'Throw Everything Overboard That You Don’t Really Need': Spencer Rascoff Offers Founders Advice During a Downturn

Joanne Saunders
Joanne Saunders is a freelance writer. She writes about health, travel and clean tech entrepreneurs. Her work has been published in Huffington Post, Vacationer Magazine, and Comics Beat, among other publications.
'Throw Everything Overboard That You Don’t Really Need': Spencer Rascoff Offers Founders Advice During a Downturn
Photo by David Ruano

Lights were strung across the lawn and over the pool while about 150 guests meandered through the open concept home and towards the bar and the mounds of guacamole and warm churros. Hosted by McKinsey and Pacific Western Bank, “The Founder’s Guide to L.A.” event focused on advice from active angel investor, author and podcaster Spencer Rascoff, who co-founded Zillow, Hotwire, Pacaso, Supernova and–of course–dot.LA.

Through questions asked by McKinsey & Company Senior Partner Tarek Elmasry and the audience, Rascoff spent a half hour providing speedy and insightful advice to tech founders in attendance.


When asked what he looked for in a founder, Rascoff said, “I look for grit - somebody who has something to prove to somebody, and who has a chip on their shoulder–someone who’s willing to run through walls for that company and that idea.” Rascoff, who seemed even-keeled and energetic, explained that his ambition and drive came from the death of his brother in a car accident when they were both in their teens.

Though founder life is exciting, Rascoff now sees himself as more of a teacher.

“I did it for twenty-something years, and now I’m a coach and a mentor to my startups. I’m happy to be in my mid-40s and to be at this stage in my career. It’s a little less dangerous. It’s also intellectually stimulating and rewarding.”

He teaches a class on startups at Harvard College and Harvard Business School. No investor is perfect, and Rascoff has had his share of failures along the way, but he’s learned from those as well.

As the evening progressed, Rascoff advised founders to make financial cuts to extend their runway to cover 24 months of operations.

“Cut your headcount, cut marketing expense. Throw everything overboard that you don’t really need in order to extend the runway.” He said it may not be as fun as running a company during the good times, but great things can happen when managing a company through a difficult period.

As for advice for founders who are seeking equity, Rascoff made some grim observations.

“Equity is hard to come by right now. VCs are mostly hiding under their desks; they’re shoring up their existing portfolio companies with inside rounds, and it’s pretty hard to get investors to write new checks into new companies right now.”

An attendee with a background in robotics and aerospace asked Rascoff and Elmasry how to start a company that would be in a capital-intensive area when no one is easily giving money. Both suggested bootstrapping. Before investing, investors want to see more proof points these days–and at a slightly later stage, Rascoff explained.

Photo by David Ruano

Market volatility and recession fears have caused the IPO window to slam shut in 2022. Experts have predicted a return in activity in late 2023. But Rascoff thinks it could be even quicker than that, if historical trends repeat themselves. The IPO window has never been closed for much more than eight months, he notes, and the sector is already about six months into its current dry spell.

Whenever access to capital becomes easier to access, L.A. is perfectly positioned to be a major tech hub. Rascoff hailed the region as the place where media, entertainment, pop culture and influencers intersect. Along with consumer businesses, L.A. boasts incredible aerospace and a robust venture ecosystem. Recently, even the major Silicon Valley players have begun to appreciate the value of establishing a presence in L.A., he added.

Rascoff intends to ride these tailwinds. As general partner of venture company 75 & Sunny, he and his team is working with 100 startups and have incubated five companies, a quarter of which are proptech startups. He’s specifically excited about democratizing access to real estate assets, but he’s also focusing on vertical social media networks like All Trails and LinkedIn. With his daughter Sophia, Rascoff recently started a vertical social network aimed at foodies called Recon.

After the talk, the attendees continued the night under the lights, surrounded by lush green walls of foliage, drinking their beverages of choice and talking about tech in L.A. and the future. Despite the current economic struggles, there’s plenty of optimism in the room.

LA’s Data Center Supply Crunch

🔦 Spotlight

Happy Friday Los Angeles!

The Los Angeles data center market is experiencing a significant supply crunch, ranking 12th in growth among top markets since 2020 with only 265 megawatts of colocation inventory (data centers where businesses rent space to store their computing hardware and servers). Despite this, demand is surging, driven by AI, cloud, and hyperscaler needs, with AI accounting for 20% of new data center demand nationally. This scarcity is creating a highly competitive environment, with vacancy rates at a record low 3% and asking rents rising 13-37% year-over-year. For Los Angeles, this presents both challenges and opportunities in the big picture. The city's strategic position as a global entertainment hub and its connectivity to international markets through subsea cables make it an attractive location for data centers. However, the limited inventory and rising costs could potentially hinder growth and innovation in the tech sector. To maintain its competitive edge, Los Angeles will need to address these constraints through new developments, such as GI Partners' 16 MW addition at One Wilshire, and by focusing on high-connectivity, high-power capacity submarkets. The city's tech community should prepare for a landscape of increased competition for quality data center space, higher costs, and the need for innovative solutions to meet growing demand, particularly in AI and cloud services. While Los Angeles faces a challenging data center supply crunch, its strategic advantages and ongoing developments offer a promising path forward.


🤝 Venture Deals

LA Companies

  • Daisy, a one-year-old startup that designs and installs smart home and office technology systems, raised a $7M Series B co-led by Goldcrest and Bungalow, with previous investors Bullish and Burst Capital also stepping up. The company has raised a total of $13.3 million. - learn more

LA Venture Funds


    ✨ Featured Event ✨

    LA TECH CEO SUMMIT

    LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

    Learn More Here

    Register Here


    Download the dot.LA App

    🌐Decentralizing Data & Vacations: Sony's Web3 Leap and Sensible Weather's KOA Partnership

    🔦 Spotlight

    Happy Long Weekend Los Angeles!

    Sony Group is making a significant push into the blockchain and Web3 space, leveraging its Sony Pictures and Sony Music divisions along with a new global incubator. The company has developed the Soneium blockchain through Sony Block Solutions Labs, a joint venture aimed at accelerating Web3 innovation. Sony is launching the "Soneium Minato" public testnet and a developer incubation program called "Soneium Spark" to foster ecosystem growth and adoption. The initiative includes strategic partnerships with Web3 companies such as Astar Network, Circle, and Optimism. Sony aims to create a fan community centered on creators and connect diverse values through Soneium, with the ultimate goal of integrating Web3 services into people's daily lives. While the company acknowledges the challenges faced by Web3, including limited user adoption and the need for mainstream use cases, it remains committed to decentralizing the concentrated power of the current internet landscape.

    In completely unrelated and more digestible news Sensible Weather, a leading weather protection provider that we’ve featured many times, has partnered with Kampgrounds of America (KOA) to offer Weather Guarantees at over 450 KOA Campgrounds across the United States. This collaboration allows campers to purchase weather protection for their outdoor experiences, providing peace of mind and potential reimbursements of up to 100% of their nightly rate if weather conditions exceed predefined parameters. The partnership comes at an opportune time, as camping has seen a significant increase in popularity, with active campers growing by 68% over the past decade. If you are looking to do some camping this fall make sure you look into Sensible Weather protections to ensure that unpredictable weather won't dampen (nailed it) your camping experience.


    🤝 Venture Deals

    LA Companies

    • Space and Time, a blockchain data warehouse developer, raised a $20M Series A led by Framework Ventures. - learn more
    • Miris, a provider of spatial content streaming solutions, raised a $26M Seed Round led by IAG Capital Partners. - learn more

    LA Venture Funds

    • Fika Ventures led a $4.55M Seed Round for Revenew, a San Francisco startup that aims to help digital platforms and marketplaces manage their payments and optimize financial operations. - learn more
    • Bonfire Ventures participated in a $25M Series A for Supio, an AI platform for personal injury law firms. - learn more
    • Amplify LA participated in a $2M Seed Round for Pryzm, a startup that provides tools and data to help businesses navigate government contracting more efficiently. - learn more

      ✨ Featured Event ✨

      LA TECH CEO SUMMIT

      LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

      Learn More Here

      Register Here


      Download the dot.LA App

      Personality Assessments Improving Workplace Dynamics

      Misunderstandings can have significant and sometimes severe impacts, far beyond the hilarious cake pictured above. Many organizations are increasingly using personality assessments to improve team dynamics and productivity. Tests like the Enneagram, Myers-Briggs Type Indicator (MBTI), and DISC assessment are valuable tools for developing existing teams in addition to hiring new employees. These assessments provide insights into team members' motivations, communication styles, and work preferences, helping colleagues understand each other better. By highlighting the different personalities within a team, these tests can enhance communication, resolve conflicts, and optimize task assignments based on individual strengths. As companies aim for greater efficiency and collaboration, the Enneagram, MBTI, and DISC assessments are becoming essential for transforming established teams into more effective and cohesive units.


      Image Source: iEQ9

      Enneagram

      The Enneagram test is a sophisticated personality assessment that categorizes individuals into nine distinct personality types, each defined by unique motivations, fears,and behavioral patterns. This holistic approach enhances team dynamics in a business setting by fostering self-awareness, improving communication, and facilitating conflict resolution among team members. By understanding different personality types, teams can optimize their composition, tailor professional development, and create a more empathetic and collaborative environment. This framework not only helps leaders adapt their styles to better support diverse team members but also promotes inclusivity and effective collaboration, ultimately leading to improved team performance, productivity, and retention.

      Resources:iEQ9. We recommend getting an Enneagram coach to get the most out of the results.

      Key Features: Focus on core motivations. Accounts for personality shifts under stress or growth. Offers practical, actionable guidance for personal growth. Uses a dynamic, adaptive questioning approach. Claims 95% accuracy rate through advanced techniques.


      Image Source: DiSC Profile

      DiSC (Dominance, Influence, Steadiness, and Conscientiousness)

      The DiSC assessment is a widely used behavioral analysis tool that categorizes individuals into four primary personality types: Dominance, Influence, Steadiness, and Conscientiousness. For businesses, DiSC provides valuable insights into employees' communication styles, work preferences, and motivations. By understanding these behavioral tendencies, teams can improve collaboration, reduce conflicts, and enhance overall productivity. Implementing DiSC in a business setting can lead to more effective leadership, tailored communication strategies, and optimized task allocation based on individual strengths.

      Resources:DiSC Profile.

      Key Features: Designed specifically for workplace applications. Focuses on observable behaviors rather than psychological traits. Widely researched and validated over 40+ years. Provides practical strategies for improving interactions.


      Image Source: The Myers-Briggs Company

      The Myers-Briggs Type Indicator (MBTI)

      The Myers-Briggs Type Indicator (MBTI) is a widely used personality assessment tool that categorizes individuals into 16 distinct personality types based on four dichotomies: Extraversion/Introversion, Sensing/Intuition, Thinking/Feeling, and Judging/Perceiving. For businesses, the MBTI provides valuable insights into employees' communication styles, decision-making processes, and work preferences.This helps promote a more productive workplace, and enables employees to become involved in more meaningful ways, all while leveraging everyone’s unique strengths.

      Resources:The Myers-Briggs Company.

      Key Features: Focuses on preferences rather than traits. Focuses on how people perceive and judge information. Widely used in business and career counseling


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