By Eoin O'Hara
Last year at Web Summit in Dublin, the team at Videopath were all but overrun by the level of interest in their start-up - a tool which gives users the ability to create their own interactive videos. Keen to know what all the fuss was about, I met Videopath’s co-founder Anna Rose, and quickly discovered her extensive expertise on a whole range of start-up related topics.
Later we decided to have a more formal chat about things such as raising transatlantic investment, the virtues of angels, punching above your startup weight, and the growing importance of video in marketing.
Here are some of the thoughts she shared.
Hi Anna. First off can you give us a quick overview of how VideoPath came about? Where did the initial idea come from and how did you first go about bringing it to life?
The idea for Videopath was inspired by an earlier interactive video project I had produced called Diktatür Bewältigen for the magazine Zenithonline. It was a custom HTML5 interactive video website produced with a team of developers and designers. After completing this, I began getting requests to create similar projects for agencies and companies. And so the idea for Videopath - a tool where a user could create these projects themselves - was born.
My co-founder David Scharf and I built the first prototype at a Hackathon in Berlin. The feedback was very good and we had interest from filmmakers and companies right off the bat. So in Oct 11, 2013 we founded the company and began building the product we see today - Videopath.
VideoPath has had angel investment from both sides of the Atlantic to bring it into existence, can you give us some specifics of the support you have received?
I currently have three investors in Canada and three investors here in Berlin. All three Berlin investors also act as advisors and have been instrumental in introducing me to potential customers as well as additional investors.
What would you say are some of the most important things that a startup needs to ensure before seeking out substantial investment, and why do you feel that VideoPath managed to stand out against the competition in this regard?
My co-founder Dave and I were extremely committed to this idea from the start and we bootstrapped for over seven months before raising a dime.
We were very frugal at the beginning and only invested in what we needed. It may have kept us small, but I believe this also gave us the time to experiment before getting other stakeholders involved. We already had a handful of live projects and a paying customer - Springlane/UFA labs - when we raised our first €100K.
I think a start-up should be ready to prove itself before seeking investment.
I think a start-up should be ready to prove itself before seeking investment. Too often I see founders exaggerate and make overly big claims with no back-up, only to let the investors down when they can’t deliver.
Before seeking investment, you need a rough idea of the kind of product you have and the market you want to reach. But you must also accept that there is a steep learning curve. We made a decision early on to go for B2B, but it was very difficult at that time to envision what this tech would become and how it would actually be used by customers.
Now, I can say that we have found a strong product market fit. We have some top brands - such as Hyundai, Swisscom, Babble, Body Shop, Coop - as customers. We also have been used by National Geographics, SFR and Macktrucks - which helped us learn even more about potential use cases. These big names helped to validate us as a truly valuable b2B player in the video space. Now we can’t keep up with orders and inbound sales requests.
This is a great position to be in when seeking investment.
What are the differences and similarities between raising angel investment in the two locations?
The expectations are different. Both in terms of the expected growth of the company and projected revenue and the kind of documentation they are looking for. For example, what a European investor may find reasonable growth predictions, a North American investor will find way too low and unambitious. If you show the European investor the big bad hockey stick, the one that resonates in the US, they may find it fanciful!
One other apparent difference is the level of detail - specifically in financial plans - that a European investor expects, even at a very early stage. I have seen that the North American counterpart tends to be less interested in going through tons of spreadsheets, whereas this is mandatory for the European investor.
Why did you guys opt for angel investment over some of the other finance options such as crowdfunding or VCs, and what, besides cash, do you feel that the investors have been able to bring to the table?
We opted for angel investment because it gave us the freedom to develop this product organically and without a third institutional party adding pressure to grow in a specific direction. This freedom also allowed us to try (and fail) a few things before finding the right product/market fit.
I also think angels tend to act more as your fans and supporters. They want to show their friends what you have been up to. We also have strategic investors who have helped us with intros to customers and investors.
Finally, we are constantly hearing that online video content is poised to become the single most important element in global content marketing. From you ‘insider’ perspective, how can the average startup be prepared for and make the most of this mini-revolution?
Start now!! Video is a super important means of communication and, like all communication, it takes practice to get good at it.
I recommend companies start in-house without spending money. Use an iPhone and start filming events, team, interviews. Like blogging and social media the startups with a tone and voice resonate better with their customers.
Once you have practiced a bit, invest in new gear. Buy Adobe Premier, a good DSLR and a mic. Sound is always the most under appreciated aspect of video but one of the most important. We use a Rode iPhone mic and it does wonders for our sound.
Find out more about videopath.com