Hey — It’s Nico.

Welcome to another Failory edition. This issue takes 5 minutes to read.

If you only have one, here are the 5 most important things:

• Apostrophe, a telehealth startup, is shutting down — learn why below.

• The definitive framework for scalable user acquisition.

• OpenAI launches new tools to help businesses build AI agents.

• Flagship startup raises $200M in pursuit of ‘scientific superintelligence’.

• Manus AI is a new AI Agent from China that beats GPT in the benchmarks — learn more below.

Let’s get into it.

This Week In Startups

🔗 Resources

How engineering for survival creates unstoppable companies.

The definitive framework for scalable user acquisition.

Simple design principles every engineer should know.

Make something heavy.

📰 News

OpenAI calls for US government to codify ‘fair use’ for AI training.

Meta is launching Community Notes in the US next week.

Google DeepMind unveils new AI models for controlling robots.

OpenAI launches new tools to help businesses build AI agents.

💸 Fundraising

Omni raises $69M to design tools that help companies better analyze their data.

Flagship startup raises $200M in pursuit of ‘scientific superintelligence’.

Cartesia, a voice AI startup, raises $64 million Series A.

Shield AI raises $240M to commercialize its AI drone tech.

Fail(St)ory

Skin Deep Trouble

This week, Apostrophe, a skincare startup known for delivering personalized dermatology treatments right to users’ doors, announced it’s shutting down.

Just two years ago, Apostrophe seemed set for success. It was acquired by telehealth leader Hims & Hers for 190 million, had thousands of satisfied users, and was positioned perfectly for growth. Yet today, Apostrophe is closing permanently. So, what exactly was Apostrophe, and why did things fall apart?

What Was Apostrophe:

Apostrophe was an online dermatology platform that allowed people to treat common skin concerns—like acne, rosacea, and aging skin—from the comfort of home.

The startup connected users directly with certified dermatologists through a simple digital interface. Patients uploaded photos, answered brief medical questionnaires, and then received personalized treatment plans designed specifically for their skin issues.

To streamline the experience even further, Apostrophe worked with partner pharmacies to deliver prescriptions directly to customers’ doorsteps. This eliminated traditional hurdles like scheduling appointments, traveling to clinics, and waiting in pharmacy lines, making professional skincare easier and more accessible than ever.

Originally launched as YoDerm in 2012 in Berkeley, California, Apostrophe rebranded in 2019, setting its sights on a broader audience. The strategy paid off, catching the attention of Hims & Hers, which acquired Apostrophe in 2021 for around 190 million. Even after the acquisition, Apostrophe continued to operate under its own brand, keeping its specialized focus on dermatology separate from the broader health and wellness services offered by Hims & Hers.

The Numbers:

• 📍 Founded: 2012 (originally as YoDerm), rebranded in 2019

• 💰 Acquisition: 2021, acquired for $190 million

• 👩‍⚕️ Specialization: Personalized teledermatology (acne, rosacea, anti-aging)

• 📦 Model: Online diagnosis, home-delivered prescriptions

• 🏁 Shutdown: March 2025, after 13 years of operation

Reasons for Failure: 

• Shift in Strategic Priorities: After acquiring Apostrophe, Hims & Hers significantly pivoted its focus toward weight-loss medications—a market boosted temporarily by shortages of drugs like Ozempic and Wegovy. When the FDA recently announced the end of this shortage, Hims & Hers faced sudden stock declines and intense pressure to streamline operations. As a result, Apostrophe’s niche dermatology offering was deprioritized, as the parent company refocused resources on its core business to stabilize growth.

• Limited Market Size: Apostrophe’s core market—teledermatology for acne, rosacea, and anti-aging—proved smaller and less lucrative than initially expected. Despite its promising concept, the niche simply wasn’t big enough to sustain the ambitious growth required after a large-scale acquisition.

• Operational Inefficiencies: Maintaining Apostrophe as an independent brand created redundant operations within Hims & Hers, leading to higher overhead and unnecessary complexity. Consolidating dermatology services into Hims & Hers’ primary platform was an obvious solution for reducing costs and simplifying processes.

• Misaligned Brand Positioning: Apostrophe positioned itself around dermatological skincare and beauty treatments. Meanwhile, Hims & Hers sought a broader identity as a healthcare tech platform, distancing itself from the narrower beauty and skincare market. This mismatch meant Apostrophe no longer fit comfortably within the parent company’s long-term vision.

Why It Matters: 

• Entrepreneurs often view acquisitions as the ultimate win, but Apostrophe’s closure highlights that integration is as critical as the deal itself. A poor integration strategy can undermine even strong businesses.

• Specialized niches can be powerful, but maintaining autonomy within a larger corporation can dilute their impact if not strategically managed.

• External factors unrelated to your core product—like the FDA announcement impacting Hims & Hers—can have unexpected ripple effects. Entrepreneurs must stay agile and proactive, especially post-acquisition.

Trend

Manus AI

Last week, a Chinese startup called Butterfly Effect decided to shake things up in the AI world by announcing Manus AI—a platform that claims to be the first fully autonomous AI agent. No hand-holding, no nudging—it supposedly just gets things done on its own.

If true, that’s a big deal. We’ve already seen AI agents from OpenAI, Anthropic, and Google making waves, but most of them still require user prompts, human verification, or at least some level of supervision. Manus, on the other hand, claims to be a different breed—one that can operate completely independently, break tasks down into steps, and execute them without intervention. In other words, it wants to move past being an assistant and start acting like an actual worker.

Why It Matters:

• The Agentic Era Grows: Manus is a new milestone in the rise of autonomous AI agents, claiming to outperform GPT-based models like OpenAI’s DeepResearch.

• A glimpse into AGI: Manus’s developers have called it “a glimpse into AGI,” hinting that this is more than just another task-completing model. The big idea? AI that doesn’t just respond to inputs, but figures things out on its own—an early step toward true general intelligence.

• Privacy concerns are back (again): Like other Chinese AI products, Manus faces questions about how data is handled. China’s National Intelligence Law means the government could potentially access user data, which might make companies think twice before jumping in.

What exactly is Manus?

Manus AI is the latest AI agent to hit the scene, built by Butterfly Effect, a Chinese startup that’s keeping things a little mysterious. It claims to beat OpenAI’s DeepResearch in benchmarks, but details on what that really means are a bit murky.

The way it works is similar to other agentic AI models: instead of just generating text, it interacts with a computer like a human would. It can install software, execute commands, browse the web, and even deploy applications. Think of it like an AI-powered freelancer that actually gets things done instead of just suggesting what you should do.

Manus also has a unique “Manus’s Computer” window, where users can watch the AI work in real-time and jump in if things go sideways. This makes it feel less like a black-box AI and more like an AI-powered intern that you can supervise. That could be a game-changer for startups—imagine setting it loose on a research task and only stepping in when needed, rather than manually guiding it through every step.

Then there’s the pricing—at just $2 per task, Manus is supposedly 10x cheaper than OpenAI’s DeepResearch. That’s a wild claim, and if true, it could make AI-powered automation far more accessible.

That said, not everyone is convinced. There’s a lack of transparency around what it can actually do, and some experts think it’s more hype than reality. We’ve seen this before—AI tools with grand claims that, in practice, don’t live up to expectations. Whether Manus breaks the pattern or joins the list of overpromised AI tech remains to be seen.

For now, Manus is invitation-only, so unless you’re on the guest list, you’ll have to wait and see if it delivers on the hype.

What Can it Do?

1) Analyze Stocks:

2) Make Games in Three.Js

3) Create Entire Courses

Help Me Improve Failory

That's all of this edition.

Cheers,

Nico