Is this Silicon Valley’s next culture war?
Hello and welcome to Pipeline. Today is Saturday, in case you lost track of time. Normally I tell the passing of time in "Masked Singer" episodes every Wednesday and even that feels like 84 years ago. So here's a refresher on this week: Anti-Semitism inside Clubhouse, double direct listings, and Coinbase's anti-activism stance.
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- "I'm trying to realize how much of a luxury it really was [being private], of not looking at the stock price on a daily basis," Palantir's COO told Protocol after the company's direct listing debut slipped on the same day Asana did its (more successful) listing.
- Someone is allegedly working for both Google and Facebook — at the same time. Investor Michael Arrington tweeted that a friend of a friend worked at Google before interviewing with Facebook in March. Now, they just work both jobs from home, although I can't see a way that this doesn't end terribly.
- Calling a CEO "smart and visionary leader" is now dehumanizing, at least if you ask Rent the Runway's PR and legal team. Business Insider published a profile on Jennifer Hyman and how the fashion startup has survived during the pandemic, but just as fascinating as that storyline are all the PR and legal machinations behind the scenes, including 200 pages of legal correspondence "alleging a plot to promote 'pre-conceived narratives.'"
- How much are VC firms paying their analysts and junior team members? To add some transparency to an already opaque industry, Andrew Parker is collecting compensation data to share the reality of what VC firms are paying these days.
Biz on Biz
A martyr or an abdication of leadership? How Coinbase divided the tech world
For a CEO whose stance was to make his company staunchly apolitical, Coinbase CEO Brian Armstrong has done a surprisingly effective job of sparking what may be the next culture war to consume the tech industry, as I wrote for Protocol.
- On Sunday, Armstrong laid out how his company was no longer going to take activist stances on anything outside a narrowly defined mission of advancing cryptocurrency. Societal issues unassociated with its mission are a no-go because "impact only comes with focus." Political issues are only worth weighing in on if they directly affect the business.
- "We could use our workday debating what to do about various unrelated challenges in the world, but that would not be in service of the company or our own interests as employees and shareholders," Armstrong wrote.
- Coinbase's newfound clarity may have been sparked by reported internal divisions, over incidents like "bathroomgate", in which bathroom inclusivity signs were removed, and an employee walkout over Armstrong's initial hesitation to make a Black Lives Matter statement.
Coinbase's supporters viewed it as a path for other companies to follow. "I predict most successful companies will follow Coinbase's lead. If only because those who don't are less likely to succeed," Y Combinator founder Paul Graham said.
- Other big tech companies, like Google and Facebook, are also taking steps to more actively moderate what employees post on internal message boards. "What we've heard from our employees is that they want the option to join debates on social and political issues rather than see them unexpectedly in their work feed," a Facebook spokesperson told Fox Business.
- "It has become common for Silicon Valley companies to engage in a wide variety of social activism, even those unrelated to what the company does, and there are certainly employees who really want this in the company they work for," Armstrong wrote. "While I think these efforts are well intentioned, they have the potential to destroy a lot of value at most companies, both by being a distraction and by creating internal division."
To many critics, it felt like an abdication of leadership and putting money-making capitalism first and foremost before fighting for employees' rights and building an inclusive environment.
- Former Twitter CEO Dick Costolo compared it to telling employees to "shut up and dribble." But he took it a step further in a since-deleted tweet: "Me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution," he tweeted. "I'll happily provide video commentary."
- Tech companies and their workers have been active in taking a social and political stand on everything from immigration policy to climate change to Black Lives Matter. Tech worker action has soared exponentially in the last few years, with over 100 different worker actions in 2019 alone, according to Collective Action in Tech, which tracks events.
- Angel investor Susan Kimberlin doesn't fault Coinbase for wanting a business-first policy, but there needs to be a clear outlining of what the company does value, she said. While Coinbase says it is mission-first, there's still a gray area on what that will mean in practice and what its values will be. And without that clarity, employees may feel stifled from talking about issues that are important to them personally.
- "I believe it's really important to let people bring their whole selves to whatever they're doing," Kimberlin told me. "This clearly kind of discourages people from reacting to and living with what we all have to right now, which is this incredible amount of ambient stress, an enormous amount of social upheaval, and really concerning and upsetting events that are affecting large groups of people."
The question now is whether others will follow. Some predict it will be a recruiting boom for Coinbase, but the company's also prepared severance packages for employees ready to walk.
- Expect to see the debate around social activism come up more frequently, too, as it already has when The New York Times interviewed Palantir's CEO Alex Karp. He said that "companies should really articulate what they stand for, and then investors should get to judge whether they want to be involved in that company."
- "We believe in civil liberties and we believe in stopping terror attacks, and there's a tension," Karp told the Times. "I don't think people should join Palantir who don't believe in civil liberties. I also don't think people will be happy at Palantir if they think the only thing that matters are civil liberties."
Over the coming weeks — particularly as the election looms closer and politics may play a greater day-to-day role in the workplace — we'll see if more CEOs follow Coinbase's path of choosing to not engage and try to limit the distraction, or if Coinbase will remain the exception.
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- Is 500 companies the golden portfolio number? Institutional Investor published an analysis showing that funds do better with hundreds of companies rather than a risky few, with 100 companies as the minimum.
- Just because companies issued statements and firms committed to funding Black founders doesn't mean tech's diversity problem has been solved. Investor Janine Sickmeyer says firms should remain transparent and publish their diversity stats, along with how well they're sticking to the pledges they made.
- It's that time of year where startups are thinking about applying to Y Combinator. So is it worth it? Armory's CEO Daniel Odio-Paez (DROdio)says it is based on his experience in YC's W17 batch and Fall 2019 Growth program. Plus he shared an easy to copy Trello board on how to track and manage investor interest.
Need to Know
- More moderation problems: A conversation on Clubhouse with hundreds of listeners devolved into anti-Semitic commentary on Yom Kippur. People deleted the app in protest, and it raised fresh concerns that the app is again failing to mitigate harassment on its platform. Clubhouse says it will now host formal moderating training sessions and make it easier for moderators to end rooms when things get out of hand.
- Airbnb won't go public until after the election. The company could raise $3 billion in the IPO, according to CNBC. In the early 2021 lineup could be gaming company Roblox, which has reportedly begun preparations to go public and is weighing a direct listing vs. traditional IPO.
- A SPAC for your SPACs. We've moved past famous people launching SPACs (this week it's former Uber exec Emil Michael) and the companies they plan to take public (Playboy and Hims) to a new level of SPAC-cess: a blank-check company that's raising funds to invest in more SPACs.
- A new AngelList competitor: Tribe Capital plans to launch a new program that would let qualified high-net-worth individuals invest in companies, similar to AngelList's platform.
- The pandemic created a customer service boom, but the workers behind Airbnb, Intuit and Disney aren't employees of the companies at all. ProPublica published a story inside the secretive world of the work-from-home customer service workers.
- From Protocol: A pandemic has forced shops, restaurants and thousands of other small businesses to rethink everything about the way they work. We published a special Manual on how small businesses are recovering, featuring interviews with execs from Etsy, Square, EnrichHer and Yelp.
- This week in VC history: Stripe launched nine years ago this week, complete with some fancy clip art of gears turning in the cloud to represent its payments system.
- And your weekend reading: Is Justin Sun the "hype man of the century"? There seems like there could be a lot of contest for that title, but The Verge has an extensive look into how the Chinese millionaire acquired BitTorrent, gave away Teslas, bid millions on a showy lunch and steered the company into the trade war to "get the pump on the coin."