Brandguard was my 4th startup. Each one has been different. I’ve had different experiences and learned different lessons, and I believe its important to capture those lessons while they are still fresh. That’s my purpose today – to tell the Brandguard story and lessons learned.
BrandGuard spun out of Dianthus. The latter was a company I co-founded in 2021 that built AI technology and acquired D2C ecommerce companies. We applied that AI tech to grow them faster. We were one of the first companies to pursue this now popular AI+buyout model, and on the tech side it was fantastically successful.
But Dianthus had taken on a lot of debt and when the market turned down in 2022, people were still skeptical of the AI powered buyout model. We couldn’t raise equity and our debt provider approve the sale of one of our businesses to generate cash to fund operations so, they foreclosed. No one wanted the AI assets so I took them and created BrandGuard.
From the beginning BrandGuard had a large team for a startup. We had 7 AI people on staff from day 1. The product we eventually focused on (we had several pieces of tech) was a product that ingested brand guidelines and build AI models to check image and tech content against those guidelines. As generative AI content was set to explode, our bet was that companies couldn’t check thousands of pieces of gen AI content for brand compliance.
Our customer discovery seemed to be correct. We talked to hundreds of large companies and no one ever said “why would I use this” or “this is stupid.” In fact, most said “we can’t roll gen AI out at scale without this.” We were emboldened and felt like we were really on to something.
But sales were super slow because all of our beta customers were gated on Gen AI adoption, and they weren’t adopting it at scale. And the tech was really really difficult in some cases. We pioneered several interesting AI approaches, and, for example, were doing RAG before it had a name and was a common applied AI technique.
Once it became clear things would be slow, we talked about cutting down the team. But, this wasn’t really a tool that could work with a lean approach. Why? Because as a brand checking tool, customers wouldn’t buy it if we checked one or two brand guidelines. We needed to check most of them, or it was worthless. To do that, we determined the minimum requirement was 22 different AI models. With 7 AI experts on staff that was doable, but to slim down, we either had to support 22 AI models with 2 AI people, or, we had to support fewer models. The former was untenable and the latter made the product too weak to get people interested.
As we realized all of this, we decided it was time to sell the company and be part of something else. We spoke to many potential buyers, from other small startups to publicly traded companies, and got pretty far down the path with several. But Sightly, a growth stage AI company to whom our tech was very complimentary, quickly jumped to the front of the line because they were eager to work with us, clear about expectations, and moved fast.
Since we were running out of money, we did some things I wouldn’t normally do – things that gave us less leverage in the deal. Sightly actually hired most of our team members to get them off our payroll before the deal was closed. While most buyers, having gotten a lot of what they wanted, would use that to re-negotiate a deal, Sightly stood by their initial offer.
Sightly was a good home because they also had a vision for a world where marketing responds algorithmically to what is happening in real-time in the world. They are working towards a suite of tools that monitors news, brands, and content and creates analysis and marketing content on the fly. Having the world’s best brand checking technology as part of that made sense. And our vision of the future closely matched Sightly’s.
The deal closed earlier this year and all our investors received stock in Sightly. I’ve taken a consulting role to help Sightly with their AI strategy and help them identify other tuck-in acquisitions like BrandGuard. Sightly is growing fast and I’m excited to help so, if you have a company that may be a fit, please reach out.
I’ve very thankful that we had great investors in BrandGuard who rolled well with all the ups and downs of an early stage startup. Everyone says this is part of the game but, most investors don’t really behave that way. We were lucky. Thanks to the team as well for taking a big swing. It was fun and we learned a lot. And thanks to Sightly for displaying high integrity and good faith throughout the deal process. It speaks volumes.