Marketer Daniil Kravtsov - from scratch to a company worth $ 40 million

Daniil comes from the small Kazakh city of Temirtau. He is known in the Russian business community as a marketer who was able to raise $ 9 million for his startup Improvado in Silicon Valley. We talked with him to find out how he moved to the Valley, why he decided to start a startup in the direction of aggregating marketing data, and how he managed to raise investments.
Below we have attached a video with a full interview.



From Moscow to Silicon Valley

I was born in the Soviet Union. In the city of Temirtau near Karaganda. At 16, I moved to Tomsk, to Siberia. He lived there for 10 years and went to St. Petersburg for a couple of years.

In Tomsk, I studied as a programmer. He earned his first money in his first year by writing 4 diplomas for graduates. I had a good mathematical background: versed in graph theory, algorithms, etc.

Already in his second year, in 2002, he opened his first business - a betting company. In the city we had several bars, selling which I had some investment. With this money, I opened another company - Rizzoma, which was specifically designed for remote work. Until 27 years old, I did not go anywhere, I lived in Tomsk. And my dream was to travel and manage my company.

I was traveling for 4 years and realized that I wanted to live in San Francisco. Before moving, I lived in Moscow for another 2 years, where I owned RTB-Media. In the end, I sold it and left for the money in San Francisco.

Here I initially settled through the Airbnb startup house for the guys who later founded Soylent. Now they develop artificial food, and then they were YC companies and worked on the creation of next-generation Wi-Fi.

Once I met Rob Reinhart, the founder of a startup, on the street. Then he complained that he had no girlfriend, no money, and he had nothing to eat, so he mixed calcium with magnesium and drinks it. A week later, I saw that he had raised $ 1.5 million on Kickstarter in a day and a half.

It is interesting that the film “Soylent Green” is popular in the Valley. This is a dystopia that in the future everyone eats soylent. And at the end of the film you will find out that it is made of the bodies of dead people. It was a very risky marketing strategy, but as we can see, it worked.

Startup in Silicon Valley

In the Valley, I realized that I want to start a company. My previous experience was in advertising, so I decided that selling it would be quite simple, easy. After all, everyone needs advertising.

I started going to meetings and meeting with various startups, pitching my company to them, selling advertising. However, I knew English very poorly. And here’s what I did: I printed a beautifully made landing page with three prices - $ 500, $ 1000 and $ 1500. And he simply approached everyone with this page and showed it.

At the meetings, I could talk with 10-15 people. Then I got the idea how to talk with a lot of people. I began to go on stage and beep. Only I did this not for investors (for the first two years I was not looking for investments at all), but for other companies to buy me and my startup.

Then I started thinking about what I can do even better. Then my wife and I began to arrange events. More than 100 people registered for the first event and 60 came. It was a big shame, because instead of preparing for what to say, I spent time organizing the event itself. I blushed, I thought that I would forget everything. But, in general, somehow somehow told everything, and we found several clients.

Back in Uber, I met with the Uber product manager. He turned out to be a Russian from Stanford. He introduced me to VPO Sales of a large startup that helped me hire people for free because I didn’t know English at that time. These employees are still with me, now they have become my cofounders.

However, I was not just hired by employees. San Francisco is such a special city where people are willing to work for you for free. I did not think that this could happen. VPO hired people who worked for us 3-4 months for free, and then a year and a half received a salary twice lower than the market. Now, of course, they have a higher salary in the market. They get a big option and stocks. It turned out to be profitable for them, but then ... Now my company is valued at $ 40 million.

I repeat that San Francisco is a very good place to start a company, because there are so many people who are ready to work for free in a startup and carry risks.



What was the impetus for creating Improvado?

The idea of ​​my previous business, RTB-Media, was that through just one window, a marketer could manage various channels. I came to the Valley with a similar idea, I just thought of adapting it to the local market.

During conversations with investors, I realized that many still hate AdTech - Advertising Technology (i.e., advertising technology). There are several reasons for this. The first is a transactional business. You sold the advertisement - tomorrow it is gone. Secondly, there is a very small margin, because basically it all goes to the purchase of advertising. And thirdly, there is a large factor of corruption and bribes. Well, a lot of fails. Many people told us during the sale that they did not want to buy advertising, but they were ready to take the part of our product in which we analyzed the data.

In principle, this was a common idea - to remove the purchase of advertising and focus simply on data analytics. This has its advantages: a small outflow of customers, and this is still data analytics, not AdTech.

We applied for 500 Startups with the previous idea - with the purchase of advertising. And they refused us all the time. And as soon as we moved on to the new idea, we hit the accelerator on the first or second attempt. We stayed there for 2 months. And, in principle, I did not learn anything new from 500 Startups. They taught marketing and sales, and I, modestly speaking, understand this, because I already had three companies.

But they gave us some useful things. This is networking. I now have friends from all over the world. Each is the founder of the company at the stage at which we are now. We give advice to each other, provide some kind of psychological support. They just taught me how to raise money.

Prior to this, I believed that a good entrepreneur is engaged in business, not in finding money. Because I saw the bad founders of companies that only thought about attracting investment.

They told me that when you raise investments, you should focus on it 100%. You have to set aside 2-3 months, during which you do not do anything that does not concern the attraction of investments. Every day you spend at least 10 meetings, and when there are 100 of them, the quantity will turn into quality. My record is 22 meetings per day.



Technology for attracting investments

I had a special technology. First, you’re not dating anyone for a month. You just send letters in which you say that, for example, on September 15 you start a round. But you note: "Since you are a super cool investor, you can meet with me a week before the round." And you make an appointment with everyone for a month in advance. Thus, a month later, mine was completely full every day. There was not even an hour free.

When the round starts, the hardest part is getting the first check or term sheet - the first sentence. And there are several techniques.

One of them is to give the investor special conditions. What I did: said that I would raise capital every two weeks. We raised money on SAFE. This is something like a loan, a standard way to get money for a startup. What is good about this SAFE - you just downloaded it from Y Combinator, printed and pasted some key numbers. And you don’t need an investor.

Therefore, I told investors: "You can invest now at such a price, and in a week or two it will increase." And as soon as you receive the first check - everything else becomes much easier. After that, the round started after 3-4 days.

During these days I met 40 investors. And one of them gave me a check.

And here the amount was not important. Immediately after that, I wrote to everyone that now is only the first round, and I already have the first check. Then someone second gave a check, and again I wrote to everyone about it. Then the impression begins that your startup is getting hot.

A week after my round, I received a check for a whole month. Therefore, this is one of my favorite periods in my life. Every day I spent 20 meetings, but did not get tired. And so I raised $ 3 million.

Why Improvado?

My company solves a big marketing problem - data fragmentation. There are 7000 marketing platforms in the world, and the average marketer uses only at least 12.

We collect data from all marketing platforms and put them in one place so that the marketer can quickly and better analyze them. In our market there are so many companies that do something similar to what we do. This market is called ETL - exctract, transform, load. Our uniqueness lies in the fact that any marketer can work with data without engineers, technical skills and knowledge of SQL.