This Week in Startups - Precursor Ventures’ Charles Hudson & Jason give candid feedback on startup pitches at Founder University | E1212

Episode Date: May 11, 2021

Jason & Charles Hudson from Precursor Ventures take 8 pitches from founders and give feedback on how the pitches were structured (13:10) and their business models (38:48). Pod Notes: http://bit.ly/twist1212

This week in startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. Masterworks. The first company allowing investors exposure into the blue chip artwork asset class. Twist listeners can skip the 17,000 person wait list by going to Masterworks.com and using promo code Twist. And Our Crowd helps you invest early in pre-IPO companies alongside professional VCs.

If you're interested in investing, you can join Our Crowd for free at OUR-C-R-WD.com slash twist. Hey, everybody. we just hosted our 18th Founder University, and it's our fifth one over Zoom. This is an event where over 250 founders get together, and we share with them the greatest advice on how to build your company. As part of this amazing program,

Emmy Award-winning producer Jackie Deegan will bring the top founders to me to get candid advice. And this advice is going to be candid. And these companies are going to be very early. These are MVPs, people just starting out, and at each session, I sit there, I hear their pitch, and I have a little dialogue with a friend of mine, like Charles Hudson from Precursor Ventures. So the two of us are going to give feedback to a bunch of great companies, everything from fundraising pipelines to growth metrics and legal hurdles, all that great stuff.

If you want to come to the next Founder University for $0.0.00. Founders are always free with JCal. I pick up the tab, you get the knowledge, and then maybe, maybe you start a company. and you save a slice for J-Cal. That's what we're looking for here. That's the idea. I give you great information. I teach you everything I've learned. I introduce you to the smartest people in the industry.

All I ask is that when you make that great company, you save me a little slice on the cap table. I think it's a fair deal. So we're going to have our next one in August. You can go to founder. Dot University for updates and to apply. We get a lot of people applying, and we try to pick people who are doing stuff in the world.

In other words, you built your MVP, you got your company incorporated and you're kind of getting started. It's not for people with ideas. That's what this podcast is for. You can listen to the podcast and get some ideas. But go build something in the world. Maybe no code. Maybe you learn to code.

Doesn't matter to me. I just want to see you win. So apply to the next founder university at founder. dot university and enjoy this episode. I hope you learn a lot. I had a good time doing it. Next up, we have Stephanie Chan. Stephanie.

Two minutes. Three to go. Hi. I'm Stephanie Chan, founder and CEO of my care we offer a managed marketplace of pre-screened home care and senior living services. Our vision is a world where all seniors can have their needs met in the way they want at the time they need in the home of their choice. The current home care ecosystem is flawed.

It's characterized by low pay yet high agency fees, meaning seniors blow through their budget and move prematurely into a nursing home. We are adding value back into the home care system by making it easier for families to find, hire and manage these services. So in a nutshell, caregivers can earn a higher wage, seniors save money, and family members can monitor remotely how their parent is doing from wherever they are. As an example from our marketplace, you would choose one of our current six categories, and for home care you can search and filter our pre-screened caregivers, and we also help with the matching process. We create a CareCircle account, and on each shift the caregiver would log

completion of the assigned tasks. In-app messaging means no more fragmented texts and emails, and the family members can see shift summaries and the accrued hours in pay. I have 13 years of domain experience in this area. We have an in-house tech dev team, and together with our board of directors and advisors, we have a vast range of expertise and skills that match our current stage of business. Our revenue model is a mix of transactional fees and subscription fees, and we are in early stage at about 4,000 MRR for our service fees among 40 clients. We have a three-prong strategy to support growth across Canada and into the U.S. That involves value-added services and support.

We're fundraising 500,000, and we are interested in investors who have experience with marketplaces. This money should last us past our anticipated break-even next year. Any interest? Please contact me anytime. Thank you. Okay, thanks so much. Barak, Oxer, you're up next. Yes, okay. Can you hear me?

Sure can. All right, great. Two minutes. Three to go. Hi, this is Barack, one of the co-founders of Spikey. Throughout our education lives, we always had suffered from analyzing our strengths and weak points by ourselves. And the reason is educators have limited time to track every student. And this leads to low retention rates and costs million of dollars to schools and companies. Spike is an AI-based learner and educator engagement platform. We provide custom-tailored feedback to learners, actionable insights to educators, and increase the retention rate.

Our first module, Performance Oracle forecasts future performance subject-by-subject. Exam Proctor automatically detects suspicious activities and reduces proctoring ours. Our last module, Sentiment Detective, monitors learner engagement by analyzing emotions, sleep levels, and voice patterns. You can integrate learning systems and video conferencing tools. with their APIs into the Spike AI platform. We provide 360 analytics in one platform with proactive and actionable insights. Otherwise, a user would use multiple platforms to achieve something less than we provide in one platform.

If we sell to 20 schools in the US, we expect to make $2.9 million by the end of this year, and our target segments are universities, learning platforms, and corporate trainings. Our business model is system as a service or partnerships. We are currently serving to 70,000 learners with our modules. we estimate $300,000 error from the customers in our pipeline after we finish our integration development. We helped Robert College to understand their students need better and made them more proactive. And in the short term, we will increase our integrations and sales, and in the future, we want to become mixed panel for education.

Frucan is an ex-fintech founder with strong business operation background. I have technical management experience in academia and industry. And the market is growing in Mansell, we have seen a great demand since establishment. We believe we have the right team and the time. is perfect. So reshape education with us. Thank you. Oh, under two minutes. All right. Thank you. Rose, you're up next. Two minutes. Three to go. Amazing. So my name is Roy Sterling. I'm calling from London, UK. I am the CEO and co-founder of the Pro Box. The Pro Box is the first interactive beauty and wellness streaming platform and

curated box for beauty consumers worldwide. A high gloss library of specifically curated interactive tutorials and using innovative multi-view technology never seen before. For just £15 a month, subscribers can gain access to a high gloss library of interactive beauty entertainment, hundreds of interactive multi-view tutorials and exclusive brand-focused media. Our users, each month we release a specific curation of beauty boxes and containing full-size products and tools for subscribers to purchase. Prices start from around £60. pounds. Our subscribers use the products to engage in real time with groundbreaking interactive content.

Subscribers can safely recycle their beauty empties via our recycling partners Terracicle. We currently have over 600 brand partners from L'Oreal to Glossier. We have over 10,000 organic pre-signups to the waiting list just for the UK alone. And we have amazing media partnerships with Konday Nast and Hearst, with a CAC cost of only £2. We've recently launched our beta version of the website and have over 15,000 visits per month and we've managed to grow our IG followers to over 2K in just six weeks. Regarding competition, we currently have no direct competitors, but in terms of BT streaming, our closest competitors would be YouTube and for boxes potentially glossy box. Being the first to step into beauty,

streaming. There is currently no direct competition, as I've said, and we have an amazing opportunity here. Myself, I have every 20 years in the beauty industry. My co-founder has a self-taught engineer and has built the platform that you see here today. We are launching. Sorry to cut you off. That's okay. Good job. All right. Great. And Brian, your fourth. Three to go. All right. Hey, everyone. My name is Brian Huff and I'm the CTO and one of the co-founders of Airblock Technologies and we turn paper documents into actionable data. Now, I want to introduce you to Jesus, a documentation specialist and Jeanette, a maintenance executive. At their maintenance company, they don't have an easy way to turn 100 to 500,000 pages of yearly records into actions and at least to boxes and boxes of Excel spreadsheets and headaches like this. So McKenzie and Yata have found that the fees delays and penalties for cargo goods and services totals more than $6 billion. and lost revenue. And for every 90 days, a plane is grounded, the industry loses $12.7 million. And that's just the tip of the iceberg. So Airblock is a digital supply chain network to fix this and connect the records of not just internally with the company, but also companies on the

supply chain and how they work together. So with analytics, you're able to visualize your supply chain in real time, drag and drop data extraction to turn your paper records into data right before your eyes, which you'll see right here, and it'll decompose in like a few seconds, and a fully searchable database of records, allowing you to search, sort, and rank all of your information and all of your records. Also, with virtual document viewing, you can see the paperwork that you've just uploaded to the system. So we just presented Airblock to a panel of NASA chief technologist as part of NASA's I-Tech program. We also just signed our first pre-seat investor on our term sheet, and we're working with AWS ATARC R3 and five companies that we've received letters of

intent from to really digitize the supply chain. And there's 30,000 companies in North America that could directly use something like this. And this is why we're targeting Airblock to be a $100 million company in five years time. Our team collectively has over 50 years of aviation, executive leadership, and technical backgrounds as well. And this is why we know we can't do this alone, which is why we're targeting a pre-seed round of $200,000 to take our technology and really digitize supply chains. So Jason Charles launch and anyone. Let's digitize aviation and aerospace together and reduce the headache of Excel spreadsheets. Thank you. Hey, everybody. I thought I would have Christina Kasyopo on this week in startups to tell you about Vanta.

Vanta, of course, has been sponsoring the pod and had a great reaction. I'm going to talk today just a little bit about what SOC2 compliance is and why it's so important for SaaS products. Welcome to the pod. Christina. Thank you so much for having me. How long does this typically take and what does it cost? Yeah. So in the prior world, if you didn't, use software like Vanta. Often companies would take about a year on the project to figure out what they needed to do, get everything in order, work with the auditor, get the auditor what they needed to get their report. And they probably spent $20,000 on the low end, kind of can go up to hundreds of

thousands of dollars, depending on how large you are. You figured out a way at Vanta to do this quicker, better, and cheaper. So what is the secret and how can people use the product? Yeah, Absolutely. So Secret is sort of like a lot of things. You turn a lot of this into software. So you write a standardized set of checks that a company needs to do. You base them on good security principles. And then you just monitor and alert all that those things. So the company gets a dashboard. They always know where they are. They're not, you know, mucking around in spreadsheets. And the auditor gets just really detailed data so they can be sure that what the company says they're doing is actually happening. All right. Fantastic. Well, thanks so much for coming on and telling the audience why you should get your

sock two when you should get it and how you should do it and you've been very nice to our audience giving them a thousand dollars off uh which is a really significant and generous offer go to vanta dot com slash twist va and ta dot com slash twist to get a thousand dollars off your sock too thanks christina appreciate it thank you so much okay well done all the founders wow i mean really great great interesting group yeah amazing totally different Charles, what I would think would be helpful this time around. I'm mixing it up a bit here is to give your impression of, you know, the business any question and what you think could have been improved in the pitch itself, right?

So we'll just go through all four. This way we give a little bit of the training on that, on what makes for a great pitch so they can learn for the next time. I think for the first one on senior care, I would have liked to understand. a little bit more about why the current, I had two questions. One, like, why does the current hodgepodge of, like, getting these service providers to help seniors like, where is just the real broken friction piece? And then I just felt like I wanted to understand more about the business model, about the combination of SaaS and transactional. It felt like a lot to bite off for a small company and like why you needed to do both of those things at day one.

It's so interesting you say that because I always, when the founders are pitching in this format, load the website in the background real quick. And then in between the sessions, I go look at the website, which is probably what's happening, just so founders know when investors are on the Zoom call with you, they're probably looking at your LinkedIn. They might be multitasking. I don't know if Charles does this, but I certainly do. And I too felt like there was a little bit of a boiling the ocean thing here. Is it SaaS? Is it Marketplace? Which piece of the marketplace actually does the most revenue and the biggest profits? So go ahead and put that. the founder of my care base, go ahead and put that in the chat room here on Zoom and tell us, you know, what is the main focus of the business, which part is the most profitable? Okay, for the second one, which was spiky.a.I.I. I was wondering, I think it's fairly obvious from the presentation, and this is always important in presentations. Is the product live, or is the product in development or is it in beta? And be very clear about that so that we can assess what the reality is here.

And my take was it's not live yet. You're talking to people and you're going to be finishing it soon because you said something about finishing it. So my first question was, who's the buyer here? And do you have an idea of what you're going to charge them, right? Because we are in business and we like to know those things. Charles, what were your impressions there? I had a very similar thought.

I'm an investor in one of the companies that was on the slide, Top Hat, and I know quite a bit about that side of the market. My big question was when I saw 20 customers and $2.9 million in revenue, I was like, wow, that feels big and lumpy. I didn't even know more about like how do you get to $150K in revenue per customer, like who's paying that? Is it per student? I wanted to know more about whether that was a sort of,

and to Jason's point, if it's live and people are already paying, that it's an easy short conversation. Or is it pipeline, right? Is it pipeline? Is it projected? Is it sort of based on extrapolating list pricing? I didn't know how to connect the dots there. Yeah, and assess that. Like, this is your job as the founder to be super crisp. Please be super crisp when you talk to investors. We have seven beta customers. None of them are paying. Just own it. We have seven people beta testing for free. We have one person paying. Just give us reality because Charles and I, we like to invest in an only stage companies, that's the opportunity.

So we don't mind if it's just getting started. I just own it. The prop box, is that they get the, or the pro box. Pro box, sorry. Pro box, yes. What did you think there? I think this is one of those cases where like there's probably no direct competitive threat, but there's a lot of adjacencies.

And I think most of the adjacent, putting aside the box piece, like my big question was, one, like on the education piece, a lot of this does happen on Instagram live and on YouTube And I think that's like a channel. And then for the box, I was like how much testing's been done on pricing for the box. And I would love to know sort of expectations. Is it a box model where I have to take every box? Can I skip? When I wanted to know more about like the mechanics of that because it seemed like that was critical to the monetization.

But I definitely think it's good to at least acknowledge the adjacent competition. Jason, I think I muted you by accident. No problem. I'm trying to mute somebody else. That's Jackie's wish is to be able to mute me. She's got a special remote control. She can just boop. You know, I felt like you were pursuing two business models here.

The box business is an established one. VCs happen to not like it. Content is another business. And when it's advertising, VCs tend to not like it as well because of the scale issues and advertising spiky. But there is a new thing that we have become obsessed with at launch our investment firm because of Com. We had such great success in people paying for.

meditation that was freely available on YouTube, but it was done better and more consistently and refresh constantly with some nice gamification. Then we saw it with Steezy. Then we start with tone base. Then we saw it with musician. Then we started with FitBod. And we just kept placing bets in the space. When you charge people for content and you elevate that content to a very high level, you can have a high enough lifetime value. let's say 200 a year, 500, 300, something in that range, you can actually start to spend money and have a cack under that number and really start to build a footprint. I thought immediately forget about the product business because it's so painful and hard

and just make world class content, put it in an app and let people subscribe to it in the app store. And yeah, sure you could let people buy stuff on your website, have a marketplace, but pick one or the other. And this is one of those things that founders do in the early stages. They think, well, if I have two or three revenue streams, that'll be more impressive, right, Charles? And we have seen companies try to boil the ocean and do three things at once, two things at once, seven things at once, and none of them ever get to scale. And you need different team members for a subscription versus advertising versus software business.

So don't get yourself caught in that trap. Less is more in the and focus is so critical, Charles. Am I, am I? I agree. I, you know, Jason combined me probably even. invested in thousands of companies. And the number one thing I end up talking to people is like, how could we do fewer things, but do them faster and better? And it's just a very common. Very common thing to do in early stage. Well, I mean, and then, I don't know if you have this

happened, Charles, but sometimes people get to 10 million in revenue and then they decide they're going to stop being focused. And I'm like, you found $10 million worth of diamonds in this mine. And you stop digging. Keep going. Keep going. Let's see if there's 50 million. Okay, last one. Give me your feedback, Charles. You're awesome at this. God, we have such good time we do this. The thing I liked about the thing I thought that the air block deck did really well was it was really grounded in the beginning and like the problem.

And I really like when I understand the problem in the first one or two slides, it helps my brain get like focused on the solution. I am not a global logistics expert, but I feel like I know exactly what I'd want to dig in with on this company, which is really like, how big is this problem around digitization? and like, what does it mean to make this data available to your partners and sort of inappropriate? I don't want to just know more about like how the product works, but I thought it was a really good articulation of like the problem space and why the solution works. And my advice to people is always don't spend too much time building to the solution. Like investors have short attention spans, the sooner you can get the solution out there, the quicker and easier it is for us to start jamming with you on all the other decisions

you've made around the product. And I think it's just such, such great advice. there. And I think the reason you did so well with Airblock is because you had a very specific, memorable example. Examples matter. Examples matter. When you give a great example, we as the investors and the audience and customers don't need to figure things out because you've shown us. You're not telling us how it works. You're showing us somebody use it and it works. So we're like, oh, an airline has a lot of paper. Okay, that makes total sense.

The one thing in the presentation I didn't like was you did a lot of high-fiving around metrics I know are kind of weak. When I see Founders Institute, which we know you pay to go to, which is fine, or you got an AWS partnership, which means you got credits, or you won 30 under 30 or pitch competition, all of that stuff is not important. And what it does is it kind of puts you in a bucket of, in some investors' mind, and I'm just taking the most cynical interpretation. So this isn't specific to you. This is just in general. Oh, the founder is not focused on the right things. They care about Forbes under 40. They care about winning a pitch competition.

What we want is customers. Delighted customers, sick, beautifully crafted products. That's where the magic is. Your product is the magic. not these superficial accolades, the high-fiving. Product, customer, product, customer. Oh, team member, good. When we have product, customer, team member, revenue,

these are the things that get investors excited. When we see Founders Institute and 30 under 30, we think, so really, really enjoying these companies. I am having a hard time with this one. I really have a hard time with education. I much prefer selling directly to a customer than educators because it's so slow. So I'm going to go first and give my number two to the marketplace my care base because I love a good marketplace. And I know it's a little distracted, but I think getting focused and having a marketplace for elder care demographics, everybody's getting older.

Who's your number two, Charles? Pro box, actually. Ah, why? Mostly because I think of what you said, it's a case where I think focusing on the thing that's unique and hard to do, which is the high quality digital content, is a really interesting opportunity in a way I think the box isn't. And I would like to think that with a few more conversations, hopefully we could come to agreement on that. Just in terms of, I think, the upside of getting it right for ProBox just struck me as it's just a really big category. So just to keep the flow here, I love the ProBox. was my number one.

If it was a subscription content business and you didn't have to put anything in a goddamn box and ship it in returns and nonsense, fuck all that bullshit. Just sell people great content. Focus on one thing and you will have 10,000 subscribers giving you $10 a month and you'll have $1.2 million in revenue

and it will cost you $500,000 to make the content and you'll be able to overpay YouTubers who are making shit money on YouTube and you'll be able to pay them 500 a video or a thousand a video, make 500 videos, and boom, it'll be a money printing business. That's just my opinion. I don't want to tell you what to do. Charles, I'm literally, I want to tell you.

And I picked Airblock as my number one, just because to me it had the clearest path to becoming a, like an industry standard piece of technology that everybody, you didn't talk as much about, I think sort of the network effects you get from a product like this once most people in the industry are on it and it becomes the de facto way that you share this information. and it could be like really in global aviation's huge.

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Also, see important information at masterworks. com slash disclaimer so that you're fully informed about this opportunity. All right. Let's have Sam go first. Sam, there's you go. I am Sam from sync. And over the past three years, we've been building a set of workforce management tools for construction businesses focusing on simplicity.

and ease of use. As we've grown, we've come to realize that the true problem we're solving is more than just workforce management, it's communication, more precisely a lack of effective communication within teams and the building trades today. There is no real Slack competitor that ticks all the boxes for our type of user, and with more than 1.5 million businesses in our target market, we see this as a huge opportunity. Thank John. He runs a remodeling company, and since COVID has been working more and more from home. Today he needs to run payroll and at a glance you can see as teams ours, how long they were working on each job, as well as cost codes and staff locations and task management. But because he's not at the job all the time, what he really needs is

communication as to what happened on site in his absence. Besides the pay period summaries that we generate, we automatically generate a daily job report, which, becomes the single source of truth for what happened that day right down to any injuries. Any tasks that he wants completed are quickly added to the job, and when he needs to communicate directly of his team, this is all handled inside of sync. And the beautiful thing is, there is no additional hardware required. Everyone manages everything from their own device. We're a freemian business with 1,200 companies on our paid subscriptions. We're currently working on a hosted invoicing system to monetize the other 3.5,000 businesses on the free version.

And since the start of the pandemic, we've grown our MRR by more than 300% to 42,000 a month. We're a pretty engineering heavy team. We all work on the project full-time and are currently raising $1.2 million to assist us and our go-to-market and product development efforts. Thank you for your consideration. Okay, well done, Sam. Talisha, you are up next. All right, Jalicia, you're ready?

three two guys. I'm ready. Hi, my name is Talisha White, founder of Fetch, a visual search discovery engine. Did you know that about 84% of clothing ends up in landfills like this one? It could be frustrating, trying to find the perfect dress for date night or those cute boots that you saw on Instagram. So you settle for close enough knowing that you could just return the item, which you end up doing, and they end up here, then everyone loses. You don't get the item you want it. Retailers and manufacturers lose billions of dollars and billions of tons of weight. end up in our landfill. We're trying to change that.

Now I simply upload a photo of the item or inspiration, and I can filter the results based on my unique taste and individual style. Retailers can now better serve you by utilizing our smart inventory software, along with deep product tagging and advanced recommendations, so that I can always find exactly what I'm looking for. Over the next 18 months, we plan to release our beta to serve specifically the formal wear and bridal industries and scale our users and customers,

then rinse and repeat to other fashion and consumer retail markets. Although there are about 20 startups focus on visual search, along with giants, Amazon, and Google, the real competition is people's comfortability with a flawed system of being sold to, free returns, and relying on a combination of poor search functionality, social networks, and just pure luck to find items. By focusing on the relationships between each stage of the product's life cycle,

you are able to cut down waste while increasing revenues for retailers and manufacturers. Currently, we have about a thousand person wait list. We gained through a versatile conference we produced last year, and we planned to launch our beta at our second conference at the end of the month. I'm a self-tapped software engineer with a decades experienced in firmware and a great support system behind me. Thank you. Okay, so we're all done.

All right. Next up is Paolo. All right, guys. My name is Paolo. I'm the founder CEO of Arena. We are real-time chat platform for the internet. We increase engagement, conversion, and monetization for SMEBs and large enterprises. So think of Discord for every single website in mobile app.

On top of that, we leverage customer data so we can personalize experiences. So let's take a look, some examples here. So we have Harvest, one of the largest broadcasters here in the U.S., doing a live event, and we have a chat placed on the right side that, increase engagement of the users, they can engage in Q&A, polls, and also they can even request for donation, for example. Here's digital events. Virtual events has been a big thing for us for the last couple of months.

We've been to work with large customers helping them to create channels, direct messages, and their relationship with the end user. The same thing with SMEBs, so every single conference or publisher they can deploy in one minute. So that's the easy part of having a deployable product. And here's the deal that we closed last week, the second largest broadcaster creating an experience for the live event that has happened the same time. In the right side, you can see the widget be placed as event happens.

So we have a live chat experience, which is a real-time engagement, and we have the CDP, a custom-added platform. And we are in a very unique position because we are a product-growth strategy with no-code approach. We have also a flywheel growth engine because we go from SMEBs, increasing the market share to enterprise, which helps us to pay the pills. And business model is enterprise. We have enterprise paid us from 2000 a month to 20,000 a month, and SMEBs. Our model is freemian, so it's easy to adopt, get to the product managers and marketing managers until we get to the C level. Here, an example, what happened pre-COVID and post-COVID.

We are very good in Linux-Bend strategy, and today we have 17,000 accounts using from freemian to enterprise level. Okay, sorry, Paolo. And that's it. And that's it. All right. Thank you, guys. Okay.

Now, let's take Angus. You there? I'm going to skip over you if you're not here, Angus. No, thank you. I'm here. Okay. Okay. Sorry, just celebrating because it is now 5 a.m.

Yeah. That's the commitment I'm looking for. To my staff who didn't stay up until 5 a.m. last night, this is the commitment we're looking for. All right. All right, Angus. Two minutes. Two minutes. Here you go. All right. Thank you. Hi, I'm Angus, CEO of Agriery, where we use satellite and climate data to analyze risk and performance in agricultural lending and trade. How do we do this? Let's imagine that I'm a senior credited executive at a big agribank, and I need to review a loan from one of our farming clients where I usually have limited data to make decisions from. With Agri, I have vastly more information. Zooming into the property of interest, I can see 20 years of production history,

and this is really important as I can verify data supplied by the farmer while also having a strong foundation to evaluate multi-million dollar loans. Additionally, Actry provides me with benchmarks, allowing me to compare this farm with similar ones across the local region, state or country, view the ESG scores and the revenue potentials. And lastly, I can see the longer-term climate risks with easy-to-read metrics. To make money, we signed single or multi-year enterprise DAS or SaaS contracts with our average pricing for DAS currently at 20,000 per seat.

We've just won an exclusive contract at 170K for two years to supply a global grain trading company, and since launched last December, we've grown our revenue by 60% on month, now with 10K per month locked in for the next two years. Additionally, we're uniquely positioned to capture the market in enterprise crop analytics here in Australia and are already taking the first steps to bring our services into other territories globally. Myself and my co-founder Matthew have worked together for over five years designing and building the future using satellite data, and we have a world-class set of investors from the industry with experience in building billion-dollar businesses. And in under a year, we've become a market leader in our region and are poised to establish footholds across the many sectors of our agriculture.

And most importantly, Agri establish enables the analysis of land production anywhere on earth. Not only do enhance established markets, but we enable finance and investments into underserved and developing regions. So if you want to help fund the future of our food, we'd love to work with you. Thank you. Okay, well done. Well, everyone just did so well today. Okay, that's our four.

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have already invested hundreds of millions of dollars in over 200 companies with dozens of exits. So again, the R-Crowd account is free. Just go to O-U-R-C-O-W-D.com slash twist. Okay, let's get back to this amazing episode. Okay, Charles, for this quartet, as it were, let's talk about the, any questions?

questions you might have around business models, profit margin, and this concept of unit economics. So I'm throwing you a little curveball here, but I'm trying to make each segment maybe focus on something a little different this time because I'm high energy right now in Miami at the Cafe Cubanos and I'm just lit right now on Cafe Cubanos. Walk through for the benefit of the 284 founders here, what you thought of the business models themselves and why that matters when we make decisions. I think, because I'm always trying to reverse engineer, how does this company become big? And in most cases, the business model is sort of the big input into figuring out.

Because if you just give me a really large market, then I have to figure out, well, how much this is addressable. If you tell me, hey, we charge our customers a million bucks a year. I'm like, okay, so if you've got 100 customers at a million bucks a year, 100 million dollar business, got it. And it's just so much easy. Or for me, if I start with, the other reason the business model is important is because I'm always looking for a business model and a product strategy that are closely linked and

that sort of fit together. And for me, it's a way to make sure I actually understand how you're attacking this problem. And not every great business model works at small scale. There's some that work much better when you have more people on the platform or more users and usage. But it kind of helps me guide where you're going. And without a conversation about the business,

model, it's really hard for me to understand where a company is going to spend their time. So, such a great explanation. So let's just go straight from the top to the bottom and talk about those business models. And we'll just have a little, you know, a little volley here back and forth on each one. The first company that we saw was the Sink business, SaaS business, I believe, for managing remote workforces, i.e. construction people on a site. My big question was, I had two questions. One, like, I think of this historically as an industry that doesn't have a lot of digital tech involved.

And I was like, well, how do you get all of the data that was in those beautiful dashboards? Like, is it manually entered? Is it automatically grab? Like, where does that data all come from? Great. So put that in the chat room and Zoom. Yeah. And then the second, for me, the big question was what's the, this is kind of the other side of the business model.

What's the process look like for selling to these folks? like how do you find the customer? How long does it take to close them? Do they stick around? Is it project? Do they pay by the project? Do they pay annual subscription? I would have wanted to know a little bit more about this sort of the buyer behavior.

So this is just such a critical lesson for everybody. If you are working in an industry that, let's say, is resistant to technology or a laggard, we're just going to immediately think, how do you get them to embrace this? Now, for restaurants, everybody struggled for decades to get restaurants to put in a point of sale system and open table and delivery services. Of course, the pandemic made a massive forcing function and now everybody has digital ordering. But for a decade before, sales forces just crushed restaurants and they got the straight arm every time. We don't have time for this. We don't want to give you money.

And then now 100% adoption because if not, you die. but that is the acute problem with some of these businesses. Also, your website's really ugly. So spend $5,000 refreshing it. I look at the website and man, if it's ugly, I tell you because you know what? I'm your friend for life. If you got that spinach in your teeth, I'm the guy who pulls you aside and says a big hunk of spinach in your teeth. Just how I was raised.

If somebody got bad breath, they're a friend of mine. I tell them. So just make that website just stunningly gorgeous. It's a 5 out of 10 right now. It should be minimum 8.5 out of 10. if you, because people judge books by their cover. But I was fascinated by the business. Okay, Fetch was an interesting presentation because you started with this problem

for this visual search engine for formal dresses. But I didn't feel the connection. I don't know if you had this cognitive dissonance, Charles, which was, which problem were we solving? Landfills, so we're recycling or something? So that was like the setup got me going down one path. And then it was like, oh, it's a search engine for dress. So is it for me to find the perfect dress?

And so, and anytime I hear the do-gooder stuff, something of my mind goes off that says, not a business, it's a non-profit or it's a low-profit. I'm just being honest here. Be very careful when you put that do-gooder stuff in or shave the planet stuff because most VCs, again, will not tell you the truth. I'm your bestie forever. I always tell you the truth. When you lead with saving the world and the planet, a lot of VCs minds, because they get,

That's not how they exist in the world. They exist from profits and exits. They just go, well, why do I take this meeting? Be careful with that. Now, if it was some incredible technology that was highly profitable,

that renewed, that closed, and let you use it again. And okay, great. But there was a little dissonance there for me as to what exactly are we trying to accomplish here. What did you think, Charles? I think, I agree with that. I thought it was going to go more of the,

like, we're going to reduce the waste in the fashion industry, which I've actually met a couple of companies that have, at least they're trying to crack the code on that as like as a, both of the business and like a positive. The thing that I was struck by was you sort of, you set me up for something that I didn't get. Like, you're like, and I know visual search is really crowded. And I was like, good. I agree with you. It is. And I'm thinking Pinterest and all these other companies that are broadly in visual search and discovery. Then I was waiting for the punchline. And here's why Fetch is uniquely positioned to succeed even in the world.

And I just, I really wanted that punchline. And it just, I didn't have anything. It didn't land. And I think if someone had asked me tomorrow, what did you think of Fetch? I'd say, Talisha was unbelievably energetic, high energy, good presentation, clear. Here's what she's doing. And if someone said, like, well, how's it different from Pinterest or something like that? I'd say, oh, you know, I have to get back to you on that.

And I think as an investor, you always want to be able to answer the sort of obvious question that someone's going to ask about your business if you have to explain it to someone else. Or, you know, Jason and I try to get our friends to invest in the same companies we get excited about too. And you want to say it in one sentence, right? We want to be able to tell each other like, hey, this is Airbnb, but for locations, for, you know, filming movies. Or if this would be it's Pinterest, but just for dresses.

And they've got affiliate relationships where they make 50s. $15 every time a dress sells, and they buy used dresses and resell them. So they've got like, you know, new and used. And man, the time to finding the perfect dress goes from days to minutes. Like, boom. And I think that's kind of the business. So this is just a, you have this bundle of energy and a founder. We just need to make it into a laser, not a grenade.

But it was, we could fix it real quick. Okay, next one was arena. I am, I believe. It's the arena. dot I am. What was your initial thoughts there? I think sometimes when you have traction, you should just pull it way earlier in the deck. Because in the beginning, I was just like, all right, this is cool.

No code. I buy it. Chat's a big deal. Discord. Yep. Yep. And I was like, I don't know. Is anyone going to pay for this and use it?

And then I saw 17,000 accounts. I was like, oh, had I known that at the beginning of the presentation, I would have asked really different questions. And going back to investor brain, when you see a company that has a bunch of users and usage, your brain treats that company differently because you can no longer say, well, why would anyone use this? Or will, you're just like, oh, I'm starting from the point that there's almost 20,000 people who've installed and used this. Rather than ask them, why would they? It's more important to say, like, why have they? And it just takes you down a really different path. So I'd encourage you, if you have a lot of users or usage, pull that forward. It just gives you as a founder,

way more credibility earlier in the story. And it allows you to save me in the back of my mind wondering, like, where is this company? And it's the, and Dick Jason mentions earlier, is this thing launched? Is it live? Is you really working with anybody real? I saw that number. I was like, oh, I totally didn't get the scale of this until, like, right now. Yeah.

The way I like to explain it in the accelerator is, like, when there's a movie and it's like an action film, they start with like a really exciting scene. So if you guys have seen Raiders of Lost Ark, you know, spoiler alert, like a boulder chases Harrison Ford and it's got to get the golden idol. It starts with a bang. And every Star Wars movie, they do the crawl and then it lowers and you see a space battle. Like almost every, there's only one or two that don't do that. And so they just start and they pull you right into an action sequence.

And then all of a sudden you start building up the characters. So it's a classic screenplay device. The way you should think about it as a founder, what is strongest about my company? In one case, that might be the traction. Okay, let's put the growth chart up. We are a chat SaaS platform with 17,000 paying customers, and this is how it's grown quarter over quarter and seven quarters. Let me show you how it works. Now, if you don't have that, but you do have a kick-ass product, you start with a demo.

Here's how chat works. It really sucks because you have to pay your developers $15,000 and it takes some six weeks to put chat on. Now, watch this little demo. you put one line of code, you sign up, you authenticate with your Google account, and now you have chat on your server. That was just done in under seven minutes, and we did it for $7,000, not $17,000.

Boom. Products are strongest, start with product. Performance is stronger. Start with performance. Okay. Let's do one more here at the end was agtary. Terry? Actuary.

I think it's an actuary. Actuary. Actuary. Yeah. Okay. What did you think here? about the product than the business model. I've done a fair amount of ag tech investing, so this actually really resonated with me.

The only thing that was, the only thing that was missing for me was sort of, I would have struggled to explain the Tam to somebody else. If someone had said, well, how big can this get? I would have said, well, agriculture's big. That doesn't answer the question around how big is the opportunity specifically for Ag to worry. So I do feel like, in terms of like bottoms up, I think this was one of the better bottoms up presentations of a business. this model. This is how it works. This is how we charge people. This is what we've done to date. And I think the only thing was missing for me was the overlay. And this is how, as we go global with the global ag business, this is how big actuary could be. I'm in agreement. Didn't get the

pricing, didn't get the profit margin. So I was kind of, you know, left a little high and dry there trying to figure out if there's a money per day machine plus my friend and bestie, David Friedberg, createdclimate.com, which did something similar. So I was like, oh, yeah, Yeah, there's something here. I know there's something here. All right. So it was a, but it was a great presentation. If you had to pick a number two and number one, give me your number two.

I think I would actually pick agatories by number two. I've been doing a bunch of investing in ag tech. It's dramatically under penetrated by digital solutions. And there's a lot of money in that category. And I think the problem he outlined is one I haven't seen addressed really that well. Did the purchasers adopt products faster than, say, education or construction? Yeah. They're not consumer, but they're faster.

The ones at least that we've worked on are not consumer, but, you know, Farmer Business Network and a couple others that I've been close. Like, it's a very insidery business, and once you get the flywheel going, it does take away a lot of the friction. That's great. Yeah. So mine was agitary to area as well because I know that I just happened to have some DNA there and I know it. And then my number one.

was Arena because I just love a good SaaS business, predictable revenue. You start next month with either 90% of last month's revenue or 110, depending on if your product turns a lot and it needs to be fixed, or if your product is so good that it lands and expands virally and you get, what do they call that net? Net revenue retention. Net revenue retention. Yeah. Net negative churn.

So which one was your number one, Charles? Same, actually. For basically the same reason. And it was at easy bet. I just think that easy bet. And like chats going everywhere, people want it. And you can't afford to spend a ton of money to get, especially for short cycle things, like for a sporting event or for something that's like very time sensitive.

You need sympathy. It goes, they can go right away. So I can see how this gets in at 2K and grows to 20K, like he's short on that slide. Okay. So now comes the hard part. I want you to pick your top two. So this is not easy to do. And for me, I am struggling.

between ProBox and Arena.im. What came up to the top of your list? Those two ended up being my top two also. Holy cow. And I think the reason is they're obviously like very, very, they're easier bets, right? Yeah. And they seem very focused too, right? I mean, of all the pitches, it was like, okay, this is simple.

Elegant and simple means scale. Complex, multiple business model. means maybe the founders got to take a year and blow through a million or two million dollars to finally get focused. Bam, simple, elegant, do one thing, do it over and over again, and make a money printing machine is the lesson here. Which one was one and which one was two? Oh, okay.

I'm struggling with that. I'm going to go with the box one for my, the pro box for me only because I have so much success with Com and Steezy or we have so much success with that. I go ag number two. I'm sorry, I'm going to go with the IM second. I'll flip it. It would have been ag. Yeah, you flip them.

Okay. Yeah, I'll flip those two. I'd go with the arena first. I think it's, there's a lot of room to run with that business and ProVox will be one number two. All right. There you have that, folks. All right.

Thank you, Jackie.