el producto #336 đ
Meta's new AI models, Temu's hypergrowth, How to run impactful experiments, Word of Mouth growth, Free-to-Paid metrics, Apple's risky bet: Vision Pro & more
Hey team,
Happy weekend and welcome to a new edition of el producto!
đ° The week in figures
$1B: Databricks grew revenue 60% last year to >$1B, and its data warehousing business surpassed $100M in ARR in April; the company is worth ~$30B but has paused plans for an IPO due to markets being shut down
$180M: Alphabet is discontinuing its Google Domains business and selling the assets, including 10M hosted domains, to Squarespace for ~$180M
$113M: Paris-based startup Mistral AI raised a $113M Seed round to build a large language models application; the pre-product company is valued at $260M post-money
$90M: Synthesia, an AI startup that helps businesses generate human-like AI video avatars, raised $90M at a $1B valuation
15%: Alphabet-backed fintech startup GoCardless is laying off 135 employees, or 15% of its workforce, in a bid to cut costs
15%: Grubhub will lay off 400 employees, 15% of headcount; CEO Howard Migdal announced the plan in a letter that cited rising operating costs
4.5%: An estimated 4.5% of startups that emerged from Y Combinator's accelerator program since 2010 have achieved unicorn status with over $1B valuation; Y Combinator's unicorn creation rate is higher than other top accelerators, such as Techstars, MassChallenge, 500 Global, and SOSV
đ° Whatâs going on
Uber plans to introduce full-length video ads across its ride-hailing, food delivery, and alcohol sales businesses; Uber's ad base grew 80% y/y, according to CEO Dara Khosrowshahi
Twitter CEO Linda Yaccarino laid out plans to diversify Twitter's business away from a reliance on digital ads with video, commerce, and creator partnerships, more video content, and payments
Meta released MusicGen, an open-source AI music generator that's described as "ChatGPT for audio;" trained on 20,000 hours of licensed music and more, MusicGen can create new songs from text or melody prompts; a demo is now available on Facebook's Hugging Face AI site
Meta unveiled Voicebox, an AI model that generates synthetic voices from text prompts; the model was trained on a diverse dataset of more than 50,000 hours of unfiltered speech from audiobooks, including in different languages
Alphabet is cautioning employees against sharing confidential information with AI chatbots, including its own Bard; AI language models often train on user data, potentially leading to the leakage of confidential information if the bots reproduce the data in future chats
Google launched an AI-powered virtual try-on tool; Google's try-on tool is based on a selection of images of human models; the tool can adapt images of clothing to show how it would look on each model
Google has refreshed its Google Lens app with additional features, including a tool for identifying skin conditions; using Google Lens, users can upload a picture to search for visual matches of skin conditions, such as a mole or rash, or physical issues like lip bumps, nail lines, or hair loss
Amazon is testing a feature that uses AI to summarize customer reviews on its shopping app, providing brief overviews of the pros and cons
In a shift from its earlier strategy of content exclusivity, Spotify is pivoting its $1B+ podcast business to provide tools for producers and generate ad revenue, similar to YouTube's model
Streamlabs launched a Podcast Editor for content creators, featuring AI-assisted tools for text-based editing, automatic transcript generation, and real-time translation in 30 languages
Canva launched a developer platform, which includes APIs and dev tools that provide access to its 135M MAUs; the company also announced a $50M fund to support app developers
Salesforce is launching AI Cloud, a suite of enterprise-ready AI tools; the solution integrates with various Salesforce applications and hosts AI models, including text generators from AWS, OpenAI, Anthropic, Cohere, and others
Bargain shopping app Temu passed rival Shein in sales; Temu, an e-commerce marketplace backed by Chinese company PDD Holdings Inc, had a 20% higher revenue in May than Shein;Temu has been the top iOS app for much of 2023, based on metrics including downloads, engagement, and retention; it had more global downloads in the six months after its launch than any other shopping app; overall, Amazon is still the top shopping app in the U.S.
đ Good reads
How to run experiments that don't suck. Peter Yang shares his conversation with Eric Metelka, Head of Product at Eppo, an experimentation platform empowering product teams to run reliable and impactful experiments. They spoke about:
When to run experiments
How to run experiments that donât suck
How to introduce experimentation to your company
How to grow Word of Mouth? By Elena Verna. WOM is a coveted growth engine for many businesses that involves users recommending the product to others via hallway conversations, social media, or email/slack/sms exchanges
Measuring WOM is tricky, but the WOM Coefficient and Net Promoter Score (NPS) are good proxies to track the rate that active users generate new users via word of mouth
To scale the WOM loop, we need to understand the psychological triggers behind WOM recommendations, such as social identity and self-presentation, and intrinsic motivation Love marks are a powerful growth tactic to drive WOM referrals: invoking human emotion from the product interaction is the key to successful love marks
Good "Free to Paid" metrics for B2C / B2B / Enterprise, by Leah Tharin. Free-to-paid conversion rates are important for businesses to identify opportunities and product success
Conversion rates vary depending on the segment of the business, with B2C having a 0.1% - 1% conversion rate, B2B having a 2% - 7% conversion rate, and Enterprise having a 20% conversion rate.
The 'free to paid' ratio is a rough indicator that sounds good on podcasts, but not very actionable. Retention is the main predictor of a business's efficiency, and activation rate is a better leading indicator of retention
The Vision Pro will be remembered as a Neanderthal, an evolutionary dead end. Scott Galloway shares an interesting reflection on why the Vision Pro is a technical achievement, but it will likely be Apple's first major commercial failure of the century
Betting against a first-generation Apple product is a bad trade, but the critical question is whether the Vision Pro has the genes for success: Apple's strategy is to start with a product that's more an elegant proof-of-concept than a prime-time hit
Thatâs all for today! Let me know what you think by replying back to this email or commenting on Substack
Angel