What is the reverse of the start-up halo effect called? – Tech Crunch

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Just as a company’s success shouldn’t cast a halo on its vertical brethren, a company’s layoffs don’t quite mean its competitors are screwed as well. Instead, I think changes within a particular startup can be used as benchmark questions for its broader market; in other words, we can use the micro to better understand the macro.

With that in mind, I want to talk about MasterClass’ decision to lay off 20% of its staff, about 120 people, across all teams. The downsizing, according to CEO David Rogier on Twitter, was done “to adapt to the deteriorating macro environment and achieve self-sufficiency more quickly.” In other words, the company – which sells subscriptions to classes taught by celebrities – is looking for operational discipline and needs to downsize to achieve it.

The layoffs shed light on the premises behind MasterClass. When I first covered the company in March 2020, I got stuck on its ambitious learning pitch.

[MasterClass] also touches on the public’s innate curiosity about how famous people think and work. MasterClass tweaks this idea a bit by also offering courses that basically don’t make sense to be ‘digitalized’. Think high-contact sports, like a tennis lesson from Serena Williams or a basketball lesson from Steph Curry. Or just general pontifications of RuPaul on self-expression and Neil deGrasse Tyson on scientific thinking and communication.

Despite its flashy lineup of stars, MasterClass doesn’t sell access but rather sells a window into someone’s work log. Celebrities don’t interact with students on a daily basis, and sometimes not at all.

About a year later, I came back to this idea while trying to extract what MasterClass prominence meant for edtech. Fiveable founder Amanda DoAmaral said at the time that MasterClass was raising the bar for content quality across all of edtech, while Toucan founder Taylor Nieman pointed out that MasterClass was facing the same problems” as so many other consumer products that attempt to steal time. Busy days.”

So what is MasterClass? A high bar for edtech quality? Or a more educational Netflix?

For my full build, read my TechCrunch+ column, “Layoffs of startups, the art of reinvention and a changing MasterClass.”

In the rest of this newsletter, we will talk about multiplayer fintech and the world of grocery delivery. As always, you can support me by forwarding this newsletter to a friend or follow me on twitter or by subscribing to my blog.

Offer of the week

Well, it’s a first: Accel is rolling out a new late-stage $4 billion fund just as some rivals are losing momentum, reports Connie Loizos. It’s my deal of the week, not least because it’s a sub-tweet at Tiger Global and SoftBank slowing down, but in the elegant way that only a 39-year-old company would dare.

Here’s why it’s important: For risk history nerds, this news isn’t just a big number. As Loizos explains below, Accel has a history of returning money to its investors during a time of market uncertainty.

In 2001, Accel raised what was then its biggest fund ever – a $1.4 billion vehicle – only to reduce the size of the fund to $950 million in 2002 after the technology market – which first went downhill in the spring of 2000 – failed to rebound and frustrated limited partners, or LPs, began to stink.

LPs seem very unlikely to push back this time around given what happened next. Before reducing this $1.4 billion fund, Accel proposed splitting it into two $700 million funds: one to invest as planned and a second $700 million fund to begin investing in 2004. LPs who voted against this idea – and the majority of them did – are probably still kicking themselves.

One of them is Chris Douvos, a Princeton endowment fund investor at the time. After the 2001 fund kerfuffle, he passed on Accel’s next fund, from which Accel led Facebook’s $12.7 million Series A in 2004. It became one of the capital funds -risk top performers of all time (ouch). During this time, Douvos lost access to Accel. (“Let’s just say I’m not on their speed dial,” he joked to this reporter in 2016.)

Tech companies react to US Supreme Court’s abortion ruling

After leaking a few months prior, the U.S. Supreme Court overturned Roe v. Wade, stating that the US Constitution does not guarantee the right to abortion. Companies including Microsoft, eBay, Zillow, Airbnb, Netflix, Twilio, Lyft, Momentive, Bumble, The Match Group and others shared statements in response to the rollover. Twitter declined to comment.

Here’s why it’s important: I mean, it’s both surreal and self-explanatory. Here is a quote from Wiggers:

It’s important to note, of course, that many companies — even those that publicly support abortion rights or offer benefits to that effect — have donated to campaigns advocating abortion restrictions. As Slate recently reported, Citigroup has given more than $6.2 million to the Republican Party and nearly half a million to various GOP candidates in Texas alone. JPMorgan has donated more than $100,000 to sponsors of the abortion ban. Yelp, Uber and Lyft have also paid tens of thousands of dollars combined to anti-abortion lawmakers over the past few years.

All week long

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SoftBank Group International’s new CEO steps down, just five months after his appointment

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Until next time,

NOT