Wakelet founder on importance of 'product before profit'
Wakelet founder and CEO Jamil Khalil says that the time is not yet right for his flourishing start-up to make money.
Wakelet is a platform that allows users to ‘organise’ the internet – collating links, images and notes into handy files named ‘wakes’.
However Khalil is focused on building his product before seeking to monetise it.
“SnapChat, WhatsApp, Pinterest – they did not make money in their first three, four years,” he told BusinessCloud’s ‘tech entrepreneurs changing the world’ event at the International Festival for Business.
“Let me give you a scenario. If I have a burn rate of £50,000 per month, and I’m able to generate £50,000 this year from 50 paying customers, it’s going to cost me £100k-150k to develop the features to make it billable. It’s a waste of my time at this stage.
“The best thing I can do is build a product that’s got great features, get people using the product and grow it – I can monetise it later on.
"There are a number of options: one is a subscription-based model similar to LinkedIn where you provide additional value-added features for people who want more specific features – perhaps adding physical documents and videos straight into Wakelet instead of linking it off.
“It could be encrypted collections, so people can protect their stuff.
“There are lots of opportunities – it’s just not the right time to do it now.”
Khalil has big plans and even believes he could be the next billion-dollar business.
“If I look at Pinterest, in simple terms it is like a human version of Google images.
“I’m able to create a board, pull images together – and that company’s had $1.3b of investment and is valued at over $11bn.
“When I look at our potential, I see it as being much bigger – we should get into that range at least if we do it well.”
Khalil found that securing investment was a struggle early on, but once he has built his platform, interest from investors was renewed.
Wakelet initially secured £150,000 in convertible notes and then an additional £1.1m in the first funding round – all from angel investors.