StarZero All shows Try the podcast clipper →

Jun 25, 2020 · 26m · top-founders

AI Company Ople $15m Raised, Just $500k Revenue, Overvalued?

Pedro Alves · 14m spoken Nathan Latka · 7m spoken Frank Bien · 4s spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview, SaaS host Nathan Latka examines Ople founder Pedro Alves on his company's machine learning platform, venture financing, and operational metrics. The discussion critically assesses how Ople manages a $400,000 monthly burn rate and an 80x valuation multiple while transitioning enterprise pilots into scalable annual recurring revenue.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 32.9% of the talking time here. How this is scored →

Nathan as informed peer 6.2 Guest teaching 3.0 Guest disagreement 2.6 Nathan pushing back 5.2
05100:0010:0020:005:01–8:44 · Nathan as informed peer 5/10 Founding History, Minimum Viable Product, and Accelerator Capital Nathan drills down to understand the exact pre-revenue cash required to reach an MVP and calculates Pedro's early burn rate. Pedro clearly explains the accelerator terms and recounts counterintuitive fundraising advice he received from his mentor.8:48–13:54 · Nathan as informed peer 6/10 Series A Financing, Runway Strategy, and Series B Milestones Nathan probes Pedro on his Series A runway, monthly burn rate of $400k, and ARR milestones required for a Series B. Pedro explains the nuance of valuation premiums in the machine learning sector compared to traditional SaaS metrics.13:54–17:00 · Nathan as informed peer 8/10 Current Revenue Metrics, Enterprise Pilots, and Pipeline Lead Generation Nathan catches Pedro evading his exact monthly revenue figure and methodically computes that Opal is only making about $40k/month across three paying enterprise customers. Pedro concedes that the remaining nine engagements are unclosed pilots.17:00–24:17 · Nathan as informed peer 8/10 Team Composition and Enterprise Go-to-Market Execution Nathan fiercely challenges Pedro for being drastically overvalued with an 80x multiple on $15M raised against under $500k ARR. Pedro defends his capital structure by asserting that AI Series A rounds typically require zero revenue, which Latka directly refutes based on his dataset of AI founder interviews.24:18–25:57 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire and Episode Summary Nathan runs through his standard Famous Five rapid-fire questions and summarizes the company's financial profile neutrally to close the episode.5:01–8:44 · Guest teaching 4/10 Founding History, Minimum Viable Product, and Accelerator Capital Nathan drills down to understand the exact pre-revenue cash required to reach an MVP and calculates Pedro's early burn rate. Pedro clearly explains the accelerator terms and recounts counterintuitive fundraising advice he received from his mentor.8:48–13:54 · Guest teaching 4/10 Series A Financing, Runway Strategy, and Series B Milestones Nathan probes Pedro on his Series A runway, monthly burn rate of $400k, and ARR milestones required for a Series B. Pedro explains the nuance of valuation premiums in the machine learning sector compared to traditional SaaS metrics.13:54–17:00 · Guest teaching 2/10 Current Revenue Metrics, Enterprise Pilots, and Pipeline Lead Generation Nathan catches Pedro evading his exact monthly revenue figure and methodically computes that Opal is only making about $40k/month across three paying enterprise customers. Pedro concedes that the remaining nine engagements are unclosed pilots.17:00–24:17 · Guest teaching 4/10 Team Composition and Enterprise Go-to-Market Execution Nathan fiercely challenges Pedro for being drastically overvalued with an 80x multiple on $15M raised against under $500k ARR. Pedro defends his capital structure by asserting that AI Series A rounds typically require zero revenue, which Latka directly refutes based on his dataset of AI founder interviews.24:18–25:57 · Guest teaching 1/10 The Famous Five Rapid-Fire and Episode Summary Nathan runs through his standard Famous Five rapid-fire questions and summarizes the company's financial profile neutrally to close the episode.5:01–8:44 · Guest disagreement 2/10 Founding History, Minimum Viable Product, and Accelerator Capital Nathan drills down to understand the exact pre-revenue cash required to reach an MVP and calculates Pedro's early burn rate. Pedro clearly explains the accelerator terms and recounts counterintuitive fundraising advice he received from his mentor.8:48–13:54 · Guest disagreement 2/10 Series A Financing, Runway Strategy, and Series B Milestones Nathan probes Pedro on his Series A runway, monthly burn rate of $400k, and ARR milestones required for a Series B. Pedro explains the nuance of valuation premiums in the machine learning sector compared to traditional SaaS metrics.13:54–17:00 · Guest disagreement 3/10 Current Revenue Metrics, Enterprise Pilots, and Pipeline Lead Generation Nathan catches Pedro evading his exact monthly revenue figure and methodically computes that Opal is only making about $40k/month across three paying enterprise customers. Pedro concedes that the remaining nine engagements are unclosed pilots.17:00–24:17 · Guest disagreement 6/10 Team Composition and Enterprise Go-to-Market Execution Nathan fiercely challenges Pedro for being drastically overvalued with an 80x multiple on $15M raised against under $500k ARR. Pedro defends his capital structure by asserting that AI Series A rounds typically require zero revenue, which Latka directly refutes based on his dataset of AI founder interviews.24:18–25:57 · Guest disagreement 0/10 The Famous Five Rapid-Fire and Episode Summary Nathan runs through his standard Famous Five rapid-fire questions and summarizes the company's financial profile neutrally to close the episode.5:01–8:44 · Nathan pushing back 4/10 Founding History, Minimum Viable Product, and Accelerator Capital Nathan drills down to understand the exact pre-revenue cash required to reach an MVP and calculates Pedro's early burn rate. Pedro clearly explains the accelerator terms and recounts counterintuitive fundraising advice he received from his mentor.8:48–13:54 · Nathan pushing back 4/10 Series A Financing, Runway Strategy, and Series B Milestones Nathan probes Pedro on his Series A runway, monthly burn rate of $400k, and ARR milestones required for a Series B. Pedro explains the nuance of valuation premiums in the machine learning sector compared to traditional SaaS metrics.13:54–17:00 · Nathan pushing back 8/10 Current Revenue Metrics, Enterprise Pilots, and Pipeline Lead Generation Nathan catches Pedro evading his exact monthly revenue figure and methodically computes that Opal is only making about $40k/month across three paying enterprise customers. Pedro concedes that the remaining nine engagements are unclosed pilots.17:00–24:17 · Nathan pushing back 9/10 Team Composition and Enterprise Go-to-Market Execution Nathan fiercely challenges Pedro for being drastically overvalued with an 80x multiple on $15M raised against under $500k ARR. Pedro defends his capital structure by asserting that AI Series A rounds typically require zero revenue, which Latka directly refutes based on his dataset of AI founder interviews.24:18–25:57 · Nathan pushing back 1/10 The Famous Five Rapid-Fire and Episode Summary Nathan runs through his standard Famous Five rapid-fire questions and summarizes the company's financial profile neutrally to close the episode.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 66.3% · guest 33.7%0:00 · Nathan 66.3% · guest 33.7%3:00 · Nathan 23.3% · guest 76.7%3:00 · Nathan 23.3% · guest 76.7%6:00 · Nathan 21.7% · guest 78.3%6:00 · Nathan 21.7% · guest 78.3%9:00 · Nathan 16.6% · guest 83.4%9:00 · Nathan 16.6% · guest 83.4%12:00 · Nathan 33.6% · guest 66.4%12:00 · Nathan 33.6% · guest 66.4%15:00 · Nathan 31.3% · guest 68.7%15:00 · Nathan 31.3% · guest 68.7%18:00 · Nathan 31.8% · guest 68.2%18:00 · Nathan 31.8% · guest 68.2%21:00 · Nathan 27.3% · guest 72.7%21:00 · Nathan 27.3% · guest 72.7%24:00 · Nathan 51.5% · guest 48.5%24:00 · Nathan 51.5% · guest 48.5%
Sharpest disagreement ▶ 22:15 Pedro Insists Series A Startups Have Zero Revenue

Pedro flatly rejects Latka's premise that his valuation is inflated, asserting that most Series A companies have no revenue at all and infinite multiples.

 Hardest push from Nathan ▶ 19:23 Latka Calls Out 32x Capital-to-ARR Multiple

Latka refuses Pedro's optimistic comps, directly challenging him on raising $16M with only $500k in revenue and highlighting survivorship bias.

 Biggest teaching moment ▶ 7:15 Fundraising Strategy and Runway Advice

Pedro shares how his advisor's counter-intuitive warning about accepting a small check taught him to start raising Series A immediately on day one.

 Nathan holds their own ▶ 22:30 Latka Rebuts Zero-Revenue Claim with Founder Data

Latka dismantles Pedro's claim about Series A startups by citing his empirical data from interviewing dozens of AI founders who had substantial revenue at Series A.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Founding History, Minimum Viable Product, and Accelerator Capital 5424 Nathan drills down to understand the exact pre-revenue cash required to reach an MVP and calculates Pedro's early burn rate. Pedro clearly explains the accelerator terms and recounts counterintuitive fundraising advice he received from his mentor.
Series A Financing, Runway Strategy, and Series B Milestones 6424 Nathan probes Pedro on his Series A runway, monthly burn rate of $400k, and ARR milestones required for a Series B. Pedro explains the nuance of valuation premiums in the machine learning sector compared to traditional SaaS metrics.
Current Revenue Metrics, Enterprise Pilots, and Pipeline Lead Generation 8238 Nathan catches Pedro evading his exact monthly revenue figure and methodically computes that Opal is only making about $40k/month across three paying enterprise customers. Pedro concedes that the remaining nine engagements are unclosed pilots.
Team Composition and Enterprise Go-to-Market Execution 8469 Nathan fiercely challenges Pedro for being drastically overvalued with an 80x multiple on $15M raised against under $500k ARR. Pedro defends his capital structure by asserting that AI Series A rounds typically require zero revenue, which Latka directly refutes based on his dataset of AI founder interviews.
The Famous Five Rapid-Fire and Episode Summary 4101 Nathan runs through his standard Famous Five rapid-fire questions and summarizes the company's financial profile neutrally to close the episode.

Statements from this episode (12)

Disclosure
Alves: Early investors pushed Ople to charge per model built rather than per seat
“Initially investors really wanted us to charge per model built per project done.”
Pedro Alves Jun 25, 2020 ▶ 2:55
Disclosure
Alves: Most Ople enterprise customers pay six figures yearly, a couple pay seven figures
“Most companies are going to be in a six figure yearly engagement with us just because of the number of people they have. Got a few. They're going to be in the five figure. And then we have a couple that are in the seven low seven figure range yearly, but those…”
Pedro Alves Jun 25, 2020 ▶ 3:24
Disclosure
Alves: A $100,000 annual Ople subscription covers three to six user seats
“In, in that range, that's going to be in the three to six person team. So that's still, you know, company could be a medium sized company, but you have a small little team of analysts or business developers. And that's going to be the roughly given that range.”
Pedro Alves Jun 25, 2020 ▶ 4:14
Assertion Not checkable as stated
Alves says Ople sunk $500,000 into its MVP before first revenue
“So that first dollar revenue was still in the first year. So I want to say. Less than a million dollars. It was in the six figures because the first check we got was in the first year by summer probably. So I want to say let's ballpark it around 500,000.”
Pedro Alves Jun 25, 2020 ▶ 6:18
Prediction Not checkable as stated
Alves: Ople aims to pass $4M ARR by end of 2020
“By the end of next year, yes. I want to be north of four.”
Pedro Alves Jun 25, 2020 ▶ 12:00
Prediction Not checkable as stated
Alves: Ople will finish 2019 at around $1M revenue
“So this year, I think it's going to be around one.”
Pedro Alves Jun 25, 2020 ▶ 12:05
Assertion Not checkable as stated
Alves: Ople's burn rate is roughly $400K monthly
“Yeah, it fluctuates around there.”
Pedro Alves Jun 25, 2020 ▶ 12:54
Assertion Not checkable as stated
Alves: Ople is engaged with about 12 accounts across pilots and full deployments
“Today, customers that we're fully engaged with either in pilot or above, it's about a dozen post pilot, full, then we're talking about a handful.”
Pedro Alves Jun 25, 2020 ▶ 13:55
Assertion Not checkable as stated
Alves: Ople currently has three fully contracted enterprise customers
“Three.”
Pedro Alves Jun 25, 2020 ▶ 15:35
Assertion Not checkable as stated
Alves: Recent AI Exits Reached $300M-$400M on Just $3M-$5M ARR
“In the space that we're in, like if you look at AI, there's the last two exits that I saw were in the range of the companies had between three and five ARR and sold for between three and four hundred million dollars.”
Pedro Alves Jun 25, 2020 ▶ 19:56
Prediction Not checkable as stated
Alves: Overvalued AI Startups at 200x-300x Multiples Will Fail Within a Year
“For those, I think if we wait a year, we're going to have a couple of those stories because I can see already the companies that are massively overinflated on the valuation and the amount raised in comparison to the revenue. I'm talking about, you know, betwee…”
Pedro Alves Jun 25, 2020 ▶ 21:29
Assertion Not checkable as stated
Latka: Ople Burns More Cash Monthly Than Its Total Annual Revenue
“You're burning in a month more than what your total revenue annual run rate is right now.”
Nathan Latka Jun 25, 2020 ▶ 23:52
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more