrested after hacking the social network and obtaining high profile usernames to sell them. The hacker compromised the accounts of numerous public figures, including Musk, former President Barak Obama, Bill Gates and more.

The new report comes as popular messaging app Telegram announced in October that will it hold an auction for usernames, for both individual accounts and channels, through a marketplace built on top of the TON blockchain.

Since Musk’s $44 billion takeover of Twitter, the billionaire has been trying to find ways to boost the company’s revenue amid a downturn in ad revenue. Reports suggest that since the start of Musk’s Twitter ownership, many advertisers left the platformand the company has been cutting down its internal revenue projections.

The company has made some changes over the past few months to boost revenue. Earlier this month, the company said it plans to lift its ban on political ads in the “coming weeks.” In November, the social network introduced a revamped Twitter Blue subscription that costs $7.99 and comes with a verified blue checkmark.

Twitter is considering selling usernames through online auctions, new report claims by Aisha Malik originally published on TechCrunch

Since its debut in November, ChatGPT has become the internet’s new favorite plaything. The AI-driven natural language processing tool rapidly amassed more than one million users, who have used the web-based chatbot for everything from generating wedding speeches and hip-hop lyrics to crafting academic essays and writing computer code.

Not only have ChatGPT’s human-like abilities taken the internet by storm, it has also set a number of industries on edge: a New York school banned ChatGPT over fears that students it could be used to cheat, copywriters have already been replaced, and reports claim Google is so alarmed by ChatGPT’s capabilities that it issued a “code red”to ensure the survival of the company’s search business.

It appears the cybersecurity industry, a community that has long been skeptical about the potential implications of modern AI, is also taking notice, amid concerns that ChatGPT could be abused by hackers with limited resources and zero technical knowledge.

Just weeks after ChatGPT debuted, Israeli cybersecurity company Check Point demonstrated how the web-based chatbot, when used in tandem with OpenAI’s code-writing system Codex, could create a phishing email capable of carrying a malicious payload. Check Point threat intelligence group manager Sergey Shykevich told TechCrunch that he believes use cases like this illustrate that ChatGPT has the “potential to significantly alter the cyber threat landscape,” adding that it represents “another step forward in the dangerous evolution of increasingly sophisticated and effective cyber capabilities.”

TechCrunch, too, was able to generate a legitimate-looking phishing email using the chatbot. When we first asked ChatGPT to craft a phishing email, the chatbot denied the request. “​​I am not programmed to create or promote malicious or harmful content,” a prompt spat back. But rewriting the request slightly allowed us to easily bypass the software’s built-in guardrails.

Many of the security experts TechCrunch spoke to believe that ChatGPT’s ability to write legitimate-sounding phishing emails — the top attack vector for ransomware — will see the chatbot widely embraced by cybercriminals, particularly those that are not native English speakers.

Chester Wisniewski, a principal research scientist at Sophos, said it’s easy to see ChatGPT being abused for “all sorts of social engineering attacks” where the perpetrators want to appear to write in a more convincing American English.

“At a basic level, I have been able to write some great phishing lures with it, and I expect it could be utilized to have more realistic interactive conversations for business email compromise and even attacks over Facebook Messenger, WhatsApp, or other chat apps,” Wisniewski told TechCrunch.

The idea that a chatbot could write convincing text and realistic interactions isn’t so farfetched. “For example, you can instruct ChatGPT to pretend to be a GP surgery, and it will generate life-like text in seconds,” Hanah Darley, who heads threat research at Darktrace, told TechCrunch. “It’s not hard to imagine how threat actors might use this as a force multiplier.”

Check Point also recently sounded the alarm over the chatbot’s apparent ability to help cybercriminals write malicious code. The researchers say they witnessed at least three instances where hackers with no technical skills boasted how they had leveraged ChatGPT’s AI smarts for malicious purposes. One hacker on a dark web forum showcased code written by ChatGPT that allegedly stole files of interest, compressed them, and sent them across the web. Another user posted a Python script, which they claimed was the first script they had ever created. Check Point noted that while the code seemed benign, it could “easily be modified to encrypt someone’s machine completely without any user interaction.” The same forum user previously sold access to hacked company servers and stolen data, Check Point said.

How difficult could it be?

Dr. Suleyman Ozarslan, a security researcher and the co-founder of Picus Security, recently demonstrated to TechCrunch how ChatGPT was used to write a World Cup-themed phishing lure and write macOS-targeting ransomware code. Ozarslan asked the chatbot to write code for Swift, the programming language used for developing apps for Apple devices, which could find Microsoft Office documents on a MacBook and send them over an encrypted connection to a web server, before encrypting the Office documents on the MacBook.

“I have no doubts that ChatGPT and other tools like this will democratize cybercrime,” said Ozarslan. “It’s bad enough that ransomware code is already available for people to buy ‘off-the-shelf’ on the dark web, now virtually anyone can create it themselves.”

Unsurprisingly, news of ChatGPT’s ability to write malicious code furrowed brows across the industry. It’s also also seen some experts move to debunk concerns that an AI chatbot could turn wannabe-hackers into full-fledged cybercriminals. In a post on Mastodon, independent security researcher The Grugq mocked Check Point’s claims that ChatGPT will “super charge cyber criminals who suck at coding.”

“They have to register domains and maintain infrastructure. They need to update websites with new content and test that software which barely works continues to barely work on a slightly different platform. They need to monitor their infrastructure for health, and check what is happening in the news to make sure their campaign isn’t in an article about ‘top 5 most embarrassing phishing phails’,” said The Grugq. “Actually getting malware and using it is a small part of the shit work that goes into being a bottom feeder cyber criminal.”

Some believe that ChatGPT’s ability to write malicious code comes with an upshot.

“Defenders can use ChatGPT to generate code to simulate adversaries or even automate tasks to make work easier. It has already been used for a variety of impressive tasks, including personalized education, drafting newspaper articles, and writing computer code,” said Laura Kankaala, F-Secure’s threat intelligence lead. “However, it should be noted that it can be dangerous to fully trust the output of text and code generated by ChatGPT — the code it generates could have security issues or vulnerabilities. The text generated could also have outright factual errors,” added Kankaala, laying doubt to the reliability of code generated by ChatGPT.

ESET’s Jake Moore said as the technology evolves, “if ChatGPT learns enough from its input, it may soon be able to analyze potential attacks on the fly and create positive suggestions to enhance security.”

It’s not just the security professionals who are conflicted on what role ChatGPT will play in the future of cybersecurity. We were also curious to see what ChatGPT had to say for itself when we posed the question to the chatbot.

“It’s difficult to predict exactly how ChatGPT or any other technology will be used in the future, as it depends on how it is implemented and the intentions of those who use it,” the chatbot replied. “Ultimately, the impact of ChatGPT on cybersecurity will depend on how it is used. It is important to be aware of the potential risks and to take appropriate steps to mitigate them.”

Is ChatGPT a cybersecurity threat? by Carly Page originally published on TechCrunch

Last week, TechCrunch reported that Black founders in the United States raised 1% of the $215.9 billion in venture capital allocated last year. That is not to be confused with the 1.3% raised in 2021, the 0.8% they pulled in 2020, the 1% they got in 2019, or the 1.1% raised in both 2018 and 2017, according to Crunchbase data.

In case it’s not obvious why these figures are so dreadful, it’s worth noting that Black Americans make up more than 13% of the population.

Each time these numbers are published, there are always a few people posing the same question: Where do we go from here? Is the next step looking at alternative funding, or is it staying on the battleground, always ready to fight?

Brandon Brooks, a founding partner at Overlooked Ventures, said this is the time to get creative with funding and pointed toward Small Business Development Centers and grant programs as a way to get by.

James Oliver, the co-founder of the app Kabila, cosigned that, saying it’s time for Black founders to be scrappier than ever to get funding. “Period,” he told TechCrunch.

Oliver, who is based in Atlanta, is leveraging relationships to raise a pre-seed and angel round by tapping into local resources, such as the Atlanta Tech Village, and is also raising “founder rounds,” in which other founders invest in his company.

“It generally sucks being a Black founder fundraising right now,” he continued, adding that he once had an investor who funded early-stage companies pass on his idea because he didn’t have a built product. (Typically, these investors back ideas, not products.) “When your back is against the wall, that is when you find out what you’re made of. Leverage your relationships, give first to others, which unlocks giving to you, and let’s get scrappy, y’all.”

Funding for Black founders remains dismal — where do we go from here? by Dominic-Madori Davis originally published on TechCrunch

Carta, an equity management platform that was last privately valued at $7.4 billion, has cut 10% of its staff, confirming earlier rumors that a workforce reduction was in the works. Using LinkedIn data, the layoff could have impacted around 200 employees.

Today’s layoff is around the same size as its 2020 workforce reduction, an event that CEO Henry Ward then partially attributed to a decline in new customers given the coronavirus’ impact on business. Years later, Ward is striking the same tone.

In an e-mail sent to staff today, obtained by TechCrunch, the CEO said that “if our customers suffer, so do we. And right now the entire tech and venture ecosystem is suffering.” The company claims that it cut costs in travel, vendor spend, marketing spend and investments in new bets, but that it ultimately had to reduce headcount.

Severance packages include 2.5 months of severance with one additional week of severance per completed year of service, and extended mental healthcare services. For those who rely on Carta for a visa, a 30-minute consultation with immigration counsel. Those that were not impacted by the layoff have the option to voluntarily resign, with the option of a severance package.

As TechCrunch reported earlier today, Carta is suing its former CTO, Jerry Talton, who was fired “for cause” almost three weeks ago, on December 23, according to the company. In Carta’s lawsuit, the company references Talton’s “wrongful and illegal acts as an executive of Carta” including discrimination and the sexual harassment of at least nine women, according to a Carta spokesperson.

It doesn’t help that several users of Carta’s services, which range from cap table management to fund administration, have been less than impressed by the platform in the recent months. TechCrunch spoke to a fund manager, transitioning away from the platform, who claims that his team had four different account managers in a less than two-year contract, which “certainly didn’t help with continuity and understanding of our fund and needs.”

According to Crunchbase data, Carta has raised $1.1 billion venture capital investors, including most recently a $500 million Series G by Silver Lake. Other investors in Carta include Andreessen Horowitz and Lightspeed Venture Partners.

Significant venture backing, as this down market reminds us time and time again, isn’t necessarily a competitive advantage. Carta, embroiled in former lawsuits and now taking on a current challenge, has thus perhaps unsurprisingly attracted a wide swath of competition in recent years.

Its closest competitor, AngelList Venture, has raised dramatically less capital, around $200 million. When TechCrunch asked AngelList Venture CEO Avlok Kohli about recent product changes that put it square in competition with Carta, he shrugged – adding that he has nothing new to add. “Ultimately, there’s going to be a small number of folks who actually have the ability to build a calculated product,” Kohli said in a previous interview. “When I say ability, I don’t mean technical abilities, but the institutional knowledge to build something.”

The difficulty of building a company in the venture services landscape was only further proved by the recent shutdown of Assure, a fintech company that helped investors issue special-purpose vehicles. According to Axios, Assure didn’t give investors any reasoning behind its shut down beyond the following statement: “The industry has evolved considerably over the decade since we founded our company. Current market conditions have resulted in Assure evaluating its business model.”

Let’s see if the industry’s evolution, both with more competition and graveyard companies, is a dynamic that Carta can keep up with.

Carta lays off 10% as CTO lawsuit looms by Natasha Mascarenhas originally published on TechCrunch

British newspaper The Guardian has confirmed that cybercriminals accessed the personal details of U.K. staff members during a ransomware attack last month.

The Guardian confirmed the data breach in an update emailed to staff on Wednesday, which the newspaper reported shortly after. The email, signed by the news outlet’s chief executive Anna Bateson and editor-in-chief Katharine Viner, told employees that the cyberattack involved “unauthorised third-party access to parts of our network,” and was likely triggered by a phishing attempt, but did not elaborate further.

Phishing is a common tactic employed by attackers and has been blamed for recent data breaches at Twilio, DoorDash and Bed Bath & Beyond.

The Guardian warned U.K. staff that attackers had accessed their sensitive personal information. The newspaper has approximately 1,500 employees around the globe — with 90% in the United Kingdom.

A spokesperson for The Guardian told TechCrunch that it confirmed “all U.K. staff are affected” by the breach, and data accessed “may include human resources data collected as part of everyone’s employment at The Guardian.” The spokesperson confirmed that employee names, addresses, national insurance numbers, government identity documents and salary details were compromised, as first reported byThe Record.

The company added that it had no reason to believe the personal data of readers and subscribers had been accessed, nor does it believe that hackers accessed the personal data of staff in the U.S. or Australia.

But there remain several unknowns about the cyberattack, such as who was responsible, and if The Guardian paid a ransom demand.

The Guardian first confirmed that it had been hit by a ransomware attack on December 21. At the time, staff were told to work from home until at least January 23 as the organization battled with “behind the scenes” disruption. The newspaper said that while it expects some critical systems to be back up and running “within the next two weeks,” a return to office working by U.K. staff has been postponed until early February.

The Guardian confirms ransomware attack stole employee data by Carly Page originally published on TechCrunch

For the foreseeable future, global markets will require billions of highly specialized electric machines that perform much better than the inefficient relics of the past.

Initially, we approached this as a hardware challenge until we determined that the key to meeting next-generation electric motor demand actually lies in software. That’s why we’ve pivoted to a SaaS model.

Like any major startup redirect, there were several “a-ha!” realizations, accompanied by trials to make it all work. Fortunately, the SaaS direction has delivered upsides: we’ve achieved relatively strong product-market fit and cash flow-positive status without big VC raises or burn rates.

The process wasn’t precisely linear, but (looking back) we did four core things to conclude SaaS was our model:

Assessed what was truly disruptive, scalable and profitable about our technology;
Engaged our board and investors candidly;
Studied global markets and tech trends;
Took our MVP to market quickly, opting to polish in public rather than perfect in private.

ECM PCB Stator Technology was founded on the innovation of MIT-trained electrical and software engineer Dr. Steven Shaw, our chief scientist. After launch, we began developing proprietary printed circuit board stators that replace bulky copper windings — the central component in electric motors — and using in-house software to make them lighter, faster and more efficient machines.

Two years later, I joined as a growth-stage CEO after leading two energy technology companies to scale and acquisition. At that point, we were still at a relatively early stage in funding and product-market fit. The startup had raised a venture round and was flirting with becoming an axial flux electric motor manufacturing company. The initial impetus for a SaaS shift came when I began to assess the company with fresh eyes and engage Steve and the board on our inherent advantages and path to profitability.

At that point, we also pulled in some new investors.

On a macro level, we conferred to determine our competitive advantages and addressable market. An early observation was that there were already several large, established players making off-the-shelf electric motors. An assessment of global trends (e.g., mass electrification, automation, reducing carbon emissions) also revealed that the need and requirements for next-generation electric machines were rapidly shifting.

After plenty of analysis and a number of board meetings, this appraisal emerged: The global marketplace will require more efficient, better performing, and custom designed electric motors that can be produced in the hundreds of millions in a more sustainable way.

With that in mind, I turned to Steve and our board to evaluate the best business model. We concluded that the most competitive aspect was the ability to leverage printed circuit boards via “motor CAD” software to create bespoke electric motor designs that require less raw material and outperform legacy offerings.

Then we addressed a critical question: how can we take this technology to market rapidly with a favorable capex profile?

How we pivoted our deep tech startup to become a SaaS company by Ram Iyer originally published on TechCrunch