[HN Gopher] The deck we used to raise our seed funding
___________________________________________________________________
The deck we used to raise our seed funding
Author : jeanlaf
Score : 143 points
Date : 2021-03-31 17:47 UTC (5 hours ago)
(HTM) web link (airbyte.io)
(TXT) w3m dump (airbyte.io)
| fireeyed wrote:
| One thing that's not clear to me is why is there so much
| competition and crowding in "data massage" space. There is
| Snowflake, there are all kinds of ETL tools. The customer lists
| these startup posts have overlaps. Is it just Marketing
| departments inside these companies playing around with these
| tools or the CIOs cycling through the hottest startup on
| TechCrunch list ?
| ABeeSea wrote:
| They all promise to reduce your data engineering budget. The
| problem is that building a data connector is a one-time
| platform problem per data source. Once it's solved; it's
| solved. None of them solve the problem of ETL design and data
| warehousing design.
| edmundsauto wrote:
| It sounds like you don't think solving for data connectors +
| necessary maintenance has a lot of value. I would agree, not
| FTE levels of value, but most companies I've seen in the SMB
| space would do well to pay $1-3k per month to have their data
| all housed in one spot. That lets their 1-2 DS/DE/SWE spend
| their time actually analyzing the data.
|
| Maintaining connectors is also a good way to demotivate high
| achievers - better to have them further down the value
| funnel.
| neumann wrote:
| It is pretty crazy.
|
| I worked for a large organisation where management was far
| closer to 'technology leaders' and 'technology strategists'
| than engineering and data science principles and leads. They
| would endlessly swoop in to our division asking us to assess
| another product they have bought to fix the legacy problems of
| multiple data sources.
|
| All of them were brittle af. They all anticipated a very
| idealistic data source and the absence of non-technical people
| curating data in excel ten different ways.
|
| Even though we were the data science team, we usually ended up
| providing far more value to the organisation because we could
| do data engineering and cleaning and ended up being the source
| of truth for a lot of data required by the wider organisation.
| We got pitched dozens of sexy solutions to fix all our ETL
| problems, but when we started asking questions it was always
| seemed like a well designed custom pipeline couldn't be beaten
| for both data quality assurance, reliability and speed.
| mtricot wrote:
| That's exactly why we are approaching the problem with open
| source. It changes the dynamic of how it gets adopted. we've
| been in your shoes where a tool is being pushed Top-Down and
| now you have to deal with a super complex, super expensive,
| rigid & half working product.
|
| Instead Airbyte gets adopted by engineers, data scientist...
| to solve one problem and then the usage expands from there.
| We can improve the product based on the feedback we get from
| the real users.
|
| And if a feature, a connector is not there, anyone can
| actually add it!
| lmeyerov wrote:
| in my experience, most ai projects die before the ai part
|
| people hate hiring data engineering (plumbing people feels like
| cost), and data eng like tools that work but most are.too
| niche/happypath-oriented, so even w trifacta etc, a lot of open
| territory. SW can solve a lot of that, in theory, so everyone
| wins.
|
| And I agree that until there is an oss winner, the proprietary
| stuff will keep getting churned through. So ultimately whatever
| your data platform does (aws, databrick, whatever) or oss
| you're bringing. A lot of room for vendors to carve out niches
| b/c of connectors x use cases, until platforms/oss eats them
| all. VC's will see some ARR and name brands and thus be happy
| to fund: a lot of gaps any startup can fill. (I am impressed by
| airbyte for a few non-technical reasons even without having
| used it, so not a knock on them, so just some clues for the
| continuing froth in their market.)
| linkjuice4all wrote:
| Coming from an ad agency background I've seen a lot of attempts
| at "unifying" various data sources from client's analytics and
| sales data, agency tools, and third party data sets that are
| all in different formats, date ranges, and scopes.
|
| Warehousing that data might also require firewalling clients or
| teams for privacy or "competitive/conflict" reasons.
|
| These aren't difficult problems to solve with a few
| knowledgeable devs but that is nothing but added cost and some
| agencies just aren't good at hiring the right devs - especially
| if their previous exposure has been basic front end web
| developers from their clients.
|
| "Data warehouse" has also become a selling term even if "really
| big database" is a more accurate term.
|
| Hopefully more of these companies start to distinguish
| themselves in this space but their competition isn't each other
| - it's entry-level data people blasting through Excel.
| starpilot wrote:
| I thought this was going to be about gardening.
| jeanlaf wrote:
| Lol! It seems HN rewrote the title. The initial title was "How
| Airbyte raised $5M with Accel in 13 days (deck included)" I
| didn't know they renamed titles.
| dang wrote:
| Ok, we've put funding in the title above.
| curiousDog wrote:
| Very well explained! Would love to know if you folks are hiring
| SWEs
| jeanlaf wrote:
| We are :)! Don't hesitate to apply:
| https://docs.airbyte.io/career-and-open-positions/senior-sof...
| Logon90 wrote:
| Can you describe a bit more about compensation? Will it vary
| by location?
| kyawzazaw wrote:
| what are the restraints for wherever you want?
|
| country? timezone?
| jeanlaf wrote:
| No limits. Full remote :)
| ahstilde wrote:
| Little confused, you raised 1.8M in preseed, and then 5M in seed?
| jacquesm wrote:
| This isn't entirely in jest but here in Europe that would be a
| series 'A', sadly. Valuations here are on an entirely different
| scale than in the US.
| cj wrote:
| I was a bit baffled to hear valuations in the latest batches
| are reaching $15mm+. For seed. Right of of an accelerator.
|
| If they were able to raise on a cap in that ballpark, the $
| amount makes sense.
|
| I have a feeling these high valuations and giant rounds will
| end up doing a disservice to founders of moderately (but not
| massively) successful startups who are left with $5mm of
| notes to pay back on acquisition with 1x liquidation
| preference
| tangjeff0 wrote:
| Also confused here. Slide 7 [0] says seed funding of $1.8M, but
| Airbyte is also calling the most recent round a $5M seed.
| Implies they will call the first round Pre-Seed retroactively,
| rather than calling the second round Seed+. It's all grey at
| this stage either way!
|
| [0]: https://airbyte.io/articles/our-story/the-deck-we-used-to-
| ra...
| krm01 wrote:
| The deck is really not that important. Things that help you
| raise:
|
| - good product - good connections (accelerators do help) - many
| many meetings
| obayesshelton wrote:
| More importantly the team. Products can pivot Founders are
| crucial
| jeanlaf wrote:
| Airbyte was a pivot from a 1st product. And we had a hard
| time raising with the 1st product. So vision / product /
| market opportunity are also really important.
| francoisp wrote:
| congrats on the raise!
| jeanlaf wrote:
| Thanks!
| laddng wrote:
| Interesting to see the competitive analysis with Fivetran in the
| article but then see almost identical copies of infographics used
| between their site and Fivetran's.
|
| Airbyte: https://airbyte.io/wp-content/uploads/2021/03/Airbyte-
| Seed-D...
|
| Fivetran:
| https://images.cms.fivetran.com/mgtdf72hs0mx/6qYtmEEotXqScar...
| jeanlaf wrote:
| Ah ah! We liked this diagram, because it explained how the
| product works. Also, we already used our own infographic on the
| cover page (https://airbyte.io/wp-
| content/uploads/2021/03/Airbyte-Seed-D...), so we needed
| something different.
|
| Regarding the differences between Airbyte and Fivetran, here's
| an article about it: https://docs.airbyte.io/faq/differences-
| with/fivetran-vs-air...
|
| But essentially, open-source enables us to:
|
| - address the long tail of integrations (our goal is 200+ by
| end of 2021) - we're working on a low-code/no-code framework to
| make it easier to build and maintain connectors
|
| - give you flexibility/customizability to adapt pre-built
| connectors to your needs
|
| - debugging autonomy (we're standardizing how connectors are
| being built, so maintenance can be done by us and the
| community)
|
| - No more security and privacy compliance, as self-hosted and
| open-sourced (MIT)
|
| - No more super high prices (volume-based) that don't make
| sense for big data companies.
| qorrect wrote:
| > we're working on a low-code/no-code framework to make it
| easier to build and maintain connectors
|
| You might take a look at Bonitasoft , I got some use out of
| their connectors ( and WYSIWYG builder ) ten years ago.
| jeanlaf wrote:
| Interesting! thanks :)
| [deleted]
| jacquesm wrote:
| They launched as a Fivetran alternative. So that may not be
| coincidence.
| fireeyed wrote:
| Shhh the investors don't know that. > if can't beat em join em.
| CTmystery wrote:
| I looked at the deck. How will you make money?
| jeanlaf wrote:
| We're a pretty transparent company, so we published our
| strategy and future business model. You can find it here:
| https://docs.airbyte.io/company-handbook/business-model
|
| Let me know if you have any questions on it!
| CTmystery wrote:
| Nice, thanks! Looks like you are working on growing mind
| share for the foreseeable future and layering in enterprise-
| specific features to close big deals. Do you foresee a sales
| team for this? Or do you think independent devs will self-
| serve their way into larger orgs?
|
| Approaches one and two make sense to me. I'm a bit lost on
| approach three though.
| atwebb wrote:
| The Confluent/Kafka or DataBricks / Spark model seems to be
| working out well (Redhat / Linux?).
|
| A bit more on the connectors and capabilities and some
| observability / governance and AirByte would be a killer
| application.
| jeanlaf wrote:
| We like their model indeed!
| jeanlaf wrote:
| So if I understand well, approach 1 is mindshare. Approach
| 2 is sales team, and approach 3 is bottom-up but self-
| serve.
|
| So definitely approach 1. Will be focusing on the open-
| source edition for the next year or more. Doing that will
| help us being deployed in a lot of companies. And we hope
| this will help the sales team close the deals. So it would
| be a mix of 2 and 3. Makes sense?
|
| Anyways, that's what we have in mind. And we'll learn by
| doing!
| dang wrote:
| If curious, past threads:
|
| _Launch HN: Airbyte (YC W20) - Open-Source ELT (Fivetran /Stitch
| Alternative)_ - https://news.ycombinator.com/item?id=25917403 -
| Jan 2021 (87 comments)
|
| _Airbyte: Simple and extensible open-source EL(T)_ -
| https://news.ycombinator.com/item?id=25800766 - Jan 2021 (24
| comments)
| jeanlaf wrote:
| Thanks for putting these links!
| jacquesm wrote:
| Step one: join YC. Step two raise seed.
|
| Seriously, this deck would likely not have flown without the YC
| backing and implicit stamp of approval, once you are in YC you'd
| have to do pretty bad _not_ to raise seed funding.
| codegeek wrote:
| I wonder if there is any YC company that failed to even raise
| Seed Round.
| jeanlaf wrote:
| It's actually a good question. They say 1/3 of the batch
| should raise easily, 1/3 less easily, 1/3 will struggle.
|
| It's also with which fund you are raising. There are many
| funds for sure, but raising with the top tier VCs is
| definitely not 1/3 or even 1/10 of the batch.
|
| Anyways, hopefully, this article was useful to you :).
| ahstilde wrote:
| About a third of the batch is unable to complete their round
| every demo day season.
| mtricot wrote:
| YC does play an important role to get connections to VCs but at
| the end of the day, "YC" is a signal for VCs, not a criteria.
|
| VCs spend time looking at the team, the past achievements, the
| product and most importantly the existing users. They also try
| to invest in industries that they know about.
|
| In our case the team experience was important. We had solved
| the problem internally at other companies (and the scars that
| come with it!).
|
| In one of John's response, he mentioned that we've been talking
| to many VCs. The reason was that we were looking to talk to the
| ones who understand deeply the problem and the market we're
| addressing. No matter how good your product or deck is, if
| you're pitching a calendar app to a VC who is specialized in
| deep tech, you probably won't get them on your cap table.
| nickpinkston wrote:
| First, congrats to the Airbyte team!
|
| Second, I would say though that often having a team from the
| industry with previous exits, etc. is usually a winning formula,
| so YMMV if your team doesn't look like that, even if you have a
| great deck, etc.
| jeanlaf wrote:
| Sure, it does help. I think timeboxing the fundraise gives some
| FOMO to investors, if they know that you're meeting with a lot
| of other ones. There are many things to it. But the team does
| help for sure!
| inthewoods wrote:
| Cool project and story!
|
| FYI - Just tried to view your demo at http://demo.airbyte.io -
| got a blank screen across multiple browsers (Safari, Edge).
| mtricot wrote:
| Just fixed it! Thanks!
| rich-cartwright wrote:
| great work
| jeanlaf wrote:
| Thanks!
| LukeEF wrote:
| Great post.
|
| After just going through a 6 month, pain-filled fund raise for an
| open source database (big on integration), this is probably the
| most upsetting thing I have ever read in my life.
|
| Far away from Silicon Valley with no flashy credentials, 13 days
| is an impossible dream.
|
| That said, massive kudos to the team for such clear storytelling
| & delivery.
| jeanlaf wrote:
| Sorry about that. Hope your fundraise was still successful.
| Don't hesitate to reach out to john [at] airbyte.io, if we can
| help.
| LukeEF wrote:
| It was successful - just painful. And we found really great
| investors in the end. Will drop you a note!
| jeanlaf wrote:
| ok awesome!
| qorrect wrote:
| Can you tell us more ? How is it going, what's the future look
| like, anything we might be able to use ?
|
| Good luck keep trying!
| LukeEF wrote:
| Thanks! My reply looks a little bleak, but it was a
| successful seed round raise (TerminusDB). We are doing fine
| and the future is bright, it just took months of blood,
| sweat, and tears to close.
|
| Struggle is good (sometimes)...
| cj wrote:
| > Far away from Silicon Valley
|
| This could end up helping much more than hurting long-term.
| Engineering salaries in the Bay Area are insane. Salaries for
| engineers in the US overall are very high. If you're in Europe,
| you can likely afford 2-3x more engineers than your competitors
| for the same amount of $ raised.
| mtricot wrote:
| Don't hesitate if you have questions :) It was 13 days but it was
| INTENSE!
| gumby wrote:
| Since the deal was hot did you issue a term sheet rather than
| having the prospective investors come up with terms? The latter
| can lead to anchoring.
| tstegart wrote:
| How did you get in contact with investors? I went to the accel
| website but I can't tell what role they play.
| pm90 wrote:
| They were incubated by YC, presumably that's how the
| connections were made.
| jeanlaf wrote:
| There are 3 ways we got connections:
|
| 1) We did have some intros thanks to being a YC company.
| That definitely helped.
|
| 2) For some funds for which we really wanted intros, we
| asked our investors.
|
| 3) We timed these 2 weeks of fundraising to happen 2 weeks
| after some important product release for us (0.2.0). And we
| did get some inbound from investors (them reaching out to
| us).
|
| Also being at the crossroads of data infrastructure and
| open-source helped a lot, as both are important topics for
| investors right now.
|
| We tried to keep the meetings with the funds that we liked
| most at the end. For instance, Accel was the 42nd investor
| we met with.
| tstegart wrote:
| Thanks!
| jariel wrote:
| How sophisticated are investors in general with niche or arcane
| technology segments that might not be widely understood? Do
| they know enough to tell if your product solves specific
| problems, or are they trusting your market validation?
|
| If it was an 'intense 2 weeks' what compromised the back and
| forth intensity? Negotiation, waiting/anxiety? Were there any
| big surprises during raising or do they 'like it or not'?
| jeanlaf wrote:
| So within 2 weeks, we met with 45 investors (76 calls in 7
| days, that's our record ;) ). Our goal was to identify the 10
| VCs that understood the best our vision and industry and that
| could bring the most value.
|
| On those investors, you could see that 50% didn't know much
| about data infrastructure, or that it was a fresh topic for
| them. But for the 10 funds we liked best, they knew A LOT,
| invested in it, brought a lot of insight and value, just by
| interacting with them.
|
| So for the next round, we will mostly focus on those 10
| funds, keep them posted on our progress, so that the next
| round is just a question of when and how.
|
| In terms of negotiation, I would say we had a lot of
| interest, so we could have negotiated the valuation higher,
| but for us, it was more a question of who we wanted to work
| with.
|
| But will try to write a blog post on the process for more
| details, if you think that could be useful.
| jariel wrote:
| I think that would be incredibly helpful to the community,
| but I wouldn't ever press an 'extremely busy person' to do
| such a thing. I honestly which YC had an 'after action
| report' section for founders just to quickly write up some
| materially experiential things.
|
| Congrats on your raise, your pitch to me has basically all
| of the attributes - some people see it as some kind of
| arcane magic, but for B2B generally I don't think it is, it
| seems you've nailed the issues quite squarely. It's a good
| benchmark well done.
| jeanlaf wrote:
| Will try to find some time for that. Will post it on HN,
| if I do
| jeanlaf wrote:
| If you want to have a look at our GitHub repo, here it is:
| https://github.com/airbytehq/airbyte
| Jiger104 wrote:
| Having worked with Fivetran, Segment and Singer in the past I am
| really excited for an opensource solution like what you guys have
| developed. The long tail of connectors has been a real hassle
| when you work with mostly small companies who use very specific
| SaaS products.
|
| Wish you guys best of luck
| jeanlaf wrote:
| Thanks!
| psing wrote:
| How is Airbyte optimized for building new integrations? Can you
| explain or point to article on that, i'm curious :)
| mtricot wrote:
| we keep on improving the experience (priority #1 :) ). Would
| love to get your feedback there!
|
| Here are some articles:
| https://docs.airbyte.io/tutorials/building-a-python-source
| https://docs.airbyte.io/tutorials/toy-connector
| https://docs.airbyte.io/integrations/custom-connectors
| yllus wrote:
| Nice deck! And terrific market positioning; in doing my own
| research of trying to get all organizational data in a single
| place in an otherwise non-technical organization, I've done demos
| of Fivetran and a few of your other competitors and your analysis
| of their weaknesses are spot on. I'll be giving your product a
| try.
| jeanlaf wrote:
| Awesome, thanks! Don't hesitate to join our Slack -
| https://slack.airbyte.io - (800+ members).
|
| We only have this public Slack workspace for the team, so the
| whole team is there and is pretty responsive!
| JoblessWonder wrote:
| You need a graph of Slack channel adoption... lol.
|
| (The Github stars graph made me think of it! Congrats on the
| funding/product. Looks great!)
| jeanlaf wrote:
| Indeed. We'll add it for the next round ;)
___________________________________________________________________
(page generated 2021-03-31 23:00 UTC)