Hi there,
Welcome to the 119th 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!
Notes on “The Illusion of Acceleration” - Jerry Neuman
The speed of adoption of new technologies is widely considered to get faster and faster with time. Jerry Neuman argues this is an illusion.
Cell phones, for example, benefitted in their early adoption phase from the existing user base of landline phones, to which the calling capabilities were agnostic. In contrast, a landline phone did not benefit from an existing installed base of other devices to call. It did, however, lay the groundwork for the fast adoption of cell phones.
It’s an example of how a fundamental innovation (the landline phone capabilities) is adopted slowly but readies the world from a step-change innovation of an already known utility with vastly different capabilities (as the cell phone came along).
Jerry explains the speedy adoption of cell phones relative to landline phones through the lens of the zeitgeist and the certainty of utility for its users of a new technology.
Given people draw on their past experience to judge new innovation, the cell phone benefitted from the mental model people had built out over time related to the value of a landline telephone. This familiarity helped people appreciate the added utility of the 'stacked' innovation that cell phones offered.
The flip side of drawing from experience, when judging new innovation, is that incrementalism will rarely be adopted swiftly, if at all. Too much sameness comes at the expense of perceived value considering the “cost” incurred from change. The same is true for completely new things (like the landline phone), where the value is objectively high but the understanding of it requires time.
At the same time, a high enough shock factor (on the basis of perceived novelty) may also be the very cause of fast adoption. Consider for example ChatGPT. While the zeitgeist might be defined by the new innovation, it’s axiomatic that it won't be the reason for adoption. High perceived utility and ease of adoption (or “time to fun”) can arguably be defined as the main drivers.
Jerry contrasts the speedy adoption of radios and TVs compared to PCs; they were all perceived to provide utility, but the required effort to draw benefit from the new technologies was judged to be materially higher for the PC than the two others. The associated learning curve compared to TV and radio slowed down the adoption of the PC.
As a rule of thumb, the farther away from the “fundamental” innovation (electricity, IT, landline phones), the faster the adoption of innovations that build upon the established path.
Innovations change society when they are adopted more broadly, not when they are adopted more quickly.
In the context of startups and entrepreneurship, Jerry concludes that truly groundbreaking innovations will unavoidably take longer to reach wide adoption.
There’s merit to the argument that technology that’s that easy can be rolled out and adopted quickly but rarely has intrinsic staying power — true innovation is littered with uncertainty, but at least it has the potential to truly change things.
How FIFA was outplayed by Electronic Arts - The Economist
What used to be known as FIFA (the video game), sells about 30 million copies a year and is one of the main profit drivers of its publisher, Electronic Arts (EA).
A year ago, for the first time, the same IP was released under the new name “EA Sports FC” following the expiry date and failed negotiations around the licensing deal between EA and FIFA.
A year in profits are up for EA. My read on the whole situation is that FIFA grossly overestimated its brand and importance as a gatekeeper. For EA, the agreement with FIFA reduced its ability to leverage valuable paths to get closer to the fans. Instead of relying on FIFA as a gatekeeper to football fans, a range of more creative, and for the fans, relevant, distribution channels were introduced and acted on.
For EA, abrupt change was undeniably for the better.
DO TOO MUCH, Alexandr Wang
Measuring the Moat, Michael Mauboussin and Dan Callahan
X Thread on scaling HubSpot from 0 to a $25bn market cap, Brian Halligan
The Disappearance of an Internet domain, Gareth Edwards
Burn the Playbooks, Packy McCormick
Reflections on Palantir, Nabeel Qureshi
2024 State of AI Report, Nathan Benaich
Silicon Valley, the new lobbying monster, The New Yorker
My Annual Letter: Relevance and Reinvention, Satya Nadella
🇪🇺 Notable European early-stage rounds
clock.bio, a UK-based health span biotech company, raises $5.3M with LocalGlobe - link
Revyze, a France-based social learning app for school kids, raises $6M with Speedinvest - link
Findable, a Norway-based startup automating documentation building using AI, raises €9M with Point Nine - link
dottxt, a France-based startup building an ecosystem and platform for interacting with LLMs, raises $11.9M with EQT - link
Pydantic, a UK-based startup building an observability platform, raises $12.5M with Sequoia/Partech - link
Tebi, a Netherlands-based startup developing an all-in-one operational platform, raises $20M with Index Ventures - link
🇺🇸 Notable US early-stage rounds
Agency, a B2B customer success startup, raises $12M with Sequoia - link
Valdera, an AI sourcing platform for chemicals and raw materials, raises $15M with Index Ventures - link
FlexFactor, a startup providing payment decline recovery solutions to eCommerce brands, raises $16.8M with Bessemer Ventures - link
Rogo, an enterprise-ready AI platform for investment banks and private equity investors, raises $18.5M with Khosla Ventures - link
Mstack Chemicals, a chemical manufacturing platform, raises $25M with Lightspeed - link
Numeric, an AI accounting automation platform, raises $28M with Menlo Ventures - link
Arda Therapeutics, a biotech startup developing therapies that target disease-causing cells, raises $43M with a16z - link
🔭 Notable later stage rounds
Imprint, a US-based innovative provider of co-branded credit cards, raises $75M with Khosla Ventures - link
Impulse Space, a US-based startup developing a line of orbital transfer vehicles, raises $150M with Founders Fund/DCVC - link
ZipHQ, a US-based intake and procurement orchestration platform, raises $190M with Bond/DST Global - link
Zepz, a UK-based international money transfer service group, raises $267M with Accel - link
Waymo, a US-based robotaxi service, raises $5.6B with Alphabet/a16z - link
OpenAI, a US-based startup behind ChatGPT, raises $6.6B with NVIDIA/Softbank - link
🖤 Heartcore News
Heartcore Capital is ranked in the top 9 VC funds in the world in the HEC Paris-Dow Jones Venture Capital Performance Ranking. We are proud of this achievement, a testament to the hard work of our founders and the unwavering support of our LPs. 🎉
Kudos to Likeminded 🖤 on their new partnership with Wellhub. 👏
Cheers to Blast 🖤 for hosting yet another phenomenal BLAST Premier Fall Final 2024 and congratulations to the champions 🇩🇰
Shoutout to GetYourGuide 🖤 for launching their Unlocked Fall 2024 release packed with streamlined, innovative updates. 👏🏼
Congratulations to Corti 🖤 on teaming up with BigHand to bring a revolutionary AI copilot tool to 40,000 healthcare workers across 76 NHS trusts. 🩺
Our Partner, Christian Jepsen is highlighted as one of the underrated European VCs. No limelight needed when the work speaks for itself! 😉
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