Hi there,
Welcome to the 103rd edition of Heartcore Insights. Curated with 🖤 by the Heartcore Team.
If you missed the past newsletters, you can catch up here. Now, let’s dive in!
Competition: A Thread by Gokul Rajaram (Angel Investor @Figma, DocSend, Pipedrive, Poshmark)
Founders and CEOs don’t have a good way to think about competitors. Some ignore them, others obsess over them. Neither is optimal. The right way to evaluate competitors is through a customer lens.
Specifically, being obsessed with your customers’ problems will help you see early if a competitor is solving their problems better than you are. The biggest thing that matters with competition is if your customers are choosing or switching to a competitor over you.
If you see this happening, you need to root cause it with extreme urgency, figure out why your solution is falling short of your customer needs, and fix it.
Sometimes it might seem like customers aren’t switching you out and the competitor is an adjacent product. But the adjacency might be a wedge into a suite that will force you out in the future. Square Payments led to POS, Capital, Payroll, Invoices, and Marketing.
So it’s important to have a holistic view of customer problems. It’s also important to understand how customers make buying decisions and how various products work well together.
Square never thought of the core merchant problem as payment acceptance; the real problem was helping merchants grow their business, which meant accepting any form of payment, accessing working capital, hiring and paying employees, etc.
What matters about competitors is not how much they’ve raised or what their revenues are or who they’ve hired, but how well they solve customers’ problems, whether customers are choosing or switching to them, and whether they are strategically entrenched within the customer.
You cannot really develop this perspective on competitors without customer obsession - deeply understanding their problems and decision-making, not just at the product level but at the organizational level.
Research Twice, Build Once: How to Know Your Users as You Grow - Ryan Glasgow (Founder & CEO @Sprig)
While an Amplitude or Mixpanel account is often the first software purchased by a startup, these same startups often neglect to implement user research software or processes.
If knowing what users are doing within the product is so important, knowing the why is even more essential: It guides the follow-on decisions that make or break product experiences.
How does user research actually play out in practice? Regardless of the stage and size of the research team, the framework to incorporate user research across the product development lifecycle remains generally the same.
It starts with discovery research: which consists in identifying pain points before they become a problem. Or, if the product or feature has already launched, it can reveal issues that are preventing users from taking a desired action. Ryan worked with a popular real-estate tech company that noticed onboarding drop-off was much higher than expected on its “Get a Quote” page. The team had a few options to understand why this was the case: (a) conduct a variety of A/B tests, (b) take an educated guess, and (c) conduct user research. The first two options would take a few weeks to several months, and likely result in significant waste because only about 1 in 7 A/B tests results in a clear winner. By conducting user research with a few simple in-app surveys, the team learned that users were hesitant to provide their phone numbers so early in the quote process. When the phone number field was removed from the page, the conversion rate increased by 10% almost immediately.
Phase 2 is Concept testing. Let’s say, for example, that while researching the “Get a Quote” experience in the example above, the team finds out that obtaining a mortgage is confusing for users. The team comes up with some ideas to address the issue and lands on an interactive mortgage calculator as the solution. That might be the best option, but it will require significant engineering resources to build the feature. This is why it’s important to de-risk the project by creating several product mock-ups and testing them with users before starting to build.
Phase 3 is Usability testing: where participants are asked to “think aloud” as they complete tasks, explaining what questions, hesitations, or challenges they are having. For the mortgage calculator, test questions might include, “Can you easily adjust your down payment?” or “Select your rate to be 30-year fixed.”
Bonus: not all research is related to a specific, identifiable business problem, such as poor onboarding conversion or a dip in engagement. As companies set up and scale up research, it’s beneficial to continuously monitor the user experience to identify unknown problems that aren’t already on the product team’s radar. This type of research doesn’t need to take a long time or be complex. Adding simple in-product surveys on common pages that measure net promoter score (NPS) and customer satisfaction score (CSAT) can lead to some of the most important “aha moments” within a business.
Energy, the thriving vertical of climate tech
The Generative AI Revolution will Enable Anyone to Create Games
12 ways to develop better product intuition
User interview tips
The a16z Marketplace 100
Tracing apps that are now huge back to the very first Reddit post about them
🇪🇺 Notable European early-stage Consumer rounds
Deeploi, a Germany-based startup building an IT-as-a-Service platform, raises $3M with Cherry - link
Ampere.cloud, a Germany-based company building an operating system for renewable energy plants, raises $6M with Point9/Vireo - link
AG5, a Netherlands-based skills management software, raises $6M with Headline/Peak/Acadian - link
SunHero, a Germany-based startup delivering custom-built solar panel solutions, raises $10M with Planet A/Worwerk/Speedinvest - link
Mentorshow, a France-based online training platform offering video courses created and hosted by recognized experts, raises $15M with Left Lane/Educapital - link
CCP Games, an Iceland-based independent developer of massively multiplayer games, raises $40M with a16z/Bitkraft/Hasher - link
🇺🇸 Notable US early-stage Consumer rounds
Trala, a US-based tech-powered online music teacher, raises $8M with Seven Seven Six - link
Wingspan, a US-based platform for freelancers to manage income, benefits, and taxes, raises $14M with a16z/Distributed Ventures - link
Luma AI, a US-based startup on a mission to enable everyone to capture and experience the world in 3D, raises $20M with Amplify/General Catalyst - link
Workera, a US-based enterprise skill assessment and upskilling platform, raises $23.5M with Jump/NEA - link
Perplexity AI, a US-based company providing a conversational AI-powered answer engine, raises $25.6M with NEA - link
Bend Health, a US-based youth- and family-focused telebehavioral health company, raises $27M with Maveron - link
🔭 Notable late-stage Consumer rounds
Humane, a US-based company developing the next era of personal mobile computing driven by AI, raises $100M with Kindred/Tiger/Forerunner/Qualcomm - link
Character.ai, a US-based startup enabling the creation of fully-customizable and personalized AI companions with distinct personalities, raises $150M with a16z/SVA - link
Gravie, a US-based insurance company providing brokerage and insurance coverage services, raises $179M with General Atlantic/FirstMark/AXA - link
Adept.ai, a US-based startup training AI to use existing software and APIs, raises $350M with General Catalyst/Spark Capital/SVA - link
Rippling, a US-based HR management company offering an all-in-one platform to help manage HR and IT operations, raises $500M with Greenoaks - link
Stripe, an Ireland-based digital payments company, raises $6.5B with a16z/Founders Fund/General Catalyst - link
