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Is the future of housing hiding in a smartphone app?

Apr 2, 2021

Kevin McAllister ( @k__mcallister ) is an associate editor at Protocol, leading the development of Braintrust. Prior to joining the team, he was a rankings data reporter at The Wall Street Journal, where he oversaw structured data projects for the Journal's strategy team. March 31, 2021 For Notarize, real estate closings have opened up a huge market opportunity. What the company has its eyes on next could be even bigger. The 6-year-old eNotary is fresh off closing a $130 million series D round last week, bringing its total funding to $213 million. In the last year, the company has seen its revenue grow sixfold, in part due to an 800% increase in the number of real estate transactions the company has processed over the last year. <p>Notarize first <a href="https://www.wsj.com/articles/mortgage-closings-just-took-a-big-step-into-the-digital-age-1502287181" rel="noopener noreferrer" target="_blank"><u>made headlines</u></a> back in 2017 when the company facilitated the first remote closing. But for CEO Pat Kinsel, Notarize's latest moves in the <a href="https://www.protocol.com/bulletins/notary-esignature-notarize-docusign-adobe" target="_self"><u>increasingly hot</u></a> world of e-signatures set the company up beyond just real estate. He sees a real opportunity for the company to be the last-mile solution for legal infrastructure, sort of like what Stripe and Plaid have become for the financial services industry.</p><p>"We want to plug in and give people the best, most compliant, most usable, most effective closing solution," Kinsel said. "I think that digital closings will be the mainstream in short order. "</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1"></div></div></p><p>In an interview with Protocol, Kinsel described why he believes the back-end infrastructure work his company has done puts it years ahead of new direct online notary competitors like DocuSign, what the new funding will allow Notarize to expand into and what the future of home buying will look like.</p><p><em>This interview has been edited and condensed for clarity.</em></p><p><strong>You raised funds <a href="https://venturebeat.com/2020/07/08/notarize-raises-35-million-amid-digital-legal-service-boom/" rel="noopener noreferrer" target="_blank"><u>less than a year ago</u></a>. Was another round on this timeline always in the plan?</strong></p><p>Everything accelerated. We had a great 2019 pre-COVID on the back of the work we had done to create legal clarity in the market: 2017 [saw] the first-ever real estate transaction in the country; 2018 was the first-ever will; and we had Fortune 100s using us in all 50 states going into 2019. So 2019 was a huge improvement to our business metrics, and our plan for 2020 and beyond was to continue to do well in real estate and really win one enterprise financial services customer. We wanted to validate that there was much more of a broad platform with significant appeal. Now, we work with Transamerica, TIAA — I can go on and on in terms of these marquee enterprise customers. </p><p>So our plan was not to raise money until later in this year, and we still have most of the money that we raised last year. But for our current customers now, if we just process all of the transactions that they want to send us, we're a $700 million revenue business. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2"></div></div></p><p>And "What does it take to do that?" is the question. There are different workflows we may or may not support. There might be regulatory requirements that we don't support yet, systems we haven't integrated with yet, teams that need to be trained or onboarded. For us, that was the decision to step on the gas and to raise the round.</p><p><strong>Let's talk about the 2017 real estate closing. How much of the process today is the same as it was then? And how much is different?</strong></p><p>I actually think some history is helpful here, if you'll indulge. We launched in Virginia in February of 2016, and almost immediately after that, the National Association of Secretaries of State came out with a task force to study the issue. We engaged in that and traveled the country and visited all these people, and ultimately, they changed their policy. But early on, we introduced a bill in Maryland, very much when this was not yet a solved matter. And the Maryland Mortgage Bankers [and Brokers] Association came to the hearing. We thought it was going to pass, and they basically came to these hearings and said, "Time out, this cannot pass because it will destroy the housing industry." They said, "We can't execute mortgages in this state unless we know Fannie Mae is going to buy them and Freddie Mac's going to buy them and the title underwriters are going to insure them. Our entire housing market is going to basically fall to shreds unless we have certainty that these transactions are still effective and have the full legal standing. "</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3"></div></div></p><p>So, I remember driving out of Maryland that day with my co-founder Adam, and we looked at each other and we said, "Look, let's just go convince Fannie Mae." At the end of the day, the issue is that people need to know their lien position is going to be held up in court. You have a mortgage, and in the event of default or some claim, ultimately this notarization has to be in good standing. So we basically simulated bankruptcy trustee cases in all 50 States. We did the legal research, and we came back and presented that. At the same time, there was this huge momentum on the legislative front. We passed in Texas, and Texas was a big enough market that people said, "OK, this is really going to happen." And that's when we were able to do the first closing. When we did that first closing, we wanted to do it across state lines to prove that the legal framework was valid. So it was United Wholesale, a Detroit-based mortgage lender. The couple was in Chicago. The notary was in Virginia. And the title company was in Texas. And it was fully insured by Stewart Title and purchased by Freddie Mac. It was a completely normal, standard mortgage just executed online and across state lines.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4"></div></div></p><p>So to answer your question: That is still, today, what allows the market to operate. We have this legal framework that allows us to serve clients irrespective of geography. And that's what's changed in the industry so much. You now have a title company that can say, "Hey, we can actually have a centralized closing team." That's where people are seeing the future of the industry. It's not just about [needing] to close these loans; it's let's redesign our organization, putting people and resources in different parts of the country in order to fulfill transactions. As far as what's different, a lot of our process [then] was manual. The workflow to create the transaction was actually eight hours of manual work of getting data out of systems and keying it in. We're now fully automated in that regard. It's now this instant, always-available service that people can rely upon.</p><p><strong>You're saying that the regional, more-centralized approach is a function of progress for the industry, but it's also just a function of the differences in state laws, right? What happens if a federal regulation on remote online notarization passes? How does the playing field evolve then?</strong></p><p>It's not just state laws, it's county, industry, counterparty, underwriter. For example, a real estate transaction in Miami-Dade is different from one in Palm Beach, which is different than one in Pennsylvania. And one in Texas that's underwritten by First American is different from one that's underwritten by Fidelity. It's freaking bananas. What our customers want is to not have to think about a single thing. They expect our platform to ensure it has the right notary, the right things on the document, et cetera.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5"></div></div></p><p>We've been super involved in the <a href="https://www.congress.gov/bill/116th-congress/house-bill/6364?q=%7B%22search%22%3A%5B%22notarization%22%5D%7D&amp;s=1&amp;r=2" rel="noopener noreferrer" target="_blank"><u>federal</u></a> <a href="https://www.congress.gov/bill/116th-congress/senate-bill/3533?q=%7B%22search%22%3A%5B%223533%22%5D%7D&amp;s=2&amp;r=4" rel="noopener noreferrer" target="_blank"><u>bill</u></a>; we helped to introduce it. We found the sponsors for it. We've done hundreds of hours on the phone. All that is a floor. All that says is that so long as this minimum standard is met, these transactions are valid for all use cases at a national level and for all state and federal agencies. There are still gray areas just as a result of the way laws are written. The federal law is really supposed to clarify those sorts of issues, but every state and every county is still going to have their own requirements.</p><p><strong>In the funding <a href="https://www.businesswire.com/news/home/20210325005170/en/Notarize-Announces-130M-in-Funding-to-Fuel-Growth-and-Fully-Digitize-Life%E2%80%99s-Most-Important-Transactions" rel="noopener noreferrer" target="_blank"><u>release</u></a>, it says your completed transaction volume is up 800% for real estate. Where do you see that current number and rate in terms of the pendulum? Will things swing back as reopening happens? Is that number now the balancing point?</strong></p><p>In the history of our company, we've never had someone go back. And it's really a function of two things. One, it takes work to get up and running, and once that work is done, why would you undo it? And two: People love it. And I mean that in every regard. Consumers rave about it; our partners save tons of money.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6"></div></div></p><p>We have statistics from our customers that, without us, a real estate closing can have errors in as many as 30% of transactions that require a partial re-execution. With us, it's basically zero. There are these enormous efficiencies, and then separately, our customer base is only about 2% penetrated and growing month-over-month.</p><p>And I would add that real estate is a network. The more that we onboard, the more transactions we can serve. Our system has an automated rules engine that will qualify transactions, so when we can add another partner, it increases the number of eligible transactions. Or if we add a new county, it increases the volume across all of our customers.</p><p><strong>You mentioned part of the new funding might be used for tech development. What's that look like?</strong></p><p>We're super focused right now on being the platform that powers everybody. We want every service, every platform, every company to be able to have a highly customizable version of our service that they can integrate within their own workflow. One of the trends that's really happening in real estate is this end-to-end concept, that a consumer [can] search for a home, apply for a mortgage and ultimately close through one core experience.</p><p>Other companies are focused on different parts of that, but we want to plug in and give people the best, most compliant, most usable, most effective closing solution. If you don't close, nothing matters. And that's true not just in real estate. If you think about a Stripe or a Plaid, these companies that are the engine that really drive an industry, we're already down this path.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7"></div></div></p><p>And if you think about the institutions relying on our platform, these are critical transactions that are often required by law or regulation. You can't turn people away. So [we have a] push for accessibility, and then of course security and uptime.</p><p><strong>In a lot of industries, this year has seemingly given a peek at the future by showing what could and couldn't change quickly. What does buying a house look like a few years from now? What's still ripe for change?</strong></p><p>First off, because it's my bailiwick, I think digital closings follow the same timeline as everything else. If you look at the rate for home search, for mortgage applications online, they went to basically 70% and above within three or four years. The idea of applying for a mortgage online was kind of far-fetched just a couple of years ago, and with the success of [companies like] Blend and Roostify, that industry has exploded. I think that for us as well — because we follow in a digital process — if you're searching for a home online and applying for a mortgage online, you're very likely going to close online. So I think that digital closings will be the mainstream in short order.</p><p>More broadly, I'm actually a big believer that a lot of the banks are going to have a resurgence, specifically in mortgage lending. The banks and also real estate companies have the customer. If you're a bank, and Blend is successful and Fannie Mae's <a href="https://singlefamily.fanniemae.com/applications-technology/day-1-certainty" rel="noopener noreferrer" target="_blank"><u>Day 1 Certainty</u></a> is successful, and you want to buy a house, you can pull up your Wells Fargo app and say, "I'd like a mortgage." They have all your income and your financial information, and if they have automated underwriting, they could just offer it to you. And Realogy and Zillow have the same thing, just much earlier in the funnel.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8"></div></div></p><p>A lot of these companies are now putting the pieces together. They have a mortgage lender, a title company, et cetera. And that's really where we play. These people that are trying to connect the dots to digitize the whole experience most likely work with us.</p><p><strong>It's a market that's <a href="https://www.protocol.com/enterprise/docusign-adobe-e-signature" target="_self"><u>heating up</u></a>. <a href="https://www.prnewswire.com/news-releases/docusign-bolsters-agreement-cloud-with-new-remote-online-notarization-solution-301255132.html" rel="noopener noreferrer" target="_blank"><u>DocuSign</u></a> recently put out a notary product. You said these companies connecting the dots digitally are likely using you right now. Why or why aren't you worried moving forward?</strong></p><p>Honestly, I think we forced DocuSign into the market. At the end of 2019, they were saying the space wasn't important. And I think if you look at the organizations that have been winning, they've been forced to respond. We've been doing this for six years. We've been engaged in all of the regulatory conversations. There is no shortcut to building a compliant online notarization product. And there is no shortcut to serving all the industries. They have a long way to go before they can match what we can provide today.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="9"></div></div></p> From Your Site Articles Hirsh Chitkara ( @ChitkaraHirsh ) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians. March 29, 2021 In a normal real estate market, iBuyers represent an attractive option for home sellers. It can otherwise be a tedious and uncertain process: Sellers need to list their home through an agent, host an open house, field offers, wait for potential buyers to get a loan approved (which often doesn't happen) and then maybe they can address the mountain of paperwork needed to finalize the deal. By contrast, iBuyers such as Opendoor, Redfin and Zillow can provide a guaranteed cash offer and handle much of the related paperwork needed to close, all within the span of a few days. The problem for iBuyers is that this isn't a normal market. Housing supply has plummeted to near-record lows , fueled by low interest rates and a wave of newly-remote workers taking to the suburbs. <p>"Every market acts like Silicon Valley now where there are multiple offers on homes and buyers need a way to be able to stand out," Tom Willerer, chief product officer at Opendoor, told Protocol. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1"></div></div></p><p>With such high demand for homes, sellers are keen to try their luck on the open market, pitting prospective buyers against another to maximize the sale price. Plus, with so many buyers in the market, homes don't take very long to sell, making the speed of iBuyers less of a differentiator. </p><p>In early March, Opendoor unveiled a new product — cash-backed offers — <a href="https://www.opendoor.com/w/blog/opendoor-introduces-cash-backed-offers" rel="noopener noreferrer" target="_blank">aimed at helping buyers</a> stand out in the red-hot real estate market. Protocol spoke to Willerer to learn how it fits into Opendoor's broader iBuying strategy. Willerer also discussed why he thinks the demand for homes isn't going away anytime soon, as well as how Opendoor's approach to the residential real estate market differs from that of Compass, which <a href="https://www.protocol.com/compass-real-estate-ipo" target="_self">recently went public</a>. </p><p><em>This interview was edited for brevity and clarity.</em></p><p><strong>Why did Opendoor decide to launch a cash-backed offers program? </strong></p><p>I'd start with our overall mission, which is to empower everyone with the freedom to move. We started thinking about cash offers as a way to delight buyers and solve what we believed they were trying to do — win the home of their dreams. </p><p>There is a lot of industry data out there that shows cash offers are two times more likely to be accepted by sellers. So that got us really excited and set us on this journey. Additional to that, the market conditions are ripe for this. We have historically low interest rates and historically low inventory levels.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2"></div></div></p><p>So it's all of the above, where we're trying to create a differentiated experience that buyers will choose. We've read all the research and talked to customers and understand that cash offers are one of the main ways we can help our buyers win. And in the market right now, buyers are screaming out for a way to stand out. I describe it as every market acts like Silicon Valley now, where there are multiple offers on homes and buyers need a way to be able to stand out. </p><p><strong>What is the difference between a cash-backed offer and getting pre-approved for a bank loan or using something like Rocket Mortgage?</strong></p><p>The way we're doing this is all of our customers are getting pre-qualified, [but] they will still have financing. If for whatever reason their financing falls through or takes too long, we will step in and buy the home for them. And then once their financing comes through, they buy it from us. </p><p>With Rocket Mortgage, etc., they're doing fast financing. But there's a small minority of times that the homes fall through because financing fell through. So we're removing that contingency for sellers, which then increases the odds of the buyer winning the home. </p><p><strong>How does Opendoor make money in this process?</strong> </p><p>We split a part of commissions with the partner agent. We give them a referral fee because we brought the lead — we enabled the cash offers [and] they helped with the transaction. So we split that 2.5[%] to 3% commission between. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3"></div></div></p><p>Longer term, we view this as a way for us to continue to drive up additional services to the business. For instance, I think it's logical that as we continue to innovate on cash offers and drive more adoption with our customers, more customers will choose our mortgage services.</p><p><strong>With such limited housing supply, is there reason to be concerned that first-time buyers will be locked out of the market altogether? Especially considering the rise in home prices relative to wages — maybe people will just rent instead. </strong></p><p>No, especially as people are seeing this change to working from home on a long-term basis — they're looking for different things than they get out of their living situation, which is causing people to move. I think that's going to continue for a while. There's somewhat of a reshuffling happening that's going to drive buyer demand for the foreseeable future that we're pretty excited about. So we remain bullish.</p><p><strong>Where do iBuyers fit into the broader real estate market from the agent perspective? What would be the upside of an agent working with Opendoor as opposed to a company like Compass, that really markets itself as a champion of independent agents?</strong></p><p>The agent is definitely the focus for a company like Compass. They're trying to create a great experience for agents. Our focus is different — we're trying to create a great experience for buyers and sellers. I think it's true that a traditional brokerage will be much more focused on how [to] create a digitized, efficient experience for agents. So there's just a difference in focus and it shows up in the types of things we end up doing.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4"></div></div></p><p>We still find a fair number of agents coming to Opendoor to get an offer for their customer. They'll walk through our flow because they want to be able to offer their seller options. If I'm an individual agent, being able to give my seller options for how they can sell on the market and educate them — it's a good value proposition. Why wouldn't most sellers on the market want to come to Opendoor to find what their offer [would] be? Why isn't that the natural starting point for how a seller would want to approach the market? And an agent can help facilitate that just as much as a seller can come to Opendoor directly and do that themselves.</p> From Your Site Articles Hirsh Chitkara ( @ChitkaraHirsh ) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians. March 24, 2021 There are dozens of companies, most located in Silicon Valley, that see the pandemic as an opportunity to reshape the restaurant industry in their favor. These dreams of disruption are dressed in terms that wouldn't have made much sense even a decade ago — things like "cloud kitchens," "on-demand meal delivery logistics platforms" and "made-to-order meal food robots " (not vending machines, they'll have you know). TouchBistro isn't one of those companies. For starters, it's based in Toronto. But of greater importance, the success of the point-of-sale software company is predicated on traditional restaurants thriving post-pandemic. "We're starting to see bars open up, restaurants open up — we're starting to see transaction level approaching pre-pandemic levels," Alex Barrotti, the founder and CEO of TouchBistro, told Protocol. <p>As for the threat posed by those Silicon Valley tech companies? Barrotti says he thinks there's a time and place for things like meal delivery, but at the end of the day we're social creatures and restaurants appeal to an intrinsic human need. "I can't imagine me saying to my wife, 'Happy anniversary, let's get Uber Eats,''' Barrotti said. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1"></div></div></p><p>TouchBistro was founded in 2010. Barrotti came up with the idea while on what he called a "sabbatical" in Turks and Caicos (he sold his <a href="https://www.zdnet.com/article/infospace-com-acquires-inex-for-45m/" rel="noopener noreferrer" target="_blank"><u>previous venture</u></a>, INEX, for $45 million in 1999). A friend who owned a sushi restaurant on the islands asked Barrotti for help developing a software system that would enable him to send meal orders from the patio to the kitchen without staff having to return indoors. In April 2010, Apple introduced the first iPad, which Barrotti saw as the perfect device to enable the software system to become a fully-fledged business. "That's kind of the moment the apple fell from the tree and I returned to Canada to start TouchBistro," Barrotti said. </p><p>The company has since grown to serve over 25,000 restaurants in 100 countries. It offers a proprietary ordering system that makes it easier for restaurants to split the bill. TouchBistro has also expanded to help restaurants manage online ordering, reservations and loyalty programs. Protocol spoke to Barrotti to better understand the unique challenges of developing software for restaurants, what the industry will look like post-pandemic and why Toronto is a great place to run a tech company. </p><p><em>This interview has been edited and condensed for clarity.</em></p><p><strong>What were some of the early features that helped TouchBistro gain traction?</strong></p><p>One thing that is unique to TouchBistro is we have a design patent on the way we take an order. Because we were mobile from the get-go, we decided to reimagine how you take an order at a restaurant. Every [other] point of sale worked by assuming that you took the order on a pen and paper and then you walked over to a server station and entered the order by course, which would be like drinks, appetizers, mains, desserts. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2"></div></div></p><p>We reimagined that whole process and said, "well wait a minute, I'm standing at a table, I can see the people sitting at the table — let's start with a digital representation of the seats at the table." I could tap on the table to order items that would be shared by all the diners. And I could tap on each individual chair as I took the order, which then would allow me to instantly build an order for each person. And if I needed to split the bill, I could [do so] with a simple tap. That became the cornerstone of TouchBistro and to this day, it's our hallmark in our design, and it proved to be a differentiator in the market. </p><p><strong>What are the unique challenges of designing software for the restaurant industry? For instance, the industry tends to have high staff turnover, so does that impact how you think about the user interface?</strong> </p><p>We made sure that all of the gestures and user interface conventions mimic exactly what happens on the iPhone. We're part of a program called the Mobility Partner Program, where Apple actually gives us feedback and critiques our products to make sure it's Apple-compliant before it goes out the door. To delete something, you swipe to the left on a list, just like you do on the iPhone. If you tap and hold an item, you get a list of help.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3"></div></div></p><p>When we see people new to the product, about half an hour later they're just at home with it. And I always ask them, "How is it you picked this up so quickly?" And the answer is almost always the same: "Well, I use an iPhone." Or any smartphone for that [matter]. If they use Android, the conventions are pretty similar. </p><p><strong>How has your business been impacted by the pandemic? As restaurants adapted to the restrictions, has their use of TouchBistro also changed?</strong> </p><p>When the pandemic hit, we expected a sort of doomsday scenario where we were going to lose half of our customers and we weren't going to get any new sales. Thankfully, that did not happen — we continued to get new customers and we only had minor churn. </p><p>Some customers called in asking to put a hold on their license [and] we were happy to help our customers [in] their time of need. But I started having a dialogue with them, saying: "Well, we're happy to suspend your license for a month or two, but I'm skeptical that $69 a month is going to put you in bankruptcy. So what is it we can help you get?" And of course the obvious answer was they wanted more customers. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4"></div></div></p><p>We said, "OK, well had you considered selling online?" [Customers] said [they] didn't want to give so much commission to the different marketplaces. So we said, "Well, what if TouchBistro launched a free online ordering service with no commission?" So we started getting customers to sign up or convert to our system so they could sell online. </p><p>No. 2, we have a reservation product that we actually saw an increase in demand [for] because local jurisdictions have different restrictions. Some only allow 10 diners, some allow 50% capacity, you name it. So in order for the restaurant to prove that they were compliant on any given night, or for contact-tracing purposes, they started using our reservation system.</p><p>And then the same thing with loyalty [programs]. Owners would call in and say, "How do I send a mailer to all of my customers letting them know I'm open on St. Paddy's Day?" And we said, "You need to have a loyalty or CRM solution. "</p><p><strong>What are your thoughts on the speculation about how the pandemic will change the restaurant industry overall? Is it overblown at all? Especially for some of the more out-there predictions for post-pandemic, like cloud kitchens gaining momentum or customers choosing delivery services over dine-in experiences.</strong> </p><p>I think we will go back to business as usual pretty quickly. I was in a restaurant last weekend in a jurisdiction that finally opened up and they were turning people away like crazy.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5"></div></div></p><p>There's a time and a place for everything. If you come home late from work, are tired and just want to grab something to eat, [then] you can certainly order from any number of online marketplaces. That is very convenient. </p><p>But we're social creatures. If you want to go on a date, you're going to want to go to a restaurant. And even more importantly, we celebrate important milestones by going out to restaurants. I can't imagine me saying to my wife, "Happy anniversary, let's get Uber Eats." We would be looking forward to a night out and someone serving you — and more importantly, cleaning up the mess afterwards. Obviously we have ordered a lot during this pandemic, but it's nowhere near the same experience.</p><p><strong>TouchBistro is based in Toronto. What are some of the pros and cons of being a technology company there? </strong></p><p>I can't think of any con actually. Toronto has really come into its own as "Silicon Valley North." Every major company has a subsidiary here. There is no shortage of skilled labor or talent. </p><p>The only negative, if I had to think of one, is that now salaries are becoming quite competitive. And the one thing the pandemic has done — because everyone has gone virtual for this year — before you would have to worry about other companies in Toronto poaching your people, now we get companies from the States calling Toronto companies trying to poach the staff. With the exchange rate it's cheaper labor even though it's just as qualified or skilled labor, and it becomes more economic for the U.S. company to pay the developer in Canadian dollars. So that's the only negative right now, which is really the flip side of a positive. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6"></div></div></p><p><strong>Is there anything you're particularly excited about moving forward?</strong></p><p>We're starting to see things pick up with the vaccine rolling out in the U.S. The U.S. is our largest market, 70% of our sales are [there], 20% are Canada [and] 10% rest of the world. We're starting to see bars open up, restaurants open up — we're starting to see transaction levels approaching pre-pandemic levels.</p><p>When I talk to people and I ask them, "What's the first thing you're looking forward to when this pandemic is over?" The first answer I get from anyone is going out to restaurants — before travel, before returning to work, before any of those things. </p><p><em>Correction: An earlier version of this story misstated the term "point of sale." This story was updated on March 24, 2021.</em></p> From Your Site Articles Mike Murphy ( @mcwm ) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics. March 22, 2021 Shelter-in-place forced a nearly overnight transformation of the restaurant industry as businesses struggled to find a way to survive this pandemic. But at some point, hopefully soon, we won't all have to remain six feet apart anymore, and people will want to go back to eating with friends at their local haunts. The experience won't be identical, though — thanks to technological and structural changes the pandemic forced upon the industry, as well as plans that were in the works well before we all went into lockdown. Tom Buiocchi is the CEO of ServiceChannel, a company whose software tools help businesses manage facilities by matching work that needs to be done, like plumbing fixes, cleaning and repairs, with local contractors. It works with some of the largest chains in the restaurant industry, including Chipotle, Panda Express and Sweetgreen. With 150 million transactions to date run through ServiceChannel, Buiocchi said the company could see patterns emerging when the coronavirus started to take root in the U.S., based on the work orders flowing through the system. "Many of these trends were already in motion, but what COVID did was accelerate our evolution," Buiocchi said. <p><div class="ad-tag"><div class="ad-place-holder" data-pos="1"></div></div></p><p>Buiocchi recently hosted a Zoom panel with facilities managers who shared some of the big changes they were seeing firsthand. The most common one was the intense focus on safety and cleanliness. "If you don't have that, you're probably not going to get any customers in," Buiocchi said. </p><p>Gone are the days of a simple wipe-down after a customer leaves a table — now servers are sanitizing tables and wearing masks and other protective gear. Companies are investing in new HVAC filters, electrostatic disinfection fogging machines and <a href="https://facilityexecutive.com/2020/12/lg-autonomous-robot-disinfects-with-uv-light/" rel="noopener noreferrer" target="_blank"><u>autonomous robots</u></a> that blast germ-killing UV light as they roam around. Although many critics argue that this is "<a href="https://www.theatlantic.com/ideas/archive/2021/02/hygiene-theater-still-waste/617939/" rel="noopener noreferrer" target="_blank"><u>hygiene theater</u></a>," since the virus propagates more effectively through the air than on surfaces, it seems like a growing customer expectation, and restaurants desperate to lure diners back view it as a better-safe-than-sorry choice.</p><div class="rm-embed embed-media"><iframe aria-label="chart" frameborder="0" height="400" id="datawrapper-chart-D3lE4" scrolling="no" src="https://datawrapper.dwcdn.net/D3lE4/2/" style="width: 0; min-width: 100% !important; border: none;" title="Monthly emergency janitorial work orders"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}}))}();</script></div><p>Other changes coming to restaurants go deeper than a scrub-down, touching all aspects of operations. For luxury or high-touch restaurants, there likely will be a return to highly personal table service. Everything else is up for automation.</p><p>For many customers, a wariness of being too close to strangers isn't going to fade overnight. In some cases, that'll mean more businesses sticking with mobile ordering setups they put into place over the last year. Companies like <a href="https://www.protocol.com/manuals/transforming-2021/hotel-automation-in-2021" target="_self"><u>Bbot</u></a>, Toast and Presto are combining back-of-house order management software with customer-facing services like digital menus, ordering and QR codes. This means customers can sit down at a table, scan a code for a menu, pick out what they want and potentially even pay for it, without ever having to talk to a server. And unlike paper menus, digital ones don't have to be reprinted or amended for specials. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2"></div></div></p><p>Quick-service restaurants that have cribbed the Chipotle assembly-line approach to completing people's orders also want to be able to recreate that experience digitally, according to Buiocchi. "As you scroll down the app, it needs to mimic you walking down the line, adding things to your burrito," he said. </p><p>While most companies have been investing in mobile experiences, some have also pushed ahead with in-person ordering systems that still don't require customers to talk to anyone to place their order. McDonald's and Taco Bell have added large touch-screen kiosks to the fronts of their stores, reducing the number of staff required to take orders, while freeing them up to work on fulfilling them or other jobs that need doing around the restaurant. </p><p>Even the physical structure of restaurants is changing. Buiocchi said that many chains are now targeting suburban locations with smaller dining rooms and larger kitchens. The restaurants are expecting that a large percentage of their orders will be slated for pickup or delivery. "They want to be closer to the ultimate consumer," Buiocchi said. "These are micro-distribution centers. "</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3"></div></div></p><p>Some are extending that approach to layout in-store, as well, hosting several "lanes" for customers. Chains like Chick-fil-A and Cava had dedicated pick-up zones or lines for mobile orders prior to the pandemic, but that's been supercharged during the pandemic. People want to get in and out of stores as quickly as possible, and restaurants are changing to reflect those needs. "The parking lot is a dining room now," Buiocchi said.</p><p>Some restaurants are trying to build the uncertainty of the future into their restaurant layouts, too. That could mean swapping from takeout to order-in lines at different times of the day, but also something as simple as being able to move the furniture around. Buiocchi said that many restaurants bolted their tables and chairs to the floor in the past, but to accommodate more pickup lanes, or ever-fluctuating state regulations on how many people can dine indoors in a given month, they're now looking to put everything on wheels. Depending on the situation, staff can then just roll out what's needed. "You don't know what the configuration is going to be next week," Buiocchi said. </p><p>But even as companies are increasingly turning to <a href="https://www.protocol.com/manuals/transforming-2021/four-seasons-tech-luxury" target="_self"><u>digital channels</u></a> to manage the relationship they once had with customers in person, there's still a strong likelihood that people will want to come back into restaurants, once it's safe, even if the post-pandemic layouts are unfamiliar. </p><p>Even Chipotle, which <a href="https://www.protocol.com/chipotle-cto-curt-garner-interview" target="_self"><u>has found success</u></a> with its mobile ordering during the pandemic and added separate drive-through lanes to its stores for mobile order pickups, sees the promise of in-store sales. People shop with their eyes, Chipotle CTO Curt Garner told Protocol in <a href="https://www.protocol.com/chipotle-cto-curt-garner-interview" target="_self"><u>October</u></a>. "There are a lot of people at Chipotle that walk in and they hear the chicken on the <em>plancha</em>, and they smell the adobo; they know they want Chipotle, but they make up their mind looking through the glass at the food and smelling the smells and interacting with the crew," Garner said. "That's a really important part of our experience. "</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4"></div></div></p> From Your Site Articles Penelope Blackwell is a reporting fellow at Protocol covering edtech. She reports on the developments in tech that are shaping the future of learning. Previously, she interned at The Baltimore Sun covering emerging news and produced content for Carnegie-Knight's News21 documenting hate and bias incidents in the U.S. She is also a recent graduate of Columbia University's Graduate School of Journalism and Morgan State University. March 19, 2021 When it comes to classroom education, Adobe is probably not the first company that comes to mind. But Mala Sharma, vice president and general manager of Adobe's Creative Cloud, would like to change that. In 2012 Adobe launched its Creative Cloud, allowing customers to use its core programs for a monthly fee — and giving access to a larger, and younger, audience. Adobe is helping in more subtle ways, as well: It launched Acrobat Web earlier this year, which makes it easier for people to convert documents to PDF on the web; it brought several of its core apps, like Photoshop, to the iPad; and it's working to bring processes like Document Cloud, Adobe Sign or Acrobat into schools so they can be more efficient. <p>In a conversation with Protocol, Sharma described the ways Adobe is helping students and teachers stay connected and engaged while learning online, and explained why fostering creativity is not only important for students, but for their future careers as well.<br></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1"></div></div></p><p><em>This interview has been edited and condensed for clarity. </em></p><p><strong>Do we need to rethink our approach to education in the U.S.?</strong></p><p>There's a few things that have been consistent in education that haven't changed. This is something that we've tried to do over centuries: The first one is making sure the students are successful. It's about making sure that they have a holistic learning experience, not just about their academic success, but also that they become great citizens as they enter the world. The second one, that's also been an area of focus in education, is how do you engage a student? How do you make sure that they're paying attention in class? This has been a perennial problem. It's gotten only worse and exacerbated with remote learning because now the teachers are not right there to observe what the students are doing. [Students] could close their camera, they could be on their phones on the side. It's hard to manage. The third area is the way that schools operate efficiently. Budgets are typically constrained, and the importance of being able to operate efficiently is even more paramount, even more so now with distance learning. </p><p>Those three things have been consistent. What has changed because of COVID is the urgency to address all of those has just gotten exacerbated. Schools have been operating the same way for hundreds of years, but in one stroke, COVID required that education completely reinvents itself. And what I think I see as the opportunity for change given all of this, is when it comes to student success, it's very much about [whether] the student learned what the teacher is trying to teach them. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2"></div></div></p><p><strong>How is Adobe thinking about bringing its products into the classroom?</strong></p><p>We believe that one of the most important ways of assessing that a student has learned is by having them create something. With the flipped classroom, the teacher gives the student an assignment and they come back and talk about it, which is great, but it's somewhat insufficient. The student could still just do research on Google and give the answer whether they've learned it or not. There's a taxonomy, called Bloom's taxonomy, which declares that somebody creates something, it is the most discernible and definitive way to assess whether they've learned something. If you're an engineer, and what you're trying to build is an application, one way for the teacher to assess that you have understood the concepts is to have you create a prototype. Just like a photo is worth a thousand words, a prototype is worth a thousand meetings. When COVID happened, we created a distance-learning hub for our teachers, called Adobe Education Exchange, where we created a curriculum for teachers to go and bring into their classroom, to help them figure out how to bring creativity into the classroom.</p><p>We've been hyper-focused on how we give the teachers the tools to assess whether the students [are engaged]. In fact, there's a teacher who I met during this whole COVID phase. She works up in Napa at a school called New Technology High School, and she was sharing with me, she was like, "Gosh, I'm really nervous about my new batch of ninth-graders — how am I going to connect with them? Normally we have some sort of a class party, it's a welcome thing, and this is going to be on Zoom or some other platform, and it's going to be terribly boring." What she decided to do, which was really cute and fun, but also compelling, was to use one of Adobe's products called Character Animator, where you can create a little character, and you can animate it based on your movements. She was planning to use that in her classes to drive student engagement, as there would be the surprise factor to have the students be attentive. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3"></div></div></p><p>Hiring managers shared that one of the most important skill sets they're looking for is creativity and communication, because the problem set at work is changing. There are abstract issues. You have to bring critical thinking, critical problem solving. For you to stand out at work, you could do a memo, but creating a compelling document that has videos, photos and designs to help the person who's reading has become a really important skillset. That's, I think, a recent change, and an important change, in how teaching needs to get more engaging.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4"></div></div></p><p>Adobe is [also] hyper-focused on how we get processes like Document Cloud or Acrobat into the working operations of schools so that they can be more efficient. We have a product called Adobe Sign where you can now sign documents digitally. This was a huge issue in the pandemic, where if you're a special-needs kid, you have to apply for grants and many were not being given the grants because the parents didn't want to go into school, and schools didn't know how to get to the parents with the physical form. So how do you digitize these workflows? How do you make schools digital to make them more efficient and trackable, but more importantly, provide access, during remote learning?</p><p>Those are the things that are changing and are really important, but I think the big one for me is how creativity comes into the curriculum. STEM is great, computers are pretty good at math and zeros and ones. What computers are not good at is abstract creative thinking and decision-making, and that's where our human creativity comes in, and therefore infusing creativity into the curriculum is really important. Recently the government of India announced that they have officially made STEAM a priority and not just STEM, which is phenomenal. And I think that's really important in the U.S. in particular. I think it's great all the efforts that people are doing around, learning how to code and STEM, all of that's fantastic, but one thing all of us are born with is creative expression. We're trying to help teachers and arm them with information on how bringing creativity into the classroom ups students' success.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5"></div></div></p><p><strong>Has Adobe taken into consideration the digital divide when rethinking the approach to helping students and educators adapt to this new reality?<br></strong></p><p>There's a lot of work Adobe's doing in this area. From an education standpoint, whether it be through our CSR efforts or our education efforts is recognizing where the gaps are. </p><p>On my sabbatical in India, I saw the digital divide in reality. I was working in a school with sixth-graders from kids from very challenged backgrounds. And I realized that, when we gave them [our] software, they could all use it. Kids can do anything, you just have to give them access. We did this really big partnership for the government of India where a million students were given access to our software, to allow them through their schools access so that they could create. We've had this great partnership with National Geographic in the U.S., and they were addressing students from challenged backgrounds and underprivileged backgrounds, giving them access to software, so that they could learn. </p><p><strong>How will these shifts in technology play out when in-person learning can resume?</strong></p><p>The digital divide is one of the things that we are hyper-focused on: getting our software to the web, because the web is accessible from anywhere. We launched Acrobat Web earlier this year, which brings the access of converting your documents and creating PDFs and several such capabilities on the web. We also partnered with Google's "<a href="https://www.theverge.com/2019/10/29/20932848/google-new-shortcuts-domain-register-websites-spotify" target="_blank"><u>.new domain</u></a>," where people can get access to key actions within the Google framework, to make the product more accessible and available. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6"></div></div></p><p>In terms of what happens when COVID goes away, I believe strongly that distance learning is here to stay. Especially in higher ed, it's going to either be dominantly distance learning so people can sort of tune their learning experience, or it'll be hybrid. And self-based learning, [like] what Khan Academy created. The biggest thing that they created was your self-based learning. If I need more time, I need to study in the night, I can do that, but still graduate and learn. </p><p>I [also] don't think that is going away in terms of K-12. I do think that, especially for maybe the K-5 schools, [they] also serve as, to some extent, a daycare. Parents have to go and work, and I do think that in those early years of schooling that we'll probably go back 100% to in-person learning. </p><p>But middle school and high school, I think that there will be a certain percentage of your learning that will happen online. Whether it is through special classes that you want to take, or projects that you might do, this isn't going away. It will, I think, help and aid the learning process. It'll make it more efficient as creativity becomes more ingrained into the curriculum. And they will learn how to use these tools, whether it's video or prototypes or whatever much more naturally, because that's how they'd have to submit their projects, which would prepare them for future employability much better.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7"></div></div></p><p>Education has changed forever. This change has been needed for a really long time. So thank you, COVID, for really pushing this vertical to modernize. It's a bit of an oxymoron. If you think about the students or the kids of this age, they are so digitally savvy, but they were learning in a non-digital way. If you go into work, it's all digital, but these kids were not learning digitally. They were digital outside of the classroom. So it's brought their reality into the classroom, which I think gives education or an opportunity to be more compelling, to be more engaging and preparing these students for the future of work.</p><p><strong>Are there any specific ways that Adobe is developing its softwares to facilitate the shifts in technology? </strong></p><p>Probably the two biggest or most-used platforms after the desktop are people going directly to the web and people on their phones. And so a lot of our new development is in those areas. I mentioned Acrobat [for] web, which is about taking our 30-, 35-year-old developed software, which is incredibly rich, and breaking them down into tasks. So for example, you could use InDesign to create a poster or a flier, or you can use Adobe Spark and just, say, make a flier [from] templates. Adobe is trying to simplify the creation process on these more modern devices and platforms like the web and on your phone. We introduced Photoshop on the iPad about 18 months ago, we introduced Illustrator on the iPad last year, and we had this really fun application, called Fresco. It's a drawing and painting app for your iPad and your phone, and making creation available and accessible on platforms that are more modern and more easily available as opposed to having a desktop. A big old computer with high-end specs is still important for professionals, but our mission [is] to enable creativity for all. Making software accessible [and] workable on the web and on the phone is really important. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8"></div></div></p><p>And the second piece is using our heritage and making that accessible to artificial intelligence, whether it's Spark, whether it's Photoshop Express, Photoshop Camera, which is an application which brought the best of Photoshop effects and made it a single touch for users to create. So it's about how we simplify access to these technologies, to the masses.</p><p><strong>What are your thoughts on apprenticeships? How necessary are they to fill the skills gap in the U.S.?</strong></p><p>Incredibly relevant because, especially if you think about the significance of the gap that we have, the number of jobs that need to be filled, schools can certainly help. I think the creation of all of these alternative education platforms, whether it's the [video courses] of the world, or the other training platforms that are out there [for] certification [are] great and necessary, but apprenticeships, especially for professional work, [are] a really important way for people to learn on the job and start becoming effective on the job rapidly. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="9"></div></div></p><p>Adobe has an apprenticeship program that is a CSR effort we have where we bring some students in [who] want to reinvent their careers or people who are working today and are looking to shift their jobs from backgrounds where they may not have the ability to go and re-educate. It's been a great way to be of service to society, but more importantly, bring in talent, and get them to be successful in the work. And then I do hire them as permanent employees. And these employees tend to be more engaged and more effective, which is great because they're learning on the job.</p> From Your Site Articles

Tom Willerer Investments

1 Investments

Tom Willerer has made 1 investments. Their latest investment was in Flockjay as part of their Seed VC on October 10, 2019.

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Tom Willerer Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

10/1/2019

Seed VC

Flockjay

$3M

Yes

1

Date

10/1/2019

Round

Seed VC

Company

Flockjay

Amount

$3M

New?

Yes

Co-Investors

Sources

1

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