AI helps startups attract investment
One of the main signs of a startup’s potential success is the size of the market, its maturity, and development trends. The more precisely the project is aimed at the” pain “of customers, the better and faster it is able to” cure ” it, the more likely its rapid growth and, accordingly, the return of the funds invested in it. Market trends can be studied from a variety of open sources. The team Signum.ai I learned to do this with the help of machine learning algorithms, and I proved myself as a potentially successful startup and an attractive investment object.
Founder Signum.ai Artem Gladkikh has been engaged in entrepreneurial activity for more than 7 years. He started his career with the creation of a cleaning company in Lipetsk, and at the moment is a co-owner of a marketing agency neatbe.com and the founder of several Internet projects, created a platform for finding remote work talentboard.me. One of the projects that Gladkikh sold to a third-party investor recognized clothes in photos and searched for similar products on Aliexpress. While working on the project, he first got acquainted with neural networks and artificial intelligence. In 2014, Artem Gladkikh decided to create a product that uses the capabilities of AI to analyze the prospects and competitive potential of startups.
The difficulty is that, despite the existence of mathematical and economic models for evaluating business assets, most investment decisions are largely dictated by the entrepreneur’s intuition. The American company Brookings Institution, which evaluated the possibilities of replacing human labor with robots and algorithms, claims that this area has the lowest potential for robotics — 14% compared to more than 50% in agriculture and more than 30% in law.
The created Smooth platform, originally called test4startup.com according to him, it allows you to make quick marketing research based on the description of a startup and predict the success or failure of the project. “We used algorithms based on artificial intelligence, as well as predictive analytics, to calculate a certain coefficient based on external factors: market trends, forecast of changes in demand, the cost of goods offered, and much more,” he says.;
In 2018, the company participated in the Starta Accelerator acceleration program in New York. “During the acceleration, we talked to a lot of investors and were able to identify their specific needs and “pains”. We received a good feedback and tested our product on a new market. As a result of participation in the acceleration program, it was decided to slightly adjust the strategy of our product and move towards a platform that not only allows startups to conduct automated validation and market analysis, but also allows investors to find promising companies for investment at an early stage. After adjusting the strategy, we decided to take a different name — Signum. Now it is a whole information marketing system that allows you to quickly analyze the company’s business environment at the click of a mouse,” says Gladkikh.
The Signum solution currently allows you to conduct a general assessment of the business environment, analyze the company’s position on the hype cycle, give a forecast of changes in demand, analyze rising and falling trends, company risks and study the mood of users in the market. The user can get the initial version of the analysis directly on the site by simply entering the address of the company’s website.
The main business of Signum is the adaptation of the solution to the needs of customers. “For a fee, we customize the solution for the specific goals of the client,” explains Artem Gladkikh. “The price is always different and depends on the complexity of the refinement.” The first version — test4startup.com — we have used more than 11 thousand startups for our purposes. The new Signum platform has been tested on three large clients so far. One of them is the investment fund Starta Ventures, the creators of the project have not yet announced the rest.
“We do not describe startups in mathematical terms, we analyze their business environment: trends, demand for goods and services of this startup, we look at forecasts and reports on markets (for example, from Statista). Based on this data, you can build hypotheses and calculate the success rate. For example, if the trend is growing, the market is expected to grow and there is good demand, the project can definitely be successful-theoretically, since much depends on the team. But, as they say, the environment disposes, ” says Gladkikh.
The solution helped the Starta accelerator to speed up the selection of projects in the 7th batch. It was held in two stages. At the first stage, all applications with a description and links to projects were passed through Signum algorithms. For each project, an analysis of the external business environment was carried out: trends and risks were determined, as well as changes in demand for the company’s goods and services were predicted. Based on the results of the analysis, the AI selected about 50 projects with the best indicators. “After processing the mass of applications, the selection begins according to unformalized criteria, which is still carried out by a person. These are factors that affect the success of the project, such as the stability of the team, the readiness of the product to turn to the adjacent market, the ability to attract subsequent investments,” says Alexey Girin, general partner of Starta Ventures. At the second stage, the fund’s employees performed an analysis of fundamental things according to the classical venture model. Interviews were conducted with the teams, their products were tested. As a result, the experts of Starta Ventures selected 20 of the strongest teams that are already undergoing the acceleration program in New York.
Working on the project Signum.ai currently, six people work, including the founder: three developers (front-end, back-end and machine learning / AI specialist), a designer and a marketer. The entire team is remote. The volume of investments in the project amounted to about $ 180 thousand, including funds raised from Starta and personal funds of the founders. “We want to continue moving towards a platform that allows investors to find the right projects with the least time and effort, and startups to pass the fundraising stage faster and safer. We are also currently engaged in patenting our project evaluation method, ” says Artem Gladkikh.