Tech’s next great mafia? Laid-off talent

February 19, 2023

Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. To get this in your inbox, subscribe here.

After tech’s massive exodus of talent, we’re starting to see laid-off talent start companies that are ambitious and aspirational in aim. I’m talking about the legal analyst who got let go from Better.com starting a legal tech startup, or the head of safety at Twitter starting a Twitter rival with safety at the core. It’s refreshing, and it’s palpable.

Is it something in the water? Is it breeding grounds from a specific subset of companies? Is it just easier to start a company these days? Unfortunately, it’s hard to pinpoint what exactly is reframing risk in 2023. It may just be that 2022 is over — or it may just be that tech’s great reset has reminded some that it’s time to take the jump, as nothing can be taken for granted.

It is worth noting that there’s only a subset of people who can afford to take this risk, especially after haphazardly losing a safety net from an employer contract. In a previous piece, I looked at how some tech workers are responding to risk by doing more due diligence on potential employers, taking on two jobs, otherwise known as over-employment, or reframing their personal finance mindset.

The ones that can afford to jump into building might be a smaller cohort, but oh do they have stories to tell. Read my latest piece that digs into this trend of spin-offs in TC+: Tech layoffs are creating a new era of scrappy (and humbled) founders.

If you still want to read more about how the job market is doing, I have two add-ons! Read this latest by Ron Miller, which gives us some needed hope on why the tech job market might not be as shaky as we think. You can also find a comprehensive list of all of 2023’s layoffs in this list, put together by our SEO champion Alyssa Stringer.

In the rest of this newsletter, we’ll talk about a new podcast on one of tech’s biggest startup competitions, a nudge of fundraising honesty and some surprising data around trends that are fizzling out. As always, you can follow me on Twitter or Instagram to continue the conversation. I’m also writing on my personal blog, if you’d like to follow along with the 1,821 other people who come to hang and be too wordy.

Inside Startup Battlefield

Ready for a newsletter for your ears, anyone? The TechCrunch Podcast Network has a new podcast — and it’s taking you inside one of the most anticipated startup competitions in the world: Startup Battlefield at TechCrunch Disrupt.

Here’s why it’s important: The four-part series gets into the entire process behind the competition, from the application to the winner, and I’m already eagerly waiting for the next episode (even though I was literally front row when this all played out). It’s a must listen for hopeful applicants, curious VCs and anyone who cares about the storytelling behind early-stage startups.

Listen to the first episode here, or wherever you find podcasts.

Caretakers, ageism and other topics venture needs to stop overlooking
Turning waste water into water that works with Alex Rappaport from ZwitterCo
TechCrunch Live Podcast: Why you should buy your kids a cash register
TechCrunch also has a great show on crypto, a show that interviews founders, one that details how our stories come together and more!

Image Credits: TechCrunch

“You can be fundraising forever”

I spoke to Meena Harris, the creator of Phenomenal Media and the niece of Vice President Kamala Harris, and Helen Min, the former head of marketing at AngelList, Plaid and other top tech companies. They’ve teamed up to launch Phenomenal Ventures, which just closed a $6 million debut fund with top-tier investors to back enterprise SaaS, fintech and future of commerce companies.

Here’s why it’s important: We got some candidness that VCs are filling up my DMs over. The fundraising process for Phenomenal Ventures’ fund, per Min, took around a year. “I am very transparent about this and I wish more people were; we set out to raise a larger fund,” she said, adding that they closed the first half of the fund in the first three weeks of fundraising.

Eventually, due to the slowdown of the market and LP freeze-ups, Harris and Min decided that they would stop fundraising after their first close. “There’s a real trade-off between the time that we spend fundraising and the time that we can actually spend with deal flow and meeting founders and helping our portfolio companies, so we decided to call it,” Min added.

Bain Capital has closed its second Tech Opportunities fund with $2.4 billion
Wefunder’s equity crowdfunding platform has officially expanded to the EU
Free Agency CEO seems to care more about control than the company, former employees say

Image Credits: Maria del Rio (opens in a new window)

The follow-up

In her latest piece, TC’s Sarah Perez asks, “Was there a Twitter exodus or just a Twitter pause?” She checks in on how the range of Twitter alternatives are doing since Elon Musk took over Twitter, ushering both a vocal exodus and a rise of clones.

Here’s why it’s important: In her words, “The data indicates that many apps continue to grow to a lesser degree while other apps have seen growth decline. But it also shows that Twitter itself was never significantly impacted, at least in terms of new app installs.” But there’s more; she also explores how Twitter’s usage has been impacted by a spate of, critical yet loud, press, and how Reddit and Discord fit into the conversation.

And speaking of fizzles, Perez also reports that the AI photo app trend has already slowed, according to new data.
Snapchat announces 750 million monthly active users
Twitter delays launch of its new API platform again

Image Credits: Bryce Durbin / TechCrunch

Etc., etc.

Operational assistance is in vogue this year: SignalFire announced $900 million in new funding and announced an executive-in-residence program, which pairs portfolio companies with tech leaders.
AI, Bye Bye: AI companion Replika has made changes that shut down erotic conversations that the technology was having with users. The sudden change has left some users heartbroken, reports Vice, and is a reminder of the real consequences behind artificial intelligence’s boom going unchecked.
Remember the public markets? According to The Information, Reddit is aiming for an IPO this year.
Throwback Saturday: If you missed Startups Weekly last week, catch my last issue here: Cities, cycles and San Francisco’s return.
Let’s hang on campus? TechCrunch is coming to Boston on April 20. I’ll be there with my favorite colleagues to interview top experts at a one-day founder summit. Book your pass ASAP! Speakers include Techstars’ Kerty Levy, Construct Capital’s Dayna Grayson and NFX’s James Currier.