Bootstrap an AI Startup First, Raise Money Later: Sean Minter, Founder CEO of AmplifAI (Part 7)

Sramana Mitra: So where are you now in terms of numbers? You don’t have to share anything that you don’t feel comfortable.

Sean Minter: We’re in the $10-$15 million ARR range today. Our goal is to get to the top end of that by the end of the year. We’ll continue to grow and do not need to raise any money. We’re fairly conservative with our cash, so we have plenty of money still available from our 2021 raise. We have lines of credit, so we’ll continue growing and we’ll see if we want to go raise money. We’ll do it based on what we think is a good time for us to go do it.

Sramana Mitra: Well, I think now that you have a lot of large customers, your revenue should be able to finance a lot of the growth, right?

Sean Minter: Yes, it always comes down to how much you want to invest in go-to-market. We could become profitable today if we wanted to. The future growth would get impacted because we wouldn’t be able to spend as much.

Sramana Mitra: A question that I think is at the heart of a lot of these CPC kind of scenarios is that, have you determined what you spend that money in? You have the capacity today to raise money.

Your metrics are such that raising a decent series C should not be a problem, but what customer acquisition hypothesis is going to give you real velocity?

Sean Minter: Yes. That’s why we’re not really in a rush to go raise money because we want to figure out how we scale better before we go raise money. Because once you raise money, you have pressure to spend it.

Sramana Mitra: Exactly.

Sean Minter: And if you don’t know how to spend it, then you’re going to blow it and then you won’t hit the metrics you want to hit. You don’t have to be one hundred percent there. We at least have to have a good idea how to do certain things.

Sramana Mitra: You have to validate some of those customer acquisition strategies and understand the unit economics of those customer acquisition strategies and be able to say, “Okay, it’s working at a small scale. If I put in a $100, I get, let’s say a $1,000 or $10,000 or whatever. So now if I put in a million dollars, I would be able to get $10 million.”

Sean Minter: You can upsell existing clients. There can be multiple other products that are built that can be upsold. Because you have an existing base you can upsell to. You have new customers you want to get and expand. So as you get larger and you have an existing base, you got to work that part as well that you can grow revenue with, which is, “Hey, I can add on these capabilities and features and now upsell them.”

So a lot of those types of things also come into play as we think about it. A lot of our upside will come by not just selling what we currently do, which we’ll continue doing, but also getting into new verticals that we may not be in now and upselling those. If you have happy clients, they’re happy to work with you and to do additional things.

Sramana Mitra: If you have client relationships, upselling is one of the lower hanging fruits. It’s much more expensive to acquire new customers than to upsell into existing customers.

Sean Minter: Absolutely. You always have to get new ones in because eventually you’ll run out of upsell. But so you always have to have the land. That’s always the thought in every business. Any business is only as good as how do you generate leads? How can you close them and how can you grow them? I mean, those are kind of the basics.

Obviously, to grow them, you have to keep them happy. So all these other variables come into play. You got to have a product. You got to have the support. You got to have relationships and all those kinds of things. But ultimately, those are the basics. How do I get people interested? How do I close them and how do I grow them?

Sramana Mitra: Yes, and at the heart of that question is a poorly understood discipline called positioning.

Sean Minter: 100%. Positioning is always constantly on the move.

Sramana Mitra: But it’s not effective to have your positioning constantly on the move because positioning drives messaging. And if you really want inbound leads and all of that stuff, you have to get to a positioning that is going to harness that energy and interest.

Sean Minter: So at our size, we’re getting to where our position needs to be harder. When you’re small, right, you have to be a little more flexible. Positioning changes based on every new customer and what you learn from them. You can’t be so fixed on positioning. You’re missing a change in position to get you access to a whole bunch of other things. When you’re small, there’s more flexibility. As you’re bigger, you want to get more fixed.

Sramana Mitra: It depends, if you have the luxury of going from zero to $1 million in four to five years, you can shift things around and experiment. If you’re on a venture timescale, you have to execute on a repeatable basis and get to $1 million in a year. You don’t have the luxury of five years to get to $1 million.

Sean Minter: That’s true. Getting to that million is hard. That’s where a lot of people fail, but they remove the flexibility of what they can do to get there.

Sramana Mitra: If you can bootstrap the early stage, you are in a stronger position, no question.

But, you know, today there are probably a quarter million companies in the world that have got some amount of financing, whether it’s incubator financing, accelerator financing, micro VC, pre-seed round, micro VC, seed round, or a series A, but there’s a very large number of funded companies out there. A vast majority of them are struggling with velocity,

Sean Minter: Yeah. Well, to be honest, it’s hard to get velocity. You have to experiment to understand.

Sramana Mitra: And experimenting on VC money or investor money is very, very expensive and mostly it doesn’t work.

Sean Minter: It’s like a conundrum, right? If you don’t have the money to bootstrap it yourself, what do you do? You kind of take the best shot you got.

Sramana Mitra: Yeah. All right. Well, very good. Congratulations. You’re executing very well. So I’m sure this is going to be a very interesting company. Glad to know about it. And we look forward to covering it.

This segment is part 7 in the series : Bootstrap an AI Startup First, Raise Money Later: Sean Minter, Founder CEO of AmplifAI
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