el producto #391 🚀
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!
🎰 The week in figures
$2.3B: Revolut announced impressive 2023 growth and revenue numbers, with £1.8B ($2.3B) in annual revenues, that swung the company from a loss to a pre-tax profit of £438M. Other highlights:
A 46% jump in customers, with 12M new customers bringing the company’s total users to 38M
A 59% increase in card and interchange fees
£395M in revenue driven by the company’s FX fees and new wealth platform
$450M: Runway, the best-funded AI video startup ($237M raised), is in talks to raise $450M at a valuation of ~$4b. It plans to use the funds to further scale its efforts in multimodal AI
$200M: AI-powered software coding solutions startup Magic is looking to triple its valuation to $1.5B 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 than 175M MAU
$140M: Japanese HR software company SmartHR 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 use 8% of US power by 2030
📰 What’s going on
YouTube has released some experimental new features 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. YouTube’s Product Manager Dave Wu says the features are all still experimental and user feedback will be closely monitored
Google has used AI to add 110 new languages to Google Translate, including Cantonese, NKo and Tamazight
Perplexity has revealed 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. See example of it in action here
Figma’s CEO has confirmed it is ditching its new AI tool after criticism that it copied Apple’s designs
OpenAI has cut off access to its APIs in China. The last step in a slow process of cutting off the country’s access to U.S.-based ML tools
Meta plans to integrate generative AI into VR, AR, and mixed reality games on its Horizon metaverse platform to create varied gameplay experiences and non-deterministic paths. 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, has topped the App Store after launching publicly from invite-only mode. 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
Snapchat is rolling out a new feature to Snapchat Plus subscribers that will allow users to design their own virtual house. The house is visible on Snap’s Map and can be shared with family and friends. It’s 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 giant Flipkart started quietly rolling out its own payments app, named Super.money, as it continues to expand its fintech footprint
📚 Good reads
Is there a route to Super-app-like positions in Enterprise AI? Choudary has a new piece that explores patterns for existing SaaS players to achieve dominance in an otherwise ultra-fragmented space. “How the application landscape will look (given the impacts of GenAI),” 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 “super app” 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 you’re 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 it’s 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 won’t have a huge impact. I often like to think of Amazon’s “two-way door / one-way door” analogy, encouraging quick decision-making whenever the effects are easily reversible
Improving Performance Reviews. “Performance reviews are like capitalism. Lots of problems but no one has invented a better system yet.” 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 Singh weighs in on Gen AI and reflects on how Network Effects could be generated as a strategy for defensibility in the Gen AI space. Singh advocates for AI applications to transition to an “AI 2.0 era” where defensibility becomes essential. According to him, applications need to have an “AI-enabled multiplayer interaction which involves a lot more than AI-generated output created by another user”
That’s 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