This Week in Startups
00:00:00 · Jason Calacanis, Molly Wood, S2
[00:00:00] S0: Okay, everybody. Welcome to Sunday, Sunday, Sunday. [00:00:02] S1: Sunday, Sunday. The end slash start of the week. [00:00:06] S0: Basically, we consider it the end of our week, but it's kind of the beginning. Really interesting VC Sunday School. Molly had a question for me about the downfall of the wing, which suddenly went out of business and led to this interesting discussion about founders and maybe their blind spots. [00:00:20] S1: And putting... When it's our job to put guardrails up actually, which is a great kind of, lesson for us and consumer facing product builders. And then this week in climate startups, I talked with Tesseract Energy founder Alan Chang about his company's challenging mission to build renewable energy infrastructure, sell energy and sell excess energy as tokens. Very disruptive if it works. Really interesting. It's gonna be great show. Stick with us. [00:00:47] S2: This Week in Startups is brought to you by OpenPhone. As a startup founder, a lot of mistakes are easy to roll back, But using your personal cell phone number as your company number isn't one of them. OpenPhone makes it easy to get business phone numbers for you and your team right on top of your existing devices. Visit openphone.com/twist to get 20% off your first six months. FanDuel Sportsbook. Use code twist during sign up to get started with a no sweat first bet up to $1,000. And masterclass. Learn from the world's best minds anytime, anywhere, and at your own pace. Get 15% off an annual membership to Masterclass at masterclass.com/startups.
00:00:47 · S2, Jason Calacanis, Molly Wood
[00:00:47] S2: This Week in Startups is brought to you by OpenPhone. As a startup founder, a lot of mistakes are easy to roll back, But using your personal cell phone number as your company number isn't one of them. OpenPhone makes it easy to get business phone numbers for you and your team right on top of your existing devices. Visit openphone.com/twist to get 20% off your first six months. FanDuel Sportsbook. Use code twist during sign up to get started with a no sweat first bet up to $1,000. And masterclass. Learn from the world's best minds anytime, anywhere, and at your own pace. Get 15% off an annual membership to Masterclass at masterclass.com/startups. [00:01:35] S0: Alright, Molly. It is Sunday. Good morning, everybody. [00:01:38] S1: Good morning, everyone. I hope you're having a relaxing Sunday. Hope you're having a little coffee, but you just got that itch to learn. You just want a little Sunday school. We're here for you with VC Sunday School. With another one, actually, think we're having a lot of fun with these BC Sunday Schools that are based on a thing that is in the news. So there was a really interesting story about the wing, which was kind of like we work for women. It was a very sort of female oriented membership type kind of coworking space slash club, it seems like. [00:02:17] S0: Maybe more private club than working spaces than vibe I got having been there once. I think so. More like the battery or Soho house than WeWork, but kinda trying to do both maybe.
00:02:17 · Jason Calacanis, Molly Wood
[00:02:17] S0: Maybe more private club than working spaces than vibe I got having been there once. I think so. More like the battery or Soho house than WeWork, but kinda trying to do both maybe. [00:02:27] S1: I'll give it that. Kinda trying to do both, yes, is a big part of it. And it turns out that the wing abruptly has closed. There was a long article in fortune about how it failed despite billionaire backers, a $365,000,000 valuation and a 35,000 person waiting list. I mean, the wing was like super flashy, raised a ton of money and then abruptly closed. And in our group chat about it, Jason made this comment saying, it always seemed to be in service of the founder's ego, not the experience of the customers. And this seems like a really good prompt, if you will, topic prompt, book club prompt. Yeah. Sure. For BC Sunday School. How can you tell the difference when you talk to a founder? [00:03:13] S0: Yeah, I think, listen, ego is a healthy thing for a founder, being driven is healthy, but sometimes you can have blind spots. And if you look at this as a product objectively, it was an awesome product. There was market demand. Women in social clubs, the feedback I got was maybe they didn't always feel welcome, maybe they didn't feel comfortable and a women first or a women only, now there's some legal issues around this, they had gotten sued for discrimination because you can... There's always a guy who can sue for that, like when they have female poker tournaments. [00:03:48] S1: And some of guys who
00:03:50 · Jason Calacanis
[00:03:50] S0: show up for the female poker tournament and they're like, I'm going to ruin this and you can't stop me. And it's like, okay, dude, just let... We're trying to get more women to play poker, can you just... It's one tournament. And then these guys would show up, these poker trolls, as women and then still pay. And so they finally came up with, you know, the laws are you can't discriminate against people by gender I guess, including private clubs. Which seems right, but it also seems right that people should be able to have their own spaces if they want to self organize. I don't know, you know, what I think of this legally or whatever. All I know is if women wanted to have a space for themselves, I'm cool with it, I don't need to troll them. So what they did in poker was, they could charge men a different price, so that men had to pay 10,000 and women paid 1,000, so women got paid 10 to one for these, you know, guys who came. Anyway, this thing was so beautiful and well constructed, they understood their customers the design was gorgeous. You came to the space and it felt like your friends, your friend with the best taste, who had the best apartment that always hosted the greatest parties or brunches, just really well done. And then they also did amenities that seemed to really appeal to women. They had a beauty salon in it with a shower, you had all the products there for free, so if you wanted to do your hair, you were having a meeting, just all really good stuff. Now, there seemed to be a leak in their game that came up over and over and over and over again. And I don't know enough about this, so I'm just going based on what I saw on TikTok and in the articles, which was, instead of having this be run, you know, this perfect product, what I think had perfect product market fit. Yeah. How they applied the membership was to be very selective and people felt like it was run like a sorority, where you had to be cool and had to exclude people and maybe not run for the bottom line, the profits of the business, the sustainability of the business. Because the sustainability would say, well keep raising the prices, have a good profit margin, service the customers. If you're running a hotel, people come in, they pay for the hotel room, you treat everybody the same. You're not saying like, oh, apply to come stay at this hotel.
00:06:13 · Jason Calacanis, Molly Wood
And they certainly got this reputation, and you might know more than me if people in your circle talked about this place, that they let in a certain demographic, a certain type of person and maybe excluded other people. [00:06:28] S1: I think there was that and so there was all of that. There were like a bunch of lawsuits. It sounded like it was like a lot of like yucky rich white women is how it ended up feeling to people. And there were specifically accusations about racism and about members treating staff at these places really poorly, which is awful. [00:06:46] S0: There seem to be a lot of white women were the target membership perhaps, and maybe people of color were working at the front desk. Right. Weird That founder did not, I mean, get that. And then you'd have white woman berating person of color at the front desk for the conference room not being set up the way they wanted it to be. I mean, this is where you really have to check yourself and just think about how you're implementing your ideas. [00:07:19] S1: You really do, and you have to think about what, you know, it's like every founder at some point has to consider the worst case scenario, the like Sure. Worst side effects. Worst interpretation, worst side effects. Like, imagine you know, what is that bat busting drug that gave people explosive diarrhea? I I have given... I've... I have been known to say, is... What's the explosive diarrhea that could happen? Yeah. As a result of your [00:07:45] S0: You're talking about side effects. Talking about side effects, [00:07:49] S1: but then
00:07:49 · Molly Wood, Jason Calacanis
[00:07:49] S1: but then [00:07:49] S0: also in the industry edge cases. [00:07:52] S1: Okay, yeah, good, yep, like that. They also, it sounded like tried to expand really fast. That's always a challenge. Which is always a challenge. So I wonder like, at what point do you as a, if you're on the board, if you're a VC, at what point do you as a VC, this is a great place to start with this conversation actually. In those early meetings, do you ever press founders on what they think is the worst case outcome?