[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)