INSUBCONTINENT EXCLUSIVE:
TechCrunch is out hunting for bright spots in the startup world as we all come to grips with the pandemic — particularly where checks are
actually being written despite everything.
D2C is back to the future
First up this week, we surveyed top direct-to-consumer investors, and
they seemed pretty optimistic despite the struggles of some sector leaders
Here Lightspeed Venture Partners Nicole Quinn, for example, on investor activity versus current opportunity:
I would argue it is too weak as
investors look at the unit economics of some of the recent IPOs and think that is true for all of D2C
In reality, there are sectors such as beauty where many companies have product margins >90% or true brands such as Rothy where there is such
a strong word-of-mouth effect and this gives them an unfair advantage with far better unit economics than the average.
Other respondents
include: Ben Lerer and Caitlin Strandberg from Lerer Hippeau, Gareth Jefferies from Northzone, Matthew Hartman of Betaworks Ventures, Alexis
Ohanian of Initialized Capital and Luca Bocchio of Accel.
Arman Tabatabai has the full investor survey on Extra Crunch, while Connie Loizos
has a separate interview with Ohanian over on TechCrunch.
Proptech will be going (more) remote
Arman also ran a popular investor survey on
real estate and proptech a few months back, so a virus update edition was warranted given the existential questions facing the future of
Here one clarifying explanation from Andrew Ackerman of Dreamit Ventures:
Startups targeting residential landlords and property managers
Anything that makes tenants more comfortable like residential tenant amenity platforms (e.g.Amenify) or automates maintenance requests
(e.g.Travtus,Aptly), simplifies maintenance itself (e.gNestEgg) or eases operations like package receiving (e.g.Luxer One) are suddenly top
of mind.
VC investors have a saying, &Don&t make me think,& and right now, we are thinking hard about what COVID-19 means for our portfolio,
so don&t be surprised if we are a little slower than normal to write checks
That said, we are acutely aware of the fact that some of our best returns came from investments made during difficult times
Fortunately, we think quickly.
Read the full thing on Extra Crunch.
A new era for consumer tech
It no surprise that SaaS companies are
seeing new growth from millions staying at home
But what else is going on besides work? Josh Constine pulls together the rebirth of Houseparty, the integration of Zoom into popular social
networks and other trends today to elegantly explain the big picture: social tools actually being used like everyone had hoped(!).
What is
social media when there nothing to brag about? Many of us are discovering it a lot more fun
We had turned social media into a sport but spent the whole time staring at the scoreboard rather than embracing the joy of play
But thankfully, there are no Like counts on Zoom
Nothing permanent remains
That freed us from the external validation that too often rules our decision-making
It stopped being about how this looks and started being about how this feels
Does it put me at peace, make me laugh, or abate the loneliness? Then do it
There no more FOMO because there nothing to miss by staying home to read, take a bath, or play board games
You do you.
Check it out on TechCrunch, then be sure to check out our ongoing coverage of where this is headed: virtual worlds(!?)
Eric Peckham analyzed the sprawling topic in an eight-part series last month, then sat down for an in-house TechCrunch interview this week
to explain how he sees the pandemic impacting the existing trends.
More than two billion people play video games in the context of a year
There incredible market penetration in that sense
But, at least for the data I&ve seen for the U.S., the percent of the population who play games on a given day is still much lower than the
percent of the population who use social media on a given day.
The more that games become virtual worlds for socializing and hanging out
beyond just the mission of the gameplay, the more who will turn to virtual worlds as a social and entertainment outlet when they have five
minutes free to do something on their phone
Social media fills these small moments in life
MMO games right now don&t because they are so oriented around the gameplay, which takes time and uninterrupted focus
Virtual worlds in the vein of those on Roblox where you just hang out and explore with friends compete for that time with Instagram more
directly.
Some SEM prices are going down due to the pandemic
Danny Crichton put on his data scientist hat for Extra Crunch and analyzed
more than 100 unicorns across tech sectors and looked how how the pricing of their keywords has changed due to the pandemic/recession.
The
results aren&t surprising — there has been a collapse in prices for almost all ads (with some very interesting exceptions we will get to
But the variations across startups in their online ad performance says a lot about industries like food delivery and enterprise software,
and also the long-term revenue performance ofGoogle, Facebook and other digital advertising networks.
Big tech should do more to help
startups now
Besides offering wily developer platforms, I mean
Josh argued on TechCrunch that hosting costs and associated expenses should be spared or delayed by the dominant companies to be nice, and
to avoid crushing their own ecosystems.
Google, Amazon and Microsoft are the landlords
Amidst the coronavirus economic crisis, startups need a break from paying rent
Revenue has stopped flowing in, capital markets like venture debt are hesitant and startups and small-to-medium sized businesses are at risk
of either having to lay off huge numbers of employees and/or shut down
Meanwhile, the tech giants are cash rich
Their success this decade means they&re able to weather the storm for a few months
Their customers cannot.
On the other hand, now is also a good time for mid-sized startups to try to take market share from incumbents who
don&t act friendly enough to the rest of the startup world…..
Odds and ends
Eliot Peper, author of a variety of popular sci-fi and tech
fiction stories (and occasional TechCrunch contributor), has a new book out called &Uncommon Stock: Version 1.0& about a small startup that
accidentally crosses paths with a drug cartel
Current subscribers to this newsletter will find that the link above takes them to a free download (that ends Sunday).
I had been planning
to moderate a panel at SXSW on the topic of remote work, but other events flipped that on its head
The panel, featuring Katrina Wong, VP of Marketing at Hired, Darren Murph, Head of Remote at Gitlab, and Nate McGuire, Founder of
Buildstack, happened on Zoom
And now the video is available here — check out to get key tips on going remote-first from these experts.
Across the week
TechCrunch
Now
might be the perfect time to rethink your fundraising approach
How child care startups in the U.S
are helping families cope with the COVID-19 crisis
Private tech companies mobilize to address shortages for medical supplies, masks and
sanitizer
One neat plug-in to join a Zoom call from your browser
Extra Crunch
When is it time to stop fundraising?
Slack slowing growth
turns around as remote work booms
A look inside one startup work-from-home playbook
Lime valuation, variable costs and diverging categories
of on-demand companies
#EquityPod
From Alex:
The three of us were back today —Natasha,DannyandAlex— to dig our way through a host
Sure, the world is stuffedfull of COVID-19 news— and, to be clear, the topic did come up some — but Equity decided to circle back to its
roots and talks startups and accelerators and how many pieces of luggage does an urban-living person really need?
The answer, as far as we
can work it out, is either one piece or seven
Regardless, here what we got through this week:
Bignews from 500 Startups, andour favorite companies from the accelerator latest demo day
Y Combinator is not the only game in town, so TechCrunch spent part of the day peekin& at 500 andits latest batch of companies
We got into some of the startups that stuck out, tackling problems within the influencer market, trash pickup and esports.
Plastiq raised
$75 millionto help people and businesses use their credit card anywhere they want
And no, it wasn&t closed after the pandemic hit.
We also talked throughFast latest $20 million round led by Stripe
Stripe, as everyone recalls, was most recently a topic on the show thanks to a venture whoopsie in the form of a check from Sequoia to
Finix.1But all that behind us
Fast is building a new login and checkout service for the internet that is supposed to be both speedy and independent.
All the Stripe talk
reminded us of one of the startups that launched so it could beat it out: Brex
The startup, which has amassed over $300 million in known venture capital to date,recently acquired three companies.
We chatted through
thehighlights of our D2C venture survey, focused on rising CAC costs in select channels, the importance of solid gross margins and why
Casper wasn&t really a bellwether for its industry.
Listen here!
