Dear All,
It’s been a while since I last touched base with you, but Splento has long graduated from start-up phase to the scale-up cohort, so from now on I’ll write a quarterly update.
If you do not wish to receive this email, please feel free to reply and let me know, or just filter my messages into a special ‘vacation reading’ folder.
So, what’s on the Autumn menu?
Starter:
1) New office
2) Funding
3) Board of Directors
Main Course:
4) Splento’s North Star Metric
5) Competitor’s $2.5mln raise
6) The Ask
Desert:
7) Investor Presentation
8) Thoughts on Startups
Bon Appétit!
Roman
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Complimentary appetizer:
First things first, in April I ran my 7th London marathon and yet again (3rd time!!!) I did it in 2hrs 59m… Talk about grit and consistency!
As a typical startup founder – I’m constantly looking to do more with less. So if any of you are seriously into endurance sports and know any tricks that would help me cut the time below 2hr 45m next April, without doing much work (i.e. running less than 30 miles a week), please let me know.
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STARTER:
1) Offices
Yes, we did move into the lovely Wayra offices (4th Floor, 20 Air Street, W1B 5AN) earlier this year and we cannot praise them enough (both Wayra and the offices)! If you are around, do pop in and say hi. Tea and coffee on us!
2) SEIS/EIS
We got our SEIS & EIS approval and closed our SEIS round in July. Now we have among our shareholders a lovely mix of serial entrepreneurs, lawyers, financiers, tech gurus and yes, a chartered accountant and a chartered surveyor!
3) Board of Directors
We are delighted to welcome Pawel & Konstantin as members of our Board.
Pawel is an entrepreneur who sold his business to Publicis Groupe. He is currently an Executive Chairman for three tech companies as well as an investor and advisory board member of several others. Prior to this, he managed a global corporate innovation program for one of the largest European insurance companies. He has also been a mentor at TechStars, Startupbootcamp, and Co-Director of Startup Grind, London.
Konstantin has hands-on experience in growing marketplace startups from launch to market leadership. He specialises in helping digital businesses grow and currently leads TripAdvisor growth efforts in EMEA.
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MAIN:
4) North Star Metric
There is a very interesting post everyone should read about NSM: https://medium.com/@gokulrajaram/the-second-most-important-metric-for-every-company-df958ff8c5ec
What’s our NSM?
It’s Gross Transactional Volume, which has been stable for most of 2016/2017, but in July it took off and keeps growing. Over the past three months, it’s been going up 30% per month.
What’s the Second Most Important Metric?
It’s Returning Customers. The true check on NSM is how many clients come back and if only TrustPilot encouraged everyone to leave reviews for their subsequent sessions (not just their first orders), we would see many clients leaving dozens of 5* reviews here.
5) Competitors
Our copycat competitor, Snappr, graduated from YC earlier this year and has just raised $2.5mln. I wrote a short blog post about it, which you can read here.
We are extremely happy and we think it’s amazing! With a more experienced team, better product and combined 30+ years of founder-level expertise in professional photography, we should easily exceed their $2.5mln raise and achieve global dominance in no time.
6) The Ask
What we’ve built to date is amazing, but we are realists. What we have is not where the true value lies. What we’ve learned over the past 30 months – that’s what really matters. And we’ve learned a lot!
It would be foolish of me to say that we know everything there is to know about the professional photography industry, but we do know the following:
- Who our target audience is;
- What our target audience needs;
- How to deliver our service efficiently;
- How to maximise our margins;
- Which channels to use to reach our audience;
- How to invest our next round of financing effectively in order to achieve maximum ROMI (return on marketing investment).
So what are we looking for?
We are looking to raise our next round of smart money. If you know any forward-thinking, well-connected ambitious investors who believe that a $100bln industry, which is currently 95% in the hands of freelancers, can be disrupted by optimisation, automation, clear, competitive pricing and great customer service, please introduce us.
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DESERT:
7) Investor Presentation
We had our first formal shareholder meeting in early September. If you’re a fan of YouTube and have 35 minutes to listen to my presentation, drop me a line and I’ll send you the link to the video.
If you only have 5 minutes, then a shorter summary video is available here.
8) My Thoughts on Startups
Apart from my marathon training, many of you know that I also do martial arts, road cycling, triathlons, rock climbing, indulge in work-outs with heavy kettle-bells, play tennis and basketball, and much more, but running is one prevailing sport that I am most passionate about and that I pursue with vigor.
With businesses, it’s the same story. For better or for worse, I am a serial entrepreneur and no matter what, when I see problems, I want to solve them. There are only 24-hours in a day and I do love spending time with my family, so I cannot try and solve all the world’s problems. However, I do love reading, talking and discussing other business ideas and having done this for years, I’ve developed my own views about certain aspects of startup and business life. I’d like to share some of my words of wisdom with you in this section…
What does a good company look like?
A good company is like a good runner.
The basics are simple. A good runner has:
– high VO2 max (good lungs);
– strong legs.
However, without certain fundamentals, you won’t get far. You also need a very strong core, the right mental attitude, regular stretching, warm ups and cool downs, and of course a great team around you.
The basics of a good company are also simple:
– an experienced team;
– a clear idea;
– a clear market need;
– and a straightforward monetisation strategy.
However, this is just on the surface. You do need to dig deeper to see the fundamentals, which are: an efficient operational and management structure, a solid financial and accounting system, and a range of functional traction channels all firing simultaneously.
As we know very well, the human body needs calories to keep going and, similarly, a company needs clients. In most cases, clients supply enough ‘macronutrients’ for the company to survive and prosper and sometimes it has enough ‘fat’ to last through a few marathons on its own. But as long as the fundamentals are right, the company will be ok.
The problem with startups is that their fundamentals are always out of kilter (or non-existent altogether) and that’s what really kills them in the scale-up stage. They may get the basics right sometimes, but they often blow up and hit the wall when the going gets tough.
It took us two years to build the fundamentals of our startup and to get the basics right, but now that we’ve got Splento into tip-top shape, we are ready for the big one!
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COGNAC & CIGARS
Dear Splento Shareholders, you will get a separate follow-up email from me with the good, the bad and the ugly, with all the numbers and financials. Bearing in mind the market is heating up, we can no longer freely disclose this information.
Contact Splento if you are in need of:
