Origin stories are satisfying because we already know the hero will overcome the odds — and in doing so, they’ll reveal their core strengths.
This week, we published a four-part series about how Klaviyo co-founders Andrew Bialecki and Ed Hallen bootstrapped their startup into an e-commerce marketing automation platform now valued at $4.15 billion.
Neither founder was bitten by a radioactive spider or received a serum that enhanced their entrepreneurial skills; instead, they focused on outreach to prospective customers to find out what they were willing to pay for and largely ignored the competition.
“Bootstrapping Klaviyo, it came out of this: ‘Hey, if we are super-disciplined about finding a problem that someone will pay us to solve, we have a real company,’” said Hallen.
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Even though millions of us respond every day to the personalized, automated emails sent through its platform, Klaviyo still isn’t a well-known brand. Our ongoing series of EC-1s offers entrepreneurs real insight into growing and scaling successful companies, but they’re also extremely useful for consumers who want to understand how the internet really works.
Thanks very much for reading Extra Crunch; I hope you have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Table of Contents
The Klaviyo EC-1
Image Credits: Nigel Sussman
- Part 1: How Klaviyo transformed from a lifestyle business into a $4.15B email titan
- Part 2: How Klaviyo used data and no-code to transform owned marketing
- Part 3: Marketing in 2021 is emotional and not just transactional
- Part 4: Drama and quirk aren’t necessary for startup success
Micromobility’s next big business is software, not vehicles
Image Credits: slowcentury (opens in a new window) / Getty Images
Several micromobility companies once operated in my city, but consolidation has reduced that to a small handful.
Now that many consumers are buying their own e-bikes and e-scooters, shared dockless micromobility “just hasn’t proven itself to be a profitable line of business,” Puneeth Meruva, an associate at Trucks Venture Capital, told TechCrunch.
There’s only one dockless electric moped provider in my town, so price is no longer a consideration. Instead, my first priority is to find a vehicle with the best-charged battery. (San Francisco has a lot of hills, and you never know where the day might take you.)
Larger players like Lime and Bird have vertically integrated tech stacks for fleet management features like this, but there are also opportunities for startups — imagine a “phantom scooter” that drives itself to a neighborhood with high demand or a moped that alerts drivers if there’s traffic ahead.
This in-depth industry analysis shows how increased regulation on the local level and changing consumer habits are pushing micromobility providers to adapt and innovate.
“Whether you want to stack regulatory compliance on the vehicles, do safety features like ADAS or add mapping content, you kind of need this platform where you can actively develop and launch new apps on the vehicle without having to bring it back to the factory,” Meruva said.
Enterprise security attackers are one password away from your worst day
If the definition of insanity is doing the same thing over and over and expecting a different outcome, then one might say the cybersecurity industry is insane.
Criminals continue to innovate with highly sophisticated attack methods, but many security organizations still use the same technological approaches they did 10 years ago. The world has changed, but cybersecurity hasn’t kept pace.
Data scientists: Bring the narrative to the forefront
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By 2025, 463 exabytes of data will be created each day, according to some estimates. It’s now easier than ever to translate physical and digital actions into data, and businesses of all types have raced to amass as much data as possible in order to gain a competitive edge.
However, in our collective infatuation with data (and obtaining more of it), what’s often overlooked is the role that storytelling plays in extracting real value from data.
The reality is that data by itself is insufficient to really influence human behavior. Whether the goal is to improve a business’ bottom line or convince people to stay home amid a pandemic, it’s the narrative that compels action, not the numbers alone.
As more data is collected and analyzed, communication and storytelling will become even more integral in the data science discipline because of their role in separating the signal from the noise.
Business continuity planning is a necessity for your fund and portfolio
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We all need to be taking precautionary measures, not just in light of COVID, but to ensure our firms can continue to thrive when faced with unexpected tragedy.
So ask yourself this question: “What would happen if I or my partner(s) checked into the hospital tomorrow and had no phone and/or was too sick to call anyone, and that went on for two or three weeks (or longer)?”
If the answer is “I’m really not sure,” then you don’t have a business continuity plan.
Outdoor startups see supercharged growth during COVID-19 era
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After years of sustained growth, the pandemic supercharged the outdoor recreation industry. Startups that provide services like camper vans, private campsites and trail-finding apps became relevant to millions of new users when COVID-19 shut down indoor recreation, building on an existing boom in outdoor recreation.
Startups like Outdoorsy, AllTrails, Cabana, Hipcamp, Kibbo and Lowergear Outdoors have seen significant growth, but to keep it going, consumers who discovered a fondness for the great outdoors during the pandemic must turn it into a lifelong interest.
Once VMware is free from Dell, who might fancy buying it?
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Dell last week agreed to spin out VMware in exchange for a huge one-time dividend, a five-year commercial partnership agreement, lots of stock for existing Dell shareholders and Michael Dell retaining his role as chairman of its board.
So, where does the deal leave VMware in terms of independence, and in terms of Dell influence?
Time-strapped IT teams can use low-code software to drive quick growth
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Many emerging and mature organizations survive or die based on their ability to scale. Scale quicker. Scale cheaper. Scale right.
Typically the IT team bears that burden — on top of countless other demands. IT teams move mountains for their organizations while scaling the tech platform as fast as possible, putting out the latest infrastructure fire and responding to countless day-to-day requests.
The most helpful gift any chief information officer or chief technology officer can give their IT teams is more time. Many people think that means adding another team member. But it could be as simple as introducing a low-code integration platform.
European VC soars in Q1
Image Credits: Nigel Sussman (opens in a new window)
A stunning first quarter in venture capital funding was not restricted to the United States; Europe also had one hell of a start to the year.
The venture capital world kicked off its 2021 European investing cycle with enough activity to set the continent on the path that would crush yearly records.
Inside the data, there’s lots to unpack, including which sectors of European startups stood out in terms of capital raised, rising seed and late-stage deals, and dollar volume. We’ll also need to discuss exits — the Deliveroo IPO and its various woes was not the only transaction from the period worth understanding.
We’ll keep in mind that all venture capital data lags reality somewhat, as many deals from a particular period are not disclosed or discovered until long after they actually occurred.
In this case, it makes the numbers all the more impressive.
UiPath raises IPO range, still targets lower valuation than final private round
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Robotic process automation unicorn UiPath went public this week, concentrating our focus on its value.
UiPath raised its last private round when the markets were most interested in public offerings and is now going public in a slightly altered climate.
In numerical terms, UiPath raised its IPO range from $43 to $50 per share to $52 to $54 per share. That’s a 21% jump in the value of the lower end of its range and an 8% gain to the value of the upper end of its per-share IPO price interval.
UiPath is also selling more shares than before, which should make its total valuation slightly larger at the top end than a mere 8% gain. So let’s go through the math one more time.
Insurtech startups are leveraging rapid growth to raise big money
Image Credits: Nigel Sussman (opens in a new window)
The investment landscape for insurtech startups is off to a hot start in Q2 2021. Since the end of the first quarter, we’ve seen several players in the broad startup category announce new capital.
But, as anyone who’s familiar with startups that offer insurance-related products and services knows, the sector is enough of a mixed bag that one needs to segment down to get clarity on how constituent companies are performing.
Let’s discuss insurtech’s 2020 as a whole, peek at some preliminary 2021 venture data and then dive deep into what we’ve collected regarding growth among insurtech marketplace players.
Covering longitudinal progress of specific startup categories is one of our favorite things to do. So, please, walk with us!
Deep Science: Introspective, detail-oriented and disaster-chasing AIs
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Research papers come out far too frequently for anyone to read them all. That’s especially true in the field of machine learning, which now affects (and produces papers in) practically every industry and company.
This column aims to collect some of the most relevant recent discoveries and papers — particularly in, but not limited to, artificial intelligence — and explain why they matter.
This week, we dove into “introspective failure prediction,” using ML to identify dangerous moles, and spotting cows from space.
Who’s funding privacy tech?
Image Credits: Gearstd (opens in a new window) / Getty Images
With strict privacy laws such as GDPR and CCPA already listing big-ticket penalties — and a growing number of countries following suit — businesses have little option but to comply.
It’s not just bigger, established businesses offering privacy and compliance tech; brand-new startups are filling in the gaps in this emerging and growing space.
Privacy isn’t dead, as many would have you believe. New regulations, stricter cross-border data transfer rules and increasing calls for data sovereignty have helped the privacy startup space grow thanks to an uptick in investor support.
This is how we got here, and where investors are spending.
A cooling trend in public markets makes UiPath’s down-round IPO a win for the company
Image Credits: Nigel Sussman (opens in a new window)
UiPath is not worth $36 billion, as we might have expected, but at a figure below $30 billion.
At $29.1 billion, UiPath has a roughly 35x run-rate multiple. That just about ties it for eighth-best overall. Among all public cloud companies. That means that UiPath is insanely valuable, just not that insanely valuable.
So what went wrong with the company’s final private round? The Exchange’s hunch is that UiPath’s final private investors expected the market to stay as hot as it once was, but it has cooled since the first two months of the year. So, instead of UiPath coming to the market in the expected climate, the company instead had to price where it did because the weather predicted by its final private price had already chilled.
Those investors gambled, in other words, hoping that a last-minute, pre-IPO round could snag them a rapid return on a company going public in a hot market. That didn’t work out.
And how bad is that? Not very! UiPath’s IPO is more a meeting of private-market exuberance and modestly more conservative public markets. It’s nothing to cry about.
4 ways martech will shift in 2021
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The second half of 2021 will bring incredible growth, the likes of which we haven’t seen in a long time.
Here’s how marketing in tech will shift — and what you need to know to reach more customers and accelerate growth this year.
First and foremost, differentiation is going to be imperative. It’s already hard enough to stand out and get noticed, and it’s about to get much more difficult as new companies emerge and investments and budgets balloon in the latter half of the year.
Additionally, tech companies need to be mindful not to ignore the most important part of the ecosystem: people. Technology will only take you so far, and it’s not going to be enough to survive the competition.
Tactically, the most successful tech companies will embrace video and experimentation in their marketing — two components that will catapult them ahead of the competition.
Ignoring these predictions, backed by empirical evidence, will be detrimental and devastating. Fasten your seatbelts: 2021 is going to be a turbocharged year of growth opportunities for marketing in tech.
Dear Sophie: How can I get my startup off the ground and visit the US?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I’m a female entrepreneur who created my first startup a few months ago.
Once my startup gets off the ground — and as COVID-19 gets under control — I’d like to visit the United States to test the market and meet with investors. Which visas would allow me to do that?
—Noteworthy in Nairobi
As UiPath closes above its final private valuation, CFO Ashim Gupta discusses his company’s path to market
Despite a somewhat circuitous route, UiPath closed its first day as a public company worth more than it was in its Series F round — when it sold 12,043,202 shares at $62.27576 apiece, per SEC filings. More simply, UiPath closed on Wednesday worth more per-share than it was in February.
How you might value the company, whether you prefer a simple or fully diluted share count, is somewhat immaterial at this juncture. UiPath had a good day.
TechCrunch spoke with UiPath CFO Ashim Gupta, curious about the company’s choice of a traditional IPO, its general avoidance of adjusted metrics in its SEC filings and the IPO market’s current temperature.
How are VCs handling diligence in a world where deals open and close in days, not months?
Image Credits: Nigel Sussman (opens in a new window)
The global venture capital market had a cracking start to the year. Coming off a 2020 high, VC totals in the United States, in Europe, and among competitive verticals like insurtech and AI are on pace to set new records in 2021.
The rapid-fire deal-making and trend of larger venture checks at higher valuations that The Exchange has tracked for some time require private-market investors to make decisions faster than ever. For venture capitalists, the timeline for reaching conviction around a startup’s thesis and executing due diligence has become compressed.
Some venture capitalists are turning to data to move more quickly. Some are spending more time preparing to be vetted themselves. And some investors are simply doing the work beforehand.
We were tipped off to the concept of pre-diligence during the reporting process for a look into recent fundraising trends in the AI/ML space. Sapphire investor Jai Das, when asked about how he was handling a competitive and swiftly moving market for AI startup investments, said that “most firms are completing their due diligence way before the financing actually happens.”
How does that work in practice?
Customer care as a service: Outsourcing can help your startup wow clients 24/7
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Your clients might not demand 24/7 customer service yet, but they’re certainly hoping for it.
But how can a startup with a lean staff provide round-the-clock customer care? There are several options available, but more than ever, outsourcing is one of them.
When should your startup consider outsourcing its customer care? And what should you look for in a provider?
Here are some insights on what customer care as a service (CCaaS) can do for you, and how fast-growing startups have been leveraging this new class of partners to boost customer satisfaction.
5 emerging use cases for productivity infrastructure in 2021
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Productivity infrastructure is on the rise and will continue to be front and center as companies evaluate what their future of work entails and how to maintain productivity, rapid software development and innovation with distributed teams.
Understanding the benefits, use cases and steps to consider can propel organizations into the next phase of digital transformation.
To sell or not to sell: Lessons from a bootstrapped CEO
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The clock begins ticking on a startup the day the doors open. Regardless of a young company’s struggles or success, sooner or later the question of when, how or whether to sell the enterprise presents itself. It’s possibly the biggest question an entrepreneur will face.
For founders who self-funded (bootstrapped) their startup, a boardroom full of additional factors comes into play. Some are the same as for investor-funded firms, but many are unique.
After 18 years of bootstrapping a BI software firm into a business that now serves 28,000 companies and 3 million users in 75 countries, here’s what I’ve learned about myself, my company, about entrepreneurship and about when to grab for that brass ring.
Put happiness at the center of the decision, and let your intuition — the instincts that made you the person you are today — be your guide.
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