Friends of Lumos Update 😊

A16Z led our $5.6m Seed Round

If you read our first blog post, welcome back! If you're new to Friends of Lumos, it's good to see you here! 👋

You’ve probably been in touch with one Lumos team member and that’s how you got here. We will be sending out this email once a quarter with thoughts and updates. Feel free to unsubscribe if not interested -- no hard feelings 🙌.

Updates are boring! So, let’s start with something fun.

🤓 Meme of the Quarter – Lumos releases merch! (Email us if you want a tee)

Some background on this. During one merch brainstorming session, Andrej — in his German accent — made this rhyme 😄

💡 Thought of the Quarter – Building Category-Defining Products

Two questions that we are constantly asking ourselves are: “What makes the best companies the best? Are there any patterns that we could follow?”

Funny enough, the best companies don’t say that they are better than their competitors. They are different! The most successful companies create a whole new business category and become a champion in this category.

Salesforce, with its “no software” mantra, created the beginning of cloud-based applications. In the beginning, Salesforce was not necessarily better than Microsoft CRM. Salesforce was different because they offered a SaaS product and not on-premise software.

Steve Jobs’ second act at Apple was largely a story of creating a new category and becoming a champion: The iPod, a Phone, and a new Browser became the iPhone. The iPhone wasn’t necessarily better than the Blackberry at first, it was different!

TikTok is no exception! You don’t need a 10-minute YouTube Video to reach millions of people. A 10-second clip on TikTok suffices. Different, not better!

This also applies to individuals. If we look at his statistics, Muhammed Ali wasn’t the best boxer. However, he was the most unique athlete. He danced in the ring like a butterfly, used funny analogies, and was an activist. That’s why we know him.

Category Champions win because they ultimately change the way people and businesses decide to act or spend their money. They give us new ways of living, thinking, or doing business, many times solving a problem we didn’t know we had – or a problem we didn’t pay attention to because we never thought there was another way. Starbucks achieved this by convincing me that I should work from a Café and spend $6 for a Latte rather than 50 cents for a cup of coffee and move on.

Because Category Champions change our point of view as well as our spending patterns, it is not a surprise that Category Champions generally capture 70–80% of the profit pool of their category. Apple owns 92% of all profits in the smartphone market. Everyone uses Google, no one uses Bing. 1.4% of all artists on Spotify receive 90% of all royalties.

It doesn’t matter whether you are an individual, startup, or corporation – you need to create a category and then become the category champion to be sustainable. We try to follow this mantra at Lumos: Don’t sell the solution, sell the problem. Don’t sell a product, sell a different way of thinking. Don’t sell something better, sell something different.

💭 Story of the Quarter -- Applying the Theory

So, you might ask us: “How will Lumos build a category-defining product?” There are still lots of unknowns to be figured out! However, we tried to convey our thoughts on our company page (open the link, scroll down, and click on “More About Lumos”).

In short, we are working hard on reimagining the future of identity on the Internet! If you are anything like us, you usually have 20 tabs open and don’t even know how many web services you’ve signed up for in your life. The Internet is a mess. And that is problematic for organizations. The online world of a company is flooded with thousands of employees on hundreds of apps. We call this the APPocalypse! 💥

With Lumos, companies can discover every single app used by their employees and unite them into one single place. Once apps are discovered on the Lumos Identity Platform, organizations have the power to easily manage them with one click, like creating or deleting accounts. We are removing complexity in the online world. We give organizations and employees a single interface to govern their apps on the Internet.

That’s a short version of the story. It is early in our journey, and we have many challenges ahead. That is why we decided to partner with Andreessen Horowitz (A16Z) and Neo and closed a $5.3m Seed Round last month. With the support of these amazing heroes on our shoulders, we are forging ahead, growing the team, and laser-focused on building a great product.

🎉 Updates of the Quarter

  1. Sales: Customers (e.g. Khan Academy, Formlabs, …) are using our product! We are not ramping up sales, though. We rather want to build a game-changing product with our early partners.
    Related to this, we’d recommend reading Paul Graham’s “Don’t Scale” mantra and listening to the Master of Scale Podcast with Brian Chesky: “If you want your company to truly scale, you first have to do things that don't scale.”

  2. Product: We started integrating our product into hundreds of services. By the end of next quarter, we hope to have connections to 100+ web apps.

  3. Recruiting: We are 6 full-timers + 4 contractors/interns now and are actively recruiting our next 7 employees – 1x Frontend, 3x Fullstack, 1x ML engineer, 1x product design, 1x PM. Who are the best people you know that would find joy in building a company from 10 to 1000? Even if they are not looking for a job, we love building long-term relationships with genuine and passionate engineers, designers, and product managers. Feel free and reply to this email with only a name; we’ll reach out :)

That’s all for now. Welcome to the family.

Sending lots of positive energy,

Andrej, Alan & Leo, co-founders at Lumos

P.S. We're hiring — become one of our first 10 full-time employees 🤓

P.P.S. Last one – you probably realized that we have a new logo! More thoughts on branding in the next newsletter!