We have great news to share with you. Midesk got backed by the Investment and Development Bank Hamburg (IFB) and secured an equity-free start-up grant under the IFB InnoFounder program that will cover the operations until March 2022.
In this post, I write about my experience applying for the grant program, shed some light on what the company went through last year, and talk about the future of Midesk.
IFB InnoFounder is a grant program provided by the IFB (Hamburg Investment Bank) and facilitated by the IFB Innovationsstarter that supports founders and start-up teams with innovative, especially digital and/or sustainability-oriented projects with an amount up to 75.000 euros (based on the number of founders). It’s a journey to reach at it.
Start of the Journey Was Almost the End
Although we had a pretty solid backlog of interested leads already in 2019, first testers validated our MVP, and we got accepted to Next Media Accelerator, confirming that we were headed the right way; the IFB is known for its rigorous requirements on traction and asked us to acquire a bigger paying customer before applying for the start-up grant. And it had to be a corporate client.
“Corporate” is a rather hard-to-fulfil condition for a young start-up. Coming from one corporation myself (hello thyssenkrupp), I am very well aware of the longer procurement process, weak appetite for “unproven solutions” and higher requirements on support services. Taking the start-up hat back on, to get a corporate client, the whole strategy, product development, sales, and marketing must be aligned to succeed. And such a decision locks a start-up in a certain direction - get one big fish. And that’s pretty risky. But we were fine with it because we had a strategy, sales pipeline and good talks with our leads.
And then COVID-19 happened which felt like getting stabbed in our back. One of the key corporations we had been talking back to then and for whom we dedicated hundreds of hours of product development had to pull out of the process due to the reprioritization of their resources on mitigating the pandemic. And some other key leads started getting cautious about their focus too.
In the meanwhile, our runway was running low and there were hard decision in front of us. The biggest of them was a decision my co-founder and I agreed about: Zuzana to depart from the company. This was a very difficult moment for both of us not only professionally but also personally. Zuzana had moved to Hamburg and dedicated all of her time and energy to Midesk. I am very grateful for her contributions to the company and respect her very much for initiating this decision and showing one last time how much of a team player she is!
Now I knew that even if I apply for the program (which was the only viable way for Midesk to survive last year) I will have to jump higher than others. And now I’m again alone to do it.
From Zero To AI
To jump higher, I knew that a fully-fledged AI is a must. Moreover, one specific NLP (natural language processing) task was something a key remaining corporate lead was caring about, and developing it could perhaps help carry Midesk into a contract. But how do I do that? I had no proper AI experience except a couple of partial results I was able to showcase as part of the MVP.
Naive but determined to make it, I decided to take this path. I started re-learning math again, studying vectors, matrixes, and AI in general. I started exploring the tool and model landscapes. And eventually learnt Python, figured out how to collect, store, prepare and annotate datasets to train my first proper AI model. And that is just half of the problem. How do you assure quality or how do you deploy and consume the model predictions? It was a tough undertaking that took over 1 month of my time working on it full-time.
But I can proudly say now that we’re powered by proper custom AI models that return relevant Market Intelligence results. And what’s even better, we run them serverless on AWS and thus, unlike traditional AI implementations, our monthly AI-budget is negligible. #prodigy #spaCy
It Finally Happened: A Corporate Client on Board
Since the beginning of the talks with IFB Innovationsstarter, it took months of product development and countless meeting with so many diverse companies until we were able to secure a first corporate customer: in our case, I’m so proud to have built a partnership with New Work SE, which is the mother company of Xing, the largest Professional Social Network in Germany.
I’m more than grateful to my point of contact at New Work, Julian, for playing a crucial role in our development, for his patience and open mind. Thank you, Julian.
Applying for a grant for almost €50.000 is one thing, but doing so in a foreign language is another. I can only encourage English-speaking start-ups to dedicate enough time to this process and have a German-speaking translator nearby.
The application consisted of the typical business deliverables, such as a business case, financial planning, targets, and a 10-minute video-pitch. The application also included a non-binding HR plan with gender quotas, which is something that Hamburg pioneers, and something good to see institutionalised in such an official application.
The effort related to this application was around 1 month. This would be of course very hard to accomplish without professional support and coordination by the IFB Innostarter itself. Thank you Jan.
The Decision Committee
The final approval / rejection of the application is taken by a Decision Committee that consists of around 10 domain experts from across Hamburg’s start-up eco-system and academia, including the representatives of IFB Innovationsstarter itself, Hamburg accelerators, experts on UI/UX, Sales, Marketing, tech, and AI.
The committee studies the documentation and then invites the applicants to defend the case. It was a very fast-paced event. I don’t recall much. One moment sticks, though. I remember explaining our AI implementation to a professor of AI.
Midesk successfully defended the case and was approved the grant.
Decision & Next Steps
After everything that happened last year, the IFB InnoFounder was a mission-critical grant and a huge enabler for the future of Midesk. The grant added practically 18 months of runway, which is something priceless, especially amid the current uncertainty on the markets.
Regarding the next steps: I spent last 7 months working on the upcoming version of Midesk 3.0. I’m finally happy about the result. It’s time Midesk comes out again. Maybe you noticed that Lennart has just joined the team and took over a sales development representative role. We’re also looking for a part-time front-end developer and a marketing intern. Midesk 3.0 is coming out in February 2021.
And we will start looking for an investor again … to help us bring innovation into Market Intelligence.