🚨This week’s big news: we now have an Instagram account, @theseednl!
🌱 Welcome to the sixth issue of the Seed and welcome to our new subscribers!
⚙️The Seed is a weekly newsletter with easy-to-read content focusing on Entrepreneurship, Innovation, and Technology. Our slogan: "Growing ideas through seeds of information"
💡 This week’s concepts
🔍 What is a startup?
This is already the sixth issue of The Seed. We have talked about industries, fundraising, but we realized that we had not yet explained what a startup was.
👉 We tend to use the word startup as soon as we talk about a technology company. But, if a company is recent or small-size, it doesn't mean it is a startup. Actually, a startup can be defined as a certain period in a company's lifetime, a bit like childhood for human life.
📈 One of Silicon Valley's best-known entrepreneurs, the theorist of the Lean Startup movement, Steve Blank, defines a startup as "a temporary organization seeking a replicable and scalable business model". In other words, a startup is a company with a product not yet finished, trying to increase its revenues while keeping its costs stable. For example, today referred to as FAANG, companies like Apple or Netflix were once startups.
🤑 Startups are important in our economy because they offer innovative products that can disrupt a market and force companies that have been leaders for years to change their vision and actions. Basically, when it comes to paying on an e-commerce website, white-label payment gateways offered by banks are no longer popular. Consumers want now a payment experience that is 100% integrated with the website or app. This explains PayPal or Stripe's successes, but also the buyouts of large banks like Bankia bought by CaixaBank.
Lastly, I'd like to highlight one figure. In 2020, 70% of permanent contracts created in the USA were from startups... And the trend is not about to stop given the number of startups created each year (+800,000 in the US in 2020!)
📈 News and Trends
Some news
📬 Lob raises $50m for its direct mail platform
The physical mail is dead? Not so fast. Lob, a Y Combinator-backed startup, has raised an additional $50 million to expand its activities. As of today, Lob estimates that it has delivered mails to half of the US households. With the use of technology, Lob allows companies to drastically reduce the time needed for a mail campaign (90 days → 1 day), and to increase the personalization options.
👔 Snap acquires Fit Analytics
Snap has acquired German startup Fit Analytics, which is specialized in the development of digital solutions to help customers to choose the right size of a garment when shopping online. Lately, Snap is getting more involved in the e-commerce field (AR filters to try on sneakers, Fit Analytics).
🤳🏻 The Seed has an Instagram account!
Follow us at @theseednl 😉 We hope you will like it!
Trends
Twitter launches a newsletter service
🐦 Making Twitter a better home for writers
You all know the famous bluebird company and its 280-character tweets. For 2021, Twitter has decided to open up to the emergence of new trends and complete its service, with the opening of Spaces (audio chat rooms, to compete with Clubhouse) and also the creation of a newsletter service!
💸 The acquisition of Revue
Earlier this year, the American giant announced the acquisition of Revue, a Dutch service of creation and monetization of newsletters. Although this service will continue to operate stand-alone, Twitter is already preparing its integration into its network to set up a free newsletter service, but also a premium on which Twitter would take a 5% commission.
✉️ The choice of the newsletter
The choice of the newsletter is strategic. Today the newsletter market is not only composed of companies that want to promote their product but also of writers who discuss various topics. It is said that the newsletter is riding on the passion economy (an economy focused on peoples' passion)! This trend is all the more important as the recent health crisis has pushed many people to discover new hobbies, including writing.
Currently, 3.9 billion people use their mailbox daily. These are huge figures for a market still very professional. It is therefore legitimate to consider that the passion economy in general, and newsletters in particular, have a bright future.
❤️ Weekly Crush
Lemlist, the startup which said no to $30M from investors
📤 What is Lemlist?
Lemlist is a SaaS (Software as a Service) B2B platform that automates commercial prospection, helping its clients to reach out to potential customers.
Its main differentiators?
Cold email personalization, that dramatically increases conversion rates.
One technique they use is adding a picture or video with customizable captions (see below).
Email optimization to reach the contact’s main inbox.
Lemlist’s results are impressive, and its clients often reach a 30% reply rate! Its promising tool has naturally attracted the attention of several VC firms. Yet, recently, Lemlist turned down a $30 million offer in funding, including $15 million for the three founders.
🎯 Lemlist impressive stats
2017: Lemlist is founded by Guillaume Moubeche, and Vianney & François Lecroart.
2018: 0 to $250k Annual Recurring Revenues (ARR) in a year, without funding. Lemlist is featured on ProductHunt (#1), and advertised via AppSumo.
2020:
23% Growth Month over Month (MoM)
35 employees
+10,000 clients
€1 million + in profits
€3.5 million+ in revenues
💸 Why not raising?
After publicly advertising that they were seeking to raise funds, Lemlist founders decided to turn down the offer mentioned above. This refusal was (almost) premeditated.
Lemlist founders wanted to show that success should not be correlated to the companies’ fundraises size. A successful startup is above all a startup that reaches economic profitability.
This reasoning doesn’t apply to all industries, though. For example, many FinTech companies must raise significant amounts of money to comply with regulations and grow their business. But the major learning Lemlist wanted to share is that, as an entrepreneur, you should first focus on meeting your customers’ needs. Fundraising will come later if you need it, not the other way around. But can you dream big without raising? For Lemlist, yes! Within 4 to 5 years, its ambition is to become a unicorn 🦄!
🔎 Focus
FemTech
🤷♀️ What is FemTech?
FemTech (which stands for Female Technology) is the use of technology to improve women's health and well-being.
😷 The context
Women's health has always been a taboo subject: women do not expose their menstrual cycle problems or others, and this can lead to not being taken care of quickly enough but also to more serious health problems. For example, endometriosis has an average diagnosis time of eight years, and if not treated on time, can lead to infertility and increase the risk to face some cancers.
🙊 FemTech tries to fight these taboos
Here are some examples:
Pregnancy & nursing care: Bloomlife is a connected monitoring kit, which aims to help women in late pregnancy to monitor contractions.
Women’s sexual wellness: Nuelle is a women’s personal health company focused on delivering groundbreaking solutions for women’s sexual wellbeing.
Fertility solutions: Prelude is a network of top-tier fertility centers across the US offering comprehensive fertility care.
Period tracking: Clue.
🔥 The new hot sector?
Overall, it is difficult for women entrepreneurs to raise funds. According to Crunchbase, 2.3% of VC funding went to women. But it’s even more difficult to convince investors (often male) to invest in a FemTech company, as, understandably, they often have no clue of what the problem is. This is one reason why there are only around 200 FemTech companies globally.
Here’s another staggering figure that illustrates the difficulty to start a FemTech company: among the whole HealthTech sector, only 4% of healthcare R&D is spent on women’s health (TechCrunch).
But the sector is expected to grow exponentially given the current context which takes more and more into account women.
That’s it for this week! Hope you enjoyed it and see you next Friday 🙌
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