Atavist Almost Pulled the Plug Before It Raised Money From Eric Schmidt & IAC
00:07 Evan Ratliff: We were all very negative about sort of how can we continue to operate at this level and maybe actually, there's some way in which we should pull the plug.
In 2009, Evan Ratliff and two friends co-founded Atavist, which publishes multimedia journalism, and licenses its software to third parties.
00:28 Ratliff: It really was a side project that evolved over the course of the year. And to the extent that at one time that we sort of started thinking of it like a business a little bit and we went to meet with a someone, a venture capitalist, their immediate reaction was, literally, "Why are you wasting your time publishing stories? Why don't you just develop this software program, license it to people, sell it to people? Make a lot of money. And then when you make a lot of money, then you can have your little project where you publish journalism." We kind of walked away saying, "We don't wanna be involved with any of those money people." because of the things they suggested that we needed to do.
Initially, the founders focused on building a prototype--not on creating a long-term business.
01:15 Ratliff: I remember on the first... In the first week that we launched it, this sort of realization washed over me as I looked at my inbox kind of like fill up more and more that like we were gonna have to keep doing it. That if we'd... I just thought of it as something we would do once. I mean not literally only do once, but that we wouldn't have to just kind of go at the same pace that we've been going to get it launched. And then we started really looking at, "Okay, what are revenues?" and all these sort of things. We got a little office space that we rented. And then we actually had a pretty successful first year. We were profitable.
01:56 Ratliff: But part of that was built around the fact that we weren't paying ourselves for a good portion of the year, and we were working insane hours. By the end of the year, last year, we were sort of... Felt like we had succeeded, but also we're completely overwhelmed with the amount of work we had. And we always met in bars. So, we would have these... Not that we're big drinkers, but we would have this discussions where when we first sat down... I tend to be a bit of a pessimist. So, I would sort of come in saying, "I don't know if we could keep doing this. Maybe we should... I have been thinking about quitting." And then we have maybe one drink or two drinks and we'd be sort of like, "No, but we built something. We should... " The energy level would kind of pick up a little bit.
In late 2011, Atavist decided to raise its first round of capital.
The founders would meet with more than 20 investors--not all of whom understood the business model.
02:49 Ratliff: One, I will say, prominent angel investor fell dead asleep while I was talking to him, like a presentation. He just fell completely asleep. And I wasn't sure if I should continue talking or not, but I did. Anyway, we did manage to sort of get in front of people who not only were fantastic investors, but also kind of understood all aspects of our business, and in some cases, better than we understood them. It was this relief when it all got finished because now we could stop sort of focusing every month on whether or not we had enough in the bank and we could kind of look at a time horizon that was longer. I mean we never had time say, "What is gonna happen two years from now?" We just didn't even think about what's gonna happen two years from now. And now we kind of have that luxury and hopefully, we won't completely squander it.
Atavist has now sold more than 100,000 copies of original stories, and licensed its software to such customers as TED and The Wall Street Journal.
This year, it raised just under $1.5 million in a seed round led by Eric Schmidt, before closing on a Series A round with IAC for an undisclosed amount.