Launch House, a tech startup incubator, sold entrepreneurs on the promise of community

Sixteen women dining around an outdoor table, as seen from above.
Spread the love

The people here are young and friendly and full of hope. And why shouldn’t they be? For one month, they get to live in a mansion in Beverly Hills (Zillow estimate: $12.9 million). It’s not just any mansion, but the one where Paris Hilton used to live, with a precious little pergola overlooking a million-dollar view of Los Angeles, next to a pool surrounded by tastefully sculpted rocks, with bathroom faucets shaped like swans about to take flight.

This mansion is the home of Launch House, which is both an incubator for startup founders and a social club of more than 500 20- and 30-somethings, many of whom are into crypto. There are two ways to join Launch House: One is to pay the $1,000 annual membership fee, which grants you perks like entrance to the group Discord channel, access to work at the mansion or the New York City location, and invitations to events — an NFT brunch, say, or a boat party during Miami Tech Month. The other is to pay $3,000 to join a month-long “cohort,” in which you and around two dozen other young tech founders live and work together at the mansion.

Launch House’s pitch for its cohorts is that, by networking and bonding in extremely close quarters for just four weeks, its members will learn skills and make connections that are far more valuable for their careers than what a traditional college degree provides. It’s part of a larger trend in the tech world of augmenting or even circumventing traditional institutions — school, church, a shared workplace — to build knowledge but also community, digitally and IRL. No longer is the startup founder’s maxim to create a “minimum viable product”; now they need a “minimum viable community.”

Sixteen women dining around an outdoor table, as seen from above.

Launch House held its first cohort specifically for women in March.

Another trend swept the tech world around the same time Launch House was taking off, one that married the concept of community with the promise of enormous profit. Web3 is the name for the still-mostly-hypothetical iteration of the internet that is built on blockchain technology and crypto transactions, which are supposed to increase both transparency and security. Much of the Web3 space can feel willfully abstruse; there’s no shortage of headlines like “WTF is Web3?” or “You Can Give People What They Want, Or You Can Give Them Web3.

According to devotees, the Web3 spaces where people meet, hang out, and even date online (“the metaverse” is one such arena) will revolutionize the internet by democratizing power. These spaces will be governed by a group of members who can vote on how their pooled resources are used, thus putting power back in the hands of communities rather than, say, Mark Zuckerberg. Critics, meanwhile, see a predatory system in which insiders exploit people’s desire for connection, package it into pump-and-dump schemes, and end up manipulating hopeful investors into losing money.

Young entrepreneurs are often desperate for something to offset the heaviness of constant competition. “Community,” insists the Web3 startup that sells digital coins to fans of popular influencers in exchange for access to a group chat; “community,” says the mobile banking app targeting digital creators and other freelancers whose main uniting factor is that they work alone; “community” say the members of Launch House when what they are referring to are customers. Theirs is a world in which someone can ask, “What kind of company are you building?” and you can just say “community.”

In March, Launch House hosted its first cohort exclusively for women. The 23 founders who attended were driven and enthusiastic, and worked on projects that could help chart the next decade of the internet. Held during Women’s History Month, the all-female cohort was meant to solidify Launch House as an unmissable stopping point for bright young entrepreneurs hoping to make it big in tech and find community in a lonely industry.

What the women didn’t know was that the community that Launch House had established was one that could be hostile to them — one that seemed to prioritize money, status, and clout over anything a community might actually need or want, and that could ostracize them if they spoke out against it. Rather than simply an example of yet another mismanaged business full of Los Angeles dreamers, Launch House is a case study in how “community” operates when profit and attention appear to be its main motives.

A whiteboard sits outside on the patio.

In the beginning, Launch House was supposed to be a reality show. It was 2020, the year when people in the tech and entertainment industries decided that if you put a bunch of young, attractive social media stars in a fabulous mansion where they can create lots of content and plenty of teen drama, you can make magic, or at least get a Netflix deal. Hype House — a creator content house that eventually did get a Netflix deal — had launched the careers of TikTok superstars like Charli D’Amelio and Addison Rae, and copycats were popping up all over Los Angeles. Launch House, then, would be “the Hype House for the tech industry,” and on September 4, Brett Goldstein, one of its founders, tweeted, “Excited to announce LAUNCH HOUSE, an Instagram/TikTok reality show where 19 entrepreneurs spend a month together in a house in Tulum.” That tweet is now framed in the entryway of the LA house.

Goldstein, a former Google employee, joined with Michael Houck, a project manager at Airbnb who had been laid off early in the pandemic, and Jacob Peters, a software startup founder. After ditching the reality show idea, Launch House realized that their most valuable asset was simply the ability to gather a bunch of solo tech founders in the same place. Drawing from a storied history of hacker houses in the tech industry, Launch House would aim to attract the kind of creators/entrepreneurs who regularly went viral for sharing business advice and were bullish on the buzzy concept of Web3.

Brett Goldstein’s original announcement tweet is framed in the foyer of Launch House.

Programs like Launch House, which often require members to pack their bags and move to a new city with just a few weeks’ notice, are only feasible for a very specific group of people: young, hungry digital nomads with the freedom to figure it out as they go along. Some of these people have the financial privilege to make such a decision, while others receive scholarships from Launch House; many of the women in the all-female cohort didn’t have to pay to join. They’re all trying to break into a cutthroat and deeply individualist industry, often without established social ties or the stability of a permanent residence. Launch House offers friendship, and maybe a leg up, during a high-pressure time. “A lot of people that came in did not have friends from college, friends from school, friends from work,” says one former member. “People from lonely backgrounds are most prone to joining a cult.”

Goldstein — the current CEO — has a particular interest in organized religion, a subject he likes to talk about to Launch House members and in interviews with the press. He seems less curious about the beliefs of these groups, however, and more in the structure of the organizations. Early meetings with the team, according to former employees, included presentations on what they could learn from the dynamics perfected by cults and some religious sects, so that members would proselytize to their social networks about the wonderful things Launch House had done for them and create new converts. Members with the most enthusiasm for the company are selected to act as ambassadors, interviewing potential members and spreading the good word.

Cohort members are sometimes encouraged to boast about Launch House online without even realizing it. Each month, Goldstein conducts a presentation on how to build clout on Twitter (most of the tips were “just plagiarism,” said one member; Launch House denies this is the case). At the end of the month, the person who got the best engagement during that period is selected to “go viral” via a mass retweeting campaign among Launch House staff and members. What the members are not told is that, according to sources, the person who “wins” the best engagement contest is whoever has mentioned Launch House on Twitter the most.

When new cohorts arrive at the house, Launch House organizes a team-building exercise called the “Founders’ Circle” that mimics religious confessionals: Each member is encouraged to share the most difficult experiences of their lives — deaths of loved ones, sexual assaults, grave financial losses — a practice that employees refer to as “trauma bonding.”

Brett Goldstein (left) and Michael Houck, two of Launch House’s co-founders.

In March, Goldstein said the company used community members who were experienced in HR and DE&I to deal with the kinds of issues that might come up when dozens of young strangers live in a house together. They also said it worked with a DE&I training company to “proactively audit our process instead of waiting for something to happen.” “So far they’ve been pretty impressed,” he told me.

Yet former employees describe the vetting process for people who wish to join Launch House, including those who live in the Beverly Hills mansion as a member of a cohort, as incredibly lax. After filling out a short application on the company website, hopefuls submit to one, maybe two, 15- to 20-minute interviews about the project they’re working on by an existing member or Launch House employee. Often, they’re accepted on the same day.

“Everything that happened there boiled down to an issue with screening the quality of people coming in,” said one former employee who conducted several such interviews. “They don’t vet Launch House members at all,” said a former member. “They look at our name, our website, and how many Twitter followers we have and then looked at our company website to make sure we had a company website and didn’t do any further investigation.”

The Launch House founders, meanwhile, say they do plenty of due diligence: Houck says that after he personally reviews every applicant, the founders and other community members listen to feedback from the members who conduct interviews, and then conduct a “final check” before inviting them in. Still, Launch House has a history of accepting founders whose startups sound an awful lot like the many, many crypto scams that fester throughout the tech space.

Kevin (who, like every former and current member of Launch House I spoke to for this story, asked to be referred to by a pseudonym because of concerns that speaking to a reporter could jeopardize his startup’s ability to get funding) entered Launch House in August 2021 as an ideal member: a young, ambitious, eager guy in tech who, as he puts it, “didn’t realize I was in a fucking cult.” He tweeted dutifully about the benefits of joining the community and loved networking with his fellow members — well, most of them.

Kevin recalls one cohort member who claimed to be the founder of a successful business who was now working on Web3 company and promised to invest tens of thousands of dollars in several of the other members’ startups, as well as Launch House itself. He had a habit of flaunting his money, renting a Lamborghini and treating fellow members to Beverly Hills hot spots and strip clubs. But when he borrowed money from some of them, he never paid them back.

Launch House members take work calls inside the mansion’s phone cubbies.

His fellow member’s shadiness was far from the worst thing about Kevin’s time at Launch House, which ended in a terrifying ordeal. On August 21 around 9:30 in the morning, the residents awoke to the sounds of an ambulance. One of the members had gone unconscious in his room, barely breathing. Someone performed CPR until the paramedics arrived, administered narcan for an apparent opioid overdose, and brought him to the hospital.

As the rest of the cohort reeled, Goldstein was on the phone. “I’m like, he’s probably figuring out what hospital he was taken to, or contacting loved ones,” says Kevin. “And then he gets off the call and comes over to us and goes, ‘Hey guys, guess what? I just landed two fintech TikTokers for our first New York cohort!’ and I think they were also gonna invest as well. I was like, ‘Are you fucking kidding me?’ Thirty minutes later, he ordered Thai food. That’s how he handled that situation.”

More recent members lament the lack of clear processes and general chaos, and express concerns over security. In May, Hayley was one of three women in a Web3-specific cohort, and she says she arrived to a house with bedroom locks that never worked and visitation policies that were rarely followed. “People would just come in willy-nilly. I didn’t know who those people were.” (Launch House claims the locks functioned.)

She watched one stranger fall asleep on a couch and saw other unidentified people staying at the house. Many of the cohort members I spoke to for this story cited lack of physical security as one of their main concerns; members were supposed to let someone in the Discord know if they wanted to stop by one of the locations, but they say random people would often show up at the Beverly Hills mansion claiming to know someone connected to the company.

This was especially worrisome to the women of Launch House, who typically only made up a handful of the people in each cohort. When one woman said she was groped by a former member who no longer lived at the house but stayed over anyway, she said there was no one around to enforce the company’s zero-tolerance policy.

A woman in a majority-male cohort reported overhearing her roommate say “disgusting things” about what he wanted to do to the women in the house. She also alleges that Goldstein would bring over dates in an attempt to impress them with the mansion. “Honestly, it all seemed like a big dating thing for them, where they orchestrate their ‘networking’ events to have a bunch of girls there and they’re like, ‘Ooh, which one should we pick?’” another woman said. Two of the three founders are or have been in relationships with women they met in the cohorts.

“On the surface, [Launch House] looks very shiny,” says Delia, a former Launch House member who’s since distanced herself from the community. But the sparkle faded quickly.

During a heavily alcohol-fueled outing on a party bus in April 2021, several cohort members harassed the women on the bus, before one of them allegedly stuck a hand up the skirt of a member I’ll call Jessica (not her real name). After the incident, according to sources, Goldstein and Peters asked Jessica to rate, on a scale of 1 to 10, how much each of the men violated her. Launch House denies that Jessica was asked to do this. In a few days, only the man whom Jessica had ranked the highest was kicked out of the house. None of the women were given a heads up that he was being told to leave, and were therefore stuck in the house with him as he packed his belongings, Jessica said.

While Jessica remained disturbed by this experience, she felt that the opportunities presented to her by the community were still too good to pass up. She rejoined Launch House for another cohort after the bus incident, during which, she says, things only got worse.

On May 21, 2021, the team hosted their monthly “gala,” where Launch House members and friends gathered at the Beverly Hills mansion for a party. They loaded in a carful of booze, and though the founders had claimed they’d planned on only around 100 guests, hundreds more were added to the guest list. “Brett [Goldstein] told the girl at the door to let anyone in, regardless of Covid tests,” said one attendee. “If they weren’t on the guest list, as long as they were hot or had a lot of followers,” they could enter. “Even if Covid weren’t a thing, I’m sure it would have been a fire safety issue,” said another. “It wasn’t a networking event anymore; it felt like a club.” More concerning was the presence of seemingly underage girls, some of whom were seen falling over or passed out on the curb outside.

A look into the Launch House mansion from the back patio.

Police came to the house twice that night for noise violations, according to Beverly Hills Police Department records obtained by Vox, and found about 200 cars parked outside on the dead-end road; on the second visit, they shut the party down. The morning after, rumors began to swirl: Someone saw someone with tattoos tied to the gang MS-13; a content creator got “jumped” and taken to the hospital; another fight broke out. Attendees described a frenzied scene and a company unprepared to manage it.

When Jessica woke up the next morning, she, along with several other women who’d attended the party, was pretty sure she’d been roofied. She only remembered taking three shots — not nearly enough to black out for her tall frame — but woke up in bed without her tampon in, and without knowing how or when it had been removed or how she’d gotten upstairs. Other people at the party, too, reported instances of blacking out due to suspected drugging, noting how weak the security had been, how none of the bedrooms had been locked, how essentially anyone could walk through the door at any time. And they did: Multiple people reported seeing groups of partygoers enter the bedroom where Jessica was passed out. Onlookers presumed they were en route to the attached bathroom to do cocaine.

Jessica eventually went to the hospital for a sexual assault forensic exam and decided to spend the next few days at a hotel to process what had happened. In the meantime, the police came to the house again, as part of an investigation into an alleged assault with a deadly weapon, according to records. A member who was at the house that evening saw the police flipping through CCTV footage from the property. “Everything was tense,” said one member. “We couldn’t get any straight answers from the founders. We were told that police were coming and to just keep going about our day, and not talk to them if they asked us anything.”

Though the founders wouldn’t give any information to the other members on what happened at the party — and aside from acknowledging that there was a police investigation, Launch House denied allegations about the evening to Vox — Goldstein did make one thing clear at the time: They were not to allow Jessica back in. “FYI our landlord has changed the gate code to [XXXX]. please don’t share with anyone no longer living here or outside guests,” wrote Peters in the Launch House Slack group, as per screenshots obtained by Vox. Jessica had been kicked out of that, too.

Luckily, she still had friends in the house who helped her sneak through the gate to pick up her belongings, including her passport, which were still locked in her room. Some members were tasked with distracting Goldstein while she packed up her remaining things. She never went back.

The world of female tech founders is small. In place of systemic power, they turn to whisper networks, where word of Launch House’s reputation has spread quickly. One woman who was considering joining a cohort said she was warned against it by a female VC. “I heard that Launch House has retaliated against a woman who’d been sexually assaulted there in the past,” said the woman who was groped. “So I just decided not to tell anyone.”

Launch House denies any such retaliation.

The mansion, which Zillow currently estimates is worth $12.9 million.

In February 2022, the company announced a $12 million Series A round led by Silicon Valley’s most famous VC firm, Andreessen Horowitz, known for its investments in Facebook, Twitter, and Lyft, but which recently has earned a reputation for following shallow hype cycles. In a community full of young, mostly first-time entrepreneurs hoping to meet big-name investors, speaking out publicly against Launch House could risk their prospects in the industry.

“They’re afraid the Launch House mafia will come after them and they won’t get funding for their own startup,” explains Madison Campbell, the founder of Leda, which offers self-collecting DNA kits and programs for sexual assault survivors. She never joined Launch House herself (“I don’t want their money in the first place,” she says of Andreessen Horowitz), but she’s been in touch with many members seeking resources about things they experienced or witnessed. She recalls hearing “countless” sexual assault allegations. “If it looks and smells and acts like a fraternity, it’s a fraternity.”

“Launch House has a zero-tolerance policy for drug use and unwanted sexual advances,” reads a statement provided to Vox by Launch House, in response to the allegations in this article. “Anyone confirmed to have violated the code of conduct has had their membership revoked.” In a call with Vox, a spokesperson said that incidents happened “a very long time ago, in very, very early stages of the company, certainly before they attracted outside funding,” and that the company has professionalized since Goldstein took over as CEO from Peters in October 2021. (Peters has since left the company.)

However, according to an employee who worked for Launch House until this July, an accusation that a Launch House member sexually assaulted a woman who was friends with some of the other members in December 2021 sent the founders spiraling. While the employee offered counseling services to the victim, Houck suggested the victim get media training from a Launch House publicist after being contacted by a reporter, so as not to disparage the company. The former employee also says that a Launch House member who had been accused of sexual assault by multiple members — accusations that were corroborated by several sources who spoke to Vox — was not kicked out of the community program until the employee threatened to quit.

The former employee claims that in recent months, Launch House’s vetting process has only become more lax. “It felt like we stopped being as selective because they weren’t making any money and they were having trouble filling cohorts,” she said. (A spokesperson for Launch House maintains “the acceptance rate for Launch House membership is the same as the Ivy Leagues, among the oldest and most prestigious in the United States.”) The company says it has invested in DE&I and HR processes in the past year, but when the employee asked for time off for burnout this summer, the founders gave her just three days, and another employee continued to text her during that period. She ended up resigning less than a week after returning, and said she’s since been diagnosed with PTSD. “I reached my breaking point,” she says. “I was like, ‘I feel like I’m doing more harm than good.’”

The open living area is where Launch House hosts many of its livestreamed events and panel discussions.

Michelle Groskopf for Vox

There is another reason that Launch House members might remain silent, or convince themselves that what they saw wasn’t what they thought they saw, or that what happened to them wasn’t actually that bad.

The mood in tech, particularly Web3, is different than it was earlier this year. A recession appears to be on the horizon, however far away. Crypto is down; NFT spending has tanked. Over the past few months, Launch House’s founders have acknowledged the undeniable slowdown of VC investments in crypto and blockchain projects by offering a two-week course to members on “building in a bear market,” and have tweeted frequently about what a great time it is to be a founder. “The removal of cheap money in the system is only bad news for startups that aren’t building meaningful products,” tweeted Houck, adding days later, “a bear market doesn’t mean you slow down. the best founders get more aggressive when times are tough.”

The vibes are off, basically, and in times of financial uncertainty, community is more important than ever. Launch House, however, is a prime example of what a community can look like under inept leadership: It’s chaotic, ragtag, unpredictable. It’s what happens when young tech guys are flooded with money doled out by old tech guys who see dollar signs in the eyes of people who look and sound like younger versions of themselves. It is clannish and insular; you’re either with them or you aren’t. As more companies raise money for projects promising so-called community, Launch House may very well be a frightening bellwether.

True community-building, as tech founders should have realized by now, requires more than renting a mansion in Beverly Hills. It takes more than bandwagoning onto a shaky tech trend and convincing profit-hungry investors to hand over millions of dollars. It’s more than tweeting hustle porn and hosting parties. Sometimes, community is what happens when a great deal of eager young people come together and realize the people who brought them there have no idea how to build a community at all.

Source link

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments