May 20, 2020
Good morning! This Wednesday, VC Dr. Robert Mittendorff explains what he wants to see from entrepreneurs, Shopify makes a Facebook gamble, and what happens when Zoom meets the death penalty. Want Index in your inbox each morning? Subscribe here.
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You'd think that every startup looking for funding would address the giant, virus-shaped elephant in the room, right? Apparently not. "I still see some pitch decks that don't even mention COVID-19," Dr. Robert Mittendorff, a partner at Norwest Ventures, recently told me. "I think that speaks a bit to the acumen of the entrepreneur."
There are some real opportunities out there. "We clearly see during economic downturns this long tail of mental, behavioral and often medical challenges," Mittendorff said, with that providing an opportunity for behavioral health products.
One thing he wants to see less of? False experts. "We sometimes see from all kinds of leaders, not just tech leaders … people touting opinions that are not based on facts, or touting opinions that are based on a loose association of facts," Mittendorff said.
We talked about much more, including health tech valuations and the naivete of some health tech entrepreneurs: Check out our full conversation on Protocol.
Shopify's stock had a pretty wild 30 minutes yesterday. At 10:05 a.m. PDT, it plunged on the news that Facebook was launching an ecommerce platform called Facebook Shops. Ten minutes later, Shopify CEO Tobias Lütke appeared alongside Mark Zuckerberg to discuss their partnership on the product — sending the stock skyrocketing even higher than its starting point.
What's interesting is that it's decided not to go it alone. It's working with numerous ecommerce platforms, including Shopify, to display their merchants' stores in Facebook's apps — essentially letting them add another sales channel while keeping all the backend stuff the same.
But does Facebook plan to keep these partnerships going? As analyst Beth Kindig pointed out, "this is the move Facebook pulled on news publishers."
Shopify is making a risky gamble here. It could have refused to work with Facebook, eschewing the promise of increased volume in the hopes of killing Facebook Shops before it even starts.
Based on Shopify's surging stock price, investors think this is the right move. In the years to come, we'll see if that's true.
Singapore, which has the death penalty, is currently conducting court proceedings over Zoom. You can see where this is going. Last week, Punithan Genasan was found guilty of drug trafficking and sentenced to death by hanging — in a court proceeding that took place over Zoom. It's the most shocking thing I've read in a long time — and a reminder that tech tools can be used for outcomes that the creators would never have envisioned.