When startups become theatre

0:02This week on Great Chat, we talk about the potential ripple effects of very online attention-seeking founders. I'm Helen, and this week we're joined by Ashley and Sally. But first, a quick shout out to our sponsor, Mercury. Mercury is the fintech used by over 200 ,000 companies to simplify their finances. We're huge fans at Great Chat, and we use it to run this podcast. Additionally, a few of us are also current customers for our funds and startups, not to mention the dozens of startups we've backed as VCs, angels, and scouts that run their businesses on Mercury. Something I love about Mercury is how straightforward the onboarding flow was.

0:37Using it is a delight, and I'm excited to see them reach more startups and small businesses who will listen to this podcast. If you're launching a startup or fund, visit mercury.com to apply online in 10 minutes or less. Quick note, Mercury is a financial technology company, not a bank. For more details, check out our show notes. Hi, ladies. Hi. Hello. Happy birthday, America. Yeah, what were you all doing? we if we're in the bay area we like to like recreate our childhood fourth of july so um what yeah our favorite town to spend fourth of july is davis california i don't even know adorable town yeah on uc davis but it's a college town so you get kind of like this small town america feel and like a ridiculously amazing fireworks display at a community park but it's like you don't get all the mega vibes that come with it but some of the small town stuff in California.

1:34We had a great time. Where were you? I kind of love that. I kept it local. I stayed in San Francisco and I was just thinking, I think it's the first time I've been in the Bay Area for 4th of July. It was quite nice. We had a quaint little get together with friends. A lot of, I think, friends you know. Yeah, it was great. Did you see fireworks? It's always like so foggy this time of year. No, there were some good fireworks, but I actually went home before the fireworks were done. Amazing. So I experienced it on Twitter, as one does. Yes. Oh, my gosh. I fled the city and went up to the Catskills for the weekend and got some nature in, which I'm realizing it's actually a very necessary part of living in New York City.

2:19You have to leave and reset your nervous system sometimes. So yeah, it was beautiful. Lots of hikes. I tried to stay offline as much as possible. So I didn't even realize that Elon Musk had announced a new political party, the American Party. That's right. Exciting. We are now a three-party system, guys. We've been waiting for this moment. Oh my gosh. Wait, so who joined on or who has been vocally, you know, who like raised their hand immediately and said, I'm in? Is it Andrew Yang? All I saw was that, yeah, I think Elon reached out to Andrew Yang. So the Silicon Valley's reunite. I feel like we've seen this, a flavor of this, like our entire lives where there's a third, there's like a, some third party who says I am fiscally conservative and socially liberal, and there needs to be a, another option, right?

3:13Or it's like a lot of, I think California, California conservatives. I remember hearing that phrase when I first moved to the state and I was like, what does that mean? Basically that. And, um, so I don't know why will this one be different? Well, apparently the Libertarian Party has been trying to get on Elon's radar because they already have some of that baseline infrastructure built. And apparently it's very hard to even get on a ballot. There's just a lot of admin work that needs to be done. Doge has not yet fixed. And so that's one route. But I don't know. I just feel like there are so many people who are disenchanted with both extremes.

3:55Obviously, it's a huge long shot that there would be, this would be the moment that a real third party emerges. And I'm very skeptical that Elon would be the one to lead that charge in a mainstream popular way. But I feel like the openness might be there. I mean, I think there are a lot of Republicans who are upset about the bill that just passed and some of the implications, especially on national debt. Obviously, a lot of Democrats aren't happy with the Democratic Party. So, yeah, but I think that Elon, if he had done this exact thing like a year ago, I actually think it could have been like a lot more successful.

4:36You know, I think that he got put. Oh, sure. He was like sort of pushed to the main stage. This is him saving face right now. Like, oh, just kidding. Look over here. Right. Well, I mean, ironically, from like a marketing perspective, the only thing I saw was like, I tried left, I tried right. And now I'm going to there's something like that. I tried, you know, him like, referencing back to his, you know, I used to be a donor to the Democrats. And then, you know, obviously, he was part of the Trump administration. And, you know, this is what's left. I actually thought that that message might resonate quite a bit.

5:08I think this is like there's you look at just broader if you take a step back it's like political system has just totally been broken so like I used to consider myself certainly more of a Democrat and I think where I stand now is a little bit more down the middle and I think a lot of people kind of resonate with that. But we've seen this many years ago with like Ralph Nader, I think was the latest of the attempt with a third party. And with Elon potentially running, this will only split up the party system on the right. So I think Elon can't run himself. So that's true. You're right. That's true.

5:45That is off the table. He was born in the wrong country. Right. So I think we're safe there. But I think the mechanics of it is a lot more complicated versus where we are as a country and what we need. So how do we fix that? I don't know. Definitely not what this podcast is about. Absolutely not. I flipped through this deck that I think Malia Russell posted on LinkedIn and accompanied an article that basically like, it was like a commentary on the current state of the startup job market. And I feel like we've talked about this a couple of times where it seems like there's like this bifurcation of the haves and have nots.

6:27Like if you are chasing the headlines of, you know, all of these insane comp packages of AI researchers joining, you know, OpenAI or Meta, you might think that it's a really frothy job market, but really it's like, those are, you know, it's very much that piece of the market. And for everyone else, it actually, there's, there's a much different story. Yeah, it's so funny. Helen and I actually had coffee with Malia this morning, so got to chat about that with her in real time. I think it's very true that there is an all-out brawl for top talent. I mean, we've seen that at the highest levels, as we've discussed in prior episodes, with the crazy$10 million,$100 million comp packages to top AI researchers.

7:12but you know it's also happening in other functions for people who have like real prestige real expertise I think what's like harder like based on the data source which is PAVE like it's very much focused on growth stage startups right who who are kind of like competing maybe sort of at the edges of that same talent pool and the reality is early stage startups can't aren't even in the same playing field and and they're also just not hiring as much and so I I think there's like this invisible layer of the job market for people who have the risk appetite and the networks to join early stage startups.

7:50And I was catching up with one of the founders of a company in my angel portfolio the other week, and it's a company that's doing really well. And the founder was like, oh, yeah, it's like the early 20 something AI native employees I'm hiring across sectors that are just doing like incredible things with AI and completely changing how we operate. And so I think there is like a counter narrative that's like a little harder to see right now. But, you know, when you're an early stage startup, you can't afford to like pay for top talent. Like you can't buy A players. You have to make A players. Oh, 100%.

8:22But not only that, like in the late, like, you know, 2010s where DEI was, you know, sort of in its prime. I think the thing that I would talk to founders about was if you can't compete with the million dollar comp packages of a lot. I mean, because even then it was pre-AI, right? Millions sounds so quaint, Helen. Exactly. Meta, Google. I mean, but these were like new grads. They were competing for new grad talent. And the way that you compete against them, you know, wasn't going to be through comp or benefits. It was going to be through the mission. So I think you saw a lot of founders at the time really leaning into whether it was DEI or whether it was something else.

9:00But it's like the idea of being a mission-driven company is probably the best weapon you have to really attract really top talent when you can't compete on com. And also, Ashley, to your point about just burning through cash and earlier startups, I think one of the slides that I was flipping through said companies are burning through a lot more equity. And the earlier stage companies, especially when they're trying to compete with a talent that's trying to go to meta or open AI, are burning through equity. And that's going to be, you know, they're going to wake up in the series A, series B, realizing how much they're going to be diluted or how much they've given away because, yeah, they can't afford the salary of these like AI scientists.

9:38So they're like, oh, I'll give away X amount of equity. That's a lot more than they would traditionally, even in the era of like a decade ago that Helen was talking about. Yeah, 100%. I will say the other thing just on the general job market today, I talked to a lot of friends who work in BD and partnerships. That's kind of the route that I post Media World took on. And I have so many talented people that work at high profile BD or partnerships role that are trying to get into the AI roles. And I think one of the things, again, that the deck talked about was now because with AI, one person can do a lot more jobs.

10:12And so they're hiring fewer people that can do a wider variety of things. And that's actually hurting a lot of the senior people that are really talented because, you know, they've managed teams. And again, maybe that's not the right profile for the earliest of stages. But these like mid-stage companies that are looking for the hungry person, let's say, you know, maybe marketing is a good example, too. Oh, it's a great example. all the time. I get asked, like, how do I, you know, optimize SEO for this specific, you know, landing page? And I'm like, oh my gosh, I, I'm out of the game, right? Like, I mean, I can call three people and sort of figure that out, or I know the right people to call, but yes, exactly.

10:49And so I think that, um, with AI, the expectations of senior folks are increasing. So like with the big comp packages and it being like sort of a talent war, I think expectations have also risen. And I think maybe that's a good thing. Like, I think when you're, you know, part of a big tech company or a late stage company and you've got a big team and sort of your skill that you're honing becomes management, you know, maybe it's a good thing that you get back into your like real trade. Get uncomfortable. Growth. Growth is uncomfortable. They don't tell you that. I also think that the crafts themselves are changing, right?

11:22Like marketing today looks different than marketing 10 years ago. We'll probably get into this more later, but like comms today. It looks very different than it did 10 years ago. And so either if you're a senior person, you've been able to like evolve and keep your skill set fresh, or you're going to be displaced by younger people who are coming in and figuring this stuff out with like fresh eyes, and they're not burdened by the old way of doing things. So I mean, it's so funny, because this tension has always existed in startups, right? Like, I remember being a 24 year old employee at box and then we'd like hire an exec from Salesforce and they'd want to do all the stuff the Salesforce way.

12:01And we had our little box way of doing it that we'd figured it out ourselves. And, you know, there's sort of this like cultural tension or friction, which can be a really good thing if you have like the right environment to sort of like grapple with it and figure out the best path forward. But there's always been sort of this like, you know, the wisdom of people who've done it before and then sort of that creative ignorance of people who are doing it from for the first time. And it just feels like all of these things that we're seeing happening now are things that have happened before, but they're just happening at such a crazy speed and such a crazy scale because the AI platform shift is moving so quickly and the amount of money is going into this category is so massive.

12:43And then the biggest companies are so big. So it's just like fun to watch us all play out on hyperspeed. Totally. The most interesting thing that I saw, which I think we've talked about in a sense was just that it really does seem like there's sort of a drought of entry-level roles. And I think that in the past, I mean, even before, like, you know, the AI craze, like we talked, like, what roles do we think will be replaced by AI in the future? And everyone guessed that it would be more like, you know, entry-level type roles or administrative roles, but we're actually seeing it happening, you know, now.

13:15Like, if you look at any, you know, even well-funded AI company website, like it's very hard to find anything that's, you know, more junior than like pretty much like a mid-level management role on the non-technical side, at least. So it's almost like we need a new, do you guys remember, I'm really going to date myself here, but Google's APM program. Oh yeah. And the APMM, APMM program too. Yeah. Yeah. Associate product marketing manager, I think. And they just like hired, you know, Google early on was all about like top, top, top engineering talent. But at some point they got greedy and they're like, let's just hire all the other smart people too.

13:50We did this at Dropbox too. It was the Dropbox Rotation Program, DRPs. And I think it was like three or four years. But like, I think Google really was the genesis of this where they were like, you know, we're hiring for IQ. We're like pulling smart people out of Harvard and Stanford and Mass. And we're just going to train them up. And it was a great sort of on-ramp for really smart young people to get into tech. and it doesn't feel like that exists today. And I can't think of a good corollary for that, but maybe - Like at scale, because those programs were pretty big. The ones that Google, yes.

14:27Yes, totally. Everyone has - I can think of like True Ventures has like a fellowship program that's like that. And I know some others too, but Google's was truly like meaningful. Yeah, yeah. And they kind of made everyone else want to focus on, oh, should we just be hiring really smart people and training them up internally? So yeah, you got to like build your program. to make your A players in-house. All right. Well, this week, maybe it was, maybe there was a little bit of a summer slowdown after last week saying that there was no summer slowdown because I feel like it was kind of quiet. And when I say quiet, it doesn't mean that there wasn't news.

15:03There's plenty of news. But last week, you know, was the Soham Parak working at 15 different AI companies sort of news. And so I didn't really see anything. And that made me think, are like whether we've calibrated our expectations of you know what what founders and and vcs to you know what what they should be like and how they should um carry themselves in public because i felt like something was missing last week and so started thinking about like the downstream effects of that and i think that we've talked about this a couple times in the group chat but like if you are a potential founder today and you're on twitter and you're reading headlines minds about, you know, following kind of, and recent Horowitz invested in, in Cluey, right?

15:48Like, so like, there's actually things that come from that sort of behavior. It wasn't something that I think started, uh, that way. We, we didn't know where it was going, but like, you know, you could think of that as being rewarded in some way or, or being successful for the company. Um, but if you're a founder and you look at that and you're like, I don't think that I have it in me to do what that founder is doing. Um, you know, what does that mean? Does that founder, did they get discouraged or an emerging manager, for example, like just from my own journey in like 2021, when I was thinking about raising a fund, I saw other emerging fund managers at the time, there were fewer of them and there were definitely fewer solo women.

16:25But the ones that were, were very vocal on Twitter. And I was like, I don't know if I have what it takes to do that. And so, you know, I found a partner, you know, so I just kind of curious, like, what does this look like 10 years down the line if people are deciding to opt out? Because we've sent them the message that unless you're super public and build a public persona, and Sally, a couple weeks ago, you said that too, like founders, like it's now table stakes to be able to do this. Like, what does that look like down the line? I know, I know. I said that a few weeks ago. I think I've changed my mind on it.

16:56I think the level of fake signal has gone like way too extreme. I will say on the cluey example though i was listening to brian kim's um podcast and he he led the round for andreason and you know you look at he was like look i you know he got on my radar like before the whole like columbia um admissions thing he went and visited him at the cluey house and there were all these like senior people that were like hanging out and working around so there is the like his like brain and like quality of his like um way of attracting talent and then And I think his product, as it's starting to emerge a little bit more, is more of a consumer-facing product.

17:38And so I think there are certain products that work for being loud and being – and at the end of the day, you have to have a good product in order to sustain that growth. But it's become a great marketing engine for them. But I don't think it works for everybody. So I actually think, you know, depending on who you are, what you're building, you shouldn't – not everyone should be building in public and being all loud and being on social media. Yeah, that part I take back. No, so I think that's a great point on consumer. It being like, maybe it is truly table stakes for like certain sectors. And then the other thought I had was maybe it's like a very boomer thought to have that you're like spending all your time on social media.

18:18I mean, there are all these tools and there's AI. Maybe you're scheduling the posts and you are actually spending, you know, the majority of the working day, like on product development and things that are creating real enterprise value and not just, you know, being a professional poster or being on TVPN. But maybe that's just what we see. Yeah, I think, well, it's funny. I feel like every day there's someone who slides into my DMs, which are, for better or worse, open, offering to like tweet for me and get me more followers. And so who knows? Maybe people have people behind the scenes doing this.

18:51But they're asking you to tweet? They want, they, it's always accounts with like two followers pitching me on them tweeting for me. And I'm like, well, I think your pitch could be stronger. But no, I love it when I talk to founders who are like just completely not on Twitter and this world doesn't even exist for them. Like, and it's fine. I just, I don't have a bias for or against founders who are what we would call like at least extremely online seeming, whether or not they are actually extremely online. Like, it's funny I you know started my career at Box and Aaron Levy got very good at Twitter over time and people thought he was tweeting all the time and he actually wasn't he would tweet occasionally but his tweets did really well so there was this perception of like oh my gosh like Aaron's just on Twitter constantly and and if you actually tweets are on point yeah yeah he was really good at it and so I think like you know it's it's it's it's a couple things it's one like do you enjoy this?

19:55Is this part, is this something that gives you energy? It makes you feel more a part of the startup ecosystem. Being a founder is such a lonely job. Building a company is so hard. If this is part of the fun for you, then awesome, like lean into it. And then there's also the part of like, can this help your business? And I think in the clue sense, like they absolutely, we wouldn't be talking about them if they hadn't done their sort of like rage marketing, sexy, like product, meet the team videos and all of that. And so I think the most important thing is just like, like play games that you can win and don't see someone else doing, you know, like if you are a cluey competitor, you don't have to out cluey cluey, like figure out what your own thing is.

20:38And, you know, and ideally that's tied to your, your business and your customer and your go to market. So yeah, I think it can be very distracting for people who, who see this and feel a lot of pressure. it's kind of hilarious because I feel like people who see this feel a lot of pressure like like LinkedIn is booming because of that right people have this belief that they have to be constantly visible constantly online and I feel like I see that in my LinkedIn feed daily it's like a it's like a work journal for a lot of people oh my god this morning so a friend of mine um he sent me a video of him doing a news segment and he's like should I post this on LinkedIn um the interviewer cut me off.

21:19So I feel like I didn't quite, you know, it doesn't seem like I answered her question. And my response was, I think people who love you will watch the video, but most people, including the people you want to impress, will probably look at the post and engage with it or mention it to you and not actually watch the video. So I would be really thoughtful about how you create that post. And, you know, that answer just came so naturally to me. And he's like, Oh yeah, good idea. And that's what he did. And it's like, it's crushing it. And I'm wondering how many people actually watch the video and i'm like oh interesting like this is this is kind of the new normal and you know we don't really acknowledge it that much but one thing that i was thinking about again san francisco resident um the the criticism of the the zoran um campaign or him as a candidate like a couple weeks before the election one that i saw was that this is another like failed actor or a drama kid who's like you know cosplaying um being a politician and that was kind of right around the time where we were talking about how how all news is entertainment we just want to be entertained and i'm like well who created this system right is it the social media platforms is it our decreasing attention spans and sort of like you know needing to be entertained that then produces candidates like this or produces founders like you know the ones that do entertain us on Twitter, like how, you know, I don't feel like this is not, um, it's not on an individual level.

22:47I feel like something that it's, it's rightfully so that they must feel like this is what there is demand for. And so this is what we get. Yeah. I also feel like there's very little value in like railing against it. And, you know, I, I think there can be a bit of a like, if you are not in the young generation that is setting the charge, setting the pace, like to want to critique. And like I try to just like stay open minded and just observe. I mean, think about the Web3 frenzy of a few years ago, right? There was a whole lingo associated with that. We had new acronyms. People had NFT profiles.

23:31Like it was this like sudden cultural force. And granted, it was like a more niche group of founders. But it's kind of amazing to watch that happen. And I think, you know, I think it's there's a lot of gravitational pull to be part of a zeitgeist. And there can be a lot of like both benefits and drawbacks to being swept up in it. But yeah, Helen, I think you're absolutely right. I think our attention spans have been rewired by social media and the TikTokification of news. Political news was entertainment starting with Trump. Now tech news is entertainment. I mean, think about the last pod. We talked about the Bezos wedding and Zuck snatching up open-eye engineers.

24:14Like this is tech is the new, one of the new like entertainment centers. And I think we are all like participants in it. We're very culpable in this podcast. We're like seeing this happen and commenting on it. So, so yeah, definitely if there is a need, people will rush in to fill it. Now, how you parse that as an investor, deciding whether to back a founder who's like really leaning into, you know, having that online presence that meets that entertainment need is like a different question entirely. Right. So, so what if, because I think the vast majority of founders, and maybe that's just like my experience, but okay.

24:53So like Zuck, remember like Zuck almost 20 years ago, or Adam D 'Angelo or Drew Houston, like these are pretty introverted, you know, technical folks who if you were to put them, you know, sort of in their early stages of building their companies into today's world, I don't know if they would have all gravitated towards like this very sort of conspicuous way of sharing what they're building. But they had different things they gravitated towards, right? Like I was just thinking about this. Like our sort of generation, it was like the perks wars. Like who had the best offices? Who had the best food menus?

25:31Like I don't ever hear about the open eye office or how good the food was. But for Twitter and Google and, you know, the Airbnb office where every conference room was an Airbnb. be. Like there was like, that was like leaning into sort of the cultural, the cultural moment. I actually feel like press coverage was a huge badge of honor, right? So they may have been introverts, but people cared about, I mean, early founders cared about having that like launch post from TechCrunch, getting to sit on the stage at D and later code was like a badge of honor. It was just like a different, a different vector for sort of competing and showing up and, And I think primarily attracting talent as well as venture.

26:16I think this stuff is maybe a little bit less relevant for customers for most businesses. Maybe that's different if you sell to other startups. But I think it's like the same old game, just being played on like a new arena. Well, that's a good perspective. It's like we don't know what the outcomes are going to be, right? Maybe we can talk about what the outcomes have been for the founders that I just named. who started like 20 years ago or so, but it's still like TBD or... But I think actually to what you're describing, it's like the era of like the Airbnb and Dropboxes of the world, their audience for promoting these like cafeterias were for the employees or future employees and attracting them.

27:00I feel like today... That's the same thing today. They want talent, they want venture dollars. Yeah, I think it's, well, I think it's like customers is sort of where I'm getting at. I think that the tweeting does very little for customers. Like I think for most companies, maybe like certain companies that are like selling to other startups, maybe. I think the VC stack, I think it does great for that. Yes. Yeah, yeah. But I think very little of this like Twitter performance is about actually acquiring customers for most companies. Yeah. I just think that that echo chamber and bubble is so concentrated.