How Headline uses AI to make better investment decisions

The beginnings are made or broken product-market fit. Right before a round of funding, the founders knew they needed to show that they were growing fast. Throwing a bunch of money at marketing and sales can make the graph crooked and to the right, but does that represent true product-market fit?

The VC fund team head Tired of seeing companies ride the OPM train — that’s the expression of Other People’s Money, to the core — with nothing to show for it. So it decided to build software to get deeper insights to determine if a company has found true product-market fit or what else is going on.

Achieving product-market fit is not an easy task. This requires a deep understanding of customer behavior, unit economics and capital efficiency.

entry Deep Dive, Headline’s new analytics tool designed to help founders navigate the complex landscape of startup growth and make data-driven decisions. The tool offers a unique approach to start analytics. Unlike traditional business intelligence tools that focus on revenue graphs, Deep Dive examines the metrics that really matter, giving founders a comprehensive view of their business, enabling them to analyze customer acquisition, retention dynamics, spending and more.

“We go beyond surface-level revenue metrics and really focus on understanding customer behavior and retention dynamics,” Nicolas Von Blottnitz, a VP at Deep Capital that focuses on Deep Dive, told TechCrunch. “By segmenting customers based on their spending patterns and analyzing unit economics, founders gain a deep understanding of their business’s performance and potential.”

Deep Dive’s analytics dashboards offer founders a wealth of information to inform their growth strategies. By combining data from a variety of sources, including transaction sets, customer channels and pricing plans, Deep Dive provides a comprehensive view of a business’s performance.

“We believe in responsible investment and scaling. Founders must have a clear understanding of their product market fit and the potential for sustainable growth,” said Thomas Gieselmann, co-founder and partner. to manage Headline. “Deep Dive helps founders quantify and visualize product-market fit, enabling them to make informed decisions and avoid premature scaling.”

Unlocking the Value of Data

Deep Dive is still in its early stages, with a growing user base of founders who appreciate its value. While the tool is currently offered for free, the Deep Capital team envisions it becoming a part of the startup ecosystem. They hope to create a shared understanding of product market fit and responsible scaling, which will ultimately benefit founders, employees and investors alike.

The ultimate goal is to shift the spotlight from pure income metrics to the value of each cohort. Deep Dive encourages founders to prioritize product-market fit and responsible scaling, ensuring they don’t waste their most productive years on a company with no real potential.

A business model tool without a business model

It’s ironic, perhaps, that after all the talks we’ve had about business models, Deep Dive itself doesn’t have one: The company doesn’t plan to spin it off as a separate company, or pay for it.

“It really comes down to our investment philosophy,” Gieselmann said. “We believe in companies at scale, if they have a product that fits the market. I feel terrible for all the memories of the board meetings where I pushed the founders to put the pedal to the metal, demanding that they grow faster, before realizing that the company didn’t have a real product on the market. I have a little regret there.”

The company makes a point around responsible investment and responsible scaling, preferring to invest in a specific type of company, and then paying fair market prices for its investments.

“If Deep Dive ends up helping us find a big success out of this, it will pay off many, many, many times over,” Gieselmann said, reminding us of the power of returns about the VC model. Which, I think, would be a valid business model for a tool.

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