News Roundtable! Mattermark’s Danielle Morrill & NYT’s Katie Benner dig into the markets, funding & IPO fall-outs, Apple AI & VR, on-demand faves & projections for 2016

The current venture climate is the focus of episode 616 of “This Week in Startups.” Mattermark CEO and co-founder Danielle Morrill and New York Times reporter Katie Benner join Jason to discuss the recent decline of venture investing, the possibility of another crash, Uber fare cuts, Amazon Echo, and more. Before you settle into the news roundtable, though, read these key points.

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1. A crash may be coming, but don’t panic yet

Jason asks both Katie and Danielle if they foresee another crash coming in 2016. Danielle’s prognosis is grim — she thinks the odds are “greater than 50%” — but Katie (who recently wrote about the venture investing dive) is a little skeptical that it’s another 1999 bust. “Here, I don’t think we’re as close to the epicenter of whatever the problem is,” she says. “Whether it’s China, whether it’s another debt problem, or whether it’s a lack of liquidity in the stock market.”

2. Private companies are part of the problem

After chatting about the worrisome venture climate, Katie asks Jason why he thinks these questions haven’t been raised earlier. Jason believes a major issue is the growing trend of companies staying private longer, which leaves no way to get early investors and employees their liquidity. On the upside, he also thinks startup investors and founders are more sophisticated today, so they’re finally addressing problems that previous generations ignored.

3. Uber might be a bigger problem for car dealerships than Lyft

Jason, Katie, and Danielle debate how Uber’s recent fare cuts are affecting the company’s drivers and the competition (like Danielle’s favorite, Lyft). But Jason thinks the real loser is car companies. “For me, I literally made the decision that I’m going to sell one car and I’m going full Uber,” he says. “There’s only a certain number of people who do taxis, so really, when people look at it and say, ‘They’re trying to kill Lyft,’ or, ‘They’re trying to kill the taxi business,’ I think that was the story two years ago. I think the story now is will people get rid of their cars?”

4. With great technology comes great invasions of privacy

As Jason tells Katie and Danielle how much he enjoys his Amazon Echo, the NSA jokes start flying — before the conversation shifts to a more serious discussion of information sharing and privacy. Katie notes that, as technology develops at a rapid rate, the line for personal privacy gets murkier and murkier. That’s why she keeps a Post-It note on her Macbook’s camera. (Really! Jason points it out.)

5. Mattermark wants to save people from shaky companies, not dance on graves

Jason worries that Mattermark’s data could be seen as schaudefreude, or rubbing zombie companies’ failures in their faces. But Danielle insists they only rely on concrete facts, like traffic and employee count, and that the true aim is to save people from bad decisions. “I’m definitely not excited to see companies struggle,” she says. “But I feel bad for my friends when they join companies that end up really messing up their careers.”

Timestamps

2:23–4:02: Jason asks Katie to explain her recent article on the dramatic dip in venture investing.

4:03–5:16: Danielle explains Mattermark’s two key factors in determining a company’s stability: timing between funding rounds and employee counts.

5:17–7:41: Will the venture investing decline force startups to run more efficiently? Katie thinks so.

11:12–14:15: Katie says concerns about debt and private equity have been around the Valley forever. So why are we just asking questions now? Jason and Danielle give their theories.

18:27–20:26: Jason wonders if we’re on the verge of another crash or merely a correction. Katie compares the current situation to the 2008 economic crisis.

20:28–22:06: Could Apple’s ties to China prove problematic? Katie thinks they’re minimal, but there could be a ripple effect if the Chinese economy tanks.

25:28–28:31: Danielle thinks there’s a better than 50% chance of another mass crash, but Katie thinks 2016 feels different than the last dotcom bust.

31:00–32:58: Jason asks what IPOs will look like this year. Danielle wonders if there even should be IPOs.

38:03–39:25: The groups vents about its love-hate relationship with Postmates.

40:29–44:38: Jason, Katie, and Danielle discuss what the Uber fare cuts mean for the company, its drivers, and car ownership.

47:21–48:54: Katie wonders about the stability of Uber and Lyft’s workforce. Danielle thinks places like Starbucks and Target probably suffer from this more.

54:15–57:05: Jason tries to sell Katie and Danielle on Amazon Echo over Siri.

57:06–59:36: Jason, Katie, and Danielle discuss the information and surveillance implications of AI products like Echo

60:00–62:52: Jason grills Danielle on how she’s using her data on so-called zombie companies. At what point does it become schadenfreude?

66:05–68:54: Jason, Katie, and Danielle talk about how the press gets lynched for reporting facts on startups, like the issues with Theranos.

— Kristin Hunt, TWiST archivist
Kristin Hunt is a freelance writer based in New York