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: The 3 Newest Companies on YC’s Top Revenue List and What They’re Doing So Right.

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What to read this week?

✍️ Y Combinator interviews top-revenue companies on their success.

🙌 a16z on why customer success is broken and how to fix it.

🧠 PostHog’s founder on mastering the levels of Product-Market Fit.

💯 Romeen Sheth explains the 5 stages of business growth.

👂 The MFM podcast talks about 13 businesses making +$1M a year with 0 employees.

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What happened this week?

💵 Sapphire Ventures announces plans to invest over $1B in enterprise AI startups.

🏋️‍♂️ Smart fitness startup, EGYM, raises $225M.

💰 Spotify founder Daniel Ek’s Health startup raises $65M.

☢️ Sam Altman is taking a Nuclear-Energy startup public.

👎 FrontRow, a hobby learning platform featuring celebrities, shuts down.

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Failed startup story: Fieldbook

Fieldbook, a San Fransisco-based database creation tool SaaS startup that helped businesses organize their data by providing a hybrid solution between a spreadsheet and a database, shut down in 2018.

The startup aimed to offer businesses the ease of use of a spreadsheet while providing robust data structuring capabilities.

Launched in 2013, Fieldbook raised $2.9M across various funding rounds.

In Between the Lines:

Fieldbook faced challenges with establishing product-market fit. The startup initially chose a freemium, self-service model, which requires a smooth customer funnel and efficient onboarding. However, the complex nature of Fieldbook's product made it difficult for users to grasp easily compared to its competitors.

In their pursuit of market traction, Fieldbook pushed for an aggressive growth strategy and later attempted to simplify the product's complexity, but unfortunately, this failed. This limited the potential customer adoption, as there was too much friction.

In a blog post, the former CEO mentioned: “In contrast to the utter simplicity of Slack (chat rooms), Trello (a board of cards) or Dropbox (literally just a folder), Fieldbook required people to learn a new paradigm in order to fulfill the promise that had hooked them in.”

Lessons Learned:

Fieldbook’s experience underlines the importance of finding a solid product-market fit before pushing for growth. Startups need to understand the complexities of their products and how these may affect their go-to-market strategy, including customer acquisition and onboarding.

A complex product might not be the best fit for a freemium model, and a more hands-on, premium strategy might be more effective. If a company is offering a freemium service, the barrier to entry for users needs to be as low as possible.

In general, freemium models rely on a broad user base, hoping a certain percentage will find enough value to upgrade to paid services. This requires the initial user experience to be seamless, intuitive, and instantly beneficial.

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Hot startup of the week: Dougs

​Dougs, a French-based startup accounting startup, has successfully raised $27M in funding.

The startup created an online platform to simplify financial management procedures for small and medium-sized businesses.

This funding came from Expedition Growth Capital, a venture capital firm that recognizes Dougs' consistent profitability and potential for future growth.

In Between the Lines:

Dougs stands out by not only offering traditional accounting tasks but also providing additional services such as expense management, invoice handling, and even assistance in the incorporation process.

A noteworthy aspect of Doug is that they were bootstrapped for 8 years before they needed external funding. They will use the funds to expand the team and continue its growth plans into additional international markets.

Lessons Learned:

In the startup world, securing funding is often seen as the best strategy, largely because it is a popular belief that it's the best path to rapid growth. However, Dougs’ story serves as a reminder that raising capital is not always the immediate solution or even necessary for every startup.

Each business has a unique model with different goals and circumstances. In cases where the business model allows, bootstrapping might be the optimal initial strategy.

When the decision to fundraise is made, it should be approached strategically. You need to understand the rationale behind needing the capital, have a clear plan for its allocation, and understand its implications.

Ideally, the raised funds should be used to accelerate growth, not just maintain operations, as demonstrated by Dougs.

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Cheers,

Nico