Welcome to Startups Weekly, a new human experience on startup news and trends this week. To get this in your inbox, Subscribe here.
Among the many phrases uttered by entrepreneurs, the one that bothers me the most is: “It’s not what you know, it’s who you know.” The phrase may be intended to get people with impostor syndrome to remember the importance of simple cold emails, but it often comes as a new way to remind people that exclusive networks rule the world.
Which is why I’m hoping this is the year the social media platform for back-channeling actually takes off. At their best, backchannels can help anyone who doesn’t have the Stanford Seal get approval, and thus bet on it. This process can also help prevent predatory investors from winning deals, and the effect of the process is obvious, but the incentives for all parties to participate are somewhat skewed. Some investors still scoff at the idea that their portfolio companies might be asked to review what it’s like to work with them; Likewise, founders are surprised when Stories, not Cultureamp polls, are where truly honest feedback lives. why? In a world where due diligence evolves somewhat to become rather fragile in the early stage, back-channeling simultaneously moves from a deep conversation about strengths and weaknesses to a relationship of thumbs up or rejection.
Additionally, far from superficial joking, some of the most powerful people in technology today have their eggs in many, many baskets – which means that those who want or can talk about them critically can either be financially (or emotionally) constrained in saying this.
my pitch? Finally, we’ve got a trustworthy platform where back-routing can happen in an accessible and fair manner. There is already an anonymous private subaddress to the founders in many different forms, but I’d love to see an app that expands access so that anyone can check out the suggested added value.
For more of what I do, check out my TechCrunch+ column I did with Equity co-hosts Alex Wilhelm and Mary Ann Azevedo: 3 opinions on how due diligence will change in 2022. We’ve also recorded a podcast if you prefer the newsletter to track your ears, instead.
In the rest of this newsletter, we’ll talk about Wordle, future revenue 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_.
word on wordle
The creator of the app on everyone’s mind, not anyone’s app store, spoke with TechCrunch about Wordle’s weak rise. The game, in which users guess a five-letter word in six attempts, has grown from less than 1,000 players to two million players in weeks.
Here’s what you need to know: As Owen Williams explains, Wordle’s sense of nostalgia isn’t liked by everyone. The game is running Punished by app stores for choosing the open web. Here’s how he put it in his last column at TechCrunch:
Wordle faces a threat we haven’t seen yet: a game developer is primarily penalized by app stores for choosing to build with open web technologies, rather than a native app. Not only does the Apple App Store allow this kind of behavior, but there is a bit of a recourse – because as far as Apple is concerned, Wordle doesn’t exist, since no native app was built.
There is no way for a fully functional, web-capable web app developer like Wordle to claim their name in the App Store, and no way for them to list their website to get users to the right place and defend themselves from imitators. In fact, Google does allow developers to upload some types of progressive web apps to the Play Store, although at the time of writing, Wardle does not appear to have chosen to do so. If he wanted to defend his game on the Play Store when a copy appeared there, he would at least have the option to do so.
Consumer love is a fickle thing:
And start the week…
Arch! Software-as-a-service fintech platform emerged from stealth this week with $150 million in debt Funding and $11 million in seed funding through the 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 everything on a single technology platform.”
Here’s what you need to know: As we discussed in stocks this weekArc is one of those startups – similar to Brex – that wouldn’t have existed 20 or even 10 years ago. The company is betting entirely on its own revenue on the assumed future revenue of other startups, a statement that demonstrates the maturity of the once-bad SaaS landscape.
Does Y Combinator read my scripts?
Last week, I wrote a newsletter about accelerators needing to update what they see as a “value-added service.” Then days later, Y Combinator announced it You increase the size of the checks and the share of ownership, in its accelerators. My argument then, and now, is that accelerators will need to deliver more than ever before to remain competitive; And YC’s new check shows that they want to get more aggressive on the same swing.
Here’s what you need to know: Despite the somewhat anticipated change, it was controversial among initial stage investors – who saw the move as more competitive than complementary to the broader ecosystem in the early stage. In fairness, we discussed both sides and Why it may be difficult for international founders to accept the New Deal.
New and New:
If you’re like me, you talk about the future of finance at least twice a day. Even for people smarter than us, it’s hard to keep up with decentralization in organisation, money and culture – which makes our upcoming event all the more exciting. On March 30, 2022, TechCrunch will host DeFi & The Future of Programmable Money alongside Sommelier Finance. It goes into everything from basics to moon launches, So sign up for this virtual event soon.
all the week
Seen on TechCrunch
The Dorm Room Fund returns to campus with a new $10.4 million fund
Attention: your company is watching you
Take-Two to acquire mobile gaming giant Zynga for $12.7 billion
Fintech Brex confirms $12.3 billion valuation, acquires Meta exec to serve as head of products
Career Karma gets $40 million to develop into an advantage for education technology employees
Viewed on TechCrunch +
What is left to learn from Theranos? you have friends
A Startup Founder’s Guide to Allocating Stock Grants
Brazil’s inland fintech and tech innovations are taking off in the face of regulatory winds
Despite the play-for-profit angle in blockchain games, I prefer paying
Data show that 2021 was a crazy year and a record year for venture capital
until next time,