Congrats to Her Majesty on celebrating 70 years as the ruling monarch of the United Kingdom. Take Five is my weekly post on the news I would like to highlight this week.
1. We’re not done ‘correcting’ in tech
Last week I posted a deep dive into the continued impact of the current downturn in the market on startups and venture capital. This week I continued to hear about startup layoffs, even in well-funded unicorns. Bolt and Lacework, two heavily funded fintechs, which raised $1.3 billion and $1.9 billion respectively, started laying off people. This follows layoffs at Robinhood and Klarna. More are on the way.
Those at greatest risk are the Israeli unicorns who have raised from foreign funds at a value of more than $5 billion and are not profitable, similar to Lacework and Bolt. The fintech field is particularly notable as it attracted the most investments last year and recorded the sharpest jump in value levels.
In other indicators for the slowdown: global unicorn count is down
A report from CB Insights predicts global venture funding to decline 19% in the second quarter, with retail tech and fintech sectors expected to witness a 50% and 28% slump respectively.
2. Elon Musk calls remote work “Pretend Work”
Elon Musk isn’t known for holding back his opinions and in two leaked emails to Tesla’s executive staff, where he outlined the new ‘remote work’ policy for the company:
In other news, Sheryl Sandberg will step down from the COO role at Meta (f.k.a Facebook) after 14 years at the helm. Turns out she sold out 90% of her stock in the company over the past decade… She helped make Facebook a giant, but it came at a cost (to society) according to Time.
Unity CEO John Riccitiello shared his vision for the Metaverse at the AWE 2022 conference
Everything which is a website now will become a “metaverse destination” before 2030. According to him there will be three kinds of destinations:
- 1. Fully digital worlds: not unlike what’s seen in video games, that feel like “places you could live and inhabit.”
- 2. Destinations that are “halfway”: in the sense that they alter the real world “in a very powerful way.”
- 3. Mixed Reality: Last, he said, are experiences that “are just a little bit of a layer atop today’s world.”
On a related note, last week Tim Sweeney, founder and CEO of Epic (which also includes Unreal, the rival graphic engine to Unity) shared his own vision for the Metaverse with the FT:
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https://www.ft.com/content/e13ce526-0e33-4ca2-9699-184d0138eada
The Unreal Engine powers any real-time 3D needs any customer has. It’s used for building video games. It’s used for live, virtual production on film and television sets. It’s used by architects to prototype buildings. It is used by engineers in product design and by automotive companies.
We see this as the on-ramp for all the companies to bring their physical products into the digital world. In recent years, almost all companies have moved away from a physical-based production, where you would have designed your car by carving out a body out of wood as your first mock-up and then built a prototype out of steel, before proceeding towards production.
Nowadays, everybody is designing digital assets first. The fashion industry is designing digital clothing and visualising it before they decide they’re actually going to make it. So, the entire world’s creation pipeline is digital and then it’s brought to the physical world. But there’s the opportunity now for all these companies to have a direct relationship with all their customers not only with their physical products but with their digital products, too. [Think of] all the opportunities that brings. First of all, it’s a marketing channel and a way to introduce your product to the world in a fun and entertaining way. Ferrari brought their newest supercar into Fortnite and players could drive it around at the same time as they debuted the physical car in the world. Players loved it and it reached a huge number of people and it didn’t feel like an advertisement. It was a fun digital experience that paralleled the physical realm. I think this can carry across to every form of physical product in the world that reaches consumers.
Tim Sweeney: Epic will fight Apple and Google to keep the metaverse open, Financial Times
Scott Kominers of A16Z Crypto shared a long piece on what makes digital real estate valuable in the Metaverse:
Digital real estate has always had value. What’s different about web3 is that digital asset paradigms like non-fungible tokens(NFTs) make it possible for individuals to uniquely own – not just rent – specific pieces of digital real estate and metaverse land and locations for private or shared use. Blockchains, a core web3 technology, enable this by offering decentralized, tamper-resistant, and publicly accessible records of who owns which digital assets.
But, it’s a good reminder that in the wider context, it’s still very early in web3 and Metaverse and lots of people, including experienced investors and entrepreneurs, don’t get what the fuss is all about. Example below.
To be honest, I’m glad that the opportunities in the space aren’t obvious. On a related note, Variety published a special report on Web3, with some interesting stats and examples.
5. Creator Economy startups raised $1 billion so far in 2022, but overall funding volume drops 30%
The Information published the total funding and sector-wise breakup of the U.S. creator economy, highlighting that U.S. startups have raised more than $6.5B since early 2021. The creator economy, however, witnessed a 30% decline in financing in Q1 of this year, compared to the preceding 2021 Q4, with the quarter ending with $1B in funding.
I’m still bullish about tools for content creation and monetisation for creators.
Comic Relief
Finally, some comic relief on the impact of inflation
And where’s 2021 pricing when you need it?
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I’m a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first physical hub for startups.
I’m also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we’ve built 11 schools and 50 libraries in the developing world.