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Is this the year that we get our dream back channeling platform?

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Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.

Among many of the entrepreneur catchphrases out there, the one that annoys me the most is: “It’s not what you know, it’s who you know.” The phrase may be meant to make people with imposter syndrome remember the importance of a simple cold emails, but it often comes off as a rebranded way to remind people that exclusive networks rule the world.

Which is why I’m hoping that this is the year that a back channeling social media platform actually takes off. At its best, back channeling can help someone without a Stanford stamp of approval get vouched for, and subsequently bet on. The process can also help stop predatory investors from winning deals.The process’s impact is clear, but the incentives for all parties to participate are slightly misaligned. Some investors still scoff at the idea that their portfolio companies may be asked to review what it’s like to work with them; similarly, founders are surprised when stories, not Cultureamp surveys, are where honest feedback truly lives. Why? In a world where due diligence is evolving to be somewhat flippant in the early stage, back channeling is simultaneously going from a deep conversation about strengths and weaknesses to a thumbs up or thumbs down affair.

Plus, beyond the surface level banter, some of the most powerful people in tech today have their eggs in many, many baskets – meaning that those who want to or could speak critically of them can either be financially (or emotionally) restricted in saying this.

My pitch? We finally get a trustworthy platform in which back channeling can occur in an accessible and fair way. An anonymous, private subreddit for founders already exists in so many different forms, but I’d love to see an app that widens access so that anyone can vet a proposed value add.

For more of my take, check out this TechCrunch+ column that 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 for your ears route, instead.

In the rest of this newsletter, we’ll talk about Wordle, future revenues 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 on Wordle

The creator behind the app on everyone’s mind, and not on anyone’s app store, chatted with TechCrunch about the underdog rise of Wordle. The game, in which users guess a five-letter word in six tries, grew from fewer 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 all. The game is being punished by app stores for choosing the open web. Here’s how he puts it in his latest column for TechCrunch:

Wordle is facing a threat we haven’t seen play out 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 type of behavior allowed by the Apple App Store, there’s little recourse—because as far as Apple is concerned, Wordle doesn’t exist, given it wasn’t built a native app.

There’s no way for a developer of a fully functional, capable web app like Wordle to claim their name in the App Store, nor is there a way for them to list their website to get users to the right place and defend themselves from copycats. Google actually does allow developers to upload some kinds of progressive web apps to the Play Store, though at time of writing Wardle doesn’t appear to have chosen to do this. If he wanted to defend his game on the Play Store when a clone does appear there, he’d at least have a choice to do so.

 Consumer love, a fickle thing:

wordle game; a grid of illustrated phones with green and yellow squares on them

Image Credits: Bryce Durbin/TechCrunch

And the startup of the week is…

Arc! The SaaS-friendly fintech platform emerged from stealth this week with $150 million in debt financing 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 all on a single tech 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 future assumed revenue of other startups, which is a statement of the maturation of this once scrappy SaaS scene. 

Honorable mentions:

Plastic Pipes Bar Graph Peakvalue on Purple Colored Background Directly Above View.

Is Y Combinator reading my texts?

Last week, I wrote a newsletter on how accelerators need a refresh on what they consider a ‘value-add service.’ Then, days later, Y Combinator announced that it is increasing its check size, and ownership stake, in its accelerator companies. My argument then, and now, is that accelerators will need to offer more than they ever have in the past to stay competitive; and YC’s new check shows they want to get more aggressive in the same swing. 

Here’s what to know: Despite the somewhat expected change, it was controversial among seed-stage investors – who saw the move as more competitive than complementary to the broader early-stage ecosystem. In Equity, we discussed both sides and why it may be harder for international founders to take the new deal. 

The new, new: 

Image Credits: Getty Images

Around TechCrunch

If you’re like me, you chat about the future of finance at least twice a day. Even for the nerdiest of us, though, the decentralization of regulation, money and culture is hard to keep up with — which makes our upcoming event even more exciting. On March 30th, 2022, TechCrunch is hosting DeFi & The Future of Programmable Money alongside Sommelier Finance. It’s getting into everything from the basics to the moonshots, so register for this virtual event soon. 

Across the week

Seen on TechCrunch

Dorm Room Fund returns to campus with new $10.4 million fund

Be aware: Your company is watching you

Take-Two to acquire mobile gaming giant Zynga for $12.7B

Fintech Brex confirms $12.3B valuation, snaps up Meta exec to serve as its head of product

Career Karma lands $40M to evolve into an edtech employee benefit

Seen on TechCrunch+

What’s left to learn from Theranos? Have friends

A startup founder’s guide to allocating equity grants

Fintech and insurtech innovation in Brazil set to take off on regulatory tailwinds

Despite blockchain gaming’s play-to-earn angle, I prefer to pay

Data show 2021 was a bonkers, record-setting year for venture capital

Until next time,

N 

Technology

Tech doesn’t get more full circle than this

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Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.

Tech innovation is a cycle, especially in the main character-driven world of early-stage venture capital and copycat nature of startups.

The latest proof? Y Combinator this week announced Launch YC, a platform where people can sort accelerator startups by industry, batch and launch date to discover new products. The famed accelerator, which has seeded the likes of Instacart, Coinbase, OpenSea and Dropbox, invites users to vote for newly launched startups “to help them climb up the leaderboard, try out product demos and learn about the founding team,” it said in a blog post.


TechCrunch+ is having an Independence Day sale! Save 50% on an annual subscription here. (More on TechCrunch+ here if you need it!)


If it sounds familiar, it’s because — in my perspective — Y Combinator is taking a not-so-subtle swipe at Product Hunt, a nearly decade-old platform that is synonymous with new startup launches and feature announcements.

Y Combinator doesn’t necessarily agree with this characterization: The accelerator’s head of communications, Lindsay Amos, told me over email that “we encourage YC founders to launch on many platforms — from the YC Directory to Product Hunt to Hacker News to Launch YC — in order to reach customers, investors and candidates.”

The overlap isn’t isolated. As Y Combinator makes a Product Hunt, Product Hunt is making an Andreessen Horowitz. Meanwhile, a16z is making its own Y Combinator. Not to mention Product Hunt has investment capital from a16z and formerly went through the Y Combinator accelerator.

The strategy is more than a tongue twister, it’s a signal on what institutions think is important to offer these days (and why they’re starting to borrow more than sugar, or deal flow, from their neighbors).

For my full take, read my TechCrunch+ column, “YC makes a Product Hunt, Product Hunt makes an a16z, a16z makes a YC.”

In the rest of this newsletter, we’ll talk about Coalition, Backstage Capital and Africa’s temperature-fluctuating summer. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter or subscribing to my blog.

Deal of the week

Coalition! Built by a quartet of women operators in venture, Coalition is a fund meets network that is trying to get more diverse decision-makers onto cap tables. The two-pronged approach of fund and network helps Coalition cover multiple fronts: Founders can turn to the firm for capital or the network for advice at no further dilution. Aspiring investors and advisers can turn to the firm to begin building out their portfolio, and LPs can put money into an operation that is committed to broadening diversity on cap tables, known to have economic benefits.

Here’s why it’s important: Coalition co-founder Ashley Mayer, the former VP of communications for Glossier, explained a little about the building philosophy behind the new company.

Mayer explained that she and her three co-founders saw the value of taking a “portfolio approach” to careers, basically going deep on their respective operator roles while also angel investing and eventually scout investing. Three of them previously worked in venture but left it because they missed the experience of operating. Now, they’re trying to scale a way for people to keep their day jobs and build beyond it. Coalition co-founder and Cityblock Health founder Toyin Ajayi said that “as one of few women of color leading a venture-backed company, I feel a deep obligation to hold the door open for others.”

Coalition investors (left to right): Cityblock Health co-founder Toyin Ajayi, Tribe AI co-founder Jackie Nelson, Umbrella co-founder Lindsay Ullman, Glossier VP of Communications Ashley Mayer

Image Credits: Coalition

When do layoffs matter? Trick question — always

This week on Equity, we spoke about Backstage Capital laying off a majority of its staff, weeks after pausing any investments in new startups. The workforce reduction, which impacted nine of Backstage Capital’s 12-person staff, was due to a lack of capital from limited partners, per fund founder Arlan Hamilton.

Here’s why it’s important: Backstage Capital has invested in over 200 startups built by historically overlooked entrepreneurs, while Hamllton herself has invested in more than two dozen venture capital funds. Despite having impact, no single firm can be immune from the difficulties of venture (or growing in an environment full of macroeconomic and cultural hurdles). Below is an excerpt of my story.

Without more support, it becomes difficult to close shop on new investments, bring more assets under management and bring more follow-on investments, Hamilton said.

“Somebody asked me, ‘why don’t you have more under management?’” she said during the podcast. “You gotta ask these LPs, you gotta ask these family offices, you gotta ask these people who ask me, ‘how can I be helpful,’ and I say ‘invest in our fund,’ and I never hear from them again.”

one chess pawn on a green elevated platform, with one on lower pink platform. startups and Market downturns

Image Credits: Jordan Lye (opens in a new window) / Getty Images

Africa charts its own course

TC’s Dominic-Madori Davis and Tage Kene-Okafor wrote a story about how the downturn is playing out in Africa, essentially answering why we should all be tuning into the continent’s activity this summer.

Here’s why it matters: Africa’s venture capital totals weren’t too shabby in the first quarter, but investors think that it may just be a reporting delay. If most of the deals were finalized before high interest rates, the war and inflation, experts say, we may see an economic downturn soon start affecting developing markets. The story doesn’t stop there; I’d read more to see what Tiger Global tells us and how August is shaping up to be a key month of movement. 

Arrows on the African landscape pointing up and down

The summer could decide this year’s fate of the African funding landscape.

Across the week

Seen on TechCrunch

OK, whose rocket just hit the moon?

This co-worker does not exist: FBI warns of deepfakes interviewing for tech jobs

Formerly rich NFT buyers party through the pain

Robinhood almost imploded during the GameStop meme stock chaos

FTX says no active talks to buy Robinhood

Seen on TechCrunch+

Your startup pitch deck needs an operating plan

3 questions for the startup market as we enter Q3

Disclose your Scope 3 emissions, you cowards

What’s a fintech even worth these days?

Until next time,

N

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Google will start erasing location data for abortion clinic visits

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In the aftermath of the Supreme Court’s decision to strip federal abortion rights in the U.S., many people are questioning how the apps they use every day might suddenly be turned against them.

As concerns mount over the endless well of data that tech companies built an entire industry around, Google is taking at least one step to mitigate some potential harm related to location tracking.

The company announced Friday in a blog post that it would remove location history data about some “particularly personal” places from a Google account shortly after someone visits. Locations that will have their data deleted include “medical facilities like counseling centers, domestic violence shelters, abortion clinics, fertility centers, addiction treatment facilities, weight loss clinics, cosmetic surgery clinics, and others,” according to the blog.

Google also noted that Fitbit users who use the device’s companion software as a period tracker currently must delete those entries one by one, but an easier way to “delete multiple logs at once” is on the way.

The change to location history will go into effect in the next few weeks, emptying one potential bucket of data that law enforcement could demand from the company. Google notes that its location history feature is off by default for people who use its services, but if you’re not sure about that, it’s always worth double-checking what personal information you’re actively sharing with tech’s data brokers — particularly now.

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Micropyramid lenses triple the light that hits solar panels

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Stacks of teeny lenses that look like inverted pyramids could juice up solar panels, helping them capture more light from any angle on both sunny and overcast days.

Solar panels perform best in direct sunlight, which is why some solar systems track the big fireball across the sky, turning to face it for maximum light. Unfortunately, such tracking tech is pricey and moving parts can break.

Shortcomings like these motivated researchers at Stanford to develop an alternative. The resulting tech — named Axially Graded Index Lens, or AGILE for short — offers a way to boost the efficiency of static solar panels, even in diffuse light, authors Nina Vaidya and Olav Solgaard said in a peer-reviewed paper. Prototype arrays of AGILE lenses successfully concentrated light into a 3x smaller area, while retaining 90% of its power in the best-case scenario, and well ahead of more elementary concentrators when the light was more slanted (sometimes concentrators can sacrifice light intensity but come out ahead of gathering angle). 

Concentrating light to squeeze more energy out of solar panels is nothing new, but the authors point out that concentrators such as fresnel lenses and mirrors provide only “modest acceptance angles.” Incidentally, the pyramidal design also succeeds in looking glamorous in a render video released alongside the paper.

AGILE lens prototype shown in three stages of development

The AGILE lens prototype shown in three stages of development. A: Bonded glass. B: With aluminum sidewalls. C: With a solar cell absorbing light. Image Credits: Nina Vaidya

The internet is littered with neat ideas that could help us capture more energy from the sun. Many are inspired by things in nature, such as butterfly wings, fly eyes, flower petals and even puffer fish. The design for AGILE “did not come from nature,” says Vaidya, but the paper acknowledges that “there are features of AGILE that can be found in the retina of fish (e.g., Gnathonemus) and compound eyes in insects (e.g., Lepidoptera), where a gradient index is present as anti-reflection to maximize transmission as well as to enable camouflage.”

Though the researchers did not announce any plans to commercialize AGILE, the prototypes were designed with the solar industry in mind using readily available materials, according to a Stanford press release.

“Abundant and affordable clean energy is a vital part of addressing the urgent climate and sustainability challenges,” said Vaidya. “We need to catalyze engineering solutions to make that a reality.”

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