Hey — It's Nico.

This newsletter contains:

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

Reminder: Next Wednesday (April 26) at 5.00 pm CET, I'm hosting a free masterclass going over the SEO strategy startups like Zapier, Shopify, and Gusto are using.

If you’re interested in acquiring customers through SEO, save your spot with one click.

This issue is brought to you by Bill:

It’s essential for small businesses to take practical steps to reduce the effects of inflation, short staffing, and other hurdles.

In BILL’s guide, Solving Business Challenges of 2023 with Automation, you’ll learn how automation can help your business minimize the impact of recent challenges.

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What to read this week?

👀 Igor shares his lessons on launching a Chrome extension, receiving 1k pre-orders, and selling.

✍️ Rad shares his lessons as a first-time CEO.

🤖 Here are 10 threads to get you up to date with AutoGPT.

💯 Michael Houck discusses how much founders should pay themselves.

👂 The All In podcast crew discuss AutoGPT’s potential, AI regulation, and more.

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What happened this week?

👻 FTX has recovered $7.3 billion and plans to bring back the exchange.

🚀 Amazon enters the AI race by launching Bedrock, a service to build generative AI models.

💰 Arthur Ventures raise $470M for early-stage software companies.

👾 Elon plans to launch x.AI to compete with ChatGPT.

😮 Former employees at SpaceX want to build a spacecraft startup powered by moon water.

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Failed startup story: Hollar

Hollar, an online store that aimed to bring dollar-store-like bargains on branded products to customers, ceased operations in 2020.

The company had raised over $75M in total funding to support its operations.

In Between the Lines:

Despite having funding, Hollar ultimately failed to establish a sustainable business model. One of the major flaws in Hollar's approach was the assumption that people would buy in bulk to alleviate the startup's shipping costs.

This model did not pan out and affected the company's economics. Hollar's customers did not buy multiple products, leading to an inability to cover the cost of shipping.

Lessons Learned:

A key takeaway from this failed startup is that market research is critical in developing a successful business model. Without adequate market research, startups risk creating a business model based on assumptions rather than factual data.

This is reportedly what happened with Hollar. They created a business model on the assumption that customers would buy multiple items due to their low prices.

While this strategy could have worked, it did not provide much room for error in case customer behavior did not align with expectations. Moreover, this assumption limited Hollar's ability to pivot or adapt its business model in response to changing market conditions.

Creating a business model based on a single assumption or expectation can be risky, especially in a highly competitive and constantly evolving industry like e-commerce.

Startups must conduct comprehensive market research to understand customer behavior, preferences, and demand. By doing so, you can create a sustainable business model with room for experimentation and pivoting and be better equipped to compete and succeed in the long run.

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Hot startup of the week: Yonder

​Yonder, a UK-based credit card rewards startup targetting millennials and Gen Z consumers, has secured £62.5M in a Series A round to expand operations. The funding round included prominent investors, resulting in a post-money valuation of over £70 million.

The startup was founded by Tim Chong, Theso Jivajirajah, and Harry Jell, who noticed a gap in the market for a credit card that could support young professionals in reaching their financial goals.

In Between the Lines:

Yonder distinguishes itself by blending the standard credit card purchasing model with a point-based rewards program for unique UK experiences.

The founders identified that many traditional financial institutions were disregarding customers with non-traditional sources of income, such as freelancers, gig workers, and students. They also noticed that most credit cards offered rewards that did not align with the lifestyle choices of their intended audience.

The startup is often described as a blend of a travel experience company and a credit card, offering a unique value proposition in the market. Yonder has partnered with some of the UK's best restaurants, bars, and venues. These partners offer exclusive rewards and experiences based on Yonder’s customer feedback and research.

Lessons Learned:

Yonder recognized that traditional financial institutions often overlooked customers with non-traditional sources of income. By addressing the needs of a specific audience, Yonder was able to tap into a market that competitors had largely ignored. Startups should consider focusing on overlooked market segments to create a unique value proposition and gain a competitive advantage.

Moreover, Yonder understood that the rewards offered by most credit cards did not align with the lifestyle choices of their target audience. By partnering with popular restaurants, bars, and venues in the UK, Yonder tailored its rewards program to better resonate with its customers.

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What do you think of today's newsletter?

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Cheers,

Nico