An Italian living in Singapore goes to California…sounds like the start of a joke, but I promise it’s not! I visited Silicon Valley to learn about the startup ecosystem and meet potential partners for the Storya project.
Storya has, like many startups fundraising in H2 2022, struggled to find a lead investor for its seed round. As a result, I recently found myself taking a hard look at the receptiveness of investors in Asia toward a creator economy/AI/diversity-focused project like Storya.
I came to the conclusion that sometimes we may need to test our ideas with an entirely different audience to see where the problem really lies.
Tech and hype
- AI: I can confirm generative AI is the flavour of the month. That being said, I have also been told things move pretty fast here in terms of trends, so the hype may not last. Probably for the best, as we saw how things turned out with Web3.
- Web3: Talking about Web3, that has been a difficult narrative to weave into my pitches. At Storya, we always took a “web2.5” view of where we were headed strategically, but it looks like in the short term, it is just too complex to ask investors in the US or Asia to connect the dots across seemingly disconnected fields like generative AI, blockchain, and even metaverse. Lesson for founders: we gotta keep it tight and focused. There is always time to pivot, test and expand later on.
Fundraising
- Pitching: US investors are very direct with their feedback and make pitches much more conversational, which is awesome for founders that want to test and iterate. This is something that I feel is missing in my experience pitching to investors across Asia. There seems to be a lot more focus on presenting “formally” through slide decks and keeping a tight lid on any feedback from the listeners.
- Pitching: US investors are very direct with their feedback and make pitches much more conversational, which is awesome for founders that want to test and iterate. This is something that I feel is missing in my experience pitching to investors across Asia. There seems to be a lot more focus on presenting “formally” through slide decks and keeping a tight lid on any feedback from the listeners.
Also Read: Founders Academy: Empowering women entrepreneurs to bridge the gender gap
- Revenue goals: toward the end of last year, facing like many a shutting down of funding, we reduced our round size. Coming here, I now realise that was a mistake: not because bigger is better, but because with smaller tickets come smaller milestones (at least if we want to keep projections somewhat logical!). The investor conversations I have had so far have been clear: raise more but deliver even more, and fast if possible. “Cockroach mode” is a helpful internal strategy to survive, but it should not be a mindset used in fundraising.
- VCs: It is often said that finding the right VC is like getting married. One investor was even more specific, telling me you need at least three dates before getting married! Translation for founders: it’s never too early to start building that relationship, and it will take time to get to the altar…send that email!
- Funding rounds: A very successful founder I met shared that every single round is a hustle game. The ease of raising a first round is not indicative of future success at all, or vice versa. Companies here can raise tens of millions in early rounds and still need to go through hundred-plus investors to find a lead for their next round. It may sound depressing, but it isn’t! It just means founders need to stay in the pocket, focus on the now, and iterate that narrative to find the match that works.
The ecosystem challenge
I will not open Pandora’s Vase of which ecosystem is better, but there is no denying the massive power of Silicon Valley’s network effects, entrepreneurial culture, and history. Taxi drivers here talk about VCs and startups as they would about the weather elsewhere.
Silicon Valley has taken a hit from COVID-19 and recent tech layoffs, but that has somehow added to the dynamism of what is happening, perhaps a wake-up call for a very powerful ecosystem that had perhaps gotten a bit complacent. But the opportunities and networks to be built are world-class now as much as ever.
Infrastructure in SF leaves a lot to be desired compared to Singapore/Hong Kong. I frequently found myself in areas without proper internet coverage, and public transportation is lacking and slow (although the San Francisco trams are gorgeous!). A sustainable ecosystem for a new generation of entrepreneurs, especially in a wealthy part of the world like California, should not let this continue to be the case.
More lessons on running a startup for founders
- Metrics, metrics, metrics. Silicon Valley investors are direct and brutal in their feedback, and how well your “product” connects with the “business” part of your startup story is crucial. To that end, be ready to dive deep.
- Storytelling: Founders, be ready for your story to evolve rapidly. Storya will be pivoting soon, building on the incredible wealth of experience we have accumulated in the past year and building an incredible team, vision, product, and community. But also thanks to the engaging and tough conversations of the last 10 days in the US. It makes me so grateful to have come here to learn, connect, and evolve.
- Pivoting feels scary, but a recession is upon us (making fundraising tougher than ever), the creator economy, publishing, and generative AI spaces are evolving very rapidly, and founders need to embrace change, as challenging as it might be.
- I have found on this trip that there can be a route where the initial vision remains and the values are not compromised, but you can learn that the right direction may not be the starting point. For us, it will mean a pivot from a pure B2C play towards a more edutech and B2G-focused approach. More to come on that!
Also Read: Founder’s 3 year journey: Ground up to Tiger Global-backed multimillion-dollar startup
Some broader “life lessons” for founders
On failure
I have had too much fear around the failure of ideas and business models. Perhaps a remnant of my corporate career, or perhaps just an individual trait, where we are willing to put ourselves on the line with a startup, but we are not being efficient enough in acknowledging when it’s time to pivot.
The case study: For us, this issue has taken the monstrous shape of a revenue model (subscriptions for our awesome Storya app readers) that has struggled to take off since we launched it in late November 2022.
The reason was staring at us in the face since day 1: our value proposition is misaligned. As the first AI-backed, end-to-end publishing platform in the world, it is truly authors that get the most value out of Storya, but we were trying to generate revenue from the readers.
The mission to support more diverse and under-represented authors with the best publishing platform in the world does not necessarily mean we cannot ask them to contribute to making our business sustainable.
Embrace failure and the changes that come with that.
On listening
Six months of fundraising will do a (nasty) number on a founders’ focus. I had reached a point before my San Francisco trip where one pitch call blended into the next, and I struggled to extract worthy insights from those conversations. The answer was simple: I had to change the audience.
As founders, we need to be aware of the hub for whatever it is we are trying to build and go there. Physically or virtually. Connect with people you believe are most relevant to you, don’t be afraid, and just pitch. Pitch, pitch, pitch.
There is an audience out there that will speak your “language” and that will start providing feedback that truly makes a difference. This is not about the shortest route to investment. This is about the fastest route to learning. It is worth 100x on any cheque in the long run.
On writing
I am still finding mine. I have worked on Storya for 15 months with a fully remote team, largely relying on Zoom and Slack tools. It has been great, but it is also limiting. Meeting people in person does add a layer of humanity to the process, but it is not always possible. So I am embracing writing for the amazing tool it has always been. A way to organise thought, share a story and connect with people.
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