Back in October of last year, I wrote Part I of my take on Seedrs vs. Crowdcube. It was a short and sweet post promising more detail down the line. In part II, the goal is to share a little bit more of Chessable’s story and also try and help other UK entrepreneurs considering the same issue.
If you are an entrepreneur, you may ask what lessons can a failed campaign offer you? Plenty! While crowdfunding did not work out for us, our investment bid is not over yet, and we are in the last stages of raising an angel round privately. We are also one of the very few companies to have been listed both on Seedrs and Crowdcube (not an easy feat!). As a failed crowdfunding campaign, I can say that I wish I knew a lot of what I am about to write before the journey. I certainly Googled around for such a post; there was none to be found. Here it is.
First things first, do you really need crowdfunding?
We opted for crowdfunding for multiple reasons. First, we had many enquiries from our users about whether they could invest. This may sound like a no-brainer then, but be careful! If like us, you have a lot of international and U.S. users, you may find that getting U.S. individuals to participate is next to impossible. Confront the platforms on this issue straight away, as despite what members of their team may tell you, it may just be impossible. For instance, we couldn’t get a £10k accredited US investor on board, and we only found out when it was time to make the payment. Initially, we were told by the crowdfunding platforms we’d find a way to make it work, it didn’t. We wasted the investor’s time, and we wasted our time.
This might change as the field matures and certainly if we were able to let our US and international backers participate, crowdfunding may have been the way. As for us, we then hoped that our UK and European supporters would help us pull through, but we really did miss the rest of our user base. Moreover, considering we had trouble getting German and Swedish users on board, the situation is just as likely to get harder as Brexit looms over our heads.
Lesson: If you opt for crowdfunding and have a large user base outside the UK, be sure to check, double-check and triple-check exactly how your international users can get on board, if at all.
Another reason we choose crowdfunding was that despite the high fees charged by the platforms (nearing 10% when tallied up), it appeared to offer us a better deal. The market seemed to offer higher valuations. The crowdfunding companies promised introductions to exciting investors. The platforms said they would make everything easier than raising money privately. “How will you ever raise money from a crowd without us, they’ll say”!
In reality, I’ve found it so much easier to conduct our private investment. We did have to pay a solicitor upfront to draft up some documents and consult with us, but it has been easier than preparing for the crowdfunding platforms. In the UK, the crowdfunding platforms are FCA regulated; which protects people from “financial promotions”. This adds a lot of overhead and makes things harder and longer than they should be. The crowdfunding companies also work pretty slowly, drawing things out for a long time.
If you think you won’t find investor introductions without the platforms, think again! Our most promising investor leads, U.S. and U.K. based, were already part of our mailing list. Consider that perhaps there are other ways to get these same introductions.
Lesson: Hiring your own solicitor and dealing directly with a few angels, may be a more cost and time effective option to raise finance for your business. Crowdfunding takes more time and effort than it initially appears or promises.
We also saw crowdfunding as an exercise in marketing and branding. Let’s make some noise, and more people will find out about us! We spent a considerable chunk of our bootstrapped revenue on this, but in the end, we think it was worth it. In particular, our London events worked out really well. We promoted them via our mailing list and more than a few people joined us. New chess book authors partnered with us. We got invited to present at chess events. I even got a chance to once again appear on the BBC! It was thanks to these efforts that we met some of our private investors who will soon be part of Chessable. There must be some magic to meeting prospective investors in person, rather than having your first interactions with them online. In the end, this became the most important reason of them all.
Lesson: The marketing and branding you can get out of crowdfunding can be very successful. However, do not underestimate its price and how much time and energy it will take. We’ve met companies that have spent £5k just on their crowdfunding video. As a young start-up, you may be surprised by how quickly all the fees add up.
Certainly, if in the future I am ever considering the issue of crowdfunding again, it would be a good idea to consider other financing options in a bit more detail. But if I were to crowdfund again (and due to the marketing and branding, I would!), why would I opt for Crowdcube instead of Seedrs? Here is why:
Key Takeaway #1: Crowdcube’s algorithm is transparent, Seedrs offers you a black box.
Let’s cut to the chase. The big one. To get investment you need introductions to investors. To get introductions to investors via the crowdfunding platforms there is only one way. You need to rank above-the-fold on the platform’s main investment opportunities page. Just like in Google search results, the top three results get all the clicks; the rest is left forgotten. The platforms may not admit it, but it’s not too hard to come to this conclusion yourself.
In one week with Crowdcube, we received ten times the number of introductions than we did via Seedrs. On Crowdcube every single investment gives you exposure at the top of their page. Being at the top of the page leads to further introductions and further investments. Social proof, it’s basic human psychology! In contrast, Seedrs maintains a secret sauce for their top rankings. Raise more money they said, and you’ll get there. The truth was, even a £5,000 investment was not enough for page one! What’s my motivation to get another £5k investor on board if it will lead to no introductions? On Crowdcube, a £10 investment is sufficient.
Lesson: Crowdcube offers a clear strategy for you to follow. Watch the Seedrs and Crowdcube homepage before making your choice. See if you understand their success metrics. What do you need to do to get above-the-fold exposure? Don’t take my word for it, and definitely don’t just assume a good investment opportunity will rise to the top by itself.
Key Takeaway #2: Crowdcube offers more guidance and support through the entire process.
Even if you think you don’t need it, it is good to know that it’s there. During my entire interaction with Seedrs, I heard a real person’s voice once. This was when I was chasing Seedrs down and had to call them to get a major issue fixed on launch day. In contrast, simply to get an application in with Crowdcube, I spent at least two hours on the phone with real people who showed an interest in what we do. Ivan, who would become our campaign manager, researched our business and asked critical and important questions that you rather answer before investors ask them! Mike, their marketing guy, helped us with some of our best marketing and branding ideas. It was awesome to have a real partner in our funding efforts.
Many other little things help Crowdcube have the edge over Seedrs. For instance, the actual interface and web platform used to create your campaign, their support documentation, investor rewards, and more. However, since Seedrs may very well evolve and improve I will leave you with the details only on the key takeaways. Certainly, if Seedrs became a more transparent platform, things would change. However, until they do, at the very least I hope I have encouraged you to scrutinise this choice with a bit more care before making such an important decision. Good luck!
It has been an incredible year. Before it comes to an end, I wanted to send our best wishes and biggest thanks out to all of you.
Your support and feedback have made all of what we’ve achieved possible. We look forward to seeing you in the new year, and for now, please enjoy your holidays very much.
Some of you (we can see who you are!) are still logging in and working on strengthening your synapses. (This is a somewhat cool way of saying strengthening your memories). If you are one of us peeking onto Chessable, I wanted to offer you a brief year in review:
In 10 months, we’ve reached over 13,000 registrations.
We’ve gone from 0 to 2,200,000 chess positions studied.
We’ve increased the books in our store from a single International Master (who we all love); to several masters. Our authors now include some of the word’s best Grandmasters. We now cover many of the most popular chess openings.
We’ve added many many features that you can opt-in or out from. In this manner, you can personalise Chessable to suit your individual learning needs.
We have some incredibly exciting developments in the works for the new year that we know you will love. As a quick hint or sneak preview, I will just say that I personally need to break the 2,000 barrier! I need to work beyond the opening to do so. This requires some new tools and last I checked; no one else has yet built what is necessary. That’s where we come in!
Lastly, some of you may be wondering about our crowdfunding. If you had supported us on our campaign, I have already sent you a personal note via e-mail. However, if you weren’t able to, I just want to let you know that we did not reach our funding target, mainly because despite trying, we could not get our US members on board. We did, however, make the most out of the process. Our campaign has helped us strengthen our brand and has influenced our achievement of significant milestones. We also have this super cool video to show for it: https://goo.gl/wJqv3S. I plan to write more about the crowdfunding next year.
Meanwhile, while the lack of funding slows things down a bit (e.g.,. iOS app), we are nonetheless confident of successfully achieving our next milestones. After all, learning doesn’t have to be hard 🙂
As part of Chessable’s Crowdcube crowdfunding campaign, this week we put on a couple of events. The first one saw co-founder, IM John Bartholomew play against 25 opponents in a timed simultaneous exhibition. John put on a fine performance in his first ever simul outside the US and finished with a score of 17.5 to 7.5. The field of players was lucky to score some points, as John struggled to keep up on the clock against so many opponents, and I as part of them, will have to admit, we all played the clock!
The next day we organised an event so people could meet us and play some chess. We also talked about chess as an industry, Chessable as a business and a potential investment opportunity. It was awesome to meet everyone who came along and get such high quality feedback; of course, it was also a great and fun evening and someone even managed to beat John!
A big thanks to everyone who came to both events, and a special thanks to the Battersea Chess Club for organising such a wonderful simul. If you would like to find more information about our crowdfunding campaign, please click here.
I’ve meant to write this blog post for a couple of weeks now, but things at Chessable have been very busy (good busy!) Many of you may be aware that we launched a crowdfunding campaign at the beginning of this month. Some of you may also know that it was promptly taken down. If you invested non-anonymously I got in touch explaining the situation. I also promised to reveal more detail about the decision in the blog. This is the first of two posts that aim to do so. Due to time constraints, I’ll save the details for Part II. I expect Part II to be very useful to anyone asking the following question: For my UK based startup, should I crowdfund with Seedrs or Crowdcube?
This is the question Chessable faced around July this year. After conducting research to attempt to answer it, we decided that both platforms are just as good. It was 50/50. At this point, Seedrs just edged out Crowdcube because we thought that the “nominee” structure was a nice little perk for investors. While that remains true, it only took one day of being “live” on Seedrs for us to realise that we made the wrong choice.
The next few days would confirm this realisation. For reasons to be explained in Part II, this led to an in-depth conversation with Seedrs and with Crowdcube. It rapidly became apparent that Crowdcube is not only the right choice, but is the only choice for a crowdfunding campaign like ours.
We worked hard to be able to swap crowdfunding platforms, and we were able to do so successfully and very quickly. At this point, it’s worth noting that only 2% of campaigns that apply are approved to go live on Crowdcube. I am happy to announce we are one of fifty campaigns that will launch with the largest UK crowdfunding platform.
Dropping Seedrs for Crowdcube was not a decision taken lightly. We invested a lot of effort to be listed there, and many of you took your time to support our campaign. We also appeared on the BBC during this time, meaning that leaving Seedrs would be seen as a huge sunk cost. Since Chessable is still a bootstrapping startup, our resources are extremely limited. Time is always of the essence. Therefore, I am leaving the details out for the time being and will share my full experience once we conclude the Crowdcube campaign. This new campaign is our primary goal and is set to launch mid-November. I will be able to offer a detailed comparison between both platforms, one of the few (or the only?) crowdfunding campaign that can do so.
To conclude, I’d like to say that on Crowdcube we will be able to give back more to our supporters and investors. When we launch we will have a nice little surprise in store. We think you will love it. The Crowdcube “Reward” structure allows for this, and I look forward to telling you more about this soon. Of course, in the meantime, Chessable continues to grow as measured by all metrics. This is exciting because we really have just begun!
Yesterday was the deadline day for the submission of my dissertation. For the last twelve months, I have been studying for a Master’s degree in the Psychology of Education at the University of Bristol. Together with John, I’ve also been working on our bootstrap startup, Chessable.
I considered the split of my time to be full-time degree, part-time startup. It eventually turned out to be more like full-time degree, full-time startup and time scraps for everything else. This arrangement wasn’t ideal, and despite my personal dislike of multi-tasking, this particular time, the juggling paid off. After all, science suggests that multi-tasking kills productivity and leads to worsened performance. Multi-tasking is an illusion. Our brains were not made for it.
While I am happy that the multi-tasking worked out, I am also ecstatic that I can finally focus on Chessable with no distractions. After all, I’ve built an idea bank so large that perhaps we should finally start building some of them! If you are interested in making the most out of your multi-tasking efforts or find out a bit more about the Chessable story, read on to see how I made this all work. It worked out so well, in ways I couldn’t even begin to imagine when I began this journey a year ago.
The Bootstrap Startup: Chessable
Failure rates for new startups are reported to be between 50% and 90%. Getting a new startup off the ground is not easy. With such a high chance of failure, why would anyone in their right mind choose to multi-task such a venture? That’s a valid question. Perhaps if I sat down and rationally thought about how hard it was going to be beforehand, I would not have made that choice. Working Christmas break, working holidays and working weekends. Doing this while maintaining some work-life balance isn’t as much fun as it is made out to be in the movies about entrepreneurs. So why did I do it?
Chessable was first made as a tool for personal use only. However, after friends asked about it and used it, I realised that it had potential above and beyond what I used it for. When this realisation happened, I was already involved in a one-year full-time Master’s. I had already quit prestigious UCL in 2008 when my previous startup’s growth rocketed, I wasn’t ready to do so again.
Of course, my entrepreneurial drive was not to be ignored. It could not simply be put on hold for a whole year while I finished the degree. After all, I had recently had a long break where I tested out a couple of product ideas and recovered my energy. I had enough rest. Chessable definitely couldn’t wait. I had to find a way to make the most out of both the Master’s degree and startup life, at the same time.
Next, I improved the tool to make it slightly more presentable and started seeking a co-founder. I knew from experience that to bootstrap a startup on your own, while achievable, would be tough, even more so while studying. A co-founder was mandatory, and International Chess Master John Bartholomew jumped on board.
When John joined, the tool was already working. It was already validated to an extent as I impressively demonstrated a 20 move chess “Sicilian Najdorf” sequence to him. However, after a few calls and a productive meeting in person, we realised that with a few changes we could not only have an amazing tool on our hands, but change chess learning for the better! All the extra work would be worth it. Chessable was incorporated, and we officially became a bootstrap startup.
The Degree: MSc Psychology of Education (BPS)
Psychology of Education is the perfect degree for me. I’ve always had a passion for discovery, learning and teaching. I think we all do, but some of us may lose it due to unfortunate encounters with bad teachers. I know I had my share of them. Philosophically, I believe all human beings, with the right support around them, are all capable of achieving more than we can dream of. I am always thinking of the likes of Elon Musk and his goal to die on Mars, and not upon landing! I refuse to listen to nay-sayers who believe certain stumbling blocks or disadvantages are insurmountable. Perhaps some may prove to be. However, as a humanistic psychologist, I focus on the stumbling blocks that can be overcome.
Because of this philosophy, I harbour a dislike for theories that prove why something can’t be done. I don’t waste time on theories that explain why someone had no choice but to fail. It’s in the genes some would say, okay, but what are you going to do about it now? How are you going to help the person asking for your help today? If you tell this person they lack an essential gene, he or she won’t be around in 1,000 years when surgically modifying the epigenome is possible. Their life is happening now. So let’s find a way to help them as soon as possible.
In this manner, I have already found ways of helping a few people achieve things they never thought could be possible for them. I am also extremely happy to hear from Chessable users, who through their dedication, have used the tools we’ve built to achieve their dreams. Some of our users even push the limits of what can currently be done with our tools to invent new ways of applying them to their learning. Shortly, we will work to make sure these new ways of using our system are fully optimised.
While these beliefs and passion for learning have always been with me, by completing the Master’s degree, I built an in-depth understanding of these topics. I was able to tailor most of my reading and writing degree requirements exactly to my interests. Most of my readings had to do with expertise, expert performance, learning, chess, motivation and related topics. Such relevance to my professional goals and Chessable’s mission made it easy to find the drive and time to complete coursework.
How Chessable and The Degree Blended
It is already apparent that I always found a way to combine both things, but how exactly? I will give a few examples. For instance, what I was doing with Chessable, informed my direction of study at multiple points. For my essays in Cognition and Neuroscience, I researched the science of pattern-recognition and enquired into how experts differ from novices in Chess. More importantly, my dissertation was titled “Can implicit theories of intelligence and chess, together with deliberate practice, improve our understanding of expertise and expert performance?” Because of this, my research even took place at a chess tournament. In this and many other ways, Chessable and startup life were always at the heart of what I did during my studies.
On the other hand, the Master’s degree has been and will continue to be at the heart of what we do at Chessable. All my other readings in Psychology, Education, and Neuroscience complemented the work I do at Chessable. All my readings, not only the relevant ones, were done while keeping Chessable and our mission in mind. By approaching the degree in such a manner, a constant stream of ideas on how to apply science in novel ways emerged. I’ve got a long list of notes about interesting, well-evidenced theories that could benefit learners, not only in chess but other areas of education as well.
My background in technology and computer science allows me to see how science, learning, games, and technology can blend in new and innovative ways. This is incredibly exciting going forward, as we build new features that may prove groundbreaking. Of course, other tangible benefits include ideas for blog posts, as well as a solid understanding of the relevant science that is out there. For instance, a team of researchers recently presented chess in an extremely harsh way, with insufficient evidence, and without peer-review. Their study got a lot of attention from the press and I felt was harmful to the game. Before the Master’s degree I’d probably respect the authors view on the data, but today I am happy to read it and review their work for accuracy. I was able to stand up for chess and present the report for what it really was, actually, a very positive finding.
What About The Downsides?
Of course, there were the downsides. I already spoke about the countless hours put in and missed holidays, but that was minor. A supporting and understanding life partner, a family and good friends are all essential for making it work. However, bootstrapping the startup in such a way means there were other constraints and downsides.
John and I purposefully limited marketing because we simply could not keep up with the work to be done while multi-tasking. A startup should be grown when you’ve optimised your key performance indicators and maximised the value for both the company and the users. When a user tries your product once, and decides they don’t like it, it is much harder to get them to give it a second go. Because of this, you have to be ready before heavily marketing your product. We are almost there now.
Usually to achieve this readiness sooner, after the first month of product validation you would immediately seek a round of investment. While we’ve been building up for that for the last few months, perhaps without the multi-tasking, it could have been achieved faster. By the way, did I mention that raising investment is often considered a full-time job on its own?
The result of our controlled growth and multi-tasking may be some frustrated users, whose thirst for new content and features has not yet been quenched. Admitting that you have customers waiting to spend money and being unable to, is not a good thing. This is when an opportunity for a competitor presents itself. Fortunately, even at a slow, two-man part-time pace, we’ve remained at the forefront of our market and ahead of any competitors. Now that I am working full time on Chessable, we are confident of making up for any time lost.
So What’s Next?
This controlled growth has also had an upside, as we are now sure our idea has been thoroughly validated, with solid revenue and numbers. Such validation justifies a further investment of time and money. Of course, while I’ve talked about slow growth, I don’t want to understate our achievements, as many startups can’t even get to 100 users, let alone over 9,000. If we achieved this with the brake pressed down, I am more than excited for the possibilities coming up.
This month, we are taking the brakes off. We’ve already begun assembling an all-star team, and Chessable, chess learning and maybe even education in general will greatly benefit. With the publishing of this blog post, I am also happy to announce we will soon be raising our first round of investment via crowdfunding. This is the result of months of preparation, writing business plans, completing governmental admin, refining forecasts, and attending meetings. Because of our ground work, we already have up to £12,250 committed before even launching our campaign. Time to make chess learning even easier. Stay tuned!
PS.- As a small token of our gratitude, every single Chessable member before #10,000 will get a very nice and cool “Early Adopter” badge. There is still time to get one. Make sure you get yours. Sign up today.
Welcome to the brand new Chessable blog. Here we will aim to talk about a variety of things. Of course, at the very heart of the blog, we will have chess, chess opening theory as well as discuss science as applied to chess.
We will also have other things. For instance, there will be start-up life posts (or rants). There will be Chessable update posts guiding you through new features, and in general, we will be open to any topic as long as we think someone in our audience may find it useful. Do use the category filters to find what interests you!
This first blog post is a start-up life discussion one, about interns and volunteers. More accurately, this is a thanks to the Chessable volunteers who donate some of their spare time to contribute to Chessable wherever they can. By doing this, they not only contribute to the development of a service you love but also help motivate and drive the rest of the team, especially on the days where things can be a bit slow!
It’s always nice to have another team member to discuss things with or bounce ideas off, even if it’s a volunteer! So thank you Kurt (who helped inspire work on some main Chessable functionality), thank you Frank (helped me finally make time to setup and blog on Chessable!). Thank you Simon (for the constant stream of CSS fixes) and thank you, Louisa, for the lovely artwork you’ve made for us. Thanks to anyone else who has contributed to a smaller scale but I have not personally mentioned, this includes all the Trello bug reports (Artem Dragunov has been especially prolific there)! This whole community effort is amazing, and inspiring, so thanks, everyone.
Let this blog post also serve as a testament to a good relationship between interns/volunteers and companies. I often hear sad stories where it is a one-sided relationship, but throughout my start-up career I’ve always strived to make sure we give back to the people who volunteer. Previously, at Sharkius Games, we made sure our volunteers would develop their skills by interacting with the experienced team members on a regular basis. We would encourage and advise them. Very often, this kind of unpaid volunteer or internship position also resulted in a permanent job (if possible) either at our start-up or elsewhere. Here at Chessable, we are maintaining the same philosophy. Wherever possible, we aim to give back to anyone who kindly helps us, in any way we are able to.
Do you think you can help Chessable in any way? Do you have some spare time? We would love to hear from you via the contact us form! As a last note, we can’t always take all volunteer offers as often your skillset may not fit into our current priorities and because it is a two-way relationship, we may not be able to take you on, but our biggest thanks goes out to you also, thank you anyway! 🙂