Finding GTM, China’s crackdown on educational technology, and how to define growth – TechCrunch


Early-stage startups tend to claim that their go-to-market strategy is fully operational. In reality, GTM is a rigid numbers game, and even with a solid plan in place, it can easily be thwarted by common issues like turf battles and poor communication.

Finding the GTM fit is a milestone for any startup that includes everything from expanding the engineering team to launching its first media purchase. But how do you know when you’ve reached that magical moment?

“You have to consider three metrics: gross churn rate, magic number, and gross margin”Says Tae Hea Nahm, co-founder and managing director of Storm Ventures.

High turnover means customers are not delighted, low gross margins mean a poor economic unit, and what about that so-called magic number?

“You can calculate it by taking the new ARR divided by your marketing and sales expenses,” Nahm writes. “But keep in mind that the magic number is a lagging indicator, and it may take a few quarters for you to see a positive result.”


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If you are methodical in your approach to building a larger customer base, it is not difficult to foster consistent growth.

Marketers who change whatever way the wind blows, or blindly follow someone else’s idea of ​​best practices, are less likely to be successful.

“The not-so-secret secret here is that the key to great retention is really simple”Said growth expert Susan Su recently on TechCrunch Early Stage: Marketing and Fundraising. “It’s about creating a product that solves a real and especially persistent problem for people.”

In a conversation with Managing Editor Eric Eldon, Su delved into several topics, including advice on how founders should discuss growth with investors and his methods for developing a sample qualitative growth model.

“I strongly believe that all founders should try to grow,” Su said.

Thanks so much for reading Extra Crunch this week!

Walter thompson
Senior Editor, TechCrunch
@yourprotagonist

How we build a unicorn with AI in 6 years

An adult in a unicorn mask jumps over a chain-link fence

Image credits: Lucas Knappe / EyeEm (Opens in a new window)/ Fake images

Few startups go to market with the exact product that their founders first envisioned.

Today, Tractable is known for developing technology that allows drivers to upload photos of their vehicles after a collision so their AI can assess the damage. However, your first paying customer used Tractable to inspect welds on plastic pipes.

And as fate would have it, that client also fired them just as the founders were raising their first round.

“We found gold with auto insurance,” says co-founder Alex Dalyac, as it was “a huge and inefficient market in desperate need of modernization.”

In an Extra Crunch guest post, he shares several takeaways from the past six years spent climbing a unicorn that hold value to founders of all kinds. Step one?

“Look for complementary co-founders who will become your best friends,” advises Dalyac.

The European VC Market Is So Hot You Can Skip Your Summer Vacation

Alex Wilhelm and Anna Heim continued their exploration of the scorching global venture capital market, this time taking a look at Europe.

To gain perspective, they analyzed data from Dealroom and spoke with four VCs about the continent’s investment climate:

  • Diana Koziarska, SMOK Ventures
  • Vinoth Jayakumar, Draper Esprit
  • Simon, Schmincke, creating
  • Javier Santiso, Mundi Ventures

“There is little indication that what we have seen so far in Europe in 2021 will slow down in the third or fourth quarter,” write Alex and Anna.

“Even though Europe has a reputation for long summer vacations, investors are not expecting a big slowdown, if any, in Europe this sun-drenched quarter.”

Startups and investors are turning to micromobility subscriptions

Image credits: Bryce durbin

“Amid the chaos of the COVID-19 pandemic and the murky road to profitability of shared electric micromobility, a growing number of companies have turned to subscriptions,” writes Rebecca Bellan in a brief on the future of micromobility.

“It’s a business model that some founders and investors say hits the sweet spot of the profit center, an approach that attracts customers who are wary of sharing and paying upfront for a scooter or electric bike, all of which minimizing overheads and asset depreciation. “

What Robinhood’s Warnings About Crypto Trading Say About Coinbase’s Short-Term Future

After noting that Robinhood anticipates a decline in revenue in the third quarter as a result of the crypto trading slowdown, Alex Wilhelm got to thinking about what that forecast means for Coinbase.

“The now public unicorn has lived through crypto ups and downs,” he writes. “A decline in consumer interest in the coming months or quarters is not a big deal, assuming you keep a long enough outlook and the crypto-infused future that your fans are hoping for is fulfilled.”

But it will?

Dear Sophie: Should we look to Canada to retain international talent?

Lonely figure at the entrance to the hedge of the labyrinth that has an American flag in the center

Image credits: Bryce Durbin / TechCrunch

Dear Sophie,

I manage personnel operations as a consultant in several different tech startups. Many have OPT or STEM OPT employees who were not selected in this year’s H-1B lottery.

Companies want to retain these people, but they are running out of options. Some companies will try again in next year’s H-1B lottery, even though they face great odds, particularly if the H-1B lottery becomes a salary-based selection process next year.

Others are seeking O-1A visas, but find that many employees do not yet have the experience to meet the requirements. Should we look at Canada?

– Silicon Valley Specialist

Silicon Valley Communications Expert Caryn Marooney Shares How To Nail The Narrative

Caryn Marooney, right, vice president of technology communications at Facebook, poses for a photo on the red carpet of the 6th Annual Breakthrough Awards 2018 at Moffett Federal Airfield, Hangar One in Mountain View, Calif., On Sunday, December 3, 2017.  (N

Image credits: MediaNews Group / Bay Area News via Getty Images (Opens in a new window)/ Getty Images (image has been modified)

Caryn Marooney, a Silicon Valley communications professional turned venture capitalist, spoke extensively about storytelling on TechCrunch Early Stage: Marketing and Fundraising.

Throughout his time in Silicon Valley, he helped companies like Salesforce, Amazon, Facebook, and more launch products and improve their messaging. In 2019, she left Facebook, where she was vice president of technology communication, and joined Coatue Management as a general partner.

Marooney uses the acronym RIBS to describe his basic strategy for startup messaging: relevance, inevitability, credibility, and keep it simple.

Canada’s startup market soars along with significant global venture capital investment

For The Exchange, Alex Wilhelm and Anna Heim analyzed Canada’s venture capital market in the first half of 2021, and if you’ve been reading their work, you know what’s coming.

Canada, like the rest of the world, was absolutely scorching in the first half.

“Canada’s venture capital results now rival those of the entire Latin American region, with exits and mega deals roughly on par in the second quarter, and a similar number of total venture capital rounds in the period, ”they write.

“That caught our attention.”

Greylock’s Mike Duboe explains how to define growth and build your team

With more venture funds flowing into the startup ecosystem than ever, there has never been a better time to be a growth expert.

At TechCrunch Early Stage: Marketing and Fundraising earlier this month, Greylock Partners’ Mike Duboe delved into a series of lessons and insights he has gained leading growth at a number of high-growth startups, including StitchFix. His advice spanned hiring, structure, and analysis, with many recommendations for where growth teams should focus their attention and resources.

Last mile delivery in Latin America is ready to take off

Thanks to expanding fulfillment centers, seamless logistics networks, and ubiquitous internet access, consumers in many regions can now order food and a new set of kitchen utensils over breakfast and reasonably expect everything to arrive on time. for dinner.

In Latin America, the lack of technological infrastructure makes delivery operations complex, and these supply chains are often managed with spreadsheets, paper, and a pen.

Algorithms that manage delivery routes or dispatch drivers automatically “are almost unheard of in Latin America’s retail logistics industry,” says Bob Ma, an investor at WIND Ventures.

But thanks to growing consumer demand and expanding investment in last-mile delivery startups, Ma says the region is at a tipping point.

Given that Latin America’s middle class has grown 50% in the last decade and e-commerce makes up only 6% of all retail, several unicorns have emerged in recent years, with more waiting behind the scenes.

China’s expected crackdown on educational tech may cool a key sector of startups

China’s educational technology industry is estimated to be worth $ 100 billion, but its leaders are considering a plan that would require these companies to operate as non-profit organizations.

“When it comes to control, the Chinese government does not mind eliminating a few tens of billions of dollars in market capitalization here and there,” writes Alex Wilhelm in this morning’s issue of The Exchange.

“That is not a great system.”




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