Howdy. It’s tech reporter Alexandra Sternlicht here to finish off your week.
As the very sour cherry on top of a bank run-flavored sundae, Silicon Valley Bank’s parent company has filed for Chapter 11 bankruptcy protection. For founders, it’s been a most challenging time—from accessing funds in order to make payroll by a hair to fielding panicked investor calls, texts, emails, Slacks, and Tweets.
From my tech reporter vantage, these founder narratives serve as parables for the manifestation of the industry crisis and the hyper-connected society we live in. In the case of Vanessa Pham, cofounder of Asian home cooking startup Omsom, the wild week not only put her on an emotional roller coaster as she tried to save her company, but it also unexpectedly turned her into a financial crisis viral star.
Pham was walking the stalls of Expo West in Los Angeles when she became unable to ignore her buzzing phone last Thursday. Founder group chats that she was part of were all coming to life simultaneously, activated by rumors of SVB’s collapse. For Pham, it was drop-everything bad: The venture-backed startup had all of its capital in SVB.
While managing the threat of a frozen bank account, Pham took to Instagram to post her experience, sharing screenshots of texts, and a Slack from her cofounder-sister saying, “I don’t think the wire is going to go through.”
Pham’s bank collapse journey, branded in Omsom’s signature 60s-style color and design palette that pops on Instagram, has made Pham into a financial crisis celebrity. “In the moment, it didn’t feel like a branding or marketing activity,” says Pham. “It felt like us talking to our communities from a place of real fear and vulnerability.”
Intention aside, it went viral. The Instagram letter calling for supporters received more attention than almost anything else the cofounder or the brand has ever shared; 500,000 impressions and 20,000 likes with 5,000 reshares. As a result, she’s been interviewed by 15 journalists, including live interviews on CNN, NBC News, and CBS. “The reason I believe that we have gotten a lot of attention is because in real-time, we were sharing very open and vulnerable updates with our community.”
As someone once remarked during another recent banking implosion, “You never want a serious crisis to go to waste.”
Alexandra Sternlicht
Data Sheet’s daily news section was written and curated by Andrea Guzman.
NEWSWORTHY
An electric car for the masses. Volkswagen is planning to release a new electric car by the end of 2025 that should cost less than $26,500 and drive 280 miles on a single charge. VW is hoping to boost affordability and interest by designing the ID2 hatchback with a front-wheel drive, a 226-horsepower electric motor, and a 490-liter trunk. Volkswagen is branding it as “the car for everyone and every day,” saying the company will have an economic incentive to sell it in large volumes. The move comes after nearly three years of Elon Musk teasing plans for a $25,000 car.
Twitter Blue breaks EU rules. Twitter’s subscription service is breaking European Union rules about unfair business practices, Insider reports. A consumer watchdog said that the advertised subscription price of 8 euros doesn’t include value-added tax even though companies are required to advertise the total price including that tax. So, Twitter users in Europe wouldn't know the subscription could actually cost additional money until the tax is added at checkout.
SVB Financial Group files for bankruptcy. The parent of Silicon Valley Bank is filing for Chapter 11 bankruptcy protection. This comes after it was hit with a class action lawsuit this week claiming that the company didn’t disclose the risks that future interest rate increases would have on its business. SVB Financial Group is no longer affiliated with Silicon Valley Bank, which is now owned by the FDIC, so the bank’s commercial banking business is not included in the Chapter 11 filing.
ON OUR FEED
“These robotexts are making a mess of our phones. They are reducing trust in a powerful way to communicate.”
—FCC chairwoman Jessica Rosenworcel, announcing a requirement for cell carriers to block scam texts from invalid, unallocated, or unused numbers.
IN CASE YOU MISSED IT
I came to Austin for tech’s biggest party and witnessed a surreal scene as Silicon Valley Bank crumbled, by Kylie Robison
Amazon is shutting down Kindle Newsstand, getting out of the news and information business, by Chris Morris
Elon Musk fumes over OpenAI becoming ‘$30B market cap for-profit’ after his $100M donation, by Steve Mollman
Peter Thiel is swearing he kept $50 million of his personal fortune at SVB while his Founders Fund bailed on the bank, by Tristan Bove
Microsoft opens its Bing chatbot to basically everyone, by Chris Morris
BEFORE YOU GO
That time Steve Jobs doubted the cloud. As confusion and worry spreads over ChatGPT, it's worth keeping in mind that many now-common technologies once faced plenty of skepticism—even among the tech cognoscenti. Fortune's Orianna Rosa Royle talked with Evan Goldberg, the founder of Oracle NetSuite, the world’s first cloud software company, about a memorable interaction with a skeptical Steve Jobs many years ago. He recounts a party at Oracle's cofounder Larry Ellison's house, where Jobs told him, "Larry’s really excited about this accounting-in-a-browser thing. But does anyone want to do accounting in a browser?"
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