Startup Life: Tough Pivots and AI Rabbit Holes
Hello Friends,
First of all, please forgive my terrible Easter pun! :)
It has been quite an eventful first quarter of 2023, full of big learnings as a startup founder at Storya. In brief:
- I made my first trip to Silicon Valley in February
- I traveled to Kochi, India, to finally meet my co-founder and CTO Praveen, as well as launch important client discussions, in March
- I pivoted the business from B2C to B2B
- Storya nearly shut down
- I spent nearly every waking hour not devoted to this pivot (and the search for revenue therein) studying Artificial Intelligence from a creative, intellectual, technical, and ethical perspective.
I have written about the first and second adventures previously, so I won’t spend time on them here.
The third item is very important, as is the fourth, and I will cover both below.
The fifth, while probably more popular with the algorithmic gods than my founder journey ramblings, will be a separate post, so stay tuned for that, it will be a fun one. More entertaining than this one, for sure!
One important premise: after hundreds if not thousands of conversations with potential investors, partners, customers, experts, etc., we know there is massive promise in Storya’s field of interest, namely the intersection of diversity-focused storytelling and technology, generative AI in particular. The creator economy, art, literature, and many other areas are changing insanely fast, but I think we were ready for it. We launched our AI-backed publishing platform over a year ago when generative AI as a term was certainly not mainstream (despite the underlying tech having been around for about 50 years).
That said, we had a business to build on top of that vision, which takes capital.
Long story short: Storya had a near-death experience this quarter. It’s a tricky thing to put out there, and I thought long about whether this is a post I should write. But I know there are founders, creators, and other professionals in my network that follow my journey and have been kind in supporting my attempt at “building in public”. I think it’s important to share all the lessons, especially the difficult ones.
Let it count as my small contribution to ending the era of fake and self-congratulatory/humble-bragging social media content.
How We Got Here
Running out of money was a Damocles’ sword hanging over me since the day I decided to launch Storya, as it is for all early-stage founders. The opportunities created by no-code tools mean the entry barriers are almost non-existent, and indeed that is how Storya got started, but that does not mean you can (typically) launch a real business out of sheer willpower.
I had made clear agreements at home on the kind of investment we would be comfortable making in launching my startup. After close to a year of gut-wrenching fundraising conversations, Storya came close to extinction in early 2023. The fundraising process honestly left me hurting more than in just a financial sense. Pitching investors, especially VCs, has been the one part of my startup journey that brought me closer to quitting than any other hardship I faced. I am so grateful to my fellow founders, Lweendo Hamukoma (she/her) and Praveen Kumar S, and the rest of my team for being there and supportive through these tough months.
Facing shutdown, we tried to course-correct in different ways, including by pushing all core team members to take the lead on pitching and outreach. Then:
- We moved to sweat equity compensation every team member that could afford it.
- Our first angel investor committed in Q4 2022 and gave us a breather, BUT
- Our second angel investor, after confirming his commitment twice, ghosted us on phone calls and emails for a month before finally pulling out with a vaguely worded email. Ouch.
- We had multiple advanced-stage due diligence conversations with investors, VCs, and accelerators that fell apart between Q4 22 and Q1 23 as the fundraising landscape largely dried out. It’s winter out there, folks, even in Singapore…
Go-To-Market Challenges
Meanwhile, our Storya App, which had a successful launch in 2022, started monetizing from its users only for us to come to terms with the simple fact that our value proposition was misaligned. On the one hand, we are, despite being an early-stage, largely bootstrapped product, the best and most cutting-edge publishing platform in the world and a straight-up revolutionary app for fiction writers from emerging markets.
On the other, we had decided early on that we would not charge our authors for the app’s features and tools, instead choosing to try and monetize from the readers they would find through us. So we started monetizing Storya by using reader subscriptions (a la Medium) as primary revenue.
Problem: without the ability to either engineer a “viral moment” (on which most successful B2C apps depend) or having the budget to invest consistently in customer acquisition, our organic growth numbers stayed too slow. And slow user growth means very limited subscriber numbers, which means far too small of a revenue base on which to run let alone grow the business.
Another TL;DR: B2C startups are hard, even in the best fundraising markets, and we are now pretty much at the polar opposite of that.
We are studying new directions for our B2C app. But, from many conversations with advisors and investors, especially in Silicon Valley, we realized another route to testing our value proposition was to explore the B2B route. Hence our pivot.
We Keep Building
I am happy to report that, despite the bank balance challenges, Storya is NOT dead. Instead, we are so energized by the conversations we are having with potential clients in the traditional publishing, agency, and moviemaking world that I would dare say our prospects as a business have never been brighter.
This quarter is about strengthening our core team, with some amazing new additions I will announce in due time, diving deep into conversations with potential clients about the massive transformation ahead from the growing capabilities of AI tools being built. We have active conversations with clients across the region who are seeing the writing on the wall when it comes to generative AI capabilities, often coupled with a broader digitization drive, and are ready to take action. More on that later.
For now, I’ll close this long piece with a bit of a bombshell from my recent deep-dives, interviews with industry experts, and research. Artificial General Intelligence (AGI) is coming sooner than expected, although definitions are complex, and many experts will resist the term. And, even without AGI being fully here yet, large language models powering apps like ChatGPT are already changing the world, from business to science to politics and beyond. I know many of us are already feeling fatigued by the topic, but it is just the beginning, for better or worse.
Making the power of these tools available to humanity at large will require, even more than great technological advancement, great storytelling. That is where we plan to continue doing our work.
I know we are in for a wild, wild ride.
For now, Peace.
