TLDR Founders 2024-07-31

From emerging payment technologies to the importance of intuitive software design, the world of Embedded Payments is rapidly evolving. How do you stay ahead while serving up what merchants really want in your software offerings?

The Merchant Insider Report is here to help, offering unique insights into the merchant perspective. It analyzes responses from over 500 merchants in the U.S. and spans key industries, so you can understand the challenges, preferences, and expectations that are shaping software development today.

Download the Merchant Insider Report to learn:

What keeps merchants happy

The importance of payment capabilities

Why security is a must

The need to offer sector-specific solutions

📥Download now

Leonardo.ai, a generative AI art platform, has been acquired by Canva to enhance its Magic Studio suite with advanced AI capabilities. The acquisition is part of Canva's ongoing investment in generative AI tools, which began in December 2022 and has included the development of internal projects and acquisitions. With over 19 million registered users and a billion images created using its tools, Leonardo.ai is expected to significantly contribute to Canva's goal of building a powerful, all-in-one visual AI offering.

Perplexity, an AI-powered search engine, plans to launch an advertising platform and share revenue with publishers whose content is used to generate answers. The initiative, known as the Perplexity Publishers' Program, has initial partners including TIME, Fortune, The Texas Tribune, Der Spiegel, and Automattic. Perplexity aims to let brands pay for targeted ads and share a percentage of the revenue with publishers whose content was used in the AI-generated answers.

Blackbird is a loyalty and payments platform that helps restaurants drive better unit economics and provide personalized experiences to diners. By using blockchain technology, Blackbird enables restaurants to offer rewards, faster payments, and unique loyalty programs, while giving diners the ability to feel like a "regular" at any participating restaurant. The platform aims to make restaurants more profitable and give them more control over their future while providing diners with richer, more engaging dining experiences.

Timing is crucial for a startup's success. Founders should be prepared to answer the "Why now?" question when pitching to investors. Successful startups often spot trends early, develop innovative solutions, and leverage market shifts, technological advancements, or regulatory changes to their advantage. Demonstrating a deep understanding of the industry landscape and the unique opportunity presented by current circumstances can help founders create a compelling narrative and instill confidence in potential investors.

Founder-market fit is a crucial concept that significantly influences a startup's trajectory and success. Founders with deep domain expertise and a strong connection to their target market are more likely to build successful companies, as they can navigate challenges, solve problems quickly, and maintain sustained motivation. While founder-market fit is difficult to measure directly, it can be approximated through metrics such as time to product-market fit, customer acquisition cost, and net promoter score.

Successful startups often pivot from their original idea. A new book called "Pattern Breakers" proposes a theory called "inflection theory" to explain why this happens. According to inflection theory, startups succeed by identifying and timing significant changes in the world, such as technological or cultural shifts, and then harnessing these changes to create a new product or service. The book's authors argue that this approach is more effective than traditional methods, such as the lean startup methodology, and provide case studies and examples to support their claims.

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The healthcare industry is undergoing a significant transformation with the integration of AI, driven by the explosion of healthcare data, advancements in pharma technology, and the need to address labor shortages and rising costs. Investment opportunities abound in areas such as data analytics, security, and interoperability, as well as in solutions that improve clinical workflows, accelerate R&D, and enable hybrid care models. Innovative startups are poised to make a significant impact on human well-being while driving efficiency and growth as the industry shifts towards value-based care and personalized medicine.

Ungated experiences, such as freemiums and interactive demos, are becoming increasingly popular in SaaS segments. These experiences allow prospects to explore and understand the product's value without requiring an email registration upfront. Companies can effectively engage users and drive activation by strategically placing these ungated experiences at the forefront of the customer journey, potentially even replacing the traditional homepage.

Clio, a legal software company, has achieved significant success since its inception, growing from 50 customers to over 150,000 legal professionals and reaching $200 million in ARR. The company's journey highlights key learnings for founders and investors, including the importance of persistence, the potential for vertical software companies to achieve substantial growth, and the value of non-consensus ideas. Clio's success underscores the benefits of founder-led companies with technical expertise.

The introduction of AI is poised to revolutionize workflow software, much like a commercial dishwasher transformed a coffee shop's kitchen operations.

Uber faced a significant challenge in finding drivers when the company was in its early stages.

Post-money SAFEs with valuation caps are currently the most popular type of SAFE among startups, with discounts becoming less common.