GM! It's Thursday, January 12th - Today, we're covering Tesla's $770m gigafactory expansion, critical flight delays, a consumer debt bubble, Blackrock cutting 500 jobs, FTX recovering $5b, Elon Musks' record-setting losses, and the skeleton crew that built a $1.5b business in 18 months.
Why Is Tesla Investing $770M In Texas?
> Tesla is investing over $770m toward Austin-based gigafactory expansion.
> Thousands of flights are still delayed as the Federal Aviation Administration (FAA) lifts its 90-minute nationwide ground stop that kept every domestic flight grounded.
> The 'Buy Now Pay Later' bubble is about to burst as consumer debt rises.
> Gainsight announced the best place to work in 2023, according to Glassdoor.
> Failed crypto exchange FTX has recovered $5b in assets
> Billionaire Bernard Arnault announces his daughter as the new CEO at Dior.
> Elon Musk lost $182b in personal net worth, an amount so large that it broke records.
> Dallas-based ShiftKey raised $300m, at a $2b valuation, to tackle the labor shortage crippling the medical system.
> The weirdest new technologies announced at CES. Sadly this doesn't include the $3,800 self-driving stroller.
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This Pivot Created A $1.5B Business In 18 Months.
Jasper is one of the fastest-growing companies ever. Growing from $0 to $45m ARR in 12 months before raising $125m at a $1.5b valuation.
But it was preceded by 8 years of failure.
What's The Business?
Here's The Story...
Shut It Down: In December 2020, Dave Rogenmoser and his co-founders were on the brink of shutting down their business. They'd spent 3+ years building a conversion optimization software called Proof...and it was flatlining.
A few weeks prior they had to make the painful decision to let go of half their team. Competition and churn had completely eroded growth. Things were painful.
8 years of work left them with a string of startups that never quite made it:
- 2 failed software businesses (couldn't make money)
- A SMB marketing agency (maxed out at $25k/mo)
- An online course company (hard to get big)
The Pivot That Changed Everything: In January 2021, they had an idea to use Chat GPT-3, the generative AI model released 6 months earlier, to write high-converting Facebook ads. Within 30 days, they launched the business.
With the skeleton crew remaining from the last startup, they scaled the business to $45m ARR and 70,000+ customers without hiring a single new person. Soon after, they raised $125m at a $1.5b valuation.
3 Lessons From Dave Rogenmoser, CEO at Jasper:
- Right Skill, Wrong Vehicle: 8 years of building marketing businesses gave this team the knowledge and confidence to spend $1m/mo on sales and marketing to scale the business to $45m ARR in year 1.
- Launch Fast & Iterate Quickly: The team agreed that if the business didn't work in 30 days, they'd shut it down. Dave says, "If you have been working on a problem for more than 18 months and haven't found Product market fit (PMF), odds are you won't...Make the hard pivot."
- Ride A Big Wave: Generative AI technology is a new technology that is changing the way we work. But it's not just text. It's images, voice, etc. Identify new customer segments (e.g., Municipalities, Banks, Lawyers, etc.), learn their problems, and apply this novel technology to solve them.
Americans Lean On Credit Cards As Expenses Stay High
💳 Credit Card Debt: With day-to-day expenses staying high due to inflation, more Americans rely on credit cards to make ends meet.
- The average credit card user carried a balance of $5,474 last fall, up 13% from 2021.
- According to a new report by Bankrate, 46% of credit cardholders carry debt from month to month, up from 39% last year.
- As daily expenses stay high due to inflation, more Americans are relying on credit cards to make ends meet, and fewer are able to pay their bills in full at the end of the month.
🏠 Mortgage refinance demand surges as homeowners capitalize on lower interest rates
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased last week to 6.42% from 6.58%.
Shipping Container Costs Drop 93%
The cost of shipping a 40-foot container from China to America's west coast is now $1,400, down 93% from its peak of $20,600 in September 2021.
The Federal Reserve Bank of New York estimates that supply shocks caused 40% of inflation between 2019 and 2021.