[Part 3] One of the questions I often explore with serial entrepreneurs, is how do they identify the next open problem to work on. In this segment, Siva explains his thought process on how he Found the Find.
SM: Under what circumstances did the company get started?
SK: The company was started in 2004 while exploring ideas to build a startup around the fast growing eBay ecosystem. In 2003/2004 eBay was doing extraordinarily well. In investigating what worked well with eBay and what did not, “search” came out to be far and away the biggest consumer problem preventing may people from using eBay; in fact it still is.
We then looked for a technology approach for a compelling search solution to work with eBay, where myriads of sellers describe products they are selling in many different ways and consumers are searching for the same products but using their own search terms. With the help of some graduating Stanford researchers, we arrived at the answer, what is now TheFind. The answer however was more broadly applicable than with just eBay. We then focused our efforts on addressing the growing segments of online commerce, lifestyle goods, and the TheFind was born.
We followed a typical startup process where looking carefully at consumer (or customer) problems in the context of a large and fast growing market can lead to interesting business opportunities, some of which have defensible technology aspects.
SM: Who financed the company at the very beginning?
SK: Because our idea involved a new algorithmic approach, we had to show that it would work to get venture money. This made it critical to build a prototype. For building a prototype that effectively demonstrated our technology, we raised some seed capital from Cambrian Ventures – a seed fund started by the two guys who co-founded Junglee, the very first shopping search site.
SM: Did you raise Angel money? How much? From whom?
See seed capital above – $1M – to build the prototype site for one shopping category.
SM: Did you raise Venture money? How much? From whom?
SK: Series A1 – February 2005, $7 Million from Redpoint Ventures, Lightspeed Venture Partners, Cambrian Ventures and this included the $1M seed capital.
Series A2 – November 2006, $4.5 Million also from the same set of investors after we launched our site, TheFind.
SM: What we see here is a funding round closing in two tranches, based on previously identified milestones. Notice also that experienced entrepreneurs don’t play too many games about what they are willing to disclose. The philosophy is: If it is that easy to copy, then it’s not worth doing the venture!