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Exclusive: As startup layoffs continue, some perspective

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As startup layoffs continue, some perspective

#startup #layoffs #continue #perspective

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.

Per Layoffs.fyi, a layoff tracker, over 16,000 tech workers lost their jobs in May, and June is off to a similarly brutal start. TechCrunch’s senior reporter Amanda Silberling and I have accidentally, and unfortunately, started working on a weekly column about the tech layoffs; what first started as a tip-over moment at Thrasio has soon expanded to startups regardless of sector, financing stage or if they had obvious growth tensions or not.

As the layoffs continue, it can feel like the same boilerplate story: number of those impacted, roles or teams that were reduced, severance package details and a vaguely generic statement from the CEO citing market turbulence as a key reason for the reduction. That doesn’t mean they aren’t any less newsworthy, but I’m always curious about the follow-up story opportunities. So, I asked all of you for some perspective, namely what else to ask and include in these stories.

From Jennifer Neundorfer: I’d love to see a follow-up piece with data on where people who are laid off go next. Do specific companies/industries scoop them up? Do some start companies? Something else entirely?

This question made my mind immediately jump to the talent opportunity that emerged in early 2020 when unicorns laid off chunks of staff in preparation for the pandemic. Then, I wrote a story about how startups were hiring pods of employees that got laid off, otherwise known as a not-so-new strategy of acquiring. At one point, a majority of online mortgage company Stavvy was full of ex-Toasters impacted by the restaurant tech’s 50% workforce reduction.

Beyond the rise of acqui-hiring, I think we’ll see some classic fellowships pop up that help recently laid-off people break into entrepreneurship. Neundorfer’s firm, January Ventures, started a program similar to that of Cleo Capital, which gives capital to aspiring founders to kickstart them.

The key here is that layoffs make people more risk averse, especially depending on their socioeconomic background. That mixed with the fact that Big Tech is on a hiring freeze, I don’t know what happens when a wave of people lose their jobs in a mixed messages hiring market.

But, if anyone has the data to answer this question, do send it on over!

From Anna Rasby-Safronova: Did the ones who were laid off see it was coming and how do layoffs affect mental health, anxiety and productivity of the rest of the team?

I’ve now spoken to dozens and dozens of former and current employees within struggling startups, and the reaction to layoffs largely feels like whiplash for those impacted.

The reason? The difference between layoffs in 2022 and 2020 is that many of the companies that are laying people off today are well capitalized, named unicorns just one year ago. In 2020, cuts could easily be cited to an unprecedented pandemic that complicated growth plans; while in 2022, cuts come right after leaders boasted insane growth just months prior. Add in the fact that people are still laid off in questionable ways — from severance showing up in payroll to long-winded memos — and I can’t imagine these cuts don’t aggressively impact morale internally and externally.

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International workers face additional complexities when laid off, as loss of employment can put visa status in flux. Even as companies put together spreadsheets or resume support, the added volatility could mean talented workers are forced to leave the United States altogether to pursue a better life somewhere else. These are stories we’re working to tell but are sensitive for obvious reasons.

From Luke Metro: Which fraction of company’s employees were hired in the last 1-2 years? I do wonder how many companies doing layoffs did massive hiring sprees during the frothiness of 2021?

The reason this question is important is that it colors how a layoff was engineered; and if it only impacts the newest members, the most nascent products or everyone across the board — from executives to entry-level hires. If it’s the latter, it may suggest that a startup is having deep inset problems that requires a mass reorganization of its resources. If a workforce reduction largely impacts those hired in the past year, it could mean that the startup needs to scale back some of its more experimental work and hone back to where it already has product-market fit. Thanks for the tip, I’ll start asking about this!

In the rest of this newsletter, we’ll talk about multiplayer fintech and the grocery delivery world. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter or subscribing to my blog. As a programming note, I am out on vacation next week so expect an abbreviated Startups Weekly column, still from yours truly, but with support from Henry Pickavet, Richard Dal Porto and the rest of the team.

Deal of the week

A Santa Monica-based startup, Ivella wants to build banking products for couples to take away money tensions. CEO and co-founder Kahlil Lalji is launching with a split account product that just raised $3.5 million in funding from Anthemis, Financial Venture Studio and Soma Capital. Other investors include Y Combinator, DoNotPay CEO Joshua Browder and Gumroad CEO Sahil Lavingia.

Here’s why it’s important: The best solution, so far, for multiplayer fintech has been joint accounts: meaning that two people will set up an account where they — sing it with me now — join their accounts and pull from the same pool. Instead, Lalji wants to build a split account: Couples maintain individual accounts and balances but get an Ivella debit card that is linked to both of those accounts.

With that shared card, couples can set ratios — maybe prorate what percent of each bill someone pays depending on their income — and Ivella will automatically split any transactions made using the Ivella debit card. This in and of itself was the largest technical challenge that Ivella was confronted with in its early days, describes Lalji:

“The place that a lot of people fall short, just like a lot of fintech falls short, is that they don’t break the mold of what banking looks and feels like,” Lalji said. “And because we’re focused specifically on couples, we want to build a product that feels not so sterile and not just like a bank.”

The delivery market is coming down from its pandemic highs

Our own Kyle Wiggers wrote about how the on-demand delivery market’s pandemic period of rapid growth is winding down. As he notes, there are signs of a correction including Instacart’s slashed valuation, DoorDash and Deliveroo’s stock price fluctuation, and Gorillas, Getir, Zapp and Gopuff conducting layoffs while others like Fridge No More and 1520 shut down entirely.

Here’s why it’s important: As I told Wiggers over Slack, the on-demand delivery market’s lack of profitability is often talked about in a, “that’s so obvious” and broad-stroke manner. This piece got into the heart of why grocery delivery is so expensive and more specific struggles startups face in this market.

Here’s what Craft Ventures partner and co-founder Jeff Fluhr, the ex-CEO of StubHub, said to TechCrunch; despite the fact that Craft has invested in a number of delivery companies:

“The fast delivery space is the epitome of exuberance of 2021: Investors were pouring money into cash-guzzling companies with flimsy business models,” he told TechCrunch in an email interview. “Fast delivery companies are capital intensive. They require local infrastructure, local people and local operations that are expensive to build out. As a result, all of these companies have been incinerating boatloads of cash over the past 12 to 24 months as they’ve expanded to new geographic markets. Of course consumers like the instant gratification of a pint of ice cream in 15 minutes, so revenues grew quickly, driven by a great consumer experience and word-of-mouth virality. Investors followed the growth paying no attention to the potential for profitability. But the notion that a startup can deliver on that promise profitably is a pipe dream.”

Across the week

Seen on TechCrunch

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Until next time,

N


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Exclusive: Ford Bronco Heading to Europe in 'Limited' Quantities – CNET – TalkOfNews.com

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Ford Bronco Heading to Europe in 'Limited' Quantities     - CNET

#Ford #Bronco #Heading #Europe #039Limited039 #Quantities #CNET

The auto industry is rife with forbidden fruit, whether it’s Americans lusting over small European cars or Europeans jonesing for high-horsepower American metal. But, as Europe is about to find out, not all fruit stays forbidden forever.

Ford on Monday announced that it will bring the Bronco SUV to Europe. Ford didn’t offer up too many details just yet, saying only that the Bronco will arrive in certain left-hand-drive markets, and that quantities will be “strictly limited.” It should go on sale in late 2023, so Europeans keen to get their hands on one will have some time to figure out how to do that.

By the sounds of Ford’s press release, the EU-market Bronco won’t be much, if at all different from the US-spec Bronco. All the off-road capability is still there, all the cabin tech remains the same, which means it should function as a pretty potent competitor to the Land Rover Defender. A veritable Sears catalog of accessory parts is available for owners to personalize their vehicles, as well.

It’s unclear which of the Bronco’s many variants will show up in Europe. In the US, we’re privy to eight different models, from the base model all the way up to the extra-chunky Raptor. Nearly all are available in a choice of two- or four-door versions, and a 2.3-liter I4 and 2.7-liter twin-turbo V6 are available at different points in the lineup, as well. Autocar’s report casts doubt on the 3.0-liter V6 Bronco Raptor making it to Europe, but hey, some Broncos are better than no Broncos, right?

Late 2023 isn’t exactly around the corner, so it’s likely that Ford will trickle out more information about European Broncos as we creep closer to the targeted on-sale date.

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Exclusive: Core Scientific, a top bitcoin miner responsible for nearly 10% of the network's hash rate, sold 7,202 mined BTC for $167M in June and now holds 1,959 BTC (David Pan/Bloomberg) – TalkOfNews.com

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Core Scientific, a top bitcoin miner responsible for nearly 10% of the network's hash rate, sold 7,202 mined BTC for $167M in June and now holds 1,959 BTC (David Pan/Bloomberg)

#Core #Scientific #top #bitcoin #miner #responsible #network039s #hash #rate #sold #mined #BTC #167M #June #holds #BTC #David #PanBloomberg


David Pan / Bloomberg:

Core Scientific, a top bitcoin miner responsible for nearly 10% of the network’s hash rate, sold 7,202 mined BTC for $167M in June and now holds 1,959 BTC  —  Core Scientific Inc., a top crypto miner, sold the bulk of its Bitcoin holdings in June as a steep drop in digital assets squeezes finances for even the leaders of the industry.


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Exclusive: Check Out This Drag Racing VW Beetle EV – TalkOfNews.com

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Check Out This Drag Racing VW Beetle EV

#Check #Drag #Racing #Beetle

The Late Brake Show

While it may sound a bit odd, people really like to convert old VW Beetles into electric drag-racers. The practice goes back twenty years, and back in 2011, two brothers shocked the world with their Black Current III electric Beetle. Now they’re back with an even more ridiculous car, the “V8-killing” Black Current IV.

Note: Several outlets are clinging to this story under false pretenses. The modified VW Beetle EV doesn’t have 6,500 horsepower—that rating is both outrageous and plainly incorrect. ‘The Late Brake Show’ acknowledges that it made a mistake, but other publications aren’t doing their due diligence.

We decided to share this story because it’s really freakin’ cool. It highlights a scene of enthusiasts who are integral to the rise of EVs. The horsepower doesn’t matter.

While previous Black Current EVs were based on very old VW Beetles, the new model is a heavily modified 2013 mk2 New Beetle. It now has a full carbon-fiber body, plus a custom 22kWh battery pack and 800V architecture. Notably, it runs on a total of four inverters, which diligently control the rotation speed of four permanent magnet Axial flux AC three-phase motors.

Brothers Olly and Sam Young, who built the Black Current IV, believe that it can run a quarter-mile in seven seconds or less. That would make it the “world’s quickest” electric vehicle, which is shocking, given that it’s a modified Beetle and it’s street legal. (The Young brothers haven’t brought this thing to top speed yet, so we can’t confirm how fast it actually moves.)

For reference, the Tesla Model S Plaid recently completed a 9.4-second quarter mile. And the current world-record holder, the Rimac Nevera, made its trip in 8.52 seconds.

This shouldn’t come as much of a surprise—the old Black Current III was a record-setter back in 2011, despite the fact that it ran on a repurposed milk-float motor (an electric motor from a UK milk delivery truck). The only reason why Olly and Sam Young started working on this new Black Current VI is because the previous model crashed at 140 MPH during a drag race in 2017.

Anyway, you should watch the above video made by The Late Brake Show. It covers the Black Current VI and its history in more detail than I’ve provided. Plus, it’s a video, and I know you want to see this weird drag-racing EV.

Source: The Late Brake Show

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