Mark Zuckerberg celebrated Fourth of July in unique fashion: Holding an American flag as he glided on a body of water, elevated on a board about a foot above the surface.
The Facebook CEO was hydrofoiling, which is a new type of watersport that has grown in popularity among outdoor enthusiasts — and those with plenty of cash to spend on a piece of sporting equipment that costs thousands of dollars.
Though Zuckerberg is mostly known for being the awkward founder of the world’s largest social network and one of richest people on the planet, he’s also become one of the most visible hydrofoilers out there, bringing more attention to the up-and-coming sport.
While surfing requires the power of a wave to get going, and wakeboarding relies on a boat to tow the rider, hydrofoiling uses a winglike structure under the surface of the water to create lift. The rider uses a handheld bluetooth controller that connects to an electric motor and underwater propeller, or creates momentum manually by pumping their legs up and down, as Zuckerberg does in his Fourth of July post.
“It’s a hydrofoil. There’s a wing under the water that I’m riding that pushes the board into the air,” Zuckerberg wrote in a comment on his post. “It’s a lot of fun. There’s an electric-powered version that you can get, but in this video I’m riding a regular foil board and surfing a little wave.”
Electric boards cost upwards of $10,000
Surfers have been toying with the idea of using hydrofoil technology for decades, but the sport didn’t really take off until foil boards became commercially available in 2018, said Nick Leason, co-founder of Lift Foils, which was one of the first companies to sell them.
Prior to foil boards, Leason and his company had been selling boards for kite surfing, which uses a kite in the air to pull a rider on a board across the water. Kite surfing requires a lot of skill, however, which limits the size of the market, Leason said. Foiling is much easier to pick up, and it feels like you’re gliding.
“It’s just this really unique feeling of flying over the water,” said Leason, whose company is based in Puerto Rico. “You kind of feel like a pelican, or a wannabe pelican.”
There are different kinds of hydrofoil boards.
Surf foils include the board and the foil but no motor, requiring users to create momentum with their own bodies, and typically cost about $2,000. Efoils have electric motors that let them reach speeds of 25 miles per hour and typically sell for at least $10,000.
Although foiling requires less skill than kite surfing, the steep price limits its potential market to extreme watersport enthusiasts and people with deep wallets. Canadian company MSLR Electric E-Foil, for example, notes that many of its customers are NHL hockey players.
“The boards are made out of such high-quality materials, said MSLR Founder and Owner Carey Missler. MSLR sells two efoil boards, the Navigator and the Player, both for $10,000. “It takes a while to custom build these boards, plus you’ve got your expensive components of lithium ion batteries and carbon fiber.”
For Zuckerberg, who is the fifth-richest person in the world, with a net worth of approximately $125 billion, according to Forbes, money is no problem. That’s why he owns numerous boards, including custom-painted and custom-built versions made by Lift Foil, Leason said.
“That’s our product that he’s riding on in the video. He probably owns every model that we have,” Leason said. “He’s really into it. He loves it.”
Zuckerberg ‘was ripping’
Zuckerberg first began to post about hydrofoiling in August 2019, when he uploaded two photos of himself on a foilboard being towed by a boat.
“Trying a new sport in Kauai with one of the best, Kai Lenny,” said Zuckerberg, referring to the professional surfer.
Leason said Lenny has been essential to the growth of hydrofoiling as a sport, trailblazing how people use the unfamiliar gear and taking the time to teach new folks about foiling. That includes Zuckerberg, Leason said.
“I think Kai, he’s like magical on a foil, and seeing all the stuff that he does,” Zuckerberg said on Instagram in April. “It’s sort of helped me get into the sport just watching him foil down a huge wave then turn around, go back up wind, up the wave, do a flip off the wave. It’s like Oh my god. It’s unreal.”
In December 2019, Zuckerberg posted a video of himself efoiling while wearing a bright orange helmet. Although helmets aren’t the most stylish getup, they are an important piece of equipment that experts recommend, especially for new foilers. Experts also recommend wearing impact vests.
“The boards are made with carbon fiber. It’s a very, very durable material, which means that if your head was to strike it, it could be very harmful if you weren’t wearing a helmet,” said MSLR Co-owner Taylor Coulthard.
Zuckerberg was caught by paparazzi efoiling in Hawaii with his face completely covered in sunscreen in July 2020. The photo became an instant viral meme.
“I was foiling around, and then I noticed there was this paparazzi guy following us. I was like ‘Oh I don’t want him to recognize me so you know what I’m gonna do? I’m just gonna put a ton of sunscreen on my face so he won’t know who I am,'” Zuckerberg said with a laugh on Instagram in April. “But that backfired.”
Zuckerberg later poked fun at himself about the whole thing last month when he posted a cartoon version of the picture.
“The sun never stood a chance,” Zuckerberg wrote on Facebook.
But despite his awkward episodes, those in the world of foiling say Zuckerberg has actually gotten quite good at the sport.
“It’s funny that most people think that Mark Zuckerberg is a little nerdy guy behind his computer in some lair somewhere, but he’s actually quite a good athlete as you see in that video,” Leason said. “He’s put in a lot of practice on the foil. He’s doing quite well.”
Perhaps more importantly for those that sell foil boards, Zuckerberg is also doing a lot to generate attention and buzz.
“It has brought some interest,” Missler said. “That was an incredible shot. He was ripping. He was doing amazing.”
Microsoft is using OpenAI to make it easier for doctors to take notes
Velib bicycles are parked in front of the the U.S. computer and micro-computing company headquarters Microsoft on January 25, 2023 in Issy-les-Moulineaux, France.
Chesnot | Getty Images
Microsoft‘s speech recognition subsidiary Nuance Communications on Monday announced Dragon Ambient eXperience (DAX) Express, a clinical notes application for health-care workers powered by artificial intelligence.
DAX Express aims to help reduce clinicians’ administrative burdens by automatically generating a draft of a clinical note within seconds after a patient visit. The technology is powered by a combination of ambient A.I., which forms insights from unstructured data like conversations, and OpenAI’s newest model, GPT-4.
Diana Nole, the executive VP of Nuance’s healthcare division, told CNBC that the company wants to see physicians “get back to the joy of medicine” so they can take care of more patients.
“Our ultimate goal is to reduce this cognitive burden, to reduce the amount of time that they actually have to spend on these administrative tasks,” she said.
Microsoft acquired Nuance for around $16 billion in 2021. The company derives revenue by selling tools for recognizing and transcribing speech during doctor office visits, customer-service calls, and voicemails.
DAX Express complements other existing services that Nuance already has on the market.
Nole said the technology will be enabled through Nuance’s Dragon Medical One speech recognition application, which is used by more than 550,000 physicians. Dragon Medical One is a cloud-based workflow assistant that physicians can operate using their voices, allowing them to navigate clinical systems and access patient information quickly, Clinical notes generated by DAX Express will appear in the Dragon Medical One desktop.
DAX Express also builds on the original DAX application that Nuance launched in 2020. DAX converts verbal patient visits into clinical notes, and it sends them through a human review process to ensure they are accurate and high-quality. The notes appear in the medical record within four hours after the appointment.
DAX Express, in contrast, generates clinical notes within seconds so that physicians can review automated summaries of their patient visits immediately.
“We believe that physicians, clinicians are going to want a combination of all of these because every specialty is different, every patient encounter is different. And you want to have efficient tools for all of these various types of visits,” Nole said.
Nuance did not provide CNBC with specifics about the cost of these applications. The company said the price of Nuance’s technology varies based on the number of users and the size of a particular health system.
DAX Express will initially be available in a private preview capacity this summer. Nole said Nuance does not know when the technology will be more widely available, as it will depend on the feedback the company receives from its first users.
Patient information is particularly sensitive and regulated under HIPAA and other laws. Alysa Taylor, a corporate vice president in the Azure group at Microsoft, told CNBC that DAX Express adheres to the core principles of Microsoft’s responsible A.I. framework, which guides all A.I. investments the company, as well as additional safety measures that Nuance has in place. Nuance has strict data agreements with its customers, and the data is fully encrypted and runs in HIPAA-compliant environments.
Nole added that even though the A.I. will help physicians and clinicians carry out the administrative legwork, professionals are still involved every step of the way. Physicians can make edits to the notes that DAX Express generates, and they sign off on them before they are entered into a patient’s electronic health record.
She said, ultimately, using DAX Express will help improve both the patient experience and the physician experience.
“The physician and the patient can just face one another, they can communicate directly,” Nole said. “The patient feels listened to. It’s a very trusted experience.”
SVB collapse is double-whammy for tech startups already navigating brutal market
ChartHop CEO Ian White
ChartHop CEO Ian White breathed a major sigh of relief in late January after his cloud software startup raised a $20 million funding round. He’d started the process six months earlier during a brutal period for tech stocks and a plunge in venture funding.
For ChartHop’s prior round in 2021, it took White less than a month to raise $35 million. The market turned against him in a hurry.
“There was just a complete reversal of the speed at which investors were willing to move,” said White, whose company sells cloud technology used by human resources departments.
Whatever comfort White was feeling in January quickly evaporated last week. On March 9 — a Thursday — ChartHop held its annual revenue kickoff at the DoubleTree by Hilton Hotel in Tempe, Arizona. As White was speaking in front of more than 80 employees, his phone was blowing up with messages.
White stepped off stage to find hundreds of panicked messages from other founders about Silicon Valley Bank, whose stock was down more than 60% after the firm said it was trying to raise billions of dollars in cash to make up for deteriorating deposits and ill-timed investments in mortgage-backed securities.
Startup executives were scrambling to figure out what to do with their money, which was locked up at the 40-year-old firm long known as a linchpin of the tech industry.
“My first thought, I was like, ‘this is not like FTX or something,'” White said of the cryptocurrency exchange that imploded late last year. “SVB is a very well-managed bank.”
But a bank run was on, and by Friday SVB had been seized by regulators in the second-biggest bank failure in U.S. history. ChartHop banks with JPMorgan Chase, so the company didn’t have direct exposure to the collapse. But White said many of his startup’s customers held their deposits at SVB and were now uncertain if they’d be able to pay their bills.
While the deposits were ultimately backstopped last weekend and SVB’s government-appointed CEO tried to reassure clients that the bank was open for business, the future of Silicon Valley Bank is very much uncertain, further hampering an already troubled startup funding environment.
SVB was the leader in so-called venture debt, providing loans to risky early-stage companies in software, drug development and other areas like robotics and climate-tech. Now it’s widely expected that such capital will be less available and more expensive.
White said SVB has shaken the confidence of an industry already grappling with rising interest rates and stubbornly high inflation.
Exit activity for venture-backed startups in the fourth quarter plunged more than 90% from a year earlier to $5.2 billion, the lowest quarterly total in more than a decade, according to data from the PitchBook-NVCA Venture Monitor. The number of deals declined for a fourth consecutive quarter.
In February, funding was down 63% from $48.8 billion a year earlier, according to a Crunchbase funding report. Late-stage funding fell by 73% year-over-year, and early-stage funding was down 52% over that stretch.
‘World was falling apart’
CNBC spoke with more than a dozen founders and venture capitalists, before and after the SVB meltdown, about how they’re navigating the precarious environment.
David Friend, a tech industry veteran and CEO of cloud data storage startup Wasabi Technologies, hit the fundraising market last spring in an attempt to find fresh cash as public market multiples for cloud software were plummeting.
Wasabi had raised its prior round a year earlier, when the market was humming, IPOs and special purpose acquisition companies (SPACs) were booming and investors were drunk on low interest rates, economic stimulus and rocketing revenue growth.
By last May, Friend said, several of his investors had backed out, forcing him to restart the process. Raising money was “very distracting” and took up more than two-thirds of his time over nearly seven months and 100 investor presentations.
“The world was falling apart as we were putting the deal together,” said Friend, who co-founded the Boston-based startup in 2015 and previously started numerous other ventures including data backup vendor Carbonite. “Everybody was scared at the time. Investors were just pulling in their horns, the SPAC market had fallen apart, valuations for tech companies were collapsing.”
Friend said the market always bounces back, but he thinks a lot of startups don’t have the experience or the capital to weather the current storm.
“If I didn’t have a good management team in place to run the company day to day, things would have fallen apart,” Friend said, in an interview before SVB’s collapse. “I think we squeaked through, but if I had to go back to the market right now and raise more money, I think it’d be extremely difficult.”
In January, Tom Loverro, an investor with Institutional Venture Partners, shared a thread on Twitter predicting a “mass extinction event” for early and mid-stage companies. He said it will make the 2008 financial crisis “look quaint.”
Loverro was hearkening back to the period when the market turned, starting in late 2021. The Nasdaq hit its all-time high in November of that year. As inflation started to jump and the Federal Reserve signaled interest rate hikes were on the way, many VCs told their portfolio companies to raise as much cash as they’d need to last 18 to 24 months, because a massive pullback was coming.
In a tweet that was widely shared across the tech world, Loverro wrote that a “flood” of startups will try to raise capital in 2023 and 2024, but that some will not get funded.
Federal Reserve Chair Jerome Powell arrives for testimony before the Senate Banking Committee March 7, 2023 in Washington, DC.
Win Mcnamee | Getty Images News | Getty Images
Next month will mark 18 months since the Nasdaq peak, and there are few signs that investors are ready to hop back into risk. There hasn’t been a notable venture-backed tech IPO since late 2021, and none appear to be on the horizon. Meanwhile, late-stage venture-backed companies like Stripe, Klarna and Instacart have been dramatically reducing their valuations.
In the absence of venture funding, money-losing startups have had to cut their burn rates in order to extend their cash runway. Since the beginning of 2022, roughly 1,500 tech companies have laid off a total of close to 300,000 people, according to the website Layoffs.fyi.
Kruze Consulting provides accounting and other back-end services to hundreds of tech startups. According to the firm’s consolidated client data, which it shared with CNBC, the average startup had 28 months of runway in January 2022. That fell to 23 months in January of this year, which is still historically high. At the beginning of 2019, it sat at under 20 months.
Madison Hawkinson, an investor at Costanoa Ventures, said more companies than normal will go under this year.
“It’s definitely going to be a very heavy, very variable year in terms of just viability of some early-stage startups,” she told CNBC.
Hawkinson specializes in data science and machine learning. It’s one of the few hot spots in startup land, due largely to the hype around OpenAI’s chatbot called ChatGPT, which went viral late last year. Still, being in the right place at the right time is no longer enough for an aspiring entrepreneur.
Founders should anticipate “significant and heavy diligence” from venture capitalists this year instead of “quick decisions and fast movement,” Hawkinson said.
The enthusiasm and hard work remains, she said. Hawkinson hosted a demo event with 40 founders for artificial intelligence companies in New York earlier this month. She said she was “shocked” by their polished presentations and positive energy amid the industrywide darkness.
“The majority of them ended up staying till 11 p.m.,” she said. “The event was supposed to end at 8.”
Founders ‘can’t fall asleep at night’
But in many areas of the startup economy, company leaders are feeling the pressure.
Matt Blumberg, CEO of Bolster, said founders are optimistic by nature. He created Bolster at the height of the pandemic in 2020 to help startups hire executives, board members and advisers, and now works with thousands of companies while also doing venture investing.
Even before the SVB failure, he’d seen how difficult the market had become for startups after consecutive record-shattering years for financing and an extended stretch of VC-subsidized growth.
“I coach and mentor a lot of founders, and that’s the group that’s like, they can’t fall asleep at night,” Blumberg said in an interview. “They’re putting weight on, they’re not going to the gym because they’re stressed out or working all the time.”
VCs are telling their portfolio companies to get used to it.
Bill Gurley, the longtime Benchmark partner who backed Uber, Zillow and Stitch Fix, told Bloomberg’s Emily Chang last week that the frothy pre-2022 market isn’t coming back.
“In this environment, my advice is pretty simple, which is — that thing we lived through the last three or four years, that was fantasy,” Gurley said. “Assume this is normal.”
Laurel Taylor recently got a crash course in the new normal. Her startup, Candidly, announced a $20.5 million financing round earlier this month, just days before SVB became front-page news. Candidly’s technology helps consumers deal with education-related expenses like student debt.
Taylor said the fundraising process took her around six months and included many conversations with investors about unit economics, business fundamentals, discipline and a path to profitability.
As a female founder, Taylor said she’s always had to deal with more scrutiny than her male counterparts, who for years got to enjoy the growth-at-all-costs mantra of Silicon Valley. More people in her network are now seeing what she’s experienced in the six years since she started Candidly.
“A friend of mine, who is male, by the way, laughed and said, ‘Oh, no, everybody’s getting treated like a female founder,'” she said.
CORRECTION: This article has been updated to show that ChartHop held its annual revenue kickoff at the DoubleTree by Hilton Hotel in Tempe, Arizona, on Thursday, March 9.
WATCH: Cash crunch could lead to more M&A and quicker tech IPOs
Amazon to lay off 9,000 more workers in addition to earlier cuts
The Amazon Spheres, part of the Amazon headquarters campus, right, in the South Lake Union neighborhood of Seattle, Washington, U.S., on Sunday, Oct. 24, 2021.
Chona Kasinger | Bloomberg | Getty Images
Amazon will lay off 9,000 more employees in the coming weeks, CEO Andy Jassy said in a memo to staff on Monday.
The cuts are on top of the previously announced layoffs that began in November and extended into January. That round affected more than 18,000 employees.
Amazon made the decision to lay off more employees as it looks to streamline costs. It took into account the economy, as well as the “uncertainty that exists in the near future,” Jassy said. The company just wrapped up the second phase of its annual budgeting process, referred to internally as “OP2.”
“The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole,” Jassy said.
The latest round will primarily impact Amazon’s cloud computing, human resources, advertising and Twitch livestreaming businesses, Jassy said in the memo.
This story is developing. Please check back for updates.
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