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š¶ Bessemer bets big on AI
Bessemer's billion-dollar bet, Vice files for Chapter 11, plus our 8 favorite links of the week
Hola š
Memorial Day is 11 days.
That means that you have 11 days to lock in important meetings before summer officially starts.
After that?
Good luck getting on the calendar before September.
If you think weāre right, wrong, way wrong on any of the stories this week, let us know in the comment section.
This week's episode is brought to you by ā¦ Confluence.VC Recruiting.
Letās be honest. Hiring investors SUCKS.
You blast out a JD you copied from other online postings, get flooded with applications from unqualified candidates through LinkedIn, and youāre left filtering through a stack of trash hoping to find a gold nugget.
Hope is not a strategy, and this is not how great teams are built.
We run the investor hiring process from start-to-finish, and we help funds find, vet, and hire from the top community of venture talent. No more trash digging; gold just shows up at your door.
Letās get into this weekās piece.
This Week in Venture
Bessemer bets $1b on AI š°
Last week, Bessemer Venture Partners raised $1 billion in their latest fund focused on AI.
Why it matters: Bessemer has existed for over a century, they have invested in some of the biggest winners over that time period, and they have built up one of the most-established brands in the industry.
When they make moves like this, others take notice.
The fund wrote over the summer that they believed that AI generation was the next platform shift. That was a bold statement at the time, but it has become a shared belief in the venture world since they made that statement (this and this were published months later).
This latest fund is putting money where their mouth is.
To get up-to-speed on AI, check out Bessemerās generative AI report from Talia Goldberg.
What happens next: The rest of the startup market is hurting, but AI funding keeps holding things afloat. Weāve already seen an explosion of AI funding announcements, and it looks like that isnāt going to change any time soon.
Predicting what happens next is tricky.
Things are moving faster than ever, and itās become impossible to predict the next two quarters, much less the next two years.
One thing that weāre confident in is that every company will be forced to adopt some elements of AI if they want to compete. If youāre a business owner and you choose not to, youāre playing with a bum hand.
Vice shuts it down š
Vice filed for Chapter 11 bankruptcy protection earlier this week, and it plans to sell itself to a group of creditors for $225 million.
That number doesnāt seem small until you realize the company was valued at $5.7 billion in five years ago.
Talk about a turn for the worst.
Itās the latest in a string of digital media companies to stumble recently after advertising revenue became harder to come by. Viceās filing also made it one of seven large companies to head to bankruptcy court in a 48-hour periodāthe largest number of filings during a two-day period since 2008, according to Bloomberg.
Why it matters: Vice is the latest reminder: building your business on attention alone is building a house on sand.
Vice made a name for itself by running cutting edge journalism focused on uncovering corruption and big-name stories in third-world countries. That worked for the company, and it helped build their brand from zero to one.
Then they realized there werenāt enough edgy stories to cover in order to get the type of attention they wanted.
So they made the same mistake that other media companies have played and started prioritizing attention over every other metric.
So as the media company evolved, it started prioritizing the wrong kind of attention.
They put out more news, but less were worth sharing. The ones that were being shared were typically being shared for the wrong reasons.
That created a polarizing view for advertisers which ultimately resulted in ad dollars being pulled back. Once this happened, it became too difficult to unwind.
For a more detailed breakdown, read Adamās take on the collapse. Itās worth checking out, and heās worth a follow.
Vice was supposed to be the next CNN.
At their peak, they had a $5.7B valuation and turned down an acquisition play from Disney.
Now, Vice is the latest new media group prepping for bankruptcy.
What happened to this media giant? A few thoughts.
ā Adam Ryan š¤ (@AdamRy_n)
1:00 PM ā¢ May 12, 2023
What happens next: The shareholders of Vice will lose most if not all of their principal, but thatās not what weāre focusing on. Weāre focused more on lessons that other content creators can take from this collapse.
Business is a series of chess moves, and avoiding mistakes is as important as doing the right thing. In Viceās case, their mistake was abandoning their core competency (cutting edge journalism) in exchange for polarizing news catering to the woke crowd.
Traditional media businesses are fragile institutions, and once the right kind of attention dies off, so does the entire business. Vice had nothing to offer businesses other than advertising slots, and those advertising slots began to lose appeal when the content skewed away from its original format.
Being reliant on a single source of income means that there is a single point of failure.
Independent media arms understood this from the start, and most of the notable independent businesses today have already incorporated multiple sources of income (subscriptions, advertising, digital products, consulting services, etc.) as a way to de-risk themselves. We do this ourselves and can vouch that it is a far better way to build a business compared to advertising alone.
Links We Like
š¢ After 18 Months, Your Investment Probably Isnāt Getting Marked Up: Sobering statistics from AngelList
š§² Are you attracting the best audience? Scale isnāt everything
šŗ The Unified Content Business Model: Ben Thompson breaks down the biggest issues with media businesses today
šØ Ultimate Design Guide: 500+ design resources to bookmark
š¤ The AI Hot 75: NFX shares the startups worth watching
šŖ Favorite Rules & Razors: George Mackās favorite rules for better thinking
š§ Thereās An AI For That: AI database for thousands of tasks
šÆ Best Venture Capital Recruiters: 29 of the best recruiters weāve found
Have an article you like that we should include in this section? Let us know by responding to this email.
What Weāre Learning
Email CTRs vs. web CTRs
Over the past 30 days, weāve tested engagement of our newsletters based on where they are discovered (inbox vs. online). The results surprised us.
CTRs for posts delivered through email over this period were 5.10%. Not bad.
CTRs for posts discovered online (through search, Twitter, LinkedIn, Reddit, or another platform)? 13.61% - 2.67x higher engagement.
The biggest takeaways from this experiment?
Always share your work on other platforms. Youāre leaving attention on the table if you donāt.
Give readers on other platforms a reason to click. Platforms like Twitter, LinkedIn, and Google are free; your audience is there to consume information. Hint at what information you are offering in exchange, and tweak this based on what works for that platform. Hereās an example of how we tease newsletters on Twitter.
Find ways to re-engage stale newsletter subscribers. Not all of your email list will be active readers. Experiment ways to re-engage those that have fallen off, whether thatās through giving away valuable resources for free, asking for input on what type of content theyād like to see, or something else. (Tip: beehiiv makes it easy to segment and send emails based on however you decide to split up your email list.)
Tools: beehiiv
Tweet of the Week
OpenAI cap table
This is INSANE.
Sam Altman saying he owns 0% equity in OpenAI.
Surely there's something more to this story.
Otherwise, @sama is just a very, VERY unique person.
ā Sam Parr (@thesamparr)
7:27 PM ā¢ May 16, 2023
Incentives rule the world.
Donāt trust people without skin in the game.
Together with Brex
Wait ā¦ you guys manage your spend?
Obvious statement alert: managing invoices and team spend is a nightmare.
Chasing down receipts, uploading to a spreadsheet, sending to another team to approve, and reimbursing your employees sounds ā¦ super fun.
Brex takes this archaic process from the Stone Ages to the modern era by giving finance teams the tools they need to operate. Dashboards, automations, integrations, and financial modeling instead of manual work that makes you want to reconsider jobs.
How'd we do this week? |
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