Executive Summary

In this episode of Startuprad.io, host Joe Menninger interviews Max Koziolek, co-founder of Spectrm. They discuss the importance of making strategic decisions and pivoting in business, sharing insights from Spectrm’s journey. They explore the challenges of seed-stage investments, the benefits of messaging apps for brands, and the impact of AI technology in their industry. Max shares his experiences in politics and media, highlighting the need for quality content distribution. The episode also delves into Spectrm’s successful pivot to targeting brands and their impressive growth from pre-seed to series B, acquiring as pivoted startup clients like Zalando, UberEats, Premier Leauge, HelloFresh, Deichman, Breitling or Ford.

Pivoting and Starting from Scratch: “But if you pivot after the pivot, 2 months later, then you very quickly look clueless about what are you doing? And so I think you have to take time, to, to do that. And, basically, I think the best way to think about this is have to forget almost every, almost everything you knew about the business because you have to start from scratch more or less. That’s how we should approach it.”

— Max Koziolek — Co-Founder Spectrm

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Facebook’s Supportive Call: “Hey, we know what are you doing… Can we have a call at the 28th December? So right between Christmas and New Years… it turns out it was a very good thing… You can use our unofficial API.”

— Max Koziolek — Co-Founder Spectrm

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Pivoting to Solve the Reach Problem: “The main problem we’re solving is that you reach your audience. It’s not about a distribution problem for journalism. That’s, you know, just it’s about a reach problem.”

— Max Koziolek — Co-Founder Spectrm

Questions Discussed in this Interview:

1. How important is strategic decision-making and the ability to pivot in the success of a startup?
2. What challenges did the guest encounter during the validation process of their pivot, and how did they overcome them?
3. In what ways did the guest highlight the importance of effective communication with investors and board members?
4. How can messaging apps help businesses improve customer engagement and increase sales?
5. According to the guest, why is email considered less effective as a communication tool compared to push notifications via messaging apps?
6. What inspired the guest to create a business that addresses the distribution problem in journalism?
7. How did the guest’s experience as an elected city council member contribute to their ability to make an impact in their community?
8. What were the major factors that led the guest’s company to pivot and focus on brands instead of large publishers?
9. How did the guest’s company achieve cash flow positivity and increase revenue during their pivot phase?
10. What role did accelerators and partnerships with large publishers play in the growth and success of the guest’s company?

Startup Success: “It’s true. What we think is true, but we validated. We basically went to the drawing board, and then we tested this with talking to potential customers, but also really just signing new customers and some point then it becomes true. Right? So then you know that this is a real pivot.”

— Max Koziolek — Co-Founder Spectrm

The Video Interview is set to go live on August 24th, 2023

The Audio Interview

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The Founder

Max Koziolek https://www.linkedin.com/in/maxkoziolek/), the guest on this episode of Startuprad.io, is a co-founder of Spectrm, a company that leverages AI-powered messaging to help brands connect with their customers more effectively. With a background in law and politics, Fabian brings a unique perspective to the startup world. He shares his experience of campaigning for public office, competing against Frank Walter Steinmeier. At the time the reigning foreign minister of Germany, now Germany’s president. He also shares his story of pivoting his company and the challenges they faced in finding their niche in the market, that was large enough to survive and how to communicate this to their investors. Fabian’s determination and strategic thinking allowed Spectrm to not only survive but thrive, securing partnerships with major publishers and leading brands. His passion for AI technology and its potential for the future is evident in his vision for Spectrm’s continued growth and success.

Communicating with Investors: “how do you communicate this to investors? I think you have to come up with a you have to show them the plan. Right? And so it’s it’s not it’s not very ill advised to go to it as soon as I say, I I don’t know. I don’t know if I, you know, wanna do that any further. I don’t know. They believe in you and especially in the seed stage, they they invest in to a large proportion into the founding team.”

— Max Koziolek — Co-Founder Spectrm

The Startup

Spectrm (https://spectrm.io/), is a Potsdam — Berlin Area-based startup, co-founded by Max Koziolek. It has made significant strides in the field of AI-powered messaging for brands. The company has successfully raised multiple rounds of funding, starting from a pre-seed stage all the way to a series B round. This demonstrates the confidence investors have in Spectrm’s innovative approach and their potential for growth.

What sets Spectrm apart is not only their ability to help brands effectively engage, but also to pivot. They started out as a tool for sharing great journalism and realized that their market was not big enough. We take the journey with them to evaluate new options, and communicate the pivot to their investors and how to get them to agree.

Max also shares his experience with their customers by leveraging messaging apps like WhatsApp, Messenger, and more. With a specific focus on solving the problem of reaching audiences, Spectrm’s platform enables brands to have meaningful conversations with their customers, ultimately driving conversions and revenue. Their impressive client portfolio includes renowned publishers such as CNN, Financial Times, and Business Insider, highlighting the trust and confidence their solution has garnered from industry leaders. With their strategic pivot, strong financial traction, and cutting-edge technology, Spectrm has positioned itself as a key player in the increasingly competitive AI messaging space.

“we also changed our pricings, who we That’s always I think market treason is always saying that increased pricing. we did exactly that. We increased, the pricing. also to reflect the the the more work we do for the enterprise customers. And then we charged most of the time upfront. And if you charge upfront, you can become much earlier cash flow positive than you actually you are very you are on par with your revenue. So I think that was for us. I mean, it’s not uncommon to to do that in the in the in the software world. But for us, that was the big difference between, having to have a monthly payment from our customers, which then where the your MRR, your monthly recurring revenue meets your costs, which is much more difficult to achieve versus where you have upfront payment, which uncovers the cost of the of this month’s lot of of the next 2 months. Right? So it’s a huge difference, but that made it possible for us in the end.”

— Max Koziolek — Co-Founder Spectrm

Key Topics

- Importance of making strategic decisions and pivoting in business
- Starting from scratch and thinking everything through is necessary when launching new products or making significant changes
- It took the speaker’s company about 3 months to think through and validate their pivot
- Communicating the plan to investors
- Showing investors a well-thought-out plan is advised
- Being specific about where the board or investors can provide help is important
- Coming to a board meeting without a plan or sounding uncertain can cause panic for everyone involved
- Challenges and benefits of messaging for brands
- Messaging can help solve customer queries and provide information about products
- The majority of questions brands receive on social media are pre-purchase inquiries
- Brands can benefit financially by answering these questions and providing direct links to purchase products
- The effectiveness of messaging apps compared to email
- Email has low engagement and emails are filtered into separate tabs
- Push notifications via messaging apps are more effective as they are not easily turned off and provide interactive user experiences
- Messaging apps allow brands to engage in follow-ups and potentially offer vouchers or other incentives
- The speaker’s experiences and background
- Doubts about being remembered by someone they met
- The speaker’s inspiration to create quality content in journalism
- The speaker’s early political involvement as a city council member and running for national parliament
- The evolution of AI technology
- Working with algorithms to large language models
- Excitement about future advancements in the field
- Validation and success of the company’s pivot
- Going back to the drawing board and validating the business opportunity
- Signing multiple contracts, including a record-breaking one with a well-known brand
- The validation confirms the potential of their product
- Discussion on AI chatbots and the book recommendation
- The speaker’s opinion on chatbots pretending to be human
- Recommendation of the book “The Most Human Human” by Brian Christian
- AI scientists’ competition to convince others that their chatbots are human
- Company success and growth
- Onboarding large publishers like CNN, Financial Times, and Business Insider
- Realization that the market was not big enough and pivot to focus on brands
- Challenges of reaching the audience and the solution for brands
- Revenue generation and growth strategies
- Low run rate at the beginning of the pivot
- Focus on making money to extend runway
- Signing new customers quickly and increasing pricing for enterprise customers
- Cash flow positive and the importance of upfront payments
- The company’s journey with the Next Media Accelerator and expansion
- Going from pre-seed to series B with the help of the accelerator
- Connection with large publishers, including Axel Springer, through the program
- Expansion of the product from WhatsApp to Messenger based on insights from executives at Axel Springer
- Facebook’s interest in the company’s work and their permission to use their unofficial API

The Power of Messaging: “Answering questions, but also helping people to find the right product and saying, no, it’s nice to follow-up if there is a voucher, will there’s something else to take care of?”

— Max Koziolek — Co-Founder Spectrm

Venture Capital

Spectrm is always open to talking to new investors. Just reach out to Max via his LinkedIn profile.

The Ethics of AI in Chatbots: “I think it’s bad design if that’s the case. Right? So, that if you if a chatbot is not or an AI is not revealing that it’s an AI and it’s pretending to be a person, I think that’s in general a bad than bad experience.”

— Max Koziolek — Co-Founder Spectrm

Hiring!

You can learn more about the company that is still hiring here:
https://spectrm.io/careers/

The Evolution of AI and Platform Openings: “On the AI side, I think we saw all the major steps really from working with, and VertuVAC, algorithm then going to general adversarial networks, which we’re really citing. Now we are at large language models. And so that’s really we saw every step in in in that journey. I think the exciting piece is the amount of training that is required.”

— Max Koziolek — Co-Founder Spectrm

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The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. Reach out to him:

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Topics Discussed in this Interview

In this interview, we are talking about

strategic decisions, pivoting, business, starting from scratch, thinking everything through, launch new products, validate pivot, communicate plan to investors, board meeting, panic, seed stage investments, messaging, customer queries, social media, pre-purchase inquiries, financial benefit, direct links, email engagement, filtered tabs, push notifications, messaging apps, follow-ups, vouchers, memory, quality content, journalism, distribution problem, WhatsApp, city council member, positive impact, the national parliament, campaign work, major platforms, AI technology, training models, business opportunity, signing contracts, record-breaking contract, validation, first-time founder, bad design, chatbot, AI scientists, book recommendation, large publishers, market size, revenue growth, cash flow positive, Next Media Accelerator, expansion, Facebook Messenger, unofficial API, rapid growth.