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UniSender b2b-ecosystem: Angel Talks with Dmitriy Soloviev

Thursday, October 21, 2021

Startup Jedi

We talk to startups and investors, you get the value.

Why do companies build their b2b-ecosystems and take over startups? We will talk about this in our next episode of Angel Talks video podcast, hosted by Ivan Lomakin and Sergey Beliaev. Our special guest is Dmitriy Soloviev, a venture investor and co-owner of UniSender mailout service, who is also developing a no-code community of specialists (zerocoders), as well as, ZeroCoder platform.

Road from entrepreneurship to UniSender

Initially, I was an entrepreneur and I have a technical background. In 2001, I started developing a startup called “Idealnaya Gazeta”, which was an RSS aggregator. At that time, neither RSS nor XML was popular, so we manually parsed (parsing — collecting and organizing information posted on certain sites using special programs that automate the process — Startup Jedi) news sites and every time, we had to adapt everything, and eventually, it was some kind of a newsreader with elements of artificial intelligence for Windows. The borrowed money was spent on advertising in the metro and telephone cards with an erasable barcode sold at “Sojuzpechat” kiosks. The money was later returned by selling the whole newsgathering technology.

After such an experience, I decided to take a closer look at the ready-made solutions already available on the market and founded the StartupIndex agency in 2007. We invited various projects, made pitches in cafes, restaurants and ranked them afterwards. Then we gathered experts, gave an expert assessment and published projects and ratings in a glossy magazine; there were seven issues published. Later on, I sold the agency to an investment fund and started investing as a business angel.

And that’s how I got into UniSender, when they were at the early development stage, bought out the minority share and became the CEO of the company in three years. Since then, I have mostly invested from UniSender.

UniSender is a simple mailout service. This is a very comfortable service for newbies, who only start working with client databases and want not only to gain new clients but also retain and keep them around. Most of our competitors are moving towards functionality, while we try to retain customers without complicating the service. We have legendary 24/7 technical support, which helps to evaluate the database, tells you how not to be a spammer, and even types the first letters.

How to deal with competition represented by chat-bots and messenger mailouts?

It is all simple, as these are different tools for different aims. Now, there are stories in WhatsApp and Telegram when almost every channel creates a scenario for a bot since messenger marketing is oriented on client attraction. And Email-channels are more aimed at client retention (Retention is one of the key metrics of the product that determines the potential for business growth, and also affects monetization metrics. Expresses the company's ability to retain its customers for a certain period. - Startup Jedi)

In the modern world, Telegram, WhatsApp and similar ones are used more and more for communication and connection, while emails are used way less. The email channel remains operational and the email market grows, and the quality of sent emails grows with it; it's just that traffic is shifting more to the business. For example, I consider my mailbox more as an information channel. The email channel helps to work with clients, warm-up databases and raise money.

Some time ago, we launched mailouts on Viber but they did not bring us any money. Soon, we will have bots for Telegram and WhatsApp. A set of b2b services for our clients will appear as components of the ecosystem. We are not innovators, we look at the market, castdev, find out what makes money, and draw conclusions.

How UniSender transformed in twelve years?

We noticed a slowdown in growth in 2018-2019, and for some time, we lived in the paradigm that we would simply improve our service, stay with our audience and wouldn't run away in growing a paycheck. However, the number of email marketing agencies has increased in the market and appeared large customers who were willing to pay for strategies and CRM marketing. And we thought that it might be worth adding the functionality our audience asks for. We invested in PopMechanic, created a pop-up (Pop-up is a pop-up window that appears during a page visit, a dynamic subscription form and one of the ways to get an email and subscribe a user to a mailout — Startup Jedi), which can still be used in UniSender for database collection

We are constantly looking for startups, however, it is important what stage they are at: if the project is at the early stage then we invest, look at the team, how they are able to raise money in market, but there are also cases when we invest and don’t integrate the product until a certain point. And sometimes we attract investment bankers to build relationships with the guys. This is despite the fact that we are completely self-sufficient: we are a profitable company and we don’t raise investments. Nevertheless, we are considering Western partners who can assist in cooperation with the Western capital market. 

One of the investment criteria for startups is the project's ability to immediately enter Western markets so that the revenue outside the CIS is greater. As of today, we have invested in four companies, and I think, a few more will appear later this year. The average paycheck is $200 000 - $300 000. 

The UniOne service has been allocated as a separate company, which deals only with transactional mailouts. Its target audience is larger companies, which have millions of transactional mailouts and the speed of message delivery is crucial. 

There is also another separate company — UniBase. When we were making a product for automating funnels in partnership with developers, we made a script builder.

How to build a b2b ecosystem

Building an ecosystem is quite a challenging task. If we take some successful product: a CRM or a bank, then we’ll see that the owners are trying to simply add additional services for their target audience; and for example, for a bank, some non-financial services. But since it is clear that people come to the bank for the main service, and its brand has already been formed following the expectations of people, it turns out that the added services bring little traffic and even less money.

Recently, the situation began to change: the market started to grow, as well as the money in the market. B2B environments will always be there — both with or without us. We don’t know what specific steps we have to take to get there, so all we have to do is to develop product, marketing and financial fields.

We plan to create an ecosystem without adding all the components at once but collect them like Lego pieces, so they will be useful later. We must build it as carefully as possible, hedging ourselves in order to collect all the parts at the right time. We invest not only in the main product, but also in these parts, we begin to assemble them, leaving the possibility of choosing the necessary spare parts at any time, reducing our risks without burdening the main product with unnecessary parts.

Is it necessary to launch a venture builder to build your ecosystem?

Why don’t we launch a venture builder? (Venture builder are companies that take the creation of startups to the assembly line and turn this process into business. The most famous and experienced venture builders are American IdeaLab and Betaworks, as well as Rocket Internet from Germany. They launch several startups at the same time, invest funds and help raise additional money. ― Startup Jedi) It is impossible to catch up with everything and fill it out, as in Tetris, so we focus on our product and expanding the product matrix. Venture builder is a separate business that is quite popular now. Many are building venture studios, incubators, accelerators, having already built certain companies, but this is a business where the economy will be built on the flow. For us, it is not the flow that is important, but the search for those "grains" that will give maximum synergy with UniSender and with the services we have already invested in.

When we were developing StartupIndex, we came up with the term — “venture investing pull”. There is “push”, when you’ve created a startup, invested the money and then you run around the market selling it. And “pull” is when you come to a company as a venture studio and clarify what kind of startups they are interested in.

We request 10% of the company's total budget for research and development (R&D) in order to select promising projects and help them grow. And only when the project reaches the required level, we give it to the company at a fixed valuation, in order to earn money. Currently, many companies have such a model of corporate accelerators: VTB, MTS, Gazprombank. Many enter into agreements with venture capital studios so that they find projects and develop them to a certain level.

Using personal data in mailout

In the United States, there is a growing problem with the use of personal data, since even emails are collected through Facebook and belong to it. In Russia, the situation with personal data is becoming more and more severe. In 2006, the Federal Law of the Russian Federation No. 152-FZ "On Personal Data" was issued, which required us to become an operator of personal data, which we did on the territory of Russia. Recently, a law was passed obliging Western companies with a Russian audience of more than 500,000 people to have a representative office in Russia.

Earlier it seemed irrelevant to demand a phone number at registration since the email was enough. On the contrary, the systems are now switching to the collection of mobile data. When registering, we try to request a minimum of information, and for a better understanding of our user, collect attributes in the future, in order to custom the work more efficiently and understand the payment behaviour of users from different business areas.

How important is project management

At early stages, management is less important than the market you enter. The big market will forgive bad team management. And vice-versa, the more complex the market, the more important is good management. If we talk about founders, a good founder has chosen a large market, which allows him to be a bad manager for longer. Good management means managing to grow their share even in a highly competitive market.

21 Oct 2021

 

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