Down rounds & exits, layoffs, AI conquering the world, startups pivoting

It’s been an eventful week with a lot to unpack!

Before we dive in, we crossed 13,200 email subscribers and 2,400 LinkedIn newsletter subscribers for this edition. I’m grateful for the active crowd keeping a close eye on the macro news and shifting business and investing decisions accordingly.

A personal thanks to each and every one of you who replied back or DM’d me on LinkedIn, Twitter, Slack, Telegram with positive feedback, success stories derived from the weekly emails, and investment decisions from the list below!

Now back to this week’s revelations…

• Startup calibration during the Founders Weekend. I spent a few days in Greece last week with a hundred startup founders, investors, and VC partners at the annual Eleven VC summit. “Content is king” but Data is queen, and relying on industry insights with boots on the ground is the most powerful lesson there is. It was an enlightening journey with lots of macroeconomic and business lessons I’m still distilling.
• Loom and Klaviyo lessons on valuations in 2023. Klaviyo IPO’d earlier this year and Loom got acquired by Atlassian, two integral moves for the tech ecosystem. Tomasz is a brilliant VC and analyst doing a deep dive into these two deals.
• AI moving as fast as it gets. There’s been an ongoing shift in the dynamics of AI in the past few weeks. ChatGPT is now conversational - you can pass through images and ask for tips, or get an analysis on a whiteboard. There’s a DALL-E 3 integration for ChatGPT that generates images like crazy. Props to Josh Sowin for sharing some creative prompts here. Moreover, Amazon invested $4B in Antropic, and the Claude AI can intercept a PDF and run a deep analysis of severity, priority, impact, efficiency, and even estimate work in terms of billable hours or rates. Wild. Let alone deep fakes that now misrepresent celebrities.
• Google moving back to startup mode. A lot of controversy around the impact of AI, GPT hallucinating on a regular basis, and scraping data at scale. Most social apps and AI tools fired their ethical teams because they couldn’t catch up. But Google is moving back to startup mode - with 10X the velocity they were moving within the past few years. An interesting shift in productivity (and the slow enterprise paces).
• Layoffs aren’t over. For a few months, it felt like we’re in a safer spot. Qualcomm fired 1,200 workers and LinkedIn just announced nearly a thousand staff members losing their jobs. This isn’t something to neglect in the strongest Q4 season for most businesses.
• Apple makes a trip to China. The tech giant has been growing steadily, conquering the stock market. But trade terms with China have been volatile - with the Chinese government recommending its own brands (they have a few great ones) and Apple revisiting manufacturing in India and other Asian countries. That said, iPhone 15 sales in the first 17 days are down 4.5% compared to iPhone 14. This relationship needs some additional bonding.
• The S.C.A.R.F. research process for ads. I’m a proponent of frameworks and workflows for anything marketing (and tech), and Nigel Thomas revealed his SCARF process . It goes through Social, Competitors, Affiliates, Reviews, Forums as a comprehensive guide on compiling the most before running your campaigns.

All in all, Q4 isn’t where we expected it to be. The season has started, but is it business as usual?

Scarcity is still up in the air, with inflation staying where it is while mortgage rates are clocking record high once again. Whether we’ll compensate the financial losses this year is yet to be determined. And Q1 isn’t known for strong revenue targets either.

Always open to personal stories and what you see on your end - hit me up with personalized insights (I’ll keep these private.)

Yours, Mario

My Take

???Better Support Your HR Teams With These 10 Strategies?- CEOs can provide support to their HR teams by acknowledging their importance and integrating HR into strategic decision-making processes . This support is crucial for the overall health of the business, as HR plays a significant role in managing and developing the company's most valuable asset, its people. I think strategy #8 is very valuable, seems insightful.

?? Checkboxes When Prepping for Holiday E-Commerce Season - To prepare for the busy holiday shopping season, online retailers should focus on reviewing and optimizing their technology systems and processes , considering aspects such as cybersecurity, customer experiences, and overall readiness. Taking a comprehensive approach and ensuring all necessary checkboxes are addressed will help retailers navigate the challenges and maximize their success during this crucial time. # 3 seems particularly valuable.

Newsletter Recommendations

?? Stacked Marketer - One of my go-to newsletters and a business that we’ve worked with a while ago on the DevriX front. It is loved by marketers who get hands-on with campaigns, who need to stay up-to-date with frequently changing platforms., who need to get an edge, and who need to achieve outsized results with limited resources, aka performance-focused marketers.

?? The Average Joe - Market trends & insights that are simple, concise, and impactful. This newsletter stands out to me due to the 200,000+ audience that go through market trends and ideas together.

?? The Early Bird - А special 7:00AM newsletter for those in the US, who feel to be at an information disadvantage. This newsletter covers early stories, that will impact the market every day.

?? Morning Brew - Аn absolute classic, the Morning Brew delivers top news from a business-minded angle, and deliver it in a short, easy-to-read, actionable, and entertaining way.

Business Strategy

???X to start charging new users $1/ year in two countries -?X, the service formerly known as Twitter, is introducing a new subscription program called "Not A Bot" in New Zealand and the Philippines. New users joining via the website in these countries will be required to pay $1 a year and verify their accounts with a phone number, aimed at reducing spam, manipulation, and bot activity on the platform.

?? LinkedIn cuts more than 600 workers - LinkedIn is laying off about 3% of its workforce , amounting to approximately 668 roles across various teams. Despite the job cuts, LinkedIn reported annual revenue exceeding $15 billion and continues to grow, while Microsoft is expanding its workforce with the recent acquisition of Activision Blizzard.

?? US tightens curbs on AI Chip exports to China - The Biden administration is imposing tighter restrictions on China's ability to purchase advanced semiconductors in order to limit its access to chips that could fuel breakthroughs in artificial intelligence and military applications. The new rules will significantly constrict exports of AI chips, making it tougher for U.S. companies like Nvidia and Intel to sell their products in China and prevent the introduction of new chips to circumvent the regulations.

?? TikTok beyond the mobile screen ?- TikTok introduces "Out of Phone," an out-of-home solution allowing brands to extend their TikTok content to physical venues like billboards, cinemas, and various other screens in places such as restaurants and airports. This initiative aims to bring the digital TikTok experience into everyday life, expanding its reach and offering brands more diverse advertising opportunities.

?? University loses funding over Israel Stance?- Jon Huntsman, a significant donor and former U.S. ambassador to China and Russia, has halted future donations to the University of Pennsylvania , criticizing its perceived silence over Hamas' actions against Israel. In response, Penn President Liz Magill condemned Hamas' violence as a "terrorist" attack and reaffirmed the university's stance against antisemitism.

Global News

?? Stock futures are softer, with Treasury yields up modestly and oil edging higher. Bitcoin is hovering at just over $28,000.

• S&P: 4,373?(-0.01%)

???The average rate on the popular 30-year fixed-rate loan surpassed 7.5 percent in late September. After a stretch of record lows, rates climbed in 2022 as inflation spiked and the Federal Reserve worked to tame it. The Fed?last hiked?its key interest rate in July, which brought up borrowing costs on a variety of financial products, including mortgages.

• 30-year mortgage rate: 7.99% (+0.16%)
• 15-year mortgage rate: 7.14% (+0.10%)

???Federal Reserve officials are contemplating not raising interest rates in their upcoming meeting, despite various economic and political challenges. Jerome Powell, the U.S. central bank chief, is expected to provide clarity on this policy decision, addressing issues like inflation, rising bond yields, and the broader state of the economy, amidst global concerns like the Middle East conflict and domestic political upheavals.

This week's news are yet again war-ridden. Hopefully next week we have something more pleasant to cover.

• US President Biden lands in Israel for talks with Netanyahu as Palestinian and Israeli officials dispute the cause of the deadly hospital blast in Gaza.
• Two US officials confirm long-range missiles were sent to Ukraine in secret supply meant to take Russians by surprise
• India's top court has ruled in favor of upholding LGBTQ rights, while stopping short of legally recognizing same-sex unions

Investing Updates

If you're more interested in networking opportunities, you can visit ISTAcon in Sofia on October 12th. In any case, let's have a look at this week's offers:

• FrontWave ?- raising up to €1,000,000?to improve breast screening for early cancer diagnosis.?
• MEDIjobs - is raising €650,000 to improve?the hiring process in the medical sector.?
• Tendertec - raising €225,000 to scale its plant-based snacks?in a $5.8Bn market.?

Note: Got a round going that you want to feature - your own business or a portfolio company? Get in touch.

• Digital Marketing Agency - An established digital agency with a high profit margin of 51% and a loyal and returning customer base, with over 150 active clients. The agency has strong organic and direct traffic (92%) from the US, and 1.7K backlinks.Monthly Profit:?$7.3KAnnual Revenue:?$172.3KAge:?4 years
• Engraved Seeds Store -?This thriving business is a leader in the niche of engraved seeds. It generated an annual revenue of $55.3K, and has a high profit margin of 60%. With efficient manufacturing process and over 82% organic and direct traffic.Monthly Profit:?$2.7KB2B Average Order Value:?$964Age:?9?years

• Trading Strategies SaaS ?- This six-year-old platform is a trustworthy source of valuable insights into the world of trading. It generates revenue through various channels including ads, the sale of digital products, and subscriptions. It is supported by 8.3K email subscribers.Monthly Profit:?$4.1KAnnual Revenue:?$52.1KAuthority Score:?35

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