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.
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.
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.
📊 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.
90% of startups fail. Learn how to not to with our weekly guides and stories. Join 40,000+ founders.
90% of startups fail. Learn how not to with our weekly guides and stories. Join +40,000 other startup founders!
An all-in-one newsletter for startup founders, ruled by one philosophy: there's more to learn from failures than from successes.