Julie Bornstein
Photo: Courtesy of The Yes

Protocol Pipeline: Launching a startup is hard. Try it in a pandemic.

Protocol Pipeline

Hello and welcome to Pipeline.Hopefully you had a better week than Twitter's comms team did. This week: SoftBank staff members are circulating resumes, what it's like launching a startup in a pandemic, and the worst deal ever.

If you were forwarded this email, be sure to sign up here.


  • Welcome to "the plateau." States are reopening, startups are getting funding, and VCs seem to be spotting (some) new deals. Investors I chatted with this week feel like things have normalized a bit, but the question now is whether we'll see another drop this year. In a Cowboy Ventures webinar, partner Ted Wang made a prediction: "Right now we're at a short-term leveling, but I think things could get materially worse."
  • Is SoftBank the new scarlet letter on resumes? I've heard there's an uptick in SoftBank employees shopping around their CVs to venture firms, particularly as layoff rumors swirl. More-junior staff may find jobs easily, said one investor, who compared a stint at the company to having grad school on a resume. But the senior investment leaders and decision-makers may struggle to reenter Silicon Valley VC circles, they said.
  • "You're either making progress, or you're backsliding" when it comes to diversity and inclusion, said Paradigm's CEO Joelle Emerson. We're at a critical inflection point for tech's D&I efforts as programs and staff are being cut — but there's also hope that a work life reset could make tech a more equitable and diverse industry.
  • Nearly half of health care experts expect a second wave of shelter-in-place, and another third thought it would continue into 2021, according to a survey by Venrock. That means "there's no way" there will be a V-shaped recovery, Venrock's Bryan Roberts told Protocol.
  • I never thought a song about Zoom could be so catchy, but now there's a good chance I start singing "Let me restart Zoom, let me move to another room" the next time my video cuts out. The team at design startup Figma — including one person with national tours under her belt! — put together an incredible 15-minute musical about life sheltering in place, and it's worth watching the whole thing.

Biz on Biz

The Yes was ready to launch. Then a pandemic happened.

Julie Bornstein had picked out the launch date for her new company: March 25, 2020. It was supposed to be a splashy debut, the culmination of two years of work on her already buzzy, AI-powered shopping app called The Yes. Then, with around 10 days to go before launch, she decided to push it back. Instead, the news that dominated the headlines that day in March was a grim milestone in the coronavirus pandemic: the U.S. had just passed 1,000 deaths.

  • "I didn't want to give up on the possibility that this thing wasn't going to be as bad," Bornstein said, looking back on making the decision in early March. "I was probably the last to fall." But it soon became obvious that the world was going to be really different, and launching at that point in the pandemic would have felt "tone-deaf," she said.
  • There was another reason to hit pause: to understand the impact that the coronavirus pandemic was going to have on the brands that her shopping app works with. The Yes' goal is to bring together fashion lines from Gucci to Everlane and Levi's all in one place, and its partners needed time to assess what was happening and whether they could still ship. Everyone needed time to figure things out.

Bornstein wasn't alone in grappling with how to launch a company amid a pandemic. San Jose chipmaker Perceive considered delaying its March 31 launch but ended up keeping the course. Quibi famously launched in early April, a move that its CEO Jeffrey Katzenberg called "regrettable." "I attribute everything that has gone wrong to coronavirus," he told The New York Times in early May. "Everything. But we own it."

  • "It was hard to accept," Bornstein admitted. "We had worked for so long to launch the business, and so it was hard to pull the plug on launching, but fortunately we were able to, I would say, improve the product as a result of it."
  • With some extra time before launch, The Yes' team of 35 employees improved the app and signed 10 new brands. It was already a technical challenge to build over two years, between creating an algorithm to recommend clothes and a shopping experience where you can buy from multiple stores at once. The extra time meant it could add new features like social sharing. It also decided to donate $1 for each download of the app for the first month to the Good+Foundation.
  • "What I said was we're going to push it for as long as we need to, but as short as we can," Bornstein said. Being venture-funded meant it couldn't wait forever, having raised $30 million before launch, she said. By the end of April, Bornstein realized there could be a window to launch as consumers, sick of sheltering in place, were kind of looking toward what comes next.

The Yes officially launched May 20, nearly two months after its original planned launch date. The company sent boxes of swag and Champagne to the employees so they could toast the launch over Zoom.

  • "You can only focus on the negative and worry for so long," she said. "You need something new to think about and play with, and what we've seen from the people that have downloaded our app is they think it's really fun and interesting; they're excited by it, especially since they haven't been shopping."
  • It's a different world than Bornstein and co-founder Amit Aggarwal had expected to launch in. People are at home in their sweats, and retail has been hit hard. But consumers are also ordering online more than ever, and that's still an opportunity for The Yes. "I'm sure the results are different than what they would have been, but we've already shifted our mindset to the world we're living in today," she said.
  • "If you have to launch during a pandemic, the good news is that some of the hardest moments that you're going to have to face, you probably are facing at the very beginning," Bornstein said. "So it's all upside from there."

Inside track

  • The pandemic is resetting more than just how we work, said Floodgate's Ann Miura-Ko. She's seeing everything from behavior to finance to regulation in what she calls "The Great Reset."
  • Y Combinator once tried an experiment where it funded great founders without ideas for startups, Sam Altman said. It didn't work. Here are his thoughts on idea generation.
  • Most people would never do this, but Pinch and Chime founder Maia Bittner published the complete history of her salary online.
  • Bill Gurley's blog, Above the Crowd, is one of the most famous of all the VC blogs — but it doesn't include everything that he's written. Kevin Gao, who has a penchant for compendiums, compiled 85 of Gurley's missing posts into "The Lost Essays."

Need to know

  • Amazon is reportedly in talks to buy Zoox, according to The WSJ. Could self-driving be the latest sector to get caught in a consolidation crunch?
  • Magic Leap's CEO Rony Abovitz is stepping down following a reported $350 million funding round from mystery investors and a pivot to "spatial computing in enterprise."
  • A venture capitalist in Minneapolis was kicked out of his office building after he racially profiled black entrepreneurs in the gym. The F2 Group's Tom Austin now has quite the auto-responder for anyone who tries to email him.
  • Palantir is thinking of leaving California, and finally Palo Alto could be reclaimed for startups. CEO Alex Karp told Axios he was thinking of somewhere closer to the East Coast, like Colorado (:insert skeptical face emoji:).
  • The average PPP loan for startups: $261,000, according to startup accounting firm Kruze Consulting, who looked at the nearly 100 companies it works with that received loans. All told, the amount really only netted them two months of runway, the firm said, which could mean startups are facing pressure by the time June rolls around.
  • From Protocol: Quibi placed a Hollywood-style bet but is now "iterating" like Silicon Valley.
  • This week in VC history: 15 years ago, Accel invested $13 million into "thefacebook.com," and Jim Breyer joined the board. "The point of this whole investment is that we are going to try and move away from the current way we do advertising," Mark Zuckerberg told The Harvard Crimson at the time. "I don't want anything flashing or colorful that disrupts the flow of the site."
  • And your weekend reading: 15 years after being fired from Stubhub, a company he had co-founded, Eric Baker bought it back for $4 billion. That was weeks before the pandemic hit, and Forbes has the story on the "Worst. Deal. Ever."

Five Questions for...

Venrock's David Pakman

What's a startup area that's under-hyped right now?

Full-stack automation of legacy processes, like agriculture, aquaculture, mineral extraction, cleaning and even some parts of manufacturing. The robot future is nearer than we think!

What's one pitching pet-peeve?

Not using a deck and being too informal about it. I appreciate seeing the way teams put together their story.

What's one problem you wish entrepreneurs would solve?

Fixing the buying and selling of real estate. I absolutely abhor the process and all the people involved. The entire process is pitifully poor and an unnecessary tax on all of us.

What's one of the worst predictions you've ever made?

OMG. There are SOOOO many. I was confident Spotify would never be profitable (right so far) and thus not a great investment (couldn't be more wrong).

What's a secret obsession you have that most people don't know about?

It's not so secret but I am a musician and DJ and have been known to randomly appear on stage at parties and concerts from time to time …

Thanks for reading this week's Protocol Pipeline. A special congratulations to Playbyte founder Kyle Russell and Business Insider's VC reporter Melia Russell on their new daughter, Florence. If you like what you're reading, sign up hereto get it in your inbox. Send story tips and Pipeline feedback to biz@protocol.com. Otherwise, stay safe, stay healthy and stay home. See you next week.

Recent Issues

VCs rethink the office