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When On Deck had to cut its staff twice within a matter of months, its co-founders Erik Torenberg and David Booth published a memo promising to focus more. Thus marked the company’s reversal 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 string of layoffs and the refocusing. We know that producitizing community has its challenges. But what are those challenges and how do they manifest beyond employees losing their jobs.
One month later, we have some answers. On Deck is spinning out half of its business, focused on career services, into a new startup slated to launch in October. Torenberg, the founder, is stepping back from his co-CEO position after only a year, returning to an executive chairman role. And the vision of an On Deck accelerator has wound down altogether, with the company just launching a fresh fund to invest in startups at market terms. I learned how a plucked Tiger Global term sheet was one of the first dominoes to fall, per sources, forcing the company to prioritize growth over runway.
Even if you don’t care about the intricacies of this one startup, On Deck’s pivot 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 provide a network in exchange for equity and/or money hit growth pains at different points.
In Launch House’s case, allegations underscored poor leadership. In On Deck’s case, product changes underscored a fragmenting focus. Both, while extremely different stories, have explained how selling something as vague and broad as “community” isn’t that simple to pull off. I’ve spoken a lot about how a community is more than a Slack group where people trade ideas; it’s living, breathing and requires more than just expression. That in and of itself is hard to force but add in the exponential growth needs of a venture-backed startup and the tradeoffs 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 far more different than one that they find for free? How do you solve for buy-in or create a space that isn’t just transactional? And how do you ask people to wait for the long-game payoff instead of short-term wins?
For the full story, read my feature: “On Deck tried to do it all. Now it’s trying to do less, better.” If you like this newsletter, do me a quick favor? Forward it to a friend, share it on Twitter, and tag me so I can thank you for reading it myself!
The ideal runway is a myth
When it comes to advice, tech loves standardization. Startups are often told that there are certain metrics to hit, deadlines to meet and timetables to measure themselves against. But for + this week, I dug into the idea that having an ideal runway as a startup is a myth.
Here’s why it’s important: Numbers are nuanced. Sure, 20 years of runway could just mean that the startup is so nearly profitable that it has a limitless runway and that it is confident in its future. But it could also mean that the founder isn’t taking as many risks as they should. Some could argue that 20 years of runway is too much runway. I mean, spend a little, right?
The Merge didn’t surge
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 intricacies of the event or really understand its impact or get why it sounded like a crypto-specific version of a lunar eclipse.
Here’s why it’s important: Once you listen to the episode, TC’s crypto reporter Jacquelyn Melink has a follow up that simply hits different. She reports that Ethereum dropped more than 17% after what some described as a “way overhyped” Merge.
I’m experimenting with a new section in Startups Weekly, where each week we follow up with an old story or trend to see what’s changed since our first look. This week, we’re checking in with the latest and greatest in insurtech.
Here’s what’s new: Our latest Equity episode gets into why the sector, somewhat dimmed by its public market comps, is still receiving millions from venture capitalists. As my work bestie Mary Ann Azevedo reports, the future of insurtech investing is focused on more niche cases. It’s good to see that specialization, at least in a startup’s early days, helps it stand out.
A few notes
We’re less than one month away from Disrupt, and I’m already emotional. It’s going to be a blast, a pep talk, a realization and a week not to miss. Here’s the full agenda, and here’s where you can get your tickets.
While I have you, wanna hang? As you know, I co-host Equity, which goes out thrice a week and is TC’s longest-running podcast. We have some besties to listen to, too, including our crypto-focused show that goes by Chain Reaction and founder-focused show that goes by Found. The Podcast is also a can’t miss, so pay attention to all the good shows that they’re putting out.
How Blaseball’s fantasy sports fever dream is embracing the future
Brelyon is turning heads with immersive virtual monitors
South Korean prosecutors say Do Kwon ‘obviously on the run,’ ask Interpol to issue red notice
Tech is at the heart of the biggest chess drama in years
Kitty Hawk, the electric aircraft moonshot backed by Larry Page, is shutting down
Seen on +
8 investors discuss what’s ahead for reproductive health startups in a post-Roe world
Smaller Dreamforce still comes up big in first live meeting in three years
In Latin America, founders and investors seek to balance caution and optimism
A quick checkup on consumer fintech activity ahead of Q3 data
By the way, I swung by Dreamforce this week in downtown San Francisco and it was quite the spectacle. I met iconic climber Alex Honnold, saw Marc Benioff and Bret Taylor speak to the future of genies and even was reminded by Salesforce head of communications that it’s a conference about Salesforce not Twitter (where Taylor is the chair of the board of directors).
Anyways, it was a hoot. Same time, same web page, next week?