The Smart Deal with Katrin de Proyart from Vizzia

Welcome again to Current's podcast, The Smart Deal. I'm Joe Zarifé, and in this episode, we're discussing entrepreneurship, startups, market validation and fundraising. To do that, I'm joined by Catherine de Poyard, co -founder and CEO of Visia, who will share with us her experience in setting up a startup specialized business. in cleantech. Catherine, thank you very much for welcoming me in your office. Thank you for having me. I think the best way to go around this discussion is to start by your academic path that led you to this idea. We see that you started off as data analysts, internships in data analysis in some luxury brands. And then we see you specializing and starting a... company that specializes in wild dumping. It's wild dumping, right? It's illegal dumping too. Yeah, illegal waste dumping. Some call it littering or fly tipping. Okay, so what happened? During my whole studies, I've always been interested in entrepreneurship. So I was always thinking, okay, I would love to find an idea and to build something. industry i really uh easily enjoyed was like clothes buying stuff uh makeup and things like that so it was the lowest hanging food for you exactly so it's like well naturally in this industry i might i must find something um that can be built because i like the products i buy clothes myself like everyone and things like it was so i go into luxury and while as i study at cartier for example yeah i work i work there i do an internship there and then i go back to i should say but i'm still like okay what am i gonna what am i gonna build like i have like zero value added um and i was like okay well i see many people who have a huge network like 50 years old have a lot of funding because they are well known in the industries and stuff and me like i don't have any uh value added no networking no funding no um no edge no edge so i'm like okay how can you find an edge when you're like 25 well tech like tech is the it was like really this the the mindset and um so i instead of going to the major of entrepreneurship i choose data science for business so i meet alexandra yeah your partner my partner yeah yeah there and she's an engineer uh very good uh in software and in data and um with a very like uh complete tech background and so we start working on different projects you started off the first year you and your partner, Alexandre, the co -founder, and you ended up with how many employees at the beginning? The first six months we were alone. Okay. And then maybe around the fifth month, what we did is that we, not hired, but we worked with a freelance who helped us a lot. And he was not in France. He was based in Bulgaria. Okay. And that was quite a huge help because honestly, like we didn't have. any funding at that time and then we had our first employee a month later okay when we did like in december 2021 um and we at that time we also did a small family uh love money round family closer circle and also uh like uh for example our lawyer his close friends so it was not only just the family but also people who saw us working hard on the project and were like okay maybe they trusted you they they felt their they felt your drive exactly they they i don't know how but they they were like uh yeah they trusted us look i i wanted there's there's something i want to try to put my finger on is we we always there there are always great ideas especially when we're talking about sustainability and stuff like this yeah and saving energy and saving the plan there's always good great ideas most of them end up to be bad great ideas due to you can't implement the solution is not it's hard to develop it's not the cities cannot actually deploy how did you get a spot -on solution and this how did you convince the cities i think everyone says execution is everything i think it's true I also think we were very early on our development, so I'm not sure we got the execution right. We'll know maybe in five years, once we'll be able to compare ourselves more like, I think. But the first reason why the most early one, why companies fail, is usually the market fit, the product market fit. And we got that, I think, by listening very closely to the market because we talked to mayors, even... uh almost before having any product uh so i went and actually was selling uh like nothing an idea an idea i didn't have anything i was selling it expense very expensively saying that thinking that okay if uh if i find a mirror very early on that is we would agree to buy something um even in existence well then there is probably a product market you are having a feel of the market exactly and like sending like saying i have this that's very interesting to have the product yeah that's very interesting and it it demands a lot of energy training and it's also like draining to believe in yourself because um uh you're gonna on the way you're gonna realize many things uh well they're gonna ask you do you have this authorization or do you have this and how do you integrate with existing cameras and you have no clue because you don't even have the initial product so you're like so you're like and then you're like oh my god i have to integrate with all the existing solutions i have to do this and i have to do that I get it why many people stop sometimes. I mean, I don't even know why we sometimes continue. It ended up turning quite well. But this brings us to your first fundraising round, real fundraising round at 3.4 million, two years into operations. How did you survive till then? So we have a little bit of money. Then we had some help from the subsidies, not very big ones, but still. Were you paying yourselves? No, we weren't paying. ourselves. Until? Until we got the, just a little bit before the fundraising. So basically a year and a half, close to two years without paying yourself. Exactly. So, and Alexander and me, we were both in that case. And so we had this, and then we also, what we did is, that's like kind of the cheat code, is that before we started the fundraising, you could raise what's called BSAR. It's a simple agreement for future equity. So it's kind of a new vehicle. I think it was born in the U.S. where did you? it and it's like okay give me i'm gonna raise soon but i need a bit more time to to do something before i start raising uh give me i don't know 100 i think it was up to 200 000 we raised like this perfect from different business angels and we were like and you're gonna get the shares once we start fundraising that's bridged the period between uh when you start fundraising until you get the funds which can be which is gonna be our next topic too but when did you making revenues was you started directly making revenues or it took some time not cashing in i mean invoicing we started invoicing i think beginning of 2022 okay that's six months later six months later that's the first invoice we got i think even in december 2021 yeah but then we had to wait to the put the product was done so we were in we installed and basically cashed in our first detector the vialicam uh in may 2022 so one year after and then you started fundraising when? For us, it was end of November, early December. This is a subject that's quite interesting for our listeners. Who did you approach as investors? We went for VCs because we wanted to raise with VCs and we didn't want to do industry investors because there are a lot of very well known in our field, meaning that sometimes they have like a little reputation of sometimes killing the companies. Because of too much input and they want to be very hands -on on the company, that ends up hindering the progress. You learn so fast during fundraising because it's kind of the only time, not the only time, but it's a big period where you cannot fail. You were like, I don't have a choice. Survival mode. It's survival mode, like survival mode. Because it's like a time when you plan your eyes, it's like, I know this is going to work, but I know also that I need more investments to make it work. Did it start flowing better once you had this one use case or one example to show for? We are starting to feel that more now. Because like the first ones you do, you're not that well known. Like, you know, you're like, you have two cities, but it's... It's not like boule de neige. What's boule de neige, it's when you now have signed 40 cities. So you have 40 cities sometimes talking about you. And you have all the press going around with the fundraising around the 40 cities. Because when you have 40 cities saying, I've installed this up. Well, now it's another story. Then you have the snowball effect. When you're raising, you need to sell the best plan you could. And some... times like um much bigger which is at the end a good um they're gonna they're gonna stress test your they're gonna stress test your uh your business model yeah so might as well give the best case scenario exactly and then uh it will be uh revised anyways that's the name that's the name of the game is it that's the name of the game everybody knows it you don't yeah yeah so you were you were very conservative in your numbers when you were approaching the fund no we were You were realistic? We weren't very conservative. We were, well, we were in the good plans, but without overdoing it. And all the people were like, just overdo it. Like, imagine you just touch the whole United States and like fast and you're like, and we ended up doing this, but this is progression, you know? And actually, maybe the best advice I could say is very stupid, but it's like, spend time with investors without selling them your company and understand how they think. VCs sometimes have a very... trip guidelines like co -founder uh second or third uh good school um software uh no hardware you know we have a little bit of hardware uh like uh b2b sass we you know yeah of course of course so you two years two years into the business seed draw seed round of 3 .4 million it's like it's a good achievement in my opinion and uh now that the funds are in yeah it's gross time right and it's gross time yeah it's gross time so how many employees are you now in visual we're now 15 and we we are looking for uh be maybe five more people max because uh the the idea was like we raise we hire and then we grow but we don't add people on continuously you know you say you bring in you bring in everyone from the beginning exactly and uh and don't die you the money over time and everything you go full force from the beginning well yeah that's the best you know what you want to do i like the strategy always like the strategy we're coming to the end of the discussion i have like two three more questions uh what are the challenges you're anticipating now that you're on the growth phase you have that the money is in you have funds to you have funds to pump let's say but what are the challenges you're anticipating for your growth for this growth growth stage let's say what we what we wish for is to be to break even, quite almost break even before the next round. Why? Because I think it's always more comfortable to be independent rather to depend on the next round. So to break even on the next round, we need to do three things. First one is sales. We need to get the numbers. Easy. To get the numbers, that's it. Which are ambitious. We have a crazy, we are aiming at a crazy growth rate, so it's quite hard. The second one is... get cash in, which means like once you sign the sales and you get the contract, you need to install the product, then you need to cash in. And that's quite important because if you have a huge delay in your cash in, that can make your company die just because the- You need to narrow or to have a cash cycle that's smaller. That's smaller, yeah. Which is doable, but it's a lot of processing and I think we can do it and we're- doing it so it's about payment terms and that depends on it starts from the moment you install and then it triggers the payment delay exactly so there is work to be done from your side and negotiation on the contract side to have payment terms that are narrower exactly now exactly so yeah but i think it's doable it's a lot of processing yeah and the third one is a trade -off between what do we do it's that's that's a hard one we're still thinking about it it's do we invest more on sales and you're selling more or do we invest more in R &D? Meaning that our product right now, it's not a perfect version. It's perfect for the customer, but it's not perfect for operations. It demands a bit of operations, which costs us money and it's uncomfortable. So either we're investing in the sales team and we sell a lot and we have a lot of operations because the product is not perfect. Or we invest in R &D, we spend money in R &D, no immediate revenue back, but we make it scalable and we cut the operations costs. So it's kind of a trade-off of what do I do? Do I sell more? And the selling... It's a dilemma. Let's close with this. Series A. 18 months. We plan to break even before that. So I hope... I mean, it's not I hope, it's we'll see about the market. Catherine, thank you very much for this conversation. It was super insightful. I had a lot of fun discussing this. Thank you for having me in your offices. And that's it for this episode. And thank you for listening. Thank you for having me.