Last week marked the start of the fund-raising process. It was a fruitful week, and it has shaped the work ahead of me in the subsequent weeks. This post is a summary of my thoughts.
Funds as comfort; funds as a weapon
I am raising funds for Sapiengraph because
- I know I can bring the product's annual run-rate to a million dollar.
- I believe there is a finite window (one year?) for which the data that we are seeking for Sapiengraph can be sensibly be crawled.
My experience with NuMoney has enlightened upon me the concept of venture capital as a springboard. And I liked that I had an option of a cash war chest to leap forward.
However, through questions asked over the meetings. I discovered that I do not have all the answers for the business beyond the next 18-24 months, and that is unsettling to me, let alone an investor.
So I started introspecting the business from first principles.
The business model from first principles
I decided to work on Sapiengraph because it makes absolutely no sense that finding someone on the internet is much harder than it should be. I believe it is left intentionally broken by the major players because they do not want the world to know that you have too much data out there in the world.
With Sapiengraph, I can take a random picture of you, and instantly discover everything about you:
- Your sexual orientation,
- your relationship history,
- your writing style,
- your passions and hobbies,
- your professional career, etc.
And this data is valuable. The giants of today are monetizing it every second through targeted ads and product recommendations.
And while this data is also public domain for now, it will dissapear as the giants begin cleaning their acts up - just as how Facebook tore down Graph Search, or Google gimping reverse image search.
But what I have written above is my compelling personal reason for starting Sapiengraph. It has not answered the question of who will pay for this data.
Sales cure all ailments
I have hypotheses on who might be interested in Sapiengraph's data. But I do not know for sure.
For my own sake, I have to find out for two reasons:
- Hitting a significant revenue milestone is very good for my soul
- I will understand clearly who the willing buyers are
I lack the VC network
The business that I own today is a culmination of me, the product person -- spending my 20s honing the art of building great products. I have neglected the networking, and naturally, I lack a VC network.
This fact stands out in all my pitch meetings.
Shifting the power dynamics from the investors to the founder (me)
Instead, I should play to my strength. Let the product and traction speak for itself. It is the VC's job look for great businesses, and that is my job -- to build a great company.
I am not a networked person. Hard selling the business to a VC is playing the game in hard mode. If the company is in the media all day for the right reasons, VCs will come cold-calling.
Marketing as a hook, marketing as a pragmatic investment
Great marketing will beat automated cold-emails every time. I will begin leading the company forward with viral and audacious marketing campaigns to communicate the fact that Sapiengraph is open for business (and investment).
The right way to fund-raise is to work harder at the business from two fronts: sales and marketing. The timeline of fund-raising remains the same -- to raise $900k before the end of 2019. However, the method will change in my pursuit of clarity in the business model, as well as a shift in power dynamics between the VC and me.