chpter. , founded by Tesh Mbaabu and his friends, raised $1.2 million pre-seed last week in a round that was led by former investors in their previous startup, MarketForce. I saw a comment from X, saying that the product that chpter. has out there so far, has so many problems, that it is basically a waiting list with a poorly-designed landing page.
Which is true. I went to see the live site myself and the observation was not far off.
HOWEVER. I think a lot of people who have never built startups don't really know how startups work. I lead a team of talented individuals building Mentorlst and I have picked up a few lessons.
First, chpter. raised pre-seed funding, which means at this point, investors were looking at four things: the team, the idea, the total addressable market (TAM) and the go-to-market strategy. And looking at chpter. , it nails down these four perfectly, except one, which I will explain.
The team, led by Tesh Mbaabu has experience running a busy startup operating in many markets, and this experience cannot be substituted for anything else. It is also the reason why even after WeWork failed after allegations of financial misappropriation, Adam Neumann, the CEO and founder, still managed to raise money from investors for his subsequent ideas. It doesn't matter whether a founder fails in his first or nth startup, as long as he has the experience of building products, managing teams and raising funds. Investors value the experience and network above everything else.
Second, the TAM. chpter. is building a product to enable e-commerce businesses to automate customer relationship management at its basic. Social/e-commerce is the new zone of commerce and the African market is untapped. I don't know whether customers really need a chpter. like product vs what they are already using such as WhatsApp Business, but it remains to be seen. This is why I have doubts with the product, but products can always grow and even pivot. The market they are after is there, the only challenge is to grab a share of that market from social media giants and existing players.
Third is GTM. I won't comment much on this but this is what a lot of founders struggle with, given that many founders confuse GTM strategy with marketing. GTM is the whole strategy of taking a new product to market and driving demand for it, and marketing is just part of it. I haven't seen much activity from chpter. in the socials, and I am hoping that the funding they have acquired will boost their GTM efforts in the coming months.
One last thing: When investors give you money, they don't deposit that money in your account and give you a debit card to spend it. Such funding always come with conditions that must be met, which includes figures and milestones you have to hit before you unlock more levels of that funding. It is the same way the IMF works. This is why startups sometimes die shortly after raising funding, because they failed to meet these conditions.
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