Inside a Pitch Meeting w/ Michael Blakey & Aleks Farseev | PitchMeNot Ep.5

[00:00:00] Rahul: Welcome to Pitch Me Note, a podcast that takes you through the first pitch meeting of Startup Founder has with a vc, but it doesn't stop there. Stay tuned as a vc. Dissect the startup in a candid debrief once the founder leaves the room.

[00:00:12] Rahul: I'm your host, Rahul, and today I'll be joined by Michael Blakey, managing partner at Cocoon Capital, an early stage VC firm based in Singapore, investing in B2B and deep tech startups across Southeast Asia. And we'll be talking to Alex iv, founder and CEO of Soman and AI powered SaaS platform, utilizing advanced data analytics and behavioral science and social media data to optimize marketing campaigns, aiming to reduce cost and boost sales for clients.

[00:00:37] Rahul: Now, let's get started.

[00:00:38] Aleks: Hi, Legs. thank you so much for joining us. Uh, we'd love to know more about Somen.

[00:00:44] Aleks: Hey, hey, nice to see you again. So Min is a ad tech platform that uses AI to help marketers to do a better job in digital advertising and also competitor monitoring. We believe that [00:01:00] in the modern era of data, of AI, it's, not very wise to let human doing all those nitty gritty data sync.

[00:01:08] Aleks: So we're building a platform to help empower humans to make sure that they're making the right decisions and those decisions are justified. Those decisions are helping them to get better ROI and their marketing advertising to the end. So what would you say is the kind of core problem that you're solving?

[00:01:29] Aleks: It's a lot of waste. If you look at the industry, it will be about 20 billion wasted on ineffective ad spend every year. Just in the US, just in the meta alone. And if you ask yourself, why did this happen? You will see that this is A, because people are not good with data, B, because the industry is very intransparent.

[00:01:51] Aleks: who is your target customer then?

[00:01:53] Aleks: We are, we are focused on marketeers and different types. So we have two products. One is a managed service SaaS for running [00:02:00] and optimizing ads. It's called SoAds. And the second one is for like a little bit like a social listening on steroids is very deep using large language models to analyze competition, analyze competitor ads.

[00:02:11] Aleks: So they have a quite different personas in a sense for, for the, for the former, we have got performance marketers, marketing directors, those people who was KPIs are. about growing the digital part of the business. And when the second one, it's focused on, uh, brand managers, brand planners, those who are building a strategy or even for the agencies who are going for the pitch.

[00:02:33] Aleks: Imagine I'm an agency and I come for the pitch and I say, Hey, I know everything about your brand, your competitors, even before I start working with you. So that helps them to sell as well. So, and this is a key persona that we are targeting. And, and where, what's the traction that you've currently.

[00:02:48] Aleks: Achieved so far. So we are at, 50 to 60 grand. MRR, that's pure sar, MRR mm-Hmm, . So we therefore at, 6,700 ish run rate.

[00:02:58] Aleks:

[00:02:58] Michael: And so [00:03:00] how long have you been going and what have you raised to kind of get to this point?

[00:03:06] Aleks: Yeah, so we had a couple of pivots. We started from analytics in the very beginning, and then we went into an influencer market for a bit, and we came back to some very actionable media buying, uh, performance driven platform.

[00:03:22] Aleks: So ads as a regional platform that we had, and we went to, CIS market quite a bit, uh, although it's Kazakhstan, Russia, Ukraine, as well, uh, we, you raised, Based on that traction from four VCs. One is called investable. Another one is called Tembusu. And there's another company called, uh, funded here.

[00:03:44] Aleks: There were two more. one is called, OKS group. It's a denser CIS. And then, and as well as the last one was called join journey. We see then all that. Fold almost to zero revenues because the war has started. And then we have rebuilt that in Southeast Asia and the [00:04:00] UK. So UK is our current new market where we are not just running our original.

[00:04:04] Aleks: So as product, but also focused on is there the sole monitor product. The second one was, uh, the, the SAS that helps to analyze competitors and monitors ads. And what's your background and how did you get into this? So I did, I always wanted to do business. I did some small business in the travel space, like an app that tells you, what's around you, like crawls internet and trying to explain what's the things around you.

[00:04:31] Aleks: Uh, we get some initial funding, for that, but we didn't go for it because we didn't know how to do information retrieval well. And, my co founder Kirill, he went. To China to do, to become a CTO there, in one of the education startups. And I went to Singapore to do my PhD here, because I really wanted to learn AI, but I was kind of a weird PhD.

[00:04:54] Aleks: Like those who are focused on research. I was focused on research with a whole goal to. kick off a company from [00:05:00] there, especially had a such a good example. My supervisor, he had another two businesses, you probably have heard about one. One is called Vsense and it's called six estates. Yeah. Yeah. So those are my, you know, bodies from the lab.

[00:05:11] Aleks: We are from the same lab with them. Yeah. I was following a couple of the meetings with them. I was doing some customer development, trying to figure out what kind of gaps there in the industry. And, uh, that'd be kickoff. So mean stands for social miners. Just right off my, after my PhD defense. Okay. So my marketing experience, I would say come from practice and from those k chops and initial development that we did during my PhD and my technical experience goes all the way to when I was a developer, even before.

[00:05:43] Aleks: I was a software developer then. Yeah. Then I started my PhD, started doing research AI stuff. So like a, a typical technical geeks that I hope successfully converted into a business person.

[00:05:52] Michael: what are the results that you, you're kind of seeing across your customer base in terms of the savings that, that

[00:05:58] Aleks: they're

[00:05:59] Michael: achieving?[00:06:00]

[00:06:00] Aleks: Last year, or the year 2022 results are about 38%. We haven't, uh, sum up the city 2023 results, but usually the way we compare is we get their performance and our performance side by side or back to back. And, we can just compare the metrics within the same as manager. So I can see how well you do that.

[00:06:20] Aleks: Tick tock campaign visa, visa tech with a cycle graphics. That's our platform push in as compared to what they had before. This is also how we sell. We come in and we say, we make it 20 percent better. If we don't, then you don't pay us. And we know that statistically in overnight percent, we will make it better.

[00:06:36] Aleks: So for us, it's okay. We find a fail 10%, another 9%. Our unit economics will be still not bad.

[00:06:43] Michael: Oh, let, let's break it down in terms of what, what's your kind of cell cycle and what, so what's your kind of CAC and then LTV and then kind of take it from there.

[00:06:54] Michael: I

[00:06:54] Aleks: can tell you the CAC LTV ratio is 4. 3. That's not the last time you have [00:07:00] calculated. if you, if you would, we recently did a cohort analysis. So if you look at different markets, there will be different numbers there. I would say Europe is very promising. US is also very promising for us in the future, but we haven't tackled it yet because just too expensive to get in there when you're in our stage where we are, uh, in Asia, the numbers will be a little bit more, a little bit more conservative, uh, overall.

[00:07:24] Aleks: We are targeting not to have for lower, not to have higher than 5 percent monthly churn, which we always seen within this metric, we targeting a better pilot conversion ratio. And I think the, the key points there is actually qualification of the clients, since we don't want to work with the clients that, don't, they don't understand what they do.

[00:07:45] Aleks: Maybe the infrastructure is not ready. Which is the main reason of the churn in our case. And,

[00:07:50] Michael: let's say just starting into when, when you're looking at your customer, what is your target customers?

[00:07:55] Aleks: B2C more or less generic product.

[00:07:59] Aleks: [00:08:00] Spent enough, which is 10 grand plus per month on digital ads. Usually that means that their business quite dependent on digital ads for growth. So this becomes a KPIs, ideally in house team. Then we, we definitely can help them. We have another persona that is not that well, very old, educated, but very humble.

[00:08:21] Aleks: We find to work with them as well. We have agencies, but here is really case by case. Some agencies are very collaborative. Some is just a very. Political, and we have to be really smart and figuring out those things before we invest time and working with them.

[00:08:34] Michael: And what's the sales cycle that you have to get a new customer on board?

[00:08:39] Aleks: Depending on the markets in Asia, I would say it'll be three to four months. In Europe, actually, the sales cycle is twice shorter.

[00:08:47] Aleks: I would say average would be 60 days. And in fact, we did some correlation analysis. We're really careful about our cohorts and data. We did actually correlation analysis. We realized that, the longer the sales cycle, The [00:09:00] less likelihood of,good LTV and the higher the likelihood of churn.

[00:09:04] Rahul: So do you use your platform to acquire customers?

[00:09:08] Aleks: We, we use it indirectly. We, we have this, tool, so monitor, right? So what it does, it can score which competitor ad is working and which is not.

[00:09:17] Aleks: This is also our proprietary tech because only we can train it. We have so much data over the last years when we run the ads, right? So we can train the tool that predicts which ad work and also why. It draws a heat map showing, okay, this part of the ad is good. This part of that is not good. We also have ad alarms to explain that heat map.

[00:09:33] Aleks: So all those things come together in email.

[00:09:36] Michael: And which platform do you work on? Is it across all platforms or?

[00:09:40] Aleks: Not all. Yeah. So, this technology, I mean, I need to give you a little bit of background on this, long tail targeting thing, right?

[00:09:47] Aleks: So. It naturally works very well for the businesses on social media. Because when you, when you browse the Facebook or Instagram or whatever, [00:10:00] TikTok, you leave lots of trace, you know, like, you are a VC, but you might like, I don't know. Cats, pets, dogs, coffee, those kind of things. So you'll be naturally browsing those websites and you might, spend a little bit more time watching some cute kitten, I don't know, playing around on a video.

[00:10:17] Aleks: Those things is called profiling. That thing is, executed on the meta, on the TikTok site. And it has Being remembered about you. In fact, you can go to your settings and see what's, what is mapped to you. We are doing the same, the same thing on our side. And we do it for all the brand and competitors so we can actually understand what exactly social media networks think about you.

[00:10:41] Aleks: And then we will target you through those things.

[00:10:42] Aleks: So that naturally works very well for those systems like social networks, whereas the profiling is happening in this indirect manner. Therefore we are strongest in meta and tick tock.

[00:10:53] Michael: Can you talk a little bit about how much you're raising and what are the key deliverables and milestones you're going to [00:11:00] hit with the funding?

[00:11:02] Aleks: Yeah. So logic here, very simple. I mean, if you would be singing from a VC perspective, what do you want to have? You want to have a B2B startups with close to zero churn, no human involved to grow at least two times a year. Yeah. So, so we know this. We're trying to fit in the box. We also realistic in our projection.

[00:11:23] Aleks: So we are looking at where we, we are now. So even if we don't raise anything, we've got, at least 10 months runway. In fact, longer. In fact, we are accrual basis profitable, which is a good news. So we are very much focused on the product and automated funnels for selling this product. We think by the end of the year, we could get to 120 grand of combined revenues from two products.

[00:11:48] Aleks: At least 40 percent of that would be, purely SaaS, purely self service SaaS from a store monitor. Yeah. That would allow us to position ourselves as a serious A3 company.[00:12:00] Asia series, a ready company. Yeah. And I'm talking about the U S multiple simulations. So, and this is our goal because, given our underway in a gallon, given the, the fund that we have already secured from American vesicle buyer's death, we, technically have well enough funds, even considering our growth till next July, not this coming July, but next July.

[00:12:19] Aleks: And then we roughly need about six months. To raise Series A and attraction for having a good talks about Series A will be achieved around November, December this year. So that's actually what justifies the amount of money we are raising for this round. And how much are you raising? One million and we have 500 committed.

[00:12:37] Michael: Okay. So question for you though, is You seem to have got some good traction. You can, you've got a road to profitability, so you can grow organically if you want to. Why do you want to take your VC money? Well,

[00:12:50] Aleks: because we already get other VCs on board and we really want to make sure that we fulfill our promises to everyone.

[00:12:56] Aleks: We promise to keep growing [00:13:00] X, per year. And the fact that the market is not as good now, that's, we treat as our problems as well. Right. So we, we, we want to continue that path. We also think that, and this is, this is one, the boring part of the answer that this is the most exciting part of the answer.

[00:13:16] Aleks: Since we have released our second product and we see the, all this response by the industry, when BBDO thinking to replace their existing social listening solution with SoMonitor, which is, I mean, in fact, just the reason why I was a little bit like almost late for this conversation is because I had a conversation with our head of product about, big FNCG brand.

[00:13:42] Aleks: Top, top three FNCG brand globally in terms of advertiser spend. They're already our clients, but then I want to get into some monitor and I can see how much money even regionally we can earn from them. I see that just one or two of these kind of deals closed with all the features that they need [00:14:00] to be delivered to them is just a day and night for so many.

[00:14:03] Aleks: Yeah. And, I mean, it's a little bit stupid for us to keep growing at the pace that we are growing now and miss this opportunity because things like LLMs and capabilities around and this kind of opportunity window, they happen once in three, once in five, once in 10 years. And also market is bad and actually market is bad is actually good because all those lousy folks with lots of money, they actually already dead or going to die soon, a good companies.

[00:14:31] Aleks: And I believe a good company is a profitable company with a strong product that can grow organically, but choose to go for VC because they can, exercise the opportunity they have. Those are the best companies. And we think we are one of those. That's the reason. Yeah.

[00:14:44] Michael: Okay. And, and where do you see like the, what's your big vision?

[00:14:46] Michael: Where do you want to actually take your company?

[00:14:50] Aleks: I think I have two answers in terms of the company. year 23 is the first time I was thinking seriously that we could actually IPO because, The product that we're building [00:15:00] now could give us a rate of growth that, that way beyond of those traditional ways of thinking about B2B startups, just, just how clients respond to us and allow experience and everything give us and the team, right?

[00:15:13] Aleks: The ex creative director of BBDO or the BDA company, they're all our full time members now. So, so all these things makes me feel that actually it's a very big opportunity. So actually I think, that should be an acquisition at a late stage, or even IPO ing at maybe two, three hundred million valuation in a relatively short time span.

[00:15:33] Aleks: That is very important, right? Not like, like forever kind of thing. But that's, Honestly, it doesn't matter to me as a founder as much because what really matters is for us to being able to transform the industry. I hate how the advertising industry works. I see a people, I see all these employees are suffering, like the industry pushing them to be bad people.

[00:15:55] Aleks: And this is all, we're dragged all the way from the, from the times of TV ads, when [00:16:00] you really cannot track anything, but now you can, but you deliberately rejecting that just because it lets your bosses to earn more money. And me, I'm sorry, being a data person, being a like programming geek, I really hate when people say nonsense in terms of logic and everybody smile and agree with it.

[00:16:18] Aleks: I want to fight against it. I said, if we provide the software, that's probably become industry standard. Then that would actually help all those agencies and all those companies become a better companies. And this is a true impact we want to build. So I mean, it doesn't matter. What matter is that the industry will transform through the approaches, through the software to build.

[00:16:38] Aleks: And of course, I'm a strong believer. If we bring a value to others, of course, our company wouldn't have a problem to be a good company as well. It's all the growth and everything.

[00:16:46] Michael: how are you separating yourself from all the noise that that is out there and, and be able to, and, and kind of add the little partners, how can you stay relevant?

[00:16:57] Michael: So I've invested in the past, a number of ad tech, which were [00:17:00] great, cutting edge companies, and literally a year time, they, they did not stay up with the latest thinking, because. Things are moving and changing so quickly. So how are you solving that problem as well? I

[00:17:11] Aleks: think we're quite grounded in technology.

[00:17:14] Aleks: So for us, building a true AI tech is much easier as compared to others, because that's where we came from. I was building AI at the times when there was no such thing as AI.

[00:17:24] Aleks: So, we always approach it from technological perspective. And, we have a couple of things that have not been replicated so far. When I say have not been replicated is of course, to the best of my knowledge, but I really haven't came across those folks. So for example, long tail targeting, interest discovery systems, targeting thing.

[00:17:42] Aleks: Many of our clients buying us because our platform is able to continuously provide them audiences that they haven't thought of.

[00:17:50] Aleks: So that's, that's important for them. And this is how we differentiate recently quite a bit differentiator on the LLM It's not just about. LLM [00:18:00] itself, because LLM itself is not really defensible. I, in fact, I recommend against investing in pure LLM tech, but when LLMs is fitted by some proprietary data and proprietary AI that you've built by yourself based on your own data, nobody can replicate that become very powerful

[00:18:16] Aleks: Then, uh, we have a very good industrial knowledge. We know where to go and to go. From the people that are working, we have Marlow, he's a, creative person. And we have Vadim, he is a media buying person. We actually don't make quite a number of mistakes that we could have made.

[00:18:31] Aleks: Otherwise,

[00:18:31] Aleks: And finally, uh, if you, if you look how many we see is doing that, you just pick up with some few portfolio companies from there, from their set. And then they say, okay, there's a few businesses, they are running marketing. Can you help them? Can you compare your results side by side?

[00:18:44] Aleks: And we say, sure. 20 percent don't do bad. If you don't do that, the, by 20 percent don't pay us, then we do better than is, the best digital is they can do right on us.

[00:18:54] Michael: Okay. So, and so what is the thing that. Then keeps you up at night. Where do you see the [00:19:00] greatest risk for yourself?

[00:19:02] Aleks: Sleeping very well. I'm very confident about when I wake up and I'm back to work, I think one of the greatest risks would be their technological gaps is that the platforms like Facebook and Google could just simply close.

[00:19:19] Aleks: Like, say you have an API to monitor a competitor data and you have a lot of things on top of it and your technology is really great because you enrich that data beyond anybody else could do. But if you don't have the data itself, for example, then what are you supposed to do? So you have to mitigate this risk.

[00:19:37] Aleks: So we have many channels. We're extending our channels, one channel will die. We will be able to serve in other channels. And you were right. The only way to compete nowadays, in my opinion, is not about the tech that you have, everybody can hire engineers. Everybody can build any model in the world. If you don't have some data, well, it'll take you a little bit more time, but it'll always be a company that have all the data in the world.[00:20:00]

[00:20:00] Aleks: I can buy all the data in the world. You have to always stay relevant. You also have to build a solution to solve customer problems with the technology that is in the market and there's a buses around and by staying relevant and moving together with. With this wave, which now is LLM wave in marketing, right?

[00:20:15] Aleks: So that, that would help you to be a good company.

[00:20:19] Rahul: So the, the one problem that all marketers have is that GAC always goes up, right? After a certain point. Yes. All the time. All the time. So what is the solution for that? So

[00:20:28] Aleks: we have to, so we have two, two personas. One persona, as I say, are focused on making costs lower, but that's not the most advanced performance marketer would do.

[00:20:38] Aleks: Those marketers that are. Grow on to a certain level in their business. They actually want to scale by retaining the CAC. And you are right here, a hundred percent. Our job is to make the growth of CAC not proportional to the growth of the budgets and being able to gather with our customer and always find a, find a way, find that [00:21:00] ceiling to, to, to make their unit economics works.

[00:21:04] Aleks: And, uh, If you would be asking me technologically, how exactly would we do? I'm happy to explain you. so, thanks for this opportunity. Right? So usually marketers, they scale one ad of three ads, five ads, and then just increase the budget. And then I say, Facebook, TikTok, please make it work. And sometimes it does.

[00:21:26] Aleks: Usually it doesn't. It doesn't. In our case, we spin off hundreds, sometimes of thousands ad sets of audiences at the same time. So we are slicing this pie in a hundred ways, and only those slices that giving us a really, really good CPA we're using for scaling. So instead of horizontally scaling the ads, we are spilling them instead of vertically scaling the ads, we are scaling them horizontally.

[00:21:51] Michael: so

[00:21:51] Rahul: that's all for me. Thank you. Thank you so much for taking the time. Sure. Talk to us.

[00:21:56] Aleks: Thank you. Appreciate it. Thanks.

[00:21:57] Rahul: Okay. Uh, so time for the debrief. [00:22:00] Uh, I'd love to hear your thoughts before that. Maybe I can go first.

[00:22:04] Michael: Yeah. And I'd love to, like, why don't you like talk to me? We keep it a bit structured. And what did you think of the problem statement? Is it something that was clear to you? And do you think that it's a, a real problem that advertisers, did he convince you that this is a real problem that needs to be solved?

[00:22:26] Rahul: Yeah, it's definitely so I've done, I've spent money on ads. So this is just definitely a problem because, there are two things. I think ads used to really work when, Facebook was just. Growing in the sense, like maybe 10 years ago, but it doesn't work anymore. It's, it's a lot harder for, um, to get good return on return on investment from ads at this point.

[00:22:52] Rahul: so that's a problem. And second thing is that I think I'm not sure whether it's just with the ads, any marketing [00:23:00] channel, your gag goes up after a while. So then these two are really,like, big problem to solve.

[00:23:06] Michael: But talk to me, like, what would, so if I asked you in one sentence to give his problem statement, what would it be?

[00:23:14] Rahul: So this is something that I didn't understand. I didn't understand whether his target market was small businesses or large enterprise, because looking at the deck, it was large companies. But, through the conversation, he mentioned something about SMBs. So I'm then the problem statement would be like helping small businesses.

[00:23:31] Rahul: Run, ads profitably and grow the, grow the business.

[00:23:35] Michael: Yeah, I wouldn't put it that way. So I think the way he defined it, I think was very much, if you spending 10, 000 a month, then, they could be a target market. And I think he was very much along the lines, if they know what they're doing, like if they have some knowledge of the problem, my concern is, is that how much of the [00:24:00] market does that entail?

[00:24:01] Michael: So what I really struggled is the I understand them like if it's 10, 000, they know something is that 10 percent 5 percent of the people who actually doing, marketing, you know, so who is so I understood his customers aren't I don't understand what part of the market opportunity. Was that actually in it?

[00:24:24] Michael: And does that mean it excludes everything else?so for me, the problem statement is, do you understand that like, you know, 80%, you know, ROI is typically this because of the lack of data and understanding about the customer or being unable to target.

[00:24:42] Michael: Who and then the solution then comes in is by what by what we're building, we achieve this, which is solving this problem. What I found that he very much wanted to talk about, which is, I think, a common [00:25:00] problem for a lot of entrepreneurs is, he wanted to talk about the solution. He wanted to talk about the product that he built.

[00:25:08] Michael: And if we're looking at this from a first meeting point of view, understanding that he's got the products I think is important, but defining why it's required and why it's a must have and being able to talk about the numbers. Because I try to lead him in there. I kind of like talk to me more in about the numbers in the bit.

[00:25:28] Michael: Give a bit more detail and I've always got a caveat. This when I when you do something like this is that I know a lot of founders don't. So it's unfair for because it's kind of like I know he doesn't want to talk about the numbers because obviously this is going to be public public. so I'm gonna I'm gonna kind of crucify him a little bit unfairly.

[00:25:50] Michael: But I think it's fine to do that, because this is the whole point of this is to be educational.

[00:25:54] Michael: So for me, part of the issue is, and I have a [00:26:00] bias against ad tech.

[00:26:01] Michael: So you've always got to look at it. You know, I always say to founders, when you're coming into a meeting, look at the past of a VC. And one thing you look for is have they invested in ad tech? The second thing you look at is how many of their ad tech companies have failed. Because VCs are always very hyped if they're like, Oh, I've made money in this space.

[00:26:27] Michael: So if you're in, if you're, if you're going to a VC that has made money in ad tech, you're much more likely if they haven't invested in that tech, then it's a bit more of a push to like, okay, they,

[00:26:37] Michael: So one of the reasons that I'm excited, intrigued, intrigued.

[00:26:42] Michael: by what, by the company is the team behind it. Like with his background and with his co founder. But again, if you think about his answers, he didn't really talk a huge amount about his co founder. [00:27:00] He talked about himself in it, but even then he was very high level. And he then dropped in a few kind of examples of the team that he's got working for him.

[00:27:14] Michael: For me, if I was, if I was just being, if I was on the fence, that might've pushed me to the no. But from what he was saying, it seemed like he's got very strong background. He's got a very strong team about him. And if you look at from the investor's point of view, if you go into it, like investors won't agree on most things, like everybody thinks they're different.

[00:27:37] Michael: There's one thing every investor will see. It's always about the people. So if you've got a shit hot team. Then you fucking talk about it, like you tell, like, you don't give a blow by blow, but you don't just say they've got this background. You say, well, our kind of head of marketing or head of sales, he comes from this background, he's achieved this in the past, this is what he can [00:28:00] bring to the table.

[00:28:01] Rahul: Yeah.

[00:28:02] Michael: how would you have presented, How to differentiate what he's doing from what his competitors. Is there something that you would have liked to see that you would think, okay, that, you know, cause it's very easy for us to kind of sit here and say, well, he didn't give us that.

[00:28:21] Michael: What we should also try and do is say, well, if he did this, though, that would have. really helped tell the story because fundamentally sad thing is even at the stage that he's hot when he's got numbers, it's still about storytelling.

[00:28:38] Rahul: Yeah, yeah. What you want, what I would have wanted to see now, which is not really possible in a setting like this is just.

[00:28:47] Rahul: So the problem that I had with the, with the, one of the competitors that I used is that the user experience is so complicated. So even when I have a tool, it takes a lot for me to, you know, learn it and, but, you know, use [00:29:00] it properly. So, that's one thing that I would have wanted to know. And then also, uh, A proper comparison, right?

[00:29:08] Rahul: Like,

[00:29:08] Michael: yeah. For for me it would've been a ca like I totally agree with you. Like a lot of these, these platforms are never gonna be used by people unless they're experts. Yeah. and that's not something you can really get across unless you do a kind of let, demonstration.

[00:29:23] Rahul: Demonstration. Yeah.

[00:29:23] Michael: But for, for me, I think a case study saying, you know, we took this customer, and, and they, they, he even said they do like the AB testing.

[00:29:33] Michael: Yeah. I would've actually taken. And said, look, we ran this test and we did an A, B and C testing. So we did it. They did it the current way they were doing it. We took our competitor and did it. And use, you know, we, we pay for them to see what they could do. And then we did it on our platform and this is how, this is how it looks, you know, for me, it's not like the perfect way of doing it, but actually being able [00:30:00] to demonstrate something that as an investor, you know, again, as I said to him, we see a lot of our tech and everybody is different.

[00:30:10] Michael: Everybody is unique. Everybody's doing it a different way. and most of them fail miserably. You know, so if you can actually clearly demonstrate, you know, like numbers talk like it's as simple as that if you, you know, and I would also then said in terms of where the competitors are just saying that you're better than them, which is kind of what he like.

[00:30:36] Michael: He didn't really kind of. I always get nervous, you know, I'm, you know, I want you, I want to feel comfortable that you know them inside out and you could, like, he never talked about his platform being easier to use than others, you know, but it is a common complaint for a lot of platforms is [00:31:00] that even the ones that work sometimes are just too complicated for Joe blogs to come in and use, you know, which is why a lot of times they have to go through agencies.

[00:31:09] Michael: It's not because in theory they should be better and that they're kind of like trained up on this. That would have been a way to actually say, Hey, look, what we found is that the part of, because a lot of churn from their competitors is because just can't bloody use it. It's not that it doesn't work, but it's too complicated for an average user to be able to use.

[00:31:29] Michael: Um, so for me on that, in terms of like the product side. I think, um, there's, there's a better way that he could have actually presented it,

[00:31:41] Michael: Yeah. So,what did you think in terms of, what are the key deliverables from this round?

[00:31:51] Michael: Like, what do you think his targets are in the next 12 months?

[00:31:54] Rahul: He mentioned, I can't remember what he actually, it's, [00:32:00] yeah, one thing that he mentioned was like, really using, this whole LLM technology, to scale.but in terms of revenue targets and things like that, I am not able to He didn't actually

[00:32:10] Michael: talk about numbers. He was just, I just want to give VCs what they want.

[00:32:13] Michael: Yeah. Ever say that. Yeah. Nah, it's, you, you, and the great thing is he used the word, I, I, it's realistic numbers. Yeah. And I'm fine with that. It's better, like, you know me, I hate the word conservative. Yeah. If a founder says the word conservative, it just drives me fucking nuts. Because I always say, tell me one successful founder that you know, who's being conservative.

[00:32:38] Michael: It's just not happening. I've always said what, like, but even talking about real, let's just say these are the numbers I'm going to hit. It doesn't matter. Like. We're never going to believe that you think they're really like, we always think that you're going to say, well, but don't say I, I'm going to, I'm going to achieve the numbers that I think you want to hear.

[00:32:57] Michael: Yeah. You know, that's, that's [00:33:00] like, like you say, no, our target is to do this. You either back me or you can challenge me, but these are my, these are the numbers that would make, would make me go to bed happy if I hit them. Yeah. You know, and they're stretch targets. You're always looking for stretch. I don't want people to give me realistic numbers or numbers they know they can hit.

[00:33:22] Michael: Yeah. Because if somebody hits their numbers continuously, I'm saying, well, you're not challenging yourself enough. I know it's unfair. Yeah. But. VCs are not looking to invest in small businesses, small businesses, successful business. We're looking for the high growth. So you can only get high growth if you set challenging targets, which you're more than likely going to miss.

[00:33:45] Michael: But don't try and guess what a VC, so one of my companies, um, was pitching to a U S investor because he said that he wants to, in a couple of years, sell for two, 300 million. Yeah. Okay. Um, [00:34:00] and this is for me and it's been different. I have one of my companies talking and that, that kind of earlier than him.

[00:34:07] Michael: And they were saying in two to two, two years or so, they want to sell for half a billion. And the VC was like, we're not really that interested in that. So if that's all you're aiming to do, you know, and again, this is like, don't say what you can become, like what you're eight, like aim for two, 300 million for me.

[00:34:29] Michael: That's like a best guess for me is like the two, 300 million. It's a shitload of money. Trust me. Like, we'll all be very happy. Bah. The bigger funds, that's just not going to work. That's not. But it also shows like, is that, is that good enough for you? It's like, you know, VCs are fundamentally greedy people, you know, I'm sure if you said, I'm going to, I'm going to be, you don't even say, I'm going to be better.

[00:34:55] Michael: This is what we could become. And then you sold in a couple of years time [00:35:00] for two, 300 million. I don't think the VCs are going to complain, but it doesn't want to be the target. As you said, that's the achievement. That's all you're aiming for. That's not, you know, what VCs really want to hear. So again, this is, this comes back to knowing your audience when you're pitching for investors, knowing what kind of gets them excited and not.

[00:35:20] Michael: So kind of, I guess for, for me wrapping it up, I think the team sounded very interesting and I understand the pain they're looking to solve. So that gets me like the, the intrigue. It is about the people and the credibility they had. I liked it that he was a tech person going into business, but understanding, like, again, a lot of the things that he said, like, Understanding all the data points in his business, you know, some of my most successful founders within my portfolio are people who know the numbers.[00:36:00]

[00:36:00] Michael: If you know, uh, Nima from Lendl, I mean, that guy just knows every kind of twist and turn and that's why he's being able to scale and grow the business. He knows every lever and he knows what he can push and he knows what he can pull. And that gets him the growth. And it also helps him understand how to go into new markets.

[00:36:21] Michael: And I think Alex would be somebody that would be able to do that. Like he knows where to spend his money. He knows. So I have confidence in if I gave him money, that it will be spent amazingly well. Wisely, like it would not be burn chasing dreams because I think he's very much data driven within his decision making.

[00:36:45] Michael: I think where the concern would be and where I would look at the, the next meeting is in terms of what is that? Kind of clear route to market and how defensible and how does he differentiate and how does he still relevant? Cause he didn't [00:37:00] really answer those questions in a clear way that I can go away.

[00:37:04] Michael: I'm feeling I can go to sleep and I thought, okay, yeah, this is a, you know, I want him to take, so he's got in my 20%, but he hasn't gotten my kind of 3 percent like super excited. I can't let this deal go. Yeah. so it then comes, do I have a good day when I'm making an investment decision or not? And what else do I have on my plate?

[00:37:25] Michael: Yeah. Yeah. Would you agree or disagree? Like, would you have a, is there anything else you would like to know or understand better?

[00:37:35] Rahul: I agree. I think a lot of, things, did not come out really well, because of the communication, not being to the point. I think a deck has a lot more clarity.

[00:37:47] Rahul: Um, so the risk. Yeah. The only thing that I can think of is, mostly where the industry is going.

[00:37:55] Michael: Yeah,

[00:37:56] Rahul: that's the, I mean, team is really good, uh, [00:38:00] and I think the, the, the product is defensible. Um, I'm just trusting him and on that part at this point,

[00:38:08] Michael: which is why I always trust everything that the founder says.

[00:38:11] Michael: And it's like, do they say the right thing that will get me to that next meeting? And what I would say is like, um, so, you know, my business partner will, I think he's been on your podcast a few times. I'm slightly different than him. I think that's fair to say. Um, I don't think you would get upset with me.

[00:38:28] Michael: Um, I'm somebody that likes to go through the deck. So if I have a, if I have a, if somebody comes to present to me, I'm like, take me through the presentation slide by slide. We'll go through it. We'll understand it. Will is like, let's just have a conversation and you've got to be prepared for both Situations where like some founders, like you, when you say this, have a, let's have a conversation, they miss like 90 percent of what needs to be.

[00:38:57] Michael: To be said, and then sometimes if it's just to [00:39:00] do with a pitch, you lose that personality, the thing to build that connection. It just, you learn it by rote. You kind of like, you know, and if somebody kind of stops you to ask a question, the whole flow disintegrates because you just learned it by rote. So there's good and bad of both.

[00:39:16] Michael: And Every founder prefers one way or the other. You've always, doesn't matter what you do. You've got to be prepared to do both, you know,

[00:39:27] Rahul: that's cool. Yeah, this is great. thank you. Thank you so much for your time. Yeah,

[00:39:31] Michael: my pleasure. No, no, thank you.