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When On Deck had to lay off staff twice within a few months, its co-founders Eric Torenberg and David Booth posted a note that promises to focus more. This marked the company’s return to its original customer cohort – founders in need of networks and advice.
Since that day, I’ve been digging into what happened at On Deck that led to a series of layoffs and reassignments. We know this producing community has its challenges. But what those challenges are and how they play out go beyond the employees who lose their jobs.
One month later, we have some answers. On Deck is spinning off half of its career services-focused business into a new startup set to launch in October. Thorenberg, the founder, is stepping down from his co-CEO position after just a year, returning to the role of executive chairman. And the vision for an On Deck accelerator has completely fallen apart, with the company just launching a new fund to invest in startups on market terms. I learned how a torn Tiger Global term sheet was one of the first dominoes to fall, according to sources, forcing the company to prioritize growth over runway.
Even if you’re not interested in the ins and outs of this startup, On Deck’s main point and challenges offer a window into the complexities of building a business. Especially after last week’s Launch House news, I think it’s fascinating to see two examples of how startups trying to secure a network in exchange for equity and/or cash are having trouble growing at different points.
In Launch House’s case, the allegations highlight poor management. In On Deck’s case, product changes highlighted a fragmenting focus. Both, though vastly different stories, explained how selling something as vague and broad as “community” is not so easy to achieve. I’ve talked a lot about how a community is more than a Slack group where people exchange ideas; it is living, breathing, and requires more than mere expression. That alone is hard to enforce, but add the exponential growth needs of a venture-backed startup and the trade-offs begin.
It’s hard to get a founder to pay for a network without knowing exactly how that network will benefit the founder. How do you convince founders that your network is much different than the one they find for free? How do you decide on buy-in or create a space that is not just transactional? And how do you get people to wait for the long-game payoff instead of the short-term payoff?
For the full story, read my article: “On Deck tried to do everything. Now he tries to do less, better. If you like this newsletter, do me a favor? Forward it to a friend, share it on Twitter, and tag me so I can thank you for reading it yourself!
The perfect track is a myth
As for advice, technology loves standardization. Startups are often told there are certain metrics to achieve, deadlines to meet, and schedules to measure against. But for TechCrunch+ this week, I delved into the idea that having the perfect runway as a startup is a myth.
Here’s why it’s important: The numbers are nuanced. Of course, 20 years of runway might just mean that the startup is so close to profitable that it has unlimited runway and is confident about its future. But it can also mean that the founder is not taking as many risks as they should. Some might argue that 20 years of track is too much track. I mean, spend a little, right?
The merger did not grow
Last week, Equity and Chain Reaction teamed up to talk about The Merge. It’s a perfect episode for people who, like me, didn’t know the ins and outs of the event, or really understand its impact, or understand why it sounds like a crypto-specific version of a lunar eclipse.
Here’s why it’s important: After listening to the episode, TC crypto reporter Jacqueline Melink has a follow-up that just hits home differently. It reports that Ethereum has fallen more than 17% after what some described as a “very overhyped” merger.
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 will register with the latest and greatest in insurtech.
Here’s what’s new: Our latest episode on equity delves into why the sector, somewhat clouded by its public market companies, is still getting millions from venture capitalists. As my work friend Mary Ann Azevedo reports, the future of insurtech investing is focused on more niche cases. It’s good to see this specialization, at least in the early days of a launch, helps it stand out.
A few notes
We’re less than a month away from TechCrunch Disrupt and I’m already emotional. It will be a blast, stimulating conversation, awareness and a week not to be missed. here it is full agendaand here’s where you can get your tickets.
While I have you, do you want to hang? As you know, I host Equity, which comes out three times a week and is TC’s longest running podcast. We’ve also got some top songs for you to listen to, including our own a crypto-focused show that goes by Chain Reaction and a show focused on the founder, which is called Found. The TechCrunch podcast is also unmissable, so pay attention to all the good shows they put on.
Seen on TechCrunch
Seen on TechCrunch+
By the way, I went through Dreamforce this week in downtown San Francisco and it was quite a sight. I met iconic rock climber Alex Honnold, saw Marc Benioff and Brett Taylor talk about the future of genies, and was even reminded by Salesforce’s head of communications that this was a conference for Salesforce, not Twitter (where Taylor is chairman of the board).
Anyway, he was a jerk. Same time, same webpage, next week?