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: Startup Experts Reveal Their Favorite Pivot Stories​

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What to read this week?

🗣Y Combinator Partners talk about their favorite stories of entrepreneurs who pivoted and went on to build game-changing companies.

📈 NFX explains how the next unicorn will be a 3 person startup.

🚀 Brian O’Connor shares 5 proven steps to avoid entering the wrong market.

💸 How Cloudbeds, a SaaS startup, went from an idea to raising $150M.

🙌 Crunchbase discusses how the decrease in startup creation presents both challenges and opportunities for entrepreneurs.

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What happened this week?

📈 Dutch Neo Bank Bunq has raised $111M at a valuation of $1.8 Billion.

📣 Mayfield launches new $250M fund for AI-specific seed stage startups.

📉 Stoa lays off 80% of its workforce after raising $300M.

👎 Urban farming startup Square Roots shuts down most of its locations.

🤯 Elon Musk rebrands Twitter as “X”.

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Failed startup story: Blin.gy

Blin.gy, a US-based AR app that allowed users to virtually insert themselves into their favorite music videos, ceased operations in 2017.

The startup managed to raise a total of $10M since its inception in 2014. Despite a marketing partnership with Ellen DeGeneres and unique greenscreen technology, the company had to shut down after a potential acquisition fell through.

In Between the Lines:

Blin.gy's ability to work with unstabilized mobile cameras made it stand out from other background effects like Apple's Photo Booths. The team's proprietary algorithm integrated old-school chroma keying techniques with modern technologies like object class detection, edge detection, color manipulation, and various computer vision technologies.

Several elements contributed to Blin.gy's demise. Mainly, the company struggled with user retention, a vital component for the success of any product. Additionally, Blin.gy found itself in a difficult financial situation, which led them to approach potential investors with an unfinished product and less-than-ideal user retention metrics.

Lessons Learned:

David Hyman, Blin.gy's co-founder and CEO, reflected on the company's journey in a Medium post and distilled a couple of key lessons from their closure.

Hyman stressed the necessity of having a product that keeps users coming back before considering giving equity to VCs. He also cautioned against getting caught up in the excitement of initial user download numbers. Instead, the true measure of success lies in creating a product compelling enough to ensure ongoing user engagement and retention.

Moreover, Hyman highlights that during their meetings with VCs, they consistently faced a crucial question that they were unable to satisfactorily answer. VCs would often tell them, “Really great technology and vision. But how does this become a platform?”

The consistent feedback from the VCs highlights the importance they place on a company's potential to scale. It's not enough for a tool or app to be novel or innovative - it needs to demonstrate potential for widespread adoption.

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Hot startup of the week: Kasha

​Kasha, an African-based health-tech startup founded in 2016 and based in Rwanda, has recently secured a Series B investment of $21M.

With seed funding of $1.5M and subsequent Series A of $3.6M, the platform has steadily grown, catering to women's health needs and offering a broad range of products, from contraceptives and personal care items to staple goods.

In Between the Lines:

Kasha stands out in the market due to its unique approach of not only providing a digital retail platform but also focusing on the last-mile distribution of health and household products.

The startup addresses a vital need in Africa's women's healthcare sector by challenging the stigma associated with women's health products and ensuring they are easily accessible.

Moreover, Kasha smartly adapted its business model to venture into the wholesale sector, catering to pharmacies, hospitals, and clinics besides individual customers, thereby increasing its market reach.

Lessons Learned:

Crafting a successful business often begins with a deep understanding of your customer persona. From the start, Kasha recognized women’s unique health needs and their role as decision-makers for health within households.

Startups aiming to emulate Kasha's success should begin by developing a comprehensive understanding of their target customer. What are their needs? What products or services are they currently lacking? Answering these questions can help create a product that not only meets an existing demand but also resonates with the customer on a deeper level.

Kasha's growth and expansion strategy also highlights the value of a gradual scaling approach. Rather than rushing into broad regional or global expansion, Kasha began in Rwanda and later expanded into Kenya only after securing their Series A round.

This phased growth allowed them to fully understand their initial market, fine-tune their business model, and demonstrate their potential to investors. This approach not only provides proof of concept but also helps mitigate risks associated with premature scaling.

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Cheers,

Nico