LinkedIn is the reason Apple made the M1 chip

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. This week was good fun not only because we had the whole team together to record, but also because we are still basking in the endless glory of our winning a Webby earlier this week. Frankly we are still shocked. But happy-shocked, like when you get a new toy and it is covered in static electricity. Anyhoo, we had a packed show with much, much left on the floor as we tried to shoehorn the week into our time slot. Here's what we got into: The world of connections: Fave raised $2.2 million to connect fandoms, Somewhere Good raised $3.75 million to build feedless micro-communities, and both Spokn ($4 million) and Spot ($5 million) are hoping to use the spoken word to connect companies and their staffs. Honestly we think that the overall connection-community world is super exciting. Piano, one of those startups we actually have the luck of using, raised $88 million for analytics, subscription, and personalization tools. We get into why the round makes sense, and why one investor stood out more than the others. Corporate media: Coinbase is building out a media-ish org (Alex wrote about it here on his personal blog; Scrawler.co has more on the matter), and with TheSkimm hoping to find a corporate home and The Hustle doing the same, we had to dig into the matter. Our take is that content marketing is a response to expensive social advertising. And that it's fine. And that it is not news. Shoutout Forbes and its new union effort. Well done. Uptrust raised $2M, which let us talk about the venture-sized opportunity in fighting the billions of dollars wasted on useless mass incarceration. And then we chatted about the public markets. Monday.com's IPO is filed, Marqeta's IPO is filed, Squarespace's direct listing is done, and more. It's hectic out there for late-stage startups. The show flew by, much like our days recently, simply because it was so fun and jam-packed with news. And we got to make jokes about our listeners and Monday.com PR timing, so what else could we ask for? Talk soon! Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:00Speaker 00

  Equity is brought to you by Extra Crunch, that prodigious TechCrunch paywall you keep running into. You can break through that paywall at a steep discount if you use the promo code EQUITY. If you do, you'll get access to our best stuff and you'll make Equity look really good internally at the same time. Enough of that, let's start the show.

• 0:26Speaker 00

  Hello and welcome back to Equity, TechCrunch's venture capital focused podcast where we unpack the numbers behind the headlines. My name is Alex Wilhelm and I have my two faves with me today. I have Natasha Moscares. Natasha, how is Jersey?

• 0:39Speaker 01

  Jersey is better than Bitcoin, as it usually is.

• 0:41Speaker 00

  Yes, but we're going to get emails about that because people don't like Jersey and they do like Bitcoin. So send them all to Natasha, not me. Thanks. We also have Danny Crichton. Danny, you're our Brooklyn boy. How's it going over there?

• 0:52Speaker 02

  Unlike Bitcoin, my supply of Claritin tokens, as I would call them, has grown tremendously over the last week. So I'm extremely excited by my inventory and portfolio.

• 1:01Speaker 00

  So Claritin is more of a stablecoin, I feel, than a Bitcoin equivalent. So I think you should really compare it to Tether if we're going to get technical about the Claritin Bitcoin analogy, right?

• 1:09Speaker 02

  It's a proof of allergy protocol.

• 1:11Speaker 00

  I got it.

• 1:11Speaker 01

  Oh God, we're losing our listeners as we speak.

• 1:14Speaker 00

  Tired about Ethereum, I hear, is moving to proof of stake over proof of work. There you go. Listen, we have an enormous show for you today. We had to cut so much stuff to get through, to just enough to fit into the show. So we're going to kick off with a discussion of some startups that raise money that are working to connect people, creators to fans, friends to friends, and coworkers to coworkers. Then we're going to talk about piano, the broader content world, what's going on in media startup land, move to UpTrust, which is all about de-incarceration, which I absolutely adore. And then we're going to wrap with a couple of notes on some IPOs that are going on, including Monday.com, Markheta, and Squarespace. It's going to be a blast, but let's kick off with a little bit of news, Natasha, about our own show. What happened and why are we the coolest people in the entire world?

• 1:54Speaker 01

  We won. The thing, we won the webbeat that we have been campaigning so hard for. It was really exciting and honestly, one of those earnest moments where I just really appreciate all of you. And I don't think we say that on the show ever, but I really appreciate all of you guys.

• 2:08Speaker 02

  Well, I'm going to make a point here. I don't care about our listeners at all because our listeners didn't show up to vote. We didn't win the People's Choice Award.

• 2:15Speaker 01

  No, we did not.

• 2:16Speaker 02

  I think we were five out of five for the People's Choice Award. Okay, we were the anti People's Choice Award.

• 2:20Speaker 01

  We are hated.

• 2:20Speaker 02

  Well, we won, which is in my view far superior, is the Judge Award by people who are professional judgers, if you will.

• 2:28Speaker 00

  So Danny, one, don't insult the audience on the show. You saved that for before or after the show. And two, I think we should have just cheated harder. I think we should have cheated more efficiently about the vote process and stuffed that ballot box. But we didn't because we're ethical. That was probably a mistake.

• 2:44Speaker 01

  We are an award winning.

• 2:45Speaker 00

  Darn ethics.

• 2:45Speaker 01

  We are an award winning podcast, though, and that is an amazing thing.

• 2:48Speaker 00

  We're going to be insufferable about that for a short period of time on Twitter. But let's put that behind us. Let's talk about some companies and we're going to kick off with Fave. Had either of you heard of this company before we cover the seed round? Cause it was new to me.

• 2:58Speaker 02

  I have not.

• 2:59Speaker 01

  No, I hadn't either. Obviously, the headline is a headline we see a lot these days, which is X is connecting Y to Z. And I think it's really cool to see founders taking advantage of everyone wanting to hang out right now.

• 3:10Speaker 00

  Yeah, for sure. So Fave, F A V E, has put together a $2.2 million seed round and it was founded by Jekyll Amonkona Horton, who spent seven years at Google. And what it is, is kind of like a, a, a place to build targeted communities around particular fandoms. To kind of put that into context, the first Fave group that they're building is about Swifties, Taylor Swift fans. Danny, are you familiar with this part of the, the fan culture world? Or is this not something that has reached your ears?

• 3:39Speaker 02

  No, I, I'm familiar with it.

• 3:40Speaker 00

  Okay, fantastic. Okay. I wasn't sure how, how broad the Swifties phenomenon is, but as a non-card carrying, but still part of the Swiftie fandom member, I'm pretty excited about this. Here's my question, though. How, how many times can you replicate that? Because if you go to the Fave website, they have a list of other possible fandoms they're going to put together, like the BTS Army. I, I wonder how many times Fave can kind of. Build this out and then monetize it. So I would say that I'm loosely optimistic, but very curious about TAM, I suppose.

• 4:08Speaker 02

  I think it's super interesting because generally it's the creators and the managers behind those creators who are building out these fan communities, right? They put the infrastructure in place, they connect folks together. And it's very community driven ultimately, but it generally has some structure. It seems like they want to start with the fans themselves.

• 4:26Speaker 00

  Yeah.

• 4:26Speaker 02

  Right? And sort of go around the creators or just keep the creators out of it entirely. And I think that's actually a very different model than a lot of the other startups we've seen in the last couple of months.

• 4:35Speaker 01

  I'll just add to some validation. I think like seeing comment sections on celebrity or influencers pages shows you how lacking we are around technology to get fans in one place. I mean, one of the biggest forums for TikTok gossip is an Instagram page where everyone individually comments.

• 4:51Speaker 00

  Oof.

• 4:52Speaker 01

  Including these millionaire influencers themselves. And so, you know, even if the influencer doesn't eventually come into faves world and doesn't need it, it seems like fans will always want a place to talk and it would be great to see one that's more savvy than a comment section.

• 5:06Speaker 00

  One last note about this is kind of who's backing it. So I'm going to read the investor list here and see if you can catch the theme that I'm spotting. Female founders fund, HYBE, which is H Y B E, all caps. Sony Music, Warner Music, Concord Music, Quality Control, Right Hand Management, Tech Stars Music and Beta Works. Now, Quality Control, if you don't know, is a record label that supports artists like Migos and so forth, kind of the Atlanta rap scene. So Sony, Warner, Concord, Quality Control, Right Hand Management. I mean, to me, this is almost like the music industry betting on a startup that's going to not legitimize per se, but weaponize fandoms to become more, I don't know, more powerful and therefore more lucrative. So you can kind of see where the money is coming from and what it means. But, you know, as an enormous music dork, I'm pretty positive about this. But let's move on.

• 5:49Speaker 00

  We've got a bunch of other companies in this group, including Somewhere Good, Natasha, which you wrote about, and I'm actually very hyped about this company. Please walk us through it.

• 5:56Speaker 01

  Yeah. Somewhere Good is founded by Naj Austin, who you might know as the same founder behind Apple's Club, which is a subscription based community for people of color. She, in response to the pandemic and just general her community growing so large at Ethel's Club, found opportunity to create, what she says, "An answer to the gray space in community right now," which is there are a ton out there. You get a link on Twitter, you can join the Extra Crunch Discord, but you don't know how to search through different communities out there. And the experience right now is still super fragmented. And so Somewhere Good just raised a couple million bucks to help people discover new worlds and join into them in an easier way.

• 6:36Speaker 02

  I think what's so interesting here, okay, so the pitch line is no advertisements, no user profiles, no friending, no following and no feed. What do you do?

• 6:46Speaker 02

  Is there something after that?

• 6:47Speaker 00

  It's a silent retreat.

• 6:48Speaker 02

  What is a community without a feed?

• 6:50Speaker 01

  I think it's the biggest challenge for them. I mean, the answer Naj gave me is that, and they're still kind of figuring out their beta, so I did not use the platform, I'll be clear. Once you enter a world within Somewhere Good, you are thrown into a group chat and you can message. Obviously, you will have a name, I believe, of some sorts, and you'll be in a group chat with other people around a certain topic. Therefore, think about like the Equity fandom, for example. We would have an Equity world where we all could be there and message with other people in that world. The idea being that there's no one moderator, there's no one person that's kind of looking and talking and sending prompts.

• 7:25Speaker 00

  The Equity fandom would need to monitor because our moms are all very well behaved.

• 7:30Speaker 01

  Okay, yeah, bad example.

• 7:32Speaker 02

  Well, I think it's interesting. So in this view, I think it's like a lightweight Discord, right? So instead of having all this like infrastructure and you have to onboard and you have to like acculturate, the idea here, I think, is a little bit more like flash communities.

• 7:43Speaker 01

  Yeah.

• 7:44Speaker 02

  Which in and of itself is quite interesting. I mean, I'll be interested to see if it sustains. Part of me thinks that a lot of the challengers, the community startups, is they demand so much time continuously from everyone. Instead of saying like, "Look, you know, there's a football game every Sunday, let's have a flash mob that all, you know, talks about the football game live and then we disappear for the rest of the week," right? We don't need these communities that have to be 24/7. But I could see a model where, you know, you're attached to that world, but you don't have to be actively monitoring the stream every single day.

• 8:12Speaker 00

  Yeah, but you know, we may be a little bit skeptical about what this is going to become, but investors are putting quite a lot of capital behind it. It put together a $3.75 million round led by True Ventures. Some private investors put money in as well. Dream Machine, which is Alexia, so this is Fund. Alexia is our old boss here at TC. And then she left to go found a fund. Also in their debut capital, Canvas Ventures and a couple of new investors, including Slosson and Co., Next Ventures and 2PM Inc. I've never heard of 2PM. I do not know anything about it.

• 8:38Speaker 01

  2PM Inc. is amazing. You need to read that newsletter.

• 8:40Speaker 00

  What is it?

• 8:41Speaker 01

  All about e-commerce.

• 8:42Speaker 00

  Oh.

• 8:42Speaker 01

  Written by Web Smith. Great.

• 8:44Speaker 00

  This is why I should have asked you before the show what it is instead of saying that I don't know on the show and sounding stupid. But we're going to scoot on. Danny, another startup in this communications grouping together phenomenon is Spoken. I believe it's pronounced. Is that correct?

• 8:56Speaker 02

  Yeah, so we have spoken in spot meetings. So two companies in this, I would call it audio focus enterprise software space. So two different directions, about the same amount of money. I will start with spoken. So spoken wants to create audio podcast networks inside of companies, right? So unlike equity, which is broadcast to the world, this is about broadcasting internally. So you could imagine not just your internal comms from the CEO and all those AMAs and TGIFs and all these meetings you're supposed to do with updates that I ignore all those emails and they go straight to trash. The idea here is to make it much more engaging, audio focus, but also to allow individual employees to create their own podcasts that could be directed to other parts of the company. So you could imagine the engineering team having a podcast, the sales team having a podcast, basically connecting particularly the largest companies together in a medium

• 9:40Speaker 02

  that's more familiar to everyday people.

• 9:42Speaker 01

  Culture will matter so much here with its end customers because I imagine at a place like TechCrunch, if we were given the opportunity to do internal podcasts, it would be amazing, but chaotic. Like we would just be doing sarcastic jokes the entire time. And so I wonder who their end customer is and how seriously they're taking comms internally.

• 10:01Speaker 02

  You know, as I wrote in the story, of course, companies can screw up podcasting just as much as they've screwed up every other medium to communicate like humans.

• 10:07Speaker 01

  Yeah.

• 10:08Speaker 02

  But I think the key here is by democratizing a lot of this communications internally. You know, we're moving from the Slack world where it's quick text messages. And here it's a little bit more produced. You could imagine there are studios being built. One of their examples, the podium CEO, he actually built out a podcast studio next to his Office because he got so excited about podcasting using spoken that he now does it regularly. So it's only a couple of months old. It's gotten a ton of traction among Silicon Valley startups. And it raised $4 million in a seed led by Anne at NEA.

• 10:35Speaker 00

  But Danny, not the only company in this little audio section. We also have Spot Meetings, which raised $5 million, so slightly more.

• 10:41Speaker 02

  Slightly more. Spot Meetings is focused on the walk and talk. So if you've ever watched an Aaron Sorkin movie and/or TV show like The West Wing, it is that, except for Zoom.

• 10:51Speaker 01

  Wow.

• 10:51Speaker 02

  Right? So instead of sitting in front of your desk and being totally barfed into your brain with bad video, the idea with Spot is to say, hey, go on a walk. Let's make that as accessible as possible. So it offers voice commands in the meetings. You don't have to take out your phone. It'll take notes. It'll transcript. It tries to highlight the most important parts of the transcript so that you're able to focus on what matters. It sends email follow-ups after the meeting so you don't lose all the information on what you just discussed on the walk. So the idea is to just make audio the native format for meetings going forward.

• 11:20Speaker 01

  Yeah, I mean, Spot feels like something that would have never started if it wasn't for the pandemic. Not because people weren't doing walk and talks. They always have been. But just that level of like intricate note taking interbred with calls being part of our entire calendar these days. It just feels like a pandemic company that I would love to use as a journalist.

• 11:42Speaker 02

  Lots of interest here. $5 million led by by Ilya Fushman of Kleiner Perkins. And that's after a 1.9 million seed round from Chapter One. And Natasha, I believe you had that story and dropped it a few months ago. So I'm curious, why wasn't it worth it two months ago? And am I stupid for covering the company?

• 12:00Speaker 01

  I forget the big reason. I mean, bandwidth probably. But I think part of the reason I'm skeptical about it, even though I think it's like a useful company, is humans are so lazy. I can't imagine downloading or using a new app. I mean, I barely use the Zoom dial-in. I ignore Zoom dial-ins all the time and just call people cells. So I just can't imagine adding yet another tool. Of course, I think they said when I talked to him that he's integrating with the calendar and it could be more seamless. But I just think the fact that there is, there has to be any buy-in at all is too much buy-in for me. So that's the crux of consumer products in 2021.

• 12:36Speaker 00

  I'm going to be very, very curious to see how far of a remit it can get outside of Silicon Valley startups. Because as a recent YC graduate, it has good purchase inside of probably its fellow cohort in that class. So I'm going to be curious to see what this looks like. But let's move on to a much larger round from a product that we do use currently, namely Piano. Danny, this is the question mark round of the week, given the amount of money and also one of its investors. So tell the people what happened and why we're perplexed.

• 13:04Speaker 02

  Everyone's putting up a paywall. Every large enterprise media company wants discharged subscription. Piano is, for most legacy media companies, the paywall option of choice of the ones that can integrate the most with legacy backend systems. They're not as up to date as Substack or Pico or a lot of the other options on the market. And so Piano raised $88 million this year in a Series C, led by their former backer Updata Partners, along with Written House Ventures participating, and most interestingly, LinkedIn. Out of nowhere, I didn't even know they were invested in anything besides annoying me with additional crap in the feed. But apparently LinkedIn also joined the round. And so I think the big question is, first of all, why LinkedIn? Because that's like a little wild card. But how big is this becoming? Because they have now announced that they had 1,000 customers and 400% revenue growth since 2019.

• 13:49Speaker 02

  So clearly, subscription is doing super well. And they seem to be primed to be leading in sort of that older enterprise space, which is still today, the largest chunk of media.

• 13:58Speaker 00

  So one thing that Ingrid wrote in her story about this was that Piano wouldn't disclose its valuation. But she wrote, quote, "I understand it's operating on a $75 million annual run rate." So that is much bigger than I guess Piano was. Because like, I think of Piano as this app that we use here at TechCrunch, and you know, it's fine.

• 14:16Speaker 01

  A sweet tool.

• 14:17Speaker 00

  I have some questions about things that I would change. But at least it doesn't log me. Look, look, okay, shout out to the Piano team, because the worst part of Piano forever was the fact that it would log you out every like 38 seconds. And it no longer does that. It logs me out like every six hours, which is fine. It used to be like, I would like go away for a minute, come back and they'd be like, who are you? And I'd be like,

• 14:35Speaker 01

  That's me in WordPress right now.

• 14:37Speaker 00

  Oh, my God. WordPress is another kettle of fish, but I'm excited about Piano doing well because frankly, you know, no one likes the fact that paywalls are taking over the media world kind of in general, but they also are paying the bills here at TC and other places. And so it's great to see companies that are powering them do well. And, you know, this is a lot of money on a media trend, essentially. It's a big bet on a media trend that the three of us frankly eat off of. So to me, it's oddly feel-good moment for a VC round, if that makes sense.

• 15:03Speaker 01

  One quick moment on the LinkedIn dynamic is that LinkedIn's SEO is insane. And when I was at the Globe, it accounted for so many of our clicks, like most of our traffic came from LinkedIn. Therefore, LinkedIn having a stake in an analytics tool, I could see it being a really juicy thing to upsell into subscriptions for LinkedIn, plus their gold or premium or whatever.

• 15:24Speaker 02

  And a lot of media companies are now actually doing deals with LinkedIn to actually put their membership premium content onto LinkedIn directly, right? So you could imagine Extra Crunch, we don't do this as far as I know, but Extra Crunch content, those tips, tricks, you know, all the tools to build your startup could be on LinkedIn in some way that, you know, is a rev share. So I think that's the strategy because I think a lot of the membership and subscription products that have used Piano frankly are in professional, you know, media publications.

• 15:51Speaker 00

  Yeah. And I just want to throw in, I just pulled up the TechCrunch analytics. Our traffic analytics are not on Piano, they're on Parsley, but our subscription analytics are on Piano. Welcome to the fun game of web analytics. LinkedIn is currently, for today, I didn't do a historical search, but LinkedIn is our second biggest social referrer. See, we joke about LinkedIn on the show, the three of us, but I think everyone else uses LinkedIn day to day and on purpose, whereas we tend to suffer.

• 16:14Speaker 01

  There's a reason it hasn't been disrupted.

• 16:15Speaker 02

  I tried to use LinkedIn until it eats all my RAM on my computer with its 5GB tab and the little Safari logo comes up and it's like, this page is eating your battery life and you will die shortly if you do not close it. Fix that. I'll join on more often.

• 16:28Speaker 00

  Little did we know that LinkedIn is the real reason Apple made the M1 chip. It's a surprising turn of the hip.

• 16:34Speaker 02

  Exactly.

• 16:35Speaker 00

  I want to make one more point about this though, before we move on, which is that I was reading through, again, Ingrid, one thing I love about Ingrid on the TechCrunch team is whenever she writes a story, it's always like eight paragraphs longer than you expect. Because she just gets great stuff from people. And so in this story, she was talking to the, I think it was the CEO of Piano. And he was just kind of throwing shade at Substack and kind of the indie model and really kind of repping hardcore for like bigger publications, putting up paywalls. I mean, just a quote, I can't imagine a more damaging entity for journalism than Substack. I mean, as far as like company quotes go. Yeah. That's like ghost pepper spicy. That's like as high as it gets. Normally you get like pre chewed oatmeal from CEOs. This is fantastic.

• 17:16Speaker 00

  And I, again, as a writer, I love watching different companies with lots of money beat each other up, trying to make my world more lucrative. How often does that happen?

• 17:25Speaker 02

  Talking about ghost pepper hot. I mean, obviously media in general is super hot, even outside of, you know, the subscription management products. I mean, Alex, a ton of companies have announced new initiatives to launch, not just like hiring a journalist. I mean, that was the old model is just hiring a single journalist. Now they're hiring fleets of people to go and launch media orgs. What's going on there?

• 17:43Speaker 00

  So if you go back in time, think back to the prior days when GigaOm was a network of blogs and VentureBeat and TechCrunch were competing with Mashable for becoming the leading voice in covering the startup world. Back in, you know, the mid 2000s, if you before we got to the 10s and teens and so forth, there was a pretty active blogosphere kind of covering the tech world. And since then, there's been a lot of consolidation. TechCrunch is still standing. Mashable has been sold to Ziff Davis and VentureBeat is kind of doing its own thing. And, you know, it's not quite the same world. So what we're seeing is companies try to fill a bit of the gap, maybe out there by building out their own media organizations. And the news this week from Axios is that Coinbase, you know, a company we've talked about ad nauseam on the show, is looking to hire a team of about 30 people to build a cross-platform media operation.

• 18:27Speaker 00

  30 people is an enormous investment. I mean, like, I don't, Danny, you'll know this. How many editorial staffers are there at TC? Around 35. Around 35. So they're going to essentially hire an entire internal TechCrunch, not the rich else of their budget, but yes, we are. And, and so this raises a lot of questions, you know, for us about, you know, what, what people are doing and so forth. And there's, there's two things going on here. One, I think is the kind of anti-media shtick that we've heard from Andreessen Horowitz to some degree. And, you know, Coinbase, of course, is an interesting company and blah, blah, blah, blah. But also I think there's just a real recognition that content marketing in a broad sense is a super effective way for companies to generate long-term, low-cost customers. And, you know, if you're Coinbase.

• 19:09Speaker 00

  You probably want to be the center of the universe for the crypto world, Danny. And that's kind of my take about this.

• 19:14Speaker 02

  I think one of the challenges, if you go back 10 years, you had very fresh channels like social, Facebook, Instagram, Snapchat, Twitter, that were not saturated. I mean, you could get really cheap CPMs across all those different channels. It was super easy to grow. And today, it's just not the case. It is so competitive on those channels. They're so expensive. The CPMs versus the LTV for a lot of these customers makes no sense whatsoever. And so it just makes more sense relative to the other options available to say, well, content marketing is something we control on our own blog with our own staff, with our own budget, and we can monitor that performance over time using tools like HubSpot and more modern ones as well. And so to me, like, that's the solution for most of these companies. The thing is, it's not journalism.

• 19:56Speaker 01

  Yes.

• 19:57Speaker 02

  And most of these companies obviously aren't media companies. And so they have a very weird relationship with how they think about producing this sort of content.

• 20:04Speaker 00

  Natasha and I, I'm back at TC and Natasha's first time at TC from our Quenchbase News days, building out an independent media organization at a startup. This is not that. The goal here is to do essentially content marketing and also like to talk up the company's book. And so there's two ways to do this. You can like build an internal media-ish arm that's kind of like your own hype squad, or you can build an independent publication. As we're gonna see here in a second with some other stuff that we're gonna talk about in the media landscape, it's hard to do the independent route. It's easier to do what Danny just described, which is to build a content marketing operation. Inside of the crypto world, of course, there's sites like The Block and Decrypt and Blockworks and CoinDesk. And so there's a lot of companies that are kind of working in this space. It'll be fun to see how Coinbase does, but not even the only Andreessen company to do this.

• 20:47Speaker 00

  Natasha, we also have Clubhouse out there looking to hire freelance journalists, which I found perplexing. So somebody explain this to me and why this makes sense.

• 20:55Speaker 01

  I'm not gonna bite the Clubhouse poisoned apple this week, everyone. No, but I think Clubhouse hiring freelance journalists is interesting because if you look at TechCrunch's homepage, half is about creators that spend a good bit of their time on Clubhouse or are working on a space adjacent to Clubhouse. And so if they do it from a "we're going to cover the creator economy" perspective, that would be potentially interesting. But if they do it as freelance journalists implanted in Clubhouse to report on the daily happenings of Clubhouse, which was my first but probably not accurate read of the situation, that would be more interesting, but probably not going to happen. I don't see Clubhouse reporting on Clubhouse in a nuanced way.

• 21:37Speaker 02

  Who would have thought that actually having a firewall between business and reporting would in some way be valuable in the 21st century?

• 21:43Speaker 00

  Wow, who could have guessed?

• 21:44Speaker 02

  Well, that was cynicism. I will say, for all these different content marketing plays, what's interesting to me is Clubhouse is building out its editorial operation, Coinbase is building out an editorial operation, Robinhood is building out an editorial operation, but other companies are choosing not to just build out something from scratch and trying to build it up over a year or two. They're just buying out wholesale properties. So we learned last year or a couple of months ago that HubSpot acquired The Hustle.

• 22:07Speaker 00

  Yes.

• 22:08Speaker 02

  And then the scam we found out recently is exploring being sold to a, quote, "non-media company," which I found was super interesting positioning.

• 22:15Speaker 00

  And this doesn't always go well. Mail Magazine, kind of a darling of the Twitterati, if you will. I think a lot of my Twitter friends really loved Mail Magazine. It was kind of killed off after Dollar Shave Club was sold and then I think it lost an internal champion and kind of got killed. So the independent Camell Magazine route, very expensive, very difficult. We'll see what the scam and the hustle get to. And then finally, a couple of other tiny notes about the media world. Lots more unionization amongst digital media companies. Forbes is going through this. The Ziff Davis Group is threatening another strike, solidarity with them. And it's just a fun time to cover media. We joked during our prep meeting yesterday that we could literally do a weekly podcast now just on the comings and goings in the digital media space writ large. It's hard to not kind of just focus on that entirely.

• 23:00Speaker 00

  But friends, let's move on, talk about UpTrust. Danny, rarely does my interest in reducing mass incarceration cross with my interest in startups. And yet, here we are. Tell me what's going on.

• 23:10Speaker 02

  Yeah, so UpTrust is building on an app, basically to help returning citizens meet their appointments, their obligations, all the rules that come with being on parole or leaving prison. There are a lot of technical violations in states like New York, spend $700 million a year, basically imprisoning people who maybe showed up late to a parole hearing or were in a car with someone with a criminal record, which is oftentimes illegal under the rules they face. And so it's trying to help people to avoid those technical violations, to avoid being sent back to prison. Basically, a win-win for saving money for the state, as well as helping people kind of readjust to normal life.

• 23:45Speaker 01

  They signed a contract with the state of Virginia, and it's going to be expanding statewide by the end of this year, early next year, which to me was like even more interesting than the fact that it raised money to begin with, because getting in cahoots with a state in general is like the biggest hurdle for startups in this space. I would believe, kudos there for making that happen for them.

• 24:06Speaker 02

  It's definitely a slow approach, right? So they were founded in 2015, launched in 2016. They were in 30 states 18 months ago. They really found their stride. They raised 1.3 million that our former colleague, now venture capitalist, John Sheber, reported on last year. They're now on 150 sites in 28 states, so massive growth there. Raised 2 million from a trio of investors, which I think is super interesting. So the Decarceration Fund, which is new and is actively being fundraised, Luminate, and the Stand Together Ventures Lab.

• 24:34Speaker 00

  I just want to point out how excited I am that there's a group called the Decarceration Fund. And if I was allowed to become an LP and things, I would put money into that, because what a great use of capital to reduce mass incarceration. I think that as we see more companies tackle things like cannabis legalization and getting people's records cleaned up and so forth, like there's probably a whole sector of startups and software here that could be built that could really improve people's lives. And if you do build that, we'll probably talk about it. So there's a tiny little hook.

• 25:04Speaker 01

  It's genuinely like a venture sized opportunity yet again. And I feel like it's rare these days to be talking about venture sized opportunities getting funded. But that's its own show itself. I just knew Pet peeve is an obvious company getting funded.

• 25:17Speaker 02

  Well, talking about successful outcomes, it's not just up trust, but a lot of updrafts on the markets these days. Because even though it's Friday, we're going to talk about monday.com.

• 25:28Speaker 00

  Oh Danny, I could smooch your face. That was amazing. Okay, so.

• 25:32Speaker 02

  Webby award winning jokes going on right here. The judges love the grocers. That's the one that we went on. The people's choice, the people don't understand the grocers. They just don't comprehend them. But you know, the judges, they know because they're also probably 50, 60 years old.

• 25:46Speaker 00

  I was about to say it's because Danny's jokes play well with boomers because Danny is a boomer at heart. That's, that's the truth. All right, look, we're a little short on time, so I'm going to be brief about this. But it has been crazy in my little world of companies going public. So monday.com filed to go public, fittingly on Monday morning. So you know, points to their IR team for getting that right. It's a company we've covered quite a lot. Oh, by the way, Natasha is drinking Duncan right now.

• 26:11Speaker 00

  Throwback to her disparagement of my Duncan fandom the other month. Monday.com does, you know, internal corporate communications type stuff. It was long considered to be a bit of a competitor with the kind of asanas of the world, if you will. It's a little bit different to be clear, but that's kind of a bucket you can put it in. It grew quite a lot last year. Growth is accelerating a little bit into Q1 of this year, but it's going to be a really fun company to track. Also, Marketta is going public filed this week. Marketta guys is that card issuing infra that's behind a lot of companies that you've heard about. So it's not super well known, but has a fascinating economic profile, thanks to its dependence on Square. If you want more detail about that, we have lots of posts about it. And then the interesting news, guys, that I want to discuss for just a hot second is Squarespace. Because we've all heard of Squarespace, especially if you're a podcast fan. You have heard about Squarespace.

• 26:56Speaker 00

  And it's one of those interesting companies because it bootstrapped for a long time. Excel, the investing group, short of late, and then put a bunch of money into it. And it kept growing and. It kind of raised like a $10 billion valuation earlier this year. I think that may have been a secondary round, but it's immaterial. That's the price. And then it kind of went out at about 50 bucks a share was its reference price for its direct listing. And then that was a discount to its loss valuation. And then it dropped further. And I am a little perplexed at the reception it got, given it's, it's a SaaS company. It's growing at 24%, you know. So Danny, a hypothesis from you about what's going on here? Or are you as confused as I am?

• 27:32Speaker 02

  I think it's twofold. One is definitely growth rate. The multiples you see for most of these SaaS companies, when you're talking about 50, 60, 100x multiples, you know, that is based off of extremely, extremely fast growth rates, right? In some cases, three, four, five X. And to see 24% growth rates, I mean, let's be fair, 24% is like anemic, right? Like the economy is growing at 24%, you know, week over week right now. Certainly, the crypto market is sometimes growing at 24% week over week. So to me, like, that is a very bad sign. And then number two, of course, is that Squarespace mostly targets small businesses, many of which were wiped out. So I think a lot of investors are very worried about churn, turnover, higher marketing costs as new businesses come up, because Squarespace is going to have to reacquire a

• 28:13Speaker 02

  bunch of customers against Wix and other online website producing companies, Shopify, et cetera. And so there's just going to be a lot of higher S and M costs as revenues go down. So I think it's actually a pretty tough story, temporarily. I think we'll get past that. But I understand why a lot of investors don't want this.

• 28:30Speaker 00

  Wow, that was, I thought you were going to say something like, eh, you never know. I disagree with bits of that, by the way. So in some coverage of this around its reference price, I went through the Bessemer Cloud Index list of public companies that are in the SaaS space, found a comp based on growth rate in Anaplan, which is trading at a much higher multiple than even Squarespace was shooting for in its reference price, and then it dropped lower than that. So we've seen companies trade at higher multiples with similar growth rates, just not this one.

• 28:56Speaker 02

  Well, I think the difference is, obviously, Anaplan probably has a significantly higher ASP, right? Like, the average customer is spending a lot more on its Anaplan plan. That's a really bad name. Whereas Squarespace, again, is targeting small businesses. It's a massive, you know, think of it as, I don't know how many customers they have, hundreds of thousands, millions of customers, paying not that much to have an online presence. As opposed to, you know, a smaller number of customers that might be spending tens of thousands of dollars each on having kind of a SaaS infrastructure product.

• 29:23Speaker 00

  But but but fucking ACV dude, I mean, like even, you know, stronger net dollar retention amongst enterprise SaaS companies gists out to aggregate revenue growth. And so if they're roughly the same, you know, I just, I wonder how much of that really holds water. And it's, you know, I mean, like Squarespace is going to do 770 million revenue this year at its midpoint projection. So it's a, it's a big company. It's not a, it's proven that SMB churn is tameable because it wouldn't have gotten to that scale without figuring that out.

• 29:48Speaker 01

  It would be cool to see Squarespace in general niche down in some way, like kind of what you were saying, Danny. It's like, it's so vast, so many competitors that like, I don't know what Squarespace's sweet spot is. And I think Shopify, it's a much easier story than Squarespace when it comes to like hosting and running companies.

• 30:06Speaker 02

  Maybe they need to become another fandom player, make some faves, find somewhere good and take over the world.

• 30:13Speaker 01

  On Mondays only.

• 30:14Speaker 00

  Ladies and gentlemen, we're going to leave it there. Just as a thing, Oatly is also going public this week, Procore went public this week, and there's a bunch of other IPO news. I apologize for Danny's jokes. With that, we'll sign off. We'll see you guys Monday morning. Have a lovely weekend and do not forget that Equity won a wedding. Bye.