Introducing Deepdive

As a startup founder, you face numerous challenges on a daily basis - be it assembling the perfect team or forging innovative features and strategies that propel your vision forward, the challenges are manifold. While you consistently rely on data for product-related decisions, applying the same data-centric approach to your financial dynamics might come across as a gray area.At Headline, we regularly evaluate companies to assess the driving fundamentals behind the business. We do this using a tool we built in-house to help our investor teams around the globe better evaluate companies across sectors and stages of life - called Deepdive.

Over the past 10+ years, we’ve honed Deepdive to be able to provide an in-depth financial analysis and future projections for companies across sectors and growth stages, with very little data needed. We’ve shared Deepdive over the years with founders in our portfolio, as well as those we’ve considered investing in. As an important step of our diligence process, analyzing a startup’s performance using Deepdive not only helps us determine whether or not the company is a sound investment, but also helps the founders to understand key aspects of their business more accurately. Specifically, Deepdive helps founders gain a deeper understanding of their company's product-market fit and unit economics as viewed by experienced venture capitalists. 

Now, we’re excited to open Deepdive up to any founder who wishes to use it, for free. In this article, we want to share a little bit more about what Deepdive does and how you can leverage it to give you an accurate picture of your business performance within minutes.

With over 25 years of experience investing in startups at Headline, we strongly believe that cohort analysis is an essential tool for founders looking to grow and understand their customer behavior over time. Cohorts are segments of customers grouped together by shared characteristics. By dividing customers into monthly or even weekly intervals, cohort analysis provides much better monitoring and identification of trends than traditional methods like MRR analysis or income statement analysis. With cohort analysis in Deepdive, you can precisely track how each cohort performs over time, helping you identify trends and make data-driven decisions. 

While conventional financial analysis methods like MRR based revenue tracking and income statements are useful tools, they may not provide you with a complete view of your startup's performance. Instead, these tools only provide a snapshot of your finances at a particular point in time. Understanding how your business is evolving over time is critical for startups, which is why Deepdive believes cohort analysis can be a valuable addition to your startup's toolkit. Cohorts ultimately break up the static top line revenue into granular end-customer behavior, enabling operators to understand what is driving the underlying changes in their top line traction.

Startup financial analysis can be challenging for various reasons. Start-ups rightfully tend to focus on growth but should not ignore the cost of this growth. Deepdive breaks down the growth efficiency of a business for operators to understand their return for every dollar of capital they invest into their business. 

The problem with the traditional SaaS metrics like LTV/CAC metrics is that it is an antiquated metric that relies on assumptions and does not accurately take real customer behavior into account. Making it difficult to gain an idea of whether the most recently acquired customers are better or worse from a single ratio. 

Lastly, computing cohorts manually can be time-consuming and requires data science resources and computing power beyond a standard laptop. While most startups dedicate a lot of time and resources to grow their business, they often lack the in-house expertise to deeply understand the factors that drive the growth of their business.

In light of these challenges, Deepdive offers startups the necessary tools to gain valuable insight into factors that drive their top line performance and how these factors evolve over time. Leveraging cohort analysis, we break down the growth of a business by end customer behavior and dissect how this drives the unit economics and growth efficiency of a business. Thus equipping the startups with the tools they needed to make data-driven decisions about resource allocation.

Here are the key features of Deepdive that can help founders like you to answer important due diligence questions that comes up during fundraising:

1. Easy Automated cohort analysis:

• Say goodbye to time-consuming cohort analysis no matter how large your dataset is.
• Upload your company's transaction data and get the output within minutes using Deepdive.
• Understand your customers' behavior individually instead of lumping them across many cohorts on a calendar basis.

2. Unit economics and capital efficiency metric:

• Compute your payback and burn based on your cohorts and profit and loss statements.
• Understand your capital efficiency and dive into the changes on a quarterly basis

3. Cohort based forecasts:

• We will forecast your retention and payback metrics based on historical customer behavior, providing you with more accurate results.

4. Custom segmentations:

• Segment your customer based on factors such as geo-based or demographic-based, to deep dive into your data.
• Or we can automatically segment your customers by their spending habits using machine learning.

5. Product-market fit:

• Get a better understanding of whether you have found your product-market fit and what your ideal customer profile looks like.

6. Activity data analysis:

• We can use your company's activity data to determine how much value your customers are getting from your product and the product’s stickiness.

You can get started on building your dashboard on Deepdive with a few clicks. All you need to do is upload your historical anonymized revenue transactions. Alternatively, if your startup uses Stripe or Chargebee, you can connect your account and we will automatically pull the data for you. 

For a full deep dive on your performance, you can further enrich the analysis with your profit and loss statement to gain full insights into the unit economics and capital efficiency of your business to date. Best of all, building a dashboard with Deepdive takes just minutes, and all your financial information is kept private and confidential. 

Check out our demo dashboard to see exactly what you can expect to get back.

When it comes to cohort analysis platforms, Deepdive offers several features and benefits that set it apart from its competitors. Some are dedicated financial analysis platforms like Baremetrics, Profitwell, ChartMogul, others are analytics provided by payment platforms directly such as Stripe, Chargebee, and Recurly. However, all of these platforms are primarily MRR/ARR focused and none of them provide comprehensive analysis with a company's P&L. This can limit insights into payback and the effectiveness of sales and marketing spending, as they only perform analysis on transactional data. 

In contrast, Deepdive is free and always will be. We built this technology at Headline to help founders win bigger, and now we want to make it available to the entire start-up ecosystem. The platform allows users to build weekly, monthly, or quarterly cohorts. In addition, we support segmentation analysis, including machine learning-based segmentation, to help users identify their ideal customer profile. All these offerings are unique, and building each feature can be costly and time-consuming, making Deepdive a top choice for companies in need of a versatile financial analysis platform.

For startups, analyzing financial data is essential for understanding a company's health and making informed business decisions. Cohort analysis is a powerful tool for gaining insights into growth patterns and customer behavior over time. Deepdive is an advanced cohort analysis platform that enables startups to gain valuable insights into their financials within seconds. By utilizing Deepdive's intuitive user interface, startups can effortlessly track cohort performance over time, calculate payback periods, and make data-driven decisions about resource allocation. 

Here at Headline, we believe Deepdive is an unparalleled solution for startups seeking reliable and accurate insights into their business financials. But don’t just take our word for it, register for Deepdive to see what insights you can gain about your startup today.