Welcome to Startups Weekly, a new take on this week’s start and startup trends. To get this in your inbox, subscribe here.
A multi-billion dollar takeover, IPO projections and good old VC and billionaire drama?
It would be unfair to say that this week in tech and startups felt like the 2021 boom cycle; especially when you look at layoffs coming from Truepill, its fourth this year, and Meta announcing it will freeze hiring. At the same time, it feels like a new feeling is in the air. Heck, NFT marketplaces are still raising money.
The market is not dull, but not noisy; and the mood among my sources is certainly more ghostly than wild. Besides the fact that, yes, I grew up writing poetry about fall foliage before deciding I wanted to be a journalist, I say all this to validate the nuance of this moment.
The ideas I’m looking forward to before the end of the year are as follows:
- What happened to the black swan’s memos? Early in the economic downturn, investors turned to portfolio companies to warn of an increasingly volatile environment. That conversation hasn’t gone away, but it’s certainly quieted down as many investors tell me that a super wave of financing is on the way. So, what’s the new guideline being sent to portfolio companies?
- What is the human side of the layoff story? My colleagues Mary Ann and Christine taught us all an important lesson this week, which is that stories of staff reductions should not revolve around the employer. The duo wrote about the human cost of Better.com’s layoffs — full story here — and I’m not going to steal this idea so subtly. I want to talk to people affected by the tech layoff in 2022 and hear what the next steps look like. I hear it’s a lot more complicated than “you should have known your business was overhyped to begin with.”
- Finally, what are startups preparing to do it really differently? I’m guilty of this, but we often talk about startups and technology with generalizations, somewhat covered up by explaining that it’s useful for directional purposes. I want to know what startups have learned this year and are doing tactically differently. Expenditures with more discipline or focus on the product do not count; give me details, and better yet, tell me what you disagree with your investors about.
Let me know yours by tweeting at me or respond to this message. If you missed last week’s newsletter, read it here: “Tiger Global, fickle controls and the difficulty of acceleration.” We’ve also included an accompanying podcast, here, “Building Startups in Public Has an End Date.”
In today’s newsletter we’ll talk about the beauty of pivots, a creative way to prove your startup is hiring entrepreneurial people, and the latest news from 500 worldwide.
If you like this newsletter, will you do me a quick favor? Forward to a friend, share on Twitter and tag me so I can thank you for reading for yourself!
A reminder that pivots work
TC’s Rebecca Szkutak wrote about how a pivot helped HopSkipDrive win a tough pitch for parents: Trust your kids with our ride-sharing services.
Here’s why it’s important: As we discussed in our latest Equity podcast, sometimes we are all just a Hop, Skip and a Drive away from success. The “Uber for X” model has been MIA for a few years now, so the story behind HopSkipDrive and its trusted partner stands out to me. Who said schools weren’t experimental!
Image Credits: Ivan Bajici (Opens in a new window) / Getty Images
Another version of CVC I guess
This week, news broke that Cloudflare was raising $1.25 billion in funding for startups using its own platform. Kind of.
Here’s why it’s important: The security, performance and reliability company has not established a corporate venture fund, which is typical of other companies looking to grab the attention of entrepreneurs. Instead, Cloudflare just got dozens of venture companies to offer to invest up to $1.25 billion worth of companies in their existing funds. It’s a bit softer than a traditional investment vehicle, given that we don’t know how formal those offers of support are, and the fact that Cloudflare doesn’t provide funding or make funding decisions.
To me, the dedication just tells us that Cloudflare wants to show startups that it doesn’t just make sense to use their software, it makes pennies.
Image Credits: Getty Images
The sequel
I’m experimenting with a new section in Startups Weekly where we follow an old story or trend every week to see what has changed since our first look. This week we continue our talk about accelerator and demo days with a look at what 500 Global, formerly 500 Startups, thinks.
Here’s what’s new: It’s been a little over a year since accelerator rebranded 500 Startups as 500 Global in an effort to reposition itself as a venture company. In my last for ukbusinessupdates.com+, I spoke with Clayton Bryan, partner and head of 500 Global’s accelerator program, about how they keep up with the competition. Excerpt below!
The investor emphasized the effectiveness of rolling admissions, which its two main accelerator competitors, Y Combinator and Techstars, fail to do. Three years ago, 500 Global said it would decide on investments all year instead of just twice a year. Demo Days will still take place every two years, but startups can choose which Demo Day they want to participate in.
“That change has really resonated with the founders,” Bryan said. He compared the previous version of 500 Global to a school with a yearly schedule: there are times when you do homework, times when you sit back and recruit, and summer vacations. Now it’s year-round, and he admits it’s harder to manage, “but at the same time much more valued by the founders.”
“I think it makes us more competitive,” he said. “We can talk to founders more often and they can start our program at different times. They don’t have to wait for that application to open or that deadline. While [with] With some other programs, they might say, “Hey, wait a few more months and we’ll be accepting applications again.” I think openness and flexibility gives us a small advantage.”
Image Credits: bestdesigns/Getty Images
A few notes
We’re less than a month away from ukbusinessupdates.com Disrupt and I’m already emotional. It will be a blast, a pep talk, a realization and a week not to be missed. Here is the full agenda and here you can buy your tickets.
- First use the code “STARTUPS” for a special reader discount for Disrupt tickets. We’re less than a month away!
- We also have a special for people affected by layoffs. If you’re fired, go here to get a free ticket to ukbusinessupdates.com Disrupt’s Expo.
While I have you, let’s talk some more. As you know, I co-host Equity, which goes out three times a week and is TC’s longest-running podcast. We also have some besties to listen to, including our crypto-focused show going through Chain Reaction and the founder-focused show going through Found. The ukbusinessupdates.com Podcast should not be missing either, so watch all the good shows they put out.
Seen on ukbusinessupdates.com
Here are some of the creepiest revelations in Elon Musk’s text dump
Why build another fintech when you can just raise €20 million and white label it to banks?
Instagram permanently disabled Pornhub’s account
EV charging deals keep coming, Ford is squeezed by shortages and Kitty Hawk shuts down
Nexo crypto platform sued by New York, California and six other US regulators
Seen on ukbusinessupdates.com+
Treepz founder Onyeka Akumah on how to succeed in transportation technology
What can the dotcom crash in 2000 teach us about the tech downturn of 2022?
Europe’s inaugural Women in VC Summit is the first step in a long climb to equality
Venture investors are slowing down productivity software
Same time, same webpage, next week?
Image Credits: Bryce Durbin / ukbusinessupdates.com
