This article was originally published on the Lisbon Challenge Blog.
Alright, we all know how difficult it is to get into a top accelerator. You apply with your startup, you wait for the reply and then when the time comes, it’s either the cheer look on your face or the disappointment settling in. And filling in the application plays a major role in this.
So, how can you get the perfect application that will get everybody’s attention and join Lisbon Challenge right on time for the Web Summit this Fall? How can you convince Lisbon Challenge to give you 10K to build your product in 10 weeks? What should you add and emphasize? What’s the “make it or break it” factor? Well, just keep on reading because you’re about to find out.lis
We get hundreds of applications for Lisbon Challenge and it’s a long and arduous job to go through each one of them. In order to move on to the next phase, you really need to stand out by following these tips:
1.Team, team, team
I know this might sound a bit of a cliché. Everyone talks about the importance of having a good team but that’s no coincidence. Whenever we go through applications, the team is usually what grabs our attention. This is because, at such an early stage of your startup, there is very little evidence to show that your idea is amazing. So, instead, we rely on the team behind it, why the team is motivated to solve that particular problem, and what skills and expertise do they have to execute the idea better than any other team. We like to see how teams validated their idea, specifically what tactics they used, and what conclusions they took out of it. Explain exactly what each one of you does, the background, why you’re building this startup together, etc. We definitely value more teams that have founders that cover both main areas: tech and business. Also, clearly explain the equity distribution, because it helps us determine individual motivation and founders direction.
2. Do your homework
It’s really important that our accelerator matches your startup and your own expectations. For Lisbon Challenge we only take startups that are in product development phase and are dedicated to do what it takes to build a product that the market really needs. This can be Prototype, closed Beta, or MVP. We are not looking for startups that are focusing on growth, sales or internationalization (we used to, but not anymore), instead, we want startups that are building their products based on recent problem-solution validation. We like startups that understand the need for continuous validation and are always looking at analytics to draw conclusions based on customer behavior.
3. Get a recommendation
Most of the selected startups for Lisbon Challenge were referred to us by someone within our network of entrepreneurs and investors. See if you can find someone who has been through Lisbon Challenge before or someone close to the Beta-i network and ask for an introductory email.
4. Be detailed and know your numbers
Explain your product and business well. If you’re building a complex technical product, take your time to explain it and find a comparison so that it’s easy to understand the importance of your solution. It’s ok if you don’t have all of the answers today, what’s important is that you are able to outline the problem, who suffers from it, and how measurable is the problem. The solution can be your vision to solve the problem, and you should be able to “sell” us your vision and demonstrate clearly what is your roadmap to achieve this vision. If you already have a specific product for the solution, then explain to us how you aim to validate the product, and that it has a fit with your target customer segment.
5. No bullshit (go straight to the point)
Even though you have to be detailed about your product and know your numbers, that doesn’t necessarily mean bullshit. Go straight to the point and answer the questions. If you don’t have numbers to show don’t try to fake it. Instead, just explain you don’t have it yet, but tell us about how you validated the idea, and what are the numbers you want to track in the future, why, and why will they help you determine your startup’s roadmap.
6. Surprise us – stand out from the crowd
If you want to get noticed you need to stand out from the crowd. Think about why you want to apply to LC and get the initial funding. Tell us where you want to go after, and why LC is important for you to reach that milestone. What do you aim to achieve during LC and what will be your main focus during the program? Be honest with us and let us know about your expectations.
7. Remember to add the video
For the video, it doesn’t matter if it is a phone video. What does matter is that you introduce all of the founders, and show us what you have done so far with the idea, what phase are you now, and where are you heading.
Now that all the tips are here, it’s entirely up to you to get it right. If you are still not sure if you are at the right phase for Lisbon Challenge, then email Isabel Salgueiro (email@example.com) or Gualberto Pastor (Gualberto.firstname.lastname@example.org).
Apply to Lisbon Challenge until this July 15th 2017, and we’ll let you know if you’ve been selected by August 15th 2017 to the Bootcamp.
When I was a kid I believed I had some sort of super power.
I would tell myself that my brain had been genetically modified and as a result I could make things move with my mind. The TV was my favourite. I would stare at it and move my hand to the right to switch the channel, or move my hand up and down to control the volume, or briefly close my eyes to turn it off. It was that simple.
What I didn’t know at the time was that this mysterious power of mine came from my older brother’s brand new Casio watch which could control the TV from a distance. I hated him for it.
However, 20 years later the tables have turned and I have gained my superpower back.
No, I haven’t bought a Casio watch. I have only realised there is a startup in Lisbon who has built a technology that will pull all these tricks for me, and much more.
This startup is called Heptasense.
I have spoken to Ricardo A. Santos, who is the co-founder and CEO, about what Heptasense’s technology can do and how it will change the world as we know it. We’re talking about a mind-blowing technology which will help us control everything without having to touch anything, and as it so happens it will also potentially save future lives from terrorist attacks.
Find out more about one of the most promising startups in Portugal, which has been on the previous batch of Lisbon Challenge in this interview.
Follow the footsteps of startups such as Heptasense and get 10K to build your product.
Can you explain what is Heptasense and what you have been working on?
At Heptasense, we have designed the first Artificial Intelligence software that learns and understands human patterns. It basically mimics how the human brain works. This means that with our technology you can transform any device into an intelligent system. It can be used in gesture control, where you control devices with the movement of your hands for example, in motion tracking, where you follow in real-time the 3D movement of the human body, or even in crowd analysis, where you can detect patterns in human behaviour and understand if someone’s behaviour represents a threat.
When you were in Lisbon Challenge you were pretty much focusing on using this technology in healthcare, for example, to help patients with their physical rehabilitation. However, you have taken a different path since then. Why was that and how have you been developing your product?
Yeah, when we were going through Lisbon Challenge we were focusing on the recognition of hand gestures, we were using movement sensors, and things like that. But now, we’re very focused on using our technology with cameras and we have developed our product to do more than gesture recognition like motion tracking, so we can now track the whole human body for games and sports and do crowd analysis for analytics. For example, one of the companies we’re working with is an American security company, and with our software, we can understand if a specific person in an airport is about to commit a terrorist attack. What we are able to do now is analyse any type of human pattern from the smallest thing like gesture recognition to the most complex thing like analysing crowds in a public environment. This crowd analysis can also be used in retail, to understand how people move within the store to improve their business, for example. So, basically, we’re talking about humanizing all cameras.
The first pitch of Heptasense on Lisbon Challenge
And who are your customers? You said that you’re working with a security company in the US, but are you focusing just on security or are you working with different companies?
We are a B2B company and the problem we are solving is a technological one. Our software is much better and faster than other existing ones. So, any company who wants to take advantage of human behavior through their cameras can easily work with our software and save time and money. For this reason, we are addressing different markets. We have customers in retail, security, sports, automotive, and many others.
But how have you realised that was the way to go and not what you were doing initially?
So, because we chose not to have any investment yet we could explore different paths. When you receive investment you have to focus on a specific product and because you have money in the bank you can afford not to monetize your product yet. In our case it’s completely different, we have to always be closing deals with customers. We decided to close the cycle of our product and of for any human pattern recognition, from the smallest recognition of one person to the biggest when you’re analysing a group of people. We needed to understand all the possibilities of our product, and we’ve come to realise that there was a lot of space for us to work with these different companies besides the hand gestures. So, we started hiring people in this area and we basically closed the cycle of the product.
Why have you decided to bootstrap instead of fundraising?
Well, we spoke to many different VCs, business angels and investors but, up until now, we felt it wasn’t the right way to go. The investors we spoke to wanted us to focus so that we could have 3-year projections and we just weren’t on the same page when it came to the vision we had for the company. In order to get the investment, we would have to follow the exact footsteps of all the other companies and we were doing something different. So, in the end, we weren’t willing to sacrifice our own model for the company and we chose not to take any investment just yet.
And from all the customers you already have can you give me an example of a company you’re working with and how are they are using your technology?
We made two interesting partnerships: one with Starburst Accelerator, which allows us to close contracts in aerospace market, and other with an ambitious Google project that uses a new type of sensor technology, that we are going to reveal soon. Recently, we also closed a new big client which was BMW. We’re working on gesture recognition with them. So, companies like BMW, Audi, or Volkswagen are now having cameras in the cars they build so that drivers can control everything through gestures. What we’re doing with BMW particularly is for example allowing the driver to customize the controls of the car with gestures using our technology. But, I can’t reveal much because we’re talking about a car that will only be launched in 2021.
Oh, and we don’t want to ruin that partnership for you. Can you give another example?
Yes, of course. We’re working with companies which operate with cameras and deal with security for example in airports. By using our technology they can see if anyone represents a threat like if they have a gun, or if we detect any pattern of movement that is suspicious, the company and the airport security will be able to take preventive measures and save people’s lives.
And how have you been reaching out to these big companies? How were you able to close a partnership with big clients such as BMW?
For us, it was surprisingly simple. So, most of these big companies are always looking for innovation and we took advantage of it. For example, if they have open calls for startups to apply or any kind of competition we just go for it. Another thing we do is going to tech fairs. We’ve met a lot of people and got many different leads from this kind of events. I’m talking about conferences like CUBE Tech Fair in Berlin, and the Web Summit here in Lisbon which was very good to us. We usually set a few goals when we attend these fairs and decide beforehand who we want to contact, but you actually end up meeting more people than what you had initially planned. For example, at CUBE Tech Fair we wanted planned to talk to Audi and Volkswagen and we ended up reaching potential clients in banking and manufacturing market.
The Heptasense team at Web Summit
What do you think will happen to this type of technology in the future? I’m talking about wearables and gesture recognition. What will the future be like?
In the future things will change drastically, particularly when it comes to interaction. When you talk about augmented reality, holographics, or even voice controls, it demands a different interface from what you’ve had previously. I’m talking about allowing the user to control everything without having to touch anything, it will all be controlled at a distance. In the future, the user will be empowered with these new features. Also, we can make things much more autonomous and safe which will benefit us all. For example, in the security sector instead of having a person watching 20 or even 100 cameras at the same time, we can have an intelligent software to monitor everyone simultaneously and in real time, and then provide feedback to the person who is watching, that is absolutely incredible. In the end, that’s where Heptasense is heading up next.
We have now open applications for our accelerator, Lisbon Challenge, which you participated in the past. How did Lisbon Challenge turn out for you?
Lisbon Challenge was great for us to improve our positioning in the market. Through the program, we talked directly with potential customers and to other experienced people from our area. It also helped us in preparing our pitch. We started Lisbon Challenge without a single customer, we only had a product, and we left the program with paying customers. As a young company, you need to surround yourself with influential people with experience, in order to mitigate the initial mistakes that most startups make and that often destroy a startup. I’m talking about product market fit, time to market and investment.
Do you have any tips for the entrepreneurs that are now applying to Lisbon Challenge?
Try to tell the story of what you’ve done so far and what you’re going to do throughout Lisbon Challenge. You’re not selling your product to Lisbon Challenge, you’re explaining who you are as founders, what you do and who you do this for. Everything needs to make sense overall. In the application focus on what you’re the best in the world at, but be humble and say how Lisbon Challenge can help.
If you want to follow the footsteps of startups such as Heptasense, apply to Lisbon Challenge and get 10K to build your product in Lisbon for 10 weeks.
Almost all the talented entrepreneurs we meet at Beta-i put their customers first and above all things. Felipe Ávila da Costa, the founder of Infraspeak, a startup from Porto that has been through Lisbon Challenge and at the Lisbon Investment Summit, is one of them.
However, what Infraspeak has achieved over the past few years is truly remarkable. They have apparently ‘cheated’ an inevitable fate and made the impossible, possible.
Infraspeak is the first startup I know that has never lost a customer, like ever. And, if that wasn’t enough they kept on growing unbelievably fast – 243% growth in 2016.
I bet your jaw just dropped. However, there’s a trick to it.
A few weeks ago, I spoke to Felipe who calls himself the “business guy” of Infraspeak to talk about all the tricks they’ve been holding up their sleeves. We talked about how they kept their customers extraordinarily happy, how they grew 243% in 2016, and how they bootstrapped during the first 2 years and later joined 500 Startups in San Francisco after meeting Marvin Liao at the Lisbon Investment Summit.
Follow the footsteps of startups such as Infraspeak
In the end, it was an honest conversation about customer development, building a great product, defining a strong company culture, going from direct sales to inside sales, and getting investment at the right time.
Keep on reading and learn from Infraspeak’s story.
Infraspeak is a facility management software so, you have a product that can be used by many different segments but, you clearly have a focused portfolio of companies. Why is that? How did you define your target?
It was really by the book because I spent 5 years attending and giving workshops about the best practices to start a startup at UPTEC, the biggest incubation center in Portugal. So, in the beginning, we spoke to as many segments as possible, we reached out to our network of contacts, and that’s when we realised that a lot of different segments needed a solution such as Infraspeak. We had a good problem on our hands because we had a lot of different segments interested. This whole thing was a challenge, because we talked to a lot of people and they were all very receptive so, at that stage, we weren’t really focusing. What happened was that we were getting lots of feedback and we were trying to iterate the product according to completely different opinions. By the time we got to Lisbon Challenge, one year later, we realised that we had to focus in order to be more efficient in our sales process. So, at the time, we decided to focus on hotel management and in companies that provided technical assistance for air conditioners. And the good thing about our product is the cross-selling opportunity because it’s easy for these segments to spread the word about our product and then it gets used by more companies. Infraspeak is a management solution that can be used by both the maintenance sellers and the maintenance buyers, so we set up this natural cross-selling mechanism for the business to grow. For example, we send operational reports from Infraspeak to both sellers and buyers, so they all get to know the product.
And how is your sales process? How did you define that?
In the beginning, we started with a direct sales approach. So, we were knocking on doors, sending emails, asking for introductions, and just reaching out to companies for them to get to know us. At the time, we were having an average of 3 meetings in person before closing a customer. After closing, we had an average of 3 other meetings for the onboarding process. Our product is very complete so it’s not like to implement a CRM where you have 2 concepts to understand, deals and contacts, we have 7 or 8 concepts to interpret, so this requires a (simple yet necessary) training process. But, just for you to have a comparison, our competitors take an average of 6 months to implement their products, while we take around 3 weeks.
But that’s not a scalable model, right?
Yeah, right. But, with this direct sales approach, we grew our portfolio of customers and we were already rising as a reference in the market because we were more innovative and efficient than any other solution. So, this allowed us to evolve into an inside sales approach, which is scalable, and right now, we have a bunch of customers that we have closed 100% online. With this sales model, we’re doing demos online and then negotiating by skype and phone calls. As for the onboarding process, so far, we’ve had 4 customers that did everything online except for the last meeting which involves training their technical staff, that one is still done in person.
We have a churn rate of 0%. We have more than 50 customers, and our oldest customers have been working with us for 2 years, except for the 2 initial partners that have been with us for 4 years now.
And what about the customers that you already have? Have you been able to keep them?
One of the metrics that we’re most proud of is our churn rate. We have a churn rate of 0%. We have more than 50 customers, and our oldest customers have been working with us for 2 years, except for the 2 initial partners that have been with us for 4 years now. On the other hand, and still related to this metric, our negative churn, which means the percentage of customers that we somehow managed to upsell (more users and/or more services) is around 25%.
That’s impressive. How is that even possible? Are there any tricks up your sleeve, or is it just the product that is very good?
Well, when we started to hire people to join our dream we had kind of a philosophical epiphany. We started thinking about why would anyone work for us and why does that make sense. So, at that time, we began drafting the vision of Infraspeak, not in an economics point of view but, in a cultural point of view. In the end, we decided that Infraspeak exists to be a source of good life, a source of good life for our customers, as we relieve the technicians and managers from stress, and a source of good life for our team, for our partners, for our investors, and for anyone that is in touch with us.
So, we bring this motto to everything we do at Infraspeak. We created the role of a customer success lead in a very early stage. In the beginning, it was my partner Luís, but now as we have more people in the team we have had more support in this area. So, the mission for this person is to support our customers constantly and to be kind of an advocate for our customers within the team, when for example we need to define the priorities in product development. I think that this focus in customer support was an added value to the product itself, and in keeping our customers happy.
I’ve never thought that receiving investment was a success indicator. It is an indicator that you have a good pitch, and the ability to convince investors to believe in your business. To me, the true metric comes from customers.
You have only received investment quite recently, and until then you bootstrapped. Why and how were able to do that?
I’ve always been against the kind of entrepreneurship purely focused on investment. I’ve never thought that receiving investment was a success indicator. It is an indicator that you have a good pitch, and the ability to convince investors to believe in your business. To me, the true metric comes from customers, and from bringing value to these customers. So, since the very beginning, we’ve had this mindset. When I joined Infraspeak we started setting milestones, and we would look at a certain milestone in a specific time frame and we would analyse if we had enough resources to go that far. For example, at that time, our milestone was to validate the product and the market, so the challenge was to close our first 5 customers, and it’s not like you need investment for that, it was just the personal effort from the founders. When we closed the first customers, our goal was then to get to product market fit, and we were able to do that ourselves with our own resources. We were just 2, we worked from home, and we had no salary. We were really betting on Infraspeak with our savings (and the cost of opportunity) and luckily (at that stage) it was enough.
The founders of Infraspeak, Luís Martins and Felipe Ávila da Costa
And how did that bootstrapping, the ‘no salary’ kind of thing, turn out for you?
It went well, I guess. Our focus was to close paying customers from day one, and we became profitable in 9 months. We actually became “ramen profitable”, the concept elaborated by Paul Graham from Y Combinator, which refers to the point where the founders are able to pay their bills and eat ramen soup every day of the month. So, the company lives and its founders don’t starve. But, right after reaching this point, we had to take a strategic decision. We would either get a salary ourselves or we would start hiring. So, we decided to invest on product and build a team, so we hired our first employee, João. It took us another 4 months to return to this type of profitable, and we had to take the same decision. We ended up doing the same thing as before and we hired another engineer, Pedro. When we joined Lisbon Challenge we were a team of 4.
So, the first year and a half we bootstrapped in the best possible way, which was through paying customers and with the personal effort from the founders.
But, if you were profitable and if the company was growing, why fundraise? When have you felt the need to get investment?
When we were going through Lisbon Challenge and we were profitable again, including the minimum salary of the founders, and when we actually got to product market fit. At that point, we realised we had a good product, we had an unsatisfied market, and we felt the need to maximise that opportunity. And obviously, at that time, it wasn’t just a matter of getting to the milestones but getting there fast. That’s when we started drafting a pre-seed round with investors, which was also one of the reasons why we joined Lisbon Challenge. Throughout the accelerator, we wanted to define our growth strategy and leverage the program’s network to set up our investment round. In Lisbon Challenge, we got the help we needed from mentors and investors, and this was what we were expecting when we applied.
We met Marvin Liao from 500 Startups at LIS and 2 weeks later they sent us a proposal for us to join their program, and another 2 weeks later we moved to San Francisco. It was incredibly fast.
How did Lisbon Challenge work out for you?
It opened a lot of doors for us. We had access to a relevant network of corporates, partners, and investors through Beta-i and Lisbon Challenge. I have known Beta-i for a long time now, and I know the founders have a lot of contacts so, to us that was the key factor when going through the program. However, the big highlight of this journey was the Lisbon Investment Summit that happened right after Lisbon Challenge, and it was really a launch pad for Infraspeak. Through the Lisbon Investment Summit, we met several investors, mostly international, including 500 Startups. We met Marvin Liao from 500 Startups at LIS and 2 weeks later they sent us a proposal for us to join their program, and another 2 weeks later we moved to San Francisco. It was incredibly fast.
Since Marvin Liao from 500 Startups is coming back this year, do you have any advice for the entrepreneurs that will be attending the Lisbon Investment Summit and that want to follow your footsteps and join 500 Startups?
That’s a hard question. My advice is pretty general for anyone that wants to join one of the best startup programs in the world such as 500 Startups, Y Combinator, or Techstars. Go and build a good product that the market is interested in, look for a market that is big enough and with enough growth potential, and set up the right team to take your business forward. To me, it’s not really a matter of what you say and how you talk to investors, but what you’re building. If you’re building a good product then it’s much easier to sell it to investors. I’m personally not a fan of those networking hacks because I think the focus of the founders should be on the business itself.
it’s not really a matter of what you say and how you talk to investors, but what you’re building.
How was your experience on 500 Startups in San Francisco?
To me all the accelerators kind of offer the same thing on paper, just like an MBA. They offer mentors, a network of investors, support, a space to work, and perks. But, what changes is the league you are playing, and 500 Startups is like the Champions League. Regarding mentors, it was amazing, regarding the network of contacts we got all the contacts that we wished for, regarding exposure and support it was incredible, and so on. 500 Startups delivered everything at the highest level. It was a great experience and actually it’s still running because when you join the program it’s not like the relationship ends there, it was just a first step. So, we’re still in touch with them because they are our investors, and it still opens many doors. At the moment we’re very focused on expanding to different countries, we already have operations in Portugal, Brazil, and Angola, and now we’re focusing on expanding in Europe, and they have lots of contacts for us here too. And of course, when we enter the American market, which is part of our plan for 2018, they will be a huge help.
The Infraspeak team
Did getting investment change your mindset? Do you notice any difference in terms of your own company culture?
Well, yes. It’s completely different for you to set up a company while bootstrapping, where you have your own timings and flexibility than setting up a VC backed company where you have specific metrics and milestones that are aligned with the investors. The founders need to be ready and they need to align their medium and long term goals with the investors, or they will end up bumping into each other.
Was that the most significant change you’ve experienced so far at Infraspeak?
Not necessarily. I think that the most significant change didn’t have anything to do with investors but with the growth of the team. When we first got the investment from 500 Startups and Caixa Capital and when we were going through Lisbon Challenge we were only 4 and now we’re 12. This was really a transition phase.
Getting to product market fit is really an accomplishment of the founders, but scaling and becoming a successful company is an accomplishment of the team.
And how different was it working with a bigger team?
Well, in the beginning, it was the founders doing everything, from product to sales, from legal stuff to finance, or even cleaning the office. But, when you have a bigger team, the whole thing changes and the founders need to be more focused on growth, setting up the structure and being one step ahead of the company. So, the challenge here is to build a team that is proactive and efficient in order to maintain the growth of the company. I usually say that getting to product market fit is really an accomplishment of the founders, but scaling and becoming a successful company is an accomplishment of the team. So, at that point, the role of the founders is recruiting a talented team and above all provide the support so that these people can do their job well. We’ve been really learning a lot, this transition is not easy, but so far we were good enough, or lucky enough, to hire very talented people. This allows us, the founders, to focus a lot more on the next steps.
And what is your biggest challenge?
I think it’s setting up a growth strategy. Right now in April, we’ll be entering the Spanish market, and this is very important because we’re actually validating our expansion strategy. We have operations in Brazil through a partner, and for Spain and other European markets we’ll set up our own teams. We’ll be facing the challenge of having a multilingual startup with different teams in different locations, and this is what we need to validate. Spanish market will be like a test lab for us where we’ll see if this model makes sense, and if it all goes well growing into 10 other European markets will be like replicating this expansion strategy.
Why have you decided to set up local teams instead of managing it all through Portugal?
Our market/customers are somehow language oriented. If we want to enter Spain we need to speak Spanish, if we want to enter Italy we need to speak Italian. So, our goal is to do exactly what we did in the beginning. First, we’ll start with direct sales, with the meetings in person, and have a dedicated team in the country. And as soon as we get a portfolio that gives us credibility in the market we’ll dive into the inside sales approach. This inside sales approach won’t require a local team but we can get local partners instead to deliver the support to our customers mostly during the implementation process. This is obviously a complex process because we are disrupting an industry that has been buying software in a consulting model, where it takes 6 months to define the project and another 6 months to implement. So, this industry is used to closing deals in person but we’re actually turning something that is very complex into something simple and we’re simplifying the buying and selling process, and that’s why we’re growing so much. However, this definitely implies credibility, these companies don’t just change their processes with a product that doesn’t have a credible portfolio, unless they are early adopters, but that’s really a minority. In the end, it’s about understanding the curve of technology adoption and the diffusion of innovation. We have to reach out to the early adopters and innovators through direct contact, and as we conquer those first customers migrate into a more efficient model to reach the majority of the market.
And how do you see the evolution of your product? What will the future be like with Infraspeak?
The segment of property tech, which is our technological segment and that includes infrastructure technology, is currently very hot. This segment got left behind in terms of technology and innovation for so long that there are many opportunities in the market now. So, in our opinion in the future, we’ll see a growing number of technological and intelligent buildings. In parallel with this artificial intelligence, we’ll see a growing number of data collection on the buildings’ operations and it will be more complex to manage all these big infrastructures, and this is where Infraspeak will be. We will be an interface between the building and its managers. So, we’ll be chewing on these volumes of information on operations and deliver it in a simple way. Obviously, this is a big challenge but this is the way to go and we are really excited to go there first.
In terms of technology, today Infraspeak is already a solution with multiple interfaces that allows the several players to centralise all the information and communicate efficiently. However, the next step will be to integrate IoT in this process. We already have proofs of concept working and we’re now evolving on a few projects with some of our customers by adding sensors in the buildings and by automating failure processes and so on. And from here on, we’ll be entering the world of big data. Right now we have more than 1 million tasks performed through Infraspeak, 75.000 pieces of equipment being managed but, when we start implementing sensors we’ll multiply these numbers by the thousands and we’ll put artificial intelligence to work for our customers. So, instead of reacting to these maintenance issues, we’ll be able to implement models to predict failures according to the available data. Instead of reacting to a problem we will be proactive and act on these failures before they happen. All of this is part of our product roadmap for the next 2 years. So, we still have a long way to go before we call this a success. When we hire people for our team we usually say that happiness is in the day to day life, and not at the end of the process. We’re very happy with our journey so far but it’s still a long way to go.
Lisbon Challenge has now open applications. Get 10k to develop your product in 10 weeks. Apply here.
If you’re an entrepreneur, you have to network. You talk to people, you exchange business cards, from customers to investors, from founders to aspiring entrepreneurs, because that’s part of your job. But from all those, we mentioned above the one that concerns most startup founders is definitely investors. Going after investors and reaching out might be tricky, though not as tricky as you may think. But how should you do it? And how can you seize the opportunity of attending an event like the Lisbon Investment Summit where well-known investors from some of the top VCs in the world such as Accel Partners, Atomico, Index Ventures, or Balderton Capital, will be present?
To give you some tips on the matter we spoke to some of the investors in our network to tell you all there is to know about raising the interest of an investor and building a relationship that will hopefully lead to a closed deal.
1. Do your homework and make a list of potential investors
There are many investors for you to choose from, however, you shouldn’t make a list of 30 people you want to talk to because you don’t want to give the impression that you would take anybody’s money. Do a short list instead. But in order to have a good shortlist you need to do your research and see who is the right investor. Check their portfolio, their style of investment and see if you fit the profile before reaching out. In the end, courting an investor is pretty much like dating so if you feel like talking to 300 people on Tinder maybe you’re not too serious about intensifying the relationship with anyone. So, when it comes to fundraising as a startup there’s really no such thing as a one night stand.
2. Reach out before the event – ideally with an intro
This is definitely a must-do. Remember that you’re building a relationship and that at the event you have a limited amount of time and that many others will also contact the person you want to talk to. So, how can you reach out to them before the event? Don’t just submit to the VCs website or email, what you need is an intro. Ideally, you’ll get intros from one of the partners and from a successful portfolio company. In fact, intros are kind of a natural selection mechanism for VCs to see how resourceful the entrepreneur is. At the end of the day if you don’t bother to find 2 intros you’re not that serious about getting that investment from that particular VC.
3. Engage on Twitter conversations
Twitter is a powerful networking tool and you should use it as such. Follow the investor on Twitter and check their interests and what they’re passionate about. Just don’t go for the shotgun approach that is not personalized and engage in conversations. For example, if you’re a travel startup engage in a conversation about traveling because that’s what you know and the VC will take notice. So, go ahead and give Twitter some credit. We’re tweeting about the Lisbon Investment Summit already through the hashtag #LIS17 so feel free to reach some of the speakers and talk to them about the conference.
4. At the event – be confident but not too aggressive
What people sometimes forget is that investors are just like everybody else. They have their own interests and passions so what you need to do is build a relationship. However, it is a common mistake amongst entrepreneurs to just go for the elevator pitch and sometimes they’re too aggressive, which makes the investor skeptical. If you’re too aggressive and hectic with your pitch you’ll get very critical comments. Instead, you should engage in a conversation about something that you have in common. The investor will most likely remember you if you two had an interesting conversation other than just a regular pitch. The truth is, you have to be confident but respectful and think that there’s a normal person on the other side.
5. Follow up after the event – send regular updates
At #LIS17, you’ll most likely meet with international investors and even if they’re interested in your progress it’s not like they can meet with you in Lisbon often. It’s definitely crucial for you to follow up on the contacts you made and send them regular updates. And remember that as a founder you’re always fundraising, even when you’re not, so keep investors close because you never know when you might have to drop them a call or send them an email for them to jump in on your next round.
So there you go. We hope these tips were useful and we hope you get to put them into practice at #LIS17 – Lisbon Investment Summit this June 6th and 7th. See you there!
P.S.: Remember to get your startup ticket here and get the 2 for 1 deal while you still can.
Every morning when I get to the office before I jump into work, I read. I usually make myself go through all the Techcrunchs and Wireds of this world to take a look at what’s going on from startups to investment, from business to technology.
Therefore, I often bump into these astonishing stories of startups which grew tremendously over a short period of time.
However, a few days ago, one of these stories fell into my lap. A kind of story that you read on Techcrunch, Fast Company, Forbes, or First Round Review
Yes, this is a story about a billion dollar company. A billion dollar company called Eventbrite.
I had a chat with Renaud Visage, partner at Index Ventures and co-founder and CTO of Eventbrite, the leading events platform of the world, to learn from his story and how Eventbrite grew to be a reference in the market. We talked about why in 2009 all they got from investors were no’s and how they turned it around, how Eventbrite built a strong infrastructure to handle a crazy amount of data, how is it like to be on the other side of the table now as an investor, and what he is expecting to see at the Lisbon Investment Summit this year.
Meet Renaud Visage and many other founders and investors at the Lisbon Investment Summit this June.
In an article on the First Round Review called “What Eventbrite Did Early to Create ‘Sustainable’ Success” they write this:
“By early 2009, Eventbrite had been turned down by practically every venture capital firm in Silicon Valley. The economic downturn had taken its toll, and the Co-founders had a choice. They could give up, or they could continue to bootstrap and grind as the only three employees — like they already had for the previous two years on less than 250K.”
Since then, Eventbrite has seen explosive growth and has become a billion dollar company. Can you explain what happened and how you turned it around?
The global and macroeconomic scenario was very difficult and nobody knew until when it was going to last. So, at the time, a lot of VCs were saying no to startups. I remember that Sequoia, for example, had a presentation called “Rest in Peace, Good Times” telling startups that since it’s going to be hard to raise money you need to pay attention to your product and bootstrap as much as you can because there’s not going to be a tonne of funding out there. And that’s exactly what we encountered when we tried to raise money. I think our product already had a lot of traction and it wasn’t fundamentally different a year later when we actually got to close a round, but our metrics were definitely higher. At the end of 2009, we had several term sheets and we ended up picking Sequoia Capital for our Series A.
In the meantime, we managed to raise a bridge round thanks to our early supporters and survive the financial crisis. This was our bridge round between our seed and series A. Our goal with this was really to double-down on the product side, keeping our existing customers happy but to also invest in organic growth. Organic growth had always been what worked for us since the beginning, with SEO playing a big part in our acquisition strategy. We didn’t have much funding so we focused on efficient marketing campaigns instead. We were lucky to have a lot of user-generated content – all these events created a lot of content that nobody else had. So, we built on that and we expanded our SEO presence. In the end, we were able to turn good customers into our most fervent supporters.
I think that you have to be persistent and careful and that’s something that we’ve embedded in our DNA because we’ve had bad experiences before. I mean, in my first startup we raised 50 million dollars, we went from 30 people when I joined to 120 and back to 10 in one year. So, we had a lot of interesting things that we’ve gone through in our past that told us to be careful. We knew that the VC money is not an endless flow of cash that comes whenever you need it. You have to build a strong story, have good numbers to back your story, and build a strong management team over time to attract the type of investements we were able to attract subsequently.
In my first startup we raised 50 million dollars, and we went from 30 people when I joined to 120 and back to 10 in one year.
What was the name of your previous startup and how was that experience?
It was called Zing. It was a photo sharing startup. I think we were getting to this business a bit too early. There weren’t a lot of digital cameras and the storage cost was very high at the time, we had to buy very expensive servers to store it all our content. Now, it would be much cheaper to build a similar business.
Was it just a matter of wrong timing?
Yes, but also when you fail once in a while it’s good because it shows that you can survive and for us at Eventbrite, our growth remained very strong during the financial crisis which was a nice validation of our business model.
In the beginning, you set out to be an enterprise company to help other paying companies produce events. But, you ended up having a lot of free events and from people who weren’t necessarily into the event business. Was that intentional and why have you decided to go with this approach?
When we launched we were 100% free and then we aligned with the interests of event organisers. We decided that we were going to take a commission from tickets sold, so we only make money when our customers are successful. Free events got us a lot of traction and great name recognition. To this day, our freemium model continues to be a strong acquisition mechanism for us. Also, our free organisers turned into paid organisers over time because they experiment with a model and they are not sure if it’s going to work and at some point, they professionalise side activities and can become full time organisers.
At Eventbrite, we went from 1 server to probably more than 800 servers
Now coming a little bit to the technical side, at Eventbrite, you deal with a crazy amount of data, from events to people buying and selling tickets. So, you had to lay down a strong infrastructure to support all of this, how were you able to do that, and how did you evolve over time?
Well, we went from 1 server to probably more than 800 servers today. But, I guess we built the infrastructure over time just like we built our team. We strengthened our weak positions as we evolved. However, the main problem in ticketing is in fast-selling events so, events that sell all their tickets in a few minutes or a few seconds. So, those were the ones which were much harder to solve. We were lucky to have these type of events early on so we learned that our infrastructure needed to have the capacity to host these big events one day. The first few were accidents because people decided to give our platform a try and because we were the only platform where they could do that. But, that’s when we decided to really invest on handling peak demand. So many competitors fail at this including our big name competitor companies that are much older companies fail at this once in a while. So, in terms of infrastructure, we changed to the cloud to be able to scale and have a lot more of these events than in the past. And to also have a better set up of all the software pieces, including the ticket inventory and to make sure the pre-payment system is all in place to give you time for you purchase your ticket and allow us to scale and so on. I think that this was what has been driving our infrastructure. Like, constant increase is easy to handle, you just add a few servers over time, you get a bigger database, but when we’re talking about big fast-selling events we had to make sure our software architecture could handle all of this.
In 2008, you also launched your API. Why and how did that impact your growth along the way?
So, we saw the need for an API when people started reaching out to us because they wanted to show our events on their websites or on their newsletter for example. So, the first API we launched was the event search API where you could find the cool events in your area. And then, we saw there was a lot of demand, a lot of sign ups, a lot of people using it at hackathons, and we expanded from here onward. We started getting interest from larger players like the Mailchimps and Surveymonkey’s of the world and it was very much aligned with our interests because we wanted to meet every need of the event organisers without having to build everything ourselves. Ticketing was just the bigger gap that we saw, for everything else we could set up partnerships through APIs and integrations and our solution would be a lot more powerful.
How do you look at the future for Eventbrite?
Well, hopefully very bright. We still have a lot to do. We have a lot of countries where we want to be present in. We truly want to become a global marketplace for live experiences. On the supply side, we’ve grown by having people on the ground for our major markets. We have people in the US, Australia, Brazil, Argentina, the UK, Ireland, Germany, and in the Netherlands now.
But, we also are getting better and better for bigger events and bigger venues and we want to attract those into our platform as well. We’re also creating end to end solutions for the music venue space. We acquired Queue, a company that does venue management software, and we now have an Eventbrite solution that covers all the way from planning which band is going to play in which stage inside the venue, to managing guest lists, to sending tickets, to letting people in. So, we’re trying to expand our scope beyond ticketing by providing end to end solutions in this space.
We also have been working on distributed commerce. We launched with Facebook, for example, an integration that allows people to buy their tickets directly on Facebook without ever coming to Eventbrite. So, we want to be wherever you are and if there’s an events integration that’s possible we want to build these relationships and integrations so that you don’t have to leave the applications that you’re using. Overall, where you discover the event is where you should finalise the transactions and that is really the great experience we’re creating. And, of course, that also increases conversion.
There’s a tremendous amount of talent in Europe and with the right funding and the right appetite for risk that we learn in the valley we can help a lot of companies grow as fast as they can.
And how’s your work nowadays? You have recently joined Index Ventures as a partner and you’re still working on Eventbrite. How do you manage your time?
I recently joined Index Ventures as a venture partner to help them identify the best companies to invest in. I’m very interested in sharing my experience building Eventbrite with the technology leaders of the future, and joining Index allows me to get close to very promising start-ups that I can accompany during their growth. There’s a tremendous amount of talent in Europe and with the right funding and the right appetite for risk that we learn in the valley we can help a lot of companies accelerate their growth. How would you describe yourself as an investor?
I’m talking about ambitious founders who are both humble and determined to win, and to me that’s a quality that’s not always there.
How would you describe yourself as an investor?
I would describe myself as a very passionate investor. I need to feel a strong connection with the founders and the business. I need to understand where it’s going to go and what it can become. So, I’m talking about ambitious founders who are both humble and determined to win, and to me, that’s a quality that’s not always there. A lot of people try to find ideas that will resonate with investors but it has to come from something that you’re passionate about. For us, for example, it wasn’t just events, it was technology to solve problems and we saw that the event space didn’t strong technology solutions available. So, we were passionate about bringing technology into a space that didn’t have any. And it’s this type of passion that I’m looking for, that and a global ambition, and sometimes that’s difficult to find Europe. The feeling that you have the potential of being a global competitor or not, is not determined by where you start.
But, are you looking at any specific industry or type of business?
I’m more interested in deep tech because that’s where my skills are and understanding how technology bundled together can create a great experience. So, I’m looking for ambitious use of technology to disrupt something which was done in a different way before and make it more efficient and scalable. That’s the type of business that I’m looking for.
Can you give a few examples of startups that fit into that category and in which you have invested in?
A lot of them fit but it’s too early to say if they’re going to succeed or not. But I think Algolia is a good example. I’ve been an investor in Algolia for a few years now. They’re focused on search as a service and they are the best solution out there. To me, that’s the type of company that really changes the game in a specific area and that has global potential. I’m excited about the product but also about the team they’ve managed to put in place, and they’re managing their growth really well and investing wisely.
Is it weird to be on the other side of the table as an investor now?
Not really, it feels quite natural. I was an angel investor before so it feels like a natural transition. I’ve always loved to brainstorm with entrepreneurs to think through their problems and strategy. Even if it’s an hour conversation and even if I’m not an investor I like to mentor other startups. I guess it’s always enjoyable to hear what’s going on in the world and which startups are emerging. And it helps me as a CTO as well to understand where technology is going, what people are using and what is the state of the art in different industries.
The Lisbon Investment Summit is really a great opportunity to not only get know more of Lisbon’s startup scene but to also connect with other fellow investors and finding the right partners to invest in the future.
And now that you’re coming to Lisbon for the Lisbon Investment Summit this June. What are your expectations?
I’ve been in touch with the Lisbon startup scene before and I’ve seen a few great companies coming out of there. So, it looks like it’s pretty vibrant and it looks like it’s attracting a lot of talent from all over the world. Obviously, that the quality of life there is important, and the fact that you can surf at the end of a long day is amazing. Lisbon has now more surfers than San Francisco, I think. So, I’m very curious. It’s been 3 years since I the last time I was there and I’m excited to see the changes. The Lisbon Investment Summit is really a great opportunity to not only get know more of Lisbon’s startup scene but to also connect with other fellow investors and finding the right partners to invest in the future.
Now, I think I have only one final question for you. You say very often that when you’re not writing code, you’re taking pictures somewhere. So, what were your favorite places and favorite photos?
I think I love places that are so different from what you’re experiencing in your day to day. It’s like you’re transported into a different world. I think that Africa does that to you with all those natural parks and wonderful animals wandering around freely and you’re just there as a spectator. To me, that’s quite a unique experience. On the human side, I think that India is my favorite for being so strikingly different in terms of culture and society from what we’re used to in the west. I think that those two have impressed me the most throughout my travels. As for photos, I think it’s a bit like startups I’m always thinking about the next ones and don’t think I have one or two to pick as favorites.
Will you be bringing your camera to Lisbon?
Yeah, of course! I’ll be spending the weekend there so I hope to take some pictures there. To me, photography is a way to focus on something else. We’re very obsessed by our jobs in general, as entrepreneurs and as investors, so having a way to completely disconnect your mind entirely I think is very healthy.
Want to meet Renaud Visage in Lisbon this June? Join us for the Lisbon Investment Summit – register here.