A TikTok Mansion for Startup Founders. Launch House Isn’t What it Looks Like.

Francesca Billington

Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

Launch  House
Photo by Eray Alan

Kristen Anderson was four-and-a-half months pregnant when she got a private message on Twitter about a new self-proclaimed "creator house for entrepreneurs" in Los Angeles.

"We've rented out a $35 million mansion in Beverly Hills and have brought in some amazing founders to live together," the message read.

Anderson is no stranger to the world of venture capital and startup accelerators. She landed $8.1 million in funding for her company after finishing Y Combinator, a program that helped launch big names like Instacart and Airbnb.


But after a year of lockdown and stay-at-home orders, the job got lonely. So in February, just two weeks after learning about it, she booked a flight from Boston to Los Angeles to join Launch House, a live-in accelerator where mostly twentysomethings build their dream tech companies while chronicling it all for TikTok and Instagram.

And they're doing it from a 12,000 square-foot property they say was last rented by Paris Hilton.

In the living room, a whiteboard calendar lists upcoming events like "How to think about the future" and "hackathon presentations." One night, Anderson and her co-founder ordered pizza for the house in exchange for a brainstorm session.

"We just want to be with really smart, talented young people who are building amazing things," she said. "That helps us maintain energy."

The idea came from former Airbnb and Uber product manager Michael Houck, Google alum Brett Goldstein and Commsor co-founder Jacob Peters. The trio sees traditional startup incubators as a relic of the past.

Their goal is to recreate the basements and dorm rooms where the minds behind Google, Amazon and Apple began their empires. Only in their version, it's in a palatial setting replete with a waterfall and hot tub overlooking Los Angeles.

"Universities are no longer going to be the aggregators of great talent," said Peters, who's started to invest his own money — he won't say how much — in Launch House residents. "It's going to be small, niche communities that start in houses."

Perched on a hill in the 90210 zip code, the house reads part co-working space, part dorm-room with the pace of a reality show. Competition to get in is fierce. To secure a spot, applicants fill out an online questionnaire. For those who make the cut, an interview with the founders comes next.

Everyone pays rent, but they call it "membership."

"It's kind of syntax but it matters," Goldstein said. "This is a club and a community, and the physical living experience is just a small component."

Launch HouseCommsor co-founder Jacob Peters, Airbnb and Uber product manager Michael Houck and Google alum Brett Goldstein.Photo by Eray Alan

The vision captures a very specific — and opportune — moment in L.A. The sway of TikTok celebrities and influencers has crashed into VC money. It's at this meeting point where socially-native entrepreneurs hope to make a name for themselves and their nascent companies.

Just take 21-year-old Marc Baghadjian, a senior at Babson College who wakes up for 5 a.m. Zoom classes some mornings before working on his startup late into the night. Earlier this month — right before moving in — Baghadjian landed $1.1 million for his TikTok-style dating app, Lolly. Baghadjian has used the house as a networking opportunity and it helped him land more investors. Recently he secured another $2.5 million in new commitments and his company's valuation tripled.

Influencers drop by almost every other day, Baghadjian said. In February, Lolly posted an ad on TikTok featuring 19-year-old Milo Manheim, a Disney Channel actor and "Dancing with the Stars" competitor.

(Jacobs said the house maintains a "very strict policy" when it comes to visitors and socializing. Guests are required to test negative for COVID-19 at the door, using self-administered rapid tests.)

But unlike veteran accelerators like Y Combinator, Launch House doesn't promise entrepreneurs any investment. The draw is something else — schmoozing, advice and social media exposure.

As the line between advertisement and content creation blurs, it's changing the way companies find both investors and consumers.

"What on Instagram is marketing and what is entertainment?" said Olav Sorenson, a professor specializing in entrepreneurship at UCLA's business school.

"People are no longer thinking about buying ad space as the way to market a product. They're thinking about how we generate word of mouth through connecting to influencers."

L.A. is "on the forefront of this," said Sorenson. "Entertainment itself is often very entrepreneurial."

'Let's Pretend This Is a TikTok Creator House'

Photo by Eray Alan

At almost all hours of the day, entrepreneurs at Launch House work from slender white desks and office chairs scattered across the living room, decorated with sparkly art they say Hilton left behind. Others choose to work outside, on lounge chairs lining the pool.

"I spend a lot of time in the laundry room," said Kathryn Cross, a 22-year-old from Manhattan Beach. "That's a pretty big room and you can lock the door. I'll take calls from my car or in the garage."

Cross is a model, runs a Gen Z consultancy firm called Bridge Strategy and streams herself playing chess on Twitch for extra cash. She was worried about the lack of privacy before moving in, but said space and noise aren't issues. Even weekends are work days.

"At 2 a.m. on a Saturday, there will be someone sitting in a corner coding," she said.

And Cross doesn't want to leave. While Launch House was designed to bring on a new cohort of founders every month, many stay longer.

The concept for a live-in accelerator was born last summer, when some tech companies closed their offices and even dropped pricey leases. Fashioning themselves as "digital nomads," young entrepreneurs across the country took off for remote work spots. Their offices could suddenly be anywhere.

@launch_house

Reply to @alyssaasf - were a creator house for #startups #tech #fyp

Houck picked Tulum, Mexico. He already knew Goldstein and Jacobs through On Deck, a fellowship program for entrepreneurs cooking up new startup ideas, and asked them to tag along.

"On the way down, we got this cheeky idea," Goldstein said. "Let's pretend this is TikTok creator house."

The first version of Launch House was born there, in an AirBnb villa blocks from the beach, as a "co-living, co-working experiment," Peters said. It was set up like an upscale college campus for about 18 entrepreneurs to build software and apps. A big facet of that experiment was documenting it online.

"We made a website, an Instagram page and a TikTok," said Peters. "Our social accounts got immediate buzz. No one had ever really lifted that veil of mystique that often surrounds early-stage startup founders."

But, as Goldstein put it, the infrastructure in Mexico was "not there for us to give the right experience."

COVID-19 cases were still soaring last fall. There was a small outbreak at the house. Then, in October, Tulum was issued a warning when Hurricane Delta ripped through the Gulf of Mexico and into Louisiana.

"There were leaks in our place," he said. "The grocery store was closed because there was a hurricane. It was just kind of hot. We couldn't Instacart orders."

Joining LA's Influencer Buzz

The three relocated to L.A., a city clad with venture capitalists they already knew. And inside other extravagant houses across the city, young content creators were churning out TikToks and Instagram posts, signing deals with big name companies for advertisements.

"Paris Hilton moved out literally a week before we moved in," Peters said. "We turned a celebrity mansion into a hacker house," said Peters.

Hilton's PR agency did not respond to questions about whether she rented the house prior, but a few TikTok posts look to be filmed inside. Launch House has no ties to M13 Ventures, the firm founded by Hilton's fiancé, Carter Reum, according to M13 partner Christine Choi.

If the common areas resemble a glamorous WeWork, the seven bedrooms read more like dorms. Grey metal bunk beds, piles of laundry, books written by successful entrepreneurs.

Those are parts rarely seen on Launch House's social media accounts.

The goofy yet focused atmosphere inside the house — along with the success of those living there — are what the public sees.

Faraaz Nishtar, a software engineer, ended his lease in San Francisco to join Launch House. It's there he met Brendon Davis, a 23-year-old stunt YouTuber who films videos with members of Sway House, a buzzy TikTok house in Bel Air home to a group of young influencers. At least once a week, Davis drives to Launch House to brainstorm with Nishtar on pitching his app to content creators.

His startup, Alias, archives a user's digital footprint, which Nishtar hopes will become a "global directory" of online content. He scored half a million from investors like Balaji S. Srinivasan, a former general partner at Andreessen Horowitz, and later attracted a few new angel investors when he moved in. Peters included.

"Last night, we stayed up talking from midnight until 2 a.m. about the future of media," Nishtar said. "In college, people are dicking around and lounging. There's not much of that happening here."

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How To Startup: Part 5 - Minimum Viable Product

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Minimum Viable Product
Image by Master1305/ Shutterstock

When thinking about tech giants like Facebook, Amazon or Google, it’s hard to imagine their weak and humble beginnings. When going from nothing to something, the founders of these companies all had similar startup journeys - they started with a minimum viable product or MVP. In the same way you can’t build a house without laying the foundation, you can’t create a successful product without building an MVP.

The Purpose of MVP

One of the biggest reasons startups fail is because founders design their initial product based on assumptions. As an entrepreneur, you don’t want to put an enormous amount of time, effort and money into a product the market may not even want.

Quibi - yes, that Quibi - is an excellent example of this. After spending upwards of $63 million, Quibi never quite found its footing among TikTok, YouTube and its many streaming competitors. The company never ran an MVP or any experimental public beta to test what kind of content and features resonated well with audiences, and simply built a product that nobody wanted or needed. After raising $1.75 billion in venture capital, the company shut down less than a year after its initial launch. This is why starting with an MVP is so important.

How To Build An MVP

By definition, a minimum viable product is a product with enough features to attract early-adopter customers and validate a product idea early in the development cycle. It allows founders to collect the maximum amount of user feedback with the least amount of effort. When building an MVP, you’ll want to keep the following things in mind:

- Answer the right question. It’s important to determine what your central hypothesis is. When Airbnb’s founders wanted to see if they had a viable idea, they didn’t rent out space or buy new beds. They simply tested the question “Will strangers pay to stay in my apartment?” by providing a free lodging experience in their living room with the promise of networking with like-minded people.

- Decide which metrics matter. Identify what will define the success of your product. Common MVP metrics include churn rate, customer acquisition cost, average revenue per user and lifetime value of a customer. However, the data collected should include both qualitative and quantitative insights about how your product is used and what customers actually think about it.

- Actively measure what you are testing. It is important to continuously test, measure and learn until the product is finalized.

- Build internally if possible. It’s easier to meet internal needs and challenges first. For example, the original Twitter prototype was designed for internal users at (the now closed) Odeo as a way to send messages to other employees and view them on a group level. After initial internal testing and positive feedback, Twitter launched publicly in 2006.

- Do things that don’t scale. In this early stage, you have nothing to lose. Create a great experience for initial users and cater to their needs. Put in the extra amount of effort while you continue to build confidence. Talk with every user and every customer, and do things that would never scale once the company gets bigger. For example, Yelp’s founder Jeremy Stoppelman famously went to every bar in San Francisco to pitch them on Yelp in the early days.

Not Great But Good Enough

When launching Zillow in 2006, we had to decide how good is good enough to launch. The first version of the product had Zestimates on 40 million homes with about a 12% margin of error. When launching, we knew that the Zestimates weren’t going to be entirely accurate and mainly just wanted to see how Americans would react to being able to publicly view valuations and information about homes.

We actually held up the Zillow launch by about two months to avoid angry and upset consumers. We spent this time building out an extra feature called My Estimate that allowed users to modify the estimates of their home with information Zillow didn’t have, such as for things like remodeling or significant changes to square footage. We were worried people might not be happy if the estimate was incorrect and they couldn’t do anything about it, which is why we held off. It was a difficult decision to push back the launch, but worth it in the long run. When striking this balance between our MVP and V1, we knew it didn’t have to be great but just good enough to entice users. Now, 15 years later, Zillow has upwards of 100 million homes with about a 3% margin of error, and the product is much more fully evolved.

Key Takeaway

The key takeaway here is that MVP allows organizations to start small, and slowly build up to the best version of their product. When starting Hotwire, we started by just selling airline tickets from a few carriers. Later we expanded to include more airlines, additional flight options, and eventually hotels, rental cars and cruises. But the early MVP was as stripped down as possible. See below for Hotwire’s beta site in 2000. About as bare-bones as it gets.

Image from HotwireAn MVP of Hotwire sold airline tickets from just a few carriers.Image from Hotwire

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At VidCon, Investors Are Still ‘Betting Big’ on the Creator Economy

Kristin Snyder

Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

Vidcon 2022
Photo by Kristin Snyder

The creator economy is the bedrock of this week’s VidCon convention, which is drawing creators, companies, investors and fans alike to Anaheim to discuss the rapidly growing realm of digital content and entertainment.

To discuss how investors, in particular, are viewing the booming creator landscape, Thursday’s “Betting Big on the Creator Economy” panel featured the likes of MaC Venture Capital partner Zhenni Liu, Investcorp managing director Anand Radhakrishnan, Team8 Fintech managing partner Yuval Tal and Paladin co-founder and CEO James Creech.

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Netflix Lays Off Another 300 People

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Netflix Lays Off Another 300 People
Photo by DCL "650" on Unsplash

Netflix has imposed its second round of layoffs in less than a month, cutting another 300 people from its staff.

“Today we sadly let go of around 300 employees,” a Netflix spokesperson confirmed to dot.LA. “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.”

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