Hey - It’s Nico.

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

If you only have one, here are the 3 most important things:

• Orbex, a British rocket startup, filed for insolvency this week — learn why below

• The hidden danger of shipping fast.

• OpenAI rolled out Ads in the free and Go tiers — learn why this matters below

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This Week In Startups

🔗 Resources

The Lighthouse Playbook: How founders make friends and influence people.

The hidden danger of shipping fast

The skills that still matter as AI progresses, and how to develop them.

AI doesn’t reduce work — it intensifies it.

📰 News

Reddit looks to AI search as its next big opportunity.

Crypto.com CEO buys AI.com For $70 Million.

Threads’ new ‘Dear Algo’ AI feature lets you personalize your feed.

Spotify says its best developers haven’t written a line of code since December.

💸 Fundraising

Humanoid robot startup Apptronik has now raised $935M at a $5B+ valuation.

Human brain-based AI startup raises £6m.

AI fragrance startup Osmo raises $70M.

Runway raises $315 Million to advance AI video and world models.

Fail(St)ory

Close to Orbit

Orbex was the UK rocket startup that was supposed to prove Britain could launch its own satellites from home. 

It built its own rocket and got close to first test launches, but the runway disappeared right before the moment that mattered.

What Was Orbex:

Orbex started in 2016 with a pretty clean bet: small satellites needed more launch options, and Europe didn’t have enough. It wanted to be the “book a launch like a service” company for small payloads.

Its flagship vehicle was Prime, a two-stage microlauncher around 19 meters tall.

It wasn’t trying to be SpaceX. SpaceX optimized for big rockets, big payloads, and shared rides. Prime aimed at the opposite end: smaller satellites that wanted a dedicated slot and a schedule they could actually plan around.

Prime also came with two clear angles.

• One: sell a greener rocket, with bio-propane and low-carbon branding baked into the pitch.

• Two: sell a British launch capability, with UK-built hardware and launches from UK soil.

Orbex raised real money and got meaningful public support, including a £20M government investment. But it was still a capital-intensive grind, and by late 2025 it was signaling it needed a lot more cash to reach flight and scale. 

So it went shopping for a rescue. 

The most serious option was The Exploration Company (TEC), a Franco-German startup building Nyx, a reusable capsule for cargo to orbit and back. Orbex had the rocket. TEC had the thing that rides on top.

They signed a letter of intent in January. Right around the same time Orbex shut its rocket engine factory in Denmark, cut 90 people, and that Danish unit filed for bankruptcy.

When the TEC deal fell apart, Orbex said it had no funding or M&A options left. It filed to appoint administrators soon after. Prime was still pre-first-flight, with test launches planned, but it never got the runway to prove itself.

The Numbers:

• 🚀 Founded: 2016

• 💰 Total raised: ~$163M

• 🏛️ UK public support: £20M government investment (convertible-style) + ~£26M government loans

• 🔥 Funding need signaled: ~£120M additional over coming years

Reasons for Failure: 

• They fell into the “scale-up funding gap”: Orbex’s CEO basically described the trap in plain terms: rockets take a long time, cost a lot, and there’s a nasty “scale-up” gap where you’re past early R&D but not yet flying. That’s exactly where Orbex ended up. You’ve built real hardware, headcount is high, suppliers want cash, and revenue is still theoretical until you launch. Orbex was signaling it needed around £120M more to finish development plans, and that kind of number only comes from investors who believe you’re close enough to de-risk.

• “Sovereign capability” attracted money, then constrained options: Being a political project helped Orbex win public backing and attention. It also made the rescue path narrower, because any rescue deal had to satisfy “taxpayer value,” not just founder logic. Reporting said the UK government declined to back the TEC-Orbex deal, and that support was important to making it financeable.

• The acquisition was a Hail Mary with too many moving parts: TEC was building a reusable cargo capsule, and buying Orbex would’ve meant controlling its own path to orbit. But it needed new money, fast execution, and confidence Prime could fly on schedule. Then Orbex shut the Denmark engine factory, cut 90 people, and that unit filed for bankruptcy right as the LOI landed. From there, it stopped being a strategic buy and became a distressed one, and those deals rarely close in time. 

Why It Matters: 

• Vertical integration is not a lifeboat if both halves need cash. 

• Government money is not only runway, it is also scrutiny. 

• The “almost there” stage is where companies quietly die.

Trend

AI Ads are Here

We knew they were coming for a while. Anthropic warned us at the Super Bowl. Sam Altman got pretty upset about it. But now they’re finally here.

As of 3 days ago, ChatGPT is officially showing ads in the Free and Go tiers.

Ads have arrived in AI.

Why it Matters

• “Intent” just moved upstream. Search catches you when you already know what to ask. Chat catches you while you’re still figuring out what you want. 

• The product is now the business model. When monetization depends on what happens inside a conversation, the boundary between “helpful” and “profitable” gets politically fragile.

The OpenAI Ads

After weeks of speculation, we finally see the format.

Ads are clearly labeled as sponsored. They sit at the bottom of answers, visually separated from the organic response. Not blended into the text. Not disguised as advice.

OpenAI is making a few explicit guarantees.

• Ads do not influence answers. The model’s responses are optimized for what’s most helpful to you, not what pays the most.

• Advertisers don’t get your chats. They receive aggregate performance data like views and clicks, not conversation history, memories, or personal details.

• Targeting still exists. OpenAI decides which ad to show by matching advertiser submissions with your conversation topic, your past chats, and your past interactions with ads. The platform uses the context. The advertiser does not see it.

On paper, it seems pretty good. Clear labels. Separation from answers. Privacy guardrails.

But structure matters less than incentives. And incentives are where things get interesting.

The Debate

The pro case is straightforward:

• Free access needs funding. If you want millions of people using powerful models without a paywall, someone has to underwrite it. Ads are the most obvious lever, and arguably the most inclusive one.

• Also, intent in chat is absurdly high. A user asking “What’s the best X for my situation?” is basically a pre-qualified lead. They’re not scrolling. They’re not browsing. They’re asking for a decision.

• OpenAI’s final pitch is that these ads can be less obnoxious than feed ads. Contextual, labeled, and only when relevant. If they stay at the bottom, stay rare, and stay honest, many users will tolerate them.

Still, there are many things to be concerned about:

• Ads introduce conflicting incentives. Even if responses stay untouched, the company now monetizes what happens around the answer. Over time, that pressure can bleed into product decisions. 

• There’s also manipulation risk. Chat is intimate. People share doubts, financial stress, health worries. If revenue ever depends on nudging behavior at those moments, trust erodes quickly.

• And then there’s the enshittification fear. Today the ads are clearly labeled and sit below the answer. Tomorrow, the pressure is to push them higher. Then maybe inside the response. Then maybe not so clearly labeled.

The Trend

I think AI ads are here to stay.

The economics demand it. These models are expensive to run. Usage keeps growing. Subscriptions alone won’t carry the whole thing. If you control high-intent traffic at global scale, you monetize it. 

I also think they will quickly become one of the most important marketing channels.

Because people are already using GPT to decide what to buy. I am. Most of my recent purchases started with a prompt. Tools. Software. Even random consumer stuff. The research phase is collapsing into a conversation.

If that same interface starts attaching clean, relevant buy links to those moments, conversion rates will be absurd.

Help Me Improve Failory

That's all for today’s edition.

Cheers,

Nico