Welcome to Startups Weekly, a nuanced look at this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. Subscribe here to receive it in your inbox.
May the sincere among us stand up: techies, it’s forecast season. It’s my favorite time of year, not because I’m a glutton for threads or because I care very much why the worst of DTC is still ahead of us – a recording that echoes loudly for the third year in a row, mind you – but because it’s nice to see us all sitting and thinking.
Before I get into what I think, some of my favorite prediction pieces and threads come from Lolita Taub of Ganas VC, Nigel Morris of QED Investors and ours.
OK, with that, here’s what I think will happen next year: the return to personal, five-day work weeks for tech workers. Before you start with all the exceptions and asterisks, let me first explain why I think this is going to happen.
Throughout 2021, we talked about the power pendulum shifting to workers, spearheaded by the Great Resignation. Then, this year, the big resignation became the big reset as employers laid off large percentages of their workforce due to changing macroeconomic conditions. As we enter 2023, many have predicted that the wave of layoffs may get worse before it gets better – a prediction already fulfilled by recent rounds of holiday budget cuts, including Airtable, Plaid, and Komodo Health.
In many cases, power is shifting back to employers – meaning those who have wanted to bring people into the office since the start of the lockdown are finally empowered to do so. I’m not saying every founder and executive is secretly colluding, but I also think the domino effect is important here. If your biggest competitor is working from the office to increase productivity, you may also feel tempted; at the same time, if you’re a sloppy early-stage startup lucky enough to hire, you might still be able to get a head start on recruiting if you tell employees they can work anywhere.
My perspective is not just a conjecture; it’s what I hear from founders. A number of entrepreneurs, some citing Elon Musk’s choice to return Twitter employees to face-to-face work, say they plan to bring back a mandatory face-to-face work culture in the new year because of the issues posed by working at distance. work (be it productivity or collaboration). It’s a little bit of manifesting, a little bit of reality. One founder told me over drinks and fancy bites that they weren’t worried about talent loss — because those who leave just because there’s a personal mandate weren’t mission-driven to begin with.
There’s a lot that complicates that feeling, especially when you think about how personal work affects the immunocompromised and those with families and care responsibilities. While I don’t think the companies that were 100% distributed from day one will transition to buying offices, I think we’ll see more companies than you think start with a hybrid approach and more hybrid companies have more avenues to in-person than remote work.
I know you all have thoughts on this, because you didn’t back down by telling me on Twitter. Let’s end with some of my favorite tweets there:
Let’s stop all this work chatter and talk about other work chatter. As always you can find me at Substack and Instagram, where I publish more of my words and work. In the rest of this newsletter, we’ll talk about quirky AI and open source – and gift guides for staff.
AI art apps are having a moment – thanks to Lensa AI
Artificial intelligence is having a moment (again) – meaning shoddy innovation is getting some deserved, if not lively, attention. This week, TC’s Sarah Perez saw the rise of AI art apps all over the App Store, seemingly born off the success of Lensa AI’s viral avatar generators.
Here’s why this is important: We will see many flashing stars and real power in this space in the coming months. Sam Altman, the CEO of OpenAI, helped build ChatGPT (which was responsible for all those fun prompts and answers you see all over Tech Twitter). He made a great point in describing the technology, but one that I think can be scaled to the entire industry:
“ChatGPT is incredibly limited, but good enough in some things to give a misleading impression of greatness. it is a mistake to rely on it for anything important right now. it’s a taste of progress; we have a lot of work to do on robustness and veracity,” Altman tweeted.
How open source is shaping the future of Twitter
TC’s Paul Sawers is one of the most thoughtful writers I know, and you’ll understand what I’m talking about if you read his latest, “Decentralized discourse: How open source is shaping Twitter’s future.” He shows how algorithmic transparency, encrypted DMs, and, yes, even content moderation, has been a recurring theme in the current age of Twitter – and will surely shape the next chapter.
Here’s one key fragment:
What if Twitter decides to go all in on open source? Not just a recommendation algorithm or a protocol, but the entire shooting game – codebase, clients and everything? It would certainly be a mammoth undertaking, especially with everything else going on on Twitter right now.
It would also be an almost unprecedented move to see a $44 billion private company open its entire codebase to the masses of the world. That’s not to say it could never happen, though, as Musk has form in making radical strides. Eight years ago, Musk tore up the patent playbook when he promised Tesla wouldn’t sue any company that “in good faith” infringed one of its patents. At the time, Musk said it was all about accelerating adoption of electric cars and the required infrastructure (e.g. charging stations), an ethos broadly similar to that of open source.
Gift guide corner
Here are some of the fun and imaginative gift guides the TC staff put together this week:
A few notes
Seen on australiabusinessblog.com
Is ChatGPT a ‘virus released into the wild’?
FTX founder Sam Bankman-Fried has been arrested in the Bahamas
Komodo Health, once tipped for imminent IPO, has cut workforce as CFO leaves
The FTC is suing to prevent Microsoft from acquiring Activision
What are investors looking for in 2023 as AI permeates biotech?
Seen on australiabusinessblog.com+
Why the SPAC route makes sense for Getaround
okay now. Now we’re going to see more startups take over other startups
There are many reasons to be excited about the Canadian venture market
How to respond when a VC asks about your startup’s valuation
How much money do you need to raise for your startup?
So we’ve come to the end of our last conversation about this wild plot twist of the year. I’m not going to lie: the last 12 months haven’t flown by. Instead, every day on the tech news beat felt important, complex — if not exhausting and also confusing — in a way that really shaped the way I see this world. It’s still a work in progress, but I will say that 2022 was ultimately the year I finally got the right resources, trust, and networks to realize that technology isn’t just rainbows and butterflies.
Just to brag, there were some career highlights this year, from Kevin Hart interview to get into a fight with many a millionaire on Twitter. I wrote about the difficulties of rebuilding a startup and gave a look at a community business that failed its community. I laughed at how full circle technology is – then noticed that my predictions got horribly older each time. We’ve developed Equity Wednesday into a thoughtful show that tries to answer one big question at a time, rather than all the questions at once.
Startups Weekly is now read by tens of thousands of all of you – and it’s never been more snappy!
I have never been more fascinated by how power and capital work in this world. That’s thanks to all of you, from those who read and amplify our stories, to those who help push us to rocks waiting to tip over, to even those who tell us what angle we missed (and how we can make it next times better). It’s also thanks to my amazing team here at australiabusinessblog.com, for whom I never have enough words of gratitude.
I’ll be out of the office until New Year’s, probably sipping cocoa, sneaking some Skyline chili, and enjoying my mom’s chana masala. I wish you a happy and safe holiday season, and when we get back let’s talk resolutions‽
In the meantime, I’d love it if you followed me somewhere other than Twitter. I am at Substack, Mastodon and Instagram as @/natashathereporter.
Okay, you say hello first. No seriously. okay, okay, bye