Updated: 3 days ago
This article was originally published in Blockchain Industry Review - a Crypto Curry Club Magazine published monthly and available in soft copy and the printed version.
An Interview with Featured Contributor, Aly Madhavji
Managing Partner of venture builder, Blockchain Bulders Fund
Aly’s criteria for investing in start-ups is a strong team, good product, and where possible, existing revenues.
Investments tend to between $50,000 and $200,000. Currently there are 30 plus companies in his Scalex start-up programme, where investment is only an initial part of the support.
“We are extremely hands-on with our companies. Firstly, we look at their strategy and secondly their product market fit. We use our data science team to help early stage sales. Finally, we help the companies become investment ready." “To our mind there is no point putting 10 CEOs into a room to talk about filling sales funnels when they might all come from different industries. How can you compare music tech to agri tech for example? It is not the same thing at all.”
Instead Aly prefers to be hyper targeted, figuring out the sweet spot for each company, and using automation to scale the companies. At the same time, the team is evaluating which investor will work for each start-up at a strategic level.
“Each start-up has to figure out and learn from their customers. Even if you have been an expert in your industry for 25 years you still won’t know every nuance of why customers buy your product and what would really add more value to them”.
So, this is where customer discussions are really important, creating feedback loops and surveys so in turn we can figure out how to target specific customers that are more likely to purchase their product or use their solution.
“In this regard, our data science team is really beneficial. They are experts at hyper targeting leads for essentially anything; they examine leads, funnels and processes which in turn generate results.”
Aly is insistent that all the companies in the programme are armed with goals and milestones.
“These are critical, but they can be short term, say six months, and we make them achievable and quantifiable.”
In such an example, a company might have 5k in monthly recurring revenue, and the CEO is tasked with getting that figure to 20k. The CEO would determine in what time frame the new revenues would be achieved, again perhaps over a two-month period. All goals are agreed with the CEO with advice given on how to achieve the goals. For example, if a single customer’s sales are generating $5000, then three new customers of similar value are needed. If the sales team can close 10% of all leads and 20% of prospects become leads, then a target number of 150 prospects is required. Then it’s a numbers game, split test, analyse, optimize, repeat. This scientific approach is led by the data science team, thereby creating meaningful and again achievable goals. The data science team is also on hand to advise on the best ways to target such prospects, whether across social media, email, advertising or other avenues. The team is very skilled at customising leads, bringing together a lot of the information that necessary to do this very effectively. Right now BFF is purely emerging tech, with some 60% of projects in the blockchain space. While Aly has blockchain as his core focus, he believes combining this technology with other powerful new tech is the killer approach as it has the potential to be impactful across industries for unique pain points.
“We’ll always offer advice regardless and sometimes we ask them to join our programme– we really want to build the ecosystem.”
“Blockchain is powerful, but combine it with AI, ML andbig data and all of a sudden it explodes exponentially.”
Finding the start-ups is a mixture of both inbound and outbound contacts. As BFF has a global presence, many companies approach him.
Much of their work involves speaking and judging at conferences, hackathons, competitions and as a result they meet a lot of very bright start-ups.
Gender balance is also an issue for BFF. There are fewer female founders in emerging tech and especially in blockchain.
“The returns from female founders are very strong – so it’s about merit not just optics.”
Aly is slow to name his most exciting projects as he points out they have projects in health tech, fitness tech, music tech, media tech and entertainment tech. Upon some
pressuring, he does name Splinterlands as his number one blockchain game, Baanx, a neo bank in Europe, Jauntin which recently launched Underwing as the lowest cost health services product in the U.S., and Beatdapp in music & entertainment; the latter company was just ranked in the top 20 music tech companies by Crunchbase.
With regard to duds, while it happens, Aly maintains the due diligence performed by BFF mostly minimises risk. There are 90 different areas that each start-up needs to
address before they can convince BFF to let them join the team.
A coachable CEO makes a huge difference to possible outcomes.
Any startups wishing to contact Aly should reach out on Twitter or Linkedin. On the website (www.blockchainff.com) there are simple forms for entrepreneurs looking for investment or to join the venture programme, these questions help the team fast-track the decision making process. And you should expect a response within a couple weeks, the site states.
“We do actually review 100% of all forms and respond to everyone.”