Pro-sex worker app Lips accepted, then dropped from Newchip

When Annie Brown, founder of Lips, a social app for free sexual expression, applied to the Newchip Accelerator program in late April, she repeatedly asked if the investors were inclusive — with good reason. Lips picks up where Facebook and Instagram ban images and messaging. Since its launch at the start of this year, it’s become a haven for sex workers, sex educators, and erotic artists.

Newchip claims to be the world’s leading online accelerator for startups, and has funded $300 million into startups since 2019. Brown said Newchip assured her, “We’re inclusive, very open-minded.” Lips was even accepted in June.

But days before Lips was set to begin the program, which includes six months of mentorship and investments of up to $250,000 upon graduation, Newchip called Brown to rescind the acceptance due to the app’s sexual content.

“When Lips applied, the team was very excited by their mission to provide a social platform focused on the LGBTQ community,” Newchip told Mashable. “Unfortunately, it was discovered that there was a good deal of content on their web app which violated our terms of service.”

The decision is just one example of the struggle Lips has gone through to secure funding for their app, which reached 10,000 users in its first month — in-line with or exceeding the traction that startups with millions in VC money hope to have, according to Brown. Due to Lips’ outward support of sex workers, they’ve been shut out by VCs and other accelerator programs despite fast growth and high engagement.

This has been a pattern not only for Lips, but for other pro-sex, pro-sex worker startups, including tech entrepreneur Cindy Gallop’s site MakeLoveNotPorn, which seeks to show “real-world sex” as opposed to porn, and has repeatedly hit snags in funding due to its content. It’s also indicative of a broader problem in Silicon Valley: A paltry 2.3 percent of VC funding went to women-led startups in 2020; between 2015 and August 2020, 2.4 percent went to Black and Latinx founders.

The need for pro-sex worker spaces is also apparent, as social media giants like Instagram don’t serve them. Given Facebook and Instagram’s aversion to legal and artistic sexual content and investors’ hesitancy to fund startups willing to host such content, sex workers and other marginalized groups are squeezed out of digital social spaces. Meanwhile, VCs claim to want diverse startups, but don’t support them in practice.

Shut out of Newchip and other funds

Newchip allegedly told Brown they loved the idea of an app for free expression for LGBTQ people and women — their investors, however, wouldn’t want to be involved in Lips.

Brown recalled telling them, “You love the idea but actual execution — when women or LGBTQ people don’t express themselves in a way that fits with your perception of the world — then it becomes uninvestable.”

Brown told Mashable that despite impressive numbers — such as Lips growing at over 1,000 users per month without massive funds or advertising — they’re struggling to receive investments in general. Newchip hasn’t been the only example.

According to Brown, investors tell her team that they have to “tone down” their pitch deck; that investors’ LPs (limited partners, who are liable for only their investment in a business) are conservative and this investment wouldn’t gel with their lifestyle; and that investors say they’re mothers and, “What would it say to my kids if I invested in something like this?”

The excuses vex Brown. “Does that mean I can’t be a mother one day?” she asked. “Our CTO [Barbara Bickham] is a mother. People on the app are mothers. Can sex workers not be mothers?”

Potential investors also cite vice clauses, agreements that bar firms from investing in industries such as sex and cannabis, as the reason for not investing. As a result, Lips and many other startups that fall under the vice category are shut out of funds.

“People on the app are mothers. Can sex workers not be mothers?”

The current landscape of the VC industry made the Newchip bait-and-switch that much more devastating.

During the phone call in which the accelerator reversed their decision, they apparently told Brown they didn’t even look at the app before accepting Lips into the program. In a statement to Mashable, Newchip said they receive thousands of applications a month and rely on responses from founders applying to the program to get a picture of the startup during the process. They didn’t clarify whether they looked at the app before accepting.

Newchip, according to their terms, doesn’t accept or invest in companies focused on “weapons manufacturing or distribution, politically affiliated and divisive missions, illegal drugs (to include federally regulated cannabis companies with an exception for cannabis technology), cryptocurrency projects raising money through token sales, as well as any entities which create, promote, or display content which is adult-themed.”

Both Brown and Val Elefante, Lips’s community manager, described the way the Newchip employee spoke about the app’s posts as problematic. Examples of posts that violated Newchip’s TOS, according to this employee, were an image of “a girl riding some dude,” and a screenshot of a Twitter poll featuring the words “cum” and “slut.”

“This is our world, this is the art that we’re making room for,” said Elefante of the post, “and words like ‘cum’ and ‘slut’ are common in this world.”

Brown, meanwhile, pointed out that those words — and more? — were already on Twitter. In fact, Twitter allows pornographic content on the app.

A collage on Lips

Credit: lips

A collage on Lips

Credit: lips

Newchip confirmed to Mashable that an employee vetting the app had it open at the time of this call and gave live examples of content that violated their terms, but that the call wasn’t recorded so they couldn’t verify what the content was.

The accelerator maintained their position to not allow Lips into the program. In their statement, Newchip said they opened the app that morning — over a month since dropping Lips — and noticed two features for the first time: an onboarding process that allows users to limit what content they see, and transparency about the 17+ nature of their content.

While Newchip claimed these features were new, Brown told Mashable Lips has had both of those features since its launch. She pointed to an Instagram post from December that shows the 17+ notice and tagging system (where users can choose what content they see).

Even with these protective features, however, Newchip said Lips “would still not fit given our investment restrictions.” Newchip brought them up to applaud Lips’s apparent progress and movement “in the right direction.”

Once accepted, Brown paid Newship $5,000 to participate in the program — with a guarantee that if they didn’t get at least one investment during it, that Newchip would refund it — and then put down $1,000 as a down payment to secure the spot. Newchip refunded all of it, but Brown would’ve rather experienced the accelerator. “They did refund my money, which was nice,” she said, “but I didn’t want the refund.”

The problem extends to Instagram

Lips isn’t just fighting discrimination in funding; they’re also fighting it on Instagram.

Lips launched as an Instagram alternative. While Brown began crowdfunding in 2019, the official launch in December 2020 happened to coincide with a change in Instagram’s terms of service (TOS) that alarmed sex workers. The new TOS, as with previous versions, continued to require adherence to Facebook’s Sexual Solicitation rules, which bans explicit and implicit sexual content like “suggestive emojis.” While the app assured them the changes had to do with advertising and not their content, sex workers still claimed otherwise.

Brown asserts that Instagram gaslights users on two points: Shadowbanning, when an app blocks posts from an account’s audience without outright banning the account, and deleting accounts. While Instagram claims they don’t shadowban (and pointed Mashable to a blogpost about shadowbanning, which too denies that they shadowban), Brown said that’s not the case. Instagram users now have to spell sex like “s3x” and use other code words, she continued, because otherwise content is flagged and gets lower engagement.

“More and more people are getting pushed off the app” this year, Brown said. Instagram told Mashable that, “Sex workers can have an account on Instagram provided they follow our rules.” With the inclusion of Facebook’s Sexual Solicitation guidelines, these rules restrict any suggestive content from eggplant emojis to nudity. Yet, as seen in the replies to Instagram’s tweet about their TOS, sex workers’ accounts often get deleted even if the account is empty.

“It’s not that Instagram doesn’t know that this is a problem,” Brown said. “It’s that they know it’s a problem and they’re never going to address it.”

This, Brown said, is why building alternatives is important. In addition to the platform itself, Lips’s team is also building a nuanced content moderation algorithm that will allow for consensual and legal sex content but filter exploitative content. Brown wonders if Instagram would even utilize such an algorithm, however, as opposed to their current strategy of mass wiping.

More recently, head of Instagram Adam Mosseri announced that Instagram is “no longer a photo sharing app,” and will pivot to a more TikTok-style model in order to stay relevant.

Mosseri didn’t mention the app’s content moderation issues or inclusiveness in this announcement, which to Brown are the real reasons users are leaving Instagram.

“The real issue that’s causing Instagram to become irrelevant is [that] these communities — the most interesting artistic, creative communities on Instagram — are being pushed off in favor of vanilla content that, frankly, Gen Z just isn’t interested in,” said Brown, referring to sex workers and similar creators like sex educators and artists.

In response to the change, Lips posted a statement to Instagram decrying the shift to video:

A focus on video is a more subtle way to erase activists, sex workers, and erotic/queer artists from their platform. Additionally, the idea that ‘video’ is the solution to IG staying relevant is a slap in the face to all of us who have stated time and time again that the reason IG is losing users is due to the systemic silencing of some of the app’s most interesting, provocative, and important creators. With every announcement from IG, it becomes increasingly clear that big tech refuses to listen to the demands of marginalized creators.

Instagram declined to comment on this, but pointed to Mosseri’s tweet a week after the announcement that stated the app isn’t “abandoning photos or photo creators and artists.”

Just this week, Instagram rolled out sensitive content controls, which enable users to limit photos or videos that “could be upsetting or defensive” on their Explore page. Sexually suggestive content is lumped into what Instagram considers “sensitive,” and Lips condemned the feature.

Making true diversity for all creators

There is some hope, however. Lips has gotten some funding, such as a $30,000 investment from Headstream, a youth mental health accelerator that saw the value in a body positive space, according to Brown. Further, Lips was accepted into the Dragonfly bootcamp for, in their words, womxn and non-binary founders.

Brown is excited to learn and connect with the fellow founders accepted in the bootcamp, and acknowledges that the people who have believed in Lips are why the app is where it is today.

But these wins don’t eliminate the fact that many investors decline Lips precisely because the app is for sex workers and queer creators. Many VCs — and other industries — claim to want “diversity,” but according to Brown, they only want the diversity that’s palatable to them.

“No one’s calling out the limitations of this diversity discussion,” Brown said. Investors tell Lips they want to invest in women and LGBTQ startups, but when faced with the reality of what an app by-and-for those groups is, they pull back. “Everyone’s getting a pat on the back,” she continued, “even though they’re not really making much of a dent.”

Newchip’s insistence that they were inclusive is indicative of this problem. Until VCs and major social platforms make room for all creators, their diversity will only be surface level. The inclusivity these investors and sites strive for seems to only include people they deem worthy, but not the sex workers, queer creators, and other alienated groups that desperately need a home online.