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 Because these long overdue issues have surfaced and cracked the outdated veneer of status quo, this breakthrough class of startups will be reevaluating long-held business values and instead lead with compassion to make a real social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.
A California judge ruled that the sexual harassment case against Tesla can continue in court, despite the fact that the worker who brought the case had previously signed an arbitration agreement giving up her right to sue.
President Joe Biden in March signed into federal law a ban preventing employers from forcing sexual harassment cases into arbitration, but as Bloomberg noted, the law doesn't apply to arbitration agreements signed before it took effect. Alameda County Superior Court Judge Stephen Kaus on Monday denied Tesla's request to bring the case to arbitration, though he didn't provide a reason.
The proposed class-action complaint filed by former Tesla night-shift worker Jessica Barraza in November alleges that female employees experience “rampant sexual harassment” in its Fremont, Calif., factory. She described her experience working in the factory as “nightmarish,” and claimed she experienced repeated inappropriate comments with no help from supervisors or the company's human resources department.
Barraza's case is one of at least seven lawsuits that female employees at Tesla have filed alleging sexual harassment.
The allegations of sexual harassment at Tesla are timely, given that allegations accusing Elon Musk of sexual misconduct recently came to light. A former SpaceX flight attendant accused Musk of exposing himself to her and touching her inappropriately, Business Insider reported. Musk has denied the claims, and SpaceX COO and President Gwynne Shotwell told SpaceX employees in an email last week that she believes the allegations are false.
Tesla is also facing allegations of racial discrimination, with complaints alleging that the Fremont factory is a "racially segregated workplace." The California Department of Fair Employment and Housing sued Tesla in February for complaints that the company's Black workers were "subjected to racial slurs" and discriminated against in job assignments, pay and other areas of work. In April, Tesla asked a judge to delay the lawsuit for 120 days.
Startups that soared throughout the pandemic are now feeling the crunch, and on-demand grocery company Gorillas is the latest victim. The company announced Tuesday that it's laying off half its corporate staff, or about 300 employees around the world.
"Two months ago in March, the markets turned upside down, and since then the situation has continued to worsen," Gorilla co-founder and CEO Kagan Sumer said in a message to staff. "Very rapidly, greed in the markets was replaced with cautiousness. And tech companies, especially low or negative margin tech companies, are facing a very strong headwind."
Gorillas also employs roughly 14,400 warehouse and delivery drivers, The Verge reported. For those impacted by the layoffs, Gorillas said it has "identified ways to ensure that everyone is supported financially."
The company said it will narrow its focus on the five markets where it makes 90% of its revenue: Germany, France, the U.K., Netherlands and the U.S. It's also considering expanding into Italy, Spain, Denmark and Belgium.
The layoffs signal a broader trend that grocery delivery demand may be slowing as pandemic restrictions are lifted.
Gorillas, which Sumer started in May 2020, promises to deliver groceries in as quickly as 10 minutes — a business model that seems pretty unsustainable — and unprofitable. The company is competing with major delivery businesses like Instacart, Amazon and Gopuff for a customer base whose demand for quick grocery delivery has declined now that lockdowns are a thing of the past.
Sumer in his letter to staff made a bold prediction: "In January 2020 there were 30 players in our industry. In January 2021 only 15 remained. In January 2022 you can count four. And now the stage of the final four begins, where one year from now there will be only 1-2 players remaining. Gorillas will be this player. And this requires a new plan."
Netflix is releasing three new games Tuesday and plans to release Exploding Kittens, its most high-profile original game, on May 31, the company announced on Tuesday. Netflix says its catalog now includes 22 games in total.
Exploding Kittens was developed by the card strategy and tabletop studio Dire Wolf Digital, and it will largely be a digital re-creation of the popular Kickstarter card game Elan Lee and Matt Inman first launched back in 2015. The mobile app will pair with an upcoming animated series of the same name debuting in 2023, and the game will feature updates that coincide with the TV show to keep it fresh, Netflix says.
This latest slate of releases underlines Netflix's broadening ambitions in the game market. The company has so far mostly re-released existing games by partnering with established indie developers, either by porting titles to mobile that were originally made for other platforms (like Asphalt Xtreme) or by republishing games under its own App Store and Google Play account and requiring a Netflix login to make them accessible for subscribers (like the Stranger Things games from BonusXP).
Now, however, Netflix is putting more investment into original games. The company has partnered with developer Frosty Pop to make a number of exclusive casual games like Shooting Hoops and Bowling Ballers, as well as with publisher Rogue Games to make mobile versions of popular PC titles.
Moonlighter and Townsmen — A Kingdom Rebuilt, both launching Tuesday, are games that were originally published on PC and console platforms and are now coming to mobile for the first time with touch controls and other upgrades. Dragon Up, another game launching Tuesday, is a Netflix original from East Side Games, a studio best known for adapting popular TV shows into mobile titles.
Correction: An earlier version of this story misstated Bowling Ballers' name. This story was updated on May 24, 2022.
Barely more than two weeks after it agreed to stop selling its existing collection of face prints to private entities, facial recognition firm Clearview AI has a brand new plan to sell its software to private companies instead.
The software isn't exactly what Clearview AI has caught flack for in the past. Since the company's recent settlement with the ACLU bans Clearview from providing social media face matching technology to private entities, the product now on offer obtains the subject's permission to match them to ID photos and other data a client collects, according to Reuters.
The product's aim is to verify individuals' identities to give them access to certain spaces, such as visitor management systems used in schools. A company presenter at Montgomery Summit investor conference said the offering could significantly boost Clearview AI's sales.
Columbian lending app Vaale is reportedly going to use Clearview AI to match selfies to user-uploaded ID photos, replacing Amazon's facial recognition service, Rekognition. Vaale's CEO Santiago Tobón told Reuters that the company "can't have duplicate accounts and we have to avoid fraud."
"Without facial recognition, we can't make Vaale work," Tobón told Reuters.
Clearview's expansion into the private sector follows the company being ordered to to delete all data belonging to U.K. residents and halt data collection in that country for violating its data protection laws. The order was the fourth time the company has been forced to wipe data of an entire country's residents, and followed an investigation by U.K. and Australian privacy watchdogs that found the company failed to use the data it collected in a "fair and transparent" way, collected it without a lawful reason and didn't meet the data protection standards required for biometric data.
The company also settled with the ACLU in mid-May for violating the Illinois Biometric Information Privacy Act, which prohibits companies from taking and using Illinois residents' biometric identifiers without their permission.
LGBTQ+ workers are generally less satisfied with their employers than their straight, cisgender colleagues are, according to a new report from Glassdoor. But some companies are more popular with their LGBTQ+ employees than others.
Google, Microsoft, IBM and Apple all ranked among the top 10 companies on Glassdoor with the highest ratings for LGBTQ+ workers, Glassdoor announced Tuesday. The tech industry in general earned the second-best average industry rating for LGBTQ+ employees, yet LGBTQ+ workers have relatively low representation in tech. LGBTQ+ workers represent just 11% of Glassdoor reviews in the tech industry, compared to 23.1% in restaurants, 19% in personal consumer services and 18.3% in nonprofits.
In general, LGBTQ+ ratings lag behind others, according to Jacob Little, Glassdoor’s head of People Experience and Diversity & Inclusion. “Many companies still have progress to make when it comes to improving the workplace experiences of their LGBTQ+ employees,” Little says in the report.
Glassdoor found that LGBTQ+ employees ranked their employers 6% worse than their straight, cisgender counterparts, with an average rating of 3.62 out of five (versus 3.85 out of five for straight, cisgender employees). LGBTQ+ employees were 128% more likely to mention discrimination and 51% more likely to write about burnout in their Glassdoor reviews.
IBM was more popular with LGBTQ+ employees (four out of five) than with straight, cisgender employees (3.89 out of five); Google got similar ratings from LGBTQ+ employees (4.38 out of five) and straight, cisgender employees (4.41 out of five). And although they were ranked among the top companies, LGBTQ+ employees at Apple and Microsoft gave their companies lower ratings than straight, cisgender employees did.
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