October 5, 2023 | Read Online​

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Hey — It's Nico.

543 startups have shut down in 2023. Every Thursday, I'll help you avoid failure.

Here's what I got today:

• 🔗 Weekly Picks
• 📃 Story: FrontRow’s Collapse
• 📈 Trend: AI Life Assistant
• 📊 Chart: Startups Shutdowns in 2023

This is brought to you by PartnerHero, which helps startups scale with highly-trained, on-brand CX teams.

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🔗 Weekly Picks

16 lessons from bootstrapping Kinsta from $0 to 7 figures (Link).

NFX launches an AI startup advisor chatbot (Link).

Zlappo’s journey from 0 to $30k/mo to 0 (Link).

Greg Isenberg shares 6 methods for finding startup ideas (Link).

How to find ideal customer profiles for B2B businesses (Link).

AC Ventures + Stripe launch playbook on GTM strategies for startups (Link).

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‍📃 Story: FrontRow’s Collapse

​Read the Story →​

After 4 years, $17M raised, and 2M users, the Indian-based Masterclass, FrontRow, has shut down.

FrontRow was a hobby-learning platform that offered courses in genres such as cricket, music, and comedy, taught by Indian celebrities.

This week, one of the co-founders shared the startup’s journey and lessons from its demise.

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The Rise

In early 2020, FrontRow raised a $3M Seed round. Over the following months, everything went well: users loved it, VCs wanted to invest, and the press covered them.

At $1M in ARR, growth plateaued. Users were not sticking to the platform. They kept adding features, but nothing worked.

Then, a pivot idea: focus on cohort-based courses. It was a hit. They started growing fast again, reaching $4M in ARR and raising a $14M Series A round.

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The Fall

However, there was a problem with the model: they had a -250% contribution margin. Growth solved this, but at some point, it started to plateau again.

They spent months working on their unit economics and got to break even at $1.5M ARR. But they didn’t feel like having PMF anymore.

With ≈15 months of runaway, in October 2022, they had to let go 90% of the team. Over the following 9 months, they worked on two other products but eventually decided they were not the path they wanted to follow.

After 4 years of starting, in July 2023, FrontRow shut down.

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Lessons

1) Believe in the market: Only build a business if you’re sure you want to spend at least 5 years in that market.

2) Choose what matters and ignore the rest: Focus on how well you believe your business is working. You realize when you have PMF.

3) Find truth-tellers: Find a small set of people who keep you honest and whose opinions you always listen to.

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📈 Trend: AI Life Assistant

​Watch the Video →​

This week, 20-year-old founder Avi Schiffmann launched the pre-order of Tab, a wearable personal AI assistant.

Avi is best known for creating a COVID dashboard and an Airbnb-like platform for Ukraine refugees.

Until recently, it was possible to use tools like Rewind to provide an AI context on everything you’d do on a computer.

Tab goes one step further: it listens to all of your conversations, allowing you to talk with an AI assistant that has the complete context of your life.

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Rewind Pendant

Trying not to fall behind, this week Rewind launched its own version of Tab, called Rewind Pendant. In 2 days, they had already got 3,177 pre-orders.

Just as Tab, Pendant is a wearable that captures what you say and hear, transcribes and stores it on your phone, and provides you access to a personalized AI assistant.

Rewind shares some interesting use cases for Pendant, like:

1. Share summaries with your co-workers from the all-day conference you assisted.
2. Automatically generate a to-do list when you verbally commit to doing something.
3. Talk to yourself to take notes on ideas and thoughts.
4. Get insights on your life: When does your voice sound more excited? What are your common filler words?

I’m excited to try one of these. I agree with Avi that this might be the future of human/computer interaction.

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📊 Chart: Startups Shutdowns in 2023

​Link to Post →​

​Carta counts 543 shutdown startups so far in 2023. Some stats:

• Around 50% of the startups were VC-backed.
• 90% of those that had raised were either Seed or Series A.
• 34 startups that have raised a Series B or later have shut down.
• 87 startups that raised more than $10M have shut down.

Carta doesn’t believe the fundraising market will improve in the coming quarters.

Take this information into account when fundraising and spending the money.

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❓ Looking For More?

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💰 Struggling to raise funding? I've curated lists of 2,100 accelerators and incubators and 1,000 VC firms.

📊 Looking to get in front of +40k startup founders? Sponsor Failory's newsletter.​

📞 Looking for help with your startup? Book a one-hour-long consultancy call with me.

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That's all of this week.

Cheers,

Nico