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Inside Founders

Inside Founders (Apr 19th, 2019)

1. When his company went public on Thursday, Zoom founder and CEO Eric Yuan became a billionaire. Zoom ended its first day on Nasdaq with a nearly $16 billion valuation after shares jumped 72 percent. Yuan owns 20.5 percent of the company's stock and is now worth $3 billion. Originally from China, Yuan emigrated to the US in 1997 after his visa had been rejected eight times. Inspired by a speech made by Microsoft founder Bill Gates, Yuan subsequently founded his video conferencing company in 2011. He notably relied on Zoom, rather than in-person meetings, for much of his company's pre-IPO road show. — FORBES

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2. Following Pinterest's debut on the New York Stock Exchange Thursday, co-founder Ben Silbermann said he pitched investors by explaining how users engage with the platform. Pinterest, he says, isn't a social network: Users don't engage with Pinterest to talk with friends or follow celebrities. Rather, Silbermann said, they use it for inspiration, and he thinks of Pinterest as a utility: "We want people to use it to get things done in their lives." According to its IPO prospectus, Pinterest has more than 250 million monthly active users. Shares in the company jumped 28 percent on its first day of trading, cementing its valuation above the $12 billion it raised in 2017.  — CNBC

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3. Federal investigators are focusing on Facebook co-founder Mark Zuckerberg in their examination of the company's ongoing problems protecting personal data. Public documents indicate the Federal Trade Commission considered having Zuckerberg testify under oath during a 2011 settlement with the company over privacy issues. Now, sources with knowledge of the current investigation—which stems from the March 2018 revelation that Cambridge Analytica improperly obtained 87 million Facebook users' data—say the FTC may hold Zuckerberg personally accountable for the company's data lapses. Critics, such as the Electronic Privacy Information Center, have sought steeper oversight and penalties for Facebook, as well as other technology companies. — THE WASHINGTON POST

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4. Eighty-four percent of tech companies planning to go public lack profits and have combined potential losses of $47 billion. A deep dive analysis of Silicon Valley's "unicorn-breeding industry" posits that the current “blitzscaling” for tech companies has been made possible as a result of cloud computing, smartphones and social media. In 2013, the U.S. had 38 companies valued at $1 billion; currently, there are 156. Contested markets and increased regulation may create some barriers to unsustainable growth, as would investor restraint. — THE ECONOMIST

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Flashback Friday

Welcome to Flashback Friday, when we take a look at the recent and distant past in the world of Founders. If you have ideas or tips for this weekly feature, please send them in to founders@inside.com.

This week, Airbnb led a $160 million financing round for hospitality platform Lyric. At the beginning of the month, Airbnb confirmed investment—for an undisclosed amount estimated to be between $150 and $200 million—in India budget hotel startup OYO. Ten years ago this month, Airbnb's founders, after years of rejection, received their first investment: $600,000 from Sequoia Capital in April 2009.

That investment came after the founders scrapped their company's original name: Air Bed and Breakfast. That name originated with a plan in 2007 by San Francisco roommates Joe Gebbia and Brian Chesky to put three air mattresses in their loft, rent it out and provide breakfast to the customers. Convinced they were on to something, the duo brought in another former roommate, Nathan Blecharczyk, and began trying to gain traction. It took a while. In 2008, after a third launch, they met with 15 investors, were rejected by eight and ignored by seven. Another relaunch at the 2008 Democratic Convention also failed, but selling "Obama O's and Cap'n McCains" cereal boxes—which they created—garnered the trio $30,000 for their company. From there, they went to the Y Combinator accelerator (where they also experienced investor rejection). Still, after working on the pitch and changing the name to de-emphasize their air mattress origins, Gebbia, Chesky and Blecharczyk got their seed money in April, 2009.

By 2011, Airbnb had reached unicorn status. The company had a $31 billion valuation two years ago during its last funding round. Should it have a public offering this year or next—founders have recently hedged speculation on an IPO timing—some sources believe its valuation is now closer to $38 billion. All three founders remain with the company.

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5. Snap founder Evan Spiegel says the company's prospects will improve this year: Since its IPO two years ago, it has lost share price and executives, and has three years before it runs out of money. — THE LOS ANGELES TIMES

6. The twenty-something founders of the styrofoam-free packaging company TemperPack are trying to disrupt the static packaging industry. — INC.

7. A forthcoming book on startups co-written by two Indiana University professors and a serial entrepreneur, The Titanic Affect, focuses on helping founders avoid failure by steering around common mistakes and "debt-bergs." — INDIANA UNIVERSITY NEWS

8. Chat app HipChat founders Pete Curley and Garret Heaton launched a new app this week, Swoot, which allows users to recommend podcasts to their friends. — TECHCRUNCH

9. Tennis pro Serena Williams this week revealed previously undisclosed details about her venture fund, Serena Ventures, via an Instgram post. — FORBES

10. Follow Friday: @Maxeme. Caribu co-founder and CEO Maxeme Tuchman saw first-hand the struggles children have if they don't learn to read early when she was a public school teacher. Caribou, which describes itself as "FaceTime meets Kindle" for children, is a video app that integrates children's books so parents can read and draw with their children when they are apart. The app is designed for parents working late, separated from their children, in the military or even on tour—Nick Lachey uses it. Tuchman fought hard for financing for her startup, touring the country in 2017 to enter pitch competitions. Last year, she was named the 2018 Toyota Mother of Invention by Women In The World. Her Twitter is a great spot for keeping current with #femalefounders and tech startups.

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Julia Goldberg is a journalist and author living in Santa Fe, New Mexico. She writes regularly about the intersection of technology and culture, and is the executive director of MIX Santa Fe, a networking organization for entrepreneurs. She writes the Inside Founders newsletter and can be found on Twitter @votergirl.

Editing team: Kim Lyons (Pittsburgh-based journalist and managing editor at Inside); Susmita Baral (senior editor at Inside, who runs the biggest mac and cheese account on Instagram); and David Stegon (senior editor at Inside, whose reporting experience includes cryptocurrency and technology).

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