Contrary Research Rundown #18
Building startups with limited resources, and new memos on Jasper, Sardine, and more
Research Rundown
In a year filled with layoffs and challenges for startups, the importance of building companies with limited resources has been put front and center. Whether its front-end or back-end development, building virtual graphics, or literally manufacturing precision parts for rockets -- the trend right now is to do more with less.
We shared the story of how Webflow was built through adversity. Early on, Webflow was on the brink of bankruptcy and had a few months of runway left. Those early challenges helped them become one of the leading low-code / no-code web platforms today; not to mention the company has been profitable since 2014. We unpacked the full story in this thread. The business also reminds us of other efficient businesses like Linear, or now-public companies like Docebo who successfully went public after only raising $14M in funding.
Whether through no-code tools, or easy-to-use developer platforms, the simultaneous explosion of applications and belt-tightening around engineering teams has driven the rise of serverless platforms where developers don’t need to manage and patch their own servers. One of the fiercest rivalries in the world of web deployment and Jamstack is happening between Netlify and Vercel. This week we unpacked some of the key differences between these platforms in this thread.
Another aspect of the never-ending drive to add more efficiency and automation to creating applications is the utilization of those principles in the world of gaming. As we continue to see the remarkable power of computer-generated graphics, companies like the Epic Games and their Unreal Engine product are at the heart of capturing the most value from these trends. What used to take teams of designers and artists can now be accomplished more easily through Epic's game engine. We unpacked some of the key components of Epic Games in this thread.
Outside of the world of software, we dug into the world of atoms. As the resurgence of US manufacturing continues to become pivotal for mission-critical sectors, emerging startups like Hadrian are becoming integral to the supply chain. Hadrian is a factory manufacturer for aerospace and defense companies. Check out our thread for a few insights into other defense and aerospace companies in our ecosystem.
Plastiq provides an online platform that allows consumers to use their credit cards for payments in situations when they previously could not. To learn more about the business, read our full memo here.
Flock Safety provides hardware and software products for public safety, including license recognition cameras, gun-shot sound detection, and more. To learn more about the business, read our full memo here.
Jasper provides a generative AI platform built with GPT-3 for professional marketers to create content, graphics, and web design in a more scalable way. To learn more about the business, read our full memo here.
Patch provides an online platform to help enterprises purchase carbon offsets to achieve goals for carbon neutrality. As companies have emissions they can't reduce, Patch helps them purchase quality offsets. To learn more about the business, read our full memo here.
Sardine provides fraud prevention and detection solutions for financial institutions. Its product includes transaction monitoring and much more. To learn more about the business, read our full memo here.
Carta shared some insights into the state of private markets. The piece covers everything that happened to startup valuations and round sizes in Q4 2022. Learn more about Carta’s business in our memo.
The Founder and CEOs of Replit and Weights & Biases shared their thoughts on the future of ML in an event hosted by Replit. The event was followed with an announcement for the Replit and Weight & Biases Hackathon, which developers can apply for. Learn more about Replit in our memo.
In the world of generative AI, Microsoft made a big announcement that they would be expanding the Azure OpenAI service to enterprises. Anthropic shared some insights through Scale AI into their new platform called Claude which is meant to be a rival to ChatGPT. You can learn more about OpenAI and Scale AI in our memos.
a16z's Martin Cassado and his colleagues published a report on how to determine companies that have platform potential within the world of Generative AI. Andrew Yang also shared why businesses should care more about small and relevant data, and begin saying farewell to Big Data.
When we look into some of the negative aspects of generative AI, we will likely see an increasing number of lawsuits such as Getty Images suing the creators of Stable Diffusion for scraping its content. We also see the founder of Deepmind, Alphabet’s LLM company, sharing some of his cautions around the future of AI.
In the world of fintech, Mercedes Bent, a partner at Lightspeed, explores the top fintech trends for 2023 and beyond. Some of her perspectives on fintech business models was shared in this fintech piece by TechCrunch. Similarly, in the world of payments, Kleiner Perkins Grit Podcast hosted an episode with the Founder and co-CEO of Brex, Henrique Dubugras. To learn more about Brex, see our full memo.
In the world of software, a16z published a report sharing insights into how founders can navigate the process of getting to $10M ARR in very nascent technology markets.
Patrick O'Shaughnessy interviewed Benchmark’s Miles Grimshaw in a podcast called “The DNA of software businesses” where they explore the inner workings of software companies, and how to differentiate the genetics of good and bad businesses. Cowboy Ventures also shared a playbook for how to make money from open source software business models.
The US Government will spend over $858 billion in defense in 2023, of which 4% will go to startups. Michael Bloch from Quiet Capital shared a report and market map on the defense tech ecosystem. We’ve written about defense and space companies such as Anduril and Hadrian.
Discord acquired Gas, a popular app for teens to compliment each other. Gas has quickly become popular among high schoolers, with more than 1 million daily active users. To learn more about Discord, read our memo here.
Fortune unpacked some of the key insights behind how Andrew Ofstad and Howie Liu built Airtable, and how the art of open-ended use cases played a critical role in their journey.
Tony Wan from Reach Capital shared some key data on the US edtech market and how companies in the space have raised over $5.2B in 2022 despite macro headwinds. One education company you can read more about is Guild Education, who we published a memo on just recently.
Contrary Research Fellowship
At Contrary Research our vision is to cover hundreds of companies. We can't do it alone, nor would we want to. We focus on bringing together a variety of different perspectives.
That's why we're opening applications for our Research Fellowship. In the past we've worked with software engineers, product managers, consultants, and more. If you're interested in researching and writing about tech companies, apply here!