Uber, Grocery Outlet partner to pilot on-demand and scheduled grocery delivery

Uber is partnering with Grocery Outlet to pilot on-demand and scheduled grocery delivery, the company announced on Thursday. Starting today, users can shop at 72 Grocery Outlet stores in California, Oregon and Washington state via the Uber or Uber Eats app. The new partnership signifies Uber’s push into on-demand and scheduled grocery delivery.

Oskar Hjertonsson, the head of grocery at Uber, said in a statement that the goal of the new partnership is to “provide a reliable and affordable grocery delivery option that works for everyone, no matter your budget. We see our partnership with Grocery Outlet as an opportunity to do just that by delivering customers the brands they like at the Grocery Outlet prices they love, on-demand, right to their door.”

To mark the new partnership, the company is offering pilot customers free delivery on their first order of $30 or more through June 19. Uber One members can get free delivery on all Grocery Outlet orders with a $15 minimum purchase.

Earlier this month, Uber expanded its partnership with Albertsons to include more than 2,000 of the company’s stores nationwide, including Albertsons, Safeway, Jewel-Osco, ACME, Tom Thumb, Randalls and more. The expansion brought nearly 800 new locations to Uber Eats.

Uber initially launched grocery delivery in July 2020 in Latin America and Canada, and has since expanded the service to more than 400 U.S. cities and towns. The company says it’s “uniquely poised” to meet consumers’ desire to get the things they need from grocery stores in an “on-demand fashion.”

Today’s announcement comes as Uber recently unveiled a slew of new features at its global product event earlier this week. The company launched a new “Uber Travel” feature that will help riders book a ride to and from upcoming events, like flights or restaurant reservations, in advance. Uber also announced a new Uber Charter service that allows riders to book party buses, passenger vans and coach buses directly through the Uber app. The company also announced event vouchers, an EV and charging map, new Uber Eats products, new perks for its Uber One membership and more.

FloorFound grabs more capital to grow its oversized recommerce business

While we had the chance to be at home more over the past few years, you may have spruced up a home office or replaced a couch. However, once the new item was in your home, you may have had some buyer’s remorse or the item didn’t live up to its website photo.

In any case, that oversized item needs a new home, and FloorFound is working with brands and retailers to give that couch to someone who will love it, while avoiding the landfill.

We first caught up with the Austin-based company and its founder and CEO Chris Richter in 2020 when FloorFound was getting started. The company went on to raise $4 million in seed funding in 2021 and is now back with a $10.5 million Series A financing round.

The round was co-led by Next Coast Ventures and LiveOak Venture Partners with participation from existing investors Flybridge Capital Partners and Schematic Ventures and new investor Data Point Capital.

Richter told TechCrunch that the funding comes as more people are interested in purchasing resale. The company-sponsored survey done in 2021 found that over 90 percent of U.S. consumers reported buying resale items, while research from First Insight and the Wharton School suggests 83% of consumers who have purchased secondhand products plan to do so again, which is up from 17% in 2019.

“The tailwinds that were supportive of our business in 2020 and 2021 have only gotten better, as has consumer sentiment around sustainability, so we have grown accordingly,” he added.

Reverse logistics don’t work without a plan on how to handle the return and resale of those larger items, however, and FloorFound is making this process simpler through its end-to-end technology platform that streamlines both the recovery and resale of returned, lightly used and open-box items.

In February 2021, the company launched its solution and since then has more than doubled its recommerce sales each quarter on average. It also grew its client base five times, which includes furniture brands like Inside Weather, Floyd and Burrow. And, Richter noted, FloorFound worked with its clients to keep nearly 450,000 pounds of furniture in circulation and out of landfills so far.

FloorFound is the latest to raise funding within a U.S. resale industry poised to grow over 150% in the next decade and be valued at $330 billion, according to research from Mercari and GlobalData. It joins Loveseat, also based in Austin, which raised $7 million in Series A funding in March for its returned home goods marketplace. On the fashion front, companies like Recurate announced $17.5 million Series A funding this week.

Meanwhile, FloorFound intends to use the new funding to expand its market presence in the U.S. and move into additional retail verticals like appliances, mattresses and exercise equipment. The company currently has four major third-party logistics partnerships and over 40 warehouse hubs, a number Richter plans to triple this year.

What makes FloorFound stand out from its competitors is its approach to putting retailers, which often struggle with how to effectively do returns, at the center of recommerce, according to Richter.

“Retailers are going to miss out on a revenue opportunity if they don’t participate in recommerce, but trade-in and buy-back is a leap for many of them,” he added. “By focusing on the problem of oversized returns, we can help them use that inventory to launch new sales channels.”

YouTube teases expansion of livestream shopping with new features arriving later this year

In recent years, YouTube has been working to transform its platform into more of a shopping destination with product launches like shoppable ads or more recently, the ability to shop directly from livestreams hosted by creators. Now, it’s furthering that investment with new features for live shopping experiences. At yesterday’s YouTube Brandcast event, where the company pitched itself to advertisers as a better place for their TV ad dollars, YouTube teased upcoming features that it claimed would make it easier for viewers to discover and buy from brands.

The company touted its forthcoming tools as offering advertisers a better way to engage viewers and make connections with their audience.

One new feature, explained YouTube, will allow two creators to go live at the same time to cohost a single live shopping stream. This could effectively double the draw for the event, as each creator would bring their own fanbase to the stream.

This feature arrives shortly after YouTube in March announced a pilot program called “Go Live Together,” a new mobile collaborative streaming feature that would enable creators to invite guests to their livestream with a link before going live together. This trial suggested YouTube had its eye on developing tools to better power joint livestreams — just as it’s now planning to introduce with its upcoming two-person live shopping streams. The addition could also make YouTube more competitive with Instagram which launched the ability for creators to go live with up to three people last year.

In addition to leveraging creators to build an audience for a live shopping event, YouTube’s shopping livestreams platform also offers other tools specifically designed to drive sales. The brand-integrated shopping experience actually allows viewers to shop the products shown in the video by tapping on a built-in “view products” button which then brings up a list of items featured by the creators.

The company says its new two-person live shopping feature will roll out sometime later this year.

Another upcoming option announced at Brandcast is something YouTube calls “live redirects.”

In this case, creators will be able to start a shopping livestream on their channel, then redirect their audience over to a brand’s channel for fans to keep watching. This allows brands to tap into the power of the creator’s platform and reach their fanbase, but then gives the brands themselves access to that audience — and the key metrics and analytics associated with their live event — directly on their own YouTube channel. This will also roll out sometime this year, says YouTube, but didn’t provide a timeframe.

YouTube’s announcements follow the broader growth of the live e-commerce market in the U.S. — a trend inspired by the livestream shopping activity surging in China, where streamers can pull in billions of dollars in a matter of hours. Today, a number of startups have also entered this space, including TalkShopLive, PopShop Live, NTWRK, Whatnot, ShopShops, Supergreat, and others. Klarna even added virtual shopping capabilities to connect its buy-now, pay-later customers with live product demos from retail partners.

Retailers, too, are getting in on the action. Nordstrom launched a live events platform, while Forever 21 and Macy’s are among those that added live shopping to their apps.

Meanwhile, big tech platforms are wooing brands by touting their wider reach.

Over the past year or so, we’ve seen Walmart pilot testing TikTok’s first livestreamed shopping experience; Facebook’s live shopping boosting sales for brands like Petco, Benefit, Samsung, Anne Klein, and others; and Instagram hosting live shopping events to cater to holiday crowds. Twitter even began to test livestream shopping, also with Walmart’s help on its pilot run — but it’s unclear where such initiatives will land if the Elon Musk buyout comes to pass.

While YouTube is certainly one of the largest creator platforms for video, there is some indication that it needs to catch up to its big tech rivals in livestream shopping, however. An eMarketer study from Jan. 2022 found that only 14.4% of survey respondents said YouTube’s platform drove them to purchase during a livestream event compared with 15.8% for TikTok, 45.8% for Instagram, and 57.8% for Facebook.

Image Credits: eMarketer/Insider Intelligence

YouTube’s new livestream features — and particularly the one that pushes a creator’s fanbase to a brand’s channel — could make its solution more compelling.

“People come to YouTube every day to make decisions about what to buy, and 87% of viewers say that when they’re shopping or browsing on YouTube, they feel like they can make a faster decision about what to purchase because of all the information that we have in videos,” said YouTube CEO Susan Wojcicki, speaking to the audience at the Brandcast live event last night. “We have so much shopping activity that is already happening on YouTube, so we are making it even easier for viewers to discover and to buy,” she said.

Stripe expands its infrastructure play with Data Pipeline to sync financial data with Amazon and Snowflake

Stripe — the payments giant valued at $95 billion — is on a product sprint to expand its services and functionality beyond the basic payments that form the core of its business today. Today the company took the wraps off Data Pipeline, an infrastructure product that will let its users create links between their Stripe transactions data and data stores that they keep in Amazon Redshift or Snowflake’s Data Cloud.

The move underscores how Stripe is positioning itself as more than just a payments provider, but a larger financial services and data powerhouse, a “financial infrastructure platform for businesses” in its own words.

The launch comes just weeks after the company announced Financial Connections, which lets Stripe customers connect with their customers’ banking services to pull in more complete financial data about those users.

Data Pipeline — which has been working in a closed beta up to now — has already picked up a few early customers: ChowNow, Housecall Pro, HubSpot, Lime, Shipt, and Zoom, which Stripe said use it to “automate downstream reporting and identify growth opportunities.” In other words, payments are still happening, but now Stripe’s turning the payments data result from those into a profit center of its own.

The product will let users incorporate Stripe financial data more comprehensively and easily with other business information, which in turn will let those users leverage that data in wider business intelligence efforts, as well as in financial reporting and in their work monitoring business activity for fraud, security issues and more.

This is notable for Stripe launching an infrastructure product, specifically in the area of ETL (extract, transform, load), which it built from the ground up internally, with the aim of replacing third-party products for its users. It is not the first product from the company aimed at the wider area of enterprise analytics, however: in 2017 the company launched Sigma, a tool to track payments data.

“Whereas Sigma allows you to access/query your Stripe data in the Stripe Dashboard, Data Pipeline allows you to access your Stripe data directly in your Snowflake or Amazon Redshift data warehouse,” said Vladi Shunturov, product lead at Stripe, in an emailed interview. “This way, Data Pipeline makes it easier to query your Stripe data in combination with your other business data.”

Snowflake and Amazon work with other third-party ETL providers, and Stripe declined to comment on what financial arrangements, if any, exist with these specific partnerships. It also declined to comment on whether it would be adding other data warehouse providers to that list.

“We’re always considering ways to expand our services and better serve our users, but don’t have any specific plans to share at this time,” said Shunturov

With the Amazon and Snowflake integrations, Stripe partnered with the two to use their respective data sharing technologies to build its product, he said. Specifically, Stripe initiates a data share that enables us to store the user’s Stripe data in the Stripe cluster and we then provide the user read access to this data. “This way, the user can access their data without giving write access to their cluster,” he said. “We are committed to continuously improve data freshness and expand the breadth of business-ready reports and metrics. Accomplishing this required that we build this capability natively on Stripe.”

Shunturov added that the impetus for the product, and perhaps the company’s strategic roadmap for how it’s building out these new wave of services overall, stems from requests from users.

Stripe users, and especially larger users, have requested easier ways to not just export but continuously sync their Stripe data to their data warehouse so they can centralize their Stripe data with other business data without having to build or maintain an API integration themselves,” he said. “By making product-level reports and metrics available we are also significantly reducing the data engineering investment our users have to turn raw data into business insights. Snowflake and Amazon Redshift were selected as our initial launch partners due to high user demand. In fact, both were the most widely-used data warehouses among the Stripe user community.”

Data Pipeline is currently only in the U.S., for Stripe users that also use Amazon Redshift or Snowflake’s Data Cloud.

Harlem Capital leads seed into Because, an e-commerce enablement startup

With global e-commerce sales poised to be a $5.5 billion industry this year, startups in the e-commerce enablement software space are looking to carve out a niche in this huge market.

One of those is Because, a startup developing no-code software connecting disparate data sources to automate high volumes of website updates.

Founder and CEO Ashland Stansbury explained that e-commerce companies are spending a collective $1.3 trillion to drive traffic to their websites, but only 3% of that leads to a customer purchase. In addition, the average business owner on Shopify is managing a large product catalog, often with over 50 products.

How content is typically updated is that a manager has to go into each website page and change anything manually, often leading to misinformation and mistakes.

Instead, Tampa-based Because, which was launched in November 2020, comes in to provide a “Canva-like” editing experience where e-commerce managers can design and publish messages, for example, about delivery and availability, promotions and shipping costs, aimed at driving conversion rates.

“We estimate a dozen to hundreds of hours are saved per month using Because,” Stansbury told TechCrunch. “It is also saving developer hours.”

Though some companies throw around the phrase “no-code,” they still require some coding ability, but Stansbury says Because does not. There is a campaign dashboard featuring different types of content and templates to pull from, very similar to Canva, and the manager can automatically fit in the brand and colors of the store and then change font, text or colors, and drag and drop to see what it would look like live.

Because, e-commerce enablement

Image Credits: Because / app example of campaign development

Because’s “sweet spot,” so to speak, is its rules engine for inventory. Instead of having to go product by product, the engine shows only products with an abundance of inventory or just a few left.

Within the e-commerce industry, the e-commerce software and platform market is expected to be valued at nearly $4 billion in 2022, and triple that by 2032. Companies like Melonn, CommerceIQ, CJ Dropshipping, Gelato and Moonshot Brands are also operating in this space.

Because raised $650,000 in angel investment last year, which enabled the company to grow to over 900 merchants and 150 paying customers.

Now armed with a new infusion of capital, a $3 million seed round, Because plans to grow its product and team; build out integrations with additional c-commerce platforms like Klaviyo, Smile.io and ShipBob; and leverage artificial intelligence to predict the exact message site users need to purchase and to compare their results against other stores in similar industries and geographies.

Harlem Capital led the round, and this is the third investment from them we have reported on in a month, which includes Drip and Glow Labs. Joining Harlem in the investment are Studio VC, North Coast Ventures, Gaingels and angel investors, including certain former Shopify executives.

Meanwhile, Stansbury says Because can drive an average of 38% increase in cart rate, typically in the first 90 days of integration. Her addressable market is quite large already — it is currently on Shopify, where there are over 700,000 merchants with 50 products or more to manage, she added.

“Growth has hit a real-life hockey stick, and it has been a team of myself and two engineers for the last year,” she added. “Now we will be investing in sales and marketing and rounding out the leadership team with a head of product and head of sales.”

Amazon launches Smart Commerce in India to help offline stores launch digital storefronts

Amazon said it will help neighborhood stores across India launch their own digital storefronts to better serve their customers, the latest effort by the e-commerce giant as it attempts to leverage the dense network of offline stores in the key overseas market.

Amazon on Wednesday launched Smart Commerce, a new offering that will allow stores to create their own online storefronts and also offer in-store shopping experience to their walk-in customers.

The new offering is built atop Smart Stores, another program the US giant had launched two years ago to help neighborhood outlets serve their walk-in customers. Two years ago, it also launched Local Shops, a program that allows offline stores to sell directly on Amazon. Amazon said stores of any size can sign up for Smart Commerce and the company will provide them assistance with logistics and digital payments.

“We are humbled by how neighborhood stores from across India are taking advantage of our Local Shops on Amazon program to go online and grow their business, with over 1.5 lakh stores already selling on Amazon.in within two years of launch,” said Amit Agarwal, SVP of India and Emerging Markets at Amazon, at a virtual event.

“Today, we are excited to launch Smart Commerce that will enable any store to truly become a digital dukaan, and serve customers with the best of Amazon no matter where they are.”

Smart Commerce will offer a range of features to stores including the ability to digitize billing, manage inventory, as well as a voice and chat-based shopping experience, the firm said. It will start to roll out some of these features in the coming weeks.

Amazon, which has invested over $6.5 billion in its India operations, said over 125,000 neighborhood stores are already selling online using its marketplace.

Amazon, and its chief rival in India, Flipkart, have scrambled to explore ways to work with neighborhood stores across the country in recent years. These mom-and-pop stores offer all kinds of items, are family-run and pay low wages and little to no rent. Because they are ubiquitous — there are more than 30 million neighborhood stores in India, according to industry estimates — no retail giant can offer a faster delivery. And on top of that, their economics are often better than most of their digital counterparts.

Meta is also keeping an eye on this segment. It has partnered with Reliance Retail, India’s largest retail chain, which is bringing several of its commerce offerings to WhatsApp. Google, too, has invested in a startup that is helping stores across the nation serve customers online.

Autochek expands to North Africa after acquiring Morocco’s Kifal Auto

Digital automotive commerce company Autochek has acquired Morocco’s KIFAL Auto for an undisclosed amount, marking the entry of the vehicle marketplace into North Africa.

The deal comes barely a year after Autochek bought Cheki Kenya and Cheki Uganda from Ringier One Africa Media. Prior to the September 2021 transaction, Autochek had bought Cheki’s subsidiaries in Ghana and Nigeria, and partnered with the CFAO Group to launch the network in Ivory Coast. After KIFAL Auto’s acquisition, Autochek is now present in six countries across East, West and North Africa.

Like Autochek, KIFAL Auto links car buyers and sellers, and also, through partnerships, offers several other services including financing and insurance.

“From my first interaction with Nizar and his team at KIFAL Auto, I was so impressed by their passion for delivering effective solutions and their commitment to innovation. They have built an excellent platform and we are thrilled to have them onboard at Autochek to support the work we are doing to improve the automotive finance value proposition in Africa. There are so many parallels in our individual stories and I look forward to a long and mutually-beneficial relationship for years to come,” said Autochek co-founder and CEO, Etop Ikpe, in a statement.

Autochek has expanded to North Africa after buying KIFAL auto for an undisclosed amount.

(L-R) Autochek CEO and co-founder Etop Ikpe and KIFAL Auto founder Nizar Abdallaoui Maane. lmage Credits: Autochek

KIFAL, which was founded in 2019 by Nizar Abdalaoui Maane, is among the leading auto marketplaces in Morocco, one of the largest markets for used and new cars in Africa. Following the latest deal, Maane and the KIFAL auto team join Autochek to lead the company’s expansion efforts in North Africa.

“I have long been an admirer of the work Autochek has done to enable improved experiences across Africa’s automotive value chain. There is so much we can learn from each other, and I am looking forward to bringing my experience and expertise to deliver more game changing innovation in Morocco and beyond. In our Industry and especially in an African context, it makes a lot of sense to continue growing with a large player. Morocco is a gateway into North Africa and I am confident that we can unlock new value and drive further transformation across the board,” said Maane.

Autochek says it has 1,500 dealers as partners across its markets, and has partnerships with more than 70 financing partners including Access Bank, Ecobank, UBA, Bank of Africa and NCBA Bank.

Cars listed on the site go through various stages of inspection, and are rated according to their status and performance. Ekpe said in a past TechCrunch interview that, “The assessments and some algorithmic checks on Autochek’s system help to give a sense of the status and condition of the car, determining whether it is in a state to be financed … because they (banks) do not want a situation where they finance a car and the next day, the engine knocks.”

Autochek said loans are approved in about 48 hours. The company earns by charging a fee to dealers listing on its platforms, in addition to a loan facilitation commission from banks.

Autochek, which in October last year raised $13.1 million in a seed round, is backed by a number of investors including pan-African VC firms TLcom Capital, 4DX Ventures, Golden Palm Investments, Enza Capital, Lateral Capital, ASK Capital and, Mobility 54 Investment SAS, the venture capital arm of Toyota Tsusho and CFAO Group.

 

ZMO.ai secures $8M led by Hillhouse to create AI generated fashion models

With breakthroughs in machine learning, it’s no longer uncommon to see algorithmically generated bodies that can move and talk authentically like real humans. The question is now down to whether startups offering such products can achieve a sustainable business model. Some of them have demonstrated that potential and attracted investors.

ZMO.ai, founded by a team of Chinese entrepreneurs who have spent years studying and working abroad, just closed an $8 million Series A financing round led by Hillhouse Capital. GGV Capital and GSR Ventures also participated in the round.

The startup has found a healthy demand from fashion e-commerce companies that are struggling to hire and afford models due to their growing number of stock-keeping units (SKUs), or styles, as consumer tastes become more changeable. Using the generative adversarial network (GAN), ZMO has created a piece of software to help them create virtual full bodies of models by defining simple parameters like face, height, skin color, body shape, and pose.

“Traditionally, the entire cycle of garment manufacturing may take two to three months, from design, fabric selection, pattern making, modeling, to actually hitting the shelves,” says Ella Zhang, ZMO’s CEO and co-founder, a former engineer at Google and Apple.

“We are flipping and shortening that process. [Customers] can now test a piece of clothing by putting it on a virtual model, which can go on the website. Once orders come in, the e-commerce customer can start manufacturing,” she tells TechCrunch. “They can also test what type of people would suit a certain product by trying it out on different virtual models.”

It’s unsurprising that fashion e-commerce operators would find ZMO and its likes a cost-saving tool. Zhang says her company is in early discussion with fast fashion giant Shein, which rolls out 2,000-3,000 new products per day, about potential collaborations.

Screen capture of ZMO’s AI-generated video

We previously covered Surreal, a Sequoia-backed, Shenzhen-based startup also working on synthetic media to replace humans in lifestyle photos and other commercial scenarios. The business attracted a surge in interest as the COVID-19 pandemic hit China’s e-commerce exporters, who were having a hard time finding foreign models as the country went into strict border controls.

Going forward, ZMO is also planning to apply GPT-3, which uses big data and deep learning to imitate the natural language patterns of humans, to create speeches for models. As spooky as it may sound, the feature would make it breezy for e-commerce companies to churn out TikTok videos quickly and cheaply for product promotion.

On average, e-commerce companies spend around 3-5% of their annual gross merchandise value (a rough metric measuring sales, usually excluding returns and refunds) on photoshoots, according to Roger Yin, who worked at Evernote and ran his own cross-border e-commerce business before co-founding ZMO with Zhang.

“Images play a big role in driving e-commerce sales. The problem is that the [sales] cycle is short but the cost of images is high,” Yin observes, adding that costs can be even higher for fashion companies with a quick turnover of styles. The goal of ZMO is to reduce the costs of photoshoots to 1% of GMV.

Right now, 80% of ZMO’s customers are based in China, but it’s working to attract more overseas users this year using its new financial infusion. Operating with a team of 30 staff, the startup boasts 30 “medium and large-sized” customers, including Tencent-backed Chicv, one of Shein’s numerous challengers, and over 100 “small and medium” customers, such as dropshipping sellers.

ZMO’s other co-founders include Ma Liqian, a Ph.D. in computer vision who graduated from Belgium’s KU Leuven, and Yang Han, who previously worked on AI-powered styling at Tencent and SenseTime.

TechCrunch+ roundup: DTC data strategy, starting up solo, insuretech growth versus risk

Because solo founders don’t have to run decisions past anyone, they exert near-total control over their startup’s mission.

But you’ve got to pay the cost to be the boss: A shot-caller must be comfortable with making decisions under pressure and needs to be adept at fundraising, recruiting, onboarding, managing … well, everything.

According to Russ Heddleston, who founded DocSend before it was acquired by Dropbox, lone wolves tend to fare better with investors: His analysis found that one person can raise an average of $3.22 million after 42 meetings, but teams of four or more need to book 30 meetings to raise $1.7 million.

But fundraising is only one part of a founder’s journey. If you can’t connect with an investor who can help you find and fill in your gaps with regard to talent or expertise, you can’t build a sustainable company.

Speaking as a veteran of multiple early-stage startups — I would much rather work at a company that is led by a team. This tends to foster a collaborative work culture, but it also makes it easier to pivot when needed, and the work is less ego-driven.

In a TC+ guest post, Heddleston identifies four factors to weigh before you decide to start up alone, along with some ideas for solo founders who need to build support systems.


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On Tuesday, May 24, at 11:30 a.m., I’m hosting a Twitter Space with Silicon Valley-based immigration attorney Sophie Alcorn.

If you have questions about working and living legally in the U.S. while you pursue a career in tech, please join the conversation. To get a reminder before the chat, follow @TechCrunchPlus.

Thanks very much for reading, and have a great week!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

How to evolve your DTC startup’s data strategy and identify critical metrics

Piggy bank with folding rule and spirit level against a white background

Image Credits: deepblue4you (opens in a new window) / Getty Images

Most e-commerce startups use the same major platforms and analytics tools to gather data for the dashboards that measure the health of their businesses.

As a result, most direct-to-consumer companies make the same mistakes when it comes to refining raw transactional data, according to Michael Perez, director of growth and data at M13.

The calculation errors hard-wired into platform data can lead teams to miscalculate key metrics, “drastically overestimate their customer lifetime value, and overspend on marketing campaigns,” says Perez.

He identifies two common data mistakes: creating metrics at the wrong level of granularity and using downstream metrics that usually result in data silos.

“We’re generally big fans of plug-and-play business intelligence tools, but they won’t scale with your business.”

Here come the single-digit SaaS multiples

Image Credits: Karolina Noring (opens in a new window) / Getty Images

SaaS startups have seen smooth sailing, but in this ongoing downturn, stormy weather is on the horizon.

The days of double-digit revenue multiples are soon coming to an end — public software companies barely growing at 40% are trading at about 10x revenue, which means startups who can’t sustain that pace may see their valuation multiples dip to the single digits, Alex Wilhelm found in his analysis of data from the Bessemer Cloud Index.

“The future likely holds down rounds, flat rounds and what I expect will be some dramatic implosions.”

To win insurtech 2.0, focus on underwriting before growth

According to Jamie Hale, CEO and co-founder of Ladder, the first wave of insurtech startups have focused on driving growth at the expense of managing their underlying risk.

“Focusing on customer experience on the front end leads to rapid growth indeed,” says Hale, “but failing to focus on underwriting on the back end can lead to a very large number of claims, very quickly.”

Hale offers five tips that insurtech startups can employ to improve underwriting innovation, and consequently, the overall customer experience.

5 lessons from ‘Star Wars’ that can transform startup managers’ strategies and tactics

Image Credits: Natalia_80 / Getty Images

The “Star Wars” saga is based on a storytelling structure developed by Joseph Campbell, a writer and literary professor who conceived of “the hero’s journey.”

Consisting of 12 stages, his archetype calls for a protagonist who leaves ordinary life behind after hearing the call to adventure — you can imagine why it’s a popular metaphor among tech investors.

According to Touchdown Ventures President Scott Lenet, Jedi Knight Obi-Wan Kenobi offers five discrete lessons for founders and investors.

For example, “’I have a bad feeling about this’ is a recurring joke in the franchise — nearly every major character utters the line at one point or another,” writes Lenet.

“These are also words to live by for corporate and startup leaders, because they are an emblem of awareness and proactivity.”

How to evolve your DTC startup’s data strategy and identify critical metrics

Direct-to-consumer companies generate a wealth of raw transactional data that needs to be refined into metrics and dimensions that founders and operators can interpret on a dashboard.

If you’re the founder of an e-commerce startup, there’s a pretty good chance you’re using a platform like Shopify, BigCommerce or WooCommerce, and one of the dozens of analytics extensions like RetentionX, Sensai metrics or ProfitWell that provide off-the-shelf reporting.

At a high level, these tools are excellent for helping you understand what’s happening in your business. But in our experience, we’ve learned that you’ll inevitably find yourself asking questions that your off-the-shelf extensions simply can’t answer.

We’re generally big fans of plug-and-play business intelligence tools, but they won’t scale with your business. Don’t rely on them after you’ve outgrown them.

Here are a couple of common problems that you or your data team may encounter with off-the-shelf dashboards:

  • Charts are typically based on a few standard dimensions and don’t provide enough flexibility to examine a certain segment from different angles to fully understand them.
  • Dashboards have calculation errors that are impossible to fix. It’s not uncommon for such dashboards to report the pre-discounted retail amount for orders in which a customer used a promo code at checkout. In the worst cases, this can lead founders to drastically overestimate their customer lifetime value (LTV) and overspend on marketing campaigns.

Even when founders are fully aware of the shortcomings of their data, they can find it difficult to take decisive action with confidence.

We’re generally big fans of plug-and-play business intelligence tools, but they won’t scale with your business. Don’t rely on them after you’ve outgrown them.

Evolving your startup’s data strategy

Building a data stack costs much less than it did a decade ago. As a result, many businesses are building one and harnessing the compounding value of these insights earlier in their journey.

But it’s no trivial task. For early-stage founders, the opportunity cost of any big project is immense. Many early-stage companies find themselves in an uncomfortable situation — they feel paralyzed by a lack of high-fidelity data. They need better business intelligence (BI) to become data driven, but they don’t have the resources to manage and execute the project.

This leaves founders with a few options:

  • Hire a seasoned data leader.
  • Hire a junior data professional and supplement them with experienced consultants.
  • Hire and manage experienced consultants directly.

All of these options have merits and drawbacks, and any of them can be executed well or poorly. Many companies delay building a data warehouse because of the cost of getting it right — or the fear of messing it up. Both are valid concerns!

Start by identifying your critical metrics