The 'VP of Nothing': Why Founder-Friendly Companies Need This Role

Startups Weekly: The Evolving Role of Founders

Welcome to Startups Weekly, offering a people-centric perspective on the latest startup news and trends. To receive this directly in your inbox, subscribe here.

Dorsey’s Resignation and Founder-Led Companies

Recent discussions have centered on the implications of Jack Dorsey’s departure from Twitter (and subsequently, Block). However, several statements within his resignation announcement continue to resonate.

Dorsey posited that the emphasis on a company being “founder-led” is potentially restrictive and represents a critical vulnerability. He expressed his dedication to establishing a structure where the company could operate independently of its founders.

The Measure of a Strong Team

A true indicator of success for a founder lies in building a team capable of functioning effectively without constant oversight. If a team’s performance falters significantly during a founder’s absence, requiring frequent communication, it highlights a weakness in the team’s autonomy, not necessarily the founder’s importance.

Redefining Roles and Responsibilities

Last month, we explored the importance of clearly defining the distinctions – in both ownership and incentives – between founders, founding team members, advisors, investors, angel investors, and early employees. This week, the focus shifts to recognizing when it’s time to move beyond these initial designations, or at least allow them to evolve.

As Floodgates partner Iris Choi noted in a recent podcast concerning founder-friendliness, founders ultimately risk becoming the “VP of nothing.”

Due Diligence and Founder Transition

While the necessity of a startup’s independence from its founder is widely acknowledged, the process of transitioning from an essential to a non-essential role can be challenging, particularly given the current pro-founder climate.

We anticipate a shift in due diligence practices, extending beyond an assessment of a founder’s long-term vision for their sector. Entrepreneurs may face scrutiny regarding their ability to recruit talent, adapt their strategies, and recognize when to relinquish control.

Separating the company’s identity from that of its founder is crucial for long-term sustainability, but will necessitate open and honest discussions about acknowledging contributions.

Decentralized Authority: A Temperature Check

Interviews with founders and investors revealed varying levels of comfort with advocating for, and implementing, decentralized authority within the current market. For a more in-depth analysis, please refer to my TechCrunch+ column, Founders need to uncouple their own idea from its creator. Alex and Amanda also contributed to the discussion, challenging the notion of founders as exceptional individuals and advocating for a more realistic assessment of their roles.

Other Startup News

This week’s newsletter also covers rebranding trends, unintentional customer churn, and recent layoffs within venture-backed companies. You can connect with me on Twitter @nmasc_ or on Instagram @natashathereporter.

A Shift in Branding: The Case of Block

The recent period has seen a notable trend in corporate rebranding. Following Jack Dorsey’s departure from Twitter, his other venture, Square, underwent a transformation, adopting the new name Block.

This alteration wasn't a spontaneous decision; reportedly, the change had been planned for more than twelve months. However, its timing coincides with Facebook’s recent corporate rebranding to Meta, suggesting a broader industry movement.

Understanding the Block Rebrand

Block is intended to represent the expanding range of products developed by Square. These include the music streaming platform Tidal, the mobile payment service Cash App, TBD, and the original Square platform itself.

The new name also signals the company’s increasing focus on blockchain technology and cryptocurrency. While the name change is not universally acclaimed, the company’s leadership structure is generating considerable discussion.

Recent developments in the crypto space include:

• Analysis of Jack Dorsey’s exit from Twitter.
• The departure of David Marcus, Meta’s leading crypto executive.
• Coinbase’s acquisition of the team behind the BRD crypto wallet.
• Skepticism surrounding the viability of Decentralized Autonomous Organizations (DAOs).

These events collectively highlight a dynamic and evolving landscape within the technology and finance sectors.

Spotlight on This Week’s Rising Startup

Introducing Butter! This innovative startup is focused on assisting subscription-based businesses in mitigating unintentional customer churn. Specifically, they address churn caused by payment failures.

The company’s approach isn’t centered around sales technologies. Instead, Butter functions as a fintech service designed to identify issues with subscription renewals and sign-ups. These issues often stem from declined charges originating from different countries.

Key insights, as shared by CEO and co-founder Vijay Menon, highlight a gap in the market. Existing major payment processors, like Stripe, largely prioritize domestic payment services.

Butter aims to cater to rapidly expanding markets including Brazil, India, and Mexico. Prior to founding Butter, Menon successfully assisted Microsoft in restoring over 10 million Xbox Live subscriptions.

This recovery effort resulted in more than $100 million in revenue being salvaged. Now, Butter is equipped with $7 million in funding to expand its impact.

Other Noteworthy Startups

Several other companies are making waves in the startup ecosystem.

• Massive is developing a platform to allow users to monetize their unused computing resources for app usage.
• Sounding Board has secured Series B funding to transition coaching services into a Software-as-a-Service (SaaS) model.
• Kayak is co-leading a $60 million Series C investment in Life House, focused on redefining the hotel experience.
• Goalsetter has raised $15 million to expand its business-to-business offerings of a financial literacy application for children.
• Jump is providing freelancers with greater financial security through the provision of permanent contracts modeled after the French system.

A Compensation Adjustment Alongside Workforce Reduction

Instances of companies simultaneously increasing capital and reducing their workforce are becoming increasingly prevalent. This week, Better.com, a digital mortgage lending company, revealed a $750 million cash injection in anticipation of entering the public market.

Subsequently, within a day, the company announced a workforce reduction, confirming a 9% decrease in its total employee count.

Key Takeaway: According to Mary Ann Azevedo’s reporting, it is plausible that the staff reductions were a prerequisite for securing the funding agreement. However, the juxtaposition of adding substantial funds and simultaneously implementing layoffs remains a stark contrast.

The workforce reductions are primarily affecting employees in the United States and India. Although the current situation doesn't mirror the extensive unicorn layoffs seen in 2020, growing anxieties surrounding the omicron variant and a more challenging market landscape for certain industries suggest potential future instability.

Moving forward:

• Acqui-hiring is being explored by more startups in response to unicorn layoffs.
• Support systems are emerging for individuals impacted by the recent surge in tech layoffs.
• Strategies for employee retention, beyond simply preventing departures, are being implemented by companies.

TechCrunch Gift Guide 2021

This guide presents a curated selection of gift ideas as featured by TechCrunch in 2021.

The following lists highlight various tech-focused presents for a diverse range of interests.

Cannabis Enthusiasts

For those interested in cannabis, nine high-tech smoking devices were recommended as potential gifts.

These gadgets offer innovative ways to enjoy cannabis consumption.

Gamers

Fifteen gift ideas were suggested for gamers, particularly when next-gen consoles are unavailable.

The list provides alternatives to the latest gaming hardware.

Remote Workers

Eight excellent gifts were identified for individuals working from home.

These presents aim to enhance productivity and comfort in a home office setting.

Frequent Video Callers

Eleven gift ideas were curated for friends who participate in a large number of video calls.

These gifts focus on improving the video conferencing experience.

Smart Home Automation

TechCrunch featured two guides related to smart home technology.

One guide focused on a starter kit, while the other explored more advanced smart home solutions.

Plant Lovers

The best tech gifts for plant geeks were highlighted.

These gifts combine technology with a passion for plants.

Young Builders & STEM

More than twenty STEM toy gift ideas were presented for aspiring young builders.

These toys encourage learning in science, technology, engineering, and mathematics.

The selection aims to inspire the next generation of innovators.

Weekly Tech Roundup

As reported by TechCrunch

A new credit card designed specifically for cannabis dispensaries has been launched by professionals with experience in both the cannabis industry and banking.

Apple has revealed the recipients of the 2021 App Store Awards, alongside a list of the year’s most frequently downloaded applications.

Spotify’s annual Wrapped feature for 2021 has been released, now including video messages from artists, a collaborative feature called Blend, and an interactive game.

Featured on TechCrunch+

Singapore is rapidly establishing itself as a major fintech hub, with projections estimating $3 billion in investment for 2021.

The initial public offering (IPO) of Samsara, a company specializing in IoT data collection, is anticipated to be a noteworthy event.

Recent Black Friday sales data suggests a potential deceleration in the growth of e-commerce.

Grab, a prominent super app, has commenced trading following a substantial merger with a special-purpose acquisition company (SPAC).

The concepts of product-led growth and signal substitution syndrome have been explored in a comprehensive analysis.

Wishing everyone a weekend comparable to the successful week experienced by Bret Taylor.

N