Raghu Kopalle, CEO of innoBright Technologies, spent two-weeks at MuckerLab in Los Angeles as part of the Global Accelerator Network’s (GAN) exchange program to gain new insight into his startup. He went for the express purpose of developing contacts within Hollywood’s film and media industry. He also had the opportunity to have a one-on-one meeting with the founders of MuckerLab, William Hsu and Eric Rannala. Both William and Eric encouraged Raghu to become a SaaS (Software as a Service) platform and to maximize his development calories on a business model that would return revenue in the short-term. Their suggestion was to get to customer adoption, validate the value proposition and market opportunity as soon as possible.
MuckerLab’s other suggestion was for Raghu to focus on VFX commercials produced at large advertising agencies, where rendering projects occur quickly and very short sales cycles are the norm. This model would allow innoBright to generate revenue immediately. Instead of focusing on movie studios, where animation projects take 3 to 4 years to develop, innoBright could work with advertising agencies producing animated commercials in 3 to 4 weeks. Based on this valuable feedback, innoBright’s new target customers are advertising agencies producing VFX animation commercials in the auto, consumer-electronics games and professional sports industries. Along that new target, Raghu had the opportunity to pitch innoBright to Saatchi & Saatchi, one of the largest advertising agencies in the world. They are very interested in participating innoBright’s first beta cycle test.
Raghu described the vicious cycle many startups face when dealing with large companies, like film studios, as potential clients. A large film studio usually contracts with management consulting firms such as McKinsey and Company, Bain or BCG for their strategic investment needs, which means a founder like Raghu has to convince these management consulting firms that a product has validity before anyone inside the studio will even look at it. But to find the right person inside the consulting firm, Raghu has to find a helpful contact in the target studio and then must in turn prove his product’s value to the consulting firm before getting to the ultimate decision maker within the film studio. For this reason, Raghu has decided to shy away from bigger companies in the short-term to focus on smaller customers. He’s finding that they’re willing to give him valuable feedback about his product and actually help him shape how the product is being developed, while he is working on the bigger companies in the back burner.
Raghu pitched to groups within MuckerLab and received some valuable feedback, specifically challenging the validation of his market size and the need to nail down his beta cycle to allow for an objective measure of innoBright. Specifically, an objective measure of the product would mean anyone could test the beta product to see the results for themselves. Raghu learned that a company’s internal tests and product validation is just the beginning, but you really have to back it up with numbers from real-life product testing. For instance, a user might say that they want to use your software in a certain way but in reality they use it in a very different way within a different context. During the beta cycle startups should want to see and validate the actual usage of many users.