Attracting technical co-founders early on, raising from a corporate VC and how technical founders influence the fundraising - by Ahmad Abdulkader.

This is Fundraising Radio and today as a guest speaker we have Ahmad Abdulkader, the co-founder and CTO of Voicea here that raised about $20 million and was recently acquired by Cisco. In this episode we will mainly focus on the presence of technical people in the fundraising efforts of the company. And also we'll touch on to building a good technical team and finding a technical cofounder early on.

And of course at the end we'll wrap it up with a positive note of how Voicee was acquired by Cisco.
So Ahmad, let’s kick off by you giving us some background on yourself and on Voicea.
Of course.
well first, thanks for having me, Constantine is, since we read things very much, and giving me this opportunity. So yeah, my name is .

I, I'm, I'm, I characterize myself, I'd say myself as a technologist.

I'm a machine learning guy.

I've been doing this for some time.

so, my career started at Microsoft after I studied in Canada.

moved to the U S in 1990s, late 19 seven to work with Microsoft handwriting recognition group.

handwriting and speech were looked at as, so the new frontier and user interfaces, Microsoft made big investments in handwriting.

we, I like to believe that we sold the, online hundred rides and recognition meaning that, if you're actually the stylist and this technology to this day is the one that powers the Microsoft surface.

to Microsoft that also works on other machine learning problems like speech recognition, of computer vision as well as online advertising, which was one of the coolest, machine learning problems that you can work on.

It intersects economics and computer science.

I also worked at Google for awhile, worked on, the great, projects of, books, books search and you're scanning all the books in the world potentially and providing them as a repository for web search.

it was really great experience with built OCR engines for, many languages.

I also was part of the initial team for a street view that build the computer vision components for street view.

That led later on, helped a lot with the effort of creating a Google maps.

I also worked at Facebook, for, between 2014, 2017, on various problems, specifically, many of which are texts, understanding, technologists and some of which has been, open source like, deep text.

and, later in 2017, I started a company with, two other cofounders David Wiener to build, voice assistance for the enterprise.

see, just started late in 2016, if not before that. it was a great experience.

I was the CTO of the company, and the company, as you mentioned, got acquired leader by Cisco around August, 2019.

It was a great journey, which I think we'll touch upon.
now we'll see a, as I said, of course, we had a certain vision that got, evoke, evolved during our journey.

our initial vision was that, voices is one of the, maybe perhaps the only modality that has not been digitized or properly digital workspace.

we wanted to disrupt that, but we felt that the AI can add a lot of value in my view has always been that enterprise.

There's a lot of, cleaner data and enterprise.

There's more discipline if you will, there.

if there's any chance that it can catch up, it will be the enterprise.

the kind of value that we can add potentially is much higher than enterprise.

At the same time, voice interfaces were catching up.

Alexa was getting very popular in the consumer space.

of course, we realized very early on that, enterprise is very different to the requirements in the, kind of accuracy required is very different to the consumer as we know.

The many of use, Google home Alexa, the kind of accuracy and expectation and even the user scenarios are very different.

We use it to order music, recipes and all of that. kind of our expectations are very different.

as you can imagine using voices since the enterprise will be very different, how does it feel to talk to the machine in front of your boss? it's like you can be really embarrassing.

it's not a very natural, can be looked at as, rude during the meeting to talk to a machine and ignored that in these.

it just, it's a very different dynamic as we realized and we paid a lot of attention to what our customers want.

it's very interesting.

We we started with the premises that, Hey, you don't need transcription, who needs transcription? we will, we'll find the important, moments in the meeting and share them with you.

for that we will put our best efforts using automatic speech recognition. if you wanted to, we will do human transcription.

as long as we're clever and finding these moments, it's, the cost will be talking manageable because the amount of like five minutes or something like that.

boy were, we, were very wrong. people want a transcript.
Yeah.

It's amazing.

People kept asking us for prescriptions like, okay, fine, we'll give you a transcription, but we will convince you that you, this is not what you want and Nope.

People still want the chest.

This is the first thing that they would ask you.

this one of the big lessons we learned is that, okay, listen to your customers and be ready to, yeah.

Even if you're going to evolve to this a vision that you have.

Well start from, our customers and maybe perhaps through your features, through your, accuracy, perhaps drive them to the the world that you want.

I think were, we did a very reasonable job listening to them.

partners and many of the folks that we hired, early on where, it gives them credit for actually, taking us in this direction.

This was pivotal in us, social succeeding. yeah.

yeah, there are lots of, a lot more details about SIA, but perhaps we can, drive once we are to your questions if you'd like.

Yeah, yeah, absolutely.

The story of I see is really interesting.

here I actually want to start not actually with the star of voice here.

I'm curious, how did the other confounders managed to bring here on board? Google, Microsoft, pre, yeah.

All right.

so let me repeat my question.

I want to hear, to start with actuate and discussing how you got into VCA, hounding.

Yeah.

Founders managed to bring you in because you worked at Facebook, Google, Microsoft, and those guys are paying huge amounts of mind to their developers.

how do they manage to, what incentive that they provide to you that you decide to leave that great salary and go to a startup?

Yes, that's a great question.
yeah, there's of a story behind that.
I've known one of the founders, the, the Alma taco who is the first founder, if you will. I'm the second, and David Wiener is the third founder.

I've known Omar for a long time, almost started a, has been in the online advertising space for a long time.

he started a company that, you may have heard of called BlueKai, in around 2000, 2006, w one of the really early pioneers and the, kind of cookie marketplace and, trying to convert, cookie exchange into a marketplace and do it on mass and do kind of predictions about, relationships between different categories of people.

it was quite successful.

it was a total of time and then was eventually acquired by Oracle, forgot the exact date, but probably around 2014, something like that, with a very good, it was a very good exit for them.

he actually offered me to join, or asked me to join them early on at BlueKai.

I've known him personally for a long time, been friends for a long time.

I didn't quite feel that he needed a an AI or machine learning person at that time.

He could get more of a infrastructure.

we kind of have, almost joined together, but said, ah, maybe that's not the opportunity.

Let's let's look for another one.

by 2016, were both like, he had, paid his, using the article, delivered technology, started the whole data cloud.

as you mentioned, I've been in a number of big companies and I felt as like, I've learned a lot there.

I think I was, very happy.

I've sold really set of cool problems, kind of known in the industry.

a good name perhaps, I should try and start thinking I've always wanted to, but I've always been attracted to a particular problem or the other.

Perhaps it's time to do that and I couldn't find a better partner than him. He's very experienced.
He's a person I trust and, very SI, very few CEOs impressed me.
He was one of them.

later on when we, you know, asked.
Yeah that's great.
What's your recommended, sorry, please repeat.
What's my recommendation for,
I was asking for your recommendation on earlier stage founders. we don't have such an impressive background as your CEO did.

how should they found find, this technical co-founders? Where should I think there are, I guess it's the general question.

I would apply the same tactics for also early in the engineers, there are a set, so, technical ability, is the number one attribute that you shouldn't be looking for.

the, your track record of solving hard problems, open big problems, that's something that you need to, there are a set of people who really want to be in a startup and just thrive in a, in a startup environment.

they are the kind of people who would and see the, the, of course it's high risk, but the potential of it, a startup succeeding in many different ways.

As startup can succeed in many different ways and just thriving in a startup environment.
these are the kinds of people you really want to, look.
As you point out, the compensation packages for big companies, especially in the Bay area are just amazing. It's very hard to compete.
Even those startups these days, they, they pay reasonably well.
it's not, gone are the days where the offer really small center is the offer.
Reasonable Saturday cannot be a match for big companies.
I remember Google really throwing, literally throwing money at people.
It's very hard to compete with that.
give a balance, strike a balance between, , okay, we'll give a reasonable salary.

You'll you'll not be, you'll not be a, begging for money or you'll be living, well, I cannot match Google by any stretch of imagination, but you have to like the startup life and I would balance, I'll give you a reasonable compensation.

honestly, this is one of the things that it's money well spent, early on it, and you should factor it in, in the, in the early days when you're, raising money that you need to give people reasonable salaries to be able to have some peace of mind.

They are taking risk and the other kind of people who want to and thrive in a startup environment, but you re giving them reasonable salaries that will let them get by reasonably enough so that this is something that, I would highly recommend.

of course you have that the company causes who are willing to, just, manage to usually single. You don't have families and all of that, then they're willing to go through with, by all means. but, expects that you have to plan for that properly when you're, when you're raising money.
I would, I would think this is a, a very important ticket item that you should account for.

But look for people.
you're not going to attract people by composition. That's not going to happen.

You're going to really attract them by number one, the idea itself, the really have to, eat or be bought into the idea itself and the vision.

That's very important.

The other thing is, the like the startup environment has many, many, really cool aspects to it that, it has its drawbacks too, but it has many aspects that some people find themselves shining in such an environment.

The third thing is the team.

Many of the people who actually joined wanted to work with me, or some of the folks who on the business side and product side wanted to work with David and Alma.

So this is a very important thing.
it having been having worked with, other companies.

one of the things that I'm proud of is that I really, had very good relationship shifts with the team that they worked with to the extent that they really wanted to.

Whenever I went, wherever I went, they wanted to, it's like, Hey, what are you doing? you have openings, I'd like to come and work again with you.

building these relationships, kind of pays off.
They try and yeah, so the team that you create and it, and so it's a virtuous circle.
you bring one engineer, he'll also bring, he was probably my engineering manager somewhere.

They'll bring folks in that happened with us repeatedly, the early engineers we brought and bringing really smart and very, people with great work ethic, so really focused on the quality and Matina very high bar actually at the beginning.

don't know people who are not interested in a startup, you have to just pass on it.

Cause it's tough and hard and you have to get people like-minded who are willing to stick it in and reward them, give them a, as I said, invest in their compensation early on.

If you can't, of course within limits and know that you cannot compete, but tell them, Hey, I'll make sure that your kid or I, but, you have to understand that being there and enjoying this experience is part of the, it's part of the deal.

you're better off attracting people who are, who think like that. Absolutely.

you're, you nicely led the conversation to the fund raising profile because to compensate, especially for you as developers, they're extremely expensive.

you need to fundraise too, for, at least a couple of people on your team full time. let's talk about fundraising efforts of .

Were you a part of it as a CTO or do you sit there and code 24, seven not even seeing investors? How does this work?

Yeah, no, I think, of course, the business leaders are the ones that lead the, so the initial contacts and but the early fundraisers, the presence of a technical, representative is essential.

Very very important.

Cause this is when you're, you get to ask the critical questions like, what do what you bring to the table, what's, what's your unfair advantage, if you will? So, and part of it has to be technical.

Also the very early fundraising, a big component in it is the team, the founding team.
the really want to see, who's that? who's the, who's the technical leader of the, of the founding team.

what makes them believe that this guy can deliver, or solve this hard problem and deliver, solutions that haven't been delivered before.

need to be able to speak to your background, which is very important.

What heart problems did you solve? and, what do what's in your past that shows that you can actually solve this hard problem and it's, you're way better off speaking to it.

You know, yourself.

You're also going to find, because the people you're trying to raise funds from the have technical advisors, and you need to be able to respond to that in a convincing way.

the early fundraisers definitely, at least the CTO was not one of the early engineers as well, have to be there afterwards.

you, what we did is that, we've called the guidance because it became, it's time consuming and takes time and, sometimes it's just not necessary.

it's really about, who's leading the investment or it's really about business, more business basic questions where your presence is not needed.

so early on it was very important.

Also the early investors are key and important in the sense that they kind of, it's also again, one of these virtual circles.

many investors put money.

It goes, that other investors did certain investors that, so getting the big names at the beginning may be very useful in the presence of a technical leader is key.

to, to test for the quality of the team and who they are and to answer technical questions that show what kind of advantage, that you have and solving the problem as a team.

through rate that you've mentioned that there was a big difference between the early fundraising and later stage fundraising work at the early stage.

Basically you need to bring all funding team because really investors care a lot about the team. So it's all about the team various,
it's really about the team.
Uh.

I wanted to follow up with you on this, a short story that you told me on our pre-interview conversation where you said that you actually used to pitch you pitched, wants to Cisco yourself without your CEO being there and it wasn't fun.

Can you tell, all of us this story? Yeah.

So.

that's exactly.

what's happened is we had the set, we had this, appointment to secure an appointment with Cisco on the premises to go and deliver, make it, make a pitch.

And and we're had great context.

I happen to also, I've worked with one of the gentlemen in the business development tool.

We don't give a word, for me there, it was great.

I was given the task of preparing the technical, presentation and part of the presentation, which I worked very hard on the weekend, put as many, icons and moving cartoons and everything.

let's number one, don't let your engineers make presentations without being reviewed by the, by the product people.

the, the business leaders later on, we engineers, we think differently. anyways, I was there, it was not one of my best days.
For some reason I was late.
I lost my way to the building.

Cisco has a very complicated campus map.

of course my GPS did not respond well.

It was late.

They were looking for me and I'm usually not, I'm usually very early and very punctual, so they were really alarmed.

I went there and I, I don't know.

I was off.

I didn't even give a good presentation.

it was not, the best presentations to the extent that Homer and David later called me on our way back and saying, Hey, they'll definitely not invest, but let's learn something that's not something from this day.

what did we do wrong? And I was like, I felt really bad.
fortunately they did invest and, the ended up acquiring us then, so the rest is history.
the invested in the seed round, invested in the, serious around.
And we had very good relationship.
They were one of the early companies that we did integrations with as a conference provider.

and and yeah, they acquired us. So it's very interesting.

I'm not by no means I'm not encouraging people to be, relaxed, but, the lessons there is, yeah, I mean, make sure you're, you get everyone to, you have a coherent presentation.

it's much more important than, than having lots of material there.
coherent the, something that delivers, a coherent story that is tied together so they don't do what I did. but also try it on.
It turns out that what really played well in our is that we knew exactly, what they were looking for.

despite all this mess and, we, what they were looking for was there, and, they were looking really for someone to the realize the need to acquire a speech recognition technology and they were looking for, and they had, they didn't have a good experience with some of their initial, partnerships.

they were looking for one that we're kind of lucky, at the time.

I think media until now, there are few providers, some of them are really big that are, that make it prohibited for the likes of Cisco to integrate with like Google to be really weird if Cisco since their data to Google or something like that or, it's privative they're looking for a smaller company.

yeah, and we, that despite all this mess, we, that was present in our presentation and, we, we, were, we looked good, so, no, exactly.

Actually you're going to be presenting to many people, some of them are corporate investors, some of them are VCs.

for the corporate investors, at least they'd be looking for something.
For example, we found out that Microsoft is looking for someone who builds on their platforms, right.
someone and it's technology that they will acquire later.
No they want to build a company that would enrich their environments and use their technology. it's a very different way of thinking.
I said Cisco is looking for a particular technology, so try as much as you can, do your homework.

and, and perhaps to have conversations with the the business development people that they've arranged the, the meetings to know exactly what are the key points, that they are looking for and startup that is very, very important, especially with corporate, corporate corporate investors.

Yeah. Right.

that's very interesting thing that you touched on, which is corporate investing in, we're running out of time, so I'll be afraid to go over this quake, but how do you manage to get Sisco invest in you on the seed round?

it was, one of the early VCs had, had contacts with them and honestly, they were looking around, they were, they were looking for people with this vision that helped too.

we had recommendation, I just happened to have this, the point of actually the people that you work with in the past and your good relationship with them that will pay off.

having a good network of people, who can give a good word about you and like, yeah, I know this person that worked with him is he's the real deal.

actually I'm okay.
you know, okay.
A little, I'll.
I had known Satya Nadella when he was running big. he's the one who promoted me to partner.

I've known him.

the folks were presenting to Microsoft, I was not around.

He saw my name, he said, yeah, this guy is, I've worked with him before and that was cool.

That just, one of the factors that I want to lose it.

That's my, early on the M 12, folks invested in us.

these relationships, ha, having a good reputation, the community through your past work and your good relationships with the people who end up being decision-makers and these corporations.

there's a big role in the big scheme of things, right? That's really important here.

As we're nearly ran out of time, we'll just go quickly towards what do founders OIC or founders of startups do once their company gets acquired.

do you personally invest in startups as an NGO investor? I do.
I'm very selective.

I do, and I also try to, advice as much as I can, especially for the folks who are, who do stuff in the AI space, the, or are building a really new cool technologies that are, promised to provide a very innovative solution, particular area like motion detection and stuff like that.

very, you know, earnest stuff.

I'm, I, I'm personally, I'm geared towards startups that are more technology based on, building a novel technology of trying to solve an existing problem in a very novel way.

and, I focus more on advising them and sometimes I, I actually, invest, but I, I invest many hours actually in advising them early on officially and unofficially.

That's really interesting.

you mentioned officially and unofficially, so officially you actually get compensated for your advisor work, right? So with stock options or privileged.

yeah, mainly through stock.
Very rarely.
Yes.
I in fact, almost all of it through actually. Yeah.

Shares really share it. And what's the normal.

of compensation that you get? So can you give me like a range of what you get for your advisory work at those thirds?

You mean the pens? there's not a, it really depends on who they are and but usually it's actually not. and actually what's, what stage you're in.
If you're very early still in the conversations, it ends up being significant.
it's usually, I mean it's the single digit.

It's not, it's not a, it's not even, definitely like two or 3%. Something like that.
I think nothing big.
Right.

I think huge.
Say someone significant to me that's so long.

My listeners are early stage and sometimes I get the cockpit that question by like, what's normal conversation for an advisor that I should offer and I usually respond to, it should be within 1% of UK to all of your advisors, which means is that he should advise your mind yet, I know 0.3% does that.

that something normal or is it, am I entre valuing environments?

My opinion, Lindell, honor, valuing, especially if it's a very early stage, especially if it's going to be really critical.

some of the advisors, I mean, one of the value, not for all of them, but some of which having their name on your advisory board is very important.

plays a big role to know that blah, blah.
if that's the case too, I think you need maybe to introduce higher.

but it's subject to negotiation, as well.

And many, I don't know.

I've seen, not just me, but other people, um,

advisors do that because they, they just want, they want these people to succeed or you believe in the idea and they like so much rather than, yeah.

The actual amount of the compensation.
So we know them.
The they will be pretty lenient too.
I would say it's a little higher than what you advice, but not, not by much, not by much. Okay.

Please know with clothes, I try my best, I failed just but in general I was about right. I'll definitely include that in my further advices that I give to founders.
But we'll wrap it up here.
Thanks a lot.

Of course.

For your advice, for your expertise in this field and for telling you how to be, to how to find those co-founders at first because it's really tough for me founders to do, to find co-founders.

I think this episode is really important in terms of finding a cofounder and also I liked the point that you mentioned about the, fundraising through, corporate investors because very few actual consider that I hope to bring in as a corporate investor wants me on my podcast because I've never done before.

it's really interesting to hear those stories. I think so.
thanks a lot and stay safe there.
Thank you.