BUSINESS IDEA | STARTUP

Brand Deal Due Diligence 🕵️  

Due or die

Available Domain: Dilagents.com

1. Problem/Opportunity❓

The Problem/Opportunity: Brand deals, just like alarm clocks and going to the DMV, are a necessary evil. They’re a great way for creators to get paid, but compromise the experience for us viewers. Although we’ve figured out a solution…

But when creators engage in brand deals with shady companies brand deals go from being a necessary evil to an evil evil. Take the finance YouTubers who did brand deals for FTX before it collapsed, or all the recent controversy around Honey. Creators need to protect themselves and their brands against working with companies that will damage their reputation. Here’s how they can.

Market Size: The creator economy is valued at approximately $250 billion globally and there are over 200 million creators worldwide

2. Solution ✅

The Idea: A vetting service for content creators to evaluate potential sponsors before entering into partnerships

How it Works:

• Creators and/or creator talent agencies can sign up to the platform

• The site tracks companies that work with large YouTubers and assigns them a risk score based on their industry, product, corporate structure etc. detailing how risky it is to do a brand deal with them

• Users can also request due diligence be completed on a specific company they are looking to work with

• Finally users can track what companies they have worked with in the past and will get notified if there are any issues with these companies that surface in the future

Go-to-market: Begin to selling to mid-sized creators and over time sell into agencies that manage multiple creators

Business Model: Subscription fee for database access and charge one-time fees for specific due diligence requests

Startup Costs: You could start this for a few thousand dollars. The tech is relatively simple and low cost to build, the difficult part will be the risk scoring

3. How You’ll Get Rich 💰

Exit Strategy: Sell to a creator economy platform like Patreon

Exit Multiple: Based on creator economy platform exits you could sell this for 8x - 10x revenue

TOGETHER WITH OMNISEND

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DRUNK BUSINESS IDEA

Black Highlighter

We all used highlighter pens back in our school days. In fact lots of us still use them today. Well it’s time to brung dark mode to the highlighter pen.

With the highdarker (what else could you call it) you can black out any unimportant information in a book or if you need to redact anything shady in a document (sus 👀) then this is the perfect tool for the job.

Available in black and extra black colors.

JUST THE TIP

Trend 📈: Margins App

We love to see apps going viral, and Margins is the latest app that we’ve seen take off recently. It’s an app that helps readers to track and discover books and has been dubbed the “Goodreads killer”. And for good reason. After a viral TikTok and lots of buzz about the app on Twitter Margins has grown from 400 users to 50,000 users in just 10 days. This is also a timely reminder that just because something already exists doesn’t mean you can’t build something better. As Naval famously said: “Build it right, and they will come”.

Business Ideas

• Goodreads for Academic Papers: A platform for academic papers that combines discovery, discussion, and tracking functionality specifically designed for academic papers (from edition #260)

• TikTok for Book Summaries: A mobile-first platform delivering short video summaries of non-fiction books across various genres (from edition #241)

THE MONEYSHOT

How a $975m Exit Made this Founder Miserable

Starting a business and selling it for (almost) a billion dollars is the stuff dreams are made of.

Well this founder did exactly that, but after selling his company he’s more lost than ever before.

This is his story.

Vinay Hiremath has lived the classic Silicon Valley story.

He attended the University of Illinois from 2010 to 2012, studying Materials Science and Computer Science. However, two years into college, Vinay dropped out. He was drawn in by the allure of the startup life.

Vinay started working as a Software Engineer at Backplane, a well-funded Silicon startup that let users build online communities before it shut down in mid-2016. It was at Backplane where Vinay met one of his future co-founders, Shahed Khan, who was just 18 at the time. Shahed joined the startup in lieu of attending college. Like I said, classic Silicon Valley.

A few years later, while trying to scalp tickets to a concert in San Francisco, Vinay met Joe Thomas. Vinay, Shahed and Joe all became close friends and in late 2015 they decided it was time to take the plunge. They decided to start a company together.

They started off with a simple idea. They built a product which aimed to connect companies with expert feedback. They called it Opentest. However, this initial idea struggled to gain traction. They spent 7 months trying to make it work, all to no avail. With maxed-out credit cards and two weeks of runway left the team had one last shot to make it work. This was it.

They decided to scrap 90% of their product’s features and instead focussed on one thing they had built for Opentest…a Chrome extension that allowed users to record their screen and face and decided to decouple it as a standalone video recorder. They named it Openvid and they launched it on Product Hunt in June 2016. And then something magic happened.

The product picked up some steam on Product Hunt. They gained 2,500 new users on the first day and within three months they had more than 10,000 users on the platform. The traction helped the company to raise $600k in pre-seed funding (using this exact deck) and they moved to San Francisco.

In 2017 they repositioned the product to be the go-to solution for replacing written communication within companies, built around their existing core functionality. They also decided to rebrand that same year.

They had founded Loom.

That same year Loom raised a $3.2m seed round to support their early growth efforts. Their primary growth strategy was “product-led growth”, allowing prospects to try the product without obligations and relied on individual signups to gradually pull in their companies, often called “bottom-up SaaS”.

Their strategy worked and in 2019 they raised $11m in a series A round. This set the business up nicely for 2020 which turned out to be a bumper year for the business.

In 2020 Loom's video views increased by 10x, leading to a 712% growth in ARR. Revenues reached $6m by early summer 2020 and that same year they raised $30m in their series B to take advantage of these Covid tailwinds.

Growth continued to compound and in 2021 the company raised $130 million in Series C funding, reaching a valuation of $1.5 billion. Loom had officially joined the unicorn club. By 2023 Loom had 20m users worldwide, which is when a software giant came knocking. It was Atlassian.

Atlassian made an offer to buy Loom and in 2023 Loom was acquired for $975m in an all-cash deal. Why they didn’t round up to $1bn? No idea. I guess they really needed that extra $25m.

After the acquisition though it wasn’t all sunshine and rainbows for Vinay. He decided not to join Atlassian, forgoing $60 million in potential compensation, and has struggled badly to figure out what to do with his life.

In fact last week Vinay wrote a blog post that’s going viral entitled “I am rich and have no idea what to do with my life” talking about how, after selling Loom, he feels like a lost soul. Every founder should read it. It’s a timely reminder that building a successful business and getting rich won’t solve all of your problems. Of course we’ll need to get rich first to confirm it for ourselves. Money solves money problems, but very little else.

So by all means go out into the world and secure the bag. But once you do your work may only just be beginning.

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