Welcome to Startups Weekly, a fresh, human take on this week’s startup news and trends. To receive this in your inbox, subscribe here.
I first covered Launch House in October 2020, when the co-founders described a strong focus on inclusion when building hacker houses. A co-founder then said, “I wouldn’t say we’re the next Y Combinator, but the next YC would look something like this.” The company quickly raised venture capital for its vision of what a next-generation entrepreneurial ecosystem looks like, combining the benefits of remote working with the growing awareness around “community”. He has earned investment dollars from Andreessen Horowitz, Lightship, CAA co-founder Michael Ovitz, Chris Ovitz of Electric Ant, Mike Dudas of 6th Man Ventures and other angels.
Now, a Vox investigation last week highlighted specific allegations of harassment, sexual assault and abuse of power at Launch House. The answer was complex. The irony with the “build in public” mindset is that when allegations and scrutiny surface, privacy — or at least opacity — is back in fashion.
As TechCrunch reports, some existing investors in the startup and its venture capital fund have released public statements supporting the alleged victims and decrying the alleged behavior described by Vox in its Launch House post. Launch House, meanwhile, confirmed to TechCrunch via a spokesperson that it was launching an independent, third-party investigation through a retained law firm.
A few days after the survey went live, Launch House held a town hall with members of their community. Co-founder Michael Houck said the startup “dropped the ball by responding to this pretty quickly. [and] with enough compassion…this does not reflect the values we have built this community on since day one and hold dear.
“In simpler terms, we absolutely should have met you all earlier than today,” added Houck, “What I can say now is that we are ready to talk and we have a plan. ” The conversation focused on three topics: what Launch House says it has done in the past, what it will do in the future, and how it plans to rebuild trust with female founders in their cohorts.
The Vox investigation, Launch House’s response both publicly and privately, and the community’s outrage or silence over apparent allegations serve as a reminder that community is not a buzzword. It’s a challenge. Some people may view LH as a caricature of the “VC-backed community startups” trend, but it offers a real insight into what happens when these “buzzing trends” meet a bull market, in a distant world, with limited controls. and balances.
For the full story of key private town hall details, read my story: “Launch House is holding private town hall, says investigation underway.” For investor and community reaction, read my story with Rebecca Szkutak, “Launch House Community Responds to Allegations of Misconduct and Harassment.”
In the rest of this newsletter, we talk about Y Combinator’s paranoia, fund manager changes, and a follow-up on one of the pandemic startups admitting it’s wrong. Be sure to read the whole thing as I slipped a TC+ discount code, especially for Startups Weekly readers, into the post.
If you like this newsletter, do me a favor? Forward it to a friend, share it on Twitter, and tag me so I can thank you for reading!
Y Combinator is still paranoid
Michael Seibel of Y Combinator, managing partner and head of the accelerator, is one of the most influential people in startups. He joined Equity to discuss the value of demo day, diversity challenges and competition.
Here’s why it’s important: Since YC no longer does a ton of press, the interview cleared up some misconceptions. More on TechCrunch+ tomorrow, but in the meantime, here’s how he described the usefulness of demo days.
It’s hard for me to generalize about demo days. There are a lot of different demo days around the world, and I’m not sure how they work.
I would say that YC’s Demo Day has two functions. The first is the most obvious, which is: showcasing businesses and generating leads. The second is a coercion function for founders, isn’t it? Just [as] YC does not necessarily need an application deadline. In fact, we read requests throughout the year. But as a forcing function to [say] “Hey, there’s this date that we want to accomplish this thing and it’s important,” [it] really, really helps founders get to top speed faster, as opposed to a more generalized system.
I would say [Demo Day] also helps investors. If I’m an investor and I talk to a company, and I know they’re going to raise [at] Demo Day in a week, maybe I’ll make my decision a little faster. So one of the things we say to founders who come through YC is [that] different companies will leverage Demo Day differently. And that’s okay. It’s a tool and your job is to make the best use of it for your business.
Figma comes out
Adobe bought Figma for $20 billion, reminding us that mergers and acquisitions can indeed happen in 2022. As TC’s Ingrid Lunden reports:
The idea now will be to create a seamless connection between these and Figma, essentially building it as the native platform to bring them all together. Adobe, of course, already had something like this, in the form of AdobeXD. It’s unclear what will happen when this deal closes. Indeed, it will be worth watching if any of this will attract the attention of antitrust authorities: Adobe is already dominant in so many of the tools used, and now it will also be the dominant player in the platform to integrate and provide all of these tools.
Here’s why it matters: Massive acquisitions have a knack for having knock-on effects. In this case, Adobe has just teamed up with one of its biggest digital design rivals. Figma will soon no longer be a private company and therefore won’t have to share its specific finances, and the employees of Figma, supposedly, are going to be a whole new generation of angel investors. There are also many investors who gained from this exit; a homogeneous cluster, another note.
I’m experimenting with a new section in Startups Weekly, where each week we follow an old story or trend to see what’s changed since our first look. This week, we look back at Maven, a creator economy meets edtech game that raised $25 million over two years.
Here’s what’s new: The live learning platform announced a pivot this week. Instead of creating courses taught by creators, it focuses on courses taught by experts. This is another example of, when it comes to running on the community – this time in a learning sense – it can be difficult to run. I appreciated the transparency of what they did wrong and what’s new for the future.
“We had the assumption that a creator with a large audience will have a great course and be able to complete it and we were surprised that assumption was wrong,” Kao said in an interview with TechCrunch. “Just because someone is a creator doesn’t mean they’ll complete a course successfully. Instead, we were seeing tons of smaller instructors who were subject matter experts in their field and didn’t necessarily have a large audience, who wanted to hurry up and put in the effort…who were doing very well on the platform.
Wait for it. Do you see it ? Yes, I’m excited too. And while we’re talking housekeeping, a few more notes:
To thank you for subscribing to Startups Weekly, here’s a little TC+ discount for you: Enter “STARTUPS” at checkout for 15% off your subscription.
Seen on TechCrunch
Codi lands $16 million, led by a16z, to prove we never really liked coworking
Why This Consumer Investor Switched Venture Capital Firms After Partnering Last Year
Most fintechs partner with banks. Varo has become one and says it pays off
Twilio lays off 11% of its staff as it aims for profitability in 2023
Uber is investigating a cybersecurity incident after a hacker breached its internal network
Seen on TechCrunch+
Now that the Ethereum merger is behind us, what’s next?
Pitch Deck Teardown: Helu.io’s $9.8 Million Series A Deck
VC fundraising gets weird as fall approaches
Have you marked up your portfolio yet? You run out of time to hide
And that’s this week’s boot log.