Friday, November 15, 2019
Interview with Dan LeBlanc, CEO and Co-founder, Daasity
San Diego-based Daasity (www.daasity.com) – which just raised $2.3M in a funding led by Orange County's Okapi Venture Capital—is looking to help direct to consumer brands use better data to direct their marketing and other efforts. We spoke with CEO and co-founder Dan LeBlanc, a veteran of ProFlowers and FTD, on how he started the company and he problem the startup is solving for direct to consumer brands.
What does your startup do?
Dan LeBlanc: Daasity is about two years old., founded in summer of 2017. What we have been building, and what we are focused on, is for direct to consumer brands. A lot of those brands, on the e-commerce side, are becoming more data driven. The challenge a lot of those businesses have, is likely have built their sites and are using a lot of different software-as-a-service platforms. Maybe they might be using a platform like Shopify to sell their products and power their website, and they might use Facebook for advertising, and maybe they're using paid search with Google. The challenge is, all of their data is in the cloud, spread across all different systems, and those systems don't talk to each other. That makes it difficult to figure out what it costs to acquire a customer, and what a customer is worth. We are helping to answer those challenging and important questions a business wants to answer. How we do hat, is we've built an analytics platform, Daasity, for data-as-a-service. That platform allows small businesses to use our processes and platform to extract all of that data out of the different SaaS platforms they are using, combine it, and provide some really useful analytics to answer questions and make faster, and better decisions. That way, they're not sitting here trying to do that with spreadsheets, instead, they can use our platform and see exactly what kind of adjustments they need to make to their business.
What's your background, and how did the startup come about?
Dan LeBlanc: I used to run customer analytics for a brand called ProFlowers. The company that owned the brand was Provide Commerce, and the brand was Proflowers, which they owned along with a couple of other brands. They were an almost $750 million dollar ecommerce company focused on the gifting space. The company got acquired by FD in 2014, and over the next two or three years, a lot of people just left the business. FTD, at that time, was trying to move people to Chicago, and was making a lot of adjustments. What we found, is there were lots of people we used to work with who were moving to other organizations, small- to medium-sized, direct-to-consumer brands, and they were really struggling to get the same access to data that they had been used to getting prior. These are really fast growing brands, which were moving quickly, but struggling to answer questions. They came to me, knowing me from personal relationships at ProFlowers, and asked me if I could help them. That was the genesis of figuring out we needed to build this. We started with just a couple of folks, and started to build the platform, and found that we were running into more and more people having the same problem. At the same time, our first platform, Shopify, completely exploded. In 2014, there were a few hundred stores running on Shopify, as the e-commerce market was quite fragmented. Fast forward to 2019, and Shopify now has over a million stores in the world, man of them direct-to-consumer stores. So, it was a combination of us being early trying to solve this problem, and being asked by friends and colleagues for our expertise. Plus, for us, the market was exploding, and we were in the right place and the right time, with the right knowledge, to build and launch this platform.
You mention you have a lot of deployments on Shopify. How supportive is that environment to third party software and partners?
Dan LeBlanc: Shopify loves their partner ecosystem. They are really focused on their core product, and they have an ecosystem where they want other entrepreneurs and other businesses to help their entrepreneurs. Their customers are starting brands, and using their e-commerce platform to really accelerate and grow. Their mindset is that everyone should be an entrepreneur if they want to be, that's their mantra. Because of that, they think of the ecosystem as how do we make sure the ecosystem is there, and the tools and products are out there to enable entrepreneurs to be successful. That's good to have from a partner, and they've been helping us, by giving us access to data and working with usin terms of how we work out the analytics stack for a lot of their brands. They really do have an excitement around anything which makes those brands better, which makes them more valuable to them as a business.
Talk about this recent funding round, how did that come about?
Dan LeBlanc: We spent about the first year and half after we were founded, really developing our product, which we launched at the start of Q1. We found, in a year and a half developing the product in early alpha, that we were definitely ahead of anybody else in the industry. It's not a huge industry, data analytics for Shopify, and not very crowded, but we realized that we were at least eighteen to 24 months ahead of anybody else. So, we decided that if we wanted to try to tackle this as an end-to-end solution, we needed to maintain our competitive edge, and we needed to raise capital to hire staff. We had been doing everything prior to that off our profits, and our ability to accelerate our growth was somewhat limited by how much revenue we were bringing in. So, we started looking in Q2 of this year, and were selected by the San Diego Venture Group as one of their cool companies for 2019, one of their top thirty startups for 2019. That was very helpful, in that it got us on the radar for a lot of Southern California venture capital firms. We spent about six months of road show, and getting people on board with what we were doing and believing in our vision. Fortunately, Okapi, our lead investor, is very aligned in terms of how we think of the opportunity in the space, and from a business perspective, we've been super excited to partner with them and to have them make a large investment in the company.
What has been the biggest challenge for you so far as a startup?
Dan LeBlanc: Initially, the hardest part was making the decision on the right level of funding. Do we want to raise capital? How much? That was the initial, hardest challenge. I'm glad we waited to raise money, but I'm also curious how much further we would have been had we decided to do it earlier. Someone gave me the piece of advice, which said, essentially, 100 percent of zero is zero; and a portion of something greater than zero is greater thatn zero. The point is, if you're going to give up some ownership—and as a founder, you always feel like you don't want to give up equity because it's your baby—but if you wait for too long, at some point that window is going to close. So, the challenge is where do you start looking for funding, and how willing are you to give up equity for capital to really accelerate the business, and if so, when is the right time? That was a huge challenge, but I think having applied to the San Diego Venture Group and being selected as a Cool Caompny really helped us formalize that decision.
So, what are you working now and where are you going next?
Dan LeBlanc: We're super excited about where we're going. The biggest thing the capital is going to allow us to do, is to hire a number of folks to build out the richness of our platform. We are adding more data sources you can pull data from, and we're adding in elements of predictive analytics and other similar capabilities, so we can make recommendations to our customers that these are things you should do. We're now working on lots of things we wanted to be able to do, because we now know we can make the investments on some hugely valuable areas that will pay off in the future, but which before we hadn't been able to do because of the lead time and costs to build those features.
Thanks, and good luck!