Hey — It’s Nico.

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

These are the 5 most important things:

• Exosonic, a startup trying to bring back supersonic flights, has shut down — learn why below.

• SoftBank turns a profit as Indian IPOs boost Vision Fund.

• AI startup Writer secures $200M at $1.9B valuation.

• Acai Travel raises $4M to reinvent travel operations with AI.

• OpenAI and many other startups have been spending millions on domain names— learn why below.

This issue is sponsored by Notion for Startups, offering 6 months free of Notion with unlimited AI for Failory’s subscribers.

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This Week In Startups

🔗 Resources

Andrew Chen on learning how to describe your product idea.

Why personal brands are overrated and what works better.

A guide on building a GTM strategy from scratch.

How to price payments in vertical software.

Clay’s approach to B2B demos.

📰 News

Anysphere acquired AI coding assistant Supermaven to enhance its main product, Cursor.

SoftBank turns a profit as Indian IPOs boost Vision Fund.  

Opendoor lays off 300 employees.

Forerunner Ventures raises $500M to back early-stage tech startups.

Faber’s third fund secures $34M to back deep tech startups.

💸 Fundraising

AI startup Writer secures $200M at $1.9B valuation.

MoradaUno lands $5.6M to streamline apartment rentals in Mexico.

Parker raises $20M to build banking solutions for e-commerce businesses. 

Acai Travel raises $4M to reinvent travel operations with AI.

Fail(St)ory

The New Concorde?

This week, Exosonic, a startup aiming to bring back supersonic travel, announced it is shutting down.

Much like the Concorde, which left the skies due to its high costs and technical hurdles, Exosonic couldn’t overcome the steep challenges of making supersonic flight a viable business.

What Was Exosonic: Exosonic was founded in 2019 and, one year later, joined the YC Winter 2020 cohort. From the beginning the company set out to do one thing: to bring back supersonic flight. 

A key innovation that set Exosonic apart was their work to eliminate the notorious sonic boom, the sound barrier-breaking noise that grounded previous attempts at commercial supersonic travel.

Initially, Exosonic’s focus was on creating a commercial supersonic aircraft that could offer faster travel without disrupting communities below. However, investors had different priorities. They encouraged a pivot towards military applications, viewing defense contracts as a faster path to revenue.

Exosonic adapted by shifting resources to develop a supersonic Unmanned Aerial Vehicle (UAV), but the change added complexity, stretching the company’s limited resources.

Earlier this year, Exosonic achieved a major milestone with a test flight of their prototype aircraft. While this demonstrated progress, it wasn’t enough to attract the significant capital needed for a full commercial launch.

The Numbers:

• 📅 Founded in 2019.

• 💰 Raised over $6.5 million in VC funding.

• 💼 Joined the Y-Combinator Winter 2020 cohort.

• 📈 Estimated 10–15 years to develop a viable supersonic commercial plane.

Reasons For Failure:

• Long Development Timeline: Supersonic technology is capital-intensive, and investors were hesitant about the extended timeline needed to develop, certify, and launch a commercial supersonic plane. Founder Norris Tie highlighted the massive financial commitment required, estimating that billions of dollars and up to 15 years would be necessary to build a viable product.

• Lack of Engines: One of the biggest roadblocks in the supersonic industry is engine development. Major engine manufacturers have little interest in supersonic flight, preferring to focus on refining conventional jet engines. Competing startups like Boom Supersonic were forced to spend billions developing their own supersonic engines.

• Investor Skepticism on Supersonic Viability: Exosonic’s plans relied heavily on long-term investor confidence to fund the extended development required for supersonic flight. However, many investors were skeptical about the commercial viability of supersonic technology, viewing it as too capital-intensive with an uncertain return on investment. 

• The ‘Valley of Death: Exosonic faced the notorious “valley of death” in defense—a gap between developing tech and securing full-scale contracts. Like many defense startups, Exosonic couldn’t secure the necessary contracts to sustain its R&D efforts.

Why It Matters:

• Exosonic’s pivot to defense highlights the challenges of aligning investor expectations with a startup’s original vision.

• Without key partnerships, like engine manufacturers for Exosonic, even well-funded projects can hit major roadblocks.

• The “valley of death” is a tough hurdle for startups in the defense industry, where moving from concept to contract requires sustained backing.

Trend

Million Dollar Domains

This week, Sam Altman announced that OpenAI purchased the Chat.com domain for $15 million. Unsurprisingly, this decision sparked controversy, with many questioning whether such a hefty price tag for a domain is a wise use of resources. 

You might argue that OpenAI has deep pockets right now, so $15 million could feel like a drop in the bucket. But OpenAI isn’t alone—other startups have also been spending eye-popping amounts on premium domains.

This is actually part of a larger trend. So, let’s take a closer look at which startups are making these big purchases—and why they’re doing it.

Why It Matters:

• The trend raises questions about the balance between bold branding and financial responsibility in early-stage companies.

• A memorable domain can boost brand recognition, helping startups stand out in competitive markets.

• Some of these domain purchases might seem completely insane at first but can pay off in the long term.

The Trend: A few months ago, Friend.com gained attention when founder Avi Schiffmann spent $1.8 million—most of his funding—on the Friend.com domain.

This move immediately sparked controversy, with critics questioning if it was a responsible use of investor money. The story grew so big that it dominated social media discussions and drew mixed reactions from the startup community, with some seeing it as visionary and others as reckless.

Schiffmann, however, stands by his decision, claiming that the domain has already "paid for itself" through the significant media coverage and curiosity it generated, giving the brand a valuable boost right out of the gate.

Public.com, an investment platform, has also spent a big sum on their domain. Leif Abraham, co-founder of Public, shared that they bought the domain name for $900K looking to establish a strong, memorable identity in the crowded finance market. 

RehabPath, a company helping people find mental health treatments, recently bought Recovery.com for $1 million, aiming to create a more positive, hopeful brand image for their services. 

Each of these companies believes the right domain can do more than just look good on a business card—it can shape their brand and help them stand out.

Why This Happens: There are many different reasons why a startup might choose to spend so much on a domain name:

• Publicity: The buzz around Friend.com’s domain purchase helped put it on the map, gaining interest from potential users and investors. Even negative reactions generated valuable attention.

• Brand Image: For startups like RehabPath, a domain like Recovery.com reinforces a supportive, hopeful tone, which is especially important in fields like mental health. A clean, simple name builds instant credibility.

• Memorability: Easy-to-remember domains help users find a brand online, creating a simple, direct path to engage with the company.

• SEO Advantages: A clean, keyword-rich domain can help improve search engine rankings, making it easier for potential customers to find the brand organically.

• Digital Real Estate: High-value domains are like prime real estate on the internet. Even if a business doesn’t succeed, a strong domain holds resale value, offering some security against risk.

So, what do you think?

Help Me Improve Failory

That's all of this edition.

Cheers,

Nico