They’re also concerned about how global warming could impact the industry, from the supply chain to innovation.
Two-thirds of poll respondents were concerned that the tech industry is a major contributor to climate change.
Two-thirds of U.S. adults are concerned about the tech industry’s impact on the climate, and 73% believe that tech companies have an obligation to address the crisis, according to an exclusive survey conducted by The Harris Poll on behalf of Protocol.
The results, first shared here, also show the industry’s own workers are even more concerned and ready for tech companies to take action. That reflects a growing movement of tech workers putting pressure on their employers to lay out more ambitious climate plans and stick to them.
Climate change poses a number of challenges to the tech industry. Just last summer, we saw flooding decimate Zhengzhou, an iPhone manufacturing hub, while Amazon warehouse workers suffered through triple-digit heat in the Pacific Northwest. These incontrovertible impacts of the climate crisis are why more Americans than ever are alarmed about climate change, and, as the new results reveal, they’re also a concern when it comes to how people think about the tech industry.
The poll — which was conducted in March and includes roughly 1,000 respondents — shows what people are most worried about when it comes to the impacts the climate crisis could have on the tech industry. Among their concerns are that the tech supply chain, sourcing, manufacturing materials and growth and innovation could be affected. The majority surveyed — around 61% — are also worried that the tech industry’s reputation could be at stake, with 66% concerned that the industry is a major contributor to climate change.
More than half of respondents say tech companies can do something about climate change. Some 59% think tech companies should pursue purchasing renewable energy, 55% believe companies should pursue reducing operation emissions and half see improving supply chain sustainability and investing in new technologies as potential solutions. A number of companies are already taking some of these actions, particularly around buying renewable energy.
But decarbonizing the supply chain has proven to be more challenging as tech companies try to get a handle on Scope 3 emissions. Those carbon emissions are associated both with manufacturing goods and customers’ use of products. Microsoft, for example, saw its Scope 3 emissions rise last year. The same is true for other companies; Amazon saw its emissions increase 19% from 2019 to 2020, the last year with data available.
The public also wants to see venture capital firms get involved by investing in carbon dioxide removal technologies, even if they have yet to be proven. Nearly two-thirds of respondents said it was worth investing in. Most scenarios for stabilizing the climate will require some level of carbon dioxide removal.
Though people think tech companies could be doing more, 63% of respondents trust them to meet their stated climate change goals. An even greater 69% say that tech companies’ commitments to addressing climate change influence their opinions of companies.
Tech workers are even more eager for the industry to do something about climate change. A stunning 94% of tech workers surveyed say that tech companies are highly obligated to address climate change, and 96% say tech companies should make commitments and investments to address it. Some 88% of tech workers say that a tech company’s commitment to climate change influences their opinion of it.
Activism at tech companies has exploded in recent years. High-profile unionization efforts have swept across Amazon, Apple, Google and elsewhere to improve working conditions. Employees at Amazon also organized to press the company to set climate targets, including pushing shareholder resolutions for the company to clean up its act. The company eventually fired two of the leading organizers, and it was forced to cough up back pay following a National Labor Relations Board ruling last year. The new polling shows companies can likely expect more pressure in the coming years.
A total of 60% of tech workers think the company they work at is doing more to address climate issues than others, twice that of all employed adults surveyed. But many also believe that companies can only do so much.
Close to two-thirds of tech worker respondents reported that the pandemic has impacted their employer’s efforts to address climate change. Other limiting factors reported include profit, shareholder considerations and the priorities of a company’s leadership. Despite these limitations, 82% reported wanting to see their company take more steps to address climate change.
How tech is tackling climate change — and reckoning with its own impact on the planet.
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Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.
The gas station of the future might not be a station at all.
Charging companies are considering how to ensure a network that works for everyone, everywhere.
Kwasi (kway-see) is a fellow at Protocol with an interest in tech policy and climate. Previously, he covered global religion news at the Associated Press in New York. Before that, he was a freelance journalist based out of Accra, Ghana, covering social justice, health, and environment stories. His reporting has been published in The New York Times, Quartz, CNN, The Guardian, and Public Radio International. He can be reached at kasiedu@protocol.com.
Jonathan Levy spends a lot of time thinking about the future of the gas station. Or, rather, how the future of car charging may not have much to do with gas stations at all.
Levy is the chief commercial officer at EVgo, one of the biggest electric vehicle charging companies in the U.S. The company and others like it are reimagining how we get around, building out a distributed network of charging infrastructure that isn’t always tied to the gas station model that has ruled America’s roads since the early 1900s. “We believe that by integrating charging into everyday life, you make it even easier to go electric,” Levy told Protocol.
EVgo has struck deals with Whole Foods, Albertsons and Kroger to ensure charging stations exist in the places “that you are going to go to anyway,” Levy said. Competitors like Flo have teamed up with utilities like ConEd to install chargers on city streets. The growing charging model relies on accessibility rather than speed — EV charging still takes longer than pumping gas — to make things more convenient for drivers.
At the same time, charging companies are also considering how to borrow some of the centralized gas station model’s tricks to ensure a network that works for everyone, everywhere. This rapid technological upheaval is also forcing a reckoning among traditional gas station owners themselves, who will be forced to adapt or disappear.
Gas stations face huge threats from rising gas prices and increasing electric car sales. According to a recent forecast from Boston Consulting Group, up to 68% of new vehicles sold in the U.S. could be battery-electric by 2035. That forecast was made before the Inflation Reduction Act of 2022 was introduced, which would extend EV tax credits for new vehicles and introduce ones for used vehicles if passed.
Other policies could further put pressure on gas stations. In Los Angeles, a city as famous for its traffic as it is for its movie stars, politicians have proposed a ban on building new gas stations. That would make it the second city in the country to institute a ban, following a March 2021 ban in Petaluma, a small city 40 miles north of San Francisco.
Policies aimed at expanding EV charging are also tipping the scales. The Biden administration is set to dole out $7.5 billion in funding to states to build out charging infrastructure as part of the bipartisan infrastructure law. The administration has also set a goal for EVs to make up 50% of new vehicle sales by 2030. The funding and rising EV sales could allow for a radical reimagining of transportation. And charging technology may be the most malleable part of that process.
An EV station in the Bronx.Photo: Kwasi Gyamfi Asiedu/Protocol
“Unlike the gas station, which has been fixed for essentially 100 years, the charging station emerges even from its earliest days as this kind of flexible, changeable building type,” said Christopher Hawthorne, Los Angeles’ chief design officer and a professor at USC, where he organizes discussions about what the future of America’s second-most populous city should look like.
In 2020, he organized a public conversation where some of the city’s architects presented new design concepts for the electrified future of the gas station. The proposals included turning gas stations into community meeting spaces, bike pavilions and even urban parks where you can also charge your car.
The conversation is especially important in Los Angeles, which has nearly 600 gas stations that will be impacted by the 2035 deadline set by Gov. Gavin Newsom requiring all new cars and passenger trucks sold in California to be zero-emission vehicles. Allowing more gas stations to sprout up focused primarily on serving internal combustion engine vehicles could set businesses up to fail.
While distributed charging networks in parking lots and on city streets are continuing to grow, some companies are taking their cues from gas stations — and even partnering with them. As it searches for new venues for its charging stations, EVgo announced a partnership with General Motors this month to build a network of 2,000 fast chargers at 500 Pilot and Flying J travel centers across the country. That would make interstate travel in an EV a lot easier than it currently is. Earlier this year, Electrify America revealed plans for its own charging stations that look an awful lot like their gas-selling counterparts. These stations would be located near places like shopping malls — in case drivers want to run errands — and include lounges in case they just want to relax.
The ongoing shift in policy, competition and consumer attitude is forcing groups such as the National Association of Convenience Stores, the members of which sell 80% of America’s gas, to adjust. According to Jeff Leonard, a spokesperson for NACS, that means continuing to expand into, say, food service and other offerings that will keep drivers occupied.
“There aren’t many businesses that can survive selling fuel alone,” Leonard said.
But Leonard is hardly in a panic about the rise of EVs. The death knell of the gas station is a long way off. In 2021, Americans used 369 million gallons of gasoline per day. While new car sales are expected to tilt heavily in favor of EVs over the next decade, plenty of legacy gas-powered cars will remain on the road. Research suggests it could take until 2050 for about 60% to 70% of all cars on the roads to be electric — and that is if the Biden administration’s plans are successful. (Again, that analysis precedes the Inflation Reduction Act.)
“It’s going to take a while to replace 280 million petroleum-driven vehicles,” Leonard said. “We will get there with the EV future, but it’s not going to take years, it’s going to take decades.”
There are also important lessons for the EV charging industry to learn from the humble gas station. Although gas stations have had negative environmental impacts on their neighborhoods, in some places — especially communities of color where other retailers are scarce — gas stations are an important part of the societal fabric. There’s ongoing concern that the current high cost of EVs could lead to charging infrastructure being built in wealthier areas.
“Certain gas stations have played an important community role, and we would be unwise to dismiss that role and get rid of gas stations too quickly,” Hawthorne told Protocol. The Biden administration, for its part, has committed to ensuring that 40% of federal climate and energy investments benefit disadvantaged communities.
That’s top of mind for Levy as he ensures that EVgo’s charging stations are deployed in a way that is convenient for drivers, but also equitable. “A lot of communities of color have been in food deserts or [been] redlined,” Levy said, referring to a racist lending practice. “If you just follow those places, then you will accidentally repeat those mistakes as well.”
Kwasi (kway-see) is a fellow at Protocol with an interest in tech policy and climate. Previously, he covered global religion news at the Associated Press in New York. Before that, he was a freelance journalist based out of Accra, Ghana, covering social justice, health, and environment stories. His reporting has been published in The New York Times, Quartz, CNN, The Guardian, and Public Radio International. He can be reached at kasiedu@protocol.com.
Protocol talks to Soul Machines’ CEO about the power of AI in the metaverse
GREG CROSS (CEO, Soul Machines)
GREG CROSS (CEO, Soul Machines) is one of the original tech nomads, spending his career traveling to and living in every major tech market in the world. He now lives in New Zealand but creates businesses that compete on the international stage. Most recently, PowerbyProxi, a wireless charging company he co-founded, was sold to Apple in 2017. In 2016, Greg co-founded Soul Machines to build a Human OS™ for Artificial Intelligence and explore the future of human-machine cooperation.
Soul Machines is at the cutting edge of AGI research with its unique Digital Brain, based on the latest neuroscience and developmental psychology research. Partnering with innovative people and brands like Carmelo Anthony, Procter & Gamble, NESTLÉ® TOLL HOUSE®, Maryville University, and The World Health Organization, Soul Machines is re-imagining what is possible in the delivery and underlying economics of empathetic customer experience. Greg holds multiple chair positions, is the Sir John Logan Campbell Executive in Residence at the University of Auckland Business School, and was inducted into the New Zealand Hi-Tech Hall of Fame in 2019.
Nicklaus meets and chats online with his Digital Twin in May 2022.
Soul Machines co-founder and CEO Greg Cross and his co-founder Mark Sagar, Ph.D., FRSNZ are leading their Auckland and San Francisco-based teams to create AI-enabled Digital People™ to populate the internet, at first, and soon the metaverse. As this field has grown over the past six years, enterprise brands and celebrities have increasingly turned to Soul Machines to digitize their workforces and level up in how they engage with customers and fans.
They humanize AI to create Digital People that take input from the environment — a question, a facial expression like a smile — and respond in real time. Digital People, such as the one used by Nestle to serve as a digital cookie coach on its website, allow brands to offer an empathic and ultra-personalized customer experience.
Using similar autonomous automation technology, Digital Twins take the customer and fan experience to another level. The celebrity-based avatars boast lifelike features because a real person is captured, creating a “Digital Twin” of the star’s likeness. It can answer customers’ questions with responses that are aligned with the celebrity’s expertise, background and legacy.
The entertainment and sports industries could benefit from developing interactive digital avatars, but the cross-pollination of virtual animation and AI must veer far from 2Pac-hologram territory. Soul Machines’ approach is layered with next-gen AI applications, such as its Digital Brain technology, which allows for natural-language processing and empathetic, responsive behavior. In layman’s terms, that means we could talk to these Digital Twins in real time, but in the entertainment world, that relationship could get even more compelling.
Protocol spoke to Cross to learn more about their newest release, a Digital Twin of Jack Nicklaus, the retired golfing champ who’s won a stunning 117 tournaments. Depicting Nicklaus at 38 years old, his Digital Twin represents the potential of this technology, allowing fans to ask questions and hear stories from his 60-plus years on the links.
Digital Twins will soon partner with retail brands (among others) to offer expertise and recommendations on products and services, as well. Cross takes us on a tour into a technology that may be nascent now but could soon become the competitive edge that sets successful brands apart from the rest.
Extensive capture technology maps Nicklaus’ facial expressions.
What motivated you to launch Soul Machines with Mark Sagar, and what makes your Digital People appealing to brands?
I’m a serial tech entrepreneur, and I just came out of a previous business that sold to Apple. I started looking around for my next move and, through a mutual friend, was reintroduced to Mark. I had met him before, and he blew me away with who he is as a person and his commitment to his life’s work. He’s won two Academy Awards for the animation technology he built that was used in films such as “Avatar” and “King Kong.”
We had a beer, and he talked about coming up with a new paradigm for animating digital characters, and Soul Machines began soon after, in July 2016.
As for our Digital People, we see them as the future of customer and fan engagement. We’re living in an increasingly digital world, and the major challenge for brands is creating those personal connections with fans in a more digital world. And that’s where Digital People become important.
We, as humans, are hardwired to emotionally engage face-to-face. Soul Machines technology can autonomously automate back-and-forth conversations that are each unique. We see Digital People being such an incredible way to create scalable customer interactions in digital worlds.
What competitive advantage would these avatars offer to enterprise brands?
If I create a digital workforce, all of a sudden, I’ve created a highly scalable workforce that is always on. Those customer-centric Digital People can have 1,000 or 100,000 conversations, and these are uniquely personal interactions that are hard to achieve and staff in the real world today. Conversational AI becomes that repository for the brand experience.
Also, brands get a smoother consistency of experiences with Digital People who can retain all that data from those interactions. Especially as we move into metaverse worlds of tomorrow, adopting this technology will truly offer competitive advantages to brands.
The Digital Jack Nicklaus avatar is fascinating to us. How did you create it? How did he react to the idea?
We’ve always wanted to be in the digital celebrity experience space. We first worked with rapper will.i.am in 2019 by creating his Digital Twin for an AI documentary series.
We wanted to test this concept further by having amazing CGI lead to hyper-realistic people who are autonomously animated to create the ultimate fan experience.
We are in talks with a range of different celebrities. We enjoyed the enthusiasm Jack Nicklaus and the Nicklaus Companies have for moving the brand into the future.
With Soul Machines, he wanted to extend his brand to the next generation of golfers. He wanted to be 38 again, when he was at the prime of his career, so we scanned him and his son Gary, who looks so much like him. The kind of storytelling engagement that will come from Digital Jack will build off all the tournaments he’s won and the many golf courses he’s designed.
Share your vision for how you think the metaverse will mature in the coming years, and how Soul Machines will play a role in that maturation.
We are only at the beginning of the metaverse. The hardware that brings it to life hasn’t matured yet, and isn’t defined as a tech stack now. The most important thing for us is to encourage brands to think about how investing in something today creates seamless experiences tomorrow.
AI gets stronger and better with each interaction, and that’s why Digital People provide the most personable and scalable customer experiences that will live on the metaverse and elsewhere. We envision a digital workforce that can move seamlessly between 2D and immersive worlds, and that’s really exciting to us.
The Inflation Reduction Act could make it easier for Big Tech to meet its climate goals. But the major players aren’t backing the bill yet.
How serious is Big Tech is about meeting the climate moment?
Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).
Sens. Joe Manchin and Chuck Schumer shook the political world when they announced they’d reached agreement this week on $369 billion in climate spending, just two weeks after Manchin seemed to abandon the endeavor. The cash is part of the Inflation Reduction Act of 2022, and it would be the biggest climate investment in U.S. history.
The bill — if passed, of course — would pour money into clean energy manufacturing and deployment, from wind turbines to heat pumps. That would dovetail well with the tech sector’s decarbonization plans and investments. Yet Big Tech is still largely on the sidelines when it comes to supporting the bill.
Protocol asked major tech companies for their reactions and specifically whether they plan to lobby in favor of the bill. All of those contacted — Amazon and AWS, Apple, Google, Meta, Microsoft and Salesforce — have made net zero commitments, and in some cases are even more ambitious with their decarbonization plans (see: Microsoft’s carbon negativity goal).
Yet only Salesforce responded saying it explicitly supports the legislation.
“We urgently need to move our country forward to a more sustainable future, one that will create jobs, reduce pollution, drive greater economic security and increase equity and access to clean energy for lower-income communities,” the company’s executive vice president of government affairs Eric Loeb told Protocol. “The $369 billion climate and clean energy investments in the Inflation Reduction Act of 2022 helps to do that and we’re keeping close attention knowing that provisions may still be amended.”
Salesforce was also one of the very few major tech companies to support the climate investments in the Build Back Better Act. (Microsoft eventually offered its support for Build Back Better, though roughly a month after Manchin killed it the first time.) Earlier this month, Chief Impact Officer Suzanne DiBianca publicly called on Congress to act on climate legislation in the aftermath of the Supreme Court’s decision restricting the Environmental Protection Agency’s ability to regulate greenhouse gas emissions.
An AWS representative referred Protocol to the trade group the American Council on Renewable Energy rather than comment directly. ACORE, for its part, released an enthusiastic press release on Wednesday about the bill. The group’s president and CEO Gregory Wetstone called the news a “huge relief” and said that its provisions “will spur critical investments in renewable power, energy storage, and advanced grid technologies that will allow us to meet our climate goals.”
Representatives for Google and Microsoft said neither company had a comment at this time. Neither Apple nor Meta responded to Protocol’s questions on the proposed legislation, and Amazon did not send a comment at the time of publication.
The relative silence of leading tech companies raises questions about their commitments to the ambitious decarbonization plans they’ve put forward. Many of those plans include commitments to reduce Scope 3 emissions tied to the use of their products, which are by far the biggest chunk of tech companies’ emissions.
“If a company is sincere about achieving zero emissions, they should be lobbying for climate policy to be in place to help society,” Jamie Beck Alexander, the director of Drawdown Labs, told Protocol a few months ago.
The Inflation Reduction Act could do just that. Independent analysis by research firm Rhodium Group said it would cut U.S. carbon emissions 31% to 44% below 2005 levels in 2030, in part due to how the legislation could help decarbonize the grid.
Some tech companies worked behind the scenes to get Business Roundtable, a trade group for major corporations, to drop its opposition to the Build Back Better Act. Yet the legislation still died. With a razor-thin margin in the Senate, Democrats will need all hands on deck to pass the Inflation Reduction Act. Having the tech industry throw its entire weight behind it could help steer the bill toward passage — and show just how serious Big Tech is about meeting the climate moment.
This piece will be updated with further tech company reactions if and when they are made public.
Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).
Don’t know what to do this weekend? We’ve got you covered.
Our favorite picks for your weekend enjoyment.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
This week we’re testing our Netflix knowledge, rewatching “Ex Machina” and hunting for some good grub.
Are you done watching “The Bear” on Hulu? Then this is the perfect follow-up series. Netflix’s “Street Food” documentary series has been shining a light on some of the best food carts and trucks around the world. Now the show is coming to the U.S., and the season is starting off with what some would consider the street food capital of the world: Los Angeles. What makes the show great is that it doesn’t just find vendors that are representative of the incredibly rich and diverse food culture of L.A., but it also shines a light on the people manning the counter, working the grill and putting their life into their dishes. I dare you to watch the first episode and not wonder where the next taco truck is …
The story of human-made creations turning on their masters has been told for centuries, but rarely in such a mind-bending way. “Ex Machina” makes you question the fine line between heroism and villainy, all while exploring the role of AI in our future. The movie was first released in 2014, but now’s a good time to rewatch it, as Plex is streaming it for free through the end of the month as part of a limited showing of A24 movies.
Here’s your chance to prove your couch potato creds: NFLXdle is a minigame that shows the cover art of Netflix originals with varying degrees of pixelation. It’s not a new idea, but the challenging part is that Netflix itself has so many different versions of its cover art. NFLXdle was made by AugX Labs, whose CEO just told us about the role these kinds of minigames play in the company’s product development process.
The story of Axie Infinity is a cautionary tale for anyone interested in the future of gaming and entertainment. The effects of the crypto downturn on average Axie Infinity players has nowhere been more dramatic than in the Philippines, whose players at one point made up 40% of the game’s user base. Time magazine visited some of them to learn how the crypto roller coaster affected their lives.
A version of this story also appeared in today’s Entertainment newsletter; subscribe here.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety’s first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
Being cash flow-positive means never having to say you’re sorry.
“Every day you’re seeing news about layoffs, and so we want to be compassionate about that happening in the ecosystem, but also be grateful that Notion is a company that continues to do well,” said Notion COO Akshay Kothari.
Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.
Venture capitalists have all been giving the same downturn-survival advice to startups: Cut costs, do layoffs, develop more discipline and get to cash flow-positive.
For collaboration-tool software company Notion, that’s moved the playing field back to familiar turf.
“We find ourselves in an interesting spot because we’ve always been cash flow-positive, and we don’t need to do those things,” said Notion COO Akshay Kothari. “So we’ve been thinking the last six months a lot about ‘Well, if everybody is zigging, how do we zag?’”
Instead of pulling back on investing like many of its peers, the productivity startup has gone on the offense. It acquired calendar app Cron in June and brought on the Flowdash team earlier this month. Notion also leaned into more marketing by launching a global ad campaign — the kind of spending VCs are cautioning against.
The larger macro slowdown hasn’t affected investor interest either, Kothari said. The company had raised $275 million last fall at a $10.3 billion post-money valuation. Instead of raising more cash or an extension round like many startups this summer, Notion recently completed an internal tender in which where Sequoia and Index bought former and current employee shares at the same price as its last funding round. That didn’t mean any more cash for the company, but it was a valuable morale booster at a time when companies like Stripe and Instacart have been slashing the valuation of employee shares.
“That was a great signal for both the employees and our future recruits that our valuation is still very strong, and top-tier investors like Sequoia and Index are interested in buying more,” Kothari said.
Being aggressive in a larger downturn is a position not every startup finds itself in right now. Companies have been instituting hiring freezes and slashing head count, from TikTok to Unity to Substack. Klarna saw its valuation fall from $45.6 billion last June to $6.7 billion this July in its latest funding round.
Notion isn’t immune to the headwinds either. A lot of its customers are startups, so any downturn that causes them to cut costs could mean tools like Notion might be on the chopping block. Kothari says the company is watching its small-business churn closely right now because of it, but it’s also seeing its mid-level enterprise numbers rise. After reading about Marc Benioff’s regrets for not investing more in 2009 when Salesforce found itself performing better than expected during that financial crisis, Kothari said he realized Notion’s move in this environment was to watch its own numbers closely, but to play offense while it can to gain ground.
For Notion, that means launching a global ad campaign at a time when companies are cutting back on marketing spend and targeting a consumer market to get people to use its products not just for work but also to manage their daily lives.
Notion launched a global ad campaign at a time startups are being told to cut marketing spend.Photo: Notion
It’s also become much more active in M&A with its recent acquisition of Cron and the addition of the Flowdash team in the last two months. It’s not the only company finding such opportunities. Companies like cryptocurrency exchange FTX have seen this time as a prime buying moment, and FTX’s founder Sam Bankman-Fried has invested in many companies in the distressed crypto space. (He’s also taken a similar playbook to Notion and covered downtown San Francisco with ads featuring his headshot.)
Notion hasn’t been on the same scale of M&A spree, but Kothari has noted a definite shift in entrepreneurs’ attitudes toward deals. As funding has dried up and there are fewer paths to an exit, he’s found more founders are willing to become part of bigger companies — and Notion’s open to more conversations.
“I would say we’re very much in the market to continue to talk to companies both on the product side as well as on the acquihire side and see how we can accelerate our road map internally,” Kothari said.
The tender offer is another move, but not one every company can make. Allowing employees to sell shares before an IPO used to be more taboo in the startup world, but attitudes have shifted over time. When sales are executives-only, like in the case of DataRobot, it can be seen as a red flag. Some companies planned to do one, but have also backtracked citing larger market conditions. Ecommerce startup Fabric announced to its employees in May that it was going to do a tender offer, but canceled it 10 days later, Insider reported.
Notion found that its June tender offer, in which current and former employees sold shares to Sequoia and Index, helped employees by showing that the value of their shares wasn’t just on paper.
“It gives employees the ability to not worry about the student debt that they had when they joined the company or maybe the mortgage they have,” Kothari said. “It’s not something that people feel like they can just go retire, but I think it gives them a peace of mind.”
Well, at least for now, Kothari said. He and Notion CEO Ivan Zhao have talked a lot about how they’re grateful to be in a cash flow-positive position to start and not reworking their business to get there like many. Now the challenge is to remain in growth mode and stay there, despite the market. Kothari knows not to take it for granted.
“Every day you’re seeing news about layoffs, and so we want to be compassionate about that happening in the ecosystem, but also be grateful that Notion is a company that continues to do well,” Kothari said. “It may not be forever — it needs us to all be intensely focused on the market and continue to do well, because that’s the only way these things can continue to happen in the future.”
Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.
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