Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends from Senior Reporter and co-host of Equity Natacha Mascarenhas. To get it delivered to your inbox, subscribe here.
To end the year, let’s continue to return to the chronicles that I have written and which have aged, well, curiously. 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 all rolled into one.
Enter the last. Future, Andreessen Horowitz’s official foray into tech media, is shutting down less than two years after it first launched, according to Business Insider. For me, the shutdown is less about a venture capital firm failing to get into the editorial space — the company is still creating a lot of content and even building a new tech and culture podcast as we let’s talk – and more about how the medium is really the message.
The whole appeal of going straight as a founder and venture capitalist is built around assumptions. First, that you have something important to say. Second, you must believe that you can present this content convincingly and consistently. And third, perhaps most important of all, your important, well-presented content needs to find an audience that trusts it.
It’s one of the many reasons why media is a tough business, and one of the reasons why I’m not surprised to see Future shut down (despite the fact that the venture capital firm could, presumably, continue to fund a version). Some think there was a clear advantage to the business having a domicile to host smart content about its portfolio companiesbut just because something makes sense doesn’t mean it has the impact an institution hopes for.
A16z has earned a reputation as a service-oriented company. To me, the story is less than a venture capital firm with billions in assets under management failed in a brave experiment. Rather, it’s that, in their pursuit of accelerator, discovery engine, content marketer, and check writer, organizations are teaching us in real time what translates and what doesn’t.
We often think of venture capital networks in a conflict of interest type opening – and there’s more to come from that angle in the coming weeks. But this week, I reflect on how the intertwining of different trends, themes and products evolves along with the priorities.
You can find me on Twitter, Substack, and Instagram, where I post more of my words and work. In the rest of this newsletter, we’ll talk about management turnover, red flags and good news.
Executive turnover and the art of conflict
The tech job market has certainly raised many questions about the stability of certain sectors and roles — and whether growth can protect a company from layoffs. The big news this week is that Bret Taylor has stepped down as Co-Chairman and CEO of Salesforce, a month after he lost his position as Chairman of the Board of Twitter after Elon Musk bought the platform from social media.
But that’s not the only kerfuffle in town this week.
This week, DoorDash and Kraken reduced some of their workforces. BloomTech, formerly known as Lambda School, has halved its workforce in its third layoff since the pandemic began. And on Friday, Opendoor CEO Eric Wu stepped down, to be replaced by CFO Carrie Wheeler. Turnover is everywhere, voluntary and involuntary, which makes me think a lot about the second-order consequences.
Here’s why it 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 we’re seeing, whether it’s layoffs or new management, means that people are coming in to once again create homogeneity in their businesses.
So they lay off, and they eliminate all the complexity. They cut off parts of the organization that have created friction. And this friction is essentially what makes multicultural institutions more effective because they ask different kinds of questions. But many incoming leaders lack the stature needed to run a multicultural organization or business. And because they don’t have the range for that, they just cut it. Second, it creates homogeneity because that’s what makes a group of leaders comfortable right now. And we’re going to need leadership that’s much more comfortable with complexity.
Are red flags really that hard to spot?
Equity also unpacked the latest blog post written by famed venture capitalist Bill Gurley – in which he lists red flags investors should watch out for when investing in startups. As you can tell by our episode title, we definitely had some thoughts.
Here’s why it matters:While I totally agree with pointing out explicit mistakes that budding investors should avoid, Gurley’s post missed a key point – namely that many investors know how to identify red flags, they simply choose to ignore them in pursuit of “the outlier”. What will actually prevent investors from backing the next FTX is creating an environment where conflict takes precedence over groupthink.
[Insert good news here]
It’s officially that time of year, and part of the news cycle, where I’m desperate for good news to highlight.
Here’s what made me smile this week:
A few comments
Seen on TechCrunch
San Francisco police can now use robots to kill
Elon Musk suspends Kanye West’s account for breaking Twitter rules
LastPass says it was breached – again
Instafest app lets you create your own festival lineup from Spotify
Here’s everything AWS announced in its re:Invent data keynote
Seen on TechCrunch+
Box hits $1 billion run rate despite quarter plagued by currency issues
ChatGPT doesn’t put me out of work yet, but it’s a lot of fun
Startup valuations are falling, but not steadily
Proptech in review: 3 investors explain why they’re bullish on tech that makes buildings greener
As BlockFi Files For Bankruptcy, How Contagious Will FTX’s Downfall Become?
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