👀 Heartcore Insights
Discover more from Heartcore Insights
Hi there,
Welcome to the 104th 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!
A Note To Founders Re: Impact Of Artificial Intelligence (Haystack)
With every major technology platform shift, there are legacy companies disrupted, new opportunities for startups & scale-ups, as well as businesses that get caught flat-footed across the enterprise and consumer stack.
In recent years, there have been other promises of platform shifts - notably crypto and even AI previously. Mitchell Hashimoto, co-founder of Hashicorp, does a nice job laying out why this time could be different.
These are a few examples of ways AI could impact your current business:
Competition entering your category: expect to see new startups getting funded in your category that have an AI-native twist, bent, or functionality to them. Some will even have early access to different model architectures (see Harvey.ai in legal). Future potential investors evaluating your company, as well as customers looking at vendor options, will pay attention to these shifts.
Financing market: as noted, every major VC firm (in every nook & cranny) is focused on this. This can have an impact on your downstream capital raises. See from Sequoia, A16Z, and Greylock, among many others.
Incumbents getting smart: unlike previous platform shifts, large companies are not ignoring this space. Large companies like Salesforce, Databricks, and Stripe are actively thinking about how to incorporate AI across their product suites and even places where they may have been previously short-sighted.
Some companies are completely re-architecting their products: some mid to growth-stage companies are completely re-architecting and positioning around generative AI or foundation models. Some applications know their offering for end users can be supercharged with AI, and some infrastructure companies know they can be better suited by serving AI use cases. On the very early side, some pre-seed stage founders who were before in the wilderness looking for product-market fit with their original idea now using this wave and their freedom as an opportunity to build something entirely new with AI.
How does one quickly get smart on the space? Here are a few resources:
Hazy Research from Stanford
AI Platforms, Markets, & Open Source from Elad Gil
State of AI Report 2022 from Nathan Benaich
Lifetime Value: My most valuable retention KPIs (Lloyd Melnick)
Customer Lifetime Value (LTV) is the critical determinant of a company’s success (any company, from mobile games to retailers). Out of the three key components of LTV - monetization, virality, and retention - retention is the one most critical for success.
While the mathematical case for focusing on retention is incontrovertible, many companies have not perfected how to measure retention effectively. Most social game companies, among the most sophisticated users of analytics, rely on measuring retention by D1/D7/D30 retention. While this method is an acceptable (and sometimes powerful) way of tracking how new users are performing, even D30 retention only reflects the behavior of customers acquired in the last month. It does not show how well the game or company is retaining its existing customer base.
A metric that perfectly captures how well you are performing with your existing customers is the following: CURR (current user return rate). CURR is complemented by NURR (new user return rate) and RURR (returning user return rate).
CURR (current user return rate) is the most important KPI to track (or at least a tie with NPS). It shows how loyal your existing customers are; you should consider CURR the inverse of churn. If your CURR increases, it means you have improved your product’s appeal to existing players or customers, if CURR declines you have made your product worse. CURR is also an excellent way of looking at how your product is performing among different segments. To calculate CURR, you start with all the users who used your product between t-14 (14 days before today) and t-20 and who used the product between t-7 and t-13, what percentage returned to play between t-0 and t-6.
NURR (new user return rate) is a great metric for understanding how appealing your product is to users you have just acquired. A low NURR shows you have a bad initial experience (or a bad traffic source), turning off many users. To calculate NURR, take all the users who used the product for the first time between t-7 and t-13 and look at what percentage returned to your product between t-0 and t-6.
RURR (return user return rate) shows how many people who had churned and returned to your product stay active. It is a great way of measuring how well your product can capitalize on CRM and paid reactivation campaigns. If the number is low, you are doing a great job of bringing back but the product is still not compelling to these players. You can calculate RURR by taking all the users who were active at some point but did not use the product between t-14 and t-20, and did use the product between t-7 and t-13, what percentage returned to use the product between t-0 and t-6.
a16z State of Crypto 2023
Bytedance has a new app that just hit #1 on the U.S. Lifestyle charts
“I hate OKRs... and other thoughts about goal setting”
Grow or Die: A Framework for Turning Your Company Around Fast
The New Avengers: How AI is Giving Us Superpowers
How to use ChatGPT in your PM work
Scale a health tech business to $100 million ARR
A Quest for Accurate North Star Metrics
🇪🇺 Notable European early-stage rounds
Translucent, a UK-based provider of an accounting platform for finance issues of multi-entity businesses, raises £2.7M with LocalGlobe - link
Rodeo, a UK-based app that helps food delivery riders earn more, raises $5M with LocalGlobe/Seedcamp - link
Clue, a Germany-based female health application that tracks period and fertility cycles, raises $7M with Balderton/USV - link
Graneet, a France-based vertical SaaS for construction companies, raises $8.7M with Point9/Axeleo - link
LI.FI, a Germany-based multi-chain liquidity and data gateway, raises $17.5M with CoinFund/Superscrypt/Heartcore 🖤 - link
Parloa, a Germany-based conversational AI platform for automating omnichannel customer service, raises $21M with EQT - link
Effy, a France-based home energy renovation company, raises $22M with Felix Capital - link
🇺🇸 Notable US early-stage rounds
LALA, a US-based digital collectible marketplace allowing fans to own a piece of revenue streams from their favorite movies and TV shows, raises $3M with Seven Seven Six - link
Haven Energy, a US-based startup guiding homeowners through selecting, quoting, and financing a home battery system, raises $4.2M with Lerer Hippeau/Giant Ventures - link
Macro Oceans, a US-based seaweed biotechnology startup, raises $5M with Refactor/Lowercarbon - link
Turntable Live, a US-based collaborative music streaming service, raises $7M with Founders Fund - link
Langchain, a US-based large language model application development library, raises $10M with Benchmark - link
Oshi Health, a US-based virtual gastrointestinal care health tech, raises $30M with Bessemer/Flare/Frist - link
🔭 Notable later stage rounds
EigenLayer, a US-based restaking protocol platform, raises $50M with Blockchain Capital - link
Cybersyn, a US-based DaaS on a mission to enable a new generation of decision-makers by making the world's economic data transparent, raises $63M with Snowflake/Sequoia/Coatue - link
Ledger, a France-based startup providing high-end crypto wallets, raises $108M with Cathay/Korelya/True Ventures - link
Tonal, a US-based smart home gym, raises $130M with L Catterton/Kindred - link
🍭 Notable Exits
Acorns acquires GoHenry for an undisclosed amount. GoHenry is a UK-based startup focused on providing money management and financial education services to 6- to 18-year-olds - link
