The Flash took favorable note of recent U.S. Census Bureau data showing that, although the growth rate of new businesses overall has stalled, the share of women-owned small businesses has climbed. Indeed, the number of women-owned businesses grew at a 27% clip between 2007 and 2012 – during which time the total number of U.S. businesses grew by only 2%. This is very encouraging in light of the challenges the startup community has faced in boosting the number of companies founded by women entrepreneurs.
Google last week announced its formation as an entirely new company, called Alphabet. It’s a corporate maneuver in which Google will become part of Alphabet. Google CEO and co-founder Larry Page will step down from the top post at Google proper and become CEO of Alphabet. Fellow Google co-founder Sergey Brin will become Alphabet’s president. Longtime Google executive Sundar Pichai is now Google’s CEO.
The Flash certainly took interest when benchmarking firm Compass, last week, released its global ranking report on startup ecosystems. The ranking of global regions is based on how well areas nurture top tech talent, host profitable businesses and expand into foreign markets. Silicon Valley continues to be the leading region for tech startups, but other cities are quickly climbing the ranks. New York City jumped three spots to take second place and Tel Aviv, also jumping three spots, moved into the top five. The Flash is interested to see if other regions will be able to give Silicon Valley a run for its money in the near future.
The Flash also checks in with Buffer, the social media management company that is on a quest to create a self-managed workplace culture. A $7 million startup with zero managers? Talk about transparency…
These and more in this week’s edition of The Flash!
- The Best Place for Tech Startups: Still Silicon Valley…For Now (ReadWrite)
- Behalf Lands Credit, Equity as Funding for Lending Startups Hits Record (WSJ)
- Uber faces UK lawsuit as union threatens to sue over working conditions (Bloomberg)
- Buffer, the social media management company, is on a quest to create a self-managed workplace culture. Talk about transparency (Inc)
- Amazon CTO: ‘We still consider ourselves a startup’ (Entrepreneur)
- Why is Elon Musk worried about killer robots? (Slate)
This week The Flash checks in from WIRED Money 2015, where the headliners included MIT Media Lab director of digital currency Brian Forde. The most exciting innovations in digital currencies will come from developing countries, where financial infrastructure is not as strong, according to Forde. He believes Western consumers don’t fully appreciate the “economic revolution” that’s upon us in the form of digital currency. To wit: “Today, in 2015, I still can’t use Paypal to send money to friends in Nicaragua,” Forde said at the conference. “But I can send them Bitcoin instantly.”
The Flash also got its crowdfunding fix during a talk by Darren Westlake, co-founder and CEO of leading investment crowdfunding platform Crowdcube. Westlake said the future of crowdfunding is a more democratized platform that will “put the P back into IPO.”
The Flash hears that. These stories and more in this week’s Founders Flash!
- Highlights from WIRED Money 2015:
- Startups can’t afford to ignore the government (Tech Crunch)
- 86% of Etsy sellers are women (Wall Street Journal)
- Big data startup Palantir Technologies raises $450M on $20B valuation (Forbes)
- Can a LinkedIn for athletes replace sports agents? (Bloomberg)
The Flash knows the importance of protecting important business and personal data from the ever-expanding reach of hackers – and now the market is paying attention, too. Andreessen Horowitz now sees cybersecurity startups as a lucrative tech niche, and Google Capital recently made its first cybersecurity investment. With data breaches taking place on a seemingly daily basis, VCs and other investors are starting to boost funding for all manners of cybersecurity startups.
The Flash also checks in on the Uber/”gig economy” labor fight. The most recent entrant to the ring this week hails from Washington, DC, and has the federal heft to make this a real heavyweight match. On July 15, the U.S. Department of Labor issued an “Administrator’s Interpretation” on the classification of independent contractors. More is sure to come in this slugfest…
Check out these and more in The Flash this week!
- Cybersecurity becomes a VC/investor darling (Wall Street Journal)
- S. Dept. of Labor weighs in on ‘Uber fight’ (Inc)
- Sued for patent infringement? Google wants to help (Bloomberg Business)
- Are Steve Huffman’s new rules for Reddit enough? (Re-code)
The Flash understands that entrepreneurs thrill on having multiple angel investors when fundraising. But too much of such “party rounds” can be a bad thing, as no one investor serves as lead and leaves startups wanting focused help if the company hits a rough patch. The Flash looks at compelling research suggesting that having many angels with no lead investor can be problematic for startups.
The Flash also remains fixated on Uber’s fight with the California labor commission, which seemingly sent a torpedo through the ride-share company’s hull recently when it determined that drivers are in fact employees – not contractors. The Flash has been expecting a forceful response by Uber, and this week we saw the first salvo when the company filed a motion seeking to deny class action status to plaintiffs in a major lawsuit relying on this determination. As we predicted, this one will go on for a while…
These and more in this week’s edition of The Flash!
- Although “party rounds” have initial appeal, they may pose risks for startups (NY Times)
- How Uber is fighting the lawsuit that could upend its entire business model (Slate)
- Ellen Pao resigns as Reddit CEO after user revolt (Bloomberg)
- How the Greek downfall and Chinese stock market plunge impact the startup world (CNN)
- IPO? Heck no: Private cash is making it easier to grow without the stock market (Upstart)
- FTC exploring Apple rules for streaming music rivals in App Store (Entrepreneur)
Though not overly partial to emojis, The Flash <hearts> a savvy IPO play – and that’s just what we’re seeing in the move to conjoin Tinder, Match.com and OkCupid for an upcoming IPO. Brought together by IAC/InteractiveCorp as The Match Group, this three-headed online dating hydra is led by Tinder, which may see its valuation top $1B this year. To The Flash, that seems like just the right foundation for wedded bliss.
We also checked in with the key labor issue faced by sharing economy startups and other companies: how and under what conditions an independent contractor must be considered an employee of the parent company. The Flash previously alerted readers to the California labor commissioner’s determination that an Uber driver is an employee of the company – not an independent contractor – and the related implications. Now we’re seeing other startups in the “1099 economy” space – including Instacart and Shyp – moving to reclassify contractors as part-time employees. This issue is surely one to watch.
Check out these and other posts in The Flash!
- Match, Tinder and OKCupid join forces for an upcoming IPO (Boston Globe)
- Companies in the “1099 economy” respond to California labor commission’s Uber ruling:
- More people want Fitbit than Apple Watch (Inc.)
- Mall operators begin courting startups (Wall Street Journal)
- Costolo on Twitter’s short-term thinking (Re-code)
- Did Prince just kill Apple Music? (Bloomberg Business)
- Tesla deliveries surge by 52% (Wall Street Journal)
The Flash naturally stood up and took note in May when Uber announced its plan to raise between $1.5B and $2B in new funding – replete with valuation of $50 billion – and its ascent to the position of world’s most highly capitalized startup. In addition to our focus on startups, we’re always tracking legal developments impacting businesses. That’s why The Flash looked with raised eyebrows when the California Labor Federation issued a decision on June 16 that could upend Uber’s (and Lyft’s, and that of other “sharing economy” startups) entire business model.
Essentially, California’s labor commissioner ruled that an Uber Technologies Inc. driver who connects with customers through the company’s app must be considered an employee (not an independent contractor, as Uber contends). This could mean many implications for Uber if the company must guarantee drivers a minimum wage, compensate for mileage, and pay into Social Security. Uber plans to fight this state agency ruling – and The Flash will be tracking this high-stakes legal tussle.
Additionally we’ve been keeping a close eye on Etsy since its April debut on Wall Street, (the largest B-Corp to file an IPO, by the way). Most recently, the online artisan-and-vintage marketplace company launched a program to help sellers raise money on its website to fund new products. Could this result in the company actually produce a profit?
These stories and more in this week’s edition of The Flash!
- Uber vows to fight controversial ruling by the California Labor Federation about independent contractors (Bloomberg Business)
- Etsy announces pilot program for fundraising by sellers on Etsy company site to support new product manufacturing (Wall Street Journal)
- Which VC firm has the best success rate at picking unicorns? [Psst: it’s Sequoia] (Inc.)
- Lyft names Rakuten CEO (Bloomberg Business)
- Andreessen Horowitz Invests $15M in Envoy (Wall Street Journal)
- Early Tesla investors raise $400M impact VC fund (Wall Street Journal)
Fitbit is once again back in the news – and atop The Flash – for all the right reasons. Shares of the SF-based fitness device maker were spiking late last week after its June 18 IPO opened at $20 per share on the New York Stock Exchange. Where does that put Fitbit’s total market cap? About $6.42 billion…
And with Silicon Valley’s top startups raking in funds, Airbnb has decided to join the fray. The online home/apartment rental facilitator is looking to raise $1B in venture capital, based on a valuation of $24 billion – more than double its $10B valuation of just one year ago. Somewhere Marc Andreessen and Ben Horowitz are nodding and smiling…
Speaking of which – Andreessen Horowitz are actually making a case against a tech bubble. (of course they are!)
See these and more in The Flash!
- Fitbit shares spike after IPO (The Street)
- Airbnb looks to add $1B to its pile of cash (NY Times)
- Andreessen Horowitz make a case against a tech bubble (Upstart Business Journal)
- Brand-new federal reporting rules allow entrepreneurs to raise $$ without facing legal requirements (Wall Street Journal)
- Alibaba engages Foxconn in joint investment talks that would value Snapdeal.com at about $5 billion. (Wall Street Journal)
Pretty much the entire business and tech community was watching Twitter this week, and The Flash was no exception. CEO Dick Costolo, who has run Twitter for the past five years, was replaced this week by the company’s board. Twitter cofounder and former CEO Jack Dorsey will step in as interim chief executive while the board looks for a permanent replacement to Costolo. The Flash notes community suggestions about who should replace Costolo as CEO, and what business steps that new leader should take to optimize Twitter’s market position.
The Flash also goes deep into the question: “Can you tell me what code is?” Instead of answering, The Flash references an excellent 38,000-word answer to this existential question.
These and more in this week’s edition of The Flash!
- Twitter Board shows CEO Dick Costolo the door, Jack Dorsey to step in (NY Times)
- What is code? An answer in 38,000 words (Bloomberg)
- ADP sues Zenefits for defamation, rolls out a competing service (TechCrunch)
- Tech startups woo investors with…inflated numbers? (Wall Street Journal)
- FTC takes first action to protect consumers from crowdfunding misfires, forcing settlement from board game maker’s $122K Kickstarter campaign (Wall Street Journal)