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Schools Clamored for Seesaw. That Was the Good News, and the Bad News.

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The first requests that upended Seesaw, a popular classroom app, came in January from teachers and education officials abroad. Their schools were shutting down because of the coronavirus, and they urgently wanted the app adjusted for remote learning. The company figured it could do that with a single short hackathon project.

“We were so naïve,” said Emily Voigtlander Seliger, a Seesaw product manager.

Weeks later, reality hit: The virus spread to the United States, where more of the app’s users are. Seesaw had been designed for students in a classroom to submit an audio comment or a digital drawing after a lesson. But thousands of teachers suddenly wanted it to work as a full-featured home learning tool. Rather than using Seesaw for a couple of assignments a week, they were using it for hours each day.

It seemed like every start-up’s dream: racing to keep up with demand from people desperate for your app.

And in many ways, that has worked out well for Seesaw, a San Francisco company. The number of student posts on its app increased tenfold from February to May, Seesaw says, and the paid customer base has tripled from last year. The app is now used in more than three-quarters of American schools, including big districts like Dallas and Los Angeles.

“In a matter of two days the world flipped upside down,” said Victoria Lawyer, global sales manager at Seesaw. Seesaw usually pitched large districts for six months or so before one signed up. Suddenly, she said, those districts were saying: “We need to get set up by tomorrow. What can you do?”

But Seesaw’s experience also shows the kinds of hurdles that a company must jump in such extreme circumstances, going through years’ worth of growing pains in a few months.

ImageA screenshot of the app, whose use increased tenfold during the first few months of the pandemic.
Credit…Seesaw

Other digital education products, like Zoom and Google Classroom, experienced similar growth spurts and ran into their own problems — such as unwelcome strangers who dropped into those early weeks of Zoom school. But they are public companies with resources to spare. Seesaw had just 60 employees in February, when the coronavirus hit the United States, and was trying to prove that it deserved a tryout for the big leagues.

Small issues that the company knew about but hadn’t addressed before the pandemic became significant problems. Teachers begged for app reliability, but some changes Seesaw made for at-home use didn’t always work smoothly. While Seesaw executives wanted the app to be interesting for students, it had to be streamlined enough for frazzled parents suddenly running at-home school.

All this happened while Seesaw, like many other companies, closed its headquarters and shifted employees to working from home, where many juggled their work with their own children’s classes.

Credit…Jim Wilson/The New York Times

“We’re going through what everyone else is going through in terms of balancing child care and home-schooling and working from home,” Carl Sjogreen, one of the company’s founders, said. “The intensity of the growth in our business at the same time is a challenge and a struggle.”

Mr. Sjogreen, 42, and Seesaw’s other founder, Adrian Graham, 41, first met at Google in the early 2000s. They left, founded a travel-advice start-up and moved to Facebook as product managers when it acquired their company. In 2012, they left Facebook and started Shadow Puppet, an app that lets people make videos by adding voice-overs to photos and other social media.

They thought Shadow Puppet was almost embarrassingly simple. But the app proved popular with teachers, and it led to the idea for Seesaw.

In the fall of 2014, teachers trying out an early version of Seesaw reported back with comments that surprised the founders, Mr. Graham said. Some students opened up once they had an audio recorder, the teachers said, and some who might not be great writers — and didn’t seem that engaged as a result — made lively videos or digital drawings once those became an option.

In January 2015, Seesaw released the app to the public. It’s free for individual teachers, with a features-added version for schools and districts for $5.50 per student per year. The founders took seed funding when starting the company, and $8 million more from investors in 2017. Mr. Sjogreen declined to give valuation or revenue figures, but said the company would be profitable this year.

And it’s been a year. In February, Mr. Sjogreen was mapping out long-term projects from Seesaw’s downtown San Francisco office. Come March, he was working from his Noe Valley house, juggling home-school duties for his 9- and 12-year-old children, just like many of the employees, and Seesaw was in “rapid-response mode,” as he put it.

Teachers like Sharmeen Moosa, a first-grade teacher at an international school in Bahrain, decided Seesaw would be their remote-learning platform.

“Prior to Covid, I used it as just a digital portfolio for kids,” an online collection of their drawings and recordings, Ms. Moosa said, but when her school closed in February, her use “transformed massively.” She used the app for morning messages and daily lessons, adding audio or video clips, posting additional resources, and creating student assignments along with communicating with families.

Many other teachers used the app in similar ways, exposing shortfalls that the company had to race to fix.

The app, designed to work with iPads and Chromebooks, had hardly been used with Android tablets. But now parents were logging on with Amazon Fire or Samsung devices running Android. Numerous students didn’t have email addresses and needed a different way to log in from home. Teachers, who could no longer look over students’ shoulders while they worked on an assignment, wanted to comment on saved drafts before students submitted a final version. Notification delays grew from a couple of seconds to hours. The company’s servers sometimes slowed to a crawl.

Those issues meant teachers, families and schools all fired questions at Seesaw for help. Mr. Sjogreen, who prided himself on getting back to customers almost immediately, found that just wasn’t possible.

“I’m sad that during a time where they were so stressed out, we were not as responsive as we would like to be,” he said.

Internally, the company had to figure out how to handle a remote work force that was also, in many cases, dealing with added responsibilities at home. Many employees needed time off at peak hours to handle their children. While being interviewed for this article, Mr. Graham bounced his baby girl in a Snugli, while Mr. Sjogreen was interrupted by his son, who asked for permission to go on YouTube. (Mr. Sjogreen nodded, resigned.)

Seesaw tried to accommodate employees’ schedules and child care demands, and even added a remote yoga session on Tuesday mornings to clear heads, “but I’d be lying if I said it was easy,” Mr. Sjogreen said.

Mr. Sjogreen said he had gotten a good idea for Seesaw from his 9-year-old, who uses it at his school. While working from home, Mr. Sjogreen heard “tears, frustration” from his son, who had accidentally deleted work completed on the app. The company added a button to confirm deletion — Mr. Sjogreen suggested an icon of a crying child to accompany it.

Credit…Ilana Panich-Linsman for The New York Times

To prepare for the fall semester, Seesaw added 15 full-time employees and 100 contractors to help with customer support. The app kept adding features: Teachers said students didn’t know what to work on first, so the company let teachers designate priority assignments and let students see which assignments were done. Assignments can now be filtered by topic, like math or Spanish. Users can print posts, and students and teachers can add multiple videos on a single post so teachers can conduct long lessons.

Jennifer Montemayor, a teacher at Bulverde Creek Elementary School in San Antonio, has kindergartners in her remote class who speak Vietnamese, Spanish, Persian or Russian at home. She loves how Seesaw translates her class announcements and assignments into languages the parents can understand.

A Seesaw enthusiast, Ms. Montemayor is finding fewer people to proselytize to these days. “Everybody knows Seesaw now,” she said.

Whether Seesaw can hold on to customers when schools, many of them facing new budget pressures, return to in-person learning is an open question. Kelly Calhoun Williams, an education analyst at the research company Gartner, said that while other ed-tech companies got nervous watching school budgets shrink, Seesaw was well placed because of its users’ “I want to keep Seesaw because now it’s part of my day” attitude.

Mr. Sjogreen said he was just looking for a chance to get back to some long-term planning.

“I never thought I’d say this as a start-up founder,” he said, “but I’m not worried about growth anymore.”

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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