Hey — It's Nico.

This newsletter contains:

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

This week's must-read: How Nathan Barry Built a $30 Million Software Company.

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What to read this week?

💵 How Nathan Barry built a $30M SaaS.

🙌 A case study on how an Indie Hacker bootstrapped 6 products to $35K MRR.

📈 Jason Yeh explains how to capture value from your investors.

💡 A thread explaining Noah Kagan’s growth hacks and why they work.

📖 Ben Evans writes an essay on AI and the automation of work.

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What happened this week?

💰 Inflection AI, the startup behind Chatbot Pi, raises $1.3B.

👀 Executives from major European companies have signed an open letter urging the EU to rethink its plans to regulate AI.

👎 Productivity software startup ClickUp cuts 10% of its workforce.

⚽️ Gen Z Sports App Buzzer shuts down.

🤖 Tiny acquires software engineering firm HappyFunCorp for $30M.

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Failed startup story: Lantern

Lantern, a San Francisco-based mental health startup that developed an app allowing users to complete self-evaluation assessments and engage in daily mental health exercises, ceased operations in 2018.

The app, which was priced at approximately $50/month, also offered the services of behavioral change professionals as coaches.

In 2016, Lantern raised $17M in a Series A funding round led by the University of Pittsburgh Medical Center, along with participation from other investors, including Mayfield Fund, SoftTech Venture Capital, and Stanford University.

In Between the Lines:

Lantern faced several challenges that led to the folding of its operations. Initially, Lantern targeted the direct-to-consumer and employer markets. However, it made a significant pivot by trying to align its services with traditional healthcare insurance companies.

While the logic behind this pivot is understandable, the startup underestimated the time it would take to achieve sustainable revenue in the slow-moving healthcare sector. A post on the company’s website highlighted that “Healthcare moves very slowly, and we made the mistake of misjudging the time it would take to achieve sustainable revenue through this approach.”

This miscalculation led to Lantern's downfall, despite its promising beginnings and substantial capital backing.

Lessons Learned:

Lantern's experience offers important insights for startups navigating market expansion.

When leveraging existing strengths to expand or pivot into a new market, it is essential to consider industry dynamics. If you’re entering a new market, particularly one that is heavily regulated, like healthcare, it is critical to have an in-depth understanding of industry peculiarities.

Moreover, startups should not overlook the importance of preserving and capitalizing on the product-market fit they have already achieved in their existing market.

The idea of expansion or pivoting into a new market can be a great strategy for potential growth, but they demand careful consideration and strategic planning, particularly when a startup has already gained traction in a certain market.

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Hot startup of the week: Slang.ai

​Slang.ai, a New-York based AI phone concierge startup founded by Alex Sambvani and Gabriel Duncan, successfully raised $20M in funding to address the issue of an overwhelming amount of incoming calls faced by restaurants.

Leveraging their experience as data scientists at Spotify, the founders developed a platform that automatically answers calls, handles inquiries, and manages reservations for businesses.

In Between the Lines:

What sets Slang.ai apart from traditional call-handling systems is its utilization of AI to simulate human-like interactions. The platform goes beyond simply answering calls; it acts as a reliable team member that can provide accurate responses, modify or take reservations, and relay important information to businesses.

Slang.ai's integration with popular reservation platforms such as OpenTable and Resy further enhances its functionality and allows for seamless reservation management.

Lesson Learned:

An important lesson we can take from Slang.ai’s success is that problems in non-technologically driven businesses can present great opportunities. Jobs that involve repetitive tasks or manual processes, such as receptionist duties, often have the potential to be automated using AI.

By identifying these universal pain points and applying innovative technologies, startups can create valuable solutions that have broad applications, regardless of the industry. This highlights the importance of recognizing the potential for technology to streamline processes and improve efficiency in various sectors.

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What do you think of today's newsletter?

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• ​😒 Meh​
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Cheers,

Nico