Betterment for middle-income Americans, co-founded by Shark Tank celebrity Kevin O’Leary. Has 3000 downloads, $32k in revenue for all of 2019, and is claiming $15M valuation. Uncertain what the differentiation is.
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- Lack of Differentiation: Besides targeting Americans making $60k-$70k, I’m not seeing much differentiation here.
- Timing: I feel the great robo-advisor wars started half a decade ago.
- Valuation: Not convinced that a company can be worth $15MM just with brand name, 3k downloads, and little to no revenue.
The 6 Calacanis Characteristics (91 161 18)
|1. A startup that is based in SV||No: Boston, MA|
|2. Has at least 2 founders||Yes: 2|
|3. Has product in the market||Yes|
|4. 6 months of continuous user growth or 6 months of revenue.||No: I don’t there are any app-based subscription fees, given that 3000 downloads would be making $15k MRR which is not happening.|
|5. Notable investors?||No: Only Kevin O’Leary who is co-founder.|
|6. Post-funding, will have 18 months of runway||Yes: 2019 burn was $23, so easily will have 18 months|
The 7 Thiel Questions (ETMPDDS)
- The Engineering question:
- Bad: identical to competitors
- The Timing question:
- Bad: Unconvinced this fight is still happening in 2020.
- The monopoly question:
- Sure: Could scale fast, but realistically look at all the other robo-advisors.
- The people question:
- Good Not Great: No one on payroll means the team isn’t full-time/isn’t very big yet.
- The distribution question:
- Bad: O’Leary helps on marketing but CAC will still be high.
- The durability question:
- Good: Once people join a robo-advisor, I don’t think it’s likely they hop month to month.
- *What is the hopeful secret?:
- Charging a fixed fee model for customers making $60k-$70k is a super business model.
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