Hey — It's Nico.

This newsletter contains:

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

This issue is brought to you by PartnerHero:

Successful brands invest in customer experience and smart founders use PartnerHero to up-level their CX without breaking the bank.

PartnerHero is a customer operations outsourcing company built for the needs of startups, from seed to scale. Let us help your brand build financial resilience and extend your operational runway without sacrificing quality with flexible, affordable, high-quality outsourced customer ops.

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What to read this week?

🏅 a16z’s 2023 Marketplace 100 report, featuring the top-performing marketplace companies.

🎙️ Balaji’s $1M Bitcoin prediction, explained by Anthony Pompliano in the MFM podcast.

🔍 A practical guide on how GPT-4 can save founders hours each week.

🧠 Brian Bourque discusses the 12 reasons why most marketing campaigns fail.

👂 The Nudge podcast tested 5 marketing principles to see if they really worked.

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What happened this week?

📉 Stripe slashes valuation by $45 billion in new $6.5 billion funding round.

👋 Twitch CEO Emmett Shear is stepping down 10 years after the acquisition.

🔪 Amazon confirms layoffs impacting 9,000 people at AWS, Twitch, and others.

🙌 Silicon Valley Bank files for Chapter 11 bankruptcy protection.

👀 Users are unhappy as Sidechat acquires rival Yik Yak.

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Failed startup story: 1520

1520, the New York-based instant grocery delivery startup, ceased operations in December 2021.

The company had raised a total of $7.8M in seed capital and despite creating profit on a per-order basis, it had to shut down due to high competition and high customer acquisition costs.

In between the lines:

In an interview with Grocery Dive, co-founder Maria Daniltceva highlighted that their company employed a “super-efficient” method for procuring and delivering groceries, which was advantageous due to their lower overhead costs compared to conventional grocery stores.

However, the company’s ambitions exceeded its ability to stay afloat as it looked to build a solid foundation. Business Insider reported that 1520 chose to discontinue operations despite being profitable on a per-order basis, partly due to the immense expenses associated with customer acquisition. The startup had ventured into a highly competitive market, confronting startups with substantially larger funding.

Lessons:

Although the company had a “super-efficient” approach to delivering groceries, they were unable to maintain lean enough operations to stay afloat. It’s crucial to continuously review key performance indicators to determine what works, even if you believe your method is bulletproof.

Another important insight is that customer acquisition costs tend to be higher in competitive markets. As mentioned earlier, the company faced competition from other startups with considerably more funding, enabling them to invest more in marketing efforts and cultivating customer loyalty.

1520 also aimed to differentiate itself by not imposing a minimum order requirement or charging a delivery fee. While this strategy might have attracted some customers, it could also have reduced the company's profit margins, making it harder to offset the high customer acquisition costs.

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Hot startup of the week: Medwing

​Medwing, a Berlin-based startup specializing in healthcare recruitment, recently raised €44M in a Series C funding round.

The platform focuses on matching hospitals and clinics with medical professionals such as nurses, elderly caregivers, pharmacists, midwives, and doctors, streamlining the hiring process in the healthcare industry.

In between the lines:

In an interview with Techcrunch, the CEO, Johannes Roggendor explained, "The current permanent recruiting and temporary staffing market in healthcare is broken and still very manual and analog.”

By offering an entirely digital workflow, the platform saves time and costs for the healthcare system while improving service levels for healthcare workers and employers.

Furthermore, Medwing differentiates itself from other players in the market by catering to both permanent and temporary placements and collaborating with traditional recruitment agencies looking to market their temporary staff on its platform.

Lessons learned:

The founders identified a gap in the market where recruitment processes were still largely manual and outdated. Often, digitizing traditional industries can lead to increased efficiency, reduced costs, and improved service levels for all parties involved.

It’s also important for businesses to have a differentiation strategy that sets them apart from their competitors. Medwing has successfully executed this by catering to both permanent and temporary placements in the healthcare sector and collaborating with traditional recruitment agencies seeking to promote their temporary staff on its platform.

This multi-faceted approach has enabled Medwing to address the needs of various stakeholders in the healthcare recruitment ecosystem, thus creating a unique value proposition for their business.

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What do you think of today's newsletter?

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

Cheers,

Nico