Craig Blair (AirTree Ventures) and John Botros (CFO, Paxata) Talk Machine Learning
How one company built and expanded into a unique category in the market.
Hosted in partnership with AirTree Ventures, John Botros took time out of his schedule while in Sydney, to take part in an informal fireside chat with Craig Blair and an audience of Australian entrepreneurs. Craig is a founder and managing partner of AirTree Ventures. Paxata (a US-based machine learning company) is an AirTree growth stage portfolio company. AirTree partnered with Paxata to support their expansion into Australia.
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What is Paxata
It’s the obvious question: What does Paxata offer? In a nutshell, they take data from different sources in your company and prepare it for you. Normally, when you want to analyze data, you need to pull it from various different sources: maybe some of the info is in your accounting software, while other info is in your CRM. You need to combine the two, and this is what Paxata does. Instead of spending all your time preparing data, you get to move straight to the interesting part while Paxata’s software handles the preparation.
Creating a category
Paxata was one of the first companies to start moving into this kind of space and doing this kind of work. Normally, it’s quite difficult to create a new category and move this kind of feature from being nice to have to be a category of its own. However, with the digitization of data, the service Paxata offers became a necessity.
Who are the customers?
All kinds of people. Rather than a freemium model, Paxata has focused on getting business units to use their platform. Typically, they then see other business units joining in.
And the customers aren’t just tech companies or any one kind of company. Everyone has a need for data analysis and easy ways to handle complex presentations of data. They even have the structure for customers like banks and governments.
How do you choose your investors?
“We wanted to make sure that every single person who participated had some sort of strategic value,” John explained. They looked for investors who fit logically with what Paxata was trying to do, including choosing investors who would help them break into the European and Australian markets. The hard part is “making sure everyone is on the same page”, especially when you have multiple investors.
Moving into a new market
The key, John says, is to move in slowly. Start by getting key customers lined up, supporting it from an already established office – in Paxata’s case, the Australian expansion is currently supported by an office in Singapore. Once you have a foothold, then you can start moving in the whole team.
When to raise money
There are two reasons to raise money, according to John. One is because you’ve run out of money. The other is that the market is good. It’s not always a good time to raise money: the political situation in America, for example, caused a lot of uncertainty in the markets.
Key takeaways:
· If you see a need, you can cater to it. Like Paxata, you could find yourself creating a category all of your own. This might take work and require careful partnerships, but it also makes you a pioneer.
· How do you choose who to work with? You have to get people on board who understand where your business is going and whose interests align with yours.
· Choose your moment. When you’re planning to move into a new market or raising a round of funds, you need to choose the right time strategically.
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