Startup Lessons from Squid Game - Business Insights

Startups Weekly: A Review of Current Trends

This edition of Startups Weekly offers a distinctly human perspective on the latest startup news and emerging trends. To receive this directly in your inbox, you can subscribe here.

Metaverse and Gaming: A Shifting Landscape

Our recent discussion on Equity centered around the inevitable integration of the metaverse with popular culture, using “Squid Game” as a prime example. We delved into the transformations occurring within the gaming industry, examining them through the innovations of startups and the strategies of established tech companies.

Notably, Netflix has recently acquired its inaugural gaming studio. Initial concerns regarding streaming quality were addressed, but the potential for synergy became clear when considering Netflix’s ability to adapt its original content – notably, “Squid Game” – into immersive, high-quality video game experiences.

Apple's Dominance and Investment Trends

We also considered Apple’s position as a leading force in the gaming sector, and the potential influence of its 30% app store commission on this dominance. Furthermore, we discussed the burgeoning metaverse and Andreessen Horowitz’s launch of a new, gaming-specific investment fund.

Interestingly, this fund is currently operating without a designated partner to lead it, yet boasts a portfolio of compelling early-stage investments.

Industry Evolution and De-risking

As a non-gamer, I found the recording of this episode particularly insightful. It highlighted the evolution of the gaming industry, transitioning from independent, short-lived titles to fully-fledged productions designed for sustained engagement and revenue generation.

The gaming sector is becoming increasingly less risky for both content creators and venture capital firms. This reduced risk is anticipated to stimulate a surge in funding, leading to the creation of numerous new studios and services.

Convergence with Emerging Technologies

Expect to see increased collaboration between the gaming industry and other prominent technological trends, including NFTs, edtech, and cloud infrastructure solutions.

Startup of the Week, S-1s, and Community

The remainder of this newsletter will focus on my startup of the week, an analysis of S-1 filings, and a discussion of the increasingly prevalent use of “community” as a buzzword.

S-1s represent a crucial document for understanding a company’s financial health and future prospects. Analyzing these filings provides valuable insights into market trends and potential investment opportunities.

The term “community” is frequently employed in startup discourse, but its true meaning and effective implementation require careful consideration.

Spotlight on This Week’s Rising Startup…

Introducing Chalo! The company’s name, meaning “let’s go” in Hindi, is as inviting as its mission: to improve the efficiency of bus transportation within India.

Chalo utilizes GPS technology installed on buses, coupled with a user-friendly mobile application. This week, the startup secured $40 million in a Series C funding round.

Key Takeaway: Impactful decisions can be as significant as financial gains. A portion of the new funding – $10 million – will be dedicated to a stock option repurchase program.

This initiative is designed to recognize and reward both current and past employees, alongside early angel investors. Such a move by the founder demonstrates the growing sophistication of the Indian startup landscape.

Other Startups Making Waves:

• CostCertified, supported by Y Combinator, has raised $8.45M to create a comprehensive construction procurement platform, often likened to ‘Amazon for construction’.
• Blue Fever, an anonymous social networking service, has acquired Trill, a platform founded by members of Generation Z.
• Reports indicate Tiger Global is in discussions to spearhead a $100M+ investment in Slice, an Indian financial technology company.
• Visionrare, a platform for ‘fantasy startup investing’ utilizing NFTs, has temporarily suspended its paid marketplace following a brief open beta period.

Rivian’s S-1 Filing: A Deep Dive

A significant regulatory filing occurred late last week, as Rivian submitted its S-1 form. This document provides detailed insights into the financial aspects and strategic direction of the electric vehicle (EV) company.

Through the data presented, we gain a clearer understanding of the substantial costs associated with establishing and scaling Rivian’s operations.

The filing also challenges conventional wisdom regarding market size projections within the EV sector.

Furthermore, it clarifies the roles of key industry players like Tesla and Amazon – are they central figures or merely supporting entities?

Key Takeaways from the Filing

Transportation Editor Kirsten Korosec and Senior Editor Alex Wilhelm have analyzed the S-1 filing, revealing crucial information.

The document illustrates the complexities involved in bringing an EV company to market.

It highlights the importance of careful financial planning and strategic partnerships for success in this competitive landscape.

Related IPO News

Here are some other recent IPO filings and related analyses:

• Udemy’s public offering is driven by increasing revenue from its business-to-business (B2B) segment.
• Rent the Runway’s S-1 filing sheds light on the economics of clothing rental services.
• Informatica’s IPO will gauge investor interest in established tech companies with moderate growth rates.
• Careful consideration of incentive stock options is essential for financial well-being.

Understanding these filings provides valuable context for evaluating the current state of the IPO market.

It also underscores the diverse range of business models seeking public investment.

The Distinction Between Community and Customer Base

A subtle difference exists between fostering a rich and varied community and simply rebranding one’s most dedicated customers. The dilution of the term “community” was a central topic of discussion on Equity this week.

This discussion stemmed from Contrary Capital’s recent closure of its second fund. Contrary Capital provides funding to student entrepreneurs and high-performing employees within established companies.

Key Takeaways: Contrary has assembled a network of 350 students, functioning as investment partners, with the intention of providing guidance – and ultimately investing in – promising ventures. A significant portion of this group, 45%, identifies as female, while 65% identify as belonging to a non-white demographic.

However, Contrary founder Eric Tarczynski emphasized that success isn’t solely measured by the emergence of the next Stripe from within the group. His primary goal is to cultivate a network of skilled individuals.

Even if these individuals do not launch their own startups, the assembled database represents a valuable resource for potential hires for companies already within Contrary’s investment portfolio.

Related Startup News

• Lolita Taub’s departure from the community fund has been announced.
• Insights from Index, Sequoia, and Canvas investors on securing initial funding are available.
• Copper Banking has secured $9M in funding amidst increasing competition among digital banks targeting teenage customers.
• An exploration of what “community” signifies in today’s startup landscape is underway.
• A candid perspective on the evolving role of the Chief Marketing Officer has been shared.

TechCrunch Sessions: SaaS is Here

The return of TechCrunch Sessions is imminent, beginning with a focus on SaaS! Mark your calendars for October 27th as we delve into the dynamic world of software as a service, analyzing its competitive landscape through insightful discussion and critical questioning.

Our team has assembled leading figures within the industry for TC Sessions: SaaS. Attendees will hear from experts such as Sarah Guo of Greylock, Kathy Baxter from Salesforce, and Daniel Dines of UiPath.

Complete Agenda Details

The full schedule for TC Sessions: SaaS is now available. Interested parties still have the opportunity to purchase early-bird tickets for just $75.

Secure your spot now and realize a $100 savings before the price increases!

Event Highlights

• Focus: Software as a Service (SaaS) development.
• Date: October 27th.
• Speakers: Industry leaders including Sarah Guo, Kathy Baxter, and Daniel Dines.
• Tickets: $75 early-bird pricing available for a limited time.

Don't miss this chance to engage with the forefront of SaaS innovation. This event promises valuable insights and networking opportunities.

Weekly Tech Highlights

Reported by TechCrunch

Following a substantial data breach revealing creator earnings, Twitch streamers have begun to react.

Elon Musk has declared that Tesla will be relocating its corporate headquarters to Austin.

Instacart is expanding its capabilities through the acquisition of FoodStorm, a catering software provider.

The ineffectiveness of broad marketing strategies when targeting software developers has been analyzed.

Telegram reported a surge of 70 million new users coinciding with the service disruption experienced by Facebook and WhatsApp.

Insights from TechCrunch+

Concerns have been raised regarding the potential dissatisfaction of Coinbase CEO Brian Armstrong with his current work environment.

It's been suggested that the current model of SaaS subscriptions may not be optimally serving customer needs.

An assessment of The Athletic’s performance indicates a healthier financial position than previously assumed.

Techstars is intensifying its investment and focus within the European startup ecosystem.

Venture capitalists are identifying an increasing number of promising startup ventures in Latin America.