🦄 From Unicorn to Shutdown
The downfall of Convoy, how Duolingo retains users, and the origin of Unicorns

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Hey — It's Nico.
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🦄 Story: Convoy, From Unicorn To Shutdown
🔗 Weekly Picks
⚰️ Failed Startup: From €2M Seed Round To Bankruptcy
🚀 Growth Tactic: How Duolingo Retains Users
📈 Trend: The Origin Of Unicorns
📊 Strategy: The Challenge of Freemium
🦄 Story: Convoy, From Unicorn To Shutdown
Digital freight brokerage Convoy, once valued at $3.6 billion, recently announced it will cancel all shipments and shut down operations.
Convoy, a digital freight brokerage valued at $3.6 billion (!), announced yesterday that they are canceling all shipments and shutting down operations
What happened and what does it mean for other supply chain tech companies?
In short, it was a liquidity crunch: Convoy has… twitter.com/i/web/status/1…
— adam keesling (@adam_keesling)
Oct 19, 2023
Convoy, which connected shippers with carriers, thrived during a period of booming demand in the industry.
This decline has been attributed to a severe liquidity crisis due to a combination of rapid growth, and delayed payments by shippers.
With venture funding harder to come by, the company was forced to take on debt. The loans had strict covenants to protect the lenders, which were breached when Convoy's margins dropped, forcing the company into liquidation.
Diversifying their sources of capital, maintaining stronger financial reserves, and closely monitoring market conditions could have helped them weather the storm.
What's next for the freight brokerage industry remains uncertain. Healthy firms may acquire struggling ones, while bankruptcies may become more common.
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⚰️ Failed Startup: From €2M Seed Round To Bankruptcy
The e-bike industry faces another setback with Revonte, a Finnish e-bike drive system manufacturer, declaring bankruptcy and putting its intellectual property (IP) up for sale.
This development adds to the recent challenges in the e-bike sector, including VanMoof's bankruptcy and subsequent acquisition by Lavoie, concerns about Flyer's performance, and the headline-grabbing dispute between Cowboy and eBikeLabs.
Revonte, which secured a €2M Seed round in 2019, struggled to secure additional funding, leading to its bankruptcy filing.
The e-bike market has seen a slowdown in sales post-COVID-19, prompting the need for market consolidation.
Revonte gained recognition for its Revonte One e-bike drive system featuring an integrated automatic stepless transmission, which is popular among riders.
The company had been seeking funding since 2022 to develop a lighter-weight e-bike motor.
Now, in the bankruptcy proceedings, it is urgently selling its IP.
🚀 Growth Tactic: How Duolingo Retains Users

Duolingo is one of the world’s most successful learning-based businesses. In 2022, it made nearly half a billion dollars in revenue (a 46% increase from the year prior) and had 16.3M daily active users.
While MIT's research indicates a mere 4% retention rate for online courses, Duolingo excels with a 55% daily active user retention rate by designing to create habits.
First, they create triggers using emotional manipulation through their owl mascot: “You made Duo sad 😢” or “Keep Duo happy,” and incorporate push notifications, email reminders, etc.
Then, the product creates routines.
Duolingo’s customer experience is full of psychological strategies that get people hooked on the “routine” of learning a language, including pre-commitment, social motivation, and goal gradient effect & chunking.
The crowning part focuses on rewards.
Celebration, achievements, and badges leverage the psychological phenomenon known as Confirmation Bias, which asserts that people naturally favor information that aligns with their pre-existing beliefs and actions.
How can you leverage the Habit Loop (Trigger, Routine, Reward) model to design for great user engagement and retention?
📈 Trend: The Origin Of Unicorn
A recent Endeavor Insight study analyzed the career paths of 100 top unicorn founders in the U.S. and another 100 in key emerging markets.
Key findings from the study include:
Global Citizen Founders
A significant 55% of top U.S. unicorn founders are either immigrants or second-generation immigrants. 32% of unicorn founders in emerging markets also have immigrant backgrounds.
Non-Elite Education
Only one-third of unicorn founders have a Bachelor’s degree from a prestigious university. Slightly less than half pursued master's or PhD programs at an elite school.
Science and Engineering Education
61% of founders majored in science and engineering, while business majors comprised only 19%.
Experience Matters
Most unicorn founders gained their foundational experience at startups, often holding C-suite positions or growing within the ranks. Approximately 49% of the founders are serial entrepreneurs.
On average, unicorn founders had a decade of work experience following their undergraduate education.
Emerging Markets vs. U.S. Unicorns
Emerging market unicorns frequently focus on solving real, large-scale problems, with a strong presence in fintech, e-commerce, and logistics. U.S. unicorns follow VC fads and span various high-tech sectors, including blockchain and cryptocurrency.
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📊 Strategy: The Challenge of Freemium

Equals CEO Bobby Pinero last year decided to make their spreadsheet platform free. The aim was to drive massive adoption and mimic the success of companies like Notion, Figma, and Airtable.
Initially, the move to freemium seemed to work, with a significant increase in sign-ups and daily usage.
However, over the next six months, the SaaS startup faced several challenges, including a drop in customer retention and conversion of free users to paid subscriptions.
The root of the problem lay in a lengthy onboarding process and a complex user funnel. Despite introducing innovative features, the business couldn't regain its momentum.
After evaluating the situation, the company decided to introduce more friction by ending the free plan and requiring credit card information for a free trial.
Surprisingly, this decision led to increased growth and user engagement.
The experience taught Equals that adding some friction, such as requiring a trial commitment, creates a sense of urgency and results in a more engaged user base and better business outcomes.
While Equals may revisit a freemium model in the future, the focus now is on building a successful pricing strategy and creating a cutting-edge product.
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That's all of this week.
Cheers,
Nico
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