Cintrifuse Reflects on 2020, Looks Ahead to 2021
Pete Blackshaw, CEO
A Year of Startup Skilling for Everyone: The extreme challenges of 2020 led to newfound dexterity in the ability to adapt, adjust, and survive. Everyone — irrespective of size — got a crash course in startup skilling. Front-line heroes — caregivers, teachers, and other essential workers — led with “whatever it takes” urgency. Decision cycles sped up. Digital acceleration leapfrogged. Government bureaucracies turned on a dime. Big companies relaxed protocols. Broken supply chains reassembled at startup speed. Rapid testing and incessant data analysis — from cash flow to infection rates — became the new normal.
Francisco Gomez, Fund Associate
A Year of IPOs and M&A: The year of panic and pandemic has morphed into the year of IPOs and M&A. Early in the year we saw companies in the private markets refraining from going to market and working on extending runway with existing investors. Fast forward to Q4 and we are seeing Airbnb, a company that nearly halved its valuation and laid off about a quarter of their workforce, executing an IPO that hit $100B. Other movers included DoorDash launching a huge IPO, Facebook acquiring Kustomer for $1B, and Salesforce acquiring Slack for $27.7B. The exit and liquidity window that many expected to be closed for the year has opened and there seems to be a rush to action with significant uncertainty around how long this environment will last.
John Stieger, COO & Startup Success Lead
The Year of Remote Work: Companies and employees alike generally agreed the “work from home” was a success. However, beneath the surface, I have seen surprising examples of ‘side hustles’ that stretch the definition to the breaking point. Without anyone physically looking over their shoulder many corporate employees have launched new companies or built interesting products while still delivering on their day jobs. Inevitably it’s hard to know if your organization is at full capacity or how much “discretionary effort” you are getting. The innovation I’m seeing when people are freed from oversight as well as ‘time overhead’ (commuting, parking, impromptu meetings) suggests that many organizations could find a great deal of upside if they can find a way to unlock it!
Sarah Anderson, Fund Manager
Technology Ate the World — Now It’s Obese: With an entire planet suddenly locked in their homes and socially distanced, the pandemic saw a surge in valuations of tech stocks and private tech companies, from Zoom to Amazon on the public side and from DoorDash to Thrive Market on the private side. The truth is, investors have few options to find returns in a sliding economy with zero interest rates. This growth of technology and perpetual modifications in human behavior and consumption is attractive, but the ripple effects creates too much money in the private sector, especially venture capital, and the public sector for tech stocks. Valuations are far too frothy right now which creates a vulnerability for long term assets.
Everything Is Changed, Even Co-Working: Covid 19 has forever affected both the economic and behavioral factors of our organization, our city, the country…the world. Just consider co-working, an industry now being disrupted. Capacity-
Perl Marwah, Controller
Agility is the New Norm: While the full impact of COVID-19 is yet to be seen, businesses are experiencing unprecedented challenges. Agility and flexibility are essential. Strict financial management is non-negotiable, even here at Cintrifuse. As a small business owner, my husband and I had to adapt quickly to respond to customer needs, double-down on customer service, stay in front of every conceivable concern about safety and hygiene, and treat every customer like it was our last one. With delivery services like DoorDash and Uber Eats eating into margins, the entire food and delivery business must innovate relentlessly to stay in business.
Eric Weissmann, Vice President – External Relations & Union Hall
Community is Still Key: Technology stepped in and provided the duct tape to keep us connected in this year of quarantines and remote work. Zoom, FaceTime and every manner of virtual platforms have entered our lives and become inseparable tools of modern communication. But the immutable laws of ecosystems and communities still hold sway: people want to interact with other people. Communities are built on communication, but stay intact because of trust. So, no matter the manner of conversation, authenticity is more important than ever taking on an even greater role as the subtleties and nuances of physical interaction disappear on our screens.
2020 Shock Therapy:The pandemic introduced cost savings and efficiencies on an unprecedented scale and within a record breaking time frame. Consequently many companies and households were left with increasing levels of cash and time available. At the same time, many were left with no revenue as their raison d’être suddenly disappeared. High November market valuations suggest the outcome is a net positive. Still, government actions, including measures to efficiently alleviate those negatively impacted, will have a significant impact on long term outcomes.
The Triumph of Scrappiness: I continue to be amazed by the ingenuity, resourcefulness, and “survival skills” displayed by the entrepreneurs and startups in Union Hall. Maintaining an office in OTR is a choice to remain deeply committed to the neighborhood. We must continue supporting them in every way we can – through affordable space, startup services and our BigCo connections – as they are the key to renewal in our community.
Venture Building Steps Up: 2020 confirmed that “venture studios” are the new incumbent within capital investing. This model of entrepreneurship combines company building with venture funding to move, iterate, and scale faster. The model is now taking root within the walls of BigCos — a trend we see growing as corporations seek to re-invent themselves amidst unprecedented disruption. We are already drawing deep insight from Cintrifuse Syndicate Fund investments in this area, and across a range of categories from DTC and sustainability to eSports.
An Endless Buffet of Virtual Tools: While “zoom” is now a verb used on a daily basis, new online event platforms are opening up “participation” territory we never imagined. In July we tested with P&G a platform called Hopin which enabled broadcast content, speed dating, real time “feedback” analytics, and much more. It knocked our socks off! Other “add water and stir” event platforms like Remo, Brazen, Splash, and Whova are popping up daily. To take full advantage of these tools, marketers like myself need to quickly morph into community builders and Slack gurus. I’m excited!
And a Final Word…
The Great Tech Redistribution: We are experiencing what I think of as “The Great Tech Redistribution.” People in major cities are questioning the cost and health risks of incredibly dense populations. Startups and large companies alike are challenging whether it makes sense to stay on the coasts. In recent weeks, both Tesla and Oracle announced they are moving headquarters to Texas, and countless startups launched on the coasts are looking to “scale up” in the Midwest. We need to pick up the pace of learning, hacking, and scaling – and make the case that there’s no better community to launch and scale a startup… and to create the innovations that will give us unparalleled advantages, revitalize our community and improve people’s lives.