Grit Happens 🤷💻️

This is The Startup Breakdown, the newsletter where we learn, laugh, and love startups. By joining this growing community of hundreds of future startup aficionados (think i spelled that right?), you're getting a beachside view of the ocean that is the startup and VC scene. This ain’t your grandpa’s newsletter, so prepare yourself for an inbox full of 4/20 jokes and Succession references.

Happy Monday, folks.

As crazy as it sounds, I was in The Bay this past week for the first time in my life…

Biggest takeaways?

AI = in.

Carjacking = out.

House of Nanking = good.

Biiiiiiiiiiiiiig news regarding the future of this newsletter = at the end of the Weekly News section 👀 

#StayTuned #AGTG #DestinedForGreatness

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The Problem

It’s been a minute since I’ve given you guys a non-newsletter update, but for the last few weeks, I have been participating in the nights & weekends program with buildspace, a super cool community of nerds getting their Bob the Builder on irl, committing to developing the project of their choice for 6 weeks, whether that’s an app, a movie, or even a self-driving go-kart.

I’ve been working on an app called Ate Out of 10, a TikTok-like social media platform for reviewing food items at restaurants (sign up for the waitlist? 👀). We got quite the jumping off point when we found a TikTok clone tutorial that allowed us to accelerate the dev process before we went back and added our own sugar and spice later on.

However, we ran into a massive problem when we discovered that though the tutorial was only a couple of years old (like a decade in dog years), many of the dependencies are now outdated and incompatible. For you nontechnical folks (me like 6 months ago), that means the app no workie.

I am brand new to coding, self-teaching for the last ~1.5 years now, so if I can already identify the PitA (pain in the ass, not the world’s best bread) that is upgrades to dependencies introducing breaking changes in code that have to be addressed every few weeks, there's a real problem there.

Worse, this was a a fairly simply project, one with two people easily managing the codebase. I can’t even imagine the gauntlet that faces the teams having to migrate entire massive software projects over to new tech stacks… The process can take months, even with ChatGPT (which I’ve come to realize is even worse at coding than I am).

The Solution: Grit

Grit is a developer tool aiming to simplify software maintenance. It includes a web interface through which you can generate pull requests from automated end-to-end migrations, as well as an optional CLI offering local control. These tools allow for automatic code updates, much like the automatic software updates for your phone.

Grit uses two main tools to make your life easier. The first is called GritQL, which is a smart way to sift through and change code. The second is an AI system that adjusts itself to fit the unique style of your project. Together, these tools handle the boring, repetitive tasks of updating old code, so you can focus on creating the software you really want to build.

GritQL language is Grit's embedded query language for searching and transforming source code. It is designed to match developer intuition wherever possible, “thinking” like devs think and reducing the overhead of adding it to your existing programming setup, while offering the ability to execute complex transformations in just a few lines of code. That’s a lot of saved finger cramps.

Pretty much, it puts code updates on autopilot, meaning that developers don’t have to devote months to update and migrate code. When you put it like that, risking AI extermination seems like a risk I’m willing to take.

The startup already offers popular languages like JS, Angular, and Python, and over 40 migrations are already supported despite only being in beta. This is expected to increase dramatically throughout the rest of the year. Some of the companies already using the tool include Faire and PromptLayer.

With thousands of devs already utilizing its tools in this beta phase, the company will soon be able to accelerate its process and get to market sooner equipped with a $7 million check in a seed round led by Abstract and Founders Fund. A host of other investors appeared desperate to participate, too, seeing that just a tiny piece of this Grit Pie will be worth its weight in gold in the future.

The market is massive, expected to reach $10.8 billion by 2028, growing at a CAGR of 18.2%. This is aided by the growing trend of cloud computing and storage, and with hundreds of traditional software companies managing massive codebases, the appeal of an AI-automated process to handle updates and upgrades is very… well, appealing.

However, the market is competitive, mostly dominated by massive existing companies like IBM, Microsoft, Google, and Amazon. Each uses AI to some capacity, but what sets Grit apart (apart from merely its drive, its power, it stays hungry, it devours) is its application of AI across the entire process:

• Identifies the code updates to apply

• Tests the code updates

• Deploys code updates

• Monitors update performance

This truly is a game changer, and the team’s experience in engineering has helped to inform it on the holes that need filling in the space.

• Morgante Pell: founder and former Googler where he has built up years of experience in refactoring code

The team is super lean, but they are clearly committed, and armed with this most recent round, they’re looking to quickly expand their headcount and make this product the most impactful it can be.

This product has the potential to dramatically improve the efficiency of the SWE industry, allowing the keyboard wizards to spend more time on thinking up new features and building and less time going back over millions of lines of code to make updates.

Very bullish on Grit.

TLDR: Grit is a game-changing developer tool that automates the tedious process of software maintenance. Using smart technology like GritQL and AI, it takes care of updating and migrating code, allowing developers to focus on innovation. Despite being in beta, it supports multiple programming languages and has already attracted significant investment. It's poised to disrupt a market expected to reach $10.8 billion by 2028, offering a unique solution in a space dominated by tech giants.

Zep-to the Moon

Fantasy lovers, rejoice. A new unicorn has been born from the wombs of purity.

New Delhi-based grocery delivery startup Zepto raised a lil $200 million from StepStone and other American private market investors to raise its valuation to $1.4 billion, cementing it as the country’s first unicorn of the year and the first minted in nearly 365 days.

The young company (founded 2021) is also already looking at following in the (soon-to-be-taken) steps of American counterpart Instacart in testing the public markets.

Use of funds is mostly geared towards adding more “dark stores,” though Zepto’s are just storage for servicing delivery needs rather than Abercrombie & Fitch’s goals of drowning customers in cologne and abs.

Given the burn rate and low margins of the grocery delivery industry, it will be interesting to see whether the company can use this new funding to turn the bottom line black. Regardless, congrats on the horn, team.

(Competitive) Game Over

The gaming industry wishes it could exit and restart.

The pandemic-assisted space saw a boom in popularity (kinda like NFTs, Peloton, and hoarding toilet paper) as gaming was one of the few activities, particularly social ones, which could be continued from the comfort of your garage.

Particularly, we humans satisfied our desires to #compete and #dominate by turning to esports, competitive gaming which soared in popularity for players and streamers alike.

While many industry execs had long-forecasted that level of growth, they were also a bit hesitant of its staying power. And while post-pandemic viewership and players numbers have dipped a bit and leveled off, they’re still well above their pre-COVID metrics.

Still, the industry is now facing a Dark Souls-level challenge.

While esports’ skyrocketing popularity attracted droves of VC money, the industry has had a monetization challenge, relying heavily on ads and performance rewards, two sources of revenue which aren’t super reliable. As the challenges around profiting have become more clear, many investors are pulling back, fueling last quarter’s 29% drop in deal count (down 57.5% YoY).

Further, there’s an ideological shift confronting the space with the power of a Texas oil tycoon seeing 120º temps in Toronto in November.

The hype around esports has been driven largely by an obsession with competition, one which has grown to a waterfall of toxicity driving many fans away from the games they once loved and enjoyed.

In the place of these hyper-competitive spaces, there is a rapidly growing market for casual, social-oriented games. These include games like Stardew Valley and Skylines which return to the “cozy, stress-relieving” roots of the gaming space, evident in both download numbers and the surge in gaming creators catering to this audience.

While there’s a time and a place for the “your mom”-filled lobbies of esports and competitive gaming, the industry is facing a swing of the pendulum, something which startups building in the space will certainly need to keep an eye on.

Arkansas Blocks Huge New Social Media Law

Mom, can I sign up to fill my brain with milkshake videos and mean comments?

Luckily for kids with loving parents everywhere, Arkansas blocked a bill requiring social media to limit kids’ access to their sites by requiring parent permission, what would have been the first state to do so, very likely ending up on the regulatory FYP and catalyzing a wave of such laws across the country.

The law was set to come into effect on Friday, August 25 before a last second before U.S. District Judge Timothy L. Brooks pulled out his best Hakeem and blocked the bill for concerns over its legal adherence to the constitution.

Things are getting really spicy, and there are far-ranging impacts from the results of this case. The decision could quite literally shape the future of social media, an industry worth hundreds of billions of dollars.

However, there’s just not enough room in these newsletters for me to throw yet another 1000 words at you, no matter how important macro-level news like this and the EU’s ongoing privacy regulations are to the startup ecosystem.

That (and the fact that i just looooove ranting to you guys) is why I’m officially launching The Startup Breakdown: After Dark, a premium offering that will show up in your inbox every Thursday breaking down the latest news and info on laws, regulations, and trends impacting the startup space and why they’re important to you guys as founders, investors, and future innovators.

Want to get the first issue in your inbox later this week? Sign up below!

Who let the dogs out?

Tim Allen in The Shaggy Dog.

But also The Woof, the newsletter bringing you pawsitively the best coverage of the pets industry in the park.

Check them out. It’ll give you something to $CHWY on.

Cheers to another day,

Trey