- Artificial intelligence startup Node raised $6 million in fresh funding from Mark Cuban, Canaan Partners, and others, and launched a new product amid the coronavirus crisis.
- CEO Falon Fatemi advises other cash-strapped startups to think of ways to really lean on their investors.
- Cuban, for example, is on hand to help Node refine its marketing so it can come out of the crisis stronger, while Jitendra Kavathekar of H3VC is working to expand its relationships with the resellers of Node's products.
- Node's predictive analytics tools are meant to help customers "have the resources of Google or Amazon, without having them," Fatemi said.
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Falon Fatemi, the CEO of artificial intelligence startup Node, says the company completed its fundraising efforts just in time: "We were one of the lucky ones."
Node wrapped up its fundraising in mid-March, right around when the stock market had its largest single-day crash since 1987 and the San Francisco Bay Area issued its shelter-in-place order, a policy that would soon be mirrored around the US.
"I've heard nightmare stories from other startups," Fatemi said, noting how the coronavirus crisis has smashed their plans to fundraise later this year as VCs tighten their pursestrings.
Her five-year-old startup locked-in an additional $6 million in fresh funding despite the steadily darkening economic horizon — with participation both from existing investors, like Mark Cuban and Canaan Partners, and new ones, like Galaxy Ventures — closing a round it started in summer 2019 and bringing its total funding to $40 million.
Node guides non-experts through building predictive models even if they have limited or disorganized data, and the startup plans to use part of the new funding to grow its sales and marketing team — which is currently only three people, out of its 35 total employees. The current downturn means that it will also be "battening down the hatches" and "operating as efficiently as possible" as Fatemi leans on one principle that she recommends to other venture-backed companies, too:
"Founders should be putting their investors to work right now," she said.
Putting investors to work
For example, one of Node's investors, Jitendra Kavathekar of H3VC, has stepped up to build up its channel partnerships — that is, its relationships with other companies to resell its products into larger customers — allowing Node to fast-track that part of its business.
"Most founders think through what's the strategic value of an investor that they're bringing on board for the business — short term or long term — and now is the time to capitalize on that and cash those checks, so to speak," Fatemi said. "When you have limited resources, or you're trying to be judicious with them, it's the time to say, 'Okay, here's what I need from you' to investors. And you get them involved in working with your team."
Node investor Mark Cuban said he's bringing messaging expertise as well as general support and steadiness to the table, gleaned from his own experience having had his "back against the wall" in the past.
"You just have to stay focused and go— when it's FUBAR, that's when the hero companies are born," he said, using an acronym for "f***ed up beyond recognition."
He says that Node, which refers to itself as "Twilio for AI" in a nod to the cloud platform that makes it super-simple for customers to create better communication in their apps, will be even more critical post-recession.
"Coming out of this, the incumbents are going to get stronger, and the smaller companies are going to need all the tools they can get," he said. AI analytics, made simple, will help them compete.
A new product launch
Along with Tuesday's funding announcement, Node released a new iteration of its product that makes it even easier for developers to use it to make predictions, even without data science expertise or robust company data.
The platform has a handful of pre-set outcomes it guides companies through, like customer retention and expansion and talent acquisition, though it can also help developers create custom initiatives to make predictions about whatever scenario they want.
"We want customers to be able to innovate like they have the resources of Google or Amazon, without having them," Fatemi said.
For the companies that might not have any budget right now for new services, Node is offering trials of its product. The expectation is that once the recession ends and budgets free up, it will have justified its value and will be able to convert the testers to paying customers.
"We're actually using our own engine to understand where we should focus," she said, explaining that Node will use its own revenue acquisition tools. "We want to work with the companies that are having the biggest challenges right now, because we think that we can really help them."
One particularly fertile area for business: Call centers.
"Contact centers are on fire right now as everyone tries to figure out how their contact center can work remotely at the same time that their phones are off the hook," Fatemi said. "Node can help contact center technology be more efficient in — for example — understanding which clients should be routed to which agents to drive a business outcome, like high satisfaction."