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How Silicon Valley should celebrate Labor Day
Ask any 25-year old engineer what Labor Day means to him or her, and you might get an answer like: it’s the surprise three-day weekend after a summer of vacationing. Or it’s the day everyone barbecues at Dolores Park. Or it’s the annual Tahoe trip where everyone gets to relive college.
Or simply, it’s the day we get off because we all work so hard.
And while founders and employees in startup land certainly work hard, wearing their 80-hour workweeks as a badge of honor, closing deals on conference calls in an air-conditioned WeWork is a far cry from the backbreaking working conditions of the 1880s, the era when Labor Day was born.
For everyone here in Silicon Valley, we should not be celebrating this holiday triumphantly over beers and hot dogs, complacent in the belief that our gravest labor issues are behind us, but instead use this holiday as a moment to reflect on how much further we have to go in making our workplaces and companies more equitable, diverse, inclusive and ethically responsible.
Bloody Beginnings
On September 5th, 1882, 10,000 workers gathered at a “monster labor festival” to protest the 12-hours per day, seven days a week harsh working conditions they faced in order to cobble together a survivable wage. Even children as “young as 5 or 6 toiled in mills, factories and mines across the country.”
This all erupted in a climax in 1894 when the American Railway Union went on a nationwide strike, crippling the nation’s transportation infrastructure, which included trains that delivered postal mail. President Grover Cleveland declared this a federal crime and sent in federal troops to break up the strike, which resulted in one of the bloodiest encounters in labor history, leaving 30 dead and countless injured.
Labor Day was declared a national holiday a few month later in an effort to mend wounds and make peace with a reeling and restless workforce (it also conveniently coincided with President Cleveland’s reelection bid).
The Battle is Not Yet Won
Today in Silicon Valley, this battle for fair working conditions and a living wage seems distant from our reality of nap rooms and lucrative stock grants. By all accounts, we have made tremendous strides on a number of critical labor issues. While working long hours is still a cause for concern, most of us can admit that we often voluntarily choose to work more than we have to. Our workplace environments are not perfect (i.e. our standing desks may not be perfectly ergonomic), but they are far from life-threatening or hazardous to our health. And while equal wages are still a concern, earning a living wage is not, particularly if the worst case scenario after “failing” at a startup means joining a tech titan and clocking in as a middle manager with a six-figure salary.
Even though the workplace challenges of today are not as grave as life or death, the fight is not yet over. Our workplaces are far from perfect, and the power dynamic between companies and employees is far from equal.
In tech, we face a myriad of issues that need grassroots, employee-driven movements to effect change. Each of the following issues has complexities and nuances that deserve an article of its own, but I’ve tried to summarize them briefly:
- Equal pay for equal work – while gender wage gaps are better in tech than other industries (4% average in tech vs. 20% average across other industries), the discrepancy in wages for women in technical roles is twice the average for other roles in tech.
- Diversity – research shows that diverse teams perform better, yet 76% of technical jobs are still held by men, and only 5% of tech workers are Black or Latino. The more alarming statistic in a recent Atlassian survey is that more than 40% of respondents felt that their company’s diversity programs needed no further improvement.
- Inclusion – an inclusive workplace should be a basic fundamental right, but harassment and discrimination still exist. A survey by Women Who Tech found that 53 percent of women working in tech companies reported experiencing harassment (most frequently in the form of sexism, offensive slurs, and sexual harassment) compared to 16 percent of men.
- Outsourced / 1099 employees – while corporate employees at companies like Amazon are enjoying the benefits of a ballooning stock, the reality is much bleaker for warehouse workers who are on the fringes of the corporate empire. A new book by undercover journalist James Bloodworth found that Amazon workers in a UK warehouse “use bottles instead of the actual toilet, which is located too far away.” A separate survey conducted found that 55% of these workers suffer from depression, and 80% said they would not work at Amazon again.Similarly, Foxconn is under fire once again for unfair pay practices, adding to the growing list of concerns including suicide, underage workers, and onsite accidents. The company is the largest electronics manufacturer in the world, and builds products for Amazon, Apple, and a host of other tech companies.
- Corporate Citizenship & Ethics – while Silicon Valley may be a bubble, the products created here are not. As we’ve seen with Facebook and the Cambridge Analytica breach, these products impact millions of lives. The general uncertainty and uneasiness around the implications of automation and AI also spark difficult conversations about job displacement for entire swaths of the global population (22.7M by 2025 in the US alone, according to Forrester).
Thus, the reversal in sentiment against Silicon Valley this past year is sending a message that should resonate loud and clear — the products we build and the industries we disrupt here in the Valley have real consequences for workers that need to be taken seriously.
Laboring toward a better future
To solve these problems, employees in Silicon Valley needs to find a way to organize. However, there are many reasons why traditional union structures may not be the answer.
The first is simply that traditional unions and tech don’t get along. Specifically, the AFL-CIO, one of the largest unions in America, has taken a hard stance against the libertarian ethos of the Valley, drawing a bright line dividing the tech elite from the working class. In a recent speech about how technology is changing work, the President of the AFL-CIO did not mince words when he said that the “events of the last few years should have made clear that the alternative to a just society is not the libertarian paradise of Silicon Valley billionaires. It is a racist and authoritarian nightmare.”
But perhaps the biggest difference between what an organized labor movement would look like in Silicon Valley and that of traditional organized labor is that it would be a fight not to advance the interest of the majority, but to protect the minority. In the 1880s, poor working conditions and substandard pay affected nearly everyone — men, women, and children. Unions were the vehicles of change for the majority.
But today, for the average male 25-year old engineer, promoting diversity and inclusion or speaking out about improper treatment of offshore employees is unlikely to affect his pay, desirability in the job market, or working conditions. He will still enjoy the privileges of being fawned over as a scarce resource in a competitive job market. But the person delivering the on-demand service he’s building won’t. His female coworker with an oppressive boss won’t. This is why it is ever more important that we wake up and not only become allies or partners, but champions of the causes that affect our less-privileged fellow coworkers, and the people that our companies and products touch.
So this Labor Day, enjoy your beer and hot dog, but take a moment to remember the individuals who fought and bled on this day to bring about a better workplace for all. And on Tuesday, be ready to challenge your coworkers on how we can continue that fight to build more diverse, inclusive, and ethically responsible companies for the future.
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Distributed teams are rewriting the rules of office(less) politics
When we think about designing our dream home, we don’t think of having a thousand roommates in the same room with no doors or walls. Yet in today’s workplace where we spend most of our day, the purveyors of corporate office design insist that tearing down walls and bringing more people closer together in the same physical space will help foster better collaboration while dissolving the friction of traditional hierarchy and office politics.
But what happens when there is no office at all?
This is the reality for Jason Fried, Founder and CEO of Basecamp, and Matt Mullenweg, Founder and CEO of Automattic (makers of WordPress), who both run teams that are 100% distributed across six continents and many time zones. Fried and Mullenweg are the founding fathers of a movement that has inspired at least a dozen other companies to follow suit, including Zapier, Github, and Buffer. Both have either written a book, or have had a book written about them on the topic.
For all of the discussions about how to hire, fire, coordinate, motivate, and retain remote teams though, what is strangely missing is a discussion about how office politics changes when there is no office at all. To that end, I wanted to seek out the experience of these companies and ask: does remote work propagate, mitigate, or change the experience of office politics? What tactics are startups using to combat office politics, and are any of them effective?
“Can we take a step back here?”
Office politics is best described by a simple example. There is a project, with its goals, metrics, and timeline, and then there’s who gets to decide how it’s run, who gets to work on it, and who gets credit for it. The process for deciding this is a messy human one. While we all want to believe that these decisions are merit-based, data-driven, and objective, we all know the reality is very different. As a flood of research shows, they come with the baggage of human bias in perceptions, heuristics, and privilege.
Office politics is the internal maneuvering and positioning to shape these biases and perceptions to achieve a goal or influence a decision. When incentives are aligned, these goals point in same direction as the company. When they don’t, dysfunction ensues.
Perhaps this sounds too Darwinian, but it is a natural and inevitable outcome of being part of any organization where humans make the decisions. There is your work, and then there’s the management of your coworker’s and boss’s perception of your work.
There is no section in your employee handbook that will tell you how to navigate office politics. These are the tacit, unofficial rules that aren’t documented. This could include reworking your wardrobe to match your boss’s style (if you don’t believe me, ask how many people at Facebook own a pair of Nike Frees). Or making time to go to weekly happy hour not because you want to, but because it’s what you were told you needed to do to get ahead.
One of my favorite memes about workplace culture is Sarah Cooper’s “10 Tricks to Appear Smart in Meetings,” which includes…
- Encouraging everyone to “take a step back” and ask “what problem are we really trying to solve”
- Nodding continuously while appearing to take notes
- Stepping out to take an “important phone call”
- Jumping out of your seat to draw a Venn diagram on the whiteboard
Sarah Cooper, The Cooper Review
These cues and signals used in physical workplaces to shape and influence perceptions do not map onto the remote workplace, which gives us a unique opportunity to study how office politics can be different through the lens of the officeless.
Friends without benefits
For employees, the analogy that coworkers are like family is true in one sense — they are the roommates that we never got to choose. Learning to work together is difficult enough, but the physical office layers on the additional challenge of learning to live together. Contrast this with remote workplaces, which Mullenweg of Automattic believes helps alleviate the “cohabitation annoyances” that come with sharing the same space, allowing employees to focus on how to best work with each other, versus how their neighbor “talks too loud on the phone, listens to bad music, or eats smelly food.”
Additionally, remote workplaces free us of the tyranny of the tacit expectations and norms that might not have anything to do with work itself. At an investment bank, everyone knows that analysts come in before the managing director does, and leave after they do. This signals that you’re working hard.
Basecamp’s Fried calls this the “presence prison,” the need to be constantly aware of where your coworkers are and what they are doing at all times, both physically and virtually. And he’s waging a crusade against it, even to the point of removing the green dot on Basecamp’s product. “As a general rule, nobody at Basecamp really knows where anyone else is at any given moment. Are they working? Dunno. Are they taking a break? Dunno. Are they at lunch? Dunno. Are they picking up their kid from school? Dunno. Don’t care.”
There is credible basis for this practice. A study of factory workers by Harvard Business School showed that workers were 10% to 15% more productive when managers weren’t watching. This increase was attributed to giving workers the space and freedom to experiment with different approaches before explaining to managers, versus the control group which tended to follow prescribed instructions under the leery watch of their managers.
Remote workplaces experience a similar phenomenon, but by coincidence. “Working hard” can’t be observed physically so it has to be explained, documented, measured, and shared across the company. Cultural norms are not left to chance, or steered by fear or pressure, which should give individuals the autonomy to focus on the work itself, versus how their work is perceived.
Lastly, while physical workplaces can be the source of meaningful friendships and community, recent research by the Wharton School of Business is just beginning to unravel the complexities behind workplace friendships, which can be fraught with tensions from obligations, reciprocity and allegiances. When conflicts arise, you need to choose between what’s best for the company, and what’s best for your relationship with that person or group. You’re not going to help Bob because your best friend Sally used to date him and he was a dick. Or you’re willing to do anything for Jim because he coaches your kid’s soccer team, and vouched for you to get that promotion.
In remote workplaces, you don’t share the same neighborhood, your kids don’t go to the same school, and you don’t have to worry about which coworkers to invite to dinner parties. Your physical/personal and work communities don’t overlap, which means you (and your company) unintentionally avoid many of the hazards of toxic workplace relationships.
On the other hand, these same relationships can be important to overall employee engagement and well-being. This is evidenced by one of the findings in Buffer’s 2018 State of Remote Work Report, which surveyed over 1900 remote workers around the world. It found that next to collaborating and communicating, loneliness was the biggest struggle for remote workers.
Graph by Buffer (State of Remote Work 2018)
So while you may be able to feel like your own boss and avoid playing office politics in your home office, ultimately being alone may be more challenging than putting on a pair of pants and going to work.
Feature, not a bug?
Physical offices can have workers butting heads with each other. Image by UpperCut Images via Getty Images.
For organizations, the single biggest difference between remote and physical teams is the greater dependence on writing to establish the permanence and portability of organizational culture, norms and habits. Writing is different than speaking because it forces concision, deliberation, and structure, and this impacts how politics plays out in remote teams.
Writing changes the politics of meetings. Every Friday, Zapier employees send out a bulletin with: (1) things I said I’d do this week and their results, (2) other issues that came up, (3) things I’m doing next week. Everyone spends the first 10 minutes of the meeting in silence reading everyone’s updates.
Remote teams practice this context setting out of necessity, but it also provides positive auxiliary benefits of “hearing” from everyone around the table, and not letting meetings default to the loudest or most senior in the room. This practice can be adopted by companies with physical workplaces as well (in fact, Zapier CEO Wade Foster borrowed this from Amazon), but it takes discipline and leadership to change behavior, particularly when it is much easier for everyone to just show up like they’re used to.
Writing changes the politics of information sharing and transparency. At Basecamp, there are no all-hands or town hall meetings. All updates, decisions, and subsequent discussions are posted publicly to the entire company. For companies, this is pretty bold. It’s like having a Facebook wall with all your friends chiming in on your questionable decisions of the distant past that you can’t erase. But the beauty is that there is now a body of written decisions and discussions that serves as a rich and permanent artifact of institutional knowledge, accessible to anyone in the company. Documenting major decisions in writing depoliticizes access to information.
Remote workplaces are not without their challenges. Even though communication can be asynchronous through writing, leadership is not. Maintaining an apolitical culture (or any culture) requires a real-time feedback loop of not only what is said, but what is done, and how it’s done. Leaders lead by example in how they speak, act, and make decisions. This is much harder in a remote setting.
A designer from WordPress notes the interpersonal challenges of leading a remote team. “I can’t always see my teammates’ faces when I deliver instructions, feedback, or design criticism. I can’t always tell how they feel. It’s difficult to know if someone is having a bad day or a bad week.”
Zapier’s Foster is also well aware of these challenges in interpersonal dynamics. In fact, he has written a 200-page manifesto on how to run remote teams, where he has an entire section devoted to coaching teammates on how to meet each other for the first time. “Because we’re wired to look for threats in any new situation… try to limit phone or video calls to 15 minutes.” Or “listen without interrupting or sharing your own stories.” And to “ask short, open ended questions.” For anyone looking for a grade school refresher on how to make new friends, Wade Foster is the Dale Carnegie of the remote workforce.
To office, or not to office
What we learn from companies like Basecamp, Automattic, and Zapier is that closer proximity is not the antidote for office politics, and certainly not the quick fix for a healthy, productive culture.
Maintaining a healthy culture takes work, with deliberate processes and planning. Remote teams have to work harder to design and maintain these processes because they don’t have the luxury of assuming shared context through a physical workspace.
The result is a wealth of new ideas for a healthier, less political culture — being thoughtful about when to bring people together, and when to give people their time apart (ending the presence prison), or when to speak, and when to read and write (to democratize meetings). It seems that remote teams have largely succeeded in turning a bug into a feature. For any company still considering tearing down those office walls and doors, it’s time to pay attention to the lessons of the officeless.
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Blind loyalty
John Chen
Contributor
Contributor
There is a secret behind every open office in Silicon Valley — and it isn’t the drain on productivity.
Tech companies have been the vanguards for pushing corporate culture forward toward “radical transparency.” Mark Zuckerberg works in a fully transparent four-walled glass office surrounded by the rest of Facebook. Valve got rid of managers and titles so everyone can be their own boss. Startup founders host weekly town halls, Friday all-hands, and AMAs. Companies go to painstaking lengths to signal that they trust their employees – to show that this is your company.
But while your company might adopt an open floor plan and give out free snacks so you can feel closer to your coworkers, they likely don’t want you knowing how much they make, who is affected by the impending layoffs, or whether executives are making the right decisions.
The open office has never been more closed, and tech companies are no different than old corporate America in their authoritarian approach to controlling how their employees should think about issues that matter in the workplace. In fact, it may even be more insidious because it’s tucked away behind the veneer of a cheerful, open office.
This is what makes social network Blind so fascinating. Raw and unfiltered, Blind is the antithesis to HR’s utopic vision of a manageable and orderly corporate culture. Instead, it operates outside the walled gardens of IT with no rules and no official corporate supervision.
With Blind, users are completely anonymous, but are required to submit a verified work email to join a company channel. Inside, they are able to freely ask, discuss, prod, and complain without fear of retribution or judgment.
In short, it’s HR’s worst nightmare, and it’s wildly successful.
Building a compelling social product
Blind’s engagement numbers are staggering. It has over 2 million users, including 43K at Microsoft, 28K at Amazon, and 10K at Google. In South Korea, half of all employees at companies over 200 people are active monthly. The typical monthly active user logs in three to four times per day and spends 35 minutes using the app. At the height of the Susan Fowler scandal, Uber employees were spending almost 3 hours a day on Blind. All that, and the entire company is 38 people.
At the heart of Blind’s magic is something universal to every person who has ever been employed — the duality between our personal selves and our “work” selves, and the human drive to be both intimate and in control of our relationships. There is no place more difficult to navigate this duality than the workplace, where we want to feel loved and understood, but also respected.
Hierarchy, politics, and negative career impacts burden conversations about difficult topics, and so Blind tears these barriers down one employee at a time, affording a space for uninhibited dialogue. More importantly, Blind succeeds as a resource for questions not only company-related, but also around career, family, and life decisions.
Blind is in many ways an evolution of a long lineage of ideas in social networking. It’s unique achievement is the recombination of these different ideas to create a platform that is both a safe space for free and open conversation (via anonymity), along with a vetted, contextually relevant community (via workplace email authentication).
Let’s walk though each of these categories to understand Blind’s success.
Lack of Context (Anonymous + Individual/Personal) – Companies like Yik Yak, Secret, and Whisper pioneered the anonymous social network on the consumer side. However, they were beleaguered by cyberbullying, and served more as a digital exhaust pipe for teenage angst and trolling. Perhaps the most successful semi-anonymous social network today is Reddit, where legions of loyal community members cover every topic imaginable. However, what all of these anonymous communities lack is the critical element of shared context and circumstance.
Put another way, your fellow community members on Reddit may share your interest in ice fishing, but they likely will not understand who you are. As Blind cofounder Kyum Kim puts it, “it’s hard for someone to complain on Reddit about feeling poor while making $200K a year without fear of backlash, but on Blind, your coworkers are in the same income bracket, and likely similar education levels, neighborhoods, etc. They can empathize with your situation.” On Blind, there is a single community (your workplace) that spans multiple topics, and there’s a baseline, tacit understanding of each other’s life circumstances, allowing for deeper conversations.
Self-Promoting (Non-Anonymous + Individual/Personal) – LinkedIn and Quora are useful professional platforms, but because individuals and brands are the stars of these platforms, posturing and self-promotion can be quite frequent. When you ask a question on Quora, you are submitting your inquiry to a body of self-proclaimed experts. While many responses can be genuine, the ultimate currency that drives the platform is credibility and brand building, which inhibit authentic and vulnerable conversations from occurring.
Self-Censored (Non-Anonymous + Employee/Work) – On the enterprise side, Yammer, Jive, and recently Slack have attempted to upgrade the creaky company intranet into the enterprise social network. While these tools might make it easier to connect to your coworkers, the conversations happening on these platforms are no different than before – ultimately, these tools are designed to get work done, not for questioning, debating, or reflecting on how work should be. Conversations about sensitive subjects (e.g. how to deal with a bad manager) are unlikely to happen on a non-anonymous, corporate-sanctioned platform where that same bad manager might well be watching.
Finally, we have Blind. The platform strikes a balance between the freedom of anonymity and the context of a shared workplace. The result is a forum for surprisingly rich, relevant, and authentic conversations. While company channels are accessible only to insiders, a look at Blind’s public site (where you still need a verified work email, but you can chat with anyone outside your company) reveals a flavor for the types of conversations that are possible. An engineer at Amazon recently posted about how to deal with a mid-life crisis, with 42 responses of encouragement and advice. Another employee moving from India has a wife suffering from depression and is seeking help navigating the US healthcare system.
It turns out that where we work is a good proxy for who we are, and our coworkers have been an untapped community of wisdom.
Trust and safety
Catalin205 via Getty Images
Blind is by no means perfect. Like all online platforms and particularly anonymous ones, it invites its share of trolls. One look at the “Relationships” section on Blind’s public site and you’ll find questions about how to deal with one-night stands with coworkers and a poll asking guys how many girls they’ve slept with before marriage. While these questions could certainly have come from a genuine place, they are easy fodder for trolls, and the ensuing conversations can be alienating and provide an unnecessary megaphone for toxic bro culture.
Blind acknowledges that these issues exist, but claim that they happen less frequently inside company channels. Because users authenticate with their work emails, cofounders Sunguk and Kim believe that Blind users feel a greater sense of responsibility to each other because they are engaging a real community with shared context and goals.
The vast terrain of cyberspace might suffer from the tragedy of the commons and moral hazard, but within your workplace channel on Blind, your digital community maps onto a physical community – even though you are anonymous. This is evidenced by the successful self-policing on the platform, where 0.5% of all posts have been removed (higher than average for a social media platform), and all of these originated from user-generated flags.
A More Perfect Union
Blind’s success illuminates a reality that is often overlooked: corporations aren’t naturally democratic or transparent. While there are platforms to discuss our roles as individual working professionals (e.g. LinkedIn), there are very few places to gather and organize as employees of companies to collectively bargain for a better workplace.
This is by design. HR, the supposed watchdog of employee wellness, is neither elected nor truly representative, as they must balance the competing goals of being a third party resource for employees while also protecting the company against its employees.
Companies will always be incentivized to maintain an asymmetry of information. Friday all-hands and town halls are heavily scripted by companies. Rarely do we see anyone describing a healthy, transparent culture as a place where employees are freely conversing amongst themselves.
For companies with something to hide, the idea of a public square where conversations happen freely should be alarming. Blind has already been at the center of exposing two major scandals (e.g. the “nut rage” incident by a Korean Air executive and the news that Lyft was spying on its users.)
Blind picks up where labor unions left off and where HR has failed — to serve as a safeguard against corporate overreach, and to provide a protected space for employees to collaborate around solutions to improve the workplace.
A truly open office
For companies, Blind’s rise shouldn’t be seen as bad news. Blind can be a rich source of insight where HR software falls short. While employee engagement surveys have become popular in HR circles (and a crop of well-funded HR tech companies have consequently flooded the market), these practices suffer from the same issues of hosting a town hall. The company decides on the questions asked and interprets the answers given. With Blind, for the first time, HR and executives will have a pulse on employee sentiment that is both real-time and authentic. As Moon puts it, “no company is perfect, and if it was, Blind would not need to exist.”
In short, Blind understands more about your employees than anything in your HR stack.
Where does Blind go from here? Moon and Kyum believe they’re just getting started. Today, Blind is only available in the U.S. and South Korea, and it has been focused on tech companies. Their push into more traditional industries is showing some early signs of success with Johnson & Johnson, Dow Chemical, Barclays, and the US Navy coming online recently. There is still work to do in cleaning up different communities to ensure that conversations are inclusive and not alienating. And of course, Blind has to find a path to becoming a sustainable, revenue-generating company without compromising its integrity with users.
But one can only imagine the potential for Blind if it continues on its path upwards — the anonymous social network that understands who you are, the pulse survey that is authentic and real-time, and the first truly safe and open office made for employees, by employees.
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Y Combinator to give $10K to 100 grads of its online Startup School
Y Combinator wants to lure more companies into the funnel for its accelerator while democratizing free access to startup knowledge. It’s simultaneously moving up and down market to conquer the acceleration space, with both its recent Series A program for more mature startups and $1 million in grants for high potential founders from its extra-early-stage online course.
Today the entrepreneurship academy announced that the third year of its Startup School program will begin August 27, offering a 10-week set of lectures on how to build, grow and monetize a startup. More than 13,000 companies signed up last year, with 2,800 of the best receiving a YC alumni mentor, and 1,587 completing the program with an online Demo Day. It proved a powerful feeder, leading to 38 being admitted to YC’s core accelerator program that charges 7 percent equity for $120,000 in funding. Those included patent law firm Cognition IP, customer feedback platform Thematic and internet service provider Necto.
Startup School 2017’s participants came from around the world
But this year, YC is going to give 100 high-potential companies that complete the course a $10,000 grant for no equity in return. The cash comes from YC’s own bank account, filled from exits of its portfolio companies over the years and other revenue streams. These prizes could pique the interest of more founders around the world and keep them committed to following through with the self-directed learning. Interested companies can sign up here.
“Useful advice around how to grow products, how to sell, all the mechanics for starting a startup . . . there’s unending demand for that,” says Geoff Ralston, a YC partner and founder of RocketMail that was acquired and became Yahoo Mail. “In some countries it’s the only career path available,” he declares with a bit of the hyperbole Silicon Valley is known for. “In the U.S., it’s become way more mainstream than it ever was years ago.”
The last two years’ Startup School programs have included lectures from WhatsApp’s Jan Koum and Box’s Aaron Levie on how to build a product, Stripe’s Patrick Collison and Pinterest’s Ben Silbermann on hiring and culture, and investors Marc Andreessen and Ron Conway on how to raise money. YC won’t be running the program in partnership with Stanford University like last year, but still hopes to reach as many companies.
Box CEO Aaron Levie gives a Startup School lecture on building product
“Getting the most out of Startup School requires putting a lot in. I watched every lecture, took notes, attended all the office hours, and participated in the online community, and it was all worth it,” said Cognition IP co-founder Bryant Lee. “The learning experience will save you a ton of time down the road.”
Beyond the lectures and shot at the grants, YC will be offering participants more than $50,000 in credits to Amazon Web Services and other enterprise tools, plus discounted payment processing from Stripe. Graduates will also receive an online meeting with a YC partner later in the year to help them prep for applying to the core accelerator. Ralston says YC is already accustomed to vetting thousands of applications, so he’s confident it can sift through the Startup School students to find the gems.
The program effectively creates a vacuum that sucks in startups so YC can start forging a relationship with them. That’s critical, as it needs access to the best companies to make its program profitable since so many early-stage startups are destined to fail or end up generating paltry returns as acqui-hires by bigger corporations.
Startup School founders may be paired with a mentor like YC alum Christian Van Der Henst of Platzi for weekly online office hours
When asked if the “school” might delude some young wantrepreneurs, convincing them to abandon traditional higher learning or safer jobs to launch a company, Ralston countered, saying “I have to reject the idea that knowledge about what it takes to start a startup is weaponized or dangerous to people. I think there are way larger risks in the dynamicism and changes in the wold today than the risks of trying to start a startup or work at a startup and learn an incredible set of skills that are valuable in life or business.” At the very least, having their startup blow up in their face should build character.
“It can be tough for people if and when their startup doesn’t work out,” Ralston concludes. “But it can be tough when you work at a company for 10 years and get fired and don’t know where to go from there.”
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0x lets any app be the Craigslist of cryptocurrency
Centralized crypto exchanges like Coinbase are easy but expensive because they introduce a middleman. Not-for-profit project 0x allows any developer to quickly build their own decentralized cryptocurrency exchange and decide their own fees. It acts like Craigslist, connecting traders without ever holding the tokens itself. And instead of having to bootstrap their way to enough users trading tokens on their app alone so that there’s liquidity, 0x offers cross-platform liquidity between users on the different projects it powers.
The problem is the user experience of decentralized apps is often crappy compared to the consumer apps we’re used to across the rest of tech. From sign-in to recovering accounts to conducting transactions, it’s a lot more complicated than Facebook Login, PayPal, or Shopify. Bitcoin and Ethereum prices remain well below half their peaks because it’s difficult to do much with cryptocurrency right now. Until the decentralized infrastructure improves, the dreams of how blockchains can improve the world remain distant.
0x is trying to fix that by ensuring developers all don’t have to reinvent the exchange wheel.
It began as a for-profit exchange before the team recognized the massive usability gap. So instead it became a decentralized exchange protocol, and raised $24 million in an ICO for its ZRX token. That’s how relayers — the apps who use it to build exchanges for ERC20 tokens atop the Ethereum blockchain — can charge fees. It also gives those who collect the most a say in the governance of the protocol.
Some of the top projects on 0x like Augur and Dydx are going strong. Last week Coinbase announced it was exploring whether it might list ZRX and several other currencies for trade on its exchange, helping perk up the price after declines since the new year.
0x’s ZRX token price, via CoinMarketCap
Now 0x is putting some of its $24 million to work. It just hired former Facebook designer Chris Kalani to help it improve the usability of its APIs and the products built on top of them. His skills helped Facebook embrace mobile around its 2012 IPO. He then built Wake, raising $3.8 million for the design prototype sharing tool that let teams get instant feedback on their works-in-progress. Kalani sold Wake to design platform InVision in April, and after a few months assisting the transition, he’s joined 0x.
“There are very few designers involved in the [blockchain] space” Kalani tells me. “There’s not a lot of people who had worked on anything at a large-scale or from the consumer perspective. We’re focused on making crypto more approachable.”
Sustaining a crypto not-for-profit
After talking to four leaders in different parts of the blockchain industry, the consensus was that 0x was an elegant protocol for spawning decentralized exchanges. But the question kept coming up about whether the project will be sustainable. The company doesn’t have to earn enormous amounts of revenue, but concerns about its longevity could scare away developers. One, who asked to remain anonymous, described 0x saying, “the best analogy is trying to monetize Linux.”
0x is open source, so it could be forked so developers can sidestep ZRX. 0x hopes that the shared liquidity feature will keep developers in line. It only works with the unforked version, and is now being used by 0x-powered projects, including Radar Relay, ERC dEX, Shark Relay, Bamboo Relay and LedgerDex.
While some centralized exchanges have suffered security troubles and hacks, those with stronger records like Coinbase continue to thrive while banking off high fees. That in turn lets them offer better liquidity and invest more in the user experience, widening the gap versus decentralized apps. “People trust Coinbase with large amounts of capital but they wouldn’t trust themselves,” Kalani admits. But he thinks it’s early in the game, and as users become more knowledgeable and comfortable with holding their own tokens for use on decentralized exchanges, 0x and ZRX will thrive.
There’s also competition within the decentralized exchange space from Kyber’s liquidity network, and AirSwap’s peer-to-peer exchange marketplace. But for any of these to thrive, the mainstream crypto owner will have to get better educated. That could fall to 0x.
One alternative path for the not-for-profit would be selling developer services and consulting to those building on top of it. Or it could always do another ICO. But for now, there are a lot of projects out there that don’t want to foot the upfront cost to build their own secure and compliant exchange from scratch. Kalani concludes, “The way Stripe allowed developers and businesses to build on top of it, and not have to worry about regulatory issues and all the infrastructure necessary to take payments, I think 0x is going to do something similar with exchanges for crypto.”
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Instacart hires its first chief communications officer, Dani Dudeck
Instacart, the grocery delivery platform valued at $4.2 billion, has today announced that it has hired its first chief communications officer in Dani Dudeck.
Dudeck has been in the communications world for the past 15 years, serving as VP of Global Communications at MySpace for four years and moving to Zynga as CCO in 2010. At Zynga, Dudeck oversaw corporate and consumer reputation of the brand before and after its IPO, helping the company through both tremendous periods of growth and a rapidly changing mobile gaming landscape.
Dudeck joins Instacart at an equally interesting time for the company. Though Instacart is showing no signs of slowing down — the company recently raised $200 million in funding — the industry as a whole is seeing growing interest from incumbents and behemoth tech companies alike.
Amazon last year acquired Whole Foods for nearly $14 billion, signaling the e-commerce giant’s intention to get into the grocery business. Plus, Target acquired Shipt for $550 million in December. Meanwhile, Walmart has partnered with DoorDash and Postmates for grocery delivery after a short-lived partnership with Uber and Lyft.
In other words, the industry is at a tipping point. Instacart not only needs to out-maneuver the increasingly competitive space, but continue to tell its story to both consumers and potential shoppers/employees alike.
Dudeck plans to hit the ground running after having been an Instacart customer since 2013.
Here’s what Dudeck had to say in a prepared statement:
We’ve been an Instacart family for years and as a mom it’s been a game changer for me. Our home is powered by Instacart because over the years, I saw how the products helped me better manage our household rhythm. Whether I’m doing a fast diaper delivery or fresh groceries for our weekly shopping, I love feeling like I can be in two places at once while getting to spend more time with my family. After getting to know the internal team, I was blown away by the strength of Instacart’s business and the unique culture they’ve created. By building on that success, we have a compelling opportunity to grow Instacart into a beloved, household name and turn Express into a must-have membership for families and busy people everywhere. I’m excited to join the management team and partner with them to accelerate their ambitious plans for future growth.
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MeetFrank nets $1.1M for its passive job matching chatbot
MeetFrank, aka a ‘secret’ recruitment app that uses machine learning plus a chatbot wrapper to take the strain out of passive job hunting and talent-to-vacancy matching, has closed a €1 million (~$1.1M) seed funding round to fuel market expansion in Europe.
Hummingbird VC, Karma VC, and Change Ventures are the investors.
The Estonian startup was only founded last September but says it has ~125,000 active users in its first markets: Estonia, Finland, Sweden, Latvia, Lithuania, plus its most recent market addition, Germany, an expansion this seed has financed.
Around 2,000 companies are using the app to try to attract talent. In Germany employers on board with MeetFrank include Daimler, Eon, Delivery Hero, SumUp, Blinkist, High Mobility and MyTaxi.
“The average company profile we have at the moment is a start-up/scale-up company that develops their product in-house,” says co-founder Kaarel Holm.
“At the moment we are mainly focused on technology-related companies — so positions you can find from average start-up or a scale-up,” he tells TechCrunch. “Around 50% of the position are engineering and other 50% is marketing, sales, customer support, legal, data science, product/project management etc.”
He names TransferWise, Taxify, Testlio, Smartly and High-Mobility as other early customers.
Here’s how MeetFrank works on the talent side: The person downloads the app and goes through a relatively quick onboarding chat with ‘Frank’ (the emoji-loving chatbot) where they are asked to specify their skills and experience — choosing from pre-set lists, rather than needing to type — plus to state their current job title and salary.
So while MeetFrank’s target is passive job seekers, these people do still need to actively download the app and input some data.
Hence the chatbot having a strong emoji + GIF game to convince talent that a little upfront effort will go a long way…
The bot also asks what would convince them to switch jobs — offering options to choose from such as a higher salary, more flexible or remote working, relocation, a startup culture and so on.
The anonymous aspect comes in because there’s no requirement for users to provide their real name or any other identifying personal information in order to get matches with potential positions.
Talent is therefore assessed on its merits, at least at this stage of the job hunt.
And while people are asked up front to specify their current salary, which you might think puts them at a potential disadvantage during any pay negotiations, Holm says the aim of MeetFrank’s platform is also to encourage greater openness from employers and steer away from traditional pay negotiation situations.
“We use salary as one datapoint for matching and we try to make sure that offers we make to the user are match their preferences. In lot of cases the salary is the main deal breaker and we would like to present the information as early as possible,” he explains. “Companies on the other side of the marketplace disclose their salary for the users as well — in that case we can avoid the negotiating disadvantage.”
“The policy of MeetFrank platform is that companies have to be extremely open about the position they are trying to fill — this also includes the salary information,” he adds.
Employers are not at all anonymous on the platform. On the contrary, they have to write detailed job advertisements — including levels of pay for advertised roles.
And a pay range will be disclosed to applicants that the app deems potentially suitable — i.e. after its matching process — by displaying a percentage of how much more they could earn above their current salary.
So employers need to be comfortable showing their hand to people who may just be curious what’s out there.
For employers, MeetFrank takes over the ad placement process — using its machine learning to algorithmically match potential candidates to positions. So its proposition is automatic pre-selection across “thousands” of potential job applicants.
And also the possibility of reaching talent which might otherwise not realize that company is hiring. Or think about working for a certain brand.
The app is mainly focused on a “passive talent pool” — aka “currently or recently employed talent that is open for offers”, as Holm puts it. So it’s certainly cherrypicking easier types of jobs to match and fill.
“Entry level jobs is bit out of reach for us at the moment but we will launch a beta project with couple of universities in the autumn this year,” he adds when we ask if the app is open to matching people who don’t currently have a job or are looking for a first job.
Holm says MeetFrank is currently showing 50% MRR growth. It’s already out of the pre-revenue phase — so is charging employers to advertise (the service remains free for the talent side).
The main monetization model is a daily subscription, with employers being charged on a pay-as-you-go basis. Holm says the price per day for employers is €9, and MeetFrank lets them cancel at any time — with no minimum time commitment required to sign up.
“We believe that the new-aged classifieds will only monetize on that kind of on-demand model and should only pay when they find us useful. This also lowers the barrier of entry to most of the start-ups and allows them to vet the market and get visibility with low budgets,” he adds.
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Mike Judge to join us at Disrupt SF 2018
Silicon Valley, for better and oftentimes worse, provides an uncanny valley view of the ups and downs of IRL Silicon Valley.
The HBO series has shown what it’s like to deal with an incumbent who steals an idea or IP, the humiliation of saving the day, only to be fired as CEO by your VC, or the fear and exhilaration of competing on the Startup Battlefield stage — a familiar spot for those who have been to Disrupt.
TechCrunch is helping create another Silicon Valley meta moment. Silicon Valley co-creator Mike Judge will join us on stage at TC Disrupt SF.
Interestingly, Judge joined a team from HBO at Disrupt well before Silicon Valley ever aired, doing research for the then-forthcoming series. And, of course, Season 1 ended with the Startup Battlefield stage.
The cycle continued in 2016, when Judge came on stage to discuss what it’s like to parody Silicon Valley culture.
And round and round we go.
Judge has been in the entertainment industry for a long time, creating Beavis and Butt-head, co-creating King of the Hill, and serving as writer and director for classic films like Office Space and Idiocracy.
As Silicon Valley heads into its sixth season, we’re excited to chat with Judge about the direction of the show and the evolution of the media industry as a whole.
And hey, maybe we’ll hear a few spoilers for the upcoming season.
Tickets to the Disrupt SF 2018 are available right here.
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Disrupting the paycheck, Gusto’s Flexible Pay allows employees to pick when they get paid
People should get paid for work they have done. It’s a pretty simple principle of capitalism, but a principle that seems increasingly violated in the modern economy. With semi-monthly paychecks, the work an employee does on the first day of the month won’t be paid until the end of the third week — a delay of up to 21 days. That delay is despite the massive digitalization of bank transfers and accounting over the past few decades that should have made paychecks far more regular.
Gusto, a payroll and HR benefits provider focused on small businesses, announced the launch of Flexible Pay today, a new feature that will allow its payroll users to select when they receive their income for work already completed. The feature, which must be switched on by an employer, will cost employers nothing out-of-pocket today. The launch is limited to customers in Texas, but will expand to other states in the coming year.
As Gusto CEO Joshua Reeves explained it to me, a kid mowing lawns in a neighborhood has a much more visceral connection to income than the modern knowledge economy worker. Cut the grass, get cash — it’s that simple. He also pointed out, with irony, that terminated employees experience much better payroll service than regular employees: they have to be paid out on their last day of work outside of the standard paycheck schedule. Reeves and his team wanted to offer that flexibility and convenience to every worker.
Flexible Pay allows users to choose when they get paid, outside of typical paycheck schedules
The key to this new feature has been Gusto’s increasing data about small businesses. Gusto now serves 1 percent of all small businesses in the U.S., and it has comprehensive access to its customers’ financial and payroll data. With integrations to time sheet services and proper risk modeling, Gusto is able to predict exactly what salary a worker has already earned, and can front the money at minimum risk to itself.
One major challenge for Gusto was how to reconcile the books of the employer with the irregular paycheck schedules desired by employees. Gusto handles all the logistics transparently, including tax withholding, so that for employers, the paycheck distribution looks and feels “normal” on its books.
That means that Gusto is effectively loaning money to companies, since it is paying payroll in advance. Gusto is funding those loans off its balance sheet today, but over time, the company expects to create a financial facility to underwrite the product.
For Reeves, Flexible Pay is “the right thing to do.” He believes that this new level of flexibility will empower workers to control their financial lives. In the long run, as more users get habituated to the product and its convenience, he hopes that the feature will draw other employers into using Gusto based on employee demand.
The unfortunate reality in the American workforce is that huge numbers of workers live paycheck-to-paycheck, by some counts as many as 80 percent. A bill can come due just a day or two before a paycheck hits, but without cash in a checking account, people often have to resort to predatory financial products like payday loans or high-interest credit cards in order to make ends meet. Flexible Pay is one step in the right direction of fighting for workers to get the money they justly deserve.
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Beamery closes $28M Series B to stoke support for its ‘talent CRM’
Beamery, a London-based startup that offers self-styled “talent CRM”– aka ‘candidate relationship management’ — and recruitment marketing software targeted at fast-growing companies, has closed a $28M Series B funding round, led by EQT Ventures.
Also participating in the round are M12, Microsoft’s venture fund, and existing investors Index Ventures, Edenred Capital Partners and Angelpad Fund. Beamery last raised a $5M Series A, in April 2017, led by Index.
Its pitch centers on the notion of helping businesses win a ‘talent war’ by taking a more strategic and pro-active approach to future hires vs just maintaining a spreadsheet of potential candidates.
Its platform aims to help the target enterprises build and manage a talent pool of people they might want to hire in future to get out ahead of the competition in HR terms, including providing tools for customized marketing aimed at nurture relations with possible future hires.
Customer numbers for Beamery’s software have stepped up from around 50 in April 2017 to 100 using it now — including the likes of Facebook (which is using it globally), Continental, VMware, Zalando, Grab and Balfour Beatty.
It says the new funding will be going towards supporting customer growth, including by ramping up hiring in its offices in London (HQ), Austin and San Francisco.
It also wants to expand into more markets. “We’re focusing on some of the world’s biggest global businesses that need support in multiple timezones and geographies so really it’s a global approach,” said a spokesman on that.
“Companies adopting the system are large enterprises doing talent at scale, that are innovative in terms of being proactive about recruiting, candidate experience and employer brand,” he added.
A “significant” portion of the Series B funds will also go towards R&D and produce development focused on its HR tech niche.
“Across all sectors, there’s a shift towards proactive recruitment through technology, and Beamery is emerging as the category leader,” added Tom Mendoza, venture lead and investment advisor at EQT, in a supporting statement.
“Beamery has a fantastic product, world-class high-ambition founders, and an outstanding analytics-driven team. They’ve been relentless about building the best talent CRM and marketing platform and gaining a deep understanding of the industry-wide problems.”
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