Month: March 2022

There’s no textbook-approved technique for building a startup engineering team: in the early days, everyone wears several hats.

But when a company enters its growth phase, the recruiting process is systematized, new hires are sorted into discrete units, and a thin layer of management is applied to keep everything on track.

When Jean-Denis Greze accepted the CTO role at Plaid in 2017, the fintech company was still financing its Series A had “about 20 engineers who were still trying to feel their way to product-market fit,” writes enterprise reporter Ron Miller.

Today, Plaid’s engineering team numbers 350 people.

Full TechCrunch+ articles are only available to members
Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription

In an interview, Greze explained how Plaid moved away from an all-hands-on-deck ethos to a system where contributors had clearly defined roles they weren’t locked into.

I asked Ron what surprised him the most while reporting this story, and he said it was the fact that Visa’s failed attempt to purchase Plaid last year made it easier for them to hire new technical talent.

Suddenly, “people who didn’t want to be part of a startup and wanted to solve bigger problems around scale and security were willing to talk to them,” says Ron.

“Whereas before, they felt Plaid was a little too small for their ambitions.”

Today and tomorrow, we’ll have team coverage of Y Combinator’s Winter 2022 Demo Day, including a selection of staff favorites, so be sure to check the site each afternoon.

Thanks very much for reading TechCrunch+ this week!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

2 reasons why demo days are dead

Image Credits: Martin Harvey (opens in a new window) / Getty Images

Demo days are a showcase for tech media, but does this performative Silicon Valley tradition still benefit founders and investors?

In a guest post for TC+, 22 Ventures co-founder and chair Michael Redd shares two factors that make demo days less relevant: many startups sign funding deals before the big show, and founders are more interested in working with value-add investors.

“Simply getting rid of demo day won’t help founders find, or let investors offer, that value,” Reed writes. “What we need is to better understand why demo day falls short and how to source deals on a much more intimate level.”

Crypto mining is approaching a key inflection point

Image Credits: South_agency (opens in a new window) / Getty Images

The Ethereum community is bracing for a sea change.

A long-anticipated decision to move from a proof-of-work consensus protocol to one that favors proof of stake will force many to mine other cryptocurrencies, writes Warren Rogers, CFO at Blockware Solutions.

“Ethereum miners have a very high risk that their machines become obsolete overnight,” as PoS requires specialized hardware, which could leave Bitcoin as the major cryptocurrency of choice.

“While it is possible that this could be true in the short term, in the long run, this transition sets the precedent for being able to materially change the underlying protocol,” says Rogers.

Use RevOps to develop a customer-led approach to B2B sales

Image Credits: malamus-UK (opens in a new window) / Getty Images

Employees are hired to do one specific job, which is why even early-stage startups can become siloed.

Companies that find ways to integrate their sales flow and customer success operations have an advantage, writes Erol Toker, founder and CEO of Truly.co.

“Optimizing your unique path to better connect with customers requires having a cross-discipline team that’s focused solely on that objective and sees the client as their guiding star,” Toker says.

“We call that RevOps.”

Improving discovery for NFTs will amplify digital creators and marketplaces

Image Credits: Dougal Waters (opens in a new window) / Getty Images

It’s easy to build a recommendation algorithm for a business that sells jackets online, but when selling NFTs, optimizing for limitless inventory, anonymous customers, and opaque consumer behavior becomes magnitudes harder.

These may be just growing pains for NFT marketplaces, but the current state of play harms digital creators, as their art becomes another drop in the ocean, writes Alexandre Robicquet, co-founder and CEO of Crossing Minds.

The key to solving this problem, says Robicquet, is to build a system that promotes discovery of NFTs:

“If a recommendation algorithm can ensure that buyers can meaningfully discover NFTs they love, or think there’s investment potential in, or both, and if it can keep buyers coming back for more, then artists will reap the benefits for years down the line.”

IT can play a major role in driving sustainability

Image Credits: weerapatkiatdumrong (opens in a new window) / Getty Images

Data centers consume approximately one percent of the world’s electricity each year, but considering the fact a recent heat wave in Antarctica just cost us another ice shelf, every little bit counts.

In an in-depth post, Cloudbolt CEO Jeff Kukowski shares multiple strategies that reduce IT energy consumption by employing intelligent automation, increasing visibility, reducing shadow IT, and optimizing CI/CD pipelines.

“The sum of many small changes will lead to the transformative improvements that must be made,” he says.

Furniture is one of the largest waste categories in the U.S., generating more than 12 million tons of waste in landfills every year, according to 2018 data by the Environmental Protection Agency. Kaiyo, an online marketplace for secondhand furniture, says it has helped the impact by keeping nearly three million pounds out of landfills since its launch in 2015. 

Kaiyo founder and CEO Alpay Koralturk said in an interview with TechCrunch that he was familiar with the hassle of buying and selling furniture after moving five times in five years in NYC. He and his wife, who are passionate about sustainability, tried buying secondhand to furnish the apartment when they moved into a new place in 2014. Koralturk said it was such a frustrating experience that he thought there needed to be an easier way — something convenient for the customer but ultimately better for the planet.

“At Kaiyo, our mission is to make great design accessible to everyone. Furniture is one of the largest investments consumers make, yet historically, re-selling has posed a significant challenge, making it a major contributor to landfill waste,” said Koralturk.

Koralturk founded Kaiyo, formerly known as Furnishare, which started out as a rental service before pivoting to the current marketplace model. 

Kaiyo said Tuesday it has raised a $36 million Series B in equity and debt financing to reinforce growing consumer demand for secondhand furniture and accelerate growth and market expansion across the country, starting from California. The new funding, which brings its total raised to $50 million, was led by Edison Partners and included participation from returning backers Moderne Ventures, Lerer Hippeau and Max Ventures. 

The Series B round comes on the back of its rapid growth. Over the past two years, Kaiyo experienced more than 100% growth in terms of revenue year over year due to growing interest in the circular economy and pandemic-induced supply chain issues, according to Koralturk, who did not disclose the revenue number.  

Kaiyo’s customers can buy and sell pre-owned and environmental-friendly furniture from brands including Restoration Hardware, Design Within Reach, West Elm, Room & Board and more, with white-globe delivery in a matter of days.   

Kaiyo provides fast, free pickup for sellers and cleaning, photography, storage and delivery to buyers — all at no cost to its sellers. Its unique feature is that sellers receive an instant offer immediately after their appointment is accepted. They can cash out without waiting for their item to sell. Kaiyo is the first in the industry to provide this option, Koralturk said told TechCrunch. Another unique feature is high-resolution photography of the actual item for sale, unlike all other marketplaces that rely on stock photos or those provided by the seller, Koralturk said. Its buyers can zoom in and view minor scratches and defects and verify tags and marks. All items Kaiyo features are professionally cleaned and stored in its temperature-controlled warehouses before delivery, Koralturk noted. 

Additionally, the startup uses its proprietary algorithm to identify the items most likely to sell in its marketplace and set pricing, Koralturk said.  

Kaiyo’s secondhand furniture. Image Credits: Kaiyo

Kaiyo currently has hundreds of thousands of registered customers and more than 160 employees, according to Koralturk. 

Koralturk told TechCrunch he believes the existing secondhand market, which is highly inefficient and underpenetrated, is expected to grow considerably.

The furniture resale industry is projected to reach $16.6 billion in sales by 2025, from 9.9 billion in 2018. 

“Kaiyo is disrupting furniture re-commerce by solving for both seller and customer pain points and creating a frictionless experience,” said Daniel Herscovici, growth equity investor and partner at Edison Partners. “Their vision has transformed the circular economy for used furniture and created a next-generation home décor marketplace with sustainability and environmental impact at its core.”