el producto #391 š
FOBO: The fear of a better option, Meta explores AI for VR & AR, Understanding the importance of churn, Revolut growth, Improving performance reviews, GenAI & network effects & more
Hey friends,
Happy weekend and welcome to a new edition of el producto!
š° The week in figures
$2.3B: RevolutĀ announcedĀ impressive 2023 growth and revenue numbers, with Ā£1.8B ($2.3B) in annual revenues, that swung the company from a loss to a pre-tax profit of Ā£438M. Other highlights:
A 46% jump in customers, with 12M new customers bringing the companyās total users to 38M
A 59% increase in card and interchange fees
Ā£395M in revenue driven by the companyās FX fees and new wealth platform
$450M: Runway, the best-fundedĀ AI videoĀ startup ($237MĀ raised), isĀ in talks to raiseĀ $450MĀ at a valuation ofĀ ~$4b. It plans to use the funds to further scale its efforts inĀ multimodal AI
$200M: AI-powered software coding solutions startup Magic is looking toĀ triple its valuation to $1.5BĀ in the upcoming $200M funding round. Magic aims to develop AI capable of designing and writing entire software applications without human intervention
175M: Threads is celebrating its one year anniversary with more thanĀ 175M MAU
$140M: Japanese HR software companyĀ SmartHRĀ has raised $140M Series E. The company last raised $143M in 2021 at a post-money valuation of $1.45B. SmartHR said that it crossed the $100M ARR threshold this February
8%: AI data centres could useĀ 8%Ā of US power by 2030
š° Whatās going on
YouTubeĀ hasĀ released some experimental new featuresĀ to Premium users including a button which skips you directly to the most popular part of a video, the ability to watch Shorts in in-picture mode and a brand new watch page design. YouTubeās Product Manager Dave Wu says the features are all still experimental and user feedback will be closely monitored
GoogleĀ has used AI toĀ addĀ 110 new languages to Google Translate, including Cantonese, NKo and Tamazight
PerplexityĀ hasĀ revealedĀ the next iteration of its Pro Search product. The new version includes features like multi-step reasoning, advanced math calculation and programming capabilities. Perplexity says the new features should help knowledge workers with tasks like market research.Ā See example of it in action here
Figmaās CEO has confirmed it isĀ ditchingĀ its new AI tool after criticism that it copied Appleās designs
OpenAI hasĀ cut off accessĀ to its APIs in China. The last step in a slow process of cutting off the countryās access to U.S.-based ML tools
MetaĀ plans to integrate generative AI into VR, AR, and mixed reality games on its Horizon metaverse platformĀ to create varied gameplay experiences and non-deterministic paths.Ā The initiative will involve developing or partnering with creators to build AI-powered tools that enhance game development and speed up time-to-market
noplace, a new social media app designed for Gen Z, hasĀ topped the App Store after launching publicly from invite-only mode.Ā It offers customizable profiles with color themes, interest tags called "stars," and a "top 10 friends" section reminiscent of early Myspace. Developed by a global team of 7, noplace raised $15M in Series A1 funding at a $75M pre-money valuation
SnapchatĀ isĀ rolling out a new featureĀ to Snapchat Plus subscribers that will allow users to design their own virtual house. The house is visible on Snapās Map and can be shared with family and friends. Itās available at no extra cost for Plus subscribers at the moment but could this evolve into something to rival Roblox with in-app purchases?
Walmart-owned Indian e-commerce giantĀ FlipkartĀ startedĀ quietly rolling outĀ its own payments app, named Super.money, as it continues to expand its fintech footprint
š Good reads
Is there a route to Super-app-like positions in Enterprise AI? Choudary has aĀ new pieceĀ that explores patterns for existing SaaS players to achieve dominance in an otherwise ultra-fragmented space.Ā āHow the application landscape will look (given the impacts of GenAI),ā is the question of the moment in the market. Choudary believes that certain types of players are well suited to potentially extend their influence and create a āsuper appā experience, and they need to have some key characteristics
Visualizing the importance of churn & expansion, by Elena Verna. Even a small improvement in churn rate can result in significant revenue gains. Cohort-based visualization can show fluctuating churn but steady revenue growth: revenue from cohorts can form a 'smile' shape over time, indicating sustainable growth
FOBO: The Fear of a Better Option, by Anne-Laure Le Cunff. The surest sign that youāre suffering from FOBO is when you keep stretching out the decision-making process, trying to overly optimize your choice instead of going for a satisfactory option. While itās perfectly normal to experience analysis paralysis when on the verge of making an important decision, whether personal or professional, in most cases FOBO is about choices that wonāt have a huge impact. I often like to think of Amazonās ātwo-way door / one-way doorā analogy, encouraging quick decision-making whenever the effects are easily reversible
Improving Performance Reviews. āPerformance reviews are like capitalism. Lots of problems but no one has invented a better system yet.ā The typical review process is annual or bi-annual, takes too long to complete, and is coupled with promotion and career advancement. It is lumpy and full of recency bias, is infrequent, and looks backwards more than forwards. Adam Fishman shares good advice to improve this
GenAI and Network Effects. Sameer SinghĀ weighs inĀ on Gen AI and reflects on how Network Effects could be generated as a strategy for defensibility in the Gen AI space.Ā Singh advocates for AI applications to transition to an āAI 2.0 eraā where defensibility becomes essential. According to him, applications need to have an āAI-enabled multiplayer interaction which involves a lot more than AI-generated output created by another userā
Thatās all for this week. As usual, feel free to reach out and share your thoughts by replying back to this email or commenting on Substack
Thanks for your support!
Angel