Welcome to Startups Weekly, a new human look at this week’s startup news and trends. To receive this in your inbox, register here.
Among many of the businessman’s slogans out there, what bothers me the most is: “It’s not what you know, it’s who you know”. The phrase may be intended to remind people with imposter syndrome of the importance of a simple cold email, but it is often a way of reminding people that exclusive networks rule the world.
That’s why I hope this is the year that a back-channel social media platform really takes off. At best, channeling back can help someone without Stanford’s seal of approval to be confirmed and subsequently gamble. The process can also help prevent predatory investors from winning business. The impact of the process is clear, but the incentives for all parties to participate are slightly misaligned. Some investors still scoff at the idea that their portfolio companies might be asked to review what it’s like to work with them; similarly, founders are surprised when stories, not Cultureamp polls, are where honest feedback really lives. Why? In a world where due diligence is evolving to be somewhat flippant at an early stage, feedback channeling is simultaneously moving from a deep conversation about strengths and weaknesses to a positive or negative case.
Also, in addition to the superficial banter, some of the most powerful people in tech today have their eggs in many, many baskets – meaning those who want or can speak critically of them may be financially (or emotionally) constrained in saying so.
My bid? Finally, we have achieved a trusted platform on which return channeling can take place in an affordable and fair manner. An anonymous, private subreddit for founders already exists in so many different forms, but I’d love to see an app that expands access so anyone can evaluate a value-added proposition.
To learn more about my opinion, check out this Ploonge+ column I did with my Equity co-hosts Alex Wilhelm and Mary Ann Azevedo: 3 views on how due diligence will change in 2022. We also recorded a podcast if you prefer the newsletter to your ears.
For the rest of this newsletter, we’ll talk about Wordle, future revenue as a business model, and why I think Y Combinator is reading my text messages. As always, you can follow my thoughts on Twitter. @nmasc_.
A word about Wordle
The creator behind the app on everyone’s mind, not anyone’s app store, spoke with Ploonge about the rise of Wordle. The game, in which users guess a five-letter word in six tries, grew from less than 1,000 players to 2 million players in weeks.
Here’s what to know: As Owen Williams explains, Wordle’s nostalgic feel isn’t loved by everyone. the game is being punished by app stores for choosing the open web. Here’s how he puts it in his last column for Ploonge:
Wordle is facing a threat we haven’t seen yet: the game’s developer is essentially being punished by app stores for choosing to build using open web technologies rather than a native app. Not only is this kind of behavior allowed by Apple’s App Store, but there are few resources — because for Apple, Wordle doesn’t exist, as a native app hasn’t been built.
There is no way for a developer of a fully functional and capable web app like Wordle to claim its name on the App Store, nor is there a way to list your site to lead users to the right place and fend off imitators. Google does allow developers to upload some types of progressive web apps to the Play Store, although at the time of writing, Wardle doesn’t seem to have chosen to do that. If he wanted to defend his game on the Play Store when a clone showed up there, he would at least have the option to do so.
Consumer love, a fickle thing:
And the release of the week is…
bow! SaaS-enabled fintech platform emerged this week with $150 million in debt funding and $11 million in seed funding with a Stripe partnership. As our own Mary Ann reports: “Arc is building what it describes as ‘a community of premium software companies’ that gives SaaS startups a way to borrow, save and spend it all on a single technology platform.”
here’s what to know: As we discussed in Equity this week, Arc is one of those startups – similar to Brex – that couldn’t have existed 20, even 10 years ago. The company is entirely betting its own revenue on the assumed future revenue of other startups, which is a statement of the maturing of this once disjointed SaaS scene.
Is the Y Combinator reading my texts?
Last week I wrote a newsletter about how accelerators need an update on what they consider a ‘value-added service’. Then, days later, Y Combinator announced that is increasing the size of the check and the shareholding, in their accelerator companies. My argument then and now is that accelerators will need to offer more than they have in the past to remain competitive; and YC’s new check shows that they want to get more aggressive in the same swing.
Here’s what to know: Despite the somewhat anticipated change, it was controversial among early-stage investors – who saw the change as more competitive than complementary to the broader early-stage ecosystem. In Equity, we discuss both sides and why it might be harder for international founders to accept the new deal.
The new, the new:
If you’re like me, you talk about the future of finance at least twice a day. Even for the most geeky, though, the decentralization of regulation, money and culture is hard to keep up with – which makes our next event even more exciting. As of March 30, 2022, Ploonge is hosting DeFi & The Future of Programmable Money alongside Sommelier Finance. It’s getting into everything from basics to moonshots, so sign up for this virtual event soon.
throughout the week
Seen on Ploonge
Dorm Room Fund returns to campus with new $10.4 million fund
Stay tuned: your company is watching you
Take-Two buys mobile gaming giant Zynga for $12.7 billion
Fintech Brex confirms valuation of US$ 12.3 billion and hires Meta executive to act as head of product
Career Karma gets $40 million to evolve into an edtech employee benefit
Seen on Ploonge+
What’s left to learn from Theranos? Have friends
A Startup Founder’s Guide to Allocating Capital Grants
Innovation in fintech and insurtech in Brazil should take off with regulatory favorable winds
Despite the play-to-win angle of blockchain games, I prefer to pay
Data shows 2021 was a crazy and record year for venture capital
Until next time,