How will the startups created in 2020 be different from startups built before?

Co-founder of LinkedIn and general partner at Greylock
The class of 2020 startups will be unique in two ways: 1) the massive shift in market readiness, and 2) nearly every founding team will be distributed.
The pandemic has set certain markets back (e.g. coworking spaces), but it has also created the conditions for other markets to take a giant leap forward. A specific example: telehealth startups. While the majority of health visits have now moved to video calls, the implications go well beyond a simple shift in delivery mechanism.
Moreover, older adults represent a large proportion of patients, and an even larger proportion of market power. Not previously early adopters of telemedicine, older adults are now developing what is likely to be a lasting habit, accelerating the industry adoption cycle by several decades. This will speed up the deployment of new technologies such as AI and machine learning to make diagnoses via smartphone imaging, or to extract information from doctor-patient interactions and improve follow-up and follow-through. And while the pandemic will eventually recede, we will see a permanent change in how we access health care.
Another impact for the class of 2020: All founding teams will be distributed. Previously, most founding teams coalesced in a specific place, but there isn't much social distancing in a garage! Teams that want to build world-changing products together will need better ways to communicate. It will be more difficult — and more important than ever — that co-founders find ways to quickly connect and align. And when people are sheltering-in-place, the geographic density of talent in Silicon Valley is much less relevant. The techniques that Silicon Valley uses to scale companies, such as Blitzscaling, can be learned and practiced by anyone. The next generation's big winner could be based anywhere with sufficient access to financial capital and virtual access to technological expertise.
Co-founding partner at Floodgate
Managing partner at Forerunner Ventures
This year has exposed so many important issues, including the crisis of COVID and the deeply important and impactful work of Black Lives Matter. Because these long overdue issues have surfaced and cracked the outdated veneer of status quo, this breakthrough class of startups will be reevaluating long-held business values and instead lead with compassion to make a real social impact.
These new startups are likely to be more purpose-driven with regards to their missions, business impact and cultures. The ones that capture our attention will be built around solving customer needs versus desires; they will prioritize sustainability practices and be hyper aware of their overall footprint on the planet; and importantly, they will be building diverse teams with inclusive practices. These startups won't be afraid of having important and often difficult or uncomfortable conversations and will understand their ability to influence for good.
In terms of operating, because of the pandemic, millions of workers experimented with working from home for the first time in their careers. And given that many tech companies have already mandated work-from-home until 2021 (Twitter, Google, Microsoft), many others will likely follow suit. As we continue to adapt to remote work, employees are operating within different frameworks, and companies will need to reimagine new ways to foster bonds and build strong team dynamics, especially from the top down.
In the face of unknowns and unimaginable hurdles to growing a business, flexibility and the fortitude to make swift changes will be more essential than ever for founders. Founders set expectations on growth, and it's their responsibility to build teams that can deliver on those visions, but now more than ever they have to have the adaptability to react to and ensure solid foundations for achieving considered growth and recalibrating their businesses for ever-changing environments. Resilience is the key word here.
Venture Partner at NextGen VP
We've left the pre-COVID world, where companies can easily raise millions amid major money losses and ignore human and social dynamics. New startups will be molded by the implications of COVID and the social and racial justice movement.
Startups will be remote-first to preempt health issues and avoid unnecessary real estate costs. Startups will focus on problems that affect the many and not just the elite few because of the work-life challenges that COVID has brought about (e.g., job loss, WFH). Startups will bootstrap, prioritize revenue, profit and performance more than ever. Because of the tightening of purse strings, startups will prompt side-hustling entrepreneurs looking for extra cash. This new breed of entrepreneur will create products and services (a la passion economy) and generate additional revenue streams.
From a social and racial justice movement perspective, startups with underestimated founding teams will get their moment to shine with capital coming their way from the VC and tech ecosystem that is putting their money where their mouth is (e.g. a16z's Talent x Opportunity Fund, SoftBank's Opportunity Growth Fund, Google investing $100 million in underestimated founders and funds).
Funding will come from a more diverse set of vehicles, from alternative VC funds to equity crowdfunding, to debt to newly activated diverse angels. Underestimated founders will build the companies of the future — ones that represent the diversity of our population and produce the products and services that the mass market sorely needs.
Partner at First Round Capital
The national conversation around race and equality is creating a renewed emphasis on the importance of diversity in the startup and venture ecosystem. I'm hopeful that this much-needed and long overdue pressure — on both the startups being built and the investors tasked with backing them — will result in a more diverse class of founders than ever before.
Founders are taking a hard look at the composition of their founding teams, their cap tables, their board rooms, and their early hires — and will be less willing to let "diversity debt" accrue as the costs are impossible to ignore. As investors, we have a tremendous amount of work to do here. That work consists of 1) acknowledging and dismantling the bias within narrow "traditional" founder archetypes, 2) putting in the legwork and process changes it will take to back more founders of different backgrounds, and 3) pushing ourselves and the companies we back to build more inclusive organizations that are more representative of the country that we live in.
Whether it's fully remote or some kind of hybrid model, we're also seeing a broader shift toward both distributed workforces and distributed systems. We're noticing that companies in our community are increasingly opting to buy rather than build, and we expect to see developer focused API services proliferate. We're excited about this trend because it empowers new companies to focus as much as possible on their core product and creates a new category of developer focused companies for us to partner with as investors.
Finally, the growth-at-all-costs mentality is becoming more muted in the 2020 startups. We are seeing a shift from a "tell me the story" fundraising environment to a "show me the proof" fundraising environment. Conversations around contribution margins and unit economics are starting much earlier on in a company's life. We think businesses without a very strong economic engine will face challenges when they go to raise money this year, and the class of 2020 founders will take this into account when balancing growth vs. profitability.
Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.
Apple store workers in Atlanta were reportedly intimidated out of hosting a union election, according to Bloomberg.
The Communications Workers of America, the group that was looking to unionize Apple store employees in Atlanta, said that it withdrew its election application to the National Labor Relations Board "because Apple’s repeated violations of the National Labor Relations Act have made a free and fair election impossible." The group also told Bloomberg that numerous cases of Covid-19 in the city’s Cumberland Mall Apple store have caused issues with the safety of in-person voting.
“Apple has conducted a systematic, sophisticated campaign to intimidate them and interfere with their right to form a union,” the CWA alleged in an email to Bloomberg. The group said they had support from the “overwhelming majority” of the Atlanta store’s workers when originally petitioning.
Because the group withdrew its request to the NLRB to hold an election, it has to wait six months before filing again to represent the same group of workers.
Apple told Bloomberg that the company is "fortunate to have incredible retail team members and we deeply value everything they bring to Apple.”
The news follows Apple increasing its starting hourly wage from $20 to $22 an hour for retail workers while reportedly telling workers that if they unionize, the company may have more difficulty improving worker conditions.
In a leaked video sent to Apple's 58,000 retail employees earlier this week, Apple's Vice President of Retail Deirdre O'Brien said that "because the union would bring its own legally mandated rules that would determine how we work through issues, it could make it harder for us to act swiftly to address things that you raise.”
Atlanta workers first filed a petition to unionize in late April, with around 70% of the store's workers signing cards in support of the election. The group aimed to raise wages to $28 per hour, along with other benefits. They had been slated to hold their election from June 2 through June 4.
Apple retail workers in Louisville, New York City and Towson, Maryland still have plans to unionize as of Friday, though Apple retail workers have not won a union election at any of the company's 272 U.S. retail stores.
A draft of a major crypto bill from Sens. Cynthia Lummis and Kirsten Gillibrand seeks to add more clarity to crypto regulation, and appears to propose a far bigger role for the Commodity Futures Trading Commission.
A draft of the widely anticipated bipartisan bill, reported by the Block, a crypto news site, would give the CFTC a wide remit over digital assets. It reads in part: "Except as otherwise provided by this section, the Commission shall have exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital asset that is offered, solicited, traded, executed, or otherwise dealt in interstate commerce, including market activities relating to ancillary assets."
The CFTC already oversees crypto derivatives, and the agency has pushed for more resources to regulate digital assets in recent budget requests.
The draft language also defines crypto entities such as “digital asset,” “distributed ledger technology,” “smart contract,” “payment stablecoin” and “virtual currency."
Providing a more regulatory definition of crypto, the proposal also defines "ancillary assets" as "an intangible asset that is offered, sold, or otherwise provided to a person in connection with the purchase and sale of a security through an arrangement or scheme that constitutes an investment contract, as that term is used in section 2(a)(1) of the Securities Act of 1933."
The draft bill, expected to be formally introduced in the coming weeks, also details areas of responsibility for crypto that would fall under other agencies such as the Securities and Exchange Commission.
The language assigning primary responsibility to the CFTC matches other reports about the forthcoming bill, expected to be called the Responsible Financial Innovation Act.
Lummis, a senator from Wyoming, has been outspoken on crypto. She and Gillibrand recently appeared on stage together at the D.C. Blockchain Summit to discuss the planned legislation, where Gillibrand said she expected a Senate vote on the bill "next year at the latest."
While the crypto industry has been lobbying for a variety of approaches to regulating digital assets, giving more responsibility to the CFTC and minimizing the SEC's role is a common theme in many proposals.
The SEC would like Elon Musk to explain himself. In a letter the agency sent Musk last month, released Friday, a top SEC lawyer asked pointed questions about filings Musk made about his growing stake in Twitter.
The questions centered on straightforward violations of SEC rules that were readily apparent from the time Musk made filings in April revealing he had accumulated a large stake in Twitter.
SEC senior special counsel Nicholas Panos asked:
It is not clear why Musk delayed his initial filing, but the delay allowed him to accumulate more shares of Twitter at a lower price than he would otherwise have paid. That omission has already prompted a shareholder lawsuit against him.
It is likewise not clear how Musk could credibly claim that he didn't intend to change, influence or control Twitter. In the letter, Panos noted his tweets about Twitter's speech-moderation policies, which came as he was quietly accumulating his stake. Twitter has likewise documented extensive conversations between Musk and company officials in March and April as he was buying shares.
The Tesla CEO and the SEC have sparred before, and he is currently bound by a settlement requiring him to have designated officials at the electric car maker vet potentially market-moving tweets about the company before he posts them. Musk has sought to undo that settlement, but a judge recently ruled against him.
The letter's publication confirmed earlier reports that the SEC planned to investigate how Musk accumulated his Twitter stake in the run-up to his striking a deal to buy the company. Panos copied Heidi Steele, a lawyer at McDermott Will & Emery, a firm Musk hired to advise him on the Twitter takeover.
Twitter will not accept the resignation of Egon Durban, a close ally of Elon Musk, from his position on its board, the company said in a filing on Friday.
Shareholders voted to boot Durban from Twitter's board at the company's annual meeting on Wednesday. Durban is to co-CEO of Silver Lake, a venture capital firm that is helping put together Musk's $44 billion takeover of Twitter, according to Reuters. Silver Lake is also an investor in Twitter.
Durban tendered his resignation after shareholders voted to not re-elect him on Wednesday. Twitter is required to have a Silver Lake representative on its board, though it doesn't need to be a partner or employee of the firm.
Durban played a critical early role in connecting Musk with other Twitter board members as Musk and the company discussed his growing stake. Durban also helped Musk attempt to take Tesla private back in 2018 (which didn't work out).
Jack Dorsey, who stepped down from the board at the same shareholders meeting, also played a huge role in those early Twitter takeover conversations.
The shareholders took the recommendation of shareholders advisement boards to not reelect Durban due to the fact that he also serves on six other boards. Because Twitter doesn't want to have to replace him, Durban committed to step down from one of those six boards by May 25, 2023.
Almost 40% of DoorDash’s new U.S. hires last year were either Black or Latino, the company revealed Thursday in its 2021 diversity report. But few of those hires joined in technical roles, where DoorDash’s numbers lag behind companies like Uber and Lyft.
With the influx of underrepresented hires, DoorDash now says that 36% of its U.S. workforce is from an underrepresented background, a list that includes Black or African American, Hispanic or Latino, multiracial, American Indian/Alaska Native and Native Hawaiian or other Pacific Islander employees.
But employees from underrepresented ethnic groups are still few and far between in director-level roles and above (11%) and technical positions. Underrepresented employees make up just 7% of DoorDash’s technical workforce, lagging behind Uber at 13% and 11.6% at Lyft. DoorDash said it plans to increase that 7% number to 10% by 2025, and to increase the percentage of underrepresented people in leadership roles to 20% by 2025.
DoorDash doesn’t break out the job functions of its new hires, but at Uber, Black employees made up the largest group of new hires for support roles last year. Almost 49% of new support hires at Uber identified as Black. (24.3% of Uber’s new hires in all roles last year were Black or Latino.)
DoorDash touted that 19% of its people managers are from underrepresented ethnic groups — an increase of six percentage points from 2020 — and 46% of its new hires were from underrepresented groups, a 12-percentage-point increase from the year before. The company didn’t list its attrition rate by race, but in its first ESG report released last month, DoorDash pointed to a 91% one-year retention rate associated with its diversity-focused Elevate leadership program.
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