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I first dedicated Launch House in October 2020, when the co-founders described a strong focus on inclusion in creating Hacker Homes. At the time, a co-founder said, “I wouldn’t say we’re the next Y Combinator, but the next YC is going to look like this.” The company soon began raising venture funding for its vision of what a next-generation entrepreneurial ecosystem that combines the benefits of remote work looks like with the growing opinion around ‘community’. It won investment dollars from Andreessen Horowitz, Lightship, CAA co-founder Michael Ovitz, Chris Ovitz of Electric Ant, Mike Dudas of 6th Man Ventures and other angels.
now, Vox investigation last week highlighted specific allegations of harassment, sexual assault and abuse of power at Launch House. The reaction was complicated. The irony of the “build public” mindset is that when accusations and scrutiny surface, privacy — or at least opacity — is back in vogue.
As TechCrunch reports, some existing investors in the startup and its venture fund have issued public statements supporting the alleged victims and condemning the alleged behavior described by Vox in its article about Launch House. Meanwhile, Launch House confirmed to TechCrunch through a spokesperson that it is launching an independent third-party investigation through a retained law firm.
Days after the investigation went live, Launch House held a town hall with some members of their community. Co-founder Michael Hawke said the startup “dropped the ball by responding to this quickly enough [and] with enough compassion … that doesn’t reflect the values we’ve built this community on since day one and hold dear.”
“Put simply, we absolutely should have met with all of you earlier than today,” Hawke added, “What I can say now is that we’re ready to talk and we have a plan.” The conversation focused on three topics: what Launch House says it has done in the past, what it will do in the future, and how it plans to rebuild trust with female founders in their cohorts.
Vox’s investigation, Launch House’s response, both publicly and privately, and the community’s outrage or silence about the allegations that have surfaced are reminders that community is not a buzzword. This is a challenge. Some people may view LH as a caricature of the “VC-backed, community-based startup” trend, but it offers a real-life look at what happens when these “buzzing trends” meet a bull market, in a world far away, with limited checks and balances.
For the full story of key details in the private town hall, read my story: “Launch House owns private town hall, says investigation underway.” For investor and community reaction, read my story with Rebecca Shkutak, “The Launch House community responds to allegations of misconduct and harassment.”
In the rest of this newsletter, we talk about Y Combinator’s paranoia, fund manager turnovers, and the aftermath of one pandemic startup admitting it was wrong. Be sure to read the whole thing, as I’ve slipped a TC+ discount code, especially for Startups Weekly readers, into the post.
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Y Combinator is still paranoid
Y Combinator’s Michael Seibel, managing partner and head of the accelerator, is one of the most influential people in startups. He joined Equity to chat the meaning of demo day, the challenges of diversity and competition.
Here’s why it’s important: Given the fact that YC doesn’t do much press anymore, the interview cleared up some misconceptions. More on TechCrunch+ tomorrow, but in the meantime, here’s how he described the usefulness of demo days.
It’s hard for me to generalize in demo days. There are many different demo days around the world and I really don’t know how they work.
I would say that the YC Demo Day has two functions. The first is the obvious one, which is: introducing the companies and attracting potential customers. The second one is like a coercive function to the founders, right? Just [as] YC does not necessarily need an application deadline. In fact, we read applications throughout the year. But as a forcing function to [say] “Hey, there’s a date we want to get this thing done by, and it’s important,” [it] it really, really helps founders get up to speed faster, as opposed to a more generalized system.
I would say [Demo Day] it also helps investors. If I’m an investor and I’m talking to a company and I know they’re recruiting [at] Demo day after week, I might make my decision a little faster. So one of the things we tell founders who go through YC is [that] different companies will use Demo Day differently. And that’s OK. It’s a tool, and it’s your job to use it as best you can for your company.
Figma is coming out
Adobe snapped up Figma for $20 billionreminding us that M&A could indeed happen in 2022. As TC’s Ingrid Lunden reports:
The idea now will be to create a seamless connection between them and Figma, essentially building it as a native platform to bring them together. Adobe, of course, already had something similar in the form of AdobeXD. It’s unclear what will happen when that deal closes. Indeed, whether all of this will catch the attention of antitrust authorities will be worth watching: Adobe is already dominant in so many of the tools in use, and will now be the dominant platform player to introduce and provide all of these tools.
That’s why it’s important: Large-scale acquisitions have a ripple effect. In this case, Adobe has just joined forces with one of its biggest competitors in digital design. Figma will soon no longer be a private company and thus won’t have to share its specific financials, and Figma’s employees will presumably be a whole new generation of angel investors. There are also many investors who profited from this exit; a homogenous bunch, notes another.
I’m experimenting with a new section on Startups Weekly, where each week we track an old story or trend to see what has changed since our first glance. This week we’re back to look at Maven, a maker economy meets edtech game that raised $25 million in two years.
Here’s what’s new: The live learning platform announced a spin-off this week. Instead of creating courses taught by creatives, he focuses on courses taught by experts. This is another example of how when it comes to community implementation – this time in the sense of training – it can be a challenge to deliver. I appreciated the transparency of what they did wrong and what’s new for the future.
“We hypothesized that a creator with a large audience would have a great course and be able to deliver, and we were surprised that that hypothesis was wrong,” Kao said in an interview with TechCrunch. “Just because someone is creative doesn’t mean they’re going to run a successful course. Instead, we were seeing a lot of smaller instructors who were subject matter experts in their field and didn’t necessarily have a large audience, who wanted to put in the effort and put in the effort … doing really well on the platform.”
Wait. Look at him? Yes, I’m excited too. And while we’re on the subject of housekeeping, a few more notes:
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Seen on TechCrunch
Seen on TechCrunch+
And that’s the starter log for this week.