Buliding a Venture Scale Analytics Platform Company: Birst CEO, Brad Peters (Part 5)

Sramana Mitra: What was your original estimate of the TAM for your application in the financial services area? As the market was shifting, what did you estimate it down to that made you explore other verticals?

Brad Peters: The TAM for each application was probably $100 million. It had to be $100 million to get into it. The idea would be you could find multiple of these $100 million segments. We weren’t sure, but we figured that there are roughly 100 financial services institutions and 150 to 200 minor ones. If we could get a reasonable percentage of them, we’ll probably hit 50% of the TAM, or about $50 million. >>>

Buliding a Venture Scale Analytics Platform Company: Birst CEO, Brad Peters (Part 4)

Sramana Mitra: Was the seed that you got enough to get you to the next milestone or did you have to raise?

Brad Peters: We raised seed financing before we started. We couldn’t afford to make the mortgage payment without a little bit of seed financing. We got a little bit of seed financing from some VCs and paid ourselves next to nothing, just enough to keep the lights on.

Sramana Mitra: In terms of raising the seed money, what did you sell the VCs? What was the investment thesis that you sold the VCs?

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Buliding a Venture Scale Analytics Platform Company: Birst CEO, Brad Peters (Part 3)

Sramana Mitra: What did you do in 2005 when you started this company?

Brad Peters: We needed to do two things. We had to get some funding because we didn’t have personal savings to be able to survive very long. We needed some seed capital. We spent a lot of time thinking through markets where, with a single sale, we could get enough customer traction to fund the company for a period of time. >>>

Buliding a Venture Scale Analytics Platform Company: Birst CEO, Brad Peters (Part 2)

Sramana Mitra: You were at Siebel through that acquisition?

Brad Peters: No, I wasn’t. You could see the writing on the wall. Analytics was exploding. We were doing really well, but the rest of the company was not doing so well. It was actually shrinking. You could tell that the company was on a collision course with something else. It just wasn’t adapting to newer technologies and architectures. There were a couple of observations that came out of that experience. We had this analytics product that was doing really well, which was basically tackling the idea that normal business people in organizations need data to make decisions and that seemed to be something that was insatiable and was going to continue to grow for some time. There was huge demand for that. >>>

Buliding a Venture Scale Analytics Platform Company: Birst CEO, Brad Peters (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Birst’s beginnings had many of the same principles that we espouse in 1M/1M, engaging customers in paying relationships early on being the foremost. Today, the company has raised four rounds of venture capital, and is growing fast as a regular Silicon Valley-style pre-IPO company.

Sramana Mitra: Brad, let’s do your back story first. Where are you from? Where were you born and raised? >>>

Are We in an Accelerator Bubble?

In a recent special issue on digital startups, The Economist writes:

The exact number [of accelerators] is unknown, but f6s.com, a website that provides services to accelerators and similar startup programmes, lists more than 2,000 worldwide. Some have already become big brands, such as Y Combinator, the first accelerator, founded in 2005. Others have set up international networks, such as TechStars and Startupbootcamp. Yet others are sponsored by governments (Startup Chile, Startup Wise Guys in Estonia and Oasis500 in Jordan) or big companies. Telefónica, a telecoms giant, operates a chain of 14 “academies” worldwide. Microsoft, too, is building a chain.

Predictably, many observers talk about an “accelerator bubble”. Yet if it is a bubble, it is unlikely ever to deflate completely. Accelerators are too useful for that. Not only do they bring startups up to speed, provide access to a network of contacts and give them a stamp of approval. They also perform a crucial function in the startup supply chain: picking the teams and ideas that are most likely to succeed and serving them up to investors.

In this post, we will discuss are we or are we not, and what is the prognosis for the trend?

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Venture Capital in Slow Growth Markets: India, EdTech, Cleantech

There are a number of relatively slow growth markets in which we do a lot of business: India and EdTech are two examples. These are also two markets that I am passionate about, and have covered prodigiously for a long time. In a way, these markets, and many others that have similar characteristics, share very similar trajectories vis-a-vis entrepreneurship, venture capital, and exits. Another market in which 1M/1M doesn’t have much presence, but I have invested in, is Cleantech. The story is somewhat similar there as well. Let’s take a look at these slow-growth markets, and how they will emerge over the upcoming years.

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How To Fund A ‘Fat’ Startup

These days, we focus a lot more on lean startups than startups that require capital to get going. The entire industry has moved away from the ‘fat’ startup category. However, infrastructure software, hardware, networking, chips – they need capital. Even in cloud software, to build complex technology like personalization and analytics requires some investment.

How do people fund those?

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