So lately, as artificial intelligence has scrambled operations for many businesses, some executives are announcing that they are “refounding,” essentially rebranding, as AI startups.
In June, for example, Airtable, a project management platform, announced that “instead of just adding more AI capabilities to our existing platform, we treated this as a refounding moment for the company,” sharing that it would be giving AI features to users as a default and rolling out a new pricing model.
In October, Handshake, a careers site, announced its new business model, which includes hiring contractors to generate data to sell to large language model companies. “This is our refounding,” the company said in a blog post. “Not a second act, but the next leap in the mission we started a decade ago.”
And last month, the new chief executive of Opendoor, a real estate startup, told investors that “we are refounding Opendoor as a software and AI company.” Opendoor, which did not respond to a request for comment, and Handshake both announced layoffs around the same time.
The leadership team at Airtable played around with words like “relaunch” and “transformation” to describe its AI era, Howie Liu, the company’s cofounder and CEO, said in an email. But it ended up choosing “the language of founding because the stakes feel the same,” he said, in the sense that current decisions will shape the next decade of the company. The term, he added, captures the broad scope of changes, unlike a pivot, which he thinks implies a change of direction after getting something wrong.
A refounding injects “startup culture back into an existing business,” said Katherine Kelly, chief marketing officer of Handshake. It aims to capture the energy of founding without all the risks — an approach that is “very seductive,” she said, for the tech community.
The return to an early-days mindset can also encourage the all-out-grind approach that defines young startups. Handshake called its employees back into the office five days a week at the same time that it announced the refounding, Kelly said, and its leaders made clear that they “expect people to be operating with a pace and number of hours that is meaningful and will help us hit goals.” Being part of a just-founded startup can be invigorating; executives are hoping the same will be true in a refounded one.
Though it heralds a new chapter, a refounding also involves looking at the fundamentals of a company and “reinterpreting” what has made the firm operate well in the past, said Jon Iwata, a lecturer at the Yale School of Management. Iwata, who has written about how established corporations manage such changes, predicted that “AI is going to cause many CEOs to ponder existential questions” and to ask, “What business are we really in?”
Once a company decides what business it’s really in — in many cases, the business of AI — the stakes are high. Conventional wisdom says that you can found a company only once. The refounding mindset suggests that perhaps founders can get another go.
But after that, at least in Kelly’s view, that’s it. “If you’re really going to make people believe it at your company,” she said of refounding, “you have to put a lot of effort into it, because you only get this one chance.”