How I Spent My First Million: Texel

Amir Segev is the CEO and co-founder of Texel. Texel offers an engagement platform offering a personalised TV experience — using Texel’s platform, viewers can watch shows remotely from one another but “together,” with options for voice messaging, text messaging and a guarantee that the show is synced up.

To this date, Texel has raised around four million euros in funding. We spoke to Amir about how Texel spent their first million.

Where did your first million come from?

We didn’t raise it all in one go — we raised half a million euros in our pre-seed funding round from a New York-based VC. We then proceeded to raise the other half a million (and two and a half more alongside that) in our seed round, in which we raised money from Cornerstone Venture Partners, Alchimia Investments, Start Capital, 500 Startups and yes, hubraum. Since we are a very experienced team, specific conditions for the funding weren’t really set. From day one, we had board meetings and annual targets.

It’s worth giving a bit of context here. These rounds were finalized at an interesting intersection for the company. Around the time of the seed funding, we understood that we could leverage our technology and by shifting the technology to the cloud, we could extend our service to any kind of media device. We wanted it to be accessible via mobile, TV and computers. This would mean we would be able to reach customers who need our solution today and not within a couple of years (solving today’s pains).

This meant, of course, de-prioritising a few activities, like instead of pursuing the potential VR had for us, simply ensuring the service was available on every possible device. We did all of this while measuring constantly – measuring different variables to evaluate the overall focus of the market – and discussing the market goalposts in monthly meetings. 

800,000€ – Product Development

We hired six very talented developers to work for us during this period.  We made the strategic decision to bring in the most talented people in our domains, sourcing them from leading Israeli companies. Initially they worked on an XR headset and later worked on making our service available on mobile and TV.

80,000 € – Marketing

We went to trade fairs that are essential for the entertainment and media world — these are in Europe, the USA, and Singapore. It’s important to go to all of these given the different geographical market sectors they cater to. So every quarter we invested a bit of our budget in these shows to make sure we had the right presence. It goes beyond presence. It’s a good place to hear feedback, share your vision and ideas, and to set up meetings.

We wrote white papers on deeply pragmatic topics and published them on our website, something I think is vital for an overall marketing push. We also got our website redesigned to emphasise our focus. 

120,000€ – Sales

We hired one new team member to cover sales. We focused on direct sales – approaching the people we wanted to talk to directly to ensure our first wave of customers were ones we had chosen strategically and whom we could leverage. Early on, we decided we wanted to engage primarily with the market leaders and so long before we had a product, we did so.

We did this by meeting with them, sharing our vision, hearing their pain points, brainstorming with them. Since many members of my team have a background in working in the media, we brought a lot of experience with us and were in a position to start helping them and to really think about how we wanted to tackle challenges. That helped us to meet a lot of CXO-level executives, ie. people with whom you would like to interact because they’re the ones driving the vision within the company, and making the decisions.

The Surprisingly Effective Expenditure: Hiring The Best Possible Team

Over the half a year we spent the million, we hired ten staff members. The vast majority were developers and we also hired two people to handle the commercial side of things, marketing and product aspects. We decided not to compromise on the people we hired. Especially at the beginning, when these people will form the skeleton of your company, metaphorically speaking, this is essential.

I recognise this is also hard to do: at the beginning, your budget is quite limited and you might be tempted to hire someone with less experience who is cheaper. However, I’d advise against this. Hire someone extremely professional, expect them to charge a lot and be ready for that, make sure they become an organic part of your team and take an active role in helping you lead the company, too.

Best Lesson Learned From His First Million: Need Isn’t Demand

I think it’s key to be able to differentiate need from demand. People tend to confuse the two. Needs evolve from the fact that you have a technical gap. If you are using horses, there is a gap in the market: you could use engines instead and then you get cars from that realisation. The big question is whether you have demand for that. Because demands drive success. 

So that was part of the decision we took. Yes, there was a gap in the market. But was there demand for our product? This is something we established first from in-depth market research and which I’d recommend you confirm, too, before you start on your entrepreneurial journey.