On of the primary drivers of the big data revolution is to understand your customers better and act accordingly. While most data gives you a picture of who your customers are, it often lacks the ability to capture the whole picture. Thankfully, Sense360 was created to address this problem. Using sensor technology built in to smartphones, you can access data on what customers are doing as well as the context of their interactions. Thanks to higher level data collection, your marketing campaigns will be supercharged as you no longer need to worry about garbage in-garbage out.
LA TechWatch spoke with 3-time founder Eli Portnoy about the company and about their most recent round of funding.
Who were your investors and how much did you raise?
Tell us about your product or service.
We help restaurant and retail chains make better decisions through real-time and actionable data about their customers, competitors and market.
What inspired you to start the company?
I am a bit of a startup junkie and Sense360 is the third startup I have founded. I love the idea that thanks to technology and a robust tech eco-system, opportunity exists for anyone with a powerful idea and clear vision to start a company and change the way things are done. So I can’t say there was a specific moment of inspiration, but rather starting companies is part of my DNA and a true passion.
In terms of what inspired me to start Sense360, my fascination with data and how it can be used by businesses – in this case the restaurant and retail industries – was really the foundation of this company and product. Having worked with many brands while launching my previous company (Thinknear), I came to realize that there was a tremendous need to better understand the consumer journey, and that that existing market research data and methodologies weren’t delivering with the speed, accuracy, or granularity required by companies today.
What market you are targeting and how big is it?
We are in the market research industry which is estimated to be worth somewhere between $16 and $12 billion a year.
What’s your business model?
We work directly with great restaurant and retail chains that buy subscription access to our dashboards and insights.
How do you manage privacy concerns associated with your offering?
Protecting privacy is a foundational part of Sense360.
We only work with apps that have a legitimate reason to collect location data and all participating apps must get user consent to acquire and share the location data. We do not collect personally identifiable information. In fact, we intentionally obscure sensitive data like wifi access points so that even we cannot access that information, ensuring added privacy. We never share individual data with any third party, and all of our reporting and insights are provided at an aggregated level.
What was the funding process like?
I was (and continue to be) religious about sending updates to our seed investors and being transparent about what was working and what was not. This helps to create trust and a positive working relationship, which in turn made fundraising for our Series A a lot easier.
The biggest lesson learned from my previous startup experiences is to only work with investors you know well and over a long period of time.
What are the biggest challenges that you faced while raising capital?
Market research is not a sexy industry and most VCs don’t know much about it. So there was an educational process that we needed to go through in terms of understanding who the major players are, how things are done, where the disruption opportunity is, and how big the market can get.
What factors about your business led your investors to write the check?
I think the technology we’ve built, the machine learning challenges we have solved, the customer traction, and the opportunity emerging – these are key to Sense360’s value offering and to our differentiation in the market.
What are the milestones you plan to achieve in the next six months?
We have a pretty robust product backlog that we’re excited to build as well as some exciting customer growth plans.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
The best way to raise money is to focus on building a great business. That said, raising money (even with a great business) doesn’t happen quickly. It takes years to develop the relationships and you should consider that a key part of the job duties of a CEO.
The best way I have found is to start by providing quick, clear, and transparent updates on your business. Show them the progress you are making, give them a sense of what its like to work with you, and help them understand why your business will be worth funding (even if not today, at some point in the future). If they are open to it, I recommend connecting for quick check-ins every 3-6 months, where you aren’t pitching them, but updating them.
What is your favorite LA bar, when you need to kick back and relax?
I have a wife and three kids, so I try to spend all of my non-work time with them. Being with them is the best way I know of kicking-back and decompressing after the ups and downs of startup life.