How Ecomtent reached $100k ARR and got funded

At Founder Reports, we publish in-depth interviews with entrepreneurs that give behind-the-scenes access to show how they grew their businesses. This story features Max Sinclair, the co-founder of Ecomtent.

Ecomtent operates in a niche that's quickly becoming very crowded. As you'll see in this interview with co-founder Max Sinclair, fast action was key to this AI startup's early success. Rather than working on their product until it was perfect, Max's co-founder Timur created the minimum viable product (MVP) in a single weekend!

You'll love Max's practical, applicable knowledge, including Ecomtent's approach to reaching its target customers quickly. Max's ideas can easily be implemented to grow nearly any type of business.

Key Takeaways

🚀 Max and Timur recognized an opportunity and quickly created an MVP
🎯 Max used a brilliant approach to identify and reach the top 100 target customers
🎙️ Ecomtent grew with free marketing like podcast appearances and speaking at events
😍 Max shares why your startup MUST be loved by users to succeed

Overview

• Business Name: Ecomtent
• Website URL: https://www.ecomtent.ai/
• Founders: Max Sinclair and Timur Luguev
• Business Location: Online (Canada)
• Year Started: 2022
• Number of Employees/Contractors/Freelancers: 15

How much money does Ecomtent generate?

We have raised $275K USD and have $100K annual recurring revenue.

Tell us about yourself and Ecomtent.

Ecomtent is the next generation of ecommerce catalogue management. We help sellers with thousands of product listings generate and continuously optimize their visual and written product listing content and effortlessly list these across different marketplaces.

Prior to founding Ecomtent, I spent over six years working at Amazon. Here I had a number of leadership roles, including for the launch of Amazon Business (B2B) in the UK, and owning customer browse and catalogue quality for the launch of Amazon in Singapore, and scaling up the Amazon Grocery business.

My co-founder and I met on a founder speed dating program in Toronto. About a month into this program, in October last year, Stable Diffusion released its first public model. This was pre-ChatGPT, Midjourney had only been around for a couple of months, and nobody (including me) had heard of it when the technology was really in its infancy and felt like magic.

How does your business make money?

We have two subscription models: $165 per brand per month for individual brands and $1,650 enterprise-level for aggregators and agencies.

What was your inspiration for starting Ecomtent?

My co-founder, being a PhD in AI, showed me on Stable Diffusion how you could write a text prompt, and create an image in seconds. Having spent the six previous years working at Amazon, I immediately saw how transformative this would be for the e-commerce industry. I asked him if it would be possible to put a specific product into the generation rather than generating generic pictures, and he built a quick minimum viable product (MVP) over a weekend.

That MVP had all the problems typical of Generative AI - distortions, hallucinations, etc., but the potential was there. From that point onwards, we were all in, with a vision of bringing this new technology (Generative AI) to an industry I knew very well (e-commerce).

Understanding how efficient it was to generate merchandising content with AI - not just images but copy and infographic visuals, we developed the hypothesis that 90%+ of content on marketplaces would be AI-generated within the next five years, an estimate that looks conservative now.

In many ways, the timing was incredibly lucky. The stars aligned that at the very same time, I was leaving the corporate world to satisfy my lifelong ambition of starting a business, and this once-in-a-generation technological shift occurred. I found myself at the starting line of the race that is playing out right now, and I felt (and still feel) that good execution will win.

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How and when did you launch the business?

We launched the business and went full-time immediately.

How did you make the transition to full-time?

I’ve had side hustles in the past, and they never amounted to anything for me as I had quite a demanding job and wanted also to maintain a social life. I, therefore, had to go all-in to make something work.

How much money did you invest to start Ecomtent?

At the beginning, we had nothing. We paid for expenses personally, and at one stage, I lent the business $3,000 from my savings, which I am yet to recuperate. We were extremely scrappy and built on a shoestring.

After a few months, we raised a small Angel round, which we used to hire AI Engineers. After about a year we got $120,000 investment from Techstars. Some more Angel capital followed after this.

How did you find your first few clients or customers?

Our initial sales came from my network. As a commercial founder, you must have strong industry expertise in the area you are building:

So you have experienced problems you are solving first hand (and at a very least multiple times second hand)

So you can pick up your contact book and make these first sales with people who are willing to purchase based on personal trust built up over time

So you have a good answer to the “why you” question that investors will later inevitably ask

What was your first year in business like?

I’ve never worked so hard in my life, and I’ve loved every second of it. Even when I am not working, I am doing something related to relax (e.g. write out this interview, which isn’t really work, is related in some regard).

What strategies did you use to grow the business?

Following selling into my network, I broadened the outreach. I drew up a list of our top ~100 target customers in Excel, went through LinkedIn, and noted anyone that I had a 1st or 2nd-degree connection at these companies, and I leveraged my ex-colleagues for these introductions.

We grew through this B2B founder sales strategy and then also through word of mouth. This is a key growth channel - Wise acquires 1 million new users a quarter, with 70% of this acquisition driven by word of mouth. For an early-stage start-up, it’s one of the critical signs to demonstrate that you are getting close to product market fit.

Participating in industry-relevant podcasts and speaking at key events created buzz around Ecomtent. This not only provided free marketing but also helped in building credibility and authority in the industry. I always advise against paying for such opportunities; if your product is truly innovative, event organizers and podcast hosts will recognize its value for their audience​​.

Engaging in online communities like Reddit, Facebook groups, and Slack channels can be incredibly beneficial. The key is to add value to these communities, offer sound advice, and avoid overt self-promotion, as most online platforms have strict policies against it. This approach can help in building a loyal user base and drive organic growth​​.

Our final growth lever I focused on in the early days was SEO. This was a new topic for me, and I learned a lot from Google’s podcast ‘Search off the Record.’ It helps to contextualize Google’s approach to ranking content, which in their words, favors “fresh, helpful and people-first content”. If you deliver this, it will align with Google’s nuanced, evolving, and intelligent and evolving signals in their algorithms.

Tell us about your team.

We have four full-time staff: the two cofounders, an AI Engineer, and a full-stack developer. We also have had many interns supporting us, mostly in prompt engineering research, but more recently in social media and sales.

What are your future plans for the business?

We are building an industry-defining ecommerce/AI company. Watch this space.

What was the turning point when you knew your business was successful?

I knew we switched gears when we got accepted onto Techstars, and therefore relocated out to San Francisco for a few months to participate in the program.

What advice do you have for other entrepreneurs?

All you need is Love. Love is the YC investment thesis. At the time of writing, YC had over 20,000 applications, including Ecomtent, and funded 282 companies. The secret sauce they are searching for is customer love.

The reason behind it is simple – it’s easy for products that people really love to go viral quickly through word of mouth. It's much harder to scale a product that users don’t think is really great because you have to do all the hard yards yourself to generate demand.

The type of scaling you want is when you don’t have to generate demand, because users want to instinctively share it. It also drives long-term retention. As Sam Altman says, “People don’t stick with a product they don’t love. It's easy to get them to try something with a clever growth hack.”

YC is looking for groundbreaking ideas that users cannot live without. As Sam says, for their application, it's better to have 100 people who really love a company than a million people who tried it and just liked it.

In the podcast discussion I listened to with Ried Hoffman (an early episode of Masters of Scale podcast), they discussed the extreme example of the iPhone and the lengths people would go to in developing countries to prioritize having this product compared to all other basic human needs.

Sam demonstrated this principle himself with the viral adoption of ChatGPT, which reached 100 million users in just two months. Think about how you came across ChatGPT. It was probably from a tech influencer tweet, an article, or a friend. It almost certainly was not from paid marketing from OpenAI.

As Techstars later taught me, don’t get caught in the trap of thinking this is only for direct-to-consumer products. Business buyers are people, too. They often share things with colleagues or at conferences with friends in their industry.

I’ll take myself as an example. At the time of writing this, I have just onboarded Hubspot for Ecomtent. I chose Hubspot out of a million CRMs as it has been recommended to me by multiple other founders. I’ve never seen an ad for it. And I am loving the product – it’s easy to use, its integrations are incredible, and it allows me to automate a lot of workflows I didn’t even think was possible.

On the other hand, I have been blasted non-stop in adverts for Monday.com, to the point I actually just find it quite annoying. I’ve never heard of any fellow founders using them, so I didn’t even consider them when making the purchase decision.

I used Salesforce in my first ever job at Amazon and hated it as I found it super clunky and time-consuming to keep updated, so it would have taken a lot to pull me back there. Your job as a founder is to get people to the “you’ve got to try this” moment.

If you had to start from scratch, where would you begin?

My learning would be to pick something unsexy and hard to solve. This is a learning we are taking fully into our latest product. Our initial product’s critical flaw is that it is too sexy and cool. Generating beautiful product images instantly with AI makes for a pretty glamorous product demo, and thus many other entrepreneurs/intrapreneurs have been drawn to it. The fact they may not have any prior experience in marketing or e-commerce didn’t dissuade them. Two events drilled home this lesson for me.

Firstly, in one of our many applications to future accelerators, one of the principal VCs ended up almost laughing at us when he read our pre-submitted company one-liner, simply because he had heard it so many times before. We had evolved and refined our vision since this application form we submitted a few months before the meeting, but this didn’t matter.

You could tell that he was bemused by the fact that his team had even suggested he take the call with us, and the damage was done with this first impression.

The second event was perhaps even more brutal. As part of my continuing journey to obtain customer feedback, I started to run a WhatsApp group for Amazon sellers and customers. This group was billed as a group for sellers to share the latest AI tools, which it is, but it also serves as a very useful way for me to talk directly to my customer base, get feedback, and get volunteers to test the latest product features pre-launching.

My friends who are Amazon Sellers are on it, and whenever I go to an event, I add the sellers I speak to, as it serves as an easy way for them to remember me and our service. One of our competitors sneakily joined this group (I advertised the link publicly on all of our blog posts) and proceeded to message every single one of my customers there, offering to generate AI product images for free.

I guess that this competitor probably did not gain any customers from such a spammy message. However, the illusion of uniqueness that I had crafted with my customers was shattered, as they directly saw others offering a similar service.

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