Welcome to Startups Weekly, a nuanced look at this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. Subscribe here to receive it in your inbox.
To close out the year, let’s go back to the columns I wrote that are, well, interestingly out of date. In July I wrote about how Y Combinator builds a Product Hunt, Product Hunt builds an Andreessen Horowitz, and Andreessen Horowitz builds a Y Combinator. It was a not-so-subtle nod to how top institutions try to be accelerators, discovery engines, content marketers, and check writers rolled into one.
Enter the last. Future, Andreessen Horowitz’s formal foray into tech media, ends less than two years after its initial launch, said Business Insider. To me, the closure isn’t so much about a company not jumping into the editorial space — the company is still creating content and even building a new podcast on technology and culture right now — and more about how the medium really the message.
The whole appeal of going direct as a founder and venture capitalist is based on assumptions. First, that you have something important to say. Second, you have to believe that you can consistently package that content in a compelling way. And third, perhaps most importantly, your important, well-packaged content must find an audience that trusts it.
It’s one of the many reasons media is a hard business, and one of the reasons I’m not surprised Future is closing (despite the fact that the venture firm could presumably continue to fund some version of it). Some think it was a clear advantage that the company had a home to house smart content on its portfolio companiesbut just because something makes sense doesn’t mean it has the impact an institution hopes for.
A16z has built a reputation as a service-oriented company. To me, the story is less that a venture capital firm with billions in assets under management failed in a courageous experiment. It’s more that organizations, in their pursuit to be an accelerator, discovery engine, content marketer, and check writer, teach us in real time what translates and what doesn’t.
We often think of venture capital’s webs in a conflict-of-interest-type opening — and there’s more to come on that angle in the coming weeks. But this week has me thinking about how the intertwining of different trends, themes and products is also shifting as priorities.
Executive turnover and the art of conflict
The tech job market has certainly raised many questions about the stability of certain industries and roles – and whether growth can protect a company from layoffs. The big news this week was that Bret Taylor stepped down from his position as Co-Chairman and CEO at Salesforce, a month after losing his job as CEO of Twitter after Elon Musk bought the social media platform.
But that’s not the only kerfuffle in town this week.
This week, DoorDash and Kraken cut parts of their workforce. BloomTech, formerly known as Lambda School, has laid off half its staff in its third layoff since the pandemic began. And on Friday, Opendoor CEO Eric Wu stepped down and was succeeded by CFO Carrie Wheeler. Turnover is everywhere, both voluntary and involuntary, which makes me think a lot about second-order consequences.
Here’s why this matters, via Karla Monterroso, CEO of Brava Leaders:
We are at the beginning of creating what multicultural institutions will look like and how they will work. I think a lot of the turnover that we’re seeing, whether it’s layoffs or the new management, means people are coming in to recreate homogeneity in their businesses.
So, they’re resigning, and they’re taking out all the complexity. They cut off the parts of the organization that caused friction. And that friction is essentially what makes multicultural institutions more effective because they ask different kinds of questions. But many of the leaders who come in don’t have the scope to run a multicultural organization or company. And because they don’t have the range for it, they just cut it out. Then that ensures homogeneity, because that is what makes a group of leaders comfortable at the moment. And we need leadership that is actually much more comfortable with complexity.
Are red flags really that hard to spot?
Equity has also unpacked the latest blog post written by famed venture capitalist Bill Gurley in which he lists the red flags investors should look out for when investing in startups. As you might be able to tell from the episode title, we definitely had thoughts.
Here’s why this is important: While I’m all for highlighting explicit mistakes that novice investors should avoid, Gurley’s post missed an important point – which is that many investors do know how to identify red flags, they simply choose to ignore them in the chasing “the outlier”. In fact, what will keep investors from supporting the next FTX is creating an environment where conflict is prioritized over groupthink.
[Insert good news here]
We’re officially that time of year and part of the news cycle, where I’m desperate for some good news to highlight.
Here’s what made me smile this week:
A few notes
Seen on businesskinda.com
San Francisco police can now use robots to kill
Elon Musk suspends Kanye West’s account for violating Twitter rules
LastPass says it has been breached – again
With the Instafest app you can put together your own festival lineup from Spotify
Here’s everything AWS announced in its re:Invent data keynote
Seen on businesskinda.com+
Box hits a $1 billion run rate despite a quarter dogged by currency challenges
ChatGPT won’t put me out of work yet, but it’s a lot of fun
Startup valuations are falling, but not consistently
Proptech in Review: 3 investors explain why they are optimistic about technology that makes buildings greener
How contagious will FTX’s demise become as BlockFi files for bankruptcy?
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