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Here's What Netflix's New 'Culture Memo' Says About How the Company Has Changed
Kristin Snyder
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Netflix promised change after its poor first-quarter earnings. One of the first targets: the Netflix Culture document.
The changes, which Variety reported on Thursday, indicate a new focus on fiscal responsibility and concern about censorship. While promises to support honest feedback and open decision-making remain, the memo’s first update in almost five years reveals that the days of lax spending are over. The newly added “artistic expression” section emphasizes Netflix’s refusal to censor its work and implores employees to support the platform’s content.
The “artistic expression” section states that the company will not “censor specific artists or voices” and specifies that employees may have to work on content “they perceive to be harmful.” The memo points to ratings, content warnings and parental controls as ways for users to determine what is appropriate content.
Censorship has been a contentious issue within Netflix. Last year, employees walked out in protest after the company stood by comedian Dave Chappelle’s special, “The Closer,” which many said was transphobic. The streaming service has since announced four more specials from the comedian, who was attacked on stage at Netflix’s first comedy festival. The show will not air on the platform, as Netflix did not tape the event.
The reaction to Chappelle’s 2021 special ripples further in the updated memo. After firing an employee who leaked how much the company paid for the special, the new “ethical expectations” section directs employees to protect company information.
The memo also reflects pressure borught by poor first-quarter earnings. Employees are now instructed to “spend our members’ money wisely,” and Variety reported that earlier passages that indicated a lack of spending limits were cut. Variety also found that the updated memo removed promises that the company would not make employees take pay cuts in the face of Netflix’s own financial struggles.
These updates come as employee morale has reportedly dropped and editorial staffers at the Netflix website TuDum were laid off en masse. Those employees were offered two weeks of severance pay—and Netflix has now cut a section in the memo promising four months of full pay as severance.
As the company that literally wrote the book on corporate culture faces internal struggles, it's unlikely that making employees take on more responsibility while prioritizing corporate secrecy and discouraging content criticism will improve morale.
Kristin Snyder
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
https://twitter.com/ksnyder_db
Venture Deals in LA Are Slowing Down, And Other Takeaways From Our Quarterly VC Survey
07:00 AM | May 16, 2022
Shutterstock
It looks like venture deals are stagnating in Los Angeles.
That’s according to dot.LA’s most recent quarterly VC sentiment survey, in which we asked L.A.-based venture capitalists for their take on the current state of the market. This time, roughly 83% of respondents reported that the number of deals they made in L.A. either stayed the same or declined in the first quarter of 2022 (58% said they stayed the same compared to the fourth quarter of 2021, while 25% said they decreased).
That’s not hugely surprising given the sluggish dynamics gripping the venture capital world at large these days, due to macroeconomic factors including the ongoing stock market correction, inflation and Russia’s invasion of Ukraine. While startups and VC investors haven’t been hit as hard as public companies, it looks like the ripple effects are beginning to bleed into the private capital markets.
Image courtesy of Hagan Blount
In addition to slowing deal volumes, most investors said they’re seeing startup valuations lose momentum, as well: Roughly 81% said valuations either stayed the same or decreased from the previous quarter, with nearly 39% noting a decline.
Should that sentiment continue moving forward, it could spell bad news for startups as far as raising the money they need for growth, investors said.
“If I was a startup right now, I would be making sure I have plenty of runway,” said Krisztina ‘Z’ Holly, a venture partner at Good Growth Capital. “When it looks like there's some potential challenges ahead in the market, it’s good to fill your war chest.”
Among VC respondents, about 86% said they believed that valuations in the first quarter were too high—one potential reason why deals slowed down in the first quarter, according to TenOneTen Ventures partner Minnie Ingersoll. She noted that L.A.’s growing startup scene features more early-stage ventures, whose valuations haven’t come down the way later-stage startup valuations have.
“I would say we are just more cautious about taking meetings where the valuations are at pre-correction levels,” Ingersoll said. “We didn’t take meetings because their valuations weren’t in line with where we thought the market was.”
While most respondents said the Russia-Ukraine war didn’t have much impact on their investment strategies, some 22% said it did have an effect—with one VC noting they had to pass on a deal in Russia that they liked.
Is There a Flight Out of Los Angeles?
Los Angeles was heralded as the third-largest startup ecosystem in the U.S. at the beginning of the year, behind only San Francisco and New York. Yet nearly one-third (31%) of VC respondents said that at least one of their portfolio companies had left L.A. within the past year. It won’t come as a huge surprise that the city of Austin, Texas has been one of the prime beneficiaries of this shift—with roughly half of those who reported that a portfolio company had left L.A. identifying Austin as the destination.
The tech industry’s much-hyped “exodus” from California has been widely reported on, especially as more companies have embraced the work-from-home lifestyle and also opted to move their operations to lower-cost cities and states. Most notably, Elon Musk has recently moved two of his companies, electric automaker Tesla and tunnel infrastructure startup The Boring Company, from California to Texas (with both of those firms moving in and around Austin).
“In today's competitive market with lots of capital to invest, we think the next generation of successful VCs are going to be diverse in markets (not just Silicon Valley)... [and] have access to undiscovered founders from everywhere,” said one survey respondent.
NFTs Aren’t Popular With VCs—But Web 3 Is
“It’s the future,” according to one respondent. “Buckle up and get on board.”
Are NFTs...
More than 71% of VC survey respondents said they were bullish on Web3—the new blockchain-enabled iteration of the internet, which promises decentralization and a whole range of applications involving cryptocurrencies, NFTs, DeFi and more. It’s the same sentiment informing Santa Monica-based VC firm M13’s new $400 million fund, which considers Web3 a core piece of its investment thesis.
In Q2 2022, do you expect your portfolio companies to:
L.A. is home to an ever-growing cadre of Web3-focused startups operating across the realms of finance, entertainment and other industries. But while local investors are willing to pour money into blockchain-related ventures, one segment of the space continues to evoke skepticism: Only 18% of respondents would describe NFTs as “a good investment,” while 33% thought they were “bad” investments and 39% said they were unsure.
As in our last survey several months ago, it appears that NFTs continue to divide opinion, with respondents expressing differing perspectives on their value and utility. One referred to them as “get rich quick schemes,” but added that the art pieces and social communities that emerge from them may be valuable. Another said that “NFTs as a digital medium are a legitimate thing”—but noted the vast majority are “awful investments with no intrinsic value.”
Graphics courtesy of Hagan Blount.
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Keerthi Vedantam
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
https://twitter.com/KeerthiVedantam
keerthi@dot.la
Veo CEO Candice Xie Is Bringing an Anti-Tech Bro Approach to Micromobility
06:00 AM | February 07, 2022
Image courtesy of Veo
Yet another micromobility startup will soon call Los Angeles home, bringing its two-wheel sensibilities to what’s long been a four-wheel city.
Veo, an e-scooter and e-bike-sharing startup, will open its new headquarters on Santa Monica’s Third Street Promenade later this month. Originally hailing from Chicago, Veo plans to hire up to 200 employees locally, as it outlined in application documents filed with local authorities. The company currently operates in more than 25 cities, including Santa Monica, and plans to launch across wider Los Angeles by the end of this month.
“With this kind of active user base year round, it’s like heaven for us,” according to Veo CEO Candice Xie. Both Xie and her co-founder, Veo president Edwin Tan, have moved to the L.A. area as part of the relocation.
Founded in 2017 as a bike-sharing startup, Veo has since expanded to include e-scooters in its offerings. It is also the only major micromobility operator run by a female CEO. Xie and Tan were inspired to launch Veo after witnessing the bike-share boom in Asia, but their ambitions were decidedly greener: Rather than sourcing cheap bikes that would eventually end up in a landfill, they wanted to build their own quality product and provide a scalable, sustainable service for communities.
Veo CEO Candice Xie.
Image courtesy of Veo
Tan, formerly an engineer for bicycle manufacturer Trek, brought his experience in manufacturing and supply chain logistics, while Xie—a former financial planner for Schneider Electric—brought her business background. They initially named the company VeoRide, as in “we all ride.”
As Veo grew its offerings from bikes and e-bikes to e-scooters in 2019, it continued its commitment to accessibility for all riders across socio-economic demographics. That’s a notable goal given how, according to a 2020 report by the L.A. Department of Transportation on the county’s micromobility pilot program, 64% of riders identified as male, 58% were aged 18-to-34 and nearly a quarter earned over $100,000.
After Veo built its first standup scooter in 2019, Xie saw an opportunity to develop a product that could appeal to a more diverse user base. “As a woman—and I cannot speak for all women—I am a more risk-averse person,” she said. “So standing there [going] 15 miles per hour, with cars riding side-by-side with me, made me a little bit freaked out.”
In 2020, Veo debuted the Cosmo, a sit-down e-scooter with a larger wheelbase and lower center of gravity. Xie said that they wanted to appeal to women who might wear high heels or skirts to work, as well as older users who would feel more comfortable sitting down. A Veo user survey last year found that women, people with disabilities and riders taking longer trips all preferred it to Veo’s standup scooter.
Xie believes that the future of micromobility is in a multi-model approach.
“I don't believe it if someone says, ‘This is the perfect scooter,’” she said. “No, it's not; we're just a couple of years into this industry. There are still a lot of things we can build from the safety, sustainability and inclusivity side.”
Veo plans to roll out more vehicle types and features, appealing to a wide range of users and use cases, in the coming months.
So far, it seems like Veo’s city-by-city strategy is paying off. It’s the only company operating in both Santa Monica and New York City—where, alongside Bird and Lime, it’s part of the Big Apple’s recently launched micromobility pilot program. (Bird was notably kicked out of Santa Monica last year, while Lime pulled out of the city in 2020.) Veo also raised $16 million in new funding last year to support its expansion into new markets.
Xie noted that cities are maturing in their approach toward micromobility after the industry’s tumultuous beginnings, with municipalities choosing companies that are willing to operate as community partners rather than chasing riders at all costs.
In December 2020, Xie took to Medium to call out other operators for prioritizing rapid growth at the expense of building a sustainable business model. She pointed out that Veo—and not Lime, as that company’s CEO Wayne Ting had intimated—was the first micromobility company to achieve profitability.
While Xie does not hesitate to throw down the gauntlet, being a female CEO is not without its challenges. She mentioned one investor forum where, as the only woman in the room, another attendee handed her his drink thinking that she was a server.
“A lot of products used by females are actually designed by males,” she said. “And I do think that’s something that needs to be improved.”
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Maylin Tu
Maylin Tu is a freelance writer who lives in L.A. She writes about scooters, bikes and micro-mobility. Find her hovering by the cheese at your next local tech mixer.
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