Hey — It's Nico.

This newsletter contains:

• 5 resources for founders.
• 5 startup news.
• 1 failed startup.
• 1 hot startup.

🔥 But before that, I partnered up with a few other newsletters to give away $1,000. You can sign in here.

This issue is brought to you by Drata:

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What to read this week?

✍️ Lessons from failed startup Observa, an intrusion detection tool backed by Y Combinator and that had raised $462,000.

📈 A case study of Triple Whale's successful product-led growth strategy.

👂 Cliff Obrecht, co-founder of Canva, shares the company's founding story on a 20VC podcast episode.

🔍 Brian Bourque’s strategy to understand and identify your unfair advantage.

📈 Over the past 6 week, Nat Eliason grew his TikTok from 0 to 55k followers. He wrote this article sharing how he did it.

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What happened this week?

🚀 OpenAI has launched a $20 monthly subscription for its premium version of the ChatGPT bot.

🆕 Instagram's co-founders are mounting a comeback with Artifact, a kind of TikTok for news.

📣 Elon Musk announced plans to share Twitter ad revenue with creators who purchase Twitter Blue.

⚔️ AI wars heat up - Google has released testing for Bard, a new AI rival for ChatGPT.

👀 FTX requested politicians and PACs the return of their donations, supposed to be over $84M.

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Failed startup story: Kite

Kite, an AI coding assistance software, ceased operations in November 2022. The company had raised roughly $21M.

The startup was created to assist programmers in coding and detecting errors, saving them a significant amount of time.

In between the lines:

In a postmortem blog post, the founder, Adam Smith, revealed the two reasons why the startup shut down:

1. The technology was not yet ready, and the AI was not advanced enough to deliver the company's vision of a 10x increase in developer productivity.
2. The company entered the market prematurely. The idea of a product that boosted code-writing speed by 18% wasn't seen as a must-have by engineering managers or individual developers.

Adam also mentions that the team explored pivoting the business to code search but decided against it due to exhaustion, after seven years of intense work.

Lessons learned:

Kite failure highlights the importance of timing in the success of a business venture. As seen with Kite, it can be difficult for a company to generate revenue if the technology or concept is not ready or mature enough for the market.

Although the product offered an improvement of 18% in code writing speed, it failed to resonate with its target audience, as they did not see enough value in it. This demonstrates the importance of focusing on finding product-market fit in the early stages.

Moreover, despite raising a substantial amount of funding, Kite was unable to develop a viable monetization strategy. These lessons emphasize the need for thorough market research and a well-crafted business strategy for a successful startup venture.

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Hot startup of the week: Peggy

​Peggy, a Toronto-based contemporary art marketplace, has raised $10M in a funding round led by Real Ventures, ZVC, Garage Capital, and others. The company intends to use the funds to drive growth and broaden its operations.

The company’s goal is to level the playing field in the art world by offering a peer-to-peer AI-powered platform for buying and selling art. This broadens the market for new collectors while ensuring that artists receive royalties from resales.

In between the lines:

Investor Ian Logan compared Peggy to Airbnb, stating that both companies prioritize community, trust, and payments.

Peggy has recognized the importance of making retail investors participate in a market; this drives competition and better prices for all.

Peggy also aims to provide educational content bridging the gap between the art world and the general public.

Lessons learned:

Peggy’s funding round shows the importance of embracing innovation - the company was able to incorporate AI technology for verification and has set itself apart from traditional art marketplaces.

Peggy also did a great job at recognizing a gap in the market. The company saw an opportunity to make art more accessible to a wider audience and capitalized on it.

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What do you think of today's newsletter?

• ​🔥 Great​
• ​😒 Meh​
• ​👎 Not interesting​

Cheers,

Nico