Datafox: innovating the hunt for big data

Bring two guys in finance together with two guys in computer science and you get the founders of Datafox, California-based pioneer in lead intelligence. Dutch co-founder Bastiaan Janmaat shares his insights on securing funding (Datafox recently received 5 million from Goldman Sachs), critical lessons learned and his peers in the Dutch startup eco-system.

Datafox

Datafox uses “algorithms and natural language processing to gather, organize, and derive insights on companies. The benefits of this service go across sectors, it could be used, for example, by sales people looking for customers, consultants wanting to learn about a sector, or people working in finance looking for companies to invest in. “Datafox relies heavily on artificial intelligence: there is too much information to collect manually, what’s more, it is impossible to track all the changes that have been made in those sources. So we use computers to automate this search; Datafox trains algorythms to find all the data and select the information that is important to you.”

Goldman Sachs 

It did not go unnoticed with investors that Datafox offers a disruptive product that’s on the forefront of artificial intelligence. So far the company has received three rounds of funding from a total of seventeen investors, the most recent and biggest funding coming from Goldman Sachs. “Five million dollars is a nice amount of money but the best thing is the incredible network they bring in. It’s more important who’s writing the check than the number they write.”

On securing funding: different approach in different stages

What are Bastiaan’s top lessons when it comes to securing funding? “In the early stage it’s all about communicating that your team is the best team to tackle what is a very large market opportunity. In the early days it’s not about the prototype you build or how many website visitors you have. You need to get across that you have the right technical people to build a great solution, as well as the network, knowhow and experience to bring that product to market. That’s what seed investors care about.” In a later stage finding funding gets matrix-driven. “How many clients have you secured and who are they, how accurately are they using your service, what kind of revenues are you generating? Do the matrices show progress towards the goal you set?”

Momentum in fundraising process

“Generate momentum in your fundraising process. Don’t schedule meetings one by one: that makes for a huge distraction and spending too long fundraising creates a sense of fatigue around your company. You need to go into it with preparation and focus on getting it done. To do this successfully you do it in two stages. The first stage is a fact-finding search. ‘Who are the investors that could be interested in my company, have they invested in companies in my space, are there people there to connect with?’ Set up coffee meetings and find the right fit. The second stage is to follow up on the people that you felt a potential match with and pitch your company. Schedule six meetings a day, run from one to the next, and tell your story with confidence.”

The secret to top customers

How does a new company like Datafox land big customers like GE, Samsung, and Silicon Valley Bank? I wonder if that was just luck, like Bastiaan initially explains it. “We are building a b2b product. Our first customers were former colleagues. You have to do something that you have experience in and a network to tap into. What’s most important though, as a startup, is having an incredibly tight feedback loop. You have to assume your first product is far from perfect. Have good systems in place to collect feedback from clients, and use that to reiterate. In the early days we spent many hours with our customers, going through their data manually. That’s how we kept our customer happy and built trust, and we learned what we needed to improve. Nowadays, we have an all-hands meeting every Monday, in which we collectively go through all the feedback we received from customers. We organize it in priorities so we know we are spending time on the most important issues for our customers.”

Critical lesson

When asked to share his most valuable lesson with fellow founders Bastiaan warns me that “It is a cliché but unequivocally true: it is critical to hire the best possible people. For example, at Datafox none of us had experience in sales. We interviewed about fifty people, it took forever to find the right person, but he has done a great job. To recruit a mismatch is extremely costly because it is not going to get the job done and will attract lower qualified people.” Bastiaan mentions how time-consuming it can be to recruit, yes think Datafox “..should have hired key positions earlier. We didn’t have a pattern for how quickly we needed to fill certain positions. If we had hired sooner we would now have been further along.” Another word of advice: hire an office manager. “Our office manager takes so much off my plate, providing me with valuable time to do high impact things.”

Proud of the Netherlands

Does a Dutchman working in Silicon Valley still feel connected to the Dutch startup ecosystem? The answer is yes: “I feel very connected. I have many friends in the Netherlands working in or founding startups. They are my peers, I can introduce them to investors here and they advise me on European conferences to attend to find new customers. I take pride in the Netherlands becoming a bigger and bigger player in the global startup scene. The Dutch are internationally oriented; they have an inclination to travel and everyone speaks English. Dutch talent can easily interact with talent from other countries. Also, the Dutch have a great sense of design, they care about aesthetics and how things work, that’s important when building a software product. The Netherlands should continue to create an environment in which it is respected and admired to start or to work for young companies. That’s one of the critical ingredients to becoming a startup hub: attract talent by sharing the success stories, make it desirable to work at a startup.”