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Building an Artificial Intelligence Software Company from Dallas: Dave Copps, CEO of Brainspace (Part 7)

Sramana Mitra: I wanted to ask you about location and where you’re building your team. Where is the bulk of the organisation?

Dave Copps: We’re in Dallas, Texas.

Sramana Mitra: Everything is in Dallas, Texas?

Dave Copps: We do have satellite offices. We have people in San Francisco, DC, New York, and London.

Sramana Mitra: But those are sales teams, right? You have your engineering and product team in Dallas? >>>

Bootstrapping to $15 Million: David Braun, CEO of TemplateMonster (Part 3)

Sramana Mitra: How did these people find you?

David Braun: Basically, because of the forums. I was very active.

Sramana Mitra: That’s awesome.

David Braun: But you know what, out of this $70,000, $60,000 were fraud and our account was frozen because it was all from stolen credit card numbers. We had to shut down the processing. This is how I knew that the word fraud existed. I decided that I would become a fraud guy to learn how it works. I learned through this shadow criminal community on how they buy these credit  card numbers. It was a digital product and was very easy to steal, so the fraud level for us was about 60% to 70% and it really damaged the business because none of the online processing companies would accept us. We couldn’t find a processor. I learned how it works. >>>

Building an Artificial Intelligence Software Company from Dallas: Dave Copps, CEO of Brainspace (Part 6)

Sramana Mitra: Where are you now?

Dave Copps: We are growing rapidly. In 2015, we grew 300%. I think it was our breakout year. We are already seeing that growth continue into this quarter.

Sramana Mitra: What kind of range are we talking? Is this now a $10 million company or a $20 million company?

Dave Copps: We’re not a startup anymore. I would call us an adolescent company that’s making multiple millions and growing very quickly. You were asking where we are. There are challenges as an entrepreneur as you reach different levels. When you reach a certain level, you have to change the structure of your company and business model a little bit to get to that next level. We’re at that point now. We are opening up new channels into the market.

Sramana Mitra: So you’re a $5 million to $10 million company? >>>

Bootstrapping to $15 Million: David Braun, CEO of TemplateMonster (Part 2)

Sramana Mitra: You were still in Ukraine? This is happening while you were still in Ukraine?

David Braun: Yes, I was in Ukraine. I had shares in that, so I was a co-founder. He was finding the prospects while my job was to organise the production. During this seven months of completing the project, we recruited around 10 more clients. We were starting to make quite a lot of money. It was a quite complex system where we had to integrate the warehouse management systems to the front store. I started to gain some expertise in web development and business communication with customers directly.

I learned one lesson. I don’t want to do the custom programming and design. Even with the understanding that it brings you money, you always have to restart from scratch. Every time, you need to go and meet your customer, validate his needs, and initiate the communication process through the technical specifications. It could never be a million dollar monthly revenue business. >>>

Bootstrapping to $15 Million: David Braun, CEO of TemplateMonster (Part 1)

When you run a business over a long period of time, technology changes create massive challenges. David has navigated TemplateMonster in  several of these.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of circumstances?

David Braun: I’m from Georgia – the former USSR country. I’ve lived there until I turned 11. In 1992, Russia initiated the war in Georgia. We were a very wealthy family. We had to drop everything we had – house, apartments, cars, and so on. We just moved in one day with just the clothes we were wearing. I still have my shorts in which I had to run away. That’s all we had to start.

My father was a teacher. He was teaching math. My mother was a cosmetic specialist. We were moving from one place to another, wherever friends offered free places to live. It all ended up in a small city in Ukraine where I graduated from school and finished university. >>>

Building an Artificial Intelligence Software Company from Dallas: Dave Copps, CEO of Brainspace (Part 5)

Sramana Mitra: Can you succinctly explain what it is that you have that these large companies don’t have that enables you to win those accounts?

Dave Copps: I’d say it’s two things. It’s our core technology and our user experience. We have built a technology that can learn dynamically without the use of any human intervention. Most companies out there, even the big ones with millions of dollars in funding, have some sort of a human-built portion – a lexicon or ontology – that backs their technology. We are one of the first companies to come out with this idea of completely unassisted learning.

You give me a million documents from your company, I’ll read those million documents and build them into an intelligent brain that everybody can use. We built a core technology that can learn dynamically from unstructured information without any human intervention, and that makes us very unique. One of the advantages it gives our customers is they can walk into virtually any company without any pre- >>>

Building an Artificial Intelligence Software Company from Dallas: Dave Copps, CEO of Brainspace (Part 4)

Sramana Mitra: How big was the LexisNexis deal?

Dave Copps: It ended up being a multi-year deal that paid us over $3 million.

Sramana Mitra: That’s awesome.

Dave Copps: For a startup, it’s amazing.

Sramana Mitra: What about the early parts of this company? Obviously, you had made money from the previous company and you had some personal capital to put in. Did you put in personal capital or did you raise money? >>>

Building an Artificial Intelligence Software Company from Dallas: Dave Copps, CEO of Brainspace (Part 3)

Dave Copps: I think when you have too much money, you get lazy. I like the idea that you’re always conscious of every dollar you spend. When I say we raised $3 million, that’s because we brought in more than that in revenue to continue bootstrapping a big piece of it. We were finally given a call by one of our clients. Marsh McLennan wanted to purchase the company and they did. We ended up selling the company for about $32 million.

Sramana Mitra: What year did you sell?

Dave Copps: I think that was late 2006.

Sramana Mitra: What did you do after that? >>>