How Amberdata CEO Tongtong Gong grew to $11.6M revenue and 100 customers in 2024.

hello everyone my guest today is sean douglas he's the ceo of amber data and has spent the last 20 years of successfully funding building and buying and selling technology companies he's held roles as board member operating executive technology advisor and investor and a graduate of harvard business school now work on amber data which is a blockchain and crypto market data company sean you ready to take us to the top absolutely i'm a pleasure to be here thank you all right so so couple rapid fire questions here just to set context um did you fund the company with a token issuance or did you raise traditional equity no we're a traditional venture back company uh hummer winblad hwbp backed us about 19 months ago okay very cool so how much total capital the company to date uh we've got a little over three million dollars raised and we're in the process of raising our series a and why did you decide to go that route versus doing a token issuance um at that time with my network and access to capital it seemed like it was the appropriate path given that we want to focus on enterprise customers and access to traditional financial institutions i didn't want to have regulatory risk be an impediment to us uh selling into the largest companies on the planet for access to blockchain crypto data how do you argue with the or how do you kind of counter the art you know the hypocritical argument of hey like you're on you're on blockchain you should be doing token issues to fun that's the whole purpose of it well um i am obviously a huge believer in tokenization if you think about today um if like myself or any other silicon valley venture back company there's only two paths to to an exit that's you go you know public on new york stock exchange or you go public on nasdaq and that's a walled garden with a limited number of u.s citizens we're watching and provide instrumentation on people going and taking their companies effectively public on crypto and be trading across 250 exchanges in 57 jurisdictions in seven months so you know at some point in the future that might be something we do today we're venture backed there's a couple folks though that i can cite that have come on the show that you know took i'll say more than 10 million bucks personally where essentially there's a successful token issuance uh you can argue you know the logistics and legalities of all that but essentially converted 80 90 of the issuance to fiat and then there was a nice dividend payout to the operating team both salaries and also to build the growth of the company now i would argue hard against that for a lot of reasons but they would say that was their ipo um how would kind of obviously i know where you stand in terms of that you chose the other route but how what are your thoughts when you hear someone takes 80 of the launch to fiat um i mean depends when you did it right timing's everything on that if you did at the end of uh 2017 then you you probably did the right thing if you know if you did it today i'd probably hold everything in crypto or a large chunk of it crypto i'm very very bullish right now on on crypto in general yeah all right let's focus more on you here so so what does amber data do and how what's your revenue model is it like sas play or what yeah so we are a sas business so we amber data is a blockchain and crypto data platform um we monetize by providing apis for other people to build on so you think about the value chain across any mature ecosystem for crypto that is developers write tokens create projects investors fund those projects exchanges list those projects liquidity providers and market makers provide liquidity on those retail investors and consumers use those products the lifeblood across that entire value chain is data we are a data provider that allows people to build trading applications identify opportunities mitigate risk answer regulators questions right to chain read from chain across any blockchain okay and give me a general sense on average what are companies paying for access to your tech so we have three tiers of pricing a free developer tier um which people you know we've got 50 000 plus users right now uh doing that we have a professional tier which allows people to get access to blockchain data and market price data in a single api that's a thousand dollars a month then we have a pay as you pay as you go tier which you pay for what you use and then there's obviously an enterprise tier if you want anomaly detection if you want monitoring if you want alerting you want something custom uh that's you know who knows um it depends on what exactly we're helping you do you also have an upsell about pricing xe's based off just like a number of api calls over a period yeah yeah so it scales based on consumption the developer tier is three calls per second the professional tier is 15 calls per second enterprising is higher than that i think it's unlimited um go ahead and so when you look at just your paid tiers so ignore the 50 000 kind of developer tiers maxing out at three per second um just to avoid going down every customer court what would you would you say a thousand bucks a month is a fair average across those paid cohorts or is it more like 5 10 20 grand a month no no it's a thousand bucks a month right now like we've just launched the paid api about seven weeks ago um so it's still early days we've had hundreds of sign ups uh for the the paid tiers now so you know we're on a path but i wouldn't say i know entirely where this all ends um we do believe what's the starting point i was gonna say what's the starting point on this thing when do you write the first line of code uh we've been developing this for 19 months okay so call it maybe early 20 late 2017 early 2018. right we formed the company in september 2017. and how much total kind of did you sing into the mvp before your first dollar of revenue uh well i mean we've evolved the business pretty significantly has not been a straight line so what we initially set out to build was a splunk app dynamics mix panel for blockchain to enable transparency and trust in web3d web3 applications what we found was once we built that what everybody cared about was trading so our customers asked us for the api and once we launched that api we had just groundswell of adoption we launched that actual paid api incorporating blockchain data and market data seven weeks ago eight weeks ago so but if you just go back i mean obviously a company's always pivoting and changing and accelerating if you just go back when was your first dollar revenue um well we just started collecting revenue or you know earlier this year so you know january 20th yeah that's that's my question right so over the first year over the first 12 11 13 months ish how much total did you sink into the capital you know in other words if the thing never made money how much money you're gonna lose yeah so we've we've have about a little over three million dollars invested in the company right now okay that's not already deployed and spent that is well deployed and spent yes okay we've got you know we've obviously have cash in the bank right now but we've raised a little over three million dollars this is all available in crunchbase yeah anybody can see that well no i mean well the mvp stuff isn't right so that's why i ask these questions right so i mean why is it that i mean that seems ridiculously expensive to build an mvp especially pre-revenue um actually that's not and it's not for what we do what we do is really hard and that's creates the moat um to many what's the moat though sean we don't understand what the mode is what's the mode yeah i'm happy to share with that but many companies before they raise a series a on average if you look at stats in silicon valley most people raise five to six million dollars before they ever actually get to a series a and have revenue so we're very very capitaly efficient what we built now why is what we do hard well sean sorry i have to counter that point though i mean i i've interviewed over 3000 b2b ceos i asked them all that exact same question now you cite silicon valley that is a very specific um non-rational too much money in the ecosystem harvard business school stanford graduate mindset i can tell you looking at the data from the three thousand cessions i've interviewed three million is in the top three percent percentile in terms of dollars into a comp a platform before a first dollar of revenue so i was just there was an article on crunchbase last week that's where i got that number um and that was across i think 5000 companies that they were talking about so maybe i'm you know that's not my business my business is blockchain and crypto data so you know rather than me making up numbers and quoting things out of crunchbase maybe i'll stick to my numbers no no i mean look i am first off crunchbase is essentially the engine that fuels tech crunch which which has to perpetuate the idea that vc funding is the way to go right this is the tech crunch is in the vc pocket because if the vc model is out of flavor and people realize the effects of dilution right all of a sudden you're using venture debt and other forms of capital raising that does not require dilution so they are that is funded by vcs to solve a purpose and marketing message my only thing is i prefer companies that figure out creative ways to get dollars on day one selling an idea and prepayments then use the capital from customers to build that's obviously a way less dilutive way to build a company that is the way to do it right anybody that can do that without taking on multiple rounds of diluted capital um and building what the customers are going to use today absolutely what we do is actually very very hard and requires a significant capital investment which does create a moat so we basically ingest any blockchain data so today we support ethereum aeon stellar bitcoin litecoin we have a long list of other blockchain data that we support we and then we also connect to you know the top crypto exchanges across the world and pull that data in so to have a data ingestion pipeline that collects indexes stores serves and processes both blockchain and market data from global networks and then stores that relational time series graph you know index search and then puts apis on top of that that's a major major major infrastructure to be able to do that and it's really hard and our team has 15 20 years experience building data driven what's the team look like today how many people so we're under 10 people today um the composition of the team is myself uh i think he gave my background hong kong my co-founder she came from axiom uh built and run data businesses there very very strong engineering as well as uh business background uh we have scott bigelow who's our vp of engineering he was one of the authors of the auger uh smart contract uh as well as uh was on the data engineering and devops team at new relic so it's a big data platform jonas has been all our cto super solid guy very very deep experience and distributed computing big data analytics scale out type stuff so it's it's datum ninja meets enterprise scale yeah so when i hear all this what i hear all this i hear i hear i hear expensive um but also people are your biggest asset right so there's long term obviously upside how aggressive are you being obviously you raise capital so you can afford to burn but are you talking like a hundred grand a month burn or like 500 a month burn i mean yeah i don't disclose what our monthly burn is but it's it's can it's fairly conservative for the size of our team we're very very capably efficient well again i guess maybe don't talk about you specifically but what do you mean capital efficient how in other words you have seen averages or metrics and you're saying okay we're about average right so my audience might not know what average burn is right so what do you feel like is capital efficient um so for the size of the team the reach the number of users and the infrastructure that we built and how we operate we have given sig we've created a tremendous amount of value for the investment that we've taken that's what i mean okay how does that relate back to burn though um for a company without our experience building what we've built they would probably have to spend two to three times the amount on infrastructure and operating expenses because that we know how to do what we're doing that's it that's a very very defensible yeah for example the last company that um icto my co-founder we're at we ingested four terabytes a day of social media graph data did real-time analytics and attribution ran about a billion dollars of advertising spend on that platform to be able to take the learning there and apply that to hitting the ground running and all of a sudden ingesting all blockchain data and all market data we have an edge that other people if they try to start won't be able to do that so so 2018 and 29 sorry 20 early late 2017 to kind of late 2018 you're building the product building the product you get 50 000 developers using a platform you have some enterprise accounts now how many customers i've actually scaled to today um so we're a lot of the stuff i'm fundraising right now we're not publicly disclosing a lot of information we're a privately held company um we're working with some of the largest brands in crypto and traditional financing sorry i'm just i'm just generally are we there are different sales motions relative to different targets right so i'm just talking are you talking a handful five customers enterprise deals are you talking like five thousand accounts that are more in mid-market yeah yeah so we're we work with maybe you know 10 or 15 of the largest crypto exchanges today we work with folks like jp morgan we folk work with folks like symphony we work with folks um on the on the crypto project side uh we've people are building analytics and we work with market makers and liquidity providers but in the hundreds not in the thousands go wait hold on so wait what's different you said you just worked with tens of exchanges and then and then named a few and then you said hundreds so hold on the exchanges are not your customers correct those are just your integrations no they no they are our customers okay so again are you talking ten or hundreds so there's not hundreds of there is hundreds of exchanges we are working we are currently working with about 15 exchanges today yeah and they pay you and then you have another caller 100 a mixture of business development pay us data exchange and partnership it's it's you know there's a pretty large uh spectrum with given that we've launched our apis less than two months ago i don't have a we have you know top you know here's five marquee customers yeah sean sorry that's not that's not what i'm asking i'm still confused though so you just said you're working with 15-ish exchanges and then you said hundreds of customers i'm trying to understand the delta between if the who else are your customers besides the exchanges if you have hundreds of paying customers yeah absolutely so if you look at um people using our apis for example there's we've worked with omisego which is a very large crypto project we give them insight and access to who are their token holders what you know who who held the tokens for how long what's the utilization etc they can answer questions from auditors or what have you um we have many many many developers that are ramping up right now whether they be trading platforms liquidity providers you know token projects um people trying to respond to regulators or pay their taxes or identify opportunities for trading or what's the utilization of my token for example cryptokitties has used our platform and our apis for hey um of my top token holders how many people hold their crypto kitty or are they trading it or how long do they hold other tokens they hold yeah yep sure okay that's helpful to understand that's great okay and then so you mentioned you brought in three you're you've driven some growth on that you feel like you've done it pretty capital efficiently based off the backgrounds and what you've grown to so far why is now the right time to raise additional capital both at a macro level and specific to your company yeah so at a macro level right now if you think about this is actually really profound if you think about the internet's 22 years old according to mary meeker's report that she just has done 51 of the world has access to internet today so if you think about if 51 of the world has access to to high-speed internet the num the number of people that will have access to crypto and digital assets in the next four to five years should be a massive massive number so we're going to see the adoption of crypto and digital assets and the availability of that on a global scale this will be a multi-trillion dollar market that's going to disrupt traditional finance channels and so we think that in order to go seize that opportunity you need to fund that from a business development sales and marketing and engineering and support perspective so to go define this category and take that hill that requires capital so we're raising now because of the timing because of where we are because the boat we've built from a technology differentiation and competitive posture right now is the right time and and i mean obviously you're still negotiating this and it's always changing but what's the right amount to raise in your opinion are you talking like four or five or more like 10 20 kind of range yeah i mean you're always looking to raise you know 18 to 24 months of capital the details of the race are very much in negotiation right now and i don't really want to shoot myself ignore your own then right talk about space in general right you've raised three million you're doing a series a right i mean what would what do you feel like a range might be in terms of an appropriate amount for you to bring it at this stage i i think that the normal range for series a investments in in silicon valley is the you know seven to 15 yeah range right now i think that's that's crunch space you can probably look that up um i think that's appropriate it'd be foolish to to do a race three yeah well i mean unless you feel like again you're raised seven you take double dilution right like that's what by the way is what drives me crazy about every entrepreneur i talk to from san francisco raise as much money as fast as you can they care no they care very little about like delusion it's more just about like get the headline get listed in crunch base keep telling the story and it's self perfection and then and then every ceo every ceo then goes public as a publicly traded sas company right on average last 24 ipos they own less than six percent of the company i mean it's insane right so i mean i don't know you can agree or not agree but those are the numbers yeah so you know it all depends the amount you raise versus the amount you sell and the amount of dilution you take and how you structure that and how you fund that but if you um if you're raising that's the market is in that range so how much you give up it's pretty formulaic as well but you're you're creating value and you're using that those funds to build a 10 20 30 50 x business then it's it's a cost of capital um you need to you know in order to raise money you're gonna have to give up some of your it's gonna cause you dilution right unless you raise from your customers right by the way the most successful companies today don't follow that standard process you just articulated right notion just raised 10 million dollar angel round at a 800 million dollar valuation that is by no means standard and they're doing it the right way i mean again that's phenomenal yeah by the way like every anomaly is like this right and so i try to understand why anomalies work so listen just to wrap up because we're out of time here right so um you build the company i feel like you've been efficient to date uh you've burned through kind of a three million to obviously get to where you are today hoping to raise now your seed oh sorry series a um you've got over 100 customers paying north of a grand a month so you're north of 100 grand a month right now in revenue correct you're on path to 100 a month or you're past 100 a month on a path to 100 a month do you think you reach that this year or that have to take till next year yeah i mean i am not really comfortable going into the the details of the financials and uh yeah sean sorry i'm only questioning about numbers you gave me you said more than a hundred customers and i'm looking at the transcript here it does real time you said a thousand dollar rpoo a thousand times a hundred is a hundred grand a month so if that's not accurate what's wrong is it a lower rpo or less customers so we are we've launched our apis seven weeks ago we have an evaluation period for people that are that they sign up so i don't want to misrepresent that i've got hard numbers right now on some of this you know so we are very early in our ramp we have a lot of success we've had a lot of sign ups but i don't want to be quoted that i'm pulling down a you know 100k rpoo that is some of this might be in flight so no sean that's not what you said by the way i'm only bringing this up because i want to make sure you have the chance to correct it if it's not accurate i'm reading here the transcript you said a thousand dollar rpoo earlier which is again arpu's average revenue per user per month and you said over 100 customers if i multiply you the numbers you gave me that's 100 grand i just want to make sure so the clarification you're adding now is you don't feel like arpu is at a grand it's probably it's fluctuating because you're going through some different onboarding tactics that is correct okay i just want to clear that up for your own sake yeah yeah absolutely okay cool and then grow and then when you look at in terms of you know you know growth rate past this point the channel the last thing i want to touch on you've done a great job getting 50 000 developers to use your platform that's not easy what channel have you used to do that you know largely it's been we've have been speaking about data and access to data at a lot of the industry conferences we've developed a pretty large following on our mailing list people have subscribed we've done some early drip campaigns targeting you know different uh crypto institutional investors and exchanges and market makers and projects and what have you so it's been pretty scrappy we have a very very small team so you know it's it's been very very uh you know um we don't have a big team doing marketing right you know are these people by the way are people sticking once they start paying have you lost any customers that were paying previously or no no it's been pretty sticky it's still very early days like i said but it's been pretty sticky we have not had a lot of turn um people we've got a lot of engagement we've got a lot of new feature requests and we've had it's been overwhelming the amount of questions that people are engaging us on i mean we have a pretty small team right so um it's it's been exciting yeah well look i i hope the raise goes again the math i can't help but do is again let's say you're at 1.2 right and in arr right and you're trying to raise 7 to 15 on a if you're only one to sell industry average of 20 of the company you're gonna have to tell a remarkable story of a valuation in the 50 or 60 million pre-money range which to me is insane ridiculous ludicrous uh frothy market and dilution frankly that you don't want to take because you then have to go catch up to that to avoid it down around the round after that um that's why i talk about capital efficiency and i go 3 million on mvps actually for the rare revenue you're currently doing is actually not that efficient uh you know i i you you can say that but you don't know what we've built and the complexity of the problem in the world the market would pay for it though you're right i don't have that expertise at all i know nothing about your backgrounds i know nothing about the lines of code but the ultimate indicator is revenue growth right and you're less than 1.2 million in ar right now despite burning three million and wanting to raise seven to 15 on you know sell 20 30 of the company that's the only metrics i'm going off of great all right let's wrap up with the famous five number one what's your favorite business book um i don't know do you have do you read business books or you don't really i no i'm a very active reader i just stopped something i had nothing popped like i'm sorry number two is there a ceo you're following or studying um i'm obviously a big fan of ben horowitz and you know from his being an entrepreneur through being a vc to being an industry model number three what's your favorite online tool for building your company i'm a big fan of uh pipedrive right now um they're i think they've done a good job number four how many hours i'll sleep in every night not very much maybe four or five hours is pretty normal all right i've always been that way so yeah that's good look if it's your average it works um and how old are you sean i am in my 40s and your 40s uh and situation married single kiddos uh married with kids oh nice okay last question what do you wish your 20 year old self knew um i think i don't know maybe be more aggressive you know guys amber data again uh serving the crypto market uh specifically with uh data feeds api feeds on again sources that previously haven't been able to bid all unified under one platform now serving about caught 100 customers on track to get up to 100 grand in mrr here uh hopefully the next one or two quarters if they look to raise additional capital spent 3 million bucks so far building the platform they raised again 3 million to date they have a team of 10 folks as they look again to scale 50 000 developers using the platform for free so healthy top of funnel pipeline now focus on converting those folks into a professional tier out of grand a month paid and upselled against kind of number of api calls monitor alerts again on things things of that nature sean thank you so much for taking us to the top thank you so much appreciate it