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When your startup’s core mission is set to be overturned

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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.

Hey Jane, a digital health startup that scales access to abortion pills, makes sense. It’s a direct-to-consumer pharmacy that aims to meet consumers where they are, which is especially important as the pandemic’s extended stay continues.

Hey Jane’s core product has significant red tape to deal with. It’s main product, abortion pills, are banned or restricted in several states. Add in the fact that Roe v. Wade is set to be overturned, and the world’s future could clash with the startup’s mission to expand healthcare. Hey Jane pretty much underscores the potential — and promise — of telehealth startups. But it also operates at the heart of an over-politicized issue.

Earlier this month, I wrote about how digital health startups are bracing for a post-Roe world. Then, Hey Jane co-founder Kiki Freedman said that the overturn makes abortion care via mail “now likely to be the most viable form of access for most of the country.” A hurdle, she expects, will be a lack of education among consumers on medication-induced abortions. The majority of abortions performed in the U.S. are via medication, except she says that a minority of people are educated about the nuances of medical abortion. “It’s imperative that we continue to educate people about this safe, effective and common abortion option,” she wrote in a statement.

But now I want to do a follow-up to these next-day reactions. Next week, I plan to interview Freedman for TechCrunch’s Equity podcast and ask her about how to build a company when the mission may be irreversibly challenged by our government; we’ll talk about the origin story, and how they plan to pivot in the future. I want her to tell me what the world is getting wrong about telemedicine’s ability to answer the biggest questions in health right now, and where startups could fit into the solution going forward. Also, are they actually raising a growth round? For the answers, make sure to tune into the Equity episode wherever you get podcasts, and, heck, why not start now? 

In the rest of this newsletter, we’ll talk about another round of startup layoffs, why your MVP isn’t the MVP, and a fintech company betting that it can make even your local credit card crave some Netflix & Chill time.  As always, you can support me by forwarding this newsletter to a friend or following me on Twitter or my blog.

More layoffs in startupland

There’s unfortunately more where last week came from. Tech workers experienced another hard week of layoffs and hiring freezes, coming from startups such as Section4, Latch and DataRobot. We rounded up some of the known workforce reductions in one post. 

Here’s why it’s important: Impact was felt across industries ranging from education to security, as well as stages from a post–Series A startup to a recently SPAC’d business. To me, that signals just how pervasive this pull-back truly is, regardless of what phase your company may be in. It’s not just the cash-rich tech unicorns that are cutting staff; it’s the early stage startups, too.

Laptop computer engulfed in flames

Image Credits: PM images (opens in a new window) / Getty Images

Your MVP is neither minimal, viable nor a product

I’ve been thinking about this headline from Haje Jan Kamps for the past week because it challenges one of those preconceived startup notions that everyone else happily adopts without too much of a fight. Aka, my sweet spot (and my weakness). In this op-ed, Kamps gets into why MVP is “such a profound misnomer” and what to focus on instead.

Here’s why it’s important: Kamps’ new framework, and series of questions that you should be asking your first product, should make the complexities of MVPs a little more approachable. And II’ll end with his kicker:

“I don’t have a suggestion for a better name for MVP, just don’t fall into the trap of thinking of it as a product, being viable or, necessarily, being small, simple or easy. Some MVPs are complex. The idea, though, is to spend as little of your precious resources as you can to get an answer to your questions.”

Image of a large hand controlling a smaller puppet

A large hand controls a smaller tiny toy figurine or puppet

Jay-Z’s Queen A

For the deal of the week that may have flown under your radar, I choose Altro! Co-founded by Michael Broughton and Ayush Jain, this fintech startup believes that credit access should be free — so it found an atypical way to help people build credit.

Here’s why it’s important: Altros, which raised an $18 million Series A this week, helps folks build credit through recurring payment forms such as digital subscriptions to Netflix, Spotify and Hulu. It stands out because a lot of banks targeted toward low-income, historically disenfranchised people want to circumvent credit scores altogether — while Altros wants to tweak access to an established system. I highly recommend reading Mary Ann’s story about the company’s origins, fundraising journey and spotlight — and subscribing to her newsletter, The Interchange. 

Keys on a dark patterned background

Image Credits: Getty Images

Across the week

Seen on TechCrunch

Seen on TechCrunch+

Until next time,

N 

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India’s Tata Motors wants to sell 50,000 EVs by end of fiscal year

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Mumbai-based automaker Tata Motors wants to sell 50,000 electric vehicles by the end of the fiscal year ending March 31, the company’s chairperson Natarajan Chandrasekaran said during a shareholders’ meeting on Monday.

In the 2023/24 period, Tata — which produces passenger cars, trucks, vans, coaches, buses, luxury cars, and construction equipment — aims to hit 100,000 EV sales, according to Chandrasekaran, as reported by Reuters.

The push towards EVs follows a national plan to ensure that up to 30% of total passenger car sales in India are electric by 2030, up from about 1% today. E-scooters and e-bikes will account for 80% of two-wheeler sales, up from 2% today. Given the Indian government’s high import duties on EVs, getting citizens to make the switch to electric will largely depend on the success of local production.

After attempting to bring its EVs to the Indian market, Tesla appears to have abandoned efforts to set up a factory in the country. Tesla usually has a “try before buy” approach to moving into new markets — it imports vehicles to see how sales go before investing the time and money in building a regional factory. Transport minister Nitin Gadkari said Tesla was welcome to build a factory in the country, but that it won’t allow the automaker to bring in vehicles from China to sell and service, so Tesla hasn’t moved forward with those plans.

Tata currently sells three EV models, including Nexon EV, Tigor EV and the newest Nexon EV Max. Unlike the path many U.S. automakers have followed of building new EV production lines from the ground up, Tata says it’s able to keep costs down for the Indian consumer by repurposing a successful internal combustion engine model, the Nexon, and outfitting it with a battery pack. The Nexon starts at around $19,000, which isn’t exactly cheap for the average Indian driver, but is certainly within the range of the country’s upper-middle class.

Tata commands 90% of India’s electric car sales, and appears to be on track to reach its goal of selling 50,000 EVs by March 2022. The automaker’s June sales results show 45,197 total units sold, out of which 3,507 were electric — the most Tata has ever sold, and up 433% from 658 last year.

Chandrasekaran was optimistic about the trajectory of Tata’s performance this fiscal year with the overall supply situation, including that of semiconductors, improving and stabilizing.

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Without a clear ask, your pitch deck is useless

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You’ve brushed off your Keynote skills, you’re giddy that you’re finally going to be able to start paying yourself a living wage, and you are excited to start pitching your startup’s next round of funding to your investors. It’s heady times, for sure, but hit the other pedal there for a moment, friend — you may be forgetting something.

After working with hundreds of founders on raising money — including the fantastically popular Pitch Deck Teardown series here on TechCrunch+ — there’s one slide that almost every founder gets woefully wrong. The slide is often referred to as The Ask. Or, as one investor friend calls it, the “what is my $10 million going to buy me”? slide.


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The Ask is a sensitive topic to a lot of inexperienced entrepreneurs, which makes sense. Trying to right-size a funding round can be a little overwhelming, and there are a thousand different ways of building a startup. If you were successful in raising $8 million, you can do things one way. If you raised $12 million, you could perhaps launch more features of your product a little faster, or experiment more, or go after an additional market earlier. You know that. Your senior staff knows that. Your investors know that. But regardless, you need a Plan A.

What do those key metrics need to look like in order to raise not this round of funding, but your next one?

What do you need to do?

A lot of founders will tell you that they are trying to raise enough money to survive for the next 18 months. That’s probably true, but that will be true regardless of how much money you raise. A better approach is to think about what you need to accomplish to raise your next round of funding, and then work backward from there. This is probably a combination of metrics and milestones.

Metrics are the measurable parts of your business that grow and evolve over time. One of the best metrics you have is revenue, but there could be many others: the number of sales, average order value (AOV), monthly or annual recurring revenue (MRR or ARR, respectively), customer acquisition cost (CAC), customer lifetime value (LTV), daily and monthly active users (DAU and MAU), retention rate (usually expressed by its inverse, churn rate) and much more. What do those key metrics need to look like in order to raise not this round of funding, but your next one?

Milestones are also measurable parts of the business, but instead of tracking them over time, they tend to be binary: You’ve either hit a milestone or you haven’t. For startups, this could be key hires; finding the perfect, experienced CFO that can help take your company public is one major milestone a lot of companies at some point need to hit. Product launches (coming out of beta), launches in particular markets (launching only in California) and localization (launching your app in Spanish and French, for example) are also important milestones. Financial milestones are also common; the first time you make a single dollar from any customer is a huge shift in the business. When a customer, on average, starts to make you more money than it costs you to acquire them is another. For earlier-stage companies, completing a customer validation phase by talking to, say, 100 potential customers is a milestone.

When you’re raising money, you will be mapping out a set of milestones that you need to hit in order to validate your company. In addition, you’ll set a number of trigger points for metrics — hitting $1 million ARR, having 5,000 daily active users or finding a combination of customer acquisition channels that means you can acquire customers at a reasonable blended CAC, for example.

So let’s examine how to put together a great “ask” slide by ascertaining what it takes to determine how much you need to raise, how to create a specific set of goals and how to bring it all together in a coherent whole.

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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.


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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

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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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