Fundraising, Sales, & Product Development

Part
01
of eight
Part
01

Series A Fundraising Best Practices, Part 1

The careful selection of investors, pitch preparation and practice, and the careful scheduling of funding round are three best practices that founders and startups in the United States should follow when raising Series A money. Details as to how these best practices should be carried out are provided below.

Careful Selection of Investors

  • A number of experts highlight the importance of this practice.
  • Y Combinator, a California-based startup accelerator, is running a Series A program to share its learnings about Series A funding rounds. In 2018 alone, it was able to help Y Combinator companies raise a total of more than $945 million across 95 Series A funding rounds, a 71% increase in amount raised and a 50% increase in the number of funding rounds relative to 2017. This accomplishment makes Y Combinator a reliable source for Series A fundraising best practices.
  • According to Aaron Harris, a partner at Y Combinator, the best investors or partners are the ones capable of making quick, high-conviction decisions. They do not hold off to know what other investors are thinking or doing.
  • They quickly respond to questions and follow up from meetings. They have a clear idea of the things they like and do not like.
  • Harris advises founders to start with a pool of 15-20 investors and work their way through this pool before the actual round until they find the right investors. They should not share too much information, however, that these investors can already make a decision before fundraising even starts. The timeline for fundraising should be clearly communicated to these chosen investors.
  • Dave Bailey, a serial founder and angel investor who writes for California-based publishing network Medium, says it is wise for founders to start with their seed investors first. Founders should ask their seed investors if they will invest and how much they will invest. An unwillingness among seed investors to participate in Series A could be a bad sign.
  • Bailey also highlights the importance of starting with investors who have a history of leading funding rounds. Some investors prefer to lead rounds, while some investors tend to just follow lead investors. Followers typically use a ‘wait and see’ approach, so they tend to participate only when there is already a lead investor.
  • Tim Eades, chief executive officer of California-based startup vArmour, has already successfully raised Series A money. For his startup's Series A fundraising, he worked to narrow down his list of potential investors to his top five targets.
  • Ross Schibler, who have founded three Slicon Valley startups and have extensive Series A fundraising experience, says that when selecting investors, startups should focus on the question "Do I want to work with this partner and will they help me build a great company?"

Pitch Preparation and Practice

  • Three individuals with extensive Series A fundraising experience highlight the importance of preparation when it comes to pitching.
  • Practice makes perfect. Harris of Y Combinator highlights the value of pitch practice for founders seeking Series A funding.
  • The pitch deck should be mobile-friendly because, according to Bailey, investors check email messages on their mobile phone 95% of the time. It should be as clear, concise, and compelling as possible."
  • It is crucial for a founder to thoroughly know the investor he or she is speaking with. He or she should learn beforehand the investor’s recent investments, network, job history, and personal interests. It will be easier for a founder to establish a human connection if he or she has this knowledge.
  • Use of storytelling techniques is advised as they have the ability to transform a pitch from a mere recitation of facts to an effective and compelling presentation.
  • The pitch should demonstrate traction and include a clear description of the problem being addressed, the vision, the business metrics being used, the bottom-up market size, the reasons for fundraising, and the efforts being made to reduce risks.
  • According to Pete Flint, managing partner at California-based early-stage venture firm NFX, investors expect a month-on-month growth rate of at least 10% and at least six months of consistent monthly growth.
  • A one-sentence description of the company, similar to Uber’s “Tap a button, get a ride,” should be prepared. This one-sentence description will make it easier for investors to remember and talk about the company.

Careful Scheduling of Funding Round

  • Three individuals, who are all knowledgeable in the area of Series A fundraising, point to the importance of timing fundraising wisely.
  • Dave Bailey says that founders seeking Series A funding should time fundraising in a way that they are able to leverage spikes in revenue or usage and that they do not run out of money during the funding round.
  • Founders with fewer than six months’ worth of money should either control costs or boost revenues. Raising Series A money could be quite a lengthy process, and running out of money in the middle of such a process could turn off investors.
  • For startups with seasonal spikes in revenue or usage, it is important to time fundraising in a way that takes advantage of the momentum or upward trend in sales or usage. Bailey advises that founders play to their seasonality.
  • Investors are attracted to startups that are capable of exceeding expectations. A startup that projects a 15% growth rate the following month and returns with a 20% growth rate is more attractive than a startup that just meets expectations.
  • Bailey does not recommend raising funds during the Christmas holidays and the summer because investors flying to their holiday homes could make fundraising slower than necessary.
  • Harris of Y Combinator advises founders to create a dynamic where “investors are forced to operate in parallel.” Each batch of pitches should, as much as possible, take place within a tight timeframe, say, a period of one to two weeks.
  • Founders can tilt the environment or market to their advantage by setting the same starting point for a big set of investors. Doing so would prevent information from spreading too quickly through the investor network, prompt investors to decide and act without looking at other investors, and build a competitive dynamic among investors.
  • Eades of vArmour advises founders seeking Series A funding to set a timeline of approximately five to six months.
Part
02
of eight
Part
02

Series A Fundraising Best Practices, Part 2

Knowing your numbers, especially company valuation and finding venture capital (VC) firms providing funding covering the area of operation of the business, are two additional best practices for raising Series A funding. Research findings indicate that startups need to match their business operations with the correct investor focusing on that business area.

Know Your Numbers

Find the Right VC

Research Strategy

In finding the two additional best practices for raising Series A funding, your research team explored expert reports with information and insights into startups funding. The reports include those published by Inc, Visible VC, and Embroker. These reports featured comprehensive examples of best practices founders need to follow during Series A funding. Importantly, the reports also contained extra tips focusing on startup business valuation and funding, which are highlighted above.
Part
03
of eight
Part
03

B2B Hardware Sales Best Practices, Part 1

Best practices for B2B hardware sales include actively listening and gathering feedback, assembling testimonials and case studies, and showing how the hardware can add value to the business.

Assemble Testimonials and Case Studies

Show Product Differentiation and Value

  • Return on investment (ROI) is a key performance indicator for any business. Thus, there is a need to quantify what difference the hardware will make to the customer’s bottom line, how the hardware can improve their revenue, or how the hardware adds value to their efforts.
  • There are two main ways to add value as a B2B hardware seller: reduce the company's production costs, or improve the viability of their product.
  • Including "value adds" and bundled services also increases the perceived value of a hardware product. Support help desks, installation, maintenance are all strong bundled services that can increase sales.
  • Forbes reports that including options is the best practice when it comes to bundling. Total hardware sales increased by 100,000 units when bundles were offered. However, when customers were only offered bundles, sales fell.

Get Feedback

  • Active listening is key.
  • Ask what the businesses' problems are, then explain how the hardware can solve those specific problems.
  • Know the customer's pain points and ask as many questions as possible to gain a full understanding of their needs.
  • Take note of all feedback that the customer offers as well as any features they are looking for.
  • Actively listening demonstrates respect for the customer, builds rapport, and avoids miscommunication. It also allows the salesperson to fully understand the business' needs and therefore puts them in the best position to sell the hardware because they know what aspects of the hardware to highlight.

Research Strategy

Given the length of time that hardware has been marketed and sold to businesses, it is surprising to find that there is very little information about best practices for engaging and selling B2B. The majority of resources focus on explaining how hard the market is and how small the margins of profit are. Nonetheless, we delved into resources, such as Forbes and Fast Company, that provide advice on how to best catch the attention of companies in order to present and sell B2B hardware. Each of the practices above provide an edge to the seller/marketer and have thus been included as best practices.
Part
04
of eight
Part
04

B2B Hardware Sales Best Practices, Part 2

Some additional best practices for B2B hardware sales include ensuring the product works by testing it in different conditions, and checking how the product works in different departments then pitching to those departments.

Make Sure the Product Works in Different Scenarios

  • It is important to test the product to work in a variety of scenarios and conditions in order to make sure that it works as intended. There is a lot at stake if a product does not perform as advertised when marketing to established companies and businesses, so there is little room for error when approaching them with a product.
  • Product testing can be done by using engineering simulation software, which will analyze the performance of the product in various real world conditions.
  • Simulation also helps in the quick development of prototypes based on feedback from clients. Products can be customized for different clients, and features requested by clients can be tested to see if they will work well in the real world through the use of virtual engineering simulation.

Check How the Product Affects Different Departments

  • The decision to buy a product is not made by a single department or individual, so this should be taken into account when making a pitch.
  • It is important to think of the different departments in a company where the product can be applied. Afterwards, pitches should be made to each of these departments to show them how they can use the product.

Research Strategy

There is very little information in the public domain about the best practices for successful B2B hardware sales. Most of the resources that we were able to find talk about the difference between B2B and B2C, and how B2B sales work. We looked through sources such as Startup Blink, Business 2 Community and The Balance Career where we were able to find some useful insights. The practices above have been included as best practices because they are ways in which a salesperson can gain a client's trust and close more sales.
Part
05
of eight
Part
05

B2B Oil & Gas Sales Best Practices

Some best practices for successful B2B sales in the Oil & Gas industry investing in B2B digital marketing platforms that gather all the key stakeholders in one platform and interacting with customers across multiple channels such as social media, content marketing

1. Invest in B2B Digital Marketing Platforms

2. Interact With Customers Across Multiple Channels

Research Strategy

We started by our research by searching through articles, blogs, and publications relating to the oil and gas industry. Our primary focus was on B2B sales and marketing in the industry. We checked sources such as Elevation B2B, Oil and Gas IQ, and B2B Connect Edmonton. In compiling this information, we examined tips, expert opinions and case studies, and identified the best practices as those that were frequently mentioned.

Part
06
of eight
Part
06

DAS Current Applications

Enhanced perimeter security and transport tracking monitoring solutions are two of the most common applications for DAS fiber products.

Perimeter Security

  • The use of DAS fiber optic sensing is common and used in multiple applications, primarily due to its cost-effectiveness, immunity from electromagnetic interference and use of a single interrogator.
  • Sensing is one of the most common features of distributed acoustic sensing (DAS) and is based on coherent Rayleigh scattering. DAS fiber optic sensing is common in perimeter security and is widely used at airports, other civilian assets, seaports, government installations, military installations, oil refineries, power plants, hazardous areas, and game reserves.
  • The use of DAS is particularly common among security personnel because of its real-time detection mechanism that helps deter intruders. More importantly, when combined with relevant technologies, DAS fiber sensing enables security personnel to respond and prevent attempts of intruders from gaining unauthorized access.
  • The use of DAS fiber products is also common in border environments, such as Tijuana and San Diego in the United States and Mexico. DAS fiber products are also widely used in urban areas to provide subterranean activity detection in high-risk areas, especially those with high incidences of contraband trafficking.
  • The use of DAS fiber optic and its products is being adopted by other industries because of its ability to operate even after a fiber cut.

Transport Monitoring and Tracking Solutions

  • DAS fiber optic has important applications in the transport industries, especially for the rail transport industry, where it is used to observe the health of track and trains.
  • The products are widely used as monitoring based solutions in the transport industries. The use of DAS fiber optic in transport industries is based on DAS technology’s unique ability to convert fire optic cable into an array of distributed sensors, often used to monitor road and rail networks.
  • In the railway transport sector, DAS fiber optic and products are used to improve railway security. This includes the detection of third party activities and the intrusion linked to cable theft. Railway companies also uses DAS fiber optic technology to detect landslide events, rockfall, and train condition monitoring.
  • DAS fiber optic is used in the road industry to deliver real-time traffic. With the help of monitoring applications, it is easier for those working in the road industry to monitor the average traffic speed, detect congestion, and count vehicles and flow rate.
  • The DAS fiber optic products offer significant operational advantages and performances to those in the transport industries.



Part
07
of eight
Part
07

DTS Current Applications

The two most common uses or applications of DTS fiber products include fire detection and power cable monitoring.

FIRE DETECTION

  • Industry: Fire and security
  • Distributed temperature sensing fiber products are used in the detection of fire hazards to prevent human casualty and asset damage. The installed DTS helps in detecting different types of fast fires, traces the precise location of the fire, and monitors fire size and spreading accurately.

Usage

  • The DTS is installed in required special hazard locations such as tunnels and conveyor belts to track rapid changes in the temperature level in real-time.
  • When the system detects a fire hazard, it sends a signal by raising alarm as well as provides actionable data.
  • Depending on the length of the heat sensing cable, the DTS can detect fire hazards from multiple kilometers.

POWER CABLE MONITORING

Usage

  • The applications for distributed temperature sensing in power cable monitoring includes real-time thermal rating of cables or dynamic cable ratings, hot-spot detection, fire detection for cables, delivering operational status, and condition assessment.
  • The DTS is either placed inside the power cable itself or connected to the surface of the power cable configuration for observation or detection.

RESEARCH METHODOLOGY

There is no precompiled data available in the public domain concerning the most common uses of DTS fiber products. The available sources simply list all the applications of DTS fiber products. Therefore, we examined reputed market research portals to identify the recently published reports on the DTS market because they present market shares based on segmentation — region, application, and key players. Through this approach, we were able to trace the two most common uses of DTS fiber products — fire detection and power cable monitoring. In order to verify the collected data or to determine that the identified applications are the most common, we further looked for statistical data that demonstrates how much the applications are used. We examined media sources and statistical databases such as Yahoo Finance, PRNewswire, Statista, and other reputed sources. However, we only found market research reports and nothing relevant turned up. Subsequently, we took a different approach and looked for more market research reports to see if the identified applications were repeated. We found more than seven market research reports repeating the information. We concluded that the identified applications are the most common uses of DTS fiber products. After identifying the most common applications, we looked for more information on how it is used and in which industry.
Part
08
of eight
Part
08

DAS & DTS Future Applications

Fiber optic cables were installed in the earth’s near-surface for the sole purpose of telecommunications. The high cost of installation and surplus fibers, which many are unused, requires new commercialization techniques for the technology. Distributed acoustic sensing and distributed temperature sensing can be used for seismic activity monitoring and as soil temperature sensors in the future.

Seismic Activity Monitoring

  • Distributed acoustic sensing (DAS) can be used as seismic activity monitors according to a study done by a team at Lawrence Berkeley National Laboratory in 2019. According to the research, DAS technology can be used to detect earthquakes thousands of miles away. DAS is an easy method of monitoring earth's near-surface. The study was done on a 27-kilometer stretch for seven months, where seismic data was obtained at 500 times every second per every two meters. DAS has a sensitivity to earthquakes with a magnitude between M4.4 to M8.1.
  • The hair-thin glass fibers used in DAS technology serve as seismic detectors. DAS can sample seismic waves every few meters and monitor seismic activities up to 7757 kilometers. The use of DAS technology can do geophysical monitoring of offshore seismic activities. Across the globe, DAS the development of seismic networks up to continental scales.
  • Studies indicate that DAS provides similar data to above-ground seismic stations at a cheaper cost. DAS technology can be used as an early and faster means of detecting earthquakes. Many regions around the world that are earthquake-prone do not have expensive seismic stations making the DAS technology a low-cost way of monitoring seismic activities in these regions as millions of kilometers of fiber-optic cables are found across the world.
  • The use of DAS technology to monitor for seismic signals generated ocean waves can help predict offshore seismic hazards, ocean movements, and underwater volcanoes according to research done at California’s Monterey Bay. The study discovered geological faults that were not known previously and could detect seismic signals formed by ocean waves.

Soil Temperature Sensors

  • Soil temperature is vital in the regulation of hydrobiogeochemical processes. Soil temperature is affected by various climatic factors such as surface water, snow insulation, and water and heat fluxes in the subsurface. The acquisition of soil temperature is limited by difficulties in data management, expensive equipment, and complexities in deployment. Distributed temperature sensing (DTS) offers a promising alternative for soil temperature monitoring, according to numerous studies carried out.
  • DTS can offer continuous measurement for many kilometers over thirty years as the cables can withstand repeated use and temperatures up to 150°c. Temporal resolution can be set in seconds or hours, depending on the required thermal precision.
  • The technology was able to establish permafrost temperature in a study conducted in the Arctic. DTS can monitor soil temperature in extreme and remote environments.
  • The self-testing aspect by DTS eliminates the need to take soil to the laboratory to verify recorded results. The DTS fiber cable is 3mm in diameter; hence it can respond quickly to any temperature changes.

Research Strategy

We searched for various articles, product company reports, and researches done on DAS and DTS technologies. The use of the two fiber optic cables as seismic monitoring and soil temperature sensors, respectively, is still under pilot studies with the findings providing optimistic outcomes.


Sources
Sources

From Part 07
From Part 08
Quotes
  • "The team used a relatively new technique called distributed acoustic sensing, or DAS, to measure how seismic waves affect the underground cables. “The neat thing about the technique is that you can use it to measure seismic waveforms at a very large number of locations on an existing fiber,” Jonathan Ajo-Franklin, lead author on the study, told Eos."
Quotes
  • "Using the cable, the researchers recorded a broad range of seismic activity across four days in the Monterey Bay area – including a magnitude 3.4 earthquake with an epicentre 45 km inland. Ocean and storm waves, the measurements of which were shown to match recordings from buoys and land-based seismometers."
Quotes
  • "We observed broadband DAS sensitivity to ground motion from earthquakes of varying magnitudes (M4.4–M8.1) and distances (100–7757 km)."
Quotes
  • "Up to 150°C Fast temperature response High tensile strength High crush resistance Excellent rodent protection"
Quotes
  • "Fiber-optic distributed temperature sensing (FO-DTS) offers an alternative to point-sensor methods in studies where temperature measurements with high spatial and temporal sampling resolution are needed"
Quotes
  • "Recent advances with the fibre-optic active distributed temperature sensing technique make it now possible to monitor large areas at an unprecedented spatial and temporal resolution. This study shows the application of the fibre-optic method for monitoring soil moisture and soil temperature within the upper 0.5 m of soil across a 2 ha field recently planted with juvenile deciduous trees."