How Headline is using AI to make better investment decisions

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Startups often succeed or fail based on product-market fit. Before seeking funds, founders must demonstrate rapid growth. However, simply investing in sales and marketing can create misleading growth metrics. The team at VC fund
became concerned with companies relying on external funding without genuine progress. This prompted the development of software to gain deeper insights into a company’s product-market fit.

Reaching product-market fit is a challenging process that demands a profound understanding of customer behavior, unit economics, and capital efficiency.

Deepdive, an innovative analytics tool developed by Headline, aims to assist founders in navigating the complex realm of startup growth and making data-informed decisions. Unlike traditional business intelligence tools focusing solely on revenue graphs, Deepdive delves into critical metrics, offering founders a comprehensive view of their business. This includes analysis of customer acquisition, retention dynamics, and spending behavior.

Nicolas Von Blottnitz, a VP at Headline, emphasized Deepdive’s focus on understanding customer behavior and retention dynamics: “We go beyond the surface-level revenue metrics and really focus on understanding customer behavior and retention dynamics.”

Deepdive’s analytics dashboards provide founders with valuable insights to shape their growth strategies. By consolidating data from diverse sources, including transaction sets, customer channels, and pricing plans, Deepdive ensures a comprehensive understanding of a business’s performance.

Thomas Gieselmann, co-founder and managing partner at Headline, highlighted the tool’s significance in quantifying and visualizing product-market fit, enabling founders to make informed decisions and avoid premature scaling.

Unlocking the Value of Data

Although Deepdive is in its early stages, it has garnered a growing user base of founders who appreciate its value. While currently offered for free, the Headline team envisions it becoming an integral part of the startup ecosystem, fostering a shared understanding of product-market fit and responsible scaling for the benefit of founders, employees, and investors.

The primary goal is to shift the focus from pure revenue metrics to the value of each cohort. Deepdive urges founders to prioritize product-market fit and responsible scaling to avoid investing in companies without genuine potential.

A Business Model Tool Without a Business Model

Paradoxically, Deepdive, despite being centered on business models, does not have one itself. It is not intended to be spun out as a separate company or offered for a fee.

Gieselmann emphasized the firm’s investment philosophy centered on responsible scaling and fair market pricing for its investments. The focus is on finding genuine success through Deepdive, aligning with the powerful returns associated with the VC model.

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