A startup gravestone
Illustration: Christopher T. Fong/Protocol

The art of the startup post-mortem

Protocol Pipeline

Hello and welcome to Pipeline. This week’s Pipeline is a special issue for me. Not only because it’s great to be back (thanks Tomio and Jamie for holding down the fort), but also because on Monday Pipeline will officially turn two!

The last two years have been some of the zaniest during the time that I’ve covered venture capital. We started with layoffs on Zoom as the pandemic began, then entered a period of crazy money and nonstop deals. Along the way there’s been a lot of experimentation, from rolling funds and solo capitalists to Sequoia going evergreen. Now we’re back full circle with companies back to Zoom layoffs and uncertainty as VCs pull back once again. It’s been a fun ride, and I’m grateful to you for joining me on it.

My one ask as Pipeline turns two is your feedback on what you enjoy reading and what you wish I wrote more about. Here’s a fast four-question survey.

Now back to your regularly scheduled programming. This week: Flutterwave falters, an “assumption report card” and the power of looking back.

The art of the startup post-mortem

Silicon Valley is a place that likes to look forward to what’s coming around the corner. A lot of what gets evangelized and written about is the Next Big Thing, not the Previously Big Thing. But there’s a certain genre of retrospective that tech values: That’s the startup post-mortem.

This week, we saw the full spectrum of after-action reports from founders. On one end was a lookback on Pebble, published years after its end to mark the 10th anniversary of its Kickstarter launch. On the other end was Fast, which lived up to its name when its co-founder went on the 20VC podcast one week after the company shut down to opine on its death.

Sometimes the post-mortem is simply about damage control and messaging, particularly if it’s a high-profile company where the media is the one diagnosing a startup’s cause of death.

  • Fast CEO Domm Holland’s 20VC interview is a classic attempt at rewriting the narrative around a startup’s demise. In the interview, Holland spent much of the time saying the media got things like Fast’s burn rate wrong and that its real problem was over-hiring. He also threw his board under the proverbial bus when he said they chose a plan that led to Fast’s closure instead of his preferred strategy of cutting staff earlier this year. (Whether the interview was damage control or just more damage is hotly debated still.)

But the point of most post-mortems is to teach other founders so that they don’t have to blow through $10 million (or even just $40,000) making the same mistakes. Many startups prefer the traditional Medium autopsy, a glossily formatted post trying to distill harrowing mistakes into inspirational lessons learned. But you’ll also find great Twitter threads, from Justin Kan’s lessons on Atrium to Andrew Wilkinson’s retrospective of how he spent millions to build Flow only to lose the market to Asana, that are worth unrolling as well.

  • Eric Migicovsky originally wrote his Pebble retrospective in 2017 shortly after the company had sold part of its business to Fitbit at the end of 2016. He didn’t publish it right away because it felt “too soon,” he told me. Instead, he gave a talk about learning from failure to eight YC batches over the last four years.
  • “Pebble had and still has a passionate community. I wanted to share my perspective on the story. I also wanted to help other founders see behind the veil at what went down, just in case it might be helpful for them as well,” he said in a Twitter DM. The interesting part to me of dusting it off five years later were his added edits where further distance has made him feel “less of an idiot” about some of the challenges. (They’re lessons learned for him, too, as he builds his new messaging company Beeper).

There’s a few online startup graveyards, where you can mock, mourn or study the fallen. FuckedCompany.com was infamous for its dot-com bubble deathwatch. Other companies are taking a more serious approach, trying to use startup post-mortems as a tool to learn why startups die.

  • Autopsy claims to have over 2,000 startups in its catalog. It’s done its own analysis into the most common reasons startups fail (wrong team and wrong business model).
  • CB Insights regularly updates its list of more than 400 startup goodbye letters, and after analyzing 111 of them, attributed most failures to running out of cash/failing to raise and no market need.
Regardless of how a startup dies, it’s a good exercise for a founder to play the coroner and articulate a company’s cause of death. Failure isn’t a badge many startup entrepreneurs wear easily, but perhaps it should be. Some VCs say they use a post-mortem as a signal to invest in a founder’s next company. Looking backwards does have some advantages, even for those building the future.

Overheard

“It’s like building in a retirement home.” One founder called Boston a “trap for ambition” after struggling to build a company there for two years.

“Peace out and love to all.” I was not the only person to go see what Geoff Lewis had to say about this year’s Midas List, a favorite Twitter beef of his, only to see that the Bedrock investor seems to have laid down his arms — "as first reported in Logan [Bartlett]’s Twitter thread.”

“The Current Thing” is the current thing to talk about, at least if you’re Marc Andreessen. There’s been a lot of analysis into various billionaires’ tweets this week, but Andreessen was called out by Bloomberg’s Brad Stone for his tweets on the current thing — a meme about any social concern — being more “churlish and childish.” Apparently a16z partner Sriram Krishnan has maybe stopped Andreessen from tweeting a few things. Send me your drafts folder, Marc!

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Inside track

Former Reddit CEO Yishan Wong thinks Elon Musk will be “in for a world of pain” if he succeeds in his bid to take Twitter private.

What happens if your primary competitor goes belly-up overnight? Public co-CEO Leif Abraham had prepared for it in one of his many scenarios in his black swan playbook so he could capitalize on it instantly. It’s one of eight lessons he shared with The Generalist on how to lead.

So many wrong decisions are really because of bad assumptions going into the decision process. Instead of judging the decision, Instacart CEO Fidji Simo keeps an assumption report card to grade how spot-on or off the mark her assumptions were going into big decisions and evaluate how she can better refine her decision-making skills from there.

Speaking of Instacart, the a16z-backed company topped Future’s list of the top 100 marketplace startups put together by Olivia Moore and Brandon Barros.

Need to know

VC investing had a down quarter. Deal volume is off nearly 25% from where it was at the end of 2021.

Jobs Act 4.0. Some senators are considering broadening the definition of qualifying investments for VC firms to include secondaries.

Flutterwave may be in trouble. An investigative report aired claims against the $3 billion African fintech company and its founder including “fraud, perjury and insider trading.”

Climate capital call: In a big week for climate funding, a new project from Alphabet, McKinsey, Meta, Shopify and Stripe is putting $925 million towards carbon removal. Chris Sacca’s Lowercarbon also announced it had closed a $350 million fund.

Be on your guard. Investors are warning their portfolio companies as hackers are impersonating a VC firm to target crypto startups and related organizations.

Paradigm, a16z and USV were sued. The firms were named in a lawsuit over “rampant fraud” on the Uniswap exchange they had backed.

From Protocol: Funding for chip startups used to be rare. But in the last five years it’s more than doubled. Here’s why.

Your weekend reading: “I think 10 years from now, everybody’s going to consider him the greatest investor of his generation,” Ben Horowitz said of Chris Dixon, who placed No. 1 on the Forbes Midas List this week. Alex Konrad has the story of how Dixon ended up on top.

Five questions with… Lightspeed’s Ling Wong

Ling Wong’s career started in science as the creator of the world’s first inhaled TB vaccine while she was at Harvard. She worked for the Gates Foundation and helped establish its $1.5 billion investment portfolio. The founder and GP at Sea Lane Ventures (now Highbury Group), Wong joined Lightspeed as a senior adviser in 2019 where she leads investments in health and technology companies.

Health care has been such a huge topic with the pandemic. What new startup opportunities have you seen emerge as a result of the last two years?

The pandemic has significantly accelerated the field of virtual care, and I’m interested in startups that are working to streamline how care is deployed. Health care professionals estimate 60%-70% of what normally occurs in a doctor’s office could happen virtually, so we need to think about how to build a seamless experience between our virtual and physical worlds.

What was your first job, and what’s a skill you still use from it?

My first job was at Robert Langer’s lab at MIT, and he taught me to dream first, execute second. As an investor, the first thing we do is dream with the founder about how we can make a difference. The next step is to partner to make that change happen.

What problem do you want to see a startup solve?

I want to see more holistic approaches to proactive well-being. There’s a myriad of products and services oriented around preventing one health problem, but I’m interested in something that takes the full picture of health into account.

What book do you think every startup founder should read?

“Oh, the Places You’ll Go!” by Dr. Seuss. Life is like chapters, each filled with ups and downs, and each chapter helps inform what you’ll do next.

If you could have dinner with any tech executive you haven’t met, who would it be?

Thomas Edison because his inventions transcend any one industry. He didn’t just focus on electricity; he was prolific, working across modern technology. I would love to learn about the curiosity that drove his breadth of passions.

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Here is the link again to the Pipeline feedback survey. Thanks again for reading this week’s issue. If you like what you’re reading, sign up here to get it in your inbox. Send story tips and newsletter feedback to bcarson@protocol.com.

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