Axios Login

A smartphone with different colored buttons floating above its surface.

January 20, 2023

Hello, one last time from Switzerland. I have to say, I love being six hours ahead of East Coast time versus three hours behind. But it's time to come home. Today's login is 1,217 words, a 5-minute read.

📣 Situational awareness: Google CEO Sundar Pichai said Friday the company is planning to layoff 12,000 people, becoming the latest tech company to slash jobs.

1 big thing: Ousted Netflix worker scripts new career as investor

Photo illustration of B. Pagels-Minor with money elements and abstract shapes.

Photo illustration: Shoshana Gordon/Axios. Photo: Alevtina Kalashnik

Fifteen months after their high-profile firing from Netflix, B. Pagels-Minor is setting out on a new career, aiming to be, they believe, the first Black transgender venture investor.

  • "I'm not necessarily someone who likes to be in front of a camera or the face of things," Pagels-Minor said, but their experience at Netflix prompted a shift: "You have to stand up or you really will be run over."

Flashback: Pagels-Minor was fired, while eight months pregnant, from their role as a program manager at Netflix after the company alleged they were the source of leaked information regarding Dave Chappelle's comedy special "The Closer." (Pagels-Minor has denied leaking the information to the press, admitting only to posting data on an internal message board.)

  • Within Netflix, Chappelle's relationship with Netflix had been a point of contention for years in both the Black and transgender employee groups, both of which Pagels-Minor co-chaired. Of concern was Chappelle's outspoken criticism of transgender identity.
  • Employees weren't calling for the special to be banned, but had sought some sort of content warning.
  • Netflix co-CEO Ted Sarandos told employees that there was no connection between anti-transgender content in the media and real-world violence and vowed to keep the special on the service as it was — comments that further deepened worker concerns and eventually led to an employee walkout.

Pagels-Minor quickly found that not only were they out of a job at Netflix, but the door was largely shut to similar roles elsewhere, despite a resume that included Apple, Sprout Social and Cars.com.

  • They would apply for a job and have a good interview or two, only to hear through the grapevine that a VP said no, concerned with "the optics."
  • "I was lowkey blacklisted after Netflix," Pagels-Minor said. "Since I couldn't find a role that was reflective of my experience and background, my response was to see if I could apply those same skills in other areas."

So Pagels-Minor expanded a consulting practice that they had been doing on a smaller scale, initially for Plume, an internet-based health service that specializes in care for trans and non-binary people.

  • But while they continue to consult, Pagels-Minor discovered that their true passion lay in combining funding with consulting to accelerate a company's growth.

With that in mind, Pagels-Minor has now pivoted to venture capital — setting up a new firm, DVRGNT Ventures, focused on pre-seed and seed stage companies.

Details: Pagels-Minor said they are actively raising money for a $10 million fund, with plans to have the first investments by the end of March and be fully funded by January 2024.

  • The fund is focused on people and places that are being overlooked by a culture focused on a few big cities.
  • Though open to companies in a range of industries, Pagels-Minor says they are most interested in companies looking to improve key areas of life including healthcare, transportation and food sustainability.
  • "I'm looking for off-the-beaten-path founders who are in those in-between cities, [and] that are trying to solve real problems," they said.

2. Netflix's next chapter

Data: Netflix earnings reports; Chart: Thomas Oide/Axios

A major leadership shakeup at Netflix following the most tumultuous year in the company's history signals a new era for the entertainment giant.

Why it matters: After a decade of consistent growth under co-founder Reed Hastings' leadership as CEO, the company now must pivot its strategy to take on a more competitive and turbulent streaming landscape.

Driving the news: Netflix on Thursday surprised Wall Street when it announced that Hastings is stepping down as co-CEO of the streaming giant and becoming executive chairman.

  • As part of the leadership change, Netflix co-CEO Ted Sarandos will be joined by a new co-CEO — current chief operating officer Greg Peters.

Be smart: Hastings has led the company for 25 years, and has been the chief architect of some of its most critical moves — most notably, its transition from DVDs to streaming.

  • His role change means Netflix won't be led day-to-day by a founder, a shift other tech giants have made in recent years, including Amazon and Google.

Details: On an earnings call Thursday, Netflix executives tried to assure Wall Street that Hastings' move wouldn't mean massive changes.

  • "There's no big strategy shift or big culture shifts," Peters said. "We don't have a bank of changes that we have been holding for this moment. So mostly it's continuity and moving forward."

But investors had mixed reactions to the news and the company's fourth quarter results. Despite crushing Wall Street expectations on subscriber additions, Netflix missed expectations on earnings.

  • Last year, Netflix said it no longer wanted to be valued based on subscriber additions, but rather its revenues and profitability.

The big picture: Increased competition has forced Netflix to reimagine its business plan and invest in new growth areas like gaming, original films and advertising.

  • Now that Wall Street wants streaming providers to focus on making money over subscriber growth at all costs, Netflix is hoping that those new areas of investment will help it become more profitable long-term.

What to watch: Netflix offered few details about whether its new ad-supported tier — which debuted in November — has so far paid off, but executives said they were optimistic about the program.

The bottom line: Netflix spent years differentiating itself from other entertainment companies by acting like a grow-at-all-costs tech firm. Now, under a new leadership team, it's trying to differentiate itself from its streaming rivals by acting like a blue chip company with a focus on profitability above all.

3. Gaming's toxic player problem

Illustration of a person behind a laptop screen with numerous cursors surrounding them and pointed towards their head.

Illustration: Aïda Amer/Axios

Harassment, threats and other toxic behavior from players are taking their toll on the people who make games, according to a new poll, Axios' Stephen Totilo reports.

Driving the news: More than 75% of game creators responding to the 11th annual State of the Game Industry survey said it's a "serious" or "very serious" issue, according to data released Thursday.

Details: 40% of respondents said they'd experienced harassment directly, more so among respondents who were not men or who identify as LGBTQ+.

  • 68% of respondents said their company did something about it (a fifth said their company did nothing).
  • The poll was conducted with more than 2,300 game developers from around the world and has a 3% margin of error, according to its organizers at Game Developers Conference and affiliate publication Game Developer.

State of play: Threats against game makers from players have been an unwelcome burden for workers in the industry for over a decade.

  • Developers have reported harassment for anything from delaying a game to changing a feature to expressing preference for developing stories instead of combat. The harassment is often targeted at developers who are women, trans or otherwise members of underrepresented groups in gaming.
  • Some companies have more aggressively pushed back on behalf of their developers of late. Last year, Destiny maker Bungie Studios sued a gamer who allegedly threatened a staffer.

4. Take note

On Tap

  • A fondue dinner after a busy week, and I'm very excited.

Trading Places

  • Quest Software promoted chief financial officer Carolyn McCarthy to the additional role of operating chief and named former Rocket Software chief information officer Matt Deres as its CIO.

ICYMI

5. After you Login

Photo: Nicholas Johnston/Axios

The WiFi on Swiss trains is quite fast and free. Here I am finishing yesterday's Login.

Thanks to Scott Rosenberg and Peter Allen Clark for editing and Bryan McBournie for copy editing this newsletter.