Hey — It’s Nico.

After years of writing about what happens with startups in San Francisco, I’m finally in the city!

I won’t be doing a meetup because I don’t have that much time to organize it.

But I’d love to grab a coffee with some of you. I’ll be here until March 30. Reply to this email if you’re interested!

Today’s edition is brought to you by PartnerHero — hire a fractional CXO for your startup.

Here’s what I got today:

• An analysis of Airtable’s acquisition and shutdown of Airplane 🔥

• The growth of Yerba Marte consumption and startups 📈

Presented by PartnerHero

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This Week In Startups

🫡 ICYMI

Why Stripe created a book publishing house.

3 startup failures and what we can learn from them.

🔗 Resources

5 lessons I got from my failed startup.

How AI creates opportunity in traditional industries.

How to pick the right venture studio.

3 failed startup founders share 8 takeaways.

4 steps to building and sustaining moats.

📰 News

A16z is looking to secure $7B In new funds. 

Sifted’s survey shows 49% of founders are considering quitting their startup this year.

Monzo hits $5B valuation as it looks at US expansion.

Spain temporarily bans Sam Altman’s crypto Worldcoin over privacy concerns.

Alumis raises $259M to develop therapies designed to address immune dysfunction. 

Todyl raises $50M in Series B round to enhance its all-in-one security platform.

Banking-as-a-Service startup Griffin secures $24M.

🤝 From Community

Stephanie Vogel won a free feature in Failory after referring 5 friends. She is working at WorldUpstart.

Starting in September, WorldUpstart Accelerator will help Life Sciences, MedTech, and Digital Health companies enter the US market and achieve fast traction.

Fail(St)ory

Airplane's Last Flight

Earlier this month, Airplane.dev, the developer platform for internal tools, ceased operations.

Founded in 2021, Airplane aimed to be the go-to tool for creating internal business apps, streamlining the development processes for developers. Their focus lay in automating various aspects of development, including UI, authentication, permissions, and audits.

During its initial year and a half, Airplane experienced significant growth:

• The team expanded from 12 to over 20 members.

• They successfully onboarded numerous new customers.

• In 2022, they secured $32 million in Series B funding.

However, in 2023, the company's revenue growth rate stalled, and several engineers departed.

In December of the same year, the CEO announced Airplane's acquisition by Airtable, but it soon became evident that this acquisition was atypical. 

Airtable's interest was not in Airplane.dev's product, technology, or customer base, but rather in acquiring Airplane's CEO to lead their new AI initiative. It was essentially an aqui-hire.

Airplane’s employees were offered positions in Airtable and were given signing bonuses to compensate for the loss of equity from the shutdown.

The customers, on the other hand, were abandoned. The shutdown of Airplane meant that all the tools that they had spent time and resources developing were now useless.

Reasons for Failure

Benjamin Yolken, a former employee of Airplane.dev wrote a compelling article analyzing Airplane’s shutdown. There are a few interesting takeaways:

• Airplane still had “tens of millions of dollars in the bank, a great team, relatively happy costumers, low churn, and solid revenue growth.”

• Yolken argues that the acquisition terms were unfavorable, given the company’s potential for sustained expansion.

• The primary reason behind the acquisition, according to Yolken, was that the CEO was “tired of the startup grind” and wanted a less stressful position within Airtable.

While Yolken's perspective is insightful, it's essential to consider some additional factors contributing to Airplane's demise:

• The company's stagnant growth likely impeded its ability to secure further funding, putting it at risk of becoming a “Zombie Startup.”.

• The decision was not only up to the CEO. The investors probably pushed hard for the acquisition, given that they were also investors in Airtable.

What Could Have Been Done Differently

As I've pointed out earlier, the biggest losers in this takeover were the customers of Airplane who had to rebuild their internal apps using other alternatives. 

Yolken is correct in saying that this broke the trust of these customers and that the situation could have been handled better. He suggests three alternative approaches to the acquisition:

• Waiting for a buyout offer that included keeping the product going.

• Selling the Airplane technology to another company that would keep improving it. 

• Making the product open-source.

None of these happened, and so there’s a new opportunity in the internal tool space, with many companies looking for alternatives to the now-shuttered Airplane.dev.

Trend Radar

Yerba Mate

As an Argentine, I've always been struck by how few countries embrace yerba mate with the same fervor as we do. If you ever visit Argentina (or many other Latin American countries), you'll notice that mate is ubiquitous: in schools, offices, or any gathering place, there's always a mate being shared around.

Lately, however, it seems like the rest of the world is catching on to what we've known for generations. It seems like more and more, the American public has started to realize how great mate is, and new startups have started to catch on.

For instance, the renowned neuroscientist Andrew Huberman recently announced he was partnering with Mateina to bring their yerba mate energy drink into the American market.

While as an Argentine, I'm tempted to point out that mate traditionally isn't consumed as an energy drink, the appeal of their product is undeniable.

This phenomenon is part of a broader trend: Guayaki, another yerba mate company, has recently raised $75M in funding, indicating a significant interest in the market.

Additionally, a quick look at Google Trends reveals a noticeable uptick in searches related to yerba mate over the past few years. It seems the world is finally waking up to the wonders of mate.

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That's all of this edition.

Cheers,

Nico