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SaaS Interviews with CEOs, Startups, Founders

Deep Tech Founder Lands First Customer at $150,000 per year

12 May 2022

Transcription

Chapter 1: What is the main topic discussed in this episode?

0.031 - 4.245 Nathan Latka

What are these companies paying on average per month or per year to use your technology?

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5.369 - 10.767 Dr. Yuchun Zong

So now we have the first customer, it is like 130K for the annual contract.

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13.193 - 25.612 Nathan Latka

You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.

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26.112 - 38.05 Nathan Latka

We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool.

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Chapter 2: What is the significance of landing the first customer for a startup?

38.451 - 60.573 Nathan Latka

It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Dr. Yuchun Zong has been passionate about AI since the start of his PhD university in Edinburgh back in 2010. Since the first year of his PhD, he started to publish several papers on Boltzmann machines and approximate interference in one of the most influential AI conferences near IPS.

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60.973 - 68.04 Nathan Latka

His research contributes to the core of his current company, Boltzbit AI at boltzbit.com. Dr. Yuchun, you ready to take us to the top?

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69.016 - 69.997 Dr. Yuchun Zong

Yes.

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70.017 - 74.584 Nathan Latka

Okay. So BoldSpit's tagline is make AI accessible to everyone. What does that mean?

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76.086 - 90.065 Dr. Yuchun Zong

So it means to really give people who have the data the power of AI so people can just develop AI from their data without having knowledge of machine learning or deep learning. And who are these people?

90.125 - 91.547 Nathan Latka

I mean, who are you selling to?

92.185 - 110.134 Dr. Yuchun Zong

Selling to its business. Yes. Mainly it's business and particularly for a lot of companies who have a lot of customer data and product data and you want to make automated decisions like product recommendations and user search, answer a lot of decision questions.

110.875 - 116.404 Nathan Latka

And what are these companies paying on average per month or per year to use your technology?

117.143 - 141.354 Dr. Yuchun Zong

So now we have the first customer, it is like 150K for the annual contract, right? But our main business model, it is kind of like pay as you use. It's kind of cloud-based SaaS. The model is basically based on how much data you upload on our platform and you train the model and then you pay as the computational hours.

Chapter 3: How does Boltzbit AI make AI accessible to businesses?

251.497 - 254.36 Nathan Latka

And you said the run last year was for 1.6 million?

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255.161 - 255.842 Dr. Yuchun Zong

Yes.

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256.328 - 262.639 Nathan Latka

1.6 million. Okay. And how did you, was that a, did you come up with a valuation for that or was that a convertible note with no cap?

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263.861 - 271.254 Dr. Yuchun Zong

No, that is a VC investment. That is, yeah, it is not loan. Yes.

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271.835 - 278.607 Nathan Latka

Most people when they're raising their seed round are selling between, you know, 15 and 20% of their business. Is that what you did?

280.122 - 282.506 Dr. Yuchun Zong

Um, yeah, roughly. Yeah.

282.727 - 287.375 Nathan Latka

Okay. So that means you raised it like a 10 or $12 million valuation, something like that.

289.519 - 290.961 Dr. Yuchun Zong

Uh, yeah.

290.981 - 294.688 Nathan Latka

Okay. Was that fair? Do you think that was a good valuation or bad valuation?

Chapter 4: What pricing model does Boltzbit AI use for its services?

400.087 - 423.846 Nathan Latka

broke a $540 million valuation last year, and he spends zero time on technical onboarding for new hires. He relies on Electric IT support to onboard 10 to 20 new teammates per quarter. Now, Electric is best fit for US-based companies with between 15 and 500 employees. They reached out and said, Nathan, we love your audience. We love SaaS. Can we put Electric in front of them? And I said, yes.

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423.906 - 442.085 Nathan Latka

So check them out today. at nathanlatka.com forward slash electric. And as you guys know, in Latka style, I said, you gotta sweeten the deal. So they said, Nathan, for your folks, just for taking a meeting, they'll get a free pair of Beats Studio Buds. Now I looked up these buds on Amazon, it's $120 value.

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442.346 - 455.521 Nathan Latka

So to get those buds, again, just for taking a meeting, go visit nathanlatka.com forward slash electric today. That's nathanlatka.com forward slash electric. What is that use case, this first use case you're building?

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456.322 - 482.001 Dr. Yuchun Zong

Yeah, it is for search engine technology. So basically use Generate TBI to automatically pass different type of documents. Not only text image can be mixed and then combine those information together, allow user to interactive search. So you're not just giving an image, you can even highlight which part of the image that is using this most relevant. And this is something special we developed.

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481.981 - 491.489 Nathan Latka

Did you have to buy a very large data set to feed your initial sort of panel data set to grow your algorithms, your AI, et cetera? Where did you get the initial data set to train your models on?

493.07 - 504.48 Dr. Yuchun Zong

The initial data set, this is a good thing of generative AI because it can learn on the data itself. So we use a lot of public data set. And you know, a lot of generative AI trained on very public data sets.

504.9 - 506.742 Nathan Latka

Like what? Can you name a few of those data sets?

507.843 - 514.179 Dr. Yuchun Zong

Like one of these, like Cocoa and ImageNet. A lot of public data that you can find on GitHub.

515.181 - 520.208 Nathan Latka

Interesting. Very cool. Okay. So nine people hold time on the team today. Are you raising capital right now?

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