💫 Heartcore Consumer Insights
Edition #91
Hi there,
Welcome to the 91rst edition of Heartcore Consumer Insights. Curated with 🖤 every two weeks by the Heartcore Team.
If you missed the past newsletters, you can catch up here. Now, let’s dive in!
Winning at B2C Subscription - Lenny Rachitsky
Learnings & patterns from founders and leaders at successful B2C subscription companies (Calm, Spotify, Noom, Duolingo, Grammarly).
Pattern #1: obsession with efficiency: the most common thread across every company was an obsession with efficiency - staying small, keeping costs down, and getting profitable. They all stayed lean until they found strong PMF and, in many cases, far beyond that. Nikhil Jhunjhnuwala (VP of Growth at Noom) mentions:
Pattern #2: strong alignment between product strategy and acquisition strategy: surviving in B2C is all about finding an efficient (aka cheap) growth channel. All of these teams found a way to grow very efficiently - either through word of mouth or highly optimized paid ads:
Pattern #3: a magical, sticky product through rapid iteration and endless optimization. The bar for a sticky consumer subscription app is high. People get bored and quickly look for the next shiny thing. Every one of these apps did something unique to keep people coming back. For Duolingo:
My Framework for Evaluating Early-Stage Consumer Companies - Gaby Goldberg
Simple four-part framework potentially helpful to assess consumer businesses:
Why do people come? What gets users on the platform? Can this be distilled down to a single sentence? Who is your (precise) customer, and what do they want? Related: Is Your Product a Vitamin or Painkiller?
Why do people stay? This question is all about user retention. In consumer businesses, frequency and time spent are key. What are the features or actions that receive the most user engagement? What are the switching costs? Is there lock-in? When looking at cohort retention, is the absolute size of the cohort growing? How does behavior change as cohorts grow? Do cohorts stabilize, and if so, when? Do newer cohorts perform the same, better, or worse than older ones? Related: What is good retention?
Why do people share? Is there a propensity to share the product or platform via social media or word of mouth? A key concept here is virality when a product spreads from one user to another through direct customer-to-customer contact.
Why do people pay? Consumer businesses typically fall under one of three categories: (a) Marketplaces: facilitating transactions between buyers and sellers, (b) Platforms: usually free UGC media/content platforms with indirect monetization (c) Products & Services: consumers pay for something the company produces. How will economics change over time? What drives differentiation — price, service, brand? Is it sustainable and defensible?
CashApp - bringing culture to finance
12 Great Copywriting Examples
How to Launch a Customer Referral Program in 6 Steps
How to retain your best customers
Curated growth flywheel
Virtual Beings: a new internet-native medium for storytelling
BlitzFail: How Not to Go Off the Rails
Why Crypto Gaming Is Not The Future
🇪🇺 Notable European early-stage Consumer rounds
Aumio, a Germany-based sleep & mindfulness app for kids, raises $3.2M with Partech - link
Lassie, a Sweden-based pet insurance company, raises $11.6M with Felix - link
Knowunity, a Germany-based digital learning platform, raises $12.8M with Redalpine/Stride/Project A - link
Bliq, a Germany-based startup empowering gig workers in the transport industry, raises $13.5M with NEA - link
🇺🇸 Notable US early-stage Consumer rounds
Pique, a US-based virtual sexual health clinic, raises $4M with Maveron - link
StartPlaying, a US-based platform allowing players to find tabletop role-playing games, raises $6.5M with a16z - link
Parcl, a US-based virtual real estate investing platform, raises $7.5M with Fifth Wall/FJ Labs - link
BubbleHouse, a US-based NFT social marketplace, raises $9M with Cassius - link
Highlight, a US-based no-code toolkit allowing anyone to create a Web 3 community with NFTs, raises $11M with Haun Ventures - link
Branch, a US-based web3 gaming studio, raises $12.5M with Polychain/Dragonfly - link
Locale, a US-based curated food delivery startup, raises $14M with a16z - link
Azra Games, a US-based play-and-earn role-playing games studio, raises $15M with a16z - link
Parallel Learning, a US-based special education assessment & tutoring startup, raises $20M with Tiger - link
Turquoise Health, a US-based startup helping to reduce the expense and complexity of healthcare, raises $20M with a16z/Bessemer/Tiger - link
Metatheory, a US-based studio developing Web3 games and virtual worlds, raises $24M with a16z - link
Arrived, a US-based startup providing rental home investment services, raises $25M with Forerunner - link
Legacy, a US-based digital fertility clinic for men, raises $25M with Bain Capital/FirstMark - link
🔭 Notable later stage Consumer rounds
Zolar, a Germany-based startup democratizing access to solar energy, raises $105M with Energy Impact Partners/GIC & Heartcore 🖤 - link
FINN, a Germany-based company offering monthly car subscriptions, raises $110M with Korelya/Keen Ventures & Heartcore 🖤 - link
Caribou, a US-based fintech helping consumers take control of their car payments, raises $115M with Goldman Sachs - link
🍭 Notable Consumer Exits
Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.
