By Mary McCaffrey, Managing Director of Golden SeedsMay 2, 2019
Youyi Kitson takes learning seriously. She tested the waters of IoT carefully to identify the opportunities. She evolved her company messaging over time in order to communicate and connect with investors, while tweaking a sales process to expedite customer decision-making. And when questions needed to be asked, she didn’t hesitate, knowing the answers would help advance her efforts.
Golden Seeds’ Mary McCaffrey discussed with Youyi how she was able to bring a unique solution to the IoT marketplace that enterprises needed.
YK: We were founded in 2015 and started as a hardware-only company in the Internet of Things (IoT) space. We wanted to experiment by making and selling developer kits first. This enabled us to gain insight into where the demand was in IoT — what people were attempting to build and deploy.
It was a learning process, and as we worked with engineers, we were able to understand the issues. This also allowed us to build a very specific solution over time. We decided we’d create a software platform that would leverage our portfolio and deliver fully integrated enterprise IoT solutions.
YK: We specialize in a newer wireless technology called low power wide area (LPWA) which facilitates end-to-end IoT solution connectivity. It’s been around for only three or four years and answers a need that Wi-Fi, Bluetooth or cellular technology doesn’t. It has unique, cost-effective capabilities for use in IoT applications like utility meters, monitoring commercial property, tracking assets over a wide area and more.
With our solution, customers can collect real-time data from enterprise assets, systems and people, allowing immediate and precise business decision-making. We do this through an end-to-end, device-to-cloud platform that provides connectivity and data management. Basically, we do the hard work so an organization can focus on developing and managing value-added applications.
What wasn’t being addressed by competitors was the time-to-market, simplicity and scale. Our software platform consists of three parts; device, gateway management software & data normalization. Our fully integrated & secure approach enables enterprises to directly access the machine data via our rich set of APIs. Competitors typically work in only one of those areas; they’re either a software company that offers a platform service or a hardware manufacturer. Under their approach, enterprises have to purchase and integrate these separate elements.
That’s costly and takes a long time to deploy; the ROI to get the data they want is low. It’s also more work and time-consuming to scale.
Our approach provides an out-of-the box experience for enterprise customers. They tell us what data they want and how they want it, we provide a solution that’s ready to go and grow as they need. It can be integrated within weeks instead of months and less expensively. As a result, we have about 35 active customers deploying or trialing solutions, along with a tremendous sales pipeline.
YK: Fundraising was a challenge and part of that had to do with messaging. This is complex technology. We needed to more clearly show what we do — powerfully illustrate the great value we offer — so investors from a range of industries could understand. We were able to refine our messaging so people without any deep technical background could easily comprehend and realize the potential.
Another challenge was to condense the enterprise software sales cycle, which we found was too long. We’ve evolved our selling process to move deals forward faster. The features that we build, and our offerings, are designed for quick evaluation and validation. This has enabled customers to make decisions and deploy faster.
YK: We recently launched our edge computing solution. That has been well received by customers especially in the industrial automation vertical. Already, it’s caught the attention of large Fortune 500 customers; our top three ongoing deployments all are using the solution. For example, we’ve been working with a large, multi-national industrial company and are about to enter the second stage of a trial to monitor their assets in the field. We’re the first in our market segment offering this type of solution, so we’re very excited about the possibilities.
While we still have some capacity left in our current open round, we have built a solid pipeline with institutional investors due to our recent pivot into edge computing for Industrial IoT. We believe we are on target to raise series A in Q3/Q4.
YK: Raising money is an ongoing process and you need to learn from the experience. If we pitch to an investor and they decline, I like to ask them to share their reasoning. This helps you improve your messaging and areas of your company where there might be a weakness. Sometimes I talk to early stage founders and they’re discouraged by the process. But there are lessons to be learned from every rejection.
Particularly for seed stage companies, you have to use funds carefully and act quickly. It’s not like a big corporation where if something isn’t quite on target, you have the financial resources and time to work around problems. You have to make decisions promptly to keep the company on track.
When it comes to hiring, it’s important a candidate has that “startup spirit.” Ask what their thoughts are on working for a startup? If you see someone who has always worked for large companies, it could be a culture shock — you want to make sure new hires will fit into your team.
YJ: Mary McCaffrey, Cheryl Kallem and many other GS investors from both NYC & the Dallas Chapter have been tremendous mentors to me. This is the first time as a founder that I’ve had to raise outside funding. It’s been a learning experience and they’ve helped me work very effectively with other groups.
Many Golden Seeds members have strong backgrounds and knowledge in financial areas. This is important to early stage startups because it’s easy to get wrapped up in perfecting product offerings — but you must have financial control and planning is vital. Also, Golden Seeds has been instrumental with networking; they’ve made invaluable introductions to both investors and customers.