How Amberdata CEO Tongtong Gong grew Amberdata 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...