The return of the lean, green startup

This week's startup news and trends will be the subject of a new weekly column. This will be in your inbox if you subscribe here.

The market is down. The party is over. Right now, Peloton of X startups aren't too happy.

As tech stocks take a hit, the big question on my mind is how a dip in market performance impacts early-stage startups. There is an argument that the market highs were unsustainable, but just because expectations exist doesn't mean that ripple effects are gone.

The flags are not going unnoticed, with some firms lowering revenue expectations even at the earliest stages. On Equity this week, Alex and I interviewed Mary D'Onofrio, a growth partner at Bessemer, who admitted that her expectations for exit multiples have changed. The stock market may be sane, but that is still sad.

For anyone who has been reading this newsletter, the return of full due diligence is music to my paranoid ears.

After speaking to a few venture investors and founders, I think we're going to see the return of the lean, green startup. In the past, stock market dips may have caused a decrease in venture capital dollars. There has never been more capital in the venture world.

A decline in valuations isn't a decline in capital for an early-stage startup. I expect to see founders with cash in the bank take on a leaner mindset, maybe spending more conservatively or thinking about runway again. Vernacular will change if the founders focus on building out key capabilities that will help them survive a bigger slowdown. It may be a while before a founder tells me that their capital is offensive.

The return to normal feels foreign, but it is because we have been in different times for a long time. I am paying attention to how startups talk about growth. Are you raising money to hire, develop, acquire or just be able to exist?

For my full take on this topic, check out my latest column: 3 views: How should founders prepare for a decline in startup valuations and investor interest? I'd love to know how you're reacting to the news, so I'd like to hear it from you.

In the rest of this newsletter, we will discuss education, emotional pivot, proactiveness, and some insidery buzz in the startup world.

Education’s inevitable pivot to emotion

I wrote a story about edtech's inevitable pivot to emotion-based learning. I explored how three venture-backed companies are navigating the longstanding challenges of personalized education with fresh takes.

It's important because personalized learning isn't a new phenomenon for education enthusiasts. New venture-backed startups are making products that look at students beyond their grades and scores. The future of learning depends on understanding the more subjective qualities of learners, which feels hard to argue with. How to apply a venture-like mindset to something that is hard to scale as a sense of belonging is a tension that is ahead.

There are other lessons.

Deal of the week

Parthean raised $1 million at a $12 million valuation to build a personal finance company that helps users track their finances at the same time. The idea of pro-active learning is the big vision behind it.

He said that anyone who tells you that people want to learn is wrong.

Parthean has an opportunity to track a metric that traditional education companies are unable to measure: connection rates. Part of Parthean's progress is measured by whether users end up doing the action items tacked onto the end of the lesson, such as setting up a wallet on a platform like Coinbase.

It can only do that because it has your spending information, but that sort of integration could lead to fascinating outcomes. It is less about consumption and more about creation.

Mentions of honorable nature.

In the DMs

• Hustle Fund is raising a $50 million third fund, per SEC filings. This would be Hustle Fund’s second swing at an investment fund of this size, with its second fund ultimately missing the mark and closing at $30 million.
• Clubhouse is building out a child safety team, which could work on “establishing new investigation procedures, developing new safety features or researching the latest child safety regulations,” per a job listing. The social audio platform, which has attracted significant investor and user interest, has been scrutinized for its inaction on the moderation front, giving the hiring goals likely more haste than usual.
• Y Combinator wants to invest more in software tooling for its admissions process, both from a platform perspective for applicants and for a triage flow so reviewers can wade through the data set to find signals. That’s good, given Y Combinator’s batch size admissions and the fact that there are only five people on the admissions team.
• Speaking of YC, its favorite competitor On Deck appears to be taking another swing: On Deck Daily, a forum for techies to chat (or, if you really think about it, a Hacker News competitor). It’s also building a Startup School.

Across the week

Equity, the tech news show I co-host with Alex and Mary Ann, is going live! Tickets are free and puns will come at the cost of our producers, so join us for a virtual, live recording of our show on February 10th.

There is a person seen on a website.

The power of home ownership is in the hands of actual homeowners.

Percept.ai is acquired by Atlassian.

This Week in Fintech has a venture fund.

Joby Aviation wants to fly over San Francisco Bay.

It was seen on the tech site.

Robinhood is getting hammered today.

How to successfully manage an acquisition requires hard cash and soft skills.

Our startup didn't have a physical presence in the Japanese market.

Please more tech drama.

There are 3 questions about immigration and naturalization.

David Chaum says web3 is computing with a conscience.

Next time.

N.