The Heroes talked with Nikita Zabalotski, who is CTO of Ferret Video, which turns videos into quests or games. The company recently took 3rd place in the Seedstars Minsk 2019 competition. Nikita spoke about the essence of the startup, competition, the cost of orders, plans for the subscription service development, and efficient acceleration programs.
Mom’s help and Ferret Video startup structure
I got the BSU diploma where I studied at the Faculty of Applied Mathematics. This is how I was engaged in data analysis and joined the Ferret Video team. Until then, I used to work in IT companies, participated in hackathons in various teams, participated in the startup Zerkalo, which was later closed due to unprofitability. I have been working at Ferret Video for two years now.
I am one of the co-founders, the second person we created this project with is my mom.
She has strong recruitment skills. Being a very lively, creative, sociable person, she is the ideas factory. I am more in charge of the technical part. The third person is a hacker, a person with incredible intelligence, Siarhey Manyukevich. He dealt with the neural core of the product. My main task is to create various cases, test them with companies, develop client solutions based on the current server for the capabilities of the neural network that we have.
Ferret Video was established and legally registered 2 years ago in Poland.
We put a long of thought in the name. The word “ferret” occurred to us as it is a fun, active, lively animal. We decided that it would be well associated with our data retrieval algorithm. If you look for Ferret Video in Google, you will really find videos with ferrets instead of our website as we have just started its promotion so it’s not so easy to find us.
Now there are 7 people in our team, and we also attract a lot of people from time to time. We have designers, several core developers and people who sell our product, as well as lawyers who work permanently in Poland. The full-time lawyers are needed to support the Polish company, where there is now a high load due to the start of work.
How can a neural network find Bezrukov?
First of all, our service is a platform based on which you can make a lot of different decisions. The first part is a neural server. It creates a map of objects: you upload a video and get a complete file with data, where an object appeared, what it is, its coordinates, and so on. This part works independently, and we often create solutions based on data analysis, simply giving files in the form of graphs. The second part is various graphic additions. Our service is AR (augmented reality) and CV (computer vision). It provides viewers with objects of additional information for the video like tags next to the clothes of characters, clickable and prefabricated elements, graphics, etc.
Neural Analytics is in demand by companies producing a lot of content. For example, aquaparks that take photos (we did a smart search on them), security systems in stores, sellers' work trackers. Sometimes you need to do a smart search for TV, for example, to find all the films with Bezrukov. The program analyzes the entire database of videos, finds the actor and puts tags.
Our constructor works in real-time enabling us to work with live broadcasts.
Concerning broadcasts, we have partnership solutions with large Polish companies. We put tags on grocery videos, indicating what it is in the video, where this food can be bought, and so on. We have cases of purely game mechanics like the creation and distribution of small games from a video. For example, recently we visited the Comic-Con Russia conference and presented the game there. The game is well-developed and is distributed on disks, but it is quite difficult to launch it before a conference or on a social network because it requires a large number of resources. We took a certain episode from the big game and users had different endings depending on the interaction with opponents.
We created a small version of this game, launched it before the release of the original one, interested the audience, and gathered the target group contacts.
Integrations, order costs, and the subscription service
We created a game based on a basketball broadcast for VOKA TV, where people accumulated virtual money, which VOKA then turned into real money and contributed it to charity. It was a very unusual decision for us. Firstly, the basketball broadcast of the Belarusian team was an unusual video format. Secondly, people were engaged extensively, the charity part was exciting.
$2-5K is the price for the development of a brand-new case under a client.
Now we are going to release an automated version of the constructor, in which the price will be much lower and everything will work by subscription. The target audience is small and medium-sized businesses. The subscription price will most likely not exceed $1K. If you pay it, you will be able to upload videos, create interactive cases, and share these videos. This is usually an HTML5 game with code to embed. All sources are located on our servers and are available for download. We also work on integration with large video hosting sites.
Usually, we produce 2-3 games per month. Plus we have an internal development of our projects. Work on an order is needed to create new cases and maintain the company’s revenue. After ordering one solution, there are usually repeated orders. So we work with several large world companies, in particular, with the Polish branch of Procter & Gamble. We try not to take more orders because it will be hard to garner the required momentum.
Competitors, fleek conferences, and the LinkedIn usefulness
We have two competitors which are small companies involved in adding AR elements to a video. Other companies specialize in adding additional buttons, to display some forms at the end of a video, or to branch out a video.
We position ourselves precisely as a framework where you can configure any game mechanics or any other functionality promptly.
It is very difficult to evaluate the interactive video market right now. We thought that big computer games are our competitors, but it turned out that they are our customers. Therefore, we research the pricing policy now so that it is beneficial to us and our customers.
Usually, we get to meet customers at conferences. In the near future, there will be a major event in Serbia, then there will be meetings in Poland. Conferences are 5-10 times more effective than standard methods of finding clients because there I can immediately show examples, I can personally get to know people. It is such a warm communication.
On LinkedIn, the minimum conversion to a meeting is 5-10 out of 100 people.
I am more interested in finding customers in the European market, and co-founder Elena works in the Russian market.
The differences between local and foreign acceleration programs
We have very good experience in participating in all events of Belarus, Moscow, and Poland. We went through the acceleration as part of the Polish state grant program on the Google campus. I can only respond very well about it because it was very mild, a lot of the right steps were taken, many specialists were directed specifically at the internal development of the project. We have several partners, in particular, UX, business development, which still help us.
In Russia, there was a proposal for a Skolkovo program, but it required the presence of a Russian founder with a very large share. Everything is much more active and tougher in Russia. They like to set strict KPIs, monitor their implementation and direct funding depending on this.
In Poland, we were required to give minimal reporting and provided full discretion, which was very pleasant.
The situation was stressful as there was a new market, new people, language handicaps, so programs usually lasted several months. There were proposals of investments, but we rejected them because we did not want to dilute the share of the founders. From our early stage, we have several investors who have invested the minimum initial capital and now have a total of 5% of the company.
Now we are considering several proposals from large funds. While we have enough self-sufficiency to develop, but we want to do it faster. Investment conditions are very different, but the most confusing is the dilution of shares. The percentage of investors should not be critical, otherwise, we will lose leadership over the company and will not be able to develop it as we are doing now. Often, the specialization of the product is set as a condition, they say, we will need to narrow down to a specific case and develop it.
On average, our company is valued at $5 million.
Startup competitions paradoxes
I took part in Belarusian startup programs like “Startup of the Year”, Imaguru events, Seedstars competition, etc. There also was a fairly large number of government events, for example, “100 Ideas for Belarus”. The organization of the Belarusian Republican Youth Union was quite active and supported us at the very beginning what was very unusual to me.
In Belarus, it’s quite difficult to raise money at an early stage. Usually, investors require certain results, good MVP, first customers, and in return, they offer such amount of money that at this stage they are no longer needed. As a result, we did not take money in Belarus apart from the early ones.
We attracted a grant of $50 thousand from the Polish government, which very well helped us jump to a new stage in the creation of the product.
Russian events are usually faster and more active, more busy and intense. Once we were at an event where there were lectures of 6 hours. At Belarusian events, everything goes more gently, fun and easier. It is not that useful, of course, but the country is less. It’s harder for us to create a large-scale event because we need to attract foreign specialists and look for big money.
There were about 200 tables with experts at the Wolves Summit in Warsaw, and it was hard to find your table fast. This was one of the largest events that I have ever seen. The Polish events seemed the most productive for me as there was more conversion to contacts, more feedback from specialists and partners. They communicate more gently and understanding. Even if your opponent does not quite understand what you are doing what used to happen often to us the first reaction was admiration, and after that, the details began. In Moscow, it was often the other way around, they say, shut down the business, guys, and only then the details began. In Belarus, the reaction of competition participants is halfway between the two.