Hey — It's Nico.
543 startups have shut down in 2023. Every Thursday, I'll help you avoid failure.
Here's what I got today:
This is brought to you by PartnerHero, which helps startups scale with highly-trained, on-brand CX teams.
16 lessons from bootstrapping Kinsta from $0 to 7 figures (Link).
NFX launches an AI startup advisor chatbot (Link).
Zlappo’s journey from 0 to $30k/mo to 0 (Link).
Greg Isenberg shares 6 methods for finding startup ideas (Link).
How to find ideal customer profiles for B2B businesses (Link).
AC Ventures + Stripe launch playbook on GTM strategies for startups (Link).
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After 4 years, $17M raised, and 2M users, the Indian-based Masterclass, FrontRow, has shut down.
FrontRow was a hobby-learning platform that offered courses in genres such as cricket, music, and comedy, taught by Indian celebrities.
This week, one of the co-founders shared the startup’s journey and lessons from its demise.
In early 2020, FrontRow raised a $3M Seed round. Over the following months, everything went well: users loved it, VCs wanted to invest, and the press covered them.
At $1M in ARR, growth plateaued. Users were not sticking to the platform. They kept adding features, but nothing worked.
Then, a pivot idea: focus on cohort-based courses. It was a hit. They started growing fast again, reaching $4M in ARR and raising a $14M Series A round.
However, there was a problem with the model: they had a -250% contribution margin. Growth solved this, but at some point, it started to plateau again.
They spent months working on their unit economics and got to break even at $1.5M ARR. But they didn’t feel like having PMF anymore.
With ≈15 months of runaway, in October 2022, they had to let go 90% of the team. Over the following 9 months, they worked on two other products but eventually decided they were not the path they wanted to follow.
After 4 years of starting, in July 2023, FrontRow shut down.
1) Believe in the market: Only build a business if you’re sure you want to spend at least 5 years in that market.
2) Choose what matters and ignore the rest: Focus on how well you believe your business is working. You realize when you have PMF.
3) Find truth-tellers: Find a small set of people who keep you honest and whose opinions you always listen to.
This week, 20-year-old founder Avi Schiffmann launched the pre-order of Tab, a wearable personal AI assistant.
Avi is best known for creating a COVID dashboard and an Airbnb-like platform for Ukraine refugees.
Until recently, it was possible to use tools like Rewind to provide an AI context on everything you’d do on a computer.
Tab goes one step further: it listens to all of your conversations, allowing you to talk with an AI assistant that has the complete context of your life.
Trying not to fall behind, this week Rewind launched its own version of Tab, called Rewind Pendant. In 2 days, they had already got 3,177 pre-orders.
Just as Tab, Pendant is a wearable that captures what you say and hear, transcribes and stores it on your phone, and provides you access to a personalized AI assistant.
Rewind shares some interesting use cases for Pendant, like:
I’m excited to try one of these. I agree with Avi that this might be the future of human/computer interaction.
Carta counts 543 shutdown startups so far in 2023. Some stats:
Carta doesn’t believe the fundraising market will improve in the coming quarters.
Take this information into account when fundraising and spending the money.
💡 Struggling to validate your startup idea? I've created a course on how to use pre-sales to validate it.
📈 Struggling to achieve PMF? I've written an eBook about the exact strategies used by Slack, Intercom, and Airbnb to achieve it.
💰 Struggling to raise funding? I've curated lists of 2,100 accelerators and incubators and 1,000 VC firms.
📊 Looking to get in front of +40k startup founders? Sponsor Failory's newsletter.
📞 Looking for help with your startup? Book a one-hour-long consultancy call with me.
That's all of this week.
Cheers,
Nico
