What I said to investors after I canceled Sapiengraph

I was pitching right up till I decided to stop working on Sapiengraph. Perfect setup for some awkward emails but it has to be done. This is the email that I sent:

Hi xxx!

I want to follow up to provide an update.

I sought out an introduction to you earlier through yyy because I wanted to pitch Sapiengraph to you.

Sapiengraph was a camera that one could place anywhere and get spatial and crowd analytics. Google Analytics for Spaces. Fast forward to today, a few things has happened.

TLDR: The business model came to be a deep-tech product by which a heavy initial early investment is needed in R&D before going to market. This business model is unfortunately not well suited for Singapore.

Longer version:

1. Our early conversations with Nike (Singapore and Malaysia) via SUTL led to a request for demo. What was a discussion in providing a smart CCTV ended up being a request for a software demo.
2. We pre-launched a CCTV service, and went door to door knocking.
3. We cold called and went around door knocking on interior design firms and electrical contractors for a partnership in distributing Sapiengraph CCTV.

Points 2 and 3 led us to believe that a CCTV service with smart features sold with a recurring subscription was a no-go.

This meant two things for us:

• Our early attempts demonstrated that the product as it is will be a hard sell with the lower-end customer base (SMEs). This means that we will not be able to grow revenue organically and meaningfully as we scale our R&D into the product.

• We suspect there is market opportunity upstream with building managements, FCMG and retail chains. But to get there, there are two things we need to do:

• • Order a large batch of an OEM industrial camera from Ingenic, instead of hacking a Xiaomi camera and overwriting their firmware
  • Invest at least 6 months of both hardware and software engineers

In my personal opinion:

1. The business model requires a heavy upfront investment which might or might not work out
2. B2B is not my area of expertise.

I am sorry for wasting your time on this! I hope to catch up with you with another product, this time with revenue and good traction!

One angel's reply:

Thanks for letting me know Steven, and I like your thoughtfulness in approaching the validation of business and also the rational mind to drop it when assumptions don’t work out. Keep in touch!