Teskalabs, GDPR

StartupYard Alum TeskaLabs Tackles GDPR With New Enterprise Solution

Hi Ales, TeskaLabs has done really well post-StartupYard. What have been your biggest successes in the last 3 years?

Thanks, Lloyd. Very glad to hear that. There is a lot of work behind it. As you know, TeskaLabs launched with StartupYard with a focus on securing enterprise mobile applications and networks.  Originally this was with a single core “secure gateway” technology called SeaCat. Based on our cooperation with large corporations such as 02 in the Czech Republic, we have expanded the uses for this core technology into new product lines that support enterprises with large networks and sensitive data in the field.

It is a cruel request to name the most successful piece of work we’ve done. We play a synergic game: we aim to have any new product or feature enhance the whole. So in that sense we are moving on several fronts all at once.

But if I have to choose one, it will be Black Swan, which we first talked about in our annual report last year. Black Swan is originally a part of SeaCat – but today it is a standalone product. It’s a real-time stream analyzer designed to detect anomalies, trend changes, and things that should not be happening on a high-value network. It can be used to identify cybersecurity breaches, detection of malfunctioning IT technologies, but also as a business analytics and intelligence tool.

We deployed Black Swan last year on the national network of a large mobile operator (I won’t name them here), on LTE, 3G, 2G, voice, and data. That investment from their side, I’m happy to say, paid back for them in 5 days.

You also recently announced a new data-anonymization product for GDPR compliance: TurboCat.io. Who is it designed for, and why is it needed?

This is why I said our work is so synergistic. Every time you dive into the problems of securing big networks with lots of different things going on, you discover yet another way to provide more value with the same technology base. That is the case for TurboCat.io as well.

TurboCat.io originated as a part of Black Swan. Black Swan collects and processes billions of datapoints, and a great deal of them are sensitive personal information. Obviously this is a huge concern for telco operators and really anyone who is handling a lot of customer data. GDPR comes with very expensive consequences if data is mishandled or stored in a way that isn’t permitted, so corporations are all thinking now in terms of how GDPR will impact their operations and products.

Therefore, there was particular demand from customers to develop robust tools for anonymization, pseudonymization, encryption, and other tools to ensuring air-tight data privacy. We came up with TurboCat.io thanks to a review with a corporate data privacy officer. We discovered the urgent need for a broader solutions to these issues, so we decided to make it available for others too.

So we created TurboCat.io, a product focused on de-identification of personally identifiable information (PII) as defined by GDPR. You can find more on our blog, where we are publishing a whole series about data privacy for big companies with large databases.

For those who still haven’t brushed up on GDPR and its many new requirements for online businesses, can you tell us what is most important to understand about the new framework?

I think, perhaps a little controversially, that GDPR was needed. Many companies are still in shock and trying to come to grips with the complexities and the limitations on their old data-use practices, but on the whole I think this is a constructive process.

You know, we do cybersecurity, and what we sometimes saw, in the sense of how some companies worked with personal data, scared me frankly. It should scare more people.

GDPR can be viewed as a kind of “scared straight” moment for many companies dealing with a lot of sensitive data and with customer privacy. This was really needed, and it helps to get all of us on one page, dealing with security in a more thorough and complete way. This put everybody on notice that privacy is a right for customers, and must be respected and strictly upheld.

The way the EU bureaucracy has done this is, of course, another matter. It’s not perfect, and it’s not what I would have done, but we are here to deal with it and help companies to adjust.

I view it as essential to privacy and real security, that personal data such as names, emails, addresses, and the like be recognized as having value for their owners. If a business decides to store or process these data, it must also adequately protect them. Fundamentally what GDPR does is to strongly state that these data are our property, and that our property and our privacy are not to be sold or traded as someone else’s assets, beyond our knowledge or control.

GDPR is putting a lot of businesses into panic mode right now. What do you see as the biggest vulnerabilities, and in which industries will GDPR present the biggest challenges?

Yes, you are right. There is a lot of panic.

In general, B2C companies are more exposed than B2B. Obviously B2C companies are dealing with many individuals, and often have many different products and many overlapping data sets and uses for these data that need to be understood, not only by customers but by the companies themselves.

Up to today, large B2C companies such as retailers often did not know all of the data they were storing, who had access to the data, and what all of the data was being used for across the whole company. That can no longer be the case, because in order to do any of these things legally, the company must inform the customers and ask for their permission. They must offer a way of removing these data in many cases, and that requires real changes in the way they operate.

How do you expect that GDPR requirements will change company cultures, or require big shifts in the way some companies operate?

We are working  with several big companies to help them adopt GDPR requirements, and I have to say that it is not really a significant shift at the end of the day.

Staff needs to be well informed and instructed. Bad practices need to be changed, but here it usually correlates with cybersecurity issues, so it needs to be fixed anyway. That’s why I see it as overall positive, not just for society but also for business. These things needed attention, but now there is a strong incentive to make positive changes.

One typical example is a shared account for various online (SaaS) marketing and BI tools. It is very common, and it can do a lot of damage. Single sign-ons for large organizations present a single point of vulnerability that can be exploited. If there is only one way in, then all a company’s associated data is then at risk. GDPR is going to change the behavior of these SaaS providers *and* the companies who use them for the better.

And of course, you should consult your lawyer and review your user agreements. There are probably issues you need to fix. You can no longer hide your data practices behind a general user agreement.

Aside from challenges, what opportunities or positive long-term effects are you expecting from GDPR?

I suspect the landscape of personal data dealing will change significantly. So it is definitively an opportunity for new businesses and innovations. If I have to bet, blockchain technologies and crowd monetization of the access to personal data resonates a lot.

Blockchain allows the possibility of always being in control of what data is shared, and always having visibility on how it is being used. The opportunity to change or correct personal data is really important, and the blockchain allows these changes to be made based on consensus, and not just on the decisions of a particular company. Unfair and descriminatory practices can be defeated in this way, for example by giving individuals the opportunity to see how theirs data is being used in comparison with the data of others.

How should companies make sure they’re compliant with GDPR within the next month?

It is not even a whole month until GDPR become effective. If you haven’t started, I bet you are late already. But no worries, you can still prepare your business. I think that the EU is very much expecting this to be a learning curve, and they must be prepared to give some room to manuever. Then again they will also need to make examples.

Technically: Get a good understanding what personal information you are collecting. Who has access to what, and how you protect these data. Evaluate all data exports and implement de-identification of unneeded entries. And implement monitoring of your IT systems, which will give you an audit trail. That is important for any eventual dispute and will help you a lot.

 

Mindbox

The Sales Trainer’s New Best Friend: MindBoxVR Reveals Open Beta

Sales Trainers know the value of real world experience. But how can they provide it to large groups of trainees in a limited time? Mindbox VR, a StartupYard Alum, has the solution, and any sales trainer can use it today. Peter Tomasovic, CEO and Co-Founder of Mindbox VR,  is a StartupYard alum from Batch 8, focusing on a VR solution for sales and customer service training. Mindbox started out as a tool to help mental health professionals treat the symptoms of phobias, such as a fear of heights, or of insects, using VR simulations as a form of immersion therapy.

During the StartupYard program, the Mindbox team hit upon sales training as a novel use for their VR technology, which allows non-programmers to quickly and easily create scenarios for sales and customer service training sessions. The biggest advantage of using VR for these purposes is that it simulates a real-life experience, and can also be used to generate statistical data that sales trainers can work with to improve the performance of trainees with time. Plus, MindboxVR can be used to train many people at once, and even after the training for skill reinforcement.

You can check out MindBox’s open beta now by clicking here. 

I talked with Peter this week to find out how MindBox got to where they are. 

What have been your biggest challenges since the StartupYard program? How have you solved these?

Our biggest challenge has really been to find out what our customers really need from Mindbox. Separating the “nice to have,” from essential is super important to be able to deliver something that works on the first try. Our customers don’t always know exactly what will be the most necessary features, because most have never used this technology before, so it’s a process of discovery for all of us.

When we were at StartupYard, lots of companies wanted to work with us on the process of validation and experimentation, but in the end they want to have a useful delivered product, so you have to get it right.

Mindbox, StartupYard

Slovak entrepreneurs Peter Tomasovic (right), and Andrej Rybovic (left), Co-founders of Mindbox VR.

Another challenge was to hire new people versus do-it-yourself. When we counted costs for new people, onboarding, learning them technology, understanding product specification, we decided to develop the first version ourselves and use external experts only when solving specific problems or for feedback. This allowed us to move more quickly short term, but it will be a challenge then to scale up the team and delegate when demand is increasing.

How did you arrive at the set of features you have now, and what do you plan for the next iteration?

For the current set of features, two sources of information were most important:

  • companies and training agencies (customers)
  • our advisors

In the case of potential customers, the Pareto principle worked for us. We met with lot of companies, 80% of them gave us “standard feedback” and lot of brainstorming, which was mostly distracting. The other 20% gave us what we have now – a set of features, idea of the scenarios that could be interesting, company use cases. And what is important, is that we are still in touch with these companies and they are now strategic partners.

It is a learning process to understand which prospects are going to be your real customer, and which are going to distract from the development process. We are still learning this.

Our advisors gave us key support here. During StartupYard we met 3 great people, Serge Dupaux, Jana Zurkova, and Silvia Pánková – experts in the fields of HR, business development and sales. We have regular meetings, we had a one day workshop, where we defined a customer journey with the key product features, etc.

For the roadmap and next iterations, we have a set of features from meetings with companies or analysis of competition. But most important for us is to make pilot implementations and find out which features are really crucial. That is the reason we are right now focusing on selling and looking for partners.

What kind of people can most benefit from MindBox VR?

MindBox VR is like a swiss knife for every sales trainer in customer service, product training and sales training.

Unlike most training solutions, MindBox VR is about interaction and immersion. It allows a trainee to interact with voice and reply to a virtual customer. The physical act of doing the interactions repeatedly is many times more effective than just listening to a speaker or reading about the techniques.

Once a training program is created by a sales trainer in Mindbox VR, it can be started on any Android device, but also in a VR headset. Currently we are supporting mobile VR headsets like Gear VR or Google Daydream. This makes it really easy for a sales trainer to deliver their program with whatever equipment they or their clients can afford.

MindboxVR, StartupYard, Sales Training Virtual Reality

If you want to train customer service, you can prepare a training where virtual customer asks you typical questions. They can be standard, like questions about warranty, transport, returning product. Or the can be more “tricky”, like “This product is very cheap. Isn´t it a fake?”. The trainee has to reply to such questions. The mix of standard and non-scripted interactions helps employees to internalize the company policies and best practices, and to be more comfortable in unexpected situations.

So why should a sales trainer use VR instead of more traditional methods?

The key is repeatability and a systematic approach. We all “know” how we would act in some hypothetical situation. But in actual truth, we don’t really. When you are in a real life scenario, there are a million complicating factors to consider, so having the learned experience is the best way to help people be prepared. However, simulations using real people are often less realistic. Co-workers know each other and are often friends. Co-workers want to help each other, naturally. 

When you do play-acting in sales training, the situation is never the same for each participant. It might work for some, but not for all. VR allows us to replicate a specific situation very precisely, and apply systematic testing and feedback on performance. The human approach is still critical, as we are talking about soft human skills, but VR can support this with a data driven approach on top. We don’t want to replace trainers or in-person training, but to augment it with easy-to-use software tools. 

Moreover, sales trainers can set keywords in conversation – critical words that must be said by the trainee when replying. Practice makes perfect, is the saying.  Most important about training with MindBox, is that the trainee has to speak, and really answer questions. It’s not just a dumb script, but a simulation that feels real, and that can change according to what the sales trainer plans. 

This way, you are not developing only knowledge (like when he is reading or watching a slideshow) but also skill, because you have to think about the information in a sentence and actually come up with the right answer for that specific situation.

After the training, trainers will see statistics, reports and complete transcripts of communications with customers, so they can deeply understand what is working, and what needs more work.

Are you looking for funding or more partners? Who should contact you?

We are in touch with some VCs and investors, but for them it’s most relevant to have traction and signed contracts with customers. That’s especially true because this technology is so new to the market, and the market has to be proven.

Therefore most important for us right now is to acquire more early customers and partners who want to really improve their training processes and be among the best in the industry. We have an open beta version, and sales trainers can start training from day one.

We also have 2 example trainings, which a trainer can easily adjust for company needs and start training quickly to see the results. The most relevant first contacts are HR people responsible for corporate training, learning and development, as well as independent professional sales and customer service sales trainers. Heads of sales and those in charge of personal development programs will also find a lot of value in what is available today.

 

StartupYard is Looking for Founders!

Are you a startup founder ready to accelerate your business with CEE’s best network of top mentors? StartupYard’s Batch X Open Call has started.

Our focus this round will be on Automation, Blockchain, and the Future of Work. If you’re working on a hard problem involving Machine Learning, IoT, Identity, Payments, Security, or Decentralization, then we want to hear from you. Find out if StartupYard is your key to a big future.

Chatler Raises 330k to Help Brands Chat

Janos Szabó, along with his team at Chatler, are alumni of Startup Batch 7. They joined StartupYard along with 2 other Hungarian founded teams, Ouibring and Beeem.

Chatler Logo, StartupYard Accelerator

When I spoke with Janos about his company way back in early 2017, this is what I had to say:

“The past year has seen a boom in chatbots, which have become a buzzword in the tech industry, most particularly with retailers and big brands. StartupYard this year handled dozens of applications for chatbot startups, but despite the buzz, none of these seemed to us to have really discovered the inherent value of automating customer interaction on social media, and in customer care. Chatbots are not a new idea, after all, and much of the recent hype has come thanks to Facebook opening its platform for 3rd party developers, which has spurred renewed interest in new applications for chat.”

Today these words seem more true than before. Today, brands and marketers are facing the prospect of decreased access to their customers across social media channels, prompting them to rethink their social strategies, and put even more emphasis on chat and messaging.

Though we still get applications for chat-bot related startups (and we even took another in Batch 8: OptioAI, which has gone on to join TechStars), finding an immediate recognizable value for end-users remains a big challenge. So we’ve been very pleased with our choices so far, as both companies have been able to prove that the genre can be leveraged into compelling and useful products that people really value.

Chatler Team, StartupYard

The Chatler team during mentoring at Batch 7.

I sat down to catch up with Janos about his team’s experiences since leaving StartupYard nearly a year ago, and see what Chatler has accomplished in that time.

Here’s an overview of what I learned, and a look at how Chatler sees the near future for chat, and for itself:

Big Brands Love Chat (and Chatler)

Since finishing at StartupYard, Chatler has signed The Coca-Cola Company as a paying customer in 3 markets, Czechia, Hungary, and Serbia.

Chat via Facebook messenger is a growing category for major brands, who see chat volume increasing faster than any other channel. In addition, recent major changes in Facebook’s algorithm have left big brands scrambling to refocus on messenger as a prime channel for customer outreach. As Facebook decreases brand access to customers via the newsfeed, companies like Coca-Cola are looking to messenger as a bigger part of their future strategies.

That puts Chatler in the right place at just the right time to help big brands handle their social media presence, when content may become less important than personalization and two-way communication.

Chatler, Chat Automation, StartupYard

Many big brands currently use contact centers operating enterprise CRM software, so Chatler has responded by developing API integrations for software companies like vcc.live.  The company provides contact center CRM software for major brands and contact centers in Germany, Poland, Hungary, and Romania. In turn, these larger software providers can offer their brand clients, and also their retail and finance clients, the option of adding Chatler’s AI layer into their current toolset for customer care communication.

That’s a win-win for Chatler, who can provide the core AI functionalities for large clients that already have enterprise solutions in place. With Chatler, enterprise CRM providers can focus on providing the full stack of services to clients. Chatler will be used in this context to monitor communications, and develop automated suggestions and responses that are shown to get the best responses from customers. Chatler can help contact centers use their collective expertise more effectively, and refine customer support techniques using AI.

Investors See the Potential

Chatler has now raised 330,000 Euros (100m Hungarian Forints), from seed investment program of Hiventures Venture Capital Fund Management Ltd.

The investment has helped Janos and his team to build and prepare the launch of their enterprise-ready API, and it has opened doors to high-profile events and demo days, such as those of KPMG, and MOL, Hungary’s largest energy company.

And of course, Chatler is hiring! They’re looking for everyone from developers to salespeople. If you’re in Budapest, or if you’d like to be, and you love what they’re doing, send them an email.

Corporates are Slow, but SME is Interesting Too

While the Chatler team has had to wait longer than they would have preferred to release their API for enterprise customers (which is one of our Startup Facts), the waiting has also reignited their interest in SMEs and social media influencers, who can get value out of Chatler right now.

The team has already recorded some traction by selling their solution to Startup Safari, a well attended city-wide event for tech people in Budapest and elsewhere. Safari will use Chatler to manage the high volume of messages they receive during the events. In some cases, Chatler will work in parallel with a chatbot to allow fully automatic responses to simple questions on schedule, location, and other details of individual events.

That’s why Chatler has created a browser plugin that allows individuals or companies to begin to create a knowledge base from their correspondence on Facebook. Over time, Chatler’s AI functions will begin to suggest answers to common and eventually even complex questions as well. The plugin is designed to enhance the normal chat experience via Facebook, not to redesign it or to fully automate it. Chatler calls this “Next Level Chat.”

We have tested the plugin, and it’s very simple to use. Give it a try!

Leading the Chat Conversation

Chat is a unique channel for customer communication. It isn’t email, it isn’t the phone; it’s something different.

Chatler Brand Marketing, Messaging

Chatler helps SMEs maximize their content strategy reach.

That’s why Chatler has also been developing content for SMEs and big brands to learn about this form of communication in the business context. They have started an active blog, where companies can learn about engaging with their customers, Chatiquette, and turning your chat channel into a content marketing channel as well.

Want to learn more about Chatler? Message them!

Chatler

A messenger code. Scan it to talk to Chatler.

The best way to interact with Chatler is through their own product. You can start a conversation with Chatler on Facebook Messenger by opening the app on your phone, selecting “People” at the bottom of the screen, and tapping “Scan Code.”

Welcome to the future.

 

Feedpresso, StartupYard

Feedpresso: Better News, One Reader at a Time

Tadas Subonis, CEO and founder of FeedPresso joined StartupYard during Batch 7, in early 2017.

At that time, the Feedpresso project was an android app with a small clutch of dedicated users, that helped a person organize and consume the news of the day. It was sort of like Flipboard, but it learned from your reading habits over time to provide a better mix of content you would hopefully find interesting.

Building a content product is a huge challenge, and Feedpresso was no exception. While they rolled out new features, brought feeds online and to iOS, they were bedeviled by the age-old problem of their business model. People who liked the free app didn’t want to pay for it.

So this year, Tadas sat down and wrote an update to shareholders. There would be a significant break in the pattern. Feedpresso would now focus on a very specific kind of customer: the kind that values news enough to pay for the tools to get it. All plans would be paid only.

Feedpresso will reset its strategy, focusing on people in the tech business, who are looking for high performance news aggregation.

I spoke with Tadas last week about the transition, and about his new goals for Feedpresso in 2018. As you’ll see in Tadas’s telling, this transition hasn’t been easy. But today his guiding metrics are not what they were a year ago:

Lloyd: Tell us a bit about your product pivot towards curation and the tech industry.

Tadas: After spending almost a year learning from our failures, we’ve learned (or at least I hope so) that we need to connect with our customers and really dig into their needs, and that’s not possible if we don’t have a very specific person in mind.

We took a look at our audience and ourselves and we realised that a clear audience that we can understand and communicate with is Technology Business professionals. These are people who know the worth of quality content, and are willing to pay to get more out of it.

People that are busy and are in a need of constant updates as the competitive landscape is constantly changing – new best practices, new MAs, and new technologies.

It’s not just about news either.

Another important aspect of the new Feedpresso is that it is a curation tool that helps our customers build their base of knowledge. Organizing and contextualizing timeless content that is important to you is something that’s surprisingly difficult to do with existing solutions.

The way content is presented to us, it has become difficult to give it our full attention, much less to remember it and review it given new information. Whatever is on your feed today is gone tomorrow (or in 5 minutes).

I think that many people feel overwhelmed in today’s culture of newsfeeds and tweets, and unable to really remind themselves of the things they find most important. So we are aiming to help customers contextualize what they read, and build up a record of their knowledge to better understand what they know, and how they know it.

You can see the need for this being met already in other ways, for instance by newsletter curators like Azeem Azhar, who work hard to create a context for modern events that readers can refer to into the future. My feeling is that everyone ought to be able to do that for themselves.

We need to bring back deep reading and reflection.

We’ve even started doing a Technology Business Review newsletter for our customers which turned out to be a success (it has a 70% open rate!). I think this is more evidence that people need more tools to contextualize the content they are consuming and keep track of it.

 

Lloyd: What’s led you to the decision to shift your focus onto power users?

Tadas: I’ve been made to realize, how true the advice by Paul Graham is: “Build something 100 people love, not something 1 million people kind of like.”

It doesn’t matter if you have a thousand customers if they do not care about your product. It is even worse when they all are so different that you can’t even talk to them, because there is nothing you can ask or say that would be relevant to all of them. Even more, the responses you do get are so diverse that the direction to go next is totally unclear. You end up trying to just get more users, any way you can.

Now I see that this is mostly what happens with freemium news products. They just become a machine for catching eyeballs, just like the content they are helping to spread. They don’t end up helping anyone. They just become another layer in a chain of distractors.

I think that serving the need to get more eyeballs on news feeds has really negatively impacted the people at the end of that process. We see more stuff, of lower quality, and it does have a measurable effect.

We are told that people won’t pay for news, which means news isn’t the product anymore, the readers are the product. I think that’s just not good enough.

I am not alone I think.

Last year while we were at StartupYard, Facebook was still denying that this problem existed. Today they are being much more open about it, and admitting that they’ve made some big mistakes. People are really negatively affected by the toxic environment of falsehood and anger on display now.

That is not saying it’s all terrible. Also in 2017, newspaper subscriptions grew faster than any year in modern history. People want to pay for news again. People want quality, and advertising is supporting quality less and less, so paid news is coming back. This can be a moment where people decide it’s worth it to get the right tools to read the news.

So that’s the environment we are in, and we’re targeting a very selective set of customers, who I think understand this problem well, and want it solved.

We’re pretty much back at square one as a business, and we’ve started rebuilding our audience around this new understanding of the problem we solve. Our advantage this time is that we know what the problem is, and we have the tools in place to build on, and try to solve it.

Lloyd: Are you close to a sustainable business model? How much more work do you need?

Tadas: That’s a good question. I have my eyes set on 1000 paying customers this year. That would make this a sustainable business. 1000 could be a lot, or it could be not very much, depending on how well we execute the next phase.

We have just a core handful of users who made the switch with us to a paid product. We’re learning from them every day.

Our customers have a lot of options to choose from, and even if the alternatives are inferior, it becomes really difficult to stand out in the crowd. This is why I believe a shift to focusing on a core set of customers who know the value of the product well is the only way forward.

Lloyd: What are your next steps for the product?

Tadas: The next step in the product is to fix myself  – I still think that there is so much space for improvement in the way we communicate with our customers. Before that is improved, we can’t have a clear direction in the product.

And here I don’t mean clear regarding what new features to add. I think that there is still a gap in the understanding of what fundamental problems our customers have. This news environment is evolving every day, and I don’t think anyone has the answers yet as to how to fix it. But we think we have the right approach, and we have to explore it with our customers.

Lloyd: How can people support the new Feedpresso?

Download us on the App store, or Android, or visit our website at Feedpresso.com to learn more. Get in on the ground floor with a new way of reading the news.

Michal Kratochvil, StartupYard, BudgetBakers, Startups, Accelerator

VIDEO: Mentor, Investor, Startup CEO: Michal Kratochvil Talks Acceleration

Mentor, Investor, Startup CEO: Michal Kratochvil talks about life at StartupYard

StartupYard investor, mentor, and CEO of StartupYard alum BudgetBakers, Michal Kratochvil joined the world of startups after a career in corporations as Managing Director of Accenture Consulting in Prague. Michal gives us an idea of how working with startups has changed his view of business in the past few years, and how he became a believer in Acceleration.

Posted by StartupYard on Monday, 15 January 2018

 

Michal Kratochvil joined StartupYard in late 2015 as an investor, and our 3rd “Executive in Residence,” and has continued in that role ever since. In 2016, he took over as CEO of BudgetBakers, a StartupYard alumni company and personal finance platform that has grown rapidly to hundreds of thousands of active users under his leadership, and now employs about 30 people.

Michal joined us after a distinguished career at Accenture Consulting, where he served as Managing Director for Central Europe for over a decade. His switch to the startup lifestyle was gradual, as he slowly converted from his customary suit and tie, to t-shirts and jeans, also switching from an IBM notebook to a Macbook. Today Michal is deeply involved with StartupYard’s operations, particularly in selection of startups, and helping companies to grow their networks through his impressive personal rolodex.

Michal also studies martial arts, and is a fan of western style horseback riding, participating in rodeo events and exhibitions.

Great interview about #startup #acceleration with @BudgetBakers CEO Michal Kratochvil @startupyard in Prague! Click To Tweet

 

Video: StartupYard Alumni Founders Tell Their Stories

At the end of StartupYard Batch 8, we asked our founders, along with some alumni to tell us about their experience with us for 3 months. Here is what they had to say.

StartupYard is currently accepting applications for Batch 9.

We’re looking for startup founders in Crypto, AI, IoT, and AR/VR!

Get started applying to StartupYard Batch 9. Applications close January 31st, 2018.

 

Build a Killer Customer Persona that Works in 5 Minutes

This week I’m in Kiev, talking to early stage startups in one of eastern Europe’s most interesting emerging tech markets. I’m mentoring at SeedStars, a leading international tech entrepreneurship platform that connects people and ecosystems together.

Ukrainians have a deserved reputation for cleverness and skill as engineers, but as in any very mathematically inclined culture, tech entrepreneurs here often struggle with customer oriented thinking. Because in the last few decades, most of ukraine’s tech industry has been based on outsourcing, product design thinking has not been a priority.

But that’s changing. One thing I’ve noted in my sessions so far is that local entrepreneurs are globally minded, and key to learn new tricks and mindsets in order to achieve their goals. Give me hunger over raw ambition any day: it’s clear these young tech people are looking to grow and to be part of a better future.

The Killer 5 Minute Customer Profile

The truth is, in Central Europe I have less and less occasion to talk to techies about positioning and problem oriented thinking, because the culture has become used to the ideas StartupYard has been promoting for many years.

But today I’ve pulled out an old favorite I personally love to use: the 5 minute customer persona. It’s quick, it’s dirty, but it’s a great way of challenging your thinking about what your company is really selling.

Why do a customer persona?

Most founders are used to the idea that a startup “solves problems.” The trouble is that often the “problem” as they view it is essentially “our customers don’t have our product.”

Take the case of a recruiting platform I met today. The problem they were solving, according to them, was “recruiters don’t have a single platform where they can gather all their leads.”

Maybe that is a problem, but it functions more as a description of the product. I asked the founders a simple question: would your target customer google the phrase “single platform for gathering recruiting leads?” And if so, what would they actually find there?

The answer is a ton of different products. Agencies, software, content, forums. A problem this generic has no one answer.

Enter the 5 minute Persona

Instead of defining the problem, I ask the founders to do a simple paper exercise. I write down the job title of the customer at the top of a piece of paper, and on the left margin I create three sections: Goals, Frustrstions, Fears. It looks like this:

Head of Recruitment Persona

Goals:

Frustrations:

Fears:

Fill in each section (in order!) with 2-3 key points. If you aren’t sure, bracket the point. This helps show what you know and don’t know about the customer, and to get you thinking in their shoes. It’s important to phrase the points as they would be seen by the *person* behind the persona, not the company, or just the position.

The persona we built took five minutes, consisting only of me asking questions about the customer:

Head of recruitment

Goals:

  • Increase Deal Flow (fees)
  • Train subordinates well
  • Improve Pipeline value

Frustrations:

  • Turnover in the team
  • High customer expectations
  • Lack of deal flow

Fears:

  • Automation (bots, AI)
  • Conflicts of interest with clients
  • Competition (Cheaper? Faster?)

Pretty simple, but here’s the clever bit: I then ask the founder to state the problem by describing the fears of the customer, describe the solution as solving the frustrations mentioned, and then describe the outcome as the goals you’ve identified.

Eg:

Problem: Competition and automation threaten recruiters. They need better deal flow and fewer errors to stay ahead.

Solution: a platform that helps you train your team and manage your deal flow, meeting high customer expectations faster.

Outcome: higher fees, a better team, and more business.

This pitch has been transformed into a winner in just minutes.

By starting at the “outcome” or goals, and working down to fears, you get away from your biased views of what customers need or want. First empathizing with the customer, then identifying the benefits your product offers (frustrations), and only then getting to the motivation to buy (fears), we short-circuit our biases about what’s important about the product.

Do This Often

This tool is so easy, I often feel bad for founders who don’t know it. Often they think me as if I’ve revealed some incredible secret, but this isn’t hard to put into practice at all.

In fact, you ought to do it every time you think about a customer, an investor, or even a new hire. Practicing empathy helps us to gain insight into what we know, and shows us what information and experience we lack. And practicing empathy is not rocket science.

It starts with a 5 minute routine.

 

StartupYard is currently accepting applications for our next round.

We’re looking for startup founders in Automation, Blockchain, IoT, AI, AR/VR and Security, or anything else hard to do and globally scalable.

Get started applying to StartupYard.

Mixed Reality Cloud, StartupYard

Meet Mixed Reality Cloud: Augmenting Our Reality

It has been a year of firsts for StartupYard. In Batch 8, we’ve invested in our first vr company, our first Regtech company, our first Proptech company, and finally, our first Augmented Reality (AR), or “Mixed Reality” company as well.

Mixed Reality Cloud, headed by Adam Roszyk, is working on their first augmented reality product: Cloud Stories. It’s a “Photoshop for AR,” allowing creatives in advertising and digital agencies to create AR experiences for brands with no coding, and no need for a specialized IT development team. Roszyk’s mission, as a long time AR geek and a serial entrepreneur from Poland, is to push AR out of the realm of geeky ideas, and into the mainstream, by helping brands to create compelling content and experiences that blend with our reality.

 

The future of advertising (and content), is AR. Where will your customers be in 5 years? I talked with Adam about the project this week:

Hi Adam, first of all, I think we all need a little education on the difference between Augmented Reality (AR), and Virtual Reality (VR). What is the difference, and what does Mixed Reality Cloud do?

Hi Lloyd, first of all if our readers haven’t yet tried Virtual Reality – they’re missing something important. Both VR and AR are new types of human-computer interaction. They will replace keyboards and screens in the coming years.

For me, the difference between VR and AR is similar to how a PC is different from your smartphone – VR is like a PC, or game console – it cuts you off from the real world to take you to the center of a story, game or movie. It requires full dedication.

AR is lighter, but even more powerful – it’s gonna replace your smartphone. It allows a computer to overlay objects and information onto the real world, in a way that feels natural.

This “overlay” of information will be similar to what a smartphone gives you now, but will exist in forms more connected with real objects. It will allow computers to give us much more timely and useful data, based on what we see, not what we type and tap. It’s everything a smartphone can do, but without having to look at a hunk of metal and glass all the time.

 

Adam Rosyzch, Founder and CEO at Mixed Reality Cloud

If you think about it, we have been familiar with the AR concept for many years as a society, via Sci-Fi films like The Terminator, or Iron Man. AR is great for film because it eliminates the very non-human, nonorganic idea of staring at a screen all the time to get data and use a computer. It has been used to show audiences how a computer thinks and decides things.

Very soon, we will start seeing how average people will enrich their environments using AR.

That’s what we are working to do. Mixed Reality Cloud is like Photoshop for Augmented Reality. It’s a set of tools to build AR applications. We do that by creating a virtual space in which a designer can create and test ideas, and then deploy them to the real world in AR experiences.

AR experiences are amazing for mixing ideas with the real world around us. How does a new car look in your driveway? How does a lamp look in your living room? How cool would it be to have your favorite Pixar characters walking around your house?

We don’t currently have software specially made to design and build things in Augmented Reality, and make those experiences accessible for ordinary people.

There are great 3d engines, that try to support AR as well, but at their core they will stay 3d engines forever. We’re AR at heart, and we’re focused only on tools which are necessary to bring AR to everyday life.

 

 

What’s your background in technology, and how did you come to found your own company?

I was studying CS at University of Adam Mickiewicz in Poland, where I started my first company, FunBrush. It was an IoT connected toothbrush to make brushing teeth more fun for children. It allowed kids to watch a screen and play a game while brushing their teeth, and parents and kids loved it. I raised funding at a $1mln valuation for this company, and led it from idea, to first clients, but we failed with scaling up the project.

I think the idea was a bit ahead of its time. The technology wasn’t common enough yet to make it easy to adopt. But that’s life.

After that, in 2015 I moved to San Francisco to work at VicariousVR – where for the first time in my life I tried VR myself.

 

Is the Hype over AR/VR overblown right now, or is something bigger happening?

VR has been overhyped many times in the past. The promise of the tech has always been too big for what we could actually do.

Now the market is slowly realizing its true potential. Every month we see more and more examples of new industries adopting it as a tool; graphic designers, architects, data analytics, or even armies.

VR still has many problems – it’s tethered to expensive pcs, you need tracking devices, there’s no keyboard in VR, etc. However – it’s like the first Mac computers: first we see entertainment and business use cases, then devices get cheaper, operating systems get smarter, and most important there are tools, which can be used only in VR. Businesses begin to see an advantage over those who are not using it yet. Then we’re gonna see way more broad adoption.

AR on the other hand seems to be underhyped, really but isn’t. We still don’t realize how much it’s gonna change our everyday life.

Mixed Reality Cloud, Ghost Shell

The 2017 film Ghost in the Shell demonstrated the potential uses of Mixed Reality

We’re in the Node5 – everyone is sitting in front of their desk typing on a keyboard and staring at a tiny monitor in front of them. Let me just remind you of something: that is not some law of ergonomics, and it is not the way people worked even 50 years ago. It won’t be the way we are working 50 years from now either.

Having lived with AR for years, this arrangement already seems old-fashioned to me.

AR will allow people to work wherever they want, without any other physical devices. You know – computers let people get rid of calendars, rollodexes, calculators etc. Eventually they allowed us to move our work from the desk to the cafe, and have everything with us.

And now AR will help us get rid of the desks and computers completely. You just won’t need them, any more than you need a physical rolodex.

 

Mixed Reality Cloud is focusing first on advertising agencies. Why are these a natural early adopter for the technology, and what problem do you solve for them?

That’s right. Creative and digital departments in advertising agencies are our first customers.

It’s because those people are the ones who already recognize the potential of AR, and they already gets requests from their clients about creating AR experiences. Ikea just released an AR app for phones, where you can see how a sofa will look in your living room before buying it. That’s just the obvious stuff.

 

Mixed Reality, Startupyard

Using Mixed Reality Cloud to look at some food items that aren’t really there.

 

Every business can came up with a similar case of how AR can help them promote, sell, or educate their prospects. I think the first big innovations in this area will come from content, gaming, and advertising – that is the classic progression for a new medium.

But the problem is that marketing agencies don’t have the tools or the know-how required to offer AR to their clients. That’s why they’re using our first product – Cloud Stories – to fill the gap in their production toolchain, and have a tool – which allows them to deliver high quality AR content quickly.

 

You’ve been talking to a lot of potential customers in advertising and design. How do they see the future with AR advertising? What are some of the coolest ideas that might be mainstream soon?

Let’s dive 5 years into a future where you are using AR glasses everyday.

Anything is a control surface. Anything can be enriched with data, if you want it to be.

Just imagine how special your coffee mug is with those glasses: you can see how fresh it is, see how hot it is, or make sure you don’t accidentally start drinking from the wrong one.

Now your calendar, news feed, or maybe even your Slack channel are a gallery of holograms. These data take the shape you choose, and appear when and where you want them, making it easy to share them, experience them, and get the best use from them.

Or you can have a look at a bike you’ve been thinking about buying recently. And it’s beautiful – on roads of Toskania, late in the evening, displayed as a highly polished 3d animation right in front of you.

Ghost in Shell, Mixed Reality, StartupYard

More Mixed Reality advertising in the future city of Ghost in the Shell (2017)

Everything will change with AR. With AR everything around you will have an internet connection– through you. Floors, doors, newspapers, credit cards – also everything will have it’s own interface, yes – every physical object you want- will have any additional layer of information you want it to have.

Putting control surfaces on objects will be as easy as grabbing a new app today. Probably easier. Buying products will be a smarter experience: you won’t waste as much, because you can see how a thing will really work, and if you really need it.

You’re buying a tent – isn’t it difficult to buy one online ? How do you know if that size is right ? With AR, you can set up a campsite in your garden and buy everything you need from AR. You can see and really think through your decisions, and make smarter ones.

A bag presented in AR via Mixed Reality Cloud- it’s hard to tell it isn’t really there.

Imagine searching for a nice place for a date with your wife – wouldn’t it be cool to see 3d models of the places and dishes, instead of just flat 2d photos? That kind of thing can even be experienced on your existing smartphone – like a little window into the AR world.

AR will democratize 3d content – it’s a long process but we’re gonna get there. Now it’s time to build tools for capturing, creating, and editing this content.

 

Some people view this vision of the future as scary, or invasive. It’s a common idea in dystopian sci-fi, for example. Are these cultural critics wrong about the promise of AR? 

Wrong is a strong word. I think in films and writing, you use these ideas to highlight the nature of people, and show how society can go wrong. So advertising and Augmented Reality are often mixed in sci-fi to exaggerate the problems of our current world onto a possible future.

You can learn from these visions, but remember that you have an effect on your own environment. People won’t accept things that they cannot accomodate in their lives, and many marketing strategies have failed because of that. In California, for example, they tried to play tv commercials at gas pumps and checkout lines in the grocery store. People hated it, and they went away. The truth is they didn’t make sense for the advertisers because of that.

We should look at marketing as more about trying to offer people things that are genuinely relevant for them, in the right time and place to help them make decisions. This idea of dystopian hyper-aggressive advertising is not nonsense, but it does ignore the point of branding, which is to be seen favorably.

Brands can use AR to do public art and competitions. They can do it to delight their customers, and there will be ways of shutting it all out, just like there are today. Still today, advertising is a “price” you pay to get something you want, it’s not a tax that everyone must pay no matter what.

 

Why should big brands embrace AR technology, instead of relying on existing channels and methods of delivery? What’s the unique benefit in AR?

You could ask me about the unique benefits of mobile advertising in 2009. There are many benefits in the technology, but what made brands embrace it was that the users spent their time on their mobile phones. It will be the same with AR: the brands will follow the users, and the most creative companies will be there first.

In the last 10 years, it became possible for a company to thrive on the power of one mobile app. And AR will be just like that.

On YouTube you had RedBull, or a million startups selling cool new gadgets that look amazing on video. On AR there will be a big opportunity for brands to shape their image for the new generation. The risk takers will be rewarded.

Teenagers are already native to these technologies. They just gets how it works immediately, like a natural progression from mobile phones. AR will become something as natural as the swipe, or pinch to zoom – it will go from something weird, to the being “the way computers work.”

Brands cannot afford to wait much longer.

 

What is the main technical challenge you’re facing with your technology right now, and how are you planning to solve it?

The key challenges are streaming 3d content to a range of devices like phones, and standardizing how we code 3d assets.

3d models are essential for Augmented Reality, but the problem is that they’re much heavier than 2d photos. To be smooth and natural, they need to work very reliably and fast.

That’s why we’re working on a streaming technology, which will let users downloads only parts of assets which are necessary right in the moment. We’re working also on our own format for 3d assets, which will make integration with other tools easier.

 

You’re one of the younger founders at just 25. How has the experience at StartupYard been for you? Do you think your age has had a big impact on your experience?

Startup Yard has been great for me, mainly because it was reality check for the idea and strategy behind our plan. Talking to 150 mentors in the first month gave us a great perspective on the market and the product fit. It would be impossible to organize such an intensive period without your help. Thank you for that.

There’s no too old or too young in startups. Execution, experience, network and knowledge – those are important things, which you need to consider. Iyou don’t have them, fix it. Get the proper help on your team.
.
Having no resources is a challenge, but having no resourcefulness is death. One thing you learn at StartupYard is how really to value the experience of others, and use it well.

Mixed Reality Cloud, StartupYard, Adam Rozsyk

 

Who has been your most important mentor from StartupYard, and why has that person been so influential?

I think that you Lloyd and Cedric have been the most important people in the program for me – always looking forward to hear my thoughts, share ideas, give your own perspective, and willing to show me what effects certain decisions have, before making them.

Darko Silajdžić, from DDB (one of the world’s biggest advertising firms) was really helpful – and in terms of validating our product ideas, Darko has had a profound impact as well.

 

How can people get access to the technology you’re working on, and start using it?

Sign up on our website to the newsletter about the latest/greatest in AR: www.cloudstories.io
Also you can read my medium, I write a lot about immersive technologies: https://medium.com/@RykAdam

 

 

Applications are open for StartupYard Batch 9!

Are you a startup, or an entrepreneur with a great Deep Tech idea?
Applications are now open.

 

Mindbox, StartupYard

Meet Mindbox: The Future of Sales Training is Virtual Reality

Mindbox is every sales coach’s dream. It’s a Virtual Reality (VR) platform that allows sales trainers to create unique, repeatable, and data-enriched training activities in a virtual environment.

The team behind Mindbox, who join StartupYard as members of Batch 8, are Slovak entrepreneurs Peter Tomasovic, and Andrej Rybovic, old friends who have been VR geeks for many years. Originally, they began work on Mindbox as a tool for psychotherapists to treat anxiety disorders and phobias. Quickly they realized that anxiety and stress are widespread outside the clinical setting, and they set about looking for solutions to occupational challenges that many typical employees in large companies face every day.

I sat down with Peter to talk about how Mindbox became a toolkit for the sales trainer of tomorrow:

 

Hi Petr, tell us a bit about your team, and how you came up with the idea for Mindbox.

Hi Lloyd! Mindbox started out as something very different from what it has become over the course of StartupYard. It all got started two years ago, when I was just playing with VR (Virtual Reality) technology, and a few of my friends were finishing school in psychology. One of them is a clinical therapist now, and the other is a researcher at the Slovak Academy of Sciences.

We are childhood friends, so we started mixing our interests; I came up with some ideas on how to use VR in the context of therapy, and they provided a lot of insight into the kinds of problems that are hard to solve with classic talk therapy.

For example, one thing that’s very hard to treat by talking is a phobia. You need to experience the phobia in a controlled way, and it can be hard to do in a clinical setting. You can’t take a patient to the roof if they are afraid of heights. There is no way to do it in a controlled manner- at least not affordably.

Another thing was anxiety disorders. It’s the same problem: it is very hard to control the process of exposing someone to their anxieties so they can confront them. So MindBox grew from these conversations, and we decided to make it a real thing. We built several “phobia” modules, and even did some testing on real patients, where we found the therapies were really helpful, and sped up recovery.

 

You’ve pivoted away from therapy to sales training. Can you tell us about that shift?

The experience we gained helping people overcome fears is still at the core of what we do. However, we also realized after talking to mentors and industry experts at StartupYard, that staying within the medical context would be very limiting to our ability to have an impact on people in the real world.

With sales training, you can address many of the same issues as with psychotherapy, but you can help many more people overcome their personal limitations. The benefits of VR are still there: it is safe, controllable, easy to repeat, etc. That can work for a lot more than just a fear of heights.

Currently, sales training techniques are quite good, but they require a lot of setup. Role-playing and workshops with hands on feedback are time consuming, hard to repeat, and are likely to be forgotten over time.

An angry customer in Mindbox

 

Research shows that after several months, the effect of a training session mostly disappears. If you could follow up on that with controlled re-training and repetition, the insights could be preserved and the training would stick.

A big influence was our new colleague, Serge Dupaux, a former sales training director with a ton of industry experience, who has helped us see the impact VR can make on that kind of work.

So now, MindBox is platform, that allows sales trainers to create VR training modules without coding. Our aim is to make it so easy to do, that an experienced sales coach can let their imagination run wild, and construct really unique challenges that can be shared and repeated even in really large organizations. Mindbox will be the non-coder’s tool for creating those VR training experiences quickly, and getting necessary feedback in the form of analytics, scoring, and other data.

 

What about VR makes it ideal as an addition to in-person training? Why not simpler methods?

There are easier ways to follow up on training, such as with e-learning, and periodic testing. But these are mostly about knowledge, and not experience.

Typically a sales trainer spends a lot of time simulating situations with the salesperson, doing role playing, and rehearsing strategies. That is quite personal, and can be affected by relationships, the moods of the people, and even the weather or time of day.

If you can add VR as a supplement to this training, then you can eliminate some of these variables and reinforce the important elements of the training. All the salespeople have a chance to work at their best, and experience the same quality of feedback and the same sense of immersion.

With traditional testing, you check knowledge. Here VR can be used to check attitude, comfort levels, and other soft skills that don’t appear in other tests.

 

How do you see VR becoming a broader part of how we do skill acquisition in companies, or even in schools? What will things look like in 5 years?

Our vision for VR at MindBox is about making it a regular part of somebody’s work life. It’s not just about sales training, but also skill assessment, team building, and skill extension and retraining.

Lloyds Bank already uses VR to assess employees, for example. I think this will happen much more. Of course the benefits of VR assisted training are clear also in dangerous jobs, like firefighting and police work, or in medical training. Already we use very sophisticated flight simulators to assess and train pilots.

I see VR training being a fact of life in 5 years. Everyone will see the benefits and the impact it can have. It will not be everything, but it will be a common tool.

That is why it’s important to us today to create a platform where the most creative uses of this technology can be invented and put in practice quickly, to move VR out of the geek basement, to the mainstream.

Further Reading: StartupYard’s Recent post on why so many VR startups are applying to Accelerators in 2017

Short term, what are the biggest technical challenges facing MindBox, and how do you plan to solve them?

The big problem nowadays is finding  good people – technical people. We are looking for Unity3D developers, and it is very hard to find them. At MindBox, we are not looking for “just” an employee or someone who wants to try to work for startup. We are looking for a friend, team member, and a developer with ideas.

 

How has your experience been at StartupYard? What has surprised you, or particularly challenged you as a founder?

The experience at StartupYard was groundbreaking for us.

It has changed the life of MindBox and the whole team. First of all, we found not only mentors, but also friends, passionate people who are helping us and who are pushing us forward.

Most surprising for us was the team and mentors’ will to help. They don’t just introduce you to someone, they care about your progress and they are come up with ideas to help you as a business and a person. I have never seen something like this.

For us, StartupYard is something, like university and business school in 3 months. We definitely recommend it to every startup, because StartupYard can save you years of work.

 

How can people get in touch and see how MindBox works for themselves?

Right now, MindBox is in private beta. Trainers or companies can contact us and it would be pleasure for us to meet with them and talk more about VR and how VR can improve the effectiveness of their current sales training programs.

 

 

Applications are open for StartupYard Batch 9!

Are you a startup, or an entrepreneur with a great Deep Tech idea?
Applications are now open.

 

OptioAI, StartupYard

Meet OptioAI: A Fitbit for your Finances

OptioAI is the next generation of personal finance management applications. Though to be fair, it isn’t really an application at all. Instead, the first Georgian startup to be attend StartupYard (a member of the current Batch 8) has a new vision for personal money management: one driven by conversation, rather than calculation.

OptioAI is an AI layer, that stands between the vast troves of data that banks hold about their customers’ activities, and the customers themselves, who can benefit from a deeper understanding of their own relationship with money. The traditional budgeting and expense tracking approach is replaced with a more casual, and more user driven interactive experience, based on chat, or even voice. What’s going on with your money? Now all you have to do is ask.

OptioAI, StartupYard

 

 

OptioAI gives its users insights into how their daily finances work, how they spend money, and what they could do to improve their own financial situation. I sat down with CEO and Cofounder Shota Giorgobiani to talk about the future of money management.

 

Hi Shota, tell us a bit about your team, and how you ended up founding OptioAI.

For me the ideas behind OptioAI go back to me being a kid. I remember how my mother was budgeting and tracking each and every financial transaction in our family. That’s the way she is. Very responsible.

As it was a really tough time in Georgia, it was vital to control your daily spending to survive. I believe most Georgian families were doing the same. Since then times have changed, the situation in Georgia changed, I grew up, but as soon as I got my first salary, I understood how important it is to manage your money.

The solutions I found for that just never fit my way of thinking. I don’t want to manage every cent the way my mother needed to, but I do want some control over my money. I want a middle road.

Once my co-founder and childhood friend George and I were talking about this problem, and discussing our personal approaches to money management. He also had the same problem and developed his own methods.

We found that for us both, the problem always came back to the interface between a person and their finances. It’s always about numbers: amounts, dates, times. But if we’re being honest, this isn’t really the way that most people think about their money.

You can build a fancy budget in spreadsheets, and have all kinds of plans and variables. But should I buy a pizza tonight for a treat? Can I go to the movies Friday night? These questions remain pretty much as hard to answer as before.

I think that’s why a lot of people don’t track their finances, because at the end of the day, it doesn’t help them make daily decisions that much. It just introduces more data.

Slowly, over many discussions, the idea of OptioAI was born. We wanted to offer people a middle road between fully dedicated expense tracking and budgeting, and just flying blind, not knowing what you’ll have a week from now.

We liked concept so much, that decided to start working on that. As a team, we know each other for a long time, we were classmates and we even had a business together in Georgia in the past. Both of us have long-time experience in our industries: I’m a software architect and engineer while George is a banking specialist.

OptioAI, Shota, Startupyard

left to right: Optio AI Co-founders George Mirzikashvili and Shota Giorgobiani

 

How is “AI for Personal Finance” different from what most startups in this space are doing?

Our mission at OptioAI is to make money management simple and accessible for everyone. It should be as easy as asking simple questions to your virtual advisor and getting instant answers.

Imagine, you are at grocery store and want to know how much you can spend on groceries during the week.  Or you’re surfing Amazon.com and want to buy a cool new gadget, but aren’t sure you can afford it, or if you need to wait a month.

Those small spending decisions you make on a daily basis don’t always seem very important, but they add up to a lot of uncertainty over time. €5 here, €3 over there. For a working class person, this is the difference between saving and going into debt.

People don’t want to think about it. Our user feedback tells us that these end-of-the-month surprises are the biggest cause of financial stress. Most people don’t know how much they spend on food, for example. It’s usually more than they think.

 

So you are trying to show people the results of their smaller decisions?

Exactly. People can convince themselves that a few Euros wasted don’t matter. But they do matter, if you do the same thing hundreds of times in a month.

Buying things is an emotional process, and with most budgeting applications, people are asked to be rational. It just doesn’t always work that way. Am I going to spend an hour analysing my finances and making projections to see if I can buy an Apple Watch? Probably not. I’m going to be making excuses for myself about why I need the thing right now. Even if I don’t.

So to change someone’s mentality, you need to appeal to them in that moment with feedback that fits their mindset. “Can I buy an AppleWatch right now? It’s a simple question, and it deserves a simple answer.

So that’s where we connect the dots: we take historical banking data that our users already have and use AI on top of that, to extract insights, understand a user’s lifestyle, make predictions and proactively help them in building better spending habits.

If OptioAI knows you won’t be able to get by this month if you buy that AppleWatch, then it can just tell you: “Listen my friend, it seems like a good idea, but take a day to think about it. Meanwhile, you need some money to eat this month.”

Or maybe it says: “yeah! You’ve been good this month. Time to indulge.” Making decisions is about understanding the individual’s situation. You need to support good decision making overall, not just always tell the person not to spend money.

 

Why do you think no one has offered your target customers this experience until now?

The mobile banking era showed a lot of people that their banks were not innovating around customer experiences. Many banks have barely changed their mobile apps since first launching them. Today that trend is really coming to a breaking point. People are fed up with their banks, and are more ready than ever to ditch them for a completely new solution.

We’re targeting millennials, who are quickly becoming the most valuable cohort of consumers in western countries.  I think there are several reasons their needs have gone unmet. PFM isn’t a part of the core business of traditional banks. Their thinking about their customer relationships is shaped by consumer banking of the 20th century.

But today the cornerstone of consumer banking is not walking into a branch and talking to someone. Millennials don’t do that. They don’t want to do that. They want the bank’s services “a la carte,” picking and choosing for themselves, online, what they are interested in. Banks have been working towards offering PFM solutions, but it’s very hard to commit to something they don’t see as a core activity for them.

Plus, only certain types of customers like using a full PFM. It’s always going to require a lot of attention and time from the user in order to work well.

So first PFM startups emerged, and now I foresee a wave of AI-enabled finance applications that will do for the majority of customers what banks and PFMs can’t do: which is put a human face on your finances, and keep things simple enough that people don’t just give up.

 

What about the millennial generation is inherently different, and why do they want these new approaches?

In one sense, every generation is different, and in another, they are all the same.

Millennials have the same needs as older generations: they need financial products, cards, savings, loans, etc. But their expectations about how they get those products are completely different.

For millennials who are “digital natives,” everything has always been online, and accessible via computer, and then smartphone, instantaneously. Everything happens now.

Online banking evolved as a kind of version of impersonal in-person banking, which makes sense for someone who is used to in-person banking. Wait in line. Get your card in the mail. 3-5 business days. That’s what banks are like.

To someone who has never banked in person, online banking services make much less sense. For example, why does a transaction take hours or days to execute? That isn’t true in any of the other products that millennials use. Why is money different?

Why can I get packages delivered to my door faster than a wire transfer between two electronic accounts?

Of course it’s because banks used to get away with being slow, and they think they still can. But to people who grew up with a smartphone, 3 business days is a lifetime. It’s ridiculous to them. It’s unacceptable.

Another important thing is how young people use so-called “conversational interfaces.” In the past few years, messaging apps have surpassed every other category, and become the focus of many online activities.

Now younger people want their services to connect with them via messenger, and they don’t want to go to some company’s website and deal with their unique UI, and maybe-maybe-not mobile-friendly interface. Voice assistants like Siri and Alexa are a response to that desire to bypass the traditional web, and get information and answers in real time.

For millennials like myself, time spent scrolling is time wasted. Websites and apps are for the old internet. The new internet is where I am, when I need it, in the form I choose.

In a funny way, it really is something older generations wanted as well. In the past, that personal relationship between you and your banker was an in-person thing. But banks got rid of that, and made themselves faceless companies. Now we are using technology to “re-personalize” them, but around the types of interactions that work best with modern technology and lifestyles.

Millennials want transactional relationships. We want to be understood but not judged. Our generation avoids bureaucracies and hates formalities. We want “personalization at a distance;” experiences made just for us that feel personal, but are also done privately, anonymously, and without judgement from another person.

OptioAI, StartupYard

 

How can banks and PFM companies adapt to serve this new user base? How can they take advantage of what OptioAI is doing?

If there’s enough vision and understanding from their side, I think it’s pretty easy. Banks can even boost the process.

If you are a bank that is trying to adapt for younger users, you need to look at what they are already using and why. Where are they spending their time? That should tell you what seems natural to them, and you should work out new ways to make your services available in a similar way.

OptioAI can help banks to do that.  We can provide the “voice” with which the bank speaks to customers. The banks have all the customer data, and they’re not thinking about how that data is useful to the customer. They aren’t putting it in a language the customer understands. That’s an epic mistake.

PFM companies attract a certain kind of person. I think there are some great examples of PFMs that help their customers a lot. OptioAI can also serve as a way to get those users interested in their finances, and willing to take a “deeper dive” using a traditional PFM. We don’t provide the same kind of value as a PFM does. So we could compliment each other well.

 

Your vision has shifted quite a bit since joining StartupYard. Which of the mentors has had the biggest impact in helping you find this approach?

It would be hard to name one particular mentor or influencer, I think it was more result of teamwork of OptioAI and StartupYard team, as we were “distilling” the information from mentors more or less together, and that’s how we ended up with our current vision.

To be more correct, this process helped us to widen our perspective and correctly articulate what we are doing, I can’t say that we changed our vision by 180 degrees, it was more about understanding and formulating it correctly.

One thing about going to an accelerator, is that a lot of things you think are clear are just not that clear. Even to you. The mentorship process made this painfully clear to us, and we are stronger, and have a stronger vision because of that.

 

Where do you see OptioAI going in the next year or two?

The next two years are crucial for this industry, and our young company. We have to get great traction, expand to several countries, create a user experience that everyone loves and prove that our vision matches with our users’ needs. And somehow we have to do that all at once.

That makes for a super hard and exciting journey ahead. But we are loving it.

 

You have a vision for how OptioAI will fit into a “post-app” technology landscape. Can you describe what that experience will be like for your customers?

This post-app future we’re talking about is already arriving now, as we’ve seen.

Today it’s a text communication: you can talk with OptioAI using Facebook messenger, so there’s no special app that you have to download, install and register. If you are on Facebook, you can instantly start using OptioAI, and that’s how easy it is.

Just to give you quick glance of how it looks and feels: Imagine, you have your personal financial assistant: it goes through your banking statements, knows your balance, gets insights and trends from your historical transactions and works 24/7 to help you.

Every morning, it gives you quick glimpse of the previous day, just giving you info about cumulative spending, and then helps you to plan the day. This becomes a routine that continues every day. So it’s about setting up simple, contextual interactions that are not intrusive, and don’t take a big effort on your part.

Of course OptioAI has plenty of other skills, like you can ask in plain text how you spent last week on groceries, or how much you spend on average at Starbucks during the month. The great thing about this AI first approach is that we don’t have to redesign an app or think about the UI much at all: it’s all about what the thing can do, and what it can learn to do.

But for that, just talk with OptioAI, it’s always better to experience it yourself.

You’re based in Georgia. Are there particular quirks about the Georgian market or culture that you would say give your company an advantage or a fresh perspective?

Georgia is a fantastic country in many different aspects, and I think it’s also a great place for starting and testing your product, ideas and concepts.

For us, it’s a big advantage to start there as we know market, culture, and there’s almost no competition in personal finance management. Operating there is way cheaper than in the EU. On the other hand, because of the market size, it’s very hard to scale there, especially for products like OptioAI.

So, home-field advantage yes, but global impact, not so much. This is why we are planning to scale beyond Georgia as fast as possible. We will use it as our test-bed.

 

How can potential partners reach out and start working with OptioAI today?

We are ready and happy to partner with interesting companies. We are open for conversations to explore how well our product and potential partner needs are aligned. So if there’s any interest, I would be glad to start conversations today. For that you can reach me personally me at shota@optio.ai

But here’s an even better idea: talk to Optio right now on Facebook, and ask for Shota. Then we’ll be connected in the place where our company really lives.

 

Messenger Code Optio AI, StartupYard

Click to chat, OR scan the chat code using your Facebook Messenger App

 

 

Talk a bit about your experience with StartupYard. What were the surprises, challenges, highs and lows?

It’s not so common that Georgian startups get into EU or US accelerators and we had a long journey before we got our acceptance email from StartupYard (which was one of the most exciting emails on my life).

If you are going for the first time to an accelerator, the information you have is what you can find in Google, a personal recommendation if you know any alumni. It was hard, it was intense, it was exciting and super challenging.

I think the first phase -mentorship sessions- is one of the biggest advantages and differentiators of StartupYard. Meeting 100+ mentors in about 20 days is crazy stuff. There were days, when we had six or seven 45 minute meetings, one after another. It may sound hard (and it is hard) but it’s like putting your brain on steroids. You get so much information, so many opinions and contacts that sometimes you just can’t sleep later in the evening, because you are still analyzing what you have heard.

You get access to the C-level representatives of industry leaders, banking, insurance, car production, other startups, and the list goes on. In one day you may get a connection, that you would spend several months chasing otherwise. And they listen to you! That is the thing: they really want to talk to you, and many mentors are totally open, which is just a completely different experience from chasing them down and getting a meeting yourself.

But it’s also really hard not to lose your focus. If you are fresh startup and have not yet sharpened your vision, it can be challenging to choose from the feedback what’s important and what’s not. You can be tempted to try several directions at the same time, but it’s a mistake.

So you have to listen, analyze and use what makes sense for your startup. And that’s super hard, believe me! That’s where the StartupYard team helps you, they challenge you and go through the whole journey with you to explore the options and later, make it happen. So this is the main reason why someone should come here: you get a sharp vision, you get fantastic connections and exposure, and a super friendly team, which helps you all the time.

On the other hand, you will hardly have time for the product itself, at least during the first month and half, so be ready for that, get enough sleep before the program, as you will spend your nights on the product.

 

 

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