What I unlearned about startups this year

Taylor Swift can teach us about heartbreak — and startups

Taylor Swift has impeccable timing. First, she released “Red,” an album about heartbreak and hurt, while I was in the thick of high school. My now-retired Tumblr is still thankful. More recently, Swift took on a project to rerecord her earlier albums, reclaiming her music from her old record label — this time with her own ownership as a key difference. Her first rerecording, of “Fearless” — annotated with “(Taylor’s Version)” — came out this year.

Of course, I think there’s a pretty obvious tech angle here. Swift made a statement on artist empowerment and the importance of singer-owned music — record labels be damned — the same year that we saw tech defined by the Great Resignation, emerging entrepreneurs and distributed work. Like Swift, I think the tech scene is going through an uncomfortable period of changing their minds, questioning authority and getting closer to self-advocacy as a result.

Looking back, I unlearned a lot about startups this year, especially when it comes to due diligence, formalization and what it means to be contrarian.

Due diligence is a differentiator

When Spark Capital decided to “sever all ties” with David Dobrik’s Dispo app weeks after leading a deal in the company, I immediately thought that it would set precedent across the venture capital industry. The move was triggered by a Business Insider investigation that exposed allegations from a woman who said that a member of Dobrik’s Vlog Squad sexually assaulted her.

In some ways, I was right: Unshackled Ventures and Seven Seven Six chose to step away from the company as well, donating any profits from their respective investments to organizations focused on survivors of sexual assault. In other ways, I was not. It’s clear that there continues to be a disconnect between what happened with Dispo and the world of fast-moving due diligence.

Instead, the opposite happened: Investors, despite repercussions, are only moving faster, and Jake Paul, a controversial social media star, launched the Anti Fund. There’s more conversations on SaaS than there are on safeguards in early-stage investing.

My takeaway here is that venture capital, at least as it currently stands, is designed to lose money; it’s the one-offs that can return an entire fund, meaning that speedy investing can often be the best way to make sure your eggs are across different baskets (versus betting your entire fund on a startup that may get stomped by a pandemic). It is idealistic to expect investors to dig into the depths of due diligence, but I do think we’ll see founders start to prioritize thoughtful capital versus easy capital, meaning that VCs need to find a healthy balance. As Tiger Global taught us, due diligence can be a differentiator — if not a rude awakening.

Formalization doesn’t solve everything

I’ve spent years reporting on diversity efforts within tech companies and investment firms, meaning that I’ve long held onto a mantra: “You can only improve what you measure.” And while I still believe that to be true for empowering historically overlooked individuals, I’ve stopped thinking that formalizing and tracking every corner of a startup will solve issues around culture and tension.

For example, I wrote about why it’s important for founders to establish clear titles in the early, amorphous stages of a company. Weeks later, I wrote about why it’s important to make sure founders don’t take their title too seriously, as power should be decentralized as a company scales. (Clearly I’m changing my mind, which I’ll take as proof of growth instead of awareness of aimlessness.)

The best example of my mantra’s blind spot came up when I reported on Ro, a health tech unicorn facing rising tensions amid stagnating revenue. As I spoke to current and former employees, they often explained how existing policies don’t help if individuals don’t feel empowered to speak up. It’s easy for employers to offer channels for feedback, but similarly easy to quiet any critique by saying that expressing doubt is not “Ro-first.”

In the worst scenarios, formalization without empowerment can feel like gaslighting. There are all the signs of transparency — titles, policies, anonymous feedback channels — but none of the hope that things will actually change for those who follow the rules.

What does it means to be contrarian

Finally, I rethought what it means to be contrarian as a founder.

This year, my job stayed “the same” — report on emerging fund managers and founders, and the contrarian decisions they make — but the way I executed looks different. For example, I used to think asking founders about their competitors was a good litmus test for candidness, but now I ask the same folks for their most disagreeable belief on how to build — and it works far, far better.

Unlearning what we consider “spicy” can often mean shaking off the 180-character mindset or spending five extra minutes on the phone asking founders about the last thing they changed their mind on.

It’s never been more important to interview people who don’t know how to be anything other than unfiltered, rather than people who know how to give a quick take without saying much. I stopped interviewing people causing a ruckus on Twitter and instead have been quietly building up “speed dial” sources, or people I can turn to for honest takes on background.

Speak now

To end, let’s return back to the Swift startup angle. In 2014, Swift turned to The Wall Street Journal to argue against streaming, piracy and file-sharing, saying that “music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is.”

In 2021, Swift turned her attention away from taking down Spotify and Apple Music, and instead focused on ownership as a channel to establish value. Swift showed us two different ways to be contrarian, but with similar missions.

Similarly, I’ve felt that maturing in my career brings a natural level of unlearning, even if I have the same ethos as when I first decided to be a reporter in sixth grade. The difference now is that the pandemic has changed the world without permission. People, given no choice, are catching up to new realities — whether it’s changing their minds or establishing boundaries or learning to self-advocate. And as we head into 2022, I’ll bet that Swift telling us to “speak now” isn’t a coincidence; it’s a call to action.