Can you start a business on a hunch?
That’s what Hazy did when they spun out of UCL, which led to their current offering of a synthetic data product for large institutions like banks. This allows those teams to create a representative doppelganger of their real customer data without the privacy or security concerns, which lets them find insights and innovate faster.
Now, how did that hunch work out and what changed in the world to make it work?
“Well, we started the business on a bit of a hunch, around data privacy. And to be honest, three years ago, I’m not sure we how well we would have been able to quite articulate what that hunch was. Then, about a year in, our projects in data privacy suddenly became headline news with Facebook and Cambridge Analytica. Following your nose is key but external context also plays a major role.”
As investors started to show interest, the other crucial realisation was the power you hold if you find yourselves a credible and investable business:
“If you’ve got a credible business showing promise, you’re a reasonably credible set of co founders and you’re starting to build a good team then actually those businesses are fairly few and far between. Interestingly, investors and VCs judge incoming on criteria very much like a sales process that we’ll go through.”
“You do have more power than perhaps you think in that sort of relationship. So back yourself and ultimately, don’t don’t undersell yourself because there aren’t actually a million companies out there doing exact same thing as you in the same way.”
Read on for the full interview, covering everything from product/market fit to finding your strength and qualifying sales.
Between Seed and Series A
We are still really a “seed stage business” — in the sense that we are still really honing in on product market fit.
We’ve got our first shoots of commercial traction, we’ve got to nurture those and start seeing a few more of those seeds germinating before it’s something repeatable and proven.
There’s a bit of context here that’s different for every type of technology.
In one case, you might be building a very IP-driven business — something like landing drones on Mars — where you know you’ll have to raise several increasingly large rounds of funding before you even really start commercialising it.
At the other end of the spectrum is maybe a very lightweight SaaS business solving a problem that everybody knows about in a slightly different way — in which case, you’d expect to have commercialisation even before you raise seed.
We’re somewhere in the middle of that. Our expectations from investors are: yes, you need to be generating and building this quite cool, advanced technology, but at the same time, starting to sign to see how that can be commercialised.
You’ve got to be wary of where you sit on that spectrum and educating your investors a little bit because if you are working on a particularly new piece of technology, you may have to be quite explicit that whilst you’re pushing for market fit, you’re also validating the different approaches and learning and tweaking your approach.
At the end of day, you need to be explicit: “we’re not fully expecting to really scale this for another year.” Being more prescriptive will help you find the right investors.
The balance of power with investors
As a first time founder, I think there’s a vital understanding of the balance of power.
If you’ve got a credible business showing promise, and you’re a reasonably credible set of co founders, and you’re starting to build a good team… then actually those businesses are fairly few and far between.
Interestingly, investors and VCs judge incoming on criteria very much like a sales process that we’ll go through.
You do have more power than perhaps you think in that relationship. So back yourself and ultimately, don’t undersell yourself because there aren’t actually a million companies out there doing the exact same thing as you in the same way.
Finding your strength
We started the business on a bit of a hunch, around data privacy. And to be honest, three years ago, I’m not sure how well we would have been able to quite articulate what that hunch was.
Then, about a year in, our projects in data privacy suddenly became headline news with Facebook and Cambridge Analytica.
So following your nose is key but external context also plays a major role.
And then I think it’s about finding the right partners early on — commercial or strategic investors that can help you “hack” your first set of customers and get customer insights to speed up your validation process.
Following your nose, being a bit lucky with timing, but then trying to amplify that luck with hustle around validation points as early as possible.
Product/ market fit
We’ve really focused on our product market fits and so we know there’s a clear problem we’re gonna solve, who it’s for and we are building the technology to meet it.
The challenge for us is now to work through these long enterprise sales processes, and navigate bumps in the road like coronavirus in a way that can prove our offering really does have legs and people are willing to pay for it.
All the indications are there, we’ve got a couple of customers properly on board and there’s plenty more in the pipeline, working through different stages of pilots.
So now it’s about trying to make the product easy to buy, try and get the pricing right as well.
In the last round of funding it was written into the term sheet that we would close to a set of contracts which we had on the table.
And for longer than we’d like, there was a lot of hustle put into making that a reality. One of our biggest lessons from that was actually knowing what is a real opportunity and what isn’t.
One of those deals took a huge amount of our energy and came to nothing. But in hindsight, we just didn’t have all the right pieces of the puzzle in place to make to make a proper sale.
So now we qualify every commercial opportunity very very closely to a strict set of criteria. And we won’t waste energy on something that we don’t we don’t think it’s going to close. That was a major lesson.
Accelerating sales (without experience)
We’re a very very technical team and the biggest learning curve was how to sell the product.
Getting as much advice from as many different people as you possibly can is the only way we’ve managed to get through it.
We brought on a non-exec veteran salesman who’s worked for Oracle, SAP, Microsoft doing big enterprise sales to our target customers, particularly in financial services.
Getting someone hands on in the business, who knows the process is a real guiding light. Of course, you then have to take that advice and go and apply it — and indeed tweak it to your own situation because there isn’t a cookie cutter way to sell any product, particularly if you’re doing something quite new.
But we absolutely wouldn’t have been able to get through that process without that person’s particular advice. And then nuggets of information from our investors, and other people more casually outside the business too.
Marketing and Comms
I think where marketing and PR has really come into its own is generally creating noise around the business for financing rounds and to support the mid and later stages of the funnel.
So whilst we haven’t really done any big focused SEO campaigns or anything to generate new leads, we have been putting the name out there and trying to amplify the word of hazy through a bit of social media stuff.
And then a little bit of targeted PR as well. Some of the publications that reach the types of people we’re targeting and show Hazy is a real thing. That it’s an established business with a presence that can help you.
It’s more about the legitimacy rather than a pure lead generation process.
Hiring has also been a super steep learning curve, going from never having hired anyone to about 25 people.
You don’t start a business to hire people and then fire them, because you don’t want to mess around with people’s lives particularly. You have maybe three or four hours with someone before you’re trying to make a decision and it’s quite a quick amount of time to try and make that call.
Particularly with a smaller business as well, new personalities can have quite a big presence and impact so you’ve got to be doubly careful. So if you do get it wrong, which you’re guaranteed to at least 10% of the time, act fast.
It’s better for the individual and the business and the whole team to make the tough decision, move people on and then start building from there.
Hire slow fire faster.
I would heavily recommend Steve Blank as an author — he’s got a couple of books out around how to find product market fit and a really no nonsense approach. He covers the stages you’re going to go through, how you’re going to go through the discovery process, what does and doesn’t show validation, and when you’re probably going to have to go back and redefine the problem. And that’s all before you’ve even written a line of code.
So I would highly recommend that — Steve Blank has been our guiding light on this.