Saturday, November 1, 2014

Paul Murhpy Talks about His Startup -- Clarify

Paul Murhpy Talks about His Startup -- Clarify

Where are you from originally?

I’m not from anywhere really.  I was born in Argentina of a French mother and American father.  Actually, my mother is only half French.  She’s also half Luxembourger.  She was born in Ecuador.  My father is part Irish, part French-Canadian, and part Iroquois.  He was born near Boston.  My brother was born in Italy.  I went to school in France, Italy, and the US.

So I don’t have anywhere to go back to.  I only pay attention to where I’m going, which is handy in my line of work.

My wife is Australian.

What university did you go to?

I went to Columbia in NY.  I dropped out, twice. It felt like life in slow motion.

What is the idea behind your startup?

Media files are completely unexploited digital resources. They are full of data, but it’s impossible for a developer without a background in signal processing to access it. Our startup, Clarify, extracts that data and makes it available to developers. 
Today our API allows developers to index and search audio and video libraries with a few lines of code.  The web site Mobento, for example, uses our technology to make the content of educational videos accessible to students and professors.

What need does it fulfill?

To do anything truly interesting with audio and video files – anything besides playing them back – developers need to be able to manipulate their content. Today developers can search text files, extract their keywords, even summarize and translate them. Clarify is allowing these developers to do the same with rich media.

What exactly does it do?

Our platform first figures out what sort of content a developer sent it. Is it speech? Music? Noise? English? German? It then uses the best possible speech recognition technology to extract words from the media, and indexes those words along with any other data the developer wants to associate with the media.

Going back to the Mobento example. They send us video descriptions, speaker names, etc., and all of that – along with the words spoken in the video – is searchable via our API.

Who is it for?

The API is for developers.  The products they build are for many different industries.To date we’ve come across a lot of use-cases.  Over 400 developers have signed up for access to Clarify since we launched into beta.  A lot of their use-cases have surprised us, and we know there are a lot more out there.  The more data we expose, the more use-cases developers will turn up. 

Ultimately, any industry that is generating or collecting media files needs our technology.

What was the most challenging aspect of starting up?

We are bridging two words: the speech community and the application development community. Science and engineering. These communities speak very different languages and work very differently. Figuring out how to bring that science from the lab to the real world has been our biggest challenge. We think we’ve done a pretty good job so far, but we’re not out of the woods yet.

What is the next step for you and your business?

We’ve just raised a substantial round of funding that is going to allow us to continue extending our platform and introduce it to developers throughout the US. Both of those are pretty exciting, and they both require a lot of work. We couldn’t be more ready to face both challenges.

What advice do you have for entrepreneurs?

Don’t give up. 
It’s really difficult to introduce new thinking and new technology into the world. I can’t count the number of times people have asked me: “By why does anybody need this?”

Some day we’ll look back and smile, the same way we smile when we think of all the people who asked:  “Why do I need a computer?”, “Why do I need broadband?”, “Why do I need a cell phone?”, or my favorite: “Why would I need a phone that does more than make phone calls?”

It’s easy to feel smug in retrospect, but a new idea has to survive to be able to consider it once it’s been accepted, i.e., once it’s “normal”. Keeping it alive long enough for that to happen is hard.

It’s hard to fund a business. It’s hard to build the right team. It’s hard to write software that works and scales. It’s hard to avoid running out of money. And while we’re doing all those hard things, we have to ignore all the people who tell us we’re wasting your time, and our inner voices that tell us how much easier your life would be if we just quit and got a real job.

 What resource have you found to be the most helpful and why?

That’s easy: my circles of support.  Family, friends, advisors, mentors, and investors.  I don’t know if obsession counts as helpful, but it’s certainly necessary.  That’s the fuel that keeps me going, but without the people around me I’m pretty sure that fuel would have powered me straight into a brick wall by now.  


Thursday, October 30, 2014

"So What's the Risk?"-- In Consumer Product Good Deals

"So What's the Risk?"--  In Consumer Product Good Deals

The entrepreneur looks at the opportunity.  The investor looks at the risk.

So what's the risk in a deal?

While some risks are universal to all deals such as ability to execute and having the right team.  There are sector specific risks the investor should know.

In the consumer product goods space, one can make and sell just about anything but for those seeking to raise equity investment what's the risk to the investor?

The short-term risk is you won't have enough margin to make a profit.  Without a healthy  profit you can't grow the company from sales alone.  The category growth rate of the product makes a big difference in the company's ability to grow organically.

The long-term risk is you won't be able to raise more funding.  Most consumer product good companies need to raise funding every 24 months to continue a healthy growth rate as you have to fund the inventory increases that come with opening new distribution channels. To raise private equity funding you need sales north of $10M.  To sell the business for a decent return you need sales north of $20M.

The risk in the deal is failing to reach those levels on organic sales growth or earlier stage funding and not be able to raise more funding to grow the business to the $20M+ exit point.

Best regards,
Hall T.