All startups must grow, but as markets contract, conserving resources is a higher short-term priority.
Crypto exchange Coinbase is in the headlines this morning after news broke that it is rescinding some candidates’ outstanding job offers.
Yesterday, we reported that IRL, a social app, was laying off 25% of its staff a year after raising a $170 million Series A, even though it has enough cash to operate for another two years.
I don’t have any insight into IRL or Coinbase’s financials, but I can say with certainty that these companies will have a harder time hiring talented employees from now on.
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Tech isn’t like other industries: workers can explore uniquely personal interests while earning a sliver of equity in a potential unicorn.
But they also have options. If you’ve ghosted someone after extending a verbal offer of employment, that’s going to be a consideration for future candidates. People talk!
At this point, most tech workers are likely wondering when layoffs are coming to their company. To build trust and keep employees engaged, managers should optimize existing engineering resources, says Ammar Bandukwala, co-founder and CEO at Coder.
“High-performing IT teams — which could deploy and push code to production faster than their peers — experienced 60 times fewer failures and recovered from them 168 times faster,” he writes in TechCrunch+.
If you manage a software engineering team, I hope you’ll read and share.
Have an excellent weekend,
Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist
How to improve retention, growth marketing’s golden metric
After helping someone prepare dinner, I was aghast when they informed me that the broccoli stalks I’d just tossed into the compost were excellent for making vegetable stock, as a pizza topping, or adding to a stir-fry.
Jonathan Martinez’ latest TC+ article on growth marketing reminded me of this, since many companies are throwing away perfectly good data that can boost retention and conversion.
“It’s imperative to constantly analyze the sources driving growth at a detailed and bottom-of-funnel level,” he writes.
8 IT spending trends for the post-pandemic enterprise in 2022
Market research firm ETR contacted 1,200 IT leaders who oversee a yearly collective IT budget of approximately $570 billion to learn more about their planned spending over the coming year.
Although year-over-year spending is projected to rise just 6.7%, “the need for experienced IT personnel has accelerated, and hiring demand in the space has reached the highest level we have ever seen,” writes Erik Bradley, ETR’s chief analyst.
8 IT spending trends for the post-pandemic enterprise in 2022
What connects the stock market contraction to startup valuations?
Without striking a gloomy note: tech layoffs are mounting, investors are urging their portfolio companies to hunker down, and founders are doing everything but casting spells to reduce their burn rate.
“But are valuations really down?” asks Daniel Faloppa, founder of Equidam.
“For all startups? If so, why, and what can we expect in the short and mid-term?”
What connects the stock market contraction to startup valuations?
Pro-rata is easier to get than ever today, but investors are thinking twice
“Whenever pro-rata rights are involved, you can always smell some drama,” writes Rebecca Szkutak in her inaugural TechCrunch+ article.
Early investors have reserved the right to maintain their stakes in startups that raise additional capital, but with the slowdown in venture funding, it’s unclear if they’ll want to do so.
“The pro-rata allocation is becoming more easy for us to attain, and to get the whole thing,” said Eric Bahn, a co-founder and general partner at Hustle Fund.
Pro-rata is easier to get than ever today, but investors are thinking twice
Pitch Deck Teardown: Encore’s $3M seed deck
Cloud-based software development platform Encore shared the pitch deck its founders used to raise a $3 million seed round with TechCrunch+.
Using 24 slides, the deck identifies four fundamental problems with building modern software that Encore aims to solve while using non-technical language to explain its value proposition in detail.
“There is a lot to love about Encore’s deck: It simplifies a complex product story into a few easy-to-digest slides and shows why there’s an opportunity in the market,” writes Haje Jan Kamps.
This is the beginning of the unbundled database era
As customers moved online over the past couple of years, enterprises saw the benefits of storing as much customer data as they can to improve their products and services.
However, old-school relational databases run from server farms won’t be able to meet performance requirements for much longer. As businesses shift more operations to the cloud, their databases are now evolving as well, writes Ethan Batraski, a partner at Venrock.
“A new category of cloud database companies is emerging, effectively deconstructing the traditional database monolith stack into core layered services — storage, compute, optimization, query planning, indexing, functions and more.”
Dear Sophie: How do we qualify for each of the O-1A criteria?
Dear Sophie,
Our startup will be sponsoring my co-founders and me for O-1A visas.
How do we qualify for each of the O-1A criteria?
— Extraordinary Entrepreneur
Dear Sophie: How do we qualify for each of the O-1A criteria?
VC funding for crypto projects fell in May, but many investors remain bullish
Many boosters are calling this the start of “crypto winter,” but even as investments slowed down in May, bullish investors are still bringing their floaties and diving into the pool like it’s summertime.
The amount of capital deployed into crypto is down in the short term, but it’s still significantly higher than levels from a year ago: Investment in the space last month increased 89% to $4.22 billion from $2.23 billion in May 2021, reports Jacquelyn Melinek.
“For investors like us, it’s time to buy,” Stan Miroshnik, partner and co-founder of 10T Holdings, told Jacquelyn. “Valuations have come in and great companies are now available at a more reasonable price.”
VC funding for crypto projects fell in May, but many investors remain bullish
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