Hey — It's Nico.

This newsletter contains:

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

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What to read this week?

🤯 Founder writes about how he got to prison after fundraising difficulties.

🔍 a16z shares its 16 principles for securing capital in a challenging market.

🚀 Samantha Leal on how to select the right growth driver for your business.

🧠 Discussion on Gen Z Behavior and three generational shifts impacting technology and culture.

✍️ The Marketing Against the Grain pod discusses an A.I. marketing strategy to grow your business.

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What happened this week?

📉 Chegg's shares dropped nearly 50% as customers opt for ChatGPT over its paid study tools.

👎 Shopify is cutting 20% of its staff and selling the logistics arm of its business.

👀 Slack’s New CEO plans to bring new Generative AI features to the platform.

💰 Mayfield Fund raised $955M across two venture capital funds.

🙌 Microsoft Bing launches to the public, offering web browsing capabilities. Try it out here.

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Failed startup: 8tracks

8tracks, a music streaming platform, ceased operations in 2019 after an 11-year run. The company had raised nearly $7.5M from investors such as Andreessen Horowitz and Uncork Capital.

Despite its early success, the company was unable to compete with larger players like Spotify, Apple, Amazon, and Google/YouTube.

In Between the Lines:

8tracks had a unique value proposition of crowd-curated music that allowed for activity- and mood-based listening. However, 8tracks lost its competitive edge when Spotify improved its offering and addressed listener needs for music discovery.

In a blog post, the founder wrote that the startup failed to innovate, differentiate itself, and keep up with market trends, leading to declining audience and revenue.

The company was also unable to raise sufficient funding to invest in product development, hire or retain the right people to drive innovation and stay afloat.

Lessons Learned:

8tracks’ failure highlights the importance of innovating and keeping up with market trends. Innovation is a key driver of success for startups, especially in the tech industry. In today's rapidly changing business landscape, businesses must constantly innovate to stay ahead of the competition and meet the ever-changing needs of their customers.

The founder of 8tracks believed that their product was unique enough to compete. However, the market trend had changed, ultimately leading to 8tracks losing its audience.

Moreover, their failure highlights the importance of hiring and retaining people to drive product innovation in your business.

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Hot startup: PLEZi Nutrition

​PLEZi Nutrition is a startup co-founded by former first lady Michelle Obama to address childhood obesity in the United States.

They raised an undisclosed amount, with Juggernaut Capital Partners, a middle-market private equity investor in consumer sectors, being one of their main investors.

The company aims to provide a healthier, tasty, and affordable alternative to processed and ready-to-eat foods high in added sugars, a leading cause of obesity.

In Between the Lines:

PLEZi's mission is to help raise healthier children by making nutritious food choices more accessible and affordable. The company aims to inspire change within the food industry and challenge existing practices contributing to the obesity crisis.

The startup's use of alternative sweeteners, such as stevia leaf extract and monk fruit extract in their fruit drinks, aims to gradually reduce children's reliance on sugar and adjust their palates to crave less sugar overall.

They will also create an educational platform to inform families about their products and optimal choices for children's health.

Lessons Learned:

A recurring theme in recently funded startups is disrupting traditional industries with emerging consumer trends. Last week, HIVED targeted the parcel-delivery sector, addressing poor customer service and the need for eco-friendly transportation. Similarly, PLEZi taps into the growing demand for healthy eating and conscious consumption, particularly for children.

Startups can create a positive impact by challenging established practices and advocating for innovation. This can position them as thought leaders, creating an environment where companies strive to improve their offerings and processes, benefiting consumers and the industry as a whole.

Furthermore, a standout aspect of PLEZi's approach is its focus on consumer education. By informing consumers about their product's benefits, issues it addresses, or value it provides, they will build trust, credibility, and brand loyalty.

Startups can create informative content, host workshops, or provide resources related to their industry or products.

Focusing on consumer education allows startups to connect with their audience, create informed communities, and drive long-term success.

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What do you think of today's newsletter?

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• ​😒 Meh​
• ​👎 Not interesting​

Cheers,

Nico